TTP

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Tortoise

2022 Annual Report to Stockholders

This combined report provides you with a comprehensive review of our funds that span essential assets.

 

Closed-end Fund Comparison	1
Letter to Stockholders	2
TTP: Fund Focus	6
NDP: Fund Focus	9
TPZ: Fund Focus	12
TEAF: Fund Focus	15
Financial Statements	21
Notes to Financial Statements	44
Report of Independent Registered Public Accounting Firm	58
Company Officers and Directors	59
Additional Information	61

 

TTP and TPZ distribution policies

Tortoise Pipeline & Energy Fund, Inc. (“TTP”) and Tortoise Power and Energy Infrastructure Fund, Inc. (“TPZ”) are relying on exemptive relief permitting them to make long-term capital gain distributions throughout the year. Each of TTP and TPZ, with approval of its Board of Directors (the “Board”), has adopted a managed distribution policy (the “Policy”). Annual distribution amounts are expected to fall in the range of 7% to 10% of the average week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. In accordance with its Policy, TTP distributes a fixed amount per common share, currently $.59, each quarter to its common shareholders. TPZ distributes a fixed amount per common share, currently $.105, each month to its common shareholders. Prior to February 2022, the monthly distribution rate was $.06. These amounts are subject to change from time to time at the discretion of the Board. Although the level of distributions is independent of TTP’s and TPZ’s performance, TTP and TPZ expect such distributions to correlate with its performance over time. Each quarterly and monthly distribution to shareholders is expected to be at the fixed amount established by the Board, except for extraordinary distributions in light of TTP’s and TPZ’s performance for the entire calendar year and to enable TTP and TPZ to comply with the distribution requirements imposed by the Internal Revenue Code. The Board may amend, suspend or terminate the Policy without prior notice to shareholders if it deems such action to be in the best interests of TTP, TPZ and their respective shareholders. For example, the Board might take such action if the Policy had the effect of shrinking TTP’s or TPZ’s assets to a level that was determined to be detrimental to TTP or TPZ shareholders. The suspension or termination of the Policy could have the effect of creating a trading discount (if TTP’s or TPZ’s stock is trading at or above net asset value), widening an existing trading discount, or decreasing an existing premium. You should not draw any conclusions about TTP’s or TPZ’s investment performance from the amount of the distribution or from the terms of TTP’s or TPZ’s distribution policy. Each of TTP and TPZ estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in TTP or TPZ is paid back to you. A return of capital distribution does not necessarily reflect TTP’s or TPZ’s investment performance and should not be confused with “yield” or “income.” The amounts and sources of distributions reported are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon TTP’s and TPZ’s investment experience during their fiscal year and may be subject to changes based on tax regulations. TTP and TPZ will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.

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2022 Annual Report | November 30, 2022

Closed-end Fund Comparison

	Name/Ticker		Primary focus		Structure		Total investments ($ millions)(1)		Portfolio mix by asset type(1)		Portfolio mix by structure(1)
	Tortoise Pipeline  & Energy Fund, Inc. NYSE: TTP Inception: 10/2011		North American pipeline companies		Regulated investment company		$93.5
	Tortoise Energy Independence Fund, Inc. NYSE: NDP Inception: 7/2012		North American oil & gas producers		Regulated investment company		$70.8
	Tortoise Power and Energy Infrastructure Fund, Inc. NYSE: TPZ Inception: 7/2009		Power & energy infrastructure companies (Fixed income & equity)		Regulated investment company		$123.4
	Ecofin Sustainable and Social Impact Term Fund NYSE: TEAF Inception: 3/2019		Essential assets		Regulated investment company		$249.0

(1)	As of 11/30/2022

	(unaudited)
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Tortoise

2022 Annual Report to closed-end fund stockholders

Dear stockholder

The 2022 fiscal year proved to be a volatile environment with numerous headwinds for the broad market. Headwinds included recessionary concerns, rising inflation, as well as the anticipation of higher interest rates. The energy sector was an outlier with positive performance for the second consecutive fiscal year. In fact, as of December 31, 2022, midstream, represented by the Tortoise North American Pipeline Index^SM, and broader energy, represented by the S&P 500 Energy Select Sector^® Index, outperformed the S&P 500 Index for the past two calendar years.

Renewable energy investments had a volatile year due to a variety of factors including inflation, sharply rising interest rates, political uncertainty, China COVID policies, decelerating economic growth and no end in sight to the war in Ukraine. Additional headwinds included uncertainties surrounding incentives legislation in the U.S., windfall taxes in Europe, security of energy supply, high energy prices, availability of equipment and components, and high logistics costs. However, the renewable energy sector was bolstered in August with the passage of the Inflation Reduction Act (IRA).

Social impact investments continued to make progress post-COVID lockdowns. The education sector was mixed. Despite the decrease in both offerings and par value within the sector, 2022 was still the second biggest year for K-12 charter and private school revenue bond issuance by par value. Senior housing and care communities experienced a significant recovery over the fiscal year bringing occupancy levels back up to their pre-COVID measures.

Energy and power infrastructure

The broad energy sector, returned 74.9% for the annual fiscal period. Energy started the year strong, sold off in June with the broader market on concerns about a looming recession but rallied into the fiscal year end as investors continued to rotate into the sector. The energy sector’s weight within the S&P 500 Index rose to above 5% for the first time since 2019 as investors sought inflation protection, rotated to a value bias from growth bias, and saw the Russia and Ukraine conflict bring energy security into focus. Potential concerns around a recession were offset by a tightening global energy supply as demand rebounds post-COVID. Global underinvestment resulting from environmental, social and governance (ESG) commitments and energy transition is likely to keep global stock balances extremely tight for the foreseeable future, a dynamic that presents higher, but perhaps more volatile prices as seen in 2022.

The global energy markets were dynamic throughout 2022. Organization of the Petroleum Exporting Countries+ (OPEC+) production continually undershot pledged production due to prolonged oil and gas underinvestment and rapidly shut-in production in 2020. The lack of supply coming to market complicates assessments over the actual amount of OPEC spare capacity. Spare capacity is critical as it guards against prices rapidly rising should a market exogenous event occur. In early October, the crude oil market tightened as OPEC+ responded to softening economic conditions in the Organization for Economic Cooperation and Development (OECD), namely Europe, by cutting production 2 million barrels per day (mm b/d). Separately, sanctions around exports of Russian energy took effect at the end of 2022 and are expected to increase in 2023 driven by an embargo of Russian crude oil above the price cap of $60. While Russian crude oil was more resilient than expected in 2022, volumes are projected to decline and/or face longer transit times to their end market. Given these disruptions, the focus remains on the supply side of the equation. On the demand side, global inventories continued to be drawn upon and are well below their 5-year averages. The scarcity of commodities comes at a time when global demand should be boosted by China re-opening from COVID lockdowns in 2023. Chinese demand growth is expected to build throughout the year.

2022 was the eighth consecutive year of underinvestment in oil and gas. With supply sources more finite there is a renewed opportunity for short-cycle North American energy. In 2022, U.S. oil production crossed 12 mm b/d, a level not seen since April 2020. For 2023, the Energy Information Agency (EIA) forecasts that production will increase 0.3 mm b/d to 12.6 mm b/d, up from 12.3 mm b/d at the end of 2022. While production is projected to increase year-over-year, the change is notably lower than previously thought. Rising capital intensity for U.S. shale including inflationary materials and service costs has operators messaging 10-20% year over year inflation. The Permian basin, America’s biggest oil field, is expected to be the primary driver of production growth with major integrated energy companies expected to increase their production by 10-25%.

Transitioning to natural gas, the Russia-Ukraine conflict presents an enormous long-term opportunity for U.S. liquefied natural gas (LNG). Entering 2022, Russian natural gas exports to Europe accounted for 13-15 billion cubic feet per day (Bcf/d) or 35-40% of the EU’s gas supply. In 2023, we expect Russian exports of energy to further shrink. With energy security a higher priority and low natural gas inventories, Europe has been increasingly importing U.S. LNG. The U.S. LNG market, while young, grew from zero market share to the top export market in just over seven years. Throughout 2022, LNG exporters contracted almost 6 Bcf/d of new contracts, signing 15-25-year contracts with European and Asian counterparties. The market awaits several Final Investment Decisions (FIDs) in 2023 which would put the U.S. on track to roughly double LNG export capacity by end of the decade. We expect a more mixed setup for natural gas in 2023, as supply outpaces demand and unseasonably warm weather lessened gas demand for Europe and North America. One short-term positive is the expected restart of Freeport LNG, which has been offline since the second half of 2022.

The midstream energy sector returned 28.8% for the period. Investor sentiment rounded with positive retail flows coupled with companies buying back stock in the open market. Beyond the constructive technical setup, we believe midstream serves as a hedge to many current risks investors face. The midstream sector’s strong fundamentals, attractive valuations, defensive characteristics in a higher rate and inflationary environment, and improved free cash flow should support outperformance on a relative basis.

Recession concerns weighed on investor psyche the second half of the fiscal year. While there were several recessions in the last 40 years, energy demand increased in 38 out of the last 40 years (2008 and 2020 decreased). Due to actions taken during the 2020 recession, we believe the energy sector, and specifically midstream, is well prepared to deal with another potential recession. The world remains undersupplied in energy, and we believe sector balance sheets are in much better shape than in past recessions including 2001, 2008, and 2020. 2022 earnings exceeded expectations with energy the one part of the market where earnings grew at an accelerated rate.

(unaudited)

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2022 Annual Report | November 30, 2022

As more volumes flowed through pipeline systems in 2022, cash flow increased for midstream companies. The balanced return of capital story continued for investors via debt reduction, share buybacks and increased distributions. Specifically, deleveraging continued as companies targeted leverage between 3.0x-4.0x after years of leverage between 4.0x-5.0x, distribution growth accelerated to 7% in 2022 as companies targeted a return to pre-COVID levels, and share buybacks accelerated with $3.4 billion repurchased through Q3. The other use of capital has been mergers and acquisitions (M&A). There were several accretive bolt-on acquisitions of private assets completed by larger energy infrastructure companies. These assets largely were complementary to existing assets, allowing operators to control energy volumes across more midstream activities.

With inflation surging to 40-year highs in 2022, midstream provided investors inflation protection. Pipelines typically have long-term contracts with inflation protection from regulated tariff escalators. Additionally, tariffs on regulated liquid pipelines often include an inflation escalator aligned with the Producer Price Index (PPI). Federal Energy Regulatory Commission (FERC) indexing could be a material driver of cash flows with rates potentially increasing over 13% next summer on top of an 8.7% increase that went into effect July 1, 2022.

Interest rates rose significantly in 2022 as the Federal Reserve took a more hawkish approach and started raising the Fed Funds rate. Historically, midstream energy displays strong historical returns in rising rate environments. In the 15 time periods of rising rates since 2001, midstream energy, represented by the Tortoise North American Pipeline Index^SM, returned an average return of 7.7%, compared to a S&P 500 average return of 6.1%, and bond return of -2.4% represented by the Bloomberg Barclays U.S. Aggregate Bond Index.

With energy supply short and energy security concerns emerging globally, investors are reminded how critical energy infrastructure is to daily life. Even before the Ukraine conflict, U.S. LNG cargoes were rapidly replenishing Europe’s low gas storage levels via LNG tankers. LPGs (liquid petroleum gases) were being exported to India and China, where demand is driven by global population growth and improvements in living standards. Whether it’s LNG, liquefied petroleum gas (LPG), or crude oil, U.S. energy infrastructure companies have signed long-term contracts and have been exporting energy all around the world.

On the regulatory front, it was another year of mixed news flow. In August, the passage of the IRA was intended to benefit the entire energy value chain and provide energy infrastructure significant decarbonization opportunities. The IRA provides incentives for three energy infrastructure decarbonization opportunities, specifically a carbon capture and sequestration 45Q tax credit, a hydrogen production tax credit, and support for renewable natural gas. Following the passage of the IRA, Senator Manchin aimed to reform infrastructure permitting through the proposed Energy Independence and Security Act of 2022. Passage ultimately failed but could be revisited in 2023. Permitting reform is needed. In the northeast Marcellus Basin, pipeline infrastructure is constrained. Despite this need, the one major pipeline which continues to be under construction is the Mountain Valley Pipeline (MVP) and during the first half of 2022, the U.S. Court of Appeals for the Fourth Circuit overturned federal approval of a key forest-crossing permit.

Demand for low-cost U.S. natural gas creates a need for additional natural gas pipelines and LNG export terminals. Seeing the setback with MVP, companies are doing what they can to avoid the red-tape that comes with building new pipelines. For example, one company announced that its pipeline expansion will increase the mainline capacity from 2 Bcf/d to 2.5 Bcf/d through the planned installation of three new compressor stations. Adding compression stations, for example, can avoid some of the exhaustive permitting process affiliated with building new pipelines.

Sustainable infrastructure

The year was volatile due to mixed developments at the macro and sector levels. At a high level, inflation, sharply rising interest rates, political uncertainty in several countries, China COVID policies, decelerating economic growth, and no end in sight to the war in Ukraine were powerful headwinds.

At the sector level, uncertainties surrounding incentives legislation in the US, windfall taxes in Europe, security of energy supply, high energy prices, availability of equipment and components, and high logistics costs all created volatility throughout the year.

In that context, cyclical (including autos) and tech sectors underperformed the market. However, despite these difficult circumstances, the renewables sector demonstrated its secular growth resilience outperforming the broader market. US utilities outperformed their European counterparts, while the utilities sector as a whole beat the broader market.

Towards the end of the period, the Federal Reserve chairman’s somewhat dovish comments supported equity markets to the close of the period.

The following major developments affecting the sustainable infrastructure and energy transition sector during the year are worth mentioning.

Inflation Reduction Act: The U.S. administration’s Inflation Reduction Act, which was passed during the year, contains most of the clean energy measures in the now defunct Build Back Better Act, and includes even more domestic manufacturing incentives than we expected. The $369 billion bill extends and upgrades various tax credits for technologies such as wind and solar, while introducing new tax credits and incentives for emergent technologies such as green hydrogen and standalone battery storage which should materially help accelerate deployment timelines. The manufacturing credits provided by the IRA should also accelerate and expand the onshoring of many cleantech value chains, from renewables and storage to autos and materials. In our view, it is a game changer for the entire energy transition and renewables value chain as it gives 10-year visibility to the space.

We expect the IRA to add to an inflection point in U.S. electricity demand, and demand for decarbonised electricity, delivering a growth phase for a sector that has seen limited demand growth for over a decade. We expect renewables developers to start announcing numerous new projects and to enhance the value of existing projects by taking advantage of more attractive incentives. We also foresee many more equipment manufacturing plants to be built in the US. We believe the positive impacts of the IRA aren’t yet

(unaudited)
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fully baked into market expectations. We expect many of the impacts of the IRA will move from drawing boards to revenues and earnings impacts starting in 2024, as new factories and operating assets start to come online.

Government Intervention: Across Europe and for most of the year, uncertainty on potential government intervention weighed on the sector. Many of these concerns surrounded windfall taxes, a form of government intervention which confiscate a portion of profits companies gain due to the pervasive higher power price environment. These confiscated profits are then redistributed to support consumers facing unbearably high energy prices.

Upon the close of the period, we finally gained much more clarity on power prices and windfall taxes in Europe (UK, Italy and Germany) with a better outcome than feared for the majority of countries. This clarity will provide higher forward-looking visibility and stability.

Energy Security: During the year, the Ukraine war escalated both militarily and in terms of gas supply volatility from Russia into Europe, which drove gas prices to new highs. There is still a risk to Winter 2023 gas supply and significant risk of further military escalation. The consequences of these impacts are primarily being felt in the EU Zone economy, but have a ripple effect beyond Europe, as manufacturing costs, forward activity, and concerns about access to energy-intensive materials become more acute.

Waste transition

The year in review included several significant governmental and corporate actions to promote sustainability efforts in the U.S. The most influential event was the passage of the Inflation Reduction Act of 2022. The Act contains an array of economic incentives to support the construction of new waste conversion facilities to produce renewable natural gas, renewable diesel, and sustainable aviation fuel. Notably, the investment tax credits now available for biogas facilities such as anaerobic digesters, and the provision for multi-year fuel credits for facilities that produce renewable diesel and sustainable aviation fuel, are expected to spur the development and construction of many new facilities in the sector.

Also at the federal level, the U.S. EPA updated its “set” rules for the Renewable Fuel Standard program, which encourages the displacement of fossil fuels with renewable fuels. To promote stability, the EPA set rules for a three-year period from 2023 through 2025, requiring continued growth of renewable fuels as a percentage of the overall transportation fuel mix, from 11.92% in 2023, to 12.55% in 2024, and to 13.05% in 2025. In a major new development, the EPA also proposed e-RINs to provide credits in connection with electric vehicles powered by electricity generated from biogas or biofuels.

At the state level, the California Air Resources Board, known as CARB, held public workshops to discuss potential modifications to its Low Carbon Fuel Standard program. The LCFS program provides economic benefit for facilities that produce biogas or biofuels for use as transportation fuels in California. The current LCFS targets a reduction in greenhouse gas emissions of 20% by 2030, whereas the recent workshops have discussed increasing the target to 25%, 30%, or 35%. Any increase in the emission-reduction targets should have a positive impact on LCFS fuel credit pricing.

Separately, in the waste-to-value sector, the driving force toward a more circular economy is from corporations seeking to reduce the Scope³ greenhouse gas emissions of their value-chain suppliers and partners. The corporate support generally involves entering into purchase contracts with recycling facilities to improve the recycled content of packaging, reduce transportation emissions, and/or reduce overall carbon intensity. These multi-year purchase contracts are expected to provide meaningful support for sustainability and recycling efforts in 2023 and beyond and are expected to encourage the construction of new facilities to support the production required by the purchase contracts.

Social impact

Education

The public bond market for new issuance of K-12 charter school and private school revenue bonds in Q4 2022 declined to $810 million, a 46% decrease from the same period in 2021. For all of 2022, K-12 charter school bond offerings dropped from 203 to 148 and par value issuance declined from $5.4 billion in 2021 to $4.2 billion in 2022. The market slowdown for K-12 charter school bond offerings was primarily the result of the rising interest rate environment throughout most of 2022.¹

In contrast to the shrinkage in the bond market, new data continues to provide greater insights as to the scale and resilience of charter school enrollment gains made during the pandemic. Driven primarily by increases in the 2020 – 2021 school year, charter schools saw a 7.08% enrollment increase, gaining 236,742 students. During the same period, all other public schools saw a 3.46% enrollment decrease, a loss of 1,497,505 students. Despite reopening of schools for in-person instruction in nearly all schools across the nation, for the 2021 – 2022 school year, families chose not to return to the district public schools they departed during the pandemic. These findings are consistent with polling and analysis published in August indicating that parents are demanding high-quality school options, and more and more often, they are “voting with their feet” when their assigned district public school does not meet their expectations.^2,3,4

Charter schools also saw many legislative victories in 2022 in states across the nation. Kentucky closed a critical loophole in its 2017 law by enacting a permanent funding mechanism for charter schools. Missouri enacted a new law that requires the state department of education to close any gap in state and local funding that exists between the district and the charter schools within a district, a change that could increase the funding charter schools receive by as much as $2,500 per student. Finally, Illinois, New Mexico, Florida, Tennessee, Colorado and more all passed legislation providing additional facilities funding for charter schools.⁵

As states respond to increasing parental demand for school choice options, the availability of school facilities to meet these demands has proven to be a challenging hurdle. Despite the decrease in both offerings and par value, 2022 was still the second biggest year for K-12 charter and private school revenue bond issuance by par value.¹ While an interest-rate environment not seen in decades and massive fund outflows served to limit most high-yield municipal bond funds, for Ecofin, it resulted in an increase in both the volume and credit

(unaudited)
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2022 Annual Report | November 30, 2022

quality of investment opportunities throughout the year. As economic and education challenges continue to evolve, Ecofin will continue to leverage its decades-long commitment to the sector to provide a suitable financing alternative for K-12 charter school and private schools while seeking to provide solid returns to our investors.

Senior Living

Senior housing and care communities had a year of robust recovery in 2022. After occupancy declines in 2020 and 2021, all units lost during the pandemic were reoccupied in 2022 bringing occupancy levels back up to their pre-COVID measures.⁶

In the third quarter of 2022, the for-profit senior living sector recorded its fifth quarter in a row of occupancy gains. Statistically, nationwide occupancy for independent living and assisted living is 84.7% and 79.7%, respectively. Occupancy increased 0.9% for independent and 1.1% for assisted living from Q2 2022. Recovery has been slightly stronger in the higher acuity and needs based assisted living setting; however, independent living is not far behind. As of the third quarter, independent living had regained 4.9% occupancy and assisted living 5.0% since hitting lows in 2021.⁶

Non-profit senior living has faired much better than their for-profit brethren since the pandemic hit. As of Q2 2022, non-profit continuing care retirement communities (“CCRC’s) were a full 6% better occupied than for-profits and have continued to benefit from the same operational tailwinds.⁶

Occupancy recovery has been fueled by over two years of slowing construction starts which, as of the third quarter 2022, recorded the lowest primary market inventory growth since 2013. Rising interest rates and elevated construction costs should continue to propel occupancy in the months to come.

From a macroeconomic standpoint, senior living has not been immune to inflationary pressures and margin compression. To pass along increased costs, 2022 was marked with significant rate growth across the sector. In fact, the second quarter of 2022 had the highest year over year national rate growth recorded. Independent living increased 9.4%, assisted living 8.7% and memory care 8.7%. Based on conversations with our operating partners, residents and their families have been supportive of these increases and have not pushed back.⁶ Many of our operating partners expect to increase rates higher than the average 3% annual increase in 2023. Furthermore, the independent living setting has become higher acuity than it was ten years ago. The increased need for care should help justify rate increases and further insulate the sector from potential economic downturns in the future.

From now until 2030, an average of 10,000 baby boomers will turn 65 every day.⁷ With the combination of increased population and a slower pace of new senior living inventory supply, we remain confident in the senior living industry’s ability to rebound and prepare for the upcoming “Silver Tsunami” as the population continues to age.

Concluding thoughts

With continued positive trends for the energy sector, we stand by our positive long-term outlook for the sector. With the help of the IRA, we are encouraged and hope for improved performance of sustainable infrastructure and climate action investments heading into 2023. Our opportunities for investing in social impact projects have been continuously expanding to meet the needs of parents wanting better educational options for their children and to accommodate the aging baby boomer population.

The S&P Energy Select Sector^® Index is a capitalization-weighted index of S&P 500^® Index companies in the energy sector involved in the development or production of energy products. The Tortoise North American Pipeline Index^SM is a float adjusted, capitalization-weighted index of energy pipeline companies domiciled in the United States and Canada. The Tortoise MLP Index^® is a float-adjusted, capitalization-weighted index of energy master limited partnerships.

The Tortoise indices are the exclusive property of Tortoise Index Solutions, LLC, which has contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) to calculate and maintain the Tortoise MLP Index^® and Tortoise North American Pipeline Index^SM (the “Indices”). The Indices are not sponsored by S&P Dow Jones Indices or its affiliates or its third party licensors (collectively, “S&P Dow Jones Indices LLC”). S&P Dow Jones Indices will not be liable for any errors or omission in calculating the Indices. “Calculated by S&P Dow Jones Indices” and its related stylized mark(s) are service marks of S&P Dow Jones Indices and have been licensed for use by Tortoise Index Solutions, LLC and its affiliates. S&P^® is a registered trademark of Standard & Poor’s Financial Services LLC (“SPFS”), and Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”).

It is not possible to invest directly in an index.

Performance data quoted represent past performance; past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment, when sold, may be worth more or less than its original cost.

1	Electronic Municipal Market Access (https://emma.msrb.org/) & MuniOS (https://www.munios.com/)
2	National charter school enrollment flat after early pandemic gains, according to report. Chalkbeat, November 23, 2022
3	Changing Course: Public School Enrollment Shifts During the Pandemic, November 2022, National Alliance for Public Charter Schools, Drew Jacobs & Debbie Venney
4	Never Going Back: An Analysis of Parent Sentiment on Education, August 2022. National Alliance for Public Charter Schools
5	2022 State Legislative Highlights for Public Charter Schools, December 2022. Todd Ziebarth, National Alliance for Public Charter Schools
6	NIC
7	census.gov

(unaudited)
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Tortoise

Pipeline & Energy Fund, Inc. (TTP)

Fund description

The Tortoise Pipeline & Energy Fund (TTP) seeks a high level of total return with an emphasis on current distributions paid to stockholders. TTP invests primarily in equity securities of North American pipeline companies that transport natural gas, natural gas liquids (NGLs), crude oil and refined products and, to a lesser extent, in other energy infrastructure companies.

Fund performance

As more volumes flowed through pipeline systems in 2022, cash flow increased for midstream companies. The balanced return of capital story continued for investors via debt reduction, share buybacks and increased distributions. Specifically, deleveraging continued as companies targeted leverage between 3.0x-4.0x after years of leverage between 4.0x-5.0x, distribution growth accelerated to 7% in 2022 as companies targeted a return to pre-COVID levels, and share buybacks accelerated with $3.4 billion repurchased through the Q3. The fund’s market-based and NAV-based returns (including the reinvestment of distributions) for the fiscal year were 33.9% and 34.7%, respectively. The Tortoise North American Pipeline Index^SM returned 28.8% for the same period.

2022 fiscal year summary
Distributions paid per share (fiscal year 2022)			$2.3600
Distributions paid per share (4th quarter 2022)			$0.5900
Distribution rate (as of 11/30/2022)			8.3%
Quarter-over-quarter distribution increase (decrease)			0.0%
Year-over-year distribution increase (decrease)			59.5%
Cumulative distributions paid per share to stockholders Since inception in October 2011		$	17.2975(1)
Market-based total return			33.9%
NAV-based total return			34.7%
Premium (discount) to NAV (as of 11/30/2022)			(17.7)%

(1)	Distribution per share is unadjusted for the impact of reverse stock split.

Please refer to the inside front cover of the report for important information about the fund’s distribution policy

The fund utilizes a covered call strategy when appropriate, which seeks to generate income while reducing overall volatility. No covered calls were written during the fiscal year.

Key asset performance drivers
Top five contributors		Company type
Williams Companies Inc.		Natural gas pipeline
Plains GP Holdings, L.P.		Crude oil pipeline
Kinder Morgan Inc		Natural gas pipeline
Energy Transfer LP		Natural gas pipeline
Cheniere Energy Inc.		Natural gas pipeline
Bottom five contributors		Company type
ESS Tech Inc		Other
Equitrans Midstream Corporation		Gathering & processing
NextDecade Corporation		Natural gas pipeline
NextEra Energy Partners		Diversified infrastructure
Clearway Energy, Inc.		Diversified infrastructure

Unlike the fund return, index return is pre-expenses.

Performance data quoted represent past performance; past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment, when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule of Investments for portfolio weighting at the end of the fiscal quarter.

(unaudited)

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2022 Annual Report | November 30, 2022

Tortoise

Pipeline & Energy Fund, Inc. (TTP) (continued)

Value of $10,000 vs. Tortoise Pipeline and Energy Fund – Market (unaudited)

From November 30, 2012 through November 30, 2022

 

The chart assumes an initial investment of $10,000. Performance reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Performance data quoted represents past performance and does not guarantee future results. Investment returns and principal value will fluctuate, and when sold, may be worth more or less than their original cost. Performance current to the most recent month-end may be lower or higher than the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment of capital gains and income distributions. The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Annualized Rates of Return as of November 30, 2022

		1-Year				3-Year				5-Year				10-Year				Since Inception(1)
Tortoise Pipeline and Energy Fund – NAV			34.73%				-6.51%				-7.23%				-2.92%				-1.56%
Tortoise Pipeline and Energy Fund – Market			33.85%				-8.88%				-8.96%				-4.37%				-3.68%
Tortoise North American Pipeline Index			28.78%				12.43%				8.67%				7.69%				10.85%

(1)	Inception date of the Fund was October 26, 2011.

Fund structure and distribution policy

The fund is structured to qualify as a Regulated Investment Company (RIC) allowing it to pass-through to shareholders income and capital gains earned, thus avoiding double-taxation. To qualify as a RIC, the fund must meet specific income, diversification and distribution requirements. Regarding income, at least 90 percent of the fund’s gross income must be from dividends, interest and capital gains. The fund must meet quarterly diversification requirements including the requirement that at least 50 percent of the assets be in cash, cash equivalents or other securities with each single issuer of other securities not greater than 5 percent of total assets. No more than 25 percent of total assets can be invested in any one issuer other than government securities or other RIC’s. The fund must also distribute at least 90 percent of its investment company income. RIC’s are also subject to excise tax rules which require RIC’s to distribute approximately 98 percent of net income and net capital gains to avoid a 4 percent excise tax.

The fund has adopted a distribution policy which is included on the inside front cover of this report. To summarize, the fund has adopted a managed distribution policy (“MDP”). Annual distribution amounts are expected to fall in the range of 7% to 10% of the average week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. Distribution amounts will be reset both up and down to provide a consistent return on trailing NAV. Under the MDP, distribution amounts will normally be reset in February and August, with no changes in distribution amounts in May and November. The fund may designate a portion of its distributions as capital gains and may also distribute additional capital gains in the last quarter of the year to meet annual excise distribution requirements. Distribution amounts are subject to change from time to time at the discretion of the Board.

Leverage

The fund’s leverage utilization decreased $1.1 million during the six months ended Q4 2022, compared to the six months ended Q2 2022, and represented 21.1% of total assets at November 30, 2022. At year-end, the fund was in compliance with applicable coverage ratios, 50.6% of the leverage cost was fixed, the weighted-average maturity was 1.1 years and the weighted-average annual rate on leverage was 5.45%. These rates will vary in the future as a result of changing floating rates, utilization of the fund’s credit facility and as leverage matures or is redeemed.

Please see the Financial Statements and Notes to Financial Statements for additional detail regarding critical accounting policies, results of operations, leverage and other important fund information.

For further information regarding the calculation of distributable cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit www.tortoiseecofin.com.

(unaudited)
Tortoise	7

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TTP Key Financial Data (supplemental unaudited information) (dollar amounts in thousands unless otherwise indicated)

The information presented below is supplemental non-GAAP financial information, is not inclusive of required financial disclosures (e.g. Total Expense Ratio), and should be read in conjunction with the full financial statements.

		2021								2022
		Q3(1)				Q4(1)				Q1(1)				Q2(1)				Q3(1)				Q4(1)
Selected Financial Information
Distributions paid on common stock		$	831			$	824			$	1,314			$	1,314			$	1,314			$	1,249
Distributions paid on common stock per share(2)			0.3700				0.3700				0.5900				0.5900				0.5900				0.5900
Total assets, end of period(3)			83,133				80,898				92,230				100,901				97,010				93,907
Average total assets during period(3)(4)			86,656				84,993				86,730				96,706				96,086				93,079
Leverage(5)			20,557				18,143				20,143				20,943				21,343				19,843
Leverage as a percent of total assets			24.7	%			22.4	%			21.8	%			20.8	%			22.0	%			21.1	%
Net operating expenses before leverage costs(6)			1.62	%			1.04	%			1.00	%			1.90	%			1.05	%			1.32	%
Net unrealized appreciation (depreciation), end of period			(313	)			1,003				11,927				20,208				17,286				19,117
Net assets, end of period			62,043				62,289				71,653				79,443				75,181				73,509
Average net assets during period(7)			66,284				67,014				66,721				76,749				73,287				71,609
Net asset value per common share(2)			27.70				27.96				32.16				35.66				33.75				34.73
Market value per common share(2)			23.05				23.16				26.44				29.76				29.18				28.58
Shares outstanding (000’s)			2,239				2,228				2,228				2,228				2,228				2,116

(1)	Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August. Q4 is the period from September through November.
(2)	Adjusted to reflect 1 for 4 reverse stock split effective May 1, 2020.
(3)	Includes deferred issuance and offering costs on senior notes and preferred stock.
(4)	Computed by averaging month-end values within each period.
(5)	Leverage consists of senior notes, preferred stock and outstanding borrowings under the revolving credit facility.
(6)	Computed as a percent of total assets.
(7)	Computed by averaging daily net assets within each period.

8

Tortoise

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2022 Annual Report | November 30, 2022

Tortoise

Energy Independence Fund, Inc. (NDP)

Fund description

The Tortoise Energy Independence Fund (NDP) seeks a high level of total return with an emphasis on current distributions paid to stockholders. NDP invests primarily in equity securities of upstream North American energy companies that engage in the exploration and production of crude oil, condensate, natural gas and natural gas liquids that generally have a significant presence in North American oil and gas fields, including shale reservoirs.

Fund performance

2022 was eighth consecutive year of underinvestment in oil and gas. With supply sources more finite there is a renewed opportunity for short-cycle North American energy. In 2022, U.S. oil production crossed 12 mm b/d, a level not seen since April 2020. For 2023, the Energy Information Agency (EIA) forecasts that production will increase 0.3 mm b/d to 12.6 mm b/d, up from 12.3 mm b/d at the end of 2022. While production is projected to increase year-over-year, the change is notably lower than previously thought. Rising capital intensity for U.S. shale including inflationary materials and service costs has operators messaging 10-20% year over year inflation. The Permian basin, America’s biggest oil field, is expected to be the primary driver of production growth with major integrated energy companies expected to increase their production by 10-25%.

Transitioning to natural gas, the Russia-Ukraine conflict presents an enormous long-term opportunity for U.S. liquefied natural gas (LNG). Entering 2022, Russian natural gas exports to Europe accounted for 13-15 billion cubic feet per day (Bcf/d) or 35-40% of the EU’s gas supply. In 2023, we expect Russian exports of energy to further shrink. With energy security a higher priority and low natural gas inventories, Europe is increasingly importing U.S. LNG. The U.S. LNG market, while young, grew from zero market share to the top export market in just over seven years. Throughout 2022, LNG exporters contracted almost 6 Bcf/d of new contracts, signing 15-25-year contracts with European and Asian counterparties.

The fund’s market-based and NAV-based returns (including the reinvestment of distributions) for the fiscal year were 55.7% and 62.6%, respectively. The S&P 500 Energy Select Sector Index returned 74.9% for the same period.

2022 fiscal year summary
Distributions paid per share (fiscal year 2022)			$2.0800
Distributions paid per share (4th quarter 2022)			$0.5600
Distribution rate (as of 11/30/2022)			6.9%
Quarter-over-quarter distribution increase (decrease)			0.0%
Year-over-year distribution increase (decrease)			80.6%
Cumulative distributions paid per share to stockholders Since inception in July 2012		$	14.8125(1)
Market-based total return			55.7%
NAV-based total return			62.6%
Premium (discount) to NAV (as of 11/30/2022)			(15.2)%

(1)	Distribution per share is unadjusted for the impact of reverse stock split.

The fund utilizes a covered call strategy when appropriate, which seeks to generate income while reducing overall volatility. No covered calls were written during the fiscal year.

Key asset performance drivers

Top five contributors		Company type
Cheniere Energy Inc.		Natural gas pipeline
Devon Energy Corporation		Oil & gas production
EQT Corp		Oil & gas production
Occidental Petroleum Corp.		Oil & gas production
EOG Resources Inc		Oil & gas production
Bottom five contributors		Company type
ESS Tech Inc.		Other
NextEra Energy Inc.		Diversified infrastructure
NextDecade Corporation		Natural gas pipeline
Clean Energy Fuels Corp		Other
Darling Ingredients Inc.		Other

Unlike the fund return, index return is pre-expenses.

Performance data quoted represent past performance: past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment, when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule of Investments for portfolio weighting at the end of the fiscal quarter.

(unaudited)
Tortoise	9

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Tortoise

Energy Independence Fund, Inc. (NDP) (continued)

Value of $10,000 vs. Tortoise Energy Independence Fund – Market (unaudited)

From November 30, 2012 through November 30, 2022

 

The chart assumes an initial investment of $10,000. Performance reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Performance data quoted represents past performance and does not guarantee future results. Investment returns and principal value will fluctuate, and when sold, may be worth more or less than their original cost. Performance current to the most recent month-end may be lower or higher than the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment of capital gains and income distributions. The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Annualized Rates of Return as of November 30, 2022

			1-Year			3-Year				5-Year				10-Year				Since Inception(1)
Tortoise Energy Independence Fund – NAV			62.58%				9.39%				-10.16%				-5.82%				-5.90%
Tortoise Energy Independence Fund – Market			55.70%				8.41%				-12.41%				-7.21%				-7.81%
S&P 500 Energy Select Sector Index			74.92%				22.87%				11.01%				6.46%				6.59%

(1)	Inception date of the Fund was July 26, 2012.

Fund structure and distribution policy

The fund is structured to qualify as a Regulated Investment Company (RIC) allowing it to pass-through to shareholders income and capital gains earned, thus avoiding double-taxation. To qualify as a RIC, the fund must meet specific income, diversification and distribution requirements. Regarding income, at least 90 percent of the fund’s gross income must be from dividends, interest and capital gains. The fund must meet quarterly diversification requirements including the requirement that at least 50 percent of the assets be in cash, cash equivalents or other securities with each single issuer of other securities not greater than 5 percent of total assets. No more than 25 percent of total assets can be invested in any one issuer other than government securities or other RIC’s. The fund must also distribute at least 90 percent of its investment company income. RIC’s are also subject to excise tax rules which require RIC’s to distribute approximately 98 percent of net income and net capital gains to avoid a 4 percent excise tax.

The fund has adopted a distribution policy which is included on the inside front cover of this report. To summarize, the fund has adopted a managed distribution policy (“MDP”). Annual distribution amounts are expected to fall in the range of 7% to 10% of the average week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. Distribution amounts will be reset both up and down to provide a consistent return on trailing NAV. Under the MDP, distribution amounts will normally be reset in February and August, with no changes in distribution amounts in May and November. The fund may designate a portion of its distributions as capital gains and may also distribute additional capital gains in the last quarter of the year to meet annual excise distribution requirements. Distribution amounts are subject to change from time to time at the discretion of the Board.

Leverage

The fund’s leverage utilization increased $0.1 million during the six months ended Q4 2022 as compared to the six months ended Q2 2022. The fund utilizes all floating rate leverage that had an interest rate of 5.24% and represented 5.2% of total assets at year-end. During the period, the fund maintained compliance with its applicable coverage ratios. The interest rate on the fund’s leverage will vary in the future along with changing floating rates.

Please see the Financial Statements and Notes to Financial Statements for additional detail regarding critical accounting policies, results of operations, leverage and other important fund information.

For further information regarding the calculation of distributable cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit www.tortoiseecofin.com.

(unaudited)
10	Tortoise

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2022 Annual Report | November 30, 2022

NDP Key Financial Data (supplemental unaudited information) (dollar amounts in thousands unless otherwise indicated)

The information presented below is supplemental non-GAAP financial information, is not inclusive of required financial disclosures (e.g. Total Expense Ratio), and should be read in conjunction with the full financial statements.

		2021								2022
		Q3(1)				Q4(1)				Q1(1)				Q2(1)				Q3(1)				Q4(1)
Selected Financial Information
Distributions paid on common stock		$	572			$	572			$	886			$	886			$	1,034			$	982
Distributions paid on common stock per share(2)			0.3100				0.3100				0.4800				0.4800				0.5600				0.5600
Total assets, end of period			43,973				51,135				62,500				75,288				72,928				71,059
Average total assets during period(3)			45,851				49,036				55,216				67,737				69,811				71,651
Leverage(4)			3,100				2,700				3,200				3,600				4,000				3,700
Leverage as a percent of total assets			7.0	%			5.3	%			5.1	%			4.8	%			5.5	%			5.2	%
Net Operating expenses before leverage costs as a percent of total assets			2.12	%			1.27	%			1.23	%			1.46	%			1.24	%			1.34	%
Net unrealized appreciation (depreciation), end of period			5,595				9,327				22,097				32,340				29,531				30,806
Net assets, end of period			40,604				46,398				58,650				71,407				67,884				67,067
Average net assets during period(5)			42,801				46,787				51,521				64,733				63,623				67,687
Net asset value per common share(2)			22.00				25.13				31.77				38.68				36.77				38.24
Market value per common share(2)			19.49				22.24				27.59				32.47				32.37				32.41
Shares outstanding (000’s)			1,846				1,846				1,846				1,846				1,846				1,754

(1)	Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August. Q4 is the period from September through November.
(2)	Adjusted to reflect 1 for 8 reverse stock split effective May 1, 2020.
(3)	Computed by averaging month-end values within each period.
(4)	Leverage consists of outstanding borrowings under the revolving credit facility.
(5)	Computed by averaging daily net assets within each period.

Tortoise

11

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Tortoise

Power and Energy Infrastructure Fund, Inc. (TPZ)

Fund description

The Tortoise Power and Energy Infrastructure Fund (TPZ) seeks to provide a high level of current income to stockholders, with a secondary objective of capital appreciation. TPZ seeks to invest primarily in fixed income and dividend-paying equity securities of power and energy infrastructure companies that provide stable and defensive characteristics throughout economic cycles.

Fund performance

As more volumes flowed through pipeline systems in 2022, cash flow increased for midstream companies. The balanced return of capital story continued for investors via debt reduction, share buybacks and increased distributions. Specifically, deleveraging continued as companies targeted leverage between 3.0x-4.0x after years of leverage between 4.0x-5.0x, distribution growth accelerated to 7% in 2022 as companies targeted a return to pre-COVID levels, and share buybacks accelerated with $3.4 billion repurchased through the Q3. The utilities sector outperformed the broader market, boosting power companies. The fund’s market-based and NAV-based returns (including the reinvestment of distributions) for the fiscal year were 14.9% and 14.4%, respectively. Comparatively, the TPZ Benchmark Composite* returned -1.7% for the same period. The fund’s equity holdings outperformed its fixed income holdings for the fiscal year on a total return basis.

2022 fiscal year summary
Distributions paid per share (fiscal year 2022)			$1.1700
Monthly distributions paid per share			$0.1050
Distribution rate (as of 11/30/2022)			9.2%
Quarter-over-quarter distribution increase (decrease)			0.0%
Year-over-year distribution increase (decrease)			75.0%
Cumulative distribution to stockholders since inception in July 2009		$	19.6350
Market-based total return			14.9%
NAV-based total return			14.4%
Premium (discount) to NAV (as of 11/30/2022)			(14.0)%

*

The TPZ Benchmark Composite includes the BofA Merrill Lynch U.S. Energy Index (CIEN), the BofA Merrill Lynch U.S. Electricity Index (CUEL) and the Tortoise MLP Index® (TMLP). It is comprised of a blend of 70% fixed income and 30% equity securities issued by companies in the power and energy infrastructure sectors.

Please refer to the inside front cover of the report for important information about the fund’s distribution policy.

Key asset performance drivers
Top five contributors		Company type
Energy Transfer LP		Natural gas pipeline
MPLX LP		Refined products pipeline
Western Midstream Partners LP		Gathering & processing
Plains GP Holdings, L.P.		Crude oil pipeline
DCP Midstream LP		Natural gas pipeline
Bottom five contributors		Company type
NextEra Energy Inc.		Power
Enbridge Inc		Crude oil pipeline
ONEOK, Inc.		Natural gas pipeline
Buckeye Partners LP		Refined products pipeline
Rockies Express Pipeline LLC		Natural gas pipeline

Unlike the fund return, index return is pre-expenses.

Performance data quoted represent past performance; past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment, when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule of Investments for portfolio weighting at the end of the fiscal quarter.

(unaudited)
12	Tortoise

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2022 Annual Report | November 30, 2022

Tortoise

Power and Energy Infrastructure Fund, Inc. (TPZ) (continued)

Value of $10,000 vs. Tortoise Power and Energy Infrastructure Fund – Market (unaudited)

From November 30, 2012 through November 30, 2022

 

The chart assumes an initial investment of $10,000. Performance reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Performance data quoted represents past performance and does not guarantee future results. Investment returns and principal value will fluctuate, and when sold, may be worth more or less than their original cost. Performance current to the most recent month-end may be lower or higher than the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment of capital gains and income distributions. The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Annualized Rates of Return as of November 30, 2022

			1-Year			3-Year				5-Year				10-Year				Since Inception(2)
Tortoise Power and Energy Infrastructure Fund – NAV			14.37%				4.18%				2.00%				2.53%				5.83%
Tortoise Power and Energy Infrastructure Fund – Market			14.87%				3.40%				0.31%				1.58%				4.64%
TPZ Benchmark Composite(1)			-1.69%				3.71%				3.56%				3.14%				5.81%

(1)	The TPZ Benchmark Composite includes the BofA Merrill Lynch U.S. Energy Index (CIEN), the BofA Merrill Lynch U.S. Electricity Index (CUEL) and the Tortoise MLP Index® (TMLP).
(2)	Inception date of the Fund was July 29, 2009.

Fund structure and distribution policy

The fund is structured to qualify as a Regulated Investment Company (RIC) allowing it to pass-through to shareholders income and capital gains earned, thus avoiding double-taxation. To qualify as a RIC, the fund must meet specific income, diversification and distribution requirements. Regarding income, at least 90 percent of the fund gross income must be from dividends, interest and capital gains. The fund must meet quarterly diversification requirements including the requirement that at least 50 percent of the assets be in cash, cash equivalents or other securities with each single issuer of other securities not greater than 5 percent of total assets. No more than 25 percent of total assets can be invested in any one issuer other than government securities or other RIC’s. The fund must also distribute at least 90 percent of its investment company income. RIC’s are also subject to excise tax rules which require RIC’s to distribute approximately 98 percent of net income and net capital gains to avoid a 4 percent excise tax.

The fund has adopted a distribution policy which is included on the inside front cover of this report. To summarize, the fund has adopted a managed distribution policy (“MDP”). Annual distribution amounts are expected to fall in the range of 7% to 10% of the average week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. Distribution amounts will be reset both up and down to provide a consistent return on trailing NAV. Under the MDP, distribution amounts will normally be reset in February and August, with no changes in distribution amounts in May and November. The fund may designate a portion of its distributions as capital gains and may also distribute additional capital gains in the last quarter of the year to meet annual excise distribution requirements. Distribution amounts are subject to change from time to time at the discretion of the Board.

Leverage

The fund’s leverage utilization increased $0.3 million during the six months ended Q4 2022 as compared to the six months ended Q2 2022, and represented 20.8% of total assets at November 30, 2022. During the period, the fund maintained compliance with its applicable coverage ratios. At year-end, 92.7% of the leverage cost was fixed, the weighted-average maturity was 1.1 years and the weighted-average annual rate on leverage was 3.47%. These rates will vary in the future as a result of changing floating rates.

Please see the Financial Statements and Notes to Financial Statements for additional detail regarding critical accounting policies, results of operations, leverage and other important fund information.

For further information regarding the calculation of distributable cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit www.tortoiseecofin.com.

(unaudited)
Tortoise	13

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TPZ Key Financial Data (supplemental unaudited information) (dollar amounts in thousands unless otherwise indicated)

The information presented below is supplemental non-GAAP financial information, is not inclusive of required financial disclosures (e.g. Total Expense Ratio), and should be read in conjunction with the full financial statements.

		2021												2022
			Q3(1)				Q4(1)				Q1(1)				Q2(1)				Q3(1)				Q4(1)
Selected Financial Information
Distributions paid on common stock		$	1,050			$	1,175			$	1,468			$	2,056			$	2,056			$	2,021
Distributions paid on common stock per share			0.1600				0.1800				0.2250				0.3150				0.3150				0.3150
Total assets, end of period			124,958				123,000				128,994				132,902				128,405				124,715
Average total assets during period(2)			127,825				125,633				126,282				131,028				127,458				125,149
Leverage(3)			24,000				24,000				24,000				25,600				25,800				25,900
Leverage as a percent of total assets			19.2	%			19.5	%			18.6	%			19.3	%			20.1	%			20.8	%
Operating expenses before leverage costs as a percent of total assets			1.32	%			1.35	%			1.30	%			1.19	%			1.37	%			1.65	%
Net unrealized appreciation (depreciation), end of period			3,749				2,356				10,439				14,292				11,392				12,878
Net assets, end of period			100,388				98,462				104,493				106,782				102,077				98,245
Average net assets during period(4)			103,705				103,148				101,888				105,651				99,912				98,208
Net asset value per common share			15.38				15.09				16.01				16.36				15.64				15.85
Market value per common share			13.00				12.92				14.08				14.15				13.66				13.63
Shares outstanding (000’s)			6,526				6,526				6,526				6,526				6,526				6,200

(1)	Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August. Q4 is the period from September through November.
(2)	Computed by averaging month-end values within each period.
(3)	Leverage consists of outstanding borrowings under the revolving credit facility.
(4)	Computed by averaging daily net assets within each period.

14

Tortoise

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2022 Annual Report | November 30, 2022

Ecofin

Sustainable and Social Impact Term Fund (TEAF)

Fund description

The Ecofin Sustainable and Social Impact Term Fund (TEAF) seeks to provide a high level of total return with an emphasis on current distributions. TEAF provides investors access to a combination of public and direct investments in essential assets that are making an impact on clients and communities.

Fund performance

TEAF generated slightly positive NAV performance in fiscal year 2022. Energy infrastructure companies performed extremely well during the period, driven by an increased focus on energy security and constructive commodity markets. Listed sustainable infrastructure companies faced some headwinds as inflationary pressures, and regulatory responses to them, created uncertainty for renewable developers and regulated utilities. Private sustainable infrastructure investments faced some of the same headwinds that listed sustainable infrastructure companies did, but overall withstood these headwinds well given the market conditions. Social impact investments performed strongly as industry fundamentals continued a strong recovery from covid-related headwinds.

Looking ahead to 2023, we continue to have a constructive outlook for the underlying assets in the TEAF portfolio. We expect that listed sustainable equities, TEAF’s largest allocation, will have to continue navigating a difficult environment, primarily driven by the inflation and its impact across stakeholders. Notwithstanding the inflationary backdrop, there remains a global focus on decarbonizing power generation and industrial activity that should provide significant opportunities for these companies and drive strong risk-adjusted equity returns in the sector. Energy infrastructure equities are well positioned moving into 2023 as a global focus on energy security has forced large, developed economies to refocus on their domestic energy supply. While renewed focus on energy security has made investors marginally more comfortable with new capital projects, we continue to expect return of capital to investors to drive equity returns. Finally, TEAF’s social impact assets have performed very well post-pandemic and we expect that performance to continue as new investment opportunities accelerate. We continue to progress on transitioning the portfolio to the targeted allocation of 60% direct investments. As of November 30, 2022, TEAF’s total direct investment commitments were approximately $113 million or approximately 45% of the portfolio. On a dollar basis, this is down slightly since fiscal year end 2021 due to liquidations of private energy investments. Private social and sustainable investments are up slightly for the year.

Listed energy infrastructure

●	Listed energy infrastructure equities were the strongest driver of performance in the TEAF portfolio in fiscal year 2022, for the second year in a row.
●	Strong equity performance during the period was driven by a renewed appreciation for energy security and the need for energy infrastructure investment over time, along with continued strength in commodity prices for much of the year.
●	Energy security is a particular focus in European natural gas markets as the war between Russian and Ukraine highlighted the continent’s reliance on Russian natural gas to meet energy needs, leading to extreme natural gas prices that have spread across the world as countries compete for waterborne LNG.
●	Disciplined spending on capital expenditures, increased volume, and constructive commodity pricing continue to build confidence in the stability of energy infrastructure company earnings, and we expect this environment to continue to be supportive of valuation into 2023.

Listed sustainable infrastructure

●	The year was volatile due to mixed developments at the macro and sector levels. At a high level, inflation, sharply rising interest rates, political uncertainty in several countries, China COVID policies, decelerating economic growth, and no end in sight to the war in Ukraine were powerful headwinds. Equity markets followed suit responding accordingly, ending the year down over 11%. (MSCI ACWI, USD).
●	At the sector level, uncertainties surrounding incentives legislation in the US, windfall taxes in Europe, security of energy supply, high energy prices, availability of equipment and components, and high logistics costs, all created volatility throughout the year. Around the close of the period, we finally gained much more clarity on power prices and windfall taxes in Europe with a better outcome than feared for the majority of countries.
●	Within that macro context, cyclical and tech sectors underperformed the market. However, despite these difficult circumstances, the renewables sector demonstrated its secular growth resilience outperforming the broader market. US utilities outperformed their European counterparts, while the utilities sector as a whole beat the broader market.

(unaudited)
Tortoise	15

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Ecofin

Sustainable and Social Impact Term Fund (TEAF) (continued)

●	In such context, TEAF’s sustainable infrastructure sleeve struggled relatively. Towards the end of the period however, the sleeve’s generally strong third quarter earnings, combined with clarity on energy policy frameworks in Europe, encouraged sentiment.
●	On the policy front, the period saw the passage of the U.S.’s significant new climate legislation, the Inflation Reduction Act (IRA). The IRA is a positive game changer for the entire energy transition and renewables value chain as it gives 10-year visibility to the sector and expands tax incentives to storage, nuclear, green hydrogen, with substantial value creation opportunities for renewables companies.
●	Power prices continued to rise and especially significantly in Europe where governments prepared for a cut-off of Russian gas supplies and a rationing of gas. These higher power prices lifted cash flows for companies with open positions or rolling hedges. Developers are also reporting setting higher long-term power prices as buyers want predictability on top of the fact that renewables are much cheaper than thermal power.
●	The war in Ukraine and its far-reaching consequences continue to present major risks for economies and markets. Interest rates have been rising to combat sharply higher inflation – the same inflation which should benefit companies in the portfolio through direct adjustments in regulatory remuneration rates and/or higher energy commodity prices. This era of higher rates is not being ushered in without severe disruption to market valuations.
●	The current environment also marks a significant turning point in energy priorities and policies and a deepening commitment to the energy transition by countries and companies. Beyond near-term macro risks, there should be exceptional, above market average growth opportunities in the energy transition and renewables sphere which has been given a major boost from the U.S. Inflation Reduction Act (IRA) and a heightened sense of urgency as the Ukraine crisis redoubles efforts towards energy security, reduced overall gas consumption, and decarbonisation.
●	Looking ahead, the clarity received on European government intervention will ultimately provide higher forward-looking visibility and stability to the energy transition and renewables space.
●	Finally, the transportation infrastructure (toll road and air) traffic and earnings recovery post-COVID has been stronger than many expected, and deal activity is expected to continue while listed valuations are at deep discounts to transactions in private markets.
●	In summary, we are positive about the underlying drivers for the listed sustainable infrastructure space moving into 2023.

Social impact

●	TEAF completed six direct investments in the social impact portfolio during the period.
●	In March 2022 and June 2022, TEAF completed debt investments in Vonore Fiber Products, LLC, a sustainable packaging project located in Vonore, Tennessee. The facility, which was previously used as a biofuels demonstration site, will be repurposed to produce biodegradable paper and molded fiber packaging products from locally-sourced, high yield conservation crops and agricultural biomass.
●	In May 2022, TEAF closed a debt investment in JW Living. JW Living is constructing a new 130-unit senior living community called Arbor Village at Smithville (“Arbor Village”) in Galloway, NJ, a tertiary community outside of Atlantic City, to meet the underserved need for senior care in the area. The project is being developed by JW Living and will be managed by Windsor Healthcare, both of which have significant experience with skilled nursing and senior housing in the area. When complete, the facility will consist of 130 Assisted Living and Memory Care units. In combination with the Borrower’s equity and senior debt, the investment will be used to fund construction and ramp up of operations. While the investment is structured to include security in all of the assets of the project, it is additionally supported by personal and corporate guarantees from principals of the developer with substantial net worth and liquidity.

(unaudited)
16	Tortoise

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2022 Annual Report | November 30, 2022

Ecofin

Sustainable and Social Impact Term Fund (TEAF) (continued)

●	In July 2022, TEAF closed a debt investment in Phoenix Modern. New Learning Ventures dba Phoenix Modern is a charter school located in Phoenix, Arizona that currently educates K-8 students. In operation since the 2020 school year, Phoenix Modern is on a mission to reimagine learning so that children can flourish in a modern world. The instructional approach moves away from the model of single age classrooms, standardized curriculum, and fixed grading to an entrepreneurial, hands-on, technology-driven educational environment — while still meeting all student testing requirements. The school is located near downtown Phoenix, in an area with high concentrations of students who qualify for Free-and-Reduced Lunch programs — a group that has historically struggled to succeed in traditional school environments. Phoenix Modern’s approach is designed to elevate the performance of these students, helping to lift them out of the cycle of poverty. This senior debt investment will allow the school to acquire its existing facility, and to further expand its capacity with a build out and renovation of the third floor. This expansion will allow Phoenix Modern to grow from its current capacity of 135 students to 210.
●	In August 2022, TEAF closed a debt investment in Academir Charter School, a new start charter school located in Champions Gate, Florida near Orlando, that is looking to replicate its existing, successful programs already operating in the Miami-Dade area where they serve 3,300 students. The school was asked by the local district/authorizer to bring its programs to Osceola County to serve the fast-growing population and help alleviate school overcrowding in the area. The new school will initially serve grades K-5 with capacity for 600 students, starting in the 2023-24 school year. Academir’s program will mirror its successful STEM-based curriculum from its six existing schools, all of which have achieved an A or B Florida state letter grade since 2016. The investment will be used to provide senior secured bond financing to allow Academir to acquire the land and begin construction of a K-5 school. The land is large enough to allow for the construction of an additional building for grades 6-8 in the future, but not as part of the scope of this project. This is the first of 3 scheduled draws.
●	In September 2022, TEAF closed a debt investment in Telra Institute, a charter school located in Charlotte, North Carolina offering a unique model of an open enrollment charter school with a focus on high-performing gifted students. The school opened in Fall 2021 in temporary space serving grades K-3 and is enrolled at full capacity with a waiting list of over 400 students. The school is operated by a strong, experienced team of educators and community leaders. The school’s original plan was to move into the new facility serving grades K-5, with an eye towards expanding to serve grades K-8 in the near future. However, because enrollment has exceeded its expectations and projections, Telra was able to get approval to expand to serve the higher grades much sooner than expected. This investment is the fifth investment in the school and consists of senior secured bonds. The new funding will be used to build out the third floor, which will allow the addition of grades 6-8 much earlier than originally planned, as noted above.

Private energy infrastructure

●	We continue to have conviction behind greenfield liquefied natural gas (LNG) development projects in North America given the geopolitical landscape for natural gas and favorable pricing spread between domestic supply and the global markets. The fund made a new private investment in public equity (PIPE) investment in Nextdecade, a LNG development company currently focused on bringing its 27 million metric tonne per annum (mmtpa) Rio Grande project to FID.
●	The fund also remains invested in MPL, a 14.1 mmtpa LNG development project focused on bringing Permian sourced gas to the west coast of Mexico and alleviating the additional transportation costs and time it takes to bring LNG to Asian markets while avoiding Panama Canal congestion.

Tortoise	17

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Ecofin

Sustainable and Social Impact Term Fund (TEAF) (continued)

Private sustainable infrastructure

●	TEAF did not invest in any additional private sustainable infrastructure projects during 2022, as the fund previously reached its targeted allocation.
●	Operating assets held at TEAF continue to operate as expected with stable cash flow generation profiles driven by long-term contracts with highly-rated counterparties.
●	TEAF expects the final solar project awaiting interconnection to be fully online in 2Q 2023.

 

2022 fiscal year summary
Distributions paid per share (fiscal year 2022)			$1.0500
Monthly distributions paid per share			$0.0900
Distribution rate (as of 11/30/2022)			7.8%
Quarter-over-quarter distribution increase (decrease)			0.0%
Year-over-year distribution increase (decrease)			20.0%
Cumulative distribution to stockholders since inception in July 2009			$3.8105
Market-based total return			1.74%
NAV-based total return			2.65%
Premium (discount) to NAV (as of 11/30/2022)			(15.4)%

Performance data quoted represent past performance; past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment, when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule of Investments for portfolio weighting at the end of the fiscal quarter.

18

Tortoise

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2022 Annual Report | November 30, 2022

Ecofin

Sustainable and Social Impact Term Fund (TEAF) (continued)

Value of $10,000 vs. Ecofin Sustainable and Social Impact Term Fund – Market (unaudited)

Since inception on March 29, 2019 through November 30, 2022

 

The chart assumes an initial investment of $10,000. Performance reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Performance data quoted represents past performance and does not guarantee future results. Investment returns and principal value will fluctuate, and when sold, may be worth more or less than their original cost. Performance current to the most recent month-end may be lower or higher than the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment of capital gains and income distributions. The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Annualized Rates of Return as of November 30, 2022

		1-Year				3-Year				Since Inception(1)
Ecofin Sustainable and Social Impact Term Fund – NAV			2.65%				5.28%				1.95%
Ecofin Sustainable and Social Impact Term Fund – Market			1.74%				3.56%				-2.66%
S&P Global Infrastructure Index			8.83%				12.27%				19.81%

(1)	Inception date of the Fund was March 29, 2019.

Fund structure and distribution policy

The fund is structured to qualify as a Regulated Investment Company (RIC) allowing it to pass-through to shareholders income and capital gains earned, thus avoiding double-taxation. To qualify as a RIC, the fund must meet specific income, diversification and distribution requirements. Regarding income, at least 90 percent of the fund gross income must be from dividends, interest and capital gains. The fund must meet quarterly diversification requirements including the requirement that at least 50 percent of the assets be in cash, cash equivalents or other securities with each single issuer of other securities not greater than 5 percent of total assets. No more than 25 percent of total assets can be invested in any one issuer other than government securities or other RIC’s. The fund must also distribute at least 90 percent of its investment company income. RIC’s are also subject to excise tax rules which require RIC’s to distribute approximately 98 percent of net income and net capital gains to avoid a 4 percent excise tax.

The fund has adopted a distribution policy which is included on the inside front cover of this report. To summarize, the fund has adopted a managed distribution policy (“MDP”). Annual distribution amounts are expected to fall in the range of 6% to 8% of the average week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. Distribution amounts will be reset both up and down to provide a consistent return on trailing NAV. Under the MDP, distribution amounts will normally be reset in February and August, with no changes in distribution amounts in May and November. The fund may designate a portion of its distributions as capital gains and may also distribute additional capital gains in the last quarter of the year to meet annual excise distribution requirements. Distribution amounts are subject to change from time to time at the discretion of the Board.

Leverage

The fund’s leverage utilization decreased $0.9 million during the six months ended Q4 2022, as compared to six months ended Q2 2022. The fund utilizes all floating rate leverage that had an interest rate of 4.94% and represented 11.7% of total assets at year-end. During the period, the fund maintained compliance with its applicable coverage ratios. The interest rate on the fund’s leverage will vary in the future along with changing floating rates.

Please see the Financial Statements and Notes to Financial Statements for additional detail regarding critical accounting policies, results of operations, leverage and other important fund information.

For further information regarding the calculation of distributable cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit www.tortoiseecofin.com.

(unaudited)
Tortoise	19

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TEAF 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 the fund believes is meaningful to understanding operating performance. The Distributable Cash Flow Ratios include the functional equivalent of EBITDA for non-investment companies, and the fund believes 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 the full financial statements.

		2021								2022
		Q3(1)				Q4(1)				Q1(1)				Q2(1)				Q3(1)				Q4(1)
Selected Financial Information
Distributions paid on common stock		$	3,036			$	3,036			$	3,238			$	3,642			$	3,643			$	3,643
Distributions paid on common stock per share			0.2250				0.2250				0.2400				0.2700				0.2700				0.2700
Total assets, end of period			262,769				260,153				255,662				264,262				254,726				251,239
Average total assets during period(2)			260,599				262,969				257,415				260,960				256,749				246,494
Leverage(3)			29,700				21,600				22,900				30,400				28,800				29,500
Leverage as a percent of total assets			11.3	%			8.3	%			9.0	%			11.5	%			11.3	%			11.7	%
Operating expenses before leverage costs as a percent of total assets			1.71	%			1.72	%			2.01	%			1.25	%			1.56	%			1.85	%
Net unrealized appreciation (depreciation), end of period			16,157				12,165				11,274				8,712				993				824
Net assets, end of period			231,658				231,382				231,553				232,699				225,064				220,798
Average net assets during period(4)			229,497				235,252				230,747				233,287				225,251				214,321
Net asset value per common share			17.17				17.15				17.16				17.25				16.68				16.38
Market value per common share			14.40				14.64				15.00				14.55				14.74				13.85
Shares outstanding (000's)			13,491				13,491				13,491				13,491				13,491				13,491

(1)	Q1 represents the period from December through February. Q2 represents the period from March through May. Q3 represents the period from June through August. Q4 represents the period from September through November.
(2)	Computed by averaging month-end values within each period.
(3)	Leverage consists of outstanding borrowings under the margin loan facility.
(4)	Computed by averaging daily net assets within each period.

20	Tortoise

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2022 Annual Report | November 30, 2022

TTP Schedule of Investments

November 30, 2022

		Shares				Fair Value
Common Stock — 98.1%(1)
Crude Oil Pipelines — 27.1%(1)
Canada — 17.7%(1)
Enbridge, Inc.			187,587			$	7,745,467
Gibson Energy, Inc.			50,815				922,123
Pembina Pipeline Corp.			118,304				4,319,154
							12,986,744
United States — 9.4%(1)
Plains GP Holdings LP			523,256				6,922,677
Natural Gas/Natural Gas Liquids Pipelines — 53.8%(1)
Canada — 9.2%(1)
Keyera Corp.			73,152				1,704,333
TC Energy Corp.			113,623				5,053,951
							6,758,284
United States — 44.6%(1)
Cheniere Energy, Inc.			26,342				4,619,333
Excelerate Energy, Inc.			8,917				252,886
Kinder Morgan, Inc.			389,508				7,447,393
NextDecade Corp.(2)			89,812				487,679
ONEOK, Inc.			108,675				7,272,531
Targa Resources Corp.			47,264				3,515,969
The Williams Companies, Inc.			263,979				9,160,071
							32,755,862
Natural Gas Gathering/Processing — 8.8%(1)
United States — 8.8%(1)
Antero Midstream Corp.			101,317				1,147,922
Equitrans Midstream Corp.			307,343				2,578,608
Hess Midstream Partners LP			78,784				2,460,425
Kinetik Holdings, Inc.			8,934				304,024
							6,490,979
Renewables and Power Infrastructure — 8.4%(1)
United States — 8.4%(1)
Archaea Energy, Inc.(2)			14,797				383,834
Clearway Energy, Inc.			22,000				779,680
NextEra Energy Partners LP			29,030				2,336,625
Sempra Energy			16,121				2,679,149
							6,179,288
Total Common Stock (Cost $60,512,754)							72,093,834
Master Limited Partnerships — 28.8%(1)
Crude Oil Pipelines — 0.9%(1)
United States — 0.9%(1)
NuStar Energy LP			40,806				666,362
Natural Gas/Natural Gas Liquids Pipelines — 14.6%(1)
United States — 14.6%(1)
DCP Midstream LP			47,653				1,874,669
Energy Transfer LP			367,070				4,603,058
Enterprise Products Partners LP			172,483				4,279,303
							10,757,030
Natural Gas Gathering/Processing — 2.8%(1)
United States — 2.8%(1)
Western Midstream Partners LP			73,911				2,068,030
Other — 0.2%(1)
United States — 0.2%(1)
Westlake Chemical Partners LP			4,940				114,361
Refined Product Pipelines — 10.3%(1)
United States — 10.3%(1)
Magellan Midstream Partners LP			56,630				2,984,401
MPLX LP			134,271				4,563,871
							7,548,272
Total Master Limited Partnerships (Cost $13,616,411)							21,154,055
Short-Term Investment — 0.4%(1)
United States Investment Company — 0.4%(1)
Invesco Government & Agency Portfolio, Institutional Class, 3.727%(3) (Cost $294,645)			294,645				294,645
Total Investments — 127.3%(1) (Cost $74,423,810)							93,542,534
Liabilities in Excess of Other Assets — (0.3)%(1)							(190,945	)
Credit Facility Borrowings — (13.3)%(1)							(9,800,000	)
Senior Notes — (5.4)%(1)							(3,942,857	)
Mandatory Redeemable Preferred Stock at Liquidation Value — (8.3)%(1)							(6,100,000	)
Total Net Assets Applicable to Common Stockholders — 100.0%(1)						$	73,508,732

(1)	Calculated as a percentage of net assets applicable to common stockholders.
(2)	Non-income producing security.
(3)	Rate indicated is the current yield as of November 30, 2022

See accompanying Notes to Financial Statements.
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NDP Schedule of Investments

November 30, 2022

		Shares				Fair Value
Common Stock — 89.1%(1)
Crude Oil Pipelines — 1.5%(1)
Canada — 1.5%(1)
Enbridge, Inc.			23,865			$	985,386
Natural Gas Gathering/Processing — 0.3%(1)
United States — 0.3%(1)
Kinetik Holdings, Inc.			5,678				193,222
Natural Gas/Natural Gas Liquids Pipelines — 18.6%(1)
Canada — 1.3%(1)
TC Energy Corp.			19,745				878,258
United States — 17.3%(1)
Cheniere Energy, Inc.			37,456				6,568,284
Excelerate Energy, Inc.			6,209				176,087
Kinder Morgan, Inc.			56,165				1,073,875
NextDecade Corp.(2)			65,669				356,583
Targa Resources Corp.			28,897				2,149,648
The Williams Companies, Inc.			36,175				1,255,273
							11,579,750
Oil and Gas Production — 64.1%(1)
Canada — 2.0%(1)
Suncor Energy, Inc.			40,528				1,332,155
United States — 62.1%(1)
Chevron Corp.			19,314				3,540,449
ConocoPhillips			21,747				2,685,972
Coterra Energy, Inc.			21,071				588,092
Devon Energy Corp.			90,404				6,194,482
Diamondback Energy, Inc.			37,179				5,503,236
EOG Resources, Inc.			23,070				3,274,325
EQT Corp.			117,402				4,979,019
Exxon Mobil Corp.			30,377				3,382,175
Marathon Oil Corp.			81,694				2,502,287
Occidental Petroleum Corp.			43,302				3,009,056
PDC Energy, Inc.			9,914				736,808
Pioneer Natural Resources Co.			22,350				5,274,377
							41,670,278
Other — 3.9%(1)
United States — 3.9%(1)
Baker Hughes Co.			38,763				1,124,902
Darling Ingredients, Inc.(2)			1,957				140,571
Denbury, Inc.(2)			15,079				1,353,491
							2,618,964
Renewables and Power Infrastructure — 0.7%(1)
United States — 0.7%(1)
American Electric Power Co., Inc.			2,921				282,753
Archaea Energy, Inc.(2)			7,593				196,962
							479,715
Total Common Stock (Cost $32,027,202)							59,737,728
Master Limited Partnerships — 15.6%(1)
Crude Oil Pipelines — 3.5%(1)
United States — 3.5%(1)
Plains All American Pipeline LP			189,849			$	2,357,924
Natural Gas Gathering/Processing — 2.0%(1)
United States — 2.0%(1)
Western Midstream Partners LP			48,607				1,360,024
Natural Gas/Natural Gas Liquids Pipelines — 9.1%(1)
United States — 9.1%(1)
DCP Midstream LP			50,351				1,980,808
Energy Transfer LP			241,059				3,022,880
Enterprise Products Partners LP			43,433				1,077,573
							6,081,261
Refined Product Pipelines — 1.0%(1)
United States — 1.0%(1)
Magellan Midstream Partners LP			12,744				671,609
Total Master Limited Partnerships (Cost $7,375,146)							10,470,818
Short-Term Investment — 0.8%(1)
United States Investment Company — 0.8%(1)
Invesco Government & Agency Portfolio — Institutional Class, 3.727%(3) (Cost $556,213)			556,213				556,213
Total Investments — 105.5%(1) (Cost $39,958,561)(1)							70,764,759
Other Assets in Excess of Liabilities — 0.0%(1)							2,068
Credit Facility Borrowings — (5.5%)(1)							(3,700,000	)
Total Net Assets Applicable to Common Stockholders — 100.0%(1)						$	67,066,827

(1)	Calculated as a percentage of net assets.
(2)	Non-income producing security.
(3)	Rate indicated is the current yield as of November 30, 2022.

See accompanying Notes to Financial Statements.
22	Tortoise

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2022 Annual Report | November 30, 2022

TPZ Schedule of Investments

November 30, 2022

		Principal Amount/Shares				Fair Value
Corporate Bonds — 57.1%(1)
Crude Oil Pipelines — 6.3%(1)
Canada — 6.3%(1)
Enbridge, Inc.
5.500%, 07/15/2077		$	7,042,000			$	6,167,574
Natural Gas Gathering/Processing — 20.6%(1)
United States — 20.6%(1)
Antero Midstream Partners LP
5.750%, 03/01/2027(2)			3,800,000				3,628,931
Blue Racer Midstream LLC
6.625%, 07/15/2026(2)			5,900,000				5,737,750
EnLink Midstream LLC
5.375%, 06/01/2029			4,000,000				3,770,000
Hess Corporation
5.625%, 02/15/2026(2)			4,160,000				4,089,238
The Williams Companies, Inc.
4.550%, 06/24/2024			3,000,000				2,967,520
							20,193,439
Natural Gas/Natural Gas Liquids Pipelines — 20.1%(1)
United States — 20.1%(1)
Cheniere Corp.
7.000%, 06/30/2024			4,000,000				4,054,208
Cheniere Corp.
5.875%, 03/31/2025			2,000,000				2,008,057
DT Midstream, Inc.
4.375%, 06/15/2031(2)			2,000,000				1,720,000
NGPL Pipe Co LLC
3.250%, 07/15/2031(2)			1,500,000				1,222,426
ONEOK, Inc.
7.500%, 09/01/2023			2,000,000				2,021,356
ONEOK, Inc.
6.350%, 01/15/2031			3,000,000				3,076,950
Rockies Express Pipeline LLC
4.950%, 07/15/2029(2)			3,000,000				2,697,639
Tallgrass Energy LP
5.500%, 01/15/2028(2)			3,250,000				2,949,375
							19,750,011
Other — 4.9%(1)
United States — 4.9%(1)
New Fortress Energy, Inc.
6.500%, 09/30/2026(2)			5,000,000				4,832,275
Refined Product Pipelines — 1.5%(1)
United States — 1.5%(1)
Buckeye Partners LP
5.850%, 11/15/2043			2,000,000				1,512,050
Renewables and Power Infrastructure — 3.7%(1)
United States — 3.7%(1)
NextEra Energy, Inc.
4.800%, 12/01/2077			4,500,000				3,601,404
Total Corporate Bonds (Cost $60,197,220)							56,056,753
Common Stock — 37.7%(1)
Crude Oil Pipelines — 2.3%(1)
Canada — 2.3%(1)
Enbridge, Inc.			53,741				2,218,966
Natural Gas/Natural Gas Liquids Pipelines — 2.2%(1)
Canada — 2.2%(1)
TC Energy Corp.			48,667				2,164,708
Crude Oil Pipelines — 5.2%(1)
United States — 5.2%(1)
Plains GP Holdings LP			389,094				5,147,714
Natural Gas Gathering/Processing — 4.7%(1)
United States — 4.7%(1)
EnLink Midstream LLC			90,965				1,169,810
Equitrans Midstream Corp.			108,596				911,120
Hess Midstream Partners LP			66,901				2,089,318
Kinetik Holdings, Inc.			11,954				406,795
							4,577,043
Natural Gas/Natural Gas Liquids Pipelines — 18.6%(1)
United States — 18.6%(1)
DT Midstream, Inc.			24,885				1,501,312
Excelerate Energy, Inc.			11,787				334,279
Kinder Morgan, Inc.			190,405				3,640,544
NextDecade Corp.(3)			119,845				650,758
ONEOK, Inc.			35,082				2,347,687
Targa Resources Corp.			69,258				5,152,103
The Williams Companies, Inc.			135,347				4,696,541
							18,323,224
Renewables and Power Infrastructure — 4.7%(1)
United States — 4.7%(1)
Archaea Energy, Inc.(3)			26,704				692,702
Atlantica Sustainable Infrastructure Plc			16,523				460,992
NextEra Energy Partners LP			8,013				644,966
Sempra Energy			16,927				2,813,098
							4,611,758
Total Common Stock (Cost $29,290,108)							37,043,413

See accompanying Notes to Financial Statements.
Tortoise	23

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TPZ Schedule of Investments (continued)

November 30, 2022

		Principal Amount/Shares				Fair Value
Master Limited Partnerships — 30.6%(1)
Crude Oil Pipelines — 2.1%(1)
United States — 2.1%(1)
NuStar Energy LP			90,687			$	1,480,919
PBF Logistics LP			30,650				609,935
							2,090,854
Natural Gas Gathering/Processing — 3.9%(1)
United States — 3.9%(1)
Western Midstream Partners LP			135,715				3,797,306
Natural Gas/Natural Gas Liquids Pipelines — 13.3%(1)
United States — 13.3%(1)
DCP Midstream LP			73,982				2,910,452
Energy Transfer LP			407,632				5,111,705
Enterprise Products Partners LP			202,757				5,030,401
							13,052,558
Refined Product Pipelines — 11.3%(1)
United States — 11.3%(1)
Holly Energy Partners LP			30,993				580,189
Magellan Midstream Partners LP			73,459				3,871,289
MPLX LP			195,684				6,651,299
							11,102,777
Total Master Limited Partnerships (Cost $20,782,196)							30,043,495
Short-Term Investment — 0.3%(1)
United States Investment Company — 0.3%(1)
Invesco Government & Agency Portfolio — Institutional Class, 3.727%(4) (Cost $306,099)			306,099				306,099
Total Investments — 125.7% (Cost $110,575,623)(1)							123,449,760
Other Assets in Excess of Liabilities — 0.7%(1)							695,050
Credit Facility Borrowings — (26.4)%(1)							(25,900,000	)
Total Net Assets Applicable to Common Stockholders — 100.0%(1)						$	98,244,810

(1)	Calculated as a percentage of net assets.
(2)	Restricted securities have a total fair value of $26,877,634, which represents 27.4% of total net assets.
(3)	Non-income producing security.
(4)	Rate indicated is the current yield as of November 30, 2022.

See accompanying Notes to Financial Statements.
24	Tortoise

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2022 Annual Report | November 30, 2022

TEAF Consolidated Schedule of Investments

November 30, 2022

		Principal Amount/Shares				Fair Value
Common Stock — 51.8%(1)
Natural Gas/Natural Gas Liquids Pipelines — 10.9%(1)
Australia — 1.5%(1)
APA Group(2)			442,606			$	3,361,679
United States — 9.4%(1)
Cheniere Energy, Inc.(2)			30,700				5,383,552
Excelerate Energy, Inc.			13,710				388,815
NextDecade Corp.(3)			234,507				1,273,373
ONEOK, Inc.			15,140				1,013,169
Targa Resources Corp.(2)			92,500				6,881,075
The Williams Companies, Inc.(2)			167,924				5,826,963
							20,766,947
Natural Gas Gathering/Processing — 0.5%(1)
United States — 0.5%(1)
Hess Midstream Partners LP			38,675				1,207,820
Other — 3.6%(1)
Australila — 2.1%(1)
Atlas Arteria Ltd.(2)			992,726				4,736,893
Spain — 1.5%(1)
Ferrovial SA(2)			121,999				3,249,989
Power — 22.4%(1)
Canada — 0.6%(1)
Algonquin Power & Utilities Corp.(2)			166,889				1,260,523
Germany — 1.4%(1)
RWE AG			68,204				2,980,882
Italy — 5.5%(1)
ENAV SpA(2)			544,452				2,397,678
Enel SpA			1,109,060				5,925,112
Terna SpA(2)			503,846				3,832,665
							12,155,455
Portugal — 2.6%(1)
EDP — Energias de Portugal SA(2)			1,209,999				5,690,011
Spain — 3.9%(1)
Endesa SA			244,955				4,511,752
Iberdrola SA(2)			371,053				4,162,367
							8,674,119
United Kingdom — 5.1%(1)
National Grid Plc			335,962				4,107,912
SSE Plc(2)			343,459				7,072,432
							11,180,344
United States — 3.3%(1)
American Electric Power Co, Inc.(2)			53,287				5,158,181
Atlantica Sustainable Infrastructure Plc			75,263				2,099,838
							7,258,019
Renewables — 7.3%(1)
Canada — 3.5%(1)
Innergex Renewable Energy, Inc.(2)			294,405				3,685,671
TransAlta Renewables, Inc.(2)			381,927				4,057,344
							7,743,015
France — 1.1%(1)
Transition SA(3)			250,000				2,523,466
United States — 2.7%(1)
NextEra Energy, Inc.			45,491				3,853,088
NextEra Energy Partners LP			26,688				2,148,117
							6,001,205
Transportation/Storage — 1.4%(1)
Hong Kong — 1.4%(1)
China Suntien Green Energy Corp Ltd.			7,408,484				3,063,571
Renewable Infrastructure — 1.4%(1)
United Kingdom — 1.4%(1)
Greencoat UK Wind Plc			1,711,483				3,090,034
United States — 0.0%(1)
Archaea Energy, Inc.(3)			27				700
Solar — 0.9%(1)
United States — 0.9%(1)
Sunnova Energy International, Inc.(2)(3)			82,766				1,889,548
Utilities — 3.3%(1)
United States — 3.3%(1)
Ameren Corp.			20,040				1,789,973
Essential Utilities, Inc.(2)			58,349				2,814,756
Public Service Enterprise Group, Inc.			43,420				2,629,081
							7,233,810
Total Common Stock (Cost $117,286,808)							114,068,030
Private Investments — 20.4%(1)
Natural Gas/Natural Gas Liquids Pipelines — 1.0%(1)
Mexico Pacific Limited LLC(MLP) Series A(4)(5)			99,451				2,182,353
Renewables — 19.4%(1)
United States — 19.4%(1)
Renewable Holdco, LLC(4)(5)(6)			N/A				6,528,311
Renewable Holdco I, LLC(4)(5)(6)			N/A				23,777,381
Renewable Holdco II, LLC(4)(5)(6)			N/A				12,788,518
							43,094,210
Total Private Investments (Cost $43,549,238)							45,276,563

See accompanying Notes to Financial Statements.
Tortoise	25

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TEAF Consolidated Schedule of Investments (continued)

November 30, 2022

		Principal Amount/Shares				Fair Value
Corporate Bonds — 17.4%%(1)
Healthcare — 1.6%(1)
United States — 1.6%(1)
315/333 West Dawson Associates SUB 144A NT,
11.000%, 01/31/2026(5)		$	3,770,000			$	3,549,549
Project Finance — 8.3%(1)
United States — 8.3%(1)
C2NC Holdings
13.000%, 05/01/2027			10,715,000				10,442,539
Dynamic BC Holdings LLC
13.500%, 04/01/2028(5)			8,110,000				7,842,727
							18,285,266
Senior Living — 7.5%(1)
United States — 7.5%(1)
Contour Propco 1735 S MISSION SUB 144A NT,
11.000%, 10/01/2025(5)			5,715,000				5,588,036
Dove Mountain Residences LLC
11.000%, 02/01/2026(5)			1,050,000				1,025,360
Dove Mountain Residences LLC
16.000%, 02/01/2026(5)			886,272				866,499
Drumlin Reserve Property LLC
10.000%, 10/02/2025(5)			1,705,311				1,674,220
Drumlin Reserve Property LLC
16.000%, 10/02/2025(5)			1,412,880				1,389,642
JW Living Smithville Urban Ren Sub Global 144A 27
11.750%, 06/01/2027(5)			3,890,000				3,861,303
Realco Perry Hall MD LLC/OPCO Sub 144A NT
10.000%, 10/01/2024(5)			2,227,000				2,064,024
							16,469,084
Total Corporate Bonds (Cost $39,351,758)							38,303,899
Master Limited Partnerships — 10.9%(1)
Natural Gas Gathering/Processing — 0.5%(1)
United States — 0.5%(1)
Western Midstream Partners, LP(2)			39,385				1,101,992
Natural Gas/Natural Gas Liquids Pipelines — 5.5%(1)
United States — 5.5%(1)
DCP Midstream, LP			93,735				3,687,535
Energy Transfer LP(2)			424,800				5,326,992
Enterprise Products Partners LP(2)			128,400				3,185,604
							12,200,131
Refined Product Pipelines — 3.2%(1)
United States — 3.2%(1)
MPLX LP(2)			206,200				7,008,738
Renewables — 1.7%(1)
United States — 1.7%(1)
Enviva Partners LP(2)(3)			66,900				3,796,575
Total Master Limited Partnerships (Cost $19,274,086)							24,107,436
Preferred Stock — 2.1%(1)
Natural Gas/Natural Gas Liquids Pipelines — 2.1%(1)
United States — 2.1%(1)
Enterprise Products Partners LP, 7.250%(4)(5) (Cost $6,034,639)			5,000				4,582,050

See accompanying Notes to Financial Statements.
26	Tortoise

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2022 Annual Report | November 30, 2022

TEAF Consolidated Schedule of Investments (continued)

November 30, 2022

		Principal Amount/Shares				Fair Value
Municipal Bonds — 4.7%(1)
Arizona — 0.1%(1)
Maricopa County Industrial Development Authority
11.000%, 07/01/2033		$	138,000			$	130,242
Florida — 0.3%(1)
Florida Development Finance Corp.
5.720%, 07/01/2025(7)			445,000				422,750
Florida Development Finance Corp.
11.000%, 08/01/2032			320,000				309,060
							731,810
Wisconsin — 4.3%(1)
Public Finance Authority
7.500%, 06/01/2029			8,925,000				8,819,358
Public Finance Authority
12.000%, 10/01/2029			185,000				179,296
Public Finance Authority
10.000%, 09/01/2031			525,000				458,288
Public Finance Authority
10.000%, 09/01/2031			145,000				133,886
							9,590,828
Total Municipal Bonds (Cost $10,645,897)							10,452,880
Construction Notes — 5.1%(1)
Renewables — 1.7%(1)
Bermuda — 1.7%(1)
Saturn Solar Bermuda 1 Ltd.(4)(5)
8.000%, 06/30/2023			3,510,000				3,656,718
Water Equipment & Services — 3.4%(1)
United States — 3.4%(1)
EF WWW Holdings, LLC(4)(5)
10.500%, 09/30/2026			7,268,888				7,486,954
Total Construction Notes (Cost $11,047,792)							11,143,672
Bank Loan — 0.2%(1)
Education — 0.2%(1)
United States — 0.2%(1)
Village Charter School, Inc. 10.000%, 03/31/2023(7)
(Cost $800,000)			800,000				522,880
Special Purpose Acquisition Company Warrant — 0.0%(1)
Renewables — 0.0%(1)
France — 0.0%(1)
Transition SA Warrant (Cost $–)			250,000				110,304
Short-Term Investment — 0.2%(1)
United States Investment Company — 0.2%(1)
First American Government Obligations Fund, Class X, 3.664%(8) (Cost $410,139)			410,139				410,139
Total Investments — 112.7%(1) (Cost $248,400,357)(1)							248,977,853
Other Assets in Excess of Liabilities — 0.6%(1)							1,320,102
Credit Facility Borrowings — (13.3)%(1)							(29,500,000	)
Total Net Assets Applicable to Common Stockholders — 100.0%(1)						$	220,797,955

(1)	Calculated as a percentage of net assets applicable to common stockholders.
(2)	All or a portion of the security is segregated as collateral for the margin borrowing facility.
(3)	Non-income producing security.
(4)	Securities have been valued by using significant unobservable inputs in accordance with fair value procedures and are categorized as level 3 investments.
(5)	Restricted securities have a total fair value of $88,863,645 which represents 40.3% of net assets. See Note 6 to financial statements for further disclosure.
(6)	Deemed to be an affiliate of the fund. See Note 7 to financial statements for further disclosure.
(7)	Security in forebearance at November 30, 2022.
(8)	Rate indicated is the current yield as of November 30, 2022.

See accompanying Notes to Financial Statements.
Tortoise	27

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Statements of Assets & Liabilities

November 30, 2022

			Tortoise Pipeline  & Energy Fund, Inc.
Assets
Investments in unaffiliated securities at fair value(2)			$	93,542,534
Investments in affiliated securities at fair value(3)				—
Cash at broker				—
Cash				—
Dividends, distributions and interest receivable from investments				135,254
Expense reimbursement receivable				121,379
Prepaid expenses and other assets				107,579
Total assets				93,906,746
Liabilities
Payable to Adviser				167,756
Accrued expenses and other liabilities				410,550
Deferred tax liability				—
Credit facility borrowings				9,800,000
Senior notes, net(4)				3,931,758
Mandatory redeemable preferred stock, net(5)				6,087,950
Total liabilities				20,398,014
Net assets applicable to common stockholders			$	73,508,732
Net Assets Applicable to Common Stockholders Consist of:
Capital stock, $0.001 par value per share			$	2,116
Additional paid-in capital				172,320,244
Total accumulated losses				(98,813,628	)
Net assets applicable to common stockholders			$	73,508,732
Capital shares:
Authorized				100,000,000
Outstanding				2,116,385
Net Asset Value per common share outstanding (net assets applicable to common stock, divided by common shares outstanding)			$	34.73
(1)	Consolidated Statement of Assets and Liabilities (See Note 13 to the financial statements for further disclosure).
(2)	Investments in unaffiliated securities at cost		$	74,423,810
(3)	Investments in affiliated securities at cost		$	—
(4)	Deferred debt issuance and offering costs		$	11,099
(5)	Deferred offering costs		$	12,050

See accompanying Notes to Financial Statements.

28

Tortoise

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2022 Annual Report | November 30, 2022

Tortoise Energy Independence Fund, Inc.				Tortoise Power and Energy Infrastructure Fund, Inc.				Ecofin Sustainable and Social Impact Term Fund(1)
$	70,764,759			$	123,449,760			$	205,883,643
	—				—				43,094,210
	—				—				103,816
	—				—				40,208
	235,797				1,261,881				2,112,171
	50,943				—				—
	7,664				3,690				5,405
	71,059,163				124,715,331				251,239,453
	134,452				196,169				543,426
	157,884				374,352				346,766
	—				—				51,306
	3,700,000				25,900,000				29,500,000
	—				—				—
	—				—				—
	3,992,336				26,470,521				30,441,498
$	67,066,827			$	98,244,810			$	220,797,955
$	1,754			$	6,200			$	13,491
	215,496,968				107,595,166				242,680,341
	(148,431,895	)			(9,356,556	)			(21,895,877	)
$	67,066,827			$	98,244,810			$	220,797,955
	100,000,000				100,000,000				100,000,000
	1,753,698				6,200,175				13,491,127
$	38.24			$	15.85			$	16.37
$	39,958,561			$	110,575,623			$	206,879,320
$	—			$	—			$	41,521,037
$	—			$	—			$	—
$	—			$	—			$	—

See accompanying Notes to Financial Statements.

Tortoise

29

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Statements of Operations

For the year ended November 30, 2022

		Tortoise Pipeline & Energy Fund, Inc.
Investment Income
Distributions from master limited partnerships		$	1,778,345
Dividends and distributions from common stock			3,818,709
Dividends and distributions from preferred stock			17,591
Dividends and distributions from affiliated investments			—
Less return of capital on distributions(2)			(3,159,480	)
Less foreign taxes withheld			(186,339	)
Net dividends and distributions from investments			2,268,826
Interest income			5,212
Total Investment Income			2,274,038
Operating Expenses
Advisory fees			1,015,327
Administrator fees			49,682
Professional fees			178,959
Directors fees			77,145
Stockholder communication expenses			21,532
Custodian fees and expenses			14,735
Fund accounting fees			27,973
Registration fees			27,276
Stock transfer agent fees			8,449
Other operating expenses			27,829
Total Operating Expenses			1,448,907
Leverage Expenses
Interest expense			445,214
Distributions to mandatory redeemable preferred stockholders			400,770
Amortization of debt issuance costs			11,374
Other leverage expenses			358
Total Leverage Expenses			857,716
Total Expenses			2,306,623
Less expense reimbursement by Adviser (Note 4)			(203,158	)
Net Expenses			2,103,465
Net Investment Income (Loss), before Income Taxes			170,573
Deferred tax benefit (expense)			—
Net Investment Income (Loss)			170,573
Realized and Unrealized Gain (Loss) on Investments and Foreign Currency
Net realized gain (loss) on investments in unaffiliated securities			1,799,732
Net realized gain on written options			—
Net realized gain (loss) on foreign currency and translation of other assets and liabilities denominated in foreign currency			(6,777	)
Net realized gain			1,792,955
Net change in unrealized appreciation (depreciation) of investments in unaffiliated securities			18,113,560
Net change in unrealized appreciation (depreciation) of investments in affiliated securities			—
Net change in unrealized appreciation (depreciation) of written options			—
Net change in unrealized appreciation (depreciation) of other assets and liabilities due to foreign currency translation			235
Net unrealized appreciation (depreciation)			18,113,795
Net Realized and Unrealized Gain (Loss)			19,906,750
Net Increase in Net Assets Applicable to Common Stockholders Resulting from Operations		$	20,077,323

(1)	Consolidated Statement of Operations (See Note 13 to the financial statements for further disclosure).
(2)	Return of Capital may be in excess of current year distributions due to prior year adjustments. See Note 2 to the financial statements for further disclosure.

See accompanying Notes to Financial Statements.

30

Tortoise

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2022 Annual Report | November 30, 2022

Tortoise Energy Independence Fund, Inc.				Tortoise Power and Energy Infrastructure Fund, Inc.				Ecofin Sustainable and Social Impact Term Fund(1)
$	702,103			$	2,527,201			$	1,661,071
	2,599,584				1,797,506				5,003,277
	—				15,342				498,863
	—				—				1,400,000
	(816,650	)			(3,382,254	)			(4,599,443	)
	(26,455	)			(41,575	)			(398,992	)
	2,458,582				916,220				3,564,776
	5,130				3,264,847				7,281,597
	2,463,712				4,181,067				10,846,373
	716,600				1,202,519				3,414,146
	42,855				63,654				116,448
	97,902				201,167				250,830
	77,204				124,709				125,209
	21,672				36,624				25,038
	4,649				12,838				78,948
	24,507				28,792				32,283
	26,664				51,498				32,717
	11,827				18,538				7,187
	31,642				27,770				198,637
	1,055,522				1,768,109				4,281,443
	114,228				859,523				700,394
	—				—				—
	—				—				—
	—				—				—
	114,228				859,523				700,394
	1,169,750				2,627,632				4,981,837
	(176,058	)			—				—
	993,692				2,627,632				4,981,837
	1,470,020				1,553,435				5,864,536
	—				—				57,377
	1,470,020				1,553,435				5,921,913
	5,082,703				283,232				9,011,707
	—				—				175,685
	(985	)			(1,173	)			(187,075	)
	5,081,718				282,059				9,000,317
	21,478,671				10,522,220				(12,563,646	)
	—				—