ndpnq.htm




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY




Investment Company Act file number 811-22690



Tortoise Energy Independence Fund, Inc.
(Exact name of registrant as specified in charter)


11550 Ash Street, Suite 300, Leawood, KS 66211
(Address of principal executive offices) (Zip code)



Terry Matlack
Diane Bono
11550 Ash Street, Suite 300, Leawood, KS 66211

(Name and address of agent for service)



913-981-1020
Registrant's telephone number, including area code



Date of fiscal year end: November 30


Date of reporting period: February 28, 2014
 
 
 
Item 1. Schedule of Investments.

Tortoise Energy Independence Fund, Inc.
            
SCHEDULE OF INVESTMENTS (Unaudited)
            
               
     
February 28, 2014
  
Common Stock - 82.7%(1)
  
Shares
    
Fair Value
  
Crude/Refined Products Pipelines - 0.6%(1)
            
United States - 0.6%(1)
            
Plains GP Holdings, L.P.(2)
     91,716     $ 2,568,048  
                   
Natural Gas Pipelines - 4.4%(1)
                
United States - 4.4%(1)
                
EQT Corporation(3)
     173,400       17,737,086  
                   
Oil and Gas Production - 77.7%(1)
                
Canada - 9.5%(1)
                
ARC Resources Ltd.
     334,600       9,026,011  
Cenovus Energy Inc.
     153,200       4,061,332  
Crescent Point Energy Corp.
     285,700       10,026,462  
Enerplus Corporation
     275,800       5,466,356  
Penn West Petroleum Ltd.
     6,400       52,608  
Suncor Energy Inc.(3)
     286,100       9,452,744  
The Netherlands - 2.1%(1)
                
Royal Dutch Shell plc (ADR)(2)
     114,500       8,343,615  
United Kingdom - 2.4%(1)
                
BP p.l.c. (ADR)
     192,800       9,757,608  
United States - 63.7%(1)
                
Anadarko Petroleum Corporation(3)
     314,800       26,493,568  
Antero Resources Corporation(4)
     150,610       9,087,807  
Apache Corporation(3)
     111,100       8,809,119  
Cabot Oil & Gas Corporation
     327,600       11,466,000  
Chesapeake Energy Corporation(3)
     478,400       12,395,344  
Chevron Corporation
     70,400       8,119,232  
Concho Resources Inc.(3)(4)
     66,200       8,018,806  
ConocoPhillips
     138,700       9,223,550  
Continental Resources, Inc.(3)(4)
     177,200       21,178,944  
EOG Resources, Inc.(3)
     174,800       33,110,616  
Hess Corporation
     25,700       2,056,771  
Jones Energy, Inc.(4)
     162,300       2,535,126  
Marathon Oil Corporation(3)
     280,400       9,393,400  
Noble Energy, Inc.(3)
     124,300       8,546,868  
Occidental Petroleum Corporation
     239,000       23,068,280  
Pioneer Natural Resources Company(3)
     166,500       33,496,470  
Range Resources Corporation(3)
     224,200       19,292,410  
Rice Energy Inc.(4)
     52,646       1,263,504  
RSP Permian, Inc.(4)
     110,556       3,073,457  
Whiting Petroleum Corporation(3)(4)
     82,100       5,641,091  
                312,457,099  
                   
Total Common Stock (Cost $281,036,434)
             332,762,233  
                   
Master Limited Partnerships and Related Companies - 32.0%(1)
                
Crude/Refined Products Pipelines - 11.3%(1)
                
United States - 11.3%(1)
                
Buckeye Partners, L.P.(2)
     61,200       4,481,676  
Enbridge Energy Management, L.L.C.(2)(5)
     426,508       11,409,091  
Magellan Midstream Partners, L.P.(2)
     92,000       6,225,640  
MPLX LP(2)
     117,232       5,722,094  
Phillips 66 Partners LP(2)
     65,900       3,019,538  
Plains All American Pipeline, L.P.(2)
     179,229       9,708,835  
Rose Rock Midstream, L.P.(2)
     32,489       1,264,472  
Tesoro Logistics LP(2)
     47,000       2,829,400  
Valero Energy Partners LP(2)
     26,106       965,661  
 
               45,626,407  
Natural Gas/Natural Gas Liquids Pipelines - 7.6%(1)
                
United States - 7.6%(1)
                
Energy Transfer Partners, L.P.(2)
     77,700       4,314,681  
Enterprise Products Partners L.P.(2)
     141,100       9,469,221  
Kinder Morgan Management, LLC(2)(5)
     115,000       8,026,977  
Regency Energy Partners LP(2)
     222,350       5,836,688  
Williams Partners L.P.(2)
     57,300       2,842,653  
                30,490,220  
Natural Gas Gathering/Processing - 4.5%(1)
                
United States - 4.5%(1)
                
Access Midstream Partners, L.P.(2)
     58,900       3,324,905  
Crosstex Energy, L.P.(2)
     86,700       2,678,163  
DCP Midstream Partners, LP(2)
     94,524       4,612,771  
Targa Resources Partners LP(2)
     95,800       5,143,502  
Western Gas Partners LP(2)
     34,300       2,170,847  
                17,930,188  
Oil and Gas Production — 8.6%(1)
                
United States — 8.6%(1)
                
BreitBurn Energy Partners L.P.(2)
     621,400       12,421,786  
EV Energy Partners, L.P.(2)
     82,800       2,904,624  
Legacy Reserves, L.P.(2)
     486,608       12,846,451  
Vanguard Natural Resources, LLC(2)
     212,100       6,333,306  
                34,506,167  
                   
Total Master Limited Partnerships and Related Companies (Cost $115,315,842)
             128,552,982  
                   
Short-Term Investment - 0.1%(1)
                
United States Investment Company - 0.1%(1)
                
Fidelity Institutional Money Market Portfolio - Class I, 0.04%(6) (Cost $492,574)
     492,574       492,574  
                   
Total Investments - 114.8%(1) (Cost $396,844,850)
             461,807,789  
Total Value of Options Written (Premiums received $1,607,046) - (0.4%)(1)
             (1,598,527 )
Other Assets and Liabilities - (14.4%)(1)
             (58,071,755 )
Total Net Assets Applicable to Common Stockholders - 100.0%(1)
           $ 402,137,507  
                   
                   
(1)
Calculated as a percentage of net assets applicable to common stockholders.
                
(2)
All or a portion of the security is segregated as collateral for the margin borrowing facility. 
  
(3)
All or a portion of the security represents cover for outstanding call option contracts written.
          
(4)
Non-income producing security.
                
(5)
Security distributions are paid-in-kind.
                
(6)
Rate indicated is the current yield as of February 28, 2014.
                
                   
Key to abbreviation
                
ADR = American Depository Receipts
                


 
 
 
Tortoise Energy Independence Fund, Inc.
              
SCHEDULE OF OPTIONS WRITTEN (Unaudited)
              
February 28, 2014
                    
                     
Call Options Written
Expiration
Date
  
Strike Price
    
Contracts
    
Fair Value
  
Anadarko Petroleum Corporation
March 2014
   $ 90.00       1,574     $ (45,646 )
Apache Corporation
March 2014
     87.50       1,111       (9,999 )
Chesapeake Energy Corporation
March 2014
     29.00       4,784       (38,272 )
Concho Resources Inc.
March 2014
     125.00       662       (113,202 )
Continental Resources, Inc.
March 2014
     130.00       1,772       (106,320 )
EOG Resources, Inc.
March 2014
     195.00       1,748       (342,608 )
EQT Corporation
March 2014
     105.00       868       (104,160 )
EQT Corporation
March 2014
     110.00       866       (28,145 )
Marathon Oil Corporation
March 2014
     35.00       2,804       (39,256 )
Noble Energy, Inc.
March 2014
     75.00       1,243       (15,537 )
Pioneer Natural Resources Company
March 2014
     205.00       300       (138,000 )
Pioneer Natural Resources Company
March 2014
     210.00       504       (141,120 )
Pioneer Natural Resources Company
March 2014
     215.00       802       (136,340 )
Range Resources Corporation
March 2014
     92.50       2,242       (98,648 )
Suncor Energy Inc.
March 2014
     35.00       2,861       (22,888 )
Whiting Petroleum Corporation
March 2014
     67.50       821       (218,386 )
                           
Total Value of Call Options Written (Premiums received $1,607,046)
             $ (1,598,527 )
                           


 

 
 
 

 
Various inputs are used in determining the fair value of the Company’s financial instruments.  These inputs are summarized in the three broad levels listed below:
 
Level 1 – quoted prices in active markets for identical investments
Level 2 – other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.)
Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)
 
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following table provides the fair value measurements of applicable Company assets and liabilities by level within the fair value hierarchy as of February 28, 2014.  These assets and liabilities are measured on a recurring basis.

Description
  
Fair Value at
February 28, 2014
    
Level 1
    
Level 2
    
Level 3
  
Assets
                        
Equity Securities:
                        
Common Stock (a)
   $ 332,762,233     $ 332,762,233     $ -     $ -  
Master Limited Partnerships and Related Companies(a)
     128,552,982       128,552,982       -       -  
Total Equity Securities
     461,315,215       461,315,215       -       -  
Other Securities:
                                
Short-Term Investment(b)
     492,574       492,574       -       -  
Total Assets
   $ 461,807,789     $ 461,807,789     $ -     $ -  
Liabilities
                                
Written Call Options
   $ 1,598,527     $ 1,598,527     $ -     $ -  

(a)  
All other industry classifications are identified in the Schedule of Investments.
(b)  
Short-term investment is a sweep investment for cash balances in the Company at February 28, 2014.

The Company did not hold any Level 3 securities during the period ended February 28, 2014.  The Company utilizes the beginning of reporting period method for determining transfers between levels.  There were no transfers between levels for the period ended February 28, 2014.

Valuation Techniques
In general, and where applicable, the Company uses readily available market quotations based upon the last updated sales price from the principal market to determine fair value.  This pricing methodology applies to the Company’s Level 1 investments and liabilities. 

An equity security of a publicly traded company acquired in a private placement transaction without registration under the Securities Act of 1933, as amended (the “1933 Act”), is subject to restrictions on resale that can affect the security's fair value.  If such a security is convertible into publicly-traded common shares, the security generally will be valued at the common share market price adjusted by a percentage discount due to the restrictions and categorized as Level 2 in the fair value hierarchy.  If the security has characteristics that are dissimilar to the class of security that trades on the open market, the security will generally be valued and categorized as Level 3 in the fair value hierarchy.
 
As of February 28, 2014, the aggregate cost of securities for federal income tax purposes was $393,357,834.  The aggregate gross unrealized appreciation for all securities in which there was an excess of fair value over tax cost was $74,310,289, the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over fair value was $5,860,334 and the net unrealized appreciation was $68,449,955.
 
 
 

Item 2. Controls and Procedures.
(a)
The registrant’s Chief Executive Officer and its Chief Financial Officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.

(b)
There was no change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

Item 3. Exhibits.
Separate certifications for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)) are filed herewith.

 
 
 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


  Tortoise Energy Independence Fund, Inc.  
       
Date: April 22, 2014
By:
/s/ Terry Matlack  
    Terry Matlack  
    Chief Executive Officer  
       



Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

  Tortoise Energy Independence Fund, Inc.  
       
Date: April 22, 2014
By:
/s/ Terry Matlack  
    Terry Matlack  
    Chief Executive Officer  
       
  Tortoise Energy Independence Fund, Inc.  
       
Date: April 22, 2014
By:
/s/ P. Bradley Adams  
    P. Bradley Adams  
    Chief Financial Officer