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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Neuberger Berman Income Opportunity Fund | AMEX:NOX | AMEX | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.00 | - |
President's Letter
|
1
|
PORTFOLIO COMMENTARY
|
2
|
SCHEDULE OF INVESTMENTS
|
6
|
FINANCIAL STATEMENTS
|
16
|
FINANCIAL HIGHLIGHTS/PER SHARE DATA
|
29
|
Distribution Reinvestment Plan
|
31
|
Directory
|
33
|
Proxy Voting Policies and Procedures
|
34
|
Quarterly Portfolio Schedule
|
34
|
|
|
TICKER SYMBOL
|
|
Income Opportunity Fund
|
NOX
|
RATING SUMMARY
|
|
(% of total investments)
|
AAA/Government/
Government Agency
|
0.0
|
%
|
|
AA
|
0.0
|
||
A
|
0.0
|
||
BBB
|
3.0
|
||
BB
|
29.5
|
||
B
|
44.1
|
||
CCC
|
21.1
|
||
CC
|
1.1
|
||
C
|
0.3
|
||
D
|
0.0
|
||
Not Rated
|
0.7
|
||
Short Term
|
0.0
|
||
Cash & Cash Equivalents
|
0.2
|
||
100.0
|
%
|
||
The Fund's portfolio holdings are categorized using the ratings assigned by Standard and Poor's, Moody's Investors Service, Inc., or Fitch, Inc., nationally recognized statistical rating organizations. All ratings are as of the report date and do not reflect any subsequent changes in ratings.
|
PERFORMANCE HIGHLIGHTS | |||||||||||||||||||
Neuberger Berman
|
|||||||||||||||||||
NAV 1,3,4 |
Inception
Date
|
Six Month Period Ended 04/30/2010 |
Average Annual Total Return
Ended 04/30/2010
|
||||||||||||||||
1 Year
|
5 Years
|
Life of Fund
|
|||||||||||||||||
Income Opportunity
Fund
|
06/24/2003
|
24.52
|
%
|
85.12
|
%
|
0.08
|
%
|
4.22
|
%
|
||||||||||
Market Price 2,3,4 |
Inception
Date
|
Six Month Period Ended 04/30/2010 |
Average Annual Total Return
Ended 04/30/2010
|
||||||||||||||||
1 Year
|
5 Years
|
Life of Fund
|
|||||||||||||||||
Income Opportunity
Fund
|
06/24/2003
|
35.77
|
%
|
105.89
|
%
|
2.56
|
%
|
3.28
|
%
|
||||||||||
Closed-end funds, unlike open-end funds, are not continually offered. There is an initial public offering and, once issued, common shares of closed-end funds are sold in the open market through a stock exchange.
|
|||||||||||||||||||
The composition, industries and holdings of the Fund are subject to change. Investment return will fluctuate. Past performance is no guarantee of future results. |
1
|
Returns based on the net asset value (NAV) of the Fund.
|
2
|
Returns based on the market price of Fund shares on the NYSE Amex.
|
3
|
Neuberger Berman Management LLC ("Management") has contractually agreed to waive a portion of the management fees that it would otherwise be entitled to receive from the Fund until October 31, 2011. Management has voluntarily extended these waivers for one year. Please see the notes to the financial statements for specific information regarding the rate of the management fees waived by Management. Absent such a waiver, the performance of the Fund would be lower.
|
4
|
Unaudited performance data current to the most recent month-end are available at www.nb.com.
|
Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index:
|
An unmanaged sub-index of the Barclays Capital High Yield Index (which includes all U.S. dollar-denominated, taxable, fixed rate, non-investment grade debt), capped such that no single issuer accounts for more than 2% of the index weight.
|
FTSE NAREIT Equity REITs Index:
|
An unmanaged free float adjusted market capitalization weighted index that tracks the performance of all Equity REITs currently listed on the New York Stock Exchange, the NASDAQ National Market System and the NYSE Amex. REITs are classified as Equity REITs if 75% or more of their gross invested book assets are invested directly or indirectly in real property.
|
PRINCIPAL AMOUNT
(000's omitted)
|
VALUE
†
(000's omitted)
|
||||||
Bank Loan Obligations
µ
(0.6%)
|
|||||||
Electric—Generation (0.6%)
|
|||||||
$
|
770
|
Texas Competitive Electric Holdings Co. LLC, Term Loan DD, 3.75%, due 10/10/14
(Cost $578)
|
$
|
623
|
|||
Corporate Debt Securities (143.5%)
|
|||||||
Airlines (3.6%)
|
|||||||
243
|
American Airlines, Inc., Pass-Through Certificates, Ser. 2009-1, Class A, 10.38%, due 7/2/19
|
281
|
|||||
730
|
Delta Air Lines, Inc., Senior Secured Notes, 9.50%, due 9/15/14
|
773
|
ñ
|
||||
1,060
|
United Airlines, Inc., Pass-Through Certificates, Ser. 2009-2, Class A, 9.75%, due 1/15/17
|
1,161
|
|||||
1,895
|
United Airlines, Inc., Pass-Through Certificates, Ser. 2007-1, Class A, 6.64%, due 7/2/22
|
1,781
|
|||||
3,996
|
|||||||
Apparel/Textiles (0.4%)
|
|||||||
390
|
Levi Strauss & Co., Senior Notes, 7.63%, due 5/15/20
|
394
|
ñØ
|
||||
Auto Loans (3.8%)
|
|||||||
950
|
Ford Motor Credit Co. LLC, Senior Unsecured Notes, 8.70%, due 10/1/14
|
1,025
|
|||||
2,935
|
Ford Motor Credit Co. LLC, Senior Unsecured Notes, 8.13%, due 1/15/20
|
3,109
|
|||||
4,134
|
|||||||
Automakers (1.6%)
|
|||||||
400
|
Ford Holdings, Inc., Guaranteed Notes, 9.30%, due 3/1/30
|
408
|
|||||
65
|
Ford Motor Co., Senior Unsecured Notes, 8.90%, due 1/15/32
|
65
|
|||||
300
|
Ford Motor Co., Senior Unsecured Notes, 9.98%, due 2/15/47
|
312
|
|||||
955
|
Navistar Int'l Corp., Guaranteed Notes, 8.25%, due 11/1/21
|
1,008
|
|||||
1,793
|
|||||||
Banking (11.7%)
|
|||||||
1,726
|
CIT Group, Inc., Senior Secured Notes, 7.00%, due 5/1/16
|
1,642
|
|||||
5,825
|
CIT Group, Inc., Senior Secured Notes, 7.00%, due 5/1/17
|
5,541
|
|||||
405
|
Ally Financial, Guaranteed Notes, Ser. 8, 6.75%, due 12/1/14
|
404
|
|||||
330
|
Ally Financial, Senior Unsecured Notes, 0.00%, due 6/15/15
|
220
|
|||||
2,120
|
Ally Financial, Subordinated Notes, 8.00%, due 12/31/18
|
2,112
|
|||||
1,730
|
Ally Financial, Guaranteed Notes, 8.00%, due 11/1/31
|
1,687
|
|||||
1,100
|
Ally Financial, Guaranteed Notes, 8.30%, due 2/12/15
|
1,148
|
ñ
|
||||
120
|
Lloyds Banking Group PLC, Junior Subordinated Notes, 6.27%, due 11/14/16
|
79
|
ñµ
|
||||
155
|
Lloyds Banking Group PLC, Junior Subordinated Notes, Ser. A, 6.41%, due 10/1/35
|
103
|
ñµ
|
||||
12,936
|
|||||||
Beverage (0.2%)
|
|||||||
220
|
Constellation Brands, Inc., Guaranteed Notes, 7.25%, due 9/1/16
|
226
|
|||||
Building Materials (3.2%)
|
|||||||
885
|
Goodman Global Group, Inc., Senior Discount Notes, 0.00%, due 12/15/14
|
540
|
ñ
|
||||
205
|
Masco Corp., Senior Unsecured Notes, 6.13%, due 10/3/16
|
209
|
|||||
1,285
|
Ply Gem Industries, Inc., Senior Secured Notes, 11.75%, due 6/15/13
|
1,367
|
|||||
455
|
Ply Gem Industries, Inc., Senior Subordinated Notes, 13.13%, due 7/15/14
|
473
|
ñ
|
||||
860
|
USG Corp., Guaranteed Notes, 9.75%, due 8/1/14
|
929
|
ñ
|
||||
3,518
|
PRINCIPAL AMOUNT
(000's omitted)
|
VALUE
†
(000's omitted)
|
||||||
Chemicals (3.8%)
|
|||||||
$
|
390
|
CF Industries, Inc., Senior Unsecured Notes, 6.88%, due 5/1/18
|
$
|
407
|
|||
200
|
CF Industries, Inc., Senior Unsecured Notes, 7.13%, due 5/1/20
|
211
|
|||||
485
|
Huntsman Int'l LLC, Guaranteed Notes, 7.88%, due 11/15/14
|
492
|
|||||
1,180
|
LBI Escrow Corp., Senior Secured Notes, 8.00%, due 11/1/17
|
1,223
|
ñ
|
||||
625
|
MacDermid, Inc., Senior Subordinated Notes, 9.50%, due 4/15/17
|
645
|
ñ
|
||||
1,091
|
Momentive Performance Materials, Inc., Guaranteed Notes, 12.50%, due 6/15/14
|
1,227
|
ñÈ
|
||||
4,205
|
|||||||
Consumer/Commercial/Lease Financing (3.7%)
|
|||||||
1,545
|
American General Finance Corp., Senior Unsecured Medium-Term Notes, Ser. I, 5.85%, due 6/1/13
|
1,426
|
|||||
1,000
|
American General Finance Corp., Senior Unsecured Medium-Term Notes, Ser. J, 6.90%, due 12/15/17
|
840
|
|||||
330
|
Int'l Lease Finance Corp., Senior Unsecured Medium-Term Notes, Ser. Q, 5.25%, due 1/10/13
|
310
|
|||||
515
|
Int'l Lease Finance Corp., Senior Unsecured Notes, 5.88%, due 5/1/13
|
486
|
|||||
1,045
|
Int'l Lease Finance Corp., Senior Unsecured Notes, 8.63%, due 9/15/15
|
1,032
|
ñ
|
||||
4,094
|
|||||||
Department Stores (0.7%)
|
|||||||
450
|
Macy's Retail Holdings, Inc., Guaranteed Unsecured Notes, 7.00%, due 2/15/28
|
430
|
|||||
420
|
Macy's Retail Holdings, Inc., Guaranteed Senior Notes, 6.90%, due 4/1/29
|
399
|
|||||
829
|
|||||||
Diversified Capital Goods (0.5%)
|
|||||||
565
|
RBS Global & Rexnord Corp., Guaranteed Notes, 8.50%, due 5/1/18
|
566
|
ñ
|
||||
Electric—Generation (9.2%)
|
|||||||
305
|
Calpine Construction Finance Co. L.P., Senior Secured Notes, 8.00%, due 6/1/16
|
316
|
ñ
|
||||
2,660
|
Dynegy Holdings, Inc., Senior Unsecured Notes, 7.75%, due 6/1/19
|
2,128
|
|||||
2,440
|
Edison Mission Energy, Senior Unsecured Notes, 7.63%, due 5/15/27
|
1,659
|
ØØ
|
||||
3,120
|
Energy Future Holdings Corp., Guaranteed Notes, 10.88%, due 11/1/17
|
2,457
|
|||||
1,665
|
Energy Future Holdings Corp., Guaranteed Notes, 11.25%, due 11/1/17
|
1,207
|
|||||
175
|
Homer City Funding LLC, Senior Secured Notes, 8.14%, due 10/1/19
|
173
|
|||||
1,365
|
NRG Energy, Inc., Guaranteed Notes, 7.38%, due 2/1/16
|
1,352
|
|||||
910
|
NRG Energy, Inc., Guaranteed Notes, 7.38%, due 1/15/17
|
896
|
|||||
10,188
|
|||||||
Electric—Integrated (0.4%)
|
|||||||
405
|
IPALCO Enterprises, Inc., Senior Secured Notes, 7.25%, due 4/1/16
|
424
|
ñ
|
||||
Electronics (3.6%)
|
|||||||
885
|
Advanced Micro Devices, Inc., Senior Unsecured Notes, 8.13%, due 12/15/17
|
911
|
ñ
|
||||
1,166
|
Flextronics Int'l Ltd., Senior Subordinated Notes, 6.25%, due 11/15/14
|
1,172
|
|||||
700
|
Freescale Semiconductor, Inc., Senior Secured Notes, 10.13%, due 3/15/18
|
756
|
ñ
|
||||
1,050
|
Freescale Semiconductor, Inc., Senior Secured Notes, 9.25%, due 4/15/18
|
1,092
|
ñ
|
||||
3,931
|
|||||||
Energy—Exploration & Production (6.5%)
|
|||||||
2,350
|
ATP Oil & Gas Corp., Senior Secured Notes, 11.88%, due 5/1/15
|
2,344
|
ñ
|
||||
430
|
Chesapeake Energy Corp., Guaranteed Notes, 9.50%, due 2/15/15
|
471
|
|||||
2,135
|
Chesapeake Energy Corp., Guaranteed Notes, 6.88%, due 1/15/16
|
2,130
|
|||||
680
|
Cimarex Energy Co., Guaranteed Notes, 7.13%, due 5/1/17
|
701
|
|||||
573
|
Denbury Resources, Inc., Guaranteed Notes, 8.25%, due 2/15/20
|
615
|
|||||
285
|
Forest Oil Corp., Guaranteed Notes, 8.50%, due 2/15/14
|
303
|
|||||
565
|
Linn Energy LLC, Senior Unsecured Notes, 8.63%, due 4/15/20
|
586
|
ñ
|
||||
7,150
|
PRINCIPAL AMOUNT
(000's omitted)
|
VALUE
†
(000's omitted)
|
||||||
Food & Drug Retailers (1.7%)
|
|||||||
$
|
245
|
Ingles Markets, Inc., Senior Unsecured Notes, 8.88%, due 5/15/17
|
$
|
259
|
|||
955
|
Rite Aid Corp., Senior Secured Notes, 9.75%, due 6/12/16
|
1,052
|
|||||
575
|
Rite Aid Corp., Senior Secured Notes, 10.38%, due 7/15/16
|
620
|
|||||
1,931
|
|||||||
Forestry/Paper (1.8%)
|
|||||||
1,240
|
Georgia-Pacific LLC, Guaranteed Notes, 7.00%, due 1/15/15
|
1,290
|
ñ
|
||||
610
|
PE Paper Escrow GmbH, Senior Secured Notes, 12.00%, due 8/1/14
|
695
|
ñ
|
||||
1,985
|
|||||||
Gaming (7.2%)
|
|||||||
1,155
|
FireKeepers Development Authority, Senior Secured Notes, 13.88%, due 5/15/15
|
1,340
|
ñ
|
||||
530
|
Harrah's Operating Co., Inc., Guaranteed Notes, 5.63%, due 6/1/15
|
378
|
|||||
1,980
|
Harrah's Operating Co., Inc., Guaranteed Notes, 10.75%, due 2/1/16
|
1,742
|
|||||
575
|
MGM Mirage, Inc., Senior Secured Notes, 11.13%, due 11/15/17
|
653
|
ñ
|
||||
855
|
MGM Mirage, Inc., Senior Secured Notes, 9.00%, due 3/15/20
|
898
|
ñ
|
||||
765
|
Peninsula Gaming LLC, Senior Secured Notes, 8.38%, due 8/15/15
|
782
|
ñ
|
||||
375
|
Peninsula Gaming LLC, Senior Unsecured Notes, 10.75%, due 8/15/17
|
384
|
ñ
|
||||
1,308
|
Pokagon Gaming Authority, Senior Notes, 10.38%, due 6/15/14
|
1,373
|
ñ
|
||||
355
|
San Pasqual Casino Development Group, Inc., Notes, 8.00%, due 9/15/13
|
345
|
ñ
|
||||
7,895
|
|||||||
Gas Distribution (8.7%)
|
|||||||
320
|
AmeriGas Partners L.P., Senior Unsecured Notes, 7.13%, due 5/20/16
|
327
|
ØØ
|
||||
230
|
Crosstex Energy L.P., Guaranteed Notes, 8.88%, due 2/15/18
|
239
|
ñ
|
||||
2,470
|
El Paso Energy Corp., Medium-Term Notes, 7.80%, due 8/1/31
|
2,465
|
|||||
341
|
Ferrellgas L.P., Senior Unsecured Notes, 6.75%, due 5/1/14
|
335
|
ØØ
|
||||
65
|
Ferrellgas Partners L.P., Senior Unsecured Notes, 6.75%, due 5/1/14
|
64
|
|||||
1,420
|
Ferrellgas Partners L.P., Senior Unsecured Notes, 9.13%, due 10/1/17
|
1,505
|
ñ
|
||||
200
|
Ferrellgas Partners L.P., Senior Unsecured Notes, 8.63%, due 6/15/20
|
204
|
|||||
70
|
Inergy L.P., Guaranteed Notes, 8.25%, due 3/1/16
|
73
|
|||||
535
|
MarkWest Energy Partners L.P., Guaranteed Notes, Ser. B, 6.88%, due 11/1/14
|
524
|
|||||
1,445
|
MarkWest Energy Partners L.P., Guaranteed Notes, Ser. B, 8.75%, due 4/15/18
|
1,497
|
|||||
2,605
|
Sabine Pass LNG L.P., Senior Secured Notes, 7.50%, due 11/30/16
|
2,390
|
ØØ
|
||||
9,623
|
|||||||
Health Care (3.8%)
|
|||||||
245
|
Columbia Healthcare Corp., Senior Unsecured Notes, 7.50%, due 12/15/23
|
238
|
|||||
280
|
Columbia/HCA Corp., Senior Unsecured Notes, 7.69%, due 6/15/25
|
268
|
|||||
370
|
Columbia/HCA Corp., Senior Unsecured Notes, 7.05%, due 12/1/27
|
331
|
|||||
1,665
|
HCA, Inc., Secured Notes, 9.25%, due 11/15/16
|
1,800
|
|||||
1,380
|
HCA, Inc., Senior Secured Notes, 8.50%, due 4/15/19
|
1,516
|
ñ
|
||||
4,153
|
|||||||
Health Facilities (2.4%)
|
|||||||
680
|
Health Management Associates, Inc., Senior Secured Notes, 6.13%, due 4/15/16
|
657
|
|||||
185
|
LVB Acquisition, Inc., Guaranteed Notes, 11.63%, due 10/15/17
|
207
|
|||||
500
|
National MENTOR Holdings, Inc., Guaranteed Notes, 11.25%, due 7/1/14
|
500
|
|||||
865
|
NMH Holdings, Inc., Senior Unsecured Floating Rate Notes, 7.38%, due 6/15/10
|
651
|
ñµ
|
||||
600
|
US Oncology, Inc., Senior Secured Notes, 9.13%, due 8/15/17
|
627
|
|||||
2,642
|
|||||||
Health Services (0.8%)
|
|||||||
960
|
Service Corp. Int'l, Senior Unsecured Notes, 7.50%, due 4/1/27
|
905
|
PRINCIPAL AMOUNT
(000's omitted)
|
VALUE
†
(000's omitted)
|
|||||
Hotels (1.8%)
|
||||||
$
|
495
|
Host Hotels & Resorts L.P., Guaranteed Notes, 6.88%, due 11/1/14
|
$
|
503
|
||
200
|
Host Hotels & Resorts L.P., Guaranteed Notes, Ser. O, 6.38%, due 3/15/15
|
201
|
||||
1,225
|
Host Hotels & Resorts L.P., Guaranteed Notes, Ser. Q, 6.75%, due 6/1/16
|
1,250
|
||||
1,954
|
||||||
Investments & Misc. Financial Services (1.4%)
|
||||||
1,590
|
Icahn Enterprises L.P., Guaranteed Notes, 7.75%, due 1/15/16
|
1,546
|
ñ
|
|||
Machinery (0.3%)
|
||||||
350
|
The Manitowoc Co., Inc., Guaranteed Notes, 9.50%, due 2/15/18
|
367
|
||||
Media—Broadcast (6.9%)
|
||||||
315
|
Allbritton Communications Co., Senior Subordinated Notes, 7.75%, due 12/15/12
|
320
|
||||
575
|
Clear Channel Communications, Inc., Senior Unsecured Notes, 5.75%, due 1/15/13
|
477
|
||||
930
|
Clear Channel Communications, Inc., Senior Unsecured Notes, 5.50%, due 9/15/14
|
609
|
||||
850
|
Clear Channel Communications, Inc., Guaranteed Notes, 10.75%, due 8/1/16
|
713
|
||||
965
|
LIN Television Corp., Guaranteed Notes, Ser. B, 6.50%, due 5/15/13
|
948
|
||||
460
|
Sinclair Television Group, Inc., Senior Secured Notes, 9.25%, due 11/1/17
|
489
|
ñ
|
|||
1,765
|
Sirius XM Radio, Inc., Guaranteed Notes, 8.75%, due 4/1/15
|
1,800
|
ñÈ
|
|||
1,203
|
Umbrella Acquisition, Inc., Guaranteed Notes, 9.75%, due 3/15/15
|
1,092
|
ñ
|
|||
355
|
Univision Communications, Inc., Senior Secured Notes, 12.00%, due 7/1/14
|
392
|
ñ
|
|||
370
|
XM Satellite Radio, Inc., Senior Secured Notes, 11.25%, due 6/15/13
|
406
|
ñ
|
|||
270
|
XM Satellite Radio, Inc., Guaranteed Notes, 13.00%, due 8/1/13
|
307
|
ñ
|
|||
7,553
|
||||||
Media—Cable (7.8%)
|
||||||
580
|
CCO Holdings LLC, Guaranteed Notes, 8.13%, due 4/30/20
|
593
|
ñ
|
|||
590
|
Cequel Communications Holdings I LLC, Senior Unsecured Notes, 8.63%, due 11/15/17
|
601
|
ñ
|
|||
1,075
|
Cequel Communications Holdings I LLC, Senior Unsecured Notes, 8.63%, due 11/15/17
|
1,094
|
ñ
|
|||
420
|
CSC Holdings, Inc., Senior Unsecured Notes, 8.50%, due 6/15/15
|
447
|
ñ
|
|||
1,525
|
DISH DBS Corp., Guaranteed Notes, 7.88%, due 9/1/19
|
1,601
|
||||
230
|
EchoStar DBS Corp., Guaranteed Notes, 6.63%, due 10/1/14
|
232
|
||||
425
|
Mediacom Broadband LLC, Senior Unsecured Notes, 8.50%, due 10/15/15
|
437
|
||||
820
|
UPC Holding BV, Secured Notes, 9.88%, due 4/15/18
|
865
|
ñ
|
|||
1,105
|
Videotron Ltee, Guaranteed Senior Unsecured Notes, 6.88%, due 1/15/14
|
1,119
|
||||
305
|
Videotron Ltee, Guaranteed Notes, 9.13%, due 4/15/18
|
339
|
||||
255
|
Virgin Media Finance PLC, Guaranteed Notes, 9.13%, due 8/15/16
|
272
|
||||
860
|
Virgin Media Finance PLC, Guaranteed Notes, Ser. 1, 9.50%, due 8/15/16
|
944
|
||||
8,544
|
||||||
Media—Services (3.5%)
|
||||||
275
|
Nielsen Finance LLC, Guaranteed Notes, 11.50%, due 5/1/16
|
312
|
||||
1,145
|
Nielsen Finance LLC, Guaranteed Notes, Step Up, 0.00%/12.50%, due 8/1/16
|
1,111
|
^^
|
|||
835
|
The Interpublic Group of Cos., Inc., Senior Unsecured Notes, 10.00%, due 7/15/17
|
955
|
||||
190
|
WMG Acquisition Corp., Guaranteed Notes, 7.38%, due 4/15/14
|
183
|
||||
1,195
|
WMG Acquisition Corp., Senior Secured Notes, 9.50%, due 6/15/16
|
1,291
|
ñ
|
|||
3,852
|
||||||
Metals/Mining Excluding Steel (1.5%)
|
||||||
830
|
Arch Coal, Inc., Guaranteed Notes, 8.75%, due 8/1/16
|
884
|
ñ
|
|||
800
|
Arch Western Finance Corp., Guaranteed Notes, 6.75%, due 7/1/13
|
806
|
||||
1,690
|
||||||
Multi-Line Insurance (0.8%)
|
||||||
1,035
|
American Int'l Group, Inc., Junior Subordinated Debentures, 8.18%, due 5/15/38
|
897
|
µ
|
PRINCIPAL AMOUNT
(000's omitted)
|
VALUE
†
(000's omitted)
|
||||||
Packaging (2.0%)
|
|||||||
$
|
840
|
Ball Corp., Guaranteed Notes, 7.13%, due 9/1/16
|
$
|
893
|
|||
230
|
Ball Corp., Guaranteed Notes, 6.63%, due 3/15/18
|
234
|
|||||
780
|
Crown Americas LLC, Guaranteed Notes, 7.75%, due 11/15/15
|
809
|
|||||
220
|
Crown Americas LLC, Guaranteed Notes, 7.63%, due 5/15/17
|
229
|
ñ
|
||||
2,165
|
|||||||
Printing & Publishing (1.9%)
|
|||||||
870
|
Cengage Learning Acquisitions, Inc., Senior Notes, 10.50%, due 1/15/15
|
853
|
ñ
|
||||
215
|
Gannett Co., Inc., Guaranteed Notes, 8.75%, due 11/15/14
|
236
|
ñ
|
||||
890
|
Gannett Co., Inc., Guaranteed Notes, 9.38%, due 11/15/17
|
975
|
ñ
|
||||
2,064
|
|||||||
Real Estate Dev. & Mgt. (0.4%)
|
|||||||
490
|
Realogy Corp., Guaranteed Notes, 10.50%, due 4/15/14
|
457
|
È
|
||||
REITs (2.1%)
|
|||||||
1,505
|
Ventas Realty L.P., Guaranteed Notes, 6.50%, due 6/1/16
|
1,554
|
|||||
425
|
Ventas Realty L.P., Guaranteed Notes, Ser. 1, 6.50%, due 6/1/16
|
439
|
|||||
275
|
Ventas Realty L.P., Guaranteed Notes, 6.75%, due 4/1/17
|
283
|
|||||
2,276
|
|||||||
Restaurants (0.2%)
|
|||||||
265
|
OSI Restaurant Partners, Inc., Guaranteed Notes, 10.00%, due 6/15/15
|
273
|
È
|
||||
Software/Services (5.9%)
|
|||||||
620
|
Ceridian Corp., Senior Unsecured Notes, 11.25%, due 11/15/15
|
639
|
|||||
1,308
|
Ceridian Corp., Guaranteed Notes, 12.25%, due 11/15/15
|
1,347
|
|||||
240
|
First Data Corp., Guaranteed Notes, 9.88%, due 9/24/15
|
220
|
|||||
1,524
|
First Data Corp., Guaranteed Notes, 10.55%, due 9/24/15
|
1,349
|
|||||
570
|
Lender Processing Services, Inc., Guaranteed Notes, 8.13%, due 7/1/16
|
608
|
|||||
400
|
SunGard Data Systems, Inc., Guaranteed Notes, 10.63%, due 5/15/15
|
441
|
|||||
1,775
|
SunGard Data Systems, Inc., Guaranteed Notes, 10.25%, due 8/15/15
|
1,870
|
|||||
6,474
|
|||||||
Specialty Retail (1.1%)
|
|||||||
1,040
|
Toys "R" Us Property Co. I LLC, Guaranteed Notes, 10.75%, due 7/15/17
|
1,180
|
ñØØ
|
||||
Steel Producers/Products (2.6%)
|
|||||||
255
|
AK Steel Corp., Guaranteed Notes, 7.63%, due 5/15/20
|
263
|
Ø
|
||||
1,565
|
Tube City IMS Corp., Guaranteed Notes, 9.75%, due 2/1/15
|
1,580
|
|||||
1,130
|
United States Steel Corp., Senior Unsecured Notes, 6.65%, due 6/1/37
|
1,017
|
|||||
2,860
|
|||||||
Support—Services (5.6%)
|
|||||||
980
|
Cardtronics, Inc., Guaranteed Notes, 9.25%, due 8/15/13
|
1,016
|
|||||
485
|
Knowledge Learning Corp., Inc., Guaranteed Notes, 7.75%, due 2/1/15
|
463
|
ñ
|
||||
485
|
Live Nation Entertainment, Inc., Senior Unsecured Notes, 8.13%, due 5/15/18
|
498
|
ñØ
|
||||
945
|
RSC Equipment Rental, Inc., Guaranteed Notes, 9.50%, due 12/1/14
|
971
|
|||||
395
|
RSC Equipment Rental, Inc., Senior Notes, 10.25%, due 11/15/19
|
412
|
ñÈ
|
||||
1,440
|
United Rentals N.A., Inc., Guaranteed Notes, 7.75%, due 11/15/13
|
1,451
|
È
|
||||
515
|
United Rentals N.A., Inc., Guaranteed Notes, 7.00%, due 2/15/14
|
503
|
|||||
735
|
United Rentals N.A., Inc., Guaranteed Notes, 10.88%, due 6/15/16
|
827
|
|||||
6,141
|
PRINCIPAL AMOUNT
(000's omitted)
|
VALUE
†
(000's omitted)
|
||||||
Telecom—Integrated/Services (13.0%)
|
|||||||
$
|
2,330
|
Citizens Communications Corp., Senior Unsecured Notes, 9.00%, due 8/15/31
|
$
|
2,353
|
|||
305
|
Dycom Investments, Inc., Guaranteed Notes, 8.13%, due 10/15/15
|
294
|
|||||
915
|
GCI, Inc., Senior Unsecured Notes, 8.63%, due 11/15/19
|
931
|
ñ
|
||||
1,185
|
Integra Telecom Holdings, Inc., Senior Secured Notes, 10.75%, due 4/15/16
|
1,209
|
ñ
|
||||
2,237
|
Intelsat Bermuda Ltd., Guaranteed Notes, 11.50%, due 2/4/17
|
2,360
|
|||||
325
|
Intelsat Jackson Holdings Ltd., Guaranteed Notes, 8.50%, due 11/1/19
|
342
|
ñ
|
||||
215
|
Intelsat Ltd., Senior Unsecured Notes, 6.50%, due 11/1/13
|
212
|
|||||
235
|
Intelsat Subsidiary Holdings Co. Ltd., Guaranteed Notes, Ser. B, 8.88%, due 1/15/15
|
243
|
ñ
|
||||
290
|
Intelsat Subsidiary Holdings Co. Ltd., Guaranteed Notes, 8.88%, due 1/15/15
|
302
|
|||||
480
|
Level 3 Financing, Inc., Guaranteed Notes, 8.75%, due 2/15/17
|
452
|
|||||
1,080
|
Level 3 Financing, Inc., Guaranteed Notes, 10.00%, due 2/1/18
|
1,064
|
ñ
|
||||
270
|
New Communications Holdings, Inc., Senior Notes, 7.88%, due 4/15/15
|
279
|
ñ
|
||||
625
|
New Communications Holdings, Inc., Senior Notes, 8.25%, due 4/15/17
|
644
|
ñ
|
||||
225
|
PAETEC Holding Corp., Senior Secured Notes, 8.88%, due 6/30/17
|
232
|
ñ
|
||||
535
|
PAETEC Holding Corp., Guaranteed Notes, 8.88%, due 6/30/17
|
550
|
|||||
715
|
Qwest Corp., Senior Unsecured Notes, 8.38%, due 5/1/16
|
815
|
|||||
120
|
Valor Telecommunications Enterprises Finance Corp., Guaranteed Notes, 7.75%, due 2/15/15
|
123
|
|||||
580
|
Windstream Corp., Guaranteed Notes, 8.13%, due 8/1/13
|
606
|
|||||
1,110
|
Windstream Corp., Guaranteed Notes, 8.63%, due 8/1/16
|
1,136
|
|||||
135
|
Windstream Corp., Guaranteed Notes, 7.00%, due 3/15/19
|
127
|
|||||
14,274
|
|||||||
Telecom—Wireless (5.4%)
|
|||||||
1,185
|
Clearwire Communications LLC, Senior Secured Notes, 12.00%, due 12/1/15
|
1,229
|
ñ
|
||||
745
|
Cricket Communications, Inc., Senior Secured Notes, 7.75%, due 5/15/16
|
773
|
|||||
1,525
|
MetroPCS Wireless, Inc., Guaranteed Notes, 9.25%, due 11/1/14
|
1,582
|
È
|
||||
2,710
|
Sprint Capital Corp., Guaranteed Notes, 6.88%, due 11/15/28
|
2,358
|
|||||
5,942
|
|||||||
Total Corporate Debt Securities (Cost $148,264) |
158,027
|
||||||
NUMBER OF SHARES
|
|||||||
Preferred Stocks (0.0%)
|
|||||||
Lodging (0.0%)
|
|||||||
109,000
|
W2007 Grace Acquisition I, Ser. B
(Cost $2,357)
|
15
|
*
|
||||
Short-Term Investments (9.7%)
|
|||||||
6,164,473
|
Neuberger Berman Securities Lending Quality Fund, LLC
|
6,288
|
‡
|
||||
4,406,726
|
State Street Institutional Liquid Reserves Fund Institutional Class
|
4,407
|
|||||
Total Short-Term Investments (Cost $10,695) |
10,695
|
||||||
Total Investments (153.8%) (Cost $161,894) |
169,360
|
##
|
|||||
Liabilities, less cash, receivables and other assets [(40.3%)] |
(44,338
|
)
|
|||||
Liquidation Value of Perpetual Preferred Shares [(13.5%)] |
(14,875
|
)
|
|||||
Total Net Assets Applicable to Common Shareholders (100.0%) |
$
|
110,147
|
†
|
The value of investments in debt securities by Neuberger Berman Income Opportunity Fund Inc. (the "Fund") is determined daily by Neuberger Berman Management LLC ("Management") primarily by obtaining valuations from independent pricing services based on readily available bid quotations, or if quotations are not available, by methods which include considerations such as: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. The value of investments in equity securities by the Fund is determined by Management primarily by obtaining valuations from an independent pricing service based on the latest sale price when that price is readily available. Securities traded primarily on the NASDAQ Stock Market are normally valued by the Fund at the NASDAQ Official Closing Price ("NOCP") provided by NASDAQ each business day. The NOCP is the most recently reported price as of 4:00:02 p.m., Eastern time, unless that price is outside the range of the "inside" bid and asked prices (i.e., the bid and asked prices that dealers quote to each other when trading for their own accounts); in that case, NASDAQ will adjust the price to equal the inside bid or asked price, whichever is closer. Because of delays in reporting trades, the NOCP may not be based on the price of the last trade to occur before the market closes. If there is no reported sale of a security on a particular day, the independent pricing service may value the security based on reported market quotations. For both debt and equity securities, Management has developed a process to periodically review information provided by independent pricing services. For both debt and equity securities, if a valuation is not available from an independent pricing service or if Management has reason to believe that the valuation does not represent the amount a fund might reasonably expect to receive on a current sale, the Fund seeks to obtain quotations from principal market makers. If such quotations are not readily available, the security is valued using methods the Board of Directors of the Fund (the "Board") has approved on the belief that they reflect fair value. Numerous factors may be considered when determining the fair value of a security, including available analyst, media or other reports, trading in futures or ADRs and whether the issuer of the security being fair valued has other securities outstanding. Foreign security prices are furnished by independent quotation services and expressed in local currency values. Foreign security prices are currently translated from the local currency into U.S. dollars using the exchange rate as of 4:00 p.m., Eastern time. The Board has approved the use of Interactive Data Pricing and Reference Data, Inc. ("Interactive") to assist in determining the fair value of foreign equity securities when changes in the value of a certain index suggest that the closing prices on the foreign exchanges may no longer represent the amount that the Fund could expect to receive for those securities. In this event, Interactive will provide adjusted prices for certain foreign equity securities using a statistical analysis of historical correlations of multiple factors. In the absence of precise information about the market values of these foreign securities as of the close of the New York Stock Exchange, the Board has determined on the basis of available data that prices adjusted in this way are likely to be closer to the prices the Fund could realize on a current sale than are the prices of those securities established at the close of the foreign markets in which the securities primarily trade. Fair value prices are necessarily estimates, and there is no assurance that such a price will be at or close to the price at which the security is next quoted or next trades. Short-term debt securities with less than 60 days until maturity may be valued at cost, which, when combined with interest earned, is expected to approximate market value.
|
In accordance with Accounting Standards Codification ("ASC") 820 "Fair Value Measurements and Disclosures" ("ASC 820"), all investments held by the Fund are carried at "fair value" as defined by ASC 820. Fair value is defined as the price that a fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment under current market conditions. Various inputs, including the volume and level of activity for the asset or liability in the market, are considered in determining the value of the Fund's investments, some of which are discussed above. Significant management judgement may be necessary to estimate fair value in accordance with ASC 820.
|
In addition to defining fair value, ASC 820 established a three-tier hierarchy of inputs to establish a classification of fair value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.
|
•
|
Level 1 – quoted prices in active markets for identical investments
|
|
•
|
Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, amortized cost, etc.)
|
|
•
|
Level 3 – significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
|
The inputs or methodology used for valuing an investment are not necessarily an indication of the risk associated with investing in those securities.
|
|
The following is a summary, by category of Level, of inputs used to value the Fund's investments as of April 30, 2010:
|
(000's omitted)
|
Level 1
|
Level 2
|
Level 3
§
|
Total
|
||||||
Investments:
|
||||||||||
Bank Loan Obligations
|
||||||||||
Electric—Generation
|
$
|
—
|
$
|
623
|
$
|
—
|
$
|
623
|
||
Corporate Debt Securities
|
||||||||||
Airlines
|
—
|
1,934
|
2,062
|
3,996
|
||||||
Apparel/Textiles
|
—
|
394
|
—
|
394
|
||||||
Auto Loans
|
—
|
4,134
|
—
|
4,134
|
||||||
Automakers
|
—
|
1,793
|
—
|
1,793
|
||||||
Banking
|
—
|
12,936
|
—
|
12,936
|
||||||
Beverage
|
—
|
226
|
—
|
226
|
||||||
Building Materials
|
—
|
3,518
|
—
|
3,518
|
||||||
Chemicals
|
—
|
4,205
|
—
|
4,205
|
||||||
Consumer/Commercial/Lease Financing
|
—
|
4,094
|
—
|
4,094
|
||||||
Department Stores
|
—
|
829
|
—
|
829
|
||||||
Diversified Capital Goods
|
—
|
566
|
—
|
566
|
||||||
Electric—Generation
|
—
|
10,188
|
—
|
10,188
|
||||||
Electric—Integrated
|
—
|
424
|
—
|
424
|
||||||
Electronics
|
—
|
3,931
|
—
|
3,931
|
||||||
Energy—Exploration & Production
|
—
|
7,150
|
—
|
7,150
|
||||||
Food & Drug Retailers
|
—
|
1,931
|
—
|
1,931
|
||||||
Forestry/Paper
|
—
|
1,985
|
—
|
1,985
|
||||||
Gaming
|
—
|
7,895
|
—
|
7,895
|
||||||
Gas Distribution
|
—
|
9,623
|
—
|
9,623
|
||||||
Health Care
|
—
|
4,153
|
—
|
4,153
|
||||||
Health Facilities
|
—
|
2,642
|
—
|
2,642
|
||||||
Health Services
|
—
|
905
|
—
|
905
|
||||||
Hotels
|
—
|
1,954
|
1,954
|
(000's omitted)
|
Level 1
|
Level 2
|
Level 3
§
|
Total
|
||||||||||||
Investments & Misc. Financial Services
|
$
|
—
|
$
|
1,546
|
$
|
—
|
$
|
1,546
|
||||||||
Machinery
|
—
|
367
|
—
|
367
|
||||||||||||
Media—Broadcast
|
—
|
7,553
|
—
|
7,553
|
||||||||||||
Media—Cable
|
—
|
8,544
|
—
|
8,544
|
||||||||||||
Media—Services
|
—
|
3,852
|
—
|
3,852
|
||||||||||||
Metals/Mining Excluding Steel
|
—
|
1,690
|
—
|
1,690
|
||||||||||||
Multi-Line Insurance
|
—
|
897
|
—
|
897
|
||||||||||||
Packaging
|
—
|
2,165
|
—
|
2,165
|
||||||||||||
Printing & Publishing
|
—
|
2,064
|
—
|
2,064
|
||||||||||||
Real Estate Dev. & Mgt.
|
—
|
457
|
—
|
457
|
||||||||||||
REITs
|
—
|
2,276
|
—
|
2,276
|
||||||||||||
Restaurants
|
—
|
273
|
—
|
273
|
||||||||||||
Software/Services
|
—
|
6,474
|
—
|
6,474
|
||||||||||||
Specialty Retail
|
—
|
1,180
|
—
|
1,180
|
||||||||||||
Steel Producers/Products
|
—
|
2,860
|
—
|
2,860
|
||||||||||||
Support—Services
|
—
|
6,141
|
—
|
6,141
|
||||||||||||
Telecom—Integrated/Services
|
—
|
14,274
|
—
|
14,274
|
||||||||||||
Telecom—Wireless
|
—
|
5,942
|
—
|
5,942
|
||||||||||||
Total Corporate Debt Securities
|
—
|
155,965
|
2,062
|
158,027
|
||||||||||||
Preferred Stocks
|
||||||||||||||||
Lodging
|
—
|
15
|
—
|
15
|
||||||||||||
Short-Term Investments
|
—
|
10,695
|
—
|
10,695
|
||||||||||||
Total Investments
|
$
|
167,298
|
$
|
2,062
|
$
|
169,360
|
§
|
The following is a reconciliation between the beginning and ending balances of investments in which significant unobservable inputs (Level 3) were used in determining value:
|
(000's omitted)
|
Beginning
balance, as
of 11/1/09
|
Accrued
discounts/
(premiums)
|
Realized
gain/loss
and change
in unrealized
appreciation/
(depreciation)
|
Net
purchases/
(sales)
|
Net
transfers in
and/or out
of Level 3
|
Balance, as
of 4/30/10
|
Net change in
unrealized
appreciation/
(depreciation)
from
investments
still held
as of 4/30/10
|
|||||||||||||||||||||
Investments in
Securities:
|
||||||||||||||||||||||||||||
Corporate Debt
Securities
|
||||||||||||||||||||||||||||
Airlines
|
$
|
1,572
|
$
|
15
|
$
|
92
|
$
|
116
|
$
|
267
|
$
|
2,062
|
$
|
(126
|
)
|
## |
At April 30, 2010, the cost of investments for U.S. federal income tax purposes was $162,188,000. Gross unrealized appreciation of investments was $10,107,000 and gross unrealized depreciation of investments was $2,935,000, resulting in net unrealized appreciation of $7,172,000 based on cost for U.S. federal income tax purposes.
|
||
È |
All or a portion of this security is on loan (see Note A of Notes to Financial Statements).
|
||
‡ |
Managed by an affiliate of Management and could be deemed an affiliate of the Fund (see Notes A & E of Notes to Financial Statements).
|
||
Ñ |
Restricted security subject to restrictions on resale under federal securities laws. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers under Rule 144A under the Securities Act of 1933, as amended, and have been deemed by the investment manager to be liquid. At April 30, 2010, these securities amounted to approximately $50,058,000 or 45.4% of net assets applicable to common shareholders.
|
||
ØØ |
All or a portion of this security is segregated in connection with obligations for when-issued securities.
|
||
µ |
Floating rate securities are securities whose yields vary with a designated market index or market rate. These securities are shown at their current rates as of April 30, 2010.
|
||
^^
|
Denotes a step-up bond: a zero coupon bond that converts to a fixed rate of interest at a designated future date.
|
||
* |
Security did not produce income for the last twelve months.
|
||
Ø |
All or a portion of this security was purchased on a when-issued basis. At April 30, 2010 these securities amounted to $1,155,000 or 1.0% of net assets applicable to common shareholders.
|
INCOME
OPPORTUNITY
FUND
|
||||
April 30, 2010
|
||||
Assets
|
||||
Investments in securities, at value *† (Notes A & E)—see Schedule of Investments:
|
||||
Unaffiliated issuers
|
$
|
163,072
|
||
Affiliated issuers
|
6,288
|
|||
169,360
|
||||
Interest receivable
|
3,919
|
|||
Receivable for securities sold
|
2,359
|
|||
Receivable for collateral on securities loaned (Note A)
|
657
|
|||
Receivable for securities lending income—net (Note A)
|
2
|
|||
Prepaid expenses and other assets
|
420
|
|||
Total Assets
|
176,717
|
|||
Liabilities
|
||||
Notes payable (Note A)
|
36,700
|
|||
Payable for collateral on securities loaned (Note A)
|
6,213
|
|||
Distributions payable—preferred shares
|
43
|
|||
Distributions payable—common shares
|
78
|
|||
Payable for securities purchased
|
8,244
|
|||
Payable to investment manager—net (Notes A & B)
|
54
|
|||
Payable to administrator (Note B)
|
33
|
|||
Payable for merger fees (Note G)
|
130
|
|||
Interest payable
|
54
|
|||
Accrued expenses and other payables
|
146
|
|||
Total Liabilities
|
51,695
|
|||
Perpetual Preferred Shares Series A (595 shares issued and outstanding) at liquidation value (Note A)
|
14,875
|
|||
Net Assets applicable to Common Shareholders at value
|
$
|
110,147
|
||
Net Assets applicable to Common Shareholders consist of:
|
||||
Paid-in capital—common shares
|
$
|
223,574
|
||
Distributions in excess of net investment income
|
(322
|
)
|
||
Accumulated net realized gains (losses) on investments
|
(120,570
|
)
|
||
Net unrealized appreciation (depreciation) in value of investments
|
7,465
|
|||
Net Assets applicable to Common Shareholders at value
|
$
|
110,147
|
||
Common Shares Outstanding ($.0001 par value, 999,994,000 shares authorized)
|
14,374
|
|||
Net Asset Value Per Common Share Outstanding
|
$
|
7.66
|
||
†Securities on loan, at value
|
$
|
6,093
|
||
*Cost of Investments:
|
||||
Unaffiliated issuers
|
$
|
155,606
|
||
Affiliated issuers
|
6,288
|
|||
Total cost of investments
|
$
|
161,894
|
INCOME
OPPORTUNITY
FUND
|
||||
For the Six
Months Ended
April 30, 2010
|
||||
Investment Income:
|
||||
Income (Note A):
|
||||
Dividend income—unaffiliated issuers
|
$
|
595
|
||
Interest income—unaffiliated issuers
|
5,774
|
|||
Income from securities loaned—net (Note E)
|
8
|
|||
Foreign taxes withheld
|
(3
|
)
|
||
Total income
|
$
|
6,374
|
||
Expenses:
|
||||
Investment management fees (Note B)
|
455
|
|||
Administration fees (Note B)
|
190
|
|||
Audit fees
|
40
|
|||
Basic maintenance expense (Note B)
|
17
|
|||
Custodian fees (Note B)
|
43
|
|||
Insurance expense
|
2
|
|||
Legal fees
|
69
|
|||
Shareholder reports
|
48
|
|||
Stock exchange listing fees
|
1
|
|||
Stock transfer agent fees
|
12
|
|||
Interest expense (Note A)
|
366
|
|||
Directors' fees and expenses
|
25
|
|||
Tender offer fees (Note F)
|
18
|
|||
Merger fees (Note G)
|
130
|
|||
Miscellaneous
|
11
|
|||
Total expenses
|
1,427
|
|||
Investment management fees waived (Notes A & B)
|
(144
|
)
|
||
Expenses reduced by custodian fee expense offset arrangement (Note B)
|
—
|
|||
Total net expenses
|
1,283
|
|||
Net investment income (loss)
|
$
|
5,091
|
||
Realized and Unrealized Gain (Loss) on Investments (Note A)
|
||||
Net realized gain (loss) on:
|
||||
Sales of investment securities of unaffiliated issuers
|
9,796
|
|||
Sales of investment securities of affiliated issuers
|
32
|
|||
Change in net unrealized appreciation (depreciation) in value of:
|
||||
Unaffiliated investment securities
|
7,421
|
|||
Affiliated investment securities
|
(32
|
)
|
||
Net gain (loss) on investments
|
17,217
|
|||
Distributions to Preferred Shareholders
|
(237
|
)
|
||
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations
|
$
|
22,071
|
INCOME OPPORTUNITY FUND
|
||||||||
Six Months
Ended
April 30, 2010
(Unaudited)
|
Year Ended
October 31, 2009
|
|||||||
Increase (Decrease) in Net Assets Applicable to Common Shareholders:
|
||||||||
From Operations (Note A):
|
||||||||
Net investment income (loss)
|
$
|
5,091
|
$
|
9,896
|
||||
Net realized gain (loss) on investments
|
9,828
|
(27,932
|
)
|
|||||
Change in net unrealized appreciation (depreciation) of investments
|
7,389
|
59,609
|
||||||
Distributions to Preferred Shareholders From (Note A):
|
||||||||
Net investment income
|
(237
|
)
|
(615
|
)
|
||||
Net increase (decrease) in net assets applicable to common shareholders resulting
from operations
|
22,071
|
40,958
|
||||||
Distributions to Common Shareholders From (Note A):
|
||||||||
Net investment income
|
(5,063
|
)
|
(9,855
|
)
|
||||
Tax return of capital
|
—
|
(2,337
|
)
|
|||||
Total distributions to common shareholders
|
(5,063
|
)
|
(12,192
|
)
|
||||
From Capital Share Transactions (Note D):
|
||||||||
Proceeds from reinvestment of dividends and distributions
|
71
|
—
|
||||||
Payments for shares redeemed in connection with tender offer (Note F)
|
—
|
(18,856
|
)
|
|||||
Total net proceeds from capital share transactions
|
71
|
(18,856
|
)
|
|||||
Net Increase (Decrease) in Net Assets Applicable to Common Shareholders
|
17,079
|
9,910
|
||||||
Net Assets Applicable to Common Shareholders:
|
||||||||
Beginning of period
|
93,068
|
83,158
|
||||||
End of period
|
$
|
110,147
|
$
|
93,068
|
||||
Distributions in excess of net investment income at end of period
|
$
|
(322
|
)
|
$
|
(113
|
)
|
INCOME OPPORTUNITY FUND INC. | ||||||||
For the Six Months Ended April 30, 2010 | ||||||||
Increase (decrease) in cash:
|
||||||||
Cash flows from operating activities:
|
||||||||
Net increase in net assets applicable to Common Shareholders
resulting from operations
|
$
|
22,071
|
||||||
Adjustments to reconcile net increase in net assets applicable to
Common Shareholders resulting from operations to net
cash provided in operating activities:
|
||||||||
Changes in assets and liabilities:
|
||||||||
Purchase of investment securities
|
(145,056
|
)
|
||||||
Proceeds from disposition of investment securities
|
143,748
|
|||||||
Sale of short-term investment securities, net
|
(1,657
|
)
|
||||||
Decrease in collateral for securities loaned
|
93
|
|||||||
Increase in dividends and interest receivable
|
(1,383
|
)
|
||||||
Decrease in receivable for securities lending income
|
2
|
|||||||
Increase in receivable for securities sold
|
(575
|
)
|
||||||
Decrease in prepaid expenses and other assets
|
91
|
|||||||
Decrease in accumulated unpaid distributions on Preferred Shares
|
(1
|
)
|
||||||
Decrease in payable for collateral on securities loaned
|
(93
|
)
|
||||||
Decrease in payable for securities lending fees
|
(1
|
)
|
||||||
Increase in payable for investment securities purchased
|
5,607
|
|||||||
Decrease in interest payable
|
(1
|
)
|
||||||
Net accretion of discount on investments
|
(926
|
)
|
||||||
Increase in accrued expenses and other payables
|
109
|
|||||||
Unrealized appreciation on securities
|
(7,389
|
)
|
||||||
Net realized gain from investments
|
(9,828
|
)
|
||||||
Net cash provided by operating activities
|
$
|
4,811
|
||||||
Cash flows from financing activities:
|
||||||||
Cash distributions paid on Common Shares
|
(4,983)
|
|||||||
Net cash used in financing activities
|
(4,983
|
)
|
||||||
Net decrease in cash
|
(172
|
)
|
||||||
Cash:
|
||||||||
Beginning balance
|
172
|
|||||||
Ending balance
|
$
|
0
|
||||||
Supplemental disclosure
|
||||||||
Cash paid for interest
|
$
|
367
|
1
|
General:
The Fund was organized as a Maryland corporation on April 17, 2003 as a non-diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"). The Board may classify or re-classify any unissued shares of capital stock into one or more classes of preferred stock without the approval of common shareholders.
|
The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires 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 Schedule of Investments.
|
3
|
Foreign currency translation:
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are currently translated into U.S. dollars using the exchange rate as of 4:00 p.m., Eastern time, to determine the value of investments, other assets and liabilities. Purchase and sale prices of securities, and income and expenses, are translated into U.S. dollars at the prevailing rate of exchange on the respective dates of such transactions. Net unrealized foreign currency gain (loss), if any, arises from changes in the value of assets and liabilities, other than investments in securities, as a result of changes in exchange rates and is stated separately in the Statement of Operations.
|
4
|
Securities transactions and investment income:
Securities transactions are recorded on trade date for financial reporting purposes. Dividend income is recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. 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 and foreign currency transactions, if any, are recorded on the basis of identified cost and stated separately in the Statement of Operations.
|
5
|
Income tax information:
It is the policy of the 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.
|
The Fund has adopted the provisions of ASC 740 "Income Taxes" ("ASC 740"). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken, or expected to be taken, in a tax return. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as an income tax expense in the Statement of Operations. The Fund is subject to examination by U.S. federal and state tax authorities for returns filed for the prior three fiscal years 2006 - 2008. As of April 30, 2010, the Fund did not have any unrecognized tax benefits.
|
|
Income distributions and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. These differences are primarily due to differing treatments of income and gains on various investment securities held by the Fund, timing differences and differing characterization of distributions made by the Fund as a whole.
|
As determined on October 31, 2009, permanent differences resulting primarily from different book and tax accounting for amortization of bond premium, non-deductible organization expense, delayed compensation on bank loans and prior year real estate investment trust ("REITs") adjustment were reclassified at fiscal year-end. These reclassifications had no effect on net income, net asset value applicable to common shareholders or net asset value per common share of the Fund.
|
|
The tax character of distributions paid during the years ended October 31, 2009 and October 31, 2008 was as follows:
|
Distributions Paid From:
|
||||||||||||||||||||||
Ordinary Income
|
Long-Term
Capital Gain
|
Tax Return of
Capital
|
Total
|
|||||||||||||||||||
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||
$ 10,469,609 | $ 25,023,020 | $ — | $ 16,785,567 | $ 2,337,275 | $ 5,021,169 | $ 12,806,884 | $ 46,829,756 |
As of October 31, 2009, the components of distributable earnings (accumulated losses) on a U.S. federal income tax basis were as follows:
|
Undistributed
Ordinary
Income
|
Undistributed
Long-Term
Gain
|
Unrealized
Appreciation
(Depreciation)
|
Loss
Carryforwards
and Deferrals
|
Total
|
||||||||
$
|
—
|
$
|
—
|
$ (673,338 ) | $ (129,648,681 ) | $ (130,322,019 ) |
The difference between book basis and tax basis distributable earnings is attributable primarily to timing differences of distribution payments, capital loss carryforwards, wash sales, premium amortization, delayed compensation on bank loans and partnership basis adjustments.
|
|
To the extent the Fund's net realized capital gains, if any, can be offset by capital loss carryforwards, it is the policy of the Fund not to distribute such gains. As determined at October 31, 2009, the Fund had unused capital loss carryforwards available for federal income tax purposes to offset net realized capital gains, if any, as follows:
|
Expiring In:
|
|||||
2016
|
2017
|
||||
$ 100,730,426 | $ 28,918,255 |
6
|
Distributions to shareholders:
The Fund earns income, net of expenses, daily on its investments. It is the policy of the Fund to declare and pay monthly distributions to common shareholders. The Fund has adopted a policy to pay common shareholders a stable monthly distribution. The Fund's ability to satisfy its policy will depend on a number of factors, including the stability of income received from its investments, the availability of capital gains, distributions paid on preferred shares, interest paid on notes and the level of Fund expenses. In an effort to maintain a stable distribution amount, the Fund may pay distributions consisting of net investment income, realized gains and paid-in capital. There is no assurance that the Fund will always be able to pay distributions of a particular size, or that distributions will consist solely of net investment income and realized capital gains. The composition of the Fund's distributions for the calendar year 2010 will be reported to Fund shareholders on IRS Form 1099DIV. The Fund may pay distributions in excess of those required by its stable distribution policy to avoid excise tax or to satisfy the requirements of Subchapter M of the Internal Revenue Code. Distributions to common shareholders are recorded on the ex-date. Net realized capital gains, if any, will be offset to the extent of any available capital loss carryforwards. Any such offset will not reduce the level of the stable distribution paid by the Fund. Distributions to preferred shareholders are accrued and determined as described in Note A-8.
|
During part of the reporting period, the Fund invested a significant portion of its assets in securities issued by real estate companies, including REITs. The distributions the Fund receives from REITs are generally comprised of income, capital gains, and return of capital, but the REITs do not report this information to the Fund until the following calendar year. At October 31, 2009, the Fund estimated these amounts within the financial statements since the information is not available from the REITs until after the Fund's fiscal year-end. At April 30, 2010, the Fund estimated these amounts for the period January 1, 2010 to April 30, 2010 within the financial statements since the 2010 information is not available from the REITs until after the Fund's fiscal period. For the year ended October 31, 2009, the character of distributions paid to shareholders disclosed within the Statements of Changes in Net Assets is based on estimates made at that time. All estimates are based upon REIT information sources available to the Fund together with actual IRS Forms 1099DIV received to date. Based on past experience it is possible that a portion of the Fund's distributions during the current fiscal year will be considered tax return of capital but the actual amount of tax return of capital, if any, is not determinable until after the Fund's fiscal year-end. After calendar year-end, when the Fund learns the nature of the distributions paid by REITs during that year, distributions previously identified as income are often recharacterized as return of capital and/or capital gain. After all applicable REITs have informed the Fund of the actual breakdown of distributions paid to the Fund during its fiscal year, estimates previously recorded are adjusted on the books of the Fund to reflect actual results. As a result, the composition of the Fund's distributions as reported herein may differ from the final composition determined after calendar year-end and reported to Fund shareholders on IRS Form 1099DIV.
|
|
On April 30, 2010, the Fund declared a monthly distribution to common shareholders in the amount of $0.0575 per share, payable on May 28, 2010 to shareholders of record on May 17, 2010, with an ex-date of May 13, 2010. Subsequent to April 30, 2010, the Fund declared a monthly distribution to common shareholders in the amount of $0.0575 per share, payable on June 30, 2010 to shareholders of record on June 15, 2010, with an ex-date of June 11, 2010.
|
|
7 |
Expense allocation:
Certain expenses are applicable to multiple funds. Expenses directly attributable to the Fund are charged to the 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 attributable to a particular investment company (e.g., the Fund) are allocated among the Fund 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 of the investment companies in the complex or series thereof can otherwise be made fairly.
|
8 |
Financial leverage:
On June 5, 2003, the Fund re-classified 6,000 unissued shares of capital stock as Series A Auction Preferred Shares and Series B Auction Preferred Shares ("Preferred Shares"). On September 26, 2003, the Fund issued 2,510 Series A Preferred Shares and 2,510 Series B Preferred Shares. All Preferred Shares had a liquidation preference of $25,000 per share plus any accumulated unpaid distributions, whether or not earned or declared by the Fund, but excluding interest thereon ("Liquidation Value").
|
In September 2008, the Fund entered into a Master Securities Purchase Agreement and a Master Note Purchase Agreement pursuant to which it could issue privately placed notes ("PNs") and privately placed perpetual preferred shares ("PPS" and, together with PNs, "Private Securities") and use the proceeds to redeem outstanding Preferred Shares. On October 27, 2008, the Fund redeemed all of its outstanding Series A Preferred Shares, having an aggregate liquidation preference of $62,750,000. On October 29, 2008, the Fund redeemed half of its outstanding Series B Preferred Shares, having an aggregate liquidation preference of $31,375,000, and issued PNs with an aggregate principal amount of $19,000,000. On November 12, 2008, the Fund redeemed the remaining outstanding Series B Preferred Shares, having an aggregate liquidation value of $31,375,000, and issued additional PNs with an aggregate principal value of $23,400,000 and issued 595 PPS with an aggregate liquidation preference of $14,875,000. All Preferred Shares redemptions were effected at the liquidation price of $25,000 per share plus any accumulated and unpaid dividends.
|
The PNs mature in October 2013 and interest thereon is accrued daily and paid quarterly. The PPS have a liquidation preference of $25,000 per share plus any accumulated unpaid distributions, whether or not earned or declared by the Fund, but excluding interest thereon ("PPS Liquidation Value"). Distributions are accrued daily and paid quarterly for PPS. For the six months ended April 30, 2010, the distribution rates on the PPS ranged from 3.15% to 3.19% and the interest rates on the PNs ranged from 1.65% to 1.69%. The Fund has paid upfront offering and organizational expenses which are being amortized over the life of the PNs. These expenses are included in the interest expense that is reflected in the Statement of Operations.
|
|
The Fund may redeem PPS or prepay the PNs, in whole or in part, at its option after giving a minimum amount of notice to the relevant holders of the Private Securities, but will incur additional expenses if it chooses to so redeem or prepay. The Fund is also subject to certain restrictions relating to the Private Securities. Failure to comply with these restrictions could preclude the Fund from declaring any distributions to common shareholders or repurchasing common shares and/or could trigger the mandatory redemption of PPS at PPS Liquidation Value and/or mandatory prepayment of PNs at par plus accrued but unpaid interest. The holders of PPS are entitled to one vote per share and will vote with holders of common shares as a single class, except that the holders of PPS will vote separately as a class on certain matters, as required by law or the Fund's charter. The holders of the PPS, 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 the Fund if the Fund fails to pay distributions on PPS for two consecutive years.
|
|
During the year ended October 31, 2009, the Fund prepaid $5,700,000 of the aggregate principal amount of the PNs outstanding and incurred certain additional expenses in connection therewith. For the year ended October 31, 2009, the expenses amounted to $228,000.
|
|
9 |
Security lending:
A third party, eSecLending, currently serves as exclusive lending agent for the Fund. eSecLending, as agent, has assisted the Fund in conducting a bidding process to try to identify a principal that would pay a guaranteed amount to the Fund in consideration of the Fund entering into an exclusive securities lending arrangement. During the fiscal period, no principal had, and none currently has, an exclusive securities lending arrangement with the Fund; as such, the Fund is not guaranteed any particular level of income.
|
Under the securities lending arrangement, the Fund receives cash collateral at the beginning of each transaction equal to at least 102% of the prior day's market value of the loaned securities (105% in the case of international securities). The Fund may invest all the cash collateral in Neuberger Berman Securities Lending Quality Fund, LLC ("Quality Fund"), a fund managed by Neuberger Berman Fixed Income LLC ("NBFI"), an affiliate of Management, and sub-advised by Dwight Asset Management Company LLC. Quality Fund is not a money market fund that is registered under the 1940 Act and does not operate in accordance with all requirements of Rule 2a-7 under the 1940 Act. There is no assurance that Quality Fund will maintain a $1.00 share price.
|
|
The market value of the Fund's investments in Quality Fund as of the fiscal period ended April 30, 2010, if any, is reflected in the Fund's Schedule of Investments. The price at which the Fund redeems Quality Fund shares may be less than the price at which the Fund purchased those shares and so the Fund may not receive back from Quality Fund an amount that equals the amount of the collateral it received from the borrower. In such cases, the Fund would have to make up the shortfall. In addition, as a result of recent reduced liquidity in the credit and fixed income markets, it may be difficult to dispose quickly of some securities in Quality Fund at the price at which Quality Fund is carrying them.
|
|
Net income from the lending program represents any amounts received from a principal plus income earned on the cash collateral invested in Quality Fund or in other investments, if applicable, less cash collateral fees and other expenses associated with the loans. For the fiscal period ended April 30, 2010, the Fund received net income under the securities lending arrangement of approximately $7,984, which is reflected in the Statement of Operations under the caption "Income from securities loaned — net," which includes approximately $4,309 of interest income which was earned from the Quality Fund.
|
The "Receivable for collateral on securities loaned" includes $657,350 as a result of a claim for cash which was due to the Fund from stock loan transactions, but was frozen in an account after Lehman Brothers Holdings Inc. ("LBHI") filed for bankruptcy in September 2008. In the event the Fund experiences a significant delay in collecting this receivable, Management has agreed to advance the amount owed to the Fund.
|
|
10 |
Repurchase agreements:
The Fund may enter into repurchase agreements with institutions that Management has determined are creditworthy. Each repurchase agreement is recorded at cost. The Fund requires that the securities purchased in a repurchase agreement be transferred to the custodian in a manner sufficient to enable the Fund to assert a perfected security interest in those securities in the event of a default under the repurchase agreement. The Fund monitors, on a daily basis, the value of the securities transferred to ensure that their value, including accrued interest, is greater than amounts owed to the Fund under each such repurchase agreement.
|
11 |
Concentration of risk:
During part of the reporting period, the Fund's equity investments were concentrated in income-producing common equity securities, preferred securities, convertible securities and non-convertible debt securities issued by companies deriving the majority of their revenue from the ownership, construction, financing, management and/or sale of commercial, industrial, and/or residential real estate. During that time, the value of the Fund's shares may have fluctuated more due to economic, legal, cultural, geopolitical or technological developments affecting the United States real estate industry, or a segment of the United States real estate industry in which the Fund owned a substantial position, than would the shares of a fund not concentrated in the real estate industry.
|
The Fund's debt investments will be concentrated in high-yield corporate debt securities rated, at the time of investment, Ba or lower by Moody's Investors Service, Inc. or BB or lower by Standard & Poor's, or if unrated by either of those entities, determined by Management to be of comparable quality. Due to the inherent volatility and illiquidity of the high yield securities in which the Fund invests and the real or perceived difficulty of issuers of those high yield securities to meet their payment obligations during economic downturns or because of negative business developments relating to the issuer or its industry in general, the value of the Fund's shares may fluctuate more than would be the case if the Fund did not concentrate in high yield securities.
|
|
12 |
Derivative instruments:
Management has evaluated the requirements of ASC 815 "Disclosures about Derivative Instruments and Hedging Activities"("ASC 815"), which are effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. ASC 815 requires enhanced disclosures about a fund's derivative and hedging activities. Management has concluded that, since the Fund did not hold any derivative instruments during the six months ended April 30, 2010, no additional disclosures pursuant to ASC 815 are required at this time.
|
13 |
Investments in foreign securities:
Investing in foreign securities may involve certain sovereign and other risks, in addition to the credit and market risks normally associated with domestic securities. These additional risks include the possibility of adverse political and economic developments (including political instability, nationalization, expropriation, or confiscatory taxation) and the potentially adverse effects of unavailability of public information regarding issuers, less governmental supervision and regulation of financial markets, reduced liquidity of certain financial markets, and the lack of uniform accounting, auditing, and financial reporting standards or the application of standards that are different or less stringent than those applied in the United States. Foreign securities also may experience greater price volatility, higher rates of inflation, and delays in settlement.
|
14 |
Indemnifications:
Like many other companies, the Fund's organizational documents provide that its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, both in some of its principal service contracts and in the normal course of its business, the Fund enters into contracts that provide indemnifications to other parties for certain types of losses or liabilities. The Fund's maximum exposure under these arrangements is unknown as this could involve future claims against the Fund.
|
Year Ended
October 31,
|
% of Average
Daily Managed Assets
|
||||||
2010
|
0.13
|
||||||
2011
|
0.07
|
Year Ended
October 31,
|
% of Average
Daily Managed Assets
|
||||||
2010
|
0.19
|
||||||
2011
|
0.13
|
||||||
2012
|
0.07
|
Common Shares
Outstanding
|
Common Shares
Owned by Neuberger
|
||||||
14,374,332
|
6,981
|
Shares Issued on
Reinvestment of Dividends
and Distributions
|
Redemption of
Common Shares
|
Net Increase (Decrease)
in Common Shares
Outstanding
|
|||||||||||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
2010
|
2009 | |||||||||||||||||||
|
9,482 |
|
— |
|
— |
|
(3,369,533) |
|
9,482 |
|
(3,369,533)
|
Name of Issuer
|
Balance of
Shares Held
October 31,
2009
|
Gross
Purchases
and Additions
|
Gross
Sales and
Reductions
|
Balance of
Shares Held
April 30, 2010
|
Value
April 30, 2010
|
Income from
Investments
in Affiliated
Issuers Included
in Total Income
|
||||||||||||||||||
Neuberger Berman Securities
Lending Quality Fund, LLC
*
|
6,255,707
|
19,378,794
|
19,470,028
|
6,164,473
|
$
|
6,287,762
|
$
|
4,309
|
||||||||||||||||
Total
|
* |
Quality Fund, a fund managed by NBFI, an affiliate of Management, is used to invest cash the Fund receives as collateral for securities loans as approved by the Board. Because all shares of Quality Fund are held by funds in the related investment management complex, Quality Fund may be considered an affiliate of the Fund.
|
Six Months
Ended
April 30,
|
Year Ended October 31,
|
|||||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||
Common Share Net Asset Value,
Beginning of Period
|
$
|
6.48
|
$
|
4.69
|
$
|
15.26
|
$
|
18.82
|
$
|
16.37
|
$
|
16.69
|
||||||||||||
Income From Investment Operations Applicable
to Common Shareholders:
|
||||||||||||||||||||||||
Net Investment Income (Loss)
¢
|
.35
|
.58
|
1.43
|
1.38
|
1.24
|
1.07
|
||||||||||||||||||
Net Gains or Losses on Securities
(both realized and unrealized)
|
1.20
|
1.93
|
(9.36
|
)
|
(2.29
|
)
|
2.86
|
.57
|
||||||||||||||||
Common Share Equivalent of Distributions to
Preferred Shareholders From:
|
||||||||||||||||||||||||
Net Investment Income
¢
|
(.02
|
)
|
(.04
|
)
|
(.17
|
)
|
(.21
|
)
|
(.28
|
)
|
(.13
|
)
|
||||||||||||
Net Capital Gains
¢
|
—
|
—
|
(.10
|
)
|
(.16
|
)
|
(.05
|
)
|
(.07
|
)
|
||||||||||||||
Tax Return of Capital
¢
|
—
|
—
|
—
|
—
|
—
|
(.01
|
)
|
|||||||||||||||||
Total Distributions to Preferred Shareholders
|
(.02
|
)
|
(.04
|
)
|
(.27
|
)
|
(.37
|
)
|
(.33
|
)
|
(.21
|
)
|
||||||||||||
Total From Investment Operations Applicable to
Common Shareholders
|
|
|
|
|
|
|
||||||||||||||||||
1.53
|
2.47
|
(8.20
|
)
|
(1.28
|
)
|
3.77
|
1.43
|
|||||||||||||||||
Less Distributions to Common Shareholders From:
|
||||||||||||||||||||||||
Net Investment Income
|
(.35
|
)
|
(.57
|
)
|
(1.24
|
)
|
(1.30
|
)
|
(1.11
|
)
|
(1.03
|
)
|
||||||||||||
Net Capital Gains
|
—
|
—
|
(.85
|
)
|
(.98
|
)
|
(.21
|
)
|
(.61
|
)
|
||||||||||||||
Tax Return of Capital
|
—
|
(.14
|
)
|
(.28
|
)
|
—
|
—
|
(.11
|
)
|
|||||||||||||||
Total Distributions to Common Shareholders
|
(.35
|
)
|
(.71
|
)
|
(2.37
|
)
|
(2.28
|
)
|
(1.32
|
)
|
(1.75
|
)
|
||||||||||||
Accretive Effect of Tender Offer
|
—
|
.03
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Common Share Net Asset Value, End of Period
|
$
|
7.66
|
$
|
6.48
|
$
|
4.69
|
$
|
15.26
|
$
|
18.82
|
$
|
16.37
|
||||||||||||
Common Share Market Value, End of Period
|
$
|
7.54
|
$
|
5.85
|
$
|
4.40
|
$
|
13.49
|
$
|
17.22
|
$
|
14.23
|
||||||||||||
Total Return, Common Share Net Asset Value
†
|
24.52
|
%**
|
65.55
|
%
|
(61.28
|
)%
|
(7.32
|
)%
|
25.13
|
%
|
10.33
|
%
|
||||||||||||
Total Return, Common Share Market Value
†
|
35.77
|
%**
|
59.31
|
%
|
(58.91
|
)%
|
(10.46
|
)%
|
31.71
|
%
|
6.22
|
%
|
||||||||||||
Supplemental Data/Ratios
††
|
||||||||||||||||||||||||
Net Assets Applicable to Common Shareholders,
End of Period (in millions)
|
$
|
110.1
|
$
|
93.1
|
$
|
83.2
|
$
|
270.7
|
$
|
333.5
|
$
|
290.0
|
||||||||||||
Preferred Shares Outstanding, End of Period
(in millions)
¢¢
|
$
|
14.9
|
$
|
14.9
|
$
|
31.4
|
$
|
125.5
|
$
|
125.5
|
$
|
125.5
|
||||||||||||
Preferred Shares Liquidation and Market
Value Per Share
|
$
|
25,000
|
$
|
25,000
|
$
|
25,000
|
$
|
25,000
|
$
|
25,000
|
$
|
25,000
|
||||||||||||
Ratios are calculated using Average Net Assets
Applicable to Common Shareholders
|
||||||||||||||||||||||||
Ratio of Gross Expenses
#
|
2.55
|
%*
Ø
|
3.87
|
%
Ø
|
1.37
|
%
|
1.11
|
%
|
1.11
|
%
|
1.13
|
%
|
||||||||||||
Ratio of Net Expenses
‡
|
2.55
|
%*
Ø
|
3.87
|
%
Ø
|
1.36
|
%
|
1.10
|
%
|
1.10
|
%
|
1.13
|
%
|
||||||||||||
Ratio of Net Investment Income (Loss) Excluding
Preferred Share Distributions
ØØ
|
10.12
|
%*
|
12.25
|
%
|
12.94
|
%
|
7.94
|
%
|
7.18
|
%
|
6.49
|
%
|
||||||||||||
Portfolio Turnover Rate
|
86
|
%**
|
124
|
%
|
79
|
%
|
76
|
%
|
61
|
%
|
49
|
%
|
||||||||||||
Asset Coverage Per Preferred Share,
End of Period
@
|
$
|
210,194
|
$
|
181,491
|
$
|
91,277
|
$
|
78,931
|
$
|
91,462
|
$
|
82,794
|
||||||||||||
Notes Payable (in millions)
|
$
|
37
|
$
|
37
|
$
|
19
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||
Asset Coverage Per $1,000 of Notes Payable
@@
|
$
|
4,408
|
$
|
3,942
|
$
|
7,029
|
$
|
—
|
$
|
—
|
$
|
—
|
† | Total return based on per share net asset value reflects the effects of changes in net asset value on the performance of the 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 sale of common shares at the market price on the last day of the period indicated. Distributions, if any, are assumed to be reinvested at prices obtained under the Fund's distribution reinvestment plan. Results represent past performance and do not guarantee future results. Current returns may be lower or higher than the performance data quoted. Investment returns may fluctuate and shares when sold may be worth more or less than original cost. Total return would have been lower if Management had not waived a portion of the investment management fee. |
# | The Fund is required to calculate an operating expense ratio without taking into consideration any expense reductions related to expense offset arrangements. |
‡ |
After waiver of a portion of the investment management fee by Management. Had Management not undertaken such action, the annualized ratios of net operating expenses to average daily net assets applicable to common shareholders would have been:
|
Six Months
Ended April 30,
|
Year Ended October 31,
|
||||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||||
2.84 % |
4.19
|
%
|
1.77
|
%
|
1.45
|
%
|
1.45
|
%
|
1.48
|
%
|
@ | Calculated by subtracting the Fund's total liabilities (excluding accumulated unpaid distributions on PPS (Preferred Shares prior to November 12, 2008)) from the Fund's total assets and dividing by the number of PPS/Preferred Shares outstanding. |
@@ | Calculated by subtracting the Fund's total liabilities (excluding accumulated unpaid distributions on PPS (Preferred Shares prior to November 12, 2008) and the Notes payable) from the Fund's total assets and dividing by the outstanding notes payable balance. |
†† | Expense ratios do not include the effect of distribution payments to preferred shareholders. Income ratios include income earned on assets attributable to Private Securities (Preferred Shares prior to November 12, 2008) outstanding. |
¢ | Calculated based on the average number of shares outstanding during each fiscal period. |
¢¢ |
From September 26, 2003 to October 27, 2008, the Fund had 2,510 Preferred Shares Series A outstanding; and from September 26, 2003 to November 12, 2008, the Fund had 2,510 Preferred Shares Series B outstanding; since November 12, 2008, the Fund has 595 PPS outstanding (see Note A-8 of Notes to Financial Statements).
|
Ø | The annualized ratios of interest expense to average net assets applicable to common shareholders were: |
Six Months
Ended April 30,
2010
|
Year Ended
October 31,
2009
|
||||||
.61 % | 1.55 % |
ØØ | The annualized ratios of preferred share distributions to average net assets applicable to common shareholders were: |
Six Months
Ended April 30,
|
Year Ended October 31,
|
||||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||||
.47 % |
.76
|
%
|
2.46
|
%
|
2.13
|
%
|
1.89
|
%
|
1.26
|
%
|
Investment Manager and Administrator | Stock Transfer Agent |
Neuberger Berman Management LLC | The Bank of New York Mellon |
605 Third Avenue, 2nd Floor | 480 Washington Boulevard |
New York, NY 10158-0180 | Jersey City, NJ 07317 |
877.461.1899 or 212.476.8800 | |
Legal Counsel | |
Sub-Advisers | |
K&L Gates LLP | |
Neuberger Berman LLC | 1601 K Street, NW |
605 Third Avenue | Washington, DC 20006 |
New York, NY 10158-3698 | |
Independent Registered Public Accounting Firm | |
Neuberger Berman Fixed Income LLC | |
200 South Wacker Drive | Ernst & Young LLP |
Suite 2100 | 200 Clarendon Street |
Chicago, IL 60601 | Boston, MA 02116 |
Custodian | |
State Street Bank and Trust Company | |
2 Avenue de Lafayette | |
Boston, MA 02111 |
(a)
|
Based on an evaluation of the disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “Act”)) as of a date within 90 days of the filing date of this document, the Chief Executive Officer and Treasurer and Principal Financial and Accounting Officer of the Registrant have concluded that such disclosure controls and procedures are effectively designed to ensure that information required to be disclosed by the Registrant on Form N-CSR and Form N-Q is accumulated and communicated to the Registrant’s management to allow timely decisions regarding required disclosure.
|
(b)
|
There were no significant changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
|
(a)(1)
|
A copy of the Code of Ethics is incorporated by reference to the Registrant’s Form N-CSR, Investment Company Act file number 811-21334 (filed July 10, 2006).
|
(a)(2)
|
The certifications required by Rule 30a-2(a) of the Act and Section 302 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”) are filed herewith.
|
(a)(3)
|
Not applicable to the Registrant.
|
(b)
|
The certifications required by Rule 30a-2(b) of the Act and Section 906 of the Sarbanes-Oxley Act are filed herewith.
|
1 Year Neuberger Berman Income Opportunity Fund Chart |
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