NEUBERGER BERMAN ENERGY INFRASTRUCTURE AND INCOME FUND ANNOUNCES MONTHLY DISTRIBUTION

Rhea-AI Summary

Neuberger Berman Energy Infrastructure and Income Fund Inc. (NML) has declared a distribution of $0.0584 per share of common stock, payable on February 29, 2024. The Fund intends to make regular monthly cash distributions to holders of its common stock at a fixed rate per share, based on the projected net rate of return of the Fund's investments. The distributions are expected to be paid out of the Fund's distributable cash flow, consisting of various sources, and a portion of the distributions may constitute a non-taxable return of capital. However, there is no assurance that the Fund will always be able to pay a distribution of any particular amount, and 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, which may reduce the amount available to pay distributions to stockholders.

Insights

Financial Analyst

The distribution declaration of $0.0584 per share by Neuberger Berman Energy Infrastructure and Income Fund Inc. (NML) is a key figure for investors as it directly impacts the yield on their investment. This fixed-rate distribution strategy indicates the fund's confidence in its projected net rate of return from investments, which includes diverse sources such as MLPs, common stocks and debt instruments. It is important to note that the fund's ability to maintain these distributions could be influenced by its operating expenses and leverage costs, which are subtracted from its distributable cash flow.

Investors should be aware that a portion of these distributions may be classified as a return of capital, which is not a dividend but a return of the original investment. This has implications for the cost basis of their shares and consequently affects the calculation of capital gains or losses upon sale. The tax implications of these distributions are also significant, as the fund's status as a taxable entity could mean that distributions to shareholders are effectively reduced by any taxes paid by the fund.

Tax Specialist

From a taxation perspective, the classification of distributions from Neuberger Berman Energy Infrastructure and Income Fund Inc. is critical for investors. The potential for distributions to be partly considered a return of capital means that investors need to adjust their cost basis in the fund's shares downward, which could lead to higher taxable gains when these shares are sold. Furthermore, the fund's taxable status is unusual for an investment company and could result in less efficient distribution of earnings compared to direct investments in MLPs or other non-taxable entities. Investors should closely monitor the tax characteristics of the distributions and the final determination at the year's end to optimize their tax planning.

Market Research Analyst

When evaluating the impact of Neuberger Berman Energy Infrastructure and Income Fund's distribution strategy, it is essential to consider the broader market context. MLPs, common stocks and debt instruments are subject to market volatility, which can affect the fund's distributable cash flow. Regular monthly cash distributions suggest a stable investment, but the fund's transparency in declaring the potential for a return of capital indicates that payouts may not always derive from investment income. This could signal that the fund's earnings are not sufficiently covering the distributions, which may be a point of concern for long-term investors. Additionally, the fund's taxable status may make it less attractive compared to other investment vehicles that offer tax advantages, potentially influencing investor sentiment and the fund's stock performance.

NEW YORK, Jan. 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 February 29, 2024, has a record date of February 15, 2024 and has an ex-date of February 14, 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 2,800 employees in 26 countries. The firm manages $463 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 December 31, 2023.

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

When is the distribution payable for Neuberger Berman Energy Infrastructure and Income Fund Inc. (NML)?

The distribution declared is payable on February 29, 2024.

What is the amount of the distribution per share for Neuberger Berman Energy Infrastructure and Income Fund Inc. (NML)?

The distribution declared is $0.0584 per share of common stock.

What is the record date for the distribution of Neuberger Berman Energy Infrastructure and Income Fund Inc. (NML)?

The record date for the distribution is February 15, 2024.

What is the ex-date for the distribution of Neuberger Berman Energy Infrastructure and Income Fund Inc. (NML)?

The ex-date for the distribution is February 14, 2024.

How does the Fund determine the fixed rate for its monthly cash distributions to holders of common stock?

The fixed rate per share is 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.

What does the Fund expect a portion of its distributions to stockholders to constitute?

The Fund expects that a portion of its distributions to stockholders will constitute a non-taxable return of capital.

What is the impact of the Fund being subject to federal income tax on its taxable income?

The Fund being subject to federal income tax on its taxable income may reduce the amount available to pay distributions to stockholders.