Tortoise Capital Resources Corp. Releases Fiscal 2010 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 its first quarter ended Feb. 28, 2010.

Recent Highlights

    --  Net assets of $87.1 million or $9.60 per share as of Feb. 28, 2010
    --  Total assets of $88.9 million as of Feb. 28, 2010
    --  Distributable cash flow (DCF) of $1.2 million for the fiscal quarter
        ended Feb. 28, 2010
    --  First quarter 2010 distribution of $0.13 per share paid March 1, 2010
    --  Mowood, LLC (Mowood) closed on sale of its subsidiary Timberline Energy,
        LLC (Timberline) on Feb. 9, 2010
    --  Credit facility fully repaid and terminated

Performance Review

On March 1, 2010, the company paid a distribution of $0.13 per common share, the same amount paid last quarter. The company determines the amount of distributions paid to stockholders based on DCF, which is distributions received from investments less total expenses.


On Feb. 10, 2010, the company paid off the remaining balance under the credit facility with proceeds from the sale of investments and the credit facility was terminated.

Net Asset Value

At Feb. 28, 2010, the company's net asset value was $9.60 per share compared to $9.29 per share at Nov. 30, 2010. The increase in net asset value is largely attributable to an increase in the private company valuations, most notably International Resource Partners and Mowood (which continues to own and operate Omega Pipeline Company).

Portfolio Review

As of Feb. 28, 2010, the fair value of the company's investment portfolio (excluding short-term investments) totaled $76.9 million, including equity investments of $71.6 million and debt investments of $5.3 million. The company's portfolio is diversified among approximately 57 percent midstream and downstream investments, 8 percent upstream, and 35 percent in aggregates and coal. The weighted average yield-to-cost on the investment portfolio (excluding short-term investments) as of Feb. 28, 2010 was 6.9 percent.

As previously reported, Mowood closed the sale of its wholly owned subsidiary, Timberline Energy, LLC, to Landfill Energy Systems in February. The company received $9.0 million in cash distributions from Mowood, and used a portion of the proceeds to pay off its credit facility, which had an outstanding balance of $4.6 million as of Nov. 30, 2009. The company also invested $750,000 this quarter in Mowood, in the form of subordinated debt, to facilitate growth projects at Omega. The remainder of the proceeds received from the sale of Timberline was invested in publicly-traded securities after the company's quarter end. Over the next two years additional proceeds of up to $2.4 million could be received by the company from Mowood, based on the contingent and escrow terms contained in the sale agreement, as amended. The company expects the impact of the Timberline sale and the elimination of its credit facility to be neutral to its distributable cash flow.

Quest Midstream Partners, LP (Quest Midstream) completed its transformation into a publicly traded C-corp, PostRock Energy Corporation (PostRock) (NASDAQ: PSTR). PostRock is a new corporation formed for the purpose of wholly owning Quest Midstream, Quest Resource Partners, LP (formerly NASDAQ: QRCP) and Quest Energy Partners, LP (formerly NASDAQ: QELP). PostRock announced on March 5, 2010 that shareholders of QRCP and QELP and unit holders of Quest Midstream had approved the merger and PostRock began trading on the NASDAQ on March 8, 2010. Upon closing of the merger, the company received 490,769 freely tradable common units of PostRock in exchange for its 1,216,881 common units of Quest Midstream.

Earnings Call

The company will host a conference call at 4 p.m. CDT on Thursday, April 8, 2010 to discuss its financial results for the fiscal quarter ended Feb. 28, 2010. Please dial-in approximately five to 10 minutes prior to the scheduled start time.

U.S./Canada: 877-941-2332

International: 480-629-9722

The call will also be webcast in a listen-only format. A link to the webcast will be accessible at

A replay of the call will be available beginning at 6:00 p.m. CDT on April 8, 2010 and continuing until 11:59 p.m. CDT April 23, 2010, by dialing 800-406-7325 (U.S./Canada). The replay access code is 4262236#. A replay of the webcast will also be available on the company's Web site at through April 8, 2011.

About Tortoise Capital Resources Corp.

Tortoise Capital Resources invests primarily in privately-held and micro-cap public companies operating in the midstream and downstream segments, and to a lesser extent the upstream and coal/aggregate segments, of the U.S. energy infrastructure sector.

About Tortoise Capital Advisors

Tortoise is an investment manager specializing in listed energy infrastructure, such as pipeline and power companies. As of March 31, 2010, the adviser had approximately $3.3 billion of assets under management in five 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, 2010  November 30, 2009



Investments at fair value, control (cost    $ 27,765,626       $ 33,458,046
$20,952,193 and $28,180,070, respectively)

Investments at fair value, affiliated
(cost $51,439,159 and $52,676,299,            41,629,781         41,658,847

Investments at fair value, non-affiliated
(cost $15,139,576 and $9,568,566,             14,633,831         8,865,047

Total investments (cost $87,530,928 and       84,029,238         83,981,940
$90,424,935, respectively)

Receivable for Adviser expense                51,654             49,843

Interest receivable from control              55,031             -

Dividends receivable                          103                87

Deferred tax asset                            4,703,740          5,429,391

Prepaid expenses and other assets             18,460             16,792

Total assets                                  88,858,226         89,478,053


Base management fees payable to Adviser       309,922            299,060

Distribution payable to common                1,180,152          -

Accrued expenses and other liabilities        234,196            282,408

Short-term borrowings                         -                  4,600,000

Total liabilities                             1,724,270          5,181,468

Net assets applicable to common             $ 87,133,956       $ 84,296,585

Net Assets Applicable to Common
Stockholders Consist of:

Warrants, no par value; 945,594 issued and
outstanding at February 28, 2010 and        $ 1,370,700        $ 1,370,700
November 30, 2009 (5,000,000 authorized)

Capital stock, $0.001 par value; 9,078,090
shares issued and outstanding at February     9,078              9,078
28, 2010 and November 30, 2009
(100,000,000 shares authorized)

Additional paid-in capital                    100,749,155        101,929,307

Accumulated net investment loss, net of       (3,123,409  )      (3,304,416  )
income taxes

Accumulated realized loss, net of income      (12,696,417 )      (14,041,614 )

Net unrealized appreciation (depreciation)    824,849            (1,666,470  )
of investments, net of income taxes

Net assets applicable to common             $ 87,133,956       $ 84,296,585

Net Asset Value per common share
outstanding (net assets applicable to       $ 9.60             $ 9.29
common stock, divided by common shares

Tortoise Capital Resources Corporation

                                           For the three      For the three
Distributable Cash Flow                    months ended       months ended
                                           February 28, 2010  February 28, 2009

Total from Investments

     Distributions from investments        $ 1,488,756        $ 2,691,635

     Interest income from investments        191,431            201,598

     Dividends from money market mutual      217                725

     Other income                            10,392             15,000

Total from Investments                       1,690,796          2,908,958

Operating Expenses Before Leverage Costs

     Advisory fees (net of expense           258,268            327,308
     reimbursement by Adviser)

     Other operating expenses                174,568            217,582

Total Operating Expenses, before Leverage    432,836            544,890

     Distributable cash flow before          1,257,960          2,364,068
     leverage costs

     Leverage costs                          45,619             171,116

     Distributable Cash Flow               $ 1,212,341        $ 2,192,952

Distributions paid on common stock         $ 1,180,152        $ 2,061,294

Payout percentage for period(1)              97        %        94         %

DCF/GAAP Reconciliation

     Distributable Cash Flow               $ 1,212,341        $ 2,192,952

     Adjustments to reconcile to Net
     Investment Income, before Income

     Distributions paid in stock (2)         -                  28,136

     Return of capital on distributions      (998,640  )        (1,853,248 )
     received from equity investments

     Net Investment Income, before Income  $ 213,701          $ 367,840

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

     The only distributions paid in stock for the three months ended February
(2)  28, 2009 were from Abraxas Energy Partners, L.P. which were paid in stock
     as a result of credit constraints and therefore were not included in DCF.

Tortoise Capital Resources



                                      For the three months  For the three months
                                      ended February 28,    ended February 28,
                                      2010                  2009

Investment Income

Distributions from investments

Control investments                   $ 555,879             $ 579,215

Affiliated investments                  856,892               829,338

Non-affiliated investments              75,985                1,311,218

Total distributions from investments    1,488,756             2,719,771

Less return of capital on               (998,640  )           (1,853,248  )

Net distributions from investments      490,116               866,523

Interest income from control            191,431               201,598

Dividends from money market mutual      217                   725

Fee income                              10,392                15,000

Total Investment Income                 692,156               1,083,846

Operating Expenses

Base management fees                    309,922               392,769

Professional fees                       85,162                129,092

Directors' fees                         26,161                21,657

Reports to stockholders                 15,703                15,073

Administrator fees                      14,460                18,329

Fund accounting fees                    6,972                 8,005

Registration fees                       6,355                 7,719

Stock transfer agent fees               3,130                 3,181

Franchise tax expense                   2,572                 -

Custodian fees and expenses             1,575                 3,087

Other expenses                          12,478                11,439

Total Operating Expenses                484,490               610,351

Interest expense                        45,619                171,116

Total Expenses                          530,109               781,467

Less expense reimbursement by           (51,654   )           (65,461     )

Net Expenses                            478,455               716,006

Net Investment Income, before Income    213,701               367,840

Deferred tax expense                    (32,694   )           (101,183    )

Net Investment Income                   181,007               266,657

Realized and Unrealized Gain (Loss)
on Investments

Net realized gain on control            1,578,001             -

Net realized loss on affiliated         (17,445   )           (499,818    )

Net realized gain on non-affiliated     27,612                -

Net realized gain (loss), before        1,588,168             (499,818    )
income taxes

Deferred tax benefit (expense)          (242,971  )           137,487

Net realized gain (loss) on             1,345,197             (362,331    )

Net unrealized appreciation of          1,535,457             127,710
control investments

Net unrealized appreciation
(depreciation) of affiliated            1,208,074             (8,278,048  )

Net unrealized appreciation
(depreciation) of non-affiliated        197,774               (4,783,720  )

Net unrealized appreciation             2,941,305             (12,934,058 )
(depreciation), before income taxes

Deferred tax benefit (expense)          (449,986  )           3,557,817

Net unrealized appreciation             2,491,319             (9,376,241  )
(depreciation) of investments

Net Realized and Unrealized Gain        3,836,516             (9,738,572  )
(Loss) on Investments

Net Increase (Decrease) in Net
Assets Applicable to Common

Resulting from Operations             $ 4,017,523           $ (9,471,915  )

Net Increase (Decrease) in Net
Assets Applicable to Common

Resulting from Operations Per Common

Basic and Diluted                     $ 0.44                $ (1.06       )

Weighted Average Shares of Common
Stock Outstanding:

Basic and Diluted                       9,078,090             8,962,147

    Source: Tortoise Capital Resources Corp.