Notes to Financial Statements
Legg Mason Income Trust, Inc.
(Amounts in Thousands)
1. Significant Accounting Policies:
The Legg Mason Income Trust, Inc. ("Trust"), consisting of the U.S. Government Intermediate-Term Portfolio
("Government Intermediate"), the Investment Grade Income Portfolio ("Investment Grade"), the High Yield
Portfolio ("High Yield"), and the U.S. Government Money Market Portfolio ("Government Money Market")
(each separately referred to as a "Fund" and collectively as the "Funds") is registered under the Investment
Company Act of 1940, as amended, as an open-end, diversified investment company.
The Government Intermediate and the Investment Grade Portfolios consist of two classes of shares: the Primary
Class, offered since 1987, and the Navigator Class, offered to certain institutional investors since December 1,
1994 and December 1, 1995, respectively. The income and expenses of each of these Funds are allocated
proportionately to the two classes of shares except for Rule 12b-1 distribution fees, which are charged only on
Primary shares, and transfer agent and shareholder servicing expenses, which are determined separately for each
Portfolio securities in Government Intermediate, Investment Grade and High Yield are valued using market
quotations obtained from an independent pricing service. When market quotations are not readily available,
securities are valued based on prices received from recognized broker-dealers in the same or similar securities.
Portfolio securities with 60 days or less remaining to maturity are valued under the amortized cost method, which
approximates current market value.
The investments of Government Money Market are valued on the basis of amortized cost so long as the Fund's
Board of Directors determines that this method constitutes fair value. Under this method, securities are valued at
cost when purchased and, thereafter, a constant proportionate accretion or amortization of any discount or
premium is record