Energy pipelines - FPA of Northeast Floridanortheastfloridafpa.org/net/gallery/files/events/2013/20130620_Symposium/handouts/...Venezuela Oil Strike, 2002. Credit Crisis, 2008 Hurricane

Energy pipelinesOur essential infrastructure

©2013 Tortoise Capital Advisors, LLC · www.tortoiseadvisors.com Second Quarter 2013

Pipeline asset class

©2013 Tortoise Capital Advisors, LLC Page 3

UPSTREAM MIDSTREAM DOWNSTREAM

Energy value chain

GAS FIELD

OIL FIELDFractionatorFractionator

Gas Storage Facility

Gas Storage Facility Power

PlantPower Plant

PetrochemicalPlantPetrochemicalPlant

RefineryRefineryRefinery

Gas Processing Facility

Gas Processing Facility

Liquid-rich gasN

GL

NGL products

Crude oil

NG

L p

rod

uct

s

Refi

ned

pro

du

cts

Dry gas

Dry gas

OIL FIELD

GAS FIELD

Source: Tortoise Capital


1Source: 2012: Barclays and Tortoise Capital Advisors; Projections from 2011 - 2035: International Energy Agency The projections on this page are based on industry estimates and are no guarantee of future outcomes

The North American energy revolution

Upstream acreage, drilling

and production investments

like never before

$184 billion is expected in

2013 alone and $4.3 trillion is

expected through 20351

Oil Sands

Montney

Bakken

Niobrara

Fayetteville

Marcellus

Huron

Antrim

Utica

Collingwood

Woodford

Mississippi Lime

Haynesville

Tuscaloosa

Floyd

Barnett

Granite Wash

Wolfcamp

Monterey

Mancos

Eagle Ford Oil and gas basins Prospective shale development


Unconventional vs. conventional reservoirs

0 ft

2,500 ft

5,000 ft

7,500 ft

12,500 ft

10,000 ft

15,000 ft

Groundwater

Tight gas sandstones

Coalbeds (CBM)

Oil & gas saturated

shale reservoir

Reservoir seal

Source: Tortoise Capital Advisors

Conventional oil

& gas reservoir


United States

Game-changing crude oil production

10

8

6

4

2

0

mill

ion

bar

rels

/ d

ay

Source: US: EIA (historical), CITI, 2012 (forecasted); Canada: Canadian Association of Oil Producers (historical), BMO Capital Markets (forecasted).

1970 19901980 2000 2010 2020E

Early Iran/Iraq War, 1980

Gulf War, 1990Enron and 9/11, 2001

Operation Iraqi Freedom, 2003

Venezuela Oil Strike, 2002

Credit Crisis, 2008

Hurricane Katrina/Rita, 2005

Libya Violence, 2011

mill

ion

bar

rels

/ d

ay

1970 1995 2020E

7

5

3

1

Canada


Growing natural gas production supported by growing demand

Source: IEA1, 2013

Trill

ion

cub

ic f

eet

U.S. demand expected to grow

(1)Natural gas supply and demand data based on IEA’s “Golden Age of Gas” scenario, incorporating recent policies and trends affecting natural gas usage(2)Other includes: Non-associated offshore, Alaska, Coalbed Methane, Associated with oil and Non-associated onshore

110%

Source: EIA, 2013

Supported by vast U.S. shale reservoirs

Production Demand

Production as % of Demand35

30

25

20

15

10

5

0

1990 2000 2010

2011

2030 20402020

Trill

ion

cu

bic

feet

ProjectionsHistory

Shale gas Tight Gas Other2

90%

0%

20%

40%

60%

80%

100%

120%

0

5

10

15

20

25

30

35

2010 2035


Driving forces

Expanding natural gas production and demand

Newfound U.S. production decreasing overseas imports

Increasing Canadian oil imports

Next 2 decades

Estimated 65,000 miles pipeline infrastructure build-out1

$300+ billion investment potential over next two decades1

$100+ billion in identified pipeline and related projects from 2013-2015 alone

Significant pipeline growth financing opportunities

(1) Based on IFC and International Energy Administration (2012)The projections on this page are based on industry estimates and are no guarantee of future outcomes. Source: Tortoise Capital Advisors


$328billion

$624billion

The North American pipeline universe – the universe of opportunity as we see it

Pipeline MLPs (Total 53) Market CapRefined ProductsBuckeye PartnersDelek Logistics PartnersGlobal PartnersHolly Energy PartnersLehigh Gas PartnersMagellan Midstream PartnersMPLXSusser Petroleum PartnersTransMontaigne Partners

Crude OilBlueknight Energy PartnersEnbridge Energy PartnersGenesis EnergyNuStar EnergyNuStar GP HoldingsOiltanking PartnersPlains All American PipelineRose Rock MidstreamSunoco Logistics PartnersTesoro Logistics LP

Natural Gas Transmission Boardwalk Pipeline PartnersCheniere Energy PartnersEl Paso Pipeline PartnersEnergy Transfer PartnersEnergy Transfer EquityEnterprise Products PartnersEQT Midstream PartnersInergyInergy MidstreamKinder Morgan Energy PartnersNiska Gas Storage PartnersOneok PartnersPAA Natural Gas Storage PartnersRegency Energy PartnersSpectra Energy PartnersTC PipelinesWilliams Partners

Gathering & ProcessingAccess Midstream PartnersAmerican Midstream PartnersAtlas Pipeline PartnersCompressco PartnersCopano EnergyCrestwood Midstream PartnersCrosstex EnergyDCP Midstream PartnersExterran PartnersMarkWest Energy PartnersPVR PartnersSouthcross Energy PartnersSummit Midstream PartnersTarga Resources PartnersUSA Compression PartnersWestern Gas Energy PartnersWestern Gas Partners

$201billion

Pipeline Affiliates (Total 13) Crosstex Energy IncEnbridge Energy Management LLCEnbridge IncEnbridge Income Fund Holdings

EQT CorpKinder Morgan IncKinder Morgan Management LLCOneok Inc

SemGroup CorpSpectra Energy CorpTarga Resources CorpTransCanada Corp

Williams Companies Inc

$95billion

Pipeline Corporations (Total 21)AGL Resources IncAltaGas, Ltd.Atmos Energy CorpCenterpoint Energy IncChesapeake Utilities CorpGibson Energy Inc

Keyera CorpLaclede Group IncNational Fuel Gas CoNew Jersey Resources CorpNiSource IncNorthwest Natural Gas Co

OGE Energy CorpPembina Pipeline CorpPiedmont Natural Gas Co IncQuestar CorpSouth Jersey Industries IncSouthwest Gas Corp

Valener IncVeresen IncWGL Holdings Inc

87Total Pipeline CompaniesAs of 3/31/2013.Source: Tortoise Capital Advisors


Risk varies by segment

Source: Tortoise Capital Advisors. Please see important disclosures at end of presentation.

Past performance is no guarantee of future results.

Long-Haul Natural Gas Pipelines

Low Moderate Moderate Low

SegmentCommodity

ExposureInvestment Grade %

BetaDistribution

Cuts

Long-Haul Crude Oil & Refined

Products PipelinesLow Moderate Moderate Low

Natural Gas Gathering & Processing

Moderate Low High Moderate

Upstream (E&P, Coal, Shipping

and Other)High Low High High


Pipeline transport contracts

5 – 20 years, complemented with shorter-term contracts for remaining capacity

Interstate – FERC regulated | Intrastate – Public Utility Commission regulated

Term

Tariffs

(1)Average PPI of the preceeding year’s 12-monthly periods, effective through 2016 for certain oil pipelines.

Actual volume

Delivered volume

PPI + 2.65(1)

Firm access to volume or interruptible volume

Capacity reserved and/or volume transported

Expectations built into contracts and access to regulatory

rate filing proceedings

Contracted Service

Oil Natural Gas

Tariff Structure

Inflation escalation


Pipeline risks and mitigants

Pipeline Risks

Commodity Prices

Fee-based revenues

Focus on midstream assets

Tariffs based on acceptable Return on Equity

High depreciation may result in low tax impact

Regulatory Changes

Increase in Interest Rates / Inflation

Inflation escalator

Increased throughout

Long-term contracts

Mostly inelastic demands

Economic Downturn

Please see important disclosures at end of presentation.

Tortoise Capital Advisors


Who we are

Deeply committed to exceptional service

A mindset that values relationships and a commitment to put clients first

A foundation on which we build and maintain trust

Passionate about quality

A focus on providing high quality in all we do

Focused on the long term

A disciplined and results-driven investment process

A steadfast, “tortoise-like” investment philosophy that endures across economic cycles

Motivated by thinking differently

An approach that fosters curiosity, debate and teamwork

A view that looks beyond the obvious and inspires relevant investment solutions


Company timeline

Inergy private investment

Inergy IPO

20011999Est. 1993

$2.5b high yield portfolio

$900mm energy

Est. 1990 2001

1 Mariner Holdings, LLC (“Mariner”) transferred its ownership to Mariner’s wholly-owned subsidiary, Montage Investments, in 2010. This did not result in change of control.

Establish separate accounts practice

Establish mutual fund business

20042003 2006 2009 2010 20122005 2011Est. 2002

First direct placement

MBO in conjunction with Mariner Holdings, LLC1


Tortoise Capital Advisors

Our firm*

Manages approximately $11.4 billion with decade-plus history

Deep and experienced team of 52

Committed to energy infrastructure investment

Pioneering investment products have broadened and deepened investor base

Long-term investment philosophy

Investment process focused on risk and return

Emphasizes high quality investments

Proprietary risk, financial and valuation models

*As of 3/31/2013.


The Tortoise team

Managing Directors

6 Professionals

Development

11 Professionals

Investment Management

15 Professionals

• Public company research

• Trading

• Institutional development

• Petroleum engineer/geologist

• New product development

• Fund investor relations

• SMA client service

• Trade processing

• Accounting

• Compliance

• Tax

Operations

12 Finance / Operations

8 SMA Support

Managing Directors

13 CFA designations

As of 3/31/2013.


Sector structural comparison

Traditional Flow-through

Open-End Fund

C-corp Closed-End

Fund

Exchange Traded Note

C-corp Open-End

Fund

C-corp Exchange

Traded Fund

MLP Separate Account

Primary portfolio MLPs MLPs MLPs MLPs MLPs Diversified Pipeline Cos.

Portfolio management Active Active Passive Active Passive Active

Invested capital Fluctuates Permanent N/A Fluctuates Fluctuates Fluctuates

Taxation N/A Yes No Yes Yes N/A

Tax planning control N/A Yes N/A No No N/A

Deferred tax impact N/A Sigfinicantly delayed1 N/A 100% 100% N/A

Leverage N/A Yes Possible/product Not Possible/product Not dependent typically2 dependent typically2

Counterparty risk N/A N/A Yes N/A N/A N/A

Redemption liquidity N/A Market Price Market Price NAV Market Price NAV

Unrelated business taxable income Yes No No No No No

Tax reporting Multiple K-1s 1099 1099 1099 1099 1099

Note: Illustrated in order of introduction to sector. The risks of investing vary depending on an investor’s particular situation. Investment objectives, risks, and fees/expenses within particular MLP-related product alternatives vary. All investments involve risk. Principal risk is possible. Nothing contained in this communication constitutes tax, legal or investment advice. Investors must consult their tax adviser or legal counsel for advice and information concerning their particular situation and should carefully read specific fund documentation for particular situations. ETFs, ETNs and closed-end funds trade throughout the day on exchanges and open-end mutual funds are priced daily. Closed-end funds raise capital through an initial public offering or follow-on offerings. ETFs and closed-end funds can trade at a premium or a discount to the value of their underlying securities. ETNs are unsecured unsubordinated debt and can be traded or redeemed at maturity, with no guarantee of principal repayment. The value of an ETN can be positively or negatively affected by the credit rating of the issuer. Trading of securities on exchanges generally involve additional fees. In a separately managed account, an investor owns individual securities and in a mutual fund an investor owns a share of a pool of securities. There are generally no guarantees or insurance related to any of the above products.

(1)While closed-end funds have a tax liability reflected in their NAV, Tortoise believes their market price has historically traded at yields that recognize the present value of the deferred tax liability. Additionally, closed-end funds use a limited amount of leverage that also helps to offset the potential deferred tax liability.(2)Utilization of borrowings would generally be short term in nature to satisfy redemption requests.

Fun

d L

evel


Hypothetical tax impact of MLP-related product structures Analysis reflects hypothetical mathematical example of how different MLP product structures are impacted by tax within the entity (product)

Separately managed account 10.0% -1.0% 0.0% 0.0% 9.0%

C-corporation closed-end fund 10.0% -1.0% 1.5%1 -1.6%2,3 8.9%

Exchange traded note 10.0% -1.0% 0.0% 0.0% 9.0%

C-corporation open-end fund4 10.0% -1.0% 0.0% -3.5%2 5.5%

C-corporation exchange traded fund 10.0% -1.0% 0.0% -3.5%2 5.5%

Traditional flow-through open-end fund5 10.0% -1.0% 0.0% 0.0% 9.0%

The above example does not represent any actual investment. As such, it does not reflect what an investor may achieve, but is a purely hypothetical example to illustrate the potential mathematical entity (product) level tax impact of MLP-related product structures. As in any investment product, the individual investor impact may vary based on a variety of individual investor level factors, which are not considered in the above entity level analysis.

Hypothetical Product Level Mathematical Example

Base Fees & Expenses

Leverage Impact

Entity Tax Impact

Net Before Investor Tax

(1) Assumes leverage of 25% of total assets (a moderate degree of leverage for closed-end funds and consistent with the 1940 act) with a leverage cost of 4.5%. As the open-end MLP funds do not typically use leverage, the analysis assumes 0% leverage for such funds. (2)Assumes effective federal income tax rate of 35% (the highest marginal income tax rate for corporations) and state income tax rate of 4%. A traditional open-end fund structured as a regulated investment company (RIC) is a flow through entity and thus would not have tax at the product level assuming the fund was in compliance with the RIC rules.(3)Assumes discount factor of 10% (assumed to equal the assumed base return) over 10 years. A closed-end fund trades at its market price, which may differ from its reported net asset value (NAV). MLP closed-end funds have typically traded at a premium to their NAV, partly through market recognition that the deferred tax liability reflected in their NAV (which reflects 100% of the deferred tax as if the entire portfolio is liquidated today and the tax is paid) will not likely be recognized immediately at one time.(4)Reflects institutional class. For investor class, with a maximum load of 5.75% and a 12b-1 fee of 0.25%, the theoretical net return would be 5.0%.(5)Reflects institutional class. For investor class, with a maximum load of 5.75% and a 12b-1 fee of 0.25%, the theoretical net return would be 8.2%.

Nothing contained in this communication constitutes tax, legal or investment advice. Investors must consult their tax adviser or legal counsel for advice and information concerning their particular situation.


Important disclosuresThis presentation contains certain forward-looking statements. These forward-looking statements include 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 in the presentation, you are cautioned not to

place undue reliance on the forward-looking statements. This presentation is updated through March 31, 2013 unless otherwise noted.

The fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The summary and statutory prospectus contains this and other important information about the fund and may be obtained by calling 855-TCA-FUND (855-822-3863) or visiting www.tortoiseadvisors.com. Read it carefully before investing.Mutual fund investing involves risk. Principal loss is possible. The fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified

fund. Therefore, the Fund is more exposed to individual stock volatility than a diversified fund. Investing in specific sectors such as energy infrastructure may involve

greater risk and volatility than less concentrated investments. Risks include, but are not limited to, risks associated with companies owning and/or operating pipelines and

complementary assets, as well as Master Limited Partnerships (MLPs), MLP affiliates, capital markets, terrorism, natural disasters, climate change, operating, regulatory,

environmental, supply and demand, and price volatility risks. The tax benefits received by an investor investing in the fund differs from that of a direct investment in an MLP

by an investor. The value of the fund’s investment in an MLP will depend largely on the MLP’s treatment as a partnership for U.S. federal income tax purposes. If the MLP

is deemed to be a corporation then its income would be subject to federal taxation, reducing the amount of cash available for distribution to the Fund which could result

in a reduction of the fund’s value. Investments in non-U.S. companies (including Canadian issuers) involve risk not ordinarily associated with investments in securities and

instruments of U.S. issuers, including risks related to political, social and economic developments abroad, differences between U.S. and foreign regulatory and accounting

requirements, tax risk and market practices, as well as fluctuations in foreign currencies. The fund invests in small and mid-cap companies, which involve additional risks such

as limited liquidity and greater volatility than larger companies. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investment in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities. The fund may also write call options which may limit the fund’s ability to profit from increases in the market value of a security, but cause it to retain the risk of loss should the price of the security decline.

Beta: A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the broader market. Return on Equity (ROE): Amount, expressed as a percentage, earned on a company’s common stock investment for a given period - serves as a measure of profitability telling common shareholders how effectual their money is being employed. Upstream: exploration and production of energy commodities. Midstream: Transportation, gathering, processing and storage of energy commodities.

Tortoise MLP & Pipeline Fund top 10 holdings as of 2/28/2013: Williams Companies, Inc. 9.1%; Kinder Morgan, Inc. 9.1%; Enbridge, Inc. 7.6%; Spectra Energy Corp. 7.6%; ONEOK, Inc. 7.6%; NiSource, Inc. 6.6%; CenterPoint Energy, Inc. 4.6%; TransCanada Corp. 4.6%; Questar Corp. 4.0%; EQT Corp. 3.1%

Quasar Distributors, LLC, Distributor.

Documents

Energy pipelines - FPA of Northeast Floridanortheastfloridafpa.org/net/gallery/files/events/2013/20130620_Symposium/handouts/...Venezuela Oil Strike, 2002. Credit Crisis, 2008 Hurricane