As filed with the Securities and Exchange Commission on January 7, 2005
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-21167
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.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W. 2nd Floor
Washington, DC 20036-1800
(Names and addresses of agents for service)
Date of fiscal year end: October 31, 2004
Date of reporting period: October 31, 2004
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
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Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO SHAREHOLDERS
[NEUBERGER BERMAN LOGO]
A LEHMAN BROTHERS COMPANY
ANNUAL REPORT
OCTOBER 31, 2004
NEUBERGER BERMAN
INTERMEDIATE
MUNICIPAL
CLOSED-END FUNDS
CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC.
INTERMEDIATE MUNICIPAL FUND INC.
NEW YORK INTERMEDIATE MUNICIPAL FUND INC.
NEUBERGER BERMAN OCTOBER 31, 2004
CONTENTS
THE FUNDS
CHAIRMAN'S LETTER 1
PORTFOLIO COMMENTARY/
PERFORMANCE HIGHLIGHTS
Intermediate Municipal Fund Inc. 2
California Intermediate Municipal Fund Inc. 2
New York Intermediate Municipal Fund Inc. 3
SCHEDULE OF INVESTMENTS
California Intermediate Municipal Fund Inc. 9
Intermediate Municipal Fund Inc. 14
New York Intermediate Municipal Fund Inc. 21
FINANCIAL STATEMENTS 26
FINANCIAL HIGHLIGHTS/
PER SHARE DATA
California Intermediate Municipal Fund Inc. 36
Intermediate Municipal Fund Inc. 37
New York Intermediate Municipal Fund Inc. 38
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM 40
DIVIDEND REINVESTMENT PLAN 41
DIRECTORY 43
DIRECTORS AND OFFICERS 44
PROXY VOTING POLICIES AND PROCEDURES 51
CHAIRMAN'S LETTER
Dear Shareholder,
I am pleased to present to you this annual report for the Neuberger Berman
Intermediate Municipal Closed-End Funds, for the period ending October 31, 2004.
The report includes portfolio commentary, a listing of the Funds' investments
and their audited financial statements for the reporting period.
Each Fund's investment objective is to provide current income exempt from
regular federal income tax and, for each state-specific Fund, current income
exempt from that state's income taxes.
We invest in intermediate-term municipal bonds (maturities between three and
eight years) because our experience and research indicate strongly that this
maturity range has historically offered the best risk/reward profile on the
yield curve, providing much of the return of longer-term bonds -- with less
volatility and risk.
We believe that our conservative investment philosophy and disciplined
investment process will benefit you with superior tax-exempt current income over
the long term.
Thank you for your confidence in Neuberger Berman. We will continue to do our
best to keep earning it.
Sincerely,
/s/ Peter Sundman
PETER SUNDMAN
CHAIRMAN OF THE BOARD
CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC.
INTERMEDIATE MUNICIPAL FUND INC.
NEW YORK INTERMEDIATE MUNICIPAL FUND INC.
"Neuberger Berman" and the Neuberger Berman logo are service marks of Neuberger
Berman, LLC. "Neuberger Berman Management Inc." and the individual fund names in
this shareholder report are either service marks or registered service marks of
Neuberger Berman Management Inc.(C)2004 Neuberger Berman Management Inc. All
rights reserved.
1
INTERMEDIATE MUNICIPAL CLOSED-END FUNDS Portfolio Commentaries
We are pleased to report that on a Net Asset Value (NAV) basis, all three
of Neuberger Berman's Intermediate Municipal Closed-End Funds delivered
positive returns and materially outperformed the Lehman Brothers 10 Year
Municipal Bond Index benchmark in fiscal 2004.
In fiscal 2004, two difficult months (April and May) for municipal
securities -- and bonds in general -- were sandwiched between two
five-month periods of stable returns. This reflected investors' changing
perspective on the economy. From November 2003 until March 2004, investors
questioned the strength and sustainability of the economic recovery. In
early April, the release of a strong March jobs report convinced investors
the recovery was for real, and bond prices started to fall. An impressive
April jobs report released at the beginning of May kept the pressure on
bond prices through the end of the month. Then in June, the tide turned.
Rapidly rising oil prices caused the economy to hit what Federal Reserve
Chairman Greenspan characterized as a "soft patch." In addition, concern
that terrorists would target the Olympics or U.S. targets during the
presidential campaign caused a flight to quality. Bonds continued to rally
through the end of the reporting period, with the yield on an AAA-rated
10-year general obligation municipal bond falling from 4.06% at the end of
May to 3.46% on October 29.
Looking ahead, we believe that the outlook for municipal bonds is
favorable, but we remain cautious. Increased tax revenue resulting from the
recovering economy has improved state and local government balance sheets.
However, this is being offset to varying degrees by the reduction in
federal subsidies to municipalities, prompted by the growing federal budget
deficit. Consequently, analysis of municipal securities' credit quality
remains critical. Also, President Bush's election victory is likely to
increase speculation about the potential for a flat tax and/or national
sales tax replacing the graduated income tax. If this "chatter" gets loud
enough, it could have a negative impact on the municipal securities market.
However, despite the Republicans' new dominance at the federal level, we
think it will once again prove difficult to build the substantial support
required to approve a major tax overhaul. Consequently, we believe that any
pressure on municipal securities prices due to discussion of tax reform
will represent a good buying opportunity.
INTERMEDIATE MUNICIPAL FUND INC.
(AMEX: NBH)
For the six months ending October 31, 2004, on a net asset value (NAV)
basis, the Intermediate Municipal Fund returned 8.53% compared to the
Lehman 10 Year Municipal Bond Index's 5.38% return. For the past 12 months,
on an NAV basis the Fund returned 10.91% versus the benchmark's 6.35%.
As of October 31, 2004, the portfolio was composed of 73.6% revenue bonds,
24.1% general obligation bonds, 0.5% prerefunded/escrowed bonds and 1.8%
cash and cash equivalents. Bonds subject to the Alternative Minimum Tax
(AMT) equaled 13.6% of assets. At the close of the reporting period, the
Fund's duration was 6.1 years and the portfolio's leverage position was
36.4% of assets.
CALIFORNIA INTERMEDIATE MUNICIPAL FUND INC.
(AMEX: NBW)
For the six months ending October 31, 2004, on a net asset value (NAV)
basis, the California Intermediate Municipal Fund returned 8.98% compared
to the Lehman 10 Year Municipal Bond Index's 5.38% return. For the past 12
months, on
Closed-end funds, unlike open-end funds, are not continually offered. There
is an initial public offering and once issued, common shares of closed-end
funds are sold in the open market through a stock exchange.
2
NEUBERGER BERMAN OCTOBER 31, 2004
an NAV basis, the Fund returned 10.97% versus the benchmark's 6.35%.
As of October 31, 2004, the portfolio was composed of 87.1% revenue bonds,
10.9% general obligation bonds, and 2.0% cash and cash equivalents. Bonds
subject to the Alternative Minimum Tax (AMT) equaled 13.0% of assets. At
the close of the reporting period, the Fund's duration was 6.0 years and
the portfolio's leverage position was 36.6% of assets.
Shortly after the close of first-half fiscal 2004, California successfully
issued $7.9 billion in Economic Recovery Bonds. The issue was
over-subscribed at prices reflecting investor confidence that California
will effectively address its structural budget deficit.
NEW YORK INTERMEDIATE MUNICIPAL FUND INC.
(AMEX: NBO)
For the six months ending October 31, 2004, on a net asset value (NAV)
basis, the New York Intermediate Municipal Fund returned 7.71% compared to
the Lehman 10 Year Municipal Bond Index's 5.38% return. For the past 12
months, on an NAV basis, the Fund returned 9.67% versus the benchmark's
6.35%.
As of October 31, 2004, the portfolio was composed of 93.7% revenue bonds,
4.8% general obligation bonds, and 1.5% cash and cash equivalents. Bonds
subject to the Alternative Minimum Tax (AMT) equaled 18.6% of assets. At
the close of the reporting period, the Fund's duration was 6.0 years and
the portfolio's leverage position was 36.7% of assets.
Sincerely,
/s/ Ted Giuliano
/s/ Thomas Brophy
/s/ Lori Canell
TED GIULIANO, THOMAS BROPHY AND
LORI CANELL
PORTFOLIO CO-MANAGERS
3
INTERMEDIATE CALIFORNIA INTERMEDIATE NEW YORK INTERMEDIATE
MUNICIPAL FUND MUNICIPAL FUND MUNICIPAL FUND
AMEX TICKER SYMBOL NBH AMEX TICKER SYMBOL NBW AMEX TICKER SYMBOL NBO
1 YEAR TOTAL RETURN
NAV (1) 10.91% 10.97% 9.67%
MARKET PRICE (2) 8.94% 9.63% 6.39%
AVERAGE ANNUAL TOTAL RETURN (Life of Fund as of October 31, 2004)
NAV (1) 8.31% 7.96% 7.56%
MARKET PRICE (2) 1.16% 0.18% (0.22%)
INCEPTION DATE 09/24/2002 09/24/2002 09/24/2002
CALIFORNIA INTERMEDIATE MUNICIPAL FUND
RATING DIVERSIFICATION
(% BY RATINGS)
AAA 56.5%
AA 3.3
A 12.9
BBB 24.2
BB 2.4
B 0.0
CCC 0.0
CC 0.0
C 0.0
D 0.0
Not Rated 0.0
Short Term 0.7
INTERMEDIATE MUNICIPAL FUND
RATING DIVERSIFICATION
(% BY RATINGS)
AAA 57.7%
AA 7.9
A 14.8
BBB 16.4
BB 2.7
B 0.0
CCC 0.0
CC 0.0
C 0.0
D 0.0
Not Rated 0.0
Short Term 0.5
NEW YORK INTERMEDIATE MUNICIPAL FUND
RATING DIVERSIFICATION
(% BY RATINGS)
AAA 23.8%
AA 35.5
A 19.7
BBB 19.3
BB 1.6
B 0.0
CCC 0.0
CC 0.0
C 0.0
D 0.0
Not Rated 0.0
Short Term 0.1
The composition, industries and holdings of the fund are subject to change.
Investment return will fluctuate. Past performance is no guarantee of future
results.
4
NEUBERGER BERMAN [DATE]
ENDNOTES
(1) Returns based on Net Asset Value ("NAV") of the Funds.
(2) Returns based on price of Fund shares on the American Stock
Exchange.
(3) A portion of the income from the Funds may be subject to the
Federal alternative minimum tax for certain investors.
(4) Neuberger Berman Management Inc. has contractually agreed to
waive a portion of the management fees that it is entitled to
receive from each Fund. Each undertaking lasts until October 31,
2011. Please see the notes to the financial statements for
specific information regarding the rate of the management fees
waived by Neuberger Berman Management Inc. Absent such a waiver,
the performance of each Fund would be lower.
5
GLOSSARY OF INDICES
NEW YORK MUNICIPAL DEBT FUND AVERAGE: An equally weighted average of those
closed-end funds that limit their
assets to those securities that are
exempt from taxation in New York
(double tax-exempt) or a city in New
York (triple tax-exempt).
CALIFORNIA MUNICIPAL DEBT FUND INDEX: An equally weighted index, adjusted for
income dividends and capital gain
distributions, of typically the largest
30 closed-end funds that invest at
least 65% of assets in municipal debt
issues that are exempt from taxation in
California.
CALIFORNIA MUNICIPAL DEBT FUND An equally weighted average of those
AVERAGE: closed-end funds that invest at least
65% of assets in municipal debt issues
that are exempt from taxation in
California.
GENERAL LEVERAGED MUNICIPAL DEBT FUND An equally weighted index, adjusted for
INDEX: income dividends and capital gain
distributions, of typically the largest
30 closed-end funds that invest 65% or
more of their assets in municipal debt
issues rated in the top four credit
ratings. These funds can be leveraged
via use of debt, preferred equity,
and/or reverse repurchase agreements.
GENERAL LEVERAGED MUNICIPAL DEBT FUND An equally weighted average of those
AVERAGE: closed-end funds that invest 65% or
more of their assets in municipal debt
issues rated in the top four credit
ratings. These funds can be leveraged
via use of debt, preferred equity,
and/or reverse repurchase agreements.
LEHMAN 10-YEAR MUNICIPAL BOND INDEX: The index is the 10 Year (8 - 12)
component which is a rules-based,
market-value-weighted index engineered
for the long-term tax-exempt bond
market. To be included in the index,
bonds must have a minimum credit rating
of Baa. They must have an outstanding
par value of at least $5 million and be
issued as part of a transaction of at
least $50 million. The bonds must have
a dated-date after December 31, 1990
and must be at least one year from
their maturity date. Remarked issues,
taxable municipal bonds, bonds with
floating rates, and derivatives, are
excluded from the benchmark.
Please note that indices do not take into account any fees and expenses or any
tax consequences of investing in the individual securities that they track and
that investors cannot invest directly in any index or average. Data about the
performance of each index or average are prepared or obtained by Neuberger
Berman Management Inc. and include reinvestment of all dividends and capital
gain distributions. Each Fund may invest in securities not included in its
respective index.
6
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7
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8
NEUBERGER BERMAN OCTOBER 31, 2004
SCHEDULE OF INVESTMENTS California Intermediate Municipal Fund Inc.
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
TAX-EXEMPT SECURITIES--BACKED BY INSURANCE (85.0%)
AMERICAN CAPITAL ACCESS
$ 1,000 Puerto Rico Ind., Tourist, Ed., Med., & Env. Ctrl. Fac. Rev.
(Polytechnic Univ. of Puerto Rico Proj.), Ser. 2002 A,
5.25%, due 8/1/15 A $ 1,065++
AMERICAN MUNICIPAL BOND ASSURANCE CORP.
1,285 Bay Area (CA) Governments Assoc. Bart SFO Extension Rev.
(Arpt. Premium Fare), Ser. 2002 A, 5.00%, due 8/1/21 AAA 1,360
1,000 California St. Pub. Works Board Lease (Dept. of Gen. Svc.)
Rev. (Cap. East End Complex), Ser. 2002 A,
5.25%, due 12/1/16 AAA 1,107
1,000 Fresno (CA) Unified Sch. Dist. Ref. G.O., Ser. 2002 A,
6.00%, due 2/1/17 AAA 1,217
1,905 Long Beach (CA) Bond Fin. Au. Tax Allocation Rev.,
(Downtown, North Long Beach, Poly High, & West Beach Redev.
Proj.), Ser. 2002 A, 5.38%, due 8/1/17 AAA 2,136
500 Long Beach (CA) Fin. Au. Rev., Ser. 1992, 6.00%, due 11/1/17 AAA 599
1,045 Marin Co. (CA) Muni. Wtr. Dist. Wtr. Ref. Rev., Ser. 2002,
5.00%, due 7/1/17 AAA 1,131
1,445 Oceanside (CA) Cert. of Participation Ref. Rev., Ser. 2003 A,
5.25%, due 4/1/14 AAA 1,619
2,600 Sacramento (CA) Muni. Util. Dist. Elec. Rev., Ser. 1997 K,
5.70%, due 7/1/17 AAA 3,085
500 Salinas Valley (CA) Solid Waste Au. Rev., Ser. 2002,
5.00%, due 8/1/06 AAA 525
2,000 San Francisco (CA) St. Bldg. Au. Lease Rev. (San Francisco
Civic Ctr. Complex), Ser. 1996 A, 5.25%, due 12/1/16 AAA 2,162
2,500 San Jose (CA) Fin. Au. Lease Rev. (Civic Ctr. Proj.), Ser. 2002 B,
5.25%, due 6/1/17 AAA 2,775
1,000 San Jose (CA) Multi-Family Hsg. Rev. (Fallen Leaves Apts. Proj.),
Ser. 2002 J-1, 4.95%, due 12/1/22 Aaa AAA 1,030
FINANCIAL GUARANTY INSURANCE CO.
2,550 Contra Costa (CA) Comm. College Dist. G.O., Ser. 2002,
5.25%, due 8/1/17 AAA 2,844
1,000 Kings Canyon (CA) Joint Unified Sch. Dist. G.O., Ser. 2002,
5.38%, due 8/1/17 Aaa AAA 1,124
5,000 Los Angeles (CA) Dept. of Arpts. Rev. (Los Angeles Int'l. Arpt.),
Ser. 2002 A, 5.25%, due 5/15/18 Aaa AAA 5,516
1,090 Moreland (CA) Sch. Dist. Ref. G.O., Ser. 2002,
5.13%, due 9/1/17 AAA 1,188
535 Nevada & Placer Cos. (CA) Irrigation Dist. Cert. of Participation
Rev., Ser. 2002, 5.00%, due 1/1/16 AAA 581
565 Nevada & Placer Cos. (CA) Irrigation Dist. Cert. of Participation
Rev., Ser. 2002, 5.00%, due 1/1/17 AAA 610
1,045 Oakland (CA) G.O., Ser. 2002 A, 5.00%, due 1/15/15 AAA 1,137
1,210 Oakland (CA) G.O., Ser. 2002 A, 5.00%, due 1/15/18 AAA 1,298
1,290 Oakland (CA) Redev. Agcy. Sub. Tax Allocation Rev.
(Central Dist. Redev. Proj.), Ser. 2003, 5.50%, due 9/1/17 AAA 1,450
575 Port of Oakland (CA) Rev., Ser. 2002 M, 5.25%, due 11/1/17 AAA 642
2,655 Riverside Co. (CA) Eastern Muni. Wtr. Dist. Cert. of Participation
Wtr. & Swr. Rev., Ser. 2001 A, 5.00%, due 7/1/19 Aaa AAA 2,814
2,000 San Diego (CA) Unified Sch. Dist. G.O., Ser. 2002 D,
5.25%, due 7/1/21 Aaa AAA 2,272
1,500 San Francisco (CA) City & Co. Int'l. Arpt. Second Ser. Rev.,
5.25%, due 5/1/16 AAA 1,586
See Notes to Schedule of Investments
9
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
FINANCIAL SECURITY ASSURANCE INC.
$ 1,000 Burbank (CA) Pub. Svc. Dept. Elec. Rev., Ser. 1998,
5.13%, due 6/1/16 AAA $ 1,087
1,000 California St. Dept. of Wtr. Res. Wtr. Rev., Ser. 2001 W,
5.50%, due 12/1/13 Aaa AAA 1,161
3,000 California St. Pub. Works Board Lease Rev. (Regents of the
Univ. of California, UCLA Replacement Hosp.), Ser. 2002 A,
5.38%, due 10/1/13 AAA 3,393
1,275 Los Angeles Co. (CA) Long Beach Unified Sch. Dist. G.O.,
Ser. 2002 D, 5.00%, due 8/1/17 AAA 1,380
500 Marin Co. (CA) Dixie Elementary Sch. Dist. G.O., Ser. 2000 A,
5.38%, due 8/1/17 AAA 556
3,000 Puerto Rico Muni. Fin. Agcy. Rev., Ser. 2002 A,
5.25%, due 8/1/17 AAA 3,377
1,000 Puerto Rico Muni. Fin. Agcy. Rev., Ser. 2002 A,
5.25%, due 8/1/21 Aaa AAA 1,109
5,000 San Francisco (CA) City & Co. Redev. Agcy. Lease Ref. Rev.
(George R. Moscone Convention Ctr.), Ser. 2002,
5.00%, due 7/1/17 Aaa AAA 5,389
1,000 San Jose (CA) Arpt. Ref. Rev., Ser. 2002 B, 5.00%, due 3/1/11 AAA 1,081
1,615 San Jose (CA) Arpt. Ref. Rev., Ser. 2002 B, 5.00%, due 3/1/12 AAA 1,746
1,620 Santa Clara Co. (CA) Fremont Union High Sch. Dist. G.O.,
Ser. 2002 C, 5.00%, due 9/1/20 Aaa AAA 1,728
MUNICIPAL BOND INVESTORS ASSURANCE CORP.
1,250 Alameda Co. (CA) Cert. of Participation Ref. Rev., Ser. 2001 A,
5.38%, due 12/1/17 AAA 1,405
4,000 California Poll. Ctrl. Fin. Au. Ref. PCR (Pacific Gas & Elec. Co.),
Ser. 1996 A, 5.35%, due 12/1/16 AAA 4,346++
2,835 Glendale (CA) Redev. Agcy. Tax Allocation Rev. (Central Glendale
Redev. Proj.), Ser. 2002, 5.00%, due 12/1/16 AAA 3,107
2,480 Glendale (CA) Redev. Agcy. Tax Allocation Rev. (Central Glendale
Redev. Proj.), Ser. 2002, 5.25%, due 12/1/17 AAA 2,756
3,890 Port of Oakland (CA) Ref. Rev., Ser. 2002 N,
5.00%, due 11/1/13 AAA 4,218
750 Santa Clara Co. (CA) Saratoga Union Sch. Dist. Ref. G.O.,
Ser. 1999, 5.13%, due 9/1/11 AAA 844
3,905 Solano Co. (CA) Cert. of Participation Rev., Ser. 2002,
5.25%, due 11/1/17 AAA 4,338
1,000 Univ. of California Regents Rev. (Multi. Purp. Proj.), Ser. 2000 K,
5.00%, due 9/1/12 AAA 1,095
----------
86,989
----------
TAX-EXEMPT SECURITIES--OTHER (69.6%)
780 Abag (CA) Fin. Au. Cert. of Participation Rev. (Channing House),
Ser. 1999, 4.90%, due 2/15/09 BBB+ 822++
3,050 Abag (CA) Fin. Au. Cert. of Participation Rev. (Episcopal
Homes Foundation), Ser. 1998, 5.13%, due 7/1/18 BBB+ 3,097++
1,000 Abag (CA) Fin. Au. Rev. (San Diego Hosp. Assoc.), Ser. 2003 C,
5.13%, due 3/1/18 Baa1 BBB+ 1,023++
900 Brazos (TX) River Au. Ref. PCR (TXU Energy Co. LLC Proj.),
Ser. 2003 A, 6.75%, due 4/1/38 Putable 4/1/13 Baa2 BBB 1,022
750 Brazos (TX) River Au. Ref. Rev. (Reliant Energy, Inc. Proj.),
Ser. 1999 B, 7.75%, due 12/1/18 Ba1 BBB- 821++
10
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
$ 1,000 Brazos (TX) River
Harbor Navigation Dist. of Brazoria Co.
Env. Fac. Rev. (Dow Chemical Co. Proj.), Ser. 2002 A-4,
5.20%, due 5/15/33 A3 A $ 1,066++
765 California Co. (CA) Tobacco Securitization Agcy. Tobacco
Settlement Asset-Backed Rev., Ser. 2002, 4.75%, due 6/1/19 Baa3 BBB 769
1,750 California Ed. Fac. Au. Ref. Rev. (Stanford Univ.), Ser. 2001 R,
5.00%, due 11/1/21 Aaa AAA 1,859++
2,000 California Hlth. Fac. Fin. Au. Rev. (Catholic Healthcare West),
Ser. 2004 I, 4.95%, due 7/1/26 Baa1 BBB+ 2,092++
2,000 California Hlth. Fac. Fin. Au. Rev. (Cedars-Sinai Med. Ctr.),
Ser. 1999 A, 6.13%, due 12/1/19 A3 2,200++
1,000 California Hlth. Fac. Fin. Au. Rev. (Kaiser Permanente),
Ser. 1998 B, 5.00%, due 10/1/20 AAA 1,078++
1,500 California Poll. Ctrl. Fin. Au. Solid Waste Disp. Rev.
(Republic Svc., Inc. Proj.), Ser. 2002 B, 5.25%, due 6/1/23 Baa3 BBB 1,587++
2,500 California Poll. Ctrl. Fin. Au. Solid Waste Disp. Rev.
(Waste Management, Inc. Proj.), Ser. 2002 B,
4.45%, due 7/1/27 Putable 7/1/05 BBB 2,528++
1,000 California Poll. Ctrl. Fin. Au. Solid Waste Disp. Rev.
(Waste Management, Inc. Proj.), Ser. 2002 C,
4.85%, due 12/1/27 Putable 12/1/17 BBB 1,045++
4,500 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A,
5.75%, due 5/1/17 A3 BBB+ 5,105
1,000 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A,
5.38%, due 5/1/22 A3 BBB+ 1,080
2,250 California St. G.O., Ser. 2002, 5.00%, due 10/1/17 A1 A+ 2,417
1,095 California St. Pub. Works Board Lease Rev. (California Comm.
Colleges), Ser. 2004 B, 5.50%, due 6/1/20 Baa2 BBB- 1,216
1,000 California St. Univ., Fresno Assoc., Inc. Rev. (Auxiliary
Organization Event Ctr.), Ser. 2002, 5.00%, due 7/1/12 Baa3 BBB- 1,058
2,000 California Statewide CDA Cert. of Participation Rev.
(Children's Hosp. Los Angeles), Ser. 1999,
5.13%, due 8/15/19 A2 A+ 2,077++
2,000 California Statewide CDA Cert. of Participation Rev.
(The Internext Group), Ser. 1999, 5.38%, due 4/1/17 BBB 2,037++
5,000 California Statewide CDA Hlth. Fac. Rev. (Mem. Hlth. Svcs.),
Ser. 2003 A, 6.00%, due 10/1/16 A3 A 5,559++
500 California Statewide CDA Rev. (East Valley Tourist Dev. Au.),
Ser. 2003 A, 9.25%, due 10/1/20 BB 549
3,000 California Statewide CDA Rev. (Kaiser Permanente), Ser. 2002 E,
4.70%, due 11/1/36 Putable 6/1/09 A3 3,197++
1,000 Central (CA) Joint Pwr. Hlth. Fin. Au. Cert. of Participation Rev.,
(Comm. Hosp. of Central California Proj.), Ser. 2000,
5.50%, due 2/1/14 Baa1 BBB+ 1,053++
1,020 Cerritos (CA) Pub. Fin. Au. Sub. Tax Allocation Rev.
(Cerritos Redev. Proj.), Ser. 2002 B, 4.40%, due 11/1/16 BBB 1,008
1,000 Cumberland Co. (PA) West Shore Area Au. Hosp. Rev.
(Holy Spirit Hosp. of the Sisters of Christian Charity Proj.),
Ser. 2001, 6.00%, due 1/1/18 BBB+ 1,069++
500 Dallas-Fort Worth (TX) Int'l. Arpt. Fac. Imp. Corp. Rev.,
Ser. 2004 A-1, 6.15%, due 1/1/16 Baa3 BBB- 500++
1,000 De Kalb Co. (GA) Dev. Au. Ref. PCR (General Motors Corp. Proj.),
Ser. 2002, 6.00%, due 3/15/21 A3 BBB 1,077++
1,210 Elk Grove (CA) Spec. Tax Rev. (East Franklin Comm. Fac.
Dist. Number 1), Ser. 2002 A, 5.38%, due 8/1/17 BB+ 1,260
See Notes to Schedule of Investments
11
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
$ 1,270 Los Angeles (CA)
Dept. of Wtr. & Pwr. Sys. Rev., Ser. 2001 A,
Sub. Ser. A-3, 5.38%, due 7/1/20 Aa3 $ 1,324
750 Miami Beach (FL) Hlth. Fac. Au. Hosp. Ref. Rev. (Mount Sinai
Med. Ctr. of Florida Proj.), Ser. 2004, 6.25%, due 11/15/09 Ba2 BB 772++
1,500 Morehouse Parish (LA) Ref. PCR (Int'l. Paper Co. Proj.),
Ser. 2001 A, 5.25%, due 11/15/13 Baa2 BBB 1,617++
1,405 North Carolina Muni. Pwr. Agcy. Number 1 Catawba Elec. Rev.,
Ser. 2003 A, 5.50%, due 1/1/14 Baa1 BBB+ 1,556
605 Oakland (CA) Redev. Agcy. Rev. (Coliseum Area Redev. Proj.),
Ser. 2003, 5.00%, due 9/1/16 A- 636
635 Oakland (CA) Redev. Agcy. Rev. (Coliseum Area Redev. Proj.),
Ser. 2003, 5.00%, due 9/1/17 A- 665
1,370 Puerto Rico Children's Trust Tobacco Settlement Asset-Backed
Rev., Ser. 2002, 5.38%, due 5/15/33 Baa3 BBB 1,252
440 Roseville (CA) Stone Point Comm. Fac. District No. 1 Special
Tax Rev., Ser. 2003, 5.70%, due 9/1/17 BB+ 453
830 San Diego (CA) Redev. Agcy. Sub. Parking Rev. (Centre City
Redev. Proj.), Ser. 2003 B, 4.80%, due 9/1/15 Baa2 A- 856
820 San Diego (CA) Redev. Agcy. Sub. Parking Rev. (Centre City
Redev. Proj.), Ser. 2003 B, 4.90%, due 9/1/16 Baa2 A- 847
3,000 San Francisco (CA) Bay Area Toll Au. Toll Bridge Rev., Ser. 2001 D,
5.00%, due 4/1/17 Aa3 AA 3,259
1,000 Santa Rosa (CA) Rancheria Tachi Yokut Tribe Enterprise Rev.,
Ser. 2003, 6.13%, due 3/1/13 BBB 1,004
1,000 South Gate (CA) Pub. Fin. Au. Tax Allocation Rev. (South Gate
Redev. Proj. No. 1), Ser. 2002, 5.00%, due 9/1/16 AAA 1,088
1,250 Tobacco Settlement Fin. Corp. (LA) Tobacco Settlement
Asset-Backed Rev., Ser. 2001 B, 5.50%, due 5/15/30 Baa3 BBB 1,115
600 Univ. of California Regents Cert. of Participation Rev.
(San Diego Campus & Sacramento Proj.), Ser. 2002 A,
5.25%, due 1/1/18 Aa2 643
750 Verrado (AZ) Comm. Fac. Dist. Number 1 G.O., Ser. 2003,
6.15%, due 7/15/17 BB- 766
250 Virgin Islands Pub. Fin. Au. Refinery Fac. Rev. (HOVENSA
Refinery Proj.), Ser. 2003, 6.13%, due 7/1/22 Baa3 BBB- 268
750 Virgin Islands Pub. Fin. Au. Rev. (Virgin Islands Matching
Fund Loan Notes), Ser. 1998 E, 6.00%, due 10/1/22 BBB 772
1,000 Virgin Islands Wtr. & Pwr. Au. Elec. Sys. Ref. Rev., Ser. 1998,
5.30%, due 7/1/18 BBB 1,026
----------
71,190
----------
TAX-EXEMPT VARIABLE RATE DEMAND NOTES--BACKED BY INSURANCE (0.2%)
FINANCIAL SECURITY ASSURANCE INC.
200 California Hsg. Fin. Agcy. Home Mtge. Rev., Ser. 2003 U,
1.76%, VRDN due 11/1/04 VMIG1 A-1+ 200
----------
TAX-EXEMPT VARIABLE RATE DEMAND NOTES--BACKED BY LETTERS OF CREDIT (0.9%)
BANK OF AMERICA
100 California St. Econ. Rec. Rev., Ser. 2004 C-5,
1.68%, VRDN due 11/1/04 VMIG1 A-1+ 100
280 Irvine (CA) Ltd. Oblig. Imp. (Assessment Dist. No 93-14),
Ser. 2000, 1.70%, VRDN due 11/1/04 VMIG1 A-1+ 280
300 Newport Beach (CA) Rev. (Hoag Mem. Hosp. Presbyterian),
Ser. 1992, 1.68%, VRDN due 11/1/04 VMIG1 A-1+ 300++
12
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
STATE STREET BANK
$ 200 Irvine Ranch (CA) Wtr. Dist. G.O., Ser. 1995,
1.70%, VRDN due 11/1/04 VMIG1 A-1+ $ 200
----------
880
----------
TOTAL INVESTMENTS (155.7%) (COST $153,401) 159,259##
Cash, receivables and other assets, less liabilities (2.0%) 2,051
Liquidation Value of Auction Market Preferred Shares [(57.7%)] (59,000)
----------
TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS (100.0%) $ 102,310
----------
See Notes to Schedule of Investments
13
SCHEDULE OF INVESTMENTS Intermediate Municipal Fund Inc.
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
TAX-EXEMPT SECURITIES--PRE-REFUNDED BACKED BY U.S. GOVERNMENT SECURITIES (0.8%)
$ 2,225 Massachusetts St. Wtr. Poll. Abatement Trust Pre-Refunded
Rev. (Pool Prog.), Ser. 2001, 5.25%, due 2/1/16 Aaa AAA $ 2,523
20 San Antonio (TX) Pre-Refunded Cert. of Obligation G.O.,
Ser. 2002, 5.00%, due 2/1/14 P/R 2/1/12 Aa2 AA+ 22
----------
2,545
----------
TAX-EXEMPT SECURITIES--ESCROWED IN U.S. GOVERNMENT SECURITIES (0.6%)
1,670 Illinois Metro. Pier & Exposition Au. Dedicated St. Tax Ref. Rev.,
Ser. 1998 A, 5.50%, due 6/15/17 AAA 1,967
----------
TAX-EXEMPT SECURITIES--BACKED BY INSURANCE (74.7%)
AMERICAN MUNICIPAL BOND ASSURANCE CORP.
1,500 California St. Pub. Works Board Lease Rev., Ser. 2002 A,
5.25%, due 12/1/17 AAA 1,653
5,000 Chicago (IL) G.O., Ser. 1995 A-2, 6.25%, due 1/1/13 Aaa AAA 5,993
6,120 Chicago (IL) G.O., Ser. 2002 A, 5.38%, due 1/1/17 Aaa AAA 6,856
4,220 Colorado Springs (CO) Util. Sys. Sub. Lien Ref. Rev., Ser. 2002 A,
5.38%, due 11/15/18 AAA 4,752
4,100 Fargo (ND) Hlth. Sys. Rev. (Meritcare Obligated Group),
Ser. 2002 A, 5.63%, due 6/1/17 AAA 4,543++
1,065 Indiana St. Recreational Dev. Comm. Rev., Ser. 2002,
5.25%, due 7/1/18 AAA 1,170
1,125 Indiana St. Recreational Dev. Comm. Rev., Ser. 2002,
5.25%, due 7/1/19 AAA 1,229
3,000 Massachusetts Port Au. Spec. Fac. Rev. (Delta Air Lines,
Inc. Proj.), Ser. 2001 A, 5.50%, due 1/1/19 AAA 3,113++
5,010 New Hampshire Hlth. & Ed. Fac. Au. Rev. (Univ. Sys. of New
Hampshire), Ser. 1992, 5.38%, due 7/1/17 AAA 5,610
7,000 Palm Beach Co. (FL) Sch. Board Cert. of Participation,
Ser. 2001 B, 5.38%, due 8/1/17 AAA 7,830
4,610 Thornton (CO) Cert. of Participation, Ser. 2002,
5.38%, due 12/1/16 Aaa AAA 5,204
FINANCIAL GUARANTY INSURANCE CO.
4,000 Denver (CO) City & Co. Arpt. Sys. Ref. Rev., Ser. 2002 E,
5.25%, due 11/15/14 Aaa AAA 4,355
3,075 Detroit (MI) Sch. Dist. Sch. Bldg. & Site Imp. G.O., Ser. 2002 A,
5.50%, due 5/1/15 AAA 3,490
3,235 Houston (TX) Arpt. Sys. Sub. Lien. Ref. Rev., Ser. 2001 A,
5.50%, due 7/1/16 AAA 3,548
4,355 Las Vegas (NV) Valley Wtr. Dist. Ref. & Wtr. Imp. G.O., Ser. 2003 A,
5.25%, due 6/1/16 Aaa AAA 4,860
4,935 Massachusetts St. Hlth. & Ed. Fac. Au. Rev. (New England
Med. Ctr. Hosp.), Ser. 2002 H, 5.38%, due 5/15/16 AAA 5,492++
2,140 Mt. Pleasant Town (SC) Waterworks & Swr. Sys. Ref. & Imp. Rev.,
Ser. 2002, 5.25%, due 12/1/17 AAA 2,392
2,080 Oakland (CA) Redev. Agcy. Sub. Tax Allocation Rev. (Central
Dist. Redev. Proj.), Ser. 2003, 5.50%, due 9/1/18 AAA 2,329
8,140 Orange Co. (FL) Sales Tax Ref. Rev., Ser. 2002 A,
5.13%, due 1/1/18 Aaa AAA 8,879
2,000 Philadelphia (PA) Arpt. Ref. Rev. (Philadelphia Arpt. Sys.),
Ser. 1998 A, 5.38%, due 6/15/14 AAA 2,176
6,250 Port of Seattle (WA) Sub Lien Rev., Ser. 2002 B,
5.50%, due 9/1/16 AAA 6,861
14
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
$ 5,500 Prince Georges Co.
(MD) Cons. Pub. Imp. G.O., Ser. 2001,
5.25%, due 12/1/16 Aaa AAA $ 6,110
1,000 Sarasota Co. (FL) Util. Sys. Ref. Rev., Ser. 2002 C,
5.25%, due 10/1/20 Aaa AAA 1,099
2,500 Tacoma (WA) Wtr. Sys. Rev., Ser. 2001, 5.13%, due 12/1/19 AAA 2,733
FINANCIAL SECURITY ASSURANCE INC.
3,495 Bi State (MO-IL) Dev. Agcy. Metro. Dist. Rev. (Metrolink
Cross Co. Extension Proj.), Ser. 2002 B, 5.25%, due 10/1/16 Aaa AAA 3,892
1,100 Charleston Co. (SC) Sch. Dist. G.O., Ser. 2001,
5.00%, due 2/1/18 Aa1 1,182
3,600 Corpus Christi (TX) Tax & Muni. Hotel Occupancy Tax G.O.,
Ser. 2002, 5.50%, due 9/1/17 AAA 4,082
1,935 Dallas-Fort Worth (TX) Int'l. Arpt. Imp. Rev., Ser. 2004 B,
5.50%, due 11/1/18 Aaa AAA 2,130
8,800 Energy Northwest (WA) Elec. Ref. Rev. (Proj. No. 3), Ser. 2001 A,
5.50%, due 7/1/17 Aaa AAA 9,881
7,000 Harris Co. (TX) Toll Road Sr. Lien Ref. Rev., Ser. 2002,
5.38%, due 8/15/16 AAA 7,873
2,580 Indianapolis (IN) Local Pub. Imp. Rev. (Indianapolis Arpt.
Au. Proj.), Ser. 2003 A, 5.63%, due 1/1/17 AAA 2,847
2,000 Kane, Cooke, & DuPage Cos. (IL) Elgin Sch. Dist. Number U-46
G.O., Ser. 1998, 5.35%, due 1/1/15 Aaa 2,222
5,000 King & Snohomish Cos. (WA) Northshore Sch. Dist. Number 417
G.O., Ser. 2002, 5.50%, due 12/1/17 Aaa AAA 5,665
4,260 King Co. (WA) Pub. Trans. Sales Tax Ref. G.O., Ser. 2002,
5.38%, due 12/1/14 Aaa AAA 4,853
3,015 Knox Co. (TN) Hlth., Ed., & Hsg. Fac. Board Hosp. Ref. & Imp.
Rev., Ser. 2002 A, 5.50%, due 1/1/18 Aaa AAA 3,325++
1,725 Maine Muni. Bond Bank Rev., Ser. 1998 C,
5.35%, due 11/1/18 AAA 1,904
5,000 New Jersey Bldg. Au. St. Bldg. Ref. Rev., Ser. 2002 B,
5.25%, due 12/15/15 AAA 5,618
4,665 South Carolina St. Pub. Svc. Au. Rev., Ser. 2002 B,
5.38%, due 1/1/18 Aaa AAA 5,218
4,200 Tarrant (TX) Reg. Wtr. Dist. Wtr. Ref. & Imp. Rev., Ser. 2002,
5.38%, due 3/1/16 Aaa AAA 4,685
5,395 Truckee Meadows (NV) Wtr. Au. Wtr. Rev., Ser. 2001 A,
5.50%, due 7/1/15 AAA 6,052
1,370 Wisconsin Hlth. & Ed. Fac. Au. Rev. (Aurora Med. Group, Inc.
Proj.), Ser. 1996, 6.00%, due 11/15/11 Aaa AAA 1,596++
MUNICIPAL BOND INVESTORS ASSURANCE CORP.
1,465 Arizona St. Energy Mgt. Svcs. (Main) LLC Energy Conservation
Rev. (Arizona St. Univ. Proj.-Main Campus), Ser. 2002,
5.25%, due 7/1/17 AAA 1,632
3,000 CDP-King Co. III (WA) Lease Rev. (King Street Ctr. Proj.),
Ser. 1997, 5.13%, due 6/1/17 Aaa AAA 3,113
5,335 Clark Co. (NV) Passenger Fac. Charge Ref. Rev.
(Las Vegas-McCarran Int'l. Arpt. Proj.), Ser. 2002 A,
5.25%, due 7/1/10 AAA 5,834
4,575 Henry Co. (GA) Wtr. & Swr. Au. Wtr. & Swr. Ref. Rev., Ser. 2002 A,
5.13%, due 2/1/17 Aaa AAA 5,078
4,955 Houston (TX) Pub. Imp. Ref. G.O., Ser. 2002, 5.25%, due 3/1/17 AAA 5,492
5,000 Illinois G.O., First Ser. 2002, 5.25%, due 10/1/14 Aaa 5,623
See Notes to Schedule of Investments
15
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
$ 3,000 Illinois Hlth. Fac.
Au. Rev. (Loyola Univ. Hlth. Sys.), Ser. 1997 A,
6.00%, due 7/1/14 Aaa AAA $ 3,544++
1,000 Indiana Muni. Pwr. Agcy. Pwr. Supply Sys. Rev., Ser. 2002 B,
5.25%, due 1/1/18 Aaa AAA 1,091
1,850 Massachusetts St. G.O., Ser. 2002 E, 5.38%, due 1/1/18 AAA 2,100
5,000 Michigan St. Hsg. Dev. Au. Single-Family Mtge. Rev., Ser. 2001 A,
5.30%, due 12/1/16 AAA 5,306
2,710 Newnan (GA) Hosp. Au. Rev. Anticipation Certificate
(Newnan Hosp., Inc. Proj.), Ser. 2002, 5.50%, due 1/1/18 Aaa 3,015++
1,910 Southmost (TX) Reg. Wtr. Au. Wtr. Supply Contract Rev.
(Desalination Plant Proj.), Ser. 2002, 5.50%, due 9/1/19 Aaa 2,153
1,000 Trinity (TX) River Au. Imp. & Ref. Rev. (Tarrant Co. Wtr. Proj.),
Ser. 2003, 5.50%, due 2/1/16 AAA 1,134
4,555 Washington St. G.O., Ser. 1998 C, 6.00%, due 7/1/12 AAA 5,376
7,205 Wisconsin St. G.O., Ser. 2002 C, 5.25%, due 5/1/17 Aaa AAA 8,017
----------
233,810
----------
TAX-EXEMPT SECURITIES--OTHER (78.3%)
4,145 Anson (TX) Ed. Fac. Corp. Std. Hsg. Rev. (Univ. of Texas at
Dallas-Waterview Park Proj.), Ser. 2002, 5.00%, due 1/1/23 A 4,191++
1,000 Austin (TX) Convention Enterprises, Inc. Convention Ctr.
Hotel First Tier Rev., Ser. 2001 A, 6.38%, due 1/1/16 Baa3 BBB- 1,049
1,645 Badger (WI) Tobacco Asset Securitization Corp. Tobacco
Settlement Asset-Backed Rev., Ser. 2002, 6.13%, due 6/1/27 Baa3 BBB 1,595
2,000 Boone Co. (MO) Hosp. Ref. Rev. (Boone Hosp. Ctr.), Ser. 2002,
5.05%, due 8/1/20 A3 2,064++
2,425 Branson (MO) Dev. Fin. Board Infrastructure Fac. Board Rev.,
Ser. 2003 A, 5.00%, due 12/1/17 Baa1 2,531
3,300 Brazos (TX) River Au. Ref. PCR (TXU Energy Co. LLC Proj.),
Ser. 2003 A, 6.75%, due 4/1/38 Putable 4/1/13 Baa2 BBB 3,749++
1,000 Brazos (TX) River Au. Ref. PCR (TXU Energy Co. LLC Proj.),
Ser. 2003 D, 5.40%, due 10/1/29 Putable 10/1/14 Baa2 1,057++
1,000 Brazos (TX) River Au. Ref. Rev. (Reliant Energy, Inc. Proj.),
Ser. 1999 B, 7.75%, due 12/1/18 Ba1 BBB- 1,095++
4,000 Brazos (TX) River Harbor Navigation Dist. Env. Fac. Rev.
(Dow Chemical Co. Proj.), Ser. 2002 B-2,
4.75%, due 5/15/33 Putable 5/15/07 A3 A 4,168++
2,500 Broward Co. (FL) G.O., Ser. 2001 A, 5.25%, due 1/1/18 Aa1 2,767
3,500 California Poll. Ctrl. Fin. Au. Solid Waste Disp. Rev.
(Republic Svc., Inc. Proj.), Ser. 2002 B, 5.25%, due 6/1/23 Baa3 BBB 3,704++
2,500 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A,
5.75%, due 5/1/17 A3 BBB+ 2,836
3,460 California St. Dept. of Wtr. Res. Pwr. Supply Rev., Ser. 2002 A,
5.38%, due 5/1/22 A3 BBB+ 3,737
1,240 California Statewide CDA Hlth. Fac. Rev. (Mem. Hlth. Svcs.),
Ser. 2003 A, 6.00%, due 10/1/16 A3 A 1,379++
1,500 California Statewide CDA Rev. (East Valley Tourist Dev. Au.),
Ser. 2003 A, 9.25%, due 10/1/20 1,646^^
1,500 Chicago (IL) Metro. Wtr. Reclamation Dist. Cap. Imp. G.O.,
Ser. 2002 C, 5.38%, due 12/1/16 AAA 1,698
1,000 Clark Co. (WA) Vancouver Sch. Dist. Number 37 G.O., Ser. 1998,
5.13%, due 12/1/12 A3 1,124
1,765 Cumberland Co. (PA) West Shore Area Au. Hosp. Rev., (Holy
Spirit Hosp. of the Sisters of Christian Charity Proj.), Ser. 2001,
6.05%, due 1/1/19 BBB+ 1,881++
16
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
$ 2,100 Dallas-Fort Worth
(TX) Int'l. Arpt. Fac. Imp. Corp. Rev.,
Ser. 2004 A-1, 6.15%, due 1/1/16 Baa3 BBB- $ 2,100++
4,210 DCH Hlth. Care Au. (AL) Hlth. Care Fac. Rev., Ser. 2002,
5.25%, due 6/1/14 A1 A+ 4,530
1,000 Delaware River (PA-NJ) Joint Toll Bridge Comm. Sys. Rev.,
Ser. 2003, 5.25%, due 7/1/18 A2 A- 1,088
1,000 Denton, Tarrant, & Wise Cos. (TX) Northwest Ind. Sch. Dist.
Unlimited Sch. Bldg. & Ref. G.O., Ser. 2002,
5.50%, due 8/15/17 AAA 1,119
2,000 Denver (CO) City & Co. Arpt. Sys. Rev., Ser. 1991 D,
7.75%, due 11/15/13 AAA 2,467
4,495 Dist. of Columbia (Washington, D.C.) Ref. G.O., Ser. 2002 C,
5.25%, due 6/1/13 AAA 4,995
1,750 Ector Co. (TX) Hosp. Dist. Hosp. Rev., Ser. 2002 A,
5.63%, due 4/15/16 A2 A- 1,828
1,745 Ector Co. (TX) Hosp. Dist. Hosp. Rev., Ser. 2002 A,
5.63%, due 4/15/17 A2 A- 1,816
3,000 Fiddlers Creek (FL) Comm. Dev. Dist. Number 2 Spec.
Assessment Rev., Ser. 2003 A, 6.00%, due 5/1/16 BB- 3,056
825 Fort Bend Co. (TX) Ind. Dev. Corp. Ref. PCR (Frito-Lay, Inc.
Proj.), Ser. 1987, 3.00%, due 10/1/11 A1 833++
2,000 Freeborn Co. (MN) Hsg. & Redev. Au. Lease Rev.
(Criminal Justice Ctr. Proj.), Ser. 2002, 5.38%, due 2/1/17 Baa1 2,111
3,000 Golden St. (CA) Tobacco Securitization Corp. Tobacco
Settlement Asset-Backed Rev., Ser. 2003 A-1,
6.25%, due 6/1/33 Baa3 BBB 2,862
5,130 Illinois Ed. Fac. Au. Rev. (Field Museum of Natural History),
Ser. 2002, 4.30%, due 11/1/36 A2 A 5,234++
3,560 Indiana Bond Bank Rev., Ser. 2002 B, 5.25%, due 2/1/18 Baa2 A- 3,886
10,000 Indiana Bond Bank Rev. (St. Revolving Fund Prog.), Ser. 2001 A,
5.38%, due 2/1/17 AAA 11,127
2,050 Indiana St. Hlth. Fac. Fin. Au. Rev. (Hlth. Sys. Sisters of
St. Francis), Ser. 2001, 5.35%, due 11/1/15 Aa3 A 2,219++
1,070 Ingham & Clinton Cos. (MI) East Lansing Bldg. Au. Ref. G.O.,
Ser. 1999, 5.25%, due 10/1/16 AA 1,177
3,000 Iowa Tobacco Settlement Au. Tobacco Settlement Asset-Backed
Rev., Ser. 2001 B, 5.30%, due 6/1/25 Baa3 BBB 2,537
2,000 Jasper (IN) Hosp. Au. Hosp. Fac. Ref. Rev. (Mem. Hosp. & Hlth.
Care Ctr. Proj.), Ser. 2002, 5.50%, due 11/1/17 AA 2,189++
1,050 Kent Co. (MI) Forest Hills Pub. Sch. Unlimited G.O., Ser. 2000,
5.25%, due 5/1/19 Aa2 1,159
2,000 Lehigh Co. (PA) Gen. Purp. Au. Rev. (KidsPeace Oblig. Group),
Ser. 1998, 6.00%, due 11/1/23 Ba2 1,739++
2,000 Lubbock (TX) Hlth. Fac. Dev. Corp. Rev. (St. Joseph Hlth. Sys.),
Ser. 1998, 5.25%, due 7/1/16 Aa3 AA- 2,093++
1,310 Lyons (NY) Comm. Hlth. Initiatives Corp. Fac. Rev., Ser. 2004,
5.50%, due 9/1/14 A2 1,437
1,375 Macomb Co. (MI) New Haven Comm. Sch. Bldg. & Site G.O.,
Ser. 2002, 5.25%, due 5/1/17 Aa1 AA+ 1,530
1,000 Martin Co. (NC) Ind. Fac. & Poll. Ctrl. Fin. Au. Solid Waste
Disp. Rev. (Weyerhaeuser Co. Proj.), Ser. 1994,
6.80%, due 5/1/24 Baa2 BBB 1,025++
1,000 Maryland St. Hlth. & Higher Ed. Fac. Au. Rev. (Union Hosp.
of Cecil Co.), Ser. 2002, 5.50%, due 7/1/14 A3 1,099++
See Notes to Schedule of Investments
17
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
$ 2,400 Mashantucket (CT) Western Pequot Tribe Spec. Rev., Sub.
Ser. 1997 B, 5.70%, due 9/1/12 Baa3 $ 2,571**
2,450 Massachusetts St. Hlth. & Ed. Fac. Au. Rev. (Caritas Christi
Oblig. Group), Ser. 1999 A, 5.70%, due 7/1/15 BBB 2,535++
2,810 Massachusetts St. Hlth. & Ed. Fac. Au. Rev. (Milford-Whitinsville
Reg. Hosp.), Ser. 1998 C, 5.75%, due 7/15/13 Baa2 BBB 2,931++
5,030 Massachusetts St. Wtr. Poll. Abatement Trust Rev. (MWRA Prog.),
Ser. 2002 A, 5.25%, due 8/1/19 Aaa AAA 5,583
2,775 Massachusetts St. Wtr. Poll. Abatement Trust Unrefunded
Balance Rev. (Pool Prog.), Ser. 2001, 5.25%, due 2/1/16 Aaa AAA 3,079
3,085 Memphis-Shelby Co. (TN) Arpt. Au. Spec. Fac. Ref. Rev.
(Federal Express Corp.), Ser. 2002, 5.05%, due 9/1/12 Baa2 BBB 3,317++
1,750 Miami Beach (FL) Hlth. Fac. Au. Hosp. Ref. Rev. (Mount Sinai
Med. Ctr. Florida Proj.), Ser. 2004, 6.25%, due 11/15/09 Ba2 BB 1,801++
1,500 Michigan St. Bldg. Au. Rev. (Fac. Prog.), Ser. 2001 II,
5.50%, due 10/15/18 Aa1 AA+ 1,687
2,735 Michigan Strategic Fund Solid Waste Disp. Ltd. Oblig. Ref.
Rev. (Waste Mgt. Inc. Proj.), Ser. 2002, 4.20%, due 12/1/12 BBB 2,774++
2,000 Missouri St. Env. Imp. & Energy Res. Au. Wtr. Poll. Ctrl. &
Drinking Wtr. Rev., Ser. 2002 B, 5.50%, due 7/1/16 AAA 2,265
1,115 Missouri St. Hsg. Dev. Comm. Multi-Family Hsg. Rev., Ser. 2001 II,
5.25%, due 12/1/16 AA 1,198
775 Missouri St. Hsg. Dev. Comm. Multi-Family Hsg. Rev., Ser. 2001 III,
5.05%, due 12/1/15 AA 832
5,000 Montgomery Co. (PA) Higher Ed. & Hlth. Au. Hosp. Rev.
(Abington Mem. Hosp. Proj.), Ser. 2002 A, 5.00%, due 6/1/19 A 5,180++
3,000 Moraine (OH) Solid Waste Disp. Rev. (General Motors Corp. Proj.),
Ser. 1994, 6.75%, due 7/1/14 A3 BBB 3,431++
2,500 Morehouse Parish (LA) Ref. PCR (Int'l. Paper Co. Proj.),
Ser. 2001 A, 5.25%, due 11/15/13 Baa2 BBB 2,696++
2,000 MuniMae Subordinate Cumulative Perpetual Preferred Shares,
4.70%, due 6/30/49 Putable 9/30/09 Ba2 2,002
2,000 Nevada St. Cap. Imp. Ltd. G.O., Ser. 1998 B,
5.13%, due 4/15/17 Aa2 2,147
1,500 New Jersey Econ. Dev. Au. Cigarette Tax Rev., Ser. 2004,
5.63%, due 6/15/19 Baa2 BBB 1,582
6,900 New Jersey Ed. Fac. Au. Rev. (Stevens Institute of Technology),
Ser. 2002 C, 5.25%, due 7/1/17 Baa1 A- 7,411++
4,000 New Jersey Hlth. Care Fac. Fin. Au. Rev. (Somerset Med. Ctr. Issue),
Ser. 2003, 5.50%, due 7/1/18 Baa2 4,191++
3,250 New York City (NY) G.O., Ser. 2002 C, 5.50%, due 8/1/15 A2 3,624
2,580 New York City (NY) IDA Civic Fac. Rev. (Lycee Francais de
New York Proj.), Ser. 2002 A, 5.50%, due 6/1/14 A 2,810++
1,000 New York Convention Ctr. Operating Corp. Cert. of Participation
(Yale Bldg. Acquisition Proj.), Ser. 2003, 5.25%, due 6/1/08 BB+ 1,032
3,500 New York St. Dorm. Au. Personal Income Tax Rev., Ser. 2003 A,
5.38%, due 3/15/20 AA 3,842
1,000 New York St. Dorm. Au. Rev. (Mount Sinai NYU Hlth. Oblig. Group),
Ser. 2000 C, 6.00%, due 7/1/26 Baa3 1,003++
1,300 New York St. Urban Dev. Corp. Ref. Rev. (Correctional Cap. Fac.),
Ser. 1998, 5.00%, due 1/1/14 A3 AA- 1,374
4,780 North Central (TX) Hlth. Fac. Dev. Corp. Hosp. Ref. Rev. (Baylor
Hlth. Care Sys. Proj.), Ser. 1998, 5.10%, due 5/15/13 Aa3 AA- 5,099++
18
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
$ 3,760 Ohio Air Quality Dev. Au. Env. Imp. Ref. Rev. (USX Corp. Proj.),
Ser. 1995, 5.00%, due 11/1/15 Baa1 $ 4,100++
2,085 Palm Beach Co. (FL) Hlth. Fac. Au. Hosp. Ref. Rev. (BRCH Corp.
Oblig. Group), Ser. 2001, 5.00%, due 12/1/12 A+ 2,230++
3,850 Royal Oak (MI) Hosp. Fin. Au. Hosp. Ref. Rev. (William
Beaumont Hosp.), Ser. 1996 I, 6.25%, due 1/1/12 Aa3 AA- 4,484++
6,795 San Antonio (TX) Ind. Sch. Dist. Unlimited Tax G.O., Ser. 2001 B,
5.38%, due 8/15/17 Aaa AAA 7,559
1,240 San Antonio (TX) Unrefunded Balance Cert. of Obligation G.O.,
Ser. 2002, 5.00%, due 2/1/14 Aa2 AA+ 1,362
740 San Diego (CA) Redev. Agcy. Sub. Parking Rev. (Centre City
Redev. Proj.), Ser. 2003 B, 5.00%, due 9/1/17 Baa2 A- 765
2,000 Sayre (PA) Hlth. Care Fac. Au. Rev. (Guthrie Hlth. Proj.), Ser.
2002 A, 5.75%, due 12/1/21 A- 2,133++
1,625 Skagit Co. (WA) Pub. Hosp. Dist. Ref. Rev., Ser. 2003,
6.00%, due 12/1/18 Baa3 1,689
2,345 South Carolina Jobs Econ. Dev. Au. Hosp. Ref. Rev. (Palmetto
Hlth. Alliance), Ser. 2003 A, 6.00%, due 8/1/13 Baa2 BBB 2,599++
2,000 South Carolina Jobs Econ. Dev. Au. Hosp. Ref. Rev. (Palmetto
Hlth. Alliance), Ser. 2003 A, 6.13%, due 8/1/23 Baa2 BBB 2,128++
155 Spokane Co. (WA) Ltd. Tax G.O., Ser. 1998, 5.10%, due 12/1/17 Aa3 166
2,540 St. Paul (MN) Port Au. Lease Rev. (Office Bldg. at Cedar Street),
Ser. 2002, 5.00%, due 12/1/17 Aa1 2,745
500 Texas Std. Hsg. Corp. Std. Hsg. Rev. (Midwestern St. Univ. Proj.),
Ser. 2002, 5.50%, due 9/1/12 Baa3 516
1,000 Tobacco Settlement Fin. Corp. (LA) Tobacco Settlement
Asset-Backed Rev., Ser. 2001 B, 5.50%, due 5/15/30 Baa3 BBB 892
1,085 Tyler (TX) Hlth. Fac. Dev. Corp. Hosp. Rev. (Mother Frances Hosp.
Reg. Hlth. Care Ctr. Proj.), Ser. 2003, 5.25%, due 7/1/13 Baa1 1,151
3,500 Union Co. (SC) IDR (Federal Paper Board Co., Inc. Proj.),
Ser. 1989, 4.55%, due 11/1/09 Baa2 BBB 3,651++
2,950 Univ. of Texas Board of Regents Fin. Sys. Rev., Ser. 1999 B,
5.38%, due 8/15/18 AAA 3,310
1,900 Univ. of Wisconsin Hosp. & Clinics Au. Hosp. Rev., Ser. 2002 B,
5.50%, due 4/1/12 A1 2,079
1,750 Verrado (AZ) Comm. Fac. Dist. Number 1 G.O., Ser. 2003,
6.15%, due 7/15/17 BB- 1,786
1,000 Virgin Islands Pub. Fin. Au. Refinery Fac. Rev. (Hovensa
Refinery Proj.), Ser. 2003, 6.13%, due 7/1/22 Baa3 BBB- 1,073
1,500 Virgin Islands Pub. Fin. Au. Refinery Fac. Rev. (Hovensa
Refinery Proj.), Ser. 2004, 5.88%, due 7/1/22 Baa3 BBB- 1,587++
3,125 Washington St. Hlth. Care Fac. Au. Rev. (Yakima Valley Mem.
Hosp. Assoc.), Ser. 2002, 5.00%, due 12/1/17 A 3,241++
1,000 Washington St. Var. Purp. G.O., Ser. 1999 A, 4.75%, due 7/1/17 Aa1 AA+ 1,057
2,000 Westmoreland Co. (PA) IDA Gtd. Rev. (National Waste & Energy
Corp., Valley Landfill Expansion Proj.), Ser. 1993,
5.10%, due 5/1/18 BBB 2,109++
2,780 Wisconsin St. Hlth. & Ed. Fac. Au. Rev. (Kenosha Hosp. & Med.
Ctr., Inc. Proj.), Ser. 1999, 5.50%, due 5/15/15 A 2,924++
----------
244,860
----------
TAX-EXEMPT VARIABLE RATE DEMAND NOTES--BACKED BY INSURANCE (0.3%)
MUNICIPAL BOND INVESTORS ASSURANCE CORP.
1,000 California Hsg. Fin. Agcy. Home Mtge. Rev., Ser. 2003 U,
1.76%, VRDN due 11/1/04 VMIG1 A-1+ 1,000
----------
See Notes to Schedule of Investments
19
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
TAX-EXEMPT VARIABLE RATE DEMAND NOTES--OTHER (0.5%)
$ 200 Valdez (AK) Marine Term. Ref. Rev. (BP Pipelines Inc. Proj.),
Ser. 2003 B, 1.74%, VRDN due 11/1/04 VMIG1 A-1+ $ 200++
1,200 Will Co. (IL) Exempt Fac. Ind. Rev. (BP Amoco Chemical Co. Proj.),
Ser. 2002, 1.79%, VRDN due 11/1/04 VMIG1 A-1+ 1,200++
----------
1,400
----------
TOTAL INVESTMENTS (155.2%) (COST $466,443) 485,582##
Cash, receivables and other assets, less liabilities (2.2%) 6,629
Liquidation Value of Auction Market Preferred Shares [(57.4%)] (179,400)
----------
TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS (100.0%) $ 312,811
----------
20
SCHEDULE OF INVESTMENTS New York Intermediate Municipal Fund Inc.
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
TAX-EXEMPT SECURITIES--BACKED BY INSURANCE (34.3%)
AMERICAN CAPITAL ACCESS
$ 1,060 Puerto Rico Ind., Tourist, Ed., Med., & Env. Ctrl. Fac. Rev.,
(Polytechnic Univ. of Puerto Rico Proj.), Ser. 2002 A,
5.25%, due 8/1/16 A $ 1,123++
AMERICAN MUNICIPAL BOND ASSURANCE CORP.
2,000 Metro. Trans. Au. (NY) Ref. Rev., Ser. 2002 A,
5.50%, due 11/15/15 AAA 2,263
2,920 New York City (NY) IDA Civic Fac. Rev. (Packer Collegiate
Institute Proj.), Ser. 2002, 5.00%, due 6/1/22 Aaa AAA 3,086++
960 New York City (NY) Muni. Wtr. Fin. Au. Wtr. & Swr. Sys. Rev.,
Ser. 1992 A, 5.88%, due 6/15/13 Aaa 1,133
2,025 New York City (NY) Trans. Fin. Au. Ref. Rev., Ser. 2002 C,
5.25%, due 8/1/17 AAA 2,231
2,410 New York St. Dorm. Au. Rev. (Rochester Institute of
Technology Proj.), Ser. 2002 A, 5.25%, due 7/1/19 Aaa 2,634++
3,000 Port Authority of NY & NJ Rev., Ser. 2002, 5.50%, due 12/15/12 AAA 3,379
1,535 Ulster Co. (NY) Res. Rec. Agcy. Solid Waste Sys. Ref. Rev.,
Ser. 2002, 5.25%, due 3/1/16 AAA 1,685
FINANCIAL GUARANTY INSURANCE CO.
2,505 Metro. Trans. Au. (NY) Dedicated Tax Fund Rev., Ser. 2001 A,
5.25%, due 11/15/14 AAA 2,812
FINANCIAL SECURITY ASSURANCE INC.
500 Long Island (NY) Pwr. Au. Elec. Sys. Rev., Ser. 1998 A,
5.13%, due 12/1/16 Aaa AAA 544
1,410 New York City (NY) Hlth. & Hosp. Corp. Rev., Ser. 2002 A,
5.50%, due 2/15/13 AAA 1,597
MUNICIPAL BOND INVESTORS ASSURANCE CORP.
2,000 New York St. Dorm. Au. Insured Rev. (Long Island Jewish Med. Ctr.),
Ser. 1998, 5.00%, due 7/1/18 AAA 2,088++
1,600 New York St. Dorm. Au. Insured Rev. (The Culinary Institute
of America), Ser. 1999, 5.38%, due 7/1/15 AAA 1,782++
1,980 New York St. Dorm. Au. Rev. (New York Med. College Proj.),
Ser. 1998, 5.00%, due 7/1/21 Aaa AAA 2,121++
----------
28,478
----------
TAX-EXEMPT SECURITIES--OTHER (121.5%)
3,000 Albany (NY) IDA Civic Fac. Rev., (Charitable Leadership Foundation
Ctr. for Med. Science Proj.), Ser. 2002 A, 6.00%, due 7/1/19 Baa3 3,241
800 Brazos (TX) River Au. Ref. PCR (TXU Energy Co. LLC Proj.),
Ser. 2003 A, 6.75%, due 4/1/38 Putable 4/1/13 Baa2 BBB 909
750 Brazos (TX) River Au. Ref. Rev. (Reliant Energy, Inc. Proj.),
Ser. 1999 B, 7.75%, due 12/1/18 Ba1 BBB- 821++
1,000 Brazos (TX) River Harbor Navigation Dist. of Brazoria Co.
Env. Fac. Rev. (Dow Chemical Co. Proj.), Ser. 2002 A-4,
5.20%, due 5/15/33 Putable 5/15/08 A3 A 1,066++
1,590 Cumberland Co. (PA) West Shore Area Au. Hosp. Rev., (Holy
Spirit Hosp. of the Sisters of Christian Charity Proj.), Ser. 2001,
5.90%, due 1/1/17 BBB+ 1,700++
400 Dallas-Fort Worth (TX) Int'l. Arpt. Fac. Imp. Corp. Rev.,
Ser. 2004 A-1, 6.15%, due 1/1/16 Baa3 BBB- 400++
1,000 De Kalb Co. (GA) Dev. Au. Ref. PCR (General Motors Corp. Proj.),
Ser. 2002, 6.00%, due 3/15/21 A3 BBB 1,077++
1,000 Dutchess Co. (NY) IDA Civic Fac. Ref. Rev. (Marist College Proj.),
Ser. 2003 A, 5.15%, due 7/1/17 Baa1 1,065++
See Notes to Schedule of Investments
21
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
$ 2,000 Dutchess Co. (NY) IDA Ind. Dev. Rev. (IBM Proj.), Ser. 1999,
5.45%, due 12/1/29 A1 A+ $ 2,197++
2,000 Long Island Pwr. Au. (NY) Elec. Sys. Gen. Rev., Ser. 1998 A,
5.50%, due 12/1/13 Aaa AAA 2,336
1,500 Lyons (NY) Comm. Hlth. Initiatives Corp. Fac. Rev., Ser. 2004,
5.50%, due 9/1/14 A2 1,646
500 Miami Beach (FL) Hlth. Fac. Au. Hosp. Ref. Rev. (Mount Sinai
Med. Ctr. of Florida Proj.), Ser. 2004, 6.25%, due 11/15/09 Ba2 BB 515++
980 Monroe Co. (NY) IDA Std. Hsg. Rev., (Collegiate Hsg.
Foundation - Rochester Institute of Technology Proj.),
Ser. 1999 A, 5.25%, due 4/1/19 Baa3 980++
1,000 Monroe Co. (NY) Newpower Corp. Pwr. Fac. Rev., Ser. 2003,
5.10%, due 1/1/16 BBB+ 1,067
1,000 Monroe Co. (NY) Pub. Imp. Ref. G.O., Ser. 1996,
6.00%, due 3/1/13 A3 AA- 1,165
1,000 Morehouse Parish (LA) Ref. PCR (Int'l. Paper Co. Proj.),
Ser. 2001 A, 5.25%, due 11/15/13 Baa2 BBB 1,078++
1,000 New York City (NY) G.O., Ser. 1998 J, 5.00%, due 8/1/11 A2 A 1,067
1,000 New York City (NY) G.O., Ser. 2002 A, 5.75%, due 8/1/16 A2 A 1,121
750 New York City (NY) G.O., Ser. 2002 C, 5.50%, due 8/1/15 A2 836
4,000 New York City (NY) Hsg. Dev. Corp. Multi-Family Hsg. Rev.,
Ser. 2002 E-2, 5.05%, due 11/1/23 Aa2 AA 4,111
1,000 New York City (NY) IDA Civic Fac. Rev. (Lycee Francais de
New York Proj.), Ser. 2002 A, 5.50%, due 6/1/15 A 1,084++
1,030 New York City (NY) IDA Civic Fac. Rev. (Lycee Francais de
New York Proj.), Ser. 2002 A, 5.50%, due 6/1/17 A 1,106++
1,000 New York City (NY) IDA Ind. Dev. Rev. (Brooklyn Navy Yard
Cogeneration Partners, L.P. Proj.), Ser. 1997,
6.20%, due 10/1/22 Ba1 BBB- 1,002
500 New York City (NY) IDA Ind. Dev. Rev. (Harlem Auto Mall Proj.),
Ser. 2004, 5.13%, due 12/30/23 Baa1 BBB 500++
4,000 New York City (NY) Muni. Wtr. Fin. Au. Wtr. & Swr. Sys. Rev.,
Ser. 2002 D, 5.25%, due 6/15/15 Aa2 AA 4,456
3,000 New York City (NY) Trans. Fin. Au. Ref. Rev., Ser. 2002 B,
5.25%, due 2/1/29 Aa2 3,311
800 New York Convention Ctr. Operating Corp. Cert. of Participation
(Yale Bldg. Acquisition Proj.), Ser. 2003, 5.25%, due 6/1/08 Aa1 826
2,000 New York St. Dorm. Au. Court Fac. Lease Rev. (New York City
Issue), Ser. 2003 A, 5.50%, due 5/15/17 A3 A 2,217
1,675 New York St. Dorm. Au. Insured Rev. (Long Island Univ.),
Ser. 2003 A, 5.25%, due 9/1/15 AA 1,838++
3,000 New York St. Dorm. Au. Ref. Rev. (North Gen. Hosp. Proj.),
Ser. 2003, 5.75%, due 2/15/17 AA- 3,374++
1,125 New York St. Dorm. Au. Rev. (City Univ. Sys. Proj.), Ser. 1995 A,
5.63%, due 7/1/16 A3 AA- 1,311
1,010 New York St. Dorm. Au. Rev. (Columbia Univ. Proj.), Ser. 2001 A,
5.25%, due 7/1/16 AAA 1,118++
2,985 New York St. Dorm. Au. Rev. (Lenox Hill Hosp. Oblig. Group Proj.),
Ser. 2001, 5.75%, due 7/1/14 A3 3,278++
2,000 New York St. Dorm. Au. Rev. (Lenox Hill Hosp. Oblig. Group Proj.),
Ser. 2001, 5.75%, due 7/1/16 A3 A- 2,171++
2,500 New York St. Dorm. Au. Rev. (Mount Sinai NYU Hlth. Oblig. Group),
Ser. 2000 B, 6.25%, due 7/1/22 Baa3 2,510++
525 New York St. Dorm. Au. Rev. (New York Methodist Hosp.),
Ser. 2004, 5.25%, due 7/1/18 A3 566
22
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
$ 500 New York St. Dorm. Au. Rev. (North Shore-Long Island Jewish
Oblig. Group), Ser. 2003, 5.00%, due 5/1/18 A3 $ 521++
2,855 New York St. Dorm. Au. Rev. (Rivington House Hlth. Care Fac.),
Ser. 2002, 5.25%, due 11/1/15 Aa1 3,155++
3,000 New York St. Dorm. Au. Rev. (SS Joachim & Anne Residence
Proj.), Ser. 2002, 4.60%, due 7/1/16 Aa3 3,101
250 New York St. Dorm. Au. Secured Hosp. Ref. Rev. (Brookdale
Hosp. Med. Ctr.), Ser. 1998 J, 5.20%, due 2/15/16 A3 AA- 263++
5,500 New York St. Dorm. Au. St. Personal Income Tax Rev., Ser. 2003 A,
5.38%, due 3/15/17 AA 6,112
1,000 New York St. Dorm. Au. Third Gen. Resolution Rev. (St. Univ.
Ed. Fac. Issue Proj.), Ser. 2002 B, 5.25%, due 11/15/23 A3 AA- 1,111
5,000 New York St. Energy Res. & Dev. Au. Fac. Rev. (Consolidated
Edison Co. of New York, Inc. Proj.), Ser. 2001 A,
4.70%, due 6/1/36 A1 A+ 5,042++
1,000 New York St. Env. Fac. Corp. Solid Waste Disp. Rev. (Waste
Management, Inc. Proj.), Ser. 2004 A,
4.45%, due 7/1/17 Putable 7/1/09 BBB 1,035
2,000 New York St. Mtge. Agcy. Homeowner Mtge. Rev., Ser. 1997-67,
5.70%, due 10/1/17 Aa1 2,095
2,000 New York St. Pwr. Au. Rev., Ser. 2002 A, 5.25%, due 11/15/16 Aa2 AA- 2,215
500 New York St. Urban Dev. Corp. Correctional & Youth Fac. Svc.
Rev., Ser. 2002 C, 4.00%, due 1/1/20 AA- 517
1,325 New York St. Urban Dev. Corp. Proj. Ref. Rev. (Ctr. for Ind.
Innovation), Ser. 1995, 6.25%, due 1/1/09 A3 AA- 1,511
2,000 Niagara Co. (NY) IDA Civic Fac. Rev. (Niagara Univ. Proj.),
Ser. 2001 A, 5.50%, due 11/1/16 AA 2,188++
2,500 Niagara Co. (NY) IDA Solid Waste Disp. Fac. Ref. Rev.
(American Ref.-Fuel Co. of Niagara), Ser. 2001 C,
5.63%, due 11/15/24 Baa1 BBB 2,680
945 Puerto Rico Children's Trust Tobacco Settlement Asset-Backed
Rev., Ser. 2002, 5.38%, due 5/15/33 Baa3 BBB 864
1,000 Santa Rosa (CA) Rancheria Tachi Yokut Tribe Enterprise Rev.,
Ser. 2003, 6.13%, due 3/1/13 BBB 1,004
1,000 Tobacco Settlement Fin. Corp. (LA) Tobacco Settlement
Asset-Backed Rev., Ser. 2001 B, 5.50%, due 5/15/30 Baa3 BBB 892
3,000 Triborough Bridge & Tunnel Au. (NY) Gen. Purp. Ref. Rev.,
Ser. 2002 B, 5.25%, due 11/15/18 Aa3 AA- 3,338
500 United Nations (NY) Dev. Corp. Sr. Lien Ref. Rev., Ser. 2004
A, 5.25%, due 7/1/17 A3 529
500 Verrado (AZ) Comm. Fac. Dist. Number 1 G.O., Ser. 2003,
6.15%, due 7/15/17 BB- 510
250 Virgin Islands Pub. Fin. Au. Refinery Fac. Rev. (Hovensa
Refinery Proj.), Ser. 2003, 6.13%, due 7/1/22 Baa3 BBB- 268
750 Virgin Islands Pub. Fin. Au. Rev. (Sub. Lien/Cap. Proj.),
Ser. 1998 E, 6.00%, due 10/1/22 BBB 772
1,000 Westchester Co. (NY) IDA Continuing Care Retirement Comm.
Rev. (Kendal on Hudson Proj.), Ser. 2003 B,
5.70%, due 1/1/34 BB 1,030++
1,000 Yonkers (NY) IDA Civic Fac. Rev. (Comm. Dev.
Properties - Yonkers, Inc.), Ser. 2001 A, 6.25%, due 2/1/16 Baa3 BBB- 1,094++
----------
100,913
----------
See Notes to Schedule of Investments
23
PRINCIPAL AMOUNT RATING * VALUE +
(000'S OMITTED) SECURITY @ MOODY'S S&P (000'S OMITTED)
TAX-EXEMPT VARIABLE RATE DEMAND NOTES--BACKED BY LETTERS OF CREDIT (0.1%)
MORGAN GUARANTY TRUST CO.
$ 100 New York City (NY) G.O., Sub.Ser. 1993 E-2,
1.70%, VRDN due 11/1/04 VMIG1 A-1+ $ 100
----------
TOTAL INVESTMENTS (155.9%) (COST $125,152) 129,491##
Cash, receivables and other assets, less liabilities (2.2%) 1,829
Liquidation Value of Auction Market Preferred Shares [(58.1%)] (48,250)
----------
TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS (100.0%) $ 83,070
----------
24
NEUBERGER BERMAN OCTOBER 31, 2004
NOTES TO SCHEDULE OF INVESTMENTS
+ Investments in securities by Neuberger Berman California Intermediate
Municipal Fund Inc. ("California"), Neuberger Berman Intermediate
Municipal Fund Inc. ("Intermediate"), and Neuberger Berman New York
Intermediate Municipal Fund Inc. ("New York") (individually a "Fund",
collectively, the "Funds") are valued daily by obtaining bid price
quotations from independent pricing services on all securities
available in each service's data base. For all other securities
requiring daily quotations, bid prices are obtained from principal
market makers in those securities or, if quotations are not available,
by a method the Board of Directors of California, Intermediate, and
New York, believes accurately reflects fair value. Numerous factors
may be considered when determining the fair value of a security,
including available analyst, media or other reports, trading in
futures or ADRs and whether the issuer of the security being fair
valued has other securities outstanding. Short-term debt securities
with less than 60 days until maturity may be valued at cost which,
when combined with interest earned, approximates market value.
## At October 31, 2004, selected Fund information on a U.S. Federal
income tax basis was as follows:
GROSS GROSS NET
(000'S OMITTED) UNREALIZED UNREALIZED UNREALIZED
NEUBERGER BERMAN COST APPRECIATION DEPRECIATION APPRECIATION
CALIFORNIA $ 153,401 $ 5,950 $ 92 $ 5,858
INTERMEDIATE 466,443 19,562 423 19,139
NEW YORK 125,152 4,402 63 4,339
@ At time of investment, municipal securities purchased by the Funds are
within the four highest rating categories (with respect to at least
80% of total assets) assigned by a nationally recognized statistical
rating organization ("NRSRO") such as Moody's Investors Service, Inc.,
Standard & Poor's, or Fitch Investors Services, Inc. or, where not
rated, are determined by the Funds' investment manager to be of
comparable quality. Approximately 79%, 74%, and 54% of the municipal
securities held by California, Intermediate, and New York,
respectively, have credit enhancement features backing them, which the
Funds may rely on, such as letters of credit, insurance, or
guarantees. Without these credit enhancement features the securities
may or may not meet the quality standards of the Funds. Pre-refunded
bonds are supported by securities in escrow issued or guaranteed by
the U.S. Government, its agencies, or instrumentalities. The amount
escrowed is sufficient to pay the periodic interest due and the
principal of these bonds. Putable bonds give the Funds the right to
sell back the issue on the date specified.
++ Security is guaranteed by the corporate or non-profit obligor.
** Security exempt from registration under the Securities Act of 1933.
These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers under Rule
144A and are deemed liquid. At October 31, 2004, these securities
amounted to $2,571,000 or 0.8% of net assets for Intermediate.
* Credit ratings are unaudited.
^^ Not rated by a nationally recognized statistical rating organization.
See Notes to Financial Statements
25
NEUBERGER BERMAN OCTOBER 31, 2004
STATEMENTS OF ASSETS AND LIABILITIES
CALIFORNIA INTERMEDIATE NEW YORK
NEUBERGER BERMAN INTERMEDIATE MUNICIPAL CLOSED-END FUNDS INTERMEDIATE MUNICIPAL INTERMEDIATE
(000'S OMITTED EXCEPT PER SHARE AMOUNTS) MUNICIPAL FUND FUND MUNICIPAL FUND
ASSETS
INVESTMENTS IN SECURITIES, AT MARKET VALUE* (NOTE A)--SEE
SCHEDULE OF INVESTMENTS $ 159,259 $ 485,582 $ 129,491
Cash 15 54 93
Interest receivable 2,470 7,964 2,118
Prepaid expenses and other assets 178 409 146
============================================================================================================================
TOTAL ASSETS 161,922 494,009 131,848
============================================================================================================================
LIABILITIES
Dividends payable--preferred shares 73 219 60
Dividends payable--common shares 424 1,372 362
Payable to administrator (Note B) 40 121 32
Accrued expenses and other payables 75 86 74
============================================================================================================================
TOTAL LIABILITIES 612 1,798 528
============================================================================================================================
AUCTION MARKET PREFERRED SHARES SERIES A & B AT LIQUIDATION VALUE
3,000, 8,000 and 3,000 shares authorized; 2,360, 7,176 and 1,930
shares issued and outstanding for California, Intermediate and
New York, respectively; $.0001 par value;
$25,000 liquidation value per share (Note A) 59,000 179,400 48,250
============================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS AT VALUE $ 102,310 $ 312,811 $ 83,070
============================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS CONSIST OF:
Paid-in capital--common shares $ 96,347 $ 293,853 $ 79,063
Undistributed net investment income (loss) 449 904 245
Accumulated net realized gains (losses) on investments (344) (1,085) (577)
Net unrealized appreciation (depreciation) in value of investments 5,858 19,139 4,339
============================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS AT VALUE $ 102,310 $ 312,811 $ 83,070
============================================================================================================================
COMMON SHARES OUTSTANDING ($.0001 par value; 999,997,000,
999,992,000 and 999,997,000 shares authorized for
California, Intermediate and New York, respectively) 6,792 20,705 5,575
============================================================================================================================
NET ASSET VALUE PER COMMON SHARE OUTSTANDING $ 15.06 $ 15.11 $ 14.90
============================================================================================================================
*COST OF INVESTMENTS $ 153,401 $ 466,443 $ 125,152
============================================================================================================================
See Notes to Financial Statements
26
NEUBERGER BERMAN FOR THE YEAR ENDED OCTOBER 31, 2004
STATEMENTS OF OPERATIONS
CALIFORNIA INTERMEDIATE NEW YORK
NEUBERGER BERMAN INTERMEDIATE MUNICIPAL CLOSED-END FUNDS INTERMEDIATE MUNICIPAL INTERMEDIATE
(000'S OMITTED) MUNICIPAL FUND FUND MUNICIPAL FUND
INVESTMENT INCOME
INCOME:
Interest income (Note A) $ 7,157 $ 22,066 $ 6,008
============================================================================================================================
EXPENSES:
Investment management fee (Notes A & B) 396 1,213 324
Administration fee (Note B) 475 1,455 389
Stock transfer agent fees 48 48 48
Auction agent fees (Note B) 150 456 123
Special rate period expense (Notes A & B) 47 161 38
Audit fees 40 40 40
Basic maintenance expense (Note B) 25 25 25
Custodian fees (Note B) 78 138 67
Insurance expense 4 12 3
Legal fees 34 71 31
Shareholder reports 20 58 18
Stock exchange listing fees 3 7 2
Directors' fees and expenses 25 26 25
Miscellaneous 2 5 4
============================================================================================================================
Total expenses 1,347 3,715 1,137
Investment management fee waived (Note B) (396) (1,213) (324)
============================================================================================================================
Expenses reduced by custodian fee expense offset arrangement (Note B) (0) (1) (1)
============================================================================================================================
Total net expenses 951 2,501 812
============================================================================================================================
Net investment income 6,206 19,565 5,196
============================================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE A)
Net realized gain (loss) on:
Investment securities sold (274) (328) (157)
============================================================================================================================
Change in net unrealized appreciation (depreciation) in value of:
Investment securities 4,830 13,555 2,797
============================================================================================================================
Net gain (loss) on investments 4,556 13,227 2,640
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM:
Net investment income (859) (2,590) (704)
============================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON
SHAREHOLDERS RESULTING FROM OPERATIONS $ 9,903 $ 30,202 $ 7,132
============================================================================================================================
See Notes to Financial Statements
27
STATEMENTS OF CHANGES IN NET ASSETS
CALIFORNIA INTERMEDIATE MUNICIPAL FUND
------------------------------------------
YEAR YEAR
ENDED ENDED
NEUBERGER BERMAN INTERMEDIATE MUNICIPAL CLOSED-END FUNDS OCTOBER 31, OCTOBER 31,
(000'S OMITTED) 2004 2003
INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
FROM OPERATIONS:
Net investment income (loss) $ 6,206 $ 5,744
Net realized gain (loss) on investments (274) (70)
Change in net unrealized appreciation (depreciation) of investments 4,830 1,031
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM:
Net investment income (859) (551)
================================================================================================================================
Net increase (decrease) in net assets applicable to common shareholders
resulting from operations 9,903 6,154
================================================================================================================================
DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income (5,094) (5,094)
================================================================================================================================
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from underwriters' over-allotment option exercised -- 2,644
Proceeds from reinvestment of dividends -- --
Payments for preferred shares offering costs -- (744)
================================================================================================================================
Total net proceeds from capital share transactions -- 1,900
================================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 4,809 2,960
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of year 97,501 94,541
================================================================================================================================
End of year $ 102,310 $ 97,501
================================================================================================================================
Undistributed net investment income (loss) at end of year $ 449 $ 196
================================================================================================================================
See Notes to Financial Statements
28
INTERMEDIATE MUNICIPAL FUND
------------------------------------------
YEAR YEAR
ENDED ENDED
NEUBERGER BERMAN INTERMEDIATE MUNICIPAL CLOSED-END FUNDS OCTOBER 31, OCTOBER 31,
(000'S OMITTED) 2004 2003
INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
FROM OPERATIONS:
Net investment income (loss) $ 19,565 $ 18,172
Net realized gain (loss) on investments (328) (757)
Change in net unrealized appreciation (depreciation) of investments 13,555 5,860
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM:
Net investment income (2,590) (1,773)
================================================================================================================================
Net increase (decrease) in net assets applicable to common shareholders
resulting from operations 30,202 21,502
================================================================================================================================
DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income (16,462) (16,450)
================================================================================================================================
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from underwriters' over-allotment option exercised -- 2,501
Proceeds from reinvestment of dividends -- 337
Payments for preferred shares offering costs -- (2,132)
================================================================================================================================
Total net proceeds from capital share transactions -- 706
================================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 13,740 5,758
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of year 299,071 293,313
================================================================================================================================
End of year $ 312,811 $ 299,071
================================================================================================================================
Undistributed net investment income (loss) at end of year $ 904 $ 391
================================================================================================================================
NEW YORK INTERMEDIATE MUNICIPAL FUND
------------------------------------------
YEAR YEAR
ENDED ENDED
NEUBERGER BERMAN INTERMEDIATE MUNICIPAL CLOSED-END FUNDS OCTOBER 31, OCTOBER 31,
(000'S OMITTED) 2004 2003
INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
FROM OPERATIONS:
Net investment income (loss) $ 5,196 $ 4,818
Net realized gain (loss) on investments (157) (420)
Change in net unrealized appreciation (depreciation) of investments 2,797 1,501
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM:
Net investment income (704) (457)
================================================================================================================================
Net increase (decrease) in net assets applicable to common shareholders
resulting from operations 7,132 5,442
================================================================================================================================
DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income (4,348) (4,347)
================================================================================================================================
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from underwriters' over-allotment option exercised -- 3,074
Proceeds from reinvestment of dividends -- 37
Payments for preferred shares offering costs -- (626)
================================================================================================================================
Total net proceeds from capital share transactions -- 2,485
================================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 2,784 3,580
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of year 80,286 76,706
================================================================================================================================
End of year $ 83,070 $ 80,286
================================================================================================================================
Undistributed net investment income (loss) at end of year $ 245 $ 101
================================================================================================================================
29
NOTES TO FINANCIAL STATEMENTS Intermediate Municipal Closed-End Funds
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1 GENERAL: Neuberger Berman California Intermediate Municipal Fund Inc.
("California"), Neuberger Berman Intermediate Municipal Fund Inc.
("Intermediate"), and Neuberger Berman New York Intermediate Municipal
Fund Inc. ("New York") (individually a "Fund", collectively, the
"Funds") were organized as Maryland corporations on July 29, 2002.
California and New York are registered as non-diversified, closed-end
management investment companies and Intermediate is registered as a
diversified, closed-end management investment company under the
Investment Company Act of 1940, as amended. Each Fund's Board of
Directors may classify or re-classify any unissued shares of capital
stock into one or more classes of preferred stock without the approval
of shareholders.
The preparation of financial statements in accordance with U.S.
generally accepted accounting principles requires Neuberger Berman
Management Inc. ("Management") to make estimates and assumptions at
the date of the financial statements. Actual results could differ from
those estimates.
2 PORTFOLIO VALUATION: Investment securities are valued as indicated in
the notes following the Funds' Schedule of Investments.
3 SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on a trade date basis. Interest income, including
accretion of discount (adjusted for original issue discount, where
applicable) and amortization of premium, where applicable, is recorded
on the accrual basis. Realized gains and losses from securities
transactions are recorded on the basis of identified cost and stated
in the Statements of Operations.
4 INCOME TAX INFORMATION: Each Fund is treated as a separate entity for
U.S. Federal income tax purposes. It is the policy of each Fund to
continue to qualify as a regulated investment company by complying
with the requirements of Subchapter M of the Internal Revenue Code
applicable to regulated investment companies and to distribute
substantially all of its earnings to its shareholders. Therefore, no
Federal income or excise tax provision is required.
Income dividends and capital gain distributions are determined in
accordance with income tax regulations, which may differ from
generally accepted accounting principles. These differences are
primarily due to differing treatments of income and gains on various
investment securities held by each Fund, timing differences and
differing characterization of distributions made by each Fund as a
whole.
As determined on October 31, 2004, there were no permanent differences
resulting from different book and tax accounting reclassified at year
end.
The tax character of distributions paid during the years ended October
31, 2004 and 2003 were as follows:
DISTRIBUTIONS PAID FROM:
TAX-EXEMPT INCOME ORDINARY INCOME TOTAL
2004 2003 2004 2003 2004 2003
CALIFORNIA $ 5,945,965 $ 5,621,479 $ 6,705 $ 23,102 $ 5,952,670 $ 5,644,581
INTERMEDIATE 19,015,689 18,151,315 35,236 71,380 19,050,925 18,222,695
NEW YORK 5,050,381 4,789,367 2,299 14,100 5,052,680 4,803,467
30
NEUBERGER BERMAN OCTOBER 31, 2004
As of October 31, 2004, the components of distributable earnings
(accumulated losses) on a U.S. Federal income tax basis were as
follows:
UNDISTRIBUTED UNDISTRIBUTED UNDISTRIBUTED UNREALIZED LOSS
TAX-EXEMPT ORDINARY LONG-TERM APPRECIATION CARRYFORWARDS
INCOME INCOME GAIN (DEPRECIATION) AND DEFERRALS TOTAL
CALIFORNIA $ 946,699 $ -- $ -- $ 5,857,106 $ (343,321) $ 6,460,484
INTERMEDIATE 2,494,886 -- -- 19,138,670 (1,085,587) 20,547,969
NEW YORK 667,827 -- -- 4,339,348 (577,111) 4,430,064
The difference between book basis and tax basis is attributable
primarily to timing differences of dividend payments.
To the extent each Fund's net realized capital gains, if any, can be
offset by capital loss carryforwards, it is the policy of each Fund
not to distribute such gains. As determined at October 31, 2004, the
Funds had unused capital loss carryforwards available for Federal
income tax purposes to offset net realized capital gains, if any, as
follows:
EXPIRING IN: EXPIRING IN:
2011 2012
CALIFORNIA $ 69,587 $ 273,734
INTERMEDIATE 757,224 328,363
NEW YORK 420,475 156,636
5 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Each Fund earns income,
net of expenses, daily on its investments. It is the policy of each
Fund to declare and pay dividends to common shareholders from net
investment income on a monthly basis. Distributions from net realized
capital gains, if any, are normally distributed in December. Income
dividends and capital gain distributions to common shareholders are
recorded on the ex-dividend date. Dividends and distributions to
preferred shareholders are accrued and determined as described in Note
A-7.
Subsequent to October 31, 2004, each Fund declared two monthly
dividends to common shareholders from its net investment income
payable December 15, 2004 and January 18, 2005, to shareholders of
record on November 26, 2004 and December 27, 2004, respectively, with
ex-dividend dates of November 23, 2004 and December 22, 2004,
respectively, as follows:
DIVIDEND PER SHARE
CALIFORNIA $ 0.06250
INTERMEDIATE 0.06625
NEW YORK 0.06500
6 EXPENSE ALLOCATION: Certain expenses are applicable to multiple funds.
Expenses directly attributable to a Fund are charged to that Fund.
Expenses borne by the complex of related investment companies, which
includes open-end and closed-end investment companies for which
Management serves as investment manager, that are not directly
attributed to a Fund, are allocated among the Funds and the other
investment companies in the complex or series thereof, on the basis of
relative net assets, except where a more appropriate allocation of
expenses to each investment company in the complex or series thereof
can otherwise be made fairly.
31
7 REDEEMABLE PREFERRED SHARES: On October 21, 2002, the Funds
re-classified unissued shares of capital stock into several series of
Auction Market Preferred Shares ("AMPS"), as follows:
SERIES A SHARES SERIES B SHARES
CALIFORNIA 1,500 1,500
INTERMEDIATE 4,000 4,000
NEW YORK 1,500 1,500
On December 13, 2002, the Funds issued several series of AMPS, as
follows:
SERIES A SHARES SERIES B SHARES
CALIFORNIA 1,180 1,180
INTERMEDIATE 3,588 3,588
NEW YORK 965 965
All shares of each series of AMPS have a liquidation preference of
$25,000 per share plus any accumulated unpaid dividends, whether or
not earned or declared by the Fund, but excluding interest thereon
("Liquidation Value"). Dividends to AMPS shareholders, which are
cumulative, are accrued daily. It is the policy of each Fund to pay
dividends every 7 days for each Fund's AMPS Series A and every 28 days
for each Fund's AMPS Series B, unless in a special rate period.
In the absence of a special rate period, dividend rates are reset
every 7 days for each Fund's AMPS Series A, based on the results of an
auction. Each Fund has approved a special rate period for its AMPS
Series A of 728 days for California and New York and 546 days for
Intermediate. The effective dates and dividend rates for each Fund are
as follows:
EFFECTIVE DATE DIVIDEND RATE
CALIFORNIA October 23, 2003 1.70%
INTERMEDIATE October 24, 2003 1.65%
NEW YORK October 22, 2003 1.70%
In the absence of a special rate period, dividend rates are reset
every 28 days for each Fund's AMPS Series B, based on the results of
an auction. Each Fund has approved a special rate period for its AMPS
Series B of 546 days for California and Intermediate and 553 days for
New York. The effective dates and dividend rates for each Fund are as
follows:
EFFECTIVE DATE DIVIDEND RATE
CALIFORNIA March 11, 2004 1.170%
INTERMEDIATE March 15, 2004 1.185%
NEW YORK March 9, 2004 1.198%
The Funds declared dividends to AMPS shareholders for the period
November 1, 2004 to November 30, 2004, for each series of the AMPS as
follows:
SERIES A SHARES SERIES B SHARES
CALIFORNIA $ 41,796 $ 28,768
INTERMEDIATE 123,355 88,588
NEW YORK 34,180 24,086
32
The Funds may redeem shares of each series of AMPS, in whole or in
part, on the second business day preceding any dividend payment date
at Liquidation Value.
The Funds are also subject to certain restrictions relating to the
AMPS. Failure to comply with these restrictions could preclude the
Funds from declaring any distributions to common shareholders or
repurchasing common shares and/or could trigger the mandatory
redemption of AMPS at Liquidation Value.
The holders of AMPS are entitled to one vote per share and will vote
with holders of common stock as a single class, except that the AMPS
will vote separately as a class on certain matters, as required by law
or the Funds' charter. The holders of a Fund's AMPS, voting as a
separate class, are entitled at all times to elect two Directors of
the Fund, and to elect a majority of the Directors of a Fund if the
Fund failed to pay dividends on AMPS for two consecutive years.
8 ORGANIZATION EXPENSES AND OFFERING COSTS: Management has agreed to pay
all organizational expenses and the amount by which each Fund's
offering costs for common stock (other than sales load) exceed $0.03
per share. The costs incurred by management were $261,029, $276,501,
and $289,752 for California, Intermediate and New York, respectively.
Offering costs for common stock paid by each Fund were charged as a
reduction of common stock paid-in-capital at the completion of each
Fund's offerings and amounted to $203,759, $620,459, and $167,159 for
California, Intermediate, and New York, respectively.
Additionally, offering costs of $154,612, $337,770, and $143,704 and
sales loads of $590,000, $1,794,000, and $482,500 for AMPS for
California, Intermediate, and New York, respectively, were charged as
a reduction of common stock paid-in capital for each Fund's AMPS
offering.
9 CONCENTRATION OF RISK: The ability of the issuers of the debt
securities held by the Funds to meet their obligations may be affected
by economic developments, including those particular to a specific
industry or region. The investment policies of California and New York
involve investing substantially all of their assets in municipal bonds
of issuers located in the state of California and the state of New
York, respectively. This policy makes those Funds more susceptible to
adverse economic, political, regulatory or other factors affecting the
issuers of such municipal bonds than a fund that does not limit its
investments to such issuers.
10 INDEMNIFICATIONS: Like many other companies, the Funds' organizational
documents provide that their officers and directors are indemnified
against certain liabilities arising out of the performance of their
duties to the Funds. In addition, both in some of their principal
service contracts and in the normal course of their business, the
Funds enter into contracts that provide indemnifications to other
parties for certain types of losses or liabilities. Each Fund's
maximum exposure under these arrangements is unknown as this could
involve future claims against each Fund.
NOTE B--MANAGEMENT FEES, ADMINISTRATION FEES, AND OTHER TRANSACTIONS
WITH AFFILIATES:
Each Fund retains Management as its investment manager under a
Management Agreement. For such investment management services, each
Fund pays Management a fee at the annual rate of 0.25% of its
33
average daily Managed Assets. Managed Assets equal the total assets of
the Fund, less liabilities other than the aggregate indebtedness
entered into for purposes of leverage. For purposes of calculating
Managed Assets, the Liquidation Value of any AMPS outstanding is not
considered a liability.
Management has contractually agreed to waive a portion of the
management fees it is entitled to receive from each Fund at the
following annual rates:
YEAR ENDED % OF AVERAGE
OCTOBER 31, DAILY MANAGED ASSETS
--------------------------------------------------------------------
2004 - 2007 0.25%
2008 0.20
2009 0.15
2010 0.10
2011 0.05
Management has not agreed to waive any portion of its fees beyond
October 31, 2011.
For the year ended October 31, 2004, such waived fees amounted to
$396,184, $1,212,644, and $324,473 for California, Intermediate, and
New York, respectively.
Each Fund retains Management as its administrator under an
Administration Agreement. Each Fund pays Management an administration
fee at the annual rate of 0.30% of its average daily Managed Assets
under this agreement. Additionally, Management retains State Street
Bank and Trust Company ("State Street") as its sub-administrator under
a Sub-Administration Agreement. Management pays State Street a fee for
all services received under the agreement.
On October 31, 2003, Management and Neuberger Berman, LLC
("Neuberger"), a member firm of the New York Stock Exchange and
sub-adviser to each Fund, became indirect wholly-owned subsidiaries of
Lehman Brothers Holdings Inc., a publicly-owned holding company.
Neuberger is retained by Management to furnish it with investment
recommendations and research information without added cost to each
Fund. Several individuals who are officers and/or Directors of each
Fund are also employees of Neuberger and/or Management.
Each Fund has an expense offset arrangement in connection with its
custodian contract. The impact of this arrangement, reflected in the
Statements of Operations under the caption Custodian fees, was a
reduction of $498, $610, and $524 for California, Intermediate, and
New York, respectively.
In connection with the settlement of each AMPS auction, each Fund
pays, through the auction agent, a service fee to each participating
broker-dealer based upon the aggregate liquidation preference of the
AMPS held by the broker-dealer's customers. For any auction preceding
a rate period of less than one year, the service fee is paid at the
annual rate of 1/4 of 1%; for any auction preceding a rate period of
one year or more, the service fee is paid at a rate agreed to by each
Fund and the broker-dealer.
34
Each Fund has paid Merrill Lynch a fee equal to 1/8 of 1% in
connection with entering the special rate periods in return for which
Merrill Lynch had agreed to pay dividends on the AMPS that, as a
result of the auction, exceed a specified rate.
In order to satisfy rating agencies' requirements, each Fund is
required to provide each rating agency a report on a monthly basis
verifying that each Fund is maintaining eligible assets having a
discounted value equal to or greater than the Preferred Shares Basic
Maintenance Amount, which is a minimum level set by each rating agency
as one of the conditions to maintain the AAA rating on the AMPS.
'Discounted value' refers to the fact that the rating agencies require
the Fund, in performing this calculation, to discount portfolio
securities below their face value, at a rate depending on their
rating. Each Fund pays a fee to State Street, as Fund
sub-administrator, for the preparation of this report.
NOTE C--SECURITIES TRANSACTIONS:
During the year ended October 31, 2004, there were purchase and sale
transactions (excluding short-term securities) as follows:
(000'S OMITTED) PURCHASES SALES
CALIFORNIA $ 5,187 $ 5,277
INTERMEDIATE 16,576 14,755
NEW YORK 6,291 5,799
NOTE D--CAPITAL:
At October 31, 2004, the common shares outstanding and the common
shares of each Fund owned by Neuberger were as follows:
COMMON SHARES COMMON SHARES
OUTSTANDING OWNED BY NEUBERGER
CALIFORNIA 6,791,981 6,981
INTERMEDIATE 20,705,124 6,981
NEW YORK 5,574,550 6,981
Transactions in common shares for the years ended October 31, 2004 and
October 31, 2003, were as follows:
COMMON SHARES ISSUED IN CONNECTION WITH:
UNDERWRITERS' EXERCISE REINVESTMENT OF
OF OVER-ALLOTMENT DIVIDENDS AND NET INCREASE IN COMMON
OPTION DISTRIBUTIONS SHARES OUTSTANDING
2004 2003 2004 2003 2004 2003
CALIFORNIA -- 185,000 -- -- -- 185,000
INTERMEDIATE -- 175,000 -- 23,143 -- 198,143
NEW YORK -- 215,000 -- 2,569 -- 217,569
35
FINANCIAL HIGHLIGHTS California Intermediate Municipal Fund
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements.
PERIOD FROM
SEPTEMBER 27, 2002^
YEAR ENDED OCTOBER 31, TO OCTOBER 31,
------------------------- -------------------
2004 2003 2002
COMMON SHARE NET ASSET VALUE, BEGINNING OF PERIOD $ 14.36 $ 14.31 $ 14.32
---------- ---------- -------------------
INCOME FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS:
NET INVESTMENT INCOME (LOSS) .91 .85 .02
NET GAINS OR LOSSES ON SECURITIES
(BOTH REALIZED AND UNREALIZED) .67 .14 --
COMMON SHARE EQUIVALENT OF DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM:
NET INVESTMENT INCOME (.13) (.08) --
---------- ---------- -------------------
TOTAL FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS 1.45 .91 .02
---------- ---------- -------------------
LESS DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
NET INVESTMENT INCOME (.75) (.75) --
---------- ---------- -------------------
LESS CAPITAL CHARGES:
ISSUANCE OF COMMON SHARES -- -- (.03)
ISSUANCE OF PREFERRED SHARES -- (.11) --
---------- ---------- -------------------
TOTAL CAPITAL CHARGES -- (.11) (.03)
---------- ---------- -------------------
COMMON SHARE NET ASSET VALUE, END OF PERIOD $ 15.06 $ 14.36 $ 14.31
---------- ---------- -------------------
COMMON SHARE MARKET VALUE, END OF PERIOD $ 13.47 $ 13.00 $ 15.00
---------- ---------- -------------------
TOTAL RETURN, COMMON SHARE NET ASSET VALUE+ +10.97% +6.02% -0.10%**
TOTAL RETURN, COMMON SHARE MARKET VALUE+ +9.63% -8.44% +0.00%**
RATIOS/SUPPLEMENTAL DATA++
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS, END OF PERIOD (IN MILLIONS) $ 102.3 $ 97.5 $ 94.5
PREFERRED STOCK, AT LIQUIDATION VALUE ($25,000
PER SHARE LIQUIDATION PREFERENCE) (IN MILLIONS) $ 59.0 $ 59.0 $ --
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS# .96% .88% .84%*
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS++ .96% .88% .83%*
RATIO OF NET INVESTMENT INCOME (LOSS) EXCLUDING PREFERRED
STOCK DIVIDENDS TO AVERAGE NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS 6.24% 5.88% 1.10%*
RATIO OF PREFERRED STOCK DIVIDENDS TO AVERAGE
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS .86% .56% --%
RATIO OF NET INVESTMENT INCOME (LOSS) INCLUDING PREFERRED
STOCK DIVIDENDS TO AVERAGE NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS 5.38% 5.32% 1.10%*
PORTFOLIO TURNOVER RATE 3% 9% 0%
ASSET COVERAGE PER SHARE OF PREFERRED STOCK, END OF PERIOD@ $ 68,383 $ 66,332 $ --
See Notes to Financial Highlights
36
NEUBERGER BERMAN OCTOBER 31, 2004
FINANCIAL HIGHLIGHTS Intermediate Municipal Fund
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements.
PERIOD FROM
SEPTEMBER 27, 2002^
YEAR ENDED OCTOBER 31, TO OCTOBER 31,
------------------------- -------------------
2004 2003 2002
COMMON SHARE NET ASSET VALUE, BEGINNING OF PERIOD $ 14.44 $ 14.30 $ 14.32
---------- ---------- -------------------
INCOME FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS:
NET INVESTMENT INCOME (LOSS) .94 .88 .01
NET GAINS OR LOSSES ON SECURITIES
(BOTH REALIZED AND UNREALIZED) .65 .25 --
COMMON SHARE EQUIVALENT OF DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM:
NET INVESTMENT INCOME (.12) (.09) --
---------- ---------- -------------------
TOTAL FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS 1.47 1.04 .01
---------- ---------- -------------------
LESS DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
NET INVESTMENT INCOME (.80) (.80) --
---------- ---------- -------------------
LESS CAPITAL CHARGES:
ISSUANCE OF COMMON SHARES -- -- (.03)
ISSUANCE OF PREFERRED SHARES -- (.10) --
---------- ---------- -------------------
TOTAL CAPITAL CHARGES -- (.10) (.03)
---------- ---------- -------------------
COMMON SHARE NET ASSET VALUE, END OF PERIOD $ 15.11 $ 14.44 $ 14.30
---------- ---------- -------------------
COMMON SHARE MARKET VALUE, END OF PERIOD $ 13.70 $ 13.33 $ 15.00
---------- ---------- -------------------
TOTAL RETURN, COMMON SHARE NET ASSET VALUE+ +10.91% +6.88% -0.17%**
TOTAL RETURN, COMMON SHARE MARKET VALUE+ +8.94% -5.94% +0.00%**
RATIOS/SUPPLEMENTAL DATA++
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS, END OF PERIOD (IN MILLIONS) $ 312.8 $ 299.1 $ 293.3
PREFERRED STOCK, AT LIQUIDATION VALUE ($25,000
PER SHARE LIQUIDATION PREFERENCE) (IN MILLIONS) $ 179.4 $ 179.4 $ --
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS# .82% .74% .51%*
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS++ .82% .74% .51%*
RATIO OF NET INVESTMENT INCOME (LOSS) EXCLUDING PREFERRED
STOCK DIVIDENDS TO AVERAGE NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS 6.40% 6.08% 1.62%*
RATIO OF PREFERRED STOCK DIVIDENDS TO AVERAGE
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS .85% .59% --%
RATIO OF NET INVESTMENT INCOME (LOSS) INCLUDING PREFERRED
STOCK DIVIDENDS TO AVERAGE NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS 5.55% 5.49% 1.62%*
PORTFOLIO TURNOVER RATE 3% 10% 0%
ASSET COVERAGE PER SHARE OF PREFERRED STOCK, END OF PERIOD@ $ 68,622 $ 66,694 $ --
See Notes to Financial Highlights
37
FINANCIAL HIGHLIGHTS New York Intermediate Municipal Fund
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the Financial
Statements.
PERIOD FROM
SEPTEMBER 27, 2002^
YEAR ENDED OCTOBER 31, TO OCTOBER 31,
------------------------- -------------------
2004 2003 2002
COMMON SHARE NET ASSET VALUE, BEGINNING OF PERIOD $ 14.40 $ 14.32 $ 14.32
INCOME FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS:
NET INVESTMENT INCOME (LOSS) .93 .86 .03
NET GAINS OR LOSSES ON SECURITIES
(BOTH REALIZED AND UNREALIZED) .48 .19 --
COMMON SHARE EQUIVALENT OF DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM:
NET INVESTMENT INCOME (.13) (.08) --
TOTAL FROM INVESTMENT OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS 1.28 .97 .03
LESS DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
NET INVESTMENT INCOME (.78) (.78) --
LESS CAPITAL CHARGES:
ISSUANCE OF COMMON SHARES -- -- (.03)
ISSUANCE OF PREFERRED SHARES -- (.11) --
TOTAL CAPITAL CHARGES -- (.11) (.03)
COMMON SHARE NET ASSET VALUE, END OF PERIOD $ 14.90 $ 14.40 $ 14.32
COMMON SHARE MARKET VALUE, END OF PERIOD $ 13.32 $ 13.27 $ 15.00
TOTAL RETURN, COMMON SHARE NET ASSET VALUE+ +9.67% +6.36% -0.03%**
TOTAL RETURN, COMMON SHARE MARKET VALUE+ +6.39% -6.43% +0.00%**
RATIOS/SUPPLEMENTAL DATA++
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS, END OF PERIOD (IN MILLIONS) $ 83.1 $ 80.3 $ 76.7
PREFERRED STOCK, AT LIQUIDATION VALUE ($25,000
PER SHARE LIQUIDATION PREFERENCE) (IN MILLIONS) $ 48.3 $ 48.3 $ --
RATIO OF GROSS EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS# 1.00% .92% .94%*
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS++ .99% .92% .93%*
RATIO OF NET INVESTMENT INCOME (LOSS) EXCLUDING PREFERRED
STOCK DIVIDENDS TO AVERAGE NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS 6.37% 6.02% 1.22%*
RATIO OF PREFERRED STOCK DIVIDENDS TO AVERAGE
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS .86% .57% --%
RATIO OF NET INVESTMENT INCOME (LOSS) INCLUDING PREFERRED
STOCK DIVIDENDS TO AVERAGE NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS 5.51% 5.45% 1.22%*
PORTFOLIO TURNOVER RATE 5% 11% 0%
ASSET COVERAGE PER SHARE OF PREFERRED STOCK, END OF PERIOD@ $ 68,073 $ 66,617 $ --
See Notes to Financial Highlights
38
NOTES TO FINANCIAL HIGHLIGHTS Intermediate Municipal Closed-End Funds
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of each Fund during each
fiscal period. Total return based on per share market value assumes the
purchase of common shares at the market price on the first day and sales of
common shares at the market price on the last day of the period indicated.
Dividends and distributions, if any, are assumed to be reinvested at prices
obtained under each Fund's dividend reinvestment plan. Results represent
past performance and do not guarantee future results. Current returns may
be lower or higher than the performance data quoted. For each Fund, total
return would have been lower if Management had not waived the investment
management fee. Performance data current to the most recent month-end are
available at www.nb.com.
# The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset
arrangements.
++ After waiver of investment management fee. Had Management not undertaken
such action, the annualized ratios of net expenses to average daily net
assets applicable to common shareholders would have been:
PERIOD ENDED
YEAR ENDED OCTOBER 31, OCTOBER 31,
2004 2003 2002(1)
CALIFORNIA 1.35% 1.26% 1.08%
INTERMEDIATE 1.22% 1.13% .76%
NEW YORK 1.39% 1.31% 1.18%
(1) Period from September 27, 2002 to October 31, 2002.
^ The date investment operations commenced.
* Annualized.
** Not annualized.
@ Calculated by subtracting the Fund's total liabilities (excluding
accumulated unpaid dividends on AMPS) from the Fund's total assets and
dividing by the number of AMPS outstanding.
++ Expense ratios do not include the effect of dividend payments to holders of
AMPS. Income ratios include income earned on assets attributable to AMPS
outstanding.
39
REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Neuberger Berman California Intermediate Municipal Fund Inc.
Neuberger Berman Intermediate Municipal Fund Inc.
Neuberger Berman New York Intermediate Municipal Fund Inc.
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Neuberger Berman California Intermediate
Municipal Fund Inc., Neuberger Berman Intermediate Municipal Fund Inc., and
Neuberger Berman New York Intermediate Municipal Fund Inc. (the "Funds") as of
October 31, 2004, the related statements of operations for the year then ended,
the statements of changes in net assets for each of the two years in the period
ended October 31, 2004 and financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and financial highlights. Our procedures
included confirmation of securities owned as of October 31, 2004, by
correspondence with the custodian and brokers or other appropriate auditing
procedures where replies from brokers were not received. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of Neuberger Berman California Intermediate Municipal Fund Inc., Neuberger
Berman Intermediate Municipal Fund Inc., and Neuberger Berman New York
Intermediate Municipal Fund Inc. at October 31, 2004, the results of their
operations for the year then ended, the changes in their net assets for each of
the two years in the period ended October 31, 2004, and their financial
highlights for each of the periods indicated therein, in conformity with U.S.
generally accepted accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
December 3, 2004
40
DIVIDEND REINVESTMENT PLAN (Unaudited)
The Bank of New York ("Plan Agent") will act as Plan Agent for shareholders who
have not elected in writing to receive dividends and distributions in cash (each
a "Participant"), will open an account for each Participant under the Dividend
Reinvestment Plan ("Plan") in the same name as their then current Shares are
registered, and will put the Plan into effect for each Participant as of the
first record date for a dividend or capital gains distribution.
Whenever the Fund declares a dividend or distribution with respect to the common
stock of the Fund ("Shares"), each Participant will receive such dividends and
distributions in additional Shares, including fractional Shares acquired by the
Plan Agent and credited to each Participant's account. If on the payment date
for a cash dividend or distribution, the net asset value is equal to or less
than the market price per Share plus estimated brokerage commissions, the Plan
Agent shall automatically receive such Shares, including fractions, for each
Participant's account. Except in the circumstances described in the next
paragraph, the number of additional Shares to be credited to each Participant's
account shall be determined by dividing the dollar amount of the dividend or
distribution payable on their Shares by the greater of the net asset value per
Share determined as of the date of purchase or 95% of the then current market
price per Share on the payment date.
Should the net asset value per Share exceed the market price per Share plus
estimated brokerage commissions on the payment date for a cash dividend or
distribution, the Plan Agent or a broker-dealer selected by the Plan Agent shall
endeavor, for a purchase period lasting until the last business day before the
next date on which the Shares trade on an "ex-dividend" basis, but in no event,
except as provided below, more than 30 days after the dividend payment date, to
apply the amount of such dividend or distribution on each Participant's Shares
(less their PRO RATA share of brokerage commissions incurred with respect to the
Plan Agent's open-market purchases in connection with the reinvestment of such
dividend or distribution) to purchase Shares on the open market for each
Participant's account. No such purchases may be made more than 30 days after the
payment date for such dividend except where temporary curtailment or suspension
of purchase is necessary to comply with applicable provisions of federal
securities laws. If, at the close of business on any day during the purchase
period the net asset value per Share equals or is less than the market price per
Share plus estimated brokerage commissions, the Plan Agent will not make any
further open-market purchases in connection with the reinvestment of such
dividend or distribution. If the Plan Agent is unable to invest the full
dividend or distribution amount through open-market purchases during the
purchase period, the Plan Agent shall request that, with respect to the
uninvested portion of such dividend or distribution amount, the Fund issue new
Shares at the close of business on the earlier of the last day of the purchase
period or the first day during the purchase period on which the net asset value
per Share equals or is less than the market price per Share, plus estimated
brokerage commissions, such Shares to be issued in accordance with the terms
specified in the third paragraph hereof. These newly issued Shares will be
valued at the then-current market price per Share at the time such Shares are to
be issued.
For purposes of making the dividend reinvestment purchase comparison under the
Plan, (a) the market price of the Shares on a particular date shall be the last
sales price on the New York Stock Exchange (or if the Shares are not listed on
the New York Stock Exchange, such other exchange on which the Shares are
principally traded) on that date, or, if there is no sale on such Exchange (or
if not so listed, in the over-the-counter market) on that date, then the mean
between the closing bid and asked quotations for such Shares on such Exchange on
such date and (b) the net asset value per Share on a particular date shall be
the net asset value per Share most recently calculated by or on behalf of the
Fund. All dividends, distributions and other payments (whether made in cash or
Shares) shall be made net of any applicable withholding tax.
Open-market purchases provided for above may be made on any securities exchange
where the Fund's Shares are traded, in the over-the-counter market or in
negotiated transactions and may be on such terms as to price, delivery and
otherwise as the Plan Agent shall determine. Each Participant's uninvested funds
held by the Plan Agent will not bear interest, and it is understood that, in any
event, the Plan Agent shall have no liability in connection with any inability
to purchase Shares within 30 days after the initial date of such purchase as
herein provided, or with the timing of any purchases effected. The Plan Agent
shall have no responsibility as to the value of the Shares acquired for each
Participant's account. For the purpose of cash investments, the Plan Agent may
commingle each Participant's funds with those of other shareholders of the Fund
for whom the Plan Agent similarly acts as agent, and the average price
(including brokerage commissions) of all Shares purchased by the Plan Agent as
Plan Agent shall be the price per Share allocable to each Participant in
connection therewith.
The Plan Agent may hold each Participant's Shares acquired pursuant to the Plan
together with the Shares of other shareholders of the Fund acquired pursuant to
the Plan in noncertificated form in the Plan Agent's name or that of the Plan
Agent's nominee. The Plan Agent will forward to each Participant any proxy
solicitation material and will vote any Shares so held for each Participant only
in accordance with the instructions set forth on proxies returned by the
participant to the Fund.
41
The Plan Agent will confirm to each Participant each acquisition made for their
account as soon as practicable but not later than 60 days after the date
thereof. Although each Participant may from time to time have an undivided
fractional interest (computed to three decimal places) in a Share, no
certificates for a fractional Share will be issued. However, dividends and
distributions on fractional Shares will be credited to each Participant's
account. In the event of termination of a Participant's account under the Plan,
the Plan Agent will adjust for any such undivided fractional interest in cash at
the market value of the Shares at the time of termination, less the PRO RATA
expense of any sale required to make such an adjustment.
Any Share dividends or split Shares distributed by the Fund on Shares held by
the Plan Agent for Participants will be credited to their accounts. In the event
that the Fund makes available to its shareholders rights to purchase additional
Shares or other securities, the Shares held for each Participant under the Plan
will be added to other Shares held by the Participant in calculating the number
of rights to be issued to each Participant.
The Plan Agent's service fee for handling capital gains distributions or income
dividends will be paid by the Fund. Participants will be charged their PRO RATA
share of brokerage commissions on all open-market purchases.
Each Participant may terminate their account under the Plan by notifying the
Plan Agent in writing. Such termination will be effective immediately if the
Participant's notice is received by the Plan Agent not less than ten days prior
to any dividend or distribution record date, otherwise such termination will be
effective the first trading day after the payment date for such dividend or
distribution with respect to any subsequent dividend or distribution. The Plan
may be terminated by the Plan Agent or the Fund upon notice in writing mailed to
each Participant at least 30 days prior to any record date for the payment of
any dividend or distribution by the Fund.
These terms and conditions may be amended or supplemented by the Plan Agent or
the Fund at any time or times but, except when necessary or appropriate to
comply with applicable law or the rules or policies of the Securities and
Exchange Commission or any other regulatory authority, only by mailing to each
Participant appropriate written notice at least 30 days prior to the effective
date thereof. The amendment or supplement shall be deemed to be accepted by each
Participant unless, prior to the effective date thereof, the Plan Agent receives
written notice of the termination of their account under the Plan. Any such
amendment may include an appointment by the Plan Agent in its place and stead of
a successor Plan Agent under these terms and conditions, with full power and
authority to perform all or any of the acts to be performed by the Plan Agent
under these terms and conditions. Upon any such appointment of any Plan Agent
for the purpose of receiving dividends and distributions, the Fund will be
authorized to pay to such successor Plan Agent, for each Participant's account,
all dividends and distributions payable on Shares held in their name or under
the Plan for retention or application by such successor Plan Agent as provided
in these terms and conditions.
The Plan Agent shall at all times act in good faith and agrees to use its best
efforts within reasonable limits to ensure the accuracy of all services
performed under this Agreement and to comply with applicable law, but assumes no
responsibility and shall not be liable for loss or damage due to errors unless
such error is caused by the Plan Agent's negligence, bad faith, or willful
misconduct or that of its employees.
These terms and conditions shall be governed by the laws of the State of
Maryland.
42
NEUBERGER BERMAN OCTOBER 31, 2003
DIRECTORY
INVESTMENT MANAGER AND ADMINISTRATOR
Neuberger Berman Management Inc.
605 Third Avenue 2nd Floor
New York, NY 10158-0180
877.461.1899 or 212.476.8800
SUB-ADVISER
Neuberger Berman, LLC
605 Third Avenue
New York, NY 10158-3698
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
STOCK TRANSFER AGENT
Bank of New York
101 Barclay Street, 11-E
New York, NY 10286
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, NW
2nd Floor
Washington, DC 20036-1221
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
43
DIRECTORS AND OFFICERS (Unaudited)
The following tables set forth information concerning the directors and officers
of the Funds. All persons named as directors and officers also serve in similar
capacities for other funds administered or managed by NB Management and
Neuberger Berman, LLC. The Statement of Additional Information for each Fund
includes additional information about fund directors and is available upon
request, without charge, by calling (877) 461-1899.
THE BOARD OF DIRECTORS
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, AGE, AND ADDRESS (1) OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE
AND POSITION WITH FUND PRINCIPAL OCCUPATION(S) (2) DIRECTOR FUND COMPLEX BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
CLASS I
INDEPENDENT FUND DIRECTORS*
Faith Colish (69) Counsel, Carter Ledyard & Milburn LLP (law 41 Director, American Bar
Director firm) since October 2002; formerly, Retirement Association (ABRA)
Attorney-at-Law and President, Faith Colish, A since 1997 (not-for- profit
Professional Corporation, 1980 to 2002. membership association).
C. Anne Harvey (67) Consultant, C. A. Harvey Associates, since June 41 President, Board of Associates
Director 2001; formerly, Director, AARP, 1978 to to The National Rehabilitation
December 2001. Hospital's Board of Directors
since 2002; formerly, Member,
Individual Investors Advisory
Committee to the New York Stock
Exchange Board of Directors,
1998 to June 2002; formerly,
Member, American Savings
Education Council's Policy Board
(ASEC), 1998-2000; formerly,
Member, Executive Committee,
Crime Prevention Coalition of
America, 1997-2000.
Cornelius T. Ryan (72) Founding General Partner, Oxford Partners and 41 Director, Capital Cash
Director Oxford Bioscience Partners (venture capital Management Trust (money market
partnerships) and President, Oxford Venture fund), Naragansett Insured
Corporation. Tax-Free Income Fund, Rocky
Mountain Equity Fund, Prime Cash
Fund, several private companies
and QuadraMed Corporation
(NASDAQ).
Peter P. Trapp (59) Regional Manager for Atlanta Region, Ford Motor 41 None.
Director Credit Company since August 1997; formerly,
President, Ford Life Insurance Company, April
1995 until August 1997.
44
NEUBERGER BERMAN OCTOBER 31, 2004
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, AGE, AND ADDRESS (1) OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE
AND POSITION WITH FUND PRINCIPAL OCCUPATION(S) (2) DIRECTOR FUND COMPLEX BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
DIRECTOR WHO IS AN "INTERESTED PERSON"
Peter E. Sundman* (45) Executive Vice President, Neuberger Berman Inc. 41 Director and Vice President,
Chief Executive Officer, (holding company) since 1999; Head of Neuberger Neuberger & Berman Agency, Inc.
Director and Chairman of the Berman Inc.'s Mutual Funds and Institutional since 2000; formerly, Director,
Board Business since 1999; President and Director, NB Neuberger Berman Inc. (holding
Management since 1999; Executive Vice company) from October 1999
President, Neuberger Berman since 1999; through March 2003.
formerly, Principal, Neuberger Berman from 1997
until 1999; formerly, Senior Vice President, NB
Management from 1996 until 1999.
CLASS II
INDEPENDENT FUND DIRECTORS*
John Cannon (74) Consultant. Formerly, Chairman, CDC Investment 41 Independent Trustee or Director
Director Advisers (registered investment adviser), of three series of
1993-January 1999; formerly, President and OppenheimerFunds: Limited Term
Chief Executive Officer, AMA Investment New York Municipal Fund,
Advisors, an affiliate of the American Medical Rochester Fund Municipals, and
Association. Oppenheimer Convertible
Securities Fund, since 1992.
Barry Hirsch (71) Attorney-at-Law. Formerly, Senior Counsel, 41 None.
Director Loews Corporation (diversified financial
corporation) May 2002 until April 2003;
formerly, Senior Vice President, Secretary and
General Counsel, Loews Corporation.
45
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, AGE, AND ADDRESS (1) OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE
AND POSITION WITH FUND PRINCIPAL OCCUPATION(S) (2) DIRECTOR FUND COMPLEX BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
Tom Decker Seip (54) General Partner, Seip Investments LP (a private 41 Director, H&R Block, Inc.
Director investment partnership); formerly, President (financial services company)
and CEO, Westaff, Inc. (temporary staffing), since May 2001; Director,
May 2001 to January 2002; Senior Executive at Forward Management, Inc. (asset
the Charles Schwab Corporation from 1983 to management) since 2001;
1999, including Chief Executive Officer, formerly, Director, General
Charles Schwab Investment Management, Inc. and Magic (voice recognition
Trustee, Schwab Family of Funds and Schwab software) 2001 until 2002;
Investments from 1997 to 1998 and Executive formerly, Director, E-Finance
Vice President-Retail Brokerage, Charles Schwab Corporation (credit decisioning
Investment Management from 1994 to 1997. services) 1999-2003; formerly,
Director, Save-Daily.com (micro
investing services) 1999-2003;
Director, Offroad Capital Inc.
(pre-public internet commerce
company).
DIRECTOR WHO IS AN "INTERESTED PERSON"
Jack L. Rivkin* (64)
President and Director
Executive Vice President and Chief Investment 41 Director, Dale Carnegie and
Officer, Neuberger Berman Inc. (holding Associates, Inc. (private
company) since 2002 and 2003, respectively; company) since 1998; Director,
Executive Vice President and Chief Investment Emagin Corp. (public company)
Officer, Neuberger Berman since 2002 and 2003, since 1997; Director, Solbright,
respectively; Director and Chairman, NB Inc. (private company) since
Management since December 2002; formerly, 1998; Director, Infogate, Inc.
Executive Vice President, Citigroup (private company) since 1997;
Investments, Inc. from September 1995 to Director, Broadway Television
February 2002; formerly, Executive Vice Network (private company) since
President, Citigroup Inc. from September 1995 2000.
to February 2002.
CLASS III
INDEPENDENT FUND DIRECTORS*
Walter G. Ehlers (71) Consultant; Retired President and Trustee, 41 None.
Director Teachers Insurance & Annuity (TIAA) and College
Retirement Equities Fund (CREF).
46
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, AGE, AND ADDRESS (1) OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE
AND POSITION WITH FUND PRINCIPAL OCCUPATION(S) (2) DIRECTOR FUND COMPLEX BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
Robert A. Kavesh (77) Marcus Nadler Professor Emeritus of Finance and 41 Director, DEL Laboratories, Inc.
Director Economics, New York University Stern School of (cosmetics and pharmaceuticals)
Business. since 1978; Director, The Caring
Community (not-for-profit).
Howard A. Mileaf (67) Retired. Formerly, Vice President and Special 41 Director, WHX Corporation
Director Counsel, WHX Corporation (holding company) (holding company) since August
1993-2001. 2002; Director, Webfinancial
Corporation (holding company)
since December 2002; Director,
State Theatre of New Jersey
(not-for-profit theater) since
2000; formerly, Director, Kevlin
Corporation (manufacturer of
microwave and other products).
William E. Rulon (72) Retired. Formerly, Senior Vice President, 41 Director, Pro-Kids Golf and
Director Foodmaker, Inc. (operator and franchiser of Learning Academy (teach golf and
restaurants) until January 1997. computer usage to "at risk"
children) since 1998; formerly,
Director, Prandium, Inc.
(restaurants) from March 2001
until July 2002.
Candace L. Straight (57) Private investor and consultant specializing in 41 Director, The Proformance
Director the insurance industry; formerly, Advisory Insurance Company (personal
Director, Securitas Capital LLC (a global lines property and casualty
private equity investment firm dedicated to insurance company) since March
making investments in the insurance sector) 2004; Director, Providence
1998 until December 2002. Washington (property and
casualty insurance company)
since December 1998; Director,
Summit Global Partners
(insurance brokerage firm) since
October 2000.
47
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, AGE, AND ADDRESS (1) OVERSEEN BY OTHER DIRECTORSHIPS HELD OUTSIDE
AND POSITION WITH FUND PRINCIPAL OCCUPATION(S) (2) DIRECTOR FUND COMPLEX BY DIRECTOR
------------------------------------------------------------------------------------------------------------------------------------
DIRECTOR WHO IS AN "INTERESTED PERSON"
Edward I. O'Brien* (76) Formerly, Member, Investment Policy Committee, 41 Director, Legg Mason, Inc.
Director Edward Jones 1993-2001; President, Securities (financial services holding
Industry Association ("SIA") (securities company) since 1993; formerly,
industry's representative Director, Boston Financial Group
(real estate and tax shelters)
1993-1999.
* Indicates a director who is an "interested person" within the meaning of
the 1940 Act. Mr. Sundman and Mr. Rivkin are interested persons of the Fund
by virtue of the fact that each is an officer and/or director of NB
Management and Executive Vice President of Neuberger Berman. Mr. O'Brien is
an interested person of the Fund by virtue of the fact that he is a
director of Legg Mason, Inc., a wholly owned subsidiary of which, from time
to time, serves as a broker or dealer to the Fund and other funds or
accounts for which NB Management serves as investment manager.
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Except as otherwise indicated, each person has held the positions shown for
at least the last five years. The Board of Directors shall at all times be
divided as equally as possible into three classes of Directors designated
Class I, Class II, and Class III. The terms of office of Class I, Class II,
and Class III Directors shall expire at the annual meetings of stockholders
held in 2006, 2004, and 2005 respectively, and at each third annual meeting
of stockholders thereafter.
48
INFORMATION ABOUT THE OFFICERS OF THE FUND (OTHER THAN THOSE LISTED ABOVE)
POSITION AND
NAME, AGE, AND ADDRESS (1) LENGTH OF TIME SERVED (2) PRINCIPAL OCCUPATION(S)
-------------------------------------------------------------------------------------------------------------------
Claudia A. Brandon (48) Secretary since 2002 Vice President-Mutual Fund Board
Relations, NB Management since 2000;
Vice President, Neuberger Berman since
2002 and employee since 1999; formerly,
Vice President, NB Management from 1986
to 1999; Secretary, fourteen registered
investment companies for which NB
Management acts as investment manager
and administrator (four since 2002,
three since 2003, and four since 2004).
Robert Conti (48) Vice President since 2002 Senior Vice President, Neuberger Berman
since 2003; formerly, Vice President,
Neuberger Berman from 1999 until 2003;
Senior Vice President, NB Management
since 2000; formerly, Controller, NB
Management until 1996; formerly,
Treasurer, NB Management from 1996 until
1999; Vice President, fourteen
registered investment companies for
which NB Management acts as investment
manager and administrator (three since
2000, four since 2002, three since 2003,
and four since 2004).
Brian J. Gaffney (51) Vice President since 2002 Managing Director, Neuberger Berman
since 1999; Senior Vice President, NB
Management since 2000; formerly, Vice
President, NB Management from 1997 until
1999; Vice President, fourteen
registered investment companies for
which NB Management acts as investment
manager and administrator (three since
2000, four since 2002, three since 2003,
and four since 2004).
Sheila R. James (39) Assistant Secretary since 2002 Employee, Neuberger Berman since 1999;
Employee, NB Management from 1991 to
1999; Assistant Secretary, fourteen
registered investment companies for
which NB Management acts as investment
manager and administrator (seven since
2002, three since 2003, and four since
2004).
49
POSITION AND
NAME, AGE, AND ADDRESS (1) LENGTH OF TIME SERVED (2) PRINCIPAL OCCUPATION(S)
-------------------------------------------------------------------------------------------------------------------
Kevin Lyons (49) Assistant Secretary since 2003 Employee, Neuberger Berman since 1999;
Employee, NB Management from 1993 to
1999; Assistant Secretary, fourteen
registered investment companies for
which NB Management acts as investment
manager and administrator (ten since
2003 and four since 2004).
John M. McGovern (34) Assistant Treasurer since 2002 Vice President, Neuberger Berman since
January 2004; Employee, NB Management
since 1993; Assistant Treasurer,
fourteen registered investment companies
for which NB Management acts as
investment manager and administrator
(seven since 2002, three since 2003, and
four since 2004).
Barbara Muinos (45) Treasurer and Principal Financial and Vice President, Neuberger Berman since
Accounting Officer since 2002 1999; formerly, Assistant Vice
President, NB Management from 1993 to
1999; Treasurer and Principal Financial
and Accounting Officer, fourteen
registered investment companies for
which NB Management acts as investment
manager and administrator (seven since
2002, three since 2003, and four since
2004); formerly, Assistant Treasurer,
three registered investment companies
for which NB Management acts as
investment manager and administrator
from 1996 until 2002.
Frederic B. Soule (58) Vice President since 2002 Senior Vice President, Neuberger Berman
since 2003; formerly, Vice President,
Neuberger Berman from 1999 until 2003;
formerly, Vice President, NB Management
from 1995 until 1999; Vice President,
fourteen registered investment companies
for which NB Management acts as
investment manager and administrator
(three since 2000, four since 2002,
three since 2003, and four since 2004).
--------------
(1) The business address of each listed person is 605 Third Avenue, New York,
New York 10158.
(2) Except as otherwise indicated, each individual has held the positions shown
for at least the last five years.
50
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to portfolio securities is available, without charge,
by calling 1-800-877-9700 (toll-free) and on the website of the Securities and
Exchange Commission, at www.sec.gov. Beginning September 2004, information
regarding how the Funds voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30 will also be available without
charge, by calling 1-800-877-9700 (toll-free), on the website of the Securities
and Exchange Commission, at www.sec.gov, and on the Fund's website at www.nb.com
[http://www.nb.com].
QUARTERLY PORTFOLIO SCHEDULE
The Funds file a complete schedule of portfolio holdings for each Fund with the
Securities and Exchange Commission for the first and third quarters of each
fiscal year on Form N-Q. The Funds' Forms N-Q are available on the Securities
and Exchange Commission's website at www.sec.gov and may be reviewed and copied
at the Securities and Exchange Commission's Public Reference Room in Washington,
DC. Information on the operation of the Public Reference Room may be obtained by
calling 1-800-SEC-0330. The information on Form N-Q is available upon request,
with out charge, by calling (800) 877-9700.
CHANGES TO THE BYLAWS
On September 21, 2004, the Board adopted an amendment to the Bylaws of the Fund
stating that directors are elected by the vote of a majority of the outstanding
shares entitled to vote on the matter.
51
NOTES TO SHAREHOLDERS (Unaudited)
In January 2005 you will receive information to be used in filing your 2004 tax
returns, which will include a notice of the exact tax status of all dividends
paid to you by each Fund during calendar 2004. Please consult your own tax
advisor for details as to how this information should be reflected on your tax
returns.
52
[NEUBERGER BERMAN LOGO]
A LEHMAN BROTHERS COMPANY
NEUBERGER BERMAN MANAGEMENT INC.
605 Third Avenue 2nd Floor
New York, NY 10158-0180
INTERNAL SALES & SERVICES
800.877.9700
INSTITUTIONAL SERVICES
877.461.1899
www.nb.com
Statistics and projections in this report are derived from sources deemed to be
reliable but cannot be regarded as a representation of future results of the
Funds. This report is prepared for the general information of shareholders and
is not an offer of shares of the Funds.
[GRAPHIC] C0435 12/04
ITEM 2. CODE OF ETHICS
The Board of Directors ("Board") of Neuberger Berman 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"). For the period covered by this Form N-CSR, there were no amendments
to the Code of Ethics and there were no waivers from the Code of Ethics granted
to the Registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions.
A copy of the Code of Ethics was included as an exhibit to the Registrant's Form
N-CSR filed on January 9, 2004. The Code of Ethics is also available, without
charge, by calling 1-800-877-9700 (toll-free).
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board has determined that the Registrant has one audit committee financial
expert serving on its audit committee. The Registrant's audit committee
financial expert is John Cannon. Mr. Cannon is an independent director as
defined by Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Ernst & Young, LLP ("E&Y") serves as independent registered public accounting
firm to the Registrant.
(a) AUDIT FEES
----------
The aggregate fees billed for each of the last two fiscal years for professional
services rendered by E&Y for the audit of the annual financial statements or
services that are normally provided by E&Y in connection with statutory and
regulatory filings or engagements for those fiscal years were $31,250 and
$56,000 for 2004 and 2003, respectively.
(b) AUDIT-RELATED FEES
------------------
The aggregate fees billed to the Registrant in each of the last two fiscal years
for assurance and related services by E&Y that are reasonably related to the
performance of the audit of the Registrant's financial statements and are not
reported above in AUDIT FEES were $5,000 and $1,667 for 2004 and 2003,
respectively. The nature of the services provided involved agreed upon
procedures relating to the Preferred Shares. The Audit Committee approved 0% and
0% of these services provided by E&Y for 2004 and 2003, respectively, pursuant
to the waiver provisions of Rule 2-01(c)(7)(i)(C) of Regulation S-X.
The fees billed to other entities in the investment company complex for
assurance and related services by E&Y that are reasonably related to the
performance of the audit that the Audit Committee was required to approve
because the engagement related directly to the operations and financial
reporting of the Registrant were $0 and $0 for 2004 and 2003, respectively.
(c) TAX FEES
--------
The aggregate fees billed to the Registrant in each of the last two fiscal years
for professional services rendered by E&Y for tax compliance, tax advice, and
tax planning were $8,700 and $8,000 for 2004 and 2003, respectively. The nature
of the services provided was tax compliance, tax advice, and tax planning. The
Audit Committee approved 0% and 0% of these services provided by E&Y for 2004
and 2003, respectively, pursuant to the waiver provisions of Rule
2-01(c)(7)(i)(C) of Regulation S-X.
The fees billed to other entities in the investment company complex for tax
compliance, tax advice, and tax planning that the Audit Committee was required
to approve because the engagement related directly to the operations and
financial reporting of the Registrant were $0 and $0 for 2004 and 2003,
respectively.
(d) ALL OTHER FEES
--------------
The aggregate fees billed to the Registrant in each of the last two fiscal years
for products and services provided by E&Y, other than services reported in AUDIT
FEES, AUDIT-RELATED FEES, and TAX FEES were $0 and $0 for 2004 and 2003,
respectively.
The fees billed to other entities in the investment company complex for products
and services provided by E&Y, other than services reported in AUDIT FEES,
AUDIT-RELATED FEES, and TAX FEES that the Audit Committee was required to
approve because the engagement related directly to the operations and financial
reporting of the Registrant were $0 and $0 for 2004 and 2003, respectively.
(e) AUDIT COMMITTEE'S PRE-APPROVAL POLICIES AND PROCEDURES
------------------------------------------------------
(1) The Audit Committee's pre-approval policies and procedures for the
Registrant to engage an accountant to render audit and non-audit services
delegate to the Chair of the Committee the power to pre-approve services between
meetings of the Committee.
(2) None of the services described in paragraphs (b) through (d) above were
approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01
of Regulation S-X.
(f) HOURS ATTRIBUTED TO OTHER PERSONS
---------------------------------
Not applicable.
(g) NON-AUDIT FEES
--------------
Non-audit fees billed by E&Y for services rendered to the Registrant for each of
the last two fiscal years of the Registrant were $13,700 and $9,667 for 2004 and
2003, respectively.
Non-audit fees billed by E&Y for services rendered to the Registrant's
investment adviser and any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the Registrant for
each of the last two fiscal years of the Registrant were $256,050 and $233,037
for 2004 and 2003, respectively.
(h) The Audit Committee of the Board of Directors considered whether the
provision of non-audit services rendered to the Registrant's investment adviser
and any entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the Registrant that were not
pre-approved by the Audit Committee because the engagement did not relate
directly to the operations and financial reporting of the Registrant is
compatible with maintaining E&Y's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
The Board has established an Audit Committee to oversee particular aspects of
the Registrant's management. The Audit Committee's purposes are (a) to oversee
the accounting and financial reporting processes of the Registrant and their
internal controls and, as the Committee deems appropriate, to inquire into the
internal controls of certain service providers; (b) to oversee the quality and
objectivity of the Registrant's financial statements and the independent audit
thereof; (c) to oversee, or, as appropriate, assist Board oversight of, the
Registrant's compliance with legal and regulatory requirements that relate to
the Portfolios' accounting and financial reporting, internal controls and
independent audits; (d) to approve prior to appointment the engagement of the
Registrant's independent auditors and, in connection therewith, to review and
evaluate the qualifications, independence and performance of the Registrant's
independent auditors; and (e) to act as a liaison between the Registrant's
independent auditors and the full Board. The Audit Committee is composed
entirely of Independent Fund Directors; its members are John Cannon, Cornelius
T. Ryan (Chairman), Tom D. Seip, and Peter P. Trapp.
ITEM 6. SCHEDULE OF INVESTMENTS
The complete schedule of investments for each series is disclosed in the
Registrant's Annual Report, which is included as Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
The Board has delegated to Neuberger Berman, LLC ("Neuberger Berman") the
responsibility to vote proxies related to the securities held in the Fund's
portfolios. Under this authority, Neuberger Berman is required by the Board to
vote proxies related to portfolio securities in the best interests of the Fund
and its stockholders. The Board permits Neuberger Berman to contract with a
third party to obtain proxy voting and related services, including research of
current issues.
Neuberger Berman has implemented written Proxy Voting Policies and Procedures
("Proxy Voting Policy") that are designed to reasonably ensure that Neuberger
Berman votes proxies prudently and in the best interest of its advisory clients
for whom Neuberger Berman has voting authority, including the Fund. The Proxy
Voting Policy also describes how Neuberger Berman addresses any conflicts that
may arise between its interests and those of its clients with respect to proxy
voting.
Neuberger Berman's Proxy Committee is responsible for developing, authorizing,
implementing and updating the Proxy Voting Policy, overseeing the proxy voting
process and engaging and overseeing any independent third-party vendors as
voting delegate to review, monitor and/or vote proxies. In order to apply the
Proxy Voting Policy noted above in a timely and consistent manner, Neuberger
Berman utilizes Institutional Shareholder Services Inc. ("ISS") to vote proxies
in accordance with Neuberger Berman's voting guidelines.
Neuberger Berman's guidelines adopt the voting recommendations of ISS. Neuberger
Berman retains final authority and fiduciary responsibility for proxy voting.
Neuberger Berman believes that this process is reasonably designed to address
material conflicts of interest that may arise between Neuberger Berman and a
client as to how proxies are voted.
In the event that an investment professional at Neuberger Berman believes that
it is in the best interests of a client or clients to vote proxies in a manner
inconsistent with Neuberger Berman's proxy voting guidelines or in a manner
inconsistent with ISS recommendations, the Proxy Committee will review
information submitted by the investment professional to determine that there is
no material conflict of interest between Neuberger Berman and the client with
respect to the voting of the proxy in that manner.
If the Proxy Committee determines that the voting of a proxy as recommended by
the investment professional presents a material conflict of interest between
Neuberger Berman and the client or clients with respect to the voting of the
proxy, the Proxy Committee shall: (i) take no further action, in which case ISS
shall vote such proxy in accordance with the proxy voting guidelines or as ISS
recommends; (ii) disclose such conflict to the client or clients and obtain
written direction from the client as to how to vote the proxy; (iii) suggest
that the client or clients engage another party to determine how to vote the
proxy; or (iv) engage another independent third party to determine how to vote
the proxy.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
No reportable purchases for the period covered by this report.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no changes to the procedures by which shareholders may recommend
nominees to the Board.
ITEM 10. CONTROLS AND PROCEDURES
(a) Based on an evaluation of the disclosure controls and procedures (as
defined in rule 30a-3(c) under the Investment Company Act of 1940, as
amended (the "Act")) as of a date within 90 days of the filing date of
this document, the Chief Executive Officer and Treasurer and Principal
Financial and Accounting Officer of the Registrant have concluded that
such disclosure controls and procedures are effectively designed to ensure
that information required to be disclosed by the Registrant is accumulated
and communicated to the Registrant's management to allow timely decisions
regarding required disclosure.
(b) There were no significant changes in the Registrant's internal controls
over financial reporting (as defined in rule 30a-3(d) under the Act) that
occurred during the Registrant's last fiscal half-year that have
materially affected, or are reasonably likely to materially affect, the
Registrant's internal control over financial reporting.
ITEM 11. EXHIBITS
(a)(1) A copy of the Code of Ethics is incorporated by reference to
Registrant's Form N-CSR, Investment Company Act file number 811-21334
(filed January 9, 2004).
(a)(2) The certifications required by Rule 30a-2(a) of the Act and Section 302
of the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley Act") are attached
hereto.
(b) The certification required by Rule 30a-2(b) of the Act and Section 906
of the Sarbanes-Oxley Act is attached hereto.
The certifications provided pursuant to Section 906 of the Sarbanes-Oxley Act
are not deemed "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934 ("Exchange Act"), or otherwise subject to the liability of that section.
Such certifications will not be deemed to be incorporated by reference into any
filing under the Securities Act of 1933 or the Exchange Act, except to the
extent that the Registrant specifically incorporates them by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Neuberger Berman California Intermediate Municipal Fund Inc.
By: /s/ Peter E. Sundman
-----------------------
Peter E. Sundman
Chief Executive Officer
Date: January 7, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By: /s/ Peter E. Sundman
-----------------------
Peter E. Sundman
Chief Executive Officer
Date: January 7, 2005
By: /s/ Barbara Muinos
-----------------------
Barbara Muinos
Treasurer and Principal Financial
and Accounting Officer
Date: January 7, 2005