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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200803005673/en/
CorEnergy Infrastructure Trust, Inc. Investor Relations Debbie
Hagen or Matt Kreps 877-699-CORR (2677) info@corenergy.reit
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