CorEnergy Announces Fourth Quarter 2019 and Full Year Results

KANSAS CITY, Mo.–(BUSINESS WIRE)–CorEnergy Infrastructure Trust, Inc. (“CorEnergy” or the “Company”) today announced financial results for the fourth quarter 2019 and fiscal year ended December 31, 2019.

Fourth Quarter and Fiscal Year 2019 Performance Summary

Fourth Quarter and Fiscal Year 2019 financial highlights are as follows:

 

For the Three Months Ended

 

For the Year Ended

 

December 31, 2019

 

December 31, 2019

 

 

 

Per Share

 

 

 

Per Share

 

Total

 

Basic

 

Diluted

 

Total

 

Basic

 

Diluted

Net Income (Loss) (Attributable to Common Stockholders)1

$

7,493,948

 

 

$

0.55

 

 

$

0.55

 

 

$

(5,175,973

)

 

$

(0.40

)

 

$

(0.40

)

NAREIT Funds from Operations (NAREIT FFO)1

$

13,006,227

 

 

$

0.96

 

 

$

0.93

 

 

$

16,870,068

 

 

$

1.29

 

 

$

1.29

 

Funds From Operations (FFO)1

$

12,789,733

 

 

$

0.94

 

 

$

0.92

 

 

$

16,857,484

 

 

$

1.29

 

 

$

1.29

 

Adjusted Funds From Operations (AFFO)1

$

13,318,662

 

 

$

0.98

 

 

$

0.94

 

 

$

53,012,786

 

 

$

4.06

 

 

$

3.83

 

Dividends Declared to Common Stockholders

 

 

$

0.75

 

 

 

 

 

 

$

3.00

 

 

 

1 Management uses AFFO as a measure of long-term sustainable operational performance. NAREIT FFO, FFO, and AFFO are non-GAAP measures. Reconciliations of NAREIT FFO, FFO and AFFO, as presented, to Net Income (Loss) Attributable to CorEnergy Stockholders are included at the end of this press release. See Note 1 for additional information.

Recent Developments

  • Maintained dividend: Declared common stock dividend of $0.75 per share ($3.00 annualized) for the fourth quarter 2019, in line with the previous 17 quarterly dividends

“We took steps throughout 2019 to enhance our liquidity and reduce our weighted average cost of capital, which also had the effect of lowering our interest cost and increasing interest income,” said CorEnergy Chief Executive Officer Dave Schulte. “These actions better position us for potential growth transactions, even as producers are finding fewer financing options in the traditional capital markets. We are presently evaluating prospective assets as companies across the energy sector are increasingly turning to alternative financing sources.”

Dividend Declaration

Common Stock: A fourth quarter 2019 dividend of $0.75 per share (or $3.00 per share annualized) was declared for CorEnergy’s common stock. The dividend is payable on February 28, 2020, to stockholders of record on February 14, 2020.

Preferred Stock: For the Company’s 7.375% Series A Cumulative Redeemable Preferred Stock, a cash dividend of $0.4609375 per depositary share was declared. The preferred stock dividend, which equates to an annual dividend payment of $1.84375 per depositary share, is payable on February 28, 2020, to stockholders of record on February 14, 2020.

Fiscal Year 2019 Earnings Conference Call

CorEnergy will host a conference call on Thursday, February 27, 2020, at 9:00 a.m. Central Time to discuss its financial results. Please dial into the call at 877-407-8035 (for international, 1-201-689-8035) approximately five to ten minutes prior to the scheduled start time. The call will also be webcast in a listen-only format. A link to the webcast will be accessible at corenergy.reit.

A replay of the call will be available until 9:00 a.m. Central Time on March 27, 2020 by dialing 877-481-4010 (for international, 1-919-882-2331). The Conference ID is 58659. A replay of the conference call will also be available on the Company’s website.

About CorEnergy Infrastructure Trust, Inc.

CorEnergy Infrastructure Trust, Inc. (NYSE: CORR, CORRPrA), is a real estate investment trust (REIT) that owns critical energy assets, such as pipelines, storage terminals, and transmission and distribution assets. We receive long-term contracted revenue from operators of our assets, primarily under triple-net participating leases. For more information, please visit corenergy.reit.

Forward-Looking Statements

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 CorEnergy believes 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 CorEnergy’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, CorEnergy does not assume a duty to update any forward-looking statement. In particular, any distribution paid in the future to our stockholders will depend on the actual performance of CorEnergy, its costs of leverage and other operating expenses and will be subject to the approval of CorEnergy’s Board of Directors and compliance with leverage covenants.

Notes

1NAREIT FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, impairment losses of depreciable properties, real estate-related depreciation and amortization (excluding amortization of deferred financing costs or loan origination costs) and other adjustments for unconsolidated partnerships and non-controlling interests. Adjustments for non-controlling interests are calculated on the same basis. FFO as we have presented it here, is derived by further adjusting NAREIT FFO for distributions received from investment securities, income tax expense (benefit) from investment securities, net distributions and other income and net realized and unrealized gain or loss on other equity securities. CorEnergy defines AFFO as FFO Adjusted for Securities Investment plus (gain) loss on extinguishment of debt, provision for loan (gain) loss, net of tax, transaction costs, amortization of debt issuance costs, amortization of deferred lease costs, accretion of asset retirement obligation, amortization of above market leases, income tax expense (benefit) unrelated to securities investments, non-cash costs associated with derivative instruments, (gain) loss on the settlement of ARO, and certain costs of a nonrecurring nature, less maintenance, capital expenditures (if any), amortization of debt premium, and other adjustments as deemed appropriate by Management. Reconciliations of NAREIT FFO, FFO Adjusted for Securities Investments and AFFO to Net Income (Loss) Attributable to CorEnergy Stockholders are included in the additional financial information attached to this press release.

Consolidated Balance Sheets

 

 

 

 

 

December 31, 2019

 

December 31, 2018

Assets

 

 

 

Leased property, net of accumulated depreciation of $105,825,816 and $87,154,095

$

379,211,399

 

 

$

398,214,355

 

Property and equipment, net of accumulated depreciation of $19,304,610 and $15,969,346

106,855,677

 

 

109,881,552

 

Financing notes and related accrued interest receivable, net of reserve of $600,000 and $600,000

1,235,000

 

 

1,300,000

 

Note receivable

 

 

5,000,000

 

Cash and cash equivalents

120,863,643

 

 

69,287,177

 

Deferred rent receivable

29,858,102

 

 

25,942,755

 

Accounts and other receivables

4,143,234

 

 

5,083,243

 

Deferred costs, net of accumulated amortization of $1,956,710 and $1,290,236

2,171,969

 

 

2,838,443

 

Prepaid expenses and other assets

804,341

 

 

668,584

 

Deferred tax asset, net

4,593,561

 

 

4,948,203

 

Goodwill

1,718,868

 

 

1,718,868

 

Total Assets

$

651,455,794

 

 

$

624,883,180

 

Liabilities and Equity

 

 

 

Secured credit facilities, net of debt issuance costs of $158,070 and $210,891

33,785,930

 

 

37,261,109

 

Unsecured convertible senior notes, net of discount and debt issuance costs of $3,768,504 and $1,180,729

118,323,496

 

 

112,777,271

 

Asset retirement obligation

8,044,200

 

 

7,956,343

 

Accounts payable and other accrued liabilities

6,000,981

 

 

3,493,490

 

Management fees payable

1,669,950

 

 

1,831,613

 

Unearned revenue

6,891,798

 

 

6,552,049

 

Total Liabilities

$

174,716,355

 

 

$

169,871,875

 

Equity

 

 

 

Series A Cumulative Redeemable Preferred Stock 7.375%, $125,493,175 and $125,555,675 liquidation preference ($2,500 per share, $0.001 par value), 10,000,000 authorized; 50,197 and 50,222 issued and outstanding at December 31, 2019 and December 31, 2018, respectively

$

125,493,175

 

 

$

125,555,675

 

Capital stock, non-convertible, $0.001 par value; 13,638,916 and 11,960,225 shares issued and outstanding at December 31, 2019 and December 31, 2018 (100,000,000 shares authorized)

13,639

 

 

11,960

 

Additional paid-in capital

360,844,497

 

 

320,295,969

 

Retained earnings (deficit)

(9,611,872

)

 

9,147,701

 

Total Equity

476,739,439

 

 

455,011,305

 

Total Liabilities and Equity

$

651,455,794

 

 

$

624,883,180

 

Consolidated Statements of Income and Comprehensive Income

 

(Unaudited)

 

 

 

 

 

For the Three Months Ended December 31,

 

For the Years Ended December 31,

 

2019

 

2018

 

2019

 

2018

Revenue

 

 

 

 

 

 

 

Lease revenue

$

16,712,017

 

 

$

18,487,661

 

 

$

67,050,506

 

 

$

72,747,362

 

Transportation and distribution revenue

4,970,173

 

 

4,412,378

 

 

18,778,237

 

 

16,484,236

 

Financing revenue

27,295

 

 

 

 

116,827

 

 

 

Total Revenue

21,709,485

 

 

22,900,039

 

 

85,945,570

 

 

89,231,598

 

Expenses

 

 

 

 

 

 

 

Transportation and distribution expenses

1,376,152

 

 

1,861,329

 

 

5,242,244

 

 

7,210,748

 

General and administrative

2,492,346

 

 

4,161,533

 

 

10,596,848

 

 

13,042,847

 

Depreciation, amortization and ARO accretion expense

5,646,254

 

 

6,078,582

 

 

22,581,942

 

 

24,947,453

 

Provision for loan gain

 

 

(536,867

)

 

 

 

(36,867

)

Total Expenses

9,514,752

 

 

11,564,577

 

 

38,421,034

 

 

45,164,181

 

Operating Income

$

12,194,733

 

 

$

11,335,462

 

 

$

47,524,536

 

 

$

44,067,417

 

Other Income (Expense)

 

 

 

 

 

 

 

Net distributions and other income

$

426,797

 

 

$

41,503

 

 

$

1,328,853

 

 

$

106,795

 

Net realized and unrealized loss on other equity securities

 

 

(48,028

)

 

 

 

(1,845,309

)

Interest expense

(2,996,512

)

 

(3,168,583

)

 

(10,578,711

)

 

(12,759,010

)

Gain on the sale of leased property, net

 

 

11,723,257

 

 

 

 

11,723,257

 

Loss on extinguishment of debt

 

 

 

 

(33,960,565

)

 

 

Total Other Income (Expense)

(2,569,715

)

 

8,548,149

 

 

(43,210,423

)

 

(2,774,267

)

Income before income taxes

9,625,018

 

 

19,883,611

 

 

4,314,113

 

 

41,293,150

 

Taxes

 

 

 

 

 

 

 

Current tax benefit

(472,498

)

 

(530,659

)

 

(120,024

)

 

(585,386

)

Deferred tax expense (benefit)

289,788

 

 

(81,725

)

 

354,642

 

 

(1,833,340

)

Income tax expense (benefit), net

(182,710

)

 

(612,384

)

 

234,618

 

 

(2,418,726

)

Net Income attributable to CorEnergy Stockholders

$

9,807,728

 

 

$

20,495,995

 

 

$

4,079,495

 

 

$

43,711,876

 

Preferred dividend requirements

2,313,780

 

 

2,357,752

 

 

9,255,468

 

 

9,548,377

 

Net Income (Loss) attributable to Common Stockholders

$

7,493,948

 

 

$

18,138,243

 

 

$

(5,175,973

)

 

$

34,163,499

 

 

 

 

 

 

 

 

 

Earnings (Loss) Per Common Share:

 

 

 

 

 

 

 

Basic

$

0.55

 

 

$

1.52

 

 

$

(0.40

)

 

$

2.86

 

Diluted

$

0.55

 

 

$

1.32

 

 

$

(0.40

)

 

$

2.79

 

Weighted Average Shares of Common Stock Outstanding:

 

 

 

 

 

 

 

Basic

13,549,797

 

 

11,953,098

 

 

13,041,613

 

 

11,935,021

 

Diluted

13,549,797

 

 

15,406,371

 

 

13,041,613

 

 

15,389,180

 

Dividends declared per share

$

0.750

 

 

$

0.750

 

 

$

3.000

 

 

$

3.000

 

Consolidated Statements of Cash Flow

 

For the Years Ended December 31,

 

2019

 

2018

Operating Activities

 

 

 

Net Income

$

4,079,495

 

 

$

43,711,876

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Deferred income tax, net

354,642

 

 

(1,845,710

)

Depreciation, amortization and ARO accretion

23,808,083

 

 

26,361,907

 

Gain on sale of leased property, net

 

 

(11,723,257

)

Provision for loan gain

 

 

(36,867

)

Loss on extinguishment of debt

33,960,565

 

 

 

Gain on sale of equipment

(7,390

)

 

(8,416

)

Net realized and unrealized loss on other equity securities

 

 

1,845,309

 

Loss on settlement of asset retirement obligation

 

 

310,941

 

Common stock issued under directors’ compensation plan

 

 

67,500

 

Changes in assets and liabilities:

 

 

 

Increase in deferred rent receivables

(3,915,347

)

 

(7,038,848

)

(Increase) decrease in accounts and other receivables

940,009

 

 

(1,297,207

)

(Increase) decrease in prepaid expenses and other assets

(136,108

)

 

73,505

 

Increase (decrease) in management fee payable

(161,663

)

 

83,187

 

Increase in accounts payable and other accrued liabilities

2,517,069

 

 

476,223

 

Decrease in income tax liability

 

 

(2,204,626

)

Increase (decrease) in unearned revenue

339,749

 

 

(152,777

)

Net cash provided by operating activities

$

61,779,104

 

 

$

48,622,740

 

Investing Activities

 

 

 

Proceeds from the sale of leased property

 

 

55,553,975

 

Proceeds from sale of other equity securities

 

 

449,067

 

Purchases of property and equipment, net

(372,934

)

 

(105,357

)

Proceeds from asset sale

7,000

 

 

17,999

 

Principal payment on financing note receivable

65,000

 

 

236,867

 

Principal payment on note receivable

5,000,000

 

 

 

Return of capital on distributions received

 

 

663,939

 

Net cash provided by investing activities

$

4,699,066

 

 

$

56,816,490

 

Financing Activities

 

 

 

Debt financing costs

(372,759

)

 

(264,010

)

Cash paid for extinguishment of convertible notes

(78,939,743

)

 

 

Net offering proceeds on convertible debt

116,355,125

 

 

 

Repurchases of Series A preferred stock

(60,550

)

 

(4,275,553

)

Dividends paid on Series A preferred stock

(9,255,121

)

 

(9,587,500

)

Dividends paid on common stock

(39,100,656

)

 

(34,284,059

)

Principal payments on secured credit facilities

(3,528,000

)

 

(3,528,000

)

Net cash used in financing activities

$

(14,901,704

)

 

$

(51,939,122

)

Net Change in Cash and Cash Equivalents

$

51,576,466

 

 

$

53,500,108

 

Cash and Cash Equivalents at beginning of period

69,287,177

 

 

15,787,069

 

Cash and Cash Equivalents at end of period

$

120,863,643

 

 

$

69,287,177

 

 

 

 

 

Supplemental Disclosure of Cash Flow Information

 

 

 

Interest paid

$

6,834,439

 

 

$

11,200,835

 

Income taxes paid (net of refunds)

89,433

 

 

2,136,563

 

 

 

 

 

Non-Cash Investing Activities

 

 

 

Note receivable in consideration of the sale of leased property

$

 

 

$

5,000,000

 

Non-Cash Financing Activities

 

 

 

Change in accounts payable and accrued expenses related to debt financing costs

$

 

 

$

(255,037

)

Reinvestment of distributions by common stockholders in additional common shares

403,831

 

 

1,509,830

 

Common stock issued upon exchange and conversion of convertible notes

66,064,966

 

 

42,654

 

NAREIT FFO, FFO Adjusted for Securities Investment and AFFO Reconciliation (Unaudited)

 

For the Three Months Ended December 31,

 

For the Years Ended December 31,

 

2019

 

2018

 

2019

 

2018

Net Income attributable to CorEnergy Stockholders

$

9,807,728

 

 

$

20,495,995

 

 

$

4,079,495

 

 

$

43,711,876

 

Less:

 

 

 

 

 

 

 

Preferred Dividend Requirements

2,313,780

 

 

2,357,752

 

 

9,255,468

 

 

9,548,377

 

Net Income (Loss) attributable to Common Stockholders

$

7,493,948

 

 

$

18,138,243

 

 

$

(5,175,973

)

 

$

34,163,499

 

Add:

 

 

 

 

 

 

 

Depreciation

5,512,279

 

 

5,939,821

 

 

22,046,041

 

 

24,355,959

 

Less:

 

 

 

 

 

 

 

Gain on the sale of leased property, net

 

 

11,723,257

 

 

 

 

11,723,257

 

NAREIT funds from operations (NAREIT FFO)

$

13,006,227

 

 

$

12,354,807

 

 

$

16,870,068

 

 

$

46,796,201

 

Add:

 

 

 

 

 

 

 

Distributions received from investment securities

426,797

 

 

41,503

 

 

1,328,853

 

 

106,795

 

Net realized and unrealized loss on other equity securities

 

 

48,028

 

 

 

 

1,845,309

 

Less:

 

 

 

 

 

 

 

Net distributions and other income

426,797

 

 

41,503

 

 

1,328,853

 

 

106,795

 

Income tax benefit from investment securities

216,494

 

 

190,792

 

 

12,584

 

 

682,199

 

Funds from operations adjusted for securities investments (FFO)

$

12,789,733

 

 

$

12,212,043

 

 

$

16,857,484

 

 

$

47,959,311

 

Add:

 

 

 

 

 

 

 

Loss of extinguishment of debt

 

 

 

 

33,960,565

 

 

 

Transaction costs

28,115

 

 

397,520

 

 

185,495

 

 

521,311

 

Amortization of debt issuance costs

333,055

 

 

353,637

 

 

1,226,139

 

 

1,414,457

 

Amortization of deferred lease costs

22,983

 

 

22,983

 

 

91,932

 

 

91,932

 

Accretion of asset retirement obligation

110,992

 

 

115,778

 

 

443,969

 

 

499,562

 

Loss on settlement of ARO

 

 

310,941

 

 

 

 

310,941

 

Less:

 

 

 

 

 

 

 

Income tax (expense) benefit

(33,784

)

 

421,592

 

 

(247,202

)

 

1,736,527

 

Provision for loan gain

 

 

536,867

 

 

 

 

36,867

 

Adjusted funds from operations (AFFO)

$

13,318,662

 

 

$

12,454,443

 

 

$

53,012,786

 

 

$

49,024,120

 

 

 

 

 

 

 

 

 

Weighted Average Shares of Common Stock Outstanding:

 

 

 

 

 

 

 

Basic

13,549,797

 

 

11,953,098

 

 

13,041,613

 

 

11,935,021

 

Diluted

16,102,310

 

 

15,406,371

 

 

15,425,747

 

 

15,389,180

 

NAREIT FFO attributable to Common Stockholders

 

 

 

 

 

 

 

Basic

$

0.96

 

 

$

1.03

 

 

$

1.29

 

 

$

3.92

 

Diluted (1)

$

0.93

 

 

$

0.94

 

 

$

1.29

 

 

$

3.61

 

FFO attributable to Common Stockholders

 

 

 

 

 

 

 

Basic

$

0.94

 

 

$

1.02

 

 

$

1.29

 

 

$

4.02

 

Diluted (1)

$

0.92

 

 

$

0.93

 

 

$

1.29

 

 

$

3.69

 

AFFO attributable to Common Stockholders

 

 

 

 

 

 

 

Basic

$

0.98

 

 

$

1.04

 

 

$

4.06

 

 

$

4.11

 

Diluted (2)

$

0.94

 

 

$

0.94

 

 

$

3.83

 

 

$

3.70

 

(1)

 

The year ended December 31, 2019 diluted per share calculations exclude dilutive adjustments for convertible note interest expense, discount amortization and deferred debt issuance amortization because such impact is antidilutive. The three months ended December 31, 2019 and 2018, as well as the year ended December 31, 2018, include these dilutive adjustments. For periods presented without per share dilution, the number of weighted average diluted shares is equal to the number of weighted average basic shares presented.

(2)  

Diluted per share calculations include a dilutive adjustment for convertible note interest expense.

 Source: CorEnergy Infrastructure Trust, Inc.

Contacts

CorEnergy Infrastructure Trust, Inc.

Investor Relations

Debbie Hagen or Matt Kreps

877-699-CORR (2677)

[email protected]

error: Content is protected !!