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Kayne Anderson Energy Development Company Announces Results For The Quarter Ended May 31, 2010

Based on the foregoing assumptions, the Company is expected to generate distributable cash flow per share of $0.31 per quarter. Included in this estimate is a $1.2 million distribution of additional preferred units from Direct Fuels. Such distribution is attributable to the Company’s ownership of Direct Fuel’s common and preferred units. While the Company believes that Direct Fuels will generate sufficient distributable cash flow to make cash distributions during 2011, Direct Fuels has received a notice of default under its existing credit agreement and no cash distributions will be permitted until such covenants have been amended. Direct Fuels recently signed an agreement to sell its ethanol terminal for $16 million. In connection with such sale, Direct Fuels is in active discussions with its lenders regarding the repayment of approximately 40% of the outstanding balance under its credit agreement and the amendment of certain covenants.

CONFERENCE CALL

The Company will host a conference call at 4:00 p.m. Central time, on Thursday, July 15, 2010 to discuss its results. All interested parties are welcome to participate. You can access the conference call by dialing (877) 563-8315 approximately 5-10 minutes prior to the call. International callers should dial (706) 679-4383. All callers should reference "Conference ID #83579392." For the convenience of the Company’s stockholders, an archived replay of the call will be available on the Company’s website ( http://www.kaynefunds.com/webcasts.htm).

AVAILABLE INFORMATION

The Company’s filings with the Securities and Exchange Commission, press releases and other financial information are available on the Company’s website at www.kaynefunds.com.

 
KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY
STATEMENT OF ASSETS AND LIABILITIES
(amounts in 000’s, except share and per share amounts)
   

May 31,

2010 (Unaudited)

November 30, 2009

ASSETS
Investments, at fair value:
Non-affiliated (Cost — $141,402 and $172,244) $ 100,394 $ 136,857
Affiliated (Cost — $99,003 and $73,025) 100,524 63,502
Repurchase agreements (Cost — $7,230 and $4,710)   7,230     4,710  
Total investments (Cost — $247,635 and $249,979) 208,148 205,069
Deferred income tax asset 14,789 20,135
Receivable for securities sold 2,297 14
Interest, dividends and distributions receivable, net 1,148 410
Debt issuance costs, prepaid expenses and other assets   1,102     392  
Total Assets   227,484     226,020  
LIABILITIES
Senior secured revolving credit facility 52,000 56,000
Payable for securities purchased 1,314 17
Investment management fee payable 945 858
Accrued directors’ fees and expenses 75 74
Accrued expenses and other liabilities   648     532  
Total Liabilities   54,982     57,481  
NET ASSETS $ 172,502   $ 168,539  
NET ASSETS CONSIST OF
Common stock, $0.001 par value (200,000,000 shares authorized at May 31,
2010 and November 30, 2009; 10,215,995 and 10,163,978 shares issued and
outstanding at May 31, 2010 and November 30, 2009, respectively) $ 10 $ 10
Paid-in capital 204,113 203,576
Accumulated net investment loss, net of income taxes, less dividends (9,346 ) (2,869 )
Accumulated net realized gains (losses) on investments, net of income taxes 3,205 (3,272 )
Net unrealized losses on investments, net of income taxes   (25,480 )   (28,906 )
NET ASSETS $ 172,502   $ 168,539  
NET ASSET VALUE PER SHARE $ 16.89   $ 16.58  
 
KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY
STATEMENT OF OPERATIONS
(amounts in 000’s)
(UNAUDITED)
 
  Three Months Ended
May 31, 2010   May 31, 2009
INVESTMENT INCOME
Income
Dividends and Distributions:
Non-affiliated investments $ 1,115 $ 1,855
Affiliated investments   1,543     1,950  
Total dividends and distributions 2,658 3,805
Return of capital   (2,222 )   (3,406 )
Net dividends and distributions   436     399  

Interest and other income :

  872     710  
Total investment income   1,308     1,109  
Expenses
Base investment management fees 945 776
Professional fees 173 209
Directors’ fees and expenses 77 69
Insurance 36 41
Administration fees 33 29
Custodian fees 17 17
Other expenses   155     147  
Total Expenses — Before Interest Expense 1,436 1,288
Interest expense   485     296  
Total Expenses   1,921     1,584  
Net Investment Loss — Before Income Taxes (613 ) (475 )
Deferred income tax benefit   224     204  
Net Investment Loss   (389 )   (271 )
 
REALIZED AND UNREALIZED GAINS (LOSSES)
Net Realized Gains (Losses)
Investments 5,100 (9,936 )
Foreign currency transactions 22
Options 17
Deferred income tax benefit (expense)   (1,869 )   3,970  
Net Realized Gains (Losses)   3,253     (5,949 )
Net Change in Unrealized Gains (Losses)
Investments (2,018 ) 23,578
Foreign currency translations 26
Options (17 )
Deferred income tax benefit (expense)   736     (9,056 )
Net Change in Unrealized Gains (Losses)   (1,282 )   14,531  
Net Realized and Unrealized Gains   1,971     8,582  
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,582   $ 8,311  

###

The Company is a non-diversified, closed-end investment company registered under the Investment Company Act of 1940. The Company's investment objective is to generate both current income and capital appreciation primarily through equity and debt investments. The Company will seek to achieve this objective by investing at least 80% of its net assets together with the proceeds of any borrowings (its "total assets") in securities of companies that derive the majority of their revenue from activities in the energy industry, including: (a) Midstream Energy Companies, which are businesses that operate assets used to gather, transport, process, treat, terminal and store natural gas, natural gas liquids, propane, crude oil or refined petroleum products; (b) Upstream Energy Companies, which are businesses engaged in the exploration, extraction and production of natural resources, including natural gas, natural gas liquids and crude oil, from onshore and offshore geological reservoirs; and (c) Other Energy Companies, which are businesses engaged in owning, leasing, managing, producing, processing and sale of coal and coal reserves; the marine transportation of crude oil, refined petroleum products, liquefied natural gas, as well as other energy-related natural resources using tank vessels and bulk carriers; and refining, marketing and distributing refined energy products, such as motor gasoline and propane to retail customers and industrial end-users.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains "forward-looking statements" as defined under the U.S. federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will" and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to materially differ from the Company's historical experience and its present expectations or projections indicated in any forward-looking statement. These risks include, but are not limited to, changes in economic and political conditions; regulatory and legal changes; energy industry risk; commodity pricing risk; leverage risk; valuation risk; non-diversification risk; interest rate risk; tax risk; and other risks discussed in the Company's filings with the SEC. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements made herein. There is no assurance that the Company's investment objectives will be attained.



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