DALLAS, June 1, 2016 /PRNewswire/ -- The Cushing® Energy Income Fund (formerly known as the Cushing® Royalty & Income Fund) (NYSE: SRF) announced its monthly distribution and changes to non-fundamental investment policies.
Monthly Distribution
The Fund declared a distribution for June 2016 of $0.057 per common share. The Fund's distribution will be payable on June 30, 2016 to shareholders of record on June 16, 2016. The ex-date for the Fund's distribution is June 14, 2016.
It is anticipated but not certain that approximately 100% of the Fund's distribution will be treated as a return of capital. The final determination of such amounts will be made and reported to shareholders in early 2017, after the end of the calendar year when the Fund determines its earnings and profits for the year. The final tax status of the distributions may differ substantially from this preliminary information.
Changes to Non-Fundamental Investment Policies
The Fund's Board of Trustees approved modifications to certain non-fundamental investment policies, which will become effective as of October 1, 2016.
The Fund will continue to pursue its investment objective to seek a high total return with an emphasis on current income. The Fund currently pursues its investment objective by investing in certain companies engaged in the upstream energy sector. Under the modified investment policies, the Fund will focus on a wider array of exploration and production ("E&P") companies, including large cap E&P companies and integrated energy companies with significant E&P activities.
Effective as of October 1, 2016:
- Under normal market conditions, the Fund will invest at least 80% of its assets net assets, plus any borrowings for investment purposes, in public and private securities of energy companies involved in exploring, developing, producing, transporting, gathering and processing, storing, refining, distributing, mining or marketing natural gas, natural gas liquids (including propane), crude oil, refined products or coal.
- The Fund will invest no more than 25% of its total assets in securities of energy master limited partnerships ("MLPs") that qualify as publicly traded partnerships under the Internal Revenue Code.
The Fund is treated as a regular corporation, or a "C" corporation, for U.S. federal income tax purposes and, as a result, unlike most investment companies, is subject to corporate income tax to the extent the Fund recognizes taxable income. As a result of the modifications to the Fund's investment policies and strategy described above, the Fund intends to manage its portfolio in a manner intended to allow the Fund to qualify and elect to be treated as a regulated investment company ("RIC") for U.S. federal income tax purposes beginning in the Fund's fiscal year ending November 30, 2017. In order to qualify as a RIC, the Fund must, among other things, satisfy income, asset diversification and distribution requirements. There can be no assurance that the Fund will qualify as a RIC. Until the Fund elects and qualifies to be treated as a RIC, the Fund will continue to be treated a C Corporation for U.S. federal income tax purposes. If the Fund qualifies and elects to be treated as a RIC, the Fund would be subject to tax on any net unrealized appreciation as of the last day the Fund was taxable as a C corporation. Also, the Fund would be required to distribute any earnings and profits accumulated as of the last day the Fund was taxable as a C corporation. Shareholders are urged to consult their own tax advisors to determine the tax consequences to them of investing in the Fund.
Additional Information
The Fund is a non-diversified, closed-end management investment company. The Fund is traded on the New York Stock Exchange under the symbol "SRF."
The Fund is managed by Cushing® Asset Management, LP ("Cushing"). No assurance can be given that the Fund's investment objective will be achieved.
ABOUT CUSHING® ASSET MANAGEMENT, LP
Cushing, a subsidiary of Swank Capital, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts which invest primarily in securities of MLPs and other natural resource companies. As of March 31, 2016, Cushing had approximately $2.9 billion of assets under management in closed-end funds, mutual funds, privately offered funds and separately managed accounts.
IMPORTANT INFORMATION
This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction.
This press release contains certain statements that may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included herein are "forward-looking statements." Although the Funds and Cushing believe that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the company's reports that are filed with the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required by law, the Funds and Cushing do not assume a duty to update this forward-looking statement.
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SOURCE Cushing Asset Management, LP
