ClearBridge Energy MLP Fund Inc.

 

 

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 811-22405

ClearBridge Energy MLP Fund Inc.

(Exact name of registrant as specified in charter)

620 Eighth Avenue, 49th Floor, New York, NY 10018

(Address of principal executive offices) (Zip code)

Robert I. Frenkel, Esq.

Legg Mason & Co., LLC

100 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

Registrant’s telephone number, including area code: 1-888-777-0102

Date of fiscal year end: November 30

Date of reporting period: August 31, 2015

 

 

 

 

ITEM 1. SCHEDULE OF INVESTMENTS.

CLEARBRIDGE ENERGY MLP FUND INC.

FORM N-Q

AUGUST 31, 2015

CLEARBRIDGE ENERGY MLP FUND INC.

 

Schedule of investments (unaudited)    August 31, 2015

 

SECURITY

    SHARES/UNITS      VALUE  
MASTER LIMITED PARTNERSHIPS - 162.8%      

Diversified Energy Infrastructure - 49.8%

      

Energy Transfer Equity LP

      8,303,156       $ 232,903,526   

Energy Transfer Partners LP

      2,460,956         120,931,378   

Enterprise Products Partners LP

      7,599,438         213,620,202   

Genesis Energy LP

      2,098,551         91,622,736   

ONEOK Partners LP

      2,191,911         70,908,321   

Plains GP Holdings LP, Class A Shares

      1,581,390         30,979,430   
     

 

 

  

Total Diversified Energy Infrastructure

         760,965,593   
     

 

 

  

Gathering/Processing - 33.8%

      

Antero Midstream Partners LP

      1,299,435         30,094,915   

Blueknight Energy Partners LP

      53,989         334,732   

Cone Midstream Partners LP

      1,272,880         14,549,018   

Crestwood Midstream Partners LP

      1,268,338         9,905,720   

DCP Midstream Partners LP

      2,481,112         69,967,358   

Enable Midstream Partners LP

      1,526,301         23,688,192   

EnLink Midstream Partners LP

      4,270,315         75,285,653   

MarkWest Energy Partners LP

      2,782,678         156,859,559   

Targa Resources Partners LP

      2,380,138         71,856,366   

Western Gas Partners LP

      1,078,216         63,431,447   
     

 

 

  

Total Gathering/Processing

         515,972,960   
     

 

 

  

General Partner - 3.9%

      

EQT GP Holdings LP

      1,042,800         33,911,856   

Tallgrass Energy GP LP

      883,150         25,258,090   
     

 

 

  

Total General Partner

         59,169,946   
     

 

 

  

Global Infrastructure - 7.2%

      

Brookfield Infrastructure Partners LP

      2,775,413         109,628,814   
     

 

 

  

Liquids Transportation & Storage - 47.4%

      

Buckeye Partners LP

      2,056,760         144,837,039   

Enbridge Energy Partners LP

      3,960,458         112,001,753   

Holly Energy Partners LP

      900,440         31,137,215   

Magellan Midstream Partners LP

      2,370,760         167,304,533   

PBF Logistics LP

      1,270,000         26,352,500   

Plains All American Pipeline LP

      3,844,451         138,630,903   

Sunoco Logistics Partners LP

      1,955,860         66,166,744   

Tesoro Logistics LP

      717,178         37,874,170   
     

 

 

  

Total Liquids Transportation & Storage

         724,304,857   
     

 

 

  

Natural Gas Transportation & Storage - 14.5%

      

Columbia Pipeline Partners LP

      3,615,540         71,696,158   

TC Pipelines LP

      896,964         48,418,117   

Williams Partners LP

      2,553,133         101,742,350   
     

 

 

  

Total Natural Gas Transportation & Storage

         221,856,625   
     

 

 

  

Oil/Refined Products - 2.1%

      

Rose Rock Midstream LP

      1,017,739         31,621,151   
     

 

 

  

Refining - 0.3%

      

Western Refining Logistics LP

      200,690         5,205,899   
     

 

 

  

Shipping - 3.8%

      

Golar LNG Partners LP

      381,069         7,533,734   

Teekay LNG Partners LP

      1,416,078         37,653,514   

Teekay Offshore Partners LP

      744,087         13,170,340   
     

 

 

  

Total Shipping

         58,357,588   
     

 

 

  

TOTAL MASTER LIMITED PARTNERSHIPS
(Cost - $1,747,038,171)

         2,487,083,433   
     

 

 

  

 

See Notes to Schedule of Investments.

 

1

CLEARBRIDGE ENERGY MLP FUND INC.

 

Schedule of investments (unaudited) (cont’d)    August 31, 2015

 

SECURITY

      SHARES      VALUE  
COMMON STOCKS - 15.2%           
ENERGY - 12.6%           

Oil, Gas & Consumable Fuels - 12.6%

           

Kinder Morgan Inc.

           5,941,311       $ 192,557,889   
          

 

 

  
INDUSTRIALS - 2.6%           

Transportation Infrastructure - 2.6%

           

Macquarie Infrastructure Corp.

           510,930         40,220,410   
          

 

 

  

TOTAL COMMON STOCKS
(Cost - $177,597,584)

              232,778,299   
          

 

 

  

TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENTS
(Cost - $1,924,635,755)

   

      2,719,861,732   
          

 

 

  
     RATE     MATURITY
DATE		      FACE
AMOUNT		         
SHORT-TERM INVESTMENTS - 0.8%           

Repurchase Agreements - 0.8%

           

State Street Bank & Trust Co. repurchase agreement dated 8/31/15; Proceeds at maturity - $12,302,000; (Fully collateralized by U.S. Treasury Notes, 1.750% due 5/15/22; Market value - $12,552,750) (Cost - $12,302,000)

      0.000 %      9/1/15       $ 12,302,000         12,302,000   
          

 

 

  

TOTAL INVESTMENTS** - 178.8%
(Cost - $1,936,937,755#)

              2,732,163,732   

Mandatory Redeemable Preferred Stock, at Liquidation

Value - (13.1)%

              (200,000,000 ) 

Liabilities in Excess of Other Assets - (65.7)%

              (1,003,842,411 ) 
          

 

 

  

TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS - 100.0%

            $ 1,528,321,321   
          

 

 

  

 

** The entire portfolio is subject to lien, granted to the lender and Senior Note holders, to the extent of the borrowing outstanding and any additional expenses.

 

# Aggregate cost for federal income tax purposes is substantially the same.

This Schedule of Investments is unaudited and is intended to provide information about the Fund’s portfolio holdings as of the date of the schedule. Other information regarding the Fund is available in the Fund’s most recent annual or semi-annual shareholder report.

 

See Notes to Schedule of Investments.

 

2

Notes to Schedule of Investments (unaudited)

 

1. Organization and significant accounting policies

ClearBridge Energy MLP Fund Inc. (the “Fund”) was incorporated in Maryland on March 31, 2010 and is registered as a non-diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Board of Directors authorized 100 million shares of $0.001 par value common stock. The Fund’s investment objective is to provide a high level of total return with an emphasis on cash distributions. The Fund seeks to achieve its objective by investing primarily in master limited partnerships (“MLPs”) in the energy sector. There can be no assurance that the Fund will achieve its investment objective.

Under normal market conditions, the Fund will invest at least 80% of its Managed Assets in MLPs in the energy sector (the “80% policy”). For purposes of the 80% policy, the Fund considers investments in MLPs to include investments that offer economic exposure to public and private MLPs in the form of equity securities of MLPs, securities of entities holding primarily general partner or managing member interests in MLPs, securities that are derivatives of interests in MLPs, including I-Shares, exchange-traded funds that primarily hold MLP interests and debt securities of MLPs. The Fund considers an entity to be within the energy sector if it derives at least 50% of its revenues from the business of exploring, developing, producing, gathering, transporting, processing, storing, refining, distributing, mining or marketing of natural gas, natural gas liquids (including propane), crude oil, refined petroleum products or coal. “Managed Assets” means net assets plus the amount of any borrowings and assets attributable to any preferred stock of the Fund that may be outstanding.

The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”).

(a) Investment valuation. Equity securities for which market quotations are available are valued at the last reported sales price or official closing price on the primary market or exchange on which they trade. The valuations for fixed income securities (which may include, but are not limited to, corporate, government, municipal, mortgage-backed, collateralized mortgage obligations and asset-backed securities) and certain derivative instruments are typically the prices supplied by independent third party pricing services, which may use market prices or broker/dealer quotations or a variety of valuation techniques and methodologies. The independent third party pricing services use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar securities. Short-term fixed income securities that will mature in 60 days or less are valued at amortized cost, unless it is determined that using this method would not reflect an investment’s fair value. If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund values these securities as determined in accordance with procedures approved by the Fund’s Board of Directors.

The Board of Directors is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Legg Mason North Atlantic Fund Valuation Committee (formerly, Legg Mason North American Fund Valuation Committee) (the “Valuation Committee”). The Valuation Committee, pursuant to the policies adopted by the Board of Directors, is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s pricing policies, and reporting to the Board of Directors. When determining the reliability of third party pricing information for investments owned by the Fund, the Valuation Committee, among other things, conducts due diligence reviews of pricing vendors, monitors the daily change in prices and reviews transactions among market participants.

The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making fair value determinations. Examples of possible methodologies include, but are not limited to, multiple of earnings; discount from market of a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield analysis; yield to maturity; and/or fundamental investment analysis. The Valuation Committee will also consider factors it deems relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not limited to, the type of security; the issuer’s financial statements; the purchase price of the security; the discount from market value of unrestricted securities of the same class at the time of purchase; analysts’ research and observations from financial institutions; information regarding any transactions or offers with respect to the security; the existence of merger proposals or tender offers affecting the security; the price and extent of public trading in similar securities of the issuer or comparable companies; and the existence of a shelf registration for restricted securities.

 

3

Notes to Schedule of Investments (unaudited) (continued)

 

For each portfolio security that has been fair valued pursuant to the policies adopted by the Board of Directors, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such back testing monthly and fair valuation occurrences are reported to the Board of Directors quarterly.

The Fund uses valuation techniques to measure fair value that are consistent with the market approach and/or income approach, depending on the type of security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income approach uses valuation techniques to discount estimated future cash flows to present value.

GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. 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, interest rates, prepayment speeds, credit risk, etc.)

 

  •  

Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used in valuing the Fund’s assets carried at fair value:

 

ASSETS

  

DESCRIPTION

    QUOTED PRICES
(LEVEL 1)		      OTHER SIGNIFICANT
OBSERVABLE INPUTS
(LEVEL 2)		      SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL 3)		      TOTAL  

Long-term investments†:

            

Master limited partnerships

    $ 2,487,083,433         —           —         $ 2,487,083,433   

Common stocks

      232,778,299         —           —           232,778,299   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total long-term investments

    $ 2,719,861,732         —           —         $ 2,719,861,732   
  

 

 

     

 

 

     

 

 

     

 

 

  

Short-term investments†

      —         $ 12,302,000         —           12,302,000   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total investments

    $ 2,719,861,732       $ 12,302,000         —         $ 2,732,163,732   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

† See Schedule of Investments for additional detailed categorizations.

2. Investments

At August 31, 2015, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:

 

Gross unrealized appreciation

    $ 918,193,448   

Gross unrealized depreciation

      (122,967,471 ) 
  

 

 

  

Net unrealized appreciation

    $ 795,225,977   
  

 

 

  

 

4

 

ITEM 2. CONTROLS AND PROCEDURES.

 

  (a) The registrant’s principal executive officer and principal 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, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities 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 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

 

ITEM 3. EXHIBITS.

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are attached hereto.

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.

ClearBridge Energy MLP Fund Inc.

 

By   /s/     JANE TRUST        
  Jane Trust
  Chief Executive Officer

Date:

  

October 21, 2015

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.

 

By   /s/    JANE TRUST        
  Jane Trust
  Chief Executive Officer

Date:

  

October 21, 2015

By   /s/    RICHARD F. SENNETT        
  Richard F. Sennett
  Principal Financial Officer

Date:

  

October 21, 2015