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: August 31, 2013
 
 
 
Item 1. Schedule of Investments.

 
Tortoise Energy Independence Fund, Inc.
            
SCHEDULE OF INVESTMENTS (Unaudited)
            
               
     
August 31, 2013
  
Common Stock - 82.6%(1)
  
Shares
    
Fair Value
  
Natural Gas Pipelines - 3.1%(1)
            
United States - 3.1%(1)
            
EQT Corporation
     138,100     $ 11,837,932  
                   
Oil and Gas Production - 79.5%(1)
                
Canada - 11.0%(1)
                
ARC Resources Ltd.
     334,600       8,011,594  
Canadian Natural Resources Limited(2)
     181,800       5,566,716  
Cenovus Energy Inc.
     222,200       6,386,028  
Crescent Point Energy Corp.
     285,700       10,421,147  
Enerplus Corporation
     275,800       4,581,038  
Penn West Petroleum Ltd.
     6,400       71,872  
Suncor Energy Inc.
     183,200       6,204,984  
The Netherlands - 2.0%(1)
                
Royal Dutch Shell plc (ADR)
     114,500       7,395,555  
United Kingdom - 2.1%(1)
                
BP p.l.c. (ADR)
     192,800       7,962,640  
United States - 64.4%(1)
                
Anadarko Petroleum Corporation(2)
     266,300       24,345,146  
Apache Corporation(2)
     163,000       13,965,840  
Cabot Oil & Gas Corporation(2)
     345,800       13,531,154  
Chesapeake Energy Corporation(2)
     478,400       12,347,504  
Chevron Corporation
     70,400       8,478,272  
Concho Resources Inc.(2)(3)
     79,900       7,711,149  
ConocoPhillips
     138,700       9,195,810  
Continental Resources, Inc.(2)(3)
     203,100       18,738,006  
EOG Resources, Inc.(2)
     176,900       27,782,145  
Hess Corporation(2)
     53,500       4,004,475  
Jones Energy, Inc.(3)
     306,870       4,557,019  
Marathon Oil Corporation(2)
     280,400       9,654,172  
Noble Energy, Inc.
     72,800       4,472,104  
Occidental Petroleum Corporation
     239,000       21,082,190  
Pioneer Natural Resources Company(2)
     194,700       34,066,659  
Range Resources Corporation(2)
     197,500       14,808,550  
Southwestern Energy Company(2)(3)
     113,000       4,316,600  
Whiting Petroleum Corporation(2)(3)
     163,300       8,241,751  
                297,900,120  
                   
Total Common Stock (Cost $274,063,418)
             309,738,052  
                   
Master Limited Partnerships and Related Companies - 32.4% (1)
                
Crude/Refined Products Pipelines - 8.8% (1)
                
United States - 8.8%(1)
                
Buckeye Partners, L.P.
     45,700       3,199,000  
Enbridge Energy Management, L.L.C.(4)(5)
     410,726       12,317,671  
Magellan Midstream Partners, L.P.(4)
     75,000       4,069,500  
MPLX LP(4)
     117,232       4,185,182  
Phillips 66 Partners LP
     65,900       2,027,743  
Plains All American Pipeline, L.P.(4)
     72,000       3,640,320  
Rose Rock Midstream, L.P.
     32,489       1,061,416  
Tesoro Logistics LP(4)
     47,000       2,519,200  
 
               33,020,032  
Natural Gas/Natural Gas Liquids Pipelines - 8.4%(1)
                
United States - 8.4%(1)
                
Energy Transfer Partners, L.P.(4)
     180,800       9,269,616  
Enterprise Products Partners L.P.(4)
     22,900       1,360,718  
Kinder Morgan Management, LLC(4)(5)
     140,859       11,246,169  
Regency Energy Partners LP(4)
     252,300       6,819,669  
Williams Partners L.P.(4)
     57,300       2,826,609  
                31,522,781  
Natural Gas Gathering/Processing - 4.2%(1)
                
United States - 4.2%(1)
                
Access Midstream Partners, L.P.(4)
     58,900       2,686,429  
DCP Midstream Partners, LP(4)
     71,400       3,422,202  
Targa Resources Partners LP(4)
     95,800       4,680,788  
Western Gas Equity Partners, LP(4)
     70,627       2,781,291  
Western Gas Partners LP
     34,300       2,028,502  
                15,599,212  
Oil and Gas Production — 11.0%(1)
                
United States — 11.0%(1)
                
BreitBurn Energy Partners L.P.(4)
     513,200       9,068,244  
EV Energy Partners, L.P.(4)
     82,800       3,021,372  
Legacy Reserves, L.P.(4)
     299,055       8,068,504  
Linn Energy, LLC(4)
     221,800       5,347,598  
Pioneer Southwest Energy Partners L.P.(4)
     243,200       9,946,880  
Vanguard Natural Resources, LLC(4)
     212,100       5,822,145  
                41,274,743  
                   
Total Master Limited Partnerships and Related Companies (Cost $109,897,343)
             121,416,768  
                   
Short-Term Investment - 0.0%(1)
                
United States Investment Company - 0.0%(1)
                
Fidelity Institutional Money Market Portfolio - Class I, 0.05%(6) (Cost $42,427)
     42,427       42,427  
                   
Total Investments - 115.0%(1) (Cost $384,003,188)
             431,197,247  
Total Value of Options Written (Premiums received $1,547,996) - (0.3%)(1)
             (1,335,554 )
Other Assets and Liabilities - (14.7%)(1)
             (54,984,900 )
Total Net Assets Applicable to Common Stockholders - 100.0%(1)
           $ 374,876,793  
                   
                   
(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 August 31, 2013.
                
                   
Key to abbreviation
                
ADR = American Depository Receipts
                

 
 
 
 
 

Tortoise Energy Independence Fund, Inc.
        
SCHEDULE OF OPTIONS WRITTEN (Unaudited)
        
August 31, 2013
              
               
Call Options Written
Expiration Date
Strike Price
Contracts
  
 Fair Value
Anadarko Petroleum Corporation
September 2013
 $                                 97.50
  
             2,000
  
 $                            (86,000)
Apache Corporation
September 2013
             87.50
  
             1,630
  
        (182,560)
Cabot Oil & Gas Corporation
September 2013
             40.00
  
             3,458
  
        (259,350)
Canadian Natural Resources Limited
September 2013
             32.00
  
             1,818
  
          (63,630)
Chesapeake Energy Corporation
September 2013
             27.00
  
             4,784
  
        (143,520)
Concho Resources Inc.
September 2013
           100.00
  
                799
  
          (87,890)
Continental Resources, Inc.
September 2013
           100.00
  
             2,031
  
          (50,775)
EOG Resources, Inc.
September 2013
           170.00
  
             1,769
  
          (90,219)
Hess Corporation
September 2013
             80.00
  
                535
  
          (12,305)
Marathon Oil Corporation
September 2013
             37.00
  
             1,000
  
          (11,000)
Pioneer Natural Resources Company
September 2013
           185.00
  
             1,947
  
        (243,375)
Range Resources Corporation
September 2013
             85.00
  
             1,975
  
          (17,775)
Southwestern Energy Company
September 2013
             40.00
  
             1,130
  
          (46,330)
Whiting Petroleum Corporation
September 2013
             55.00
  
             1,633
  
          (40,825)
               
Total Value of Call Options Written (Premiums received $1,547,996)
      
 $                       (1,335,554)

 
 
 

 
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 August 31, 2013.  These assets and liabilities are measured on a recurring basis.

Description
Fair Value at
August 31, 2013
  
Level 1
  
Level 2
  
Level 3
  
Assets
                
Equity Securities:
                
Common Stock(a)
 $ 309,738,052   $ 309,738,052   $ -   $ -  
Master Limited Partnerships and Related Companies(a)
   121,416,768     121,416,768     -     -  
Total Equity Securities
   431,154,820     431,154,820     -     -  
Other Securities:
                        
Short-Term Investment(b)
   42,427     42,427     -     -  
Total Assets
 $ 431,197,247   $ 431,197,247   $ -   $ -  
Liabilities
                        
Written Call Options
 $ 1,335,554   $ 1,335,554   $ -   $ -  

(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 August 31, 2013.

The Company did not hold any Level 3 securities during the period ended August 31, 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 August 31, 2013.
As of August 31, 2013, the aggregate cost of securities for federal income tax purposes was $380,083,699.  The aggregate gross unrealized appreciation for all securities in which there was an excess of fair value over tax cost was $58,559,238, the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over fair value was $7,445,690 and the net unrealized appreciation was $51,113,548.


 
 
 

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: October 24, 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: October 24, 2013
By:
/s/ Terry Matlack  
    Terry Matlack  
    Chief Executive Officer  
       
  Tortoise Energy Independence Fund, Inc.  
       
Date: October 24, 2013
By:
/s/ P. Bradley Adams  
    P. Bradley Adams  
    Chief Financial Officer