THIS DOCUMENT IS A COPY OF THE FORM N-Q FILED ON SEPTEMBER 29, 2004
PURSUANT TO RULE 201, TEMPORARY HARDSHIP EXEMPTION
As filed with the Securities and Exchange Commission on September 29, 2004
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-21315
NEUBERGER BERMAN REALTY INCOME FUND, INC.
-----------------------------------------
(Exact Name of the Registrant as Specified in Charter)
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
(Address of Principal Executive Offices - Zip Code)
Registrant's telephone number, including area code: (212) 476-8800
Peter E. Sundman, Chief Executive Officer
Neuberger Berman Realty Income Fund, Inc.
605 Third Avenue, 2nd Floor
New York, New York 10158-0180
Arthur Delibert, Esq.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036-1221
(Names and addresses of agents for service)
Date of fiscal year end: October 31, 2004
Date of reporting period: July 31, 2004
Form N-Q is to be used by management investment companies to file reports with
the Commission not later than 60 days after the close of their first and third
fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of
1940 ("1940 Act")(17 CFR 270.30b1-5). The Commission may use the information
provided on Form N-Q in its regulatory, disclosure review, inspection, and
policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and
the Commission will make this information public. A registrant is not required
to respond to the collection of information contained in Form N-Q unless the
Form displays a currently valid Office of Management and Budget ("OMB") control
number. Please direct comments concerning the accuracy of the information
collection burden estimate and any suggestions for reducing the burden to
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington,
DC 20549-0609. The OMB has reviewed this collection of information under the
clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. SCHEDULE OF INVESTMENTS.
NEUBERGER BERMAN JULY 31, (UNAUDITED)
Schedule of Investments Realty Income Fund
Number of Shares Market Value+
($000's omitted)
Common Stocks (105.3%)
Apartments (15.6%)
138,200 Amli Residential Properties
Trust 3,990
531,400 Apartment Investment &
Management 16,989
430,500 Archstone-Smith Trust 12,670
464,200 Camden Property Trust 20,889
433,500 Gables Residential Trust 14,327
171,100 Home Properties 6,433
1,700 Mid-America Apartment
Communities 61
35,300 Post Properties 988
4,400 Town & Country Trust 107 ss.
49,100 United Dominion Realty Trust 952
--------
77,406
Commercial Services (0.4%)
92,000 Capital Trust 2,251
Community Centers (12.6%)
100,000 Chelsea Property Group 6,512
43,400 Developers Diversified Realty 1,557
30,000 Federal Realty Investment
Trust 1,266
221,400 Heritage Property Investment
Trust 6,080
942,400 New Plan Excel Realty Trust 22,382
331,100 Ramco-Gershenson Properties
Trust 8,513
404,700 Tanger Factory Outlet Centers 16,046
--------
62,356
Diversified (13.7%)
575,400 Colonial Properties Trust 21,865 ss.
813,100 iStar Financial 30,898 (00)
219,600 Lexington Corporate Properties
Trust 4,296 ss.
182,100 Vornado Realty Trust 10,578
--------
67,637
Health Care (15.9%)
652,800 Health Care Property Investors 16,294
382,400 Health Care REIT 12,340 ss.
157,300 Healthcare Realty Trust 5,682
563,700 Nationwide Health Properties 10,766 ss.
1,312,900 Ventas, Inc. 33,505 ss.
--------
78,587
Industrial (6.8%)
642,129 EastGroup Properties 20,824
353,000 First Industrial Realty Trust 12,934 ss.
--------
33,758
Lodging (0.4%)
51,000 Hospitality Properties Trust 2,034
Office (21.5%)
100,000 American Financial Realty
Trust 1,325
191,000 Arden Realty 5,806
385,400 Brandywine Realty Trust 10,522
290,400 CarrAmerica Realty 8,854
374,300 Equity Office Properties Trust 9,713
217,000 Glenborough Realty Trust 3,967
408,700 Highwoods Properties 9,482
341,000 HRPT Properties Trust 3,434
271,300 Kilroy Realty 9,604
132,200 Mack-Cali Realty 5,407
942,000 Maguire Properties 23,315
323,500 Prentiss Properties Trust 11,083
233,600 Trizec Properties 3,749
--------
106,261
Office - Industrial (7.4%)
149,500 Bedford Property Investors 4,185
332,200 Liberty Property Trust 12,756
704,700 Reckson Associates Realty 19,527 ss.
--------
36,468
Regional Malls (8.8%)
55,500 CBL & Associates Properties 3,058
452,700 Glimcher Realty Trust 9,806 ss.
104,700 Macerich Co. 5,015
164,000 Mills Corp. 7,478
177,600 Pennsylvania REIT 6,193
230,300 Simon Property Group 11,886
10,400 Taubman Centers 240
--------
43,676
Self Storage (2.2%)
119,700 Public Storage, Depositary
Shares 3,226
75,700 Shurgard Storage Centers 2,801 ss.
131,500 Sovran Self Storage 5,101 ss.
--------
11,128
Total Common Stocks
(Cost $ 426,032) 521,562
-------
Preferred Stocks (38.5%)
Apartments (4.4%)
7,200 Apartment Investment &
Management, Ser. Q 191
8,600 Apartment Investment &
See Notes to Schedule of Investments
Schedule of Investments Realty Income Fund cont'd
Number of Shares Market Value+
($000's omitted)
Management, Ser. R 231
138,000 Apartment Investment &
Management, Ser. T 3,370
377,800 Mid-America Apartment
Communities, Ser. H 9,634
151,300 Post Properties, Ser. A 8,305
--------
21,731
Commercial Services (0.8%)
156,000 Anthracite Capital, Ser. C 4,095
Community Centers (8.1%)
743,644 Citigroup Global Markets 28,152
66,000 Developers Diversified Realty,
Ser. I 1,654
49,600 Ramco-Gershenson Properties
Trust, Ser. B 1,324
85,500 Saul Centers, Ser. A 2,223 ss.
60,000 Urstadt Biddle Properties,
Ser. C 6,684 **
--------
40,037
Diversified (6.0%)
398,600 Crescent Real Estate Equities,
Ser. B 10,244
200,000 iStar Financial, Ser. E 4,970
580,000 Lexington Corp. Properties
Trust, Ser. B 14,668
--------
29,882
Health Care (3.8%)
685,000 Health Care REIT, Ser. D 17,468
59,000 LTC Properties, Ser. F 1,429
1,000 Nationwide Health Properties 102
--------
18,999
Industrial (0.1%)
20,000 Keystone Property Trust, Ser.
D 508
Lodging (0.7%)
81,700 Hospitality Properties Trust,
Ser. B 2,185
32,000 Host Marriott, Ser. E 834
5,300 LaSalle Hotel Properties, Ser.
A 143
--------
3,162
Office (3.6%)
23,200 Highwoods Properties, Ser. B 572
96,400 Highwoods Properties, Ser. D 2,357
50,000 HRPT Properties Trust, Ser. B 1,328
480,000 Parkway Properties, Ser. D 12,336 ss.
53,200 SL Green Realty, Ser. D 1,349
--------
17,942
Regional Malls (10.4%)
40,000 CBL & Associates Properties,
Ser. B 2,142
48,000 Glimcher Realty Trust, Ser. F 1,248
108,500 Glimcher Realty Trust, Ser. G 2,675
31,200 Mills Corp., Ser. B 822
206,200 Mills Corp., Ser. C 5,471
965,900 Mills Corp., Ser. E 25,345
225,300 Pennsylvania REIT, Ser. A 13,405
7,700 Taubman Centers, Ser. A 195
--------
51,303
Specialty (0.6%)
30,000 Capital Automotive REIT, Ser.
B 760
76,500 Entertainment Properties
Trust, Ser. A 2,054
--------
2,814
Total Preferred Stocks
(Cost $ 181,594) 190,473
--------
Principal Amount
Short-Term Investments (13.8%)
$65,742,300 N&B Securities Lending Quality
Fund, LLC 65,742 ++
2,407,988 Neuberger Berman Institutional
Cash Fund Trust Class 2,408 @
-------
Total Short-Term Investments
(Cost $68,150) 68,150 #
-------
Total Investments (157.6%)
(Cost $675,776) 780,185 ##
Liabilities, less cash, receivables
and other assets [(11.6%)] (56,993) @@
Liquidation Value of Auction
Market Preferred shares [(46.0%)] (228,000)
--------
Total Net Assets applicable to Common
Shareholders (100.0%) 495,192
--------
NEUBERGER BERMAN JULY 31, 2004 (UNAUDITED)
Notes to Schedule of Investments
--------------------------------
+ Investments in securities by Neuberger Berman Realty Income Fund Inc.
(the "Fund") are valued at the latest sales price where that price is
readily available; securities for which no sales were reported, unless
otherwise noted, are valued at the last available bid price. 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. The Fund values all other securities by a method the Board
of Directors of the Fund (the "Board") believes accurately reflects fair
value. Numerous factors may be considered when determining the fair value
of a security, including available analyst, media or other reports,
trading in futures or ADRs and whether the issuer of the security being
fair valued has other securities outstanding. Foreign security prices are
furnished by independent quotation services expressed in local currency
values. Foreign security prices are translated from the local currency
into U.S. dollars using the exchange rate as of 12:00 p.m., Eastern time.
The Board has approved the use of FT Interactive Data Corporation ("FT
Interactive") to assist in determining the fair value of the Fund's
foreign equity securities in the wake of certain significant events.
Specifically, when changes in the value of a certain index suggest that
the closing prices on the foreign exchanges no longer represent the
amount that the Fund could expect to receive for those securities, FT
Interactive will provide adjusted prices for certain foreign equity
securities based on an analysis showing historical correlations between
the prices of those securities and changes in the index. 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.
However, 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 next trades. Short-term debt securities with less than 60 days
until maturity may be valued at cost which, when combined with interest
earned, approximates market value.
# At cost, which approximates market value.
## At July 31, 2004, the cost of investments for U.S. Federal income tax
purposes was $675,776,000. Gross unrealized appreciation of investments
was $108,023,000 and gross unrealized depreciation of investments was
$3,614,000, resulting in net unrealized appreciation of $104,409,000,
based on cost for U.S. Federal income tax purposes.
** Security exempt from registration under the Securities Act of 1933. These
securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers under Rule 144A and are deemed
liquid. At July 31, 2004, these securities amounted to $6,684,000 or 1.3%
of net assets applicable to common shareholders.
(00) Security is segregated as collateral for interest rate swap contracts.
ss. All or a portion of this security is on loan.
++ Affiliated issuer.
@ Neuberger Berman Institutional Cash Fund is also managed by Neuberger
Berman Management Inc.
@@ At July 31, 2004, the Fund had outstanding interest rate swap contracts
as follows:
Rate Type
----------------------
Accrued
Payments Payments Net Interest
Swap Notional Termination made by received by Receivable Unrealized Total
Counter Party Amount Date the Fund the Fund(1) (Payable) Appreciation Fair Value
Citibank, N.A. $83,000,000 June 26, 2007 2.22% 1.45% $(10,652) $3,002,343 $2,991,691
Citibank, N.A. $82,000,000 June 26, 2008 2.58% 1.45% (15,443) 3,887,824 3,872,381
-------- --------- ---------
(26,095) 6,890,167 6,864,072
(1) 30 day LIBOR (London Interbank Offered Rate)
ITEM 2. CONTROLS AND PROCEDURES.
(a) Based on an evaluation of the disclosure controls and procedures (as
defined in rule 30a-3(c) under the Act) as of a date within 90 days of
the filing date of this document, the Chief Executive Officer and
Treasurer and Principal Financial and Accounting Officer of the
Registrant have concluded that such disclosure controls and procedures
are effectively designed to ensure that information required to be
disclosed by the Registrant is accumulated and communicated to the
Registrant's management to allow timely decisions regarding required
disclosure.
(b) There were no significant changes in the Registrant's internal controls
over financial reporting (as defined in rule 30a-3(d) under the 1940 Act)
that occurred during the Registrant's last fiscal quarter that have
materially affected, or are reasonably likely to materially affect, the
Registrant's internal control over financial reporting.
ITEM 3. EXHIBITS
The certifications required by Rule 30a-2(a) of the 1940 Act are attached
hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Neuberger Berman Realty Income Fund, Inc.
By: /s/ Peter E. Sundman
-------------------------
Name: Peter E. Sundman
Title: Chief Executive Officer
Date: September 28, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By: /s/ Peter E. Sundman
-------------------------
Name: Peter E. Sundman
Title: Chief Executive Officer
Date: September 28, 2004
By: /s/ Barbara Muinos
--------------------------
Name: Barbara Muinos
Title: Treasurer and Principal Financial
and Accounting Officer
Date: September 28, 2004