†

In accordance with Accounting Standards Codification (“ASC”) 820 “Fair Value Measurement” (“ASC 820”), all investments held by each of 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”) (each individually a “Fund” and collectively, the “Funds”) are carried at the value that Neuberger Berman Management LLC (“Management”) believes a Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment under current market conditions. Various inputs, including the volume and level of activity for the asset or liability in the market, are considered in valuing the Funds’ investments, some of which are discussed below. Significant management judgment may be necessary to value investments in accordance with ASC 820.

ASC 820 established a three-tier hierarchy of inputs to create a classification of value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

·

Level 1 – quoted prices in active markets for identical investments

·

Level 2 – other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, amortized cost, etc.)

·

Level 3 – unobservable inputs (including a Fund’s own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing an investment are not necessarily an indication of the risk associated with investing in those securities.

 

The value of the Funds’ investments in municipal securities is determined by Management primarily by obtaining valuations from independent pricing services based on readily available bid quotations, or if quotations are not available, by methods which include various considerations such as yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions (generally Level 2 inputs). Other Level 2 and 3 inputs used by independent pricing services to value municipal securities and units include current trades, bid-wanted lists (which informs the market that a holder is interested in selling a position and that offers will be considered), offerings, general information on market movement, direction, trends, appraisals, bid offers and specific data on specialty issues.

 

Management has developed a process to periodically review information provided by independent pricing services for all types of securities.

 

If a valuation is not available from an independent pricing service, or if Management has reason to believe that the valuation received does not represent the amount a Fund might reasonably expect to receive on a current sale in an orderly transaction, Management seeks to obtain quotations from brokers or dealers (generally considered Level 2 or Level 3 inputs depending on the number of quotes available). If such quotations are not readily available, the security is valued using methods the Fund’s Board of Directors (each Fund’s Board of Directors, a “Board”) has approved in the good-faith belief that the resulting valuation will reflect the fair value of the security. Numerous factors may be considered when determining the fair value of a security based on Level 2 or Level 3 inputs, including available analyst, media or other reports, trading in futures or American Depositary Receipts (“ADRs”) and whether the issuer of the security being fair valued has other securities outstanding.

 

Fair value prices are necessarily estimates, and there is no assurance that such a price will be at or close to the price at which the security is next quoted or next trades.

(000’s omitted)

Level 1

Level 2

Total

California

Investments:

Municipal Notes^

$—

$145,441

$—

$145,441

Total Investments

—

145,441

—

145,441

Intermediate

Investments:

Municipal Notes^

—

485,403

—

485,403

Tax Exempt Preferred^

Total Investments

—

—

1,929

487,332

—

—

1,929

487,332

New York

Investments:

Municipal Notes^

—

121,419

—

121,419

Liquidating Trust—Real Estate

—

—

1,734

1,734

Total Investments

—

121,419

1,734

123,153

^

The Schedule of Investments provides information on the state categorization for the portfolio.

§

The following is a reconciliation between the beginning and ending balances of investments in which significant unobservable inputs (Level 3) were used in determining value:

 

 

 

 

 

Beginning

balance, as of

11/1/14

 

 

Accrued

discounts/

(premiums)

 

Realized gain/(loss)

 

 

 

 

Change in unrealized appreciation/ (depreciation)

 

 

 

 

 

 

 

Purchases

 

 

 

 

 

 

 

Sales

 

 

 

 

 

Transfers in

to Level 3

 

 

 

 

 

Transfers

out of Level 3

 

Balance

as of

1/31/15

Net change in

unrealized

appreciation/

(depreciation)

from

investments still

held as of

1/31/15

(000’s omitted)

Investments in Securities

New York

 

 

 

$1,830

 

 

 

 

 

 

$(96)

 

 

 

 

 

 

 

 

 

 

$1,734

 

 

$(96)

Total

$1,830

$(96)

$1,734

$(96)

The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of January 31, 2015.

 

 

 

 

Asset class

Fair value at 1/31/15

Valuation techniques

Unobservable

input

Range per unit

Impact to valuation from increase in input

New York

Units

$1,734,000

Income Approach

Appraised Value

$2,592 - $3,252

$2,922

Decrease

As of the period ended January 31, 2015, no securities were transferred from one level (as of October 31, 2014) to another.

##

 

 

(000’s omitted)

Cost

Gross Unrealized Appreciation

Gross Unrealized Depreciation

Net Unrealized

Appreciation

(Depreciation)

California

$133,832

$11,704

$95

$11,609

Intermediate

434,700

54,559

1,927

52,632

New York

116,277

8,959

2,083

6,876

ß

Security is guaranteed by the corporate or non-profit obligor.

ñ

Securities were purchased under Rule 144A of the Securities Act of 1933, as amended (the “1933 Act”), or are private placements and, unless registered under the 1933 Act or exempted from registration, may only be sold to qualified institutional investors. These securities have been deemed by the investment manager to be liquid. At January 31, 2015, these securities amounted to approximately $3,675,000 or 4.2% of net assets applicable to common shareholders for California, approximately $15,984,000 or 5.1% of net assets applicable to common shareholders for Intermediate and approximately $2,472,000 or 3.3% of net assets applicable to common shareholders for New York.

µ

Floating rate securities are securities whose yields vary with a designated market index or market rate. These securities are shown at their current rates as of January 31, 2015, and at their final maturities.

b

Currently a zero coupon security; will convert to 6.00% on December 1, 2015.

c

Currently a zero coupon security; will convert to 6.50% on December 1, 2015.

d

Currently a zero coupon security; will convert to 5.50% on August 1, 2021.

e

Currently a zero coupon security; will convert to 6.38% on August 1, 2016.

f

Currently a zero coupon security; will convert to 6.38% on August 1, 2019.

g

Currently a zero coupon security; will convert to 6.13% on August 1, 2023.

h

Currently a zero coupon security; will convert to 6.75% on August 1, 2015.

i

Currently a zero coupon security; will convert to 6.88% on August 1, 2019.

j

Currently a zero coupon security; will convert to 7.30% on August 1, 2026.

z

A zero balance, if any, may reflect actual amounts rounding to less than $1,000.

*

Security did not produce income during the last twelve months.

^^

Value of the security was determined using methods the Board has approved in the good-faith belief that the resulting valuation will reflect the fair value of the security.

‡

Security had an event of default.

Ñ

These securities have been deemed by the investment manager to be illiquid. At January 31, 2015, these securities amounted to approximately $505,000 or 0.6% of net assets applicable to common shareholders for California and approximately $1,723,000 or 0.6% of net assets applicable to common shareholders for Intermediate.

#

These securities have been deemed by the investment manager to be illiquid, and are restricted securities subject to restrictions on resale. Securities were purchased under Rule 144A of the 1933 Act or are private placements and, unless registered under the 1933 Act or exempted from registration, may only be sold to qualified institutional investors.

At January 31, 2015, these securities amounted to approximately $1,530,000 or 1.7% of net assets applicable to common shareholders for California, approximately $6,782,000 or 2.2% of net assets applicable to common shareholders for Intermediate and approximately $2,243,000 or 3.0% of net assets applicable to common shareholders for New York.

(000’s omitted)

Restricted Security

Acquisition Date

Acquisition Cost

Acquisition Cost

Percentage of

Net Assets

Applicable to

Common

Shareholders as

of Acquisition

Date

Value as of

1/31/15

Fair Value

Percentage of

Net Assets

Applicable to

Common

Shareholders

as of 1/31/15

California

California Muni. Fin. Au.

Charter Sch. Lease Rev.

(Sycamore Academy Proj.),

Ser. 2014, 5.63%, due

7/1/44

 

9/18/2014

$982

1.2%

$1,021

1.1%

Collier Co. Ind. Dev. Au.

Continuing Care Comm.

Rev. (Arlington of Naples

Proj.), Ser. 2014-B1,

6.88%, due 5/15/21

 

12/16/2013

500

0.6%

509

0.6%

Intermediate

California Muni. Fin. Au.

Charter Sch. Lease Rev.

(Sycamore Academy Proj.),

Ser. 2014, 5.00%, due

7/1/24

 

9/18/2014

806

0.3%

831

0.3%

California Muni. Fin. Au.

Charter Sch. Lease Rev.

(Sycamore Academy Proj.),

Ser. 2014, 5.13%, due

7/1/29

 

9/18/2014

623

0.2%

644

0.2%

Collier Co. Ind. Dev. Au.

Continuing Care Comm. Rev.

(Arlington of Naples Proj.), Ser.

2014-B1, 6.88%, due 5/15/21

 

12/16/2013

1,000

0.4%

1,017

0.3%

Munimae TE Bond Subsidiary

LLC, Unsecured Notes, 5.00%,

due 4/30/28

 

1/31/2013

1,925

0.7%

1,929

0.6%

New York Liberty Dev. Corp.

Rev. (Nat’l Sports Museum

Proj.), Ser. 2006-A, 6.13%,

due 2/15/19

 

8/4/2006

1,100

0.4%

0

0.0%

Non-Profit Pfd. Fdg. Trust I, Ser.

2006-C, 4.72%, due 9/15/37

 

10/2/2006

3,000

1.0%

2,361

0.8%

 

(000’s omitted)

Restricted Security

Acquisition Date

Acquisition Cost

Acquisition Cost

Percentage of

Net Assets

Applicable to

Common

Shareholders as

of Acquisition

Date

Value as of

1/31/15

Fair Value

Percentage of

Net Assets

Applicable to

Common

Shareholders

as of 1/31/15

New York

Collier Co. Ind. Dev. Au.

Continuing Care Comm. Rev.

(Arlington of Naples Proj.), Ser.

2014-B1, 6.88%, due 5/15/21

 

12/16/2013

$500

0.7%

$509

0.7%

New York Liberty Dev. Corp.

Rev. (Nat’l Sports Museum

Proj.), Ser. 2006-A, 6.13%,

due 2/15/19

 

8/4/2006

660

0.9%

0

0.0%

CMS Liquidating Trust

11/21/2012

3,105

4.0%

1,734

2.3%