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


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




Investment Company Act file number 811-21700



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:   August 31, 2012

 
 
 
Item 1. Schedule of Investments.

 
Tortoise North American Energy Corporation
           
SCHEDULE OF INVESTMENTS (Unaudited)
           
 
           
   
August 31, 2012
 
   
Shares
   
Fair Value
 
Master Limited Partnerships and Related Companies — 136.2% (1)
           
Crude/Refined Products Pipelines — 45.7% (1)
           
United States — 45.7% (1)
           
Buckeye Partners, L.P. (2)
    186,700     $ 9,226,714  
Enbridge Energy Partners, L.P. (2)
    282,519       8,323,010  
Holly Energy Partners, L.P. (2)
    67,560       4,550,166  
Kinder Morgan Management, L.L.C. (2)(3)
    154,570       11,456,721  
Magellan Midstream Partners, L.P. (2)
    154,700       12,835,459  
NuStar Energy L.P. (2)
    109,300       5,543,696  
Oiltanking Partners, L.P.
    24,900       915,822  
Plains All American Pipeline, L.P. (2)
    136,700       11,828,651  
Sunoco Logistics Partners L.P. (2)
    159,800       7,454,670  
Tesoro Logistics L.P. (2)
    30,700       1,337,599  
              73,472,508  
Natural Gas/Natural Gas Liquids Pipelines — 52.8% (1)
               
United States — 52.8% (1)
               
Boardwalk Pipeline Partners, L.P. (2)
    151,612       4,098,072  
El Paso Pipeline Partners, L.P. (2)
    386,510       13,987,797  
Energy Transfer Equity, L.P. (2)
    131,959       5,799,598  
Energy Transfer Partners, L.P. (2)
    177,840       7,597,325  
Enterprise Products Partners L.P. (2)(4)
    300,100       16,025,340  
EQT Midstream Partners, L.P.
    44,263       1,215,462  
Inergy Midstream, L.P.
    125,900       2,933,470  
ONEOK Partners, L.P. (2)
    156,200       8,875,284  
Regency Energy Partners L.P. (2)
    382,700       8,855,678  
Spectra Energy Partners, L.P. (2)
    102,300       3,275,646  
TC PipeLines, L.P. (2)
    49,600       2,252,832  
Williams Partners L.P. (2)
    195,100       10,063,258  
              84,979,762  
Natural Gas Gathering/Processing — 17.1% (1)
               
United States — 17.1% (1)
               
Access Midstream Partners, L.P. (2)
    96,800       2,916,584  
Copano Energy, L.L.C. (2)
    152,916       4,692,992  
Crestwood Midstream Partners, L.P. (3)
    90,356       2,222,758  
DCP Midstream Partners, L.P. (2)
    107,759       4,648,723  
MarkWest Energy Partners, L.P. (2)
    82,600       4,386,060  
Targa Resources Partners L.P. (2)
    120,800       4,894,816  
Western Gas Partners L.P. (2)
    77,300       3,691,075  
              27,453,008  
Oil and Gas Production — 19.3% (1)
               
United States — 19.3% (1)
               
BreitBurn Energy Partners L.P. (2)
    181,288       3,547,806  
EV Energy Partners, L.P. (2)
    121,600       7,632,832  
Legacy Reserves, L.P. (2)
    126,600       3,530,874  
Linn Energy, L.L.C. (2)
    256,200       10,186,512  
Pioneer Southwest Energy Partners L.P. (2)
    150,900       3,863,040  
Vanguard Natural Resources, LLC (2)
    78,000       2,232,360  
              30,993,424  
Marine Transportation — 1.3% (1)
               
Republic of the Marshall Islands — 1.3% (1)
               
Teekay LNG Partners L.P. (2)
    53,500       2,125,020  
                 
Total Master Limited Partnerships and
               
   Related Companies (Cost $138,133,937)
            219,023,722  
                 
Common Stock — 2.7% (1)
               
Marine Transportation — 2.7% (1)
               
Republic of the Marshall Islands — 2.7% (1)
               
Navios Maritime Partners L.P.
    47,600       688,772  
Teekay Offshore Partners L.P. (2)
    127,175       3,610,498  
                 
Total Common Stock (Cost $3,117,739)
            4,299,270  
                 
Short-Term Investment — 0.0% (1)
               
United States Investment Company — 0.0% (1)
               
Fidelity Institutional Money Market Portfolio - Class I, 0.16% (5) (Cost $71,431)
    71,431       71,431  
                 
Total Investments — 138.9% (1) (Cost $141,323,107)
            223,394,423  
Interest Rate Swap Contracts - (0.8%) (1)
               
$25,000,000 notional - Unrealized Depreciation
            (1,342,669 )
Other Assets and Liabilities — (38.1%) (1)
            (61,260,032 )
Total Net Assets Applicable to Common
               
  Stockholders — 100.0% (1)
          $ 160,791,722  
                 
                 
(1) Calculated as a percentage of net assets applicable to common stockholders.
               
(2) All or a portion of the security is segregated as collateral for the margin borrowing facility. 
 
(3) 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 $1,342,669.
 
(5) Rate reported is the current yield as of August 31, 2012.
               

 
 
 


Various inputs are used in determining the value of the Company’s investments.  These inputs are summarized in the three broad levels listed below:
 
     Level 1 – quoted prices in active markets for identical investments
     Level 2 – other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.)
     Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)
 
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following table provides the fair value measurements of applicable Company assets by level within the fair value hierarchy as of August 31, 2012. These assets are measured on a recurring basis.

Description
Fair Value at August 31, 2012
 
Level 1
 
Level 2
 
Level 3
 
Assets
               
Equity Securities:
               
Common Stock (a)
$ 4,299,270   $ 4,299,270   $ -   $ -  
Master Limited Partnerships and Related Companies (a)
  219,023,722     219,023,722     -     -  
Total Equity Securities
  223,322,992     223,322,992     -     -  
Other:
                       
Short-Term Investment (b)
  71,431     71,431     -     -  
Total Assets
$ 223,394,423   $ 223,394,423   $ -   $ -  
Liabilities
                       
Interest Rate Swap Contracts
$ 1,342,669   $ -   $ 1,342,669   $ -  

(a)  
All other industry classifications are identified in the Schedule of Investments.
(b)   
Short-term investment is a sweep investment for cash balances in the Company at August 31, 2012.

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

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

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

The Company utilizes the beginning of reporting period method for determining transfers between levels.  For the period from December 1, 2011 through August 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.
 
As of August 31, 2012, the aggregate cost of securities for federal income tax purposes was $121,075,887.  The aggregate gross unrealized appreciation for all securities in which there was an excess of fair value over tax cost was $102,318,536, the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over fair value was $0 and the net unrealized appreciation was $102,318,536.

 
 
 

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

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

 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


  Tortoise North American Energy Corporation  
       
Date:  October 29, 2012
By:
  /s/ Terry Matlack  
    Terry Matlack  
    Chief Executive Officer  
       



Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

  Tortoise North American Energy Corporation  
       
Date: October 29, 2012
By:
  /s/ Terry Matlack  
    Terry Matlack  
    Chief Executive Officer  
       
  Tortoise North American Energy Corporation  
       
Date: October 29, 2012
By:
 /s/ P. Bradley Adams  
    P. Bradley Adams  
    Chief Financial Officer   
       

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