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CorEnergy Announces Second Quarter 2020 Results, Dividends

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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/

Contacts

CorEnergy Infrastructure Trust, Inc.
Investor Relations
Debbie Hagen or Matt Kreps
877-699-CORR (2677)
info@corenergy.reit