CorEnergy Infrastructure Trust, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Leased Properties and Leases (Tables)

Leased Properties and Leases (Tables)

12 Months Ended

Dec. 31, 2016

Significant leased properties, major tenants and lease terms

The following table summarizes the significant leased properties, major tenants and lease terms:



Summary of Leased Properties, Major Tenants and Lease Terms
Property	Grand Isle Gathering System	Pinedale LGS⁽¹⁾	Portland Terminal Facility
Location	Gulf of Mexico/Louisiana	Pinedale, WY	Portland, OR
Tenant	Energy XXI GIGS Services, LLC	Ultra Wyoming LGS, LLC	Arc Terminals Holdings LLC
Asset Description	Approximately 153 miles of offshore pipeline with total capacity of 120 thousand Bbls/d, including a 16-acre onshore terminal and saltwater disposal system	Approximately 150 miles of pipelines and four central storage facilities	A 42-acre rail and marine facility property adjacent to the Willamette River with 84 tanks and total storage capacity of approximately 1.5 million barrels
Date Acquired	June 2015	December 2012	January 2014
Initial Lease Term	11 years	15 years	15 years
Renewal Option	equal to the lesser of 9-years or 75 percent of the remaining useful life	5-year terms	5-year terms
Current Monthly Rent Payments	7/1/15 - 6/30/16: $2,625,417 7/1/16 - 6/30/17: $2,826,250	$1,723,833⁽²⁾	$513,355
Estimated Useful Life	27 years	26 years	30 years
(1) Non-Controlling Interest Partner, Prudential, funded a portion of the Pinedale LGS acquisition and, as a limited partner, holds 18.95 percent of the economic interest in Pinedale LP. The general partner, Pinedale GP, a wholly-owned subsidiary of the Company, holds the remaining 81.05 percent of the economic interest.
(2) Monthly rent payments will increase to $1,741,933 beginning January 1, 2017.

Schedule of future minimum lease payments

The future contracted minimum rental receipts for all leases as of December 31, 2016, are as follows:



Future Minimum Lease Receipts ⁽¹⁾
Years Ending December 31,	Amount
2017	$	61,201,298
2018	61,356,965
2019	63,724,621
2020	70,890,429
2021	77,071,774
Thereafter	376,628,521
Total	$	710,873,608
⁽¹⁾ Future minimum lease receipts include base rents for the Portland Terminal Facility through its initial 15-year term. The lessee has a purchase option on the facility beginning in February 2017, which it can exercise with 90-days notice, as well as lease termination options on the fifth and tenth anniversaries of the lease. If exercised, the purchase option and termination options are subject to additional payment provisions and termination fees prescribed under the lease.

Schedule of Significant Leases

The table below displays the Company's individually significant leases as a percentage of total leased properties and total lease revenues for the periods presented:



	As a Percentage of ⁽¹⁾
	Leased Properties		Lease Revenues
	As of December 31,		For the Years Ended December 31,
	2016	2015	2016	2015	2014
Pinedale LGS	39.8%	40.0%	30.4%	42.9%	71.9%
Grand Isle Gathering System	50.0%	50.1%	59.8%	42.3%	—
Portland Terminal Facility	9.9%	9.6%	9.7%	13.3%	19.0%
Public Service of New Mexico⁽²⁾	—	—	—	1.3%	9.1%
(1) Insignificant leases are not presented; thus percentages may not sum to 100%.
(2)The Public Service of New Mexico lease terminated on April 1, 2015.

Schedule of Depreciation and Amortization

The following table reflects the depreciation and amortization included in the accompanying Consolidated Statements of Income associated with our leases and leased properties:



	For the Years Ended December 31,
	2016		2015		2014
Depreciation Expense
GIGS	$	8,605,506	$	4,317,769	$	—
Pinedale	8,869,440		8,869,440		8,869,445
Portland Terminal Facility	843,084		1,235,369		1,390,236
Eastern Interconnect Project	—		569,670		2,278,680
United Property Systems	32,424		29,700		3,011
Total Depreciation Expense	$	18,350,454	$	15,021,948	$	12,541,372
Amortization Expense - Deferred Lease Costs
GIGS	$	30,564	$	15,130	$	—
Pinedale	61,368		61,368		61,369
Total Amortization Expense - Deferred Lease Costs	$	91,932	$	76,498	$	61,369
ARO Accretion Expense
GIGS	$	726,664	$	339,042	$	—
Total ARO Accretion Expense	$	726,664	$	339,042	$	—

Schedule of Deferred Lease Costs

The following table reflects the deferred costs that are included in the accompanying Consolidated Balance Sheets associated with our leased properties:



	December 31, 2016		December 31, 2015
Net Deferred Lease Costs
GIGS	$	290,447	$	321,011
Pinedale	673,085		734,454
Total Deferred Lease Costs, net	$	963,532	$	1,055,465

- Definition

Tabular disclosure of a lessee's leasing arrangements including: (1) the basis on which contingent rental payments are determined, (2) the existence and terms of renewal or purchase options and escalation clauses, (3) restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leasing, (4) rent holidays, rent concessions, or leasehold improvement incentives and unusual provisions or conditions. Disclosure may also include the specific period used to amortize material leasehold improvements made at the inception of the lease or during the lease term. Additionally, for operating leases having initial or remaining noncancelable lease terms in excess of one year: (a) future minimum rental payments required as of the date of the latest balance sheet presented, in the aggregate and for each of the five succeeding fiscal years, (b) the total of minimum rentals to be received in the future under noncancelable subleases as of the date of the latest balance sheet presented, and (c) for all operating leases, rental expense for each period for which an income statement is presented, with separate amounts for minimum rentals, contingent rentals, and sublease rentals. Rental payments under leases with terms of a month or less that were not renewed need not be included.

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