Exhibit 99.1
 
 
 
 
 
 
   Tortoise Capital Resources Corp.
 
Tortoise Capital Resources Corp. Releases Second Quarter 2012 Financial Results

FOR IMMEDIATE RELEASE

LEAWOOD, Kan. – July 5, 2012 – Tortoise Capital Resources Corp. (NYSE: TTO) today announced its financial results for the second quarter ended May 31, 2012.

Highlights

 
·
Second quarter distribution of $0.11 with guidance of no less than $0.44 annualized for 2012
 
·
TTO book value per share of $10.47 as of May 31, 2012, compared to $10.37 per share last quarter
 
·
Subsequent to the quarter end, TTO’s largest private holding, High Sierra, completed a merger with NGL Energy Partners, LP

Quarterly Performance Review

TTO’s book value per share was $10.47 as of May 31, 2012, compared to last quarter’s $10.37 per share.  The fair value of the investment securities portfolio, excluding short-term investments, at May 31, 2012 was $78.8 million, with $53.3 million of private securities and $25.5 million of publicly traded securities. The investment securities portfolio increased $2 million, as compared to Feb. 29, 2012. Of the increase, a $4 million loss is attributable to trading securities and a $6 million increase comes from other equity securities. High Sierra, one of the major holdings in the portfolio, drove most of the increase in equity securities.

TTO expects 2012 to be a year of transition during which the company seeks to execute a plan of obtaining REIT status by 2013. During the 2012 calendar year, assets acquired by TTO, if any, will be expected to create tax depreciation in order to shield all or a significant portion of any incremental income created by possible acquisitions.

Private Company Update

The fair value in VantaCore increased approximately $669,000 or 7% from February 29, 2012.  The increase is attributable to VantaCore’s continued improved performance, driven by cost cutting initiatives and the price increases that have gone into effect. VantaCore also completed its acquisition of Laurel Aggregates, LLC. VantaCore was unable to meet its minimum quarterly distribution of $0.475 per unit for its quarter ended March 31, 2012. TTO  17,421 preferred units and $0.23 in cash per common and preferred unit.

The fair value of Lightfoot decreased approximately $862,000 or 9.1% from the valuation at February 29, 2012. The decrease was driven by Lightfoot’s adjusted downward forecast for 2012. Lightfoot paid a quarterly distribution of $0.21 per unit, equal to the amount paid in the previous quarter.

The fair value of High Sierra increased approximately $6.3 million or 21.6% during the quarter primarily due to the announcement of the now completed transaction. High Sierra paid a quarterly distribution of $0.30 per unit, equal to the amount paid in the previous quarter.

Subsequent to the end of the quarter, NGL Energy Partners, LP and certain of its affiliates (collectively NGL) completed a merger with High Sierra and certain of its affiliates. TTO expects to receive approximately $9.4 million in cash and approximately 1.2 million newly issued units of NGL. Based on NGL’s closing price on June 19, 2012, and excluding any discount for restriction, the value of the NGL units expected to be received by TTO is approximately $28.2 million, implying aggregate consideration of approximately $37.6 million. TTO originally invested approximately $26.8 million in High Sierra. The NGL units are not subject to a lock-up agreement, however, they can only be sold pursuant to an exemption from the Securities and Exchange Commission (SEC)’s registration requirements, such as Rule 144.
 
 
 
 
 
 
 
 
 
 
 
 
 
 





11550 Ash Street, Suite 300  |  Leawood, KS 66211  |  p: 913.981.1020  |  f: 913.981.1021  |  www.tortoiseadvisors.com
 
 

 


 
 
 
   Tortoise Capital Resources Corp.
 



Distribution Guidance

On May 7, 2012, TTO declared a distribution of $0.11 per share.  The distribution was paid on June 1, 2012 to stockholders of record on May 24, 2012.  The dividend reinvestment amounted to 3.2 percent of the total. TTO’s portfolio of real property assets and investment securities generate cash flow from which it pays distributions to stockholders. As of the second quarter 2012, the most significant source of stockholder distributions continues to be the distributions from investment securities. TTO continues to believe that its investments should support a sustainable annualized distribution of not less than $0.44 per share.

NGL has announced that its management intends to recommend to the NGL Board an increase in the annual distribution on its units to $1.65. Distributions by NGL at that rate are expected to generate an anticipated $495,000 per quarter for us, beginning with the distribution for the quarter ending September 30, 2012. TTO expects to receive one third of that distribution for the quarter ending June 30, 2012.

Changes in Financial Reporting

As a result of the withdrawal of TTO’s election to be regulated as a BDC, it is no longer regulated by the Investment Company Act of 1940. The reporting conforms to the format more commonly used by REITs. The 10-Q as filed for the period ended May 31, 2012 reports TTO’s second quarter financial results. As stated in the 10-K for the year ended Nov. 30, 2011, the consolidation of Mowood, LLC began when TTO withdrew its election to be treated as a BDC and began reporting financial results in accordance with general corporate reporting guidelines versus the AICPA Investment Company Audit Guide. Due to this transition, comparable prior year financial statements should be read in conjunction with the Management’s Discussion & Analysis. Items on the consolidated statement of income for the period ended May 31, 2011 have been reclassified and aggregated to conform to the presentation of results of operations for the period ended May 31, 2012.  Due to the change in strategy, income from investment securities is now reported in other income.  Components of cash flows for the period ended May 31, 2011 have also been reclassified and aggregated to conform to the presentation of cash flows for the period ended May 31, 2012.

With plans to liquidate securities and transition the funds into the purchase of assets that will permit TTO to qualify as a REIT, TTO is reporting the gains (losses) on the securities transactions as Other Income and separate from Income from Operations.
 
Earnings Call

Tortoise Capital Resources Corp. will host a conference call at 4:00 p.m. CT on Thursday, July 5, 2012 to discuss its financial results for the quarter. Please dial-in to the call at 1-877-407-9210 approximately five to 10 minutes prior to the scheduled start time.

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

A replay of the call will be available until 11:59 p.m. CT August 5, 2012, by dialing 1-877-660-6853.  The ID # for playback is 286 and the Conference ID # is 396997. A replay of the webcast will also be available on Tortoise’s website at www.tortoiseadvisors.com through July 5, 2013.
 
 
 
 
 
 
 
 
 
 
 
 
 
 





11550 Ash Street, Suite 300  |  Leawood, KS 66211  |  p: 913.981.1020  |  f: 913.981.1021  |  www.tortoiseadvisors.com
 
 

 
 
 
 
   Tortoise Capital Resources Corp.
 

 
About Tortoise Capital Resources Corp.
 
Tortoise Capital Resources Corp. (NYSE: TTO) is an energy infrastructure asset financing company that provides capital to pipeline, storage and power transmission operators. TTO's investments include securities and real assets with long-term, stable cash flows, limited commodity price sensitivity, and growth opportunities. TTO is managed by Corridor InfraTrust Management, LLC. Corridor is an affiliate of Tortoise Capital Advisors, L.L.C., an investment manager specializing in listed energy infrastructure investments with approximately $7.5 billion of assets under management as of May 31, 2012.  For more information, visit Corridor's website at www.corridortrust.com.
 
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 Corridor InfraTrust Management, LLC 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 Corridor InfraTrust Management, LLC 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, its costs of leverage and other operating expenses and will be subject to the approval of the company's Board and compliance with leverage covenants.
 
 
 
 
 





11550 Ash Street, Suite 300  |  Leawood, KS 66211  |  p: 913.981.1020  |  f: 913.981.1021  |  www.tortoiseadvisors.com
 
 

 
 
 
 

 
 
 
   Tortoise Capital Resources Corp.
 

Tortoise Capital Resources Corporation
CONSOLIDATED BALANCE SHEETS
 
 
   
May 31, 2012
 
November 30, 2011
 
         
Assets  
(Unaudited)
     
Trading securities, at fair value
$
         25,505,035
$
  27,037,642
 
Other equity securities, at fair value
 
53,314,589
 
41,856,730
 
Leased property, net of accumulated depreciation of $647,481 and $294,309 respectively
 
13,479,369
 
13,832,540
 
Cash and cash equivalents
 
3,078,640
 
2,793,326
 
Property and equipment, net of accumulated depreciation of $1,610,766 and $1,483,616 respectively
 
3,729,458
 
3,842,675
 
Escrow receivable
 
1,677,052
 
1,677,052
 
Accounts receivable
 
1,610,176
 
1,402,955
 
Intangible lease asset, net of accumulated amortization of $267,611 and $121,641 respectively
 
827,160
 
973,130
 
Lease receivable
 
474,152
 
474,152
 
Prepaid expenses
 
402,177
 
140,017
 
Receivable for Adviser expense reimbursement
 
-
 
121,962
 
Deferred tax asset
 
-
 
27,536
 
Other assets
 
636,831
 
107,679
 
Total Assets
 
104,734,639
 
94,287,396
 
           
Liabilities and Stockholders' Equity
         
           
Liabilities
         
Management fees payable to Adviser
 
254,957
 
365,885
 
Distribution payable to common stockholders
 
1,009,908
 
-
 
Accounts payable
 
376,571
 
597,157
 
Line of credit
 
840,000
 
-
 
Long-term debt
 
928,453
 
2,279,883
 
Lease obligation
 
67,960
 
107,550
 
Deferred tax liability
 
4,618,540
 
-
 
Accrued expenses and other liabilities
 
473,106
 
510,608
 
Total Liabilities
 
8,569,495
 
3,861,083
 
           
Stockholders' Equity
         
Warrants, no par value; 945,594 issued and outstanding
at May 31, 2012 and November 30, 2011
(5,000,000 authorized)
$
      1,370,700
$
 1,370,700
 
Capital stock, non-convertible, $0.001 par value; 9,180,935 shares issued
and outstanding at May 31, 2012 and 9,176,889 shares issued
and outstanding at November 30, 2011 (100,000,000 shares authorized)
 
9,181
 
9,177
 
Additional paid-in capital
 
93,697,764
 
95,682,738
 
Accumulated retained earnings (deficit)
 
1,087,499
 
(6,636,302
Total Stockholders' Equity
$
    96,165,144
$
        90,426,313
 
Total Liabilities and Stockholders' Equity
 $
   104,734,639
$
        94,287,396
 
           
Book value per share (total stockholders' equity divided by shares outstanding)
$
           10.47
$
        9.85
 
 
 
 
 
 
 

 



11550 Ash Street, Suite 300  |  Leawood, KS 66211  |  p: 913.981.1020  |  f: 913.981.1021  |  www.tortoiseadvisors.com
 
 

 
 
 
 
 
 
   Tortoise Capital Resources Corp.
 

Tortoise Capital Resources Corporation
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
   
For the three
months ended
May 31, 2012
   
For the three
months ended
May 31, 2011
   
For the six
months ended
May 31, 2012
   
For the six
months ended
May 31, 2011
 
Revenue
                       
Sales revenue
$
  1,439,958
  $
            -
  $
        3,877,268
   $ -  
Lease income
 
38,244
   
-
   
1,276,488
   
-
 
Total Revenue
 
2,078,202
   
-
   
5,153,756
   
-
 
                         
Expenses
                       
Cost of sales (excluding depreciation expense)
 
1,031,114
   
-
   
3,035,786
   
-
 
Management fees, net of expense reimbursements
 
254,965
   
241,193
   
502,346
   
475,873
 
Asset acquisition expense
 
94,699
   
-
   
94,699
   
-
 
Professional fees
 
268,935
   
82,952
   
377,513
   
163,828
 
Depreciation expense
 
246,828
   
-
   
493,633
   
-
 
Operating expenses
 
189,165
   
-
   
361,806
   
-
 
Directors' fees
 
14,730
   
15,396
   
29,311
   
29,969
 
Interest expense
 
25,229
   
-
   
52,638
   
-
 
Other expenses
 
78,402
   
58,664
   
135,662
   
117,058
 
Total Expenses
 
2,204,067
   
398,205
   
5,083,394
   
786,728
 
Gain (loss) from Operations
                       
$
$ (125,865.00
$
(398,205.00
$
    70,362.00
  $
(786,728.00
                         
Other Income
                       
Net distributions and dividend income on securities
$
      55,462
  $
     293,396
  $
      140,724
  $
    855,182
 
Net realized and unrealized gain (loss) on trading securities
 
(3,600,082
 
(200,409
)  
(737,810
 
1,221,919
 
Net realized and unrealized gain on other equity securities
 
6,837,407
   
4,641,480
   
12,906,601
   
3,896,897
 
                         
Total Other Income
$
     3,292,787
  $
    4,734,467
  $
   12,309,515
  $
      5,973,998
 
Income before income taxes
$
      3,166,922
  $
   4,336,262
  $
       12,379,877
  $
     5,187,270
 
                         
Taxes
                       
Current tax expense
 
-
   
(200,000
 
(10,000
 
(200,000
Deferred tax expense
 
(1,190,162
 
(1,353,250
 
(4,646,076
 
(1,090,988
Income tax expense, net
 
(1,190,162
 
(1,553,250
 
(4,656,076
 
(1,290,988
Net Income
$
     1,976,760
  $
     2,783,012
  $
        7,723,801
  $
    3,896,282
 
                         
Earnings Per Common Share:
                       
Basic and Diluted
$
          0.22
  $
        0.30
  $
             0.84
  $
          0.43
 
                         
Weighted Average Shares of Common Stock Outstanding:
                       
Basic and Diluted
 
9,180,935
   
9,156,931
   
9,178,923
   
9,151,776
 
Dividends declared per share
$
        0.11
  $
       0.10
  $
            0.22
  $
         0.20
 

 
 
 
 
 
 
 
 
 

 


11550 Ash Street, Suite 300  |  Leawood, KS 66211  |  p: 913.981.1020  |  f: 913.981.1021  |  www.tortoiseadvisors.com
 
 

 
 
 
 
 
 
 
   Tortoise Capital Resources Corp.
 
Tortoise Capital Resources Corporation
CONSOLIDATED STATEMENTS OF EQUITY
 
 
  Capital Stock                  
  Shares   Amount   Warrants   Additional Paid-in
Capital
  Retained
Earnings
(Accumulated
Deficit)
  Total  
Balance at November 30, 2010 9,146,506   9,147   1,370,700   98,444,952    (4,345,626 ) 95,479,173  
Net Income                 2,922,143   2,922,143  
Distributions to stockholders sourced as return of capital              (3,755,607 )      (3,755,607 )
Reinvestment of distributions to stockholders 30,383    30       252,212       252,242  
Consolidation of wholly-owned subsidiary              741,181    (5,212,819 ) (4,471,638 )
Balance at November 30, 2011 9,176,889   9,177   1,370,700  
95,682,738
  (6,636,302 ) 90,426,313  
Net Income                 7,723,801   7,723,801  
Distributions to stockholders sourced as return of capital               (2,019,361 )      (2,019,361 )
Reinvestment of distributions to stockholders
4,046    4       34,387       34,391  
Balance at May 31, 2012 (Unaudited) 9,180,935  $   9,181  $  1,370,700  $   93,697,764      1,087,499    96,165,144  
 
 
 

 
 
 
 
 
 
 
 
11550 Ash Street, Suite 300  |  Leawood, KS 66211  |  p: 913.981.1020  |  f: 913.981.1021  |  www.tortoiseadvisors.com
 
 

 
 
 
 
 
 
 
   Tortoise Capital Resources Corp.
 
 
Tortoise Capital Resources Corp.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Operating Activities            
Net Income
 $
      7,723,801
  $
           3,896,282
 
Adjustments:
           
Distributions received from investment securities
 
2,243,537
   
781,243
 
Deferred income tax, net
 
4,646,076
   
1,090,988
 
Depreciation expense
 
493,633
   
-
 
Amortization of intangible lease asset
 
145,969
   
-
 
Amortization of assumed debt premium
 
(68,430)
   
-
 
Realized and unrealized (gain) loss on trading securities
 
737,810
   
(1,221,919
Realized and unrealized gain on other equity securities
 
(12,906,601)
   
(3,896,897
Changes in assets and liabilities:
           
Decrease in interest, dividend and distribution receivable
 
-
   
38,779
 
Increase in accounts receivable
 
(207,221
)  
-
 
Increase in prepaid expenses and other assets
 
(791,312
 
(66,045
Increase in management fees payable to Adviser, net of expense reimbursement
 
11,034
   
22,902
 
Decrease in accounts payable
 
(220,586
)  
-
 
Decrease in accrued expenses and other liabilities
 
(37,499
 
(67,723
Net cash provided by operating activities
$
              1,770,211
  $
               577,610
 
             
Investing Activities
           
Purchases of long-term investments
       
(17,072,676
Proceeds from sales of long-term investments
       
43,336,412
 
Proceeds from sale of property and equipment
 
3,076
   
-
 
Purchases of property and equipment
 
(30,321
)  
-
 
Net cash provided by (used in) investing activities
$
                (27,245
 $
        26,263,736
 
             
Financing Activities
           
Payments on long-term debt
 
(1,283,000
)  
-
 
Payments on lease obligation
 
(39,590
)  
-
 
Advances from revolving line of credit
 
1,045,000
   
-
 
Repayments on revolving line of credit
 
(205,000
)  
-
 
Distributions paid to common stockholders
 
(975,062
 
(826,451
Net cash used in financing activities
$
            (1,457,652
 $
              (826,451
             
Net Change in Cash and Cash Equivalents
$
                285,314
  $
           26,014,895
 
Cash and Cash Equivalents at beginning of year
 
2,793,326
  $
1,466,193
 
Cash and Cash Equivalents at end of quarter
$
             3,078,640
  $
            27,481,088
 

 
Contact Information
Rachel Stroer, Investor Relations, (913) 387-2797, info@corridortrust.com
 
 
 
 
 
 
11550 Ash Street, Suite 300  |  Leawood, KS 66211  |  p: 913.981.1020  |  f: 913.981.1021  |  www.tortoiseadvisors.com