CorEnergy Infrastructure Trust, Inc. (NYSE: CORR, CORRPrA)
(“CorEnergy” or the “Company”) today announced financial results
for the fourth quarter 2020 and fiscal year ended December 31,
2020.
Fourth Quarter and Fiscal Year 2020 Performance
Summary
Fourth Quarter and Fiscal Year 2020 financial highlights are as
follows:
For the Three Months
Ended
For the Year Ended
December 31, 2020
December 31, 2020
Per Share
Per Share
Total
Basic
Diluted
Total
Basic
Diluted
Net Loss (Attributable to Common
Stockholders)1
$
(4,981,352
)
$
(0.36
)
$
(0.36
)
$
(315,257,388
)
$
(23.09
)
$
(23.09
)
NAREIT Funds from Operations (NAREIT
FFO)1
$
(2,923,236
)
$
(0.21
)
$
(0.21
)
$
(14,800,449
)
$
(1.08
)
$
(1.08
)
Funds From Operations (FFO)1
$
(2,912,869
)
$
(0.21
)
$
(0.21
)
$
(14,939,667
)
$
(1.09
)
$
(1.09
)
Adjusted Funds From Operations (AFFO)1
$
(1,881,530
)
$
(0.14
)
$
(0.14
)
$
7,076,213
$
0.52
$
0.52
Dividends Declared to Common
Stockholders
$
0.05
$
0.90
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 Loss Attributable to CorEnergy Stockholders are
included at the end of this press release. See Note 1 for
additional information.
Recent Developments
On February 4, 2021, CorEnergy announced the acquisition of
Crimson Midstream Holdings, LLC (“Crimson”), a California Public
Utilities Commission (CPUC) regulated crude oil pipeline owner and
operator, for $350.0 million. The acquired assets include four
critical infrastructure pipeline systems spanning approximately
2,000 miles across northern, central and southern California,
connecting desirable native California crude production to in-state
refineries producing state-mandated specialized fuel blends, among
other products. The acquired assets qualify for REIT treatment
under established IRS regulations and CorEnergy’s Private Letter
Ruling (PLR). As a result of the acquisition, CorEnergy now owns
six pipeline systems in three markets serving diversified,
creditworthy shippers.
"CorEnergy's acquisition of Crimson California creates a
diversified, utility-like energy infrastructure platform serving
diverse, credit-worthy customers," said Dave Schulte, Chairman and
Chief Executive Officer. "Combined with our stable MoGas and Omega
assets, which opened a new interconnect with the Spire STL Pipeline
in the fourth quarter, CorEnergy is now positioned to operate or
lease long-lived critical energy infrastructure in highly regulated
oil and natural gas markets with the ability to adapt and expand
our assets as the energy market transforms itself in the coming
decades. We see additional upside opportunities as both consumers
and producers return to pre-COVID-19 activity levels, through
commercial growth opportunities leveraging Crimson’s leading
position in the market and extensive real property ownership for
renewable fuel storage and distribution, carbon capture potential,
and the shift to lower carbon power sourcing. We have created a
flexible platform to now focus on acquiring complementary assets to
provide scale and diversification across the value chain and
geographically. We believe this evolution of our strategy best
serves our stakeholders by enabling CorEnergy to provide an initial
stable common stock dividend with multiple avenues for growth."
CorEnergy has also agreed to internalize (the “Internalization”)
its REIT manager, Corridor InfraTrust Management, LLC (the
“Manager”), for consideration of $16.9 million, subject to
stockholder approval. As a result of the Internalization, CorEnergy
anticipates that the pro forma management fees of approximately
$5.5 million will be replaced with an estimated $3.4 million
annualized SG&A expenses.
Outlook
CorEnergy provided the following outlook subsequent to its
February 4, 2021 acquisition of Crimson California.
- Revenue expected to be $130-$135 million annualizing both
CORR’s legacy assets and Crimson’s assets for 2021
- Internalization of manager expected to result in approximately
$2.0 million of annualized SG&A savings
- Expected run rate combined EBITDA of $50-$52 million on an
annualized basis beginning in Q2 2021
- Maintenance capital expenditures expected to be in the range of
$10-$11 million in 2021
- Initial annualized dividend of $0.20, targeting $0.35-$0.40
upon a return to pre-COVID market conditions in California, with
near term commercial opportunities providing upside
- Total leverage at closing of 4.4x expected EBITDA; senior
secured leverage of 2.1x
- Term Loan amortization scheduled at $8.0 million per year
facilitates deleveraging to a target of < 4.0x by FYE 2022 to
create financial flexibility and reduce risk
Dividend Declaration
Common Stock: A fourth quarter 2020
dividend of $0.05 per share was declared for CorEnergy’s common
stock. The dividend was paid on February 26, 2021, to stockholders
of record on February 12, 2021.
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, was paid on February 26,
2021, to stockholders of record on February 12, 2021.
Fiscal Year 2020 Earnings Conference Call
CorEnergy will host a conference call on Thursday, March 4,
2021, 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 9:00 a.m. Central
Time on April 4, 2021 by dialing 877-481-4010 (for international,
1-919-882-2331). The Conference ID is 58659. 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 that owns and operates or leases
regulated natural gas transmission and distribution and crude oil
gathering, storage and transmission pipelines and associated
rights-of-way. 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, accretion of asset retirement obligation, non-cash costs
associated with derivative instruments, (gain) loss on the
settlement of ARO, 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. Additionally, to the extent that
forward-looking non-GAAP financial measures are provided, including
EBITDA, they are presented on a non-GAAP basis without
reconciliations of such forward-looking non-GAAP measures due to
the inherent difficulty in forecasting and quantifying certain
amounts that are necessary for such reconciliation.
Consolidated Balance
Sheets
December 31, 2020
December 31, 2019
Assets
Leased property, net of accumulated
depreciation of $6,832,167 and $105,825,816
$
64,938,010
$
379,211,399
Property and equipment, net of accumulated
depreciation of $22,580,810 and $19,304,610
106,224,598
106,855,677
Financing notes and related accrued
interest receivable, net of reserve of $600,000 and $600,000
1,209,736
1,235,000
Cash and cash equivalents
99,596,907
120,863,643
Deferred rent receivable
—
29,858,102
Accounts and other receivables
3,675,977
4,143,234
Deferred costs, net of accumulated
amortization of $2,130,334 and $1,956,710
1,077,883
2,171,969
Prepaid expenses and other assets
2,228,623
804,341
Deferred tax asset, net
4,282,576
4,593,561
Goodwill
1,718,868
1,718,868
Total Assets
$
284,953,178
$
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 $3,041,870 and $3,768,504
115,008,130
118,323,496
Asset retirement obligation
8,762,579
8,044,200
Accounts payable and other accrued
liabilities
4,685,288
6,000,981
Management fees payable
971,626
1,669,950
Unearned revenue
6,125,728
6,891,798
Total Liabilities
$
135,553,351
$
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 December 31, 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
December 31, 2020 and December 31, 2019 (100,000,000 shares
authorized)
13,652
13,639
Additional paid-in capital
339,742,380
360,844,497
Retained deficit
(315,626,555)
(9,611,872)
Total Equity
149,399,827
476,739,439
Total Liabilities and Equity
$
284,953,178
$
651,455,794
Consolidated Statements of
Operations
(Unaudited)
For the Three Months Ended
December 31,
For the Years Ended December
31,
2020
2019
2020
2019
Revenue
Lease revenue
$
30,125
$
16,712,017
$
21,351,123
$
67,050,506
Deferred rent receivable write-off
—
—
(30,105,820
)
—
Transportation and distribution
revenue
5,815,990
4,970,173
19,972,351
18,778,237
Financing revenue
32,098
27,295
120,417
116,827
Total Revenue
5,878,213
21,709,485
11,338,071
85,945,570
Expenses
Transportation and distribution
expenses
2,023,900
1,376,152
6,059,707
5,242,244
General and administrative
2,036,287
2,492,346
12,231,922
10,596,848
Depreciation, amortization and ARO
accretion expense
2,174,630
5,646,254
13,654,429
22,581,942
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
—
Total Expenses
6,234,817
9,514,752
319,210,281
38,421,034
Operating Income (Loss)
$
(356,604
)
$
12,194,733
$
(307,872,210
)
$
47,524,536
Other Income (Expense)
Net distributions and other income
$
21,937
$
426,797
$
471,449
$
1,328,853
Interest expense
(2,247,994
)
(2,996,512
)
(10,301,644
)
(10,578,711
)
Gain (loss) on extinguishment of debt
—
—
11,549,968
(33,960,565
)
Total Other Income (Expense)
(2,226,057
)
(2,569,715
)
1,719,773
(43,210,423
)
Income (loss) before income
taxes
(2,582,661
)
9,625,018
(306,152,437
)
4,314,113
Taxes
Current tax expense (benefit)
3,662
(472,498
)
(395,843
)
(120,024
)
Deferred tax expense
85,357
289,788
310,985
354,642
Income tax expense (benefit),
net
89,019
(182,710
)
(84,858
)
234,618
Net Income (Loss) attributable to
CorEnergy Stockholders
$
(2,671,680
)
$
9,807,728
$
(306,067,579
)
$
4,079,495
Preferred dividend requirements
2,309,672
2,313,780
9,189,809
9,255,468
Net Income (Loss) attributable to
Common Stockholders
$
(4,981,352
)
$
7,493,948
$
(315,257,388
)
$
(5,175,973
)
Earnings (Loss) Per Common Share:
Basic
$
(0.36
)
$
0.55
$
(23.09
)
$
(0.40
)
Diluted
$
(0.36
)
$
0.55
$
(23.09
)
$
(0.40
)
Weighted Average Shares of Common Stock
Outstanding:
Basic
13,651,521
13,549,797
13,650,718
13,041,613
Diluted
13,651,521
13,549,797
13,650,718
13,041,613
Dividends declared per share
$
0.050
$
0.750
$
0.900
$
3.000
Consolidated Statements of
Cash Flow
For the Years Ended December
31,
2020
2019
Operating Activities
Net income (loss)
$
(306,067,579
)
$
4,079,495
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Deferred income tax, net
310,985
354,642
Depreciation, amortization and ARO
accretion
14,924,464
23,808,083
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
)
33,960,565
Gain on sale of equipment
(13,683
)
(7,390
)
Changes in assets and liabilities:
Increase in deferred rent receivables
(247,718
)
(3,915,347
)
Decrease in accounts and other
receivables
467,257
940,009
Increase in financing note accrued
interest receivable
(18,069
)
—
Increase in prepaid expenses and other
assets
(1,424,332
)
(136,108
)
Decrease in management fee payable
(698,324
)
(161,663
)
Increase (decrease) in accounts payable
and other accrued liabilities
(1,903,936
)
2,517,069
Increase (decrease) in unearned
revenue
(766,070
)
339,749
Net cash provided by operating
activities
$
10,383,070
$
61,779,104
Investing Activities
Purchases of property and equipment,
net
(2,186,155
)
(372,934
)
Proceeds from sale of property and
equipment
15,000
7,000
Principal payment on financing note
receivable
43,333
65,000
Principal payment on note receivable
—
5,000,000
Net cash provided by (used in) investing
activities
$
(2,127,822
)
$
4,699,066
Financing Activities
Debt financing costs
—
(372,759
)
Cash paid for extinguishment of
convertible notes
—
(78,939,743
)
Cash paid for maturity of convertible
notes
(1,676,000
)
—
Cash paid for repurchase of convertible
notes
(1,316,250
)
—
Cash paid for settlement of Pinedale
Secured Credit Facility
(3,074,572
)
—
Net offering proceeds on convertible
debt
—
116,355,125
Repurchases of Series A preferred
stock
(161,997
)
(60,550
)
Dividends paid on Series A preferred
stock
(9,242,797
)
(9,255,121
)
Dividends paid on common stock
(12,286,368
)
(39,100,656
)
Principal payments on secured credit
facilities
(1,764,000
)
(3,528,000
)
Net cash used in financing activities
$
(29,521,984
)
$
(14,901,704
)
Net change in cash and cash
equivalents
$
(21,266,736
)
$
51,576,466
Cash and cash equivalents at beginning of
period
120,863,643
69,287,177
Cash and cash equivalents at end of
period
$
99,596,907
$
120,863,643
Supplemental Disclosure of Cash Flow
Information
Interest paid
$
9,272,409
$
6,834,439
Income taxes paid (net of refunds)
(466,236
)
89,433
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
591,421
—
Non-Cash Financing Activities
Proceeds from sale of leased property used
in settlement of Pinedale Secured Credit Facility
$
(18,000,000
)
$
—
Reinvestment of distributions by common
stockholders in additional common shares
—
403,831
Common stock issued upon exchange and
conversion of convertible notes
419,129
66,064,966
NAREIT FFO, FFO Adjusted for
Securities Investment and AFFO Reconciliation (Unaudited)
For the Three Months Ended
December 31,
For the Years Ended December
31,
2020
2019
2020
2019
Net Income (Loss) attributable to
CorEnergy Stockholders
$
(2,671,680
)
$
9,807,728
$
(306,067,579
)
$
4,079,495
Less:
Preferred Dividend Requirements
2,309,672
2,313,780
9,189,809
9,255,468
Net Income (Loss) attributable to
Common Stockholders
$
(4,981,352
)
$
7,493,948
$
(315,257,388
)
$
(5,175,973
)
Add:
Depreciation
2,050,475
5,512,279
13,131,468
22,046,041
Amortization of deferred lease costs
7,641
22,983
61,248
91,932
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
—
NAREIT funds from operations (NAREIT
FFO)
$
(2,923,236
)
$
13,029,210
$
(14,800,449
)
$
16,962,000
Less:
Income tax (expense) benefit from
investment securities
(10,367
)
216,494
139,218
12,584
Funds from operations adjusted for
securities investments (FFO)
$
(2,912,869
)
$
12,812,716
$
(14,939,667
)
$
16,949,416
Add:
Deferred rent receivable write-off
—
—
30,105,820
—
(Gain) loss of extinguishment of debt
—
—
(11,549,968
)
33,960,565
Transaction costs
528,113
28,115
1,673,920
185,495
Amortization of debt issuance costs
308,060
333,055
1,270,035
1,226,139
Accretion of asset retirement
obligation
116,514
110,992
461,713
443,969
Income tax expense
78,652
33,784
54,360
247,202
Adjusted funds from operations
(AFFO)
$
(1,881,530
)
$
13,318,662
$
7,076,213
$
53,012,786
Weighted Average Shares of Common Stock
Outstanding:
Basic
13,651,521
13,549,797
13,650,718
13,041,613
Diluted
13,651,521
16,102,310
13,650,718
15,425,747
NAREIT FFO attributable to Common
Stockholders
Basic
$
(0.21
)
$
0.96
$
(1.08
)
$
1.30
Diluted (1)
$
(0.21
)
$
0.94
$
(1.08
)
$
1.30
FFO attributable to Common
Stockholders
Basic
$
(0.21
)
$
0.95
$
(1.09
)
$
1.30
Diluted (1)
$
(0.21
)
$
0.92
$
(1.09
)
$
1.30
AFFO attributable to Common
Stockholders
Basic
$
(0.14
)
$
0.98
$
0.52
$
4.06
Diluted (2)
$
(0.14
)
$
0.94
$
0.52
$
3.83
(1)
For the three months ended
December 31, 2020 and the years ended December 31, 2020 and 2019,
diluted per share calculations exclude dilutive adjustments for
convertible note interest expense, discount amortization and
deferred debt issuance amortization because such impact is
antidilutive. The three months ended December 31, 2019 includes
these dilutive adjustments. For periods presented without per share
dilution, the number of weighted average diluted shares is equal to
the number of weighted average basic shares presented.
(2)
For the three months and year
ended December 31, 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/20210303005976/en/
CorEnergy Infrastructure Trust, Inc. Investor Relations Debbie
Hagen or Matt Kreps 877-699-CORR (2677) info@corenergy.reit
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