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
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Energy Income and Growth Fund
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(Exact name of registrant as specified in charter)
1001 Warrenville Road, Suite 300
Lisle, IL 60532
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(Address of principal executive offices) (Zip code)
W. Scott Jardine
First Trust Portfolios L.P.
1001 Warrenville Road, Suite 300
Lisle, IL 60532
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(Name and address of agent for service)
Registrant's telephone number, including area code: 630-241-4141
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Date of fiscal year end: November 30
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Date of reporting period: August 31, 2007
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Form N-Q is to be used by management investment companies, other than small
business investment companies registered on Form N-5 (Sections 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. Section 3507.
ITEM 1. SCHEDULE OF INVESTMENTS.
The Schedule(s) of Investments is attached herewith.
ENERGY INCOME AND GROWTH FUND
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION (a) VALUE
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MASTER LIMITED PARTNERSHIPS - 159.7%
OIL, GAS & CONSUMABLE FUELS - 159.7%
225,090 Abraxas Energy Partners, L.P. (b) (c) (d) .............................................. $ 3,749,998
56,540 Alliance Holdings GP, L.P. ............................................................. 1,424,808
278,290 Alliance Resource Partners, L.P. ....................................................... 9,325,498
131,300 Atlas Pipeline Partners, L.P. .......................................................... 6,092,320
51,210 Capital Product Partners L.P. .......................................................... 1,483,554
465,471 Clearwater Natural Resources, L.P. (b) (c) ............................................. 6,516,594
586,402 Copano Energy, LLC ..................................................................... 22,863,814
106,910 Crosstex Energy, L.P. (b) (d) .......................................................... 3,551,807
317,272 Crosstex Energy, L.P. .................................................................. 11,231,429
187,565 DCP Midstream Partners, L.P. (b) (c) ................................................... 8,331,941
23,912 Enbridge Energy Partners, L.P. ......................................................... 1,219,273
567,370 Energy Transfer Partners, L.P. ......................................................... 29,525,935
597,388 Enterprise Product Partners, L.P. ...................................................... 17,628,920
88,709 EV Energy Partner, L.P (b) (c) ......................................................... 3,161,527
107,143 Global Partners, L.P. (b) .............................................................. 3,138,336
73,100 Hiland Partners, L.P. .................................................................. 3,655,731
250,000 Holly Energy Partners, L.P. ............................................................ 11,380,000
148,000 Inergy Holdings, L.P. .................................................................. 6,657,040
385,275 Inergy, L.P. ........................................................................... 12,548,407
312,521 Kinder Morgan Energy Partners, L.P. .................................................... 15,716,681
143,633 Linn Energy, LLC (b) (c) ............................................................... 4,674,671
69,994 Linn Energy, LLC Class D (b) (c) ....................................................... 2,168,001
437,756 Magellan Midstream Partners, L.P. ...................................................... 18,823,508
456,756 MarkWest Energy Partners, L.P. ......................................................... 14,561,381
25,477 Martin Midstream Partners, L.P. ........................................................ 976,788
256,338 Natural Resource Partners, L.P. ........................................................ 8,395,070
170,126 NuStar Energy L.P. ..................................................................... 10,586,941
564,516 Plains All American Pipeline, L.P. ..................................................... 32,487,896
52,600 Regency Energy Partners, L.P. .......................................................... 1,683,200
14,632 Targa Resources Partners L.P ........................................................... 438,960
14,000 Teekay LNG Partners, L.P. .............................................................. 489,580
214,319 U.S. Shipping Partners, L.P. ........................................................... 4,237,243
178,600 Williams Partners, L.P. ................................................................ 7,963,774
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TOTAL MASTER LIMITED PARTNERSHIPS ...................................................... 286,690,626
(Cost $157,965,216) --------------
COMMON STOCKS - 5.1%
OIL, GAS & CONSUMABLE FUELS - 5.1%
244,778 Abraxas Petroleum Corp. (b) (d) ........................................................ 876,305
117,869 Enbridge Energy Management, LLC (e) .................................................... 6,140,970
44,768 Kinder Morgan Management, LLC (e) ...................................................... 2,155,125
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TOTAL COMMON STOCKS .................................................................... 9,172,400
(Cost $7,813,964) --------------
See Notes to Quarterly Portfolio of Investments. Page 1
ENERGY INCOME AND GROWTH FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
AUGUST 31, 2007 (UNAUDITED)
MARKET
SHARES DESCRIPTION (a) VALUE
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RIGHTS - 0.0%
OIL, GAS & CONSUMABLE FUELS - 0.0%
17 Clearwater Natural Resources, L.P. - Rights (b) (c) (d) ................................ $ 0
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TOTAL RIGHTS ........................................................................... 0
(Cost $0) --------------
WARRANTS - 0.1%
OIL, GAS & CONSUMABLE FUELS - 0.1%
48,956 Abraxas Petroleum Corp. - Warrants,
Expiration 05/25/12 (b) (d) ......................................................... 100,326
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TOTAL WARRANTS ......................................................................... 100,326
(Cost $0) --------------
TOTAL INVESTMENTS - 164.9% ............................................................. 295,963,352
(Cost $165,779,180) (f)
NET OTHER ASSETS AND LIABILITIES - (23.8)% ............................................. (42,784,414)
LOAN OUTSTANDING - (8.2)% .............................................................. (14,750,000)
SERIES A ENERGY NOTES OUTSTANDING - (19.0)% ............................................ (34,000,000)
SERIES B ENERGY NOTES OUTSTANDING - (13.9)% ............................................ (25,000,000)
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NET ASSETS - 100.0% .................................................................... $ 179,428,938
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(a) All percentages shown in the Portfolio of Investments are based on
net assets.
(b) Security is fair valued in accordance with procedures adopted by the
Fund's Board of Trustees.
(c) Securities are restricted and cannot be offered for public sale
without first being registered under the Securities Act of 1933, as
amended. Prior to registration, restricted securities may only be
resold in transactions exempt from registration. (See Note 1C).
(d) Non-income producing security.
(e) Non-income producing security which pays regular in-kind
distributions.
(f) Aggregate cost for federal income tax and financial reporting
purposes.
Page 2 See Notes to Quarterly Portfolio of Investments.
ENERGY INCOME AND GROWTH FUND
PORTFOLIO COMPONENTS (a)
AUGUST 31, 2007 (UNAUDITED)
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Marine Transport 2.1%
Midstream Gas 43.1%
Midstream Oil 34.6%
Coal 8.7%
Propane 6.5%
Oil & Gas 5.0%
(a) Percentages are based on total investments. Please note that the
percentages shown on the Portfolio of Investments are based on net
assets.
See Notes to Quarterly Portfolio of Investments. Page 3
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NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS
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ENERGY INCOME AND GROWTH FUND
AUGUST 31, 2007 (UNAUDITED)
1. VALUATION AND INVESTMENT PRACTICES
A. PORTFOLIO VALUATION:
The net asset value ("NAV") of the Common Shares of Energy Income and Growth
Fund (the "Fund") is determined daily 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. The NAV per Common Share is
calculated by subtracting the Fund's liabilities (including accrued expenses,
dividends payable, current and deferred income taxes and any borrowings of the
Fund) from the Fund's Total Assets (the value of the securities and other
investments the Fund holds plus cash or other assets, including interest and
dividends accrued but not yet received) and dividing the result by the total
number of Common 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 NAV of the
Fund would likely fluctuate.
The Fund's investments are valued daily 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. A majority of the Fund's
assets are valued using marketing information supplied by third parties. In the
event that market quotations are not readily available, the pricing service does
not provide a valuation for a particular asset, or the valuations are deemed
unreliable, First Trust Advisors L.P. ("First Trust") may use a fair value
method to value the Fund's securities and investments. Additionally, if events
occur after the close of the principal market for particular securities (e.g.,
domestic debt and foreign securities), but before the Fund values its assets,
that could materially affect NAV, First Trust may use a fair value method to
value the Fund's securities and investments. The use of fair value pricing by
the Fund is governed by valuation procedures adopted by the Fund's Board of
Trustees and in accordance with the provisions of the Investment Act of 1940, as
amended (the "1940 Act").
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. 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.
Distributions received from the Fund's investments in MLPs generally are
comprised of return of capital from the MLP to the extent of the cost basis of
such MLP investments.
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 maintains liquid assets with a
current value at least equal to the amount of its when-issued or
delayed-delivery purchase commitments. At August 31, 2007, the Fund had no
when-issued or delayed-delivery 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
amount 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. Prior to registration, restricted
securities may only be resold in transactions exempt from registration. The Fund
currently holds the restricted securities shown in the following table. The Fund
does not have the right to demand that such securities be registered. These
securities are valued at fair value in accordance with procedures adopted by the
Fund's Board of Trustees and in accordance with the provisions of the 1940 Act.
Page 4
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NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS - (CONTINUED)
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ENERGY INCOME AND GROWTH FUND
AUGUST 31, 2007 (UNAUDITED)
CARRYING
VALUE PER MARKET
ACQUISITION SHARE CURRENT VALUE % OF
SECURITY DATE SHARES 08/31/07 CARRYING COST 08/31/07 NET ASSETS
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Abraxas Energy Partners, L.P. 05/25/07 225,090 $16.66 $ 3,715,786 $ 3,749,998 2.09%
Clearwater Natural Resources, L.P. 08/01/05 465,471 14.00 8,601,560 6,516,594 3.63
Clearwater Natural Resources, L.P. - Rights 08/01/05 17 0.00 0 0 0.00
DCP Midstream Partners, L.P. 06/22/07 86,705 43.46 3,704,038 3,768,026 2.10
EV Energy Partner, L.P 06/01/07 88,709 35.64 3,016,106 3,161,527 1.76
Linn Energy, LLC 01/30/07 117,634 32.67 2,871,780 3,842,703 2.14
Linn Energy, LLC 08/31/07 25,999 32.00 831,968 831,968 0.46
Linn Energy, LLC Class D 08/31/07 69,994 30.97 2,168,001 2,168,001 1.21%
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1,079,619 $24,909,239 $24,038,817 13.39%
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2. UNREALIZED APPRECIATION (DEPRECIATION)
As of August 31, 2007, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was $132,330,332
and the aggregate gross unrealized depreciation for all securities in which
there was an excess of tax cost over value was $2,146,160.
Page 5
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
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James A. Bowen, Chairman of the Board, President and
Chief Executive Officer
(principal executive officer)
Date October 23, 2007
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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
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James A. Bowen, Chairman of the Board, President and
Chief Executive Officer
(principal executive officer)
Date October 23, 2007
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By (Signature and Title)* /s/ Mark R. Bradley
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Mark R. Bradley, Treasurer, Controller, Chief
Financial Officer and Chief Accounting Officer
(principal financial officer)
Date October 26, 2007
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* Print the name and title of each signing officer under his or her signature.