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CorEnergy Announces 2021 Results and 2022 Outlook

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KANSAS CITY, Mo., March 14, 2022--(BUSINESS WIRE)--CorEnergy Infrastructure Trust, Inc. ("CorEnergy" or the "Company") today announced financial results for the fourth quarter 2021 and fiscal year ended December 31, 2021.

Fourth Quarter 2021 and Recent Highlights

  • Reported consolidated revenue of $35.8 million for the three months ended December 31, 2021.

  • Average transported crude oil volumes decreased 3.7% from third quarter.

  • The fourth quarter revenue reflected the full benefit of the third quarter’s tariff increase, mitigating the impact of volume declines.

  • The Company published its inaugural ESG report.

  • Declared a fourth quarter 2021 Common Stock dividend of $0.05 per share and a 7.375% Series A Cumulative Redeemable Preferred Stock dividend of $0.4609375 per depositary share. Both dividends were paid on February 28, 2022, to stockholders of record on February 14, 2022.

Management Commentary

"In 2021 CorEnergy overcame the pandemic-related challenges of 2020 and we are now positioned for the future. We were able to transition our business model to a low-cost structure; owning and operating energy pipelines and storage assets. We optimized our capital structure for the benefit of our stockholders, internalized our REIT manager, and positioned our business for future growth. The benefits of these efforts were apparent in the third and fourth quarter run rate, as we established our new baseline in volumes and revenue that demonstrated our ability to fully cover our dividend expectations," said Dave Schulte, Chief Executive Officer. "We expect to continue to earn and pay our $0.20 annualized common dividend in 2022, with potential for modest long-term growth. We published our inaugural ESG report, confirming that we have always operated responsibly and are positioned to grow in the new energy transition marketplace as well as through incremental acquisitions."

Fourth Quarter and Fiscal Year 2021 Performance Summary

Fourth Quarter and Fiscal Year 2021 financial highlights are as follows:

For the Three Months Ended

For the Year Ended

December 31, 2021

December 31, 2021

Per Share

Per Share

Total3

Basic

Diluted

Total

Basic

Diluted

Net Loss (Attributable to Common Stockholders)

$

(4,796,465

)

$

(0.31

)

$

(0.31

)

$

(20,926,685

)

$

(1.44

)

$

(1.44

)

Net Cash Provided by Operating Activities

$

5,059,826

$

17,298,110

Adjusted Net Income1

$

835,087

$

11,973,197

Cash Available for Distribution1

$

1,087,946

$

(1,399,583

)

Adjusted EBITDA2

$

12,273,711

$

43,591,789

Dividends Declared to Common Stockholders

$

0.05

$

0.20

1 Adjusted Net Income excludes special items for the three months ended December 31, 2021 of $1.3 million and for the year ended December 31, 2021 of $6.9 million which are transaction costs; however CAD has not been so adjusted. Reconciliations of Adjusted Net Income and CAD, as presented, to Net Income (Loss) and Net Cash Provided by Operating Activities are included at the end of this press release. See Note 1 below for additional information.

2 Adjusted EBITDA excludes special items for the three months ended December 31, 2021 of $1.3 million and for the year ended December 31, 2021 of $6.9 million which are transaction costs. Reconciliation of Adjusted EBITDA, as presented, to Net Income (Loss) is included at the end of this press release. See Note 2 below for additional information.

Business Development Activities

CorEnergy maintains an active pipeline of business development opportunities, including traditional infrastructure and potential-alternative uses for its rights-of-way. The Company closely evaluates potential opportunities to ensure alignment with REIT-qualifying business activities. CorEnergy has identified multiple opportunities for negotiated transactions that could expand the Company's market reach or REIT-qualifying revenue sources. The Company will continue to prudently advance these opportunities.

Outlook

CorEnergy provided the following outlook for 2022:

  • Expected adjusted EBITDA of $44.0-$46.0 million,

  • Maintenance capital expenditures expected to be in the range of $8.0 million to $9.0 million in 2022; quarterly maintenance costs are not expected to be uniform throughout the year due to project timing,

  • Maintain at least $0.20/share annual run rate common dividend with upside potential from commercial opportunities.

Dividend and Distribution Declarations

The Company currently expects all of its 2022 Common Stock and Preferred Stock dividends will be characterized as Return of Capital for tax purposes.

Common Stock: A fourth quarter 2021 dividend of $0.05 per share was declared for CorEnergy's common stock. The dividend was paid on February 28, 2022, to stockholders of record on February 14, 2022.

Preferred Stock: For the Company's 7.375% Series A Cumulative Redeemable Preferred Stock, a cash dividend of $0.4609375 per depositary share was declared. The preferred stock dividend, which equates to an annual dividend payment of $1.84375 per depositary share, was paid on February 28, 2022, to stockholders of record on February 14, 2022.

Class A-1 Units: Pursuant to the terms of the Crimson transaction, the holders of Crimson Class A-1 Units received a cash distribution of $0.4609375 per unit based on the Company’s declared Series A Preferred dividend.

Class A-2 and Class A-3 Units: Pursuant to the terms of the Crimson transaction, the holders of Crimson Class A-2 and Class A-3 Units did not receive a cash distribution this quarter, since no dividend was declared on the underlying Class B Common Stock.

Fiscal Year 2021 Earnings Conference Call

CorEnergy will host a conference call on Monday, March 14, 2022 at 10:00 a.m. Central Time to discuss its financial results. Please dial into the call at +1-973-528-0011 at least five minutes prior to the scheduled start time. The call will also be webcast in a listen-only format. A link to the webcast will be accessible at corenergy.reit.

A replay of the call will be available until 10:00 a.m. Central Time on April 14, 2022, by dialing +1-919-882-2331. The Conference ID is 44517. A webcast replay of the conference call will also be available on the Company’s website, corenergy.reit.

About CorEnergy Infrastructure Trust, Inc.

CorEnergy Infrastructure Trust, Inc. (NYSE: CORR, CORRPrA) is a real estate investment trust that owns and operates or leases regulated natural gas transmission and distribution lines and crude oil gathering, storage and transmission pipelines and associated rights-of-way. For more information, please visit corenergy.reit.

Forward-Looking Statements

This press release contains certain statements that may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included herein are "forward-looking statements." Although CorEnergy believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including, among others, failure to realize the anticipated benefits of the Crimson transaction; the risk that CPUC approval is not obtained, is delayed or is subject to unanticipated conditions that could adversely affect CorEnergy or the expected benefits of the Crimson transaction; risks related to the uncertainty of the projected financial information with respect to Crimson, and those factors 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

1 Management uses CAD as a measure of long-term sustainable performance. Adjusted Net Income and CAD are non-GAAP measures. Adjusted Net Income represents net income (loss) adjusted for loss on impairment of leased property; loss on impairment and disposal of leased property; loss on termination of lease; deferred rent receivable write-off; loss (gain) on extinguishment of debt; gain on sale of equipment and transaction-related costs. CAD represents Adjusted Net Income adjusted for depreciation, amortization and ARO accretion (cash flows) and deferred tax expense (benefit) less transaction costs; maintenance capital expenditures; preferred dividend requirements and mandatory debt amortization. Reconciliations of Adjusted Net Income and CAD to Net Income (Loss) and Net Cash Provided By Operating Activities are included in the additional financial information attached to this press release.

2 Management uses Adjusted EBITDA as a measure of operating performance. Adjusted EBITDA represents net income (loss) adjusted for items such as gain on sale of equipment; and transaction-related costs. Adjusted EBITDA is further adjusted for depreciation, amortization and ARO accretion expense; income tax expense (benefit) and interest expense. The reconciliation of Adjusted EBITDA to Net Income (Loss) is included in the additional financial information attached to this press release.

Consolidated Balance Sheets

December 31, 2021

December 31, 2020

Assets

Property and equipment, net of accumulated depreciation of $37,022,035 and $22,580,810 (Crimson VIE:$338,452,392 and $0, respectively)

$

441,430,193

$

106,224,598

Leased property, net of accumulated depreciation of $258,207 and $6,832,167

1,267,821

64,938,010

Financing notes and related accrued interest receivable, net of reserve of $600,000 and $600,000

1,036,660

1,209,736

Cash and cash equivalents (Crimson VIE:$1,870,000 and $0, respectively)

12,496,478

99,596,907

Accounts and other receivables (Crimson VIE: $11,291,749 and $0, respectively)

15,367,389

3,675,977

Due from affiliated companies (Crimson VIE: $676,825 and $0, respectively)

676,825

Deferred costs, net of accumulated amortization of $345,775 and $2,130,334

796,572

1,077,883

Inventory (Crimson VIE: $3,839,865 and $0, respectively)

3,953,523

87,940

Prepaid expenses and other assets (Crimson VIE: $5,004,566 and $0, respectively)

9,075,043

2,054,804

Operating right-of-use assets (Crimson VIE: $5,647,631 and $0, respectively)

6,075,939

85,879

Deferred tax asset, net

206,285

4,282,576

Goodwill

16,210,020

1,718,868

Total Assets

$

508,592,748

$

284,953,178

Liabilities and Equity

Secured credit facilities, net of debt issuance costs of $1,275,244 and $0

$

99,724,756

$

Unsecured convertible senior notes, net of discount and debt issuance costs of $2,384,170 and $3,041,870

115,665,830

115,008,130

Asset retirement obligation

8,762,579

Accounts payable and other accrued liabilities (Crimson VIE: $9,743,904 and $0, respectively)

17,036,064

4,628,847

Management fees payable

971,626

Income tax liability

Due to affiliated companies (Crimson VIE: $648,316 and $0, respectively)

648,316

Operating lease liability (Crimson VIE: $5,647,036 and $0, respectively)

6,046,657

56,441

Unearned revenue (Crimson VIE: $199,405 and $0, respectively)

5,839,602

6,125,728

Total Liabilities

$

244,961,225

$

135,553,351

Equity

Series A Cumulative Redeemable Preferred Stock 7.375%, $129,525,675 and $125,270,350 liquidation preference ($2,500 per share, $0.001 par value), 10,000,000 authorized; 51,810 and 50,108 issued and outstanding at December 31, 2021 and December 31, 2020, respectively

$

129,525,675

$

125,270,350

Capital stock, non-convertible, $0.001 par value; 14,893,184 and 13,651,521 shares issued and outstanding at December 31, 2021 and December 31, 2020 (100,000,000 shares authorized)

14,893

13,652

Class B Common Stock, $0.001 par value; 683,761 and 0 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively (11,896,100 shares authorized)

684

Additional paid-in capital

338,302,735

339,742,380

Retained deficit

(327,157,636

)

(315,626,555

)

Total CorEnergy Equity

140,686,351

149,399,827

Non-controlling Interest (Crimson)

122,945,172

Total Equity

263,631,523

149,399,827

Total Liabilities and Equity

$

508,592,748

$

284,953,178

Consolidated Statements of Operations

(Unaudited)

For the Three Months Ended
December 31,

For the Years Ended
December 31,

2021

2020

2021

2020

Revenue

Transportation and distribution revenue

$

32,854,736

$

5,815,990

$

116,536,612

$

19,972,351

Pipeline loss allowance subsequent sales

2,491,014

8,606,850

Lease revenue

37,175

30,125

1,246,090

21,351,123

Deferred rent receivable write-off

(30,105,820

)

Other revenue

384,913

32,098

1,744,244

120,417

Sales revenue

Total Revenue

35,767,838

5,878,213

128,133,796

11,338,071

Expenses

Transportation and distribution expenses

16,350,585

2,023,900

58,146,006

6,059,707

Pipeline loss allowance subsequent sales cost of revenue

2,303,500

8,194,040

General and administrative

6,266,627

2,036,287

26,641,161

12,231,922

Depreciation, amortization and ARO accretion expense

4,464,037

2,174,630

14,801,676

13,654,429

Loss on impairment of leased property

140,268,379

Loss on impairment and disposal of leased property

5,811,779

146,537,547

Loss on termination of lease

165,644

458,297

Total Expenses

29,384,749

6,234,817

113,760,306

319,210,281

Operating Income (Loss)

$

6,383,089

$

(356,604

)

$

14,373,490

$

(307,872,210

)

Other Income (Expense)

Other income

$

402,823

$

21,937

$

769,682

$

471,449

Interest expense

(3,163,480

)

(2,247,994

)

(12,742,157

)

(10,301,644

)

Gain (loss) on extinguishment of debt

(861,814

)

11,549,968

Total Other Income (Expense)

(2,760,657

)

(2,226,057

)

(12,834,289

)

1,719,773

Income (loss) before income taxes

3,622,432

(2,582,661

)

1,539,201

(306,152,437

)

Taxes

Current tax expense (benefit)

(42,845

)

3,662

(1,531

)

(395,843

)

Deferred tax expense (benefit)

3,853,952

85,357

4,076,290

310,985

Income tax expense (benefit), net

3,811,107

89,019

4,074,759

(84,858

)

Net Income (Loss)

(188,675

)

(2,671,680

)

(2,535,558

)

(306,067,579

)

Less: Net Income attributable to non-controlling interest

2,219,660

8,995,523

Net Income (Loss) attributable to CorEnergy Stockholders

$

(2,408,335

)

$

(2,671,680

)

$

(11,531,081

)

$

(306,067,579

)

Preferred dividend requirements

2,388,130

2,309,672

9,395,604

9,189,809

Net Income (Loss) attributable to Common Stockholders

$

(4,796,465

)

$

(4,981,352

)

$

(20,926,685

)

$

(315,257,388

)

Earnings (Loss) Per Common Share:

Basic

$

(0.31

)

$

(0.36

)

$

(1.44

)

$

(23.09

)

Diluted

$

(0.31

)

$

(0.36

)

$

(1.44

)

$

(23.09

)

Weighted Average Shares of Common Stock Outstanding:

Basic

15,559,737

13,651,521

14,581,850

13,650,718

Diluted

15,559,737

13,651,521

14,581,850

13,650,718

Dividends declared per share

$

0.050

$

0.050

$

0.200

$

0.900

Consolidated Statements of Cash Flows

For the Years Ended December 31,

2021

2020

Operating Activities

Net loss

$

(2,535,558

)

$

(306,067,579

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Deferred income tax

4,076,290

310,985

Depreciation, amortization and ARO accretion

16,406,557

14,924,464

Loss on impairment of leased property

140,268,379

Loss on impairment and disposal of leased property

5,811,779

146,537,547

Loss on termination of lease

165,644

458,297

Deferred rent receivable write-off, noncash

30,105,820

(Gain) loss on extinguishment of debt

861,814

(11,549,968

)

Gain on sale of equipment

(16,508

)

(13,683

)

Changes in assets and liabilities:

Deferred rent receivables

(247,718

)

Accounts and other receivables

(92,089

)

467,257

Financing note accrued interest receivable

(8,780

)

(18,069

)

Inventory

(2,183,946

)

Prepaid expenses and other assets

(958,283

)

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