Tortoise Capital Resources Corp. Releases Fiscal 2011 First Quarter Financial Results

LEAWOOD, Kan.--(BUSINESS WIRE)-- Tortoise Capital Resources Corp. (NYSE: TTO) (the company) today announced that it has filed its Form 10-Q for the first quarter ended Feb. 28, 2011.

Recent Highlights

    --  IRP entered into definitive agreement to sell its partnership interests
        to James River Coal Company with expected proceeds of approximately $31
        million to TTO at close
    --  Net assets of $95.7 million or $10.46 per share as of Feb. 28, 2011
    --  First quarter 2011 distribution of $0.10 per share paid March 1, 2011
    --  Quarterly distribution guidance for 2011 of at least $0.10 per share

Distribution Guidance

On March 1, 2011, the company paid a distribution of $0.10 per common share, the same amount as the prior quarter. The company determines the amount of distributions paid to stockholders based on distributable cash flow (DCF), which are distributions received from investments less total expenses. Assuming the sale of International Resource Partners LP (IRP) closes in the expected timeframe, and subject to board approval, the company anticipates paying a distribution of not less than $0.10 per share, per quarter, for the remainder of fiscal 2011. In order to sustain this distribution level for 2011, the company may elect to include a small portion of the proceeds from the IRP sale, depending on the operating performance of selected portfolio companies and their ability to return to near historic distribution levels.

Net Asset Value

On Feb. 28, 2011, the company's net asset value was $10.46 per share compared to $10.44 per share at Nov. 30, 2010. The increase in net asset value is primarily a result of the increase in the fair value of IRP, offset by a decrease in the fair value of Vantacore.

Portfolio Review

As of Feb. 28, 2011, the fair value of the company's investment portfolio (excluding short-term investments) totaled $93.9 million, with approximately 77 percent of the portfolio in private company investments totaling $72.1 million and approximately 23 percent in publicly-traded investments totaling $21.8 million. The company's portfolio is diversified among approximately 51 percent midstream and downstream investments, 4 percent upstream, and 45 percent in aggregates and coal.

The fair value of IRP increased approximately $2.3 million this quarter. IRP increased its quarterly distribution from $0.55 per unit last quarter to $0.60 per unit this quarter. On March 6, 2011, IRP entered into a definitive agreement to sell its partnership interests to James River Coal Company (NASDAQ: JRCC). This transaction is expected to close in the first half of 2011 subject to completion of various closing conditions. TTO's portion of the initial sales proceeds is expected to be approximately $31.1 million in cash, with an additional $2.1 million held in escrow for a period of up to 14 months. The release of escrow funds is contingent upon a number of factors including coal reserves and resolution of outstanding regulatory items. The company anticipates investing the proceeds of the sale of IRP in publicly traded MLPs and cash equivalents, pending being deployed in new qualifying investments and subject to limitations on publicly-traded investments in the BDC structure.

The fair value of Mowood, LLC decreased approximately $0.6 million this quarter, generally due to a decrease in the probability of receiving future contingent payments related to the Timberline Energy, LLC sale. Omega Pipeline Company, LLC continues to perform at budget, supported by the persistent growth of the Fort Leonard Wood Military Base.

The fair value of VantaCore Partners LP decreased approximately $1.9 million this quarter. VantaCore was unable to meet its minimum quarterly distribution ("MQD") of $0.475 per unit for its quarter ended Dec. 31, 2010. Common and preferred unitholders elected to receive their distributions as a combination of cash and the remainder in newly issued preferred units. TTO received 23,185 preferred units in addition to $0.09 in cash per common unit. VantaCore reported year-to-date EBITDA through Dec. 31, 2010 below budget. The Southern Aggregates property in Louisiana continues to fall short of budget but VantaCore is optimistic that signs of improvement in the building industry in the area, along with cost-cutting measures initiated by management, will help improve their performance in 2011.

The fair value of High Sierra Energy LP decreased slightly during the quarter. High Sierra has not made cash distributions to its LP and GP unit holders for the last four consecutive quarters. On March 16, 2011, High Sierra closed on a new $215 million, 3-year committed senior secured credit facility led by BNP Paribas. The new credit facility is expected to provide a level of stability and flexibility to meet the needs of the partnership's existing operations and provide a base of working capital to take advantage of market opportunities. The new facility also financed the buyout of High Sierra's minority partners at Anticline Disposal, resulting in High Sierra owning 100 percent of the membership interests of that business.

Earnings Call

On April 8, 2011, beginning at 1 p.m. Central, TTO will host its Annual Meeting. In conjunction with the Annual Meeting, TTO will host a conference call and webcast in listen-only format. Participants should dial-in to 877-941-2333 approximately five to 10 minutes prior to the scheduled start time. A link to the webcast will be accessible at

Immediately following its Annual Meeting, the company will host its first quarter earnings conference call during which it will discuss its investment and ongoing distribution strategy. Conference call participants will have the opportunity to ask questions following management's prepared remarks.

A replay of the call will be available beginning at 3:00 p.m. Central on April 8, 2011 and continuing until April 15, 2011, by dialing (800) 406-7325. The replay access code is 4421399#. A replay of the webcast will also be available on the company's website at through April 8, 2012.

About Tortoise Capital Resources Corp.

Tortoise Capital Resources invests primarily in privately-held and micro-cap public companies operating in the U.S. energy infrastructure sector.

About Tortoise Capital Advisors, LLC

Tortoise is an investment manager specializing in managing portfolios of MLPs and other energy companies. As of March 31, 2011 the adviser had approximately $6.6 billion of assets under management in six NYSE-listed investment companies and private accounts. For more information, visit our Web site at

Safe Harbor Statement

This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction.

Forward-Looking Statement

This press release contains certain statements that may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included herein are "forward-looking statements." Although the company and Tortoise Capital Advisors believe that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the company's reports that are filed with the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required by law, the company and Tortoise Capital Advisors do not assume a duty to update this forward-looking statement. Any distribution paid in the future to our stockholders will depend on the actual performance of the company's investments, its costs of leverage and other operating expenses and will be subject to the approval of the company's Board and compliance with asset coverage requirements of the Investment Company Act of 1940 and the leverage covenants.

Tortoise Capital Resources Corporation


                                          February 28, 2011    November 30, 2010



Investments at fair value, control
(cost $4,593,000 and $18,122,054,         $ 8,736,367          $ 23,260,566

Investments at fair value, affiliated
(cost $44,774,854 and $31,329,809,          63,310,963           49,066,009

Investments at fair value,
non-affiliated (cost $22,311,998 and        24,058,040           22,875,848
$21,628,965, respectively)

Total investments (cost $71,679,852 and     96,105,370           95,202,423
$71,080,828, respectively)

Receivable for Adviser expense              117,340              109,145

Receivable for investments sold             -                    5,198

Interest receivable from control            -                    42,778

Dividends receivable                        50                   83

Deferred tax asset                          919,005              656,743

Prepaid expenses and other assets           30,994               25,023

Total assets                                97,172,759           96,041,393


Base management fees payable to Adviser     352,020              327,436

Distribution payable to common              914,654              -

Accrued expenses and other liabilities      228,293              234,784

Total liabilities                           1,494,967            562,220

Net assets applicable to common           $ 95,677,792         $ 95,479,173

Net Assets Applicable to Common
Stockholders Consist of:

Warrants, no par value; 945,594 issued
and outstanding

at February 28, 2011 and November 30,

(5,000,000 authorized)                    $ 1,370,700          $ 1,370,700

Capital stock, $0.001 par value;
9,146,506 shares issued and outstanding

February 28, 2011 and November 30, 2010     9,147                9,147
(100,000,000 shares authorized)

Additional paid-in capital                  97,530,301           98,444,952

Accumulated net investment loss, net of     (3,195,579  )        (3,308,522  )
income taxes

Accumulated realized loss, net of           (17,730,436 )        (18,532,648 )
income taxes

Net unrealized appreciation of              17,693,659           17,495,544
investments, net of income taxes

Net assets applicable to common           $ 95,677,792         $ 95,479,173

Net Asset Value per common share
outstanding (net assets applicable

to common stock, divided by common        $ 10.46              $ 10.44
shares outstanding)

Tortoise Capital Resources Corporation

Distributable Cash Flow


                                          Three Months Ended  Three Months Ended
                                          February 28, 2011   February 28, 2010

Total from Investments

Distributions from investments            $ 731,990           $ 1,488,756

Distributions paid in stock                 23,367              -

Interest income from investments            135,330             191,431

Dividends from money market mutual funds    190                 217

Other income                                -                   10,392

Total from Investments                      890,877             1,690,796

Operating Expenses Before Leverage Costs

Advisory fees (net of expense               234,680             258,268
reimbursement by Adviser)

Other operating expenses                    153,843             174,568

Total Operating Expenses, before            388,523             432,836
Leverage Costs

Distributable cash flow before leverage     502,354             1,257,960

Leverage costs                              -                   45,619

Distributable Cash Flow                   $ 502,354           $ 1,212,341

Distributions paid on common stock        $ 914,651           $ 1,180,152

Payout percentage for period(1)             182      %          97        %

DCF/GAAP Reconciliation

Distributable Cash Flow                   $ 502,354           $ 1,212,341

Adjustments to reconcile to Net
Investment Income, before Income Taxes:

Distributions paid in stock(2)              (23,367  )          -

Return of capital on distributions          (305,724 )          (998,640  )
received from equity investments

Net Investment Income, before Income      $ 173,263           $ 213,701

(1) Distributions paid as a percentage
of Distributable Cash Flow

(2) Distributions paid in stock for the three months ended February 28, 2011
were paid as part of normal operations and are included in DCF.

Tortoise Capital Resources Corporation



                                           For the three       For the three
                                           months ended        months ended
                                           February 28, 2011   February 28, 2010

Investment Income

Distributions from investments

Control investments                        $ 70,167            $ 555,879

Affiliated investments                       384,009             856,892

Non-affiliated investments                   277,815             75,985

Total distributions from investments         731,991             1,488,756

Less return of capital on distributions      (305,725  )         (998,640  )

Net distributions from investments           426,266             490,116

Interest income from control investments     135,330             191,431

Dividends from money market mutual funds     190                 217

Fee income                                   -                   10,392

Total Investment Income                      561,786             692,156

Operating Expenses

Base management fees                         352,020             309,922

Professional fees                            80,876              85,162

Directors' fees                              14,573              26,161

Stockholder communication expenses           12,912              15,703

Administrator fees                           9,387               14,460

Fund accounting fees                         7,328               6,972

Registration fees                            6,160               6,355

Stock transfer agent fees                    3,353               3,130

Franchise tax expense                        4,998               2,572

Custodian fees and expenses                  1,382               1,575

Other expenses                               12,874              12,478

Total Operating Expenses                     505,863             484,490

Interest expense                             -                   45,619

Total Expenses                               505,863             530,109

Less expense reimbursement by Adviser        (117,340  )         (51,654   )

Net Expenses                                 388,523             478,455

Net Investment Income, before Income         173,263             213,701

Deferred tax expense                         (60,320   )         (32,694   )

Net Investment Income                        112,943             181,007

Realized and Unrealized Gain (Loss) on

Net realized gain on control investments     -                   1,578,001

Net realized loss on affiliated              -                   (17,445   )

Net realized gain on non-affiliated          373,822             27,612

Net realized gain, before income taxes       373,822             1,588,168

Deferred tax benefit (expense)               428,390             (242,971  )

Net realized gain on investments             802,212             1,345,197

Net unrealized appreciation                  (995,145  )         1,535,457
(depreciation) of control investments

Net unrealized appreciation of               799,909             1,208,074
affiliated investments

Net unrealized appreciation of               499,159             197,774
non-affiliated investments

Net unrealized appreciation, before          303,923             2,941,305
income taxes

Deferred tax expense                         (105,808  )         (449,986  )

Net unrealized appreciation of               198,115             2,491,319

Net Realized and Unrealized Gain on          1,000,327           3,836,516

Net Increase in Net Assets Applicable to
Common Stockholders

Resulting from Operations                  $ 1,113,270         $ 4,017,523

Net Increase in Net Assets Applicable to
Common Stockholders

Resulting from Operations Per Common

Basic and Diluted                          $ 0.12              $ 0.44

Weighted Average Shares of Common Stock

Basic and Diluted                            9,146,506           9,078,090

    Source: Tortoise Capital Resources Corporation