(NYSE:KED) Kayne Anderson Energy Development Company (the “Company”) today announced its financial results for the quarter ended May 31, 2010.
RESULTS OF OPERATIONS – QUARTER ENDED MAY 31, 2010
- The Company announced a quarterly distribution of $0.30 per share
- Net asset value: $16.89 per share
- Net investment loss: $0.4 million
- Net realized gains: $3.3 million
- Net unrealized loss: $1.3 million
Investment income totaled $1.3 million and consisted primarily of interest income on the Company’s energy debt investments and net dividends and distributions. The Company received $2.6 million of cash dividends and distributions, of which $2.2 million was treated as a return of capital during the period.
The amount of investment income received is lower than previous periods primarily because the Company did not receive a cash distribution from its common and preferred investments in Direct Fuels. In lieu of a cash distribution on the common and preferred units owned by the Company, Direct Fuels paid a distribution on such units in additional preferred units. The additional preferred units are senior to the existing convertible preferred units. The Company received $1.2 million of preferred unit distributions, which is not included in investment income but is reflected as an unrealized gain.
Operating expenses totaled $1.9 million, including $0.9 million of base investment management fees; $0.5 million for interest expense (including $0.2 million of amortization of debt issuance costs) and $0.5 million for other operating expenses. Base investment management fees were equal to an annual rate of 1.75% of average total assets.
The Company’s net investment loss totaled $0.4 million and included a deferred income tax benefit of $0.2 million.
The Company had net realized gains from its investments of $3.3 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 utilize its capital loss carryforwards.