As filed with the Securities and Exchange Commission on January 4, 2010
  
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: 811-21421
  

NEUBERGER BERMAN REAL ESTATE SECURITIES INCOME FUND INC.
(Exact Name of the 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
c/o Neuberger Berman Management LLC
Neuberger Berman Real Estate Securities Income Fund Inc.
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, 2009
  
Date of reporting period: October 31, 2009
  

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 (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 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
  

Neuberger Berman Real Estate Securities Income Fund Inc.

Annual Report

October 31, 2009

Contents

THE FUND

President's Letter	1
PORTFOLIO COMMENTARY	2
SCHEDULE OF INVESTMENTS/ TOP TEN EQUITY HOLDINGS	7
FINANCIAL STATEMENTS	12
FINANCIAL HIGHLIGHTS/PER SHARE DATA	26
Report of Independent Registered Public Accounting Firm	28
Distribution Reinvestment Plan	29
Directory	31
Directors and Officers	32
Proxy Voting Policies and Procedures	42
Quarterly Portfolio Schedule	42
Notice to Shareholders	42
Report of Votes of Shareholders	43

"Neuberger Berman" and the Neuberger Berman logo are service marks of Neuberger Berman LLC. "Neuberger Berman Management LLC" and the individual Fund name in this shareholder report are either service marks or registered service marks of Neuberger Berman Management LLC. ^_©2009 Neuberger Berman Management LLC. All rights reserved.

President's Letter

Dear Shareholder,

I am pleased to present to you this annual report for Neuberger Berman Real Estate Securities Income Fund Inc. for the fiscal year ended October 31, 2009. The report includes portfolio commentary, a listing of the Fund's investments, and its audited financial statements for the reporting period.

The Fund seeks to provide high current income with capital appreciation as a secondary objective. To pursue both, we have assembled a portfolio with a broad mix of equity securities of real estate investment trusts (REITs) and other real estate companies.

Our investment approach combines analysis of security fundamentals and real estate with property sector diversification. Our disciplined valuation methodology seeks real estate company securities that are attractively priced relative to both their historical growth rates and the valuation of other property sectors.

The market environment for REITs was extremely volatile during the reporting period, and was characterized by significant shifts in asset prices as well as changes to the dividend policies and levels of many REITs. This volatility caused the value of the Fund's portfolio securities and, correspondingly, the asset coverage on its leverage, to rise and fall, especially during the first half of the reporting period. As a result, the Fund was required to reduce the amount of its leverage to comply with the asset coverage levels required under the Investment Company Act of 1940.

In addition, a sizable number of REITs announced reductions in their common share dividends and a somewhat smaller number of REITs suspended their preferred share dividends. The reduction in the Fund's leverage and the reduction and/or suspension of dividends by certain REITs in the Fund's portfolio resulted in a reduction in the level of income earned and anticipated to be earned by the Fund. Consequently, the Fund's monthly distributions were reduced effective in January 2009 and again in July 2009.

Finally, I would like to provide an update on the Fund's tender offer activity. In June 2009, the Fund completed its first tender offer and accepted for tender approximately 5% of its outstanding common shares. The Fund had offered to purchase up to 10% of its outstanding common shares but the tender offer was not fully subscribed. Additionally, during the fiscal year, the Fund announced the implementation of a semi-annual tender offer program consisting of up to four tender offers over a two-year period. Under its tender offer program, if the Fund's common shares trade at an average daily discount to net asset value per share (NAV) of greater than 10% during a 12-week measurement period, the Fund would conduct a tender offer for between 5% and 20% of its outstanding common shares at a price equal to 98% of its NAV determined on the day the tender offer expires.

The Fund's initial measurement period commenced on June 5, 2009 and ended on August 28, 2009. Given the results of this measurement period, the Fund conducted a tender offer and accepted for tender approximately 5% of its outstanding common shares in October 2009. To offset the expenses associated with the tender offers, Neuberger Berman agreed to extend the management fee waiver currently in place for the Fund.

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

Sincerely,

Robert Conti
President and CEO
Neuberger Berman Real Estate Securities Income Fund Inc.

1

Real Estate Securities Income Fund Inc. Portfolio Commentary

For the fiscal year ended October 31, 2009, Neuberger Berman Real Estate Securities Income Fund Inc. posted a positive return on a net asset value (NAV) basis and outperformed its benchmark, the FTSE NAREIT Equity REITs Index. The Fund's exposure to real estate investment trust (REIT) preferred shares was a substantial contributor to performance during the fiscal year.

The REIT market was extremely volatile during the reporting period. The benchmark index fell approximately 41% during the first four months of the fiscal year. The severe credit crunch, a weakening global economy, turmoil in the financial markets and extreme risk combined to drag down the equity markets, and REITs were hit particularly hard. REITs typically use leverage to fund their operation and sharply curtailed capital markets activity led to fear of markedly higher bankruptcies in the sector.

The same factors that caused REITs to perform poorly during the first third of the fiscal year were instrumental in their subsequent rally. During the last eight months of the period, massive government intervention improved credit conditions and helped to restore order to the financial markets. There were also signs that the economy was beginning to stabilize, which we believe improved investor sentiment and caused risk aversion to abate. In addition, numerous REITs were successful in accessing the capital markets, as over 60 REITs raised roughly $20 billion in equity capital during the first 10 months of calendar year 2009. In addition, given improving credit markets, REITs were able to better access the unsecured bond market. With spreads (the difference in yield between Treasuries and other fixed income securities) narrowing, REITs were also able to reduce their financing costs. Collectively, this lifted the dark cloud that had hung over the REIT market, helping the REIT index gain 114% from its trough on March 6, 2009 to its peak on September 22, 2009. The index then took a step backward and fell roughly 10% from its peak though the end of October 2009.

When the reporting period began, the Fund was defensively positioned, as we emphasized areas of the market that have historically held up well during economic downturns. This proved to be beneficial for the Fund, as its exposure to Health Care and Self Storage REITs positively contributed to performance. Elsewhere, the Fund's holdings in grocery-anchored shopping centers and underweighting of the more economically sensitive Industrial and Office sector REITs were also rewarded.

As the fiscal year progressed, the economy appeared to bottom and conditions in the REIT market improved. This prompted us to make several adjustments to the portfolio. For example, we reduced some of our defensive sector overweights and increased our exposure to a number of attractively valued cyclical names that we felt would perform well if economic conditions further improved. We also turned our attention to the REITs that had successfully issued equity capital. Using our extensive research capabilities, we selectively purchased REITs that had been severely punished by investors during the first part of the fiscal year and whose balance sheets had improved through the infusion of new capital. We also identified several REITs that previously had relatively solid balance sheets, believing that, with new capital, they would now have the potential to acquire assets from weaker, overleveraged counterparts. Overall, these adjustments were beneficial to Fund performance.

As mentioned above, the Fund was also rewarded for its exposure to REIT preferred shares. These securities are senior to common stocks in the capital structure. REIT preferred shares held up better than their common stock counterparts early in the fiscal year and they started to rally sooner when the fundamental backdrop in the REIT market improved.

On the downside, several of our strategies detracted from Fund performance. For example, reducing the Fund's overweight in the defensive Health Care sector at the end of calendar year 2008 proved to be premature, as REIT prices fell sharply in January and February of 2009. In addition, the Fund's modest cash position was a drag on performance when the REIT market rallied as the reporting period progressed. The Fund's use of leverage produced mixed results during the period. As one would expect, the use of leverage detracted from performance during periods of market weakness and enhanced the Fund's results when REIT prices rallied.

2

Looking ahead, we remain positive on the long-term prospects for REITs. We believe their ability to access capital has removed a major roadblock for the sector. In addition, we believe a return to positive economic growth would be favorable for commercial real estate occupancy and rental rates. Finally, increased acquisition activity could be a positive, as well-capitalized REITs may be able to acquire overly-leveraged assets at attractive valuations.

In conclusion, we would like to address the outlook for REIT dividends. During the credit crisis, as REITs looked to conserve capital, many elected to lower or cut their dividends or pay a portion of their dividends in stock. We believe this cycle has largely ended and we expect to see a return to more stable income levels for REITs going forward, with a shift back to all-cash dividends. Additionally, we believe there is the potential for rising dividend levels down the road should we see further improvements on the economic front.

Sincerely,

Steve S. Shigekawa and Brian Jones
Portfolio Co-Managers

3

TICKER SYMBOL

Real Estate Securities Income Fund NRO

SECTOR ALLOCATION

(% of Equity Market Value)
Apartments	10.2	%
Commercial Financing	3.1
Diversified	7.0
Health Care	18.4
Home Financing	5.0
Hybrid	1.3
Industrial	4.1
Lodging/Resorts	4.4
Mixed	0.3
Office	15.7
Regional Malls	12.5
Self Storage	4.3
Shopping Centers	6.4
Specialty	3.1
Other	4.2

PERFORMANCE HIGHLIGHTS as of 10/31/09

Neuberger Berman
	Inception		Average Annual Total Return
NAV1,3,4	Date	1 Year	5 Years	Life of Fund
Real Estate Securities Income Fund	10/28/2003	17.65%	-13.63%	-8.87%
	Inception		Average Annual Total Return
Market Price2,3,4	Date	1 Year	5 Years	Life of Fund
Real Estate Securities Income Fund	10/28/2003	12.86%	-14.36%	-11.54%

Closed-end funds, unlike open-end funds, are not continually offered. There is an initial public offering and, once issued, common shares of closed-end funds are sold in the open market through a stock exchange.

The composition, industries and holdings of the Fund are subject to change. Investment return will fluctuate. Past performance is no guarantee of future results.

4

Endnotes

1  Returns based on the net asset value (NAV) of the Fund.

2  Returns based on the market price of Fund shares on the NYSE Amex.

3  Neuberger Berman Management LLC ("Management") has contractually agreed to waive a portion of the management fees that it is entitled to receive from the Fund. The undertaking lasts until October 31, 2011. Please see the notes to the financial statements for specific information regarding the rate of the management fees waived by Management. Absent such a waiver, the performance of the Fund would be lower.

4  Unaudited performance data current to the most recent month-end are available at www.nb.com.

5

Glossary

FTSE NAREIT Equity REITs Index: An unmanaged index that tracks the performance of all Equity REITs currently listed on the New York Stock Exchange, the NASDAQ National Market System and the NYSE Amex. REITs are classified as Equity if 75% or more of their gross invested book assets are invested directly or indirectly in equity of commercial properties.

Please note that the index does not take into account any fees and expenses or any tax consequences of investing in the individual securities that it tracks and that individuals cannot invest directly in any index. Data about the performance of this index is prepared or obtained by Management and includes reinvestment of all dividends and capital gain distributions. The Fund may invest in securities not included in the index.

6

Schedule of Investments Real Estate Securities Income Fund Inc.

TOP TEN EQUITY HOLDINGS

1	OMEGA Healthcare Investors	9.4	%
2	Health Care REIT	8.0	%
3	Highwoods Properties	7.3	%
4	Hilltop Holdings	6.2	%
5	LTC Properties	5.8	%
6	Parkway Properties	5.6	%
7	Taubman Centers	5.3	%
8	Lexington Corp. Properties Trust	5.1	%
9	Glimcher Realty Trust	4.9	%
10	NorthStar Realty Finance	4.8	%

NUMBER OF SHARES			VALUE† (000's omitted)
Common Stocks (69.9%)
Apartments (6.7%)
	54,581	American Campus Communities	$	1,475
	22,000	AvalonBay Communities		1,513
	104,500	BRE Properties		2,846
	249,000	Equity Residential		7,191
				13,025
Diversified (4.2%)
	137,548	Vornado Realty Trust		8,192	ØØ
Health Care (9.7%)
	182,000	HCP, Inc.		5,385
	57,800	Health Care REIT		2,565
	372,200	OMEGA Healthcare Investors		5,643
	130,352	Ventas, Inc.		5,231
				18,824
Home Financing (7.8%)
	376,500	Annaly Capital Management		6,367
	433,100	Starwood Property Trust		8,718
				15,085
Industrial (6.5%)
	171,000	AMB Property		3,758
	102,222	EastGroup Properties		3,763
	442,000	ProLogis		5,008
				12,529
Office (9.0%)
	70,100	Boston Properties		4,260
	532,100	Brandywine Realty Trust		5,087
	297,381	Highwoods Properties		8,184
				17,531
Real Estate Management & Development (2.1%)
	396,000	Brookfield Properties		4,023

See Notes to Schedule of Investments

7

NUMBER OF SHARES			VALUE† (000's omitted)
Regional Malls (9.8%)
	305,856	Macerich Co.	$	9,114
	128,333	Simon Property Group		8,713
	41,500	Taubman Centers		1,266
				19,093
Self Storage (6.6%)
	328,883	Extra Space Storage		3,148
	119,700	Public Storage, Depositary Shares		3,040
	219,601	Sovran Self Storage		6,610
				12,798
Shopping Centers (6.0%)
	42,300	Federal Realty Investment Trust		2,497
	198,400	Kimco Realty		2,508
	82,814	Regency Centers		2,778	ØØ
	99,035	Tanger Factory Outlet Centers		3,770
				11,553
Specialty (1.5%)
	63,200	Digital Realty Trust		2,852
		Total Common Stocks (Cost $124,243)		135,505
Preferred Stocks (85.3%)
Apartments (9.1%)
	138,000	Apartment Investment & Management, Ser. T		2,869
	129,040	Apartment Investment & Management, Ser. U		2,563
	200,000	Associated Estates Realty, Ser. B		4,862
	296,070	Mid-America Apartment Communities, Ser. H		7,298
				17,592
Commercial Financing (4.8%)
	620,000	NorthStar Realty Finance, Ser. B		9,300

NUMBER OF SHARES			VALUE† (000's omitted)
Diversified (6.7%)
	160,000	Cousins Properties, Ser. B	$	3,200
	580,000	Lexington Corp. Properties Trust, Ser. B		9,825
				13,025
Health Care (18.9%)
	538,000	Health Care REIT, Ser. D		12,912
	470,000	LTC Properties, Ser. F		11,163
	531,797	OMEGA Healthcare Investors, Ser. D		12,630
				36,705
Hybrid (2.0%)
	150,000	iStar Financial, Ser. E		1,083
	200,000	iStar Financial, Ser. G		1,390
	200,000	iStar Financial, Ser. I		1,400
				3,873
Insurance (6.2%)
	513,700	Hilltop Holdings, Ser. A		12,108
Lodging (6.9%)
	170,000	Ashford Hospitality Trust, Ser. D		2,363
	260,800	Eagle Hospitality		78
	27,700	Felcor Lodging Trust, Ser. C		337
	162,800	Hersha Hospitality Trust, Ser. A		2,971
	81,700	Hospitality Properties Trust, Ser. B		1,916
	74,000	Host Hotels & Resorts, Ser. E		1,815
	90,000	Strategic Hotels & Resorts, Ser. A		835	ñ
	116,400	Strategic Hotels & Resorts, Ser. B		1,024
	105,900	Sunstone Hotel Investors, Ser. A		2,066
				13,405
Manufactured Homes (0.1%)
	19,600	American Land Lease, Ser. A		217
Mixed (0.4%)
	32,000	PS Business Parks, Ser. K		765
Office (13.3%)
	100,000	Brandywine Realty Trust, Ser. C		2,030
	80,000	Brandywine Realty Trust, Ser. D		1,643
	40,000	Corporate Office Properties Trust, Ser. H		883
	6,000	Highwoods Properties, Ser. A		6,024
	21,767	HRPT Properties Trust, Ser. B		502
	478,000	Parkway Properties, Ser. D		10,946	È
	100,000	SL Green Realty, Ser. C		2,169
	73,200	SL Green Realty, Ser. D		1,605
				25,802

NUMBER OF SHARES			VALUE† (000's omitted)
Regional Malls (9.6%)
	98,000	Glimcher Realty Trust, Ser. F	$	1,585
	525,100	Glimcher Realty Trust, Ser.  G		7,992
	151,300	Taubman Centers, Ser. G		3,605
	241,600	Taubman Centers, Ser. H		5,355
				18,537
Shopping Centers (4.0%)
	60,000	Cedar Shopping Centers, Ser. A		1,402
	66,000	Developers Diversified Realty, Ser. I		1,111
	225,000	Tanger Factory Outlet Centers, Ser. C		5,287
				7,800
Specialty (3.3%)
	140,000	Digital Realty Trust, Ser. A		3,451
	122,200	Digital Realty Trust, Ser. B		2,968
				6,419
		Total Preferred Stocks (Cost $212,603)		165,548
Short-Term Investments (0.5%)
	432,674	Neuberger Berman Securities Lending Quality Fund, LLC		441	‡
	554,770	State Street Institutional Liquid Reserves Fund Institutional Class		555
		Total Short-Term Investments (Cost $992)		996
		Total Investments (155.7%) (Cost $337,838)		302,049##
		Liabilities, less cash, receivables and other assets [(16.9%)]		(32,808	)
		Liquidation Value of Auction Market Preferred Shares [(38.8%)]		(75,200	)
		Total Net Assets Applicable to Common Shareholders (100.0%)	$	194,041

See Notes to Schedule of Investments

8

Notes to Schedule of Investments

†  The value of investments in equity securities and interest rate swap contracts by Neuberger Berman Real Estate Securities Income Fund Inc. (the "Fund") are determined by Neuberger Berman Management LLC ("Management") primarily by obtaining valuations from independent pricing services based on the latest sale price when that price is readily available. Securities traded primarily on the NASDAQ Stock Market are normally valued by the Fund at the NASDAQ Official Closing Price ("NOCP") provided by NASDAQ each business day. The NOCP is the most recently reported price as of 4:00:02 p.m., Eastern time, unless that price is outside the range of the "inside" bid and asked prices (i.e., the bid and asked prices that dealers quote to each other when trading for their own accounts); in that case, NASDAQ will adjust the price to equal the inside bid or asked price, whichever is closer. Because of delays in reporting trades, the NOCP may not be based on the price of the last trade to occur before the market closes. 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. Management has developed a process to periodically review information provided by independent pricing services. If a valuation is not available from an independent pricing service, the Fund seeks to obtain quotations from principal market makers. If such quotations are not readily available, securities are valued using methods the Board of Directors of the Fund (the "Board") has approved on the belief that they reflect fair value. Numerous factors may be considered when determining the fair value of a security, including available analyst, media or other reports, trading in futures or ADRs and whether the issuer of the security being fair valued has other securities outstanding. Foreign security prices are furnished by independent quotation services and expressed in local currency values. Foreign security prices are currently translated from the local currency into U.S. dollars using the exchange rate as of 4:00 p.m., Eastern time. The Board has approved the use of Interactive Data Pricing and Reference Data, Inc. ("Interactive") to assist in determining the fair value of the Fund's foreign equity securities when changes in the value of a certain index suggest that the closing prices on the foreign exchanges may no longer represent the amount that the Fund could expect to receive for those securities. In this event, Interactive will provide adjusted prices for certain foreign equity securities using a statistical analysis of historical correlations of multiple factors. In the absence of precise information about the market values of these foreign securities as of the close of the New York Stock Exchange, the Board has determined on the basis of available data that prices adjusted in this way are likely to be closer to the prices the Fund could realize on a current sale than are the prices of those securities established at the close of the foreign markets in which the securities primarily trade. Fair value prices are necessarily estimates, and there is no assurance that such a price will be at or close to the price at which the security next trades. Short-term debt securities with less than 60 days until maturity may be valued at cost, which, when combined with interest earned, is expected to approximate market value.

  In accordance with Accounting Standards Codification ("ASC") 820 "Fair Value Measurements and Disclosures" ("ASC 820"), formerly known as Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 157, Fair Value Measurements, investments held by the Fund are carried at "fair value" as defined by ASC 820. Fair value is defined as the price that a 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 are used in determining the value of the Fund's investments some of which are discussed above.

  In addition to defining fair value, ASC 820 established a three-tier hierarchy of inputs to establish a classification of fair 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 significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, amortized cost, etc.)

•  Level 3 – significant 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.

See Notes to Financial Statements

 9

Notes to Schedule of Investments (cont'd)

The following is a summary, by category of Level, of inputs used to value the Fund's investments as of October 31, 2009:

Asset Valuation Inputs

(000's omitted)	Level 1		Level 2		Level 3		Total
Investments:
Common Stocks
Apartments	$	13,025	$	—	$	—	$	13,025
Diversified		8,192		—		—		8,192
Health Care		18,824		—		—		18,824
Home Financing		15,085		—		—		15,085
Industrial		12,529		—		—		12,529
Office		17,531		—		—		17,531
Real Estate Management & Development		4,023		—		—		4,023
Regional Malls		19,093		—		—		19,093
Self Storage		12,798		—		—		12,798
Shopping Centers		11,553		—		—		11,553
Specialty		2,852		—		—		2,852
Total Common Stocks		135,505		—		—		135,505
Preferred Stocks
Apartments		17,592		—		—		17,592
Commercial Financing		9,300		—		—		9,300
Diversified		13,025		—		—		13,025
Health Care		36,705		—		—		36,705
Hybrid		3,873		—		—		3,873
Insurance		—		12,108		—		12,108
Lodging		10,129		3,276		—		13,405
Manufactured Homes		217		—		—		217
Mixed		765		—		—		765
Office		18,895		6,907		—		25,802
Regional Malls		18,537		—		—		18,537
Shopping Centers		7,800		—		—		7,800
Specialty		6,419		—		—		6,419
Total Preferred Stocks		143,257		22,291				165,548
Short-Term Investments		—		996		—		996
Total Investments	$	278,762	$	23,287	$	—	$	302,049

See Notes to Financial Statements

10

Notes to Schedule of Investments (cont'd)

Liability Valuation Inputs

The following is a summary, by category of Level, of inputs used to value the Fund's derivatives as of October 31, 2009:

(000's omitted)	Level 1		Level 2			Level 3		Total
Interest rate swap contracts	$	—	$	(8,109	)	$	—	$	(8,109	)

##  At October 31, 2009, the cost of investments for U.S. federal income tax purposes was $342,548,000. Gross unrealized appreciation of investments was $19,915,000 and gross unrealized depreciation of investments was $60,414,000, resulting in net unrealized depreciation of $40,499,000 based on cost for U.S. federal income tax purposes.

‡  Managed by an affiliate of Management and could be deemed an affiliate of the Fund (see Notes A & E of Notes to Financial Statements).

È  All or a portion of this security is on loan (see Note A of Notes to Financial Statements).

ñ  Restricted security subject to restrictions on resale under federal securities laws. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers under Rule 144A under the Securities Act of 1933, as amended, and have been deemed by the investment manager to be liquid. At October 31, 2009, these securities amounted to approximately $835,000 or 0.4% of net assets applicable to common shareholders.

ØØ  All or a portion of this security is segregated in connection with obligations for interest rate swap contracts.

See Notes to Financial Statements

11

Statement of Assets and Liabilities

Neuberger Berman
(000's omitted except per share amounts)

	REAL ESTATE SECURITIES INCOME FUND
	October 31, 2009
Assets
Investments in securities, at value *† (Notes A & E)—see Schedule of Investments:
Unaffiliated issuers	$	301,608
Affiliated issuers		441
		302,049
Dividends and interest receivable		917
Receivable for securities lending income—net (Note A)		11
Prepaid expenses and other assets		536
Total Assets		303,513
Liabilities
Loans payable (Note A)		25,000
Interest rate swaps, at value (Note A)		8,109
Payable for collateral on securities loaned (Note A)		437
Distributions payable—preferred shares		4
Distributions payable—common shares		168
Payable to investment manager—net (Notes A & B)		107
Payable to administrator (Note B)		65
Interest payable		67
Accrued expenses and other payables		315
Total Liabilities		34,272
Auction Market Preferred Shares Series A, B, C, D, E, F, G & H at liquidation value 21,120 shares authorized, 3,008 shares issued and outstanding $.0001 par value; $25,000 liquidation value per share (Note A)		75,200
Net Assets applicable to Common Shareholders at value	$	194,041
Net Assets applicable to Common Shareholders consist of:
Paid-in capital—common shares	$	700,395
Undistributed net investment income (loss)		153
Accumulated net realized gains (losses) on investments		(462,610	)
Net unrealized appreciation (depreciation) in value of investments		(43,897	)
Net Assets applicable to Common Shareholders at value	$	194,041
Common Shares Outstanding ($.0001 par value; 999,978,880 shares authorized)		65,068
Net Asset Value Per Common Share Outstanding	$	2.98
†Securities on loan, at value	$	428
*Cost of Investments:
Unaffiliated issuers	$	337,401
Affiliated issuers		437
Total cost of investments	$	337,838

See Notes to Financial Statements

 12

Statement of Operations

Neuberger Berman
(000's omitted)

	REAL ESTATE SECURITIES INCOME FUND
	For the Year Ended October 31, 2009
Investment Income:
Income (Note A):
Dividend income—unaffiliated issuers	$	17,489
Interest income—unaffiliated issuers		6
Income from investments in affiliated issuers (Note E)		31
Income from securities loaned—net (Note E)		287
Foreign taxes withheld		(8	)
Total income	$	17,805
Expenses:
Investment management fees (Note B)		1,540
Administration fees (Note B)		641
Auction agent fees (Note B)		192
Audit fees		57
Basic maintenance expense (Note B)		31
Custodian fees (Note B)		117
Insurance expense		25
Legal fees		459
Shareholder reports		293
Stock exchange listing fees		13
Stock transfer agent fees		21
Interest expense (Note A)		1,422
Directors' fees and expenses		45
Tender offer fees (Note H)		104
Miscellaneous		89
Total expenses		5,049
Investment management fees waived (Notes A & B)		(491	)
Expenses reduced by custodian fee expense offset arrangement (Note B)		—
Total net expenses		4,558
Net investment income (loss)	$	13,247
Realized and Unrealized Gain (Loss) on Investments (Note A)
Net realized gain (loss) on:
Sales of investment securities of unaffiliated issuers		(202,032	)
Sales of investment securities of affiliated issuers		747
Interest rate swap contracts		(3,755	)
Change in net unrealized appreciation (depreciation) in value of:
Unaffiliated investment securities		201,266
Affiliated investment securities		134
Interest rate swap contracts		(2,402	)
Net gain (loss) on investments		(6,042	)
Distributions to Preferred Shareholders		(1,632	)
Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations	$	5,573

See Notes to Financial Statements

13

Statements of Changes in Net Assets

Neuberger Berman
(000's omitted)

	REAL ESTATE SECURITIES INCOME FUND
	Year Ended October 31, 2009			Year Ended October 31, 2008
Increase (Decrease) in Net Assets Applicable to Common Shareholders:
From Operations:
Net investment income (loss)	$	13,247		$	57,850
Net realized gain (loss) on investments		(205,040	)		(260,369	)
Change in net unrealized appreciation (depreciation) of investments		198,998			(314,252	)
Distributions to Preferred Shareholders From (Note A):
Net investment income		(1,632	)		(12,122	)
Net realized gain on investments		—			(3,483	)
Total distributions to preferred shareholders		(1,632	)		(15,605	)
Net increase (decrease) in net assets applicable to common shareholders resulting from operations		5,573			(532,376	)
Distributions to Common Shareholders From (Note A):
Net investment income		(9,575	)		(44,162	)
Tax return of capital		(32,947	)		(73,589	)
Net realized gain on investments		—			(33,836	)
Total distributions to common shareholders		(42,522	)		(151,587	)
From Capital Share Transactions (Note D):
Proceeds from reinvestment of dividends and distributions		347			—
Proceeds from shares issued in connection with the acquisition of Neuberger Berman Realty Income Fund Inc. (Note G)		—			393,483
Payments for shares redeemed in connection with tender offers (Note H)		(17,698	)		—
Total net proceeds from capital share transactions		(17,351	)		393,483
Net Increase (Decrease) in Net Assets Applicable to Common Shareholders		(54,300	)		(290,480	)
Net Assets Applicable to Common Shareholders:
Beginning of year		248,341			538,821
End of year	$	194,041		$	248,341
Undistributed net investment income (loss) at end of year	$	153		$	—
Distributions in excess of net investment income at end of year	$	—		$	(1,240	)

See Notes to Financial Statements

14

Notes to Financial Statements Real Estate Securities Income Fund Inc.

Note A—Summary of Significant Accounting Policies:

1  General: The Fund was organized as a Maryland corporation on August 28, 2003 as a non-diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"). The Board may classify or re-classify any unissued shares of capital stock into one or more classes of preferred stock without the approval of shareholders.

  The preparation of financial statements in accordance with U.S. generally accepted accounting principles 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  Foreign currency translation: The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are currently translated into U.S. dollars using the exchange rates as of 4:00 p.m., Eastern time, to determine the value of investments, other assets and liabilities. Purchase and sale prices of securities, and income and expenses, are translated into U.S. dollars at the prevailing rate of exchange on the respective dates of such transactions. Net unrealized foreign currency gain (loss), if any, arises from changes in the value of assets and liabilities, other than investments in securities, as a result of changes in exchange rates and is stated separately in the Statement of Operations.

4  Securities transactions and investment income: Securities transactions are recorded on trade date for financial reporting purposes. Dividend income is recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, including accretion of original issue discount, where applicable, and accretion of discount on short-term investments, if any, is recorded on the accrual basis. Realized gains and losses from securities transactions and foreign currency transactions, if any, are recorded on the basis of identified cost and stated separately in the Statement of Operations.

5  Income tax information: It is the policy of the Fund to continue to qualify as a regulated investment company by complying with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its earnings to its shareholders. Therefore, no federal income or excise tax provision is required.

  The Fund has adopted the provisions of ASC 740 "Income Taxes"("ASC 740"), formerly known as FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109". ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit 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 benefits 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 prior three fiscal years 2006 - 2008. As of October 31, 2009 the Fund did not have any unrecognized tax benefits.

  Income distributions and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. 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 a whole.

15

  As determined on October 31, 2009, permanent differences resulting primarily from different book and tax accounting for income recognized on interest rate swaps, return of capital adjustments, nondeductible restructuring costs and the characterization of distributions from real estate investment trusts ("REITs") were reclassified at fiscal year-end. These reclassifications had no effect on net income, net asset value applicable to common shareholders or net asset value per common share of the Fund.

  The tax character of distributions paid during the years ended October 31, 2009 and October 31, 2008 was as follows:

Distributions Paid From:
Ordinary Income				Long-Term Capital Gain				Tax Return of Capital				Total
2009		2008		2009		2008		2009		2008		2009		2008
$	11,207,546	$	56,284,624	$	—	$	37,318,860	$	32,946,770	$	73,589,036	$	44,154,316	$	167,192,520

  As of October 31, 2009, the components of distributable earnings (accumulated losses) on a U.S. federal income tax basis were as follows:

Undistributed Ordinary Income		Undistributed Long-Term Gain		Unrealized Appreciation (Depreciation)			Loss Carryforwards and Deferrals			Total
$	—	$	—	$	(48,282,519	)	$	(457,899,726	)	$	(506,182,245	)

  The differences between book basis and tax basis distributable earnings are attributable primarily to timing differences of distribution payments, timing differences of wash sales, partnership basis adjustments, capital loss carryforwards and timing differences of income recognized on interest rate swaps.

  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. As determined at October 31, 2009, the Fund had unused capital loss carryforwards available for federal income tax purposes to offset net realized capital gains, if any, as follows:

Expiring In:
2015			2016		2017
$	3,523,048	(1)	$	247,894,765	$	206,481,913

(1)  Of the total capital loss carryforwards shown above, $3,523,048 was acquired on March 7, 2008 in the merger with Neuberger Berman Realty Income Fund Inc. The use of these losses to offset future gains may be limited in a given year.

6  Distributions to shareholders: 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 shareholders. The Fund has adopted a policy to pay common shareholders 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 any borrowings and the level of Fund expenses. In an effort to maintain a stable distribution amount, the Fund may pay distributions consisting of net investment income, 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 realized capital gains. The composition of the Fund's distributions for the calendar year 2009 will be reported to Fund shareholders on IRS Form 1099DIV. 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 Subchapter M of the Internal Revenue Code. Distributions to common shareholders 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 shareholders are accrued and determined as described in Note A-8.

16

  The Fund invests a significant portion of its assets in securities issued by real estate companies, including REITs. The distributions the Fund receives from REITs are generally comprised of income, capital gains, and return of capital, but the REITs do not report this information to the Fund until the following calendar year. At October 31, 2009, the Fund estimated these amounts within the financial statements since the information is not available from the REITs until after the Fund's fiscal year-end. For the year ended October 31, 2009, the character of distributions paid to shareholders disclosed within the Statements of Changes in Net Assets is based on estimates made at that time. All estimates are based upon REIT information sources available to the Fund together with actual IRS Forms 1099DIV received to date. Based on past experience it is possible that a portion of the Fund's distributions during the most recently completed fiscal year will be considered tax return of capital but the actual amount of tax return of capital, if any, is not determinable until after the Fund's fiscal year-end. After calendar year-end, when the Fund learns the nature of the distributions paid by REITs during that year, distributions previously identified as income are often recharacterized as return of capital and/or capital gain. After all applicable REITs have informed the Fund of the actual breakdown of distributions paid to the Fund during its fiscal year, estimates previously recorded are adjusted on the books of the Fund to reflect actual results. As a result, the composition of the Fund's distributions as reported herein may differ from the final composition determined after calendar year-end and reported to Fund shareholders on IRS Form 1099DIV.

  On October 30, 2009, the Fund declared a monthly distribution to common shareholders in the amount of $0.02 per share, payable on November 30, 2009 to shareholders of record on November 16, 2009, with an ex-date of November 12, 2009. Subsequent to October 31, 2009, the Fund declared a monthly distribution to common shareholders in the amount of $0.02 per share, payable on December 31, 2009 to shareholders of record on December 15, 2009, with an ex-date of December 11, 2009.

7  Expense allocation: Certain expenses are applicable to multiple funds. 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 attributed to the Fund are allocated among the Fund and the other investment companies in the complex or series thereof on the basis of relative net assets, except where a more appropriate allocation of expenses to each investment company in the complex or series thereof can otherwise be made fairly.

8  Financial Leverage: On December 10, 2003, the Fund re-classified 12,000 unissued shares of capital stock as Series A Auction Market Preferred Shares, Series B Auction Market Preferred Shares, Series C Auction Market Preferred Shares and Series D Auction Market Preferred Shares ("AMPS"). On January 27, 2004, the Fund issued 2,450 Series A AMPS, 2,450 Series B AMPS, 2,450 Series C AMPS and 2,450 Series D AMPS. On March 7, 2008, Neuberger Berman Realty Income Fund Inc. merged with and into the Fund. In connection with the reorganization, the Fund renamed its Series B AMPS, Series C AMPS and Series D AMPS as Series C AMPS, Series G AMPS and Series H AMPS, respectively. In addition, the Fund re-classified 9,120 unissued shares of capital stock as Series B AMPS, Series D AMPS, Series E AMPS, and Series F AMPS and issued 2,280 Series B AMPS, 2,2 80 Series D AMPS, 2,280 Series E AMPS, and 2,280 Series F AMPS. All AMPS 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 ("Liquidation Value").

  Since February 2008, the market for auction rate preferred securities has experienced an unprecedented number of failed auctions. A failed auction occurs when sellers outnumber bidders, and as a result, sellers cannot sell all, and in many cases any, of their auction rate preferred securities. When a failed auction occurs, the distribution rate for auction rate preferred securities resets to a maximum rate, which is typically determined according to a formula applied to a "base" rate. Historically, if there were not a sufficient number of bids to purchase all the auction rate preferred securities submitted to be sold in an auction, one or more broker-dealers would voluntarily allocate their own capital to purchase the remaining auction rate preferred securities. In doing so, the broker-dealer(s) would prevent a failed auction and, therefore, payment of distributions at the maximum rate. In 2008, most

17

broker-dealers ceased allocating their capital to auctions for auction rate preferred securities, resulting in the extraordinary number of failed auctions.

  Beginning in February 2008, the auctions for the Fund's AMPS have consistently failed. Although the failed auctions have resulted in a current lack of liquidity for preferred shareholders, they are not an event of default for the Fund nor have they affected the credit quality of the AMPS. The Fund has paid, and continues to pay, distributions on its AMPS that are set at the maximum rate, which is the greater of 125% of the base rate or 125 basis points plus the base rate (the base rate is the LIBOR Rate for the period most closely approximating the applicable AMPS series' distribution period) as a result of the failed auctions.

  If auctions continue to fail and the maximum rate increases due to changes in short term interest rates, the Fund's returns for common shareholders could be adversely affected. The Fund continues to monitor the developments in the AMPS market and consider the interests of the common and preferred shareholders when evaluating any potential solutions.

  Except when the Fund has declared a special rate period, distributions to preferred shareholders, which are cumulative, are accrued daily and paid every 7 days for Series A AMPS, Series B AMPS, Series C AMPS, Series D AMPS, Series E AMPS, and Series F AMPS and every 28 days for Series G AMPS and Series H AMPS. Distribution rates are reset every 7 days for Series A AMPS, Series B AMPS, Series C AMPS, Series D AMPS, Series E AMPS, and Series F AMPS and every 28 days for Series G AMPS and Series H AMPS based on the results of an auction, except during special rate periods. For the year ended October 31, 2009, distribution rates ranged from 1.48% to 3.41% for Series A, 1.48% to 3.39% for Series B, 1.48% to 3.34% for Series C, 1.48% to 3.34% for Series D, 1.47% to 3.27% for Series E, 1.48% to 3.45% for Series F, 1.49% to 5.84% for Series G, and 1.49% to 4.37% for Series H AMPS. The Fund declared distributions to preferred shareholders for the period November 1, 2009 to November 30, 2009 of $11,699, $10,981, $11,703, $10,979, $10,982, $10,987, $11,890 and $11,895 for Series A, Series B, Series C, Series D, Series E, Series F, Series G, and Series H AMPS, respectively.

  The Fund may redeem AMPS, in whole or in part, on the second business day preceding any distribution payment date at Liquidation Value. The Fund is also subject to certain restrictions relating to the AMPS. Failure to comply with these restrictions could preclude the Fund from declaring any distributions to common shareholders or repurchasing common shares and/or could trigger the mandatory redemption of AMPS at Liquidation Value. The holders of AMPS are entitled to one vote per share and will vote with holders of common shares as a single class, except that the AMPS will vote separately as a class on certain matters, as required by law or the Fund's charter. The holders of the AMPS, 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 AMPS for two consecutive years.

  In September 2008, the Fund entered into a $240 million secured, committed, three-year revolving credit facility (the "Facility") with State Street Bank and Trust Company ("State Street"). Under the terms of the Facility, interest is charged on LIBOR Loans at an adjusted LIBOR rate and is payable on the last day of each interest period. The Fund has paid an up-front fee which is being amortized over the life of the Facility and pays a facility fee in arrears based on the entire amount of the Facility. These fees are included in the interest expense that is reflected in the Statement of Operations. Under the terms of the Facility, the Fund is required to satisfy certain collateral requirements and maintain a certain level of net assets. By October 31, 2008, the Fund had used borrowings under the Facility to redeem 8,352 of its outstanding AMPS with an aggregate liquidation preference of $208 million. The Fund subsequently repaid those borrowings. At October 31, 2009, there were $25 million in loans outstanding under the Facility.

  During the period November 1, 2008 to October 31, 2009, the Fund redeemed 2,580 of its outstanding AMPS with an aggregate liquidation preference of $64.5 million. All AMPS redemptions were made at a liquidation price of $25,000 per share plus any accumulated and unpaid dividends. For the year ended October 31, 2009, the aggregate

18

number of AMPS that the Fund has redeemed and the aggregate redemption amount (excluding the final distribution payment) are below:

Series	Shares Redeemed		Amount Redeemed
Series A		333	$	8,325,000
Series B		312		7,800,000
Series C		333		8,325,000
Series D		312		7,800,000
Series E		312		7,800,000
Series F		312		7,800,000
Series G		333		8,325,000
Series H		333		8,325,000

9  Security lending: A third party, eSecLending, currently serves as exclusive lending agent for the Fund. eSecLending, as agent, has assisted the Fund in conducting a bidding process to try to identify a principal that would pay a guaranteed amount to the Fund in consideration of the Fund entering into an exclusive securities lending arrangement. During the Fund's fiscal year, the Fund was guaranteed a particular level of income from a principal. As a result of a bidding process on October 1, 2009, no principal currently has an exclusive arrangement with the Fund and the Fund is no longer guaranteed a particular level of income.

  Under the securities lending arrangement, the Fund receives cash collateral at the beginning of each transaction equal to at least 102% of the prior day's market value of the loaned securities (105% in the case of international securities). The Fund may invest all the cash collateral in Neuberger Berman Securities Lending Quality Fund, LLC ("Quality Fund"), a fund managed by Neuberger Berman Fixed Income LLC (formerly known as Lehman Brothers Asset Management LLC) ("NBFI"), an affiliate of Management. Effective July 1, 2009, Dwight Asset Management Company LLC became the Sub-Adviser to the Quality Fund. The Quality Fund is not a money market fund that is registered under the 1940 Act and does not operate in accordance with all requirements of Rule 2a-7 under the 1940 Act. There is no assurance that the Quality Fund will maintain a $1.00 share price.

  From November 1, 2008 to November 3, 2008, the Quality Fund's NAV was $0.99 per share, which could have affected the NAV of the Fund if securities loans were outstanding on those days. For the period from November 4, 2008 to October 31, 2009, the Quality Fund's price per share was at least $1.00. The market value of the Fund's investments in the Quality Fund as of the fiscal year ended October 31, 2009, if any, is reflected in the Fund's Schedule of Investments. If it were necessary to liquidate assets in the Quality Fund to meet returns on outstanding securities loans at a time when the Quality Fund's price per share was less than $1.00, the Fund may not receive an amount from the Quality Fund that is equal in amount to the collateral the Fund would be required to return to the borrower of the securities and the Fund would be required to make up for this shortfall. In addition, as a result of recent reduced liquidity in the credit and fixed income markets, it may be difficult to dispose quickly of some securities in the Quality Fund at the price at which the Quality Fund is carrying them.

  Net income from the lending program represents any amounts received from a principal plus income earned on the cash collateral invested in Quality Fund or in other investments, if applicable, less cash collateral fees and other expenses associated with the loans. For the fiscal year ended October 31, 2009, the Fund received net income under the securities lending arrangement of approximately $286,766, which is reflected in the Statement of Operations under the caption "Income from securities loaned — net." For the fiscal year ended October 31, 2009, "Income from securities loaned — net" consisted of approximately $589,014 in income earned on cash collateral and amounts received from a principal (including approximately $431,215 of interest income earned from the Quality Fund), less fees and expenses paid of approximately $302,248.

19

10  Repurchase agreements: The Fund may enter into repurchase agreements with institutions that Management has determined are creditworthy. Each repurchase agreement is recorded at cost. The Fund requires that the securities purchased in a repurchase agreement be transferred to the custodian in a manner sufficient to enable the Fund to assert a perfected security interest in those securities in the event of a default under the repurchase agreement. The Fund monitors, on a daily basis, the value of the securities transferred to ensure that their value, including accrued interest, is greater than amounts owed to the Fund under each such repurchase agreement.

11  Transactions with other funds managed by Neuberger Berman Management LLC: Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund may invest in a money market fund managed by Management or an affiliate. Through August 10, 2009, the Fund invested in Neuberger Berman Prime Money Fund ("Prime Money"), as approved by the Board. Prime Money sought to provide the highest available current income consistent with safety and liquidity. For any cash that the Fund invested in Prime Money, Management waived a portion of its management fee equal to the management fee it received from Prime Money on those assets (the "Arrangement"). For the year ended October 31, 2009, management fees waived under this Arrangement amounted to $3,440 and are reflected in the Statement of Operations under the caption "Investment management fees waived." For the year ended October 31, 2009, income earned under this Arrangement amounted to $31,039 and is reflected in the Statement of Operations under the caption "Income from investments in affiliated issuers."

  On August 10, 2009, the Fund ceased investing in Prime Money. On this date, the Fund's shares of Prime Money were redeemed in exchange for portfolio holdings of Prime Money, which were used to purchase Institutional Class shares of State Street Institutional Liquid Reserves Fund.

12  Concentration of risk: Under normal market conditions, the Fund's investments will be concentrated in income-producing common equity securities, preferred securities, convertible securities and non-convertible debt securities issued by companies deriving the majority of their revenue from the ownership, construction, financing, management and/or sale of commercial, industrial, and/or residential real estate. The value of the Fund's shares may fluctuate more due to economic, legal, cultural, geopolitical or technological developments affecting the United States real estate industry, or a segment of the United States real estate industry in which the Fund owns a substantial position, than would the shares of a fund not concentrated in the real estate industry.

13  Derivative Instruments: The Fund is exposed to interest rate risk due to its use of leverage. During the year ended October 31, 2009, the Fund's use of derivatives was limited to interest rate swap contracts. The Fund adopted ASC 815 "Derivatives and Hedging" ("ASC 815"), formerly known as FASB Statement of Financial Accounting Standards No. 161 "Disclosures about Derivative Instruments and Hedging Activities", effective December 1, 2008. The Fund has disclosed derivative transactions for the year ending October 31, 2009, although ASC 815 only requires disclosures for the six months ending October 31, 2009.

  Interest Rate Swaps: The Fund may enter into 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 an interest rate swap contract, the Fund agrees to pay the swap counter party a fixed-rate payment in exchange for the counter party's paying the Fund a variable-rate payment that is intended to approximate all or a portion of the Fund's variable-rate payment obligation on the Fund's AMPS. 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 swap transaction, marked to market daily.

  Risks may arise if the counter party to a swap contract fails to comply with the terms of its contract. The loss incurred by the failure of a counter party 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.

20

  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 shareholders or its total net increase (decrease) in net assets applicable to common shareholders resulting from operations. At October 31, 2009, the Fund had an outstanding interest rate swap contract as follows:

				Rate Type
Swap Counter Party	Notional Amount(2)		Termination Date	Fixed-rate Payments Made by the Fund			Variable-rate Payments Received by the Fund(1)			Accrued Net Interest Receivable (Payable)			Unrealized Appreciation (Depreciation)			Total Fair Value
Citibank, N.A.	$	75,000,000	July 2, 2012		5.440	%		0.245	%	$	(324,648	)	$	(7,783,975	)	$	(8,108,623	)

(1)  30 day LIBOR (London Interbank Offered Rate) at September 30, 2009.

(2)  The notional amount at period end is indicative of the volume throughout the period.

  At October 31, 2009, the Fund held the following derivatives (not designated as hedging instruments under ASC 815) as open contracts which are grouped by primary risk exposure below:

Liability Derivatives
	Interest Rate Risk
Interest Rate Swap Contract(1)	$	(8,108,623	)
Total Value	$	(8,108,623	)

(1)  "Interest Rate Swap Contract" reflects the appreciation (depreciation) of the interest rate swap contract plus accrued interest, which is reported as "Interest rate swaps, at value" within the Statement of Assets and Liabilities.

  The impact of the use of derivative instruments as reflected in the Statement of Operations during the year ended October 31, 2009, was as follows:

Realized Gain (Loss)(1)
	Interest Rate Risk
Interest Rate Swap Contract	$	(3,754,890	)
Total Realized Gain (Loss)	$	(3,754,890	)
Change in Appreciation (Depreciation)(2)
	Interest Rate Risk
Interest Rate Swap Contract	$	(2,402,237	)
Total Change in Appreciation (Depreciation)	$	(2,402,237	)

(1)  Statement of Operations location: Net realized gain (loss) on interest rate swap contracts.

(2)  Statement of Operations location: Change in net unrealized appreciation (depreciation) in value of interest rate swap contracts.

14  Investments in foreign securities: Investing in foreign securities may involve certain sovereign and other risks, in addition to the credit and market risks normally associated with domestic securities. These additional risks include the possibility of adverse political and economic developments (including political instability, nationalization, expropriation, or confiscatory taxation) and the potentially adverse effects of unavailability of public information regarding issuers, less governmental supervision and regulation of financial markets, reduced liquidity of certain financial markets, and the lack of uniform accounting, auditing, and financial reporting standards or the

21

application of standards that are different or less stringent than those applied in the United States. Foreign securities also may experience greater price volatility, higher rates of inflation, and delays in settlement.

15  Reclassifications: Certain amounts in the prior year have been reclassified to conform to the current year presentation.

16  Indemnifications: Like many other companies, the Fund's organizational documents provide that its officers and 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.

Note B—Management Fees, Administration Fees, 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 fee at the annual rate of 0.60% of its average daily Managed Assets. Managed Assets equal the total assets of the Fund, less liabilities other than the aggregate indebtedness entered into for purposes of leverage. For purposes of calculating Managed Assets, the Liquidation Value of any AMPS outstanding and borrowings under the Line of Credit are not considered liabilities.

  Management has contractually agreed to waive a portion of the management fees it is entitled to receive from the Fund at the following annual rates:

Year Ended October 31,	% of Average Daily Managed Assets
2009		0.19
2010		0.13
2011		0.07

  Management has not contractually agreed to waive any portion of its fees beyond October 31, 2011.

  In connection with the May 2009 tender offer and the Tender Offer Program, more fully described in Note H, Management has agreed to voluntarily extend for one year the contractual fee waivers currently in place, so that the fee waiver as a percentage of average daily Managed Assets would be:

Year Ended October 31,	% of Average Daily Managed Assets
2010		0.19
2011		0.13
2012		0.07

  For the year ended October 31, 2009, such waived fees amounted to $487,786.

  The Fund retains Management as its administrator under an Administration Agreement. The Fund pays Management an administration fee at the annual rate of 0.25% 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.

  Neuberger Berman LLC (formerly known as Neuberger Berman, LLC) ("Neuberger") is retained by Management to furnish it with investment recommendations and research information without added cost to the Fund. Several individuals who are officers and/or Directors of the Fund are also employees of Neuberger and/or Management.

  During the reporting period, the predecessor of Management, the investment manager of the Fund, and Neuberger, the sub-adviser of the Fund, were wholly owned subsidiaries of Lehman Brothers Holdings Inc. ("Lehman

22

Brothers"), a publicly owned holding company. On September 15, 2008, Lehman Brothers filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. On December 3, 2008, NBSH Acquisition, LLC ("NBSH"), an entity organized by key members of Neuberger Berman's senior management, was selected as the successful bidder in the public auction to acquire a majority interest in Neuberger Berman's business and the fixed income and certain alternative asset management businesses of Lehman Brothers' Investment Management Division (together with Neuberger Berman, the "Acquired Businesses") (the "Acquisition"). On December 22, 2008, the bankruptcy court having jurisdiction over the Lehman Brothers matter approved the sale of the Acquired Businesses to NBSH (or its successor or assign), as the successful bidder.

  The Acquisition closed on May 4, 2009. The Acquired Businesses are now indirectly owned by, among others, portfolio managers, Neuberger Berman's management team, and certain key members and senior professionals who are employed in various parts of the Neuberger Berman complex of companies, with a minority interest retained by Lehman Brothers and certain affiliates of Lehman Brothers.

  The closing of the Acquisition resulted in an "assignment" of the Fund's Management Agreement and Sub-Advisory Agreement. Such an assignment, by law, automatically terminated those agreements. Accordingly, prior to the closing the Board, including the Directors who are not "interested persons" of the Fund's investment manager and its affiliates or the Fund, considered and approved a new Management Agreement and Sub-Advisory Agreement for the Fund. The new agreements, which are virtually identical to those previously in effect, were also approved by a vote of the Fund's shareholders.

  These events have not had a material impact on the Fund or its operations. Management and Neuberger continue to operate in the ordinary course of business as the investment manager and sub-adviser of the Fund.

  The Fund has an expense offset arrangement in connection with its custodian contract. For the year ended October 31, 2009, the impact of this arrangement was a reduction of expenses of $67.

  In connection with the settlement of each AMPS auction, the Fund pays, through the auction agent, a service fee to each participating broker-dealer based upon the aggregate liquidation preference of the AMPS held by the broker-dealer's customers. For any auction preceding a rate period of less than one year, the service fee is paid at the annual rate of 1/4 of 1% if the auction is successful, and up to 3/20 of 1% if the auction fails; for any auction preceding a rate period of one year or more, the service fee is paid at a rate agreed to by the Fund and the broker-dealer.

  In order to satisfy rating agency requirements, the Fund is required to provide each rating agency that rates its AMPS a report on a monthly basis verifying that the Fund is maintaining eligible assets having a discounted value equal to or greater than the Preferred Shares Basic Maintenance Amount, which is a minimum level set by each rating agency as one of the conditions to maintain its rating on the AMPS. "Discounted value" refers to the fact that a 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 a fee to State Street for the preparation of this report, which is reflected in the Statement of Operations under the caption "Basic maintenance expense."

Note C—Securities Transactions:

  During the year ended October 31, 2009, there were purchase and sale transactions (excluding short-term securities and interest rate swap contracts) of $110,145,205 and $191,371,121, respectively.

  During the year ended October 31, 2009, brokerage commissions on securities transactions from affiliated brokers were as follows: Neuberger received $0.

23

Note D—Capital:

  At October 31, 2009, the common shares outstanding and the common shares of the Fund owned by Neuberger were as follows:

Common Shares Outstanding		Common Shares Owned by Neuberger
	65,068,197		16,817

  Transactions in common shares for the years ended October 31, 2009 and October 31, 2008, were as follows:

	2009			2008
Shares Issued on Reinvestment of Dividends and Distributions		178,750			—
Redemption of Common Shares (Note H)		(6,994,335	)		—
Shares Issued in Connection with the Reorganization of Neuberger Berman Realty Income Fund Inc. (Note G)		—			38,567,343
Net Increase (Decrease) in Common Shares Outstanding		(6,815,585	)		38,567,343

Note E—Investments In Affiliates:

Name of Issuer	Balance of Shares Held October 31, 2008		Gross Purchases and Additions		Gross Sales and Reductions		Balance of Shares Held October 31, 2009		Value October 31, 2009		Income from Investments in Affiliated Issuers Included in Total Income
Neuberger Berman Prime Money Fund Trust Class*		3,735,983		101,371,056		105,107,039		—	$	—	$	31,039
Neuberger Berman Securities Lending Quality Fund, LLC**		49,920,922		346,843,636		396,331,884		432,674		441,327		431,215
Total									$	441,327	$	462,254

*  Prime Money was also managed by Management and may have been considered an affiliate since it had the same officers, Board members, and investment manager as the Fund and because, at times, the Fund may have owned 5% or more of the outstanding voting securities of Prime Money.

**  Quality Fund, a fund managed by NBFI, an affiliate of Management, is used to invest cash the Fund receives as collateral for securities loans as approved by the Board. Because all shares of Quality Fund are held by funds in the related investment management complex, Quality Fund may be considered an affiliate of the Fund.

Note F—Recent Accounting Pronouncement:

  In accordance with the provision set forth in ASC 855 "Subsequent Events"("ASC 855"), formerly known as FAS 165, "Subsequent Events," Management has evaluated the possibility of subsequent events existing in the Fund's financial statements through December 17, 2009. Management has determined that there are no subsequent events that, in accordance with ASC 855, would need to be disclosed in the Fund's financial statements through this date.

Note G—Reorganization:

  On March 7, 2008, Neuberger Berman Realty Income Fund Inc. ("NRI") merged with and into Neuberger Berman Real Estate Securities Income Fund Inc. ("NRO") pursuant to an Agreement and Plan of Reorganization approved

24

by each of NRO's and NRI's shareholders. The merger was accomplished by a tax-free exchange of the assets of NRI, which aggregated $621,483,892 (including $31,340,224 of unrealized appreciation), for 38,567,343 NRO common shares (valued at $393,483,892) and 9,120 NRO AMPS (valued at $228,000,000) and the assumption by NRO of the liabilities of NRI. The combined net assets of NRO immediately after the merger were $1,206,403,766.

  The merger was based on the relative net asset value of NRO and NRI. On March 7, 2008, the net asset value per common share for NRI was $14.3754 and for NRO was $10.2028. As a result, former NRI common shareholders received 1.409 NRO common shares for each NRI common share previously held. NRI common shareholders subsequently received cash in lieu of fractional shares not held in NRI's Distribution Reinvestment Plan. In addition, NRI preferred shareholders received an equivalent number of shares of new series of NRO AMPS.

Note H—Tender Offer Program:

  The Fund conducted a tender offer that commenced on May 1, 2009 and expired on May 29, 2009. The Fund offered to purchase up to 10% of its outstanding common shares at a price equal to 98% of its NAV per share determined on the day the tender offer expired. Under the terms of the tender offer, on June 5, 2009, the Fund accepted 3,569,693 common shares, representing approximately 5% of its then-outstanding common shares. Final payment was made at $2.08 per share, representing 98% of the NAV per share on May 29, 2009.

  In addition, the Fund's Board authorized a semi-annual tender offer program consisting of up to four tender offers over a two-year period ("Tender Offer Program"). Under the Tender Offer Program, if the Fund's common shares trade at an average daily discount to NAV per share of greater than 10% during a 12-week measurement period, the Fund would conduct a tender offer for between 5% and 20% of its outstanding common shares at a price equal to 98% of its NAV per share determined on the day the tender offer expires.

  The initial measurement period under the Tender Offer Program commenced June 5, 2009 and ended August 28, 2009 (the "Measurement Period"). The Fund traded at an average daily discount to NAV of greater than 10% during the Measurement Period and, therefore, conducted a tender offer that commenced September 18, 2009 and ended October 16, 2009. The Fund offered to purchase up to 5% of its outstanding common shares at a price equal to 98% of its NAV per share determined on the day the tender offer expired. The Fund's tender offer was oversubscribed. In accordance with the terms of the tender offer, the Fund accepted all shares properly tendered by shareholders holding fewer than 100 common shares that tendered all their shares and that provided appropriate certification as part of the tender ("odd-lot adjustment"). The Fund purchased the remainder of the common shares on a pro-rata basis, after making the odd-lot adjustment, based on the number of shares properly tendered. Under the terms of the tender offer, on October 23, 2009, the Fund accepted 3,424,642 common shares, representing approximately 5% of its then-outstanding common shares. Final payment was made at $3.00 per share, representing 98% of the NAV per share on October 16, 2009.

  In connection with the May 2009 tender offer and the Tender Offer Program, Management agreed to voluntarily extend for one year the contractual management fee waiver currently in place to offset some of the expenses associated with, or possible increases in the Fund's expense ratio resulting from, the tender offers (see Note B for additional disclosure). The Board retains the ability, consistent with its fiduciary duty, to opt out of the Tender Offer Program should circumstances arise that the Board believes could cause a material negative effect on the Fund or the Fund's shareholders.

Note I—Market Events:

  During the past year, the U.S. and global economies and the financial markets experienced significant disruptions, the effects of which are continuing to work their way through the economy. Because these market events are widespread and unprecedented, it is difficult to predict their ultimate severity or duration or the way in which they will affect particular issuers or market sectors.

25

Financial Highlights

Real Estate Securities Income Fund Inc.

The following table includes selected data for a share outstanding throughout each year and other performance information derived from the Financial Statements.

	Year Ended October 31,
	2009			2008			2007			2006			2005
Common Share Net Asset Value, Beginning of Year	$	3.45		$	16.17		$	21.23		$	16.95		$	15.78
Income From Investment Operations Applicable to Common Shareholders:
Net Investment Income (Loss)¢		.19			1.00			1.08			.82			.59
Net Gains or Losses on Securities (both realized and unrealized)		(.05	)		(10.32	)		(3.43	)		5.28			2.00
Common Share Equivalent of Distributions to Preferred Shareholders From:
Net Investment Income¢		(.02	)		(.21	)		(.17	)		(.19	)		(.12	)
Net Capital Gains¢		—			(.06	)		(.22	)		(.16	)		(.08	)
Tax Return of Capital¢		—			—			—			—			(.02	)
Total Distributions to Preferred Shareholders		(.02	)		(.27	)		(.39	)		(.35	)		(.22	)
Total From Investment Operations Applicable to Common Shareholders		.12			(9.59	)		(2.74	)		5.75			2.37
Less Distributions to Common Shareholders From:
Net Investment Income		(.14	)		(.91	)		(1.00	)		(.79	)		(.66	)
Net Capital Gains		—			(.70	)		(1.32	)		(.68	)		(.45	)
Tax Return of Capital		(.46	)		(1.52	)		—			—			(.09	)
Total Distributions to Common Shareholders		(.60	)		(3.13	)		(2.32	)		(1.47	)		(1.20	)
Accretive Effect of Tender Offers		.01			—			—			—			—
Common Share Net Asset Value, End of Year	$	2.98		$	3.45		$	16.17		$	21.23		$	16.95
Common Share Market Value, End of Year	$	2.61		$	3.15		$	14.87		$	18.16		$	14.20
Total Return, Common Share Net Asset Value†		17.65	%		(70.68	)%		(13.17	)%		37.59	%		16.61	%
Total Return, Common Share Market Value†		12.86	%		(70.89	)%		(6.66	)%		40.49	%		6.90	%
Ratios/Supplemental Data††
Net Assets Applicable to Common Shareholders, End of Year (in millions)	$	194.0		$	248.3		$	538.8		$	707.2		$	564.7
Preferred Shares, at Liquidation Value ($25,000 per share liquidation preference) (in millions)	$	75.2		$	139.7		$	245.0		$	245.0		$	245.0
Ratios are calculated using Average Net Assets Applicable to Common Shareholders
Ratio of Gross Expenses#		2.87	%Ø		1.40	%		1.05	%		1.04	%		1.08	%
Ratio of Net Expenses‡		2.87	%Ø		1.40	%‡‡		1.05	%		1.04	%		1.08	%
Ratio of Net Investment Income (Loss) Excluding Preferred Share DistributionsØØ		8.34	%		9.76	%		5.57	%		4.46	%		3.56	%
Portfolio Turnover Rate		41	%		37	%¢¢		17	%		11	%		8	%
Asset Coverage Per Preferred Share, End of Year@	$	89,510		$	69,444		$	80,030		$	97,208		$	82,650
Loans Payable (in millions)	$	25		$	—		$	—		$	—		$	—
Asset Coverage Per $1,000 of Loans Payable@@	$	11,770		$	—		$	—		$	—		$	—

See Notes to Financial Highlights

26

Notes to Financial Highlights Real Estate Securities Income Fund Inc.

†  Total return based on per share net asset value reflects the effects of changes in net asset value on the performance of the Fund during each fiscal period. Total return based on per share market value assumes the purchase of common shares at the market price on the first day and sale of common shares at the market price on the last day of the period indicated. Dividends and distributions, if any, are assumed to be reinvested at prices obtained under the Fund's distribution reinvestment plan. Results represent past performance and do not guarantee future results. Current returns may be lower or higher than the performance data quoted. Investment returns may fluctuate and shares when sold may be worth more or less than original cost. Total return would have been lower if Management had not waived a portion of the investment management fee.

#  The Fund is required to calculate an operating expense ratio without taking into consideration any expense reductions related to expense offset arrangements.

‡  After waiver of a portion of the investment management fee by Management. Had Management not undertaken such action, the annualized ratios of net operating expenses to average daily net assets applicable to common shareholders would have been:

Year Ended October 31,
2009			2008			2007			2006			2005
	3.18	%		1.72	%		1.39	%		1.39	%		1.44	%

@  Calculated by subtracting the Fund's total liabilities (excluding accumulated unpaid distributions on AMPS) from the Fund's total assets and dividing by the number of AMPS outstanding.

@@  Calculated by subtracting the Fund's total liabilities (excluding accumulated unpaid distributions on AMPs and the Loans payable) from the Fund's total assets and dividing by the outstanding loans payable balance.

††  Expense ratios do not include the effect of distributions to holders of AMPS. Income ratios include income earned on assets attributable to AMPS outstanding.

Ø  For the year ended October 31, 2009, interest expense is included in expense ratios. The annualized ratio of interest expense to average net assets applicable to common shareholder is .90%.

¢  Calculated based on the average number of shares outstanding during each fiscal period.

¢¢  Portfolio turnover excludes purchases and sales of securities by NRI prior to the merger date (see Note G of Notes to Financial Statements).

‡‡  Includes merger-related expenses. If such expenses were not included, the annualized ratio of net expenses to average net assets applicable to common shareholders for the year ended October 31, 2008, would have been 1.36%.

ØØ  The annualized ratios of preferred share distributions to average net assets applicable to common shareholders were:

Year Ended October 31,
2009			2008			2007			2006		2005
	1.03	%		2.63	%		2.02	%	1.88	%		1.30	%

27

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of
Neuberger Berman Real Estate Securities Income Fund Inc.

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Neuberger Berman Real Estate Securities Income Fund Inc. (the "Fund") as of October 31, 2009, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and sig nificant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2009 by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Neuberger Berman Real Estate Securities Income Fund Inc. at October 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

  

Boston, Massachusetts
December 17, 2009

28

Distribution Reinvestment Plan

The Bank of New York Mellon ("Plan Agent") will act as Plan Agent for shareholders 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 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 common stock of the Fund ("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 pric e 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 Participant's account. For the

29

purpose of cash investments, the Plan Agent may commingle each Participant's funds with those of other shareholders of the Fund for whom the Plan Agent similarly acts as agent, and the average price (including brokerage commissions) of all Shares purchased by the Plan Agent as Plan Agent shall be the price per Share allocable to each Participant in connection therewith.

The Plan Agent may hold each Participant's Shares acquired pursuant to the Plan together with the Shares of other shareholders 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 shareholders 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 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 shall be governed by the laws of the State of Maryland.

30

Directory

Investment Manager and Administrator

Neuberger Berman Management LLC
605 Third Avenue, 2nd Floor
New York, NY 10158-0180
877.461.1899 or 212.476.8800

Sub-Adviser

Neuberger Berman LLC
605 Third Avenue
New York, NY 10158-3698

Custodian

State Street Bank and Trust Company
2 Avenue de Lafayette
Boston, MA 02111

Stock Transfer Agent

The Bank of New York Mellon
480 Washington Boulevard
Jersey City, NJ 07317

Legal Counsel

K&L Gates LLP
1601 K Street, NW
Washington, DC 20006

Independent Registered Public Accounting Firm

Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116

31

Directors and Officers

The following tables set forth information concerning the directors ("Directors") and officers ("Officers") of the Fund. All persons named as Directors and Officers also serve in similar capacities for other funds administered or managed by Management and Neuberger. The Fund's Statement of Additional Information includes additional information about Directors as of the time of the Fund's most recent public offering and is available upon request, without charge, by calling (877) 461-1899.

Information about the Board of Directors

Name, (Year of Birth) and Address(1)	Position(2) with Fund and Length of Time Served	Principal Occupation(s)(3)	Number of Portfolios in Fund Complex Overseen by Director	Other Directorships Held Outside Fund Complex by Director
CLASS I
Independent Directors
Faith Colish (1935)	Director since 2003	Counsel, Carter Ledyard & Milburn LLP (law firm) since October 2002; formerly, Attorney-at-Law and President, Faith Colish, A Professional Corporation, 1980 to 2002.	46	Formerly, Director (1997 to 2003) and Advisory Director (2003 to 2006), ABA Retirement Funds (formerly, American Bar Retirement Association) (not-for-profit membership corporation).
Michael M. Knetter (1960)	Director since 2007	Dean, School of Business, University of Wisconsin — Madison; formerly, Professor of International Economics and Associate Dean, Amos Tuck School of Business — Dartmouth College, 1998 to 2002.	46	Trustee, Northwestern Mutual Series Fund, Inc., since February 2007; Director, Wausau Paper, since 2005; Director, Great Wolf Resorts, since 2004.
Cornelius T. Ryan (1931)	Director since 2003	Founding General Partner, Oxford Partners and Oxford Bioscience Partners (venture capital investing) and President, Oxford Venture Corporation, since 1981.	46	None.
Peter P. Trapp (1944)	Director since 2003	Retired; formerly, Regional Manager for Mid-Southern Region, Ford Motor Credit Company, September 1997 to 2007; formerly, President, Ford Life Insurance Company, April 1995 to August 1997.	46	None.

32

Name, (Year of Birth) and Address(1)	Position(2) with Fund and Length of Time Served	Principal Occupation(s)(3)	Number of Portfolios in Fund Complex Overseen by Director	Other Directorships Held Outside Fund Complex by Director
Director who is an "Interested Person"
Robert Conti* (1956)	Chief Executive Officer, President and Director since 2008; prior thereto, Executive Vice President in 2008 and Vice President 2006 to 2008	Managing Director, Neuberger, since 2007; formerly, Senior Vice President, Neuberger, 2003 to 2006; formerly, Vice President, Neuberger, 1999 to 2003; President and Chief Executive Officer, Management, since 2008; formerly, Senior Vice President, Management, 2000 to 2008.	46	Chairman of the Board, Staten Island Mental Health Society since 2008.
CLASS II
Independent Directors
John Cannon (1930)	Director since 2003	Consultant; formerly, Chairman, CDC Investment Advisers (registered investment adviser), 1993 to January 1999; formerly, President and Chief Executive Officer, AMA Investment Advisors, an affiliate of the American Medical Association.	46	Formerly, Independent Trustee or Director of three series of Oppenheimer Funds: Oppenheimer Limited Term New York Municipal Fund, Rochester Fund Municipals, and Oppenheimer Convertible Securities Fund (1992 to 2009).
C. Anne Harvey (1937)	Director since 2003	President, C.A. Harvey Associates, since October 2001; formerly, Director, AARP, 1978 to December 2001.	46	Formerly, President, Board of Associates to The National Rehabilitation Hospital's Board of Directors, 2001 to 2002; formerly, Member, Individual Investors Advisory Committee to the New York Stock Exchange Board of Directors, 1998 to June 2002.

33

Name, (Year of Birth) and Address(1)	Position(2) with Fund and Length of Time Served	Principal Occupation(s)(3)	Number of Portfolios in Fund Complex Overseen by Director	Other Directorships Held Outside Fund Complex by Director
George W. Morriss (1947)	Director since 2007	Retired; formerly, Executive Vice President and Chief Financial Officer, People's Bank, Connecticut (a financial services company), 1991 to 2001.	46	Manager, Old Mutual 2100 fund complex (consisting of six funds) since October 2006 for four funds and since February 2007 for two funds; formerly, Member NASDAQ Issuers' Affairs Committee, 1995 to 2003.
Tom D. Seip (1950)	Director since 2003; Chairman of the Board since 2008; Lead Independent Director from 2006 to 2008	General Partner, Seip Investments LP (a private investment partnership); formerly, President and CEO, Westaff, Inc. (temporary staffing), May 2001 to January 2002; formerly, Senior Executive at the Charles Schwab Corporation, 1983 to 1998, including Chief Executive Officer, Charles Schwab Investment Management, Inc., and Trustee, Schwab Family of Funds and Schwab Investments, 1997 to 1998, and Executive Vice President-Retail Brokerage, Charles Schwab & Co., Inc., 1994 to 1997.	46	Director, H&R Block, Inc. (financial services company), since May 2001; Chairman, Compensation Committee, H&R Block, Inc., since 2006; formerly, Director, Forward Management, Inc. (asset management company), 1999 to 2006.

34

Name, (Year of Birth) and Address(1)	Position(2) with Fund and Length of Time Served	Principal Occupation(s)(3)	Number of Portfolios in Fund Complex Overseen by Director	Other Directorships Held Outside Fund Complex by Director
Director who is an "Interested Person"
Jack L. Rivkin* (1940)	Director since 2003; formerly, President 2003 to 2008	Formerly, Executive Vice President and Chief Investment Officer, Neuberger Berman Holdings LLC (holding company), 2002 to August 2008 and 2003 to August 2008, respectively; formerly, Managing Director and Chief Investment Officer, Neuberger, December 2005 to August 2008 and 2003 to August 2008, respectively; formerly, Executive Vice President, Neuberger, December 2002 to 2005; formerly, Director and Chairman, Management, December 2002 to August 2008; formerly, Executive Vice President, Citigroup Investments, Inc., September 1995 to February 2002; formerly, Executive Vice President, Citigroup Inc., September 1995 to February 2002.	46	Director, Idealab (private company), since 2009; Director, Distributed World Power (private company), since 2009; Director, Dale Carnegie and Associates, Inc. (private company), since 1998; Director, Solbright, Inc. (private company), since 1997; formerly, Director, New York Society of Security Analysts (2006 to 2008).

35

Name, (Year of Birth) and Address(1)	Position(2) with Fund and Length of Time Served	Principal  Occupation(s)(3)	Number of Portfolios in Fund Complex Overseen by Director	Other Directorships Held Outside Fund Complex by Director
CLASS III
Independent Directors
Martha C. Goss (1949)	Director since 2007	President, Woodhill Enterprises Inc./Chase Hollow Associates LLC (personal investment vehicle), since 2006; Chief Operating and Financial Officer, Hopewell Holdings LLC/ Amwell Holdings, LLC (a holding company for a healthcare reinsurance company start-up), since 2003; formerly, Consultant, Resources Connection (temporary staffing), 2002 to 2006.	46	Director, Ocwen Financial Corporation (mortgage servicing), since 2005; Director, American Water (water utility), since 2003; Director, Channel Reinsurance (financial guaranty reinsurance), since 2006; Advisory Board Member, Attensity (software developer), since 2005; Director, Allianz Life of New York (insurance), since 2005; Director, Financial Women's Association of New York (not for profit association), since 2003; Trustee Emerita, Brown University, since 1998.
Robert A. Kavesh (1927)	Director since 2003	Retired; Marcus Nadler Professor Emeritus of Finance and Economics, New York University Stern School of Business; formerly, Executive Secretary-Treasurer, American Finance Association, 1961 to 1979.	46	Formerly, Director, The Caring Community (not-for-profit), 1997 to 2006; formerly, Director, DEL Laboratories, Inc. (cosmetics and pharmaceuticals), 1978 to 2004; formerly, Director, Apple Bank for Savings, 1979 to 1990; formerly, Director, Western Pacific Industries, Inc., 1972 to 1986 (public company).

36

Name, (Year of Birth) and Address(1)	Position(2) with Fund and Length of Time Served	Principal Occupation(s)(3)	Number of Portfolios in Fund Complex Overseen by Director	Other Directorships Held Outside Fund Complex by Director
Howard A. Mileaf (1937)	Director since 2003	Retired; formerly, Vice President and General Counsel, WHX Corporation (holding company), 1993 to 2001.	46	Formerly, Director, Webfinancial Corporation (holding company), 2002 to 2008; formerly, Director WHX Corporation (holding company), January 2002 to June 2005; formerly, Director, State Theatre of New Jersey (not-for-profit theater), 2000 to 2005.
Edward I. O'Brien (1928)	Director since 2003	Retired; formerly, Member, Investment Policy Committee, Edward Jones, 1993 to 2001; President, Securities Industry Association ("SIA") (securities industry's representative in government relations and regulatory matters at the federal and state levels), 1974 to 1992; Adviser to SIA, November 1992 to November 1993.	46	Formerly, Director, Legg Mason, Inc. (financial services holding company), 1993 to July 2008; formerly, Director, Boston Financial Group (real estate and tax shelters), 1993 to 1999.
Candace L. Straight (1947)	Director since 2003	Private investor and consultant specializing in the insurance industry; formerly, Advisory Director, Securitas Capital LLC (a global private equity investment firm dedicated to making investments in the insurance sector), 1998 to December 2003.	46	Director, Montpelier Re (reinsurance company), since 2006; formerly, Director, National Atlantic Holdings Corporation (property and casualty insurance company), 2004 to 2008; formerly, Director, The Proformance Insurance Company (property and casualty insurance company), 2004 to 2008; formerly, Director, Providence Washington Insurance Company (property and casualty insurance company), December 1998 to March 2006; formerly, Director, Summit Global Partners (insurance brokerage firm), 2000 to 2005.

37

Name, (Year of Birth) and Address(1)	Position(2) with Fund and Length of Time Served	Principal Occupation(s)(3)	Number of Portfolios in Fund Complex Overseen by Director	Other Directorships Held Outside Fund Complex by Director
Director who is an "Interested Person"
Joseph V. Amato* (1962)	Director since 2008	President and Director, Neuberger Berman Group LLC, since 2009; President and Chief Executive Officer, Neuberger and Neuberger Berman Holdings LLC (including its predecessor, Neuberger Berman Inc.), since 2007; Chief Investment Officer, Neuberger, since 2009; Chief Investment Officer (Equities) and Managing Director, Management, since 2009; Managing Director, Neuberger Berman Fixed Income LLC (formerly known as Lehman Brothers Asset Management LLC) ("NBFI"), since 2007; Board member of NBFI since 2006; formerly, Global Head of Asset Management of Lehman Brothers Holdings Inc.'s ("LBHI") Investment Management Division, 2006 to 2009; formerly, member of LBHI's Investment Management Division's Executive Management Committee, 2006 to 2009; formerly, Managing Director, Lehman Brothers Inc. ("LBI"), 2006 to 2008; formerly, Chief Recruiting and Development Officer, LBI, 2005 to 2006; formerly, Global Head of LBI's Equity Sales and a Member of its Equi ties Division Executive Committee, 2003 to 2005.	46	Member of Board of Advisors, McDonough School of Business, Georgetown University, since 2001; Member of New York City Board of Advisors, Teach for America, since 2005; Trustee, Montclair Kimberley Academy (private school), since 2007.

(1)  The business address of each listed person is 605 Third Avenue, New York, New York 10158.

(2)  The Board of Directors shall at times be divided as equally as possible into three classes of Directors designated Class I, Class II, and Class III. The terms of office of Class I, Class II, and Class III Directors shall expire at the annual meeting of shareholders held in 2012, 2010, and 2011, respectively, and at each third annual meeting of shareholders thereafter.

38

(3)  Except as otherwise indicated, each individual has held the positions shown for at least the last five years.

*  Indicates a Fund Director who is an "interested person" within the meaning of the 1940 Act. Mr. Amato and Mr. Conti are interested persons of the Fund by virtue of the fact that each is an officer of Management, Neuberger and/or their affiliates. Mr. Rivkin may be deemed an interested person of the Fund by virtue of the fact that, until August 2008, he was a director of Management and an officer of Neuberger.

39

Information about the Officers of the Fund

Name, (Year of Birth), and Address(1)	Position and Length of Time Served	Principal Occupation(s)(2)
Andrew B. Allard (1961)	Anti-Money Laundering Compliance Officer since 2003	Senior Vice President, Neuberger, since 2006; Deputy General Counsel, Neuberger, since 2004; formerly, Vice President, Neuberger, 2000 to 2005; formerly, Associate General Counsel, Neuberger, 1999 to 2004; Anti-Money Laundering Compliance Officer, nine registered investment companies for which Management acts as investment manager and administrator (six since 2002, two since 2003 and one since 2006).
Claudia A. Brandon (1956)	Executive Vice President since 2008 and Secretary since 2003	Senior Vice President, Neuberger, since 2007 and Employee since 1999; formerly, Vice President, Neuberger, 2002 to 2006; Senior Vice President, Management, since 2008 and Assistant Secretary since 2004; formerly, Vice President-Mutual Fund Board Relations, Management, 2000 to 2008; Executive Vice President, nine registered investment companies for which Management acts as investment manager and administrator (nine since 2008); Secretary, nine registered investment companies for which Management acts as investment manager and administrator (three since 1985, three since 2002, two since 2003 and one since 2006).
Maxine L. Gerson (1950)	Executive Vice President since 2008 and Chief Legal Officer since 2005 (only for purposes of sections 307 and 406 of the Sarbanes-Oxley Act of 2002)	Senior Vice President, Neuberger, since 2002; Deputy General Counsel and Assistant Secretary, Neuberger, since 2001; Senior Vice President, Management, since 2006; Secretary and General Counsel, Management, since 2004; Executive Vice President, nine registered investment companies for which Management acts as investment manager and administrator (nine since 2008); Chief Legal Officer (only for purposes of sections 307 and 406 of the Sarbanes-Oxley Act of 2002), nine registered investment companies for which Management acts as investment manager and administrator (eight since 2005 and one since 2006).
Sheila R. James (1965)	Assistant Secretary since 2003	Vice President, Neuberger, since 2008 and Employee since 1999; formerly, Assistant Vice President, Neuberger, 2007; Assistant Secretary, nine registered investment companies for which Management acts as investment manager and administrator (six since 2002, two since 2003 and one since 2006).
Brian Kerrane (1969)	Vice President since 2008	Senior Vice President, Neuberger, since 2006; formerly, Vice President, Neuberger, 2002 to 2006; Vice President, Management, since 2008 and Employee since 1991; Vice President, nine registered investment companies for which Management acts as investment manager and administrator (nine since 2008).
Kevin Lyons (1955)	Assistant Secretary since 2003	Assistant Vice President, Neuberger, since 2008 and Employee since 1999; Assistant Secretary, nine registered investment companies for which Management acts as investment manager and administrator (eight since 2003 and one since 2006).

40

Name, (Year of Birth), and Address(1)	Position and Length of Time Served	Principal Occupation(s)(2)
Owen F. McEntee, Jr. (1961)	Vice President since 2008	Vice President, Neuberger, since 2006; Employee, Management, since 1992; Vice President, nine registered investment companies for which Management acts as investment manager and administrator (nine since 2008).
John M. McGovern (1970)	Treasurer and Principal Financial and Accounting Officer since 2005; prior thereto, Assistant Treasurer since 2003	Senior Vice President, Neuberger, since 2007; formerly, Vice President, Neuberger, 2004 to 2006; Employee, Management, since 1993; Treasurer and Principal Financial and Accounting Officer, nine registered investment companies for which Management acts as investment manager and administrator (eight since 2005 and one since 2006); formerly, Assistant Treasurer, eight registered investment companies for which Management acts as investment manager and administrator, 2002 to 2005.
Andrew Provencher (1965)	Vice President since 2008	Managing Director, Management, since 2008; Managing Director, Neuberger, since 2005; formerly, Senior Vice President, Neuberger, 2003 to 2005; formerly, Vice President, Neuberger, 1999 to 2003; Vice President, nine registered investment companies for which Management acts as investment manager and administrator (nine since 2008).
Frank Rosato (1971)	Assistant Treasurer since 2005	Vice President, Neuberger, since 2006; Employee, Management, since 1995; Assistant Treasurer, nine registered investment companies for which Management acts as investment manager and administrator (eight since 2005 and one since 2006).
Neil S. Siegel (1967)	Vice President since 2008	Managing Director, Management, since 2008; Managing Director, Neuberger, since 2006; formerly, Senior Vice President, Neuberger, 2004 to 2006; Vice President, nine registered investment companies for which Management acts as investment manager and administrator (nine since 2008); formerly, Head of Institutional Marketing, Morgan Stanley Investment Management, 1993 to 2004.
Chamaine Williams (1971)	Chief Compliance Officer since 2005	Senior Vice President, Neuberger, since 2007; Chief Compliance Officer, Management, since 2006; Chief Compliance Officer, nine registered investment companies for which Management acts as investment manager and administrator (eight since 2005 and one since 2006); formerly, Senior Vice President, Lehman Brothers Inc., 2007 to 2008; formerly, Vice President, Lehman Brothers Inc., 2003 to 2006; formerly, Chief Compliance Officer, Lehman Brothers Asset Management Inc., 2003 to 2007; formerly, Chief Compliance Officer, Lehman Brothers Alternative Investment Management LLC, 2003 to 2007; formerly, Vice President, UBS Global Asset Management (US) Inc. (formerly, Mitchell Hutchins Asset Management, a wholly-owned subsidiary of PaineWebber Inc.), 1997 to 2003.

(1)  The business address of each listed person is 605 Third Avenue, New York, New York 10158.

(2)  Except as otherwise indicated, each individual has held the positions shown for at least the last five years.

41

Proxy Voting Policies and Procedures

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 1-800-877-9700 (toll-free) and on the website of the Securities and Exchange Commission 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, without charge, by calling 1-800-877-9700 (toll-free), on the website of the Securities and Exchange Commission 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, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The information on Form N-Q is available upon request, without charge, by calling 1-800-877-9700 (toll-free).

Notice to Shareholders (Unaudited)

In early 2010 you will receive information to be used in filing your 2009 tax returns, which will include a notice of the exact tax status of all distributions paid to you by the Fund during calendar 2009. Please consult your own tax advisor for details as to how this information should be reflected on your tax returns.

8.88% of dividends distributed during the fiscal year ended October 31, 2009 qualifies for the dividends received deduction for corporate shareholders.

For the fiscal year ended October 31, 2009, the Fund designates $1,097,869, or up to the maximum amount of such dividends allowable pursuant to the Internal Revenue Code, as qualified dividend income eligible for reduced tax rates. These lower rates range from 5% to 15% depending upon an individual's tax bracket. Complete information regarding the Fund's distributions during the calendar year 2009 will be reported in conjunction with Form 1099DIV.

42

Report of Votes of Shareholders

An annual meeting of shareholders of Neuberger Berman Real Estate Securities Income Fund Inc. was held on May 13, 2009. Upon completion of the acquisition of Neuberger Berman Management LLC ("Old Management") and Neuberger Berman, LLC ("NB, LLC") by NBSH Acquisition, LLC, an entity organized by key members of Neuberger Berman's senior management (the "Acquisition"), the Fund's management and sub-advisory agreements with Old Management and NB, LLC, respectively, automatically terminated. To provide for continuity of management, interim management and sub-advisory agreements became effective upon completion of the Acquisition on May 4, 2009. Shareholders voted to approve a new management agreement between the Fund and a newly-formed successor entity to Old Management ("New Management") and a new sub-advisory agreement with respect to the Fund between New Management and Neuberger Berman LLC (formerly known as Neuberger Berman, LLC) ("Neuberger").

Shareholders also voted to elect six Class I Directors to serve until the annual meeting of shareholders in 2012, or until their successors are elected and qualified. Class II Directors (which include John Cannon, C. Anne Harvey, George W. Morriss, Tom D. Seip and Jack L. Rivkin) and Class III Directors (which include Joseph V. Amato, Martha C. Goss, Robert A. Kavesh, Howard A. Mileaf, Edward A. O'Brien and Candace L. Straight) continue to hold office until the annual meeting in 2010 and 2011, respectively.

PROPOSAL 1—TO APPROVE A NEW MANAGEMENT AGREEMENT BETWEEN THE FUND AND NEW MANAGEMENT

Common and Preferred Shares

Votes For		Votes Against		Abstentions		Broker Non-Votes
	33,581,617		2,193,057		1,055,823		9,993,318

PROPOSAL 2—TO APPROVE A NEW SUB-ADVISORY AGREEMENT WITH RESPECT TO THE FUND BETWEEN NEW MANAGEMENT AND NEUBERGER

Common and Preferred Shares

Votes For		Votes Against		Abstentions		Broker Non-Votes
	33,412,799		2,251,920		1,165,778		9,993,318

PROPOSAL 3—TO APPROVE THE ELECTION OF SIX CLASS I DIRECTORS TO SERVE UNTIL THE ANNUAL MEETING OF SHAREHOLDERS IN 2012:

Common and Preferred Shares

	Votes For		Votes Withheld		Abstentions		Broker Non-Votes
Faith Colish		42,860,998		3,962,817		—		—
Robert Conti		42,896,633		3,927,182		—		—
Michael M. Knetter		42,883,875		3,939,940		—		—
Cornelius T. Ryan		42,858,957		3,964,858		—		—
Peter P. Trapp		42,918,337		3,905,478		—		—

43

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 shareholders and is not an offer of shares of the Fund.

H0650 1209

Item 2. Code of Ethics  

The Board of Directors (“Board”) of Neuberger Berman Real Estate Securities Income Fund Inc. (“Registrant”) adopted a code of ethics that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions (“Code of Ethics”). For the period covered by this Form N-CSR, there were no amendments to the Code of Ethics and there were no waivers from the Code of Ethics granted to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
  

A copy of the Code of Ethics is incorporated by reference to the Registrant’s Form N-CSR, Investment Company Act file number 811-21421 (filed on July 10, 2006). The Code of Ethics is also available, without charge, by calling 1-800-877-9700 (toll-free).
  

Item 3. Audit Committee Financial Expert
  

The Board has determined that the Registrant has two audit committee financial experts serving on its audit committee. The Registrant’s audit committee financial experts are Martha Goss and George Morriss. Ms. Goss and Mr. Morriss are independent directors as defined by Form N-CSR.
  

Item 4. Principal Accountant Fees and Services
  

Ernst & Young LLP (“E&Y”) serves as independent registered public accounting firm to the Registrant.
  
(a) Audit Fees
  
The aggregate fees billed for professional services rendered by E&Y for the audit of the annual financial statements or services that are normally provided by E&Y in connection with statutory and regulatory filings or engagements were $50,000 and $40,000 for the fiscal years ended 2008 and 2009, respectively.
  
(b) Audit-Related Fees
  
The aggregate fees billed to the Registrant for assurance and related services by E&Y that are reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported above in Audit Fees were $6,500 and $6,500 for the fiscal years ended 2008 and 2009, respectively. The nature of the services provided involved agreed upon procedures relating to the Preferred Shares. The Audit Committee approved 0% and 0% of these services provided by E&Y for the fiscal years ended 2008 and 2009, respectively, pursuant to the waiver provisions of Rule 2-01(c)(7)(i)(C) of Regulation S-X.

The fees billed to other entities in the investment company complex for assurance and related services by E&Y that are reasonably related to the performance of the audit that the Audit Committee was required to approve because the engagement related directly to the operations and financial reporting of the Registrant were $0 and $0 for the fiscal years ended 2008 and 2009, respectively.
  
(c) Tax Fees
  
The aggregate fees billed to the Registrant for professional services rendered by E&Y for tax compliance, tax advice, and tax planning were $10,000 and $10,000 for the fiscal years ended 2008 and
    

2009, respectively. The nature of the services provided comprised tax compliance, tax advice, and tax planning. The Audit Committee approved 0% and 0% of these services provided by E&Y for the fiscal years ended 2008 and 2009, respectively, pursuant to the waiver provisions of Rule 2-01(c)(7)(i)(C) of Regulation S-X.
  
The fees billed to other entities in the investment company complex for professional services rendered by E&Y for tax compliance, tax advice, and tax planning that the Audit Committee was required to approve because the engagement related directly to the operations and financial reporting of the Registrant were $0 and $0 for the fiscal years ended 2008 and 2009, respectively.
  
(d) All Other Fees
  
The aggregate fees billed to the Registrant for products and services provided by E&Y, other than services reported in Audit Fees, Audit-Related Fees, and Tax Fees were $0 and $0 for the fiscal years ended 2008 and 2009, respectively.
  
The fees billed to other entities in the investment company complex for products and services provided by E&Y, other than services reported in Audit Fees, Audit-Related Fees, and Tax Fees, that the Audit Committee was required to approve because the engagement related directly to the operations and financial reporting of the Registrant were $0 and $0 for the fiscal years ended 2008 and 2009, respectively.
  
(e) Audit Committee’s Pre-Approval Policies and Procedures

(1) The Audit Committee’s pre-approval policies and procedures for the Registrant to engage an accountant to render audit and non-audit services delegate to each member of the Committee the power to pre-approve services between meetings of the Committee.
  
(2) None of the services described in paragraphs (b) through (d) above were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
  

(f) Hours Attributed to Other Persons

  
Not applicable.
  
(g) Non-Audit Fees

  
Non-audit fees billed by E&Y for services rendered to the Registrant were $16,500 and $16,500 for the fiscal years ended 2008 and 2009, respectively.
  
Non-audit fees billed by E&Y for services rendered to the Registrant’s investment adviser and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the Registrant were $400,000 and $100,000 for the fiscal years ended 2008 and 2009, respectively.
  
(h) The Audit Committee of the Board considered whether the provision of non-audit services rendered to the Registrant’s investment adviser and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the Registrant that were not pre-approved by the Audit Committee because the engagement did not relate directly to the operations and financial reporting of the Registrant is compatible with maintaining E&Y’s independence.
  

Item 5. Audit Committee of Listed Registrants
  

The Board has established a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Its members are Martha C. Goss, George W. Morriss, Cornelius T. Ryan (Chairman), Tom D. Seip, and Peter P. Trapp.
  

Item 6. Schedule of Investments
  

The complete schedule of investments for the Registrant is disclosed in the Registrant’s Annual Report, which is included as Item 1 of this Form N-CSR.
  

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
  

The Board has delegated to Neuberger Berman Management LLC (“NB Management”) the responsibility to vote proxies related to the securities held in the Registrant’s portfolio. Under this authority, NB Management is required by the Board to vote proxies related to portfolio securities in the best interests of the Registrant and its stockholders. The Board permits NB Management to contract with a third party to obtain proxy voting and related services, including research of current issues.
  
NB Management has implemented written Proxy Voting Policies and Procedures (“Proxy Voting Policy”) that are designed to reasonably ensure that NB Management votes proxies prudently and in the best interest of its advisory clients for whom NB Management has voting authority, including the Registrant. The Proxy Voting Policy also describes how NB Management addresses any conflicts that may arise between its interests and those of its clients with respect to proxy voting.
  
NB Management’s Proxy Committee is responsible for developing, authorizing, implementing and updating the Proxy Voting Policy, overseeing the proxy voting process and engaging and overseeing any independent third-party vendors as voting delegate to review, monitor and/or vote proxies. In order to apply the Proxy Voting Policy noted above in a timely and consistent manner, NB Management utilizes Glass, Lewis & Co. (“Glass Lewis”) to vote proxies in accordance with NB Management’s voting guidelines.
  
NB Management’s guidelines adopt the voting recommendations of Glass Lewis. NB Management retains final authority and fiduciary responsibility for proxy voting. NB Management believes that this process is reasonably designed to address material conflicts of interest that may arise between NB Management and a client as to how proxies are voted.
  
In the event that an investment professional at NB Management believes that it is in the best interests of a client or clients to vote proxies in a manner inconsistent with NB Management’s proxy voting guidelines or in a manner inconsistent with Glass Lewis recommendations, the Proxy Committee will review information submitted by the investment professional to determine that there is no material conflict of interest between NB Management and the client with respect to the voting of the proxy in that manner.
  
If the Proxy Committee determines that the voting of a proxy as recommended by the investment professional presents a material conflict of interest between NB Management and the client or clients with respect to the voting of the proxy, the Proxy Committee shall: (i) take no further action, in which case Glass Lewis shall vote such proxy in accordance with the proxy voting guidelines or as Glass Lewis recommends; (ii) disclose such conflict to the client or clients and obtain written direction from

the client as to how to vote the proxy; (iii) suggest that the client or clients engage another party to determine how to vote the proxy; or (iv) engage another independent third party to determine how to vote the proxy.
  

Item 8. Portfolio Managers of Closed-End Management Investment Companies

(a)(1) The following Portfolio Managers have day-to-day management responsibility of the Registrant’s portfolio as of the date of the filing of this Form N-CSR.
  

Steve S. Shigekawa is a Vice President of NB Management and a Senior Vice President of Neuberger Berman LLC. He has been a co-portfolio manager of the Registrant since 2008 and was an associate portfolio manger of the Registrant from 2005 to 2008. Prior to that, he was an analyst with the firm covering REIT securities since 2002.
  

Brian Jones, CFA, is a Vice President of NB Management and Neuberger Berman LLC. He has been co-portfolio manager of the Registrant since 2008. After joining the firm in 1999, he was an associate analyst. In 2003, he became an analyst covering REIT securities and was named an associate portfolio manager for separately managed accounts investing in REIT securities in 2007.
  

(a)(2) The table below describes the other accounts for which each of the Registrant’s Portfolio Managers has day-to-day management responsibility as of October 31, 2009.

Type of Account	Number of Accounts Managed	Total Assets Managed ($ millions)	Number of Accounts Managed for which Advisory Fee is Performance-Based	Assets Managed for which Advisory Fee is Performance-Based ($ millions)
Steven S. Shigekawa
Registered Investment Companies*	2	$172	—	—
Other Pooled Investment Vehicles	0	—	—	—
Other Accounts**	4	$70	—	—
Brian Jones
Registered Investment Companies*	2	$172	—	—
Other Pooled Investment Vehicles	0	—	—	—
Other Accounts**	4	$70	—	—

*Registered Investment Companies include: Mutual Funds.

**Other Accounts include: Institutional Separate Accounts, Sub-Advised, and Managed Accounts (WRAP Accounts).
  

Conflicts of Interest
  
Actual or apparent conflicts of interest may arise when a Portfolio Manager has day-to-day management responsibilities with respect to more than one fund or other account. The management of multiple funds and accounts (including proprietary accounts) may give rise to actual or potential conflicts of interest if the funds and accounts have different or similar objectives, benchmarks, time horizons, and fees, as the Portfolio Manager must allocate his time and investment ideas across

multiple funds and accounts. The Portfolio Manager may execute transactions for another fund or account that may adversely impact the value of securities held by the Registrant, and which may include transactions that are directly contrary to the positions taken by the Registrant. For example, a Portfolio Manager may engage in short sales of securities for another account that are the same type of securities in which the Registrant also invests. In such a case, the Portfolio Manager could be seen as harming the performance of the Registrant for the benefit of the account engaging in short sales if the short sales cause the market value of the securities to fall. Additionally, if a Portfolio Manager identifies a limited investment opportunity that may be suitable for more than one fund or other account, the Registrant may not be able to take full advantage of that opportunity. If one account were to buy or sell portfolio securities shortly before another account bought or sold the same securities, it could affect the price paid or received by the second account. Securities selected for funds or accounts other than the Registrant may outperform the securities selected for the Registrant. Finally, a conflict of interest may arise if NB Management and a Portfolio Manager have a financial incentive to favor one account over another, such as a performance-based management fee that applies to one account but not the Registrant or other accounts for which the Portfolio Manager is responsible.

NB Management, Neuberger Berman LLC and the Registrant have adopted certain compliance procedures which are designed to address these types of conflicts. However, there is no guarantee that such procedures will detect each and every situation in which a conflict arises.

(a)(3) Compensation (as of October 31, 2009)
  

A portion of the compensation paid to each Portfolio Manager for management of the mutual funds in the fund family is determined by comparisons to pre-determined peer groups and benchmarks, as opposed to a system dependent on a percent of management fees. The Portfolio Managers are paid a base salary that is not dependent on performance. Each Portfolio Manager also has a “target bonus,” which is set each year and can be increased or decreased prior to payment based in part on performance measured against the relevant peer group and benchmark. Performance is measured on a three-year rolling average in order to emphasize longer-term performance. There is also a subjective component to determining the bonus, which consists of the following factors: (i) the individual’s willingness to work with the marketing and sales groups; (ii) his or her effectiveness in building a franchise; and (iii) client servicing. Senior management determines this component in appropriate cases. There are additional components that comprise the Portfolio Managers’ compensation packages, including: (i) whether the Portfolio Manager was a partner/principal of Neuberger Berman LLC prior to Neuberger Berman Holdings LLC’s initial public offering; (ii) for more recent hires, incentives that may have been negotiated at the time the Portfolio Manager joined the Neuberger Berman complex; and (iii) the total amount of assets for which the Portfolio Manager is responsible.
  

Certain Portfolio Managers may manage products other than mutual funds, such as high net worth separate accounts. For the management of these accounts, a Portfolio Manager will generally receive a percentage of pre-tax revenue determined on a monthly basis less third party payouts (e.g., a “finder’s fee” or “referral fee” paid to a third party). To determine the percentage of revenue a Portfolio Manager receives, the aggregate fees collected on the accounts for which the Portfolio Manager are responsible are compared to a predetermined benchmark of fees that is grown 4% per annum.
  
NB Management’s Portfolio Managers have always had a degree of independence that they would not get at other firms that have, for example, investment committees. NB Management believes that its Portfolio Managers are retained not only through compensation and opportunities for advancement, but also by a collegial and stable money management environment.
  

NB Management believes the measurement versus the peer groups on a three-year rolling average basis creates a meaningful disincentive to try and beat the peer group and benchmark in any given year by taking undue risks in portfolio management. The incentive is to be a solid performer over the longer-term, not necessarily to be a short-term winner in any given year.
  
(a)(4) Ownership of Securities
  
Set forth below is the dollar range of equity securities beneficially owned by each of the Registrant’s Portfolio Managers in the Registrant as of October 31, 2009.
    

Portfolio Manager	Dollar Range of Equity Securities Owned in the Registrant
Steven S. Shigekawa	A
Brian Jones	A
A = None B = $1-$10,000 C = $10,001 - $50,000 D =$50,001-$100,000	E = $100,001-$500,000           F = $500,001-$1,000,000           G = $1,000,001 or More

(b) Not applicable.
  

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
  

This table shows the purchases by or on behalf of the Registrant, or affiliated purchasers of the Registrant, of common stock that is registered by the Registrant pursuant to Section 12 of the Exchange Act.
 

	(a)	(b)	(c)	(d)
Period	Total Number of Shares Purchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
May 1 through May 31*	N/A	N/A	N/A	N/A
June 1 through June 30*	3,569,693	$2.08	3,569,693	3,569,693
July 1 through July 31	N/A	N/A	N/A	N/A
August 1 through August 31	N/A	N/A	N/A	N/A
September 1 through September 30**	N/A	N/A	N/A	N/A
October 1 through October 31**	3,424,642	$3.00	3,424,642	3,424,642
Total	6,994,335	$2.53	6,994,335	6,994,335

* The Registrant conducted a tender offer from May 1, 2009 to May 29, 2009

(the “Tender Offer”). Under the terms of the Tender Offer, the Registrant offered to purchase up to 10% of its outstanding common stock at a price equal to 98% of its Net Asset Value (“NAV”) per share determined on the day the Tender Offer expired. The Tender Offer expired on May 29, 2009. On June 5, 2009, the Registrant accepted for tender 3,569,693 common shares, representing approximately 10% of its then outstanding common shares. Final payment was made at $2.08 per share, representing 98% of the NAV per share on May 29, 2009.

**

In addition, the Registrant implemented a semi-annual tender offer program consisting of up to four tender offers over a two-year period (“Tender Offer Program”). Under the Tender Offer Program, if the Registrant's common shares trade at an average daily discount to NAV per share of greater than 10% during a 12-week measurement period, the Registrant would conduct a tender offer for between 5% and 20% of its outstanding common shares at a price equal to 98% of its NAV per share determined on the day the tender offer expires. The initial measurement period under the Tender Offer Program commenced June 5, 2009 and ended August 28, 2009 (the “Measurement Period”). The Registrant traded at an average daily discount to NAV of greater than 10% during the Measurement Period and, therefore, conducted a tender offer that commenced September 18, 2009 and ended October 16, 2009. The Registrant offered to purchase up to 5% of its outstanding common shares at a price equal to 98% of its NAV per share determined on the day the tender offer expired. Under the terms of the tender offer, on October 23, 2009, the Registrant accepted 3,424,642 common shares, representing approximately 5% of its then-outstanding common shares. Final payment was made at $3.00 per share, representing 98% of the NAV per share on October 16, 2009.

Item 10. Submission of Matters to a Vote of Security Holders
  

There were no changes to the procedures by which stockholders may recommend nominees to the Board.
  

Item 11. Controls and Procedures
  

(a)

Based on an evaluation of the disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “Act”)) as of a date within 90 days of the filing date of this document, the Chief Executive Officer and Treasurer and Principal Financial and Accounting Officer of the Registrant have concluded that such disclosure controls and procedures are effectively designed to ensure that information required to be disclosed by the Registrant on Form N-CSR and Form N-Q is accumulated and communicated to the Registrant’s management to allow timely decisions regarding required disclosure.

(b)

There were no significant changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits
  

(a)(1)	A copy of the Code of Ethics is incorporated by reference to the Registrant’s Form N-CSR, Investment Company Act file number 811-21421 (filed July 10, 2006).
(a)(2)	The certifications required by Rule 30a-2(a) of the Act and Section 302 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”) are filed herewith.
(a)(3)	Not applicable to the Registrant.

(b) The certifications required by Rule 30a-2(b) of the Act and Section 906 of the Sarbanes-Oxley Act are filed herewith.

The certifications provided pursuant to Rule 30a-2(b) of the Act and Section 906 of the Sarbanes-Oxley Act are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Registrant specifically incorporates them by reference.
  

SIGNATURES
  
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
  
Neuberger Berman Real Estate Securities Income Fund Inc.
  

By:	/s/ Robert Conti
	Robert Conti
	Chief Executive Officer

  
Date: December 24, 2009
  
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
  

By:	/s/ Robert Conti
	Robert Conti
	Chief Executive Officer

Date: December 24, 2009

By:	/s/ John M. McGovern
	John M. McGovern
	Treasurer and Principal Financial
	and Accounting Officer

  
Date: December 24, 2009