CorEnergy Releases Fiscal 2013 Results

KANSAS CITY, Mo.--()--CorEnergy Infrastructure Trust, Inc. (NYSE: CORR) (“CorEnergy” or the “Company”) today announced financial results for the year ended Dec. 31, 2013, and filed its annual report on Form 10-K with the Securities and Exchange Commission.

Recent Highlights and Subsequent Events

  • Made formal election to be treated as a REIT for the 2013 tax year
  • Further diversified asset portfolio with Portland Terminal Facility acquisition in January 2014
  • Expanded footprint in water gathering infrastructure with Black Bison transaction in March 2014
  • Reiterating intent to increase annualized distributions to $0.52, a 4% increase over prior run rate

“CorEnergy delivered another year of stable performance, reflecting the quality of our assets and providing shareholders with reliable cash flows. We executed on our infrastructure real asset strategy, securing CorEnergy’s tax treatment as a REIT in 2013,” said David Schulte, Chief Executive Officer of CorEnergy.

“Working collaboratively, our team raised capital efficiently and developed a pipeline of investments we believe will drive growth in 2014 and add value for CorEnergy shareholders. Building on our initial acquisition of the Pinedale liquids gathering system, we see an opportunity for our investment pipeline to include other water handling assets, for which our structure is particularly well suited.”

2013 Annual Performance Review

In 2013, the CorEnergy changed its fiscal year as part of its transition from a business development company to a REIT. As of Dec. 31, 2013, investments in securities of energy infrastructure companies represented less than 10 percent of the Company’s total assets. CorEnergy is focused on identifying and acquiring real property assets in the U.S. energy infrastructure sector that are REIT-qualified. A fourth quarter dividend of $0.125 per share was declared on January 3, 2014 and paid on January 23, 2014, resulting in four consecutive quarterly dividends at the annualized rate of $0.50 per share.

Because the Company now operates as a REIT, management believes that non-GAAP performance measures utilized by REITs, including Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”), also provide useful insights into CorEnergy’s operational performance. AFFO for the year ended Dec. 31, 2013 was $0.52 per share as compared to $0.43 per share for the year ended Nov. 30, 2012.

 

Fiscal Year Ended Dec. 31, 2013 Financial Summary

      For the Fiscal Year Ended Dec. 31, 2013
      Total     Per Share
Net Income (attributable to CorEnergy Stockholders)    

$4,502,339

    $0.19
Funds From Operations (FFO)     $13,092,300     $0.54
Adjusted Funds From Operations (AFFO)     $12,668,778     $0.52
       

FFO and AFFO are non-GAAP measures presented in accordance with the guidelines for calculation and reporting issued by the National Association of Real Estate Investment Trusts. FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, real estate-related depreciation and amortization (excluding amortization of deferred financing costs or loan origination costs) and after adjustments for unconsolidated partnerships and joint ventures. The Company considers FFO an important supplemental measure of operating performance that is frequently used by securities analysts, investors and other interested parties. CorEnergy defines AFFO as FFO plus transaction costs, amortization of debt issuance costs, deferred leasing costs, above market rent, and certain costs of a nonrecurring nature, less maintenance, capital expenditures (if any), amortization of debt premium and adjustments to lease revenue resulting from the EIP sale. Management uses AFFO as a measure of long-term sustainable operational performance.

2013 Real Property Update

Pinedale Liquids Gathering System (“LGS”), Liquids Gathering Pipeline and Storage, Wyoming

The Pinedale LGS, our largest acquisition of REIT-qualifying assets to date, is subject to a 15-year triple net participating lease with Ultra Petroleum (“UPL”). Beginning in January 2014, the Company is eligible for participating rents depending on the volume growth of liquids flowing through the LGS. Due to annual escalations based on the Consumer Price Index (CPI), annual minimum rent for 2014 will increase $306 thousand.

As of Dec. 31, 2013, approximately 94.2 percent of the Company's leased property, based on the gross book value of real estate investments, was leased to UPL. Approximately 88.7 percent of the Company's total lease revenue for the year ended Dec. 31, 2013 was derived from UPL.

Eastern Interconnect Project, Electric Transmission, New Mexico

The Eastern Interconnect Project (“EIP”) is leased to Public Service Company of New Mexico (“PNM”) under a triple net lease. The EIP lease terminates on April 1, 2015 with the sale of the Company’s 40 percent undivided interest for $7.7 million. The remaining lease payments were paid in full on Jan. 2, 2014.

As of Dec. 31, 2013, approximately 5.8 percent of the Company's leased property, based on the gross book value of real estate investments, was leased to PNM. Approximately 11.3 percent of the Company's total lease revenue for the year ended Dec. 31, 2013 was derived from PNM.

Omega Pipeline, Natural Gas Pipeline, Missouri

Mowood, LLC (“Mowood”) is a wholly-owned subsidiary of the Company, and the owner of Omega Pipeline Company, LLC (“Omega”). The Company provides financing to Mowood secured by Omega’s real property assets. Omega’s sales revenue was higher in 2013, largely attributable to an increase in sales volume due to overall cooler temperatures in 2013 as compared to 2012. Mowood’s operating results for the comparable period in 2012 were approximately 15 percent higher than originally expected due to higher margins from several construction projects that were completed.

2013 Private Company Update

The fair value of Lightfoot Capital Partners, LP and Lightfoot Capital Partners GP LLC (collectively, “Lightfoot”) as of Dec. 31, 2013, increased approximately $1.8 million or 20.4 percent, compared to the fair value at Dec. 31, 2012, primarily due to favorable valuations of Lightfoot’s interest in Gulf LNG and Arc Logistics Partners LP (“Arc Logistics”), which completed an initial public offering in November 2012. The Company expects to receive distributions of approximately $900 thousand from Lightfoot during fiscal 2014, funded primarily by Lightfoot’s distributions from Arc Logistics.

The fair value of VantaCore as of Dec. 31, 2013, increased $1.8 million, or 16.6 percent, compared to the fair value at Dec. 31, 2012. The increase is attributable to a debt repayment and changes in VantaCore’s EBITDA which compared more favorably with selected public companies, increasing the multiples used to value VantaCore.

Subsequent Events

Portland Terminal Facility, Petroleum Products Terminal, Oregon

CorEnergy completed a follow-on equity offering of 7,475,000 shares of common stock, raising approximately $49 million in gross proceeds at $6.50 per share. On January 21, 2014, the Company used the proceeds from the offering to acquire a petroleum products terminal facility located in Portland, Oregon. The Company entered into a triple net lease with a subsidiary of Arc Logistics for use of the terminal. The Portland Terminal Facility will account for approximately 14.6 percent of total assets on a pro forma basis as of Dec. 31, 2013, and the lease payments will account for approximately 14.5 percent of total revenue on a pro forma basis for the year ended Dec. 31, 2013.

Black Bison Water Services, LLC (“Black Bison”), Salt Water Disposal Properties, Wyoming

CorEnergy closed a transaction to finance Black Bison’s acquisition of salt water disposal properties and related capital improvement projects. The financing will be secured by three salt water disposal properties serving oil and gas producers in Wyoming’s Powder River Basin and Green River Basin. CorEnergy’s 10-year secured financing provides Black Bison with $11.5 million and has base interest of 12 percent per annum, escalating at 2% per annum. A variable component initiates after the first year and is contingent on volume growth. Additionally, the Company will purchase a 15 percent equity option in Black Bison, which will retain control, accounting and tax benefits of ownership of the assets.

REIT Qualification

CorEnergy made an election to be treated as a REIT throughout 2013 by filing a Form 1120-REIT on March 15, 2014. The Company will be taxed as a REIT rather than a C corporation and generally will not pay federal income tax on taxable income that is distributed to stockholders. “There is a long history that supports the REIT-qualifying nature of the types of assets we own. Pipelines, transmission lines, terminals, railroads are long-lived assets which provide us with rental or interest income,” said David Schulte, Chief Executive Officer of CorEnergy. “CorEnergy undertook a transition to a REIT but did not undertake a 'conversion' to a REIT. Rather, we attained REIT status by selling non-qualifying assets, and acquiring qualifying assets subject to qualifying revenue streams.”

Outlook

CorEnergy expects its energy infrastructure assets – the Pinedale LGS, the Eastern Interconnect Project, the Portland Terminal Facility, Mowood and Black Bison – to produce stable and recurring revenues in 2014. The Company believes that the cash flows from its holdings will support 2014 annualized dividend payments of no less than $0.52 per share. The Company has a broadening set of opportunities in the pipeline, which provide the potential to reach $50 to $200 million per project type. There can be no assurance that any of these acquisition opportunities will result in consummated transactions. The Company has a $20 million revolving credit facility in place, which can be utilized for future acquisitions. As of Dec. 31, 2013, there were no outstanding borrowings against the facility. The Company expects to utilize balance sheet resources, including prudent leverage when available, supplemented with accretive equity issuance as needed.

2013 Fiscal Year End Earnings Conference Call

CorEnergy will host a conference call Thursday, March 20, 2014, at 1:00 p.m. Central Time to discuss its financial results. Please dial into the call at 877-407-8035 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.corridortrust.com.

A replay of the call will be available until 11:59 p.m. Central Time April 20, 2014, by dialing 877-660-6853. The Conference ID # is 13577832. A replay of the webcast will also be available on the company’s website at corenergy.corridortrust.com through March 20, 2015.

About CorEnergy Infrastructure Trust, Inc.

CorEnergy Infrastructure Trust, Inc. (NYSE: CORR), primarily owns midstream and downstream U.S. energy infrastructure assets subject to long-term triple net participating leases with energy companies. These assets include pipelines, storage tanks, transmission lines and gathering systems. The Company’s principal objective is to provide stockholders with an attractive risk-adjusted total return, with an emphasis on distributions and long-term distribution growth. CorEnergy is managed by Corridor InfraTrust Management, LLC, a real property asset manager focused on U.S. energy infrastructure real assets, and is an affiliate of Tortoise Capital Advisors, L.L.C., an investment manager specializing in listed energy investments, with approximately $15 billion of assets under management in NYSE-listed closed-end investment companies, open-end funds and other accounts as of February 28, 2014. For more information, please visit corenergy.corridortrust.com.

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.

     
CorEnergy Infrastructure Trust, Inc.
CONSOLIDATED BALANCE SHEETS
 
December 31, November 30, December 31,
2013 2012 2012
Assets
Leased property, net of accumulated depreciation of $12,754,588, $1,131,680, and $1,607,624 at December 31, 2013, November 30, 2012, and December 31, 2012, respectively $ 232,220,618 $ 12,995,169 $ 243,078,709
Other equity securities, at fair value 23,304,321 19,866,621 19,707,126
Cash and cash equivalents 17,963,266 14,333,456 17,680,783
Trading securities, at fair value - 55,219,411 4,318,398
Property and equipment, net of accumulated depreciation of $2,037,685, $1,751,202, and $1,774,616 at December 31, 2013, November 30, 2012, and December 31, 2012, respectively 3,318,483 3,589,022 3,566,030
Escrow receivable - 698,729 698,729
Accounts receivable 2,068,193 1,570,257 922,894
Lease receivable 711,229 - -
Intangible lease asset, net of accumulated amortization of $729,847, $413,580, and $437,908 at December 31, 2013, November 30, 2012, and December 31, 2012, respectively 364,924 681,191 656,863
Deferred debt issuance costs, net of accumulated amortization of $572,830, $0 and $16,350 at December 31, 2013, November 30, 2012, and December 31, 2012, respectively 1,225,524 - 1,520,823
Deferred lease costs, net of accumulated amortization of $63,272, $0, and $1,967 at December 31, 2013, November 30, 2012, and December 31, 2012, respectively 857,190 - 912,875
Hedged derivative asset 680,968 - -
Income tax receivable 834,382 - -
Prepaid expenses and other assets   326,561   2,477,977  

 598,755

Total Assets $ 283,875,659 $ 111,431,833 $

 293,661,985

 
Liabilities and Equity
Long-term debt $ 70,000,000 $ - $ 70,000,000
Accounts payable and other accrued liabilities 2,920,267 2,885,631 4,413,420
Lease obligation - 27,522 20,698
Income tax liability - -

 3,855,947

Deferred tax liability 5,332,087 7,172,133 2,396,043
Line of credit 81,935 120,000 -
Unearned revenue   -   2,370,762   2,133,685
Total Liabilities $ 78,334,289 $ 12,576,048 $

 82,819,793

 
Equity
Warrants, no par value; 945,594 issued and outstanding at December 31, 2013, November 30, 2012, and December 31, 2012 (5,000,000 authorized) $ 1,370,700 $ 1,370,700 $ 1,370,700
Capital stock, non-convertible, $0.001 par value; 24,156,163 shares issued and outstanding at December 31, 2013, 9,190,667 shares issued and outstanding at November 30, 2012, and 24,140,667 shares issued and outstanding at December 31, 2012 (100,000,000 shares authorized) 24,156 9,191 24,141
Additional paid-in capital 173,441,019 91,763,475 175,256,675
Accumulated retained earnings 1,580,062 5,712,419 4,209,023
Accumulated other comprehensive income   777,403   -   -
Total CorEnergy Equity   177,193,340   98,855,785   180,860,539
Non-controlling Interest   28,348,030   -   29,981,653
Total Equity   205,541,370   98,855,785   210,842,192
Total Liabilities and Equity $ 283,875,659 $ 111,431,833 $

293,661,985

 
 
CorEnergy Infrastructure Trust, Inc.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

       

For the One-Month

Transition

For the Years Ended

Period Ended

December 31, November 30, November 30,

December 31,

2013 2012 2011

2012

Revenue
Lease revenue $ 22,552,976 $ 2,552,975 $ 1,063,740 $ 857,909
Sales revenue   8,733,044     8,021,022     2,161,723     868,992  
Total Revenue   31,286,020     10,573,997     3,225,463     1,726,901  
 
Expenses
Cost of sales (excluding depreciation expense) 6,734,665 6,078,102 1,689,374 686,976
Management fees, net of expense reimbursements 2,637,265 1,046,796 968,163 155,242
Asset acquisition expenses 806,083 377,834 638,185 64,733
Professional fees 1,678,137 1,141,045 548,759 333,686
Depreciation expense 11,429,980 1,118,269 364,254 499,357
Amortization expense 61,305 - - 1,967
Operating expenses 924,571 739,519 196,775 48,461
Directors' fees 178,196 85,050 70,192 8,500
Other expenses   580,183     231,086     183,674     27,500  
Total Expenses   25,030,385     10,817,701     4,659,376     1,826,422  
Operating Income (Loss)   6,255,635       (243,704 )     (1,433,913 )   (99,521 )
Other Income (Expense)
Net distributions and dividend income $ 584,814 $ (279,395 ) $ 651,673 $ 2,325
Net realized and unrealized gain (loss) on trading securities (251,213 ) 4,009,933 2,299,975 (1,769,058 )
Net realized and unrealized gain (loss) on other equity securities 5,617,766 16,171,944 2,283,773 (159,495 )
Other Income - - 40,000 -
Interest Expense   (3,288,378 )   (81,123 )   (36,508 )   (416,137 )
Total Other Income (Expense)   2,662,989     19,821,359     5,238,913     (2,342,365 )

Income (Loss) before income taxes

  8,918,624     19,577,655     3,805,000     (2,441,886 )
Taxes
Current tax expense (benefit) 13,474 29,265 253,650 3,855,947
Deferred tax expense (benefit)   2,936,044     7,199,669     629,207     (4,776,090 )
Income tax expense (benefit), net   2,949,518     7,228,934     882,857     (920,143 )
Net Income (Loss) 5,969,106 12,348,721 2,922,143 (1,521,743 )
 
Less: Net Income (Loss) attributable to non-controlling interest   1,466,767     -     -     (18,347 )
Net Income (Loss) attributable to CORR Stockholders $ 4,502,339   $ 12,348,721   $ 2,922,143   $ (1,503,396 )
 
Net income (Loss) $ 5,969,106 $ 12,348,721 $ 2,922,143 $ (1,521,743 )
Other comprehensive income:
Changes in fair value of qualifying hedges attributable to CORR Stockholders 777,403 - - -
Changes in fair value of qualifying hedges attributable to non-controlling interest   181,762     -     -     -  
Net Change in Other Comprehensive Income $ 959,165   $ -   $ -   $ -  

Total Comprehensive Income (Loss)

6,928,271 12,348,721 2,922,143 (1,521,743 )
Less: Comprehensive income attributable to non-controlling interest   1,648,529     -     -     -  
Comprehensive Income (Loss) attributable to CORR Stockholders $ 5,279,742   $ 12,348,721   $ 2,922,143   $ (1,521,743 )
Earnings (Loss) Per Common Share:
Basic and Diluted $ 0.19 $ 1.34 $ 0.32 $ (0.10 )
Weighted Average Shares of Common Stock Outstanding:
Basic and Diluted 24,149,396 9,182,425 9,159,809 15,564,861
Dividends declared per share $ 0.375 $

0.440

$

0.410

$ -
 
           
CorEnergy Infrastructure Trust, Inc.
CONSOLIDATED STATEMENTS OF EQUITY
 
Accumulated Retained
Additional Other Earnings Non-
Capital Stock Paid-in Comprehensive (Accumulated Controlling
Shares   Amount Warrants

Capital

Income

Deficit)

Interest

Total
 
Balance at November 30, 2010   9,146,506 $ 9,147 $ 1,370,700 $ 98,444,952   $ - $ (4,345,626 )   -   $ 95,479,173  
Net Income - - - - - 2,922,143 - 2,922,143
Distributions to stockholders sourced as return of capital - - - (3,755,607 ) - - - (3,755,607 )
Reinvestment of distributions to stockholders 30,383 30 - 252,212 - - - 252,242
Consolidation of wholly-owned subsidiary   -   -   -   741,181     -   (5,212,819 )   -     (4,471,638 )
Balance at November 30, 2011   9,176,889   9,177   1,370,700   95,682,738     -   (6,636,302 )   -     90,426,313  
Net Income - - - - - 12,348,721 12,348,721
Distributions to stockholders sourced as return of capital - - - (4,040,273 ) - - - (4,040,273 )
Reinvestment of distributions to stockholders   13,778   14   -   121,010     -   -     -     121,024  
Balance at November 30, 2012   9,190,667   9,191   1,370,700   91,763,475     -   5,712,419     -     98,855,785  
Net Loss - - - - - (1,503,396 ) (18,347 ) (1,521,743 )
Net offering proceeds 14,950,000 14,950 - 83,493,200 - - - 83,508,150
Non-controlling interest contribution   -   -   -     -     -   -     30,000,000     30,000,000  
Balance at December 31, 2012   24,140,667   24,141   1,370,700     175,256,675     -   4,209,023     29,981,653     210,842,192  
Net Income - - - - - 4,502,339 1,466,767 5,969,106
Net change in cash flow hedges   -   -   -   -     777,403   -     181,762     959,165  
Total comprehensive income - - - 777,403 4,502,339 1,648,529 6,928,271
Dividends - - - (1,923,760 ) - (7,131,300 ) - (9,055,060 )
Distributions to non-controlling interest - - - - - - (3,282,152 ) (3,282,152 )
Reinvestment of dividends paid to stockholders   15,496   15   -   108,104     -   -     -     108,119  
Balance at December 31, 2013 $ 24,156,163 $ 24,156 $ 1,370,700 $ 173,441,019   $ 777,403 $ 1,580,062   $ 28,348,030   $ 205,541,370  
 
 
CorEnergy Infrastructure Trust, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
       
For the One-Month
Transition
For the Years Ended Period Ended
December 31, November 30, November 30, December 31,
2013 2012 2011 2012
Operating Activities
Net Income (Loss) $ 5,969,106 $ 12,348,721 $ 2,922,143 $ (1,521,743 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Distributions received from investment securities (567,276 ) 4,985,370 2,845,434 -
Deferred income tax, net 2,936,044 7,199,669 629,207 (4,776,090 )
Depreciation 11,429,980 1,118,269 364,254 499,357
Amortization 909,724 200,056 27,030 42,645
Realized and unrealized (gain) loss on trading securities 251,213 (4,009,933 ) (2,299,975 ) 1,769,058
Realized and unrealized (gain) loss on other equity securities (5,617,766 ) (16,171,944 ) (2,283,773 ) 159,495
Unrealized (gain) loss on derivative contract (11,095 ) - - 316,756
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (1,145,299 ) (167,302 ) (49,695 ) 647,363
(Increase) decrease in lease receivable (711,229 ) 474,152 237,077 -
(Increase) decrease in prepaid expenses and other assets 272,194 (233,272 ) 70,109 (177,521 )
Increase (decrease) in accounts payable and other accrued liabilities 816,430 1,533,944 300,635 122,445
Increase (decrease) in current income tax liability (4,690,329 ) - - 3,922,682
Increase (decrease) in unearned income   (2,133,685 )   2,370,762     -     (237,077 )
Net cash provided by operating activities $ 7,708,012   $ 9,648,492   $ 2,762,446   $ 767,370  
 
Investing Activities
Purchases of long-term investments of trading and other equity securities - - (38,060,281 ) -
Proceeds from sale of long-term investment of trading and other equity securities 5,580,985 9,983,169 53,950,583 26,085,740
Deferred lease costs (74,037 ) - - (796,649 )

Acquisition expenditures

(1,834,036 ) (942,707 ) - (205,706,823 )
Purchases of property and equipment (40,670 ) (30,321 ) - (421 )
Cash paid in business combination - - (12,250,000 ) -
Proceeds from sale of property and equipment 5,201 3,076 (1,045 ) -
Return of capital on distributions received   1,772,776     0     -     -  
Net cash provided by (used in) investing activities $ 5,410,219   $ 9,013,217   $ 3,639,257   $ (180,418,153 )
 
Financing Activities
Payments on lease obligation (20,698 ) (80,028 ) (44,816 ) (6,824 )
Debt financing costs (144,798 ) (1,054,302 )

-

(1,391,846 )
Net offering proceeds (523,094 ) -

-

84,516,780
Debt issuance - -

-

70,000,000
Proceeds from non-controlling interest - -

-

30,000,000
Dividends paid (8,946,941 ) (3,919,249 ) (3,503,365 ) -
Distributions to non-controlling interest (3,282,152 ) - - -
Advances on revolving line of credit 221,332 5,285,000 - 530,000
Payments on revolving line of credit (139,397 ) (5,165,000 ) (400,000 ) (650,000 )
Payments on long-term debt   -     (2,188,000 )   (1,221,000 )   -  
Net cash used in financing activities $ (12,835,748 ) $ (7,121,579 ) $ (5,169,181 ) $ 182,998,110  
Net Change in Cash and Cash Equivalents $ 282,483 $ 11,540,130 $ 1,232,522 $ 3,347,327
Consolidation of wholly-owned subsidiary - - $ 94,611 -
Cash and Cash Equivalents at beginning of period   17,680,783     2,793,326     1,466,193     14,333,456  
Cash and Cash Equivalents at end of period $ 17,963,266   $ 14,333,456   $ 2,698,715   $ 17,680,783  
 
For the One-Month
Transition
For the Years Ended Period Ended
December 31, November 30, November 30, December 31,
2013 2012 2011 2012
Supplemental Disclosure of Cash Flow Information
Interest paid $ 2,651,355 $ 203,611 $ 176,595 $ 2,765
Income taxes paid (net of refunds) $ 4,637,068 $ 96,000 $ 253,650 $ -
Non-Cash Investing Activities
Security proceeds from sale in long-term investment of other equity securities $ - $ 26,565,400 $ - $ 23,046,215
Reclassification of prepaid expenses and other assets to deferred lease costs $ - $ (942,707 ) $ - $ 753,940
Reclassification of prepaid expenses and other assets to acquisition expenditures $ - $ - $ - $ 181,766
Change in accounts payable and accrued expenses related to deferred lease costs $ (68,417 ) $ 704,164 $ - $ (653,747 )
Change in accounts payable and accrued expenses related to acquisition expenditures $ (1,545,163 ) $ 192,116 $ - $ 1,650,699
Non-Cash Financing Activities
Reclassification of prepaid expenses and other assets to issuance of equity $ - $ - $ - $ 617,308
Reclassification of prepaid expenses and other assets to debt financing costs $ - $ (1,054,302 ) $ - $ 436,994
Change in accounts payable and accrued expenses related to the issuance of equity $ (523,094 ) $ - $ - $ 391,322
Change in accounts payable and accrued expenses related to debt financing costs $ 116,383 $ 527,056 $ - $ (291,667 )
Reinvestment of distributions by common stockholders in additional common shares $ 108,119 $ 121,024 $ 252,242 $ -
 
 
CorEnergy Infrastructure Trust, Inc.
FFO and AFFO Reconciliation
   
Historical for Historical for
the Year Ended the Year Ended
December 31,

November 30,

2013

2012

Net Income (attributable to CorEnergy Stockholders): $ 4,502,339 $ 12,348,721
Add:
Depreciation 11,429,980 1,118,269
Distributions received from investment securities 1,789,893 4,985,370
Income tax expense, net 2,949,518 7,228,934
Less:
Net distributions and dividend income 567,276 -
Net realized and unrealized gain (loss) on trading securities (251,213 ) 4,009,933
Net realized and unrealized gain (loss) on other equity securities 5,617,766 16,171,944
Non-Controlling Interest attributable to FFO reconciling items   1,645,601     -  
Funds from operations (FFO): 13,092,300 5,499,417
Add:
Transaction costs 806,083 377,834
Amortization of debt issuance costs 556,300 -
Amortization of deferred lease costs 61,305 -
Amortization of above market leases 291,940 291,939
Noncash costs associated with derivative instruments 40,290 -

Nonrecurring personnel costs

113,232 -
Less:
EIP Lease Adjustment 2,171,236 2,171,238
Non-Controlling Interest attributable to AFFO reconciling items 121,436 -
Amortization of debt premium   -     91,883  

Adjusted funds from operations (AFFO):

  12,668,778     3,906,069  
 
Weighted Average Shares 24,149,396 9,182,425
FFO per share $ 0.54 $ 0.60
AFFO per share $ 0.52 $ 0.43
 

Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. To overcome this problem, the Company considers FFO and AFFO appropriate measures of operating performance of an equity REIT.

The Company uses the NAREIT definition of FFO. As defined by NAREIT, FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, real estate-related depreciation and amortization (excluding amortization of deferred financing costs or loan origination costs) and after adjustments for unconsolidated partnerships and joint ventures. FFO is a supplemental, non-GAAP financial measure. The Company’s computation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that have a different interpretation of the current NAREIT definition from the Company; therefore, caution should be exercised when comparing our company’s FFO to that of other REITs. The Company defines AFFO as FFO plus transaction costs, amortization of debt issuance costs, deferred leasing costs, above market rent, and certain costs of a nonrecurring nature, less maintenance, capital expenditures (if any), amortization of debt premium and adjustments to lease revenue resulting from the EIP sale.

FFO and AFFO presented herein may not be identical to FFO and AFFO presented by other real estate companies due to the fact that not all real estate companies use the same definitions. FFO and AFFO should not be considered as alternatives to net income (determined in accordance with GAAP) as indicators of the Company’s financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of the Company’s liquidity, nor are FFO and AFFO necessarily indicative of sufficient cash flow to fund all of the Company’s needs. The Company believes that in order to facilitate a clear understanding of the consolidated historical operating results of the Company, FFO and AFFO should be examined in conjunction with net income as presented elsewhere herein.

Contacts

CorEnergy Infrastructure Trust, Inc.
Katheryn Mueller, 877-699-CORR (2677)
Investor Relations
info@corridortrust.com

Release Summary

CorEnergy Releases Fiscal 2013 Results

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Contacts

CorEnergy Infrastructure Trust, Inc.
Katheryn Mueller, 877-699-CORR (2677)
Investor Relations
info@corridortrust.com