· |
Delivered Net Income of $0.68 per common share (diluted), NAREIT Funds from Operations (NAREIT FFO)1 of $1.01 per share (diluted), Funds from Operations (FFO)1 of $0.96 per share (diluted) and Adjusted Funds from Operations (AFFO)1 of $0.98 per share (diluted)
|
· |
Declared common stock dividend of $0.75 per share ($3.00 annualized) for the third quarter
|
· |
All tenants continue to make timely rent payments
|
· |
Restructured the Four Wood Financing Note and expects to convert a portion to a preferred equity interest
|
· |
Nathan Poundstone joins CorEnergy team as incoming Chief Accounting Officer
|
Third Quarter
Ended September 30, 2016 |
||||||||||||
Per Share
|
||||||||||||
Total
|
Basic
|
Diluted
|
||||||||||
Net Income (Attributable to Common Stockholders)1
|
$
|
8,194,076
|
$
|
0.69
|
$
|
0.68
|
||||||
NAREIT Funds from Operations (NAREIT FFO)1
|
$
|
13,319,800
|
$
|
1.12
|
$
|
1.01
|
||||||
Funds From Operations (FFO)1
|
$
|
12,535,284
|
$
|
1.06
|
$
|
0.96
|
||||||
Adjusted Funds From Operations (AFFO)1
|
$
|
13,033,630
|
$
|
1.10
|
$
|
0.98
|
September 30, 2016
|
December 31, 2015
|
|||||||
Assets
|
||||||||
Leased property, net of accumulated depreciation of $47,520,455 and $33,869,263
|
$
|
495,640,396
|
$
|
509,226,215
|
||||
Property and equipment, net of accumulated depreciation of $8,454,299 and $5,948,988
|
117,534,873
|
119,629,978
|
||||||
Financing notes and related accrued interest receivable, net of reserve of $4,100,000 and $13,784,137
|
1,500,000
|
7,675,626
|
||||||
Other equity securities, at fair value
|
9,465,736
|
8,393,683
|
||||||
Cash and cash equivalents
|
10,107,754
|
14,618,740
|
||||||
Accounts and other receivables
|
16,358,597
|
10,431,240
|
||||||
Deferred costs, net of accumulated amortization of $1,984,580 and $2,717,609
|
3,408,620
|
4,187,271
|
||||||
Prepaid expenses and other assets
|
614,788
|
491,024
|
||||||
Deferred tax asset
|
1,589,558
|
1,606,976
|
||||||
Goodwill
|
1,718,868
|
1,718,868
|
||||||
Total Assets
|
$
|
657,939,190
|
$
|
677,979,621
|
||||
Liabilities and Equity
|
||||||||
Secured credit facilities, net (including $9,574,465 and $0 with related party)
|
$
|
91,698,387
|
$
|
105,440,842
|
||||
Unsecured convertible senior notes, net of discount and debt issuance costs of $2,951,902 and $3,576,090 respectively
|
111,048,098
|
111,423,910
|
||||||
Asset retirement obligation
|
13,381,604
|
12,839,042
|
||||||
Accounts payable and other accrued liabilities
|
4,610,452
|
2,317,774
|
||||||
Management fees payable
|
1,743,599
|
1,763,747
|
||||||
Unearned revenue
|
343,295
|
—
|
||||||
Total Liabilities
|
$
|
222,825,435
|
$
|
233,785,315
|
||||
Equity
|
||||||||
Series A Cumulative Redeemable Preferred Stock 7.375%, $56,250,000 liquidation preference ($2,500 per share, $0.001 par value), 10,000,000 authorized; 22,500 issued and outstanding at September 30, 2016, and December 31, 2015
|
$
|
56,250,000
|
56,250,000
|
|||||
Capital stock, non-convertible, $0.001 par value; 11,876,389 and 11,939,697 shares issued and outstanding at September 30, 2016, and December 31, 2015 (100,000,000 shares authorized)
|
11,876
|
11,940
|
||||||
Additional paid-in capital
|
351,754,151
|
361,581,507
|
||||||
Accumulated other comprehensive income (loss)
|
(14,235
|
)
|
190,797
|
|||||
Total CorEnergy Equity
|
408,001,792
|
418,034,244
|
||||||
Non-controlling Interest
|
27,111,963
|
26,160,062
|
||||||
Total Equity
|
435,113,755
|
444,194,306
|
||||||
Total Liabilities and Equity
|
$
|
657,939,190
|
$
|
677,979,621
|
For the Three Months Ended
|
For the Nine Months Ended
|
|||||||||||||||
September 30, 2016
|
September 30, 2015
|
September 30, 2016
|
September 30, 2015
|
|||||||||||||
Revenue
|
||||||||||||||||
Lease revenue
|
$
|
16,996,155
|
$
|
16,966,056
|
$
|
50,988,299
|
$
|
31,102,036
|
||||||||
Transportation and distribution revenue
|
5,119,330
|
3,557,096
|
15,283,461
|
10,753,810
|
||||||||||||
Financing revenue
|
—
|
182,604
|
162,344
|
1,511,900
|
||||||||||||
Sales revenue
|
—
|
1,434,694
|
—
|
5,442,257
|
||||||||||||
Total Revenue
|
22,115,485
|
22,140,450
|
66,434,104
|
48,810,003
|
||||||||||||
Expenses
|
||||||||||||||||
Transportation and distribution expenses
|
1,482,161
|
1,120,862
|
4,222,792
|
3,590,855
|
||||||||||||
Cost of Sales
|
—
|
382,851
|
—
|
2,201,139
|
||||||||||||
General and administrative
|
3,021,869
|
2,837,762
|
9,084,961
|
7,311,610
|
||||||||||||
Depreciation, amortization and ARO accretion expense
|
5,744,266
|
5,836,665
|
16,778,109
|
13,381,483
|
||||||||||||
Provision for loan loss and disposition
|
—
|
7,951,137
|
5,014,466
|
7,951,137
|
||||||||||||
Total Expenses
|
10,248,296
|
18,129,277
|
35,100,328
|
34,436,224
|
||||||||||||
Operating Income
|
$
|
11,867,189
|
$
|
4,011,173
|
$
|
31,333,776
|
$
|
14,373,779
|
||||||||
Other Income (Expense)
|
||||||||||||||||
Net distributions and dividend income
|
$
|
277,523
|
$
|
241,563
|
$
|
867,265
|
$
|
1,025,381
|
||||||||
Net realized and unrealized gain (loss) on other equity securities
|
1,430,858
|
(1,408,751
|
)
|
1,001,771
|
(915,568
|
)
|
||||||||||
Interest expense
|
(3,520,856
|
)
|
(3,854,913
|
)
|
(10,987,677
|
)
|
(6,129,073
|
)
|
||||||||
Total Other Income (Expense)
|
(1,812,475
|
)
|
(5,022,101
|
)
|
(9,118,641
|
)
|
(6,019,260
|
)
|
||||||||
Income before income taxes
|
10,054,714
|
(1,010,928
|
)
|
22,215,135
|
8,354,519
|
|||||||||||
Taxes
|
||||||||||||||||
Current tax expense (benefit)
|
95,125
|
105,020
|
(378,954
|
)
|
645,255
|
|||||||||||
Deferred tax expense (benefit)
|
388,027
|
(1,953,973
|
)
|
17,418
|
(2,222,706
|
)
|
||||||||||
Income tax expense (benefit), net
|
483,152
|
(1,848,953
|
)
|
(361,536
|
)
|
(1,577,451
|
)
|
|||||||||
Net Income
|
9,571,562
|
838,025
|
22,576,671
|
9,931,970
|
||||||||||||
Less: Net Income attributable to non-controlling interest
|
340,377
|
410,806
|
999,838
|
1,232,985
|
||||||||||||
Net Income attributable to CorEnergy Stockholders
|
$
|
9,231,185
|
$
|
427,219
|
$
|
21,576,833
|
$
|
8,698,985
|
||||||||
Preferred dividend requirements
|
1,037,109
|
1,037,109
|
3,111,327
|
2,811,718
|
||||||||||||
Net Income (loss) attributable to Common Stockholders
|
$
|
8,194,076
|
$
|
(609,890
|
)
|
$
|
18,465,506
|
$
|
5,887,267
|
|||||||
Net Income
|
$
|
9,571,562
|
$
|
838,025
|
$
|
22,576,671
|
$
|
9,931,970
|
||||||||
Other comprehensive income (loss):
|
||||||||||||||||
Changes in fair value of qualifying hedges attributable to CorEnergy stockholders
|
3,039
|
(223,176
|
)
|
(205,032
|
)
|
(481,081
|
)
|
|||||||||
Changes in fair value of qualifying hedges attributable to non-controlling interest
|
710
|
(52,180
|
)
|
(47,937
|
)
|
(112,479
|
)
|
|||||||||
Net Change in Other Comprehensive Income (Loss)
|
$
|
3,749
|
$
|
(275,356
|
)
|
$
|
(252,969
|
)
|
$
|
(593,560
|
)
|
|||||
Total Comprehensive Income
|
9,575,311
|
562,669
|
22,323,702
|
9,338,410
|
||||||||||||
Less: Comprehensive income attributable to non-controlling interest
|
341,087
|
358,626
|
951,901
|
1,120,506
|
||||||||||||
Comprehensive Income attributable to CorEnergy Stockholders
|
$
|
9,234,224
|
$
|
204,043
|
$
|
21,371,801
|
$
|
8,217,904
|
||||||||
Earnings (Loss) Per Common Share:
|
||||||||||||||||
Basic
|
$
|
0.69
|
$
|
(0.05
|
)
|
$
|
1.55
|
$
|
0.57
|
|||||||
Diluted
|
$
|
0.68
|
$
|
(0.05
|
)
|
$
|
1.55
|
$
|
0.57
|
|||||||
Weighted Average Shares of Common Stock Outstanding:
|
||||||||||||||||
Basic
|
11,872,729
|
11,924,148
|
11,909,431
|
10,266,380
|
||||||||||||
Diluted
|
15,327,274
|
11,924,148
|
11,909,431
|
10,266,380
|
||||||||||||
Dividends declared per share
|
$
|
0.750
|
$
|
0.675
|
$
|
2.250
|
$
|
2.000
|
Capital Stock
|
Preferred Stock
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Amount
|
Additional
Paid-in
Capital
|
Accumulated
Other
Comprehensive
Income
|
Retained
Earnings
|
Non-Controlling
Interest
|
Total
|
|||||||||||||||||||||||||
Balance at December 31, 2015
|
11,939,697
|
$
|
11,940
|
$
|
56,250,000
|
$
|
361,581,507
|
$
|
190,797
|
$
|
—
|
$
|
26,160,062
|
$
|
444,194,306
|
|||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
—
|
21,576,833
|
999,838
|
22,576,671
|
||||||||||||||||||||||||
Net change in cash flow hedges
|
—
|
—
|
—
|
—
|
(205,032
|
)
|
—
|
(47,937
|
)
|
(252,969
|
)
|
|||||||||||||||||||||
Total comprehensive income (loss)
|
—
|
—
|
—
|
—
|
(205,032
|
)
|
21,576,833
|
951,901
|
22,323,702
|
|||||||||||||||||||||||
Repurchase of common stock
|
(90,613
|
)
|
(91
|
)
|
—
|
(2,041,760
|
)
|
—
|
—
|
—
|
(2,041,851
|
)
|
||||||||||||||||||||
Series A preferred stock dividends
|
—
|
—
|
—
|
—
|
—
|
(3,111,327
|
)
|
—
|
(3,111,327
|
)
|
||||||||||||||||||||||
Common stock dividends
|
—
|
—
|
—
|
(8,339,820
|
)
|
—
|
(18,465,506
|
)
|
—
|
(26,805,326
|
)
|
|||||||||||||||||||||
Common stock issued under director's compensation plan
|
2,551
|
2
|
—
|
59,998
|
—
|
—
|
—
|
60,000
|
||||||||||||||||||||||||
Reinvestment of dividends paid to common stockholders
|
24,754
|
25
|
—
|
494,226
|
—
|
—
|
—
|
494,251
|
||||||||||||||||||||||||
Balance at September 30, 2016 (Unaudited)
|
11,876,389
|
$
|
11,876
|
$
|
56,250,000
|
$
|
351,754,151
|
$
|
(14,235
|
)
|
$
|
—
|
$
|
27,111,963
|
$
|
435,113,755
|
For the Nine Months Ended
|
||||||||
September 30, 2016
|
September 30, 2015
|
|||||||
Operating Activities
|
||||||||
Net Income
|
$
|
22,576,671
|
$
|
9,931,970
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Deferred income tax, net
|
17,418
|
(2,222,706
|
)
|
|||||
Depreciation, amortization and ARO accretion
|
18,334,719
|
14,757,322
|
||||||
Provision for loan loss
|
5,014,466
|
7,951,137
|
||||||
Gain on repurchase of convertible debt
|
(71,702
|
)
|
—
|
|||||
Net distributions and dividend income, including recharacterization of income
|
(117,004
|
)
|
(371,323
|
)
|
||||
Net realized and unrealized (gain) loss on other equity securities
|
(1,001,771
|
)
|
915,568
|
|||||
Unrealized gain on derivative contract
|
(105,567
|
)
|
(48,494
|
)
|
||||
Common stock issued under directors compensation plan
|
60,000
|
90,000
|
||||||
Changes in assets and liabilities:
|
||||||||
Increase in accounts and other receivables
|
(5,434,028
|
)
|
(1,326,469
|
)
|
||||
Decrease (increase) in financing note accrued interest receivable
|
95,114
|
(488,880
|
)
|
|||||
Decrease (increase) in prepaid expenses and other assets
|
49,227
|
(70,846
|
)
|
|||||
(Decrease) increase in management fee payable
|
(20,148
|
)
|
628,676
|
|||||
Increase in accounts payable and other accrued liabilities
|
1,913,875
|
1,877,591
|
||||||
Increase (decrease) in unearned revenue
|
343,295
|
(711,230
|
)
|
|||||
Net cash provided by operating activities
|
$
|
41,654,565
|
$
|
30,912,316
|
||||
Investing Activities
|
||||||||
Proceeds from assets and liabilities held for sale
|
644,934
|
7,678,246
|
||||||
Deferred lease costs
|
—
|
(329,220
|
)
|
|||||
Acquisition expenditures
|
—
|
(251,113,605
|
)
|
|||||
Purchases of property and equipment, net
|
(475,581
|
)
|
(113,262
|
)
|
||||
Proceeds from asset foreclosure and sale
|
223,451
|
—
|
||||||
Increase in financing notes receivable
|
(202,000
|
)
|
(39,248
|
)
|
||||
Return of capital on distributions received
|
3,393
|
87,995
|
||||||
Net cash provided (used) by investing activities
|
$
|
194,197
|
$
|
(243,829,094
|
)
|
|||
Financing Activities
|
||||||||
Debt financing costs
|
(193,000
|
)
|
(1,342,288
|
)
|
||||
Net offering proceeds on Series A preferred stock
|
—
|
54,210,476
|
||||||
Net offering proceeds on common stock
|
—
|
73,184,680
|
||||||
Net offering proceeds on convertible debt
|
—
|
111,262,500
|
||||||
Repurchases of common stock
|
(2,041,851
|
)
|
—
|
|||||
Repurchases of convertible debt
|
(899,960
|
)
|
—
|
|||||
Dividends paid on Series A preferred stock
|
(3,111,327
|
)
|
(2,466,015
|
)
|
||||
Dividends paid on common stock
|
(26,311,075
|
)
|
(19,929,939
|
)
|
||||
Distributions to non-controlling interest
|
—
|
(2,030,715
|
)
|
|||||
Advances on revolving line of credit
|
44,000,000
|
45,392,332
|
||||||
Payments on revolving line of credit
|
—
|
(77,533,609
|
)
|
|||||
Proceeds from term debt
|
—
|
45,000,000
|
||||||
Principal payments on credit facility
|
(57,802,535
|
)
|
(3,546,000
|
)
|
||||
Net cash (used) provided by financing activities
|
$
|
(46,359,748
|
)
|
$
|
222,201,422
|
|||
Net Change in Cash and Cash Equivalents
|
$
|
(4,510,986
|
)
|
$
|
9,284,644
|
|||
Cash and Cash Equivalents at beginning of period
|
14,618,740
|
7,578,164
|
||||||
Cash and Cash Equivalents at end of period
|
$
|
10,107,754
|
$
|
16,862,808
|
||||
Supplemental Disclosure of Cash Flow Information
|
||||||||
Interest paid
|
$
|
7,829,619
|
$
|
2,657,567
|
||||
Income taxes paid (net of refunds)
|
$
|
42,200
|
$
|
608,754
|
||||
Non-Cash Investing Activities
|
||||||||
Change in accounts and other receivables
|
$
|
(450,000
|
)
|
$
|
—
|
|||
Change in accounts payable and accrued expenses related to acquisition expenditures
|
$
|
—
|
$
|
(448,780
|
)
|
|||
Change in accounts payable and accrued expenses related to issuance of financing and other notes receivable
|
$
|
—
|
$
|
(39,248
|
)
|
|||
Net change in Assets Held for Sale, Property and equipment, Prepaid expenses and other assets, Accounts payable and other accrued liabilities and Liabilities held for sale
|
$
|
(1,776,549
|
)
|
$
|
—
|
|||
Non-Cash Financing Activities
|
||||||||
Change in accounts payable and accrued expenses related to the issuance of common equity
|
$
|
—
|
$
|
(72,685
|
)
|
|||
Change in accounts payable and accrued expenses related to debt financing costs
|
$
|
—
|
$
|
35,472
|
||||
Reinvestment of distributions by common stockholders in additional common shares
|
$
|
494,251
|
$
|
471,706
|
For the Three Months Ended
|
For the Nine Months Ended
|
|||||||||||||||
September 30, 2016
|
September 30, 2015
|
September 30, 2016
|
September 30, 2015
|
|||||||||||||
Net Income attributable to CorEnergy Stockholders
|
$
|
9,231,185
|
$
|
427,219
|
$
|
21,576,833
|
$
|
8,698,985
|
||||||||
Less:
|
||||||||||||||||
Preferred Dividend Requirements
|
1,037,109
|
1,037,109
|
3,111,327
|
2,811,718
|
||||||||||||
Net Income (loss) attributable to Common Stockholders
|
8,194,076
|
(609,890
|
)
|
18,465,506
|
5,887,267
|
|||||||||||
Add:
|
||||||||||||||||
Depreciation
|
5,537,179
|
5,644,320
|
16,166,599
|
13,158,454
|
||||||||||||
Less:
|
||||||||||||||||
Non-Controlling Interest attributable to NAREIT FFO reconciling items
|
411,455
|
411,455
|
1,234,364
|
1,234,365
|
||||||||||||
NAREIT funds from operations (NAREIT FFO)
|
13,319,800
|
4,622,975
|
33,397,741
|
17,811,356
|
||||||||||||
Add:
|
||||||||||||||||
Distributions received from investment securities
|
278,782
|
274,550
|
753,655
|
742,056
|
||||||||||||
Income tax expense (benefit) from investment securities
|
645,083
|
(450,699
|
)
|
703,211
|
50,398
|
|||||||||||
Less:
|
||||||||||||||||
Net distributions and dividend income
|
277,523
|
241,563
|
867,265
|
1,025,381
|
||||||||||||
Net realized and unrealized gain (loss) on other equity securities
|
1,430,858
|
(1,408,751
|
)
|
1,001,771
|
(915,568
|
)
|
||||||||||
Funds from operations adjusted for securities investments (FFO)
|
12,535,284
|
5,614,014
|
32,985,571
|
18,493,997
|
||||||||||||
Add:
|
||||||||||||||||
Provision for loan losses, net of tax
|
—
|
6,667,823
|
4,409,359
|
6,667,823
|
||||||||||||
Transaction costs
|
33,984
|
133,009
|
71,899
|
880,307
|
||||||||||||
Amortization of debt issuance costs
|
469,004
|
699,386
|
1,556,607
|
1,313,026
|
||||||||||||
Amortization of deferred lease costs
|
22,983
|
22,824
|
68,949
|
53,508
|
||||||||||||
Accretion of asset retirement obligation
|
184,104
|
169,521
|
542,561
|
169,521
|
||||||||||||
Income tax benefit
|
(161,931
|
)
|
(114,940
|
)
|
(459,640
|
)
|
(344,535
|
)
|
||||||||
Amortization of above market leases
|
—
|
—
|
—
|
72,987
|
||||||||||||
Unrealized gain associated with derivative instruments
|
(60,513
|
)
|
(13,965
|
)
|
(2,818
|
)
|
(48,494
|
)
|
||||||||
Less:
|
||||||||||||||||
EIP Lease Adjustment (1)
|
—
|
—
|
—
|
542,809
|
||||||||||||
Non-Controlling Interest attributable to AFFO reconciling items
|
(10,715
|
)
|
23,837
|
35,153
|
69,348
|
|||||||||||
Adjusted funds from operations (AFFO)
|
$
|
13,033,630
|
$
|
13,153,835
|
$
|
39,137,335
|
$
|
26,645,983
|
||||||||
Weighted Average Shares of Common Stock Outstanding:
|
||||||||||||||||
Basic
|
11,872,729
|
11,924,148
|
11,909,431
|
10,266,380
|
||||||||||||
Diluted (2)
|
15,327,274
|
15,408,998
|
15,379,792
|
11,466,292
|
||||||||||||
NAREIT FFO attributable to Common Stockholders
|
||||||||||||||||
Basic
|
$
|
1.12
|
$
|
0.39
|
$
|
2.80
|
$
|
1.73
|
||||||||
Diluted (2)
|
$
|
1.01
|
$
|
0.39
|
$
|
2.60
|
$
|
1.73
|
||||||||
FFO attributable to Common Stockholders
|
||||||||||||||||
Basic
|
$
|
1.06
|
$
|
0.47
|
$
|
2.77
|
$
|
1.80
|
||||||||
Diluted (2)
|
$
|
0.96
|
$
|
0.47
|
$
|
2.57
|
$
|
1.79
|
||||||||
AFFO attributable to Common Stockholders
|
||||||||||||||||
Basic
|
$
|
1.10
|
$
|
1.10
|
$
|
3.29
|
$
|
2.60
|
||||||||
Diluted
|
$
|
0.98
|
$
|
0.98
|
$
|
2.94
|
$
|
2.50
|