-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RDKpvns13nf+H3DGVAFMyfC1RsSlyJhEM8mtvvch65oqUElhFKoifRZUfnbWdFuV tOOBW2lr9lAPIvB6g1fuAg== 0000898432-05-000013.txt : 20050107 0000898432-05-000013.hdr.sgml : 20050107 20050107145834 ACCESSION NUMBER: 0000898432-05-000013 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20041031 FILED AS OF DATE: 20050107 DATE AS OF CHANGE: 20050107 EFFECTIVENESS DATE: 20050107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEUBERGER BERMAN INTERMEDIATE MUNICIPAL FUND INC CENTRAL INDEX KEY: 0001178839 IRS NUMBER: 000000000 STATE OF INCORPORATION: MD FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-21168 FILM NUMBER: 05518070 BUSINESS ADDRESS: STREET 1: 605 THIRD AVE STREET 2: 2ND FLOOR CITY: NEW YOKR STATE: NY ZIP: 10158-0180 BUSINESS PHONE: 2124768800 MAIL ADDRESS: STREET 1: 605 THIRD AVENUE STREET 2: 2ND FLOOR CITY: NEW YORK STATE: NY ZIP: 10158-0180 N-CSR 1 nbimf-ncsr.txt As filed with the Securities and Exchange Commission on January 7, 2005 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 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 LLP 1800 Massachusetts Avenue, N.W. 2nd Floor Washington, DC 20036-1800 (Names and addresses of agents for service) Date of fiscal year end: October 31, 2004 Date of reporting period: October 31, 2004 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO SHAREHOLDERS [NEUBERGER BERMAN LOGO] A LEHMAN BROTHERS COMPANY ANNUAL REPORT OCTOBER 31, 2004 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, 2004 CONTENTS THE FUNDS CHAIRMAN'S LETTER 1 PORTFOLIO COMMENTARY/ PERFORMANCE HIGHLIGHTS Intermediate Municipal Fund Inc. 2 California Intermediate Municipal Fund Inc. 2 New York Intermediate Municipal Fund Inc. 3 SCHEDULE OF INVESTMENTS California Intermediate Municipal Fund Inc. 9 Intermediate Municipal Fund Inc. 14 New York Intermediate Municipal Fund Inc. 21 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 DIVIDEND REINVESTMENT PLAN 41 DIRECTORY 43 DIRECTORS AND OFFICERS 44 PROXY VOTING POLICIES AND PROCEDURES 51
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 period ending October 31, 2004. 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 current income exempt from regular federal income tax and, for each state-specific Fund, current income exempt from that state's income taxes. We invest in intermediate-term municipal bonds (maturities between three and eight years) 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 keep earning 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)2004 Neuberger Berman Management Inc. All rights reserved. 1 INTERMEDIATE MUNICIPAL CLOSED-END FUNDS Portfolio Commentaries We are pleased to report that on a Net Asset Value (NAV) basis, all three of Neuberger Berman's Intermediate Municipal Closed-End Funds delivered positive returns and materially outperformed the Lehman Brothers 10 Year Municipal Bond Index benchmark in fiscal 2004. In fiscal 2004, two difficult months (April and May) for municipal securities -- and bonds in general -- were sandwiched between two five-month periods of stable returns. This reflected investors' changing perspective on the economy. From November 2003 until March 2004, investors questioned the strength and sustainability of the economic recovery. In early April, the release of a strong March jobs report convinced investors the recovery was for real, and bond prices started to fall. An impressive April jobs report released at the beginning of May kept the pressure on bond prices through the end of the month. Then in June, the tide turned. Rapidly rising oil prices caused the economy to hit what Federal Reserve Chairman Greenspan characterized as a "soft patch." In addition, concern that terrorists would target the Olympics or U.S. targets during the presidential campaign caused a flight to quality. Bonds continued to rally through the end of the reporting period, with the yield on an AAA-rated 10-year general obligation municipal bond falling from 4.06% at the end of May to 3.46% on October 29. Looking ahead, we believe that the outlook for municipal bonds is favorable, but we remain cautious. Increased tax revenue resulting from the recovering economy has improved state and local government balance sheets. However, this is being offset to varying degrees by the reduction in federal subsidies to municipalities, prompted by the growing federal budget deficit. Consequently, analysis of municipal securities' credit quality remains critical. Also, President Bush's election victory is likely to increase speculation about the potential for a flat tax and/or national sales tax replacing the graduated income tax. If this "chatter" gets loud enough, it could have a negative impact on the municipal securities market. However, despite the Republicans' new dominance at the federal level, we think it will once again prove difficult to build the substantial support required to approve a major tax overhaul. Consequently, we believe that any pressure on municipal securities prices due to discussion of tax reform will represent a good buying opportunity. INTERMEDIATE MUNICIPAL FUND INC. (AMEX: NBH) For the six months ending October 31, 2004, on a net asset value (NAV) basis, the Intermediate Municipal Fund returned 8.53% compared to the Lehman 10 Year Municipal Bond Index's 5.38% return. For the past 12 months, on an NAV basis the Fund returned 10.91% versus the benchmark's 6.35%. As of October 31, 2004, the portfolio was composed of 73.6% revenue bonds, 24.1% general obligation bonds, 0.5% prerefunded/escrowed bonds and 1.8% cash and cash equivalents. Bonds subject to the Alternative Minimum Tax (AMT) equaled 13.6% of assets. At the close of the reporting period, the Fund's duration was 6.1 years and the portfolio's leverage position was 36.4% of assets. CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC. (AMEX: NBW) For the six months ending October 31, 2004, on a net asset value (NAV) basis, the California Intermediate Municipal Fund returned 8.98% compared to the Lehman 10 Year Municipal Bond Index's 5.38% return. For the past 12 months, on 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. 2 NEUBERGER BERMAN OCTOBER 31, 2004 an NAV basis, the Fund returned 10.97% versus the benchmark's 6.35%. As of October 31, 2004, the portfolio was composed of 87.1% revenue bonds, 10.9% general obligation bonds, and 2.0% cash and cash equivalents. Bonds subject to the Alternative Minimum Tax (AMT) equaled 13.0% of assets. At the close of the reporting period, the Fund's duration was 6.0 years and the portfolio's leverage position was 36.6% of assets. Shortly after the close of first-half fiscal 2004, California successfully issued $7.9 billion in Economic Recovery Bonds. The issue was over-subscribed at prices reflecting investor confidence that California will effectively address its structural budget deficit. NEW YORK INTERMEDIATE MUNICIPAL FUND INC. (AMEX: NBO) For the six months ending October 31, 2004, on a net asset value (NAV) basis, the New York Intermediate Municipal Fund returned 7.71% compared to the Lehman 10 Year Municipal Bond Index's 5.38% return. For the past 12 months, on an NAV basis, the Fund returned 9.67% versus the benchmark's 6.35%. As of October 31, 2004, the portfolio was composed of 93.7% revenue bonds, 4.8% general obligation bonds, and 1.5% cash and cash equivalents. Bonds subject to the Alternative Minimum Tax (AMT) equaled 18.6% of assets. At the close of the reporting period, the Fund's duration was 6.0 years and the portfolio's leverage position was 36.7% of assets. Sincerely, /s/ Ted Giuliano /s/ Thomas Brophy /s/ Lori Canell TED GIULIANO, THOMAS BROPHY AND LORI CANELL PORTFOLIO CO-MANAGERS 3
INTERMEDIATE CALIFORNIA INTERMEDIATE NEW YORK INTERMEDIATE MUNICIPAL FUND MUNICIPAL FUND MUNICIPAL FUND AMEX TICKER SYMBOL NBH AMEX TICKER SYMBOL NBW AMEX TICKER SYMBOL NBO 1 YEAR TOTAL RETURN NAV (1) 10.91% 10.97% 9.67% MARKET PRICE (2) 8.94% 9.63% 6.39% AVERAGE ANNUAL TOTAL RETURN (Life of Fund as of October 31, 2004) NAV (1) 8.31% 7.96% 7.56% MARKET PRICE (2) 1.16% 0.18% (0.22%) INCEPTION DATE 09/24/2002 09/24/2002 09/24/2002
CALIFORNIA INTERMEDIATE MUNICIPAL FUND RATING DIVERSIFICATION (% BY RATINGS) AAA 56.5% AA 3.3 A 12.9 BBB 24.2 BB 2.4 B 0.0 CCC 0.0 CC 0.0 C 0.0 D 0.0 Not Rated 0.0 Short Term 0.7
INTERMEDIATE MUNICIPAL FUND RATING DIVERSIFICATION (% BY RATINGS) AAA 57.7% AA 7.9 A 14.8 BBB 16.4 BB 2.7 B 0.0 CCC 0.0 CC 0.0 C 0.0 D 0.0 Not Rated 0.0 Short Term 0.5
NEW YORK INTERMEDIATE MUNICIPAL FUND RATING DIVERSIFICATION (% BY RATINGS) AAA 23.8% AA 35.5 A 19.7 BBB 19.3 BB 1.6 B 0.0 CCC 0.0 CC 0.0 C 0.0 D 0.0 Not Rated 0.0 Short Term 0.1
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 [DATE] ENDNOTES (1) Returns based on Net Asset Value ("NAV") of the Funds. (2) Returns based on price of Fund shares on the American Stock Exchange. (3) A portion of the income from the Funds may be subject to 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 GLOSSARY OF INDICES NEW YORK MUNICIPAL DEBT FUND AVERAGE: An equally weighted average of those closed-end funds that limit their assets to those securities that are exempt from taxation in New York (double tax-exempt) or a city in New York (triple tax-exempt). CALIFORNIA MUNICIPAL DEBT FUND INDEX: An equally weighted index, adjusted for income dividends and capital gain distributions, of typically the largest 30 closed-end funds that invest at least 65% of assets in municipal debt issues that are exempt from taxation in California. CALIFORNIA MUNICIPAL DEBT FUND An equally weighted average of those AVERAGE: closed-end funds that invest at least 65% of assets in municipal debt issues that are exempt from taxation in California. GENERAL LEVERAGED MUNICIPAL DEBT FUND An equally weighted index, adjusted for INDEX: income dividends and capital gain distributions, of typically the largest 30 closed-end funds that invest 65% or more of their assets in municipal debt issues rated in the top four credit ratings. These funds can be leveraged via use of debt, preferred equity, and/or reverse repurchase agreements. GENERAL LEVERAGED MUNICIPAL DEBT FUND An equally weighted average of those AVERAGE: closed-end funds that invest 65% or more of their assets in municipal debt issues rated in the top four credit ratings. These funds can be leveraged via use of debt, preferred equity, and/or reverse repurchase agreements. LEHMAN 10-YEAR MUNICIPAL BOND INDEX: The index is the 10 Year (8 - 12) component 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. Remarked issues, taxable municipal bonds, bonds with floating rates, and derivatives, are excluded from the benchmark. Please note that indices do not take into account any fees and expenses or any tax consequences of investing in the individual securities that they track 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 This page has been left blank intentionally 7 This page has been left blank intentionally 8 NEUBERGER BERMAN OCTOBER 31, 2004 SCHEDULE OF INVESTMENTS California Intermediate Municipal Fund Inc.
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED) TAX-EXEMPT SECURITIES--BACKED BY INSURANCE (85.0%) AMERICAN CAPITAL ACCESS $ 1,000 Puerto Rico Ind., Tourist, Ed., Med., & Env. Ctrl. Fac. Rev. (Polytechnic Univ. of Puerto Rico Proj.), Ser. 2002 A, 5.25%, due 8/1/15 A $ 1,065++ AMERICAN MUNICIPAL BOND ASSURANCE CORP. 1,285 Bay Area (CA) Governments Assoc. Bart SFO Extension Rev. (Arpt. Premium Fare), Ser. 2002 A, 5.00%, due 8/1/21 AAA 1,360 1,000 California St. Pub. Works Board Lease (Dept. of Gen. Svc.) Rev. (Cap. East End Complex), Ser. 2002 A, 5.25%, due 12/1/16 AAA 1,107 1,000 Fresno (CA) Unified Sch. Dist. Ref. G.O., Ser. 2002 A, 6.00%, due 2/1/17 AAA 1,217 1,905 Long Beach (CA) Bond Fin. Au. Tax Allocation Rev., (Downtown, North Long Beach, Poly High, & West Beach Redev. Proj.), Ser. 2002 A, 5.38%, due 8/1/17 AAA 2,136 500 Long Beach (CA) Fin. Au. Rev., Ser. 1992, 6.00%, due 11/1/17 AAA 599 1,045 Marin Co. (CA) Muni. Wtr. Dist. Wtr. Ref. Rev., Ser. 2002, 5.00%, due 7/1/17 AAA 1,131 1,445 Oceanside (CA) Cert. of Participation Ref. Rev., Ser. 2003 A, 5.25%, due 4/1/14 AAA 1,619 2,600 Sacramento (CA) Muni. Util. Dist. Elec. Rev., Ser. 1997 K, 5.70%, due 7/1/17 AAA 3,085 500 Salinas Valley (CA) Solid Waste Au. Rev., Ser. 2002, 5.00%, due 8/1/06 AAA 525 2,000 San Francisco (CA) St. Bldg. Au. Lease Rev. (San Francisco Civic Ctr. Complex), Ser. 1996 A, 5.25%, due 12/1/16 AAA 2,162 2,500 San Jose (CA) Fin. Au. Lease Rev. (Civic Ctr. Proj.), Ser. 2002 B, 5.25%, due 6/1/17 AAA 2,775 1,000 San Jose (CA) Multi-Family Hsg. Rev. (Fallen Leaves Apts. Proj.), Ser. 2002 J-1, 4.95%, due 12/1/22 Aaa AAA 1,030 FINANCIAL GUARANTY INSURANCE CO. 2,550 Contra Costa (CA) Comm. College Dist. G.O., Ser. 2002, 5.25%, due 8/1/17 AAA 2,844 1,000 Kings Canyon (CA) Joint Unified Sch. Dist. G.O., Ser. 2002, 5.38%, due 8/1/17 Aaa AAA 1,124 5,000 Los Angeles (CA) Dept. of Arpts. Rev. (Los Angeles Int'l. Arpt.), Ser. 2002 A, 5.25%, due 5/15/18 Aaa AAA 5,516 1,090 Moreland (CA) Sch. Dist. Ref. G.O., Ser. 2002, 5.13%, due 9/1/17 AAA 1,188 535 Nevada & Placer Cos. (CA) Irrigation Dist. Cert. of Participation Rev., Ser. 2002, 5.00%, due 1/1/16 AAA 581 565 Nevada & Placer Cos. (CA) Irrigation Dist. Cert. of Participation Rev., Ser. 2002, 5.00%, due 1/1/17 AAA 610 1,045 Oakland (CA) G.O., Ser. 2002 A, 5.00%, due 1/15/15 AAA 1,137 1,210 Oakland (CA) G.O., Ser. 2002 A, 5.00%, due 1/15/18 AAA 1,298 1,290 Oakland (CA) Redev. Agcy. Sub. Tax Allocation Rev. (Central Dist. Redev. Proj.), Ser. 2003, 5.50%, due 9/1/17 AAA 1,450 575 Port of Oakland (CA) Rev., Ser. 2002 M, 5.25%, due 11/1/17 AAA 642 2,655 Riverside Co. (CA) Eastern Muni. Wtr. Dist. Cert. of Participation Wtr. & Swr. Rev., Ser. 2001 A, 5.00%, due 7/1/19 Aaa AAA 2,814 2,000 San Diego (CA) Unified Sch. Dist. G.O., Ser. 2002 D, 5.25%, due 7/1/21 Aaa AAA 2,272 1,500 San Francisco (CA) City & Co. Int'l. Arpt. Second Ser. Rev., 5.25%, due 5/1/16 AAA 1,586
See Notes to Schedule of Investments 9
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED) FINANCIAL SECURITY ASSURANCE INC. $ 1,000 Burbank (CA) Pub. Svc. Dept. Elec. Rev., Ser. 1998, 5.13%, due 6/1/16 AAA $ 1,087 1,000 California St. Dept. of Wtr. Res. Wtr. Rev., Ser. 2001 W, 5.50%, due 12/1/13 Aaa AAA 1,161 3,000 California St. Pub. Works Board Lease Rev. (Regents of the Univ. of California, UCLA Replacement Hosp.), Ser. 2002 A, 5.38%, due 10/1/13 AAA 3,393 1,275 Los Angeles Co. (CA) Long Beach Unified Sch. Dist. G.O., Ser. 2002 D, 5.00%, due 8/1/17 AAA 1,380 500 Marin Co. (CA) Dixie Elementary Sch. Dist. G.O., Ser. 2000 A, 5.38%, due 8/1/17 AAA 556 3,000 Puerto Rico Muni. Fin. Agcy. Rev., Ser. 2002 A, 5.25%, due 8/1/17 AAA 3,377 1,000 Puerto Rico Muni. Fin. Agcy. Rev., Ser. 2002 A, 5.25%, due 8/1/21 Aaa AAA 1,109 5,000 San Francisco (CA) City & Co. Redev. Agcy. Lease Ref. Rev. (George R. Moscone Convention Ctr.), Ser. 2002, 5.00%, due 7/1/17 Aaa AAA 5,389 1,000 San Jose (CA) Arpt. Ref. Rev., Ser. 2002 B, 5.00%, due 3/1/11 AAA 1,081 1,615 San Jose (CA) Arpt. Ref. Rev., Ser. 2002 B, 5.00%, due 3/1/12 AAA 1,746 1,620 Santa Clara Co. (CA) Fremont Union High Sch. Dist. G.O., Ser. 2002 C, 5.00%, due 9/1/20 Aaa AAA 1,728 MUNICIPAL BOND INVESTORS ASSURANCE CORP. 1,250 Alameda Co. (CA) Cert. of Participation Ref. Rev., Ser. 2001 A, 5.38%, due 12/1/17 AAA 1,405 4,000 California Poll. Ctrl. Fin. Au. Ref. PCR (Pacific Gas & Elec. Co.), Ser. 1996 A, 5.35%, due 12/1/16 AAA 4,346++ 2,835 Glendale (CA) Redev. Agcy. Tax Allocation Rev. (Central Glendale Redev. Proj.), Ser. 2002, 5.00%, due 12/1/16 AAA 3,107 2,480 Glendale (CA) Redev. Agcy. Tax Allocation Rev. (Central Glendale Redev. Proj.), Ser. 2002, 5.25%, due 12/1/17 AAA 2,756 3,890 Port of Oakland (CA) Ref. Rev., Ser. 2002 N, 5.00%, due 11/1/13 AAA 4,218 750 Santa Clara Co. (CA) Saratoga Union Sch. Dist. Ref. G.O., Ser. 1999, 5.13%, due 9/1/11 AAA 844 3,905 Solano Co. (CA) Cert. of Participation Rev., Ser. 2002, 5.25%, due 11/1/17 AAA 4,338 1,000 Univ. of California Regents Rev. (Multi. Purp. Proj.), Ser. 2000 K, 5.00%, due 9/1/12 AAA 1,095 ---------- 86,989 ---------- TAX-EXEMPT SECURITIES--OTHER (69.6%) 780 Abag (CA) Fin. Au. Cert. of Participation Rev. (Channing House), Ser. 1999, 4.90%, due 2/15/09 BBB+ 822++ 3,050 Abag (CA) Fin. Au. Cert. of Participation Rev. (Episcopal Homes Foundation), Ser. 1998, 5.13%, due 7/1/18 BBB+ 3,097++ 1,000 Abag (CA) Fin. Au. Rev. (San Diego Hosp. Assoc.), Ser. 2003 C, 5.13%, due 3/1/18 Baa1 BBB+ 1,023++ 900 Brazos (TX) River Au. Ref. PCR (TXU Energy Co. LLC Proj.), Ser. 2003 A, 6.75%, due 4/1/38 Putable 4/1/13 Baa2 BBB 1,022 750 Brazos (TX) River Au. Ref. Rev. (Reliant Energy, Inc. Proj.), Ser. 1999 B, 7.75%, due 12/1/18 Ba1 BBB- 821++
10
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED) $ 1,000 Brazos (TX) 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 $ 1,066++ 765 California Co. (CA) Tobacco Securitization Agcy. Tobacco Settlement Asset-Backed Rev., Ser. 2002, 4.75%, due 6/1/19 Baa3 BBB 769 1,750 California Ed. Fac. Au. Ref. Rev. (Stanford Univ.), Ser. 2001 R, 5.00%, due 11/1/21 Aaa AAA 1,859++ 2,000 California Hlth. Fac. Fin. Au. Rev. (Catholic Healthcare West), Ser. 2004 I, 4.95%, due 7/1/26 Baa1 BBB+ 2,092++ 2,000 California Hlth. Fac. Fin. Au. Rev. (Cedars-Sinai Med. Ctr.), Ser. 1999 A, 6.13%, due 12/1/19 A3 2,200++ 1,000 California Hlth. Fac. Fin. Au. Rev. (Kaiser Permanente), Ser. 1998 B, 5.00%, due 10/1/20 AAA 1,078++ 1,500 California Poll. Ctrl. Fin. Au. Solid Waste Disp. Rev. (Republic Svc., Inc. Proj.), Ser. 2002 B, 5.25%, due 6/1/23 Baa3 BBB 1,587++ 2,500 California Poll. Ctrl. Fin. Au. Solid Waste Disp. Rev. (Waste Management, Inc. Proj.), Ser. 2002 B, 4.45%, due 7/1/27 Putable 7/1/05 BBB 2,528++ 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 12/1/17 BBB 1,045++ 4,500 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A, 5.75%, due 5/1/17 A3 BBB+ 5,105 1,000 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A, 5.38%, due 5/1/22 A3 BBB+ 1,080 2,250 California St. G.O., Ser. 2002, 5.00%, due 10/1/17 A1 A+ 2,417 1,095 California St. Pub. Works Board Lease Rev. (California Comm. Colleges), Ser. 2004 B, 5.50%, due 6/1/20 Baa2 BBB- 1,216 1,000 California St. Univ., Fresno Assoc., Inc. Rev. (Auxiliary Organization Event Ctr.), Ser. 2002, 5.00%, due 7/1/12 Baa3 BBB- 1,058 2,000 California Statewide CDA Cert. of Participation Rev. (Children's Hosp. Los Angeles), Ser. 1999, 5.13%, due 8/15/19 A2 A+ 2,077++ 2,000 California Statewide CDA Cert. of Participation Rev. (The Internext Group), Ser. 1999, 5.38%, due 4/1/17 BBB 2,037++ 5,000 California Statewide CDA Hlth. Fac. Rev. (Mem. Hlth. Svcs.), Ser. 2003 A, 6.00%, due 10/1/16 A3 A 5,559++ 500 California Statewide CDA Rev. (East Valley Tourist Dev. Au.), Ser. 2003 A, 9.25%, due 10/1/20 BB 549 3,000 California Statewide CDA Rev. (Kaiser Permanente), Ser. 2002 E, 4.70%, due 11/1/36 Putable 6/1/09 A3 3,197++ 1,000 Central (CA) Joint Pwr. Hlth. Fin. Au. Cert. of Participation Rev., (Comm. Hosp. of Central California Proj.), Ser. 2000, 5.50%, due 2/1/14 Baa1 BBB+ 1,053++ 1,020 Cerritos (CA) Pub. Fin. Au. Sub. Tax Allocation Rev. (Cerritos Redev. Proj.), Ser. 2002 B, 4.40%, due 11/1/16 BBB 1,008 1,000 Cumberland Co. (PA) 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+ 1,069++ 500 Dallas-Fort Worth (TX) Int'l. Arpt. Fac. Imp. Corp. Rev., Ser. 2004 A-1, 6.15%, due 1/1/16 Baa3 BBB- 500++ 1,000 De Kalb Co. (GA) Dev. Au. Ref. PCR (General Motors Corp. Proj.), Ser. 2002, 6.00%, due 3/15/21 A3 BBB 1,077++ 1,210 Elk Grove (CA) Spec. Tax Rev. (East Franklin Comm. Fac. Dist. Number 1), Ser. 2002 A, 5.38%, due 8/1/17 BB+ 1,260
See Notes to Schedule of Investments 11
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED) $ 1,270 Los Angeles (CA) Dept. of Wtr. & Pwr. Sys. Rev., Ser. 2001 A, Sub. Ser. A-3, 5.38%, due 7/1/20 Aa3 $ 1,324 750 Miami Beach (FL) Hlth. Fac. Au. Hosp. Ref. Rev. (Mount Sinai Med. Ctr. of Florida Proj.), Ser. 2004, 6.25%, due 11/15/09 Ba2 BB 772++ 1,500 Morehouse Parish (LA) Ref. PCR (Int'l. Paper Co. Proj.), Ser. 2001 A, 5.25%, due 11/15/13 Baa2 BBB 1,617++ 1,405 North Carolina Muni. Pwr. Agcy. Number 1 Catawba Elec. Rev., Ser. 2003 A, 5.50%, due 1/1/14 Baa1 BBB+ 1,556 605 Oakland (CA) Redev. Agcy. Rev. (Coliseum Area Redev. Proj.), Ser. 2003, 5.00%, due 9/1/16 A- 636 635 Oakland (CA) Redev. Agcy. Rev. (Coliseum Area Redev. Proj.), Ser. 2003, 5.00%, due 9/1/17 A- 665 1,370 Puerto Rico Children's Trust Tobacco Settlement Asset-Backed Rev., Ser. 2002, 5.38%, due 5/15/33 Baa3 BBB 1,252 440 Roseville (CA) Stone Point Comm. Fac. District No. 1 Special Tax Rev., Ser. 2003, 5.70%, due 9/1/17 BB+ 453 830 San Diego (CA) Redev. Agcy. Sub. Parking Rev. (Centre City Redev. Proj.), Ser. 2003 B, 4.80%, due 9/1/15 Baa2 A- 856 820 San Diego (CA) Redev. Agcy. Sub. Parking Rev. (Centre City Redev. Proj.), Ser. 2003 B, 4.90%, due 9/1/16 Baa2 A- 847 3,000 San Francisco (CA) Bay Area Toll Au. Toll Bridge Rev., Ser. 2001 D, 5.00%, due 4/1/17 Aa3 AA 3,259 1,000 Santa Rosa (CA) Rancheria Tachi Yokut Tribe Enterprise Rev., Ser. 2003, 6.13%, due 3/1/13 BBB 1,004 1,000 South Gate (CA) Pub. Fin. Au. Tax Allocation Rev. (South Gate Redev. Proj. No. 1), Ser. 2002, 5.00%, due 9/1/16 AAA 1,088 1,250 Tobacco Settlement Fin. Corp. (LA) Tobacco Settlement Asset-Backed Rev., Ser. 2001 B, 5.50%, due 5/15/30 Baa3 BBB 1,115 600 Univ. of California Regents Cert. of Participation Rev. (San Diego Campus & Sacramento Proj.), Ser. 2002 A, 5.25%, due 1/1/18 Aa2 643 750 Verrado (AZ) Comm. Fac. Dist. Number 1 G.O., Ser. 2003, 6.15%, due 7/15/17 BB- 766 250 Virgin Islands Pub. Fin. Au. Refinery Fac. Rev. (HOVENSA Refinery Proj.), Ser. 2003, 6.13%, due 7/1/22 Baa3 BBB- 268 750 Virgin Islands Pub. Fin. Au. Rev. (Virgin Islands Matching Fund Loan Notes), Ser. 1998 E, 6.00%, due 10/1/22 BBB 772 1,000 Virgin Islands Wtr. & Pwr. Au. Elec. Sys. Ref. Rev., Ser. 1998, 5.30%, due 7/1/18 BBB 1,026 ---------- 71,190 ---------- TAX-EXEMPT VARIABLE RATE DEMAND NOTES--BACKED BY INSURANCE (0.2%) FINANCIAL SECURITY ASSURANCE INC. 200 California Hsg. Fin. Agcy. Home Mtge. Rev., Ser. 2003 U, 1.76%, VRDN due 11/1/04 VMIG1 A-1+ 200 ---------- TAX-EXEMPT VARIABLE RATE DEMAND NOTES--BACKED BY LETTERS OF CREDIT (0.9%) BANK OF AMERICA 100 California St. Econ. Rec. Rev., Ser. 2004 C-5, 1.68%, VRDN due 11/1/04 VMIG1 A-1+ 100 280 Irvine (CA) Ltd. Oblig. Imp. (Assessment Dist. No 93-14), Ser. 2000, 1.70%, VRDN due 11/1/04 VMIG1 A-1+ 280 300 Newport Beach (CA) Rev. (Hoag Mem. Hosp. Presbyterian), Ser. 1992, 1.68%, VRDN due 11/1/04 VMIG1 A-1+ 300++
12
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED) STATE STREET BANK $ 200 Irvine Ranch (CA) Wtr. Dist. G.O., Ser. 1995, 1.70%, VRDN due 11/1/04 VMIG1 A-1+ $ 200 ---------- 880 ---------- TOTAL INVESTMENTS (155.7%) (COST $153,401) 159,259## Cash, receivables and other assets, less liabilities (2.0%) 2,051 Liquidation Value of Auction Market Preferred Shares [(57.7%)] (59,000) ---------- TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS (100.0%) $ 102,310 ----------
See Notes to Schedule of Investments 13 SCHEDULE OF INVESTMENTS Intermediate Municipal Fund Inc.
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED) TAX-EXEMPT SECURITIES--PRE-REFUNDED BACKED BY U.S. GOVERNMENT SECURITIES (0.8%) $ 2,225 Massachusetts St. Wtr. Poll. Abatement Trust Pre-Refunded Rev. (Pool Prog.), Ser. 2001, 5.25%, due 2/1/16 Aaa AAA $ 2,523 20 San Antonio (TX) Pre-Refunded Cert. of Obligation G.O., Ser. 2002, 5.00%, due 2/1/14 P/R 2/1/12 Aa2 AA+ 22 ---------- 2,545 ---------- TAX-EXEMPT SECURITIES--ESCROWED IN U.S. GOVERNMENT SECURITIES (0.6%) 1,670 Illinois Metro. Pier & Exposition Au. Dedicated St. Tax Ref. Rev., Ser. 1998 A, 5.50%, due 6/15/17 AAA 1,967 ---------- TAX-EXEMPT SECURITIES--BACKED BY INSURANCE (74.7%) AMERICAN MUNICIPAL BOND ASSURANCE CORP. 1,500 California St. Pub. Works Board Lease Rev., Ser. 2002 A, 5.25%, due 12/1/17 AAA 1,653 5,000 Chicago (IL) G.O., Ser. 1995 A-2, 6.25%, due 1/1/13 Aaa AAA 5,993 6,120 Chicago (IL) G.O., Ser. 2002 A, 5.38%, due 1/1/17 Aaa AAA 6,856 4,220 Colorado Springs (CO) Util. Sys. Sub. Lien Ref. Rev., Ser. 2002 A, 5.38%, due 11/15/18 AAA 4,752 4,100 Fargo (ND) Hlth. Sys. Rev. (Meritcare Obligated Group), Ser. 2002 A, 5.63%, due 6/1/17 AAA 4,543++ 1,065 Indiana St. Recreational Dev. Comm. Rev., Ser. 2002, 5.25%, due 7/1/18 AAA 1,170 1,125 Indiana St. Recreational Dev. Comm. Rev., Ser. 2002, 5.25%, due 7/1/19 AAA 1,229 3,000 Massachusetts Port Au. Spec. Fac. Rev. (Delta Air Lines, Inc. Proj.), Ser. 2001 A, 5.50%, due 1/1/19 AAA 3,113++ 5,010 New Hampshire Hlth. & Ed. Fac. Au. Rev. (Univ. Sys. of New Hampshire), Ser. 1992, 5.38%, due 7/1/17 AAA 5,610 7,000 Palm Beach Co. (FL) Sch. Board Cert. of Participation, Ser. 2001 B, 5.38%, due 8/1/17 AAA 7,830 4,610 Thornton (CO) Cert. of Participation, Ser. 2002, 5.38%, due 12/1/16 Aaa AAA 5,204 FINANCIAL GUARANTY INSURANCE CO. 4,000 Denver (CO) City & Co. Arpt. Sys. Ref. Rev., Ser. 2002 E, 5.25%, due 11/15/14 Aaa AAA 4,355 3,075 Detroit (MI) Sch. Dist. Sch. Bldg. & Site Imp. G.O., Ser. 2002 A, 5.50%, due 5/1/15 AAA 3,490 3,235 Houston (TX) Arpt. Sys. Sub. Lien. Ref. Rev., Ser. 2001 A, 5.50%, due 7/1/16 AAA 3,548 4,355 Las Vegas (NV) Valley Wtr. Dist. Ref. & Wtr. Imp. G.O., Ser. 2003 A, 5.25%, due 6/1/16 Aaa AAA 4,860 4,935 Massachusetts St. Hlth. & Ed. Fac. Au. Rev. (New England Med. Ctr. Hosp.), Ser. 2002 H, 5.38%, due 5/15/16 AAA 5,492++ 2,140 Mt. Pleasant Town (SC) Waterworks & Swr. Sys. Ref. & Imp. Rev., Ser. 2002, 5.25%, due 12/1/17 AAA 2,392 2,080 Oakland (CA) Redev. Agcy. Sub. Tax Allocation Rev. (Central Dist. Redev. Proj.), Ser. 2003, 5.50%, due 9/1/18 AAA 2,329 8,140 Orange Co. (FL) Sales Tax Ref. Rev., Ser. 2002 A, 5.13%, due 1/1/18 Aaa AAA 8,879 2,000 Philadelphia (PA) Arpt. Ref. Rev. (Philadelphia Arpt. Sys.), Ser. 1998 A, 5.38%, due 6/15/14 AAA 2,176 6,250 Port of Seattle (WA) Sub Lien Rev., Ser. 2002 B, 5.50%, due 9/1/16 AAA 6,861
14
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED) $ 5,500 Prince Georges Co. (MD) Cons. Pub. Imp. G.O., Ser. 2001, 5.25%, due 12/1/16 Aaa AAA $ 6,110 1,000 Sarasota Co. (FL) Util. Sys. Ref. Rev., Ser. 2002 C, 5.25%, due 10/1/20 Aaa AAA 1,099 2,500 Tacoma (WA) Wtr. Sys. Rev., Ser. 2001, 5.13%, due 12/1/19 AAA 2,733 FINANCIAL SECURITY ASSURANCE INC. 3,495 Bi State (MO-IL) Dev. Agcy. Metro. Dist. Rev. (Metrolink Cross Co. Extension Proj.), Ser. 2002 B, 5.25%, due 10/1/16 Aaa AAA 3,892 1,100 Charleston Co. (SC) Sch. Dist. G.O., Ser. 2001, 5.00%, due 2/1/18 Aa1 1,182 3,600 Corpus Christi (TX) Tax & Muni. Hotel Occupancy Tax G.O., Ser. 2002, 5.50%, due 9/1/17 AAA 4,082 1,935 Dallas-Fort Worth (TX) Int'l. Arpt. Imp. Rev., Ser. 2004 B, 5.50%, due 11/1/18 Aaa AAA 2,130 8,800 Energy Northwest (WA) Elec. Ref. Rev. (Proj. No. 3), Ser. 2001 A, 5.50%, due 7/1/17 Aaa AAA 9,881 7,000 Harris Co. (TX) Toll Road Sr. Lien Ref. Rev., Ser. 2002, 5.38%, due 8/15/16 AAA 7,873 2,580 Indianapolis (IN) Local Pub. Imp. Rev. (Indianapolis Arpt. Au. Proj.), Ser. 2003 A, 5.63%, due 1/1/17 AAA 2,847 2,000 Kane, Cooke, & DuPage Cos. (IL) Elgin Sch. Dist. Number U-46 G.O., Ser. 1998, 5.35%, due 1/1/15 Aaa 2,222 5,000 King & Snohomish Cos. (WA) Northshore Sch. Dist. Number 417 G.O., Ser. 2002, 5.50%, due 12/1/17 Aaa AAA 5,665 4,260 King Co. (WA) Pub. Trans. Sales Tax Ref. G.O., Ser. 2002, 5.38%, due 12/1/14 Aaa AAA 4,853 3,015 Knox Co. (TN) Hlth., Ed., & Hsg. Fac. Board Hosp. Ref. & Imp. Rev., Ser. 2002 A, 5.50%, due 1/1/18 Aaa AAA 3,325++ 1,725 Maine Muni. Bond Bank Rev., Ser. 1998 C, 5.35%, due 11/1/18 AAA 1,904 5,000 New Jersey Bldg. Au. St. Bldg. Ref. Rev., Ser. 2002 B, 5.25%, due 12/15/15 AAA 5,618 4,665 South Carolina St. Pub. Svc. Au. Rev., Ser. 2002 B, 5.38%, due 1/1/18 Aaa AAA 5,218 4,200 Tarrant (TX) Reg. Wtr. Dist. Wtr. Ref. & Imp. Rev., Ser. 2002, 5.38%, due 3/1/16 Aaa AAA 4,685 5,395 Truckee Meadows (NV) Wtr. Au. Wtr. Rev., Ser. 2001 A, 5.50%, due 7/1/15 AAA 6,052 1,370 Wisconsin Hlth. & Ed. Fac. Au. Rev. (Aurora Med. Group, Inc. Proj.), Ser. 1996, 6.00%, due 11/15/11 Aaa AAA 1,596++ MUNICIPAL BOND INVESTORS ASSURANCE CORP. 1,465 Arizona St. Energy Mgt. Svcs. (Main) LLC Energy Conservation Rev. (Arizona St. Univ. Proj.-Main Campus), Ser. 2002, 5.25%, due 7/1/17 AAA 1,632 3,000 CDP-King Co. III (WA) Lease Rev. (King Street Ctr. Proj.), Ser. 1997, 5.13%, due 6/1/17 Aaa AAA 3,113 5,335 Clark Co. (NV) Passenger Fac. Charge Ref. Rev. (Las Vegas-McCarran Int'l. Arpt. Proj.), Ser. 2002 A, 5.25%, due 7/1/10 AAA 5,834 4,575 Henry Co. (GA) Wtr. & Swr. Au. Wtr. & Swr. Ref. Rev., Ser. 2002 A, 5.13%, due 2/1/17 Aaa AAA 5,078 4,955 Houston (TX) Pub. Imp. Ref. G.O., Ser. 2002, 5.25%, due 3/1/17 AAA 5,492 5,000 Illinois G.O., First Ser. 2002, 5.25%, due 10/1/14 Aaa 5,623
See Notes to Schedule of Investments 15
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED) $ 3,000 Illinois Hlth. Fac. Au. Rev. (Loyola Univ. Hlth. Sys.), Ser. 1997 A, 6.00%, due 7/1/14 Aaa AAA $ 3,544++ 1,000 Indiana Muni. Pwr. Agcy. Pwr. Supply Sys. Rev., Ser. 2002 B, 5.25%, due 1/1/18 Aaa AAA 1,091 1,850 Massachusetts St. G.O., Ser. 2002 E, 5.38%, due 1/1/18 AAA 2,100 5,000 Michigan St. Hsg. Dev. Au. Single-Family Mtge. Rev., Ser. 2001 A, 5.30%, due 12/1/16 AAA 5,306 2,710 Newnan (GA) Hosp. Au. Rev. Anticipation Certificate (Newnan Hosp., Inc. Proj.), Ser. 2002, 5.50%, due 1/1/18 Aaa 3,015++ 1,910 Southmost (TX) Reg. Wtr. Au. Wtr. Supply Contract Rev. (Desalination Plant Proj.), Ser. 2002, 5.50%, due 9/1/19 Aaa 2,153 1,000 Trinity (TX) River Au. Imp. & Ref. Rev. (Tarrant Co. Wtr. Proj.), Ser. 2003, 5.50%, due 2/1/16 AAA 1,134 4,555 Washington St. G.O., Ser. 1998 C, 6.00%, due 7/1/12 AAA 5,376 7,205 Wisconsin St. G.O., Ser. 2002 C, 5.25%, due 5/1/17 Aaa AAA 8,017 ---------- 233,810 ---------- TAX-EXEMPT SECURITIES--OTHER (78.3%) 4,145 Anson (TX) Ed. Fac. Corp. Std. Hsg. Rev. (Univ. of Texas at Dallas-Waterview Park Proj.), Ser. 2002, 5.00%, due 1/1/23 A 4,191++ 1,000 Austin (TX) Convention Enterprises, Inc. Convention Ctr. Hotel First Tier Rev., Ser. 2001 A, 6.38%, due 1/1/16 Baa3 BBB- 1,049 1,645 Badger (WI) Tobacco Asset Securitization Corp. Tobacco Settlement Asset-Backed Rev., Ser. 2002, 6.13%, due 6/1/27 Baa3 BBB 1,595 2,000 Boone Co. (MO) Hosp. Ref. Rev. (Boone Hosp. Ctr.), Ser. 2002, 5.05%, due 8/1/20 A3 2,064++ 2,425 Branson (MO) Dev. Fin. Board Infrastructure Fac. Board Rev., Ser. 2003 A, 5.00%, due 12/1/17 Baa1 2,531 3,300 Brazos (TX) River Au. Ref. PCR (TXU Energy Co. LLC Proj.), Ser. 2003 A, 6.75%, due 4/1/38 Putable 4/1/13 Baa2 BBB 3,749++ 1,000 Brazos (TX) River Au. Ref. PCR (TXU Energy Co. LLC Proj.), Ser. 2003 D, 5.40%, due 10/1/29 Putable 10/1/14 Baa2 1,057++ 1,000 Brazos (TX) River Au. Ref. Rev. (Reliant Energy, Inc. Proj.), Ser. 1999 B, 7.75%, due 12/1/18 Ba1 BBB- 1,095++ 4,000 Brazos (TX) River Harbor Navigation Dist. Env. Fac. Rev. (Dow Chemical Co. Proj.), Ser. 2002 B-2, 4.75%, due 5/15/33 Putable 5/15/07 A3 A 4,168++ 2,500 Broward Co. (FL) G.O., Ser. 2001 A, 5.25%, due 1/1/18 Aa1 2,767 3,500 California Poll. Ctrl. Fin. Au. Solid Waste Disp. Rev. (Republic Svc., Inc. Proj.), Ser. 2002 B, 5.25%, due 6/1/23 Baa3 BBB 3,704++ 2,500 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A, 5.75%, due 5/1/17 A3 BBB+ 2,836 3,460 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A, 5.38%, due 5/1/22 A3 BBB+ 3,737 1,240 California Statewide CDA Hlth. Fac. Rev. (Mem. Hlth. Svcs.), Ser. 2003 A, 6.00%, due 10/1/16 A3 A 1,379++ 1,500 California Statewide CDA Rev. (East Valley Tourist Dev. Au.), Ser. 2003 A, 9.25%, due 10/1/20 1,646^^ 1,500 Chicago (IL) Metro. Wtr. Reclamation Dist. Cap. Imp. G.O., Ser. 2002 C, 5.38%, due 12/1/16 AAA 1,698 1,000 Clark Co. (WA) Vancouver Sch. Dist. Number 37 G.O., Ser. 1998, 5.13%, due 12/1/12 A3 1,124 1,765 Cumberland Co. (PA) 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+ 1,881++
16
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED) $ 2,100 Dallas-Fort Worth (TX) Int'l. Arpt. Fac. Imp. Corp. Rev., Ser. 2004 A-1, 6.15%, due 1/1/16 Baa3 BBB- $ 2,100++ 4,210 DCH Hlth. Care Au. (AL) Hlth. Care Fac. Rev., Ser. 2002, 5.25%, due 6/1/14 A1 A+ 4,530 1,000 Delaware River (PA-NJ) Joint Toll Bridge Comm. Sys. Rev., Ser. 2003, 5.25%, due 7/1/18 A2 A- 1,088 1,000 Denton, Tarrant, & Wise Cos. (TX) Northwest Ind. Sch. Dist. Unlimited Sch. Bldg. & Ref. G.O., Ser. 2002, 5.50%, due 8/15/17 AAA 1,119 2,000 Denver (CO) City & Co. Arpt. Sys. Rev., Ser. 1991 D, 7.75%, due 11/15/13 AAA 2,467 4,495 Dist. of Columbia (Washington, D.C.) Ref. G.O., Ser. 2002 C, 5.25%, due 6/1/13 AAA 4,995 1,750 Ector Co. (TX) Hosp. Dist. Hosp. Rev., Ser. 2002 A, 5.63%, due 4/15/16 A2 A- 1,828 1,745 Ector Co. (TX) Hosp. Dist. Hosp. Rev., Ser. 2002 A, 5.63%, due 4/15/17 A2 A- 1,816 3,000 Fiddlers Creek (FL) Comm. Dev. Dist. Number 2 Spec. Assessment Rev., Ser. 2003 A, 6.00%, due 5/1/16 BB- 3,056 825 Fort Bend Co. (TX) Ind. Dev. Corp. Ref. PCR (Frito-Lay, Inc. Proj.), Ser. 1987, 3.00%, due 10/1/11 A1 833++ 2,000 Freeborn Co. (MN) Hsg. & Redev. Au. Lease Rev. (Criminal Justice Ctr. Proj.), Ser. 2002, 5.38%, due 2/1/17 Baa1 2,111 3,000 Golden St. (CA) Tobacco Securitization Corp. Tobacco Settlement Asset-Backed Rev., Ser. 2003 A-1, 6.25%, due 6/1/33 Baa3 BBB 2,862 5,130 Illinois Ed. Fac. Au. Rev. (Field Museum of Natural History), Ser. 2002, 4.30%, due 11/1/36 A2 A 5,234++ 3,560 Indiana Bond Bank Rev., Ser. 2002 B, 5.25%, due 2/1/18 Baa2 A- 3,886 10,000 Indiana Bond Bank Rev. (St. Revolving Fund Prog.), Ser. 2001 A, 5.38%, due 2/1/17 AAA 11,127 2,050 Indiana St. Hlth. Fac. Fin. Au. Rev. (Hlth. Sys. Sisters of St. Francis), Ser. 2001, 5.35%, due 11/1/15 Aa3 A 2,219++ 1,070 Ingham & Clinton Cos. (MI) East Lansing Bldg. Au. Ref. G.O., Ser. 1999, 5.25%, due 10/1/16 AA 1,177 3,000 Iowa Tobacco Settlement Au. Tobacco Settlement Asset-Backed Rev., Ser. 2001 B, 5.30%, due 6/1/25 Baa3 BBB 2,537 2,000 Jasper (IN) Hosp. Au. Hosp. Fac. Ref. Rev. (Mem. Hosp. & Hlth. Care Ctr. Proj.), Ser. 2002, 5.50%, due 11/1/17 AA 2,189++ 1,050 Kent Co. (MI) Forest Hills Pub. Sch. Unlimited G.O., Ser. 2000, 5.25%, due 5/1/19 Aa2 1,159 2,000 Lehigh Co. (PA) Gen. Purp. Au. Rev. (KidsPeace Oblig. Group), Ser. 1998, 6.00%, due 11/1/23 Ba2 1,739++ 2,000 Lubbock (TX) Hlth. Fac. Dev. Corp. Rev. (St. Joseph Hlth. Sys.), Ser. 1998, 5.25%, due 7/1/16 Aa3 AA- 2,093++ 1,310 Lyons (NY) Comm. Hlth. Initiatives Corp. Fac. Rev., Ser. 2004, 5.50%, due 9/1/14 A2 1,437 1,375 Macomb Co. (MI) New Haven Comm. Sch. Bldg. & Site G.O., Ser. 2002, 5.25%, due 5/1/17 Aa1 AA+ 1,530 1,000 Martin Co. (NC) Ind. Fac. & Poll. Ctrl. Fin. Au. Solid Waste Disp. Rev. (Weyerhaeuser Co. Proj.), Ser. 1994, 6.80%, due 5/1/24 Baa2 BBB 1,025++ 1,000 Maryland St. Hlth. & Higher Ed. Fac. Au. Rev. (Union Hosp. of Cecil Co.), Ser. 2002, 5.50%, due 7/1/14 A3 1,099++
See Notes to Schedule of Investments 17
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED) $ 2,400 Mashantucket (CT) Western Pequot Tribe Spec. Rev., Sub. Ser. 1997 B, 5.70%, due 9/1/12 Baa3 $ 2,571** 2,450 Massachusetts St. Hlth. & Ed. Fac. Au. Rev. (Caritas Christi Oblig. Group), Ser. 1999 A, 5.70%, due 7/1/15 BBB 2,535++ 2,810 Massachusetts St. Hlth. & Ed. Fac. Au. Rev. (Milford-Whitinsville Reg. Hosp.), Ser. 1998 C, 5.75%, due 7/15/13 Baa2 BBB 2,931++ 5,030 Massachusetts St. Wtr. Poll. Abatement Trust Rev. (MWRA Prog.), Ser. 2002 A, 5.25%, due 8/1/19 Aaa AAA 5,583 2,775 Massachusetts St. Wtr. Poll. Abatement Trust Unrefunded Balance Rev. (Pool Prog.), Ser. 2001, 5.25%, due 2/1/16 Aaa AAA 3,079 3,085 Memphis-Shelby Co. (TN) Arpt. Au. Spec. Fac. Ref. Rev. (Federal Express Corp.), Ser. 2002, 5.05%, due 9/1/12 Baa2 BBB 3,317++ 1,750 Miami Beach (FL) Hlth. Fac. Au. Hosp. Ref. Rev. (Mount Sinai Med. Ctr. Florida Proj.), Ser. 2004, 6.25%, due 11/15/09 Ba2 BB 1,801++ 1,500 Michigan St. Bldg. Au. Rev. (Fac. Prog.), Ser. 2001 II, 5.50%, due 10/15/18 Aa1 AA+ 1,687 2,735 Michigan Strategic Fund Solid Waste Disp. Ltd. Oblig. Ref. Rev. (Waste Mgt. Inc. Proj.), Ser. 2002, 4.20%, due 12/1/12 BBB 2,774++ 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 2,265 1,115 Missouri St. Hsg. Dev. Comm. Multi-Family Hsg. Rev., Ser. 2001 II, 5.25%, due 12/1/16 AA 1,198 775 Missouri St. Hsg. Dev. Comm. Multi-Family Hsg. Rev., Ser. 2001 III, 5.05%, due 12/1/15 AA 832 5,000 Montgomery Co. (PA) Higher Ed. & Hlth. Au. Hosp. Rev. (Abington Mem. Hosp. Proj.), Ser. 2002 A, 5.00%, due 6/1/19 A 5,180++ 3,000 Moraine (OH) Solid Waste Disp. Rev. (General Motors Corp. Proj.), Ser. 1994, 6.75%, due 7/1/14 A3 BBB 3,431++ 2,500 Morehouse Parish (LA) Ref. PCR (Int'l. Paper Co. Proj.), Ser. 2001 A, 5.25%, due 11/15/13 Baa2 BBB 2,696++ 2,000 MuniMae Subordinate Cumulative Perpetual Preferred Shares, 4.70%, due 6/30/49 Putable 9/30/09 Ba2 2,002 2,000 Nevada St. Cap. Imp. Ltd. G.O., Ser. 1998 B, 5.13%, due 4/15/17 Aa2 2,147 1,500 New Jersey Econ. Dev. Au. Cigarette Tax Rev., Ser. 2004, 5.63%, due 6/15/19 Baa2 BBB 1,582 6,900 New Jersey Ed. Fac. Au. Rev. (Stevens Institute of Technology), Ser. 2002 C, 5.25%, due 7/1/17 Baa1 A- 7,411++ 4,000 New Jersey Hlth. Care Fac. Fin. Au. Rev. (Somerset Med. Ctr. Issue), Ser. 2003, 5.50%, due 7/1/18 Baa2 4,191++ 3,250 New York City (NY) G.O., Ser. 2002 C, 5.50%, due 8/1/15 A2 3,624 2,580 New York City (NY) IDA Civic Fac. Rev. (Lycee Francais de New York Proj.), Ser. 2002 A, 5.50%, due 6/1/14 A 2,810++ 1,000 New York Convention Ctr. Operating Corp. Cert. of Participation (Yale Bldg. Acquisition Proj.), Ser. 2003, 5.25%, due 6/1/08 BB+ 1,032 3,500 New York St. Dorm. Au. Personal Income Tax Rev., Ser. 2003 A, 5.38%, due 3/15/20 AA 3,842 1,000 New York St. Dorm. Au. Rev. (Mount Sinai NYU Hlth. Oblig. Group), Ser. 2000 C, 6.00%, due 7/1/26 Baa3 1,003++ 1,300 New York St. Urban Dev. Corp. Ref. Rev. (Correctional Cap. Fac.), Ser. 1998, 5.00%, due 1/1/14 A3 AA- 1,374 4,780 North Central (TX) Hlth. Fac. Dev. Corp. Hosp. Ref. Rev. (Baylor Hlth. Care Sys. Proj.), Ser. 1998, 5.10%, due 5/15/13 Aa3 AA- 5,099++
18
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED) $ 3,760 Ohio Air Quality Dev. Au. Env. Imp. Ref. Rev. (USX Corp. Proj.), Ser. 1995, 5.00%, due 11/1/15 Baa1 $ 4,100++ 2,085 Palm Beach Co. (FL) Hlth. Fac. Au. Hosp. Ref. Rev. (BRCH Corp. Oblig. Group), Ser. 2001, 5.00%, due 12/1/12 A+ 2,230++ 3,850 Royal Oak (MI) Hosp. Fin. Au. Hosp. Ref. Rev. (William Beaumont Hosp.), Ser. 1996 I, 6.25%, due 1/1/12 Aa3 AA- 4,484++ 6,795 San Antonio (TX) Ind. Sch. Dist. Unlimited Tax G.O., Ser. 2001 B, 5.38%, due 8/15/17 Aaa AAA 7,559 1,240 San Antonio (TX) Unrefunded Balance Cert. of Obligation G.O., Ser. 2002, 5.00%, due 2/1/14 Aa2 AA+ 1,362 740 San Diego (CA) Redev. Agcy. Sub. Parking Rev. (Centre City Redev. Proj.), Ser. 2003 B, 5.00%, due 9/1/17 Baa2 A- 765 2,000 Sayre (PA) Hlth. Care Fac. Au. Rev. (Guthrie Hlth. Proj.), Ser. 2002 A, 5.75%, due 12/1/21 A- 2,133++ 1,625 Skagit Co. (WA) Pub. Hosp. Dist. Ref. Rev., Ser. 2003, 6.00%, due 12/1/18 Baa3 1,689 2,345 South Carolina Jobs Econ. Dev. Au. Hosp. Ref. Rev. (Palmetto Hlth. Alliance), Ser. 2003 A, 6.00%, due 8/1/13 Baa2 BBB 2,599++ 2,000 South Carolina Jobs Econ. Dev. Au. Hosp. Ref. Rev. (Palmetto Hlth. Alliance), Ser. 2003 A, 6.13%, due 8/1/23 Baa2 BBB 2,128++ 155 Spokane Co. (WA) Ltd. Tax G.O., Ser. 1998, 5.10%, due 12/1/17 Aa3 166 2,540 St. Paul (MN) Port Au. Lease Rev. (Office Bldg. at Cedar Street), Ser. 2002, 5.00%, due 12/1/17 Aa1 2,745 500 Texas Std. Hsg. Corp. Std. Hsg. Rev. (Midwestern St. Univ. Proj.), Ser. 2002, 5.50%, due 9/1/12 Baa3 516 1,000 Tobacco Settlement Fin. Corp. (LA) Tobacco Settlement Asset-Backed Rev., Ser. 2001 B, 5.50%, due 5/15/30 Baa3 BBB 892 1,085 Tyler (TX) Hlth. Fac. Dev. Corp. Hosp. Rev. (Mother Frances Hosp. Reg. Hlth. Care Ctr. Proj.), Ser. 2003, 5.25%, due 7/1/13 Baa1 1,151 3,500 Union Co. (SC) IDR (Federal Paper Board Co., Inc. Proj.), Ser. 1989, 4.55%, due 11/1/09 Baa2 BBB 3,651++ 2,950 Univ. of Texas Board of Regents Fin. Sys. Rev., Ser. 1999 B, 5.38%, due 8/15/18 AAA 3,310 1,900 Univ. of Wisconsin Hosp. & Clinics Au. Hosp. Rev., Ser. 2002 B, 5.50%, due 4/1/12 A1 2,079 1,750 Verrado (AZ) Comm. Fac. Dist. Number 1 G.O., Ser. 2003, 6.15%, due 7/15/17 BB- 1,786 1,000 Virgin Islands Pub. Fin. Au. Refinery Fac. Rev. (Hovensa Refinery Proj.), Ser. 2003, 6.13%, due 7/1/22 Baa3 BBB- 1,073 1,500 Virgin Islands Pub. Fin. Au. Refinery Fac. Rev. (Hovensa Refinery Proj.), Ser. 2004, 5.88%, due 7/1/22 Baa3 BBB- 1,587++ 3,125 Washington St. Hlth. Care Fac. Au. Rev. (Yakima Valley Mem. Hosp. Assoc.), Ser. 2002, 5.00%, due 12/1/17 A 3,241++ 1,000 Washington St. Var. Purp. G.O., Ser. 1999 A, 4.75%, due 7/1/17 Aa1 AA+ 1,057 2,000 Westmoreland Co. (PA) IDA Gtd. Rev. (National Waste & Energy Corp., Valley Landfill Expansion Proj.), Ser. 1993, 5.10%, due 5/1/18 BBB 2,109++ 2,780 Wisconsin St. Hlth. & Ed. Fac. Au. Rev. (Kenosha Hosp. & Med. Ctr., Inc. Proj.), Ser. 1999, 5.50%, due 5/15/15 A 2,924++ ---------- 244,860 ---------- TAX-EXEMPT VARIABLE RATE DEMAND NOTES--BACKED BY INSURANCE (0.3%) MUNICIPAL BOND INVESTORS ASSURANCE CORP. 1,000 California Hsg. Fin. Agcy. Home Mtge. Rev., Ser. 2003 U, 1.76%, VRDN due 11/1/04 VMIG1 A-1+ 1,000 ----------
See Notes to Schedule of Investments 19
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED) TAX-EXEMPT VARIABLE RATE DEMAND NOTES--OTHER (0.5%) $ 200 Valdez (AK) Marine Term. Ref. Rev. (BP Pipelines Inc. Proj.), Ser. 2003 B, 1.74%, VRDN due 11/1/04 VMIG1 A-1+ $ 200++ 1,200 Will Co. (IL) Exempt Fac. Ind. Rev. (BP Amoco Chemical Co. Proj.), Ser. 2002, 1.79%, VRDN due 11/1/04 VMIG1 A-1+ 1,200++ ---------- 1,400 ---------- TOTAL INVESTMENTS (155.2%) (COST $466,443) 485,582## Cash, receivables and other assets, less liabilities (2.2%) 6,629 Liquidation Value of Auction Market Preferred Shares [(57.4%)] (179,400) ---------- TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS (100.0%) $ 312,811 ----------
20 SCHEDULE OF INVESTMENTS New York Intermediate Municipal Fund Inc.
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED) TAX-EXEMPT SECURITIES--BACKED BY INSURANCE (34.3%) AMERICAN CAPITAL ACCESS $ 1,060 Puerto Rico Ind., Tourist, Ed., Med., & Env. Ctrl. Fac. Rev., (Polytechnic Univ. of Puerto Rico Proj.), Ser. 2002 A, 5.25%, due 8/1/16 A $ 1,123++ AMERICAN MUNICIPAL BOND ASSURANCE CORP. 2,000 Metro. Trans. Au. (NY) Ref. Rev., Ser. 2002 A, 5.50%, due 11/15/15 AAA 2,263 2,920 New York City (NY) IDA Civic Fac. Rev. (Packer Collegiate Institute Proj.), Ser. 2002, 5.00%, due 6/1/22 Aaa AAA 3,086++ 960 New York City (NY) Muni. Wtr. Fin. Au. Wtr. & Swr. Sys. Rev., Ser. 1992 A, 5.88%, due 6/15/13 Aaa 1,133 2,025 New York City (NY) Trans. Fin. Au. Ref. Rev., Ser. 2002 C, 5.25%, due 8/1/17 AAA 2,231 2,410 New York St. Dorm. Au. Rev. (Rochester Institute of Technology Proj.), Ser. 2002 A, 5.25%, due 7/1/19 Aaa 2,634++ 3,000 Port Authority of NY & NJ Rev., Ser. 2002, 5.50%, due 12/15/12 AAA 3,379 1,535 Ulster Co. (NY) Res. Rec. Agcy. Solid Waste Sys. Ref. Rev., Ser. 2002, 5.25%, due 3/1/16 AAA 1,685 FINANCIAL GUARANTY INSURANCE CO. 2,505 Metro. Trans. Au. (NY) Dedicated Tax Fund Rev., Ser. 2001 A, 5.25%, due 11/15/14 AAA 2,812 FINANCIAL SECURITY ASSURANCE INC. 500 Long Island (NY) Pwr. Au. Elec. Sys. Rev., Ser. 1998 A, 5.13%, due 12/1/16 Aaa AAA 544 1,410 New York City (NY) Hlth. & Hosp. Corp. Rev., Ser. 2002 A, 5.50%, due 2/15/13 AAA 1,597 MUNICIPAL BOND INVESTORS ASSURANCE CORP. 2,000 New York St. Dorm. Au. Insured Rev. (Long Island Jewish Med. Ctr.), Ser. 1998, 5.00%, due 7/1/18 AAA 2,088++ 1,600 New York St. Dorm. Au. Insured Rev. (The Culinary Institute of America), Ser. 1999, 5.38%, due 7/1/15 AAA 1,782++ 1,980 New York St. Dorm. Au. Rev. (New York Med. College Proj.), Ser. 1998, 5.00%, due 7/1/21 Aaa AAA 2,121++ ---------- 28,478 ---------- TAX-EXEMPT SECURITIES--OTHER (121.5%) 3,000 Albany (NY) IDA Civic Fac. Rev., (Charitable Leadership Foundation Ctr. for Med. Science Proj.), Ser. 2002 A, 6.00%, due 7/1/19 Baa3 3,241 800 Brazos (TX) River Au. Ref. PCR (TXU Energy Co. LLC Proj.), Ser. 2003 A, 6.75%, due 4/1/38 Putable 4/1/13 Baa2 BBB 909 750 Brazos (TX) River Au. Ref. Rev. (Reliant Energy, Inc. Proj.), Ser. 1999 B, 7.75%, due 12/1/18 Ba1 BBB- 821++ 1,000 Brazos (TX) River Harbor Navigation Dist. of Brazoria Co. Env. Fac. Rev. (Dow Chemical Co. Proj.), Ser. 2002 A-4, 5.20%, due 5/15/33 Putable 5/15/08 A3 A 1,066++ 1,590 Cumberland Co. (PA) 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+ 1,700++ 400 Dallas-Fort Worth (TX) Int'l. Arpt. Fac. Imp. Corp. Rev., Ser. 2004 A-1, 6.15%, due 1/1/16 Baa3 BBB- 400++ 1,000 De Kalb Co. (GA) Dev. Au. Ref. PCR (General Motors Corp. Proj.), Ser. 2002, 6.00%, due 3/15/21 A3 BBB 1,077++ 1,000 Dutchess Co. (NY) IDA Civic Fac. Ref. Rev. (Marist College Proj.), Ser. 2003 A, 5.15%, due 7/1/17 Baa1 1,065++
See Notes to Schedule of Investments 21
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED) $ 2,000 Dutchess Co. (NY) IDA Ind. Dev. Rev. (IBM Proj.), Ser. 1999, 5.45%, due 12/1/29 A1 A+ $ 2,197++ 2,000 Long Island Pwr. Au. (NY) Elec. Sys. Gen. Rev., Ser. 1998 A, 5.50%, due 12/1/13 Aaa AAA 2,336 1,500 Lyons (NY) Comm. Hlth. Initiatives Corp. Fac. Rev., Ser. 2004, 5.50%, due 9/1/14 A2 1,646 500 Miami Beach (FL) Hlth. Fac. Au. Hosp. Ref. Rev. (Mount Sinai Med. Ctr. of Florida Proj.), Ser. 2004, 6.25%, due 11/15/09 Ba2 BB 515++ 980 Monroe Co. (NY) IDA Std. Hsg. Rev., (Collegiate Hsg. Foundation - Rochester Institute of Technology Proj.), Ser. 1999 A, 5.25%, due 4/1/19 Baa3 980++ 1,000 Monroe Co. (NY) Newpower Corp. Pwr. Fac. Rev., Ser. 2003, 5.10%, due 1/1/16 BBB+ 1,067 1,000 Monroe Co. (NY) Pub. Imp. Ref. G.O., Ser. 1996, 6.00%, due 3/1/13 A3 AA- 1,165 1,000 Morehouse Parish (LA) Ref. PCR (Int'l. Paper Co. Proj.), Ser. 2001 A, 5.25%, due 11/15/13 Baa2 BBB 1,078++ 1,000 New York City (NY) G.O., Ser. 1998 J, 5.00%, due 8/1/11 A2 A 1,067 1,000 New York City (NY) G.O., Ser. 2002 A, 5.75%, due 8/1/16 A2 A 1,121 750 New York City (NY) G.O., Ser. 2002 C, 5.50%, due 8/1/15 A2 836 4,000 New York City (NY) Hsg. Dev. Corp. Multi-Family Hsg. Rev., Ser. 2002 E-2, 5.05%, due 11/1/23 Aa2 AA 4,111 1,000 New York City (NY) IDA Civic Fac. Rev. (Lycee Francais de New York Proj.), Ser. 2002 A, 5.50%, due 6/1/15 A 1,084++ 1,030 New York City (NY) IDA Civic Fac. Rev. (Lycee Francais de New York Proj.), Ser. 2002 A, 5.50%, due 6/1/17 A 1,106++ 1,000 New York City (NY) IDA Ind. Dev. Rev. (Brooklyn Navy Yard Cogeneration Partners, L.P. Proj.), Ser. 1997, 6.20%, due 10/1/22 Ba1 BBB- 1,002 500 New York City (NY) IDA Ind. Dev. Rev. (Harlem Auto Mall Proj.), Ser. 2004, 5.13%, due 12/30/23 Baa1 BBB 500++ 4,000 New York City (NY) Muni. Wtr. Fin. Au. Wtr. & Swr. Sys. Rev., Ser. 2002 D, 5.25%, due 6/15/15 Aa2 AA 4,456 3,000 New York City (NY) Trans. Fin. Au. Ref. Rev., Ser. 2002 B, 5.25%, due 2/1/29 Aa2 3,311 800 New York Convention Ctr. Operating Corp. Cert. of Participation (Yale Bldg. Acquisition Proj.), Ser. 2003, 5.25%, due 6/1/08 Aa1 826 2,000 New York St. Dorm. Au. Court Fac. Lease Rev. (New York City Issue), Ser. 2003 A, 5.50%, due 5/15/17 A3 A 2,217 1,675 New York St. Dorm. Au. Insured Rev. (Long Island Univ.), Ser. 2003 A, 5.25%, due 9/1/15 AA 1,838++ 3,000 New York St. Dorm. Au. Ref. Rev. (North Gen. Hosp. Proj.), Ser. 2003, 5.75%, due 2/15/17 AA- 3,374++ 1,125 New York St. Dorm. Au. Rev. (City Univ. Sys. Proj.), Ser. 1995 A, 5.63%, due 7/1/16 A3 AA- 1,311 1,010 New York St. Dorm. Au. Rev. (Columbia Univ. Proj.), Ser. 2001 A, 5.25%, due 7/1/16 AAA 1,118++ 2,985 New York St. Dorm. Au. Rev. (Lenox Hill Hosp. Oblig. Group Proj.), Ser. 2001, 5.75%, due 7/1/14 A3 3,278++ 2,000 New York St. Dorm. Au. Rev. (Lenox Hill Hosp. Oblig. Group Proj.), Ser. 2001, 5.75%, due 7/1/16 A3 A- 2,171++ 2,500 New York St. Dorm. Au. Rev. (Mount Sinai NYU Hlth. Oblig. Group), Ser. 2000 B, 6.25%, due 7/1/22 Baa3 2,510++ 525 New York St. Dorm. Au. Rev. (New York Methodist Hosp.), Ser. 2004, 5.25%, due 7/1/18 A3 566
22
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ 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 $ 521++ 2,855 New York St. Dorm. Au. Rev. (Rivington House Hlth. Care Fac.), Ser. 2002, 5.25%, due 11/1/15 Aa1 3,155++ 3,000 New York St. Dorm. Au. Rev. (SS Joachim & Anne Residence Proj.), Ser. 2002, 4.60%, due 7/1/16 Aa3 3,101 250 New York St. Dorm. Au. Secured Hosp. Ref. Rev. (Brookdale Hosp. Med. Ctr.), Ser. 1998 J, 5.20%, due 2/15/16 A3 AA- 263++ 5,500 New York St. Dorm. Au. St. Personal Income Tax Rev., Ser. 2003 A, 5.38%, due 3/15/17 AA 6,112 1,000 New York St. Dorm. Au. Third Gen. Resolution Rev. (St. Univ. Ed. Fac. Issue Proj.), Ser. 2002 B, 5.25%, due 11/15/23 A3 AA- 1,111 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+ 5,042++ 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 1,035 2,000 New York St. Mtge. Agcy. Homeowner Mtge. Rev., Ser. 1997-67, 5.70%, due 10/1/17 Aa1 2,095 2,000 New York St. Pwr. Au. Rev., Ser. 2002 A, 5.25%, due 11/15/16 Aa2 AA- 2,215 500 New York St. Urban Dev. Corp. Correctional & Youth Fac. Svc. Rev., Ser. 2002 C, 4.00%, due 1/1/20 AA- 517 1,325 New York St. Urban Dev. Corp. Proj. Ref. Rev. (Ctr. for Ind. Innovation), Ser. 1995, 6.25%, due 1/1/09 A3 AA- 1,511 2,000 Niagara Co. (NY) IDA Civic Fac. Rev. (Niagara Univ. Proj.), Ser. 2001 A, 5.50%, due 11/1/16 AA 2,188++ 2,500 Niagara Co. (NY) IDA Solid Waste Disp. Fac. Ref. Rev. (American Ref.-Fuel Co. of Niagara), Ser. 2001 C, 5.63%, due 11/15/24 Baa1 BBB 2,680 945 Puerto Rico Children's Trust Tobacco Settlement Asset-Backed Rev., Ser. 2002, 5.38%, due 5/15/33 Baa3 BBB 864 1,000 Santa Rosa (CA) Rancheria Tachi Yokut Tribe Enterprise Rev., Ser. 2003, 6.13%, due 3/1/13 BBB 1,004 1,000 Tobacco Settlement Fin. Corp. (LA) Tobacco Settlement Asset-Backed Rev., Ser. 2001 B, 5.50%, due 5/15/30 Baa3 BBB 892 3,000 Triborough Bridge & Tunnel Au. (NY) Gen. Purp. Ref. Rev., Ser. 2002 B, 5.25%, due 11/15/18 Aa3 AA- 3,338 500 United Nations (NY) Dev. Corp. Sr. Lien Ref. Rev., Ser. 2004 A, 5.25%, due 7/1/17 A3 529 500 Verrado (AZ) Comm. Fac. Dist. Number 1 G.O., Ser. 2003, 6.15%, due 7/15/17 BB- 510 250 Virgin Islands Pub. Fin. Au. Refinery Fac. Rev. (Hovensa Refinery Proj.), Ser. 2003, 6.13%, due 7/1/22 Baa3 BBB- 268 750 Virgin Islands Pub. Fin. Au. Rev. (Sub. Lien/Cap. Proj.), Ser. 1998 E, 6.00%, due 10/1/22 BBB 772 1,000 Westchester Co. (NY) IDA Continuing Care Retirement Comm. Rev. (Kendal on Hudson Proj.), Ser. 2003 B, 5.70%, due 1/1/34 BB 1,030++ 1,000 Yonkers (NY) IDA Civic Fac. Rev. (Comm. Dev. Properties - Yonkers, Inc.), Ser. 2001 A, 6.25%, due 2/1/16 Baa3 BBB- 1,094++ ---------- 100,913 ----------
See Notes to Schedule of Investments 23
PRINCIPAL AMOUNT RATING * VALUE + (000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED) TAX-EXEMPT VARIABLE RATE DEMAND NOTES--BACKED BY LETTERS OF CREDIT (0.1%) MORGAN GUARANTY TRUST CO. $ 100 New York City (NY) G.O., Sub.Ser. 1993 E-2, 1.70%, VRDN due 11/1/04 VMIG1 A-1+ $ 100 ---------- TOTAL INVESTMENTS (155.9%) (COST $125,152) 129,491## Cash, receivables and other assets, less liabilities (2.2%) 1,829 Liquidation Value of Auction Market Preferred Shares [(58.1%)] (48,250) ---------- TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS (100.0%) $ 83,070 ----------
24 NEUBERGER BERMAN OCTOBER 31, 2004 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", 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 requiring daily quotations, bid prices are obtained from principal market makers in those securities or, if quotations are not available, by a method the Board of Directors of California, Intermediate, and New York, believes accurately reflects fair value. Numerous factors may be considered when determining the fair value of a security, including available analyst, media or other reports, trading in futures or ADRs and whether the issuer of the security being fair valued has other securities outstanding. 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, 2004, 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 $ 153,401 $ 5,950 $ 92 $ 5,858 INTERMEDIATE 466,443 19,562 423 19,139 NEW YORK 125,152 4,402 63 4,339
@ 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 79%, 74%, and 54% 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. ** Security exempt from registration under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers under Rule 144A and are deemed liquid. At October 31, 2004, these securities amounted to $2,571,000 or 0.8% of net assets for Intermediate. * Credit ratings are unaudited. ^^ Not rated by a nationally recognized statistical rating organization. See Notes to Financial Statements 25 NEUBERGER BERMAN OCTOBER 31, 2004 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 $ 159,259 $ 485,582 $ 129,491 Cash 15 54 93 Interest receivable 2,470 7,964 2,118 Prepaid expenses and other assets 178 409 146 ============================================================================================================================ TOTAL ASSETS 161,922 494,009 131,848 ============================================================================================================================ LIABILITIES Dividends payable--preferred shares 73 219 60 Dividends payable--common shares 424 1,372 362 Payable to administrator (Note B) 40 121 32 Accrued expenses and other payables 75 86 74 ============================================================================================================================ TOTAL LIABILITIES 612 1,798 528 ============================================================================================================================ AUCTION MARKET PREFERRED SHARES SERIES A & B AT LIQUIDATION VALUE 3,000, 8,000 and 3,000 shares authorized; 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 $ 102,310 $ 312,811 $ 83,070 ============================================================================================================================ NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS CONSIST OF: Paid-in capital--common shares $ 96,347 $ 293,853 $ 79,063 Undistributed net investment income (loss) 449 904 245 Accumulated net realized gains (losses) on investments (344) (1,085) (577) Net unrealized appreciation (depreciation) in value of investments 5,858 19,139 4,339 ============================================================================================================================ NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS AT VALUE $ 102,310 $ 312,811 $ 83,070 ============================================================================================================================ 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 5,575 ============================================================================================================================ NET ASSET VALUE PER COMMON SHARE OUTSTANDING $ 15.06 $ 15.11 $ 14.90 ============================================================================================================================ *COST OF INVESTMENTS $ 153,401 $ 466,443 $ 125,152 ============================================================================================================================
See Notes to Financial Statements 26 NEUBERGER BERMAN FOR THE YEAR ENDED OCTOBER 31, 2004 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: Interest income (Note A) $ 7,157 $ 22,066 $ 6,008 ============================================================================================================================ EXPENSES: Investment management fee (Notes A & B) 396 1,213 324 Administration fee (Note B) 475 1,455 389 Stock transfer agent fees 48 48 48 Auction agent fees (Note B) 150 456 123 Special rate period expense (Notes A & B) 47 161 38 Audit fees 40 40 40 Basic maintenance expense (Note B) 25 25 25 Custodian fees (Note B) 78 138 67 Insurance expense 4 12 3 Legal fees 34 71 31 Shareholder reports 20 58 18 Stock exchange listing fees 3 7 2 Directors' fees and expenses 25 26 25 Miscellaneous 2 5 4 ============================================================================================================================ Total expenses 1,347 3,715 1,137 Investment management fee waived (Note B) (396) (1,213) (324) ============================================================================================================================ Expenses reduced by custodian fee expense offset arrangement (Note B) (0) (1) (1) ============================================================================================================================ Total net expenses 951 2,501 812 ============================================================================================================================ Net investment income 6,206 19,565 5,196 ============================================================================================================================ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE A) Net realized gain (loss) on: Investment securities sold (274) (328) (157) ============================================================================================================================ Change in net unrealized appreciation (depreciation) in value of: Investment securities 4,830 13,555 2,797 ============================================================================================================================ Net gain (loss) on investments 4,556 13,227 2,640 DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM: Net investment income (859) (2,590) (704) ============================================================================================================================ NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS RESULTING FROM OPERATIONS $ 9,903 $ 30,202 $ 7,132 ============================================================================================================================
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) 2004 2003 INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS: FROM OPERATIONS: Net investment income (loss) $ 6,206 $ 5,744 Net realized gain (loss) on investments (274) (70) Change in net unrealized appreciation (depreciation) of investments 4,830 1,031 DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM: Net investment income (859) (551) ================================================================================================================================ Net increase (decrease) in net assets applicable to common shareholders resulting from operations 9,903 6,154 ================================================================================================================================ DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM: Net investment income (5,094) (5,094) ================================================================================================================================ FROM CAPITAL SHARE TRANSACTIONS: Net proceeds from underwriters' over-allotment option exercised -- 2,644 Proceeds from reinvestment of dividends -- -- Payments for preferred shares offering costs -- (744) ================================================================================================================================ Total net proceeds from capital share transactions -- 1,900 ================================================================================================================================ NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 4,809 2,960 NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS: Beginning of year 97,501 94,541 ================================================================================================================================ End of year $ 102,310 $ 97,501 ================================================================================================================================ Undistributed net investment income (loss) at end of year $ 449 $ 196 ================================================================================================================================
See Notes to Financial Statements 28
INTERMEDIATE MUNICIPAL FUND ------------------------------------------ YEAR YEAR ENDED ENDED NEUBERGER BERMAN INTERMEDIATE MUNICIPAL CLOSED-END FUNDS OCTOBER 31, OCTOBER 31, (000'S OMITTED) 2004 2003 INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS: FROM OPERATIONS: Net investment income (loss) $ 19,565 $ 18,172 Net realized gain (loss) on investments (328) (757) Change in net unrealized appreciation (depreciation) of investments 13,555 5,860 DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM: Net investment income (2,590) (1,773) ================================================================================================================================ Net increase (decrease) in net assets applicable to common shareholders resulting from operations 30,202 21,502 ================================================================================================================================ DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM: Net investment income (16,462) (16,450) ================================================================================================================================ FROM CAPITAL SHARE TRANSACTIONS: Net proceeds from underwriters' over-allotment option exercised -- 2,501 Proceeds from reinvestment of dividends -- 337 Payments for preferred shares offering costs -- (2,132) ================================================================================================================================ Total net proceeds from capital share transactions -- 706 ================================================================================================================================ NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 13,740 5,758 NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS: Beginning of year 299,071 293,313 ================================================================================================================================ End of year $ 312,811 $ 299,071 ================================================================================================================================ Undistributed net investment income (loss) at end of year $ 904 $ 391 ================================================================================================================================ NEW YORK INTERMEDIATE MUNICIPAL FUND ------------------------------------------ YEAR YEAR ENDED ENDED NEUBERGER BERMAN INTERMEDIATE MUNICIPAL CLOSED-END FUNDS OCTOBER 31, OCTOBER 31, (000'S OMITTED) 2004 2003 INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS: FROM OPERATIONS: Net investment income (loss) $ 5,196 $ 4,818 Net realized gain (loss) on investments (157) (420) Change in net unrealized appreciation (depreciation) of investments 2,797 1,501 DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM: Net investment income (704) (457) ================================================================================================================================ Net increase (decrease) in net assets applicable to common shareholders resulting from operations 7,132 5,442 ================================================================================================================================ DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM: Net investment income (4,348) (4,347) ================================================================================================================================ FROM CAPITAL SHARE TRANSACTIONS: Net proceeds from underwriters' over-allotment option exercised -- 3,074 Proceeds from reinvestment of dividends -- 37 Payments for preferred shares offering costs -- (626) ================================================================================================================================ Total net proceeds from capital share transactions -- 2,485 ================================================================================================================================ NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 2,784 3,580 NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS: Beginning of year 80,286 76,706 ================================================================================================================================ End of year $ 83,070 $ 80,286 ================================================================================================================================ Undistributed net investment income (loss) at end of year $ 245 $ 101 ================================================================================================================================
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", 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 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 a trade date basis. 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 dividends and capital gain distributions are determined in accordance with income tax regulations, which may differ from 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, 2004, there were no permanent differences resulting from different book and tax accounting reclassified at year end. The tax character of distributions paid during the years ended October 31, 2004 and 2003 were as follows:
DISTRIBUTIONS PAID FROM: TAX-EXEMPT INCOME ORDINARY INCOME TOTAL 2004 2003 2004 2003 2004 2003 CALIFORNIA $ 5,945,965 $ 5,621,479 $ 6,705 $ 23,102 $ 5,952,670 $ 5,644,581 INTERMEDIATE 19,015,689 18,151,315 35,236 71,380 19,050,925 18,222,695 NEW YORK 5,050,381 4,789,367 2,299 14,100 5,052,680 4,803,467
30 NEUBERGER BERMAN OCTOBER 31, 2004 As of October 31, 2004, 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 $ 946,699 $ -- $ -- $ 5,857,106 $ (343,321) $ 6,460,484 INTERMEDIATE 2,494,886 -- -- 19,138,670 (1,085,587) 20,547,969 NEW YORK 667,827 -- -- 4,339,348 (577,111) 4,430,064
The difference between book basis and tax basis is attributable primarily to timing differences of dividend 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, 2004, 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: 2011 2012 CALIFORNIA $ 69,587 $ 273,734 INTERMEDIATE 757,224 328,363 NEW YORK 420,475 156,636
5 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Each Fund earns income, net of expenses, daily on its investments. It is the policy of each Fund to declare and pay dividends to common shareholders from net investment income on a monthly basis. Distributions from net realized capital gains, if any, are normally distributed in December. Income dividends and capital gain distributions to common shareholders are recorded on the ex-dividend date. Dividends and distributions to preferred shareholders are accrued and determined as described in Note A-7. Subsequent to October 31, 2004, each Fund declared two monthly dividends to common shareholders from its net investment income payable December 15, 2004 and January 18, 2005, to shareholders of record on November 26, 2004 and December 27, 2004, respectively, with ex-dividend dates of November 23, 2004 and December 22, 2004, respectively, as follows:
DIVIDEND PER SHARE CALIFORNIA $ 0.06250 INTERMEDIATE 0.06625 NEW YORK 0.06500
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. 31 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 dividends, whether or not earned or declared by the Fund, but excluding interest thereon ("Liquidation Value"). Dividends to AMPS shareholders, which are cumulative, are accrued daily. It is the policy of each Fund to pay dividends 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, dividend rates are reset every 7 days for each Fund's AMPS Series A, based on the results of an auction. Each Fund has approved a special rate period for its AMPS Series A of 728 days for California and New York and 546 days for Intermediate. The effective dates and dividend rates for each Fund are as follows:
EFFECTIVE DATE DIVIDEND RATE CALIFORNIA October 23, 2003 1.70% INTERMEDIATE October 24, 2003 1.65% NEW YORK October 22, 2003 1.70%
In the absence of a special rate period, dividend rates are reset every 28 days for each Fund's AMPS Series B, based on the results of an auction. Each Fund has approved a special rate period for its AMPS Series B of 546 days for California and Intermediate and 553 days for New York. The effective dates and dividend rates for each Fund are as follows:
EFFECTIVE DATE DIVIDEND RATE CALIFORNIA March 11, 2004 1.170% INTERMEDIATE March 15, 2004 1.185% NEW YORK March 9, 2004 1.198%
The Funds declared dividends to AMPS shareholders for the period November 1, 2004 to November 30, 2004, for each series of the AMPS as follows:
SERIES A SHARES SERIES B SHARES CALIFORNIA $ 41,796 $ 28,768 INTERMEDIATE 123,355 88,588 NEW YORK 34,180 24,086
32 The Funds may redeem shares of each series of AMPS, in whole or in part, on the second business day preceding any dividend 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 stock as a single class, except that the AMPS will vote separately as a class on certain matters, as required by law or the Funds' 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 failed to pay dividends on AMPS for two consecutive years. 8 ORGANIZATION EXPENSES AND OFFERING COSTS: Management has agreed to pay all organizational expenses and the amount by which each Fund's offering costs for common stock (other than sales load) exceed $0.03 per share. The costs incurred by management were $261,029, $276,501, and $289,752 for California, Intermediate and New York, respectively. Offering costs for common stock paid by each Fund were charged as a reduction of common stock paid-in-capital at the completion of each Fund's offerings and amounted to $203,759, $620,459, and $167,159 for California, Intermediate, and New York, respectively. Additionally, offering costs of $154,612, $337,770, and $143,704 and sales loads of $590,000, $1,794,000, and $482,500 for AMPS for California, Intermediate, and New York, respectively, were charged as a reduction of common stock paid-in capital for each Fund's AMPS offering. 9 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. The investment policies of California and New York involve investing substantially all of their assets in municipal bonds of issuers located in the state of California and the state of New York, respectively. This policy makes those Funds 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. 10 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 33 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. 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 -------------------------------------------------------------------- 2004 - 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, 2004, such waived fees amounted to $396,184, $1,212,644, and $324,473 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. On October 31, 2003, Management and Neuberger Berman, LLC ("Neuberger"), a member firm of the New York Stock Exchange and sub-adviser to each Fund, became indirect 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. The impact of this arrangement, reflected in the Statements of Operations under the caption Custodian fees, was a reduction of $498, $610, and $524 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. 34 Each Fund has paid Merrill Lynch a fee equal to 1/8 of 1% in connection with entering the special rate periods in return for which Merrill Lynch had agreed to pay dividends on the AMPS that, as a result of the auction, exceed a specified rate. 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 rating on the AMPS. 'Discounted value' refers to the fact that the rating agencies require the Fund, in performing this calculation, to discount portfolio securities below their face value, at a rate depending on their rating. Each Fund pays a fee to State Street, as Fund sub-administrator, for the preparation of this report. NOTE C--SECURITIES TRANSACTIONS: During the year ended October 31, 2004, there were purchase and sale transactions (excluding short-term securities) as follows:
(000'S OMITTED) PURCHASES SALES CALIFORNIA $ 5,187 $ 5,277 INTERMEDIATE 16,576 14,755 NEW YORK 6,291 5,799
NOTE D--CAPITAL: At October 31, 2004, 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 5,574,550 6,981
Transactions in common shares for the years ended October 31, 2004 and October 31, 2003, were as follows:
COMMON SHARES ISSUED IN CONNECTION WITH: UNDERWRITERS' EXERCISE REINVESTMENT OF OF OVER-ALLOTMENT DIVIDENDS AND NET INCREASE IN COMMON OPTION DISTRIBUTIONS SHARES OUTSTANDING 2004 2003 2004 2003 2004 2003 CALIFORNIA -- 185,000 -- -- -- 185,000 INTERMEDIATE -- 175,000 -- 23,143 -- 198,143 NEW YORK -- 215,000 -- 2,569 -- 217,569
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, ------------------------- ------------------- 2004 2003 2002 COMMON SHARE NET ASSET VALUE, BEGINNING OF PERIOD $ 14.36 $ 14.31 $ 14.32 ---------- ---------- ------------------- INCOME FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS: NET INVESTMENT INCOME (LOSS) .91 .85 .02 NET GAINS OR LOSSES ON SECURITIES (BOTH REALIZED AND UNREALIZED) .67 .14 -- COMMON SHARE EQUIVALENT OF DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM: NET INVESTMENT INCOME (.13) (.08) -- ---------- ---------- ------------------- TOTAL FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS 1.45 .91 .02 ---------- ---------- ------------------- LESS DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM: NET INVESTMENT INCOME (.75) (.75) -- ---------- ---------- ------------------- LESS CAPITAL CHARGES: ISSUANCE OF COMMON SHARES -- -- (.03) ISSUANCE OF PREFERRED SHARES -- (.11) -- ---------- ---------- ------------------- TOTAL CAPITAL CHARGES -- (.11) (.03) ---------- ---------- ------------------- COMMON SHARE NET ASSET VALUE, END OF PERIOD $ 15.06 $ 14.36 $ 14.31 ---------- ---------- ------------------- COMMON SHARE MARKET VALUE, END OF PERIOD $ 13.47 $ 13.00 $ 15.00 ---------- ---------- ------------------- TOTAL RETURN, COMMON SHARE NET ASSET VALUE+ +10.97% +6.02% -0.10%** TOTAL RETURN, COMMON SHARE MARKET VALUE+ +9.63% -8.44% +0.00%** RATIOS/SUPPLEMENTAL DATA++ NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS, END OF PERIOD (IN MILLIONS) $ 102.3 $ 97.5 $ 94.5 PREFERRED STOCK, AT LIQUIDATION VALUE ($25,000 PER SHARE LIQUIDATION PREFERENCE) (IN MILLIONS) $ 59.0 $ 59.0 $ -- RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS# .96% .88% .84%* RATIO OF NET EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS++ .96% .88% .83%* RATIO OF NET INVESTMENT INCOME (LOSS) EXCLUDING PREFERRED STOCK DIVIDENDS TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 6.24% 5.88% 1.10%* RATIO OF PREFERRED STOCK DIVIDENDS TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS .86% .56% --% RATIO OF NET INVESTMENT INCOME (LOSS) INCLUDING PREFERRED STOCK DIVIDENDS TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 5.38% 5.32% 1.10%* PORTFOLIO TURNOVER RATE 3% 9% 0% ASSET COVERAGE PER SHARE OF PREFERRED STOCK, END OF PERIOD@ $ 68,383 $ 66,332 $ --
See Notes to Financial Highlights 36 NEUBERGER BERMAN OCTOBER 31, 2004 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, ------------------------- ------------------- 2004 2003 2002 COMMON SHARE NET ASSET VALUE, BEGINNING OF PERIOD $ 14.44 $ 14.30 $ 14.32 ---------- ---------- ------------------- INCOME FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS: NET INVESTMENT INCOME (LOSS) .94 .88 .01 NET GAINS OR LOSSES ON SECURITIES (BOTH REALIZED AND UNREALIZED) .65 .25 -- COMMON SHARE EQUIVALENT OF DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM: NET INVESTMENT INCOME (.12) (.09) -- ---------- ---------- ------------------- TOTAL FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS 1.47 1.04 .01 ---------- ---------- ------------------- LESS DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM: NET INVESTMENT INCOME (.80) (.80) -- ---------- ---------- ------------------- LESS CAPITAL CHARGES: ISSUANCE OF COMMON SHARES -- -- (.03) ISSUANCE OF PREFERRED SHARES -- (.10) -- ---------- ---------- ------------------- TOTAL CAPITAL CHARGES -- (.10) (.03) ---------- ---------- ------------------- COMMON SHARE NET ASSET VALUE, END OF PERIOD $ 15.11 $ 14.44 $ 14.30 ---------- ---------- ------------------- COMMON SHARE MARKET VALUE, END OF PERIOD $ 13.70 $ 13.33 $ 15.00 ---------- ---------- ------------------- TOTAL RETURN, COMMON SHARE NET ASSET VALUE+ +10.91% +6.88% -0.17%** TOTAL RETURN, COMMON SHARE MARKET VALUE+ +8.94% -5.94% +0.00%** RATIOS/SUPPLEMENTAL DATA++ NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS, END OF PERIOD (IN MILLIONS) $ 312.8 $ 299.1 $ 293.3 PREFERRED STOCK, AT LIQUIDATION VALUE ($25,000 PER SHARE LIQUIDATION PREFERENCE) (IN MILLIONS) $ 179.4 $ 179.4 $ -- RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS# .82% .74% .51%* RATIO OF NET EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS++ .82% .74% .51%* RATIO OF NET INVESTMENT INCOME (LOSS) EXCLUDING PREFERRED STOCK DIVIDENDS TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 6.40% 6.08% 1.62%* RATIO OF PREFERRED STOCK DIVIDENDS TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS .85% .59% --% RATIO OF NET INVESTMENT INCOME (LOSS) INCLUDING PREFERRED STOCK DIVIDENDS TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 5.55% 5.49% 1.62%* PORTFOLIO TURNOVER RATE 3% 10% 0% ASSET COVERAGE PER SHARE OF PREFERRED STOCK, END OF PERIOD@ $ 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, ------------------------- ------------------- 2004 2003 2002 COMMON SHARE NET ASSET VALUE, BEGINNING OF PERIOD $ 14.40 $ 14.32 $ 14.32 INCOME FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS: NET INVESTMENT INCOME (LOSS) .93 .86 .03 NET GAINS OR LOSSES ON SECURITIES (BOTH REALIZED AND UNREALIZED) .48 .19 -- COMMON SHARE EQUIVALENT OF DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM: NET INVESTMENT INCOME (.13) (.08) -- TOTAL FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS 1.28 .97 .03 LESS DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM: NET INVESTMENT INCOME (.78) (.78) -- LESS CAPITAL CHARGES: ISSUANCE OF COMMON SHARES -- -- (.03) ISSUANCE OF PREFERRED SHARES -- (.11) -- TOTAL CAPITAL CHARGES -- (.11) (.03) COMMON SHARE NET ASSET VALUE, END OF PERIOD $ 14.90 $ 14.40 $ 14.32 COMMON SHARE MARKET VALUE, END OF PERIOD $ 13.32 $ 13.27 $ 15.00 TOTAL RETURN, COMMON SHARE NET ASSET VALUE+ +9.67% +6.36% -0.03%** TOTAL RETURN, COMMON SHARE MARKET VALUE+ +6.39% -6.43% +0.00%** RATIOS/SUPPLEMENTAL DATA++ NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS, END OF PERIOD (IN MILLIONS) $ 83.1 $ 80.3 $ 76.7 PREFERRED STOCK, AT LIQUIDATION VALUE ($25,000 PER SHARE LIQUIDATION PREFERENCE) (IN MILLIONS) $ 48.3 $ 48.3 $ -- RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS# 1.00% .92% .94%* RATIO OF NET EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS++ .99% .92% .93%* RATIO OF NET INVESTMENT INCOME (LOSS) EXCLUDING PREFERRED STOCK DIVIDENDS TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 6.37% 6.02% 1.22%* RATIO OF PREFERRED STOCK DIVIDENDS TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS .86% .57% --% RATIO OF NET INVESTMENT INCOME (LOSS) INCLUDING PREFERRED STOCK DIVIDENDS TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 5.51% 5.45% 1.22%* PORTFOLIO TURNOVER RATE 5% 11% 0% ASSET COVERAGE PER SHARE OF PREFERRED STOCK, END OF PERIOD@ $ 68,073 $ 66,617 $ --
See Notes to Financial Highlights 38 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 dividend reinvestment plan. Results represent past performance and do not guarantee future results. Current returns may be lower or higher than the performance data quoted. For each Fund, total return would have been lower if Management had not waived the investment management fee. Performance data current to the most recent month-end are available at www.nb.com. # 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. 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 ENDED YEAR ENDED OCTOBER 31, OCTOBER 31, 2004 2003 2002(1) CALIFORNIA 1.35% 1.26% 1.08% INTERMEDIATE 1.22% 1.13% .76% NEW YORK 1.39% 1.31% 1.18%
(1) Period from September 27, 2002 to October 31, 2002. ^ The date investment operations commenced. * Annualized. ** Not annualized. @ Calculated by subtracting the Fund's total liabilities (excluding accumulated unpaid dividends on AMPS) from the Fund's total assets and dividing by the number of AMPS outstanding. ++ Expense ratios do not include the effect of dividend payments to holders of AMPS. Income ratios include income earned on assets attributable to AMPS outstanding. 39 REPORT OF ERNST & YOUNG LLP, 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, including the schedules of investments, 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") as of October 31, 2004, 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 ended October 31, 2004 and 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2004, by correspondence with the custodian and brokers or other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each 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, 2004, 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 ended October 31, 2004, 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 3, 2004 40 DIVIDEND REINVESTMENT PLAN (Unaudited) 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 Dividend 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 dividend 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 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 dividend 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. 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. 41 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, 2003 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 Bank of New York 101 Barclay Street, 11-E New York, NY 10286 LEGAL COUNSEL Kirkpatrick & Lockhart LLP 1800 Massachusetts Avenue, NW 2nd Floor Washington, DC 20036-1221 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP 200 Clarendon Street Boston, MA 02116 43 DIRECTORS AND OFFICERS (Unaudited) The following tables set forth information concerning the directors and officers of the Funds. All persons named as directors and officers also serve in similar capacities for other funds administered or managed by NB Management and Neuberger Berman, LLC. The Statement of Additional Information for each Fund includes additional information about fund directors and is available upon request, without charge, by calling (877) 461-1899. THE BOARD OF DIRECTORS
NUMBER OF PORTFOLIOS IN FUND COMPLEX NAME, AGE, AND ADDRESS (1) OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE AND POSITION WITH FUND PRINCIPAL OCCUPATION(S) (2) DIRECTOR FUND COMPLEX BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I INDEPENDENT FUND DIRECTORS* Faith Colish (69) Counsel, Carter Ledyard & Milburn LLP (law 41 Director, American Bar Director firm) since October 2002; formerly, Retirement Association (ABRA) Attorney-at-Law and President, Faith Colish, A since 1997 (not-for- profit Professional Corporation, 1980 to 2002. membership association). C. Anne Harvey (67) Consultant, C. A. Harvey Associates, since June 41 President, Board of Associates Director 2001; formerly, Director, AARP, 1978 to to The National Rehabilitation December 2001. Hospital's Board of Directors since 2002; formerly, Member, Individual Investors Advisory Committee to the New York Stock Exchange Board of Directors, 1998 to June 2002; formerly, Member, American Savings Education Council's Policy Board (ASEC), 1998-2000; formerly, Member, Executive Committee, Crime Prevention Coalition of America, 1997-2000. Cornelius T. Ryan (72) Founding General Partner, Oxford Partners and 41 Director, Capital Cash Director Oxford Bioscience Partners (venture capital Management Trust (money market partnerships) and President, Oxford Venture fund), Naragansett Insured Corporation. Tax-Free Income Fund, Rocky Mountain Equity Fund, Prime Cash Fund, several private companies and QuadraMed Corporation (NASDAQ). Peter P. Trapp (59) Regional Manager for Atlanta Region, Ford Motor 41 None. Director Credit Company since August 1997; formerly, President, Ford Life Insurance Company, April 1995 until August 1997.
44 NEUBERGER BERMAN OCTOBER 31, 2004
NUMBER OF PORTFOLIOS IN FUND COMPLEX NAME, AGE, AND ADDRESS (1) OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE AND POSITION WITH FUND PRINCIPAL OCCUPATION(S) (2) DIRECTOR FUND COMPLEX BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ DIRECTOR WHO IS AN "INTERESTED PERSON" Peter E. Sundman* (45) Executive Vice President, Neuberger Berman Inc. 41 Director and Vice President, Chief Executive Officer, (holding company) since 1999; Head of Neuberger Neuberger & Berman Agency, Inc. Director and Chairman of the Berman Inc.'s Mutual Funds and Institutional since 2000; formerly, Director, Board Business since 1999; President and Director, NB Neuberger Berman Inc. (holding Management since 1999; Executive Vice company) from October 1999 President, Neuberger Berman since 1999; through March 2003. formerly, Principal, Neuberger Berman from 1997 until 1999; formerly, Senior Vice President, NB Management from 1996 until 1999. CLASS II INDEPENDENT FUND DIRECTORS* John Cannon (74) Consultant. Formerly, Chairman, CDC Investment 41 Independent Trustee or Director Director Advisers (registered investment adviser), of three series of 1993-January 1999; formerly, President and OppenheimerFunds: Limited Term Chief Executive Officer, AMA Investment New York Municipal Fund, Advisors, an affiliate of the American Medical Rochester Fund Municipals, and Association. Oppenheimer Convertible Securities Fund, since 1992. Barry Hirsch (71) Attorney-at-Law. Formerly, Senior Counsel, 41 None. Director Loews Corporation (diversified financial corporation) May 2002 until April 2003; formerly, Senior Vice President, Secretary and General Counsel, Loews Corporation.
45
NUMBER OF PORTFOLIOS IN FUND COMPLEX NAME, AGE, AND ADDRESS (1) OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE AND POSITION WITH FUND PRINCIPAL OCCUPATION(S) (2) DIRECTOR FUND COMPLEX BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ Tom Decker Seip (54) General Partner, Seip Investments LP (a private 41 Director, H&R Block, Inc. Director investment partnership); formerly, President (financial services company) and CEO, Westaff, Inc. (temporary staffing), since May 2001; Director, May 2001 to January 2002; Senior Executive at Forward Management, Inc. (asset the Charles Schwab Corporation from 1983 to management) since 2001; 1999, including Chief Executive Officer, formerly, Director, General Charles Schwab Investment Management, Inc. and Magic (voice recognition Trustee, Schwab Family of Funds and Schwab software) 2001 until 2002; Investments from 1997 to 1998 and Executive formerly, Director, E-Finance Vice President-Retail Brokerage, Charles Schwab Corporation (credit decisioning Investment Management from 1994 to 1997. services) 1999-2003; formerly, Director, Save-Daily.com (micro investing services) 1999-2003; Director, Offroad Capital Inc. (pre-public internet commerce company). DIRECTOR WHO IS AN "INTERESTED PERSON" Jack L. Rivkin* (64) President and Director Executive Vice President and Chief Investment 41 Director, Dale Carnegie and Officer, Neuberger Berman Inc. (holding Associates, Inc. (private company) since 2002 and 2003, respectively; company) since 1998; Director, Executive Vice President and Chief Investment Emagin Corp. (public company) Officer, Neuberger Berman since 2002 and 2003, since 1997; Director, Solbright, respectively; Director and Chairman, NB Inc. (private company) since Management since December 2002; formerly, 1998; Director, Infogate, Inc. Executive Vice President, Citigroup (private company) since 1997; Investments, Inc. from September 1995 to Director, Broadway Television February 2002; formerly, Executive Vice Network (private company) since President, Citigroup Inc. from September 1995 2000. to February 2002. CLASS III INDEPENDENT FUND DIRECTORS* Walter G. Ehlers (71) Consultant; Retired President and Trustee, 41 None. Director Teachers Insurance & Annuity (TIAA) and College Retirement Equities Fund (CREF).
46
NUMBER OF PORTFOLIOS IN FUND COMPLEX NAME, AGE, AND ADDRESS (1) OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE AND POSITION WITH FUND PRINCIPAL OCCUPATION(S) (2) DIRECTOR FUND COMPLEX BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ Robert A. Kavesh (77) Marcus Nadler Professor Emeritus of Finance and 41 Director, DEL Laboratories, Inc. Director Economics, New York University Stern School of (cosmetics and pharmaceuticals) Business. since 1978; Director, The Caring Community (not-for-profit). Howard A. Mileaf (67) Retired. Formerly, Vice President and Special 41 Director, WHX Corporation Director Counsel, WHX Corporation (holding company) (holding company) since August 1993-2001. 2002; Director, Webfinancial Corporation (holding company) since December 2002; Director, State Theatre of New Jersey (not-for-profit theater) since 2000; formerly, Director, Kevlin Corporation (manufacturer of microwave and other products). William E. Rulon (72) Retired. Formerly, Senior Vice President, 41 Director, Pro-Kids Golf and Director Foodmaker, Inc. (operator and franchiser of Learning Academy (teach golf and restaurants) until January 1997. computer usage to "at risk" children) since 1998; formerly, Director, Prandium, Inc. (restaurants) from March 2001 until July 2002. Candace L. Straight (57) Private investor and consultant specializing in 41 Director, The Proformance Director the insurance industry; formerly, Advisory Insurance Company (personal Director, Securitas Capital LLC (a global lines property and casualty private equity investment firm dedicated to insurance company) since March making investments in the insurance sector) 2004; Director, Providence 1998 until December 2002. Washington (property and casualty insurance company) since December 1998; Director, Summit Global Partners (insurance brokerage firm) since October 2000.
47
NUMBER OF PORTFOLIOS IN FUND COMPLEX NAME, AGE, AND ADDRESS (1) OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE AND POSITION WITH FUND PRINCIPAL OCCUPATION(S) (2) DIRECTOR FUND COMPLEX BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ DIRECTOR WHO IS AN "INTERESTED PERSON" Edward I. O'Brien* (76) Formerly, Member, Investment Policy Committee, 41 Director, Legg Mason, Inc. Director Edward Jones 1993-2001; President, Securities (financial services holding Industry Association ("SIA") (securities company) since 1993; formerly, industry's representative Director, Boston Financial Group (real estate and tax shelters) 1993-1999.
* Indicates a 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 each is an officer and/or director of NB Management and Executive Vice President of Neuberger Berman. Mr. O'Brien is an interested person of the Fund by virtue of the fact that he is a director of Legg Mason, Inc., a wholly owned subsidiary of which, from time to time, serves as a broker or dealer to the Fund and other funds or accounts for which NB Management serves as investment manager. (1) The business address of each listed person is 605 Third Avenue, New York, New York 10158. (2) Except as otherwise indicated, each person has held the positions shown for at least the last five years. The Board of Directors shall at all 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 meetings of stockholders held in 2006, 2004, and 2005 respectively, and at each third annual meeting of stockholders thereafter. 48 INFORMATION ABOUT THE OFFICERS OF THE FUND (OTHER THAN THOSE LISTED ABOVE)
POSITION AND NAME, AGE, AND ADDRESS (1) LENGTH OF TIME SERVED (2) PRINCIPAL OCCUPATION(S) - ------------------------------------------------------------------------------------------------------------------- Claudia A. Brandon (48) Secretary since 2002 Vice President-Mutual Fund Board Relations, NB Management since 2000; Vice President, Neuberger Berman since 2002 and employee since 1999; formerly, Vice President, NB Management from 1986 to 1999; Secretary, fourteen registered investment companies for which NB Management acts as investment manager and administrator (four since 2002, three since 2003, and four since 2004). Robert Conti (48) Vice President since 2002 Senior Vice President, Neuberger Berman since 2003; formerly, Vice President, Neuberger Berman from 1999 until 2003; Senior Vice President, NB Management since 2000; formerly, Controller, NB Management until 1996; formerly, Treasurer, NB Management from 1996 until 1999; Vice President, fourteen registered investment companies for which NB Management acts as investment manager and administrator (three since 2000, four since 2002, three since 2003, and four since 2004). Brian J. Gaffney (51) Vice President since 2002 Managing Director, Neuberger Berman since 1999; Senior Vice President, NB Management since 2000; formerly, Vice President, NB Management from 1997 until 1999; Vice President, fourteen registered investment companies for which NB Management acts as investment manager and administrator (three since 2000, four since 2002, three since 2003, and four since 2004). Sheila R. James (39) Assistant Secretary since 2002 Employee, Neuberger Berman since 1999; Employee, NB Management from 1991 to 1999; Assistant Secretary, fourteen registered investment companies for which NB Management acts as investment manager and administrator (seven since 2002, three since 2003, and four since 2004).
49
POSITION AND NAME, AGE, AND ADDRESS (1) LENGTH OF TIME SERVED (2) PRINCIPAL OCCUPATION(S) - ------------------------------------------------------------------------------------------------------------------- Kevin Lyons (49) Assistant Secretary since 2003 Employee, Neuberger Berman since 1999; Employee, NB Management from 1993 to 1999; Assistant Secretary, fourteen registered investment companies for which NB Management acts as investment manager and administrator (ten since 2003 and four since 2004). John M. McGovern (34) Assistant Treasurer since 2002 Vice President, Neuberger Berman since January 2004; Employee, NB Management since 1993; Assistant Treasurer, fourteen registered investment companies for which NB Management acts as investment manager and administrator (seven since 2002, three since 2003, and four since 2004). Barbara Muinos (45) Treasurer and Principal Financial and Vice President, Neuberger Berman since Accounting Officer since 2002 1999; formerly, Assistant Vice President, NB Management from 1993 to 1999; Treasurer and Principal Financial and Accounting Officer, fourteen registered investment companies for which NB Management acts as investment manager and administrator (seven since 2002, three since 2003, and four since 2004); formerly, Assistant Treasurer, three registered investment companies for which NB Management acts as investment manager and administrator from 1996 until 2002. Frederic B. Soule (58) Vice President since 2002 Senior Vice President, Neuberger Berman since 2003; formerly, Vice President, Neuberger Berman from 1999 until 2003; formerly, Vice President, NB Management from 1995 until 1999; Vice President, fourteen registered investment companies for which NB Management acts as investment manager and administrator (three since 2000, four since 2002, three since 2003, and four since 2004).
- -------------- (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. 50 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. Beginning September 2004, information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 will also be 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 the Fund's website at www.nb.com [http://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, with out charge, by calling (800) 877-9700. CHANGES TO THE BYLAWS On September 21, 2004, the Board adopted an amendment to the Bylaws of the Fund stating that directors are elected by the vote of a majority of the outstanding shares entitled to vote on the matter. 51 NOTES TO SHAREHOLDERS (Unaudited) In January 2005 you will receive information to be used in filing your 2004 tax returns, which will include a notice of the exact tax status of all dividends paid to you by each Fund during calendar 2004. Please consult your own tax advisor for details as to how this information should be reflected on your tax returns. 52 [NEUBERGER BERMAN LOGO] A LEHMAN BROTHERS COMPANY NEUBERGER BERMAN MANAGEMENT INC. 605 Third Avenue 2nd Floor New York, NY 10158-0180 INTERNAL SALES & SERVICES 800.877.9700 INSTITUTIONAL SERVICES 877.461.1899 www.nb.com 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. [GRAPHIC] C0435 12/04 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 the Registrant's Form N-CSR filed on January 9, 2004. 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 one audit committee financial expert serving on its audit committee. The Registrant's audit committee financial expert is John Cannon. Mr. Cannon is an independent director 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 each of the last two fiscal years 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 for those fiscal years were $31,250 and $56,000 for 2004 and 2003, respectively. (b) AUDIT-RELATED FEES ------------------ The aggregate fees billed to the Registrant in each of the last two fiscal years 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 $5,000 and $1,667 for 2004 and 2003, 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 2004 and 2003, 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 2004 and 2003, respectively. (c) TAX FEES -------- The aggregate fees billed to the Registrant in each of the last two fiscal years for professional services rendered by E&Y for tax compliance, tax advice, and tax planning were $8,700 and $8,000 for 2004 and 2003, 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 2004 and 2003, 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 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 2004 and 2003, respectively. (d) ALL OTHER FEES -------------- The aggregate fees billed to the Registrant in each of the last two fiscal years 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 2004 and 2003, 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 2004 and 2003, 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 the Chair 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 for each of the last two fiscal years of the Registrant were $13,700 and $9,667 for 2004 and 2003, 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 for each of the last two fiscal years of the Registrant were $256,050 and $233,037 for 2004 and 2003, respectively. (h) The Audit Committee of the Board of Directors 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 an Audit Committee to oversee particular aspects of the Registrant's management. The Audit Committee's purposes are (a) to oversee the accounting and financial reporting processes of the Registrant and their internal controls and, as the Committee deems appropriate, to inquire into the internal controls of certain service providers; (b) to oversee the quality and objectivity of the Registrant's financial statements and the independent audit thereof; (c) to oversee, or, as appropriate, assist Board oversight of, the Registrant's compliance with legal and regulatory requirements that relate to the Portfolios' accounting and financial reporting, internal controls and independent audits; (d) to approve prior to appointment the engagement of the Registrant's independent auditors and, in connection therewith, to review and evaluate the qualifications, independence and performance of the Registrant's independent auditors; and (e) to act as a liaison between the Registrant's independent auditors and the full Board. The Audit Committee is composed entirely of Independent Fund Directors; its members are John Cannon, 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 Fund's portfolios. Under this authority, Neuberger Berman is required by the Board to vote proxies related to portfolio securities in the best interests of the Fund 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 Fund. 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. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS No reportable purchases for the period covered by this report. ITEM 9. 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 10. 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 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 last fiscal half-year that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting. ITEM 11. 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 811-21334 (filed January 9, 2004). (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 attached hereto. (b) The certification required by Rule 30a-2(b) of the Act and Section 906 of the Sarbanes-Oxley Act is attached hereto. The certifications provided pursuant to Section 906 of the Sarbanes-Oxley Act are not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 ("Exchange Act"), or otherwise subject to the liability of that section. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the Registrant specifically incorporates them by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Neuberger Berman Intermediate Municipal Fund Inc. By: /s/ Peter E. Sundman -------------------- Peter E. Sundman Chief Executive Officer Date: January 7, 2005 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 7, 2005 By: /s/ Barbara Muinos -------------------- Barbara Muinos Treasurer and Principal Financial and Accounting Officer Date: January 7, 2005 EX-99.CERT 2 ex99_cert.txt EXHIBIT 99-CERT CERTIFICATIONS I, Peter E. Sundman, certify that: 1. I have reviewed this report on Form N-CSR of Neuberger Berman Intermediate Municipal Fund Inc. ("Registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940) for the Registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) [omitted]; c) evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 5. The Registrant's other certifying officers and I have disclosed to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. Date: January 7, 2005 By: /s/ Peter E. Sundman -------------------- Peter E. Sundman Chief Executive Officer I, Barbara Muinos, certify that: 1. I have reviewed this report on Form N-CSR of Neuberger Berman Intermediate Municipal Fund Inc. ("Registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940) for the Registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) [omitted]; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 5. The Registrant's other certifying officers and I have disclosed to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. Date: January 7, 2005 By: /s/ Barbara Muinos ------------------ Barbara Muinos Treasurer and Principal Financial and Accounting Officer EX-99.906 3 ex99_906cert.txt EXHIBIT - 99.906CERT SECTION 906 CERTIFICATIONS We, Peter E. Sundman, Chief Executive Officer and Barbara Muinos, Treasurer and Principal Financial and Accounting Officer of Neuberger Berman Intermediate Municipal Fund Inc. ("Registrant"), certify, pursuant to 18 U.S.C. Section 1350 enacted under Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge: 1. The Registrant's periodic report on Form N-CSR for the period ended October 31, 2004 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m(a) or 78o(d)); and 2. The information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Dated: January 7, 2005 /s/ Peter E. Sundman -------------------- Peter E. Sundman Chief Executive Officer /s/ Barbara Muinos -------------------- Barbara Muinos Treasurer and Principal Financial and Accounting Officer A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Form N-CSR with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----