(NYSE:KED) Kayne Anderson Energy Development Company (the “Company”) today announced its financial results for the quarter ended February 28, 2010.
RESULTS OF OPERATIONS – QUARTER ENDED FEBRUARY 28, 2010
- The Company announced a quarterly distribution of $0.30 per share
- Net asset value: $17.03 per share
- Net investment loss: $0.2 million
- Net realized gains: $3.2 million
- Net unrealized gains: $4.7 million
Investment income totaled $1.4 million and consisted primarily of dividends from the Company’s MLP investments and interest income on its debt investments. The Company received $2.5 million of cash dividends and distributions, of which $2.1 million was treated as a return of capital during the period.
The amount of investment income received by the Company during its fiscal first quarter is lower than previous quarters because the Company did not receive a cash distribution from its common and preferred investments in Direct Fuels Partners, L.P. (“Direct Fuels”). In lieu of a cash distribution on its common and preferred units, Direct Fuels is paying a distribution to such unitholders in additional preferred units. The preferred units being issued are a new series, senior to the existing preferred units. The $1.2 million preferred unit distribution accrued by the Company during the quarter is not included in investment income, but is included in the net change in unrealized gains.
Operating expenses totaled $1.7 million, including $0.9 million of base investment management fees; $0.4 million for interest expense and $0.4 million for other operating expenses. Base investment management fees were equal to an annual rate of 1.75% of average total assets (excluding deferred tax assets).
The Company’s net investment loss totaled $0.2 million and included a deferred income tax benefit of $0.1 million.
The Company had net realized gains from its investments of $3.2 million, net of $1.9 million of deferred tax expense. During the quarter, the Company monetized several of its investments in publicly traded MLPs in an effort to generate realized gains. The Company engaged in this strategy in an effort to reduce its capital loss carryforwards with such realized gains.