Exhibit 99.1
 
     
  

­CorEnergy Releases Third Quarter 2013 Financial Results

FOR IMMEDIATE RELEASE

LEAWOOD, Kan. – November 12, 2013 – CorEnergy Infrastructure Trust, Inc. (NYSE: CORR) (“the Company”) today announced financial results for the third quarter ended September 30, 2013.

Third Quarter Highlights and Subsequent Events
 
 
 
-
Declared third quarter dividend of $0.125 per share, paid on October 4, 2013
 
-
Reiterated expectation for annualized dividend payments of no less than $0.50 per share
 
-
Successful IPO from legacy private company, Lightfoot’s Arc Logistics Partners LP (NYSE: ARCX)
 
-
Maintained stable revenue stream from the Pinedale LGS for third consecutive quarter
 
-
Continued to meet asset requirements for Real Estate Investment Trust (REIT) status
­­­­
Quarterly Performance Review

CorEnergy reported total revenues of $7.6 million in the quarter ended September 30, 2013. A third quarter dividend of $0.125 was declared on September 18, 2013 and paid on October 4, 2013. Total assets were $284.4 million and total stockholders’ equity was $204.2 million as of September 30, 2013, compared to $288.7 million and $207.5 million, respectively, at June 30, 2013. The modest decrease in total assets is primarily due to the second quarter dividend payment made in July. The decrease in stockholders’ equity is primarily due to the timing of the third quarter dividend payment. Net income attributable to common stockholders was $439 thousand, or $0.02 per common share.

“CorEnergy delivered another quarter of consistent performance across our business – stable revenues, sustained dividend distributions and strong operating fundamentals,” said David Schulte, Chief Executive Officer of CorEnergy. “As our strategy takes hold, we continue to make progress with asset operators and other potential partners. With a large and growing opportunity set, a disciplined investment philosophy and a cohesive management team, we remain focused on our strategy of building a diverse portfolio of energy infrastructure assets.”

Because a majority of the company’s assets are now REIT-qualifying, management believes that non-GAAP performance measures utilized by REITs, including Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”), also provide useful insights into CorEnergy’s operational performance.



 
 
Third Quarter Ended September 30, 2013 Financial Summary
 
For the Three Month Period Ended September 30, 2013
   Total     Per Share
Net Income (attributable to CorEnergy Stockholders)   $   439,452   $0.020
Funds From Operations (FFO)   $3,062,274   $0.130
Adjusted Funds From Operations (AFFO)  $3,336,584   $0.140
Dividends Paid to Stockholders (on October 4, 2013)  $3,018,990   $0.125
 

FFO and AFFO are non-GAAP measures presented in accordance with the guidelines for calculation and reporting issued by the National Association of Real Estate Investment Trusts. FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, real estate-related depreciation and amortization (excluding amortization of deferred financing costs or loan origination costs) and after adjustments for unconsolidated partnerships and joint ventures. The Company considers FFO an important supplemental measure of operating performance that is frequently used by securities analysts, investors and other interested parties. CorEnergy defines AFFO as FFO plus transaction costs, amortization of debt issuance costs, deferred leasing costs, above market rent, and certain costs of a nonrecurring nature, less maintenance, capital expenditures (if any), amortization of debt premium and adjustments to lease revenue resulting from the EIP sale. Management uses AFFO as a measure of long-term
 
 
 
4200 W. 115th Street Suite 210 Leawood, KS  66211/Main:  913-387-2790/ Fax: 913-387-2791/corridortrust.com
 
 
 

sustainable operational performance.

Real Property Assets and Leases

Pinedale Liquids Gathering System (“LGS”), Oil & Gas Gathering System, Wyoming
The Pinedale LGS, our largest acquisition of REIT-qualifying assets to date, is subject to a 15-year triple net participating lease with Ultra Petroleum (“UPL”). CorEnergy holds 81.05 percent of the economic interest in the Pinedale LGS. Prudential Financial, Inc., which invested $30 million to fund a portion of the acquisition, holds the remaining 18.95 percent of economic interest.

As of September 30, 2013, approximately 94 percent of the Company's leased property, based on the gross book value of real estate investments, was leased to UPL. Approximately 88.7 percent of the Company's total lease revenue for the third quarter of 2013 was derived from UPL.

On October 21, 2013, Ultra Petroleum entered into a definitive purchase and sale agreement to acquire oil-producing properties located in the Uinta Basin in northeast Utah for $650.0 million. During its third quarter earnings call UPL indicated the potential to operate 2.5-4 rigs in 2014.

Eastern Interconnect Project, Electric Transmission, New Mexico
The Company's 40 percent undivided interest in a 216-mile power transmission line that moves electric power across New Mexico between Albuquerque and Clovis, called the Eastern Interconnect Project (“EIP”), is leased to Public Service Company of New Mexico (“PNM”) under a net operating lease.

Approximately 11.3 percent of the Company's total lease revenue for the third quarter of 2013 was derived from PNM. As of September 30, 2013, approximately 5.8 percent of the Company's leased property, based on the gross book value of real estate investments, was leased to PNM.

Private Company Update

The fair value of Lightfoot Capital Partners LP (“Lightfoot”) as of September 30, 2013, decreased approximately $27 thousand or 0.3 percent, as compared to the valuation at June 30, 2013, primarily due to market value changes in the MLP comparable companies.

On November 5, 2013, Arc Logistics Partners LP (“Arc Logistics”), formed as a successor to the business and assets of Lightfoot’s Arc Terminals LP, priced its initial public offering. CorEnergy will maintain its pro rata share of ownership in Lightfoot and its indirect ownership of Arc Logistics in the form of common units and subordinated common units. CorEnergy expects to receive dividend distributions from Lightfoot beginning in 2014.

The fair value of VantaCore as of September 30, 2013, increased $956 thousand, or 8.2 percent, as compared to the fair value at June 30, 2013. The increase is attributable to a debt repayment of approximately $3 million and changes in VantaCore’s EBITDA which compared more favorably with selected public companies, increasing the multiples used to value VantaCore.

Mowood, LLC is the holding company of Omega Pipeline Company, LLC (“Omega”). Omega’s sales revenue is higher year-to-date, which is largely attributable to an increase in sales volume due to overall cooler temperatures for the first half of 2013 as compared to the first half of 2012. Due to the seasonal nature of gas sales, operating results for interim periods are not necessarily indicative of the results that may be expected for the full year.

REIT Qualification

CorEnergy satisfied the quarterly REIT asset test for the quarter ended September 30, 2013, and anticipates that it will satisfy the quarterly asset tests and annual income test necessary to qualify and elect to be taxed as a REIT for 2013. Because certain CorEnergy assets do not qualify as REIT assets and do not produce REIT-qualifying income, the Company contributed those assets into wholly-owned taxable REIT subsidiaries prior to 2013.

Outlook

CorEnergy expects its major energy infrastructure assets, the Pinedale LGS and the Eastern Interconnect Project, to produce stable and recurring revenues for the remainder of 2013. The Company believes that the cash flows from its holdings will continue to support the 2013 annualized dividend payments of no less than $0.50 per share. A number of possible acquisitions ranging in value from $50 to $200 million are in preliminary stages of review.
 
 
 
 
 

There can be no assurance that any of these acquisition opportunities will result in consummated transactions. The Company has a $20 million revolving credit facility in place, which can be utilized for future acquisitions. As of September 30, 2013, there were no outstanding borrowings against the facility.

2013 Third Quarter Earnings Conference Call

CorEnergy will host a conference call Wednesday, November 13, 2013, at 1:00 p.m. CST to discuss its financial results. Please dial into the call at 877-407-8035 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.corridortrust.com.

A replay of the call will be available until 11:59 p.m. CST December 13, 2013, by dialing 877-660-6853. The Conference ID # is 13572660. A replay of the webcast will also be available on the company’s website at corenergy.corridortrust.com through November 13, 2014.

About CorEnergy Infrastructure Trust, Inc.
CorEnergy Infrastructure Trust, Inc. (NYSE: CORR), primarily owns midstream and downstream U.S. energy infrastructure assets subject to long-term triple net participating leases with energy companies. These assets include pipelines, storage tanks, transmission lines and gathering systems. The Company’s principal objective is to provide stockholders with an attractive risk-adjusted total return, with an emphasis on distributions and long-term distribution. CorEnergy is managed by Corridor InfraTrust Management, LLC, a real property asset manager focused on U.S. energy infrastructure real assets, and is an affiliate of Tortoise Capital Advisors, L.L.C., an investment manager specializing in listed energy investments, with approximately $13.1 billion of assets under management in NYSE-listed closed-end investment companies, open-end funds and other accounts as of September 30, 2013. For more information, please visit corenergy.corridortrust.com.
 
 
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.

Contact Information:
Katheryn Mueller, Investor Relations, 877-699-CORR (2677), info@corridortrust.com
 
 

 
 
 

 


CorEnergy Infrastructure Trust, Inc.
CONSOLIDATED BALANCE SHEETS
 
   
September 30, 2013
    
November 30, 2012
  
Assets
  
(Unaudited)
        
    Leased property, net of accumulated depreciation of $9,967,558, and $1,131,680, respectively
   $ 234,763,415     $ 12,995,169  
    Other equity securities, at fair value
     22,168,268       19,866,621  
    Cash and cash equivalents
     18,918,718       14,333,456  
    Trading securities, at fair value
     -       55,219,411  
    Property and equipment, net of accumulated depreciation of $1,966,766 and $1,751,202, respectively
     3,389,401       3,589,022  
    Escrow receivable
     -       698,729  
    Accounts receivable
     1,142,898       1,570,257  
    Intangible lease asset, net of accumulated amortization of $656,863 and $413,580, respectively
     437,908       681,191  
    Deferred debt issuance costs, net of accumulated amortization of $401,942 and $0, respectively
     1,146,411       -  
    Deferred lease costs, net of accumulated amortization of $47,930 and $0, respectively
     872,533       -  
    Hedged derivative asset
     516,305       -  
    Current tax asset
     770,763       -  
    Prepaid expenses and other assets
     268,040       2,477,977  
        Total Assets
   $ 284,394,660     $ 111,431,833  
                 
Liabilities and Equity
                
    Long-term debt
   $ 70,000,000     $ -  
    Accounts payable and other accrued liabilities
     2,574,541       2,885,631  
    Dividends payable to shareholders
     3,018,990       -  
    Lease obligation
     -       27,522  
    Deferred tax liability
     4,576,499       7,172,133  
    Line of credit
     -       120,000  
    Unearned revenue
     -       2,370,762  
        Total Liabilities
   $ 80,170,030     $ 12,576,048  
                 
Equity
                
    Warrants, no par value; 945,594 issued and outstanding at September 30, 2013 and November 30, 2012 (5,000,000 authorized)
   $ 1,370,700     $ 1,370,700  
    
 Capital stock, non-convertible, $0.001 par value; 24,151,870 shares issued and outstanding at September 30, 2013 and 9,190,667 shares issued and outstanding at    
 November 30, 2012 (100,000,000 shares authorized)
     24,152       9,191  
    Additional paid-in capital
     173,411,657       91,763,475  
    Accumulated retained earnings
     -       5,712,419  
    Accumulated other comprehensive income
     658,470       -  
        Total CorEnergy Equity
     175,464,979       98,855,785  
    Non-controlling Interest
     28,759,651       -  
        Total Equity
     204,224,630       98,855,785  
        Total Liabilities and Equity
   $ 284,394,660     $ 111,431,833  
 
 

 
 
 
 
 
CorEnergy Infrastructure Trust, Inc.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
   
For the Three Months Ended
    
For the Nine Months Ended
  
    September 30, 2013      August 31, 2012     September 30, 2013     August 31, 2012  
Revenue
                                
    Lease revenue
   $ 5,638,244     $ 638,244     $ 16,914,732     $ 1,914,732  
    Sales revenue
     1,935,868       1,927,626       6,381,213       5,804,894  
        Total Revenue
     7,574,112       2,565,870       23,295,945       7,719,626  
                                 
Expenses
                                
    Cost of sales (excluding depreciation expense)
     1,411,318       1,381,161       4,891,305       4,416,947  
    Management fees, net of expense reimbursements
     647,380       298,051       1,937,588       800,397  
    Asset acquisition expenses
     640,302       144,270       725,513       238,969  
    Professional fees
     305,326       419,340       1,191,017       796,853  
    Depreciation expense
     2,857,412       246,804       8,571,860       740,437  
    Amortization expense
     15,342       -       45,963       -  
    Operating expenses
     204,446       196,644       714,830       558,450  
    Directors' fees
     74,437       28,739       124,994       58,050  
    Other expenses
     129,748       47,114       403,766       182,776  
        Total Expenses
     6,285,711       2,762,123       18,606,836       7,792,879  
Operating Income (Loss)
     1,288,401       (196,253 )     4,689,109       (73,253 )
Other Income (Expense)
                                
    Net distributions and dividend income
   $ 568,332     $ (502,176 )   $ 584,157     $ (361,452 )
    Net realized and unrealized gain (loss) on trading securities
     (567,276 )     5,935,768       (251,213 )     5,197,958  
    Net realized and unrealized gain (loss) on other equity securities
     1,439,296       2,556,734       3,834,306       15,463,335  
    Interest Expense
     (818,134 )     (16,780 )     (2,462,790 )     (69,418 )
        Total Other Income (Expense)
     622,218       7,973,546       1,704,460       20,230,423  
Income before income taxes
     1,910,619       7,777,293       6,393,569       20,157,170  
Taxes
                                
    Current tax expense (benefit)
     (680,281 )     19,265       187,367       29,265  
    Deferred tax expense
     1,785,406       2,769,520       2,180,456       7,415,596  
        Income tax expense, net
     1,105,125       2,788,785       2,367,823       7,444,861  
Net Income
     805,494       4,988,508       4,025,746       12,712,309  
    Less: Net Income attributable to non-controlling interest
     366,042       -       1,103,469       -  
Net Income attributable to CORR Stockholders
   $ 439,452     $ 4,988,508     $ 2,922,277     $ 12,712,309  
 Net income
   $ 805,494     $ 4,988,508     $ 4,025,746     $ 12,712,309  
    Other comprehensive income
                                
    Changes in fair value of qualifying hedges attributable to CORR Stockholders
     (262,972 )     -       658,470       -  
    Changes in fair value of qualifying hedges attributable to non-controlling interest
     (61,485 )     -       153,954       -  
        Net Change in Other Comprehensive Income
   $ (324,457 )   $ -     $ 812,424     $ -  
Total Comprehensive Income
     481,037       4,988,508       4,838,170       12,712,309  
    Less: Comprehensive income attributable to non-controlling interest
     304,557       -       1,257,423       -  
Comprehensive Income (Loss) attributable to CORR Stockholders
   $ 176,480     $ 4,988,508     $ 3,580,747     $ 12,712,309  
    Earnings Per Common Share:
                                
        Basic and Diluted
   $ 0.02     $ 0.54     $ 0.12     $ 1.38  
    Weighted Average Shares of Common Stock Outstanding:
                                
        Basic and Diluted
     24,151,700       9,182,699       24,147,163       9,180,776  
    Dividends declared per share
   $ 0.125     $ 0.110     $ 0.375     $ 0.330  

 

 

 

 
 
 
 

CorEnergy Infrastructure Trust, Inc.
CONSOLIDATED STATEMENTS OF EQUITY
 
                 
 
 
 
Accumulated
Other
Comprehensive
 Income
  
 
 
 
Retained
Earnings
 (Accumulated
 Deficit)
        
 
 
 
Capital Stock
      
 
 
Additional Paid-
in Capital
      
 
 
 
Non-Controlling Interest
    
 
Shares
  
Amount
  
Warrants
          
Total
Balance at November 30, 2011
 9,176,889
  
        9,177
  
 1,370,700
  
     95,682,738
  
                -
  
    (6,636,302)
  
                -
  
     90,426,313
Net Income
             -
  
             -
  
             -
  
                  -
  
                -
  
   12,348,721
      
     12,348,721
Distributions to stockholders sourced as return of capital
             -
  
             -
  
             -
  
      (4,040,273)
  
                -
  
                -
  
                -
  
      (4,040,273)
Reinvestment of distributions to stockholders
      13,778
  
            14
  
             -
  
         121,010
  
                -
  
                -
  
                -
  
         121,024
Balance at November 30, 2012
 9,190,667
  
        9,191
  
 1,370,700
  
     91,763,475
  
                -
  
     5,712,419
  
                -
  
     98,855,785
Net Loss
             -
  
             -
  
             -
  
                  -
  
                -
  
    (1,503,396)
  
        (18,347)
  
      (1,521,743)
Net offering proceeds
14,950,000
  
      14,950
  
             -
  
     83,493,200
  
                -
  
                -
  
                -
  
     83,508,150
Non-controlling interest contribution
             -
  
             -
  
             -
  
                    -
  
                -
  
                -
  
   30,000,000
  
     30,000,000
Balance at December 31, 2012 (Unaudited)
24,140,667
  
      24,141
  
 1,370,700
  
   175,256,675
  
                -
  
     4,209,023
  
   29,981,653
  
   210,842,192
Net Income
             -
  
             -
  
             -
  
                  -
  
                -
  
     2,922,277
  
     1,103,469
  
       4,025,746
Dividends
             -
  
             -
  
             -
  
      (1,923,762)
  
                -
  
    (7,131,300)
  
                -
  
      (9,055,062)
Distributions to non-controlling interest
             -
  
             -
  
             -
  
                    -
  
                -
  
                -
  
    (2,479,425)
  
      (2,479,425)
Reinvestment of dividends paid to stockholders
      11,203
  
            11
  
             -
  
           78,744
  
                -
  
                -
  
                -
  
           78,755
Net change in cash flow hedges
             -
  
             -
  
             -
  
                    -
  
        658,470
  
                -
  
       153,954
  
         812,424
Balance at September 30, 2013 (Unaudited)
$ 24,151,870
  
 $   24,152
  
$ 1,370,700
  
 $ 173,411,657
  
 $ 658,470
  
 $           -
  
 $ 28,759,651
  
 $ 204,224,630
 
 

 
 
 

CorEnergy Infrastructure Trust, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
   
For the Nine Months Ended
      
   
September 30, 2013
    
August 31, 2012
      
Operating Activities
                
    Net Income
   $ 4,025,746     $ 12,712,309      
    Adjustments to reconcile net income to net cash provided by operating activities:
                    
        Distributions received from investment securities
     (567,276 )     3,685,593      
        Deferred income tax, net
     2,180,456       7,415,596      
        Depreciation
     8,571,860       740,437      
        Amortization
     650,330       132,934      
        Realized and unrealized (gain) loss on trading securities
     251,213       (5,197,958 )    
        Realized and unrealized gain on other equity securities
     (3,834,306 )     (15,463,335 )    
        Changes in assets and liabilities:
                    
            (Increase) decrease in accounts receivable
     (220,004 )     402,204      
            Increase in lease receivable
     -       (711,229 )    
            (Increase) decrease in prepaid expenses and other assets
     330,715       (1,418,941 )    
            Increase (decrease) in accounts payable and other accrued liabilities
     (1,571,999 )     535,745      
            Net change in derivative contracts, not designated as hedges
     64,123       -      
            Decrease in current tax liability
     (4,626,710 )     -      
            Decrease in unearned income
     (2,133,685 )     -      
    Net cash provided by operating activities
   $ 3,120,463     $ 2,833,355      
                     
Investing Activities
                     
        Proceeds from sale of long-term investment of trading and other equity securities
     5,563,865       9,354,272      
        Deferred lease costs
     (5,620 )     -      
        Acqusition expenditures
     (37,696 )     -      
        Purchases of property and equipment
     (42,242 )     (30,321 )    
        Proceeds from sale of property and equipment
     -       3,076      
        Return of capital on distributions received
     1,142,488       -      
    Net cash provided by investing activities
   $ 6,620,795     $ 9,327,027      
                     
Financing Activities
                    
        Payments on lease obligation
     (20,698 )     (59,702 )    
        Debt financing costs
     (10,999 )     -      
        Net change in derivative contracts, designated as hedges
     (34,884 )     -      
        Dividends paid
     (6,036,072 )     (1,952,477 )    
        Distributions to non-controlling interest
     (2,479,425 )     -      
        Advances on revolving line of credit
     139,397       2,585,000      
        Payments on revolving line of credit
     (139,397 )     (2,460,000 )    
        Payments on long-term debt
     -       (1,283,000 )    
        Dividend reinvestment
     78,755       -      
        Net cash used in financing activities
   $ (8,503,323 )   $ (3,170,179 )    
Net Change in Cash and Cash Equivalents
   $ 1,237,935     $ 8,990,203      
Cash and Cash Equivalents at beginning of period
     17,680,783       2,793,326      
Cash and Cash Equivalents at end of period
   $ 18,918,718     $ 11,783,529      
                     
Supplemental Disclosure of Cash Flow Information
                    
    Interest paid
   $ 1,948,486     $ 155,450      
    Income taxes paid
   $ 4,781,617     $ 96,000      
Non-Cash Investing Activities
                    
    Security proceeds from sale in long-term investment of other equity securities
   $ -     $ 26,565,400      
Non-Cash Financing Activities
                    
    Reinvestment of distributions by common stockholders in additional common shares
   $ 78,755     $ 66,884