Notes to Financial Statements High Yield Strategies Fund Inc. (Unaudited)
Note ASummary of Significant Accounting Policies:
1
General:
Except where otherwise indicated, information included herein is as of April 30, 2013. The Fund was organized as a Maryland corporation on March 18, 2010, and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a non-diversified, closed-end management investment company. Management is the investment manager to the Fund. Neuberger Berman Fixed Income LLC ("NBFI") is the sub-adviser to the Fund. The Fund's common shares are listed on the NYSE MKT under the symbol NHS. After the close of business on August 6, 2010, Neuberger Berman High Yield Strategies Fund ("Old NHS") merged with and into the Fund. After Old NHS merged with and into the Fund, Neuberger Berman Income Opportunity Fund Inc. ("NOX") merged with and into the Fund. The historical performance and financial statement history prior to August 6, 2010 are those of Old NHS. For periods prior to August 6, 2010, the term the "Fund" will refer to Old NHS.
The preparation of financial statements in accordance with U.S. generally accepted accounting principles ("GAAP") 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
Securities transactions and investment income:
Security transactions are recorded on trade date for financial reporting purposes. Dividend income is recorded on the ex-dividend date. Interest income, including amortization of premium, where applicable, and accretion of discount on securities (adjusted for original issue discount, where applicable) is recorded on the accrual basis. Realized gains and losses from security transactions are recorded on the basis of identified cost and stated separately in the Statement of Operations. Included in net realized gain (loss) on investments are proceeds from the settlements of class action litigation in which the Fund participated as a class member. The amount of such proceeds for the six months ended April 30, 2013 was $18,416.
4
Income tax information:
It is the policy of the Fund to continue to qualify for treatment as a regulated investment company by complying with the requirements of the U.S. Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its net investment income and net realized capital gains to its shareholders. To the extent the Fund distributes substantially all of its net investment income and net realized capital gains to shareholders, 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 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 positions 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 2009 - 2011. As of April 30, 2013, the Fund did not have any unrecognized tax positions.
Income distributions and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. 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 determined on October 31, 2012, permanent differences resulting primarily from different book and tax accounting were reclassified at year end. Such differences may be attributed to one or more of the following: income recognized on interest rate swaps, distributions in excess of current earnings and non-deductible restructuring costs. These reclassifications had no effect on net income, net asset value ("NAV") applicable to
22
common shareholders or NAV per common share of the Fund. For the year ended October 31, 2012, the Fund recorded the following permanent reclassifications:
Paid-in Capital
|
|
Undistributed
Net Investment
Income (Loss)
|
|
Accumulated
Net Realized
Gains (Losses)
on Investments
|
|
$
|
(1,039,279
|
)
|
|
$
|
(145,745
|
)
|
|
$
|
1,185,024
|
|
|
For tax purposes, distributions of short-term gains are taxable to shareholders as ordinary income.
The tax character of distributions paid during the years ended October 31, 2012 and October 31, 2011 were as follows:
|
|
Distributions Paid From:
|
|
|
|
Ordinary Income
|
|
Long-Term
Capital Gains
|
|
Tax Return of
Capital
|
|
Total
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
$
|
22,775,640
|
|
|
$
|
25,740,851
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
22,775,640
|
|
|
$
|
25,740,851
|
|
|
As of October 31, 2012, 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
|
|
Other
Temporary
Differences
|
|
Total
|
|
$
|
|
|
|
$
|
|
|
|
$
|
10,571,382
|
|
|
$
|
(30,386,944
|
)
|
|
$
|
(78,769
|
)
|
|
$
|
(19,894,331
|
)
|
|
The difference between book basis and tax basis distributable earnings are primarily due to: timing differences of wash sales, delayed settlement compensation on bank loans, distribution payments, income recognized on interest rate swaps and capital loss carryforwards.
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. The Regulated Investment Company ("RIC") Modernization Act of 2010 (the "Act") became effective for the Fund on November 1, 2011. The Act modernizes several of the federal income and excise tax provisions related to RICs. Among the changes made are changes to the capital loss carryforward rules allowing for RICs to carry forward capital losses indefinitely and to retain the character of capital loss carryforwards as short-term or long-term ("Post-Enactment"). Rules in effect previously limited the carryforward period to eight years and all carryforwards were considered short-term in character ("Pre-Enactment"). As determined at October 31, 2012, the Fund had unused capital loss carryforwards available for federal income tax purposes to offset net realized capital gains, if any, as follows:
|
|
Pre-Enactment
|
|
|
|
Expiring in:
|
|
|
|
2015
|
|
2016
|
|
2017
|
|
|
|
$
|
14,913,177
|
(1)
|
|
$
|
10,036,834
|
(1)
|
|
$
|
5,436,933
|
|
|
(1) The capital loss carryforwards shown above include $14,913,177 and $4,971,059 expiring in 2015 and 2016, respectively, which were acquired on August 6, 2010 in the merger with NOX. The use of these losses to offset future gains may be limited.
During the year ended October 31, 2012, the Fund utilized capital loss carryforwards of $9,657,216.
5 Foreign taxes:
Foreign taxes withheld represent amounts withheld by foreign tax authorities net of refunds recoverable.
23
6 Distributions to common 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 monthly distribution amount, the Fund may pay distributions consisting of net investment income, net 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 net realized capital gains. The composition of the Fund's distributions for the calendar year 2013 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 the U.S. 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.
On April 30, 2013, the Fund declared a monthly distribution to common shareholders in the amount of $0.09 per share, payable on May 31, 2013 to shareholders of record on May 15, 2013, with an ex-date of May 13, 2013. Subsequent to April 30, 2013, the Fund declared a monthly distribution to common shareholders in the amount of $0.09 per share, payable on June 28, 2013 to shareholders of record on June 17, 2013, with an ex-date of June 13, 2013.
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 October 22, 2003, Old NHS issued 3,600 Money Market Cumulative Preferred Shares ("MMP"), each without par value, with proceeds of $90,000,000 in a public offering. On November 13, 2008, Old NHS redeemed all 3,600 MMP at the liquidation price of $25,000 per share plus any accumulated and unpaid dividends.
In September 2008, Old NHS entered into a Master Securities Purchase Agreement and a Master Note Purchase Agreement pursuant to which it could issue privately placed notes ("Old NHS PNs") and privately placed perpetual preferred shares ("Old NHS PPS"). In November 2008, Old NHS issued Old NHS PNs with an aggregate principal value of $45,900,000 and issued 492 Old NHS PPS with an aggregate liquidation preference of $12,300,000 and used those proceeds to redeem outstanding MMP.
On August 6, 2010, each of Old NHS and NOX merged with and into the Fund. In connection with the mergers, the Fund issued 1,087 Perpetual Preferred Shares, Series A ("PPS") with an aggregate liquidation preference of $27,175,000 to preferred shareholders of Old NHS and NOX in exchange for their Old NHS PPS and NOX preferred shares. In connection with the mergers, the Fund also assumed the Old NHS PNs and the notes that NOX had previously issued ("NOX Notes"). On September 30, 2010, the Fund issued privately placed notes ("PNs" and, together with PPS, "Private Securities") with an aggregate principal value of $82,600,000 to holders of Old NHS PNs and NOX Notes in exchange for their Old NHS PNs and NOX Notes.
The PNs have a maturity date of November 2013 and the interest on the PNs 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 on the PPS are accrued daily and paid quarterly. The Old NHS PNs and the Old NHS PPS had these same terms.
24
For the six months ended April 30, 2013, the distribution rate on the PPS ranged from 3.18% to 3.26% and the interest rate on the PNs ranged from 1.68% to 1.76%.
The Fund has paid up front offering and organizational expenses which are being amortized over the life of the PNs. The 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 certain expenses and/or mandatory prepayment of PNs at par plus accrued but unpaid interest and certain expenses. 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 organizational documents. The holders of 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.
9 Concentration of credit risk:
The Fund will normally invest at least 80% of its total assets in high yield debt securities of U.S. and foreign issuers, which include securities that are rated below investment grade by a rating agency or are unrated debt securities determined to be of comparable quality by the Fund's investment manager.
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 and/or price of the Fund's common shares may fluctuate more than would be the case if the Fund did not concentrate in high yield securities.
10 Derivative instruments:
During the six months ended April 30, 2013, the Fund's use of derivatives, as described below, was limited to interest rate swap contracts. The Fund has adopted the provisions of ASC 815 "Derivatives and Hedging" ("ASC 815"). The disclosure requirements of ASC 815 distinguish between derivatives that qualify for hedge accounting and those that do not. Because investment companies value their derivatives at fair value and recognize changes in fair value through the Statement of Operations, they do not qualify for hedge accounting. Accordingly, even though the Fund's investments in derivatives may represent economic hedges, they are considered non-hedge transactions for purposes of this disclosure.
Interest Rate Swaps:
The Fund entered into interest rate swap transactions, with institutions that Management has determined are creditworthy, to reduce the risk that an increase in short-term interest rates could reduce common share net earnings as a result of leverage. Under the terms of the interest rate swap contracts, the Fund agrees to pay the swap counterparty a fixed-rate payment in exchange for the counterparty's paying the Fund a variable-rate payment that is intended to approximate all or a portion of the Fund's variable-rate payment obligations on the Fund's Private Securities. The fixed-rate and variable-rate payment flows are netted against each other, with the difference being paid by one party to the other on a monthly basis. The Fund segregates cash or liquid securities having a value at least equal to the Fund's net payment obligations under any swap transaction, marked to market daily. There is no guarantee that these swap transactions will be successful in reducing or limiting risk.
Risks may arise if the counterparty to a swap contract fails to comply with the terms of its contract. The loss incurred by the failure of a counterparty is generally limited to the net interest payment to be received by the Fund and/or the termination value at the end of the contract. Additionally, risks may arise if there is no liquid market for these agreements or from movements in interest rates unanticipated by Management.
Periodic expected interim net interest payments or receipts on the swaps are recorded as an adjustment to unrealized gains/losses, along with the fair value of the future periodic payment streams on the swaps. The unrealized gains/losses associated with the periodic interim net interest payments are reclassified to realized
25
gains/losses in conjunction with the actual net receipt or payment of such amounts. The reclassifications do not impact the Fund's total net assets applicable to common shareholders or its total net increase (decrease) in net assets applicable to common shareholders resulting from operations. At April 30, 2013, the Fund had outstanding interest rate swap contracts as follows:
|
|
|
|
|
|
Rate Type
|
|
|
|
|
|
|
|
Swap
Counterparty
|
|
Notional
Amount
(1)
|
|
Termination
Date
|
|
Fixed-rate
Payments
Made by
the Fund
|
|
Variable-rate
Payments
Received by
the Fund
|
|
Accrued Net
Interest
Receivable
(Payable)
|
|
Unrealized
Appreciation
(Depreciation)
|
|
Total Fair
Value
|
|
Citibank, N.A.
|
|
$
|
25,000,000
|
|
|
March 18, 2015
|
|
|
1.677
|
%
|
|
|
.280
|
%
(2)
|
|
$
|
(41,533
|
)
|
|
$
|
(631,594
|
)
|
|
$
|
(673,127
|
)
|
|
Citibank, N.A.
|
|
|
25,000,000
|
|
|
August 9, 2015
|
|
|
1.120
|
%
|
|
|
.292
|
%
(3)
|
|
|
(46,203
|
)
|
|
|
(429,634
|
)
|
|
|
(475,837
|
)
|
|
Citibank, N.A.
|
|
|
50,000,000
|
|
|
December 7, 2015
|
|
|
1.883
|
%
|
|
|
.281
|
%
(4)
|
|
|
(355,277
|
)
|
|
|
(1,921,050
|
)
|
|
|
(2,276,327
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(443,013
|
)
|
|
$
|
(2,982,278
|
)
|
|
$
|
(3,425,291
|
)
|
|
(1) The notional amount at period end is indicative of the volume throughout the period.
(2) 90 day LIBOR at March 8, 2013.
(3) 90 day LIBOR at December 12, 2012.
(4) 90 day LIBOR at March 12, 2013.
At April 30, 2013, the Fund had the following derivatives (which did not qualify for hedge accounting under ASC 815), grouped by primary risk exposure:
Liability Derivatives
|
|
|
|
Interest Rate Risk
|
|
Statement of Assets and Liabilities Location
|
|
Interest Rate Swap Contract
|
|
$
|
(3,425,291
|
)
|
|
Interest rate swaps,
|
|
Total Value
|
|
$
|
(3,425,291
|
)
|
|
at value
(1)
|
|
(1) "Interest Rate Swap Contract" reflects the appreciation (depreciation) of the interest rate swap contract plus accrued interest as of April 30, 2013 which is reflected in the Statement of Assets and Liabilities under the caption "Interest rate swaps, at value (Note A)."
The impact of the use of these derivative instruments on the Statement of Operations during the six months ended April 30, 2013, was as follows:
Realized Gain (Loss)
|
|
|
|
Interest Rate Risk
|
|
Statement of Operations Location
|
|
Interest Rate Swap Contract
|
|
$
|
(639,762
|
)
|
|
Net realized gain (loss)
|
|
Total Realized Gain (Loss)
|
|
$
|
(639,762
|
)
|
|
on: interest rate swap contracts
|
|
Change in Appreciation (Depreciation)
|
|
|
|
Interest Rate Risk
|
|
Statement of Operations Location
|
|
Interest Rate Swap Contract
|
|
$
|
346,996
|
|
|
Change in net unrealized appreciation
|
|
Total Change in Appreciation (Depreciation)
|
|
$
|
346,996
|
|
|
(depreciation) in value of: interest rate swap contracts
|
|
11 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.
26
12 Arrangements with certain non-affiliated service providers:
Prior to January 1, 2013, the Fund had an expense offset arrangement in connection with its custodian contract. For the six months ended April 30, 2013, the impact of this arrangement was a reduction of expenses of $156.
In order to satisfy rating agency requirements and the terms of the Private Securities, the Fund is required to provide the rating agency and holders of Private Securities a report on a monthly basis verifying that the Fund is maintaining eligible assets having a discounted value equal to or greater than the basic maintenance amount, which is the minimum level set by the rating agency as one of the conditions to maintain the AAA rating on the Private Securities. "Discounted value" refers to the fact that the rating agency requires the Fund, in performing this calculation, to discount portfolio securities below their face value, at rates determined by the rating agency. The Fund pays State Street Bank and Trust Company ("State Street") for the preparation of this report, which is reflected in the Statement of Operations under the caption "Basic maintenance expense (Note A)."
State Street serves as the Fund's custodian and Computershare Shareowner Services LLC serves as the Fund's transfer agent, registrar, and dividend paying agent.
Note BManagement Fees, Administration Fees, Distribution Arrangements, and Other Transactions with Affiliates:
The Fund retains Management as its investment manager under a Management Agreement. For such investment management services, the Fund pays Management a monthly fee computed at an annual rate of 0.60% of the Fund's 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. Management is responsible for developing, implementing and supervising the Fund's investment program and providing certain administrative services to the Fund. Management has retained NBFI to serve as the sub-adviser of the Fund and to manage the Fund's investment portfolio. Management compensates NBFI for its services as sub-adviser. Management pays NBFI a monthly sub-advisory fee calculated at an annual percentage rate of 0.15% of the Fund's average daily Managed Assets.
Several individuals who are officers and/or Directors of the Fund are also employees of NBFI, Neuberger Berman LLC ("Neuberger") and/or Management.
The Fund retains Management as its administrator under an Administration Agreement. The Fund pays Management an administration fee at the annual rate of 0.05% of its average daily Managed Assets under this agreement. Additionally, Management retains State Street as its sub-administrator under a Sub-Administration Agreement. Management pays State Street a fee for all services received under the agreement.
Management and NBFI are indirect subsidiaries of Neuberger Berman Group LLC (("NBG") and together with its consolidated subsidiaries ("NB Group")). NBSH Acquisition, LLC ("NBSH"), which is owned by portfolio managers, members of the NB Group management team and certain of NB Group's key employees and senior professionals, owns, as of March 14, 2013, approximately 72% of NBG's common units, and Lehman Brothers Holdings Inc. ("LBHI") and certain of its subsidiaries (collectively the "LBHI Parties") own the remaining 28% of such common units. Pursuant to agreements among NBG, NBSH and the LBHI Parties, it is expected that NBSH will own 81% of NBG as of January 1, 2014, and has the opportunity to continue to acquire the remaining NBG Class A common units from the LBHI Parties through a process that is expected to end in 2016 (and if necessary, 2017).
Note CSecurities Transactions:
During the six months ended April 30, 2013, there were purchases and sales of long-term securities (excluding interest rate swap contracts) of $150,728,247 and $150,231,258, respectively.
27
Note DCapital:
At April 30, 2013 the common shares outstanding and the common shares of the Fund owned by Neuberger Berman Alternative Fund Management LLC ("NBAFM") and Neuberger, affiliates of Management, were as follows:
Common Shares
Outstanding
|
|
Common Shares
Owned by NBAFM
|
|
Common Shares
Owned by Neuberger
|
|
|
19,540,585
|
|
|
|
18,305
|
|
|
|
|
|
|
Transactions in common shares for the six months ended April 30, 2013 and for the year ended October 31, 2012 were as follows:
|
|
For the Six
Months Ended
April 30,
2013
|
|
For the Year Ended
October 31,
2012
|
|
Shares Issued on Reinvestment of Dividends and Distributions
|
|
|
|
|
|
|
70,802
|
|
|
Net Increase (Decrease) in Common Shares Outstanding
|
|
|
|
|
|
|
70,802
|
|
|
Note ETender Offer Program:
In 2009, the board of Old NHS, a predecessor to the Fund, authorized a semi-annual tender offer program consisting of up to four tender offers over a two-year period ("Old NHS Tender Offer Program"). Under the Old NHS Tender Offer Program, if the Fund's common shares traded at an average daily discount to NAV per share of greater than 10% during a 12-week measurement period, the Fund would have conducted a tender offer for between 5% and 20% of its outstanding common shares at a price equal to 98% of its NAV per share determined on the day the tender offer expired.
During the initial measurement period under the Old NHS Tender Offer Program, the Fund's common shares traded at an average daily discount to NAV per share of less than 10% and, therefore, in accordance with its Old NHS Tender Offer Program, the Fund did not conduct a tender offer.
After the reorganization, the Fund adopted a substantially similar tender offer program consisting of up to three tender offers over a two-year period ("Tender Offer Program"). The Tender Offer Program ended in July 2012. During the Fund's initial measurement period under the Tender Offer Program, the Fund's common shares traded at an average daily discount to NAV per share of less than 10% and, therefore, in accordance with its Tender Offer Program, the Fund did not conduct a tender offer.
During the second measurement period under the Tender Offer Program, the Fund's common shares traded at an average daily premium to NAV per share and, therefore, in accordance with its Tender Offer Program, the Fund did not conduct a tender offer. During the third and final measurement period under the Tender Offer Program, the Fund's common shares traded at an average daily premium to NAV per share and, therefore, in accordance with its Tender Offer Program, the Fund did not conduct a tender offer.
In connection with the Old NHS Tender Offer Program, Management agreed to implement a voluntary waiver of 0.05% of its investment advisory fees to offset some of the expenses associated with, or possible increases in Old NHS's expense ratio resulting from, the tender offers. This waiver terminated at the time Old NHS merged with and into the Fund. In connection with the reorganization, Management agreed to voluntarily waive a portion of its management fee at an annual rate of 0.05% of the Fund's average daily Managed Assets. The fee waiver has terminated. The Board retained the ability, consistent with its fiduciary duty, to opt out of the Tender Offer Program should circumstances arise that the Board believes could cause a material negative effect on the Fund or the Fund's shareholders.
28
Note FRecent Accounting Pronouncement:
In December 2011, the Financial Accounting Standards Board issued Accounting Standards Update 2011-11 Disclosures about Offsetting Assets and Liabilities ("ASU 2011-11"). Effective for annual reporting periods beginning on or after January 1, 2013 and interim periods within those annual periods, ASU 2011-11 is intended to enhance disclosure requirements on the offsetting of financial assets and liabilities. At this time, Management is evaluating the implications of ASU 2011-11 and its impact on the financial statements.
Note GUnaudited Financial Information:
The financial information included in this interim report is taken from the records of the Fund without audit by an independent registered public accounting firm. Annual reports contain audited financial statements.
29
High Yield Strategies Fund Inc.
The following table includes selected data for a share outstanding throughout each period and other performance information derived from the Financial Statements. Per share amounts that round to less than $.01 or $(.01) per share are presented as $.00 or $(.00), respectively.
|
|
Six Months
Ended
April 30,
|
|
Year Ended October 31,
|
|
Period from
January 1,
2010 to
October 31,
|
|
Year Ended December 31,
|
|
|
|
2013
|
|
2012
|
|
2011
|
|
2010
^^^
|
|
2009
|
|
2008
|
|
2007
^^
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share Net Asset Value,
Beginning of Period
|
|
$
|
14.03
|
|
|
$
|
13.00
|
|
|
$
|
13.82
|
|
|
$
|
12.54
|
|
|
$
|
7.42
|
|
|
$
|
13.23
|
|
|
$
|
15.05
|
|
|
Net Investment Income
¢
|
|
|
0.59
|
|
|
|
1.17
|
|
|
|
1.34
|
|
|
|
1.19
|
|
|
|
1.43
|
|
|
|
1.52
|
|
|
|
1.67
|
|
|
Net Gains or Losses on Securities
(both realized and unrealized)
|
|
|
0.87
|
|
|
|
1.03
|
|
|
|
(0.83
|
)
|
|
|
1.20
|
|
|
|
4.97
|
|
|
|
(5.74
|
)
|
|
|
(1.34
|
)
|
|
Common Share Equivalent of Distributions to
Preferred Shareholders From:
|
|
Net Investment Income
¢
|
|
|
(0.02
|
)
|
|
|
(0.05
|
)
|
|
|
(0.05
|
)
|
|
|
(0.03
|
)
|
|
|
(0.04
|
)
|
|
|
(0.27
|
)
|
|
|
(0.40
|
)
|
|
Net Capital Gains
¢
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.01
|
)
|
|
Total Distributions to Preferred
Shareholders
|
|
|
(0.02
|
)
|
|
|
(0.05
|
)
|
|
|
(0.05
|
)
|
|
|
(0.03
|
)
|
|
|
(0.04
|
)
|
|
|
(0.27
|
)
|
|
|
(0.41
|
)
|
|
Total From Investment Operations
Applicable to Common Shareholders
|
|
|
1.44
|
|
|
|
2.15
|
|
|
|
0.46
|
|
|
|
2.36
|
|
|
|
6.36
|
|
|
|
(4.49
|
)
|
|
|
(0.08
|
)
|
|
Less Distributions to Common
Shareholders From:
|
|
Net Investment Income
|
|
|
(0.54
|
)
|
|
|
(1.12
|
)
|
|
|
(1.28
|
)
|
|
|
(1.08
|
)
|
|
|
(1.26
|
)
|
|
|
(1.22
|
)
|
|
|
(1.69
|
)
|
|
Net Capital Gains
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.05
|
)
|
|
Tax Return of Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.10
|
)
|
|
|
|
|
|
Total Distributions to
Common Shareholders
|
|
|
(0.54
|
)
|
|
|
(1.12
|
)
|
|
|
(1.28
|
)
|
|
|
(1.08
|
)
|
|
|
(1.26
|
)
|
|
|
(1.32
|
)
|
|
|
(1.74
|
)
|
|
Accretive Effect of Tender Offer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
Common Share Net Asset
Value, End of Period
|
|
$
|
14.93
|
|
|
$
|
14.03
|
|
|
$
|
13.00
|
|
|
$
|
13.82
|
|
|
$
|
12.54
|
|
|
$
|
7.42
|
|
|
$
|
13.23
|
|
|
Common Share Market Value,
End of Period
|
|
$
|
14.15
|
|
|
$
|
14.18
|
|
|
$
|
13.55
|
|
|
$
|
14.04
|
|
|
$
|
11.95
|
|
|
$
|
6.38
|
|
|
$
|
11.82
|
|
|
Total Return, Common Share
Net Asset Value
†
|
|
|
10.57
|
%**
|
|
|
17.24
|
%
|
|
|
3.34
|
%
|
|
|
19.78
|
%**
|
|
|
92.44
|
%
|
|
|
(35.32
|
)%
|
|
|
(.13
|
)%
|
|
Total Return, Common Share
Market Value
†
|
|
|
3.69
|
%**
|
|
|
13.68
|
%
|
|
|
6.03
|
%
|
|
|
27.69
|
%**
|
|
|
113.27
|
%
|
|
|
(37.75
|
)%
|
|
|
(11.54
|
)%
|
|
Ratios/Supplemental Data
††
|
|
Ratios are Calculated Using
Average Net Assets
|
|
Applicable to Common Shareholders
|
|
Ratio of Gross Expenses
#
|
|
|
1.69
|
%*
Ø
|
|
|
1.81
|
%
Ø
|
|
|
1.75
|
%
Ø
|
|
|
2.02
|
%*
Ø
|
|
|
2.65
|
%
Ø
|
|
|
1.81
|
%
Ø
|
|
|
1.44
|
%
|
|
Ratio of Net Expenses
|
|
|
1.69
|
%*
§Ø
|
|
|
1.76
|
%
§Ø
|
|
|
1.68
|
%
§Ø
|
|
|
1.95
|
%*
§Ø‡‡
|
|
|
2.60
|
%
§Ø
|
|
|
1.80
|
%
§Ø
|
|
|
1.44
|
%
§
|
|
Ratio of Net Investment Income
|
|
|
8.31
|
%*
|
|
|
8.79
|
%
|
|
|
9.86
|
%
|
|
|
11.02
|
%*
|
|
|
14.30
|
%
|
|
|
13.43
|
%
|
|
|
11.33
|
%
|
|
Portfolio Turnover Rate
|
|
|
39
|
%**
|
|
|
94
|
%
|
|
|
100
|
%
|
|
|
130
|
%**
ØØ
|
|
|
159
|
%
|
|
|
122
|
%
|
|
|
129
|
%
|
|
Net Assets Applicable to Common
Shares, End of Period (000's)
|
|
$
|
291,655
|
|
|
$
|
274,136
|
|
|
$
|
253,170
|
|
|
$
|
267,819
|
|
|
$
|
138,293
|
|
|
$
|
90,907
|
|
|
$
|
162,091
|
|
|
Perpetual Preferred Shares
¢¢
|
|
Preferred Shares Outstanding,
End of Period (000's)
|
|
$
|
27,175
|
|
|
$
|
27,175
|
|
|
$
|
27,175
|
|
|
$
|
27,175
|
|
|
$
|
12,300
|
|
|
$
|
12,300
|
|
|
$
|
90,000
|
|
|
Asset Coverage Per Share
@
|
|
$
|
293,387
|
|
|
$
|
277,268
|
|
|
$
|
257,980
|
|
|
$
|
271,454
|
|
|
$
|
306,086
|
|
|
$
|
209,943
|
|
|
$
|
70,107
|
|
|
Liquidation Value Per Share
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
Notes Payable
|
|
Notes Payable Outstanding,
End of Period (000's)
|
|
$
|
82,600
|
|
|
$
|
82,600
|
|
|
$
|
82,600
|
|
|
$
|
82,600
|
|
|
$
|
45,900
|
|
|
$
|
45,900
|
|
|
$
|
|
|
|
Asset Coverage Per $1,000 of
Notes Payable
@@
|
|
$
|
4,861
|
|
|
$
|
4,649
|
|
|
$
|
4,395
|
|
|
$
|
4,572
|
|
|
$
|
4,281
|
|
|
$
|
3,250
|
|
|
$
|
|
|
|
See Notes to Financial Highlights
30
Notes to Financial Highlights High Yield Strategies Fund Inc. (Unaudited)
†
Total return based on per share NAV reflects the effects of changes in NAV 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 sales 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 indicate 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 certain expenses.
Had the Fund not received class actions proceeds, the total return based on per share NAV for the year ended October 31, 2012 would have been 16.99%. The class action proceeds listed in Note A-3 had no impact on total return.
# Represents the annualized ratios of net expenses to average daily net assets if Management had not waived a portion of the investment management fee.
§
After waiver of a portion of the investment management fee by Management. The Fund is required to calculate an expense ratio without taking into consideration any expense reductions related to expense offset arrangements. Had the Fund not received expense reductions related to expense offset arrangements, the annualized net expenses to average daily net assets would have been:
|
|
Six Months
Ended April 30,
|
|
Year Ended
October 31,
|
|
Period from
January 1, 2010
to October 31,
|
|
Year Ended October 31,
|
|
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
|
|
|
|
|
1.69
|
%
|
|
|
1.76
|
%
|
|
|
1.68
|
%
|
|
|
1.95
|
%
|
|
|
2.60
|
%
|
|
|
1.80
|
%
|
|
|
1.44
|
%
|
|
@ Calculated by subtracting the Fund's total liabilities (excluding accumulated unpaid distributions on PPS (Old NHS's PPS prior to August 6, 2010 and MMP prior to November 13, 2008)) from the Fund's total assets and dividing by the number of PPS/MMP outstanding.
@@ Calculated by subtracting the Fund's total liabilities (excluding accumulated unpaid distributions on PPS (Old NHS's PPS prior to August 6, 2010 and MMP prior to November 13, 2008) and Notes payable (the Old NHS Notes payable prior to September 29, 2010)) 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 PPS (MMP prior to November 13, 2008) outstanding. Income ratios also include the effect of interest expense from the PNs.
¢
Calculated based on the average number of shares outstanding during each fiscal period.
^^ Effective February 28, 2007, Management became the investment adviser.
¢¢
From October 22, 2003 to November 13, 2008, the Fund had 3,600 MMP outstanding; from November 14, 2008 to August 6, 2010, the Fund had 492 Old NHS PPS outstanding. Since August 6, 2010, the Fund has 1,087 PPS outstanding (see Note A-8 to Financial Statements).
Ø
Interest expense is included in expense ratios. The annualized ratio of interest expense to average net assets applicable to common shareholders was:
|
|
Six Months
Ended April 30,
|
|
Year Ended
October 31,
|
|
Period from
January 1, 2010
to October 31,
|
|
Year Ended
December 31,
|
|
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
|
|
|
|
|
.59
|
%
|
|
|
.69
|
%
|
|
|
.61
|
%
|
|
|
.63
|
%
|
|
|
1.05
|
%
|
|
|
.16
|
%
|
|
* Annualized.
** Not Annualized.
^^^ The Fund's fiscal year end changed from December 31 to October 31.
ØØ
Portfolio turnover excludes purchases and sales by NOX (which merged with and into the Fund on August 6, 2010) prior to the merger date.
‡‡
Includes merger related expenses. If such expenses were not included, the annualized ratio of net expenses to average net assets applicable to common shareholders for the period ended October 31, 2010 would have been 1.81%.
31
Distribution Reinvestment Plan
Computershare Trust Company, N.A (the "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 Distribution 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 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 or distribution 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 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
32
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.
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 are governed by the laws of the State of Maryland.
Reinvested dividends and distributions are taxed in the same manner as cash dividends and distributions i.e., reinvestment in additional Shares does not relieve shareholders of, or defer the need to pay, any income tax that may be payable (or that is required to be withheld) on Fund dividends and distributions. Participants should contact their tax professionals for information on how the Plan impacts their personal tax situation. For additional information about the Plan, please contact the Plan Agent at 1-866-227-2136 or 480 Washington Boulevard, Jersey City, NJ 07317.
33
Investment Manager and Administrator
Neuberger Berman Management LLC
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
877.461.1899 or 212.476.8800
Sub-Adviser
Neuberger Berman Fixed Income LLC
200 South Wacker Drive
Suite 2100
Chicago, IL 60601
Custodian
State Street Bank and Trust Company
2 Avenue de Lafayette
Boston, MA 02111
Stock Transfer Agent
Computershare Shareowner Services LLC
480 Washington Boulevard
Jersey City, NJ 07310
Plan Agent
Computershare Trust Company N.A.
250 Royall Street
Canton, MA 02021
Legal Counsel
K&L Gates LLP
1601 K Street, NW
Washington, DC 20006
Independent Registered Public Accounting Firm
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
34
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, by calling 800-877-9700 (toll-free) and on the website of the Securities and Exchange Commission at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is also available, without charge, by calling 800-877-9700 (toll-free), on the website of the Securities and Exchange Commission at www.sec.gov, and on Management's website at www.nb.com.
Quarterly Portfolio Schedule
The Fund files a complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund's 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, D.C. Information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330. The information on Form N-Q is available upon request, without charge, by calling 800-877-9700 (toll-free).
35
FACTS
|
|
WHAT DOES NEUBERGER BERMAN
DO WITH YOUR PERSONAL INFORMATION?
|
|
Why?
|
|
Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
|
|
What?
|
|
The types of personal information we collect and share depend on the product or service you have with us. This information can include:
n
Social Security number and account balances
n
income and transaction history
n
credit history and credit scores
When you are
no longer
our customer, we continue to share your information as described in this notice.
|
|
How?
|
|
All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons Neuberger Berman chooses to share; and whether you can limit this sharing.
|
|
Reasons we can share your personal information
|
|
Does Neuberger
Berman share?
|
|
Can you limit this sharing?
|
|
For our everyday business purposes
such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus
|
|
Yes
|
|
No
|
|
For our marketing purposes
to offer our products and services to you
|
|
Yes
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|
No
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|
For joint marketing with other financial companies
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|
No
|
|
We don't share
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|
For our affiliates' everyday business purposes
information about your transactions and experiences
|
|
Yes
|
|
No
|
|
For our affiliates' everyday business purposes
information about your creditworthiness
|
|
No
|
|
We don't share
|
|
For nonaffiliates to market to you
|
|
No
|
|
We don't share
|
|
Questions?
Call 800.223.6448
This is not part of the Fund's shareholder report.
Page 2
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Who we are
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Who is providing this notice?
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Entities within the Neuberger Berman family of companies, mutual funds, and private investment funds.
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What we do
|
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How does Neuberger Berman protect my personal information?
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|
To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.
We restrict access to customer information to those employees who need to know such information in order to perform their job responsibilities.
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How does Neuberger Berman collect my personal information?
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We collect your personal information, for example, when you
n
open an account or provide account information
n
seek advice about your investments or give us your income information
n
give us your contact information
We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
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|
Why can't I limit all sharing?
|
|
Federal law gives you the right to limit only
n
sharing for affiliates' everyday business purposes information about your creditworthiness
n
affiliates from using your information to market to you
n
sharing for nonaffiliates to market to you
State laws and individual companies may give you additional rights to limit sharing.
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Definitions
|
|
Affiliates
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|
Companies related by common ownership or control. They can be financial and nonfinancial companies.
n
Our affiliates include companies with a Neuberger Berman name; financial companies, such as investment advisers, broker dealers; mutual funds, and private investment funds.
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Nonaffiliates
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Companies not related by common ownership or control. They can be financial and nonfinancial companies.
n
Nonaffiliates we share with can include companies that perform administrative services on our behalf (such as vendors that provide data processing, transaction processing, and printing services) or other companies such as brokers, dealers, or counterparties in connection with servicing your account.
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Joint marketing
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A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
n
Neuberger Berman doesn't jointly market.
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Neuberger Berman Management LLC
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
Internal Sales & 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 Fund. This report is prepared for the general information of shareholders and is not an offer of shares of the Fund.
H0547 06/13