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Tortoise Capital Resources Corp. Releases Fiscal 2010 Third Quarter Financial Results

LEAWOOD, Kan., Oct 07, 2010 (BUSINESS WIRE) -- Tortoise Capital Resources Corp. (NYSE: TTO) (the company) today announced that it has filed its Form 10-Q for its third quarter ended Aug. 31, 2010.

·	Net assets of $88.8 million or $9.74 per share as of Aug. 31, 2010, an increase of 12 percent over last quarter

·	Third quarter 2010 distribution of $0.10 per share paid Sept. 1, 2010

On Sept. 1, 2010, 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 is distributions received from investments less total expenses. In May, the company received additional capital gain proceeds of $585,000 from Mowood, LLC as a result of a contingent payment from the February sale of its Timberline Energy subsidiary. TTO elected to include these capital gain proceeds in its distribution last quarter and this quarter, enabling a distribution of $0.10 per share. The company believes it will have sufficient cash flow to pay a $0.10 per share distribution through the first quarter of 2011, subject to Board of Directors approval, continued portfolio company distributions at current levels, and anticipated non-recurring payments from its portfolio companies.

At Aug. 31, 2010, the company's net asset value was $9.74 per share compared to $8.69 per share at May 31, 2010, an increase of approximately 12 percent. The increase in net asset value is largely attributable to the increase in the fair value of International Resource Partners LP (IRP).

As of Aug. 31, 2010, the fair value of the company's investment portfolio (excluding short-term investments) totaled $84.6 million, including equity investments of $79.8 million and debt investments of $4.8 million. The company's portfolio is diversified among approximately 45 percent midstream and downstream investments, 10 percent upstream, and 45 percent in aggregates and coal. The weighted average yield-to-cost on the investment portfolio (excluding short-term investments) as of Aug. 31, 2010 was 5.4 percent.

IRP's significant outperformance relative to budget, along with the recent robust pricing in the IPO and M&A markets for coal producers, resulted in an $11.4 million increase in the fair value of IRP this quarter. IRP continues to significantly outperform due in part to the strong metallurgical coal market, and improved production and cost controls. IRP also increased its quarterly distribution from $0.45 per unit to $0.50 per unit this quarter.

The fair value of VantaCore Partners LP (VantaCore) decreased approximately $1.5 million this quarter. VantaCore was unable to meet its minimum quarterly distribution (MQD) in cash for all unit holders for the quarter ended June 30, 2010. Common unit holders received a cash distribution equal to MQD of $0.475 for the quarter, due to preferred unit holders' acceptance of a paid-in-kind distribution. VantaCore's poor performance has been driven primarily by the underperformance of its Southern Aggregates subsidiary, which has experienced lower demand and pricing coupled with higher than expected costs.

The fair value of High Sierra, inclusive of the interest in the general partner, increased by approximately $550,000 this quarter. Monroe Gas Storage (High Sierra's underground gas storage business unit) cured the alleged technical defaults in its credit agreement which required additional capital investments. Based on recent modeling of the reservoir, the project has shown improved storage capacity which should lead towards significant improvement in 2011 EBITDA. High Sierra did not declare a cash distribution again this quarter as a result of its decision to reserve its DCF for anticipated capital expenditures; a decision its board of directors felt was in the best long-term interests of the partnership. High Sierra extended its existing credit facility through Dec. 15, 2010, and continues discussions with its lenders and expects to reach a long-term solution by the end of 2010. High Sierra reported year-to-date operating results through June 2010 below budget. Its crude oil gathering and natural gas liquids marketing companies continue to underperform due to lack of available credit and decreased margins; however the oilfield water recycling and discharge company continues to exceed budget.

The company will host a conference call at 4 p.m. CDT on Thursday, Oct. 7, 2010 to discuss its financial results for the fiscal quarter ended Aug. 31, 2010. Please dial-in approximately five to 10 minutes prior to the scheduled start time.

U.S./Canada: (877) 941-2333

International: (480) 629-9723

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 Oct. 7, 2010 and continuing until 11:59 p.m. CDT Oct. 21, 2010, by dialing (800) 406-7325 (U.S./Canada). The replay access code is 4358570#. A replay of the webcast will also be available on the company's Web site at www.tortoiseadvisors.com through Oct. 7, 2011.

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 listed energy infrastructure investments, such as pipeline and power companies. As of Sept. 30, 2010, the adviser had approximately $5.2 billion of assets under management in six 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
	August 31, 2010			November 30, 2009
	(Unaudited)
Assets
Investments at fair value, control (cost $19,565,433 and $28,180,070, respectively)	$	24,883,047		$	33,458,046
Investments at fair value, affiliated (cost $31,093,559 and $52,676,299, respectively)		43,753,715			41,658,847
Investments at fair value, non-affiliated (cost $22,748,896 and $9,568,566, respectively)		17,810,327			8,865,047
Total investments (cost $73,407,888 and $90,424,935, respectively)		86,447,089			83,981,940
Receivable for Adviser expense reimbursement		95,587			49,843
Receivable for investments sold		387			-
Dividends receivable		86			87
Deferred tax asset		3,690,739			5,429,391
Prepaid expenses and other assets		42,437			16,792
Total assets		90,276,325			89,478,053
Liabilities
Base management fees payable to Adviser		286,761			299,060
Distribution payable to common stockholders		911,649			-
Accrued expenses and other liabilities		260,223			282,408
Short-term borrowings		-			4,600,000
Total liabilities		1,458,633			5,181,468
Net assets applicable to common stockholders	$	88,817,692		$	84,296,585
Net Assets Applicable to Common Stockholders Consist of:
Warrants, no par value; 945,594 issued and outstanding at August 31, 2010 and November 30, 2009 (5,000,000 authorized)	$	1,370,700		$	1,370,700
Capital stock, $0.001 par value; 9,116,456 shares issued and outstanding at August 31, 2010 and 9,078,090 issued and outstanding at November 30, 2009		9,116			9,078
(100,000,000 shares authorized)
Additional paid-in capital		99,170,032			101,929,307
Accumulated net investment loss, net of income taxes		(3,585,186	)		(3,304,416	)
Accumulated realized loss, net of income taxes		(18,654,924	)		(14,041,614	)
Net unrealized appreciation (depreciation) of investments, net of income taxes		10,507,954			(1,666,470	)
Net assets applicable to common stockholders	$	88,817,692		$	84,296,585
Net Asset Value per common share outstanding (net assets applicable to common stock, divided by common shares outstanding)	$	9.74		$	9.29

Tortoise Capital Resources Corporation
Distributable Cash Flow		For the three months ended August 31, 2010			For the three months ended August 31, 2009			For the nine months ended August 31, 2010			For the nine months ended August 31, 2009
Total from Investments
	Distributions from investments	$	889,895		$	1,635,662		$	3,226,050		$	6,179,444
	Distributions paid in stock		21,746			-			42,718			-
	Interest income from investments		182,622			201,918			563,675			605,916
	Dividends from money market mutual funds		230			304			680			1,449
	Other income		8,000			15,000			27,080			45,000
Total from Investments			1,102,493			1,852,884			3,860,203			6,831,809
Operating Expenses Before Leverage Costs
	Advisory fees (net of expense reimbursement by Adviser)		191,174			267,982			707,529			877,111
	Other operating expenses		168,115			266,601			558,860			720,196
Total Operating Expenses, before Leverage Costs			359,289			534,583			1,266,389			1,597,307
	Distributable cash flow before leverage costs		743,204			1,318,301			2,593,814			5,234,502
	Leverage costs		-			134,987			45,619			562,945
	Distributable Cash Flow	$	743,204		$	1,183,314		$	2,548,195		$	4,671,557
	Capital gain proceeds		292,500			-			585,000			-
	Cash Available for Distribution	$	1,035,704		$	1,183,314		$	3,133,195		$	4,671,557
Distributions paid on common stock		$	911,646		$	1,173,679		$	3,001,701		$	4,405,226
Payout percentage for period (1)			88	%		99	%		96	%		94	%
DCF/GAAP Reconciliation
	Distributable Cash Flow	$	743,204		$	1,183,314		$	2,548,195		$	4,671,557
	Adjustments to reconcile to Net Investment Income (Loss), before Income Taxes:
	Distributions paid in stock (2)		(21,746	)		-			(42,718	)		56,514
	Return of capital on distributions received from equity investments		(1,057,882	)		(1,075,398	)		(2,713,281	)		(5,792,784	)
	Non-recurring professional fees		(202,619	)		-			(241,500	)		-
	Net Investment Income (Loss), before Income Taxes	$	(539,043	)	$	107,916		$	(449,304	)	$	(1,064,713	)
(1)	Distributions paid as a percentage of Cash Available for Distribution.
(2)	Distributions paid in stock for the three and nine months ended August 31, 2010 were paid as part of normal operations and are included in DCF. Distributions paid in stock for the nine months ended August 31, 2009 were paid in stock as a result of credit

Tortoise Capital Resources Corporation
STATEMENTS OF OPERATIONS
(Unaudited)
	For the three months ended August 31, 2010			For the three months ended August 31, 2009			For the nine months ended August 31, 2010			For the nine months ended August 31, 2009
Investment Income
Distributions from investments
Control investments	$	485,379		$	555,879		$	1,519,638		$	1,714,309
Affiliated investments		250,000			856,891			1,331,891			2,522,267
Non-affiliated investments		154,516			222,892			374,521			1,999,382
Total distributions from investments		889,895			1,635,662			3,226,050			6,235,958
Less return of capital on distributions		(1,057,882	)		(1,075,398	)		(2,713,281	)		(5,792,784	)
Net distributions from investments		(167,987	)		560,264			512,769			443,174
Interest income from control investments		182,622			201,918			563,675			605,916
Dividends from money market mutual funds		230			304			680			1,449
Fee income		8,000			15,000			27,080			45,000
Total Investment Income		22,865			777,486			1,104,204			1,095,539
Operating Expenses
Base management fees		286,761			321,578			906,387			1,052,533
Professional fees		290,606			176,947			529,461			451,056
Directors' fees		17,543			22,080			76,975			65,817
Reports to stockholders		16,053			15,409			47,930			45,890
Administrator fees		13,382			15,007			42,298			49,118
Fund accounting fees		6,442			8,032			20,453			24,772
Registration fees		6,297			7,891			19,148			23,501
Stock transfer agent fees		3,403			3,556			9,995			10,140
Franchise tax expense		2,798			-			10,328			-
Custodian fees and expenses		1,457			5,315			5,787			13,075
Other expenses		12,753			12,364			37,985			36,827
Total Operating Expenses		657,495			588,179			1,706,747			1,772,729
Interest expense		-			134,987			45,619			562,945
Total Expenses		657,495			723,166			1,752,366			2,335,674
Less expense reimbursement by Adviser		(95,587	)		(53,596	)		(198,858	)		(175,422	)
Net Expenses		561,908			669,570			1,553,508			2,160,252
Net Investment Income (Loss), before Income Taxes		(539,043	)		107,916			(449,304	)		(1,064,713	)
Deferred tax benefit (expense)		202,195			(26,733	)		168,534			(119,633	)
Net Investment Income (Loss)		(336,848	)		81,183			(280,770	)		(1,184,346	)
Realized and Unrealized Gain (Loss) on Investments
Net realized gain on control investments		-			-			2,163,001			-
Net realized loss on affiliated investments		-			(165,427	)		(9,624,557	)		(338,572	)
Net realized loss on non-affiliated investments		(1,340,452	)		(10,591,042	)		(2,552,341	)		(18,252,872	)
Net realized loss, before income taxes		(1,340,452	)		(10,756,469	)		(10,013,897	)		(18,591,444	)
Deferred tax benefit (expense)		4,102,850			(1,468,249	)		5,400,587			(2,088,966	)
Net realized gain (loss) on investments		2,762,398			(12,224,718	)		(4,613,310	)		(20,680,410	)
Net unrealized appreciation (depreciation) of control investments		(729,984	)		1,130,655			39,638			4,288,137
Net unrealized appreciation (depreciation) of affiliated investments		12,627,879			(311,350	)		23,677,608			(5,215,233	)
Net unrealized appreciation (depreciation) of non-affiliated investments		1,092,409			9,907,190			(4,235,050	)		15,102,387
Net unrealized appreciation, before income taxes		12,990,304			10,726,495			19,482,196			14,175,291
Deferred tax benefit (expense)		(4,872,663	)		1,319,533			(7,307,772	)		1,592,760
Net unrealized appreciation of investments		8,117,641			12,046,028			12,174,424			15,768,051
Net Realized and Unrealized Gain (Loss) on Investments		10,880,039			(178,690	)		7,561,114			(4,912,359	)
Net Increase (Decrease) in Net Assets Applicable to Common Stockholders
Resulting from Operations	$	10,543,191		$	(97,507	)	$	7,280,344		$	(6,096,705	)
Net Increase (Decrease) in Net Assets Applicable to Common Stockholders
Resulting from Operations Per Common Share:
Basic and Diluted	$	1.16		$	(0.01	)	$	0.80		$	(0.68	)
Weighted Average Shares of Common Stock Outstanding:
Basic and Diluted		9,116,456			9,014,094			9,098,005			8,997,031

SOURCE: Tortoise Capital Resources Corp.

Tortoise Capital Advisors, LLC

Pam Kearney, 866-362-9331

pkearney@tortoiseadvisors..com