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 811-10407

Master Portfolio Trust

(Exact name of registrant as specified in charter)

620 Eighth Avenue, 49^th Floor, New York, NY 10018

(Address of principal executive offices) (Zip code)

Robert I. Frenkel, Esq.

Legg Mason & Co., LLC

100 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

Registrant’s telephone number, including area code: 1-877-721-1926

Date of fiscal year end: August 31

Date of reporting period: February 29, 2016

ITEM 1. REPORT TO STOCKHOLDERS.

The Semi-Annual Report to Stockholders is filed herewith.

Schedule of investments (unaudited)

February 29, 2016

U.S. Treasury Reserves Portfolio

Security	Rate			Maturity Date		Face Amount		Value
Short-Term Investments — 104.5%
U.S. Treasury Bills — 67.8%
U.S. Treasury Bills		0.170-0.270	%		3/3/16	$	1,807,344,000	$	1,807,317,468	(a)
U.S. Treasury Bills		0.250-0.275	%		3/10/16		2,050,000,000		2,049,866,407	(a)
U.S. Treasury Bills		0.205-0.270	%		3/17/16		2,360,000,000		2,359,730,291	(a)
U.S. Treasury Bills		0.215-0.285	%		3/24/16		2,828,146,000		2,827,662,828	(a)
U.S. Treasury Bills		0.270	%		3/31/16		500,000,000		499,895,000	(a)
U.S. Treasury Bills		0.220-0.233	%		4/14/16		679,667,000		679,476,916	(a)
U.S. Treasury Bills		0.110	%		4/21/16		210,000,000		209,967,275	(a)
U.S. Treasury Bills		0.155-0.300	%		4/28/16		750,000,000		749,721,277	(a)
U.S. Treasury Bills		0.315-0.341	%		5/12/16		433,791,000		433,509,155	(a)
U.S. Treasury Bills		0.300-0.331	%		5/19/16		465,000,000		464,683,014	(a)
U.S. Treasury Bills		0.338-0.381	%		5/26/16		500,000,000		499,572,091	(a)
U.S. Treasury Bills		0.416	%		6/2/16		225,000,000		224,758,781	(a)
U.S. Treasury Bills		0.536	%		6/9/16		255,000,000		254,621,042	(a)
U.S. Treasury Bills		0.587	%		6/16/16		59,120,000		59,017,205	(a)
U.S. Treasury Bills		0.461-0.516	%		6/23/16		630,000,000		629,033,059	(a)
U.S. Treasury Bills		0.466	%		8/4/16		255,000,000		254,486,176	(a)
U.S. Treasury Bills		0.456	%		8/25/16		455,000,000		453,982,126	(a)
U.S. Treasury Bills		0.481	%		9/1/16		250,000,000		249,393,332	(a)
Total U.S. Treasury Bills									14,706,693,443
U.S. Treasury Notes — 36.7%
U.S. Treasury Notes		0.375	%		3/15/16		429,000,000		429,029,491
U.S. Treasury Notes		0.375	%		3/31/16		300,000,000		300,023,820
U.S. Treasury Notes		2.250	%		3/31/16		150,000,000		150,262,742
U.S. Treasury Notes		0.389	%		4/30/16		500,000,000		500,009,746	(b)
U.S. Treasury Notes		2.000	%		4/30/16		200,000,000		200,562,583
U.S. Treasury Notes		0.250	%		5/15/16		150,000,000		149,981,878
U.S. Treasury Notes		0.500	%		6/15/16		150,000,000		150,036,052
U.S. Treasury Notes		3.250	%		6/30/16		250,000,000		252,359,798
U.S. Treasury Notes		0.625	%		7/15/16		782,000,000		782,563,829
U.S. Treasury Notes		0.390	%		7/31/16		525,000,000		525,019,256	(b)
U.S. Treasury Notes		0.500	%		7/31/16		60,000,000		60,002,820
U.S. Treasury Notes		1.500	%		7/31/16		125,000,000		125,511,425
U.S. Treasury Notes		3.250	%		7/31/16		200,000,000		202,200,709
U.S. Treasury Notes		0.500	%		8/31/16		240,000,000		239,848,044
U.S. Treasury Notes		1.000	%		8/31/16		275,000,000		275,594,532
U.S. Treasury Notes		3.000	%		8/31/16		100,000,000		101,183,208
U.S. Treasury Notes		0.875	%		9/15/16		45,000,000		45,053,965

See Notes to Financial Statements.

U.S. Treasury Reserves Portfolio 2016 Semi-Annual Report 17

Schedule of investments (unaudited) (cont’d)

February 29, 2016

U.S. Treasury Reserves Portfolio

Security	Rate			Maturity Date		Face Amount		Value
U.S. Treasury Notes — continued
U.S. Treasury Notes		3.000	%		9/30/16	$	150,000,000	$	151,990,404
U.S. Treasury Notes		0.373	%		10/31/16		300,000,000		299,995,937	(b)
U.S. Treasury Notes		3.125	%		10/31/16		382,000,000		388,081,612
U.S. Treasury Notes		4.625	%		11/15/16		125,000,000		128,417,612
U.S. Treasury Notes		0.875	%		11/30/16		135,000,000		135,157,743
U.S. Treasury Notes		0.404	%		1/31/17		725,000,000		725,049,919	(b)
U.S. Treasury Notes		0.394	%		4/30/17		525,000,000		525,021,228	(b)
U.S. Treasury Notes		0.397	%		7/31/17		300,000,000		299,982,788	(b)
U.S. Treasury Notes		0.488	%		10/31/17		300,000,000		299,865,169	(b)
U.S. Treasury Notes		0.592	%		1/31/18		525,000,000		525,278,129	(b)
Total U.S. Treasury Notes									7,968,084,439
Total Investments — 104.5% (Cost — $22,674,777,882#)									22,674,777,882
Liabilities in Excess of Other Assets — (4.5)%									(983,776,496	)
Total Net Assets — 100.0%								$	21,691,001,386

^(a)  Rate shown represents yield-to-maturity.

^(b)  Variable rate security. Interest rate disclosed is as of the most recent information available.

# Aggregate cost for federal income tax purposes is substantially the same.

See Notes to Financial Statements.

18 U.S. Treasury Reserves Portfolio 2016 Semi-Annual Report

Statement of assets and liabilities (unaudited)

February 29, 2016

Assets:
Investments, at value	$	22,674,777,882
Cash		895
Interest receivable		16,331,239
Total Assets		22,691,110,016
Liabilities:
Payable for securities purchased		999,265,555
Trustees’ fees payable		10,382
Accrued expenses		832,693
Total Liabilities		1,000,108,630
Total Net Assets	$	21,691,001,386
Represented by:
Paid-in capital	$	21,691,001,386

See Notes to Financial Statements.

U.S. Treasury Reserves Portfolio 2016 Semi-Annual Report 19

Statement of operations (unaudited)

For the Six Months Ended February 29, 2016

Investment Income:
Interest	$	20,097,205
Expenses:
Investment management fee (Note 2)		11,010,328
Fund accounting fees		600,584
Legal fees		190,974
Trustees’ fees		171,781
Custody fees		58,175
Audit and tax fees		15,888
Miscellaneous expenses		48,400
Total Expenses		12,096,130
Less: Fee waivers and/or expense reimbursements (Note 2)		(11,010,328)
Net Expenses		1,085,802
Net Investment Income		19,011,403
Net Realized Gain on Investments		114,561
Increase in Net Assets From Operations	$	19,125,964

See Notes to Financial Statements.

20 U.S. Treasury Reserves Portfolio 2016 Semi-Annual Report

Statements of changes in net assets

For the Six Months Ended February 29, 2016 (unaudited) and the Year Ended August 31, 2015	2016		2015
Operations:
Net investment income	$	19,011,403	$	11,079,674
Net realized gain		114,561		274,864
Increase in Net Assets From Operations		19,125,964		11,354,538
Capital Transactions:
Proceeds from contributions		20,446,849,775		48,001,451,344
Value of withdrawals		(20,556,032,724)		(50,748,415,884)
Decrease in Net Assets From Capital Transactions		(109,182,949)		(2,746,964,540)
Decrease in Net Assets		(90,056,985)		(2,735,610,002)
Net Assets:
Beginning of period		21,781,058,371		24,516,668,373
End of period	$	21,691,001,386	$	21,781,058,371

See Notes to Financial Statements.

U.S. Treasury Reserves Portfolio 2016 Semi-Annual Report 21

Financial highlights

For the years ended August 31, unless otherwise noted:
	20161			2015			2014			2013			2012			2011
Net assets, end of period (000s)		$21,691,001			$21,781,058			$24,516,668			$18,113,633			$18,892,823			$17,534,156
Total return2		0.09	%		0.05	%		0.01	%		0.03	%		0.01	%		0.03	%
Ratios to average net assets:
Gross expenses		0.11	%3		0.11	%		0.11	%		0.11	%		0.11	%		0.11	%
Net expenses4,5		0.01	3		0.01			0.04			0.07			0.06			0.10
Net investment income		0.17	3		0.05			0.02			0.02			0.01			0.03

¹  For the six months ended February 29, 2016 (unaudited).

²  Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.

³  Annualized.

⁴  Reflects fee waivers and/or expense reimbursements.

⁵  The investment manager has voluntarily agreed to waive and/or reimburse 0.10% of Portfolio expenses. This arrangement may be reduced or terminated under certain circumstances. Additional amounts may be voluntarily waived and/or reimbursed from time to time. Prior to August 18, 2014, as a result of a voluntary expense limitation arrangement, the ratio of expenses, other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets of the Portfolio did not exceed 0.10%.

See Notes to Financial Statements.

22 U.S. Treasury Reserves Portfolio 2016 Semi-Annual Report

Notes to financial statements (unaudited)

1. Organization and significant accounting policies

U.S. Treasury Reserves Portfolio (the “Portfolio”) is a separate diversified investment series of Master Portfolio Trust (the “Trust”). The Trust, a Maryland statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Declaration of Trust permits the Trustees to issue beneficial interests in the Portfolio. At February 29, 2016, all investors in the Portfolio were funds advised or administered by the manager of the Portfolio and/or its affiliates.

The following are significant accounting policies consistently followed by the Portfolio and are in conformity with U.S. generally accepted accounting principles (“GAAP”). Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ. Subsequent events have been evaluated through the date the financial statements were issued.

(a) Investment valuation. In accordance with Rule 2a-7 under the 1940 Act, money market instruments are valued at amortized cost, which approximates market value. This method involves valuing portfolio securities at their cost and thereafter assuming a constant amortization to maturity of any discount or premium. The Portfolio’s use of amortized cost is subject to its compliance with certain conditions as specified by Rule 2a-7 under the 1940 Act.

The Board of Trustees is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Legg Mason North Atlantic Fund Valuation Committee (the “Valuation Committee”). The Valuation Committee, pursuant to the policies adopted by the Board of Trustees, is responsible for making fair value determinations, evaluating the effectiveness of the Portfolio’s pricing policies, and reporting to the Board of Trustees.

The Portfolio uses valuation techniques to measure fair value that are consistent with the market approach and/or income approach, depending on the type of security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income approach uses valuation techniques to discount estimated future cash flows to present value.

GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:

• Level 1 — quoted prices in active markets for identical investments

• Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 — significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)

U.S. Treasury Reserves Portfolio 2016 Semi-Annual Report 23

Notes to financial statements (unaudited) (cont’d)

The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used in valuing the Portfolio’s assets carried at fair value:

ASSETS
Description	Quoted Prices (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Short-term investments†		—	$	22,674,777,882		—	$	22,674,777,882

† See Schedule of Investments for additional detailed categorizations.

(b) Interest income and expenses. Interest income consists of interest accrued and discount earned (including both original issue and market discount adjusted for amortization of premium) on the investments of the Portfolio. Expenses of the Portfolio are accrued daily. The Portfolio bears all costs of its operations other than expenses specifically assumed by the manager.

(c) Method of allocation. Net investment income of the Portfolio is allocated pro rata, based on respective ownership interests, among the Fund and other investors in the Portfolio (the “Holders”) at the time of such determination. Gross realized gains and/or losses of the Portfolio are allocated to the Holders in a manner such that, the net asset values per share of each Holder, after each such allocation is closer to the total of all Holders’ net asset values divided by the aggregate number of shares outstanding for all Holders.

(d) Compensating balance arrangements. The Portfolio has an arrangement with its custodian bank whereby a portion of the custodian’s fees is paid indirectly by credits earned on the Portfolio’s cash on deposit with the bank.

(e) Income taxes. The Portfolio is classified as a partnership for federal income tax purposes. As such, each investor in the Portfolio is treated as owner of its proportionate share of the net assets, income, expenses and realized and unrealized gains and losses of the Portfolio. Therefore, no federal income tax provision is required. It is intended that the Portfolio’s assets will be managed so an investor in the Portfolio can satisfy the requirements of Subchapter M of the Internal Revenue Code.

Management has analyzed the Portfolio’s tax positions taken on income tax returns for all open tax years and has concluded that as of February 29, 2016, no provision for income tax is required in the Portfolio’s financial statements. The Portfolio’s federal and state income tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

(f) Other. Purchases, maturities and sales of money market instruments are accounted for on the date of the transaction. Realized gains and losses are calculated on the identified cost basis.

24 U.S. Treasury Reserves Portfolio 2016 Semi-Annual Report

2. Investment management agreement and other transactions with affiliates

Legg Mason Partners Fund Advisor, LLC (“LMPFA”) is the Portfolio’s investment manager and Western Asset Management Company (“Western Asset”) is the Portfolio’s subadviser. LMPFA and Western Asset are wholly-owned subsidiaries of Legg Mason, Inc. (“Legg Mason”).

Under the investment management agreement, the Portfolio pays an investment management fee, calculated daily and paid monthly, at an annual rate of 0.10% of the Portfolio’s average daily net assets.

LMPFA provides administrative and certain oversight services to the Portfolio. LMPFA delegates to the subadviser the day-to-day portfolio management of the Portfolio. For its services, LMPFA pays Western Asset 70% of the net management fee it receives from the Portfolio.

LMPFA has voluntarily agreed to waive and/or reimburse 0.10% of Portfolio expenses. This arrangement may be reduced or terminated under certain circumstances. Additional amounts may be voluntarily waived and/or reimbursed from time to time.

During the six months ended February 29, 2016, fees waived and/or expenses reimbursed amounted to $11,010,328.

LMPFA is permitted to recapture amounts waived and/or reimbursed to the Portfolio during the same fiscal year under certain circumstances.

All officers and one Trustee of the Trust are employees of Legg Mason or its affiliates and do not receive compensation from the Trust.

3. Derivative instruments and hedging activities

During the six months ended February 29, 2016, the Portfolio did not invest in derivative instruments.

U.S. Treasury Reserves Portfolio 2016 Semi-Annual Report 25

Board approval of management and subadvisory agreements (unaudited)

At an in-person meeting of the Board of Trustees of Master Portfolio Trust (the “Trust”) held on November 9-10, 2015, the Board, including the Trustees who are not considered to be “interested persons” of the Trust (the “Independent Trustees”) under the Investment Company Act of 1940, as amended (the “1940 Act”), approved for an annual period the continuation of the management agreement (the “Management Agreement”) between the Trust and Legg Mason Partners Fund Advisor, LLC (the “Manager”) with respect to the U.S. Treasury Reserves Portfolio, a series of the Trust (the “Fund”), and the sub-advisory agreement (the “Sub-Advisory Agreement”) between the Manager and Western Asset Management Company (the “Subadviser”), an affiliate of the Manager, with respect to the Fund.

Background

The Board received extensive information in advance of the meeting from the Manager to assist it in its consideration of the Management Agreement and the Sub-Advisory Agreement and was given the opportunity to ask questions and request additional information from management. In addition, prior to the meeting the Independent Trustees met with their independent legal counsel to discuss and consider the information provided by management and submitted questions to management, and they considered the responses provided. The Board received and considered a variety of information about the Manager and the Subadviser, as well as the management and sub-advisory arrangements for the Fund and other funds overseen by the Board, certain portions of which are discussed below. The Board noted that the Fund is a “master fund” in a “master-feeder” structure, whereby each feeder fund has the same investment objective and policies as the Fund and invests substantially all of its assets in the Fund. The information provided and presentations made to the Board encompassed the Fund and all funds for which the Board has responsibility, including the following feeder funds in the Fund (each a “Feeder Fund”): Western Asset U.S. Treasury Reserves, a series of Legg Mason Partners Money Market Trust, Western Asset Premium U.S. Treasury Reserves, a series of Legg Mason Partners Premium Money Market Trust, and Western Asset Institutional U.S. Treasury Reserves, a series of Legg Mason Partners Institutional Trust.

The discussion below covers both the advisory and the administrative functions being rendered by the Manager, both of which functions are encompassed by the Management Agreement, as well as the advisory functions rendered by the Subadviser pursuant to the Sub-Advisory Agreement.

Board approval of management agreement and sub-advisory agreement

The Independent Trustees were advised by separate independent legal counsel throughout the process. Prior to voting, the Independent Trustees received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed continuation of the Management Agreement and the Sub-Advisory Agreement. The Independent Trustees also reviewed the proposed continuation of the Management Agreement and the Sub-Advisory Agreement in private sessions with their independent legal counsel at which no representatives of the Manager and Subadviser were present.

26 U.S. Treasury Reserves Portfolio

The Independent Trustees considered the Management Agreement and the Sub-Advisory Agreement separately in the course of their review. In doing so, they noted the respective roles of the Manager and the Subadviser in providing services to the Fund.

In approving the Management Agreement and Sub-Advisory Agreement, the Board, including the Independent Trustees, considered a variety of factors, including those factors discussed below. No single factor reviewed by the Board was identified by the Board as the principal factor in determining whether to approve the Management Agreement and the Sub-Advisory Agreement. Each Trustee may have attributed different weight to the various factors in evaluating the Management Agreement and the Sub-Advisory Agreement.

Nature, extent and quality of the services under the management agreement and sub-advisory agreement

The Board received and considered information regarding the nature, extent and quality of services provided to the Fund by the Manager and the Subadviser under the Management Agreement and the Sub-Advisory Agreement, respectively, during the past year. The Board noted information received at regular meetings throughout the year related to the services rendered by the Manager in its management of the Fund’s affairs and the Manager’s role in coordinating the activities of the Fund’s other service providers. The Board’s evaluation of the services provided by the Manager and the Subadviser took into account the Board’s knowledge gained as Trustees of funds in the Legg Mason fund complex, including knowledge gained regarding the scope and quality of the investment management and other capabilities of the Manager and the Subadviser, and the quality of the Manager’s administrative and other services. The Board observed that the scope of services provided by the Manager and the Subadviser, and of the undertakings required of the Manager and Subadviser in connection with those services, including maintaining and monitoring their own and the Fund’s compliance programs and cybersecurity programs, had expanded over time as a result of regulatory, market and other developments. The Board also noted that on a regular basis it received and reviewed information from the Manager and the Subadviser regarding the Fund’s compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act. The Board also considered the Manager’s and the Subadviser’s risk management processes.

The Board reviewed the qualifications, backgrounds and responsibilities of the Manager’s and the Subadviser’s senior personnel and the team of investment professionals primarily responsible for the day-to-day portfolio management of the Fund. The Board also considered, based on its knowledge of the Manager and its affiliates, the financial resources of Legg Mason, Inc., the parent organization of the Manager and the Subadviser. The Board recognized the importance of having a fund manager with significant resources.

The Board considered the division of responsibilities between the Manager and the Subadviser and the oversight provided by the Manager. The Board also considered the policies and practices of the Manager and the Subadviser regarding the selection of brokers and

U.S. Treasury Reserves Portfolio 27

Board approval of management and subadvisory agreements (unaudited) (cont’d)

dealers and the execution of portfolio transactions. In addition, management also reported to the Board on, among other things, its business plans and any organizational changes.

In considering the performance of the Fund, the Board received and considered performance information for each Feeder Fund as well as for a group of funds (the “Performance Universe”) selected by Lipper, Inc. (currently, Broadridge Financial Solutions, Inc.) (“Lipper”), an independent provider of investment company data. The Board noted that the Feeder Funds’ performance was the same as the performance of the Fund (except for the effect of fees at the Feeder Fund level), and therefore relevant to the Board’s consideration of the Fund’s performance. The Board was provided with a description of the methodology Lipper used to determine the similarity of the Feeder Fund with the funds included in the Performance Universe. It was noted that while the Board found the Lipper data generally useful they recognized its limitations, including in particular that the data may vary depending on the end date selected. The Board also noted that it had received and discussed with management information throughout the year at periodic intervals and for rolling periods comparing each Feeder Fund’s performance against its benchmark and its peers. In addition, the Board considered the Feeder Funds’ performance in light of overall financial market conditions.

• The information comparing Western Asset U.S. Treasury Reserves’ performance to that of its Performance Universe, consisting of all retail funds classified as U.S. Treasury money market funds by Lipper, showed, among other data, that the Feeder Fund’s performance for the 1- and 3-year periods ended June 30, 2015 was above the median, the performance for the 5-year period ended June 30, 2015 was at the median, and the performance for the 10-year period ended June 30, 2015 was below the median. The Board noted the explanations from the Manager and the Subadviser concerning the Feeder Fund’s relative performance versus the peer group for the various periods.

• The information comparing Western Asset Institutional U.S. Treasury Reserves’ performance to that of its Performance Universe, consisting of all funds classified as institutional U.S. Treasury money market funds by Lipper, showed, among other data, that the Feeder Fund’s performance for the 1-, 3-, 5- and 10-year periods ended June 30, 2015 was above the median.

• The information comparing Western Asset Premium U.S. Treasury Reserves’ performance to that of its Performance Universe, consisting of all retail funds classified as U.S. Treasury money market funds by Lipper, showed, among other data, that the Feeder Fund’s performance for the 1-, 3-, and 10-year periods ended June 30, 2015 was above the median, and the performance for the 5-year period ended June 30, 2015 was at the median.

The Board concluded that, overall, the nature, extent and quality of services provided (and expected to be provided), including performance, under the Management Agreement and the Sub-Advisory Agreement were sufficient for renewal.

28 U.S. Treasury Reserves Portfolio

Management fees and expense ratios

The Board reviewed and considered the contractual management fee paid by the Fund to the Manager in light of the nature, extent and quality of the management and sub-advisory services provided by the Manager and the Subadviser. The Board also considered that fee waiver and/or expense reimbursement arrangements are currently in place for each of Western Asset U.S. Treasury Reserves, Western Asset Institutional U.S. Treasury Reserves and Western Asset Premium U.S. Treasury Reserves. In addition, the Board also noted that the compensation paid to the Subadviser is the responsibility and expense of the Manager, not the Fund.

In addition, the Board received and considered information provided by Lipper comparing each Feeder Fund’s contractual management fee (each, a “Contractual Management Fee”), the actual management fees paid by each Feeder Fund to the Manager (each, an “Actual Management Fee”) and each Feeder Fund’s total actual expenses with those of funds in both the relevant expense group and a broader group of funds, each selected by Lipper. The Board noted that the Feeder Funds’ assets represented a significant portion of the Fund’s assets. The Board noted that each Feeder Fund’s expense information reflected both management fees and total expenses payable by the Feeder Fund as well as management fees and total expenses payable by the Fund, and therefore was relevant to the Board’s conclusions regarding the Fund’s expenses. The Board also reviewed information regarding fees charged by the Manager to other U.S. clients investing primarily in an asset class similar to that of the Fund, including, where applicable, separate accounts.

The Manager reviewed with the Board the differences in services provided to these different types of accounts, noting that the Fund is provided with certain administrative services, office facilities, and Fund officers (including the Fund’s chief executive, chief financial and chief compliance officers), and that the Manager coordinates and oversees the provision of services to the Fund by other Fund service providers. The Board considered the fee comparisons in light of the differences in management of these different types of accounts.

The Board considered the overall management fee, the fees of the Subadviser and the amount of the management fee retained by the Manager after payment of the subadvisory fee in each case in light of the services rendered for those amounts. The Board also received an analysis of complex-wide management fees provided by the Manager, which, among other things, set out a framework of fees based on asset classes.

The information comparing each Feeder Fund’s Contractual Management Fee and its Actual Management Fee as well as its actual total expense ratio to its expense group, consisting of a group (including the Feeder Fund) of either retail no-load funds classified as U.S. Treasury money market funds or funds classified as institutional U.S. Treasury money market funds and chosen by Lipper to be comparable to the Feeder Fund, showed the following:

• For Western Asset U.S. Treasury Reserves, the Contractual Management Fee and Actual Management Fee were each below the median and the actual total expense ratio also

U.S. Treasury Reserves Portfolio 29

Board approval of management and subadvisory agreements (unaudited) (cont’d)

was below the median. The Board took into account the master-feeder structure. The Board considered that the current limitation on the Feeder Fund’s expenses is expected to continue through December 2017.

• For Western Asset Institutional U.S. Treasury Reserves, the Contractual Management Fee and Actual Management Fee were each below the median and the actual total expense ratio was below the median. The Board took into account the master-feeder structure. The Board considered that the current limitation on the Feeder Fund’s expenses is expected to continue through December 2017.

• For Western Asset Premium U.S. Treasury Reserves, the Contractual Management Fee and the Actual Management Fee were each below the median and the actual total expense ratio also was below the median. The Board took into account the master-feeder structure. The Board considered that the current limitation on the Feeder Fund’s expenses is expected to continue through December 2017.

Taking all of the above into consideration, as well as the factors identified below, the Board determined that the management fee and the subadvisory fee for the Fund were reasonable in light of the nature, extent and quality of the services provided to the Fund under the Management Agreement and the Sub-Advisory Agreement.

Manager profitability

The Board received and considered an analysis of the profitability of the Manager and its affiliates in providing services to the Fund. The Board also received profitability information with respect to the Legg Mason fund complex as a whole. In addition, the Board received information with respect to the Manager’s allocation methodologies used in preparing this profitability data. It was noted that the allocation methodologies had been reviewed previously by an outside consultant. The profitability of the Manager and its affiliates was considered by the Board not excessive in light of the nature, extent and quality of the services provided to the Fund and the type of fund it represented.

Economies of scale

The Board received and discussed information concerning whether the Manager realizes economies of scale as the Fund’s assets grow.

• The Board noted that the Manager had previously agreed to institute breakpoints in Western Asset U.S. Treasury Reserves’ Contractual Management Fee, reflecting the potential for reducing the Contractual Management Fee as the Feeder Fund grows. The Board considered whether the breakpoint fee structure was a reasonable means of sharing any economies of scale or other efficiencies that might accrue from increases in the Feeder Fund’s asset levels. The Board noted that although the Feeder Fund had not reached the specified asset levels at which one or more breakpoints to its Contractual Management Fee are triggered, the Feeder Fund’s Contractual Management Fee and Actual Management Fee were each below the median of its expense group.

30 U.S. Treasury Reserves Portfolio

• The Board noted that the Manager had previously agreed to institute breakpoints in Western Asset Institutional U.S. Treasury Reserves’ Contractual Management Fee, reflecting the potential for reducing the Contractual Management Fee as the Feeder Fund grows. The Board considered whether the breakpoint fee structure was a reasonable means of sharing any economies of scale or other efficiencies that might accrue from increases in the Feeder Fund’s asset levels. The Board noted that the Feeder Fund had reached the specified asset levels at which one or more breakpoints to its Contractual Management Fee are triggered, and the Feeder Fund’s Contractual Management Fee is approximately equivalent to the asset-weighted average of management fees paid by the other funds in the same Lipper investment classification/objective at asset levels up to $10 billion and below the asset-weighted average at higher asset levels. The Board also noted that the Contractual Management Fee and Actual Management Fee were each below the median of its expense group.

• With respect to Western Asset Premium U.S. Treasury Reserves, the Board noted the size of the fund and that the Feeder Fund’s Contractual Management Fee and Actual Management Fee were each below the median of its expense group.

The Board determined that the management fee structure for the Fund was reasonable.

Other benefits to the manager and the subadviser

The Board considered other benefits received by the Manager, the Subadviser and their affiliates as a result of their relationship with the Fund, including the opportunity to offer additional products and services to the Feeder Funds’ shareholders.

In light of the costs of providing investment management and other services to the Fund and the ongoing commitment of the Manager and the Subadviser to the Fund, the Board considered that the ancillary benefits that the Manager and its affiliates received were reasonable.

*  *  *

In light of all of the foregoing, the Board determined that the continuation of each of the Management Agreement and Sub-Advisory Agreement would be in the best interests of the Fund’s shareholders and approved the continuation of such agreements for another year.

U.S. Treasury Reserves Portfolio 31

ITEM 2. CODE OF ETHICS.

Not applicable.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

Included herein under Item 1.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

ITEM 11. CONTROLS AND PROCEDURES.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

ITEM 12. EXHIBITS.

(a) (1) Not applicable.

Exhibit 99.CODE ETH

(a) (2) Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002 attached hereto.

Exhibit 99.CERT

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 attached hereto.

Exhibit 99.906CERT

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, there unto duly authorized.

Master Portfolio Trust

By:	/s/ Jane Trust
	Jane Trust
	Chief Executive Officer
Date:	April 22, 2016

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/ Jane Trust
	Jane Trust
	Chief Executive Officer
Date:	April 22, 2016

By:	/s/ Richard F. Sennett
	Richard F. Sennett
	Principal Financial Officer
Date:	April 22, 2016