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 811-22585
Tortoise Pipeline & Energy Fund, Inc.
(Exact name of registrant as specified in charter)
6363 College Boulevard, Suite 100A, Overland
Park, KS 66211
(Address of principal executive offices) (Zip code)
P. Bradley Adams
Diane Bono
6363 College Boulevard, Suite 100A, Overland
Park, 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: May 31, 2023
Item 1. Report to Stockholders.
(a) The Report to Shareholders is attached herewith.
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x1x1.jpg)
Semi-Annual Report | May 31, 2023
2023 Semi-Annual Report
Closed-End Funds
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x1x2.jpg)
Tortoise
2023 Semi-Annual Report to Stockholders
This combined report provides you with a comprehensive
review of our funds that span essential assets.
TTP and TPZ distribution policies
Tortoise Pipeline & Energy Fund, Inc. (“TTP”)
and Tortoise Power and Energy Infrastructure Fund, Inc. (“TPZ”) are relying on exemptive relief permitting them to make long-term
capital gain distributions throughout the year. Each of TTP and TPZ, with approval of its Board of Directors (the “Board”),
has adopted a managed distribution policy (the “Policy”). Annual distribution amounts are expected to fall in the range of
7% to 10% of the average week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. In accordance
with its Policy, TTP distributes a fixed amount per common share, currently $.59, each quarter to its common shareholders. TPZ distributes
a fixed amount per common share, currently $.105, each month to its common shareholders. Prior to February 2022, the monthly distribution
rate was $.06. These amounts are subject to change from time to time at the discretion of the Board. Although the level of distributions
is independent of TTP’s and TPZ’s performance, TTP and TPZ expect such distributions to correlate with its performance over
time. Each quarterly and monthly distribution to shareholders is expected to be at the fixed amount established by the Board, except for
extraordinary distributions in light of TTP’s and TPZ’s performance for the entire calendar year and to enable TTP and TPZ
to comply with the distribution requirements imposed by the Internal Revenue Code. The Board may amend, suspend or terminate the Policy
without prior notice to shareholders if it deems such action to be in the best interests of TTP, TPZ and their respective shareholders.
For example, the Board might take such action if the Policy had the effect of shrinking TTP’s or TPZ’s assets to a level that
was determined to be detrimental to TTP or TPZ shareholders. The suspension or termination of the Policy could have the effect of creating
a trading discount (if TTP’s or TPZ’s stock is trading at or above net asset value), widening an existing trading discount,
or decreasing an existing premium. You should not draw any conclusions about TTP’s or TPZ’s investment performance from the
amount of the distribution or from the terms of TTP’s or TPZ’s distribution policy. Each of TTP and TPZ estimates that it
has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital.
A return of capital may occur, for example, when some or all of the money that you invested in TTP or TPZ is paid back to you. A return
of capital distribution does not necessarily reflect TTP’s or TPZ’s investment performance and should not be confused with
“yield” or “income.” The amounts and sources of distributions reported are only estimates and are not being provided
for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon TTP’s and
TPZ’s investment experience during their fiscal year and may be subject to changes based on tax regulations. TTP and TPZ will send
you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
2023 Semi-Annual Report | May
31, 2023
Closed-end Fund Comparison |
|
Name/Ticker |
Primary
focus |
Structure |
Total
investments
($ millions)(1) |
Portfolio mix
by asset type(1) |
Portfolio mix
by structure(1) |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x1.jpg) |
Tortoise Energy Infrastructure Corp.
NYSE: TYG
Inception: 2/2004 |
Energy Infrastructure |
C-Corp(2) |
$502.2 |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x5.jpg) |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x6.jpg) |
Tortoise Midstream Energy Fund, Inc.
NYSE: NTG
Inception: 7/2010 |
Natural Gas Infrastructure |
C-Corp(2) |
$260.6 |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x7.jpg) |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x8.jpg) |
Tortoise Pipeline
& Energy Fund, Inc.
NYSE: TTP
Inception: 10/2011 |
North
American
pipeline
companies |
Regulated investment company |
$81.3 |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x9.jpg) |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x10.jpg) |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x2.jpg) |
Tortoise Energy Independence
Fund, Inc.
NYSE: NDP
Inception: 7/2012 |
North
American
oil & gas
producers |
Regulated investment company |
$64.0 |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x11.jpg) |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x12.jpg) |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x3.jpg) |
Tortoise Power
and Energy Infrastructure
Fund, Inc.
NYSE: TPZ
Inception: 7/2009 |
Power
& energy infrastructure companies
(Fixed income
& equity) |
Regulated investment company |
$117.4 |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x13.jpg) |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x14.jpg) |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x4.jpg) |
Ecofin Sustainable and Social Impact Term Fund
NYSE: TEAF
Inception: 3/2019 |
Essential
assets |
Regulated investment company |
$238.7 |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x15.jpg) |
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x3x16.jpg) |
(1) As of 5/31/2023
(2) TYG and NTG intend to qualify as regulated investment
companies. See Note 2.E. to the financial statements for further disclosure.
(unaudited)
Tortoise
2023 Semi-Annual Report to closed-end fund stockholders
Dear stockholder
The first half of the 2023 fiscal year proved to
be a volatile environment for energy infrastructure and the renewable and power infrastructure sectors, yet different attributes drove
performance. Energy infrastructure displayed strong earnings fundamentals while navigating recessionary concerns, declining commodity
prices, and a macro environment favoring growth stocks over value stocks. Renewable and power infrastructure sector messaged additional
growth backlogs driven by the Inflation Reduction Act (IRA) while simultaneously navigating headwinds around higher interest rate concerns
and rising costs. Social impact investments continued to make progress with demand increasing for educational solutions and improvements
along with an increased aging population and slower pace of new senior living inventory supply.
Energy and power infrastructure
The
broad energy sector, as represented by the S&P Energy Select Sector® Index returned -14.2% for the first half of 2023
fiscal year. The first half of 2023 saw the energy sector pressured by lower prices in both crude oil (-14.3%) and natural gas (-57.5%)
on recession concerns and warmer-than-expected winter weather. On the contrary, long-term supply concerns remained as 2022 was the eighth
consecutive year of underinvestment in oil and gas. The opportunity for North American energy infrastructure remains as the U.S. energy
industry focuses on maximizing shareholder returns. Global underinvestment resulting from environmental, social and governance (ESG)
commitments and energy transition is likely to keep global stock balances extremely tight for the foreseeable future.
The global energy markets
remained dynamic to start 2023. Most notable was OPEC+ twice cutting crude oil production. The production cuts (April 2023 for 1.6mm
b/d and June 2023 for 1mm b/d) are intended to tighten the market as short-term demand concerns remain. These followed a production
cut from OPEC+ of 2mm b/d in October 2022. We believe OPEC+ is sending a clear message to the market it is focusing on profits over
market share. This is a marked change from past messaging and is aligned with U.S. shale prioritizing profits over market share.
Russian crude, despite Western sanctions, remained more resilient than expected, yet volumes are projected to decline and/or face
longer transit times to their end market. In the physical markets, U.S. production remained steady. For 2023, the Energy Information
Agency (EIA) forecasts that U.S. crude production will increase 0.7 mm b/d to 12.6 mm b/d, up from 11.9 mm b/d average in 2022. On
the demand side, the International Energy Agency (IEA) projects world crude consumption will increase by 2.2 million b/d in 2023 to
a record 102 million b/d. Global demand is being driven by China after the country lifted its Covid restrictions. Finally, U.S.
& global inventories are projected to decline as we head into the summer driving months.
With lower commodity prices during the period, the
midstream sector proved to be defensive, outperforming exploration and production companies (E&Ps) and other energy subsectors. Midstream’s
strong fundamentals, attractive valuations, defensive characteristics in a higher rate and inflationary environment supported outperformance
on a relative basis. The first half of 2023 underscored several 2022 themes in resilient quarterly earnings and return of capital to shareholders.
The banking crisis in March provided another opportunity to highlight the resiliency of the asset class. Energy infrastructure credit
facilities were and remain largely undrawn with an average utilization of 10%. With significant free cash flow today and expectations
for growing free cash flow in future years we believe there is limited need for credit facilities.
Recession concerns weighed on investor psyche highlighted
by the banking crisis in March. While there were several recessions in the last 40 years, energy demand increased in 38 out of the last
40 years (2008 and 2020 decreased). Due to actions taken during the 2020 recession, we believe the energy sector, and specifically midstream,
is well prepared to deal with another potential recession. The world remains undersupplied in energy, and we believe sector balance sheets
are in much better shape than in past recessions including 2001, 2008 and 2020.
The balanced return of capital story continued for
investors via debt reduction, share buybacks and increased distributions. Debt paydown across the sector continued to be paramount led
by Enterprise Product Partners which lowered its targeted leverage to 3.0x. In March, S&P upgraded EPD’s credit rating to A-
by S&P. This is the first time we recall a midstream company with A rated debt! Western Midstream and Cheniere Energy are other midstream
companies which saw improvement in their debt ratings during the first half of the fiscal year. Distribution growth continued in Q1 2023
as companies targeted a return to pre-COVID levels and midstream companies ended 2022 with a total of $4.8 billion in stock repurchased.
The significant free cash flow is increasingly making
midstream assets and companies’ attractive merger & acquisition (M&A) targets. In May, ONEOK announced plans to acquire
Magellan Midstream Partners (MMP) at a 22% premium. The deal is contingent upon shareholder vote and could close in the second half of
2023. DCP Midstream was also acquired by Phillips 66 at a significant premium during the first
(unaudited)
2023 Semi-Annual Report
| May 31, 2023
half of 2023. In both instances, we believe the companies
being acquired operate critical energy infrastructure assets and are undervalued due to their high free cash flow generation potential
over the next decade and beyond. Dealmaking is also happening in the private markets. In March, Energy Transfer announced the acquisition
of privately owned Lotus Midstream. Management expects this transaction to deliver immediate accretion to free cash flow per unit driven
by significant overlap of existing assets. Importantly, companies are controlling energy volumes throughout their value chain. Increasing
volumes helps incumbent midstream companies maintain a competitive advantage.
Another continuing theme for energy infrastructure
companies is the focus on export related infrastructure. With energy security a higher priority and concern around natural gas inventories,
Europe is increasingly importing U.S. liquefied natural gas (LNG). Throughout 2022, LNG exporters contracted almost 6 billion cubic feet
per day (Bcf/d) of new contracts, signing 15-25-year contracts with European and Asian counterparties. The first half of the 2023 fiscal
year saw two Final Investment Decisions (FIDs) proceed to construction at Sempra’s Port Arthur LNG project and Venture Global’s
Plaquemines LNG project. Additionally, Cheniere made progress with counterparties for the company’s Sabine Pass Liquefaction Expansion
Project. The U.S. remains on track to roughly double LNG export capacity by the end of the decade.
Despite all the positives, risks to our outlook remain.
In 2023, we expect a more mixed setup for natural gas, as supply outpaces demand. Unseasonably warm winter lessened the gas demand for
Europe and North America. Further, the delayed restart of Freeport LNG, offline since the second half of 2022 through February 2023, kept
more gas inventories from being exported globally. While supply remains abundant in the short-term, we expect more demand pull for natural
gas in the back half of the decade. This demand will come from LNG facilities coming online and increased demand for natural gas through
power generation. Gas and its reliability and affordability is a key resource for utilities. An example of this is the recent Texas law
passed with anti-renewables provisions in ERCOT coupled with low-cost loans for new conventional generation.
On the regulatory front there
continues to be hurdles for energy infrastructure mega-projects. During the period, projects faced mixed results around legislative
and cost hurdles. On the positive side, the long-disputed Mountain Valley Pipeline received its required construction permits via
the debt ceiling bill. The pipeline now expects to go into service in late 2023 or early 2024. On the negative side,
TransCanada’s (TRP) Costal Gas Link, located on the west coast of Canada, is facing delays due to cost overruns, which TRP
announced would increase 30%. These examples highlight the importance of cash flowing infrastructure already in the ground. Lastly,
the Environmental Protection Agency (EPA) officially unveiled its latest proposal to stunt emissions from coal and gas power plants
with most of the limitations appearing to take effect starting in 2035. The EPA projects that less than 20% of existing gas plants
would be impacted, but for coal plants looking to run through 2040, the plants would need to switch to running on natural gas 40% of
the time. This decision is likely to be litigated but is noteworthy in that the push towards natural gas is one we advocated for
historically.
Sustainable infrastructure
Renewable energy
From a macro perspective the semi-annual period ending
May 31, 2023, was generally characterized by influences stemming from stubborn inflation, elevated interest rates, and declining energy
prices, in particular natural gas. In China, the magnitude of economic recovery following the post-COVID reopening ultimately did not
come to fruition. From a policy perspective, we did see some further developments, albeit less potent, in a European response to the U.S.’s
IRA.
2022’s clean energy ‘winners’,
propelled by higher power prices and the growth catalysts inherent in the energy transition and the IRA, suffered profit taking in early
2023. Elevated borrowing costs were concerning for businesses which ‘borrow to grow,’ as were higher equipment costs, trade
issues, permitting and transmission constraints. The period also saw banking turmoil triggered primarily by Silicon Valley Bank in early
March, which presented both opportunities and challenges to the energy transition space. As such, some companies in our investment universe
could not escape these varying impulses even if their secular growth remains intact.
Generally, companies participating in the energy
transition tend to benefit at the margin from higher power prices in the short-term. Even if electricity prices are well above pre-2022
levels, as they have peaked and come down from very high levels, companies with some exposure to merchant prices face lower results in
2023 versus 2022, which reduces their appeal.
Looking ahead: Over the course of the next months
we anticipate either a slowdown in inflation or in some cases deflation in certain areas of the energy transition space such as solar
and car prices (internal combustion engines and electric vehicles). Wind turbine prices may, however, see more resistance to deflation.
(unaudited)
With respect to renewables, a key component to solar
panel manufacturing, polysilicon, has come down massively year-to-date in China. Declining equipment costs provides a tailwind to the
deployment of renewables that should fuel faster and more profitable growth.
Policy will have an important role to play in the
coming months as certain protectionist policies have material implications for pricing power, market share and profitability in wind,
solar, battery storage and electric vehicles industries. We expect the EU and countries within the EU to unveil a variety of measures
and subsidies to counteract the IRA and encourage more domestic production and installation of key clean technologies such as manufacturing
along the solar value chain and key industries serving the electric vehicle sector — potentially favorable for local champions.
While decelerating global inflation and the potential
impact this may have on the rate cycle might start to provide an improved backdrop for duration businesses such as utilities and renewable
developers, declining power prices are a headwind to those asset owners with elevated merchant power exposure –additionally, we
are also closely monitoring the risks in certain regions globally to grid congestion and the knock on effects this may have on large utility
scale renewables installations. As such, we are cautiously optimistic as we head further into 2023.
Waste transition
One of the recent highlights was the release of the
final “SET-Rule” by the United States Environmental Protection Agency. The EPA’s SET-Rule establishes the Renewable
Volume Obligations, known as RVO’s, that oil and gas producers must meet annually under the Renewable Fuel Standard program. In
delineating these obligations, the SET-Rule is a critical component in establishing market demand, and therefore price support, for renewable
fuel credits in the U.S. The new SET-Rule contains several positive features regarding waste transition, including:
| ● | A longer 3-year RVO term through 2025, providing market participants with better demand visibility; |
| ● | The final RVO’s include an annual growth rate of 27-33% for renewable natural gas production, which is far higher than the 13-14%
growth rate included in the Environmental Protection Agency’s (EPA’s) initially-proposed SET-Rule; |
| ● | The SET-Rule does not contain cellulosic waiver credit availability for obligated parties, which historically has acted as a cap on
Renewable Identification Number (RIN) pricing; |
| ● | The SET-Rule contains a new methodology for apportioning RINs when utilizing food waste as a blended feedstock, enabling project owners
to receive a higher percentage of more-valuable D3 RINs as opposed to less-valuable D5 RINs; and |
| ● | The SET-Rule allows greater flexibility for biogas to be utilized as an intermediate fuel to produce or decarbonize non-transportation
fuels, such as hydrogen. |
Market reaction has been swift and positive, with
D3 RIN prices rising nearly 30% within 1 week of the EPA’s announcement. D3 RINs may represent 25% or more of an RNG project’s
revenue base, so a 30% increase in RIN pricing may be economically meaningful.
One of the few negative aspects of the SET-Rule is
that it did not include provisions for e-RINs, as had been expected. e-RINs would have provided additional revenue to biogas projects
that generate electricity. The EPA indicated that it paused the initiation of e-RINs due to implementation complexities. Market expectations
are that the EPA will re-consider e-RINs when the next SET-Rule is proposed.
In the waste-to-value sector, recent news suggests
that recycling rates have been going down, landfill tipping fees have been rising, and pollution settlement costs are becoming dramatically
expensive.
The Circularity Gap Report 2023, published by Circle
Economy in collaboration with Deloitte, determined that the global circularity rate was 9.1% in 2018, before declining to 8.6% in 2020,
and 7.2% in 2022. So, even as recycling efforts have increased, the usage of virgin materials has risen at a faster rate. This fact underscores
the need for enhanced recycling efforts to promote better overall sustainability.
In June, the Environmental Research and Education
Foundation published its annual analysis, finding that U.S. landfill tipping fees increased 11% from 2021 to 2022, up substantially from
annual increases in the 1-5% range during the 3 prior years. Industry experts believe such fees will continue to rise, thereby encouraging
the diversion of waste away from landfill introduction and toward recycling facilities.
Finally, in June, 3M and DuPont separately agreed
to pay over $11 billion to settle pollution claims involving per-and polyfluoroalkyl substances (PFAS), also known as “Forever Chemicals,”
that are present in community water systems. This outcome, in conjunction with extended producer responsibility laws introduced in several
states, is expected to encourage producers to take circularity and recycling efforts more seriously going forward.
(unaudited)
2023 Semi-Annual Report | May
31, 2023
Social impact
Education
The public bond market for new issuance of K-12 charter
school and private school revenue bonds in Q2 2023 continued to decline, with only 29 new issues for a par value of $664,315,000, a 54.8%
decrease from the same period in 2022. Year to date, there have been 46 new issues with par value totaling $1,044,778,000 as compared
to 94 new issues at par value of $2,334,820,000 for the first 6 months of 2022.1
While
the cost of borrowing for charter and K-12 private schools has increased significantly over the past 12 months, it is Ecofin’s
assessment that cumulative outflows of nearly $7 billion from municipal bond funds in the first half of 2023 are the primary driver of
the slowdown.2 The specialty investor segment of the charter and K-12 bond market, which includes Ecofin, remains strong.
Specialty investor transactions have made up nearly a quarter of market (par value) for both Q2 and the first 6 months of 2023 as opposed
to 15.7% for the same quarter and less than 14% for the first half of 2022.
Education research and assessments featured prominently
in the news during the quarter. Results for the National Assessment of Education Progress (NAEP), often referred to as the nation’s
report card, were made public and confirmed the disastrous effects of the COVID pandemic on student learning. The education news organization,
Chalkbeat, reported, “Scores were substantially lower in the fall of 2022 compared to the last time the test was administered three
years earlier. Making matters worse, even before the pandemic hit, 13-year-olds had lost ground on the National Assessment of Educational
Progress or NAEP. That adds up to a striking collapse in achievement scores since 2012, after decades of progress in math and modest gains
in reading. In reading, 13-year-olds scored about the same as those who took the test in 1971, when it was first administered. Math scores
were now comparable to those in 1992.”3
The second quarter also saw the
release of “The National Charter School Study III, 2023” by Stanford University’s Center for Research on Education
Outcomes (CREDO). The report is the third of its kind and offers the most rigorous assessment of the effect of charter schools on
student learning. It offers a direct comparison of the results for students in district and charter public schools, including
results by race, income, English language learner and special education status, while controlling for other factors that could skew
results. The study found that, on average, brick and mortar (non-virtual) charter schools provided the equivalent of 22 additional
days of learning in reading and 15 additional days in math based on a typical 180 day school year. For low-income, minority students
the effect was even more dramatic: African-American students achieved the equivalent of 37 additional days of academic growth in
reading and 36 additional days growth in math, while Hispanic students showed 30 additional days of academic growth in both reading
and math.4
In other “school choice” news, Florida,
Arkansas, Iowa and Utah passed new laws to provide funding for families choosing to send their children to accredited K-12 private schools.
Additionally, expansion of the Indiana Choice Scholarship program makes 97% of all families in the state eligible to participate. Finally,
North Carolina expanded its existing Opportunity Scholarship program to apply to all families, which based on their financial means, will
provide $3,000 to $7,000 for use at private schools of their choice.5 All of these new and expanded programs are expected to
dramatically increase the demand for private school facilities over the next decade.
Senior Living
In the first quarter of 2023, the for-profit senior
living sector recorded its seventh quarter in a row of occupancy gains. Statistically, nationwide occupancy for independent living and
assisted living is 85.2% and 81.2%, respectively. Recovery has been slightly stronger in the higher acuity and needs based assisted living
setting; however, independent living is not far behind. As of the fourth quarter, senior living occupancy including independent and assisted
living occupancy had recovered 5.4% from the pandemic lows in 2021, but still has 4.0% to reach the pre-pandemic occupancy of 87.2%.6
Non-profit senior living has fared better than their
for-profit brethren since the pandemic hit. As of Q1 2023, non-profit continuing care retirement communities (“CCRC’s”)
were 89.3% occupied.6
Occupancy recovery has been fueled by almost three
years of slowing construction starts which as of the first quarter 2023 recorded the lowest primary market inventory growth since 2005,
when NIC started recording the data. Rising interest rates, elevated construction costs and tight lending conditions will continue to
propel occupancy in the months to come. Given the incredibly low number of units under construction, the market is setting up for a severe
supply and demand imbalance just as the baby boomer population is knocking on the doorstep.
(unaudited)
From
now until 2030, an average of 10,000 baby boomers will turn 65 every day.7 With the combination of increased population and
a slower pace of new senior living inventory supply, we remain confident in the senior living industry’s ability to rebound and
prepare for the upcoming “Silver Tsunami” as our population continues to age.
Concluding thoughts
We continue to stand by our positive long-term outlook
for the energy and power and sustainable infrastructure sectors. Opportunities for investing in education and senior living continue to
expand for many reasons positioning the sectors well for continued growth.
The S&P Energy Select Sector®
Index is a capitalization-weighted index of S&P 500® Index companies in the energy sector involved in the development
or production of energy products. The Tortoise North American Pipeline IndexSM is a float adjusted, capitalization-weighted index of
energy pipeline companies domiciled in the United States and Canada. The Tortoise MLP Index® is a float-adjusted, capitalization-weighted
index of energy master limited partnerships.
The Tortoise indices are the exclusive
property of Tortoise Index Solutions, LLC, which has contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC)
to calculate and maintain the Tortoise MLP Index® and Tortoise North American Pipeline IndexSM (the “Indices”).
The Indices are not sponsored by S&P Dow Jones Indices or its affiliates or its third party licensors (collectively, “S&P
Dow Jones Indices LLC”). S&P Dow Jones Indices will not be liable for any errors or omission in calculating the Indices. “Calculated
by S&P Dow Jones Indices” and its related stylized mark(s) are service marks of S&P Dow Jones Indices and have been licensed
for use by Tortoise Index Solutions, LLC and its affiliates. S&P® is a registered trademark of Standard & Poor’s
Financial Services LLC (“SPFS”), and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings
LLC (“Dow Jones”).
It is not possible to invest directly in an index.
Performance data quoted represent past performance;
past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment,
when sold, may be worth more or less than its original cost.
| 1 | Electronic Municipal Market Access ( https://emma.msrb.org/ ) & MuniOS ( https://www.munios.com/
) |
| 2 | Refinitiv Lipper US Fund Flows ( https://www.lipperusfundflows.com/ ) |
| 3 | Latest National Test Results Show Striking Drop in 13-year-olds’ Math and Reading Scores, Matt Barnum, “Chalkbeat”,
June 20, 2023 |
| 4 | The National Charter School Study III 2023, Center for Research on Education Outcomes (CREDO), June 19, 2023. |
2023 Semi-Annual Report | May
31, 2023
Tortoise
Energy Infrastructure Corp. (TYG)
Fund description
TYG seeks a high level of total return
with an emphasis on current distributions paid to stockholders. TYG invests primarily in equity securities in energy infrastructure companies.
The fund is positioned to benefit from growing energy demand and accelerated efforts to reduce global CO2 emissions in energy
production. Energy infrastructure companies generate, transport and distribute electricity, as well as process, store, distribute and
market natural gas, natural gas liquids, refined products and crude oil.
Fund performance
With
lower commodity prices during the period, the midstream sector proved to be defensive, outperforming E&Ps and other energy subsectors.
Midstream’s strong fundamentals, attractive valuations, defensive characteristics in a higher rate and inflationary environment
supported outperformance on a relative basis. The first half of 2023 underscored several 2022 themes in resilient quarterly earnings
and return of capital to shareholders. Renewable and power infrastructure sector messaged additional growth backlogs driven by the Inflation
Reduction Act (IRA) while simultaneously navigating headwinds around higher interest rate concerns and rising costs. The fund’s
market-based and NAV-based returns for the fiscal period ending May 31, 2023 were -15.7% and -10.7%, respectively (including the reinvestment
of distributions). The Tortoise MLP Index® returned -1.8% during the same period.
2023 mid-fiscal year summary |
|
Distributions paid per share |
$0.7100 |
Distribution rate (as of 5/31/2023) |
10.5% |
Year-over-year distribution increase (decrease) |
0.0% |
Cumulative distributions paid per share to stockholders since inception in February 2004 |
$42.4275 |
Market-based total return |
(15.7)% |
NAV-based total return |
(10.7)% |
Premium (discount) to NAV (as of 5/31/2023) |
(19.7)% |
Key asset performance drivers
Top five contributors |
Company type |
Magellan Midstream Partners, L.P. |
Refined products pipeline company |
Enterprise Products Partners L.P. |
Natural gas pipeline company |
DCP Midstream LP |
Natural gas pipeline company |
Energy Transfer LP |
Natural gas pipeline company |
MPLX LP |
Refined products pipeline company |
Bottom five contributors |
Company type |
Williams Companies Inc. |
Natural gas pipeline company |
AES Corp. |
Power company |
NextEra Energy Partners LP |
Diversified infrastructure company |
Clearway Energy, Inc. |
Diversified infrastructure company |
ONEOK, Inc. |
Natural gas pipeline company |
Unlike the fund return, index return is pre-expenses
and taxes.
Performance data quoted represent past performance;
past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment,
when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the
fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule
of Investments for portfolio weighting at the end of the fiscal quarter.
(unaudited)
Tortoise
Energy Infrastructure Corp. (TYG) (continued)
Value
of $10,000 vs. Tortoise Energy Infrastructure Fund – Market (unaudited)
From May 31, 2013 through May 31, 2023
The chart assumes an initial investment
of $10,000. Performance reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would
be reduced. Performance data quoted represents past performance and does not guarantee future results. Investment returns and principal
value will fluctuate, and when sold, may be worth more or less than their original cost. Performance current to the most recent month-end
may be lower or higher than the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment
of capital gains and income distributions. The performance does not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
Annualized Rates of Return as of May 31, 2023
|
1-Year |
3-Year |
5-Year |
10-Year |
Since Inception(1) |
Tortoise Energy Infrastructure Fund - NAV |
-6.68% |
18.41% |
-13.48% |
-7.49% |
2.02% |
Tortoise Energy Infrastructure Fund - Market |
-12.93% |
21.46% |
-18.46% |
-10.21% |
0.63% |
Tortoise
MLP Index® |
5.15% |
25.94% |
5.78% |
2.16% |
8.32% |
Tortoise Decarbonization Infrastructure IndexSM (2) |
-12.46% |
N/A |
N/A |
N/A |
N/A |
| (1) | Inception date of the Fund was Feburary 25, 2004. |
| (2) | The Tortoise Decarbonization Infrastructure Index was added to reflect the inclusion of a broader scope of energy infrastructure equities
including midstream, utilities, and renewables in TYG effective November 30, 2021. |
Fund structure and distribution policy
The fund intends to qualify as a Regulated Investment Company
(RIC) allowing it to pass-through to shareholders income and capital gains earned, thus avoiding double-taxation. To qualify as a RIC,
the fund must meet specific income, diversification and distribution requirements. See Note 2E to financial statements for further disclosure.
The fund has adopted a managed distribution policy (“MDP”).
Annual distribution amounts are expected to fall in the range of 7% to 10% of the average week-ending net asset value (“NAV”)
per share for the prior fiscal semi-annual period. Distribution amounts will be reset both up and down to provide a consistent return
on trailing NAV. Under the MDP, distribution amounts will normally be reset in February and August, with no changes in distribution amounts
in May and November.
Leverage
The fund’s leverage utilization decreased $33.3 million
during the six months ended May 31, 2023, compared to the six months ended November 30, 2022, and represented 22.8% of total assets at
May 31, 2023. During the period, the fund was in compliance with its applicable coverage ratios, 93.8% of the leverage cost was fixed,
the weighted-average maturity was 2.4 years and the weighted-average annual rate on leverage was 3.79%. These rates will vary in the future
as a result of changing floating rates, utilization of the fund’s credit facility and as leverage matures or is redeemed. During
the six month period ended May 31, 2023, $9.7 million of Senior Notes were paid in full upon maturity.
Please see the Financial Statements and Notes to Financial
Statements for additional detail regarding critical accounting policies, results of operations, leverage, taxes and other important fund
information.
For further information regarding the calculation of distributable
cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit www.tortoiseecofin.com.
(unaudited)
2023 Semi-Annual Report | May
31, 2023
TYG Key Financial Data
(supplemental unaudited information)
(dollar amounts in thousands unless otherwise indicated)
The
information presented below is supplemental non-GAAP financial information, is not inclusive of required financial disclosures (e.g.
Total Expense Ratio), and should be read in conjunction with the full financial statements.
|
|
2022 |
|
|
2023 |
|
|
|
Q1(1) |
|
|
Q2(1) |
|
|
Q3(1) |
|
|
Q4(1) |
|
|
Q1(1) |
|
|
Q2(1) |
|
Selected Financial Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions paid on common stock |
|
$ |
8,469 |
|
|
$ |
8,469 |
|
|
$ |
8,469 |
|
|
$ |
8,045 |
|
|
$ |
8,045 |
|
|
$ |
8,046 |
|
Distributions paid on common stock per share(2) |
|
|
0.7100 |
|
|
|
0.7100 |
|
|
|
0.7100 |
|
|
|
0.7100 |
|
|
|
0.7100 |
|
|
|
0.7100 |
|
Total assets, end of period(3) |
|
|
612,536 |
|
|
|
640,253 |
|
|
|
638,068 |
|
|
|
623,319 |
|
|
|
577,524 |
|
|
|
504,066 |
|
Average total assets during period(3)(4) |
|
|
589,709 |
|
|
|
626,150 |
|
|
|
621,364 |
|
|
|
607,430 |
|
|
|
595,508 |
|
|
|
547,380 |
|
Leverage(5) |
|
|
146,087 |
|
|
|
144,987 |
|
|
|
144,587 |
|
|
|
147,993 |
|
|
|
146,213 |
|
|
|
114,713 |
|
Leverage as a percent of total assets |
|
|
23.8 |
% |
|
|
22.6 |
% |
|
|
22.7 |
% |
|
|
23.7 |
% |
|
|
25.3 |
% |
|
|
22.8 |
% |
Operating expenses before leverage costs and current taxes(6) |
|
|
1.11 |
% |
|
|
1.07 |
% |
|
|
1.05 |
% |
|
|
1.16 |
% |
|
|
1.11 |
% |
|
|
1.22 |
% |
Net unrealized appreciation (depreciation), end of period |
|
|
(311,995 |
) |
|
|
(268,736 |
) |
|
|
(270,982 |
) |
|
|
9,330 |
|
|
|
(34,286 |
) |
|
|
(65,512 |
) |
Net assets, end of period |
|
|
436,770 |
|
|
|
469,005 |
|
|
|
467,109 |
|
|
|
446,618 |
|
|
|
416,799 |
|
|
|
380,323 |
|
Average net assets during period(7) |
|
|
413,334 |
|
|
|
459,626 |
|
|
|
442,939 |
|
|
|
435,678 |
|
|
|
429,315 |
|
|
|
409,946 |
|
Net asset value per common share(2) |
|
|
36.62 |
|
|
|
39.32 |
|
|
|
39.16 |
|
|
|
39.41 |
|
|
|
36.78 |
|
|
|
33.56 |
|
Market value per share(2) |
|
|
30.25 |
|
|
|
33.84 |
|
|
|
34.14 |
|
|
|
33.54 |
|
|
|
30.89 |
|
|
|
26.95 |
|
Shares outstanding (000’s) |
|
|
11,928 |
|
|
|
11,928 |
|
|
|
11,928 |
|
|
|
11,332 |
|
|
|
11,332 |
|
|
|
11,332 |
|
| (1) | Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August.
Q4 is the period from September through November. |
| (2) | Adjusted to reflect 1 for 4 reverse stock split effective May 1, 2020. |
| (3) | Includes deferred issuance and offering costs on senior notes and preferred stock. |
| (4) | Computed by averaging month-end values within each period. |
| (5) | Leverage consists of senior notes, preferred stock and outstanding borrowings under credit facilities. |
| (6) | As a percent of total assets. |
| (7) | Computed by averaging daily net assets within each period. |
Tortoise
Midstream Energy Fund, Inc. (NTG)
Fund description
NTG seeks to provide stockholders with a high level of total
return with an emphasis on current distributions. NTG invests primarily in midstream energy equities that own and operate a network of
pipeline and energy related logistical infrastructure assets with an emphasis on those that transport, gather, process and store natural
gas and natural gas liquids (NGLs). NTG targets midstream energy equities, including MLPs benefiting from U.S. natural gas production
and consumption expansion, with minimal direct commodity exposure.
Fund performance
With lower commodity prices during the period, the midstream
sector proved to be defensive, outperforming E&Ps and other energy subsectors. Midstream’s strong fundamentals, attractive valuations,
defensive characteristics in a higher rate and inflationary environment supported outperformance on a relative basis. The first half of
2023 underscored several 2022 themes in resilient quarterly earnings and return of capital to shareholders. The fund’s market-based
and NAV-based returns for the fiscal period ending May 31, 2023 were -12.5% and -11.7%, respectively (including the reinvestment of distributions).
The Tortoise MLP Index® returned -1.8% during the same period.
2023 mid-fiscal year summary |
|
Distributions paid per share |
$0.7700 |
Distribution rate (as of 5/31/2023) |
9.8% |
Quarter-over-quarter distribution increase (decrease) |
0.0% |
Year-over-year distribution increase (decrease) |
0.0% |
Cumulative distributions paid per share to stockholders since inception in July 2010 |
$22.5800 |
Market-based total return |
(12.5)% |
NAV-based total return |
(11.7)% |
Premium (discount) to NAV (as of 5/31/2023) |
(15.5)% |
Key asset performance drivers
Top five contributors |
Company type |
Enterprise Products Partners L.P. |
Natural gas pipelines company |
Plains GP Holdings, L.P. |
Crude oil pipeline company |
DCP Midstream LP |
Natural gas pipeline company |
Energy Transfer LP |
Natural gas pipeline company |
Magellan Midstream Partners, L.P. |
Refined products pipeline company |
Bottom five contributors |
Company type |
Williams Companies Inc. |
Natural gas pipeline company |
Kinder Morgan Inc. |
Natural gas pipeline company |
Cheniere Energy Inc. |
Natural gas pipeline company |
ONEOK, Inc. |
Natural gas pipeline company |
DT Midstream Inc. |
Natural gas pipeline company |
Unlike the fund return, index return is pre-expenses
and taxes.
Performance data quoted represent past performance;
past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment,
when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the
fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule
of Investments for portfolio weighting at the end of the fiscal quarter.
(unaudited)
2023 Semi-Annual Report | May
31, 2023
Tortoise
Midstream Energy Fund, Inc. (NTG) (continued)
Value of $10,000 vs. Tortoise
Midstream Energy Fund – Market (unaudited)
From May 31, 2013 through May 31, 2023
The chart assumes an initial investment of $10,000. Performance
reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Performance data
quoted represents past performance and does not guarantee future results. Investment returns and principal value will fluctuate, and when
sold, may be worth more or less than their original cost. Performance current to the most recent month-end may be lower or higher than
the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment of capital gains and income distributions.
The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Annualized Rates of Return as of May 31, 2023
|
1-Year |
3-Year |
5-Year |
10-Year |
Since Inception(1) |
Tortoise Midstream Energy Fund – NAV |
-8.53% |
21.66% |
-19.15% |
-10.64% |
-6.19% |
Tortoise Midstream Energy Fund – Market |
-9.56% |
23.10% |
-23.12% |
-12.53% |
-7.75% |
Tortoise
MLP Index® |
5.15% |
25.94% |
5.78% |
2.16% |
5.73% |
(1) Inception date of the
Fund was July 27, 2010.
Fund structure and distribution policy
The fund intends to qualify as a Regulated Investment Company
(RIC) allowing it to pass-through to shareholders income and capital gains earned, thus avoiding double-taxation. To qualify as a RIC,
the fund must meet specific income, diversification and distribution requirements. See Note 2E to the financial statements for further
disclosure.
The fund has adopted a managed distribution policy (“MDP”).
Annual distribution amounts are expected to fall in the range of 7% to 10% of the average week-ending net asset value (“NAV”)
per share for the prior fiscal semi-annual period. Distribution amounts will be reset both up and down to provide a consistent return
on trailing NAV. Under the MDP, distribution amounts will normally be reset in February and August, with no changes in distribution amounts
in May and November.
Leverage
The fund’s leverage utilization decreased approximately
$5.4 million during the six months ended May 31, 2023 compared to the six months ended November 30, 2022, and represented 21.7% of total
assets at May 31, 2023. During the period, the fund was in compliance with its applicable coverage ratios, 84.4% of the leverage cost
was fixed, the weighted-average maturity was 3.6 years and the weighted-average annual rate on leverage was 3.86%. These rates will vary
in the future as a result of changing floating rates, utilization of the fund’s credit facility and as leverage matures or is redeemed.
During the six month period ended May 31, 2023, $3.8 million of preferred stock was paid in full upon maturity.
Please see the Financial Statements and Notes to Financial
Statements for additional detail regarding critical accounting policies, results of operations, leverage, taxes and other important fund
information.
For further information regarding the calculation of distributable
cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit www.tortoiseecofin.com.
(unaudited)
NTG Key Financial Data
(supplemental unaudited information)
(dollar amounts in thousands unless otherwise indicated)
The information presented below is supplemental non-GAAP
financial information, is not inclusive of required financial disclosures (e.g. Total Expense Ratio), and should be read in conjunction
with the full financial statements.
|
|
2022 |
|
|
2023 |
|
|
Q1(1) |
|
|
Q2(1) |
|
|
Q3(1) |
|
|
Q4(1) |
|
|
Q1(1) |
|
|
Q2(1) |
|
Selected Financial Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions
paid on common stock |
|
$ |
4,345 |
|
|
$ |
4,345 |
|
|
$ |
4,345 |
|
|
$ |
4,128 |
|
|
$ |
4,128 |
|
|
$ |
4,128 |
|
Distributions paid on common stock per share(2) |
|
|
0.7700 |
|
|
|
0.7700 |
|
|
|
0.7700 |
|
|
|
0.7700 |
|
|
|
0.7700 |
|
|
|
0.7700 |
|
Total assets, end of period(3) |
|
|
307,035 |
|
|
|
328,526 |
|
|
|
316,411 |
|
|
|
323,122 |
|
|
|
296,682 |
|
|
|
261,858 |
|
Average total assets during period(3)(4) |
|
|
289,590 |
|
|
|
317,967 |
|
|
|
312,932 |
|
|
|
308,008 |
|
|
|
304,884 |
|
|
|
281,520 |
|
Leverage(5) |
|
|
63,069 |
|
|
|
66,369 |
|
|
|
64,169 |
|
|
|
62,369 |
|
|
|
66,120 |
|
|
|
56,920 |
|
Leverage as a percent of total assets |
|
|
20.5 |
% |
|
|
20.2 |
% |
|
|
20.3 |
% |
|
|
19.3 |
% |
|
|
22.3 |
% |
|
|
21.7 |
% |
Operating expenses before leverage costs and current taxes(6) |
|
|
1.22 |
% |
|
|
1.07 |
% |
|
|
1.11 |
% |
|
|
1.29 |
% |
|
|
1.16 |
% |
|
|
1.36 |
% |
Net unrealized appreciation (depreciation), end of period |
|
|
129,068 |
|
|
|
154,849 |
|
|
|
145,148 |
|
|
|
27,611 |
|
|
|
6,856 |
|
|
|
(11,572 |
) |
Net assets, end of period |
|
|
231,856 |
|
|
|
250,913 |
|
|
|
240,864 |
|
|
|
237,022 |
|
|
|
221,555 |
|
|
|
200,046 |
|
Average net assets during period(7) |
|
|
212,000 |
|
|
|
244,906 |
|
|
|
231,908 |
|
|
|
230,297 |
|
|
|
226,098 |
|
|
|
215,743 |
|
Net asset value per common share(2) |
|
|
41.09 |
|
|
|
44.46 |
|
|
|
42.68 |
|
|
|
44.21 |
|
|
|
41.33 |
|
|
|
37.32 |
|
Market value per common share(2) |
|
|
34.81 |
|
|
|
37.99 |
|
|
|
36.79 |
|
|
|
37.69 |
|
|
|
35.28 |
|
|
|
31.53 |
|
Shares outstanding (000’s) |
|
|
5,643 |
|
|
|
5,643 |
|
|
|
5,643 |
|
|
|
5,361 |
|
|
|
5,361 |
|
|
|
5,361 |
|
| (1) | Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August.
Q4 is the period from September through November. |
| (2) | Adjusted to reflect 1 for 10 reverse stock split effective May 1, 2020. |
| (3) | Includes deferred issuance and offering costs on senior notes and preferred stock. |
| (4) | Computed by averaging month-end values within each period. |
| (5) | Leverage consists of senior notes, preferred stock and outstanding borrowings under the credit facility. |
| (6) | Computed as a percent of total assets. |
| (7) | Computed by averaging daily net assets within each period. |
2023 Semi-Annual Report | May
31, 2023
Tortoise
Pipeline & Energy Fund, Inc. (TTP)
Fund description
TTP seeks a high level of total return with an emphasis
on current distributions paid to stockholders. TTP invests primarily in equity securities of North American pipeline companies that transport
natural gas, natural gas liquids (NGLs), crude oil and refined products and, to a lesser extent, in other energy infrastructure companies.
Fund performance
With
lower commodity prices during the period, the midstream sector proved to be defensive, outperforming E&Ps and other energy subsectors.
Midstream’s strong fundamentals, attractive valuations, defensive characteristics in a higher rate and inflationary environment
supported outperformance on a relative basis. The first half of 2023 underscored several 2022 themes in resilient quarterly earnings
and return of capital to shareholders. The fund’s market-based and NAV-based returns for the fiscal period ending May 31, 2023
were -9.3% and -9.5%, respectively (including the reinvestment of distributions). The Tortoise North American Pipeline IndexSM
returned -8.2% for the same period.
2023 mid-fiscal year summary |
|
Distributions paid per share |
$0.5900 |
Distribution rate (as of 5/31/2023) |
9.5% |
Year-over-year distribution increase (decrease) |
0.0% |
Cumulative distributions paid per share to stockholders since inception in October 2011 |
$18.4775 |
Market-based total return |
(9.3)% |
NAV-based total return |
(9.5)% |
Premium (discount) to NAV (as of 5/31/2023) |
(17.6)% |
Please refer to the inside front cover of the report
for important information about the fund’s distribution policy.
Key asset performance drivers
Top five contributors |
Company type |
Magellan Midstream Partners, L.P. |
Refined products pipeline company |
Plains GP Holdings, L.P. |
Crude oil pipeline company |
Enterprise Products Partners L.P. |
Natural gas pipeline company |
Equitrans Midstream Corporation |
Gathering & processing company |
Energy Transfer LP |
Natural gas pipeline company |
Bottom five contributors |
Company type |
Williams Companies Inc. |
Natural gas pipeline company |
Cheniere Energy Inc. |
Natural gas pipeline company |
Kinder Morgan Inc. |
Natural gas pipeline company |
ONEOK, Inc. |
Natural gas pipeline company |
Enbridge Inc. |
Crude oil pipeline company |
Unlike the fund return, index return is pre-expenses.
Performance data quoted represent past performance;
past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment,
when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the
fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule
of Investments for portfolio weighting at the end of the fiscal quarter.
(unaudited)
Tortoise
Pipeline & Energy Fund, Inc. (TTP) (continued)
Value of $10,000 vs. Tortoise
Pipeline and Energy Fund – Market (unaudited)
From May 31, 2013 through May 31, 2023
The chart assumes an initial investment of $10,000. Performance
reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Performance data
quoted represents past performance and does not guarantee future results. Investment returns and principal value will fluctuate, and when
sold, may be worth more or less than their original cost. Performance current to the most recent month-end may be lower or higher than
the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment of capital gains and income distributions.
The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Annualized Rates of Return as of May 31, 2023
|
1-Year |
3-Year |
5-Year |
10-Year |
Since Inception(1) |
Tortoise Pipeline and Energy Fund – NAV |
-8.15% |
21.68% |
-9.80% |
-5.34% |
-2.33% |
Tortoise Pipeline and Energy Fund – Market |
-9.31% |
20.97% |
-11.92% |
-7.31% |
-4.33% |
Tortoise North American Pipeline Index |
-9.52% |
17.28% |
6.20% |
5.36% |
6.97% |
| | |
| (1) | Inception date of the Fund was October 26, 2011. |
Fund structure and distribution policy
The fund is structured to qualify as a Regulated Investment
Company (RIC) allowing it to pass-through to shareholders income and capital gains earned, thus avoiding double-taxation. To qualify as
a RIC, the fund must meet specific income, diversification and distribution requirements. Regarding income, at least 90 percent of the
fund’s gross income must be from dividends, interest and capital gains. The fund must meet quarterly diversification requirements
including the requirement that at least 50 percent of the assets be in cash, cash equivalents or other securities with each single issuer
of other securities not greater than 5 percent of total assets. No more than 25 percent of total assets can be invested in any one issuer
other than government securities or other RIC’s. The fund must also distribute at least 90 percent of its investment company income.
RIC’s are also subject to excise tax rules which require RIC’s to distribute approximately 98 percent of net income and net
capital gains to avoid a 4 percent excise tax.
The fund has adopted a
distribution policy which is included on the inside front cover of this report. To summarize, the fund has adopted a managed
distribution policy (“MDP”). Annual distribution amounts are expected to fall in the range of 7% to 10% of the average
week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. Distribution amounts will be
reset both up and down to provide a consistent return on trailing NAV. Under the MDP, distribution amounts will normally be reset in
February and August, with no changes in distribution amounts in May and November. The fund may designate a portion of its
distributions as capital gains and may also distribute additional capital gains in the last quarter of the year to meet annual
excise distribution requirements. Distribution amounts are subject to change from time to time at the discretion of the
Board.
Leverage
The fund’s leverage
utilization decreased approximately $2.4 million during the six months ended May 31, 2023, compared to the six months ended November
30, 2022, and represented 21.3% of total assets at May 31, 2023. During the period, the fund maintained compliance with its
applicable coverage ratios, 57.6% of the leverage cost was fixed, the weighted-average maturity was 1.1 years and the
weighted-average annual rate on leverage was 5.31%. These rates will vary in the future as a result of changing floating rates,
utilization of the fund’s credit facility and as leverage matures or is redeemed.
Please see the Financial Statements and Notes to Financial
Statements for additional detail regarding critical accounting policies, results of operations, leverage and other important fund information.
For further information regarding the calculation of distributable
cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit www.tortoiseecofin.com.
(unaudited)
2023 Semi-Annual Report | May
31, 2023
TTP Key Financial Data
(supplemental unaudited information)
(dollar amounts in thousands unless otherwise indicated)
The information presented below is supplemental non-GAAP
financial information, is not inclusive of required financial disclosures (e.g. Total Expense Ratio), and should be read in conjunction
with the full financial statements.
|
|
2022 |
|
|
2023 |
|
|
Q1(1) |
|
|
Q2(1) |
|
|
Q3(1) |
|
|
Q4(1) |
|
|
Q1(1) |
|
|
Q2(1) |
|
Selected Financial Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions paid on common stock |
|
$ |
1,314 |
|
|
$ |
1,314 |
|
|
$ |
1,314 |
|
|
$ |
1,249 |
|
|
$ |
1,248 |
|
|
$ |
1,249 |
|
Distributions paid on common stock per share(2) |
|
|
0.5900 |
|
|
|
0.5900 |
|
|
|
0.5900 |
|
|
|
0.5900 |
|
|
|
0.5900 |
|
|
|
0.5900 |
|
Total assets, end of period(3) |
|
|
92,230 |
|
|
|
100,901 |
|
|
|
97,010 |
|
|
|
93,907 |
|
|
|
87,895 |
|
|
|
81,736 |
|
Average total assets during period(3)(4) |
|
|
86,730 |
|
|
|
96,706 |
|
|
|
96,086 |
|
|
|
93,079 |
|
|
|
90,503 |
|
|
|
86,135 |
|
Leverage(5) |
|
|
20,143 |
|
|
|
20,943 |
|
|
|
21,343 |
|
|
|
19,843 |
|
|
|
20,143 |
|
|
|
17,443 |
|
Leverage as a percent of total assets |
|
|
21.8 |
% |
|
|
20.8 |
% |
|
|
22.0 |
% |
|
|
21.1 |
% |
|
|
22.9 |
% |
|
|
21.3 |
% |
Operating expenses before leverage costs(6) |
|
|
1.00 |
% |
|
|
1.90 |
% |
|
|
1.05 |
% |
|
|
1.32 |
% |
|
|
1.28 |
% |
|
|
1.37 |
% |
Net unrealized appreciation, end of period |
|
|
11,927 |
|
|
|
20,208 |
|
|
|
17,286 |
|
|
|
19,117 |
|
|
|
13,950 |
|
|
|
9,483 |
|
Net assets, end of period |
|
|
71,653 |
|
|
|
79,443 |
|
|
|
75,181 |
|
|
|
73,509 |
|
|
|
67,264 |
|
|
|
63,730 |
|
Average net assets during period(7) |
|
|
66,721 |
|
|
|
76,749 |
|
|
|
73,287 |
|
|
|
71,609 |
|
|
|
69,939 |
|
|
|
66,399 |
|
Net asset value per common share(2) |
|
|
32.16 |
|
|
|
35.66 |
|
|
|
33.75 |
|
|
|
34.73 |
|
|
|
31.78 |
|
|
|
30.11 |
|
Market value per common share(2) |
|
|
26.44 |
|
|
|
29.76 |
|
|
|
29.18 |
|
|
|
28.58 |
|
|
|
27.09 |
|
|
|
24.81 |
|
Shares outstanding (000’s) |
|
|
2,228 |
|
|
|
2,228 |
|
|
|
2,228 |
|
|
|
2,116 |
|
|
|
2,116 |
|
|
|
2,116 |
|
| (1) | Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August.
Q4 is the period from September through November. |
| (2) | Adjusted to reflect 1 for 4 reverse stock split effective May 1, 2020. |
| (3) | Includes deferred issuance and offering costs on senior notes and preferred stock. |
| (4) | Computed by averaging month-end values within each period. |
| (5) | Leverage consists of senior notes, preferred stock and outstanding borrowings under the revolving credit facility. |
| (6) | Computed as a percent of total assets. |
| (7) | Computed by averaging daily net assets within each period. |
Tortoise
Energy Independence Fund, Inc. (NDP)
Fund description
NDP seeks a high level of total
return with an emphasis on current distributions paid to stockholders. NDP invests primarily in equity securities of upstream North
American energy companies that engage in the exploration and production of crude oil, condensate, natural gas and natural gas
liquids that generally have a significant presence in North American oil and gas fields, including shale reservoirs.
Fund performance
The first half of 2023 saw the energy sector pressured by
lower prices in both crude oil and natural gas on recession concerns and warmer-than-expected winter weather. On the contrary, long-term
supply concerns remain as 2022 was the eighth consecutive year of underinvestment in oil and gas. The opportunity for North American energy
infrastructure remains as the U.S. energy industry focuses on maximizing shareholder returns. Global underinvestment resulting from environmental,
social and governance (ESG) commitments and energy transition is likely to keep global stock balances extremely tight for the foreseeable
future. The fund’s market-based and NAV-based returns for the fiscal period ending May 31, 2023 were -12.7% and -13.9%, respectively
(including the reinvestment of distributions).
2023 mid-fiscal year summary |
|
Distributions paid per share |
$0.6300 |
Distribution rate (as of 5/31/2023) |
9.3% |
Year-over-year distribution increase (decrease) |
31.3% |
Cumulative
distributions paid per share to stockholders since inception in July 2012 |
$16.0725 |
Market-based total return |
(12.7)% |
NAV-based total return |
(13.9)% |
Premium (discount) to NAV (as of 5/31/2023) |
(14.1)% |
The fund utilizes a covered call strategy when appropriate,
which seeks to generate income while reducing overall volatility. No covered calls were written during the period.
Key asset performance drivers
Top five contributors |
Company type |
Plains All American Pipeline, L.P. |
Crude oil pipeline company |
DCP Midstream LP |
Natural gas pipeline company |
Magellan Midstream Partners, L.P. |
Refined products pipeline company |
Energy Transfer LP |
Natural gas pipeline company |
TXO Partners LP |
Oil & gas production company |
|
|
Bottom five contributors |
Company type |
Devon Energy Corporation |
Oil & gas production company |
Cheniere Energy Inc. |
Natural gas pipeline company |
EQT Corp. |
Oil & gas production company |
EOG Resources Inc. |
Oil & gas production company |
Marathon Oil Corp. |
Oil & gas production company |
Unlike the fund return, index return is pre-expenses.
Performance data quoted represent past performance:
past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment,
when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the
fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule
of Investments for portfolio weighting at the end of the fiscal quarter.
(unaudited)
2023 Semi-Annual Report | May
31, 2023
Tortoise
Energy Independence Fund, Inc. (NDP) (continued)
Value of $10,000 vs. Tortoise
Energy Independence Fund – Market (unaudited)
From May 31, 2013 through May 31, 2023
The chart assumes an initial investment of $10,000. Performance
reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Performance data
quoted represents past performance and does not guarantee future results. Investment returns and principal value will fluctuate, and when
sold, may be worth more or less than their original cost. Performance current to the most recent month-end may be lower or higher than
the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment of capital gains and income distributions.
The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Annualized Rates of Return as of May 31, 2023
|
1-Year |
3-Year |
5-Year |
10-Year |
Since Inception(1) |
Tortoise Energy Independence Fund − NAV |
-11.84% |
31.27% |
-13.11% |
-8.30% |
-6.93% |
Tortoise Energy Independence Fund − Market |
-9.80% |
37.35% |
-16.11% |
-9.74% |
-8.62% |
S&P 500 Energy Select Sector Index |
-8.23% |
31.60% |
5.34% |
3.43% |
4.78% |
(1) Inception date of the
Fund was July 26, 2012.
Fund structure and distribution policy
The fund is structured to qualify as a Regulated Investment
Company (RIC) allowing it to pass-through to shareholders income and capital gains earned, thus avoiding double-taxation. To qualify as
a RIC, the fund must meet specific income, diversification and distribution requirements. Regarding income, at least 90 percent of the
fund’s gross income must be from dividends, interest and capital gains. The fund must meet quarterly diversification requirements
including the requirement that at least 50 percent of the assets be in cash, cash equivalents or other securities with each single issuer
of other securities not greater than 5 percent of total assets. No more than 25 percent of total assets can be invested in any one issuer
other than government securities or other RIC’s. The fund must also distribute at least 90 percent of its investment company income.
RIC’s are also subject to excise tax rules which require RIC’s to distribute approximately 98 percent of net income and net
capital gains to avoid a 4 percent excise tax.
The fund has adopted a managed distribution policy (“MDP”).
Annual distribution amounts are expected to fall in the range of 7% to 10% of the average week-ending net asset value (“NAV”)
per share for the prior fiscal semi-annual period. Distribution amounts will be reset both up and down to provide a consistent return
on trailing NAV. Under the MDP, distribution amounts will normally be reset in February and August, with no changes in distribution amounts
in May and November.
Leverage
The fund’s leverage utilization increased $5.1 million
during the six months ended May 31, 2023 as compared to the six months ended November 30, 2022. The fund utilizes all floating rate leverage
that had an interest rate of 6.44% and represented 13.7% of total assets at May 31, 2023. During the period, the fund maintained compliance
with its applicable coverage ratios. The interest rate on the fund’s leverage will vary in the future along with changing floating
rates.
Please see the Financial Statements and Notes to Financial
Statements for additional detail regarding critical accounting policies, results of operations, leverage and other important fund information.
For further information regarding the calculation of distributable
cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit www.tortoiseecofin.com.
(unaudited)
NDP
Key Financial Data (supplemental unaudited information)
(dollar amounts in thousands unless otherwise indicated)
The information presented below is supplemental non-GAAP
financial information, is not inclusive of required financial disclosures (e.g. Total Expense Ratio), and should be read in conjunction
with the full financial statements.
|
|
2022 |
|
|
2023 |
|
|
Q1(1) |
|
|
Q2(1) |
|
|
Q3(1) |
|
|
Q4(1) |
|
|
Q1(1) |
|
|
Q2(1) |
|
Selected
Financial Information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions
paid on common stock |
|
$ |
886 |
|
|
$ |
886 |
|
|
$ |
1,034 |
|
|
$ |
982 |
|
|
$ |
1,105 |
|
|
$ |
1,105 |
|
Distributions
paid on common stock per share(2) |
|
|
0.4800 |
|
|
|
0.4800 |
|
|
|
0.5600 |
|
|
|
0.5600 |
|
|
|
0.6300 |
|
|
|
0.6300 |
|
Total
assets, end of period |
|
|
62,500 |
|
|
|
75,288 |
|
|
|
72,928 |
|
|
|
71,059 |
|
|
|
68,060 |
|
|
|
64,422 |
|
Average
total assets during period(3) |
|
|
55,216 |
|
|
|
67,737 |
|
|
|
69,811 |
|
|
|
71,651 |
|
|
|
69,055 |
|
|
|
67,241 |
|
Leverage(4) |
|
|
3,200 |
|
|
|
3,600 |
|
|
|
4,000 |
|
|
|
3,700 |
|
|
|
8,400 |
|
|
|
8,800 |
|
Leverage
as a percent of total assets |
|
|
5.1 |
% |
|
|
4.8 |
% |
|
|
5.5 |
% |
|
|
5.2 |
% |
|
|
12.3 |
% |
|
|
13.7 |
% |
Operating
expenses before leverage costs as a percent of total assets |
|
|
1.23 |
% |
|
|
1.46 |
% |
|
|
1.24 |
% |
|
|
1.34 |
% |
|
|
1.28 |
% |
|
|
1.35 |
% |
Net
unrealized appreciation, end of period |
|
|
22,097 |
|
|
|
32,340 |
|
|
|
29,531 |
|
|
|
30,806 |
|
|
|
23,977 |
|
|
|
20,571 |
|
Net
assets, end of period |
|
|
58,650 |
|
|
|
71,407 |
|
|
|
67,884 |
|
|
|
67,067 |
|
|
|
59,361 |
|
|
|
55,288 |
|
Average
net assets during period(5) |
|
|
51,521 |
|
|
|
64,733 |
|
|
|
63,623 |
|
|
|
67,687 |
|
|
|
62,487 |
|
|
|
58,619 |
|
Net
asset value per common share(2) |
|
|
31.77 |
|
|
|
38.68 |
|
|
|
36.77 |
|
|
|
38.24 |
|
|
|
33.85 |
|
|
|
31.53 |
|
Market
value per common share(2) |
|
|
27.59 |
|
|
|
32.47 |
|
|
|
32.37 |
|
|
|
32.41 |
|
|
|
29.46 |
|
|
|
27.08 |
|
Shares
outstanding (000’s) |
|
|
1,846 |
|
|
|
1,846 |
|
|
|
1,846 |
|
|
|
1,754 |
|
|
|
1,754 |
|
|
|
1,754 |
|
| (1) | Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August.
Q4 is the period from September through November. |
| (2) | Adjusted to reflect 1 for 8 reverse stock split effective May 1, 2020. |
| (3) | Computed by averaging month-end values within each period. |
| (4) | Leverage consists of outstanding borrowings under the revolving credit facility. |
| (5) | Computed by averaging daily net assets within each period. |
|
|
2023 Semi-Annual Report | May 31, 2023 |
|
Tortoise
Power and Energy Infrastructure Fund,
Inc. (TPZ) |
|
Fund description
TPZ seeks to provide a high level of current income to stockholders,
with a secondary objective of capital appreciation. TPZ seeks to invest primarily in fixed income and dividend-paying equity securities
of power and energy infrastructure companies that provide stable and defensive characteristics throughout economic cycles.
Fund performance
With lower commodity prices
during the period, the midstream sector proved to be defensive, outperforming E&Ps and other energy subsectors.
Midstream’s strong fundamentals, attractive valuations, defensive characteristics in a higher rate and
inflationary environment supported outperformance on a relative basis. The first half of 2023 underscored several 2022 themes
in resilient quarterly earnings and return of capital to shareholders. The fund’s market-based and NAV-based returns
for the fiscal period ending May 31, 2023 were -4.0% and -0.9%, respectively (including the reinvestment of distributions).
Comparatively, the TPZ Benchmark Composite* returned 1.4% for the same period. The fund’s fixed income holdings outperformed
its equity holdings for the period on a total return basis.
2023 mid-fiscal year summary |
|
Distributions paid per share |
$0.3150 |
Monthly distributions paid per share |
$0.105 |
Distribution rate (as of 5/31/2023) |
10.1% |
Year-over-year distribution increase (decrease) |
0.0% |
Cumulative
distribution to stockholders since inception in July 2009 |
$20.2650 |
Market-based total return |
(4.0)% |
NAV-based total return |
(0.9)% |
Premium (discount) to NAV (as of 5/31/2023) |
(16.7)% |
| * | The TPZ Benchmark Composite includes the
BofA Merrill Lynch U.S. Energy Index (CIEN), the BofA Merrill Lynch U.S. Electricity Index
(CUEL) and the Tortoise MLP Index® (TMLP). It is comprised of a blend of 70%
fixed income and 30% equity securities issued by companies in the power and energy infrastructure
sectors. |
Please refer to the inside front cover of the
report for important information about the fund’s distribution policy.
Key asset performance drivers
Top five contributors |
Company type |
Magellan Midstream Partners, L.P. |
Refined products pipeline company |
NextEra
Energy, Inc. 4.800%, 12/1/2077 |
Diversified infrastructure company |
Plains GP Holdings, L.P. |
Crude oil pipeline company |
Enterprise Products Partners L.P. |
Natural gas pipeline company |
Blue
Racer Midstream LLC 6.625%, 7/15/2026 |
Gathering & processing company |
|
|
Bottom five contributors |
Company type |
Williams Companies Inc. |
Gathering & processing company |
Kinder Morgan Inc. |
Natural gas pipeline company |
Targa Resources Corp. |
Natural gas pipeline company |
Sempra Energy |
Diversified infrastructure company |
DT Midstream Inc. |
Natural gas pipeline company |
Unlike the fund return, index return is pre-expenses.
Performance data quoted represent past performance;
past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment,
when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the
fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule
of Investments for portfolio weighting at the end of the fiscal quarter.
(unaudited)
|
|
Tortoise
Power and Energy Infrastructure Fund, Inc. (TPZ) (continued) |
|
Value
of $10,000 vs. Tortoise Power and Energy Infrastructure Fund – Market (unaudited)
From May 31, 2013 through May 31, 2023
The chart assumes an initial investment of $10,000.
Performance reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Performance
data quoted represents past performance and does not guarantee future results. Investment returns and principal value will fluctuate,
and when sold, may be worth more or less than their original cost. Performance current to the most recent month-end may be lower or higher
than the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment of capital gains and income
distributions. The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption
of Fund shares.
Annualized Rates of Return as of May 31, 2023
|
1-Year | |
3-Year | |
5-Year | |
10-Year | |
Since
Inception(2) | |
Tortoise
Power and Energy Infrastructure Fund – NAV |
0.68% | |
15.26% | |
1.25% | |
1.70% | |
5.54% | |
Tortoise Power
and Energy Infrastructure Fund – Market |
-3.03% | |
16.52% | |
-0.36% | |
0.39% | |
4.16% | |
TPZ
Benchmark Composite(1) |
0.94% | |
5.69% | |
3.73% | |
2.91% | |
5.69% | |
| (1) | The
TPZ Benchmark Composite includes the BofA Merrill Lynch U.S. Energy Index (CIEN), the BofA
Merrill Lynch U.S. Electricity Index (CUEL) and the Tortoise MLP Index® (TMLP). |
| (2) | Inception date of the Fund was July 29, 2009. |
Fund structure and distribution policy
The fund is structured to qualify
as a Regulated Investment Company (RIC) allowing it to pass-through to shareholders income and capital gains earned, thus
avoiding double-taxation. To qualify as a RIC, the fund must meet specific income, diversification and distribution requirements.
Regarding income, at least 90 percent of the fund gross income must be from dividends, interest and capital gains. The fund
must meet quarterly diversification requirements including the requirement that at least 50 percent of the assets be in
cash, cash equivalents or other securities with each single issuer of other securities not greater than 5 percent of total
assets. No more than 25 percent of total assets can be invested in any one issuer other than government securities or other
RIC’s. The fund must also distribute at least 90 percent of its investment company income. RIC’s are also
subject to excise tax rules which require RIC’s to distribute approximately 98 percent of net income and net capital
gains to avoid a 4 percent excise tax.
The fund has adopted a
distribution policy which is included on the inside front cover of this report. To summarize, the fund has adopted a managed
distribution policy (“MDP”). Annual distribution amounts are expected to fall in the range of 7% to 10% of the
average week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. Distribution amounts
will be reset both up and down to provide a consistent return on trailing NAV. Under the MDP, distribution amounts will normally be
reset in February and August, with no changes in distribution amounts in May and November. The fund may designate a portion of
its distributions as capital gains and may also distribute additional capital gains in the last quarter of the year to meet annual
excise distribution requirements. Distribution amounts are subject to change from time to time at the discretion of the Board.
Leverage
The fund’s leverage utilization decreased
$0.6 million during the six months ended May 31, 2023 as compared to the six months ended November 30, 2022, and represented 21.3% of
total assets at May 31, 2023. During the period, the fund maintained compliance with its applicable coverage ratios. At May 31, 2023,
94.9% of the leverage cost was fixed, the weighted-average maturity was 0.7 years and the weighted-average annual rate on leverage
was 3.49%. These rates will vary in the future as a result of changing floating rates.
Please see the Financial Statements and Notes to
Financial Statements for additional detail regarding critical accounting policies, results of operations, leverage and other important
fund information.
For further information regarding the calculation
of distributable cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit
www.tortoiseecofin.com.
(unaudited)
|
|
2023 Semi-Annual Report | May 31, 2023 |
|
TPZ Key Financial Data (supplemental unaudited information)
(dollar amounts in thousands unless otherwise indicated) |
|
The information
presented below is supplemental non-GAAP financial information, is not inclusive of required financial disclosures (e.g. Total Expense
Ratio), and should be read in conjunction with the full financial statements.
| |
2022 | | |
2023 | |
| |
Q1(1) | | |
Q2(1) | | |
Q3(1) | | |
Q4(1) | | |
Q1(1) | | |
Q2(1) | |
Selected Financial Information | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Distributions
paid on common stock | |
$ | 1,468 | | |
$ | 2,056 | | |
$ | 2,056 | | |
$ | 2,021 | | |
$ | 1,953 | | |
$ | 1,953 | |
Distributions
paid on common stock per share | |
| 0.2250 | | |
| 0.3150 | | |
| 0.3150 | | |
| 0.3150 | | |
| 0.3150 | | |
| 0.3150 | |
Total assets, end of
period | |
| 128,994 | | |
| 132,902 | | |
| 128,405 | | |
| 124,715 | | |
| 120,791 | | |
| 118,705 | |
Average
total assets during period(2) | |
| 126,282 | | |
| 131,028 | | |
| 127,458 | | |
| 125,149 | | |
| 122,422 | | |
| 120,322 | |
Leverage(3) | |
| 24,000 | | |
| 25,600 | | |
| 25,800 | | |
| 25,900 | | |
| 24,900 | | |
| 25,300 | |
Leverage
as a percent of total assets | |
| 18.6 | % | |
| 19.3 | % | |
| 20.1 | % | |
| 20.8 | % | |
| 20.6 | % | |
| 21.3 | % |
Operating
expenses before leverage costs as a percent of total assets | |
| 1.30 | % | |
| 1.19 | % | |
| 1.37 | % | |
| 1.65 | % | |
| 1.42 | % | |
| 1.42 | % |
Net
unrealized appreciation, end of period | |
| 10,439 | | |
| 14,292 | | |
| 11,392 | | |
| 12,878 | | |
| 10,915 | | |
| 9,116 | |
Net assets, end of
period | |
| 104,493 | | |
| 106,782 | | |
| 102,077 | | |
| 98,245 | | |
| 95,368 | | |
| 92,800 | |
Average
net assets during period(4) | |
| 101,888 | | |
| 105,651 | | |
| 99,912 | | |
| 98,208 | | |
| 96,730 | | |
| 94,512 | |
Net asset value per
common share | |
| 16.01 | | |
| 16.36 | | |
| 15.64 | | |
| 15.85 | | |
| 15.38 | | |
| 14.97 | |
Market value per common
share | |
| 14.08 | | |
| 14.15 | | |
| 13.66 | | |
| 13.63 | | |
| 13.00 | | |
| 12.47 | |
Shares outstanding
(000’s) | |
| 6,526 | | |
| 6,526 | | |
| 6,526 | | |
| 6,200 | | |
| 6,200 | | |
| 6,200 | |
| (1) | Q1 is the period from December through February. Q2 is the period from March through May.
Q3 is the period from June through August. Q4 is the period from September through November. |
| (2) | Computed by averaging month-end values within each period. |
| (3) | Leverage consists of outstanding borrowings under the revolving credit facility. |
| (4) | Computed by averaging daily net assets within each period. |
|
|
Ecofin
Sustainable and Social Impact Term Fund (TEAF) |
|
Fund description
TEAF seeks to provide a high level of total return with
an emphasis on current distributions. TEAF provides investors access to a combination of public and direct investments in essential assets
that are making an impact on clients and communities.
Fund Performance
TEAF NAV return was -0.9% in the first fiscal half
of 2023, the period ranging from November 30, 2022 through May 31, 2023. The primary negative drivers for the period were TEAF’s
energy infrastructure investments including both listed and private investments. The fund saw positive performance from its
social infrastructure and private sustainable investments, while its public sustainable infrastructure company investments were flat
for the period.
Despite underperformance relative to equity markets,
we continue to be pleased by the performance of private social and sustainable infrastructure investments that take advantage of structured
offerings with positive risk and reward. These investments continue to provide uncorrelated returns and income generation in a time of
macroeconomic uncertainty. Overall, TEAF’s private assets continued to perform in-line with our expectations generating stable current
income for investors.
We continue to progress on transitioning the portfolio
to the targeted allocation of 60% direct investments. As of May 31, 2023, TEAF’s total direct investment commitments were approximately
$124 million or approximately 52% of the portfolio.
Market Overview
In early 2023, with China’s anticipated post-COVID
reopening and still high inflation, expectations re-emerged for central bank rate hikes. Concurrently, due to an unusually warm winter,
energy prices continued a steep decline with U.S. natural gas prices returning to 2021 levels. European gas prices also fell significantly
from 2022 averages (due to weather and conservation), although remained much higher than prior year levels. This provided an improved backdrop
for economies and corporate profitability, particularly in Europe where 2022’s energy crisis presented the biggest threat and resulted
in another ‘risk-on’ growth-oriented rally for equities, which notably excluded utilities, except in the UK. As mentioned
above, TEAF’s private investments (social and sustainable infrastructure) performed in-line with our expectations during the period.
Despite macroeconomic
uncertainty, we hold a positive outlook for the underlying assets in the TEAF portfolio entering the second half of 2023. We believe
TEAF’s current portfolio is largely invested in sectors that will provide stability during the current equity market
volatility. We also believe the listed sustainable equities are positioned to benefit from favorable policy supports for
decarbonization and electrification, relative cost positions and competitiveness of renewables, and ever-rising demand for energy
price stability and decarbonization. Our focus on essential assets and asset-backed services should continue to do relatively well
in many market environments. Additionally, for the next two years, generators are broadly hedged so sensitivity to power prices will
be limited in most cases. Lower natural gas prices translate into lower customer bills, which calms discussions with
stakeholders (and lessens the risk of clawback from power producers by governments seeking to immunize customer bills), which
is a positive. Our focus on quality of earnings and balance sheet strength is not new but maybe worth reiterating.
Listed
Energy Infrastructure
| ● | Steady operational performance from companies that operate essential energy infrastructure assets resulted in increased dividends
and stock buybacks. |
| ● | Global demand for energy from reliable supply sources is growing. The U.S. has established itself as a reliable supplier of low-cost
energy. As a result, many of our investments are setting records related to the amount of energy exports. We expect demand for U.S.
energy to continue to increase so U.S. energy infrastructure (pipelines and liquefied natural gas (LNG) export facilities) will be critical
in supplying the rest of the world with low-cost U.S. energy. |
| ● | As a reminder, TEAF’s listed energy infrastructure allocation is levered to U.S. natural gas pipeline and LNG export
facility operators. We expect the valuation of these companies to be rewarded by the equity markets as these companies operate
essential assets and generate significant free cash flow that is being returned to shareholders in the form of higher dividends and
stock buybacks. |
Listed
Sustainable Infrastructure
| ● | From a macro perspective the period was generally characterized by influences stemming from
stubborn inflation, elevated interest rates, and declining energy prices, in particular natural gas. |
| ● | Generally during the period, we saw a mean-reversion with last year’s underperformers
rallying. Similarly, pan-European utility and other infrastructure stocks provided positive returns whereas US utilities
declined, lagging significantly. In such a context TEAF’s sustainable listed sleeve responded similarly with the
period’s top contributors largely comprised of European names, while the periods bottom contributors generally were North
American domiciled names. |
| ● | Electric utilities were the best performing sub-sector while renewable electricity names
were the worst performing sector, primarily due to the rising need for capital to fund the strong demand growth, at the time the cost
of capital has risen substantially. |
| ● | Amidst these varying macro impulses, overall, TEAF’s sustainable listed sleeve did
reasonably for the period; outperforming energy infrastructure. |
(unaudited)
|
|
2023 Semi-Annual Report | May 31, 2023 |
|
Ecofin
Sustainable and Social Impact Term Fund (TEAF) (continued) |
|
Social
Infrastructure
| ● | TEAF completed eight direct investments in the social infrastructure portfolio during the period. |
| ● | In December, the team completed a debt investment in a to-be-constructed senior living community located in Albuquerque, New Mexico,
an area that has a demonstrated need for additional senior housing with existing occupancy levels exceeding 90%. The facility will
offer 142 market rate units consisting of 45 independent living units, 75 assisted living units, and 22 memory care units. Four of
the memory care units will be shared, thus there will be 148 beds in the facility. Construction is scheduled to begin in January 2023
and be completed in the Fall of 2024. |
| ● | The team completed another debt investment in December, this one for a waste-to-energy project located in Bethel, PA that will
gasify wastewater biosolids and poultry waste, while using energy produced through the gasification process to help circularly power
the facility. These waste products would have otherwise been dumped in landfills or land applied, both of which are known to have
negative effects on the environment due to the generation of methane gas as well as the leeching of other contaminants into
surrounding areas and farm fields. The project will also produce biochar, which can be sold for various uses—including
environmental remediation. |
| ● | In January, the team completed a debt investment in an existing classical charter school in Toledo, Ohio that currently has students
in grades K-11. This expansion will allow the charter school to grow from its current capacity of 500 students to 750, and to expand its
program offerings, including adding 12th grade. |
| ● | In February, the team completed a debt investment in an existing private school located near Fort Lauderdale, Florida that allowed
the school to execute on a succession plan to continue its operations under new management while expanding its capacity. The school currently
serves 526 students in grades PK-12, with over 90% of its students using State scholarships for underserved and marginalized students
to attend the school at minimal cost. With the investment, the school expects to serve up to 750 students within a few years. |
| ● | In March, the team completed a debt investment in an existing charter school in Maryland (Washington, DC area) that offers an International
Baccalaureate program to an economically disadvantaged population in grades K-8. The school currently serves 348 students, but with this
investment providing funds for a new facility, the school expects to be able to educate up to 600 students within 3 years. |
| ● | The team completed another debt investment in March, this one for a waste-to-energy project located in North Carolina that uses anaerobic
digestion to convert animal byproducts and food waste into renewable natural gas. The State of North Carolina has mandated that a
portion of all energy in the State come from swine and poultry processing waste to help reduce soil and water contamination. The company
has a contract with the regional utility to sell all of the gas that is produced. |
| ● | In April, the team completed a debt investment in a new charter school near Spartanburg, SC. The school will open with temporary modulars
on the site next door in the fall of 2023, serving 600 children in grades K-6. The school will move next door to its permanent facility
in the following school year serving the same grades, eventually expanding to its full capacity of 900 students in grades K-8 by the 2026-2027
school year. There are no other charter schools within five miles of the school’s site, and the district schools are at or
near capacity in this growing area. This will be the third school in South Carolina for this successful operator and developer partnering
together. |
| ● | The final debt investment of this period also occurred in April to an existing charter school in Belton, SC that has been operating
since 2018 in a temporary location while it seeks its permanent home. The school offers a classical education curriculum to an underserved
population, with great success--as it was recognized as the top academic Title 1 school in the state of South Carolina. The school currently
serves approximately 250 students in grades K-6, and will expand to serve K-8 while increasing enrollment over the next 4 years to reach
nearly 700 students enrolled. |
Finally, the fund had
two realizations to-date in 2023.
| ● | The first was in January from a school that was able to successfully refinance into a new debt transaction with a third party
under more favorable terms. The original investment was made in October 2019 to allow the school to acquire a larger
campus with significantly better amenities than its previous facility. The school was able to grow and, as a result, found less
expensive financing. The investment was eligible to be called at par starting on 10/1/22. |
| ● | The second realization was in April from a waste-to-energy project that was able to attract additional equity investment to support
and grow the project, but a condition of that equity injection was the retirement of all subordinated debt. Although this investment was
made n April 2021 and was not eligible to be called until 2026, the team negotiated a $108 price in exchange for the ability to retire
this debt. |
(unaudited)
|
|
Ecofin
Sustainable and Social Impact Term Fund (TEAF) (continued) |
|
Private Energy Infrastructure
| ● | No deals were completed in the private energy infrastructure portfolio during the period. |
Private Sustainable Infrastructure
| ● | TEAF completed one direct investment in the private sustainable infrastructure portfolio during the period. |
| ● | In April, the team completed a debt investment in One Energy, based in Findlay, Ohio who develops, builds, owns, and operates capital-intensive,
on-site power solutions for large industrial power users. This investment will enable the company to commence the land and equipment purchase
required for recently signed NetZero projects which will represent the largest industrial microgrid in the U.S. |
| ● | The team has continued to experience a delay in one solar project in the private sustainable infrastructure portfolio.
While the project is mechanically complete, it has experienced a delay in the interconnection with the local utility delaying
in-service of the asset. We continue to work diligently to resolve the issue and maintain our expectation for the project
to be online at which point all assets will be fully operational. |
| ● | Operating assets held at TEAF continue to operate as expected with stable cash flow generation profiles driven by long-term contracts
with highly rated counterparties. |
2023 mid-fiscal year summary |
|
Distributions paid per share |
$0.2700 |
Monthly distributions paid per share |
$0.0900 |
Distribution rate (as of 5/31/2023) |
8.8% |
Year-over-year distribution increase (decrease) |
0.0% |
Cumulative
distribution to stockholders since inception in July 2009 |
$4.3505 |
Market-based total return |
(7.6)% |
NAV-based total return |
(0.9)% |
Premium (discount) to NAV (as of 5/31/2023) |
(21.1)% |
Performance data quoted represent past performance;
past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment,
when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the
fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule
of Investments for portfolio weighting at the end of the fiscal quarter.
(unaudited)
|
|
2023 Semi-Annual Report | May 31, 2023 |
|
Ecofin
Sustainable and Social Impact Term Fund (TEAF) (continued) |
|
Value of $10,000 vs. Ecofin
Sustainable and Social Impact Term Fund – Market (unaudited)
Since inception on March 29, 2019 through May
31, 2023
The chart assumes an initial investment of $10,000.
Performance reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Performance
data quoted represents past performance and does not guarantee future results. Investment returns and principal value will fluctuate,
and when sold, may be worth more or less than their original cost. Performance current to the most recent month-end may be lower or higher
than the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment of capital gains and income
distributions. The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption
of Fund shares.
Annualized Rates of Return as of May 31, 2023
|
1-Year | |
3-Year | |
Since
Inception(1) | |
Ecofin Sustainable and Social Impact Term Fund – NAV |
-2.19% | |
9.83% | |
1.44% | |
Ecofin Sustainable and Social Impact Term Fund – Market |
-8.54% | |
12.41% | |
-4.17% | |
S&P Global Infrastructure Index |
-6.72% | |
9.10% | |
4.06% | |
(1) Inception date of the
Fund was March 29, 2019.
Fund structure and distribution policy
The fund is structured to qualify as a Regulated
Investment Company (RIC) allowing it to pass-through to shareholders income and capital gains earned, thus avoiding double-taxation.
To qualify as a RIC, the fund must meet specific income, diversification and distribution requirements. Regarding income, at least
90 percent of the fund gross income must be from dividends, interest and capital gains. The fund must meet quarterly diversification requirements
including the requirement that at least 50 percent of the assets be in cash, cash equivalents or other securities with each single issuer
of other securities not greater than 5 percent of total assets. No more than 25 percent of total assets can be invested in any one issuer
other than government securities or other RIC’s. The fund must also distribute at least 90 percent of its investment company
income. RIC’s are also subject to excise tax rules which require RIC’s to distribute approximately 98 percent of net
income and net capital gains to avoid a 4 percent excise tax.
The fund has adopted a managed
distribution policy (“MDP”). Annual distribution amounts are expected to fall in the range of 6% to 8% of the average
week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. Distribution amounts will be
reset both up and down to provide a consistent return on trailing NAV. Under the MDP, distribution amounts will normally be reset in
February and August, with no changes in distribution amounts in May and November.
Leverage
The fund’s leverage utilization remained flat
during the six months ended May 31, 2023, as compared to six months ended November 30, 2022. The fund utilizes all floating rate
leverage that had an interest rate of 6.16% and represented 12.3% of total assets at as of May 31, 2023. During the period, the fund
maintained compliance with its applicable coverage ratios. The interest rate on the fund’s leverage will vary in the future along
with changing floating rates.
Please see the Financial Statements and Notes to
Financial Statements for additional detail regarding critical accounting policies, results of operations, leverage and other important
fund information.
For further information regarding the calculation
of distributable cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit
www.tortoiseecofin.com.
(unaudited)
|
|
TEAF Key Financial Data (supplemental unaudited information)
(dollar amounts in thousands unless otherwise indicated) |
|
The
information presented below is supplemental non-GAAP financial information, is not inclusive of required financial disclosures (e.g.
Total Expense Ratio), and should be read in conjunction with the full financial statements.
| |
2022 | | |
2023 | |
| |
Q1(1) | | |
Q2(1) | | |
Q3(1) | | |
Q4(1) | | |
Q1(1) | | |
Q2(1) | |
Selected Financial Information | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Distributions paid on common stock | |
$ | 3,238 | | |
$ | 3,642 | | |
$ | 3,643 | | |
$ | 3,643 | | |
$ | 3,642 | | |
$ | 3,643 | |
Distributions paid on common stock per share | |
| 0.2400 | | |
| 0.2700 | | |
| 0.2700 | | |
| 0.2700 | | |
| 0.2700 | | |
| 0.2700 | |
Total assets, end of period | |
| 255,662 | | |
| 264,262 | | |
| 254,726 | | |
| 251,239 | | |
| 246,004 | | |
| 240,640 | |
Average total assets during period(2) | |
| 257,415 | | |
| 260,960 | | |
| 256,749 | | |
| 246,494 | | |
| 248,950 | | |
| 246,215 | |
Leverage(3) | |
| 22,900 | | |
| 30,400 | | |
| 28,800 | | |
| 29,500 | | |
| 30,800 | | |
| 29,500 | |
Leverage as a percent of total assets | |
| 9.0 | % | |
| 11.5 | % | |
| 11.3 | % | |
| 11.7 | % | |
| 12.5 | % | |
| 12.3 | % |
Operating expenses before leverage costs as a percent of total assets | |
| 2.01 | % | |
| 1.25 | % | |
| 1.56 | % | |
| 1.85 | % | |
| 1.58 | % | |
| 1.63 | % |
Net unrealized appreciation (depreciation), end of period | |
| 11,274 | | |
| 8,712 | | |
| 993 | | |
| 824 | | |
| (912 | ) | |
| (1,269 | ) |
Net assets, end of period | |
| 231,553 | | |
| 232,699 | | |
| 225,064 | | |
| 220,798 | | |
| 214,163 | | |
| 210,062 | |
Average net assets during period(4) | |
| 230,747 | | |
| 233,287 | | |
| 225,251 | | |
| 214,321 | | |
| 218,352 | | |
| 214,413 | |
Net asset value per common share | |
| 17.16 | | |
| 17.25 | | |
| 16.68 | | |
| 16.38 | | |
| 15.87 | | |
| 15.57 | |
Market value per common share | |
| 15.00 | | |
| 14.55 | | |
| 14.74 | | |
| 13.85 | | |
| 12.97 | | |
| 12.28 | |
Shares outstanding (000’s) | |
| 13,491 | | |
| 13,491 | | |
| 13,491 | | |
| 13,491 | | |
| 13,491 | | |
| 13,491 | |
| (1) | Q1 represents the period from December through February. Q2 represents the period from March through May. Q3 represents the period
from June through August. Q4 represents the period from September through November. |
| (2) | Computed by averaging month-end values within each period. |
| (3) | Leverage consists of outstanding borrowings under the margin loan facility. |
| (4) | Computed by averaging daily net assets within each period. |
|
|
2023 Semi-Annual Report | May 31, 2023 |
|
TYG Consolidated Schedule of Investments (unaudited)
May 31, 2023 |
| |
Shares | | |
Fair
Value | |
| |
| | |
| |
Common Stock — 101.3%(1) | |
| | | |
| | |
United States Crude Oil Pipelines — 2.1%(1) | |
| | | |
| | |
Plains GP Holdings LP | |
| 581,526 | | |
$ | 7,908,754 | |
| |
| | | |
| | |
United States Natural Gas Gathering/Processing — 3.7%(1) | |
| | | |
| | |
EnLink Midstream LLC | |
| 403,520 | | |
| 3,938,355 | |
Hess Midstream Partners LP | |
| 291,849 | | |
| 8,139,669 | |
Kinetik Holdings, Inc. | |
| 54,924 | | |
| 1,786,678 | |
| |
| | | |
| 13,864,702 | |
| |
| | | |
| | |
United States Natural Gas/Natural Gas Liquids Pipelines — 43.7%(1) | |
| | | |
| | |
Cheniere Energy, Inc. | |
| 142,849 | | |
| 19,966,005 | |
Excelerate Energy, Inc. | |
| 57,737 | | |
| 1,071,599 | |
Kinder Morgan, Inc. | |
| 1,443,949 | | |
| 23,262,018 | |
New Fortress Energy, Inc. | |
| 176,000 | | |
| 4,623,520 | |
NextDecade Corp.(2) | |
| 485,271 | | |
| 2,693,254 | |
ONEOK, Inc. | |
| 405,263 | | |
| 22,962,201 | |
Targa Resources Corp. | |
| 597,815 | | |
| 40,681,311 | |
The Williams Companies, Inc. | |
| 1,773,712 | | |
| 50,834,586 | |
| |
| | | |
| 166,094,494 | |
| |
| | | |
| | |
United States Renewables and Power Infrastructure — 51.8%(1) | |
| | | |
| | |
AES Corp. | |
| 707,555 | | |
| 13,967,136 | |
Ameren Corp. | |
| 188,059 | | |
| 15,245,943 | |
American Electric Power Co., Inc. | |
| 222,506 | | |
| 18,494,699 | |
Atlantica Sustainable Infrastructure Plc | |
| 473,463 | | |
| 11,443,601 | |
Clearway Energy, Inc. | |
| 774,641 | | |
| 22,255,436 | |
Constellation Energy Corp. | |
| 69,230 | | |
| 5,816,704 | |
DTE Energy Co. | |
| 209,387 | | |
| 22,530,041 | |
NextEra Energy, Inc. | |
| 240,583 | | |
| 17,673,227 | |
NextEra Energy Partners LP | |
| 355,048 | | |
| 21,274,476 | |
Sempra Energy | |
| 208,336 | | |
| 29,902,466 | |
Xcel Energy, Inc. | |
| 284,655 | | |
| 18,585,125 | |
| |
| | | |
| 197,188,854 | |
| |
| | | |
| | |
Total Common Stock | |
| | | |
| | |
(Cost $442,145,859) | |
| | | |
| 385,056,804 | |
| |
| | | |
| | |
Master Limited Partnerships — 24.8%(1) | |
| | | |
| | |
United States Natural Gas Gathering/Processing — 3.9%(1) | |
| | | |
| | |
Western Midstream Partners LP | |
| 583,326 | | |
| 14,723,148 | |
| |
| | | |
| | |
United States Natural Gas/Natural Gas Liquids Pipelines — 12.7%(1) | |
| | | |
| | |
Energy Transfer LP | |
| 1,984,281 | | |
| 24,605,084 | |
Enterprise Products Partners LP | |
| 937,827 | | |
| 23,755,158 | |
| |
| | | |
| 48,360,242 | |
| |
| | | |
| | |
United States Refined Product Pipelines — 8.2%(1) | |
| | | |
| | |
Magellan Midstream Partners LP | |
| 154,476 | | |
| 9,301,000 | |
MPLX LP | |
| 662,040 | | |
| 22,072,414 | |
| |
| | | |
| 31,373,414 | |
| |
| | | |
| | |
Total Master Limited
Partnerships | |
| | | |
| | |
(Cost $66,573,101) | |
| | | |
| 94,456,804 | |
| |
| | | |
| | |
Private Investment — 3.9%(1) | |
| | | |
| | |
United States Renewables — 3.9%(1) | |
| | | |
| | |
TK
NYS Solar Holdco LLC(3)(4)(5) | |
| | | |
| | |
(Cost $50,141,470) | |
| N/A | | |
| 14,712,980 | |
| |
| | | |
| | |
Preferred Stock — 2.0%(1) | |
| | | |
| | |
United States Natural Gas Gathering/Processing — 1.1%(1) | |
| | | |
| | |
EnLink Midstream Partners | |
| 51,000 | | |
| 4,216,935 | |
| |
| | | |
| | |
United States Renewable Infrastructure — 0.9%(1) | |
| | | |
| | |
NextEra Energy, Inc. | |
| 72,016 | | |
| 3,506,459 | |
(Cost $8,599,978) | |
| | | |
| 7,723,394 | |
| |
| | | |
| | |
Money Market Fund — 0.1%(1) | |
| | | |
| | |
United States Investment Company — 0.1%(1) | |
| | | |
| | |
Invesco Government & Agency Portfolio —
Institutional Class, 5.044%(6) | |
| | | |
| | |
(Cost
$271,050) | |
| 271,050 | | |
| 271,050 | |
| |
| | | |
| | |
Total Investments — 132.1%(1) | |
| | | |
| | |
(Cost $567,731,458) | |
| | | |
| 502,221,032 | |
Liabilities in Excess of Other Assets — (1.9)%(1) | |
| | | |
| (7,185,881 | ) |
Line of Credit — (1.9)%(1) | |
| | | |
| (7,100,000 | ) |
Senior Notes — (19.0)%(1) | |
| | | |
| (71,952,000 | ) |
Mandatory
Redeemable Preferred Stock at Liquidation Value — (9.3)%(1) | |
| | | |
| (35,660,610 | ) |
Total
Net Assets Applicable to Common Stockholders — 100.0%(1) | |
| | | |
$ | 380,322,541 | |
| (1) | Calculated as a percentage of net assets applicable to common stockholders. |
| (2) | Non-income producing security. |
| (3) | Restricted securities have a total fair value of $14,712,980 which represents 3.9% of net assets. See Note 6 to the financial statements
for further disclosure. |
| (4) | Securities have been valued by using significant unobservable inputs in accordance with fair value procedures and are categorized
as level 3 investments. |
| (5) | Deemed to be an affiliate of the fund. See Note 7 to the financial statements for further disclosure. |
| (6) | Rate indicated is the current yield as of May 31, 2023. |
See accompanying Notes to Financial Statements.
|
|
NTG Schedule of Investments (unaudited)
May 31, 2023 |
| |
Shares | | |
Fair
Value | |
| |
| | |
| |
Common
Stock — 103.3%(1) | |
| | | |
| | |
Canada Crude Oil Pipelines — 11.9%(1) | |
| | | |
| | |
Enbridge, Inc. | |
| 331,589 | | |
$ | 11,671,933 | |
Pembina Pipeline Corp. | |
| 402,120 | | |
| 12,172,172 | |
| |
| | | |
| 23,844,105 | |
| |
| | | |
| | |
Canada Natural Gas/Natural Gas Liquids Pipelines — 2.5%(1) | |
| | | |
| | |
TC Energy Corp. | |
| 128,700 | | |
| 5,011,578 | |
| |
| | | |
| | |
United States Crude Oil Pipelines — 8.9%(1) | |
| | | |
| | |
Plains GP Holdings LP | |
| 1,315,066 | | |
| 17,884,898 | |
| |
| | | |
| | |
United States Natural Gas Gathering/Processing — 6.1%(1) | |
| | | |
| | |
EnLink Midstream LLC | |
| 579,030 | | |
| 5,651,333 | |
Hess Midstream Partners LP | |
| 204,144 | | |
| 5,693,576 | |
Kinetik Holdings, Inc. | |
| 27,692 | | |
| 900,821 | |
| |
| | | |
| 12,245,730 | |
| |
| | | |
| | |
United States Natural Gas/Natural Gas Liquids Pipelines — 61.6%(1) | |
| | | |
| | |
Cheniere Energy, Inc. | |
| 85,147 | | |
| 11,900,996 | |
DT Midstream, Inc. | |
| 250,211 | | |
| 11,374,592 | |
Excelerate Energy, Inc. | |
| 70,562 | | |
| 1,309,631 | |
Kinder Morgan, Inc. | |
| 1,550,051 | | |
| 24,971,321 | |
New Fortress Energy, Inc. | |
| 109,719 | | |
| 2,882,318 | |
NextDecade Corp.(2) | |
| 245,685 | | |
| 1,363,552 | |
ONEOK, Inc. | |
| 225,624 | | |
| 12,783,856 | |
Targa Resources Corp. | |
| 411,380 | | |
| 27,994,409 | |
The Williams Companies, Inc. | |
| 998,338 | | |
| 28,612,367 | |
| |
| | | |
| 123,193,042 | |
| |
| | | |
| | |
United States Renewables and Power Infrastructure — 12.3%(1) | |
| | | |
| | |
Atlantica Sustainable Infrastructure Plc | |
| 222,743 | | |
| 5,383,698 | |
Clearway Energy, Inc. | |
| 327,370 | | |
| 9,405,340 | |
NextEra Energy Partners LP | |
| 163,701 | | |
| 9,808,964 | |
| |
| | | |
| 24,598,002 | |
| |
| | | |
| | |
Total Common Stock | |
| | | |
| | |
(Cost $231,367,474) | |
| | | |
| 206,777,355 | |
| |
| | |
| |
Master Limited Partnerships — 24.4%(1) | |
| | | |
| | |
United States Natural Gas Gathering/Processing — 5.1%(1) | |
| | | |
| | |
Crestwood Equity Partners LP | |
| 103,306 | | |
| 2,650,832 | |
Western Midstream Partners LP | |
| 298,724 | | |
| 7,539,794 | |
| |
| | | |
| 10,190,626 | |
| |
| | | |
| | |
United States Natural Gas/Natural Gas Liquids Pipelines — 12.8%(1) | |
| | | |
| | |
Energy Transfer LP | |
| 1,019,748 | | |
| 12,644,875 | |
Enterprise Products Partners LP | |
| 514,325 | | |
| 13,027,852 | |
| |
| | | |
| 25,672,727 | |
| |
| | | |
| | |
United States Refined Product Pipelines — 6.5%(1) | |
| | | |
| | |
Magellan Midstream Partners LP | |
| 50,825 | | |
| 3,060,173 | |
MPLX LP | |
| 297,246 | | |
| 9,910,182 | |
| |
| | | |
| 12,970,355 | |
| |
| | | |
| | |
Total Master Limited Partnerships | |
| | | |
| | |
(Cost $35,221,269) | |
| | | |
| 48,833,708 | |
| |
| | | |
| | |
Preferred Stock — 2.4%(1) | |
| | | |
| | |
United States Natural Gas Gathering/Processing — 1.4%(1) | |
| | | |
| | |
EnLink Midstream Partners | |
| 34,000 | | |
| 2,811,290 | |
| |
| | | |
| | |
United States Renewables and Power Infrastructure — 1.0%(1) | |
| | | |
| | |
NextEra Energy, Inc. | |
| 39,095 | | |
| 1,903,536 | |
(Cost $5,300,017) | |
| | | |
| 4,714,826 | |
| |
| | | |
| | |
Money Market Fund — 0.1%(1) | |
| | | |
| | |
United States Investment Company — 0.1%(1) | |
| | | |
| | |
First American Government Obligations Fund, Class
X, 4.965%(3) | |
| | | |
| | |
(Cost
$233,888) | |
| 233,888 | | |
| 233,888 | |
| |
| | | |
| | |
Total
Investments — 130.2%(1) | |
| | | |
| | |
(Cost $272,122,648) | |
| | | |
| 260,559,777 | |
Liabilities in Excess of Other Assets — (1.8)%(1) | |
| | | |
| (3,593,791 | ) |
Credit Facility Borrowings — (4.5)%(1) | |
| | | |
| (8,900,000 | ) |
Senior Notes — (16.0)%(1) | |
| | | |
| (32,149,733 | ) |
Mandatory
Redeemable Preferred Stock at Liquidation Value — (7.9)%(1) | |
| | | |
| (15,870,450 | ) |
Total
Net Assets Applicable to Common Stockholders — 100.0%(1) | |
| | | |
$ | 200,045,803 | |
| (1) | Calculated as a percentage of net assets applicable to common stockholders. |
| (2) | Non-income producing security. |
| (3) | Rate indicated is the current yield as of May 31, 2023. |
See accompanying Notes to Financial Statements.
|
|
2023 Semi-Annual Report | May 31, 2023 |
|
TTP Schedule of Investments (unaudited)
May 31, 2023 |
| |
Shares | | |
Fair Value | |
| |
| | |
| |
Common Stock — 98.9%(1) | |
| | | |
| | |
Canada Crude Oil Pipelines — 17.6%(1) | |
| | | |
| | |
Enbridge, Inc. | |
| 187,587 | | |
$ | 6,603,062 | |
Gibson Energy, Inc. | |
| 50,815 | | |
| 820,152 | |
Pembina Pipeline Corp. | |
| 124,957 | | |
| 3,783,229 | |
| |
| | | |
| 11,206,443 | |
| |
| | | |
| | |
Canada Natural Gas/Natural Gas Liquids Pipelines — 8.6%(1) | |
| | | |
| | |
Keyera Corp. | |
| 73,152 | | |
| 1,632,785 | |
TC Energy Corp. | |
| 98,117 | | |
| 3,820,676 | |
| |
| | | |
| 5,453,461 | |
| |
| | | |
| | |
United States Crude Oil Pipelines — 11.5%(1) | |
| | | |
| | |
Plains GP Holdings LP | |
| 538,729 | | |
| 7,326,714 | |
| |
| | | |
| | |
United States Natural Gas Gathering/Processing — 10.8%(1) | |
| | | |
| | |
Antero Midstream Corp. | |
| 141,044 | | |
| 1,440,059 | |
Equitrans Midstream Corp. | |
| 307,343 | | |
| 2,621,636 | |
Hess Midstream Partners LP | |
| 91,698 | | |
| 2,557,457 | |
Kinetik Holdings, Inc. | |
| 8,934 | | |
| 290,623 | |
| |
| | | |
| 6,909,775 | |
| |
| | | |
| | |
United States Natural Gas/Natural Gas Liquids Pipelines — 43.1%(1) | |
| | | |
| | |
Cheniere Energy, Inc. | |
| 27,983 | | |
| 3,911,184 | |
DT Midstream, Inc. | |
| 13,180 | | |
| 599,163 | |
Excelerate Energy, Inc. | |
| 8,917 | | |
| 165,500 | |
Kinder Morgan, Inc. | |
| 389,508 | | |
| 6,274,974 | |
NextDecade Corp.(2) | |
| 76,197 | | |
| 422,893 | |
ONEOK, Inc. | |
| 79,099 | | |
| 4,481,749 | |
Targa Resources Corp. | |
| 56,422 | | |
| 3,839,517 | |
The Williams Companies, Inc. | |
| 271,251 | | |
| 7,774,054 | |
| |
| | | |
| 27,469,034 | |
| |
| | | |
| | |
United States Renewables and Power Infrastructure — 7.3%(1) | |
| | | |
| | |
Clearway Energy, Inc. | |
| 22,000 | | |
| 632,060 | |
NextEra Energy Partners LP | |
| 29,030 | | |
| 1,739,478 | |
Sempra Energy | |
| 16,121 | | |
| 2,313,847 | |
| |
| | | |
| 4,685,385 | |
| |
| | | |
| | |
Total Common Stock | |
| | | |
| | |
(Cost $60,791,581) | |
| | | |
| 63,050,812 | |
| |
| | |
| |
Master Limited Partnerships — 28.2%(1) | |
| | | |
| | |
United States Crude Oil Pipelines — 1.2%(1) | |
| | | |
| | |
NuStar Energy LP | |
| 48,386 | | |
| 790,143 | |
| |
| | | |
| | |
United States Natural Gas Gathering/Processing — 3.3%(1) | |
| | | |
| | |
Western Midstream Partners LP | |
| 82,032 | | |
| 2,070,488 | |
| |
| | | |
| | |
United States Natural Gas/Natural Gas Liquids Pipelines — 12.1%(1) | |
| | | |
| | |
Energy Transfer LP | |
| 317,099 | | |
| 3,932,028 | |
Enterprise Products Partners LP | |
| 148,325 | | |
| 3,757,072 | |
| |
| | | |
| 7,689,100 | |
| |
| | | |
| | |
United States Other — 0.2%(1) | |
| | | |
| | |
Westlake Chemical Partners LP | |
| 4,940 | | |
| 106,161 | |
| |
| | | |
| | |
United States Refined Product Pipelines — 11.4%(1) | |
| | | |
| | |
Magellan Midstream Partners LP | |
| 56,630 | | |
| 3,409,692 | |
MPLX LP | |
| 115,871 | | |
| 3,863,139 | |
| |
| | | |
| 7,272,831 | |
| |
| | | |
| | |
Total
Master Limited Partnerships | |
| | | |
| | |
(Cost
$10,704,500) | |
| | | |
| 17,928,723 | |
| |
| | | |
| | |
Money Market Fund — 0.5%(1) | |
| | | |
| | |
United States Investment Company — 0.5%(1) | |
| | | |
| | |
Invesco
Government & Agency Portfolio — Institutional Class, 5.044%(3) | |
| | | |
| | |
(Cost
$312,166) | |
| 312,166 | | |
| 312,166 | |
| |
| | | |
| | |
Total Investments — 127.6%(1) | |
| | | |
| | |
(Cost $71,808,247) | |
| | | |
| 81,291,701 | |
Liabilities in Excess of Other Assets — (0.2)%(1) | |
| | | |
| (118,767 | ) |
Credit Facility Borrowings — (11.6)%(1) | |
| | | |
| (7,400,000 | ) |
Senior Notes — (6.2)%(1) | |
| | | |
| (3,942,857 | ) |
Mandatory
Redeemable Preferred Stock at Liquidation Value — (9.6)%(1) | |
| | | |
| (6,100,000 | ) |
Total Net Assets Applicable to Common Stockholders — 100.0%(1) | |
| | | |
$ | 63,730,077 | |
(1) Calculated as a percentage
of net assets.
(2) Non-income producing
security.
(3) Rate indicated is the
current yield as of May 31, 2023.
See accompanying Notes to Financial Statements.
|
|
NDP Schedule of Investments (unaudited)
May 31, 2023 |
| |
Shares | | |
Fair
Value | |
| |
| | |
| |
Common Stock — 90.7%(1) | |
| | | |
| | |
Canada Crude Oil Pipelines — 1.5%(1) | |
| | | |
| | |
Enbridge,
Inc. | |
| 23,865 | | |
$ | 840,048 | |
| |
| | | |
| | |
Canada Natural Gas/Natural Gas Liquids Pipelines — 1.4%(1) | |
| | | |
| | |
TC Energy Corp. | |
| 19,745 | | |
| 768,870 | |
| |
| | | |
| | |
Canada Oil and Gas Production — 2.1%(1) | |
| | | |
| | |
Suncor Energy, Inc. | |
| 40,528 | | |
| 1,134,784 | |
| |
| | | |
| | |
United States Natural Gas Gathering/Processing — 0.3%(1) | |
| | | |
| | |
Kinetik Holdings, Inc. | |
| 5,678 | | |
| 184,705 | |
| |
| | | |
| | |
United States Natural Gas/Natural Gas Liquids Pipelines — 18.4%(1) | |
| | | |
| | |
Cheniere Energy, Inc. | |
| 37,456 | | |
| 5,235,225 | |
Excelerate Energy, Inc. | |
| 6,209 | | |
| 115,239 | |
Kinder Morgan, Inc. | |
| 56,165 | | |
| 904,818 | |
NextDecade Corp.(2) | |
| 58,114 | | |
| 322,533 | |
Targa Resources Corp. | |
| 37,880 | | |
| 2,577,734 | |
The Williams Companies, Inc. | |
| 36,175 | | |
| 1,036,776 | |
| |
| | | |
| 10,192,325 | |
| |
| | | |
| | |
United States Oil and Gas Production — 60.7%(1) | |
| | | |
| | |
Chevron Corp. | |
| 19,314 | | |
| 2,909,075 | |
ConocoPhillips | |
| 21,747 | | |
| 2,159,477 | |
Coterra Energy, Inc. | |
| 21,071 | | |
| 489,901 | |
Devon Energy Corp. | |
| 90,404 | | |
| 4,167,624 | |
Diamondback Energy, Inc. | |
| 37,179 | | |
| 4,727,310 | |
EOG Resources, Inc. | |
| 23,070 | | |
| 2,475,180 | |
EQT Corp. | |
| 117,402 | | |
| 4,082,068 | |
Exxon Mobil Corp. | |
| 30,377 | | |
| 3,103,922 | |
Marathon Oil Corp. | |
| 81,694 | | |
| 1,810,339 | |
Occidental Petroleum Corp. | |
| 43,302 | | |
| 2,496,793 | |
PDC Energy, Inc. | |
| 9,914 | | |
| 680,299 | |
Pioneer Natural Resources Co. | |
| 22,350 | | |
| 4,457,484 | |
| |
| | | |
| 33,559,472 | |
| |
| | | |
| | |
United States Other — 4.6%(1) | |
| | | |
| | |
Baker Hughes Co. | |
| 38,763 | | |
| 1,056,292 | |
Darling Ingredients, Inc.(2) | |
| 1,957 | | |
| 124,035 | |
Denbury, Inc.(2) | |
| 15,079 | | |
| 1,359,673 | |
| |
| | | |
| 2,540,000 | |
| |
| | | |
| | |
United States Renewables and Power Infrastructure — 1.7%(1) | |
| | | |
| | |
American Electric Power Co., Inc. | |
| 2,921 | | |
| 242,794 | |
Constellation Energy Corp. | |
| 8,071 | | |
| 678,125 | |
| |
| | | |
| 920,919 | |
| |
| | | |
| | |
Total Common Stock | |
| | | |
| | |
(Cost $33,265,898) | |
| | | |
| 50,141,123 | |
| |
| | |
| |
Master Limited Partnerships — 24.6%(1) | |
| | | |
| | |
United States Crude Oil Pipelines — 4.4%(1) | |
| | | |
| | |
Plains All American Pipeline LP | |
| 189,849 | | |
| 2,452,849 | |
| |
| | | |
| | |
United States Natural Gas Gathering/Processing — 3.3%(1) | |
| | | |
| | |
Western Midstream Partners LP | |
| 72,535 | | |
| 1,830,784 | |
| |
| | | |
| | |
United States Natural Gas/Natural Gas Liquids Pipelines — 12.4%(1) | |
| | | |
| | |
DCP Midstream LP | |
| 50,351 | | |
| 2,094,098 | |
Energy Transfer LP | |
| 293,256 | | |
| 3,636,374 | |
Enterprise Products Partners LP | |
| 43,433 | | |
| 1,100,158 | |
| |
| | | |
| 6,830,630 | |
| |
| | | |
| | |
United States Oil and Gas Production — 1.9%(1) | |
| | | |
| | |
TXO Partners LP | |
| 50,000 | | |
| 1,073,500 | |
| |
| | | |
| | |
United States Refined Product Pipelines — 2.6%(1) | |
| | | |
| | |
Magellan Midstream Partners LP | |
| 12,744 | | |
| 767,316 | |
MPLX LP | |
| 19,475 | | |
| 649,297 | |
| |
| | | |
| 1,416,613 | |
| |
| | | |
| | |
Total
Master Limited Partnerships | |
| | | |
| | |
(Cost
$9,908,591) | |
| | | |
| 13,604,376 | |
| |
| | | |
| | |
Money
Market Fund — 0.6%(1) | |
| | | |
| | |
United
States Investment Company — 0.6%(1) | |
| | | |
| | |
Invesco
Government & Agency Portfolio — Institutional Class, 5.044%(3) | |
| | | |
| | |
(Cost
$353,399) | |
| 353,399 | | |
| 353,399 | |
| |
| | | |
| | |
Total Investments — 115.9%(1) | |
| | | |
| | |
(Cost $43,527,888) | |
| | | |
| 64,098,898 | |
Liabilities in Excess of Other Assets — (0.0)%(1) | |
| | | |
| (11,078 | ) |
Credit Facility Borrowings — (15.9)%(1) | |
| | | |
| (8,800,000 | ) |
Total
Net Assets Applicable to Common Stockholders — 100.0%(1) | |
| | | |
$ | 55,287,820 | |
(1) Calculated as a percentage
of net assets applicable to common stockholders.
(2) Non-income producing
security.
(3) Rate indicated is the
current yield as of May 31, 2023.
See accompanying Notes to Financial Statements.
|
|
2023 Semi-Annual Report | May 31, 2023 |
|
TPZ Schedule of Investments (unaudited)
May 31, 2023 |
| |
Principal
Amount/Shares | | |
Fair
Value | |
| |
| | |
| |
Corporate
Bonds — 61.2%(1) | |
| | | |
| | |
| |
| | | |
| | |
Canada
Crude Oil Pipelines — 6.6%(1) | |
| | | |
| | |
Enbridge,
Inc.
5.500%, 07/15/2077 | |
$ | 7,042,000 | | |
$ | 6,153,595 | |
| |
| | | |
| | |
United
States Natural Gas Gathering/Processing — 21.9%(1) | |
| | | |
| | |
Antero
Midstream Partners LP
5.750%, 03/01/2027(2) | |
| 3,800,000 | | |
| 3,635,383 | |
Blue
Racer Midstream LLC
6.625%, 07/15/2026(2) | |
| 5,900,000 | | |
| 5,832,397 | |
EnLink
Midstream LLC
5.375%, 06/01/2029 | |
| 4,000,000 | | |
| 3,789,688 | |
Hess
Corp.
5.625%, 02/15/2026(2) | |
| 4,160,000 | | |
| 4,082,000 | |
The
Williams Companies, Inc.
4.550%, 06/24/2024 | |
| 3,000,000 | | |
| 2,962,834 | |
| |
| | | |
| 20,302,302 | |
| |
| | | |
| | |
United
States Natural Gas/Natural Gas Liquids Pipelines — 22.1%(1) | |
| | | |
| | |
Cheniere
Corp.
5.875%, 03/31/2025 | |
| 2,000,000 | | |
| 2,002,410 | |
Cheniere
Energy, Inc.
4.625%, 10/15/2028 | |
| 1,000,000 | | |
| 938,449 | |
DT
Midstream, Inc.
4.375%, 06/15/2031(2) | |
| 2,000,000 | | |
| 1,682,147 | |
NGPL
PipeCo LLC
3.250%, 07/15/2031(2) | |
| 1,500,000 | | |
| 1,239,515 | |
ONEOK,
Inc. | |
| | | |
| | |
7.500%,
09/01/2023 | |
| 2,000,000 | | |
| 2,000,000 | |
6.350%,
01/15/2031 | |
| 3,000,000 | | |
| 3,088,186 | |
Rockies
Express Pipeline LLC
4.950%, 07/15/2029(2) | |
| 3,000,000 | | |
| 2,685,000 | |
Tallgrass
Energy LP
5.500%, 01/15/2028(2) | |
| 3,250,000 | | |
| 2,934,327 | |
Targa
Resources Corp.
5.200%, 07/01/2027 | |
| 4,000,000 | | |
| 3,949,844 | |
| |
| | | |
| 20,519,878 | |
| |
| | | |
| | |
United
States Other — 4.8%(1) | |
| | | |
| | |
New
Fortress Energy, Inc.
6.500%, 09/30/2026(2) | |
| 5,000,000 | | |
| 4,431,292 | |
| |
| | | |
| | |
United
States Refined Product Pipelines — 1.6%(1) | |
| | | |
| | |
Buckeye
Partners LP
5.850%, 11/15/2043 | |
| 2,000,000 | | |
| 1,485,200 | |
| |
| | | |
| | |
United
States Renewables and Power Infrastructure — 4.2%(1) | |
| | | |
| | |
NextEra
Energy, Inc.
4.800%, 12/01/2077 | |
| 4,500,000 | | |
| 3,870,155 | |
| |
| | | |
| | |
Total
Corporate Bonds | |
| | | |
| | |
(Cost
$60,954,428) | |
| | | |
| 56,762,422 | |
| |
| | |
| |
Common
Stock — 34.6%(1) | |
| | | |
| | |
Canada
Crude Oil Pipelines — 2.0%(1) | |
| | | |
| | |
Enbridge,
Inc. | |
| 53,741 | | |
| 1,891,683 | |
| |
| | | |
| | |
Canada
Natural Gas/Natural Gas Liquids Pipelines — 2.0%(1) | |
| | | |
| | |
TC
Energy Corp. | |
| 48,667 | | |
| 1,895,093 | |
| |
| | | |
| | |
United
States Crude Oil Pipelines — 5.7%(1) | |
| | | |
| | |
Plains
GP Holdings LP | |
| 389,094 | | |
| 5,291,678 | |
| |
| | | |
| | |
United
States Natural Gas Gathering/Processing — 4.4%(1) | |
| | | |
| | |
EnLink
Midstream LLC | |
| 90,965 | | |
| 887,818 | |
Equitrans
Midstream Corp. | |
| 108,596 | | |
| 926,324 | |
Hess
Midstream Partners LP | |
| 66,901 | | |
| 1,865,869 | |
Kinetik
Holdings, Inc. | |
| 11,954 | | |
| 388,864 | |
| |
| | | |
| 4,068,875 | |
| |
| | | |
| | |
United
States Natural Gas/Natural Gas Liquids Pipelines — 16.6%(1) | |
| | | |
| | |
DT
Midstream, Inc. | |
| 24,885 | | |
| 1,131,272 | |
Excelerate
Energy, Inc. | |
| 11,787 | | |
| 218,767 | |
Kinder
Morgan, Inc. | |
| 190,405 | | |
| 3,067,424 | |
NextDecade
Corp.(3) | |
| 104,516 | | |
| 580,064 | |
ONEOK,
Inc. | |
| 32,054 | | |
| 1,816,180 | |
Targa
Resources Corp. | |
| 69,258 | | |
| 4,713,007 | |
The
Williams Companies, Inc. | |
| 135,347 | | |
| 3,879,045 | |
| |
| | | |
| 15,405,759 | |
| |
| | | |
| | |
United
States Refining — 0.3%(1) | |
| | | |
| | |
PBF
Energy, Inc. | |
| 8,275 | | |
| 304,603 | |
| |
| | | |
| | |
United
States Renewables and Power Infrastructure — 3.6%(1) | |
| | | |
| | |
Atlantica
Sustainable Infrastructure Plc | |
| 16,523 | | |
| 399,361 | |
NextEra
Energy Partners LP | |
| 8,013 | | |
| 480,139 | |
Sempra
Energy | |
| 16,927 | | |
| 2,429,532 | |
| |
| | | |
| 3,309,032 | |
Total
Common Stock | |
| | | |
| | |
(Cost
$28,793,015) | |
| | | |
| 32,166,723 | |
See accompanying Notes to Financial Statements.
|
|
TPZ Schedule of Investments (unaudited) (continued)
May 31, 2023 |
| |
Principal Amount/Shares | | |
Fair Value | |
| |
| | |
| |
Master Limited Partnerships — 30.3%(1) | |
| | | |
| | |
United States Crude Oil Pipelines — 1.6%(1) | |
| | | |
| | |
NuStar Energy LP | |
| 90,687 | | |
$ | 1,480,919 | |
| |
| | | |
| | |
United States Natural Gas Gathering/Processing — 3.7%(1) | |
| | | |
| | |
Western Midstream Partners LP | |
| 135,715 | | |
| 3,425,446 | |
| |
| | | |
| | |
United States Natural Gas/Natural Gas Liquids Pipelines — 12.7%(1) | |
| | | |
| | |
DCP Midstream LP | |
| 37,985 | | |
| 1,579,796 | |
Energy Transfer LP | |
| 407,632 | | |
| 5,054,637 | |
Enterprise Products Partners LP | |
| 202,757 | | |
| 5,135,835 | |
| |
| | | |
| 11,770,268 | |
| |
| | | |
| | |
United States Refined Product Pipelines — 12.3%(1) | |
| | | |
| | |
Holly Energy Partners LP | |
| 30,993 | | |
| 532,150 | |
Magellan Midstream Partners LP | |
| 73,459 | | |
| 4,422,966 | |
MPLX LP | |
| 195,684 | | |
| 6,524,105 | |
| |
| | | |
| 11,479,221 | |
| |
| | | |
| | |
Total Master Limited
Partnerships | |
| | | |
| | |
(Cost $18,225,981) | |
| | | |
| 28,155,854 | |
| |
| | |
| |
Money Market Fund — 0.4%(1) | |
| | | |
| | |
United States Investment Company — 0.4%(1) | |
| | | |
| | |
Invesco
Government & Agency Portfolio — Institutional Class, 5.044%(4) | |
| | | |
| | |
(Cost
$325,396) | |
| 325,396 | | |
| 325,396 | |
| |
| | | |
| | |
Total Investments — 126.5%(1) | |
| | | |
| | |
(Cost $108,298,820) | |
| | | |
| 117,410,395 | |
Other Assets in Excess of Liabilities — 0.8%(1) | |
| | | |
| 690,031 | |
Credit Facility Borrowings — (27.3)%(1) | |
| | | |
| (25,300,000 | ) |
Total
Net Assets Applicable to Common Stockholders — 100.0%(1) | |
| | | |
$ | 92,800,426 | |
(1) Calculated as a percentage
of net assets applicable to common stockholders.
(2) Restricted securities
have a total fair value of $26,522,061, which represents 28.6% of total net assets.
(3) Non-income producing
security.
(4) Rate indicated is the
current yield as of May 31, 2023.
See accompanying Notes to
Financial Statements.
|
|
2023 Semi-Annual Report | May 31, 2023 |
|
TEAF Consolidated Schedule of Investments (unaudited)
May 31, 2023 |
| |
Principal
Amount/Shares | | |
Fair
Value | |
| |
| | |
| |
Common
Stock — 47.4%(1) | |
| | | |
| | |
Australia
Natural Gas/Natural Gas Liquids Pipelines — 1.4%(1) | |
| | | |
| | |
APA
Group | |
| 442,606 | | |
$ | 2,890,441 | |
| |
| | | |
| | |
Australia
Other — 2.0%(1) | |
| | | |
| | |
Atlas
Arteria Ltd. | |
| 992,726 | | |
| 4,132,592 | |
| |
| | | |
| | |
Canada
Renewables — 2.9%(1) | |
| | | |
| | |
Innergex
Renewable Energy, Inc.(2) | |
| 294,405 | | |
| 3,049,233 | |
TransAlta
Renewables, Inc.(2) | |
| 330,845 | | |
| 3,073,264 | |
| |
| | | |
| 6,122,497 | |
| |
| | | |
| | |
France
Renewables — 1.3%(1) | |
| | | |
| | |
Transition
SA(3) | |
| 250,000 | | |
| 2,658,892 | |
| |
| | | |
| | |
Germany
Power — 1.4%(1) | |
| | | |
| | |
RWE
AG(2) | |
| 68,204 | | |
| 2,851,979 | |
| |
| | | |
| | |
Hong
Kong Transportation/Storage — 1.3%(1) | |
| | | |
| | |
China
Suntien Green Energy Corp. Ltd. | |
| 7,408,484 | | |
| 2,800,492 | |
| |
| | | |
| | |
Italy
Power — 5.6%(1) | |
| | | |
| | |
ENAV
SpA(2) | |
| 649,850 | | |
| 2,743,771 | |
Enel
SpA | |
| 459,980 | | |
| 2,880,222 | |
Iren
SpA | |
| 1,215,003 | | |
| 2,422,110 | |
Terna
SpA | |
| 447,937 | | |
| 3,749,965 | |
| |
| | | |
| 11,796,068 | |
| |
| | | |
| | |
Portugal
Power — 2.8%(1) | |
| | | |
| | |
EDP
— Energias de Portugal SA(2) | |
| 1,209,999 | | |
| 5,900,353 | |
| |
| | | |
| | |
Spain
Other — 1.8%(1) | |
| | | |
| | |
Ferrovial
SA(2) | |
| 121,999 | | |
| 3,775,222 | |
| |
| | | |
| | |
Spain
Power — 3.8%(1) | |
| | | |
| | |
Endesa
SA | |
| 154,955 | | |
| 3,350,728 | |
Iberdrola
SA(2) | |
| 371,053 | | |
| 4,521,457 | |
| |
| | | |
| 7,872,185 | |
| |
| | | |
| | |
United
Kingdom Power — 5.4%(1) | |
| | | |
| | |
National
Grid Plc | |
| 300,253 | | |
| 4,130,911 | |
SSE
Plc(2) | |
| 309,113 | | |
| 7,234,772 | |
| |
| | | |
| 11,365,683 | |
| |
| | | |
| | |
United
Kingdom Renewable Infrastructure — 1.3%(1) | |
| | | |
| | |
Greencoat
UK Wind Plc(2) | |
| 1,482,753 | | |
| 2,748,264 | |
| |
| | | |
| | |
United
States Natural Gas Gathering/Processing — 0.1%(1) | |
| | | |
| | |
Hess
Midstream Partners LP(2) | |
| 10,644 | | |
| 296,861 | |
| |
| | |
| |
United
States Natural Gas/Natural Gas Liquids Pipelines — 7.1%(1) | |
| | | |
| | |
Cheniere
Energy, Inc.(2) | |
| 30,700 | | |
| 4,290,939 | |
Excelerate
Energy, Inc.(2) | |
| 13,710 | | |
| 254,458 | |
NextDecade
Corp.(3) | |
| 140,518 | | |
| 779,875 | |
ONEOK,
Inc.(2) | |
| 2,469 | | |
| 139,893 | |
Targa
Resources Corp.(2) | |
| 85,858 | | |
| 5,842,637 | |
The
Williams Companies, Inc.(2) | |
| 125,859 | | |
| 3,607,119 | |
| |
| | | |
| 14,914,921 | |
| |
| | | |
| | |
United
States Power — 3.0%(1) | |
| | | |
| | |
American
Electric Power Co., Inc.(2) | |
| 53,287 | | |
| 4,429,215 | |
Atlantica
Sustainable Infrastructure Plc(2) | |
| 75,263 | | |
| 1,819,107 | |
| |
| | | |
| 6,248,322 | |
| |
| | | |
| | |
United
States Renewables — 3.7%(1) | |
| | | |
| | |
Dominion
Energy, Inc.(2) | |
| 48,224 | | |
| 2,424,703 | |
NextEra
Energy, Inc.(2) | |
| 45,491 | | |
| 3,341,769 | |
NextEra
Energy Partners LP(2) | |
| 33,729 | | |
| 2,021,042 | |
| |
| | | |
| 7,787,514 | |
| |
| | | |
| | |
United
States Solar — 0.4%(1) | |
| | | |
| | |
Sunnova
Energy International, Inc.(2)(3) | |
| 41,383 | | |
| 730,824 | |
| |
| | | |
| | |
United
States Utilities — 3.1%(1) | |
| | | |
| | |
Ameren
Corp.(2) | |
| 20,040 | | |
| 1,624,643 | |
Essential
Utilities, Inc.(2) | |
| 58,349 | | |
| 2,377,138 | |
Public
Service Enterprise Group, Inc.(2) | |
| 43,420 | | |
| 2,594,345 | |
| |
| | | |
| 6,596,126 | |
| |
| | | |
| | |
Total
Common Stock | |
| | | |
| | |
(Cost
$105,709,588) | |
| | | |
| 101,489,236 | |
| |
| | | |
| | |
Private
Investments — 26.2%(1) | |
| | | |
| | |
United
States Natural Gas/Natural Gas Liquids Pipelines — 1.4%(1) | |
| | | |
| | |
Mexico
Pacific Limited LLC(MLP) | |
| | | |
| | |
Series
A(4)(5) | |
| 135,180 | | |
| 2,966,390 | |
| |
| | | |
| | |
United
States Power — 4.4%(1) | |
| | | |
| | |
One
Energy(4)(5) | |
| 20,115 | | |
| 9,301,176 | |
| |
| | | |
| | |
United
States Renewables — 20.4%(1) | |
| | | |
| | |
Renewable
Holdco, LLC(4)(5)(6) | |
| N/A | | |
| 6,743,798 | |
Renewable
Holdco I, LLC(4)(5)(6) | |
| N/A | | |
| 23,098,768 | |
Renewable
Holdco II, LLC(4)(5)(6) | |
| N/A | | |
| 12,978,899 | |
| |
| | | |
| 42,821,465 | |
Total
Private Investments | |
| | | |
| | |
(Cost
$52,398,305) | |
| | | |
| 55,089,031 | |
See accompanying Notes to Financial Statements.
|
|
TEAF Consolidated Schedule of Investments (unaudited) (continued)
May 31, 2023 |
| |
Principal Amount/Shares | | |
Fair Value | |
| |
| | |
| |
Corporate Bonds — 16.3%(1) | |
| | | |
| | |
United States Healthcare — 1.7%(1) | |
| | | |
| | |
315/333 West Dawson Associates SUB 144A NT
11.000%, 01/31/2026(5) | |
$ | 3,770,000 | | |
$ | 3,549,892 | |
| |
| | | |
| | |
United States Project Finance — 5.9%(1) | |
| | | |
| | |
C2NC Holdings
14.500%, 05/01/2027 | |
| 2,125,000 | | |
| 2,132,922 | |
C2NC Holdings
13.000%, 05/01/2027 | |
| 10,715,000 | | |
| 10,320,260 | |
| |
| | | |
| 12,453,182 | |
| |
| | | |
| | |
United States Senior Living — 8.7%(1) | |
| | | |
| | |
Ativo Albuquerque LLC
12.000%, 01/01/2028(4)(5) | |
| 2,032,000 | | |
| 2,032,000 | |
Contour Propco 1735 S MISSION SUB 144A NT
0.000%, 10/01/2025(8) | |
| 5,715,000 | | |
| 5,370,031 | |
Dove Mountain Residences LLC
11.000%, 02/01/2026(5) | |
| 1,050,000 | | |
| 1,020,351 | |
Dove Mountain Residences LLC
16.000%, 02/01/2026(5) | |
| 957,174 | | |
| 931,378 | |
Drumlin Reserve Property LLC
10.000%, 10/02/2025(5) | |
| 1,705,311 | | |
| 1,666,761 | |
Drumlin Reserve Property LLC
16.000%, 10/02/2025(5) | |
| 1,412,880 | | |
| 1,388,676 | |
JW Living Smithville Urban Ren Sub Global 144A 27
11.750%, 06/01/2027(5) | |
| 3,890,000 | | |
| 3,638,792 | |
Realco Perry Hall MD LLC/OPCO Sub 144A NT
10.000%, 10/01/2024(5) | |
| 2,227,000 | | |
| 2,133,497 | |
| |
| | | |
| 18,181,486 | |
| |
| | | |
| | |
Total
Corporate Bonds | |
| | | |
| | |
(Cost
$35,487,124) | |
| | | |
| 34,184,560 | |
| |
| | | |
| | |
Master Limited Partnerships — 7.3%(1) | |
| | | |
| | |
United States Natural Gas Gathering/Processing — 0.1%(1) | |
| | | |
| | |
Western Midstream Partners LP(2) | |
| 6,879 | | |
| 173,626 | |
| |
| | | |
| | |
United States Natural Gas/Natural Gas Liquids Pipelines — 4.1%(1) | |
| | | |
| | |
Energy Transfer LP(2) | |
| 424,800 | | |
| 5,267,520 | |
Enterprise Products Partners LP(2) | |
| 128,400 | | |
| 3,252,372 | |
| |
| | | |
| 8,519,892 | |
| |
| | | |
| | |
United States Refined Product Pipelines — 3.0%(1) | |
| | | |
| | |
MPLX LP(2) | |
| 191,653 | | |
| 6,389,711 | |
| |
| | | |
| | |
United States Renewables — 0.1%(1) | |
| | | |
| | |
Enviva Partners LP(3) | |
| 33,450 | | |
| 293,691 | |
| |
| | | |
| | |
Total
Master Limited Partnerships | |
| | | |
| | |
(Cost
$12,879,247) | |
| | | |
| 15,376,920 | |
| |
| | |
| |
Municipal Bonds — 6.4%(1) | |
| | | |
| | |
Arizona — 0.1%(1) | |
| | | |
| | |
Maricopa County Industrial Development Authority
11.000%, 07/01/2033 | |
| 138,000 | | |
| 135,167 | |
| |
| | | |
| | |
Florida — 0.4%(1) | |
| | | |
| | |
Florida Development Finance Corp.
5.720%, 07/01/2025(7) | |
| 445,000 | | |
| 422,750 | |
Florida Development Finance Corp.
11.000%, 08/01/2032 | |
| 320,000 | | |
| 313,107 | |
| |
| | | |
| 735,857 | |
| |
| | | |
| | |
Pennsylvania — 0.2%(1) | |
| | | |
| | |
Pennsylvania Economic Development Financing Authority
14.000%, 12/01/2027 | |
| 405,000 | | |
| 406,474 | |
| |
| | | |
| | |
South Carolina — 0.4%(1) | |
| | | |
| | |
South Carolina Jobs-Economic Development Authority
11.000%, 03/15/2030 | |
| 575,000 | | |
| 576,041 | |
South Carolina Jobs-Economic Development Authority
11.000%, 03/15/2033 | |
| 375,000 | | |
| 362,425 | |
| |
| | | |
| 938,466 | |
| |
| | | |
| | |
Wisconsin — 5.3%(1) | |
| | | |
| | |
Public Finance Authority
7.500%, 06/01/2029 | |
| 8,925,000 | | |
| 8,904,205 | |
Public Finance Authority
10.000%, 09/01/2031 | |
| 525,000 | | |
| 458,551 | |
Public Finance Authority
10.000%, 09/01/2031 | |
| 145,000 | | |
| 136,620 | |
Public Finance Authority
11.000%, 01/15/2033 | |
| 405,000 | | |
| 406,860 | |
Public Finance Authority
11.000%, 02/01/2033 | |
| 936,000 | | |
| 950,212 | |
Public Finance Authority
11.000%, 06/30/2034 | |
| 330,000 | | |
| 326,854 | |
| |
| | | |
| 11,183,302 | |
Total
Municipal Bonds | |
| | | |
| | |
(Cost $13,490,324) | |
| | | |
| 13,399,266 | |
See accompanying Notes to Financial Statements.
|
|
2023 Semi-Annual Report | May 31, 2023 |
|
TEAF Consolidated Schedule of Investments (unaudited) (continued)
May 31, 2023 |
| |
Principal Amount/Shares | | |
Fair Value | |
| |
| | |
| |
Private
Notes — 6.4%(1) | |
| | | |
| | |
Bermuda
Renewables — 1.7%(1) | |
| | | |
| | |
Saturn Solar Bermuda 1 Ltd.
10.000%, 06/30/2023(4)(5) | |
$ | 3,510,000 | | |
$ | 3,637,062 | |
| |
| | | |
| | |
United
States Water Equipment & Services — 4.7%(1) | |
| | | |
| | |
EF WWW HOLDINGS LLC 10.500%, 10/01/2023(4)(5) | |
| 9,600,000 | | |
| 9,888,000 | |
Total
Construction Notes | |
| | | |
| | |
(Cost
$13,378,904) | |
| | | |
| 13,525,062 | |
| |
| | | |
| | |
Preferred
Stock — 2.2%(1) | |
| | | |
| | |
United
States Natural Gas/Natural Gas Liquids Pipelines — 2.2%(1) | |
| | | |
| | |
Enterprise Products Partners LP 7.250%, 09/30/2025(4)(5) | |
| | | |
| | |
(Cost
$5,834,063) | |
| 5,000 | | |
| 4,697,100 | |
| |
| | | |
| | |
Bank
Loan — 0.2%(1) | |
| | | |
| | |
United
States Education — 0.2%(1) | |
| | | |
| | |
Village Charter School, Inc. 0.000%, 06/15/2023(7) | |
| | | |
| | |
(Cost
$800,000) | |
| 800,000 | | |
| 522,880 | |
| |
| | | |
| | |
Special
Purpose Acquisition Company Warrant — 0.1%(1) | |
| | | |
| | |
France
Renewables — 0.1%(1) | |
| | | |
| | |
Transition
SA Warrant | |
| | | |
| | |
(Cost
$–) | |
| 250,000 | | |
| 120,251 | |
| |
| | | |
| | |
Money
Market Fund — 0.2%(1) | |
| | | |
| | |
United
States Investment Company — 0.2%(1) | |
| | | |
| | |
First
American Government Obligations Fund — Class X, 4.965%(9) | |
| | | |
| | |
(Cost
$332,350) | |
| 332,350 | | |
| 332,350 | |
| |
| | | |
| | |
Total
Investments — 113.7%(1) | |
| | | |
| | |
(Cost
$240,309,905) | |
| | | |
| 238,736,656 | |
Assets
in Excess of Other Liabilities — 0.4%(1) | |
| | | |
| 825,453 | |
Credit
Facility Borrowings — (14.1)%(1) | |
| | | |
| (29,500,000 | ) |
Total
Net Assets Applicable to Common Stockholders — 100.0%(1) | |
| | | |
$ | 210,062,109 | |
| (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 margin borrowing facility. |
| (3) | Non-income producing security. |
| (4) | Securities have been valued by using significant unobservable inputs in accordance with fair value procedures and are categorized
as level 3 investments. |
| (5) | Restricted securities have a total fair value of $95,042,571 which represents 45.2% of net assets. See Note 6 to financial statements
for further disclosure. |
| (6) | Deemed to be an affiliate of the fund. See Note 7 to financial statements for further disclosure. |
| (7) | Security in forebearance as of May 31, 2023. |
| (8) | Security in default as of May 31, 2023. |
| (9) | Rate indicated is the current yield as of May 31, 2023. |
See accompanying Notes to
Financial Statements.
|
|
Statements of Assets & Liabilities (unaudited)
May 31, 2023 |
|
| |
Tortoise
Energy Infrastructure Corp.(1) | | |
Tortoise Midstream Energy
Fund, Inc. | |
Assets | |
| | | |
| | |
Investments
in unaffiliated securities at fair value(2) | |
$ | 487,508,052 | | |
$ | 260,559,777 | |
Investments
in affiliated securities at fair value(3) | |
| 14,712,980 | | |
| — | |
Cash at broker | |
| — | | |
| — | |
Cash | |
| — | | |
| — | |
Dividends, distributions
and interest receivable from investments | |
| 1,011,456 | | |
| 698,717 | |
Expense reimbursement
receivable | |
| — | | |
| — | |
Prepaid
expenses and other assets | |
| 833,509 | | |
| 599,354 | |
Total
assets | |
| 504,065,997 | | |
| 261,857,848 | |
Liabilities | |
| | | |
| | |
Payable to Adviser | |
| 853,907 | | |
| 439,073 | |
Payable for investments
purchased | |
| 2,988,320 | | |
| 2,049,150 | |
Accrued expenses and
other liabilities | |
| 1,989,617 | | |
| 978,173 | |
Current tax liability | |
| 3,331,773 | | |
| 1,496,455 | |
Deferred tax liability | |
| — | | |
| — | |
Credit facility borrowings | |
| 7,100,000 | | |
| 8,900,000 | |
Senior
notes, net(4) | |
| 71,886,121 | | |
| 32,102,343 | |
Mandatory
redeemable preferred stock, net(5) | |
| 35,593,718 | | |
| 15,846,851 | |
Total
liabilities | |
| 123,743,456 | | |
| 61,812,045 | |
Net
assets applicable to common stockholders | |
$ | 380,322,541 | | |
$ | 200,045,803 | |
| |
| | | |
| | |
Net Assets Applicable
to Common Stockholders Consist of: | |
| | | |
| | |
Capital stock, $0.001 par value per share | |
$ | 11,332 | | |
$ | 5,361 | |
Additional paid-in capital | |
| 594,726,224 | | |
| 665,320,571 | |
Total
distributable accumulated losses | |
| (214,415,015 | ) | |
| (465,280,129 | ) |
Net
assets applicable to common stockholders | |
$ | 380,322,541 | | |
$ | 200,045,803 | |
| |
| | | |
| | |
Capital shares: | |
| | | |
| | |
Authorized | |
| 100,000,000 | | |
| 100,000,000 | |
Outstanding | |
| 11,331,508 | | |
| 5,360,842 | |
| |
| | | |
| | |
Net
Asset Value per common share outstanding (net assets applicable to common stock, divided by common shares outstanding) | |
$ | 33.56 | | |
$ | 37.32 | |
| |
| | | |
| | |
(1) Consolidated Statement of Assets and Liabilities
(See Note 13 to the financial statements for further disclosure). | |
| | | |
| | |
(2) Investments in unaffiliated securities
at cost | |
$ | 517,589,988 | | |
$ | 272,122,648 | |
(3) Investments in affiliated securities
at cost | |
$ | 50,141,470 | | |
$ | — | |
(4) Deferred debt issuance and offering
costs | |
$ | 65,879 | | |
$ | 47,390 | |
(5) Deferred offering costs | |
$ | 66,892 | | |
$ | 23,599 | |
See accompanying
Notes to Financial Statements.
|
|
2023 Semi-Annual Report | May 31, 2023 |
Tortoise Pipeline & Energy Fund, Inc. | | |
Tortoise Energy Independence Fund, Inc. | | |
Tortoise Power and Energy Infrastructure Fund, Inc. | | |
Ecofin
Sustainable and Social Impact Term Fund(1) | |
| | |
| | |
| | |
| |
$ | 81,291,701 | | |
$ | 64,098,898 | | |
$ | 117,410,395 | | |
$ | 195,915,191 | |
| — | | |
| — | | |
| — | | |
| 42,821,465 | |
| — | | |
| — | | |
| — | | |
| 106,617 | |
| — | | |
| — | | |
| — | | |
| 40,208 | |
| 115,205 | | |
| 199,664 | | |
| 1,237,804 | | |
| 1,735,102 | |
| 133,987 | | |
| 59,587 | | |
| — | | |
| — | |
| 194,864 | | |
| 64,333 | | |
| 56,543 | | |
| 21,309 | |
| 81,735,757 | | |
| 64,422,482 | | |
| 118,704,742 | | |
| 240,639,892 | |
| | | |
| | | |
| | | |
| | |
| 157,681 | | |
| 124,072 | | |
| 190,672 | | |
| 555,739 | |
| — | | |
| — | | |
| — | | |
| — | |
| 422,620 | | |
| 210,590 | | |
| 413,644 | | |
| 450,162 | |
| — | | |
| — | | |
| — | | |
| — | |
| — | | |
| — | | |
| — | | |
| 71,882 | |
| 7,400,000 | | |
| 8,800,000 | | |
| 25,300,000 | | |
| 29,500,000 | |
| 3,934,477 | | |
| — | | |
| — | | |
| — | |
| 6,090,902 | | |
| — | | |
| — | | |
| — | |
| 18,005,680 | | |
| 9,134,662 | | |
| 25,904,316 | | |
| 30,577,783 | |
$ | 63,730,077 | | |
$ | 55,287,820 | | |
$ | 92,800,426 | | |
$ | 210,062,109 | |
| | | |
| | | |
| | | |
| | |
| | | |
| | | |
| | | |
| | |
$ | 2,116 | | |
$ | 1,754 | | |
$ | 6,200 | | |
$ | 13,491 | |
| 169,822,910 | | |
| 213,287,309 | | |
| 103,689,056 | | |
| 237,440,683 | |
| (106,094,949 | ) | |
| (158,001,243 | ) | |
| (10,894,830 | ) | |
| (27,392,065 | ) |
$ | 63,730,077 | | |
$ | 55,287,820 | | |
$ | 92,800,426 | | |
$ | 210,062,109 | |
| | | |
| | | |
| | | |
| | |
| | | |
| | | |
| | | |
| | |
| 100,000,000 | | |
| 100,000,000 | | |
| 100,000,000 | | |
| 100,000,000 | |
| 2,116,385 | | |
| 1,753,698 | | |
| 6,200,175 | | |
| 13,491,127 | |
| | | |
| | | |
| | | |
| | |
$ | 30.11 | | |
$ | 31.53 | | |
$ | 14.97 | | |
$ | 15.57 | |
| | | |
| | | |
| | | |
| | |
| | | |
| | | |
| | | |
| | |
$ | 71,808,247 | | |
$ | 43,527,888 | | |
$ | 108,298,820 | | |
$ | 198,939,800 | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 41,370,105 | |
$ | 8,380 | | |
$ | — | | |
$ | — | | |
$ | — | |
$ | 9,098 | | |
$ | — | | |
$ | — | | |
$ | — | |
See accompanying
Notes to Financial Statements.
|
|
Statements of Operations (unaudited)
Period from December 1, 2022 through May 31, 2023 |
|
| |
Tortoise
Energy Infrastructure Corp.(1) | | |
Tortoise
Midstream Energy
Fund, Inc. | |
Investment
Income | |
| | | |
| | |
Distributions
from master limited partnerships | |
$ | 4,692,958 | | |
$ | 2,314,827 | |
Dividends
and distributions from common stock | |
| 8,542,227 | | |
| 5,691,880 | |
Dividends
and distributions from preferred stock | |
| — | | |
| — | |
Dividends
and distributions from affiliated investments | |
| — | | |
| — | |
Less
return of capital on distributions(2) | |
| (4,989,010 | ) | |
| (3,816,896 | ) |
Less
foreign taxes withheld | |
| — | | |
| (130,143 | ) |
Net
dividends and distributions from investments | |
| 8,246,175 | | |
| 4,059,668 | |
Interest
income | |
| 261,997 | | |
| 176,544 | |
Other
income | |
| 3,394 | | |
| 15,013 | |
Total
Investment Income | |
| 8,511,566 | | |
| 4,251,225 | |
Operating
Expenses | |
| | | |
| | |
Advisory
fees | |
| 2,637,708 | | |
| 1,345,826 | |
Administrator
fees | |
| 119,049 | | |
| 64,069 | |
Professional
fees | |
| 288,096 | | |
| 220,646 | |
Directors
fees | |
| 32,288 | | |
| 41,672 | |
Stockholder
communication expenses | |
| 63,070 | | |
| 49,863 | |
Custodian
fees and expenses | |
| 14,878 | | |
| 7,531 | |
Fund
accounting fees | |
| 31,652 | | |
| 23,363 | |
Registration
fees | |
| 13,863 | | |
| 14,635 | |
Stock
transfer agent fees | |
| 59,640 | | |
| 59,667 | |
Other
operating expenses | |
| 79,688 | | |
| 31,388 | |
Total
Operating Expenses | |
| 3,339,932 | | |
| 1,858,660 | |
Leverage
Expenses | |
| | | |
| | |
Interest
expense | |
| 2,158,954 | | |
| 974,167 | |
Distributions
to mandatory redeemable preferred stockholders | |
| 613,017 | | |
| 280,634 | |
Amortization
of debt issuance costs | |
| 22,260 | | |
| 8,835 | |
Other
leverage expenses | |
| 102,065 | | |
| 85,006 | |
Total
Leverage Expenses | |
| 2,896,296 | | |
| 1,348,642 | |
Total
Expenses | |
| 6,236,228 | | |
| 3,207,302 | |
Less
expense reimbursement by Adviser (Note 4) | |
| — | | |
| — | |
Net
Expenses | |
| 6,236,228 | | |
| 3,207,302 | |
Net
Investment Income (Loss), before Income Taxes | |
| 2,275,338 | | |
| 1,043,923 | |
Deferred
tax benefit (expense) | |
| — | | |
| — | |
Net
Investment Income (Loss) | |
$ | 2,275,338 | | |
$ | 1,043,923 | |
| (1) | Consolidated Statement of Operations (See Note 13 to the financial statements for further disclosure). |
| (2) | Return of Capital may be in excess of current year distributions
due to prior year adjustments. See Note 2 to the financial statements for further disclosure. See
accompanying Notes to Financial Statements. |
See accompanying Notes to Financial Statements.
2023 Semi-Annual Report
| May 31, 2023
Tortoise Pipeline & Energy Fund, Inc. | | |
Tortoise Energy Independence Fund, Inc. | | |
Tortoise Power and Energy Infrastructure Fund, Inc. | | |
Ecofin
Sustainable and Social Impact Term Fund(1) | |
| | |
| | |
| | |
| |
$ | 878,640 | | |
$ | 522,297 | | |
$ | 1,232,003 | | |
$ | 804,536 | |
| 1,879,573 | | |
| 1,168,862 | | |
| 943,899 | | |
| 2,061,617 | |
| — | | |
| — | | |
| — | | |
| 181,250 | |
| — | | |
| — | | |
| — | | |
| 450,000 | |
| (1,445,037 | ) | |
| (499,176 | ) | |
| (1,522,778 | ) | |
| (1,217,856 | ) |
| (80,521 | ) | |
| (13,324 | ) | |
| (20,426 | ) | |
| (183,447 | ) |
| 1,232,655 | | |
| 1,178,659 | | |
| 632,698 | | |
| 2,096,100 | |
| 8,382 | | |
| 8,971 | | |
| 1,638,363 | | |
| 2,904,303 | |
| — | | |
| — | | |
| — | | |
| — | |
| 1,241,037 | | |
| 1,187,630 | | |
| 2,271,061 | | |
| 5,000,403 | |
| | | |
| | | |
| | | |
| | |
| 480,742 | | |
| 367,366 | | |
| 571,651 | | |
| 1,659,761 | |
| 25,154 | | |
| 22,511 | | |
| 32,607 | | |
| 54,929 | |
| 102,233 | | |
| 71,624 | | |
| 120,891 | | |
| 131,393 | |
| 31,275 | | |
| 35,284 | | |
| 48,564 | | |
| 42,856 | |
| 29,917 | | |
| 19,940 | | |
| 37,397 | | |
| 19,945 | |
| 3,846 | | |
| 3,417 | | |
| 3,749 | | |
| 18,180 | |
| 13,578 | | |
| 13,198 | | |
| 13,886 | | |
| 16,406 | |
| 12,456 | | |
| 13,131 | | |
| 15,979 | | |
| 14,263 | |
| 24,126 | | |
| 23,335 | | |
| 18,231 | | |
| 8,166 | |
| 19,391 | | |
| 16,938 | | |
| 7,237 | | |
| 37,426 | |
| 742,718 | | |
| 586,744 | | |
| 870,192 | | |
| 2,003,325 | |
| | | |
| | | |
| | | |
| | |
| 367,370 | | |
| 204,759 | | |
| 440,274 | | |
| 850,059 | |
| 152,263 | | |
| — | | |
| — | | |
| — | |
| 5,671 | | |
| — | | |
| — | | |
| — | |
| 21,884 | | |
| — | | |
| — | | |
| — | |
| 547,188 | | |
| 204,759 | | |
| 440,274 | | |
| 850,059 | |
| 1,289,906 | | |
| 791,503 | | |
| 1,310,466 | | |
| 2,853,384 | |
| (174,600 | ) | |
| (135,886 | ) | |
| — | | |
| — | |
| 1,115,306 | | |
| 655,617 | | |
| 1,310,466 | | |
| 2,853,384 | |
| 125,731 | | |
| 532,013 | | |
| 960,595 | | |
| 2,147,019 | |
| — | | |
| — | | |
| — | | |
| (20,576 | ) |
$ | 125,731 | | |
$ | 532,013 | | |
$ | 960,595 | | |
$ | 2,126,443 | |
See accompanying
Notes to Financial Statements.
Statements of Operations
(unaudited) (continued)
Period from December 1, 2022 through May 31, 2023
| |
Tortoise
Energy Infrastructure Corp.(1) | | |
Tortoise Midstream Energy Fund, Inc. | |
Realized and Unrealized Gain (Loss) on Investments and Foreign Currency | |
| | |
| |
Net realized gain (loss) on investments in unaffiliated securities | |
$ | 6,463,525 | | |
$ | 3,190,268 | |
Net realized gain on written options | |
| — | | |
| — | |
Net realized loss on interest rate swap settlements | |
| — | | |
| — | |
Net realized gain (loss) on foreign currency and translation of other assets and liabilities denominated in foreign currency | |
| — | | |
| (2,146 | ) |
Net realized gain (loss), before income taxes | |
| 6,463,525 | | |
| 3,188,122 | |
Current tax benefit | |
| 15,898,342 | | |
| 6,231,256 | |
Net realized gain (loss) | |
| 22,361,867 | | |
| 9,419,378 | |
Net change in unrealized appreciation (depreciation) of investments in unaffiliated securities | |
| (74,529,946 | ) | |
| (39,184,249 | ) |
Net change in unrealized appreciation (depreciation) of investments in affiliated securities | |
| (311,761 | ) | |
| — | |
Net change in unrealized appreciation (depreciation) of other assets and liabilities due to foreign currency translation | |
| (193 | ) | |
| 824 | |
Net unrealized appreciation (depreciation) | |
| (74,841,900 | ) | |
| (39,183,425 | ) |
Net unrealized appreciation (depreciation) | |
| (74,841,900 | ) | |
| (39,183,425 | ) |
Net Realized and Unrealized Gain (Loss) | |
| (52,480,033 | ) | |
| (29,764,047 | ) |
Net Increase (Decrease) in Net Assets Applicable to Common Stockholders Resulting from Operations | |
$ | (50,204,695 | ) | |
$ | (28,720,124 | ) |
(1) | Consolidated
Statement of Operations (See Note 13 to the financial statements for further disclosure). |
(2) | Return
of Capital may be in excess of current year distributions due to prior year adjustments.
See Note 2 to the financial statements for further disclosure. |
See
accompanying Notes to Financial Statements.
2023 Semi-Annual Report | May
31, 2023
Tortoise Pipeline & Energy Fund, Inc. | | |
Tortoise Energy Independence Fund, Inc. | | |
Tortoise Power and Energy Infrastructure Fund, Inc. | | |
Ecofin
Sustainable and Social Impact Term Fund(1) | |
| | |
| | |
| | |
| |
$ | 2,226,215 | | |
$ | 133,829 | | |
$ | 1,263,138 | | |
$ | (3,571,025 | ) |
| — | | |
| — | | |
| — | | |
| 46,486 | |
| — | | |
| — | | |
| — | | |
| — | |
| 387 | | |
| (187 | ) | |
| 98 | | |
| 41,248 | |
| 2,226,602 | | |
| 133,642 | | |
| 1,263,236 | | |
| (3,483,291 | ) |
| — | | |
| — | | |
| — | | |
| — | |
| 2,226,602 | | |
| 133,642 | | |
| 1,263,236 | | |
| (3,483,291 | ) |
| (9,635,270 | ) | |
| (10,235,188 | ) | |
| (3,762,562 | ) | |
| (1,973,734 | ) |
| — | | |
| — | | |
| — | | |
| (121,813 | ) |
| 1,616 | | |
| 185 | | |
| 457 | | |
| 1,758 | |
| (9,633,654 | ) | |
| (10,235,003 | ) | |
| (3,762,105 | ) | |
| (2,093,789 | ) |
| (9,633,654 | ) | |
| (10,235,003 | ) | |
| (3,762,105 | ) | |
| (2,093,789 | ) |
| (7,407,052 | ) | |
| (10,101,361 | ) | |
| (2,498,869 | ) | |
| (5,577,080 | ) |
$ | (7,281,321 | ) | |
$ | (9,569,348 | ) | |
$ | (1,538,274 | ) | |
$ | (3,450,637 | ) |
See
accompanying Notes to Financial Statements.
Statements of Changes in Net Assets
| |
Tortoise
Energy Infrastructure Corp.(1) | |
| |
Six Months Ended May 31, 2023 | | |
Year Ended November 30, 2022 | |
| |
(Unaudited) | | |
| |
Operations | |
| | |
| |
Net investment income (loss) | |
$ | 2,275,338 | | |
$ | 1,391,127 | |
Net realized gain (loss) | |
| 22,361,867 | | |
| 112,955,888 | |
Net unrealized appreciation (depreciation) | |
| (74,841,900 | ) | |
| (11,085,418 | ) |
Net increase (decrease) in net assets applicable to common stockholders resulting from operations | |
| (50,204,695 | ) | |
| 103,261,597 | |
Distributions to Common Stockholders | |
| | | |
| | |
From distributable earnings | |
| — | | |
| — | |
From return of capital | |
| (16,090,742 | ) | |
| (33,451,804 | ) |
Total distributions to common stockholders | |
| (16,090,742 | ) | |
| (33,451,804 | ) |
Capital Stock Transactions | |
| | | |
| | |
Cost of shares repurchased and retired through tender offer | |
| — | | |
| (23,235,549 | ) |
Net increase (decrease) in net assets applicable to common stockholders from capital stock transactions | |
| — | | |
| (23,235,549 | ) |
Total increase (decrease) in net assets applicable to common stockholders | |
| (66,295,437 | ) | |
| 46,574,244 | |
Net Assets | |
| | | |
| | |
Beginning of period | |
| 446,617,978 | | |
| 400,043,734 | |
End of period | |
$ | 380,322,541 | | |
$ | 446,617,978 | |
Transactions in common shares | |
| | | |
| | |
Shares outstanding at beginning of period | |
| 11,331,508 | | |
| 11,927,903 | |
Shares repurchased | |
| — | | |
| (596,395 | ) |
Shares outstanding at end of period | |
| 11,331,508 | | |
| 11,331,508 | |
Consolidated
Statement of Changes in Net Assets (See Note 13 to the financial statements for further disclosure).
See
accompanying Notes to Financial Statements.
2023 Semi-Annual Report | May 31, 2023
Tortoise
Midstream Energy Fund, Inc. | | |
Tortoise
Pipeline & Energy Fund, Inc. | |
Six Months Ended May 31, 2023 | | |
Year Ended November 30, 2022 | | |
Six Months Ended May 31, 2023 | | |
Year Ended November 30, 2022 | |
(Unaudited) | | |
| | |
(Unaudited) | | |
| |
| | |
| | |
| | |
| |
$ | 1,043,923 | | |
$ | 1,017,339 | | |
$ | 125,731 | | |
$ | 170,573 | |
| 9,419,378 | | |
| 76,637,335 | | |
| 2,226,602 | | |
| 1,792,955 | |
| (39,183,425 | ) | |
| (11,930,583 | ) | |
| (9,633,654 | ) | |
| 18,113,795 | |
| (28,720,124 | ) | |
| 65,724,091 | | |
| (7,281,321 | ) | |
| 20,077,323 | |
| | | |
| | | |
| | | |
| | |
| — | | |
| — | | |
| — | | |
| (1,083,713 | ) |
| (8,255,696 | ) | |
| (17,163,158 | ) | |
| (2,497,334 | ) | |
| (4,108,112 | ) |
| (8,255,696 | ) | |
| (17,163,158 | ) | |
| (2,497,334 | ) | |
| (5,191,825 | ) |
| | | |
| | | |
| | | |
| | |
| — | | |
| (12,380,698 | ) | |
| — | | |
| (3,665,779 | ) |
| — | | |
| (12,380,698 | ) | |
| — | | |
| (3,665,779 | ) |
| (36,975,820 | ) | |
| 36,180,235 | | |
| (9,778,655 | ) | |
| 11,219,719 | |
| | | |
| | | |
| | | |
| | |
| 237,021,623 | | |
| 200,841,388 | | |
| 73,508,732 | | |
| 62,289,013 | |
$ | 200,045,803 | | |
$ | 237,021,623 | | |
$ | 63,730,077 | | |
$ | 73,508,732 | |
| | | |
| | | |
| | | |
| | |
| 5,360,842 | | |
| 5,642,991 | | |
| 2,116,385 | | |
| 2,227,773 | |
| — | | |
| (282,149 | ) | |
| — | | |
| (111,388 | ) |
| 5,360,842 | | |
| 5,360,842 | | |
| 2,116,385 | | |
| 2,116,385 | |
See
accompanying Notes to Financial Statements.
Statements of Changes
in Net Assets (continued)
| |
Tortoise Energy Independence Fund, Inc. | |
| |
Six Months Ended May 31, 2023 | | |
Year Ended November 30, 2022 | |
| |
(Unaudited) | | |
| |
Operations | |
| | |
| |
Net investment income (loss) | |
$ | 532,013 | | |
$ | 1,470,020 | |
Net realized gain (loss) | |
| 133,642 | | |
| 5,081,718 | |
Net unrealized appreciation (depreciation) | |
| (10,235,003 | ) | |
| 21,478,683 | |
Net increase (decrease) in net assets applicable to common stockholders resulting from operations | |
| (9,569,348 | ) | |
| 28,030,421 | |
Distributions to Common Stockholders | |
| | | |
| | |
From distributable earnings | |
| — | | |
| (1,496,794 | ) |
From return of capital | |
| (2,209,659 | ) | |
| (2,291,192 | ) |
Total distributions to common stockholders | |
| (2,209,659 | ) | |
| (3,787,986 | ) |
Capital Stock Transactions | |
| | | |
| | |
Cost of shares repurchased and retired through tender offer | |
| — | | |
| (3,573,817 | ) |
Net increase (decrease) in net assets applicable to common stockholders from capital stock transactions | |
| — | | |
| (3,573,817 | ) |
Total increase (decrease) in net assets applicable to common stockholders | |
| (11,779,007 | ) | |
| 20,668,618 | |
Net Assets | |
| | | |
| | |
Beginning of period | |
| 67,066,827 | | |
| 46,398,209 | |
End of period | |
$ | 55,287,820 | | |
$ | 67,066,827 | |
Transactions in common shares | |
| | | |
| | |
Shares outstanding at beginning of period | |
| 1,753,698 | | |
| 1,845,997 | |
Shares repurchased | |
| — | | |
| (92,299 | ) |
Shares outstanding at end of period | |
| 1,753,698 | | |
| 1,753,698 | |
Consolidated
Statement of Changes in Net Assets (See Note 13 to the financial statements for further disclosure).
See
accompanying Notes to Financial Statements.
2023 Semi-Annual Report | May
31, 2023
Tortoise Power and Energy Infrastructure Fund, Inc. | | |
Ecofin
Sustainable and Social Impact Term Fund(1) | |
Six Months Ended May 31, 2023 | | |
Year Ended November 30, 2022 | | |
Six Months Ended May 31, 2023 | | |
Year Ended November 30, 2022 | |
(Unaudited) | | |
| | |
(Unaudited) | | |
| |
| | |
| | |
| | |
| |
$ | 960,595 | | |
$ | 1,553,435 | | |
$ | 2,126,443 | | |
$ | 5,921,913 | |
| 1,263,236 | | |
| 282,059 | | |
| (3,483,291 | ) | |
| 9,000,317 | |
| (3,762,105 | ) | |
| 10,522,210 | | |
| (2,093,789 | ) | |
| (11,340,608 | ) |
| (1,538,274 | ) | |
| 12,357,704 | | |
| (3,450,637 | ) | |
| 3,581,622 | |
| | | |
| | | |
| | | |
| | |
| — | | |
| (1,907,796 | ) | |
| (2,045,551 | ) | |
| (6,211,270 | ) |
| (3,906,110 | ) | |
| (5,693,483 | ) | |
| (5,239,658 | ) | |
| (7,954,413 | ) |
| (3,906,110 | ) | |
| (7,601,279 | ) | |
| (7,285,209 | ) | |
| (14,165,683 | ) |
| | | |
| | | |
| | | |
| | |
| — | | |
| (4,973,178 | ) | |
| — | | |
| — | |
| — | | |
| (4,973,178 | ) | |
| — | | |
| — | |
| (5,444,384 | ) | |
| (216,753 | ) | |
| (10,735,846 | ) | |
| (10,584,061 | ) |
| | | |
| | | |
| | | |
| | |
| 98,244,810 | | |
| 98,461,563 | | |
| 220,797,955 | | |
| 231,382,016 | |
$ | 92,800,426 | | |
$ | 98,244,810 | | |
$ | 210,062,109 | | |
$ | 220,797,955 | |
| | | |
| | | |
| | | |
| | |
| 6,200,175 | | |
| 6,526,499 | | |
| 13,491,127 | | |
| 13,491,127 | |
| — | | |
| (326,324 | ) | |
| — | | |
| — | |
| 6,200,175 | | |
| 6,200,175 | | |
| 13,491,127 | | |
| 13,491,127 | |
See
accompanying Notes to Financial Statements.
Statements of Cash Flows
(unaudited)
Period from December 1, 2022 through May 31, 2023
| |
Tortoise
Energy Infrastructure Corp.(1) | | |
Tortoise Midstream Energy Fund, Inc. | |
Cash Flows From Operating Activities | |
| | |
| |
Dividends, distributions and interest received from investments | |
$ | 13,628,273 | | |
$ | 8,094,021 | |
Purchases of long-term investments | |
| (40,375,233 | ) | |
| (38,537,234 | ) |
Proceeds from sales of long-term investments | |
| 87,939,856 | | |
| 50,308,009 | |
Sales (purchases) of short-term investments, net | |
| 30,635 | | |
| 2,152 | |
Call options written, net | |
| — | | |
| — | |
Interest received on securities sold, net | |
| — | | |
| — | |
Interest expense paid | |
| (2,363,751 | ) | |
| (974,786 | ) |
Distributions to mandatory redeemable preferred stockholders | |
| (611,533 | ) | |
| (317,208 | ) |
Net income tax refunds received (income taxes paid) | |
| (5,251,528 | ) | |
| (2,705,448 | ) |
Operating expenses paid | |
| (3,625,977 | ) | |
| (2,165,335 | ) |
Net cash provided by (used in) operating activities | |
| 49,370,742 | | |
| 13,704,171 | |
Cash Flows From Financing Activities | |
| | | |
| | |
Advances (payments) on credit facilities, net | |
| (23,600,000 | ) | |
| (1,600,000 | ) |
Redemption of mandatory redeemable preferred stock | |
| — | | |
| (3,848,475 | ) |
Repayment of senior notes | |
| (9,680,000 | ) | |
| — | |
Distributions paid to common stockholders | |
| (16,090,742 | ) | |
| (8,255,696 | ) |
Net cash provided by (used in) financing activities | |
| (49,370,742 | ) | |
| (13,704,171 | ) |
Net change in cash | |
| — | | |
| — | |
Cash — beginning of period | |
| — | | |
| — | |
Cash — end of period | |
$ | — | | |
$ | — | |
(1)
Consolidated Statement of Cash Flows (See Note 13 to the financial statements for further disclosure).
See
accompanying Notes to Financial Statements.
2023 Semi-Annual Report | May
31, 2023
Tortoise Pipeline & Energy Fund, Inc. | | |
Tortoise Energy Independence Fund, Inc. | | |
Tortoise Power and Energy Infrastructure Fund, Inc. | | |
Ecofin
Sustainable and Social Impact Term Fund(1) | |
| | |
| | |
| | |
| |
$ | 2,708,126 | | |
$ | 1,722,937 | | |
$ | 3,863,200 | | |
$ | 6,541,555 | |
| (3,370,485 | ) | |
| (4,381,511 | ) | |
| (4,863,100 | ) | |
| (40,275,835 | ) |
| 6,784,747 | | |
| 243,950 | | |
| 6,828,076 | | |
| 43,319,932 | |
| (17,520 | ) | |
| 202,812 | | |
| (19,297 | ) | |
| 77,788 | |
| — | | |
| — | | |
| — | | |
| 46,486 | |
| — | | |
| — | | |
| 26,754 | | |
| 276,465 | |
| (357,366 | ) | |
| (152,167 | ) | |
| (445,617 | ) | |
| (815,990 | ) |
| (177,148 | ) | |
| — | | |
| — | | |
| — | |
| — | | |
| — | | |
| — | | |
| — | |
| (673,020 | ) | |
| (526,362 | ) | |
| (883,906 | ) | |
| (1,882,391 | ) |
| 4,897,334 | | |
| (2,890,341 | ) | |
| 4,506,110 | | |
| 7,288,010 | |
| | | |
| | | |
| | | |
| | |
| (2,400,000 | ) | |
| 5,100,000 | | |
| (600,000 | ) | |
| — | |
| — | | |
| — | | |
| — | | |
| — | |
| — | | |
| — | | |
| — | | |
| — | |
| (2,497,334 | ) | |
| (2,209,659 | ) | |
| (3,906,110 | ) | |
| (7,285,209 | ) |
| (4,897,334 | ) | |
| 2,890,341 | | |
| (4,506,110 | ) | |
| (7,285,209 | ) |
| — | | |
| — | | |
| — | | |
| 2,801 | |
| — | | |
| — | | |
| — | | |
| 144,024 | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 146,825 | |
See
accompanying Notes to Financial Statements.
Statements of Cash Flows
(continued)
Period from December 1, 2022 through May 31, 2023
| |
Tortoise
Energy Infrastructure Corp.(1) | | |
Tortoise Midstream Energy Fund, Inc. | |
Reconciliation of net increase in net assets applicable to common stockholders resulting from operations to net cash provided by (used in) operating activities | |
| | |
| |
Net decrease in net assets applicable to common stockholders resulting from operations | |
$ | (50,204,695 | ) | |
$ | (28,720,124 | ) |
Adjustments to reconcile net
decrease in net assets applicable to common stockholders resulting from operations to net cash provided by (used in) operating
activities: |
|
|
|
|
|
|
|
|
Purchases of long-term investments | |
| (41,703,158 | ) | |
| (28,459,163 | ) |
Proceeds from sales of long-term investments | |
| 86,283,864 | | |
| 38,188,868 | |
Sales (purchases) of short-term investments, net | |
| 30,635 | | |
| 2,152 | |
Call options written, net | |
| — | | |
| — | |
Return of capital on distributions received | |
| 4,989,010 | | |
| 3,816,896 | |
Deferred tax expense (benefit) | |
| — | | |
| — | |
Net unrealized (appreciation) depreciation | |
| 74,841,900 | | |
| 39,183,425 | |
Amortization (accretion) of market premium (discount), net | |
| (25,785 | ) | |
| (17,248 | ) |
Net realized (gain) loss | |
| (6,463,525 | ) | |
| (3,188,122 | ) |
Amortization of debt issuance costs | |
| 22,260 | | |
| 8,835 | |
Changes in operating assets and liabilities: | |
| | | |
| | |
(Increase) decrease in dividends, distributions and interest receivable from investments | |
| 156,876 | | |
| 58,161 | |
(Increase) decrease in receivable for investments sold | |
| 1,655,992 | | |
| 12,119,141 | |
(Increase) decrease in prepaid expenses and other assets | |
| (513,145 | ) | |
| (440,339 | ) |
Increase (decrease) in payable for investments purchased | |
| 1,327,925 | | |
| (10,078,071 | ) |
Increase (decrease) in payable to Adviser, net of fees waived | |
| 119,187 | | |
| 55,674 | |
Decrease in current tax liability | |
| (21,153,264 | ) | |
| (8,951,717 | ) |
Increase (decrease) in accrued expenses and other liabilities | |
| 6,665 | | |
| 125,803 | |
Total adjustments | |
| 99,575,437 | | |
| 42,424,295 | |
Net cash provided by (used in) operating activities | |
$ | 49,370,742 | | |
$ | 13,704,171 | |
(1)
Consolidated Statement of Cash Flows (See Note 13 to the financial statements for further disclosure).
See
accompanying Notes to Financial Statements.
2023 Semi-Annual Report | May
31, 2023
Tortoise Pipeline & Energy Fund, Inc. | | |
Tortoise Energy Independence Fund, Inc. | | |
Tortoise Power and Energy Infrastructure Fund, Inc. | | |
Ecofin
Sustainable and Social Impact Term Fund(1) | |
| | |
| | |
| | |
| |
$ | (7,281,321 | ) | |
$ | (9,569,348 | ) | |
$ | (1,538,274 | ) | |
$ | (3,450,637 | ) |
| | | |
| | | |
| | | |
| | |
| (3,370,485 | ) | |
| (4,381,511 | ) | |
| (4,863,100 | ) | |
| (40,275,835 | ) |
| 6,784,747 | | |
| 243,950 | | |
| 6,828,076 | | |
| 43,319,932 | |
| (17,520 | ) | |
| 202,812 | | |
| (19,297 | ) | |
| 77,788 | |
| — | | |
| — | | |
| — | | |
| 46,486 | |
| 1,445,037 | | |
| 499,176 | | |
| 1,522,778 | | |
| 1,217,856 | |
| — | | |
| — | | |
| — | | |
| 20,576 | |
| 9,633,654 | | |
| 10,235,003 | | |
| 3,762,105 | | |
| 2,093,789 | |
| — | | |
| — | | |
| 71,483 | | |
| 179,686 | |
| (2,226,602 | ) | |
| (133,642 | ) | |
| (1,263,236 | ) | |
| 3,483,291 | |
| 5,671 | | |
| — | | |
| — | | |
| — | |
| | | |
| | | |
| | | |
| | |
| 22,052 | | |
| 36,131 | | |
| 24,632 | | |
| 420,075 | |
| — | | |
| — | | |
| — | | |
| — | |
| (87,285 | ) | |
| (56,669 | ) | |
| (52,853 | ) | |
| (15,904 | ) |
| — | | |
| — | | |
| — | | |
| — | |
| (22,683 | ) | |
| (19,024 | ) | |
| (5,497 | ) | |
| 12,313 | |
| — | | |
| — | | |
| — | | |
| — | |
| 12,069 | | |
| 52,781 | | |
| 39,293 | | |
| 158,594 | |
| 12,178,655 | | |
| 6,679,007 | | |
| 6,044,384 | | |
| 10,738,647 | |
$ | 4,897,334 | | |
$ | (2,890,341 | ) | |
$ | 4,506,110 | | |
$ | 7,288,010 | |
See
accompanying Notes to Financial Statements.
TYG Financial Highlights
| |
Six
Months Ended May 31, 2023 | | |
Year
Ended
November 30, 2022 | | |
Year
Ended November 30, 2021 | | |
Year
Ended November 30, 2020 | | |
Year
Ended November 30, 2019 | | |
Year
Ended November 30, 2018 | |
| |
(unaudited) | | |
| | |
| | |
| | |
| | |
| |
Per
Common Share Data(1)(2) | |
| | |
| | |
| | |
| | |
| | |
| |
Net
Asset Value, beginning of period | |
$ | 39.41 | | |
$ | 33.54 | | |
$ | 25.42 | | |
$ | 69.24 | | |
$ | 94.00 | | |
$ | 95.72 | |
Income
(Loss) from Investment Operations | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
investment income (loss)(3) | |
| 0.20 | | |
| 0.12 | | |
| (0.45 | ) | |
| (0.44 | ) | |
| (1.20 | ) | |
| (1.96 | ) |
Net
realized and unrealized gain (loss)(3) | |
| (4.63 | ) | |
| 8.59 | | |
| 10.04 | | |
| (41.20 | ) | |
| (13.08 | ) | |
| 10.36 | |
Total
income (loss) from investment operations | |
| (4.43 | ) | |
| 8.71 | | |
| 9.59 | | |
| (41.64 | ) | |
| (14.28 | ) | |
| 8.40 | |
Distributions to Common Stockholders From return of capital | |
| (1.42 | ) | |
| (2.84 | ) | |
| (1.47 | ) | |
| (2.18 | ) | |
| (10.48 | ) | |
| (10.48 | ) |
Total
distributions to common stockholders | |
| (1.42 | ) | |
| (2.84 | ) | |
| (1.47 | ) | |
| (2.18 | ) | |
| (10.48 | ) | |
| (10.48 | ) |
Capital Stock Transactions Premiums less underwriting discounts and offering costs on issuance of common stock(4) | |
| — | | |
| — | | |
| — | | |
| — | | |
| (0.00 | ) | |
| 0.36 | |
Net
Asset Value, end of period | |
$ | 33.56 | | |
$ | 39.41 | | |
$ | 33.54 | | |
$ | 25.42 | | |
$ | 69.24 | | |
$ | 94.00 | |
Per
common share market value, end of period | |
$ | 26.95 | | |
$ | 33.54 | | |
$ | 27.27 | | |
$ | 19.16 | | |
$ | 67.28 | | |
$ | 90.36 | |
Total
investment return based on market value(5)(6) | |
| (15.73 | )% | |
| 33.82 | % | |
| 50.27 | % | |
| (69.69 | )% | |
| (15.46 | )% | |
| (3.42 | )% |
Supplemental
Data and Ratios | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
assets applicable to common stockholders, end of period (000’s) | |
$ | 380,323 | | |
$ | 446,618 | | |
$ | 400,044 | | |
$ | 311,398 | | |
$ | 930,286 | | |
$ | 1,260,300 | |
Average
net assets (000’s) | |
$ | 419,524 | | |
$ | 438,035 | | |
$ | 403,236 | | |
$ | 473,041 | | |
$ | 1,203,943 | | |
$ | 1,388,683 | |
Ratio
of Expenses to Average Net Assets(7) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Advisory
fees | |
| 1.26 | % | |
| 1.25 | % | |
| 1.18 | % | |
| 1.54 | % | |
| 1.62 | % | |
| 1.58 | % |
Other
operating expenses | |
| 0.34 | | |
| 0.25 | | |
| 0.29 | | |
| 0.27 | | |
| 0.14 | | |
| 0.13 | |
Total
operating expenses, before fee waiver | |
| 1.60 | | |
| 1.50 | | |
| 1.47 | | |
| 1.81 | | |
| 1.76 | | |
| 1.71 | |
Fee
waiver(8) | |
| — | | |
| — | | |
| — | | |
| — | | |
| (0.00 | ) | |
| (0.04 | ) |
Total
operating expenses | |
| 1.60 | | |
| 1.50 | | |
| 1.47 | | |
| 1.81 | | |
| 1.76 | | |
| 1.67 | |
Leverage
expenses | |
| 1.38 | | |
| 1.18 | | |
| 1.32 | | |
| 3.48 | | |
| 2.15 | | |
| 1.87 | |
Income
tax expense (benefit)(9) | |
| (7.60 | ) | |
| 2.02 | | |
| 9.06 | | |
| (22.97 | ) | |
| (5.49 | ) | |
| (11.02 | ) |
Total
expenses | |
| (4.62 | )% | |
| 4.70 | % | |
| 11.85 | % | |
| (17.68 | )% | |
| (1.58 | )% | |
| (7.48 | )% |
See
accompanying Notes to Financial Statements.
2023 Semi-Annual Report | May
31, 2023
| |
Six
Months Ended May 31,
2023 | | |
Year
Ended
November 30, 2022 | | |
Year
Ended
November 30, 2021 | | |
Year
Ended
November 30, 2020 | | |
Year
Ended
November 30, 2019 | | |
Year
Ended
November 30, 2018 | |
| |
(unaudited) | | |
| | |
| | |
| | |
| | |
| |
Ratio
of net investment loss to average net assets before fee waiver(7) | |
| 1.09 | % | |
| 0.32 | % | |
| (1.35 | )% | |
| (2.80 | )% | |
| (1.33 | )% | |
| (1.89 | )% |
Ratio
of net investment loss to average net assets after fee waiver(7) | |
| 1.09 | % | |
| 0.32 | % | |
| (1.35 | )% | |
| (2.80 | )% | |
| (1.33 | )% | |
| (1.85 | )% |
Portfolio
turnover rate | |
| 7.36 | % | |
| 73.84 | % | |
| 65.30 | % | |
| 36.79 | % | |
| 26.35 | % | |
| 17.96 | % |
Credit
facility borrowings, end of period (000’s) | |
$ | 7,100 | | |
$ | 30,700 | | |
$ | 19,200 | | |
$ | 13,200 | | |
$ | 93,900 | | |
$ | 107,100 | |
Senior
notes, end of period (000’s) | |
$ | 71,952 | | |
$ | 81,632 | | |
$ | 83,893 | | |
$ | 87,927 | | |
$ | 365,000 | | |
$ | 380,000 | |
Preferred
stock, end of period (000’s) | |
$ | 35,661 | | |
$ | 35,661 | | |
$ | 32,300 | | |
$ | 32,300 | | |
$ | 165,000 | | |
$ | 165,000 | |
Per
common share amount of senior notes outstanding, end of period | |
$ | 6.35 | | |
$ | 7.20 | | |
$ | 7.03 | | |
$ | 7.18 | | |
$ | 27.17 | | |
$ | 28.34 | |
Per
common share amount of net assets, excluding senior notes, end of period | |
$ | 39.91 | | |
$ | 46.61 | | |
$ | 40.57 | | |
$ | 32.60 | | |
$ | 96.41 | | |
$ | 122.34 | |
Asset
coverage, per $1,000 of principal amount of senior notes and credit facility borrowings(10) | |
$ | 6,262 | | |
$ | 5,293 | | |
$ | 5,194 | | |
$ | 4,399 | | |
$ | 3,387 | | |
$ | 3,926 | |
Asset
coverage ratio of senior notes and credit facility borrowings(10) | |
| 626 | % | |
| 529 | % | |
| 519 | % | |
| 440 | % | |
| 339 | % | |
| 393 | % |
Asset
coverage, per $10 liquidation value per share of mandatory redeemable preferred stock(11) | |
$ | 43 | | |
$ | 40 | | |
$ | 40 | | |
$ | 33 | | |
$ | 25 | | |
$ | 29 | |
Asset
coverage ratio of preferred stock(11) | |
| 432 | % | |
| 402 | % | |
| 395 | % | |
| 333 | % | |
| 249 | % | |
| 293 | % |
(1) | Information presented relates to a share of common stock outstanding for the entire period. |
(2) | During the year ended November 30, 2020, the Fund effected the following reverse stock
split: May 1, 2020, 1 for 4. All historical per share information has been retroactively
adjusted to reflect this reverse stock split. |
(3) | The per common share data for the years ended November 30, 2022, 2021, 2020, 2019, and
2018 do not reflect the change in estimate of investment income and return of capital, for
the respective year. See Note 2C to the financial statements for further disclosure. |
(4) | Represents underwriting and offering costs of less than $0.01 for the year ended November
30, 2019. Represents premium on shelf offerings of $0.40 per share, less the underwriting
and offering costs of $0.04 per share, for the year ended November 30, 2018. |
(5) | Not
annualized for periods less than one full year. |
(6) | Total investment return is calculated assuming a purchase of common stock at the beginning
of the period and a sale at the closing price on the last day of the period reported (excluding
brokerage commissions). The calculation also assumes reinvestment of distributions at actual
prices pursuant to TYG’s dividend reinvestment plan. |
(7) | Annualized for periods less than one full
year. |
(8) | Less than 0.01% for the years ended November 30, 2019. |
(9) | For the period from December 1, 2022 through May 31, 2023, TYG accrued $15,898,342 current
tax benefit. For the year ended November 30, 2022, TYG accrued $8,864,115 for current tax
expense. For the year ended November 30, 2021, TYG accrued $36,546,777 for current income
tax expense. For the year ended November 30, 2020, TYG accrued $116,472,157 for net deferred
income tax benefit and $7,747,729 for current income tax expense. For the year ended November
30, 2019, TYG accrued $73,090,370 for net deferred income tax benefit and $7,034,755 for
current income tax expense. For the year ended November 30, 2018, TYG accrued $152,516,725
for net deferred income tax benefit, which included a deferred tax benefit of $125,271,378
due to the impact from the federal tax rate reduction related to the Tax Cuts and Jobs Act.
|
(10) | Represents value of total assets less all liabilities and indebtedness not represented
by senior notes, credit facility borrowings and preferred stock at the end of the year divided
by senior notes and credit facility borrowings outstanding at the end of the period. |
(11) | Represents value of total assets less all liabilities and indebtedness not represented
by senior notes, credit facility borrowings and preferred stock at the end of the year divided
by senior notes, credit facility borrowings and preferred stock outstanding at the end of
the period. |
See
accompanying Notes to Financial Statements.
NTG Financial Highlights
| |
Six
Months Ended May 31,
2023 | | |
Year
Ended
November 30, 2022 | | |
Year
Ended
November 30, 2021 | | |
Year
Ended
November 30, 2020 | | |
Year
Ended
November 30, 2019 | | |
Year
Ended
November 30, 2018 | |
| |
(unaudited) | | |
| | |
| | |
| | |
| | |
| |
Per
Common Share Data(1)(2) | |
| | |
| | |
| | |
| | |
| | |
| |
Net
Asset Value, beginning of period | |
$ | 44.21 | | |
$ | 35.59 | | |
$ | 25.56 | | |
$ | 105.60 | | |
$ | 144.80 | | |
$ | 159.60 | |
Income
(Loss) from Investment Operations | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
investment income (loss)(3) | |
| 0.19 | | |
| 0.18 | | |
| (0.41 | ) | |
| (0.30 | ) | |
| (2.80 | ) | |
| (4.30 | ) |
Net
realized and unrealized gain (loss)(3) | |
| (5.54 | ) | |
| 11.52 | | |
| 12.09 | | |
| (76.77 | ) | |
| (19.50 | ) | |
| 13.60 | |
Total
income (loss) from investment operations | |
| (5.35 | ) | |
| 11.70 | | |
| 11.68 | | |
| (77.07 | ) | |
| (22.30 | ) | |
| 9.30 | |
Distributions
to Common Stockholders | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
From
return of capital | |
| (1.54 | ) | |
| (3.08 | ) | |
| (1.65 | ) | |
| (2.97 | ) | |
| (16.90 | ) | |
| (16.90 | ) |
Total
distributions to common stockholders | |
| (1.54 | ) | |
| (3.08 | ) | |
| (1.65 | ) | |
| (2.97 | ) | |
| (16.90 | ) | |
| (16.90 | ) |
Capital
stock transactions | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Premiums
less underwriting discounts and offering costs on issuance of common stock(4) | |
| — | | |
| — | | |
| — | | |
| — | | |
| (0.00 | ) | |
| (7.20 | ) |
Net
Asset Value, end of period | |
$ | 37.32 | | |
$ | 44.21 | | |
$ | 35.59 | | |
$ | 25.56 | | |
$ | 105.60 | | |
$ | 144.80 | |
Per
common share market value, end of period | |
$ | 31.53 | | |
$ | 37.69 | | |
$ | 30.31 | | |
$ | 19.46 | | |
$ | 98.80 | | |
$ | 137.20 | |
Total
investment return based on market value(5)(6) | |
| (12.53 | )% | |
| 34.99 | % | |
| 64.86 | % | |
| (78.77 | )% | |
| (17.63 | )% | |
| (4.10 | )% |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Supplemental
Data and Ratios | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
assets applicable to common stockholders, end of period (000’s) | |
$ | 200,046 | | |
$ | 237,022 | | |
$ | 200,841 | | |
$ | 149,407 | | |
$ | 667,708 | | |
$ | 915,033 | |
Average
net assets (000’s) | |
$ | 220,864 | | |
$ | 229,874 | | |
$ | 200,484 | | |
$ | 289,147 | | |
$ | 871,496 | | |
$ | 887,014 | |
Ratio
of Expenses to Average Net Assets(7) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Advisory
fees | |
| 1.22 | % | |
| 1.21 | % | |
| 1.28 | % | |
| 1.61 | % | |
| 1.59 | % | |
| 1.54 | % |
Other
operating expenses | |
| 0.47 | | |
| 0.33 | | |
| 0.37 | | |
| 0.33 | | |
| 0.14 | | |
| 0.15 | |
Total
operating expenses, before fee waiver | |
| 1.69 | | |
| 1.54 | | |
| 1.65 | | |
| 1.94 | | |
| 1.73 | | |
| 1.69 | |
Fee
waiver | |
| — | | |
| — | | |
| — | | |
| — | | |
| (0.03 | ) | |
| (0.09 | ) |
Total
operating expenses | |
| 1.69 | | |
| 1.54 | | |
| 1.65 | | |
| 1.94 | | |
| 1.70 | | |
| 1.60 | |
Leverage
expenses | |
| 1.22 | | |
| 0.98 | | |
| 0.84 | | |
| 4.43 | | |
| 2.34 | | |
| 1.98 | |
Income
tax expense (benefit)(8) | |
| (5.66 | ) | |
| 2.04 | | |
| 8.82 | | |
| 2.19 | | |
| (4.80 | ) | |
| (6.09 | ) |
Total
expenses | |
| (2.75 | )% | |
| 4.56 | % | |
| 11.31 | % | |
| 8.56 | % | |
| (0.76 | )% | |
| (2.51 | )% |
See
accompanying Notes to Financial Statements.
2023 Semi-Annual Report | May 31, 2023
| |
Six
Months Ended May 31,
2023 | | |
Year
Ended November 30, 2022 | | |
Year
Ended November 30, 2021 | | |
Year
Ended November 30, 2020 | | |
Year
Ended November 30, 2019 | | |
Year
Ended November 30, 2018 | |
| |
(unaudited) | | |
| | |
| | |
| | |
| | |
| |
Ratio
of net investment loss to average net assets before fee waiver(7) | |
| 0.95 | % | |
| 0.44 | % | |
| (1.17 | )% | |
| (3.11 | )% | |
| (2.05 | )% | |
| (2.65 | )% |
Ratio
of net investment loss to average net assets after fee waiver(7) | |
| 0.95 | % | |
| 0.44 | % | |
| (1.17 | )% | |
| (3.11 | )% | |
| (2.02 | )% | |
| (2.56 | )% |
Portfolio
turnover rate | |
| 9.87 | % | |
| 72.67 | % | |
| 58.40 | % | |
| 38.08 | % | |
| 29.21 | % | |
| 13.67 | % |
Credit
facility borrowings, end of period (000’s) | |
$ | 8,900 | | |
$ | 10,500 | | |
$ | 40,900 | | |
$ | 40,000 | | |
$ | 53,600 | | |
$ | 73,100 | |
Senior notes, end
of period (000’s) | |
$ | 32,150 | | |
$ | 32,150 | | |
$ | 7,150 | | |
$ | 15,321 | | |
$ | 277,000 | | |
$ | 312,000 | |
Preferred stock, end
of period (000’s) | |
$ | 15,870 | | |
$ | 19,719 | | |
$ | 12,219 | | |
$ | 12,700 | | |
$ | 132,000 | | |
$ | 132,000 | |
Per common share amount
of senior notes outstanding, end of period | |
$ | 6.00 | | |
$ | 6.00 | | |
$ | 1.27 | | |
$ | 2.62 | | |
$ | 43.82 | | |
$ | 49.36 | |
Per
common share amount of net assets, excluding senior notes, end of period | |
$ | 43.32 | | |
$ | 50.21 | | |
$ | 36.86 | | |
$ | 28.18 | | |
$ | 149.42 | | |
$ | 194.17 | |
Asset
coverage, per $1,000 of principal amount of senior notes and credit facility borrowings(9) | |
$ | 6,260 | | |
$ | 7,020 | | |
$ | 5,434 | | |
$ | 3,930 | | |
$ | 3,419 | | |
$ | 3,719 | |
Asset
coverage ratio of senior notes and credit facility borrowings(9) | |
| 626 | % | |
| 702 | % | |
| 543 | % | |
| 393 | % | |
| 342 | % | |
| 372 | % |
Asset
coverage, per $25 liquidation value per share of mandatory redeemable preferred stock(10) | |
$ | 113 | | |
$ | 120 | | |
$ | 108 | | |
$ | 80 | | |
$ | 61 | | |
$ | 69 | |
Asset
coverage ratio of preferred stock(10) | |
| 451 | % | |
| 480 | % | |
| 433 | % | |
| 320 | % | |
| 244 | % | |
| 277 | % |
(1) | Information
presented relates to a share of common stock outstanding for the entire period. |
(2) | During
the year ended November 30, 2020, the Fund effected the following reverse stock split: May
1, 2020, 1 for 10. All historical per share information has been retroactively adjusted to
reflect this reverse stock split. |
(3) | The
per common share data for the years ended November 30, 2022, 2021, 2020, 2019, and 2018 do
not reflect the change in estimate of investment income and return of capital, for the respective
year. See Note 2C to the financial statements for further disclosure. |
(4) | Represents
underwriting and offering costs of less than $0.01 for the year ending November 30, 2019.
Represents the discounts on shares issued through rights offerings of $5.50, plus the underwriting
and offering costs of $1.69 per share for the year ended November 30, 2018. |
(5) | Not
annualized for periods less than one full year. |
(6) | Total
investment return is calculated assuming a purchase of common stock at the beginning of the
period and a sale at the closing price on the last day of the period reported (excluding
brokerage commissions). This calculation also assumes reinvestment of distributions at actual
prices pursuant to NTG’s dividend reinvestment plan. |
(7) | Annualized
for periods less than one full year. |
(8) | For
the period from December 1, 2022 through May 31, 2023, NTG accrued $6,231,256 current tax
benefit. For the year ended November 30, 2022, NTG accrued $4,679,689 for current tax expense.
For the year ended November 30, 2021, NTG accrued $17,691,276 for current income tax expense.
For the year ended November 30, 2020, NTG accrued $27,892,485 for net deferred income tax
benefit and $34,222,098 for current tax expense. For the year ended November 30, 2019, NTG
accrued $40,282,948 for net deferred income tax benefit and $1,510,530 for current tax benefit.
For the year ended November 30, 2018, NTG accrued $54,197,357 for net deferred income tax
benefit, which included a deferred tax benefit of $47,436,124 due to the impact from the
federal tax rate reduction related to the Tax Cuts and Jobs Act. |
(9) | Represents
value of total assets less all liabilities and indebtedness not represented by senior notes,
credit facility borrowings and preferred stock at the end of the year divided by senior notes
and credit facility borrowings outstanding at the end of the period. |
(10) | Represents
value of total assets less all liabilities and indebtedness not represented by senior notes,
credit facility borrowings and preferred stock at the end of the year divided by senior notes,
credit facility borrowings and preferred stock outstanding at the end of the period. |
See
accompanying Notes to Financial Statements.
TTP Financial Highlights
| |
Six
Months Ended May 31, 2023 | | |
Year
Ended
November 30, 2022 | | |
Year
Ended
November 30, 2021 | | |
Year
Ended November 30, 2020 | | |
Year
Ended November 30, 2019 | | |
Year
Ended November 30, 2018 | |
| |
(unaudited) | | |
| | |
| | |
| | |
| | |
| |
Per
Common Share Data(1)(2) | |
| | |
| | |
| | |
| | |
| | |
| |
Net
Asset Value, beginning of period | |
$ | 34.73 | | |
$ | 27.96 | | |
$ | 19.97 | | |
$ | 51.88 | | |
$ | 65.16 | | |
$ | 75.28 | |
Income
(Loss) from Investment Operations | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
investment income (loss)(3) | |
| 0.06 | | |
| 0.08 | | |
| (0.23 | ) | |
| (0.12 | ) | |
| (0.48 | ) | |
| (0.60 | ) |
Net
realized and unrealized gain (loss)(3) | |
| (3.50 | ) | |
| 9.05 | | |
| 9.28 | | |
| (30.17 | ) | |
| (7.24 | ) | |
| (3.00 | ) |
Total
income (loss) from investment operations | |
| (3.44 | ) | |
| 9.13 | | |
| 9.05 | | |
| (30.29 | ) | |
| (7.72 | ) | |
| (3.60 | ) |
Distributions
to Common Stockholders | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
From
net investment income | |
| — | | |
| (0.49 | ) | |
| — | | |
| — | | |
| — | | |
| (0.16 | ) |
From
net realized gains from investment transactions | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
From
return of capital | |
| (1.18 | ) | |
| (1.87 | ) | |
| (1.06 | ) | |
| (1.62 | ) | |
| (5.56 | ) | |
| (6.36 | ) |
Total
distributions to common stockholders | |
| (1.18 | ) | |
| (2.36 | ) | |
| (1.06 | ) | |
| (1.62 | ) | |
| (5.56 | ) | |
| (6.52 | ) |
Net
Asset Value, end of period | |
$ | 30.11 | | |
$ | 34.73 | | |
$ | 27.96 | | |
$ | 19.97 | | |
$ | 51.88 | | |
$ | 65.16 | |
Per
common share market value, end of period | |
$ | 24.81 | | |
$ | 28.58 | | |
$ | 23.16 | | |
$ | 15.15 | | |
$ | 46.08 | | |
$ | 57.32 | |
Total
investment return based on market value(4)(5) | |
| (9.33 | )% | |
| 33.85 | % | |
| 60.09 | % | |
| (64.69 | )% | |
| (11.10 | )% | |
| (7.03 | )% |
Supplemental
Data and Ratios | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
assets applicable to common stockholders, end of period (000’s) | |
$ | 63,730 | | |
$ | 73,509 | | |
$ | 62,289 | | |
$ | 48,108 | | |
$ | 129,887 | | |
$ | 163,202 | |
Average
net assets (000’s) | |
$ | 68,149 | | |
$ | 72,122 | | |
$ | 61,943 | | |
$ | 70,052 | | |
$ | 157,017 | | |
$ | 188,518 | |
Ratio
of Expenses to Average Net Assets(6) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Advisory
fees | |
| 1.41 | % | |
| 1.41 | % | |
| 1.46 | % | |
| 1.67 | % | |
| 1.54 | % | |
| 1.51 | % |
Other
operating expenses | |
| 0.77 | | |
| 0.60 | | |
| 0.74 | | |
| 0.75 | | |
| 0.35 | | |
| 0.32 | |
Total
operating expenses, before fee waiver | |
| 2.18 | | |
| 2.01 | | |
| 2.20 | | |
| 2.42 | | |
| 1.89 | | |
| 1.83 | |
Fee
waiver | |
| (0.51 | ) | |
| (0.28 | ) | |
| (0.21 | ) | |
| — | | |
| — | | |
| — | |
Total
operating expenses | |
| 1.67 | | |
| 1.73 | | |
| 1.99 | | |
| 2.42 | | |
| 1.89 | | |
| 1.83 | |
Leverage
expenses | |
| 1.61 | | |
| 1.19 | | |
| 1.67 | | |
| 2.66 | | |
| 1.62 | | |
| 1.40 | |
Total
expenses | |
| 3.28 | % | |
| 2.92 | % | |
| 3.66 | % | |
| 5.08 | % | |
| 3.51 | % | |
| 3.23 | % |
See
accompanying Notes to Financial Statements.
2023 Semi-Annual Report | May 31, 2023
| |
Six
Months Ended May 31,
2023 | | |
Year
Ended
November 30, 2022 | | |
Year
Ended
November 30, 2021 | | |
Year
Ended
November 30, 2020 | | |
Year
Ended
November 30, 2019 | | |
Year
Ended
November 30, 2018 | |
| |
(unaudited) | | |
| | |
| | |
| | |
| | |
| |
Ratio
of net investment income (loss) to average net assets before fee waiver(6) | |
| (0.14 | )% | |
| (0.05 | )% | |
| (1.04 | )% | |
| (0.97 | )% | |
| (0.79 | )% | |
| (0.80 | )% |
Ratio
of net investment income (loss) to average net assets after fee waiver(6) | |
| 0.37 | % | |
| 0.24 | % | |
| (0.83 | )% | |
| (0.97 | )% | |
| (0.79 | )% | |
| (0.80 | )% |
Portfolio
turnover rate | |
| 3.85 | % | |
| 8.18 | % | |
| 14.77 | % | |
| 35.61 | % | |
| 21.31 | % | |
| 14.27 | % |
Credit
facility borrowings, end of period (000’s) | |
$ | 7,400 | | |
$ | 9,800 | | |
$ | 8,100 | | |
$ | — | | |
$ | 11,800 | | |
$ | 19,800 | |
Senior
notes, end of period (000’s) | |
$ | 3,943 | | |
$ | 3,943 | | |
$ | 3,943 | | |
$ | 14,457 | | |
$ | 34,000 | | |
$ | 34,000 | |
Preferred
stock, end of period (000’s) | |
$ | 6,100 | | |
$ | 6,100 | | |
$ | 6,100 | | |
$ | 6,100 | | |
$ | 16,000 | | |
$ | 16,000 | |
Per common share amount
of senior notes outstanding, end of period | |
$ | 1.86 | | |
$ | 1.86 | | |
$ | 1.77 | | |
$ | 6.00 | | |
$ | 13.58 | | |
$ | 13.58 | |
Per
common share amount of net assets, excluding senior notes, end of period | |
$ | 31.97 | | |
$ | 36.59 | | |
$ | 29.73 | | |
$ | 25.97 | | |
$ | 65.46 | | |
$ | 78.74 | |
Asset
coverage, per $1,000 of principal amount of senior notes and credit facility borrowings(7) | |
$ | 7,156 | | |
$ | 6,793 | | |
$ | 6,679 | | |
$ | 4,750 | | |
$ | 4,185 | | |
$ | 4,331 | |
Asset
coverage ratio of senior notes and credit facility borrowings(7) | |
| 716 | % | |
| 679 | % | |
| 668 | % | |
| 475 | % | |
| 419 | % | |
| 433 | % |
Asset
coverage, per $25 liquidation value per share of mandatory redeemable preferred stock(8) | |
$ | 116 | | |
$ | 118 | | |
$ | 111 | | |
$ | 84 | | |
$ | 78 | | |
$ | 83 | |
Asset
coverage ratio of preferred stock(8) | |
| 465 | % | |
| 470 | % | |
| 443 | % | |
| 334 | % | |
| 310 | % | |
| 334 | % |
(1) | Information
presented relates to a share of common stock outstanding for the entire period. |
(2) | During the
year ended November 30, 2020, the Fund effected the following reverse stock split: May 1,
2020, 1 for 4. All historical per share information has been retroactively adjusted to reflect
this reverse stock split. |
(3) | The per common
share data for the years ended November 30, 2022, 2021, 2020, 2019, and 2018 do not reflect
the change in estimate of investment income and return of capital, for the respective year.
See Note 2C to the financial statements for further disclosure. |
(4) | Not annualized
for periods less than one full year. |
(5) | Total investment
return is calculated assuming a purchase of common stock at the beginning of the period and
a sale at the closing price on the last day of the period reported (excluding brokerage commissions).
The calculation also assumes reinvestment of distributions at actual prices pursuant to TTP’s
dividend reinvestment plan. |
(6) | Annualized
for periods less than one full year. |
(7) | Represents
value of total assets less all liabilities and indebtedness not represented by senior notes,
credit facility borrowings and preferred stock at the end of the year divided by senior notes
and credit facility borrowings outstanding at the end of the period. |
(8) | Represents
value of total assets less all liabilities and indebtedness not represented by senior notes,
credit facility borrowings and preferred stock at the end of the year divided by senior notes,
credit facility borrowings and preferred stock outstanding at the end of the period. |
See
accompanying Notes to Financial Statements.
NDP Financial Highlights
| |
Six
Months Ended May 31,
2023 | | |
Year
Ended
November 30, 2022 | | |
Year
Ended
November 30, 2021 | | |
Year
Ended
November 30, 2020 | | |
Year
Ended
November 30, 2019 | | |
Year
Ended
November 30, 2018 | |
| |
(unaudited) | | |
| | |
| | |
| | |
| | |
| |
Per
Common Share Data(1)(2) | |
| | |
| | |
| | |
| | |
| | |
| |
Net Asset
Value, beginning of period | |
$ | 38.24 | | |
$ | 25.13 | | |
$ | 16.42 | | |
$ | 33.36 | | |
$ | 72.16 | | |
$ | 103.04 | |
Income
(Loss) from Investment Operations | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
investment income (loss)(3) | |
| 0.30 | | |
| 0.80 | | |
| 0.13 | | |
| — | | |
| (0.80 | ) | |
| (2.32 | ) |
Net
realized and unrealized gain (loss)(3) | |
| (5.75 | ) | |
| 14.39 | | |
| 9.20 | | |
| (16.14 | ) | |
| (29.36 | ) | |
| (14.56 | ) |
Total
income (loss) from investment operations | |
| (5.45 | ) | |
| 15.19 | | |
| 9.33 | | |
| (16.14 | ) | |
| (30.16 | ) | |
| (16.88 | ) |
Distributions
to Common Stockholders | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
From net investment
income | |
| — | | |
| (0.82 | ) | |
| (0.05 | ) | |
| — | | |
| — | | |
| — | |
From
return of capital | |
| (1.26 | ) | |
| (1.26 | ) | |
| (0.57 | ) | |
| (0.80 | ) | |
| (8.64 | ) | |
| (14.00 | ) |
Total
distributions to common stockholders | |
| (1.26 | ) | |
| (2.08 | ) | |
| (0.62 | ) | |
| (0.80 | ) | |
| (8.64 | ) | |
| (14.00 | ) |
Net
Asset Value, end of period | |
$ | 31.53 | | |
$ | 38.24 | | |
$ | 25.13 | | |
$ | 16.42 | | |
$ | 33.36 | | |
$ | 72.16 | |
Per common share market
value, end of period | |
$ | 27.08 | | |
$ | 32.41 | | |
$ | 22.24 | | |
$ | 12.63 | | |
$ | 29.04 | | |
$ | 72.00 | |
Total
investment return based on market value(4)(5) | |
| (12.74 | )% | |
| 55.70 | % | |
| 81.36 | % | |
| (54.88 | )% | |
| (52.35 | )% | |
| (15.10 | )% |
Supplemental Data and
Ratios | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
assets applicable to common stockholders, end of period (000’s) | |
$ | 55,288 | | |
$ | 67,067 | | |
$ | 46,398 | | |
$ | 30,307 | | |
$ | 61,550 | | |
$ | 132,488 | |
Average net assets
(000’s) | |
$ | 60,532 | | |
$ | 61,932 | | |
$ | 41,323 | | |
$ | 37,057 | | |
$ | 94,144 | | |
$ | 176,481 | |
Ratio
of Expenses to Average Net Assets(6) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Advisory fees | |
| 1.22 | % | |
| 1.16 | % | |
| 1.20 | % | |
| 1.40 | % | |
| 1.52 | % | |
| 1.50 | % |
Other
operating expenses | |
| 0.72 | | |
| 0.54 | | |
| 1.04 | | |
| 1.18 | | |
| 0.51 | | |
| 0.32 | |
Total
operating expenses, before fee waiver | |
| 1.94 | | |
| 1.70 | | |
| 2.24 | | |
| 2.58 | | |
| 2.03 | | |
| 1.82 | |
Fee
waiver | |
| (0.45 | ) | |
| (0.28 | ) | |
| (0.22 | ) | |
| — | | |
| — | | |
| — | |
Total operating expenses | |
| 1.49 | | |
| 1.42 | | |
| 2.02 | | |
| 2.58 | | |
| 2.03 | | |
| 1.82 | |
Leverage
expenses | |
| 0.68 | | |
| 0.18 | | |
| 0.16 | | |
| 0.66 | | |
| 1.30 | | |
| 0.99 | |
Total
expenses | |
| 2.17 | % | |
| 1.60 | % | |
| 2.18 | % | |
| 3.24 | % | |
| 3.33 | % | |
| 2.81 | % |
See accompanying Notes
to Financial Statements.
2023 Semi-Annual Report | May 31, 2023
| |
Six
Months Ended May 31, 2023 | | |
Year
Ended November 30, 2022 | | |
Year
Ended
November 30, 2021 | | |
Year
Ended
November 30, 2020 | | |
Year
Ended November 30, 2019 | | |
Year
Ended November 30, 2018 | |
| |
(unaudited) | | |
| | |
| | |
| | |
| | |
| |
Ratio
of net investment income (loss) to average net assets before fee waiver(6) | |
| 1.31 | % | |
| 2.09 | % | |
| 0.36 | % | |
| 0.03 | % | |
| (1.58 | )% | |
| (2.40 | )% |
Ratio
of net investment income (loss) to average net assets after fee waiver(6) | |
| 1.76 | % | |
| 2.37 | % | |
| 0.58 | % | |
| 0.03 | % | |
| (1.58 | )% | |
| (2.40 | )% |
Portfolio
turnover rate | |
| 0.36 | % | |
| 13.67 | % | |
| 53.15 | % | |
| 72.19 | % | |
| 182.52 | % | |
| 143.77 | % |
Credit
facility borrowings, end of period (000’s) | |
$ | 8,800 | | |
$ | 3,700 | | |
$ | 2,700 | | |
$ | 5,000 | | |
$ | 26,500 | | |
$ | 57,100 | |
Asset
coverage, per $1,000 of principal amount of credit facility borrowings(7) | |
$ | 7,283 | | |
$ | 19,126 | | |
$ | 18,185 | | |
$ | 7,061 | | |
$ | 3,323 | | |
$ | 3,320 | |
Asset
coverage ratio of credit facility borrowings(7) | |
| 728 | % | |
| 1,913 | % | |
| 1,818 | % | |
| 706 | % | |
| 332 | % | |
| 332 | % |
(1) | Information
presented relates to a share of common stock outstanding for the entire period. |
(2) | During
the year ended November 30, 2020, the Fund effected the following reverse stock split: May
1, 2020, 1 for 8. All historical per share information has been retroactively adjusted to
reflect this reverse stock split. |
(3) | The per
common share data for the years ended November 30, 2022, 2021, 2020, 2019, and 2018 do not
reflect the change in estimate of investment income and return of capital, for the respective
year. See Note 2C to the financial statements for further disclosure. |
(4) | Not annualized
for periods less than one full year. |
(5) | Total
investment return is calculated assuming a purchase of common stock at the beginning of the
period and a sale at the closing price on the last day of the period reported (excluding
brokerage commissions). The calculation also assumes reinvestment of distributions at actual
prices pursuant to NDP’s dividend reinvestment plan. |
(6) | Annualized
for periods less than one full year. |
(7) | Represents
value of total assets less all liabilities and indebtedness not represented by credit facility
borrowings at the end of the year divided by credit facility borrowings outstanding at the
end of the period. |
See accompanying Notes
to Financial Statements.
TPZ Financial Highlights
| |
Six
Months Ended May 31, 2023 | | |
Year
Ended November 30, 2022 | | |
Year
Ended November 30, 2021 | | |
Year
Ended November 30, 2020 | | |
Year
Ended November 30, 2019 | | |
Year
Ended November 30, 2018 | |
| |
(unaudited) | | |
| | |
| | |
| | |
| | |
| |
Per
Common Share Data(1) | |
| | |
| | |
| | |
| | |
| | |
| |
Net
Asset Value, beginning of period | |
$ | 15.85 | | |
$ | 15.09 | | |
$ | 13.01 | | |
$ | 17.70 | | |
$ | 19.76 | | |
$ | 21.33 | |
Income
(loss) from Investment Operations | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
investment income(2) | |
| 0.15 | | |
| 0.24 | | |
| 0.23 | | |
| 0.35 | | |
| 0.39 | | |
| 0.24 | |
Net
realized and unrealized gain (loss)(2) | |
| (0.40 | ) | |
| 1.69 | | |
| 2.49 | | |
| (3.99 | ) | |
| (0.95 | ) | |
| (0.31 | ) |
Total
income (loss) from investment operations | |
| (0.25 | ) | |
| 1.93 | | |
| 2.72 | | |
| (3.64 | ) | |
| (0.56 | ) | |
| (0.07 | ) |
Distributions
to Common Stockholders | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
From
net investment income | |
| — | | |
| (0.29 | ) | |
| (0.28 | ) | |
| (0.60 | ) | |
| (1.12 | ) | |
| (0.57 | ) |
From
net realized gains from investment transactions | |
| — | | |
| — | | |
| — | | |
| — | | |
| (0.28 | ) | |
| (0.93 | ) |
From
return of capital | |
| (0.63 | ) | |
| (0.88 | ) | |
| (0.36 | ) | |
| (0.45 | ) | |
| (0.10 | ) | |
| — | |
Total
distributions to common stockholders | |
| (0.63 | ) | |
| (1.17 | ) | |
| (0.64 | ) | |
| (1.05 | ) | |
| (1.50 | ) | |
| (1.50 | ) |
Net
Asset Value, end of period | |
$ | 14.97 | | |
$ | 15.85 | | |
$ | 15.09 | | |
$ | 13.01 | | |
$ | 17.70 | | |
$ | 19.76 | |
Per
common share market value, end of period | |
$ | 12.47 | | |
$ | 13.63 | | |
$ | 12.92 | | |
$ | 9.99 | | |
$ | 15.57 | | |
$ | 17.17 | |
Total
investment return based on market value(3)(4) | |
| (4.00 | )% | |
| 14.87 | % | |
| 35.99 | % | |
| (29.23 | )% | |
| (1.38 | )% | |
| (6.82 | )% |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Supplemental
Data and Ratios | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
assets applicable to common stockholders, end of period (000’s) | |
$ | 92,800 | | |
$ | 98,245 | | |
$ | 98,462 | | |
$ | 89,426 | | |
$ | 123,015 | | |
$ | 137,324 | |
Average
net assets (000’s) | |
$ | 95,609 | | |
$ | 101,421 | | |
$ | 100,853 | | |
$ | 93,027 | | |
$ | 137,701 | | |
$ | 147,616 | |
Ratio
of Expenses to Average Net Assets(5) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Advisory
fees | |
| 1.20 | % | |
| 1.18 | % | |
| 1.18 | % | |
| 1.28 | % | |
| 1.32 | % | |
| 1.29 | % |
Other
operating expenses | |
| 0.63 | | |
| 0.56 | | |
| 0.47 | | |
| 0.94 | | |
| 0.38 | | |
| 0.37 | |
Total
operating expenses, before fee waiver | |
| 1.83 | | |
| 1.74 | | |
| 1.65 | | |
| 2.22 | | |
| 1.70 | | |
| 1.66 | |
Fee
waiver | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Total
operating expenses | |
| 1.83 | | |
| 1.74 | | |
| 1.65 | | |
| 2.22 | | |
| 1.70 | | |
| 1.66 | |
Leverage
expenses | |
| 0.92 | | |
| 0.85 | | |
| 0.82 | | |
| 1.04 | | |
| 1.25 | | |
| 0.98 | |
Total
expenses | |
| 2.75 | % | |
| 2.59 | % | |
| 2.47 | % | |
| 3.26 | % | |
| 2.95 | % | |
| 2.64 | % |
See accompanying Notes
to Financial Statements.
2023
Semi-Annual Report | May 31, 2023
| |
Six Months
Ended May 31,
2023 | | |
Year Ended
November 30, 2022 | | |
Year Ended
November 30, 2021 | | |
Year Ended
November 30, 2020 | | |
Year Ended
November 30, 2019 | | |
Year Ended
November 30, 2018 | |
| |
(unaudited) | | |
| | |
| | |
| | |
| | |
| |
Ratio
of net investment income to average net assets before fee waiver(5) | |
| 2.01 | % | |
| 1.53 | % | |
| 1.48 | % | |
| 2.61 | % | |
| 1.98 | % | |
| 1.14 | % |
Ratio
of net investment income to average net assets after fee waiver(5) | |
| 2.01 | % | |
| 1.53 | % | |
| 1.48 | % | |
| 2.61 | % | |
| 1.98 | % | |
| 1.14 | % |
Portfolio turnover rate | |
| 4.05 | % | |
| 4.85 | % | |
| 26.70 | % | |
| 29.95 | % | |
| 25.27 | % | |
| 31.41 | % |
Credit facility borrowings, end of period
(000’s) | |
$ | 25,300 | | |
$ | 25,900 | | |
$ | 24,000 | | |
$ | 26,200 | | |
$ | 54,100 | | |
$ | 53,400 | |
Asset
coverage, per $1,000 of principal amount of senior notes and credit facility borrowings(6) | |
$ | 4,668 | | |
$ | 4,793 | | |
$ | 5,103 | | |
$ | 4,413 | | |
$ | 3,274 | | |
$ | 3,572 | |
Asset
coverage ratio of senior notes and credit facility borrowings(6) | |
| 467 | % | |
| 479 | % | |
| 510 | % | |
| 441 | % | |
| 327 | % | |
| 357 | % |
| (1) | Information
presented relates to a share of common stock outstanding for the entire period. |
| (2) | The
per common share data for the years ended November 30, 2022, 2021, 2020, 2019, and 2018 do
not reflect the change in estimate of investment income and return of capital, for the respective
year. See Note 2C to the financial statements for further disclosure. |
| (3) | Not
annualized for periods less than one full year. |
| (4) | Total
investment return is calculated assuming a purchase of common stock at the beginning of the
year and a sale at the closing price on the last day of the year reported (excluding brokerage
commissions). The calculation also assumes reinvestment of distributions at actual prices
pursuant to TPZ’s dividend reinvestment plan. |
| (5) | Annualized
for periods less than one full year. |
| (6) | Represents
value of total assets less all liabilities and indebtedness not represented by credit facility
borrowings at the end of the preiod divided by credit facility borrowings outstanding at
the end of the year. |
See
accompanying Notes to Financial Statements.
TEAF Financial
Highlights
| |
Six Months
Ended May 31,
2023 | | |
Year Ended
November 30, 2022 | | |
Year Ended
November 30,
2021 | | |
Year Ended
November 30,
2020 | | |
Period From
March 29, 2019(1)
through November 30, 2019 | |
| |
(unaudited) | | |
| | |
| | |
| | |
| |
Per
Common Share Data(2) | |
| | | |
| | | |
| | | |
| | | |
| | |
Net Asset Value, beginning of
period | |
$ | 16.37 | | |
$ | 17.15 | | |
$ | 15.85 | | |
$ | 17.60 | | |
$ | 20.00 | |
Income (loss) from Investment
Operations | |
| | | |
| | | |
| | | |
| | | |
| | |
Net investment income | |
| 0.16 | | |
| 0.44 | | |
| 0.54 | | |
| 0.51 | | |
| 0.31 | |
Net
realized and unrealized gain (loss) | |
| (0.42 | ) | |
| (0.17 | ) | |
| 1.66 | | |
| (1.16 | ) | |
| (1.95 | ) |
Total
income (loss) from investment operations | |
| (0.26 | ) | |
| 0.27 | | |
| 2.20 | | |
| (0.65 | ) | |
| (1.64 | ) |
Distributions to Common
Stockholders | |
| | | |
| | | |
| | | |
| | | |
| | |
From net investment income | |
| (0.15 | ) | |
| (0.46 | ) | |
| (0.64 | ) | |
| (0.46 | ) | |
| (0.34 | ) |
From
return of capital | |
| (0.39 | ) | |
| (0.59 | ) | |
| (0.26 | ) | |
| (0.64 | ) | |
| (0.42 | ) |
Total
distributions to common stockholders | |
| (0.54 | ) | |
| (1.05 | ) | |
| (0.90 | ) | |
| (1.10 | ) | |
| (0.76 | ) |
Net Asset Value, end
of period | |
$ | 15.57 | | |
$ | 16.37 | | |
$ | 17.15 | | |
$ | 15.85 | | |
$ | 17.60 | |
Per common share market value, end of period | |
$ | 12.28 | | |
$ | 13.85 | | |
$ | 14.64 | | |
$ | 13.04 | | |
$ | 15.60 | |
Total
investment return based on market value(3)(4) | |
| (7.57 | )% | |
| 1.74 | % | |
| 19.50 | % | |
| (8.66 | )% | |
| (18.45 | )% |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Supplemental Data and Ratios | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
assets applicable to common stockholders, end of period (000’s) | |
$ | 210,062 | | |
$ | 220,798 | | |
$ | 231,382 | | |
$ | 213,825 | | |
$ | 237,461 | |
Average net assets (000’s) | |
$ | 216,361 | | |
$ | 225,912 | | |
$ | 228,533 | | |
$ | 210,055 | | |
$ | 252,217 | |
Ratio
of Expenses to Average Net Assets(5) | |
| | | |
| | | |
| | | |
| | | |
| | |
Advisory fees | |
| 1.54 | % | |
| 1.51 | % | |
| 1.53 | % | |
| 1.55 | % | |
| 1.51 | % |
Other
operating expenses | |
| 0.31 | | |
| 0.38 | | |
| 0.33 | | |
| 0.37 | | |
| 0.81 | |
Total
operating expenses, before fee waiver | |
| 1.85 | | |
| 1.89 | | |
| 1.86 | | |
| 1.92 | | |
| 2.32 | |
Fee
waiver | |
| — | | |
| — | | |
| — | | |
| (0.10 | ) | |
| (0.28 | ) |
Total operating expenses | |
| 1.85 | | |
| 1.89 | | |
| 1.86 | | |
| 1.82 | | |
| 2.04 | |
Leverage expenses | |
| 0.79 | | |
| 0.31 | | |
| 0.13 | | |
| 0.23 | | |
| 0.36 | |
Income
tax expense (benefit)(6) | |
| 0.02 | | |
| (0.03 | ) | |
| (0.03 | ) | |
| 0.28 | | |
| (0.24 | ) |
Total
expenses | |
| 2.66 | % | |
| 2.17 | % | |
| 1.96 | % | |
| 2.33 | % | |
| 2.16 | % |
See accompanying
Notes to Financial Statements.
2023
Semi-Annual Report | May 31, 2023
| |
Six Months
Ended May 31, 2023 | | |
Year Ended
November 30, 2022 | | |
Year Ended
November 30, 2021 | | |
Year Ended
November 30, 2020 | | |
Period From
March 29, 2019(1) through November 30, 2019 | |
| |
| (unaudited) | | |
| | | |
| | | |
| | | |
| | |
Ratio
of net investment income to average net assets before fee waiver(5) | |
| 1.97 | % | |
| 2.62 | % | |
| 3.20 | % | |
| 3.16 | % | |
| 2.15 | % |
Ratio
of net investment income to average net assets after fee waiver(5) | |
| 1.97 | % | |
| 2.62 | % | |
| 3.20 | % | |
| 3.26 | % | |
| 2.43 | % |
Portfolio turnover rate | |
| 16.51 | % | |
| 18.08 | % | |
| 68.31 | % | |
| 73.22 | % | |
| 50.44 | % |
Credit facility borrowings, end of period (000’s) | |
$ | 29,500 | | |
$ | 29,500 | | |
$ | 21,600 | | |
$ | 31,100 | | |
$ | 32,000 | |
Asset
coverage, per $1,000 of principal amount of senior notes and credit facility borrowings(7) | |
$ | 8,121 | | |
$ | 8,490 | | |
$ | 11,712 | | |
$ | 7,875 | | |
$ | 8,421 | |
Asset
coverage ratio of senior notes and credit facility borrowings(7) | |
| 812 | % | |
| 849 | % | |
| 1,171 | % | |
| 788 | % | |
| 842 | % |
(1) | Commencement
of operations. |
(2) | Information
presented relates to a share of common stock outstanding for the entire period. |
(3) | Not
annualized for period less than one year. |
(4) | Total
investment return is calculated assuming a purchase of common stock at the beginning of the
period and a sale at the closing price on the last day of the period reported (excluding
brokerage commissions). The calculation also assumes reinvestment of distributions at actual
prices pursuant to TEAF’s dividend reinvestment plan. |
(5) | Annualized
for period less than one year. |
(6) | For
the period December 1, 2022 through May 31, 2023, TEAF accrued $20,576 for net deferred income
tax expense. For the year ended November 30, 2022 TEAF accrued $57,377 for net deferred income
tax benefit. For the year ended November 31, 2021, TEAF accrued $67,015 for net deferred
income tax expense. For the year ended November 30, 2020, TEAF accrued $594,668 for net deferred
income tax expense. For the period ended November 30, 2019, TEAF accrued $418,970 for net
deferred income tax benefit. |
| (7) | Represents
value of total assets less all liabilities and indebtedness not represented by margin facility
borrowings at the end of the period divided by margin facility borrowings outstanding at
the end of the period. |
See accompanying
Notes to Financial Statements.
Notes
to Financial Statements (unaudited)
May 31, 2023
1. General
Organization
This
report covers the following companies, each of which is listed on the New York Stock Exchange (“NYSE”): Tortoise Energy
Infrastructure Corp. (“TYG”), Tortoise Midstream Energy Fund, Inc. (“NTG”), Tortoise Pipeline & Energy
Fund, Inc. (“TTP”), Tortoise Energy Independence Fund, Inc. (“NDP”), Tortoise Power and Energy
Infrastructure Fund, Inc. (“TPZ”), and Ecofin Sustainable and Social Impact Term Fund (“TEAF”). These
companies are individually referred to as a “Fund” or by their respective NYSE symbols, or collectively as the
“Funds”, and each is a non-diversified, closed-end management investment company under the Investment Company Act
of 1940, as amended (the “1940 Act”). Each of TYG, NTG, TTP, NDP and TEAF has a primary investment objective to seek a
high level of total return with an emphasis on current distributions. TPZ has a primary investment objective to provide a high level
of current income, with a secondary objective of capital appreciation.
2. Significant
Accounting Policies
The Funds
follow accounting and reporting guidance applicable to investment companies under U.S. generally accepted accounting principles
(“GAAP”).
A. Use of
Estimates
The preparation
of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount
of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the amount
of income and expenses during the period reported. Actual results could differ from those estimates.
B. Security
Valuation
In general,
and where applicable, the Funds use readily available market quotations based upon the last updated sales price from the principal market
to determine fair value. The Funds primarily own securities that are listed on a securities exchange or are traded in the over-the-counter
market. The Funds value 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 Funds use the price from the exchange that it considers to be the principal
exchange on which the security is traded. 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. Securities listed on the NASDAQ are valued at the NASDAQ
Official Closing Price, which may not necessarily represent the last sale price. These securities are categorized as Level 1 in the fair
value hierarchy.
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 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 a Fund’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.
Unobservable
inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which
there is little, if any, market activity. Unobservable inputs reflect the Funds’ own beliefs about the assumptions that market
participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based
on the best information available in the circumstances, which might include the Fund’s own data. The Fund’s own data are
adjusted if information is reasonably available without undue cost and effort that indicates that market participants would use different
assumptions. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values
that would have been used had an active market existed.
Options
(including options on futures contracts) and futures contracts are valued using readily available market quotations. Exchange-traded
options are valued at the last reported sale price on any exchange on which they trade. If there are no sales reported on any
exchange, exchange-traded options shall be valued at the mean between the last highest bid and last lowest asked prices obtained as
of the closing of the exchanges on which the option is traded. Exchange-traded domestic futures contracts are valued at the last
reported sale price on the Chicago Mercantile Exchange. Exchange-traded foreign futures contracts are valued at the last reported
sale price on the primary foreign exchange on which they principally trade. The value of Flexible Exchange Options (FLEX Options)
are determined (i) by an evaluated price as determined by a third-party valuation service; or (ii) by using a quotation provided
by a broker-dealer.
2023
Semi-Annual Report | May 31, 2023
Notes
to Financial Statements (unaudited)
(continued)
The Funds generally
value debt securities at evaluated prices obtained from an independent third-party valuation 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 at time of purchase are valued on the basis of amortized
cost, which approximates fair value. The securities are categorized as level 2 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, and are categorized as Level 2 in the fair value hierarchy.
Various inputs
are used in determining the fair value of the Funds’ 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 a Fund’s own assumptions in determining the fair value of investments)
The inputs
or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The
following tables provide the fair value measurements of applicable assets and liabilities by level within the fair value hierarchy
as of May 31, 2023. These assets and liabilities are measured on a recurring basis.
TYG: |
Description | |
Level
1 | | |
Level
2 | | |
Level
3 | | |
Total | |
Assets | |
| | | |
| | | |
| | | |
| | |
Investments: | |
| | | |
| | | |
| | | |
| | |
Common Stock(a) | |
$ | 385,056,804 | | |
$ | — | | |
$ | — | | |
$ | 385,056,804 | |
Master Limited Partnerships(a) | |
| 94,456,804 | | |
| — | | |
| — | | |
| 94,456,804 | |
Private Investment(a) | |
| — | | |
| — | | |
| 14,712,980 | | |
| 14,712,980 | |
Preferred Stock(a) | |
| 3,506,459 | | |
| 4,216,935 | | |
| — | | |
| 7,723,394 | |
Short-Term Investment(b) | |
| 271,050 | | |
| — | | |
| — | | |
| 271,050 | |
Total Assets | |
$ | 483,291,117 | | |
$ | 4,216,935 | | |
$ | 14,712,980 | | |
$ | 502,221,032 | |
| |
| | | |
| | | |
| | | |
| | |
NTG: |
Description | |
| Level
1 | | |
| Level
2 | | |
| Level
3 | | |
| Total | |
Assets | |
| | | |
| | | |
| | | |
| | |
Investments: | |
| | | |
| | | |
| | | |
| | |
Common Stock(a) | |
$ | 206,777,355 | | |
$ | — | | |
$ | — | | |
$ | 206,777,355 | |
Master Limited Partnerships(a) | |
| 48,833,708 | | |
| — | | |
| — | | |
| 48,833,708 | |
Preferred Stock(a) | |
| 1,903,536 | | |
| 2,811,290 | | |
| — | | |
| 4,714,826 | |
Short-Term Investment(b) | |
| 233,888 | | |
| — | | |
| — | | |
| 233,888 | |
Total Assets | |
$ | 257,748,487 | | |
$ | 2,811,290 | | |
$ | — | | |
$ | 260,559,777 | |
| |
| | | |
| | | |
| | | |
| | |
TTP: |
Description | |
| Level
1 | | |
| Level
2 | | |
| Level
3 | | |
| Total | |
Assets | |
| | | |
| | | |
| | | |
| | |
Investments: | |
| | | |
| | | |
| | | |
| | |
Common Stock(a) | |
$ | 63,050,812 | | |
$ | — | | |
$ | — | | |
$ | 63,050,812 | |
Master Limited Partnerships(a) | |
| 17,928,723 | | |
| — | | |
| — | | |
| 17,928,723 | |
Short-Term Investment(b) | |
| 312,166 | | |
| — | | |
| — | | |
| 312,166 | |
Total Assets | |
$ | 81,291,701 | | |
$ | — | | |
$ | — | | |
$ | 81,291,701 | |
| |
| | | |
| | | |
| | | |
| | |
NDP: |
Description | |
| Level
1 | | |
| Level
2 | | |
| Level
3 | | |
| Total | |
Assets | |
| | | |
| | | |
| | | |
| | |
Investments: | |
| | | |
| | | |
| | | |
| | |
Common Stock(a) | |
$ | 50,141,123 | | |
$ | — | | |
$ | — | | |
$ | 50,141,123 | |
Master Limited Partnerships(a) | |
| 13,604,376 | | |
| — | | |
| — | | |
| 13,604,376 | |
Short-Term Investment(b) | |
| 353,399 | | |
| — | | |
| — | | |
| 353,399 | |
Total Assets | |
$ | 64,098,898 | | |
$ | — | | |
$ | — | | |
$ | 64,098,898 | |
Notes
to Financial Statements (unaudited)
(continued)
TPZ: |
Description | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total | |
Assets | |
| | | |
| | | |
| | | |
| | |
Investments: | |
| | | |
| | | |
| | | |
| | |
Corporate
Bonds(a) | |
$ | — | | |
$ | 56,762,422 | | |
$ | — | | |
$ | 56,762,422 | |
Common
Stock(a) | |
| 32,166,723 | | |
| — | | |
| — | | |
| 32,166,723 | |
Master
Limited Partnerships(a) | |
| 28,155,854 | | |
| — | | |
| — | | |
| 28,155,854 | |
Short-Term
Investment(b) | |
| 325,396 | | |
| — | | |
| — | | |
| 325,396 | |
Total Assets | |
$ | 60,647,973 | | |
$ | 56,762,422 | | |
$ | — | | |
$ | 117,410,395 | |
| |
| | | |
| | | |
| | | |
| | |
TEAF: |
Description | |
| Level 1 | | |
| Level 2 | | |
| Level 3 | | |
| Total | |
Assets | |
| | | |
| | | |
| | | |
| | |
Investments: | |
| | | |
| | | |
| | | |
| | |
Common
Stock(a) | |
$ | 98,830,344 | | |
$ | 2,658,892 | | |
$ | — | | |
$ | 101,489,236 | |
Private
Investments(a) | |
| — | | |
| — | | |
| 55,089,031 | | |
| 55,089,031 | |
Corporate
Bonds(a) | |
| — | | |
| 32,152,560 | | |
| 2,032,000 | | |
| 34,184,560 | |
Master
Limited Partnerships(a) | |
| 15,376,920 | | |
| — | | |
| — | | |
| 15,376,920 | |
Private
Notes(a) | |
| — | | |
| — | | |
| 13,525,062 | | |
| 13,525,062 | |
Municipal
Bonds(a) | |
| — | | |
| 13,399,266 | | |
| — | | |
| 13,399,266 | |
Preferred
Stock(a) | |
| — | | |
| — | | |
| 4,697,100 | | |
| 4,697,100 | |
Bank
Loan(a) | |
| — | | |
| 522,880 | | |
| — | | |
| 522,880 | |
Special
Purpose Acquisition Company Warrant(a) | |
| — | | |
| 120,251 | | |
| — | | |
| 120,251 | |
Short-Term
Investment(b) | |
| 332,350 | | |
| — | | |
| — | | |
| 332,350 | |
Total Assets | |
$ | 114,539,614 | | |
$ | 48,853,849 | | |
$ | 75,343,193 | | |
$ | 238,736,656 | |
(a) All other
industry classifications are identified in the Schedule of Investments.
(b) Short-term
investment is a sweep investment for cash balances.
The following
tables present each Fund’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for
the year ended May 31, 2023:
Preferred Stock | |
TYG | | |
NTG | | |
TTP | | |
NDP | | |
TPZ | | |
TEAF | |
Balance — beginning of period | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 4,582,050 | |
Purchases | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Return of capital | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Sales | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Total realized gain/loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Change in unrealized gain/loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 115,050 | |
Balance — end of period | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 4,697,100 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Private Investments | |
| TYG | | |
| NTG | | |
| TTP | | |
| NDP | | |
| TPZ | | |
| TEAF | |
Balance — beginning of period | |
$ | 15,024,741 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 45,276,563 | |
Purchases | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 9,299,068 | |
Return of capital | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (450,000 | ) |
Sales | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Total realized gain/loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Change in unrealized gain/loss | |
| (311,761 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| 963,400 | |
Balance — end of period | |
$ | 14,712,980 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 55,089,031 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Corporate Bonds | |
| TYG | | |
| NTG | | |
| TTP | | |
| NDP | | |
| TPZ | | |
| TEAF | |
Balance — beginning of period | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
Purchases | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 2,032,000 | |
Return of capital | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Sales | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Total realized gain/loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Change in unrealized gain/loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Balance — end of period | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 2,032,000 | |
2023
Semi-Annual Report | May 31, 2023
Notes
to Financial Statements (unaudited)
(continued)
Private Notes | |
TYG | | |
NTG | | |
TTP | | |
NDP | | |
TPZ | | |
TEAF | |
Balance — beginning of period | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 11,143,672 | |
Purchases | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 2,331,112 | |
Return of capital | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Sales | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Total realized gain/loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Change in unrealized gain/loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 50,278 | |
Balance — end of period | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 13,525,062 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| TYG | | |
| NTG | | |
| TTP | | |
| NDP | | |
| TPZ | | |
| TEAF | |
Change in unrealized gain/loss on investments still held at May 31, 2023 | |
$ | (311,761 | ) | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 1,128,728 | |
TEAF owns units
of preferred stock of Enterprise Products Partners L.P. (“EPD Pfd”) that were issued in a transaction that closed on September
30, 2020. The preferred stock carries a conversion option into common stock after the 5th anniversary of the Closing Date (September
30, 2025) with a conversion rate determined as the quotient equal to 100% of the Stated Series A Liquidation Preference plus accrued
and unpaid distributions up to the applicable conversion date, divided by a 7.50% discount to the prior 5-Day VWAP of EPD’s common
unit price. The issuer has an option to force conversion before the 2nd anniversary at 110%, after the 2nd anniversary and prior to the
4th anniversary at 107%, thereafter, prior to the 5th anniversary at 103%, thereafter, prior to the 6th anniversary at 101% and any time
on or after the 6th anniversary at par. A discounted cash flow model prepared by an independent third party is being used to determine
fair value of the EPD Pfd security. Unobservable inputs used to determine the discount rate include a debt discount rate that generally
reflects the credit worthiness of the company. An increase (decrease) in the debt discount rate would lead to a corresponding decrease
(increase) in fair value of the preferred stock.
TEAF owns
units of preferred stock of One Energy Enterprises Inc. (“One Energy Pfd”) that were issued in a transaction that closed
on April 12, 2023. One Energy Enterprises Inc. is a private company. The preferred stock carries a conversion option into common
stock on and after the earlier to occur of (i) the closing of a DeSPAC, (ii) the consummation of an IPO or (iii) the effectiveness
of a direct listing in which the Common Stock becomes listed on a national securities exchange (such date the “Initial
Liquidity Date”). A discounted cash flow model prepared by an independent third party is being used to determine fair value of
the One Energy Pfd security. Unobservable inputs used to determine the discount rate include a debt discount rate that generally
reflects the credit worthiness of the company. An increase (decrease) in the debt discount rate would lead to a corresponding
decrease (increase) in fair value of the preferred stock.
TEAF owns units
of Mexico Pacific Limited LLC (“MPL”), which was issued in a private transaction that closed on October 23, 2019. As of May
31, 2023, the investment in MPL was valued at the most recent transaction price, which was a capital raise that closed on September 30,
2021, as the company is still in development with no day to day operations.
TEAF owns a
construction note in Saturn Solar Bermuda 1, Ltd (“Saturn”). Under the terms of the note, Saturn pays interest monthly at
an annual rate of 10%. A discounted cash flows model is being utilized to determine fair value of the construction note. Unobservable
inputs used to determine the discount rate include a risk spread based on similar projects and an illiquidity spread due to the note
being issued in the private market. An increase (decrease) in the risk spread or illiquidity spread would lead to a corresponding decrease
(increase) in fair value of the note.
TEAF owns a
note in EF WWW Holdings, LLC, for debt funding of World Water Works Holdings, Inc. Under the terms of the note, EF WWW Holdings pays
interest monthly at an annual rate of 10.50%. A discounted cash flows model is being utilized to determine fair value of the construction
note. Unobservable inputs used to determine the discount rate include a risk spread based on similar projects and an illiquidity spread
due to the note being issued in the private market. An increase (decrease) in the risk spread or illiquidity spread would lead to a corresponding
decrease (increase) in fair value of the note.
TYG wholly-owns
private investments in TK NYS Solar Holdco, LLC and TEAF wholly-owns private investments in Renewable Holdco, LLC, Renewable Holdco I,
LLC, and Renewable Holdco II, LLC. Discounted cash flow models are being utilized to determine the fair value of these holdings. Unobservable
inputs used within the discounted cash flow models include weighted average cost of capital. An increase (decrease) in the weighted average
cost of capital would lead to a corresponding decrease (increase) in the fair value of the private investment.
TEAF owns a
privately placed bond in Ativo Albuquerque LLC. Under the terms of the bond, Ativo Albuquerque LLC pays monthly interest at an annual
rate of 10.50%. As of May 31, 2023, the bond was valued at the most recent transaction price.
Notes
to Financial Statements (unaudited) (continued)
The following
tables summarize the fair value and significant unobservable inputs that each Fund used to value its portfolio investments categorized
as Level 3 as of May 31, 2023:
Assets at Fair Value | |
TYG | | |
NTG | | |
TTP | | |
NDP | | |
TPZ | | |
TEAF | |
Private Notes | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 13,525,062 | |
Corporate Bonds | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 2,032,000 | |
Preferred Stock | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 4,697,100 | |
Private Investments | |
$ | 14,712,980 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 55,089,031 | |
Assets at Fair Value | |
Valuation Technique | |
Unobservable Inputs | |
Input | |
Preferred Stock (EPD Pfd) | |
Lattice model | |
Debt discount rate | |
| 7.15 | % |
Private Investment (One Energy Pfd) | |
Lattice model | |
Debt discount rate | |
| 27.8 | % |
Private Investment (TK NYS Solar Holdco, LLC) | |
Discounted cash flow model | |
Post-contracted weighted average cost of capital | |
| 8.75 | % |
Private Investment (TK NYS Solar Holdco, LLC) | |
Discounted cash flow model | |
Contracted weighted average cost of capital | |
| 7.25 | % |
Private Investment (Mexico Pacific Limited) | |
Recent transaction | |
Purchase price | |
$ | 21.94 | |
Private Investment (Renewable Holdco, LLC) | |
Recent transaction | |
Purchase price | |
$ | 6,387,342 | |
Private Investment (Renewable Holdco I, LLC) | |
Discounted cash flow model | |
Contracted weighted average cost of capital | |
| 7.25 | % |
Private Investment (Renewable Holdco I, LLC) | |
Discounted cash flow model | |
Post-contracted weighted average cost of capital | |
| 8.75 | % |
Private Investment (Renewable Holdco II, LLC) | |
Discounted cash flow model | |
Contracted weighted average cost of capital | |
| 6.25 | % |
Private Investment (Renewable Holdco II, LLC) | |
Discounted cash flow model | |
Post-contracted weighted average cost of capital | |
| 7.75 | % |
Saturn Bermuda Note | |
Discounted cash flow model | |
Risk spread | |
| 1.7500 | % |
Saturn Bermuda Note | |
Discounted cash flow model | |
Illiquidity spread | |
| 1.7255 | % |
EF WWW Holdings Note | |
Discounted cash flow model | |
Risk spread | |
| 3.0000 | % |
EF WWW Holdings Note | |
Discounted cash flow model | |
Illiquidity spread | |
| 2.6482 | % |
Ativo Albuquerque LLC Corporate Bond | |
Recent Transaction | |
Purchase price | |
$ | 100.00 | |
C. Securities
Transactions and Investment Income
Securities
transactions are accounted for on the date the securities are purchased or sold (trade date). Realized gains and losses are reported
on an identified cost basis. Interest income is recognized on the accrual basis, including amortization of premiums and accretion of
discounts. Discounts and premiums on fixed income securities are amortized or accreted over the life of the respective securities using
the effective interest method. Dividend income and distributions are recorded on the ex-dividend date. Distributions received from investments
generally are comprised of ordinary income and return of capital. The Funds estimate the allocation of distributions between investment
income and return of capital at the time such distributions are received based on historical information or regulatory filings. These
estimates may subsequently be revised based on actual allocations received from the portfolio companies after their tax reporting periods
are concluded, as the actual character of these distributions is not known until after the fiscal year-end of the Funds.
Subsequent
to November 30, 2022, the Funds reallocated the amount of return of capital recognized for the period from December 1, 2021 through November
30, 2022 based on the 2022 tax reporting information received. The impact of this reclass is as follows:
| |
Estimated Return
of Capital % | | |
Revised Return
of Capital % | | |
Increase/(Decrease)
in Return of Capital | |
TYG | |
| 61% | | |
| 61% | | |
|
$ | 24,899 | |
NTG | |
| 62% | | |
| 64% | | |
|
$ | 174,107 | |
TTP | |
| 59% | | |
| 57% | | |
|
$ | (102,509) | |
NDP | |
| 24% | | |
| 23% | | |
|
$ | (38,098) | |
TPZ | |
| 79% | | |
| 77% | | |
|
$ | (103,984) | |
TEAF | |
| 41% | | |
| 39% | | |
|
$ | (149,179) | |
In addition,
the Funds may be subject to withholding taxes on foreign-sourced income. The Funds accrue such taxes when the related income is earned
in accordance with the Funds’ understanding of the applicable country’s tax rules and rates.
D. Foreign
Currency Translation
For foreign
currency, investments in foreign securities, and other assets and liabilities denominated in a foreign currency, the Funds translate
these amounts into U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the current
rate of exchange on the valuation date, and (ii) purchases and sales of investment securities, income and expenses at the relevant rates
of exchange on the respective dates of such transactions. The Funds do not isolate the portion of gains and losses on investments that
is due to changes in the foreign exchange rates from that which is due to changes in market prices of securities.
E. Federal
and State Income Taxation
Each of TYG
and NTG, was previously taxed as a C corporation and, as such, was obligated to pay federal and state income tax on its taxable income.
Beginning with the fiscal year ending November 30, 2023, TYG and NTG each intend to qualify for special tax treatment afforded to a regulated
investment company (“RIC”) under Subchapter M of the Internal Revenue Code (“IRC”). As RICs, TYG and NTG must
satisfy income,
2023
Semi-Annual Report | May 31, 2023
Notes
to Financial Statements (unaudited)
(continued)
asset diversification
and minimum distribution requirements. As long as each so qualifies, TYG and NTG will not be subject to U.S. federal income tax. TYG
and NTG intend to distribute at least annually substantially all of its income and gains. Undistributed income and gains are subject
to a 4% U.S. federal excise tax unless sufficient distributions have been made to satisfy the excise tax avoidance requirement.
TTP, NDP, TPZ
and TEAF each qualify as a regulated investment company (“RIC”) under the Internal Revenue Code (“IRC”). As a
result, TTP, NDP, TPZ and TEAF generally will not be subject to U.S. federal income tax on income and gains that they distribute each
taxable year to stockholders if they meet certain minimum distribution requirements. However, TEAF’s taxable subsidiary, created
to hold certain investments is generally subject to federal and state income taxes on its income. RICs are required to distribute substantially
all of their income, in addition to meeting certain asset diversification requirements, and are subject to a 4% non-deductible U.S. federal
excise tax on certain undistributed income unless the fund makes sufficient distributions to satisfy the excise tax avoidance requirement.
The Funds
recognize the tax benefits of uncertain tax positions only when the position is “more likely than not” to be sustained
upon examination by the tax authorities based on the technical merits of the tax position. The Funds’ policy is to record
interest and penalties on uncertain tax positions as part of tax expense.
As of May 31,
2023, TYG and NTG had no uncertain tax positions and no accrued penalties or interest. As a result of each Fund’s intention to
not complete the conversion from a corporation to a RIC for the fiscal year ending November 30, 2022, each Fund’s previously recognized
liability for uncertain tax positions was derecognized in February 2023. The Statement of Operations includes the reversal of the liability
for the period. Consistent with the Fund’s policy, TYG and NTG recognize accrued penalties and interest related to uncertain tax
positions as part of current tax expense. Penalties and interest for TYG and NTG accrued and subsequently derecognized during the period were $529,931
and $227,909, respectively.
| |
TYG | | |
NTG | |
Balance at December 1, 2022 | |
$ | 24,561,306 | | |
$ | 10,563,189 | |
Additions based on tax positions related to FYE 11/30/2021 | |
$ | 529,931 | | |
$ | 227,909 | |
Decrease based on tax positions related to FYE 11/30/2021 | |
$ | (25,091,237 | ) | |
$ | (10,791,098 | ) |
Balance at May 31, 2023 | |
$ | — | | |
$ | — | |
As of May 31,
2023, TTP, NDP, TPZ and TEAF had no uncertain tax positions, and no penalties or interest was accrued. The Funds do not expect any change
in their unrecognized tax positions in the next twelve months. The tax years ended on the following dates remain open to examination
by federal and state tax authorities:
TYG, NTG, TTP,
NDP, TPZ and TEAF – November 30, 2019 through 2022
F. Distributions
to Stockholders
Distributions
to common stockholders are recorded on the ex-dividend date. The Funds may not declare or pay distributions to its common stockholders
if it does not meet asset coverage ratios required under the 1940 Act or the rating agency guidelines for its debt and preferred stock
following such distribution. The amount of any distributions will be determined by the Board of Directors. The character of distributions
to common stockholders made during the year may differ from their ultimate characterization for federal income tax purposes.
With the intent
to qualify as a RIC, TYG and NTG each intend to make cash distributions of its investment company taxable income and capital gains to
common shareholders. As RICs, TTP, NDP, TPZ and TEAF each intend to make cash distributions of its investment company taxable income
and capital gains to common stockholders. In addition, on an annual basis, TYG, NTG, TTP, NDP, TPZ and TEAF each may distribute additional
capital gains in the last calendar quarter if necessary to meet minimum distribution requirements and thus avoid being subject to excise
taxes. Distributions paid to stockholders in excess of investment company taxable income and net realized gains will be treated as return
of capital to stockholders.
Distributions
to mandatory redeemable preferred (“MRP”) stockholders are accrued daily based on applicable distribution rates for each
series and paid periodically according to the terms of the agreements. The Funds may not declare or pay distributions to its preferred
stockholders if it does not meet a 200% asset coverage ratio for its debt or the rating agency basic maintenance amount for the debt
following such distribution. The character of distributions to preferred stockholders made during the year may differ from their ultimate
characterization for federal income tax purposes.
Distributions
to stockholders for the year ended November 30, 2022 were characterized as follows:
| |
TYG | | |
NTG | | |
TTP | | |
NDP | | |
TPZ | | |
TEAF | |
| |
Common | | |
Preferred | | |
Common | | |
Preferred | | |
Common | | |
Preferred | | |
Common | | |
Common | | |
Common | |
Qualified dividend income | |
| — | | |
| 17% | | |
| — | | |
| 26% | | |
| 21% | | |
| 100% | | |
| 40% | | |
| 12% | | |
| 32% | |
Ordinary dividend income | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 13% | | |
| 12% | |
Return of capital | |
| 100% | | |
| 83% | | |
| 100% | | |
| 74% | | |
| 79% | | |
| 0% | | |
| 60% | | |
| 75% | | |
| 56% | |
Long-term capital gain | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
* For Federal
income tax purposes, distributions of short-term capital gains are included in qualified dividend income.
Notes
to Financial Statements (unaudited)
(continued)
G. Offering
and Debt Issuance Costs
Offering costs
related to the issuance of common stock are charged to additional paid-in capital when the stock is issued. Debt issuance costs related
to senior notes and MRP Stock are deferred and amortized over the period the debt or MRP Stock is outstanding.
There were
no offering or debt issuance costs recorded during the period December 1, 2022 through May 31, 2023 for TYG, NTG, TTP, NDP, TPZ or
TEAF.
H. Derivative
Financial Instruments
The Funds
have established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial
instrument activities. The Funds do not hold or issue derivative financial instruments for speculative purposes. All derivative
financial instruments are recorded at fair value with changes in fair value during the reporting period, and amounts accrued under
the agreements, included as unrealized gains or losses in the accompanying Statements of Operations. Derivative instruments that are
subject to an enforceable master netting arrangement allow a Fund and the counterparty to the instrument to offset any exposure to
the other party with amounts owed to the other party. The fair value of derivative financial instruments in a loss position are
offset against the fair value of derivative financial instruments in a gain position, with the net fair value appropriately
reflected as an asset or liability within the accompanying Statements of Assets & Liabilities.
TYG, NTG,
TTP, NDP and TEAF may seek to provide current income from gains earned through an option strategy that normally consists of writing
(selling) call options on selected equity securities held in the portfolio (“covered calls”). The premium received on a
written call option is initially recorded as a liability and subsequently adjusted to the then current fair value of the option
written. Premiums received from writing call options that expire unexercised are recorded as a realized gain on the expiration date.
Premiums received from writing call options that are exercised are added to the proceeds from the sale of the underlying
security to calculate the realized gain (loss). If a written call option is repurchased prior to its exercise, the realized gain
(loss) is the difference between the premium received and the amount paid to repurchase the option.
TEAF may
enter into forward currency contracts, which represent agreements to exchange currencies on specific future dates at predetermined
rates. TEAF uses forward currency contracts to manage exposure to changes in exchange rates. On a daily basis, TEAF’s
investment adviser values forward currency contracts and records unrealized appreciation or depreciation for open forward currency
contracts in the Statements of Assets & Liabilities. Realized gains or losses are recorded at the time the forward currency
contracts are closed. TEAF did not enter into any forward currency contracts during the period ended May 31, 2023.
I. Indemnifications
Under each
of the Funds’ organizational documents, its officers and directors are indemnified against certain liabilities arising out of the
performance of their duties to the Funds. In addition, in the normal course of business, the Funds may enter into contracts that provide
general indemnification to other parties. A Fund’s maximum exposure under these arrangements is unknown, as this would involve
future claims that may be made against the Funds that have not yet occurred, and may not occur. However, the Funds have not had prior
claims or losses pursuant to these contracts and expect the risk of loss to be remote.
J. Cash
and Cash Equivalents
Cash and
cash equivalents include short-term, liquid investments with an original maturity of three months or less and money market fund
accounts.
K. Recent
Accounting and Regulatory Updates
In March
2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.
2020-04 Reference Rate Reform (Topic 848); Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which
provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the
effects of) reference rate reform. The guidance is applicable to contracts referencing London Interbank Offered Rate
(“LIBOR”) or another reference rate that is expected to be discontinued due to reference rate reform. The original
guidance and the scope clarification become effective upon issuance in March 2020 and January 2021, respectively. However, the
guidance in ASC 848 is temporary in nature and generally cannot be applied to contract modifications that occur after December 31,
2022 or hedging relationships entered into or evaluated after that date. In December 2022, FASB deferred ASU 2022-04 and issued
ASU 2022-06, Reference Rate Reform: Deferral of the Sunset Date of Topic 848, which extends the application of the amendments
through December 31, 2024. Management is evaluating and believes it is unlikely the ASU’s adoption will have a significant
impact on the Fund’s financial statements.
The FASB
issued final guidance (ASU No. 2022-08) to clarify that a contractual restriction on the sale of an equity security is not
considered part of the unit of account of the equity security and, therefore, is not considered when measuring fair value.
Recognizing a contractual restriction on the sale of an equity security as a separate unit of account is not permitted. The guidance
applies to all entities that have investments in equity securities measured at fair value that are subject to contractual sale
restrictions. Entities that hold equity securities subject to contractual sale restrictions are required to make additional
disclosures. The guidance will be applied prospectively, with special transition provisions for entities that qualify as investment
companies under ASC 946. For public business entities, the guidance is effective for fiscal years beginning after December 15, 2023,
and interim periods within those fiscal years. Management is currently assessing the potential impact of the new guidance on the
Funds’ financial statements.
2023
Semi-Annual Report | May 31, 2023
Notes
to Financial Statements (unaudited)
(continued)
3. Risks
and Uncertainties
TYG, NTG, TTP,
NDP and TPZ concentrate their investments in the energy sector. TEAF concentrates its investments in issuers operating in essential asset
sectors. Funds that primarily invest in a particular sector may experience greater volatility than companies investing in a broad range
of industry sectors. A Fund may, for defensive purposes, temporarily invest all or a significant portion of its assets in investment
grade securities, short-term debt securities and cash or cash equivalents. To the extent a Fund uses this strategy, it may not achieve
its investment objective.
4. Agreements
The Funds have
each entered into an Investment Advisory Agreement with Tortoise Capital Advisors, L.L.C. (the “Adviser”). The Funds each
pay the Adviser a fee based on the Fund’s average monthly total assets (including any assets attributable to leverage and excluding
any net deferred tax asset) minus accrued liabilities (other than net deferred tax liability, debt entered into for purposes of leverage
and the aggregate liquidation preference of outstanding preferred stock) (“Managed Assets”), in exchange for the investment
advisory services provided. Average monthly Managed Assets is the sum of the daily Managed Assets for the month divided by the number
of days in the month. Accrued liabilities are expenses incurred in the normal course of each Fund’s operations. Waived fees are
not subject to recapture by the Adviser. The annual fee rates paid to the Adviser as of May 31, 2023 are as follows:
TYG —
0.95% up to $2,500,000,000, 0.90% between $2,500,000,000 and $3,500,000,000, and 0.85% above $3,500,000,000.
NTG —
0.95%.
TTP —
1.10%.
NDP —
1.10%.
TPZ —
0.95%.
TEAF —
1.35%.
On August 9,
2021, the Adviser voluntarily agreed to reimburse TTP and NDP for their Operating Expenses in order to ensure that Operating Expenses
do not exceed 1.35% of average daily managed assets, effective September 1, 2021. In its sole discretion and at any time, the Adviser
may elect to extend, terminate or modify the temporary expense reimbursement upon written notice.
U.S.
Bancorp Fund Services, LLC d/b/a U.S. Bank Global Fund Services serves as each Fund’s administrator. Each Fund pays the
administrator a monthly fee computed at an annual rate of 0.04% of the first $1,000,000,000 of the Fund’s Managed Assets,
0.01% on the next $500,000,000 of Managed Assets and 0.005% on the balance of the Fund’s Managed Assets.
U.S. Bank,
N.A. serves as the Funds’ custodian. Each Fund pays the custodian a monthly fee computed at an annual rate of 0.004% of the Fund’s
U.S. Dollar-denominated assets and 0.015% of the Fund’s Canadian Dollar-denominated assets, plus portfolio transaction fees.
Notes
to Financial Statements (unaudited)
(continued)
5. Income
Taxes
TYG and
NTG:
TYG and NTG
each intend to elect to be subject to tax as a RIC in connection with the filing of their taxable year ending November 30, 2023 federal
income tax returns. If TYG and NTG satisfy the required qualification tests and each timely elects to be subject to tax as a RIC, they
generally will not be subject to federal income or excise taxes on any income and gains timely distributed to their shareholders. Management
has determined that it is more likely than not TYG and NTG will be able to qualify and elect to be subject to tax as a RIC, effective
as of its fiscal year ending November 30, 2023.
For the
period ending May 31, 2023, TYG and NTG have a net tax benefit of $15,898,342 and $6,231,256 respectively, relating to prior periods
in which they were C Corporations (TYG: $6,764,515; NTG: $3,589,184), changes in the uncertain tax position for the period (TYG:
($24,561,306); NTG: ($10,563,189)) and built-in gains taxes related to the conversion transaction (TYG: $1,898,449; NTG: $742,749).
TYG and NTG are expected to be subject to federal income tax on any built-in gains recognized related to the conversion transaction
but do not expect to be subject to excise tax during its fiscal year ending November 30, 2023.
Income taxes
relating to prior periods in which TYG and NTG were corporations are being calculated by applying the federal rate plus a blended state
income tax rate of approximately 23%. All other taxes are being calculated by applying the federal rate.
As part of
the conversion transaction TYG and NTG may be subject to tax on built-in gains as of the conversion date. As such, deferred income taxes
may be recorded as appropriate. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount
of assets and liabilities for financial reporting and tax purposes. Components of TYG’s and NTG’s deferred tax assets and
liabilities as of May 31, 2023 are as follows
| |
TYG | | |
NTG | |
Deferred tax assets: | |
| | | |
| | |
Capital loss carryforwards | |
$ | 21,903,253 | | |
$ | 8,936,991 | |
| |
| 21,903,253 | | |
| 8,936,991 | |
Deferred tax liabilities: | |
| | | |
| | |
Net unrealized gain on investment securities | |
| 21,903,253 | | |
| 8,936,991 | |
| |
| 21,903,253 | | |
| 8,936,991 | |
Total net deferred tax liability (asset) | |
$ | — | | |
$ | — | |
As of November
30, 2022, for federal income tax purposes, TYG and NTG had capital loss carryforwards of approximately $270,900,000 and $466,300,000
respectively, which may be carried forward for 5 years. If not utilized, theses capital losses will expire in the year ending November
30, 2025. Because of TYG and NTG’s intent to be subject to tax as a RIC, any temporary differences such as capital loss carryforwards
from periods in which each fund was a C-Corporation must be further evaluated to determine what the expected future tax rate would be
upon reversal. As such, TYG and NTG expect capital loss carryforwards of $104,301,207 and $42,557,098 respectively, to reverse at 21%,
the tax rate applicable to built-in gains that were generated when the funds were C-Corporations. The remaining capital loss carryforwards
are expected to reverse at 0%, the tax rate applicable to RICs.
As of May 31,
2023, TYG and NTG utilized approximately $10,100,000 and $3,800,000 of capital loss carryforwards in the current year.
As of May 31,
2023, the aggregate cost of investments, aggregate gross unrealized appreciation and aggregate gross unrealized depreciation on a federal
income tax basis were as follows:
| |
TYG | | |
NTG | |
Tax cost of investments | |
$ | 460,945,987 | | |
$ | 249,384,936 | |
Gross unrealized appreciation of investments | |
$ | 98,650,054 | | |
$ | 38,639,095 | |
Gross unrealized depreciation of investments | |
| (57,375,009 | ) | |
| (27,464,254 | ) |
Net unrealized appreciation (depreciation) of investments | |
$ | 41,275,045 | | |
$ | 11,174,841 | |
2023
Semi-Annual Report | May 31, 2023
Notes
to Financial Statements (unaudited)
(continued)
TTP, NDP,
TPZ and TEAF:
It is the intention
of TTP, NDP, TPZ and TEAF to qualify as RICs under Subchapter M of the IRC and distribute all of its taxable income. Accordingly, no
provision for federal income taxes is required in the financial statements. However, TEAF’s taxable subsidiary created to make
and hold certain investments is generally subject to federal and state income taxes on its income.
TEAF had a
deferred tax expense of $20,576 for the six months ended May 31, 2023, related to the investment activities of its taxable subsidiary.
Total income taxes are computed by applying the federal statutory rate plus a blended state income tax rate totaling 24.93%.
At May 31,
2023, a valuation allowance on deferred tax assets was not deemed necessary because TEAF believes it is more likely than not that its
able to realize its deferred tax assets through future taxable income. Any adjustments to TEAF’s estimates of future taxable income
will be made in the period such determination is made.
Total income
tax expense for TEAF’s taxable subsidiary differs from the amount computed by applying the federal statutory income tax rate of
21% to net income for the period ended May 31, 2023, as follows:
Application of Statutory Income tax rate | |
$ | 13,566 | |
State Income taxes, net of federal tax effect | |
| 2,537 | |
Permanent differences | |
| 4,473 | |
Investment Tax Credits | |
| — | |
Other | |
| — | |
Total income tax benefit | |
$ | 20,576 | |
The amount
and character of income and capital gain distributions to be paid, if any, are determined in accordance with federal income tax regulations,
which may differ from U.S. generally accepted accounting principles. These differences are primarily due to return of capital distributions
and book/tax differences from underlying investments.
As of November
30, 2022, the components of accumulated earnings (deficit) on a tax basis were as follows:
| |
TTP | | |
NDP | | |
TPZ | | |
TEAF | |
Unrealized appreciation (depreciation) | |
$ | (253,237 | ) | |
$ | 25,489,963 | | |
$ | 4,598,564 | | |
$ | 701,157 | |
Capital loss carryforwards | |
| (98,473,130 | ) | |
| (173,921,858 | ) | |
| (13,951,115 | ) | |
| (22,260,156 | ) |
Undistributed ordinary income | |
| — | | |
| — | | |
| — | | |
| — | |
Other temporary differences | |
| (87,261 | )(1) | |
| — | | |
| (4,005 | ) | |
| (336,878 | )(1) |
Accumulated earnings (deficit) | |
$ | (98,813,628 | ) | |
$ | (148,431,895 | ) | |
$ | (9,356,556 | ) | |
$ | (21,895,877 | ) |
(1) Primarily
related to losses deferred under straddle regulations per IRC Sec. 1092 and dividends payable.
As of November
30, 2022, TTP, NDP, TPZ and TEAF had short-term capital loss carryforwards of $15,758,673, $69,936,084, $197,196 and $22,260,156 respectively,
and TTP, NDP and TPZ had long-term capital loss carryforwards of $82,714,457, $103,985,774 and $13,753,919 respectively, which may be
carried forward for an unlimited period under the Regulated Investment Company Modernization Act of 2010. To the extent future net capital
gains are realized, those gains will be offset by any unused capital loss carryforwards. Capital loss carryforwards will retain their
character as either short-term or long-term capital losses. Thus, such losses must be used first to offset gains of the same character;
for example, long-term loss carryforwards will first offset long-term gains, before they can be used to offset short-term gains.
As of May 31,
2023 TTP, NDP, TPZ and TEAF utilized (generated) approximately $910,000, $140,000, $1,300,000 and ($1,490,000) of capital loss carryforwards
in the current year.
In order
to meet certain excise tax distribution requirements, TTP, NDP, TPZ and TEAF are required to measure and distribute annually net
capital gains realized during a twelve month period ending October 31 and net investment income earned during a twelve month period
ending December 31. In connection with this, TTP, NDP, TPZ and TEAF are permitted for tax purposes to defer into their next fiscal
year, qualified late year losses. Qualified late year ordinary losses are any net ordinary losses incurred between January 1 and the
end of their fiscal year, November 30, 2022. For the taxable year ended November 30, 2022, TTP, NDP, TPZ and TEAF do not plan to
defer any losses.
As of May 31,
2023, the aggregate cost of investments, aggregate gross unrealized appreciation and aggregate gross unrealized depreciation on a federal
income tax basis were as follows:
| |
TTP | | |
NDP | | |
TPZ | | |
TEAF | |
Tax cost of investments | |
$ | 69,518,038 | | |
$ | 45,968,388 | | |
$ | 101,095,440 | | |
$ | 237,882,545 | |
Gross unrealized appreciation of investments | |
$ | 17,657,626 | | |
$ | 18,592,395 | | |
$ | 22,132,608 | | |
$ | 15,139,318 | |
Gross unrealized depreciation of investments | |
| (5,883,963 | ) | |
| (461,885 | ) | |
| (5,817,653 | ) | |
| (14,285,207 | ) |
Net unrealized appreciation (depreciation) of investments | |
$ | 11,773,663 | | |
$ | 18,130,510 | | |
$ | 16,314,955 | | |
$ | 854,111 | |
Notes
to Financial Statements (unaudited)
(continued)
6. Restricted
Securities
Certain of
the Funds’ investments are restricted and are valued as determined in accordance with fair value procedures, as more fully described
in Note 2. The following table shows the principal amount or shares, acquisition date(s), acquisition cost, fair value and the percent
of net assets which the securities comprise at May 31, 2023.
TYG: | |
| |
| | |
| |
| | |
| | |
| |
Investment Security | |
Investment Type | |
Shares | | |
Acquisition Date(s) | |
Acquisition Cost | | |
Fair Value | | |
Fair Value as Percent of Net Assets | |
TK NYS Solar Holdco, LLC | |
Private Investment | |
| N/A | | |
08/18/17-08/19/19 | |
$ | 50,141,470 | | |
$ | 14,712,980 | | |
| 3.9% |
|
| |
| |
| | | |
| |
| | | |
| | | |
| | |
TPZ: | |
| |
| | |
| |
| | |
| | |
|
|
Investment
Security | |
Investment Type | |
Principal
Amount/Shares | | |
Acquisition Date(s) | |
Acquisition Cost | | |
Fair Value | | |
Fair Value as Percent of Net Assets |
|
Antero Midstream Partners LP, 5.750%, 03/01/2027* | |
Corporate Bond | |
$ | 3,800,000 | | |
04/03/19-09/07/21 | |
$ | 3,890,000 | | |
$ | 3,635,383 | | |
| 3.9% |
|
Blue Racer Midstream, LLC, 6.625%, 07/15/2026* | |
Corporate Bond | |
$ | 5,900,000 | | |
06/14/18-02/01/19 | |
| 5,936,250 | | |
| 5,832,397 | | |
| 6.3 |
|
DT Midstream, Inc., 4.375%, 06/15/2031* | |
Corporate Bond | |
$ | 2,000,000 | | |
09/03/21-09/07/21 | |
| 2,085,000 | | |
| 1,682,147 | | |
| 1.8 |
|
Hess Corporation, 5.625%, 02/15/2026* | |
Corporate Bond | |
$ | 4,160,000 | | |
07/17/18-08/02/18 | |
| 4,196,600 | | |
| 4,082,000 | | |
| 4.4 |
|
New Fortress Energy, Inc., 6.500%, 09/30/2026* | |
Corporate Bond | |
$ | 5,000,000 | | |
03/26/21-10/07/21 | |
| 4,999,844 | | |
| 4,431,292 | | |
| 4.8 |
|
NGPL Pipe Co, 3.250%, 07/15/2031* | |
Corporate Bond | |
$ | 1,500,000 | | |
11/09/21 | |
| 1,551,015 | | |
| 1,239,515 | | |
| 1.3 |
|
Rockies Express Pipeline LLC, 4.950%, 07/15/2029* | |
Corporate Bond | |
$ | 3,000,000 | | |
04/04/19 | |
| 3,002,670 | | |
| 2,685,000 | | |
| 2.9 |
|
Tallgrass Energy LP, 5.500%, 01/15/2028* | |
Corporate Bond | |
$ | 3,250,000 | | |
09/24/18-02/04/19 | |
| 3,261,250 | | |
| 2,934,327 | | |
| 3.2 |
|
| |
| |
| | | |
| |
$ | 28,922,629 | | |
$ | 26,522,061 | | |
| 28.6% |
|
| |
| |
| | |
| |
| | |
| | |
| |
TEAF: | |
| |
| | |
| |
| | |
| | |
| |
Investment
Security | |
Investment Type | |
Principal
Amount/Shares | | |
Acquisition Date(s) | |
Acquisition Cost | | |
Fair Value | | |
Fair Value as
Percent of Net Assets | |
315/333 West Dawson Associates, 11.000%, 01/31/26* | |
Corporate Bond | |
$ | 3,770,000 | | |
03/30/21 | |
$ | 3,590,476 | | |
$ | 3,549,892 | | |
| 1.5% | |
Ativo Albuquerque LLC, 12.000%, 01/01/2028* | |
Corporate Bond | |
$ | 2,032,000 | | |
12/28/22 | |
| 2,032,000 | | |
| 2,032,000 | | |
| 1.0 | |
Contour Propco, 11.000%, 10/01/25 | |
Corporate Bond | |
$ | 5,715,000 | | |
09/30/21 | |
| 5,715,000 | | |
| 5,370,031 | | |
| 2.6 | |
Dove Mountain Residences, LLC 11.000%, 02/01/2026* | |
Corporate Bond | |
$ | 1,050,000 | | |
12/02/21 | |
| 1,050,000 | | |
| 1,020,351 | | |
| 0.5 | |
Dove Mountain Residences, LLC 16.000%, 02/01/2026* | |
Corporate Bond | |
$ | 957,174 | | |
12/02/21-02/01/23 | |
| 957,174 | | |
| 931,378 | | |
| 0.4 | |
Drumlin Reserve Property LLC, 16.000%, 10/02/2025* | |
Corporate Bond | |
$ | 1,412,880 | | |
09/30/20-08/04/22 | |
| 1,412,880 | | |
| 1,388,676 | | |
| 0.7 | |
Drumlin Reserve Property LLC, 10.000%, 10/02/2025* | |
Corporate Bond | |
$ | 1,705,311 | | |
09/30/20 | |
| 1,705,311 | | |
| 1,666,761 | | |
| 0.8 | |
JW Living Smithville Urban Ren Sub Global 144A 27 11.750%, 06/01/2027 | |
Corporate Bond | |
$ | 3,890,000 | | |
05/24/22 | |
| 3,890,000 | | |
| 3,638,792 | | |
| 1.7 | |
Realco Perry Hall MD LLC/OPCO, 10.000%, 10/01/2024* | |
Corporate Bond | |
$ | 2,227,000 | | |
09/30/19 | |
| 2,227,000 | | |
| 2,133,497 | | |
| 1.0 | |
2023 Semi-Annual Report | May 31, 2023
Notes to Financial Statements (unaudited)
(continued)
TEAF: (continued) |
| | |
| |
| | |
| | |
| |
Investment Security | |
Investment Type | |
Principal Amount/Shares | | |
Acquisition Date(s) | |
Acquisition Cost | | |
Fair Value | | |
Fair Value as Percent of Net Assets |
Enterprise
Products Partners LP, 7.250% | |
Preferred Stock | |
| 5,000 | | |
09/30/20 | |
$ | 6,986,282 | | |
$ | 4,697,100 | | |
| 2.2 | |
Mexico Pacific
Limited LLC (MPL) Series A | |
Private Investment | |
| 135,180 | | |
10/23/19-05/10/23 | |
| 2,028,201 | | |
| 2,966,390 | | |
| 1.4 | |
One Energy | |
Private Investment | |
| 20,115 | | |
04/12/23 | |
| 9,000,000 | | |
| 9,301,176 | | |
| 4.4 | |
Renewable Holdco,
LLC | |
Private Investment | |
| N/A | | |
07/25/19-03/23/23 | |
| 6,339,248 | | |
| 6,743,798 | | |
| 3.2 | |
Renewable Holdco
I, LLC | |
Private Investment | |
| N/A | | |
09/09/19 | |
| 22,310,875 | | |
| 23,098,768 | | |
| 11.0 | |
Renewable Holdco
II, LLC | |
Private Investment | |
| N/A | | |
11/15/16-12/22/21 | |
| 12,719,981 | | |
| 12,978,899 | | |
| 6.1 | |
Saturn Solar Bermuda1
Ltd., 8.000%, 06/30/2023 | |
Construction Note | |
$ | 3,510,000 | | |
05/24/19-07/03/19 | |
| 3,778,904 | | |
| 3,637,062 | | |
| 1.7 | |
EF
WWW Holdings, LLC, 10.500%, 09/30/2026 | |
Construction Note | |
$ | 9,600,000 | | |
12/06/21-04/06/23 | |
| 9,600,000 | | |
| 9,888,000 | | |
| 4.7 | |
| |
| |
| | | |
| |
$ | 95,343,332 | | |
$ | 95,042,571 | | |
| 45.2% | |
* Security is eligible for resale under Rule 144A under the 1933 Act.
7. Affiliated Company Transactions
A summary of the transactions in affiliated companies during the period
ended May 31, 2023 is as follows:
TYG: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Investment Security | |
11/30/22
Share
Balance | | |
Gross Additions | | |
Gross Reductions | | |
Realized Gain/(Loss) | | |
Distributions
Received | | |
5/31/23
Share
Balance | | |
5/31/23 Value | | |
Net Change in Unrealized
Appreciation | |
TK NYS Solar Holdco, LLC | |
| N/A | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
| N/A | | |
$ | 14,712,980 | | |
$ | 311,761 | |
TEAF: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Security |
|
11/30/22
Share
Balance |
|
|
Gross
Additions |
|
|
Gross
Reductions |
|
|
Realized
Gain/(Loss) |
|
|
Distributions
Received |
|
|
5/31/23
Share
Balance |
|
|
5/31/23
Value |
|
|
Net Change
in Unrealized
Appreciation
(Depreciation) |
|
Renewable Holdco,
LLC |
|
|
N/A |
|
|
$ |
299,068 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
N/A |
|
|
$ |
6,743,798 |
|
|
$ |
(83,581 |
) |
Renewable Holdco I, LLC |
|
|
N/A |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
450,000 |
|
|
|
N/A |
|
|
$ |
23,098,768 |
|
|
$ |
(228,613 |
) |
Renewable Holdco II, LLC |
|
|
N/A |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
N/A |
|
|
$ |
12,978,899 |
|
|
$ |
190,381 |
|
Total |
|
|
N/A |
|
|
$ |
299,068 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
450,000 |
|
|
|
N/A |
|
|
$ |
42,821,465 |
|
|
$ |
(121,813 |
) |
8. Investment Transactions
For the period ended May 31, 2023, the amount of security transactions
(other than U.S. government securities and short-term investments), is as follows:
| | |
TYG | | |
NTG | | |
TTP | | |
NDP | | |
TPZ | | |
TEAF | |
Purchases | | |
$ | 41,703,158 | | |
$ | 28,459,163 | | |
$ | 3,370,485 | | |
$ | 4,381,511 | | |
$ | 4,863,100 | | |
$ | 40,275,835 | |
Sales | | |
$ | 86,283,864 | | |
$ | 38,188,868 | | |
$ | 6,784,747 | | |
$ | 243,950 | | |
$ | 6,828,076 | | |
$ | 43,319,932 | |
Notes to Financial Statements (unaudited)
(continued)
9. Senior Notes
TYG, NTG and TTP each have issued private senior notes (collectively,
the “Notes”), which are unsecured obligations and, upon liquidation, dissolution or winding up of a Fund, will rank: (1)
senior to all of the Fund’s outstanding preferred shares, if any; (2) senior to all of the Fund’s outstanding common shares;
(3) on parity with any unsecured creditors of the Fund and any unsecured senior securities representing indebtedness of the Fund and
(4) junior to any secured creditors of the Fund. Holders of the Notes are entitled to receive periodic cash interest payments until maturity.
The Notes are not listed on any exchange or automated quotation system.
The Notes are redeemable in certain circumstances at the option of
a Fund, subject to payment of any applicable make-whole amounts or early redemption premiums. The Notes for a Fund are also subject
to a mandatory redemption if the Fund fails to meet asset coverage ratios required under the 1940 Act or the rating agency
guidelines if such failure is not waived or cured. At May 31, 2023, each of TYG, NTG and TTP were in compliance with asset coverage
covenants and basic maintenance covenants for its senior notes.
Details of each Fund’s outstanding Notes, including
estimated fair value, as of May 31, 2023 are included below. The estimated fair value of each series of fixed-rate Notes was
calculated, for disclosure purposes, by discounting future cash flows by a rate equal to the current U.S. Treasury rate with an
equivalent maturity date, plus either 1) the spread between the interest rate on recently issued debt and the U.S. Treasury rate
with a similar maturity date or 2) if there has not been a recent debt issuance, the spread between the AAA corporate finance debt
rate and the U.S. Treasury rate with an equivalent maturity date plus the spread between the fixed rates of the Notes and the AAA
corporate finance debt rate. The estimated fair value of floating rate Notes approximates the carrying amount because the interest
rate fluctuates with changes in interest rates available in the current market. The estimated fair values in the following tables
are Level 2 valuations within the fair value hierarchy.
TYG: | |
| |
| | |
| |
| | |
| |
Series | |
Maturity Date | |
|
Interest Rate | | |
Payment Frequency | |
Notional Amount | | |
Estimated Fair Value | |
Series P | |
September 27, 2023 | |
| 4.39% | | |
Semi-Annual | |
$ | 3,872,000 | | |
$ | 3,877,296 | |
Series FF | |
November 20, 2023 | |
| 4.16% | | |
Semi-Annual | |
| 3,226,667 | | |
| 3,196,749 | |
Series JJ | |
December 18, 2023 | |
| 3.34% | | |
Semi-Annual | |
| 6,453,333 | | |
| 6,446,848 | |
Series T | |
January 22, 2024 | |
| 4.16% | | |
Semi-Annual | |
| 8,066,667 | | |
| 8,076,760 | |
Series L | |
December 19, 2024 | |
| 3.99% | | |
Semi-Annual | |
| 6,453,333 | | |
| 6,382,501 | |
Series AA | |
June 14, 2025 | |
| 3.48% | | |
Semi-Annual | |
| 3,226,667 | | |
| 3,142,344 | |
Series NN | |
June 14, 2025 | |
| 3.20% | | |
Semi-Annual | |
| 9,680,000 | | |
| 9,365,136 | |
Series KK | |
December 18, 2025 | |
| 3.53% | | |
Semi-Annual | |
| 3,226,667 | | |
| 3,128,254 | |
Series OO | |
April 9, 2026 | |
| 3.27% | | |
Semi-Annual | |
| 9,680,000 | | |
| 9,185,894 | |
Series PP | |
September 25, 2027 | |
| 3.33% | | |
Semi-Annual | |
| 8,066,666 | | |
| 7,564,710 | |
Series QQ | |
December 17, 2028 | |
| 2.50% | | |
Semi-Annual | |
| 10,000,000 | | |
| 9,518,467 | |
| |
| |
| | | |
| |
$ | 71,952,000 | | |
$ | 69,884,959 | |
On December 19, 2022, TYG’s Series II Notes, with a notional
amount of $3,226,667 and a fixed interest rate of 3.22% were paid in full at maturity.
On December 19, 2022, TYG’s Series K Notes, with a notional amount
of $3,226,667 and a fixed interest rate of 3.87% were paid in full at maturity.
On January 23, 2023, TYG’s Series S Notes, with a notional amount
of $3,226,667 and a fixed interest rate of 3.99% were paid in full at maturity.
NTG: | |
| |
| | |
| |
| | |
| |
Series | |
Maturity Date | |
|
Interest Rate | | |
Payment Frequency | |
Notional Amount | | |
Estimated Fair Value | |
Series P | |
October 16, 2023 | |
| 3.79% | | |
Semi-Annual | |
$ | 2,979,055 | | |
$ | 2,964,457 | |
Series Q | |
October 16, 2025 | |
| 3.97% | | |
Semi-Annual | |
| 2,234,292 | | |
| 2,165,704 | |
Series R | |
October 16, 2026 | |
| 4.02% | | |
Semi-Annual | |
| 1,936,386 | | |
| 1,871,758 | |
Series S | |
December 17, 2028 | |
| 2.50% | | |
Semi-Annual | |
| 25,000,000 | | |
| 22,341,780 | |
| |
| |
| | | |
| |
$ | 32,149,733 | | |
$ | 29,343,699 | |
TTP: | |
| |
| | |
| |
| | |
| |
Series | |
Maturity Date | |
|
Interest Rate | | |
Payment Frequency | |
Notional Amount | | |
Estimated Fair Value | |
Series H | |
December 13, 2024 | |
| 3.97% | | |
Semi-Annual | |
$ | 3,942,857 | | |
$ | 3,901,389 | |
2023 Semi-Annual Report | May 31, 2023
Notes to Financial Statements (unaudited)
(continued)
10. Mandatory Redeemable Preferred Stock
TYG, NTG and TTP each have issued and
outstanding MRP Stock at May 31, 2023. The MRP Stock has rights determined by the Board of Directors. Except as otherwise indicated
in the Funds’ Charter or Bylaws, or as otherwise required by law, the holders of MRP Stock have voting rights equal to the
holders of common stock (one vote per MRP share) and will vote together with the holders of shares of common stock as a single class
except on matters affecting only the holders of preferred stock or the holders of common stock. The 1940 Act requires that the
holders of any preferred stock (including MRP Stock), voting separately as a single class, have the right to elect at least two
directors at all times.
Under the 1940 Act, a Fund may not
declare dividends or make other distributions on shares of common stock or purchases of such shares if, at the time of the
declaration, distribution or purchase, asset coverage with respect to the outstanding MRP Stock would be less than 200%. The MRP
Stock is also subject to a mandatory redemption if a Fund fails to meet an asset coverage ratio of at least 225% as determined in
accordance with the 1940 Act or a rating agency basic maintenance amount if such failure is not waived or cured. At May 31, 2023,
each of TYG, NTG and TTP were in compliance with asset coverage covenants and basic maintenance covenants for its MRP Stock.
Details of each Fund’s outstanding
MRP Stock, including estimated fair value, as of May 31, 2023 is included below. The estimated fair value of each series of TYG, NTG
and TTP MRP Stock was calculated for disclosure purposes by discounting future cash flows at a rate equal to the current U.S.
Treasury rate with an equivalent maturity date, plus either 1) the spread between the interest rate on recently issued preferred
stock and the U.S. Treasury rate with a similar maturity date or 2) if there has not been a recent preferred stock issuance, the
spread between the AA corporate finance debt rate and the U.S. Treasury rate with an equivalent maturity date plus the spread
between the fixed rates of the MRP Stock and the AA corporate finance debt rate. The estimated fair values of each series of the
TYG, NTG and TTP MRP Stock are Level 2 valuations within the fair value hierarchy.
TYG:
TYG has 65,000,000 shares of preferred stock
authorized and 3,566,061 shares of MRP Stock outstanding at May 31, 2023. TYG’s MRP Stock has a liquidation value of $10.00 per
share plus any accumulated but unpaid distributions, whether or not declared. Holders of the MRP E Stock and MRP F Stock are entitled
to receive cash interest payments semi-annually at a fixed rate until maturity. The TYG MRP Stock is not listed on any exchange or automated
quotation system.
Series | |
Mandatory Redemption Date | |
|
Fixed Rate | | |
Shares Outstanding | |
Aggregate Liquidation Preference | |
Estimated Fair Value |
Series E | |
December 17, 2024 | |
| 4.34% | | |
| 1,566,061 | | |
$ | 15,660,610 | | |
$ | 15,501,437 | |
Series F | |
December 17, 2026 | |
| 2.67% | | |
| 2,000,000 | | |
| 20,000,000 | | |
| 18,156,152 | |
| |
| |
| | | |
| 3,566,061 | | |
$ | 35,660,610 | | |
$ | 33,657,589 | |
TYG’s MRP Stock is redeemable in certain
circumstances at the option of TYG, subject to payment of any applicable make-whole amounts.
NTG:
NTG has 10,000,000 shares of preferred
stock authorized and 634,818 shares of MRP Stock outstanding at May 31, 2023. NTG’s MRP Stock has a liquidation value of
$25.00 per share plus any accumulated but unpaid distributions, whether or not declared. Holders of NTG MRP Stock are entitled to
receive cash interest payments each quarter at a fixed rate until maturity. The NTG MRP Stock is not listed on any exchange or
automated quotation system.
Series | |
Mandatory Redemption Date | |
|
Fixed Rate | | |
Shares Outstanding | | |
Aggregate Liquidation Preference | | |
Estimated Fair Value | |
Series G | |
October 16, 2023 | |
| 4.39% | | |
| 84,667 | | |
$ | 2,116,675 | | |
$ | 2,103,632 | |
Series E | |
December 13, 2024 | |
| 3.78% | | |
| 153,939 | | |
| 3,848,475 | | |
| 3,720,145 | |
Series F | |
December 13, 2027 | |
| 4.07% | | |
| 96,212 | | |
| 2,405,300 | | |
| 2,281,835 | |
Series H | |
December 17, 2027 | |
| 2.90% | | |
| 300,000 | | |
| 7,500,000 | | |
| 6,768,718 | |
| |
| |
| | | |
| 634,818 | | |
$ | 15,870,450 | | |
$ | 14,874,330 | |
NTG’s MRP Stock is redeemable in certain
circumstances at the option of NTG, subject to payment of any applicable make-whole amounts.
On December 8, 2022, NTG’s Series D
MRP Stock, with a fair value of $3,848,475 and a fixed interest rate of 4.19% were paid in full at maturity.
TTP:
TTP has 10,000,000 shares of preferred stock
authorized and 244,000 shares of MRP Stock outstanding at May 31, 2023. TTP’s MRP Stock has a liquidation value of $25.00 per share
plus any accumulated but unpaid distributions, whether or not declared. Holders of TTP MRP Stock are entitled to receive cash interest
payments each quarter at a fixed rate until maturity. The TTP MRP Stock is not listed on any exchange or automated quotation system.
Series | |
Mandatory
Redemption Date | |
|
Fixed
Rate | | |
Shares Outstanding | |
Aggregate Liquidation Preference | |
Estimated Fair Value |
Series
B | |
December
13, 2024 | |
| 6.57% | | |
| 244,000 | | |
$ | 6,100,000 | | |
$ | 6,178,677 | |
TTP’s MRP Stock is redeemable in certain
circumstances at the option of TTP, subject to payment of any applicable make-whole amounts.
Notes to Financial Statements (unaudited)
(continued)
11. Credit Facilities
The following table shows key terms, average borrowing activity and
interest rates for the period during which the facility was utilized during the period from December 1, 2022 through May 31, 2023 as
well as the principal balance and interest rate in effect at May 31, 2023 for each of the Funds’ credit facilities:
| |
TYG | | |
NTG | | |
TTP | | |
NDP | | |
TPZ | | |
TEAF | |
Lending syndicate
agent | |
| U.S.
Bank, N.A. | | |
| Bank of America,
N.A. | | |
| The
Bank of Nova Scotia | | |
| The
Bank of Nova Scotia | | |
| The
Bank of Nova Scotia | | |
| The
Bank of Nova Scotia | |
Type of facility | |
| Unsecured,
revolving credit facility | | |
| Unsecured,
revolving credit facility | | |
| Unsecured,
revolving credit facility | | |
| Secured,
revolving credit facility | | |
| Secured,
revolving credit facility | | |
| Margin
loan facility | |
Borrowing
capacity | |
$ | 90,000,000 | | |
$ | 80,000,000 | | |
$ | 15,000,000 | | |
$ | 12,000,000 | | |
$ | 30,000,000 | | |
$ | 45,000,000 | |
Maturity date | |
| June
12, 2023 | | |
| June
12, 2023 | | |
| December
28, 2023 | | |
| December
28, 2023 | | |
| December
28, 2023 | | |
| 179-day
rolling evergreen | |
Interest rate | |
| 1-month
LIBOR plus 1.10% | | |
| 1-month
LIBOR plus 1.10% | | |
| Simple
SOFR plus 1.30% | | |
| Simple
SOFR plus 1.25% | | |
| Simple
SOFR plus 1.25% | | |
| 30
Day Avg. SOFR plus 0.80% | |
Non-usage fee | |
| 0.15%-0.25%(1) | | |
| 0.15%-0.25%(2) | | |
| 0.15%-0.30%(3) | | |
| 0.15%-0.25%(4) | | |
| 0.15%-0.25%(5) | | |
| 0.20 | %(7) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
For the period ended May 31, 2023: | |
| | | |
| | | |
| | |
Average principal balance | |
$ | 27,800,000 | | |
$ | 15,000,000 | | |
$ | 9,400,000 | | |
$ | 6,500,000 | | |
$ | 25,100,000 | | |
$ | 30,100,000 | |
Average interest rate | |
| 5.81 | % | |
| 5.81 | % | |
| 5.96 | % | |
| 5.91 | % | |
| 5.91 | % | |
| 5.52 | % |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
As of May 31, 2023: | |
| | | |
| | | |
| | | |
| | |
Principal balance
outstanding | |
$ | 7,100,000 | | |
$ | 8,900,000 | | |
$ | 7,400,000 | | |
$ | 8,800,000 | | |
$ | 25,300,000 | (6) | |
$ | 29,500,000 | |
Interest rate | |
| 6.29 | % | |
| 6.29 | % | |
| 6.48 | % | |
| 6.40 | % | |
| 6.40 | % | |
| 6.087 | % |
(1) | Non-use fees are equal to a rate of 0.25% when the outstanding balance is below $45,000,000 and
0.15% when the outstanding balance is at least $45,000,000, but below $63,000,000. The outstanding balance will not be subject to
the non-use fee when the amount outstanding is at least $63,000,000. |
(2) | Non-use fees are equal to a rate of 0.25% when the outstanding balance is below $40,000,000 and
0.15% when the outstanding balance is at least $40,000,000, but below $56,000,000. The outstanding balance will not be subject to
the non-use fee when the amount outstanding is at least $56,000,000. |
(3) | Non-use fee is 0.00% when the amount outstanding is at least $13,500,000, and 0.15% when the amount
outstanding is less than $13,500,000 and greater than or equal to $10,500,000, and .20% when the amount outstanding is less than
$10,500,000 and greater than or equal to $7,500,000, and 0.30% when the amount outstanding is less than $7,500,000 |
(4) | Non-use fees are 0.15% when amount outstanding is at least $9,000,000,
but 0.25% when the amount outstanding is below $9,000,000. |
(5) | Non-use fee is 0.15% when the amount outstanding is at least
$22,500,000 and 0.25% when the amount outstanding is below $22,500,000. |
(6) | TPZ’s credit facility allows for interest rates to be fixed on all or a portion of the
outstanding balance. Amounts reflect activity on the credit facility for the period from December 1, 2022 through May 31, 2023 and
include $9,000,000 of the outstanding principal balance that has a fixed rate of 3.33% through June 30, 2023 and $15,000,000 of the
outstanding principal balance that has a fixed rate of 3.34% through June 30, 2024. |
(7) | Non-use fees are waived when amount outstanding is at least $31,500,000. |
Under the terms of the credit and margin facilities, the Funds must
maintain asset coverage required under the 1940 Act. If a Fund fails to maintain the required coverage, it may be required to repay a
portion of an outstanding balance until the coverage requirement has been met. At May 31, 2023, each Fund was in compliance with facility
terms.
12. Derivative Financial Instruments
The Funds have adopted the disclosure provisions of FASB
Accounting Standard Codification 815, Derivatives and Hedging (“ASC 815”). ASC 815 requires enhanced disclosures about
the Funds’ use of and accounting for derivative instruments and the effect of derivative instruments on the Funds’
results of operations and financial position. Tabular disclosure regarding derivative fair value and gain/loss by contract type
(e.g., interest rate contracts, foreign exchange contracts, credit contracts, etc.) is required and derivatives accounted for as
hedging instruments under ASC 815 must be disclosed separately from those that do not qualify for hedge accounting. Even though the
Funds may use derivatives in an attempt to achieve an economic hedge, the Funds’ derivatives are not accounted for as hedging
instruments under ASC 815 because investment companies account for their derivatives at fair value and record any changes in fair
value in current period earnings.
2023 Semi-Annual Report | May 31, 2023
Notes to Financial Statements (unaudited)
(continued)
Forward Currency Contracts
TEAF may invest in derivative instruments for hedging or risk
management purposes, and for short-term purposes such as maintaining market exposure pending investment of the proceeds of an
offering or transitioning its portfolio between different asset classes. The Fund’s use of derivatives could enhance or
decrease the cash available to the Fund for payment of distributions or interest, as the case may be. Derivatives can be illiquid,
may disproportionately increase losses and have a potentially large negative impact on the Fund’s performance. Derivative
transactions, including options on securities and securities indices and other transactions in which the Fund may engage (such as
forward currency transactions, futures contracts and options thereon and total return swaps), may subject the Fund to increased risk
of principal loss due to unexpected movements in stock prices, changes in stock volatility levels, interest rates and foreign
currency exchange rates and imperfect correlations between the Fund’s securities holdings and indices upon which derivative
transactions are based. The Fund also will be subject to credit risk with respect to the counterparties to any OTC derivatives
contracts the Fund enters into.
As of May 31, 2023, TEAF held no forward currency contracts.
Interest Rate Swap Contracts
TYG may enter into interest rate swap contracts in an attempt to
protect it from increasing interest expense on its leverage resulting from increasing interest rates. A decline in interest rates
may result in a decline in the value of the swap contracts, which may result in a decline in the net assets of TYG. At the time the
interest rate swap contracts reach their scheduled termination, there is a risk that TYG will not be able to obtain a replacement
transaction, or that the terms of the replacement would not be as favorable as on the expiring transaction. In addition, if TYG is
required to terminate any swap contract early due to a decline in net assets below a threshold amount or failing to maintain a
required 300% asset coverage of the liquidation value of the outstanding debt, then TYG could be required to make a payment to the
extent of any net unrealized depreciation of the terminated swaps, in addition to redeeming all or some of its outstanding debt. TYG
segregates a portion of its assets as collateral for the amount of any net liability of its interest rate swap contracts.
TYG may be subject to credit risk on the interest rate swap contracts
if the counterparty should fail to perform under the terms of the interest rate swap contracts. The amount of credit risk is limited
to the net appreciation of the interest rate swap contracts, if any, as no collateral is pledged by the counterparty. In addition, if
the counterparty to the interest rate swap contracts defaults, the Fund would incur a loss in the amount of the receivable and would
not receive amounts due from the counterparty to offset the interest payments on the Fund’s leverage.
As of May 31, 2023, TYG held no interest rate swap contracts.
Written Call Options
Transactions in written option contracts for TEAF for the period from
December 1, 2022 through May 31, 2023 are as follows:
| |
TEAF | |
| |
Number of
Contracts | | |
Premium | |
Options outstanding at November 30, 2022 | |
| — | | |
$ | — | |
Options written | |
| 15,517 | | |
| 298,839 | |
Options closed* | |
| (3,700 | ) | |
| (23,075 | ) |
Options exercised | |
| (4,817 | ) | |
| (117,160 | ) |
Options expired | |
| (7,000 | ) | |
| (158,604 | ) |
Options outstanding at May 31, 2023 | |
| — | | |
$ | — | |
*The aggregate cost of closing written option contracts for TEAF was
$135,193, resulting in net realized loss of $112,118.
There were no written option contracts in TYG, NTG, TTP and NDP during
the period December 1, 2022 through May 31, 2023. As of May 31, 2023, TEAF held no written options contracts.
The following table presents the effect of derivatives on the Statements
of Operations for the period ended May 31, 2023:
Derivatives not accounted for as hedging instruments under ASC 815 | |
Location of Gains (Losses) on Derivatives | |
Net Realized
Gain (Loss) on
Derivatives | | |
Net Change in Unrealized
Appreciation
(Depreciation) of Derivatives | |
TEAF: Written equity call options | |
Options | |
$ | 46,486 | | |
$ | — | |
Notes to Financial Statements
(unaudited) (continued)
13. Basis For Consolidation
As of May 31, 2023, TYG has committed a total of $55,256,470 of
equity funding to Tortoise Holdco II, LLC, a wholly-owned investment of TYG. Tortoise Holdco II, LLC wholly owns TK NYS Solar
Holdco, LLC, which owns and operates renewable energy assets. TK NYS Solar Holdco, LLC acquired the commercial and industrial solar
portfolio between August 2017 and November 2019. Fair value of TK NYS Solar Holdco, LLC is net of tax benefits.
TYG’s consolidated schedule of investments includes the portfolio
holdings of the Fund and its subsidiary, Tortoise Holdco II, LLC. All inter-company transactions and balances have been eliminated.
As of May 31, 2023, TEAF has committed $63,739,819 to TEAF Solar Holdco,
LLC, a wholly-owned investment of TEAF. TEAF Solar Holdco, LLC wholly owns each of Renewable Holdco, LLC and Renewable Holdco I, LLC,
which owns and operates renewable energy assets. TEAF Solar Holdco, LLC owns a majority partnership interest in Renewable Holdco II,
LLC. Renewable Holdco, LLC and Renewable Holdco II, LLC’s acquisition of the commercial and industrial solar portfolio is ongoing.
Renewable Holdco I, LLC acquired the commercial and industrial solar portfolio in September 2019.
As of May 31, 2023, TEAF has provided $3,770,670 to TEAF Solar Holdco
I, LLC, a wholly-owned investment of TEAF. TEAF Solar Holdco I, LLC has committed to $6,667,100 of debt funding to Saturn Solar Bermuda
1, Ltd. through a construction note. Under the terms of the note Tortoise Solar Holdco I, LLC receives cash payments monthly at an annual
rate of 10%. As of May 31, 2023, $3,510,000 of the construction note had been funded.
As of May 31, 2023, TEAF has provided $9,600,000 to EF WWW Holdings,
LLC., a wholly-owned investment of TEAF. EF WWW Holdings, LLC has committed to $15,000,000 of debt funding to World Water Works, Inc.
through a senior secured convertible note. All of the committed debt funding has been drawn today. Under the terms of the note TEAF receives
cash payments monthly at an annual rate of 10.50%.
TEAF’s consolidated schedule of investments includes the portfolio
holdings of the Fund and its subsidiaries, TEAF Solar Holdco, LLC and TEAF Solar Holdco I, LLC. All inter-company transactions and balances
have been eliminated.
2023 Semi-Annual Report | May 31, 2023
Notes to Financial Statements (unaudited)
(continued)
14. Subsequent Events
TYG:
On June 12, 2023, TYG executed an amendment to its credit
facility. The Seconded Amended and Restated Credit Agreement extends the termination date to June 12, 2025, decreased the facility
borrowing capacity to $45,000,000, and changed the reference rate to the 1 month term SOFR plus 135 basis points (1.35%).
TYG has performed an evaluation of subsequent events through the date
the financial statements were issued and has determined that no additional items require recognition or disclosure.
NTG:
On June 12, 2023, NTG allowed its existing $80,000,000 credit agreement
to terminate and executed a new credit agreement. The termination date of the newly executed Credit agreement is June 12, 2025, the facility
borrowing capacity to $35,000,000, and the reference rate is the 1 month term SOFR plus 135 basis points (1.35%).
NTG has performed an evaluation of subsequent events through the date
the financial statements were issued and has determined that no additional items require recognition or disclosure.
TTP:
TTP has performed an evaluation of subsequent events through the date
the financial statements were issued and has determined that no additional items require recognition or disclosure.
NDP:
NDP has performed an evaluation of subsequent events through the date
the financial statements were issued and has determined that no items require recognition or disclosure.
TPZ:
On June 30, 2023, TPZ paid a distribution in the amount of $0.105 per
common share, for a total of $651,018. Of this total the dividend reinvestment amounted to $4,973.
On June 30, 2023, TPZ transferred the $9,000,000 fixed tranche of its
credit facility, fixed rate of 3.33%, to its floating rate credit facility at maturity.
TPZ has performed an evaluation of subsequent events through the date
the financial statements were issued and has determined that no additional items require recognition or disclosure.
TEAF:
On June 30, 2023, TEAF paid a distribution in the amount of $0.09 per
common share, for a total of $1,214,201. Of this total the dividend reinvestment amounted to $21,868.
TEAF has performed an evaluation of subsequent events through the date
the financial statements were issued and has determined that no additional items require recognition or disclosure.
Additional Information
(continued)
Director and Officer Compensation
The Funds do not compensate any of its directors who are “interested
persons,” as defined in Section 2(a)(19) of the 1940 Act, nor any of its officers. For the period from December 1, 2022 through
May 31, 2023, the aggregate compensation paid by the Funds to the independent directors was as follows:
TYG |
|
NTG |
|
TTP |
|
NDP |
|
TPZ |
|
TEAF |
$41,000 |
|
$41,000 |
|
$33,000 |
|
$33,000 |
|
$41,000 |
|
$41,000 |
The Funds did not pay any special compensation to any of its directors
or officers.
Forward-Looking Statements
This report contains “forward-looking statements”
within the meaning of the 1933 Act and the Securities Exchange Act of 1934, as amended. By their nature, all forward-looking
statements involve risks and uncertainties, and actual results could differ materially from those contemplated by the
forward-looking statements. Several factors that could materially affect each Fund’s actual results are the performance of the
portfolio of investments held by it, the conditions in the U.S. and international financial, petroleum and other markets, the price
at which shares of each Fund will trade in the public markets and other factors discussed in filings with the Securities and
Exchange Commission (SEC).
Proxy Voting Policies
A description of the policies and procedures that each Fund uses to
determine how to vote proxies relating to portfolio securities owned by the Fund and information regarding how each Fund voted proxies
relating to the portfolio of securities during the 12-month period ended June 30, 2021 are available to stockholders (i) without charge,
upon request by calling the Adviser at (913) 981-1020 or toll-free at (866) 362-9331 and on or through the Adviser’s Web site at
www.tortoiseecofin.com; and (ii) on the SEC’s Web site at www.sec.gov.
Form N-PORT
Each Fund files its complete schedule of portfolio holdings for
the first and third quarters of each fiscal year with the SEC on Part F of Form N-PORT. Each Fund’s Form Part F of Form N-PORT
are available without charge upon request by calling the Adviser at (866) 362-9331 or by visiting the SEC’s Web site at
www.sec.gov.
Each Fund’s N-PORTs are also available through the Adviser’s
Web site at www.tortoiseecofin.com.
Statement of Additional Information
The Statement of Additional Information (“SAI”) includes
additional information about each Fund’s directors and is available upon request without charge by calling the Adviser at (866)
362-9331 or by visiting the SEC’s Web site at www.sec.gov.
Certifications
Each Fund’s Chief Executive Officer has submitted to the New
York Stock Exchange the annual CEO certification as required by Section 303A.12(a) of the NYSE Listed Company Manual.
Each Fund has filed with the SEC, as an exhibit to its most recently
filed Form N-CSR, the certification of its Chief Executive Officer and Principal Financial Officer required by Section 302 of the Sarbanes-Oxley
Act.
Privacy Policy
In order to conduct its business, each Fund collects and maintains
certain nonpublic personal information about its stockholders of record with respect to their transactions in shares of each
Fund’s securities. This information includes the stockholder’s address, tax identification or Social Security number,
share balances, and distribution elections. We do not collect or maintain personal information about stockholders whose share
balances of our securities are held in “street name” by a financial institution such as a bank or broker.
We do not disclose any nonpublic personal information about you, the
Funds’ other stockholders or the Funds’ former stockholders to third parties unless necessary to process a transaction, service
an account, or as otherwise permitted by law.
To protect your personal information internally, we restrict access
to nonpublic personal information about the Funds’ stockholders to those employees who need to know that information to provide
services to our stockholders. We also maintain certain other safeguards to protect your nonpublic personal information.
Repurchase Disclosure
Notice is hereby given in accordance with Section 23(c) of the 1940
Act, that each Fund may from time to time purchase shares of its common stock in the open market.
2023 Semi-Annual Report | May 31, 2023
Additional Information
(unaudited) (continued)
Automatic Dividend Reinvestment
Each of NTG, TTP, NDP and TPZ have an Automatic Dividend Reinvestment
Plan and TYG has an Automatic Dividend Reinvestment and Cash Purchase Plan (each, a “Plan”). Each Plan allows participating
common stockholders to reinvest distributions, including dividends, capital gains and return of capital in additional shares of the Fund’s
common stock and TYG’s Plan also allows registered holders of the TYG’s common stock to make optional cash investments, in
accordance with TYG’s Plan, on a monthly basis.
If a stockholder’s shares are registered directly with the Fund
or with a brokerage firm that participates in the Fund’s Plan, all distributions are automatically reinvested for stockholders
by the Agent in additional shares of common stock of the Fund (unless a stockholder is ineligible or elects otherwise). Stockholders
holding shares that participate in the Plan in a brokerage account may not be able to transfer the shares to another broker and continue
to participate in the Plan. Stockholders who elect not to participate in the Plan will receive all distributions payable in cash paid
by check mailed directly to the stockholder of record (or, if the shares are held in street or other nominee name, then to such nominee)
by Computershare, as dividend paying agent. Distributions subject to tax (if any) are taxable whether or not shares are reinvested.
Any single investment pursuant to the cash purchase option under
TYG’s Plan must be in an amount of at least $100 and may not exceed $5,000 per month unless a request for waiver has been
granted. A request for waiver should be directed to TYG at 1-866-362-9331 and TYG has the sole discretion to grant any requested
waiver. Optional cash investments may be delivered to the Agent by personal check, by automatic or electronic bank account transfer
or by online access at www.computershare.com. TYG reserves the right to reject any purchase order. Stockholders who hold shares in
street or other nominee name who want to participate in optional cash investments should contact their broker, bank or other
nominee and follow their instructions. There is no obligation to make an optional cash investment at any time, and the amount of
such investments may vary from time to time. Optional cash investments must be received by the Agent no later than two business
days prior to the monthly investment date (the “payment date”) for purchase of common shares on the next succeeding
purchase date under TYG’s Plan. Scheduled optional cash purchases may be cancelled or refunded upon a participant’s
written request received by the Agent at least two business days prior to the purchase date. Participants will not be able to
instruct the Agent to purchase common shares at a specific time or at a specific price.
If on the distribution payment date or, for TYG, the purchase date
for optional cash investments, the net asset value per share of the common stock is equal to or less than the market price per share
of common stock plus estimated brokerage commissions, the Fund will issue additional shares of common stock to participants. The
number of shares will be determined by the greater of the net asset value per share or 95 percent of the market price. Otherwise,
shares generally will be purchased on the open market by the Agent as soon as possible following the payment date or purchase date,
but in no event later than 30 days after such date except as necessary to comply with applicable law. There are no brokerage charges
with respect to shares issued directly by the Fund as a result of distributions payable either in shares or in cash or, for TYG, as
a result of optional cash investments. However, each participant will pay a pro rata share of brokerage commissions incurred with
respect to the Agent’s open-market purchases in connection with the reinvestment of distributions or optional cash
investments. If a participant elects to have the Agent sell part or all of his or her common stock and remit the proceeds, such
participant will be charged a transaction fee of $15.00 plus his or her pro rata share of brokerage commissions on the shares
sold.
Participation is completely voluntary. Stockholders may elect not to
participate in the Plan, and participation may be terminated or resumed at any time without penalty, by giving notice in writing, by
telephone or Internet to Computershare, the Plan Agent, at the address set forth below. Such termination will be effective with respect
to a particular distribution if notice is received prior to such record date.
Additional information about the Plan may be obtained by writing to
Computershare Trust Company, N.A, P.O. Box 30170, College Station, TX 77842-3170. You may also contact Computershare by phone at (800)
426-5523 or visit their Web site at www.computershare.com.
Office of the Company
and of the Investment Adviser
Tortoise Capital Advisors, L.L.C.
6363 College Boulevard, Suite 100A
Overland Park, KS 66211
(913) 981-1020
(913) 981-1021 (fax)
www.tortoiseecofin.com
Board of Directors of
Tortoise Energy Infrastructure Corp.
Tortoise Midstream Energy Fund, Inc.
Tortoise Pipeline & Energy Fund, Inc.
Tortoise Energy Independence Fund, Inc.
Tortoise Power and Energy Infrastructure Fund, Inc.
Ecofin Sustainable and Social Impact Term Fund
H. Kevin Birzer, Chairman
Tortoise Capital Advisors, L.L.C.
Rand C. Berney
Independent
Conrad S. Ciccotello
Independent
Alexandra Herger
Independent
Jennifer Paquette
Independent
Administrator
U.S. Bancorp Fund Services, LLC
615 East Michigan St.
Milwaukee, Wis. 53202
Custodian
U.S. Bank, N.A.
1555 North Rivercenter Drive, Suite 302
Milwaukee, Wis. 53212
Transfer, Dividend Disbursing
and Reinvestment Agent
Computershare Trust Company, N.A. /
Computershare Inc.
P.O. Box 30170
College Station, Tex. 77842-3170
(800) 426-5523
www.computershare.com
Legal Counsel
Husch Blackwell LLP
4801 Main St.
Kansas City, Mo. 64112
Investor Relations
(866) 362-9331
info@tortoiseecofin.com
Stock Symbols
Listed NYSE Symbols: TYG, NTG, TTP, NDP, TPZ, TEAF
This report is for stockholder information. This is not a prospectus
intended for use in the purchase or sale of fund shares. Past performance is no guarantee of future results and your investment may
be worth more or less at the time you sell.
![](https://www.sec.gov/Archives/edgar/data/1526329/000120677423000933/ttp4223435-ncsrs1x1x1.jpg)
6363 College Boulevard, Suite 100A
Overland Park, KS 66211
www.tortoiseecofin.com
(b) Not applicable.
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. Investments.
| (a) | Schedule of Investments is included as part of the report to shareholders filed under Item 1. |
Item 7. Disclosure of Proxy Voting Policies and
Procedures for Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
There have been
no changes to the portfolio managers identified in the response to this Item in the Registrant’s most recent annual report on Form
N-CSR.
Item 9. Purchases of Equity Securities by Closed-End
Management Investment Company and Affiliated Purchasers.
Period |
(a)
Total Number of
Shares (or Units)
Purchased |
(b)
Average Price Paid
per Share (or Unit) |
(c)
Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs |
(d)
Maximum Number (or
Approximate Dollar
Value) of Shares (or
Units) that May Yet
Be Purchased Under
the Plans or Programs |
Month #1
12/1/22-12/31/22 |
0 |
$0 |
0 |
$0 |
Month #2
1/1/23-1/31/23 |
0 |
$0 |
0 |
$0 |
Month #3
2/1/23-2/28/23 |
0 |
$0 |
0 |
$0 |
Month #4
3/1/23-3/31/23 |
0 |
$0 |
0 |
$0 |
Month #5
4/1/23-4/30/23 |
0 |
$0 |
0 |
$0 |
Month #6
5/1/23-5/31/23 |
0 |
$0 |
0 |
$0 |
Total |
0 |
$0 |
0 |
$0 |
Item 10. Submission of Matters to a Vote of Security Holders.
None.
Item 11. Controls and Procedures.
(a) The Registrant’s Chief Executive Officer,
and its Principal Financial Officer and Treasurer 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
Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.
(b) There were no changes in the Registrant’s
internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during 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. Disclosure of Securities Lending Activities For Closed-End
Management Investment Companies.
The Registrant does not participate in securities lending activities.
Item 13. Exhibits.
(a)(1) Any code of ethics or amendment thereto, that is the
subject of the disclosure required by Item 2, to the extent that the Registrant intends to satisfy Item 2 requirements through filing
of an exhibit. Not applicable for semi-annual reports.
(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
(3) Any written solicitation to purchase securities under Rule 23c-1
under the Act sent or given during the period covered by the report by or on behalf of the Registrant to 10 or more persons. None.
(b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.
(c) Notices to the Registrant’s common shareholders in accordance with an order under Section 6(c) of the 1940 Act granting an exemption from Section 19(b) of the 1940 Act and Rule 19b-1 under the 1940 Act, dated September 12, 20111
1 The Registrant is relying on exemptive relief from the Securities
and Exchange Commission permitting it to make periodic distributions of long-term capital gains with respect to its outstanding common
shares as frequently as twelve times each year. This relief is conditioned, in part, on Registrant making the disclosures to the holders
of the Registrant’s common shares, in addition to the information required by Section 19(a) of the 1940 Act and Rule 19a-1 thereunder.
The Registrant is likewise obligated to file with the Commission the information contained in any such notice to shareholders and, in
that regard, has attached hereto copies of each such notice made during the period.
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.
(Registrant) |
Tortoise Pipeline & Energy Fund, Inc. |
|
|
|
|
By (Signature and Title) |
/s/ P. Bradley Adams |
|
|
P. Bradley Adams, Chief Executive Officer |
|
|
|
|
Date |
August 7, 2023 |
|
|
|
|
|
|
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 (Signature and Title) |
/s/ P. Bradley Adams |
|
|
P. Bradley Adams, Chief Executive Officer |
|
|
|
|
Date |
August 7, 2023 |
|
|
|
|
|
By (Signature and Title) |
/s/ Courtney Gengler |
|
|
Courtney Gengler, Principal Financial Officer and Treasurer |
|
Date |
August 7, 2023 |
|
|
EX-99.CERT
CERTIFICATIONS
I, P. Bradley Adams, certify that:
1. I
have reviewed this report on Form N-CSR of Tortoise Pipeline & Energy Fund, Inc.;
2. Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;
3. Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include
a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The
registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d)
under the Investment Company Act of 1940) for the registrant and have:
(a) Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
(b) Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation;
and
(d) Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered
by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over
financial reporting; and
5. The
registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):
(a) All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b) Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
Date: August 7, 2023 |
/s/ P. Bradley Adams |
|
P. Bradley Adams
Chief Executive Officer |
EX-99.CERT
CERTIFICATIONS
I, Courtney Gengler, certify that:
1. I
have reviewed this report on Form N-CSR of Tortoise Pipeline & Energy Fund, Inc.;
2. Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;
3. Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include
a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The
registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d)
under the Investment Company Act of 1940) for the registrant and have:
(a) Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
(b) Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation;
and
(d) Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered
by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over
financial reporting; and
5. The
registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):
(a) All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b) Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
Date: August 7, 2023 |
/s/ Courtney Gengler |
|
Courtney Gengler
Principal Financial Officer and Treasurer |
EX-99.906CERT
Certification Pursuant to Section 906 of the
Sarbanes-Oxley Act
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned
officer of Tortoise Pipeline & Energy Fund, Inc. does hereby certify, to such officer’s knowledge, that the report on Form N-CSR
of Tortoise Pipeline & Energy Fund, Inc. for the period ended May 31, 2023 fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as applicable, and that the information contained in the Form N-CSR fairly presents, in
all material respects, the financial condition and results of operations of Tortoise Pipeline & Energy Fund, Inc. for the stated period.
/s/ P. Bradley Adams |
|
P. Bradley Adams
Chief Executive Officer
Tortoise Pipeline & Energy Fund, Inc. |
|
|
|
Dated: August 7, 2023 |
|
|
|
/s/ Courtney Gengler |
|
Courtney Gengler
Principal Financial Officer and Treasurer
Tortoise Pipeline & Energy Fund, Inc. |
|
|
|
Dated: August 7, 2023 |
|
This certification is being furnished pursuant to Item 13(b) of Form N-CSR and Section
906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by Tortoise Pipeline & Energy Fund, Inc. for purposes of Section
18 of the Securities Exchange Act of 1934.
EX-99.19A
Tortoise
Pipeline &
Energy Fund, Inc. (NYSE: TTP)
Section 19(a) Notification of Sources of Distribution
Distribution Period |
February 2023 |
|
|
Distribution Amount per Share |
$0.59 |
The following table sets forth the estimated amounts of the current distribution,
payable February 28, 2023, and the cumulative distribution paid this fiscal year to date from the following sources: net investment income,
net realized short-term capital gains, net realized long-term capital gains and return of capital. All amounts are expressed per common
share.
Estimated Sources of Distributions
| |
($) Current
Distribution | |
% Breakdown of
the Current
Distribution | |
($) Total Cumulative
Distributions for the
Fiscal Year to Date | |
% Breakdown of the
Total Cumulative
Distributions for the
Fiscal Year to Date |
Net Investment Income | |
| 0.0000 | | |
| 0% | | |
| 0.0000 | | |
| 0% | |
Net Realized Short-Term Capital Gains | |
| 0.0000 | | |
| 0% | | |
| 0.0000 | | |
| 0% | |
Net Realized Long-Term Capital Gains | |
| 0.0786 | | |
| 13% | | |
| 0.0786 | | |
| 13% | |
Return of Capital | |
| 0.5114 | | |
| 87% | | |
| 0.5114 | | |
| 87% | |
Total (per common share) | |
| 0.5900 | | |
| 100% | | |
| 0.5900 | | |
| 100% | |
| |
| | | |
| | | |
| | | |
| | |
Average annual total return (in relation to NAV) for the 5 years ending on 1/31/2023 | | |
| -9.07% | |
Annualized current distribution rate expressed as a percentage of NAV as of 1/31/2023 | |
| 6.94% | |
| |
| | | |
| | | |
| | | |
| | |
Cumulative total return (in relation to NAV) for the fiscal year through 1/31/2023 | | |
| -2.13% | |
Cumulative fiscal year distributions as a percentage of NAV as of 1/31/2023 | | |
| 1.73% | |
You should not draw any conclusions about TTP’s investment performance from
the amount of this distribution or from the terms of TTP’s distribution policy.
TTP estimates that it has distributed more than its income and net realized
capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when
some or all of the money that you invested in TTP is paid back to you. A return of capital distribution does not necessarily reflect TTP’s
investment performance and should not be confused with “yield” or “income.”
The amounts and sources of distributions reported are only estimates and
are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend
upon TTP’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. TTP will
send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
TTP is a non-diversified,
closed-end management investment company that seeks to obtain a high level of total return with an emphasis on current distributions.
TTP invests primarily in equity securities of pipeline companies that transport natural gas, natural gas liquids (NGLs), crude oil and
refined products and, to a lesser extent, in other energy infrastructure companies. For more information, visit TTP’s website at cef.tortoiseecofin.com or call (866) 362-9331.
6363 College Boulevard, Suite
100A, Overland Park, KS 66211 | Main 1-913-981-1020 | Fax 1-913-981-1021 | www.TortoiseEcofin.com
Tortoise
Pipeline &
Energy Fund, Inc. (NYSE: TTP)
Section 19(a) Notification of Sources of Distribution
Distribution Period |
May 2023 |
|
|
Distribution Amount per Share |
$0.59 |
The following table sets forth the estimated amounts of the current distribution,
payable May 31, 2023, and the cumulative distribution paid this fiscal year to date from the following sources: net investment income,
net realized short-term capital gains, net realized long-term capital gains and return of capital. All amounts are expressed per common
share.
Estimated Sources of Distributions
| |
($) Current
Distribution | |
% Breakdown of
the Current
Distribution | |
($) Total Cumulative
Distributions for the
Fiscal Year to
Date | |
% Breakdown of the
Total Cumulative
Distributions for the
Fiscal Year to Date |
Net Investment Income | |
| 0.0000 | | |
| 0% | | |
| 0.0000 | | |
| 0% | |
Net Realized Short-Term Capital
Gains | |
| 0.0011 | | |
| 0% | | |
| 0.0009 | | |
| 0% | |
Net Realized Long-Term Capital
Gains | |
| 0.4048 | | |
| 69% | | |
| 0.4880 | | |
| 41% | |
Return of Capital | |
| 0.1841 | | |
| 31% | | |
| 0.6911 | | |
| 59% | |
Total (per common share) | |
| 0.5900 | | |
| 100% | | |
| 1.1800 | | |
| 100% | |
| |
| | | |
| | | |
| | | |
| | |
Average annual total return (in relation to NAV) for the 5 years ending on 4/30/2023 | |
| -7.81% | |
Annualized current distribution rate expressed as a percentage of NAV as of 4/30/2023 | |
| 7.30% | |
| |
| | |
Cumulative total return (in relation to NAV) for the fiscal year through 4/30/2023 | |
| -5.04% | |
Cumulative fiscal year distributions as a percentage of NAV as of 4/30/2023 | |
| 3.65% | |
You should not draw any conclusions about TTP’s investment performance from
the amount of this distribution or from the terms of TTP’s distribution policy.
TTP estimates that it has distributed more than its income and net realized
capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when
some or all of the money that you invested in TTP is paid back to you. A return of capital distribution does not necessarily reflect TTP’s
investment performance and should not be confused with “yield” or “income.”
The amounts and sources of distributions reported are only estimates and
are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend
upon TTP’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. TTP will
send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
TTP is a non-diversified, closed-end management investment
company that seeks to obtain a high level of total return with an emphasis on current distributions. TTP invests primarily in equity
securities of pipeline companies that transport natural gas, natural gas liquids (NGLs), crude oil and refined products and, to a lesser
extent, in other energy infrastructure companies. For more information, visit TTP’s website at cef.tortoiseecofin.com or call
(866) 362-9331.
6363 College Boulevard, Suite 100A, Overland Park,
KS 66211 | Main 1-913-981-1020 | Fax 1-913-981-1021 | www.TortoiseEcofin.com
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