Tortoise Capital Resources Corp. Releases Fiscal 2008 First Quarter Financial Results


Tortoise Capital Resources Corp. (NYSE: TTO) today announced that it has filed its Form 10-Q for the first quarter ended Feb. 29, 2008.

    Recent Highlights

    --  First quarter distribution of $0.25 per share paid March 03,

    --  Net assets at quarter end of $117.7 million or $13.28 per

    --  Distributable cash flow for the quarter of $2.2 million

    --  Renewed and increased credit facility by $10.0 million after
        quarter end

    Portfolio and Investment Activity

On Dec. 17, 2007, the company funded the final tranche of its original commitment to purchase units from Lonestar Midstream Partners, LP and LSMP GP, LP, for an aggregate price of approximately $1.2 million and after quarter end, invested an additional $1.5 million on the same terms. On January 10, 2008 the company invested an additional $2.0 million in its equity interest in Mowood, LLC to fund landfill-to-gas energy projects at Mowood's subsidiary, Timberline Energy LLC. In March 2008, the company was granted Board of Directors observation rights for Quest Midstream Partners, L.P.

As of Feb. 29, 2008, the value of the company's investment portfolio (excluding short-term investments) totaled $155.1 million including equity investments of $144.3 million and debt investments of $10.8 million. Net assets decreased from $121.9 million or $13.76 per share at November 30, 2007 to $117.7 million or $13.28 per share at February 29, 2009. Our net asset value decreased approximately 3.5 percent in the first quarter of 2008, compared with the overall MLP market which saw a decrease of approximately 2.8 percent in Wachovia's MLP Index.

The portfolio represents a strategic mix of 73 percent midstream and downstream investments, 15 percent in aggregates and coal investments and 12 percent upstream investments. The weighted average yield-to-cost on the investment portfolio (excluding short-term investments) as of Feb. 29, 2008 was 8.8 percent.

Tortoise Capital Resources closely monitors portfolio performance and rates each investment's risk profile on a scale of one to three. As of Feb. 29, 2008, all portfolio companies achieved a rating of one, meaning portfolio performance is at or above expectations with trends and risk factors that are generally favorable to neutral.

In February, the company's Adviser hired a full-time Valuation Officer to further its commitment to best practices related to its fair valuation policies and procedures. The company's procedures already include a multi-step valuation process each quarter in connection with determining the fair value of investments. Further, an independent valuation firm is engaged by the Board of Directors to provide third-party valuation consulting services on a selection of valuations as determined by the Board. The Valuation Officer is primarily responsible for oversight of the overall fair valuation process for private investments.

"We continue to be encouraged by what we believe are strong results at our portfolio companies. We are also excited to be moving towards full investment as we continue to invest proceeds from our line of credit," said Tortoise Capital Resources' President, Ed Russell.

Capital Resources

On Mar. 20, 2008, the company secured an extension to its revolving credit facility. The amended credit agreement provided for a revolving credit facility of $40 million that could be increased to $50 million. Subsequently we secured an additional $10 million increase for the credit facility and our maximum borrowing capacity is now $50 million. The revolving credit facility has a variable annual interest rate equal to the one-month LIBOR rate plus 1.75 percent and a quarterly non-usage fee equal to an annual rate of 0.375 percent of the difference between the total credit facility commitment and the average outstanding balance at the end of each day. The amended credit facility terminates on March 20, 2009.

On April 08, 2008, the company filed an initial shelf registration statement with the Securities and Exchange Commission. When effective, the shelf will allow the company to prudently raise additional capital.

Performance Review

The company views distributable cash flow (DCF) as the best indicator of its operating performance and distribution-paying capacity. The Board of Directors determines the amount of distributions paid to stockholders based on DCF which is defined as distributions received from investments less total expenses. DCF for the three months ended Feb. 29, 2008 was approximately $2.2 million. In the fourth quarter of 2007, the Adviser agreed to reimburse the company expenses in an amount equal to 0.25% of the company's average monthly managed assets through Dec. 31, 2008. This voluntary expense reimbursement reduced net expenses for the first quarter of 2008 by approximately $92,000.


As previously announced, the Board of Directors declared the company's first quarter 2008 distribution of $0.25 per share which was paid on Mar. 03, 2008. The distribution reflects distributions received from investments at the time of the announcement, and is not indicative of the targeted annualized distribution.

Earnings Call

The company will host a conference call at 4:00 p.m. CDT on April 09, 2008 to discuss its first quarter financial results. Please dial-in approximately five to 10 minutes prior to the scheduled start time.

    U.S./Canada: 800-218-4007

    International: 303-262-2194

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 7:00 p.m. CDT on April 09, 2008 and continuing until 11:59 p.m. CDT April 23, 2008, by dialing 800-405-2236 (U.S./Canada). The replay access code is 11112635#. A replay of the webcast will also be available on the company's Web site at through April 09, 2009.

Annual Stockholders' Meeting

The company will discuss financial results at its annual stockholders' meeting on April 21, 2008 at 11 a.m. CDT at the Doubletree Hotel, 10100 College Blvd, Overland Park, Kan.

For those unable to attend the meeting, a conference call will be provided. Please dial-in approximately five to 10 minutes prior to the scheduled start time:

    U.S./Canada: 800-218-0713

    International: 303-262-2139

The meeting will also be webcast in a listen-only format. The link to the webcast and supplemental information will be accessible at

A replay of the meeting will be available beginning at 4 p.m. CDT on April 21, 2008 and continuing until 11:59 p.m. CDT May 06, 2008, by dialing 800-405-2236 (U.S./Canada). The replay access code is 11107205#. A replay of the webcast will also be available on the company's Web site at through April 21, 2009.

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 segment, of the U.S. energy infrastructure sector. Tortoise Capital Resources seeks to provide stockholders a high level of total return, with an emphasis on distributions and distribution growth.

About Tortoise Capital Advisors, LLC

Tortoise Capital Advisors, LLC, the adviser to Tortoise Capital Resources Corp., is a pioneer in the capital markets for master limited partnership (MLP) investment companies and a leader in closed-end funds and separately managed accounts focused on MLPs in the energy infrastructure sector. As of March 31, 2008, the adviser had approximately $2.6 billion of assets under management.

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.

Tortoise Capital Resources Corporation

                                           February 29,  November 30,
                                               2008          2007
                                           ------------- -------------
 Investments at fair value, control (cost
  $22,319,937 and $20,521,816,
  respectively)                             $26,351,525   $23,292,904
 Investments at fair value, affiliated
  (cost $94,373,029 and $95,507,198,
  respectively)                              96,722,889    98,007,275
 Investments at fair value, non-affiliated
  (cost $31,097,155 and $31,716,576,
  respectively)                              32,158,746    37,336,154
                                           ------------- -------------
   Total investments (cost $147,790,121
    and $147,745,590, respectively)         155,233,160   158,636,333
 Income tax receivable                          218,935       218,935
 Receivable for Adviser reimbursement            91,647        94,181
 Interest receivable from control
  investments                                   131,443        68,686
 Dividends and distributions receivable          70,884         1,419
 Prepaid expenses and other assets              204,460       154,766
                                           ------------- -------------
   Total assets                             155,950,529   159,174,320
                                           ------------- -------------

 Base management fees payable to Adviser        585,253       565,086
 Accrued capital gain incentive fees
  payable to Adviser                             27,946       307,611
 Distribution payable on common stock         2,214,587             -
 Payable for investments purchased                    -     1,235,994
 Accrued expenses and other liabilities         442,898       419,744
 Short-term borrowings                       32,100,000    30,550,000
 Deferred tax liability                       2,927,341     4,182,919
                                           ------------- -------------
   Total liabilities                         38,298,025    37,261,354
                                           ------------- -------------
     Net assets applicable to common
      stockholders                         $117,652,504  $121,912,966
                                           ============= =============

Net Assets Applicable to Common
 Stockholders Consist of:
 Warrants, no par value; 945,594 issued
  and outstanding at February 29, 2008 and
  945,774 issued and outstanding at
  November 30, 2007 (5,000,000 authorized)   $1,370,700    $1,370,957
 Capital stock, $0.001 par value;
  8,858,348 shares issued and outstanding
  at February 29, 2008 and 8,858,168
  issued and outstanding at November 30,
  2007 (100,000,000 shares authorized)            8,858         8,858
 Additional paid-in capital                 112,974,782   115,186,412
 Accumulated net investment loss, net of
  deferred tax benefit                       (1,476,771)   (1,565,774)
 Accumulated realized gain, net of
  deferred tax expense                          160,474       160,474
 Net unrealized appreciation of
  investments, net of deferred tax expense    4,614,461     6,752,039
                                           ------------- -------------
     Net assets applicable to common
      stockholders                         $117,652,504  $121,912,966
                                           ============= =============

 Net Asset Value per common share
  outstanding (net assets applicable to
  common stock, divided by common shares
  outstanding)                                   $13.28        $13.76
                                           ============= =============
Distributable Cash Flow
                                                For the three months
                                               ended February 29, 2008

Total Distributions Received from Investments
  Distributions from investments                           $2,620,715
  Distributions paid in stock                                 453,520
  Interest income from investments                            313,409
  Dividends from money market mutual funds                      2,310
  Other income                                                 28,987
    Total from Investments                                  3,418,941

Operating Expenses Before Leverage Costs and
 Current Taxes
  Advisory fees (net of expense reimbursement
   by Adviser)                                                493,606
  Other operating expenses (excluding capital
   gain incentive fees)                                       250,281
    Total Operating Expenses                                  743,887
  Distributable cash flow before leverage
   costs and current taxes                                  2,675,054
  Leverage Costs                                              497,904
      Distributable Cash Flow                             $ 2,177,150

DCF/GAAP Reconciliation
  Distributable Cash Flow                                  $2,177,150
  Adjustments to reconcile to Net Investment
   Income, before Income Taxes
  Distributions paid in stock                                (453,520)
  Return of capital on distributions received
   from equity investments                                 (1,859,741)
  Capital gain incentive fees                                 279,665
      Net Investment Income, before Income
       Taxes                                                 $143,554
Tortoise Capital Resources Corporation

                                           For the three For the three
                                            months ended  months ended
                                            February 29,  February 28,
                                                2008          2007
                                           ------------- -------------
Investment Income
 Distributions from investments
   Non-affiliated investments                  $687,923      $348,430
   Affiliated investments                     1,649,888       255,257
   Control investments                          282,904             -
                                           ------------- -------------
 Total distributions from investments         2,620,715       603,687
 Less return of capital on distributions     (1,859,741)     (480,057)
                                           ------------- -------------
     Net distributions from investments         760,974       123,630
 Interest income from control investments       313,409       128,472
 Dividends from money market mutual funds         2,310       139,533
 Other income                                    28,987             -
                                           ------------- -------------
   Total Investment Income                    1,105,680       391,635
                                           ------------- -------------

Operating Expenses
 Base management fees                           585,253       380,067
 Capital gain incentive fees                   (279,665)      487,627
 Professional fees                              151,751        57,381
 Administrator fees                              27,150        10,673
 Directors' fees                                 22,663        23,168
 Reports to stockholders                         12,915         4,458
 Fund accounting fees                             8,488         5,849
 Registration fees                                7,376         1,668
 Custodian fees and expenses                      4,685         2,600
 Stock transfer agent fees                        3,366         3,600
 Other expenses                                  11,887         6,538
                                           ------------- -------------
   Total Operating Expenses                     555,869       983,629
                                           ------------- -------------
 Interest expense                               497,904       123,481
 Preferred stock distributions                        -       228,750
 Loss on redemption of preferred stock                -       765,059
                                           ------------- -------------
   Total Interest Expense, Preferred Stock
    Distributions and Loss on Redemption
    of Preferred Stock                          497,904     1,117,290
                                           ------------- -------------
   Total Expenses                             1,053,773     2,100,919
 Less expense reimbursement by Adviser          (91,647)            -
                                           ------------- -------------
   Net Expenses                                 962,126     2,100,919
                                           ------------- -------------
Net Investment Income (Loss), before
 Income Taxes                                   143,554    (1,709,284)
 Deferred tax benefit (expense)                 (54,551)      314,440
                                           ------------- -------------
Net Investment Income (Loss)                     89,003    (1,394,844)
                                           ------------- -------------

Unrealized Gain (Loss) on Investments
 Net unrealized appreciation of control
  investments                                 1,260,500       133,519
 Net unrealized appreciation
  (depreciation) of affiliated investments     (306,374)      459,968
 Net unrealized appreciation
  (depreciation) of non-affiliated
  investments                                (4,401,833)    2,328,503
                                           ------------- -------------
   Net unrealized appreciation
    (depreciation), before deferred taxes    (3,447,707)    2,921,990
     Deferred tax benefit (expense)           1,310,129    (1,110,356)
                                           ------------- -------------
Net Unrealized Gain (Loss) on Investments    (2,137,578)    1,811,634
                                           ------------- -------------

Net Increase (Decrease) in Net Assets
 Applicable to Common Stockholders
 Resulting from Operations                  $(2,048,575)     $416,790
                                           ============= =============

Net Increase (Decrease) in Net Assets
 Applicable to Common Stockholders:
 Resulting from Operations Per Common
 Basic and diluted                               $(0.23)        $0.09

Weighted Average Shares of Common Stock
 Basic and diluted                            8,858,212     4,491,707

Source: Tortoise Capital Resources Corp.