As filed with the Securities and Exchange Commission on January 5, 2007
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: 811-21168
NEUBERGER BERMAN INTERMEDIATE MUNICIPAL FUND INC.
-------------------------------------------------
(Exact Name of the Registrant as Specified in Charter)
c/o Neuberger Berman Management Inc.
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
c/o Neuberger Berman Management Inc.
Neuberger Berman Intermediate Municipal Fund Inc.
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
Arthur C. Delibert, Esq.
Kirkpatrick & Lockhart Preston Gates Ellis LLP
1601 K Street, N.W.
Washington, D.C. 20006-1600
(Names and Addresses of agents for service)
Date of fiscal year end: October 31, 2006
Date of reporting period: October 31, 2006
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,
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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
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("OMB") control number. Please direct comments concerning the accuracy of the
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burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREHOLDERS
ANNUAL REPORT
OCTOBER 31, 2006
NEUBERGER BERMAN
A LEHMAN BROTHERS COMPANY
NEUBERGER BERMAN
INTERMEDIATE
MUNICIPAL
CLOSED-END FUNDS
CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC.
INTERMEDIATE MUNICIPAL FUND INC.
NEW YORK INTERMEDIATE MUNICIPAL FUND INC.
NEUBERGER BERMAN OCTOBER 31, 2006
CHAIRMAN'S LETTER
Dear Shareholder,
I am pleased to present to you this annual report for the Neuberger Berman
Intermediate Municipal Closed-End Funds for the 12 months ended October 31,
2006. The report includes portfolio commentary, a listing of the Funds'
investments, and their audited financial statements for the reporting period.
Each Fund's investment objective is to provide a high level of current income
exempt from regular federal income tax and, for each state-specific fund, a high
level of current income exempt from that state's personal income taxes (and in
the case of the New York Fund, New York City personal income tax).
We invest in intermediate-term municipal bonds because our experience and
research indicate strongly that this maturity range has historically offered the
best risk/reward profile on the yield curve, providing much of the return of
longer-term bonds--with less volatility and risk.
We believe that our conservative investment philosophy and disciplined
investment process will benefit you with superior tax exempt current income over
the long term.
Thank you for your confidence in Neuberger Berman. We will continue to do our
best to earn it.
Sincerely,
/s/ PETER SUNDMAN
-------------------------------------------
PETER SUNDMAN
CHAIRMAN OF THE BOARD
CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC.
INTERMEDIATE MUNICIPAL FUND INC.
NEW YORK INTERMEDIATE MUNICIPAL FUND INC.
"Neuberger Berman" and the Neuberger Berman logo are service marks of
Neuberger Berman, LLC. "Neuberger Berman Management Inc." and the individual
fund names in this shareholder report are either service marks or registered
service marks of Neuberger Berman Management Inc. (C)2006 Neuberger Berman
Management Inc. All rights reserved.
CONTENTS
CHAIRMAN'S LETTER 1
PORTFOLIO COMMENTARIES
California Intermediate Municipal Fund Inc. 2
Intermediate Municipal Fund Inc. 2
New York Intermediate Municipal Fund Inc. 2
SCHEDULE OF INVESTMENTS
California Intermediate Municipal Fund Inc. 7
Intermediate Municipal Fund Inc. 12
New York Intermediate Municipal Fund Inc. 20
FINANCIAL STATEMENTS 26
FINANCIAL HIGHLIGHTS/PER SHARE DATA
California Intermediate Municipal Fund Inc. 36
Intermediate Municipal Fund Inc. 37
New York Intermediate Municipal Fund Inc. 38
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 40
DISTRIBUTION REINVESTMENT PLAN 41
DIRECTORY 43
DIRECTORS AND OFFICERS 44
PROXY VOTING POLICIES AND PROCEDURES 53
QUARTERLY PORTFOLIO SCHEDULE 53
MARYLAND ANTI-TAKEOVER STATUTES 53
NOTICE TO SHAREHOLDERS 54
BOARD CONSIDERATION OF THE MANAGEMENT AND SUB-ADVISORY AGREEMENTS 55
1
INTERMEDIATE MUNICIPAL CLOSED-END FUNDS PORTFOLIO COMMENTARIES
Mixed economic signals and uncertainty regarding future Federal Reserve monetary
policy decisions restrained bond returns in the first half of the fiscal year
ended October 31, 2006. However, as investors saw more evidence that the economy
was beginning to decelerate and gained confidence that the extended Federal
Reserve tightening cycle was nearing an end, fixed income markets firmed. The
Fed's August 8 decision to leave the Fed Funds Rate unchanged at 5.25% (a
neutral posture that has remained intact through subsequent Fed meetings)
contributed to a bond market rally that resulted in respectable returns for the
fiscal year.
We are pleased to report that on a net asset value (NAV) basis, all three of
Neuberger Berman's Intermediate Municipal Closed-End Funds posted healthy gains
and materially outperformed the Lehman 10-Year Municipal Bond Index for the
fiscal year.
Throughout the year, the Funds' weighted average maturities and durations were
maintained in a narrow range reflecting our modestly bullish posture. Sector
allocations remained heavily weighted in advantageously priced revenue bonds.
During the first half of the fiscal year, our high credit quality standards
restrained relative returns as lower rated bonds outperformed. However, credit
quality did not have a material impact on relative returns in the second half.
And with today's historically tight credit spreads (or a minimal yield
differential between higher and lower rated bonds), there is even less incentive
to sacrifice quality for yield. In fact, we think that the credit risk of some
lower rated bonds has increased substantially. For example, real estate
developments financed partially through the issuance of municipal debt (in the
lingo of municipal bond investors, "dirt deals") may be especially risky in view
of the current housing market slump.
Although investors' perspective has changed since the beginning of last year,
all eyes remain on the Federal Reserve. The questions DU JOUR are now "How long
will the Fed maintain a neutral posture?" and "Is the next move to hike or cut
rates?" Following the announcement of surprisingly weak 1.6% third quarter GDP
growth (later revised up to 2.2%) and a chorus of bad news from homebuilding
companies, the bond market seemed to be pricing in anticipation of a Fed rate
cut in first quarter 2007. Then, much better-than-anticipated third quarter
corporate profits and a strong October jobs report led economists and market
strategists to not only question whether the Fed might begin easing interest
rates, but also to consider whether there could actually be one or two more rate
hikes in the offing. With today's flat yield curve providing no financial
incentive to lengthen the Funds' weighted average maturities or durations, we
will likely maintain the portfolios' current interest rate exposure until we see
a clearer direction for the economy and the Fed.
Our outlook for the municipal securities market remains largely constructive.
There are some potholes in the market in the form of municipal entities
suffering financial stress due to underfunded pension plans and/or rising health
care costs. That's why our internal credit analysis remains critical. However,
in general, we believe that municipal balance sheets are strong enough to
accommodate any decrease in revenues resulting from a slower growth economy or
even a mild recession. Most importantly, municipal bond yields still provide a
meaningful return advantage for investors in high federal income tax brackets.
2
CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC.
For the 12 months ended October 31, 2006, on a net asset value (NAV) basis, the
California Intermediate Municipal Fund returned 7.51% compared to the Lehman
10-Year Municipal Bond Index's 5.99% gain.
As of October 31, 2006, the portfolio was comprised of 84.6% revenue bonds,
10.3% general obligation bonds, and 5.1% short-term investments. Bonds subject
to the Alternative Minimum Tax (AMT) equaled 14.8% of assets. At the close of
the reporting period, the Fund's duration was 4.8 years and the portfolio's
leverage position was 36.7% of assets.
INTERMEDIATE MUNICIPAL FUND INC.
For the 12 months ended October 31, 2006, on a net asset value (NAV) basis the
Intermediate Municipal Fund returned 7.22% compared to the Lehman 10-Year
Municipal Bond Index's 5.99% gain.
As of October 31, 2006, the portfolio was comprised of 77.9% revenue bonds,
16.1% general obligation bonds, 4.2% pre-refunded/escrow bonds, and 1.8%
short-term investments. Bonds subject to the Alternative Minimum Tax (AMT)
equaled 14.4% of assets. At the close of the reporting period, the Fund's
duration was 5.1 years and the portfolio's leverage position was 36.8% of
assets.
NEW YORK INTERMEDIATE MUNICIPAL FUND INC.
For the 12 months ended October 31, 2006, on a net asset value (NAV) basis, the
New York Intermediate Municipal Fund returned 7.05% compared to the Lehman
10-Year Municipal Bond Index's 5.99% gain.
As of October 31, 2006, the portfolio was comprised of 93.7% revenue bonds, 4.6%
general obligation bonds, and 1.7% short-term investments. Bonds subject to the
Alternative Minimum Tax (AMT) equaled 20.5% of assets. At the close of the
reporting period, the Fund's duration was 4.9 years and the portfolio's leverage
position was 37.1% of assets.
Sincerely,
/s/ THOMAS BROPHY /s/ LORI CANELL
-----------------------------------
THOMAS BROPHY AND LORI CANELL
PORTFOLIO CO-MANAGERS
3
INTERMEDIATE MUNICIPAL CLOSED-END FUNDS
CALIFORNIA NEW YORK
INTERMEDIATE INTERMEDIATE INTERMEDIATE
MUNICIPAL FUND MUNICIPAL FUND MUNICIPAL FUND
AMEX TICKER AMEX TICKER AMEX TICKER
SYMBOL NBW SYMBOL NBH SYMBOL NBO
1 YEAR TOTAL RETURN
NAV(1),(3),(4) 7.51% 7.22% 7.05%
MARKET PRICE(2),(3),(4) 12.10% 10.22% 13.70%
AVERAGE ANNUAL TOTAL RETURN (Life of Fund as of October 31, 2006)
NAV(1),(3),(4) 6.61% 6.71% 6.27%
MARKET PRICE(2),(3),(4) 4.82% 4.31% 4.93%
INCEPTION DATE 09/24/2002 09/24/2002 09/24/2002
CALIFORNIA INTERMEDIATE MUNICIPAL FUND RATING DIVERSIFICATION
(% BY RATINGS)
AAA 53.5%
AA 2.4
A 19.7
BBB 18.0
BB 1.3
B 1.0
CCC 0.3
CC 0.0
C 0.0
D 0.0
Not Rated 3.4
Short Term 0.4
INTERMEDIATE MUNICIPAL FUND RATING DIVERSIFICATION
(% BY RATINGS)
AAA 54.5%
AA 8.2
A 11.4
BBB 17.0
BB 1.4
B 1.5
CCC 0.4
CC 0.0
C 0.0
D 0.0
Not Rated 5.0
Short Term 0.6
NEW YORK INTERMEDIATE MUNICIPAL FUND RATING DIVERSIFICATION
(% BY RATINGS)
AAA 26.6%
AA 27.6
A 12.1
BBB 15.9
BB 10.6
B 1.8
CCC 0.4
CC 0.0
C 0.0
D 0.0
Not Rated 4.5
Short Term 0.5
Closed-end funds, unlike open-end funds, are not continually offered. There is
an initial public offering and once issued, common shares of closed-end funds
are sold in the open market through a stock exchange.
The composition, industries and holdings of the Fund are subject to change.
Investment return will fluctuate. Past performance is no guarantee of future
results.
4
NEUBERGER BERMAN OCTOBER 31, 2006
ENDNOTES
(1) Returns based on Net Asset Value ("NAV") of the Funds.
(2) Returns based on market price of Fund shares on the American Stock
Exchange.
(3) A portion of the income from each Fund may be a tax preference item for
purposes of the Federal alternative minimum tax for certain investors.
(4) Neuberger Berman Management Inc. has contractually agreed to waive a
portion of the management fees that it is entitled to receive from each
Fund. Each undertaking lasts until October 31, 2011. Please see the notes
to the financial statements for specific information regarding the rate of
the management fees waived by Neuberger Berman Management Inc. Absent such
a waiver, the performance of each Fund would be lower.
(5) Unaudited performance data current to the most recent month-end are
available at www.nb.com.
5
GLOSSARY OF INDICES
LEHMAN 10-YEAR MUNICIPAL BOND The index is the 10-year (8-12) component of
INDEX: the Lehman Municipal Bond Index which is a
rules-based, market-value-weighted index
engineered for the long-term tax-exempt bond
market. To be included in the index, bonds must
have a minimum credit rating of Baa. They must
have an outstanding par value of at least $5
million and be issued as part of a transaction
of at least $50 million. The bonds must have a
dated-date after December 31, 1990 and must be
at least one year from their maturity date.
Remarketed issues, taxable municipal bonds,
bonds with floating rates, and derivatives, are
excluded from the benchmark.
Please note that the index does not take into account any fees and expenses or
any tax consequences of investing in the individual securities that it tracks
and that investors cannot invest directly in any index or average. Data about
the performance of each index or average are prepared or obtained by Neuberger
Berman Management Inc. and include reinvestment of all dividends and capital
gain distributions. Each Fund may invest in securities not included in its
respective index.
6
NEUBERGER BERMAN OCTOBER 31, 2006
SCHEDULE OF INVESTMENTS CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC.
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
ARIZONA (0.8%)
$ 750 Verrado Comm. Fac. Dist. Number 1 G.O., Ser. 2003,
6.15%, due 7/15/17 $ 806^^
------
CALIFORNIA (133.7%)
780 Abag Fin. Au. Cert. of Participation Rev. (Channing House),
Ser. 1999, 4.90%, due 2/15/09 BBB 796~
3,050 Abag Fin. Au. Cert. of Participation Rev. (Episcopal Homes
Foundation), Ser. 1998, 5.13%, due 7/1/18 BBB+ 3,117~
1,000 Abag Fin. Au. Rev. (San Diego Hosp. Assoc.), Ser. 2003 C,
5.13%, due 3/1/18 Baa1 BBB+ 1,042~
1,250 Alameda Co. Cert. of Participation Ref. Rev., Ser. 2001 A,
(MBIA Insured), 5.38%, due 12/1/17 Aaa 1,362
1,285 Bay Area Governments Assoc. BART SFO Extension Rev.
(Arpt. Premium Fare), Ser. 2002 A, (AMBAC Insured),
5.00%, due 8/1/21 Aaa AAA 1,355
1,000 Burbank Pub. Svc. Dept. Elec. Rev., Ser. 1998, (FSA Insured),
5.13%, due 6/1/16 Aaa AAA 1,034
555 California Co. Tobacco Securitization Agcy. Tobacco
Settlement Asset-Backed Rev., Ser. 2002, 4.75%, due 6/1/19 Baa3 559
1,750 California Ed. Fac. Au. Ref. Rev. (Stanford Univ.), Ser. 2001 R,
5.00%, due 11/1/21 Aaa AAA 1,842~
2,000 California Hlth. Fac. Fin. Au. Rev. (Catholic Healthcare West),
Ser. 2004 I, 4.95%, due 7/1/26 A2 A 2,109~
2,000 California Hlth. Fac. Fin. Au. Rev. (Cedars-Sinai Med. Ctr.),
Ser. 1999 A, 6.13%, due 12/1/19 A3 2,175~
2,000 California Hlth. Fac. Fin. Au. Rev. (Cedars-Sinai Med. Ctr.),
Ser. 2005, 5.00%, due 11/15/21 A3 2,115~
1,000 California Hlth. Fac. Fin. Au. Rev. (Kaiser Permanente),
Ser. 1998 B, 5.00%, due 10/1/20 A3 AAA 1,035~
2,000 California Hsg. Fin. Agcy. Home Mtge. Rev., Ser. 2006 E,
(FGIC Insured), 4.88%, due 2/1/17 Aaa AAA 2,068
100 California Hsg. Fin. Agcy. Rev. (AMT Home Mtge.), Ser. 2006 F,
(LOC: Fortis Bank), 3.62%, due 11/1/06 VMIG1 A-1+ 100#
500 California Muni. Fin. Au. Ed. Rev. (American Heritage Ed.
Foundation Proj.), Ser. 2006 A, 5.00%, due 6/1/16 BBB- 518~
4,000 California Poll. Ctrl. Fin. Au. Ref. PCR (Pacific Gas & Elec. Co.),
Ser. 1996 A, (MBIA Insured), 5.35%, due 12/1/16 Aaa AAA 4,319~
300 California Poll. Ctrl. Fin. Au. Res. Rec. Rev.
(Atlantic Richfield Co. Proj.), Ser. 1994 A, 3.62%, due 11/1/06 VMIG1 A-1+ 300~#
1,500 California Poll. Ctrl. Fin. Au. Solid Waste Disp. Rev.
(Republic Svc., Inc. Proj.), Ser. 2002 B, 5.25%,
due 6/1/23 Putable 12/1/17 Baa2 BBB+ 1,622~
1,000 California Poll. Ctrl. Fin. Au. Solid Waste Disp. Rev.
(Waste Management, Inc. Proj.), Ser. 2002 C,
4.85%, due 12/1/27 Putable 11/30/07 BBB 1,004~
3,000 California Poll. Ctrl. Fin. Au. Solid Waste Disp. Rev.
(Waste Management, Inc. Proj.), Ser. 2005 C,
5.13%, due 11/1/23 BBB 3,171~
4,500 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A,
5.75%, due 5/1/17 Aaa A- 5,049
1,000 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A,
5.38%, due 5/1/22 Aaa A- 1,103
200 California St. Econ. Rec., Ser. 2004 C-8, (LOC: Lloyds Bank),
3.42%, due 11/1/06 VMIG1 A-1+ 200#
See Notes to Schedule of Investments
7
SCHEDULE OF INVESTMENTS CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC. CONT'D
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$2,250 California St. G.O., Ser. 2002, 5.00%, due 10/1/17 A1 A+ $2,395
1,000 California St. Pub. Works Board Lease (Dept. of Gen. Svc.) Rev.
(Cap. East End Complex), Ser. 2002 A, (AMBAC Insured),
5.25%, due 12/1/16 Aaa AAA 1,087
1,095 California St. Pub. Works Board Lease Rev.
(California Comm. Colleges), Ser. 2004 B, 5.50%, due 6/1/20 A2 A 1,210
3,000 California St. Pub. Works Board Lease Rev. (Regents of the Univ.
of California, UCLA Replacement Hosp.), Ser. 2002 A,
(FSA Insured), 5.38%, due 10/1/13 Aaa AAA 3,291
1,000 California St. Univ. Fresno Assoc., Inc. Rev. (Auxiliary Organization
Event Ctr.), Ser. 2002, 5.00%, due 7/1/12 Baa3 1,073
2,000 California Statewide CDA Cert. of Participation Rev.
(Children's Hosp. Los Angeles), Ser. 1999, 5.13%, due 8/15/19 A3 A 2,074~
1,890 California Statewide CDA Cert. of Participation Rev.
(The Internext Group), Ser. 1999, 5.38%, due 4/1/17 BBB 1,938~
1,000 California Statewide CDA Hlth. Fac. Rev. (Adventist Hlth.),
Ser. 2005 A, 5.00%, due 3/1/20 A 1,055~
5,000 California Statewide CDA Hlth. Fac. Rev. (Mem. Hlth. Svcs.),
Ser. 2003 A, 6.00%, due 10/1/16 A3 A+ 5,537~
1,000 California Statewide CDA Rev. (Daughters of Charity Hlth.),
Ser. 2005 G, 5.00%, due 7/1/22 BBB+ 1,041~
3,000 California Statewide CDA Rev. (Kaiser Permanente), Ser. 2002 E,
4.70%, due 11/1/36 Putable 6/1/09 A3 A+ 3,062~
1,000 Central Joint Pwr. Hlth. Fin. Au. Cert. of Participation Rev.
(Comm. Hosp. of Central California Proj.), Ser. 2000,
5.50%, due 2/1/14 Baa2 BBB- 1,039~
1,020 Cerritos Pub. Fin. Au. Sub. Tax Allocation Rev.
(Cerritos Redev. Proj.), Ser. 2002 B, 4.40%, due 11/1/16 BBB 1,020
2,550 Contra Costa Comm. College Dist. G.O., Ser. 2002,
(FGIC Insured), 5.25%, due 8/1/17 Aaa AAA 2,772
710 Elk Grove Spec. Tax Rev. (East Franklin Comm. Fac.
Dist. Number 1), Ser. 2002 A, 5.38%, due 8/1/17 748^^
1,000 Fresno Unified Sch. Dist. Ref. G.O., Ser. 2002 A, (MBIA Insured),
6.00%, due 2/1/17 Aaa AAA 1,186
2,835 Glendale Redev. Agcy. Tax Allocation Rev. (Central Glendale
Redev. Proj.), Ser. 2002, (MBIA Insured), 5.00%, due 12/1/16 Aaa AAA 3,058
2,480 Glendale Redev. Agcy. Tax Allocation Rev. (Central Glendale
Redev. Proj.), Ser. 2002, (MBIA Insured), 5.25%, due 12/1/17 Aaa AAA 2,713
1,000 Kings Canyon Joint Unified Sch. Dist. G.O., Ser. 2002,
(FGIC Insured), 5.38%, due 8/1/17 Aaa AAA 1,087
1,245 Long Beach Bond Fin. Au. Tax Allocation Rev. (Downtown, North
Long Beach, Poly High, & West Beach Redev. Proj.), Ser. 2002 A,
(AMBAC Insured), 5.38%, due 8/1/17 Aaa AAA 1,368
660 Long Beach Bond Fin. Au. Tax Allocation Rev. (North Long
Beach Proj.), Ser. 2002 A, (AMBAC Insured), 5.38%, due 8/1/17 Aaa AAA 723
500 Long Beach Fin. Au. Rev., Ser. 1992, (AMBAC Insured),
6.00%, due 11/1/17 Aaa AAA 586
1,275 Los Angeles Co. Long Beach Unified Sch. Dist. G.O., Ser. 2002 D,
(FSA Insured), 5.00%, due 8/1/17 Aaa 1,350
5,000 Los Angeles Dept. of Arpts. Rev. (Los Angeles Int'l. Arpt.),
Ser. 2002 A, (FGIC Insured), 5.25%, due 5/15/18 Aaa AAA 5,392
500 Marin Co. Dixie Elementary Sch. Dist. G.O., Ser. 2000 A,
(FSA Insured), 5.38%, due 8/1/17 Aaa AAA 539
1,045 Marin Co. Muni. Wtr. Dist. Wtr. Ref. Rev., Ser. 2002,
(AMBAC Insured), 5.00%, due 7/1/17 Aaa AAA 1,113
8
NEUBERGER BERMAN OCTOBER 31, 2006
SCHEDULE OF INVESTMENTS CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC. CONT'D
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$1,090 Moreland Sch. Dist. Ref. G.O., Ser. 2002, (FGIC Insured),
5.13%, due 9/1/17 Aaa AAA $1,169
535 Nevada & Placer Cos. Irrigation Dist. Cert. of Participation Rev.,
Ser. 2002, (FGIC Insured), 5.00%, due 1/1/16 Aaa AAA 573
565 Nevada & Placer Cos. Irrigation Dist. Cert. of Participation Rev.,
Ser. 2002, (FGIC Insured), 5.00%, due 1/1/17 Aaa AAA 603
1,045 Oakland G.O., Ser. 2002 A, (FGIC Insured), 5.00%, due 1/15/15 Aaa AAA 1,117
1,210 Oakland G.O., Ser. 2002 A, (FGIC Insured), 5.00%, due 1/15/18 Aaa AAA 1,283
605 Oakland Redev. Agcy. Rev. (Coliseum Area Redev. Proj.),
Ser. 2003, 5.00%, due 9/1/16 A 654
635 Oakland Redev. Agcy. Rev. (Coliseum Area Redev. Proj.),
Ser. 2003, 5.00%, due 9/1/17 A 687
1,290 Oakland Redev. Agcy. Sub. Tax Allocation Rev. (Central Dist.
Redev. Proj.), Ser. 2003, (FGIC Insured), 5.50%, due 9/1/17 Aaa AAA 1,423
1,445 Oceanside Cert. of Participation Ref. Rev., Ser. 2003 A,
(AMBAC Insured), 5.25%, due 4/1/14 Aaa AAA 1,591
3,890 Port of Oakland Ref. Rev., Ser. 2002 N, (MBIA Insured),
5.00%, due 11/1/13 Aaa AAA 4,151
2,655 Riverside Co. Eastern Muni. Wtr. Dist. Cert. of Participation Wtr. &
Swr. Rev., Ser. 2001 A, (FGIC Insured), 5.00%, due 7/1/19 Aaa AAA 2,804
440 Roseville Stone Point Comm. Fac. District No. 1 Special Tax Rev.,
Ser. 2003, 5.70%, due 9/1/17 464^^
2,600 Sacramento Muni. Util. Dist. Elec. Rev., Ser. 1997 K,
(AMBAC Insured), 5.70%, due 7/1/17 Aaa AAA 3,057
830 San Diego Redev. Agcy. Sub. Parking Rev. (Centre City
Redev. Proj.), Ser. 2003 B, 4.80%, due 9/1/15 Baa2 852
820 San Diego Redev. Agcy. Sub. Parking Rev. (Centre City
Redev. Proj.), Ser. 2003 B, 4.90%, due 9/1/16 Baa2 842
2,000 San Diego Unified Sch. Dist. G.O., Ser. 2002 D, (FGIC Insured),
5.25%, due 7/1/21 Aaa AAA 2,182
3,000 San Francisco Bay Area Toll Au. Toll Bridge Rev., Ser. 2001 D,
5.00%, due 4/1/17 Aa3 AA 3,162
1,500 San Francisco City & Co. Int'l. Arpt. Second Ser. Rev.,
(FGIC Insured), 5.25%, due 5/1/16 Aaa AAA 1,571
5,000 San Francisco City & Co. Redev. Agcy. Lease Ref. Rev.
(George R. Moscone Convention Ctr.), Ser. 2002, (FSA Insured),
5.00%, due 7/1/17 Aaa AAA 5,327
1,000 San Jose Arpt. Ref. Rev., Ser. 2002 B, (FSA Insured),
5.00%, due 3/1/11 Aaa AAA 1,049
1,615 San Jose Arpt. Ref. Rev., Ser. 2002 B, (FSA Insured),
5.00%, due 3/1/12 Aaa AAA 1,708
2,500 San Jose Fin. Au. Lease Rev. (Civic Ctr. Proj.), Ser. 2002 B,
(AMBAC Insured), 5.25%, due 6/1/17 Aaa AAA 2,705
1,000 San Jose Multi-Family Hsg. Rev. (Fallen Leaves Apts. Proj.),
Ser. 2002 J-1, (AMBAC Insured), 4.95%, due 12/1/22 Aaa AAA 1,037~
1,620 Santa Clara Co. Fremont Union High Sch. Dist. G.O.,
Ser. 2002 C, (FSA Insured), 5.00%, due 9/1/20 Aaa AAA 1,751
1,000 Santa Rosa Rancheria Tachi Yokut Tribe Enterprise Rev.,
Ser. 2003, 6.13%, due 3/1/13 1,021^^
3,905 Solano Co. Cert. of Participation Rev., Ser. 2002, (MBIA Insured),
5.25%, due 11/1/17 Aaa AAA 4,258
1,000 South Gate Pub. Fin. Au. Tax Allocation Rev. (South Gate Redev.
Proj. No. 1), Ser. 2002, 5.00%, due 9/1/16 Aaa AAA 1,079
600 Univ. of California Regents Cert. of Participation Rev. (San Diego
Campus & Sacramento Proj.), Ser. 2002 A, 5.25%, due 1/1/18 Aa2 637
See Notes to Schedule of Investments
9
SCHEDULE OF INVESTMENTS CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC. CONT'D
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$1,000 Univ. of California Regents
Rev. (Multi. Purp. Proj.), Ser. 2000 K,
(MBIA Insured), 5.00%, due 9/1/12 Aaa AAA $ 1,037
--------
136,246
--------
FLORIDA (0.8%)
750 Miami Beach Hlth. Fac. Au. Hosp. Ref. Rev. (Mount Sinai Med. Ctr.
of Florida Proj.), Ser. 2004, 6.25%, due 11/15/09 Ba1 BB+ 790~
--------
GEORGIA (1.0%)
1,000 De Kalb Co. Dev. Au. Ref. PCR (General Motors Corp. Proj.),
Ser. 2002, 6.00%, due 3/15/21 Caa1 B- 1,018~
--------
GUAM (0.7%)
700 Guam Gov't. Waterworks Au. Wtr. & Wastewater Sys. Rev.,
Ser. 2005, 5.50%, due 7/1/16 Ba2 749
--------
LOUISIANA (2.9%)
1,500 Morehouse Parish Ref. PCR (Int'l. Paper Co. Proj.), Ser. 2001 A,
5.25%, due 11/15/13 Baa3 BBB 1,602~
1,250 Tobacco Settlement Fin. Corp. Tobacco Settlement Asset-Backed
Rev., Ser. 2001 B, 5.50%, due 5/15/30 Baa3 BBB 1,311
--------
2,913
--------
NEW YORK (1.1%)
500 New York City IDA Liberty Rev. (7 World Trade Center, LLC Proj.),
Ser. 2005 A, 6.25%, due 3/1/15 534^^
500 New York City IDA Spec. Fac. Rev. (American Airlines, Inc. J.F.K.
Int'l. Arpt. Proj.), Ser. 2005, 7.50%, due 8/1/16 B 574~
--------
1,108
--------
NORTH CAROLINA (1.5%)
1,405 North Carolina Muni. Pwr. Agcy. Number 1 Catawba Elec. Rev.,
Ser. 2003 A, 5.50%, due 1/1/14 A3 BBB+ 1,522
--------
OHIO (0.5%)
500 Coshocton Co. Env. Imp. Ref. Rev. (Smurfit-Stone Container
Enterprises, Inc. Proj.), Ser. 2005, 5.13%, due 8/1/13 CCC+ 503~
--------
PENNSYLVANIA (1.1%)
1,000 Cumberland Co. West Shore Area Au. Hosp. Rev. (Holy Spirit
Hosp. of the Sisters of Christian Charity Proj.), Ser. 2001,
6.00%, due 1/1/18 BBB 1,074~
--------
PUERTO RICO (6.6%)
1,300 Puerto Rico Children's Trust Tobacco Settlement Asset-Backed
Rev., Ser. 2002, 5.38%, due 5/15/33 Baa3 BBB 1,366
1,000 Puerto Rico Ind., Tourist, Ed., Med. & Env. Ctrl. Fac. Rev.
(Polytechnic Univ. of Puerto Rico Proj.), Ser. 2002 A,
(ACA Insured), 5.25%, due 8/1/15 A 1,049~
3,000 Puerto Rico Muni. Fin. Agcy. Rev., Ser. 2002 A, (FSA Insured),
5.25%, due 8/1/17 Aaa AAA 3,259
1,000 Puerto Rico Muni. Fin. Agcy. Rev., Ser. 2002 A, (FSA Insured),
5.25%, due 8/1/21 Aaa AAA 1,082
--------
6,756
--------
TEXAS (3.3%)
900 Brazos River Au. Ref. PCR (TXU Energy Co. LLC Proj.), Ser. 2003 A,
6.75%, due 4/1/38 Putable 4/1/13 Baa2 BBB- 1,017~
750 Brazos River Au. Ref. Rev. (Reliant Energy, Inc. Proj.), Ser. 1999
B, 7.75%, due 12/1/18 Ba1 BBB- 805~
1,000 Brazos River Harbor Navigation Dist. of Brazoria Co. Env.
Fac. Rev. (Dow Chemical Co. Proj.), Ser. 2002 A-4,
5.20%, due 5/15/33 A3 A- 1,019~
10
NEUBERGER BERMAN OCTOBER 31, 2006
SCHEDULE OF INVESTMENTS CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC. CONT'D
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$ 500 Dallas-Fort Worth Int'l. Arpt. Fac. Imp. Corp. Rev., Ser. 2004 A-1,
6.15%, due 1/1/16 Ba2 $ 506~
--------
3,347
--------
VIRGIN ISLANDS (2.0%)
250 Virgin Islands Pub. Fin. Au. Refinery Fac. Rev. (HOVENSA Refinery),
Ser. 2003, 6.13%, due 7/1/22 Baa3 BBB 275
750 Virgin Islands Pub. Fin. Au. Rev. (Virgin Islands Matching Fund
Loan Notes), Ser. 1998 E, 6.00%, due 10/1/22 786^^
1,000 Virgin Islands Wtr. & Pwr. Au. Elec. Sys. Ref. Rev., Ser. 1998,
5.30%, due 7/1/18 1,008^^
--------
2,069
--------
TOTAL INVESTMENTS (156.0%) (COST $153,312) 158,901##
Cash, receivables and other assets, less liabilities (1.9%) 1,982
Liquidation Value of Auction Market Preferred Shares [(57.9%)] (59,000)
--------
TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS (100.0%) $101,883
--------
See Notes to Schedule of Investments
11
SCHEDULE OF INVESTMENTS INTERMEDIATE MUNICIPAL FUND INC.
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
ALABAMA (1.5%)
$4,210 DCH Hlth. Care Au. Hlth. Care Fac. Rev., Ser. 2002,
5.25%, due 6/1/14 A1 A+ $ 4,524
-------
ARIZONA (1.9%)
1,465 Arizona Energy Management Svcs. (Main) LLC Energy
Conservation Rev. (Arizona St. Univ. Proj.-Main Campus),
Ser. 2002, (MBIA Insured), 5.25%, due 7/1/17 Aaa AAA 1,582
1,750 Verrado Comm. Fac. Dist. Number 1 G.O., Ser. 2003,
6.15%, due 7/15/17 1,882^^
2,325 Verrado Comm. Fac. Dist. Number 1 G.O., Ser. 2006, 5.05%,
due 7/15/18 2,355^^
-------
5,819
-------
CALIFORNIA (7.6%)
3,500 California Poll. Ctrl. Fin. Au. Solid Waste Disp. Rev. (Republic Svc.,
Inc. Proj.), Ser. 2002 B, 5.25%, due 6/1/23 Putable 12/1/17 Baa2 BBB+ 3,784~**
2,000 California Poll. Ctrl. Fin. Au. Solid Waste Disp. Rev.
(Waste Management, Inc. Proj.), Ser. 2005 C,
5.13%, due 11/1/23 BBB 2,114~
2,500 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A,
5.75%, due 5/1/17 Aaa A- 2,805
3,460 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A,
5.38%, due 5/1/22 Aaa A- 3,818
1,500 California St. Pub. Works Board Lease Rev., Ser. 2002 A,
(AMBAC Insured), 5.25%, due 12/1/17 Aaa AAA 1,629
1,240 California Statewide CDA Hlth. Fac. Rev. (Mem. Hlth. Svcs.),
Ser. 2003 A, 6.00%, due 10/1/16 A3 A+ 1,373~
3,000 Golden St. Tobacco Securitization Corp. Tobacco Settlement
Asset-Backed Rev., Ser. 2003 A-1, 6.25%, due 6/1/33 Baa3 BBB 3,345
2,080 Oakland Redev. Agcy. Sub. Tax Allocation Rev. (Central Dist.
Redev. Proj.), Ser. 2003, (FGIC Insured), 5.50%, due 9/1/18 Aaa AAA 2,287
740 San Diego Redev. Agcy. Sub. Parking Rev. (Centre City Redev. Proj.),
Ser. 2003 B, 5.00%, due 9/1/17 Baa2 763
1,500 Santa Rosa Rancheria Tachi Yokut Tribe Enterprise Rev., Ser. 2006,
4.88%, due 3/1/16 1,525^^
-------
23,443
-------
COLORADO (5.3%)
4,220 Colorado Springs Util. Sys. Sub. Lien Ref. Rev., Ser. 2002 A,
(AMBAC Insured), 5.38%, due 11/15/18 Aaa AAA 4,594
4,000 Denver City & Co. Arpt. Sys. Ref. Rev., Ser. 2002 E, (FGIC Insured),
5.25%, due 11/15/14 Aaa AAA 4,290
2,000 Denver City & Co. Arpt. Sys. Rev., Ser. 1991 D,
7.75%, due 11/15/13 A1 AAA 2,281
4,610 Thornton Cert. of Participation, Ser. 2002, (AMBAC Insured),
5.38%, due 12/1/16 Aaa AAA 5,035
-------
16,200
-------
CONNECTICUT (0.8%)
2,400 Mashantucket Western Pequot Tribe Spec. Rev., Sub. Ser. 1997 B,
5.70%, due 9/1/12 Baa3 2,485^
-------
DISTRICT OF COLUMBIA (1.6%)
4,495 Dist. of Columbia (Washington, D.C.) Ref. G.O., Ser. 2002 C,
5.25%, due 6/1/13 Aaa AAA 4,831
-------
FLORIDA (8.8%)
2,500 Broward Co. G.O., Ser. 2001 A, 5.25%, due 1/1/18 Aa1 AA+ 2,673
2,805 Fiddlers Creek Comm. Dev. Dist. Number 2 Spec. Assessment Rev.,
Ser. 2003 A, 6.00%, due 5/1/16 2,942^^
12
NEUBERGER BERMAN OCTOBER 31, 2006
SCHEDULE OF INVESTMENTS INTERMEDIATE MUNICIPAL FUND INC. CONT'D
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$1,750 Miami Beach Hlth. Fac. Au. Hosp. Ref. Rev. (Mount Sinai Med. Ctr.
of Florida Proj.), Ser. 2004, 6.25%, due 11/15/09 Ba1 BB+ $ 1,844~
8,140 Orange Co. Sales Tax Ref. Rev., Ser. 2002 A, (FGIC Insured),
5.13%, due 1/1/18 Aaa AAA 8,764
2,085 Palm Beach Co. Hlth. Fac. Au. Hosp. Ref. Rev. (BRCH Corp.
Oblig. Group), Ser. 2001, 5.00%, due 12/1/12 A 2,186~
7,000 Palm Beach Co. Sch. Board Cert. of Participation, Ser. 2001 B,
(AMBAC Insured), 5.38%, due 8/1/17 Aaa AAA 7,590
1,000 Sarasota Co. Util. Sys. Ref. Rev., Ser. 2002 C, (FGIC Insured),
5.25%, due 10/1/20 Aaa AAA 1,078
-------
27,077
-------
GEORGIA (2.6%)
4,575 Henry Co. Wtr. & Swr. Au. Wtr. & Swr. Ref. Rev., Ser. 2002 A,
(MBIA Insured), 5.13%, due 2/1/17 Aaa AAA 4,989
2,710 Newnan Hosp. Au. Rev. Anticipation Cert. (Newnan Hosp.,
Inc. Proj.), Ser. 2002, (MBIA Insured), 5.50%, due 1/1/18 Aaa 2,980~
-------
7,969
-------
ILLINOIS (9.9%)
5,940 Chicago G.O., Ser. 2002 A, (AMBAC Insured), 5.38%,
due 1/1/17 P/R 7/1/12 Aaa AAA 6,488
180 Chicago G.O., Ser. 2002 A, (AMBAC Insured), 5.38%, due 1/1/17 Aaa AAA 195
1,500 Chicago Metro. Wtr. Reclamation Dist. Cap. Imp. G.O.,
Ser. 2002 C, 5.38%, due 12/1/16 Aaa AAA 1,636
5,130 Illinois Ed. Fac. Au. Rev. (Field Museum of Natural History),
Ser. 2002, 4.30%, due 11/1/36 A2 A 5,214~
4,000 Illinois Fin. Au. Rev. (Clare Oaks Proj.), Ser. 2006 A,
5.75%, due 11/15/16 4,155~^^
5,000 Illinois G.O., Ser. 2002, (MBIA Insured), 5.25%, due 10/1/14 Aaa AAA 5,427
3,000 Illinois Hlth. Fac. Au. Rev. (Loyola Univ. Hlth. Sys.), Ser. 1997 A,
(MBIA Insured), 6.00%, due 7/1/14 Aaa AAA 3,452~
1,670 Illinois Metro. Pier & Exposition Au. Dedicated St. Tax Ref. Rev.,
Ser. 1998 A, 5.50%, due 6/15/17 Aaa AAA 1,921
2,000 Kane, Cooke, & DuPage Cos. Elgin Sch. Dist. Number U-46 G.O.,
Ser. 1998, (FSA Insured), 5.35%, due 1/1/15 Aaa 2,146
-------
30,634
-------
INDIANA (9.6%)
1,995 Indiana Bond Bank Rev. (St. Revolving Fund Prog.), Ser. 2001 A,
5.38%, due 2/1/17 AAA 2,207
760 Indiana Bond Bank Rev. (St. Revolving Fund Prog.), Ser. 2001 B,
5.25%, due 2/1/18 AAA 830
8,005 Indiana Bond Bank Rev. (Unrefunded Bal. Revolving Fund Prog.),
Ser. 2001 A, 5.38%, due 2/1/17 AAA 8,786
2,800 Indiana Bond Bank Rev. (Unrefunded Bal. Revolving Fund Prog.),
Ser. 2002 B, 5.25%, due 2/1/18 AAA 3,025
4,000 Indiana Hlth. & Ed. Fac. Fin. Au. Hosp. Ref. Rev. (Clarian Hlth.
Oblig. Group), Ser. 2006 B, 5.00%, due 2/15/21 A2 A+ 4,225~
1,000 Indiana Muni. Pwr. Agcy. Pwr. Supply Sys. Rev., Ser. 2002 B,
(MBIA Insured), 5.25%, due 1/1/18 Aaa AAA 1,078
2,050 Indiana St. Hlth. Fac. Fin. Au. Rev. (Hlth. Sys. Sisters of
St. Francis), Ser. 2001, 5.35%, due 11/1/15 Aa3 2,212~
1,065 Indiana St. Recreational Dev. Comm. Rev., Ser. 2002,
(AMBAC Insured), 5.25%, due 7/1/18 Aaa AAA 1,139
1,125 Indiana St. Recreational Dev. Comm. Rev., Ser. 2002,
(AMBAC Insured), 5.25%, due 7/1/19 Aaa AAA 1,201
See Notes to Schedule of Investments
13
SCHEDULE OF INVESTMENTS INTERMEDIATE MUNICIPAL FUND INC. CONT'D
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$2,580 Indianapolis Local Pub. Imp. Rev. (Indianapolis Arpt. Au. Proj.),
Ser. 2003 A, (FSA Insured), 5.63%, due 1/1/17 Aaa AAA $ 2,813
2,000 Jasper Hosp. Au. Hosp. Fac. Ref. Rev. (Mem. Hosp. & Hlth. Care
Ctr. Proj.), Ser. 2002, 5.50%, due 11/1/17 AA 2,166~
-------
29,682
-------
IOWA (2.1%)
3,000 Iowa Tobacco Settlement Au. Tobacco Settlement Asset-Backed
Rev., Ser. 2001 B, 5.30%, due 6/1/25 AAA 3,198
3,000 Iowa Tobacco Settlement Au. Tobacco Settlement Asset-Backed
Rev., Ser. 2005 C, 5.38%, due 6/1/38 Baa3 BBB 3,135
-------
6,333
-------
KENTUCKY (0.6%)
2,000 Louisville & Jefferson Co. Kentucky Reg. Arpt. Au. Spec. Fac. Rev.
(UPS Worldwide Forwarding), Ser. 1999 A, 3.64%, due 11/1/06 Aaa AAA 2,000~
-------
LOUISIANA (1.2%)
2,500 Morehouse Parish Ref. PCR (Int'l. Paper Co. Proj.), Ser. 2001 A,
5.25%, due 11/15/13 Baa3 BBB 2,671~
1,000 Tobacco Settlement Fin. Corp. Tobacco Settlement Asset-Backed
Rev., Ser. 2001 B, 5.50%, due 5/15/30 Baa3 BBB 1,049
-------
3,720
-------
MARYLAND (0.5%)
1,000 Maryland St. Hlth. & Higher Ed. Fac. Au. Rev. (Union Hosp. of
Cecil Co.), Ser. 2002, 5.50%, due 7/1/14 A3 1,072~
400 Prince George's Co. Unrefunded Balance Cons. Pub. Imp. G.O.,
Ser. 2001, (FGIC Insured), 5.25%, due 12/1/16 Aaa AAA 435
-------
1,507
-------
MASSACHUSETTS (8.6%)
3,000 Massachusetts Port Au. Spec. Fac. Rev. (Delta Air Lines, Inc. Proj.),
Ser. 2001 A, (AMBAC Insured), 5.50%, due 1/1/19 Aaa AAA 3,154~
1,850 Massachusetts St. G.O., Ser. 2002 E, (MBIA Insured),
5.38%, due 1/1/18 Aaa AAA 2,025
2,450 Massachusetts St. Hlth. & Ed. Fac. Au. Rev. (Caritas Christi
Oblig. Group), Ser. 1999 A, 5.70%, due 7/1/15 Baa3 BBB 2,556~
2,810 Massachusetts St. Hlth. & Ed. Fac. Au. Rev. (Milford-Whitinsville
Reg. Hosp.), Ser. 1998 C, 5.75%, due 7/15/13 Baa3 BBB- 2,914~
4,935 Massachusetts St. Hlth. & Ed. Fac. Au. Rev. (New England Med.
Ctr. Hosp.), Ser. 2002 H, (FGIC Insured), 5.38%, due 5/15/16 Aaa AAA 5,363~
2,000 Massachusetts St. Wtr. Poll. Abatement Trust Pre-Refunded Rev.
(Pool Prog.), Ser. 2001, 5.25%, due 2/1/16 P/R 8/1/11 Aaa AAA 2,140
5,030 Massachusetts St. Wtr. Poll. Abatement Trust Rev. (MWRA Prog.),
Ser. 2002 A, 5.25%, due 8/1/19 Aaa AAA 5,446
2,775 Massachusetts St. Wtr. Poll. Abatement Trust Unrefunded Balance
Rev. (Pool Prog.), Ser. 2001, 5.25%, due 2/1/16 Aaa AAA 2,963
-------
26,561
-------
MICHIGAN (6.5%)
3,075 Detroit Sch. Dist. Sch. Bldg. & Site Imp. G.O., Ser. 2002 A,
(FGIC Insured), 5.50%, due 5/1/15 Aaa AAA 3,411
1,070 Ingham & Clinton Cos. East Lansing Bldg. Au. Ref. G.O., Ser. 1999,
5.25%, due 10/1/16 AA 1,121
1,375 Macomb Co. New Haven Comm. Sch. Bldg. & Site G.O., Ser. 2002,
5.25%, due 5/1/17 Aa2 AA 1,499
14
NEUBERGER BERMAN OCTOBER 31, 2006
SCHEDULE OF INVESTMENTS INTERMEDIATE MUNICIPAL FUND INC. CONT'D
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$1,500 Michigan St. Bldg. Au. Rev. (Fac. Prog.), Ser. 2001 II, 5.50%,
due 10/15/18 Aa3 AA- $ 1,630
5,000 Michigan St. Hsg. Dev. Au. Single-Family Mtge. Rev., Ser. 2001 A,
(MBIA Insured), 5.30%, due 12/1/16 Aaa AAA 5,177
3,850 Royal Oak Hosp. Fin. Au. Hosp. Ref. Rev. (William Beaumont Hosp.),
Ser. 1996 I, 6.25%, due 1/1/12 Aa3 AA- 4,277~
100 Royal Oak Hosp. Fin. Au. Hosp. Ref. Rev. (William Beaumont Hosp.),
Ser. 2006 T, (AMBAC Insured), 3.65%, due 11/1/06 VMIG1 A-1 100~#
1,000 Summit Academy North Pub. Sch. Academy Ref. Rev., Ser. 2005,
6.00%, due 11/1/15 BB+ 1,012
2,000 Summit Academy North Pub. Sch. Academy Ref. Rev., Ser. 2005,
5.25%, due 11/1/20 BB+ 1,975
-------
20,202
-------
MINNESOTA (1.6%)
2,000 Freeborn Co. Hsg. & Redev. Au. Lease Rev. (Criminal Justice Ctr.
Proj.), Ser. 2002, 5.38%, due 2/1/17 Baa1 2,115
2,540 St. Paul Port Au. Lease Rev. (Office Bldg. at Cedar Street),
Ser. 2002, 5.00%, due 12/1/17 Aa2 AA+ 2,689
-------
4,804
-------
MISSOURI (4.0%)
3,495 Bi State Dev. Agcy. Metro. Dist. Rev. (Metrolink Cross Co.
Extension Proj.), Ser. 2002 B, (FSA Insured), 5.25%, due 10/1/16 Aaa AAA 3,829
2,000 Boone Co. Hosp. Ref. Rev. (Boone Hosp. Ctr.), Ser. 2002, 5.05%,
due 8/1/20 A3 2,079~
2,425 Branson Dev. Fin. Board Infrastructure Fac. Board Rev.,
Ser. 2003 A, 5.00%, due 12/1/17 Baa1 BBB+ 2,493
750 Branson Ind. Dev. Au. Ltd. Oblig. Tax Increment Rev. (Branson
Landing-Retail Proj.), Ser. 2005, 5.25%, due 6/1/21 764^^
2,000 Missouri St. Env. Imp. & Energy Res. Au. Wtr. Poll. Ctrl. &
Drinking Wtr. Rev., Ser. 2002 B, 5.50%, due 7/1/16 Aaa 2,213
820 Missouri St. Hsg. Dev. Comm. Multi-Family Hsg. Rev., Ser. 2001 II,
5.25%, due 12/1/16 AA 858
155 Missouri St. Hsg. Dev. Comm. Multi-Family Hsg. Rev., Ser. 2001 III,
5.05%, due 12/1/15 AA 162
-------
12,398
-------
NEBRASKA (0.1%)
300 Washington Co. Ind. Dev. Rev. (Cargill Dow Polymers LLC),
(LOC: Wachovia Bank & Trust Co.), Ser. 2000, 3.71%, due 11/1/06 VMIG1 A-1+ 300~#
-------
NEVADA (5.5%)
5,335 Clark Co. Passenger Fac. Charge Ref. Rev. (Las Vegas-McCarran
Int'l. Arpt. Proj.), Ser. 2002 A, (MBIA Insured),
5.25%, due 7/1/10 Aaa AAA 5,587
900 Clark Co. Sch. Dist. G.O., Ser. 2001 A, (FSA Insured),
3.55%, due 11/1/06 VMIG1 A-1+ 900#
4,355 Las Vegas Valley Wtr. Dist. Ref. & Wtr. Imp. G.O., Ser. 2003 A,
(FGIC Insured), 5.25%, due 6/1/16 Aaa AAA 4,709
5,395 Truckee Meadows Wtr. Au. Wtr. Rev., Ser. 2001 A, (FSA Insured),
5.50%, due 7/1/15 Aaa AAA 5,803
-------
16,999
-------
See Notes to Schedule of Investments
15
SCHEDULE OF INVESTMENTS INTERMEDIATE MUNICIPAL FUND INC. CONT'D
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
NEW HAMPSHIRE (1.8%)
$3,310 New Hampshire Hlth. Ed. Fac. Au. Rev. (Univ. Sys. of
New Hampshire), Ser. 1992, (AMBAC Insured),
5.38%, due 7/1/17 Aaa AAA $ 3,598
1,700 New Hampshire Hlth. Ed. Fac. Au. Rev. (Univ. Sys. of New Hampshire),
Ser. 1992, (AMBAC Insured), 5.38%, due 7/1/17 Aaa AAA 1,834
-------
5,432
-------
NEW JERSEY (6.0%)
5,000 New Jersey Bldg. Au. St. Bldg. Ref. Rev., Ser. 2002 B,
(FSA Insured),
5.25%, due 12/15/15 Aaa AAA 5,432
1,500 New Jersey Econ. Dev. Au. Cigarette Tax Rev., Ser. 2004,
5.63%, due 6/15/19 Baa2 BBB 1,577
6,900 New Jersey Ed. Fac. Au. Rev. (Stevens Institute of Technology),
Ser. 2002 C, 5.25%, due 7/1/17 Baa2 BBB+ 7,350~
4,000 New Jersey Hlth. Care Fac. Fin. Au. Rev. (Somerset Med. Ctr. Issue),
Ser. 2003, 5.50%, due 7/1/18 Baa3 4,171~
-------
18,530
-------
NEW YORK (5.8%)
1,105 Lyons Comm. Hlth. Initiatives Corp. Fac. Rev., Ser. 2004,
5.50%, due 9/1/14 A2 1,196
3,250 New York City G.O., Ser. 2002 C, 5.50%, due 8/1/15 A1 AA- 3,567
2,580 New York City IDA Civic Fac. Rev. (Lycee Francais de New York Proj.),
Ser. 2002 A, 5.50%, due 6/1/14 A 2,737~
2,750 New York City IDA Liberty Rev. (7 World Trade Center, LLC Proj.),
Ser. 2005 A, 6.25%, due 3/1/15 2,936^^
1,750 New York City IDA Spec. Fac. Rev. (American Airlines, Inc.
J.F.K. Int'l. Arpt. Proj.), Ser. 2005, 7.50%, due 8/1/16 B 2,008~
1,000 New York Convention Ctr. Operating Corp. Cert. of Participation
(Yale Bldg. Acquisition Proj.), Ser. 2003, 5.25%, due 6/1/08 1,020^^
1,250 New York Liberty Dev. Corp. Rev. (Nat'l. Sports Museum Proj.),
Ser. 2006 A, 6.13%, due 2/15/19 1,298^^
1,700 New York St. Dorm. Au. Personal Income Tax Rev., Ser. 2003 A,
5.38%, due 3/15/20 Aa3 AAA 1,875
1,300 New York St. Urban Dev. Corp. Ref. Rev. (Correctional Cap. Fac.),
Ser. 1998, 5.00%, due 1/1/14 A1 AA- 1,347
-------
17,984
-------
NORTH DAKOTA (1.4%)
4,100 Fargo Hlth. Sys. Rev. (Meritcare Obligated Group), Ser. 2002 A,
(AMBAC Insured), 5.63%, due 6/1/17 Aaa AAA 4,461~
-------
OHIO (2.7%)
1,000 Coshocton Co. Env. Imp. Ref. Rev. (Smurfit-Stone Container
Enterprises, Inc. Proj.), Ser. 2005, 5.13%, due 8/1/13 CCC+ 1,005~
3,000 Moraine Solid Waste Disp. Rev. (General Motors Corp. Proj.),
Ser. 1994, 6.75%, due 7/1/14 Caa1 B- 3,210~
3,760 Ohio Air Quality Dev. Au. Env. Imp. Ref. Rev. (USX Corp. Proj.),
Ser. 1995, 5.00%, due 11/1/15 Baa1 BBB+ 3,993~
-------
8,208
-------
PENNSYLVANIA (5.6%)
1,765 Cumberland Co. West Shore Area Au. Hosp. Rev. (Holy Spirit Hosp.
of the Sisters of Christian Charity Proj.), Ser. 2001,
6.05%, due 1/1/19 BBB 1,896~
565 Delaware River Joint Toll Bridge Comm. Sys. Rev., Ser. 2003,
5.25%, due 7/1/18 P/R 7/1/13 A2 A- 618
16
NEUBERGER BERMAN OCTOBER 31, 2006
SCHEDULE OF INVESTMENTS INTERMEDIATE MUNICIPAL FUND INC. CONT'D
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$ 435 Delaware River Joint Toll Bridge Comm. Sys. Rev., Ser. 2003,
5.25%, due 7/1/18 A2 A- $ 468
2,000 Lehigh Co. Gen. Purp. Au. Rev. (KidsPeace Oblig. Group), Ser. 1998,
6.00%, due 11/1/23 B2 1,960~
5,000 Montgomery Co. Higher Ed. & Hlth. Au. Hosp. Rev. (Abington
Mem. Hosp. Proj.), Ser. 2002 A, 5.00%, due 6/1/19 A 5,187~
1,000 Pennsylvania Econ. Dev. Fin. Au. Res. Rec. Ref. Rev. (Colver Proj.),
Ser. 2005 G, 5.13%, due 12/1/15 1,000^^
2,000 Philadelphia Arpt. Ref. Rev. (Philadelphia Arpt. Sys.),
Ser. 1998 A, (FGIC Insured), 5.38%, due 6/15/14 Aaa AAA 2,087
2,000 Sayre Hlth. Care Fac. Au. Rev. (Guthrie Hlth. Proj.), Ser. 2002 A,
5.75%, due 12/1/21 A- 2,168~
2,000 Westmoreland Co. IDA Gtd. Rev. (National Waste & Energy Corp.,
Valley Landfill Expansion Proj.), Ser. 1993, 5.10%, due 5/1/18 BBB 2,040~
-------
17,424
-------
SOUTH CAROLINA (5.4%)
1,100 Charleston Co. Sch. Dist. G.O., Ser. 2001, (FSA Insured),
5.00%, due 2/1/18 Aaa AAA 1,166
2,140 Mt. Pleasant Town Waterworks & Swr. Sys. Ref. & Imp. Rev.,
Ser. 2002, (FGIC Insured), 5.25%, due 12/1/17 Aaa AAA 2,324
2,345 South Carolina Jobs Econ. Dev. Au. Hosp. Ref. Rev.
(Palmetto Hlth. Alliance), Ser. 2003 A, 6.00%, due 8/1/13 Baa1 BBB+ 2,553~
2,000 South Carolina Jobs Econ. Dev. Au. Hosp. Ref. Rev.
(Palmetto Hlth. Alliance), Ser. 2003 A, 6.13%, due 8/1/23 Baa1 BBB+ 2,179~
4,665 South Carolina St. Pub. Svc. Au. Rev., Ser. 2002 B, (FSA Insured),
5.38%, due 1/1/18 Aaa AAA 5,049
3,500 Union Co. IDR (Federal Paper Board Co., Inc. Proj.), Ser. 1989,
4.55%, due 11/1/09 Baa3 BBB 3,502~
-------
16,773
-------
TENNESSEE (2.1%)
3,015 Knox Co. Hlth., Ed. & Hsg. Fac. Board Hosp. Ref. & Imp. Rev.,
Ser. 2002 A, (FSA Insured), 5.50%, due 1/1/18 Aaa AAA 3,263~
3,085 Memphis-Shelby Co. Arpt. Au. Spec. Fac. Ref. Rev.
(Federal Express Corp.), Ser. 2002, 5.05%, due 9/1/12 Baa2 BBB 3,267~
-------
6,530
-------
TEXAS (22.5%)
4,145 Anson Ed. Fac. Corp. Std. Hsg. Rev. (Univ. of Texas at
Dallas-Waterview Park Proj.), Ser. 2002, 5.00%, due 1/1/23 A 4,288~
1,000 Austin Convention Enterprises, Inc. Convention Ctr. Hotel First
Tier Rev., Ser. 2001 A, 6.38%, due 1/1/16 Baa3 BBB- 1,070
3,300 Brazos River Au. Ref. PCR (TXU Energy Co. LLC Proj.), Ser. 2003 A,
6.75%, due 4/1/38 Putable 4/1/13 Baa2 BBB- 3,729~**
1,000 Brazos River Au. Ref. PCR (TXU Energy Co. LLC Proj.), Ser. 2003 D,
5.40%, due 10/1/29 Putable 10/1/14 BBB- 1,063~**
1,000 Brazos River Au. Ref. Rev. (Reliant Energy, Inc. Proj.),
Ser. 1999 B, 7.75%, due 12/1/18 Ba1 BBB- 1,073~
3,600 Corpus Christi Tax & Muni. Hotel Occupancy Tax G.O., Ser. 2002,
(FSA Insured), 5.50%, due 9/1/17 Aaa AAA 3,943
2,100 Dallas-Fort Worth Int'l. Arpt. Fac. Imp. Corp. Rev., Ser. 2004 A-1,
6.15%, due 1/1/16 Ba2 2,125~
1,935 Dallas-Fort Worth Int'l. Arpt. Imp. Rev., Ser. 2004 B,
(FSA Insured), 5.50%, due 11/1/18 Aaa AAA 2,122
See Notes to Schedule of Investments
17
SCHEDULE OF INVESTMENTS INTERMEDIATE MUNICIPAL FUND INC. CONT'D
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$1,000 Denton, Tarrant, & Wise Cos. Northwest Ind. Sch. Dist.
Unlimited Sch. Bldg. & Ref. G.O., Ser. 2002,
5.50%, due 8/15/17 Aaa 1,100
1,750 Ector Co. Hosp. Dist. Hosp. Rev., Ser. 2002 A, 5.63%, due 4/15/16 A3 BBB+ 1,819
1,745 Ector Co. Hosp. Dist. Hosp. Rev., Ser. 2002 A, 5.63%, due 4/15/17 A3 BBB+ 1,811
7,000 Harris Co. Toll Road Sr. Lien Ref. Rev., Ser. 2002, (FSA Insured),
5.38%, due 8/15/16 Aaa AAA 7,624
610 HFDC Central Texas Inc. Retirement Fac. Rev., Ser. 2006 A,
5.25%, due 11/1/15 619~^^
3,235 Houston Arpt. Sys. Sub. Lien. Ref. Rev., Ser. 2001 A, (FGIC Insured),
5.50%, due 7/1/16 Aaa AAA 3,475
4,955 Houston Pub. Imp. Ref. G.O., Ser. 2002, (MBIA Insured),
5.25%, due 3/1/17 Aaa AAA 5,330
2,000 Lubbock Hlth. Fac. Dev. Corp. Rev. (St. Joseph Hlth. Sys.),
Ser. 1998, 5.25%, due 7/1/16 Aa3 AA- 2,072~
4,780 North Central Hlth. Fac. Dev. Corp. Hosp. Ref. Rev. (Baylor Hlth.
Care Sys. Proj.), Ser. 1998, 5.10%, due 5/15/13 Aa3 AA- 4,982~
6,795 San Antonio Ind. Sch. Dist. Unlimited Tax G.O., Ser. 2001 B,
5.38%, due 8/15/17 Aaa AAA 7,299
20 San Antonio Pre-Refunded Cert. of Obligation G.O., Ser. 2002,
5.00%, due 2/1/14 P/R 2/1/12 Aa2 AA+ 21
1,240 San Antonio Unrefunded Balance Cert. of Obligation G.O.,
Ser. 2002, 5.00%, due 2/1/14 Aa2 AA+ 1,313
1,910 Southmost Reg. Wtr. Au. Wtr. Supply Contract Rev.
(Desalination Plant Proj.), Ser. 2002, (MBIA Insured),
5.50%, due 9/1/19 Aaa 2,078
4,200 Tarrant Reg. Wtr. Dist. Wtr. Ref. & Imp. Rev., Ser. 2002,
(FSA Insured), 5.38%, due 3/1/16 Aaa AAA 4,581
420 Texas Std. Hsg. Corp. Std. Hsg. Rev. (Midwestern St. Univ. Proj.),
Ser. 2002, 5.50%, due 9/1/12 Baa3 438
1,000 Trinity River Au. Imp. & Ref. Rev. (Tarrant Co. Wtr. Proj.),
Ser. 2003, (MBIA Insured), 5.50%, due 2/1/16 Aaa AAA 1,104
1,085 Tyler Hlth. Fac. Dev. Corp. Hosp. Rev. (Mother Frances Hosp. Reg.
Hlth. Care Ctr. Proj.), Ser. 2003, 5.25%, due 7/1/13 Baa1 1,154
2,950 Univ. of Texas Board of Regents Fin. Sys. Rev., Ser. 1999 B,
5.38%, due 8/15/18 Aaa AAA 3,091
------
69,324
------
VIRGIN ISLANDS (0.9%)
1,000 Virgin Islands Pub. Fin. Au. Refinery Fac. Rev. (HOVENSA Refinery),
Ser. 2003, 6.13%, due 7/1/22 Baa3 BBB 1,102
1,500 Virgin Islands Pub. Fin. Au. Refinery Fac. Rev. (HOVENSA Refinery),
Ser. 2004, 5.88%, due 7/1/22 Baa3 BBB 1,637~
------
2,739
------
VIRGINIA (1.5%)
1,000 Hopewell Ind. Dev. Au. Env. Imp. Ref. Rev. (Smurfit-Stone Container
Enterprise, Inc. Proj.), Ser. 2005, 5.25%, due 6/1/15 CCC+ 1,012~
2,620 Peninsula Ports Au. Res. Care Fac. Ref. Rev. (VA Baptist Homes),
Ser. 2006 C, 5.25%, due 12/1/21 2,694~^^
1,000 Virginia Beach Dev. Au. Residential Care Fac. Mtge. Ref. Rev.
(Westminster-Canterbury of Hampton Roads, Inc.), Ser. 2005,
5.00%, due 11/1/22 1,012~^^
------
4,718
------
18
NEUBERGER BERMAN OCTOBER 31, 2006
SCHEDULE OF INVESTMENTS INTERMEDIATE MUNICIPAL FUND INC. CONT'D
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
WASHINGTON (12.7%)
$3,000 CDP-King Co. III Lease Rev. (King Street Ctr. Proj.), Ser. 1997,
(MBIA Insured), 5.13%, due 6/1/17 Aaa AAA $ 3,060
1,000 Clark Co. Vancouver Sch. Dist. Number 37 G.O., Ser. 1998,
5.13%, due 12/1/12 Aa3 1,076
8,800 Energy Northwest Elec. Ref. Rev. (Proj. No. 3), Ser. 2001 A,
(FSA Insured), 5.50%, due 7/1/17 Aaa AAA 9,546
5,000 King & Snohomish Cos. Northshore Sch. Dist. Number 417 G.O.,
Ser. 2002, (FSA Insured), 5.50%, due 12/1/17 Aaa AAA 5,486
4,260 King Co. Pub. Trans. Sales Tax Ref. G.O., Ser. 2002, (FSA Insured),
5.38%, due 12/1/14 Aaa AAA 4,647
6,250 Port of Seattle Sub. Lien Rev., Ser. 2002 B, (FGIC Insured),
5.50%, due 9/1/16 Aaa AAA 6,726
1,625 Skagit Co. Pub. Hosp. Dist. Ref. Rev., Ser. 2003,
6.00%, due 12/1/18 Baa2 1,762
2,500 Tacoma Wtr. Sys. Rev., Ser. 2001, (FGIC Insured), 5.13%,
due 12/1/19 Aaa AAA 2,646
3,125 Washington St. Hlth. Care Fac. Au. Rev. (Yakima Valley Mem.
Hosp. Assoc.), Ser. 2002, 5.00%, due 12/1/17 A 3,239~
1,000 Washington St. Var. Purp. G.O., Ser. 1999 A, 4.75%, due 7/1/17 Aa1 AA 1,014
---------
39,202
---------
WISCONSIN (5.1%)
1,485 Badger Tobacco Asset Securitization Corp. Tobacco Settlement
Asset-Backed Rev., Ser. 2002, 6.13%, due 6/1/27 Baa3 BBB 1,594
1,900 Univ. of Wisconsin Hosp. & Clinics Au. Hosp. Rev., Ser. 2002 B,
5.50%, due 4/1/12 A1 A+ 2,029
1,370 Wisconsin Hlth. & Ed. Fac. Au. Rev. (Aurora Med. Group, Inc. Proj.),
Ser. 1996, (FSA Insured), 6.00%, due 11/15/11 Aaa AAA 1,508~
7,205 Wisconsin St. G.O., Ser. 2002 C, 5.25%, due 5/1/17 P/R 5/1/12 Aaa AAA 7,752
2,780 Wisconsin St. Hlth. & Ed. Fac. Au. Rev. (Kenosha Hosp. & Med.
Ctr., Inc. Proj.), Ser. 1999, 5.50%, due 5/15/15 A 2,914~
---------
15,797
---------
WYOMING (1.6%)
4,895 Wyoming Community Dev. Au. Hsg. Rev., Ser. 2006 6,
5.00%, due 12/1/21 Aa1 AA+ 5,068
---------
OTHER (1.6%)
2,000 MuniMae Subordinated Cumulative Perpetual Preferred Shares,
4.70%, due 6/30/49 Putable 9/30/09 Baa2 1,997^
3,000 Non-Profit Pfd. Fdg. Trust I, Ser. 2006 C, 4.72%, due 9/15/37 A2 2,966*
-------
4,963
-------
TOTAL INVESTMENTS (157.0%) (COST $468,543) 484,641##
Cash, receivables and other assets, less liabilities (1.1%) 3,440
Liquidation Value of Auction Market Preferred Shares [(58.1%)] (179,400)
---------
TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS (100.0%) $ 308,681
---------
See Notes to Schedule of Investments
19
SCHEDULE OF INVESTMENTS NEW YORK INTERMEDIATE MUNICIPAL FUND INC.
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
ARIZONA (0.7%)
$ 500 Verrado Comm. Fac. Dist. Number 1 G.O., Ser. 2003,
6.15%, due 7/15/17 $ 537^^
------
CALIFORNIA (1.2%)
1,000 Santa Rosa Rancheria Tachi Yokut Tribe Enterprise Rev., Ser. 2003,
6.13%, due 3/1/13 1,021^^
------
FLORIDA (0.6%)
500 Miami Beach Hlth. Fac. Au. Hosp. Ref. Rev. (Mount Sinai Med. Ctr.
of Florida Proj.), Ser. 2004, 6.25%, due 11/15/09 Ba1 BB+ 527~
------
GEORGIA (1.2%)
1,000 De Kalb Co. Dev. Au. Ref. PCR (General Motors Corp. Proj.),
Ser. 2002, 6.00%, due 3/15/21 Caa1 B- 1,018~
------
GUAM (0.7%)
500 Guam Gov't. Waterworks Au. Wtr. & Wastewater Sys. Rev., Ser. 2005,
5.50%, due 7/1/16 Ba2 534
------
LOUISIANA (2.6%)
1,000 Morehouse Parish Ref. PCR (Int'l. Paper Co. Proj.), Ser. 2001 A,
5.25%, due 11/15/13 Baa3 BBB 1,068~
1,000 Tobacco Settlement Fin. Corp. Tobacco Settlement Asset-Backed
Rev., Ser. 2001 B, 5.50%, due 5/15/30 Baa3 BBB 1,049
------
2,117
------
NEW YORK (140.7%)
3,000 Albany IDA Civic Fac. Rev. (Charitable Leadership Foundation Ctr.
for Med. Science Proj.), Ser. 2002 A, 6.00%, due 7/1/19 Ba2 3,154
500 Cattaraugus Co. IDA (St. Bonaventure Univ. Proj.),
Ser. 2006 A, 5.00%, due 5/1/23 BBB- 515~
1,000 Dutchess Co. IDA Civic Fac. Ref. Rev. (Marist College Proj.),
Ser. 2003 A, 5.15%, due 7/1/17 Baa1 1,058~
2,000 Dutchess Co. IDA Ind. Dev. Rev. (IBM Proj.), Ser. 1999,
5.45%, due 12/1/29 A1 A+ 2,094~
500 Essex Co. IDA Solid Waste Disp. Rev. (Int'l. Paper),
Ser. 2005 A, 5.20%, due 12/1/23 Baa3 BBB 516~
2,000 Long Island Pwr. Au. Elec. Sys. Gen. Rev., Ser. 1998 A, 5.50%,
due 12/1/13 Aaa AAA 2,236
1,265 Lyons Comm. Hlth. Initiatives Corp. Fac. Rev., Ser. 2004,
5.50%, due 9/1/14 A2 1,369
2,000 Metro. Trans. Au. Ref. Rev., Ser. 2002 A, (AMBAC Insured),
5.50%, due 11/15/15 Aaa AAA 2,212
1,000 Monroe Co. IDA Civic Fac. Rev. (Highland Hosp. Rochester),
5.00%, due 8/1/15 Baa1 BBB+ 1,063~
980 Monroe Co. IDA Std. Hsg. Rev. (Collegiate Hsg.
Foundation - Rochester Institute of Technology Proj.), Ser. 1999 A,
5.25%, due 4/1/19 Baa3 1,004~
1,000 Monroe Co. Newpower Corp. Pwr. Fac. Rev., Ser. 2003,
5.10%, due 1/1/16 BBB 1,048
1,000 Monroe Co. Pub. Imp. Ref. G.O., Ser. 1996, 6.00%, due 3/1/13 Baa1 BBB+ 1,107
600 New York City G.O., Sub. Ser. 1993 A-7, (LOC: Morgan
Guaranty Trust), 3.55%, due 11/1/06 VMIG1 A-1+ 600#
1,000 New York City G.O., Ser. 2002 A, 5.75%, due 8/1/16 A1 AA- 1,106
750 New York City G.O., Ser. 2002 C, 5.50%, due 8/1/15 A1 AA- 823
1,410 New York City Hlth. & Hosp. Corp. Rev., Ser. 2002 A,
(FSA Insured), 5.50%, due 2/15/13 Aaa AAA 1,535
4,000 New York City Hsg. Dev. Corp. Multi-Family Hsg. Rev., Ser. 2002 E-2,
5.05%, due 11/1/23 Aa2 AA 4,134
20
NEUBERGER BERMAN OCTOBER 31, 2006
SCHEDULE OF INVESTMENTS NEW YORK INTERMEDIATE MUNICIPAL FUND INC. CONT'D
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$1,000 New York City IDA Civic Fac. Rev. (Lycee Francais de
New York Proj.), Ser. 2002 A, 5.50%, due 6/1/15 A $1,059~
1,030 New York City IDA Civic Fac. Rev. (Lycee Francais de
New York Proj.), Ser. 2002 A, 5.50%, due 6/1/17 A 1,086~
2,920 New York City IDA Civic Fac. Rev. (Packer Collegiate
Institute Proj.), Ser. 2002, (AMBAC Insured), 5.00%, due 6/1/22 Aaa AAA 3,065~
1,000 New York City IDA Ind. Dev. Rev. (Brooklyn Navy Yard
Cogeneration Partners, L.P. Proj.), Ser. 1997, 6.20%, due 10/1/22 Ba1 BBB- 1,084~
500 New York City IDA Ind. Dev. Rev. (Harlem Auto Mall Proj.),
Ser. 2004, 5.13%, due 12/30/23 Caa1 B- 463~
750 New York City IDA Liberty Rev. (7 World Trade Center,
LLC Proj.), Ser. 2005 A, 6.25%, due 3/1/15 801^^
750 New York City IDA Spec. Fac. Rev. (American Airlines, Inc.
J.F.K. Int'l. Arpt. Proj.), Ser. 2005, 7.50%, due 8/1/16 B 861~
2,000 New York City IDA Spec. Fac. Rev. (Term. One Group Assoc.
Proj.), Ser. 2005, 5.50%, due 1/1/19 A3 BBB+ 2,185~
960 New York City Muni. Wtr. Fin. Au. Wtr. & Swr. Sys. Rev.,
Ser. 1992 A, (AMBAC Insured), 5.88%, due 6/15/13 Aaa AAA 1,091
4,000 New York City Muni. Wtr. Fin. Au. Wtr. & Swr. Sys. Rev., Ser.
2002 D, 5.25%, due 6/15/15 Aa2 AA+ 4,324
3,000 New York City Trans. Fin. Au. Ref. Rev., Ser. 2002 B,
5.25%, due 2/1/29 Aa1 AAA 3,183
2,025 New York City Trans. Fin. Au. Ref. Rev., Ser. 2002 C,
(AMBAC Insured), 5.25%, due 8/1/17 Aaa AAA 2,194
800 New York Convention Ctr. Operating Corp. Cert. of Participation
(Yale Bldg. Acquisition Proj.), Ser. 2003, 5.25%, due 6/1/08 816^^
85 New York G.O. Pre-refunded, Ser. 2011 J, 5.00%, due 8/1/11 A1 AA- 88
915 New York G.O. Unrefunded Balance, Ser. 1998 J, 5.00%, due 8/1/11 A1 AA- 943
750 New York Liberty Dev. Corp. Rev. (Nat'l. Sports Museum Proj.),
Ser. 2006 A, 6.13%, due 2/15/19 779^^
2,000 New York St. Dorm. Au. Court Fac. Lease Rev. (New York City Issue),
Ser. 2003 A, 5.50%, due 5/15/17 A2 A+ 2,219
2,000 New York St. Dorm. Au. Insured Rev. (Long Island Jewish Med. Ctr.),
Ser. 1998, (MBIA Insured), 5.00%, due 7/1/18 Aaa AAA 2,057~
1,675 New York St. Dorm. Au. Insured Rev. (Long Island Univ.), Ser. 2003
A, 5.25%, due 9/1/15 Aa3 AA 1,771~
1,600 New York St. Dorm. Au. Insured Rev. (The Culinary Institute of
America), Ser. 1999, (MBIA Insured), 5.38%, due 7/1/15 Aaa AAA 1,701~
3,000 New York St. Dorm. Au. Ref. Rev. (North Gen. Hosp. Proj.),
Ser. 2003, 5.75%, due 2/15/17 AA- 3,322~
1,125 New York St. Dorm. Au. Rev. (City Univ. Sys. Proj.), Ser. 1995
A, 5.63%, due 7/1/16 A1 AA- 1,278
1,010 New York St. Dorm. Au. Rev. (Columbia Univ. Proj.), Ser. 2001 A,
5.25%, due 7/1/16 Aaa AAA 1,095~
2,985 New York St. Dorm. Au. Rev. (Lenox Hill Hosp. Oblig. Group Proj.),
Ser. 2001, 5.75%, due 7/1/14 Ba2 3,163~
2,000 New York St. Dorm. Au. Rev. (Lenox Hill Hosp. Oblig. Group Proj.),
Ser. 2001, 5.75%, due 7/1/16 Ba2 2,110~
2,000 New York St. Dorm. Au. Rev. (Mount Sinai NYU Hlth.), Ser. 2000 C,
5.50%, due 7/1/26 Baa2 BBB 2,034~
1,980 New York St. Dorm. Au. Rev. (New York Med. College Proj.),
Ser. 1998, (MBIA Insured), 5.00%, due 7/1/21 Aaa AAA 2,039~
525 New York St. Dorm. Au. Rev. (New York Methodist Hosp.), Ser. 2004,
5.25%, due 7/1/18 A3 562
See Notes to Schedule of Investments
21
SCHEDULE OF INVESTMENTS NEW YORK INTERMEDIATE MUNICIPAL FUND INC. CONT'D
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$ 500 New York St. Dorm. Au. Rev. (North Shore-Long Island Jewish
Oblig. Group), Ser. 2003, 5.00%, due 5/1/18 A3 $ 523~
2,855 New York St. Dorm. Au. Rev. (Rivington House Hlth. Care Fac.),
Ser. 2002, 5.25%, due 11/1/15 Aa1 3,073~
2,410 New York St. Dorm. Au. Rev. (Rochester Institute of Technology
Proj.), Ser. 2002 A, (AMBAC Insured), 5.25%, due 7/1/19 Aaa 2,589~
3,000 New York St. Dorm. Au. Rev. (SS Joachim & Anne Residence Proj.),
Ser. 2002, 4.60%, due 7/1/16 Aa3 3,045
1,000 New York St. Dorm. Au. Rev. Non. St. Supported Debt
(NYU Hosp. Ctr.), Ser. 2006 A, 5.00%, due 7/1/20 Ba2 BB 1,024
250 New York St. Dorm. Au. Rev. Secured Hosp. Ref. Rev.
(Brookdale Hosp. Med. Ctr.), Ser. 1998 J, 5.20%, due 2/15/16 A1 AA- 258~
3,900 New York St. Dorm. Au. Rev. St. Personal Income Tax Rev.,
Ser. 2003 A, 5.38%, due 3/15/17 Aa3 AAA 4,302
5,000 New York St. Energy Res. & Dev. Au. Fac. Rev. (Consolidated
Edison Co. of New York, Inc. Proj.), Ser. 2001 A, 4.70%, due 6/1/36 A1 A+ 5,003~
1,000 New York St. Env. Fac. Corp. Solid Waste Disp. Rev.
(Waste Management, Inc. Proj.), Ser. 2004 A, 4.45%,
due 7/1/17 Putable 7/1/09 BBB 1,011
2,000 New York St. Mtge. Agcy. Homeowner Mtge. Rev., Ser. 1997-67,
5.70%, due 10/1/17 Aa1 2,049
2,000 New York St. Pwr. Au. Rev., Ser. 2002 A, 5.25%, due 11/15/16 Aa2 AA- 2,179
250 New York St. Urban Dev. Corp. Correctional & Youth Fac. Svc.
Rev., Ser. 2002 C, 4.00%, due 1/1/20 A1 AA- 253
1,325 New York St. Urban Dev. Corp. Proj. Ref. Rev. (Ctr. for Ind.
Innovation), Ser. 1995, 6.25%, due 1/1/09 A1 AA- 1,399
2,000 Niagara Co. IDA Civic Fac. Rev. (Niagara Univ. Proj.), Ser. 2001
A, 5.50%, due 11/1/16 AA 2,144~
2,500 Niagara Co. IDA Solid Waste Disp. Fac. Ref. Rev. (American
Ref.-Fuel Co. of Niagara), Ser. 2001 C, 5.63%, due 11/15/24 Baa3 BB+ 2,686~
3,000 Port Authority of NY & NJ Rev., Ser. 2002, (AMBAC Insured),
5.50%, due 12/15/12 Aaa AAA 3,274
3,000 Triborough Bridge & Tunnel Au. Gen Purp. Ref. Rev., Ser. 2002
B, 5.25%, due 11/15/18 Aa2 AA- 3,253
1,535 Ulster Co. Res. Rec. Agcy. Solid Waste Sys. Ref. Rev., Ser. 2002,
(AMBAC Insured), 5.25%, due 3/1/16 Aaa AAA 1,666
500 United Nations Dev. Corp. Sr. Lien. Ref. Rev., Ser. 2004 A,
5.25%, due 7/1/17 A3 510
1,000 Westchester Co. IDA Continuing Care Retirement Comm. Rev.
(Kendal on Hudson Proj.), Ser. 2003 B, 5.70%, due 1/1/34 1,023~^^
1,000 Yonkers IDA Civic Fac. Rev. (Comm. Dev. Properties-Yonkers, Inc.),
Ser. 2001 A, 6.25%, due 2/1/16 Baa3 1,085~
--------
115,296
--------
OHIO (0.6%)
500 Coshocton Co. Env. Imp. Ref. Rev. (Smurfit-Stone Container
Enterprises, Inc. Proj.), Ser. 2005, 5.13%, due 8/1/13 CCC+ 502~
--------
PENNSYLVANIA (2.1%)
1,590 Cumberland Co. West Shore Area Au. Hosp. Rev. (Holy Spirit Hosp.
of the Sisters of Christian Charity Proj.), Ser. 2001,
5.90%, due 1/1/17 BBB 1,702~
--------
PUERTO RICO (2.5%)
895 Puerto Rico Children's Trust Tobacco Settlement Asset-Backed Rev.,
Ser. 2002, 5.38%, due 5/15/33 Baa3 BBB 940
22
NEUBERGER BERMAN OCTOBER 31, 2006
SCHEDULE OF INVESTMENTS NEW YORK INTERMEDIATE MUNICIPAL FUND INC.
PRINCIPAL AMOUNT SECURITY @ RATING@@ VALUE(+)
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$1,060 Puerto Rico Ind. Tourist Ed. Med. & Env. Ctrl. Fac. Rev.
(Polytechnic Univ. of Puerto Rico Proj.), Ser. 2002 A,
(ACA Insured), 5.25%, due 8/1/16 A $ 1,111~
--------
2,051
--------
TEXAS (2.6%)
800 Brazos River Au. Ref. PCR (TXU Energy Co. LLC Proj.), Ser. 2003 A,
6.75%, due 4/1/38 Putable 4/1/13 Baa2 BBB- 904~
750 Brazos River Au. Ref. Rev. (Reliant Energy, Inc. Proj.),
Ser. 1999 B, 7.75%, due 12/1/18 Ba1 BBB- 805~
400 Dallas-Fort Worth Int'l. Arpt. Fac. Imp. Corp. Rev., Ser. 2004 A-1,
6.15%, due 1/1/16 Ba2 405~
--------
2,114
--------
VIRGIN ISLANDS (1.3%)
250 Virgin Islands Pub. Fin. Au. Refinery Fac. Rev. (HOVENSA Refinery),
Ser. 2003, 6.13%, due 7/1/22 Baa3 BBB 276
750 Virgin Islands Pub. Fin. Au. Rev. (Virgin Islands Matching Fund
Loan Notes), Ser. 1998 E, 6.00%, due 10/1/22 786^^
--------
1,062
--------
TOTAL INVESTMENTS (156.8%) (COST $125,079) 128,481##
Cash, receivables and other assets, less liabilities (2.1%) 1,708
Liquidation Value of Auction Market Preferred Shares [(58.9%)] (48,250)
--------
TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS (100.0%) $ 81,939
--------
See Notes to Schedule of Investments
23
NOTES TO SCHEDULE OF INVESTMENTS
(+) Investments in securities by Neuberger Berman California Intermediate
Municipal Fund Inc. ("California"), Neuberger Berman Intermediate
Municipal Fund Inc. ("Intermediate"), and Neuberger Berman New York
Intermediate Municipal Fund Inc. ("New York") (individually a "Fund",
and collectively, the "Funds") 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, bid
prices are obtained from principal market makers in those securities
or, if quotations are not readily available, by methods each Fund's
Board of Directors has approved on the belief that they reflect 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.
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 October 31, 2006, selected Fund information on a U.S. federal
income tax basis was as follows:
GROSS GROSS NET
(000'S OMITTED) UNREALIZED UNREALIZED UNREALIZED
NEUBERGER BERMAN COST APPRECIATION DEPRECIATION APPRECIATION
CALIFORNIA $153,312 $ 5,589 $ -- $ 5,589
INTERMEDIATE 468,543 16,264 166 16,098
NEW YORK 125,079 3,583 181 3,402
@ At time of investment, municipal securities purchased by the Funds are
within the four highest rating categories (with respect to at least
80% of total assets) assigned by a nationally recognized statistical
rating organization ("NRSRO") such as Moody's Investors Service, Inc.,
Standard & Poor's, or Fitch Investors Services, Inc. or, where not
rated, are determined by the Funds' investment manager to be of
comparable quality. Approximately 81%, 69%, and 58% of the municipal
securities held by California, Intermediate, and New York,
respectively, have credit enhancement features backing them, which the
Funds may rely on, such as letters of credit, insurance, or
guarantees. Without these credit enhancement features the securities
may or may not meet the quality standards of the Funds. Pre-refunded
bonds are supported by securities in escrow issued or guaranteed by
the U.S. Government, its agencies, or instrumentalities. The amount
escrowed is sufficient to pay the periodic interest due and the
principal of these bonds. Putable bonds give the Funds the right to
sell back the issue on the date specified.
~ Security is guaranteed by the corporate or non-profit obligor.
^ Restricted security subject to restrictions on resale under federal
securities laws. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers under
Rule 144A and have been deemed by the investment manager to be liquid.
At October 31, 2006, these securities amounted to $4,482,000 or 1.5%
of net assets applicable to common shareholders for Intermediate.
^^ Not rated by a NRSRO.
* All or a portion of this security was purchased on a when-issued
basis. At October 31, 2006, these securities amounted to $2,966,000 or
.96% of net assets for Intermediate.
** All or a portion of this security is segregated as collateral for
when-issued purchase commitments.
# Floating rate securities are securities whose yields vary with a
designated market index or market rate. These securities are shown at
their current rates as of October 31, 2006.
@@ Credit ratings are unaudited.
See Notes to Financial Statements
24
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25
NEUBERGER BERMAN OCTOBER 31, 2006
STATEMENTS OF ASSETS AND LIABILITIES
CALIFORNIA INTERMEDIATE NEW YORK
NEUBERGER BERMAN INTERMEDIATE MUNICIPAL CLOSED-END FUNDS INTERMEDIATE MUNICIPAL INTERMEDIATE
(000'S OMITTED EXCEPT PER SHARE AMOUNTS) MUNICIPAL FUND FUND MUNICIPAL FUND
ASSETS
INVESTMENTS IN SECURITIES, AT MARKET VALUE(*) (NOTE A)--SEE
SCHEDULE OF INVESTMENTS $ 158,901 $ 484,641 $ 128,481
Cash 64 53 67
----------------------------------------------------------------------------------------------------------------------
Interest receivable 2,509 7,986 2,085
Receivable from transfer agent -- -- 56
----------------------------------------------------------------------------------------------------------------------
Receivable for securities sold 5 117 5
----------------------------------------------------------------------------------------------------------------------
Prepaid expenses and other assets 3 10 3
======================================================================================================================
TOTAL ASSETS 161,482 492,807 130,697
======================================================================================================================
LIABILITIES
Distributions payable--preferred shares 88 231 63
Distributions payable--common shares 403 1,276 344
----------------------------------------------------------------------------------------------------------------------
Payable for securities purchased -- 3,000 --
Payable to administrator (Note B) 41 124 33
----------------------------------------------------------------------------------------------------------------------
Accrued expenses and other payables 67 95 68
======================================================================================================================
TOTAL LIABILITIES 599 4,726 508
======================================================================================================================
AUCTION MARKET PREFERRED SHARES SERIES A & B AT LIQUIDATION VALUE
3,000, 8,000 and 3,000 shares authorized; and 2,360,
7,176 and 1,930 shares issued and outstanding for California,
Intermediate and New York, respectively; $.0001 par value;
$25,000 liquidation value per share (Note A) 59,000 179,400 48,250
======================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS AT VALUE $ 101,883 $ 308,681 $ 81,939
======================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS CONSIST OF:
Paid-in capital--common shares $ 96,347 $ 293,853 $ 79,119
Undistributed net investment income (loss) 246 -- --
----------------------------------------------------------------------------------------------------------------------
Distributions in excess of net investment income -- (373) (33)
Accumulated net realized gains (losses) on investments (299) (897) (549)
----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) in value of investments 5,589 16,098 3,402
======================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS AT VALUE $ 101,883 $ 308,681 $ 81,939
======================================================================================================================
COMMON SHARES OUTSTANDING ($.0001 par value; 999,997,000,
999,992,000 and 999,997,000 shares authorized for
California, Intermediate and New York, respectively) 6,792 20,705 5,578
======================================================================================================================
NET ASSET VALUE PER COMMON SHARE OUTSTANDING $ 15.00 $ 14.91 $ 14.69
======================================================================================================================
(*)COST OF INVESTMENTS: $ 153,312 $ 468,543 $ 125,079
======================================================================================================================
See Notes to Financial Statements
26
NEUBERGER BERMAN FOR THE YEAR ENDED OCTOBER 31, 2006
STATEMENTS OF OPERATIONS
CALIFORNIA INTERMEDIATE NEW YORK
NEUBERGER BERMAN INTERMEDIATE MUNICIPAL CLOSED-END FUNDS INTERMEDIATE MUNICIPAL INTERMEDIATE
(000'S OMITTED) MUNICIPAL FUND FUND MUNICIPAL FUND
INVESTMENT INCOME
INCOME (NOTE A):
Interest income $7,294 $22,472 $6,116
========================================================================================================================
EXPENSES:
Investment management fees (Notes A & B) 398 1,209 322
Administration fees (Note B) 477 1,450 387
------------------------------------------------------------------------------------------------------------------------
Stock transfer agent fees 35 35 35
Auction agent fees (Note B) 150 455 123
------------------------------------------------------------------------------------------------------------------------
Audit fees 45 45 45
Basic maintenance expense (Note B) 25 25 25
------------------------------------------------------------------------------------------------------------------------
Custodian fees (Note B) 86 156 75
Insurance expense 7 23 6
------------------------------------------------------------------------------------------------------------------------
Legal fees 23 48 20
Shareholder reports 21 59 20
------------------------------------------------------------------------------------------------------------------------
Stock exchange listing fees 3 7 2
Directors' fees and expenses 31 31 31
------------------------------------------------------------------------------------------------------------------------
Miscellaneous 25 31 25
========================================================================================================================
Total expenses 1,326 3,574 1,116
Investment management fees waived (Note B) (398) (1,209) (322)
Expenses reduced by custodian fee expense offset arrangement (Note B) (2) (5) (3)
========================================================================================================================
Total net expenses 926 2,360 791
========================================================================================================================
Net investment income 6,368 20,112 5,325
========================================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE A)
Net realized gain (loss) on:
Sales of investment securities of unaffiliated issuers 49 247 47
------------------------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) in value of:
Unaffiliated investment securities 2,518 5,912 1,559
========================================================================================================================
Net gain (loss) on investments 2,567 6,159 1,606
========================================================================================================================
Distributions to Preferred Shareholders (1,867) (5,952) (1,533)
========================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS
RESULTING FROM OPERATIONS $7,068 $20,319 $5,398
========================================================================================================================
See Notes to Financial Statements
27
STATEMENTS OF CHANGES IN NET ASSETS
CALIFORNIA INTERMEDIATE
MUNICIPAL FUND
---------------------------
YEAR YEAR
ENDED ENDED
NEUBERGER BERMAN INTERMEDIATE MUNICIPAL CLOSED-END FUNDS OCTOBER 31, OCTOBER 31,
(000'S OMITTED) 2006 2005
INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
FROM OPERATIONS:
Net investment income (loss) $ 6,368 $ 6,201
Net realized gain (loss) on investments 49 (4)
---------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of investments 2,518 (2,787)
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM (NOTE A):
Net investment income (1,867) (929)
===================================================================================================
Net increase (decrease) in net assets applicable to common
shareholders resulting from operations 7,068 2,481
===================================================================================================
DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM (NOTE A):
Net investment income (4,882) (5,094)
===================================================================================================
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from reinvestment of dividends -- --
===================================================================================================
Total net proceeds from capital share transactions -- --
===================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 2,186 (2,613)
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of year 99,697 102,310
===================================================================================================
End of year $101,883 $ 99,697
===================================================================================================
Undistributed net investment income (loss) at end of year $ 246 $ 627
===================================================================================================
Distributions in excess of net investment income at end of year $ -- $ --
===================================================================================================
See Notes to Financial Statements
28
NEUBERGER BERMAN OCTOBER 31, 2006
NEW YORK INTERMEDIATE
INTERMEDIATE MUNICIPAL FUND MUNICIPAL FUND
--------------------------- -------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
NEUBERGER BERMAN INTERMEDIATE MUNICIPAL CLOSED-END FUNDS OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
(000'S OMITTED) 2006 2005 2006 2005
INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
FROM OPERATIONS:
Net investment income (loss) $ 20,112 $ 19,700 $ 5,325 $ 5,208
Net realized gain (loss) on investments 247 (59) 47 (19)
---------------------------------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of investments 5,912 (8,953) 1,559 (2,496)
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM (NOTE A):
Net investment income (5,952) (3,174) (1,533) (763)
=================================================================================================================================
Net increase (decrease) in net assets applicable to common
shareholders resulting from operations 20,319 7,514 5,398 1,930
=================================================================================================================================
DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM (NOTE A):
Net investment income (15,502) (16,461) (4,167) (4,348)
=================================================================================================================================
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from reinvestment of dividends -- -- 56 --
=================================================================================================================================
Total net proceeds from capital share transactions -- -- 56 --
=================================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 4,817 (8,947) 1,287 (2,418)
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of year 303,864 312,811 80,652 83,070
=================================================================================================================================
End of year $308,681 $303,864 $81,939 $80,652
=================================================================================================================================
Undistributed net investment income (loss) at end of year $ -- $ 969 $ -- $ 342
=================================================================================================================================
Distributions in excess of net investment income at end of year $ (373) $ -- $ (33) $ --
=================================================================================================================================
29
NOTES TO FINANCIAL STATEMENTS INTERMEDIATE MUNICIPAL CLOSED-END FUNDS
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1 GENERAL: Neuberger Berman California Intermediate Municipal Fund Inc.
("California"), Neuberger Berman Intermediate Municipal Fund Inc.
("Intermediate"), and Neuberger Berman New York Intermediate Municipal Fund
Inc. ("New York") (individually a "Fund" and, collectively, the "Funds")
were organized as Maryland corporations on July 29, 2002. California and
New York are registered as non-diversified, closed-end management
investment companies and Intermediate is registered as a diversified,
closed-end management investment company under the Investment Company Act
of 1940, as amended. Each Fund's Board of Directors may classify or
re-classify any unissued shares of capital stock into one or more classes
of preferred stock without the approval of shareholders.
The assets of each Fund belong only to that Fund, and the liabilities of
each Fund are borne solely by that Fund and no other.
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles 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 Funds' Schedule of Investments.
3 SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on trade date for financial reporting purposes. Interest income,
including accretion of discount (adjusted for original issue discount,
where applicable) and amortization of premium, where applicable, is
recorded on the accrual basis. Realized gains and losses from securities
transactions are recorded on the basis of identified cost and stated in the
Statements of Operations.
4 INCOME TAX INFORMATION: Each Fund is treated as a separate entity for U.S.
federal income tax purposes. It is the policy of each Fund to continue to
qualify as a regulated investment company by complying with the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to distribute substantially all of its
earnings to its shareholders. Therefore, no federal income or excise tax
provision is required.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations, which may differ from U.S.
generally accepted accounting principles. These differences are primarily
due to differing treatments of income and gains on various investment
securities held by each Fund, timing differences and differing
characterization of distributions made by each Fund as a whole.
As determined on October 31, 2006, there were no permanent differences
resulting from different book and tax accounting reclassified at fiscal
year-end.
30
NEUBERGER BERMAN OCTOBER 31, 2006
The tax character of distributions paid during the years ended October 31,
2006 and October 31, 2005 were as follows:
DISTRIBUTIONS PAID FROM:
TAX-EXEMPT INCOME ORDINARY INCOME TOTAL
2006 2005 2006 2005 2006 2005
CALIFORNIA $ 6,741,577 $ 6,020,445 $ 6,567 $ 2,558 $ 6,748,144 $ 6,023,003
INTERMEDIATE 21,418,996 19,596,581 35,155 37,644 21,454,151 19,634,225
NEW YORK 5,696,502 5,108,368 4,389 2,708 5,700,891 5,111,076
As of October 31, 2006, the components of distributable earnings
(accumulated losses) on a U.S federal income tax basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED UNDISTRIBUTED UNREALIZED LOSS
TAX-EXEMPT ORDINARY LONG-TERM APPRECIATION CARRYFORWARDS
INCOME INCOME GAIN (DEPRECIATION) AND DEFERRALS TOTAL
CALIFORNIA $ 736,945 $-- $-- $ 5,589,041 $(299,384) $ 6,026,602
INTERMEDIATE 1,133,845 -- -- 16,096,935 (897,147) 16,333,633
NEW YORK 373,890 -- -- 3,402,826 (548,941) 3,227,775
The differences between book basis and tax basis distributable earnings is
attributable primarily to timing differences of distribution payments.
To the extent each Fund's net realized capital gains, if any, can be offset
by capital loss carryforwards, it is the policy of each Fund not to
distribute such gains. As determined at October 31, 2006, the Funds had
unused capital loss carryforwards available for federal income tax purposes
to offset net realized capital gains, if any, as follows:
EXPIRING IN: EXPIRING IN: EXPIRING IN:
2011 2012 2013
CALIFORNIA $ 21,173 $273,734 $ 4,477
INTERMEDIATE 509,968 328,363 58,816
NEW YORK 373,467 156,636 18,838
5 DISTRIBUTIONS TO SHAREHOLDERS: Each Fund earns income, net of expenses,
daily on its investments. It is the policy of each Fund to declare
quarterly and pay monthly distributions. Distributions from net realized
capital gains, if any, are normally distributed in December. Distributions
to common shareholders are recorded on the ex-date. Distributions to
preferred shareholders are accrued and determined as described in Note A-7.
Subsequent to October 31, 2006, each Fund declared three monthly
distributions to common shareholders payable December 15, 2006, January 16,
2007 and February 15, 2007 to shareholders of record on November 30, 2006,
December 29, 2006 and January 31, 2007, with ex-dates of November 28, 2006,
December 27, 2006 and January 29, 2007, as follows:
DISTRIBUTION PER SHARE
CALIFORNIA $0.058565
INTERMEDIATE 0.055894
NEW YORK 0.056840
31
NOTES TO FINANCIAL STATEMENTS INTERMEDIATE MUNICIPAL CLOSED-END FUNDS CONT'D
6 EXPENSE ALLOCATION: Certain expenses are applicable to multiple funds.
Expenses directly attributable to a Fund are charged to that Fund. Expenses
borne by the complex of related investment companies, which includes
open-end and closed-end investment companies for which Management serves as
investment manager, that are not directly attributed to a Fund 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.
7 REDEEMABLE PREFERRED SHARES: On October 21, 2002, the Funds re-classified
unissued shares of capital stock into several series of Auction Market
Preferred Shares ("AMPS"), as follows:
SERIES A SHARES SERIES B SHARES
CALIFORNIA 1,500 1,500
INTERMEDIATE 4,000 4,000
NEW YORK 1,500 1,500
On December 13, 2002, the Funds issued several series of AMPS, as follows:
SERIES A SHARES SERIES B SHARES
CALIFORNIA 1,180 1,180
INTERMEDIATE 3,588 3,588
NEW YORK 965 965
All shares of each series of AMPS have a liquidation preference of $25,000
per share plus any accumulated unpaid distributions, whether or not earned
or declared by the Fund, but excluding interest thereon ("Liquidation
Value"). Distributions to AMPS shareholders, which are cumulative, are
accrued daily. It is the policy of each Fund to pay distributions every 7
days for each Fund's AMPS Series A and every 28 days for each Fund's AMPS
Series B, unless in a special rate period.
In the absence of a special rate period, distribution rates are reset every
7 days for each Fund's AMPS Series A, based on the results of an auction.
For the year ended October 31, 2006, distribution rates ranged from:
DISTRIBUTION RATE
CALIFORNIA 2.55% - 3.70%
INTERMEDIATE 2.41% - 4.00%
NEW YORK 2.45% - 3.60%
In the absence of a special rate period, distribution rates are reset every
28 days for each Fund's AMPS Series B, based on the results of an auction.
For the year ended October 31, 2006, distribution rates ranged from:
DISTRIBUTION RATE
CALIFORNIA 2.65% - 3.60%
INTERMEDIATE 2.75% - 3.85%
NEW YORK 2.54% - 3.75%
32
NEUBERGER BERMAN OCTOBER 31, 2006
The Funds declared distributions to AMPS shareholders for the period
November 1, 2006 to November 30, 2006, for each series of the AMPS as
follows:
SERIES A SHARES SERIES B SHARES
CALIFORNIA $ 72,413 $ 82,404
INTERMEDIATE 258,346 261,113
NEW YORK 66,302 64,842
The Funds may redeem shares of each series of AMPS, in whole or in part, on
the second business day preceding any distribution payment date at
Liquidation Value.
The Funds are also subject to certain restrictions relating to the AMPS.
Failure to comply with these restrictions could preclude the Funds from
declaring any distributions to common shareholders or repurchasing common
shares and/or could trigger the mandatory redemption of AMPS at Liquidation
Value.
The holders of AMPS are entitled to one vote per share and will vote with
holders of common shares as a single class, except that the AMPS will vote
separately as a class on certain matters, as required by law or a Fund's
charter. The holders of a Fund's AMPS, voting as a separate class, are
entitled at all times to elect two Directors of the Fund, and to elect a
majority of the Directors of a Fund if the Fund fails to pay distributions
on AMPS for two consecutive years.
8 CONCENTRATION OF RISK: The ability of the issuers of the debt securities
held by the Funds to meet their obligations may be affected by economic
developments, including those particular to a specific industry or region.
California and New York normally invest substantially all of their assets
in municipal bonds of issuers located in the state of California and the
state of New York, respectively. The value of the Funds securities are more
susceptible to adverse economic, political, regulatory or other factors
affecting the issuers of such municipal bonds than a fund that does not
limit its investments to such issuers.
9 INDEMNIFICATIONS: Like many other companies, the Funds' organizational
documents provide that their officers and directors are indemnified against
certain liabilities arising out of the performance of their duties to the
Funds. In addition, both in some of their principal service contracts and
in the normal course of their business, the Funds enter into contracts that
provide indemnifications to other parties for certain types of losses or
liabilities. Each Fund's maximum exposure under these arrangements is
unknown as this could involve future claims against each Fund.
NOTE B--MANAGEMENT FEES, ADMINISTRATION FEES, AND OTHER TRANSACTIONS WITH
AFFILIATES:
Each Fund retains Management as its investment manager under a Management
Agreement. For such investment management services, each Fund pays
Management a fee at the annual rate of 0.25% of its average daily Managed
Assets. Managed Assets equal the total assets of the Fund, less liabilities
other than the aggregate indebtedness entered into for purposes of
leverage. For purposes of calculating Managed Assets, the Liquidation Value
of any AMPS outstanding is not considered a liability.
33
NOTES TO FINANCIAL STATEMENTS INTERMEDIATE MUNICIPAL CLOSED-END FUNDS CONT'D
Management has contractually agreed to waive a portion of the management
fees it is entitled to receive from each Fund at the following annual
rates:
YEAR ENDED % OF AVERAGE
OCTOBER 31, DAILY MANAGED ASSETS
----------------------------------
2006 - 2007 0.25
2008 0.20
2009 0.15
2010 0.10
2011 0.05
Management has not agreed to waive any portion of its fees beyond October
31, 2011.
For the year ended October 31, 2006, such waived fees amounted to $397,685,
$1,208,640, and $322,194 for California, Intermediate, and New York,
respectively.
Each Fund retains Management as its administrator under an Administration
Agreement. Each Fund pays Management an administration fee at the annual
rate of 0.30% of its average daily Managed Assets under this agreement.
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.
Management and Neuberger Berman, LLC ("Neuberger"), a member firm of the
New York Stock Exchange and sub-adviser to each Fund, are wholly-owned
subsidiaries of Lehman Brothers Holdings Inc., a publicly-owned holding
company. Neuberger is retained by Management to furnish it with investment
recommendations and research information without added cost to each Fund.
Several individuals who are officers and/or Directors of each Fund are also
employees of Neuberger and/or Management.
Each Fund has an expense offset arrangement in connection with its
custodian contract. For the year ended October 31, 2006, the impact of this
arrangement was a reduction of expenses of $2,106, $4,763, and $2,534 for
California, Intermediate, and New York, respectively.
In connection with the settlement of each AMPS auction, each Fund pays,
through the auction agent, a service fee to each participating
broker-dealer based upon the aggregate liquidation preference of the AMPS
held by the broker-dealer's customers. For any auction preceding a rate
period of less than one year, the service fee is paid at the annual rate of
1/4 of 1%; for any auction preceding a rate period of one year or more, the
service fee is paid at a rate agreed to by each Fund and the broker-dealer.
In order to satisfy rating agencies' requirements, each Fund is required to
provide each rating agency a report on a monthly basis verifying that each
Fund is maintaining eligible assets having a discounted value equal to or
greater than the Preferred Shares Basic Maintenance Amount, which is a
minimum level set by each rating agency as one of the conditions to
maintain the AAA/Aaa rating on the AMPS. "Discounted value" refers to the
fact that the rating agencies require each Fund, in performing this
calculation, to discount portfolio securities below their face value, at
rates determined by the rating agencies. Each Fund pays a fee to State
Street for the preparation of this report which is reflected in the
Statements of Operations under the caption "Basic maintenance expense."
34
NEUBERGER BERMAN OCTOBER 31, 2006
NOTE C--SECURITIES TRANSACTIONS:
For the year ended October 31, 2006, there were purchase and sale
transactions (excluding short-term securities) as follows:
(000'S OMITTED) PURCHASES SALES
CALIFORNIA $ 4,749,582 $ 5,238,114
INTERMEDIATE 29,916,671 28,406,432
NEW YORK 7,152,838 6,908,150
NOTE D--CAPITAL:
At October 31, 2006, the common shares outstanding and the common shares of
each Fund owned by Neuberger were as follows:
COMMON SHARES COMMON SHARES
OUTSTANDING OWNED BY NEUBERGER
CALIFORNIA 6,791,981 6,981
INTERMEDIATE 20,705,124 6,981
NEW YORK 5,578,402 6,981
Transactions in common shares for the years ended October 31, 2006 and
October 31, 2005, were as follows:
REINVESTMENT OF NET INCREASE IN
DIVIDENDS AND COMMON SHARES
DISTRIBUTIONS OUTSTANDING
2006 2005 2006 2005
CALIFORNIA -- -- -- --
INTERMEDIATE -- -- -- --
NEW YORK 3,852 -- 3,852 --
NOTE E--RECENT ACCOUNTING PRONOUNCEMENTS:
On July 13, 2006, the Financial Accounting Standards Board ("FASB")
released FASB Interpretation No. 48 "Accounting for Uncertainty in Income
Taxes" ("FIN 48"). FIN 48 provides guidance for how uncertain tax positions
should be recognized, measured, presented and disclosed in the financial
statements. FIN 48 clarifies the accounting for income taxes, by
prescribing a minimum recognition threshold a tax position is required to
meet before being recognized in the financial statements. FIN 48 requires
that a "more-likely-than-not" threshold be met before the benefit of a tax
position may be recognized in the financial statements and prescribes how
such benefit should be measured. Adoption of FIN 48 is required for fiscal
years beginning after December 15, 2006 and is to be applied to all open
tax years as of the effective date. At this time, Management is evaluating
the implications of FIN 48 and its impact in the financial statements has
not yet been determined.
In September 2006, FASB issued FASB Statement No. 157, "Fair Value
Measurement" ("SFAS 157"), which defines fair value, establishes a
framework for measuring fair value, and expands disclosures about fair
value measurements. SFAS 157 is effective for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years.
Management believes the adoption of SFAS 157 will not have a material
impact on the financial positions or results of operations.
35
FINANCIAL HIGHLIGHTS CALIFORNIA INTERMEDIATE MUNICIPAL FUND
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements.
PERIOD FROM
SEPTEMBER 27, 2002^
YEAR ENDED OCTOBER 31, TO OCTOBER 31,
------------------------------------- -------------------
2006 2005 2004 2003 2002
COMMON SHARE NET ASSET VALUE, BEGINNING OF PERIOD $ 14.68 $ 15.06 $ 14.36 $ 14.31 $14.32
------- ------- ------- ------- ------
INCOME FROM INVESTMENT OPERATIONS APPLICABLE TO
COMMON SHAREHOLDERS:
NET INVESTMENT INCOME (LOSS)~ .94 .91 .91 .85 .02
NET GAINS OR LOSSES ON SECURITIES
(BOTH REALIZED AND UNREALIZED) .37 (.40) .67 .14 --
COMMON SHARE EQUIVALENT OF DISTRIBUTIONS TO
PREFERRED SHAREHOLDERS FROM:
NET INVESTMENT INCOME~ (.27) (.14) (.13) (.08) --
------- ------- ------- ------- ------
TOTAL FROM INVESTMENT OPERATIONS APPLICABLE TO
COMMON SHAREHOLDERS 1.04 .37 1.45 .91 .02
------- ------- ------- ------- ------
LESS DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
NET INVESTMENT INCOME (.72) (.75) (.75) (.75) --
------- ------- ------- ------- ------
LESS CAPITAL CHARGES FROM:
ISSUANCE OF COMMON SHARES -- -- -- -- (.03)
ISSUANCE OF PREFERRED SHARES -- -- -- (.11) --
------- ------- ------- ------- ------
TOTAL CAPITAL CHARGES -- -- -- (.11) (.03)
------- ------- ------- ------- ------
COMMON SHARE NET ASSET VALUE, END OF PERIOD $ 15.00 $ 14.68 $ 15.06 $ 14.36 $14.31
------- ------- ------- ------- ------
COMMON SHARE MARKET VALUE, END OF PERIOD $ 14.65 $ 13.75 $ 13.47 $ 13.00 $15.00
------- ------- ------- ------- ------
TOTAL RETURN, COMMON SHARE NET ASSET VALUE+ +7.51% +2.96% +10.97% +6.02% -0.10%**
TOTAL RETURN, COMMON SHARE MARKET VALUE+ +12.10% +7.82% +9.63% -8.44% +0.00%**
RATIOS/SUPPLEMENTAL DATA++
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS,
END OF PERIOD (IN MILLIONS) $ 101.9 $ 99.7 $ 102.3 $ 97.5 $ 94.5
PREFERRED SHARES, AT LIQUIDATION VALUE
($25,000 PER SHARE LIQUIDATION PREFERENCE)
(IN MILLIONS) $ 59.0 $ 59.0 $ 59.0 $ 59.0 $ --
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS
APPLICABLE TO COMMON SHAREHOLDERS# .93% .96% .96% .88% .84%*
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS
APPLICABLE TO COMMON SHAREHOLDERS@@ .93% .96% .96% .88% .83%*
RATIO OF NET INVESTMENT INCOME (LOSS) EXCLUDING
PREFERRED SHARE DISTRIBUTIONS TO AVERAGE NET
ASSETS APPLICABLE TO COMMON SHAREHOLDERS 6.36% 6.08% 6.24% 5.88% 1.10%*
RATIO OF PREFERRED SHARE DISTRIBUTIONS TO AVERAGE
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 1.86% .91% .86% .56% --%
RATIO OF NET INVESTMENT INCOME (LOSS) INCLUDING
PREFERRED SHARE DISTRIBUTIONS TO AVERAGE NET
ASSETS APPLICABLE TO COMMON SHAREHOLDERS 4.50% 5.17% 5.38% 5.32% 1.10%*
PORTFOLIO TURNOVER RATE 3% 3% 3% 9% 0%**
ASSET COVERAGE PER PREFERRED SHARE, END OF PERIOD@ $68,208 $67,273 $68,383 $66,332 $ --
See Notes to Financial Highlights
36
NEUBERGER BERMAN OCTOBER 31, 2006
FINANCIAL HIGHLIGHTS INTERMEDIATE MUNICIPAL FUND
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements.
PERIOD FROM
SEPTEMBER 27, 2002^
YEAR ENDED OCTOBER 31, TO OCTOBER 31,
------------------------------------- -------------------
2006 2005 2004 2003 2002
COMMON SHARE NET ASSET VALUE, BEGINNING OF PERIOD $ 14.68 $ 15.11 $ 14.44 $ 14.30 $14.32
------- ------- ------- ------- ------
INCOME FROM INVESTMENT OPERATIONS APPLICABLE TO
COMMON SHAREHOLDERS:
NET INVESTMENT INCOME (LOSS)~ .97 .95 .94 .88 .01
NET GAINS OR LOSSES ON SECURITIES
(BOTH REALIZED AND UNREALIZED) .30 (.43) .65 .25 --
COMMON SHARE EQUIVALENT OF DISTRIBUTIONS TO
PREFERRED SHAREHOLDERS FROM:
NET INVESTMENT INCOME~ (.29) (.15) (.12) (.09) --
------- ------- ------- ------- ------
TOTAL FROM INVESTMENT OPERATIONS APPLICABLE TO
COMMON SHAREHOLDERS .98 .37 1.47 1.04 .01
------- ------- ------- ------- ------
LESS DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
NET INVESTMENT INCOME (.75) (.80) (.80) (.80) --
------- ------- ------- ------- ------
LESS CAPITAL CHARGES FROM:
ISSUANCE OF COMMON SHARES -- -- -- -- (.03)
ISSUANCE OF PREFERRED SHARES -- -- -- (.10) --
------- ------- ------- ------- ------
TOTAL CAPITAL CHARGES -- -- -- (.10) (.03)
------- ------- ------- ------- ------
COMMON SHARE NET ASSET VALUE, END OF PERIOD $ 14.91 $ 14.68 $ 15.11 $ 14.44 $14.30
------- ------- ------- ------- ------
COMMON SHARE MARKET VALUE, END OF PERIOD $ 14.22 $ 13.62 $ 13.70 $ 13.33 $15.00
------- ------- ------- ------- ------
TOTAL RETURN, COMMON SHARE NET ASSET VALUE+ +7.22% +2.93% +10.91% +6.88% -0.17%**
TOTAL RETURN, COMMON SHARE MARKET VALUE+ +10.22% +5.32% +8.94% -5.94% +0.00%**
RATIOS/SUPPLEMENTAL DATA++
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS,
END OF PERIOD (IN MILLIONS) $ 308.7 $ 303.9 $ 312.8 $ 299.1 $293.3
PREFERRED SHARES, AT LIQUIDATION VALUE
($25,000 PER SHARE LIQUIDATION PREFERENCE)
(IN MILLIONS) $ 179.4 $ 179.4 $ 179.4 $ 179.4 $ --
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS
APPLICABLE TO COMMON SHAREHOLDERS# .78% .80% .82% .74% .51%*
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS
APPLICABLE TO COMMON SHAREHOLDERS@@ .78% .80% .82% .74% .51%*
RATIO OF NET INVESTMENT INCOME (LOSS) EXCLUDING
PREFERRED SHARE DISTRIBUTIONS TO AVERAGE NET
ASSETS APPLICABLE TO COMMON SHAREHOLDERS 6.61% 6.33% 6.40% 6.08% 1.62%*
RATIO OF PREFERRED SHARE DISTRIBUTIONS TO AVERAGE
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 1.95% 1.02% .85% .59% --%
RATIO OF NET INVESTMENT INCOME (LOSS) INCLUDING
PREFERRED SHARE DISTRIBUTIONS TO AVERAGE NET
ASSETS APPLICABLE TO COMMON SHAREHOLDERS 4.66% 5.31% 5.55% 5.49% 1.62%*
PORTFOLIO TURNOVER RATE 6% 2% 3% 10% 0%**
ASSET COVERAGE PER PREFERRED SHARE, END OF PERIOD@ $68,048 $67,368 $68,622 $66,694 $ --
See Notes to Financial Highlights
37
FINANCIAL HIGHLIGHTS NEW YORK INTERMEDIATE MUNICIPAL FUND
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements.
PERIOD FROM
SEPTEMBER 27, 2002^
YEAR ENDED OCTOBER 31, TO OCTOBER 31,
---------------------------------- -------------------
2006 2005 2004 2003 2002
COMMON SHARE NET ASSET VALUE, BEGINNING OF PERIOD $ 14.47 $ 14.90 $ 14.40 $ 14.32 $14.32
------- ------- ------- ------- ------
INCOME FROM INVESTMENT OPERATIONS APPLICABLE
TO COMMON SHAREHOLDERS:
NET INVESTMENT INCOME (LOSS)~ .96 .93 .93 .86 .03
NET GAINS OR LOSSES ON SECURITIES
(BOTH REALIZED AND UNREALIZED) .29 (.44) .48 .19 --
COMMON SHARE EQUIVALENT OF DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM:
NET INVESTMENT INCOME~ (.28) (.14) (.13) (.08) --
------- ------- ------- ------- ------
TOTAL FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS .97 .35 1.28 .97 .03
------- ------- ------- ------- ------
LESS DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
NET INVESTMENT INCOME (.75) (.78) (.78) (.78) --
------- ------- ------- ------- ------
LESS CAPITAL CHARGES FROM:
ISSUANCE OF COMMON SHARES -- -- -- -- (.03)
ISSUANCE OF PREFERRED SHARES -- -- -- (.11) --
------- ------- ------- ------- ------
TOTAL CAPITAL CHARGES -- -- -- (.11) (.03)
------- ------- ------- ------- ------
COMMON SHARE NET ASSET VALUE, END OF PERIOD $ 14.69 $ 14.47 $ 14.90 $ 14.40 $14.32
------- ------- ------- ------- ------
COMMON SHARE MARKET VALUE, END OF PERIOD $ 14.60 $ 13.54 $ 13.32 $ 13.27 $15.00
------- ------- ------- ------- ------
TOTAL RETURN, COMMON SHARE NET ASSET VALUE+ +7.05% +2.87% +9.67% +6.36% -0.03%**
TOTAL RETURN, COMMON SHARE MARKET VALUE+ +13.70% +7.68% +6.39% -6.43% +0.00%**
RATIOS/SUPPLEMENTAL DATA++
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS, END OF PERIOD (IN MILLIONS) $ 81.9 $ 80.7 $ 83.1 $ 80.3 $ 76.7
PREFERRED SHARES, AT LIQUIDATION VALUE ($25,000 PER SHARE LIQUIDATION
PREFERENCE) (IN MILLIONS) $ 48.3 $ 48.3 $ 48.3 $ 48.3 $ --
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO COMMON
SHAREHOLDERS# .98% 1.02% 1.00% .92% .94%*
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO COMMON
SHAREHOLDERS@@ .98% 1.01% .99% .92% .93%*
RATIO OF NET INVESTMENT INCOME (LOSS) EXCLUDING PREFERRED SHARE
DISTRIBUTIONS TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 6.60% 6.30% 6.37% 6.02% 1.22%*
RATIO OF PREFERRED SHARE DISTRIBUTIONS TO AVERAGE NET ASSETS APPLICABLE
TO COMMON SHAREHOLDERS 1.90% .92% .86% .57% --%
RATIO OF NET INVESTMENT INCOME (LOSS) INCLUDING PREFERRED SHARE
DISTRIBUTIONS TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 4.70% 5.38% 5.51% 5.45% 1.22%*
PORTFOLIO TURNOVER RATE 5% 2% 5% 11% 0%**
ASSET COVERAGE PER PREFERRED SHARE, END OF PERIOD@ $67,488 $66,813 $68,073 $66,617 $ --
See Notes to Financial Highlights
38
NEUBERGER BERMAN OCTOBER 31, 2006
NOTES TO FINANCIAL HIGHLIGHTS INTERMEDIATE MUNICIPAL CLOSED-END FUNDS
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of each Fund during each
fiscal period. Total return based on per share market value assumes the
purchase of common shares at the market price on the first day and sales of
common shares at the market price on the last day of the period indicated.
Dividends and distributions, if any, are assumed to be reinvested at prices
obtained under each Fund's distribution reinvestment plan. Results
represent past performance and do not guarantee future results. Current
returns may be lower or higher than the performance data quoted. Investment
returns may fluctuate and shares when sold may be worth more or less than
original cost. For each Fund, total return would have been lower if
Management had not waived the investment management fee.
# The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset
arrangements.
@@ After waiver of investment management fee by Management. Had Management not
undertaken such action, the annualized ratios of net expenses to average
daily net assets applicable to common shareholders would have been:
PERIOD FROM
YEAR ENDED SEPTEMBER 27 TO
OCTOBER 31, YEAR ENDED OCTOBER 31, OCTOBER 31,
2006 2005 2004 2003 2002
CALIFORNIA 1.32% 1.36% 1.35% 1.26% 1.08%
INTERMEDIATE 1.17% 1.20% 1.22% 1.13% .76%
NEW YORK 1.38% 1.41% 1.39% 1.31% 1.18%
^ The date investment operations commenced.
* Annualized.
** Not annualized.
@ Calculated by subtracting the Fund's total liabilities (excluding
accumulated unpaid distributions on AMPS) from the Fund's total assets
and dividing by the number of AMPS outstanding.
++ Expense ratios do not include the effect of distributions to holders of
AMPS. Income ratios include income earned on assets attributable to AMPS
outstanding.
~ Calculated based on the average number of shares outstanding during each
fiscal period.
39
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Neuberger Berman California Intermediate Municipal Fund Inc.
Neuberger Berman Intermediate Municipal Fund Inc.
Neuberger Berman New York Intermediate Municipal Fund Inc.
We have audited the accompanying statements of assets and liabilities of
Neuberger Berman California Intermediate Municipal Fund Inc., Neuberger Berman
Intermediate Municipal Fund Inc., and Neuberger Berman New York Intermediate
Municipal Fund Inc. (the "Funds"), including the schedules of investments, as of
October 31, 2006, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Funds' 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 the standards of the Public Company
Accounting Oversight Board (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. We were
not engaged to perform an audit of the Funds' internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2006, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. 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
Neuberger Berman California Intermediate Municipal Fund Inc., Neuberger Berman
Intermediate Municipal Fund Inc., and Neuberger Berman New York Intermediate
Municipal Fund Inc., at October 31, 2006, the results of their operations for
the year then ended, the changes in their net assets for each of the two years
in the period then ended, and their financial highlights for each of the periods
indicated therein, in conformity with U.S. generally accepted accounting
principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
December 8, 2006
40
NEUBERGER BERMAN OCTOBER 31, 2006
DISTRIBUTION REINVESTMENT PLAN
The Bank of New York ("Plan Agent") will act as Plan Agent for shareholders who
have not elected in writing to receive dividends and distributions in cash (each
a "Participant"), will open an account for each Participant under the
Distribution Reinvestment Plan ("Plan") in the same name as their then current
Shares are registered, and will put the Plan into effect for each Participant as
of the first record date for a dividend or capital gains distribution.
Whenever the Fund declares a dividend or distribution with respect to the common
stock of the Fund ("Shares"), each Participant will receive such dividends and
distributions in additional Shares, including fractional Shares acquired by the
Plan Agent and credited to each Participant's account. If on the payment date
for a cash dividend or distribution, the net asset value is equal to or less
than the market price per Share plus estimated brokerage commissions, the Plan
Agent shall automatically receive such Shares, including fractions, for each
Participant's account. Except in the circumstances described in the next
paragraph, the number of additional Shares to be credited to each Participant's
account shall be determined by dividing the dollar amount of the dividend or
distribution payable on their Shares by the greater of the net asset value per
Share determined as of the date of purchase or 95% of the then current market
price per Share on the payment date.
Should the net asset value per Share exceed the market price per Share plus
estimated brokerage commissions on the payment date for a cash dividend or
distribution, the Plan Agent or a broker-dealer selected by the Plan Agent shall
endeavor, for a purchase period lasting until the last business day before the
next date on which the Shares trade on an "ex-dividend" basis, but in no event,
except as provided below, more than 30 days after the payment date, to apply the
amount of such dividend or distribution on each Participant's Shares (less their
PRO RATA share of brokerage commissions incurred with respect to the Plan
Agent's open-market purchases in connection with the reinvestment of such
dividend or distribution) to purchase Shares on the open market for each
Participant's account. No such purchases may be made more than 30 days after the
payment date for such dividend or distribution except where temporary
curtailment or suspension of purchase is necessary to comply with applicable
provisions of federal securities laws. If, at the close of business on any day
during the purchase period the net asset value per Share equals or is less than
the market price per Share plus estimated brokerage commissions, the Plan Agent
will not make any further open-market purchases in connection with the
reinvestment of such dividend or distribution. If the Plan Agent is unable to
invest the full dividend or distribution amount through open-market purchases
during the purchase period, the Plan Agent shall request that, with respect to
the uninvested portion of such dividend or distribution amount, the Fund issue
new Shares at the close of business on the earlier of the last day of the
purchase period or the first day during the purchase period on which the net
asset value per Share equals or is less than the market price per Share, plus
estimated brokerage commissions, such Shares to be issued in accordance with the
terms specified in the third paragraph hereof. These newly issued Shares will be
valued at the then-current market price per Share at the time such Shares are to
be issued.
For purposes of making the reinvestment purchase comparison under the Plan, (a)
the market price of the Shares on a particular date shall be the last sales
price on the New York Stock Exchange (or if the Shares are not listed on the New
York Stock Exchange, such other exchange on which the Shares are principally
traded) on that date, or, if there is no sale on such Exchange (or if not so
listed, in the over-the-counter market) on that date, then the mean between the
closing bid and asked quotations for such Shares on such Exchange on such date
and (b) the net asset value per Share on a particular date shall be the net
asset value per Share most recently calculated by or on behalf of the Fund. All
dividends, distributions and other payments (whether made in cash or Shares)
shall be made net of any applicable withholding tax.
Open-market purchases provided for above may be made on any securities exchange
where the Fund's Shares are traded, in the over-the-counter market or in
negotiated transactions and may be on such terms as to price, delivery and
otherwise as the Plan Agent shall determine. Each Participant's uninvested funds
held by the Plan Agent will not bear interest, and it is understood that, in any
event, the Plan Agent shall have no liability in connection with any inability
to purchase Shares within 30 days after the initial date of such purchase as
herein provided, or with the timing of any purchases effected. The Plan Agent
shall have no responsibility as to the value of the Shares acquired for each
Participant's account. For the purpose of cash investments, the Plan Agent may
commingle each Participant's funds with those of other shareholders of the Fund
for whom the Plan Agent similarly acts as agent, and the average price
(including brokerage commissions) of all Shares purchased by the Plan Agent as
Plan Agent shall be the price per Share allocable to each Participant in
connection therewith.
41
DISTRIBUTION REINVESTMENT PLAN CONT'D
The Plan Agent may hold each Participant's Shares acquired pursuant to the Plan
together with the Shares of other shareholders of the Fund acquired pursuant to
the Plan in noncertificated form in the Plan Agent's name or that of the Plan
Agent's nominee. The Plan Agent will forward to each Participant any proxy
solicitation material and will vote any Shares so held for each Participant only
in accordance with the instructions set forth on proxies returned by the
Participant to the Fund.
The Plan Agent will confirm to each Participant each acquisition made for their
account as soon as practicable but not later than 60 days after the date
thereof. Although each Participant may from time to time have an undivided
fractional interest (computed to three decimal places) in a Share, no
certificates for a fractional Share will be issued. However, dividends and
distributions on fractional Shares will be credited to each Participant's
account. In the event of termination of a Participant's account under the Plan,
the Plan Agent will adjust for any such undivided fractional interest in cash at
the market value of the Shares at the time of termination, less the PRO RATA
expense of any sale required to make such an adjustment.
Any Share dividends or split Shares distributed by the Fund on Shares held by
the Plan Agent for Participants will be credited to their accounts. In the event
that the Fund makes available to its shareholders rights to purchase additional
Shares or other securities, the Shares held for each Participant under the Plan
will be added to other Shares held by the Participant in calculating the number
of rights to be issued to each Participant.
The Plan Agent's service fee for handling capital gains distributions or income
dividends will be paid by the Fund. Participants will be charged their PRO RATA
share of brokerage commissions on all open-market purchases.
Each Participant may terminate their account under the Plan by notifying the
Plan Agent in writing. Such termination will be effective immediately if the
Participant's notice is received by the Plan Agent not less than ten days prior
to any dividend or distribution record date, otherwise such termination will be
effective the first trading day after the payment date for such dividend or
distribution with respect to any subsequent dividend or distribution. The Plan
may be terminated by the Plan Agent or the Fund upon notice in writing mailed to
each Participant at least 30 days prior to any record date for the payment of
any dividend or distribution by the Fund.
These terms and conditions may be amended or supplemented by the Plan Agent or
the Fund at any time or times but, except when necessary or appropriate to
comply with applicable law or the rules or policies of the Securities and
Exchange Commission or any other regulatory authority, only by mailing to each
Participant appropriate written notice at least 30 days prior to the effective
date thereof. The amendment or supplement shall be deemed to be accepted by each
Participant unless, prior to the effective date thereof, the Plan Agent receives
written notice of the termination of their account under the Plan. Any such
amendment may include an appointment by the Plan Agent in its place and stead of
a successor Plan Agent under these terms and conditions, with full power and
authority to perform all or any of the acts to be performed by the Plan Agent
under these terms and conditions. Upon any such appointment of any Plan Agent
for the purpose of receiving dividends and distributions, the Fund will be
authorized to pay to such successor Plan Agent, for each Participant's account,
all dividends and distributions payable on Shares held in their name or under
the Plan for retention or application by such successor Plan Agent as provided
in these terms and conditions.
The Plan Agent shall at all times act in good faith and agrees to use its best
efforts within reasonable limits to ensure the accuracy of all services
performed under this Agreement and to comply with applicable law, but assumes no
responsibility and shall not be liable for loss or damage due to errors unless
such error is caused by the Plan Agent's negligence, bad faith, or willful
misconduct or that of its employees.
These terms and conditions shall be governed by the laws of the State of
Maryland.
42
NEUBERGER BERMAN OCTOBER 31, 2006
DIRECTORY
INVESTMENT MANAGER AND ADMINISTRATOR
Neuberger Berman Management Inc.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
877.461.1899 or 212.476.8800
SUB-ADVISER
Neuberger Berman, LLC
605 Third Avenue
New York, NY 10158-3698
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
STOCK TRANSFER AGENT
The Bank of New York
101 Barclay Street, 11-E
New York, NY 10286
LEGAL COUNSEL
Kirkpatrick & Lockhart Nicholson Graham LLP
1601 K Street, NW
Washington, DC 20006
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
43
DIRECTORS AND OFFICERS
The following tables set forth information concerning the directors and officers
of each Fund. All persons named as directors and officers also serve in similar
capacities for other funds administered or managed by Management and Neuberger.
Each Fund's Statement of Additional Information includes additional information
about Fund directors as of the time of the Fund's most recent public offering
and is available upon request, without charge, by calling (877) 461-1899.
INFORMATION ABOUT THE BOARD OF DIRECTORS
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, AGE, ADDRESS(1) AND LENGTH OF TIME OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE
POSITION(2) WITH FUND SERVED PRINCIPAL OCCUPATION(S)(4) FUND DIRECTOR(5) FUND COMPLEX BY FUND DIRECTOR
-----------------------------------------------------------------------------------------------------------------------------
CLASS I
INDEPENDENT FUND DIRECTORS
Faith Colish (71) Since the Counsel, Carter Ledyard & 56 Advisory Director, ABA
Director Inception of Milburn LLP (law firm) Retirement Funds (formerly,
the Fund(3) since October 2002; American Bar Retirement
formerly, Attorney-at-Law Association (ABRA)) since 1997
and President, Faith (not-for-profit membership
Colish, A Professional association).
Corporation, 1980 to 2002.
Cornelius T. Ryan (75) Since the Founding General Partner, 56 None.
Director Inception of Oxford Partners and Oxford
the Fund(3) Bioscience Partners
(venture capital
investing) and President,
Oxford Venture Corporation
since 1981.
Peter P. Trapp (62) Since the Regional Manager for 56 None.
Director Inception of Mid-Southern Region, Ford
the Fund(3) Motor Credit Company since
September 1997; formerly,
President, Ford Life
Insurance Company, April
1995 to August 1997.
44
NEUBERGER BERMAN OCTOBER 31, 2006
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, AGE, ADDRESS(1) AND LENGTH OF TIME OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE
POSITION(2) WITH FUND SERVED PRINCIPAL OCCUPATION(S)(4) FUND DIRECTOR(5) FUND COMPLEX BY FUND DIRECTOR
-----------------------------------------------------------------------------------------------------------------------------
Peter E. Sundman* (47) Since the Executive Vice President, 56 Director and Vice President,
Chief Executive Officer, Inception of Neuberger Berman Inc. Neuberger & Berman Agency, Inc.
Director and Chairman the Fund(3) (holding company) since since 2000; formerly, Director,
of the Board 1999; Head of Neuberger Neuberger Berman Inc. (holding
Berman Inc.'s Mutual Funds company), October 1999 to March
Business (since 1999) and 2003; Trustee, Frost Valley
Institutional Business YMCA; Trustee, College of
(1999 to October 2005); Wooster.
responsible for Managed
Accounts Business and
intermediary distribution
since October 1999;
President and Director,
Management since 1999;
Managing Director,
Neuberger since 2005;
formerly, Executive Vice
President, Neuberger, 1999
to December 2005;
formerly, Principal,
Neuberger, 1997 to 1999;
formerly, Senior Vice
President, Management,
1996 to 1999.
CLASS II**
INDEPENDENT FUND DIRECTORS
John Cannon (76) Since the Consultant; formerly, 56 Independent Trustee or Director
Director Inception of Chairman, CDC Investment of three series of Oppenheimer
the Fund(3) Advisers (registered Funds: Limited Term New York
investment adviser), 1993 Municipal Fund, Rochester Fund
to January 1999; formerly, Municipals, and Oppenheimer
President and Chief Convertible Securities Fund
Executive Officer, AMA since 1992.
Investment Advisors, an
affiliate of the American
Medical Association.
C. Anne Harvey (69) Since the President, C.A. Harvey 56 Formerly, President, Board of
Director Inception of Associates since October Associates to The National
the Fund(3) 2001; formerly, Director, Rehabilitation Hospital's Board
AARP, 1978 to December of Directors, 2001 to 2002;
2001. formerly, Member, Individual
Investors Advisory Committee to
the New York Stock Exchange
Board of Directors, 1998 to June
2002.
45
DIRECTORS AND OFFICERS CONT'D
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, AGE, ADDRESS(1) AND LENGTH OF TIME OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE
POSITION(2) WITH FUND SERVED PRINCIPAL OCCUPATION(S)(4) FUND DIRECTOR(5) FUND COMPLEX BY FUND DIRECTOR
-----------------------------------------------------------------------------------------------------------------------------
Tom D. Seip (56) Since the General Partner, Seip 56 Director, H&R Block, Inc.
Director Inception of Investments LP (a private (financial services company)
the Fund(3) investment partnership); since May 2001; Director,
formerly, President and America One Foundation since
CEO, Westaff, Inc. 1998; formerly, Director,
(temporary staffing), May Forward Management, Inc. (asset
2001 to January 2002; management company), 1999 to
formerly, Senior Executive 2006; formerly Director, E-Bay
at the Charles Schwab Zoological Society, 1999 to
Corporation, 1983 to 1999, 2003; formerly, Director,
including Chief Executive General Magic (voice recognition
Officer, Charles Schwab software), 2001 to 2002;
Investment Management, formerly, Director, E-Finance
Inc. and Trustee, Schwab Corporation (credit decisioning
Family of Funds and Schwab services), 1999 to 2003;
Investments, 1997 to 1998, formerly, Director,
and Executive Vice Save-Daily.com (micro investing
President-Retail services), 1999 to 2003.
Brokerage, Charles Schwab
Investment Management,
1994 to 1997.
FUND DIRECTOR WHO IS AN "INTERESTED PERSON"
Jack L. Rivkin* (66) Since 2002(3) Executive Vice President 56 Director, Dale Carnegie and
President and Director and Chief Investment Associates, Inc. (private
Officer, Neuberger Berman company) since 1998; Director,
Inc. (holding company) Solbright, Inc. (private
since 2002 and 2003, company) since 1998.
respectively; Managing
Director and Chief
Investment Officer,
Neuberger since December
2005 and 2003,
respectively; formerly,
Executive Vice President,
Neuberger, December 2002
to 2005; Director and
Chairman, Management since
December 2002; formerly,
Executive Vice President,
Citigroup Investments,
Inc., September 1995 to
February 2002; formerly,
Executive Vice President,
Citigroup Inc., September
1995 to February 2002.
46
NEUBERGER BERMAN OCTOBER 31, 2006
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, AGE, ADDRESS(1) AND LENGTH OF TIME OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE
POSITION(2) WITH FUND SERVED PRINCIPAL OCCUPATION(S)(4) FUND DIRECTOR(5) FUND COMPLEX BY FUND DIRECTOR
-----------------------------------------------------------------------------------------------------------------------------
CLASS III
INDEPENDENT FUND DIRECTORS
Robert A. Kavesh (79) Since the Marcus Nadler Professor 56 Director, The Caring Community
Director Inception of Emeritus of Finance and (not-for-profit); formerly,
the Fund(3) Economics, New York Director, DEL Laboratories, Inc.
University Stern School of (cosmetics and pharmaceuticals),
Business; formerly, 1978 to 2004; formerly,
Executive Secretary- Director, Apple Bank for
Treasurer, American Savings, 1979 to 1990; formerly,
Finance Association, 1961 Director, Western Pacific
to 1979. Industries, Inc., 1972 to 1986
(public company).
Howard A. Mileaf (69) Since the Retired; formerly, Vice 56 Director, Webfinancial
Director Inception of President and General Corporation (holding company)
the Fund(3) Counsel, WHX Corporation since December 2002; formerly,
(holding company), 1993 to Director WHX Corporation
2001. (holding company), January 2002
to June 2005; formerly,
Director, State Theatre of New
Jersey (not-for-profit theater),
2000 to 2005; formerly,
Director, Kevlin Corporation
(manufacturer of microwave and
other products).
Edward I. O'Brien (78) Since the Formerly, Member, 56 Director, Legg Mason, Inc.
Director Inception of Investment Policy (financial services holding
the Fund(3) Committee, Edward Jones, company) since 1993; formerly,
1993 to 2001; President, Director, Boston Financial Group
Securities Industry (real estate and tax shelters),
Association ("SIA") 1993 to 1999.
(securities industry's
representative in
government relations and
regulatory matters at the
federal and state levels),
1974 to 1992; Adviser to
SIA, November 1992 to
November 1993.
47
DIRECTORS AND OFFICERS CONT'D
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, AGE, ADDRESS(1) AND LENGTH OF TIME OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE
POSITION(2) WITH FUND SERVED PRINCIPAL OCCUPATION(S)(4) FUND DIRECTOR(5) FUND COMPLEX BY FUND DIRECTOR
-----------------------------------------------------------------------------------------------------------------------------
William E. Rulon (74) Since the Retired; formerly, Senior 56 Formerly, Director, Pro-Kids
Director Inception of Vice President, Foodmaker, Golf and Learning Academy (teach
the Fund(3) Inc. (operator and golf and computer usage to "at
franchiser of restaurants) risk" children), 1998 to 2006;
until January 1997. formerly, Director, Prandium,
Inc. (restaurants), March 2001
to July 2002.
Candace L. Straight (59) Since the Private investor and 56 Director, Montpelier Re
Director Inception of consultant specializing in (reinsurance company) since
the Fund(3) the insurance industry; 2006; Director, National
formerly, Advisory Atlantic Holdings Corporation
Director, Securitas (property and casualty insurance
Capital LLC (a global company) since 2004; Director,
private equity investment The Proformance Insurance
firm dedicated to making Company (personal lines property
investments in the and casualty insurance company)
insurance sector), 1998 to since March 2004; formerly,
December 2003. Director, Providence Washington
Insurance Company (property and
casualty insurance company),
December 1998 to March 2006;
formerly, Director, Summit
Global Partners (insurance
brokerage firm), 2000 to 2005.
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) The Board of Directors shall at times be divided as equally as possible
into three classes of Directors designated Class I, Class II, and Class
III. The terms of office of Class I, Class II, and Class III Directors
shall expire at the annual meeting of shareholders held in 2009, 2007, and
2008, respectively, and at each third annual meeting of stockholders
thereafter.
(3) The Director has served since the Fund's inception except for Mr. Rivkin
who has served as a Director since December 2002 for the Funds with an
inception date of 2002. The inception date of Neuberger Berman Intermediate
Municipal Fund Inc., Neuberger Berman California Intermediate Municipal
Fund Inc., Neuberger Berman New York Intermediate Municipal Fund Inc., and
Neuberger Berman Real Estate Income Fund Inc. is 2002. The inception date
of Neuberger Berman Realty Income Fund Inc., Neuberger Berman Real Estate
Securities Income Fund Inc. and Neuberger Berman Income Opportunity Fund
Inc. is 2003. The inception date of Neuberger Berman Dividend Advantage
Fund Inc. is 2004.
(4) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
(5) For funds organized in a master-feeder structure, we count the master fund
and its associated feeder funds as a single portfolio.
* Indicates a Fund Director who is an "interested person" within the meaning
of the 1940 Act. Mr. Sundman and Mr. Rivkin are interested persons of the
Fund by virtue of the fact that they are officers and/or directors of
Management and Neuberger.
** Barry Hirsch was elected as a Class II Director at the annual shareholder
meeting on April 19, 2006. Mr. Hirsch passed away in July 2006. In August
2006, C. Anne Harvey, formerly a Class I Director of the Fund, was
appointed as a Class II Director of the Fund.
48
INFORMATION ABOUT THE OFFICERS OF THE FUND
NEUBERGER BERMAN OCTOBER 31, 2006
POSITION AND
NAME, AGE, AND ADDRESS(1) LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S)(2)
----------------------------------------------------------------------------------------------------
Andrew B. Allard (45) Anti-Money Laundering Senior Vice President, Neuberger since
Compliance Officer since 2006; Deputy General Counsel, Neuberger
inception(3) since 2004; formerly, Vice President,
Neuberger, 2000 to 2006; formerly,
Associate General Counsel, Neuberger, 1999
to 2004; Anti-Money Laundering Compliance
Officer, fifteen registered investment
companies for which Management acts as
investment manager and administrator
(seven since 2002, three since 2003, four
since 2004 and one since 2005) and one
registered investment company for which
Lehman Brothers Asset Management Inc. acts
as investment adviser (since 2006).
Michael J. Bradler (36) Assistant Treasurer since Vice President, Neuberger since 2006;
2005 Employee, Management since 1997; Assistant
Treasurer, fifteen registered investment
companies for which Management acts as
investment manager and administrator
(fifteen since 2005) and one registered
investment company for which Lehman
Brothers Asset Management Inc. acts as
investment adviser (since 2006).
Claudia A. Brandon (50) Secretary since the Fund's Vice President-Mutual Fund Board
inception(3) Relations, Management since 2000 and
Assistant Secretary since 2004; Vice
President, Neuberger since 2002 and
Employee since 1999; Secretary, fifteen
registered investment companies for which
Management acts as investment manager and
administrator (three since 1985, four
since 2002, three since 2003, four since
2004 and one since 2005) and one
registered investment company for which
Lehman Brothers Asset Management Inc. acts
as investment adviser (since 2006).
49
INFORMATION ABOUT THE OFFICERS OF THE FUND CONT'D
POSITION AND
NAME, AGE, AND ADDRESS(1) LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S)(2)
----------------------------------------------------------------------------------------------------
Robert Conti (50) Vice President since the Senior Vice President, Neuberger since
Fund's inception(3) 2003; formerly, Vice President, Neuberger,
1999 to 2003; Senior Vice President,
Management since 2000; Vice President,
fifteen registered investment companies
for which Management acts as investment
manager and administrator (three since
2000, four since 2002, three since 2003,
four since 2004 and one since 2005) and
one registered investment company for
which Lehman Brothers Asset Management
Inc. acts as investment adviser (since
2006).
Brian J. Gaffney (53) Vice President since the Managing Director, Neuberger since 1999;
Fund's inception(3) Senior Vice President, Management since
2000; Vice President, fifteen registered
investment companies for which Management
acts as investment manager and
administrator (three since 2000, four
since 2002, three since 2003, four since
2004 and one since 2005) and one
registered investment company for which
Lehman Brothers Asset Management Inc. acts
as investment adviser (since 2006).
Maxine L. Gerson (56) Chief Legal Officer since Senior Vice President, Neuberger since
2005 (only for purposes of 2002; Deputy General Counsel and Assistant
sections 307 and 406 of the Secretary, Neuberger since 2001; formerly,
Sarbanes-Oxley Act of 2002) Vice President, Neuberger, 2001 to 2002;
formerly, Associate General Counsel,
Neuberger, 2001; formerly, Counsel,
Neuberger, 2000; Secretary and General
Counsel, Management since 2004; Chief
Legal Officer (only for purposes of
sections 307 and 406 of the Sarbanes-Oxley
Act of 2002), fifteen registered
investment companies for which Management
acts as investment manager and
administrator (fifteen since 2005) and one
registered investment company for which
Lehman Brothers Asset Management Inc. acts
as investment adviser (since 2006).
50
NEUBERGER BERMAN OCTOBER 31, 2006
POSITION AND
NAME, AGE, AND ADDRESS(1) LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S)(2)
----------------------------------------------------------------------------------------------------
Sheila R. James (41) Assistant Secretary since Employee, Neuberger since 1999; Assistant
the Fund's inception(3) Secretary, fifteen registered investment
companies for which Management acts as
investment manager and administrator
(seven since 2002, three since 2003, four
since 2004 and one since 2005) and one
registered investment company for which
Lehman Brothers Asset Management Inc. acts
as investment adviser (since 2006).
Kevin Lyons (51) Assistant Secretary since Employee, Neuberger since 1999; Assistant
2003(4) Secretary, fifteen registered investment
companies for which Management acts as
investment manager and administrator (ten
since 2003, four since 2004 and one since
2005) and one registered investment
company for which Lehman Brothers Asset
Management Inc. acts as investment adviser
(since 2006).
John M. McGovern (36) Treasurer and Principal Vice President, Neuberger since 2004;
Financial and Accounting Employee, Management since 1993; Treasurer
Officer since 2005; prior and Principal Financial and Accounting
thereto, Assistant Officer, fifteen registered investment
Treasurer since the Fund's companies for which Management acts as
inception(3) investment manager and administrator
(fifteen since 2005) and one registered
investment company for which Lehman
Brothers Asset Management Inc. acts as
investment adviser (since 2006); formerly,
Assistant Treasurer, fifteen registered
investment companies for which Management
acts as investment manager and
administrator, 2002 to 2005.
Frank Rosato (35) Assistant Treasurer since Vice President, Neuberger since 2006;
2005 Employee, Management since 1995; Assistant
Treasurer, fifteen registered investment
companies for which Management acts as
investment manager and administrator
(fifteen since 2005) and one registered
investment company for which Lehman
Brothers Asset Management Inc. acts as
investment adviser (since 2006).
51
INFORMATION ABOUT THE OFFICERS OF THE FUND CONT'D
POSITION AND
NAME, AGE, AND ADDRESS(1) LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S)(2)
----------------------------------------------------------------------------------------------------
Frederic B. Soule (60) Vice President since the Senior Vice President, Neuberger since
Fund's inception(3) 2003; formerly, Vice President, Neuberger,
1999 to 2003; Vice President, fifteen
registered investment companies for which
Management acts as investment manager and
administrator (three since 2000, four
since 2002, three since 2003, four since
2004 and one since 2005) and one
registered investment company for which
Lehman Brothers Asset Management Inc. acts
as investment adviser (since 2006).
Chamaine Williams (35) Chief Compliance Officer Vice President, Lehman Brothers Inc. since
since 2005 2003; Chief Compliance Officer, fifteen
registered investment companies for which
Management acts as investment manager and
administrator (fifteen since 2005) and one
registered investment company for which
Lehman Brothers Asset Management Inc. acts
as investment adviser (since 2005); Chief
Compliance Officer, Lehman Brothers Asset
Management Inc. since 2003; Chief
Compliance Officer, Lehman Brothers
Alternative Investment Management LLC
since 2003; formerly, Vice President, UBS
Global Asset Management (US) Inc.
(formerly, Mitchell Hutchins Asset
Management, a wholly-owned subsidiary of
PaineWebber Inc.), 1997 to 2003.
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
(3) The officer has served since the Fund's inception. The inception date of
Neuberger Berman Intermediate Municipal Fund Inc., Neuberger Berman
California Intermediate Municipal Fund Inc., Neuberger Berman New York
Intermediate Municipal Fund Inc., and Neuberger Berman Real Estate Income
Fund Inc. is 2002. The inception date of Neuberger Berman Realty Income
Fund Inc., Neuberger Berman Real Estate Securities Income Fund Inc. and
Neuberger Berman Income Opportunity Fund Inc. is 2003. The inception date
of Neuberger Berman Dividend Advantage Fund Inc. is 2004.
(4) For Neuberger Berman Dividend Advantage Fund Inc., the officer has served
since the Fund's inception in May.
52
NEUBERGER BERMAN OCTOBER 31, 2006
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to portfolio securities is available, without charge,
by calling 1-800-877-9700 (toll-free) and on the website of the Securities and
Exchange Commission at www.sec.gov. Information regarding how the Funds voted
proxies relating to portfolio securities during the most recent 12-month period
ended June 30 is also available, without charge, by calling 1-800-877-9700
(toll-free), on the website of the Securities and Exchange Commission at
www.sec.gov, and on Management's website at www.nb.com.
QUARTERLY PORTFOLIO SCHEDULE
The Funds file a complete schedule of portfolio holdings for each Fund with the
Securities and Exchange Commission for the first and third quarters of each
fiscal year on Form N-Q. The Funds' Forms N-Q are available on the Securities
and Exchange Commission's website at www.sec.gov and may be reviewed and copied
at the Securities and Exchange Commission's Public Reference Room in Washington,
DC. Information on the operation of the Public Reference Room may be obtained by
calling 1-800-SEC-0330. The information on Form N-Q is available upon request,
without charge, by calling (800) 877-9700 (toll-free).
MARYLAND ANTI-TAKEOVER STATUTES
By resolution of the Board of Directors, each Fund has opted into the Maryland
Control Share Acquisition Act and the Maryland Business Combination Act. In
general, the Maryland Control Share Acquisition Act provides that "control
shares" of a Maryland corporation acquired in a control share acquisition may
not be voted except to the extent approved by shareholders at a special meeting
by a vote of two-thirds of the votes entitled to be cast on the matter
(excluding shares owned by the acquiror and by officers or directors who are
employees of the corporation). "Control shares" are voting shares of stock
which, if aggregated with all other shares of stock owned by the acquiror or in
respect of which the acquiror is able to exercise or direct the exercise of
voting power (except solely by virtue of a revocable proxy), would entitle the
acquiror to exercise voting power in electing directors within certain
statutorily-defined ranges (one-tenth but less than one-third, one-third but
less than a majority, and more than a majority of the voting power). In general,
the Maryland Business Combination Act prohibits an interested shareholder (a
shareholder that holds 10% or more of the voting power of the outstanding stock
of the corporation) of a Maryland corporation from engaging in a business
combination (generally defined to include a merger, consolidation, share
exchange, sale of a substantial amount of assets, a transfer of the
corporation's securities and similar transactions to or with the interested
shareholder or an entity affiliated with the interested shareholder) with the
corporation for a period of five years after the most recent date on which the
interested shareholder became an interested shareholder. No Fund is aware of any
shareholder that holds control shares or that is an interested shareholder under
the statutes.
53
NOTICE TO SHAREHOLDERS
In January 2007 you will receive information to be used in filing your 2006 tax
returns, which will include a notice of the exact tax status of all
distributions paid to you by each Fund during calendar 2006. Please consult your
own tax advisor for details as to how this information should be reflected on
your tax returns.
For the fiscal year ended October 31, 2006, the percentages representing the
portion of distributions from net investment income, which are exempt from
federal income tax, other than alternative minimum tax are as follows:
NEUBERGER BERMAN
----------------------------------------------------
California Intermediate Municipal Fund Inc. 99.90%
Intermediate Municipal Fund Inc. 99.84%
New York Intermediate Municipal Fund Inc. 99.92%
54
NEUBERGER BERMAN OCTOBER 31, 2006
BOARD CONSIDERATION OF THE MANAGEMENT AND SUB-ADVISORY AGREEMENTS
At a meeting held on September 27, 2006, the Boards of Directors (collectively
the "Boards," each a "Board") of Neuberger Berman California Intermediate
Municipal Fund Inc., Neuberger Berman Intermediate Municipal Fund Inc. and
Neuberger Berman New York Intermediate Municipal Fund Inc. (each a "Fund"),
including the Directors who are not "interested persons" of each Fund
("Independent Fund Directors"), approved continuance of the Management and
Sub-Advisory Agreements ("Agreements") for each Fund.
In evaluating the Agreements, the Boards, including the Independent Fund
Directors, reviewed materials furnished by Neuberger Berman Management Inc.
("Management") and Neuberger Berman, LLC ("Neuberger") in response to questions
submitted by counsel to the Independent Fund Directors, and met with senior
representatives of Management and Neuberger regarding their personnel and
operations. The Independent Fund Directors were advised by counsel that is
experienced in Investment Company Act of 1940 matters and that is independent of
Management and Neuberger. The Independent Fund Directors received a memorandum
from independent counsel discussing the legal standards for their consideration
of the proposed continuance of the Agreements. They met with such counsel
separately from representatives of Management to discuss the annual contract
review. The annual contract review extends over two regular meetings of the
Boards to ensure that Management and Neuberger have time to respond to any
questions the Independent Fund Directors may have on their initial review of the
report and that the Independent Fund Directors have time to consider those
responses. In addition, during this process, the Boards held a separate meeting
devoted to reviewing and discussing Fund performance.
Each Board considered the following factors, among others, in connection with
its approval of the continuance of the Agreements: (1) the nature, extent, and
quality of the services provided by Management and Neuberger; (2) the
performance of each Fund compared to relevant market indices and a peer group of
investment companies; (3) the costs of the services provided and profits
historically realized by Management and its affiliates from the relationship
with the Funds; (4) the extent to which economies of scale might be realized as
each Fund grows; and (5) whether fee levels reflect those potential economies of
scale for the benefit of investors in each Fund. In their deliberations, the
members of each Board did not identify any particular information that was
all-important or controlling, and each Director may have attributed different
weights to the various factors.
Each Board evaluated the terms of the Agreements and whether the Agreements were
in the best interests of each Fund and its shareholders. Each Board considered,
with respect to each Fund, the nature, extent and quality of the services
provided under the Agreements and the overall fairness of the Agreements to the
Funds.
With respect to the nature, extent and quality of the services provided, each
Board considered the performance of each Fund and the degree of risk undertaken
by the portfolio managers. The Boards considered the experience and staffing of
portfolio management and the investment research personnel of Management and
Neuberger dedicated to performing services for the Funds. The Boards noted that
Management also provides certain administrative services, including fund
accounting and compliance oversight. The Boards also considered Management's and
Neuberger's policies and practices regarding brokerage and allocation of
portfolio transactions for the Funds. The Boards also reviewed whether
Management and Neuberger used brokers to execute Fund transactions that provide
research and other services to Management and Neuberger, and the types of
benefits potentially derived by Management, Neuberger, the Funds and by other
clients of Management and Neuberger from such services. In addition, the Boards
noted the positive compliance history of Management and Neuberger, as each firm
has been free of significant compliance problems.
With respect to the performance of each Fund, each Board considered the
performance of each Fund on both a market return and net asset value basis
relative to its benchmark and a peer group of investment companies pursuing
broadly similar strategies. Each Board also considered the performance in
relation to the degree of risk undertaken by the portfolio managers. Each Board
discussed each Fund's performance with Management and discussed steps that
Management had taken, or intended to take, to improve each Fund's performance.
The Boards also considered Management's resources and responsiveness with
respect to each Fund.
With respect to the overall fairness of the Agreements, the Boards considered
the fee structure of the Agreements as compared to a peer group of comparable
funds and any fall-out benefits likely to accrue to Management or Neuberger or
their affiliates. The Boards also considered the profitability of Management and
its affiliates from their association with the Funds.
55
BOARD CONSIDERATION OF THE MANAGEMENT AND SUB-ADVISORY AGREEMENTS CONT'D
The Boards reviewed a comparison of each Fund's management fee and overall
expense ratio to a peer group of comparable funds. Each Board considered the
mean and median of the management fees and expense ratios of the peer group.
With regard to the sub-advisory fee paid to Neuberger, the Boards noted that
this fee is reflective of an "at cost" basis and there is no profit to Neuberger
with regard to these fees. Each Board considered each Fund's overall expenses in
relation to the overall expenses of the peer group mean and median. In addition,
each Board considered the contractual waiver of a portion of the management fee
undertaken by Management for each Fund. For Neuberger Berman California
Intermediate Municipal Fund Inc. and Neuberger Berman New York Intermediate
Municipal Fund Inc., each Fund's respective Board noted that Management incurred
a loss on the Fund on an after-tax basis.
The Boards considered whether there were other funds that were sub-advised by
Management or its affiliates or separate accounts managed by Management with
similar investment objectives, policies and strategies as the Funds. The Boards
noted that there were no comparable sub-advised funds or separate accounts.
Each Board also evaluated any actual or anticipated economies of scale in
relation to the services Management provides to each Fund. The Boards considered
that each Fund was a closed-end fund that is not continuously offering shares
and that, without daily inflows and outflows of capital, there were not at this
time significant economies of scale to be realized by Management in managing
each Fund's assets.
In concluding that the benefits accruing to Management and its affiliates by
virtue of their relationship to the Funds were reasonable in comparison with the
costs of providing the investment advisory services and the benefits accruing to
each Fund, each Board reviewed specific data as to Management's profit or loss
on each Fund for a recent period and the trend in profit or loss over time. The
Boards also carefully examined Management's cost allocation methodology and had
an independent consultant review the methodology. It also reviewed an analysis
from an independent data service on investment management profitability margins.
The Boards recognized that Management should be entitled to earn a reasonable
level of profits for services it provides to the Funds and, based on its review,
concluded it was satisfied that Management's level of profitability from its
relationship with the Funds was not excessive.
CONCLUSIONS
In approving the Agreements, each Board concluded that the terms of each
Agreement are fair and reasonable and that approval of the Agreements is in the
best interest of each Fund and its shareholders. In reaching this determination,
each Board considered that Management and Neuberger could be expected to provide
a high level of service to each Fund; that it retained confidence in
Management's and Neuberger's capabilities to manage the Funds; that each Fund's
fee structure appeared to each Board to be reasonable given the nature and
quality of services expected to be provided; and that the benefits accruing to
Management and its affiliates by virtue of their relationship to the Funds were
reasonable in comparison with the costs of providing the investment advisory
services and the benefits accruing to each Fund.
56
Statistics and projections in this report are derived from sources deemed to be
reliable but cannot be regarded as a representation of future results of the
Funds. This report is prepared for the general information of shareholders and
is not an offer of shares of the Funds.
NEUBERGER BERMAN
A LEHMAN BROTHERS COMPANY
NEUBERGER BERMAN MANAGEMENT INC.
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
INTERNAL SALES & SERVICES
877.461.1899
www.nb.com
[GRAPHIC] CO435 12/06
ITEM 2. CODE OF ETHICS
The Board of Directors ("Board") of Neuberger Berman Intermediate Municipal Fund
Inc. ("Registrant") 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"). For the period covered by this Form N-CSR, there were no amendments to
the Code of Ethics and there were no waivers from the Code of Ethics granted to
the Registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions.
A copy of the Code of Ethics was included as an exhibit to Registrant's Form
N-CSR filed on July 10, 2006. The Code of Ethics is also available, without
charge, by calling 1-800-877-9700 (toll-free).
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 Howard Mileaf. Mr. Cannon and Mr. Mileaf
are independent directors as defined by Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Ernst & Young, LLP ("E&Y") serves as independent registered public accounting
firm to the Registrant.
(a) Audit Fees
----------
The aggregate fees billed for professional services rendered by E&Y for the
audit of the annual financial statements or services that are normally provided
by E&Y in connection with statutory and regulatory filings or engagements were
$31,250 and $33,500 for the fiscal years ended 2005 and 2006, respectively.
(b) Audit-related Fees
------------------
The aggregate fees billed to the Registrant for assurance and related services
by E&Y that are reasonably related to the performance of the audit of the
Registrant's financial statements and are not reported above in AUDIT FEES were
$6,000 and $6,250 for the fiscal years ended 2005 and 2006, respectively. The
nature of the services provided involved agreed upon procedures relating to the
Preferred Shares. The Audit Committee approved 0% and 0% of these services
provided by E&Y for the fiscal years ended 2005 and 2006, respectively, pursuant
to the waiver provisions of Rule 2-01(c)(7)(i)(C) of Regulation S-X.
The fees billed to other entities in the investment company complex for
assurance and related services by E&Y that are reasonably related to the
performance of the audit that the Audit Committee was required to approve
because the engagement related directly to the operations and financial
reporting of the Registrant were $0 and $0 for the fiscal years ended 2005 and
2006, respectively.
(c) Tax Fees
--------
The aggregate fees billed to the Registrant for professional services rendered
by E&Y for tax compliance, tax advice, and tax planning were $8,700 and $9,500
for the fiscal years ended 2005 and 2006, respectively. The nature of the
services provided was tax compliance, tax advice, and tax planning. The Audit
Committee approved 0% and 0% of these services provided by E&Y for the fiscal
years ended 2005 and 2006, respectively, pursuant to the waiver provisions of
Rule 2-01(c)(7)(i)(C) of Regulation S-X.
The fees billed to other entities in the investment company complex for tax
compliance, tax advice, and tax planning by E&Y that the Audit Committee was
required to approve because the engagement related directly to the operations
and financial reporting of the Registrant were $0 and $0 for the fiscal years
ended 2005 and 2006, respectively.
(d) All Other Fees
--------------
The aggregate fees billed to the Registrant for products and services provided
by E&Y, other than services reported in AUDIT FEES, AUDIT-RELATED FEES, and TAX
FEES were $0 and $0 for the fiscal years ended 2005 and 2006, respectively.
The fees billed to other entities in the investment company complex for products
and services provided by E&Y, other than services reported in AUDIT FEES,
AUDIT-RELATED FEES, and TAX FEES that the Audit Committee was required to
approve because the engagement related directly to the operations and financial
reporting of the Registrant were $0 and $0 for the fiscal years ended 2005 and
2006, respectively.
(e) Audit Committee's Pre-Approval Policies and Procedures
------------------------------------------------------
(1) The Audit Committee's pre-approval policies and procedures for the
Registrant to engage an accountant to render audit and non-audit services
delegate to each member of the Committee the power to pre-approve services
between meetings of the Committee.
(2) None of the services described in paragraphs (b) through (d) above were
approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01
of Regulation S-X.
(f) Hours Attributed to Other Persons
---------------------------------
Not applicable.
(g) Non-Audit Fees
--------------
Non-audit fees billed by E&Y for services rendered to the Registrant were
$14,700 and $15,750 for the fiscal years ended 2005 and 2006, respectively.
Non-audit fees billed by E&Y for services rendered to the Registrant's
investment adviser and any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the Registrant were
$160,650 and $126,000 for the fiscal years ended 2005 and 2006, respectively.
(h) The Audit Committee of the Board considered whether the provision of
non-audit services rendered to the Registrant's investment adviser and any
entity controlling, controlled by, or under common control with the adviser that
provides ongoing services to the Registrant that were not pre-approved by the
Audit Committee because the engagement did not relate directly to the operations
and financial reporting of the Registrant is compatible with maintaining E&Y's
independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
The Board has established a separately-designed standing audit committee
established in accordance with Section 3(a)(58)(A) of the Securities Exchange
Act of 1934, as amended ("Exchange Act"). Its members are John Cannon, Howard A.
Mileaf, Cornelius T. Ryan (Chairman), Tom D. Seip, and Peter P. Trapp.
ITEM 6. SCHEDULE OF INVESTMENTS
The complete schedule of investments for each series is disclosed in the
Registrant's Annual Report, which is included as Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
The Board has delegated to Neuberger Berman, LLC ("Neuberger Berman") the
responsibility to vote proxies related to the securities held in the
Registrant's portfolio. Under this authority, Neuberger Berman is required by
the Board to vote proxies related to portfolio securities in the best interests
of the Registrant and its stockholders. The Board permits Neuberger Berman to
contract with a third party to obtain proxy voting and related services,
including research of current issues.
Neuberger Berman has implemented written Proxy Voting Policies and Procedures
("Proxy Voting Policy") that are designed to reasonably ensure that Neuberger
Berman votes proxies prudently and in the best interest of its advisory clients
for whom Neuberger Berman has voting authority, including the Registrant. The
Proxy Voting Policy also describes how Neuberger Berman addresses any conflicts
that may arise between its interests and those of its clients with respect to
proxy voting.
Neuberger Berman's Proxy Committee is responsible for developing, authorizing,
implementing and updating the Proxy Voting Policy, overseeing the proxy voting
process and engaging and overseeing any independent third-party vendors as
voting delegate to review, monitor and/or vote proxies. In order to apply the
Proxy Voting Policy noted above in a timely and consistent manner, Neuberger
Berman utilizes Institutional Shareholder Services Inc. ("ISS") to vote proxies
in accordance with Neuberger Berman's voting guidelines.
Neuberger Berman's guidelines adopt the voting recommendations of ISS. Neuberger
Berman retains final authority and fiduciary responsibility for proxy voting.
Neuberger Berman believes that this process is reasonably designed to address
material conflicts of interest that may arise between Neuberger Berman and a
client as to how proxies are voted.
In the event that an investment professional at Neuberger Berman believes that
it is in the best interests of a client or clients to vote proxies in a manner
inconsistent with Neuberger Berman's proxy voting guidelines or in a manner
inconsistent with ISS recommendations, the Proxy Committee will review
information submitted by the investment professional to determine that there is
no material conflict of interest between Neuberger Berman and the client with
respect to the voting of the proxy in that manner.
If the Proxy Committee determines that the voting of a proxy as recommended by
the investment professional presents a material conflict of interest between
Neuberger Berman and the client or clients with respect to the voting of the
proxy, the Proxy Committee shall: (i) take no further action, in which case ISS
shall vote such proxy in accordance with the proxy voting guidelines or as ISS
recommends; (ii) disclose such conflict to the client or clients and obtain
written direction from the client as to how to vote the proxy; (iii) suggest
that the client or clients engage another party to determine how to vote the
proxy; or (iv) engage another independent third party to determine how to vote
the proxy.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
(a)(1) The following Portfolio Managers have day-to-day management
responsibility of the Registrant's portfolio as of the date of the filing of
this report.
THOMAS J. BROPHY AND LORI CANELL are Vice Presidents of Neuberger Berman
Management Inc. ("NB Management") Mr. Brophy and Ms. Canell are also
Managing Directors of Neuberger Berman. From 1998 to 2000, Mr. Brophy was
a portfolio manager and credit analyst for Neuberger Berman. From 1997 to
1998, he was a portfolio manager at another investment firm. Mr. Brophy
and Ms. Canell have been Portfolio Managers at the firm for at least the
last five years and have co-managed the Registrant's assets since its
inception.
(a)(2) The table below describes the other accounts for which each Portfolio
Manager has day-to-day management responsibility as of October 31, 2006.
NUMBER OF
TOTAL ACCOUNTS ASSETS MANAGED FOR
NUMBER ASSETS MANAGED FOR WHICH ADVISORY FEE
OF MANAGED WHICH ADVISORY IS
ACCOUNTS ($ FEE IS PERFORMANCE-BASED
TYPE OF ACCOUNT MANAGED MILLIONS) PERFORMANCE-BASED ($ MILLIONS)
THOMAS BROPHY
Registered
Investment
Companies* 3 216 0 0
Other Pooled
Investment Vehicles 0 0 0 0
Other Accounts** 470 1,704 0 0
LORI CANELL
Registered
Investment
Companies* 3 216 0 0
Other Pooled
Investment Vehicles 0 0 0 0
Other Accounts** 4,584 2,947 0 0
*Registered Investment Companies include: Mutual Funds.
**Other Accounts include: Institutional Separate Accounts, Sub-Advised, and
Managed Accounts (WRAP).
Conflicts of Interest
---------------------
Actual or apparent conflicts of interest may arise when a Portfolio Manager has
day-to-day management responsibilities with respect to more than one fund or
other account. The management of multiple funds and accounts (including
proprietary accounts) may give rise to potential conflicts of interest if the
funds and accounts have different or similar objectives, benchmarks, time
horizons, and fees as the Portfolio Manager must allocate his time and
investment ideas across multiple funds and accounts. The Portfolio Manager may
execute transactions for another fund or account that may adversely impact the
value of securities held by the Registrant. Moreover, if a Portfolio Manager
identifies a limited investment opportunity that may be suitable for more than
one fund or other account, the Registrant may not be able to take full advantage
of that opportunity. Securities selected for funds or accounts other than the
Registrant may outperform the securities selected for the Registrant. NB
Management, Neuberger Berman and the Registrant have adopted certain compliance
procedures which are designed to address these types of conflicts. However,
there is no guarantee that such procedures will detect each and every situation
in which a conflict arises.
(a)(3) Compensation (as of October 31, 2006)
------------------------------------
A portion of the compensation paid to each Portfolio Manager is determined by
comparisons to pre-determined peer groups and benchmarks, as opposed to a system
dependent on a percent of management fees. The Portfolio Managers are paid a
base salary that is not dependent on performance. Each Portfolio Manager also
has a "target bonus," which is set each year and can be increased or decreased
prior to payment based in part on performance measured against the relevant peer
group and benchmark. Performance is measured on a three-year rolling average in
order to emphasize longer-term performance. There is also a subjective component
to determining the bonus, which consists of the following factors: (i) the
individual's willingness to work with the marketing and sales groups; (ii) his
or her effectiveness in building a franchise; and (iii) client servicing. Senior
management determines this component in appropriate cases. There are additional
components that comprise the Portfolio Managers' compensation packages,
including: (i) whether the manager was a partner/principal of Neuberger Berman
prior to Neuberger Berman Inc.'s initial public offering; (ii) for more recent
hires, incentives that may have been negotiated at the time the Portfolio
Manager joined the Neuberger Berman complex; and (iii) the total amount of
assets for which the Portfolio Manager is responsible.
NB Management's Portfolio Managers have always had a degree of independence that
they would not get at other firms that have, for example, investment committees.
NB Management believes that its Portfolio Managers are retained not only through
compensation and opportunities for advancement, but also by a collegial and
stable money management environment.
In addition, there are additional stock and option award programs available.
NB Management believes the measurement versus the peer groups on a three-year
rolling average basis creates a meaningful disincentive to try and beat the peer
group and benchmark in any given year by taking undue risks in portfolio
management. The incentive is to be a solid performer over the longer-term, not
necessarily to be a short-term winner in any given year.
(a)(4) Ownership of Securities
-----------------------
Set forth below is the dollar range of equity securities beneficially owned by
each Portfolio Manager in the Registrant as of October 31, 2006.
-------------------------------------------------
DOLLAR RANGE OF EQUITY
PORTFOLIO MANAGER SECURITIES OWNED IN THE
REGISTRANT
-------------------------------------------------
THOMAS BROPHY A
-------------------------------------------------
LORI CANELL A
-------------------------------------------------
A = None E = $100,001-$500,000
B = $1-$10,000 F = $500,001-$1,000,000
C = $10,001 - $50,000 G = $1,000,001 or More
D =$50,001-$100,000
(b) Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
No reportable purchases for the period covered by this report.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no changes to the procedures by which shareholders may recommend
nominees to the Board.
ITEM 11. CONTROLS AND PROCEDURES
(a) Based on an evaluation of the disclosure controls and procedures (as
defined in rule 30a-3(c) under the Investment Company Act of 1940, as
amended (the "Act")) as of a date within 90 days of the filing date of
this document, the Chief Executive Officer and Treasurer and Principal
Financial and Accounting Officer 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 on
Form N-CSR and Form N-Q 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 quarter of the period
covered by this report that have materially affected or are reasonably
likely to materially affect, the Registrant's internal control over
financial reporting.
ITEM 12. EXHIBITS
(a)(1) A copy of the Code of Ethics is incorporated by reference to Registrant's
Form N-CSR, Investment Company Act file number 811-21168 (filed July 10,
2006).
(a)(2) The certifications required by Rule 30a-2(a) of the Act and Section 302
of the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley Act") are filed
herewith.
(a)(3) Not applicable to the Registrant.
(b) The certifications required by Rule 30a-2(b) of the Act and Section 906
of the Sarbanes-Oxley Act are filed herewith.
The certifications provided pursuant to Rule 30a-2(b) of the Act and Section 906
of the Sarbanes-Oxley Act are not deemed "filed" for purposes of Section 18 of
the 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 Intermediate Municipal Fund Inc.
By: /s/ Peter E. Sundman
--------------------
Peter E. Sundman
Chief Executive Officer
Date: January 4, 2007
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: January 4, 2007
By: /s/ John M. Mcgovern
--------------------
John M. McGovern
Treasurer and Principal Financial
and Accounting Officer
Date: January 4, 2007