As filed with the Securities and Exchange Commission on February 27, 2004
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: 811-4255
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
(Exact Name of the Registrant as Specified in Charter)
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
(Address of Principal Executive Offices - Zip Code)
Registrant's Telephone Number, including area code: (212) 476-8800
Peter E. Sundman, Chief Executive Officer
Neuberger Berman Advisers Management Trust
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
Jeffrey S. Puretz, Esq.
Dechert LLP
1775 I Street, N.W.
Washington, D.C. 20006
(Names and Addresses of agents for service)
Date of fiscal year end: December 31, 2003
Date of reporting period: December 31, 2003
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. Section 3507.
ITEM 1. REPORTS TO SHAREHOLDERS
Annual Report [NEUBERGER | BERMAN LOGO]
December 31, 2003 A Lehman Brothers Company
Neuberger Berman
Advisers
Management
Trust
Balanced
Portfolio(R)
B1014 02/04
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Balanced Portfolio Managers' Commentary
U.S. stocks staged a broad rally in 2003, helping the AMT Balanced Portfolio
equity investments to generate strong gains while a challenging environment for
bonds limited the portfolio's fixed income investments to a modestly positive
return.
Stock markets benefited from the quick military successes in Iraq, major tax
reform, lower interest rates, and ultimately, a resurging U.S. economy, which
improved corporate earnings results. Most major indices were up, with growth
and value achieving comparable results, while cyclical and lower quality firms
tended to outshine larger, higher quality companies.
Average Annual Total Return(1)
Merrill Lynch
Balanced 1-3 Year Russell Midcap(R)
Portfolio Treasury Index(2) Growth(2) S&P 500(2)
1 Year 16.28% 1.90% 42.71% 28.67%
5 Year 1.25% 5.37% 2.01% (0.57%)
10 Year 6.19% 5.68% 9.40% 11.06%
Life of Fund 7.80% 6.72% 11.72% 12.05%
- ---------------------------------------------------------------------------------------------
Inception Date 02/28/1989
[REPRESENTATION OF LINE CHART]
Comparison of a $10,000 Investment
Merrill Lynch
Balanced 1-3 Year Russell Midcap (R)
Portfolio Treasury Index Growth S&P 500
- ---------------------------------------------------------------------------------------------
12/31/1993 $ 10,000 $ 10,000 $ 10,000 $ 10,000
12/31/1994 $ 9,664 $ 10,057 $ 9,784 $ 10,132
12/31/1995 $ 11,960 $ 11,163 $ 13,108 $ 13,934
12/31/1996 $ 12,784 $ 11,719 $ 15,399 $ 17,131
12/31/1997 $ 15,271 $ 12,499 $ 18,870 $ 22,845
12/31/1998 $ 17,130 $ 13,373 $ 22,241 $ 29,373
12/31/1999 $ 22,880 $ 13,783 $ 33,648 $ 35,553
12/31/2000 $ 21,839 $ 14,885 $ 29,695 $ 32,317
12/31/2001 $ 18,921 $ 16,120 $ 23,711 $ 28,479
12/31/2002 $ 15,676 $ 17,048 $ 17,213 $ 22,187
12/31/2003 $ 18,228 $ 17,371 $ 24,565 $ 28,548
Value as of 12/31/03
Balanced Portfolio $18,228
Merrill Lynch 1-3 Year Treasury Index $17,371
Russell Midcap(R) Growth $24,565
S&P 500 $28,548
This chart shows the value of a hypothetical $10,000 investment in the Fund over
the past 10 fiscal years, or since the Fund's inception, if it has not operated
for 10 years. The results are compared with benchmarks, which may include a
broad-based market index and or a narrower index. Please note that market
indexes do not include expenses. All results include the reinvestment of
dividends and capital gain distributions. Results represent past performance and
do not indicate future results.
In the equity portion of the Portfolio, our security selection within
Industrials, Telecommunications and Energy enhanced results compared with our
benchmark, the Russell Midcap Growth Index. In the Industrials sector, our
emphasis on education stocks was particularly useful, while our Energy
holdings--despite the sector's relative weakness--benefited from their ability
to increase reserves and production of oil and gas. In terms of sector
allocation, our overweight in Information Technology (IT), one of the best
performing sectors, helped returns, as did our underweight in the anemic
Consumer Staples sector.
On the down side, our stock selection within IT hurt relative performance. Our
holdings, which were defensively oriented at the start of the second quarter,
fell behind as the indices rose sharply in April and May. For example, we held
technology stocks that would perform well if tech spending did not accelerate
significantly. But as fundamentals improved, these defensive, less cyclical,
lower octane names underperformed the more cyclical, higher beta names in the
sector. In May, we repositioned the Portfolio to take advantage of this market
shift.
Within our fixed income investments, sector allocation, security selection and
duration management were the primary reasons for our strong performance
relative to our benchmark, the Merrill Lynch 1-3 Year Treasury Index.2 As the
economic outlook brightened early in the year, we began shortening duration
(sensitivity to interest rates), a decision that helped us preserve capital in
July, the worst month for bonds since December 1981. We also maintained our
allocation of corporate bonds, which materially outperformed all
2
other fixed income sectors in 2003. Our security selection within corporate
bonds also helped returns.
We dramatically reduced our allocation to government agency bonds from 11.4% of
the overall portfolio at the start of 2003 to under 3% at the end of June. This
was done for valuation reasons, but proved fortuitous as we avoided a sharp
sell-off sparked by negative news concerning Freddie Mac. We continue to
maintain limited exposure in this area. In the mortgage sector, we maintained
only a modest weighting throughout the year, due to the fast prepayment
environment spawned by low mortgage rates. However, with the refinancing boom
ending, prepayment risk diminishing, and yields well above Treasuries, the
mortgage sector may be positioned to deliver solid returns in the future.
Looking forward, we remain bullish on stocks for the short term. We believe the
equity markets are likely to overshoot on the upside, as they typically do.
Although greater uncertainty prevails looking farther out, we think that a
positive scenario could develop as follows: Employment grows slowly,
productivity stays high and inflation remains low; margins expand; the Fed stays
on hold through next year, interest rates are stable and even decline, the
dollar gradually descends, and GDP expands at a 5% plus rate; as a result,
earnings grow more than current expectations and price/earnings multiples expand
as investors risk more capital from their money market holdings. This paints a
favorable economic picture for stocks to continue on their upward trend.
Regarding bonds, we remain cautious. Thus far, inflation remains dormant and
the Federal Reserve appears committed to keeping a lid on short-term interest
rates. But a weakening dollar, an expanding budget deficit, rising commodity
prices, a strengthening global economy and a relatively steep yield curve have
put us on alert that this period of falling interest rates may be over. If we
feel prevailing economic trends justify a reversal of the Fed's current
accommodative monetary policy, we will further reduce the portfolio's interest
rate exposure so that we can quickly roll over into higher yielding securities.
As always, we remain focused on finding value in the fixed income arena.
Sincerely,
/s/Ted Giuliano
- ---------------
/s/ Catherine Waterworth
- ------------------------
/s/ Jon D. Brorson
- ------------------
/s/ Kenneth J. Turek
- --------------------
TED GIULIANO, CATHERINE WATERWORTH,
JON D. BRORSON, KENNETH J. TUREK
PORTFOLIO CO-MANAGERS
1. 16.28%, 1.25%, and 6.19% were the average annual total returns for the 1-,
5- and 10-year periods ended December 31, 2003. Neuberger Berman Management
Inc. ("NBMI") has agreed to absorb certain expenses of the AMT Portfolios.
Without this arrangement, which is subject to change, the total returns of the
Portfolios would be less. Total return includes reinvestment of dividends and
capital gain distributions. Performance data quoted represent past performance
and the investment return and principal value of an investment will fluctuate
so that the shares, when redeemed, may be worth more or less than original
cost. The performance information does not reflect fees and expenses of the
insurance companies.
3
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
2. The Russell Midcap[RegTM] Growth Index measures the performance of those
Russell Midcap[RegTM] Index companies with higher price-to-book ratios and
higher forecasted growth values. The Russell Midcap Index measures the
performance of the 800 smallest companies in the Russell 1000[RegTM] Index,
which represents approximately 26% of the total market capitalization of the
Russell 1000 Index (which, in turn, consists of the 1,000 largest U.S.
companies, based on market capitalization). The S&P 500 Index is widely
regarded as the standard for measuring large-cap U.S. stock market performance
and includes a representative sample of leading companies in leading
industries. 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 these indices are
prepared or obtained by NBMI and include reinvestment of all dividends and
capital gain distributions. The Portfolio may invest in many securities not
included in the above-described indices.
The investments for the Portfolio are managed by the same portfolio manager(s)
who manage one or more other mutual funds that have similar names, investment
objectives and investment styles as the Portfolio. You should be aware that the
Portfolio is likely to differ from the other mutual funds in size, cash flow
pattern and tax matters. Accordingly, the holdings and performance of the
Portfolio can be expected to vary from those of the other mutual funds.
The composition, industries and holdings of the Portfolio are subject to
change.
Shares of the separate Portfolios of Neuberger Berman Advisers Management Trust
are sold only through the currently effective prospectus and are not available
to the general public. Shares of this Portfolio may be purchased only by life
insurance companies to be used with their separate accounts that fund variable
annuity and variable life insurance policies and by certain qualified pension
and retirement plans.
(C) 2004 Neuberger Berman Management Inc., distributor. All rights reserved.
4
Schedule of Investments Balanced Portfolio
- ------------------------------------------
Number of Shares Market Value+
Common Stocks (55.0%)
Biotechnology (3.1%)
8,500 Celgene Corp. $ 382,670*
11,000 Chiron Corp. 626,890*
11,500 Genzyme Corp. 567,410*
11,000 Gilead Sciences 639,540*
13,500 NPS Pharmaceuticals 414,990*
---------
2,631,500
Building, Construction & Furnishing (0.3%)
2,500 Centex Corp. 269,125
Business Services (2.7%)
4,500 Affiliated Computer
Services 245,070*
25,000 Alliance Data Systems 692,000*
9,650 Corporate Executive Board 450,366*
14,000 Education Management 434,560*
9,800 Stericycle, Inc. 457,660*\P
---------
2,279,656
Communications Equipment (1.7%)
9,500 Broadcom Corp. 323,855*\P
31,000 Juniper Networks 579,080*\P
13,500 UTStarcom, Inc. 500,445*
---------
1,403,380
Consumer Cyclicals (0.9%)
21,000 Williams-Sonoma 730,170*
Diversified (0.4%)
6,000 iShares Russell 2000
Growth Index Fund 355,560\P
Electrical & Electronics (1.0%)
8,500 Jabil Circuit 240,550*
18,500 Molex Inc. 645,465
---------
886,015
Energy (1.7%)
4,000 Kinder Morgan 236,400
8,000 Murphy Oil 522,480
23,649 XTO Energy 669,267
---------
1,428,147
Entertainment (0.8%)
18,000 International Game
Technology 642,600
Financial Services (3.5%)
10,800 Capital One Financial 661,932
12,000 Franklin Resources 624,720
19,000 Investors Financial
Services 729,790\P
8,200 Moody's Corp. 496,510
12,100 New York Community
Bancorp 460,405
---------
2,973,357
Food & Beverage (0.6%)
8,000 Whole Foods Market 537,040
Number of Shares Market Value+
Health Care (4.3%)
6,000 Allergan, Inc. $ 460,860
6,000 C. R. Bard 487,500
27,500 Caremark Rx 696,575*
10,500 Henry Schein 709,590*
6,375 INAMED Corp. 306,382*
6,000 Invitrogen Corp. 420,000*
10,000 Teva Pharmaceutical
Industries ADR 567,100\P
---------
3,648,007
Industrial (6.4%)
9,400 Danaher Corp. 862,450
6,500 Donaldson Co. 384,540
15,500 Fastenal Co. 774,070
13,000 Gentex Corp. 574,080
10,000 Harman International
Industries 739,800\P
26,700 J. B. Hunt Transport
Services 721,167*
10,000 SPX Corp. 588,100*
16,500 Swift Transportation 346,830*
23,000 United Rentals 442,980*
---------
5,434,017
Industrial & Commercial Products (0.5%)
7,000 Parker-Hannifin 416,500
Insurance (0.2%)
5,500 China Life Insurance ADR 181,720*
Internet (0.4%)
6,500 Amazon.com 342,160*
Leisure (1.4%)
14,000 Mandalay Resort Group 626,080\P
15,000 Royal Caribbean Cruises 521,850\P
---------
1,147,930
Manufacturing (0.3%)
2,500 Eaton Corp. 269,950
Media (1.9%)
7,500 E.W. Scripps 706,050
5,500 Getty Images 275,715*
15,725 Univision Communications 624,125*
---------
1,605,890
Medical Equipment (2.5%)
12,750 Varian Medical Systems 881,025*
25,500 VISX, Inc. 590,325*
9,000 Zimmer Holdings 633,600*
---------
2,104,950
Metals (0.3%)
6,500 Freeport-McMoRan Copper
& Gold 273,845
Packing & Containers (1.0%)
12,000 Packaging Corp. of America 262,320
24,500 Pactiv Corp. 585,550*
---------
847,870
See Notes to Schedule of Investments 5
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Number of Shares Market Value+
Pharmaceutical (0.4%)
7,500 Watson Pharmaceuticals $ 345,000*
Retail (6.0%)
10,000 CarMax, Inc. 309,300*
26,300 Coach, Inc. 992,825*
15,750 Michaels Stores 696,150\P
14,000 Nordstrom, Inc. 480,200
14,000 PETsMART, Inc. 333,200
27,000 Ross Stores 713,610
19,500 Staples, Inc. 532,350*
14,500 Tiffany & Co. 655,400
13,500 Tuesday Morning 408,375*
----------
5,121,410
Semiconductors (5.1%)
25,000 ASML Holding ADR 501,250*
18,000 Fairchild Semiconductor
International 449,460*
20,500 Intersil Corp. 509,425
8,500 KLA-Tencor 498,695*
10,000 Lam Research 323,000*
24,500 Microchip Technology 817,320
8,300 National Semiconductor 327,103*
9,500 QLogic Corp. 490,200*
10,000 Silicon Laboratories 432,200*
----------
4,348,653
Software (3.7%)
7,200 Cognos, Inc. 220,464*
5,400 Electronic Arts 258,012*
16,500 Mercury Interactive 802,560*
22,000 PeopleSoft, Inc. 501,600*
22,000 Symantec Corp. 762,300*
16,200 VERITAS Software 601,992*
----------
3,146,928
Technology (2.8%)
9,000 Agilent Technologies 263,160*
31,500 Corning Inc. 328,545*
8,500 SanDisk Corp. 519,690*
14,500 Unisys Corp. 215,325*
16,500 Zebra Technologies 1,095,105*
----------
2,421,825
Telecommunications (1.1%)
68,500 Nextel Partners 921,325*\P
Total Common Stocks
(Cost $36,920,571) 46,714,530
----------
See Notes to Schedule of Investments 6
Schedule of Investments Balanced Portfolio cont'd
- -------------------------------------------------
Principal Amount Rating[sec] Market Value+
Moody's S&P
U.S. Treasury Securities (8.8%)
$ 1,000,000 U.S. Treasury Bills, 0.93%, due 1/2/04 TSY TSY $ 999,974
795,000 U.S. Treasury Bills, 0.87%, due 4/22/04 TSY TSY 792,750
390,000 U.S. Treasury Notes, 2.88%, due 6/30/04 TSY TSY 393,565
2,950,000 U.S. Treasury Notes, 2.13%, due 8/31/04 TSY TSY 2,970,166
185,000 U.S. Treasury Notes, 1.88%, due 9/30/04 TSY TSY 186,048
90,000 U.S. Treasury Notes, 2.13%, due 10/31/04 TSY TSY 90,699
430,000 U.S. Treasury Notes, 2.00%, due 11/30/04 TSY TSY 433,074
1,500,000 U.S. Treasury Notes, 1.63%, due 3/31/05 TSY TSY 1,505,157
130,000 U.S. Treasury Notes, 1.88%, due 11/30/05 TSY TSY 130,244
----------
Total U.S. Treasury Securities (Cost $7,490,990) 7,501,677
U.S. Government Agency Securities (2.1%)
1,420,000 Fannie Mae, Notes, 5.25%, due 6/15/06 AGY AGY 1,519,011
250,000 Freddie Mac, Notes, 4.25%, due 6/15/05 AGY AGY 259,500
----------
Total U.S. Government Agency Securities (Cost $1,686,311) 1,778,511
Mortgage-Backed Securities (4.1%)
Fannie Mae
194,656 Collateralized Mortgage Obligations, Planned Amortization
Certificates, Ser. 2003-16, Class PA, 4.50%, due 11/25/09 AGY AGY 198,875
1,099,882 Pass-Through Certificates, 5.50%, due 9/1/17 AGY AGY 1,140,986
Freddie Mac
200,000 Collateralized Mortgage Pass-Through Certificates, Ser. 2592,
Class PA, 4.50%, due 12/15/07 AGY AGY 202,260
161,580 Pass-Through Certificates, 5.00%, due 2/1/07 AGY AGY 166,531
227,982 Pass-Through Certificates, 5.50%, due 2/1/07 AGY AGY 234,701
Government National Mortgage Association
1,500,001 Pass-Through Certificates, 6.00%, due 1/15/33 AGY AGY 1,560,282
----------
Total Mortgage-Backed Securities (Cost $3,695,820) 3,503,635
Corporate Debt Securities (22.4%)
210,000 Abitibi-Consolidated, Inc., Bonds, 8.30%, due 8/1/05 Ba1 BB+ 222,210
120,000 Allied Waste North America, Inc., Guaranteed Senior Notes, Ser. B,
7.63%, due 1/1/06 Ba3 BB- 126,300
400,000 Allstate Corp., Senior Notes, 7.88%, due 5/1/05 A1 A+ 431,528
200,000 American General Finance Corp., Floating Rate Notes, Ser. G, 1.55%,
due 12/17/04 A1 A+ 200,662
400,000 AT&T Corp., Notes, 6.75%, due 4/1/04 Baa2 BBB 404,908
200,000 AT&T Wireless Services, Inc., Senior Notes, 7.35%, due 3/1/06 Baa2 BBB 218,706
550,000 Bank One Corp., Notes, 6.50%, due 2/1/06 Aa3 A 597,017
250,000 BankBoston N.A., Subordinated Notes, 6.50%, due 12/19/07 A1 A 277,739
200,000 Bausch & Lomb, Inc., Notes, 6.75%, due 12/15/04 Ba1 BBB- 207,250
410,000 Bear Stearns Co., Inc., Notes, 6.50%, due 5/1/06 A1 A 446,911
400,000 Boeing Capital Corp., Senior Notes, 5.65%, due 5/15/06 A3 A 427,058
300,000 Bombardier Capital, Inc., Notes, 7.50%, due 8/15/04 Baa3 BBB- 310,875**
400,000 British Telecom PLC, Notes, 7.88%, due 12/15/05 Baa1 A- 440,805
270,000 Caterpillar Financial Services Corp., Notes, 1.21%, due 11/14/05 A2 A 269,888
335,000 Caterpillar Financial Services Corp., Notes, 6.88%, due 8/1/04 A2 A 345,496
145,000 Chase Manhattan Corp., Subordinated Notes, 7.25%, due 6/1/07 A2 A 164,452
200,000 Citizens Communications Co., Notes, 8.50%, due 5/15/06 Baa2 BBB 218,372
200,000 Comcast Cable Communications, Senior Notes, 6.38%,
due 1/30/06 Baa3 BBB 215,310
See Notes to Schedule of Investments 7
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Principal Amount Rating[sec] Market Value+
Moody's S&P
$ 120,000 Cox Communications, Inc., Notes, 7.50%, due 8/15/04 Baa2 BBB $ 124,012
200,000 Cox Communications, Inc., Notes, 7.75%, due 8/15/06 Baa2 BBB 224,331
210,000 Daimler Chrysler N.A. Holdings Corp., Guaranteed Notes, 6.40%,
due 5/15/06 A3 BBB 224,995
50,000 Delhaize America, Inc., Guaranteed Notes, 7.38%, due 4/15/06 Ba1 BB+ 53,750
430,000 Dow Chemical Co., Notes, 5.25%, due 5/14/04 A3 A- 434,650
275,000 EOP Operating Limited Partnership, Notes, 6.50%, due 1/15/04 Baa1 BBB+ 275,335
170,000 EOP Operating Limited Partnership, Notes, 6.63%, due 2/15/05 Baa1 BBB+ 178,606
200,000 Everest Reinsurance Holdings, Inc., Senior Notes, 8.50%,
due 3/15/05 A3 A- 214,466
500,000 General Electric Capital Corp., Medium-Term Notes, Ser. A, 4.25%,
due 1/28/05 Aaa AAA 514,066
890,000 General Motors Acceptance Corp., Notes, 6.85%, due 6/17/04 A3 BBB 910,966
150,000 Great Lakes Power, Inc., Notes, 8.30%, due 3/1/05 Baa3 BBB- 161,250
470,000 Gulf Canada Resources, Senior Notes, 8.38%, due 11/15/05 A3 520,057
250,000 Hartford Life, Inc., Notes, 6.90%, due 6/15/04 A3 A- 255,838
300,000 HCA, Inc., Notes, 5.25%, due 11/6/08 Ba1 BBB- 305,741
200,000 Hertz Corp., Senior Notes, 8.25%, due 6/1/05 Baa2 213,173
200,000 International Lease Finance Corp., Floating Rate Notes, 2.40%,
due 1/13/05 A1 AA- 202,445
270,000 International Lease Finance Corp., Medium-Term Notes, Ser. M,
5.50%, due 6/7/04 A1 AA- 274,479
200,000 International Paper Co., Notes, 8.13%, due 7/8/05 Baa2 BBB 217,870
280,000 ITT Corp., Notes, 6.75%, due 11/15/05 Ba1 BB+ 294,000
600,000 John Deere Capital Corp., Floating Rate Senior Notes, 1.47%, due
5/20/05 A3 A- 600,436
110,000 Jones Intercable, Inc., Senior Notes, 7.63%, due 4/15/08 Baa3 BBB 126,098
400,000 Lear Corp., Guaranteed Senior Notes, Ser. B, 7.96%, due 5/15/05 Ba1 BBB- 428,000
190,000 Mallinckrodt, Inc., Notes, 6.50%, due 11/15/07 Ba3 BBB- 200,925
400,000 Merrill Lynch & Co., Inc., Floating Rate Medium-Term Notes, Ser. B,
1.41%, due 2/3/05 Aa3 A+ 400,861
195,000 Methanex Corp., Notes, 7.75%, due 8/15/05 Ba1 BBB- 205,725
235,000 Morgan Stanley Dean Witter & Co., Notes, 7.75%, due 6/15/05 Aa3 A+ 255,070
210,000 National Rural Utilities Cooperative Finance Corp., Collateral Trust,
6.00%, due 5/15/06 A1 A+ 226,468
450,000 Nationwide Mutual Insurance Co., Notes, 6.50%, due 2/15/04 A2 A- 452,630**
400,000 Pacific Bell, Notes, 6.25%, due 3/1/05 A1 A+ 420,159
23,100 PDVSA Finance Ltd., Notes, 8.75%, due 2/15/04 Caa1 B+ 23,273
200,000 Pemex Project Funding Master Trust, Guaranteed Notes, 9.13%,
due 10/13/10 Baa1 BBB- 237,500
125,000 Pioneer National Resources, Senior Notes, 8.25%, due 8/15/07 Ba1 BB+ 144,377
390,000 PNC Funding Corp., Guaranteed Subordinated Notes, 7.75%, due
6/1/04 A3 BBB+ 399,950
250,000 Powergen US Funding LLC, Notes, 4.50%, due 10/15/04 A3 BBB+ 254,543
100,000 Quest Diagnostics, Inc., Senior Notes, 6.75%, due 7/12/06 Baa3 BBB 109,284
225,000 Raytheon Co., Notes, 6.50%, due 7/15/05 Baa3 BBB- 239,777
200,000 Reliant Energy Resources Corp., Notes, Ser. B, 8.13%, due 7/15/05 Ba1 BBB 213,607
225,000 Royal Caribbean Cruises Ltd., Senior Notes, 8.13%, due 7/28/04 Ba2 BB+ 232,313
370,000 Sara Lee Corp., Medium-Term Notes, Ser. B, 6.40%, due 6/9/05 A3 A+ 393,213
380,000 Time Warner, Inc., Notes, 5.63%, due 5/1/05 Baa1 BBB+ 397,781
200,000 Tyco International Group S.A., Guaranteed Notes, 5.88%,
due 11/1/04 Ba2 BBB- 205,500
380,000 Tyco International Group S.A., Guaranteed Notes, 6.38%,
due 6/15/05 Ba2 BBB- 399,950
325,000 Tyson Foods, Inc., Notes, 6.63%, due 10/1/04 Baa3 BBB 333,951
240,000 Walt Disney Co., Notes, 4.88%, due 7/2/04 Baa1 BBB+ 244,163
See Notes to Schedule of Investments 8
Schedule of Investments Balanced Portfolio cont'd
- -------------------------------------------------
Principal Amount Rating[sec] Market Value+
Moody's S&P
$ 400,000 Washington Mutual, Inc., Senior Notes, 5.63%, due 1/15/07 A3 BBB+ $ 431,106
300,000 Weyerhaeuser Co., Notes, 5.50%, due 3/15/05 Baa2 BBB 312,317
------------
Total Corporate Debt Securities (Cost $18,351,702) 19,014,494
------------
Repurchase Agreements (6.7%)
5,660,000 State Street Bank and Trust Co. Repurchase Agreement, 0.78%, due
1/2/04, dated 12/31/03, Maturity Value $5,660,245, Collateralized
by $5,845,000 U.S. Treasury Notes, 1.25%, due 5/31/05
(Collateral Value $5,832,007)
(Cost $5,660,000) 5,660,000#
------------
Short-Term Investments (5.4%)
4,260,200 N&B Securities Lending Quality Fund, LLC 4,260,200++
355,116 Neuberger Berman Institutional Cash Fund Trust Class 355,116@
------------
Total Short-Term Investments (Cost $4,615,316) 4,615,316#
------------
Total Investments (104.5%) (Cost $78,420,710) 88,788,163##
Liabilities, less cash, receivables and other assets [(4.5%)] (3,842,576)
------------
Total Net Assets (100.0%) $ 84,945,587
------------
See Notes to Schedule of Investments 9
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Schedule of Investments Balanced Portfolio
- ---------------------------------------------------
+ Investments in equity securities are valued at the latest sales price
where that price is readily available; equity securities for which no
sales were reported, unless otherwise noted, are valued at the mean
between the closing bid and asked prices. Securities traded primarily on
the NASDAQ Stock Market are normally valued by the Fund at the NASDAQ
Official Closing Price ("NOCP") provided by NASDAQ each business day. The
NOCP is the most recently reported price as of 4:00:02 p.m., Eastern time,
unless that price is outside the range of the "inside" bid and asked
prices (i.e., the bid and asked prices that dealers quote to each other
when trading for their own accounts); in that case, NASDAQ will adjust the
price to equal the inside bid or asked price, whichever is closer. Because
of delays in reporting trades, the NOCP may not be based on the price of
the last trade to occur before the market closes. Investments in debt
securities are valued daily by obtaining bid price quotations from
independent pricing services on all securities available in each service's
data base. For all other fixed income securities requiring daily
quotations, bid prices are obtained from principal market makers in those
securities. The Fund values all other securities by a method the Board of
Trustees of Neuberger Berman Advisers Management Trust believes accurately
reflects fair value. Numerous factors may be considered when determining
the fair value of a security, including available analyst, media or other
reports, trading in futures or ADRs and whether the issuer of the security
being fair valued has other securities outstanding. 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.
# At cost, which approximates market value.
## At December 31, 2003, the cost of investments for U.S. Federal income tax
purposes was $78,789,803. Gross unrealized appreciation of investments was
$10,437,960 and gross unrealized depreciation of investments was $439,600,
resulting in net unrealized appreciation of $9,998,360, based on cost for
U.S. Federal income tax purposes.
[sec] Credit ratings are unaudited.
* Non-income producing security.
** 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 December
31, 2003, these securities amounted to $763,505 or 0.9% of net assets.
\P All or a portion of this security is on loan (see Note A of Notes to
Financial Statements).
@ Neuberger Berman Institutional Cash Fund is also managed by Neuberger
Berman Management Inc. (see Note A of Notes to Financial Statements).
++ Affiliated issuer (see Note A of Notes to Financial Statements).
See Notes to Financial Statements 10
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Assets and Liabilities
- -----------------------------------
Balanced
Neuberger Berman Advisers Management Trust Portfolio
Assets
Investments in securities, at market value*+ (Note A)-see Schedule of Investments:
====================================================================================================
Unaffiliated issuers $ 84,172,847
- ----------------------------------------------------------------------------------------------------
Non-controlled affiliated issuers 4,615,316
====================================================================================================
88,788,163
====================================================================================================
Cash 7,705
- ----------------------------------------------------------------------------------------------------
Dividends and interest receivable 322,516
====================================================================================================
Receivable for securities sold 22,501
- ----------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 292,014
====================================================================================================
Prepaid expenses and other assets 7,136
====================================================================================================
Total Assets 89,440,035
====================================================================================================
Liabilities
Payable for collateral on securities loaned (Note A) 4,260,200
====================================================================================================
Payable for securities purchased 30,865
- ----------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 21,217
====================================================================================================
Payable to investment manager (Note B) 37,919
- ----------------------------------------------------------------------------------------------------
Payable to administrator (Note B) 20,689
====================================================================================================
Accrued expenses and other payables 123,558
====================================================================================================
Total Liabilities 4,494,448
====================================================================================================
Net Assets at value $ 84,945,587
====================================================================================================
Net Assets consist of:
Paid-in capital $ 117,141,806
====================================================================================================
Undistributed (distributions in excess of) net investment income 677,631
- ----------------------------------------------------------------------------------------------------
Accumulated net realized gains (losses) on investments (43,241,303)
====================================================================================================
Net unrealized appreciation (depreciation) in value of investments 10,367,453
====================================================================================================
Net Assets at value $ 84,945,587
====================================================================================================
Shares Outstanding ($.001 par value; unlimited shares authorized) 9,511,663
====================================================================================================
Net Asset Value, offering and redemption price per share $ 8.93
====================================================================================================
+Securities of unaffiliated issuers on loan, at market value $ 4,104,040
====================================================================================================
*Cost of investments:
Unaffiliated issuers $ 73,805,394
====================================================================================================
Non-controlled affiliated issuers 4,615,316
====================================================================================================
Total cost of investments $ 78,420,710
====================================================================================================
See Notes to Financial Statements 11
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST FOR THE YEAR ENDED DECEMBER 31, 2003
Statement of Operations
- -----------------------
Balanced
Neuberger Berman Advisers Management Trust Portfolio
Investment Income
Income:
Interest income (Note A) $ 1,401,976
========================================================================================================
Dividend income 99,373
- --------------------------------------------------------------------------------------------------------
Income from securities loaned-net (Note A) 57,868
========================================================================================================
Income from investments in affiliated issuers (Note A) 6,232
- --------------------------------------------------------------------------------------------------------
Foreign taxes withheld (Note A) (1,850)
========================================================================================================
Total income 1,563,599
========================================================================================================
Expenses:
Investment management fee (Notes A & B) 446,398
========================================================================================================
Administration fee (Note B) 243,491
- --------------------------------------------------------------------------------------------------------
Audit fees 19,134
========================================================================================================
Custodian fees (Note B) 100,728
- --------------------------------------------------------------------------------------------------------
Insurance expense 1,900
========================================================================================================
Legal fees 9,407
- --------------------------------------------------------------------------------------------------------
Registration and filing fees 18,815
========================================================================================================
Shareholder reports 19,109
- --------------------------------------------------------------------------------------------------------
Shareholder servicing agent fees 14,037
========================================================================================================
Trustees' fees and expenses 28,551
- --------------------------------------------------------------------------------------------------------
Miscellaneous 5,109
========================================================================================================
Total expenses 906,679
Investment management fee waived (Note A) (682)
Expenses reduced by custodian fee expense offset and commission recapture arrangements (Note B) (4,811)
========================================================================================================
Total net expenses 901,186
========================================================================================================
Net investment income (loss) 662,413
========================================================================================================
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investment securities sold 4,376,868
========================================================================================================
Net realized gain (loss) on financial futures contracts (Note A) (6,625)
========================================================================================================
Change in net unrealized appreciation (depreciation) in value of:
Investment securities (Note A) 7,209,917
========================================================================================================
Net gain (loss) on investments 11,580,160
========================================================================================================
Net increase (decrease) in net assets resulting from operations $12,242,573
========================================================================================================
See Notes to Financial Statements 12
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Changes in Net Assets
- ----------------------------------
Balanced Portfolio
--------------------------------
Neuberger Berman Advisers Management Trust Year Ended December 31,
2003 2002
Increase (Decrease) in Net Assets:
From Operations:
Net investment income (loss) $ 662,413 $ 1,290,118
===================================================================================================================
Net realized gain (loss) on investments 4,370,243 (15,903,952)
- -------------------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of investments 7,209,917 (4,038,169)
===================================================================================================================
Net increase (decrease) in net assets resulting from operations 12,242,573 (18,652,003)
===================================================================================================================
Distributions to Shareholders From:
Net investment income (1,410,014) (2,524,587)
===================================================================================================================
From Fund Share Transactions:
Proceeds from shares sold 8,153,281 11,159,696
===================================================================================================================
Proceeds from reinvestment of dividends and distributions 1,410,014 2,524,587
- -------------------------------------------------------------------------------------------------------------------
Payments for shares redeemed (15,951,532) (24,024,226)
===================================================================================================================
Net increase (decrease) from Fund share transactions (6,388,237) (10,339,943)
===================================================================================================================
Net Increase (Decrease) in Net Assets 4,444,322 (31,516,533)
Net Assets:
Beginning of year 80,501,265 112,017,798
===================================================================================================================
End of year $ 84,945,587 $ 80,501,265
===================================================================================================================
Undistributed (distributions in excess of) net investment income at end of year $ 677,631 $ 1,288,459
===================================================================================================================
Number of Fund Shares:
Sold 971,681 1,302,923
===================================================================================================================
Issued on reinvestment of dividends and distributions 161,699 283,981
- -------------------------------------------------------------------------------------------------------------------
Redeemed (1,931,366) (2,869,291)
===================================================================================================================
Net increase (decrease) in shares outstanding (797,986) (1,282,387)
===================================================================================================================
See Notes to Financial Statements 13
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Financial Statements Balanced Portfolio
- ------------------------------------------------
Note A--Summary of Significant Accounting Policies:
1 General: Balanced Portfolio (the "Fund") is a separate operating series of
Neuberger Berman Advisers Management Trust (the "Trust"), a Delaware
statutory trust organized pursuant to a Trust Instrument dated May 23, 1994.
The Trust is currently comprised of ten separate operating series (each a
"Series," collectively, the "Funds") each of which (except Focus Portfolio)
is diversified. The Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended, and its shares
are registered under the Securities Act of 1933, as amended. The Fund
currently offers only Class I shares. The Trustees of the Trust may
establish additional series or classes of shares without the approval of
shareholders.
The assets of each Series of the Trust belong only to that Series, and the
liabilities of each Series are borne solely by that Series and no other.
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires Neuberger Berman
Management Inc. ("Management") to make estimates and assumptions at the date
of the financial statements. Actual results could differ from those
estimates.
2 Portfolio valuation: Investment securities are valued as indicated in the
notes following the Schedule of Investments.
3 Foreign currency translation: The accounting records of the Fund 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. Net unrealized
foreign currency gain (loss) arises from changes in the value of assets and
liabilities, other than investments in securities, as a result of changes in
exchange rates and are stated separately in the Statement of Operations.
4 Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the
ex-dividend date or, for certain foreign dividends, as soon as the Fund
becomes aware of the dividends. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, including accretion of original issue discount,
where applicable, and accretion of market discount on long-term bonds and
short-term investments, 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 and stated separately in the
Statement of Operations.
5 Forward foreign currency contracts: The Fund 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 Fund. The Fund has no specific limitation on the percentage
of assets which may be committed to these types of contracts. The
14
Notes to Financial Statements Balanced Portfolio cont'd
- -------------------------------------------------------
Fund could be exposed to risks if a counter party to a contract were unable
to meet the terms of its contract or if the value of the foreign currency
changes unfavorably. The U.S. dollar value of foreign currency underlying
all contractual commitments held by the Fund is determined using forward
foreign currency exchange rates supplied by an independent pricing service.
6 Federal income taxes: The Funds are treated as separate entities 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.
7 Dividends and distributions to shareholders: The Fund may earn income, net
of expenses, daily on its investments. Income dividends and distributions
from net realized capital gains, if any, generally are distributed in
October. Income dividends and capital gain distributions to shareholders are
recorded on the ex-dividend date. To the extent the Fund's net realized
capital gains, if any, can be offset by capital loss carryforwards
($28,845,814 and $13,734,010 expiring in 2009 and 2010, respectively,
determined as of December 31, 2003), it is the policy of the Fund not to
distribute such gains.
Under current tax law, certain capital and net foreign currency losses
realized after October 31 within the taxable year may be deferred and
treated as occurring on the first day of the following tax year. For the
year ended December 31, 2003, the Fund elected to defer $604,724 of net
capital and currency losses arising between November 1, 2003 and December
31, 2003.
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 tax 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 in the components of net assets on the Statement of Assets and
Liabilities.
The tax character of distributions paid during the years ended December 31,
2003 and 2002 were as follows:
Distributions Paid From:
Ordinary Income Total
2003 2002 2003 2002
$1,410,014 $2,524,587 $1,410,014 $2,524,587
As of December 31, 2003, the components of distributable earnings (accumulated
losses) on a U.S. Federal income tax basis were as follows:
Unrealized Loss
Undistributed Appreciation Carryforwards
Ordinary Income (Depreciation) and Deferrals Total
$989,969 $9,998,360 $(43,184,548) $(32,196,219)
15
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
The difference between book basis and tax basis is attributable primarily to
foreign bond bifurcation, the tax deferral of losses on wash sales, post
October losses, and amortization of bond premiums.
8 Foreign taxes: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
9 Expense allocation: Expenses directly attributable to a Series are charged
to that Series. Expenses of the Trust that are not directly attributed to a
Series are allocated among the Funds, on the basis of relative net assets,
except where a more appropriate allocation of expenses to each of the Funds
can otherwise be made fairly. Expenses borne by the complex of related
investment companies, which includes open-end and closed-end investment
companies for which Management serves as investment adviser, that are not
directly attributed to a Series or the Trust, are allocated among the Funds
and the other investment companies in the complex or series thereof, on the
basis of relative net assets, except where a more appropriate allocation of
expenses to each investment company in the complex or series thereof can
otherwise be made fairly.
10 Financial futures contracts: The Fund 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 Fund 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 Fund 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
Fund 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 Fund may cause the Fund 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 Fund. Also, the Fund's losses on transactions involving
futures contracts may be deferred rather than being taken into account
currently in calculating the Fund's taxable income.
During the year ended December 31, 2003, the Fund entered into various
financial futures contracts. At December 31, 2003, there were no open
positions.
16
Notes to Financial Statements Balanced Portfolio cont'd
- -------------------------------------------------------
11 Security lending: Pursuant to an Exemptive Order issued by the Securities
and Exchange Commission, the Fund entered into a Securities Lending
Agreement ("Agreement") with Neuberger Berman, LLC ("Neuberger") on April
17, 2003. Securities loans involve certain risks in the event a borrower
should fail financially, including delays or inability to recover the lent
securities or foreclose against the collateral. The investment manager,
under the general supervision of the Trust's Board of Trustees, monitors the
creditworthiness of the parties to whom the Fund makes security loans. The
Fund will not lend securities on which covered call options have been
written, or lend securities on terms which would prevent the Fund from
qualifying as a regulated investment company. The Fund receives cash
collateral equal to at least 102% of the current market value of the loaned
securities. The Fund invests the cash collateral in the N&B Securities
Lending Quality Fund, LLC ("investment vehicle"), which is managed by State
Street Bank and Trust Company ("State Street") pursuant to guidelines
approved by the Trust's investment manager. Neuberger guarantees a minimum
revenue to the Fund under the Agreement, and receives a portion of any
revenue earned in excess of the guaranteed amount as a lending agency fee.
At December 31, 2003, the Fund had not paid Neuberger any fees under the
Agreement.
Prior to April 17, 2003, the Fund had a Securities Lending Agreement with
Morgan Stanley & Co. Incorporated ("Morgan"). The Fund received cash
collateral equal to at least 100% of the current market value of the loaned
securities. The Fund invested the cash collateral in the investment vehicle.
Income earned on the investment vehicle was paid to Morgan monthly. The Fund
received a fee, payable monthly, negotiated by the Fund and Morgan, based on
the number and duration of the lending transactions.
Income earned on the securities loaned, if any, is reflected in the
Statement of Operations under the caption Income from securities loaned-net.
12 Repurchase agreements: The Fund may enter into repurchase agreements with
institutions that the Fund's investment manager has determined are
creditworthy. Each repurchase agreement is recorded at cost. The Fund
requires that the securities purchased in a repurchase transaction be
transferred to the custodian in a manner sufficient to enable the Fund to
obtain those securities in the event of a default under the repurchase
agreement. The Fund 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 Fund under each such repurchase agreement.
13 Transactions with other funds managed by Neuberger Berman Management Inc.:
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Fund may invest in the Neuberger Berman Institutional Cash
Fund (the "Cash Fund"), a fund managed by Management and having the same
officers and Trustees as the Fund. The Cash Fund seeks to provide as high a
level of current income as is consistent with the preservation of capital
and the maintenance of liquidity. For any cash that the Fund invests in the
Cash Fund, Management waives a portion of its management fee equal to the
management fee it receives from the Cash Fund on those assets. For the year
ended December 31, 2003, such waived fees amounted to $682. For the year
ended December 31, 2003, income earned on this investment is reflected in
the Statement of Operations under the caption Income from investments in
affiliated issuers.
17
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Note B--Management Fees, Administration Fees, Distribution Arrangements, and
Other Transactions With Affiliates:
Fund shares are issued and redeemed in connection with investments in and
payments under certain variable annuity contracts and variable life insurance
policies issued through separate accounts of life insurance companies and are
also offered directly to qualified pension and retirement plans.
The Fund retains Management as its investment manager under a Management
Agreement. For such investment management services, the Fund pays Management a
fee at the annual rate of 0.55% of the first $250 million of the Fund's average
daily net assets, 0.525% of the next $250 million, 0.50% of the next $250
million, 0.475% of the next $250 million, 0.45% of the next $500 million,
0.425% of the next $2.5 billion, and 0.40% of average daily net assets in
excess of $4 billion.
The Fund retains 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 0.30% of the Fund's average daily net
assets. Additionally, Management retains State Street as its sub-administrator
under a Sub-Administration Agreement. Management pays State Street a fee for
all services received under the agreement.
The Trustees of the Trust adopted a non-fee distribution plan for the Fund.
Management has contractually undertaken through December 31, 2006 to reimburse
the Fund for its operating expenses (excluding the fees payable to Management,
interest, taxes, brokerage commissions, extraordinary expenses, and transaction
costs) ("Operating Expenses") which exceed, in the aggregate, 1.00% per annum
of the Fund's average daily net assets (the "Expense Limitation"). For the year
ended December 31, 2003, no reimbursement to the Fund was required. The Fund
has agreed to repay Management through December 31, 2009 for its excess
Operating Expenses previously reimbursed by Management, so long as its annual
Operating Expenses during that period do not exceed its Expense Limitation, and
the repayment is made within three years after the year in which Management
issued the reimbursement. During the year ended December 31, 2003, there was no
reimbursement to Management under this agreement. At December 31, 2003, the
Fund has no contingent liability to Management under this agreement.
On October 31, 2003, Management and Neuberger, a member firm of the New York
Stock Exchange and sub-adviser to the Fund, became indirect wholly owned
subsidiaries of Lehman Brothers Holdings Inc. ("Lehman"), a publicly-owned
holding company (the "Transaction"). Upon completion of the Transaction, the
Trust's management and sub-advisory agreements automatically terminated. To
provide for continuity of management, the shareholders of the Fund voted on
September 23, 2003, to approve new management and sub-advisory agreements,
which took effect upon closing of the Transaction (see Report of Votes of
Shareholders). Neuberger is retained by Management to furnish it with
investment recommendations and research information without added cost to the
Fund. Several individuals who are officers and/or Trustees of the Trust are
also employees of Neuberger and/or Management.
18
Notes to Financial Statements Balanced Portfolio cont'd
- -------------------------------------------------------
On July 1, 2003, the Fund entered into a commission recapture program, which
enables it to pay some of its operational expenses by recouping a portion of
the commissions it pays to a broker that is not a related party of the Fund.
Expenses paid through this program may include costs of custodial, transfer
agency or accounting services. The impact of this arrangement was a reduction
of $4,710.
The Fund 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 $101.
Note C--Securities Transactions:
Cost of purchases and proceeds of sales and maturities of long-term securities
(excluding financial futures contracts) for the year ended December 31, 2003
were as follows:
Sales and
Purchases of Purchases excluding Sales and Maturities Maturities excluding
U.S. Government U.S. Government of U.S. Government U.S. Government
and Agency Obligations and Agency Obligations and Agency Obligations and Agency Obligations
- --------------------------------------------------------------------------------------------------
$22,182,113 $70,531,631 $27,572,038 $77,895,674
During the year ended December 31, 2003, brokerage commissions on securities
transactions amounted to $160,664, of which Neuberger received $45,433, Lehman
received $10,246, and other brokers received $104,985.
Note D--Line of Credit:
At December 31, 2003, the Fund was a participant in a single committed,
unsecured $150,000,000 ($200,000,000 prior to September 26, 2003) line of
credit with State Street, to be used only for temporary or emergency purposes.
Interest is charged on borrowings under this agreement at the overnight Federal
Funds Rate plus 0.50% per annum. A facility fee of 0.10% per annum of the
available line of credit is charged, of which the Fund has agreed to pay its
pro rata share, based on the ratio of its individual net assets to the net
assets of all participants at the time the fee is due and payable. The fee is
paid quarterly in arrears. No compensating balance is required. Other
investment companies managed by Management also participate in this line of
credit on the same terms. Because several investment companies participate,
there is no assurance that the Fund will have access to the entire $150,000,000
at any particular time. The Fund had no loans outstanding pursuant to this line
of credit at December 31, 2003, nor had the Fund utilized this line of credit
at any time prior to that date.
19
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Financial Highlights Balanced Portfolio+
- ----------------------------------------
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements.+++
Year Ended December 31,
---------------------------------------------------------
2003 2002 2001 2000 1999
Net Asset Value, Beginning of Year $ 7.81 $ 9.66 $ 17.28 $ 20.89 $16.34
------- ------- ------- ------ ------
Income From Investment Operations
Net Investment Income (Loss) .07 .12 .22- .30 .26
Net Gains or Losses on Securities (both realized and unrealized) 1.20 (1.75) (2.27)- (.61) 4.96
------- ------- ------- ------- ------
Total From Investment Operations 1.27 (1.63) (2.05) (.31) 5.22
------- ------- ------- ------- ------
Less Distributions
From Net Investment Income (.15) (.22) (.28) (.37) (.27)
From Net Capital Gains - - (5.29) (2.93) (.40)
------- ------- ------- ------- ------
Total Distributions (.15) (.22) (5.57) (3.30) (.67)
------- ------- ------- ------- ------
Net Asset Value, End of Year $ 8.93 $ 7.81 $ 9.66 $ 17.28 $20.89
------- ------- ------- ------- ------
Total Return++ +16.28% -17.15% -13.36% -4.55% +33.56%
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $ 84.9 $ 80.5 $112.0 $ 147.6 $165.3
Ratio of Gross Expenses to Average Net Assets# 1.12% 1.12% 1.07% .99% 1.02%
Ratio of Net Expenses to Average Net Assets 1.11%[sec] 1.12% 1.07% .99% 1.02%
Ratio of Net Investment Income (Loss) to Average Net Assets .82% 1.37% 2.10%- 1.49% 1.60%
Portfolio Turnover Rate 121% 106% 88% 124% 121%
See Notes to Financial Highlights 20
Notes to Financial Highlights Balanced Portfolio
- ------------------------------------------------
+ The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of AMT Balanced
Investment's income and expenses through April 30, 2000 under the prior
master/feeder fund structure.
++ 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. The total return
information shown does not reflect charges and other expenses that apply
to the separate account or the related insurance policies, and the
inclusion of these charges and other expenses would reduce the total
return for all fiscal periods shown.
# The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset and
commission recapture arrangements.
+++ The per share amounts which are shown have been computed based on the
average number of shares outstanding during each fiscal period.
[sec] After waiver of a portion of the investment management fee. Had Management
not undertaken such action the annualized ratio of net expenses to average
daily net assets would have been:
Year Ended
December 31, 2003
1.11%
- - For fiscal years ended after December 31, 2000, funds are required by the
American Institute of Certified Public Accountants to amortize premiums and
discounts on fixed income securities. Accordingly, for the year ended
December 31, 2001, the per share amounts and ratios shown decreased or
increased as follows:
Year Ended
December 31, 2001
Net Investment Income (.004)
Net Gains or Losses on Securities .004
Ratio of Net Investment Income to Average Net Assets (.04%)
21
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Report of Ernst & Young LLP, Independent Auditors
- -------------------------------------------------
To the Board of Trustees of
Neuberger Berman Advisers Management Trust and
Shareholders of Balanced Portfolio
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Balanced Portfolio, one of the series
constituting the Neuberger Berman Advisers Management Trust (the "Trust"), as
of December 31, 2003, 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 December 31, 2003, 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
Balanced Portfolio of Neuberger Berman Advisers Management Trust at December
31, 2003, 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 its
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
February 6, 2004
22
Trustees and Officers (Unaudited)
- ---------------------------------
The following tables set forth information concerning the trustees and officers
of the Trust. All persons named as trustees and officers also serve in similar
capacities for other funds administered or managed by NB Management and
Neuberger Berman. The Statement of Additional Information includes additional
information about fund trustees and is available upon request, without charge,
by calling (800) 877-9700.
Information about the Board of Trustees
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Independent Trustees Position and Fund Complex
Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
John Cannon (73) Trustee since Consultant. Formerly, Chairman 37 Independent Trustee or Director of
2000 and Chief Investment Officer, three series of Oppenheimer Funds:
CDC Capital Management Limited Term New York Municipal
(registered investment adviser), Fund, Rochester Fund Municipals,
1993-January 1999; prior thereto, and Oppenheimer Convertible
President and Chief Executive Securities Fund since 1992.
Officer, AMA Investment
Advisors, an affiliate of the
American Medical Association.
- ------------------------------------------------------------------------------------------------------------------------------------
Faith Colish (68) Trustee since Counsel, Carter Ledyard & 37 Director, American Bar Retirement
1984 Milburn LLP (law firm) since Association (ABRA) since 1997
October 2002; Formerly, (not-for-profit membership
Attorney-at-Law and President, association).
Faith Colish, A Professional
Corporation, 1980 to 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Walter G. Ehlers (70) Trustee since Consultant; Retired President 37 None.
1989 and Trustee, Teachers Insurance
& Annuity (TIAA) and College
Retirement Equities Fund
(CREF).
- ------------------------------------------------------------------------------------------------------------------------------------
C. Anne Harvey (66) Trustee since Consultant, C. A. Harvey 37 Formerly, Member, Individual
1998 Associates, since June 2001; Investors Advisory Committee to the
Formerly, Director, AARP, 1978 New York Stock Exchange Board of
to December 2001. Directors, 1998 to June 2002;
President, Board of Associates to
The National Rehabilitation
Hospital's Board of Directors, 2002;
Member, American Savings
Education Council's Policy Board
(ASEC), 1998-2000; Member,
Executive Committee, Crime
Prevention Coalition of America,
1997-2000.
- ------------------------------------------------------------------------------------------------------------------------------------
23
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Independent Trustees Position and Fund Complex
Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Barry Hirsch (70) Trustee since Attorney-at-Law. Senior 37 None.
2000 Counsel, Loews Corporation
(diversified financial corporation)
May 2002 until April 2003; prior
thereto, Senior Vice President,
Secretary and General Counsel,
Loews Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
Robert A. Kavesh (76) Trustee since Marcus Nadler Professor of 37 Director, DEL Laboratories, Inc.
2000 Finance and Economics (cosmetics and pharmaceuticals)
Emeritus, New York University, since 1978; The Caring Community
Stern School of Business. (not-for-profit).
- ------------------------------------------------------------------------------------------------------------------------------------
Howard A. Mileaf (67) Trustee since Retired. Formerly, Vice 37 Director, WHX Corporation
1999 President and Special Counsel, (holding company) since August
WHX Corporation (holding 2002; Director, WebFinancial
company), 1993-2001. Corporation (holding company)
since December 2002; Director, State
Theatre of New Jersey (not-for-
profit theater), since 2000; Formerly,
Director, Kevlin Corporation
(manufacturer of microwave and
other products).
- ------------------------------------------------------------------------------------------------------------------------------------
John P. Rosenthal (71) Trustee since Senior Vice President, Burnham 37 Director, 92nd Street Y (non-profit),
2000 Securities Inc. (a registered since 1967; Formerly, Director,
broker-dealer) since 1991. Cancer Treatment Holdings, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
William E. Rulon (71) Trustee since Retired. Senior Vice President, 37 Director, Pro-Kids Golf and
2000 Foodmaker, Inc. (operator and Learning Academy (teach golf and
franchiser of restaurants) until computer usage to "at risk" children),
January 1997. since 1998; Director, Prandium, Inc.
(restaurants) from March 2001 until
July 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Cornelius T. Ryan (72) Trustee since Founding General Partner, 37 Director, Capital Cash Management
2000 Oxford Partners and Oxford Trust (money market fund),
Bioscience Partners (venture Narragansett Insured Tax-Free
capital partnerships) and Income Fund, Rocky Mountain
President, Oxford Venture Equity Fund, Prime Cash Fund,
Corporation. several private companies and
QuadraMed Corporation
(NASDAQ).
- ------------------------------------------------------------------------------------------------------------------------------------
24
Trustees and Officers (Unaudited) cont'd
- ----------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Independent Trustees Position and Fund Complex
Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Tom Decker Seip (53) Trustee since General Partner, Seip 37 Director, H&R Block, Inc. (financial
2000 Investments LP (a private services company) since May 2001;
investment partnership); Formerly, Director, General Magic
President and CEO, Westaff, (voice recognition software), 2001-
Inc. (temporary staffing), May 2002; Director, Forward
2001 to January 2002; Senior Management, Inc. (asset
Executive at the Charles management) since 2001; Formerly,
Schwab Corporation from 1983 Director, E-Finance Corporation
to 1999, including Chief (credit decisioning services), 1999-
Executive Officer, Charles 2003; Director, Save-Daily.com
Schwab Investment (micro investing services), 1999-
Management, Inc. and Trustee, 2003; Director, Offroad Capital Inc.
Schwab Family of Funds and (pre-public internet commerce
Schwab Investments from 1997 company).
to 1998 and Executive Vice 37
President-Retail Brokerage,
Charles Schwab Investment
Management from 1994 to
1997.
- ------------------------------------------------------------------------------------------------------------------------------------
Candace L. Straight (56) Trustee since Private investor and consultant Director, Providence Washington
1999 specializing in the insurance 37 (property and casualty insurance
industry; Formerly, Advisory company), since December 1998;
Director, Securitas Capital LLC Director, Summit Global Partners
(a global private equity (insurance brokerage firm) since
investment firm dedicated to October 2000.
making investments in the
insurance sector), 1998 until
December 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Peter P. Trapp (59) Trustee since Regional Manager for Atlanta None.
1984 Region, Ford Motor Credit
Company since August 1997;
prior thereto, President, Ford
Life Insurance Company, April
1995 until August 1997.
- ------------------------------------------------------------------------------------------------------------------------------------
25
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Trustees who are Portfolios in
"Interested Persons" Position and Fund Complex
Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Edward I. O'Brien* (75) Trustee since Formerly, Member, Investment 37 Director, Legg Mason, Inc. (financial
2000 Policy Committee, Edward services holding company), since
Jones, 1993-2001; President, 1993; Director, Boston Financial
Securities Industry Association Group (real estate and tax shelters)
("SIA") (securities industry's 1993-1999.
representative in government
relations and regulatory matters
at the federal and state levels)
1974-1992; Adviser to SIA,
November 1992-November
1993.
- ------------------------------------------------------------------------------------------------------------------------------------
Jack L. Rivkin* (63) President and Executive Vice President, Director, Dale Carnegie and
Trustee since Neuberger Berman Inc. 37 Associates, Inc. (private company)
December (holding company) since 2002; since 1998; Director, Emagin Corp.
2002 Executive Vice President and (public company) since 1997;
Chief Investment Officer, Director, Solbright, Inc. (private
Neuberger Berman since 2002 company) since 1998; Director,
and 2003, respectively; Head of Infogate, Inc. (private company)
Research and Research Sales since 1997.
and Trading Departments of
Neuberger Berman since 2002;
Director and Chairman, NB
Management since December
2002; Formerly, Executive Vice
President, Citigroup
Investments, Inc. from
September 1995 to February
2002; Executive Vice President,
Citigroup Inc. from September
1995 to February 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
26
Trustees and Officers (Unaudited) cont'd
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Trustees who are Portfolios in
"Interested Persons" Position and Fund Complex
Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Peter E. Sundman* (44) Chairman of Executive Vice President, 37 Executive Vice President, Neuberger
the Board, Neuberger Berman since 1999; Berman Inc. (holding company)
Chief Formerly, Principal, Neuberger since 1999 and Formerly, Director
Executive Berman from 1997 until 1999; from October 1999 through March
Officer and Senior Vice President, NB 2003; President and Director, NB
Trustee since Management from 1996 until Management since 1999; Head of
2000; 1999. Neuberger Berman Inc.'s Mutual
President and Funds and Institutional Business
Chief since 1999; Director and Vice
Executive President, Neuberger & Berman
Officer from Agency, Inc. since 2000; Trustee,
1998 to 2000 Frost Valley YMCA.
- ------------------------------------------------------------------------------------------------------------------------------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the Trust's Trust Instrument, each Trustee shall hold office
for life or until his or her successor is elected or the Trust terminates;
except that (a) any Trustee may resign by delivering a written
resignation; (b) any Trustee may be removed with or without cause at any
time by a written instrument signed by at least two-thirds of the other
Trustees; (c) any Trustee who requests to be retired, or who has become
unable to serve, may be retired by a written instrument signed by a
majority of the other Trustees; and (d) any Trustee may be removed at any
shareholder meeting by a vote of at least two-thirds of the outstanding
shares.
(3) Except as otherwise indicated, each individual has held the positions
shown for at least the last five years.
* Indicates a Trustee who is an "interested person" within the meaning of
the 1940 Act. Mr. Sundman and Mr. Rivkin are interested persons of the
Trust by virtue of the fact that they are officers and/or directors of NB
Management and Executive Vice Presidents of Neuberger Berman. Mr. O'Brien
is an interested person of the Trust by virtue of the fact that he is a
director of Legg Mason, Inc., a wholly owned subsidiary of which, from
time to time, serves as a broker or dealer to the Funds and other funds
for which NB Management serves as investment manager.
27
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Information about the Officers of the Trust
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
- ---------------------------------------------------------------------------------------------------------------------------
Claudia A. Brandon (47) Secretary since 1985 Vice President, Neuberger Berman since 2002 and
employee since 1999; Vice President-Mutual Fund Board
Relations, NB Management since 2000; Vice President,
NB Management from 1986 to 1999; Secretary,
ten registered investment companies for which
NB Management acts as investment manager and
administrator (four since 2002 and three since 2003).
Robert Conti (47) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President, Neuberger Berman from 1999 until 2003;
Senior Vice President, NB Management since 2000;
Controller, NB Management until 1996; Treasurer,
NB Management from 1996 until 1999; Vice President,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (three since 2000, four since 2002 and
three since 2003).
Brian P. Gaffney (50) Vice President since 2000 Managing Director, Neuberger Berman since 1999;
Senior Vice President, NB Management since 2000;
Vice President, NB Management from 1997 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Sheila R. James (38) Assistant Secretary since 2002 Employee, Neuberger Berman since 1999; Employee,
NB Management from 1991 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
Kevin Lyons (48) Assistant Secretary since Employee, Neuberger Berman since 1999; Employee,
March 2003 NB Management from 1993 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (since 2003).
John M. McGovern (33) Assistant Treasurer since 2002 Employee, NB Management since 1993; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
28
Trustees and Officers (Unaudited) cont'd
- ----------------------------------------
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
- ---------------------------------------------------------------------------------------------------------------------------
Barbara Muinos (45) Treasurer and Principal Financial Vice President, Neuberger Berman since 1999; Assistant
and Accounting Officer since 2002; Vice President, NB Management from 1993 to 1999;
prior thereto, Assistant Treasurer Treasurer and Principal Financial and Accounting
since 1996 Officer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003);
Assistant Treasurer of three registered investment
companies for which NB Management acts as investment
manager and administrator from 1996 until 2002.
Frederic B. Soule (57) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President; Neuberger Berman from 1999 until 2003;
Vice President, NB Management from 1995 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Trani Jo Wyman (34) Assistant Treasurer since 2002 Employee, NB Management since 1991; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
- -------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the By-Laws of the Trust, each officer elected by the Trustees
shall hold office until his or her successor shall have been elected and
qualified or until his or her earlier death, inability to serve, or
resignation. Officers serve at the pleasure of the Trustees and may be
removed at any time with or without cause.
(3) Except as otherwise indicated, each individual has held the positions
shown for at least the last five years.
29
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Report of Votes of Shareholders (Unaudited)
- -------------------------------------------
A special meeting of shareholders of Neuberger Berman Advisers Management Trust
Balanced Portfolio (the "Fund") was held on September 23, 2003. Upon completion
of the acquisition of Neuberger Berman Inc. by Lehman Brothers Holdings Inc.
(the "Transaction"), the management agreement between the Trust, on behalf of
the Fund, and Neuberger Berman Management Inc. ("NB Management"), and the
sub-advisory agreement with respect to the Trust and each Fund, between NB
Management and Neuberger Berman, LLC automatically terminated. To provide for
continuity of management, the shareholders of the Fund voted on the following
matters, which became effective upon completion of the Transaction on October
31, 2003:
Proposal 1-To Approve a New Management Agreement between the Trust, on behalf
of the Fund, and NB Management
Votes For Votes Against Abstentions*
8,141,401.225 294,370.414 638,124.449
Proposal 2-To Approve a New Sub-Advisory Agreement with respect to the Trust
and each Fund, between NB Management and Neuberger Berman, LLC
Votes For Votes Against Abstentions*
8,103,137.378 300,510.817 670,247.893
* Abstentions were counted as shares that were present and entitled to vote
for purposes of determining a quorum and had a negative effect on the
proposals.
30
_______________________________________________________________________________
Annual Report [NEUBERGER BERMAN LOGO]
December 31, 2003
Neuberger Berman
Advisers
Management
Trust
Fasciano
Portfolio
D0081 02/04
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Fasciano Portfolio Manager's Commentary
- ---------------------------------------
The AMT Fasciano Portfolio delivered strong positive returns in 2003, although
it fell short of its benchmark, the Russell 2000 Index.2 In 2003, stock market
returns exceeded almost everyone's expectations. After a brief recession and
several years of treading water, the economy began gaining momentum in the
second quarter and exploded in the second half. Equity investors responded
enthusiastically to the good economic news and market indices across the
capitalization spectrum posted big gains. Small-cap stocks continued to
outperform, with the Russell 2000 gaining 47.25% versus the S&P 500's 28.67%
return.
- --------------------------------------------------------------------------------
Average Annual Total Return(1)
Fasciano Portfolio Russell 2000(R)(2)
1 Year 25.06% 47.25%
Life of Fund 15.75% 23.46%
- --------------------------------------------------------------------------------
Inception Date 07/12/2002
[PLOT POINTS FOR MOUNTAIN CHART]
Comparison of a $10,000 Investment
Fasciano Portfolio Russell 2000(R)
7/12/2002 $10,000 $10,000
9/30/2002 $ 9,760 $ 8,727
12/31/2002 $ 9,920 $ 9,264
3/31/2003 $ 9,030 $ 8,848
6/30/2003 $10,670 $10,921
9/30/2003 $11,000 $11,912
12/31/2003 $12,406 $13,642
This chart shows the value of a hypothetical $10,000 investment in the Fund over
the past 10 Fiscal years, or since the Fund's inception, if it has not operated
for 10 years. The results are compared with benchmarks, which may include a
broad-based market index and or a narrower index. Please note that market
indexes do not include expenses. All results include the reinvestment of
dividends and capital gain distributions. Results represent past performance and
do not indicate future results.
- --------------------------------------------------------------------------------
The AMT Fasciano Portfolio participated in the market rally, posting
double-digit returns in all eight of the market sectors it was invested in, but
underperforming benchmark components in six of the eight sector categories. What
happened on the stock selection front? A few portfolio companies failed to meet
fundamental expectations. However, the overwhelming majority of our portfolio
companies did everything we asked of them except inspire investors, who were
strongly biased toward smaller, and what we believe are lower quality stocks.
Let me provide some statistical evidence of this market anomaly. Stocks with
market capitalizations under $250 million (the smallest of the small-caps) and
stocks priced under $10 per share (a widely used, albeit imperfect proxy for
lower quality stocks) outperformed the Russell 2000 by a wide margin. Even more
revealingly, the 550 stocks in the Russell 2000 with negative earnings in 2003
gained 91.5% versus the benchmark's 47.25% advance in 2003! Clearly, a lot of
investors were willing to bet that an improving economy would work miracles for
small, unproven companies and the most downtrodden stocks in the most volatile
industry groups. We believe this will prove to be a relatively short-lived
market phenomenon. In fact, in the fourth quarter, our portfolio of more
seasoned and solidly profitable companies performed more closely in line with
the Russell 2000, indicating investors are starting to become more quality and
valuation sensitive.
This year, our consumer discretionary investments had the most positive impact
on the portfolio's absolute returns. Although we modestly underperformed the
benchmark sector component,
2
our overweighting in consumer stocks (more than double the benchmark's) had a
favorable impact on relative returns. Our underweighting in the white-hot
technology sector (less than half the benchmark's) penalized relative returns.
Our industrials sector investments lagged the benchmark sector component by a
wide margin. We owned a few losers in the industrials category, but our lagging
performance was largely the result of owning higher quality names that only
appreciated 20% instead of the "keep your fingers crossed" potential
turnarounds that soared.
We are not economists or market forecasters, and for us sector allocation is a
function of where we are finding the most compelling opportunities rather than a
bet on the future prospects for different industry groups. At the beginning of
the new year, we remained overweighted in the consumer discretionary and
industrials sectors, simply because that is where we were finding the most
companies with the most favorable growth and value characteristics. We were
under-weighted in the financials and technology sectors where we are finding
fewer fundamentally attractive growth stocks.
We will briefly review one of our current portfolio holdings that demonstrates
our investment discipline.
Hooper Holmes is the nation's largest provider of medical examination services
for life insurers-- those paramedics and registered nurses that come to your
home to take urine and blood samples when you are applying for a life insurance
policy or increasing your life insurance benefits. The company has 8,700
licensed medical professionals operating out of 230 company owned branches in 50
states and controls a whopping 38% of the national market for these services.
Its Heritage Labs division complements the medical examination business. Hooper
Holmes has no debt, a large amount of cash, and a well-diversified customer base
featuring many of America's leading life insurance companies. Due primarily to
softness in the life insurance business--when the economy is flat and
discretionary income is constrained, fewer folks buy new policies or increase
their benefits--Hooper Holmes earnings growth slowed considerably this year and
will likely remain relatively flat in 2004. The stock also came under pressure
when the company lost a high profile customer. However, as the life insurance
business improves along with the economy and Hooper Holmes continues to grow
market share in this fragmented business, we expect earnings to get back on
track and grow at about a 15% annual rate in 2005 and thereafter. With Hooper
Holmes stock trading at 16.5 times what may prove to be conservative 2004
earnings estimates and near the bottom of its longer-term annual earnings growth
rate range, we think it is a good value.
In closing, we would dub this year's small-cap market a "worst to first" market.
Looking ahead, we expect investors to be more discriminate, favoring the
reasonably priced, consistently profitable growth companies in our portfolio.
Sincerely,
/s/ MICHAEL F. FASCIANO
MICHAEL F. FASCIANO
PORTFOLIO MANAGER
3
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
1. 25.06% and 15.75% were the average annual total returns for the 1-year and
since inception (07/12/02) periods ended December 31, 2003. Neuberger Berman
Management Inc. ("NBMI") has agreed to absorb certain expenses of the AMT
Portfolios. Without this arrangement, which is subject to change, the total
returns of the Portfolios would be less. Total return includes reinvestment of
dividends and capital gain distributions. Performance data quoted represent past
performance and the investment return and principal value of an investment will
fluctuate so that the shares, when redeemed, may be worth more or less than
original cost. The performance information does not reflect fees and expenses of
the insurance companies.
2. The Russell 2000[RegTM] Index is an unmanaged index consisting of securities
of the 2,000 issuers having the smallest capitalization in the Russell
3000[RegTM] Index (which measures the performance of the 3,000 largest U.S.
companies based on total market capitalization), representing approximately 8%
of the Russell 3000 total market capitalization. The smallest company's market
capitalization is roughly $117 million. 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 NBMI and include
reinvestment of all dividends and capital gain distributions. The Portfolio may
invest in many securities not included in the above-described index.
The investments for the Portfolio are managed by the same portfolio manager(s)
who manage one or more other mutual funds that have similar names, investment
objectives and investment styles as the Portfolio. You should be aware that the
Portfolio is likely to differ from the other mutual funds in size, cash flow
pattern and tax matters. Accordingly, the holdings and performance of the
Portfolio can be expected to vary from those of the other mutual funds.
The composition, industries and holdings of the Portfolio are subject to change.
Shares of the separate Portfolios of Neuberger Berman Advisers Management Trust
are sold only through the currently effective prospectus and are not available
to the general public. Shares of this Portfolio may be purchased only by life
insurance companies to be used with their separate accounts that fund variable
annuity and variable life insurance policies and by qualified pension and
retirement plans.
(C) 2004 Neuberger Berman Management Inc., distributor. All rights reserved.
4
Schedule of Investments Fasciano Portfolio
Number of Shares Market Value+
Common Stocks (90.9%)
Auto/Truck Replacement Parts (1.3%)
2,000 American Axle &
Manufacturing Holdings $ 80,840*
--------
Banking & Financial (1.9%)
2,800 Boston Private Financial
Holdings 69,552
1,090 Wintrust Financial 49,159
--------
118,711
--------
Biotechnology (1.1%)
1,850 Techne Corp. 69,893*
--------
Business Services (4.7%)
1,430 Clark, Inc. 27,513*
4,460 G & K Services 163,905
1,740 Rollins, Inc. 39,237
2,380 Watson Wyatt & Co. 57,477*
--------
288,132
--------
Commercial Services (5.0%)
2,980 Modine Manufacturing 80,400
2,290 National Processing 53,930*
6,750 OM Group 176,783*
--------
311,113
--------
Consumer Products & Services (9.9%)
3,430 Blyth, Inc. 110,515
4,210 Central Parking 62,855
3,810 Plantronics, Inc. 124,397*
2,950 Snap-on 95,108
2,730 Spartech Corp. 67,267
640 Strayer Education 69,651
2,240 Tootsie Roll Industries 80,640
--------
610,433
--------
Distributor (4.9%)
4,400 D & K Healthcare
Resources 59,664
4,210 MSC Industrial Direct 115,775
2,800 ScanSource, Inc. 127,736*
--------
303,175
--------
Entertainment (1.7%)
2,370 International Speedway 105,844
--------
Filters (0.4%)
560 CLARCOR Inc. 24,696
--------
Financial Services (6.6%)
710 FactSet Research Systems 27,129
1,710 Financial Federal 52,240*
1,270 Greater Bay Bancorp 36,170
4,310 HCC Insurance Holdings 137,058
2,100 ITLA Capital 105,210*
2,430 W.P. Stewart & Co. 52,318
--------
410,125
--------
Number of Shares Market Value+
Health Care (2.1%)
2,250 Apria Healthcare Group $ 64,057*
1,650 Charles River Laboratories
International 56,645*
150 CUNO Inc. 6,755*
--------
127,457
--------
Health Products & Services (11.3%)
8,430 Hooper Holmes 52,097
1,010 ICU Medical 34,623*
7,010 K-V Pharmaceutical 178,755*
2,100 Landauer, Inc. 85,638
3,810 Priority Healthcare 91,859*
4,210 STERIS Corp. 95,146*
4,490 Young Innovations 161,640
--------
699,758
--------
Insurance (2.9%)
2,500 Direct General 82,750
1,310 Hilb, Rogal and Hamilton 42,012
1,530 RLI Corp. 57,314
--------
182,076
--------
Internet (0.5%)
1,160 j2 Global Communications 28,733*
--------
Machinery & Equipment (4.9%)
2,660 IDEX Corp. 110,629
2,360 Lindsay Manufacturing 59,590
2,640 Regal-Beloit 58,080
3,930 Robbins & Myers 74,631
--------
302,930
--------
Oil & Gas (3.4%)
1,325 CARBO Ceramics 67,906
1,980 FMC Technologies 46,134*
2,740 Offshore Logistics 67,185*
1,050 Universal Compression
Holdings 27,468*
--------
208,693
--------
Publishing & Broadcasting (12.3%)
5,340 Emmis Communications 144,447*
3,370 Journal Communications 62,446
5,250 Journal Register 108,675*
2,120 Lee Enterprises 92,538
1,680 McClatchy Co. 115,584
2,020 Meredith Corp. 98,596
2,570 Pulitzer Inc. 138,780
--------
761,066
--------
Real Estate (1.4%)
900 Beazer Homes USA 87,894
--------
Restaurants (3.4%)
3,400 Ruby Tuesday 96,866
6,300 Steak n Shake 112,455*
--------
209,321
--------
See Notes to Schedule of Investments 5
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Schedule of Investments Fasciano Portfolio cont'd
- -------------------------------------------------
Number of Shares Market Value+
Retail (1.2%)
1,850 Regis Corp. $ 73,112
------------
Semiconductors (0.5%)
620 Cabot Microelectronics 30,380*
------------
Technology (3.5%)
3,810 Kroll Inc. 99,060*
4,690 Methode Electronics Class A 57,359
955 Zebra Technologies 63,383*
------------
219,802
------------
Transportation (3.3%)
1,830 Heartland Express 44,268
4,270 Landstar System 162,431*
------------
206,699
------------
Waste Management (2.7%)
2,430 Stericycle, Inc. 113,481*
1,390 Waste Connections 52,500*
------------
165,981
------------
Total Common Stocks
(Cost $4,791,100) 5,626,864
------------
Principal Amount
Short-Term Investments (14.3%)
$885,798 Neuberger Berman
Institutional Cash Fund
Trust Class
(Cost $885,798) 885,798@#
------------
Total Investments (105.2%)
(Cost $5,676,898) 6,512,662##
Liabilities, less cash, receivables and
other assets [(5.2%)] (320,890)
------------
Total Net Assets (100.0%) $ 6,191,772
------------
See Notes to Schedule of Investments 6
Notes to Schedule of Investments Fasciano Portfolio
- ---------------------------------------------------
+ Investment securities of the Fund are valued at the latest sales price
where that price is readily available; securities for which no sales were
reported, unless otherwise noted, are valued at the mean between the
closing bid and asked prices. Securities traded primarily on the NASDAQ
Stock Market are normally valued by the Fund at the NASDAQ Official Closing
Price ("NOCP") provided by NASDAQ each business day. The NOCP is the most
recently reported price as of 4:00:02 p.m., Eastern time, unless that price
is outside the range of the "inside" bid and asked prices (i.e., the bid
and asked prices that dealers quote to each other when trading for their
own accounts); in that case, NASDAQ will adjust the price to equal the
inside bid or asked price, whichever is closer. Because of delays in
reporting trades, the NOCP may not be based on the price of the last trade
to occur before the market closes. The Fund values all other securities by
a method the Board of Trustees of Neuberger Berman Advisers Management
Trust believes accurately reflects fair value. Numerous factors may be
considered when determining the fair value of a security, including
available analyst, media or other reports, trading in futures or ADRs and
whether the issuer of the security being fair valued has other securities
outstanding. 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.
# At cost, which approximates market value.
## At December 31, 2003, the cost of investments for U.S. Federal income tax
purposes was $5,718,055. Gross unrealized appreciation of investments was
$803,784 and gross unrealized depreciation of investments was $9,177,
resulting in net unrealized appreciation of $794,607, based on cost for
U.S. Federal income tax purposes.
* Non-income producing security.
@ Neuberger Berman Institutional Cash Fund is also managed by Neuberger
Berman Management Inc. (see Note A of Notes to Financial Statements).
See Notes to Financial Statements 7
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Assets and Liabilities
- -----------------------------------
Fasciano
Neuberger Berman Advisers Management Trust Portfolio
Assets
Investments in securities, at market value* (Note A)-see Schedule of Investments:
======================================================================================
Unaffiliated issuers $5,626,864
- --------------------------------------------------------------------------------------
Non-controlled affiliated issuers 885,798
- --------------------------------------------------------------------------------------
6,512,662
- --------------------------------------------------------------------------------------
Dividends and interest receivable 2,363
======================================================================================
Receivable for securities sold 13,615
- --------------------------------------------------------------------------------------
Receivable for Fund shares sold 26,363
======================================================================================
Receivable from administrator-net (Note B) 5,032
- --------------------------------------------------------------------------------------
Total Assets 6,560,035
- --------------------------------------------------------------------------------------
Liabilities
Payable for securities purchased 290,413
======================================================================================
Payable for Fund shares redeemed 34,750
- --------------------------------------------------------------------------------------
Payable to investment manager (Note B) 3,878
======================================================================================
Accrued expenses and other payables 39,222
- --------------------------------------------------------------------------------------
Total Liabilities 368,263
- --------------------------------------------------------------------------------------
Net Assets at value $6,191,772
- --------------------------------------------------------------------------------------
Net Assets consist of:
Paid-in capital $5,361,102
======================================================================================
Accumulated net realized gains (losses) on investments (5,094)
- --------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) in value of investments 835,764
- --------------------------------------------------------------------------------------
Net Assets at value $6,191,772
- --------------------------------------------------------------------------------------
Shares Outstanding ($.001 par value; unlimited shares authorized) 499,523
======================================================================================
Net Asset Value, offering and redemption price per share $ 12.40
- --------------------------------------------------------------------------------------
*Cost of investments:
Unaffiliated issuers $4,791,100
- --------------------------------------------------------------------------------------
Non-controlled affiliated issuers 885,798
- --------------------------------------------------------------------------------------
Total cost of investments $5,676,898
- --------------------------------------------------------------------------------------
See Notes to Financial Statements 8
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST FOR THE YEAR ENDED DECEMBER 31, 2003
Statement of Operations
- -----------------------
Fasciano
Neuberger Berman Advisers Management Trust Portfolio
Investment Income
Income:
Dividend income $ 17,385
===================================================================================================
Income from investments in affiliated issuers (Note A) 2,995
- ---------------------------------------------------------------------------------------------------
Interest income (Note A) 355
- ---------------------------------------------------------------------------------------------------
Total income 20,735
- ---------------------------------------------------------------------------------------------------
Expenses:
Investment management fee (Notes A & B) 24,736
===================================================================================================
Administration fee (Note B) 8,731
- ---------------------------------------------------------------------------------------------------
Distribution fees (Note B) 7,276
===================================================================================================
Audit fees 24,851
- ---------------------------------------------------------------------------------------------------
Custodian fees (Note B) 23,482
===================================================================================================
Insurance expense 14
- ---------------------------------------------------------------------------------------------------
Legal fees 5,092
===================================================================================================
Shareholder reports 9,637
- ---------------------------------------------------------------------------------------------------
Trustees' fees and expenses 28,389
===================================================================================================
Miscellaneous 1,376
- ---------------------------------------------------------------------------------------------------
Total expenses 133,584
Investment management fee waived and expenses reimbursed by administrator (Notes A & B) (92,378)
Expenses reduced by custodian fee expense offset and commission recapture arrangements (383)
(Note B)
- ---------------------------------------------------------------------------------------------------
Total net expenses 40,823
- ---------------------------------------------------------------------------------------------------
Net investment income (loss) (20,088)
- ---------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investment securities sold 15,201
===================================================================================================
Change in net unrealized appreciation (depreciation) in value of:
Investment securities (Note A) 836,449
- ---------------------------------------------------------------------------------------------------
Net gain (loss) on investments 851,650
- ---------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 831,562
- ---------------------------------------------------------------------------------------------------
See Notes to Financial Statements 9
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Changes in Net Assets
- ----------------------------------
Fasciano Portfolio
-------------------------------
Period from
July 12, 2002
(Commencement
Year Ended of Operations) to
December 31, December 31,
Neuberger Berman Advisers Management Trust 2003 2002
Increase (Decrease) in Net Assets:
From Operations:
Net investment income (loss) $ (20,088) $ (370)
=====================================================================================================
Net realized gain (loss) on investments 15,201 2,349
- -----------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of investments 836,449 (685)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 831,562 1,294
- -----------------------------------------------------------------------------------------------------
Distributions to Shareholders From:
Net realized gain on investments (2,283) -
=====================================================================================================
From Fund Share Transactions:
Proceeds from shares sold 9,153,720 483,071
=====================================================================================================
Proceeds from reinvestment of dividends and distributions 2,283 -
- -----------------------------------------------------------------------------------------------------
Payments for shares redeemed (4,265,714) (12,161)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) from Fund share transactions 4,890,289 470,910
- -----------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets 5,719,568 472,204
Net Assets:
Beginning of period 472,204 -
- -----------------------------------------------------------------------------------------------------
End of period $ 6,191,772 $ 472,204
- -----------------------------------------------------------------------------------------------------
Number of Fund Shares:
Sold 830,800 48,842
=====================================================================================================
Issued on reinvestment of dividends and distributions 198 -
- -----------------------------------------------------------------------------------------------------
Redeemed (379,061) (1,256)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding 451,937 47,586
- -----------------------------------------------------------------------------------------------------
See Notes to Financial Statements 10
Notes to Financial Statements Fasciano Portfolio
- ------------------------------------------------
Note A--Summary of Significant Accounting Policies:
1 General: Fasciano Portfolio (the "Fund") is a separate operating series of
Neuberger Berman Advisers Management Trust (the "Trust"), a Delaware
statutory trust organized pursuant to a Trust Instrument dated May 23,
1994. The Trust is currently comprised of ten separate operating series
(each a "Series," collectively, the "Funds") each of which (except Focus
Portfolio) is diversified. The Trust is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and its shares are registered under the
Securities Act of 1933, as amended (the "1933 Act"). The Fund had no
operations until July 12, 2002, other than matters relating to its
organization and registration of its shares as a Series of the Trust under
the 1933 Act. The Fund currently offers only Class S shares. The Trustees
of the Trust may establish additional series or classes of shares without
the approval of shareholders.
The assets of each Series of the Trust belong only to that Series, and the
liabilities of each Series are borne solely by that Series and no other.
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires Neuberger
Berman Management Inc. ("Management") to make estimates and assumptions at
the date of the financial statements. Actual results could differ from
those estimates.
2 Portfolio valuation: Investment securities are valued as indicated in the
notes following the Schedule of Investments.
3 Foreign currency translation: The accounting records of the Fund 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. Net unrealized
foreign currency gain (loss) arises from changes in the value of assets and
liabilities, other than investment securities, as a result of changes in
exchange rates and are stated separately in the Statement of Operations.
4 Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the
ex-dividend date or, for certain foreign dividends, as soon as the Fund
becomes aware of the dividends. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, including accretion of original issue discount,
where applicable, and accretion of discount on short-term investments, 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 and stated separately in the Statement of Operations.
5 Federal income taxes: The Funds are treated as separate entities 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
11
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
(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.
6 Dividends and distributions to shareholders: The Fund may earn income, net
of expenses, daily on its investments. Income dividends and distributions
from net realized capital gains, if any, generally are distributed in
October. Income dividends and capital gain distributions to shareholders
are recorded on the ex-dividend date. To the extent the Fund's net realized
capital gains, if any, can be offset by capital loss carryforwards, it is
the policy of the Fund not to distribute such gains.
The Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a tax 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 in the components of net assets on the
Statement of Assets and Liabilities.
The tax character of distributions paid during the periods ended December
31, 2003 and 2002 were as follows:
Distributions Paid From:
Long-Term
Ordinary Capital
Income Gain Total
2003 2002 2003 2002 2003 2002
$2,283 $ -- $ -- $ -- $2,283 $ --
As of December 31, 2003, the components of distributable earnings
(accumulated losses) on a U.S. Federal income tax basis were as follows:
Undistributed Undistributed Unrealized
Ordinary Long-Term Appreciation
Income Gain (Depreciation) Total
$4,148 $31,915 $794,607 $830,670
The difference between book basis and tax basis is attributable primarily to net
operating losses and the tax deferral of losses on wash sales.
7 Foreign taxes: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
8 Expense allocation: Expenses directly attributable to a Series are charged
to that Series. Expenses of the Trust that are not directly attributed to a
Series are allocated among the Funds, on the basis of relative net assets,
except where a more appropriate allocation of expenses to each of the Funds
can otherwise be made fairly. Expenses borne by the complex of related
investment companies, which includes open-end and closed-end investment
companies for which Management serves as investment adviser, that are not
directly attributed to a Series or the Trust, are allocated among the Funds
and the other investment companies in the complex or series thereof, on the
basis of relative net assets, except where a more appropriate allocation of
expenses to each investment company in the complex or series thereof can
otherwise be made fairly.
12
Notes to Financial Statements Fasciano Portfolio cont'd
- -------------------------------------------------------
9 Security lending: Pursuant to an Exemptive Order issued by the Securities
and Exchange Commission, the Fund entered into a Securities Lending
Agreement ("Agreement") with Neuberger Berman, LLC ("Neuberger") on April
17, 2003. Securities loans involve certain risks in the event a borrower
should fail financially, including delays or inability to recover the lent
securities or foreclose against the collateral. The investment manager,
under the general supervision of the Trust's Board of Trustees, monitors
the creditworthiness of the parties to whom the Fund makes security loans.
The Fund will not lend securities on which covered call options have been
written, or lend securities on terms which would prevent the Fund from
qualifying as a regulated investment company. The Fund receives cash
collateral equal to at least 102% of the current market value of the loaned
securities. The Fund invests the cash collateral in the N&B Securities
Lending Quality Fund, LLC ("investment vehicle"), which is managed by State
Street Bank and Trust Company ("State Street") pursuant to guidelines
approved by the Trust's investment manager. Neuberger guarantees a minimum
revenue to the Fund under the Agreement, and receives a portion of any
revenue earned in excess of the guaranteed amount as a lending agency fee.
At December 31, 2003, the Fund had not paid Neuberger any fees under the
Agreement.
Prior to April 17, 2003, the Fund had a Securities Lending Agreement with
Morgan Stanley & Co. Incorporated ("Morgan"). The Fund received cash
collateral equal to at least 100% of the current market value of the loaned
securities. The Fund invested the cash collateral in the investment
vehicle. Income earned on the investment vehicle was paid to Morgan
monthly. The Fund received a fee, payable monthly, negotiated by the Fund
and Morgan, based on the number and duration of the lending transactions.
Income earned on the securities loaned, if any, is reflected in the
Statement of Operations under the caption Income from securities
loaned-net.
10 Transactions with other funds managed by Neuberger Berman Management Inc.:
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Fund may invest in the Neuberger Berman Institutional Cash
Fund (the "Cash Fund"), a fund managed by Management and having the same
officers and Trustees as the Fund. The Cash Fund seeks to provide as high a
level of current income as is consistent with the preservation of capital
and the maintenance of liquidity. For any cash that the Fund invests in the
Cash Fund, Management waives a portion of its management fee equal to the
management fee it receives from the Cash Fund on those assets. For the year
ended December 31, 2003, such waived fees amounted to $347. For the year
ended December 31, 2003, income earned on this investment is reflected in
the Statement of Operations under the caption Income from investments in
affiliated issuers.
Note B--Management Fees, Administration Fees, Distribution Arrangements,
and Other Transactions With Affiliates:
Fund shares are issued and redeemed in connection with investments in and
payments under certain variable annuity contracts and variable life
insurance policies issued through separate accounts of life insurance
companies and are also offered directly to qualified pension and retirement
plans.
The Fund retains Management as its investment manager under a Management
Agreement. For such investment management services, the Fund pays
Management a fee at the annual rate of 0.85% of the first $500 million of
the Fund's average daily net assets, 0.825% of the next $500 million, 0.80%
of the next
13
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
$500 million, 0.775% of the next $500 million, 0.75% of the next $500
million, and 0.725% of average daily net assets in excess of $2.5 billion.
The Fund retains 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 0.30% of the Fund's
average daily net assets. Additionally, Management retains State Street as
its sub-administrator under a Sub-Administration Agreement. Management pays
State Street a fee for all services received under the agreement.
Management acts as agent in arranging for the sale of Fund shares without
commission and bears advertising and promotion expenses. The Trustees of
the Trust have adopted a distribution plan (the "Plan") with respect to the
Fund, pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that, as
compensation for administrative and other services provided to the Fund,
Management's activities and expenses related to the sale and distribution
of the Fund's shares, and ongoing services provided to investors in the
Fund, Management receives from the Fund a fee at the annual rate of 0.25%
of the Fund's average daily net assets. Management receives this amount to
provide distribution and shareholder servicing for the Fund and pays a
portion of it to institutions that provide such services. Those
institutions may use the payments for, among other purposes, compensating
employees engaged in sales and/or shareholder servicing. The amount of fees
paid by the Fund during any year may be more or less than the cost of
distribution and other services provided to the Fund. NASD rules limit the
amount of annual distribution fees that may be paid by a mutual fund and
impose a ceiling on the cumulative distribution fees paid. The Trust's Plan
complies with those rules.
Management has contractually undertaken through December 31, 2006 to
reimburse the Fund for its operating expenses (including the fees payable
to Management, but excluding interest, taxes, brokerage commissions,
extraordinary expenses, and transaction costs) ("Operating Expenses") which
exceed, in the aggregate, 1.40% per annum of the Fund's average daily net
assets (the "Expense Limitation"). For the year ended December 31, 2003,
such excess expenses amounted to $92,031. The Fund has agreed to repay
Management through December 31, 2009 for its excess Operating Expenses
previously reimbursed by Management, so long as its annual Operating
Expenses during that period do not exceed its Expense Limitation, and the
repayment is made within three years after the year in which Management
issued the reimbursement. During the year ended December 31, 2003, there
was no reimbursement to Management under this agreement. At December 31,
2003, the Fund has a contingent liability to Management under this
agreement of $136,604.
On October 31, 2003, Management and Neuberger, a member firm of the New
York Stock Exchange and sub-adviser to the Fund, became indirect wholly
owned subsidiaries of Lehman Brothers Holdings Inc. ("Lehman"), a
publicly-owned holding company (the "Transaction"). Upon completion of the
Transaction, the Trust's management and sub-advisory agreements
automatically terminated. To provide for continuity of management, the
shareholders of the Fund voted on September 23, 2003, to approve new
management and sub-advisory agreements, which took effect upon closing of
the Transaction (see Report of Votes of Shareholders). Neuberger is
retained by Management to furnish it with investment recommendations and
14
Notes to Financial Statements Fasciano Portfolio cont'd
- -------------------------------------------------------
research information without added cost to the Fund. Several individuals
who are officers and/or Trustees of the Trust are also employees of
Neuberger and/or Management.
On July 1, 2003, the Fund entered into a commission recapture program,
which enables it to pay some of its operational expenses by recouping a
portion of the commissions it pays to a broker that is not a related party
of the Fund. Expenses paid through this program may include costs of
custodial, transfer agency or accounting services. The impact of this
arrangement was a reduction of $382.
The Fund 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 $1.
Note C--Securities Transactions:
During the year ended December 31, 2003, there were purchase and sale
transactions (excluding short-term securities) of $6,180,482 and
$1,850,210, respectively.
During the year ended December 31, 2003, brokerage commissions on
securities transactions amounted to $13,751, of which Neuberger received
$6,581, Lehman received $161, and other brokers received $7,009.
Note D--Line of Credit:
At December 31, 2003, the Fund was a participant in a single committed,
unsecured $150,000,000 ($200,000,000 prior to September 26, 2003) line of
credit with State Street, to be used only for temporary or emergency
purposes. Interest is charged on borrowings under this agreement at the
overnight Federal Funds Rate plus 0.50% per annum. A facility fee of 0.10%
per annum of the available line of credit is charged, of which the Fund has
agreed to pay its pro rata share, based on the ratio of its individual net
assets to the net assets of all participants at the time the fee is due and
payable. The fee is paid quarterly in arrears. No compensating balance is
required. Other investment companies managed by Management also participate
in this line of credit on the same terms. Because several investment
companies participate, there is no assurance that the Fund will have access
to the entire $150,000,000 at any particular time. The Fund had no loans
outstanding pursuant to this line of credit at December 31, 2003, nor had
the Fund utilized this line of credit at any time prior to that date.
15
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Financial Highlights Fasciano Portfolio
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements.++
Period from
Year Ended July 12, 2002^
December 31, to December 31,
------------ ---------------
2003 2002
$ 9.92 $ 10.00
Net Asset Value, Beginning of Period ------ -------
Income From Investment Operations
Net Investment Income (Loss) (.08) (.01)
Net Gains or Losses on Securities (both realized and unrealized) 2.57 (.07)
------ ------
Total From Investment Operations 2.49 (.08)
------ ------
Less Distributions
From Net Capital Gains (.01) -
------ ------
Net Asset Value, End of Period $12.40 $ 9.92
------ ------
Total Return++ +25.06% -0.80%**
Ratios/Supplemental Data
Net Assets, End of Period (in millions) $ 6.2 $ 0.5
Ratio of Gross Expenses to Average Net Assets# 1.42% 1.40%*
Ratio of Net Expenses to Average Net Assets[sec] 1.40% 1.40%*
Ratio of Net Investment Income (Loss) to Average Net Assets (.69)% (.31)%*
Portfolio Turnover Rate 70% 20%
See Notes to Financial Highlights 16
Notes to Financial Highlights Fasciano Portfolio
- ------------------------------------------------
++ 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. The
total return information shown does not reflect charges and other expenses
that apply to the separate account or the related insurance policies, and
the inclusion of these charges and other expenses would reduce the total
return for all fiscal periods shown.
# The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset and
commission recapture arrangements.
[sec] After reimbursement of expenses by Management. Had Management not
undertaken such action the annualized ratio of net expenses to average
daily net assets would have been:
Period from
July 12, 2002 to
December 31, 2002
38.27%
After waiver of a portion of the investment management fee and
reimbursement of expenses by Management. Had Management not undertaken such
action the annualized ratio of net expenses to average daily net assets
would have been:
Year Ended
December 31, 2003
4.58%
^ The date investment operations commenced.
++ The per share amounts which are shown have been computed based on the
average number of shares outstanding during each fiscal period.
* Annualized.
** Not annualized.
17
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Report of Ernst & Young LLP, Independent Auditors
- -------------------------------------------------
To the Board of Trustees of
Neuberger Berman Advisers Management Trust and
Shareholders of Fasciano Portfolio
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Fasciano Portfolio, one of the series
constituting the Neuberger Berman Advisers Management Trust (the "Trust"), as of
December 31, 2003, and the related statement of operations for the year then
ended, the statement of changes in net assets and financial highlights for the
year ended December 31, 2003 and the period from July 12, 2002 (commencement of
operations) to December 31, 2002. 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 December 31, 2003, 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
Fasciano Portfolio of Neuberger Berman Advisers Management Trust at December 31,
2003, the results of its operations for the year then ended, the changes in its
net assets and its financial highlights for the year ended December 31, 2003 and
the period from July 12, 2002 (commencement of operations) to December 31, 2002,
in conformity with accounting principles generally accepted in the United
States.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
February 6, 2004
18
Trustees and Officers (Unaudited)
- ---------------------------------
The following tables set forth information concerning the trustees and officers
of the Trust. All persons named as trustees and officers also serve in similar
capacities for other funds administered or managed by NB Management and
Neuberger Berman. The Statement of Additional Information includes additional
information about fund trustees and is available upon request, without charge,
by calling (800) 877-9700.
Information about the Board of Trustees
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
John Cannon (73) Trustee since Consultant. Formerly, Chairman 37 Independent Trustee or Director of
2000 and Chief Investment Officer, three series of Oppenheimer Funds:
CDC Capital Management Limited Term New York Municipal
(registered investment adviser), Fund, Rochester Fund Municipals,
1993-January 1999; prior thereto, and Oppenheimer Convertible
President and Chief Executive Securities Fund since 1992.
Officer, AMA Investment
Advisors, an affiliate of the
American Medical Association.
- ------------------------------------------------------------------------------------------------------------------------------------
Faith Colish (68) Trustee since Counsel, Carter Ledyard & 37 Director, American Bar Retirement
1984 Milburn LLP (law firm) since Association (ABRA) since 1997
October 2002; Formerly, (not-for-profit membership
Attorney-at-Law and President, association).
Faith Colish, A Professional
Corporation, 1980 to 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Walter G. Ehlers (70) Trustee since Consultant; Retired President 37 None.
1989 and Trustee, Teachers Insurance
& Annuity (TIAA) and College
Retirement Equities Fund
(CREF).
- ------------------------------------------------------------------------------------------------------------------------------------
C. Anne Harvey (66) Trustee since Consultant, C. A. Harvey 37 Formerly, Member, Individual
1998 Associates, since June 2001; Investors Advisory Committee to the
Formerly, Director, AARP, 1978 New York Stock Exchange Board of
to December 2001. Directors, 1998 to June 2002;
President, Board of Associates to
The National Rehabilitation
Hospital's Board of Directors, 2002;
Member, American Savings
Education Council's Policy Board
(ASEC), 1998-2000; Member,
Executive Committee, Crime
Prevention Coalition of America,
1997-2000.
- ------------------------------------------------------------------------------------------------------------------------------------
19
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Barry Hirsch (70) Trustee since Attorney-at-Law. Senior 37 None.
2000 Counsel, Loews Corporation
(diversified financial corporation)
May 2002 until April 2003; prior
thereto, Senior Vice President,
Secretary and General Counsel,
Loews Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
Robert A. Kavesh (76) Trustee since Marcus Nadler Professor of 37 Director, DEL Laboratories, Inc.
2000 Finance and Economics (cosmetics and pharmaceuticals)
Emeritus, New York University, since 1978; The Caring Community
Stern School of Business. ( not-for-profit).
- ------------------------------------------------------------------------------------------------------------------------------------
Howard A. Mileaf (67) Trustee since Retired. Formerly, Vice 37 Director, WHX Corporation
1999 President and Special Counsel, (holding company) since August
WHX Corporation (holding 2002; Director, WebFinancial
company), 1993-2001. Corporation (holding company)
since December 2002; Director, Sta
Theatre of New Jersey (not-for-
profit theater), since 2000; Forme
Director, Kevlin Corporation
(manufacturer of microwave and
other products).
- ------------------------------------------------------------------------------------------------------------------------------------
John P. Rosenthal (71) Trustee since Senior Vice President, Burnham 37 Director, 92nd Street Y (non-profit),
2000 Securities Inc. (a registered since 1967; Formerly, Director,
broker-dealer) since 1991. Cancer Treatment Holdings, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
William E. Rulon (71) Trustee since Retired. Senior Vice President, 37 Director, Pro-Kids Golf and
2000 Foodmaker, Inc. (operator and Learning Academy (teach golf and
franchiser of restaurants) until computer usage to "at risk" children),
January 1997. since 1998; Director, Prandium, Inc.
(restaurants) from March 2001 unti
July 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Cornelius T. Ryan (72) Trustee since Founding General Partner, 37 Director, Capital Cash Management
2000 Oxford Partners and Oxford Trust (money market fund),
Bioscience Partners (venture Narragansett Insured Tax-Free
capital partnerships) and Income Fund, Rocky Mountain
President, Oxford Venture Equity Fund, Prime Cash Fund,
Corporation. several private companies and
QuadraMed Corporation
(NASDAQ).
- ------------------------------------------------------------------------------------------------------------------------------------
20
Trustees and Officers (Unaudited) cont'd
- ----------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- -----------------------------------------------------------------------------------------------------------------------------------
Tom Decker Seip (53) Trustee since General Partner, Seip 37 Director, H&R Block, Inc. (financial
2000 Investments LP (a private services company) since May 2001;
investment partnership); Formerly, Director, General Magic
President and CEO, Westaff, (voice recognition software), 2001-
Inc. (temporary staffing), May 2002; Director, Forward
2001 to January 2002; Senior Management, Inc. (asset
Executive at the Charles management) since 2001; Formerly,
Schwab Corporation from 1983 Director, E-Finance Corporation
to 1999, including Chief (credit decisioning services), 1999-
Executive Officer, Charles 2003; Director, Save-Daily.com
Schwab Investment (micro investing services), 1999-
Management, Inc. and Trustee, 2003; Director, Offroad Capital Inc.
Schwab Family of Funds and (pre-public internet commerce
Schwab Investments from 1997 company).
to 1998 and Executive Vice
President-Retail Brokerage,
Charles Schwab Investment
Management from 1994 to
1997.
- -----------------------------------------------------------------------------------------------------------------------------------
Candace L. Straight (56) Trustee since Private investor and consultant 37 Director, Providence Washington
1999 specializing in the insurance (property and casualty insurance
industry; Formerly, Advisory company), since December 1998;
Director, Securitas Capital LLC Director, Summit Global Partners
(a global private equity (insurance brokerage firm) since
investment firm dedicated to October 2000.
making investments in the
insurance sector), 1998 until
December 2002.
- -----------------------------------------------------------------------------------------------------------------------------------
Peter P. Trapp (59) Trustee since Regional Manager for Atlanta 37 None.
1984 Region, Ford Motor Credit
Company since August 1997;
prior thereto, President, Ford
Life Insurance Company, April
1995 until August 1997.
- -----------------------------------------------------------------------------------------------------------------------------------
21
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Edward I. O'Brien* (75) Trustee since Formerly, Member, Investment 37 Director, Legg Mason, Inc. (financial
2000 Policy Committee, Edward services holding company), since
Jones, 1993-2001; President, 1993; Director, Boston Financial
Securities Industry Association Group (real estate and tax shelters)
("SIA") (securities industry's 1993-1999.
representative in government
relations and regulatory matters
at the federal and state levels)
1974-1992; Adviser to SIA,
November 1992-November
1993.
- ------------------------------------------------------------------------------------------------------------------------------------
Jack L. Rivkin* (63) President and Executive Vice President, 37 Director, Dale Carnegie and
Trustee since Neuberger Berman Inc. Associates, Inc. (private company)
December (holding company) since 2002; since 1998; Director, Emagin Corp.
2002 Executive Vice President and (public company) since 1997;
Chief Investment Officer, Director, Solbright, Inc. (private
Neuberger Berman since 2002 company) since 1998; Director,
and 2003, respectively; Head of Infogate, Inc. (private company)
Research and Research Sales since 1997.
and Trading Departments of
Neuberger Berman since 2002;
Director and Chairman, NB
Management since December
2002; Formerly, Executive Vice
President, Citigroup
Investments, Inc. from
September 1995 to February
2002; Executive Vice President,
Citigroup Inc. from September
1995 to February 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
22
Trustees and Officers (Unaudited) cont'd
- -----------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- -----------------------------------------------------------------------------------------------------------------------------------
Peter E. Sundman* (44) Chairman of Executive Vice President, 37 Executive Vice President, Neuberger
the Board, Neuberger Berman since 1999; Berman Inc. (holding company)
Chief Formerly, Principal, Neuberger since 1999 and Formerly, Director
Executive Berman from 1997 until 1999; from October 1999 through March
Officer and Senior Vice President, NB 2003; President and Director, NB
Trustee since Management from 1996 until Management since 1999; Head of
2000; 1999. Neuberger Berman Inc.'s Mutual
President and Funds and Institutional Business
Chief since 1999; Director and Vice
Executive President, Neuberger & Berman
Officer from Agency, Inc. since 2000; Trustee,
1998 to 2000 Frost Valley YMCA.
- -----------------------------------------------------------------------------------------------------------------------------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the Trust's Trust Instrument, each Trustee shall hold office
for life or until his or her successor is elected or the Trust terminates;
except that (a) any Trustee may resign by delivering a written resignation;
(b) any Trustee may be removed with or without cause at any time by a
written instrument signed by at least two-thirds of the other Trustees; (c)
any Trustee who requests to be retired, or who has become unable to serve,
may be retired by a written instrument signed by a majority of the other
Trustees; and (d) any Trustee may be removed at any shareholder meeting by
a vote of at least two-thirds of the outstanding shares.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
* Indicates a Trustee who is an "interested person" within the meaning of the
1940 Act. Mr. Sundman and Mr. Rivkin are interested persons of the Trust by
virtue of the fact that they are officers and/or directors of NB Management
and Executive Vice Presidents of Neuberger Berman. Mr. O'Brien is an
interested person of the Trust by virtue of the fact that he is a director
of Legg Mason, Inc., a wholly owned subsidiary of which, from time to time,
serves as a broker or dealer to the Funds and other funds for which NB
Management serves as investment manager.
23
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Information about the Officers of the Trust
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
- ------------------------------------------------------------------------------------------------------------------
Claudia A. Brandon (47) Secretary since 1985 Vice President, Neuberger Berman since 2002 and
employee since 1999; Vice President-Mutual Fund Board
Relations, NB Management since 2000; Vice President,
NB Management from 1986 to 1999; Secretary,
ten registered investment companies for which
NB Management acts as investment manager and
administrator (four since 2002 and three since 2003).
- ------------------------------------------------------------------------------------------------------------------
Robert Conti (47) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President, Neuberger Berman from 1999 until 2003;
Senior Vice President, NB Management since 2000;
Controller, NB Management until 1996; Treasurer,
NB Management from 1996 until 1999; Vice President,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (three since 2000, four since 2002 and
three since 2003).
- ------------------------------------------------------------------------------------------------------------------
Brian P. Gaffney (50) Vice President since 2000 Managing Director, Neuberger Berman since 1999;
Senior Vice President, NB Management since 2000;
Vice President, NB Management from 1997 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
- ------------------------------------------------------------------------------------------------------------------
Sheila R. James (38) Assistant Secretary since 2002 Employee, Neuberger Berman since 1999; Employee,
NB Management from 1991 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
- ------------------------------------------------------------------------------------------------------------------
Kevin Lyons (48) Assistant Secretary since Employee, Neuberger Berman since 1999; Employee,
March 2003 NB Management from 1993 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (since 2003).
- ------------------------------------------------------------------------------------------------------------------
John M. McGovern (33) Assistant Treasurer since 2002 Employee, NB Management since 1993; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
- ------------------------------------------------------------------------------------------------------------------
24
Trustees and Officers (Unaudited) cont'd
- ----------------------------------------
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
- -------------------------------------------------------------------------------------------------------------------------
Barbara Muinos (45) Treasurer and Principal Financial Vice President, Neuberger Berman since 1999; Assistant
and Accounting Officer since 2002; Vice President, NB Management from 1993 to 1999;
prior thereto, Assistant Treasurer Treasurer and Principal Financial and Accounting
since 1996 Officer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003);
Assistant Treasurer of three registered investment
companies for which NB Management acts as investment
manager and administrator from 1996 until 2002.
- -------------------------------------------------------------------------------------------------------------------------
Frederic B. Soule (57) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President; Neuberger Berman from 1999 until 2003;
Vice President, NB Management from 1995 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
- -------------------------------------------------------------------------------------------------------------------------
Trani Jo Wyman (34) Assistant Treasurer since 2002 Employee, NB Management since 1991; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
- -------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the By-Laws of the Trust, each officer elected by the Trustees
shall hold office until his or her successor shall have been elected and
qualified or until his or her earlier death, inability to serve, or
resignation. Officers serve at the pleasure of the Trustees and may be
removed at any time with or without cause.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
25
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Report of Votes of Shareholders (Unaudited)
- -------------------------------------------
A special meeting of shareholders of Neuberger Berman Advisers Management Trust
Fasciano Portfolio (the "Fund") was held on September 23, 2003. Upon completion
of the acquisition of Neuberger Berman Inc. by Lehman Brothers Holdings Inc.
(the "Transaction"), the management agreement between the Trust, on behalf of
the Fund, and Neuberger Berman Management Inc. ("NB Management"), and the
sub-advisory agreement with respect to the Trust and each Fund, between NB
Management and Neuberger Berman, LLC automatically terminated. To provide for
continuity of management, the shareholders of the Fund voted on the following
matters, which became effective upon completion of the Transaction on October
31, 2003:
Proposal 1-To Approve a New Management Agreement between the Trust, on behalf of
the Fund, and NB Management
Votes For Votes Against Abstentions*
141,586.349 70,400.781 35,088.124
Proposal 2-To Approve a New Sub-Advisory Agreement with respect to the Trust
and each Fund, between NB Management and Neuberger Berman, LLC
Votes For Votes Against Abstentions*
141,586.349 70,400.781 35,088.124
* Abstentions were counted as shares that were present and entitled to vote
for purposes of determining a quorum and had a negative effect on the
proposals.
26
______________________________________________________________________________
Annual Report
December 31, 2003
[Logo]
Neuberger Berman
Advisers
Management
Trust
Focus
Portfolio
D0080 02/04
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Focus Portfolio Managers' Commentary
The Neuberger Berman AMT Focus Portfolio strongly outperformed both its
benchmarks, the Russell 1000 Value Index and the Standard & Poor's 500 Index.(2)
The portfolio's holdings in the information technology (IT) and financial
sectors contributed the most to total return. Our IT holdings as a whole
generated a triple-digit return, led by a few of our semiconductor-related and
communications-equipment companies, including International Rectifier, Amkor
Technology and Nortel Networks. Our financial sector holdings climbed more than
70% overall, led by the stellar returns of our consumer finance holdings,
Capital One Financial and Providian, as well as that of FleetBoston Financial,
which was boosted in the fourth quarter by an announcement that it will be
acquired by Bank of America.
In the fourth quarter, portfolio holdings within the IT, financials and consumer
discretionary sectors contributed to portfolio total return. Our two holdings in
the industrials and consumer staples sectors (MemberWorks, a provider of
membership service programs, and Fresh Del Monte, a fresh produce company)
detracted somewhat from overall return. Three of our semiconductor-related
companies, International Rectifier, Amkor and NVIDIA, accounted for roughly
two-thirds of the IT sector's contribution to total return, boosted by solid
sales and earnings results and an improving demand environment.
Throughout much of 2003, we remained very bullish on the equity market. However,
the market's strong gains this past year have diminished some of this positive
sentiment. We would now describe ourselves as "aggressively neutral," meaning
that we are mildly positive about what is in store for the overall market in
2004.
In 2003, good performance was a question of "were you in the market or were you
on the sidelines?" Many hedge funds, for example, did not perform well last year
because they were out of the market or even held short positions. A broad number
of stocks experienced solid gains this past year, making stock picking less
relevant to strong performance. We believe 2004 will be different. The question
determining performance in 2004, in our opinion, will be "where are you
invested?"
Average Annual Total Return(1)
Focus Portfolio Russell 1000 (R) Value(2) S&P 500(2)
1 Year 90.42% 30.03% 28.67%
Life of Fund 69.58% 22.36% 20.71%
- ------------------------------------------------------------------------------
Inception Date 8/8/2002
Comparison of a $10,000 Investment
Focus Russell 1000 (R)
Portfolio Value S&P 500
- --------------------------------------------------------------------
8/8/2002 $ 10,000 $ 10,000 $ 10,000
9/30/2002 $ 9,000 $ 9,340 $ 9,329
12/31/2002 $ 11,000 $ 10,201 $ 10,115
3/31/2003 $ 11,070 $ 9,705 $ 9,797
6/30/2003 $ 15,180 $ 11,381 $ 11,304
9/30/2003 $ 19,060 $ 11,616 $ 11,603
12/31/2003 $ 20,946 $ 13,264 $ 13,015
Value as of 12/31/03
Focus Portfolio $ 20,946
Russell 1000 Value $ 13,264
S&P 500 $ 13,015
This chart shows the value of a hypothetical $10,000 investment in the Fund over
the past 10 fiscal years, or since the Fund's inception, if it has not operated
for 10 years. The results are compared with benchmarks, which may include a
broad-based market index and or a narrower index. Please note that market
indexes do not include expenses. All results include the reinvestment of
dividends and capital gain distributions. Results represent past performance and
do not indicate future results.
2
Stockpicking will likely be more critical.
Stock selection, we believe, is where our strengths as portfolio managers come
in, and is one reason we are more bullish on the outlook for our portfolio than
for the stock market in general. Our stock-picking ability, combined with our
holdings' low valuation multiples and solid sales and earnings prospects, give
us confidence entering 2004. Although our portfolio gained over 60% more than
our benchmark indices in 2003, as of December 31, 2003, AMT Focus portfolio
holdings trade at a substantial discount to the S&P 500 Index and are even with
the Russell 1000 Value Index, based on 2004 consensus earnings expectations (and
at a discount to both indices based on 2005 expectations). Of course there is no
assurance expectations will come to pass.
At the same time, the portfolio's long-term earnings growth rates, both trailing
and expected, are higher versus both indices. Over time, we believe that P/E
multiples will come to reflect our holdings' inherent values, and we are hopeful
that they will drive solid, market-beating long-term portfolio returns.
Sincerely,
/s/ Kent Simons
/s/ Robert B. Corman
KENT SIMONS AND ROBERT B. CORMAN
PORTFOLIO CO- MANAGERS
1. 90.42% and 69.58% were the average annual total returns for the 1-year and
since inception (08/08/02) periods ended December 31, 2003. This performance was
attained in 2003 at a time that the asset size of the Portfolio was small. The
Portfolio's net asset value as of December 31, 2003 was $1,184,057. Neuberger
Berman Management Inc. ("NBMI") has agreed to absorb certain expenses of the AMT
Portfolios. Without this arrangement, which is subject to change, the total
returns of the Portfolios would be less. Total return includes reinvestment of
dividends and capital gain distributions. Performance data quoted represent past
performance and the investment return and principal value of an investment will
fluctuate so that the shares, when redeemed, may be worth more or less than
original cost. The performance information does not reflect fees and expenses of
the insurance companies.
2. The S&P 500 Index is widely regarded as the standard for measuring large-cap
U.S. stock market performance and includes a representative sample of leading
companies in leading industries. The Russell 1000[RegTM] Index measures the
performance of the 1,000 largest companies in the Russell 3000[RegTM] Index
(which measures performance of the 3,000 largest U.S. companies based on total
market capitalization). The Russell 1000 Index represents approximately 92% of
the total market capitalization of the Russell 3000 Index. The Russell 1000
Value Index measures the performance of those Russell 1000 companies with lower
price-to-book ratios and lower forecasted growth values. 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 these indices are prepared
or obtained by NBMI and include reinvestment of all dividends and capital gain
distributions. The Portfolio may invest in many securities not included in the
above-described indices.
3
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Any ratios or other measurements using a factor of forecasted earnings of a
company discussed herein are based on consensus estimates, not Neuberger
Berman's own projections, and they may or may not be realized. In addition, any
revision to a forecast could affect the market price of a security. By quoting
them herein, Neuberger Berman does not offer an opinion as to the accuracy of
and does not guarantee these forecasted numbers.
The investments for the Portfolio are managed by the same portfolio manager(s)
who manage one or more other mutual funds that have similar names, investment
objectives and investment styles as the Portfolio. You should be aware that the
Portfolio is likely to differ from the other mutual funds in size, cash flow
pattern and tax matters. Accordingly, the holdings and performance of the
Portfolio can be expected to vary from those of the other mutual funds.
The composition, industries and holdings of the Portfolio are subject to change.
Shares of the separate Portfolios of Neuberger Berman Advisers Management Trust
are sold only through the currently effective prospectus and are not available
to the general public. Shares of this Portfolio may be purchased only by life
insurance companies to be used with their separate accounts that fund variable
annuity and variable life insurance policies and by qualified pension and
retirement plans.
(C) 2004 Neuberger Berman Management Inc., distributor. All rights reserved.
4
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Schedule of Investments Focus Portfolio
Number of Shares Market Value+
Common Stocks (92.4%)
Consumer Goods & Services (13.4%)
500 Autoliv, Inc. $ 18,825
1,300 Fresh Del Monte Produce 30,979
4,000 MemberWorks Inc. 108,680*
----------
158,484
----------
Financial Services (39.9%)
300 Bank of America 24,129
2,000 Capital One Financial 122,580
900 Citigroup Inc. 43,686
900 Fannie Mae 67,554
1,200 FleetBoston Financial 52,380
1,200 J.P. Morgan Chase 44,076
390 Lehman Brothers Holdings 30,116++
900 Merrill Lynch 52,785
3,000 Providian Financial 34,920*
----------
472,226
----------
Retail (8.6%)
1,100 Furniture Brands
International 32,263
1,500 Rush Enterprises 14,685*
700 Select Comfort 17,332*
1,700 TJX Cos. 37,485
----------
101,765
----------
Technology (30.5%)
2,600 Advanced Micro Devices 38,740*
1,200 Amdocs Ltd. 26,976*
2,500 Amkor Technology 45,525*
500 Computer Associates 13,670
1,200 Flextronics International 17,808*
2,200 International Rectifier 108,702*
600 Nokia Corp. ADR 10,200
7,000 Nortel Networks 29,610*
1,300 NVIDIA Corp. 30,225*
5,000 NYFIX, Inc. 39,750*
----------
361,206
----------
Total Common Stocks
(Cost $784,469) 1,093,681
----------
Principal Amount Market Value+
U.S. Treasury Securities (8.4%)
$100,000 U.S. Treasury Bills, 0.76%,
due 1/2/04
(Cost $99,998) $ 99,998#
----------
Short-Term Investments (1.7%)
20,486 Neuberger Berman
Institutional Cash Fund
Trust Class
(Cost $20,486) 20,486@#
----------
Total Investments (102.5%)
(Cost $904,953) 1,214,165##
Liabilities, less cash, receivables and
other assets [(2.5%)] (30,108)
----------
Total Net Assets (100.0%) $1,184,057
----------
See Notes to Schedule of Investments 5
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Schedule of Investments Focus Portfolio
+ Investment securities of the Fund are valued at the latest sales price
where that price is readily available; securities for which no sales were
reported, unless otherwise noted, are valued at the mean between the
closing bid and asked prices. Securities traded primarily on the NASDAQ
Stock Market are normally valued by the Fund at the NASDAQ Official Closing
Price ("NOCP") provided by NASDAQ each business day. The NOCP is the most
recently reported price as of 4:00:02 p.m., Eastern time, unless that price
is outside the range of the "inside" bid and asked prices (i.e., the bid
and asked prices that dealers quote to each other when trading for their
own accounts); in that case, NASDAQ will adjust the price to equal the
inside bid or asked price, whichever is closer. Because of delays in
reporting trades, the NOCP may not be based on the price of the last trade
to occur before the market closes. The Fund values all other securities by
a method the Board of Trustees of Neuberger Berman Advisers Management
Trust believes accurately reflects fair value. Numerous factors may be
considered when determining the fair value of a security, including
available analyst, media or other reports, trading in futures or ADRs and
whether the issuer of the security being fair valued has other securities
outstanding. 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.
# At cost, which approximates market value.
## At December 31, 2003, the cost of investments for U.S. Federal income tax
purposes was $907,334. Gross unrealized appreciation of investments was
$308,750 and gross unrealized depreciation of investments was $1,919,
resulting in net unrealized appreciation of $306,831, based on cost for
U.S. Federal income tax purposes.
* Non-income producing security.
@ Neuberger Berman Institutional Cash Fund is also managed by Neuberger
Berman Management Inc. (see Note A of Notes to Financial Statements).
++ Affiliated issuer (see Note A of Notes to Financial Statements).
See Notes to Financial Statements 6
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Assets and Liabilities
Focus
Neuberger Berman Advisers Management Trust Portfolio
Assets
Investments in securities, at market value* (Note A)-see Schedule of Investments:
=================================================================================================
Unaffiliated issuers $ 1,163,563
- -------------------------------------------------------------------------------------------------
Non-controlled affiliated issuers 50,602
=================================================================================================
1,214,165
- -------------------------------------------------------------------------------------------------
Dividends and interest receivable 536
=================================================================================================
Receivable for Fund shares sold 137
- -------------------------------------------------------------------------------------------------
Receivable from administrator-net (Note B) 5,947
=================================================================================================
Total Assets 1,220,785
=================================================================================================
Liabilities
Payable to investment manager (Note B) 517
=================================================================================================
Accrued expenses and other payables 36,211
=================================================================================================
Total Liabilities 36,728
=================================================================================================
Net Assets at value $ 1,184,057
=================================================================================================
Net Assets consist of:
Paid-in capital $ 757,400
=================================================================================================
Accumulated net realized gains (losses) on investments 117,444
- -------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) in value of investments 309,213
=================================================================================================
Net Assets at value $ 1,184,057
=================================================================================================
Shares Outstanding ($.001 par value; unlimited shares authorized) 56,899
=================================================================================================
Net Asset Value, offering and redemption price per share $ 20.81
=================================================================================================
*Cost of investments:
Unaffiliated issuers $ 861,737
- -------------------------------------------------------------------------------------------------
Non-controlled affiliated issuers 43,216
=================================================================================================
Total cost of investments $ 904,953
=================================================================================================
See Notes to Financial Statements 7
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST FOR THE YEAR ENDED DECEMBER 31, 2003
Statement of Operations
Focus
Neuberger Berman Advisers Management Trust Portfolio
Investment Income
Income:
Dividend income-unaffiliated issuers $ 4,730
=====================================================================================================
Dividend income-non-controlled affiliated issuers 156
- -----------------------------------------------------------------------------------------------------
Income from investments in affiliated issuers (Note A) 485
=====================================================================================================
Interest income (Note A) 46
=====================================================================================================
Total income 5,417
=====================================================================================================
Expenses:
Investment management fee (Notes A & B) 3,832
=====================================================================================================
Administration fee (Note B) 2,091
- -----------------------------------------------------------------------------------------------------
Distribution fees (Note B) 1,742
=====================================================================================================
Audit fees 24,851
- -----------------------------------------------------------------------------------------------------
Custodian fees (Note B) 11,445
=====================================================================================================
Insurance expense 3
- -----------------------------------------------------------------------------------------------------
Legal fees 3,860
=====================================================================================================
Shareholder reports 9,672
- -----------------------------------------------------------------------------------------------------
Trustees' fees and expenses 28,388
=====================================================================================================
Miscellaneous 1,315
=====================================================================================================
Total expenses 87,199
Investment management fee waived and expenses reimbursed by administrator (Notes A & B) (78,020)
Expenses reduced by custodian fee expense offset and commission recapture arrangements
(Note B) (187)
=====================================================================================================
Total net expenses 8,992
=====================================================================================================
Net investment income (loss) (3,575)
=====================================================================================================
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investment securities sold 123,733
=====================================================================================================
Change in net unrealized appreciation (depreciation) in value of:
Investment securities (Note A) 303,355
- -----------------------------------------------------------------------------------------------------
Net gain (loss) on investments 427,088
=====================================================================================================
Net increase (decrease) in net assets resulting from operations $ 423,513
=====================================================================================================
See Notes to Financial Statements 8
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Changes in Net Assets
Focus Portfolio
--------------------------------
Period from
August 8, 2002
(Commencement
Year Ended of Operations) to
December 31, December 31,
Neuberger Berman Advisers Management Trust 2003 2002
Increase (Decrease) in Net Assets:
From Operations:
Net investment income (loss) $ (3,575) $ (417)
======================================================================================================
Net realized gain (loss) on investments 123,733 4,694
- ------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of investments 303,355 5,857
======================================================================================================
Net increase (decrease) in net assets resulting from operations 423,513 10,134
======================================================================================================
Distributions to Shareholders From:
Net realized gain on investments (7,067) --
======================================================================================================
From Fund Share Transactions:
Proceeds from shares sold 745,221 226,291
======================================================================================================
Proceeds from reinvestment of dividends and distributions 7,067 --
- ------------------------------------------------------------------------------------------------------
Payments for shares redeemed (213,704) (7,398)
======================================================================================================
Net increase (decrease) from Fund share transactions 538,584 218,893
======================================================================================================
Net Increase (Decrease) in Net Assets 955,030 229,027
Net Assets:
Beginning of year 229,027 --
======================================================================================================
End of year $1,184,057 $229,027
======================================================================================================
Number of Fund Shares:
Sold 49,999 21,516
======================================================================================================
Issued on reinvestment of dividends and distributions 345 -
- ------------------------------------------------------------------------------------------------------
Redeemed (14,274) (687)
======================================================================================================
Net increase (decrease) in shares outstanding 36,070 20,829
======================================================================================================
See Notes to Financial Statements 9
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Financial Statements Focus Portfolio
Note A--Summary of Significant Accounting Policies:
1 General: Focus Portfolio (the "Fund") is a separate operating series of
Neuberger Berman Advisers Management Trust (the "Trust"), a Delaware statutory
trust organized pursuant to a Trust Instrument dated May 23, 1994. The Trust is
currently comprised of ten separate operating series (each a "Series,"
collectively, the "Funds") each of which (except the Fund) is diversified. The
Trust is registered as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), and its shares are
registered under the Securities Act of 1933, as amended (the "1933 Act"). The
Fund had no operations until August 8, 2002, other than matters relating to its
organization and registration of its shares as a Series of the Trust under the
1933 Act. The Fund currently offers only Class S shares. The Trustees of the
Trust may establish additional series or classes of shares without the approval
of shareholders.
The assets of each Series of the Trust belong only to that Series, and the
liabilities of each Series are borne solely by that Series and no other.
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States requires Neuberger Berman Management
Inc. ("Management") to make estimates and assumptions at the date of the
financial statements. Actual results could differ from those estimates.
2 Portfolio valuation: Investment securities are valued as indicated in the
notes following the Schedule of Investments.
3 Foreign currency translation: The accounting records of the Fund 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. Net unrealized foreign currency gain (loss) arises from changes in
the value of assets and liabilities, other than investment securities, as a
result of changes in exchange rates and are stated separately in the Statement
of Operations.
4 Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the ex-dividend
date or, for certain foreign dividends, as soon as the Fund becomes aware of the
dividends. Non-cash dividends included in dividend income, if any, are recorded
at the fair market value of the securities received. Interest income, including
accretion of original issue discount, where applicable, and accretion of
discount on short-term investments, 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 and stated separately in the
Statement of Operations.
5 Federal income taxes: The Funds are treated as separate entities 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
10
Notes to Financial Statements Focus Portfolio cont'd
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.
6 Dividends and distributions to shareholders: The Fund may earn income, net of
expenses, daily on its investments. Income dividends and distributions from net
realized capital gains, if any, generally are distributed in October. Income
dividends and capital gain distributions to shareholders are recorded on the
ex-dividend date. To the extent the Fund's net realized capital gains, if any,
can be offset by capital loss carryforwards, it is the policy of the Fund not to
distribute such gains.
Under current tax law, certain capital and net foreign currency losses realized
after October 31 within the taxable year may be deferred and treated as occuring
on the first day of the following year. For the year ended December 31, 2003,
the Fund elected to defer $718 of net capital and currency losses arising
between November 1, 2003 and December 31, 2003.
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 tax 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 in the components of net assets on the Statement of Assets and
Liabilities.
The tax character of distributions paid during the periods ended December 31,
2003 and 2002 were as follows:
Distributions Paid From:
Ordinary Income Total
2003 2002 2003 2002
$7,067 $ - $7,067 $ -
As of December 31, 2003, the components of distributable earnings (accumulated
losses) on a U.S. Federal income tax basis were as follows:
Undistributed Undistributed Unrealized Loss
Ordinary Long-Term Appreciation Carryforwards
Income Gain (Depreciation) and Deferrals Total
$113,929 $6,615 $306,831 $(718) $426,657
The difference between book basis and tax basis is attributable primarily to net
operating losses, post October losses, and the tax deferral of losses on wash
sales.
7 Foreign taxes: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
8 Expense allocation: Expenses directly attributable to a Series are charged to
that Series. Expenses of the Trust that are not directly attributed to a Series
are allocated among the Funds, on the basis of relative net assets, except where
a more appropriate allocation of expenses to each of the Funds can otherwise be
made fairly. Expenses borne by the complex of related investment companies,
which includes open-end
11
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
and closed-end investment companies for which Management serves as investment
adviser, that are not directly attributed to a Series or the Trust, are
allocated among the Funds and the other investment companies in the complex or
series thereof, on the basis of relative net assets, except where a more
appropriate allocation of expenses to each investment company in the complex or
series thereof can otherwise be made fairly.
9 Security Lending: Pursuant to an Exemptive Order issued by the Securities and
Exchange Commission, the Fund entered into a Securities Lending Agreement
("Agreement") with Neuberger Berman, LLC ("Neuberger") on April 17, 2003.
Securities loans involve certain risks in the event a borrower should fail
financially, including delays or inability to recover the lent securities or
foreclose against the collateral. The investment manager, under the general
supervision of the Trust's Board of Trustees, monitors the creditworthiness of
the parties to whom the Fund makes security loans. The Fund will not lend
securities on which covered call options have been written, or lend securities
on terms which would prevent the Fund from qualifying as a regulated investment
company. The Fund receives cash collateral equal to at least 102% of the current
market value of the loaned securities. The Fund invests the cash collateral in
the N&B Securities Lending Quality Fund, LLC. ("investment vehicle"), which is
managed by State Street Bank and Trust Company ("State Street") pursuant to
guidelines approved by the Trust's investment manager. Neuberger guarantees a
minimum revenue to the Fund under the Agreement, and receives a portion of any
revenue earned in excess of the guaranteed amount as a lending agency fee. At
December 31, 2003, the Fund had not paid Neuberger any fees under the Agreement.
Prior to April 17, 2003, the Fund had a Securities Lending Agreement with Morgan
Stanley & Co. Incorporated ("Morgan"). The Fund received cash collateral equal
to at least 100% of the current market value of the loaned securities. The Fund
invested the cash collateral in the investment vehicle. Income earned on the
investment vehicle was paid to Morgan monthly. The Fund received a fee, payable
monthly, negotiated by the Fund and Morgan, based on the number and duration of
the lending transactions.
Income earned on the securities loaned, if any, is reflected in the Statement of
Operations under the caption Income from securities loaned-net.
10 Transactions with other funds managed by Neuberger Berman Management Inc.:
Pursuant to an Exemptive Order issued by the Securities and Exchange Commission,
the Fund may invest in the Neuberger Berman Institutional Cash Fund (the "Cash
Fund"), a fund managed by Management and having the same officers and Trustees
as the Fund. The Cash Fund seeks to provide as high a level of current income as
is consistent with the preservation of capital and the maintenance of liquidity.
For any cash that the Fund invests in the Cash Fund, Management waives a portion
of its management fee equal to the management fee it receives from the Cash Fund
on those assets. For the year ended December 31, 2003, such waived fees amounted
to $63. For the year ended December 31, 2003, income earned on this investment
is reflected in the Statement of Operations under the caption Income from
investments in affiliated issuers.
12
Notes to Financial Statements Focus Portfolio cont'd
Note B--Management Fees, Administration Fees, Distribution Arrangements, and
Other Transactions With Affiliates:
Fund shares are issued and redeemed in connection with investments in and
payments under certain variable annuity contracts and variable life insurance
policies issued through separate accounts of life insurance companies and are
also offered directly to qualified pension and retirement plans.
The Fund retains Management as its investment manager under a Management
Agreement. For such investment management services, the Fund pays Management a
fee at the annual rate of 0.55% of the first $250 million of the Fund's average
daily net assets, 0.525% of the next $250 million, 0.50% of the next $250
million, 0.475% of the next $250 million, 0.45% of the next $500 million, 0.425%
of the next $2.5 billion, and 0.40% of average daily net assets in excess of $4
billion.
The Fund retains 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 0.30% of the Fund's average daily net
assets. Additionally, Management retains State Street as its sub-administrator
under a Sub-Administration Agreement. Management pays State Street a fee for all
services received under the agreement.
Management acts as agent in arranging for the sale of Fund shares without
commission and bears advertising and promotion expenses. The Trustees of the
Trust have adopted a distribution plan (the "Plan") with respect to the Fund,
pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that, as
compensation for administrative and other services provided to the Fund,
Management's activities and expenses related to the sale and distribution of the
Fund's shares, and ongoing services provided to investors in the Fund,
Management receives from the Fund a fee at the annual rate of 0.25% of the
Fund's average daily net assets. Management receives this amount to provide
distribution and shareholder servicing for the Fund and pays a portion of it to
institutions that provide such services. Those institutions may use the payments
for, among other purposes, compensating employees engaged in sales and/or
shareholder servicing. The amount of fees paid by the Fund during any year may
be more or less than the cost of distribution and other services provided to the
Fund. NASD rules limit the amount of annual distribution fees that may be paid
by a mutual fund and impose a ceiling on the cumulative distribution fees paid.
The Trust's Plan complies with those rules.
Management has contractually undertaken through December 31, 2006 to reimburse
the Fund for its operating expenses (including the fees payable to Management,
but excluding interest, taxes, brokerage commissions, extraordinary expenses,
and transaction costs) ("Operating Expenses") which exceed, in the aggregate,
1.25% per annum of the Fund's average daily net assets (the "Expense
Limitation"). For the year ended December 31, 2003, such excess expenses
amounted to $77,957. The Fund has agreed to repay Management through December
31, 2009 for its excess Operating Expenses previously reimbursed by Management,
so long as its annual Operating Expenses during that period do not exceed its
Expense Limitation, and the repayment is made within three years after the year
in which Management issued the reimbursement. During the year ended December 31,
2003, there was no reimbursement to Management under this agreement. At December
31, 2003, the Fund has a contingent liability to Management under this agreement
of $115,392.
13
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
On October 31, 2003, Management and Neuberger, a member firm of the New York
Stock Exchange and sub-adviser to the Fund, became indirect wholly owned
subsidiaries of Lehman Brothers Holdings Inc. ("Lehman"), a publicly-owned
holding company (the "Transaction"). Upon completion of the Transaction, the
Trust's management and sub-advisory agreements automatically terminated. To
provide for continuity of management, the shareholders of the Fund voted on
September 23, 2003, to approve new management and sub-advisory agreements, which
took effect upon closing of the Transaction (see Report of Votes of
Shareholders). At December 31, 2003, the Fund owned shares of Lehman. Income
earned on these shares is reflected in the Statement of Operations under the
caption Dividend income - non controlled affiliated issuers. The Trust intends
that this position will be liquidated on or before April 30, 2004. Neuberger is
retained by Management to furnish it with investment recommendations and
research information without added cost to the Fund. Several individuals who are
officers and/or Trustees of the Trust are also employees of Neuberger and/or
Management.
On July 1, 2003, the Fund entered into a commission recapture program, which
enables it to pay some of its operational expenses by recouping a portion of the
commissions it pays to a broker that is not a related party of the Fund.
Expenses paid through this program may include costs of custodial, transfer
agency or accounting services. The impact of this arrangement was a reduction of
$180.
The Fund 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 $7.
Note C--Securities Transactions:
During the year ended December 31, 2003, there were purchase and sale
transactions (excluding short-term securities) of $1,106,788 and $658,937,
respectively.
During the year ended December 31, 2003, brokerage commissions on securities
transactions amounted to $6,548, of which Neuberger received $3,045, Lehman
received $773, and other brokers received $2,730.
Note D--Line of Credit:
At December 31, 2003, the Fund was a participant in a single committed,
unsecured $150,000,000 ($200,000,000 prior to September 26, 2003) line of credit
with State Street, to be used only for temporary or emergency purposes. Interest
is charged on borrowings under this agreement at the overnight Federal Funds
Rate plus 0.50% per annum. A facility fee of 0.10% per annum of the available
line of credit is charged, of which the Fund has agreed to pay its pro rata
share, based on the ratio of its individual net assets to the net assets of all
participants at the time the fee is due and payable. The fee is paid quarterly
in arrears. No compensating balance is required. Other investment companies
managed by Management also participate in this line of credit on the same terms.
Because several investment companies participate, there is no assurance that the
Fund will have access to the entire $150,000,000 at any particular time. The
Fund had no loans outstanding pursuant to this line of credit at December 31,
2003, nor had the Fund utilized this line of credit at any time prior to that
date.
14
Financial Highlights Focus Portfolio
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements.++
Period from
Year Ended August 8, 2002^
December 31, to December 31,
------------ ---------------
2003 2002
Net Asset Value, Beginning of Period $ 11.00 $ 10.00
------- -------
Income From Investment Operations
Net Investment Income (Loss) (.09) (.03)
Net Gains or Losses on Securities (both realized and unrealized) 10.03 1.03
------- -------
Total From Investment Operations 9.94 1.00
------- -------
Less Distributions
From Net Capital Gains (.13) --
------- -------
Net Asset Value, End of Period $ 20.81 $ 11.00
------- -------
Total Return++ +90.42% +10.00%**
Ratios/Supplemental Data
Net Assets, End of Period (in millions) $ 1.2 $ 0.2
Ratio of Gross Expenses to Average Net Assets# 1.32% 1.25%*
Ratio of Net Expenses to Average Net Assets[sec] 1.29% 1.25%*
Ratio of Net Investment Income (Loss) to Average Net Assets (.51)% (.69)%*
Portfolio Turnover Rate 101% 63%
See Notes to Financial Highlights 15
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Financial Highlights Focus Portfolio
++ 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. The
total return information shown does not reflect charges and other expenses
that apply to the separate account or the related insurance policies, and
the inclusion of these charges and other expenses would reduce the total
return for all fiscal periods shown.
# The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset and
commission recapture arrangements.
[sec] After reimbursement of expenses by Management. Had Management not
undertaken such action the annualized ratio of net expenses to average
daily net assets would have been:
Period from
August 8, 2002 to
December 31, 2002
63.28%
After reimbursement of expenses by Management and waiver of a portion of the
investment management fee. Had Management not undertaken such action the
annualized ratio of net expenses to average daily net assets would have been:
Year Ended
December 31, 2003
12.48%
^ The date investment operations commenced.
++ The per share amounts which are shown have been computed based on the
average number of shares outstanding during each fiscal period.
* Annualized.
** Not annualized.
16
Report of Ernst & Young LLP, Independent Auditors
To the Board of Trustees of
Neuberger Berman Advisers Management Trust and
Shareholders of Focus Portfolio
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Focus Portfolio, one of the series constituting
the Neuberger Berman Advisers Management Trust (the "Trust"), as of December 31,
2003, and the related statement of operations for the year then ended, the
statement of changes in net assets and financial highlights for the year ended
December 31, 2003 and the period from August 8, 2002 (commencement of
operations) to December 31, 2002. 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 December 31, 2003, by correspondence
with the custodian. 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 Focus
Portfolio of Neuberger Berman Advisers Management Trust at December 31, 2003,
the results of its operations for the year then ended, the changes in its net
assets and its financial highlights for the year ended December 31, 2003 and the
period from August 8, 2002 (commencement of operations) to December 31, 2002, in
conformity with accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
Boston, Massachusetts
February 6, 2004
17
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Trustees and Officers (Unaudited)
The following tables set forth information concerning the trustees and officers
of the Trust. All persons named as trustees and officers also serve in similar
capacities for other funds administered or managed by NB Management and
Neuberger Berman. The Statement of Additional Information includes additional
information about fund trustees and is available upon request, without charge,
by calling (800) 877-9700.
Information about the Board of Trustees
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
John Cannon (73) Trustee since Consultant. Formerly, Chairman 37 Independent Trustee or Director of
2000 and Chief Investment Officer, three series of Oppenheimer Funds:
CDC Capital Management Limited Term New York Municipal
(registered investment adviser), Fund, Rochester Fund Municipals,
1993-January 1999; prior thereto, and Oppenheimer Convertible
President and Chief Executive Securities Fund since 1992.
Officer, AMA Investment
Advisors, an affiliate of the
American Medical Association.
Faith Colish (68) Trustee since Counsel, Carter Ledyard & 37 Director, American Bar Retirement
1984 Milburn LLP (law firm) since Association (ABRA) since 1997
October 2002; Formerly, (not-for-profit membership
Attorney-at-Law and President, association).
Faith Colish, A Professional
Corporation, 1980 to 2002.
Walter G. Ehlers (70) Trustee since Consultant; Retired President 37 None.
1989 and Trustee, Teachers Insurance
& Annuity (TIAA) and College
Retirement Equities Fund
(CREF).
C. Anne Harvey (66) Trustee since Consultant, C. A. Harvey 37 Formerly, Member, Individual
1998 Associates, since June 2001; Investors Advisory Committee to the
Formerly, Director, AARP, 1978 New York Stock Exchange Board of
to December 2001. Directors, 1998 to June 2002;
President, Board of Associates to
The National Rehabilitation
Hospital's Board of Directors, 2002;
Member, American Savings
Education Council's Policy Board
(ASEC), 1998-2000; Member,
Executive Committee, Crime
Prevention Coalition of America,
1997-2000.
18
Trustees and Officers (Unaudited) cont'd
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Barry Hirsch (70) Trustee since Attorney-at-Law. Senior 37 None.
2000 Counsel, Loews Corporation
(diversified financial corporation)
May 2002 until April 2003; prior
thereto, Senior Vice President,
Secretary and General Counsel,
Loews Corporation.
Robert A. Kavesh (76) Trustee since Marcus Nadler Professor of 37 Director, DEL Laboratories, Inc.
2000 Finance and Economics (cosmetics and pharmaceuticals)
Emeritus, New York University, since 1978; The Caring Community
Stern School of Business. (not-for-profit).
Howard A. Mileaf (67) Trustee since Retired. Formerly, Vice 37 Director, WHX Corporation
1999 President and Special Counsel, (holding company) since August
WHX Corporation (holding 2002; Director, WebFinancial
company), 1993-2001. Corporation (holding company)
since December 2002; Director, State
Theatre of New Jersey (not-for-
profit theater), since 2000; Formerly,
Director, Kevlin Corporation
(manufacturer of microwave and
other products).
John P. Rosenthal (71) Trustee since Senior Vice President, Burnham 37 Director, 92nd Street Y (non-profit),
2000 Securities Inc. (a registered since 1967; Formerly, Director,
broker-dealer) since 1991. Cancer Treatment Holdings, Inc.
William E. Rulon (71) Trustee since Retired. Senior Vice President, 37 Director, Pro-Kids Golf and
2000 Foodmaker, Inc. (operator and Learning Academy (teach golf and
franchiser of restaurants) until computer usage to "at risk" children),
January 1997. since 1998; Director, Prandium, Inc.
(restaurants) from March 2001 until
July 2002.
Cornelius T. Ryan (72) Trustee since Founding General Partner, 37 Director, Capital Cash Management
2000 Oxford Partners and Oxford Trust (money market fund),
Bioscience Partners (venture Narragansett Insured Tax-Free
capital partnerships) and Income Fund, Rocky Mountain
President, Oxford Venture Equity Fund, Prime Cash Fund,
Corporation. several private companies and
QuadraMed Corporation
(NASDAQ).
19
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Tom Decker Seip (53) Trustee since General Partner, Seip 37 Director, H&R Block, Inc. (financial
2000 Investments LP (a private services company) since May 2001;
investment partnership); Formerly, Director, General Magic
President and CEO, Westaff, (voice recognition software), 2001-
Inc. (temporary staffing), May 2002; Director, Forward
2001 to January 2002; Senior Management, Inc. (asset
Executive at the Charles management) since 2001; Formerly,
Schwab Corporation from 1983 Director, E-Finance Corporation
to 1999, including Chief (credit decisioning services), 1999-
Executive Officer, Charles 2003; Director, Save-Daily.com
Schwab Investment (micro investing services), 1999-
Management, Inc. and Trustee, 2003; Director, Offroad Capital Inc.
Schwab Family of Funds and (pre-public internet commerce
Schwab Investments from 1997 company).
to 1998 and Executive Vice
President-Retail Brokerage,
Charles Schwab Investment
Management from 1994 to
1997.
Candace L. Straight (56) Trustee since Private investor and consultant 37 Director, Providence Washington
1999 specializing in the insurance (property and casualty insurance
industry; Formerly, Advisory company), since December 1998;
Director, Securitas Capital LLC Director, Summit Global Partners
(a global private equity (insurance brokerage firm) since
investment firm dedicated to October 2000.
making investments in the
insurance sector), 1998 until
December 2002.
Peter P. Trapp (59) Trustee since Regional Manager for Atlanta 37 None.
1984 Region, Ford Motor Credit
Company since August 1997;
prior thereto, President, Ford
Life Insurance Company, April
1995 until August 1997.
20
Trustees and Officers (Unaudited) cont'd
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Edward I. O'Brien* (75) Trustee since Formerly, Member, Investment 37 Director, Legg Mason, Inc. (financial
2000 Policy Committee, Edward services holding company), since
Jones, 1993-2001; President, 1993; Director, Boston Financial
Securities Industry Association Group (real estate and tax shelters)
("SIA") (securities industry's 1993-1999.
representative in government
relations and regulatory matters
at the federal and state levels)
1974-1992; Adviser to SIA,
November 1992-November
1993.
Jack L. Rivkin* (63) President and Executive Vice President, 37 Director, Dale Carnegie and
Trustee since Neuberger Berman Inc. Associates, Inc. (private company)
December (holding company) since 2002; since 1998; Director, Emagin Corp.
2002 Executive Vice President and (public company) since 1997;
Chief Investment Officer, Director, Solbright, Inc. (private
Neuberger Berman since 2002 company) since 1998; Director,
and 2003, respectively; Head of Infogate, Inc. (private company)
Research and Research Sales since 1997.
and Trading Departments of
Neuberger Berman since 2002;
Director and Chairman, NB
Management since December
2002; Formerly, Executive Vice
President, Citigroup
Investments, Inc. from
September 1995 to February
2002; Executive Vice President,
Citigroup Inc. from September
1995 to February 2002.
21
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Peter E. Sundman* (44) Chairman of Executive Vice President, 37 Executive Vice President, Neuberger
the Board, Neuberger Berman since 1999; Berman Inc. (holding company)
Chief Formerly, Principal, Neuberger since 1999 and Formerly, Director
Executive Berman from 1997 until 1999; from October 1999 through March
Officer and Senior Vice President, NB 2003; President and Director, NB
Trustee since Management from 1996 until Management since 1999; Head of
2000; 1999. Neuberger Berman Inc.'s Mutual
President and Funds and Institutional Business
Chief since 1999; Director and Vice
Executive President, Neuberger & Berman
Officer from Agency, Inc. since 2000; Trustee,
1998 to 2000 Frost Valley YMCA.
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the Trust's Trust Instrument, each Trustee shall hold office
for life or until his or her successor is elected or the Trust terminates;
except that (a) any Trustee may resign by delivering a written resignation;
(b) any Trustee may be removed with or without cause at any time by a
written instrument signed by at least two-thirds of the other Trustees; (c)
any Trustee who requests to be retired, or who has become unable to serve,
may be retired by a written instrument signed by a majority of the other
Trustees; and (d) any Trustee may be removed at any shareholder meeting by
a vote of at least two-thirds of the outstanding shares.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
* Indicates a Trustee who is an "interested person" within the meaning of the
1940 Act. Mr. Sundman and Mr. Rivkin are interested persons of the Trust by
virtue of the fact that they are officers and/or directors of NB Management
and Executive Vice Presidents of Neuberger Berman. Mr. O'Brien is an
interested person of the Trust by virtue of the fact that he is a director
of Legg Mason, Inc., a wholly owned subsidiary of which, from time to time,
serves as a broker or dealer to the Funds and other funds for which NB
Management serves as investment manager.
22
Trustees and Officers (Unaudited) cont'd
Information about the Officers of the Trust
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
Claudia A. Brandon (47) Secretary since 1985 Vice President, Neuberger Berman since 2002 and
employee since 1999; Vice President-Mutual Fund Board
Relations, NB Management since 2000; Vice President,
NB Management from 1986 to 1999; Secretary,
ten registered investment companies for which
NB Management acts as investment manager and
administrator (four since 2002 and three since 2003).
Robert Conti (47) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President, Neuberger Berman from 1999 until 2003;
Senior Vice President, NB Management since 2000;
Controller, NB Management until 1996; Treasurer,
NB Management from 1996 until 1999; Vice President,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (three since 2000, four since 2002 and
three since 2003).
Brian P. Gaffney (50) Vice President since 2000 Managing Director, Neuberger Berman since 1999;
Senior Vice President, NB Management since 2000;
Vice President, NB Management from 1997 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Sheila R. James (38) Assistant Secretary since 2002 Employee, Neuberger Berman since 1999; Employee,
NB Management from 1991 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
Kevin Lyons (48) Assistant Secretary since Employee, Neuberger Berman since 1999; Employee,
March 2003 NB Management from 1993 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (since 2003).
John M. McGovern (33) Assistant Treasurer since 2002 Employee, NB Management since 1993; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
23
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
Barbara Muinos (45) Treasurer and Principal Financial Vice President, Neuberger Berman since 1999; Assistant
and Accounting Officer since 2002; Vice President, NB Management from 1993 to 1999;
prior thereto, Assistant Treasurer Treasurer and Principal Financial and Accounting
since 1996 Officer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003);
Assistant Treasurer of three registered investment
companies for which NB Management acts as investment
manager and administrator from 1996 until 2002.
Frederic B. Soule (57) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President; Neuberger Berman from 1999 until 2003;
Vice President, NB Management from 1995 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Trani Jo Wyman (34) Assistant Treasurer since 2002 Employee, NB Management since 1991; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
- -------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the By-Laws of the Trust, each officer elected by the Trustees
shall hold office until his or her successor shall have been elected and
qualified or until his or her earlier death, inability to serve, or
resignation. Officers serve at the pleasure of the Trustees and may be
removed at any time with or without cause.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
24
Report of Votes of Shareholders (Unaudited)
A special meeting of shareholders of Neuberger Berman Advisers Management Trust
Focus Portfolio (the "Fund") was held on September 23, 2003. Upon completion of
the acquisition of Neuberger Berman Inc. by Lehman Brothers Holdings Inc. (the
"Transaction"), the management agreement between the Trust, on behalf of the
Fund, and Neuberger Berman Management Inc. ("NB Management"), and the
sub-advisory agreement with respect to the Trust and each Fund, between NB
Management and Neuberger Berman, LLC automatically terminated. To provide for
continuity of management, the shareholders of the Fund voted on the following
matters, which became effective upon completion of the Transaction on October
31, 2003:
Proposal 1-To Approve a New Management Agreement between the Trust, on behalf of
the Fund, and NB Management
Votes For Votes Against Abstentions*
42,021.272 4,109.046 0
Proposal 2-To Approve a New Sub-Advisory Agreement with respect to the Trust and
each Fund, between NB Management and Neuberger Berman, LLC
Votes For Votes Against Abstentions*
42,021.272 4,109.046 0
* Abstentions were counted as shares that were present and entitled to vote
for purposes of determining a quorum and had a negative effect on the
proposals.
25
______________________________________________________________________________
Annual Report
December 31, 2003
[LOGO]
Neuberger Berman
Advisers
Management
Trust
Growth
Portfolio(R)
B1015 02/04
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Growth Portfolio Managers' Commentary
The AMT Growth Portfolio posted a strongly positive return in 2003, although in
a surging market it underperformed its benchmark, the Russell Midcap Growth
Index.(2)
2003 was a robust year for stocks, which ended their extended bear market. All
major equity indices registered gains, with growth and value styles at a
roughly equal pace, while small capitalization and technology stocks generated
the greatest returns. In general, the stocks of cyclical and less quality firms
performed much better than those of larger, higher quality, stable companies.
Early in the year, many investors feared that growth was fragile as business
spending remained tepid and employment was weak. However, the Federal Reserve
held rates low, which in turn helped unleash consumer spending by way of
extensive mortgage refinancings. In addition, fiscal stimulus, including tax
cuts and spending hikes, provided strength to consumers. Finally, the end to
major conflict in Iraq provided the psychological lift, boosting equity prices.
Corporate earnings jumped in the third and fourth quarters as economic growth
picked up.
For the Portfolio, the largest contributors to performance for the year were
security selections within Industrials, Telecommunications and Energy. In the
Industrials sector, our emphasis on education stocks was additive to returns,
while our Energy holdings--despite the sector's relative weakness--benefited
from their ability to increase reserves or production within oil and gas. In
terms of sector allocation, our overweight in Information Technology (IT), one
of the best performing sectors, helped returns, as did our underweight in the
anemic Consumer Staples sector.
On the down side, our stock selection within IT hurt relative performance. Our
holdings, which were defensively oriented at the start of the second quarter,
fell behind as the indices rose sharply in April and May. For example, we held
technology stocks that would have performed well if tech spending did not
improve significantly. But as fundamentals improved, these defensive, less
cyclical, lower octane names underperformed the more cyclical, higher beta
names in the sector. In May, we repositioned the Portfolio strategically to
take advantage of this market shift.
- --------------------------------------------------------------------------------
Average Annual Total Return(1)
Growth Portfolio Russell Midcap(R) Growth(2) S&P 500(2)
1 Year 31.40% 42.71% 28.67%
5 Year (3.50%) 2.01% (0.57%)
10 Year 5.47% 9.40% 11.06%
Life of Fund 9.23% N/A 13.29%
- --------------------------------------------------------------------------------
Inception Date 9/10/1984
Comparison of a $10,000 Investment
[PLOT POINTS FOR MOUNTAIN CHART]
Growth Portfolio Russell Midcap(R) Growth S&P 500
- --------------------------------------------------------------------------------
12/31/1993 $10,000 $10,000 $10,000
12/31/1994 $ 9,501 $ 9,784 $10,132
12/31/1995 $12,516 $13,108 $13,934
12/31/1996 $13,660 $15,399 $17,131
12/31/1997 $17,622 $18,870 $22,845
12/31/1998 $20,358 $22,241 $29,373
12/31/1999 $30,617 $33,648 $35,553
12/31/2000 $27,048 $29,695 $32,317
12/31/2001 $18,837 $23,711 $28,479
12/31/2002 $12,967 $17,213 $22,187
12/31/2003 $17,038 $24,565 $28,548
Value as of 12/31/03
Growth Portfolio $17,038
Russell Midcap(R) Growth $24,565
S&P 500 $28,548
This chart shows the value of a hypothetical $10,000 investment in the Fund over
the past 10 fiscal years, or since the Fund's inception, if it has not operated
for 10 years. The results are compared with benchmarks, which may include a
broad-based market index and or a narrower index. Please note that market
indexes do not include expenses. All results include the reinvestment of
dividends and capital gain distributions. Results represent past performance and
do not indicate future results.
2
Looking forward, we remain bullish in the short run. We believe the markets are
likely to overshoot on the upside, as they typically do, but face greater
uncertainty in the latter half of 2004. The Federal Reserve Board should remain
accommodative through 2004, given the limited window of opportunity to change
policy prior to the presidential election. The story may unfold as follows:
Employment grows slowly, productivity stays high and inflation remains low;
margins expand; the Fed stays on hold through next year, interest rates are
stable and even decline, the dollar gradually descends, and GDP expands at a 5%
plus rate; as a result, earnings grow more than current expectations and
price/earnings multiples expand as investors risk more capital from their money
market holdings.
This paints a favorable economic picture for stocks to continue on their upward
trend. During the coming year, we believe that market leadership will continue
in technology, industrials, materials and financials.
Sincerely,
/s/ Jon D. Brorson
JON D. BRORSON
PORTFOLIO MANAGER AND
GROWTH EQUITY GROUP
TEAM LEADER
/s/ Kenneth J. Turek
KENNETH J. TUREK
PORTFOLIO MANAGER
1. 31.40%, (3.50%) and 5.47% were the average annual total returns for the 1-,
5- and 10-year periods ended December 31, 2003. Neuberger Berman Management
Inc. ("NBMI") has agreed to absorb certain expenses of the AMT Portfolios.
Without this arrangement, which is subject to change, the total returns of the
Portfolios would be less. Total return includes reinvestment of dividends and
capital gain distributions. Performance data quoted represent past performance
and the investment return and principal value of an investment will fluctuate
so that the shares, when redeemed, may be worth more or less than original
cost. The performance information does not reflect fees and expenses of the
insurance companies.
2. The Russell Midcap[RegTM] Growth Index measures the performance of those
Russell Midcap[RegTM] Index companies with higher price-to-book ratios and
higher forecasted growth values. The Russell Midcap Index measures the
performance of the 800 smallest companies in the Russell 1000[RegTM] Index,
which represents approximately 26% of the total market capitalization of the
Russell 1000 Index (which, in turn, consists of the 1,000 largest U.S.
companies, based on market capitalization). The S&P 500 Index is widely
regarded as the standard for measuring large-cap U.S. stock market performance
and includes a representative sample of leading companies in leading
industries. 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
these indices are prepared or obtained by NBMI and include reinvestment of all
dividends and capital gain distributions. The Portfolio may invest in many
securities not included in the above-described indices.
The investments for the Portfolio are managed by the same portfolio manager(s)
who manage one or more other mutual funds that have similar names, investment
objectives and investment styles as the Portfolio. You should be aware that the
Portfolio is likely to differ from the other mutual funds in size, cash flow
pattern and tax matters. Accordingly, the holdings and performance of the
Portfolio can be expected to vary from those of the other mutual funds.
The composition, industries and holdings of the Portfolio are subject to
change.
Shares of the separate Portfolios of Neuberger Berman Advisers Management Trust
are sold only through the currently effective prospectus and are not available
to the general public. Shares of this Portfolio may be purchased only by life
insurance companies to be used with their separate accounts that fund variable
annuity and variable life insurance policies and by qualified pension and
retirement plans.
(C) 2004 Neuberger Berman Management Inc., distributor. All rights reserved.
3
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Schedule of Investments Growth Portfolio
Number of Shares Market Value+
Common Stocks (99.9%)
Biotechnology (4.7%)
39,500 Celgene Corp. $ 1,778,290*
50,500 Chiron Corp. 2,877,995*
51,500 Genzyme Corp. 2,541,010*
51,000 Gilead Sciences 2,965,140*
-----------
10,162,435
Building, Construction & Furnishing (0.5%)
10,500 Centex Corp. 1,130,325
Business Services (4.4%)
112,000 Alliance Data Systems 3,100,160*
45,000 Corporate Executive Board 2,100,150*
64,800 Education Management 2,011,392*
45,700 Stericycle, Inc. 2,134,190*
-----------
9,345,892
Business Services-IT Business Services (0.5%)
21,000 Affiliated Computer
Services 1,143,660*
Communications Equipment (2.3%)
143,000 Juniper Networks 2,671,240*\P
61,500 UTStarcom, Inc. 2,279,805*
-----------
4,951,045
Diversified (0.8%)
28,500 iShares Russell 2000
Growth Index Fund 1,688,910\P
Electrical Equipment (0.7%)
44,000 Broadcom Corp. 1,499,960*
Electrical & Electronics (2.9%)
40,000 Jabil Circuit 1,132,000*
85,000 Molex Inc. 2,965,650\P
46,500 Silicon Laboratories 2,009,730*\P
-----------
6,107,380
Energy (3.1%)
19,500 Kinder Morgan 1,152,450
35,500 Murphy Oil 2,318,505
108,733 XTO Energy 3,077,144
-----------
6,548,099
Financial Services (6.5%)
57,000 Capital One Financial 3,493,530
54,000 Franklin Resources 2,811,240
86,500 Investors Financial
Services 3,322,465\P
37,300 Moody's Corp. 2,258,515
56,200 New York Community
Bancorp 2,138,410
-----------
14,024,160
Health Care (8.8%)
28,500 Allergan, Inc. 2,189,085
27,500 C. R. Bard 2,234,375
126,000 Caremark Rx 3,191,580*\P
47,500 Henry Schein 3,210,050*
Number of Shares Market Value+
27,000 Invitrogen Corp. $ 1,890,000*
61,800 NPS Pharmaceuticals 1,899,732*\P
45,900 Teva Pharmaceutical
Industries ADR 2,602,989
34,500 Watson Pharmaceuticals 1,587,000*
-----------
18,804,811
Industrial (12.7%)
42,100 Danaher Corp. 3,862,675
30,000 Donaldson Co. 1,774,800
10,500 Eaton Corp. 1,133,790
72,000 Fastenal Co. 3,595,680\P
59,500 Gentex Corp. 2,627,520
44,000 Harman International
Industries 3,255,120
121,000 J.B. Hunt Transport
Services 3,268,210*
22,500 Parker-Hannifin 1,338,750
46,000 SPX Corp. 2,705,260*
77,500 Swift Transportation 1,629,050*
108,000 United Rentals 2,080,080*
-----------
27,270,935
Insurance (0.4%)
25,300 China Life Insurance ADR 835,912*\P
Leisure (3.8%)
81,500 International Game
Technology 2,909,550
63,000 Mandalay Resort Group 2,817,360\P
72,000 Royal Caribbean Cruises 2,504,880\P
-----------
8,231,790
Media (3.4%)
35,000 E.W. Scripps 3,294,900
25,000 Getty Images 1,253,250*
67,500 Univision Communications 2,679,075*
-----------
7,227,225
Medical Equipment (5.2%)
30,750 INAMED Corp. 1,477,845*
60,500 Varian Medical Systems 4,180,550*
115,500 VISX, Inc. 2,673,825*
41,500 Zimmer Holdings 2,921,600*
-----------
11,253,820
Metals (0.6%)
29,400 Freeport-McMoRan Copper
& Gold 1,238,622
Packing & Containers (1.8%)
55,000 Packaging Corp. of America 1,202,300
111,000 Pactiv Corp. 2,652,900*
-----------
3,855,200
Retail (14.4%)
31,000 Amazon.com 1,631,840*\P
46,500 CarMax, Inc. 1,438,245*
121,000 Coach, Inc. 4,567,750*
74,000 Michaels Stores 3,270,800
64,500 Nordstrom, Inc. 2,212,350
See Notes to Schedule of Investments 4
Schedule of Investments Growth Portfolio cont'd
Number of Shares Market Value+
63,500 PETsMART, Inc. $ 1,511,300
123,800 Ross Stores 3,272,034
87,000 Staples, Inc. 2,375,100*
66,000 Tiffany & Co. 2,983,200\P
60,000 Tuesday Morning 1,815,000*
36,500 Whole Foods Market 2,450,245
98,500 Williams-Sonoma 3,424,845*
-------------
30,952,709
Semiconductors (8.4%)
117,000 ASML Holding ADR 2,345,850*\P
85,000 Fairchild Semiconductor
International 2,122,450*
92,500 Intersil Corp. 2,298,625
39,000 KLA-Tencor 2,288,130*\P
47,000 Lam Research 1,518,100*
114,000 Microchip Technology 3,803,040
38,200 National Semiconductor 1,505,462*
43,000 QLogic Corp. 2,218,800*
-------------
18,100,457
Software (6.7%)
33,300 Cognos, Inc. 1,019,646*\P
25,100 Electronic Arts 1,199,278*
74,500 Mercury Interactive 3,623,680*
100,500 PeopleSoft, Inc. 2,291,400*
102,000 Symantec Corp. 3,534,300*\P
74,700 VERITAS Software 2,775,852*
-------------
14,444,156
Number of Shares Market Value+
Technology (5.5%)
42,000 Agilent Technologies $ 1,228,080*
153,000 Corning Inc. 1,595,790*
38,000 SanDisk Corp. 2,323,320*\P
67,500 Unisys Corp. 1,002,375*
85,500 Zebra Technologies 5,674,635*
-------------
11,824,200
Telecommunications (1.8%)
292,500 Nextel Partners 3,934,125*\P
Total Common Stocks
(Cost $169,907,521)
214,575,828
-------------
Principal Amount
Short-Term Investments (16.6%)
$35,030,500 N&B Securities Lending
Quality Fund, LLC 35,030,500++
640,497 Neuberger Berman
Institutional Cash Fund
Trust Class 640,497@
-------------
Total Short-Term Investments
(Cost $35,670,997)
35,670,997#
-------------
Total Investments (116.5%)
(Cost $205,578,518)
250,246,825##
Liabilities, less cash, receivables and other
assets [(16.5%)] (35,377,390)
-------------
Total Net Assets (100.0%) $ 214,869,435
-------------
See Notes to Schedule of Investments 5
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Schedule of Investments Growth Portfolio
+ Investment securities of the Fund are valued at the latest sales price
where that price is readily available; securities for which no sales were
reported, unless otherwise noted, are valued at the mean between the
closing bid and asked prices. Securities traded primarily on the NASDAQ
Stock Market are normally valued by the Fund at the NASDAQ Official Closing
Price ("NOCP") provided by NASDAQ each business day. The NOCP is the most
recently reported price as of 4:00:02 p.m., Eastern time, unless that price
is outside the range of the "inside" bid and asked prices (i.e., the bid
and asked prices that dealers quote to each other when trading for their
own accounts); in that case, NASDAQ will adjust the price to equal the
inside bid or asked price, whichever is closer. Because of delays in
reporting trades, the NOCP may not be based on the price of the last trade
to occur before the market closes. The Fund values all other securities by
a method the Board of Trustees of Neuberger Berman Advisers Management
Trust believes accurately reflects fair value. Numerous factors may be
considered when determining the fair value of a security, including
available analyst, media or other reports, trading in futures or ADRs and
whether the issuer of the security being fair valued has other securities
outstanding. 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.
# At cost, which approximates market value.
## At December 31, 2003, the cost of investments for U.S. Federal income tax
purposes was $205,951,119. Gross unrealized appreciation of investments was
$45,609,022 and gross unrealized depreciation of investments was
$1,313,316, resulting in net unrealized appreciation of $44,295,706, based
on cost for U.S. Federal income tax purposes.
* Non-income producing security.
\P All or a portion of this security is on loan (see Note A of Notes to
Financial Statements).
@ Neuberger Berman Institutional Cash Fund is also managed by Neuberger
Berman Management Inc. (see Note A of Notes to Financial Statements).
++ Affiliated issuer (see Note A of Notes to Financial Statements).
See Notes to Financial Statements 6
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Assets and Liabilities
Growth
Neuberger Berman Advisers Management Trust Portfolio
Assets
Investments in securities, at market value*+ (Note A)-see Schedule of Investments:
==================================================================================================
Unaffiliated issuers $ 214,575,828
- --------------------------------------------------------------------------------------------------
Non-controlled affiliated issuers 35,670,997
- --------------------------------------------------------------------------------------------------
250,246,825
- --------------------------------------------------------------------------------------------------
Dividends and interest receivable 37,299
==================================================================================================
Receivable for securities sold 105,005
- --------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 2,664
==================================================================================================
Prepaid expenses and other assets 21,373
- --------------------------------------------------------------------------------------------------
Total Assets 250,413,166
- --------------------------------------------------------------------------------------------------
Liabilities
Payable for collateral on securities loaned (Note A) 35,030,500
==================================================================================================
Payable for securities purchased 140,606
- --------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 118,238
==================================================================================================
Payable to investment manager (Note B) 96,171
- --------------------------------------------------------------------------------------------------
Payable to administrator (Note B) 52,535
==================================================================================================
Accrued expenses and other payables 105,681
- --------------------------------------------------------------------------------------------------
Total Liabilities 35,543,731
- --------------------------------------------------------------------------------------------------
Net Assets at value $ 214,869,435
- --------------------------------------------------------------------------------------------------
Net Assets consist of:
Paid-in capital $ 469,578,467
==================================================================================================
Accumulated net realized gains (losses) on investments (299,377,339)
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) in value of investments 44,668,307
- --------------------------------------------------------------------------------------------------
Net Assets at value $ 214,869,435
- --------------------------------------------------------------------------------------------------
Shares Outstanding ($.001 par value; unlimited shares authorized) 20,618,711
==================================================================================================
Net Asset Value, offering and redemption price per share $ 10.42
- --------------------------------------------------------------------------------------------------
+Securities of unaffiliated issuers on loan, at market value $ 33,821,282
- --------------------------------------------------------------------------------------------------
*Cost of investments:
Unaffiliated issuers $ 169,907,521
------------------------------------------------------------------------------------------------
Non-controlled affiliated issuers 35,670,997
- --------------------------------------------------------------------------------------------------
Total cost of investments $ 205,578,518
- --------------------------------------------------------------------------------------------------
See Notes to Financial Statements 7
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST FOR THE YEAR ENDED DECEMBER 31, 2003
Statement of Operations
Growth
Neuberger Berman Advisers Management Trust Portfolio
Investment Income
Income:
Dividend income $ 456,921
===============================================================================================================
Income from securities loaned-net (Note A) 194,445
- ---------------------------------------------------------------------------------------------------------------
Income from investments in affiliated issuers (Note A) 33,059
===============================================================================================================
Foreign taxes withheld (Note A) (5,415)
- ---------------------------------------------------------------------------------------------------------------
Total income 679,010
- ---------------------------------------------------------------------------------------------------------------
Expenses:
Investment management fee (Notes A & B) 1,078,805
===============================================================================================================
Administration fee (Note B) 588,439
- ---------------------------------------------------------------------------------------------------------------
Audit fees 25,475
===============================================================================================================
Custodian fees (Note B) 101,128
- ---------------------------------------------------------------------------------------------------------------
Insurance expense 2,047
===============================================================================================================
Legal fees 22,076
- ---------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 28,777
- ---------------------------------------------------------------------------------------------------------------
Total expenses 1,846,747
Investment management fee waived (Note A) (3,363)
Expenses reduced by custodian fee expense offset and commission recapture arrangements (Note B) (20,767)
- ---------------------------------------------------------------------------------------------------------------
Total net expenses 1,822,617
- ---------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1,143,607)
- ---------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investment securities sold 19,742,814
===============================================================================================================
Change in net unrealized appreciation (depreciation) in value of:
Investment securities (Note A) 33,843,552
------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 53,586,366
- ---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 52,442,759
- ---------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements 8
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Changes in Net Assets
Growth Portfolio
----------------------------------
Neuberger Berman Advisers Management Trust Year Ended December 31,
2003 2002
Increase (Decrease) in Net Assets:
From Operations:
Net investment income (loss) $ (1,143,607) $ (1,647,631)
=======================================================================================================
Net realized gain (loss) on investments 19,742,814 (80,233,852)
- -------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of investments 33,843,552 (17,399,240)
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 52,442,759 (99,280,723)
- -------------------------------------------------------------------------------------------------------
From Fund Share Transactions:
Proceeds from shares sold 54,281,902 51,338,030
=======================================================================================================
Payments for shares redeemed (77,700,782) (122,421,435)
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) from Fund share transactions (23,418,880) (71,083,405)
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets 29,023,879 (170,364,128)
Net Assets:
Beginning of year 185,845,556 356,209,684
- -------------------------------------------------------------------------------------------------------
End of year $214,869,435 $ 185,845,556
- -------------------------------------------------------------------------------------------------------
Number of Fund Shares:
Sold 5,950,038 5,453,318
=======================================================================================================
Redeemed (8,765,385) (12,934,581)
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding (2,815,347) (7,481,263)
- -------------------------------------------------------------------------------------------------------
See Notes to Financial Statements 9
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Financial Statements Growth Portfolio
Note A--Summary of Significant Accounting Policies:
1 General: Growth Portfolio (the "Fund") is a separate operating series of
Neuberger Berman Advisers Management Trust (the "Trust"), a Delaware
statutory trust organized pursuant to a Trust Instrument dated May 23, 1994.
The Trust is currently comprised of ten separate operating series (each a
"Series," collectively, the "Funds") each of which (except Focus Portfolio)
is diversified. The Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended, and its shares
are registered under the Securities Act of 1933, as amended. The Fund
currently offers only Class I shares. The Trustees of the Trust may
establish additional series or classes of shares without the approval of
shareholders.
The assets of each Series of the Trust belong only to that Series, and the
liabilities of each Series are borne solely by that Series and no other.
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires Neuberger Berman
Management Inc. ("Management") to make estimates and assumptions at the date
of the financial statements. Actual results could differ from those
estimates.
2 Portfolio valuation: Investment securities are valued as indicated in the
notes following the Schedule of Investments.
3 Foreign currency translation: The accounting records of the Fund 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. Net unrealized
foreign currency gain (loss) arises from changes in the value of assets and
liabilities, other than investments in securities, as a result of changes in
exchange rates and are stated separately in the Statement of Operations.
4 Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the
ex-dividend date or, for certain foreign dividends, as soon as the Fund
becomes aware of the dividends. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, including accretion of original issue discount,
where applicable, and accretion of discount on short-term investments, 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 and stated separately in the Statement of Operations.
Included in net realized gain (loss) on investment securities sold are
proceeds from the settlement of class action litigation in which the Fund
participated as a plaintiff. The amount of such proceeds for the year ended
December 31, 2003 was $307.
5 Federal income taxes: The Funds are treated as separate entities 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
10
Notes to Financial Statements Growth Portfolio cont'd
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.
6 Dividends and distributions to shareholders: The Fund may earn income, net
of expenses, daily on its investments. Income dividends and distributions
from net realized capital gains, if any, generally are distributed in
October. Income dividends and capital gain distributions to shareholders are
recorded on the ex-dividend date. To the extent the Fund's net realized
capital gains, if any, can be offset by capital loss carryforwards
($228,884,941 and $70,119,797 expiring in 2009 and 2010, respectively,
determined as of December 31, 2003), it is the policy of the Fund not to
distribute such gains.
The Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a tax 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 in the components of net assets on the Statement of Assets and
Liabilities.
As of December 31, 2003, the components of distributable earnings
(accumulated losses) on a U.S. Federal income tax basis were as follows:
Unrealized Loss
Appreciation Carryforwards
(Depreciation) and Deferrals Total
$44,295,706 $(299,004,738) $(254,709,032)
The difference between book basis and tax basis is attributable primarily to
net operating losses and the tax deferral of losses on wash sales.
7 Expense allocation: Expenses directly attributable to a Series are charged
to that Series. Expenses of the Trust that are not directly attributed to a
Series are allocated among the Funds, on the basis of relative net assets,
except where a more appropriate allocation of expenses to each of the Funds
can otherwise be made fairly. Expenses borne by the complex of related
investment companies, which includes open-end and closed-end investment
companies for which Management serves as investment adviser, that are not
directly attributed to a Series or the Trust, are allocated among the Funds
and the other investment companies in the complex or series thereof, on the
basis of relative net assets, except where a more appropriate allocation of
expenses to each investment company in the complex or series thereof can
otherwise be made fairly.
8 Security lending: Pursuant to an Exemptive Order issued by the Securities
and Exchange Commission, the Fund entered into a Securities Lending
Agreement ("Agreement") with Neuberger Berman, LLC ("Neuberger") on April
17, 2003. Securities loans involve certain risks in the event a borrower
should fail financially, including delays or inability to recover the lent
securities or foreclose against the collateral. The investment manager,
under the general supervision of the Trust's Board of Trustees, monitors the
11
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
creditworthiness of the parties to whom the Fund makes security loans. The
Fund will not lend securities on which covered call options have been
written, or lend securities on terms which would prevent the Fund from
qualifying as a regulated investment company. The Fund receives cash
collateral equal to at least 102% of the current market value of the loaned
securities. The Fund invests the cash collateral in the N&B Securities
Lending Quality Fund, LLC ("investment vehicle"), which is managed by State
Street Bank and Trust Company ("State Street") pursuant to guidelines
approved by the Trust's investment manager. Neuberger guarantees a minimum
revenue to the Fund under the Agreement, and receives a portion of any
revenue earned in excess of the guaranteed amount as a lending agency fee.
At December 31, 2003, the Fund had not paid Neuberger any fees under the
Agreement.
Prior to April 17, 2003, the Fund had a Securities Lending Agreement with
Morgan Stanley & Co. Incorporated ("Morgan"). The Fund received cash
collateral equal to at least 100% of the current market value of the loaned
securities. The Fund invested the cash collateral in the investment vehicle.
Income earned on the investment vehicle was paid to Morgan monthly. The Fund
received a fee, payable monthly, negotiated by the Fund and Morgan, based on
the number and duration of the lending transactions.
Income earned on the securities loaned, if any, is reflected in the
Statement of Operations under the caption Income from securities loaned-net.
9 Foreign taxes: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
10 Transactions with other funds managed by Neuberger Berman Management Inc.:
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Fund may invest in the Neuberger Berman Institutional Cash
Fund (the "Cash Fund"), a fund managed by Management and having the same
officers and Trustees as the Fund. The Cash Fund seeks to provide as high a
level of current income as is consistent with the preservation of capital
and the maintenance of liquidity. For any cash that the Fund invests in the
Cash Fund, Management waives a portion of its management fee equal to the
management fee it receives from the Cash Fund on those assets. For the year
ended December 31, 2003, such waived fees amounted to $3,363. For the year
ended December 31, 2003, income earned on this investment is reflected in
the Statement of Operations under the caption Income from investments in
affiliated issuers.
Note B--Management Fees, Administration Fees, Distribution Arrangements, and
Other Transactions With Affiliates:
Fund shares are issued and redeemed in connection with investments in and
payments under certain variable annuity contracts and variable life
insurance policies issued through separate accounts of life insurance
companies and are also offered directly to qualified pension and retirement
plans.
The Fund retains Management as its investment manager under a Management
Agreement. For such investment management services, the Fund pays Management
a fee at the annual rate of 0.55% of the first $250 million of the Fund's
average daily net assets, 0.525% of the next $250 million, 0.50% of the next
$250 million, 0.475% of the next $250 million, 0.45% of the next $500
million, 0.425% of the next $2.5 billion, and 0.40% of average daily net
assets in excess of $4 billion.
12
Notes to Financial Statements Growth Portfolio cont'd
The Fund retains 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 0.30% of the Fund's average
daily net assets. Additionally, Management retains State Street as its
sub-administrator under a Sub-Administration Agreement. Management pays
State Street a fee for all services received under the agreement.
The Trustees of the Trust adopted a non-fee distribution plan for the Fund.
Management has contractually undertaken through December 31, 2006 to
reimburse the Fund for its operating expenses (excluding the fees payable to
Management, interest, taxes, brokerage commissions, extraordinary expenses,
and transaction costs) ("Operating Expenses") which exceed, in the
aggregate, 1.00% per annum of the Fund's average daily net assets (the
"Expense Limitation"). For the year ended December 31, 2003, no
reimbursement to the Fund was required. The Fund has agreed to repay
Management through December 31, 2009 for its excess Operating Expenses
previously reimbursed by Management, so long as its annual Operating
Expenses during that period do not exceed its Expense Limitation, and the
repayment is made within three years after the year in which Management
issued the reimbursement. During the year ended December 31, 2003, there was
no reimbursement to Management under this agreement. At December 31, 2003,
the Fund has no contingent liability to Management under this agreement.
On October 31, 2003, Management and Neuberger, a member firm of the New York
Stock Exchange and sub-adviser to the Fund, became indirect wholly owned
subsidiaries of Lehman Brothers Holdings Inc. ("Lehman"), a publicly-owned
holding company (the "Transaction"). Upon completion of the Transaction, the
Trust's management and sub-advisory agreements automatically terminated. To
provide for continuity of management, the shareholders of the Fund voted on
September 23, 2003, to approve new management and sub-advisory agreements,
which took effect upon closing of the Transaction (see Report of Votes of
Shareholders). Neuberger is retained by Management to furnish it with
investment recommendations and research information without added cost to
the Fund. Several individuals who are officers and/or Trustees of the Trust
are also employees of Neuberger and/or Management.
On July 1, 2003, the Fund entered into a commission recapture program, which
enables it to pay some of its operational expenses by recouping a portion of
the commissions it pays to a broker that is not a related party of the Fund.
Expenses paid through this program may include costs of custodial, transfer
agency or accounting services. The impact of this arrangement was a
reduction of $20,756.
The Fund 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 $11.
13
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Note C--Securities Transactions:
During the year ended December 31, 2003, there were purchase and sale
transactions (excluding short-term securities) of $287,105,882 and
$302,420,261, respectively.
During the year ended December 31, 2003, brokerage commissions on securities
transactions amounted to $742,369, of which Neuberger received $200,686,
Lehman received $47,630, and other brokers received $494,053.
Note D--Line of Credit:
At December 31, 2003, the Fund was a participant in a single committed,
unsecured $150,000,000 ($200,000,000 prior to September 26, 2003) line of
credit with State Street, to be used only for temporary or emergency
purposes. Interest is charged on borrowings under this agreement at the
overnight Federal Funds Rate plus 0.50% per annum. A facility fee of 0.10%
per annum of the available line of credit is charged, of which the Fund has
agreed to pay its pro rata share, based on the ratio of its individual net
assets to the net assets of all participants at the time the fee is due and
payable. The fee is paid quarterly in arrears. No compensating balance is
required. Other investment companies managed by Management also participate
in this line of credit on the same terms. Because several investment
companies participate, there is no assurance that the Fund will have access
to the entire $150,000,000 at any particular time. The Fund had no loans
outstanding pursuant to this line of credit at December 31, 2003.
14
Financial Highlights Growth Portfolio+
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements.++
Year Ended December 31,
-------------------------------------------------------------
2003 2002 2001 2000 1999
Net Asset Value, Beginning of Year $ 7.93 $ 11.52 $ 30.65 $ 37.27 $ 26.29
------- ------- ------- ------- -------
Income From Investment Operations
Net Investment Income (Loss) (.05) (.06) (.07) (.17) (.12)
Net Gains or Losses on Securities
(both realized and unrealized) 2.54 (3.53) (7.41) (3.16) 12.51
------- ------- ------- ------- -------
Total From Investment Operations 2.49 (3.59) (7.48) (3.33) 12.39
------- ------- ------- ------- -------
Less Distributions
From Net Capital Gains -- -- (11.65) (3.29) (1.41)
------- ------- ------- ------- -------
Net Asset Value, End of Year $ 10.42 $ 7.93 $ 11.52 $ 30.65 $ 37.27
------- ------- ------- ------- -------
Total Return++ +31.40% -31.16% -30.36% -11.66% +50.40%
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $ 214.9 $ 185.8 $ 356.2 $ 640.6 $ 732.8
Ratio of Gross Expenses to Average Net Assets# .94% .96% .89% .90% .92%
Ratio of Net Expenses to Average Net Assets .93%[sec] .96% .89% .90% .92%
Ratio of Net Investment Income (Loss)
to Average Net Assets (.58)% (.65)% (.50)% (.45)% (.46)%
Portfolio Turnover Rate 149% 97% 91% 125% 119%
See Notes to Financial Highlights 15
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Financial Highlights Growth Portfolio
+ The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of AMT Growth
Investment's income and expenses through April 30, 2000 under the prior
master/feeder fund structure.
++ 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. The total return
information shown does not reflect charges and other expenses that apply
to the separate account or the related insurance policies, and the
inclusion of these charges and other expenses would reduce the total
return for all fiscal periods shown.
# The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset and
commission recapture arrangements.
++ The per share amounts which are shown have been computed based on the
average number of shares outstanding during each fiscal period.
[sec] After waiver of a portion of the investment management fee. Had Management
not undertaken such action the annualized ratio of net expenses to average
daily net assets would have been:
Year Ended
December 31, 2003
0.93%
16
Report of Ernst & Young LLP, Independent Auditors
To the Board of Trustees of
Neuberger Berman Advisers Management Trust and
Shareholders of Growth Portfolio
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Growth Portfolio, one of the series
constituting the Neuberger Berman Advisers Management Trust (the "Trust"), as
of December 31, 2003, 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 December 31, 2003, 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
Growth Portfolio of Neuberger Berman Advisers Management Trust at December 31,
2003, 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 its
financial highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
February 6, 2004
17
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Trustees and Officers (Unaudited)
The following tables set forth information concerning the trustees and officers
of the Trust. All persons named as trustees and officers also serve in similar
capacities for other funds administered or managed by NB Management and
Neuberger Berman. The Statement of Additional Information includes additional
information about fund trustees and is available upon request, without charge,
by calling (800) 877-9700.
Information about the Board of Trustees
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
John Cannon (73) Trustee since Consultant. Formerly, Chairman 37 Independent Trustee or Director of
2000 and Chief Investment Officer, three series of Oppenheimer Funds:
CDC Capital Management Limited Term New York Municipal
(registered investment adviser), Fund, Rochester Fund Municipals,
1993-January 1999; prior thereto, and Oppenheimer Convertible
President and Chief Executive Securities Fund since 1992.
Officer, AMA Investment
Advisors, an affiliate of the
American Medical Association.
- ------------------------------------------------------------------------------------------------------------------------------------
Faith Colish (68) Trustee since Counsel, Carter Ledyard & 37 Director, American Bar Retirement
1984 Milburn LLP (law firm) since Association (ABRA) since 1997
October 2002; Formerly, (not-for-profit membership
Attorney-at-Law and President, association).
Faith Colish, A Professional
Corporation, 1980 to 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Walter G. Ehlers (70) Trustee since Consultant; Retired President 37 None.
1989 and Trustee, Teachers Insurance
& Annuity (TIAA) and College
Retirement Equities Fund
(CREF).
- ------------------------------------------------------------------------------------------------------------------------------------
C. Anne Harvey (66) Trustee since Consultant, C. A. Harvey 37 Formerly, Member, Individual
1998 Associates, since June 2001; Investors Advisory Committee to the
Formerly, Director, AARP, 1978 New York Stock Exchange Board of
to December 2001. Directors, 1998 to June 2002;
President, Board of Associates to
The National Rehabilitation
Hospital's Board of Directors, 2002;
Member, American Savings
Education Council's Policy Board
(ASEC), 1998-2000; Member,
Executive Committee, Crime
Prevention Coalition of America,
1997-2000.
- ------------------------------------------------------------------------------------------------------------------------------------
18
Trustees and Officers (Unaudited) cont'd
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Barry Hirsch (70) Trustee since Attorney-at-Law. Senior 37 None.
2000 Counsel, Loews Corporation
(diversified financial corporation)
May 2002 until April 2003; prior
thereto, Senior Vice President,
Secretary and General Counsel,
Loews Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
Robert A. Kavesh (76) Trustee since Marcus Nadler Professor of 37 Director, DEL Laboratories, Inc.
2000 Finance and Economics (cosmetics and pharmaceuticals)
Emeritus, New York University, since 1978; The Caring Community
Stern School of Business. (not-for-profit).
- ------------------------------------------------------------------------------------------------------------------------------------
Howard A. Mileaf (67) Trustee since Retired. Formerly, Vice 37 Director, WHX Corporation
1999 President and Special Counsel, (holding company) since August
WHX Corporation (holding 2002; Director, WebFinancial
company), 1993-2001. Corporation (holding company)
since December 2002; Director, State
Theatre of New Jersey (not-for-
profit theater), since 2000; Formerly,
Director, Kevlin Corporation
(manufacturer of microwave and
other products).
- ------------------------------------------------------------------------------------------------------------------------------------
John P. Rosenthal (71) Trustee since Senior Vice President, Burnham 37 Director, 92nd Street Y (non-profit),
2000 Securities Inc. (a registered since 1967; Formerly, Director,
broker-dealer) since 1991. Cancer Treatment Holdings, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
William E. Rulon (71) Trustee since Retired. Senior Vice President, 37 Director, Pro-Kids Golf and
2000 Foodmaker, Inc. (operator and Learning Academy (teach golf and
franchiser of restaurants) until computer usage to "at risk" children),
January 1997. since 1998; Director, Prandium, Inc.
(restaurants) from March 2001 until
July 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Cornelius T. Ryan (72) Trustee since Founding General Partner, 37 Director, Capital Cash Management
2000 Oxford Partners and Oxford Trust (money market fund),
Bioscience Partners (venture Narragansett Insured Tax-Free
capital partnerships) and Income Fund, Rocky Mountain
President, Oxford Venture Equity Fund, Prime Cash Fund,
Corporation. several private companies and
QuadraMed Corporation
(NASDAQ).
- ------------------------------------------------------------------------------------------------------------------------------------
19
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Tom Decker Seip (53) Trustee since General Partner, Seip 37 Director, H&R Block, Inc. (financial
2000 Investments LP (a private services company) since May 2001;
investment partnership); Formerly, Director, General Magic
President and CEO, Westaff, (voice recognition software), 2001-
Inc. (temporary staffing), May 2002; Director, Forward
2001 to January 2002; Senior Management, Inc. (asset
Executive at the Charles management) since 2001; Formerly,
Schwab Corporation from 1983 Director, E-Finance Corporation
to 1999, including Chief (credit decisioning services), 1999-
Executive Officer, Charles 2003; Director, Save-Daily.com
Schwab Investment (micro investing services), 1999-
Management, Inc. and Trustee, 2003; Director, Offroad Capital Inc.
Schwab Family of Funds and (pre-public internet commerce
Schwab Investments from 1997 company).
to 1998 and Executive Vice
President-Retail Brokerage,
Charles Schwab Investment
Management from 1994 to
1997.
- ------------------------------------------------------------------------------------------------------------------------------------
Candace L. Straight (56) Trustee since Private investor and consultant 37 Director, Providence Washington
1999 specializing in the insurance (property and casualty insurance
industry; Formerly, Advisory company), since December 1998;
Director, Securitas Capital LLC Director, Summit Global Partners
(a global private equity (insurance brokerage firm) since
investment firm dedicated to October 2000.
making investments in the
insurance sector), 1998 until
December 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Peter P. Trapp (59) Trustee since Regional Manager for Atlanta 37 None.
1984 Region, Ford Motor Credit
Company since August 1997;
prior thereto, President, Ford
Life Insurance Company, April
1995 until August 1997.
- ------------------------------------------------------------------------------------------------------------------------------------
20
Trustees and Officers (Unaudited) cont'd
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Edward I. O'Brien* (75) Trustee since Formerly, Member, Investment 37 Director, Legg Mason, Inc. (financial
2000 Policy Committee, Edward services holding company), since
Jones, 1993-2001; President, 1993; Director, Boston Financial
Securities Industry Association Group (real estate and tax shelters)
("SIA") (securities industry's 1993-1999.
representative in government
relations and regulatory matters
at the federal and state levels)
1974-1992; Adviser to SIA,
November 1992-November
1993.
- ------------------------------------------------------------------------------------------------------------------------------------
Jack L. Rivkin* (63) President and Executive Vice President, 37 Director, Dale Carnegie and
Trustee since Neuberger Berman Inc. Associates, Inc. (private company)
December (holding company) since 2002; since 1998; Director, Emagin Corp.
2002 Executive Vice President and (public company) since 1997;
Chief Investment Officer, Director, Solbright, Inc. (private
Neuberger Berman since 2002 company) since 1998; Director,
and 2003, respectively; Head of Infogate, Inc. (private company)
Research and Research Sales since 1997.
and Trading Departments of
Neuberger Berman since 2002;
Director and Chairman, NB
Management since December
2002; Formerly, Executive Vice
President, Citigroup
Investments, Inc. from
September 1995 to February
2002; Executive Vice President,
Citigroup Inc. from September
1995 to February 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
21
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Peter E. Sundman* (44) Chairman of Executive Vice President, 37 Executive Vice President, Neuberger
the Board, Neuberger Berman since 1999; Berman Inc. (holding company)
Chief Formerly, Principal, Neuberger since 1999 and Formerly, Director
Executive Berman from 1997 until 1999; from October 1999 through March
Officer and Senior Vice President, NB 2003; President and Director, NB
Trustee since Management from 1996 until Management since 1999; Head of
2000; 1999. Neuberger Berman Inc.'s Mutual
President and Funds and Institutional Business
Chief since 1999; Director and Vice
Executive President, Neuberger & Berman
Officer from Agency, Inc. since 2000; Trustee,
1998 to 2000 Frost Valley YMCA.
- ------------------------------------------------------------------------------------------------------------------------------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the Trust's Trust Instrument, each Trustee shall hold office for
life or until his or her successor is elected or the Trust terminates;
except that (a) any Trustee may resign by delivering a written resignation;
(b) any Trustee may be removed with or without cause at any time by a
written instrument signed by at least two-thirds of the other Trustees; (c)
any Trustee who requests to be retired, or who has become unable to serve,
may be retired by a written instrument signed by a majority of the other
Trustees; and (d) any Trustee may be removed at any shareholder meeting by a
vote of at least two-thirds of the outstanding shares.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
* Indicates a Trustee who is an "interested person" within the meaning of the
1940 Act. Mr. Sundman and Mr. Rivkin are interested persons of the Trust by
virtue of the fact that they are officers and/or directors of NB Management
and Executive Vice Presidents of Neuberger Berman. Mr. O'Brien is an
interested person of the Trust by virtue of the fact that he is a director
of Legg Mason, Inc., a wholly owned subsidiary of which, from time to time,
serves as a broker or dealer to the Funds and other funds for which NB
Management serves as investment manager.
22
Trustees and Officers (Unaudited) cont'd
Information about the Officers of the Trust
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
- --------------------------------------------------------------------------------------------------------------------------
Claudia A. Brandon (47) Secretary since 1985 Vice President, Neuberger Berman since 2002 and
employee since 1999; Vice President-Mutual Fund Board
Relations, NB Management since 2000; Vice President,
NB Management from 1986 to 1999; Secretary,
ten registered investment companies for which
NB Management acts as investment manager and
administrator (four since 2002 and three since 2003).
Robert Conti (47) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President, Neuberger Berman from 1999 until 2003;
Senior Vice President, NB Management since 2000;
Controller, NB Management until 1996; Treasurer,
NB Management from 1996 until 1999; Vice President,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (three since 2000, four since 2002 and
three since 2003).
Brian P. Gaffney (50) Vice President since 2000 Managing Director, Neuberger Berman since 1999;
Senior Vice President, NB Management since 2000;
Vice President, NB Management from 1997 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Sheila R. James (38) Assistant Secretary since 2002 Employee, Neuberger Berman since 1999; Employee,
NB Management from 1991 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
Kevin Lyons (48) Assistant Secretary since Employee, Neuberger Berman since 1999; Employee,
March 2003 NB Management from 1993 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (since 2003).
John M. McGovern (33) Assistant Treasurer since 2002 Employee, NB Management since 1993; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
23
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
- --------------------------------------------------------------------------------------------------------------------------
Barbara Muinos (45) Treasurer and Principal Financial Vice President, Neuberger Berman since 1999; Assistant
and Accounting Officer since 2002; Vice President, NB Management from 1993 to 1999;
prior thereto, Assistant Treasurer Treasurer and Principal Financial and Accounting
since 1996 Officer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003);
Assistant Treasurer of three registered investment
companies for which NB Management acts as investment
manager and administrator from 1996 until 2002.
Frederic B. Soule (57) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President; Neuberger Berman from 1999 until 2003;
Vice President, NB Management from 1995 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Trani Jo Wyman (34) Assistant Treasurer since 2002 Employee, NB Management since 1991; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
- -------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the By-Laws of the Trust, each officer elected by the Trustees
shall hold office until his or her successor shall have been elected and
qualified or until his or her earlier death, inability to serve, or
resignation. Officers serve at the pleasure of the Trustees and may be
removed at any time with or without cause.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
24
Report of Votes of Shareholders (Unaudited)
A special meeting of shareholders of Neuberger Berman Advisers Management Trust
Growth Portfolio (the "Fund") was held on September 23, 2003. Upon completion
of the acquisition of Neuberger Berman Inc. by Lehman Brothers Holdings Inc.
(the "Transaction"), the management agreement between the Trust, on behalf of
the Fund, and Neuberger Berman Management Inc. ("NB Management"), and the
sub-advisory agreement with respect to the Trust and each Fund, between NB
Management and Neuberger Berman, LLC automatically terminated. To provide for
continuity of management, the shareholders of the Fund voted on the following
matters, which became effective upon completion of the Transaction on October
31, 2003:
Proposal 1-To Approve a New Management Agreement between the Trust, on behalf
of the Fund, and NB Management
Votes For Votes Against Abstentions*
18,645,227.374 886,795.829 1,363,645.075
Proposal 2-To Approve a New Sub-Advisory Agreement with respect to the Trust
and each Fund, between NB Management and Neuberger Berman, LLC
Votes For Votes Against Abstentions*
18,590,622.736 974,369.141 1,330,676.401
* Abstentions were counted as shares that were present and entitled to vote for
purposes of determining a quorum and had a negative effect on the proposals.
25
_______________________________________________________________________________
Annual Report [NEUBERGER | BERMAN LOGO]
December 31, 2003 A Lehman Brothers Company
Neuberger Berman
Advisers
Management
Trust
Guardian
Portfolio
B1016 02/04
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Guardian Portfolio Manager's Commentary
We are pleased to report that in 2003 the AMT Guardian Portfolio performed very
strongly, outperforming both the Standard & Poor's 500 Index and the Russell
1000 Value Index.2
Beginning with the bursting of the internet bubble in March of 2000, the U.S.
economy has had to endure numerous external shocks, including 9/11, two wars,
accounting fraud, high profile financial failures, and a SARS epidemic. Despite
the gloom and uncertainty created by these events, the preconditions for a more
vibrant economic recovery had been building for several years. Specifically, the
U.S. economy was being supported by significant fiscal and monetary stimulus.
Consumer spending remained firm, helped by record low interest rates and the
refinancing boom. GDP and corporate earnings continued to grow.
Average Annual Total Return(1)
Guardian Guardian Russell 1000(R)
Portfolio-Class I Portfolio-Class S Value(2) S&P 5002
1 Year 31.76% 31.39% 30.03% 28.67%
5 Year 2.10% 2.02% 3.56% (0.57%)
Life of Fund 7.22% 7.15% 6.57% 4.73%
- ---------------------------------------------------------------------------------------------------
Inception Date 11/3/1997 8/2/2002
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Comparison of a $10,000 Investment
Guardian Russell 1000 (R)
Portfolio Class I Value S&P 500
- --------------------------------------------------------------------------------
11/3/1997 $ 10,000 $ 10,000 $ 10,000
12/31/1997 $ 10,520 $ 10,747 $ 10,642
12/31/1998 $ 13,851 $ 12,427 $ 13,683
12/31/1999 $ 15,920 $ 13,339 $ 16,562
12/31/2000 $ 16,100 $ 14,275 $ 15,054
12/31/2001 $ 15,857 $ 13,477 $ 13,267
12/31/2002 $ 11,663 $ 11,385 $ 10,336
12/31/2003 $ 15,368 $ 14,804 $ 13,299
Value as of 12/31/03
Guardian Portfolio $ 15,368
Russell 1000 Value $ 14,804
S&P 500 $ 13,299
This chart shows the value of a hypothetical $10,000 investment in the Fund over
the past 10 fiscal years, or since the Fund's inception, if it has not operated
for 10 years. The results are compared with benchmarks, which may include a
broad-based market index and or a narrower index. Please note that market
indexes do not include expenses. All results include the reinvestment of
dividends and capital gain distributions. Results represent past performance and
do not indicate future results.
At the start of 2003, we believed that if the uncertainty brought about by the
Iraq crisis was resolved quickly, consumer and business confidence would be
restored and the economy would finally gain traction. Fortunately, that is
precisely what happened. Although we expected equity investors to respond
favorably to the easing of global tensions and an improving economy, we were
pleasantly surprised at the market's very strong showing this year.
Our financial services sector holdings made the largest contribution to
portfolio returns, followed by our information technology, industrials, and
healthcare sector investments. Stock selection in the technology and healthcare
sectors was largely responsible for the portfolio's superior relative returns.
We had a negative return in just one sector category: consumer staples.
Recall that our investment process is based on our own intensive fundamental
research. We are valuation sensitive, long-term investors, who evaluate the
business potential for portfolio candidates based on our targeted three-to-five
year holding period. Within industry sectors, we seek out the companies that we
believe are undervalued and have prospects for above-average earnings growth.
Finally, our outlook on the economy will influence the stock selection process.
Since we anticipated the economy gaining momentum at some point in 2003 and the
valuations of industry leaders in economically sensitive sectors at
2
depressed levels, we felt high quality cyclicals had particularly compelling
risk/reward characteristics. Indeed, as the economy gained momentum in the
second quarter, our cyclical holdings performed exceptionally well.
Teradyne, a leader in the semiconductor equipment testing business, is a good
example. Teradyne is the market share and technological leader in semiconductor
test equipment used for testing next generation semiconductor components. The
company's business enjoys significant operating leverage in that once the
economy began improving and semiconductor sales increased, the demand for
manufacturing and testing equipment would explode. Teradyne performed well for
us in 2002 and nearly doubled in 2003. Since we believe we are still in the
early stages of a technology driven capital spending recovery, we think our
investment in Teradyne will continue to reward us in the year ahead.
State Street Research, one of our most productive investments in the financials
sector, further demonstrates the value of our commitment to independent
research. State Street has long been the industry leader in transaction and
processing services for the investment industry. Over the long-term, the
company's customers are benefiting from an increased trend toward outsourcing
as mutual fund companies and investment advisors move to streamline their own
cost structures. We first purchased State Street following a disappointing
earnings report early in 2003. At the time we believed that the company's share
price was overly discounting near-term business prospects and that its business
would be a significant near-term beneficiary of a recovery in the financial
markets. Our timing was opportune, but over the longer term, we expect State
Street to remain a core portfolio holding as the company is well positioned to
benefit from the outsourcing needs of its customers.
We are stock pickers, not economists or market forecasters. However, as we
noted, our outlook on the economy can play a role in guiding us to potentially
profitable investment opportunities. So, we will offer our current thoughts on
the economy and market. Looking into 2004, we remain cautiously optimistic on
the economy. GDP growth will probably moderate in the year ahead, but we
believe increases in business investment and technology oriented capital
spending are likely to compensate for any slowdown in consumer spending.
Following last year's strong equity market returns, equity valuations are no
longer as attractive. Looking forward, we would not be surprised if in the
years ahead, equity market returns regress to the mean, providing high
single-digit to low double-digit annualized returns. However, we remain
confident that our research based approach to identifying high quality, well
positioned companies trading at discounted valuations can continue to produce
above-market average returns.
Sincerely,
/s/ARTHUR MORETTI
- -----------------
ARTHUR MORETTI
PORTFOLIO MANAGER
1. For Class I, 31.76%, 2.10% and 7.22% were the average annual total returns
for the 1-year, 5- year and since inception (11/03/97) periods ended December
31, 2003. For Class S, 31.39%, 2.02% and 7.15% were the average annual total
returns for the 1-year, 5-year and since inception (11/03/97) periods ended
December 31, 2003. Performance shown prior to August 2002 for the Class S
3
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
shares is of the Class I shares, which has lower expenses and typically higher
returns than Class S shares. Neuberger Berman Management Inc. ("NBMI") has
agreed to absorb certain expenses of the AMT Portfolios. Without this
arrangement, which is subject to change, the total returns of the Portfolios
would be less. Total return includes reinvestment of dividends and capital gain
distributions. Performance data quoted represent past performance and the
investment return and principal value of an investment will fluctuate so that
the shares, when redeemed, may be worth more or less than original cost. The
performance information does not reflect fees and expenses of the insurance
companies.
2. The S&P 500 Index is widely regarded as the standard for measuring large-cap
U.S. stock market performance and includes a representative sample of leading
companies in leading industries. The Russell 1000[RegTM] Index measures the
performance of the 1,000 largest companies in the Russell 3000[RegTM] Index
(which measures the performance of the 3,000 largest U.S. companies based on
total market capitalization). The Russell 1000 Index represents approximately
92% of the total market capitalization of the Russell 3000 Index. The Russell
1000 Value Index measures the performance of those Russell 1000 companies with
lower price-to-book ratios and lower forecasted growth values. 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 these indices are prepared
or obtained by NBMI and include reinvestment of all dividends and capital gain
distributions. The Portfolio may invest directly in many securities not
included in the above-described indices.
The composition, industries and holdings of the Portfolio are subject to
change.
The investments for the Portfolio are managed by the same portfolio manager(s)
who manage one or more other mutual funds that have similar names, investment
objectives and investment styles as the Portfolio. You should be aware that the
Portfolio is likely to differ from the other mutual funds in size, cash flow
pattern and tax matters. Accordingly, the holdings and performance of the
Portfolio can be expected to vary from those of the other mutual funds.
Shares of the separate Portfolios of Neuberger Berman Advisers Management Trust
are sold only through the currently effective prospectus and are not available
to the general public. Shares of this Portfolio may be purchased only by life
insurance companies to be used with their separate accounts that fund variable
annuity and variable life insurance policies and by qualified pension and
retirement plans.
(C) 2004 Neuberger Berman Management Inc., distributor. All rights reserved.
4
Schedule of Investments Guardian Portfolio
Number of Shares Market Value+
Common Stocks (96.2%)
Banking & Financial (7.4%)
81,700 Fifth Third Bancorp $ 4,828,470
78,700 MBNA Corp. 1,955,695
110,200 State Street 5,739,216
-------------
12,523,381
Consumer Cyclicals (4.2%)
107,000 Mattel Inc. 2,061,890\P
131,800 Target Corp. 5,061,120
-------------
7,123,010
Defense (4.1%)
133,600 L-3 Communications Holdings 6,861,696*
Diversified (3.3%)
60,700 Danaher Corp. 5,569,225
Energy (2.2%)
75,600 BP PLC ADR 3,730,860
Financial Services (6.7%)
48,800 Ambac Financial Group 3,386,232
75,400 Citigroup Inc. 3,659,916
43,500 Goldman Sachs 4,294,755
-------------
11,340,903
Health Products & Services (6.2%)
64,900 Quest Diagnostics 4,744,839
99,000 UnitedHealth Group 5,759,820
-------------
10,504,659
Industrial Gases (3.1%)
138,600 Praxair, Inc. 5,294,520
Insurance (5.8%)
1,650 Berkshire Hathaway Class B 4,644,750*
153,500 Willis Group Holdings 5,229,745
-------------
9,874,495
Media (7.9%)
151,000 Comcast Corp. Class A
Special 4,723,280*
734,856 Liberty Media 8,737,439*
-------------
13,460,719
Oil & Gas (6.9%)
104,600 EOG Resources 4,829,382
153,400 Newfield Exploration 6,832,436*
-------------
11,661,818
Oil Services (2.0%)
62,800 Schlumberger Ltd. 3,436,416
Pharmaceutical (4.0%)
74,500 Millipore Corp. 3,207,225*
76,000 Novartis AG ADR 3,487,640
-------------
6,694,865
Number of Shares Market Value+
Real Estate (3.8%)
56,600 AMB Property $ 1,861,008
156,600 Equity Residential 4,621,266
-------------
6,482,274
Technology (13.0%)
144,400 Dell Inc. 4,903,824*
102,700 National Instruments 4,669,769
155,325 Synopsys, Inc. 5,243,772*
223,200 Teradyne, Inc. 5,680,440*
53,100 Texas Instruments 1,560,078\P
-------------
22,057,883
Telecommunications (3.7%)
249,700 Vodafone Group ADR 6,252,488
Transportation (3.5%)
41,200 Burlington Northern
Santa Fe 1,332,820
72,400 Canadian National Railway 4,581,472
-------------
5,914,292
Utilities (4.0%)
30,400 FPL Group 1,988,768
632,100 National Grid Transco 4,516,144
5,400 National Grid Transco ADR 195,750
-------------
6,700,662
Waste Management (4.4%)
94,400 Republic Services 2,419,472
171,100 Waste Management 5,064,560
-------------
7,484,032
Total Common Stocks
(Cost $126,603,839)
162,968,198
-------------
Principal Amount
Short-Term Investments (4.0%)
$ 560,500 N&B Securities Lending
Quality Fund, LLC 560,500++
6,191,373 Neuberger Berman
Institutional Cash Fund
Trust Class 6,191,373@
-------------
Total Short-Term Investments
(Cost $6,751,873) 6,751,873#
-------------
Total Investments (100.2%)
(Cost $133,355,712)
169,720,071##
Liabilities, less cash, receivables and
other assets [(0.2%)]
(340,532)
-------------
Total Net Assets (100.0%)
$ 169,379,539
-------------
See Notes to Schedule of Investments 5
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Schedule of Investments Guardian Portfolio
- ---------------------------------------------------
+ Investment securities of the Fund are valued at the latest sales price
where that price is readily available; securities for which no sales were
reported, unless otherwise noted, are valued at the mean between the
closing bid and asked prices. Securities traded primarily on the NASDAQ
Stock Market are normally valued by the Fund at the NASDAQ Official Closing
Price ("NOCP") provided by NASDAQ each business day. The NOCP is the most
recently reported price as of 4:00:02 p.m., Eastern time, unless that price
is outside the range of the "inside" bid and asked prices (i.e., the bid
and asked prices that dealers quote to each other when trading for their
own accounts); in that case, NASDAQ will adjust the price to equal the
inside bid or asked price, whichever is closer. Because of delays in
reporting trades, the NOCP may not be based on the price of the last trade
to occur before the market closes. The Fund values all other securities by
a method the Board of Trustees of Neuberger Berman Advisers Management
Trust believes accurately reflects fair value. Numerous factors may be
considered when determining the fair value of a security, including
available analyst, media or other reports, trading in futures or ADRs and
whether the issuer of the security being fair valued has other securities
outstanding. 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.
# At cost, which approximates market value.
## At December 31, 2003, the cost of investments for U.S. Federal income tax
purposes was $133,808,955. Gross unrealized appreciation of investments was
$35,911,116 and gross unrealized depreciation of investments was $0,
resulting in net unrealized appreciation of $35,911,116, based on cost for
U.S. Federal income tax purposes.
* Non-income producing security.
\P All or a portion of this security is on loan (see Note A of Notes to
Financial Statements).
@ Neuberger Berman Institutional Cash Fund is also managed by Neuberger
Berman Management Inc. (see Note A of Notes to Financial Statements).
++ Affiliated issuer (see Note A of Notes to Financial Statements).
See Notes to Financial Statements 6
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Assets and Liabilities
- -----------------------------------
Guardian
Neuberger Berman Advisers Management Trust Portfolio
Assets
Investments in securities, at market value*+ (Note A)-see Schedule of Investments:
====================================================================================================
Unaffiliated issuers $ 162,968,198
- ----------------------------------------------------------------------------------------------------
Non-controlled affiliated issuers 6,751,873
- ----------------------------------------------------------------------------------------------------
169,720,071
====================================================================================================
Dividends and interest receivable 321,315
- ----------------------------------------------------------------------------------------------------
Receivable for securities sold 504,268
====================================================================================================
Receivable for Fund shares sold 122,603
- ----------------------------------------------------------------------------------------------------
Prepaid expenses and other assets 4,922
- ----------------------------------------------------------------------------------------------------
Total Assets 170,673,179
- ----------------------------------------------------------------------------------------------------
Liabilities
Payable for collateral on securities loaned (Note A) 560,500
====================================================================================================
Payable for securities purchased 500,779
- ----------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 30,210
====================================================================================================
Payable to investment manager (Note B) 74,030
- ----------------------------------------------------------------------------------------------------
Payable to administrator (Note B) 40,828
====================================================================================================
Accrued expenses and other payables 87,293
- ----------------------------------------------------------------------------------------------------
Total Liabilities 1,293,640
- ----------------------------------------------------------------------------------------------------
Net Assets at value $ 169,379,539
- ----------------------------------------------------------------------------------------------------
Net Assets consist of:
Paid-in capital $ 189,547,809
====================================================================================================
Undistributed (distributions in excess of) net investment income 376,027
- ----------------------------------------------------------------------------------------------------
Accumulated net realized gains (losses) on investments (56,912,117)
====================================================================================================
Net unrealized appreciation (depreciation) in value of investments 36,367,820
- ----------------------------------------------------------------------------------------------------
Net Assets at value $ 169,379,539
- ----------------------------------------------------------------------------------------------------
Net Assets
Class I $ 169,233,163
====================================================================================================
Class S 146,376
- ----------------------------------------------------------------------------------------------------
Shares Outstanding ($.001 par value; unlimited shares authorized)
Class I 12,101,257
====================================================================================================
Class S 10,437
- ----------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
Class I $ 13.98
====================================================================================================
Class S 14.02
- ----------------------------------------------------------------------------------------------------
+Securities of unaffiliated issuers on loan, at market value $ 538,332
- ----------------------------------------------------------------------------------------------------
*Cost of investments:
Unaffiliated issuers $ 126,603,839
====================================================================================================
Non-controlled affiliated issuers 6,751,873
- ----------------------------------------------------------------------------------------------------
Total cost of investments $ 133,355,712
- ----------------------------------------------------------------------------------------------------
See Notes to Financial Statements 7
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST FOR THE YEAR ENDED DECEMBER 31, 2003
Statement of Operations
- -----------------------
Guardian
Neuberger Berman Advisers Management Trust Portfolio
Investment Income
Income:
Dividend income $ 1,792,956
========================================================================================================
Income from securities loaned-net (Note A) 49,653
- --------------------------------------------------------------------------------------------------------
Income from investments in affiliated issuers (Note A) 39,724
========================================================================================================
Foreign taxes withheld (Note A) (47,060)
- --------------------------------------------------------------------------------------------------------
Total income 1,835,273
- --------------------------------------------------------------------------------------------------------
Expenses:
Investment management fee (Notes A & B) 826,977
========================================================================================================
Administration fee (Note B):
Class I 450,738
- --------------------------------------------------------------------------------------------------------
Class S 341
========================================================================================================
Distribution fees (Note B):
Class S 284
========================================================================================================
Audit fees 28,151
- --------------------------------------------------------------------------------------------------------
Custodian fees (Note B) 90,119
========================================================================================================
Insurance expense 3,741
- --------------------------------------------------------------------------------------------------------
Legal fees 20,765
========================================================================================================
Shareholder reports 14,571
- --------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 28,683
========================================================================================================
Miscellaneous 6,286
- --------------------------------------------------------------------------------------------------------
Total expenses 1,470,656
- --------------------------------------------------------------------------------------------------------
Investment management fee waived (Note A) (5,024)
Expenses reduced by custodian fee expense offset and commission recapture arrangements (5,537)
- --------------------------------------------------------------------------------------------------------
(Note B)
- --------------------------------------------------------------------------------------------------------
Total net expenses 1,460,095
- --------------------------------------------------------------------------------------------------------
Net investment income (loss) 375,178
- --------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investment securities sold 2,520,628
========================================================================================================
Net realized gain (loss) on foreign currency (Note A) 1,024
- --------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) in value of:
Investment securities (Note A) 40,013,881
- --------------------------------------------------------------------------------------------------------
Foreign currency (Note A) 2,774
- --------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 42,538,307
========================================================================================================
Net increase (decrease) in net assets resulting from operations $42,913,485
========================================================================================================
See Notes to Financial Statements 8
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Changes in Net Assets
- ----------------------------------
Guardian Portfolio
------------------
Neuberger Berman Advisers Management Trust Year Ended December 31,
2003 2002
Increase (Decrease) in Net Assets:
From Operations:
Net investment income (loss) $ 375,178 $ 1,438,960
- ------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 2,521,652 (46,087,651)
- ------------------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of investments 40,016,655 (10,742,035)
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 42,913,485 (55,390,726)
- ------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders From:
Net investment income:
Class I (1,313,767) (1,258,878)
- ------------------------------------------------------------------------------------------------------------------
Class S (231) -
==================================================================================================================
Total distributions to shareholders (1,313,998) (1,258,878)
- ------------------------------------------------------------------------------------------------------------------
From Fund Share Transactions:
Proceeds from shares sold:
Class I 68,474,538 98,012,312
==================================================================================================================
Class S 20,926 100,865
- ------------------------------------------------------------------------------------------------------------------
Proceeds from reinvestment of dividends and distributions:
Class I 1,313,767 1,258,878
==================================================================================================================
Class S 231 -
- ------------------------------------------------------------------------------------------------------------------
Payments for shares redeemed:
Class I (82,374,724) (93,185,001)
==================================================================================================================
Class S (2,764) -
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from Fund share transactions (12,568,026) 6,187,054
- ------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets 29,031,461 (50,462,550)
- ------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of year 140,348,078 190,810,628
- ------------------------------------------------------------------------------------------------------------------
End of year $ 169,379,539 $ 140,348,078
- ------------------------------------------------------------------------------------------------------------------
Undistributed (distributions in excess of) net investment income at end of year $ 376,027 $ 1,313,823
- ------------------------------------------------------------------------------------------------------------------
Number of Fund Shares:
Sold:
Class I 5,816,296 7,754,625
==================================================================================================================
Class S 1,657 8,984
- ------------------------------------------------------------------------------------------------------------------
Issued on reinvestment of dividends and distributions:
Class I 101,921 88,967
==================================================================================================================
Class S 18 -
- ------------------------------------------------------------------------------------------------------------------
Redeemed:
Class I (6,922,626) (7,774,336)
- ------------------------------------------------------------------------------------------------------------------
Class S (222) -
==================================================================================================================
Net increase (decrease) in shares outstanding (1,002,956) 78,240
==================================================================================================================
See Notes to Financial Statements 9
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Financial Statements Guardian Portfolio
- ------------------------------------------------
Note A--Summary of Significant Accounting Policies:
1 General: Guardian Portfolio (the "Fund") is a separate operating series of
Neuberger Berman Advisers Management Trust (the "Trust"), a Delaware
statutory trust organized pursuant to a Trust Instrument dated May 23,
1994. The Trust is currently comprised of ten separate operating series
(each a "Series," collectively, the "Funds") each of which (except Focus
Portfolio) is diversified. The Trust is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and its shares are registered under the
Securities Act of 1933, as amended (the "1933 Act"). The Fund currently
offers Class I and Class S shares. Class S had no operations until August
2, 2002, other than matters relating to its organization and registration
of its shares under the 1933 Act. The Trustees of the Trust may establish
additional series or classes of shares without the approval of
shareholders.
The assets of each Series of the Trust belong only to that Series, and the
liabilities of each Series are borne solely by that Series and no other.
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires Neuberger
Berman Management Inc. ("Management") to make estimates and assumptions at
the date of the financial statements. Actual results could differ from
those estimates.
2 Portfolio valuation: Investment securities are valued as indicated in the
notes following the Schedule of Investments.
3 Foreign currency translation: The accounting records of the Fund 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. Net unrealized
foreign currency gain (loss) arises from changes in the value of assets and
liabilities, other than investments in securities, as a result of changes
in exchange rates and are stated separately in the Statement of Operations.
4 Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the
ex-dividend date or, for certain foreign dividends, as soon as the Fund
becomes aware of the dividends. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, including accretion of original issue discount,
where applicable, and accretion of discount on short-term investments, 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 and stated separately in the Statement of Operations.
Included in net realized gain (loss) on investment securities sold are
proceeds from the settlements of class action litigation in which the Fund
participated as a plaintiff. The amount of such proceeds for the year ended
December 31, 2003 was $187,374.
5 Federal income taxes: The Funds are treated as separate entities 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
10
Notes to Financial Statements Guardian Portfolio cont'd
- -------------------------------------------------------
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.
6 Dividends and distributions to shareholders: The Fund may earn income, net
of expenses, daily on its investments. Income dividends and distributions
from net realized capital gains, if any, generally are distributed in
October. Income dividends and capital gain distributions to shareholders
are recorded on the ex-dividend date. To the extent the Fund's net realized
capital gains, if any, can be offset by capital loss carryforwards
($11,716,397, $39,047,105 and $5,695,372 expiring in 2009, 2010 and 2011,
respectively, determined as of December 31, 2003), it is the policy of the
Fund not to distribute such gains.
The Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a tax 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 in the components of net assets on the
Statement of Assets and Liabilities.
The tax character of distributions paid during the years ended December 31,
2003 and 2002 were as follows:
Distributions Paid From:
Ordinary Income Total
2003 2002 2003 2002
$1,313,998 $1,258,878 $1,313,998 $1,258,878
As of December 31, 2003, the components of distributable earnings
(accumulated losses) on a U.S. Federal income tax basis were as follows:
Unrealized Loss
Undistributed Appreciation Carryforwards
Ordinary Income (Depreciation) and Deferrals Total
$376,027 $35,914,577 $(56,458,874) $(20,168,270)
The difference between book basis and tax basis is attributable primarily
to the tax deferral of losses on wash sales, and the realization for tax
purposes of unrealized gain (loss) on certain forward foreign currency
contracts.
7 Foreign taxes: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
8 Expense allocation: Expenses directly attributable to a Series are charged
to that Series. Expenses of the Trust that are not directly attributed to a
Series are allocated among the Funds, on the basis of relative net assets,
except where a more appropriate allocation of expenses to each of the Funds
can otherwise be made fairly. Expenses borne by the complex of related
investment companies, which includes open-end and closed-end investment
companies for which Management serves as investment adviser, that are not
directly attributed to a Series or the Trust, are allocated among the Funds
and the other investment
11
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
companies in the complex or series thereof, on the basis of relative net
assets, except where a more appropriate allocation of expenses to each
investment company in the complex or series thereof can otherwise be made
fairly. The Fund's expenses (other than those specific to each class) are
allocated proportionally each day between the classes based upon the
relative net assets of each class.
9 Security lending: Pursuant to an Exemptive Order issued by the Securities
and Exchange Commission, the Fund entered into a Securities Lending
Agreement ("Agreement") with Neuberger Berman, LLC ("Neuberger") on April
17, 2003. Securities loans involve certain risks in the event a borrower
should fail financially, including delays or inability to recover the lent
securities or foreclose against the collateral. The investment manager,
under the general supervision of the Trust's Board of Trustees, monitors
the creditworthiness of the parties to whom the Fund makes security loans.
The Fund will not lend securities on which covered call options have been
written, or lend securities on terms which would prevent the Fund from
qualifying as a regulated investment company. The Fund receives cash
collateral equal to at least 102% of the current market value of the loaned
securities. The Fund invests the cash collateral in the N&B Securities
Lending Quality Fund, LLC ("investment vehicle"), which is managed by State
Street Bank and Trust Company ("State Street") pursuant to guidelines
approved by the Trust's investment manager. Neuberger guarantees a minimum
revenue to the Fund under the Agreement, and receives a portion of any
revenue earned in excess of the guaranteed amount as a lending agency fee.
At December 31, 2003, the Fund had not paid Neuberger any fees under the
Agreement.
Prior to April 17, 2003, the Fund had a Securities Lending Agreement with
Morgan Stanley & Co. Incorporated ("Morgan"). The Fund received cash
collateral equal to at least 100% of the current market value of the loaned
securities. The Fund invested the cash collateral in the investment
vehicle. Income earned on the investment vehicle was paid to Morgan
monthly. The Fund received a fee, payable monthly, negotiated by the Fund
and Morgan, based on the number and duration of the lending transactions.
Income earned on the securities loaned, if any, is reflected in the
Statement of Operations under the caption Income from securities
loaned-net.
10 Transactions with other funds managed by Neuberger Berman Management Inc.:
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Fund may invest in the Neuberger Berman Institutional Cash
Fund (the "Cash Fund"), a fund managed by Management and having the same
officers and Trustees as the Fund. The Cash Fund seeks to provide as high a
level of current income as is consistent with the preservation of capital
and the maintenance of liquidity. For any cash that the Fund invests in the
Cash Fund, Management waives a portion of its management fee equal to the
management fee it receives from the Cash Fund on those assets. For the year
ended December 31, 2003, such waived fees amounted to $5,024. For the year
ended December 31, 2003, income earned on this investment is reflected in
the Statement of Operations under the caption Income from investments in
affiliated issuers.
11 Other: All net investment income and realized and unrealized capital gains
and losses of the Fund are allocated, on the basis of relative net assets,
pro rata among its respective classes.
12
Notes to Financial Statements Guardian Portfolio cont'd
- -------------------------------------------------------
Note B--Management Fees, Administration Fees, Distribution Arrangements,
and Other Transactions With Affiliates: Fund shares are issued and redeemed
in connection with investments in and payments under certain variable
annuity contracts and variable life insurance policies issued through
separate accounts of life insurance companies and are also offered directly
to qualified pension and retirement plans.
The Fund retains Management as its investment manager under a Management
Agreement. For such investment management services, the Fund pays
Management a fee at the annual rate of 0.55% of the first $250 million of
the Fund's average daily net assets, 0.525% of the next $250 million, 0.50%
of the next $250 million, 0.475% of the next $250 million, 0.45% of the
next $500 million, 0.425% of the next $2.5 billion, and 0.40% of average
daily net assets in excess of $4 billion.
The Fund retains Management as its administrator under an Administration
Agreement ("Agreement"). Pursuant to this Agreement each class pays
Management an administration fee at the annual rate of 0.30% of its average
daily net assets. Additionally, Management retains State Street as its
sub-administrator under a Sub-Administration Agreement. Management pays
State Street a fee for all services received under the agreement.
The Trustees of the Trust adopted a non-fee distribution plan for the
Fund's Class I.
For the Fund's Class S, Management acts as agent in arranging for the sale
of class shares without commission and bears advertising and promotion
expenses. The Trustees of the Trust have adopted a distribution plan (the
"Plan") with respect to this class, pursuant to Rule 12b-1 under the 1940
Act. The Plan provides that, as compensation for administrative and other
services provided to this class, Management's activities and expenses
related to the sale and distribution of this class of shares, and ongoing
services provided to investors in this class, Management receives from this
class a fee at the annual rate of 0.25% of Class S's average daily net
assets. Management receives this amount to provide distribution and
shareholder servicing for this class and pays a portion of it to
institutions that provide such services. Those institutions may use the
payments for, among other purposes, compensating employees engaged in sales
and/or shareholder servicing. The amount of fees paid by this class during
any year may be more or less than the cost of distribution and other
services provided to this class. NASD rules limit the amount of annual
distribution fees that may be paid by a mutual fund and impose a ceiling on
the cumulative distribution fees paid. The Trust's Plan complies with those
rules.
Management has contractually undertaken through December 31, 2006 to
reimburse the Fund's Class I and Class S shares for their operating
expenses (excluding the fees payable to Management (including the fees
payable to Management with respect to the Fund's Class S shares), interest,
taxes, brokerage commissions, extraordinary expenses, and transaction
costs) ("Operating Expenses") which exceed, in the aggregate, 1.00% and
1.25%, respectively, per annum of their average daily net assets (the
"Expense Limitation"). For the year ended December 31, 2003, no
reimbursement to the Fund's Class I and Class S shares was required. The
Fund's Class I and Class S shares each have agreed to repay Management
through December 31, 2009 for their excess Operating Expenses previously
reimbursed by Management, so long as their annual Operating Expenses during
that period do not exceed their Expense Limitations, and the repayments are
made within three years
13
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
after the year in which Management issued the reimbursement. During the
year ended December 31, 2003, there was no reimbursement to Management
under the agreements. At December 31, 2003, the Fund's Class I and Class S
shares have no contingent liability to Management under the agreements.
On October 31, 2003, Management and Neuberger, a member firm of the New
York Stock Exchange and sub-adviser to the Fund, became indirect wholly
owned subsidiaries of Lehman Brothers Holdings Inc. ("Lehman"), a
publicly-owned holding company (the "Transaction"). Upon completion of the
Transaction, the Trust's management and sub-advisory agreements
automatically terminated. To provide for continuity of management, the
shareholders of the Fund voted on September 23, 2003, to approve new
management and sub-advisory agreements, which took effect upon closing of
the Transaction (see Report of Votes of Shareholders). Neuberger is
retained by Management to furnish it with investment recommendations and
research information without added cost to the Fund. Several individuals
who are officers and/or Trustees of the Trust are also employees of
Neuberger and/or Management.
On July 1, 2003, the Fund entered into a commission recapture program,
which enables it to pay some of its operational expenses by recouping a
portion of the commissions it pays to a broker this is not a related party
of the Fund. Expenses paid through this program may include costs of
custodial, transfer agency or accounting services. The impact of this
arrangement was a reduction of $5,437.
The Fund 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 $100.
Note C--Securities Transactions:
During the year ended December 31, 2003, there were purchase and sale
transactions (excluding short-term securities) of $84,704,787 and
$101,295,147, respectively.
During the year ended December 31, 2003, brokerage commissions on
securities transactions amounted to $262,897, of which Neuberger received
$149,821, Lehman received $4,586, and other brokers received $108,490.
Note D--Line of Credit:
At December 31, 2003, the Fund was a participant in a single committed,
unsecured $150,000,000 ($200,000,000 prior to September 26, 2003) line of
credit with State Street, to be used only for temporary or emergency
purposes. Interest is charged on borrowings under this agreement at the
overnight Federal Funds Rate plus 0.50% per annum. A facility fee of 0.10%
per annum of the available line of credit is charged, of which the Fund has
agreed to pay its pro rata share, based on the ratio of its individual net
assets to the net assets of all participants at the time the fee is due and
payable. The fee is paid quarterly in arrears. No compensating balance is
required. Other investment companies managed by Management also participate
in this line of credit on the same terms. Because several investment
companies participate, there is no assurance that the Fund will have access
to the entire $150,000,000 at any particular time. The Fund had no loans
outstanding pursuant to this line of credit at December 31, 2003, nor had
the Fund utilized this line of credit at any time prior to that date.
14
Financial Highlights Guardian Portfolio
The following tables include selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements.++
Year Ended December 31,
---------------------------------------------------------
Class I+
2003 2002 2001 2000 1999
Net Asset Value, Beginning of Year $ 10.70 $ 14.64 $ 15.93 $ 15.85 $ 13.84
-------- -------- -------- -------- --------
Income From Investment Operations
Net Investment Income (Loss) .03 .10 .11 .09 .09
Net Gains or Losses on Securities (both realized and unrealized) 3.36 (3.95) (.33) .08- 1.97
-------- -------- -------- --------- --------
Total From Investment Operations 3.39 (3.85) (.22) .17 2.06
-------- -------- -------- --------- --------
Less Distributions
From Net Investment Income ( .11) (.09) (.07) (.09) (.05)
From Net Capital Gains - - (1.00) - -
-------- -------- -------- --------- --------
Total Distributions ( .11) (.09) (1.07) (.09) (.05)
-------- -------- -------- --------- --------
Net Asset Value, End of Year $ 13.98 $ 10.70 $ 14.64 $ 15.93 $ 15.85
-------- -------- -------- --------- --------
Total Return++ +31.76% -26.45% -1.51% +1.13% +14.93%
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $ 169.2 $ 140.3 $ 190.8 $ 131.1 $ 121.1
Ratio of Gross Expenses to Average Net Assets# .97% .98% .99% 1.00% 1.00%
Ratio of Net Expenses to Average Net Assets[sec] .97% .98% .99% 1.00% 1.00%
Ratio of Net Investment Income (Loss) to Average Net Assets .25% .81% .74% .57% .61%
Portfolio Turnover Rate 58% 147% 79% 124% 107%
Period from
Year Ended August 2, 2002^
December 31, to December 31,
------------ ---------------
Class S 2003 2002
Net Asset Value, Beginning of Period $ 10.69 $ 11.23
------- -------
Income From Investment Operations
Net Investment Income (Loss) .00 .03
Net Gains or Losses on Securities (both realized and unrealized) 3.35 (.57)
------- ---------
Total From Investment Operations 3.35 (.54)
------- ---------
Less Distributions
From Net Investment Income (.02) -
-------- ---------
Net Asset Value, End of Period $ 14.02 $ 10.69
-------- ---------
Total Return++ +31.39% -4.81%**
Ratios/Supplemental Data
Net Assets, End of Period (in millions) $ 0.1 $ 0.1
Ratio of Gross Expenses to Average Net Assets# 1.22% 1.24%*
Ratio of Net Expenses to Average Net Assets[sec] 1.22% 1.24%*
Ratio of Net Investment Income (Loss) to Average Net Assets .02% .63%*
Portfolio Turnover Rate 58% 147%
See Notes to Financial Highlights 15
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Financial Highlights Guardian Portfolio
- ------------------------------------------------
+ The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's Class I proportionate share of AMT Guardian
Investment's income and expenses through April 30, 2000 under the prior
master/feeder fund structure.
++ 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 higher if Management had not recouped certain expenses. The total
return information shown does not reflect charges and other expenses that
apply to the separate account or the related insurance policies, and the
inclusion of these charges and other expenses would reduce the total return
for all fiscal periods shown.
# The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset and
commission recapture arrangements.
sec After reimbursement of expenses previously paid by Management. Had
Management not been reimbursed, the annualized ratios of net expenses to
average daily net assets would have been:
Year Ended December 31,
2001 2000 1999
Guardian Portfolio Class I .97% .99% .98%
After waiver of a portion of the investment management fee. Had Management
not undertaken such action the annualized ratio of net expenses to average
daily net assets would have been:
Year Ended
December 31, 2003
Guardian Portfolio Class I .98%
Guardian Portfolio Class S 1.22%
^ The date investment operations commenced.
++ The per share amounts which are shown have been computed based on the
average number of shares outstanding during each fiscal period.
* Annualized.
** Not annualized.
- - The amounts shown at this caption for a share outstanding may not accord
with the change in aggregate gains and losses in securities for the fiscal
period because of the timing of sales and repurchases of class shares in
relation to fluctuating market values for the Fund.
16
Report of Ernst & Young LLP, Independent Auditors
- -------------------------------------------------
To the Board of Trustees of
Neuberger Berman Advisers Management Trust and
Shareholders of Guardian Portfolio
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Guardian Portfolio, one of the series
constituting the Neuberger Berman Advisers Management Trust (the "Trust"), as
of December 31, 2003, 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 December 31, 2003, 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
Guardian Portfolio of Neuberger Berman Advisers Management Trust at December
31, 2003, 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 its
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
February 6, 2004
17
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Trustees and Officers (Unaudited)
- ---------------------------------
The following tables set forth information concerning the trustees and officers
of the Trust. All persons named as trustees and officers also serve in similar
capacities for other funds administered or managed by NB Management and
Neuberger Berman. The Statement of Additional Information includes additional
information about fund trustees and is available upon request, without charge,
by calling (800) 877-9700.
Information about the Board of Trustees
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Independent Trustees Position and Fund Complex
Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
John Cannon (73) Trustee since Consultant. Formerly, Chairman 37 Independent Trustee or Director of
2000 and Chief Investment Officer, three series of Oppenheimer Funds:
CDC Capital Management Limited Term New York Municipal
(registered investment adviser), Fund, Rochester Fund Municipals,
1993-January 1999; prior thereto, and Oppenheimer Convertible
President and Chief Executive Securities Fund since 1992.
Officer, AMA Investment
Advisors, an affiliate of the
American Medical Association.
- ------------------------------------------------------------------------------------------------------------------------------------
Faith Colish (68) Trustee since Counsel, Carter Ledyard & 37 Director, American Bar Retirement
1984 Milburn LLP (law firm) since Association (ABRA) since 1997
October 2002; Formerly, (not-for-profit membership
Attorney-at-Law and President, association).
Faith Colish, A Professional
Corporation, 1980 to 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Walter G. Ehlers (70) Trustee since Consultant; Retired President 37 None.
1989 and Trustee, Teachers Insurance
& Annuity (TIAA) and College
Retirement Equities Fund
(CREF).
- ------------------------------------------------------------------------------------------------------------------------------------
C. Anne Harvey (66) Trustee since Consultant, C. A. Harvey 37 Formerly, Member, Individual
1998 Associates, since June 2001; Investors Advisory Committee to the
Formerly, Director, AARP, 1978 New York Stock Exchange Board of
to December 2001. Directors, 1998 to June 2002;
President, Board of Associates to
The National Rehabilitation
Hospital's Board of Directors, 2002;
Member, American Savings
Education Council's Policy Board
(ASEC), 1998-2000; Member,
Executive Committee, Crime
Prevention Coalition of America,
1997-2000.
- ------------------------------------------------------------------------------------------------------------------------------------
18
Trustees and Officers (Unaudited) cont'd
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Independent Trustees Position and Fund Complex
Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Barry Hirsch (70) Trustee since Attorney-at-Law. Senior 37 None.
2000 Counsel, Loews Corporation
(diversified financial corporation)
May 2002 until April 2003; prior
thereto, Senior Vice President,
Secretary and General Counsel,
Loews Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
Robert A. Kavesh (76) Trustee since Marcus Nadler Professor of 37 Director, DEL Laboratories, Inc.
2000 Finance and Economics (cosmetics and pharmaceuticals)
Emeritus, New York University, since 1978; The Caring Community
Stern School of Business. ( not-for-profit).
- ------------------------------------------------------------------------------------------------------------------------------------
Howard A. Mileaf (67) Trustee since Retired. Formerly, Vice 37 Director, WHX Corporation
1999 President and Special Counsel, (holding company) since August
WHX Corporation (holding 2002; Director, WebFinancial
company), 1993-2001. Corporation (holding company)
since December 2002; Director, State
Theatre of New Jersey (not-for-
profit theater), since 2000; Formerly,
Director, Kevlin Corporation
(manufacturer of microwave and
other products).
- ------------------------------------------------------------------------------------------------------------------------------------
John P. Rosenthal (71) Trustee since Senior Vice President, Burnham 37 Director, 92nd Street Y (non-profit),
2000 Securities Inc. (a registered since 1967; Formerly, Director,
broker-dealer) since 1991. Cancer Treatment Holdings, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
William E. Rulon (71) Trustee since Retired. Senior Vice President, 37 Director, Pro-Kids Golf and
2000 Foodmaker, Inc. (operator and Learning Academy (teach golf and
franchiser of restaurants) until computer usage to "at risk" children),
January 1997. since 1998; Director, Prandium, Inc.
(restaurants) from March 2001 until
July 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Cornelius T. Ryan (72) Trustee since Founding General Partner, 37 Director, Capital Cash Management
2000 Oxford Partners and Oxford Trust (money market fund),
Bioscience Partners (venture Narragansett Insured Tax-Free
capital partnerships) and Income Fund, Rocky Mountain
President, Oxford Venture Equity Fund, Prime Cash Fund,
Corporation. several private companies and
QuadraMed Corporation (NASDAQ).
- ------------------------------------------------------------------------------------------------------------------------------------
19
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Independent Trustees Position and Fund Complex
Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Tom Decker Seip (53) Trustee since General Partner, Seip 37 Director, H&R Block, Inc. (financial
2000 Investments LP (a private services company) since May 2001;
investment partnership); Formerly, Director, General Magic
President and CEO, Westaff, (voice recognition software), 2001-
Inc. (temporary staffing), May 2002; Director, Forward
2001 to January 2002; Senior Management, Inc. (asset
Executive at the Charles management) since 2001; Formerly,
Schwab Corporation from 1983 Director, E-Finance Corporation
to 1999, including Chief (credit decisioning services), 1999-
Executive Officer, Charles 2003; Director, Save-Daily.com
Schwab Investment (micro investing services), 1999-
Management, Inc. and Trustee, 2003; Director, Offroad Capital Inc.
Schwab Family of Funds and (pre-public internet commerce
Schwab Investments from 1997 company).
to 1998 and Executive Vice
President-Retail Brokerage,
Charles Schwab Investment
Management from 1994 to
1997.
- ------------------------------------------------------------------------------------------------------------------------------------
Candace L. Straight (56) Trustee since Private investor and consultant 37 Director, Providence Washington
1999 specializing in the insurance (property and casualty insurance
industry; Formerly, Advisory company), since December 1998;
Director, Securitas Capital LLC Director, Summit Global Partners
(a global private equity (insurance brokerage firm) since
investment firm dedicated to October 2000.
making investments in the
insurance sector), 1998 until
December 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Peter P. Trapp (59) Trustee since Regional Manager for Atlanta 37 None.
1984 Region, Ford Motor Credit
Company since August 1997;
prior thereto, President, Ford
Life Insurance Company, April
1995 until August 1997.
- ------------------------------------------------------------------------------------------------------------------------------------
20
Trustees and Officers (Unaudited) cont'd
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Trustees who are Portfolios in
"Interested Persons" Position and Fund Complex
Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Edward I. O'Brien* (75) Trustee since Formerly, Member, Investment 37 Director, Legg Mason, Inc. (financial
2000 Policy Committee, Edward services holding company), since
Jones, 1993-2001; President, 1993; Director, Boston Financial
Securities Industry Association Group (real estate and tax shelters)
("SIA") (securities industry's 1993-1999.
representative in government
relations and regulatory matters
at the federal and state levels)
1974-1992; Adviser to SIA,
November 1992-November
1993.
- ------------------------------------------------------------------------------------------------------------------------------------
Jack L. Rivkin* (63) President and Executive Vice President, 37 Director, Dale Carnegie and
Trustee since Neuberger Berman Inc. Associates, Inc. (private company)
December (holding company) since 2002; since 1998; Director, Emagin Corp.
2002 Executive Vice President and (public company) since 1997;
Chief Investment Officer, Director, Solbright, Inc. (private
Neuberger Berman since 2002 company) since 1998; Director,
and 2003, respectively; Head of Infogate, Inc. (private company)
Research and Research Sales since 1997.
and Trading Departments of
Neuberger Berman since 2002;
Director and Chairman, NB
Management since December
2002; Formerly, Executive Vice
President, Citigroup
Investments, Inc. from
September 1995 to February
2002; Executive Vice President,
Citigroup Inc. from September
1995 to February 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
21
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Trustees who are Portfolios in
"Interested Persons" Position and Fund Complex
Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Peter E. Sundman* (44) Chairman of Executive Vice President, 37 Executive Vice President, Neuberger
the Board, Neuberger Berman since 1999; Berman Inc. (holding company)
Chief Formerly, Principal, Neuberger since 1999 and Formerly, Director
Executive Berman from 1997 until 1999; from October 1999 through March
Officer and Senior Vice President, NB 2003; President and Director, NB
Trustee since Management from 1996 until Management since 1999; Head of
2000; 1999. Neuberger Berman Inc.'s Mutual
President and Funds and Institutional Business
Chief since 1999; Director and Vice
Executive President, Neuberger & Berman
Officer from Agency, Inc. since 2000; Trustee,
1998 to 2000 Frost Valley YMCA.
- ------------------------------------------------------------------------------------------------------------------------------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the Trust's Trust Instrument, each Trustee shall hold office
for life or until his or her successor is elected or the Trust terminates;
except that (a) any Trustee may resign by delivering a written resignation;
(b) any Trustee may be removed with or without cause at any time by a
written instrument signed by at least two-thirds of the other Trustees; (c)
any Trustee who requests to be retired, or who has become unable to serve,
may be retired by a written instrument signed by a majority of the other
Trustees; and (d) any Trustee may be removed at any shareholder meeting by
a vote of at least two-thirds of the outstanding shares.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
* Indicates a Trustee who is an "interested person" within the meaning of the
1940 Act. Mr. Sundman and Mr. Rivkin are interested persons of the Trust by
virtue of the fact that they are officers and/or directors of NB Management
and Executive Vice Presidents of Neuberger Berman. Mr. O'Brien is an
interested person of the Trust by virtue of the fact that he is a director
of Legg Mason, Inc., a wholly owned subsidiary of which, from time to time,
serves as a broker or dealer to the Funds and other funds for which NB
Management serves as investment manager.
22
Trustees and Officers (Unaudited) cont'd
- ----------------------------------------
Information about the Officers of the Trust
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
- -------------------------------------------------------------------------------------------------------------------------
Claudia A. Brandon (47) Secretary since 1985 Vice President, Neuberger Berman since 2002 and
employee since 1999; Vice President-Mutual Fund Board
Relations, NB Management since 2000; Vice President,
NB Management from 1986 to 1999; Secretary,
ten registered investment companies for which
NB Management acts as investment manager and
administrator (four since 2002 and three since 2003).
Robert Conti (47) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President, Neuberger Berman from 1999 until 2003;
Senior Vice President, NB Management since 2000;
Controller, NB Management until 1996; Treasurer,
NB Management from 1996 until 1999; Vice President,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (three since 2000, four since 2002 and
three since 2003).
Brian P. Gaffney (50) Vice President since 2000 Managing Director, Neuberger Berman since 1999;
Senior Vice President, NB Management since 2000;
Vice President, NB Management from 1997 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Sheila R. James (38) Assistant Secretary since 2002 Employee, Neuberger Berman since 1999; Employee,
NB Management from 1991 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
Kevin Lyons (48) Assistant Secretary since Employee, Neuberger Berman since 1999; Employee,
March 2003 NB Management from 1993 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (since 2003).
John M. McGovern (33) Assistant Treasurer since 2002 Employee, NB Management since 1993; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
23
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
- -------------------------------------------------------------------------------------------------------------------------
Barbara Muinos (45) Treasurer and Principal Financial Vice President, Neuberger Berman since 1999; Assistant
and Accounting Officer since 2002; Vice President, NB Management from 1993 to 1999;
prior thereto, Assistant Treasurer Treasurer and Principal Financial and Accounting
since 1996 Officer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003);
Assistant Treasurer of three registered investment
companies for which NB Management acts as investment
manager and administrator from 1996 until 2002.
Frederic B. Soule (57) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President; Neuberger Berman from 1999 until 2003;
Vice President, NB Management from 1995 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Trani Jo Wyman (34) Assistant Treasurer since 2002 Employee, NB Management since 1991; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
- -------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the By-Laws of the Trust, each officer elected by the Trustees
shall hold office until his or her successor shall have been elected and
qualified or until his or her earlier death, inability to serve, or
resignation. Officers serve at the pleasure of the Trustees and may be
removed at any time with or without cause.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
24
Report of Votes of Shareholders (Unaudited)
- -------------------------------------------
A special meeting of shareholders of Neuberger Berman Advisers Management Trust
Guardian Portfolio (the "Fund") was held on September 23, 2003. Upon completion
of the acquisition of Neuberger Berman Inc. by Lehman Brothers Holdings Inc.
(the "Transaction"), the management agreement between the Trust, on behalf of
the Fund, and Neuberger Berman Management Inc. ("NB Management"), and the
sub-advisory agreement with respect to the Trust and each Fund, between NB
Management and Neuberger Berman, LLC automatically terminated. To provide for
continuity of management, the shareholders of the Fund voted on the following
matters, which became effective upon completion of the Transaction on October
31, 2003:
Proposal 1-To Approve a New Management Agreement between the Trust, on behalf
of the Fund, and NB Management
Votes For Votes Against Abstentions*
11,690,697.669 470,460.274 905,231.475
Proposal 2-To Approve a New Sub-Advisory Agreement with respect to the Trust
and each Fund, between NB Management and Neuberger Berman, LLC
Votes For Votes Against Abstentions*
11,654,451.253 472,079.347 939,858.818
* Abstentions were counted as shares that were present and entitled to vote
for purposes of determining a quorum and had a negative effect on the
proposals.
25
_____________________________________________________________________________
Annual Report
December 31, 2003
B1011 02/04
[Logo]
Neuberger Berman
Advisers
Management
Trust
Limited
Maturity
Bond
Portfolio[RegTM]
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Limited Maturity Bond Portfolio Managers' Commentary
We are pleased to report that the AMT Limited Maturity Bond Portfolio performed
well in 2003, outperforming its benchmark, the Merrill Lynch 1-3 Year Treasury
Index.(2) Sector allocation, security selection and duration management were
important factors in achieving these results.
At the start of 2003, the portfolio had a relatively conservative duration of
1.6 years, reflecting our recognition that low yields provided a thin cushion to
offset falling security prices if interest rates were to rise as the economy
recovered. As the economic outlook brightened, we began shortening duration and
by the end of June, duration had been reduced to 1.4 years, helping us preserve
capital in July, the worst month for bonds since December 1981. At the end of
2003, portfolio duration was 1.3 years, a reflection of the fact that we were
still concerned about interest rate risk and determined to try to preserve
shareholder capital if interest rates trend higher in the year ahead.
We made several advantageous sector allocation moves as well. Perhaps most
importantly, we increased our allocation to corporate credits from 41.9% of
portfolio assets at the start of the year to 50.1% at the end of March 2003, and
we maintained a weighting in the 47% to 50% range for the balance of the year.
With corporate bonds materially outperforming all other fixed income sectors in
2003, the portfolio was generously rewarded. Our securities selection in the
corporate sector also contributed to returns.
We dramatically reduced our allocation to government agency bonds from 27.6% at
the beginning of 2003 to 1.3% at the end of June. This was done for valuation
reasons (agencies' yields had come down to a level barely above Treasuries'
yields). However, our decision to get out of agencies proved lucky as well in
that we avoided the sharp sell-off sparked by negative headlines surrounding
earnings restatements and management changes at Freddie Mac and a call for more
thorough regulatory oversight at both Freddie Mac and Fannie Mae. Although we
think the controversy regarding these two powerful forces in the mortgage
markets is not necessarily a credit event, we believe agencies may remain under
pressure, and therefore, we continued to own a very small portion in the
portfolio at the end of the year.
Average Annual Total Return(1)
Merrill Lynch
Limited Maturity 1-3 Year
Bond Portfolio Treasury Index(2)
1 Year 2.42% 1.90%
5 Year 4.93% 5.37%
10 Year 5.05% 5.68%
Life of Fund 7.12% 7.46%
- ---------------------------------------------------------
Inception Date 9/10/1984
Comparison of a $10,000 Investment
Merrill Lynch
Limited Maturity 1-3 Year
Bond Portfolio Treasury Index
- -----------------------------------------------
12/31/1993 $ 10,000 $ 10,000
12/31/1994 $ 9,985 $ 10,057
12/31/1995 $ 11,076 $ 11,163
12/31/1996 $ 11,553 $ 11,719
12/31/1997 $ 12,332 $ 12,499
12/31/1998 $ 12,874 $ 13,373
12/31/1999 $ 13,064 $ 13,783
12/31/2000 $ 13,950 $ 14,885
12/31/2001 $ 15,175 $ 16,120
12/31/2002 $ 15,985 $ 17,048
12/31/2003 $ 16,373 $ 17,371
Value as of 12/31/03
Limited Maturity Bond Portfolio $ 16,373
Merrill Lynch 1-3 Year Treasury Index $ 17,371
This chart shows the value of a hypothetical $10,000 investment in the Fund over
the past 10 fiscal years, or since the Fund's inception, if it has not operated
for 10 years. The results are compared with benchmarks, which may include a
broad-based market index and or a narrower index. Please note that market
indexes do not include expenses. All results include the reinvestment of
dividends and capital gain distributions. Results represent past performance and
do not indicate future results.
2
In the mortgage sector we maintained a weighting in the high single-digit to low
double-digit range throughout the year. Our allocation to this sector was
tempered by the fast prepayment environment spawned by low mortgage rates.
Mortgage returns during fiscal 2003 were positive, but lagged other fixed income
sectors. However, with the refinancing boom ending, prepayment risk diminishing,
and yields well above Treasuries, the mortgage sector may be positioned to
deliver solid returns going forward.
Looking ahead, we remain cautious. Thus far, inflation remains dormant and the
Federal Reserve appears committed to keeping a lid on short-term interest rates
for the foreseeable future. However, a weakening dollar, an expanding budget
deficit, rising commodity prices, a strengthening global economy and a
relatively steep yield curve have put us on alert that this period of falling
interest rates may be over. If we feel prevailing economic trends justify a
reversal of the Fed's current accommodative monetary policy, we will further
reduce the portfolio's interest rate exposure so that we can quickly roll over
into higher yielding securities.
After recent years' exceptional performance, bond yields have come down
substantially and no longer look very exciting relative to the kind of returns
stock market investors enjoyed this year. Investors with short memories may
quickly forget what bonds did for them during the painful three-year bear market
in stocks. We think that is a big mistake. Bonds provide income and relative
safety of principal--two important functions in today's highly volatile
financial markets. As always, we remain focused on finding value in the fixed
income arena.
Sincerely,
/s/ Ted Giuliano
/s/ Catherine Waterworth
TED GIULIANO AND
CATHERINE WATERWORTH
PORTFOLIO CO-MANAGERS
1. 2.42%, 4.93% and 5.05% were the average annual total returns for the 1-, 5-
and 10-year periods ended December 31, 2003. Neuberger Berman Management Inc.
("NBMI") has agreed to absorb certain expenses of the AMT Portfolios. Without
this arrangement, which is subject to change, the total returns of the
Portfolios would be less. Total return includes reinvestment of dividends and
capital gain distributions. Performance data quoted represent past performance
and the investment return and principal value of an investment will fluctuate so
that the shares, when redeemed, may be worth more or less than original cost.
The performance information does not reflect fees and expenses of the insurance
companies.
2. The Merrill Lynch 1-3 Year U.S. 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 NBMI and include reinvestment of all dividends and capital gain
distributions. The Portfolio may invest in many securities not included in the
above-described index.
The composition, industries and holdings of the Portfolio are subject to change.
The investments for the Portfolio are managed by the same portfolio manager(s)
who manage one or more other mutual funds that have similar names, investment
objectives and investment styles as the Portfolio. You should be aware that the
Portfolio is likely to differ from the other mutual funds in size, cash flow
pattern and tax matters. Accordingly, the holdings and performance of the
Portfolio can be expected to vary from those of the other mutual funds.
Shares of the separate Portfolios of Neuberger Berman Advisers Management Trust
are sold only through the currently effective prospectus and are not available
to the general public. Shares of this Portfolio may be purchased only by life
insurance companies to be used in their separate accounts that fund variable
annuity and variable life insurance policies and by qualified pension and
retirement plans.
(C) 2004 Neuberger Berman Management Inc., distributor. All rights reserved.
3
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Schedule of Investments Limited Maturity Bond Portfolio
Principal Amount Rating[sec] Market Value+
Moody's S&P
U.S. Treasury Securities (37.9%)
$ 4,025,000 U.S. Treasury Bills, 0.93%, due 1/2/04 TSY TSY $ 4,024,897
13,000,000 U.S. Treasury Bills, 1.02%, due 2/19/04 TSY TSY 12,982,040
1,500,000 U.S. Treasury Bills, 1.02%, due 5/6/04 TSY TSY 1,494,671
30,010,000 U.S. Treasury Notes, 3.38%, due 4/30/04 TSY TSY 30,246,809
9,000,000 U.S. Treasury Notes, 3.25%, due 5/31/04 TSY TSY 9,082,620
1,815,000 U.S. Treasury Notes, 2.88%, due 6/30/04 TSY TSY 1,831,591
16,000,000 U.S. Treasury Notes, 2.13%, due 8/31/04 TSY TSY 16,109,376
3,145,000 U.S. Treasury Notes, 1.88%, due 9/30/04 TSY TSY 3,162,813
5,200,000 U.S. Treasury Notes, 2.13%, due 10/31/04 TSY TSY 5,240,420
30,900,000 U.S. Treasury Notes, 1.63%, due 3/31/05 TSY TSY 31,006,234
985,000 U.S. Treasury Notes, 1.88%, due 11/30/05 TSY TSY 986,847
------------
Total U.S. Treasury Securities (Cost $115,874,098) 116,168,318
------------
U.S. Government Agency Securities (1.4%)
4,000,000 Federal Home Loan Bank, Disc. Notes, 4.13%, due 1/14/05
(Cost $4,042,343) AGY AGY 4,113,196
------------
Mortgage-Backed Securities (9.5%)
Fannie Mae
1,654,573 Collateralized Mortgage Obligations Planned Amortization
Certificates, Ser. 2003-16, Class PA, 4.50%, due 11/25/09 AGY AGY 1,690,434
42,895 Pass-Through Certificates, 7.00%, due 5/1/04 AGY AGY 43,072
12,872,432 Pass-Through Certificates, 5.50%, due 9/1/17 AGY AGY 13,353,494
Freddie Mac
2,100,000 Collateralized Mortgage Obligations Planned Amortization
Certificates, Ser. 2592, Class PA, 4.50%, due 12/15/07 AGY AGY 2,123,732
13,137 Mortgage Participation Certificates, 10.00%, due 4/1/20 AGY AGY 14,658
969,480 Pass-Through Certificates, 5.00%, due 2/1/07 AGY AGY 999,184
Government National Mortgage Association
10,500,000 Pass-Through Certificates, 6.00%, due 1/15/33 AGY AGY 10,921,969
------------
Total Mortgage-Backed Securities (Cost $29,093,136) 29,146,543
------------
Corporate Debt Securities (49.6%)
1,650,000 Abitibi-Consolidated, Inc., Bonds, 8.30%, due 8/1/05 Ba1 BB+ 1,745,933
1,040,000 Allied Waste North America, Inc., Guaranteed Senior Notes, Ser. B,
7.63%, due 1/1/06 Ba3 BB- 1,094,600
3,000,000 Allstate Corp., Senior Notes, 7.88%, due 5/1/05 A1 A+ 3,236,463
975,000 American General Finance Corp., Floating Rate Notes, Ser. G,
1.55%, due 12/17/04 A1 A+ 978,228
1,765,000 AT&T Wireless Services, Inc., Senior Notes, 7.35%, due 3/1/06 Baa2 BBB 1,930,077
3,500,000 Bank One Corp., Notes, 6.50%, due 2/1/06 Aa3 A 3,799,201
1,500,000 Bausch & Lomb, Inc., Notes, 6.75%, due 12/15/04 Ba1 BBB- 1,554,375
2,650,000 Bear Stearns Co., Inc., Notes, 6.50%, due 5/1/06 A1 A 2,888,574
2,025,000 Beneficial Corp., Medium-Term Notes, Ser. I, 6.25%, due 1/14/05 A1 A 2,098,157
3,800,000 Boeing Capital Corp., Senior Notes, 5.65%, due 5/15/06 A3 A 4,057,047
2,700,000 Bombardier Capital, Inc., Notes, 7.50%, due 8/15/04 Baa3 BBB- 2,797,875**
1,100,000 Brascan Corp., Notes, 8.13%, due 12/15/08 Baa3 A- 1,286,815
3,300,000 British Telecom PLC, Notes, 7.63%, due 12/15/05 Baa1 A- 3,636,643
1,000,000 Caterpillar Financial Services Corp., Floating Rate Notes, 1.33%,
due 2/4/04 A2 A 1,000,141
2,200,000 Caterpillar Financial Services Corp., Notes, 6.88%, due 8/1/04 A2 A 2,268,926
2,100,000 Caterpillar Financial Services Corp., Notes, 1.21%, due 11/14/05 A2 A 2,099,129
1,700,000 CBS Corp., Guaranteed Senior Notes, 7.15%, due 5/20/05 A3 A- 1,821,689
1,285,000 Chase Manhattan Corp., Subordinated Notes, 7.25%, due 6/1/07 A2 A 1,457,387
700,000 Citizens Communications Co., Notes, 8.50%, due 5/15/06 Baa2 BBB 764,302
See Notes to Schedule of Investments 4
Schedule of Investments Limited Maturity Bond Portfolio cont'd
Principal Amount Rating[sec] Market Value+
Moody's S&P
$ 970,000 Citizens Communications Co., Debentures, 7.60%, due 6/1/06 Baa2 BBB $1,054,981
1,900,000 Comcast Cable Communications, Senior Notes, 6.38%,
due 1/30/06 Baa3 BBB 2,045,441
1,550,000 Cox Communications, Inc., Notes, 7.75%, due 8/15/06 Baa2 BBB 1,738,562
2,800,000 Daimler Chrysler N.A. Holdings Corp., Guaranteed Notes, 6.40%,
due 5/15/06 A3 BBB 2,999,940
550,000 Delhaize America, Inc., Guaranteed Notes, 7.38%, due 4/15/06 Ba1 BB+ 591,250
1,300,000 EOP Operating Limited Partnership, Notes, 6.50%, due 1/15/04 Baa1 BBB+ 1,301,586
1,010,000 EOP Operating Limited Partnership, Notes, 6.63%, due 2/15/05 Baa1 BBB+ 1,061,127
1,300,000 Equitable Life Assurance Society USA, Notes, 6.95%, due 12/1/05 A2 A 1,412,473**
1,550,000 Everest Reinsurance Holdings, Inc., Senior Notes, 8.50%,
due 3/15/05 A3 A- 1,662,110
500,000 Gap, Inc., Notes, 9.90%, due 12/15/05 Ba3 BB+ 564,375
2,000,000 General Electric Capital Corp., Medium-Term Notes, Ser. A, 4.25%,
due 1/28/05 Aaa AAA 2,056,262
5,000,000 General Motors Acceptance Corp., Notes, 6.85%, due 6/17/04 A3 BBB 5,117,785
700,000 General Motors Acceptance Corp., Notes, 6.13%, due 9/15/06 A3 BBB 749,175
710,000 General Motors Acceptance Corp., Notes, 6.13%, due 2/1/07 A3 BBB 763,546
1,250,000 Great Lakes Power, Inc., Notes, 8.30%, due 3/1/05 Baa3 BBB- 1,343,750
1,110,000 Hartford Life, Inc., Notes, 6.90%, due 6/15/04 A3 A- 1,135,922
2,500,000 HCA, Inc., Notes, 5.25%, due 11/6/08 Ba1 BBB- 2,547,845
2,500,000 Heller Financial, Inc., Notes, 6.00%, due 3/19/04 Aaa AAA 2,524,438
1,600,000 Hertz Corp., Senior Notes, 8.25%, due 6/1/05 Baa2 1,705,382
3,200,000 International Lease Finance Corp., Medium-Term Notes, Ser. M,
5.50%, due 6/7/04 A1 AA- 3,253,078
1,575,000 International Lease Finance Corp., Floating Rate Notes, 2.39%,
due 1/13/05 A1 AA- 1,594,258
1,750,000 International Paper Co., Notes, 8.13%, due 7/8/05 Baa2 BBB 1,906,361
1,700,000 ITT Corp., Notes, 6.75%, due 11/15/05 Ba1 BB+ 1,785,000
1,500,000 J.P. Morgan Chase & Co., Senior Notes, 5.63%, due 8/15/06 A1 A+ 1,612,352
4,800,000 John Deere Capital Corp., Floating Rate Senior Notes, 1.47%,
due 5/20/05 A3 A- 4,803,490
720,000 Jones Intercable, Inc., Senior Notes, 8.88%, due 4/1/07 Baa3 BBB 746,400
1,850,000 Lear Corp., Guaranteed Senior Notes, Ser. B, 7.96%, due 5/15/05 Ba1 BBB- 1,979,500
1,550,000 Mallinckrodt, Inc., Notes, 6.50%, due 11/15/07 Ba3 BBB- 1,639,125
1,100,000 Merrill Lynch & Co., Inc., Floating Rate Medium-Term Notes, Ser. B,
1.41%, due 2/3/05 Aa3 A+ 1,102,368
420,000 Methanex Corp., Notes, 7.75%, due 8/15/05 Ba1 BBB- 443,100
1,500,000 MetLife, Inc., Debentures, 3.91%, due 5/15/05 A2 A 1,542,576
3,850,000 Morgan Stanley Dean Witter & Co., Notes, 5.63%, due 1/20/04 Aa3 A+ 3,856,699
650,000 National Rural Utilities Cooperative Finance Corp., Collateral Trust,
5.25%, due 7/15/04 A1 A+ 663,582
1,600,000 National Rural Utilities Cooperative Finance Corp., Collateral Trust,
6.00%, due 5/15/06 A1 A+ 1,725,469
3,100,000 Nationwide Mutual Insurance Co., Notes, 6.50%, due 2/15/04 A2 A- 3,118,119**
3,800,000 Pacific Bell, Notes, 6.25%, due 3/1/05 A1 A+ 3,991,512
100,100 PDVSA Finance Ltd., Notes, 8.75%, due 2/15/04 Caa1 B+ 100,851
1,600,000 Pemex Project Funding Master Trust, Guaranteed Notes, 9.13%,
due 10/13/10 Baa1 BBB- 1,900,000
890,000 Phelps Dodge Corp., Notes, 6.38%, due 11/1/04 Baa3 BBB- 911,295
1,000,000 Pioneer National Resources, Senior Notes, 8.25%, due 8/15/07 Ba1 BB+ 1,155,014
3,200,000 PNC Funding Corp., Guaranteed Notes, 7.00%, due 9/1/04 A2 A- 3,322,362
1,500,000 Powergen US Funding LLC, Notes, 4.50%, due 10/15/04 A3 BBB+ 1,527,257
705,000 Quest Diagnostics, Inc., Senior Notes, 6.75%, due 7/12/06 Baa3 BBB 770,452
1,575,000 Raytheon Co., Notes, 1.64%, due 6/10/05 Baa3 BBB- 1,574,580
2,200,000 Raytheon Co., Notes, 6.50%, due 7/15/05 Baa3 BBB- 2,344,487
1,600,000 Reliant Energy Resources Corp., Notes, Ser. B, 8.13%, due 7/15/05 Ba1 BBB 1,708,859
See Notes to Schedule of Investments 5
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Schedule of Investments Limited Maturity Bond Portfolio cont'd
Principal Amount Rating[sec] Market Value+
Moody's S&P
$ 1,500,000 Royal Caribbean Cruises Ltd., Senior Notes, 8.13%, due 7/28/04 Ba2 BB+ $ 1,548,750
1,230,000 Safeway, Inc., Notes, 2.50%, due 11/1/05 Baa2 BBB 1,218,089
1,800,000 Sara Lee Corp., Medium-Term Notes, Ser. B, 6.40%, due 6/9/05 A3 A+ 1,912,928
1,500,000 Sprint Capital Corp., Guaranteed Notes, 7.90%, due 3/15/05 Baa3 BBB- 1,597,902
3,110,000 Time Warner, Inc., Notes, 5.63%, due 5/1/05 Baa1 BBB+ 3,255,526
1,770,000 Time Warner, Inc., Notes, 7.75%, due 6/15/05 Baa1 BBB+ 1,909,903
1,550,000 Tyco International Group S.A., Guaranteed Notes, 5.88%,
due 11/1/04 Ba2 BBB- 1,592,625
3,150,000 Tyco International Group S.A., Guaranteed Notes, 6.38%,
due 6/15/05 Ba2 BBB- 3,315,375
2,000,000 Tyson Foods, Inc., Notes, 6.63%, due 10/1/04 Baa3 BBB 2,055,080
1,875,000 Walt Disney Co., Notes, 4.88%, due 7/2/04 Baa1 BBB+ 1,907,524
3,100,000 Washington Mutual, Inc., Senior Notes, 5.63%, due 1/15/07 A3 BBB+ 3,341,068
1,600,000 Wells Fargo & Co., Notes, 6.63%, due 7/15/04 Aa1 AA- 1,644,093
2,700,000 Weyerhaeuser Co., Notes, 5.50%, due 3/15/05 Baa2 BBB 2,810,851
------------
Total Corporate Debt Securities (Cost $148,791,824) 152,079,372
------------
Repurchase Agreements (0.6%)
1,880,000 State Street Bank and Trust Co. Repurchase Agreement, 0.78%, due
1/2/04, dated 12/31/03, Maturity Value $1,880,081, Collateralized
by $1,945,000 U.S. Treasury Notes, 1.25%, due 5/31/05
(Collateral Value $1,940,676)
(Cost $1,880,000) 1,880,000#
------------
Total Investments (99.0%) (Cost $299,681,401) 303,387,429##
Cash, receivables and other assets, less liabilities (1.0%) 2,975,644
------------
Total Net Assets (100.0%) $306,363,073
------------
See Notes to Schedule of Investments 6
Notes to Schedule of Investments Limited Maturity Bond Portfolio
+ Investment securities of the Fund are valued daily by obtaining bid price
quotations from independent pricing services on all 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 Board of
Trustees of Neuberger Berman Advisers Management Trust believes accurately
reflects fair value. Numerous factors may be considered when determining
the fair value of a security, including available analyst, media or other
reports, trading in futures or ADRs and whether the issuer of the security
being fair valued has other securities outstanding. 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.
# At cost, which approximates market value.
## At December 31, 2003, the cost of investments for U.S. Federal income tax
purposes was $302,334,126. Gross unrealized appreciation of investments was
$2,338,510 and gross unrealized depreciation of investments was $1,285,207
resulting in net unrealized appreciation of $1,053,303, based on cost for
U.S. Federal income tax purposes.
[sec] Credit ratings are unaudited.
** 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 December 31, 2003,
these securities amounted to $7,328,467 or 2.4% of net assets.
See Notes to Financial Statements 7
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Assets and Liabilities
Limited Maturity
Bond
Neuberger Berman Advisers Management Trust Portfolio
Assets
Investments in securities, at market value* (Note A)-see Schedule of Investments $ 303,387,429
======================================================================================================
Cash 9,299
- ------------------------------------------------------------------------------------------------------
Interest receivable 2,918,357
======================================================================================================
Receivable for Fund shares sold 629,373
- ------------------------------------------------------------------------------------------------------
Prepaid expenses and other assets 1,898
======================================================================================================
Total Assets 306,946,356
======================================================================================================
Liabilities
Payable for Fund shares redeemed 249,318
======================================================================================================
Payable to investment manager (Note B) 63,182
- ------------------------------------------------------------------------------------------------------
Payable to administrator (Note B) 101,090
======================================================================================================
Accrued expenses and other payables 169,693
======================================================================================================
Total Liabilities 583,283
======================================================================================================
Net Assets at value $ 306,363,073
======================================================================================================
Net Assets consist of:
Paid-in capital $ 306,659,152
======================================================================================================
Undistributed (distributions in excess of) net investment income 9,173,333
- ------------------------------------------------------------------------------------------------------
Accumulated net realized gains (losses) on investments (13,175,440)
======================================================================================================
Net unrealized appreciation (depreciation) in value of investments 3,706,028
======================================================================================================
Net Assets at value $ 306,363,073
======================================================================================================
Shares Outstanding ($.001 par value; unlimited shares authorized) 23,209,051
======================================================================================================
Net Asset Value, offering and redemption price per share $ 13.20
======================================================================================================
*Cost of Investments $ 299,681,401
======================================================================================================
See Notes to Financial Statements 8
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST FOR THE YEAR ENDED DECEMBER 31, 2003
Statement of Operations
Limited Maturity
Bond
Neuberger Berman Advisers Management Trust Portfolio
Investment Income
Interest income (Note A) $ 11,362,888
====================================================================================
Expenses:
Investment management fee (Note B) 819,458
====================================================================================
Administration fee (Note B) 1,311,132
- ------------------------------------------------------------------------------------
Audit fees 20,287
====================================================================================
Custodian fees (Note B) 142,714
- ------------------------------------------------------------------------------------
Insurance expense 6,842
====================================================================================
Legal fees 39,866
- ------------------------------------------------------------------------------------
Shareholder reports 43,345
====================================================================================
Trustees' fees and expenses 29,269
- ------------------------------------------------------------------------------------
Miscellaneous 11,577
====================================================================================
Total expenses 2,424,490
Expenses reduced by custodian fee expense offset arrangement (Note B) (948)
====================================================================================
Total net expenses 2,423,542
====================================================================================
Net investment income (loss) 8,939,346
====================================================================================
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investment securities sold 3,117,677
====================================================================================
Net realized gain (loss) on financial futures contracts (Note A) (49,141)
====================================================================================
Change in net unrealized appreciation (depreciation) in value of:
Investment securities (Note A) (3,818,388)
====================================================================================
Net gain (loss) on investments (749,852)
====================================================================================
Net increase (decrease) in net assets resulting from operations $ 8,189,494
====================================================================================
See Notes to Financial Statements 9
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Changes in Net Assets
Limited Maturity Bond Portfolio
----------------------------------
Neuberger Berman Advisers Management Trust Year Ended December 31,
2003 2002
Increase (Decrease) in Net Assets:
From Operations:
Net investment income (loss) $ 8,939,346 $ 13,073,399
=====================================================================================================================
Net realized gain (loss) on investments 3,068,536 1,830,703
- ---------------------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of investments (3,818,388) 2,067,648
=====================================================================================================================
Net increase (decrease) in net assets resulting from operations 8,189,494 16,971,750
=====================================================================================================================
Distributions to Shareholders From:
Net investment income (14,350,033) (14,469,639)
=====================================================================================================================
From Fund Share Transactions:
Proceeds from shares sold 130,774,861 272,393,553
=====================================================================================================================
Proceeds from reinvestment of dividends and distributions 14,350,033 14,469,639
- ---------------------------------------------------------------------------------------------------------------------
Payments for shares redeemed (205,217,357) (209,575,341)
=====================================================================================================================
Net increase (decrease) from Fund share transactions (60,092,463) 77,287,851
=====================================================================================================================
Net Increase (Decrease) in Net Assets (66,253,002) 79,789,962
Net Assets:
Beginning of year 372,616,075 292,826,113
=====================================================================================================================
End of year $ 306,363,073 $ 372,616,075
=====================================================================================================================
Undistributed (distributions in excess of) net investment income at end of year $ 9,173,333 $ 13,375,390
=====================================================================================================================
Number of Fund Shares:
Sold 9,615,524 20,590,727
=====================================================================================================================
Issued on reinvestment of dividends and distributions 1,092,088 1,119,075
- ---------------------------------------------------------------------------------------------------------------------
Redeemed (15,104,458) (15,847,615)
=====================================================================================================================
Net increase (decrease) in shares outstanding (4,396,846) 5,862,187
=====================================================================================================================
See Notes to Financial Statements 10
Notes to Financial Statements Limited Maturity Bond Portfolio
Note A--Summary of Significant Accounting Policies:
1 General: Limited Maturity Bond Portfolio (the "Fund") is a separate operating
series of Neuberger Berman Advisers Management Trust (the "Trust"), a Delaware
statutory trust organized pursuant to a Trust Instrument dated May 23, 1994. The
Trust is currently comprised of ten separate operating series (each a "Series, "
collectively, the "Funds") each of which (except Focus Portfolio) is
diversified. The Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended, and its shares are
registered under the Securities Act of 1933, as amended. The Fund currently
offers only Class I shares. The Trustees of the Trust may establish additional
series or classes of shares without the approval of shareholders.
The assets of each Series of the Trust belong only to that Series, and the
liabilities of each Series are borne solely by that Series and no other.
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States requires Neuberger Berman Management
Inc. ("Management") to make estimates and assumptions at the date of the
financial statements. Actual results could differ from those estimates.
2 Portfolio valuation: Investment securities are valued as indicated in the
notes following the Schedule of Investments.
3 Foreign currency translation: The accounting records of the Fund 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. Net unrealized foreign currency gain (loss) arises from changes in
the value of assets and liabilities, other than investments in securities, as a
result of changes in exchange rates and are stated separately in the Statement
of Operations.
4 Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Interest income, including accretion of original
issue discount, where applicable, and accretion of market discount on long-term
bonds and short-term investments, 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 and stated separately in the
Statement of Operations.
5 Forward foreign currency contracts: The Fund 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 Fund. The Fund has no
specific limitation on the percentage of assets which may be committed to these
types of contracts but the Fund may not invest more than 25% of its total assets
in foreign securities denominated in or indexed to
11
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
foreign currencies. The Fund could be exposed to risks if a counter party to a
contract were unable to meet the terms of its contract or if the value of the
foreign currency changes unfavorably. The U.S. dollar value of foreign currency
underlying all contractual commitments held by the Fund is determined using
forward foreign currency exchange rates supplied by an independent pricing
service.
6 Financial futures contracts: The Fund 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 Fund 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 Fund 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 Fund 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
Fund may cause the Fund 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 Fund. Also, the Fund's
losses on transactions involving futures contracts may be deferred rather than
being taken into account currently in calculating the Fund's taxable income.
During the year ended December 31, 2003, the Fund entered into various financial
futures contracts. At December 31, 2003, there were no open positions.
7 Federal income taxes: The Funds are treated as separate entities 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.
8 Dividends and distributions to shareholders: The Fund earns income, net of
expenses, daily on its investments. Income dividends and distributions from net
realized capital gains, if any, generally are distributed in October. Income
dividends and capital gain distributions to shareholders are recorded on the
ex-dividend date. To the extent the Fund's net realized capital gains, if any,
can be offset by capital loss carryforwards
12
Notes to Financial Statements Limited Maturity Bond Portfolio cont'd
($21,426, $2,478,607, $3,975,890 and $6,386,624 expiring in 2005, 2006, 2007 and
2008, respectively, determined as of December 31, 2003), it is the policy of the
Fund not to distribute such gains.
Under current tax law, certain capital and net foreign currency losses realized
after October 31 within the taxable year may be deferred and treated as
occurring on the first day of the following tax year. For the year ended
December 31, 2003, the Fund elected to defer $286,603 of net capital and
currency losses arising between November 1, 2003 and December 31, 2003.
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 tax 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 in the components of net assets on the Statement of Assets and
Liabilities.
The tax character of distributions paid during the years ended December 31, 2003
and 2002 were as follows:
Distributions Paid From:
Ordinary Income Total
2003 2002 2003 2002
$14,350,033 $14,469,639 $14,350,033 $14,469,639
As of December 31, 2003, the components of distributable earnings (accumulated
losses) on a U.S. Federal income tax basis were as follows:
Unrealized Loss
Undistributed Appreciation Carryforwards
Ordinary Income (Depreciation) and Deferrals Total
$11,799,768 $1,053,303 $(13,149,150) $296,079
The difference between book basis and tax basis is attributable primarily to the
tax deferral of losses on wash sales, foreign bond bifurcation, amortization of
bond premium, and post October losses.
9 Foreign taxes: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
10 Expense allocation: Expenses directly attributable to a Series are charged to
that Series. Expenses of the Trust that are not directly attributed to a Series
are allocated among the Funds, on the basis of relative net assets, except where
a more appropriate allocation of expenses to each of the Funds can otherwise be
made fairly. Expenses borne by the complex of related investment companies,
which includes open-end and closed-end investment companies for which Management
serves as investment adviser, that are not directly attributed to a Series or
the Trust, are allocated among the Funds and the other investment companies in
the complex or series thereof, on the basis of relative net assets, except where
a more appropriate allocation of expenses to each investment company in the
complex or series thereof can otherwise be made fairly.
13
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
11 Repurchase agreements: The Fund may enter into repurchase agreements with
institutions that the Fund's investment manager has determined are creditworthy.
Each repurchase agreement is recorded at cost. The Fund requires that the
securities purchased in a repurchase transaction be transferred to the custodian
in a manner sufficient to enable the Fund to obtain those securities in the
event of a default under the repurchase agreement. The Fund 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 Fund under each
such repurchase agreement.
Note B--Management Fees, Administration Fees, Distribution Arrangements, and
Other Transactions With Affiliates:
Fund shares are issued and redeemed in connection with investments in and
payments under certain variable annuity contracts and variable life insurance
policies issued through separate accounts of life insurance companies and are
also offered directly to qualified pension and retirement plans.
The Fund retains Management as its investment manager under a Management
Agreement. For such investment management services, the Fund pays Management a
fee at the annual rate of 0.25% of the first $500 million of the Fund'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.
The Fund retains 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 0.40% of the Fund's average daily net
assets. Additionally, Management retains State Street Bank and Trust Company
("State Street") as its sub-administrator under a Sub-Administration Agreement.
Management pays State Street a fee for all services received under the
agreement.
The Trustees of the Trust adopted a non-fee distribution plan for the Fund.
Management has contractually undertaken through December 31, 2006 to reimburse
the Fund for its operating expenses (excluding the fees payable to Management,
interest, taxes, brokerage commissions, extraordinary expenses, and transaction
costs) ("Operating Expenses") which exceed, in the aggregate, 1.00% per annum of
the Fund's average daily net assets (the "Expense Limitation"). For the year
ended December 31, 2003, no reimbursement to the Fund was required. The Fund has
agreed to repay Management through December 31, 2009 for its excess Operating
Expenses previously reimbursed by Management, so long as its annual Operating
Expenses during that period do not exceed its Expense Limitation, and the
repayment is made within three years after the year in which Management issued
the reimbursement. During the year ended December 31, 2003, there was no
reimbursement to Management under this agreement. At December 31, 2003, the Fund
has no contingent liability to Management under this agreement.
On October 31, 2003, Management and Neuberger Berman, LLC ("Neuberger"), a
member firm of the New York Stock Exchange and sub-adviser to the Fund, became
indirect wholly owned subsidiaries of Lehman Brothers Holdings Inc., a
publicly-owned holding company (the "Transaction"). Upon
14
Notes to Financial Statements Limited Maturity Bond Portfolio cont'd
completion of the Transaction, the Trust's management and sub-advisory
agreements automatically terminated. To provide for continuity of management,
the shareholders of the Fund voted on September 23, 2003, to approve new
management and sub-advisory agreements, which took effect upon closing of the
Transaction (see Report of Votes of Shareholders). Neuberger is retained by
Management to furnish it with investment recommendations and research
information without added cost to the Fund. Several individuals who are officers
and/or Trustees of the Trust are also employees of Neuberger and/or Management.
The Fund 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 $948.
Note C--Securities Transactions:
Cost of purchases and proceeds of sales and maturities of long-term securities
(excluding financial futures contracts) for the year ended December 31, 2003
were as follows:
Sales and
Purchases of Purchases excluding Sales and Maturities Maturities excluding
U.S. Government U.S. Government of U.S. Government U.S. Government
and Agency Obligations and Agency Obligations and Agency Obligations and Agency Obligations
- ------------------------ ------------------------ ------------------------ -----------------------
$179,216,890 $80,329,545 $236,160,673 $102,376,428
Note D--Line of Credit:
At December 31, 2003, the Fund was a participant in a single committed,
unsecured $150,000,000 ($200,000,000 prior to September 26, 2003) line of credit
with State Street, to be used only for temporary or emergency purposes. Interest
is charged on borrowings under this agreement at the overnight Federal Funds
Rate plus 0.50% per annum. A facility fee of 0.10% per annum of the available
line of credit is charged, of which the Fund has agreed to pay its pro rata
share, based on the ratio of its individual net assets to the net assets of all
participants at the time the fee is due and payable. The fee is paid quarterly
in arrears. No compensating balance is required. Other investment companies
managed by Management also participate in this line of credit on the same terms.
Because several investment companies participate, there is no assurance that the
Fund will have access to the entire $150,000,000 at any particular time. The
Fund had no loans outstanding pursuant to this line of credit at December 31,
2003, nor had the Fund utilized this line of credit at any time prior to that
date.
15
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Financial Highlights Limited Maturity Bond Portfolio+
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements.++
Year Ended December 31,
---------------------------------------------------------
2003 2002 2001 2000 1999
Net Asset Value, Beginning of Year $13.50 $13.47 $13.19 $13.24 $13.82
------ ------ ------ ------ ------
Income From Investment Operations
Net Investment Income (Loss) .37 .53 .74* .77 .77
Net Gains or Losses on Securities (both realized and unrealized) (.05) .16 .37* .07 (.58)
------ ------ ------ ------ ------
Total From Investment Operations .32 .69 1.11 .84 .19
------ ------ ------ ------ ------
Less Distributions
From Net Investment Income (.62) (.66) (.83) (.89) (.77)
------ ------ ------ ------ ------
Net Asset Value, End of Year $13.20 $13.50 $13.47 $13.19 $13.24
------ ------ ------ ------ ------
Total Return++ +2.42% +5.34% +8.78% +6.78% +1.48%
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $306.4 $372.6 $292.8 $214.4 $248.4
Ratio of Gross Expenses to Average Net Assets# .74% .76% .73% .76% .76%
Ratio of Net Expenses to Average Net Assets .74% .76% .73% .76% .76%
Ratio of Net Investment Income (Loss) to
Average Net Assets 2.73% 4.01% 5.63%* 5.93% 5.81%
Portfolio Turnover Rate 84% 120% 89% 109% 139%
See Notes to Financial Highlights 16
Notes to Financial Highlights Limited Maturity Bond Portfolio
+ The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of AMT Limited Maturity
Bond Investment's income and expenses through April 30, 2000 under the
prior master/feeder fund structure.
++ 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. The total return
information shown does not reflect charges and other expenses that apply to
the separate account or the related insurance policies, and the inclusion
of these charges and other expenses would reduce the total return for all
fiscal periods shown.
# The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset
arrangements.
++ The per share amounts which are shown have been computed based on the
average number of shares outstanding during each fiscal period.
* For fiscal years ended after December 31, 2000, funds are required by the
American Institute of Certified Public Accountants to amortize premiums and
discounts on fixed income securities. Accordingly, for the year ended
December 31, 2001, the per share amounts and ratios shown decreased or
increased as follows:
Year Ended
December 31, 2001
Net Investment Income (.02)
Net Gains or Losses on Securities .02
Ratio of Net Investment Income to Average Net Assets (.11%)
17
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Report of Ernst & Young LLP, Independent Auditors
To the Board of Trustees of
Neuberger Berman Advisers Management Trust and
Shareholders of Limited Maturity Bond Portfolio
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Limited Maturity Bond Portfolio, one of the
series constituting the Neuberger Berman Advisers Management Trust (the
"Trust"), as of December 31, 2003, 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 December 31, 2003, by correspondence with
the custodian. 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
Limited Maturity Bond Portfolio of Neuberger Berman Advisers Management Trust at
December 31, 2003, 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 its 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
February 6, 2004
18
Trustees and Officers (Unaudited)
The following tables set forth information concerning the trustees and officers
of the Trust. All persons named as trustees and officers also serve in similar
capacities for other funds administered or managed by NB Management and
Neuberger Berman. The Statement of Additional Information includes additional
information about fund trustees and is available upon request, without charge,
by calling (800) 877-9700.
Information about the Board of Trustees
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
John Cannon (73) Trustee since Consultant. Formerly, Chairman 37 Independent Trustee or Director of
2000 and Chief Investment Officer, three series of Oppenheimer Funds:
CDC Capital Management Limited Term New York Municipal
(registered investment adviser), Fund, Rochester Fund Municipals,
1993-January 1999; prior thereto, and Oppenheimer Convertible
President and Chief Executive Securities Fund since 1992.
Officer, AMA Investment
Advisors, an affiliate of the
American Medical Association.
Faith Colish (68) Trustee since Counsel, Carter Ledyard & 37 Director, American Bar Retirement
1984 Milburn LLP (law firm) since Association (ABRA) since 1997
October 2002; Formerly, (not-for-profit membership
Attorney-at-Law and President, association).
Faith Colish, A Professional
Corporation, 1980 to 2002.
Walter G. Ehlers (70) Trustee since Consultant; Retired President 37 None.
1989 and Trustee, Teachers Insurance
& Annuity (TIAA) and College
Retirement Equities Fund
(CREF).
C. Anne Harvey (66) Trustee since Consultant, C. A. Harvey 37 Formerly, Member, Individual
1998 Associates, since June 2001; Investors Advisory Committee to the
Formerly, Director, AARP, 1978 New York Stock Exchange Board of
to December 2001. Directors, 1998 to June 2002;
President, Board of Associates to
The National Rehabilitation
Hospital's Board of Directors, 2002;
Member, American Savings
Education Council's Policy Board
(ASEC), 1998-2000; Member,
Executive Committee, Crime
Prevention Coalition of America,
1997-2000.
19
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Barry Hirsch (70) Trustee since Attorney-at-Law. Senior 37 None.
2000 Counsel, Loews Corporation
(diversified financial corporation)
May 2002 until April 2003; prior
thereto, Senior Vice President,
Secretary and General Counsel,
Loews Corporation.
Robert A. Kavesh (76) Trustee since Marcus Nadler Professor of 37 Director, DEL Laboratories, Inc.
2000 Finance and Economics (cosmetics and pharmaceuticals)
Emeritus, New York University, since 1978; The Caring Community
Stern School of Business. (not-for-profit).
Howard A. Mileaf (67) Trustee since Retired. Formerly, Vice 37 Director, WHX Corporation
1999 President and Special Counsel, (holding company) since August
WHX Corporation (holding 2002; Director, WebFinancial
company), 1993-2001. Corporation (holding company)
since December 2002; Director, State
Theatre of New Jersey (not-for-
profit theater), since 2000; Formerly,
Director, Kevlin Corporation
(manufacturer of microwave and
other products).
John P. Rosenthal (71) Trustee since Senior Vice President, Burnham 37 Director, 92nd Street Y (non-profit),
2000 Securities Inc. (a registered since 1967; Formerly, Director,
broker-dealer) since 1991. Cancer Treatment Holdings, Inc.
William E. Rulon (71) Trustee since Retired. Senior Vice President, 37 Director, Pro-Kids Golf and
2000 Foodmaker, Inc. (operator and Learning Academy (teach golf and
franchiser of restaurants) until computer usage to "at risk" children),
January 1997. since 1998; Director, Prandium, Inc.
(restaurants) from March 2001 until
July 2002.
Cornelius T. Ryan (72) Trustee since Founding General Partner, 37 Director, Capital Cash Management
2000 Oxford Partners and Oxford Trust (money market fund),
Bioscience Partners (venture Narragansett Insured Tax-Free
capital partnerships) and Income Fund, Rocky Mountain
President, Oxford Venture Equity Fund, Prime Cash Fund,
Corporation. several private companies and
QuadraMed Corporation
(NASDAQ).
20
Trustees and Officers (Unaudited) cont'd
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Tom Decker Seip (53) Trustee since General Partner, Seip 37 Director, H&R Block, Inc. (financial
2000 Investments LP (a private services company) since May 2001;
investment partnership); Formerly, Director, General Magic
President and CEO, Westaff, (voice recognition software), 2001-
Inc. (temporary staffing), May 2002; Director, Forward
2001 to January 2002; Senior Management, Inc. (asset
Executive at the Charles management) since 2001; Formerly,
Schwab Corporation from 1983 Director, E-Finance Corporation
to 1999, including Chief (credit decisioning services), 1999-
Executive Officer, Charles 2003; Director, Save-Daily.com
Schwab Investment (micro investing services), 1999-
Management, Inc. and Trustee, 2003; Director, Offroad Capital Inc.
Schwab Family of Funds and (pre-public internet commerce
Schwab Investments from 1997 company).
to 1998 and Executive Vice
President-Retail Brokerage,
Charles Schwab Investment
Management from 1994 to
1997.
Candace L. Straight (56) Trustee since Private investor and consultant 37 Director, Providence Washington
1999 specializing in the insurance (property and casualty insurance
industry; Formerly, Advisory company), since December 1998;
Director, Securitas Capital LLC Director, Summit Global Partners
(a global private equity (insurance brokerage firm) since
investment firm dedicated to October 2000.
making investments in the
insurance sector), 1998 until
December 2002.
Peter P. Trapp (59) Trustee since Regional Manager for Atlanta 37 None.
1984 Region, Ford Motor Credit
Company since August 1997;
prior thereto, President, Ford
Life Insurance Company, April
1995 until August 1997.
21
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Edward I. O'Brien* (75) Trustee since Formerly, Member, Investment 37 Director, Legg Mason, Inc. (financial
2000 Policy Committee, Edward services holding company), since
Jones, 1993-2001; President, 1993; Director, Boston Financial
Securities Industry Association Group (real estate and tax shelters)
("SIA") (securities industry's 1993-1999.
representative in government
relations and regulatory matters
at the federal and state levels)
1974-1992; Adviser to SIA,
November 1992-November
1993.
Jack L. Rivkin* (63) President and Executive Vice President, 37 Director, Dale Carnegie and
Trustee since Neuberger Berman Inc. Associates, Inc. (private company)
December (holding company) since 2002; since 1998; Director, Emagin Corp.
2002 Executive Vice President and (public company) since 1997;
Chief Investment Officer, Director, Solbright, Inc. (private
Neuberger Berman since 2002 company) since 1998; Director,
and 2003, respectively; Head of Infogate, Inc. (private company)
Research and Research Sales since 1997.
and Trading Departments of
Neuberger Berman since 2002;
Director and Chairman, NB
Management since December
2002; Formerly, Executive Vice
President, Citigroup
Investments, Inc. from
September 1995 to February
2002; Executive Vice President,
Citigroup Inc. from September
1995 to February 2002.
22
Trustees and Officers (Unaudited) cont'd
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Peter E. Sundman* (44) Chairman of Executive Vice President, 37 Executive Vice President, Neuberger
the Board, Neuberger Berman since 1999; Berman Inc. (holding company)
Chief Formerly, Principal, Neuberger since 1999 and Formerly, Director
Executive Berman from 1997 until 1999; from October 1999 through March
Officer and Senior Vice President, NB 2003; President and Director, NB
Trustee since Management from 1996 until Management since 1999; Head of
2000; 1999. Neuberger Berman Inc.'s Mutual
President and Funds and Institutional Business
Chief since 1999; Director and Vice
Executive President, Neuberger & Berman
Officer from Agency, Inc. since 2000; Trustee,
1998 to 2000 Frost Valley YMCA.
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the Trust's Trust Instrument, each Trustee shall hold office
for life or until his or her successor is elected or the Trust terminates;
except that (a) any Trustee may resign by delivering a written resignation;
(b) any Trustee may be removed with or without cause at any time by a
written instrument signed by at least two-thirds of the other Trustees; (c)
any Trustee who requests to be retired, or who has become unable to serve,
may be retired by a written instrument signed by a majority of the other
Trustees; and (d) any Trustee may be removed at any shareholder meeting by
a vote of at least two-thirds of the outstanding shares.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
* Indicates a Trustee who is an "interested person" within the meaning of the
1940 Act. Mr. Sundman and Mr. Rivkin are interested persons of the Trust by
virtue of the fact that they are officers and/or directors of NB Management
and Executive Vice Presidents of Neuberger Berman. Mr. O'Brien is an
interested person of the Trust by virtue of the fact that he is a director
of Legg Mason, Inc., a wholly owned subsidiary of which, from time to time,
serves as a broker or dealer to the Funds and other funds for which NB
Management serves as investment manager.
23
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Information about the Officers of the Trust
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
Claudia A. Brandon (47) Secretary since 1985 Vice President, Neuberger Berman since 2002 and
employee since 1999; Vice President-Mutual Fund Board
Relations, NB Management since 2000; Vice President,
NB Management from 1986 to 1999; Secretary,
ten registered investment companies for which
NB Management acts as investment manager and
administrator (four since 2002 and three since 2003).
Robert Conti (47) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President, Neuberger Berman from 1999 until 2003;
Senior Vice President, NB Management since 2000;
Controller, NB Management until 1996; Treasurer,
NB Management from 1996 until 1999; Vice President,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (three since 2000, four since 2002 and
three since 2003).
Brian P. Gaffney (50) Vice President since 2000 Managing Director, Neuberger Berman since 1999;
Senior Vice President, NB Management since 2000;
Vice President, NB Management from 1997 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Sheila R. James (38) Assistant Secretary since 2002 Employee, Neuberger Berman since 1999; Employee,
NB Management from 1991 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
Kevin Lyons (48) Assistant Secretary since Employee, Neuberger Berman since 1999; Employee,
March 2003 NB Management from 1993 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (since 2003).
John M. McGovern (33) Assistant Treasurer since 2002 Employee, NB Management since 1993; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
24
Trustees and Officers (Unaudited) cont'd
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
Barbara Muinos (45) Treasurer and Principal Financial Vice President, Neuberger Berman since 1999; Assistant
and Accounting Officer since 2002; Vice President, NB Management from 1993 to 1999;
prior thereto, Assistant Treasurer Treasurer and Principal Financial and Accounting
since 1996 Officer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003);
Assistant Treasurer of three registered investment
companies for which NB Management acts as investment
manager and administrator from 1996 until 2002.
Frederic B. Soule (57) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President; Neuberger Berman from 1999 until 2003;
Vice President, NB Management from 1995 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Trani Jo Wyman (34) Assistant Treasurer since 2002 Employee, NB Management since 1991; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
- -------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the By-Laws of the Trust, each officer elected by the Trustees
shall hold office until his or her successor shall have been elected and
qualified or until his or her earlier death, inability to serve, or
resignation. Officers serve at the pleasure of the Trustees and may be
removed at any time with or without cause.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
25
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Report of Votes of Shareholders (Unaudited)
A special meeting of shareholders of Neuberger Berman Advisers Management Trust
Limited Maturity Bond Portfolio (the "Fund") was held on September 23, 2003.
Upon completion of the acquisition of Neuberger Berman Inc. by Lehman Brothers
Holdings Inc. (the "Transaction"), the management agreement between the Trust,
on behalf of the Fund, and Neuberger Berman Management Inc. ("NB Management"),
and the sub-advisory agreement with respect to the Trust and each Fund, between
NB Management and Neuberger Berman, LLC automatically terminated. To provide for
continuity of management, the shareholders of the Fund voted on the following
matters, which became effective upon completion of the Transaction on October
31, 2003:
Proposal 1--To Approve a New Management Agreement between the Trust, on behalf
of the Fund, and NB Management
Votes For Votes Against Abstentions*
21,313,229.002 454,928.849 985,950.326
Proposal 2--To Approve a New Sub-Advisory Agreement with respect to the Trust
and each Fund, between NB Management and Neuberger Berman, LLC
Votes For Votes Against Abstentions*
21,297,929.112 489,252.930 966,926.135
* Abstentions were counted as shares that were present and entitled to vote
for purposes of determining a quorum and had a negative effect on the
proposals.
26
______________________________________________________________________________
Annual Report [NEUBERGER BERMAN]
December 31, 2003 A Lehman Brothers Company
Neuberger Berman
Advisers
Management
Trust
Mid-Cap
Growth
Portfolio[RegTM]
B1013 02/04
Mid-Cap Growth Portfolio Managers' Commentary
- ---------------------------------------------
The AMT Mid-Cap Growth Portfolio posted a strongly positive return in 2003,
although in a surging market it underperformed its benchmark, the Russell Midcap
Growth Index.(2)
2003 was a robust year for stocks, which ended their extended bear market. All
major equity indices registered gains, with growth and value styles at a
roughly equal pace, while small capitalization and technology stocks generated
the greatest returns. In general, the stocks of cyclical and less quality firms
performed much better than those of larger, higher quality, stable companies.
-----------------------------------------------------------------------------------------------
Average Annual Total Return(1)
Mid-Cap Growth Mid-Cap Growth Russell Midcap(R) S&P MidCap 400/
Portfolio Class I Portfolio Class S Growth(2) BARRA Growth(2)
1 Year 28.07% 27.65% 42.71% 30.95%
5 Year (0.58)% (0.65)% 2.01% 6.48%
Life of Fund 7.76% 7.70% 4.77% 10.81%
- ------------------------------------------------------------------------------------------------
Inception Date 11/03/1997 02/18/2003
Comparison of a $10,000 Investment
[PLOT POINTS FOR MOUNTAIN CHART]
Mid-Cap
Growth Porfolio Russell Midcap(R) S&P MidCap 400/
Class I Growth BARRA Growth
11/3/1997 $10,000 $10,000 $10,000
12/31/1997 $11,720 $10,238 $10,197
12/31/1998 $16,324 $12,067 $13,751
12/31/1999 $25,121 $18,256 $17,703
12/31/2000 $23,247 $16,111 $19,324
12/31/2001 $17,518 $12,864 $17,784
12/31/2002 $12,378 $ 9,339 $14,375
12/31/2003 $15,853 $13,328 $18,824
Value as of 12/31/03
Mid-Cap Growth Portfolio Class I $15,853
Russell Midcap(R) Growth $13,328
S&P MidCap 400/BARRA Growth $18,824
This chart shows the value of a hypothetical $10,000 investment in the Fund over
the past 10 fiscal years, or since the Fund's inception, if it has not operated
for 10 years. The graphs are based on the Class I shares only; performance of
other classes will vary due to differences in fee structures (see Average Annual
Total Return chart above). The results are compared with benchmarks, which may
include a broad-based market index and or a narrower index. Please note that
market indexes do not include expenses. All results include the reinvestment of
dividends and capital gain distributions. Results represent past performance and
do not indicate future results.
Early in the year, many investors feared that growth was fragile as business
spending remained tepid and employment was weak. However, the Federal Reserve
held rates low, which in turn helped unleash consumer spending by way of
extensive mortgage refinancings. In addition, fiscal stimulus, including tax
cuts and spending hikes, provided strength to consumers. Finally, the end to
major conflict in Iraq provided the psychological lift, boosting equity prices.
Corporate earnings jumped in the third and fourth quarters as economic growth
picked up.
For the Portfolio, the largest contributors to performance for the year were
security selections within Industrials, Telecommunications and Energy. In the
Industrials sector, our emphasis on education stocks was additive to returns,
while our Energy holdings--despite the sector's relative weakness--benefited
from their ability to increase reserves or production within oil and gas. In
terms of sector allocation, our overweight in Information Technology (IT), one
of the best performing sectors, helped returns, as did our underweight in the
anemic Consumer Staples sector.
On the down side, our stock selection within IT hurt relative performance. Our
holdings, which were defensively oriented at the start of the second quarter,
fell behind as the indices rose sharply in April and May. For example, we held
technology stocks that would have performed well if tech spending did not
improve significantly. But as fundamentals improved, these defensive, less
cyclical, lower octane names underperformed the more cyclical, higher beta names
in the sector. In May, we repositioned the Portfolio strategically to take
advantage of this market shift.
Looking forward, we remain bullish in the short run. We believe the markets are
likely to overshoot
2
on the upside, as they typically do, but face greater uncertainty in the latter
half of 2004. The Federal Reserve Board should remain accommodative through
2004, given the limited window of opportunity to change policy prior to the
presidential election. The story may unfold as follows: Employment grows slowly,
productivity stays high and inflation remains low; margins expand; the Fed stays
on hold through next year, interest rates are stable and even decline, the
dollar gradually descends, and GDP expands at a 5% plus rate; as a result,
earnings grow more than current expectations and price/earnings multiples expand
as investors risk more capital from their money market holdings.
This paints a favorable economic picture for stocks to continue on their upward
trend. During the coming year, we believe that market leadership will continue
in technology, industrials, materials and financials.
Sincerely,
/s/ JON D. BRORSON
JON D. BRORSON
PORTFOLIO MANAGER AND
GROWTH EQUITY TEAM LEADER
/s/ KENNETH J. TUREK
KENNETH J. TUREK
PORTFOLIO MANAGER
1. For Class I, 28.07%, (0.58%) and 7.76% were the average annual total returns
for the 1-year, 5-year and since inception (11/03/97) periods ended December 31,
2003. For Class S, 27.65%, (0.65%) and 7.70% were the average annual total
returns for the 1-year, 5-year and since inception (11/03/97) periods ended
December 31, 2003. Performance shown prior to February 2003 for the Class S
shares is of the Class I shares, which has lower expenses and typically higher
returns than the Class S shares. Neuberger Berman Management Inc. ("NBMI") has
agreed to absorb certain expenses of the AMT Portfolios. Without this
arrangement, which is subject to change, the total returns of the Portfolios
would be less. Total return includes reinvestment of dividends and capital gain
distributions. Performance data quoted represent past performance and the
investment return and principal value of an investment will fluctuate so that
the shares, when redeemed, may be worth more or less than original cost. The
performance information does not reflect fees and expenses of the insurance
companies.
2. The Russell Midcap[RegTM] Growth Index measures the performance of those
Russell Midcap[RegTM] Index companies with higher price-to-book ratios and
higher forecasted growth values. The Russell Midcap Index measures the
performance of the 800 smallest companies in the Russell 1000[RegTM] Index,
which represents approximately 26% of the total market capitalization of the
Russell 1000 Index (which, in turn, consists of the 1,000 largest U.S.
companies, based on market capitalization). The S&P MidCap 400/ BARRA Growth
Index is a benchmark for mid-cap growth stock performance. It is constructed of
companies in the S&P MidCap 400 Index, which is a market value weighted index
for mid-cap stock price movement, with higher price-to-book ratios than the
companies in its value index counterpart. 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 these indices are prepared or obtained by NBMI and
include reinvestment of all dividends and capital gain distributions. The
Portfolio may invest in many securities not included in the above-described
indices.
The investments for the Portfolio are managed by the same portfolio manager(s)
who manage one or more other mutual funds that have similar names, investment
objectives and investment styles as the Portfolio. You should be aware that the
Portfolio is likely to differ from the other mutual funds in size, cash flow
pattern and tax matters. Accordingly, the holdings and performance of the
Portfolio can be expected to vary from those of the other mutual funds.
The composition, industries and holdings of the Portfolio are subject to change.
Shares of the separate Portfolios of Neuberger Berman Advisers Management Trust
are sold only through the currently effective prospectus and are not available
to the general public. Shares of this Portfolio may be purchased only by life
insurance companies to be used with their separate accounts that fund variable
annuity and variable life insurance policies and by qualified pension and
retirement plans.
(C) 2004 Neuberger Berman Management Inc., distributor. All rights reserved.
3
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Schedule of Investments Mid-Cap Growth Portfolio
Number of Shares Market Value+
Common Stocks (98.7%)
Biotechnology (4.7%)
83,500 Celgene Corp. $ 3,759,170*
107,000 Chiron Corp. 6,097,930*\P
108,000 Genzyme Corp. 5,328,720*\P
111,500 Gilead Sciences 6,482,610*
-----------
21,668,430
Building, Construction & Furnishing (0.5%)
23,000 Centex Corp. 2,475,950
Business Services (4.4%)
249,000 Alliance Data Systems 6,892,320*
98,800 Corporate Executive Board 4,610,996*
143,600 Education Management 4,457,344*
100,300 Stericycle, Inc. 4,684,010*
-----------
20,644,670
Business Services-IT Business Services (0.5%)
46,500 Affiliated Computer
Services 2,532,390*
Communications Equipment (2.2%)
289,500 Juniper Networks 5,407,860*\P
134,900 UTStarcom, Inc. 5,000,743*\P
-----------
10,408,603
Diversified (0.8%)
60,500 iShares Russell 2000
Growth Index Fund 3,585,230\P
Electrical Equipment (0.7%)
96,500 Broadcom Corp. 3,289,685*
Electrical & Electronics (2.9%)
86,500 Jabil Circuit 2,447,950*
188,500 Molex Inc. 6,576,765\P
103,000 Silicon Laboratories 4,451,660*\P
-----------
13,476,375
Energy (2.7%)
42,500 Kinder Morgan 2,511,750
79,000 Murphy Oil 5,159,490
179,800 XTO Energy 5,088,340
-----------
12,759,580
Financial Services (6.4%)
115,500 Capital One Financial 7,078,995
120,500 Franklin Resources 6,273,230
181,000 Investors Financial
Services 6,952,210\P
82,600 Moody's Corp. 5,001,430
124,100 New York Community
Bancorp 4,722,005
-----------
30,027,870
Health Care (9.0%)
80,500 Allergan, Inc. 6,183,205
56,500 C. R. Bard 4,590,625
277,000 Caremark Rx 7,016,410*\P
99,000 Henry Schein 6,690,420*
57,000 Invitrogen Corp. 3,990,000*
Number of Shares Market Value+
135,500 NPS Pharmaceuticals $ 4,165,270*\P
102,000 Teva Pharmaceutical
Industries ADR 5,784,420\P
76,000 Watson Pharmaceuticals 3,496,000*
-----------
41,916,350
Industrial (12.5%)
75,000 Danaher Corp. 6,881,250
79,500 Donaldson Co. 4,703,220
23,000 Eaton Corp. 2,483,540
150,000 Fastenal Co. 7,491,000\P
117,500 Gentex Corp. 5,188,800
96,000 Harman International
Industries 7,102,080
264,000 J.B. Hunt Transport Services 7,130,640*
66,500 Parker-Hannifin 3,956,750
93,000 SPX Corp. 5,469,330*
164,000 Swift Transportation 3,447,280*
232,000 United Rentals 4,468,320*
-----------
58,322,210
Insurance (0.4%)
56,700 China Life Insurance ADR 1,873,368*\P
Leisure (3.8%)
180,000 International Game
Technology 6,426,000
132,500 Mandalay Resort Group 5,925,400
149,100 Royal Caribbean Cruises 5,187,189\P
-----------
17,538,589
Media (3.4%)
73,000 E.W. Scripps 6,872,220
55,500 Getty Images 2,782,215*
152,000 Univision Communications 6,032,880*\P
-----------
15,687,315
Medical Equipment (5.0%)
65,250 INAMED Corp. 3,135,915*
116,000 Varian Medical Systems 8,015,600*
243,000 VISX, Inc. 5,625,450*
92,500 Zimmer Holdings 6,512,000*
-----------
23,288,965
Metals (0.6%)
64,400 Freeport-McMoRan
Copper & Gold 2,713,172\P
Packing & Containers (1.8%)
120,000 Packaging Corp. of America 2,623,200
246,000 Pactiv Corp. 5,879,400*
-----------
8,502,600
Retail (14.4%)
68,000 Amazon.com 3,579,520*\P
102,000 CarMax, Inc. 3,154,860*
196,600 Coach, Inc. 7,421,650*
152,000 Michaels Stores 6,718,400
139,500 Nordstrom, Inc. 4,784,850
189,500 PETsMART, Inc. 4,510,100
340,800 Ross Stores 9,007,344
See Notes to Schedule of Investments 4
Schedule of Investments Mid-Cap Growth Portfolio cont'd
Number of Shares Market Value+
182,500 Staples, Inc. $ 4,982,250*
145,000 Tiffany & Co. 6,554,000
125,500 Tuesday Morning 3,796,375*
79,500 Whole Foods Market 5,336,835
202,000 Williams-Sonoma 7,023,540*\P
-------------
66,869,724
Semiconductors (8.1%)
256,500 ASML Holding ADR 5,142,825*\P
189,000 Fairchild Semiconductor
International 4,719,330*
203,000 Intersil Corp. 5,044,550
80,500 KLA-Tencor 4,722,935*\P
96,000 Lam Research 3,100,800*\P
234,000 Microchip Technology 7,806,240\P
84,100 National Semiconductor 3,314,381*
72,700 QLogic Corp. 3,751,320*\P
-------------
37,602,381
Software (6.6%)
74,700 Cognos, Inc. 2,287,314*\P
55,500 Electronic Arts 2,651,790*
147,000 Mercury Interactive 7,150,080*
220,500 PeopleSoft, Inc. 5,027,400*
218,500 Symantec Corp. 7,571,025*\P
165,500 VERITAS Software 6,149,980*
-------------
30,837,589
Technology (5.4%)
92,000 Agilent Technologies 2,690,080*
312,000 Corning Inc. 3,254,160*
84,000 SanDisk Corp. 5,135,760*
150,000 Unisys Corp. 2,227,500*
180,000 Zebra Technologies 11,946,600*
-------------
25,254,100
Telecommunications (1.9%)
649,000 Nextel Partners 8,729,050*\P
Total Common Stocks
(Cost $366,419,783) 460,004,196
-------------
Principal Amount
Short-Term Investments (24.3%)
$107,849,000 N&B Securities Lending
Quality Fund, LLC 107,849,000++
5,377,389 Neuberger Berman
Institutional Cash Fund
Trust Class 5,377,389@
-------------
Total Short-Term Investments
(Cost $113,226,389) 113,226,389#
--------------
Total Investments (123.0%)
(Cost $479,646,172) 573,230,585##
Liabilities, less cash, receivables and other
assets [(23.0%)] (107,207,853)
-------------
Total Net Assets (100.0%) $ 466,022,732
-------------
See Notes to Schedule of Investments 5
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Schedule of Investments Mid-Cap Growth Portfolio
+ Investment securities of the Fund are valued at the latest sales price where
that price is readily available; securities for which no sales were
reported, unless otherwise noted, are valued at the mean between the closing
bid and asked prices. Securities traded primarily on the NASDAQ Stock Market
are normally valued by the Fund at the NASDAQ Official Closing Price
("NOCP") provided by NASDAQ each business day. The NOCP is the most recently
reported price as of 4:00:02 p.m., Eastern time, unless that price is
outside the range of the "inside" bid and asked prices (i.e., the bid and
asked prices that dealers quote to each other when trading for their own
accounts); in that case, NASDAQ will adjust the price to equal the inside
bid or asked price, whichever is closer. Because of delays in reporting
trades, the NOCP may not be based on the price of the last trade to occur
before the market closes. The Fund values all other securities by a method
the Board of Trustees of Neuberger Berman Advisers Management Trust believes
accurately reflects fair value. Numerous factors may be considered when
determining the fair value of a security, including available analyst, media
or other reports, trading in futures or ADRs and whether the issuer of the
security being fair valued has other securities outstanding. 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.
# At cost, which approximates market value.
## At December 31, 2003, the cost of investments for U.S. Federal income tax
purposes was $480,119,200. Gross unrealized appreciation of investments was
$95,967,152 and gross unrealized depreciation of investments was $2,855,767,
resulting in net unrealized appreciation of $93,111,385, based on cost for
U.S. Federal income tax purposes.
* Non-income producing security.
\P All or a portion of this security is on loan (see Note A of Notes to
Financial Statements).
@ Neuberger Berman Institutional Cash Fund is also managed by Neuberger Berman
Management Inc. (see Note A of Notes to Financial Statements).
++ Affiliated issuer (see Note A of Notes to Financial Statements).
See Notes to Financial Statements 6
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Assets and Liabilities
Mid-Cap
Growth
Neuberger Berman Advisers Management Trust Portfolio
Assets
Investments in securities, at market value*+ (Note A)-see Schedule of Investments:
==================================================================================================
Unaffiliated issuers $ 460,004,196
- --------------------------------------------------------------------------------------------------
Non-controlled affiliated issuers 113,226,389
==================================================================================================
573,230,585
==================================================================================================
Dividends and interest receivable 74,995
- --------------------------------------------------------------------------------------------------
Receivable for securities sold 2,343,496
==================================================================================================
Receivable for Fund shares sold 32,357
- --------------------------------------------------------------------------------------------------
Prepaid expenses and other assets 35,525
==================================================================================================
Total Assets 575,716,958
==================================================================================================
Liabilities
Payable for collateral on securities loaned (Note A) 107,849,000
==================================================================================================
Payable for securities purchased 291,158
- --------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 1,059,607
==================================================================================================
Payable to investment manager (Note B) 207,017
- --------------------------------------------------------------------------------------------------
Payable to administrator (Note B) 117,293
==================================================================================================
Accrued expenses and other payables 170,151
==================================================================================================
Total Liabilities 109,694,226
==================================================================================================
Net Assets at value $ 466,022,732
==================================================================================================
Net Assets consist of:
Paid-in capital $ 737,800,979
==================================================================================================
Accumulated net realized gains (losses) on investments (365,362,660)
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) in value of investments 93,584,413
==================================================================================================
Net Assets at value $ 466,022,732
==================================================================================================
Net Assets
Class I $ 459,748,237
================================================================================================
Class S 6,274,495
- --------------------------------------------------------------------------------------------------
Shares Outstanding ($.001 par value; unlimited shares authorized)
Class I 29,996,706
================================================================================================
Class S 410,667
- --------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share
Class I $ 15.33
================================================================================================
Class S 15.28
==================================================================================================
+Securities of unaffiliated issuers on loan, at market value $ 104,062,930
==================================================================================================
*Cost of investments:
Unaffiliated issuers $ 366,419,783
================================================================================================
Non-controlled affiliated issuers 113,226,389
==================================================================================================
Total cost of investments $ 479,646,172
==================================================================================================
See Notes to Financial Statements 7
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST FOR THE YEAR ENDED DECEMBER 31, 2003
Statement of Operations
Mid-Cap
Growth
Neuberger Berman Advisers Management Trust Portfolio
Investment Income
Income:
Dividend income $ 949,189
================================================================================================================
Income from securities loaned-net (Note A) 390,277
- ----------------------------------------------------------------------------------------------------------------
Income from investments in affiliated issuers (Note A) 141,552
================================================================================================================
Foreign taxes withheld (Note A) (12,831)
================================================================================================================
Total income 1,468,187
================================================================================================================
Expenses:
Investment management fee (Notes A & B) 2,192,380
================================================================================================================
Administration fee (Note B):
Class I 1,206,654
=============================================================================================================
Class S 5,088
- ----------------------------------------------------------------------------------------------------------------
Distribution fees (Note B):
Class S 4,300
=============================================================================================================
Audit fees 19,593
- ----------------------------------------------------------------------------------------------------------------
Custodian fees (Note B) 139,119
================================================================================================================
Legal fees 51,049
- ----------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 29,140
================================================================================================================
Total expenses 3,647,323
Investment management fee waived (Note A) (16,731)
Expenses reduced by custodian fee expense offset and commission recapture arrangements (Note B) (43,956)
================================================================================================================
Total net expenses 3,586,636
================================================================================================================
Net investment income (loss) (2,118,449)
================================================================================================================
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investment securities sold 4,757,260
================================================================================================================
Change in net unrealized appreciation (depreciation) in value of:
Investment securities (Note A) 97,758,431
=============================================================================================================
Net gain (loss) on investments 102,515,691
================================================================================================================
Net increase (decrease) in net assets resulting from operations $100,397,242
================================================================================================================
See Notes to Financial Statements 8
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Changes in Net Assets
Mid-Cap Growth Portfolio
-----------------------------------
Neuberger Berman Advisers Management Trust Year Ended December 31,
2003 2002
Increase (Decrease) in Net Assets:
From Operations:
Net investment income (loss) $ (2,118,449) $ (2,498,809)
======================================================================================================
Net realized gain (loss) on investments 4,757,260 (122,635,019)
- ------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of investments 97,758,431 (33,913,414)
======================================================================================================
Net increase (decrease) in net assets resulting from operations 100,397,242 (159,047,242)
======================================================================================================
From Fund Share Transactions:
Proceeds from shares sold:
Class I 191,004,176 237,015,402
===================================================================================================
Class S 15,372,995 --
- ------------------------------------------------------------------------------------------------------
Payments for shares redeemed:
Class I (193,325,218) (246,511,511)
===================================================================================================
Class S (9,600,281) --
- ------------------------------------------------------------------------------------------------------
Net increase (decrease) from Fund share transactions 3,451,672 (9,496,109)
======================================================================================================
Net Increase (Decrease) in Net Assets 103,848,914 (168,543,351)
Net Assets:
Beginning of year 362,173,818 530,717,169
======================================================================================================
End of year $ 466,022,732 $ 362,173,818
======================================================================================================
Number of Fund Shares:
Sold:
Class I 14,482,662 16,917,543
===================================================================================================
Class S 1,144,089 --
- ------------------------------------------------------------------------------------------------------
Redeemed:
Class I (14,738,778) (18,000,845)
===================================================================================================
Class S (733,422) --
======================================================================================================
Net increase (decrease) in shares outstanding 154,551 (1,083,302)
======================================================================================================
See Notes to Financial Statements 9
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Financial Statements Mid-Cap Growth Portfolio
Note A--Summary of Significant Accounting Policies:
1 General: Mid-Cap Growth Portfolio (the "Fund") is a separate operating
series of Neuberger Berman Advisers Management Trust (the "Trust"), a
Delaware statutory trust organized pursuant to a Trust Instrument dated May
23, 1994. The Trust is currently comprised of ten separate operating series
(each a "Series," collectively, the "Funds") each of which (except Focus
Portfolio) is diversified. The Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and its shares are registered under the Securities Act of 1933,
as amended (the "1933 Act"). The Fund currently offers Class I and Class S
shares. Class S had no operations until February 18, 2003, other than
matters relating to its organization and registration of its shares under
the 1933 Act. The Trustees of the Trust may establish additional series or
classes of shares without the approval of shareholders.
The assets of each Series of the Trust belong only to that Series, and the
liabilities of each Series are borne solely by that Series and no other.
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires Neuberger Berman
Management Inc. ("Management") to make estimates and assumptions at the date
of the financial statements. Actual results could differ from those
estimates.
2 Portfolio valuation: Investment securities are valued as indicated in the
notes following the Schedule of Investments.
3 Foreign currency translation: The accounting records of the Fund 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. Net unrealized
foreign currency gain (loss) arises from changes in the value of assets and
liabilities, other than investment securities, as a result of changes in
exchange rates and are stated separately in the Statement of Operations.
4 Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the
ex-dividend date or, for certain foreign dividends, as soon as the Fund
becomes aware of the dividends. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, including accretion of original issue discount,
where applicable, and accretion of discount on short-term investments, 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 and stated separately in the Statement of Operations.
5 Federal income taxes: The Funds are treated as separate entities 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
10
Notes to Financial Statements Mid-Cap Growth Portfolio cont'd
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.
6 Dividends and distributions to shareholders: The Fund may earn income, net
of expenses, daily on its investments. Income dividends and distributions
from net realized capital gains, if any, generally are distributed in
October. Income dividends and capital gain distributions to shareholders are
recorded on the ex-dividend date. To the extent the Fund's net realized
capital gains, if any, can be offset by capital loss carryforwards
($4,181,334, $236,225,757, $113,423,118 and $11,059,423 expiring in 2008,
2009, 2010 and 2011, respectively, determined as of December 31, 2003), it
is the policy of the Fund not to distribute such gains.
The Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a tax 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 in the components of net assets on the Statement of Assets and
Liabilities.
As of December 31, 2003, the components of distributable earnings
(accumulated losses) on a U.S. Federal income tax basis were as follows:
Unrealized Loss
Appreciation Carryforwards
(Depreciation) and Deferrals Total
$93,111,385 $(364,889,632) $(271,778,247)
The difference between book basis and tax basis is attributable primarily to
net operating losses and the tax deferral of losses on wash sales.
7 Expense allocation: Expenses directly attributable to a Series are charged
to that Series. Expenses of the Trust that are not directly attributed to a
Series are allocated among the Funds, on the basis of relative net assets,
except where a more appropriate allocation of expenses to each of the Funds
can otherwise be made fairly. Expenses borne by the complex of related
investment companies, which includes open-end and closed-end investment
companies for which Management serves as investment adviser, that are not
directly attributed to a Series or the Trust, are allocated among the Funds
and the other investment companies in the complex or series thereof, on the
basis of relative net assets, except where a more appropriate allocation of
expenses to each investment company in the complex or series thereof can
otherwise be made fairly. The Fund's expenses (other than those specific to
each class) are allocated proportionally each day between the classes based
upon the relative net assets of each class.
8 Security lending: Pursuant to an Exemptive Order issued by the Securities
and Exchange Commission, the Fund entered into a Securities Lending
Agreement ("Agreement") with Neuberger Berman, LLC ("Neuberger") on April
17, 2003. Securities loans involve certain risks in the event a borrower
should fail financially, including delays or inability to recover the lent
securities or foreclose against the collateral. The investment manager,
under the general supervision of the Trust's Board of Trustees, monitors the
creditworthiness of the parties to whom the Fund makes security loans. The
Fund will not lend securities
11
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
on which covered call options have been written, or lend securities on terms
which would prevent the Fund from qualifying as a regulated investment
company. The Fund receives cash collateral equal to at least 102% of the
current market value of the loaned securities. The Fund invests the cash
collateral in the N&B Securities Lending Quality Fund, LLC ("investment
vehicle"), which is managed by State Street Bank and Trust Company ("State
Street") pursuant to guidelines approved by the Trust's investment manager.
Neuberger guarantees a minimum revenue to the Fund under the Agreement, and
receives a portion of any revenue earned in excess of the guaranteed amount
as a lending agency fee. At December 31, 2003, the Fund had not paid
Neuberger any fees under the Agreement.
Prior to April 17, 2003, the Fund had a Securities Lending Agreement with
Morgan Stanley & Co. Incorporated ("Morgan"). The Fund received cash
collateral equal to at least 100% of the current market value of the loaned
securities. The Fund invested the cash collateral in the investment vehicle.
Income earned on the investment vehicle was paid to Morgan monthly. The Fund
received a fee, payable monthly, negotiated by the Fund and Morgan, based on
the number and duration of the lending transactions.
Income earned on the securities loaned, if any, is reflected in the
Statement of Operations under the caption Income from securities loaned-net.
9 Foreign taxes: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
10 Transactions with other funds managed by Neuberger Berman Management Inc.:
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Fund may invest in the Neuberger Berman Institutional Cash
Fund (the "Cash Fund"), a fund managed by Management and having the same
officers and Trustees as the Fund. The Cash Fund seeks to provide as high a
level of current income as is consistent with the preservation of capital
and the maintenance of liquidity. For any cash that the Fund invests in the
Cash Fund, Management waives a portion of its management fee equal to the
management fee it receives from the Cash Fund on those assets. For the year
ended December 31, 2003, such waived fees amounted to $16,731. For the year
ended December 31, 2003, income earned on this investment is reflected in
the Statement of Operations under the caption Income from investments in
affiliated issuers.
11 Other: All net investment income and realized and unrealized capital gains
and losses of the Fund are allocated, on the basis of relative net assets,
pro rata among its respective classes.
Note B--Management Fees, Administration Fees, Distribution Arrangements, and
Other Transactions With Affiliates:
Fund shares are issued and redeemed in connection with investments in and
payments under certain variable annuity contracts and variable life
insurance policies issued through separate accounts of life insurance
companies and are also offered directly to qualified pension and retirement
plans.
The Fund retains Management as its investment manager under a Management
Agreement. For such investment management services, the Fund pays Management
a fee at the annual rate of 0.55% of the first $250 million of the Fund's
average daily net assets, 0.525% of the next $250 million, 0.50% of the next
12
Notes to Financial Statements Mid-Cap Growth Portfolio cont'd
$250 million, 0.475% of the next $250 million, 0.45% of the next $500
million, 0.425% of the next $2.5 billion, and 0.40% of average daily net
assets in excess of $4 billion.
The Fund retains 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 0.30% of the Fund's average
daily net assets. Additionally, Management retains State Street as its
sub-administrator under a Sub-Administration Agreement. Management pays
State Street a fee for all services received under the agreement.
The Trustees of the Trust adopted a non-fee distribution plan for the Fund's
Class I.
For the Fund's Class S, Management acts as agent in arranging for the sale
of class shares without commission and bears advertising and promotion
expenses. The Trustees of the Trust have adopted a distribution plan (the
"Plan") with respect to this class, pursuant to Rule 12b-1 under the 1940
Act. The Plan provides that, as compensation for administrative and other
services provided to this class, Management's activities and expenses
related to the sale and distribution of this class of shares, and ongoing
services provided to investors in this class, Management receives from this
class a fee at the annual rate of 0.25% of Class S's average daily net
assets. Management receives this amount to provide distribution and
shareholder servicing for this class and pays a portion of it to
institutions that provide such services. Those institutions may use the
payments for, among other purposes, compensating employees engaged in sales
and/or shareholder servicing. The amount of fees paid by this class during
any year may be more or less than the cost of distribution and other
services provided to this class. NASD rules limit the amount of annual
distribution fees that may be paid by a mutual fund and impose a ceiling on
the cumulative distribution fees paid. The Trust's Plan complies with those
rules.
Management has contractually undertaken through December 31, 2006 to
reimburse the Fund's Class I and Class S shares for their operating expenses
(excluding the fees payable to Management (including the fees payable to
Management with respect to the Fund's Class S shares), interest, taxes,
brokerage commissions, extraordinary expenses, and transaction costs)
("Operating Expenses") which exceed, in the aggregate, 1.00% and 1.25%,
respectively, per annum of their average daily net assets (the "Expense
Limitation"). For the year ended December 31, 2003, no reimbursement to the
Fund's Class I and Class S shares was required. The Fund's Class I and Class
S shares each have agreed to repay Management through December 31, 2009 for
their excess Operating Expenses previously reimbursed by Management, so long
as their annual Operating Expenses during that period do not exceed their
Expense Limitations, and the repayments are made within three years after
the year in which Management issued the reimbursement. During the year ended
December 31, 2003, there was no reimbursement to Management under these
agreements. At December 31, 2003, the Fund's Class I and Class S shares have
no contingent liability to Management under these agreements.
On October 31, 2003, Management and Neuberger, a member firm of the New York
Stock Exchange and sub-adviser to the Fund, became indirect wholly owned
subsidiaries of Lehman Brothers Holdings Inc. ("Lehman"), a publicly-owned
holding company (the "Transaction"). Upon completion of the Transaction, the
Trust's management and sub-advisory agreements automatically terminated. To
provide for continuity
13
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
of management, the shareholders of the Fund voted on September 23, 2003, to
approve new management and sub-advisory agreements, which took effect upon
closing of the Transaction (see Report of Votes of Shareholders). Neuberger
is retained by Management to furnish it with investment recommendations and
research information without added cost to the Fund. Several individuals who
are officers and/or Trustees of the Trust are also employees of Neuberger
and/or Management.
On July 1, 2003, the Fund entered into a commission recapture program, which
enables it to pay some of its operational expenses by recouping a portion of
the commissions it pays to a broker that is not a related party of the Fund.
Expenses paid through this program may include costs of custodial, transfer
agency or accounting services. The impact of this arrangement was a
reduction of $43,876.
The Fund 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 $80.
Note C--Securities Transactions:
During the year ended December 31, 2003, there were purchase and sale
transactions (excluding short-term securities) of $640,539,948 and
$629,045,357, respectively.
During the year ended December 31, 2003, brokerage commissions on securities
transactions amounted to $1,572,867, of which Neuberger received $422,843,
Lehman received $99,276, and other brokers received $1,050,748.
Note D--Line of Credit:
At December 31, 2003, the Fund was a participant in a single committed,
unsecured $150,000,000 ($200,000,000 prior to September 26, 2003) line of
credit with State Street, to be used only for temporary or emergency
purposes. Interest is charged on borrowings under this agreement at the
overnight Federal Funds Rate plus 0.50% per annum. A facility fee of 0.10%
per annum of the available line of credit is charged, of which the Fund has
agreed to pay its pro rata share, based on the ratio of its individual net
assets to the net assets of all participants at the time the fee is due and
payable. The fee is paid quarterly in arrears. No compensating balance is
required. Other investment companies managed by Management also participate
in this line of credit on the same terms. Because several investment
companies participate, there is no assurance that the Fund will have access
to the entire $150,000,000 at any particular time. The Fund had no loans
outstanding pursuant to this line of credit at December 31, 2003, nor had
the Fund utilized this line of credit at any time prior to that date.
14
Financial Highlights Mid-Cap Growth Portfolio
The following tables include selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements.++
Class I+ Year Ended December 31,
--------------------------------------------------------------------
2003 2002 2001 2000 1999
Net Asset Value, Beginning of Year $ 11.97 $ 16.94 $ 22.48 $ 24.30 $ 16.22
------- ------- ------- ------- -------
Income From Investment Operations
Net Investment Income (Loss) (.07) (.08) (.07) (.09) (.07)
Net Gains or Losses on Securities
(both realized and unrealized) 3.43 (4.89) (5.47) (1.72) 8.55
------- ------- ------- ------- -------
Total From Investment Operations 3.36 (4.97) (5.54) (1.81) 8.48
------- ------- ------- ------- -------
Less Distributions
From Net Capital Gains -- -- -- (.01) (.40)
------- ------- ------- ------- -------
Total Distributions -- -- -- (.01) (.40)
------- ------- ------- ------- -------
Net Asset Value, End of Year $ 15.33 $ 11.97 $ 16.94 $ 22.48 $ 24.30
------- ------- ------- ------- -------
Total Return++ +28.07% -29.34% -24.64% -7.46% +53.89%
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $ 459.7 $ 362.2 $ 530.7 $ 624.1 $ 159.9
Ratio of Gross Expenses to Average Net Assets# .89% .95% .91% .98% 1.00%
Ratio of Net Expenses to Average Net Assets .88%[sec] .95% .91% .98%[sec] 1.00%[sec]
Ratio of Net Investment Income (Loss)
to Average Net Assets (.52)% (.57)% (.38)% (.34)% (.40)%
Portfolio Turnover Rate 161% 124% 99% 109% 100%
Period from
February 18, 2003^
Class S to December 31,
------------------
2003
Net Asset Value, Beginning of Period $ 11.15
-------
Income From Investment Operations
Net Investment Income (Loss) (.09)
Net Gains or Losses on Securities (both realized and unrealized) 4.22
---------
Total From Investment Operations 4.13
---------
Net Asset Value, End of Period $ 15.28
---------
Total Return++ +37.04%**
Ratios/Supplemental Data
Net Assets, End of Period (in millions) $ 6.3
Ratio of Gross Expenses to Average Net Assets# 1.13%*
Ratio of Net Expenses to Average Net Assets[sec] 1.11%*
Ratio of Net Investment Income (Loss) to Average Net Assets (.71)%*
Portfolio Turnover Rate 161%
See Notes to Financial Highlights 15
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Financial Highlights Mid-Cap Growth Portfolio
+ The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's Class I proportionate share of AMT Mid-Cap
Growth Investment's income and expenses through April 30, 2000 under the
prior master/feeder fund structure.
++ 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/higher if Management had not reimbursed/ recouped certain
expenses. The total return information shown does not reflect charges and
other expenses that apply to the separate account or the related insurance
policies, and the inclusion of these charges and other expenses would
reduce the total return for all fiscal periods shown.
# The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset and
commission recapture arrangements.
[sec] After reimbursement of expenses by Management. Had Management not
undertaken such action the annualized ratio of net expenses to average
daily net assets would have been:
Year Ended
December 31, 1999
Mid-Cap Growth Portfolio Class I 1.08%
After waiver of a portion of the investment management fee. Had Management
not undertaken such action the annualized ratio of net expenses to average
daily net assets would have been:
Year Ended
December 31, 2003
Mid-Cap Growth Portfolio Class I 0.89%
Mid-Cap Growth Portfolio Class S 1.11%
After reimbursement of expenses previously paid by Management. Had
Management not been reimbursed, the annualized ratio of net expenses to
average daily net assets would have been:
Year Ended
December 31, 2000
Mid-Cap Growth Portfolio Class I .95%
^ The date investment operations commenced.
++ The per share amounts which are shown have been computed based on the
average number of shares outstanding during each fiscal period.
* Annualized.
** Not annualized.
16
Report of Ernst & Young LLP, Independent Auditors
To the Board of Trustees of
Neuberger Berman Advisers Management Trust and
Shareholders of Mid-Cap Growth Portfolio
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Mid-Cap Growth Portfolio, one of the series
constituting the Neuberger Berman Advisers Management Trust (the "Trust"), as
of December 31, 2003, 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 December 31, 2003, 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
Mid-Cap Growth Portfolio of Neuberger Berman Advisers Management Trust at
December 31, 2003, 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 its 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
February 6, 2004
17
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Trustees and Officers (Unaudited)
The following tables set forth information concerning the trustees and officers
of the Trust. All persons named as trustees and officers also serve in similar
capacities for other funds administered or managed by NB Management and
Neuberger Berman. The Statement of Additional Information includes additional
information about fund trustees and is available upon request, without charge,
by calling (800) 877-9700.
Information about the Board of Trustees
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
John Cannon (73) Trustee since Consultant. Formerly, Chairman 37 Independent Trustee or Director of
2000 and Chief Investment Officer, three series of Oppenheimer Funds:
CDC Capital Management Limited Term New York Municipal
(registered investment adviser), Fund, Rochester Fund Municipals,
1993-January 1999; prior thereto, and Oppenheimer Convertible
President and Chief Executive Securities Fund since 1992.
Officer, AMA Investment
Advisors, an affiliate of the
American Medical Association.
- ------------------------------------------------------------------------------------------------------------------------------------
Faith Colish (68) Trustee since Counsel, Carter Ledyard & 37 Director, American Bar Retirement
1984 Milburn LLP (law firm) since Association (ABRA) since 1997
October 2002; Formerly, (not-for-profit membership
Attorney-at-Law and President, association).
Faith Colish, A Professional
Corporation, 1980 to 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Walter G. Ehlers (70) Trustee since Consultant; Retired President 37 None
1989 and Trustee, Teachers Insurance
& Annuity (TIAA) and College
Retirement Equities Fund
(CREF).
- ------------------------------------------------------------------------------------------------------------------------------------
C. Anne Harvey (66) Trustee since Consultant, C. A. Harvey 37 Formerly, Member, Individual
1998 Associates, since June 2001; Investors Advisory Committee to the
Formerly, Director, AARP, 1978 New York Stock Exchange Board of
to December 2001. Directors, 1998 to June 2002;
President, Board of Associates to
The National Rehabilitation
Hospital's Board of Directors, 2002;
Member, American Savings
Education Council's Policy Board
(ASEC), 1998-2000; Member,
Executive Committee, Crime
Prevention Coalition of America,
1997-2000.
- ------------------------------------------------------------------------------------------------------------------------------------
18
Trustees and Officers (Unaudited) cont'd
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Barry Hirsch (70) Trustee since Attorney-at-Law. Senior 37 None.
2000 Counsel, Loews Corporation
(diversified financial corporation)
May 2002 until April 2003; prior
thereto, Senior Vice President,
Secretary and General Counsel,
Loews Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
Robert A. Kavesh (76) Trustee since Marcus Nadler Professor of 37 Director, DEL Laboratories, Inc.
2000 Finance and Economics (cosmetics and pharmaceuticals)
Emeritus, New York University, since 1978; The Caring Community
Stern School of Business. (not-for-profit).
- ------------------------------------------------------------------------------------------------------------------------------------
Howard A. Mileaf (67) Trustee since Retired. Formerly, Vice 37 Director, WHX Corporation
1999 President and Special Counsel, (holding company) since August
WHX Corporation (holding 2002; Director, WebFinancial
company), 1993-2001. Corporation (holding company)
since December 2002; Director, State
Theatre of New Jersey (not-for-
profit theater), since 2000; Formerly
Director, Kevlin Corporation
(manufacturer of microwave and
other products).
- ------------------------------------------------------------------------------------------------------------------------------------
John P. Rosenthal (71) Trustee since Senior Vice President, Burnham 37 Director, 92nd Street Y (non-profit),
2000 Securities Inc. (a registered since 1967; Formerly, Director,
broker-dealer) since 1991. Cancer Treatment Holdings, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
William E. Rulon (71) Trustee since Retired. Senior Vice President, 37 Director, Pro-Kids Golf and
2000 Foodmaker, Inc. (operator and Learning Academy (teach golf and
franchiser of restaurants) until computer usage to "at risk" children),
January 1997. since 1998; Director, Prandium, Inc.
(restaurants) from March 2001 until
July 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Cornelius T. Ryan (72) Trustee since Founding General Partner, 37 Director, Capital Cash Management
2000 Oxford Partners and Oxford Trust (money market fund),
Bioscience Partners (venture Narragansett Insured Tax-Free
capital partnerships) and Income Fund, Rocky Mountain
President, Oxford Venture Equity Fund, Prime Cash Fund,
Corporation. several private companies and
QuadraMed Corporation
(NASDAQ).
- ------------------------------------------------------------------------------------------------------------------------------------
19
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Tom Decker Seip (53) Trustee since General Partner, Seip 37 Director, H&R Block, Inc. (financial
2000 Investments LP (a private services company) since May 2001;
investment partnership); Formerly, Director, General Magic
President and CEO, Westaff, (voice recognition software), 2001-
Inc. (temporary staffing), May 2002; Director, Forward
2001 to January 2002; Senior Management, Inc. (asset
Executive at the Charles management) since 2001; Formerly,
Schwab Corporation from 1983 Director, E-Finance Corporation
to 1999, including Chief (credit decisioning services), 1999-
Executive Officer, Charles 2003; Director, Save-Daily.com
Schwab Investment (micro investing services), 1999-
Management, Inc. and Trustee, 2003; Director, Offroad Capital Inc.
Schwab Family of Funds and (pre-public internet commerce
Schwab Investments from 1997 company).
to 1998 and Executive Vice
President-Retail Brokerage,
Charles Schwab Investment
Management from 1994 to
1997.
- ------------------------------------------------------------------------------------------------------------------------------------
Candace L. Straight (56) Trustee since Private investor and consultant 37 Director, Providence Washington
1999 specializing in the insurance (property and casualty insurance
industry; Formerly, Advisory company), since December 1998;
Director, Securitas Capital LLC Director, Summit Global Partners
(a global private equity (insurance brokerage firm) since
investment firm dedicated to October 2000.
making investments in the
insurance sector), 1998 until
December 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Peter P. Trapp (59) Trustee since Regional Manager for Atlanta 37 None.
1984 Region, Ford Motor Credit
Company since August 1997;
prior thereto, President, Ford
Life Insurance Company, April
1995 until August 1997.
- ------------------------------------------------------------------------------------------------------------------------------------
20
Trustees and Officers (Unaudited) cont'd
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Edward I. O'Brien* (75) Trustee since Formerly, Member, Investment 37 Director, Legg Mason, Inc. (financial
2000 Policy Committee, Edward services holding company), since
Jones, 1993-2001; President, 1993; Director, Boston Financial
Securities Industry Association Group (real estate and tax shelters)
("SIA") (securities industry's 1993-1999.
representative in government
relations and regulatory matters
at the federal and state levels)
1974-1992; Adviser to SIA,
November 1992-November
1993.
- ------------------------------------------------------------------------------------------------------------------------------------
Jack L. Rivkin* (63) President and Executive Vice President, 37 Director, Dale Carnegie and
Trustee since Neuberger Berman Inc. Associates, Inc. (private company)
December (holding company) since 2002; since 1998; Director, Emagin Corp.
2002 Executive Vice President and (public company) since 1997;
Chief Investment Officer, Director, Solbright, Inc. (private
Neuberger Berman since 2002 company) since 1998; Director,
and 2003, respectively; Head of Infogate, Inc. (private company)
Research and Research Sales since 1997.
and Trading Departments of
Neuberger Berman since 2002;
Director and Chairman, NB
Management since December
2002; Formerly, Executive Vice
President, Citigroup
Investments, Inc. from
September 1995 to February
2002; Executive Vice President,
Citigroup Inc. from September
1995 to February 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
21
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Peter E. Sundman* (44) Chairman of Executive Vice President, 37 Executive Vice President, Neuberger
the Board, Neuberger Berman since 1999; Berman Inc. (holding company)
Chief Formerly, Principal, Neuberger since 1999 and Formerly, Director
Executive Berman from 1997 until 1999; from October 1999 through March
Officer and Senior Vice President, NB 2003; President and Director, NB
Trustee since Management from 1996 until Management since 1999; Head of
2000; 1999. Neuberger Berman Inc.'s Mutual
President and Funds and Institutional Business
Chief since 1999; Director and Vice
Executive President, Neuberger & Berman
Officer from Agency, Inc. since 2000; Trustee,
1998 to 2000 Frost Valley YMCA.
- ------------------------------------------------------------------------------------------------------------------------------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the Trust's Trust Instrument, each Trustee shall hold office for
life or until his or her successor is elected or the Trust terminates;
except that (a) any Trustee may resign by delivering a written resignation;
(b) any Trustee may be removed with or without cause at any time by a
written instrument signed by at least two-thirds of the other Trustees; (c)
any Trustee who requests to be retired, or who has become unable to serve,
may be retired by a written instrument signed by a majority of the other
Trustees; and (d) any Trustee may be removed at any shareholder meeting by a
vote of at least two-thirds of the outstanding shares.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
* Indicates a Trustee who is an "interested person" within the meaning of the
1940 Act. Mr. Sundman and Mr. Rivkin are interested persons of the Trust by
virtue of the fact that they are officers and/or directors of NB Management
and Executive Vice Presidents of Neuberger Berman. Mr. O'Brien is an
interested person of the Trust by virtue of the fact that he is a director
of Legg Mason, Inc., a wholly owned subsidiary of which, from time to time,
serves as a broker or dealer to the Funds and other funds for which NB
Management serves as investment manager.
22
Trustees and Officers (Unaudited) cont'd
Information about the Officers of the Trust
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
- -------------------------------------------------------------------------------------------------------------------------
Claudia A. Brandon (47) Secretary since 1985 Vice President, Neuberger Berman since 2002 and
employee since 1999; Vice President-Mutual Fund Board
Relations, NB Management since 2000; Vice President,
NB Management from 1986 to 1999; Secretary,
ten registered investment companies for which
NB Management acts as investment manager and
administrator (four since 2002 and three since 2003).
Robert Conti (47) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President, Neuberger Berman from 1999 until 2003;
Senior Vice President, NB Management since 2000;
Controller, NB Management until 1996; Treasurer,
NB Management from 1996 until 1999; Vice President,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (three since 2000, four since 2002 and
three since 2003).
Brian P. Gaffney (50) Vice President since 2000 Managing Director, Neuberger Berman since 1999;
Senior Vice President, NB Management since 2000;
Vice President, NB Management from 1997 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Sheila R. James (38) Assistant Secretary since 2002 Employee, Neuberger Berman since 1999; Employee,
NB Management from 1991 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
Kevin Lyons (48) Assistant Secretary since Employee, Neuberger Berman since 1999; Employee,
March 2003 NB Management from 1993 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (since 2003).
John M. McGovern (33) Assistant Treasurer since 2002 Employee, NB Management since 1993; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
23
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
- -----------------------------------------------------------------------------------------------------------------------------
Barbara Muinos (45) Treasurer and Principal Financial Vice President, Neuberger Berman since 1999; Assistant
and Accounting Officer since 2002; Vice President, NB Management from 1993 to 1999;
prior thereto, Assistant Treasurer Treasurer and Principal Financial and Accounting
since 1996 Officer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003);
Assistant Treasurer of three registered investment
companies for which NB Management acts as investment
manager and administrator from 1996 until 2002.
Frederic B. Soule (57) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President; Neuberger Berman from 1999 until 2003;
Vice President, NB Management from 1995 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Trani Jo Wyman (34) Assistant Treasurer since 2002 Employee, NB Management since 1991; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
- -------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the By-Laws of the Trust, each officer elected by the Trustees
shall hold office until his or her successor shall have been elected and
qualified or until his or her earlier death, inability to serve, or
resignation. Officers serve at the pleasure of the Trustees and may be
removed at any time with or without cause.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
24
Report of Votes of Shareholders (Unaudited)
A special meeting of shareholders of Neuberger Berman Advisers Management Trust
Mid-Cap Growth Portfolio (the "Fund") was held on September 23, 2003. Upon
completion of the acquisition of Neuberger Berman Inc. by Lehman Brothers
Holdings Inc. (the "Transaction"), the management agreement between the Trust,
on behalf of the Fund, and Neuberger Berman Management Inc. ("NB Management"),
and the sub-advisory agreement with respect to the Trust and each Fund, between
NB Management and Neuberger Berman, LLC automatically terminated. To provide
for continuity of management, the shareholders of the Fund voted on the
following matters, which became effective upon completion of the Transaction on
October 31, 2003:
Proposal 1-To Approve a New Management Agreement between the Trust, on behalf
of the Fund, and NB Management
Votes For Votes Against Abstentions*
25,792,430.266 744,229.244 1,932,532.508
Proposal 2-To Approve a New Sub-Advisory Agreement with respect to the Trust
and each Fund, between NB Management and Neuberger Berman, LLC
Votes For Votes Against Abstentions*
25,672,818.500 796,968.458 1,999,405.060
* Abstentions were counted as shares that were present and entitled to vote
for purposes of determining a quorum and had a negative effect on the
proposals.
25
______________________________________________________________________________
Annual Report
December 31, 2003
B1010 02/04
[LOGO]
Neuberger Berman
Advisers
Management
Trust
Partners
Portfolio(R)
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Partners Portfolio Manager's Commentary
We are pleased to report that the AMT Partners Portfolio participated fully in
the stock market rally of 2003, outperforming its benchmarks, the Russell 1000
Value Index and the S&P 500 Index.(2)
The year began in a gloomy mood, but by the end of the first half of the year,
the economic outlook had brightened and stocks had rallied strongly from their
mid-March lows. However, there was still a great deal of skepticism regarding
the future. Economists were worried that the weak labor market would negatively
impact the consumer, and that any increases in business investment and capital
spending would not be sufficient to compensate for a decline in consumer
spending.
In our mid-year report, we cited historically low interest rates, rising
personal income, and tax relief to support our prediction that consumer
spending would remain strong for the balance of the year and into 2004. We also
pointed out that increased merger and acquisition activity indicated that
corporate America was once again ready to spend for growth. Our conclusion was,
"Looking ahead, we are quite optimistic regarding the economy and stock
market." Indeed, consumer spending remained strong, and in the second half of
2003, business investment began contributing to economic growth. Equities
investors responded enthusiastically to this good economic news and the leading
market indices all closed the year with positive returns.
Our portfolio had positive returns in all eight of the sectors in which it was
invested. Our significant overweighting in the consumer discretionary,
industrials, and information technology sectors deserves some credit for
superior returns, but stock selection was responsible for approximately 65% of
the portfolio's relative performance advantage versus the Russell 1000 Value
Index.
Four of our top ten performers this year (retailers Best Buy and Home Depot,
and homebuilders Centex and Lennar) came from the consumer discretionary
sector. Highlighted by the exceptional performance of Laboratory Corp. of
America, our healthcare sector investments excelled, more than doubling the
return from the benchmark component. Financial services sector holdings, most
notably J.P. Morgan Chase, Citigroup and American Express, also contributed to
- --------------------------------------------------------------------------------
Average Annual Total Return(1)
Partners Portfolio Russell 1000[RegTM] Value(2) S&P 500(2)
1 Year 35.09% 30.03% 28.67%
5 Year 1.49% 3.56% (0.57%)
Life of Fund 10.01% 11.98% 11.21%
- ------------------------------------------------------------------------------------------------------
Inception Date 03/22/1994
Comparison of a $10,000 Investment
Partners Russell 1000(R) S&P 500
Portfolio Value
- ------------------------------------------------------------------
3/22/1994 $ 10,000 $ 10,000 $ 10,000
12/31/1994 $ 9,770 $ 9,656 $ 10,036
12/31/1995 $ 13,333 $ 13,360 $ 13,803
12/31/1996 $ 17,276 $ 16,251 $ 16,970
12/31/1997 $ 22,674 $ 21,969 $ 22,630
12/31/1998 $ 23,629 $ 25,403 $ 29,097
12/31/1999 $ 25,370 $ 27,269 $ 35,218
12/31/2000 $ 25,548 $ 29,182 $ 32,013
12/31/2001 $ 24,826 $ 27,551 $ 28,211
12/31/2002 $ 18,833 $ 23,274 $ 21,978
12/31/2003 $ 25,440 $ 30,263 $ 28,279
Value as of 12/31/03
Partners Portfolio $ 25,440
Russell 1000 Value $ 30,263
S&P 500 $ 28,279
This chart shows the value of a hypothetical $10,000 investment in the Fund over
the past 10 fiscal years, or since the Fund's inception, if it has not operated
for 10 years. The results are compared with benchmarks, which may include a
broad-based market index and or a narrower index. Please note that market
indexes do not include expenses. All results include the reinvestment of
dividends and capital gain distributions. Results represent past performance and
do not indicate future results.
2
returns. Although our technology sector investments underperformed the Russell
1000 Value Index component, our significant overweighting in tech enhanced
relative returns. Energy and consumer staples sector investments disappointed.
We were underweighted in both these underperforming groups versus the Russell
1000 Value Index, but our holdings lagged their respective benchmark components.
Looking to 2004, we continue to feel constructive about the economy. We do not
buy into the theory that the still weak labor market will undermine consumer
spending. Employment is a lagging indicator and we believe job growth will
accelerate in the year ahead. Although the refinancing boom is over, its
benefits (lower mortgage interest costs and stronger household balance sheets)
persist. Also, consumers will be getting another small windfall around tax time.
Finally, personal income is growing, interest rates remain low, and good deals
for the consumer abound.
Although business investment and capital spending may not trend significantly
higher until the second half, we believe increased corporate spending will have
a very positive impact on the economy in late 2004 and into 2005. Also, with
the Japanese economy finally rebounding and Europe slowly coming out of the
doldrums, we could see synchronized global growth in 2005.
After the stock market's surprisingly strong performance in 2003, conventional
wisdom is that returns will be much more modest in 2004. We think stocks could
surprise on the upside again. Recent years' cost cutting and productivity gains
have created enormous earnings leverage that we believe could translate into
much better than expected earnings gains in the year ahead.
We started the new year with our largest overweightings versus the Russell 1000
Value Index in the consumer discretionary, industrials, healthcare, and
technology sectors. We expect consumer discretionary companies in businesses
such as retailing, travel, auto and auto parts manufacturing, and homebuilding
to lead the market in the first half of 2004 and then hand off growth to
industrials in the second half. If the economy and corporate earnings are as
strong as we anticipate, we believe the Federal Reserve will tighten in the
second half, making less economically sensitive sectors like healthcare and
financials (still two of our larger sector weightings) more appealing to
investors. Valuations in these sectors are especially compelling, with some of
the very best companies in their respective businesses trading at well below
market average price/earnings multiples.
Although in general, we believe stocks are still reasonably priced, there are
market sectors and individual stocks that have gotten well ahead of near-term
fundamentals. So, stock selection will likely be much more critical to returns
than in last year's "rising tide lifts all boats" market. Our challenge is to
continue to be able to identify high quality fundamental bargains that are
mispriced by the market due to short term issues.
Sincerely,
/s/ S. Basu Mullick
S. BASU MULLICK
PORTFOLIO MANAGER
3
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
1. 35.09%, 1.49% and 10.01% were the average annual total returns for the
1-year, 5-year and since inception (03/22/94) periods ended December 31, 2003.
Neuberger Berman Management Inc. ("NBMI") has agreed to absorb certain expenses
of the AMT Portfolios. Without this arrangement, which is subject to change, the
total returns of the Portfolios would be less. Total return includes
reinvestment of dividends and capital gain distributions. Performance data
quoted represent past performance and the investment return and principal value
of an investment will fluctuate so that the shares, when redeemed, may be worth
more or less than original cost. The performance information does not reflect
fees and expenses of the insurance companies.
2. The S&P 500 Index is widely regarded as the standard for measuring large-cap
U.S. stock market performance and includes a representative sample of leading
companies in leading industries. The Russell 1000[RegTM] Index measures the
performance of the 1,000 largest companies in the Russell 3000[RegTM] Index
(which measures the performance of the 3,000 largest U.S. companies based on
total market capitalization). The Russell 1000 Index represents approximately
92% of the total market capitalization of the Russell 3000 Index. The Russell
1000 Value Index measures the performance of those Russell 1000 companies with
lower price-to-book ratios and lower forecasted growth values. 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 these indices are prepared
or obtained by NBMI and include reinvestment of all dividends and capital gain
distributions. The Portfolio may invest in many securities not included in the
above-described indices.
The investments for the Portfolio are managed by the same portfolio manager(s)
who manage one or more other mutual funds that have similar names, investment
objectives and investment styles as the Portfolio. You should be aware that the
Portfolio is likely to differ from the other mutual funds in size, cash flow
pattern and tax matters. Accordingly, the holdings and performance of the
Portfolio can be expected to vary from those of the other mutual funds.
The composition, industries and holdings of the Portfolio are subject to change.
Shares of the separate Portfolios of Neuberger Berman Advisers Management Trust
are sold only through the currently effective prospectus and are not available
to the general public. Shares of this Portfolio may be purchased only by life
insurance companies to be used with their separate accounts that fund variable
annuity and variable life insurance policies and by qualified pension and
retirement plans.
(C) 2004 Neuberger Berman Management Inc., distributor. All rights reserved.
4
Schedule of Investments Partners Portfolio
Number of Shares Market Value+
Common Stocks (98.2%)
Advertising (1.4%)
107,000 Omnicom Group $ 9,344,310
Auto Related (1.7%)
169,800 Harley-Davidson 8,070,594\P
71,900 Navistar International 3,443,291*
-----------
11,513,885
Auto/Truck Replacement Parts (0.9%)
71,100 Advanced Auto Parts 5,787,540*
Banking & Financial (7.3%)
498,900 BISYS Group 7,423,632*
128,400 Fannie Mae 9,637,704
117,800 Fifth Third Bancorp 6,961,980
216,700 Merrill Lynch 12,709,455
230,900 State Street 12,025,272
-----------
48,758,043
Broadcasting (1.1%)
150,700 Clear Channel
Communications 7,057,281
Building, Construction & Furnishing (7.0%)
128,200 Centex Corp. 13,800,730
275,200 Home Depot 9,766,848
128,100 Lennar Corp. 12,297,600
23,800 NVR, Inc. 11,090,800*
-----------
46,955,978
Building Materials (1.0%)
69,500 American Standard 6,998,650*
Capital Goods (1.3%)
151,900 SPX Corp. 8,933,239*
Communications (1.0%)
291,400 Cablevision Systems 6,815,846*\P
Communication Services (0.3%)
72,200 Scientific-Atlanta 1,971,060
Consumer Cyclicals (5.5%)
178,500 Best Buy 9,324,840
113,000 Black & Decker 5,573,160
180,700 Carnival Corp. 7,179,211
165,700 Costco Wholesale 6,160,726*
262,700 Masco Corp. 7,200,607
58,700 Sabre Holdings 1,267,333
-----------
36,705,877
Consumer Goods & Services (2.4%)
519,200 Cendant Corp. 11,562,584*
178,400 Fairmont Hotels & Resorts 4,841,776
-----------
16,404,360
Consumer Staples (3.5%)
951,464 Liberty Media 11,312,907*
266,000 Viacom Inc. Class B 11,805,080
-----------
23,117,987
Defense (1.6%)
209,700 L-3 Communications
Holdings 10,770,192*
Number of Shares Market Value+
Diversified (0.7%)
992,800 ABB Ltd. $ 5,031,000*
Energy (2.0%)
189,800 Cooper Cameron 8,844,680*
78,700 Talisman Energy 4,454,420
------------
13,299,100
Finance (0.7%)
49,900 Goldman Sachs 4,926,627
Financial Services (18.5%)
235,700 American Express 11,367,811
5,800 Berkshire Hathaway Class B 16,327,000*
347,000 Citigroup Inc. 16,843,380
388,600 Concord EFS 5,766,824*
156,933 Countrywide Credit
Industries 11,903,393
291,600 General Electric 9,033,768
110,500 H & R Block 6,118,385\P
410,100 J.P. Morgan Chase 15,062,973\P
154,600 Lehman Brothers Holdings 11,938,212++
280,500 PMI Group 10,443,015
115,996 XL Capital 8,995,490
------------
123,800,251
Food & Beverage (1.4%)
202,100 PepsiCo, Inc. 9,421,902
Forest Products & Paper (1.1%)
113,400 Weyerhaeuser Co. 7,257,600\P
Health Care (8.7%)
78,500 Anthem, Inc. 5,887,500*\P
222,400 Boston Scientific 8,175,424*
304,400 Caremark Rx 7,710,452*\P
325,100 Laboratory Corp. of
America Holdings 12,012,445*
217,700 McKesson HBOC 7,001,232
82,200 Wellpoint Health Networks 7,972,578*
225,500 Wyeth 9,572,475
------------
58,332,106
Health Products & Services (1.0%)
119,500 Universal Health Services
Class B 6,419,540
Insurance (4.5%)
150,600 Aetna Inc. 10,177,548\P
192,000 American International
Group 12,725,760
145,100 Marsh & McLennan 6,948,839
------------
29,852,147
Internet (0.6%)
221,200 Check Point Software
Technologies 3,720,584*
Machinery & Equipment (1.0%)
116,000 Nucor Corp. 6,496,000
Metals (0.7%)
119,100 Freeport-McMoRan Copper
& Gold 5,017,683
See Notes to Schedule of Investments 5
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Schedule of Investments Partners Portfolio cont'd
Number of Shares
Market Value+
Oil & Gas (2.6%)
136,300 EOG Resources $ 6,292,971
242,500 FMC Technologies 5,650,250*
132,600 Smith International 5,505,552*
------------
17,448,773
Pharmaceutical (5.2%)
102,100 AmerisourceBergen Corp. 5,732,915
495,000 King Pharmaceuticals 7,553,700*
328,300 Pfizer Inc. 11,598,839
336,900 Shire Pharmaceuticals
Group ADR 9,786,945*
------------
34,672,399
Retail (0.8%)
226,600 Abercrombie & Fitch 5,599,286*
Semiconductors (0.4%)
268,900 Taiwan Semiconductor
Manufacturing ADR 2,753,536*
Software (1.7%)
227,100 Microsoft Corp. 6,254,334
236,300 PeopleSoft, Inc. 5,387,640*
------------
11,641,974
Technology (8.6%)
235,900 Computer Sciences 10,433,857*\P
1,043,800 Compuware Corp. 6,304,552*
126,300 IBM 11,705,484
329,200 InterActiveCorp 11,169,756*\P
103,500 Lexmark International
Group 8,139,240*
564,700 Nokia Corp. ADR 9,599,900
------------
57,352,789
Transportation (2.0%)
126,000 Frontline Ltd. 3,260,576
173,200 Teekay Shipping 9,877,596
------------
13,138,172
Total Common Stocks
(Cost $519,727,758) 657,315,717
------------
Principal Amount Market Value+
Short-Term Investments (6.5%)
$29,135,300 N&B Securities Lending
Quality Fund, LLC $ 29,135,300++
14,346,455 Neuberger Berman
Institutional Cash Fund
Trust Class 14,346,455@
------------
Total Short-Term Investments
(Cost $43,481,755) 43,481,755#
------------
Total Investments (104.7%)
(Cost $563,209,513) 700,797,472##
Liabilities, less cash, receivables
and other assets [(4.7%)] (31,158,119)
------------
Total Net Assets (100.0%) $669,639,353
------------
See Notes to Schedule of Investments 6
Notes to Schedule of Investments Partners Portfolio
+ Investment securities of the Fund are valued at the latest sales price
where that price is readily available; securities for which no sales were
reported, unless otherwise noted, are valued at the mean between the
closing bid and asked prices. Securities traded primarily on the NASDAQ
Stock Market are normally valued by the Fund at the NASDAQ Official Closing
Price ("NOCP") provided by NASDAQ each business day. The NOCP is the most
recently reported price as of 4:00:02 p.m., Eastern time, unless that price
is outside the range of the "inside" bid and asked prices (i.e., the bid
and asked prices that dealers quote to each other when trading for their
own accounts); in that case, NASDAQ will adjust the price to equal the
inside bid or asked price, whichever is closer. Because of delays in
reporting trades, the NOCP may not be based on the price of the last trade
to occur before the market closes. The Fund values all other securities by
a method the Board of Trustees of Neuberger Berman Advisers Management
Trust believes accurately reflects fair value. Numerous factors may be
considered when determining the fair value of a security, including
available analyst, media or other reports, trading in futures or ADRs and
whether the issuer of the security being fair valued has other securities
outstanding. 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.
# At cost, which approximates market value.
## At December 31, 2003, the cost of investments for U.S. Federal income tax
purposes was $567,541,320. Gross unrealized appreciation of investments was
$136,652,963 and gross unrealized depreciation of investments was
$3,396,811, resulting in net unrealized appreciation of $133,256,152, based
on cost for U.S. Federal income tax purposes.
* Non-income producing security.
\P All or a portion of this security is on loan (see Note A of Notes to
Financial Statements).
@ Neuberger Berman Institutional Cash Fund is also managed by Neuberger
Berman Management Inc. (see Note A of Notes to Financial Statements).
++ Affiliated issuer (see Note A of Notes to Financial Statements).
See Notes to Financial Statements 7
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Assets and Liabilities
Partners
Neuberger Berman Advisers Management Trust Portfolio
Assets
Investments in securities, at market value*+ (Note A)-see Schedule of Investments:
====================================================================================================
Unaffiliated issuers $ 645,377,505
- ----------------------------------------------------------------------------------------------------
Non-controlled affiliated issuers 55,419,967
====================================================================================================
700,797,472
- ----------------------------------------------------------------------------------------------------
Dividends and interest receivable 398,776
====================================================================================================
Receivable for Fund shares sold 71,967
- ----------------------------------------------------------------------------------------------------
Prepaid expenses and other assets 22,336
====================================================================================================
Total Assets 701,290,551
====================================================================================================
Liabilities
Payable for collateral on securities loaned (Note A) 29,135,300
====================================================================================================
Payable for securities purchased 1,014,994
- ----------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 823,868
====================================================================================================
Payable to investment manager (Note B) 283,860
- ----------------------------------------------------------------------------------------------------
Payable to administrator (Note B) 161,738
====================================================================================================
Accrued expenses and other payables 231,438
====================================================================================================
Total Liabilities 31,651,198
====================================================================================================
Net Assets at value $ 669,639,353
====================================================================================================
Net Assets consist of:
Paid-in capital $ 638,402,379
====================================================================================================
Undistributed (distributions in excess of) net investment income 59,567
- ----------------------------------------------------------------------------------------------------
Accumulated net realized gains (losses) on investments (106,410,653)
====================================================================================================
Net unrealized appreciation (depreciation) in value of investments 137,588,060
====================================================================================================
Net Assets at value $ 669,639,353
====================================================================================================
Shares Outstanding ($.001 par value; unlimited shares authorized) 43,471,605
====================================================================================================
Net Asset Value, offering and redemption price per share $ 15.40
====================================================================================================
+Securities of unaffiliated issuers on loan, at market value $ 28,118,814
====================================================================================================
*Cost of investments:
Unaffiliated issuers $ 510,533,257
- ----------------------------------------------------------------------------------------------------
Non-controlled affiliated issuers 52,676,256
====================================================================================================
Total cost of investments $ 563,209,513
====================================================================================================
See Notes to Financial Statements 8
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST FOR THE YEAR ENDED DECEMBER 31, 2003
Statement of Operations
Partners
Neuberger Berman Advisers Management Trust Portfolio
Investment Income
Income:
Dividend income-unaffiliated issuers $ 5,088,826
========================================================================================================
Dividend income-non-controlled affiliated issuers 71,796
- --------------------------------------------------------------------------------------------------------
Income from investments in affiliated issuers (Note A) 110,840
========================================================================================================
Income from securities loaned-net (Note A) 119,227
- --------------------------------------------------------------------------------------------------------
Foreign taxes withheld (Note A) (17,224)
========================================================================================================
Total income 5,373,465
========================================================================================================
Expenses:
Investment management fee (Notes A & B) 3,140,431
========================================================================================================
Administration fee (Note B) 1,771,759
- --------------------------------------------------------------------------------------------------------
Audit fees 36,475
========================================================================================================
Custodian fees (Note B) 159,552
- --------------------------------------------------------------------------------------------------------
Insurance expense 14,092
========================================================================================================
Legal fees 84,963
- --------------------------------------------------------------------------------------------------------
Shareholder reports 102,741
========================================================================================================
Trustees' fees and expenses 29,520
- --------------------------------------------------------------------------------------------------------
Miscellaneous 20,696
========================================================================================================
Total expenses 5,360,229
Investment management fee waived (Note A) (12,688)
Expenses reduced by custodian fee expense offset and commission recapture arrangements (33,624)
(Note B)
========================================================================================================
Total net expenses 5,313,917
========================================================================================================
Net investment income (loss) 59,548
========================================================================================================
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investment securities sold (8,891,356)
========================================================================================================
Net realized gain (loss) on foreign currency (Note A) 19
========================================================================================================
Change in net unrealized appreciation (depreciation) in value of:
Investment securities (Note A) 186,593,158
- --------------------------------------------------------------------------------------------------------
Foreign currency (Note A) 101
========================================================================================================
Net gain (loss) on investments 177,701,922
========================================================================================================
Net increase (decrease) in net assets resulting from operations $177,761,470
========================================================================================================
See Notes to Financial Statements 9
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Changes in Net Assets
Partners Portfolio
----------------------------------
Neuberger Berman Advisers Management Trust Year Ended December 31,
2003 2002
Increase (Decrease) in Net Assets:
From Operations:
Net investment income (loss) $ 59,548 $ 315,258
=====================================================================================================================
Net realized gain (loss) on investments (8,891,337) (67,079,570)
- ---------------------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of investments 186,593,259 (120,966,611)
=====================================================================================================================
Net increase (decrease) in net assets resulting from operations 177,761,470 (187,730,923)
=====================================================================================================================
Distributions to Shareholders From:
Net investment income -- (3,518,207)
=====================================================================================================================
Tax return of capital -- (169,184)
=====================================================================================================================
Total distributions to shareholders -- (3,687,391)
=====================================================================================================================
From Fund Share Transactions:
Proceeds from shares sold 253,815,477 285,008,522
=====================================================================================================================
Proceeds from reinvestment of dividends and distributions -- 3,687,391
- ---------------------------------------------------------------------------------------------------------------------
Payments for shares redeemed (284,495,806) (370,105,497)
=====================================================================================================================
Net increase (decrease) from Fund share transactions (30,680,329) (81,409,584)
=====================================================================================================================
Net Increase (Decrease) in Net Assets 147,081,141 (272,827,898)
Net Assets:
Beginning of year 522,558,212 795,386,110
=====================================================================================================================
End of year $ 669,639,353 $ 522,558,212
=====================================================================================================================
Undistributed (distributions in excess of) net investment income at end of year $ 59,567 $ --
=====================================================================================================================
Number of Fund Shares:
Sold 20,169,797 22,064,366
=====================================================================================================================
Issued on reinvestment of dividends and distributions -- 252,042
- ---------------------------------------------------------------------------------------------------------------------
Redeemed (22,548,108) (29,140,997)
=====================================================================================================================
Net increase (decrease) in shares outstanding (2,378,311) (6,824,589)
=====================================================================================================================
See Notes to Financial Statements 10
Notes to Financial Statements Partners Portfolio
Note A--Summary of Significant Accounting Policies:
1 General: Partners Portfolio (the "Fund") is a separate operating series of
Neuberger Berman Advisers Management Trust (the "Trust"), a Delaware statutory
trust organized pursuant to a Trust Instrument dated May 23, 1994. The Trust is
currently comprised of ten separate operating series (each a "Series,"
collectively, the "Funds") each of which (except Focus Portfolio) is
diversified. The Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended, and its shares are
registered under the Securities Act of 1933, as amended. The Fund currently
offers only Class I shares. The Trustees of the Trust may establish additional
series or classes of shares without the approval of shareholders.
The assets of each Series of the Trust belong only to that Series, and the
liabilities of each Series are borne solely by that Series and no other.
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States requires Neuberger Berman Management
Inc. ("Management") to make estimates and assumptions at the date of the
financial statements. Actual results could differ from those estimates.
2 Portfolio valuation: Investment securities are valued as indicated in the
notes following the Schedule of Investments.
3 Foreign currency translation: The accounting records of the Fund 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. Net unrealized foreign currency gain (loss) arises from changes in
the value of assets and liabilities, other than investments in securities, as a
result of changes in exchange rates and are stated separately in the Statement
of Operations.
4 Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the ex-dividend
date or, for certain foreign dividends, as soon as the Fund becomes aware of the
dividends. Non-cash dividends included in dividend income, if any, are recorded
at the fair market value of the securities received. Interest income, including
accretion of original issue discount, where applicable, and accretion of
discount on short-term investments, 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 and stated separately in the
Statement of Operations. Included in net realized gain (loss) on investment
securities sold are proceeds from the settlement of class action litigations in
which the Fund participated as a plaintiff. The amount of such proceeds for the
year ended December 31, 2003 was $391,888.
5 Federal income taxes: The Funds are treated as separate entities 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
11
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
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.
6 Dividends and distributions to shareholders: The Fund may earn income, net of
expenses, daily on its investments. Income dividends and distributions from net
realized capital gains, if any, generally are distributed in October. Income
dividends and capital gain distributions to shareholders are recorded on the
ex-dividend date. To the extent the Fund's net realized capital gains, if any,
can be offset by capital loss carryforwards ($9,141,747, $72,177,018 and
$20,760,081 expiring in 2009, 2010 and 2011, respectively, determined as of
December 31, 2003), it is the policy of the Fund not to distribute such gains.
The Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a tax 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 in the components of net assets on the Statement of Assets and
Liabilities.
The tax character of distributions paid during the years ended December 31, 2003
and 2002 were as follows:
Distributions Paid From:
Long-Term Tax Return
Ordinary Income Capital Gain of Capital Total
2003 2002 2003 2002 2003 2002 2003 2002
$ - $3,518,207 $ - $ - $ - $169,184 $ - $3,687,391
As of December 31, 2003, the components of distributable earnings (accumulated
losses) on a U.S. Federal income tax basis were as follows:
Undistributed Unrealized Loss
Ordinary Appreciation Carryforwards
Income (Depreciation) and Deferrals Total
$59,567 $133,256,253 $(102,078,846) $31,236,974
The difference between book basis and tax basis is attributable primarily to the
tax deferral of losses on wash sales.
7 Foreign taxes: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
8 Expense allocation: Expenses directly attributable to a Series are charged to
that Series. Expenses of the Trust that are not directly attributed to a Series
are allocated among the Funds, on the basis of relative net assets, except where
a more appropriate allocation of expenses to each of the Funds can otherwise be
made fairly. Expenses borne by the complex of related investment companies,
which includes open-end and closed-end investment companies for which Management
serves as investment adviser, that are not directly attributed to a Series or
the Trust, are allocated among the Funds and the other investment companies in
the complex or series thereof, on the basis of relative net assets, except where
a more
12
Notes to Financial Statements Partners Portfolio cont'd
appropriate allocation of expenses to each investment company in the complex or
series thereof can otherwise be made fairly.
9 Security lending: Pursuant to an Exemptive Order issued by the Securities and
Exchange Commission, the Fund entered into a Securities Lending Agreement
("Agreement") with Neuberger Berman, LLC ("Neuberger") on April 17, 2003.
Securities loans involve certain risks in the event a borrower should fail
financially, including delays or inability to recover the lent securities or
foreclose against the collateral. The investment manager, under the general
supervision of the Trust's Board of Trustees, monitors the creditworthiness of
the parties to whom the Fund makes security loans. The Fund will not lend
securities on which covered call options have been written, or lend securities
on terms which would prevent the Fund from qualifying as a regulated investment
company. The Fund receives cash collateral equal to at least 102% of the current
market value of the loaned securities. The Fund invests the cash collateral in
the N&B Securities Lending Quality Fund, LLC ("investment vehicle"), which is
managed by State Street Bank and Trust Company ("State Street") pursuant to
guidelines approved by the Trust's investment manager. Neuberger guarantees a
minimum revenue to the Fund under the Agreement, and receives a portion of any
revenue earned in excess of the guaranteed amount as a lending agency fee. At
December 31, 2003, the Fund had not paid Neuberger any fees under the Agreement.
Prior to April 17, 2003, the Fund had a Securities Lending Agreement with Morgan
Stanley & Co. Incorporated ("Morgan"). The Fund received cash collateral equal
to at least 100% of the current market value of the loaned securities. The Fund
invested the cash collateral in the investment vehicle. Income earned on the
investment vehicle was paid to Morgan monthly. The Fund received a fee, payable
monthly, negotiated by the Fund and Morgan, based on the number and duration of
the lending transactions.
Income earned on the securities loaned, if any, is reflected in the Statement of
Operations under the caption Income from securities loaned-net.
10 Transactions with other funds managed by Neuberger Berman Management Inc.:
Pursuant to an Exemptive Order issued by the Securities and Exchange Commission,
the Fund may invest in the Neuberger Berman Institutional Cash Fund (the "Cash
Fund"), a fund managed by Management and having the same officers and Trustees
as the Fund. The Cash Fund seeks to provide as high a level of current income as
is consistent with the preservation of capital and the maintenance of liquidity.
For any cash that the Fund invests in the Cash Fund, Management waives a portion
of its management fee equal to the management fee it receives from the Cash Fund
on those assets. For the year ended December 31, 2003, such waived fees amounted
to $12,688. For the year ended December 31, 2003, income earned on this
investment is reflected in the Statement of Operations under the caption Income
from investments in affiliated issuers.
13
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Note B--Management Fees, Administration Fees, Distribution Arrangements, and
Other Transactions With Affiliates:
Fund shares are issued and redeemed in connection with investments in and
payments under certain variable annuity contracts and variable life insurance
policies issued through separate accounts of life insurance companies and are
also offered directly to qualified pension and retirement plans.
The Fund retains Management as its investment manager under a Management
Agreement. For such investment management services, the Fund pays Management a
fee at the annual rate of 0.55% of the first $250 million of the Fund's average
daily net assets, 0.525% of the next $250 million, 0.50% of the next $250
million, 0.475% of the next $250 million, 0.45% of the next $500 million, 0.425%
of the next $2.5 billion, and 0.40% of average daily net assets in excess of $4
billion.
The Fund retains 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 0.30% of the Fund's average daily net
assets. Additionally, Management retains State Street as its sub-administrator
under a Sub-Administration Agreement. Management pays State Street a fee for all
services received under the agreement.
The Trustees of the Trust adopted a non-fee distribution plan for the Fund.
Management has contractually undertaken through December 31, 2006 to reimburse
the Fund for its operating expenses (excluding the fees payable to Management,
interest, taxes, brokerage commissions, extraordinary expenses, and transaction
costs) ("Operating Expenses") which exceed, in the aggregate, 1.00% per annum of
the Fund's average daily net assets (the "Expense Limitation"). For the year
ended December 31, 2003, no reimbursement to the Fund was required. The Fund has
agreed to repay Management through December 31, 2009 for its excess Operating
Expenses previously reimbursed by Management, so long as its annual Operating
Expenses during that period do not exceed its Expense Limitation, and the
repayment is made within three years after the year in which Management issued
the reimbursement. During the year ended December 31, 2003, there was no
reimbursement to Management under this agreement. At December 31, 2003, the Fund
has no contingent liability to Management under this agreement.
On October 31, 2003, Management and Neuberger, a member firm of the New York
Stock Exchange and sub-adviser to the Fund, became indirect wholly owned
subsidiaries of Lehman Brothers Holdings Inc. ("Lehman"), a publicly-owned
holding company (the "Transaction"). Upon completion of the Transaction, the
Trust's management and sub-advisory agreements automatically terminated. To
provide for continuity of management, the shareholders of the Fund voted on
September 23, 2003, to approve new management and sub-advisory agreements, which
took effect upon closing of the Transaction (see Report of Votes of
Shareholders). At December 31, 2003, the Fund owned shares of Lehman. Income
earned on these shares is reflected in the Statement of Operations under the
caption Dividend income-non controlled affiliated issuers. The Trust intends
that this position will be liquidated on or before April 30, 2004. Neuberger is
retained by Management to furnish it with investment recommendations and
research information without added cost to the Fund. Several individuals who are
officers and/or Trustees of the Trust are also employees of Neuberger and/or
Management.
14
Notes to Financial Statements Partners Portfolio cont'd
On July 1, 2003, the Fund entered into a commission recapture program, which
enables it to pay some of its operational expenses by recouping a portion of the
commissions it pays to a broker that is not a related party of the Fund.
Expenses paid through this program may include costs of custodial, transfer
agency or accounting services. The impact of this arrangement was a reduction of
$33,442.
The Fund 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 $182.
Note C--Securities Transactions:
During the year ended December 31, 2003, there were purchase and sale
transactions (excluding short-term securities) of $438,833,424 and $478,773,300,
respectively.
During the year ended December 31, 2003, brokerage commissions on securities
transactions amounted to $1,475,295, of which Neuberger received $735,587,
Lehman received $89,467, and other brokers received $650,241.
Note D--Line of Credit:
At December 31, 2003, the Fund was a participant in a single committed,
unsecured $150,000,000 ($200,000,000 prior to September 26, 2003) line of credit
with State Street, to be used only for temporary or emergency purposes. Interest
is charged on borrowings under this agreement at the overnight Federal Funds
Rate plus 0.50% per annum. A facility fee of 0.10% per annum of the available
line of credit is charged, of which the Fund has agreed to pay its pro rata
share, based on the ratio of its individual net assets to the net assets of all
participants at the time the fee is due and payable. The fee is paid quarterly
in arrears. No compensating balance is required. Other investment companies
managed by Management also participate in this line of credit on the same terms.
Because several investment companies participate, there is no assurance that the
Fund will have access to the entire $150,000,000 at any particular time. The
Fund had no loans outstanding pursuant to this line of credit at December 31,
2003, nor had the Fund utilized this line of credit at any time prior to that
date.
15
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Financial Highlights Partners Portfolio+
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements.++
Year Ended December 31,
-----------------------------------------------------
2003 2002 2001 2000 1999
Net Asset Value, Beginning of Year $11.40 $15.10 $16.17 $19.64 $18.93
------ ------ ------ ------ ------
Income From Investment Operations
Net Investment Income (Loss) .00 .01 .06 .07 .11
Net Gains or Losses on Securities (both realized and unrealized) 4.00 (3.64) (.50) (.20) 1.23
------ ------ ------ ------ ------
Total From Investment Operations 4.00 (3.63) (.44) (.13) 1.34
------ ------- ------ ------ ------
Less Distributions
From Net Investment Income -- (.07) (.06) (.15) (.23)
From Net Capital Gains -- -- (.57) (3.19) (.40)
------ ------ ------ ------ ------
Total Distributions -- (.07) (.63) (3.34) (.63)
------ ------ ------ ------ ------
Net Asset Value, End of Year $15.40 $11.40 $15.10 $16.17 $19.64
------ ------ ------ ------ ------
Total Return++ +35.09% -24.14% -2.83% +0.70% +7.37%
Ratios/Supplemental Data
Net Assets, End of Year (in millions) $669.6 $522.6 $795.4 $808.3 $989.5
Ratio of Gross Expenses to Average Net Assets# .91% .91% .87% .92% .87%
Ratio of Net Expenses to Average Net Assets[sec] .90% .91% .87% .92% .87%
Ratio of Net Investment Income (Loss) to Average Net Assets .01% .05% .43% .42% .57%
Portfolio Turnover Rate 76% 53% 74% 97% 112%
See Notes to Financial Highlights 16
Notes to Financial Highlights Partners Portfolio
+ The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of AMT Partners
Investment's income and expenses through April 30, 2000 under the prior
master/feeder fund structure.
++ 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. The total return
information shown does not reflect charges and other expenses that apply to
the separate account or the related insurance policies, and the inclusion
of these charges and other expenses would reduce the total return for all
fiscal periods shown.
# The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset and
commission recapture arrangements.
++ The per share amounts which are shown have been computed based on the
average number of shares outstanding during each fiscal period.
[sec] After waiver of a portion of the investment management fee. Had Management
not undertaken such action the annualized ratio of net expenses to average
daily net assets would have been:
Year Ended
December 31, 2003
0.90%
17
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Report of Ernst & Young LLP, Independent Auditors
To the Board of Trustees of
Neuberger Berman Advisers Management Trust and
Shareholders of Partners Portfolio
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Partners Portfolio, one of the series
constituting the Neuberger Berman Advisers Management Trust (the "Trust"), as of
December 31, 2003, 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 December 31, 2003, 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
Partners Portfolio of Neuberger Berman Advisers Management Trust at December 31,
2003, 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 its 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
February 6, 2004
18
Trustees and Officers (Unaudited)
The following tables set forth information concerning the trustees and officers
of the Trust. All persons named as trustees and officers also serve in similar
capacities for other funds administered or managed by NB Management and
Neuberger Berman. The Statement of Additional Information includes additional
information about fund trustees and is available upon request, without charge,
by calling (800) 877-9700.
Information about the Board of Trustees
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
John Cannon (73) Trustee since Consultant. Formerly, Chairman 37 Independent Trustee or Director of
2000 and Chief Investment Officer, three series of Oppenheimer Funds:
CDC Capital Management Limited Term New York Municipal
(registered investment adviser), Fund, Rochester Fund Municipals,
1993-January 1999; prior thereto, and Oppenheimer Convertible
President and Chief Executive Securities Fund since 1992.
Officer, AMA Investment
Advisors, an affiliate of the
American Medical Association.
Faith Colish (68) Trustee since Counsel, Carter Ledyard & 37 Director, American Bar Retirement
1984 Milburn LLP (law firm) since Association (ABRA) since 1997
October 2002; Formerly, (not-for-profit membership
Attorney-at-Law and President, association).
Faith Colish, A Professional
Corporation, 1980 to 2002.
Walter G. Ehlers (70) Trustee since Consultant; Retired President 37 None.
1989 and Trustee, Teachers Insurance
& Annuity (TIAA) and College
Retirement Equities Fund
(CREF).
C. Anne Harvey (66) Trustee since Consultant, C. A. Harvey 37 Formerly, Member, Individual
1998 Associates, since June 2001; Investors Advisory Committee to the
Formerly, Director, AARP, 1978 New York Stock Exchange Board of
to December 2001. Directors, 1998 to June 2002;
President, Board of Associates to
The National Rehabilitation
Hospital's Board of Directors, 2002;
Member, American Savings
Education Council's Policy Board
(ASEC), 1998-2000; Member,
Executive Committee, Crime
Prevention Coalition of America,
1997-2000.
19
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Barry Hirsch (70) Trustee since Attorney-at-Law. Senior 37 None.
2000 Counsel, Loews Corporation
(diversified financial corporation)
May 2002 until April 2003; prior
thereto, Senior Vice President,
Secretary and General Counsel,
Loews Corporation.
Robert A. Kavesh (76) Trustee since Marcus Nadler Professor of 37 Director, DEL Laboratories, Inc.
2000 Finance and Economics (cosmetics and pharmaceuticals)
Emeritus, New York University, since 1978; The Caring Community
Stern School of Business. (not-for-profit).
Howard A. Mileaf (67) Trustee since Retired. Formerly, Vice 37 Director, WHX Corporation
1999 President and Special Counsel, (holding company) since August
WHX Corporation (holding 2002; Director, WebFinancial
company), 1993-2001. Corporation (holding company)
since December 2002; Director, State
Theatre of New Jersey (not-for-
profit theater), since 2000; Formerly
Director, Kevlin Corporation
(manufacturer of microwave and
other products).
John P. Rosenthal (71) Trustee since Senior Vice President, Burnham 37 Director, 92nd Street Y (non-profit),
2000 Securities Inc. (a registered since 1967; Formerly, Director,
broker-dealer) since 1991. Cancer Treatment Holdings, Inc.
William E. Rulon (71) Trustee since Retired. Senior Vice President, 37 Director, Pro-Kids Golf and
2000 Foodmaker, Inc. (operator and Learning Academy (teach golf and
franchiser of restaurants) until computer usage to "at risk"
January 1997. children), since 1998; Director,
Prandium, Inc. (restaurants) from
March 2001 until July 2002.
Cornelius T. Ryan (72) Trustee since Founding General Partner, 37 Director, Capital Cash Management
2000 Oxford Partners and Oxford Trust (money market fund),
Bioscience Partners (venture Narragansett Insured Tax-Free
capital partnerships) and Income Fund, Rocky Mountain
President, Oxford Venture Equity Fund, Prime Cash Fund,
Corporation. several private companies and
QuadraMed Corporation
(NASDAQ).
20
Trustees and Officers (Unaudited) cont'd
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Tom Decker Seip (53) Trustee since General Partner, Seip 37 Director, H&R Block, Inc. (financial
2000 Investments LP (a private services company) since May 2001;
investment partnership); Formerly, Director, General Magic
President and CEO, Westaff, (voice recognition software), 2001-
Inc. (temporary staffing), May 2002; Director, Forward
2001 to January 2002; Senior Management, Inc. (asset
Executive at the Charles management) since 2001; Formerly,
Schwab Corporation from 1983 Director, E-Finance Corporation
to 1999, including Chief (credit decisioning services), 1999-
Executive Officer, Charles 2003; Director, Save-Daily.com
Schwab Investment (micro investing services), 1999-
Management, Inc. and Trustee, 2003; Director, Offroad Capital Inc.
Schwab Family of Funds and (pre-public internet commerce
Schwab Investments from 1997 company).
to 1998 and Executive Vice
President-Retail Brokerage,
Charles Schwab Investment
Management from 1994 to
1997.
Candace L. Straight (56) Trustee since Private investor and consultant 37 Director, Providence Washington
1999 specializing in the insurance (property and casualty insurance
industry; Formerly, Advisory company), since December 1998;
Director, Securitas Capital LLC Director, Summit Global Partners
(a global private equity (insurance brokerage firm) since
investment firm dedicated to October 2000.
making investments in the
insurance sector), 1998 until
December 2002.
Peter P. Trapp (59) Trustee since Regional Manager for Atlanta 37 None.
1984 Region, Ford Motor Credit
Company since August 1997;
prior thereto, President, Ford
Life Insurance Company, April
1995 until August 1997.
21
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Edward I. O'Brien* (75) Trustee since Formerly, Member, Investment 37 Director, Legg Mason, Inc. (financial
2000 Policy Committee, Edward services holding company), since
Jones, 1993-2001; President, 1993; Director, Boston Financial
Securities Industry Association Group (real estate and tax shelters)
("SIA") (securities industry's 1993-1999.
representative in government
relations and regulatory matters
at the federal and state levels)
1974-1992; Adviser to SIA,
November 1992-November
1993.
Jack L. Rivkin* (63) President and Executive Vice President, 37 Director, Dale Carnegie and
Trustee since Neuberger Berman Inc. Associates, Inc. (private company)
December (holding company) since 2002; since 1998; Director, Emagin Corp.
2002 Executive Vice President and (public company) since 1997;
Chief Investment Officer, Director, Solbright, Inc. (private
Neuberger Berman since 2002 company) since 1998; Director,
and 2003, respectively; Head of Infogate, Inc. (private company)
Research and Research Sales since 1997.
and Trading Departments of
Neuberger Berman since 2002;
Director and Chairman, NB
Management since December
2002; Formerly, Executive Vice
President, Citigroup
Investments, Inc. from
September 1995 to February
2002; Executive Vice President,
Citigroup Inc. from September
1995 to February 2002.
22
Trustees and Officers (Unaudited) cont'd
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Peter E. Sundman* (44) Chairman of Executive Vice President, 37 Executive Vice President, Neuberger
the Board, Neuberger Berman since 1999; Berman Inc. (holding company)
Chief Formerly, Principal, Neuberger since 1999 and Formerly, Director
Executive Berman from 1997 until 1999; from October 1999 through March
Officer and Senior Vice President, NB 2003; President and Director, NB
Trustee since Management from 1996 until Management since 1999; Head of
2000; 1999. Neuberger Berman Inc.'s Mutual
President and Funds and Institutional Business
Chief since 1999; Director and Vice
Executive President, Neuberger & Berman
Officer from Agency, Inc. since 2000; Trustee,
1998 to 2000 Frost Valley YMCA.
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the Trust's Trust Instrument, each Trustee shall hold office
for life or until his or her successor is elected or the Trust terminates;
except that (a) any Trustee may resign by delivering a written resignation;
(b) any Trustee may be removed with or without cause at any time by a
written instrument signed by at least two-thirds of the other Trustees; (c)
any Trustee who requests to be retired, or who has become unable to serve,
may be retired by a written instrument signed by a majority of the other
Trustees; and (d) any Trustee may be removed at any shareholder meeting by
a vote of at least two-thirds of the outstanding shares.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
* Indicates a Trustee who is an "interested person" within the meaning of the
1940 Act. Mr. Sundman and Mr. Rivkin are interested persons of the Trust by
virtue of the fact that they are officers and/or directors of NB Management
and Executive Vice Presidents of Neuberger Berman. Mr. O'Brien is an
interested person of the Trust by virtue of the fact that he is a director
of Legg Mason, Inc., a wholly owned subsidiary of which, from time to time,
serves as a broker or dealer to the Funds and other funds for which NB
Management serves as investment manager.
23
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Information about the Officers of the Trust
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
Claudia A. Brandon (47) Secretary since 1985 Vice President, Neuberger Berman since 2002 and
employee since 1999; Vice President-Mutual Fund Board
Relations, NB Management since 2000; Vice President,
NB Management from 1986 to 1999; Secretary,
ten registered investment companies for which
NB Management acts as investment manager and
administrator (four since 2002 and three since 2003).
Robert Conti (47) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President, Neuberger Berman from 1999 until 2003;
Senior Vice President, NB Management since 2000;
Controller, NB Management until 1996; Treasurer,
NB Management from 1996 until 1999; Vice President,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (three since 2000, four since 2002 and
three since 2003).
Brian P. Gaffney (50) Vice President since 2000 Managing Director, Neuberger Berman since 1999;
Senior Vice President, NB Management since 2000;
Vice President, NB Management from 1997 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Sheila R. James (38) Assistant Secretary since 2002 Employee, Neuberger Berman since 1999; Employee,
NB Management from 1991 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
Kevin Lyons (48) Assistant Secretary since Employee, Neuberger Berman since 1999; Employee,
March 2003 NB Management from 1993 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (since 2003).
John M. McGovern (33) Assistant Treasurer since 2002 Employee, NB Management since 1993; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
24
Trustees and Officers (Unaudited) cont'd
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
Barbara Muinos (45) Treasurer and Principal Financial Vice President, Neuberger Berman since 1999; Assistant
and Accounting Officer since 2002; Vice President, NB Management from 1993 to 1999;
prior thereto, Assistant Treasurer Treasurer and Principal Financial and Accounting
since 1996 Officer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003);
Assistant Treasurer of three registered investment
companies for which NB Management acts as investment
manager and administrator from 1996 until 2002.
Frederic B. Soule (57) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President; Neuberger Berman from 1999 until 2003;
Vice President, NB Management from 1995 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Trani Jo Wyman (34) Assistant Treasurer since 2002 Employee, NB Management since 1991; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
- -------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the By-Laws of the Trust, each officer elected by the Trustees
shall hold office until his or her successor shall have been elected and
qualified or until his or her earlier death, inability to serve, or
resignation. Officers serve at the pleasure of the Trustees and may be
removed at any time with or without cause.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
25
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Report of Votes of Shareholders (Unaudited)
A special meeting of shareholders of Neuberger Berman Advisers Management Trust
Partners Portfolio (the "Fund") was held on September 23, 2003. Upon completion
of the acquisition of Neuberger Berman Inc. by Lehman Brothers Holdings Inc.
(the "Transaction"), the management agreement between the Trust, on behalf of
the Fund, and Neuberger Berman Management Inc. ("NB Management"), and the
sub-advisory agreement with respect to the Trust and each Fund, between NB
Management and Neuberger Berman, LLC automatically terminated. To provide for
continuity of management, the shareholders of the Fund voted on the following
matters, which became effective upon completion of the Transaction on October
31, 2003:
Proposal 1-To Approve a New Management Agreement between the Trust, on behalf of
the Fund, and NB Management
Votes For Votes Against Abstentions*
34,904,925.433 1,205,170.494 2,589,809.341
Proposal 2-To Approve a New Sub-Advisory Agreement with respect to the Trust and
each Fund, between NB Management and Neuberger Berman, LLC
Votes For Votes Against Abstentions*
34,819,388.244 1,267,148.251 2,613,368.773
* Abstentions were counted as shares that were present and entitled to vote
for purposes of determining a quorum and had a negative effect on the
proposals.
26
______________________________________________________________________________
Annual Report
December 31, 2003
B1012 02/04
[LOGO]
Neuberger Berman
Advisers
Management
Trust
Regency
Portfolio
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Regency Portfolio Manager's Commentary
We are pleased to report that the AMT Regency Portfolio delivered strong
positive returns in 2003, although it slightly underperformed its benchmarks,
the Russell Midcap and Russell Midcap Value Index.(2)
In early 2003, few would have predicted that by year's end, the economy would
be roaring and the leading stock market indices would have gained 25% or more.
We confess to being pleasantly surprised by the economy and stock market's
strong showing, but are not surprised at all that our portfolio of what we
believe to be high quality companies, trading at below market
average valuations, participated in the market rebound.
The AMT Regency Portfolio had positive returns in eight of the nine sectors in
which it was invested, with the only loss coming in the materials sector, where
the one stock we owned declined. Our holdings outperformed benchmark components
in five of the nine sector categories. Financials sector investments, primarily
property and casualty insurers and regional banks, made the largest
contribution to portfolio returns, followed by holdings in the consumer
discretionary, health care, and energy sectors. Consumer discretionary and
energy holdings had positive impacts on relative returns. We were overweighted
in both these sectors and our investments significantly outperformed benchmark
sector components.
Our tech sector holdings performed exceptionally well, gaining more than 75%
for the year. However, our substantial underweighting in tech (approximately
one-third of the benchmark's weighting), diminished relative returns.
We started the new year with the portfolio significantly overweighted in
healthcare and energy, the two sectors in which we are finding the most
compelling values. Our healthcare sector assets are concentrated in hospital
companies and HMOs with healthy balance sheets, stable cash flows, high returns
on equity, and realistic prospects for consistent double-digit earnings growth
in the years ahead. Because investors have been enamored of stocks in the most
economically sensitive sectors, healthcare services stocks lagged the market
and still trade at well below market average multiples. With the pace of
economic growth likely to moderate in the year ahead, we believe that patient
- ------------------------------------------------------------------------------------------------------
Average Annual Total Return(1)
Regency Portfolio Russell Midcap[RegTM] Value(2) Russell Midcap[RegTM](2)
1 Year 35.84% 38.07% 40.06%
Life of Fund 8.46% 9.93% 8.26%
- ------------------------------------------------------------------------------------------------------
Inception Date 08/22/2001
Comparison of a $10,000 Investment
Regency Russell Midcap (R)
Portfolio Value Russell Midcap (R)
--------------------------------------------------------
8/22/2001 $ 10,000 $ 10,000 $ 10,000
9/30/2001 $ 9,020 $ 8,949 $ 8,767
12/31/2001 $ 9,970 $ 10,025 $ 10,275
3/31/2002 $ 10,431 $ 10,817 $ 10,711
6/30/2002 $ 10,040 $ 10,312 $ 9,689
9/30/2002 $ 8,567 $ 8,460 $ 7,980
12/31/2002 $ 8,918 $ 9,058 $ 8,612
3/31/2003 $ 8,697 $ 8,691 $ 8,408
6/30/2003 $ 9,980 $ 10,246 $ 9,944
9/30/2003 $ 10,561 $ 10,855 $ 10,583
12/31/2003 $ 12,114 $ 12,507 $ 12,062
Value as of 12/31/03
Regency Portfolio $12,114
Russell Midcap(R) Value $12,507
Russell Midcap(R) $12,062
This chart shows the value of a hypothetical $10,000 investment in the Fund over
the past 10 fiscal years, or since the Fund's inception, if it has not operated
for 10 years. The results are compared with benchmarks, which may include a
broad-based market index and or a narrower index. Please note that market
indexes do not include expenses. All results include the reinvestment of
dividends and capital gain distributions. Results represent past performance and
do not indicate future results.
2
investors in less economically sensitive industry groups, such as healthcare,
will be rewarded.
Our energy holdings consist of a diversified group of what we believe to be
high quality exploration and production companies. Investors today are
reluctant to buy even the highest quality energy stocks based on the fear that
oil prices are unsustainably high. We agree that $30-plus oil is unlikely to
persist indefinitely, but by our estimates, our energy holdings are already
discounting prices closer to $22 per barrel. We currently believe $25 per
barrel is a realistic long run price for oil, given the higher finding costs
the majors are experiencing and the thirst for oil from growing economies such
as China. Our energy holdings enjoy below average finding and development
costs, strong balance sheets, conservative managements and large prospect
inventories. We believe these desirable characteristics will enable them to
continue to grow reserves and production even in the face of a declining
commodity price and should ultimately result in significant stock price
appreciation.
We are bottom-up stock pickers, not economists or market forecasters. However,
since our shareholders seem to appreciate our opinions on the economy and
market, we will oblige. The recovery appears sustainable, but we expect the
rate of economic expansion to slow considerably from the torrid pace of
second-half 2003. The consensus is calling for 4%-4.5% GDP growth in 2004. We
think that is reasonable. How much more progress stocks will make as economic
growth levels out is a question mark. Our fear is that current equity
valuations reflect higher economic and earnings expectations than may be
justified. Stocks in the most economically sensitive industry groups, such as
technology, materials and industrials (and particularly the lower quality
companies in these sectors), which now trade at very high multiples, appear to
be the most vulnerable. This year's laggards, high quality companies in less
economically sensitive groups such as healthcare, energy, and financials, are
much more reasonably valued and do not require a robust economy to grow cash
flow and earnings at attractive rates.
Regardless of what the stock market has in store for us this year, we believe
that over the longer term, a portfolio of the highest quality companies trading
at below market average multiples will produce superior returns. Put another
way, we are confident that buying the best for less will continue to be
productive.
Sincerely,
/s/ Andrew Wellington
---------------------
ANDREW WELLINGTON
PORTFOLIO MANAGER
3
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
1. 35.84% and 8.46% were the average annual total returns for the 1-year and
since inception (08/22/01) periods ended December 31, 2003. Neuberger Berman
Management Inc. ("NBMI") has agreed to absorb certain expenses of the AMT
Portfolios. Without this arrangement, which is subject to change, the total
returns of the Portfolios would be less. Total return includes reinvestment of
dividends and capital gain distributions. Performance data quoted represent
past performance and the investment return and principal value of an investment
will fluctuate so that the shares, when redeemed, may be worth more or less
than original cost. The performance information does not reflect fees and
expenses of the insurance companies.
2. The Russell Midcap[RegTM] Value Index measures the performance of those
Russell Midcap[RegTM] Index companies with lower price-to-book ratios and lower
forecasted growth values. The Russell Midcap Index measures the performance of
the 800 smallest companies in the Russell 1000[RegTM] Index, which represents
approximately 26% of the total market capitalization of the Russell 1000 Index
(which, in turn, consists of the 1,000 largest U.S. companies, based on market
capitalization). 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
these indices are prepared or obtained by NBMI and include reinvestment of all
dividends and capital gain distributions. The Portfolio may invest in many
securities not included in the above-described indices.
The investments for the Portfolio are managed by the same portfolio manager(s)
who manage one or more other mutual funds that have similar names, investment
objectives and investment styles as the Portfolio. You should be aware that the
Portfolio is likely to differ from the other mutual funds in size, cash flow
pattern and tax matters. Accordingly, the holdings and performance of the
Portfolio can be expected to vary from those of the other mutual funds.
The composition, industries and holdings of the Portfolio are subject to
change.
Shares of the separate Portfolios of Neuberger Berman Advisers Management Trust
are sold only through the currently effective prospectus and are not available
to the general public. Shares of this Portfolio may be purchased only by life
insurance companies to be used with their separate accounts that fund variable
annuity and variable life insurance policies and by qualified pension and
retirement plans.
(C) 2004 Neuberger Berman Management Inc., distributor. All rights reserved.
4
Schedule of Investments Regency Portfolio
Number of Shares
Market Value+
Common Stocks (95.7%)
Automotive (3.5%)
6,300 Johnson Controls $ 731,556\P
22,200 Lear Corp. 1,361,526
----------
2,093,082
Auto/Truck Replacement Parts (1.8%)
12,800 Borg-Warner Automotive 1,088,896
Banking (3.0%)
22,600 North Fork Bancorp 914,622
17,000 TCF Financial 872,950
----------
1,787,572
Banking & Financial (7.6%)
39,700 Charter One Financial 1,371,635
32,500 First Tennessee National 1,433,250
40,400 IndyMac Bancorp 1,203,516
17,300 Southtrust Corp. 566,229
----------
4,574,630
Business Services (2.3%)
29,400 Manpower Inc. 1,384,152
Consumer Goods & Services (1.5%)
12,300 Mohawk Industries 867,642*
Consumer Products & Services (1.2%)
29,100 Viad Corp. 727,500
Energy (0.5%)
15,200 Pepco Holdings 297,008
Financial Services (9.8%)
17,200 Ambac Financial Group 1,193,508
13,300 Bear Stearns 1,063,335
17,500 CIT Group 629,125
15,200 Federated Investors 446,272
33,750 GreenPoint Financial 1,192,050
27,800 Radian Group 1,355,250
----------
5,879,540
Food & Beverage (5.5%)
46,200 Constellation Brands 1,521,366*
80,400 Del Monte Foods 836,160*
38,500 Fresh Del Monte Produce 917,455
----------
3,274,981
Health Care (7.6%)
14,900 Anthem, Inc. 1,117,500*\P
22,500 Davita, Inc. 877,500*
22,500 Laboratory Corp. of
America Holdings 831,375*
21,800 Omnicare, Inc. 880,502
24,900 WellChoice Inc. 859,050*
----------
4,565,927
Number of Shares Market Value+
Health Products & Services (7.5%)
33,600 Oxford Health Plans $1,461,600
9,400 Quest Diagnostics 687,234
41,900 Triad Hospitals 1,394,013*
17,400 Universal Health Services
Class B 934,728
----------
4,477,575
Industrial Goods & Services (0.9%)
5,500 American Standard 553,850*
Insurance (8.8%)
17,700 Loews Corp. 875,265
18,200 PartnerRe Ltd. 1,056,510
30,200 PMI Group 1,124,346
28,700 RenaissanceRe Holdings 1,407,735
10,000 XL Capital 775,500
----------
5,239,356
Manufacturing (1.9%)
19,600 SPX Corp. 1,152,676*
Oil & Gas (11.8%)
3,576 Apache Corp. 290,013
20,900 EOG Resources 964,953
16,400 Equitable Resources 703,888
4,600 Murphy Oil 300,426
38,300 Pioneer Natural Resources 1,222,919*
24,400 Sunoco, Inc. 1,248,060
20,200 Talisman Energy 1,143,320
41,966 XTO Energy 1,187,638
----------
7,061,217
Recreational Equipment (1.0%)
18,300 Brunswick Corp. 582,489\P
Restaurants (1.5%)
43,000 Darden Restaurants 904,720
Retail (7.1%)
42,700 Foot Locker 1,001,315
29,000 Liz Claiborne 1,028,340
7,100 May Department Stores 206,397\P
17,600 Office Depot 294,096*\P
33,900 Payless ShoeSource 454,260*\P
18,600 Reebok International 731,352
12,900 Regis Corp. 509,808
----------
4,225,568
Retail Stores (3.8%)
41,800 Pier 1 Imports 913,748
30,800 V. F. Corp. 1,331,792
----------
2,245,540
Technology (1.7%)
36,400 Computer Associates 995,176
Transportation (4.2%)
9,400 Canadian National Railway 594,832
25,900 CNF Inc. 878,010
18,600 Teekay Shipping 1,060,758
----------
2,533,600
See Notes to Schedule of Investments 5
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Schedule of Investments Regency Portfolio cont'd
Number of Shares Market Value+
Utilities, Electric & Gas (1.2%)
16,800 PPL Corp. $ 735,000
Total Common Stocks
(Cost $47,512,441) 57,247,697
-----------
Principal Amount
Short-Term Investments (9.9%)
$2,773,000 N&B Securities Lending
Quality Fund, LLC 2,773,000++
3,176,667 Neuberger Berman
Institutional Cash Fund
Trust Class 3,176,667@
-----------
Total Short-Term Investments
(Cost $5,949,667) 5,949,667#
-----------
Total Investments (105.6%)
(Cost $53,462,108) 63,197,364##
Liabilities, less cash, receivables and other
assets [(5.6%)] (3,340,558)
-----------
Total Net Assets (100.0%) $59,856,806
-----------
See Notes to Schedule of Investments 6
Notes to Schedule of Investments Regency Portfolio
+ Investment securities of the Fund are valued at the latest sales price
where that price is readily available; securities for which no sales were
reported, unless otherwise noted, are valued at the mean between the
closing bid and asked prices. Securities traded primarily on the NASDAQ
Stock Market are normally valued by the Fund at the NASDAQ Official Closing
Price ("NOCP") provided by NASDAQ each business day. The NOCP is the most
recently reported price as of 4:00:02 p.m., Eastern time, unless that price
is outside the range of the "inside" bid and asked prices (i.e., the bid
and asked prices that dealers quote to each other when trading for their
own accounts); in that case, NASDAQ will adjust the price to equal the
inside bid or asked price, whichever is closer. Because of delays in
reporting trades, the NOCP may not be based on the price of the last trade
to occur before the market closes. The Fund values all other securities by
a method the Board of Trustees of Neuberger Berman Advisers Management
Trust believes accurately reflects fair value. Numerous factors may be
considered when determining the fair value of a security, including
available analyst, media or other reports, trading in futures or ADRs and
whether the issuer of the security being fair valued has other securities
outstanding. 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.
# At cost, which approximates market value.
## At December 31, 2003, the cost of investments for U.S. Federal income tax
purposes was $53,578,067. Gross unrealized appreciation of investments was
$9,798,427 and gross unrealized depreciation of investments was $179,130,
resulting in net unrealized appreciation of $9,619,297, based on cost for
U.S. Federal income tax purposes.
* Non-income producing security.
\P All or a portion of this security is on loan (see Note A of Notes to
Financial Statements).
@ Neuberger Berman Institutional Cash Fund is also managed by Neuberger
Berman Management Inc. (see Note A of Notes to Financial Statements).
++ Affiliated issuer (see Note A of Notes to Financial Statements).
See Notes to Financial Statements 7
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Assets and Liabilities
Regency
Neuberger Berman Advisers Management Trust Portfolio
Assets
Investments in securities, at market value*+ (Note A)-see Schedule of Investments:
===============================================================================================
Unaffiliated issuers $57,247,697
- -----------------------------------------------------------------------------------------------
Non-controlled affiliated issuers 5,949,667
- -----------------------------------------------------------------------------------------------
63,197,364
- -----------------------------------------------------------------------------------------------
Dividends and interest receivable 42,347
===============================================================================================
Receivable for securities sold 193,300
- -----------------------------------------------------------------------------------------------
Receivable for Fund shares sold 176,379
===============================================================================================
Prepaid expenses and other assets 166
- -----------------------------------------------------------------------------------------------
Total Assets 63,609,556
- -----------------------------------------------------------------------------------------------
Liabilities
Payable for collateral on securities loaned (Note A) 2,773,000
===============================================================================================
Payable for securities purchased 887,630
- -----------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 1,081
===============================================================================================
Payable to investment manager (Note B) 25,284
- -----------------------------------------------------------------------------------------------
Payable to administrator (Note B) 13,929
===============================================================================================
Accrued expenses and other payables 51,826
- -----------------------------------------------------------------------------------------------
Total Liabilities 3,752,750
- -----------------------------------------------------------------------------------------------
Net Assets at value $59,856,806
- -----------------------------------------------------------------------------------------------
Net Assets consist of:
Paid-in capital $50,275,799
===============================================================================================
Undistributed (distributions in excess of) net investment income 27,008
- -----------------------------------------------------------------------------------------------
Accumulated net realized gains (losses) on investments (181,274)
===============================================================================================
Net unrealized appreciation (depreciation) in value of investments 9,735,273
- -----------------------------------------------------------------------------------------------
Net Assets at value $59,856,806
- -----------------------------------------------------------------------------------------------
Shares Outstanding ($.001 par value; unlimited shares authorized) 4,950,690
===============================================================================================
Net Asset Value, offering and redemption price per share $ 12.09
- -----------------------------------------------------------------------------------------------
+Securities of unaffiliated issuers on loan, at market value $ 2,690,022
- -----------------------------------------------------------------------------------------------
*Cost of investments:
Unaffiliated issuers $47,512,441
- -----------------------------------------------------------------------------------------------
Non-controlled affiliated issuers 5,949,667
- -----------------------------------------------------------------------------------------------
Total cost of investments $53,462,108
- -----------------------------------------------------------------------------------------------
See Notes to Financial Statements 8
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST FOR THE YEAR ENDED DECEMBER 31, 2003
Statement of Operations
Regency
Neuberger Berman Advisers Management Trust Portfolio
Investment Income
Income:
Dividend income $ 456,079
=====================================================================================================
Income from investments in affiliated issuers (Note A) 22,151
- -----------------------------------------------------------------------------------------------------
Income from securities loaned-net (Note A) 2,404
=====================================================================================================
Foreign taxes withheld (Note A) (2,266)
- -----------------------------------------------------------------------------------------------------
Total income 478,368
- -----------------------------------------------------------------------------------------------------
Expenses:
Investment management fee (Notes A & B) 213,861
=====================================================================================================
Administration fee (Note B) 116,652
- -----------------------------------------------------------------------------------------------------
Audit fees 25,283
=====================================================================================================
Custodian fees (Note B) 42,751
- -----------------------------------------------------------------------------------------------------
Insurance expense 660
=====================================================================================================
Legal fees 4,197
- -----------------------------------------------------------------------------------------------------
Shareholder reports 21,753
=====================================================================================================
Trustees' fees and expenses 28,448
- -----------------------------------------------------------------------------------------------------
Miscellaneous 1,711
- -----------------------------------------------------------------------------------------------------
Total expenses 455,316
Investment management fee waived (Note A) (2,649)
Expenses reduced by custodian fee expense offset and commission recapture arrangements (1,307)
(Note B)
- -----------------------------------------------------------------------------------------------------
Total net expenses 451,360
- -----------------------------------------------------------------------------------------------------
Net investment income (loss) 27,008
- -----------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investment securities sold 1,919,313
=====================================================================================================
Change in net unrealized appreciation (depreciation) in value of:
Investment securities (Note A) 10,999,080
- -----------------------------------------------------------------------------------------------------
Foreign currency (Note A) 17
- -----------------------------------------------------------------------------------------------------
Net gain (loss) on investments 12,918,410
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $12,945,418
- -----------------------------------------------------------------------------------------------------
See Notes to Financial Statements 9
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Changes in Net Assets
Regency Portfolio
----------------------------------
Neuberger Berman Advisers Management Trust Year Ended December 31,
2003 2002
Increase (Decrease) in Net Assets:
From Operations:
Net investment income (loss) $ 27,008 $ (4,886)
==================================================================================================================
Net realized gain (loss) on investments 1,919,313 (988,960)
- ------------------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of investments 10,999,097 (2,427,792)
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 12,945,418 (3,421,638)
- ------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders From:
Net investment income - (24,825)
==================================================================================================================
Tax return of capital - (24,550)
- ------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders - (49,375)
- ------------------------------------------------------------------------------------------------------------------
From Fund Share Transactions:
Proceeds from shares sold 19,790,809 13,423,709
==================================================================================================================
Proceeds from reinvestment of dividends and distributions - 49,375
- ------------------------------------------------------------------------------------------------------------------
Payments for shares redeemed (1,956,147) (4,713,239)
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) from Fund share transactions 17,834,662 8,759,845
- ------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets 30,780,080 5,288,832
Net Assets:
Beginning of year 29,076,726 23,787,894
- ------------------------------------------------------------------------------------------------------------------
End of year $ 59,856,806 $ 29,076,726
- ------------------------------------------------------------------------------------------------------------------
Undistributed (distributions in excess of) net investment income at end of year $ 27,008 $ -
- ------------------------------------------------------------------------------------------------------------------
Number of Fund Shares:
Sold 1,897,693 1,388,414
==================================================================================================================
Issued on reinvestment of dividends and distributions - 4,893
- ------------------------------------------------------------------------------------------------------------------
Redeemed (214,566) (512,472)
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares outstanding 1,683,127 880,835
- ------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements 10
Notes to Financial Statements Regency Portfolio
Note A--Summary of Significant Accounting Policies:
1 General: Regency Portfolio (the "Fund") is a separate operating series of
Neuberger Berman Advisers Management Trust (the "Trust"), a Delaware statutory
trust organized pursuant to a Trust Instrument dated May 23, 1994. The Trust is
currently comprised of ten separate operating series (each a "Series,"
collectively, the "Funds") each of which (except Focus Portfolio) is
diversified. The Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended, and its shares
are registered under the Securities Act of 1933, as amended. The Fund currently
offers only Class I shares. The Trustees of the Trust may establish additional
series or classes of shares without the approval of shareholders.
The assets of each Series of the Trust belong only to that Series, and the
liabilities of each Series are borne solely by that Series and no other.
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires Neuberger Berman
Management Inc. ("Management") to make estimates and assumptions at the date of
the financial statements. Actual results could differ from those estimates.
2 Portfolio valuation: Investment securities are valued as indicated in the
notes following the Schedule of Investments.
3 Foreign currency translation: The accounting records of the Fund 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. Net unrealized foreign currency gain (loss) arises from
changes in the value of assets and liabilities, other than investments in
securities, as a result of changes in exchange rates and are stated separately
in the Statement of Operations.
4 Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the ex-dividend
date or, for certain foreign dividends, as soon as the Fund becomes aware of
the dividends. Non-cash dividends included in dividend income, if any, are
recorded at the fair market value of the securities received. Interest income,
including accretion of original issue discount, where applicable, and accretion
of discount on short-term investments, 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 and stated separately
in the Statement of Operations.
5 Federal income taxes: The Funds are treated as separate entities 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
11
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
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.
6 Dividends and distributions to shareholders: The Fund may earn income, net of
expenses, daily on its investments. Income dividends and distributions from net
realized capital gains, if any, generally are distributed in October. Income
dividends and capital gain distributions to shareholders are recorded on the
ex-dividend date. To the extent the Fund's net realized capital gains, if any,
can be offset by capital loss carryforwards ($65,315 expiring in 2010,
determined as of December 31, 2003), it is the policy of the Fund not to
distribute such gains.
The Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a tax 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 in the components of net assets on the Statement of Assets and
Liabilities.
The tax character of distributions paid during the years ended December 31,
2003 and 2002 were as follows:
Distributions Paid From:
Tax Return
Ordinary Income of Capital Total
2003 2002 2003 2002 2003 2002
$ -- $24,825 $ -- $24,550 $ -- $49,375
As of December 31, 2003, the components of distributable earnings (accumulated
losses) on a U.S. Federal income tax basis were as follows:
Undistributed Unrealized Loss
Ordinary Appreciation Carryforwards
Income (Depreciation) and Deferrals Total
$27,008 $9,619,314 $(65,315) $9,581,007
The difference between book basis and tax basis is attributable primarily to
the tax deferral of losses on wash sales.
7 Foreign taxes: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
8 Expense allocation: Expenses directly attributable to a Series are charged to
that Series. Expenses of the Trust that are not directly attributed to a Series
are allocated among the Funds, on the basis of relative net assets, except
where a more appropriate allocation of expenses to each of the Funds can
otherwise be made fairly. Expenses borne by the complex of related investment
companies, which includes open-end and closed-end investment companies for
which Management serves as investment adviser, that are not directly attributed
to a Series or the Trust, are allocated among the Funds and the other
investment companies in the complex or series thereof, on the basis of relative
net assets, except where a more appropriate allocation of expenses to each
investment company in the complex or series thereof can otherwise be made
fairly.
12
Notes to Financial Statements Regency Portfolio cont'd
9 Security lending: Pursuant to an Exemptive Order issued by the Securities and
Exchange Commission, the Fund entered into a Securities Lending Agreement
("Agreement") with Neuberger Berman, LLC ("Neuberger") on April 17, 2003.
Securities loans involve certain risks in the event a borrower should fail
financially, including delays or inability to recover the lent securities or
foreclose against the collateral. The investment manager, under the general
supervision of the Trust's Board of Trustees, monitors the creditworthiness of
the parties to whom the Fund makes security loans. The Fund will not lend
securities on which covered call options have been written, or lend securities
on terms which would prevent the Fund from qualifying as a regulated investment
company. The Fund receives cash collateral equal to at least 102% of the
current market value of the loaned securities. The Fund invests the cash
collateral in the N&B Securities Lending Quality Fund, LLC ("investment
vehicle"), which is managed by State Street Bank and Trust Company ("State
Street") pursuant to guidelines approved by the Trust's investment manager.
Neuberger guarantees a minimum revenue to the Fund under the Agreement, and
receives a portion of any revenue earned in excess of the guaranteed amount as
a lending agency fee. At December 31, 2003, the Fund had not paid Neuberger any
fees under the Agreement.
Prior to April 17, 2003, the Fund had a Securities Lending Agreement with
Morgan Stanley & Co. Incorporated ("Morgan"). The Fund received cash collateral
equal to at least 100% of the current market value of the loaned securities.
The Fund invested the cash collateral in the investment vehicle. Income earned
on the investment vehicle was paid to Morgan monthly. The Fund received a fee,
payable monthly, negotiated by the Fund and Morgan, based on the number and
duration of the lending transactions.
Income earned on the securities loaned, if any, is reflected in the Statement
of Operations under the caption Income from securities loaned-net.
10 Transactions with other funds managed by Neuberger Berman Management Inc.:
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Fund may invest in the Neuberger Berman Institutional Cash Fund
(the "Cash Fund"), a fund managed by Management and having the same officers
and Trustees as the Fund. The Cash Fund seeks to provide as high a level of
current income as is consistent with the preservation of capital and the
maintenance of liquidity. For any cash that the Fund invests in the Cash Fund,
Management waives a portion of its management fee equal to the management fee
it receives from the Cash Fund on those assets. For the year ended December 31,
2003, such waived fees amounted to $2,649. For the year ended December 31,
2003, income earned on this investment is reflected in the Statement of
Operations under the caption Income from investments in affiliated issuers.
Note B--Management Fees, Administration Fees, Distribution Arrangements, and
Other Transactions With Affiliates:
Fund shares are issued and redeemed in connection with investments in and
payments under certain variable annuity contracts and variable life insurance
policies issued through separate accounts of life insurance companies and are
also offered directly to qualified pension and retirement plans.
The Fund retains Management as its investment manager under a Management
Agreement. For such investment management services, the Fund pays Management a
fee at the annual rate of 0.55% of the first
13
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
$250 million of the Fund's average daily net assets, 0.525% of the next $250
million, 0.50% of the next $250 million, 0.475% of the next $250 million, 0.45%
of the next $500 million, 0.425% of the next $2.5 billion, and 0.40% of average
daily net assets in excess of $4 billion.
The Fund retains 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 0.30% of the Fund's average daily net
assets. Additionally, Management retains State Street as its sub-administrator
under a Sub-Administration Agreement. Management pays State Street a fee for
all services received under the agreement.
The Trustees of the Trust adopted a non-fee distribution plan for the Fund.
Management has contractually undertaken through December 31, 2006 to reimburse
the Fund for its operating expenses (including the fees payable to Management,
but excluding interest, taxes, brokerage commissions, extraordinary expenses,
and transaction costs) ("Operating Expenses") which exceed, in the aggregate,
1.50% per annum of the Fund's average daily net assets (the "Expense
Limitation"). For the year ended December 31, 2003, no reimbursement to the
Fund was required. The Fund has agreed to repay Management through December 31,
2009 for its excess Operating Expenses previously reimbursed by Management, so
long as its annual Operating Expenses during that period do not exceed its
Expense Limitation, and the repayment is made within three years after the year
in which Management issued the reimbursement. During the year ended December
31, 2003, there was no reimbursement to Management under this agreement. At
December 31, 2003, the Fund has no contingent liability to Management under
this agreement.
On October 31, 2003, Management and Neuberger, a member firm of the New York
Stock Exchange and sub-adviser to the Fund, became indirect wholly owned
subsidiaries of Lehman Brothers Holdings Inc. ("Lehman"), a publicly-owned
holding company (the "Transaction"). Upon completion of the Transaction, the
Trust's management and sub-advisory agreements automatically terminated. To
provide for continuity of management, the shareholders of the Fund voted on
September 23, 2003, to approve new management and sub-advisory agreements,
which took effect upon closing of the Transaction (see Report of Votes of
Shareholders). Neuberger is retained by Management to furnish it with
investment recommendations and research information without added cost to the
Fund. Several individuals who are officers and/or Trustees of the Trust are
also employees of Neuberger and/or Management.
On July 1, 2003, the Fund entered into a commission recapture program, which
enables it to pay some of its operational expenses by recouping a portion of
the commissions it pays to a broker that is not a related party of the Fund.
Expenses paid through this program may include costs of custodial, transfer
agency or accounting services. The impact of this arrangement was a reduction
of $1,271.
The Fund 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 $36.
14
Notes to Financial Statements Regency Portfolio cont'd
Note C--Securities Transactions:
During the year ended December 31, 2003, there were purchase and sale
transactions (excluding short-term securities) of $37,320,224 and $20,413,356,
respectively.
During the year ended December 31, 2003, brokerage commissions on securities
transactions amounted to $96,116, of which Neuberger received $57,865, Lehman
received $1,429, and other brokers received $36,822.
Note D--Line of Credit:
At December 31, 2003, the Fund was a participant in a single committed,
unsecured $150,000,000 ($200,000,000 prior to September 26, 2003) line of
credit with State Street, to be used only for temporary or emergency purposes.
Interest is charged on borrowings under this agreement at the overnight Federal
Funds Rate plus 0.50% per annum. A facility fee of 0.10% per annum of the
available line of credit is charged, of which the Fund has agreed to pay its
pro rata share, based on the ratio of its individual net assets to the net
assets of all participants at the time the fee is due and payable. The fee is
paid quarterly in arrears. No compensating balance is required. Other
investment companies managed by Management also participate in this line of
credit on the same terms. Because several investment companies participate,
there is no assurance that the Fund will have access to the entire $150,000,000
at any particular time. The Fund had no loans outstanding pursuant to this line
of credit at December 31, 2003, nor had the Fund utilized this line of credit
at any time prior to that date.
15
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Financial Highlights Regency Portfolio
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements.++
Period from
August 22, 2001^
Year Ended December 31, to December 31,
----------------------- ----------------
2003 2002 2001
Net Asset Value, Beginning of Period $ 8.90 $ 9.97 $10.00
------ ------ ------
Income From Investment Operations
Net Investment Income (Loss) .01 (.00) .01
Net Gains or Losses on Securities (both realized and unrealized) 3.18 (1.05) (.04)
------ ------ ------
Total From Investment Operations 3.19 (1.05) (.03)
------ ------ ------
Less Distributions
From Net Investment Income -- (.01) --
Tax Return of Capital -- (.01) --
------ ------ ------
Total Distributions -- (.02) --
------ ------ ------
Net Asset Value, End of Period $12.09 $ 8.90 $ 9.97
------ ------ ------
Total Return++ +35.84% -10.56% -0.30%**
Ratios/Supplemental Data
Net Assets, End of Period (in millions) $ 59.9 $ 29.1 $ 23.8
Ratio of Gross Expenses to Average Net Assets# 1.16% 1.28% 1.50%*
Ratio of Net Expenses to Average Net Assets[sec] 1.16% 1.28% 1.50%*
Ratio of Net Investment Income (Loss) to Average Net Assets .07% (.02)% .36%*
Portfolio Turnover Rate 55% 81% 71%
See Notes to Financial Highlights 16
Notes to Financial Highlights Regency Portfolio
++ 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/higher if Management had not reimbursed/ recouped certain
expenses. The total return information shown does not reflect charges and
other expenses that apply to the separate account or the related insurance
policies, and the inclusion of these charges and other expenses would
reduce the total return for all fiscal periods shown.
# The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset and
commission recapture arrangements.
[sec] After reimbursement of expenses by Management. Had Management not
undertaken such action the annualized ratio of net expenses to average
daily net assets would have been:
Period from
August 22, 2001 to
December 31, 2001
1.69%
After reimbursement of expenses previously paid by Management. Had
Management not been reimbursed, the annualized ratio of net expenses to
average daily net assets would have been:
Year Ended
December 31, 2002
1.23%
After waiver of a portion of the investment management fee. Had Management
not undertaken such action the annualized ratio of net expenses to average
daily net assets would have been:
Year Ended
December 31, 2003
1.17%
^ The date investment operations commenced.
++ The per share amounts which are shown have been computed based on the
average number of shares outstanding during each fiscal period.
* Annualized.
** Not annualized.
17
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Report of Ernst & Young LLP, Independent Auditors
To the Board of Trustees of
Neuberger Berman Advisers Management Trust and
Shareholders of Regency Portfolio
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Regency Portfolio, one of the series
constituting the Neuberger Berman Advisers Management Trust (the "Trust"), as
of December 31, 2003, 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 periods indicated
therein. 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 December 31, 2003, 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
Regency Portfolio of Neuberger Berman Advisers Management Trust at December 31,
2003, 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 its
financial highlights for each of the periods indicated therein, in conformity
with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
February 6, 2004
18
Trustees and Officers (Unaudited)
The following tables set forth information concerning the trustees and officers
of the Trust. All persons named as trustees and officers also serve in similar
capacities for other funds administered or managed by NB Management and
Neuberger Berman. The Statement of Additional Information includes additional
information about fund trustees and is available upon request, without charge,
by calling (800) 877-9700.
Information about the Board of Trustees
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
John Cannon (73) Trustee since Consultant. Formerly, Chairman 37 Independent Trustee or Director of
2000 and Chief Investment Officer, three series of Oppenheimer Funds:
CDC Capital Management Limited Term New York Municipal
(registered investment adviser), Fund, Rochester Fund Municipals,
1993-January 1999; prior thereto, and Oppenheimer Convertible
President and Chief Executive Securities Fund since 1992.
Officer, AMA Investment
Advisors, an affiliate of the
American Medical Association.
Faith Colish (68) Trustee since Counsel, Carter Ledyard & 37 Director, American Bar Retirement
1984 Milburn LLP (law firm) since Association (ABRA) since 1997
October 2002; Formerly, (not-for-profit membership
Attorney-at-Law and President, association).
Faith Colish, A Professional
Corporation, 1980 to 2002.
Walter G. Ehlers (70) Trustee since Consultant; Retired President 37 None.
1989 and Trustee, Teachers Insurance
& Annuity (TIAA) and College
Retirement Equities Fund
(CREF).
C. Anne Harvey (66) Trustee since Consultant, C. A. Harvey 37 Formerly, Member, Individual
1998 Associates, since June 2001; Investors Advisory Committee to the
Formerly, Director, AARP, 1978 New York Stock Exchange Board of
to December 2001. Directors, 1998 to June 2002;
President, Board of Associates to
The National Rehabilitation
Hospital's Board of Directors, 2002;
Member, American Savings
Education Council's Policy Board
(ASEC), 1998-2000; Member,
Executive Committee, Crime
Prevention Coalition of America,
1997-2000.
19
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Barry Hirsch (70) Trustee since Attorney-at-Law. Senior 37 None.
2000 Counsel, Loews Corporation
(diversified financial corporation)
May 2002 until April 2003; prior
thereto, Senior Vice President,
Secretary and General Counsel,
Loews Corporation.
Robert A. Kavesh (76) Trustee since Marcus Nadler Professor of 37 Director, DEL Laboratories, Inc.
2000 Finance and Economics (cosmetics and pharmaceuticals)
Emeritus, New York University, since 1978; The Caring Community
Stern School of Business. (not-for-profit).
Howard A. Mileaf (67) Trustee since Retired. Formerly, Vice 37 Director, WHX Corporation
1999 President and Special Counsel, (holding company) since August
WHX Corporation (holding 2002; Director, WebFinancial
company), 1993-2001. Corporation (holding company)
since December 2002; Director, State
Theatre of New Jersey (not-for-
profit theater), since 2000; Formerly
Director, Kevlin Corporation
(manufacturer of microwave and
other products).
John P. Rosenthal (71) Trustee since Senior Vice President, Burnham 37 Director, 92nd Street Y (non-profit),
2000 Securities Inc. (a registered since 1967; Formerly, Director,
broker-dealer) since 1991. Cancer Treatment Holdings, Inc.
William E. Rulon (71) Trustee since Retired. Senior Vice President, 37 Director, Pro-Kids Golf and
2000 Foodmaker, Inc. (operator and Learning Academy (teach golf and
franchiser of restaurants) until computer usage to "at risk" children)
January 1997. since 1998; Director, Prandium, Inc.
(restaurants) from March 2001 until
July 2002.
Cornelius T. Ryan (72) Trustee since Founding General Partner, 37 Director, Capital Cash Management
2000 Oxford Partners and Oxford Trust (money market fund),
Bioscience Partners (venture Narragansett Insured Tax-Free
capital partnerships) and Income Fund, Rocky Mountain
President, Oxford Venture Equity Fund, Prime Cash Fund,
Corporation. several private companies and
QuadraMed Corporation
(NASDAQ).
20
Trustees and Officers (Unaudited) cont'd
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Tom Decker Seip (53) Trustee since General Partner, Seip 37 Director, H&R Block, Inc. (financial
2000 Investments LP (a private services company) since May 2001;
investment partnership); Formerly, Director, General Magic
President and CEO, Westaff, (voice recognition software), 2001-
Inc. (temporary staffing), May 2002; Director, Forward
2001 to January 2002; Senior Management, Inc. (asset
Executive at the Charles management) since 2001; Formerly,
Schwab Corporation from 1983 Director, E-Finance Corporation
to 1999, including Chief (credit decisioning services), 1999-
Executive Officer, Charles 2003; Director, Save-Daily.com
Schwab Investment (micro investing services), 1999-
Management, Inc. and Trustee, 2003; Director, Offroad Capital Inc.
Schwab Family of Funds and (pre-public internet commerce
Schwab Investments from 1997 company).
to 1998 and Executive Vice
President-Retail Brokerage,
Charles Schwab Investment
Management from 1994 to
1997.
Candace L. Straight (56) Trustee since Private investor and consultant 37 Director, Providence Washington
1999 specializing in the insurance (property and casualty insurance
industry; Formerly, Advisory company), since December 1998;
Director, Securitas Capital LLC Director, Summit Global Partners
(a global private equity (insurance brokerage firm) since
investment firm dedicated to October 2000.
making investments in the
insurance sector), 1998 until
December 2002.
Peter P. Trapp (59) Trustee since Regional Manager for Atlanta 37 None.
1984 Region, Ford Motor Credit
Company since August 1997;
prior thereto, President, Ford
Life Insurance Company, April
1995 until August 1997.
21
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Edward I. O'Brien* (75) Trustee since Formerly, Member, Investment 37 Director, Legg Mason, Inc. (financial
2000 Policy Committee, Edward services holding company), since
Jones, 1993-2001; President, 1993; Director, Boston Financial
Securities Industry Association Group (real estate and tax shelters)
("SIA") (securities industry's 1993-1999.
representative in government
relations and regulatory matters
at the federal and state levels)
1974-1992; Adviser to SIA,
November 1992-November
1993.
Jack L. Rivkin* (63) President and Executive Vice President, 37 Director, Dale Carnegie and
Trustee since Neuberger Berman Inc. Associates, Inc. (private company)
December (holding company) since 2002; since 1998; Director, Emagin Corp.
2002 Executive Vice President and (public company) since 1997;
Chief Investment Officer, Director, Solbright, Inc. (private
Neuberger Berman since 2002 company) since 1998; Director,
and 2003, respectively; Head of Infogate, Inc. (private company)
Research and Research Sales since 1997.
and Trading Departments of
Neuberger Berman since 2002;
Director and Chairman, NB
Management since December
2002; Formerly, Executive Vice
President, Citigroup
Investments, Inc. from
September 1995 to February
2002; Executive Vice President,
Citigroup Inc. from September
1995 to February 2002.
22
Trustees and Officers (Unaudited) cont'd
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
Peter E. Sundman* (44) Chairman of Executive Vice President, 37 Executive Vice President, Neuberger
the Board, Neuberger Berman since 1999; Berman Inc. (holding company)
Chief Formerly, Principal, Neuberger since 1999 and Formerly, Director
Executive Berman from 1997 until 1999; from October 1999 through March
Officer and Senior Vice President, NB 2003; President and Director, NB
Trustee since Management from 1996 until Management since 1999; Head of
2000; 1999. Neuberger Berman Inc.'s Mutual
President Funds and Institutional Business
and Chief since 1999; Director and Vice
Executive President, Neuberger & Berman
Officer from Agency, Inc. since 2000; Trustee,
1998 to 2000 Frost Valley YMCA.
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the Trust's Trust Instrument, each Trustee shall hold office
for life or until his or her successor is elected or the Trust terminates;
except that (a) any Trustee may resign by delivering a written
resignation; (b) any Trustee may be removed with or without cause at any
time by a written instrument signed by at least two-thirds of the other
Trustees; (c) any Trustee who requests to be retired, or who has become
unable to serve, may be retired by a written instrument signed by a
majority of the other Trustees; and (d) any Trustee may be removed at any
shareholder meeting by a vote of at least two-thirds of the outstanding
shares.
(3) Except as otherwise indicated, each individual has held the positions
shown for at least the last five years.
* Indicates a Trustee who is an "interested person" within the meaning of
the 1940 Act. Mr. Sundman and Mr. Rivkin are interested persons of the
Trust by virtue of the fact that they are officers and/or directors of NB
Management and Executive Vice Presidents of Neuberger Berman. Mr. O'Brien
is an interested person of the Trust by virtue of the fact that he is a
director of Legg Mason, Inc., a wholly owned subsidiary of which, from
time to time, serves as a broker or dealer to the Funds and other funds
for which NB Management serves as investment manager.
23
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Information about the Officers of the Trust
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
- -----------------------------------------------------------------------------------------------------------------------
Claudia A. Brandon (47) Secretary since 1985 Vice President, Neuberger Berman since 2002 and
employee since 1999; Vice President-Mutual Fund Board
Relations, NB Management since 2000; Vice President,
NB Management from 1986 to 1999; Secretary,
ten registered investment companies for which
NB Management acts as investment manager and
administrator (four since 2002 and three since 2003).
Robert Conti (47) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President, Neuberger Berman from 1999 until 2003;
Senior Vice President, NB Management since 2000;
Controller, NB Management until 1996; Treasurer,
NB Management from 1996 until 1999; Vice President,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (three since 2000, four since 2002 and
three since 2003).
Brian P. Gaffney (50) Vice President since 2000 Managing Director, Neuberger Berman since 1999;
Senior Vice President, NB Management since 2000;
Vice President, NB Management from 1997 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Sheila R. James (38) Assistant Secretary since 2002 Employee, Neuberger Berman since 1999; Employee,
NB Management from 1991 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
Kevin Lyons (48) Assistant Secretary since Employee, Neuberger Berman since 1999; Employee,
March 2003 NB Management from 1993 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (since 2003).
John M. McGovern (33) Assistant Treasurer since 2002 Employee, NB Management since 1993; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
24
Trustees and Officers (Unaudited) cont'd
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
- -----------------------------------------------------------------------------------------------------------------------
Barbara Muinos (45) Treasurer and Principal Financial Vice President, Neuberger Berman since 1999; Assistant
and Accounting Officer since 2002; Vice President, NB Management from 1993 to 1999;
prior thereto, Assistant Treasurer Treasurer and Principal Financial and Accounting
since 1996 Officer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003);
Assistant Treasurer of three registered investment
companies for which NB Management acts as investment
manager and administrator from 1996 until 2002.
Frederic B. Soule (57) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President; Neuberger Berman from 1999 until 2003;
Vice President, NB Management from 1995 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Trani Jo Wyman (34) Assistant Treasurer since 2002 Employee, NB Management since 1991; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
- -------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the By-Laws of the Trust, each officer elected by the Trustees
shall hold office until his or her successor shall have been elected and
qualified or until his or her earlier death, inability to serve, or
resignation. Officers serve at the pleasure of the Trustees and may be
removed at any time with or without cause.
(3) Except as otherwise indicated, each individual has held the positions
shown for at least the last five years.
25
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Report of Votes of Shareholders (Unaudited)
A special meeting of shareholders of Neuberger Berman Advisers Management Trust
Regency Portfolio (the "Fund") was held on September 23, 2003. Upon completion
of the acquisition of Neuberger Berman Inc. by Lehman Brothers Holdings Inc.
(the "Transaction"), the management agreement between the Trust, on behalf of
the Fund, and Neuberger Berman Management Inc. ("NB Management"), and the
sub-advisory agreement with respect to the Trust and each Fund, between NB
Management and Neuberger Berman, LLC automatically terminated. To provide for
continuity of management, the shareholders of the Fund voted on the following
matters, which became effective upon completion of the Transaction on October
31, 2003:
Proposal 1-To Approve a New Management Agreement between the Trust, on behalf
of the Fund, and NB Management
Votes For Votes Against Abstentions*
3,887,305.254 28,990.505 62,995.672
Proposal 2-To Approve a New Sub-Advisory Agreement with respect to the Trust
and each Fund, between NB Management and Neuberger Berman, LLC
Votes For Votes Against Abstentions*
3,873,356.545 42,939.214 62,995.672
* Abstentions were counted as shares that were present and entitled to vote for
purposes of determining a quorum and had a negative effect on the proposals.
26
_____________________________________________________________________________
Annual Report [NEUBERGER BERMAN LOGO]
December 31, 2003
Neuberger Berman
Advisers
Management
Trust
Socially
Responsive
Portfolio[RegTM]
B1017 02/04
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Socially Responsive Portfolio Managers' Commentary
- --------------------------------------------------
We are pleased to report that in 2003 the AMT Socially Responsive Portfolio
outperformed both the Standard & Poor's 500 Index and the Russell 1000 Value
Index.(2)
For nearly three years, the world waited for a more vibrant U.S. economic
recovery that never materialized. The preconditions for a recovery were in
place, but a variety of troubles, including the bursting of the Internet bubble;
the tragedy of 9/11; corporate accounting scandals; several high profile
bankruptcies; the war in Afghanistan; the SARS epidemic; and finally the Iraq
crisis, restrained economic growth. Despite all these external shocks, the U.S.
economy was being supported by fiscal and monetary stimulus and the resilient
American consumer, who benefited from record low interest rates and the mortgage
refinancing boom. Gross Domestic Product (GDP) and corporate earnings continued
to advance, albeit at very modest rates.
Average Annual Total Return(1)
Socially Responsive Russell 1000 (R)
Portfolio Value(2) S&P 5002
1 Year 34.39% 30.03% 28.67%
Life of Fund 4.76% 4.03% (0.51%)
- -------------------------------------------------------------------------------------
Inception Date 2/18/1999
[THE FOLLOWING DATA WAS REPRESENTED AS A LINE CHART IN THE PRINTED MATERIAL]
Comparison of a $10,000 Investment
Socially Responsive Russell 1000 (R)
Portfolio Value S&P 500
- --------------------------------------------------------------------------------
2/18/1999 $ 10,000 $ 10,000 $ 10,000
12/31/1999 $ 11,540 $ 10,925 $ 12,146
12/31/2000 $ 11,355 $ 11,691 $ 11,041
12/31/2001 $ 10,948 $ 11,038 $ 9,729
12/31/2002 $ 9,333 $ 9,324 $ 7,580
12/31/2003 $ 12,543 $ 12,124 $ 9,753
Value as of 12/31/03
Socially Resposnsive Portfolio $ 12,543
Russell 1000 Value $ 12,124
S&P 500 $ 9,753
This chart shows the value of a hypothetical $10,000 investment in the Fund over
the past 10 fiscal years, or since the Fund's inception, if it has not operated
for 10 years. The results are compared with benchmarks, which may include a
broad-based market index and or a narrower index. Please note that market
indexes do not include expenses. All results include the reinvestment of
dividends and capital gain distributions. Results represent past performance and
do not indicate future results.
At the beginning of 2003, we believed that if the Iraq crisis could be resolved
quickly, restoring consumer and business confidence, the economy would finally
begin gaining momentum. Fortunately, that's what happened. Equities investors
responded favorably to the easing of global tensions and better economic news,
and the stock market performed exceptionally well in 2003.
Our financial services sector holdings made the largest contribution to
portfolio returns, followed by our information technology, consumer
discretionary, and healthcare sector investments. Stock selection in the
technology and health care sectors was largely responsible for the portfolio's
superior relative returns. We had a negative return in just one sector
category--consumer staples, where one of the two stocks we owned declined.
While we seek to invest only in socially responsive companies, we are always
biased toward industry leading companies that we believe are undervalued with
prospects for above average earnings growth. In our opinion, these are the
kinds of companies most likely to outperform over our targeted three-to
five-year holding period. But, as we entered 2003, we also wanted to position
the portfolio in front of the economic recovery we anticipated. So, we began
paying particular attention to industry leading companies in economically
sensitive sectors
2
such as technology and industrials. Because of their competitive advantages and
positive secular trends in their business niches, these portfolio companies
performed relatively well prior to this year's economic rebound. With the
economy gaining momentum, these high quality cyclicals performed exceptionally
well in 2003. Praxair is a good example of how this strategy rewarded us.
Praxair is the world's largest provider of industrial gases used in various
manufacturing processes. Because Praxair has focused on developing technologies
that use industrial gases to reduce energy consumption and help purify emissions
in a variety of manufacturing processes, it qualifies as a good corporate
citizen. Its leadership in this field has also helped support earnings during
the long slump in manufacturing. Praxair also fit nicely into our theme of
buying what we believe to be high quality companies in economically sensitive
businesses. Looking forward, we believe that as the manufacturing sector
continues to recover, Praxair's capacity utilization should increase
significantly, producing considerable earnings leverage. We are stock pickers,
not economists. However, as you have seen, our outlook on the economy does play
a role in guiding us to potential investment opportunities. Looking into 2004,
although we expect GDP growth to moderate, we believe increases in business
investment and tech oriented capital spending can adequately compensate for any
potential slowdown in consumer spending. However, we doubt equities returns will
match last year's, simply because valuations are no longer as attractive. Our
best guess is that in the years ahead, the market will regress to the mean,
providing high single-digit to low double-digit returns. However, we remain
confident that our research-based approach to identifying what we believe to be
high quality, well-positioned, socially responsive companies trading at
discounted valuations can continue to produce satisfactory results.
Sincerely,
/S/ ARTHUR MORETTI
- ------------------
/S/INGRID DYOTT
- ---------------
ARTHUR MORETTI AND INGRID DYOTT
PORTFOLIO CO-MANAGERS
1. 34.39% and 4.76% were the average annual total returns for the 1-year and
since inception (02/18/99) periods ended December 31, 2003. Neuberger Berman
Management Inc. ("NBMI") has agreed to absorb certain expenses of the AMT
Portfolios. Without this arrangement, which is subject to change, the total
returns of the Portfolios would be less. Total return includes reinvestment of
dividends and capital gain distributions. Performance data quoted represent
past performance and the investment return and principal value of an investment
will fluctuate so that the shares, when redeemed, may be worth more or less
than original cost. The performance information does not reflect fees and
expenses of the insurance companies.
3
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
2. The S&P 500 Index is widely regarded as the standard for measuring large-cap
U.S. stock market performance and includes a representative sample of leading
companies in leading industries. The Russell 1000[RegTM]Index measures the
performance of the 1,000 largest companies in the Russell 3000[RegTM] Index
(which measures the performance of the 3,000 largest U.S. companies based on
total market capitalization). The Russell 1000 Index represents approximately
92% of the total market capitalization of the Russell 3000 Index. The Russell
1000 Value Index measures the performance of those Russell 1000 companies with
lower price-to-book ratios and lower forecasted growth values. 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 these indices are prepared
or obtained by NBMI and include reinvestment of all dividends and capital gain
distributions. The Portfolio may invest directly in many securities not
included in the above-described indices.
The composition, industries and holdings of the Portfolio are subject to
change.
The investments for the Portfolio are managed by the same portfolio manager(s)
who manage one or more other mutual funds that have similar names, investment
objectives and investment styles as the Portfolio. You should be aware that the
Portfolio is likely to differ from the other mutual funds in size, cash flow
pattern and tax matters. Accordingly, the holdings and performance of the
Portfolio can be expected to vary from those of the other mutual funds.
Shares of the separate Portfolios of Neuberger Berman Advisers Management Trust
are sold only through the currently effective prospectus and are not available
to the general public. Shares of this Portfolio may be purchased only by life
insurance companies to be used with their separate accounts that fund variable
annuity and variable life insurance policies and by qualified pension and
retirement plans.
(C) 2004 Neuberger Berman Management Inc., distributor. All rights reserved.
4
Schedule of Investments Socially Responsive Portfolio
- -----------------------------------------------------
Number of Shares Market Value+
Common Stocks (94.8%)
Banking & Financial (7.7%)
3,950 Fifth Third Bancorp $ 233,445
3,450 MBNA Corp. 85,732
5,250 State Street 273,420
-----------
592,597
Business Services (3.3%)
5,500 Manpower Inc. 258,940
Consumer Cyclicals (4.3%)
4,900 Mattel Inc. 94,423
6,220 Target Corp. 238,848
-----------
333,271
Diversified (3.5%)
2,925 Danaher Corp. 268,369
Energy (2.3%)
3,660 BP PLC ADR 180,621
Financial Services (7.0%)
2,275 Ambac Financial Group 157,862
3,685 Citigroup Inc. 178,870
2,050 Goldman Sachs 202,397
-----------
539,129
Health Products & Services (6.6%)
3,450 Quest Diagnostics 252,229
4,470 UnitedHealth Group 260,065
-----------
512,294
Industrial Gases (3.7%)
7,500 Praxair, Inc. 286,500
Insurance (5.8%)
2,405 Progressive Corp. 201,034
7,350 Willis Group Holdings 250,414
-----------
451,448
Media (8.0%)
7,250 Comcast Corp. Class A
Special 226,780*
33,062 Liberty Media 393,107*
-----------
619,887
Oil & Gas (9.1%)
9,150 Cimarex Energy 244,214*
5,400 Helmerich & Payne 150,822
6,965 Newfield Exploration 310,221*
-----------
705,257
Pharmaceutical (4.9%)
2,305 Johnson & Johnson 119,076
3,950 MedImmune, Inc. 100,330*
3,650 Millipore Corp. 157,133*
-----------
376,539
Number of Shares Market Value+
Real Estate (4.6%)
2,700 AMB Property $ 88,776
8,950 Equity Residential 264,114
-----------
352,890
Technology (13.6%)
7,150 Dell Inc. 242,814*
5,050 National Instruments 229,624
7,000 Synopsys, Inc. 236,320*
10,650 Teradyne, Inc. 271,042*\P
2,475 Texas Instruments 72,716
-----------
1,052,516
Telecommunications (3.7%)
11,450 Vodafone Group ADR 286,708
Transportation (3.7%)
4,550 Canadian National Railway 287,924
Utilities (3.0%)
250 National Grid Transco 9,062
31,700 National Grid Transco ADR 226,487
-----------
235,549
Total Common Stocks
(Cost $5,848,770)
7,340,439
-----------
Principal Amount
Repurchase Agreements (8.2%)
$637,000 State Street Bank and
Trust Co., Repurchase
Agreement, 0.78%,
due 1/2/04, dated
12/31/03, Maturity
Value $637,028,
Collateralized by
$480,000 U.S.Treasury
Bonds, 8.13%, due
5/15/21 (Collateral
Value $658,800)
(Cost $637,000) 637,000#
-----------
Short-Term Investments (1.7%)
126,900 N&B Securities Lending
Quality Fund, LLC
(Cost $126,900) 126,900++
-----------
Total Investments (104.7%)
(Cost $6,612,670) 8,104,339##
Liabilities, less cash, receivables and
other assets [(4.7%)]
(362,253)
-----------
Total Net Assets (100.0%) $ 7,742,086
-----------
See Notes to Schedule of Investments 5
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Schedule of Investments Socially Responsive Portfolio
- --------------------------------------------------------------
+ Investment securities of the Fund are valued at the latest sales price
where that price is readily available; securities for which no sales were
reported, unless otherwise noted, are valued at the mean between the
closing bid and asked prices. Securities traded primarily on the NASDAQ
Stock Market are normally valued by the Fund at the NASDAQ Official Closing
Price ("NOCP") provided by NASDAQ each business day. The NOCP is the most
recently reported price as of 4:00:02 p.m., Eastern time, unless that price
is outside the range of the "inside" bid and asked prices (i.e., the bid
and asked prices that dealers quote to each other when trading for their
own accounts); in that case, NASDAQ will adjust the price to equal the
inside bid or asked price, whichever is closer. Because of delays in
reporting trades, the NOCP may not be based on the price of the last trade
to occur before the market closes. The Fund values all other securities by
a method the Board of Trustees of Neuberger Berman Advisers Management
Trust believes accurately reflects fair value. Numerous factors may be
considered when determining the fair value of a security, including
available analyst, media or other reports, trading in futures or ADRs and
whether the issuer of the security being fair valued has other securities
outstanding. 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.
# At cost, which approximates market value.
## At December 31, 2003, the cost of investments for U.S. Federal income tax
purposes was $6,649,449. Gross unrealized appreciation of investments was
$1,466,974 and gross unrealized depreciation of investments was $12,084,
resulting in net unrealized appreciation of $1,454,890, based on cost for
U.S. Federal income tax purposes.
* Non-income producing security.
\P All or a portion of this security is on loan (see Note A of Notes to
Financial Statements).
++ Affiliated issuer (see Note A of Notes to Financial Statements).
See Notes to Financial Statements 6
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Assets and Liabilities
- -----------------------------------
Socially
Responsive
Neuberger Berman Advisers Management Trust Portfolio
Assets
Investments in securities, at market value*+ (Note A)-see Schedule of Investments:
- ------------------------------------------------------------------------------------------------
Unaffiliated issuers $7,977,439
- ------------------------------------------------------------------------------------------------
Non-controlled affiliated issuers 126,900
================================================================================================
8,104,339
================================================================================================
Cash 219
- ------------------------------------------------------------------------------------------------
Dividends and interest receivable 14,526
================================================================================================
Receivable for securities sold 21,638
- ------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 3,387
================================================================================================
Receivable from administrator-net (Note B) 330
- ------------------------------------------------------------------------------------------------
Prepaid expenses and other assets 83
================================================================================================
Total Assets 8,144,522
================================================================================================
Liabilities
Payable for collateral on securities loaned (Note A) 126,900
================================================================================================
Payable for securities purchased 227,071
- ------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 3,277
================================================================================================
Payable to investment manager (Note B) 3,341
- ------------------------------------------------------------------------------------------------
Accrued expenses and other payables 41,847
================================================================================================
Total Liabilities 402,436
================================================================================================
Net Assets at value $7,742,086
================================================================================================
Net Assets consist of:
Paid-in capital $6,450,780
================================================================================================
Accumulated net realized gains (losses) on investments (200,544)
- ------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) in value of investments 1,491,850
================================================================================================
Net Assets at value $7,742,086
================================================================================================
Shares Outstanding ($.001 par value; unlimited shares authorized) 627,032
================================================================================================
Net Asset Value, offering and redemption price per share $ 12.35
================================================================================================
+Securities of unaffiliated issuers on loan, at market value $ 119,615
================================================================================================
*Cost of investments:
Unaffiliated issuers $6,485,770
================================================================================================
Non-controlled affiliated issuers 126,900
================================================================================================
Total cost of investments $6,612,670
================================================================================================
See Notes to Financial Statements 7
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST FOR THE YEAR ENDED DECEMBER 31, 2003
Statement of Operations
- -----------------------
Socially
Responsive
Neuberger Berman Advisers Management Trust Portfolio
Investment Income
Income:
Dividend income $ 72,132
======================================================================================================
Interest income (Note A) 3,556
- ------------------------------------------------------------------------------------------------------
Income from securities loaned-net (Note A) 1,987
======================================================================================================
Foreign taxes withheld (Note A) (1,781)
======================================================================================================
Total income 75,894
======================================================================================================
Expenses:
Investment management fee (Note B) 33,065
======================================================================================================
Administration fee (Note B) 18,036
- ------------------------------------------------------------------------------------------------------
Audit fees 24,943
======================================================================================================
Custodian fees (Note B) 21,976
- ------------------------------------------------------------------------------------------------------
Insurance expense 95
======================================================================================================
Legal fees 813
- ------------------------------------------------------------------------------------------------------
Shareholder reports 9,894
======================================================================================================
Trustees' fees and expenses 28,625
- ------------------------------------------------------------------------------------------------------
Miscellaneous 1,024
======================================================================================================
Total expenses 138,471
Expenses reimbursed by administrator (Note B) (57,506)
Expenses reduced by custodian fee expense offset and commission recapture arrangements (238)
======================================================================================================
(Note B)
======================================================================================================
Total net expenses 80,727
======================================================================================================
Net investment income (loss) (4,833)
======================================================================================================
Realized and Unrealized Gain (Loss) on Investments
Net realized gain (loss) on investment securities sold 75,287
======================================================================================================
Change in net unrealized appreciation (depreciation) in value of:
Investment securities (Note A) 1,735,900
- ------------------------------------------------------------------------------------------------------
Foreign currency (Note A) 181
- ------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 1,811,368
======================================================================================================
Net increase (decrease) in net assets resulting from operations $1,806,535
======================================================================================================
See Notes to Financial Statements 8
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Statement of Changes in Net Assets
- ----------------------------------
Socially Responsive Portfolio
-----------------------------
Neuberger Berman Advisers Management Trust Year Ended December 31,
2003 2002
Increase (Decrease) in Net Assets:
From Operations:
Net investment income (loss) $ (4,833) $ (2,825)
=================================================================================================================
Net realized gain (loss) on investments 75,287 (157,709)
- -----------------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of investments 1,736,081 (440,764)
=================================================================================================================
Net increase (decrease) in net assets resulting from operations 1,806,535 (601,298)
=================================================================================================================
From Fund Share Transactions:
Proceeds from shares sold 3,210,506 3,237,417
=================================================================================================================
Payments for shares redeemed (2,247,312) (1,301,500)
=================================================================================================================
Net increase (decrease) from Fund share transactions 963,194 1,935,917
=================================================================================================================
Net Increase (Decrease) in Net Assets 2,769,729 1,334,619
Net Assets:
Beginning of year 4,972,357 3,637,738
=================================================================================================================
End of year $ 7,742,086 $ 4,972,357
=================================================================================================================
Undistributed (distributions in excess of) net investment income at end of year $ - $ 602
=================================================================================================================
Number of Fund Shares:
Sold 298,458 336,037
=================================================================================================================
Redeemed (212,199) (132,582)
=================================================================================================================
Net increase (decrease) in shares outstanding 86,259 203,455
=================================================================================================================
See Notes to Financial Statements 9
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Financial Statements Socially Responsive Portfolio
- -----------------------------------------------------------
Note A--Summary of Significant Accounting Policies:
1 General: Socially Responsive Portfolio (the "Fund") is a separate operating
series of Neuberger Berman Advisers Management Trust (the "Trust"), a
Delaware statutory trust organized pursuant to a Trust Instrument dated May
23, 1994. The Trust is currently comprised of ten separate operating series
(each a "Series," collectively, the "Funds") each of which (except Focus
Portfolio) is diversified. The Trust is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended, and its shares are registered under the Securities Act of 1933, as
amended. The Fund currently offers only Class I shares. The Trustees of the
Trust may establish additional series or classes of shares without the
approval of shareholders.
The assets of each Series of the Trust belong only to that Series, and the
liabilities of each Series are borne solely by that Series and no other.
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires Neuberger
Berman Management Inc. ("Management") to make estimates and assumptions at
the date of the financial statements. Actual results could differ from
those estimates.
2 Portfolio valuation: Investment securities are valued as indicated in the
notes following the Schedule of Investments.
3 Foreign currency translation: The accounting records of the Fund 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. Net unrealized
foreign currency gain (loss) arises from changes in the value of assets and
liabilities, other than investments in securities, as a result of changes
in exchange rates and are stated separately in the Statement of Operations.
4 Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the
ex-dividend date or, for certain foreign dividends, as soon as the Fund
becomes aware of the dividends. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, including accretion of original issue discount,
where applicable, and accretion of discount on short-term investments, 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 and stated separately in the Statement of Operations.
Included in net realized gain (loss) on investment securities sold are
proceeds from the settlement of class action litigation in which the Fund
participated as a plaintiff. The amount of such proceeds for the year ended
December 31, 2003 was $95.
5 Federal income taxes: The Funds are treated as separate entities 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
10
Notes to Financial Statements Socially Responsive Portfolio cont'd
- ------------------------------------------------------------------
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.
6 Dividends and distributions to shareholders: The Fund may earn income, net
of expenses, daily on its investments. Income dividends and distributions
from net realized capital gains, if any, generally are distributed in
October. Income dividends and capital gain distributions to shareholders
are recorded on the ex-dividend date. To the extent the Fund's net realized
capital gains, if any, can be offset by capital loss carryforwards
($163,765 expiring in 2010, determined as of December 31, 2003), it is the
policy of the Fund not to distribute such gains.
The Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a tax 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 in the components of net assets on the
Statement of Assets and Liabilities.
As of December 31, 2003, the components of distributable earnings
(accumulated losses) on a U.S. Federal income tax basis were as follows:
Unrealized Loss
Appreciation Carryforwards
(Depreciation) and Deferrals Total
$1,455,071 $(163,765) $1,291,306
The difference between book basis and tax basis is attributable primarily
to net operating losses, the tax deferral of losses on wash sales and the
recharacterization of income due to REIT holdings.
7 Expense allocation: Expenses directly attributable to a Series are charged
to that Series. Expenses of the Trust that are not directly attributed to a
Series are allocated among the Funds, on the basis of relative net assets,
except where a more appropriate allocation of expenses to each of the Funds
can otherwise be made fairly. Expenses borne by the complex of related
investment companies, which includes open-end and closed-end investment
companies for which Management serves as investment adviser, that are not
directly attributed to a Series or the Trust, are allocated among the Funds
and the other investment companies in the complex or series thereof, on the
basis of relative net assets, except where a more appropriate allocation of
expenses to each investment company in the complex or series thereof can
otherwise be made fairly.
8 Security lending: Pursuant to an Exemptive Order issued by the Securities
and Exchange Commission, the Fund entered into a Securities Lending
Agreement ("Agreement") with Neuberger Berman, LLC ("Neuberger") on April
17, 2003. Securities loans involve certain risks in the event a borrower
should fail financially, including delays or inability to recover the lent
securities or foreclose against the collateral. The investment manager,
under the general supervision of the Trust's Board of Trustees, monitors
the
11
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
creditworthiness of the parties to whom the Fund makes security loans. The
Fund will not lend securities on which covered call options have been
written, or lend securities on terms which would prevent the Fund from
qualifying as a regulated investment company. The Fund receives cash
collateral equal to at least 102% of the current market value of the loaned
securities. The Fund invests the cash collateral in the N&B Securities
Lending Quality Fund, LLC ("investment vehicle"), which is managed by State
Street Bank and Trust Company ("State Street") pursuant to guidelines
approved by the Trust's investment manager. Neuberger guarantees a minimum
revenue to the Fund under the Agreement, and receives a portion of any
revenue earned in excess of the guaranteed amount as a lending agency fee.
At December 31, 2003, the Fund paid Neuberger $256 under the Agreement.
Prior to April 17, 2003, the Fund had a Securities Lending Agreement with
Morgan Stanley & Co. Incorporated ("Morgan"). The Fund received cash
collateral equal to at least 100% of the current market value of the loaned
securities. The Fund invested the cash collateral in the investment
vehicle. Income earned on the investment vehicle was paid to Morgan
monthly. The Fund received a fee, payable monthly, negotiated by the Fund
and Morgan, based on the number and duration of the lending transactions.
Income earned on the securities loaned, if any, is reflected in the
Statement of Operations under the caption Income from securities
loaned-net.
9 Repurchase agreements: The Fund may enter into repurchase agreements with
institutions that the Fund's investment manager has determined are
creditworthy. Each repurchase agreement is recorded at cost. The Fund
requires that the securities purchased in a repurchase transaction be
transferred to the custodian in a manner sufficient to enable the Fund to
obtain those securities in the event of a default under the repurchase
agreement. The Fund 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 Fund under each such repurchase agreement.
10 Foreign taxes: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
Note B--Management Fees, Administration Fees, Distribution Arrangements,
and Other Transactions with Affiliates: Fund shares are issued and redeemed
in connection with investments in and payments under certain variable
annuity contracts and variable life insurance policies issued through
separate accounts of life insurance companies and are also offered directly
to qualified pension and retirement plans.
The Fund retains Management as its investment manager under a Management
Agreement. For such investment management services, the Fund pays
Management a fee at the annual rate of 0.55% of the first $250 million of
the Fund's average daily net assets, 0.525% of the next $250 million, 0.50%
of the next $250 million, 0.475% of the next $250 million, 0.45% of the
next $500 million, 0.425% of the next $2.5 billion, and 0.40% of average
daily net assets in excess of $4 billion.
The Fund retains 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 0.30% of the Fund's
average daily net assets. Additionally, Management retains State Street as
its
12
Notes to Financial Statements Socially Responsive Portfolio cont'd
sub-administrator under a Sub-Administration Agreement. Management pays
State Street a fee for all services received under the agreement.
The Trustees of the Trust adopted a non-fee distribution plan for the Fund.
Management has contractually undertaken through December 31, 2006 to
reimburse the Fund for its operating expenses (including the fees payable
to Management, but excluding interest, taxes, brokerage commissions,
extraordinary expenses, and transaction costs) ("Operating Expenses") which
exceed, in the aggregate, 1.50% per annum of the Fund's average daily net
assets (the "Expense Limitation"). Moreover, Management has voluntarily
committed to reimburse certain expenses, as stated above, for an additional
0.20% per annum of the Fund's average daily net assets to maintain the
Fund's Operating Expenses at 1.30%. Management may, at its sole discretion,
terminate this additional voluntary reimbursement commitment without
notice. For the year ended December 31, 2003, such excess expenses amounted
to $57,506. The Fund has agreed to repay Management through December 31,
2009 for its excess Operating Expenses previously reimbursed by Management,
so long as its annual Operating Expenses during that period do not exceed
its Expense Limitation, and the repayment is made within three years after
the year in which Management issued the reimbursement. During the year
ended December 31, 2003, there was no reimbursement to Management under
this agreement. At December 31, 2003, the Fund has a contingent liability
to Management under this agreement of $172,131, not repaid through December
31, 2003.
On October 31, 2003, Management and Neuberger, a member firm of the New
York Stock Exchange and sub-adviser to the Fund, became indirect wholly
owned subsidiaries of Lehman Brothers Holdings Inc. ("Lehman"), a
publicly-owned holding company (the "Transaction"). Upon completion of the
Transaction, the Trust's management and sub-advisory agreements
automatically terminated. To provide for continuity of management, the
shareholders of the Fund voted on September 23, 2003, to approve new
management and sub-advisory agreements, which took effect upon closing of
the Transaction (see Report of Votes of Shareholders). Neuberger is
retained by Management to furnish it with investment recommendations and
research information without added cost to the Fund. Several individuals
who are officers and/or Trustees of the Trust are also employees of
Neuberger and/or Management.
On July 1, 2003, the Fund entered into a commission recapture program,
which enables it to pay some of its operational expenses by recouping a
portion of the commissions it pays to a broker that is not a related party
of the Fund. Expenses paid through this program may include costs of
custodial, transfer agency or accounting services. The impact of this
arrangement was a reduction of $224.
The Fund 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 $14.
13
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Note C--Securities Transactions:
During the year ended December 31, 2003, there were purchase and sale
transactions (excluding short-term securities) of $3,362,941 and
$2,578,683, respectively.
During the year ended December 31, 2003, brokerage commissions on
securities transactions amounted to $8,618, of which Neuberger received
$5,198, Lehman received $60, and other brokers received $3,360.
Note D--Line of Credit:
At December 31, 2003, the Fund was a participant in a single committed,
unsecured $150,000,000 ($200,000,000 prior to September 26, 2003) line of
credit with State Street, to be used only for temporary or emergency
purposes. Interest is charged on borrowings under this agreement at the
overnight Federal Funds Rate plus 0.50% per annum. A facility fee of 0.10%
per annum of the available line of credit is charged, of which the Fund has
agreed to pay its pro rata share, based on the ratio of its individual net
assets to the net assets of all participants at the time the fee is due and
payable. The fee is paid quarterly in arrears. No compensating balance is
required. Other investment companies managed by Management also participate
in this line of credit on the same terms. Because several investment
companies participate, there is no assurance that the Fund will have access
to the entire $150,000,000 at any particular time. The Fund had no loans
outstanding pursuant to this line of credit at December 31, 2003, nor had
the Fund utilized this line of credit at any time prior to that date.
14
Financial Highlights Socially Responsive Portfolio+
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements.++
Period from
February 18, 1999^
Year Ended December 31, to December 31,
------------------------------------------------------------------
2003 2002 2001 2000 1999
Net Asset Value, Beginning of Period $ 9.19 $ 10.78 $ 11.17 $ 11.54 $ 10.00
-------- ------- ------- ------- --------
Income From Investment Operations
Net Investment Income (Loss) (.01) (.01) - (.04) .03
Net Gains or Losses on Securities
(both realized and unrealized) 3.17 (1.58) (.39) (.17) 1.51
-------- ------- -------- ------- --------
Total From Investment Operations 3.16 (1.59) (.39) (.21) 1.54
-------- ------- -------- ------- --------
Less Distributions
From Net Investment Income - - - (.03) -
From Net Capital Gains - - - (.13) -
-------- ------- -------- ------- ---------
Total Distributions - - - (.16) -
-------- ------- -------- ------- ---------
Net Asset Value, End of Period $ 12.35 $ 9.19 $ 10.78 $ 11.17 $ 11.54
-------- ------- -------- ------- ---------
Total Return++ +34.39% -14.75% -3.58% -1.61% +15.40%**
Ratios/Supplemental Data
Net Assets, End of Period (in millions) $ 7.7 $ 5.0 $ 3.6 $ 2.2 $ 1.3
Ratio of Gross Expenses to Average
Net Assets# 1.35% 1.52% 1.59% 1.68% 1.68%*
Ratio of Net Expenses to Average
Net Assets[sec] 1.34% 1.51% 1.53% 1.54% 1.53%*
Ratio of Net Investment Income (Loss) to
Average Net Assets (.08)% (.07)% .04% (.33)% .35%*
Portfolio Turnover Rate 45% 38% 277% 92% 72%
See Notes to Financial Highlights 15
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Notes to Financial Highlights Socially Responsive Portfolio
- -----------------------------------------------------------
+ The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of AMT Socially
Responsive Investment's income and expenses through April 30, 2000 under
the prior master/feeder fund structure.
++ 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. The
total return information shown does not reflect charges and other expenses
that apply to the separate account or the related insurance policies, and
the inclusion of these charges and other expenses would reduce the total
return for all fiscal periods shown.
# The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset and
commission recapture arrangements.
sec After reimbursement of expenses by Management. Had Management not
undertaken such action the annualized ratios of net expenses to average
daily net assets would have been:
Period from
Year Ended December 31, February 18, 1999
2003 2002 2001 2000 to December 31, 1999
2.30% 2.87% 4.33% 2.40% 9.04%
^ The date investment operations commenced.
++ The per share amounts which are shown have been computed based on the
average number of shares outstanding during each fiscal period.
* Annualized.
** Not annualized.
16
Report of Ernst & Young LLP, Independent Auditors
To the Board of Trustees of
Neuberger Berman Advisers Management Trust and
Shareholders of Socially Responsive Portfolio
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Socially Responsive Portfolio, one of the
series constituting the Neuberger Berman Advisers Management Trust (the
"Trust"), as of December 31, 2003, 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 December 31, 2003, 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
Socially Responsive Portfolio of Neuberger Berman Advisers Management Trust at
December 31, 2003, 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 its 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
February 6, 2004
17
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Trustees and Officers (Unaudited)
- ---------------------------------
The following tables set forth information concerning the trustees and officers
of the Trust. All persons named as trustees and officers also serve in similar
capacities for other funds administered or managed by NB Management and
Neuberger Berman. The Statement of Additional Information includes additional
information about fund trustees and is available upon request, without charge,
by calling (800) 877-9700.
Information about the Board of Trustees
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
John Cannon (73) Trustee since Consultant. Formerly, Chairman 37 Independent Trustee or Director of
2000 and Chief Investment Officer, three series of Oppenheimer Funds:
CDC Capital Management Limited Term New York Municipal
(registered investment adviser), Fund, Rochester Fund Municipals,
1993-January 1999; prior thereto, and Oppenheimer Convertible
President and Chief Executive Securities Fund since 1992.
Officer, AMA Investment
Advisors, an affiliate of the
American Medical Association.
- ------------------------------------------------------------------------------------------------------------------------------------
Faith Colish (68) Trustee since Counsel, Carter Ledyard & 37 Director, American Bar Retirement
1984 Milburn LLP (law firm) since Association (ABRA) since 1997
October 2002; Formerly, (not-for-profit membership
Attorney-at-Law and President, association).
Faith Colish, A Professional
Corporation, 1980 to 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Walter G. Ehlers (70) Trustee since Consultant; Retired President 37 None.
1989 and Trustee, Teachers Insurance
& Annuity (TIAA) and College
Retirement Equities Fund
(CREF).
- ------------------------------------------------------------------------------------------------------------------------------------
C. Anne Harvey (66) Trustee since Consultant, C. A. Harvey 37 Formerly, Member, Individual
1998 Associates, since June 2001; Investors Advisory Committee to the
Formerly, Director, AARP, 1978 New York Stock Exchange Board of
to December 2001. Directors, 1998 to June 2002;
President, Board of Associates to
The National Rehabilitation
Hospital's Board of Directors, 2002;
Member, American Savings
Education Council's Policy Board
(ASEC), 1998-2000; Member,
Executive Committee, Crime
Prevention Coalition of America,
1997-2000.
- ------------------------------------------------------------------------------------------------------------------------------------
18
Trustees and Officers (Unaudited) cont'd
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Barry Hirsch (70) Trustee since Attorney-at-Law. Senior 37 None.
2000 Counsel, Loews Corporation
(diversified financial corporation)
May 2002 until April 2003; prior
thereto, Senior Vice President,
Secretary and General Counsel,
Loews Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
Robert A. Kavesh (76) Trustee since Marcus Nadler Professor of 37 Director, DEL Laboratories, Inc.
2000 Finance and Economics (cosmetics and pharmaceuticals)
Emeritus, New York University, since 1978; The Caring Community
Stern School of Business. ( not-for-profit).
- ------------------------------------------------------------------------------------------------------------------------------------
Howard A. Mileaf (67) Trustee since Retired. Formerly, Vice 37 Director, WHX Corporation
1999 President and Special Counsel, (holding company) since August
WHX Corporation (holding 2002; Director, WebFinancial
company), 1993-2001. Corporation (holding company)
since December 2002; Director, State
Theatre of New Jersey (not-for-
profit theater), since 2000; Formerly,
Director, Kevlin Corporation
(manufacturer of microwave and
other products).
- ------------------------------------------------------------------------------------------------------------------------------------
John P. Rosenthal (71) Trustee since Senior Vice President, Burnham 37 Director, 92nd Street Y (non-profit),
2000 Securities Inc. (a registered since 1967; Formerly, Director,
broker-dealer) since 1991. Cancer Treatment Holdings, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
William E. Rulon (71) Trustee since Retired. Senior Vice President, 37 Director, Pro-Kids Golf and
2000 Foodmaker, Inc. (operator and Learning Academy (teach golf and
franchiser of restaurants) until computer usage to "at risk" children),
January 1997. since 1998; Director, Prandium, Inc.
(restaurants) from March 2001 until
July 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Cornelius T. Ryan (72) Trustee since Founding General Partner, 37 Director, Capital Cash Management
2000 Oxford Partners and Oxford Trust (money market fund),
Bioscience Partners (venture Narragansett Insured Tax-Free
capital partnerships) and Income Fund, Rocky Mountain
President, Oxford Venture Equity Fund, Prime Cash Fund,
Corporation. several private companies and
QuadraMed Corporation
(NASDAQ).
- ------------------------------------------------------------------------------------------------------------------------------------
19
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Position and Fund Complex
Independent Trustees Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Tom Decker Seip (53) Trustee since General Partner, Seip 37 Director, H&R Block, Inc. (financial
2000 Investments LP (a private services company) since May 2001;
investment partnership); Formerly, Director, General Magic
President and CEO, Westaff, (voice recognition software), 2001-
Inc. (temporary staffing), May 2002; Director, Forward
2001 to January 2002; Senior Management, Inc. (asset
Executive at the Charles management) since 2001; Formerly,
Schwab Corporation from 1983 Director, E-Finance Corporation
to 1999, including Chief (credit decisioning services), 1999-
Executive Officer, Charles 2003; Director, Save-Daily.com
Schwab Investment (micro investing services), 1999-
Management, Inc. and Trustee, 2003; Director, Offroad Capital Inc.
Schwab Family of Funds and (pre-public internet commerce
Schwab Investments from 1997 company).
to 1998 and Executive Vice
President-Retail Brokerage,
Charles Schwab Investment
Management from 1994 to
1997.
- ------------------------------------------------------------------------------------------------------------------------------------
Candace L. Straight (56) Trustee since Private investor and consultant 37 Director, Providence Washington
1999 specializing in the insurance (property and casualty insurance
industry; Formerly, Advisory company), since December 1998;
Director, Securitas Capital LLC Director, Summit Global Partners
(a global private equity (insurance brokerage firm) since
investment firm dedicated to October 2000.
making investments in the
insurance sector), 1998 until
December 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
Peter P. Trapp (59) Trustee since Regional Manager for Atlanta 37 None.
1984 Region, Ford Motor Credit
Company since August 1997;
prior thereto, President, Ford
Life Insurance Company, April
1995 until August 1997.
- ------------------------------------------------------------------------------------------------------------------------------------
20
Trustees and Officers (Unaudited) cont'd
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Edward I. O'Brien* (75) Trustee since Formerly, Member, Investment 37 Director, Legg Mason, Inc. (financial
2000 Policy Committee, Edward services holding company), since
Jones, 1993-2001; President, 1993; Director, Boston Financial
Securities Industry Association Group (real estate and tax shelters)
("SIA") (securities industry's 1993-1999.
representative in government
relations and regulatory matters
at the federal and state levels)
1974-1992; Adviser to SIA,
November 1992-November
1993.
- ------------------------------------------------------------------------------------------------------------------------------------
Jack L. Rivkin* (63) President and Executive Vice President, 37 Director, Dale Carnegie and
Trustee since Neuberger Berman Inc. Associates, Inc. (private company)
December (holding company) since 2002; since 1998; Director, Emagin Corp.
2002 Executive Vice President and (public company) since 1997;
Chief Investment Officer, Director, Solbright, Inc. (private
Neuberger Berman since 2002 company) since 1998; Director,
and 2003, respectively; Head of Infogate, Inc. (private company)
Research and Research Sales since 1997.
and Trading Departments of
Neuberger Berman since 2002;
Director and Chairman, NB
Management since December
2002; Formerly, Executive Vice
President, Citigroup
Investments, Inc. from
September 1995 to February
2002; Executive Vice President,
Citigroup Inc. from September
1995 to February 2002.
- ------------------------------------------------------------------------------------------------------------------------------------
21
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Portfolios in
Trustees who are Position and Fund Complex
"Interested Persons" Length of Time Overseen by Other Directorships Held Outside Fund
Name, Age, and Address (1) Served (2) Principal Occupation(s) (3) Trustee Complex by Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Peter E. Sundman* (44) Chairman of Executive Vice President, 37 Executive Vice President, Neuberger
the Board, Neuberger Berman since 1999; Berman Inc. (holding company)
Chief Formerly, Principal, Neuberger since 1999 and Formerly, Director
Executive Berman from 1997 until 1999; from October 1999 through March
Officer and Senior Vice President, NB 2003; President and Director, NB
Trustee since Management from 1996 until Management since 1999; Head of
2000; 1999. Neuberger Berman Inc.'s Mutual
President and Funds and Institutional Business
Chief since 1999; Director and Vice
Executive President, Neuberger & Berman
Officer from Agency, Inc. since 2000; Trustee,
1998 to 2000 Frost Valley YMCA.
- ------------------------------------------------------------------------------------------------------------------------------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the Trust's Trust Instrument, each Trustee shall hold office
for life or until his or her successor is elected or the Trust terminates;
except that (a) any Trustee may resign by delivering a written resignation;
(b) any Trustee may be removed with or without cause at any time by a
written instrument signed by at least two-thirds of the other Trustees; (c)
any Trustee who requests to be retired, or who has become unable to serve,
may be retired by a written instrument signed by a majority of the other
Trustees; and (d) any Trustee may be removed at any shareholder meeting by
a vote of at least two-thirds of the outstanding shares.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
* Indicates a Trustee who is an "interested person" within the meaning of the
1940 Act. Mr. Sundman and Mr. Rivkin are interested persons of the Trust by
virtue of the fact that they are officers and/or directors of NB Management
and Executive Vice Presidents of Neuberger Berman. Mr. O'Brien is an
interested person of the Trust by virtue of the fact that he is a director
of Legg Mason, Inc., a wholly owned subsidiary of which, from time to time,
serves as a broker or dealer to the Funds and other funds for which NB
Management serves as investment manager.
22
Trustees and Officers (Unaudited) cont'd
- ----------------------------------------
Information about the Officers of the Trust
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
- --------------------------------------------------------------------------------------------------------------------
Claudia A. Brandon (47) Secretary since 1985 Vice President, Neuberger Berman since 2002 and
employee since 1999; Vice President-Mutual Fund Board
Relations, NB Management since 2000; Vice President,
NB Management from 1986 to 1999; Secretary,
ten registered investment companies for which
NB Management acts as investment manager and
administrator (four since 2002 and three since 2003).
Robert Conti (47) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President, Neuberger Berman from 1999 until 2003;
Senior Vice President, NB Management since 2000;
Controller, NB Management until 1996; Treasurer,
NB Management from 1996 until 1999; Vice President,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (three since 2000, four since 2002 and
three since 2003).
Brian P. Gaffney (50) Vice President since 2000 Managing Director, Neuberger Berman since 1999;
Senior Vice President, NB Management since 2000;
Vice President, NB Management from 1997 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Sheila R. James (38) Assistant Secretary since 2002 Employee, Neuberger Berman since 1999; Employee,
NB Management from 1991 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
Kevin Lyons (48) Assistant Secretary since Employee, Neuberger Berman since 1999; Employee,
March 2003 NB Management from 1993 to 1999; Assistant Secretary,
ten registered investment companies for which NB
Management acts as investment manager and
administrator (since 2003).
John M. McGovern (33) Assistant Treasurer since 2002 Employee, NB Management since 1993; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
23
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST DECEMBER 31, 2003
Position and
Name, Age, and Address (1) Length of Time Served (2) Principal Occupation(s) (3)
- --------------------------------------------------------------------------------------------------------------------
Barbara Muinos (45) Treasurer and Principal Financial Vice President, Neuberger Berman since 1999; Assistant
and Accounting Officer since 2002; Vice President, NB Management from 1993 to 1999;
prior thereto, Assistant Treasurer Treasurer and Principal Financial and Accounting
since 1996 Officer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003);
Assistant Treasurer of three registered investment
companies for which NB Management acts as investment
manager and administrator from 1996 until 2002.
Frederic B. Soule (57) Vice President since 2000 Senior Vice President, Neuberger Berman since 2003;
Vice President; Neuberger Berman from 1999 until 2003;
Vice President, NB Management from 1995 until 1999;
Vice President, ten registered investment companies for
which NB Management acts as investment manager and
administrator (three since 2000, four since 2002 and three
since 2003).
Trani Jo Wyman (34) Assistant Treasurer since 2002 Employee, NB Management since 1991; Assistant
Treasurer, ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three since 2003).
- -------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Pursuant to the By-Laws of the Trust, each officer elected by the Trustees
shall hold office until his or her successor shall have been elected and
qualified or until his or her earlier death, inability to serve, or
resignation. Officers serve at the pleasure of the Trustees and may be
removed at any time with or without cause.
(3) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
24
Report of Votes of Shareholders (Unaudited)
- -------------------------------------------
A special meeting of shareholders of Neuberger Berman Advisers Management Trust
Socially Responsive Portfolio (the "Fund") was held on September 23, 2003. Upon
completion of the acquisition of Neuberger Berman Inc. by Lehman Brothers
Holdings Inc. (the "Transaction"), the management agreement between the Trust,
on behalf of the Fund, and Neuberger Berman Management Inc. ("NB Management"),
and the sub-advisory agreement with respect to the Trust and each Fund, between
NB Management and Neuberger Berman, LLC automatically terminated. To provide
for continuity of management, the shareholders of the Fund voted on the
following matters, which became effective upon completion of the Transaction on
October 31, 2003:
Proposal 1-To Approve a New Management Agreement between the Trust, on behalf
of the Fund, and NB Management
Votes For Votes Against Abstentions*
555,807.218 7,692.494 17,270.919
Proposal 2-To Approve a New Sub-Advisory Agreement with respect to the Trust
and each Fund, between NB Management and Neuberger Berman, LLC
Votes For Votes Against Abstentions*
555,807.218 7,692.494 17,270.919
* Abstentions were counted as shares that were present and entitled to vote
for purposes of determining a quorum and had a negative effect on the
proposals.
ITEM 2. CODE OF ETHICS
The Registrant's Board of Trustees ("Board") has adopted a code of ethics that
applies to the Registrant's principal executive officer, principal financial
officer, principal accounting officer or controller, or persons performing
similar functions ("Code of Ethics"). A copy of the Code of Ethics is filed as
Exhibit 10(a) to this Form N-CSR. No substantive amendments were approved or
waivers were granted with respect to this Code of Ethics during the period
covered by this report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board has determined that the Registrant has two audit committee financial
experts serving on its audit committee. The Registrant's audit committee
financial experts are John Cannon and Walter G. Ehlers. Mr. Cannon and Mr.
Ehlers are both independent trustees as defined by Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
(a) - (d) Aggregate fees billed to the Registrant for the last two fiscal years
for professional services rendered by the Registrant's principal accountant were
as follows:
2003 2002
Audit Fees $240,400 $155,000
Audit-Related Fees 29,000 26,000
Tax Fees 62,500 66,000
All Other Fees -- --
Audit Fees include amounts related to the audit of the Registrant's annual
financial statements and services normally provided by the principal accountant
in connection with statutory and regulatory filings. Audit-Related Fees include
amounts for attest services not required by statute or regulation. Tax Fees
include amounts related to tax compliance, tax planning, and tax advice.
(e)(1) Pursuant to its charter, the Registrant's audit committee pre-approves
all audit services provided by the Registrant's principal accountant for the
Registrant and all non-audit services provided by the Registrant's principal
accountant for the Registrant, its investment adviser and any entity
controlling, controlled by, or under common control with the investment adviser
("Adviser Affiliate") that provides ongoing services to the Fund, if the
engagement by the investment adviser or Adviser Affiliate relates directly to
the operations and financial reporting of the Registrant.
(2) No services included in (b) - (d) above were approved pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate fees billed for the most recent fiscal year and the preceding
fiscal year by the Registrant's principal accountant for non-audit services
rendered to the Registrant, its investment adviser, and Adviser Affiliate that
provides ongoing services to the Registrant were $366,471 and $338,707,
respectively.
(h) All non-audit services rendered in (g) above were pre-approved by the
Registrant's audit committee. Accordingly, non-audit services rendered to the
Registrant's investment adviser and any Adviser Affiliate that were not
pre-approved pursuant to Paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X
were considered by the Registrant's audit committee as to whether they were
compatible with maintaining the principal accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable to the Registrant.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES
(a) Based on an evaluation of the disclosure controls and procedures (as
defined in rule 30a-2(c) under the Act) as of a date within 90 days of the
filing date of this report, the Chief Executive Officer and Treasurer of
the Registrant have concluded that such disclosure controls and procedures
are effectively designed to ensure that information required to be
disclosed by the Registrant is accumulated and communicated to the
Registrant's management to allow timely decisions regarding required
disclosure.
(b) There were no significant changes in the Registrant's internal controls
over financial reporting (as defined in rule 30a-3(d) under the Act) that
occurred during the Registrant's second fiscal half-year that have
materially affected, or are reasonably likely to materially affect, the
Registrant's internal control over financial reporting.
ITEM 10. EXHIBITS
(a) A copy of the Code of Ethics is filed as Exhibit 10(a).
(b) The certifications required by Rule 30a-2 of the Investment Company Act of
1940, as amended, and Sections 302 and 906 of the Sarbanes-Oxley Act of
2002 are attached hereto.
The certifications provided pursuant to Section 906 of the Sarbanes-Oxley Act
are not deemed "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934 ("Exchange Act"), or otherwise subject to the liability of that section.
Such certifications 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 them by reference.
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.
Neuberger Berman Advisers Management Trust
By: /s/ Peter E. Sundman
Peter E. Sundman
Chief Executive Officer
Date: February 27, 2004
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/ Peter E. Sundman
Peter E. Sundman
Chief Executive Officer
Date: February 27, 2004
By: /s/ Barbara Muinos
Barbara Muinos
Treasurer, Principal Financial
and Accounting Officer
Date: February 27, 2004