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
Michelle Kelly
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, 2013
 
 
 
Item 1. Schedule of Investments.

 
Tortoise Energy Independence Fund, Inc.
            
SCHEDULE OF INVESTMENTS (Unaudited)
            
     
February 28, 2013
  
Common Stock - 81.1% (1)
  
Shares
    
Fair Value
  
Natural Gas Pipelines - 2.5% (1)
            
United States - 2.5% (1)
            
EQT Corporation
     138,100     $ 8,712,729  
                   
Oil and Gas Production - 78.6% (1)
                
Canada - 11.7% (1)
                
ARC Resources Ltd.
     334,600       8,435,976  
Canadian Natural Resources Limited (2)
     191,500       5,838,835  
Cenovus Energy Inc.
     126,700       4,093,677  
Crescent Point Energy Corp.
     285,700       10,873,915  
Enerplus Corporation
     275,800       3,739,848  
Penn West Petroleum Ltd.
     266,400       2,589,408  
Suncor Energy Inc.
     183,200       5,541,800  
The Netherlands - 2.2% (1)
                
Royal Dutch Shell plc (ADR)
     114,500       7,516,925  
United Kingdom - 2.2% (1)
                
BP p.l.c. (ADR) (2)
     192,800       7,789,120  
United States - 62.5% (1)
                
Anadarko Petroleum Corporation (2)
     274,100       21,812,878  
Apache Corporation (2)
     197,500       14,668,325  
Cabot Oil & Gas Corporation (2)
     90,800       5,626,876  
Chesapeake Energy Corporation (2)
     521,000       10,503,360  
Chevron Corporation
     70,400       8,247,360  
Concho Resources Inc. (2)(3)
     79,900       7,187,804  
ConocoPhillips
     138,700       8,037,665  
Continental Resources, Inc. (2)(3)
     222,200       19,553,600  
Denbury Resources Inc. (2)(3)
     213,800       3,874,056  
Devon Energy Corporation (2)
     112,000       6,077,120  
EOG Resources, Inc. (2)
     152,300       19,145,633  
Hess Corporation (2)
     66,300       4,408,950  
Marathon Oil Corporation
     280,400       9,393,400  
Newfield Exploration Company (2)(3)
     120,100       2,776,712  
Noble Energy, Inc.
     36,400       4,034,212  
Occidental Petroleum Corporation
     247,000       20,335,510  
Pioneer Natural Resources Company (2)
     176,800       22,243,208  
QEP Resources, Inc.
     75,700       2,305,822  
Range Resources Corporation (2)
     208,300       15,997,440  
Southwestern Energy Company (2)(3)
     120,800       4,139,816  
Whiting Petroleum Corporation (2)(3)
     165,000       8,035,500  
                274,824,751  
                   
Total Common Stock (Cost $278,502,584)
             283,537,480  
                   
Master Limited Partnerships and Related Companies - 33.6% (1)
                
Crude/Refined Products Pipelines - 7.7% (1)
                
United States - 7.7% (1)
                
Enbridge Energy Management, L.L.C. (4)(5)
     396,530       10,837,166  
Magellan Midstream Partners, L.P. (4)
     75,000       3,762,000  
MPLX LP (4)
     117,232       3,832,314  
Plains All American Pipeline, L.P. (4)
     95,100       5,206,725  
Rose Rock Midstream, L.P.
     32,489       1,104,626  
Tesoro Logistics LP (4)
     47,000       2,345,300  
 
               27,088,131  
Natural Gas/Natural Gas Liquids Pipelines - 8.9% (1)
                
United States - 8.9% (1)
                
Energy Transfer Partners, L.P. (4)
     180,800       8,662,128  
Enterprise Products Partners L.P. (4)
     37,500       2,125,125  
Kinder Morgan Management, LLC (4)(5)
     136,662       11,319,753  
Regency Energy Partners LP (4)
     252,300       6,002,217  
Williams Partners L.P. (4)
     57,300       2,847,810  
                30,957,033  
Natural Gas Gathering/Processing - 3.5% (1)
                
United States - 3.5% (1)
                
Access Midstream Partners, L.P. (4)
     58,900       2,193,436  
DCP Midstream Partners, LP (4)
     89,300       3,628,259  
Southcross Energy Partners, L.P. (4)
     45,076       1,032,691  
Targa Resources Partners LP (4)
     74,800       3,081,012  
Western Gas Equity Partners, LP (4)
     70,627       2,399,199  
                12,334,597  
Oil and Gas Production — 13.5%(1)
                
United States — 13.5%(1)
                
BreitBurn Energy Partners L.P. (4)
     513,200       9,981,740  
EV Energy Partners, L.P. (4)
     131,862       7,385,591  
Legacy Reserves, L.P. (4)
     201,800       5,323,484  
Linn Energy, L.L.C. (4)
     300,200       11,410,602  
Pioneer Southwest Energy Partners L.P. (4)
     307,700       7,237,104  
Vanguard Natural Resources, LLC (4)
     212,100       5,898,501  
                47,237,022  
                   
                   
Total Master Limited Partnerships and Related Companies (Cost $112,914,017)
             117,616,783  
                   
Short-Term Investment - 0.1% (1)
                
United States Investment Company - 0.1% (1)
                
Fidelity Institutional Money Market Portfolio - Class I, 0.12% (6) (Cost $144,872)
     144,872       144,872  
                   
Total Investments - 114.8% (1) (Cost $391,561,473)
             401,299,135  
Total Value of Options Written (Premiums received $1,410,157) - (0.4%) (1)
             (1,293,543 )
Other Assets and Liabilities - (14.4%) (1)
             (50,335,950 )
Total Net Assets Applicable to Common Stockholders - 100.0% (1)
           $ 349,669,642  
                   
                   
(1)
Calculated as a percentage of net assets applicable to common stockholders.
                
(2)
All or a portion of the security represents cover for outstanding call option contracts written.
          
(3)
Non-income producing security.
                
(4)
All or a portion of the security is segregated as collateral for the margin borrowing facility. 
  
(5)
Security distributions are paid-in-kind.
                
(6)
Rate indicated is the current yield as of February 28, 2013.
                
                   
Key to abbreviation
                
ADR = American Depository Receipts
                

 
 
 
 

 
Tortoise Energy Independence Fund, Inc.
          
SCHEDULE OF OPTIONS WRITTEN (Unaudited)
          
February 28, 2013
                
                 
Call Options Written
Expiration Date
  
Strike Price
  
Contracts
  
Fair Value
  
Anadarko Petroleum Corporation
March 2013
   $ 87.50     1,356   $ (31,188 )
Anadarko Petroleum Corporation
March 2013
     90.00     1,385     (15,235 )
Apache Corporation
March 2013
     82.50     1,975     (7,900 )
BP p.l.c. (ADR)
March 2013
     44.00     964     (8,676 )
BP p.l.c. (ADR)
March 2013
     45.00     964     (5,784 )
Cabot Oil & Gas Corporation
March 2013
     60.00     908     (243,344 )
Canadian Natural Resources Limited
March 2013
     32.00     1,915     (38,300 )
Chesapeake Energy Corporation
March 2013
     22.00     5,210     (52,100 )
Concho Resources Inc.
March 2013
     100.00     753     (7,530 )
Concho Resources Inc.
March 2013
     105.00     46     (690 )
Continental Resources, Inc.
March 2013
     90.00     2,222     (211,090 )
Denbury Resources Inc.
March 2013
     20.00     2,138     (10,690 )
Devon Energy Corporation
March 2013
     65.00     1,120     (2,240 )
EOG Resources, Inc.
March 2013
     140.00     1,064     (8,512 )
EOG Resources, Inc.
March 2013
     145.00     459     (2,754 )
Hess Corporation
March 2013
     72.50     663     (13,923 )
Newfield Exploration Company
March 2013
     29.00     1,201     (3,603 )
Pioneer Natural Resources Company
March 2013
     140.00     1,768     (26,520 )
Range Resources Corporation
March 2013
     75.00     1,797     (521,130 )
Range Resources Corporation
March 2013
     77.50     286     (38,610 )
Southwestern Energy Company
March 2013
     36.00     1,208     (33,824 )
Whiting Petroleum Corporation
March 2013
     55.00     1,650     (9,900 )
                       
Total Value of Call Options Written (Premiums received $1,410,157)
         $ (1,293,543 )
                       
Key to abbreviation
                      
ADR = American Depository Receipts
                      

 
 
 


Various inputs are used in determining the value of the Company’s investments.  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, 2013.  These assets and liabilities are measured on a recurring basis.

Description
Fair Value at
February 28, 2013
  
Level 1
  
Level 2
    
Level 3
  
Assets
                  
Equity Securities:
                  
Common Stock (a)
 $ 283,537,480   $ 283,537,480   $ -     $ -  
Master Limited  Partnerships and Related Companies(a)
   117,616,783     117,616,783     -       -  
Total Equity Securities
   401,154,263     401,154,263     -       -  
Other:
                          
Short-Term Investment(b)
   144,872     144,872     -       -  
Total Assets
 $ 401,299,135   $ 401,299,135   $ -     $ -  
Liabilities
                          
Written Call Options
 $ 1,293,543   $ 1,293,543   $ -     $ -  

(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, 2013.

The Company did not hold any Level 3 securities during the period ended February 28, 2013.

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.

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, 2013.
 
As of February 28, 2013, the aggregate cost of securities for federal income tax purposes was $390,743,142.  The aggregate gross unrealized appreciation for all securities in which there was an excess of fair value over tax cost was $23,262,477, the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over fair value was $12,706,484 and the net unrealized appreciation was $10,555,993.


 
 
 

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 23, 2013
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 23, 2013
By:
/s/ Terry Matlack  
    Terry Matlack  
    Chief Executive Officer  
       
  Tortoise Energy Independence Fund, Inc.  
       
Date: April 23, 2013
By:
/s/ P. Bradley Adams  
    P. Bradley Adams  
    Chief Financial Officer