NEUBERGER BERMAN ENERGY INFRASTRUCTURE AND INCOME FUND ANNOUNCES MONTHLY DISTRIBUTION

Rhea-AI Summary

Neuberger Berman Energy Infrastructure and Income Fund (NYSE American: NML) declared a monthly distribution of $0.0584 per share, payable on June 28, 2024, with a record date of June 17, 2024. The Fund aims to make regular monthly cash distributions based on its net rate of return and other factors. These distributions will be derived from MLPs, dividends, interest from debt instruments, and other investments, minus operating expenses and taxes. A portion may constitute a non-taxable return of capital, affecting stockholder's basis in shares and potential capital gains or losses upon sale. There is no guarantee on the amount or nature of future distributions. The Fund is subject to federal income tax, reducing distributions compared to direct MLP investments.

Positive

• Monthly distribution declared at $0.0584 per share.
• Distributions to be derived from a diversified investment portfolio including MLPs, common stock dividends, and debt instruments.
• Regular monthly distributions provide consistent income for shareholders.

Negative

• Distributions may include a non-taxable return of capital, affecting shareholder's basis in shares and potential capital gains or losses upon sale.
• No assurance of consistent or specific amount of future distributions.
• Fund is subject to federal income tax, reducing the amount available for distribution.

Insights

Financial Analyst

The Neuberger Berman Energy Infrastructure and Income Fund Inc. has announced a distribution of $0.0584 per share of common stock, payable on June 28, 2024. This type of distribution is significant as it directly impacts investors' income streams and can affect stock price due to changes in demand. Given the fund's reliance on a mix of cash flows from Master Limited Partnerships (MLPs) and other investments, it's important to note that a portion of the distribution may be a non-taxable return of capital. This means investors could see a reduction in their cost basis, which will influence their tax liability when they sell their shares. Although this could be beneficial in the short term by providing cash flow, it may lead to larger capital gains taxes upon sale. Additionally, since the fund is subject to federal income tax, its distributions might be lower than those of funds not subject to such taxes. Investors should weigh these factors when estimating their total return from this investment.

Tax Expert

The announcement includes critical tax-related information that investors need to consider. The fund's distributions partially consist of a non-taxable return of capital. This return reduces an investor’s cost basis, which increases their capital gains upon the eventual sale of the shares. This can lead to a higher tax burden in the future despite the immediate benefit of receiving cash. It's essential for investors to understand this mechanism to make informed decisions regarding their portfolios. Additionally, the fund's compliance with Section 19 of the Investment Company Act of 1940 requires it to disclose the nature of its distributions, ensuring transparency. However, it's important to note that these estimates are for informational purposes and not for tax reporting, which can lead to confusion if not properly understood.

NEW YORK, May 31, 2024 /PRNewswire/ -- Neuberger Berman Energy Infrastructure and Income Fund Inc. (NYSE American: NML) (the "Fund") has announced a distribution declaration of $0.0584 per share of common stock. The distribution announced today is payable on June 28, 2024, has a record date of June 17, 2024, and has an ex-date of June 17, 2024.

The Fund currently intends to make regular monthly cash distributions to holders of its common stock at a fixed rate per share, to be determined based on the projected net rate of return of the Fund's investments as well as other factors, subject to ongoing review and adjustment from time to time. The Fund currently intends to pay its regular monthly distributions out of its distributable cash flow, which generally consists of (1) cash and paid-in-kind distributions from master limited partnerships ("MLPs") or their affiliates, dividends from common stocks, interest from debt instruments and income from other investments held by the Fund less (2) current or accrued operating expenses, including leverage costs, if any, and taxes on its taxable income.

The Fund expects that a portion of its distributions to stockholders will constitute a non-taxable return of capital. A "return of capital" is a distribution by the Fund which represents a return of a common stockholder's original investment, and should not be confused with a dividend. To the extent the Fund pays a return of capital, a common stockholder's basis in Fund shares will be reduced, which will increase a capital gain or reduce a capital loss upon sale of those shares. There is no assurance that the Fund will always be able to pay a distribution of any particular amount, or that a distribution will consist solely of the Fund's current and accumulated earnings and profits. 

In compliance with Section 19 of the Investment Company Act of 1940, as amended, a notice would be provided for any distribution that does not consist solely of net investment income. The notice would be for informational purposes and not for tax reporting purposes, and would disclose, among other things, estimated portions of the distribution, if any, consisting of net investment income, capital gains and return of capital. The final determination of the source and tax characteristics of all distributions paid in 2024 will be made after the end of the year.

The Fund is subject to federal income tax on its taxable income, unlike most investment companies. Any taxes paid by the Fund will reduce the amount available to pay distributions to stockholders, and therefore investors in the Fund will likely receive lower distributions than if they invested directly in MLPs.

About Neuberger Berman

Neuberger Berman is an employee-owned, private, independent investment manager founded in 1939 with over 2,800 employees in 26 countries. The firm manages $474 billion of equities, fixed income, private equity, real estate and hedge fund portfolios for global institutions, advisors and individuals. Neuberger Berman's investment philosophy is founded on active management, fundamental research and engaged ownership. UNPRI named the firm a Leader, a designation awarded to fewer than 1% of investment firms for excellence in environmental, social and governance practices. Neuberger Berman has been named by Pensions & Investments as the #1 or #2 Best Place to Work in Money Management for each of the last ten years (firms with more than 1,000 employees). Visit www.nb.com for more information. Data as of March 31, 2024.

Statements made in this release that look forward in time involve risks and uncertainties. Such risks and uncertainties include, without limitation, the adverse effect from a decline in the securities markets or a decline in the Fund's performance, a general downturn in the economy, competition from other closed end investment companies, changes in government policy or regulation, inability of the Fund's investment adviser to attract or retain key employees, inability of the Fund to implement its investment strategy, inability of the Fund to manage rapid expansion and unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations.

Contact:
Neuberger Berman Investment Advisers LLC
Investor Information
(877) 461-1899

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SOURCE Neuberger Berman

FAQ

What is the monthly distribution amount announced by NML?

The monthly distribution amount announced by NML is $0.0584 per share.

When will the NML distribution be paid?

The NML distribution will be paid on June 28, 2024.

What is the record date for the NML distribution?

The record date for the NML distribution is June 17, 2024.

What is the ex-date for the NML distribution?

The ex-date for the NML distribution is June 17, 2024.

What factors influence the NML monthly distribution rate?

The NML monthly distribution rate is influenced by the projected net rate of return of the Fund's investments and other factors.

What composes the distributable cash flow for NML?

NML's distributable cash flow consists of cash and paid-in-kind distributions from MLPs and their affiliates, dividends from common stocks, interest from debt instruments, and income from other investments, minus operating expenses and taxes.

Will NML distributions include a return of capital?

Yes, a portion of NML distributions may constitute a non-taxable return of capital.

How does a return of capital affect NML shareholders?

A return of capital reduces a shareholder's basis in NML shares, potentially increasing capital gains or reducing capital losses upon sale.

Is there a guarantee on NML distribution amounts?

No, there is no assurance that NML will pay a consistent or specific distribution amount.

How does federal income tax impact NML distributions?

Federal income tax on NML's taxable income reduces the amount available for distributions, leading to lower distributions compared to direct MLP investments.