As filed with the Securities and Exchange Commission on January 9, 2004
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: 811-21167
NEUBERGER BERMAN CALIFORNIA 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 California Intermediate Municipal Fund Inc.
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
Arthur C. Delibert, Esq. Ellen Metzger, Esq.
Kirkpatrick & Lockhart LLP Neuberger Berman, LLC
1800 Massachusetts Avenue, N.W. 2nd Floor 605 Third Avenue
Washington, DC 20036-1800 New York, New York 10158-3698
(Names addresses of agents for service)
Date of fiscal year end: October 31, 2003
Date of reporting period: October 31, 2003
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 STOCKHOLDERS
[NEUBERGER BERMAN LOGO]
A LEHMAN BROTHERS COMPANY
ANNUAL REPORT
OCTOBER 31, 2003
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, 2003
CHAIRMAN'S LETTER
Dear Fellow Shareholder,
I am pleased to present to you this annual report of the Neuberger Berman
Municipal Closed-End Funds, for the period ending October 31, 2003. The report
includes a listing of the Fund's investments and its 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 indicates 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 our conservative investing 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
NEUBERGER BERMAN INTERMEDIATE
MUNICIPAL CLOSED-END FUNDS
"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)2003 Neuberger Berman Management Inc. All
rights reserved.
CONTENTS
THE FUNDS
CHAIRMAN'S LETTER 1
PORTFOLIO COMMENTARIES/
PERFORMANCE HIGHLIGHTS
Intermediate Municipal Fund Inc. 2
California Intermediate Municipal Fund Inc. 3
New York Intermediate Municipal Fund Inc. 3
SCHEDULE OF INVESTMENTS
California Intermediate Municipal Fund Inc. 5
Intermediate Municipal Fund Inc. 9
New York Intermediate Municipal Fund Inc. 15
FINANCIAL STATEMENTS 20
FINANCIAL HIGHLIGHTS
PER SHARE DATA
California Intermediate Municipal Fund Inc. 30
Intermediate Municipal Fund Inc. 31
New York Intermediate Municipal Fund Inc. 32
REPORT OF INDEPENDENT AUDITORS 34
DIVIDEND REINVESTMENT PLAN 35
DIRECTORY 37
DIRECTORS AND OFFICERS 38
1
INTERMEDIATE MUNICIPAL CLOSED-END FUNDS PORTFOLIO COMMENTARIES
In their first year of operation, the Neuberger Berman Intermediate Municipal
closed-end funds achieved our objective of providing shareholders with stability
and income through investing in high-quality municipal securities portfolios. In
addition, we are pleased to report that on a Net Asset Value basis, all three of
Neuberger Berman's Intermediate Municipal closed-end funds outperformed their
Lehman 10-Year Municipal Bond Index benchmark in fiscal 2003.
In the second half of fiscal 2003, record new issuance, accompanied by softening
demand, resulting in part from investors moving back into the rallying stock
market, put downward pressure on municipal securities prices. Also, like the
Federal government, states and municipalities are confronted by declining tax
revenues and rising deficits, spawning investor concern regarding credit
quality. General Obligation bonds (GOs) came under pressure. New York and
California GOs were among the bigger casualties as huge state budget deficits
made headline news. Essential service (electric, water, and sewer) revenue
bonds, which are secured by revenues from essential service projects,
outperformed GOs.
In this unsettled environment, we have had to be quite nimble in all facets of
our investment strategy, altering portfolio weighted average maturity (WAM) and
duration in response to interest rate swings; shifting sector allocation to
sidestep problem areas and take advantage of evolving opportunities; and most
importantly, diligently evaluating credit quality. As the Funds' relative
performance indicates, we did a good job on all fronts.
Coming off a four-year bull market, bonds may be ready to take a breather. With
the economy gaining momentum, we can probably expect higher interest rates in
the year ahead. Regardless of what the fixed-income markets have in store for us
in the year ahead, we believe our commitment to quality, our securities
selection prowess, and our active duration management and sector allocation
strategies can add value. Markets will go up and down, but we will never waver
from our commitment to diligent research and "safety first" portfolio
management.
INTERMEDIATE MUNICIPAL FUND INC.
(AMEX: NBH)
For the six months ended October 31, 2003, on a Net Asset Value (NAV) basis, the
Intermediate Municipal Fund returned 1.61% compared to the Lehman 10-Year
Municipal Bond Index's 1.46% return. For the twelve months ended on the same
date, on an NAV basis, the Fund returned 6.87% versus the benchmark's 4.88%.
As of October 31, 2003, the portfolio was comprised of 74.5% revenue bonds,
23.8% general obligation bonds, and 1.7% cash and cash equivalents. Bonds
subject to the Alternative Minimum Tax (AMT) equaled 12.2% of assets. At the
close of the
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 6.87% 6.01% 6.35%
MARKET PRICE (5.95%) (8.44%) (6.44%)
AVERAGE ANNUAL TOTAL RETURN
(Life of Fund as of October 31, 2003)
NAV 6.04% 5.33% 5.70%
MARKET PRICE (5.40%) (7.68%) (5.85%)
INCEPTION DATE 09/24/2002 09/24/2002 09/24/2002
2
reporting period, the Fund's duration was 6.9 years, and the portfolio's
leverage position was 37.5% of assets.
CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC.
(AMEX: NBW)
For the six months ended October 31, 2003, on a Net Asset Value (NAV) basis, the
California Intermediate Municipal Fund returned 1.18% compared to the Lehman
10-Year Municipal Bond Index's 1.46% return. For the twelve months ended on the
same date, on an NAV basis, the Fund returned 6.01% versus the benchmark's
4.88%.
As of October 31, 2003, the portfolio was comprised of 87.7% revenue bonds,
10.9% general obligation bonds, and 1.4% cash and cash equivalents. Bonds
subject to the Alternative Minimum Tax (AMT) equaled 13.4% of assets. At the
close of the reporting period, the Fund's duration was 6.9 years, and the
portfolio's leverage position was 37.7% of assets.
NEW YORK INTERMEDIATE MUNICIPAL FUND INC.
(AMEX: NBO)
For the six months ended October 31, 2003, on a Net Asset Value (NAV) basis, the
New York Intermediate Municipal Fund returned 2.34% compared to the Lehman
10-Year Municipal Bond Index's 1.46% return. For the twelve months ended on the
same date, on an NAV basis, the Fund returned 6.35% versus the benchmark's
4.88%.
As of October 31, 2003, the portfolio was comprised of 95.0% revenue bonds, 3.6%
general obligation bonds, and 1.4% cash and cash equivalents. Bonds subject to
the Alternative Minimum Tax (AMT) equaled 16.5% of assets. At the close of the
reporting period, the Fund's duration was 6.8 years, the portfolio's leverage
position was 37.5% of assets.
Sincerely,
/s/ Theodore P. Giuliano
/s/ Thomas J. Brophy
/s/ Lori Canelli
TED GIULIANO, THOMAS BROPHY AND
LORI CANELL
PORTFOLIO CO-MANAGERS
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.
3
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 AVERAGE: An equally weighted average of those 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 INDEX: An equally weighted index, adjusted for 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 AVERAGE: An equally weighted average of those 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.
Please note that indices do not take into account any fees and expenses of
investing in individual securities that they track, and that investors cannot
invest directly in any index or average. Data about the performance of each
index are prepared or obtained by Management and include reinvestment of all
dividends and capital gain distributions. Each Fund may invest in securities not
included in its respective index.
4
SCHEDULE OF INVESTMENTS CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC.
PRINCIPAL AMOUNT SECURITY @ RATING ^ VALUE +
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
TAX-EXEMPT SECURITIES--BACKED BY INSURANCE (89.5%)
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 $ 1,324
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 1,084
1,000 Fresno (CA) Unified Sch. Dist. Ref. G.O., Ser. 2002 A,
6.00%, due 2/1/17 AAA 1,181
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 2,073
500 Long Beach (CA) Fin. Au. Rev., Ser. 1992, 6.00%, due 11/1/17 AAA 592
1,045 Marin Co. (CA) Muni. Wtr. Dist. Wtr. Ref. Rev., Ser. 2002,
5.00%, due 7/1/17 AAA 1,106
1,445 Oceanside (CA) Cert. of Participation Ref. Rev., Ser. 2003 A,
5.25%, due 4/1/14 AAA 1,593
2,600 Sacramento (CA) Muni. Util. Dist. Elec. Rev., Ser. 1997 K,
5.70%, due 7/1/17 AAA 3,003
500 Salinas Valley (CA) Solid Waste Au. Rev., Ser. 2002,
5.00%, due 8/1/06 AAA 541
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 2,174
2,500 San Jose (CA) Fin. Au. Lease Rev. (Civic Ctr. Proj.), Ser. 2002 B,
5.25%, due 6/1/17 AAA 2,702
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 1,001++
FINANCIAL GUARANTY INSURANCE CO.
2,550 Contra Costa (CA) Comm. College Dist. G.O., Ser. 2002,
5.25%, due 8/1/17 AAA 2,760
1,000 Kings Canyon (CA) Joint Unified Sch. Dist. G.O., Ser. 2002,
5.38%, due 8/1/17 Aaa AAA 1,092
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 5,344
1,090 Moreland (CA) Sch. Dist. Ref. G.O., Ser. 2002,
5.13%, due 9/1/17 AAA 1,167
535 Nevada & Placer Cos. (CA) Irrigation Dist. Cert. of Participation
Rev., Ser. 2002, 5.00%, due 1/1/16 AAA 571
565 Nevada & Placer Cos. (CA) Irrigation Dist. Cert. of Participation
Rev., Ser. 2002, 5.00%, due 1/1/17 AAA 598
1,045 Oakland (CA) G.O., Ser. 2002 A, 5.00%, due 1/15/15 AAA 1,119
1,210 Oakland (CA) G.O., Ser. 2002 A, 5.00%, due 1/15/18 AAA 1,270
1,290 Oakland (CA) Redev. Agcy. Sub. Tax Allocation Rev. (Central
Dist. Redev. Proj.), Ser. 2003, 5.50%, due 9/1/17 AAA 1,425
575 Port of Oakland (CA) Rev., Ser. 2002 M, 5.25%, due 11/1/17 AAA 623
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 2,751
2,000 San Diego (CA) Unified Sch. Dist. G.O., Ser. 2002 D,
5.25%, due 7/1/21 Aaa AAA 2,127
1,500 San Francisco (CA) City & Co. Int'l. Arpt. Second Ser.
Rev., 5.25%, due 5/1/16 AAA 1,563
FINANCIAL SECURITY ASSURANCE INC.
1,000 Burbank (CA) Pub. Svc. Dept. Elec. Rev., Ser. 1998,
5.13%, due 6/1/16 AAA 1,073
1,000 California Hsg. Fin. Agcy. Home Mtge. Rev., Ser. 2002 V,
4.60%, due 8/1/14 AAA 1,017
See Notes to Schedule of Investments
5
PRINCIPAL AMOUNT SECURITY @ RATING ^ VALUE +
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$ 2,000 California St. Dept. of Wtr. Res. Wtr. Rev., Ser. 2001 W,
5.50%, due 12/1/13 AAA $ 2,295
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 3,347
1,275 Los Angeles Co. (CA) Long Beach Unified Sch. Dist. G.O.,
Ser. 2002 D, 5.00%, due 8/1/17 AAA 1,349
500 Marin Co. (CA) Dixie Elementary Sch. Dist. G.O., Ser. 2000 A,
5.38%, due 8/1/17 AAA 548
3,000 Puerto Rico Muni. Fin. Agcy. Rev., Ser. 2002 A,
5.25%, due 8/1/17 AAA 3,267
1,000 Puerto Rico Muni. Fin. Agcy. Rev., Ser. 2002 A,
5.25%, due 8/1/21 Aaa AAA 1,065
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 5,273
1,000 San Jose (CA) Arpt. Ref. Rev., Ser. 2002 B,
5.00%, due 3/1/11 AAA 1,072
1,615 San Jose (CA) Arpt. Ref. Rev., Ser. 2002 B,
5.00%, due 3/1/12 AAA 1,719
1,620 Santa Clara Co. (CA) Fremont Union High Sch. Dist. G.O.,
Ser. 2002 C, 5.00%, due 9/1/20 Aaa AAA 1,682
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 1,366
4,000 California Poll. Ctrl. Fin. Au. Ref. PCR (Pacific Gas & Elec. Co.),
Ser. 1996 A, 5.35%, due 12/1/16 AAA 4,272++
2,835 Glendale (CA) Redev. Agcy. Tax Allocation Rev. (Central
Glendale Redev. Proj.), Ser. 2002, 5.00%, due 12/1/16 AAA 3,033
2,480 Glendale (CA) Redev. Agcy. Tax Allocation Rev. (Central
Glendale Redev. Proj.), Ser. 2002, 5.25%, due 12/1/17 AAA 2,694
3,890 Port of Oakland (CA) Ref. Rev., Ser. 2002 N,
5.00%, due 11/1/13 AAA 4,140
750 Santa Clara Co. (CA) Saratoga Union Sch. Dist. Ref. G.O.,
Ser. 1999, 5.13%, due 9/1/11 AAA 843
3,905 Solano Co. (CA) Cert. of Participation Rev., Ser. 2002,
5.25%, due 11/1/17 AAA 4,225
1,000 Univ. of California Regents Rev. (Multi. Purp. Proj.),
Ser. 2000 K, 5.00%, due 9/1/12 AAA 1,072
1,000 Puerto Rico Ind., Tourist, Ed., Med., & Env. Ctrl. Fac. Rev.
(Polytechnic Univ. Proj.), Ser. 2002 A, 5.25%, due 8/1/15 A 1,076++
--------------
87,212
--------------
TAX-EXEMPT SECURITIES--OTHER (68.8%)
780 Abag (CA) Fin. Au. Cert. of Participation Rev. (Channing House),
Ser. 1999, 4.90%, due 2/15/09 BBB+ 819++
3,050 Abag (CA) Fin. Au. Cert. of Participation Rev. (Episcopal
Homes Foundation), Ser. 1998, 5.13%, due 7/1/18 A- 2,915++
1,000 Abag (CA) Fin. Au. Rev. (San Diego Hosp. Assoc.),
Ser. 2003 C, 5.13%, due 3/1/18 Baa1 BBB+ 983++
900 Brazos (TX) River Au. Ref. PCR (TXU Energy Co. LLC Proj.),
Ser. 2003 A, 6.75%, due 4/1/38 Baa2 BBB 985++
750 Brazos (TX) River Au. Ref. Rev. (Reliant Energy, Inc. Proj.),
Ser. 1999 B, 7.75%, due 12/1/18 Ba1 BBB- 812++
6
PRINCIPAL AMOUNT SECURITY @ RATING ^ VALUE +
(000'S OMITTED) 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 $ 1,062++
910 California Co. (CA) Tobacco Securitization Agcy. Tobacco
Settlement Asset-Backed Rev., Ser. 2002, 4.75%, due 6/1/19 A1 A+ 871
1,750 California Ed. Fac. Au. Ref. Rev. (Stanford Univ.),
Ser. 2001 R, 5.00%, due 11/1/21 Aaa AAA 1,814++
2,000 California Hlth. Fac. Fin. Au. Rev. (Cedars-Sinai Med. Ctr.),
Ser. 1999 A, 6.13%, due 12/1/19 A3 2,166++
1,000 California Hlth. Fac. Fin. Au. Rev. (Kaiser Permanente),
Ser. 1998 B, 5.00%, due 10/1/20 AAA 1,001++
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 1,506++
2,500 California Poll. Ctrl. Fin. Au. Solid Waste Disp. Rev. (Waste
Management, Inc. Proj.), Ser. 2002 B, 4.45%, due 7/1/27 BBB 2,553++
1,000 California Poll. Ctrl. Fin. Au. Solid Waste Disp. Rev. (Waste
Management, Inc. Proj.), Ser. 2002 C, 4.85%, due 12/1/27 BBB 1,051++
1,000 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A,
5.38%, due 5/1/22 A3 BBB+ 1,023
4,500 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A,
5.75%, due 5/1/17 A3 BBB+ 4,911
2,250 California St. G.O., Ser. 2002, 5.00%, due 10/1/17 A1 A+ 2,304
1,000 California St. Univ., Fresno Assoc., Inc. Rev. (Auxiliary
Organization Event Ctr.), Ser. 2002, 5.00%, due 7/1/12 Baa3 BBB- 1,035
2,000 California Statewide CDA Cert. of Participation Rev. (Children's
Hosp. Los Angeles), Ser. 1999, 5.13%, due 8/15/19 A2 A+ 2,033++
2,000 California Statewide CDA Cert. of Participation Rev.
(The Internext Group), Ser. 1999, 5.38%, due 4/1/17 BBB 1,993++
5,000 California Statewide CDA Hlth. Fac. Rev. (Mem. Hlth. Svcs.),
Ser. 2003 A, 6.00%, due 10/1/16 A3 A 5,458++
3,000 California Statewide CDA Rev. (Kaiser Permanente),
Ser. 2002 E, 4.70%, due 11/1/36 A3 3,193++
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+ 1,043++
1,020 Cerritos (CA) Pub. Fin. Au. Sub. Tax Allocation Rev.
(Cerritos Redev. Proj.), Ser. 2002 B, 4.40%, due 11/1/16 BBB 957
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+ 1,048++
1,000 De Kalb Co. (GA) Dev. Au. Ref. PCR (General Motors Corp. Proj.),
Ser. 2002, 6.00%, due 3/15/21 A3 BBB 1,017++
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+ 1,202
1,270 Los Angeles (CA) Dept. of Wtr. & Pwr. Sys. Rev., Ser. 2001A, Sub.
Ser. A-3, 5.38%, due 7/1/20 Aa3 1,332
1,500 Morehouse Parish (LA) Ref. PCR (Int'l. Paper Co. Proj.),
Ser. 2001 A, 5.25%, due 11/15/13 Baa2 BBB 1,565++
1,405 North Carolina Muni. Pwr. Agcy. Number 1 Catawba Elec.
Rev., Ser. 2003 A, 5.50%, due 1/1/14 Baa1 BBB+ 1,516
605 Oakland (CA) Redev. Agcy. Rev. (Coliseum Area Redev. Proj.),
Ser. 2003, 5.00%, due 9/1/16 A- 620
635 Oakland (CA) Redev. Agcy. Rev. (Coliseum Area Redev. Proj.),
Ser. 2003, 5.00%, due 9/1/17 A- 646
See Notes to Schedule of Investments
7
PRINCIPAL AMOUNT SECURITY @ RATING ^ VALUE +
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$ 2,910 Puerto Rico Children's Trust Tobacco Settlement Asset-Backed
Rev., Ser. 2002, 5.38%, due 5/15/33 A1 A $ 2,623
440 Roseville (CA) Stone Point Comm. Fac. District No. 1 Special Tax,
Ser. 2003, 5.70%, due 9/1/17 BB+ 435
800 San Diego (CA) Cert. of Participation Rev. (Natural History
Museum), Ser. 1998, 5.50%, due 2/1/13 Baa3 741
830 San Diego (CA) Redev. Agcy. Sub. Parking Rev. (Centre City
Redev. Proj.), Ser. 2003 B, 4.80%, due 9/1/15 Baa2 A- 834
820 San Diego (CA) Redev. Agcy. Sub. Parking Rev. (Centre City
Redev. Proj.), Ser. 2003 B, 4.90%, due 9/1/16 Baa2 A- 826
3,000 San Francisco (CA) Bay Area Toll Au. Toll Bridge Rev.,
Ser. 2001 D, 5.00%, due 4/1/17 Aa3 AA 3,171
1,000 Santa Rosa (CA) Rancheria Tachi Yokut Tribe Enterprise Rev.,
Ser. 2003, 6.13%, due 3/1/13 BBB 995
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 1,063
2,250 Tobacco Settlement Fin. Corp. (LA) Tobacco Settlement
Asset-Backed Rev., Ser. 2001 B, 5.50%, due 5/15/30 A1 A 1,834
600 Univ. of California Regents Cert. of Participation Rev.
(San Diego Campus & Sacramento Proj.), Ser. 2002 A,
5.25%, due 1/1/18 Aa2 634
750 Verrado (AZ) Comm. Fac. Dist. Number 1 G.O., Ser. 2003,
6.15%, due 7/15/17 BB- 748
750 Virgin Islands Pub. Fin. Au. Rev. (Virgin Island Matching Fund
Loan Notes), Ser. 1998 E, 6.00%, due 10/1/22 BBB 758
1,000 Virgin Islands Wtr. & Pwr. Au. Elec. Sys. Ref. Rev., Ser. 1998,
5.30%, due 7/1/18 BBB 999
--------------
67,095
--------------
TOTAL INVESTMENTS (158.3%) (COST $153,279) 154,307##
Cash, receivables and other assets, less liabilities (2.2%) 2,194
Liquidation Value of Auction Market Preferred shares [(60.5%)] (59,000)
--------------
TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS (100.0%) $ 97,501
--------------
8
SCHEDULE OF INVESTMENTS INTERMEDIATE MUNICIPAL FUND INC.
PRINCIPAL AMOUNT SECURITY @ RATING ^ VALUE +
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
TAX-EXEMPT SECURITIES--ESCROWED IN U.S. GOVERNMENT SECURITIES (0.7%)
$ 1,670 Illinois Metro. Pier & Exposition Au. Rev., Ser. 1998 A,
5.50%, due 6/15/17 AAA $ 1,910
--------------
TAX-EXEMPT SECURITIES--BACKED BY INSURANCE (75.8%)
AMERICAN MUNICIPAL BOND ASSURANCE CORP.
1,500 California St. Pub. Works Board Lease Rev., Ser. 2002 A,
5.25%, due 12/1/17 AAA 1,617
5,000 Chicago (IL) G.O., Ser. 1995 A-2, 6.25%, due 1/1/13 Aaa AAA 5,919
6,120 Chicago (IL) G.O., Ser. 2002 A, 5.38%, due 1/1/17 Aaa AAA 6,633
4,220 Colorado Springs (CO) Util. Sys. Sub. Lien Ref. Rev.,
Ser. 2002 A, 5.38%, due 11/15/18 AAA 4,576
4,100 Fargo (ND) Hlth. Sys. Rev. (Meritcare Obligated Group),
Ser. 2002 A, 5.63%, due 6/1/17 AAA 4,493++
1,065 Indiana St. Recreational Dev. Comm. Rev., Ser. 2002,
5.25%, due 7/1/18 AAA 1,134
1,125 Indiana St. Recreational Dev. Comm. Rev., Ser. 2002,
5.25%, due 7/1/19 AAA 1,191
3,000 Massachusetts Port Au. Spec. Fac. Rev. (Delta Air Lines, Inc. Proj.),
Ser. 2001 A, 5.50%, due 1/1/19 AAA 3,116++
5,010 New Hampshire Hlth. & Ed. Fac. Au. Rev. (Univ. Sys. of
New Hampshire), Ser. 1992, 5.38%, due 7/1/17 AAA 5,486
7,000 Palm Beach Co. (FL) Sch. Board Cert. of Participation,
Ser. 2001 B, 5.38%, due 8/1/17 AAA 7,623
4,610 Thornton (CO) Cert. of Participation, Ser. 2002,
5.38%, due 12/1/16 Aaa AAA 5,074
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 4,257
3,075 Detroit (MI) Sch. Dist. Sch. Bldg. & Site Imp. G.O., Ser. 2002 A,
5.50%, due 5/1/15 AAA 3,444
3,235 Houston (TX) Arpt. Sys. Sub. Lien. Ref. Rev., Ser. 2001 A,
5.50%, due 7/1/16 AAA 3,440
4,355 Las Vegas (NV) Valley Wtr. Dist. Ref. & Wtr. Imp. G.O.,
Ser. 2003 A, 5.25%, due 6/1/16 Aaa AAA 4,725
4,935 Massachusetts St. Hlth. & Ed. Fac. Au. Rev. (New England
Med. Ctr. Hosp.), Ser. 2002 H, 5.38%, due 5/15/16 AAA 5,358++
2,140 Mt. Pleasant Town (SC) Waterworks & Swr. Sys. Ref. & Imp.
Rev., Ser. 2002, 5.25%, due 12/1/17 AAA 2,317
2,080 Oakland (CA) Redev. Agcy. Sub. Tax Allocation Rev.
(Central Dist. Redev. Proj.), Ser. 2003, 5.50%, due 9/1/18 AAA 2,284
8,140 Orange Co. (FL) Sales Tax Ref. Rev., Ser. 2002 A,
5.13%, due 1/1/18 Aaa AAA 8,657
2,000 Philadelphia (PA) Arpt. Ref. Rev. (Philadelphia Arpt. Sys.),
Ser. 1998 A, 5.38%, due 6/15/14 AAA 2,146
6,250 Port of Seattle (WA) Sub Lien Rev., Ser. 2002 B,
5.50%, due 9/1/16 AAA 6,673
5,500 Prince Georges Co. (MD) Cons. Pub. Imp. G.O., Ser. 2001,
5.25%, due 12/1/16 Aaa AAA 6,027
1,000 Sarasota Co. (FL) Util. Sys. Ref. Rev., Ser. 2002 C,
5.25%, due 10/1/20 Aaa AAA 1,062
2,500 Tacoma (WA) Wtr. Sys. Rev., Ser. 2001, 5.13%, due 12/1/19 AAA 2,630
See Notes to Schedule of Investments
9
PRINCIPAL AMOUNT SECURITY @ RATING ^ VALUE +
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
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 $ 3,829
1,100 Charleston Co. (SC) Sch. Dist. G.O., Ser. 2001,
5.00%, due 2/1/18 Aa1 1,155
3,600 Corpus Christi (TX) Tax & Muni. Hotel Occupancy Tax G.O.,
Ser. 2002, 5.50%, due 9/1/17 AAA 3,956
8,800 Energy Northwest (WA) Elec. Ref. Rev. (Proj. No. 3),
Ser. 2001 A, 5.50%, due 7/1/17 Aaa AAA 9,607
7,000 Harris Co. (TX) Toll Road Sr. Lien Ref. Rev., Ser. 2002,
5.38%, due 8/15/16 AAA 7,674
2,580 Indianapolis (IN) Local Pub. Imp. Rev. (Indianapolis Arpt. Au. Proj.),
Ser. 2003 A, 5.63%, due 1/1/17 AAA 2,772
2,000 Kane, Cooke, & DuPage Cos. (IL) Elgin Sch. Dist.
Number U-46 G.O., Ser. 1998, 5.35%, due 1/1/15 Aaa 2,192
5,000 King & Snohomish Cos. (WA) Northshore Sch. Dist.
Number 417 G.O., Ser. 2002, 5.50%, due 12/1/17 Aaa AAA 5,483
4,260 King Co. (WA) Pub. Trans. Sales Tax Ref. G.O., Ser. 2002,
5.38%, due 12/1/14 Aaa AAA 4,719
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 3,272++
1,725 Maine Muni. Bond Bank Rev., Ser. 1998 C,
5.35%, due 11/1/18 AAA 1,875
5,000 New Jersey Bldg. Au. St. Bldg. Ref. Rev., Ser. 2002 B,
5.25%, due 12/15/15 AAA 5,494
4,665 South Carolina St. Pub. Svc. Au. Rev., Ser. 2002 B,
5.38%, due 1/1/18 Aaa AAA 5,030
4,200 Tarrant (TX) Reg. Wtr. Dist. Wtr. Ref. & Imp. Rev., Ser. 2002,
5.38%, due 3/1/16 Aaa AAA 4,615
5,395 Truckee Meadows (NV) Wtr. Au. Wtr. Rev., Ser. 2001 A,
5.50%, due 7/1/15 AAA 6,000
1,370 Wisconsin Hlth. & Ed. Fac. Au. Rev. (Aurora Med. Group,
Inc. Proj.), Ser. 1996, 6.00%, due 11/15/11 Aaa AAA 1,586++
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 1,581
3,000 CDP-King Co. III (WA) Lease Rev. (King Street Ctr. Proj.),
Ser. 1997, 5.13%, due 6/1/17 Aaa AAA 3,100
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 5,833
4,575 Henry Co. (GA) Wtr. & Swr. Au. Wtr. & Swr. Ref. Rev.,
Ser. 2002 A, 5.13%, due 2/1/17 Aaa AAA 4,960
4,955 Houston (TX) Pub. Imp. Ref. G.O., Ser. 2002,
5.25%, due 3/1/17 AAA 5,328
5,000 Illinois G.O., First Ser. 2002, 5.25%, due 10/1/14 Aaa 5,484
3,000 Illinois Hlth. Fac. Au. Rev. (Loyola Univ. Hlth. Sys.),
Ser. 1997 A, 6.00%, due 7/1/14 Aaa AAA 3,488++
1,000 Indiana Muni. Pwr. Agcy. Pwr. Supply Sys. Rev., Ser. 2002 B,
5.25%, due 1/1/18 Aaa AAA 1,069
1,850 Massachusetts St. G.O., Ser. 2002 E, 5.38%, due 1/1/18 AAA 2,092
5,000 Michigan St. Hsg. Dev. Au. Single-Family Mtge. Rev.,
Ser. 2001 A, 5.30%, due 12/1/16 AAA 5,213
10
PRINCIPAL AMOUNT SECURITY @ RATING ^ VALUE +
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$ 2,710 Newnan (GA) Hosp. Au. Rev. Anticipation Cert.
(Newnan Hosp. Inc. Proj.), Ser. 2002, 5.50%, due 1/1/18 Aaa $ 2,956++
1,910 Southmost (TX) Reg. Wtr. Au. Wtr. Supply Contract Rev.
(Desalination Plant Proj.), Ser. 2002, 5.50%, due 9/1/19 Aaa 2,075
1,000 Trinity (TX) River Au. Imp. & Ref. Rev. (Tarrant Co. Wtr. Proj.),
Ser. 2003, 5.50%, due 2/1/16 AAA 1,109
4,555 Washington St. G.O., Ser. 1998 C, 6.00%, due 7/1/12 AAA 5,333
7,205 Wisconsin St. G.O., Ser. 2002 C, 5.25%, due 5/1/17 Aaa AAA 7,763
--------------
226,525
--------------
TAX-EXEMPT SECURITIES--OTHER (80.8%)
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 4,055++
1,000 Austin (TX) Convention Enterprises, Inc. Convention Ctr. Hotel
First Tier Rev., Ser. 2001 A, 6.38%, due 1/1/16 Baa3 BBB- 1,071
2,000 Badger (WI) Tobacco Asset Securitization Corp. Tobacco
Settlement Asset-Backed Rev., Ser. 2002, 5.50%, due 6/1/10 A1 A 1,966
3,750 Badger (WI) Tobacco Asset Securitization Corp. Tobacco
Settlement Asset-Backed Rev. (Boone Hosp. Ctr.), Ser. 2002,
6.13%, due 6/1/27 A1 A 3,422
2,000 Boone Co. (MO) Hosp. Ref. Rev., Ser. 2002,
5.05%, due 8/1/20 A3 2,021++
2,425 Branson (MO) Dev. Fin. Board Infrastructure Fac. Board Rev.,
Ser. 2003 A, 5.00%, due 12/1/17 Baa1 2,455
3,300 Brazos (TX) River Au. Ref. PCR (TXU Energy Co. LLC Proj.),
Ser. 2003 A, 6.75%, due 4/1/38 Baa2 BBB 3,610++
1,000 Brazos (TX) River Au. Ref. PCR (TXU Energy Co. LLC Proj.),
Ser. 2003 D, 5.40%, due 10/1/29 Baa2 1,032++
1,000 Brazos (TX) River Au. Ref. Rev. (Reliant Energy, Inc. Proj.),
Ser. 1999 B, 7.75%, due 12/1/18 Ba1 BBB- 1,082++
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 A3 A 4,213++
2,500 Broward Co. (FL) G.O., Ser. 2001 A, 5.25%, due 1/1/18 Aa1 2,689
5,000 Burke Co. (GA) Dev. Au. PCR (Georgia Pwr. Co. Plant Vogtle Proj.),
Ser. 2001, 4.45%, due 1/1/32 A2 A 5,338++
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 3,514++
3,460 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A,
5.38%, due 5/1/22 A3 BBB+ 3,540
2,500 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A,
5.75%, due 5/1/17 A3 BBB+ 2,729
1,240 California Statewide CDA Hlth. Fac. Rev. (Mem. Hlth. Svcs.),
Ser. 2003 A, 6.00%, due 10/1/16 A3 A 1,354++
1,500 Chicago (IL) Metro. Wtr. Reclamation Dist. Cap. Imp. G.O.,
Ser. 2002 C, 5.38%, due 12/1/16 AAA 1,647
1,000 Clark Co. (WA) Vancouver Sch. Dist. Number 37 G.O.,
Ser. 1998, 5.13%, due 12/1/12 A3 1,109
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+ 1,844++
4,210 DCH Hlth. Care Au. (AL) Hlth. Care Fac. Rev., Ser. 2002,
5.25%, due 6/1/14 A1 A+ 4,433
1,000 Delaware River (PA-NJ) Joint Toll Bridge Comm. Sys. Rev.,
Ser. 2003, 5.25%, due 7/1/18 A2 A- 1,061
See Notes to Schedule of Investments
11
PRINCIPAL AMOUNT SECURITY @ RATING ^ VALUE +
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$ 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 $ 1,103
2,000 Denver (CO) City & Co. Arpt. Sys. Rev., Ser. 1991 D,
7.75%, due 11/15/13 AAA 2,524
4,495 Dist. of Columbia (Washington, D.C.) Ref. G.O., Ser. 2002 C,
5.25%, due 6/1/13 AAA 4,877
1,750 Ector Co. (TX) Dist. Hosp. Rev., Ser. 2002 A,
5.63%, due 4/15/16 A2 A- 1,798
1,745 Ector Co. (TX) Dist. Hosp. Rev., Ser. 2002 A,
5.63%, due 4/15/17 A2 A- 1,785
3,000 Fiddlers Creek (FL) Comm. Dev. Dist. Number 2 Spec.
Assessment Rev., Ser. 2003 A, 6.00%, due 5/1/16 BB- 2,971
825 Fort Bend Co. (TX) Ind. Dev. Corp. Ref. PCR (Frito-Lay, Inc. Proj.),
Ser. 1987, 3.00%, due 10/1/11 A1 843++
2,000 Freeborn Co. (MN) Hsg. & Redev. Au. Lease Rev.
(Criminal Justice Ctr. Proj.), Ser. 2002, 5.38%, due 2/1/17 Baa1 2,053
5,000 Golden St. (CA) Tobacco Securitization Corp. Tobacco
Settlement Asset-Backed Rev., Ser. 2003 A-1,
6.25%, due 6/1/33 A1 A 4,405
5,130 Illinois Ed. Fac. Au. Rev. (Field Museum of Natural History),
Ser. 2002, 4.30%, due 11/1/36 A2 A 5,155++
10,000 Indiana Bond Bank Rev. (St. Revolving Fund Prog.),
Ser. 2001 A, 5.38%, due 2/1/17 AAA 10,985
3,560 Indiana Bond Bank Rev., Ser. 2002 B, 5.25%, due 2/1/18 Baa2 A- 3,824
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 2,168++
1,070 Ingham & Clinton Cos. (MI) East Lansing Bldg. Au. Ref. G.O.,
Ser. 1999, 5.25%, due 10/1/16 AA 1,163
3,000 Iowa Tobacco Settlement Au. Tobacco Settlement Asset-Backed
Rev., Ser. 2001 B, 5.30%, due 6/1/25 A1 A 2,375
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 2,133++
1,050 Kent Co. (MI) Forest Hills Pub. Sch. Unlimited G.O.,
Ser. 2000, 5.25%, due 5/1/19 Aa2 1,119
2,000 Lehigh Co. (PA) Gen. Purp. Au. Rev. (KidsPeace Oblig. Group.),
Ser. 1998, 6.00%, due 11/1/23 Ba2 1,906++
2,000 Lubbock (TX) Hlth. Fac. Dev. Corp. Rev. (St. Joseph Hlth. Sys.),
Ser. 1998, 5.25%, due 7/1/16 Aa3 AA- 2,073++
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 1,036++
1,000 Maryland St. Hlth. & Higher Ed. Fac. Au. Rev.
(Union Hosp. of Cecil Co.), Ser. 2002, 5.50%, due 7/1/14 A3 1,076++
2,400 Mashantucket (CT) Western Pequot Tribe Spec. Rev., Sub.
Ser. 1997 B, 5.70%, due 9/1/12 Baa3 2,542**
2,450 Massachusetts St. Hlth. & Ed. Fac. Au. Rev.
(Caritas Christi Oblig. Group), Ser. 1999 A, 5.70%, due 7/1/15 A+ 2,301++
2,810 Massachusetts St. Hlth. & Ed. Fac. Au. Rev.
(Milford-Whitinsville Reg. Hosp.), Ser. 1998 C,
5.75%, due 7/15/13 Baa2 BBB 2,880++
5,000 Massachusetts St. Wtr. Poll. Abatement Trust Rev.,
Ser. 2001-7, 5.25%, due 2/1/16 AAA 5,433
5,030 Massachusetts St. Wtr. Poll. Abatement Trust Rev.
(MWRA Prog.), Ser. 2002 A, 5.25%, due 8/1/19 Aaa AAA 5,379
12
PRINCIPAL AMOUNT SECURITY @ RATING ^ VALUE +
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$ 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 $ 3,277++
1,500 Michigan St. Bldg. Au. Rev. (Fac. Prog.), Ser. 2001 II,
5.50%, due 10/15/18 Aa1 AA+ 1,655
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 2,798++
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 2,235
840 Missouri St. Hsg. Dev. Comm. Multi-Family Hsg. Rev.,
Ser. 2001 III, 5.05%, due 2/1/15 AA 883
1,345 Missouri St. Hsg. Dev. Comm. Multi-Family Hsg. Rev.,
Ser. 2001 II, 5.25%, due 12/1/16 AA 1,408
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 5,004++
3,000 Moraine (OH) Solid Waste Disp. Rev. (General Motors
Corp. Proj.), Ser. 1994, 6.75%, due 7/1/14 A3 BBB 3,276++
2,500 Morehouse Parish (LA) Ref. PCR (Int'l. Paper Co. Proj.),
Ser. 2001 A, 5.25%, due 11/15/13 Baa2 BBB 2,609++
2,000 Nevada St. Cap. Imp. Ltd. G.O., Ser. 1998 B,
5.13%, due 4/15/17 Aa2 2,127
1,375 New Haven (MI) Comm. Sch. G.O., Ser. 2002,
5.25%, due 5/1/17 AAA 1,488
6,900 New Jersey Ed. Fac. Au. Rev. (Stevens Institute of Technology),
Ser. 2002 C, 5.25%, due 7/1/17 Baa1 A- 7,208++
4,000 New Jersey Hlth. Care Fac. Fin. Au. Rev.
(Somerset Med. Ctr. Issue), Ser. 2003, 5.50%, due 7/1/18 Baa2 4,057++
3,250 New York City (NY) G.O., Ser. 2002 C, 5.50%, due 8/1/15 A2 3,509
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 2,780++
1,000 New York Convention Ctr. Operating Corp. Cert. of Participation
(Yale Bldg. Acquisition Proj.), Ser. 2003, 5.25%, due 6/1/08 BB+ 999
3,500 New York St. Dorm. Au. Personal Income Tax Rev., Ser. 2003 A,
5.38%, due 3/15/20 AA 3,760
1,000 New York St. Dorm. Au. Rev. (Mount Sinai NYU Hlth. Oblig. Group),
Ser. 2000 C, 6.00%, due 7/1/26 Baa3 1,010++
1,300 New York St. Urban Dev. Corp. Ref. Rev. (Correctional Cap. Fac.),
Ser. 1998, 5.00%, due 1/1/14 A3 AA- 1,366
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- 4,988++
3,760 Ohio Air Quality Dev. Au. Env. Imp. Ref. Rev. (USX Corp. Proj.),
Ser. 1995, 5.00%, due 11/1/15 Baa1 3,938++
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+ 2,176++
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- 4,419++
2,260 San Antonio (TX) Cert. of Obligation G.O., Ser. 2002,
5.00%, due 2/1/14 Aa2 2,426
6,795 San Antonio (TX) Ind. Sch. Dist. Unlimited Tax G.O.,
Ser. 2001 B, 5.38%, due 8/15/17 Aaa AAA 7,415
740 San Diego (CA) Redev. Agcy. Sub. Parking Rev.
(Centre City Redev. Proj.), Ser. 2003 B, 5.00%, due 9/1/17 Baa2 A- 747
2,000 Sayre (PA) Hlth. Care Fac. Au. Rev. (Guthrie Hlth. Proj.),
Ser. 2002 A, 5.75%, due 12/1/21 A- 2,061++
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 2,472++
See Notes to Schedule of Investments
13
PRINCIPAL AMOUNT SECURITY @ RATING ^ VALUE +
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$ 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 $ 2,026++
155 Spokane Co. (WA) Ltd. Tax G.O., Ser. 1998,
5.10%, due 12/1/17 Aa3 164
2,500 St. Louis (MO) IDA Rev. (St. Louis Convention Ctr. Headquarters
Hotel Proj.), Ser. 2000 A, 7.00%, due 12/15/15 Baa3 2,448++
2,540 St. Paul (MN) Port Au. Lease Rev. (Office Bldg. at Cedar Street),
Ser. 2002, 5.00%, due 12/1/17 Aa1 2,692
500 Texas Std. Hsg. Corp. Std. Hsg. Rev. (Midwestern St. Univ. Proj.),
Ser. 2002, 5.50%, due 9/1/12 Baa3 494
1,000 Tobacco Settlement Fin. Corp. (LA) Tobacco Settlement
Asset-Backed Rev., Ser. 2001 B, 5.50%, due 5/15/30 A1 A 815
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 1,117
3,500 Union Co. (SC) IDR (Federal Paper Board Co., Inc. Proj.),
Ser. 1989, 4.55%, due 11/1/09 Baa2 BBB 3,630++
2,950 Univ. of Texas Board of Regents Fin. Sys. Rev., Ser. 1999 B,
5.38%, due 8/15/18 AAA 3,206
1,900 Univ. of Wisconsin Hosp. & Clinics Au. Hosp. Rev.,
Ser. 2002 B, 5.50%, due 4/1/12 A1 2,035
1,750 Verrado (AZ) Comm. Fac. Dist. Number 1 G.O., Ser. 2003,
6.15%, due 7/15/17 BB- 1,745
3,125 Washington St. Hlth. Care Fac. Au. Rev. (Yakima Valley Mem.
Hosp. Assoc.), Ser. 2002, 5.00%, due 12/1/17 A 3,148++
1,000 Washington St. Var. Purp. G.O., Ser. 1999 A,
4.75%, due 7/1/17 Aa1 AA+ 1,017
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 2,079++
2,780 Wisconsin St. Hlth. & Ed. Fac. Au. Rev. (Kenosha Hosp. &
Med. Ctr., Inc. Proj.), Ser. 1999, 5.50%, due 5/15/15 A 2,883++
--------------
241,682
--------------
TAX-EXEMPT CASH EQUIVALENT SECURITIES--BACKED BY LETTERS OF CREDIT (0.0%)
SOCIETE GENERALE
100 Los Angeles (CA) Reg. Arpt. Imp. Corp. Term. Fac. Completion Rev.
(Los Angeles Int'l. Arpt.), Ser. 1989, 0.79%, VRDN due 12/1/25 A-1+ 100++
--------------
TAX-EXEMPT CASH EQUIVALENT SECURITIES--BACKED BY INSURANCE (0.4%)
FINANCIAL SECURITY ASSURANCE INC.
1,300 Clark Co. (NV) Sch. Dist. G.O., Ser. 2001 B,
0.89%, VRDN due 6/15/21 P-1 A-1+ 1,300
--------------
TOTAL INVESTMENTS (157.7%) (COST $465,933) 471,517##
Cash, receivables and other assets, less liabilities (2.3%) 6,954
Liquidation value of Auction Market Preferred Shares [(60.0%)] (179,400)
--------------
TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS (100.0%) $ 299,071
--------------
14
SCHEDULE OF INVESTMENTS NEW YORK INTERMEDIATE MUNICIPAL FUND INC.
PRINCIPAL AMOUNT SECURITY @ RATING ^ VALUE +
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
TAX-EXEMPT SECURITIES--BACKED BY INSURANCE (35.5%)
AMERICAN CAPITAL ACCESS
$ 1,060 Puerto Rico Ind., Tourist Ed., Med. & Env. Ctrl. Fac. Fin. Au.
Higher Ed. Rev., (Polytechnic Univ. Proj.), Ser. 2002 A,
5.25%, due 8/1/16 A $ 1,133++
AMERICAN MUNICIPAL BOND ASSURANCE CORP.
2,000 Metro. Trans. Au. (NY) Ref. Rev., Ser. 2002 A,
5.50%, due 11/15/15 AAA 2,243
2,920 New York City (NY) IDA Civic Fac. Rev. (Packer Collegiate
Institute Proj.), Ser. 2002, 5.00%, due 6/1/22 AAA 2,994++
960 New York City (NY) Muni. Wtr. Fin. Au. Wtr. & Swr. Sys. Rev.,
Ser. 1992 A, 5.88%, due 6/15/13 Aaa 1,121
2,025 New York City (NY) Transitional Fin. Au. Ref. Rev., Ser. 2002 C,
5.25%, due 8/1/17 AAA 2,195
2,410 New York St. Dorm. Au. Rev. (Rochester Institute of Technology
Proj.), Ser. 2002 A, 5.25%, due 7/1/19 Aaa 2,579++
3,000 Port Authority of NY & NJ Rev., Ser. 2002, 5.50%,
due 12/15/12 AAA 3,332
1,535 Ulster Co. (NY) Res. Rec. Agcy. Solid Waste Sys. Ref. Rev.,
Ser. 2002, 5.25%, due 3/1/16 AAA 1,662
FINANCIAL GUARANTY INSURANCE CO.
3,005 Metro. Trans. Au. (NY) Dedicated Tax Fund Rev., Ser. 2001 A,
5.25%, due 11/15/14 AAA 3,298
FINANCIAL SECURITY ASSURANCE INC.
500 Long Island (NY) Pwr. Au. Elec. Sys. Rev., Ser. 1998 A, 5.13%,
due 12/1/16 Aaa AAA 541
1,410 New York City (NY) Hlth. & Hosp. Corp. Rev., Ser. 2002 A,
5.50%, due 2/15/13 AAA 1,579
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 2,060++
1,600 New York St. Dorm. Au. Insured Rev. (The Culinary Institute of
America), Ser. 1999, 5.38%, due 7/1/15 AAA 1,771++
1,980 New York St. Dorm. Au. Rev. (New York Med. College Proj.),
Ser. 1998, 5.00%, due 7/1/21 Aaa AAA 2,039++
--------------
28,547
--------------
TAX-EXEMPT SECURITIES--OTHER (122.3%)
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 3,148
800 Brazos (TX) River Au. Ref. PCR (TXU Energy Co. LLC Proj.),
Ser. 2003 A, 6.75%, due 4/1/38 Baa2 BBB 875++
750 Brazos (TX) River Au. Ref. Rev. (Reliant Energy, Inc. Proj.),
Ser. 1999 B, 7.75%, due 12/1/18 Ba1 BBB- 812++
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 1,062++
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+ 1,670++
1,000 De Kalb Co. (GA) Dev. Au. Ref. PCR (General Motors Corp. Proj.),
Ser. 2002, 6.00%, due 3/15/21 A3 BBB 1,017++
1,000 Dutchess Co. (NY) IDA Civic Fac. Ref. Rev. (Marist College Proj.),
Ser. 2003 A, 5.15%, due 7/1/17 Baa1 1,031++
See Notes to Schedule of Investments
15
PRINCIPAL AMOUNT SECURITY @ RATING ^ VALUE +
(000'S OMITTED) 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+ $ 2,199++
585 Kenmore Village (NY) Hsg. Au. Std. Hsg. Rev. (St. Univ. of N.Y. at
Buffalo Std. Apt. Proj.), Ser. 1999 A, 5.40%, due 8/1/12 Baa1 AA 644
2,000 Long Island Pwr. Au. (NY) Elec. Sys. Gen. Rev., Ser. 1998 A,
5.50%, due 12/1/13 Aaa AAA 2,312
1,000 Monroe (NY) Newpower Corp. Pwr. Fac. Rev., Ser. 2003, 5.10%,
due 1/1/16 BBB+ 1,021
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 971++
1,000 Monroe Co. (NY) Pub. Imp. Ref. G.O., Ser. 1996, 6.00%,
due 3/1/13 A3 AA- 1,152
1,000 Morehouse Parish (LA) Ref. PCR (Int'l. Paper Co. Proj.),
Ser. 2001 A, 5.25%, due 11/15/13 Baa2 BBB 1,044++
1,000 New York City (NY) G.O., Ser. 1998 J, 5.00%, due 8/1/11 A2 A 1,053
1,000 New York City (NY) G.O., Ser. 2002 A, 5.75%, due 8/1/16 A2 A 1,091
750 New York City (NY) G.O., Ser. 2002 C, 5.50%, due 8/1/15 A2 810
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 4,013
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 1,070++
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 1,087++
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 4,364
3,000 New York City (NY) Transitional Fin. Au. Ref. Rev., Ser. 2002 B,
5.25%, due 2/1/29 Aa2 3,281
800 New York Convention Ctr. Operating Corp. Cert. of Participation
(Yale Bldg. Acquisition Proj.), Ser. 2003, 5.25%, due 6/1/08 Aa1 799
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 2,160
1,675 New York St. Dorm. Au. Insured Rev. (Long Island Univ.),
Ser. 2003 A, 5.25%, due 9/1/15 AA 1,819++
3,000 New York St. Dorm. Au. Ref. Rev. (North Gen. Hosp. Proj.),
Ser. 2003, 5.75%, due 2/15/17 AA- 3,332++
1,125 New York St. Dorm. Au. Rev. (City Univ. Sys. Proj.), Ser. 1995 A,
5.63%, due 7/1/16 A3 AA- 1,272
1,010 New York St. Dorm. Au. Rev. (Columbia Univ. Proj.), Ser. 2001 A,
5.25%, due 7/1/16 AAA 1,106++
2,985 New York St. Dorm. Au. Rev. (Lenox Hill Hosp. Oblig. Group Proj.),
Ser. 2001, 5.75%, due 7/1/14 A3 3,264++
2,000 New York St. Dorm. Au. Rev. (Lenox Hill Hosp. Oblig. Group Proj.),
Ser. 2001, 5.75%, due 7/1/16 A3 A- 2,157++
2,500 New York St. Dorm. Au. Rev. (Mount Sinai NYU Hlth. Oblig. Group),
Ser. 2000 B, 6.25%, due 7/1/22 Baa3 2,533++
500 New York St. Dorm. Au. Rev. (North Shore-Long Island Jewish
Oblig. Group), Ser. 2003, 5.00%, due 5/1/18 A3 512++
2,855 New York St. Dorm. Au. Rev. (Rivington House Hlth. Care Fac.),
Ser. 2002, 5.25%, due 11/1/15 Aa1 3,066++
3,000 New York St. Dorm. Au. Rev. (SS Joachim & Anne Residence Proj.),
Ser. 2002, 4.60%, due 7/1/16 Aa3 3,011
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++
16
PRINCIPAL AMOUNT SECURITY @ RATING ^ VALUE +
(000'S OMITTED) MOODY'S S&P (000'S OMITTED)
$ 5,500 New York St. Dorm. Au. St. Personal Income Tax Rev., Ser. 2003 A,
5.38%, due 3/15/17 AA $ 6,014
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- 1,083
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+ 5,046++
2,000 New York St. Mtge. Agcy. Homeowner Mtge. Rev., Ser. 1997-67,
5.70%, due 10/1/17 Aa1 2,131
2,000 New York St. Pwr. Au. Rev., Ser. 2002 A, 5.25%, due 11/15/16 Aa2 AA- 2,182
500 New York St. Urban Dev. Corp. Correctional & Youth Fac. Svc. Rev.,
Ser. 2002 C, 4.00%, due 1/1/20 AA- 510
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- 1,536
2,000 Niagara Co. (NY) IDA Civic Fac. Rev. (Niagara Univ. Proj.),
Ser. 2001 A, 5.50%, due 11/1/16 AA 2,167++
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 2,603++
1,000 North Carolina Muni. Pwr. Agcy. Number 1 Catawba Elec. Rev.,
Ser. 2003 A, 5.50%, due 1/1/14 Baa1 BBB+ 1,079
970 Puerto Rico Children's Trust Tobacco Settlement Asset-Backed
Rev., Ser. 2002, 5.38%, due 5/15/33 A1 A 874
1,000 Santa Rosa (CA) Rancheria Tachi Yokut Tribe Enterprise Rev.,
Ser. 2003, 6.13%, due 3/1/13 BBB 995
1,000 Tobacco Settlement Fin. Corp. (LA) Tobacco Settlement
Asset-Backed Rev., Ser. 2001 B, 5.50%, due 5/15/30 A1 A 815
3,000 Triborough Bridge & Tunnel Au. (NY) Gen. Purp. Ref. Rev.,
Ser. 2002 B, 5.25%, due 11/15/18 Aa3 AA- 3,228
1,100 Triborough Bridge & Tunnel Au. (NY) Gen. Purp. Rev., Ser. 2001 A,
5.00%, due 1/1/19 Aa3 AA- 1,143
2,390 TSASC, Inc. (NY) Tobacco Flexible Amortization Rev., Ser. 1999-1,
5.70%, due 7/15/14 A1 A 2,436
500 Verrado (AZ) Comm. Fac. Dist. Number 1 G.O., Ser. 2003,
6.15%, due 7/15/17 BB- 499
750 Virgin Islands Pub. Fin. Au. Rev. (Sub. Lien/Cap. Proj.),
Ser. 1998 E, 6.00%, due 10/1/22 BBB 758
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 990++
1,000 Yonkers (NY) Ind. Dev. Agcy. Civic Fac. Rev. (Comm. Dev.
Properties - Yonkers, Inc.), Ser. 2001 A, 6.25%, due 2/1/16 Baa3 BBB- 1,067++
--------------
98,177
--------------
TOTAL INVESTMENTS (157.8%) (COST $125,182) 126,724##
Cash, receivables and other assets, less liabilities (2.3%) 1,812
Liquidation value of Auction Market Preferred Shares [(60.1%)] (48,250)
--------------
TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS (100.0%) $ 80,286
--------------
See Notes to Schedule of Investments
17
NOTES TO SCHEDULE OF INVESTMENTS
+ Investment securities of the Fund 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 directors
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") (individually a "Fund", collectively, the "Funds"),
believe 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, 2003, 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 INTERMEDIATE MUNICIPAL FUND INC. $ 153,279 $ 2,030 $ 1,002 $ 1,028
INTERMEDIATE MUNICIPAL FUND INC. 465,933 7,716 2,132 5,584
NEW YORK INTERMEDIATE MUNICIPAL FUND INC. 125,182 1,969 427 1,542
@ Municipal securities held 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%, 73%, and 56% 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.
^ Credit ratings are unaudited.
++ 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. At October 31, 2003
these securities amounted to $2,542,000 or 0.85% of net assets for
Neuberger Berman Intermediate Municipal Fund Inc.
See Notes to Financial Statements
18
This page has been left blank intentionally
19
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 $ 154,307 $ 471,517 $ 126,724
Cash 10 88 55
Interest receivable 2,571 8,059 2,104
Prepaid expenses and other assets 227 574 187
===================================================================================================================================
TOTAL ASSETS 157,115 480,238 129,070
===================================================================================================================================
LIABILITIES
Dividends payable--preferred shares 42 126 35
Dividends payable--common shares 424 1,372 362
Payable to administrator (Note B) 38 118 32
Accrued expenses and other payables 110 151 105
===================================================================================================================================
TOTAL LIABILITIES 614 1,767 534
===================================================================================================================================
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 $ 97,501 $ 299,071 $ 80,286
===================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS CONSIST OF:
Paid-in capital--common shares $ 96,347 $ 293,853 $ 79,063
Undistributed net investment income 196 391 101
Accumulated net realized gains (losses) on investments (70) (757) (420)
Net unrealized appreciation (depreciation) in value of investments 1,028 5,584 1,542
===================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS AT VALUE $ 97,501 $ 299,071 $ 80,286
===================================================================================================================================
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 $ 14.36 $ 14.44 $ 14.40
===================================================================================================================================
*COST OF INVESTMENTS $ 153,279 $ 465,933 $ 125,182
===================================================================================================================================
See Notes to Financial Statements
20
NEUBERGER BERMAN FOR THE YEAR ENDED OCTOBER 31, 2003
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
Interest income $ 6,602 $ 20,391 $ 5,555
===================================================================================================================================
EXPENSES:
Investment management fee (Note B) 375 1,144 307
Administration fee (Note B) 450 1,373 368
Stock transfer agent fees 38 39 38
Auction agent fees (Note B) 128 367 107
Auditing fees 37 39 37
Basic maintenance expense (Note B) 22 22 22
Custodian fees (Note B) 70 128 60
Legal fees 24 53 22
Shareholder reports 10 55 10
Stock exchange listing fees 5 17 4
Directors' fees and expenses 31 31 31
Miscellaneous 44 96 39
===================================================================================================================================
Total expenses 1,234 3,364 1,045
Investment management fee waived (Note B) (375) (1,144) (307)
===================================================================================================================================
Expenses reduced by custodian fee expense offset arrangement (Note B) (1) (1) (1)
===================================================================================================================================
Total net expenses 858 2,219 737
===================================================================================================================================
Net investment income 5,744 18,172 4,818
===================================================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investment securities sold (70) (757) (420)
Change in net unrealized appreciation (depreciation) in value of:
Investment securities (Note A) 1,031 5,860 1,501
============================================================================================================================
Net gain (loss) on investments 961 5,103 1,081
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM:
Net investment income (551) (1,773) (457)
============================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS
RESULTING FROM OPERATIONS $ 6,154 $ 21,502 $ 5,442
===================================================================================================================================
See Notes to Financial Statements
21
STATEMENTS OF CHANGES IN NET ASSETS
CALIFORNIA INTERMEDIATE MUNICIPAL FUND
----------------------------------------
PERIOD FROM
SEPTEMBER 27, 2002
YEAR (COMMENCEMENT
ENDED OF OPERATIONS) TO
NEUBERGER BERMAN INTERMEDIATE MUNICIPAL CLOSED-END FUNDS OCTOBER 31, OCTOBER 31,
(000'S OMITTED) 2003 2002
INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
FROM OPERATIONS:
Net investment income (loss) $ 5,744 $ 97
Net realized gain (loss) on investments (70) --
Change in net unrealized appreciation (depreciation) of investments 1,031 (3)
Distributions to preferred shareholders from:
Net investment income (551) --
======================================================================================================================
Net increase (decrease) in net assets applicable to common shareholders
resulting from operations 6,154 94
======================================================================================================================
DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income (5,094) --
======================================================================================================================
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from initial capitalization (Note D) -- 100
Net proceeds from issuance of common shares -- 90,058
Net proceeds from underwriters' over-allotment option exercised 2,644 4,289
======================================================================================================================
Proceeds from reinvestment of dividends -- --
Payments for preferred shares offering costs (744) --
======================================================================================================================
Total net proceeds from capital share transactions 1,900 94,447
======================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 2,960 94,541
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of period 94,541 --
======================================================================================================================
End of period $ 97,501 $ 94,541
======================================================================================================================
Accumulated undistributed net investment income at end of period $ 196 $ 97
======================================================================================================================
22
INTERMEDIATE MUNICIPAL FUND
----------------------------------------
PERIOD FROM
SEPTEMBER 27, 2002
YEAR (COMMENCEMENT
ENDED OF OPERATIONS) TO
OCTOBER 31, OCTOBER 31,
2003 2002
INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
FROM OPERATIONS:
Net investment income (loss) $ 18,172 $ 442
Net realized gain (loss) on investments (757) --
Change in net unrealized appreciation (depreciation) of investments 5,860 (276)
Distributions to preferred shareholders from:
Net investment income (1,773) --
======================================================================================================================
Net increase (decrease) in net assets applicable to common shareholders
resulting from operations 21,502 166
======================================================================================================================
DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income (16,450) --
======================================================================================================================
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from initial capitalization (Note D) -- 100
Net proceeds from issuance of common shares -- 278,752
Net proceeds from underwriters' over-allotment option exercised 2,501 14,295
======================================================================================================================
Proceeds from reinvestment of dividends 337 --
Payments for preferred shares offering costs (2,132) --
======================================================================================================================
Total net proceeds from capital share transactions 706 293,147
======================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 5,758 293,313
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of period 293,313 --
======================================================================================================================
End of period $ 299,071 $ 293,313
======================================================================================================================
Accumulated undistributed net investment income at end of period $ 391 $ 442
======================================================================================================================
NEW YORK INTERMEDIATE MUNICIPAL FUND
----------------------------------------
PERIOD FROM
SEPTEMBER 27, 2002
YEAR (COMMENCEMENT
ENDED OF OPERATIONS) TO
OCTOBER 31, OCTOBER 31,
2003 2002
INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
FROM OPERATIONS:
Net investment income (loss) $ 4,818 $ 87
Net realized gain (loss) on investments (420) --
Change in net unrealized appreciation (depreciation) of investments 1,501 41
Distributions to preferred shareholders from:
Net investment income (457) --
======================================================================================================================
Net increase (decrease) in net assets applicable to common shareholders
resulting from operations 5,442 128
======================================================================================================================
DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income (4,347) --
======================================================================================================================
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from initial capitalization (Note D) -- 100
Net proceeds from issuance of common shares -- 73,619
Net proceeds from underwriters' over-allotment option exercised 3,074 2,859
======================================================================================================================
Proceeds from reinvestment of dividends 37 --
Payments for preferred shares offering costs (626) --
======================================================================================================================
Total net proceeds from capital share transactions 2,485 76,578
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 3,580 76,706
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of period 76,706 --
======================================================================================================================
End of period $ 80,286 $ 76,706
======================================================================================================================
Accumulated undistributed net investment income at end of period $ 101 $ 87
======================================================================================================================
23
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 (the "1940 Act"). Each Fund had no operations until September 27,
2002, other than matters relating to their organization and the sale on
September 19, 2002 of 6,981 shares of common stock for $100,005 ($14.325
per share) from each Fund to Neuberger Berman, LLC ("Neuberger"), the
Funds' sub-adviser. The Board of Directors of the Funds 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 accounting
principles generally accepted in the United States 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.
4 FEDERAL INCOME TAXES: It is the policy of each Fund to continue to qualify
as a regulated investment company by complying with the provisions
available to certain investment companies, as defined in applicable
sections of the Internal Revenue Code, and to make distributions of
investment company taxable income and net capital gains (after reduction
for any amounts available for U.S. Federal income tax purposes as capital
loss carryforwards) sufficient to relieve them from all, or substantially
all, U.S. Federal income taxes. Accordingly, each Fund paid no U.S. Federal
income taxes and no provision for U.S. Federal income taxes was required.
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.
To the extent each Fund's net realized capital gains, if any, can be offset
24
by capital loss carryforwards, it is the policy of each Fund not to
distribute such gains. Dividends and distributions to preferred
shareholders are accrued and determined as described in Note A-6. At
October 31, 2003, the capital loss carryforwards for each Fund were as
follows:
EXPIRING IN:
2011
CALIFORNIA $ 69,587
INTERMEDIATE 757,224
NEW YORK 420,475
Each Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a tax return of
capital. Differences in the recognition or classification of income between
the financial statements and tax earnings and profits which result in
temporary over-distributions for financial statement purposes are
classified as distributions in excess of net investment income or
accumulated net realized gains in the components of net assets on the
Statements of Assets and Liabilities.
Subsequent to October 31, 2003, each Fund declared dividends to common
shareholders from their net investment income payable December 15, 2003, to
shareholders of record on November 28, 2003, with an ex-dividend date of
November 25, 2003, as follows:
DIVIDEND PER SHARE
CALIFORNIA $ 0.06250
INTERMEDIATE 0.06625
NEW YORK 0.06500
The tax character of distributions paid during the periods ended October
31, 2003 and 2002 were as follows:
DISTRIBUTIONS PAID FROM:
TAX-EXEMPT INCOME ORDINARY INCOME TOTAL
2003 2002 2003 2002 2003 2002
CALIFORNIA $ 5,621,479 $ -- $ 23,102 $ -- $ 5,644,581 $ --
INTERMEDIATE 18,151,315 -- 71,380 -- 18,222,695 --
NEW YORK 4,789,367 -- 14,100 -- 4,803,467 --
As of October 31, 2003, 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 $ 661,743 $ -- $ -- $ 1,028,442 $ (69,587) $ 1,620,598
INTERMEDIATE 1,887,690 -- -- 5,584,224 (757,224) 6,714,690
NEW YORK 498,658 -- -- 1,542,214 (420,475) 1,620,397
The difference between book basis and tax basis is attributable primarily
to timing differences of dividend payments.
25
6 EXPENSE ALLOCATION: Expenses directly attributable to a Fund are charged to
that Fund. Expenses not directly attributed to a Fund are allocated, on the
basis of relative net assets, except where a more appropriate allocation of
expenses to each of the Funds can otherwise be made fairly.
7 REDEEMABLE PREFERRED SHARES: On October 21, 2002, the Funds re-classified
unissued shares of capital stock into several series of Auction Market
Preferred Shares ("AMPS"), as follows:
FUND 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:
FUND 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's AMPS Series A has approved a special rate period 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:
FUND 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's AMPS Series B has approved a special rate period of 364 days.
The effective dates and dividend rates for each Fund are as follows:
FUND EFFECTIVE DATE DIVIDEND RATE
CALIFORNIA March 12, 2003 1.15%
INTERMEDIATE March 14, 2003 1.20%
NEW YORK March 10, 2003 1.125%
26
The Funds declared dividends to AMPS shareholders for the period November
1, 2003 to November 30, 2003, for each series of the AMPS as follows:
FUND SERIES A SHARES SERIES B SHARES
CALIFORNIA $ 41,798 $ 28,269
INTERMEDIATE 123,328 89,688
NEW YORK 34,182 22,622
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, unless
otherwise required by law, 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. The holders of AMPS, voting as a
separate class, are entitled at all times to elect two Directors of each
Fund, and to elect a majority of the Directors of a Fund if the Fund failed
to pay dividends on preferred shares 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 approximately $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 shares 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 California state and New York state
municipal bonds, 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.
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
27
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
--------------------------------------------------------------------
2003 - 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, 2003, such waived fees amounted to $374,824,
$1,144,348, and $306,706 for California, Intermediate, and New York,
respectively.
Each Fund retains Management as its administrator under an Administration
Agreement ("Agreement"). Pursuant to this Agreement each Fund pays
Management an administration fee at the annual rate of 0.30% of its average
daily Managed Assets. 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, 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 held
company ("the Transaction"). Upon completion of the Transaction, each
Fund's management and sub-advisory agreements automatically terminated. To
provide for continuity of management, the shareholders of each Fund voted
on September 23, 2003, to approve new management and sub-advisory
agreements, which took effect upon closing of the Transaction (see Report
of Votes of Shareholders). 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 $854, $810, and $808 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.
28
In order to satisfy ratings agency requirements, each Fund is required to
provide each rating agency a report on a monthly basis verifying that it 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, 2003, there were purchase and sale
transactions (excluding short-term securities) as follows:
(000'S OMITTED) PURCHASES SALES
CALIFORNIA $ 113,376 $ 12,149
INTERMEDIATE 298,937 43,379
NEW YORK 79,107 13,088
NOTE D--CAPITAL:
At October 31, 2003, the common shares outstanding and the common shares
owned by Neuberger for each Fund 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 of capital stock for the periods ended
October 31, 2003 and October 31, 2002, were as follows:
COMMON SHARES ISSUED IN CONNECTION WITH:
UNDERWRITERS' EXERCISE REINVESTMENT OF NET INCREASE IN
INITIAL INITIAL PUBLIC OF OVER-ALLOTMENT DIVIDENDS AND COMMON SHARES
CAPITALIZATION OFFERING OPTION DISTRIBUTIONS OUTSTANDING
2003 2002 2003 2002 2003 2002 2003 2002 2003 2002
CALIFORNIA - 6,981 - 6,300,000 185,000 300,000 - - 185,000 6,606,981
INTERMEDIATE - 6,981 - 19,500,000 175,000 1,000,000 23,143 - 198,143 20,506,981
NEW YORK - 6,981 - 5,150,000 215,000 200,000 2,569 - 217,569 5,356,981
29
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
YEAR ENDED SEPTEMBER 27, 2002^
OCTOBER 31, TO OCTOBER 31,
----------------- -------------------
2003 2002
COMMON SHARE NET ASSET VALUE, BEGINNING OF PERIOD $ 14.31 $ 14.32
----------------- -----------------
INCOME FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS:
NET INVESTMENT INCOME (LOSS) .85 .02
NET GAINS OR LOSSES ON SECURITIES
(BOTH REALIZED AND UNREALIZED) .14 --
COMMON SHARE EQUIVALENT OF DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
FROM NET INVESTMENT INCOME (.08) --
----------------- -----------------
TOTAL FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS .91 .02
----------------- -----------------
LESS DISTRIBUTIONS TO COMMON SHAREHOLDERS:
FROM NET INVESTMENT INCOME (.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 $ 14.36 $ 14.31
----------------- -----------------
COMMON SHARE MARKET VALUE, END OF PERIOD $ 13.00 $ 15.00
----------------- -----------------
TOTAL RETURN, COMMON SHARE NET ASSET VALUE+ +6.02% -0.10%**
TOTAL RETURN, COMMON SHARE MARKET VALUE+ -8.44% +0.00%**
RATIOS/SUPPLEMENTAL DATA++
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS, END OF PERIOD (IN MILLIONS) $ 97.5 $ 94.5
PREFERRED STOCK, AT LIQUIDATION VALUE ($25,000
PER SHARE LIQUIDATION PREFERENCE) (IN MILLIONS) $ 59.0 $ --
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS# .88% .84%*
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS## .88% .83%*
RATIO OF NET INVESTMENT INCOME (LOSS) EXCLUDING PREFERRED STOCK DIVIDENDS TO AVERAGE
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 5.88% 1.10%*
RATIO OF PREFERRED STOCK DIVIDENDS TO AVERAGE
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS .56% --%
RATIO OF NET INVESTMENT INCOME (LOSS) INCLUDING PREFERRED STOCK DIVIDENDS TO AVERAGE
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 5.32% 1.10%*
PORTFOLIO TURNOVER RATE 9% 0%
ASSET COVERAGE PER SHARE OF PREFERRED STOCK, END OF PERIOD@ $ 66,332 $ --
See Notes to Financial Highlights
30
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
YEAR ENDED SEPTEMBER 27, 2002^
OCTOBER 31, TO OCTOBER 31,
----------------- -------------------
2003 2002
COMMON SHARE NET ASSET VALUE, BEGINNING OF PERIOD $ 14.30 $ 14.32
----------------- -----------------
INCOME FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS:
NET INVESTMENT INCOME (LOSS) .88 .01
NET GAINS OR LOSSES ON SECURITIES
(BOTH REALIZED AND UNREALIZED) .25 --
COMMON SHARE EQUIVALENT OF DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
FROM NET INVESTMENT INCOME (.09) --
----------------- -----------------
TOTAL FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS 1.04 .01
----------------- -----------------
LESS DISTRIBUTIONS TO COMMON SHAREHOLDERS:
FROM NET INVESTMENT INCOME (.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 $ 14.44 $ 14.30
----------------- -----------------
COMMON SHARE MARKET VALUE, END OF PERIOD $ 13.33 $ 15.00
----------------- -----------------
TOTAL RETURN, COMMON SHARE NET ASSET VALUE+ +6.88% -0.17%**
TOTAL RETURN, COMMON SHARE MARKET VALUE+ -5.94% +0.00%**
RATIOS/SUPPLEMENTAL DATA++
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS, END OF PERIOD (IN MILLIONS) $ 299.1 $ 293.3
PREFERRED STOCK, AT LIQUIDATION VALUE ($25,000
PER SHARE LIQUIDATION PREFERENCE) (IN MILLIONS) $ 179.4 $ --
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS# .74% .51%*
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS## .74% .51%*
RATIO OF NET INVESTMENT INCOME (LOSS) EXCLUDING PREFERRED STOCK DIVIDENDS TO AVERAGE
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 6.08% 1.62%*
RATIO OF PREFERRED STOCK DIVIDENDS TO AVERAGE
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS .59% --%
RATIO OF NET INVESTMENT INCOME (LOSS) INCLUDING PREFERRED STOCK DIVIDENDS TO AVERAGE
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 5.49% 1.62%*
PORTFOLIO TURNOVER RATE 10% 0%
ASSET COVERAGE PER SHARE OF PREFERRED STOCK, END OF PERIOD@ $ 66,694 $ --
See Notes to Financial Highlights
31
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
YEAR ENDED SEPTEMBER 27, 2002^
OCTOBER 31, TO OCTOBER 31,
----------------- -------------------
2003 2002
COMMON SHARE NET ASSET VALUE, BEGINNING OF PERIOD $ 14.32 $ 14.32
----------------- -----------------
INCOME FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS:
NET INVESTMENT INCOME (LOSS) .86 .03
NET GAINS OR LOSSES ON SECURITIES
(BOTH REALIZED AND UNREALIZED) .19 --
COMMON SHARE EQUIVALENT OF DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
FROM NET INVESTMENT INCOME (.08) --
----------------- -----------------
TOTAL FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS .97 .03
----------------- -----------------
LESS DISTRIBUTIONS TO COMMON SHAREHOLDERS:
FROM NET INVESTMENT INCOME (.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 $ 14.40 $ 14.32
----------------- -----------------
COMMON SHARE MARKET VALUE, END OF PERIOD $ 13.27 $ 15.00
----------------- -----------------
TOTAL RETURN, COMMON SHARE NET ASSET VALUE+ +6.36% -0.03%**
TOTAL RETURN, COMMON SHARE MARKET VALUE+ -6.43% +0.00%**
RATIOS/SUPPLEMENTAL DATA++
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS, END OF PERIOD (IN MILLIONS) $ 80.3 $ 76.7
PREFERRED STOCK, AT LIQUIDATION VALUE ($25,000
PER SHARE LIQUIDATION PREFERENCE) (IN MILLIONS) $ 48.3 $ --
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS# .92% .94%*
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS## .92% .93%*
RATIO OF NET INVESTMENT INCOME (LOSS) EXCLUDING PREFERRED STOCK DIVIDENDS TO AVERAGE
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 6.02% 1.22%*
RATIO OF PREFERRED STOCK DIVIDENDS TO AVERAGE
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS .57% --%
RATIO OF NET INVESTMENT INCOME (LOSS) INCLUDING PREFERRED STOCK DIVIDENDS TO AVERAGE
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 5.45% 1.22%*
PORTFOLIO TURNOVER RATE 11% 0%
ASSET COVERAGE PER SHARE OF PREFERRED STOCK, END OF PERIOD@ $ 66,617 $ --
See Notes to Financial Highlights
32
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. For each Fund, total
return would have been lower if Management had not waived the investment
management fee.
# The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset
arrangements.
## After waiver of investment management fee. Had Management not undertaken
such action the annualized ratios of net expenses to average daily net
assets applicable to common shareholders would have been:
YEAR ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31,
2003 2002(1)
CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC. 1.26% 1.08%
INTERMEDIATE MUNICIPAL FUND INC. 1.13% .76%
NEW YORK INTERMEDIATE MUNICIPAL FUND INC. 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.
++ Expense ratios do not include the effect of dividend payments to AMPS.
Income ratios include income earned on assets attributable to AMPS.
33
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
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, 2003, the related statements of operations for the year then ended,
the statements of changes in net assets for the year ended October 31, 2003, and
for the period from September 27, 2002 (commencement of operations) to October
31, 2002 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 auditing standards generally accepted
in the 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, 2003, 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, 2003, the results of their
operations for the year then ended, the changes in their net assets for the year
ended October 31, 2003 and for the period from September 27, 2002 (commencement
of operations) to October 31, 2002, and their financial highlights for each of
the periods indicated therein, in conformity with accounting principles
generally accepted in the United States.
/s/ ERNST AND YOUNG LLP
Boston, Massachusetts
December 5, 2003
34
DIVIDEND REINVESTMENT PLAN (UNAUDITED)
The Fund's Board has established a Dividend Reinvestment Plan (the "Plan")
pursuant to which all holders of common stock ("Common Stockholders") whose
shares are registered in their own names will have all dividends and any capital
gain distributions (referred to collectively in this section as "dividends") on
their shares automatically reinvested in additional shares of common stock
("Common Shares") by The Bank of New York, as agent for the Common Stockholders
("Plan Agent"), unless such Common Stockholders elect to receive cash. An
election to receive cash may be revoked or reinstated at a Common Stockholder's
option. In the case of record Common Stockholders such as banks, brokers or
other nominees that hold shares of common stock for others who are the
beneficial owners, the Plan Agent will administer the Plan on the basis of the
number of shares certified from time to time by the record Common Stockholder as
representing the total amount registered in such Common Stockholder's name and
held for the account of beneficial owners who participate in the Plan. Common
Stockholders whose shares are held in the name of a bank, broker or other
nominee should contact the nominee for details. Such stockholders may not be
able to transfer their shares to another nominee and continue to participate in
the Plan. All dividends to investors who elect not to participate in the Plan
(or whose bank, broker or other nominee elects not to participate on the
investor's behalf), will be paid in cash by check mailed, in the case of direct
Common Stockholders, to the record holder by The Bank of New York, as the Fund's
dividend disbursement agent.
Unless you (or your bank, broker or other nominee) elect not to participate in
the Plan, the number of Common Shares you will receive as a result of a Fund
dividend will be determined as follows:
(1) If Common Shares are trading at or above their net asset value (minus
estimated brokerage commissions that would be incurred upon the
purchase of Common Shares on the open market) on the payment date, the
Fund will issue new Common Shares at the greater of (i) the net asset
value per Common Share on the payment date or (ii) 95% of the market
price per Common Share on the payment date. Because Common Shares may
be issued at less than their market price, Plan participants may get a
benefit that non-participants do not.
(2) If Common Shares are trading below their net asset value (minus
estimated brokerage commissions that would be incurred upon the
purchase of Common Shares on the open market) on the payment date, the
Plan Agent will receive the dividend in cash and will purchase Common
Shares in the open market, on the American Stock Exchange or
elsewhere, for the participants' accounts. It is possible that the
market price for the Common Shares may increase before the Plan Agent
has completed its purchases. Therefore, the average purchase price per
Common Share paid by the Plan Agent may exceed the market price
thereof on the payment date, resulting in the purchase of fewer Common
Shares than if the dividend had been paid in Common Shares issued by
the Fund. The Plan Agent will use all dividends received in cash to
purchase Common Shares in the open market on or shortly after the
payment date, but in no event later than the ex-dividend date for the
next dividend. Interest will not be paid on any uninvested cash
payments.
If you own Common Shares directly, you may withdraw from the Plan at any time by
giving written notice to the Plan Agent; please be sure to include your name and
account number. You may also rejoin the Plan later. Contact the Plan Agent at
the following address for information on how to do so: The Bank of New York,
ATTN: Stock Transfer Administration, 101 Barclay Street, 11-E, New York, New
York 10286. If you wish, the Plan Agent will sell the Common Shares and send you
the proceeds, minus brokerage commissions.
The Plan Agent maintains all stockholders' accounts in the Plan and gives
written confirmation of all transactions in the accounts, including information
stockholders may need for tax records. The Plan Agent will also furnish each
Common Stockholder with written instructions detailing the procedures for
electing not to participate in the Plan and to instead receive dividends in
cash. Common Shares in your account will be held by the Plan Agent in
non-certificated form. Any proxy you receive will include all Common Shares held
for you under the Plan.
There is no brokerage charge for reinvestment of your dividends in Common
Shares. However, all participants will pay a pro rata share of brokerage
commissions incurred by the Plan Agent when it makes open market purchases.
35
Automatically reinvested dividends are taxed in the same manner as cash
dividends.
The Fund and the Plan Agent reserve the right to amend or terminate the Plan.
There is no direct service charge to participants in the Plan; however, the Fund
reserves the right to amend the Plan to include a service charge payable by the
participants. Additional information about the Plan may be obtained from your
broker or by calling The Bank of New York at 1-800-524-4458.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that from time to time the Fund may purchase shares of its
common stock in the open market at market prices.
36
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 20036-1800
INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
37
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, 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 (68) Counsel, Carter Ledyard & Milburn LLP (law 37 Director, American Bar Retirement
Director firm) since October 2002; Formerly, Attorney Association (ABRA) since 1997
at Law and President, Faith Colish, A (not-for-profit membership
Professional Corporation, 1980 to 2002. association).
C. Anne Harvey (66) Consultant, C.A. Harvey Associates, since 37 Member, Individual Investors
Director June 2001; Director, AARP, 1978 to December Advisory Committee to the New
2000. York Stock Exchange Board of
Directors, 1998 to June 2002;
President, Board of Associates to
The National Rehabilitation
Hospital's Board of Directors,
since 2002; Member, American
Savings Education Council's
Policy Board (ASEC), 1998-2000;
Member, Executive Committee,
Crime Prevention Coalition of
America, 1997-2000.
Cornelius T. Ryan (71) Founding General Partner, Oxford Partners and 37 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 (58) Regional Manager for Atlanta Region, Ford 37
Director Motor Credit Company since August
1997; prior thereto, President, Ford Life
Insurance Company, April 1995 until August
1997.
38
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, AGE, 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* (44) Executive Vice President, Neuberger Berman 37 Executive Vice President,
Chief Executive Officer, since 1999; Principal, Neuberger Berman from Neuberger Berman Inc. (holding
Director and Chairman 1997 until 1999; Senior Vice President, NB company) since 1999 and Director
of the Board Management from 1996 until 1999. from October 1999 through March
2003; President and Director, NB
Management since 1999; Head of
Neuberger Berman Inc.'s Mutual
Funds and Institutional Business
since 1999; Director and Vice
President, Neuberger & Berman
Agency, Inc. since 2000.
CLASS II
INDEPENDENT FUND DIRECTORS*
John Cannon (73) Consultant. Formerly, Chairman and Chief 37 Independent Trustee or Director
Director Investment Officer, CDC Capital Management of three series of
(registered investment adviser), 1993-January OppenheimerFunds: Limited Term
1999; prior thereto, President and Chief New York Municipal Fund,
Executive Officer, AMA Investment Advisors, an Rochester Fund Municipals, and
affiliate of the American Medical Association. Oppenheimer Convertible
Securities Fund, since 1992.
Barry Hirsch (70) Attorney at Law. Senior Counsel, Loews 37
Director Corporation (diversified financial
corporation) May 2002 until April 2003;
prior thereto, Senior Vice President, Secretary
and General Counsel, Loews Corporation.
John P. Rosenthal (70) Senior Vice President of Burnham Securities 37 Director, 92nd Street Y (non-
Director Inc. (a registered broker-dealer) since profit) since 1967; Formerly,
1991. Director, Cancer Treatment
Holdings, Inc.
39
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, AGE, ADDRESS (1) OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE
AND POSITION WITH FUND PRINCIPAL OCCUPATION(S) (2) DIRECTOR FUND COMPLEX BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
Tom Decker Seip (53) General Partner, Seip Investments LP (a 37 Director, H&R Block, Inc.
Director private investment partnership); President (financial services company) since
and CEO, Westaff, Inc. (temporary May 2001; Director, General Magic
staffing), May 2001 to January 2002; Senior (voice recognition software) since
Executive at the Charles Schwab November 2001; Director, Forward
Corporation from 1983 to 1999, including Management, Inc. (asset
Chief Executive Officer, Charles Schwab management), since 2001; Director,
Investment Management, Inc. and Trustee, E-Finance Corporation (credit
Schwab Family of Funds and Schwab decisioning services) since 1999;
Investments from 1997 to 1998 and Director, Save-Daily.com (micro
Executive Vice President- Retail investing services) since 1999;
Brokerage, Charles Schwab Investment Formerly, Director, Offroad Capital
Management from 1994 to 1997. Inc. (pre-public internet commerce
company).
DIRECTOR WHO IS AN
"INTERESTED PERSON"
Jack L. Rivkin* (63) Executive Vice President and Chief 37 Director, Dale Carnegie and
President and Director Investment Officer, Neuberger Berman since Associates, Inc.(private company)
2002 and 2003, respectively; Director and since 1998; Director, Emagin
Chairman, NB Management since December Corp. (public company) since
2002; Executive Vice President, Citigroup 1997; Director, Solbright, Inc.
Investments, Inc. from September 1995 to (private company) since 1998;
February 2002; Executive Vice President, Director, Infogate, Inc. (private
Citigroup Inc. from September 1995 to company) since 1997.
February 2002.
CLASS III
INDEPENDENT FUND DIRECTORS*
Walter G. Ehlers (70) Consultant; Retired President and 37
Director Director, Teachers Insurance & Annuity
(TIAA) and College Retirement Equities
Fund (CREF).
Robert A. Kavesh (76) Marcus Nadler Professor of Finance and 37 Director, DEL Laboratories,
Director Economics Emeritus, New York University Inc.(cosmetics and
Stern School of Business. pharmaceuticals) since 1978; The
Caring Community (not-for-profit).
Howard A. Mileaf (66) Retired. Formerly, Vice President and 37 Director, WHX Corporation
Director Special Counsel, WHX Corporation (holding (holding company) since August
company) 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).
40
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, AGE, ADDRESS (1) OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE
AND POSITION WITH FUND PRINCIPAL OCCUPATION(S) (2) DIRECTOR FUND COMPLEX BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT FUND DIRECTORS*
William E. Rulon (71) Retired. Senior Vice President, Foodmaker, 37 Director, Pro-Kids Golf and
Director Inc. (operator and franchiser of Learning Academy (teach golf and
restaurants) until January 1997. computer usage to "at risk"
children) since 1998; Director,
Prandium, Inc. (restaurants) from
March 2001 until July 2002.
Candace L. Straight (56) Private investor and consultant 37 Director, Providence Washington
Director specializing in the insurance industry; (property and casualty insurance
Advisory Director, Securitas Capital LLC company) since December 1998;
(a global private equity investment firm Director, Summit Global Partners
dedicated to making investments in the (insurance brokerage firm) since
insurance sector). October 2000.
DIRECTOR WHO IS AN
"INTERESTED PERSON"
Edward I. O'Brien* (75) Member, Investment Policy Committee, Edward 37 Director, Legg Mason, Inc.
Director Jones, 1993-2001; President,Securities (financial services holding
Industry Association ("SIA ") (securities company) since 1993; Director,
industry's representative in government Boston Financial Group (real
relations and regulatory matters at the estate and tax shelters)
federal and state levels) 1974-1992; Adviser 1993-1999.
to SIA, November 1992- November 1993.
* 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.
41
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 (47) Secretary since 2002 Vice President-Mutual Fund Board Relations,
NB Management since 2000; Vice President,
Neuberger Berman since 2002 and employee
since 1999; Vice President, NB Management
from 1986 to 1999; Secretary, ten registered
investment companies for which NB
Management acts as investment manager and
administrator (four since 2002 and three
since 2003).
Robert Conti (47) Vice President since 2002 Senior Vice President, Neuberger Berman
since 2003; Vice President, Neuberger Berman
from 1999 until 2003; Senior Vice President,
NB Management since 2000; Controller, NB
Management until 1996; Treasurer, NB
Management from 1996 until 1999; Vice
President, ten registered investment
companies for which NB Management acts as
investment manager and administrator (three
since 2000, four since 2002 and three since
2003).
Brian P. Gaffney (50) Vice President since 2002 Managing Director, Neuberger Berman since
1999; Senior Vice President, NB Management
since 2000; Vice President, NB Management
from 1997 until 1999; Vice President, ten
registered investment companies for which
NB Management acts as investment manager
and administrator (three since 2000, four
since 2002 and three since 2003).
Sheila R. James (38) Assistant Secretary since 2002 Employee, Neuberger Berman since 1999;
Employee, NB Management from 1991 to
1999; Assistant Secretary, ten registered
investment companies for which NB
Management acts as investment manager and
administrator (seven since 2002 and three
since 2003).
Kevin Lyons (48) Assistant Secretary since 2003 Employee, Neuberger Berman since 1999;
Employee, NB Management from 1993 to
1999; Assistant Secretary, ten registered
investment companies for which NB
Management acts as investment manager and
administrator (since 2003).
42
POSITION AND
NAME, AGE, AND ADDRESS (1) LENGTH OF TIME SERVED (2) PRINCIPAL OCCUPATION(S)
------------------------------------------------------------------------------------------------------------------------------------
John M. McGovern (33) Assistant Treasurer since 2002 Employee, NB Management since 1993;
Assistant Treasurer, ten registered
investment companies for which NB
Management acts as investment manager and
administrator (seven since 2002 and three
since 2003).
Barbara Muinos (44) Treasurer and Principal Financial and Vice President, Neuberger Berman since
Accounting Officer since 2002 1999; Assistant Vice President, NB
Management from 1993 to 1999; Treasurer and
Principal Financial and Accounting Officer,
ten registered investment companies for which
NB Management acts as investment manager and
administrator (seven since 2002 and three
since 2003); Assistant Treasurer, three
registered investment companies for which NB
Management acts as investment manager and
administrator from 1996 until 2002.
Frederic B. Soule (57) Vice President since 2002 Senior Vice President, Neuberger Berman
since 2003; Vice President, Neuberger Berman
from 1999 until 2003; Vice President, NB
Management from 1995 until 1999; Vice
President, ten registered investment
companies for which NB Management acts as
investment manager and administrator (three
since 2000,four since 2002 and three since
2003).
Trani Jo Wyman (34) Assistant Treasurer since 2002 Employee, NB Management since 1991;
Assistant Treasurer, ten registered
investment companies for which NB
Management acts as investment manager and
administrator (seven since 2002 and three
since 2003).
----------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
43
REPORT OF VOTES OF SHAREHOLDERS (UNAUDITED)
Special meetings of shareholders of the Neuberger Berman Intermediate Municipal
Closed-End Funds were held on September 23, 2003. Upon completion of the
acquisition of Neuberger Berman Inc. by Lehman Brothers Holdings Inc. (the
"Transaction"), the management agreement between each Fund and NB Management,
and the sub-advisory agreement between NB Management and Neuberger Berman LLC
with respect to each Fund, automatically terminated. To provide for continuity
of management, the shareholders of each Fund voted on the following matters,
which became effective upon completion of the Transaction on October 31, 2003:
PROPOSAL 1--TO APPROVE A NEW MANAGEMENT AGREEMENT BETWEEN EACH FUND AND NB
MANAGEMENT
NEUBERGER BERMAN INTERMEDIATE MUNICIPAL CLOSED-END FUNDS VOTES FOR VOTES AGAINST ABSTENTIONS*
California 4,761,341.423 44,477.000 72,457.000
Intermediate 13,336,082.586 188,210.688 193,261.000
New York 3,819,821.296 66,494.000 50,546.000
PROPOSAL 2--TO APPROVE A NEW SUB-ADVISORY AGREEMENT BETWEEN NB MANAGEMENT AND
NEUBERGER BERMAN LLC WITH RESPECT TO EACH FUND
NEUBERGER BERMAN INTERMEDIATE MUNICIPAL CLOSED-END FUNDS VOTES FOR VOTES AGAINST ABSTENTIONS*
California 4,750,710.423 44,477.00 83,088.000
Intermediate 13,338,082.586 183,034.688 196,437.000
New York 3,821,707.296 67,544.000 47,610.000
* Abstentions were counted as shares that were present and entitled to vote
for purposes of determining a quorum and had a negative effect on the
proposals.
44
[NEUBERGER BERMAN LOGO]
A LEHMAN BROTHERS COMPANY
NEUBERGER BERMAN MANAGEMENT INC.
605 Third Avenue 2nd Floor
New York, NY 10158-0180
INTERNAL SALES & Services
877.461.1899
www.nb.com
[RECYCLE LOGO] C0453 12/03
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.
ITEM 2. CODE OF ETHICS
At a meeting on September 10, 2003, the Board of Directors ("Board") of
Neuberger Berman California 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"). A copy
of the Code of Ethics is filed as Exhibit 10(a)(1) to this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board has determined that the Registrant has two audit committee financial
experts serving on its audit committee. The Registrant's audit committee
financial experts are John Cannon and Walter G. Ehlers. Mr. Cannon and Mr.
Ehlers are both independent directors as defined by Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Form N-CSR disclosure requirement not yet effective with respect to the
Registrant.
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, Walter G.
Ehlers, Cornelius T. Ryan (Chairman), Tom D. Seip (appointed 12/10/03), and
Peter P. Trapp.
ITEM 6. [RESERVED]
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. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES
(a) Based on an evaluation of the disclosure controls and procedures (as
defined in rule 30a-2(c) under 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 second fiscal half-year that have
materially affected, or are reasonably likely to materially affect, the
Registrant's internal control over financial reporting.
ITEM 10. EXHIBITS
(a) A copy of the Code of Ethics is filed as Exhibit 10(a)(1).
(b) The certifications required by Rule 30a-2 of the Investment Company Act
of 1940, as amended, and Sections 302 and 906 of the Sarbanes-Oxley Act
of 2002 are 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 California Intermediate Municipal Fund Inc.
By: /s/ Peter E. Sundman
------------------------------
Peter E. Sundman
Chief Executive Officer
Date: December 31, 2003
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: December 31, 2003
By: /s/ Barbara Muinos
------------------------------
Barbara Muinos
Treasurer and Principal Financial
and Accounting Officer
Date: January 8, 2004