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Share Name | Share Symbol | Market | Type |
---|---|---|---|
CorEnergy Infrastructure Trust Inc NEW | NYSE:CORR | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.45 | 0 | 01:00:00 |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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20-3431375
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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1100 Walnut, Ste. 3350
Kansas City, MO
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64106
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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•
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the ability of our tenants and borrowers to make payments under their respective leases and mortgage loans, our reliance on certain major tenants under single tenant leases and our ability to re-lease properties;
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•
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changes in economic and business conditions in the energy infrastructure sector where our investments are concentrated, including the financial condition of our tenants or borrowers and general economic conditions in the particular sectors of the energy industry served by each of our infrastructure assets;
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•
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the inherent risks associated with owning real estate, including real estate market conditions, governing laws and regulations, including potential liabilities related to environmental matters, and the relative illiquidity of real estate investments;
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•
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risks associated with the bankruptcy or default of any of our tenants or borrowers, including the exercise of the rights and remedies of bankrupt entities;
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•
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the impact of laws and governmental regulations applicable to certain of our infrastructure assets, including additional costs imposed on our business or other adverse impacts as a result of any unfavorable changes in such laws or regulations;
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•
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the loss of any member of our management team;
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•
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our continued ability to access the debt and equity markets;
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•
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our ability to successfully implement our selective acquisition strategy, including the inability to pursue our strategy due to unresolved issues impacting our current significant tenants or borrowers;
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•
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our ability to obtain suitable tenants for our properties;
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•
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our ability to refinance amounts outstanding under our credit facilities and our convertible notes at maturity on terms favorable to us;
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•
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changes in interest rates under our current credit facilities and under any additional variable rate debt arrangements that we may enter into in the future;
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•
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our ability to comply with certain debt covenants;
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•
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dependence by us and our tenants on key customers for significant revenues, and the risk of defaults by any such tenants or customers;
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•
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our or our tenants' ability to secure adequate insurance and risk of potential uninsured losses, including from natural disasters;
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•
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the continued availability of third party pipelines, railroads or other facilities interconnected with certain of our infrastructure assets;
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•
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risks associated with owning, operating or financing properties for which the tenants', mortgagors' or our operations may be impacted by extreme weather patterns and other natural phenomena;
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•
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our ability to sell properties at an attractive price;
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•
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market conditions and related price volatility affecting our debt and equity securities;
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•
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competitive and regulatory pressures on the revenues of our interstate natural gas transmission business;
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•
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changes in federal or state tax rules or regulations that could have adverse tax consequences;
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•
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declines in the market value of our investment securities;
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•
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our ability to maintain internal controls and processes to ensure all transactions are accounted for properly, all relevant disclosures and filings are timely made in accordance with all rules and regulations, and any potential fraud or embezzlement is thwarted or detected;
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•
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changes in federal income tax regulations (and applicable interpretations thereof), or in the composition or performance of our assets, that could impact our ability to continue to qualify as a real estate investment trust for federal income tax purposes;
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•
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risks related to potential terrorist attacks, acts of cyber-terrorism, or similar disruptions that could disrupt access to our information technology systems or result in other significant damage to our business and properties, some of which may not be covered by insurance and all of which could adversely impact distributions to our stockholders.
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September 30, 2016
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December 31, 2015
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||||
Assets
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(Unaudited)
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|
|
||||
Leased property, net of accumulated depreciation of $47,520,455 and $33,869,263
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$
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495,640,396
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$
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509,226,215
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Property and equipment, net of accumulated depreciation of $8,454,299 and $5,948,988
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117,534,873
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119,629,978
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||
Financing notes and related accrued interest receivable, net of reserve of $4,100,000 and $13,784,137
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1,500,000
|
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7,675,626
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Other equity securities, at fair value
|
9,465,736
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8,393,683
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||
Cash and cash equivalents
|
10,107,754
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14,618,740
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Accounts and other receivables
|
16,358,597
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|
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10,431,240
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|
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Deferred costs, net of accumulated amortization of $1,984,580 and $2,717,609
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3,408,620
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4,187,271
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Prepaid expenses and other assets
|
614,788
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|
|
491,024
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Deferred tax asset
|
1,589,558
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|
1,606,976
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Goodwill
|
1,718,868
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1,718,868
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|
||
Total Assets
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$
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657,939,190
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$
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677,979,621
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Liabilities and Equity
|
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||||
Secured credit facilities, net (including $9,574,465 and $0 with related party)
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91,698,387
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105,440,842
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Unsecured convertible senior notes, net of discount and debt issuance costs of $2,951,902 and $3,576,090
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111,048,098
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111,423,910
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Asset retirement obligation
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13,381,604
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12,839,042
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Accounts payable and other accrued liabilities
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4,610,452
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2,317,774
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Management fees payable
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1,743,599
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1,763,747
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Unearned revenue
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343,295
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|
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—
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||
Total Liabilities
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$
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222,825,435
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$
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233,785,315
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Equity
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||||
Series A Cumulative Redeemable Preferred Stock 7.375%, $56,250,000 liquidation preference ($2,500 per share, $0.001 par value), 10,000,000 authorized; 22,500 issued and outstanding at September 30, 2016, and December 31, 2015
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$
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56,250,000
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$
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56,250,000
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Capital stock, non-convertible, $0.001 par value; 11,876,389 and 11,939,697 shares issued and outstanding at September 30, 2016, and December 31, 2015 (100,000,000 shares authorized)
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11,876
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11,940
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||
Additional paid-in capital
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351,754,151
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361,581,507
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Accumulated other comprehensive income (loss)
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(14,235
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)
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|
190,797
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Total CorEnergy Equity
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408,001,792
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418,034,244
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Non-controlling Interest
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27,111,963
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26,160,062
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Total Equity
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435,113,755
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444,194,306
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Total Liabilities and Equity
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$
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657,939,190
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$
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677,979,621
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See accompanying Notes to Consolidated Financial Statements.
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For the Three Months Ended
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For the Nine Months Ended
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||||||||||||
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September 30, 2016
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September 30, 2015
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September 30, 2016
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September 30, 2015
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||||||||
Revenue
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||||||||
Lease revenue
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$
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16,996,155
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$
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16,966,056
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$
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50,988,299
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$
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31,102,036
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Transportation and distribution revenue
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5,119,330
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3,557,096
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15,283,461
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10,753,810
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|
||||
Financing revenue
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—
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182,604
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162,344
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1,511,900
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|
||||
Sales revenue
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—
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1,434,694
|
|
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—
|
|
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5,442,257
|
|
||||
Total Revenue
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22,115,485
|
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22,140,450
|
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66,434,104
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48,810,003
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Transportation and distribution expenses
|
1,482,161
|
|
|
1,120,862
|
|
|
4,222,792
|
|
|
3,590,855
|
|
||||
Cost of Sales
|
—
|
|
|
382,851
|
|
|
—
|
|
|
2,201,139
|
|
||||
General and administrative
|
3,021,869
|
|
|
2,837,762
|
|
|
9,084,961
|
|
|
7,311,610
|
|
||||
Depreciation, amortization and ARO accretion expense
|
5,744,266
|
|
|
5,836,665
|
|
|
16,778,109
|
|
|
13,381,483
|
|
||||
Provision for loan loss and disposition
|
—
|
|
|
7,951,137
|
|
|
5,014,466
|
|
|
7,951,137
|
|
||||
Total Expenses
|
10,248,296
|
|
|
18,129,277
|
|
|
35,100,328
|
|
|
34,436,224
|
|
||||
Operating Income
|
$
|
11,867,189
|
|
|
$
|
4,011,173
|
|
|
$
|
31,333,776
|
|
|
$
|
14,373,779
|
|
Other Income (Expense)
|
|
|
|
|
|
|
|
||||||||
Net distributions and dividend income
|
$
|
277,523
|
|
|
$
|
241,563
|
|
|
$
|
867,265
|
|
|
$
|
1,025,381
|
|
Net realized and unrealized gain (loss) on other equity securities
|
1,430,858
|
|
|
(1,408,751
|
)
|
|
1,001,771
|
|
|
(915,568
|
)
|
||||
Interest expense
|
(3,520,856
|
)
|
|
(3,854,913
|
)
|
|
(10,987,677
|
)
|
|
(6,129,073
|
)
|
||||
Total Other Income (Expense)
|
(1,812,475
|
)
|
|
(5,022,101
|
)
|
|
(9,118,641
|
)
|
|
(6,019,260
|
)
|
||||
Income (loss) before income taxes
|
10,054,714
|
|
|
(1,010,928
|
)
|
|
22,215,135
|
|
|
8,354,519
|
|
||||
Taxes
|
|
|
|
|
|
|
|
||||||||
Current tax expense (benefit)
|
95,125
|
|
|
105,020
|
|
|
(378,954
|
)
|
|
645,255
|
|
||||
Deferred tax expense (benefit)
|
388,027
|
|
|
(1,953,973
|
)
|
|
17,418
|
|
|
(2,222,706
|
)
|
||||
Income tax expense (benefit), net
|
483,152
|
|
|
(1,848,953
|
)
|
|
(361,536
|
)
|
|
(1,577,451
|
)
|
||||
Net Income
|
9,571,562
|
|
|
838,025
|
|
|
22,576,671
|
|
|
9,931,970
|
|
||||
Less: Net Income attributable to non-controlling interest
|
340,377
|
|
|
410,806
|
|
|
999,838
|
|
|
1,232,985
|
|
||||
Net Income attributable to CorEnergy Stockholders
|
$
|
9,231,185
|
|
|
$
|
427,219
|
|
|
$
|
21,576,833
|
|
|
$
|
8,698,985
|
|
Preferred dividend requirements
|
1,037,109
|
|
|
1,037,109
|
|
|
3,111,327
|
|
|
2,811,718
|
|
||||
Net Income (loss) attributable to Common Stockholders
|
$
|
8,194,076
|
|
|
$
|
(609,890
|
)
|
|
$
|
18,465,506
|
|
|
$
|
5,887,267
|
|
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
9,571,562
|
|
|
$
|
838,025
|
|
|
$
|
22,576,671
|
|
|
$
|
9,931,970
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Changes in fair value of qualifying hedges attributable to CorEnergy stockholders
|
3,039
|
|
|
(223,176
|
)
|
|
(205,032
|
)
|
|
(481,081
|
)
|
||||
Changes in fair value of qualifying hedges attributable to non-controlling interest
|
710
|
|
|
(52,180
|
)
|
|
(47,937
|
)
|
|
(112,479
|
)
|
||||
Net Change in Other Comprehensive Income (Loss)
|
$
|
3,749
|
|
|
$
|
(275,356
|
)
|
|
$
|
(252,969
|
)
|
|
$
|
(593,560
|
)
|
Total Comprehensive Income
|
9,575,311
|
|
|
562,669
|
|
|
22,323,702
|
|
|
9,338,410
|
|
||||
Less: Comprehensive income attributable to non-controlling interest
|
341,087
|
|
|
358,626
|
|
|
951,901
|
|
|
1,120,506
|
|
||||
Comprehensive Income attributable to CorEnergy Stockholders
|
$
|
9,234,224
|
|
|
$
|
204,043
|
|
|
$
|
21,371,801
|
|
|
$
|
8,217,904
|
|
Earnings (Loss) Per Common Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.69
|
|
|
$
|
(0.05
|
)
|
|
$
|
1.55
|
|
|
$
|
0.57
|
|
Diluted
|
$
|
0.68
|
|
|
$
|
(0.05
|
)
|
|
$
|
1.55
|
|
|
$
|
0.57
|
|
Weighted Average Shares of Common Stock Outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
11,872,729
|
|
|
11,924,148
|
|
|
11,909,431
|
|
|
10,266,380
|
|
||||
Diluted
|
15,327,274
|
|
|
11,924,148
|
|
|
11,909,431
|
|
|
10,266,380
|
|
||||
Dividends declared per share
|
$
|
0.750
|
|
|
$
|
0.675
|
|
|
$
|
2.250
|
|
|
$
|
2.000
|
|
See accompanying Notes to Consolidated Financial Statements.
|
|
Capital Stock
|
|
Preferred Stock
|
|
Additional
Paid-in Capital |
|
Accumulated Other Comprehensive Income
|
|
Retained
Earnings |
|
Non-Controlling
Interest |
|
Total
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||||
Balance at December 31, 2015
|
11,939,697
|
|
|
$
|
11,940
|
|
|
$
|
56,250,000
|
|
|
$
|
361,581,507
|
|
|
$
|
190,797
|
|
|
$
|
—
|
|
|
$
|
26,160,062
|
|
|
$
|
444,194,306
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,576,833
|
|
|
999,838
|
|
|
22,576,671
|
|
|||||||
Net change in cash flow hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(205,032
|
)
|
|
—
|
|
|
(47,937
|
)
|
|
(252,969
|
)
|
|||||||
Total comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(205,032
|
)
|
|
21,576,833
|
|
|
951,901
|
|
|
22,323,702
|
|
|||||||
Repurchase of common stock
|
(90,613
|
)
|
|
(91
|
)
|
|
—
|
|
|
(2,041,760
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,041,851
|
)
|
|||||||
Series A preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,111,327
|
)
|
|
—
|
|
|
(3,111,327
|
)
|
|||||||
Common stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,339,820
|
)
|
|
—
|
|
|
(18,465,506
|
)
|
|
—
|
|
|
(26,805,326
|
)
|
|||||||
Common stock issued under director's compensation plan
|
2,551
|
|
|
2
|
|
|
—
|
|
|
59,998
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,000
|
|
|||||||
Reinvestment of dividends paid to common stockholders
|
24,754
|
|
|
25
|
|
|
—
|
|
|
494,226
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
494,251
|
|
|||||||
Balance at September 30, 2016 (Unaudited)
|
11,876,389
|
|
|
$
|
11,876
|
|
|
$
|
56,250,000
|
|
|
$
|
351,754,151
|
|
|
$
|
(14,235
|
)
|
|
$
|
—
|
|
|
$
|
27,111,963
|
|
|
$
|
435,113,755
|
|
See accompanying Notes to Consolidated Financial Statements.
|
|
For the Nine Months Ended
|
||||||
|
September 30, 2016
|
|
September 30, 2015
|
||||
Operating Activities
|
|
|
|
||||
Net Income
|
$
|
22,576,671
|
|
|
$
|
9,931,970
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Deferred income tax, net
|
17,418
|
|
|
(2,222,706
|
)
|
||
Depreciation, amortization and ARO accretion
|
18,334,719
|
|
|
14,757,322
|
|
||
Provision for loan loss
|
5,014,466
|
|
|
7,951,137
|
|
||
Gain on repurchase of convertible debt
|
(71,702
|
)
|
|
—
|
|
||
Net distributions and dividend income, including recharacterization of income
|
(117,004
|
)
|
|
(371,323
|
)
|
||
Net realized and unrealized (gain) loss on other equity securities
|
(1,001,771
|
)
|
|
915,568
|
|
||
Unrealized gain on derivative contract
|
(105,567
|
)
|
|
(48,494
|
)
|
||
Common stock issued under directors compensation plan
|
60,000
|
|
|
90,000
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Increase in accounts and other receivables
|
(5,434,028
|
)
|
|
(1,326,469
|
)
|
||
Decrease (increase) in financing note accrued interest receivable
|
95,114
|
|
|
(488,880
|
)
|
||
Decrease (increase) in prepaid expenses and other assets
|
49,227
|
|
|
(70,846
|
)
|
||
(Decrease) increase in management fee payable
|
(20,148
|
)
|
|
628,676
|
|
||
Increase in accounts payable and other accrued liabilities
|
1,913,875
|
|
|
1,877,591
|
|
||
Increase (decrease) in unearned revenue
|
343,295
|
|
|
(711,230
|
)
|
||
Net cash provided by operating activities
|
$
|
41,654,565
|
|
|
$
|
30,912,316
|
|
Investing Activities
|
|
|
|
||||
Proceeds from assets and liabilities held for sale
|
644,934
|
|
|
7,678,246
|
|
||
Deferred lease costs
|
—
|
|
|
(329,220
|
)
|
||
Acquisition expenditures
|
—
|
|
|
(251,113,605
|
)
|
||
Purchases of property and equipment, net
|
(475,581
|
)
|
|
(113,262
|
)
|
||
Proceeds from asset foreclosure and sale
|
223,451
|
|
|
—
|
|
||
Increase in financing notes receivable
|
(202,000
|
)
|
|
(39,248
|
)
|
||
Return of capital on distributions received
|
3,393
|
|
|
87,995
|
|
||
Net cash provided (used) by investing activities
|
$
|
194,197
|
|
|
$
|
(243,829,094
|
)
|
Financing Activities
|
|
|
|
||||
Debt financing costs
|
(193,000
|
)
|
|
(1,342,288
|
)
|
||
Net offering proceeds on Series A preferred stock
|
—
|
|
|
54,210,476
|
|
||
Net offering proceeds on common stock
|
—
|
|
|
73,184,680
|
|
||
Net offering proceeds on convertible debt
|
—
|
|
|
111,262,500
|
|
||
Repurchases of common stock
|
(2,041,851
|
)
|
|
—
|
|
||
Repurchases of convertible debt
|
(899,960
|
)
|
|
—
|
|
||
Dividends paid on Series A preferred stock
|
(3,111,327
|
)
|
|
(2,466,015
|
)
|
||
Dividends paid on common stock
|
(26,311,075
|
)
|
|
(19,929,939
|
)
|
||
Distributions to non-controlling interest
|
—
|
|
|
(2,030,715
|
)
|
||
Advances on revolving line of credit
|
44,000,000
|
|
|
45,392,332
|
|
||
Payments on revolving line of credit
|
—
|
|
|
(77,533,609
|
)
|
||
Proceeds from term debt
|
—
|
|
|
45,000,000
|
|
||
Principal payments on secured credit facilities
|
(57,802,535
|
)
|
|
(3,546,000
|
)
|
||
Net cash (used) provided by financing activities
|
$
|
(46,359,748
|
)
|
|
$
|
222,201,422
|
|
Net Change in Cash and Cash Equivalents
|
$
|
(4,510,986
|
)
|
|
$
|
9,284,644
|
|
Cash and Cash Equivalents at beginning of period
|
14,618,740
|
|
|
7,578,164
|
|
||
Cash and Cash Equivalents at end of period
|
$
|
10,107,754
|
|
|
$
|
16,862,808
|
|
See accompanying Notes to Consolidated Financial Statements.
|
|||||||
Supplemental information continued on next page.
|
|
For the Nine Months Ended
|
||||||
|
September 30, 2016
|
|
September 30, 2015
|
||||
Supplemental Disclosure of Cash Flow Information
|
|
|
|
||||
Interest paid
|
$
|
7,829,619
|
|
|
$
|
2,657,567
|
|
Income taxes paid (net of refunds)
|
$
|
42,200
|
|
|
$
|
608,754
|
|
|
|
|
|
||||
Non-Cash Investing Activities
|
|
|
|
||||
Change in accounts and other receivables
|
$
|
(450,000
|
)
|
|
$
|
—
|
|
Change in accounts payable and accrued expenses related to acquisition expenditures
|
$
|
—
|
|
|
$
|
(448,780
|
)
|
Change in accounts payable and accrued expenses related to issuance of financing and other notes receivable
|
$
|
—
|
|
|
$
|
(39,248
|
)
|
Net change in Assets Held for Sale, Property and equipment, Prepaid expenses and other assets, Accounts payable and other accrued liabilities and Liabilities held for sale
|
$
|
(1,776,549
|
)
|
|
$
|
—
|
|
|
|
|
|
||||
Non-Cash Financing Activities
|
|
|
|
|
|
||
Change in accounts payable and accrued expenses related to the issuance of common equity
|
$
|
—
|
|
|
$
|
(72,685
|
)
|
Change in accounts payable and accrued expenses related to debt financing costs
|
$
|
—
|
|
|
$
|
35,472
|
|
Reinvestment of distributions by common stockholders in additional common shares
|
$
|
494,251
|
|
|
$
|
471,706
|
|
See accompanying Notes to Consolidated Financial Statements.
|
•
|
Corridor Public Holdings, Inc. and its wholly-owned subsidiary Corridor Private Holdings, Inc, hold our securities portfolio.
|
•
|
Mowood Corridor, Inc. and its wholly-owned subsidiary, Mowood, LLC, which is the holding company for our operating company, Omega Pipeline Company, LLC.
|
•
|
Corridor MoGas, Inc. holds the operating companies, MoGas Pipeline, LLC ("MoGas") and United Property Systems, LLC.
|
•
|
CorEnergy BBWS, Inc., Corridor Private, and Corridor Leeds Path West, Inc. may, from time to time, hold financing notes receivable.
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
Depreciation Expense
|
|
|
|
|
|
|
|
||||||||
GIGS
|
$
|
2,153,928
|
|
|
$
|
2,158,338
|
|
|
$
|
6,451,578
|
|
|
$
|
2,158,338
|
|
Pinedale
|
2,217,360
|
|
|
2,217,360
|
|
|
6,652,080
|
|
|
6,652,080
|
|
||||
Portland Terminal Facility
|
318,914
|
|
|
429,717
|
|
|
524,170
|
|
|
1,258,953
|
|
||||
Eastern Interconnect Project
|
—
|
|
|
—
|
|
|
—
|
|
|
569,670
|
|
||||
United Property Systems
|
8,515
|
|
|
7,425
|
|
|
23,365
|
|
|
22,275
|
|
||||
Total Depreciation Expense
|
$
|
4,698,717
|
|
|
$
|
4,812,840
|
|
|
$
|
13,651,193
|
|
|
$
|
10,661,316
|
|
Amortization Expense - Deferred Lease Costs
|
|
|
|
|
|
|
|
||||||||
GIGS
|
$
|
7,641
|
|
|
$
|
7,482
|
|
|
$
|
22,923
|
|
|
$
|
7,482
|
|
Pinedale
|
15,342
|
|
|
15,342
|
|
|
46,026
|
|
|
46,026
|
|
||||
Total Amortization Expense - Deferred Lease Costs
|
$
|
22,983
|
|
|
$
|
22,824
|
|
|
$
|
68,949
|
|
|
$
|
53,508
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Net Deferred Lease Costs
|
|
|
|
||||
GIGS
|
$
|
298,088
|
|
|
$
|
321,011
|
|
Pinedale
|
688,427
|
|
|
734,454
|
|
||
Total Deferred Lease Costs, net
|
$
|
986,515
|
|
|
$
|
1,055,465
|
|
Income Tax Expense (Benefit)
|
||||||||||||||||
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
Application of statutory income tax rate
|
|
$
|
3,400,018
|
|
|
$
|
(497,607
|
)
|
|
$
|
7,425,355
|
|
|
$
|
2,492,537
|
|
State income taxes, net of federal tax (benefit)
|
|
28,642
|
|
|
(141,807
|
)
|
|
(29,384
|
)
|
|
(113,744
|
)
|
||||
Federal Tax Attributable to Income of Real Estate Investment Trust
|
|
(2,945,508
|
)
|
|
(1,209,539
|
)
|
|
(7,757,507
|
)
|
|
(3,956,244
|
)
|
||||
Total income tax expense (benefit)
|
|
$
|
483,152
|
|
|
$
|
(1,848,953
|
)
|
|
$
|
(361,536
|
)
|
|
$
|
(1,577,451
|
)
|
Components of Income Tax Expense (Benefit)
|
||||||||||||||||
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
Current tax expense (benefit)
|
|
|
|
|
|
|
|
|
||||||||
Federal
|
|
$
|
88,032
|
|
|
$
|
94,277
|
|
|
$
|
(350,698
|
)
|
|
$
|
580,535
|
|
State (net of federal tax benefit)
|
|
7,093
|
|
|
10,743
|
|
|
(28,256
|
)
|
|
64,720
|
|
||||
Total current tax expense (benefit)
|
|
$
|
95,125
|
|
|
$
|
105,020
|
|
|
$
|
(378,954
|
)
|
|
$
|
645,255
|
|
Deferred tax expense (benefit)
|
|
|
|
|
|
|
|
|
||||||||
Federal
|
|
$
|
366,478
|
|
|
$
|
(1,801,423
|
)
|
|
$
|
18,546
|
|
|
$
|
(2,044,242
|
)
|
State (net of federal tax benefit)
|
|
21,549
|
|
|
(152,550
|
)
|
|
(1,128
|
)
|
|
(178,464
|
)
|
||||
Total deferred tax expense (benefit)
|
|
$
|
388,027
|
|
|
$
|
(1,953,973
|
)
|
|
$
|
17,418
|
|
|
$
|
(2,222,706
|
)
|
Total income tax expense (benefit), net
|
|
$
|
483,152
|
|
|
$
|
(1,848,953
|
)
|
|
$
|
(361,536
|
)
|
|
$
|
(1,577,451
|
)
|
Property and Equipment
|
||||||||
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Land
|
|
$
|
580,000
|
|
|
$
|
580,000
|
|
Natural gas pipeline
|
|
124,574,243
|
|
|
124,386,349
|
|
||
Vehicles and trailers
|
|
570,267
|
|
|
524,921
|
|
||
Office equipment and computers
|
|
264,662
|
|
|
87,696
|
|
||
Gross property and equipment
|
|
$
|
125,989,172
|
|
|
$
|
125,578,966
|
|
Less: accumulated depreciation
|
|
(8,454,299
|
)
|
|
(5,948,988
|
)
|
||
Net property and equipment
|
|
$
|
117,534,873
|
|
|
$
|
119,629,978
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
Depreciation Expense
|
$
|
838,462
|
|
|
$
|
831,480
|
|
|
$
|
2,515,408
|
|
|
$
|
2,497,138
|
|
September 30, 2016
|
||||||||||||||||
|
|
September 30, 2016
|
|
Fair Value
|
||||||||||||
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Other equity securities
|
|
$
|
9,465,736
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,465,736
|
|
Total Assets
|
|
$
|
9,465,736
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,465,736
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swap Derivative
|
|
$
|
49,143
|
|
|
$
|
—
|
|
|
$
|
49,143
|
|
|
$
|
—
|
|
Total Liabilities
|
|
$
|
49,143
|
|
|
$
|
—
|
|
|
$
|
49,143
|
|
|
$
|
—
|
|
December 31, 2015
|
||||||||||||||||
|
|
December 31, 2015
|
|
Fair Value
|
||||||||||||
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Other equity securities
|
|
$
|
8,393,683
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,393,683
|
|
Interest Rate Swap Derivative
|
|
98,259
|
|
|
—
|
|
|
98,259
|
|
|
—
|
|
||||
Total Assets
|
|
$
|
8,491,942
|
|
|
$
|
—
|
|
|
$
|
98,259
|
|
|
$
|
8,393,683
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
|
(Unaudited)
|
|
(Unaudited)
|
||||
Assets
|
|
|
|
|
||||
Current assets
|
|
$
|
20,504
|
|
|
$
|
24,276
|
|
Noncurrent assets
|
|
700,502
|
|
|
696,461
|
|
||
Total Assets
|
|
$
|
721,006
|
|
|
$
|
720,737
|
|
Liabilities
|
|
|
|
|
||||
Current liabilities
|
|
$
|
14,048
|
|
|
$
|
19,993
|
|
Noncurrent liabilities
|
|
266,609
|
|
|
246,808
|
|
||
Total Liabilities
|
|
$
|
280,657
|
|
|
$
|
266,801
|
|
|
|
|
|
|
||||
Partner's equity
|
|
440,349
|
|
|
453,936
|
|
||
Total liabilities and partner's equity
|
|
$
|
721,006
|
|
|
$
|
720,737
|
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
(Unaudited)
|
|
(Unaudited)
|
||||||||||||
|
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
Revenues
|
|
$
|
26,673
|
|
|
$
|
24,084
|
|
|
$
|
78,983
|
|
|
$
|
56,751
|
|
Operating expenses
|
|
21,287
|
|
|
21,526
|
|
|
64,171
|
|
|
54,194
|
|
||||
Income (Loss) from Operations
|
|
$
|
5,386
|
|
|
$
|
2,558
|
|
|
$
|
14,812
|
|
|
$
|
2,557
|
|
Other income
|
|
2,207
|
|
|
2,683
|
|
|
6,950
|
|
|
9,837
|
|
||||
Net Income
|
|
$
|
7,593
|
|
|
$
|
5,241
|
|
|
$
|
21,762
|
|
|
$
|
12,394
|
|
Less: Net Income attributable to non-controlling interests
|
|
(7,551
|
)
|
|
(5,206
|
)
|
|
(21,630
|
)
|
|
(12,269
|
)
|
||||
Net Income attributable to Partner's Capital
|
|
$
|
42
|
|
|
$
|
35
|
|
|
$
|
132
|
|
|
$
|
125
|
|
Carrying and Fair Value Amounts
|
||||||||||||||||||
|
|
Level within fair value hierarchy
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
|
Carrying
Amount
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
|||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
Level 1
|
|
$
|
10,107,754
|
|
|
$
|
10,107,754
|
|
|
$
|
14,618,740
|
|
|
$
|
14,618,740
|
|
Escrow receivable
|
|
Level 2
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,392,917
|
|
|
$
|
1,392,917
|
|
Financing notes receivable (Note 4)
|
|
Level 3
|
|
$
|
1,500,000
|
|
|
$
|
1,500,000
|
|
|
$
|
7,675,626
|
|
|
$
|
7,675,626
|
|
Derivative asset
|
|
Level 2
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
98,259
|
|
|
$
|
98,259
|
|
Financial Liabilities:
|
|
|
|
|
|
|
|
|
||||||||||
Secured Credit Facilities
(1)
|
|
Level 2
|
|
$
|
91,698,387
|
|
|
$
|
91,698,387
|
|
|
$
|
105,440,842
|
|
|
$
|
105,440,842
|
|
Unsecured convertible senior notes
|
|
Level 2
|
|
$
|
111,048,098
|
|
|
$
|
112,860,000
|
|
|
$
|
111,423,910
|
|
|
$
|
87,622,591
|
|
Derivative liability
|
|
Level 2
|
|
$
|
49,143
|
|
|
$
|
49,143
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1) Includes current maturities
|
|
|
|
|
|
|
|
|
|
|
Deferred Financing Cost Amortization Expense
(1)(2)
|
|||||||||||||||
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
Regions Credit Facilities
|
$
|
272,074
|
|
|
$
|
368,486
|
|
|
$
|
806,452
|
|
|
$
|
723,694
|
|
Pinedale Credit Facility
|
—
|
|
|
129,216
|
|
|
156,330
|
|
|
387,648
|
|
||||
Total Deferred Debt Cost Amortization
|
$
|
272,074
|
|
|
$
|
497,702
|
|
|
$
|
962,782
|
|
|
$
|
1,111,342
|
|
(1) Amortization of deferred debt issuance costs is included in interest expense in the Consolidated Statements of Income.
|
|||||||||||||||
(2) For the amount of deferred debt costs amortization relating to the Convertible Notes included in the Consolidated Statements of Income, see the Convertible Debt footnote.
|
Total Remaining Contractual Payments
|
||||||||||||||||
Year
|
|
Regions
Revolver
|
|
Regions Term Loan
|
|
Pinedale Credit Facility
|
|
Total
|
||||||||
2016
|
|
$
|
—
|
|
|
$
|
1,615,000
|
|
|
$
|
167,139
|
|
|
$
|
1,782,139
|
|
2017
|
|
—
|
|
|
6,460,000
|
|
|
668,556
|
|
|
7,128,556
|
|
||||
2018
|
|
—
|
|
|
6,460,000
|
|
|
668,556
|
|
|
7,128,556
|
|
||||
2019
|
|
44,000,000
|
|
|
23,820,000
|
|
|
668,556
|
|
|
68,488,556
|
|
||||
2020
|
|
—
|
|
|
—
|
|
|
668,556
|
|
|
668,556
|
|
||||
Thereafter
|
|
—
|
|
|
—
|
|
|
6,733,102
|
|
|
6,733,102
|
|
||||
Total
|
|
$
|
44,000,000
|
|
|
$
|
38,355,000
|
|
|
$
|
9,574,465
|
|
|
$
|
91,929,465
|
|
Convertible Note Interest Expense
|
||||||||||||||||
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
7% Convertible Notes
|
|
$
|
2,017,167
|
|
|
$
|
2,012,500
|
|
|
$
|
6,013,195
|
|
|
$
|
2,057,222
|
|
Discount Amortization
|
|
185,391
|
|
|
192,418
|
|
|
559,353
|
|
|
192,418
|
|
||||
Deferred Debt Issuance Amortization
|
|
11,539
|
|
|
9,266
|
|
|
36,497
|
|
|
9,266
|
|
||||
Total
|
|
$
|
2,214,097
|
|
|
$
|
2,214,184
|
|
|
$
|
6,609,045
|
|
|
$
|
2,258,906
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
Management fees
|
$
|
1,934,873
|
|
|
$
|
1,716,423
|
|
|
$
|
5,391,569
|
|
|
$
|
4,055,919
|
|
Acquisition and professional fees
|
655,810
|
|
|
792,939
|
|
|
2,187,459
|
|
|
2,451,485
|
|
||||
Other expenses
|
431,186
|
|
|
328,400
|
|
|
1,505,933
|
|
|
804,206
|
|
||||
Total
|
$
|
3,021,869
|
|
|
$
|
2,837,762
|
|
|
$
|
9,084,961
|
|
|
$
|
7,311,610
|
|
Net Distributions and Dividends Recorded as Income
|
|||||||||||||||
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
September 30, 2016
|
|
September 30, 2015
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||
Gross distributions and dividends received from investment securities
|
$
|
278,782
|
|
|
$
|
274,550
|
|
|
$
|
753,655
|
|
|
$
|
742,056
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
Distributions and dividends received in prior period previously deemed a return of capital (recorded as a cost reduction) and reclassified as income in a subsequent period
|
—
|
|
|
—
|
|
|
117,004
|
|
|
371,323
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Distributions and dividends received in current period deemed a return of capital and not recorded as income (recorded as a cost reduction) in the current period
|
1,259
|
|
|
32,987
|
|
|
3,394
|
|
|
87,998
|
|
||||
Net distributions and dividends recorded as income
|
$
|
277,523
|
|
|
$
|
241,563
|
|
|
$
|
867,265
|
|
|
$
|
1,025,381
|
|
Book Value Per Share
|
|||||||
Analysis of Equity
|
September 30, 2016
|
|
December 31, 2015
|
||||
Series A Cumulative Redeemable Preferred Stock 7.375%, $56,250,000 liquidation preference ($2,500 per share, $0.001 par value), 10,000,000 authorized; 22,500 issued and outstanding at September 30, 2016, and December 31, 2015
|
$
|
56,250,000
|
|
|
$
|
56,250,000
|
|
Capital stock, non-convertible, $0.001 par value; 11,876,389 and 11,939,697 shares issued and outstanding at September 30, 2016, and December 31, 2015 (100,000,000 shares authorized)
|
11,876
|
|
|
11,940
|
|
||
Additional paid-in capital
|
351,754,151
|
|
|
361,581,507
|
|
||
Accumulated other comprehensive income (loss)
|
(14,235
|
)
|
|
190,797
|
|
||
Total CorEnergy Stockholders' Equity
|
408,001,792
|
|
|
418,034,244
|
|
||
Subtract: 7.375% Series A cumulative redeemable preferred stock
|
(56,250,000
|
)
|
|
(56,250,000
|
)
|
||
Total CorEnergy Common Equity
|
$
|
351,751,792
|
|
|
$
|
361,784,244
|
|
Common shares outstanding
|
11,876,389
|
|
|
11,939,697
|
|
||
Book Value per Common Share
|
$
|
29.62
|
|
|
$
|
30.30
|
|
•
|
GIGS lease payments began July 1, 2015 and therefore, nine months of rent during 2016 versus only three months during 2015 has provided
$16.4 million
.
|
•
|
Proceeds from final escrow distribution related to the sale of Vantacore of approximately
$1.4 million
were received April 1, 2016.
|
•
|
Increase in interest paid of approximately
$5.2 million
primarily related to the financing of the June 2015 GIGS transaction through the issuance of $115 million in Convertible Notes and a $45 million draw on the Regions Credit Facility.
|
•
|
Due to reduced drilling and disposal activities in our borrowers' areas of operations, revenue from our financing notes decreased from the prior period by approximately
$1.3 million
.
|
•
|
The net operating results of MoGas, acquired in November 2014, provided $8.4 million.
|
•
|
When the Portland Terminal was acquired in January 2014, a certain amount of construction was required before the terminal became fully operational. Accordingly, the lessor was granted a partial rent holiday during the first six months of the lease. For the nine months ended September 30, 2015, the Portland Terminal lease payments had increased to the full amount of the base rent and had also increased as a result of nearly $9.7 million in completed construction projects, contributing approximately $2.0 million to the increase in cash provided by operating activities as compared to the prior year.
|
•
|
Additional payments to the Company resulting from a July 2014 increase to the Black Bison financing notes and December 2014 initial funding of the Four Wood financing notes contributed nearly $946 thousand to the increase over prior year.
|
•
|
Starting July 2015, cash provided by the GIGS lease payments for the current quarter was $7.9 million.
|
•
|
In conjunction with the agreement to sell EIP to PNM on April 1, 2015 upon expiration of the lease, the lease payments that would have been due over the remainder of the term were accelerated and paid in full on January 1, 2014. Therefore, the first half of 2014 included nearly $4.3 million in advance rental payments.
|
•
|
A net increase in the Company’s asset base for the nine months ended September 30, 2015 as compared to the prior year period resulted in approximately $1.7 million in additional management fees paid to Corridor.
|
•
|
Increase in cash interest paid of approximately $553 thousand due to increased facility sizes and borrowings.
|
•
|
Increase in cash taxes paid of approximately $179 thousand due to estimated tax payments made starting in 2015 related to the Lightfoot investment.
|
•
|
Net proceeds from the sale of assets and liabilities held for sale of
$645 thousand
.
|
•
|
Purchases of property and equipment of
$476 thousand
.
|
•
|
Proceeds received on foreclosure of BB Intermediate of
$223 thousand
.
|
•
|
Funding to close operations of Black Bison and Four Wood financing notes of
$202 thousand
.
|
•
|
Deployed approximately $246.5 million to acquire the GIGS assets.
|
•
|
$3.7 million of capital improvements in connection with the Portland Terminal facility.
|
•
|
The sale of the EIP asset on April 1, 2015 provided additional cash of approximately $7.7 million.
|
•
|
Repurchases of common stock of approximately
$2.0 million
.
|
•
|
Repurchases of convertible debt of approximately
$900 thousand
.
|
•
|
Common and preferred dividends paid of
$26.3 million
and
$3.1 million
, respectively.
|
•
|
$44.0 million
drawn on the Regions revolver for use in connection with the Pinedale refinancing.
|
•
|
Principal payments of
$53.0 million
in connection with the Pinedale facility.
|
•
|
Principal payments on the term note of
$4.8 million
.
|
•
|
The January 2015 preferred stock offering generated approximately $54.2 million, of which, $32.0 million was subsequently used to pay down the Regions Revolver.
|
•
|
In connection with the acquisition of the GIGS assets, the Company raised a total of $226.7 million as follows:
|
◦
|
$73.2 million in net proceeds raised in a follow-on common stock offering;
|
◦
|
$111.3 million in net proceeds from the 7.00% Convertible Note offering; and
|
◦
|
$42.0 million drawn on the Regions Revolver.
|
•
|
On July 8, 2015 the company drew $45 million on a term note, the proceeds of which were used to pay off the Regions Revolver. The company also made its first principal payment of $900 thousand on the term note.
|
•
|
Common and preferred dividends paid of approximately $19.9 million and $2.5 million, respectively.
|
•
|
Distributions to non-controlling interests of $2.0 million
|
•
|
Principal payments on the $70 million term loan totaling $2.6 million.
|
Liquidity and Capitalization
|
|||||||
|
September 30, 2016
|
|
December 31, 2015
|
||||
Cash and cash equivalents
|
$
|
10,107,754
|
|
|
$
|
14,618,740
|
|
|
|
|
|
||||
Revolving credit facility
|
44,000,000
|
|
|
—
|
|
||
Long-term debt (including current maturities)
|
149,172,020
|
|
|
216,864,752
|
|
||
Stockholders' equity:
|
|
|
|
||||
Series A Cumulative Redeemable Preferred Stock 7.375%, $0.001 par value
|
56,250,000
|
|
|
56,250,000
|
|
||
Capital stock, non-convertible, $0.001 par value
|
11,876
|
|
|
11,940
|
|
||
Additional paid-in capital
|
351,754,151
|
|
|
361,581,507
|
|
||
Accumulated other comprehensive (loss) income
|
(14,235
|
)
|
|
190,797
|
|
||
CorEnergy equity
|
408,001,792
|
|
418,034,244
|
||||
Total CorEnergy capitalization
|
$
|
601,173,812
|
|
|
$
|
634,898,996
|
|
Contractual Obligations
|
|||||||||||||||||||
|
Notional Value
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Pinedale LP Debt
(2)
|
$
|
9,574,465
|
|
|
$
|
668,556
|
|
|
$
|
1,337,112
|
|
|
$
|
7,568,797
|
|
|
$
|
—
|
|
Interest payments on Pinedale LP Debt
(2)
|
|
|
751,537
|
|
|
1,342,124
|
|
|
892,729
|
|
|
—
|
|
||||||
Convertible Debt
|
$
|
114,000,000
|
|
|
—
|
|
|
—
|
|
|
114,000,000
|
|
|
—
|
|
||||
Interest payments on Convertible Debt
|
|
|
7,980,000
|
|
|
15,960,000
|
|
|
7,980,000
|
|
|
—
|
|
||||||
Regions Term Note
(1)
|
$
|
38,355,000
|
|
|
6,460,000
|
|
|
12,920,000
|
|
|
18,975,000
|
|
|
—
|
|
||||
Interest payment on Regions Term Note
|
|
|
1,387,203
|
|
|
2,031,667
|
|
|
183,850
|
|
|
—
|
|
||||||
Regions Revolver
|
$
|
44,000,000
|
|
|
—
|
|
|
—
|
|
|
44,000,000
|
|
|
—
|
|
||||
Interest payment on Regions Revolver
|
|
|
1,695,222
|
|
|
3,390,444
|
|
|
352,978
|
|
|
—
|
|
||||||
Totals
|
|
|
$
|
18,942,518
|
|
|
$
|
36,981,347
|
|
|
$
|
193,953,354
|
|
|
$
|
—
|
|
||
(1)
The amount shown as the Notional Value for the Regions Term Note represents the outstanding principal balance at September 30, 2016.
|
|||||||||||||||||||
(2)
The amounts for Pinedale LP debt above represent Prudential's share of the principal and interest payments which is 18.95 percent of the total. The Company's share of the principal and interest are eliminated in consolidation as these became intercompany on March 30, 2016, due to CorEnergy taking over with Prudential as Refinancing Lenders on the Pinedale LP note. See Footnote 10, Credit Facilities, for further information.
|
•
|
A sale-leaseback transaction may be re-characterized as either a financing or a joint venture in a bankruptcy or insolvency proceeding. If the sale-leaseback were re-characterized as a financing, we might not be considered the owner of the subject property, and as a result would have the status of a creditor in relation to the lessee company. In that event, we would no longer have the right to sell or encumber our ownership interest in the property. Instead, we would have a claim against the lessee company for the amounts owed under the lease. Although we believe each of our lease agreements constitutes a true lease that should not be re-characterized, there is no guaranty a court would agree. In the event of re-characterization, our claim under a lease agreement would either be secured or unsecured. We will take steps to create and perfect a security interest in our lease agreement such that our claim would be secured in the event of a re-characterization, but such attempts could be subject to challenge by the debtor or creditors and there is no assurance a court would find our claim to be secured. The lessee company/debtor under this scenario, might have the ability to restructure the terms, interest rate and amortization schedule of its outstanding balance. If approved by the bankruptcy court, we could be bound by the new terms, and prevented from foreclosing any lien on the property. If the sale-leaseback were re-characterized as a joint venture, we and the lessee company could be treated as co-venturers with regard to the property. As a result, we could be held liable, under some circumstances, for debts incurred by the lessee company relating to the property.
|
•
|
Subject to the re-characterization risk above, the lessee could either assume or reject the lease in a bankruptcy proceeding. Generally, the lessee would be required to make rent payments to us during its bankruptcy until it rejects the lease (for leases that are personal property leases, the lessee need not make rental payments that arise from the petition date until 60 days after the order for relief is entered in the bankruptcy case). If the lessee assumes the lease, the bankruptcy court would not be able to change the rental amount or any other lease provision that could financially impact us. However, if the lessee rejects the lease, the facility would be returned to us, though there may be a delay as a result of the bankruptcy in such return. We may not be able to identify a new tenant, as interest in leasing certain of our assets would be dependent on ownership of an interest in nearby mineral rights. In addition, any new tenant would need to be a qualified reputable operator of such energy infrastructure assets with the wherewithal and capability of acting as our tenant. There is no assurance that we would be able to identify a tenant that meets these criteria, or that we could enter into a new lease with any such tenant on terms that are as favorable as the lease terms that were in place with the prior tenant. In that event, if we were able to re-lease the affected facility to a new tenant only on unfavorable terms or after a significant delay, we could lose some or all of the revenue from that facility for an extended period of time. If the lease agreement is rejected, our claim against the lessee and/or parent guarantor could be subject to a statutory cap under section 502(b)(6) of the Bankruptcy Code to the extent the lease agreement is deemed to be a lease for real property rather than a lease for personal property. Such cap generally limits the amount of a claim for lease-based damages in the event of a rejection to the greater of one year's rent or 15 percent of the rent reserved for the remaining lease term, not to exceed 3 years. We believe that any of our lease agreements would be characterized as a real property lease rather than a personal property lease, though a court could hold to the contrary.
|
Exhibit No.
|
Description of Document
|
||
|
|||
12.1
|
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends- filed herewith
|
||
31.1
|
Certification by Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - filed herewith
|
||
31.2
|
Certification by Chief Accounting Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - filed herewith
|
||
32.1
|
Certification by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - furnished herewith
|
||
101
|
The following materials from CorEnergy Infrastructure Trust, Inc.’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income and Comprehensive Income, (iii) the Consolidated Statements of Equity, (iv) the Consolidated Statements of Cash Flows and (iv) the Notes to Consolidated Financial Statements - furnished herewith
|
CORENERGY INFRASTRUCTURE TRUST, INC.
|
||
|
|
(Registrant)
|
|
|
|
By:
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/s/ Rebecca M. Sandring
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Rebecca M. Sandring
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Chief Accounting Officer, Treasurer and Secretary
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(Principal Accounting Officer and Principal Financial Officer)
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November 4, 2016
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By:
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/s/ David J. Schulte
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David J. Schulte
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Chief Executive Officer and Director
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(Principal Executive Officer)
|
|
|
November 4, 2016
|
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|
|
1 Year CorEnergy Infrastructure Chart |
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