Australia markets open in 9 hours 46 minutes
  • ALL ORDS

    7,258.90
    -23.20 (-0.32%)
     
  • AUD/USD

    0.7726
    -0.0002 (-0.03%)
     
  • ASX 200

    6,997.50
    -20.30 (-0.29%)
     
  • OIL

    61.93
    -0.74 (-1.18%)
     
  • GOLD

    1,796.60
    +18.20 (+1.02%)
     
  • BTC-AUD

    71,747.22
    -1,052.91 (-1.45%)
     
  • CMC Crypto 200

    1,274.03
    +11.07 (+0.88%)
     

CorEnergy Announces 2020 Results and Affirms Outlook

·17-min read

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/

Contacts

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