KYN Kayne Anderson Energy Infrastructure Fund Inc

CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:    This report of Kayne Anderson Energy Infrastructure Fund, Inc. (the “Company”) 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 statements. These risks include, but are not limited to, changes in economic and political conditions; regulatory and legal changes; energy infrastructure company industry risk; leverage risk; valuation risk; interest rate risk; tax risk; and other risks discussed in the Company’s filings with the Securities and Exchange Commission (“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 update or revise any forward-looking statements made herein. There is no assurance that the Company’s investment objectives will be attained.

All investments in securities involve risks, including the possible loss of principal. The value of an investment in the Company could be volatile, and you could suffer losses of some or a substantial portion of the amount invested. The Company’s concentration of investments in energy infrastructure companies subjects it to the risks of midstream, renewable infrastructure and utility entities and the energy sector, including the risks of declines in energy and commodity prices, decreases in energy demand, adverse weather conditions, natural or other disasters, changes in government regulation, and changes in tax laws. Leverage creates risks that may adversely affect return, including the likelihood of greater volatility of net asset value and market price of common shares and fluctuations in distribution rates, which increases a stockholder’s risk of loss.

Performance data quoted in this report represent past performance and are for the stated time period only. Past performance is not a guarantee of future results. Current performance may be lower or higher than that shown based on market fluctuations from the end of the reported period.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
LETTER TO STOCKHOLDERS

October 2, 2024

Dear Fellow Stockholders,

As we conclude the third quarter of fiscal 2024, we are pleased to provide an update on the Company’s performance. In this letter, we will also review KYN’s portfolio positioning, the Company’s distribution policy, and the current energy infrastructure market landscape. In short, KYN has performed very well through the first nine months of fiscal 2024, and we remain excited about the prospects for the Company’s investments. As it relates to fiscal Q3:

•   KYN’s Net Asset Return was 10.8%;(1)

•   KYN underperformed the Alerian Midstream Energy Index (AMNA) by 140 basis points (10.8% vs. 12.2%);(2)

•   KYN outperformed the broader energy sector (measured by the XLE) by 1,210 basis points (10.8% vs. -1.3%);(3) and

•   KYN recently announced a distribution of $0.24 per share, which represents an increase of 9.1% over the prior quarter’s distribution(4)

Performance

It was another strong quarter for KYN’s midstream equity investments. This performance is particularly noteworthy given recent weakness in energy-related commodities and other energy subsectors. It is encouraging to see investors differentiate between midstream and other energy subsectors and recognize that midstream cash flows are largely driven by underlying volumes, not commodity prices. Regarding KYN’s top holdings, Targa Resources (TRGP) was up 24.9% for the fiscal quarter (total return basis) and was KYN’s best performing investment. TRGP was followed by Cheniere Energy (LNG) (up 17.7% during fiscal Q3) and ONEOK (OKE) (up 15.4%). Some of the laggards this quarter were Enterprise Products (EPD) (up 4.8%), Energy Transfer (ET) (up 4.8%) and Western Midstream (WES) (up 5.7%). In general, large-cap midstream corporations outperformed their MLP counterparts, a continuation of the prior quarter’s trend.

As discussed in prior communications, we expect that the vast majority of KYN’s portfolio will be allocated to midstream companies, with the remainder allocated to other energy companies, utilities, and renewable infrastructure companies. During the quarter, utilities and renewable infrastructure companies built upon their positive year-to-date performance, with the XLU and KRII up 5.7% and 1.5%, respectively. Utilities continue to signal significant increases in expected load growth and grid investment opportunities driven by surging demand from data centers and industrial re-shoring. Favorable demand growth trends, in conjunction with positive regulatory outcomes in key regions, continue to support and de-risk utilities and their long-term capital plans.

KYN’s Net Asset Return is up 28.3% fiscal year-to-date.(1) KYN’s Market Return, which is based on stock price performance rather than net asset value, is up 34.1% fiscal year-to-date.(5) KYN’s Market Return exceeded its Net Asset Return as KYN’s stock price traded at a 14.8% discount to NAV at fiscal quarter-end compared to a 18.5% discount at the beginning of the fiscal year. We do not believe this “mid-teens” discount is appropriate given KYN’s many favorable attributes and the positive market backdrop for the Company’s core midstream investments. We continue to believe that consistent performance, a significant return of cash to stockholders (through attractive distributions), and strategic actions that are accretive to our stockholders will be rewarded over time in the form of a narrowing discount.

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Note: Footnotes can be found on page 6.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
LETTER TO STOCKHOLDERS

Market Review

Broader equity markets experienced another strong quarter with the S&P 500, Dow Jones and NASDAQ up 6.0% to 8.0% on a total return basis; however, this was not without higher volatility. The S&P 500 and NASDAQ both set record highs in July before a sudden market selloff occurred in the first five trading days of August. The selloff, which was largely attributable to fears regarding the unwind of the “yen carry trade,” proved to be temporary as markets rebounded in the latter half of August on encouraging commentary from the Federal Reserve on the direction of short-term interest rates.

Interest rate volatility remained elevated throughout the quarter, but rates have trended significantly lower, with the yield on the 10-year U.S. Treasury down 57 basis points for the period. As we exited the quarter, the U.S. 10-year Treasury yield was 3.9% — roughly in line with the yield on the 2-year U.S. Treasury.

Importantly, on September 18th (after the end of the fiscal quarter), the Federal Reserve announced a 50 basis point decrease in the federal funds rate — their first interest rate cut since 2020. Commentary from Fed officials indicated they are seeking to strike a balance between fighting inflation and the economic risks of sustained restrictive monetary policy. The Fed is signaling additional rate cuts over the next two years and, as a result, performance of rate-sensitive subsectors such as real estate, financials and utilities benefitted from this commentary. We believe lower short-term interest rates will be a tailwind for midstream equities.

Notably, the energy sector underperformed the broader market during the quarter; however, there was a noticeable dispersion in performance amongst energy subsectors. The XLE (broader energy) was down 1.3% for the quarter while the AMNA and XLU were up 12.2% and 5.7%, respectively. As long-term rates have moderated, the market has seemingly rewarded stable, cash flowing equity investments such as midstream and utilities. Other drivers of this performance dispersion included weakening crude prices, persistently low natural gas prices, falling refining crack spreads, weaker-than-expected crude demand growth, and the risk-off market posture in August.

Midstream continues to be the best performing energy subsector over the last twelve months and has outperformed the major equity market indices over this period. KYN’s Net Asset Return has outperformed each of the indices, as can be seen in the table above. Within midstream, there was an upward bias to earnings estimates, with several guidance raises during the quarter. Results for gas-weighted names were relatively weaker, but this was well understood coming into the quarter — and those releases serve as another indication that activity cuts and curtailments were largely reflected in full year guidance. Capital spending edged higher, but the market appears to have become more comfortable with the sector’s prospects for growth — so long as incremental spending is geared towards highly accretive (and lower risk) projects. Going forward, we believe companies will differentiate themselves by executing on their return of capital strategies and per share growth metrics.

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Note: Footnotes can be found on page 6.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
LETTER TO STOCKHOLDERS

Consolidation in the midstream sector continued, with several transactions announced during the quarter. The largest of these was OKE’s acquisition of Global Infrastructure Partners’ (GIP) 43% interest in EnLink Midstream (ENLC) and Medallion Midstream. We expect to see the midstream sector (as well as broader energy) continue to consolidate over the next few years, as companies look to expand their asset footprints in core areas and capture operational and financial synergies.

It has been a great run for the midstream sector over the last few years. That said, we believe the sector’s attractive attributes — the mission critical nature of these assets, the tremendous opportunity to benefit from A.I.-led demand growth, its highly-contracted businesses with strong balance sheets and significant free cash flow generation — set the stage for several years of solid returns for investors.

Crude prices traded within a $70 to $90 per barrel range for the entirety of the quarter. This range has generally held since the fourth quarter of 2022. Since quarter end, however, prices dipped below $70 as the market remains focused on the potential return of incremental OPEC+ production that was previously curtailed. Despite upside risk from conflicts in the Middle East, we are more cautious about the outlook for crude prices over the next 12 – 18 months, as slower global demand growth and increased production are expected to result in inventory builds. Supply restraint has become increasingly difficult for OPEC+ to effectively manage, with pressure building to start phasing out curtailments. The drag on demand growth, meanwhile, stems from the sluggish Chinese economy, which accounted for over half of global oil demand growth last year. China’s recently announced stimulus efforts were well received and should bolster economic growth, but the net impact to crude markets remains to be seen.

Domestic natural gas prices rebounded briefly during the quarter, spiking to $3.00/mmbtu in early June in response to deep supply curtailments. However, prices quickly declined back to ~$2.00/mmbtu as producers rushed to return supply in response to higher prices. The gas market remains delicately balanced for the time being, with supply curtailments functioning as the main defense against low prices. Even so, we see the fundamentals for natural gas prices improving into next year with strong projected demand growth from the reshoring of industrial activities, A.I.-led data center development and incremental liquefied natural gas (“LNG”) demand as new export facilities begin to come online. A relatively weaker setup for global crude markets is paired with a stronger outlook for domestic natural gas.

Portfolio

As of August 31st, KYN’s portfolio was comprised of 28 investments (94% in publicly traded securities and 6% in privately held investments). The overwhelming majority of KYN’s portfolio is invested in publicly traded midstream companies. The remainder is a mix of investments in other energy and power subsectors and privately held midstream companies. We have an overweight allocation towards larger capitalization midstream companies with integrated suites of assets that we believe are well positioned to benefit from growing domestic production and increased exports. We believe the portfolio is also well positioned to benefit from growing natural gas demand driven by data center development and the reshoring of industrial activities.

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Note: Footnotes can be found on page 6.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
LETTER TO STOCKHOLDERS

Distribution

On September 19th, we were pleased to announce an increase to KYN’s quarterly distribution to $0.24 per share, which is an increase of $0.02 per share or 9.1% as compared to the prior quarter’s distribution.(4) This distribution is payable to common stockholders on October 7, 2024 and represents an 8.9% distribution rate based on KYN’s stock price as of August 31st.(12) We understand how important distributions are to our investors, and our goal is to steadily increase KYN’s distribution over time as supported by the Company’s operating results. Over the past year, we have increased KYN’s distribution by 14.3%.(13)

Outlook

We are very pleased with KYN’s year-to-date performance driven largely by the strong results of its equity investments in the midstream sector. Midstream trading multiples have expanded moderately over the past twelve months as the sector continues to come back in favor with investors. Nonetheless, current valuation levels compare favorably to the broader market (and other value sectors), as well as historical averages for the midstream sector — especially when measured on free cash flow yields. We continue to believe that midstream equities are well positioned to generate mid-teens total returns over the next few years without the benefit of further multiple expansion.

Our macroeconomic outlook is best described as cautious. Interest rate normalization was well received, and lower short-term rates should be a modest tailwind for utilities and other defensive dividend-paying equities. While we can paint a very constructive backdrop for energy infrastructure equities, there are also identifiable tail risks looming, including (i) the potential for a surprise result in the U.S. election leading to uncertainty about tax, energy or trade policies, (ii) a harder-than-expected “landing” in the U.S. or global economy resulting in global and/or regional recession, (iii) the inability or unwillingness of OPEC+ to maintain production curtailments resulting in over-production and a meaningful decline in crude prices,

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Note: Footnotes can be found on page 6.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
LETTER TO STOCKHOLDERS

(iv) the expansion of conflicts in Ukraine and/or the Middle East and (v) the possible escalation of tensions between China and Taiwan. Given these uncertainties, our bias is to continue to lean conservative with respect to KYN’s portfolio positioning and maintain lower leverage levels with ample downside cushion.(14) On the margin, we recently harvested profits from some of our portfolio positions and rotated those proceeds into larger capitalization, more diversified companies which tend to be considered defensive or “utility-like.”

We believe KYN — with its flexible investment mandate, permanent capital base, and expertise providing capital solutions to both public and private companies — provides very attractive exposure to the North American energy infrastructure sector in an income-producing vehicle. The Company provides this exposure in an easy-to-own structure — daily liquidity via its NYSE listing, an attractive distribution rate, and the tax simplicity of a single Form 1099. Lastly, conservative leverage and active portfolio and risk management from an experienced portfolio management team set the stage for a successful 2024 and beyond.

We encourage investors to visit our website at kaynefunds.com for more information about the Company, including the commentary posted on the “Insights” page that discusses key industry trends and other noteworthy topics.

We appreciate your investment in KYN and look forward to executing on our investment objective of achieving high after-tax total returns with an emphasis on making cash distributions to stockholders. Please do not hesitate to contact us with any questions or comments.

Sincerely,

James C. Baker, Jr.
Chairman of the Board
President and Chief Executive Officer

For more information:
cef@kaynecapital.com // 877.657.3863

www.kaynefunds.com

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Note: Footnotes can be found on page 6.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
LETTER TO STOCKHOLDERS

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
MANAGEMENT DISCUSSION
(UNAUDITED)

Company Overview

Kayne Anderson Energy Infrastructure Fund, Inc. (the “Company” or “KYN”) is a non-diversified, closed-end fund that commenced operations in September 2004. Our investment objective is to provide a high after-tax total return with an emphasis on making cash distributions to stockholders. We intend to achieve our investment objective by investing at least 80% of our total assets in the securities of Energy Infrastructure Companies. Please refer to the Glossary of Key Terms for the meaning of capitalized terms not otherwise defined herein.

As of August 31, 2024, we had total assets of $3.0 billion, net assets applicable to our common stockholders of $2.1 billion (net asset value of $12.60 per share), and 169.1 million shares of common stock outstanding.

Recent Events

On October 10, 2024, we announced that KYN’s distribution payment frequency will change from quarterly to monthly payments beginning in November 2024. We also declared a monthly distribution of $0.08 per share payable November 29, 2024, December 31, 2024 and January 31, 2025. This monthly distribution is equivalent to the $0.24 per share quarterly distribution paid by KYN on October 7, 2024.

The Board of Directors and management understand how important distributions are to KYN’s investors and believe this change to KYN’s distribution policy will make it an attractive choice for investors who desire more frequent distribution payments. Payment of future distributions is subject to the approval of the Company’s Board of Directors. It is the Company’s intention to declare monthly payments each month beginning with the monthly distribution payment expected to be made in February 2025.

Our Top Ten Portfolio Investments(1)

Listed below are our top ten portfolio investments by issuer as of August 31, 2024.

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(1)      Includes ownership of common and preferred units.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
MANAGEMENT DISCUSSION
(UNAUDITED)

Results of Operations — For the Three Months Ended August 31, 2024

Investment Income.    Investment income totaled $18.7 million for the quarter. We received $40.2 million of dividends and distributions. We estimated that $21.5 million of the dividends and distributions received were return of capital distributions and/or distribution in excess of cost basis. Return of capital and distributions in excess of cost basis increased by $3.7 million (net) during the quarter due to 2023 tax reporting information that we received in fiscal 2024. Interest Income was less than $0.1 million.

Operating Expenses.    Operating expenses totaled $18.0 million, including $9.5 million of investment management fees (net of fee waivers), $5.7 million of interest expense, $1.7 million of preferred stock distributions and $1.1 million of other operating expenses.

Net Investment Income.    Our net investment income was $1.0 million and included a current tax expense of $0.1 million and a deferred tax benefit of $0.4 million.

Net Realized Gains.    We had net realized gains of $43.4 million, consisting of realized gains from long term investments of $56.3 million, $0.8 million of realized losses from securities sold short, a current tax expense of $8.7 million and a deferred tax expense of $3.4 million.

Net Change in Unrealized Gains.    We had a net increase in our unrealized gains of $159.8 million. The net change consisted of an $204.0 million increase in unrealized gains on investments and a deferred tax expense of $44.2 million.

Net Increase in Net Assets Resulting from Operations.    As a result of the above, we had a net increase in net assets resulting from operations of $204.2 million.

Distributions to Common Stockholders

On September 19, 2024, KYN declared a quarterly distribution of $0.24 per common share for the third quarter, which was paid on October 7, 2024. On October 10, 2024, KYN announced a transition to monthly distributions and declared monthly distributions of $0.08 per common share payable November 29, 2024, December 31, 2024 and January 31, 2025. Payment of future distributions is subject to the approval of KYN’s Board of Directors, as well as meeting the covenants of our debt agreements and terms of our preferred stock.

The Board of Directors considers several items in setting our distributions to common stockholders including net distributable income (as defined below), realized and unrealized gains and expected returns for portfolio investments.

Net distributable income (“NDI”) is the amount of income received by us from our portfolio investments less operating expenses, subject to certain adjustments as described below. NDI is not a financial measure under the accounting principles generally accepted in the United States of America (“GAAP”). Refer to the Reconciliation of NDI to GAAP section for a reconciliation of this measure to our results reported under GAAP.

For the purposes of calculating NDI, income from portfolio investments includes (a) cash dividends and distributions, (b) paid-in-kind dividends received (i.e., stock dividends), (c) interest income from debt securities and (d) net premiums received from the sale of covered calls.

For the purposes of calculating NDI, operating expenses include (a) investment management fees paid to our investment adviser, (b) other expenses (mostly comprised of fees paid to other service providers), (c) interest expense and preferred stock distributions and (d) current and deferred income tax expense/benefit on net investment income/loss.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
MANAGEMENT DISCUSSION
(UNAUDITED)

Net Distributable Income (NDI)
(amounts in millions, except for per share amounts)

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(1)      Adjusted NDI excludes distributions received from NextEra Energy, Inc. attributable to the second quarter of 2024 with an ex-dividend date of June 3, 2024 ($0.2 million).

Reconciliation of NDI to GAAP

The difference between distributions and other income from investments in the NDI calculation and total investment income as reported in our Statement of Operations is reconciled as follows:

•   A significant portion of the cash distributions received from our investments is characterized as return of capital. For GAAP purposes, return of capital distributions are excluded from investment income, whereas the NDI calculation includes the return of capital portion of such distributions.

•   GAAP recognizes distributions received from our investments that exceed the cost basis of our securities to be realized gains and are therefore excluded from investment income, whereas the NDI calculation includes these distributions.

•   We may sell covered call option contracts to generate income or to reduce our ownership of certain securities that we hold. In some cases, we are able to repurchase these call option contracts at a price less than the call premium that we received, thereby generating a profit. The premium we receive from selling call options, less (i) the premium that we pay to repurchase such call option contracts and (ii) the amount by which the market price of an underlying security is above the strike price at the time a new call option is written (if any), is included in NDI. For GAAP purposes, premiums received from call option contracts sold are not included in investment income. See Note 2 — Significant Accounting Policies for the GAAP treatment of option contracts.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
MANAGEMENT DISCUSSION
(UNAUDITED)

Liquidity and Capital Resources

At August 31, 2024, we had total leverage outstanding of $588 million, which represented 20% of total assets. Currently, we intend to utilize leverage in an amount that represents approximately 20% of our total assets. Total leverage was comprised of $81 million of borrowings outstanding under our unsecured revolving credit facility (the “Credit Facility”), $354 million of senior unsecured notes (“Notes”) and $153 million of mandatory redeemable preferred stock (“MRP Shares”). As of August 31, 2024, we had $1 million of short term investments in money market funds. As of October 18, 2024, we did not have any borrowings outstanding under our Credit Facility and we had $40 million of short term investments in money market funds.

Our Credit Facility has a total commitment of $135 million and matures on February 20, 2025. The interest rate on borrowings under the Credit Facility may vary between the secured overnight financing rate (“SOFR”) plus 1.40% and SOFR plus 2.25%, depending on our asset coverage ratios. We pay a fee of 0.20% per annum on any unused amounts of the Credit Facility.

On May 22, 2024, we repaid $25 million of our $50 million unsecured term loan (the “Term Loan”), which represented the floating rate portion of the Term Loan (interest rate of SOFR plus 1.40%). On August 6, 2024, upon the maturity date of the Term Loan, we repaid the remaining $25 million of fixed rate borrowings (interest rate of 1.735%) and the Term Loan was terminated.

As of August 31, 2024, we had $354 million of Notes outstanding that mature between 2024 and 2034 and we had $153 million of MRP Shares outstanding that are subject to mandatory redemption between 2024 and 2032.

On September 18, 2024, we issued $70 million of new Notes and $30 million of new MRP Shares. The Notes issuance was comprised of two series: (1) $30 million of Series YY Notes with a 5.19% fixed rate due September 18, 2031 and (2) $40 million of Series ZZ Notes with a 5.45% fixed rate due September 18, 2036. The MRP Shares issuance was $30 million of Series X MRP Shares with a 5.49% fixed dividend rate and a mandatory redemption date of September 18, 2029. On September 20, 2024, we repaid the entire $20 million of Series V floating rate MRP Shares at liquidation value plus accumulated but unpaid dividends through the date of redemption. We expect to refinance upcoming 2024 Notes and MRP Shares maturities with cash on hand and/or borrowings under our Credit Facility.

At August 31, 2024, our asset coverage ratios under the Investment Company Act of 1940, as amended (“1940 Act”), were 625% for debt and 462% for total leverage (debt plus preferred stock). We target asset coverage ratios that give us the ability to withstand declines in the market value of the securities we hold before breaching the financial covenants in our leverage (we often refer to this as our “downside cushion”). At this time, we target asset coverage ratios that provide approximately 50% of downside cushion relative to our financial covenants. Our leverage targets are dependent on market conditions as well as certain other factors and may vary from time to time.

As of August 31, 2024, our total leverage consisted of 74% of fixed rate obligations and 26% of floating rate obligations. At such date, the weighted average interest/dividend rate on our total leverage was 5.04%.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
SCHEDULE OF INVESTMENTS
AUGUST 31, 2024
(amounts in 000’s)
(UNAUDITED)

See accompanying notes to financial statements.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
SCHEDULE OF INVESTMENTS
AUGUST 31, 2024
(amounts in 000’s)
(UNAUDITED)

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(1)     Unless otherwise noted, equity investments are common units/common shares.

(2)     Refer to Glossary of Key Terms for definitions of Energy Company, Midstream Energy Company and Utility Company.

(3)     Foreign security.

(4)     Fair valued on a recurring basis using significant unobservable inputs (Level 3). See Notes 2 and 3 in Notes to Financial Statements.

(5)     The Company’s ability to sell this security is subject to certain legal or contractual restrictions. As of August 31, 2024, the aggregate value of restricted securities held by the Company was $166,211 (5.6% of total assets). See Note 7 — Restricted Securities.

(6)     MPLX LP (“MPLX”) Series A Convertible Preferred Units (“MPLX Convertible Preferred Units”) are convertible on a one-for-one basis into common units of MPLX and are senior to the common units in terms of liquidation preference and priority of distributions. See Note 3 — Fair Value.

(7)     Sentinel Midstream Highline JV Holdings LLC (“Sentinel Midstream”) is a privately-held company that operates energy infrastructure assets near the Texas and Louisiana Gulf Coast which are referred to as Enercoast Energy Infrastructure (“EEI”). The Company is the owner of Series A-2 units which represent a membership interest in Sentinel Midstream (“Sentinel-EEI Series A-2 Units”). The Sentinel-EEI Series A-2 Units are pari passu with Series A-1 Units, and are senior to other classes of common equity in terms of liquidation preference and priority of distributions. See Note 3 — Fair Value.

(8)     The Company believes that it is an affiliate of Sentinel Midstream and Streamline Innovations Holdings, Inc. (“Streamline”). See Note 5 — Agreements and Affiliations.

(9)     Security is non-income producing.

(10)   Streamline is a privately-held company. Streamline Series C Preferred Shares are convertible into common equity at any time at the Company’s option and are senior to common equity and Series A and Series B preferred shares in terms of liquidation preference and priority of distributions. Streamline Series C Preferred Shares are entitled to receive a quarterly dividend beginning on March 31, 2025, at an annual rate of 12.0%, which rate shall increase 2.0% each year thereafter to a maximum rate of 18.0%. Streamline Series C Preferred Shares are redeemable by Streamline at any time after March 31, 2025, at a price sufficient for the Company to achieve a 20.0% internal rate of return on its investment.

(11)   On October 1, 2024, TC Energy Corporation (“TRP”) completed the spinoff of its liquids pipelines business into South Bow Corporation (“SOBO”). As a result of the spinoff transaction, TRP shareholders received one new TRP common share and 0.2 shares of SOBO for each share of TRP held as of September 25, 2024.

(12)   ADR — American Depositary Receipt.

(13)   The rate indicated is the yield as of August 31, 2024.

See accompanying notes to financial statements.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
SCHEDULE OF INVESTMENTS
AUGUST 31, 2024
(amounts in 000’s)
(UNAUDITED)

At August 31, 2024, the Company’s geographic allocation was as follows:

See accompanying notes to financial statements.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 2024
(amounts in 000’s, except share and per share amounts)
(UNAUDITED)

See accompanying notes to financial statements.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
STATEMENT OF OPERATIONS
(amounts in 000’s)
(UNAUDITED)

See accompanying notes to financial statements.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS APPLICABLE TO COMMON STOCKHOLDERS
(amounts in 000’s, except share amounts)

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(1)     Distributions on the Company’s mandatory redeemable preferred stock (“MRP Shares”) are treated as an operating expense under GAAP and are included in the calculation of net investment income (loss). See Note 2 — Significant Accounting Policies.

(2)     The characterization of the distributions paid to common stockholders for the nine months ended August 31, 2024, as either dividends (eligible to be treated as qualified dividend income) or distributions (return of capital) is based solely on the Company’s operating results during the period and does not reflect the expected results during the remainder of the fiscal year. The actual characterization of the common stock distributions made during the period will not be determinable until after the end of the fiscal year when the Company can determine its earnings and profits and may differ from this preliminary estimate.

(3)     Represents offering costs incurred in connection with the merger of Kayne Anderson NextGen Energy & Infrastructure, Inc.

See accompanying notes to financial statements.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED AUGUST 31, 2024
(amounts in 000’s)
(UNAUDITED)

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Supplemental disclosure of cash flow information:

During the nine months ended August 31, 2024, interest paid related to debt obligations were $16,917 and income tax paid was $577 (net of refunds received).

See accompanying notes to financial statements.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
FINANCIAL HIGHLIGHTS
(amounts in 000’s, except share and per share amounts)

See accompanying notes to financial statements.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
FINANCIAL HIGHLIGHTS
(amounts in 000’s, except share and per share amounts)

See accompanying notes to financial statements.

KAYNE ANDERSON ENERGY INFRASTRUCTURE FUND, INC.
FINANCIAL HIGHLIGHTS
(amounts in 000’s, except share and per share amounts)