0000889512 2011-12-29 2012-12-28 0000889512 lmpit34:S000008906Member lmpit34:InvMember lmpit34:C000089730Member 2011-12-29 2012-12-28 0000889512 lmpit34:S000008906Member lmpit34:InvMember lmpit34:C000024230Member 2011-12-29 2012-12-28 0000889512 lmpit34:S000008906Member lmpit34:InvMember 2011-12-29 2012-12-28 pure iso4217:USD 2012-12-28 Other 2012-08-31 LEGG MASON PARTNERS INSTITUTIONAL TRUST 0000889512 false 2013-01-02 2013-01-02 0 0 0.002 0.001 0.0003 0.0033 34 106 186 418 0.0108 0.013 0.0319 0.0502 0.0527 0.0298 0.0062 0.0021 0.0017 2002-10-02 0.0217 0.0183 0.0017 Western Asset Institutional Cash Reserves Investment objective The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income as is consistent with preservation of capital. Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Investor Shares of the fund. Shareholder fees (fees paid directly from your investment) (%) Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) Example This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes: <ul type="square"><li style="margin-left:-20px"><blockquote> You invest $10,000 in the fund for the time periods indicated</blockquote></li></ul><ul type="square"><li style="margin-left:-20px"><blockquote> Your investment has a 5% return each year and the fund’s operating expenses remain the same</blockquote></li></ul><ul type="square"><li style="margin-left:-20px"><blockquote> You reinvest all distributions and dividends without a sales charge</blockquote></li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. Number of years you own your shares ($) Principal investment strategies The fund is a money market fund which invests in high quality, U.S. dollar-denominated short-term debt securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. The fund may invest in all types of money market instruments, including bank obligations, commercial paper and asset-backed securities, structured investments, repurchase agreements and other short-term debt securities. These instruments may be issued or guaranteed by all types of issuers, including U.S. and foreign banks and other private issuers, the U.S. government or any of its agencies or instrumentalities, U.S. states and municipalities, or foreign governments. These securities may pay interest at fixed, floating or adjustable rates, or may be issued at a discount. The fund may invest without limit in bank obligations, such as certificates of deposit, fixed time deposits and bankers’ acceptances. The fund generally limits its investments in foreign securities to U.S. dollar denominated obligations of issuers, including banks and foreign governments, located in the major industrialized countries, although with respect to bank obligations, the branches of the banks issuing the obligations may be located in The Bahamas or the Cayman Islands. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Certain risks An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Foreign investments risk. The fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). Performance The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class O shares), a class of the fund that is invested in the same portfolio of securities as Investor Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Investor Shares because there were no Investor Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Total returns (%) Calendar Years ended December 31 Best quarter (12/31/2006): 1.32 Worst quarter (09/30/2011): 0.03 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.15 Average annual total returns (for periods ended December 31, 2011) (%) “Other expenses” for Investor Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class O shares), a class of the fund that is invested in the same portfolio of securities as Investor Shares. 1-877-721-1926 or 1-203-703-6002 The fund’s past performance is not necessarily an indication of how the fund will perform in the future. http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0015 Best quarter 2006-12-31 0.0132 Worst quarter 2011-09-30 0.0003 Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class O shares), a class of the fund that is invested in the same portfolio of securities as Investor Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Investor Shares because there were no Investor Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalCashReserves column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalCashReserves column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalCashReserves column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalCashReservesBarChart column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalCashReserves column period compact * ~</div> "Other expenses" for Investor Shares are estimated for the current fiscal year. Actual expenses may differ from estimates.