N-Q 1 v19692nvq.htm KAYNE ANDERSON ENERGY TOTAL RETURN FUND, INC. nvq
Table of Contents

 
 
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                                                                                                        811-21750
KAYNE ANDERSON ENERGY TOTAL RETURN FUND, INC.
(Exact name of registrant as specified in charter)
     
1800 Avenue of the Stars, Second Floor, Los Angeles, California   90067
 
(Address of principal executive offices)   (Zip code)
David Shladovsky, Esq.
Kayne Anderson Capital Advisors, L.P., 1800 Avenue of the Stars, Second Floor, Los Angeles, California 90067
 
(Name and address of agent for service)
Registrant’s telephone number, including area code:                                                                               (310) 556-2721
Date of fiscal year end:              November 30th
Date of reporting period:           February 28, 2006
 
 

 

TABLE OF CONTENTS

Item 1: Schedule of Investments
Item 2: Controls and Procedures
Item 3: Exhibits
SIGNATURES
EX-99.CERT

Table of Contents

Item 1: Schedule of Investments
KAYNE ANDERSON ENERGY TOTAL RETURN FUND, INC.
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2006
(amounts in 000’s)
(UNAUDITED)
                   
      No. of        
Description     Shares/Units   Value  
Long-Term Investments — 125.5%
                
Equity Investments — 112.3%
                
United States — 79.1%
                
MLP (a)(b) — 29.1%
                
Atlas Pipeline Partners, L.P.
     192     $ 8,033  
Calumet Specialty Products Partners, L.P. (c)
     152       3,598  
Copano Energy, L.L.C.
     30       1,209  
Crosstex Energy, L.P.
     122       4,497  
DCP Midstream Partners, LP
     53       1,455  
Enbridge Energy Partners, L.P.
     86       3,862  
Energy Transfer Partners, L.P.
     176       6,269  
Enterprise Products Partners L.P. (d)
     2,188       53,123  
Ferrellgas Partners, L.P.
     216       4,839  
Global Partners LP
     127       2,669  
Hiland Partners, LP
     32       1,296  
Holly Energy Partners, L.P.
     111       4,444  
Inergy, L.P.
     213       5,817  
K-Sea Transportation Partners L.P.
     28       974  
Magellan Midstream Partners, L.P.
     388       12,212  
Martin Midstream Partners L.P.
     214       6,370  
Natural Resource Partners L.P.
     137       7,060  
Northern Border Partners, L.P.
     188       9,043  
Pacific Energy Partners, L.P. (e)
     1,000       30,524  
Penn Virginia Resource Partners, L.P.
     181       10,463  
Plains All American Pipeline, L.P.
     321       14,370  
Regency Energy Partners LP (c)
     227       4,563  
Sunoco Logistics Partners L.P.
     141       6,022  
TC PipeLines, LP
     94       3,275  
Teekay LNG Partners L.P.
     103       3,125  
TEPPCO Partners, L.P.
     122       4,452  
TransMontaigne Partners L.P.
     47       1,188  
U.S. Shipping Partners L.P.
     67       1,528  
Valero L.P.
     262       13,626  
 
              
 
             229,906  
 
              
 
                
MLP Affiliate — 27.7%
                
Atlas America, Inc.(d)(f)
     60       4,030  
Crosstex Energy, Inc.
     356       28,289  
Enbridge Energy Management, L.L.C. (g)
     334       15,395  
Energy Transfer Equity, L.P. (b)(c)
     756       16,620  
Enterprise GP Holdings L.P. (b)
     245       9,743  
Inergy Holdings, L.P. (b)
     46       1,550  
Kinder Morgan, Inc.
     373       34,588  
Kinder Morgan Management, LLC (g)
     2,081       91,020  
Magellan Midtream Holdings, L.P.(b)(c)
     413       9,621  
MarkWest Hydrocarbon, Inc.
     84       1,911  
ONEOK, Inc.
     30       918  
Penn Virginia Corporation
     75       4,608  
TransMontaigne Inc. (f)
     72       545  
 
              
 
             218,838  
 
              
 
                
Marine Transportation — 13.1%
                
Aries Maritime Transport Limited
     434       6,127  
Arlington Tankers Ltd.
     600       13,703  
Diana Shipping Inc.
     263       3,077  
Double Hull Tankers, Inc. (c)
     872       11,664  
DryShips Inc.
     269       2,965  
Eagle Bulk Shipping Inc.
     84       1,091  
Frontline Ltd.
     150       5,786  
Genco Shipping & Trading Limited
     628       10,252  
General Maritime Corporation
     417       15,264  
Knightsbridge Tankers Limited
     78       1,956  
Maritrans Inc.
     35       797  

Table of Contents

KAYNE ANDERSON ENERGY TOTAL RETURN FUND, INC.
SCHEDULE OF INVESTMENTS — (CONTINUED)
FEBRUARY 28, 2006
(amounts in 000’s)
(UNAUDITED)
                   
      No. of        
Description     Shares/Units   Value  
Marine Transportation (continued)
                
Nordic American Tanker Shipping Limited
     69     $ 2,064  
Overseas Shipholding Group, Inc.
     54       2,705  
Quintana Maritime Limited
     243       2,322  
Seaspan Corporation
     434       8,653  
Ship Finance International Limited
     264       4,837  
Top Tankers Inc.
     68       879  
Tsakos Energy Navigation Limited
     259       9,318  
 
              
 
             103,460  
 
              
 
                
Coal — 7.1%
                
Alpha Natural Resources, Inc. (f)
     183       3,907  
Arch Coal, Inc. (d)
     309       22,569  
CONSOL Energy Inc.
     112       7,170  
Foundation Coal Holdings, Inc.
     154       6,164  
International Coal Group, Inc. (f)
     40       342  
Massey Energy Company
     252       9,363  
Peabody Energy Corporation
     137       6,623  
 
              
 
             56,138  
 
              
 
                
Royalty Trust — 1.7%
                
BP Prudhoe Bay Royalty Trust
     36       2,410  
Cross Timbers Royalty Trust
     23       1,046  
Hugoton Royalty Trust
     60       2,039  
Permian Basin Royalty Trust
     323       5,123  
San Juan Basin Royalty Trust
     71       2,824  
 
              
 
             13,442  
 
              
 
                
Other Energy — 0.4%
                
CNX Gas Corporation (f)
     133       2,854  
 
              
 
                
Total United States (Cost $617,883)
             624,638  
 
              
 
                
Canada — 33.2%
                
Royalty Trust — 33.2%
                
ARC Energy Trust
     799       18,587  
Baytex Energy Trust
     239       4,099  
Bonavista Energy Trust
     776       23,520  
Canadian Oil Sands Trust
     110       15,046  
Canetic Resources Trust
     905       17,685  
Crescent Point Energy Trust
     1,190       22,927  
Daylight Energy Trust
     108       1,073  
Enerplus Resources Fund
     398       20,151  
Esprit Energy Trust
     804       8,243  
Fairborne Energy Trust
     117       1,584  
Focus Energy Trust
     22       442  
Fording Canadian Coal Trust (d)
     341       13,924  
Harvest Energy Trust
     623       18,158  
Ketch Resources Trust
     1,430       13,612  
Penn West Energy Trust
     544       18,720  
Peyto Energy Trust
     983       20,330  
PrimeWest Energy Trust
     685       20,067  
Sequoia Oil & Gas Trust
     738       11,221  
Thunder Energy Trust
     495       4,395  
Vermilion Energy Trust
     62       1,675  
Westshore Terminals Income Fund
     25       273  
Zargon Energy Trust
     250       6,455  
 
              
 
             262,187  
 
              
 
                
Other — 0.0%
                
Tristar Oil & Gas Ltd. (f)
     16       90  
 
              
 
                
Total Canada (Cost $247,480)
             262,277  
 
              
 
                
Total Equity Investments (Cost $865,363)
             886,915  
 
              

Table of Contents

KAYNE ANDERSON ENERGY TOTAL RETURN FUND, INC.
SCHEDULE OF INVESTMENTS — (CONTINUED)
FEBRUARY 28, 2006
(amounts in 000’s)
(UNAUDITED)
                                                 
      Interest     Maturity     Principal        
Description     Rate     Date     Amount     Value  
Fixed Income Investments —13.2%
                                
United States — 11.8%
                                
MLP Affiliate — 0.5%
                                
TransMontaigne Inc.
     9.125 %     06/01/10     $ 4,000     $ 4,110  
 
                              
 
                                
Marine Transportation — 1.2%
                                
OMI Corporation
     7.625       12/01/13       4,000       4,100  
Overseas Shipholding Group, Inc.
     8.750       12/01/13       2,000       2,225  
Overseas Shipholding Group, Inc.
     8.250       03/15/13       3,000       3,199  
 
                              
 
                             9,524  
 
                              
 
                                
Coal — 0.5%
                                
Alpha Natural Resources, Inc.
     10.000       06/01/12       3,550       3,905  
 
                              
 
                                
Other Energy — 9.6%
                                
Carrizo Oil and Gas Company
     (h)       07/21/10       14,946       15,357  
Clayton Williams Energy, Inc.
     7.750       08/01/13       10,000       9,850  
El Paso Corporation
     (i)       11/23/09       15,110       15,299  
NRG Energy, Inc.
     7.250       02/01/14       1,500       1,537  
Petrohawk Energy Corporation
     (j)       07/28/10       5,500       5,548  
Swift Energy Company
     7.625       07/15/11       250       258  
Targa Resources, Inc.
     8.500       11/01/13       19,500       20,670  
Targa Resources, Inc.
     (k)       10/31/11       1,355       1,368  
Targa Resources, Inc.
     (l)       10/31/12       5,645       5,702  
 
                              
 
                             75,589  
 
                              
 
                                
Total United States (Cost $92,086)
                             93,128  
 
                              
 
                                
Canada — 1.4%
                                
Royalty Trust — 1.4%
                                
Baytex Energy Ltd.
     9.625       07/15/10       1,000       1,060  
Harvest Operations Corp.
     7.875       10/15/11       10,000       9,975  
 
                              
Total Canada (Cost $11,091)
                             11,035  
 
                              
 
                                
Total Fixed Income Investments (Cost $103,177)
                             104,163  
 
                              
 
                                
Total Long-Term Investments (Cost $968,540)
                             991,078  
 
                              
 
                                
Short-Term Investment — 10.4%
                                
Repurchase Agreement - 10.4%
                                
Bear, Stearns & Co. Inc. (Agreement dated 02/28/06 to be
repurchased at $82,152), collateralized by $84,242 in
U.S. Government and Agency Securities (Cost $82,141)
     4.500       03/01/06               82,141  
 
                              
 
                                
Total Investments — 135.9% (Cost $1,050,681)
                             1,073,219  
 
                              

Table of Contents

KAYNE ANDERSON ENERGY TOTAL RETURN FUND, INC.
SCHEDULE OF INVESTMENTS — (CONTINUED)
FEBRUARY 28, 2006
(amounts in 000’s, except option contracts written)
(UNAUDITED)
                   
      No. of        
Description     Contracts     Value  
Liabilities
                
 
Option Contracts Written (f)
                
United States
                
MLP
                
Enterprise Products Partners L.P., call option expiring 03/18/06 @ $25.00
     2,000     $ (30 )
 
              
Coal
                
Arch Coal, Inc., call option expiring 03/18/06 @ $75.00
     500       (75 )
 
              
 
                
Total United States (Premiums received $169)
             (105 )
 
              
 
                
Canada
                
Royalty Trust
                
Fording Canadian Coal Trust, call option expiring 06/17/06 @ $40.00
     700       (196 )
Fording Canadian Coal Trust, put option expiring 06/17/06 @ $40.00
     700       (189 )
 
                
 
              
Total Canada (Premiums received $485)
             (385 )
 
              
 
                
Total Options Contracts Written (Premiums received $654)
             (490 )
 
              
 
    No. of          
    Units          
Securities Sold Short
                
MLP
                
Alliance Resource Partners, L.P.
     35       (1,282 )
AmeriGas Partners, L.P.
     1       (34 )
 
              
Total Securities Sold Short (Cash proceeds recevied $1,370)
             (1,316 )
 
              
 
Other Liabilities
             (13,434 )
 
              
Total Liabilities
             (15,240 )
Unrealized Appreciation on Interest Rate Swap Contracts
             2,442  
Other Assets
             29,230  
 
              
Total Other Assets in Excess of Liabilities
             16,432  
 
              
Preferred Stock at Redemption Value
             (300,000 )
 
              
Net Assets Applicable to Common Stockholders
           $ 789,651  
 
              
 
(a)   Includes Limited Liability Companies.
 
(b)   Security is treated as a publicly traded partnership for regulated investment company (“RIC”) qualification purposes. In order to qualify as a RIC for tax purposes the Fund may directly invest up to 25% of its total assets in equity and debt securities of entities treated as publicly traded partnerships. It is the Fund’s intention to be treated as a RIC for tax purposes.
 
(c)   Security is currently non-income producing; expected to pay distributions in the next 12 months.
 
(d)   Security or a portion thereof is segregated as collateral on options contracts written or securities sold short.
 
(e)   Fair valued securities, restricted from public sale. The Fund negotiates certain aspects of the method and timing of its rights to dispose of these investments, including registration rights and related costs.
 
(f)   Security is non-income producing.
 
(g)   Distributions are paid in kind.
 
(h)   Floating rate second lien credit facility. Security pays interest at a rate of LIBOR + 600 basis points (10.57% as of February 28, 2006).
 
(i)   Floating rate senior secured term loan. Security pays interest at a rate of LIBOR + 275 basis points (7.22% as of February 28, 2006).
 
(j)   Floating rate second lien credit facility. Security pays interest at a rate of LIBOR + 450 basis points (9.07% as of February 28, 2006).
 
(k)   Floating rate synthetic letter of credit facility. Security pays interest at a rate of LIBOR + 225 basis points (6.78% as of February 28, 2006).
 
(l)   Floating rate senior secured term loans. Securities pay interest at a rate of LIBOR + 250 basis points (6.66%-6.92% as of February 28, 2006).

Table of Contents

KAYNE ANDERSON ENERGY TOTAL RETURN FUND, INC.
SCHEDULE OF INVESTMENTS — (CONCLUDED)
FEBRUARY 28, 2006
(amounts in 000’s)
(UNAUDITED)
Certain of the Fund’s investments are restricted as to resale and are valued as determined in accordance with procedures established by the Board of Directors. The table below shows the number of units held, the acquisition date, aggregate cost and fair value as of February 28, 2006, value per unit of such security, percent of net assets applicable to common stockholders and percent of total assets of which the security comprise.
                                                                 
                                                   
            Number of     Acquisition                 Value Per     Percent of     Percent of  
Partnership   Security     Units     Date     Cost     Fair Value     Units     Net Assets(1)     Total Assets  
Pacific Energy Partners, L.P.
   Common Unit     1,000     09/30/05     $30,756     $30,524     $30.52     3.9%     2.8%  
 
                                                      
 
(1)   Applicable to common stockholders.
 
At February 28, 2006, the identified cost basis of investments for Federal income tax purposes was $1,051,247. At February 28, 2006, gross unrealized appreciation and depreciation of investments for Federal income tax purposes were as follows:
         
Gross unrealized appreciation
   $ 46,127  
Gross unrealized depreciation
     (24,155 )
 
      
Net unrealized appreciation
   $ 21,972  
 
      
The cost basis for federal tax purposes is estimated based on information available from the Fund’s portfolio companies. In some cases, this information is very limited. Accordingly, the actual cost basis may prove higher or lower than the estimated cost basis included in this footnote.
Securities valuation policies and other investment related disclosures are hereby incorporated by reference to the Fund’s annual report previously filed with the Securities and Exchange Commission on Form N-CSR on February 8, 2006 with a file number 811-21750.
Other information is also available on the Fund’s website at http://www.kayneetr.com; or on the website of the Securities and Exchange Commission, http://www.sec.gov.

 

Table of Contents

Item 2: Controls and Procedures
     (a) As of a date within 90 days from the filing date of this report, the principal executive officer and principal financial officer concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)), were effective based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities and Exchange Act of 1934.
     (b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) 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
1.   The certifications of the registrant as required by Rule 30a-2(a) under the Act are exhibits to this report.

 

Table of Contents

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.
           
  KAYNE ANDERSON ENERGY TOTAL RETURN FUND, INC.    
 
          
 
/s/ Kevin S. McCarthy
 
Name: Kevin S. McCarthy 		       
 
Title:   Chief Executive Officer        
 
Date:   April  28, 2006        
     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.
           
 
/s/ Kevin S. McCarthy
 
Name: Kevin S. McCarthy 		       
 
Title:   Chief Executive Officer        
 
Date:   April  28, 2006        
 
          
 
/s/ Terry A, Hart
 
Name: Terry A. Hart 		       
 
Title:   Chief Financial Officer        
 
Date:   April  28, 2006