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  811-22593



The Cushing Energy Income Fund
 (Exact name of registrant as specified in charter)



8117 Preston Road Suite 440
Dallas, TX 75225
 (Address of principal executive offices) (Zip code)



Jerry V. Swank
8117 Preston Road Suite 440
Dallas, TX 75225
 (Name and address of agent for service)



214-692-6334
Registrant's telephone number, including area code



Date of fiscal year end: November 30



Date of reporting period:  February 29, 2016

 
Item 1. Schedule of Investments.
 
The Cushing® Energy Income Fund
      
SCHEDULE OF INVESTMENTS (Unaudited)
      
 
   
February 29, 2016
  
             
         
Fair
  
Common Stock - 62.3%
  
Shares
    
Value
  
Exploration & Production - 57.6%
            
Canada - 9.7%
            
Arc Resources Ltd. (1)
    
36,959
    
$
490,328
  
Cenovus Energy, Inc.
    
50,000
      
571,000
  
Vermillion Energy, Inc.
    
31,000
      
843,163
  
Netherlands - 3.5%
                
Royal Dutch Shell Plc (1)
    
15,000
      
682,200
  
United States - 44.5%
                
Anadarko Petroleum Corporation
    
8,500
      
322,575
  
California Resource Corporation
    
2,378
      
1,336
  
Chevron Corporation (1)
    
20,000
      
1,668,800
  
ConocoPhillips Company (1)
    
28,327
      
958,302
  
Devon Energy Corporation
    
22,532
      
443,429
  
EOG Resource, Inc. (1)
    
16,238
      
1,051,248
  
Exxon Mobil Corporation (1)
    
14,600
      
1,170,190
  
Noble Energy, Inc.
    
10,000
      
295,000
  
Occidental Petroleum Corporation (1)
    
25,300
      
1,741,146
  
Pioneer Natural Resource Company
    
9,158
      
1,103,813
  
             
11,342,530
  
Midstream - 4.6%
                
United States - 4.6%
                
Targa Resources Corporation
    
33,976
      
913,274
  
                 
Total Common Stocks (Cost $17,262,414)
          
$
12,255,804
  
                 
Master Limited Partnerships and Related Companies - 37.2%
                
Crude Oil & Refined Products - 6.4%
                
United States - 6.4%
                
NuStar Energy, L.P.
    
35,900
    
$
1,257,577
  
                 
Large Cap Diversified - 16.0%
                
United States - 16.0%
                
Energy Transfer Partners, L.P. (1)
    
42,888
      
1,143,823
  
ONEOK Partners, L.P. (1)
    
50,000
      
1,469,500
  
Williams Partners, L.P. (1)
    
27,500
      
542,300
  
             
3,155,623
  

 
 
Propane - 0.8%
            
United States - 0.8%
            
NGL Energy Partners, L.P.
    
20,000
      
161,800
  
                   
Shipping - 7.7%
                
Republic of the Marshall Islands - 7.7%
                
Capital Products Partners, L.P. (1)
    
246,265
      
824,987
  
Golar LNG Partners, L.P. (1)
    
47,000
      
686,200
  
               
1,511,187
  
Upstream - 6.3%
                
United States - 6.3%
                
Dorchester Minerals, L.P. (1)
    
124,778
      
1,184,143
  
Viper Energy Partners, L.P.
    
4,000
      
59,560
  
               
1,243,703
  
                   
Total Master Limited Partnerships and Related Companies (Cost $13,764,117)
          
$
7,329,890
  
                 
Fixed Income - 2.8%
  
Principal Amount
          
Upstream - 2.8%
                
United States - 2.8%
                
BreitBurn Energy Partners, L.P., 7.875%, due 04/15/2022
    
1,000,000
    
$
105,000
  
EV Energy Partners, L.P., 8.000%, due 04/15/2019
    
2,000,000
      
450,000
  
Total Fixed Income (Cost $3,077,500)
          
$
555,000
  
                 
Short-Term Investments - Investment Companies - 19.0%
  
Shares
          
United States - 19.0%
                
AIM Short-Term Treasury Portfolio Fund - Institutional Class, 0.02%(2)
    
747,185
    
$
747,185
  
Fidelity Government Portfolio Fund - Institutional Class, 0.01%(2)
    
747,184
      
747,184
  
Fidelity Money Market Portfolio - Institutional Class, 0.12%(2)
    
747,184
      
747,184
  
First American Government Obligations Fund - Class Z, 0.07%(2)
    
747,184
      
747,184
  
Invesco STIC Prime Portfolio, 0.08%(2)
    
747,184
      
747,184
  
Total Short-Term Investments - Investment Companies (Cost $3,735,921)
          
$
3,735,921
  
                 
Total Investments - 121.3% (Cost $37,839,952)
          
$
23,876,615
  
Liabilities in Excess of Other Assets - (21.3)%
            
(4,186,602
)
Net Assets Applicable to Common Stockholders - 100.0%
          
$
19,690,013
  
   
Percentages are stated as a percent of net assets.
                
(1)
All or a portion of these securities are held as collateral pursuant to the loan agreements.
                
(2)
Rate reported is the current yield as of February 29, 2016.
                


Tax Basis

The cost basis of investments for federal income tax purposes at February 29, 2016 was as follows*:
 
Cost of investments
  
$
38,150,598
  
Gross unrealized appreciation
    
(55,634
)
Gross unrealized depreciation
    
(13,896,960
)
Net unrealized depreciation
  
$
(13,952,594
)
 
* The above table only reflects tax adjustments through November 30, 2015.  For the previous fiscal year's federal income tax information, please refer to the Notes to Financial Statements section in the Cushing Energy Income Fund’s (the “Fund”) most recent semi-annual or annual report.
 
Fair Value Measurements
 
Various inputs that are used in determining the fair value of the Fund’s investments are summarized in the three broad levels listed below:

·
Level 1 — quoted prices in active markets for identical securities
·
Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
·
Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
 
These inputs are summarized in the three broad levels listed below.
 
       
Fair Value Measurements at Reporting Date Using
   		  
         
Quoted Prices in
          
Significant
  
         
Active Markets for
    
Significant Other
    
Unobservable
  
   
Fair Value at
    
Identical Assets
    
Observable Inputs
    
Inputs
  
Description
  
February 29, 2016
    
(Level 1)
    
(Level 2)
    
(Level 3)
  
Assets
Equity Securities
                        
Common Stock (a)
  
$
12,255,804
    
$
12,255,804
    
$
-
    
$
-
  
Master Limited Partnerships and Related Companies (a)
    
7,329,890
      
7,329,890
      
-
      
-
  
US Royalty Trusts (a)
    
-
      
-
      
-
      
-
  
Total Equity Securities
    
19,585,694
      
19,585,694
      
-
      
-
  
Notes        
    
555,000
      
-
      
555,000
      
-
  
      Senior Notes(a)                                
Total Notes
    
555,000
      
-
      
555,000
      
-
  
Other Short-Term Investments
    
3,735,921
      
3,735,921
      
-
      
-
  
Total Other
    
3,735,921
      
3,735,921
      
-
      
-
  
Total
  
$
23,876,615
    
$
23,321,615
    
$
555,000
    
$
-
  

(a)
All other industry classifications are identified in the Schedule of Investments.  The Fund did not hold Level 3 investments at any time during the period ended February 29, 2016.

Transfers into and out of each level are measured at fair value at the end of the fiscal period.  There were no transfers between any levels during the period ended February 29, 2016.
Item 2. Controls and Procedures.
 
(a)
The Fund’s President and Treasurer have concluded that the Fund's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (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 the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or Rule 15d‑15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(d)).

(b)
There were no changes in the Fund'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 Fund's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Fund's internal control over financial reporting.


 
Item 3. Exhibits.
 
Separate certifications for each principal executive officer and principal financial officer of the Fund as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)).  Filed herewith.
 

 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Fund has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


(Registrant)     The Cushing Energy Income Fund

By (Signature and Title)  /s/ Jerry V. Swank
Jerry V. Swank, President & Chief Executive Officer
Date April 28, 2016



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 Fund and in the capacities and on the dates indicated.

By (Signature and Title)  /s/ Jerry V. Swank
Jerry V. Swank, President & Chief Executive Officer

Date April 28, 2016
 
By (Signature and Title)  /s/ John H. Alban
John H. Alban, Treasurer & Chief Financial Officer
 
Date April 28, 2016