Investment Opportunities in the Energy Infrastructure Sector April 29, 2009 Forward-Looking Statements This presentation contains certain forward-looking statements. These forward-looking statements include g g g g all statements regarding the intent, belief or current expectations regarding matters covered and all statements which are not statements of historical fact. The forward-looking statements involve known and unknown risk, uncertainties, contingencies and other factors, many of which are beyond our control. Since these factors can cause results, performance and achievements to differ materially from those discussed i the presentation, you are cautioned not to place undue reliance on the f di d in h i i d l d li d l ki h forward-looking statements. We will not update these forward-looking statements to reflect events or circumstances that occur after the date of the presentation. This presentation shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the securities in any state or jurisdiction in which such offer or sale is not permitted. 2 Tortoise Capital Advisors L.L.C. Family of Investment Companies Total Assets Company/ Primary Target ($ in millions) Inception Date Ticker Investments (as of 3/31/09) Tortoise Energy Public U.S. Energy $705.5 Infrastructure Corp. Infrastructure Feb. 2004 Midstream MLPs Tortoise Energy Public U.S. Energy Infrastructure $440.8 C it l Corp. Capital C Midstream MLPs May 2005 More Concentrated Tortoise North American Public U.S. $106.4(1) Energy Corp. Energy Infrastructure O t 2005 Oct. Mid t Midstream, D t Downstream & Upstream Companies Tortoise Capital Private and Micro-Cap $103.5(2) $ Resources Corp. Public U.S. Energy Dec 2005 Dec. Companies (IPO Feb. 2007) (1) Proforma. If proposed TYN/Tortoise Gas and Oil Corp. (TGO) reorganization announced April 1, 2009 had closed on Feb. 28, 2009, the combined fund would have had total assets of approximately $106 million. As of Feb. 28, 2009, TYN had total assets of $76.0 million and TGO had estimated total assets of $30.4 million. (2) As of 02/28/09. 3 Tortoise Capital Advisors L.L.C. Infrastructure Asset Class Basic physical systems critical to the economy Transportation Communication Regulated Social Assets Assets Assets Infrastructure Bridges and tunnels Radio/TV broadcast towers Electricity transmission Schools Toll roads Wireless towers Oil and gas pipelines Hospitals Electricity and gas Railroads Cable systems Prisons distribution Rapid transit links Satellite networks Water distribution Courthouses Waste water collection and Airports and seaports processing system Source: J.P Morgan; CFA Institute. 4 Tortoise Capital Advisors L.L.C. Infrastructure Asset Dependencies • Nearly all other critical infrastructure depends on petroleum and natural gas Agriculture Cable y Systems Schools • Midstream assets allow for the essential transport Wireless Back-up Commercial Prisons & and storage of these commodities Systems Generators Buildings Courts • Direct dependency examples: Power Hospitals Water Satellite Plants Heating – Generator Fuel Systems Food – Airport Jet Fuel Military Industry Water Cooling – Rail Diesel Tactical Passenger Equip – Petrochemical Plant Feedstock Vehicles Rail Shipping – Hospital Heating and Cooling Factories Seaports • Indirect dependency examples: HVAC Mass Systems Lubricants Transit – HVAC Systems Airports Emergency – Distribution of Goods Residences Services Toll Roads – Toll Road Revenue Military Petrochemicals Installations 5 Tortoise Capital Advisors L.L.C. MLPs Offer High Barriers to Entry Source: Plains All American Pipeline, LP 6 Tortoise Capital Advisors L.L.C. Durable Infrastructure Growth (Excludes GPs) Credit Crisis Hurricane Begins 12% Katrina Recession 10% 10% Enron $56-149 9% 9% Oil tion 9/11 Venezuela Oil 8% owth in Distribut Workers Strike Market Meltdown Recession 6% 6% 6% 5% 5% 5% 4% 4% Gro 4% 3% 0-4% 2% 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E Actual Distribution Growth Estimated Distribution Growth Source: Wachovia Capital Markets and Tortoise Capital Advisors. 7 Tortoise Capital Advisors L.L.C. Attractive MLP Entry Point MLP Yields 14% 13% 12% 11% 10.9% 10% 9% 8% 7% 7.0% 6% 5% 4% 1/04 3/04 5/04 7/04 9/04 11/04 1/05 3/05 5/05 7/05 9/05 11/05 1/06 3/06 5/06 7/06 9/06 11/06 1/07 3/07 5/07 7/07 9/07 11/07 1/08 3/08 5/08 7/08 9/08 11/08 1/09 3/09 Alerian MLP Index Yield Average Source: Spread to Treasury and MLP yields per Alerian and Bloomberg through March 31, 2009. See Appendix for index descriptions. 8 Tortoise Capital Advisors L.L.C. Investment Attributes of Energy Infrastructure • Yield – Distributions roughly equal to underlying yield on MLP investments • Growth – Revenue is based upon volume growth and price increases – Expect long term growth of distributions close to nominal GDP • Quality – Energy infrastructure providers have experienced relatively low business risk – Diversified portfolio selected through proven process 9 Tortoise Capital Advisors L.L.C. pp Appendix MLPs Appear Positioned to Weather the Current Market Disruption Potential Risk Impact on MLPs Recession Reduces • Portfolio holdings sensitivity tested for scenarios far beyond Consumption previous recession – Median coverage ratio of 1.2x – PPI escalator offsets reduced demand – Reservation charges (natural gas pipelines) not impacted by changes in demand Commodity Prices Volatile • Limited sensitivity to crude oil and natural gas prices • Adequate coverage to maintain distributions Capital Markets Remain • Not necessary to maintain or modestly grow distributions Impaired • MLPs can complete most announced capital projects Rising Interest Rates • Most MLPs have less than 50% floating rate debt • Bank lines often swapped to fixed rates Based on Tortoise Capital Advisors’ analysis of company filings. 11 Tortoise Capital Advisors L.L.C. MLPs Offer Attractive Yield and Risk/Return 25.0% 22.0% 20.0% 17.9% 17 9% 17.8% 16.7% 15.7% 15.0% 12.8% 12.7% 12.2% 10.9% 10.7% 10.0% 9.0% 5.7% 5.0% 5 0% 5.0% 5 0% 5.0% 4.1% 3.9% 3.8% 3.6% 2.0% 0.0% Yield 10 Year Total Return 10 Year Ann Monthly 10 Year Ann Monthly Standard Deviation Downside Deviation -3.0% -5.0% U.S. MLPs U.S. Utilities U.S. REITs U.S. Bonds U.S. Equities (1) Reflects square root of sum of squared deviations of monthly total returns below 0% divided by total number of months, on an annualized basis. Note: As of 3/31/09. Please refer to the Appendix for index descriptions (Wachovia MLP Index used for MLPs) Past performance is no guarantee of future results. 12 Tortoise Capital Advisors L.L.C. Growth Outlook Annual Growth Rate 120 Recession Recession Recession Recession Other 1.3% 100 54% MLP Relative Market Share 60% 0.7% Across Value Chain 80 Quadrillio Btu Coal 50% 37% on, 40% 31% 60 28% Natural Gas 30% 22% 0.3% 40 20% Petroleum 10% 20 0.2% 0% Refined Crude Gathering Propane Interstate 0 Products & Processing Gas Source: Internal estimates and public company announcements. p y Source: Lehman Brothers 12/07 Demand Infrastructure Growth Projects Asset Acquisition Migration • The Energy Information Administration projects • $15 billion spent in 2008 • Significant pool of assets available for continued growth for U.S. consumption over the migration to MLP structure next 25 years. • MLPs expected to invest over $10 billion in new and existing pipeline and storage facilities • A i iti growth expected t exceed $5 Acquisition th t d to d • Liquids pipelines benefit from a PPI escalator in over the next two years. billion between 2009 – 2010 their tariffs (built-in inflation hedge). • Growth spending should increase when capital markets recover. • MLP growth largely dependent on external financing • Limited access to capital likely to restrain short-term growth • Growth should reaccelerate when capital markets recover 13 Tortoise Capital Advisors L.L.C. MLPs Provide Diversification Benefits 10-Year Correlations MLPs Equities Bonds REITs Utilities Oil Services S i Commodities MLPs 100% Equities 22.904% 100% Bonds --1.104% --5.125% 100% REITs 23.111% 53.967% 16.056% 100% Utilities 40.225% 37.877% 7.839% 37.024% 100% Oil Services 32.445% 56.210% 0.132% 24.152% 44.468% 100% Commodities 18.092% 19.255% 2.267% 16.183% 30.626% 52.857% 100% All data for period ending 3/31/09. Equities = S&P 500 Index (Bloomberg) Bonds = Lehman Brothers Aggregate Bond Index REITs = FTSE/NAREIT Equity REIT Index Utilities = Dow Jones Utility Average Index Oil Services = PHLX Oil Services Sector Index MLPs = Wachovia MLP Energy Index Commodities= S&P GSCI Commodities Index Please refer to the Appendix for index descriptions. 14 Tortoise Capital Advisors L.L.C. Index Descriptions Energy Atlantic Asset An unmanaged value-weighted basket of energy related publicly traded partnerships. Infrastructure Management MLP Atlantic Asset Management constructed the index and is an affiliate of Tortoise Capital MLPs Energy Index Advisors. Data for years preceding 2000 included in Atlantic Asset Management MLP Energy Index drawn from proprietary MLP research database. Wachovia MLP Index A float-adjusted, capitalization-weighted index of energy master limited partnerships (MLPs) with a market capitalization of at least $200 million at the time of inclusion. Alerian MLP Index Composite of the 50 most prominent energy master limited partnerships calculated by Standard & Poor's using a float-adjusted market capitalization methodology. Utilities Dow Jones Utility An unmanaged price-weighted index composed of stocks of 15 utility companies listed on Average Index the New York Stock Exchange. REITs FTSE NAREIT An unmanaged capitalization-weighted index of all U.S. equity real estate investment trust. Equity REIT Index Equities S&P 500 Index An unmanaged market-value weighted index of stocks. Bonds Lehman Aggregate An unmanaged index comprised of government securities, mortgage-backed securities, Bond Index asset-backed securities and corporate securities to simulate the universe of bonds in the market. The maturity of the bonds in the index are over one year. Commodities S&P GSCI A composite index of commodity sector returns representing an unleveraged, long-only Commodities Index investment in commodity futures that is broadly diversified across the spectrum of commodities. Other PHX Oil Services A price-weighted index composed of 15 companies that provide oil drilling and production Sector Index services, oil field equipment, support services and geophysical/reservoir services. 15 Tortoise Capital Advisors L.L.C.
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