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)



David J. Schulte
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:  August 31, 2011



 
 
 
 
Item 1. Schedule of Investments.
 
Tortoise Energy Infrastructure Corporation
            
SCHEDULE OF INVESTMENTS (Unaudited)
            
               
     
August 31, 2011
  
Master Limited Partnerships and Related Companies - 168.0% (1)
  
Shares
    
Fair Value
  
Crude/Refined Products Pipelines - 65.0% (1)
            
United States - 65.0% (1)
            
Blueknight Energy Partners, L.P. (2)
     342,162     $ 2,617,539  
Buckeye Partners, L.P.
     1,297,200       81,697,656  
Enbridge Energy Partners, L.P.
     3,178,982       90,600,987  
Holly Energy Partners, L.P.
     616,000       31,231,200  
Kinder Morgan Management, LLC (3)
     1,347,434       81,519,751  
Magellan Midstream Partners, L.P.
     1,504,429       90,220,607  
NuStar Energy L.P.
     917,171       54,296,523  
Oiltanking Partners, L.P.
     137,415       3,296,586  
Plains All American Pipeline, L.P.
     993,100       60,211,653  
Sunoco Logistics Partners L.P.
     828,729       71,063,512  
Tesoro Logistics LP
     204,800       4,794,368  
 
               571,550,382  
Natural Gas/Natural Gas Liquids Pipelines - 75.2% (1)
                
United States - 75.2% (1)
                
Boardwalk Pipeline Partners, LP
     2,581,900       64,805,690  
Duncan Energy Partners L.P.
     424,700       18,058,244  
El Paso Pipeline Partners, L.P.
     1,716,985       63,167,878  
Energy Transfer Equity, L.P.
     514,400       19,670,656  
Energy Transfer Partners, L.P.
     2,234,800       100,700,088  
Enterprise Products Partners L.P.
     2,869,400       120,945,210  
Niska Gas Storage Partners LLC
     501,300       6,356,484  
ONEOK Partners, L.P.
     1,543,750       67,091,375  
PAA Natural Gas Storage, L.P.
     770,671       13,941,438  
Regency Energy Partners LP
     2,681,427       64,032,477  
Spectra Energy Partners, LP
     509,651       14,805,361  
TC PipeLines, LP
     1,230,100       53,632,360  
Williams Partners L.P.
     988,487       53,556,226  
                660,763,487  
Natural Gas Gathering/Processing - 23.4% (1)
                
United States - 23.4% (1)
                
Chesapeake Midstream Partners, L.P.
     359,698       10,024,783  
Copano Energy, L.L.C.
     885,900       28,720,878  
Crestwood Midstream Partners LP(3)(4)
     631,426       15,634,108  
DCP Midstream Partners, LP
     1,098,200       42,577,214  
MarkWest Energy Partners, L.P.
     919,000       44,157,950  
Targa Resources Partners LP
     1,666,061       57,145,892  
Western Gas Partners LP
     211,402       7,678,121  
                205,938,946  
Propane Distribution - 4.4% (1)
                
United States - 4.4% (1)
                
Inergy, L.P.
     1,350,600       38,303,016  
                   
Total Master Limited Partnerships and Related Companies (Cost $819,341,261)
             1,476,555,831  
                   
Short-Term Investment - 0.0% (1)
                
United States Investment Company - 0.0% (1)
                
Fidelity Institutional Money Market Portfolio - Class I, 0.11% (5) (Cost $103,074)
     103,074       103,074  
                   
Total Investments - 168.0% (1) (Cost $819,444,335)
             1,476,658,905  
                   
Other Assets and Liabilities - (37.5%) (1)
             (329,717,711 )
Long-Term Debt Obligations - (22.2%) (1)
             (194,975,000 )
Mandatory Redeemable Preferred Stock at Liquidation Value - (8.3%) (1)
             (73,000,000 )
Total Net Assets Applicable to Common Stockholders - 100.0% (1)
           $ 878,966,194  
                   
(1)
Calculated as a percentage of net assets applicable to common stockholders.
                
(2)
Non-income producing.
                
(3)
Security distributions are paid-in-kind.
                
(4)
Restricted securities have been fair valued in accordance with procedures approved by the Board of Directors and
  
 
have a total fair value of $15,634,108, which represents 1.8% of net assets. 
  
(5)
Rate indicated is the current yield as of August 31, 2011.
                

 
 
 

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 by level within the fair value hierarchy as of August 31, 2011.  These assets are measured on a recurring basis.

 
Fair Value at
              
Description
August 31, 2011
  
Level 1
  
Level 2
  
Level 3
  
Equity Securities:
                
Master Limited Partnerships and Related Companies(a)
 $ 1,476,555,831   $ 1,460,921,723   $ 15,634,108   $ -  
Total Equity Securities
   1,476,555,831     1,460,921,723     15,634,108     -  
Other:
                        
Short-Term Investment(b)
   103,074     103,074     -     -  
Total Other
   103,074     103,074     -     -  
Total
 $ 1,476,658,905   $ 1,461,024,797   $ 15,634,108   $ -  

(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 August 31, 2011.

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.

The Company utilizes the beginning of reporting period method for determining transfers between levels.  There were no transfers between levels during the period from December 1, 2010 through August 31, 2011.

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 August 31, 2011.

 Investment Security
Number of Shares
  Acquisition Date
Acquisition
Cost
Fair Value
  Fair Value
Per Share
  Fair Value as Percent of Net Assets
Crestwood Midstream Partners LP
Unregistered Class C Units
631,426
4/1/11
$ 15,000,027
$ 15,634,108
$  24.76
1.8%

The carrying value per unit of unrestricted common units of Crestwood Midstream Partners LP was $30.37 on February 18, 2011, the date of the purchase agreement and the date an enforceable right to acquire the restricted Crestwood Midstream Partners LP units was obtained by the Company.
 
As of August 31, 2011, the aggregate cost of securities for federal income tax purposes was $652,905,209.  The aggregate gross unrealized appreciation for all securities in which there was an excess of fair value over tax cost was $831,553,216, the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over fair value was $7,799,520 and the net unrealized appreciation was $823,753,696.


 
 
 


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:  October 26, 2011
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:  October 26, 2011
By:
  /s/ Terry Matlack  
    Terry Matlack  
    Chief Executive Officer  
       
  Tortoise Energy Infrastructure Corporation  
       
Date:  October 26, 2011
By:
  /s/ P. Bradley Adams  
    P. Bradley Adams  
    Chief Financial Officer