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TEAF Ecofin Sustainable and Social Impact Term Fund

Filed: 6 Aug 21, 3:39pm

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

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number 811-23248

 

Tortoise Essential Assets Income Term Fund
(Exact name of registrant as specified in charter)

 

6363 College Boulevard, Suite 100A, Overland Park, KS 66211
(Address of principal executive offices) (Zip code)

 

P. Bradley Adams
Diane Bono
6363 College Boulevard, Suite 100A, Overland Park, KS 66211
(Name and address of agent for service)

 

913-981-1020
Registrant's telephone number, including area code

Date of fiscal year end: November 30

Date of reporting period: May 31, 2021


Item 1. Report to Stockholders.

(a) The Report to Shareholders is attached herewith.




Semi-Annual Report | May 31, 2021




2021 Semi-Annual Report
Closed-End Funds




 
 
 
 
Tortoise
2021 Semi-Annual Report to Stockholders
 

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


 
Table of contents
 
Closed-end Fund Comparison1TPZ:Fund Focus18
Letter to Stockholders2TEAF:Fund Focus21
TYG: Fund Focus6Financial Statements25
NTG:Fund Focus9Notes to Financial Statements66
TTP:Fund Focus12Additional Information84
NDP:Fund Focus15




 
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 distribution policy (the “Policy”) with the purpose of distributing over the course of each year, through periodic distributions as nearly equal as practicable and any required special distributions, an amount closely approximating the total taxable income of TTP and TPZ during such year and, if so determined by the Board, all or a portion of the return of capital paid by portfolio companies to TTP and TPZ during such year. In accordance with its Policy, TTP distributes a fixed amount per common share, currently $0.16, each quarter to its common shareholders. TPZ distributes a fixed amount per common share, currently $0.05, each month to its common shareholders. 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 the remainder of 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.

Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 

Closed-end Fund Comparison

Name/Ticker   Primary
focus
   Structure   Total assets
($ millions)
1
   Portfolio mix
by asset type1
   Portfolio mix
by structure1

Tortoise Energy
Infrastructure Corp.

NYSE: TYG Inception: 2/2004

Midstream MLPsC-corp$581.5

Tortoise Midstream
Energy Fund, Inc.

NYSE: NTG
Inception: 7/2010
Natural gas infrastructure MLPsC-corp$287.7

Tortoise Pipeline
& Energy Fund, Inc.

NYSE: TTP
Inception: 10/2011

North American pipeline companies

Regulated investment company

$88.1

Tortoise Energy
Independence
Fund, Inc.

NYSE: NDP
Inception: 7/2012
North American oil & gas producers

Regulated investment company

$46.9

Tortoise Power
and Energy Infrastructure
Fund, Inc.

NYSE: TPZ
Inception: 7/2009

Power & energy infrastructure companies (Fixed income & equity)

Regulated investment company

$129.2

Tortoise Essential
Assets Income
Term Fund

NYSE: TEAF Inception:
3/2019

Essential assets

Regulated investment company

$259.3

1

As of 5/31/2021


(unaudited)
 
Tortoise1



 
 
 
 
Tortoise
2021 Semi-Annual Report to closed-end fund stockholders
 

Dear stockholder

The first half of the 2021 fiscal year started off strong. As many parts of the world are reopening, travel is picking up and with it energy demand. This translated into a significant recovery for energy infrastructure companies. The new administration and continued focus on ESG initiatives is driving positive fundamental momentum for renewable energy companies, despite a pullback in the first half of the fiscal year. Things have been returning to pre-COVID normal for schools with most expecting in-person learning in the fall and senior living facilities appear to be rebounding from the low of the pandemic. We think there will be compelling opportunities across all of these essential assets for investors as the year unfolds.

Energy and power infrastructure

The broader energy sector, as represented by the S&P Energy Select Sector® Index, finished the semiannual period ending May 31, 2021 in significant positive territory, returning 45.48%. Energy markets and commodity prices experienced a significant turnaround propelled by the vaccine-driven rally since last November. As positive cases decline and mobility increases, global oil demand could exceed pre-pandemic levels over the next 12 months, a far-fetched thought one year ago.

There continues to be encouraging news around mobility and the economic reopening. According to Morgan Stanley, the mobility data in Israel, which is leading the world in vaccinations on a percentage basis, suggests demand for gasoline and diesel was up to 107% of its 2019 level. In the U.S., total refined product demand surged higher than the corresponding week in 2019. While a slower recovery should be expected in jet fuel, more Americans are traveling, with American Airlines announcing that April ticket sales hit 90% of pre-pandemic levels.

The Organization of Petroleum Exporting Countries (OPEC) and their Non-OPEC partners (OPEC+) continued deep production cuts with a clear goal of balancing the global crude oil market. Overall adherence to the production cut agreement remained strong in the first half of 2021 leading to inventory draws. The global crude oil market remains in deficit, supported by the OPEC+ crude oil production cut agreement, and inventory draws are expected to continue throughout 2021 driven by increased demand as the world economy re-opens.

U.S. crude oil production stabilized to start 2021. Through the first five months of 2021, U.S. crude oil production averaged 10.9 million barrels per day (b/d). This was a welcome change from the volatile 2020, which witnessed U.S. crude oil production fall from a record 13.1 million b/d in March 2020 to 10.3 million b/d in September 20201. For the remainder of 2021, the Energy Information Administration (EIA) forecasts that U.S. crude oil production will average 11.1 million b/d2.

The COVID-19 pandemic accelerated U.S. producer capital discipline as investors focused on higher free cash flow (FCF) generation and return of capital to shareholders. In 2021, private producers started to increase activity levels yet public exploration & production companies’ (E&Ps) capital discipline remains with a growing portion of FCF going to shareholders through fixed dividends, variable dividends, and share buybacks. This was highlighted by EOG’s $1 per share special dividend and Devon Energy’s higher-than-expected variable dividend. EOG and Devon Energy were the first of public exploration and production companies to use fixed plus variable distribution model.

The natural gas market, like the crude oil market, tightened during the first half of the 2021 fiscal year. A cold winter in Europe and Asia led to a surge in demand resulting in liquefied natural gas (LNG) exports from the U.S. rapidly increasing to offset the global demand. There were other signs of healthy and rebounding demand. According to the EIA, in May 2021, natural gas storage was below its five-year average while at the same time LNG exports were above 11 billion cubic feet per day (Bcf/d), near all-time highs. Production growth is expected to remain concentrated in the highest quality basins, the Marcellus and Haynesville, and in the Permian Basin driven by associated natural gas. On the infrastructure side, we expect further opportunities down the road, particularly for LNG incumbents. Longer term, we believe natural gas continues to be a predominant bridge fuel to reduce global CO2 emissions, along with renewables, as both take market share from coal.

Midstream energy performance was strong during the first half of the 2021 fiscal year with the Tortoise North American Pipeline IndexSM returning 31.11% and the Tortoise MLP Index® returning 42.46%. GDP estimates are rising, which should lead to increased energy demand and volumes flowing through pipelines. The market also became more focused on inflation, which historically is a positive for the energy sector and midstream stocks.

A couple of themes stood out for midstream businesses throughout the first half of the fiscal year. The 2021 first quarter earnings reporting period was one of the strongest for the group in recent memory. The two main drivers were the benefits from Texas winter storm Uri and increased revisions of 2021 estimated EBITDA driven by higher volume expectations due to the economy reopening. Midstream companies generated approximately $4 billion in additional EBITDA from the Texas winter storm Uri as they supplied the market with much needed natural gas and power as prices spiked, with Kinder Morgan and Energy Transfer being the biggest beneficiaries. 2021 EBITDA expectations were also revised higher based on increasing activity through the second half of the year. Volumes are being driven primarily by increased drilling activity from private producers with public E&Ps showing capital restraint. On the cost side, companies kept capital expenditures lower and are using the excess cash flow to reduce debt with stock buybacks as a secondary and growing consideration. Fifteen midstream companies now maintain active buyback programs and MPLX led purchases during the first quarter, buying back $155 million of stock.

As free cash flow generation continues to ramp, we expect earnings and distribution announcements will further highlight the stability of the midstream business model. Midstream FCF is expected to rise over the next several years to produce a FCF yield 10%-15% compared to S&P 500 FCF yield of 5%. Even with a tremendous run-up in valuations the midstream sector is still trading at a discount relative to its history. We believe the forthcoming FCF and share buybacks tailwinds can drive sustainable outperformance for the midstream sector.

(unaudited)
 
2Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
 
 
 

With inflation increasing during the first half of the fiscal year, many investors began to look towards midstream as an asset class with inflation protection. Pipelines typically have long-term contracts with inflation protection from regulated tariff escalators. For example, tariffs on regulated liquid pipelines often include an inflation escalator. This allows increases in-line with the change in the Producer Price Index (PPI), offering some protection from inflation. In May 2021, the PPI rose 0.8%, according to the U.S. Bureau of Labor Statistics. Even if May PPI levels were held flat through year end, the 2021 PPI would increase by 6.5%, which with the 0.78% added would amount to an annual tariff increase of over 7%.

The first half of the fiscal year also saw a presidential transition which added uncertainty to the regulatory environment. In terms of key regulatory announcements, the Biden administration made several announcements at the beginning of his presidency which resulted in more “bark than bite”. Those announcements included rejoining the Paris Climate Accord, issuing a temporary pause on leasing on federal lands and revoking the permit of the Keystone XL Pipeline.

However, it is what the administration hasn’t done in its first months into the presidency which leads to a more constructive political and regulatory environment moving forward. The Army Corps of Engineers, an arm of the executive branch, deferred to the district court judge in regard to shutting down the Dakota Access Pipeline. Ultimately, the judge allowed the pipeline to continue to operate while its environmental impact statement is completed. Further, the Biden administration continues to allow drilling on federal lands, a much-discussed issue preceding the election. Finally, in response to the Colonial Pipeline cyberattack in May, U.S. Energy Secretary Jennifer Granholm talked about not relying too long on alternate truck or rail transport and that “Pipe is the best way to go.”3

The predominant theme around Biden’s energy plan is to address climate change and create substantial job opportunities for Americans. Climate change and related opportunities for the overall economy was one of the four pillars of the convention platform, integrated into an overall vision of revitalization of America. We are keeping a close eye on policy guidelines. The tight margin in both houses of congress likely forces legislation using the reconciliation process, which we expect tilts legislation towards tax credit policy rather than more restrictive, comprehensive climate policies.

Under President Biden’s infrastructure bill, the initial plan calls for 10 pilot projects targeting currently hard-to-abate sectors such as steel, cement, and chemicals. Traditional companies are calling for regulatory support including the expansion of Section 45Q tax credit. In fact, Exxon Mobil Corporation announced the largest proposed carbon capture sequestration project at approximately $100 billion. An expansion of these tax credits could make carbon capture adoption more widespread. Provided the necessary incentives, carbon capture, utilization and storage (CCUS) could grow 10x by 2030 and become a $1.0 trillion market by 2050. We believe the administration is taking a holistic view of this energy transition with the understanding that fossil fuels remain critical to the economy for decades.

The change in sentiment continued, with energy companies shifting from resisting energy transition to participating in the energy transition to start 2021. Some European oil majors openly discussed a shifting view and path forward around renewable energy. Engine No. 1, a small hedge fund, instigated an activist campaign on how ExxonMobil was approaching energy transition and ended up with three of its board of directors nominees elected to Exxon’s board. Some midstream companies formed sustainable development groups, and formal carbon reduction targets were established. This process should enhance environmental transparency by quantifying estimated greenhouse gas emissions from wellhead to cargo delivery point.

Carbon capture and hydrogen remain among the most discussed energy technologies energy companies can utilize to partake in the energy transition. Carbon capture was in the news with Exxon proposing a series of projects along the Gulf Coast which could total over $100 billion in investments. Carbon can either be captured directly from the atmosphere or in higher concentrations directly from point sources, such as industrial exhaust. We believe existing U.S. CO2 pipeline infrastructure is critical to accommodate carbon volumes, and more infrastructure will need to be built or repurposed to transport the captured carbon. Pipeline infrastructure could also be repurposed to transport hydrogen. Hydrogen transportation, including blending 5-10% of hydrogen into the methane stream presents opportunities for existing pipeline infrastructure or creates new large-scale infrastructure opportunities. As the world demands more energy and less carbon, we encourage midstream companies to view energy transition opportunistically.

Within the downstream portion of the energy value chain, optimism towards the refining sector has been increasing as the pace of domestic demand recovery has been leading to tighter supply/demand balances relative to the 2019 baseline considering capacity closures. Permanent refinery closures have helped and continue to help balance the market from a supply and demand perspective. From a U.S. refined product standpoint, gasoline and diesel are near pre-COVID levels while a slower recovery is expected in jet fuel. As U.S. energy demand recovers in 2021, U.S. refinery utilization and throughput should return to more normalized levels.

Natural gas liquids, unlike the refining sector proved resilient despite challenges faced during the COVID-19 pandemic. Strength in LPGs (liquid petroleum gases) has been notable, where demand is driven by global population growth and improvements in living standards in Asia, notably in China and India.

Sustainable infrastructure

Renewable energy

The first half of the fiscal period was turbulent for renewable energy due to a reflation rotation and concerns about inflationary impacts on renewable project returns along with more aggressive bidding for renewable project sites by oil and gas companies. We saw meaningful equity price corrections across many of the ‘champions’ of the broader space, following a banner year in 2020.

(unaudited)
 
Tortoise3



 
 
 
 
 
 
 

Many of the headwinds impacting the first fiscal quarter continued into the second fiscal quarter, particularly the reflation trade, which delivered stark underperformance of structural growth versus value cyclicals, and the continuing underperformance of pure-play renewables stocks. An additional headwind that grew in significance during the second quarter was strength in commodity and freight pricing which threatened to squeeze renewable equipment supplier margins and renewable developer returns. Many of the pricing framework agreements for renewable equipment had already been set, as well as some power purchase agreements for renewable developers. The ability to pass through higher raw material costs is likely to be challenging.

Ongoing strength in polysilicon, steel and copper prices added to the string of uncertainties surrounding the renewable equipment and renewable developers that investors contemplated during the first half of the year. Given the fact that in many regions renewable power purchase agreements are already attractively priced relative to prevailing spot and forward electricity prices, renewable developers should have the ability to enforce pricing power and to defend new project returns by stabilising and/or increasing power purchase agreement pricing for new renewables projects.

From a macro perspective, inflationary impulses may peak around the middle of this year. Moving into the second half of 2021 and beyond, a normalization of inflation should result in less individual factor leadership (such as cyclical and value which dominated the first half) and provide a more benign backdrop for stock picking. There are policy drivers due in the second half of this year which should re-focus attention on the energy transition: the European Commission is expected to release new emissions reduction targets for various industries in July; US infrastructure stimulus is on the agenda for H2 (and should include various tax credits and incentives for renewable technologies such as wind, solar and battery storage and incentives for electric vehicles as well as building efficiency); and the COP26 climate summit in November should encourage more ambitious decarbonization targets from governments and corporates.

Waste transition

During the first half of 2021, fuel credit prices improved. In fact, Renewable Identification Number (RIN) fuel credits under the Renewable Fuel Standards (RFS) are trading near all-time highs in the 13-year history of the federal program. The pricing strength is a result of increased demand with limited supply. The D3 RINs, which are created from the production of cellosic biofuels from methane, offer a good example of price behavior. In January 2020, D3 RIN credits were trading around $0.80, but reached $3.08 in June 2021, higher by nearly four times.

With regard to recycling efforts that support waste-to-value projects, the most notable legislative effort in recent years has been the movement to pass Extended Producer Responsibility (EPR) laws. These EPR laws require manufacturers to support the recycling of products and to incorporate more recycled content into products. EPR bills passed both the Maine and Oregon legislatures, awaiting only their respective governor’s signature to become law. Similar efforts in other states such as California and New York surfaced, and at the federal level with the U.S. House of Representatives.

Social impact

Education

Demand for high-yield K-12 charter public school and private school bonds for the first half of 2021 was exceptional with 83 offerings versus 70 during the same period in 2020. More significantly, the value of those bonds issued jumped more than 42% to $2,031,014,463.4 Based on this, it is highly likely that high-yield K-12 charter school and private school bond issuance for 2021 will exceed the previous high for annual issuance of $4.19 billion.5

Another positive trend observed was a steady increase in schools reopening for in-person learning. To start the year, only 31.7% of U.S. K-12 students had the option of full-time, in-person learning with virtual-only instruction required for 53.4% of students. By the end of the school year, full-time, in-person learning was available to 69.7% of U.S. K-12 students with 2.1% restricted to virtual-only instruction.6 Barring a significant resurgence in COVID-19 infections, we believe nearly all U.S. school districts will offer full-time, in-person instruction options for the Fall 2021 school year.

February 2021 saw the release of new research by the Thomas B. Fordham Institute that offers new evidence refuting one of the most significant claims made by opponents of charter public schools. That charter schools “take money away” from students in “public” schools has become one of the most prolific and effective arguments used both to prevent the growth of new charter schools and even to push for the elimination of existing, high-performing charter schools. In their report, “Victims or Robbers? Charter Schools and District Finances,” researchers at the Fordham Institute found: “In most states, an increase in the percentage of students attending independent charter schools was associated with an increase in host districts’ local revenue per pupil, and in some states, it was also associated with an increase in state and/or federal revenue per pupil.”7 This while acknowledging the fallacy of the arguments since Charter Schools are by definition Public Schools.

Finally, new data released by the National Center on Education Statistics in June indicated that total public school enrollment in the US for 2020-2021 decreased by approximately 3%, or 1.5 million students, as compared to the 2019-2020 school year. Previously, U.S. Public School enrollment increased nearly every year since 2000, and in no year has it decreased by more than 1%.8 While no definitive data is yet available, anecdotal reports suggest the pandemic generated significant increases in the number of parents homeschooling children or placing them into private schools. We expect to see the return of public school enrollment growth for the 2021-2022 school year in conjunction with the reopening of schools for full-time, in-person instruction. Given the widely reported frustration with many school districts and large urban school districts in particular, we believe charter schools are well positioned to benefit from that enrollment growth.

Senior Living

In the second quarter of 2021, the senior living sector happily established a “bottom” in occupancy deterioration since the pandemic began and began its rebound. As evidence of the rebound, NIC’s weekly executive survey of operators across the

(unaudited)
 
4Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
 
 
 

nation through June 13, 2021 included the following highlights; (1) nine out of 10 organizations reported an increase in lead volume since the beginning of the year, (2) almost two-thirds of assisted living respondents reported the pace of move-ins has accelerated in the past 30 days and (3) 71% of assisted living organizations reported upward changes in occupancy9. While there’s clearly ground to cover, it’s revitalizing to see the sector making strides to get back to pre-pandemic levels.

Just as operations picked up, assisted living construction starts slowed. Nationally, the percentage of units under construction as a percentage of inventory sits at 5.4% at the end of the first quarter 2021. In December 2019, pre-COVID, that figure was 7.3%, down from an all-time high of 10% in late 20179. Clearly this trend suggests less supply pressure on occupancy in the months ahead. Additionally, many developer partners view this as the time to capitalize on the “first mover’s advantage” given more than 70% of last year’s projects were put on hold, driving a flurry of capital markets activity to start the year10.

In June 2021, the University of Chicago and NIC released a study which examined COVID-19’s impact on senior housing in 2020. Two main takeaways from the study were; (1) lower acuity settings saw dramatically lower rates of COVID-related deaths and (2) continuing care retirement communities (CCRC’s) had half the COVID mortality rates by comparison to non-CCRC’s. Statistically, 67% of independent living, 64% of assisted living and 61% of memory care saw no COVID-19 related deaths which is staggering given the doomsday headlines of 20209.

Statistically, through the first quarter of 2021, nationwide occupancy for independent living and assisted living decreased to 81.8% and 75.5%, respectively. Occupancy decreased for independent and assisted living, 7.9% and 9.7%, respectively since the pandemic began9. It’s worth noting, primary markets witnessed a higher rate of decline than the secondary markets we typically invest in. Moreover, many senior living communities experienced a particularly tough 2020 holiday season before vaccinations were made available to our communities. As mentioned, many of our senior living operators feel like the 2020 holidays were the lowest point operationally and the industry is poised to recover.

Clearly it will not happen overnight, but we are optimistic the senior living community is ready to rebound to pre-COVID occupancy levels in short order.

Concluding thoughts

As people continue to receive vaccinations and the economy opens due to increased mobility, we see positive momentum across the essential assets in which we invest. Increased travel is positive for energy demand that impacts the entire energy value chain. In the social impact segment, charter schools have been gearing up for in-person classes in the fall and senior living facilities have continued to normalize operations. Renewable energy stocks slowed down during the first half of the fiscal year with a few headwinds, but mostly pulling back from an extremely strong 2020. We are optimistic about essential assets and our funds for the remainder of 2021 and beyond.

 

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

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

It is not possible to invest directly in an index.

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

1.Energy Information Administration, December 2020 STEO
2.Energy Information Administration, June 2021 STEO
3.S&P Global Platts, May 2021, DDAPL cites Colonial Pipeline outage as reason to remain open
4.Electronic Municipal Market Access; https://emma.msrb.org/
5.TM3, Bloomberg, Investment Company Institute
6.Burbio; https://cai.burbio.com/school-opening-tracker/
7.Thomas B. Fordham Institute, “Victims or Robbers? Charter Schools and District Finances.” Mark Webber, February 2021.
8.The 74; Kevin Mahnken. June 29, 2021; https://www.the74million.org/article/public-school-enrollment-down-3-percent-worst-century/.
9.NIC
10.Senior Housing News

(unaudited)
 
Tortoise5



 
 
 
 
Tortoise
Energy Infrastructure Corp. (TYG)
 

Fund description

TYG seeks a high level of total return with an emphasis on current distributions paid to stockholders. TYG invests primarily in equity securities in energy infrastructure companies. The fund is positioned to benefit from growing energy demand and accelerated efforts to reduce global CO2 emissions in energy production. Energy infrastructure companies generate, transport and distribute electricity, as well as process, store, distribute and market natural gas, natural gas liquids, refined products and crude oil.

Fund performance

A couple of themes stood out for midstream businesses throughout the first half of the fiscal year. The 2021 first quarter earnings reporting period was one of the strongest for the group in recent memory. The two main drivers were the benefits from Texas winter storm Uri and increased revisions of 2021 EBITDA driven by higher volumes expectations driven by the economy reopening. The average leverage for the fund’s portfolio companies was 3.42x in second quarter of 2021. Since the fund’s inception, it has paid out more than $145 in cumulative distributions to stockholders. The fund’s market-based and NAV-based returns for the fiscal period ending May 31, 2021 were 45.8% and 40.7%, respectively (including the reinvestment of distributions). The Tortoise MLP Index® returned 45.5% during the same period.

2021 mid-fiscal year summary
Distributions paid per share     $0.3400
Distribution rate (as of 5/31/2021)5.0%
Quarter-over-quarter distribution increase (decrease)7.9%
Year-over-year distribution increase (decrease)N/A(1)
Cumulative distributions paid per share to stockholders
       since inception in February 2004$145.6450
Market-based total return45.8%
NAV-based total return40.3%
Premium (discount) to NAV (as of 5/31/2021)(20.5)%

(1)Fund distributions were suspended for Q2 2020 and reinstated in Q3 2020

Key asset performance drivers

Top five contributors     Company type
MPLX LPRefined products pipelines MLP
Williams Companies, IncNatural gas pipelines company
Energy Transfer LPNatural gas pipelines MLP
ONEOK, IncNatural gas pipelines company
Enterprise Products Partners L.P.Natural gas pipelines MLP
Bottom five contributorsCompany type
Hennessy Capital Investment Corp VSpecial purpose acquisition company
Tortoise HoldCo II, LLC – PrivatePrivate renewable investment
Sunnova Energy International Inc. – Convertible Notes 9.750% Due 4/30/2025Solar company
European Sustainable Growth Acquisition CorpSpecial purpose acquisition company
Spartan Acquisition Corp IISpecial purpose acquisition company

Unlike the fund return, index return is pre-expenses and taxes

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

(unaudited)
 
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2021 Semi-Annual Report | May 31, 2021
 
 
 
 
 

Fund structure and distribution policy

The fund is structured as a corporation and is subject to federal and state income tax on its taxable income. The fund has adopted a distribution policy in which the Board of Directors considers many factors in determining distributions to stockholders, including NAV performance and distributable cash flow (DCF). The fund’s Board of Directors reviews the distribution rate at least quarterly, and may adjust the quarterly distribution throughout the year. Although the level of distributions is independent of the funds’ performance in the short term, the fund expects such distributions to correlate with its performance over time.

Distributable cash flow and distributions

DCF is distributions received from investments less expenses. The total distributions received from investments include the amount received as cash distributions from investments, paid-in-kind distributions, and dividend and interest payments. Income also includes the premiums received from sales of covered call options, net of amounts paid to buy back out-of-the-money options. The total expenses include current or anticipated operating expenses, leverage costs and current income taxes. Current income taxes include taxes paid on net investment income, in addition to foreign taxes, if any. Taxes incurred from realized gains on the sale of investments, expected tax benefits and deferred taxes are not included in DCF.

For the six months ended May 31, 2021, income from investments decreased approximately 7.0% as compared to the six months ended November 30, 2020, primarily due to lower distributions from investments within the fund’s portfolio. Operating expenses, consisting primarily of fund advisory fees, increased approximately 17.0% during the period due primarily to higher asset-based fees. Overall leverage costs decreased approximately 2.5% as compared to the six months ended November 30, 2020 due to lower interest rates during the period. As a result of the changes in income and expenses, DCF decreased approximately 12.1% as compared to the six months ended November 30, 2020. The fund paid cumulative distributions of $0.655 per share during the six months ended May 31, 2021, an increase of approximately 9.2% from the distributions paid during the six months ended November 30, 2020. The fund has paid cumulative distributions to stockholders of $145.65 per share since its inception in February 2004.

The Key Financial Data table discloses the calculation of DCF and should be read in conjunction with this discussion. The difference between distributions received from investments in the DCF calculation and total investment income as reported in the Statement of Operations, is reconciled as follows: the Statement of Operations, in conformity with U.S. generally accepted accounting principles (GAAP), recognizes distribution income from MLPs and other investments on their ex-dates, whereas the DCF calculation may reflect distribution income on their pay dates; GAAP recognizes that a significant portion of the cash distributions received from MLPs and other investments are characterized as a return of capital and therefore excluded from investment income, whereas the DCF calculation includes the return of capital (net of any distributions deemed to be return of principal); and distributions received from investments in the DCF calculation include the value of dividends paid-in-kind (additional stock or MLP units), whereas such amounts may not be included as income for GAAP purposes and includes distributions related to direct investments when the purchase price is reduced in lieu of receiving cash distributions. Net premiums on options written (premiums received less amounts paid to buy back out-of-the-money options) with expiration dates during the fiscal quarter are included in the DCF calculation, whereas GAAP recognizes the net effect of options written as realized and unrealized gains (losses). Income for DCF purposes is reduced by amortizing the cost of certain investments that may not have a residual value after a known time period and by distributions received from investments deemed to be return of principal. The treatment of expenses in the DCF calculation also differs from what is reported in the Statement of Operations. In addition to the total operating expenses, including fee waiver, as disclosed in the Statement of Operations, the DCF calculation reflects interest expense, realized and unrealized gains (losses) on interest rate swap settlements, distributions to preferred stockholders, other recurring leverage expenses, as well as taxes paid on net investment income.

“Net Investment Income (Loss), before Income Taxes” on the Statement of Operations is adjusted as follows to reconcile to DCF for YTD and 2nd quarter 2021 (in thousands):

YTD 20212nd Qtr 2021
Net Investment Loss,        
       before Income Taxes$(3,320)      $(1,892)
Adjustments to reconcile to DCF:
       Distributions characterized as
              return of capital, net15,7468,562
       Other(420)(255)
              DCF$12,006$6,415

Leverage

The fund’s leverage utilization decreased $2.3 million during the six months ended May 31, 2021, compared to the six months ended November 30, 2020, and represented 26.2% of total assets at May 31, 2021. At quarter-end, the fund was in compliance with applicable coverage ratios, 80.3% of the leverage cost was fixed, the weighted-average maturity was 2.1 years and the weighted-average annual rate on leverage was 3.48%. These rates will vary in the future as a result of changing floating rates, utilization of the fund’s credit facility and as leverage and swaps mature or are redeemed.

Income taxes

As of May 31, 2021, the fund’s deferred tax asset was zero. The fund had capital loss carryforwards of $446.8 million for federal income tax purposes, which can be used to offset future capital gains. To the extent that the fund has taxable income, it will owe federal and state income taxes. Tax payments can be funded from investment earnings, fund assets, or borrowings.

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

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

(unaudited)

 
Tortoise7



 
 
 
 
TYG 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.

20202021
     Q2(1)     Q3(1)     Q4(1)     Q1(1)     Q2(1)
Total Income from Investments
       Distributions and dividends from investments       $10,138       $8,982       $9,181       $8,094       $9,218
       Dividends paid in kind179
       Interest earned on corporate bonds604547420250232
       Premiums on options written
              Total from investments10,9219,5299,6018,3449,450
Operating Expenses Before Leverage
       Costs and Current Taxes
       Advisory fees1,3739238201,0151,204
       Other operating expenses313294328287262
1,6861,2171,1481,3021,466
       Distributable cash flow before leverage costs and current taxes9,2358,3128,4537,0427,984
       Leverage costs(2)3,4091,5741,5251,4511,569
       Current income tax expense(3)
              Distributable Cash Flow(4)$5,826$6,738$6,928$5,591$6,415
 
Net realized gain (loss), net of income taxes,
       for the period$(572,057)$(34,087)$(9,121)$8,313$(6,942)
As a percent of average total assets(5)
       Total from investments5.58%8.02%8.95%7.06%6.78%
       Operating expenses before leverage costs and current taxes0.86%1.02%1.07%1.10%1.05%
       Distributable cash flow before leverage costs and current taxes4.72%7.00%7.88%5.96%5.73%
As a percent of average net assets(5)
       Total from investments14.35%12.31%13.97%9.81%9.57%
       Operating expenses before leverage costs and current taxes2.22%1.57%1.67%1.53%1.48%
       Leverage costs and current taxes4.48%2.03%2.22%1.71%1.59%
       Distributable cash flow7.65%8.71%10.08%6.57%6.50%
 
Selected Financial Information
Distributions paid on common stock$$3,979$3,709$3,757$4,056
Distributions paid on common stock per share(7)0.30000.30000.31500.3400
Total assets, end of period(6)508,235450,671455,839523,106581,461
Average total assets during period(6)(8)778,359472,659431,543479,525553,147
Leverage(9)129,100125,067133,427154,427152,127
Leverage as a percent of total assets25.4%27.8%29.3%29.5%26.2%
Net unrealized depreciation, end of period(526,684)(513,439)(473,357)(418,329)(353,117)
Net assets, end of period334,413294,394305,628357,783409,216
Average net assets during period(10)302,755307,880276,337345,122391,953
Net asset value per common share(7)25.0822.5224.9530.0034.31
Market value per share(7)18.7016.5019.1625.2527.26
Shares outstanding (000's)13,33413,07212,25011,92811,298

(1)

Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August. Q4 is the period from September through November.

(2)

Leverage costs include interest expense, distributions to preferred stockholders, interest rate swap expenses and other recurring leverage expenses.

(3)

Includes taxes paid on net investment income and foreign taxes, if any. Taxes related to realized gains are excluded from the calculation of Distributable Cash Flow (“DCF”).

(4)

“Net investment income (loss), before income taxes” on the Statement of Operations is adjusted as follows to reconcile to DCF: increased by the return of capital on distributions, the dividends paid in stock and increased liquidation value, the premium on dividends paid in kind, the net premiums on options written and amortization of debt issuance costs; and decreased by realized and unrealized gains (losses) on interest rate swap settlements, distributions received that are excluded for DCF purposes and amortization on certain investments.

(5)

Annualized for periods less than one year.

(6)

Includes deferred issuance and offering costs on senior notes and preferred stock.

(7)

Adjusted to reflect 1 for 4 reverse stock split effective May 1, 2020.

(8)

Computed by averaging month-end values within each period.

(9)

Leverage consists of senior notes, preferred stock and outstanding borrowings under credit facilities.

(10)

Computed by averaging daily net assets within each period.


8Tortoise


 
 
2021 Semi-Annual Report | May 31, 2021
 
Tortoise
Midstream Energy Fund, Inc. (NTG)
 
 

Fund description

NTG seeks to provide stockholders with a high level of total return with an emphasis on current distributions. NTG invests primarily in midstream energy equities that own and operate a network of pipeline and energy related logistical infrastructure assets with an emphasis on those that transport, gather, process and store natural gas and natural gas liquids (NGLs). NTG targets midstream energy equities, including MLPs benefiting from U.S. natural gas production and consumption expansion, with minimal direct commodity exposure.

Fund performance

A couple of themes stood out for midstream businesses throughout the first half of the fiscal year. The 2021 first quarter earnings reporting period was one of the strongest for the group in recent memory. The two main drivers were the benefits from Texas winter storm Uri and increased revisions of 2021 EBITDA driven by higher volumes expectations driven by the economy reopening. The average leverage for the fund’s portfolio companies was 3.33x in 2Q21. The fund’s market-based and NAV-based returns for the fiscal period ending May 31, 2021 were 51.2% and 46.4%, respectively (including the reinvestment of distributions). The Tortoise MLP Index® returned 42.5% during the same period.

2021 mid-fiscal year summary
Distributions paid per share      $0.3600
Distribution rate (as of 5/31/2021)5.0%
Quarter-over-quarter distribution increase (decrease)9.1%
Year-over-year distribution increase (decrease)N/A(1) 
Cumulative distributions paid per share to stockholders
       since inception in July 2010$158.2600
Market-based total return51.2%
NAV-based total return46.0%
Premium (discount) to NAV (as of 5/31/2021)(21.5)%

(1)Fund distributions were suspended for Q2 2020 and reinstated in Q3 2020

Key asset performance drivers

Top five contributors     Company type
MPLX LPRefined products pipelines MLP
Williams Companies, IncNatural gas pipelines company
ONEOK, IncNatural gas pipelines company
Enterprise Products Partners L.P.Natural gas pipelines MLP
Energy Transfer LPNatural gas pipelines MLP
   
Bottom five contributorsCompany type
Hennessy Capital Investment Corp VSpecial purpose acquisition company
Sunnova Energy International Inc. – Convertible Notes 9.750% Due 4/30/2025Solar company
Spartan Acquisition Corp IISpecial purpose acquisition company
Climate Change Crisis Real Impact I Acquisition CorpSpecial purpose acquisition company
Star Peak Energy TransitionSpecial purpose acquisition company

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

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

(unaudited)
 
Tortoise9



 
 
 
 
Tortoise
Midstream Energy Fund, Inc. (NTG) (continued)
 

Fund structure and distribution policy

The fund is structured as a corporation and is subject to federal and state income tax on its taxable income. The fund has adopted a distribution policy in which the Board of Directors considers many factors in determining distributions to stockholders, including NAV performance and distributable cash flow (DCF). The fund’s Board of Directors reviews the distribution rate at least quarterly, and may adjust the quarterly distribution throughout the year. Although the level of distributions is independent of the funds’ performance in the short term, the fund expects such distributions to correlate with its performance over time.

Distributable cash flow and distributions

DCF is distributions received from investments less expenses. The total distributions received from investments include the amount received as cash distributions from MLPs, paid-in-kind distributions, and dividend and interest payments. Income also includes the premiums received from sales of covered call options, net of amounts paid to buy back out-of-the-money options. The total expenses include current or anticipated operating expenses, leverage costs and current income taxes. Current income taxes include taxes paid on net investment income in addition to foreign taxes, if any. Taxes incurred from realized gains on the sale of investments, expected tax benefits and deferred taxes are not included in DCF.

For the six months ended May 31, 2021, income from investments decreased approximately 6.5% as compared to the six months ended November 30, 2020, primarily due to lower distributions from investments within the fund’s portfolio. Operating expenses, consisting primarily of fund advisory fees, increased approximately 7.9% during the period primarily due to higher asset-based fees. Leverage costs decreased approximately 29.1% as compared to the six months ended November 30, 2020 due to lower interest rates during the period. As a result of the changes in income and expenses, DCF decreased approximately 5.2% as compared to the six months ended November 30, 2020. The fund paid cumulative distributions of $0.690 per share during the six months ended May 31, 2021, an increase of approximately 11.3% from the distributions paid during the six months ended November 30, 2020. The fund has paid cumulative distributions to stockholders of $158.26 per share since its inception in July 2010.

The Key Financial Data table discloses the calculation of DCF and should be read in conjunction with this discussion. The difference between distributions received from investments in the DCF calculation and total investment income as reported in the Statement of Operations, is reconciled as follows: the Statement of Operations, in conformity with U.S. generally accepted accounting principles (GAAP), recognizes distribution income from MLPs, common stock and other investments on their ex-dates, whereas the DCF calculation may reflect distribution income on their pay dates; GAAP recognizes that a significant portion of the cash distributions received from MLPs, common stock and other investments are characterized as a return of capital and therefore excluded from investment income, whereas the DCF calculation includes the return of capital; and distributions received from investments in the DCF calculation include the value of dividends paid-in-kind (additional stock or MLP units), whereas such amounts may not be included as income for GAAP purposes, and includes distributions related to direct investments when the purchase price is reduced in lieu of receiving cash distributions. Net premiums on options written (premiums received less amounts paid to buy back out-of-the-money options) with expiration dates during the fiscal quarter are included in the DCF calculation, whereas GAAP recognizes the net effect of options written as realized and unrealized gains (losses). The treatment of expenses in the DCF calculation also differs from what is reported in the Statement of Operations. In addition to the total operating expenses, including fee waiver, as disclosed in the Statement of Operations, the DCF calculation reflects interest expense, distributions to preferred stockholders, other recurring leverage expenses, as well as taxes paid on net investment income.

“Net Investment Income (Loss), before Income Taxes” on the Statement of Operations is adjusted as follows to reconcile to DCF for YTD and 2nd quarter 2021 (in thousands):

    YTD 2021    2nd Qtr 2021
Net Investment Loss,           
       before Income Taxes$(1,298)$(703)
Adjustments to reconcile to DCF:
       Distributions characterized as
              return of capital (ROC)8,2824,286
       Other5(1)
              DCF$6,989$3,582
 
Leverage

The fund’s leverage utilization increased approximately $3.2 million during the six months ended May 31, 2021, compared to the six months ended November 30, 2020, and represented 25.0% of total assets at May 31, 2021. At quarter-end, the fund was in compliance with applicable coverage ratios, 27% of the leverage cost was fixed, the weighted-average maturity was 1.0 years and the weighted-average annual rate on leverage was 2.38%. These rates will vary in the future as a result of changing floating rates, utilization of the fund’s credit facility and as leverage matures or is redeemed. During the quarter, $8.2 million of Senior Notes and $0.5 million of preferred stock were paid in full upon maturity.

Income taxes

As of May 31, 2021, the fund’s deferred tax asset was zero. The fund had capital loss carryforwards of $566.0 million for federal income tax purposes, which can be used to offset future capital gains. To the extent that the fund has taxable income, it will owe federal and state income taxes. Tax payments can be funded from investment earnings, fund assets, or borrowings.

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

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

(unaudited)
 
10Tortoise
 


 
 
2021 Semi-Annual Report | May 31, 2021
 
NTG 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.

20202021
     Q2(1)     Q3(1)     Q4(1)     Q1(1)     Q2(1)
Total Income from Investments     
       Distributions and dividends from investments$6,309 $5,045 $4,620 $4,474 $4,653 
       Dividends paid in kind130     
       Interest earned on corporate bonds317 222 166 141 136 
       Premiums on options written     
              Total from investments6,756 5,267 4,786 4,615 4,789 
Operating Expenses Before Leverage     
       Costs and Current Taxes     
       Advisory fees, net of fees waived873 482 442 565 652 
       Other operating expenses156 207 260 183 101 
1,029 689 702 748 753 
       Distributable cash flow before leverage costs and current taxes5,727 4,578 4,084 3,867 4,036 
       Leverage costs(2)2,402 683 606 460 454 
       Current income tax expense(3)     
              Distributable Cash Flow(4)$3,325 $3,895 $3,478 $3,407 $3,582 
        
Net realized gain (loss), net of income taxes,     
       for the period$(518,170)$(28,505)$(8,323)$4,300 $(5,464)
As a percent of average total assets(5)     
       Total from investments5.77 %9.32 %9.29 %7.87 %7.00 %
       Operating expenses before leverage costs and current taxes0.88 %1.22 %1.36 %1.28 %1.10 %
       Distributable cash flow before leverage costs and current taxes4.89 %8.10 %7.93 %6.59 %5.90 %
As a percent of average net assets(5)     
       Total from investments16.18 %13.90 %14.47 %10.93 %9.70 %
       Operating expenses before leverage costs and current taxes2.46 %1.82 %2.12 %1.77 %1.53 %
       Leverage costs and current taxes5.75 %1.80 %1.83 %1.09 %0.92 %
       Distributable cash flow7.97 %10.28 %10.52 %8.07 %7.25 %
        
Selected Financial Information     
Distributions paid on common stock$ $1,952 $1,832 $1,862 $2,032 
Distributions paid on common stock per share(7) 0.3100 0.3100 0.3300 0.3600 
Total assets, end of period(6)239,673 212,560 226,449 257,953 287,686 
Average total assets during period(6)(8)466,040 224,762 207,191 237,709 271,233 
Leverage(9)50,900 50,900 68,021 68,640 71,869 
Leverage as a percent of total assets21.2 %23.9 %30.0 %26.6 %25.0 %
Net unrealized appreciation (depreciation), end of period(22,960)(11,035)14,962 44,946 82,670 
Net assets, end of period162,369 141,403 149,407 176,826 206,310 
Average net assets during period(10)166,096 150,772 132,986 171,201 195,863 
Net asset value per common share(7)25.69 22.76 25.56 31.34 36.56 
Market value per common share(7)20.95 16.79 19.46 27.00 28.71 
Shares outstanding (000's)6,321 6,214 5,846 5,643 5,643 
 
(1)Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August. Q4 is the period from September through November.
(2)Leverage costs include interest expense, distributions to preferred stockholders and other recurring leverage expenses.
(3)Includes taxes paid on net investment income and foreign taxes, if any. Taxes related to realized gains are excluded from the calculation of Distributable Cash Flow (“DCF”).
(4)“Net investment income (loss), before income taxes” on the Statement of Operations is adjusted as follows to reconcile to DCF: increased by the return of capital on distributions, the dividends paid in stock and increased liquidation value, the premium on dividends paid in kind and amortization of debt issuance costs.
(5)Annualized for periods less than one year.
(6)Includes deferred issuance and offering costs on senior notes and preferred stock.
(7)Adjusted to reflect 1 for 10 reverse stock split effective May 1, 2020.
(8)Computed by averaging month-end values within each period.
(9)Leverage consists of senior notes, preferred stock and outstanding borrowings under the credit facility.
(10)Computed by averaging daily net assets within each period.

 
Tortoise11



 
 
   
 
Tortoise
Pipeline & Energy Fund, Inc. (TTP)
 

Fund description

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

Fund performance

A couple of themes stood out for midstream businesses throughout the first half of the fiscal year. The 2021 first quarter earnings reporting period was one of the strongest for the group in recent memory. The two main drivers were the benefits from Texas winter storm Uri and increased revisions of 2021 EBITDA driven by higher volumes expectations driven by the economy reopening. The fund’s market-based and NAV-based returns for the fiscal period ending May 31, 2021 were 52.0% and 47.0%, respectively (including the reinvestment of distributions). The Tortoise North American Pipeline IndexSM returned 31.1% for the same period.

2021 mid-fiscal year summary
Distributions paid per share     $0.1600
Distribution rate (as of 5/31/2021)2.8%
Quarter-over-quarter distribution increase (decrease)0%
Year-over-year distribution increase (decrease)0%
Cumulative distributions paid per share to stockholders
       since inception in October 2011$54.3900
Market-based total return52.0%
NAV-based total return46.8%
Premium (discount) to NAV (as of 5/31/2021)(21.7)%

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 period.

Key asset performance drivers

Top five contributors     Company type
ONEOK, IncNatural gas pipelines company
Williams Companies, IncNatural gas pipelines company
Kinder Morgan IncNatural gas pipelines company
Enbridge IncCrude oil pipelines company
MPLX LPRefined products pipelines MLP
Bottom five contributorsCompany type
Spartan Acquisition Corp IISpecial purpose acquisition company
Climate Change Crisis Real Impact I Acquisition CorpSpecial purpose acquisition company
Arclight Clean Transition Corp.Special purpose acquisition company
Star Peak Energy TransitionSpecial purpose acquisition company
Peridot Acquisition Corp.Special purpose acquisition company

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

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

(unaudited)
 
12Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
   
 
 

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 intends to distribute an amount closely approximating the total taxable income for the year and, if so determined by the Board, distribute all or a portion of the return of capital paid by portfolio companies during the year. The fund may designate a portion of its distributions as capital gains and may also distribute additional capital gains in the last calendar 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. Although the level of distributions is independent of the funds’ performance in the short term, the fund expects such distributions to correlate with its performance over time.

Distributable cash flow and distributions

Distributable cash flow (DCF) is income from investments less expenses. Income from investments includes the amount received as cash or paid-in-kind distributions from common stock, master limited partnerships (MLPs), affiliates of MLPs, and pipeline and other energy companies in which the fund invests, and dividend payments on short-term investments. Income also includes the premiums received from sales of covered call options, net of amounts paid to buy back out-of-the-money options. The total expenses include current or anticipated operating expenses and leverage costs.

For the six months ended May 31, 2021, income from investments decreased approximately 0.9% as compared to the six months ended November 30, 2020, primarily due to lower distributions from investments within the fund’s portfolio. Operating expenses, consisting primarily of fund advisory fees, increased approximately 4.1% during the period primarily due to higher asset-based fees. Leverage costs decreased approximately 9.9% as compared to the six months ended November 30, 2020 due to lower interest rates during the period. As a result of the changes in income and expenses, DCF increased approximately 0.5% as compared to six months ended November 30, 2020. The fund had net realized gains on investments of approximately $2.2 million during the six months ended May 31, 2021. The fund paid cumulative distributions of $0.320 per share during the six months ended May 31, 2021, no change from the distributions paid during the six months ended November 30, 2020. The fund has paid cumulative distributions to stockholders of $54.39 per share since its inception in October 2011.

The Key Financial Data table discloses the calculation of DCF and should be read in conjunction with this discussion. The difference between income from investments in the DCF calculation and total investment income as reported in the Statement of Operations, is reconciled as follows: (1) the Statement of Operations, in conformity with U.S. generally accepted accounting principles (GAAP), recognizes distributions and dividend income from MLPs, common stock and other investments on their ex-dates, whereas the DCF calculation may reflect distributions and dividend income on their pay dates; (2) GAAP recognizes that a significant portion of the cash distributions received from MLPs, common stock and other investments are characterized as a return of capital and therefore excluded from investment income, whereas the DCF calculation includes the return of capital; (3) income from investments in the DCF calculation includes the value of dividends paid-in-kind (additional stock or units), whereas such amounts may not be included as income for GAAP purposes; and (4) net premiums on options written (premiums received less amounts paid to buy back out-of-the-money options) with expiration dates during the fiscal quarter are included in the DCF calculation, whereas GAAP recognizes the net effect of options written as realized and unrealized gains (losses).

“Net Investment Income (Loss)” on the Statement of Operations is adjusted as follows to reconcile to DCF for YTD and 2nd quarter 2021 (in thousands):

     YTD 2021     2nd Qtr 2021
Net Investment Loss$    (367)$            (204)
Adjustments to reconcile to DCF:
       Distributions characterized as
              return of capital (ROC)1,829907
       Other104
              DCF$1,472$707

Leverage

The fund’s leverage utilization was substantially unchanged during the six months ended May 31, 2021, compared to the six months ended November 30, 2020, and represented 23.3% of total assets at May 31, 2021. At quarter-end, the fund was in compliance with applicable coverage ratios, 100% of the leverage cost was fixed, the weighted-average maturity was 2.0 years and the weighted-average annual rate on leverage was 4.94%. 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)
 
Tortoise13



 
 
   
 
TTP 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.

20202021
     Q2(1)     Q3(1)     Q4(1)     Q1(1)     Q2(1)
Total Income from Investments     
       Dividends and distributions from investments,     
              net of foreign taxes withheld$1,349 $1,357 $1,313 $1,339 $1,307 
       Dividends paid in kind10     
       Net premiums on options written208     
              Total from investments1,567 1,357 1,313 1,339 1,307 
Operating Expenses Before Leverage Costs     
       Advisory fees, net of fees waived235 202 186 198 228 
       Other operating expenses137 86 154 115 113 
372 288 340 313 341 
       Distributable cash flow before leverage costs1,195 1,069 973 1,026 966 
       Leverage costs(2)409 311 266 261 259 
              Distributable Cash Flow(3)$786 $758 $707 $765 $707 
         
Net realized gain (loss) on investments and foreign     
       currency translation, for the period$(86,692)$(3,517)$195 $1,945 $282 
As a percent of average total assets(4)     
       Total from investments6.29 %7.44 %7.80 %7.61 %6.36 %
       Operating expenses before leverage costs1.49 %1.58 %2.02 %1.78 %1.66 %
       Distributable cash flow before leverage costs4.80 %5.86 %5.78 %5.83 %4.70 %
As a percent of average net assets(4)     
       Total from investments12.85 %11.11 %12.18 %10.26 %8.44 %
       Operating expenses before leverage costs3.05 %2.36 %3.15 %2.40 %2.20 %
       Leverage costs3.35 %2.55 %2.47 %2.00 %1.67 %
       Distributable cash flow6.45 %6.20 %6.56 %5.86 %4.57 %
         
Selected Financial Information     
Distributions paid on common stock$401 $397 $388 $370 $365 
Distributions paid on common stock per share(5)0.1600 0.1600 0.1600 0.1600 0.1600 
Total assets, end of period(6)75,700 71,579 69,207 75,473 88,149 
Average total assets during period(6)(7)99,132 72,559 67,662 71,333 81,482 
Leverage(8)24,500 24,500 20,557 20,557 20,557 
Leverage as a percent of total assets32.4 %34.2 %29.7 %27.2 %23.3 %
Net unrealized appreciation (depreciation), end of period(20,652)(20,791)(17,638)(11,507)1,568 
Net assets, end of period50,721 46,636 48,108 53,891 66,024 
Average net assets during period(9)48,522 48,608 43,353 52,929 61,405 
Net asset value per common share(5)20.26 18.86 19.97 23.35 28.96 
Market value per common share(5)16.98 14.11 15.15 21.32 22.69 
Shares outstanding (000's)2,504 2,473 2,409 2,308 2,279 

(1)Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August. Q4 is the period from September through November.
(2)Leverage costs include interest expense, distributions to preferred stockholders and other recurring leverage expenses.
(3)“Net investment income (loss)” on the Statement of Operations is adjusted as follows to reconcile to Distributable Cash Flow (“DCF”): increased by net premiums on options written, the return of capital on distributions, the dividends paid in stock and increased liquidation value, the premium on dividends paid in kind and amortization of debt issuance costs.
(4)Annualized for periods less than one year.
(5)Adjusted to reflect 1 for 4 reverse stock split effective May 1, 2020.
(6)Includes deferred issuance and offering costs on senior notes and preferred stock.
(7)Computed by averaging month-end values within each period.
(8)Leverage consists of senior notes, preferred stock and outstanding borrowings under the revolving credit facility.
(9)Computed by averaging daily net assets within each period.

 
14Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
Tortoise
Energy Independence Fund, Inc. (NDP)
 

Fund description

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

Fund performance

There continues to be encouraging news around mobility and the economic reopening. In the U.S., total refined product demand surged higher than the corresponding week in 2019. While a slower recovery should be expected in jet fuel, more Americans are traveling, and American Airlines announced that April ticket sales hit 90% of pre-pandemic levels. The Organization of Petroleum Exporting Countries (OPEC) and their Non-OPEC partners (OPEC+) have continued deep production cuts with a clear goal of balancing the global crude oil market. Overall adherence to the production cut agreement has remained strong in the first half of 2021 leading to inventory draws. The global crude oil market remains in deficit, supported by the OPEC+ crude oil production cut agreement, and expected inventory draws are expected to continue throughout 2021 driven by increased demand as the world economy re-opens. The fund’s market-based and NAV-based returns for the fiscal period ending May 31, 2021 were 57.4% and 40.5%, respectively (including the reinvestment of distributions).

2021 mid-fiscal year summary
Distributions paid per share     None
Distribution rate (as of 5/31/2021)0.0%
Quarter-over-quarter distribution increase (decrease)0.0%
Year-over-year distribution increase (decrease)0.0%
Cumulative distributions paid per share to stockholders
       since inception in July 2012$96.9000
Market-based total return57.4%
NAV-based total return40.4%
Premium (discount) to NAV (as of 5/31/2021)(13.8)%

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

Key asset performance drivers

Top five contributors     Company type
Diamondback Energy IncOil and gas production company
EOG Resources IncOil and gas production company
ConocoPhillipsOil and gas production company
Pioneer Natural Resources CoOil and gas production company
Cheniere Energy Inc.Natural gas pipelines company
Bottom five contributorsCompany type
Hennessy Capital Investment Corp VSpecial purpose acquisition company
Spartan Acquisition Corp IISpecial purpose acquisition company
Star Peak Energy TransitionSpecial purpose acquisition company
Climate Change Crisis Real Impact I Acquisition CorpSpecial purpose acquisition company
Arclight Clean Transition Corp.Special purpose acquisition company

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

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

(unaudited)
 
Tortoise15



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

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 intends to distribute an amount closely approximating the total taxable income for the year and, if so determined by the Board, distribute all or a portion of the return of capital paid by portfolio companies during the year. The fund may designate a portion of its distributions as capital gains and may also distribute additional capital gains in the last calendar 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. Although the level of distributions is independent of the funds’ performance in the short term, the fund expects such distributions to correlate with its performance over time.

Distributable cash flow and distributions

Distributable cash flow (DCF) is income from investments less expenses. Income from investments includes the amount received as cash or paid-in-kind distributions from investments and dividend payments on short-term investments. Income also includes the premiums received from sales of covered call options, net of amounts paid to buy back out-of-the-money options. The total expenses include current or anticipated operating expenses and leverage costs.

For the six months ended May 31, 2021, income from investments decreased approximately 1.6% as compared to the six months ended November 30, 2020, primarily due to lower distributions from investments within the fund’s portfolio. Operating expenses, consisting primarily of fund advisory fees, increased approximately 19.7% during the period primarily due to higher asset-based fees. Total leverage costs increased approximately 24.1% as compared to the six months ended November 30, 2020 due to higher interest rates during the period. As a result of the changes in income and expenses, DCF decreased approximately 24.1% as compared to the six months ended November 30, 2020.

The fund announced the temporary suspension of distributions during the 2nd quarter of 2020 and did not pay any distributions during the period through 2nd quarter of 2021. The fund has paid cumulative distributions to stockholders of $96.90 per share since its inception in July 2012.

The Key Financial Data table discloses the calculation of DCF and should be read in conjunction with this discussion. The difference between income from investments in the DCF calculation and total investment income as reported in the Statement of Operations, is reconciled as follows: (1) the Statement of Operations, in conformity with U.S. generally accepted accounting principles (GAAP), recognizes distributions and dividend income from MLPs, common stock and other investments on their ex-dates, whereas the DCF calculation may reflect distributions and dividend income on their pay dates; (2) GAAP recognizes that a significant portion of the cash distributions received from MLPs, common stock and other investments are characterized as a return of capital and therefore excluded from investment income, whereas the DCF calculation includes the return of capital; (3) income from investments in the DCF calculation includes the value of dividends paid-in-kind (additional stock or units), whereas such amounts may not be included as income for GAAP purposes; and (4) net premiums on options written (premiums received less amounts paid to buy back out-of-the-money options) with expiration dates during fiscal quarter are included in the DCF calculation, whereas GAAP recognizes the net effect of options written as realized and unrealized gains (losses).

“Net Investment Income (Loss)” on the Statement of Operations is adjusted as follows to reconcile to DCF for YTD and 2nd quarter 2021 (in thousands):

     YTD 2021     2nd Qtr 2021
Net Investment Income (loss)$(9)$7 
Adjustments to reconcile to DCF:
       Distributions characterized as
              return of capital295136
                     DCF$286$143

Leverage

The fund’s leverage utilization decreased $0.8 million during the six months ended May 31, 2021, as compared to the six months ended November 30, 2020. The fund utilizes all floating rate leverage that had an interest rate of 1.19% and represented 7.7% 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)
 
16Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
NDP 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.

20202021
     Q2(1)     Q3(1)     Q4(1)     Q1(1)     Q2(1)
Total Income from Investments
       Distributions and dividends from investments,
              net of foreign taxes withheld$448$397$375$373$387
       Dividends paid in stock
       Net premiums on options written459
              Total from investments907397375373387
 
Operating Expenses Before Leverage Costs
       Advisory fees, net of fees waived939487106125
       Other operating expenses12484101106101
217178188212226
       Distributable cash flow before leverage costs690219187161161
       Leverage costs(2)3014151818
              Distributable Cash Flow(3)$660$205$172$143$143
 
Net realized gain (loss) on investments and foreign
       currency translation, for the period$(44,750)$(8)$17$1,399$9,213
As a percent of average total assets(4)
       Total from investments8.97%4.74%4.66%4.00 %3.48%
       Operating expenses before leverage costs2.15%2.12%2.34%2.27%2.03%
       Distributable cash flow before leverage costs6.82%2.62%2.32%1.73%1.45%
As a percent of average net assets(4)
       Total from investments13.19%5.33%5.55%4.38%3.79%
       Operating expenses before leverage costs3.15%2.39%2.78%2.49%2.21%
       Leverage costs0.44%0.19%0.22%0.21%0.18%
       Distributable cash flow9.60%2.75%2.55%1.68%1.40%
 
Selected Financial Information
Distributions paid on common stock$$$$$
Distributions paid on common stock per share(5)
Total assets, end of period33,89533,76035,48243,20646,930
Average total assets during period(6)40,20733,34532,35837,83144,782
Leverage(7)4,1004,4005,0004,4003,600
Leverage as a percent of total assets12.1%13.0%14.1%10.2%7.7 %
Net unrealized appreciation (depreciation), end of period(4,249)(4,737)(3,569)2,9027,043
Net assets, end of period29,56629,13730,30738,16042,560
Average net assets during period(8)27,36429,65827,15534,52841,089
Net asset value per common share(5)16.2015.7816.4220.6723.06
Market value per common share(5)12.0111.7612.6317.7419.88
Shares outstanding (000’s)1,8461,8461,8461,8461,846

(1)Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August. Q4 is the period from September through November.
(2)Leverage costs include interest expense and other recurring leverage expenses.
(3)“Net investment income (loss)” on the Statement of Operations is adjusted as follows to reconcile to Distributable Cash Flow (“DCF”): increased by net premiums on options written, the return of capital on distributions the distributions paid in stock and the premium on dividends paid in kind.
(4)Annualized for periods less than one year.
(5)Adjusted to reflect 1 for 8 reverse stock split effective May 1, 2020.
(6)Computed by averaging month-end values within each period.
(7)Leverage consists of outstanding borrowings under the revolving credit facility.
(8)Computed by averaging daily net assets within each period.

Tortoise17



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

Fund description

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

Fund performance

A couple of themes stood out for midstream businesses throughout the first half of the fiscal year. The 2021 first quarter earnings reporting period was one of the strongest for the group in recent memory. The two main drivers were the benefits from Texas winter storm Uri and increased revisions of 2021 EBITDA driven by higher volumes expectations driven by the economy reopening. The fund’s market-based and NAV-based returns for the fiscal period ending May 31, 2021 were 35.7% and 23.7%, respectively (including the reinvestment of distributions). Comparatively, the TPZ Benchmark Composite* returned 10.3% for the same period. The fund’s equity holdings outperformed its fixed income holdings for the period on a total return basis.

2021 mid-fiscal year summary     
Monthly distributions paid per share$0.0500
Distribution rate (as of 5/31/2021)4.5%
Quarter-over-quarter distribution increase (decrease)0.0%
Year-over-year distribution increase (decrease)(60.0)%
Cumulative distribution to stockholders
       since inception in July 2009$18.1250
Market-based total return35.7%
NAV-based total return23.2%
Premium (discount) to NAV (as of 5/31/2021)(15.7)%

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

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

Key asset performance drivers

Top five contributors     Company type
MPLX LPRefined products pipelines MLP
Stem, Inc.Special purpose acquisition company
Arclight Clean Transition CorpSpecial purpose acquisition company
Western Midstream Partners LPGathering and processing MLP
Energy Transfer LPNatural gas pipelines MLP
Bottom five contributorsCompany type
Hennessy Capital Investment Corp VSpecial purpose acquisition company
Spartan Acquisition Corp IISpecial purpose acquisition company
Climate Change Crisis Real Impact I Acquisition CorpSpecial purpose acquisition company
Arclight Clean Transition Corp.Special purpose acquisition company
Sunnova Energy International Inc. – Convertible Notes 9.750% Due 4/30/2025Solar company

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

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

(unaudited)
 
18Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
 
 
 

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 intends to distribute an amount closely approximating the total taxable income for the year and, if so determined by the Board, distribute all or a portion of the return of capital paid by portfolio companies during the year. The fund may designate a portion of its distributions as capital gains and may also distribute additional capital gains in the last calendar 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. Although the level of distributions is independent of the funds’ performance in the short term, the fund expects such distributions to correlate with its performance over time.

Distributable cash flow and distributions

Distributable cash flow (DCF) is income from investments less expenses. Income from investments includes the accrued interest from corporate bonds, cash distributions and paid-in-kind distributions from master limited partnerships (MLPs) and other equity investments and dividends earned from short-term investments. The total expenses include current or anticipated operating expenses and leverage costs.

For the six months ended May 31, 2021, income from investments decreased approximately 1.6% as compared to the six months ended November 30, 2020, primarily due to lower distributions from investments within the fund’s portfolio. Operating expenses, consisting primarily of fund advisory fees, increased approximately 19.7% during the period primarily due to higher asset-based fees. Total leverage costs increased approximately 24.1% as compared to the six months ended November 30, 2020 due to higher interest rates during the period. As a result of the changes in income and expenses, DCF decreased approximately 24.1% as compared to the six months ended November 30, 2020.

The fund announced the temporary suspension of distributions during the 2nd quarter of 2020 and did not pay any distributions during the period through 2nd quarter of 2021. The fund has paid cumulative distributions to stockholders of $96.90 per share since its inception in July 2012.

The Key Financial Data table discloses the calculation of DCF and should be read in conjunction with this discussion. The difference between income from investments in the DCF calculation and total investment income as reported in the Statement of Operations, is reconciled as follows: (1) U.S. generally accepted accounting principles (GAAP), recognizes distribution income from MLPs, common stock and other investments on their ex-dates, whereas the DCF calculation may reflect distribution income on their pay dates; (2) GAAP recognizes that a significant portion of the cash distributions received from MLPs, common stock and other investments are characterized as a return of capital and therefore excluded from investment income, whereas the DCF calculation includes the return of capital; (3) income from investments in the DCF calculation includes the value of dividends paid-in-kind (additional stock or units), whereas such amounts may not be included as income for GAAP purposes; and (4) amortization of premium or discount for all securities is calculated using the yield to worst methodology for GAAP purposes while yield to call is used in calculating amortization for long-dated hybrid securities in the DCF calculation. The treatment of expenses in the DCF calculation also differs from what is reported in the Statement of Operations. In addition to the total operating expenses, including fee waiver, as disclosed in the Statement of Operations, the DCF calculation reflects interest expense and realized and unrealized gains (losses) on interest rate swap settlements as leverage costs.

“Net Investment Income (Loss)” on the Statement of Operations is adjusted as follows to reconcile to DCF for YTD and 2nd quarter 2021 (in thousands):

     YTD 2021     2nd Qtr 2021
Net Investment Income$759$332
Adjustments to reconcile to DCF:
       Distributions characterized as
       return of capital1,699862
            DCF$2,458$1,194

Leverage

The fund’s leverage utilization was substantially unchanged during the six months ended May 31, 2021, compared to the six months ended November 30, 2020, and represented 18.6% of total assets at May 31, 2021. During the period, the fund maintained compliance with its applicable coverage ratios. At year-end, including the impact of interest rate swaps, approximately 100% of the leverage cost was fixed, the weighted-average maturity was 2.7 years and the weighted-average annual rate on leverage was 3.33%. These rates will vary in the future as a result of changing floating rates and as swaps mature or are 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)
 
Tortoise19



 
 
 
 
TPZ 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.

20202021
     Q2(1)     Q3(1)     Q4(1)     Q1(1)     Q2(1)
Total Income from Investments 
       Interest earned on corporate bonds$1,116$1,013$926$885$858
       Distributions and dividends from investments,
              net of foreign taxes withheld800914940985961
       Dividends paid in kind8
              Total from investments1,9241,9271,8661,8701,819
 
Operating Expenses Before Leverage Costs
       Advisory fees251261258282300
       Other operating expenses120116126120112
 371377384402412
       Distributable cash flow before leverage costs1,5531,5501,4821,4681,407
       Leverage costs(2)234196188204213
              Distributable Cash Flow(3)$1,319$1,354$1,294$1,264$1,194
 
Net realized gain (loss) on investments and foreign
       currency translation, for the period$(27,995)$351$540$2,886$775
As a percent of average total assets(4)
       Total from investments6.59%7.00%6.79%6.40%5.77%
       Operating expenses before leverage costs1.27%1.37%1.40%1.38%1.31%
       Distributable cash flow before leverage costs5.32%5.63%5.39%5.02%4.46%
As a percent of average net assets(4)
       Total from investments10.12%9.05%8.94%7.94%7.14%
       Operating expenses before leverage costs1.95%1.77%1.84%1.71%1.62%
       Leverage costs1.23%0.92%0.90%0.87%0.86%
       Distributable cash flow6.94%6.36%6.20%5.36%4.66%
 
Selected Financial Information
Distributions paid on common stock$2,607$1,043$1,040$1,015$999
Distributions paid on common stock per share0.37500.15000.15000.15000.1500
Total assets, end of period109,703111,838116,212122,293129,169
Average total assets during period(5)116,136109,506110,592118,439125,151
Leverage(6)24,90026,10026,20024,00024,000
Leverage as a percent of total assets22.7%23.3%22.5%19.6%18.6%
Net unrealized appreciation (depreciation), end of period(15,664)(14,689)(9,695)(2,769)5,384
Net assets, end of period84,32285,23289,42696,962103,878
Average net assets during period(7)75,64784,67183,90695,458101,010
Net asset value per common share12.1312.2613.0114.4415.70
Market value per common share9.789.249.9912.1913.23
Shares outstanding (000's)6,9516,9516,8736,7156,617

(1)Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August. Q4 is the period from September through November.
(2)Leverage costs include interest expense, interest rate swap expenses and other recurring leverage expenses.
(3)“Net investment income (loss)” on the Statement of Operations is adjusted as follows to reconcile to Distributable Cash Flow (“DCF”): increased by the return of capital on distributions, the dividends paid in stock and increased liquidation value and the premium on dividends paid in kind; and decreased by realized and unrealized gains (losses) on interest rate swap settlements.
(4)Annualized for periods less than one year.
(5)Computed by averaging month-end values within each period.
(6)Leverage consists of outstanding borrowings under the revolving credit facility.
(7)Computed by averaging daily net assets within each period.

20Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
Tortoise
Essential Assets Income Term Fund (TEAF)
 

Fund description

TEAF seeks to provide a high level of total return with an emphasis on current distributions. TEAF provides investors access to a combination of public and direct investments in essential assets that are making an impact on clients and communities.

Fund performance

TEAF generated strong positive NAV performance in the first fiscal half of 2021. Energy infrastructure companies performed extremely well during the period, driven by a solid fundamental outlook and strengthening commodity prices. Listed sustainable infrastructure companies performance softened a bit relative to most of 2020, but generated modest gains during the period. TEAF’s private energy and social infrastructure sleeves also showed solid returns during the quarter.

We continue to hold a constructive outlook for the underlying assets in the TEAF portfolio looking into the second half of 2021. Listed energy infrastructure companies are expected to benefit from recovering energy demand, as well as constructive commodity prices in the second half of 2021. We expect to see robust free cash flow generation from our portfolio of listed energy infrastructure companies that will be supportive of return of capital to investors over the coming months. Listed sustainable infrastructure companies continue to face headwinds in the form of increasing input costs that could impact margins and growth in the near-term, however we continue to hold a positive view as valuations have become increasingly more attractive as the sector has lagged broader equity markets in recent months. Additionally, the secular tailwinds of de-carbonization and renewable generation build out have continued to strengthen increasing our conviction of the sector in the long-term. The portfolio of operating solar assets continued to perform well and as expected during the quarter. One project, that is mechanically complete, has experienced a minor delay in the interconnection with the local utility delaying in-service of the asset by a few months. We now expect that project to be online in the fall of 2021 at which point all assets will be fully operational.

We continue to progress on transitioning the portfolio to the targeted allocation of 60% direct investments. As of May 31, 2021, TEAF’s total direct investment commitments were approximately $126 million or approximately 50% of the portfolio. As previously mentioned, we have completed the fund’s allocation to direct sustainable and energy infrastructure investments. We expect to reach the targeted allocation for direct investments in the second half of 2021.

Listed Energy Infrastructure

Listed energy infrastructure equities were the strongest driver of performance in the TEAF portfolio during the first half of 2021
 
Positive equity performance during the period was driven by a solid recovery in global energy demand resulting from the rollout of COVID-19 vaccines, increased mobility trends and strong commodity prices
 
Crude oil prices rebounded strongly in the period as OPEC remains accommodative of global energy markets while demand for end products recover
 
Global LNG prices strengthened notably during the period due to rebounding demand and low inventory levels in North America and Europe
 
Free cash flow generation in the sector is expected to accelerate due to lower capital expenditures and stable earnings providing valuation support

Listed Sustainable Infrastructure

The six-month period was dominated by significant mean reversion on names which had performed well in 2020. Pure renewables companies as well as renewable-driven utilities were severely hit at the beginning of calendar year 2021 as investors turned their attention to the effects of inflationary pressure on returns and steepening yield curves.
 
Equity market flows switched out of long-duration defensive business models into more cyclical sectors. Clean energy and utilities’ performance stood at the bottom-end of MSCI World’s sectors.
 
In such context, TEAF’s sustainable listed infrastructure sleeve performed relatively well due to good diversification of risk across sub-segments. Commodity strength supported waste-to-energy while cyclical infrastructure holdings benefited from the re-opening trade through exposure to airports and toll roads.
 
Yield curves started to flatten towards the end of the 6-month period, leading to some gradual recovery in some regulated utilities names in the portfolio. Further easing of long-term interest rates as well as the positive impact of rising power and carbon prices on clean power generators bodes well for listed sustainable infrastructure in the second half of the year.

(unaudited)
 
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Tortoise

Essential Assets Income Term Fund (TEAF) (continued)

 

Social Infrastructure

TEAF completed two direct investments in the Social Infrastructure portfolio during the period
 
In March 2021, TEAF completed a debt investment in Clearwater at Glendora. Clearwater at Glendora will use the proceeds to construct a new, 117-unit Assisted Living and Memory Care facility in Glendora, California to meet the underserved needs for senior care in the specific submarket near the Los Angeles metropolitan area. The Developer and Manager is an experienced regional player in the senior living space. When complete, Clearwater at Glendora will offer a mix of studio, 1-bedroom and 2-bedroom units with amenities that provide for a high-end, luxury feel with prices that are comparable to other facilities in the area.
 
In April 2021, TEAF closed a debt investment in Dynamic BC Holding, a bioenergy engineering, construction and development firm. The funding will partially finance a waste-to-energy anaerobic digester facility near Green Bay, Wisconsin that will source manure from local dairy farms, which will be converted into renewable natural gas. The project will generate environmentally-friendly renewable natural gas and provide a sustainable method of recycling manure into fertilizer, thus reducing surface and groundwater pollution coming from nitrates, phosphorous and sediment runoff in the area.

Private Energy Infrastructure

No deals were completed in the Private Energy Infrastructure portfolio during the period

Private Sustainable Infrastructure

TEAF did not invest in any additional private sustainable infrastructure projects during the 6 month period 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 last solar project under construction in the portfolio to come online in fall 2021

2021 mid-fiscal year summary     
Monthly distributions paid per share$0.0750
Distribution rate (as of 5/31/2021)6.1%
Quarter-over-quarter distribution increase (decrease)0.0%
Year-over-year distribution increase (decrease)(30.9)%
Cumulative distribution to stockholders
       since inception in July 2009$2.3105
Market-based total return16.8%
NAV-based total return9.2%
Premium (discount) to NAV (as of 5/31/2021)(12.4)%

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.

(unaudited)
 
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2021 Semi-Annual Report | May 31, 2021
 
 
 
 

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 intends to distribute an amount closely approximating the total taxable income for the year and, if so determined by the Board, distribute all or a portion of the return of capital paid by portfolio companies during the year. The fund may designate a portion of its distributions as capital gains and may also distribute additional capital gains in the last calendar 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. Although the level of distributions is independent of the funds’ performance in the short term, the fund expects such distributions to correlate with its performance over time.

Distributable cash flow and distributions

DCF is income from investments less expenses. Income from investments includes the accrued interest from bonds, the amount received as cash or paid-in-kind distributions from investments and dividend payments on short-term investments. Income also includes the premiums received from sales of covered call options, net of amounts paid to buy back out-of-the-money options. The total expenses include current or anticipated operating expenses and leverage costs.

For the six months ended May 31, 2021, income from investments increased approximately 0.8% as compared to the six months ended November 30, 2020, primarily due to greater distributions from investments within the fund’s portfolio. Operating expenses, consisting primarily of fund advisory fees, increased approximately 2.3% during the period primarily due to higher asset-based fees. Total leverage costs decreased approximately 1.9% as compared to the six months ended November 30, 2020, primarily due to lower interest rates. As a result of the changes in income and expenses, DCF increased approximately 0.4% as compared to the six months ended November 30, 2020. The fund had net realized gains on investments of approximately $8.6 million during the six months ended May 31, 2021.

The fund paid monthly distributions of $0.075 per share during 2nd quarter 2021, no change from the prior quarter and the distributions paid in the 2nd quarter 2020. The fund’s Board of Directors has declared monthly distributions of $0.075 per share to be paid during 3rd quarter 2021. The fund has paid cumulative distributions to stockholders of $2.3105 per share since its inception in March 2019.

The Key Financial Data table discloses the calculation of DCF and should be read in conjunction with this discussion. The difference between distributions received from investments in the DCF calculation and total investment income as reported in the Statement of Operations, is reconciled as follows: the Statement of Operations, in conformity with U.S. generally accepted accounting principles (GAAP), recognizes distribution income from MLPs and other investments on their ex-dates, whereas the DCF calculation may reflect distribution income on their pay dates; GAAP recognizes that a significant portion of the cash distributions received from MLPs and other investments are characterized as a return of capital and therefore excluded from investment income, whereas the DCF calculation includes the return of capital (net of any distributions deemed to be return of principal); and distributions received from investments in the DCF calculation include the value of dividends paid-in-kind (additional stock or MLP units), whereas such amounts may not be included as income for GAAP purposes and includes distributions related to direct investments when the purchase price is reduced in lieu of receiving cash distributions. Net premiums on options written (premiums received less amounts paid to buy back out-of-the-money options) with expiration dates during the fiscal quarter are included in the DCF calculation, whereas GAAP recognizes the net effect of options written as realized and unrealized gains (losses). Income for DCF purposes is reduced by amortizing the cost of certain investments that may not have a residual value after a known time period and by distributions received from investments deemed to be return of principal.

“Net Investment Income (Loss)” on the Statement of Operations is adjusted as follows to reconcile to DCF for YTD and 2nd quarter 2021 (in thousands):

     YTD 2021     2nd Qtr 2021
Net Investment Income (Loss),
       before income taxes$3,137$788
Adjustments to reconcile to DCF:
       Distributions characterized as
              return of capital2,4342,030
       Net premiums on options written1,844946
       Amortization on certain investments(670)(315)
              DCF$    6,745$          3,449

Leverage

The fund’s leverage utilization decreased $12.4 million during the six months ended May 31, 2021, as compared to the six months ended November 30, 2020. The fund utilizes all floating rate leverage that had an interest rate of 0.89% and represented 11.7% of total assets at quarter-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)
 
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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.

20202021
     Q2(1)     Q3(2)     Q4(2)     Q1(2)     Q2(2)
Total Income from Investments  
       Interest earned on bonds and notes$1,571$1,669$1,604$1,620$1,443
       Distributions and dividends from investments,
              net of foreign taxes withheld2,2571,9982,1121,8362,244
       Distributions paid in kind75
       Net premiums on options written372569967898946
              Total from investments4,2754,2364,6834,3544,633
 
Operating Expenses Before Leverage Costs
       Advisory fees679797785851880
       Other operating expenses155116340130223
8349131,1259811,103
       Distributable cash flow before leverage costs3,4413,3233,5583,3733,530
       Leverage costs(2)10084777781
              Distributable Cash Flow(3)$3,341$3,239$3,481$3,296$3,449
 
Net realized gain (loss) on investments and foreign
       currency translation, for the period$(37,365)$(4,186)$5,351$6,152$2,461
As a percent of average total assets(4)
       Total from investments7.57%7.18%8.00%6.97%7.04%
       Operating expenses before leverage costs1.48%1.55%1.92%1.57%1.68%
       Distributable cash flow before leverage costs6.09%5.63%6.08%5.40%5.36%
As a percent of average net assets(4)
       Total from investments9.18%8.26%9.22%7.87%8.17%
       Operating expenses before leverage costs1.79%1.78%2.21%1.77%1.94%
       Leverage costs0.21%0.16%0.15%0.14%0.14%
       Distributable cash flow7.18%6.32%6.86%5.96%6.09%
 
Selected Financial Information
Distributions paid on common stock.$4,392$3,036$3,035$3,035$3,036
Distributions paid on common stock per share0.32550.22500.22500.22500.2250
Total assets, end of period234,072237,689246,112263,959259,311
Average total assets during period(5)224,806234,695235,505253,187261,033
Leverage(6)30,90030,50031,10042,80030,400
Leverage as a percent of total assets13.2%12.8%12.6%16.2%11.7%
Net unrealized appreciation (depreciation), end of period(18,369)(3,411)5,259(1,352)13,357
Net assets, end of period196,262206,277213,825218,560227,356
Average net assets during period(7)185,254203,958204,319224,328225,036
Net asset value per common share14.5515.2915.8516.2016.85
Market value per common share10.7311.2013.0413.8914.76
Shares outstanding (000's)13,49113,49113,49113,49113,491

(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)Leverage costs include interest expense and other recurring leverage expenses.
(3)“Net investment income (loss)” on the Statement of Operations is adjusted as follows to reconcile to Distributable Cash Flow (“DCF”): increased by the return of capital on distributions and the net premiums on options written and decreased by amortization on certain investments.
(4)Annualized for periods less than one year.
(5)Computed by averaging month-end values within each period.
(6)Leverage consists of outstanding borrowings under the margin loan facility.
(7)Computed by averaging daily net assets within each period.

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2021 Semi-Annual Report | May 31, 2021
 
TYG Consolidated Schedule of Investments (unaudited)
May 31, 2021
 

     Shares/Units     Fair Value
Master Limited Partnerships — 78.8%(1)
Crude Oil Pipelines — 14.8%(1)
United States — 14.8%(1)
BP Midstream Partners LP588,860$8,326,480
NuStar Energy L.P.1,168,07121,434,103
Plains All American Pipeline, L.P.2,606,36827,445,055
Shell Midstream Partners, L.P.234,2143,382,050
60,587,688
 
Renewable Infrastructure — 5.5%(1)
United States — 5.5%(1)
Enviva Partners, LP90,9444,447,162
NextEra Energy Partners, LP264,25318,066,978
22,514,140
  
Natural Gas/Natural Gas Liquids Pipelines — 26.7%(1) 
United States — 26.7%(1)
DCP Midstream, LP1,066,66426,847,933
Energy Transfer LP3,519,68234,844,852
Enterprise Products Partners L.P.2,007,97947,408,384
109,101,169
 
Natural Gas Gathering/Processing — 6.3%(1) 
United States — 6.3%(1)
Crestwood Equity Partners LP53,6911,538,784
Western Midstream Partners, LP1,208,30324,141,894
25,680,678
 
Refined Product Pipelines — 25.5%(1) 
United States — 25.5%(1)
Holly Energy Partners, L.P.365,3407,770,782
Magellan Midstream Partners, L.P.885,53743,648,119
MPLX LP(2)1,751,33550,140,721
Phillips 66 Partners LP75,7713,036,902
104,596,524
Total Master Limited
       Partnerships(Cost $299,890,849)322,480,199
 
Common Stock — 38.6%(1)
Renewable Infrastructure — 2.7%(1)
United States — 2.7%(1)
Atlantica Sustainable
       Infrastructure PLC174,5126,343,511
Clearway Energy Inc.172,0044,614,867
10,958,378
 
Energy Technology — 4.8%(1)
United States — 4.8%(1)
Bluescape Opportunities
       Acquisition Corp.(3)84,134819,465
Climate Real Impact Solutions II
       Acquisition Corp. Class A(3)109,3611,079,393
ECP Environmental Growth
       Opportunities Corp. Class A(3)165,1141,608,210
European Sustainable Growth
       Acquisition Corp.(3)114,9221,110,147
First Reserve Sustainable Growth Co.(3)137,8971,344,496
Flame Acquisition Corp.(3)117,8001,137,948
Kensington Capital Acquisition
       Corp. Class A(3)55,552547,743
Northern Genesis Acquisition Corp. I(3)76,648751,150
Power & Digital Infrastructure
       Acquisition Corp.(3)192,6321,883,941
Queen's Gambit Growth
       Capital Class A(3)111,2561,075,846
RMG Acquisition Corp. III(3)137,0681,340,525
Rice Acquisition Corp.(3)86,3601,359,306
Spartan Acquisition Corp. III(3)165,1141,614,815
Sustainable Development
       Acquisition I Corp.(3)198,2911,917,474
Warrior Technologies
       Acquisition Co. Class A(3)225,0062,181,433
19,771,892
 
Natural Gas/Natural Gas Liquids Pipelines — 25.9%(1)
United States — 25.9%(1)
Kinder Morgan Inc.1,443,94926,482,025
ONEOK, Inc.640,92733,802,490
The Williams Companies, Inc.1,733,85645,669,767
105,954,282
 
Natural Gas Gathering/Processing — 5.2%(1)
United States — 5.2%(1)
Targa Resources Corp.542,51821,082,249
Total Common Stock
       (Cost $119,687,113)157,766,801
 
Special Purpose Acquisition Company Units — 3.3%(1)
Energy Technology — 3.3%(1)
United States — 3.3%(1)
ArcLight Clean Transition Corp. II(3)141,1441,414,263
Decarbonization Plus Acquisition III(3)230,2442,302,440
ESM Acquisition Corp.(3)280,2512,792,701
Northern Genesis Acquisition Unit III(3)197,3521,965,626
Peridot Acquisition Corp. II(3)126,2641,260,115
Tech and Energy Transition Corp.(3)393,0543,930,540
Total Special Purpose
       Acquisition Companies
       (Cost $13,687,290)13,665,685

See accompanying Notes to Financial Statements.
 
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TYG Consolidated Schedule of Investments (unaudited) (continued)
May 31, 2021
 

Principal Amount/
     Shares/Units     Fair Value
Preferred Stock — 3.9%(1)
Natural Gas/Natural Gas Liquids Pipelines — 3.1%(1)
United States — 3.1%(1)
Altus Midstream Company, 7.000%(4)(5)10,427$12,703,424
 
Renewable Infrastructure — 0.8%(1)
United States — 0.8%(1)
NextEra Energy, Inc.72,0163,484,134
Total Preferred Stock
       (Cost $13,927,321)16,187,558
 
Corporate Bonds — 1.2%(1)
Refined Product Pipelines — 0.3%(1)
United States — 0.3%(1)
Buckeye Partners,
       6.375%, 01/22/2078$1,200,000993,000
 
Natural Gas Gathering/Processing — 0.9%(1)
United States — 0.9%(1)
Enlink Midstream Partners,
       6.000%, Perpetual$5,100,0003,843,972
Total Corporate Bonds
       (Cost $5,191,453)4,836,972
 
Private Investments — 2.3%(1)
Renewable Infrastructure — 2.3%(1)
United States — 2.3%(1)
TK NYS Solar Holdco, LLC(4)(5)(6)
       (Cost $51,206,470)N/A9,270,621
 
Special Purpose Acquisition Company Warrants — 0.2%(1)
Energy Technology — 0.2%(1)
United States — 0.2%(1)
Bluescape Opportunities
       Acquisition Corp. Warrant(3)87,668120,982
Climate Change Crisis Real
       Impact Warrant(3)85,002194,534
Climate Real Impact Solutions II
       Acquisition Corp. Warrant(3)43,97848,187
ECP Environmental Growth
       Opportunities Corp. Warrant(3)41,27937,415
European Sustainable Growth
       Acquisition Corp. Warrant(3)118,86095,100
First Reserve Sustainable
       Growth Co Warrant(3)68,94862,053
Flame Acquisition Corp. Warrant(3)  58,90044,202
Kensington Capital Acquisition
       Corp. Warrant(3)13,88820,276
Northern Genesis Acquisition
       Corp I Warrant(3)25,54933,852
Power & Digital Infrastructure
       Acquisition Corp. Warrant(3)48,15847,195
Qell Acquisition Corp. Warrant(3)37,93552,161
Queen's Gambit Growth
       Capital Warrant(3)73,66259,003
RMG Acquisition Corp III Warrant(3)27,41325,633
Spartan Acquisition Corp III Warrant(3)41,27839,627
Sustainable Development
       Acquisition Warrant(3)68,53351,427
Warrior Technologies
       Acquisition Co Warrant(3)165,47795,960
Total Warrants
       (Cost $1,183,115)1,027,607
 
Short-Term Investment — 0.1%(1)
United States Investment Company — 0.1%(1)

Invesco Government & Agency Portfolio — Institutional Class,

   
       0.03%(7) (Cost $241,907)241,907$241,907
 
Total Investments — 128.4%(1)
     (Cost $505,015,518)525,477,350
Interest Rate Swap Contracts — (0.0)%(1)
$10,000,000 notional — net unrealized depreciation(8)(79,789)
Other Assets and Liabilities — (3.9)%(1)(16,107,105)
Income Tax Receivable — 12.7%(1)52,052,354
Senior Notes — (21.5)%(1)(87,926,667)
Line of Credit — (7.8)%(1)(31,900,000)
Mandatory Redeemable Preferred Stock
       at Liquidation Value — (7.9)%(1)(32,300,000)
Total Net Assets Applicable to
     Common Stockholders — 100.0%(1)$409,216,143

(1)Calculated as a percentage of net assets applicable to common stockholders.
(2)A portion of the security is segregated as collateral for the unrealized depreciation of interest rate swap contracts of $79,789.
(3)Non-income producing security.
(4)Restricted securities have a total fair value of $21,974,045, which represents 5.4% of net assets. See Note 6 to the financial statements for further disclosure. All or a portion of the security represents cover for outstanding call option contracts written.
(5)Securities have been valued by using significant unobservable inputs in accordance with fair value procedures and are categorized as level 3 investments, as more fully described in Note 2 to the financial statements.
(6)Deemed to be an affiliate of the fund. See Affiliated Company Transactions Note 7 and Basis For Consolidation Note 13 to the financial statements for further disclosure.
(7)Rate indicated is the current yield as of May 31, 2021.

See accompanying Notes to Financial Statements.
 
26Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
NTG Schedule of Investments (unaudited)
May 31, 2021
 

      Shares/Units    Fair Value
Master Limited Partnerships — 84.2%(1)
Crude Oil Pipelines — 15.2%(1)
United States — 15.2%(1)
BP Midstream Partners LP522,549$7,388,843
NuStar Energy L.P.375,1556,884,094
Plains All American Pipeline, L.P.1,452,13915,291,024
Shell Midstream Partners, L.P.125,4051,810,848
31,374,809
Natural Gas/Natural Gas Liquids Pipelines — 29.9%(1)
United States — 29.9%(1)
DCP Midstream, LP646,77116,279,226
Energy Transfer LP1,857,64718,390,705
Enterprise Products Partners L.P.1,146,30127,064,167
61,734,098
Natural Gas Gathering/Processing — 6.9%(1)
United States — 6.9%(1)
Crestwood Equity Partners LP28,940829,420
Western Midstream Partners, LP673,97213,465,961
14,295,381
Renewable Infrastructure — 6.9%(1)
United States — 6.9%(1)
Enviva Partners LP50,6402,476,296
NextEra Energy Partners, LP172,09911,766,409
14,242,705
Refined Product Pipelines — 25.3%(1)
United States — 25.3%(1)
Magellan Midstream Partners, L.P.502,67224,776,703
MPLX LP894,03025,596,079
Phillips 66 Partners LP41,0221,644,162
52,016,944
Total Master Limited Partnerships
       (Cost $173,109,237)173,663,937
 
Common Stock — 45.6%(1)
Renewable Infrastructure — 3.7%(1)
United States — 3.7%(1)
Atlantica Sustainable Infrastructure PLC162,0505,890,518
Clearway Energy Inc.66,7781,791,654
7,682,172
Energy Technology — 3.3%(1)
United States — 3.3%(1)
Bluescape Opportunities
       Acquisition Corp.(2)48,144468,922
Climate Real Impact Solutions II
       Acquisition Corp. Class A(2)32,246318,268
ECP Environmental Growth
       Opportunities Corp. Class A(2)45,814446,228
European Sustainable Growth
       Acquisition Corp.(2)32,402313,003
First Reserve Sustainable Growth Co.(2)37,785368,404
Flame Acquisition Corp.(2)64,400622,104
Kensington Capital Acquisition
       Corp. Class A(2)15,221150,079
Northern Genesis Acquisition Corp. I(2)42,595417,431
Power & Digital Infrastructure
       Acquisition Corp.(2)53,450522,741
Queen's Gambit Growth
       Capital Class A(2)32,519314,459
RMG Acquisition Corp III(2)38,232373,909
Rice Acquisition Corp.(2)48,419762,115
Spartan Acquisition Corp III(2)45,814448,061
Sustainable Development
       Acquisition I Corp.(2)55,310534,848
Warrior Technologies
       Acquisition Co. Class A(2)61,656597,755
6,658,327
Natural Gas/Natural Gas Liquids Pipelines — 30.8%(1)
United States — 30.8%(1)
Kinder Morgan Inc.941,35517,264,451
ONEOK, Inc.365,26319,263,971
The Williams Companies, Inc.1,027,60327,067,063
63,595,485
Natural Gas Gathering/Processing — 7.8%(1)
United States — 7.8%(1)
Hess Midstream Partners LP45,1461,149,869
Targa Resources Corp.385,18514,968,289
16,118,158
Total Common Stock
       (Cost $67,188,654)94,054,142
      
Special Purpose Acquisition Company Units — 1.8%(1)
Energy Technology — 1.8%(1)
United States — 1.8%(1)
ArcLight Clean Transition Corp. II(2)38,216382,924
Decarbonization Plus Acquisition III(2)62,340623,400
ESM Acquisition Corp.(2)76,422761,545
Northern Genesis Acquisition Unit III(2)53,434532,203
Peridot Acquisition Corp II(2)34,432343,631
Tech and Energy Transition Corp.(2)106,4241,064,240
Total Special Purpose
       Acquisition Company
       (Cost $3,713,825)3,707,943

See accompanying Notes to Financial Statements.
 
Tortoise27



 
 
 
 
NTG Schedule of Investments (unaudited) (continued)
May 31, 2021
 

Principal Amount/     
     Shares/UnitsFair Value
Preferred Stock — 5.3%(1) 
Natural Gas/Natural Gas Liquids Pipelines — 4.4%(1)
United States — 4.4%(1)
Altus Midstream Company, 7.000%(3)(4)7,456$9,083,258
Renewable Infrastructure — 0.9%(1)
United States — 0.9%(1)
NextEra Energy, Inc.39,0951,891,416
Total Preferred Stock
       (Cost $9,355,822)10,974,674
 
Corporate Bonds — 1.2%(1)
Natural Gas Gathering/Processing — 1.2%(1)
United States — 1.2%(1)
Enlink Midstream Partners,
       6.000%, Perpetual
Total Corporate Bonds
       (Cost $2,771,988)$3,400,0002,562,648
 
Special Purpose Acquisition Company Warrants — 0.2%(1)
Energy Technology — 0.2%(1)
United States — 0.2%(1)
Bluescape Opportunities
       Acquisition Corp. Warrant(2)49,07267,721
Climate Change Crisis Real
       Impact Warrant(2)47,522108,758
Climate Real Impact Solutions II
       Acquisition Corp. Warrant(2)12,36613,549
ECP Environmental Growth
       Opportunities Corp. Warrant(2)11,45410,382
European Sustainable Growth
       Acquisition Corp. Warrant(2)33,36926,698
First Reserve Sustainable Growth Co
       Warrant(2)18,89317,003
Flame Acquisition Corp. Warrant(2)32,20024,164
Kensington Capital Acquisition
       Corp. Warrant(2)3,8055,555
Northern Genesis Acquisition
       Corp I Warrant(2)14,19818,812
Power & Digital Infrastructure
       Acquisition Corp. Warrant(2)13,36313,095
Qell Acquisition Corp. Warrant(2)21,20829,161
Queen's Gambit Growth Capital
       Warrant(2)20,72716,602
RMG Acquisition Corp III Warrant(2)7,6467,149
Spartan Acquisition Corp III Warrant(2)11,45410,996
Sustainable Development
       Acquisition Warrant(2)19,11614,345
Warrior Technologies
Acquisition Co Warrant(2)45,34326,294
Total Warrants
       (Cost $459,187)410,284
       
  Shares/Units 
Short-Term Investment — 0.2%(1)
United States Investment Company — 0.2%(1)
First American Government Obligations Fund,
       0.03%(5) (Cost $319,303)         319,303319,303
 
Total Investments — 138.5%(1)
       (Cost $256,918,016)285,692,931
Other Assets and Liabilities — (3.6%)(1)(7,514,125)
Credit Facility Borrowings — (25.5.)%(1)(52,500,000)
Senior Notes — (3.5)%(1)(7,149,732)
Mandatory Redeemable Preferred Stock
       at Liquidation Value — (5.9)%(1)(12,218,925)
Total Net Assets Applicable to
     Common Stockholders — 100.0%(1)$206,310,149

(1)

Calculated as a percentage of net assets applicable to common stockholders.

(2)

Non-income producing security.

(3)

Restricted securities have a total fair value of $9,083,258, which represents 4.4% of net assets. See Note 6 to the financial statements for further disclosure.

(4)

Securities have been valued by using significant unobservable inputs in accordance with fair value procedures and are categorized as level 3 investments, as more fully described in Note 2 to the financial statements.

(5)

Rate indicated is the current yield as of May 31, 2021.


See accompanying Notes to Financial Statements.
 
28Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
TTP Schedule of Investments (unaudited)
May 31, 2021
 

    Shares/Units    Fair Value
Common Stock — 93.0%(1)
Crude Oil Pipelines — 28.6%(1)
Canada — 21.5%(1)
Gibson Energy Inc50,815$1,004,059
Enbridge Inc.197,3007,592,104
Inter Pipeline Ltd.93,2571,364,831
Pembina Pipeline Corporation130,6374,222,818
United States — 7.1%(1)
Plains GP Holdings, L.P.431,6564,709,367
18,893,179
Renewable Infrastructure — 8.6%(1)
United States — 8.6%(1)
Clearway Energy Inc.22,000590,260
NextEra Energy Partners, LP29,0301,984,781
Sempra Energy23,0173,118,573
 5,693,614
Energy Technology — 3.0%(1)
United States — 3.0%(1)
Bluescape Opportunities
       Acquisition Corp.(2)14,526141,483
Climate Real Impact Solutions II
       Acquisition Corp. Class A(2)8,87587,596
ECP Environmental Growth
       Opportunities Corp. Class A(2)13,220128,763
European Sustainable Growth
       Acquisition Corp.(2)9,77594,427
First Reserve Sustainable Growth Co.(2)11,098108,206
Flame Acquisition Corp.(2)19,600189,336
Kensington Capital Acquisition
       Corp. Class A(2)4,47144,084
Northern Genesis Acquisition Corp. I(2)13,157128,939
Power & Digital Infrastructure
       Acquisition Corp.(2)15,426150,866
Queen's Gambit Growth
       Capital Class A(2)8,96886,721
RMG Acquisition Corp. III(2)11,012107,697
Rice Acquisition Corp.(2)14,797232,905
Spartan Acquisition Corp. III(2)13,220129,292
Sustainable Development
       Acquisition I Corp.(2)15,931154,053
Warrior Technologies
       Acquisition Co. Class A(2)18,108175,557
1,959,925
Natural Gas Gathering/Processing — 9.1%(1)
United States — 9.1%(1)
Antero Midstream Corporation101,317972,643
Equitrans Midstream Corporation307,3432,532,506
Hess Midstream Partners LP78,7842,006,628
Rattler Midstream LP13137
Targa Resources Corp.11,747456,488
5,968,402
Natural Gas/Natural Gas Liquids Pipelines — 43.7%(1)
Canada — 11.5%(1)
Keyera Corp.73,1521,814,191
TC Energy Corporation113,6235,801,590
United States — 32.2%(1)
Kinder Morgan Inc.389,5087,143,577
ONEOK, Inc.108,8425,740,327
The Williams Companies, Inc.317,8498,372,143
28,871,828
Oil and Gas Production — 0.0%(1)
United States — 0.0%(1)
Chevron Corporation0(6) 26
Total Common Stock
       (Cost $61,715,342)61,386,974
 
Master Limited Partnerships — 32.4%(1)
Crude Oil Pipelines — 4.6%(1)
United States — 4.6%(1)
BP Midstream Partners LP14,840209,838
NuStar Energy L.P.57,0701,047,235
Shell Midstream Partners, L.P.124,8251,802,473
3,059,546
Natural Gas/Natural Gas Liquids Pipelines — 12.8%(1)
United States — 12.8%(1)
DCP Midstream, LP57,3581,443,701
Energy Transfer LP317,7873,146,091
Enterprise Products Partners L.P.163,2363,854,002
8,443,794
Natural Gas Gathering/Processing — 2.4%(1)
United States — 2.4%(1)
Western Midstream Partners, LP79,7321,593,045
Other — 0.2%(1)
United States — 0.2%(1)
Westlake Chemical Partners LP4,940133,923
Refined Product Pipelines — 12.4%(1)
United States — 12.4%(1)
Holly Energy Partners, L.P.41,962892,532
Magellan Midstream Partners, L.P.56,6302,791,293
MPLX LP134,2713,844,179
Phillips 66 Partners LP16,282652,583
8,180,587
Total Master Limited Partnerships
       (Cost $19,620,082)21,410,895

See accompanying Notes to Financial Statements.
 
Tortoise29



 
 
 
 
TTP Schedule of Investments (unaudited) (continued)
May 31, 2021
 

     Shares/Units    Fair Value
Special Purpose Acquisition Company Unit — 1.7%(1) 
Energy Technology — 1.7%(1)
United States — 1.7%(1)
ArcLight Clean Transition Corp. II(2)11,279$113,016
Decarbonization Plus Acquisition III(2)18,400184,000
ESM Acquisition Corp.(2)22,377222,987
Northern Genesis Acquisition Unit III(2)15,772157,089
Peridot Acquisition Corp. II(2)10,082100,618
Tech and Energy Transition Corp.(2)31,409314,090
Total Special Purpose
       Acquisition Company
       (Cost $1,093,525)1,091,800
 
Preferred Stock — 1.0%(1)
Natural Gas/Natural Gas Liquids Pipelines — 1.0%(1)
United States — 1.0%(1)
Altus Midstream Company, 7.000%(3)(4)554674,837
Total Preferred Stock
       (Cost $553,926)674,837
 
Special Purpose Acquisition Company Warrants — 0.2%(1)
Energy Technology — 0.2%(1)
United States — 0.2%(1)
Bluescape Opportunities
       Acquisition Corp. Warrant(2)14,86120,508
Climate Change Crisis Real
       Impact Warrant(2)14,89534,089
Climate Real Impact Solutions II
       Acquisition Corp. Warrant(2)3,5513,891
ECP Environmental Growth
       Opportunities Corp. Warrant(2)3,3052,996
European Sustainable Growth
       Acquisition Corp. Warrant(2)9,5867,670
First Reserve Sustainable
       Growth Co. Warrant(2)5,5484,993
Flame Acquisition Corp. Warrant(2)9,8007,354
Kensington Capital Acquisition
       Corp. Warrant(2)1,1171,631
Northern Genesis Acquisition
       Corp. I Warrant(2)4,3865,811
Power & Digital Infrastructure
       Acquisition Corp. Warrant(2)3,8573,780
Qell Acquisition Corp. Warrant(2)6,6489,141
Queen's Gambit Growth Capital
       Warrant(2)5,9474,764
RMG Acquisition Corp. III Warrant(2)2,2032,061
Spartan Acquisition Corp. III
       Warrant(2)3,3053,173
Sustainable Development
       Acquisition Warrant(2)5,5064,132
Warrior Technologies
       Acquisition Co. Warrant(2)13,3177,723
Total Warrants
       (Cost $137,823)123,717
     
Short-Term Investment — 2.5%(1)
United States Investment Company — 2.5%(1)
Invesco Government & Agency Portfolio — Institutional Class,
     0.03%(5) (Cost $1,676,105)1,676,1051,676,105
  
Total Investments — 130.8%(1)
     (Cost $84,796,803)86,364,328
Other Assets and Liabilities — 0.3%(1)216,344
Senior Notes — (21.9)%(1)(14,457,143)
Mandatory Redeemable Preferred Stock
       at Liquidation Value — (9.2)%(1)(6,100,000)
Total Net Assets Applicable to
     Common Stockholders — 100.0%(1)$66,023,529

(1)Calculated as a percentage of net assets applicable to common stockholders.
(2)Non-income producing security.
(3)Restricted securities have a total fair value of $674,837, which represents 1.0% of net assets. See Note 6 to the financial statements for further disclosure.
(4)Securities have been valued by using significant unobservable inputs in accordance with fair value procedures and are categorized as level 3 investments, as more fully described in Note 2 to the financial statements.
(5)Rate indicated is the current yield as of May 31, 2021.
(6)Represents fractional shares, less than 1 whole unit.

See accompanying Notes to Financial Statements.
 
30Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
NDP Schedule of Investments (unaudited)
May 31, 2021
 

     Shares/Units     Fair Value
Common Stock — 95.1%(1)
Crude Oil Pipelines — 4.4%(1)
Canada — 4.4%(1)
Enbridge Inc.48,399$1,862,393
Renewable Infrastructure — 7.1%(1)
United States — 7.1%(1)
Clearway Energy Inc.16,822451,334
NextEra Energy, Inc.21,1121,545,821
Sempra Energy7,5001,016,175
3,013,330
Energy Technology — 2.5%(1)
United States — 2.5%(1)
Bluescape Opportunities
       Acquisition Corp.(2)7,28670,966
Climate Real Impact Solutions II
       Acquisition Corp. Class A(2)4,55744,977
ECP Environmental Growth
       Opportunities Corp. Class A(2)7,22870,401
European Sustainable Growth
       Acquisition Corp.(2)5,05848,860
First Reserve Sustainable Growth Co.(2)6,23960,830
Flame Acquisition Corp.(2)11,100107,226
Kensington Capital Acquisition
       Corp. Class A(2)2,51424,788
Northern Genesis Acquisition Corp. I(2)6,81566,787
Power & Digital Infrastructure
       Acquisition Corp.(2)8,43282,465
Queen's Gambit Growth
       Capital Class A(2)5,10149,327
RMG Acquisition Corp III(2)5,91457,839
Rice Acquisition Corp.(2)7,593119,514
Spartan Acquisition Corp III(2)7,22870,690
Sustainable Development
       Acquisition I Corp.(2)8,55582,727
Warrior Technologies
       Acquisition Co. Class A(2)10,18098,695
1,056,092
Natural Gas/Natural Gas Liquids Pipelines — 22.4%(1)
Canada — 3.4%(1)
TC Energy Corporation28,7481,467,873
United States — 19.0%(1)
Cheniere Energy, Inc.(2)44,3983,769,390
Kinder Morgan Inc.113,0642,073,594
The Williams Companies, Inc.84,9462,237,478
9,548,335
Oil and Gas Production — 58.7%(1)
United States — 58.7%(1)
BP PLC39,2831,030,393
Cabot Oil & Gas Corporation113,4901,861,236
Chevron Corporation32,4833,371,418
ConocoPhillips83,4804,653,175
Diamondback Energy, Inc.39,7173,180,140
EOG Resources, Inc.40,2003,229,668
EQT Corporation(2)101,8862,127,380
Pioneer Natural Resources Company27,1644,134,089
Royal Dutch Shell PLC36,8001,420,848
25,008,347
Total Common Stock
       (Cost $33,560,250)40,488,497
 
Master Limited Partnerships — 10.8%(1)
Crude Oil Pipelines — 1.0%(1)
United States — 1.0%(1)
Plains All American Pipeline, L.P.39,700418,041
Natural Gas/Natural Gas Liquids Pipelines — 7.6%(1)
United States — 7.6%(1)
Energy Transfer LP116,9001,157,310
Enterprise Products Partners L.P.88,3002,084,763
3,242,073
Refined Product Pipelines — 2.2%(1)
United States — 2.2%(1)
Magellan Midstream Partners, L.P.19,323952,431
Total Master Limited Partnerships
       (Cost $4,488,990)4,612,545

See accompanying Notes to Financial Statements.
 
Tortoise31



 
 
  
 
NDP Schedule of Investments (unaudited) (continued)
May 31, 2021
 

Shares/UnitsFair Value
Special Purpose Acquisition Company Unit — 1.5%(1)             
Energy Technology — 1.5%(1)
United States — 1.5%(1)
ArcLight Clean Transition Corp. II(2)6,401$64,138
Decarbonization Plus Acquisition III(2)10,442104,420
ESM Acquisition Corp.(2)12,883128,379
Northern Genesis Acquisition Unit III(2)8,95089,142
Peridot Acquisition Corp II(2)5,80457,924
Tech and Energy Transition Corp.(2)17,824178,240
Total Special Purpose
       Acquisition Company
       (Cost $623,233)622,243
 
Special Purpose Acquisition Company Warrants — 0.2%(1)   
Energy Technology — 0.2%(1)
United States — 0.2%(1)
Arclight Clean Transition
       Corp. Warrant(2)13
Bluescape Opportunities
       Acquisition Corp. Warrant(2)7,57810,457
Climate Change Crisis Real
       Impact Warrant(2)7,73617,703
Climate Real Impact Solutions II
       Acquisition Corp. Warrant(2)1,9432,129
ECP Environmental Growth
       Opportunities Corp. Warrant(2)1,8061,638
European Sustainable Growth
       Acquisition Corp. Warrant(2)5,2114,170
First Reserve Sustainable
       Growth Co Warrant(2)3,1192,808
Flame Acquisition Corp. Warrant(2)5,5494,165
Kensington Capital Acquisition
       Corp. Warrant(2)628918
Northern Genesis Acquisition
       Corp I Warrant(2)2,2713,010
Peridot Acquisition Corp. Warrant(2)11
Power & Digital Infrastructure
       Acquisition Corp. Warrant(2)2,1082,066
Qell Acquisition Corp. Warrant(2)3,4524,747
Queen's Gambit Growth
       Capital Warrant(2)3,2032,566
RMG Acquisition Corp III Warrant(2)1,1831,106
Spartan Acquisition Corp III Warrant(2)1,8071,735
Sustainable Development
       Acquisition Warrant(2)2,9572,219
Warrior Technologies
       Acquisition Co Warrant(2)7,4874,342
Total Warrants
       (Cost $73,313)65,783
       
Short—Term Investment — 1.1%(1) 
United States Investment Company — 1.1%(1) 
Invesco Government & Agency Portfolio — Institutional Class,    
       0.03%(3) (Cost $456,511)456,511456,511 
 
Total Investments — 108.7%(1)
       (Cost $39,202,297)46,245,579
Other Assets and Liabilities — (0.2)%(1) (85,481)
Credit Facility Borrowings — (8.5)%(1) (3,600,000)
Total Net Assets Applicable
       to Common Stockholders — 100.0%(1)$42,560,098 

(1)Calculated as a percentage of net assets applicable to common stockholders.
(2)Non-income producing security.
(3)Rate indicated is the current yield as of May 31, 2021.

32Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
TPZ Schedule of Investments (unaudited)
May 31, 2021
 

Principal Amount/
Shares/UnitsFair Value
Corporate Bonds — 62.7%(1)          
Crude Oil Pipelines — 7.1%(1)
Canada — 7.1%(1)
Enbridge Inc.,
       5.500%, 07/15/2077$            7,042,000$7,356,777
Natural Gas/Natural Gas Liquids Pipelines — 20.1%(1)
United States — 20.1%(1)
Cheniere Corp.,
       7.000%, 06/30/20244,000,0004,597,194
Cheniere Corp.,
       5.875%, 03/31/20252,000,0002,298,404
ONEOK, Inc.,
       4.250%, 02/01/20224,500,0004,570,913
ONEOK, Inc.,
       7.500%, 09/01/20232,000,0002,268,400
Rockies Express Pipeline LLC,
       4.950%, 07/15/2029(2)3,000,0003,075,270
Ruby Pipeline, LLC,
       6.000%, 04/01/2022(2)863,636764,560
Tallgrass Energy LP,
       5.500%, 01/15/2028(2)3,250,0003,274,375
20,849,116
Natural Gas Gathering/Processing — 23.1%(1) 
United States — 23.1%(1)
Antero Midstream Partners LP,
       5.750%, 03/01/2027(2)2,000,0002,060,440
Blue Racer Midstream, LLC,
       6.625%, 07/15/2026(2)5,900,0006,158,125
EnLink Midstream LLC,
       5.375%, 06/01/20293,000,0003,022,500
Hess Corporation,
       5.625%, 02/15/2026(2)4,160,0004,312,506
The Williams Companies, Inc.,
       7.875%, 09/01/20215,000,0005,089,349
The Williams Companies, Inc.,
       4.550%, 06/24/20243,000,0003,320,057
23,962,977
Renewables and Power Infrastructure — 6.8%(1)  
United States — 6.8%(1)
Duquesne Light Holdings, Inc.,
       5.900%, 12/01/2021(2)2,000,0002,050,081
NextEra Energy, Inc.,
       4.800%, 12/01/20774,500,0005,023,551
7,073,632
Refined Product Pipelines — 3.7%(1)
United States — 3.7%(1)
Buckeye Partners,
       5.600%, 10/15/20442,000,0001,923,160
Buckeye Partners,
       5.850%, 11/15/20432,000,0001,940,000
3,863,160
Other — 1.9%(1)
United States — 1.9%(1)
New Fortress Energy Inc.,
       6.500%, 9/30/2026(2)2,000,0002,012,500
Total Corporate Bonds
       (Cost $61,285,928)65,118,162
     
Master Limited Partnerships
     and Related Companies — 30.4%(1)  
Crude Oil Pipelines — 4.4%(1)
United States — 4.4%(1)
BP Midstream Partners LP21,729307,248
NuStar Energy L.P.128,5342,358,599
PBF Logistics LP49,521805,211
Shell Midstream Partners, L.P.77,3651,117,151
4,588,209
Renewable Infrastructure — 0.5%(1)
United States — 0.5%(1)
NextEra Energy Partners, LP8,013547,849
     
Natural Gas/Natural Gas Liquids Pipelines — 10.4%(1)  
United States — 10.4%(1)
DCP Midstream, LP110,0912,770,990
Energy Transfer LP302,0352,990,147
Enterprise Products Partners L.P.213,6835,045,056
10,806,193
Natural Gas Gathering/Processing — 3.0%(1)  
United States — 3.0%(1)
Western Midstream Partners, LP154,4343,085,591
     
Other — 0.2%(1)
United States — 0.2%(1)
Westlake Chemical Partners LP8,074218,886
     
Refined Product Pipelines — 11.9%(1)
United States — 11.9%(1)
Holly Energy Partners, L.P.93,9911,999,189
Magellan Midstream Partners, L.P.78,3323,860,984
MPLX LP226,8046,493,399
     12,353,572
Total Master Limited Partnerships
       and Related Companies
       (Cost $31,074,797)31,600,300

See accompanying Notes to Financial Statements.
 
Tortoise33



 
 
 
 
TPZ Schedule of Investments (unaudited) (continued)
May 31, 2021
 

Principal Amount/
Shares/UnitsFair Value
Common Stock — 25.1%(1)           
Crude Oil Pipelines — 5.3%(1) 
United States — 5.3%(1) 
Enbridge Inc.53,741 $     2,067,954
Plains GP Holdings, L.P.310,230 3,384,609
 5,452,563
Renewable Infrastructure — 2.2%(1)  
United States — 2.2%(1) 
Sempra Energy16,927 2,293,438
     
Energy Technology — 3.2%(1) 
United States — 3.2%(1) 
Bluescape Opportunities 
       Acquisition Corp.(4)26,379 256,931
Climate Real Impact Solutions II 
       Acquisition Corp. Class A(4)13,794 136,147
ECP Environmental Growth 
       Opportunities Corp. Class A(4)21,814 212,468
European Sustainable 
       Growth Acquisition Corp.(4)16,201 156,502
First Reserve Sustainable 
       Growth Co.(4)18,018 175,676
Flame Acquisition Corp.(4)30,500 294,630
Kensington Capital Acquisition 
       Corp. Class A(4)7,259 71,574
Northern Genesis Acquisition Corp. I(4)23,793 233,171
Power & Digital Infrastructure 
       Acquisition Corp.(4)25,450 248,901
Queen's Gambit Growth 
       Capital Class A(4)13,871 134,133
RMG Acquisition Corp. III(4)18,354 179,502
Rice Acquisition Corp.(4)26,704 420,321
Spartan Acquisition Corp. III(4)21,814 213,341
Sustainable Development 
       Acquisition I Corp.(4)26,553 256,768
Warrior Technologies 
       Acquisition Co. Class A(4)29,399 285,023
 3,275,088
Natural Gas/Natural Gas Liquids Pipelines — 9.9%(1)  
Canada — 2.4%(1) 
TC Energy Corporation48,667 2,484,937
United States — 7.5%(1) 
Kinder Morgan Inc.214,709 3,937,763
ONEOK, Inc.5,606 295,660
The Williams Companies, Inc.135,347 3,565,040
 10,283,400
Natural Gas Gathering/Processing — 2.9%(1) 
United States — 2.9%(1) 
EnLink Midstream LLC90,965 $443,909
Equitrans Midstream Corporation108,596 894,831
Hess Midstream LP66,901 1,703,968
 3,042,708
Oil and Gas Production — 0.0%(1) 
United States — 0.0%(1) 
Chevron Corporation0(6) 12
     
Renewables and Power Infrastructure — 1.7%(1)  
United States — 1.7%(1) 
Atlantica Sustainable 
       Infrastructure PLC16,523 600,611
DTE Energy Company8,116 1,119,927
 1,720,538
Total Common Stock 
       (Cost $25,124,851) 26,067,747
     
Preferred Stock — 0.6%(1) 
Natural Gas Liquids Pipelines — 0.6%(1) 
United States — 0.6%(1) 
Altus Midstream Company, 7.000%(2)(3)483 588,551
Total Preferred Stock 
       (Cost $483,100) 588,551
     
Special Purpose Acquisition Company Unit — 1.6%(1)    
Energy Technology — 1.6%(1) 
United States — 1.6%(1) 
ArcLight Clean Transition Corp. II(4)17,517 175,520
Decarbonization Plus Acquisition III(4)28,574 285,740
ESM Acquisition Corp.(4)35,206 350,828
Northern Genesis Acquisition Unit III(4)24,492 243,941
Peridot Acquisition Corp. II(4)15,862 158,303
Tech and Energy Transition Corp.(4)48,779 487,790
Total Special Purpose 
       Acquisition Company 
       (Cost $1,704,828) 1,702,122

See accompanying Notes to Financial Statements.
 
34Tortoise



 
 

2021 Semi-Annual Report | May 31, 2021

 
TPZ Schedule of Investments (unaudited) (continued)
May 31, 2021
 

Principal Amount/
Shares/UnitsFair Value
    
Special Purpose Acquisition Company Warrants — 0.2%(1)             
Energy Technology — 0.2%(1)
United States — 0.2%(1)
Bluescape Opportunities
       Acquisition Corp. Warrant(4)26,933$37,168
Climate Change Crisis Real
       Impact Warrant(4)26,67761,053
Climate Real Impact Solutions II
       Acquisition Corp. Warrant(4)5,8336,391
ECP Environmental Growth
       Opportunities Corp. Warrant(4)5,4534,943
European Sustainable Growth
       Acquisition Corp. Warrant(4)15,54712,439
First Reserve Sustainable
       Growth Co Warrant(4)9,0098,108
Flame Acquisition Corp. Warrant(4)15,25011,444
Kensington Capital Acquisition
       Corp. Warrant(4)1,8152,650
Northern Genesis Acquisition
       Corp I Warrant(4)7,93110,509
Power & Digital Infrastructure
       Acquisition Corp. Warrant(4)6,3636,235
Qell Acquisition Corp. Warrant(4)11,90516,370
Queen's Gambit Growth
       Capital Warrant(4)9,6087,696
RMG Acquisition Corp III Warrant(4)3,6713,433
Spartan Acquisition Corp III Warrant(4)5,4535,235
Sustainable Development
       Acquisition Warrant(4)9,1776,886
Warrior Technologies
       Acquisition Co Warrant(4)21,62112,538
Total Warrants
       (Cost $237,008)213,098
  
Short-Term Investment — 1.7%(1) 
United States Investment Company — 1.7%(1) 
Invesco Government & Agency Portfolio — Institutional Class,   
       0.03%(4) (Cost $1,800,717)1,800,7171,800,717
    
Total Investments — 122.3%(1) 
     (Cost $121,711,229)127,090,697
Other Assets and Liabilities — 0.8%(1) 787,760
Credit Facility Borrowings — (23.1)%(1) (24,000,000)
       
Total Net Assets Applicable to 
     Common Stockholders — 100.0%(1) $103,878,457

(1)

Calculated as a percentage of net assets applicable to common stockholders.

(2)

Restricted securities have a total fair value of $24,296,408 which represents 23.4% of net assets. See Note 6 to the financial statements for further disclosure.

(3)

Securities have been valued by using significant unobservable inputs in accordance with fair value procedures and are categorized as level 3 investments, as more fully described in Note 2 to the financial statements.

(4)

Non-income producing security.

(5)

Rate indicated is the current yield as of May 31, 2021.

(6)

Represents fractional shares, less than 1 whole unit.


Tortoise35



 
 
 
 
TEAF Consolidated Schedule of Investments (unaudited)
May 31, 2021
 

Principal Amount/
Shares/UnitsFair Value
   
Common Stock — 50.0%(1)          
Natural Gas/Natural Gas Liquids Pipelines — 3.9%(1) 
Australia — 1.1%(1)
APA Group(2)362,935$2,576,825
United States — 2.8%(1)
Cheniere Energy Inc.(2)(3)(4)35,5003,013,950
The Williams Companies, Inc.(2)127,7003,363,618
 8,954,393
Natural Gas Gathering/Processing — 1.8%(1) 
United States — 1.8%(1)
Targa Resources Corp.(2)(3)106,1004,123,046
Other — 5.1%(1)
Australia — 1.8%(1)
Atlas Arteria Ltd.(2)894,3484,219,436
Great Britain — 1.8%(1)
Greencoat UK Wind PLC2,234,1214,185,113
Spain — 1.4%(1)
Ferrovial SA(2)108,0733,159,004
11,563,553
Power — 28.5%(1)
Australia — 2.2%(1)
Spark Infrastructure Group(2)3,045,5065,118,142
Canada — 2.1%(1)
Algonquin Power & Utilities Corp(2)300,7014,592,470
Brookfield Renewable Corporation7,137304,893
Italy — 5.8%(1)
Enel SpA(3)718,7307,136,991
ENAV SpA(2)577,0552,688,101
Terna SpA(2)433,6003,315,292
Portugal — 3.3%(1)
EDP — Energias de Portugal SA(2)(3)1,284,5397,484,426
Spain — 6.2%(1)
Endesa SA(3)270,0687,788,776
Iberdrola SA(3)452,5046,238,181
United States — 3.4%(1)
Covanta Holding Corp(2)219,9543,257,519
Edison International(2)78,8944,407,808
United Kingdom — 5.5%(1)
National Grid PLC(2)380,8855,076,665
SSE PLC(2)(3)339,4547,428,341
64,837,605
Renewables — 5.2%(1)
Canada — 5.2%(1)
Brookfield Renewable Corporation(2)27,0631,155,954
Innergex Renewable Energy Inc(2)265,2304,445,931
TransAlta Renewables Inc(2)382,3096,107,830
11,709,715
    
Solar — 1.1%(1)
United States — 1.1%(1)
Sunnova Energy Intl Inc.(2)82,7662,416,767
Transportation / Storage — 1.8%(1)
Hong Kong — 1.8%(1)
China Suntien Green Energy Corp.9,877,9794,136,560
Energy Technology — 2.6%(1)
United States — 2.6%(1)
Bluescape Opportunities
       Acquisition Corp.(4)28,665279,197
ECP Environmental Growth
       Opportunities Corp. Class A(4)46,810455,929
ESM Acquisition Corp.(4)72,261720,081
European Sustainable
       Growth Acquisition Corp.(4)32,450313,467
First Reserve Sustainable Growth Co.(4)38,963379,889
Kensington Capital Acquisition
       Corp. Class A(4)15,696154,762
Northern Genesis Acquisition Corp. I(4)25,587250,753
Power & Digital Infrastructure
       Acquisition Corp.(4)54,610534,086
Queen's Gambit Growth
       Capital Class A(4)30,174291,783
Rice Acquisition Corp.(4)28,627450,589
RMG Acquisition Corp III(4)39,420385,528
Spartan Acquisition Corp III(4)46,810457,802
Sustainable Development
       Acquisition I Corp.(4)57,028551,461
Warrior Technologies
       Acquisition Co. Class A(4)63,575616,360
5,841,687
Total Common Stock
       (Cost $101,915,374)113,583,326
    
Master Limited Partnerships — 7.7%(1) 
Gathering and Processing — 0.8%(1)
United States — 0.8%(1)
Crestwood Equity Partners LP65,4311,875,252
Natural Gas/Natural Gas Liquids Pipelines — 1.3%(1) 
United States — 1.3%(1)
Enterprise Products Partners L.P.(2)(3)128,4003,031,524
Refined Product Pipelines — 2.6%(1)
United States — 2.6%(1)
MPLX LP(2)(3)210,0006,012,300
Renewables — 3.0%(1)
Canada — 0.8%(1)
Brookfield Renewable Partners LP(2)45,1471,793,846
United States — 2.2%(1)
Enviva Partners LP(2)97,4854,767,016
6,560,862
Total Master Limited Partnerships
       (Cost $13,639,921)17,479,938

See accompanying Notes to Financial Statements.
 
36Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
TEAF Consolidated Schedule of Investments (unaudited) (continued)
May 31, 2021
 

     Principal Amount/     
Shares/UnitsFair Value
Special Purpose Acquisition Company Units — 0.7%(1)
Energy Technology — 0.7%(1)
United States — 0.7%(1)
ArcLight Clean Transition Corp. II(4)35,443$355,139
Climate Real Impact Solutions II
       Acquisition Corp. Class A(4)31,014306,108
Tech and Energy Transition Corp.(4)98,700987,000
Special Purpose Acquisition
       Company Units
       (Cost $1,642,312)1,648,247
 
Corporate Bonds — 14.6%(1)
Education — 0.3%(1)
United States — 0.3%(1)
Village Charter School, Inc.,
       10.000%, 12/15/2021$800,000600,000
Healthcare — 3.9%(1)
United States — 3.9%(1)
Grace Commons Property,
       15.000%, 10/31/2023(5)1,825,0001,797,641
Grace Commons Property,
       8.000%, 10/31/2023(5)3,650,0003,604,342
315/333 West Dawson Associates SUB,
       11.000%, 01/31/20263,770,0003,584,814
8,986,797
Project Finance — 8.3%
United States — 8.3%(1)
C2NC Holdings,
       13.000%, 05/01/2024        10,715,00010,755,717
Dynamic BC Holdings LLC,
       13.500%, 04/01/20288,110,0008,107,097
18,862,814
Senior Living — 2.1%(1)
United States — 2.1%(1)
Drumlin Reserve Property LLC,
       16.000%, 10/02/2025(5)1,050,0001,054,759
Drumlin Reserve Property LLC,
       10.000%, 10/02/2025(5)1,705,3111,713,043
Realco Perry Hall MD LLC/OPCO,
       10.000% 10/01/2024(5)2,280,0002,019,271
4,787,073
Total Corporate Bond
       (Cost $33,729,742)33,236,684
 
Municipal Bonds — 10.1%(1)
California — 0.2%(1)
California ST Enterprise Dev A
       Rev Bonds,
       10.000%, 06/15/2030380,000366,321
Florida — 0.4%(1)
Florida Development Finance Corp,
       10.000%, 07/01/2025445,000378,250
Florida Development Finance Corp,
       10.000%, 02/15/2028595,000596,850
975,100
Ohio — 4.0%(1)
Southern Ohio Port Authority,
       13.000%, 12/01/20279,000,0009,130,410
Pennsylvania — 1.4%(1)
Philadelphia Authority for Industrial
       Development,
       10.000%, 06/15/20303,135,0003,141,866
Texas — 0.2%(1)
Pioneer Technology & Arts Academy
       Project — Series B,
       10.000%, 01/01/2026410,000364,900
Wisconsin — 3.9%(1)
Public Finance Authority,
       9.000%, 06/01/20298,925,0008,747,839
Public Finance Authority
       Educational Facility Revenue,
       12.000%, 01/01/2029185,000185,265
8,933,104
Total Municipal Bonds
       (Cost $23,051,501)22,911,701
 
Construction Note — 1.6%(1)
Renewables — 1.6%(1)
Bermuda — 1.6%(1)
Saturn Solar Bermuda 1 Ltd.,
       9.000%, 06/30/2021
       (Cost $3,778,904)(5)(6)3,510,0003,526,848
 
Preferred Stock — 6.5%(1)
Natural Gas/Natural Gas Liquids Pipelines — 4.5%(1)
United States — 4.5%(1)
Altus Midstream Company Preferred(5)4,2945,231,276
Enterprise Products Partners L.P.,
       7.250%(5)(6)5,0005,077,750
10,309,026
Renewables — 0.7%(1)
United States — 0.7%(1)
NextEra Energy Partners LP28,9001,607,996
Water Utilities — 1.3%(1)
United States — 1.3%(1)
Essential Utilities, Inc.49,1332,959,282
Total Preferred Stock
       (Cost $15,103,956)14,876,304

See accompanying Notes to Financial Statements.
 
Tortoise37



 
 
 
 
TEAF Consolidated Schedule of Investments (unaudited) (continued)
May 31, 2021
 

     Principal Amount/     
Shares/UnitsFair Value
Private Investments — 20.8%(1)
Natural Gas/Natural Gas Liquids Pipelines — 0.1%(1)  
Mexico Pacific Limited LLC(MPL)
       Series A (5)(6)88,889$237,334
Renewables — 20.7%(1)
United States — 20.7%(1)
Renewable Holdco, LLC(5)(6)(7)N/A15,041,038
Renewable Holdco I, LLC(5)(6)(7)N/A24,266,135
Rnewable Holdco II, LLC(5)(6)(7)N/A7,683,093
46,990,266
Total Private Investments
       (Cost $48,253,191)47,227,600
 
Special Purpose Acquisition Company Warrants — 0.3%(1)
Energy Technology — 0.3%(1)
United States — 0.3%(1)
Bluescape Opportunities
       Acquisition Corp. Warrant(4)28,88739,864
Climate Change Crisis
       Real Impact Warrant(2)(4)28,16964,467
Climate Real Impact Solutions II
       Acquisition Corp. Warrant(4)12,32913,509
ECP Environmental Growth
       Opportunities Corp. Warrant(4)11,70210,607
European Sustainable Growth
       Acquisition Corp. Warrant(4)32,42625,944
First Reserve Sustainable
       Growth Co Warrant(4)19,48217,533
Kensington Capital Acquisition
       Corp. Warrant(4)3,9245,729
Northern Genesis Acquisition
       Corp I Warrant(4)8,52911,301
Peridot Acquisition Corp II(4)32,556324,909
Power & Digital Infrastructure
       Acquisition Corp. Warrant(4)13,65313,379
Qell Acquisition Corp. Warrant(4)12,57117,285
Queen's Gambit Growth
       Capital Warrant(4)20,15316,142
RMG Acquisition Corp III Warrant(4)7,8847,372
Spartan Acquisition Corp III Warrant(4)11,70311,235
Sustainable Development
       Acquisition Warrant(4)19,71014,790
Warrior Technologies
       Acquisition Co Warrant(4)46,75527,113
Total Warrants
       (Cost $668,896)621,179
   
Short—Term Investment — 0.3%(1)  
United States Investment Company — 0.3%(1)  
First American Government Obligations Fund,  
       0.03%(8) (Cost $625,185)625,185$625,185
 
Total Investments — 112.6%(1)
     (Cost $242,408,983)255,737,012
Total Value of Options Written
       (Premiums received $132,572)(9) — (0.1)%(1)  (124,690)
Other Assets and Liabilities — 0.9%(1)  2,144,165
Credit Facility Borrowings — (13.4)%(1)  (30,400,000)
Total Net Assets Applicable to
     Common Stockholders — 100.0%(1)$227,356,487

(1)Calculated as a percentage of net assets applicable to common stockholders.
(2)All or a portion of the security is segregated as collateral for the margin borrowing facility. See Note 11 to the financial statements for further disclosure.
(3)All or a portion of the security represents cover for outstanding call option contracts written.
(4)Non-income producing security.
(5)Restricted securities have a total fair value of $71,252,530 which represents 31.3% of net assets. See Note 7 to the financial statements for further disclosure.
(6)Securities have been valued by using significant unobservable inputs in accordance with fair value procedures and are categorized as level 3 investments, as more fully described in Note 2 to the financial statements.
(7)Deemed to be an affiliate of the fund. See Affiliated Company Transactions Note 7 and Basis For Consolidation Note 13 to the financial statements for further disclosure.
(8)Rate indicated is the current yield as of May 31, 2021.
(9)See Schedule of Options Written and Derivative Financial Instruments Note 12 to the financial statements for further disclosure.

See accompanying Notes to Financial Statements.
 
38Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
Schedule of Interest Rate Swap Contracts
May 31, 2021
 

TYG
Fixed RateFloating Rate
MaturityNotionalPaid byReceived byUnrealized
Counterparty     Date     Amount     TYG     TYG     Depreciation
The Bank of Nova Scotia09/02/2021$10,000,0002.381%1-month U.S. Dollar LIBOR$(79,789)

Schedule of Options Written
May 31, 2021

TEAF
Call Options Written     Expiration Date     Strike Price      Contracts     Notional Value     Fair Value
SSE PLCJune 2021   £16.00    339$542,400$(60,136)
Enterprise Products Partners L.P.June 2021$25.501,2843,274,200(4,494)
Cheniere Energy Inc.June 2021$90.003553,195,000(12,425)
MPLX LPJune 2021$31.002,1006,510,000(10,500)
Targa Resources Corp.June 2021$41.001,0614,350,100(37,135)
Total Value of Call Options Written (Premiums received $132,572)$   17,871,700$(124,690)

See accompanying Notes to Financial Statements.
 
Tortoise39



 
 
 
 
Statements of Assets & Liabilities (unaudited)
May 31, 2021
 

Tortoise EnergyTortoise
     Infrastructure     Midstream Energy
Corp.(1)Fund, Inc.
Assets
       Investments in unaffiliated securities at fair value(2)$516,206,729$285,692,931
       Investments in affiliated securities at fair value(3)9,270,621
       Cash
       Receivable for investments sold2,772,8281,410,982
       Dividends, distributions and interest receivable from investments545,475353,486
       Tax reclaims receivable
       Income tax receivable52,052,354
       Prepaid expenses and other assets613,342228,327
              Total assets581,461,349    287,685,726
Liabilities
       Call options written, at fair value(4)
       Payable to Adviser806,522437,236
       Accrued directors' fees and expenses3,6923,469
       Payable for investments purchased4,489,8602,421,912
       Accrued expenses and other liabilities2,427,826618,998
       Unrealized depreciation of interest rate swap contracts79,789
       Current tax liability12,480,8216,055,914
       Deferred tax liability
       Credit facility borrowings31,900,00052,500,000
       Senior notes, net(5)87,847,8477,140,662
       Mandatory redeemable preferred stock, net(6)32,208,84912,197,386
              Total liabilities172,245,20681,375,577
              Net assets applicable to common stockholders$409,216,143$206,310,149
Net Assets Applicable to Common Stockholders Consist of:
       Capital stock, $0.001 par value per share$11,928$5,643
       Additional paid-in capital633,539,784559,894,508
       Total distributable loss(224,335,569)(353,590,002)
              Net assets applicable to common stockholders$409,216,143$206,310,149
Capital shares:
       Authorized100,000,000100,000,000
       Outstanding11,927,9035,642,991
       Net Asset Value per common share outstanding (net assets applicable
              to common stock, divided by common shares outstanding)$34.31$36.56
     
(1)Consolidated Statement of Assets and Liabilities
(See Note 13 to the financial statements for further disclosure).
(2)Investments in unaffiliated securities at cost$453,809,048$256,918,016
(3)Investments in affiliated securities at cost$51,206,470$
(4)Call options written, premiums received$$
(5)Deferred debt issuance and offering costs$78,820$9,071
(6)Deferred offering costs$91,151$21,539

See accompanying Notes to Financial Statements.
 
40Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
 
 
 

Tortoise PowerTortoise
Tortoise PipelineTortoise Energyand EnergyEssential Assets
& EnergyIndependenceInfrastructureIncome Term
Fund, Inc.     Fund, Inc.     Fund, Inc.     Fund (1)     
 
$     86,364,328$46,245,579$127,090,697$   208,746,746
46,990,266
295,042
1,505,720515,304754,39382,328
147,220132,6771,282,3742,971,080
17,1863,25015,953211,399
114,23733,35725,42813,840
88,148,69146,930,167129,168,845259,310,701
 
124,690
153,55883,436200,051587,683
1,0509911,6851,986
996,479509,969715,584
461,558175,673373,068419,135
420,720
3,600,00024,000,00030,400,000
14,433,456
6,079,061
22,125,1624,370,06925,290,38831,954,214
$66,023,529$42,560,098$103,878,457$227,356,487
 
$2,279$1,846$6,617$13,491
182,420,415222,058,506119,330,299254,885,154
(116,399,165)(179,500,254)(15,458,459)(27,542,158)
$66,023,529$42,560,098$103,878,457$227,356,487
 
100,000,000100,000,000100,000,000100,000,000
2,279,4331,845,9976,616,55713,491,127
 
$28.96$23.06$15.70$16.85
 
 
 
$84,796,803$39,202,297$121,711,229$196,155,792
$$$$46,253,191
$$$$132,572
$23,687$$$
$20,939$$$

See accompanying Notes to Financial Statements.
 
Tortoise41



 
 
 
 
Statements of Operations (unaudited)
Period from December 1, 2020 through May 31, 2021
 
 
Tortoise EnergyTortoise
InfrastructureMidstream Energy
     Corp.(1)     Fund, Inc.
Investment Income
       Distributions from master limited partnerships$11,970,318$6,297,154
       Dividends and distributions from common stock3,949,0062,488,776
       Dividends and distributions from preferred stock519,983348,249
       Dividends and distributions from affiliated investments1,000,000
       Less return of capital on distributions(2)(15,745,535)(8,282,335)
       Less foreign taxes withheld(6,323)(8,289)
       Net dividends and distributions from investments1,687,449843,555
       Interest income482,570277,369
              Total Investment Income2,170,0191,120,924
Operating Expenses
       Advisory fees2,218,6811,217,022
       Administrator fees92,19951,726
       Professional fees198,66697,145
       Directors fees39,86838,375
       Stockholder communication expenses65,53742,831
       Custodian fees and expenses9,3465,053
       Fund accounting fees28,87512,634
       Registration fees28,311(2,017)
       Stock transfer agent fees57,05813,855
       Franchise fees1,920
       Other operating expenses77,62331,713
              Total Operating Expenses2,818,0841,508,337
Leverage Expenses
       Interest expense1,860,127552,787
       Distributions to mandatory redeemable preferred stockholders675,478249,120
       Amortization of debt issuance costs42,3454,836
       Other leverage expenses94,313104,041
              Total Leverage Expenses2,672,263910,784
              Net Expenses5,490,3472,419,121
Net Investment Income (Loss), before Income Taxes(3,320,328)(1,298,197)
       Deferred tax benefit (expense)
Net Investment Income (Loss)(3,320,328)(1,298,197)

(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.
 
42Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
 
 
 
Tortoise PowerTortoise
Tortoise PipelineTortoise Energyand EnergyEssential Assets
& EnergyIndependenceInfrastructureIncome Term
Fund, Inc.     Fund, Inc.     Fund, Inc.     Fund (1)
                
$947,374$176,102$1,298,990$591,706
1,761,452591,446638,1962,194,181
34,40714,22928,914468,435
1,744,484
(1,829,202)(295,406)(1,699,104)(2,433,702)
(97,269)(21,809)(20,489)(250,436)
816,762464,562246,5072,314,668
116411,743,2123,063,098
816,878464,6031,989,7195,377,766
 
425,379231,609582,4521,731,085
21,58713,94830,39272,953
89,69081,07488,198151,439
37,94437,90437,06037,192
26,49821,13033,30718,430
1,5695,0242,4474,481
12,74012,27811,96712,173
17,11113,81312,18912,838
11,8766,3947,9517,589
15,03214,7628,48934,823
659,426437,936814,4522,083,003
 
307,96036,097416,518158,119
200,385
9,737
6,693
524,77536,097416,518158,119
1,184,201474,0331,230,9702,241,122
(367,323)(9,430)758,7493,136,644
(245,022)
(367,323)(9,430)758,7492,891,622

See accompanying Notes to Financial Statements.
 
Tortoise43



 
 
 
 
Statements of Operations (unaudited) (continued)
Period from December 1, 2020 through May 31, 2021
 
     
Tortoise EnergyTortoise
InfrastructureMidstream Energy
     Corp.(1)     Fund, Inc.
Realized and Unrealized Loss on Investments and Foreign Currency
       Net realized gain on investments in unaffiliated securities$12,874,192$6,016,384
       Net realized gain (loss) on options
       Net realized loss on interest rate swap settlements(114,279)
       Net realized gain (loss) on foreign currency and translation of other assets and liabilities
              denominated in foreign currency
              Net realized gain, before income taxes12,759,9136,016,384
                     Current tax expense(11,389,112)(7,180,283)
                            Income tax expense,(11,389,112)(7,180,283)
                            Net realized gain (loss)1,370,801(1,163,899)
       Net unrealized appreciation of investments in unaffiliated securities120,224,83967,706,909
       Net unrealized appreciation of investments in affiliated securities(95,223)
       Net unrealized appreciation of options
       Net unrealized appreciation of interest rate swap contracts108,226
       Net unrealized appreciation (depreciation) of other assets and liabilities
              due to foreign currency translation1,6531,382
                            Net unrealized appreciation120,239,49567,708,291
Net Realized and Unrealized Gain121,610,29666,544,392
Net Increase in Net Assets Applicable to Common Stockholders Resulting from Operations$118,289,968$65,246,195

(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.
 
44Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
 
 
 
Tortoise PowerTortoise 
Tortoise PipelineTortoise Energyand EnergyEssential Assets
& EnergyIndependenceInfrastructureIncome Term
Fund, Inc.     Fund, Inc.     Fund, Inc.     Fund(1)
                
$2,221,819$1,650,052$3,659,499$7,859,464
774,555
 
5,1626011,168(20,945)
2,226,9811,650,6533,660,6678,613,074
2,226,9811,650,6533,660,6678,613,074
19,206,52110,611,97515,074,5057,963,475
117,620
10,975
 
(352)(47)(53)5,733
19,206,16910,611,92815,074,4528,097,803
21,433,15012,262,58118,735,11916,710,877
$21,065,827$12,253,151$19,493,868$19,602,499

See accompanying Notes to Financial Statements.
 
Tortoise45



 
 
 
 
Statements of Changes in Net Assets
 
 
   
Tortoise Energy Infrastructure Corp.(1)
Period From
December 1, 2020Year Ended
through     November 30,
     May 31, 20212020
(Unaudited)
Operations
       Net investment income (loss)$(3,320,328)$(13,242,937)
       Net realized gain (loss)1,370,801(632,460,065)
       Net unrealized appreciation (depreciation)120,239,49569,953,121
              Net increase (decrease) in net assets applicable to common stockholders
                     resulting from operations118,289,968(575,749,881)
Distributions to Common Stockholders
       From distributable earnings
       From return of capital(7,812,777)(28,912,095)
              Total distributions to common stockholders(7,812,777)(28,912,095)
Capital Stock Transactions
       Repurchases of common stock(6,888,558)(19,996,039)
              Net increase (decrease) in net assets applicable to common stockholders
                     from capital stock transactions(6,888,558)(19,996,039)
       Total increase (decrease) in net assets applicable to common stockholders103,588,633(624,658,015)
Net Assets
       Beginning of period305,627,510930,285,525
       End of period$409,216,143$     305,627,510
 
Transactions in common shares
       Shares outstanding at beginning of period12,249,83953,732,462
       Net share reduction due to reverse stock splits (See Note 14)(40,299,345)
       Shares repurchased (See Note 15)(321,936)(1,183,278)
       Shares outstanding at end of period11,927,90312,249,839

(1)Consolidated Statement of Changes in Net Assets (See Note 13 to the financial statements for further disclosure).

See accompanying Notes to Financial Statements.
 
46Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
  
 
 
Tortoise Midstream Energy Fund, Inc.Tortoise Pipeline & Energy Fund, Inc.
Period From          Period From     
December 1, 2020Year EndedDecember 1, 2020Year Ended
throughNovember 30,throughNovember 30,
May 31, 20212020May 31, 20212020
(Unaudited)(Unaudited)
$(1,298,197)$(8,988,496)$(367,323)$(678,729)
(1,163,899)(561,915,049)2,226,981(95,634,123)
       67,708,29179,290,760       19,206,16919,930,872
 
65,246,195(491,612,785)21,065,827(76,381,980)
 
(3,893,664)(18,637,769)(735,397)(4,041,041)
(3,893,664)(18,637,769)(735,397)(4,041,041)
 
(4,449,789)(8,050,210)(2,415,237)(1,355,204)
 
(4,449,789)(8,050,210)(2,415,237)(1,355,204)
56,902,742(518,300,764)17,915,193(81,778,225)
 
149,407,407667,708,17148,108,336     129,886,561
$206,310,149$149,407,407$66,023,529$48,108,336
 
5,845,51763,208,3772,409,12810,016,413
(56,887,538)(7,512,309)
(202,526)(475,322)(129,695)(94,976)
5,642,9915,845,5172,279,4332,409,128

See accompanying Notes to Financial Statements.
 
Tortoise47



 
 
 
 
Statements of Changes in Net Assets (continued)
 

   
        Tortoise Energy Independence Fund, Inc.
Period From
     December 1, 2020     Year Ended
throughNovember 30,
May 31, 20212020
(Unaudited)
Operations
       Net investment income (loss)$(9,430)$12,328
       Net realized gain (loss)1,650,653(47,236,527)
       Net unrealized appreciation (depreciation)10,611,92817,457,608
              Net increase (decrease) in net assets applicable to common stockholders
                     resulting from operations12,253,151(29,766,591)
Distributions to Common Stockholders
       From distributable earnings(823)
       From return of capital(1,475,974)
              Total distributions to common stockholders(1,476,797)
Capital Stock Transactions
       Repurchases of common stock
              Net increase (decrease) in net assets applicable to common stockholders
                     from capital stock transactions
       Total increase (decrease) in net assets applicable to common stockholders           12,253,151     (31,243,388)
Net Assets
       Beginning of period30,306,94761,550,335
       End of period$42,560,098$30,306,947
Transactions in common shares
       Shares outstanding at beginning of period1,845,99714,767,968
       Net share reduction due to reverse stock splits (See Note 14)(12,921,971)
       Shares repurchased (See Note 15)
       Shares outstanding at end of period1,845,9971,845,997

(1)Consolidated Statement of Changes in Net Assets (See Note 13 to the financial statements for further disclosure).

See accompanying Notes to Financial Statements.
 
48Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
  
 
 
Tortoise Power and Energy
Infrastructure Fund, Inc.Tortoise Essential Assets Income Term Fund(1)
Period From          Period From     
December 1, 2020Year EndedDecember 1, 2020Year Ended
throughNovember 30,throughNovember 30,
May 31, 20212020May 31, 20212020
(Unaudited)(Unaudited)
 
$758,749$2,431,557$2,891,622$6,856,596
3,660,667    (25,745,868)8,613,074        (36,718,238)
 15,074,452(2,220,136)8,097,80321,079,690
 
19,493,868(25,534,447)19,602,499(8,781,952)
 
(4,161,698)(3,146,732)(8,677,372)
(2,013,500)(3,135,711)(2,924,275)(6,176,359)
(2,013,500)(7,297,409)(6,071,007)(14,853,731)
 
(3,031,862)(753,123)
 
(3,031,862)(753,123)
14,448,506(33,584,797)13,531,492(23,635,683)
 
89,429,951123,014,930213,824,995237,460,678
$     103,878,457$89,429,951$     227,356,487$213,824,995
 
6,873,1276,951,33313,491,12713,491,127
(256,570)(78,206)
6,616,5576,873,12713,491,12713,491,127

See accompanying Notes to Financial Statements.
 
Tortoise49



 
 
 
 
Statements of Cash Flows (unaudited)
Period from December 1, 2020 through May 31, 2021

             
Tortoise Energy
InfrastructureTortoise Midstream
Corp.(1)Energy Fund, Inc.
Cash Flows From Operating Activities          
       Dividends, distributions and interest received from investments$17,907,396$9,409,748
       Purchases of long-term investments (114,062,384)        (52,407,338)
       Proceeds from sales of long-term investments110,254,80259,222,338
       Sales (purchases) of short-term investments, net(100,949)(222,267)
       Call options written, net
       Payments on interest rate swap contracts, net(114,279)
       Interest received on securities sold, net
       Interest expense paid(1,849,659)(572,765)
       Distributions to mandatory redeemable preferred stockholders(790,861)(253,257)
       Other leverage expenses paid(14,163)(10,377)
       Income taxes paid(12,297,201)(9,053,539)
       Operating expenses paid(2,346,108)(1,305,845)
              Net cash provided (used in) by operating activities(3,413,406)4,806,698
Cash Flows From Financing Activities
       Payments on credit facilities, net18,700,00012,500,000
       Redemption of mandatory redeemable preferred stock(481,075)
       Repayment of senior notes(8,171,123)
       Redemption of common stock(7,473,817)(4,760,836)
       Distributions paid to common stockholders(7,812,777)(3,893,664)
       Other proceeds
              Net cash provided by (used in) financing activities3,413,406(4,806,698)
       Net change in cash
       Cash — beginning of period
       Cash — end of period$$

(1)

Consolidated Statement of Cash Flows (See Note 13 to the financial statements for further disclosure).


See accompanying Notes to Financial Statements.
  
50Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
  
 
 
          Tortoise Power     Tortoise
Tortoise PipelineTortoise Energyand EnergyEssential Assets
& EnergyIndependenceInfrastructureIncome Term
Fund, Inc.Fund, Inc.Fund, Inc.Fund(1)
   
$2,648,123$774,217$3,752,926$7,677,003
      (7,854,892)    (6,010,215)   (13,598,987)   (108,437,634)
9,639,5287,429,02619,971,676109,098,819
(111,065)(380,413)(1,757,363)(150,060)
879,801
139,466
(308,132)(34,658)(405,864)(157,746)
(200,385)
(590,447)(377,957)(728,755)(2,080,149)
3,222,7301,400,0007,373,0996,830,034
  
(1,400,000)(2,200,000)(700,000)
(2,487,333)(3,159,599)
(735,397)(2,013,500)(6,071,007)
(3,222,730)(1,400,000)(7,373,099)(6,771,007)
59,027
236,015
$$$$295,042

See accompanying Notes to Financial Statements.
 
Tortoise51



 
 
 
 
Statements of Cash Flows (unaudited) (continued)
Period from December 1, 2020 through May 31, 2021
 
     
     Tortoise Energy     Tortoise
InfrastructureMidstream Energy
Corp.(1)Fund, Inc.
Reconciliation of net increase in net assets applicable to common stockholders
       resulting from operations to net cash provided (used in) by operating activities
       Net increase in net assets applicable to common stockholders resulting from operations$118,289,968$65,246,195
       Adjustments to reconcile net increase in net assets applicable to common stockholders
              resulting from operations to net cash provided by operating activities:
                     Purchases of long-term investments(118,552,244)(54,829,250)
                     Proceeds from sales of long-term investments112,791,96060,502,912
                     Sales (purchases) of short-term investments, net(100,949)(222,267)
                     Call options written, net
                     Return of capital on distributions received15,745,5358,282,335
                     Deferred tax expense (benefit)
                     Net unrealized (appreciation) depreciation(120,239,495)(67,708,291)
                     Amortization (accretion) of market premium (discount), net(278,855)(166,666)
                     Net realized loss(12,874,192)(6,016,384)
                     Amortization of debt issuance costs42,3454,836
                     Changes in operating assets and liabilities:
                            (Increase) decrease in dividends, distributions and interest receivable from investments270,697173,155
                            Decrease in current tax asset
                            Increase in income tax receivable
                            (Increase) decrease in receivable for investments sold(2,537,158)(1,280,574)
                            Decrease in receivable for premiums on options written
                            (Increase) decrease in prepaid expenses and other assets67,25044,079
                            Decrease in payable for investments purchased4,489,8602,421,912
                            Increase (decrease) in payable to Adviser, net of fees waived254,902136,380
                            Decrease in current tax liability(908,089)(1,873,256)
                            Decrease in accrued expenses and other liabilities125,05991,582
                                   Total adjustments(121,703,374)(60,439,497)
       Net cash provided (used in) by operating activities$(3,413,406)$4,806,698

(1)Consolidated Statement of Cash Flows (See Note 13 to the financial statements for further disclosure).

See accompanying Notes to Financial Statements.
 
52Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
 
 
 
          Tortoise Power     Tortoise
Tortoise PipelineTortoise Energyand EnergyEssential Assets
& EnergyIndependenceInfrastructureIncome Term
Fund, Inc.Fund, Inc.Fund, Inc.Fund(1)
 
 
$21,065,827$12,253,151$19,493,868$19,602,499
 
 
(8,851,371)(6,520,184)(14,314,571)(108,437,634)
11,105,4357,923,30620,659,567109,112,914
(111,065)(380,413)(1,757,363)(150,060)
879,801
1,829,202295,4061,699,1042,433,702
245,022
(19,206,169)(10,611,928)(15,074,452)(8,097,803)
132,375167,160
(2,226,981)(1,650,653)(3,660,667)(8,613,074)
9,737
 
2,04314,20871,194(301,625)
(1,465,907)(494,280)(687,891)(14,095)
(17,261)(23,672)(19,627)(5,311)
996,479509,969715,584
29,37724,68425,80654,520
63,38460,40690,172(45,982)
(17,843,097)(10,853,151)(12,120,769)(12,772,465)
$3,222,730$1,400,000$7,373,099$6,830,034

See accompanying Notes to Financial Statements.
  
Tortoise53



 
 
 
 
TYG Financial Highlights
 

   Period from               
December 31, 2020Year EndedYear EndedYear EndedYear EndedYear Ended
throughNovember 30,November 30,November 30,November 30,November 30,
May 31, 202120202019201820172016
(unaudited)
Per Common Share Data(1)(2)
       Net Asset Value, beginning of period$24.95$69.24$94.00$95.72$115.32$117.12
       Income (Loss) from Investment Operations
              Net investment loss(3)(0.27)(0.44)(1.20)(1.96)(2.60)(3.12)
              Net realized and unrealized gain (loss)(1)10.29(41.67)(13.08)10.36(6.56)11.76
                     Total income (loss) from investment
                            operations10.02(42.11)(14.28)8.40(9.16)8.64
       Distributions to Common Stockholders
              From return of capital(0.66)(2.18)(10.48)(10.48)(10.48)(10.48)
       Capital Stock Transactions
              Premiums less underwriting discounts
                     and offering costs on issuance of
                     common stock(4)(0.00)0.360.040.04
       Net Asset Value, end of period$34.31$24.95$69.24$94.00$95.72$115.32
       Per common share market value,
              end of period$27.26$19.16$67.28$90.36$103.44$122.52
       Total investment return based on
              market value(5)(6)45.82%(69.69)%(15.46)%(3.42)%(7.49)%26.21%
 
Supplemental Data and Ratios
       Net assets applicable to common
              stockholders, end of period (000's)$409,216$305,628$930,286$1,260,300$1,181,528$1,412,274
       Average net assets (000's)$368,795$468,705$1,203,943$1,388,683$1,406,724$1,345,764
       Ratio of Expenses to Average Net Assets(7)
              Advisory fees1.21%1.55%1.62%1.58%1.74%1.74%
              Other operating expenses0.320.280.140.130.120.12
                     Total operating expenses,
                            before fee waiver1.531.831.761.711.861.86
              Fee waiver(8)(0.00)(0.04)(0.00)(0.01)
                     Total operating expenses1.531.831.761.671.861.85
              Leverage expenses1.463.522.151.871.782.29
              Income tax expense (benefit)(9)6.19(23.19)(5.49)(11.02)(5.28)4.64
                     Total expenses9.18%(17.85)%(1.58)%(7.48)%(1.64)%8.78%

See accompanying Notes to Financial Statements.
 
54Tortoise



 
 
2021 Semi-Annual Report | May 31, 2021
 
 
 
 
   Period from               
December 31, 2020Year EndedYear EndedYear EndedYear EndedYear Ended
throughNovember 30,November 30,November 30,November 30,November 30,
May 31, 202120202019201820172016
(unaudited)
Ratio of net investment loss to average
        net assets before fee waiver(7)(1.81)%(2.83)%(1.33)%(1.89)%(2.27)%(2.83)%
Ratio of net investment loss to average
        net assets after fee waiver(7)(1.81)%(2.83)%(1.33)%(1.85)%(2.27)%(2.82)%
Portfolio turnover rate(5)24.26%36.79%26.35%17.96%20.38%24.23%
Credit facility borrowings,
        end of period (000's)$31,900$13,200$93,900$107,100$112,700$109,300
Senior notes, end of period (000's)$87,927$87,927$365,000$380,000$412,500$442,500
Preferred stock, end of period (000's)$32,300$32,300$165,000$165,000$165,000$165,000
Per common share amount of senior
        notes outstanding, end of period$7.37$7.18$27.17$28.34$33.41$36.12
Per common share amount of net assets,