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 811-21549
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ENERGY INCOME AND GROWTH FUND
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(Exact name of registrant as specified in charter)
1001 Warrenville Road
Suite 300
LISLE, IL 60532
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(Address of principal executive offices) (Zip code)
W. Scott Jardine
First Trust Portfolios L.P.
1001 Warrenville Road
Suite 300
LISLE, IL 60532
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(Name and address of agent for service)
Registrant's telephone number, including area code: 630-241-4141
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Date of fiscal year end: NOVEMBER 30
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Date of reporting period: AUGUST 31, 2006
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Form N-Q is to be used by management investment companies, other than small
business investment companies registered on Form N-5 (ss.ss. 239.24 and 274.5 of
this chapter), to file reports with the Commission, not later than 60 days after
the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under
the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use
the information provided on Form N-Q in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and
the Commission will make this information public. A registrant is not required
to respond to the collection of information contained in Form N-Q unless the
Form displays a currently valid Office of Management and Budget ("OMB") control
number. Please direct comments concerning the accuracy of the information
collection burden estimate and any suggestions for reducing the burden to the
Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC
20549. The OMB has reviewed this collection of information under the clearance
requirements of 44 U.S.C. ss. 3507.
ITEM 1. SCHEDULE OF INVESTMENTS.
The Schedule(s) of Investments is attached herewith.
ENERGY INCOME AND GROWTH FUND
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2006 (UNAUDITED)
MARKET
SHARES/UNITS VALUE
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MASTER LIMITED PARTNERSHIPS - 152.9%
OIL, GAS & CONSUMABLE FUELS - 152.9%
76,540 Alliance Holdings GP, L.P. .................. $ 1,660,153
278,290 Alliance Resource Partners, L.P. ............ 10,210,460
131,300 Atlas Pipeline Partners, L.P. ............... 5,711,550
45,600 Boardwalk Pipeline Partners, L.P. ........... 1,319,208
357,143 Clearwater Natural Resources, L.P. + ........ 7,142,860
293,201 Copano Energy, LLC .......................... 15,240,588
317,272 Crosstex Energy, L.P. ....................... 11,574,083
106,910 Crosstex Energy, L.P., Senior Subordinated
Series C Units .......................... 3,142,023
100,860 DCP Midstream Partners, L.P. ................ 2,841,226
70,064 Enbridge Energy Management, LLC* ............ 3,289,524
23,912 Enbridge Energy Partners, L.P. .............. 1,159,254
567,370 Energy Transfer Partners, L.P. .............. 27,046,528
591,138 Enterprise Product Partners, L.P. ........... 15,824,764
1,900 Genesis Energy, L.P. ........................ 32,737
661 Global Partners, L.P. ....................... 14,727
73,100 Hiland Partners, L.P. ....................... 3,326,050
250,000 Holly Energy Partners, L.P. ................. 9,625,000
148,000 Inergy Holdings, L.P. ....................... 5,172,600
385,275 Inergy, L.P. ................................ 10,591,210
430,521 Kinder Morgan Energy Partners, L.P. ......... 19,274,425
41,865 Kinder Morgan Management, LLC* .............. 1,767,120
461,756 Magellan Midstream Partners, L.P. ........... 17,015,709
230,178 Markwest Energy Partners, L.P. .............. 11,023,224
25,477 Martin Midstream Partners, L.P. ............. 850,168
128,169 Natural Resource Partners, L.P. ............. 7,459,436
285,143 Pacific Energy Partners, L.P. ............... 9,962,896
344,956 Plains All American Pipeline, L.P. .......... 15,867,976
52,600 Regency Energy Partners, L.P. ............... 1,251,354
14,000 Teekay LNG Partners, L.P. ................... 424,200
70,000 U.S. Shipping Partners, L.P. ................ 1,302,000
38,067 U.S. Shipping Partners, L.P. + .............. 624,500
90,647 U.S. Shipping Partners, L.P., Class B + ..... 1,389,131
205,291 Valero, L.P. ................................ 10,609,439
178,600 Williams Partners, L.P. ..................... 6,399,238
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240,145,361
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TOTAL MASTER LIMITED PARTNERSHIPS ........... 240,145,361
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(Cost $163,777,565)
RIGHTS - 0.0%
OIL, GAS & CONSUMABLE FUELS - 0.0%
17 Clearwater Natural Resources, L.P. - Rights +* 0
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TOTAL RIGHTS ................................ 0
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(Cost $0)
See Notes to Quarterly Portfolio of Investments. Page 1
ENERGY INCOME AND GROWTH FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
AUGUST 31, 2006 (UNAUDITED)
MARKET
VALUE
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TOTAL INVESTMENTS - 152.9% .................. $ 240,145,361
(Cost $163,777,565)**
NET OTHER ASSETS & LIABILITIES - (15.4)% .... (24,118,091)
SERIES A ENERGY NOTES PAYABLE - (21.6)% ..... (34,000,000)
SERIES B ENERGY NOTES PAYABLE - (15.9)% ..... (25,000,000)
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NET ASSETS - 100.0% ......................... $ 157,027,270
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* While non-income producing this security pays regular in-kind
distributions.
** Aggregate cost for federal income tax and financial reporting
purposes.
+ Securities are restricted and cannot be offered for public sale
without first being registered under the Securities Act of 1933, as
amended. Prior to registration, restricted securities may only be
resold in transactions exempt from registration to qualified
institutional buyers. At August 31, 2006, these securities amounted
to 9,156,491 or 5.83% of net assets. Market value is determined in
accordance with procedures adopted by the Board of Trustees (See Note
1C).
Page 2 See Notes to Quarterly Portfolio of Investments
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS (UNAUDITED)
ENERGY INCOME AND GROWTH FUND
AUGUST 31, 2006
1. VALUATION AND INVESTMENT PRACTICES
A. PORTFOLIO VALUATION:
The Energy Income and Growth Fund (the "Fund") determines the net asset value of
its Common Shares as of the close of regular session trading on the New York
Stock Exchange ("NYSE"), normally 4:00 p.m. Eastern time, no less frequently
than weekly on Friday of each week. Net asset value is computed by dividing the
value of all assets of the Fund (including accrued interest and dividends), less
all Fund liabilities (including accrued expenses, dividends payable, current and
deferred income taxes, and any borrowings of the Fund) by the total number of
shares outstanding. The Fund will rely to some extent on information provided by
the master limited partnerships ("MLPs"), which is not necessarily timely, to
estimate taxable income allocable to the MLP units held in the Fund's portfolio
and to estimate the associated deferred tax liability. From time to time, the
Fund will modify its estimates and/or assumptions regarding its deferred tax
liability as new information becomes available. To the extent the Fund modifies
its estimates and/or assumptions, the net asset value of the Fund would likely
fluctuate.
The Fund's investments are valued at market value or, in the absence of market
value with respect to any portfolio securities, at fair value according to
procedures adopted by the Fund's Board of Trustees. Portfolio securities listed
on any exchange other than the NASDAQ National Market ("NASDAQ") are valued at
the last sale price on the business day as of which such value is being
determined. If there has been no sale on such day, the securities are valued at
the mean of the most recent bid and asked prices on such day. Securities traded
on the NASDAQ are valued at the NASDAQ Official Closing Price as determined by
NASDAQ. Portfolio securities traded on more than one securities exchange are
valued at the last sale price on the business day as of which such value is
being determined at the close of the exchange representing the principal market
for such securities. Portfolio securities traded in the over-the-counter market,
but excluding securities traded on the NASDAQ, are valued at the closing bid
prices. Fixed income securities with a remaining maturity of 60 days or more
will be valued by the Fund using a pricing service. When price quotes are not
available, fair market value is based on prices of comparable securities.
Short-term investments that mature in less than 60 days are valued at amortized
cost.
B. SECURITIES TRANSACTIONS:
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Distributions received from the Fund's investments in MLPs are generally
comprised of return of capital and reduce the cost of the applicable MLPs.
C. RESTRICTED SECURITIES:
The Fund may invest up to 35% of its Managed Assets, which is the average daily
gross asset value of the Fund minus accrued liabilities (excluding the principal
amount of any borrowings), in restricted securities. Restricted securities are
securities that cannot be offered for public sale without first being registered
under the Securities Act of 1933, as amended. As of August 31, 2006, the Fund
held restricted securities shown in the following table. These securities are
valued according to the valuation procedures as stated in the Portfolio
Valuation footnote (Note 1A).
CARRYING
COST
CARRYING PER SHARE/UNIT
ACQUISITION VALUE PER AT ACQUISITION % OF
SECURITY DATE SHARES/UNITS SHARE/UNIT DATE MARKET VALUE NET ASSETS
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Clearwater Natural
Resources, L.P. 8/01/05 357,143 $20.00 $20.00 $7,142,860 4.55%
Clearwater Natural
Resources, L.P.
- Rights 08/01/05 17 0.00 0.00 0 0.00
Page 3
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS (UNAUDITED) - (CONTINUED)
ENERGY INCOME AND GROWTH FUND
AUGUST 31, 2006
CARRYING
COST
CARRYING PER SHARE/UNIT
ACQUISITION VALUE PER AT ACQUISITION % OF
SECURITY DATE SHARES/UNITS SHARE/UNIT DATE MARKET VALUE NET ASSETS
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U.S. Shipping
Partners, L.P. 8/07/06 38,067 $16.41 $18.34 $ 624,500 0.40%
U.S. Shipping
Partners, L.P.,
Class B 8/07/06 90,647 15.32 17.12 1,389,131 0.88
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485,874 $ 9,156,491 5.83%
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2. UNREALIZED APPRECIATION/(DEPRECIATION)
As of August 31, 2006, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was $76,857,172
and the aggregate gross unrealized depreciation for all securities in which
there was an excess of tax cost over value was $489,376.
Page 4
ITEM 2. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the "1940
Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days
of the filing date of the report that includes the disclosure required
by this paragraph, based on their evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17
CFR 270.30a-3(d)) that occurred during the registrant's last fiscal
quarter that have materially affected, or are reasonably likely to
materially affect, the registrant's internal control over financial
reporting.
ITEM 3. EXHIBITS.
Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of
the Sarbanes-Oxley Act of 2002 are attached hereto.
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.
(Registrant) ENERGY INCOME AND GROWTH FUND
By (Signature and Title)* /S/ JAMES A. BOWEN
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James A. Bowen, Chairman of the Board, President and
Chief Executive Officer
(principal executive officer)
Date OCTOBER 24, 2006
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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.
By (Signature and Title)* /S/ JAMES A. BOWEN
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James A. Bowen, Chairman of the Board, President and
Chief Executive Officer
(principal executive officer)
Date OCTOBER 24, 2006
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By (Signature and Title)* /S/ MARK R. BRADLEY
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Mark R. Bradley, Treasurer, Controller, Chief
Financial Officer and Chief Accounting Officer
(principal financial officer)
Date OCTOBER 24, 2006
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* Print the name and title of each signing officer under his or her signature.