CorEnergy Infrastructure Trust, Inc. (“CorEnergy” or the “Company”) today announced financial results for the fourth quarter 2019 and fiscal year ended December 31, 2019.
Fourth Quarter and Fiscal Year 2019 Performance Summary
Fourth Quarter and Fiscal Year 2019 financial highlights are as follows:
For the Three Months Ended | For the Year Ended | ||||||||||||||||||||||
December 31, 2019 | December 31, 2019 | ||||||||||||||||||||||
Per Share | Per Share | ||||||||||||||||||||||
Total | Basic | Diluted | Total | Basic | Diluted | ||||||||||||||||||
Net Income (Loss) (Attributable to Common Stockholders)1 | $ | 7,493,948 | $ | 0.55 | $ | 0.55 | $ | (5,175,973 | ) | $ | (0.40 | ) | $ | (0.40 | ) | ||||||||
NAREIT Funds from Operations (NAREIT FFO)1 | $ | 13,006,227 | $ | 0.96 | $ | 0.93 | $ | 16,870,068 | $ | 1.29 | $ | 1.29 | |||||||||||
Funds From Operations (FFO)1 | $ | 12,789,733 | $ | 0.94 | $ | 0.92 | $ | 16,857,484 | $ | 1.29 | $ | 1.29 | |||||||||||
Adjusted Funds From Operations (AFFO)1 | $ | 13,318,662 | $ | 0.98 | $ | 0.94 | $ | 53,012,786 | $ | 4.06 | $ | 3.83 | |||||||||||
Dividends Declared to Common Stockholders | $ | 0.75 | $ | 3.00 | |||||||||||||||||||
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.
Recent Developments
- Maintained dividend: Declared common stock dividend of $0.75 per share ($3.00 annualized) for the fourth quarter 2019, in line with the previous 17 quarterly dividends
“We took steps throughout 2019 to enhance our liquidity and reduce our weighted average cost of capital, which also had the effect of lowering our interest cost and increasing interest income,” said CorEnergy Chief Executive Officer Dave Schulte. “These actions better position us for potential growth transactions, even as producers are finding fewer financing options in the traditional capital markets. We are presently evaluating prospective assets as companies across the energy sector are increasingly turning to alternative financing sources.”
Dividend Declaration
Common Stock: A fourth quarter 2019 dividend of $0.75 per share (or $3.00 per share annualized) was declared for CorEnergy’s common stock. The dividend is payable on February 28, 2020, to stockholders of record on February 14, 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, is payable on February 28, 2020, to stockholders of record on February 14, 2020.
Fiscal Year 2019 Earnings Conference Call
CorEnergy will host a conference call on Thursday, February 27, 2020, at 9:00 a.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 March 27, 2020 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 (REIT) that owns critical energy assets, such as pipelines, storage terminals, and transmission and distribution assets. We receive long-term contracted revenue from operators of our assets, primarily under triple-net participating leases. 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 (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, amortization of above market leases, income tax expense (benefit) unrelated to securities investments, 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), 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 | |||||||
December 31, 2019 | December 31, 2018 | ||||||
Assets | |||||||
Leased property, net of accumulated depreciation of $105,825,816 and $87,154,095 | $ | 379,211,399 | $ | 398,214,355 | |||
Property and equipment, net of accumulated depreciation of $19,304,610 and $15,969,346 | 106,855,677 | 109,881,552 | |||||
Financing notes and related accrued interest receivable, net of reserve of $600,000 and $600,000 | 1,235,000 | 1,300,000 | |||||
Note receivable | — | 5,000,000 | |||||
Cash and cash equivalents | 120,863,643 | 69,287,177 | |||||
Deferred rent receivable | 29,858,102 | 25,942,755 | |||||
Accounts and other receivables | 4,143,234 | 5,083,243 | |||||
Deferred costs, net of accumulated amortization of $1,956,710 and $1,290,236 | 2,171,969 | 2,838,443 | |||||
Prepaid expenses and other assets | 804,341 | 668,584 | |||||
Deferred tax asset, net | 4,593,561 | 4,948,203 | |||||
Goodwill | 1,718,868 | 1,718,868 | |||||
Total Assets | $ | 651,455,794 | $ | 624,883,180 | |||
Liabilities and Equity | |||||||
Secured credit facilities, net of debt issuance costs of $158,070 and $210,891 | 33,785,930 | 37,261,109 | |||||
Unsecured convertible senior notes, net of discount and debt issuance costs of $3,768,504 and $1,180,729 | 118,323,496 | 112,777,271 | |||||
Asset retirement obligation | 8,044,200 | 7,956,343 | |||||
Accounts payable and other accrued liabilities | 6,000,981 | 3,493,490 | |||||
Management fees payable | 1,669,950 | 1,831,613 | |||||
Unearned revenue | 6,891,798 | 6,552,049 | |||||
Total Liabilities | $ | 174,716,355 | $ | 169,871,875 | |||
Equity | |||||||
Series A Cumulative Redeemable Preferred Stock 7.375%, $125,493,175 and $125,555,675 liquidation preference ($2,500 per share, $0.001 par value), 10,000,000 authorized; 50,197 and 50,222 issued and outstanding at December 31, 2019 and December 31, 2018, respectively | $ | 125,493,175 | $ | 125,555,675 | |||
Capital stock, non-convertible, $0.001 par value; 13,638,916 and 11,960,225 shares issued and outstanding at December 31, 2019 and December 31, 2018 (100,000,000 shares authorized) | 13,639 | 11,960 | |||||
Additional paid-in capital | 360,844,497 | 320,295,969 | |||||
Retained earnings (deficit) | (9,611,872 | ) | 9,147,701 | ||||
Total Equity | 476,739,439 | 455,011,305 | |||||
Total Liabilities and Equity | $ | 651,455,794 | $ | 624,883,180 | |||
Consolidated Statements of Income and Comprehensive Income | |||||||||||||||
(Unaudited) | |||||||||||||||
For the Three Months Ended December 31, | For the Years Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue | |||||||||||||||
Lease revenue | $ | 16,712,017 | $ | 18,487,661 | $ | 67,050,506 | $ | 72,747,362 | |||||||
Transportation and distribution revenue | 4,970,173 | 4,412,378 | 18,778,237 | 16,484,236 | |||||||||||
Financing revenue | 27,295 | — | 116,827 | — | |||||||||||
Total Revenue | 21,709,485 | 22,900,039 | 85,945,570 | 89,231,598 | |||||||||||
Expenses | |||||||||||||||
Transportation and distribution expenses | 1,376,152 | 1,861,329 | 5,242,244 | 7,210,748 | |||||||||||
General and administrative | 2,492,346 | 4,161,533 | 10,596,848 | 13,042,847 | |||||||||||
Depreciation, amortization and ARO accretion expense | 5,646,254 | 6,078,582 | 22,581,942 | 24,947,453 | |||||||||||
Provision for loan gain | — | (536,867 | ) | — | (36,867 | ) | |||||||||
Total Expenses | 9,514,752 | 11,564,577 | 38,421,034 | 45,164,181 | |||||||||||
Operating Income | $ | 12,194,733 | $ | 11,335,462 | $ | 47,524,536 | $ | 44,067,417 | |||||||
Other Income (Expense) | |||||||||||||||
Net distributions and other income | $ | 426,797 | $ | 41,503 | $ | 1,328,853 | $ | 106,795 | |||||||
Net realized and unrealized loss on other equity securities | — | (48,028 | ) | — | (1,845,309 | ) | |||||||||
Interest expense | (2,996,512 | ) | (3,168,583 | ) | (10,578,711 | ) | (12,759,010 | ) | |||||||
Gain on the sale of leased property, net | — | 11,723,257 | — | 11,723,257 | |||||||||||
Loss on extinguishment of debt | — | — | (33,960,565 | ) | — | ||||||||||
Total Other Income (Expense) | (2,569,715 | ) | 8,548,149 | (43,210,423 | ) | (2,774,267 | ) | ||||||||
Income before income taxes | 9,625,018 | 19,883,611 | 4,314,113 | 41,293,150 | |||||||||||
Taxes | |||||||||||||||
Current tax benefit | (472,498 | ) | (530,659 | ) | (120,024 | ) | (585,386 | ) | |||||||
Deferred tax expense (benefit) | 289,788 | (81,725 | ) | 354,642 | (1,833,340 | ) | |||||||||
Income tax expense (benefit), net | (182,710 | ) | (612,384 | ) | 234,618 | (2,418,726 | ) | ||||||||
Net Income attributable to CorEnergy Stockholders | $ | 9,807,728 | $ | 20,495,995 | $ | 4,079,495 | $ | 43,711,876 | |||||||
Preferred dividend requirements | 2,313,780 | 2,357,752 | 9,255,468 | 9,548,377 | |||||||||||
Net Income (Loss) attributable to Common Stockholders | $ | 7,493,948 | $ | 18,138,243 | $ | (5,175,973 | ) | $ | 34,163,499 | ||||||
Earnings (Loss) Per Common Share: | |||||||||||||||
Basic | $ | 0.55 | $ | 1.52 | $ | (0.40 | ) | $ | 2.86 | ||||||
Diluted | $ | 0.55 | $ | 1.32 | $ | (0.40 | ) | $ | 2.79 | ||||||
Weighted Average Shares of Common Stock Outstanding: | |||||||||||||||
Basic | 13,549,797 | 11,953,098 | 13,041,613 | 11,935,021 | |||||||||||
Diluted | 13,549,797 | 15,406,371 | 13,041,613 | 15,389,180 | |||||||||||
Dividends declared per share | $ | 0.750 | $ | 0.750 | $ | 3.000 | $ | 3.000 | |||||||
Consolidated Statements of Cash Flow | |||||||
For the Years Ended December 31, | |||||||
2019 | 2018 | ||||||
Operating Activities | |||||||
Net Income | $ | 4,079,495 | $ | 43,711,876 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Deferred income tax, net | 354,642 | (1,845,710 | ) | ||||
Depreciation, amortization and ARO accretion | 23,808,083 | 26,361,907 | |||||
Gain on sale of leased property, net | — | (11,723,257 | ) | ||||
Provision for loan gain | — | (36,867 | ) | ||||
Loss on extinguishment of debt | 33,960,565 | — | |||||
Gain on sale of equipment | (7,390 | ) | (8,416 | ) | |||
Net realized and unrealized loss on other equity securities | — | 1,845,309 | |||||
Loss on settlement of asset retirement obligation | — | 310,941 | |||||
Common stock issued under directors' compensation plan | — | 67,500 | |||||
Changes in assets and liabilities: | |||||||
Increase in deferred rent receivables | (3,915,347 | ) | (7,038,848 | ) | |||
(Increase) decrease in accounts and other receivables | 940,009 | (1,297,207 | ) | ||||
(Increase) decrease in prepaid expenses and other assets | (136,108 | ) | 73,505 | ||||
Increase (decrease) in management fee payable | (161,663 | ) | 83,187 | ||||
Increase in accounts payable and other accrued liabilities | 2,517,069 | 476,223 | |||||
Decrease in income tax liability | — | (2,204,626 | ) | ||||
Increase (decrease) in unearned revenue | 339,749 | (152,777 | ) | ||||
Net cash provided by operating activities | $ | 61,779,104 | $ | 48,622,740 | |||
Investing Activities | |||||||
Proceeds from the sale of leased property | — | 55,553,975 | |||||
Proceeds from sale of other equity securities | — | 449,067 | |||||
Purchases of property and equipment, net | (372,934 | ) | (105,357 | ) | |||
Proceeds from asset sale | 7,000 | 17,999 | |||||
Principal payment on financing note receivable | 65,000 | 236,867 | |||||
Principal payment on note receivable | 5,000,000 | — | |||||
Return of capital on distributions received | — | 663,939 | |||||
Net cash provided by investing activities | $ | 4,699,066 | $ | 56,816,490 | |||
Financing Activities | |||||||
Debt financing costs | (372,759 | ) | (264,010 | ) | |||
Cash paid for extinguishment of convertible notes | (78,939,743 | ) | — | ||||
Net offering proceeds on convertible debt | 116,355,125 | — | |||||
Repurchases of Series A preferred stock | (60,550 | ) | (4,275,553 | ) | |||
Dividends paid on Series A preferred stock | (9,255,121 | ) | (9,587,500 | ) | |||
Dividends paid on common stock | (39,100,656 | ) | (34,284,059 | ) | |||
Principal payments on secured credit facilities | (3,528,000 | ) | (3,528,000 | ) | |||
Net cash used in financing activities | $ | (14,901,704 | ) | $ | (51,939,122 | ) | |
Net Change in Cash and Cash Equivalents | $ | 51,576,466 | $ | 53,500,108 | |||
Cash and Cash Equivalents at beginning of period | 69,287,177 | 15,787,069 | |||||
Cash and Cash Equivalents at end of period | $ | 120,863,643 | $ | 69,287,177 | |||
Supplemental Disclosure of Cash Flow Information | |||||||
Interest paid | $ | 6,834,439 | $ | 11,200,835 | |||
Income taxes paid (net of refunds) | 89,433 | 2,136,563 | |||||
Non-Cash Investing Activities | |||||||
Note receivable in consideration of the sale of leased property | $ | — | $ | 5,000,000 | |||
Non-Cash Financing Activities | |||||||
Change in accounts payable and accrued expenses related to debt financing costs | $ | — | $ | (255,037 | ) | ||
Reinvestment of distributions by common stockholders in additional common shares | 403,831 | 1,509,830 | |||||
Common stock issued upon exchange and conversion of convertible notes | 66,064,966 | 42,654 | |||||
NAREIT FFO, FFO Adjusted for Securities Investment and AFFO Reconciliation (Unaudited) | |||||||||||||||
For the Three Months Ended December 31, | For the Years Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net Income attributable to CorEnergy Stockholders | $ | 9,807,728 | $ | 20,495,995 | $ | 4,079,495 | $ | 43,711,876 | |||||||
Less: | |||||||||||||||
Preferred Dividend Requirements | 2,313,780 | 2,357,752 | 9,255,468 | 9,548,377 | |||||||||||
Net Income (Loss) attributable to Common Stockholders | $ | 7,493,948 | $ | 18,138,243 | $ | (5,175,973 | ) | $ | 34,163,499 | ||||||
Add: | |||||||||||||||
Depreciation | 5,512,279 | 5,939,821 | 22,046,041 | 24,355,959 | |||||||||||
Less: | |||||||||||||||
Gain on the sale of leased property, net | — | 11,723,257 | — | 11,723,257 | |||||||||||
NAREIT funds from operations (NAREIT FFO) | $ | 13,006,227 | $ | 12,354,807 | $ | 16,870,068 | $ | 46,796,201 | |||||||
Add: | |||||||||||||||
Distributions received from investment securities | 426,797 | 41,503 | 1,328,853 | 106,795 | |||||||||||
Net realized and unrealized loss on other equity securities | — | 48,028 | — | 1,845,309 | |||||||||||
Less: | |||||||||||||||
Net distributions and other income | 426,797 | 41,503 | 1,328,853 | 106,795 | |||||||||||
Income tax benefit from investment securities | 216,494 | 190,792 | 12,584 | 682,199 | |||||||||||
Funds from operations adjusted for securities investments (FFO) | $ | 12,789,733 | $ | 12,212,043 | $ | 16,857,484 | $ | 47,959,311 | |||||||
Add: | |||||||||||||||
Loss of extinguishment of debt | — | — | 33,960,565 | — | |||||||||||
Transaction costs | 28,115 | 397,520 | 185,495 | 521,311 | |||||||||||
Amortization of debt issuance costs | 333,055 | 353,637 | 1,226,139 | 1,414,457 | |||||||||||
Amortization of deferred lease costs | 22,983 | 22,983 | 91,932 | 91,932 | |||||||||||
Accretion of asset retirement obligation | 110,992 | 115,778 | 443,969 | 499,562 | |||||||||||
Loss on settlement of ARO | — | 310,941 | — | 310,941 | |||||||||||
Less: | |||||||||||||||
Income tax (expense) benefit | (33,784 | ) | 421,592 | (247,202 | ) | 1,736,527 | |||||||||
Provision for loan gain | — | 536,867 | — | 36,867 | |||||||||||
Adjusted funds from operations (AFFO) | $ | 13,318,662 | $ | 12,454,443 | $ | 53,012,786 | $ | 49,024,120 | |||||||
Weighted Average Shares of Common Stock Outstanding: | |||||||||||||||
Basic | 13,549,797 | 11,953,098 | 13,041,613 | 11,935,021 | |||||||||||
Diluted | 16,102,310 | 15,406,371 | 15,425,747 | 15,389,180 | |||||||||||
NAREIT FFO attributable to Common Stockholders | |||||||||||||||
Basic | $ | 0.96 | $ | 1.03 | $ | 1.29 | $ | 3.92 | |||||||
Diluted (1) | $ | 0.93 | $ | 0.94 | $ | 1.29 | $ | 3.61 | |||||||
FFO attributable to Common Stockholders | |||||||||||||||
Basic | $ | 0.94 | $ | 1.02 | $ | 1.29 | $ | 4.02 | |||||||
Diluted (1) | $ | 0.92 | $ | 0.93 | $ | 1.29 | $ | 3.69 | |||||||
AFFO attributable to Common Stockholders | |||||||||||||||
Basic | $ | 0.98 | $ | 1.04 | $ | 4.06 | $ | 4.11 | |||||||
Diluted (2) | $ | 0.94 | $ | 0.94 | $ | 3.83 | $ | 3.70 | |||||||
(1) | The year ended December 31, 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 and 2018, as well as the year ended December 31, 2018, include 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) | 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/20200226005614/en/
Contacts:
Investor Relations
Debbie Hagen or Matt Kreps
877-699-CORR (2677)
info@corenergy.reit
