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
Diane Bono
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, 2015
 
 
 
 
Item 1. Schedule of Investments.
 
Tortoise Energy Infrastructure Corporation
            
SCHEDULE OF INVESTMENTS (Unaudited)
            
               
     
February 28, 2015
  
     
Shares
    
Fair Value
  
Master Limited Partnerships - 185.3% (1)
            
Crude/Refined Products Pipelines - 90.8% (1)
            
United States - 90.8% (1)
            
Buckeye Partners, L.P.
     3,208,898     $ 249,459,731  
Enbridge Energy Partners, L.P.
     5,275,583       206,750,098  
Genesis Energy L.P.
     657,863       30,261,698  
Holly Energy Partners, L.P.
     1,886,360       62,721,470  
Magellan Midstream Partners, L.P. (2)
     4,802,097       394,732,373  
MPLX LP
     1,496,831       123,039,508  
NuStar Energy L.P.
     836,150       52,710,896  
Phillips 66 Partners LP
     826,605       58,846,010  
Plains All American Pipeline, L.P.
     7,701,078       384,206,781  
Shell Midstream Partners, L.P.
     1,247,645       48,733,014  
Sunoco Logistics Partners L.P.
     5,978,510       264,369,712  
Tesoro Logistics LP
     2,224,948       127,756,514  
Valero Energy Partners LP
     731,600       38,986,964  
 
               2,042,574,769  
Natural Gas/Natural Gas Liquids Pipelines - 49.5% (1)
                
United States - 49.5% (1)
                
Columbia Pipeline Partners LP
     1,541,584       42,686,461  
Dominion Midstream Partners, LP
     896,190       36,743,790  
Energy Transfer Equity, L.P.
     2,184,000       139,492,080  
Energy Transfer Partners, L.P.
     3,389,304       201,595,802  
Enterprise Products Partners L.P.
     8,011,123       267,090,841  
EQT Midstream Partners, LP
     1,329,716       110,658,966  
ONEOK Partners, L.P.
     3,714,514       155,229,540  
Spectra Energy Partners, LP
     2,996,394       159,827,656  
                1,113,325,136  
Natural Gas Gathering/Processing - 45.0% (1)
                
United States - 45.0% (1)
                
Antero Midstream Partners LP
     1,185,694       30,828,044  
DCP Midstream Partners, LP
     2,315,127       92,142,055  
EnLink Midstream Partners, LP
     2,775,927       74,561,399  
MarkWest Energy Partners, L.P.
     3,079,827       200,034,764  
Regency Energy Partners LP
     6,318,705       154,113,215  
Summit Midstream Partners LP
     219,159       7,905,065  
Targa Resources Partners LP
     2,416,501       105,891,074  
Western Gas Partners, LP
     2,256,737       157,023,760  
Williams Partners L.P.
     3,744,123       191,474,450  
                1,013,973,826  
                   
Total Master Limited Partnerships (Cost $2,246,232,871)
             4,169,873,731  
                   
Common Stock - 0.8%(1)
                
Crude/Refined Products Pipelines - 0.8%(1)
                
United States - 0.8% (1)
                
Plains GP Holdings, L.P. (Cost $13,324,154)
     630,662       18,062,160  
                   
Short-Term Investment - 0.0% (1)
                
United States Investment Company - 0.0% (1)
                
Fidelity Institutional Money Market Portfolio - Class I, 0.08% (3) (Cost $113,106)
     113,106       113,106  
                   
Total Investments - 186.1% (1) (Cost $2,259,670,131)
             4,188,048,997  
                   
Interest Rate Swap Contracts - (0.2%) (1)
                
$111,700,000 notional - Unrealized Depreciation
             (4,264,904 )
Other Assets and Liabilities - (48.6%) (1)
             (1,093,774,289 )
Senior Notes - (24.2%) (1)
             (545,000,000 )
Mandatory Redeemable Preferred Stock at Liquidation Value - (13.1%) (1)
             (295,000,000 )
Total Net Assets Applicable to Common Stockholders - 100.0% (1)
           $ 2,250,009,804  
                   
                   
(1)
Calculated as a percentage of net assets applicable to common stockholders.
                
(2)
A portion of the security is segregated as collateral for the unrealized depreciation of interest rate swap contracts of $4,264,904.
          
(3)
Rate indicated is the current yield as of February 28, 2015.
                

 
 
 

Various inputs are used in determining the fair value of the Company’s investments and financial instruments.  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, 2015.  These assets and liabilities are measured on a recurring basis.
 
Description
Level 1
  
Level 2
  
Level 3
    
Total
  
Assets
                  
Investments:
                  
Common Stock(a)
 $ 18,062,160   $ -   $ -     $ 18,062,160  
Master Limited Partnerships(a)
   4,169,873,731     -     -       4,169,873,731  
Short-Term Investment(b)
   113,106     -     -       113,106  
Total Assets
 $ 4,188,048,997   $ -   $ -     $ 4,188,048,997  
Liabilities
                          
Interest Rate Swap Contracts
 $ -   $ 4,264,904   $ -     $ 4,264,904  
 
(a)  
All other industry classifications are identified in the Schedule of Investments.
(b)  
Short-term investment is a sweep investment for cash balances.

The Company did not hold any Level 3 securities during the period ended February 28, 2015.  The Company utilizes the beginning of reporting period method for determining transfers between levels.  There were no transfers between levels for the Company during the period ended February 28, 2015.
 
 
 
 
 
 

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.  The Company primarily owns securities that are listed on a securities exchange or over-the-counter market. The Company values those securities at their last sale price on that exchange or over-the-counter market on the valuation date.  If the security is listed on more than one exchange, the Company uses the price from the exchange that it considers to be the principal exchange on which the security is traded. Securities listed on the NASDAQ are valued at the NASDAQ Official Closing Price, which may not necessarily represent the last sale price.  If there has been no sale on such exchange or over-the-counter market on such day, the security is valued at the mean between the last bid price and last ask price on such day. These securities are categorized as Level 1 in the fair value hierarchy as further described below.
 
Restricted securities are subject to statutory or contractual restrictions on their public resale, which may make it more difficult to obtain a valuation and may limit a fund’s ability to dispose of them. Investments in private placement securities and other securities for which market quotations are not readily available are valued in good faith by using certain fair value procedures. Such fair value procedures consider factors such as discounts to publicly traded issues, time until conversion date, securities with similar yields, quality, type of issue, coupon, duration and rating. If events occur that affect the value of the Company’s portfolio securities before the net asset value has been calculated (a “significant event”), the portfolio securities so affected are generally priced using fair value procedures.

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 liquidity and 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.  To the extent that such securities are convertible or otherwise become freely tradable within a time frame that may be reasonably determined, an amortization schedule may be used to determine the discount.  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.

The Company generally values debt securities at evaluated bid prices obtained from an independent third-party pricing service that utilizes a pricing matrix based upon yield data for securities with similar characteristics, or based on a direct written broker-dealer quotation from a dealer who has made a market in the security.  Debt securities with 60 days or less to maturity are valued on the basis of amortized cost, which approximates market value.

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, and are categorized as Level 2 in the fair value hierarchy.
 
As of February 28, 2015, the aggregate cost of securities for federal income tax purposes was $1,591,585,781.  The aggregate gross unrealized appreciation for all securities in which there was an excess of fair value over tax cost was $2,596,952,524, the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over fair value was $489,308 and the net unrealized appreciation was $2,596,463,216.
 
 
 

 

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 29, 2015
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 29, 2015
By:
  /s/ Terry Matlack  
    Terry Matlack  
    Chief Executive Officer  
       
  Tortoise Energy Infrastructure Corporation  
       
Date: April 29, 2015
By:
  /s/ P. Bradley Adams  
    P. Bradley Adams  
    Chief Financial Officer