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In accordance with Accounting Standards Codification (“ASC”) 820 “Fair Value Measurement” (“ASC 820”), all investments held by Neuberger Berman MLP Income Fund Inc. (the “Fund”) are carried at the value that Neuberger Berman Management LLC (“Management”) believes the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment under current market conditions. Various inputs, including the volume and level of activity for the asset or liability in the market, are considered in valuing the Fund’s investments, some of which are discussed below. Significant management judgment may be necessary to value investments in accordance with ASC 820.

 

ASC 820 established a three-tier hierarchy of inputs to create a classification of value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

•

Level 1 – quoted prices in active markets for identical investments

•

Level 2 – other observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, amortized cost, etc.)

•

Level 3 – unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing an investment are not necessarily an indication of the risk associated with investing in those securities.

 

The value of the Fund’s investments in equity securities (including master limited partnerships) and written option contracts, for which market quotations are readily available, is generally determined by Management by obtaining valuations from an independent pricing service based on the latest sale price quoted on a principal exchange or market for that security (Level 1 inputs). Securities traded primarily on the NASDAQ Stock Market are normally valued at the NASDAQ Official Closing Price (“NOCP”) provided by NASDAQ each business day. The NOCP is the most recently reported price as of 4:00:02 p.m., Eastern time, unless that price is outside the range of the “inside” bid and asked prices (i.e., the bid and asked prices that dealers quote to each other when trading for their own accounts); in that case, NASDAQ will adjust the price to equal the inside bid or asked price, whichever is closer. Because of delays in reporting trades, the NOCP may not be based on the price of the last trade to occur before the market closes. If there is no reported sale of a security on a particular day, the independent pricing service may value the security based on reported market quotations. The value of the Fund’s investments in certain preferred stock is determined by Management by obtaining valuations from independent pricing services that are based on 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 (generally Level 2 inputs).

 

The value of the Fund’s investments in equity securities of publicly traded companies acquired in a direct placement transaction may be subject to restrictions on resale that can affect the security’s liquidity and fair value. Such securities that are convertible or otherwise will become freely tradable will typically be valued based on the market value of the freely tradable security, less an applicable discount. Inputs used generally include the duration of the restriction period and the discount on purchase date.

 

Management has developed a process to periodically review information provided by independent pricing services for all types of securities.

 

Investments in investment companies are valued using the respective fund’s daily calculated net asset value per share (Level 2 inputs).

 

If a valuation is not available from an independent pricing service, or if Management has reason to believe that the valuation received does not represent the amount the Fund might reasonably expect to receive on a current sale in an orderly transaction, Management seeks to obtain quotations from brokers or dealers (generally considered Level 2 or Level 3 inputs depending on the number of quotes available). If such quotations are not readily available, the security is valued using methods the Fund’s Board of Directors has approved in the good-faith belief that the resulting valuation will reflect the fair value of the security. Numerous factors may be considered when determining the fair value of a security based on Level 2 or Level 3 inputs, including available analyst, media or other reports, trading in futures or American Depositary Receipts (“ADRs”) and whether the issuer of the security being fair valued has other securities outstanding.

Fair value prices are necessarily estimates, and there is no assurance that such a price will be at or close to the price at which the security is next quoted or next trades.

The following is a summary, categorized by Level, of inputs used to value the Fund’s investments as of February 28, 2015:

Investments:

Level 1

Level 2

Level 3

Total

Master Limited Partnerships and

Related Companies

Coal & Consumable Fuels

$

78,825,000

$

—

$

—

$

78,825,000

Leisure Facilities

121,071,671

—

—

121,071,671

Oil & Gas Storage & Transportation

1,275,503,354

—

—

1,275,503,354

Propane

88,280,000

—

—

88,280,000

Total Master Limited Partnerships and

Related Companies

1,563,680,025

—

—

1,563,680,025

Short-Term Investments

—

14,602,879

—

14,602,879

Total Investments

$

1,563,680,025

$

14,602,879

$

—

$

1,578,282,904

As of the period ended February 28, 2015, no securities were transferred from one Level (as of November 30, 2014) to another.

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At February 28, 2015, the cost of investments for U.S. federal income tax purposes was $1,280,056,876.  Gross unrealized appreciation of investments was $339,284,656 and gross unrealized depreciation of investments was $41,058,628 resulting in net unrealized appreciation of $298,226,028 based on cost for U.S. federal income tax purposes.

§

Affiliated issuer.

Balance

of Shares

Held

November 30,

2014

Gross

Purchases

and

Additions

Gross

Sales and

Reductions

Balance

of Shares

Held

February

28, 2015

Value

February 28,

2015

Distributions

from

Investments

in Affiliated

Issuers

Net

Realized

Gain (Loss)

from

Investments

in Affiliated

Issuers

Southcross Energy Partners, L.P.

1,860,068

-

-

1,860,068

$    23,567,062

$      744,027

$               -

(1)

      Affiliated issuers, as defined in the Investment Company Act of 1940, as amended.

µ

All or a portion of this security is pledged in connection with the Fund’s outstanding loans payable.