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Sep 17, 2020 04:00 PM Pricing delayed 20 minutes

CorEnergy Announces Second Quarter 2020 Results, Dividends

Aug 3, 2020

KANSAS CITY, Mo.--(BUSINESS WIRE)-- CorEnergy Infrastructure Trust, Inc. ("CorEnergy" or the "Company") today announced financial results for the second quarter, ended June 30, 2020.

Second Quarter Performance Summary

Second quarter financial highlights, including the impact of the net loss from events surrounding the sale of the Pinedale Liquids Gathering System (LGS) asset, are as follows:

 

For the Three Months Ended

 

June 30, 2020

 

 

 

Per Share

 

Total

 

Basic

 

Diluted

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

$

(139,744,105

)

 

$

(10.24

)

 

$

(10.24

)

NAREIT Funds from Operations (NAREIT FFO)1

$

10,775,168

 

 

$

0.79

 

 

$

0.79

 

Funds From Operations (FFO)1

$

10,775,168

 

 

$

0.79

 

 

$

0.79

 

Adjusted Funds From Operations (AFFO)1

$

(291,172

)

 

$

(0.02

)

 

$

(0.02

)

Dividends Declared to Common Stockholders

 

 

$

0.05

 

 

 

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.

Management Commentary

"Following a challenging second quarter that included the sale of our Pinedale LGS asset, we are now endeavoring to acquire new assets by the end of the year to rebuild CorEnergy's dividend paying capabilities. These opportunities may include assets where we can leverage our Private Letter Ruling (PLR) to both own and operate infrastructure assets," said CorEnergy Chief Executive Officer Dave Schulte. "Regarding our asset portfolio, we have seen an improvement in the situation at our Grand Isle Gathering System (GIGS) asset amid rising oil prices and a restart of production by our tenant, from which we continue to seek resolution of the nonpayment of rent. Our MoGas and Omega systems are delivering steady financial performance in keeping with their status as transportation and distribution assets less subject to the impact of commodity price swings. We recently executed agreements with key MoGas shippers that will drive increased revenue beginning in the fourth quarter. Based on these developments, we declared payment of the regular preferred dividend and a common dividend of $0.05 per share for the second quarter."

Dividend Declaration

Common Stock: A second quarter 2020 dividend of $0.05 per share was declared for CorEnergy's common stock. The dividend will be paid on August 31, 2020, to stockholders of record on August 17, 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, will be paid on August 31, 2020, to stockholders of record on August 17, 2020.

Second Quarter Results Call

CorEnergy will host a conference call on Tuesday, August 4, 2020, at 1:00 p.m. Central Time to discuss its financial results. Please dial into the call at +1-201-689-8035 at least five 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 1:00 p.m. Central Time on September 4, 2020, by dialing +1-919-882-2331. The Conference ID is 58663. A webcast replay of the conference call will also be available on the Company’s website, corenergy.reit.

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 customers and operators of our assets, including triple-net participating leases and from long term customer contracts. 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 deferred rent receivable write-off, (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, non-cash costs associated with derivative instruments, and certain costs of a nonrecurring nature, less maintenance, capital expenditures (if any), income tax (expense) benefit unrelated to securities investments, 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

 

 

 

 

 

June 30,
2020

 

December 31,
2019

Assets

(Unaudited)

 

 

Leased property, net of accumulated depreciation of $4,430,269 and $105,825,816

$

67,315,379

 

 

$

379,211,399

 

Property and equipment, net of accumulated depreciation of $20,970,190 and $19,304,610

105,358,280

 

 

106,855,677

 

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

1,196,338

 

 

1,235,000

 

Cash and cash equivalents

113,713,646

 

 

120,863,643

 

Deferred rent receivable

 

 

29,858,102

 

Accounts and other receivables

2,926,765

 

 

4,143,234

 

Deferred costs, net of accumulated amortization of $1,827,781 and $1,956,710

1,380,436

 

 

2,171,969

 

Prepaid expenses and other assets

719,094

 

 

804,341

 

Deferred tax asset, net

4,295,036

 

 

4,593,561

 

Goodwill

1,718,868

 

 

1,718,868

 

Total Assets

$

298,623,842

 

 

$

651,455,794

 

Liabilities and Equity

 

 

 

Secured credit facilities, net of debt issuance costs of $0 and $158,070

$

 

 

$

33,785,930

 

Unsecured convertible senior notes, net of discount and debt issuance costs of $3,370,720 and $3,768,504

114,679,280

 

 

118,323,496

 

Asset retirement obligation

8,529,551

 

 

8,044,200

 

Accounts payable and other accrued liabilities

5,494,411

 

 

6,000,981

 

Management fees payable

1,661,651

 

 

1,669,950

 

Unearned revenue

6,283,847

 

 

6,891,798

 

Total Liabilities

$

136,648,740

 

 

$

174,716,355

 

Equity

 

 

 

Series A Cumulative Redeemable Preferred Stock 7.375%, $125,270,350 and $125,493,175 liquidation preference ($2,500 per share, $0.001 par value), 10,000,000 authorized; 50,108 and 50,197 issued and outstanding at June 30, 2020 and December 31, 2019, respectively

$

125,270,350

 

 

$

125,493,175

 

Capital stock, non-convertible, $0.001 par value; 13,651,521 and 13,638,916 shares issued and outstanding at June 30, 2020 and December 31, 2019 (100,000,000 shares authorized)

13,652

 

 

13,639

 

Additional paid-in capital

345,726,877

 

 

360,844,497

 

Retained deficit

(309,035,777

)

 

(9,611,872

)

Total Equity

161,975,102

 

 

476,739,439

 

Total Liabilities and Equity

$

298,623,842

 

 

$

651,455,794

 

Consolidated Statements of Operations (Unaudited)

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

June 30, 2020

 

June 30, 2019

 

June 30, 2020

 

June 30, 2019

Revenue

 

 

 

 

 

 

 

Lease revenue

$

5,554,368

 

 

$

16,635,876

 

 

$

21,300,872

 

 

$

33,353,586

 

Deferred rent receivable write-off

 

 

 

 

(30,105,820

)

 

 

Transportation and distribution revenue

4,382,706

 

 

4,868,144

 

 

9,583,206

 

 

9,739,726

 

Financing revenue

29,913

 

 

27,989

 

 

56,220

 

 

61,529

 

Total Revenue

9,966,987

 

 

21,532,009

 

 

834,478

 

 

43,154,841

 

Expenses

 

 

 

 

 

 

 

Transportation and distribution expenses

1,222,135

 

 

1,246,755

 

 

2,597,364

 

 

2,749,898

 

General and administrative

4,325,924

 

 

2,739,855

 

 

7,402,067

 

 

5,610,262

 

Depreciation, amortization and ARO accretion expense

3,662,926

 

 

5,645,250

 

 

9,309,993

 

 

11,290,346

 

Loss on impairment of leased property

 

 

 

 

140,268,379

 

 

 

Loss on impairment and disposal of leased property

146,537,547

 

 

 

 

146,537,547

 

 

 

Loss on termination of lease

458,297

 

 

 

 

458,297

 

 

 

Total Expenses

156,206,829

 

 

9,631,860

 

 

306,573,647

 

 

19,650,506

 

Operating Income (Loss)

$

(146,239,842

)

 

$

11,900,149

 

 

$

(305,739,169

)

 

$

23,504,335

 

Other Income (Expense)

 

 

 

 

 

 

 

Net distributions and other income

$

102,038

 

 

$

285,259

 

 

$

419,858

 

 

$

541,874

 

Interest expense

(2,920,424

)

 

(2,297,783

)

 

(5,806,007

)

 

(4,805,077

)

Gain (loss) on extinguishment of debt

11,549,968

 

 

 

 

11,549,968

 

 

(5,039,731

)

Total Other Income (Expense)

8,731,582

 

 

(2,012,524

)

 

6,163,819

 

 

(9,302,934

)

Income (Loss) before income taxes

(137,508,260

)

 

9,887,625

 

 

(299,575,350

)

 

14,201,401

 

Taxes

 

 

 

 

 

 

 

Current tax expense (benefit)

(2,431

)

 

 

 

(397,074

)

 

353,744

 

Deferred tax expense (benefit)

(71,396

)

 

62,699

 

 

298,525

 

 

156,290

 

Income tax expense (benefit), net

(73,827

)

 

62,699

 

 

(98,549

)

 

510,034

 

Net Income (Loss) attributable to CorEnergy Stockholders

(137,434,433

)

 

9,824,926

 

 

(299,476,801

)

 

13,691,367

 

Preferred dividend requirements

2,309,672

 

 

2,313,780

 

 

4,570,465

 

 

4,627,908

 

Net Income (Loss) attributable to Common Stockholders

$

(139,744,105

)

 

$

7,511,146

 

 

$

(304,047,266

)

 

$

9,063,459

 

 

 

 

 

 

 

 

 

Earnings (Loss) Per Common Share:

 

 

 

 

 

 

 

Basic

$

(10.24

)

 

$

0.59

 

 

$

(22.27

)

 

$

0.71

 

Diluted

$

(10.24

)

 

$

0.59

 

 

$

(22.27

)

 

$

0.71

 

Weighted Average Shares of Common Stock Outstanding:

 

 

 

 

 

 

 

Basic

13,651,521

 

 

12,811,171

 

 

13,649,907

 

 

12,708,626

 

Diluted

13,651,521

 

 

12,811,171

 

 

13,649,907

 

 

12,708,626

 

Dividends declared per share

$

0.050

 

 

$

0.750

 

 

$

0.800

 

 

$

1.500

 

Consolidated Statements of Cash Flows (Unaudited)

 

 

 

 

 

For the Six Months Ended

 

June 30, 2020

 

June 30, 2019

Operating Activities

 

 

 

Net income (loss)

$

(299,476,801

)

 

$

13,691,367

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Deferred income tax, net

298,525

 

 

156,290

 

Depreciation, amortization and ARO accretion

9,963,908

 

 

11,870,408

 

Loss on impairment of leased property

140,268,379

 

 

 

Loss on impairment and disposal of leased property

146,537,547

 

 

 

Loss on termination of lease

458,297

 

 

 

Deferred rent receivable write-off, noncash

30,105,820

 

 

 

(Gain) loss on extinguishment of debt

(11,549,968

)

 

5,039,731

 

Gain on disposal of equipment

(3,542

)

 

 

Changes in assets and liabilities:

 

 

 

Increase in deferred rent receivable

(247,718

)

 

(3,163,726

)

Decrease in accounts and other receivables

1,216,469

 

 

550,126

 

Increase in financing note accrued interest receivable

(4,671

)

 

(9,217

)

(Increase) decrease in prepaid expenses and other assets

85,197

 

 

(196,684

)

Decrease in management fee payable

(8,299

)

 

(65,749

)

Increase (decrease) in accounts payable and other accrued liabilities

(613,391

)

 

1,541,221

 

Decrease in unearned revenue

(607,951

)

 

(98,244

)

Net cash provided by operating activities

$

16,421,801

 

 

$

29,315,523

 

Investing Activities

 

 

 

Purchases of property and equipment, net

(85,144

)

 

(26,553

)

Proceeds from sale of property and equipment

7,500

 

 

 

Principal payment on note receivable

 

 

5,000,000

 

Principal payment on financing note receivable

43,333

 

 

 

Net cash provided by (used in) investing activities

$

(34,311

)

 

$

4,973,447

 

Financing Activities

 

 

 

Repurchases of preferred stock

(161,997

)

 

(60,550

)

Dividends paid on Series A preferred stock

(4,623,452

)

 

(4,627,560

)

Dividends paid on common stock

(10,921,216

)

 

(18,800,372

)

Cash paid for extinguishment of convertible notes

(1,316,250

)

 

(19,516,234

)

Cash paid for maturity of convertible notes

(1,676,000

)

 

 

Cash paid for settlement of Pinedale Secured Credit Facility

(3,074,572

)

 

 

Principal payments on secured credit facilities

(1,764,000

)

 

(1,764,000

)

Net cash used in financing activities

$

(23,537,487

)

 

$

(44,768,716

)

Net Change in Cash and Cash Equivalents

$

(7,149,997

)

 

$

(10,479,746

)

Cash and Cash Equivalents at beginning of period

120,863,643

 

 

69,287,177

 

Cash and Cash Equivalents at end of period

$

113,713,646

 

 

$

58,807,431

 

 

 

 

 

Supplemental Disclosure of Cash Flow Information

 

 

 

Interest paid

$

5,392,894

 

 

$

4,361,760

 

Income taxes paid (net of refunds)

(466,407

)

 

282,786

 

 

 

 

 

Non-Cash Investing Activities

 

 

 

Proceeds from sale of leased property provided directly to secured lender

$

18,000,000

 

 

$

 

Purchases of property, plant and equipment in accounts payable and other accrued liabilities

110,000

 

 

 

 

 

 

 

Non-Cash Financing Activities

 

 

 

Reinvestment of distributions by common stockholders in additional common shares

$

 

 

$

403,831

 

Common stock issued upon exchange and conversion of convertible notes

419,129

 

 

29,457,711

 

Proceeds from sale of leased property used in settlement of Pinedale Secured Credit Facility

(18,000,000

)

 

 

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

 

For the Three Months Ended

 

For the Six Months Ended

 

June 30, 2020

 

June 30, 2019

 

June 30, 2020

 

June 30, 2019

Net Income (loss) attributable to CorEnergy Stockholders

$

(137,434,433

)

 

$

9,824,926

 

 

$

(299,476,801

)

 

$

13,691,367

 

Less:

 

 

 

 

 

 

 

Preferred Dividend Requirements

2,309,672

 

 

2,313,780

 

 

4,570,465

 

 

4,627,908

 

Net Income (loss) attributable to Common Stockholders

$

(139,744,105

)

 

$

7,511,146

 

 

$

(304,047,266

)

 

$

9,063,459

 

Add:

 

 

 

 

 

 

 

Depreciation

3,523,429

 

 

5,511,274

 

 

9,035,342

 

 

11,022,395

 

Loss on impairment of leased property

 

 

 

 

140,268,379

 

 

 

Loss on impairment and disposal of leased property

146,537,547

 

 

 

 

146,537,547

 

 

 

Loss on termination of lease

458,297

 

 

 

 

458,297

 

 

 

NAREIT funds from operations (NAREIT FFO)

$

10,775,168

 

 

$

13,022,420

 

 

$

(7,747,701

)

 

$

20,085,854

 

Less:

 

 

 

 

 

 

 

Income tax (expense) benefit from investment securities

 

 

(6,912

)

 

149,585

 

 

(158,705

)

Funds from operations adjusted for securities investments (FFO)

$

10,775,168

 

 

$

13,029,332

 

 

$

(7,897,286

)

 

$

20,244,559

 

Add:

 

 

 

 

 

 

 

Deferred rent receivable write-off

 

 

 

 

30,105,820

 

 

 

(Gain) loss on extinguishment of debt

(11,549,968

)

 

 

 

(11,549,968

)

 

5,039,731

 

Transaction costs

92,293

 

 

88,611

 

 

198,990

 

 

142,581

 

Amortization of debt issuance costs

325,665

 

 

281,630

 

 

653,914

 

 

580,062

 

Amortization of deferred lease costs

22,983

 

 

22,983

 

 

45,966

 

 

45,966

 

Accretion of asset retirement obligation

116,514

 

 

110,993

 

 

228,685

 

 

221,985

 

Income tax expense (benefit)

(73,827

)

 

55,787

 

 

51,036

 

 

351,329

 

Adjusted funds from operations (AFFO)

$

(291,172

)

 

$

13,589,336

 

 

$

11,837,157

 

 

$

26,626,213

 

 

 

 

 

 

 

 

 

Weighted Average Shares of Common Stock Outstanding:

 

 

 

 

 

 

 

Basic

13,651,521

 

 

12,811,171

 

 

13,649,907

 

 

12,708,626

 

Diluted

13,651,521

 

 

14,934,886

 

 

13,649,907

 

 

14,988,429

 

NAREIT FFO attributable to Common Stockholders

 

 

 

 

 

 

 

Basic

$

0.79

 

 

$

1.02

 

 

$

(0.57

)

 

$

1.58

 

Diluted (1)

$

0.79

 

 

$

0.96

 

 

$

(0.57

)

 

$

1.53

 

FFO attributable to Common Stockholders

 

 

 

 

 

 

 

Basic

$

0.79

 

 

$

1.02

 

 

$

(0.58

)

 

$

1.59

 

Diluted (1)

$

0.79

 

 

$

0.96

 

 

$

(0.58

)

 

$

1.54

 

AFFO attributable to Common Stockholders

 

 

 

 

 

 

 

Basic

$

(0.02

)

 

$

1.06

 

 

$

0.87

 

 

$

2.10

 

Diluted (2)

$

(0.02

)

 

$

0.99

 

 

$

0.87

 

 

$

1.95

 

(1)

 

For the three and six months ended June 30, 2019, diluted per share calculations include dilutive adjustments for convertible note interest expense, discount amortization and deferred debt issuance amortization.

(2)

 

For the three and six months ended June 30, 2019, diluted per share calculations include a dilutive adjustment for convertible note interest expense.

Source: CorEnergy Infrastructure Trust, Inc.

CorEnergy Infrastructure Trust, Inc.
Investor Relations
Debbie Hagen or Matt Kreps
877-699-CORR (2677)
info@corenergy.reit

Source: CorEnergy Infrastructure Trust, Inc.