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
811-21700
Tortoise North American Energy Corporation
(Exact name of registrant as specified in charter)
11550 Ash Street, Suite 300, Leawood, KS 66211
(Address of principal executive offices) (Zip code)
David J. Schulte
11550 Ash Street, Suite 300, Leawood, KS 66211
(Name and address of agent for service)
913-981-1020
Registrant's telephone number, including area code
Date of fiscal year end:
November 30
Date of reporting period:
May 31, 2012
Item 1. Reports to Stockholders.
Company at a
Glance
Tortoise North American Energy
Corp. (NYSE: TYN) is a non-diversified closed-end investment company focused
primarily on investing in equity securities of companies in the energy sector
with their primary operations in North America, including oil and gas
exploitation, energy infrastructure and energy shipping companies. Our
investments are primarily in Master Limited Partnerships (MLPs) and their
affiliates, but may also include Canadian royalty and income trusts, common
stock, debt and other securities issued by energy companies that are not
MLPs.
Investment Goals: Yield, Growth
and Quality
TYN seeks a high level of total
return with an emphasis on current distributions paid to
stockholders.
In seeking to achieve
yield,
we target
distributions to our stockholders that are roughly equal to the underlying yield
on a direct investment in MLPs. In order to accomplish this, we maintain our
strategy of investing primarily in companies in the energy sector with
attractive current yields and growth potential.
We seek to achieve distribution
growth
as revenues of our underlying companies grow with the economy, with the
population and through rate increases. This revenue growth generally leads to
increased operating profits, and when combined with internal expansion projects
and acquisitions, is expected to provide attractive growth in distributions to
us.
TYN seeks to achieve
quality
by
investing in companies operating energy infrastructure assets that are critical
to the North American economy. Often these assets would be difficult to
replicate. We also back experienced management teams with successful track
records. By investing in TYN, our stockholders have access to a portfolio that
is diversified through geographic regions and across product lines,
including natural gas, natural gas liquids, crude oil and refined products.
About U.S. Energy Infrastructure
Master Limited Partnerships (MLPs)
MLPs are limited partnerships whose
units trade on public exchanges such as the New York Stock Exchange (NYSE), the
NYSE Alternext US and the NASDAQ. Buying MLP units makes an investor a limited
partner in the MLP. There are currently more than
80 MLPs in the
market, mostly in industries related to energy and natural resources. We invest
primarily in MLPs in the energy infrastructure sector.
Energy
infrastructure MLPs are engaged in the transportation, storage and processing of
crude oil, natural gas and refined products from production points to the
end users.
TYN Investment
Features
We provide stockholders an
alternative to investing directly in MLPs and their affiliates. We offer
investors the opportunity to receive an attractive distribution return with a
historically low return correlation to returns on stocks and bonds.
Additional features
include:
-
One Form
1099 per stockholder at the end of the year, multiple K-1s and multiple state
filings for individual partnership
investments;
-
A professional management team, with more
than 130 years combined investment experience;
-
The ability to access investment grade credit
markets to enhance stockholder return; and
-
Access to direct placements and other
investments not available through the public
market.
Dear Fellow Stockholders,
Macro uncertainty dominated the last
month of our second fiscal quarter ended May 31, 2012, with European turmoil
taking center stage. This volatility reversed the years earlier broader market
gains, with shorter-term market noise not allowing time for investors to
differentiate quality. As a result, equity markets, including the energy sector
as a whole, were down in the month of May, as evidenced by the S&P 500
®
and
S&P 500 Energy
®
total return of negative 6.0 percent and negative
10.2 percent, respectively.
The short-term market environment
also impacted master limited partnerships (MLPs) across the board. However,
midstream MLPs have demonstrated their resiliency across several cycles and we
continue to believe their businesses remain strong, anchored in predictable
distributions. Due to multi-year hedges, upstream MLPs continued to deliver
consistent distributions despite the commodity price volatility experienced
during the quarter as the price of oil fell by over 19 percent to $86.53 and the
price of natural gas reached decade lows.
Master Limited Partnership Sector
Review
The Tortoise MLP Index
®
posted a
total return of negative 9.1 percent and positive 1.7 percent for the three
months and six months ended May 31, 2012, respectively. Pipeline MLPs performed
well on a relative basis, as evidenced by the Tortoise Long-Haul Pipeline MLP
Indexs total return of negative 8.0 percent and positive 4.8 percent,
respectively, for the same periods. Due to commodity price volatility, E&P
MLPs, as represented by the Tortoise Upstream MLP Index, had a total return of
negative 11.0 percent and negative 7.0 percent, respectively, for the same
periods.
We remain confident in our distribution growth expectations for
midstream MLPs of 6 to 8 percent for 2012, as heightened activity in both
M&A and internal growth projects continue. We just witnessed three years of
more than $100 billion of acquisitions and internal growth projects, and we
anticipate another $100 billion over the next three years. M&A activity
remains elevated in 2012 with approximately $22.4 billion fiscal year-to-date,
including $17.4 billion and $2.9 billion in pipeline and upstream related
acquisitions, respectively.
Also driving activity are significant
internal growth projects as the continued emergence of the shale plays is
highlighting the crude oil and natural gas production growth potential in both
the U.S. and Canada. This production growth is also presenting numerous
opportunities for MLPs to build out supporting pipeline, processing and
fractionation infrastructure.
Capital markets remain supportive of this
activity, with MLPs issuing over $10.7 billion of equity and $15.5 billion of
debt for the fiscal year-to-
date, consistent
with 2010 and 2011 levels at this point in the year. Of this, the total issuance
of pipeline MLPs and E&P MLPs was approximately $17.7 billion and $5.1
billion, respectively.
Fund Performance
Review
Our total assets decreased from
$229.9 million on Feb. 29, 2012, to $202.7 million as of our second fiscal
quarter end, resulting primarily from market depreciation of our investments.
Our market-based total return was negative 5.6 percent and positive 3.4 percent
(both including the reinvestment of distributions) for the three months and six
months ended May 31, 2012, respectively.
We paid a distribution of $0.3875 per
common share ($1.55 annualized) to our stockholders on June 1, 2012, an increase
of 0.6 percent from our prior quarterly distribution. This distribution
represented an annualized yield of 6.4 percent based on our fiscal quarter
closing price of $24.09. Our distribution coverage (distributable cash flow
divided by distributions) for the second fiscal quarter was 105.8 percent. For
tax purposes, we currently expect 80 to 100 percent of TYNs 2012 distributions
to be characterized as qualified dividend income, or QDI, with the remainder as
return of capital. A final determination of the characterization will be made in
January 2013.
We ended the second fiscal quarter
with leverage at 14.8 percent of total assets, which had a weighted average
maturity of 5.3 years, a weighted average cost of 2.4 percent, and over 83
percent at fixed rates.
Additional information about our financial performance
is available in the Key Financial Data and Managements Discussion of this
report.
Conclusion
We will continue to monitor the
impact of the overall macroeconomic environment, but believe these assets,
critical to our energy needs, are attractive to investors in both growth periods
and uncertain environments.
Sincerely,
The Managing
Directors
Tortoise Capital Advisors, L.L.C.
The adviser to Tortoise North American Energy
Corp.
|
|
|
H. Kevin Birzer
|
Zachary A. Hamel
|
Kenneth P. Malvey
|
|
|
|
Terry
Matlack
|
David J.
Schulte
|
|
(Unaudited)
2012 2nd Quarter
Report
1
Key Financial
Data
(Supplemental Unaudited
Information)
(dollar amounts in thousands unless otherwise
indicated)
|
The information presented below
regarding Distributable Cash Flow and Selected Financial Information is
supplemental non-GAAP financial information, which we believe is meaningful to
understanding our operating performance. The Distributable Cash Flow Ratios
include the functional equivalent of EBITDA for non-investment companies, and we
believe they are an important supplemental measure of performance and promote
comparisons from period-to-period. This information is supplemental, is not
inclusive of required financial disclosures (e.g. Total Expense Ratio), and
should be read in conjunction with our full financial statements.
|
|
2011
|
|
|
2012
|
|
|
|
Q2
(1)
|
|
|
Q3
(1)
|
|
|
Q4
(1)
|
|
|
Q1
(1)
|
|
|
Q2
(1)
|
|
Total Income from Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions received from master limited partnerships
|
|
$
|
2,736
|
|
|
$
|
2,876
|
|
|
$
|
2,946
|
|
|
$
|
3,069
|
|
|
$
|
3,086
|
|
Dividends paid in
stock
|
|
|
364
|
|
|
|
339
|
|
|
|
272
|
|
|
|
201
|
|
|
|
211
|
|
Dividends from common stock
|
|
|
190
|
|
|
|
222
|
|
|
|
137
|
|
|
|
150
|
|
|
|
151
|
|
Interest and dividend
income
|
|
|
46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
|
60
|
|
|
|
|
|
|
|
286
|
|
|
|
|
|
|
|
|
|
Total from investments
|
|
|
3,396
|
|
|
|
3,437
|
|
|
|
3,641
|
|
|
|
3,420
|
|
|
|
3,448
|
|
Operating Expenses Before Leverage Costs and Current
Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advisory fees, net of
expense reimbursement
|
|
|
498
|
|
|
|
483
|
|
|
|
472
|
|
|
|
535
|
|
|
|
549
|
|
Other
operating expenses
|
|
|
129
|
|
|
|
126
|
|
|
|
114
|
|
|
|
134
|
|
|
|
129
|
|
|
|
|
627
|
|
|
|
609
|
|
|
|
586
|
|
|
|
669
|
|
|
|
678
|
|
Distributable cash flow before leverage costs and current taxes
|
|
|
2,769
|
|
|
|
2,828
|
|
|
|
3,055
|
|
|
|
2,751
|
|
|
|
2,770
|
|
Leverage
costs
(2)
|
|
|
260
|
|
|
|
117
|
|
|
|
180
|
|
|
|
184
|
|
|
|
189
|
|
Current
income tax expense
|
|
|
9
|
|
|
|
9
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
Distributable Cash Flow
(3)
|
|
$
|
2,500
|
|
|
$
|
2,702
|
|
|
$
|
2,866
|
|
|
$
|
2,567
|
|
|
$
|
2,581
|
|
|
As a percent of average total
assets
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
from investments
|
|
|
6.37
|
%
|
|
|
6.62
|
%
|
|
|
7.19
|
%
|
|
|
6.26
|
%
|
|
|
6.22
|
%
|
Operating expenses before
leverage costs and current taxes
|
|
|
1.18
|
%
|
|
|
1.17
|
%
|
|
|
1.16
|
%
|
|
|
1.22
|
%
|
|
|
1.22
|
%
|
Distributable cash flow before leverage costs and current taxes
|
|
|
5.19
|
%
|
|
|
5.45
|
%
|
|
|
6.03
|
%
|
|
|
5.04
|
%
|
|
|
5.00
|
%
|
As a percent of average net
assets
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
from investments
|
|
|
8.31
|
%
|
|
|
8.75
|
%
|
|
|
9.55
|
%
|
|
|
8.41
|
%
|
|
|
8.52
|
%
|
Operating expenses before
leverage costs and current taxes
|
|
|
1.53
|
%
|
|
|
1.55
|
%
|
|
|
1.54
|
%
|
|
|
1.65
|
%
|
|
|
1.68
|
%
|
Leverage costs and current taxes
|
|
|
0.66
|
%
|
|
|
0.32
|
%
|
|
|
0.50
|
%
|
|
|
0.45
|
%
|
|
|
0.47
|
%
|
Distributable cash
flow
|
|
|
6.12
|
%
|
|
|
6.88
|
%
|
|
|
7.51
|
%
|
|
|
6.31
|
%
|
|
|
6.37
|
%
|
|
Selected Financial Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions
paid on common stock
|
|
$
|
2,361
|
|
|
$
|
2,392
|
|
|
$
|
2,408
|
|
|
$
|
2,424
|
|
|
$
|
2,440
|
|
Distributions paid on common
stock per share
|
|
|
0.3750
|
|
|
|
0.3800
|
|
|
|
0.3825
|
|
|
|
0.3850
|
|
|
|
0.3875
|
|
Distribution
coverage percentage for period
(5)
|
|
|
105.9
|
%
|
|
|
113.0
|
%
|
|
|
119.0
|
%
|
|
|
105.9
|
%
|
|
|
105.8
|
%
|
Net realized gain, net of income
taxes, for the period
|
|
|
7,040
|
|
|
|
851
|
|
|
|
5,162
|
|
|
|
1,500
|
|
|
|
495
|
|
Total assets,
end of period
|
|
|
207,450
|
|
|
|
200,317
|
|
|
|
208,041
|
|
|
|
229,941
|
|
|
|
202,720
|
|
Average total assets during
period
(6)
|
|
|
211,556
|
|
|
|
205,974
|
|
|
|
203,054
|
|
|
|
219,892
|
|
|
|
220,486
|
|
Leverage
(7)
|
|
|
26,500
|
|
|
|
26,100
|
|
|
|
31,300
|
|
|
|
30,300
|
|
|
|
30,000
|
|
Leverage as a percent of total
assets
|
|
|
12.8
|
%
|
|
|
13.0
|
%
|
|
|
15.0
|
%
|
|
|
13.2
|
%
|
|
|
14.8
|
%
|
Net unrealized
appreciation, end of period
|
|
|
58,667
|
|
|
|
53,928
|
|
|
|
54,362
|
|
|
|
67,223
|
|
|
|
51,876
|
|
Net assets, end of
period
|
|
|
159,100
|
|
|
|
152,721
|
|
|
|
155,942
|
|
|
|
167,697
|
|
|
|
149,643
|
|
Average net
assets during period
(8)
|
|
|
162,099
|
|
|
|
155,864
|
|
|
|
152,909
|
|
|
|
163,463
|
|
|
|
160,994
|
|
Net asset value per common
share
|
|
|
25.27
|
|
|
|
24.26
|
|
|
|
24.77
|
|
|
|
26.64
|
|
|
|
23.77
|
|
Market value per
common share
|
|
|
24.41
|
|
|
|
23.19
|
|
|
|
24.05
|
|
|
|
25.94
|
|
|
|
24.09
|
|
Shares outstanding
|
|
|
6,295,750
|
|
|
|
6,295,750
|
|
|
|
6,295,750
|
|
|
|
6,295,750
|
|
|
|
6,295,750
|
|
(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)
|
Leverage costs include
interest expense and other recurring leverage expenses.
|
(3)
|
Net investment income
(loss), before income taxes on the Statement of Operations is adjusted as
follows to reconcile to Distributable Cash Flow (DCF): increased by the
return of capital on MLP distributions, the value of paid-in-kind
distributions, distributions included in direct placement discounts, and
amortization of debt issuance costs; and decreased by current taxes paid
on net investment income.
|
(4)
|
Annualized for periods
less than one full year.
|
(5)
|
Distributable Cash Flow
as a percentage of distributions paid.
|
(6)
|
Computed by averaging
month-end values within each period.
|
(7)
|
Leverage consists of
long-term debt obligations and short-term borrowings.
|
(8)
|
Computed by averaging
daily values within each period.
|
2
Tortoise North American Energy Corp.
Managements Discussion
(Unaudited)
|
The information contained in this
section should be read in conjunction with our Financial Statements and the
Notes thereto. In addition, this report contains certain forward-looking
statements. These statements include the plans and objectives of management for
future operations and financial objectives and can be identified by the use of
forward-looking terminology such as may, will, expect, intend,
anticipate, estimate, or continue or the negative thereof or other
variations thereon or comparable terminology. These forward-looking statements
are subject to the inherent uncertainties in predicting future results and
conditions. Certain factors that could cause actual results and conditions to
differ materially from those projected in these forward-looking statements are
set forth in the Risk Factors section of our public filings with the
SEC.
Overview
Tortoise North American Energy
Corp.s (TYN or the Company) investment objective is to seek a high level of
total return for our stockholders, with an emphasis on distribution income paid
to stockholders. Our investment strategy requires us to invest at least 80
percent of our total assets in equity securities of companies in the energy
sector with their primary operations in North America, including energy
infrastructure, oil and gas exploitation and energy shipping companies. The
equity securities of the energy companies purchased by TYN consist primarily of
interests in MLPs. MLPs are publicly traded partnerships whose equity interests
are traded in the form of units on public exchanges, such as the NYSE or NASDAQ.
We invest primarily in MLPs through public market and private purchases. While
we are a registered investment company under the Investment Company Act of 1940,
as amended (the 1940 Act), we are not a regulated investment company for
federal tax purposes. Our distributions do not typically generate unrelated
business taxable income (UBTI) and our stock may therefore be suitable for
holding by pension funds, IRAs and mutual funds, as well as taxable accounts.
Tortoise Capital Advisors, L.L.C. serves as our investment adviser.
Company Update
Total assets decreased approximately
$27.2 million during the 2nd quarter primarily as a result of decreased market
values of our MLP investments. Average total assets for the quarter increased
slightly as compared to 1st quarter 2012, resulting in increased asset-based
expenses. Distribution increases from our MLP investments were in-line with our
expectations. Total leverage as a percent of total assets increased slightly
during the quarter and we increased our quarterly distribution to $0.3875 per
share. Additional information on these events and results of our operations are
discussed in more detail below.
Critical Accounting
Policies
The financial statements are based on
the selection and application of critical accounting policies, which require
management to make significant estimates and assumptions. Critical accounting
policies are those that are both important to the presentation of our financial
condition and results of operations and require managements most difficult,
complex, or subjective judgments. Our critical accounting policies are those
applicable to the valuation of investments,
tax matters and certain revenue recognition matters as discussed in Note
2 in the Notes to Financial Statements.
Determining Distributions to
Stockholders
Our portfolio generates cash flow
from which we pay distributions to stockholders. Our Board of Directors has
adopted a policy of declaring what it believes to be sustainable distributions.
In determining distributions, our Board of Directors considers a number of
current and anticipated factors, including, among others, distributable cash
flow, realized and unrealized gains, leverage amounts and rates, current and
deferred taxes payable, and potential volatility in returns from our investments
and the overall market. Over the long term, we expect to distribute
substantially all of our DCF to holders of common stock. Our Board of Directors
reviews the distribution rate quarterly, and may adjust the quarterly
distribution throughout the year.
Determining DCF
DCF is distributions received from
investments, less expenses. The total distributions received from our
investments include the amount received by us as cash distributions from MLPs,
paid-in-kind distributions, and dividend and interest payments. The total
expenses include current or anticipated operating expenses, leverage costs and
current income taxes. Current income taxes include taxes paid on net investment
income of the Company, in addition to foreign taxes, if any. Taxes incurred from
realized gains on the sale of investments, expected tax benefits and deferred
taxes are not included in DCF.
The Key Financial Data table
discloses the calculation of DCF and should be read in conjunction with this
discussion. The difference between distributions received from investments in
the DCF calculation and total investment income as reported in the Statement of
Operations, is reconciled as follows: the Statement of Operations, in conformity
with U.S. generally accepted accounting principles (GAAP), recognizes
distribution income from MLPs and common stock on their ex-dates, whereas the
DCF calculation reflects distribution income on their pay dates; GAAP recognizes
that a significant portion of the cash distributions received from MLPs are
characterized as a return of capital and therefore excluded from investment
income, whereas the DCF calculation includes the return of capital; and
distributions received from investments in the DCF calculation include the value
of dividends paid-in-kind (additional stock or MLP units), whereas such amounts
are not included as income for GAAP purposes, and includes distributions related
to direct investments when the purchase price is reduced in lieu of receiving
cash distributions. The treatment of expenses in the DCF calculation also
differs from what is reported in the Statement of Operations. In addition to the
total operating expenses, including expense reimbursement, as disclosed in the
Statement of Operations, the DCF calculation reflects interest expense, realized
and unrealized gains (losses) on interest rate swap settlements, other leverage
expenses, and current taxes paid on net investment income. A reconciliation of
Net Investment Loss, before Income Taxes to DCF is included below.
2012 2nd Quarter
Report
3
Managements Discussion
(Unaudited)
(Continued)
|
Distributions Received from
Investments
Our ability to generate cash is
dependent on the ability of our portfolio of investments to generate cash flow
from their operations. In order to maintain and grow distributions to our
stockholders, we evaluate each holding based upon its contribution to our
investment income, our anticipation of its growth rate, and its risk relative to
other potential investments.
We concentrate on investments we
believe can expect an increasing demand for services from economic and
population growth. We seek well-managed businesses with hard assets and stable
recurring revenue streams.
Total distributions received from our
investments for the 2nd quarter 2012 was approximately $3.4 million. This
represents a 0.8 percent increase as compared to 1st quarter 2012 and an
increase of approximately 1.5 percent as compared to 2nd quarter 2011. These
changes reflect increases in per share distribution rates on our MLP
investments, offset by the impact of trading activity wherein certain
investments with higher current yields and lower expected future growth were
sold and replaced with investments that had lower current yields and higher
expected future growth.
Expenses
We incur two types of expenses: (1)
operating expenses, consisting primarily of the advisory fee, and (2) leverage
costs. On a percentage basis, operating expenses before leverage costs and
current taxes were an annualized 1.22 percent of average total assets for the
2nd quarter 2012 as compared to 1.18 percent for the 2nd quarter 2011 and 1.22
percent for the 1st quarter 2012. The change from 2nd quarter 2011 is primarily
the result of a reduction in the fee waiver of 0.05 percent that occurred during
1st quarter 2012.
Advisory fees for the 2nd quarter
2012 increased 2.6 percent from 1st quarter 2012 as a result of increased
average managed assets for the quarter as discussed above. Other operating
expenses decreased slightly as compared to 1st quarter 2012.
Leverage costs consist of two major
components: (1) the direct interest expense, which will vary from period to
period as our margin borrowing facility has a variable interest rate, and (2)
the realized and unrealized gain or loss on our interest rate swap settlements.
Detailed information on our margin borrowing facility is included in the
Liquidity and Capital Resources section below.
Total leverage costs for DCF purposes
were approximately $189,000 for the 2nd quarter 2012 compared to $184,000 for
the 1st quarter 2012. Our average annualized total cost of leverage, including
interest rate swaps, was 2.39 percent as of May 31, 2012.
As indicated in Note 9 of our Notes
to Financial Statements, we have entered into $25 million notional amount of
interest rate swap contracts with The Bank of Nova Scotia in an attempt to
reduce a portion of the interest rate risk arising
from our leveraged capital structure. TYN has agreed to pay The Bank of
Nova Scotia a fixed rate while receiving a floating rate based upon the 1-month
U.S. Dollar London Interbank Offered Rate (LIBOR). The spread between the
fixed swap rate and LIBOR is reflected in our Statement of Operations as a
realized or unrealized gain when LIBOR exceeds the fixed rate (The Bank of Nova
Scotia pays TYN the net difference) or a realized or unrealized loss when the
fixed rate exceeds LIBOR (TYN pays The Bank of Nova Scotia the net difference).
The interest rate swap contracts have a weighted average fixed rate of 1.70
percent and weighted average remaining maturity of approximately 6.3 years at
May 31, 2012. This swap arrangement effectively fixes the cost of approximately
83 percent of our outstanding leverage as of May 31, 2012 over the remaining
swap period.
Interest accrues on the margin
facility at a rate equal to 1-month LIBOR plus 0.85 percent and unused balances
are subject to a fee of 0.25 percent. The annual rate of leverage may vary in
future periods as a result of changes in LIBOR, the utilization of our margin
facility, and maturity of our interest rate swap contracts. Additional
information on our leverage is disclosed below in Liquidity and Capital
Resources and in our Notes to Financial Statements.
Distributable Cash Flow
For 2nd quarter 2012, our DCF was
approximately $2.6 million, an increase of 0.5 percent as compared to 1st
quarter 2012. The change is the net result of changes to distributions and
expenses as outlined above. We declared a distribution of $2.4 million, or
$0.3875 per share, during the quarter. This represents an increase of $0.0125
per share as compared 2nd quarter 2011 and an increase of $0.0025 per share as
compared to 1st quarter 2012.
Our distribution coverage ratio was
105.8 percent for 2nd quarter 2012. Our goal is to pay what we believe to be
sustainable distributions with any increases safely covered by earned DCF. A
distribution coverage ratio of greater than 100 percent provides flexibility for
on-going management of the portfolio, changes in leverage costs and other
expenses. An on-going distribution coverage ratio of less than 100 percent will,
over time, erode the earning power of a portfolio and may lead to lower
distributions or portfolio managers taking on more risk than they otherwise
would.
Net investment loss before income
taxes on the Statement of Operations is adjusted as follows to reconcile to DCF
for 2012 YTD and 2nd quarter 2012 (in thousands):
|
|
2012
YTD
|
|
2nd Qtr 2012
|
Net Investment
Loss, before Income Taxes
|
|
$
|
(1,570
|
)
|
|
|
$
|
(1,280
|
)
|
Adjustments to reconcile to
DCF:
|
|
|
|
|
|
|
|
|
|
Dividends paid in stock
|
|
|
412
|
|
|
|
|
211
|
|
Distributions characterized as return of capital
|
|
|
6,489
|
|
|
|
|
3,743
|
|
Interest rate swap expenses
|
|
|
(183
|
)
|
|
|
|
(93
|
)
|
DCF
|
|
$
|
5,148
|
|
|
|
$
|
2,581
|
|
4
Tortoise North American Energy Corp.
Managements Discussion
(Unaudited)
(Continued)
|
Liquidity and Capital
Resources
We had total assets of $203 million
at quarter-end. Our total assets reflect the value of our investments, which are
itemized in the Schedule of Investments. It also reflects cash, interest and
receivables and any expenses that may have been prepaid. During 2nd quarter
2012, total assets decreased by approximately $27.2 million. This change was
primarily the result of a $26.9 million decrease in the value of our investments
as reflected by the change in realized and unrealized gains on investments
(excluding return of capital on distributions).
Total leverage outstanding at May 31,
2012 was $30.0 million, a decrease of $0.3 million as compared to February 29,
2012. Total leverage represented 14.8 percent of total assets at May 31, 2012,
an increase from 13.2 percent of total assets at February 29, 2012 and an
increase from 12.8 percent of total assets at May 31, 2011. Our leverage as a
percent of total assets remains below our long-term target level of 20 percent
of total assets. This allows the opportunity to add leverage when compelling
investment opportunities arise. Temporary increases to up to 25 percent of our
total assets may be permitted, provided that such leverage is consistent with
the limits set forth in the 1940 Act, and that such leverage is expected to be
reduced over time in an orderly fashion to reach our long-term target. Our
leverage ratio is impacted by increases or decreases in MLP values, issuance of
equity and/or the sale of securities where proceeds are used to reduce
leverage.
We have used leverage to acquire
securities consistent with our investment philosophy. The terms of our leverage
are governed by regulatory and contractual asset coverage requirements that
arise from the use of leverage. Additional information on our leverage and asset
coverage requirements is discussed in Note 8 in the Notes to Financial
Statements. Our coverage ratio is updated each week on our Web site at
www.tortoiseadvisors.com.
Taxation of our Distributions and
Income Taxes
We invest in partnerships that
generally have cash distributions in excess of their income for accounting and
tax purposes. Accordingly, the distributions include a return of capital
component for accounting and tax purposes. Distributions declared and paid by us
in a year generally differ from taxable income for that year, as such
distributions may include the distribution of current year taxable income or
return of capital.
The taxability of the distribution
you receive depends on whether we have annual earnings and profits (E&P).
E&P is primarily comprised of the taxable income from MLPs with certain
specified adjustments as reported on annual K-1s, fund operating expenses and
net realized gains. If we have E&P, it is first allocated to preferred
shares (if any) and then to the common shares.
In the event we have E&P
allocated to our common shares, all or a portion of our distribution will be
taxable at the 15 percent Qualified Dividend Income (QDI) rate, assuming
various holding requirements are met by the stockholder. The 15 percent QDI rate
is currently effective through 2012. The portion of our distribution that is
taxable may vary for either of two reasons. First, the characterization of the
distributions we receive from MLPs could change annually based upon the K-1
allocations and result in less return of capital and more in the form of income.
Second, we could sell an MLP investment and realize a gain or loss at any time.
It is for these reasons that we inform you of the tax treatment after the close
of each year as the ultimate characterization of our distributions is
undeterminable until the year is over.
For tax purposes, distributions to
common stockholders for the fiscal year ended 2011 were 100 percent qualified
dividend income. This information is reported to stockholders on Form 1099-DIV
and is available on our Web site at www.tortoiseadvisors.com. For book purposes,
the source of distributions to common stockholders for the fiscal year ended
2011 was 100 percent return of capital. We currently estimate that 80 to 100
percent of 2012 distributions will be characterized as qualified dividend inc
ome for tax purposes, with the remaining percentage, if any, characterized as
return of capital. A final determination of the characterization will be made in
January 2013.
The unrealized gain or loss we have
in the portfolio is reflected in the
Statement of Assets and Liabilities. At May 31, 2012, our investments are
valued at $202.6 million, with an adjusted cost of $138.4 million. The $64.2
million difference reflects unrealized gain that would be realized for financial
statement purposes if those investments were sold at those values. The Statement
of Assets and Liabilities also reflects either a net deferred tax liability or
net deferred tax asset depending primarily upon unrealized gains (losses) on
investments, realized gains (losses) on investments, capital loss carryforwards
and net operating losses. At May 31, 2012, the balance sheet reflects a net
deferred tax liability of approximately $19.0 million or $3.02 per share.
Accordingly, our net asset value per share represents the amount which would be
available for distribution to stockholders after payment of taxes. Details of
our deferred taxes are disclosed in Note 5 in our Notes to Financial
Statements.
As of November 30, 2011, we had
approximately $15 million in capital loss carryforwards and $11 million in net
operating losses. To the extent we have taxable income that is not offset by
either capital loss carryforwards or net operating losses, we will owe federal
and state income taxes. Tax payments can be funded from investment earnings,
fund assets or borrowings. Details of our taxes are disclosed in Note 5 in our
Notes to Financial Statements.
2012 2nd Quarter
Report
5
Schedule of
Investments
May
31, 2012
|
|
|
Shares
|
|
Fair Value
|
Master Limited
Partnerships and
|
|
|
|
|
|
|
Related Companies
132.5%
(1)
|
|
|
|
|
|
|
|
|
Crude/Refined
Products Pipelines 43.3%
(1)
|
|
|
|
|
United States
43.3%
(1)
|
|
|
|
|
|
|
Buckeye Partners,
L.P.
(2)
|
|
195,713
|
|
$
|
9,300,282
|
|
Enbridge Energy Partners,
L.P.
(2)
|
|
282,519
|
|
|
8,260,856
|
|
Holly Energy
Partners, L.P.
(2)
|
|
61,500
|
|
|
3,479,055
|
|
Kinder Morgan Management,
LLC
(2)(3)
|
|
141,471
|
|
|
10,048,705
|
|
Magellan
Midstream Partners, L.P.
(2)
|
|
161,200
|
|
|
11,092,172
|
|
NuStar Energy
L.P.
(2)
|
|
73,056
|
|
|
3,814,254
|
|
Oiltanking
Partners, L.P.
|
|
24,900
|
|
|
774,390
|
|
Plains All American Pipeline,
L.P.
(2)
|
|
136,700
|
|
|
10,735,051
|
|
Sunoco Logistics
Partners L.P.
(2)
|
|
189,300
|
|
|
6,375,624
|
|
Tesoro Logistics
LP
(2)
|
|
30,700
|
|
|
967,971
|
|
|
|
|
|
|
64,848,360
|
|
Natural
Gas/Natural Gas Liquids Pipelines 51.9%
(1)
|
|
|
United States
51.9%
(1)
|
|
|
|
|
|
|
Boardwalk
Pipeline Partners, LP
(2)
|
|
151,612
|
|
|
3,934,331
|
|
El Paso Pipeline
Partners, L.P.
(2)
|
|
386,510
|
|
|
12,681,393
|
|
Energy Transfer
Equity, L.P.
(2)
|
|
131,959
|
|
|
4,794,070
|
|
Energy Transfer
Partners, L.P.
(2)
|
|
177,840
|
|
|
7,716,478
|
|
Enterprise
Products Partners L.P.
(2)(4)
|
|
309,650
|
|
|
15,098,534
|
|
Inergy Midstream,
L.P.
|
|
125,900
|
|
|
2,625,015
|
|
ONEOK Partners,
L.P.
(2)
|
|
156,200
|
|
|
8,528,520
|
|
Regency Energy
Partners LP
(2)
|
|
412,000
|
|
|
8,866,240
|
|
Spectra Energy
Partners, LP
(2)
|
|
102,300
|
|
|
3,188,691
|
|
TC PipeLines,
LP
(2)
|
|
49,600
|
|
|
2,033,600
|
|
Williams Partners
L.P.
(2)
|
|
156,300
|
|
|
8,268,270
|
|
|
|
|
|
|
77,735,142
|
|
Natural Gas
Gathering/Processing 16.6%
(1)
|
|
|
|
|
United States
16.6%
(1)
|
|
|
|
|
|
|
Chesapeake
Midstream Partners, L.P.
(2)
|
|
96,800
|
|
|
2,422,904
|
|
Copano Energy,
L.L.C.
(2)
|
|
152,916
|
|
|
4,098,149
|
|
Crestwood
Midstream Partners, LP
(3)
|
|
88,794
|
|
|
2,242,936
|
|
DCP Midstream
Partners, LP
(2)
|
|
51,500
|
|
|
2,025,495
|
|
MarkWest Energy
Partners, L.P.
(2)
|
|
113,900
|
|
|
5,460,366
|
|
Targa Resources
Partners LP
(2)
|
|
130,155
|
|
|
5,104,679
|
|
Western Gas
Partners LP
(2)
|
|
77,300
|
|
|
3,408,157
|
|
|
|
|
|
|
24,762,686
|
|
Oil and Gas
Production 18.2%
(1)
|
|
|
|
|
|
|
United States
18.2%
(1)
|
|
|
|
|
|
|
BreitBurn Energy
Partners L.P.
(2)
|
|
181,288
|
|
|
3,009,381
|
|
EV Energy
Partners, L.P.
(2)
|
|
121,600
|
|
|
6,235,648
|
|
Legacy Reserves,
LP
(2)
|
|
126,600
|
|
|
3,127,020
|
|
Linn Energy,
LLC
(2)
|
|
256,200
|
|
|
9,102,786
|
|
Pioneer Southwest
Energy Partners L.P.
(2)
|
|
150,900
|
|
|
3,875,112
|
|
Vanguard Natural
Resources, LLC
(2)
|
|
78,000
|
|
|
1,879,800
|
|
|
|
|
|
|
27,229,747
|
|
Other
1.2%
(1)
|
|
|
|
|
|
|
United States
1.2%
(1)
|
|
|
|
|
|
|
PetroLogistics
LP
|
|
125,000
|
|
|
1,750,000
|
|
Marine
Transportation 1.3%
(1)
|
|
|
|
|
|
|
Republic of
the Marshall Islands 1.3%
(1)
|
|
|
|
|
|
|
Teekay LNG
Partners L.P.
(2)
|
|
53,500
|
|
|
1,996,085
|
|
Total Master
Limited Partnerships and
|
|
|
|
|
|
|
Related Companies (Cost
$135,144,820)
|
|
|
|
|
198,322,020
|
|
Common Stock
2.8%
(1)
|
|
|
|
|
|
|
|
Marine
Transportation 2.8%
(1)
|
|
|
|
|
|
|
Republic of
the Marshall Islands 2.8%
(1)
|
|
|
|
|
|
|
Navios Maritime
Partners L.P.
|
|
47,600
|
|
|
644,980
|
|
Teekay Offshore
Partners L.P.
(2)
|
|
127,175
|
|
|
3,522,748
|
|
Total Common
Stock (Cost $3,117,739)
|
|
|
|
|
4,167,728
|
|
Short-Term
Investment 0.1%
(1)
|
|
|
|
|
|
|
United States
Investment Company 0.1%
(1)
|
|
|
|
|
|
|
Fidelity
Institutional Money Market Portfolio
|
|
|
|
|
|
|
Class I, 0.19%
(5)
(Cost $91,779)
|
|
91,779
|
|
|
91,779
|
|
Total
Investments 135.4%
(1)
|
|
|
|
|
|
|
(Cost $138,354,338)
|
|
|
|
|
202,581,527
|
|
Interest Rate
Swap Contracts (0.8%)
(1)
|
|
|
|
|
|
|
$25,000,000
notional Unrealized Depreciation
(6)
|
|
|
|
|
(1,127,195
|
)
|
Other Assets
and Liabilities (34.6%)
(1)
|
|
|
|
|
(51,811,020
|
)
|
Total Net Assets Applicable to
Common
|
|
|
|
|
|
|
Stockholders 100.0%
(1)
|
|
|
|
$
|
149,643,312
|
|
(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.
See Note 8 to the financial statements for further
disclosure.
|
(3)
|
Security distributions
are paid-in-kind.
|
(4)
|
All or a portion of the
security is segregated as collateral for the unrealized depreciation of
interest rate swap contracts of $1,127,195.
|
(5)
|
Rate reported is the
current yield as of May 31, 2012.
|
(6)
|
See Note 9 to the
financial statements for further
disclosure.
|
See accompanying Notes to
Financial Statements.
6
Tortoise North American Energy Corp.
Statement of
Assets & Liabilities
May 31, 2012
|
Assets
|
|
|
|
|
Investments at fair value (cost
$138,354,338)
|
|
$
|
202,581,527
|
|
Prepaid expenses and other
assets
|
|
|
138,914
|
|
Total assets
|
|
|
202,720,441
|
|
Liabilities
|
|
|
|
|
Payable to Adviser
|
|
|
359,657
|
|
Distributions payable to common
stockholders
|
|
|
2,439,603
|
|
Accrued expenses and other
liabilities
|
|
|
157,108
|
|
Unrealized depreciation of interest rate
swap contracts
|
|
|
1,127,195
|
|
Deferred tax liability
|
|
|
18,993,566
|
|
Short-term borrowings
|
|
|
30,000,000
|
|
Total liabilities
|
|
|
53,077,129
|
|
Net assets applicable to common stockholders
|
|
$
|
149,643,312
|
|
Net Assets Applicable to Common Stockholders Consist
of:
|
|
|
Capital stock, $0.001 par value; 6,295,750
shares issued and
|
|
|
|
|
outstanding
(100,000,000 shares authorized)
|
|
$
|
6,296
|
|
Additional paid-in capital
|
|
|
101,898,467
|
|
Accumulated net investment loss, net of
income taxes
|
|
|
(1,523,429
|
)
|
Accumulated net realized loss, net of
income taxes
|
|
|
(2,613,819
|
)
|
Net unrealized appreciation of investments
and
|
|
|
|
|
interest
rate swap contracts, net of income taxes
|
|
|
51,875,797
|
|
Net assets applicable to common stockholders
|
|
$
|
149,643,312
|
|
Net Asset Value per common share outstanding
|
|
|
|
|
(net assets applicable to common
stock,
|
|
|
|
|
divided by common shares
outstanding)
|
|
$
|
23.77
|
|
Statement of
Operations
Period
from December 1, 2011 through May 31, 2012
|
Investment Income
|
|
|
|
|
Distributions from master limited partnerships
|
|
$
|
6,154,378
|
|
Less return of capital on
distributions
|
|
|
(6,488,631
|
)
|
Net
distributions from master limited partnerships
|
|
|
(334,253
|
)
|
Dividend income
|
|
|
301,333
|
|
Dividends from money market mutual funds
|
|
|
170
|
|
Total Investment Loss
|
|
|
(32,750
|
)
|
Operating Expenses
|
|
|
|
|
Advisory fees
|
|
|
1,093,366
|
|
Professional fees
|
|
|
90,890
|
|
Administrator
fees
|
|
|
43,735
|
|
Directors fees
|
|
|
33,812
|
|
Stockholder communication
expenses
|
|
|
23,994
|
|
Fund
accounting fees
|
|
|
19,023
|
|
Registration fees
|
|
|
12,351
|
|
Stock
transfer agent fees
|
|
|
6,214
|
|
Custodian fees and
expenses
|
|
|
6,152
|
|
Other
operating expenses
|
|
|
26,683
|
|
Total Operating Expenses
|
|
|
1,356,220
|
|
Leverage Expenses
|
|
|
|
|
Interest expense
|
|
|
189,645
|
|
Total Expenses
|
|
|
1,545,865
|
|
Less expense reimbursement
by Adviser
|
|
|
(8,924
|
)
|
Net Expenses
|
|
|
1,536,941
|
|
Net Investment Loss, before Income
Taxes
|
|
|
(1,569,691
|
)
|
Deferred tax benefit
|
|
|
625,695
|
|
Net Investment Loss
|
|
|
(943,996
|
)
|
Realized and Unrealized Loss on Investments
|
|
|
|
|
and Interest Rate
Swaps
|
|
|
|
|
Net realized gain on investments
|
|
|
3,358,396
|
|
Net realized loss on interest rate swap settlements
|
|
|
(181,689
|
)
|
Net realized gain, before income taxes
|
|
|
3,176,707
|
|
Deferred tax expense
|
|
|
(1,181,417
|
)
|
Net realized gain on investments and
|
|
|
|
|
interest rate swaps
|
|
|
1,995,290
|
|
Net
unrealized depreciation of investments
|
|
|
(3,231,586
|
)
|
Net unrealized depreciation
of interest rate swap contracts
|
|
|
(726,629
|
)
|
Net unrealized depreciation, before income taxes
|
|
|
(3,958,215
|
)
|
Deferred tax benefit
|
|
|
1,472,060
|
|
Net unrealized depreciation of investments
|
|
|
|
|
and interest rate swap contracts
|
|
|
(2,486,155
|
)
|
Net Realized and Unrealized Loss on
Investments
|
|
|
|
|
and Interest Rate
Swaps
|
|
|
(490,865
|
)
|
Net
Decrease in Net Assets Applicable to Common Stockholders
|
|
|
|
|
Resulting from
Operations
|
|
$
|
(1,434,861
|
)
|
See accompanying Notes to
Financial Statements.
2012 2nd Quarter
Report
7
Statement of
Changes in Net Assets
|
|
|
Period from
|
|
|
|
|
|
|
December 1, 2011
|
|
|
|
|
|
|
through
|
|
Year Ended
|
|
|
May 31, 2012
|
|
November 30,
2011
|
|
|
(Unaudited)
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
$
|
(943,996
|
)
|
|
$
|
(745,435
|
)
|
Net realized gain on investments and
interest rate swaps
|
|
|
1,995,290
|
|
|
|
13,688,777
|
|
Net unrealized depreciation of investments
and interest rate swap contracts
|
|
|
(2,486,155
|
)
|
|
|
(1,784,521
|
)
|
Net increase
(decrease) in net assets applicable to
common stockholders resulting from operations
|
|
|
(1,434,861
|
)
|
|
|
11,158,821
|
|
Distributions
to Common Stockholders
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
|
|
|
|
Return of capital
|
|
|
(4,863,467
|
)
|
|
|
(9,506,583
|
)
|
Total
distributions to common stockholders
|
|
|
(4,863,467
|
)
|
|
|
(9,506,583
|
)
|
Total increase (decrease) in net assets
applicable to common stockholders
|
|
|
(6,298,328
|
)
|
|
|
1,652,238
|
|
Net Assets
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
155,941,640
|
|
|
|
154,289,402
|
|
End of period
|
|
$
|
149,643,312
|
|
|
$
|
155,941,640
|
|
Accumulated net investment loss, net of
income taxes, end of period
|
|
$
|
(1,523,429
|
)
|
|
$
|
(579,433
|
)
|
See accompanying Notes to
Financial Statements.
8
Tortoise North American Energy Corp.
Statement of
Cash Flows
Period
from December 1, 2011 through May 31, 2012
|
(Unaudited)
Cash Flows from Operating Activities
|
|
|
|
|
Distributions received from master limited
partnerships
|
|
$
|
6,154,378
|
|
Interest and dividend income
received
|
|
|
301,510
|
|
Purchases of long-term
investments
|
|
|
(17,833,901
|
)
|
Proceeds from sales of long-term
investments
|
|
|
16,708,914
|
|
Proceeds from sales of short-term
investments, net
|
|
|
84,540
|
|
Payments on interest rate swap contracts,
net
|
|
|
(181,689
|
)
|
Interest expense paid
|
|
|
(189,609
|
)
|
Income taxes paid
|
|
|
(7,267
|
)
|
Operating expenses paid
|
|
|
(1,342,384
|
)
|
Net cash
provided by operating activities
|
|
|
3,694,492
|
|
Cash Flows
from Financing Activities
|
|
|
|
|
Advances from margin loan
facility
|
|
|
9,600,000
|
|
Repayments on margin loan
facility
|
|
|
(10,900,000
|
)
|
Distributions paid to common
stockholders
|
|
|
(2,423,864
|
)
|
Net cash
used in financing activities
|
|
|
(3,723,864
|
)
|
Net change in cash
|
|
|
(29,372
|
)
|
Cash beginning of period
|
|
|
29,372
|
|
Cash end of period
|
|
$
|
|
|
Reconciliation of net decrease in net assets applicable
to
|
|
|
|
|
common stockholders resulting from
operations to net cash
|
|
provided by operating
activities
|
|
|
|
|
Net decrease in net assets applicable to common stockholders
|
|
|
resulting from operations
|
|
$
|
(1,434,861
|
)
|
Adjustments
to reconcile net decrease in net assets
|
|
|
|
|
applicable to common stockholders resulting from
|
|
|
|
|
operations to net cash provided by operating activities:
|
|
|
|
|
Purchases of long-term investments
|
|
|
(17,833,901
|
)
|
Proceeds from sales of long-term investments
|
|
|
16,613,907
|
|
Proceeds from sales of short-term investments, net
|
|
|
84,540
|
|
Payments on interest rate swap contracts, net
|
|
|
(181,689
|
)
|
Return of capital on distributions received
|
|
|
6,488,631
|
|
Deferred tax benefit
|
|
|
(916,338
|
)
|
Net unrealized depreciation of investments and
|
|
|
|
|
interest rate swap contracts
|
|
|
3,958,215
|
|
Net realized gain on investments and
|
|
|
|
|
interest rate swap contracts
|
|
|
(3,176,707
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
Decrease in receivable for investments sold
|
|
|
95,007
|
|
Increase in prepaid expenses and other assets
|
|
|
(46,598
|
)
|
Increase in payable to Adviser, net of
|
|
|
|
|
expense reimbursement
|
|
|
39,023
|
|
Increase in accrued expenses and other liabilities
|
|
|
5,263
|
|
Total adjustments
|
|
|
5,129,353
|
|
Net cash
provided by operating activities
|
|
$
|
3,694,492
|
|
See accompanying Notes to
Financial Statements.
2012 2nd Quarter
Report
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 1, 2011
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
|
|
through
|
|
November 30,
|
|
November 30,
|
|
November 30,
|
|
November 30,
|
|
November 30,
|
|
|
May 31, 2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Common Share Data
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value, beginning of period
|
|
$
|
24.77
|
|
|
$
|
24.51
|
|
|
$
|
20.22
|
|
|
$
|
10.78
|
|
|
$
|
27.25
|
|
|
$
|
23.70
|
|
Income (Loss) from Investment
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income (loss)
(2)
|
|
|
(0.15
|
)
|
|
|
(0.12
|
)
|
|
|
(0.09
|
)
|
|
|
0.25
|
|
|
|
0.43
|
|
|
|
0.72
|
|
Net
realized and unrealized gain (loss) on investments and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
interest rate swaps contracts
(2)
|
|
|
(0.08
|
)
|
|
|
1.89
|
|
|
|
5.86
|
|
|
|
10.67
|
|
|
|
(15.14
|
)
|
|
|
4.47
|
|
Total income (loss) from investment operations
|
|
|
(0.23
|
)
|
|
|
1.77
|
|
|
|
5.77
|
|
|
|
10.92
|
|
|
|
(14.71
|
)
|
|
|
5.19
|
|
Distributions to Preferred
Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.12
|
)
|
Net
realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.07
|
)
|
Return
of capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.17
|
)
|
|
|
|
|
Total distributions to preferred stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.17
|
)
|
|
|
(0.19
|
)
|
Distributions to Common Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.90
|
)
|
Net
realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.10
|
)
|
|
|
(0.55
|
)
|
Return
of capital
|
|
|
(0.77
|
)
|
|
|
(1.51
|
)
|
|
|
(1.48
|
)
|
|
|
(1.48
|
)
|
|
|
(1.49
|
)
|
|
|
|
|
Total distributions to common stockholders
|
|
|
(0.77
|
)
|
|
|
(1.51
|
)
|
|
|
(1.48
|
)
|
|
|
(1.48
|
)
|
|
|
(1.59
|
)
|
|
|
(1.45
|
)
|
Net Asset Value, end of
period
|
|
$
|
23.77
|
|
|
$
|
24.77
|
|
|
$
|
24.51
|
|
|
$
|
20.22
|
|
|
$
|
10.78
|
|
|
$
|
27.25
|
|
Per
common share market value, end of period
|
|
$
|
24.09
|
|
|
$
|
24.05
|
|
|
$
|
24.44
|
|
|
$
|
19.49
|
|
|
$
|
9.25
|
|
|
$
|
23.10
|
|
Total Investment Return Based on
Market Value
(3)
|
|
|
3.37
|
%
|
|
|
4.77
|
%
|
|
|
33.62
|
%
|
|
|
131.66
|
%
|
|
|
(55.98
|
)%
|
|
|
9.28
|
%
|
|
Supplemental Data and Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets applicable to common stockholders,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
end of
period (000s)
|
|
$
|
149,643
|
|
|
$
|
155,942
|
|
|
$
|
154,289
|
|
|
$
|
126,609
|
|
|
$
|
49,716
|
|
|
$
|
125,702
|
|
Average net assets (000s)
|
|
$
|
162,222
|
|
|
$
|
157,410
|
|
|
$
|
141,986
|
|
|
$
|
80,041
|
|
|
$
|
113,045
|
|
|
$
|
125,379
|
|
Ratio
of Expenses to Average Net Assets
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advisory fees
|
|
|
1.35
|
%
|
|
|
1.28
|
%
|
|
|
1.19
|
%
|
|
|
1.13
|
%
|
|
|
1.50
|
%
|
|
|
1.45
|
%
|
Other
expenses
|
|
|
0.32
|
|
|
|
0.32
|
|
|
|
0.38
|
|
|
|
1.01
|
|
|
|
0.48
|
|
|
|
0.40
|
|
Expense reimbursement
|
|
|
(0.01
|
)
|
|
|
(0.07
|
)
|
|
|
(0.12
|
)
|
|
|
(0.12
|
)
|
|
|
(0.23
|
)
|
|
|
(0.29
|
)
|
Subtotal
|
|
|
1.66
|
|
|
|
1.53
|
|
|
|
1.45
|
|
|
|
2.02
|
|
|
|
1.75
|
|
|
|
1.56
|
|
Leverage expenses
(5)
|
|
|
0.24
|
|
|
|
0.47
|
|
|
|
0.75
|
|
|
|
1.17
|
|
|
|
3.71
|
|
|
|
2.01
|
|
Income
tax expense (benefit)
(6)
|
|
|
(1.13
|
)
|
|
|
4.30
|
|
|
|
13.10
|
|
|
|
(4.70
|
)
|
|
|
0.06
|
|
|
|
0.02
|
|
Total expenses
|
|
|
0.77
|
%
|
|
|
6.30
|
%
|
|
|
15.30
|
%
|
|
|
(1.51
|
)%
|
|
|
5.52
|
%
|
|
|
3.59
|
%
|
See accompanying Notes to
Financial Statements.
10
Tortoise North American Energy Corp.
F
inancial
H
ighlights
(Continued)
|
|
|
Period from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 1, 2011
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
|
|
through
|
|
November 30,
|
|
November 30,
|
|
November 30,
|
|
November 30,
|
|
November 30,
|
|
|
May 31, 2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of net
investment income (loss) to average net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
before expense
reimbursement
(4)(5)
|
|
|
|
(1.17
|
)%
|
|
|
(0.54
|
)%
|
|
|
(0.50
|
)%
|
|
|
1.82
|
%
|
|
|
1.51
|
%
|
|
|
2.37
|
%
|
Ratio of net investment income
(loss) to average net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
after
expense reimbursement
(4)(5)
|
|
|
|
(1.16
|
)%
|
|
|
(0.47
|
)%
|
|
|
(0.38
|
)%
|
|
|
1.94
|
%
|
|
|
1.74
|
%
|
|
|
2.66
|
%
|
Portfolio
turnover rate
|
|
|
|
7.63
|
%
|
|
|
27.34
|
%
|
|
|
27.89
|
%
|
|
|
41.90
|
%
|
|
|
36.69
|
%
|
|
|
16.06
|
%
|
Short-term borrowings, end of
period (000s)
|
|
|
$
|
30,000
|
|
|
$
|
31,300
|
|
|
$
|
10,400
|
|
|
$
|
5,900
|
|
|
|
|
|
|
$
|
9,600
|
|
Long-term debt
obligations, end of period (000s)
|
|
|
|
|
|
|
|
|
|
|
$
|
15,000
|
|
|
$
|
15,000
|
|
|
$
|
15,000
|
|
|
$
|
40,000
|
|
Preferred stock, end of period
(000s)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
10,000
|
|
|
$
|
15,000
|
|
Per common share
amount of long-term debt obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding, end of
period
|
|
|
|
|
|
|
|
|
|
|
$
|
2.38
|
|
|
$
|
2.40
|
|
|
$
|
3.25
|
|
|
$
|
8.67
|
|
Per common share amount of net
assets, excluding long-term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
debt
obligations, end of period
|
|
|
$
|
23.77
|
|
|
$
|
24.77
|
|
|
$
|
26.89
|
|
|
$
|
22.61
|
|
|
$
|
14.03
|
|
|
$
|
35.92
|
|
Asset coverage,
per $1,000 of principal amount of long-term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
debt obligations and
short-term borrowings
(7)
|
|
|
$
|
5,988
|
|
|
$
|
5,982
|
|
|
$
|
7,074
|
|
|
$
|
7,058
|
|
|
$
|
4,981
|
|
|
$
|
3,837
|
|
Asset coverage ratio of
long-term debt obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
short-term borrowings
(7)
|
|
|
|
599
|
%
|
|
|
598
|
%
|
|
|
707
|
%
|
|
|
706
|
%
|
|
|
498
|
%
|
|
|
384
|
%
|
Asset coverage,
per $25,000 liquidation value per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of preferred
stock
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
74,716
|
|
|
$
|
73,646
|
|
Asset coverage ratio of
preferred stock
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
299
|
%
|
|
|
295
|
%
|
(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, 2011, 2010, 2009, 2008, and 2007 do not reflect the change in estimate
of investment income and return of capital, for the respective year. See
Note 2E to the financial statements for further
disclosure.
|
(3)
|
Not annualized. 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
broker commissions). The calculation also assumes reinvestment of
distributions at actual prices pursuant to the Companys dividend
reinvestment plan.
|
(4)
|
Annualized for periods less than one full
year.
|
(5)
|
The expense ratios and net investment income (loss)
ratios do not reflect the effect of distributions to preferred
stockholders.
|
(6)
|
For the period from December
1, 2011 through May 31, 2012, the Company accrued $916,338 in net deferred
income tax benefit. For the years ended November 30, 2011 and 2010, the
Company accrued $6,732,194 and $18,559,864, respectively, in net deferred
income tax expense. For the year ended November 30, 2009, the Company
accrued $3,732,366 in net deferred income tax benefit, which included
$5,488,509 of deferred income tax benefit for the timing differences at
December 1, 2008 when the Company converted to a taxable corporation. The
Company accrued $44,786, $39,097, $(28,837), $68,509 and $22,447 for the
years ended November 30, 2011, 2010, 2009, 2008 and 2007, respectively,
for current and foreign tax (benefit) expense.
|
(7)
|
Represents value of total assets less all liabilities
and indebtedness not represented by long-term debt obligations, short-term
borrowings and preferred stock at the end of the period divided by
long-term debt obligations and short-term borrowings outstanding at the
end of the period.
|
(8)
|
Represents value of total assets less all liabilities
and indebtedness not represented by long-term debt obligations, short-term
borrowings and preferred stock at the end of the period divided by
long-term debt obligations, short-term borrowings and preferred stock
outstanding at the end of the
period.
|
See accompanying Notes to
Financial Statements.
2012 2nd Quarter
Report
11
N
otes to F
inancial
S
tatements
(Unaudited)
May 31,
2012
|
1. Organization
Tortoise North American Energy
Corporation (the Company) was organized as a Maryland corporation on January
13, 2005, and is a non-diversified, closed-end management investment company
under the Investment Company Act of 1940, as amended (the 1940 Act). The
Companys investment objective is to seek a high level of total return with an
emphasis on distribution income paid to stockholders. The Company seeks to
provide its stockholders with a vehicle to invest in a portfolio consisting
primarily of publicly traded U.S. master limited partnerships (MLPs),
including oil and gas exploitation, energy infrastructure and energy shipping
companies. The Company commenced operations on October 31, 2005. The Companys
stock is listed on the New York Stock Exchange under the symbol
TYN.
2. Significant Accounting
Policies
A. Use of Estimates
The preparation of financial
statements in conformity with U.S. generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amount of assets and liabilities, recognition of distribution income and
disclosure of contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.
B. Investment
Valuation
The Company primarily owns securities
that are listed on a securities exchange or over-the-counter market. The Company
values those securities at their last sale price on that exchange or
over-the-counter market on the valuation date. If the security is listed on more
than one exchange, the Company uses the price from the exchange that it
considers to be the principal exchange on which the security is traded.
Securities listed on the NASDAQ will be valued at the NASDAQ Official Closing
Price, which may not necessarily represent the last sale price. If there has
been no sale on such exchange or over-the-counter market on such day, the
security will be valued at the mean between the last bid price and last ask
price on such day.
The Company may invest up to 50
percent of its total assets in restricted securities. Restricted securities are
subject to statutory and contractual restrictions on their public resale, which
may make it more difficult to obtain a valuation and may limit the Companys
ability to dispose of them. Investments in restricted securities and other
securities for which market quotations are not readily available will be valued
in good faith by using fair value procedures approved by the Board of Directors.
Such fair value procedures consider factors such as discounts to publicly traded
issues, time until conversion date, securities with similar yields, quality,
type of issue, coupon, duration and rating. If events occur that affect the
value of the Companys portfolio securities before the net asset value has been
calculated (a significant event), the portfolio securities so affected will
generally be priced using fair value procedures.
An equity security of a
publicly traded company acquired in a direct placement transaction may be
subject to restrictions on resale that can affect the securitys liquidity and
fair value. Such securities that are convertible or otherwise will become freely
tradable will be valued based on the market value of the freely tradable
security less an applicable discount. Generally, the discount will initially be
equal to the discount at which the Company purchased the securities. 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.
The Company generally values debt
securities at prices based on market quotations for such securities, except
those securities purchased with 60 days or less to maturity are valued on the
basis of amortized cost, which approximates market value.
The Company generally values its
interest rate swap contracts using industry-accepted models which discount the
estimated future cash flows based on 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.
C. Foreign Currency
Translation
For foreign currency, investments in
foreign securities, and other assets and liabilities denominated in a foreign
currency, the Company translates these amounts into U.S. dollars on the
following basis:
|
(1)
|
market value of investment
securities, assets and liabilities at the current rate of exchange on the
valuation date and
|
|
|
|
(2)
|
purchases and sales of
investment securities, income and expenses at the relevant rates of
exchange on the respective dates of such
transactions.
|
The Company does not isolate that
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 equity
securities.
D. Foreign Withholding
Taxes
The Company may be subject to taxes
imposed by countries in which it invests with respect to its investment in
issuers existing or operating in such countries. Such taxes are generally based
on income earned. The Company accrues such taxes when the related income is
earned.
E. Security Transactions and
Investment Income
Security 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. Dividend and distribution income is recorded on the
ex-dividend date. Distributions received from the Companys investments in MLPs
generally are comprised of ordinary income and return of capital from the MLPs.
The Company allocates distributions between investment income and return of
capital based on estimates made at the time such distributions are received.
Such estimates are based on information provided by each MLP and other industry
sources. These estimates may subsequently be revised based on actual allocations
received from MLPs 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 Company.
For the period from December 1, 2010 through November 30,
2011, the Company estimated the allocation of investment income and return of
capital for the distributions received from MLPs within the Statement of
Operations. For this period, the Company had estimated approximately 12 percent
of total distributions as investment income and approximately 88 percent as
return of capital.
Subsequent to November 30, 2011, the
Company reallocated the amount of investment income and return of capital it
recognized for the period from December 1, 2010 through November 30, 2011 based
on the 2011 tax reporting information received from the individual MLPs. This
reclassification amounted to a decrease in pre-tax net investment income of
approximately $920,000 or $0.146 per share ($578,000 or $0.092 per share, net of
deferred tax benefit), an increase in unrealized appreciation of investments of
approximately $806,000 or $0.128 per share ($506,000 or $0.080 per share, net of
deferred tax expense), and an increase in realized gains of approximately
$114,000 or $0.018 per share ($72,000 or $0.012 per share, net of deferred tax
expense) for the period from December 1, 2011 through May 31, 2012.
Subsequent to the period ended
February 29, 2012, the Company reallocated the amount of investment income and
return of capital it recognized in the current fiscal year based on its revised
2012 estimates, after considering the final allocations for
12
Tortoise North American Energy Corp.
N
otes to F
inancial
S
tatements
(Unaudited)
(Continued)
|
2011. This
reclassification amounted to a decrease in pre-tax net investment income of
approximately $78,000 or $0.012 per share ($49,000 or $0.008 per share, net of
deferred tax benefit), an increase in unrealized appreciation of investments of
approximately $47,000 or $0.007 per share ($30,000 or $0.005 per share, net of
deferred tax expense), and an increase in realized gains of approximately
$31,000 or $0.005 per share ($19,000 or $0.003 per share, net of deferred tax
expense).
F. Distributions to
Stockholders
Distributions to common stockholders
are recorded on the ex-dividend date. The Company 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 (if any) following such distribution. The character of
distributions to stockholders made during the year may differ from their
ultimate characterization for federal income tax purposes. For book purposes,
the source of the Companys distributions to common stockholders for the year
ended November 30, 2011 and the period ended May 31, 2012 was 100 percent return
of capital. For tax purposes, the Companys distributions for the year ended
November 30, 2011 were 100 percent qualified dividend income. The tax character
of distributions paid to common stockholders in the current year will be
determined subsequent to November 30, 2012.
G. Federal Income
Taxation
From the Companys inception through
November 30, 2008, the Company qualified as a regulated investment company
(RIC) under the U.S. Internal Revenue Code of 1986, as amended (the Code).
Effective December 1, 2008, the Company is treated as a taxable corporation for
federal and state income tax purposes. The Company, as a corporation, is
obligated to pay federal and state income tax on its taxable income. Currently,
the highest regular marginal federal income tax rate for a corporation is 35
percent; however, the Company anticipates a marginal effective rate of 34
percent due to expectations of the level of taxable income relative to the
federal graduated tax rates, including the tax rate anticipated when temporary
differences reverse. The Company may be subject to a 20 percent federal
alternative minimum tax on its federal alternative minimum taxable income to the
extent that its alternative minimum tax exceeds its regular federal income
tax.
The Company invests in MLPs, which
generally are treated as partnerships for federal income tax purposes. As a
limited partner in the MLPs, the Company reports its allocable share of the
MLPs taxable income in computing its own taxable income. The Companys tax
expense or benefit is included in the Statement of Operations based on the
component of income or gains (losses) to which such expense or benefit relates.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. A valuation allowance is
recognized if, based on the weight of available evidence, it is more likely than
not that some portion or all of the deferred income tax asset will not be
realized.
H. Offering and Debt Issuance
Costs
Offering costs related to the
issuance of common and preferred stock are charged to additional paid-in capital
when the stock is issued. Debt issuance costs related to long-term debt
obligations are capitalized and amortized over the period the debt is
outstanding.
I. Derivative Financial
Instruments
The Company uses derivative financial
instruments (principally interest rate swap and forward foreign currency
contracts) to manage interest rate and currency risks. The Company has
established policies and procedures for risk assessment and the approval,
reporting and monitoring of derivative financial instrument activities. The
Company does 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 Statement of Operations. Cash
settlements under the terms of the interest rate swap and forward foreign
currency contracts and termination of such contracts are recorded as realized
gains or losses in the accompanying Statement of Operations.
J. Indemnifications
Under the Companys organizational
documents, its officers and directors are indemnified against certain
liabilities arising out of the performance of their duties to the Company. In
addition, in the normal course of business, the Company may enter into contracts
that provide general indemnification to other parties. The Companys maximum
exposure under these arrangements is unknown, as this would involve future
claims that may be made against the Company that have not yet occurred, and may
not occur. However, the Company has not had prior claims or losses pursuant to
these contracts and expects the risk of loss to be remote.
K. Recent Accounting
Pronouncement
In May 2011, the FASB issued ASU No.
2011-04 Amendments to Achieve Common Fair Value Measurement and Disclosure
Requirements in GAAP and the International Financial Reporting Standards
(IFRSs). ASU No. 2011-04 amends FASB ASC Topic 820, Fair Value Measurements
and Disclosures, to establish common requirements for measuring fair value and
for disclosing information about fair value measurements in accordance with GAAP
and IFRSs. ASU No. 2011-04 is effective for fiscal years beginning after
December 15, 2011 and for interim periods within those fiscal years. Management
is evaluating the impact of these amendments, but currently does not believe
they will have a material impact on the Companys financial
statements.
3. Concentration of
Risk
Under normal conditions, the Company
will have at least 80 percent of its total assets in equity securities of
companies in the energy sector with their primary operations in North America
(Energy Companies). Energy Companies include companies that derive more than
50 percent of their revenues from transporting, processing, storing,
distributing or marketing natural gas, natural gas liquids, electricity, coal,
crude oil or refined petroleum products, or exploring, developing, managing or
producing such commodities. The Company may invest up to 50 percent of its total
assets in restricted securities. In determining application of these policies,
the term total assets includes assets obtained through leverage. Companies
that primarily invest in a particular sector may experience greater volatility
than companies investing in a broad range of industry sectors. The Company 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 the Company uses this strategy, it may not
achieve its investment objective.
4. Agreements
The Company has entered into an
Investment Advisory Agreement with Tortoise Capital Advisors, L.L.C. (the
Adviser). Under the terms of the agreement, the Company pays the Adviser a fee
equal to an annual rate of 1.00 percent of the Companys average monthly total
assets (including any assets attributable to leverage) minus accrued liabilities
(other than debt entered into for purposes of leverage and the aggregate
liquidation preference of outstanding preferred stock, if any) (Managed
Assets), in exchange for the investment advisory services provided. The Adviser
waived fees in an amount equal to an annual rate of 0.05 percent of the
Companys average monthly Managed Assets from January 1, 2011 through December
31, 2011.
2012 2nd Quarter
Report
13
N
otes to F
inancial
S
tatements
(Unaudited)
(Continued)
|
U.S. Bancorp Fund Services, LLC
serves as the Companys administrator. The Company pays the administrator a
monthly fee computed at an annual rate of 0.04 percent of the first
$1,000,000,000 of the Companys Managed Assets, 0.01 percent on the next
$500,000,000 of Managed Assets and 0.005 percent on the balance of the Companys
Managed Assets.
Computershare Trust Company, N.A.
serves as the Companys transfer agent and registrar and Computershare Inc.
serves as the Companys dividend paying agent and agent for the automatic
dividend reinvestment plan.
U.S. Bank, N.A. serves as custodian
of the Companys cash and investment securities. The Company pays the custodian
a monthly fee computed at an annual rate of 0.004 percent of the Companys
portfolio assets, plus portfolio transaction fees.
5. Income Taxes
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 the
Companys deferred tax assets and liabilities as of May 31, 2012, are as
follows:
Deferred tax
assets:
|
|
|
|
Net
operating loss carryforwards
|
|
$
|
6,605,151
|
Capital loss
carryforwards
|
|
|
4,967,605
|
Alternative minimum tax credit
|
|
|
30,000
|
Organization
costs
|
|
|
44,326
|
State
of Kansas credit
|
|
|
4,055
|
|
|
|
11,651,137
|
Deferred tax
liabilities:
|
|
|
|
Basis reduction of
investment in MLPs
|
|
|
7,166,511
|
Net
unrealized gains on investment securities
|
|
|
23,478,192
|
|
|
|
30,644,703
|
Total net deferred tax
liability
|
|
$
|
18,993,566
|
At May 31, 2012, a valuation
allowance on deferred tax assets was not deemed necessary because the Company
believes it is more likely than not that there is an ability to realize its
deferred tax assets through future taxable income of the appropriate character.
Any adjustments to the Companys estimates of future taxable income will be made
in the period such determination is made. The Companys policy is to record
interest and penalties on uncertain tax positions as part of tax expense. As of
May 31, 2012, the Company had no uncertain tax positions and no penalties and
interest were accrued. Tax years subsequent to the year ending November 30, 2006
remain open to examination by federal and state tax authorities.
Total income tax benefit differs from
the amount computed by applying the federal statutory income tax rate of 34
percent to net investment loss and net realized gains and unrealized losses on
investments for the period ended May 31, 2012, as follows:
Application of
statutory income tax rate
|
|
$
|
799,408
|
State income taxes, net of
federal tax effect
|
|
|
75,003
|
Dividends
received deduction
|
|
|
41,927
|
Total income tax
benefit
|
|
$
|
916,338
|
Total income taxes are computed by
applying the federal statutory rate plus a blended state income tax rate.
For the period from December 1, 2011
through May 31, 2012, the components of income tax benefit include deferred
federal and state income tax benefit (net of federal tax effect) of $837,738 and
$78,600, respectively.
The Company acquired all of the net
assets of Tortoise Gas and Oil Corporation (TGO) on September 14, 2009 in a
tax-free reorganization under Section 368(a)(1)(C) of the Internal Revenue Code.
As of November 30, 2011, the Company had a net operating loss for federal income
tax purposes of approximately $10,989,000. This includes a net operating loss of
$7,935,000 from TGO. The net operating loss may be carried forward for 20 years.
If not utilized, this net operating loss will expire as follows: $2,677,000,
$5,258,000, $807,000 and $2,247,000 in the years ending November 30, 2027, 2028,
2029 and 2030, respectively. Utilization of the net operating loss from TGO is
further subject to Section 382 limitations of the Internal Revenue Code, which
limit tax attributes subsequent to ownership changes.
As of November 30, 2011, the Company
had a capital loss carryforward of approximately $15,000,000 which may be
carried forward for 5 years. This amount includes a capital loss of $2,700,000
from TGO. If not utilized, the capital loss will expire as follows: $1,500,000,
$5,500,000 and $8,000,000 in the years ending November 30, 2012, 2013 and 2014,
respectively. The amount of deferred tax asset for these items at May 31, 2012
also includes amounts for the period from December 1, 2011 through May 31, 2012.
For corporations, capital losses can only be used to offset capital gains and
cannot be used to offset ordinary income. As of November 30, 2011, an
alternative minimum tax credit of $30,000 was available, which may be credited
in the future against regular income tax. This credit may be carried forward
indefinitely.
As of May 31, 2012, the aggregate
cost of securities for federal income tax purposes was $119,084,343. The
aggregate gross unrealized appreciation for all securities in which there was an
excess of fair value over tax cost was $84,543,235, the aggregate gross
unrealized depreciation for all securities in which there was an excess of tax
cost over fair value was $1,046,051 and the net unrealized appreciation was
$83,497,184.
6. Fair Value of Financial
Instruments
Various inputs are used in
determining the value of the Companys investments. These inputs are summarized
in the three broad levels listed below:
|
Level 1
|
|
quoted prices in active markets for identical
investments
|
|
|
|
|
|
Level 2
|
|
other significant observable inputs
(including quoted prices for similar investments, market corroborated
inputs, etc.)
|
|
|
|
|
|
Level 3
|
|
significant unobservable inputs (including
the Companys own assumptions in determining the fair value of
investments)
|
The inputs or methodology used for
valuing securities are not necessarily an indication of the risk associated with
investing in those securities.
The following table provides the fair
value measurements of applicable Company assets by level within the fair value
hierarchy as of May 31, 2012. These assets are measured on a recurring
basis.
|
|
Fair Value at
|
|
|
|
|
|
|
|
|
|
Description
|
|
May 31, 2012
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
(a)
|
|
$
|
4,167,728
|
|
$
|
4,167,728
|
|
$
|
|
|
$
|
|
Master Limited
Partnerships
|
|
|
|
|
|
|
|
|
|
|
|
|
and Related Companies
(a)
|
|
|
198,322,020
|
|
|
198,322,020
|
|
|
|
|
|
|
Total Equity
Securities
|
|
|
202,489,748
|
|
|
202,489,748
|
|
|
|
|
|
|
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term
Investment
(b)
|
|
|
91,779
|
|
|
91,779
|
|
|
|
|
|
|
Total Assets
|
|
$
|
202,581,527
|
|
$
|
202,581,527
|
|
$
|
|
|
$
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Rate Swap
Contracts
|
|
$
|
1,127,195
|
|
$
|
|
|
$
|
1,127,195
|
|
$
|
|
(a)
|
All other industry
classifications are identified in the Schedule of
Investments.
|
(b)
|
Short-term investment is
a sweep investment for cash balances in the Company at May 31,
2012.
|
14
Tortoise North American Energy Corp.
N
otes to F
inancial
S
tatements
(Unaudited)
(Continued)
|
Valuation
Techniques
In general, and where applicable, the
Company uses readily available market quotations based upon the last updated
sales price from the principal market to determine fair value. This pricing
methodology applies to the Companys Level 1 investments.
An equity security of a publicly
traded company acquired in a private placement transaction without registration
under the Securities Act of 1933, as amended (the 1933 Act), is subject to
restrictions on resale that can affect the securitys fair value. If such a
security is convertible into publicly-traded common shares, the security
generally will be valued at the common share market price adjusted by a
percentage discount due to the restrictions and categorized as Level 2 in the
fair value hierarchy. If the security has characteristics that are dissimilar to
the class of security that trades on the open market, the security will
generally be valued and categorized as Level 3 in the fair value
hierarchy.
Interest rate swap contracts are
valued by using industry-accepted models which discount the estimated future
cash flows based on a forward rate curve and the stated terms of the interest
rate swap agreement by using interest rates currently available in the market,
or based on dealer quotations, if available, which applies to the Companys
Level 2 liabilities.
The Company utilizes the beginning of
reporting period method for determining transfers between levels. For the period
from December 1, 2011 through May 31, 2012, Teekay Offshore Partners, L.P.
common units in the amount of $1,371,505 were transferred from Level 2 to Level
1 when they converted into registered units and quoted prices in active markets
were available. There were no other transfers between levels.
7. Investment
Transactions
For the period from December 1, 2011
through May 31, 2012, the Company purchased (at cost) and sold securities
(proceeds received) in the amount of $17,833,901 and $16,613,907 (excluding
short-term debt securities), respectively.
8. Credit Facility
On June 15, 2011, the Company entered
into a 270-day rolling evergreen margin loan facility with Bank of America, N.A.
The terms of the agreement provide for a $40,000,000 facility that is secured by
certain of the Companys assets. Outstanding balances generally will accrue
interest at a variable rate equal to one-month LIBOR plus 0.85 percent and
unused portions of the facility will accrue a fee equal to an annual rate of
0.25 percent.
The average principal balance and
interest rate for the period during which the margin loan facility was utilized
during the period from December 1, 2011 through May 31, 2012 was approximately
$31,900,000 and 1.11 percent, respectively. At May 31, 2012, the principal
balance outstanding was $30,000,000 at an interest rate of 1.09
percent.
Under the terms of the margin loan
facility, the Company must maintain asset coverage required under the 1940 Act.
If the Company 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, 2012, the Company was in compliance with the terms of the
margin loan facility.
9. Interest Rate Swap
Contracts
The Company has entered into interest
rate swap contracts in an attempt to protect itself from increasing interest
expense on its leverage resulting from increasing short-term 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 the Company. At
the time the interest rate swap contracts reach their scheduled termination,
there is a risk that the Company would 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 the Company is required to
terminate any swap contract early due to the net assets of the Company falling
below $48,000,000 or the Company failing to maintain a required 300 percent
asset coverage of the liquidation value of the outstanding debt, then the
Company could be required to make a termination payment to the extent of the
Companys net liability position, in addition to redeeming all or some of the
debt. The Company has segregated a portion of its assets as collateral for the
amount of the net liability of its interest rate swap contracts. Details of the
interest rate swap contracts outstanding as of May 31, 2012, are as
follows:
|
|
|
|
|
|
|
Fixed Rate
|
|
Floating Rate
|
|
|
|
|
|
|
Maturity
|
|
Notional
|
|
Paid by the
|
|
Received by
|
|
Liability
|
Counterparty
|
|
Date
|
|
Amount
|
|
Company
|
|
the Company
|
|
Derivatives
|
The Bank of Nova
Scotia
|
|
09/02/2014
|
|
$
|
5,000,000
|
|
0.654
|
%
|
|
1-month U.S. Dollar LIBOR
|
|
$
|
(26,571
|
)
|
The Bank of Nova
Scotia
|
|
09/02/2016
|
|
|
5,000,000
|
|
1.258
|
%
|
|
1-month U.S.
Dollar LIBOR
|
|
|
(118,149
|
)
|
The Bank of Nova
Scotia
|
|
09/02/2018
|
|
|
5,000,000
|
|
1.815
|
%
|
|
1-month U.S. Dollar LIBOR
|
|
|
(228,444
|
)
|
The Bank of Nova
Scotia
|
|
09/02/2021
|
|
|
10,000,000
|
|
2.381
|
%
|
|
1-month U.S.
Dollar LIBOR
|
|
|
(754,031
|
)
|
|
|
|
|
$
|
25,000,000
|
|
|
|
|
|
|
$
|
(1,127,195
|
)
|
The Company is exposed 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 Company 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 Companys leverage.
The unrealized depreciation of interest rate swap contracts in the amount of
$726,629 for the period ended May 31, 2012 is included in the Statement of
Operations. Cash settlement payments under the terms of the interest rate swap
contracts in the amount of $181,689 are recorded as realized losses for the
period ended May 31, 2012. The total notional amount of all open swap agreements
at May 31, 2012 is indicative of the volume of this derivative type for the
period ended May 31, 2012.
10. Common Stock
The Company has 100,000,000 shares of
capital stock authorized and 6,295,750 shares outstanding at May 31, 2012 and
November 30, 2011.
11. Subsequent
Events
On June 1, 2012, the Company paid a
distribution in the amount of $0.3875 per common share, for a total of
$2,439,603. Of this total, the dividend reinvestment amounted to
$136,630.
The Company 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.
2012 2nd Quarter
Report
15
A
dditional I
nformation
(Unaudited)
|
Stockholder Proxy Voting
Results
The annual meeting of stockholders
was held on May 24, 2012. The matters considered at the meeting, together with
the actual vote tabulations relating to such matters are as follows:
1. To elect one director of the Company, to hold
office for a term of three years and until his successor is duly elected and
qualified.
|
|
No. of Shares
|
Charles E.
Heath
|
|
|
Affirmative
|
|
5,357,677
|
Withheld
|
|
189,382
|
TOTAL
|
|
5,547,059
|
Each of H. Kevin Birzer
and John Graham continued as a director with a term expiring on the date of the
2013 annual meeting of stockholders. Conrad S. Ciccotello continued as a
director and his term expires on the date of the 2014 annual meeting of
stockholders.
2. To approve a proposal to authorize flexibility to
the Company to sell its common shares for less than net asset value, subject to
certain conditions.
Vote of Common
Stockholders
|
|
No.
of
|
of Record (28
Stockholders of
|
|
Recordholders
|
Record as of
Record Date)
|
|
Voting
|
Affirmative
|
|
17
|
Against
|
|
0
|
Abstain
|
|
2
|
Broker Non-votes
|
|
0
|
TOTAL
|
|
19
|
|
Vote of Stockholders
|
|
No. of Shares
|
Affirmative
|
|
2,029,263
|
Against
|
|
390,794
|
Abstain
|
|
70,013
|
Broker Non-votes
|
|
3,056,989
|
TOTAL
|
|
5,547,059
|
3. To ratify the selection of Ernst
& Young LLP as the independent registered public accounting firm of the
Company for its fiscal year ending November 30, 2012.
|
|
No. of Shares
|
Affirmative
|
|
5,499,966
|
Against
|
|
18,166
|
Abstain
|
|
28,927
|
TOTAL
|
|
5,547,059
|
Based upon votes required for
approval, each of these matters passed.
Director and Officer
Compensation
The Company does 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 ended May 31, 2012, the
aggregate compensation paid by the Company to the independent directors was
$34,500. The Company 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 Securities Act of 1933 and the Securities
Exchange Act of 1934. 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 the Companys actual
results are the performance of the portfolio of stocks held by it, the
conditions in the U.S. and international financial, petroleum and other markets,
the price at which shares of the Company will trade in the public markets and
other factors discussed in filings with the SEC.
Proxy Voting
Policies
A description of the policies and
procedures that the Company uses to determine how to vote proxies relating to
portfolio securities owned by the Company and information regarding how the
Company voted proxies relating to the portfolio of securities during the
12-month period ended June 30, 2011 is available to stockholders (i) without
charge, upon request by calling the Company at (913) 981-1020 or toll-free at
(866) 362-9331 and on the Companys Web site at www.tortoiseadvisors.com; and
(ii) on the SECs Web site at www.sec.gov.
Form N-Q
The Company files its complete
schedule of portfolio holdings for the first and third quarters of each fiscal
year with the SEC on Form N-Q. The Companys Form N-Q is available without
charge upon request by calling the Company at (866) 362-9331 or by visiting the
SECs Web site at www.sec.gov. In addition, you may review and copy the
Companys Form N-Q at the SECs Public Reference Room in Washington, D.C. You
may obtain information on the operation of the Public Reference Room by calling
(800) SEC-0330.
The Companys Form N-Qs are also
available on the Companys Web site at www.tortoiseadvisors.com.
Statement of Additional
Information
The Statement of Additional
Information (SAI) includes additional information about the Companys
directors and is available upon request without charge by calling the Company at
(866) 362-9331 or by visiting the SECs Web site at www.sec.gov.
Certifications
The Companys Chief Executive Officer
submitted to the New York Stock Exchange the annual CEO certification as
required by Section 303A.12(a) of the NYSE Listed Company Manual.
The Company has filed with the SEC,
as an exhibit to its most recently filed Form N-CSR, the certification of its
Chief Executive Officer and Chief Financial Officer required by Section 302 of
the Sarbanes-Oxley Act.
Privacy Policy
In order to conduct its business, the
Company collects and maintains certain nonpublic personal information about its
stockholders of record with respect to their transactions in shares of the
Companys securities. This information includes the stockholders address, tax
identification or Social Security number, share balances, and dividend
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 Companys other stockholders or the
Companys 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
Companys 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.
16
Tortoise North American Energy Corp.
Office of the
Company and
of the
Investment Adviser
Tortoise Capital Advisors, L.L.C.
11550
Ash Street, Suite 300
Leawood, Kan. 66211
(913) 981-1020
(913)
981-1021 (fax)
www.tortoiseadvisors.com
Managing
Directors of
Tortoise
Capital Advisors, L.L.C.
H. Kevin Birzer
Zachary A.
Hamel
Kenneth P. Malvey
Terry Matlack
David J.
Schulte
Board of
Directors of
Tortoise North American Energy Corp.
H. Kevin Birzer,
Chairman
Tortoise Capital Advisors, L.L.C.
Conrad S.
Ciccotello
Independent
John R.
Graham
Independent
Charles E.
Heath
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 43078
Providence, R.I.
02940-3078
(800) 426-5523
www.computershare.com
LEGAL
COUNSEL
Husch
Blackwell LLP
4801 Main St.
Kansas City, Mo. 64112
INVESTOR
RELATIONS
(866)
362-9331
info@tortoiseadvisors.com
STOCK
SYMBOL
Listed
NYSE Symbol: TYN
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.
|
Tortoise Capital
Advisors Closed-end Funds
|
|
|
|
|
|
Pureplay MLP
Funds
|
|
Broader
Funds
|
|
|
Name
|
Ticker
|
Focus
|
Total Assets
(1)
($ in millions)
|
|
Name
|
Ticker
|
Focus
|
Total Assets
(1)
($ in
millions)
|
|
|
Tortoise
Energy
Infrastructure Corp.
|
|
Midstream
Equity
|
$1,614
|
|
Tortoise Pipeline
&
Energy Fund, Inc.
|
|
Pipeline
Equity
|
$321
|
|
|
Tortoise
Energy
Capital Corp.
|
|
Midstream
Equity
|
$826
|
|
Tortoise Power and
Energy Infrastructure
Fund,
Inc.
|
|
Power & Energy Infrastructure
Debt & Dividend
Paying Equity
|
$215
|
|
|
Tortoise MLP
Fund,
Inc.
|
|
Natural Gas
Equity
|
$1,583
|
|
|
|
|
|
|
|
Tortoise North
American Energy Corp.
|
|
Midstream/Upstream Equity
|
$211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) As of 6/30/12
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.
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 in the portfolio managers identified in 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.
|
|
|
|
(d)
|
|
|
|
(c)
|
Maximum Number (or
|
|
|
|
Total Number of
|
Approximate Dollar
|
|
(a)
|
|
Shares (or Units)
|
Value) of Shares (or
|
|
Total Number of
|
(b)
|
Purchased as Part of
|
Units) that May Yet
|
|
Shares (or Units)
|
Average Price Paid
|
Publicly Announced
|
Be Purchased Under
|
Period
|
Purchased
|
per Share (or Unit)
|
Plans or Programs
|
the Plans or Programs
|
Month #1
|
0
|
0
|
0
|
0
|
12/1/11-12/31/11
|
|
|
|
|
Month #2
|
0
|
0
|
0
|
0
|
1/1/12-1/31/12
|
|
|
|
|
Month #3
|
0
|
0
|
0
|
0
|
2/1/12-2/29/12
|
|
|
|
|
Month #4
|
0
|
0
|
0
|
0
|
3/1/12-3/31/12
|
|
|
|
|
Month #5
|
0
|
0
|
0
|
0
|
4/1/12-4/30/12
|
|
|
|
|
Month #6
|
0
|
0
|
0
|
0
|
5/1/12-5/31/12
|
|
|
|
|
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 Chief Financial Officer have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and 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 controls over financial reporting (as defined in Rule 30a-3(d) under 1940 Act) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a)(1)
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.
(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.
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 North American Energy Corporation
|
|
|
|
By (Signature and Title)
|
|
/s/ Terry Matlack
|
|
|
Terry Matlack, Chief Executive Officer
|
Date July 24, 2012
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/ Terry Matlack
|
|
|
Terry Matlack, Chief Executive Officer
|
Date July 24, 2012
By (Signature and Title)
|
|
/s/ P. Bradley Adams
|
|
|
P. Bradley Adams, Chief Financial Officer
|
Date July 24, 2012
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