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 811-21725



Tortoise Energy Capital Corporation
(Exact name of registrant as specified in charter)


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



David J. Schulte
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, 2012

 
 
 
 
Item 1. Schedule of Investments.
 
Tortoise Energy Capital Corporation
           
SCHEDULE OF INVESTMENTS (Unaudited)
           
               
     
August 31, 2012
 
Master Limited Partnerships and Related Companies - 163.7% (1)
 
Shares
   
Fair Value
 
Crude/Refined Products Pipelines - 69.4% (1)
           
United States - 69.4% (1)
           
Buckeye Partners, L.P.
    792,100     $ 39,145,582  
Enbridge Energy Partners, L.P.
    1,372,700       40,439,742  
Holly Energy Partners, L.P.
    312,000       21,013,200  
Kinder Morgan Management, LLC (2)
    634,836       47,054,013  
Magellan Midstream Partners, L.P.
    753,400       62,509,598  
NuStar Energy L.P.
    508,300       25,780,976  
Oiltanking Partners, L.P.
    147,900       5,439,762  
Plains All American Pipeline, L.P.
    659,200       57,040,576  
Sunoco Logistics Partners L.P.
    1,383,800       64,554,270  
Tesoro Logistics LP
    137,400       5,986,518  
                368,964,237  
Natural Gas/Natural Gas Liquids Pipelines - 69.9% (1)
               
United States - 69.9% (1)
               
Boardwalk Pipeline Partners, LP
    1,282,700       34,671,381  
El Paso Pipeline Partners, L.P.
    1,253,700       45,371,403  
Energy Transfer Equity, L.P.
    332,472       14,612,145  
Energy Transfer Partners, L.P.
    842,400       35,987,328  
Enterprise Products Partners L.P.
    1,176,500       62,825,100  
EQT Midstream Partners, LP
    173,842       4,773,701  
Inergy Midstream, L.P.
    213,600       4,976,880  
ONEOK Partners, L.P.
    724,000       41,137,680  
Regency Energy Partners LP
    1,593,567       36,875,140  
Spectra Energy Partners, LP
    508,409       16,279,256  
TC PipeLines, LP
    594,829       27,017,133  
Williams Partners L.P.
    906,000       46,731,480  
                371,258,627  
Natural Gas Gathering/Processing - 24.4% (1)
               
United States - 24.4% (1)
               
Access Midstream Partners, L.P.
    730,200       22,000,926  
Copano Energy, L.L.C.
    484,200       14,860,098  
Crestwood Midstream Partners LP (2)
    361,413       8,890,760  
DCP Midstream Partners, LP
    554,876       23,937,351  
MarkWest Energy Partners, L.P.
    327,900       17,411,490  
Targa Resources Partners LP
    465,000       18,841,800  
Western Gas Partners LP
    495,688       23,669,102  
                129,611,527  
                   
Total Master Limited Partnerships and Related Companies (Cost $458,892,513)
            869,834,391  
                   
Short-Term Investment - 0.0% (1)
               
United States Investment Company - 0.0% (1)
               
Fidelity Institutional Money Market Portfolio - Class I, 0.16% (3) (Cost $159,917)
    159,917       159,917  
                   
Total Investments - 163.7% (1) (Cost $459,052,430)
            869,994,308  
Other Assets and Liabilities - (34.7%) (1)
            (184,397,679 )
Long-Term Debt Obligations - (19.6%) (1)
            (104,100,000 )
Mandatory Redeemable Preferred Stock at Liquidation Value - (9.4%) (1)
            (50,000,000 )
Total Net Assets Applicable to Common Stockholders - 100.0% (1)
          $ 531,496,629  
                   
                   
(1)
Calculated as a percentage of net assets applicable to common stockholders.
               
(2)
Security distributions are paid-in-kind.
               
(3)
Rate indicated is the current yield as of August 31, 2012.
               

 
 
 
 

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 by level within the fair value hierarchy as of August 31, 2012.  These assets are measured on a recurring basis.
 
 
Fair Value at
             
Description
August 31, 2012
 
Level 1
 
Level 2
 
Level 3
 
Assets
               
Equity Securities:
               
Master Limited Partnerships and Related Companies (a)
$ 869,834,391   $ 869,834,391   $ -   $ -  
Other:
                       
Short-Term Investment (b)
  159,917     159,917     -     -  
Total Assets
$ 869,994,308   $ 869,994,308   $ -   $ -  

(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, 2012.

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. 

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 from December 1, 2011 through August 31, 2012.
 
As of August 31, 2012, the aggregate cost of securities for federal income tax purposes was $349,474,108. The aggregate gross unrealized appreciation for all securities in which there was an excess of fair value over tax cost was $520,520,200, the aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over fair value was $0 and the net unrealized appreciation was $520,520,200.

 
 
 

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 Capital Corporation  
       
Date:  October 29, 2012
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 Capital Corporation  
       
Date: October 29, 2012
By:
  /s/ Terry Matlack  
    Terry Matlack  
    Chief Executive Officer   
       
  Tortoise Energy Capital Corporation  
       
Date: October 29, 2012
By:
 /s/ P. Bradley Adams  
    P. Bradley Adams  
    Chief Financial Officer  
       


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