As filed with the Securities and Exchange Commission on July 2, 2015

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-22396

(Exact Name of Registrant as specified in charter)

c/o Neuberger Berman Management LLC

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

Robert Conti

Chief Executive Officer and President

Neuberger Berman High Yield Strategies Fund Inc.

c/o Neuberger Berman Management LLC

605 Third Avenue, 2nd Floor

New York, New York 10158-0180

Arthur C. Delibert, Esq.

K&L Gates LLP

1601 K Street, N.W.

Washington, D.C. 20006-1600

(Names and Addresses of agents for service)

Date of fiscal year end: October 31

Date of reporting period: April 30, 2015

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940, as amended (“Act”) (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

---

Item 1. Report to Stockholders.

The following is a copy of the semi-annual report transmitted to stockholders pursuant to Rule 30e-1 under the Act.

				Neuberger Berman High Yield Strategies Fund Inc.
				Semi-Annual Report April 30, 2015

				Contents
				PRESIDENT’S LETTER		1
				PORTFOLIO COMMENTARY		2
				SCHEDULE OF INVESTMENTS		6
				FINANCIAL STATEMENTS		19
				FINANCIAL HIGHLIGHTS/PER SHARE DATA		31
				Distribution Reinvestment Plan		33
				Directory		36
				Proxy Voting Policies and Procedures		37
				Quarterly Portfolio Schedule		37
				Privacy Notice	Located after the Fund’s Report

The “Neuberger Berman” name and logo are registered service marks of Neuberger Berman Group LLC. “Neuberger Berman Management LLC” and the individual Fund name in this piece are either service marks or registered service marks of Neuberger Berman Management LLC. ©2015 Neuberger Berman Management LLC. All rights reserved.

President’s Letter

Dear Stockholder,

I am pleased to present the semi-annual report for Neuberger Berman High Yield Strategies Fund Inc. for the six months ended April 30, 2015. The report includes a portfolio commentary, a listing of the Fund’s investments and its unaudited financial statements for the reporting period.

The Fund seeks high total return (income plus capital appreciation). To pursue that objective, we have assembled a portfolio that consists primarily of high yield debt securities.

On March 31, 2015, Neuberger Berman High Yield Strategies Fund Inc. announced a change in its monthly distribution rate payable to $0.08 per share of common stock, which represents a $0.01 reduction per share. The change was reflected in the Fund’s April 30, 2015 distribution. The decrease in distribution rate was the result of numerous factors, including the general decline in the absolute level of yields available as well as the degree of credit spread tightening that has occurred in the high yield market.

Thank you for your confidence in the Fund. We will do our best to continue earning your trust in the years to come.

Sincerely,

Robert Conti
President and CEO
Neuberger Berman High Yield Strategies Fund Inc.

1

Neuberger Berman High Yield Strategies Fund Inc. Portfolio Commentary

Neuberger Berman High Yield Strategies Fund Inc. generated a 2.08% total return on a net asset value (NAV) basis for the six months ended April 30, 2015 and outperformed its benchmark, the BofA Merrill Lynch U.S. High Yield Master II Constrained Index, which provided a 1.52% return for the period. (Fund performance on a market price basis is provided in the table immediately following this letter.) The use of leverage (typically a performance enhancer in up markets and a detractor during market retreats) was beneficial for performance.

Despite several setbacks, the overall fixed income market posted a positive return over the six month period ended April 30, 2015. Short-term Treasury yields moved higher as the market anticipated a U.S. Federal Reserve (Fed) interest rate hike in 2015. In contrast, longer-term rates declined given a number of flights to quality triggered by geopolitical issues and concerns over global growth. The high yield market experienced periods of elevated volatility during the reporting period, partially due to a sharp decline and subsequent rally in the energy sector. Within the benchmark, CCC-rated securities (a relatively low rating) and BB-rated securities (rated higher) returned -0.67% and 2.38%, respectively.

From a sector perspective, security selection in support services, an underweight, relative to the benchmark, to metals & mining and security selection in gaming and hotels contributed the most to the Fund’s performance. Conversely, an underweight to banking, security selection in utilities and an underweight to food/beverage/tobacco detracted the most from performance.

The Fund’s lower-quality bias was generally positive for performance.

We made several adjustments to the portfolio during the reporting period. We reduced the Fund’s allocation to BB-rated bonds while increasing its exposure to CCC and lower-rated securities. From a sector perspective, we increased the Fund’s allocations to gaming and hotels, health care and gas distribution. Conversely, we reduced its exposures to metals & mining and aerospace & defense.

Interest rate swaps, which were used to manage the Fund’s interest rate exposure, detracted from performance during the reporting period.

We continue to have a positive outlook for the high yield market. In our view, fundamentals remain largely intact. Corporate balance sheets appear strong overall and many issuers have taken advantage of low interest rates to refinance their debt and push back their maturities. These factors, coupled with what we believe could be continued growth in the U.S., could allow the vast majority of lower-quality companies to meet their debt obligations. Against this backdrop, we think high yield defaults could be approximately 2.5% in 2015, versus a long-term average of 3.8%. Still, there could be periods of heightened volatility as investors react to incoming economic data, shifting Fed monetary policy and geopolitical events. This, in turn, could impact the demand for high yield securities.

Sincerely,

Ann H. Benjamin,* Thomas P. O’Reilly, Russ Covode and Daniel Doyle
Portfolio Co-Managers

* As previously disclosed, Ann Benjamin recently announced she intends to retire on December 31, 2015 after a 35-year career and 18 years at Neuberger Berman.

The portfolio composition, industries and holdings of the Fund are subject to change.

The opinions expressed are those of the Fund’s portfolio managers. The opinions are as of the date of this report and are subject to change without notice.

The value of securities owned by the Fund, as well as the market value of shares of the Fund’s common stock, may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Fund; conditions affecting the general economy; overall market changes; local, regional, national or global political, social or economic instability; regulatory or legislative developments; price, currency and interest rate fluctuations, including those resulting from changes in central bank policies; and changes in investor sentiment.

2

3

Endnotes

1	The performance information for periods prior to August 6, 2010 is that of Neuberger Berman High Yield Strategies Fund, a predecessor to the Fund.
2	Returns based on the NAV of the Fund.
3	Returns based on the market price of shares of the Fund’s common stock on the NYSE MKT.
4	Please see “Description of Index” on page 5 for a description of the index.

For more complete information on Neuberger Berman High Yield Strategies Fund Inc., call Neuberger Berman Management LLC at (800) 877-9700, or visit our website at www.nb.com.

4

Description of Index

BofA Merrill Lynch U.S. High Yield Master II Constrained Index:

The index tracks the performance of U.S. dollar-denominated below investment grade corporate debt publicly issued in the U.S. domestic market. In addition to meeting other criteria, qualifying securities must have a below investment grade rating (based on an average of Moody’s, S&P and Fitch ratings), and have risk exposure to countries that are members of the FX-G10, Western Europe or territories of the U.S. and Western Europe. Securities in legal default are excluded from the index. Index constituents are capitalization-weighted, provided the total allocation to an individual issuer does not exceed 2%.

Please note that the index does not take into account any fees and expenses or any tax consequences of investing in individual securities that it tracks and that individuals cannot invest directly in any index. Data about the performance of this index are prepared or obtained by Management and include reinvestment of all income dividends and other distributions, if any. The Fund may invest in securities not included in the above described index and generally does not invest in all securities included in the index.

5

PRINCIPAL AMOUNT				VALUE †
Bank Loan Obligationsµ (8.9%)
Aerospace & Defense (0.1%)
$	190,000		Transdigm Inc., First Lien Term Loan D, due 6/4/21		$	190,296	¢^^
Automotive (0.2%)
	567,600		Navistar, Inc., First Lien Term Loan B, 5.75%, due 8/17/17			570,086
Business Equipment & Services (1.6%)
	95,000		Acosta Inc., First Lien Term Loan B, due 9/26/21			95,722	¢^^
	190,000		Advantage Sales and Marketing, First Lien Term Loan, due 7/23/21			190,570	¢^^
	1,920,000		Advantage Sales and Marketing, Second Lien Term Loan, 7.50%, due 7/25/22			1,927,200	¢^^
	2,090,000		Presidio, First Lien Term Loan B, 6.25%, due 1/22/22			2,105,675
						4,319,167
Containers & Glass Products (0.0%)
	95,000		Berry Plastics, First Lien Term Loan E, due 1/6/21			95,257	¢^^
Drugs (0.1%)
	190,000		Valeant Pharmaceuticals, First Lien Term Loan F1, due 4/1/22			191,231	¢^^
Electronics - Electrical (0.6%)
	1,184,624		Avago Technologies, First Lien Term Loan B, 3.75%, due 5/6/21			1,189,564
	450,000		Riverbed Technology, First Lien Term Loan B, due 2/25/22			454,725	¢^^
						1,644,289
Financial Intermediaries (0.3%)
	896,722		Walter Investment Mgmt, First Lien Term Loan, 4.75%, due 12/18/20			855,626
Health Care (2.8%)
	1,970,000		Tenet Healthcare Corp., Secured Bridge Loan, due 4/1/16			1,970,000	Ñf¢^^
	5,900,000		Tenet Healthcare Corp., Unsecured Bridge Loan, due 4/1/16			5,900,000	Ñf¢^^
						7,870,000
Lodging & Casinos (2.5%)
	1,531,865		Centaur Acquisition, LLC, Second Lien Term Loan, 8.75%, due 2/20/20			1,540,796	Ñ
	1,759,000		Four Seasons Holdings Inc., Second Lien Term Loan, 6.25%, due 12/27/20			1,769,994	Ñ
	3,134,275		Mohegan Tribal Gaming, Term Loan B, 5.50%, due 11/19/19			3,119,167
	273,247		Scientific Games Corp., First Lien Term Loan B-2, 6.00%, due 10/1/21			275,979
	190,000		Twin Rivers Casino, First Lien Term Loan B, due 7/10/20			189,951	¢^^
						6,895,887
Publishing (0.2%)
	555,000		Tribune Company, First Lien Term Loan, 4.00%, due 12/27/20			557,431	¢^^
Radio & Television (0.1%)
	95,000		Univision Communications Inc., First Lien Term Loan C-3, due 3/1/20			95,030	¢^^
	95,000		Univision Communications Inc., First Lien Term Loan C-4, due 3/1/20			95,052	¢^^
						190,082

See Notes to Schedule of Investments

6

Corporate Debt Securities. Inputs used to value corporate debt securities generally include relative credit information, observed market movements, sector news, spread to the U.S. Treasury market, and other market information, which may include benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers, and reference data, such as market research publications, when available (“Other Market Information”).

High Yield Securities. Inputs used to value high yield securities generally include a number of observations of equity and credit default swap curves related to the issuer and Other Market Information.

The value of bank loan obligations is determined by Management primarily by obtaining valuations from independent pricing services based on broker quotes (generally Level 2 or Level 3 inputs depending on the number of quotes available). The value of interest rate swap contracts is determined by Management primarily by obtaining valuations from independent pricing services based on references to the underlying rates including the overnight index swap rate and London Interbank Offered Rate (“LIBOR”) forward rate to produce the daily settlement price (generally Level 2 inputs). Management has developed a process to periodically review information provided by independent pricing services for all types of securities.

See Notes to Financial Statements

16

Asset Valuation Inputs

Investments:		Level 1		Level 2			Level 3§			Total
Bank Loan Obligations
Lodging & Casinos		$—		$	5,125,893		$	1,769,994		$	6,895,887
Other Bank Loan Obligations^		—			17,621,774			—			17,621,774
Total Bank Loan Obligations		—			22,747,667			1,769,994			24,517,661
Corporate Debt Securities^		—			367,575,718			—			367,575,718
Short-Term Investments		—			13,269,229			—			13,269,229
Total Investments		$—		$	403,592,614		$	1,769,994		$	405,362,608

^	The Schedule of Investments provides information on the industry categorization for the portfolio.
§	The following is a reconciliation between the beginning and ending balances of investments in which unobservable inputs (Level 3) were used in determining value:

																							Net change in
																							unrealized
																							appreciation/
																							(depreciation)
									Change														from
		Beginning			Accrued				in unrealized							Transfers		Transfers					investments
		balance,			discounts/		Realized		appreciation/							into		out of		Balance as			still held as of
		as of 11/1/14			(premiums)		gain/(loss)		(depreciation)			Purchases		Sales		Level 3		Level 3		of 4/30/15			4/30/15
Investments in
Securities
Bank Loan
Obligations
Lodging & Casinos		$	1,763,397		$ —		$ —		$	6,597		$ —		$ —		$ —		$ —		$	1,769,994		$	6,597
Total		$	1,763,397		$ —		$ —		$	6,597		$ —		$ —		$ —		$ —		$	1,769,994		$	6,597

These securities categorized as Level 3 are valued based on a single quotation obtained from a dealer. The Fund does not have access to unobservable inputs and therefore cannot disclose inputs used in formulating such quotation. As of the six months ended April 30, 2015, no securities were transferred from one level (as of October 31, 2014) to another.

See Notes to Financial Statements

17

The following is a summary, categorized by Level, of inputs used to value the Fund’s derivatives as of April 30, 2015:

Asset Valuation Inputs

		Level 1		Level 2			Level 3		Total
Centrally cleared interest rate swap contracts		$—		$	60,514		$—		$60,514
Total		$—		$	60,514		$—		$60,514

Liability Valuation Inputs

		Level 1		Level 2				Level 3			Total
Over the counter interest rate swap contracts		$—		$	(921,282	)		$—		$	(921,282	)
Centrally cleared interest rate swap contracts		—			(310,054	)		—			(310,054	)
Total		$—		$	(1,231,336	)		$—		$	(1,231,336	)

##	At April 30, 2015, the cost of investments for U.S. federal income tax purposes was $404,865,340. Gross unrealized appreciation of investments was $9,590,378 and gross unrealized depreciation of investments was $9,093,110, resulting in net unrealized appreciation of $497,268 based on cost for U.S. federal income tax purposes.
ñ	Securities were purchased under Rule 144A of the Securities Act of 1933, as amended (the “1933 Act”), or are private placements and, unless registered under the 1933 Act or exempted from registration, may only be sold to qualified institutional investors. These securities have been deemed by the investment manager to be liquid. At April 30, 2015, these securities amounted to $105,527,537 or 38.3% of net assets applicable to common stockholders.
Ñ	These securities have been deemed by the investment manager to be illiquid. At April 30, 2015 these securities amounted to $11,180,790 or 4.1% of net assets applicable to common stockholders.
ØØ	All or a portion of this security is segregated in connection with obligations for when-issued security purchase commitments and/or interest rate swap contracts and/or delayed delivery purchase commitments. In addition, the Fund had deposited $1,764,661 in a segregated account for interest rate swap contracts.
Ø	All or a portion of this security was purchased on a when-issued basis. At April 30, 2015 these securities amounted to $3,007,200 or 1.1% of net assets applicable to common stockholders.
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, 2015, and their final maturities.
c	Payment-in-kind (PIK) security for which part of the income earned may be paid as additional principal.
f	Value of the security was determined using methods the Board has approved in the good-faith belief that the resulting valuation will reflect the fair value of the security.
¢	All or a portion of this security was purchased on a delayed delivery basis.
^^	All or a portion of this security has not settled as of April 30, 2015 and thus does not have an interest rate in effect. Interest rates do not take effect until settlement.
a	Step Bond: Coupon rate is a fixed rate for an initial period that either resets at a specific date or may reset in the future contingent upon a rating change made by a rating agency.
b	See Note A-10 in the Notes to Financial Statements for the Fund’s open positions in derivatives at April 30, 2015.

See Notes to Financial Statements

18

Neuberger Berman

		HIGH YIELD
		STRATEGIES
		FUND INC.
		April 30, 2015
Assets
Investments in securities, at value * (Note A)-see Schedule of Investments:
Unaffiliated issuers			$405,362,608
Cash collateral segregated for interest rate swap contracts			1,764,661
Interest receivable			6,839,620
Receivable for securities sold			2,731,955
Prepaid expenses and other assets			193,197
Total Assets			416,892,041
Liabilities
Notes payable (Note A)			90,000,000
Mandatory Redeemable Preferred Shares Series B ($25,000 liquidation value per share;
1,400 shares issued and outstanding) (Note A)			35,000,000
Over the counter interest rate swap contracts, at value (Note A)			921,282
Payable for variation margin on centrally cleared interest rate swap contracts (Note A)			271,013
Distributions payable-preferred shares			80,633
Distributions payable-common stock			28,468
Payable for securities purchased			14,308,575
Payable to investment manager (Note B)			197,663
Payable to administrator (Note B)			16,472
Payable to directors			1,117
Interest payable			114,344
Accrued expenses and other payables			139,107
Total Liabilities			141,078,674
Net Assets applicable to Common Stockholders			$275,813,367
Net Assets applicable to Common Stockholders consist of:
Paid-in capital-common stock			$292,263,935
Distributions in excess of net investment income			199,434
Accumulated net realized gains (losses) on investments			(15,940,506	)
Net unrealized appreciation (depreciation) in value of investments			(709,496	)
Net Assets applicable to Common Stockholders			$275,813,367
Shares of Common Stock Outstanding ($0.0001 par value; 999,999,997,100 shares authorized)			19,540,585
Net Asset Value Per Share of Common Stock Outstanding			$14.11
* Cost of Investments			$404,901,282

See Notes to Financial Statements

19

Neuberger Berman

		HIGH YIELD
		STRATEGIES
		FUND INC.
		For the Six Months
		Ended April 30, 2015
Investment Income:
Income (Note A):
Interest income-unaffiliated issuers			$12,754,314
Expenses:
Investment management fees (Note B)			1,183,834
Administration fees (Note B)			98,653
Audit fees			31,662
Basic maintenance expense (Note A)			19,836
Custodian and accounting fees			80,448
Insurance expense			6,295
Legal fees			43,308
Stockholder reports			27,187
Stock exchange listing fees			3,328
Stock transfer agent fees			12,317
Interest expense (Note A)			667,856
Distributions to mandatory redeemable preferred shareholders (Note A)			466,581
Directors' fees and expenses			15,959
Miscellaneous			13,985
Total net expenses			2,671,249
Net investment income (loss)			$10,083,065
Realized and Unrealized Gain (Loss) on Investments (Note A):
Net realized gain (loss) on:
Sales of investment securities of unaffiliated issuers			(1,049,248	)
Interest rate swap contracts			(839,577	)
Change in net unrealized appreciation (depreciation) in value of:
Unaffiliated investment securities			(4,346,484	)
Interest rate swap contracts			603,234
Net gain (loss) on investments			(5,632,075	)
Net increase (decrease) in net assets applicable to Common Stockholders resulting from operations			$4,450,990

See Notes to Financial Statements

20

Neuberger Berman

			HIGH YIELD STRATEGIES FUND INC.
			Six Months Ended
			April 30, 2015				Year Ended
			(Unaudited)				October 31, 2014
Increase (Decrease) in Net Assets Applicable to Common Stockholders:
From Operations (Note A):
Net investment income (loss)			$10,083,065				$21,550,709
Net realized gain (loss) on investments			(1,888,825	)			3,566,902
Net increase from payments by affiliates (Note B)			—				11,145
Change in net unrealized appreciation (depreciation) of investments			(3,743,250	)			(8,964,065	)
Net increase (decrease) in net assets applicable to Common Stockholders
resulting from operations			4,450,990				16,164,691
Distributions to Common Stockholders From (Note A):
Net investment income			(10,356,510	)			(21,103,832	)
Net Increase (Decrease) in Net Assets Applicable to
Common Stockholders			(5,905,520	)			(4,939,141	)
Net Assets Applicable to Common Stockholders:
Beginning of period			281,718,887				286,658,028
End of period			$275,813,367				$281,718,887
Undistributed net investment income (loss) at end of period			$199,434				$472,879

See Notes to Financial Statements

21

Neuberger Berman

			HIGH YIELD
			STRATEGIES
			FUND INC.
			For the Six
			Months Ended
			April 30, 2015
Increase (decrease) in cash:
Cash flows from operating activities:
Net increase in net assets applicable to Common Stockholders
resulting from operations			$4,450,990
Adjustments to reconcile net increase in net assets applicable to
Common Stockholders resulting from operations to net
cash provided by operating activities:
Changes in assets and liabilities:
Purchase of investment securities			(167,251,399	)
Proceeds from disposition of investment securities			167,317,326
Purchase/sale of short-term investment securities, net			(10,577,219	)
Increase in net interest payable/receivable on interest rate swap contracts			(43,189	)
Decrease in receivable for variation margin on centrally cleared interest rate swaps contracts			462,583
Unrealized depreciation of centrally cleared interest rate swap contracts			(59,780	)
Increase in unamortized upfront payments received (paid) on centrally cleared interest rate swaps contracts			584
Decrease in interest receivable			113,226
Decrease in prepaid expenses and other assets			20,339
Decrease in receivable for securities sold			1,236,852
Increase in cash collateral segregated for interest rate swap contracts			(5,247	)
Decrease in accumulated unpaid dividends on preferred shares			(1,301	)
Increase in payable for securities purchased			8,551,111
Decrease in interest payable			(344	)
Net amortization of discount on investments			499,288
Decrease in accrued expenses and other payables			(19,770	)
Unrealized depreciation on securities			4,346,484
Unrealized appreciation on interest rate swap contracts			(603,234	)
Net realized loss from investments			1,049,248
Net realized loss from interest rate swap contracts			839,577
Net cash provided by (used in) operating activities			$10,326,125
Cash flows from financing activities:
Cash distributions paid on common stock			(10,366,681	)
Net cash provided by (used in) in financing activities			(10,366,681	)
Net increase (decrease) in cash			(40,556	)
Cash:
Beginning balance			40,556
Ending balance			$0
Supplemental disclosure
Cash paid for interest			$668,200

See Notes to Financial Statements

22

Note A—Summary of Significant Accounting Policies:

1	General: The Fund was organized as a Maryland corporation on March 18, 2010, and 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 shares of common stock 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 Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 “Financial Services—Investment Companies.” 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.
4	Income tax information: It is the policy of the Fund to continue to qualify for treatment as a regulated investment company (“RIC”) by complying with the requirements of the U.S. Internal Revenue Code applicable to RICs and to distribute substantially all of its net investment income and net realized capital gains to its stockholders. To the extent the Fund distributes substantially all of its net investment income and net realized capital gains to stockholders, 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 tax years for which the applicable statutes of limitations have not yet expired. As of April 30, 2015, 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, 2014, permanent differences resulting primarily from different book and tax accounting were reclassified at year end. Such differences may be attributed to the tax treatment of one or more of the following: income recognized on interest rate swap contracts, distributions in excess of current earnings and

23

non-deductible restructuring costs. These reclassifications had no effect on net income, NAV applicable to common stockholders or net asset value (“NAV”) per share of common stock of the Fund. For the year ended October 31, 2014, the Fund recorded the following permanent reclassifications:

				Accumulated Net
		Undistributed		Realized Gains
		Net Investment		(Losses) on
Paid-in Capital		Income (Loss)		Investments
$(1,090,906)		$(298,504)		$1,389,410

The tax character of distributions paid during the years ended October 31, 2014 and October 31, 2013 was as follows:

Distributions Paid From:
				Long-Term				Tax Return of
Ordinary Income				Capital Gains				Capital				Total
2014		2013		2014		2013		2014		2013		2014		2013
$22,040,421		$21,986,079		$—		$—		$—		$—		$22,040,421		$21,986,079

As of October 31, 2014, the components of distributable earnings (accumulated losses) on a U.S. federal income tax basis were as follows:

Undistributed		Undistributed		Unrealized		Loss		Other
Ordinary		Long-Term		Appreciation		Carryforwards		Temporary
Income		Capital Gain		(Depreciation)		and Deferrals		Differences		Total
$—		$—		$3,625,269		$(14,049,744)		$(120,573)		$(10,545,048)

The differences between book basis and tax basis distributable earnings are primarily due to: losses disallowed and recognized on wash sales, delayed settlement compensation on bank loans, distribution payments, mark to market on certain swap contract transactions 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 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, 2014, 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
$4,989,077(1)		$4,971,059(1)		$4,089,608

	(1)	The capital loss carryforwards shown above include $4,989,077 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, 2014, the Fund utilized capital loss carryforwards of $4,953,040.

24

5	Foreign taxes: Foreign taxes withheld, if any, represent amounts withheld by foreign tax authorities net of refunds recoverable.
6	Distributions to common stockholders: 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 stockholders. The Fund has adopted a policy to pay common stockholders 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 2015 will be reported to Fund stockholders on IRS Form 1099-DIV. 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 stockholders 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 stockholders are accrued and determined as described in Note A-8.
	On April 30, 2015, the Fund declared a monthly distribution to common stockholders in the amount of $0.08 per share, payable on May 29, 2015 to stockholders of record on May 15, 2015, with an ex-date of May 13, 2015. Subsequent to April 30, 2015, the Fund declared a monthly distribution to common stockholders in the amount of $0.08 per share, payable on June 30, 2015 to stockholders of record on June 15, 2015, with an ex-date of June 11, 2015.
7	Expense allocation: Certain expenses are applicable to multiple funds within the complex of related investment companies. 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 or series thereof in the complex on the basis of relative net assets, except where a more appropriate allocation of expenses to each of the investment companies or series thereof in the complex can otherwise be made fairly.
8	Financial leverage: 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 Money Market Cumulative Preferred Shares.
	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 stockholders 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”) 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.
	In September 2013, the Fund issued privately placed notes (“New PNs”) with an aggregate principal value of $90,000,000 and Mandatory Redeemable Preferred Shares, Series B (“MRPS” and, together with the New PNs, “Private Securities”) with an aggregate value of $35,000,000 to holders of the PNs and PPS and used the proceeds to redeem and prepay their PNs and PPS and increase the Fund’s leverage.

25

The New PNs and MRPS have a maturity date of September 18, 2023. The interest on the New PNs is accrued daily and paid quarterly. The MRPS 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 (“MRPS Liquidation Value”). Distributions on the MRPS are accrued daily and paid quarterly. The PNs and PPS had these same terms. For financial reporting purposes only, the liquidation preference of the MRPS is recognized as a liability in the Statement of Assets and Liabilities.

For the six months ended April 30, 2015, the distribution rates on the MRPS ranged from 2.63% to 2.68% and the interest rates on the New PNs ranged from 1.43% to 1.48%.

The table below sets forth key terms of the MPRS.

		Mandatory						Aggregate
		Redemption		Interest		Shares		Liquidation		Estimated
Series		Date		Rate		Outstanding		Preference		Fair Value
Series B		9/18/23		2.68%*		1,400		$35,000,000		$35,000,000

*	Floating rate effective for the six months ended April 30, 2015.
	The Fund has paid up front offering and organizational expenses which are being amortized over the life of the New PNs and MRPS. The expenses are included in the interest expense that is reflected in the Statement of Operations.
	The Fund may redeem MRPS or prepay the New 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 stockholders or repurchasing shares of common stock and/or could trigger the mandatory redemption of MRPS at MRPS Liquidation Value and certain expenses and/or mandatory prepayment of New PNs at par plus accrued but unpaid interest and certain expenses. The holders of MRPS are entitled to one vote per share and will vote with holders of shares of common stock as a single class, except that the holders of MRPS will vote separately as a class on certain matters, as required by law or the Fund’s organizational documents. The holders of MRPS, 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 MRPS 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 shares of common stock 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, 2015, the Fund’s use of derivatives, as described below, was limited to over the counter (“OTC”) interest rate swap contracts and centrally cleared 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.

26

Interest rate swaps: The Fund used OTC 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 OTC 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, or the Fund agrees to pay the swap counterparty 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 in exchange for the counterparty’s paying the Fund a fixed-rate payment. 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 interest rate swap transaction, marked to market daily. There is no guarantee that these interest rate 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 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 stockholders or its total net increase (decrease) in net assets applicable to common stockholders resulting from operations. At April 30, 2015, the Fund had outstanding OTC interest rate swap contracts as follows:

Rate Type

Variable-rate

Accrued Net

Payments

Interest

Unrealized

Swap

Notional

Termination

Received/(Paid)

Receivable

Appreciation

Total Fair

Counterparty

Amount

Date

Fixed-rate

by the Fund

(Payable)

(Depreciation)

Value

Citibank, N.A.

$25,000,000

August 9, 2015

1.120%

.256%(1)

$(47,994)

$(57,455)

$(105,449)

Citibank, N.A.

50,000,000

December 7, 2015

1.883%

.264%(2)

(354,730)

(461,103)

(815,833)

$(402,724)

$(518,558)

$(921,282)

	(1)	90 day LIBOR at February 5, 2015.
	(2)	90 day LIBOR at March 4, 2015.

During the six months ended April 30, 2015, the average notional value of OTC interest rate swap contracts was $92,857,143.

During the six months ended April 30, 2015, the Fund used centrally cleared interest rate swap contracts to reduce the risk that an increase in short-term interest rates could reduce common share net earnings as a result of leverage. The daily change in valuation for centrally cleared swap contracts is recorded as a receivable or payable for variation margin and settled in cash with the centrally clearing party daily. For financial reporting purposes unamortized upfront payments, if any, are netted with unrealized appreciation or depreciation on swap contracts to determine the market value of swaps as presented in the table below. Certain clearinghouses currently offer clearing for limited types of derivative transactions, principally credit derivatives. In a cleared derivative transaction, a fund typically enters into the transaction with a financial institution counterparty, and performance of the transaction is effectively guaranteed by a central clearinghouse, thereby reducing or eliminating the fund’s exposure to the credit risk of the original counterparty. A fund typically will be required to post specified levels of both initial

27

and variation margin with the clearinghouse or at the instruction of the clearinghouse; the margin required by a clearinghouse may be greater than the margin the fund would be required to post in an uncleared derivative transaction. At April 30, 2015, the Fund had outstanding centrally cleared interest rate swap contracts as follows:

						Rate Type							Unamortized
								Variable-rate					Upfront										Accrued Net
								Payments					Payments					Unrealized					Interest
Swap		Notional		Termination				Received/(Paid)		Market			Received					Appreciation					Receivable		Total Fair
Counterparty		Amount		Date		Fixed-rate		by the Fund		Value			(Paid)					(Depreciation)					(Payable)		Value
CME Group, Inc.		$25,000,000		May 14, 2018		1.371%		.258%(1)		$(163,191	)			$—					$(163,191	)			$(146,863)		$(310,054	)
CME Group, Inc.		20,000,000		April 17, 2019		1.292%		.254%(2)		69,013				(584	)				68,429				(7,915)		60,514
										$(94,178	)			$(584	)				$(94,762	)			$(154,778)		$(249,540	)

	(1)	90 day LIBOR at February 11, 2015.
	(2)	90 day LIBOR at January 14, 2015.

During the six months ended April 30, 2015, the average notional value of centrally cleared interest rate swap contracts was $27,857,143.

At April 30, 2015, the Fund had the following derivatives (which did not qualify for hedge accounting under ASC 815), grouped by primary risk exposure:

Asset Derivatives
		Interest Rate Risk				Statement of Assets and Liabilities Location
Centrally Cleared Interest Rate						Receivable/Payable for variation margin on centrally
Swap Contracts			$60,514			cleared interest rate swap contracts(2)
Total Value-Assets			$60,514
Liability Derivatives
		Interest Rate Risk				Statement of Assets and Liabilities Location
OTC Interest Rate Swap Contracts		$	(921,282	)		OTC interest rate swap contracts, at value(1)
Centrally Cleared Interest Rate						Receivable/Payable for variation margin on centrally
Swap Contracts			(310,054	)		cleared interest rate swap contracts(2)
Total Value-Liabilities		$	(1,231,336	)

	(1)	“OTC Interest Rate Swap Contracts” reflects the appreciation (depreciation) of the interest rate swap contracts plus accrued interest as of April 30, 2015 which is reflected in the Statement of Assets and Liabilities under the caption “Over the counter interest rate swap contracts, at value (Note A).”
	(2)	“Centrally Cleared Interest Rate Swap Contracts” reflects cumulative unrealized appreciation or (depreciation). Only the current day’s variation margin on centrally cleared interest rate swap contracts is reported within the Statement of Assets and Liabilities as “Receivable/Payable for variation margin on centrally cleared interest rate swap contracts.”

The impact of the use of these derivative instruments on the Statement of Operations during the six months ended April 30, 2015, was as follows:

Realized Gain (Loss)
		Interest Rate Risk		Statement of Operations Location
Interest Rate Swap Contracts		$(839,577)		Net realized gain (loss)
Total Realized Gain (Loss)		$(839,577)		on: interest rate swap contracts
Change in Appreciation (Depreciation)
		Interest Rate Risk		Statement of Operations Location
Interest Rate Swap Contracts		$603,234		Change in net unrealized appreciation
Total Change in Appreciation (Depreciation)		$603,234		(depreciation) in value of: interest rate swap contracts

28

The Fund adopted the provisions of Accounting Standards Update 2011-11 Disclosures about Offsetting Assets and Liabilities (“ASU 2011-11”). ASU 2011-11 is intended to enhance disclosure requirements on the offsetting of financial assets and liabilities. Pursuant to ASU 2011-11, an entity is required to disclose both gross and net information for assets and liabilities related to derivatives, repurchase and reverse repurchase agreements, and securities lending and securities borrowing transactions that are eligible for offset or subject to an enforceable master netting or similar agreement. The Fund’s derivative assets and liabilities at fair value by type are reported gross in the Statement of Assets and Liabilities. The following tables present the Fund’s derivative assets and liabilities by counterparty, net of amounts available for offset under a master netting agreement and net of the related collateral received by the Fund for assets and pledged by the Fund for liabilities as of April 30, 2015.

						Net Amounts of
		Gross Amounts		Gross Amounts Offset		Liabilities Presented in
		of Recognized		in the Statement of		the Statement of
Description		Liabilities		Assets and Liabilities		Assets and Liabilities
OTC Interest Rate Swap Contracts		$(921,282)		$—		$(921,282)
Total		$(921,282)		$—		$(921,282)

Gross Amounts Not Offset in the Statement of Assets and Liabilities
		Net Amounts of
		Liabilities Presented in
		the Statement of Assets				Cash Collateral		Net
Counterparty		and Liabilities		Financial Instruments		Pledged(a)		Amount(b)
Citibank, N.A.		$(921,282)		$—		$906,589		$(14,693)
Total		$(921,282)		$—		$906,589		$(14,693)

	(a)	Cash collateral received (or pledged) is limited to an amount not to exceed 100% of the net amount of assets (or liabilities) in the tables presented above, for each respective counterparty.
	(b)	Net Amount represents amounts under-collateralized by the Fund to each counterparty as of April 30, 2015.

11	Indemnifications: Like many other companies, the Fund’s organizational documents provide that its officers (“Officers”) and directors (“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.
12	Arrangements with certain non-affiliated service providers: 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 New PNs and the AA rating on the MRPS. “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).”

Note B—Management 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

29

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.

On June 3, 2014, Management made a voluntary contribution of $11,145 to the Fund in connection with a payment matter related to the Fund’s investment in a State Street money market fund.

Note C—Securities Transactions:

During the six months ended April 30, 2015, there were purchases and sales of long-term securities (excluding interest rate swap contracts) of $111,541,969 and $111,185,525, respectively.

Note D—Subsequent Event:

On June 1, 2015, the Fund was served with a lawsuit filed in the United States Bankruptcy Court for the Southern District of New York, entitled Motors Liquidation Company Avoidance Action Trust vs. JPMorgan Chase Bank, N.A. et al. and numbered Adv. No. 09-00504 (REG). In addition to the Fund, the lawsuit also names over five hundred other institutional investors as defendants. The lawsuit does not allege any misconduct by the defendants, but seeks to recover payments made by General Motors Corporation (n/k/a Motors Liquidation Company) and its affiliates (collectively, “GM”) to the defendants shortly prior to and after GM’s Chapter 11 bankruptcy filing on June 1, 2009 (the “Petition Date”). The complaint alleges that GM made the payments to the defendants under a certain term loan agreement, dated as of November 29, 2006, as amended by that first amendment dated as of March 4, 2009 (the “Term Loan Agreement”); that the payments occurred both during the ninety (90) days prior to the Petition Date (the “Preference Period”) and after the Petition Date when all amounts due under the Term Loan Agreement were paid in full in connection with GM’s postpetition financing (the “Postpetition Transfers”); that the lien purportedly securing the Term Loan Agreement was not perfected as of the Petition Date; and that the lenders under the Term Loan Agreement should therefore have been treated as unsecured creditors rather than paid in full as secured creditors. The plaintiff seeks avoidance of the lien securing the Term Loan Agreement as unperfected under Section 544(a) of the Bankruptcy Code; disgorgement of all amounts paid to the defendants during the Preference Period (plus interest) under Section 547 of the Bankruptcy Code; disgorgement of all amounts paid to the defendants as Postpetition Transfers (plus interest) under Section 549 of the Bankruptcy Code; and disallowance of any bankruptcy claims of the defendants against GM until they repay all such amounts under Section 502(d) of the Bankruptcy Code. The Fund cannot predict the outcome of the lawsuit. If the lawsuit were to be decided or settled in a manner adverse to the Fund, the payment of such judgment or settlement could have an adverse effect on the Fund’s net asset value. However, no liability for litigation relating to this matter has been accrued in the financial statements as neither the likelihood nor the amount of any liability can reasonably be determined at this time.

Note E—Unaudited 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.

30

High Yield Strategies Fund Inc.

The following table includes selected data for a share of common stock outstanding throughout each period and other performance information derived from the Financial Statements. Per share amounts that round to less than $0.01 or $(0.01) per share are presented as $0.00 or $(0.00), respectively. Ratios that round to less than 0.00% or (0.00)% per share are presented as 0.00% or (0.00)%, respectively. Net asset amounts with a zero balance, if any, may reflect actual amounts rounding to less than $0.1 million. A "-" indicates that the line item was not applicable in the corresponding period.

																						Period from
		Six Months																				January 1,
		Ended																				2010 to				Year Ended
		April 30,								Year Ended October 31,												October 31				December 31,
		2015				2014					2013			2012				2011				2010^^^				2009
Common Stock Net Asset Value,
Beginning of Period		$	14.42			$	14.67			$	14.03			$	13.00			$	13.82			$	12.54				$	7.42
Net Investment Income¢			0.52				1.10				1.15				1.17				1.34				1.19					1.43
Net Gains or Losses on Securities
(both realized and unrealized)			(0.30	)			(0.27	)			0.61				1.03				(0.83	)			1.20					4.97
Common Stock Equivalent of
Distributions to Preferred
Shareholders From:
Net Investment Income¢			—				—				(0.04	)			(0.05	)			(0.05	)			(0.03	)				(0.04	)
Total From Investment Operations
Applicable to Common Stockholders			0.22				0.83				1.72				2.15				0.46				2.36					6.36
Less Distributions to Common
Stockholders From:
Net Investment Income			(0.53	)			(1.08	)			(1.08	)			(1.12	)			(1.28	)			(1.08	)				(1.26	)
Accretive Effect of Tender Offer			—				—				—				—				—				—					0.02	##
Voluntary Contribution
from Management			—				0.00				—				—				—				—					—
Common Stock Net Asset Value,
End of Period		$	14.11			$	14.42			$	14.67			$	14.03			$	13.00			$	13.82				$	12.54
Common Stock Market Value, End of Period		$	12.47			$	13.16			$	13.56			$	14.18			$	13.55			$	14.04				$	11.95
Total Return, Common Stock
Net Asset Value†			2.08	%**			6.48	%			13.18	%			17.24	%			3.34	%			19.78	%**				92.44	%
Total Return, Common Stock Market Value†			(1.15	)%**			5.13	%			3.51	%			13.68	%			6.03	%			27.69	%**				113.27	%
Ratios/Supplemental Data††
Ratios are Calculated Using
Average Net Assets
Applicable to Common Stockholders
Ratio of Gross ExpensesØ			1.97	%*			1.89	%			1.73	%			1.81	%#			1.75	%#			2.02	%*#				2.65	%#
Ratio of Net Expenses§Ø			1.97	%*			1.89	%			1.73	%			1.76	%			1.68	%			1.95	%*‡‡				2.60	%
Ratio of Net Investment Income			7.45	%*			7.47	%			8.02	%			8.79	%			9.86	%			11.02	%*				14.30	%
Portfolio Turnover Rate			29	%**			60	%			69	%			94	%			100	%			130	%**ØØ				159	%
Net Assets Applicable to Common
Stockholders, End of Period (000’s)		$	275,813			$	281,719			$	286,658			$	274,136			$	253,170			$	267,819				$	138,293
Preferred Shares
Preferred Shares Outstanding,¢¢
End of Period (000’s)		$	35,000			$	35,000			$	35,000			$	27,175			$	27,175			$	27,175				$	12,300
Asset Coverage Per Share@		$	222,067			$	226,286			$	229,815			$	277,268			$	257,980			$	271,454				$	306,086
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)		$	90,000			$	90,000			$	90,000			$	82,600			$	82,600			$	82,600				$	45,900
Asset Coverage Per $1,000 of
Notes Payable@@		$	4,454			$	4,520			$	4,575			$	4,649			$	4,395			$	4,572				$	4,281

See Notes to Financial Highlights

31

32

Distribution Reinvestment Plan

Computershare, Inc. (the “Plan Agent”) will act as Plan Agent for stockholders 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 of the Fund’s common stock (“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 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

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The Plan Agent may hold each Participant’s Shares acquired pursuant to the Plan together with the Shares of other stockholders 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 stockholders 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 and other 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.

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Directory

Investment Manager and Administrator	Stock Transfer Agent
Neuberger Berman Management LLC	Computershare, Inc.
605 Third Avenue, 2nd Floor	480 Washington Boulevard
New York, NY 10158-0180	Jersey City, NJ 07310
877.461.1899 or 212.476.8800
Sub-Adviser	Plan Agent
Neuberger Berman Fixed Income LLC	Computershare, Inc.
200 South Wacker Drive	P.O. Box 30170
Suite 2100	College Station, TX 77842-3170
Chicago, IL 60601
	Overnight correspondence should be sent to:
Custodian	Computershare, Inc.
State Street Bank and Trust Company	211 Quality Circle, Suite 210
One Lincoln Street	College Station, TX 77845
Boston, MA 02111
	Legal Counsel
	K&L Gates LLP
	1601 K Street, NW
	Washington, DC 20006-1600
	Independent Registered Public Accounting Firm
	Ernst & Young LLP
	200 Clarendon Street
	Boston, MA 02116

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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 Securities and Exchange Commission’s website, 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 upon request, without charge, by calling 800-877-9700 (toll-free), on the Securities and Exchange Commission’s website 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).

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	Rev. 12/2010

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: ■Social Security number and account balances ■income and transaction history ■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	No
For joint marketing with other financial companies	No	We don’t share
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 stockholder report.

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Who we are
Who is providing this notice?	Entities within the Neuberger Berman family of companies, mutual funds, and private investment funds.
What we do
How does Neuberger Berman protect my personal information?	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.
How does Neuberger Berman collect my personal information?	We collect your personal information, for example, when you ■open an account or provide account information ■seek advice about your investments or give us your income information ■give us your contact information We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can’t I limit all sharing?	Federal law gives you the right to limit only ■sharing for affiliates’ everyday business purposes—information about your creditworthiness ■affiliates from using your information to market to you ■sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies. ■Our affiliates include companies with a Neuberger Berman name; financial companies, such as investment advisers, broker dealers; mutual funds, and private investment funds.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies. ■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.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you. ■Neuberger Berman doesn’t jointly market.

This is not part of the Funds’ stockholder report.

				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 stockholders and is not an offer of shares of the Fund.
					H0547 06/15

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