Tortoise Capital Resources Corp. Releases Fiscal 2010 First Quarter Financial Results
 
 
LEAWOOD, Kan. - April 08, 2010 - 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.
 
 
Leverage
 
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 www.tortoiseadvisors.com.
 
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 www.tortoiseadvisors.com 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 www.tortoiseadvisors.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 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
      
STATEMENTS OF ASSETS & LIABILITIES
            
             
             
   
February 28, 2010
    
November 30, 2009
  
   
(Unaudited)
        
Assets
            
       Investments at fair value, control (cost $20,952,193 and $28,180,070, respectively)
   $ 27,765,626     $ 33,458,046  
       Investments at fair value, affiliated (cost $51,439,159 and $52,676,299, respectively)
     41,629,781       41,658,847  
       Investments at fair value, non-affiliated (cost $15,139,576 and $9,568,566, respectively)
     14,633,831       8,865,047  
     Total investments (cost $87,530,928 and $90,424,935, respectively)
     84,029,238       83,981,940  
           Receivable for Adviser expense reimbursement
     51,654       49,843  
           Interest receivable from control investments
     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  
                 
Liabilities
                
    Base management fees payable to Adviser
     309,922       299,060  
    Distribution payable to common stockholders
     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 stockholders
   $ 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 November 30, 2009
                
    (5,000,000 authorized)
   $ 1,370,700     $ 1,370,700  
        Capital stock, $0.001 par value; 9,078,090 shares issued and
                
    outstanding at February 28, 2010 and November 30, 2009
                
    (100,000,000 shares authorized)
     9,078       9,078  
    Additional paid-in capital
     100,749,155       101,929,307  
    Accumulated net investment loss, net of income taxes
     (3,123,409 )     (3,304,416 )
    Accumulated realized loss, net of income taxes
     (12,696,417 )     (14,041,614 )
        Net unrealized appreciation (depreciation) of investments, net of income taxes
     824,849       (1,666,470 )
    Net assets applicable to common stockholders
   $ 87,133,956     $ 84,296,585  
                 
        Net Asset Value per common share outstanding (net assets applicable
                
        to common stock, divided by common shares outstanding)
   $ 9.60     $ 9.29  
                 
 
 
 
 
 


             
               
Distributable Cash Flow
  
For the three months ended February 28, 2010
    
For the three months ended 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 funds
     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 reimbursement by Adviser)
     258,268       327,308  
 
Other operating expenses
     174,568       217,582  
    Total Operating Expenses, before Leverage Costs
     432,836       544,890  
 
Distributable cash flow before leverage costs
     1,257,960       2,364,068  
 
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 Taxes:
          
 
Distributions paid in stock (2)
     -       28,136  
 
Return of capital on distributions received from equity investments
     (998,640 )     (1,853,248 )
 
Net Investment Income, before Income Taxes
   $ 213,701     $ 367,840  
                   
                   
(1)
Distributions paid as a percentage of Distributable Cash Flow.
          
(2)
The only distributions paid in stock for the three months ended February 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 Corporation
              
STATEMENTS OF OPERATIONS
              
(Unaudited)
              
   
For the three months ended February 28, 2010
For the three months ended February 28, 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 distributions
    
                    (998,640
 )    
                 (1,853,248
 ) 
            Net distributions from investments
    
                      490,116
    
                      866,523
  
   Interest income from control investments
    
                      191,431
    
                      201,598
  
   Dividends from money market mutual funds
    
                             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 Adviser
    
                      (51,654
 )    
                      (65,461
 ) 
    Net Expenses
    
                      478,455
    
                      716,006
  
Net Investment Income, before Income Taxes
    
                      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 investments
    
                   1,578,001
    
                                 -
  
   Net realized loss on affiliated investments
    
                      (17,445
 )    
                    (499,818
 ) 
   Net realized gain on non-affiliated investments
    
                        27,612
    
                                 -
  
    Net realized gain (loss), before income taxes
    
                   1,588,168
    
                    (499,818
 ) 
     Deferred tax benefit (expense)
    
                    (242,971
 )    
                      137,487
  
       Net realized gain (loss) on investments
    
                   1,345,197
    
                    (362,331
 ) 
   Net unrealized appreciation of control investments
    
                   1,535,457
    
                      127,710
  
   Net unrealized appreciation (depreciation) of affiliated investments
    
                   1,208,074
    
                 (8,278,048
 )
   Net unrealized appreciation (depreciation) of non-affiliated investments
  
                      197,774
    
                 (4,783,720
 )
    Net unrealized appreciation (depreciation), before income taxes
    
                   2,941,305
    
               (12,934,058
 )
     Deferred tax benefit (expense)
    
                    (449,986
 )   
                   3,557,817
  
       Net unrealized appreciation (depreciation) of investments
    
                   2,491,319
    
                 (9,376,241
 )
Net Realized and Unrealized Gain (Loss) on Investments
    
                   3,836,516
    
                 (9,738,572
 )
               
Net Increase (Decrease) in Net Assets Applicable to Common Stockholders
            
   Resulting from Operations
   $
4,017,523
    
 $              (9,471,915
 )
               
Net Increase (Decrease) in Net Assets Applicable to Common Stockholders
            
   Resulting from Operations Per Common Share:
              
    Basic and Diluted
   $
0.44
    
 $                       (1.06
 )
               
Weighted Average Shares of Common Stock Outstanding:
              
    Basic and Diluted
    
9,078,090
    
8,962,147
  
               
               

Contact information:
Tortoise Capital Advisors, LLC
Pam Kearney
Investor Relations
(866) 362-9331
pkearney@tortoiseadvisors.com