corenergylogo15.jpg

CorEnergy Announces First Quarter 2018 Results
KANSAS CITY, MO - May 1, 2018 - CorEnergy Infrastructure Trust, Inc. (“CorEnergy” or the “Company”) today announced financial results for the first quarter, ended March 31, 2018.
First Quarter Performance Summary
First quarter financial highlights are as follows:
 
For the Three Months Ended
 
March 31, 2018
 
 
 
Per Share
 
Total
 
Basic
 
Diluted
Net Income (Attributable to Common Stockholders)1
$
5,310,833

 
$
0.45

 
$
0.45

NAREIT Funds from Operations (NAREIT FFO)1
$
11,449,252

 
$
0.96

 
$
0.89

Funds From Operations (FFO)1
$
11,413,799

 
$
0.96

 
$
0.89

Adjusted Funds From Operations (AFFO)1
$
12,027,196

 
$
1.01

 
$
0.91

Dividends Declared to Common Stockholders
 
 
$
0.75

 
 
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 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 for the first quarter 2018, in line with the previous ten quarterly dividends
Received participating rents: Continued to receive participating rents on the Pinedale LGS
Tenant relationship: Entered into discussions with Energy XXI Gulf Coast (EGC) regarding its post-bankruptcy recovery efforts, while intending to preserve long-term value for our investors
MoGas Pipeline: Continued preparation of the FERC rate case to be filed in second quarter 2018
“During the first quarter, we prepared for the upcoming FERC rate case for the MoGas Pipeline and commenced our annual asset inspections, including the Grand Isle Gathering System and the Portland Terminal. Regarding our offer to enter into discussions with EGC, traditionally we have expressed that any potential solution accommodating tenant distress would need to





preserve the present value of our assets,” said CorEnergy CEO Dave Schulte. “The CorEnergy team is also diligently pursuing a number of promising acquisition opportunities with the objective of closing one or more in 2018. Upstream operators are open to creative funding options, such as those provided by CorEnergy, including selling dedicated infrastructure assets and redeploying proceeds into projects with greater return opportunities."
Portfolio Update
Pinedale LGS: Since the beginning of the year, the market pricing of both Ultra Petroleum's bonds and equity seem to be reflecting lower expected cash flow as a result of actual and forward prices for Rockies gas. However, UPL’s active horizontal drilling results are reported as economic even at lower realized prices, and the utilization of our Liquids Gathering System remains at robust levels. CorEnergy continues to receive participating rents, which contribute to increased dividend coverage.
Grand Isle Gathering System: Following its emergence from bankruptcy in December 2016, Energy XXI Gulf Coast has undertaken the task of realigning costs and developing efficiencies to strengthen its financial stability and fund future production. Given the quality of the long-term reserves behind our GIGS system, CorEnergy has offered to enter discussions with its tenant to analyze the possibility of assisting with further recovery efforts, including a potential lease restructuring, among other considerations. Provided that the long-term value of GIGS is preserved, CorEnergy is willing to find an outcome which will also support EGC’s future success.
Outlook
CorEnergy regularly assesses its ability to pay and grow its dividend to common stockholders above the current level of $0.75 per quarter. The Company targets long-term revenue growth of 1-3% annually from existing contracts, through inflation-based and participating rent adjustments and additional growth from acquisitions. There can be no assurance that any potential acquisition opportunities will result in consummated transactions.
Dividend Declaration
Common Stock: A first quarter 2018 dividend of $0.75 per share was declared for CorEnergy’s common stock. The dividend is payable on May 31, 2018, to stockholders of record on May 17, 2018.
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 May 31, 2018, to stockholders of record on May 17, 2018.

First Quarter 2018 Earnings Conference Call
CorEnergy will host a conference call on Wednesday, May 2, 2018, at 1:00 p.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 1:00 p.m. Central Time on June 2, 2018 by dialing 877-481-4010 (for international, 1-919-882-2331). The Conference ID is 28051. 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 essential 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 (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 dividend 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 losses, net of tax, transaction costs, amortization of debt issuance costs, amortization of deferred lease costs, accretion of asset retirement obligation, income tax expense (benefit) unrelated to securities investments, non-cash costs associated with derivative instruments, 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 Attributable to CorEnergy Stockholders are included in the additional financial information attached to this press release.

Contact Information:
CorEnergy Infrastructure Trust, Inc.
Investor Relations
Lesley Schorgl, 877-699-CORR (2677)
info@corenergy.reit










Consolidated Balance Sheets
 
 
 
 
 
March 31, 2018
 
December 31, 2017
Assets
(Unaudited)
 
 
Leased property, net of accumulated depreciation of $77,452,422 and $72,155,753
$
460,659,797

 
$
465,956,467

Property and equipment, net of accumulated depreciation of $13,470,161 and $12,643,636
112,357,230

 
113,158,872

Financing notes and related accrued interest receivable, net of reserve of $4,600,000 and $4,100,000
1,000,000

 
1,500,000

Other equity securities, at fair value
2,972,281

 
2,958,315

Cash and cash equivalents
17,330,097

 
15,787,069

Deferred rent receivable
23,760,888

 
22,060,787

Accounts and other receivables
2,983,075

 
3,786,036

Deferred costs, net of accumulated amortization of $790,381 and $623,764
3,338,298

 
3,504,916

Prepaid expenses and other assets
791,418

 
742,154

Deferred tax asset, net
3,511,770

 
2,244,629

Goodwill
1,718,868

 
1,718,868

Total Assets
$
630,423,722

 
$
633,418,113

Liabilities and Equity
 
 
 
Secured credit facilities, net of debt issuance costs of $250,507 and $254,646
$
39,867,493

 
$
40,745,354

Unsecured convertible senior notes, net of discount and debt issuance costs of $1,771,120 and $1,967,917
112,228,880

 
112,032,083

Asset retirement obligation
9,298,421

 
9,170,493

Accounts payable and other accrued liabilities
4,183,744

 
2,333,782

Management fees payable
1,813,263

 
1,748,426

Income tax liability
2,169,077

 
2,204,626

Unearned revenue
4,842,292

 
3,397,717

Total Liabilities
$
174,403,170

 
$
171,632,481

Equity
 
 
 
Series A Cumulative Redeemable Preferred Stock 7.375%, $130,000,000 liquidation preference ($2,500 per share, $0.001 par value), 10,000,000 authorized; 52,000 issued and outstanding at March 31, 2018 and December 31, 2017
$
130,000,000

 
$
130,000,000

Capital stock, non-convertible, $0.001 par value; 11,924,478 and 11,915,830 shares issued and outstanding at March 31, 2018 and December 31, 2017 (100,000,000 shares authorized)
11,925

 
11,916

Additional paid-in capital
326,008,627

 
331,773,716

Total Equity
456,020,552

 
461,785,632

Total Liabilities and Equity
$
630,423,722

 
$
633,418,113














Consolidated Statements of Income and Comprehensive Income (Unaudited)
 
 
 
 
 
For the Three Months Ended
 
March 31, 2018
 
March 31, 2017
Revenue
 
 
 
Lease revenue
$
17,591,859

 
$
17,066,526

Transportation and distribution revenue
3,952,979

 
5,010,590

Total Revenue
21,544,838

 
22,077,116

Expenses
 
 
 
Transportation and distribution expenses
1,572,896

 
1,335,570

General and administrative
2,727,057

 
3,061,240

Depreciation, amortization and ARO accretion expense
6,289,330

 
6,005,908

Provision for loan losses
500,000

 

Total Expenses
11,089,283

 
10,402,718

Operating Income
$
10,455,555

 
$
11,674,398

Other Income (Expense)
 
 
 
Net distributions and dividend income
$
3,951

 
$
43,462

Net realized and unrealized gain (loss) on other equity securities
13,966

 
(544,208
)
Interest expense
(3,210,590
)
 
(3,454,397
)
Total Other Expense
(3,192,673
)
 
(3,955,143
)
Income before income taxes
7,262,882

 
7,719,255

Taxes
 
 
 
Current tax benefit
(35,549
)
 
(33,760
)
Deferred tax benefit
(409,277
)
 
(298,846
)
Income tax benefit, net
(444,826
)
 
(332,606
)
Net Income
7,707,708

 
8,051,861

Less: Net Income attributable to non-controlling interest

 
382,383

Net Income attributable to CorEnergy Stockholders
$
7,707,708

 
$
7,669,478

Preferred dividend requirements
2,396,875

 
1,037,109

Net Income attributable to Common Stockholders
$
5,310,833

 
$
6,632,369

 
 
 
 
Net Income
$
7,707,708

 
$
8,051,861

Other comprehensive income:
 
 
 
Changes in fair value of qualifying hedges / AOCI attributable to CorEnergy stockholders

 
2,972

Changes in fair value of qualifying hedges / AOCI attributable to non-controlling interest

 
694

Net Change in Other Comprehensive Income
$

 
$
3,666

Total Comprehensive Income
7,707,708

 
8,055,527

Less: Comprehensive income attributable to non-controlling interest

 
383,077

Comprehensive Income attributable to CorEnergy Stockholders
$
7,707,708

 
$
7,672,450

Earnings Per Common Share:
 
 
 
Basic
$
0.45

 
$
0.56

Diluted
$
0.45

 
$
0.56

Weighted Average Shares of Common Stock Outstanding:
 
 
 
Basic
11,918,904

 
11,888,681

Diluted
11,918,904

 
11,888,681

Dividends declared per share
$
0.750

 
$
0.750






Consolidated Statements of Cash Flow
 
For the Three Months Ended
 
March 31, 2018
 
March 31, 2017
Operating Activities
 
 
 
Net Income
$
7,707,708

 
$
8,051,861

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Deferred income tax, net
(409,277
)
 
(298,846
)
Depreciation, amortization and ARO accretion
6,642,875

 
6,474,779

Provision for loan losses
500,000

 

Gain on sale of equipment
(3,724
)
 

Net distributions and dividend income, including recharacterization of income

 
148,649

Net realized and unrealized (gain) loss on other equity securities
(13,966
)
 
544,208

Unrealized gain on derivative contract

 
(27,073
)
Changes in assets and liabilities:
 
 
 
Increase in deferred rent receivable
(1,700,101
)
 
(1,802,285
)
Decrease in accounts and other receivables
802,961

 
632,878

Increase in prepaid expenses and other assets
(49,264
)
 
(99,573
)
Increase in management fee payable
64,837

 
10,270

Increase in accounts payable and other accrued liabilities
2,102,656

 
1,932,866

Decrease in current income tax liability
(35,549
)
 

Decrease in unearned revenue
(1,862,534
)
 

Net cash provided by operating activities
$
13,746,622

 
$
15,567,734

Investing Activities
 
 
 
Purchases of property and equipment
(47,883
)
 

Proceeds from sale of property and equipment
11,499

 

Return of capital on distributions received

 
31,055

Net cash (used in) provided by investing activities
$
(36,384
)
 
$
31,055

Financing Activities
 
 
 
Debt financing costs
(261,667
)
 

Dividends paid on Series A preferred stock
(2,396,875
)
 
(1,037,109
)
Dividends paid on common stock
(8,626,668
)
 
(8,667,329
)
Principal payments on secured credit facilities
(882,000
)
 
(2,413,733
)
Net cash used in financing activities
$
(12,167,210
)
 
$
(12,118,171
)
Net Change in Cash and Cash Equivalents
$
1,543,028

 
$
3,480,618

Cash and Cash Equivalents at beginning of period
15,787,069

 
7,895,084

Cash and Cash Equivalents at end of period
$
17,330,097

 
$
11,375,702

 
 
 
 
Supplemental Disclosure of Cash Flow Information
 
 
 
Interest paid
$
705,228

 
$
1,047,357

 
 
 
 
Non-Cash Financing Activities
 
 
 
Change in accounts payable and accrued expenses related to debt financing costs
$
(252,694
)
 
$

Reinvestment of distributions by common stockholders in additional common shares
310,204

 
247,333







NAREIT FFO, FFO Adjusted for Securities Investment and AFFO Reconciliation (Unaudited)
 
For the Three Months Ended
 
March 31, 2018
 
March 31, 2017
Net Income attributable to CorEnergy Stockholders
$
7,707,708

 
$
7,669,478

Less:
 
 
 
Preferred Dividend Requirements
2,396,875

 
1,037,109

Net Income attributable to Common Stockholders
$
5,310,833

 
$
6,632,369

Add:
 
 
 
Depreciation
6,138,419

 
5,822,296

Less:
 
 
 
Non-Controlling Interest attributable to NAREIT FFO reconciling items

 
411,455

NAREIT funds from operations (NAREIT FFO)
$
11,449,252

 
$
12,043,210

Add:
 
 
 
Distributions received from investment securities
3,951

 
223,166

Less:
 
 
 
Net distributions and dividend income
3,951

 
43,462

Net realized and unrealized gain (loss) on other equity securities
13,966

 
(544,208
)
Income tax benefit from investment securities
21,487

 
195,760

Funds from operations adjusted for securities investments (FFO)
$
11,413,799

 
$
12,571,362

Add:
 
 
 
Provision for loan losses, net of tax
500,000

 

Transaction costs
32,281

 
258,782

Amortization of debt issuance costs
353,544

 
468,871

Amortization of deferred lease costs
22,983

 
22,983

Accretion of asset retirement obligation
127,928

 
160,629

Less:
 
 
 
Non-cash gain associated with derivative instruments

 
27,072

Income tax benefit
423,339

 
136,846

Non-Controlling Interest attributable to AFFO reconciling items

 
3,351

Adjusted funds from operations (AFFO)
$
12,027,196

 
$
13,315,358

 
 
 
 
Weighted Average Shares of Common Stock Outstanding:
 
 
 
Basic
11,918,904

 
11,888,681

Diluted
15,373,450

 
15,343,226

NAREIT FFO attributable to Common Stockholders
 
 
 
Basic
$
0.96

 
$
1.01

Diluted (1)
$
0.89

 
$
0.93

FFO attributable to Common Stockholders
 
 
 
Basic
$
0.96

 
$
1.06

Diluted (1)
$
0.89

 
$
0.96

AFFO attributable to Common Stockholders
 
 
 
Basic
$
1.01

 
$
1.12

Diluted (2)
$
0.91

 
$
1.00

(1) Diluted per share calculations include dilutive adjustments for convertible note interest expense, discount amortization and deferred debt issuance amortization.
(2) Diluted per share calculations include a dilutive adjustment for convertible note interest expense.