tygnq.htm

 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


 
FORM N-Q
 
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY
 




Investment Company Act file number 811-21462



Tortoise Energy Infrastructure Corporation
(Exact name of registrant as specified in charter)



11550 Ash Street, Suite 300, Leawood, KS 66211
(Address of principal executive offices) (Zip code)



Terry Matlack
11550 Ash Street, Suite 300, Leawood, KS 66211
(Name and address of agent for service)



913-981-1020
Registrant's telephone number, including area code



Date of fiscal year end: November 30


Date of reporting period:  February 28, 2013

 
 
 
 
Item 1. Schedule of Investments.

Tortoise Energy Infrastructure Corporation
            
SCHEDULE OF INVESTMENTS (Unaudited)
            
               
     
February 28, 2013
  
Master Limited Partnerships and Related Companies - 169.0% (1)
  
Shares
    
Fair Value
  
Crude/Refined Products Pipelines - 64.1% (1)
            
United States - 64.1% (1)
            
Buckeye Partners, L.P.
     873,300     $ 48,642,810  
Enbridge Energy Partners, L.P.
     2,216,700       61,424,757  
Holly Energy Partners, L.P.
     1,232,000       50,832,320  
Magellan Midstream Partners, L.P. (2)
     3,227,503       161,891,551  
MPLX LP
     525,768       17,187,356  
NuStar Energy L.P.
     1,041,710       53,168,878  
Oiltanking Partners, L.P.
     418,500       18,372,150  
Plains All American Pipeline, L.P.
     2,660,100       145,640,475  
Rose Rock Midstream, L.P.
     146,157       4,969,338  
Sunoco Logistics Partners L.P.
     2,030,300       126,954,659  
Tesoro Logistics LP
     600,123       29,946,138  
 
               719,030,432  
Natural Gas/Natural Gas Liquids Pipelines - 80.3% (1)
                
United States - 80.3% (1)
                
Boardwalk Pipeline Partners, LP
     3,038,600       80,674,830  
El Paso Pipeline Partners, L.P.
     2,309,700       96,522,363  
Energy Transfer Equity, L.P.
     704,400       37,467,036  
Energy Transfer Partners, L.P.
     1,759,295       84,287,823  
Enterprise Products Partners L.P.
     2,358,900       133,678,863  
EQT Midstream Partners, LP
     339,745       12,889,925  
Inergy Midstream, L.P.
     698,500       16,722,090  
Inergy Midstream, L.P. (3)
     547,619       12,682,856  
Kinder Morgan Management, LLC (4)
     1,147,714       95,065,151  
ONEOK Partners, L.P.
     1,347,000       73,829,070  
Regency Energy Partners LP
     3,065,100       72,918,729  
Spectra Energy Partners, LP
     950,400       35,088,768  
TC PipeLines, LP
     835,800       38,329,788  
Williams Partners L.P.
     2,227,300       110,696,810  
                900,854,102  
Natural Gas Gathering/Processing - 24.6% (1)
                
United States - 24.6% (1)
                
Access Midstream Partners, L.P.
     1,258,000       46,847,920  
Copano Energy, L.L.C.
     590,000       22,750,400  
Crestwood Midstream Partners LP (2)
     707,343       17,754,309  
DCP Midstream Partners, LP
     1,042,001       42,336,501  
MarkWest Energy Partners, L.P.
     520,900       29,779,853  
Southcross Energy Partners, L.P.
     198,673       4,551,598  
Summit Midstream Partners, LP
     346,600       7,805,432  
Targa Resources Partners LP
     892,367       36,756,597  
Western Gas Equity Partners, LP
     313,983       10,666,003  
Western Gas Partners LP
     1,043,962       57,250,876  
                276,499,489  
                   
Total Master Limited Partnerships and Related Companies (Cost $939,966,842)
             1,896,384,023  
                   
Short-Term Investment - 0.0% (1)
                
United States Investment Company - 0.0% (1)
                
Fidelity Institutional Money Market Portfolio - Class I, 0.12% (5) (Cost $90,087)
     90,087       90,087  
                   
Total Investments - 169.0% (1) (Cost $940,056,929)
             1,896,474,110  
                   
Interest Rate Swap Contracts - (0.0%) (1)
                
$73,333,332 notional - Unrealized Depreciation
             (471,050 )
Other Assets and Liabilities - (43.2%) (1)
             (484,052,650 )
Long-Term Debt Obligations - (18.7%) (1)
             (210,000,000 )
Mandatory Redeemable Preferred Stock at Liquidation Value - (7.1%) (1)
             (80,000,000 )
Total Net Assets Applicable to Common Stockholders - 100.0% (1)
           $ 1,121,950,410  
                   
                   
(1)
Calculated as a percentage of net assets applicable to common stockholders.
                
(2)
All or a portion of the security is segregated as collateral for the unrealized depreciation of interest rate swap contracts of $471,050.
  
(3)
Restricted securities have been fair valued in accordance with procedures approved by the Board of Directors and
  
 
have a total fair value of $12,682,856, which represents 1.1% of net assets. 
  
(4)
Security distributions are paid-in-kind.
                
(5)
Rate indicated is the current yield as of February 28, 2013.
                

 
 
 

Various inputs are used in determining the value of the Company’s investments.  These inputs are 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, market corroborated inputs, etc.)
Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)
 
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following table provides the fair value measurements of applicable Company assets and liabilities by level within the fair value hierarchy as of February 28, 2013.  These assets and liabilities are measured on a recurring basis.

   
Fair Value at
              
Description
  
February 28, 2013
  
Level 1
  
Level 2
  
Level 3
  
Assets
                  
Equity Securities:
                  
Master Limited Partnerships and Related Companies(a)
   $ 1,896,384,023   $ 1,883,701,167   $ 12,682,856   $ -  
Other:
                          
Short-Term Investment(b)
     90,087     90,087     -     -  
Total Assets
   $ 1,896,474,110   $ 1,883,791,254   $ 12,682,856   $ -  
                           
Liabilities
                          
Interest Rate Swap Contracts
   $ 471,050   $ -   $ 471,050   $ -  
 
(a)  
All other industry classifications are identified in the Schedule of Investments.
(b)  
Short-term investment is a sweep investment for cash balances in the Company at February 28, 2013.

The Company did not hold any Level 3 securities during the period from December 1, 2012 through February 28, 2013.

Valuation Techniques
In general, and where applicable, the Company uses readily available market quotations based upon the last updated sales price from the principal market to determine fair value.  This pricing methodology applies to the Company’s Level 1 investments. 

An equity security of a publicly traded company acquired in a private placement transaction without registration under the Securities Act of 1933, as amended (the “1933 Act”), is subject to restrictions on resale that can affect the security's fair value.  If such a security is convertible into publicly-traded common shares, the security generally will be valued at the common share market price adjusted by a percentage discount due to the restrictions and categorized as Level 2 in the fair value hierarchy.  If the security has characteristics that are dissimilar to the class of security that trades on the open market, the security will generally be valued and categorized as Level 3 in the fair value hierarchy.

Interest rate swap contracts are valued by using industry-accepted models which discount the estimated future cash flows based on a forward rate curve and the stated terms of the interest rate swap agreement by using interest rates currently available in the market, or based on dealer quotations, if available, which applies to the Company’s Level 2 liabilities.

The Company utilizes the beginning of reporting period method for determining transfers between levels.  There were no transfers between levels during the period ended February 28, 2013.

Certain of the Company’s investments are restricted and are valued as determined in accordance with procedures established by the Board of Directors.  The table below shows the number of units held, acquisition date, acquisition cost, fair value, fair value per share and percent of net assets which the security comprises at February 28, 2013.

Investment Security
Number of Shares
Acquisition Date
Acquisition
Cost
Fair Value
Fair Value
Per Share
Fair Value as
Percent of
Net Assets
Inergy Midstream, L.P.
Unregistered Common Units
547,619
12/7/12
$ 11,499,999
$ 12,682,856
$  23.16
    1.1%

The carrying value per unit of unrestricted common units of Inergy Midstream, L.P. was $23.10 on November 3, 2012, the date of the purchase agreement and the date an enforceable right to acquire the restricted Inergy Midstream, L.P. units was obtained by the Company.
As of February 28, 2013, the aggregate cost of securities for federal income tax purposes was $673,447,455.  The aggregate gross unrealized appreciation for all securities in which there was an excess of fair value over tax cost was $1,223,026,655, the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over fair value was $0 and the net unrealized appreciation was $1,223,026,655.
 
 
 


Item 2. Controls and Procedures.
 
(a)  
The registrant’s Chief Executive Officer and its Chief Financial Officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.

(b)  
There was no change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
 
Item 3. Exhibits.
 
Separate certifications for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)) are filed herewith.

 
 
 
 
 
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.


  Tortoise Energy Infrastructure Corporation  
       
Date:  April 23, 2013
By:
 /s/ Terry Matlack  
    Terry Matlack  
    Chief Executive Officer  
       



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.

  Tortoise Energy Infrastructure Corporation  
       
Date: April 23, 2013
By:
  /s/ Terry Matlack  
    Terry Matlack  
    Chief Executive Officer  
       
  Tortoise Energy Infrastructure Corporation  
       
Date: April 23, 2013
By:
  /s/ P. Bradley Adams  
    P. Bradley Adams  
    Chief Financial Officer