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 811-21549
ENERGY INCOME AND GROWTH FUND
(Exact name of registrant as specified in charter)
1001 WARRENVILLE ROAD
SUITE 300
LISLE, IL 60532
(Address of principal executive offices) (Zip code)
W. SCOTT JARDINE
FIRST TRUST PORTFOLIOS L.P.
1001 WARRENVILLE ROAD
SUITE 300
LISLE, IL 60532
(Name and address of agent for service)
Registrant's telephone number, including area code: 630-241-4141
Date of fiscal year end: NOVEMBER 30
Date of reporting period: FEBRUARY 28, 2006
Form N-Q is to be used by management investment companies, other than small
business investment companies registered on Form N-5 (ss.ss. 239.24 and 274.5 of
this chapter), to file reports with the Commission, not later than 60 days after
the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under
the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use
the information provided on Form N-Q in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and
the Commission will make this information public. A registrant is not required
to respond to the collection of information contained in Form N-Q unless the
Form displays a currently valid Office of Management and Budget ("OMB") control
number. Please direct comments concerning the accuracy of the information
collection burden estimate and any suggestions for reducing the burden to the
Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC
20549. The OMB has reviewed this collection of information under the clearance
requirements of 44 U.S.C. ss. 3507.
ITEM 1. SCHEDULE OF INVESTMENTS.
The Schedule(s) of Investments is attached herewith.
ENERGY INCOME AND GROWTH FUND
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 2006 (UNAUDITED)
MARKET
SHARES VALUE
-------------- -------------
MASTER LIMITED PARTNERSHIPS - 140.0%
OIL, GAS & CONSUMABLE FUELS - 140.0%
278,290 Alliance Resource Partners, L.P. ............... $ 10,271,684
131,300 Atlas Pipeline Partners, L.P. .................. 5,508,035
45,600 Boardwalk Pipeline Partners, L.P. .............. 887,376
357,143 Clearwater Natural Resources, L.P. + ........... 7,142,860
40,000 Copano Energy, LLC ............................. 1,627,200
253,201 Copano Energy, LLC + ........................... 10,213,300
317,272 Crosstex Energy, L.P. .......................... 11,739,064
100,860 DCP Midstream Partners, L.P. ................... 2,773,650
13,382 Enbridge Energy Partners, L.P. ................. 598,176
567,370 Energy Transfer Partners, L.P. ................. 20,266,456
176,425 Enterprise GP Holdings, L.P. ................... 7,030,536
459,998 Enterprise Product Partners, L.P. .............. 11,168,752
4,000 Genesis Energy, L.P. ........................... 46,400
17,461 Global Partners, L.P. .......................... 367,903
73,100 Hiland Partners, L.P. .......................... 2,997,100
250,000 Holly Energy Partners, L.P. .................... 10,027,500
148,000 Inergy Holdings, L.P. .......................... 5,032,000
385,275 Inergy, L.P. ................................... 10,533,419
140,771 Kinder Morgan Energy Partners, L.P. ............ 6,654,245
27,100 Linn Energy, LLC * ............................. 562,867
49,500 Magellan Midstream Holdings, L.P. * ............ 1,152,855
461,756 Magellan Midstream Partners, L.P. .............. 14,540,697
230,178 MarkWest Energy Partners, L.P. ................. 10,358,010
25,477 Martin Midstream Partners, L.P. ................ 759,724
128,169 Natural Resource Partners, L.P. ................ 6,750,661
82,354 Northern Border Partners, L.P. ................. 3,961,227
285,143 Pacific Energy Partners, L.P. .................. 8,825,176
344,956 Plains All American Pipeline, L.P. ............. 15,457,478
52,600 Regency Energy Partners, L.P. * ................ 1,055,156
2,130 Suburban Propane Partners, L.P. ................ 61,536
14,000 Teekay LNG Partners, L.P. ...................... 425,600
70,000 U.S. Shipping Partners, L.P. ................... 1,605,800
205,291 Valero, L.P. ................................... 10,679,238
153,600 Williams Partners, L.P. ........................ 5,084,160
-------------
206,165,841
-------------
TOTAL MASTER LIMITED PARTNERSHIPS .............. 206,165,841
-------------
(Cost $152,531,515)
RIGHTS - 0.0%
OIL, GAS & CONSUMABLE FUELS - 0.0%
17 Clearwater Natural Resources, L.P. - Rights +*. 0
-------------
TOTAL RIGHTS ................................... 0
-------------
(Cost $0)
See Notes to Quarterly Portfolio of Investments. Page 1
ENERGY INCOME AND GROWTH FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
FEBRUARY 28, 2006 (UNAUDITED)
MARKET
VALUE
-------------
TOTAL INVESTMENTS - 140.0% ..................... $ 206,165,841
(Cost $152,531,515)**
NET OTHER ASSETS & LIABILITIES - (12.5)% (18,389,220)
--------------
LOAN OUTSTANDING - (4.4)%....................... (6,500,000)
--------------
ENERGY NOTES PAYABLE - (23.1)% ................. (34,000,000)
--------------
NET ASSETS - 100.0% $ 147,276,621
==============
------------------------------
* As of February 28, 2006, this security has not paid a distribution
to the Fund.
** Aggregate cost for federal income tax and financial reporting
purposes.
+ Securities are restricted and cannot be offered for public sale
without first being registered under the Securities Act of 1933, as
amended. Before they are registered, these securities may only be
resold, in transactions exempt from registration, to qualified
institutional buyers. Market value is determined in accordance with
procedures adopted by the Board of Trustees (See Note 1C).
Page 2 See Notes to Quarterly Portfolio of Investments.
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NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS (UNAUDITED)
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ENERGY INCOME AND GROWTH FUND
FEBRUARY 28, 2006
1. VALUATION AND INVESTMENT PRACTICES
A. PORTFOLIO VALUATION:
Energy Income and Growth Fund (the "Fund") determines the net asset value of its
Common Shares as of the close of regular session trading on the New York Stock
Exchange ("NYSE"), normally 4:00 p.m. Eastern time, no less frequently than
weekly on Friday of each week. Net asset value is computed by dividing the value
of all assets of the Fund (including accrued interest and dividends), less all
Fund liabilities (including accrued expenses, dividends payable, current and
deferred income taxes and any borrowings of the Fund) by the total number of
shares outstanding. The Fund will rely to some extent on information provided by
the master limited partnerships ("MLPs"), which is not necessarily timely, to
estimate taxable income allocable to the MLP units held in the Fund's portfolio
and to estimate the associated deferred tax liability. From time to time, the
Fund will modify its estimates and/or assumptions regarding its deferred tax
liability as new information becomes available. To the extent the Fund modifies
its estimates and/or assumptions, the net asset value of the Fund would likely
fluctuate.
The Fund's investments are valued at market value or, in the absence of market
value with respect to any portfolio securities, at fair value according to
procedures adopted by the Fund's Board of Trustees. Portfolio securities listed
on any exchange other than the NASDAQ National Market ("NASDAQ") are valued at
the last sale price on the business day as of which such value is being
determined. If there has been no sale on such day, the securities are valued at
the mean of the most recent bid and asked prices on such day. Securities traded
on the NASDAQ are valued at the NASDAQ Official Closing Price as determined by
NASDAQ. Portfolio securities traded on more than one securities exchange are
valued at the last sale price on the business day as of which such value is
being determined at the close of the exchange representing the principal market
for such securities. Portfolio securities traded in the over-the-counter market,
but excluding securities traded on the NASDAQ, are valued at the closing bid
prices. Fixed income securities with a remaining maturity of 60 days or more
will be valued by the Fund using a pricing service. When price quotes are not
available, fair market value is based on prices of comparable securities.
Short-term investments that mature in less than 60 days are valued at amortized
cost.
B. SECURITIES TRANSACTIONS:
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date; interest income on such securities
is not accrued until settlement date. The Fund instructs the custodian to
segregate assets of the Fund with a current value at least equal to the amount
of its when-issued purchase commitments.
C. RESTRICTED SECURITIES:
The Fund may invest up to 35% of its Managed Assets, which is the average daily
gross asset value of the Fund minus accrued liabilities (excluding the principal
of any borrowings), in restricted securities. Restricted securities are
securities that cannot be offered for public sale without first being registered
under the Securities Act of 1933, as amended. The Fund currently holds the
restricted securities shown in the following table consisting of limited
partnership units of Clearwater Natural Resources, L.P. ("Clearwater"), and
limited liability company units of Copano Energy, LLC ("Copano"), which were
purchased in private placement transactions. Restricted securities are valued at
fair value in accordance with procedures adopted by the Fund's Board of
Trustees.
CARRYING
CARRYING COST VALUE PER
VALUE PER PER SHARE SHARE
SHARE AT ACQUISITION AT ACQUISITION 2/28/06
ACQUISITION 2/28/06 DATE DATE VALUE % OF
SECURITY DATE SHARES (RESTRICTED) (RESTRICTED) (UNRESTRICTED) (RESTRICTED) NET ASSETS
-------------------------------------------------------------------------------------------------------------------------------
Clearwater Natural
Resources, L.P. 8/01/05 357,143 $20.00 $20.00 N/A $ 7,142,860 4.85%
Clearwater Natural
Resources, L.P.
-Rights 8/01/05 17 0.00 0.00 N/A 0.00 0.00
Copano Energy,
LLC 8/01/05 253,201 40.34 28.21 $40.50* 10,213,300 6.93
---------- ------------- ------
610,361 $17,356,160 11.78%
========== ============= ======
* This is the carrying value of unrestricted shares of Copano at 8/01/05,
which is the date of purchase and date an enforceable right to acquire the
restricted Copano securities was obtained by the Fund.
Page 3
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NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS (UNAUDITED) - (CONTINUED)
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ENERGY INCOME AND GROWTH FUND
FEBRUARY 28, 2006
2. UNREALIZED APPRECIATION/(DEPRECIATION)
As of February 28, 2006, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was $53,709,514
and the aggregate gross unrealized depreciation for all securities in which
there was an excess of tax cost over value was $75,188.
Page 4
ITEM 2. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial
officers, or persons performing similar functions, 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") (17 CFR 270.30a-3(c))) are effective, as of
a date within 90 days of the filing date of the report that includes
the disclosure required by this paragraph, based on their evaluation
of these controls and procedures required by Rule 30a-3(b) under the
1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b)
under the Securities Exchange Act of 1934, as amended (17 CFR
240.13a-15(b) or 240.15d-15(b)).
(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
(17 CFR 270.30a-3(d)) that occurred during the registrant's last
fiscal quarter that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 3. EXHIBITS.
Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of
the Sarbanes-Oxley Act of 2002 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.
(Registrant) ENERGY INCOME AND GROWTH FUND
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By (Signature and Title)* /S/ JAMES A. BOWEN
-------------------------------------------------------
James A. Bowen, Chairman of the Board, President and
Chief Executive Officer
(principal executive officer)
Date APRIL 27, 2006
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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 (Signature and Title)* /S/ JAMES A. BOWEN
-------------------------------------------------------
James A. Bowen, Chairman of the Board, President and
Chief Executive Officer
(principal executive officer)
Date APRIL 27, 2006
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By (Signature and Title)* /S/ MARK R. BRADLEY
-------------------------------------------------------
Mark R. Bradley, Treasurer, Controller,
Chief Financial Officer and Chief Accounting Officer
(principal financial officer)
Date APRIL 27, 2006
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* Print the name and title of each signing officer under his or her signature.