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CorEnergy Announces First Quarter 2022 Results

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Announces First CO2 Project

KANSAS CITY, Mo., May 12, 2022--(BUSINESS WIRE)--CorEnergy Infrastructure Trust, Inc. (NYSE: CORR, CORRPrA) ("CorEnergy" or the "Company") today announced financial results for the first quarter, ended March 31, 2022.

First Quarter 2022 and Recent Highlights

  • Reported consolidated revenue of $32.9 million for the three months ended March 31, 2022.

  • Generated Net Income of $4.4 million and Adjusted EBITDA of $12.0 million.

  • Published CorEnergy's inaugural ESG report, accessible at corenergy.reit, indicating a lower emission profile than average oil and gas pipelines on a CO2e per MMBTU-mile basis.

  • Signed our first non-binding memorandum of understanding to provide the transportation solution for a carbon sequestration project in California.

  • Declared a first quarter 2022 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 will be paid on May 31, 2022, to stockholders of record on May 17, 2022.

Management Commentary

"Our first quarter results demonstrate the benefit of our reorganized operations and reduced costs, leading to better dividend coverage. Looking to the rest of the year, we see a number of opportunities to positively impact transportation volumes, including the return of volumes on the Amplify pipeline and potential resolution of the permitting case in California," said Dave Schulte, Chief Executive Officer.

"On the strategic front, we have spoken about our potential for engaging with project developers and have begun working on specific mandates to enable the transportation of CO2. We are pleased to announce that we signed our first non-binding memorandum of understanding to provide the transportation solution for a carbon sequestration project in California. We believe that carbon sequestration projects could enable us to maximize utilization of our pipeline assets and rights of ways."

First Quarter Performance Summary

First quarter 2022 reflects full impact of the activity from Crimson. First quarter financial highlights are as follows:

For the Three Months Ended

March 31, 2022

Per Share

Total

Basic

Diluted

Net Income (Attributable to Common Stockholders)

$

(83,667

)

$

(0.01

)

$

(0.01

)

Net Cash Provided by Operating Activities

$

8,673,048

Adjusted Net Income1

$

4,664,852

Cash Available for Distribution (CAD)1

$

2,186,005

Adjusted EBITDA2

$

12,011,631

Dividends Declared to Common Stockholders

$

0.05

1 Adjusted Net Income excludes special items of $300 thousand 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 of $300 thousand 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 has identified multiple opportunities for negotiated transactions that could expand the Company's market reach or REIT qualifying revenue sources, including both 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, and will continue to prudently advance these opportunities.

Outlook

CorEnergy updated its outlook for 2022 to the following, reflecting changes in the timing expectations around the return of Amplify offshore volumes to CorEnergy's systems and a softer volume outlook primarily due to the delayed court proceedings around drilling permits:

  • Expected adjusted EBITDA of $42.0-$44.0 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 $0.20/share annual run rate common dividend subject to Board approval on a quarterly basis.

Dividend and Distribution Declarations

The Company currently expects to characterize at least some portion of its 2022 Common Stock and Preferred Stock dividends as Return of Capital for tax purposes.

Common Stock: A first quarter 2022 dividend of $0.05 per share was declared for CorEnergy's common stock. The dividend will be paid on May 31, 2022, to stockholders of record on May 17, 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, will be paid on May 31, 2022, to stockholders of record on May 17, 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.

First Quarter Results Call

CorEnergy will host a conference call on Thursday, May 12, 2022 at 10:00 a.m. Central Time to discuss its financial results. To join the call, dial +1-973-528-0002 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 June 12, 2022, by dialing +1-919-882-2331. The Conference ID is 45298. 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 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 loss on impairment of leased property; loss on impairment and disposal of leased property; loss on termination of lease; loss (gain) on extinguishment of debt; 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

March 31, 2022

December 31, 2021

Assets

(Unaudited)

Property and equipment, net of accumulated depreciation of $40,964,057 and $37,022,035 (Crimson VIE: $336,342,641, and $338,452,392, respectively)

$

438,593,056

$

441,430,193

Leased property, net of accumulated depreciation of $268,522 and $258,207

1,257,505

1,267,821

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

993,994

1,036,660

Cash and cash equivalents (Crimson VIE: $5,308,695 and $1,870,000, respectively)

13,286,081

12,496,478

Accounts and other receivables (Crimson VIE: $8,871,936 and $11,291,749, respectively)

12,954,640

15,367,389

Due from affiliated companies (Crimson VIE: $169,968 and $676,825, respectively)

169,968

676,825

Deferred costs, net of accumulated amortization of $440,986 and $345,775

701,361

796,572

Inventory (Crimson VIE: $3,829,532 and $3,839,865, respectively)

3,968,235

3,953,523

Prepaid expenses and other assets (Crimson VIE: $5,176,012 and $5,004,566, respectively)

7,795,241

9,075,043

Operating right-of-use assets (Crimson VIE: $5,357,343 and $5,647,631, respectively)

5,730,264

6,075,939

Deferred tax asset, net

134,072

206,285

Goodwill

16,210,020

16,210,020

Total Assets

$

501,794,437

$

508,592,748

Liabilities and Equity

Secured credit facilities, net of deferred financing costs of $1,122,820 and $1,275,244

$

96,877,181

$

99,724,756

Unsecured convertible senior notes, net of discount and debt issuance costs of $2,219,745 and $2,384,170

115,830,255

115,665,830

Accounts payable and other accrued liabilities (Crimson VIE: $9,730,215 and $9,743,904, respectively)

12,986,409

17,036,064

Income tax liability

141,226

Due to affiliated companies (Crimson VIE: $423,491 and $648,316, respectively)

423,491

648,316

Operating lease liability (Crimson VIE: $5,044,501 and $5,647,036, respectively)

5,388,922

6,046,657

Unearned revenue (Crimson VIE $205,790 and $199,405, respectively)

5,885,621

5,839,602

Total Liabilities

$

237,533,105

$

244,961,225

Equity

Series A Cumulative Redeemable Preferred Stock 7.375%, $129,525,675 and $129,525,675 liquidation preference ($2,500 per share, $0.001 par value), 10,000,000 authorized; 51,810 and 51,810 issued and outstanding at March 31, 2022 and December 31, 2021, respectively

$

129,525,675

$

129,525,675

Common stock, non-convertible, $0.001 par value; 14,960,628 and 14,893,184 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively (100,000,000 shares authorized)

14,960

14,893

Class B Common Stock, $0.001 par value; 683,761 and 683,761 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively (11,896,100 shares authorized)

684

684

Additional paid-in capital

335,376,932

338,302,735

Retained deficit

(324,853,173

)

(327,157,636

)

Total CorEnergy Equity

140,065,078

140,686,351

Non-controlling interest (Crimson)

124,196,254

122,945,172

Total Equity

264,261,332

263,631,523

Total Liabilities and Equity

$

501,794,437

$

508,592,748

Consolidated Statements of Operations (Unaudited)

For the Three Months Ended

March 31, 2022

March 31, 2021(1)

Revenue

Transportation and distribution

$

29,761,354

$

21,295,139

Pipeline loss allowance subsequent sales

2,731,763

1,075,722

Lease

34,225

474,475

Other

345,009

195,162

Total Revenue

32,872,351

23,040,498

Expenses

Transportation and distribution

13,945,843

10,342,597

Pipeline loss allowance subsequent sales cost of revenue

2,192,649

948,856

General and administrative

5,142,865

9,836,793

Depreciation, amortization and ARO accretion

3,976,667

2,898,330

Loss on impairment and disposal of leased property

5,811,779

Loss on termination of lease

165,644

Total Expenses

25,258,024

30,003,999

Operating Income (loss)

$

7,614,327

$

(6,963,501

)

Other Income (expense)

Other income

$

120,542

$

63,526

Interest expense

(3,146,855

)

(2,931,007

)

Loss on extinguishment of debt

(861,814

)

Total Other Expense

(3,026,313

)

(3,729,295

)

Income (Loss) before income taxes

4,588,014

(10,692,796

)

Taxes

Current tax expense

151,044

27,867

Deferred tax expense (benefit)

72,213

(26,400

)

Income tax expense, net

223,257

1,467

Net Income (loss)

4,364,757

(10,694,263

)

Less: Net income attributable to non-controlling interest

2,060,294

1,605,308

Net income (loss) attributable to CorEnergy

$

2,304,463

$

(12,299,571

)

Preferred stock dividends

2,388,130

2,309,672

Net loss attributable to Common Stockholders

$

(83,667

)

$

(14,609,243

)

Net Loss Per Common Share:

Basic

$

(0.01

)

$

(1.07

)

Diluted

$

(0.01

)

$

(1.07

)

Weighted Average Shares of Common Stock Outstanding:

Basic

15,600,926

13,651,521

Diluted

15,600,926

13,651,521

Dividends declared per share

$

0.050

$

0.050

(1) The financial impacts of the Crimson assets only represent the period from February 1, 2021 to March 31, 2021.

Consolidated Statements of Cash Flows (Unaudited)

For the Three Months Ended

March 31, 2022

March 31, 2021

Operating Activities

Net income (loss)

$

4,364,757

$

(10,694,263

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Deferred income tax, net

72,212

(26,400

)

Depreciation, amortization and ARO accretion

4,388,926

3,267,034

Loss on impairment and disposal of leased property

5,811,779

Loss on termination of lease

165,644

Loss on extinguishment of debt

861,814

Changes in assets and liabilities:

Accounts and other receivables

2,505,213

(344,371

)

Financing note accrued interest receivable

(6,714

)

Inventory

(14,712

)

(26,111

)

Prepaid expenses and other assets

1,601,151

(70,539

)

Due from affiliated companies, net

282,032

1,225,906

Management fee payable

(363,380

)

Accounts payable and other accrued liabilities

(4,056,041

)

(1,611,539

)

Income tax liability

141,226

Operating lease liability

(657,735

)

(523,652

)

Unearned revenue

46,019

(146,369

)

Net cash provided by (used in) operating activities

$

8,673,048

$

(2,481,161

)

Investing Activities

Acquisition of Crimson Midstream Holdings, net of cash acquired

(68,094,324

)

Purchases of property and equipment, net

(1,098,499

)

(4,625,511

)

Proceeds from sale of property and equipment

79,600

Proceeds from insurance recovery

60,153

Principal payment on financing note receivable

42,666

32,500

Net cash used in investing activities

$

(1,055,833

)

$

(72,547,582

)

Financing Activities

Debt financing costs

(2,735,922

)

Dividends paid on Series A preferred stock

(2,388,130

)

(2,309,672

)

Dividends paid on Common Stock

(744,659

)

(682,576

)

Reinvestment of Dividends Paid to Common Stockholders

207,053

Distributions to non-controlling interest

(809,212

)

Advances on revolving line of credit

2,000,000

3,000,000

Payments on revolving line of credit

(3,000,000

)

(3,000,000

)

Principal payments on Crimson secured credit facility

(2,000,000

)

Net cash used in financing activities

$

(6,734,948

)

$

(5,728,170

)

Net change in Cash and Cash Equivalents

$

882,267

$

(80,756,913

)

Cash and Cash Equivalents at beginning of period

12,496,478

99,596,907

Cash and Cash Equivalents at end of period

$

13,378,745

$

18,839,994

Supplemental Disclosure of Cash Flow Information

Interest paid

$

4,500,333

$

4,254,050

Income taxes paid (net of refunds)

(716

)

5,026

Non-Cash Investing Activities

In-kind consideration for the Grand Isle Gathering System provided as partial consideration for the Crimson Midstream Holdings acquisition

$

$

48,873,169

Crimson Credit Facility assumed and refinanced in connection with the Crimson Midstream Holdings acquisition

105,000,000

Equity consideration attributable to non-controlling interest holder in connection with the Crimson Midstream Holdings acquisition

115,323,036

Purchases of property, plant and equipment in accounts payable and other accrued liabilities

1,178,271

868,190

Non-Cash Financing Activities

Change in accounts payable and accrued expenses related to debt financing costs

$

$

(235,198

)

Non-GAAP Financial Measurements (Unaudited)

The following table presents a reconciliation of Net Income (Loss), as reported in the Consolidated Statements of Operations, to Adjusted Net Income and CAD:

For the Three Months Ended

March 31, 2022

March 31, 2021(1)

Net Income (loss)

$

4,364,757

$

(10,694,263

)

Add:

Loss on impairment and disposal of leased property

5,811,779

Loss on termination of lease

165,644

Loss on extinguishment of debt

861,814

Transaction costs

300,095

5,074,796

Transaction bonus

1,036,492

Adjusted Net Income, excluding special items

$

4,664,852

$

2,256,262

Add:

Depreciation, amortization and ARO accretion (Cash Flows)

4,388,927

3,267,034

Deferred tax expense (benefit)

72,213

(26,400

)

Less:

Transaction costs

300,095

5,074,796

Transaction bonus

1,036,492

Maintenance capital expenditures

1,442,550

1,442,203

Preferred dividend requirements - Series A

2,388,130

2,309,672

Preferred dividend requirements - Non-controlling interest

809,212

Mandatory debt amortization

2,000,000

Cash Available for Distribution (CAD)

$

2,186,005

$

(4,366,267

)

(1) The financial impacts of the Crimson assets only represent the period from February 1, 2021 to March 31, 2021.

The following table reconciles net cash provided by (used in) operating activities, as reported in the Consolidated Statements of Cash Flows to CAD:

For the Three Months Ended

March 31, 2022

March 31, 2021(1)

Net cash provided by (used in) operating activities

$

8,673,048

$

(2,481,161

)

Changes in working capital

152,849

1,866,769

Maintenance capital expenditures

(1,442,550

)

(1,442,203

)

Preferred dividend requirements

(2,388,130

)

(2,309,672

)

Preferred dividend requirements - non-controlling interest

(809,212

)

Mandatory debt amortization included in financing activities

(2,000,000

)

Cash Available for Distribution (CAD)

$

2,186,005

$

(4,366,267

)

Other Special Items:

Transaction costs

$

300,095

$

5,074,796

Transaction bonus

1,036,492

Other Cash Flow Information:

Net cash used in investing activities

$

(1,148,498

)

$

(72,547,582

)

Net cash used in financing activities

(6,734,948

)

(5,728,170

)

(1) The financial impacts of the Crimson assets only represent the period from February 1, 2021 to March 31, 2021.

The following table presents a reconciliation of Net Income (Loss), as reported in the Consolidated Statements of Operations, to Adjusted EBITDA:

For the Three Months Ended

March 31, 2022

March 31, 2021(1)

Net Income (loss)

$

4,364,757

$

(10,694,263

)

Add:

Loss on impairment and disposal of leased property

5,811,779

Loss on termination of lease

165,644

Loss on extinguishment of debt

861,814

Transaction costs

300,095

5,074,796

Transaction bonus

1,036,492

Depreciation, amortization and ARO accretion

3,976,667

2,898,330

Income tax expense, net

223,257

1,467

Interest expense, net

3,146,855

2,931,007

Adjusted EBITDA

$

12,011,631

$

8,087,066

(1) The financial impacts of the Crimson assets only represent the period from February 1, 2021 to March 31, 2021.

Source: CorEnergy Infrastructure Trust, Inc.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220512005399/en/

Contacts

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

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