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, 2014
 
 
 
Item 1. Schedule of Investments.

Tortoise Energy Independence Fund, Inc.
            
SCHEDULE OF INVESTMENTS (Unaudited)
            
               
     
August 31, 2014
  
 
  
Shares
    
Fair Value
  
Common Stock - 79.1%(1)            
Crude/Refined Products Pipelines - 0.6%(1)
            
United States - 0.6%(1)
            
Plains GP Holdings, L.P.(2)
     91,716     $ 2,830,356  
                   
Natural Gas Pipelines - 3.8%(1)
                
United States - 3.8%(1)
                
EQT Corporation(3)
     173,400       17,177,004  
                   
Oil and Gas Production - 74.7%(1)
                
Canada - 9.8%(1)
                
ARC Resources Ltd.
     334,600       9,672,103  
Cenovus Energy Inc.
     153,200       4,885,548  
Crescent Point Energy Corp.
     285,700       11,824,244  
Enerplus Corporation
     275,800       6,321,336  
Penn West Petroleum Ltd.
     6,400       49,728  
Suncor Energy Inc.(3)
     272,900       11,213,461  
The Netherlands - 2.1%(1)
                
Royal Dutch Shell plc (ADR)(2)
     114,500       9,271,065  
United Kingdom - 2.0%(1)
                
BP p.l.c. (ADR)
     192,800       9,223,552  
United States - 60.8%(1)
                
Anadarko Petroleum Corporation(3)
     285,899       32,217,958  
Antero Resources Corporation(3)(4)
     150,610       8,712,789  
Cabot Oil & Gas Corporation(3)
     178,500       5,986,890  
Carrizo Oil & Gas, Inc.(3)(4)
     66,200       4,152,064  
Chesapeake Energy Corporation(3)
     436,900       11,883,680  
Chevron Corporation
     70,400       9,113,280  
Cimarex Energy Co.(3)
     56,200       8,157,992  
Concho Resources Inc.(3)(4)
     78,400       11,135,936  
ConocoPhillips(3)
     138,700       11,265,214  
Continental Resources, Inc.(3)(4)
     91,700       14,790,293  
Eclipse Resources Corporation(4)
     45,254       827,696  
Energen Corp.
     110,900       8,925,232  
EOG Resources, Inc.(3)
     339,600       37,315,248  
Hess Corporation(3)
     12,800       1,294,080  
Laredo Petroleum, Inc.(4)
     43,300       1,023,612  
Marathon Oil Corporation(3)
     233,476       9,733,614  
Newfield Exploration Company(3)(4)
     132,700       5,947,614  
Noble Energy, Inc.(3)
     101,174       7,298,692  
Occidental Petroleum Corporation(3)
     192,100       19,926,533  
Parsley Energy, Inc.(4)
     109,600       2,402,432  
Pioneer Natural Resources Company(3)
     161,600       33,717,840  
Range Resources Corporation(3)
     224,200       17,619,878  
Rice Energy Inc.(4)
     52,646       1,541,475  
RSP Permian, Inc.(4)
     110,556       3,161,902  
Whiting Petroleum Corporation(3)(4)
     61,800       5,726,388  
                336,339,369  
                   
Total Common Stock (Cost $293,682,957)
             356,346,729  
                   
Master Limited Partnerships and Related Companies - 34.7%(1)
                
Crude/Refined Products Pipelines - 12.9%(1)
                
United States - 12.9%(1)
                
Buckeye Partners, L.P.(2)
     61,200       4,834,800  
Enbridge Energy Management, L.L.C.(2)(5)
     441,447       15,812,627  
Magellan Midstream Partners, L.P.(2)
     92,000       7,721,560  
MPLX LP(2)
     117,232       7,151,152  
Phillips 66 Partners LP(2)
     65,900       4,876,600  
Plains All American Pipeline, L.P.(2)
     179,229       10,741,194  
Rose Rock Midstream, L.P.(2)
     32,489       1,981,504  
Tesoro Logistics LP(2)
     47,000       3,303,160  
Valero Energy Partners LP(2)
     26,106       1,391,711  
 
               57,814,308  
Natural Gas/Natural Gas Liquids Pipelines - 8.4%(1)
                
United States - 8.4%(1)
                
Energy Transfer Partners, L.P.(2)
     77,700       4,463,865  
Enterprise Products Partners L.P.(2)
     282,200       11,465,786  
Kinder Morgan Management, LLC(2)(5)
     119,188       11,647,073  
Regency Energy Partners LP(2)
     222,350       7,333,103  
Williams Partners L.P.(2)
     57,300       3,037,473  
                37,947,300  
Natural Gas Gathering/Processing - 4.8%(1)
                
United States - 4.8%(1)
                
Access Midstream Partners, L.P.(2)
     58,900       3,790,215  
DCP Midstream Partners, LP(2)
     94,524       5,348,168  
EnLink Midstream Partners, LP(2)
     86,700       2,686,833  
Targa Resources Partners LP(2)
     95,800       7,127,520  
Western Gas Partners LP(2)
     34,300       2,657,907  
                21,610,643  
Oil and Gas Production — 8.6%(1)
                
United States — 8.6%(1)
                
BreitBurn Energy Partners L.P.(2)
     621,400       14,217,632  
EV Energy Partners, L.P.(2)
     82,800       3,461,040  
Legacy Reserves, L.P.(2)
     486,608       14,963,196  
Vanguard Natural Resources, LLC(2)
     212,100       6,239,982  
                38,881,850  
                   
                   
Total Master Limited Partnerships and Related Companies (Cost $111,605,811)
             156,254,101  
                   
Short-Term Investment - 0.0%(1)
                
United States Investment Company - 0.0%(1)
                
Fidelity Institutional Money Market Portfolio - Class I, 0.05%(6) (Cost $37,538)
     37,538       37,538  
                   
Total Investments - 113.8%(1) (Cost $405,326,306)
             512,638,368  
Total Value of Options Written (Premiums received $1,513,938) - (0.7%)(1)
             (3,173,085 )
Other Assets and Liabilities - (13.1%)(1)
             (58,949,705 )
Total Net Assets Applicable to Common Stockholders - 100.0%(1)
           $ 450,515,578  
                   
                   
(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 August 31, 2014.
                
                   
Key to abbreviation
                
ADR = American Depository Receipts
                

 
 
 

Tortoise Energy Independence Fund, Inc.
        
SCHEDULE OF OPTIONS WRITTEN (Unaudited)
        
August 31, 2014
              
               
Call Options Written
Expiration Date
Strike Price
Contracts
  
 Fair Value
Anadarko Petroleum Corporation
September 2014
 $                                    115.00
  
             1,429
  
 $                               (235,785)
Anadarko Petroleum Corporation
September 2014
           119.00
  
                  89
  
            (6,319)
Anadarko Petroleum Corporation
September 2014
           120.00
  
             1,340
  
          (77,720)
Antero Resources Corporation
September 2014
             60.00
  
             1,506
  
          (79,065)
Cabot Oil & Gas Corporation
September 2014
             35.00
  
                890
  
          (13,350)
Carrizo Oil & Gas, Inc.
September 2014
             65.00
  
                662
  
          (61,566)
Chesapeake Energy Corporation
September 2014
             28.00
  
             4,369
  
        (117,963)
Cimarex Energy Co.
September 2014
           145.00
  
                562
  
        (191,080)
Concho Resources Inc.
September 2014
           140.00
  
                784
  
        (366,912)
ConocoPhillips
September 2014
             85.00
  
             1,387
  
          (15,257)
Continental Resources, Inc.
September 2014
           155.00
  
                917
  
        (678,580)
EOG Resources, Inc.
September 2014
           115.00
  
             1,698
  
          (76,410)
EQT Corporation
September 2014
           100.00
  
             1,600
  
        (184,000)
Hess Corporation
September 2014
           105.00
  
                128
  
            (3,712)
Marathon Oil Corporation
September 2014
             41.00
  
             2,334
  
        (259,074)
Newfield Exploration Company
September 2014
             44.00
  
             1,327
  
        (209,666)
Noble Energy, Inc.
September 2014
             75.00
  
             1,011
  
          (40,440)
Occidental Petroleum Corporation
September 2014
           105.00
  
             1,921
  
        (121,023)
Pioneer Natural Resources Company
September 2014
           222.50
  
             1,616
  
          (69,488)
Range Resources Corporation
September 2014
             82.50
  
             2,242
  
          (67,260)
Suncor Energy Inc.
September 2014
             41.00
  
             2,729
  
        (150,095)
Whiting Petroleum Corporation
September 2014
             92.50
  
                618
  
        (148,320)
Total Value of Call Options Written (Premiums received $1,513,938)
      
 $                            (3,173,085)
               

 
 
 

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, 2014.  These assets and liabilities are measured on a recurring basis.

Description
  
Fair Value at
August 31, 2014
    
Level 1
    
Level 2
    
Level 3
  
Assets
                        
Equity Securities:
                        
Common Stock (a)
   $ 356,346,729     $ 356,346,729     $ -     $ -  
Master Limited Partnerships and Related Companies(a)
     156,254,101       156,254,101       -       -  
Total Equity Securities
     512,600,830       512,600,830       -       -  
Other Securities:
                                
Short-Term Investment(b)
     37,538       37,538       -       -  
Total Assets
   $ 512,638,368     $ 512,638,368     $ -     $ -  
Liabilities
                                
Written Call Options
   $ 3,173,085     $ 3,173,085     $ -     $ -  

(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, 2014.

The Company did not hold any Level 3 securities during the period ended August 31, 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 August 31, 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.
 
Exchange-traded options are valued at the mean of the highest bid and lowest asked prices across all option exchanges.
 
As of August 31, 2014, the aggregate cost of securities for federal income tax purposes was $395,532,513.  The aggregate gross unrealized appreciation for all securities in which there was an excess of fair value over tax cost was $120,570,391, the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over fair value was $3,464,536 and the net unrealized appreciation was $117,105,855.


 
 
 


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 30, 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: October 30, 2014
By:
/s/ Terry Matlack  
    Terry Matlack  
    Chief Executive Officer  
       
  Tortoise Energy Independence Fund, Inc.  
       
Date: October 30, 2014
By:
/s/ P. Bradley Adams  
    P. Bradley Adams  
    Chief Financial Officer