Tortoise Capital Resources Corp. Releases Fiscal 2011 First Quarter Financial Results
 
 
 LEAWOOD, Kan.--April 7, 2011--(BUSINESS WIRE)-- Tortoise Capital Resources Corp. (NYSE: TTO) (the company) today announced that it has filed its Form 10-Q for the first quarter ended Feb. 28, 2011.
 
Recent Highlights
 
·  
IRP entered into definitive agreement to sell its partnership interests to James River Coal Company with expected proceeds of approximately $31 million to TTO at close
 
·  
Net assets of $95.7 million or $10.46 per share as of Feb. 28, 2011
 
·  
First quarter 2011 distribution of $0.10 per share paid March 1, 2011
 
·  
Quarterly distribution guidance for 2011 of at least $0.10 per share
 
Distribution Guidance
 
On March 1, 2011, 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 are distributions received from investments less total expenses. Assuming the sale of International Resource Partners LP (IRP) closes in the expected timeframe, and subject to board approval, the company anticipates paying a distribution of not less than $0.10 per share, per quarter, for the remainder of fiscal 2011. In order to sustain this distribution level for 2011, the company may elect to include a small portion of the proceeds from the IRP sale, depending on the operating performance of selected portfolio companies and their ability to return to near historic distribution levels.
 
Net Asset Value
 
On Feb. 28, 2011, the company's net asset value was $10.46 per share compared to $10.44 per share at Nov. 30, 2010. The increase in net asset value is primarily a result of the increase in the fair value of IRP, offset by a decrease in the fair value of Vantacore.
 
Portfolio Review
 
As of Feb. 28, 2011, the fair value of the company's investment portfolio (excluding short-term investments) totaled $93.9 million, with approximately 77 percent of the portfolio in private company investments totaling $72.1 million and approximately 23 percent in publicly-traded investments totaling $21.8 million. The company's portfolio is diversified among approximately 51 percent midstream and downstream investments, 4 percent upstream, and 45 percent in aggregates and coal.
 
The fair value of IRP increased approximately $2.3 million this quarter. IRP increased its quarterly distribution from $0.55 per unit last quarter to $0.60 per unit this quarter. On March 6, 2011, IRP entered into a definitive agreement to sell its partnership interests to James River Coal Company (NASDAQ: JRCC). This transaction is expected to close in the first half of 2011 subject to completion of various closing conditions. TTO's portion of the initial sales proceeds is expected to be approximately $31.1 million in cash, with an additional $2.1 million held in escrow for a period of up to 14 months. The release of escrow funds is contingent upon a number of factors including coal reserves and resolution of outstanding regulatory items. The company anticipates investing the proceeds of the sale of IRP in publicly traded MLPs and cash equivalents, pending being deployed in new qualifying investments and subject to limitations on publicly-traded investments in the BDC structure.
 
The fair value of Mowood, LLC decreased approximately $0.6 million this quarter, generally due to a decrease in the probability of receiving future contingent payments related to the Timberline Energy, LLC sale. Omega Pipeline Company, LLC continues to perform at budget, supported by the persistent growth of the Fort Leonard Wood Military Base.
 
The fair value of VantaCore Partners LP decreased approximately $1.9 million this quarter. VantaCore was unable to meet its minimum quarterly distribution ("MQD") of $0.475 per unit for its quarter ended Dec. 31, 2010. Common and preferred unitholders elected to receive their distributions as a combination of cash and the remainder in newly issued preferred units. TTO received 23,185 preferred units in addition to $0.09 in cash per common unit. VantaCore reported year-to-date EBITDA through Dec. 31, 2010 below budget. The Southern Aggregates property in Louisiana continues to fall short of budget but VantaCore is optimistic that signs of improvement in the building industry in the area, along with cost-cutting measures initiated by management, will help improve their performance in 2011.
 
The fair value of High Sierra Energy LP decreased slightly during the quarter. High Sierra has not made cash distributions to its LP and GP unit holders for the last four consecutive quarters. On March 16, 2011, High Sierra closed on a new $215 million, 3-year committed senior secured credit facility led by BNP Paribas. The new credit facility is expected to provide a level of stability and flexibility to meet the needs of the partnership's existing operations and provide a base of working capital to take advantage of market opportunities. The new facility also financed the buyout of High Sierra's minority partners at Anticline Disposal, resulting in High Sierra owning 100 percent of the membership interests of that business.
 
Earnings Call
 
On April 8, 2011, beginning at 1 p.m. Central, TTO will host its Annual Meeting. In conjunction with the Annual Meeting, TTO will host a conference call and webcast in listen-only format. Participants should dial-in to 877-941-2333 approximately five to 10 minutes prior to the scheduled start time. A link to the webcast will be accessible at www.tortoiseadvisors.com.
 
Immediately following its Annual Meeting, the company will host its first quarter earnings conference call during which it will discuss its investment and ongoing distribution strategy. Conference call participants will have the opportunity to ask questions following management's prepared remarks.
 
A replay of the call will be available beginning at 3:00 p.m. Central on April 8, 2011 and continuing until April 15, 2011, by dialing (800) 406-7325. The replay access code is 4421399#. A replay of the webcast will also be available on the company's website at www.tortoiseadvisors.com through April 8, 2012.
 
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 managing portfolios of MLPs and other energy companies. As of March 31, 2011 the adviser had approximately $6.6 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
            
             
             
   
February 28, 2011
    
November 30, 2010
  
   
(Unaudited)
        
Assets
            
Investments at fair value, control (cost $4,593,000 and $18,122,054, respectively)
   $ 8,736,367     $ 23,260,566  
Investments at fair value, affiliated (cost $44,774,854 and $31,329,809, respectively)
     63,310,963       49,066,009  
Investments at fair value, non-affiliated (cost $22,311,998 and $21,628,965, respectively)
     24,058,040       22,875,848  
Total investments (cost $71,679,852 and $71,080,828, respectively)
     96,105,370       95,202,423  
Receivable for Adviser expense reimbursement
     117,340       109,145  
Receivable for investments sold
     -       5,198  
Interest receivable from control investments
     -       42,778  
 Dividends receivable
     50       83  
  Deferred tax asset
     919,005       656,743  
Prepaid expenses and other assets
     30,994       25,023  
Total assets
     97,172,759       96,041,393  
                 
Liabilities
                
Base management fees payable to Adviser
     352,020       327,436  
Distribution payable to common stockholders
     914,654       -  
Accrued expenses and other liabilities
     228,293       234,784  
Total liabilities
     1,494,967       562,220  
Net assets applicable to common stockholders
   $ 95,677,792     $ 95,479,173  
                 
Net Assets Applicable to Common Stockholders Consist of:
                
Warrants, no par value; 945,594 issued and outstanding
                
at February 28, 2011 and November 30, 2010
                
(5,000,000 authorized)
   $ 1,370,700     $ 1,370,700  
Capital stock, $0.001 par value; 9,146,506 shares issued and outstanding at
                
February 28, 2011 and November 30, 2010 (100,000,000 shares authorized)
     9,147       9,147  
Additional paid-in capital
     97,530,301       98,444,952  
Accumulated net investment loss, net of income taxes
     (3,195,579 )     (3,308,522 )
Accumulated realized loss, net of income taxes
     (17,730,436 )     (18,532,648 )
Net unrealized appreciation of investments, net of income taxes
     17,693,659       17,495,544  
Net assets applicable to common stockholders
   $ 95,677,792     $ 95,479,173  
                 
Net Asset Value per common share outstanding (net assets applicable
                
to common stock, divided by common shares outstanding)
   $ 10.46     $ 10.44  
                 
                 
 
 
Tortoise Capital Resources Corporation
            
Distributable Cash Flow
            
 (Unaudited)            
     
Three Months
Ended
February 28, 2011
    
Three Months
Ended
February 28, 2010
  
               
Total from Investments
            
 
Distributions from investments
   $ 731,990     $ 1,488,756  
 
Distributions paid in stock
     23,367       -  
 
Interest income from investments
     135,330       191,431  
 
Dividends from money market mutual funds
     190       217  
 
Other income
     -       10,392  
Total from Investments
     890,877       1,690,796  
                   
Operating Expenses Before Leverage Costs
                
 
Advisory fees (net of expense reimbursement by Adviser)
     234,680       258,268  
 
Other operating expenses
     153,843       174,568  
Total Operating Expenses, before Leverage Costs
     388,523       432,836  
 
Distributable cash flow before leverage costs
     502,354       1,257,960  
 
Leverage costs
     -       45,619  
 
Distributable Cash Flow
   $ 502,354     $ 1,212,341  
                   
Distributions paid on common stock
   $ 914,651     $ 1,180,152  
                   
Payout percentage for period (1)
     182 %     97 %
                   
DCF/GAAP Reconciliation
                
 
Distributable Cash Flow
   $ 502,354     $ 1,212,341  
 
Adjustments to reconcile to Net Investment Income, before Income Taxes:
                
 
   Distributions paid in stock (2)
     (23,367 )     -  
 
   Return of capital on distributions received from equity investments
     (305,724 )     (998,640 )
 
Net Investment Income, before Income Taxes
   $ 173,263     $ 213,701  
                   
(1)
Distributions paid as a percentage of Distributable Cash Flow
                
(2)
Distributions paid in stock for the three months ended February 28, 2011 were paid as part of normal operations and are included in DCF.
  
                   
 
 
 
 
 
Tortoise Capital Resources Corporation
            
STATEMENTS OF OPERATIONS
            
(Unaudited)
            
   
For the three
months ended February 28, 2011
    
For the three
months ended February 28, 2010
  
Investment Income
            
   Distributions from investments
            
Control investments
   $ 70,167     $ 555,879  
Affiliated investments
     384,009       856,892  
Non-affiliated investments
     277,815       75,985  
   Total distributions from investments
     731,991       1,488,756  
   Less return of capital on distributions
     (305,725 )     (998,640 )
            Net distributions from investments
     426,266       490,116  
   Interest income from control investments
     135,330       191,431  
   Dividends from money market mutual funds
     190       217  
   Fee income
     -       10,392  
Total Investment Income
     561,786       692,156  
                 
Operating Expenses
                
   Base management fees
     352,020       309,922  
   Professional fees
     80,876       85,162  
   Directors' fees
     14,573       26,161  
   Stockholder communication expenses
     12,912       15,703  
   Administrator fees
     9,387       14,460  
   Fund accounting fees
     7,328       6,972  
   Registration fees
     6,160       6,355  
   Stock transfer agent fees
     3,353       3,130  
   Franchise tax expense
     4,998       2,572  
   Custodian fees and expenses
     1,382       1,575  
   Other expenses
     12,874       12,478  
Total Operating Expenses
     505,863       484,490  
   Interest expense
     -       45,619  
Total Expenses
     505,863       530,109  
   Less expense reimbursement by Adviser
     (117,340 )     (51,654 )
Net Expenses
     388,523       478,455  
Net Investment Income, before Income Taxes
     173,263       213,701  
     Deferred tax expense
     (60,320 )     (32,694 )
Net Investment Income
     112,943       181,007  
                 
Realized and Unrealized Gain (Loss) on Investments
                
   Net realized gain on control investments
     -       1,578,001  
   Net realized loss on affiliated investments
     -       (17,445 )
   Net realized gain on non-affiliated investments
     373,822       27,612  
Net realized gain, before income taxes
     373,822       1,588,168  
Deferred tax benefit (expense)
     428,390       (242,971 )
Net realized gain on investments
     802,212       1,345,197  
Net unrealized appreciation (depreciation) of control investments
     (995,145 )     1,535,457  
   Net unrealized appreciation of affiliated investments
     799,909       1,208,074  
   Net unrealized appreciation of non-affiliated investments
     499,159       197,774  
Net unrealized appreciation, before income taxes
     303,923       2,941,305  
Deferred tax expense
     (105,808 )     (449,986 )
Net unrealized appreciation of investments
     198,115       2,491,319  
Net Realized and Unrealized Gain on Investments
     1,000,327       3,836,516  
                 
Net Increase in Net Assets Applicable to Common Stockholders
                
   Resulting from Operations
   $ 1,113,270     $ 4,017,523  
                 
Net Increase in Net Assets Applicable to Common Stockholders
                
   Resulting from Operations Per Common Share:
                
Basic and Diluted
   $ 0.12     $ 0.44  
                 
Weighted Average Shares of Common Stock Outstanding:
                
Basic and Diluted
     9,146,506       9,078,090  

 
 
Tortoise Capital Advisors, LLC
Pam Kearney, 866-362-9331
Investor Relations
pkearney@tortoiseadvisors.com