CORENERGY INFRASTRUCTURE TRUST, INC., 10-K filed on 3/14/2016
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2015
Feb. 29, 2016
Jun. 30, 2015
Document and Entity Information [Abstract]
 
 
 
Entity Registrant Name
CorEnergy Infrastructure Trust, Inc. 
 
 
Entity Central Index Key
0001347652 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2015 
 
 
Amendment Flag
false 
 
 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
FY 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Entity Public Float
 
 
$ 375,081,935 
Entity Common Stock, Shares Outstanding
 
11,951,757 
 
Consolidated Balance Sheets (USD $)
Dec. 31, 2015
Dec. 31, 2014
Assets [Abstract]
 
 
Leased property, net of accumulated depreciation of $33,869,263 and $19,417,025
$ 509,226,215 
$ 260,280,029 
Leased property held for sale, net of accumulated depreciation of $0 and $5,878,933
8,247,916 
Property and equipment, net of accumulated depreciation of $5,948,988 and $2,623,020
119,629,978 
122,820,122 
Financing notes and related accrued interest receivable, net of reserve of $13,784,137 and $0
7,675,626 
20,687,962 
Other equity securities, at fair value
8,393,683 
9,572,181 
Cash and cash equivalents
14,618,740 
7,578,164 
Accounts receivable
10,431,240 
7,793,515 
Intangibles and deferred costs, net of accumulated amortization of $2,774,706 and $2,271,080
4,697,672 
4,384,975 
Prepaid expenses and other assets
491,024 
732,110 
Deferred tax asset
1,606,976 
Goodwill
1,718,868 
1,718,868 
Total Assets
678,490,022 
443,815,842 
Liabilities and Equity [Abstract]
 
 
Current maturities of long-term debt
66,132,000 
3,528,000 
Long-term debt
151,243,153 
63,532,000 
Asset retirement obligation
12,839,042 
Accounts payable and other accrued liabilities
2,317,774 
3,935,307 
Management fees payable
1,763,747 
1,164,399 
Deferred tax liability
1,262,587 
Line of credit
32,141,277 
Unearned revenue
711,230 
Total Liabilities
234,295,716 
106,274,800 
Stockholders' Equity Attributable to Parent [Abstract]
 
 
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 and 0 issued and outstanding as of December 31, 2015, and December 31, 2014
56,250,000 
Capital stock, non-convertible, $0.001 par value; 11,939,697 and 9,321,010 shares issued and outstanding at December 31, 2015, and December 31, 2014 (100,000,000 shares authorized)
11,940 
9,321 
Additional paid-in capital
361,581,507 
309,987,724 
Accumulated other comprehensive income
190,797 
453,302 
Total CorEnergy Equity
418,034,244 
310,450,347 
Non-controlling Interest
26,160,062 
27,090,695 
Total Equity
444,194,306 
337,541,042 
Total Liabilities and Equity
$ 678,490,022 
$ 443,815,842 
Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Statement of Financial Position [Abstract]
 
 
Accumulated depreciation, leased property
$ 33,869,263 
$ 19,417,025 
Accumulated deprecation, leased property held for sale
5,878,933 
Accumulated depreciation, property and equipment
5,948,988 
2,623,020 
Accumulated amortization, intangible and deferred costs
2,774,706 
2,271,080 
Reserve for financing notes and related accrued interest receivable
$ 13,784,137 
$ 0 
Preferred stock, par value (in dollars per share)
$ 0.001 
$ 0 
Preferred stock, authorized
10,000,000 
Preferred stock, issued
22,500 
Preferred stock, outstanding
22,500 
Capital stock non-convertible, par value (in dollars per share)
$ 0.001 
$ 0.001 
Capital stock non-convertible, shares issued
11,939,697 
9,321,010 
Capital stock non-convertible, shares outstanding
11,939,697 
9,321,010 
Capital stock non-convertible, shares authorized
100,000,000 
100,000,000 
Consolidated Statements of Income and Comprehensive Income (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Revenue
 
 
 
 
 
 
 
 
 
 
 
Lease revenue
$ 16,984,036 
$ 16,966,056 
$ 6,799,879 
$ 7,336,101 
$ 7,204,493 
$ 7,191,187 
$ 7,065,677 
$ 6,762,408 
$ 48,086,072 
$ 28,223,765 
$ 22,552,976 
Sales revenue
1,717,787 
1,434,694 
1,665,908 
2,341,655 
2,894,556 
1,741,209 
1,813,607 
3,259,530 
7,160,044 
9,708,902 
8,733,044 
Financing revenue
185,650 
182,604 
668,904 
660,392 
498,984 
413,482 
139,728 
25,619 
1,697,550 
1,077,813 
Transportation revenue
3,591,459 
3,557,096 
3,546,979 
3,649,735 
1,298,093 
14,345,269 
1,298,093 
Total Revenue
22,478,932 
22,140,450 
12,681,670 
13,987,883 
11,896,126 
9,345,878 
9,019,012 
10,047,557 
71,288,935 
40,308,573 
31,286,020 
Expenses
 
 
 
 
 
 
 
 
 
 
 
Cost of sales (excluding depreciation expense)
618,073 
382,851 
569,958 
1,248,330 
1,914,901 
1,284,711 
1,384,998 
2,707,358 
2,819,212 
7,291,968 
6,734,665 
Depreciation, amortization and ARO accretion expense
5,385,068 
5,836,665 
3,495,986 
4,048,832 
3,575,420 
3,252,604 
3,220,253 
3,146,978 
18,766,551 
13,195,255 
11,491,285 
Provision for loan losses
5,833,000 
7,951,137 
13,784,137 
Transportation, maintenance and general and administrative
935,775 
856,050 
1,076,352 
991,608 
458,872 
3,859,785 
458,872 
Operating expenses
83,095 
264,812 
195,673 
206,360 
194,627 
210,009 
213,533 
222,741 
749,940 
840,910 
924,571 
General and administrative
2,434,094 
2,837,762 
1,905,329 
2,568,519 
3,263,345 
1,841,493 
1,334,960 
1,432,955 
9,745,704 
7,872,753 
5,879,864 
Total Expenses
15,289,105 
18,129,277 
7,243,298 
9,063,649 
9,407,165 
6,588,817 
6,153,744 
7,510,032 
49,725,329 
29,659,758 
25,030,385 
Operating Income
7,189,827 
4,011,173 
5,438,372 
4,924,234 
2,488,961 
2,757,061 
2,865,268 
2,537,525 
21,563,606 
10,648,815 
6,255,635 
Other Income (Expense)
 
 
 
 
 
 
 
 
 
 
 
Net distributions and dividend income
245,374 
241,563 
193,410 
590,408 
136,909 
1,688,830 
5,988 
5,056 
1,270,755 
1,836,783 
584,814 
Net realized and unrealized loss on trading securities
 
 
 
 
 
 
 
 
(251,213)
Net realized and unrealized gain (loss) on other equity securities
(148,045)
(1,408,751)
43,385 
449,798 
(2,978,764)
(865,470)
2,084,026 
1,294,182 
(1,063,613)
(466,026)
5,617,766 
Interest expense
(3,652,111)
(3,854,913)
(1,126,888)
(1,147,272)
(1,051,151)
(977,635)
(819,360)
(826,976)
(9,781,184)
(3,675,122)
(3,288,378)
Total Other Income (Expense)
(3,554,782)
(5,022,101)
(890,093)
(107,066)
(3,893,006)
(154,275)
1,270,654 
472,262 
(9,574,042)
(2,304,365)
2,662,989 
Income before income taxes
3,635,045 
(1,010,928)
4,548,279 
4,817,168 
(1,404,045)
2,602,786 
4,135,922 
3,009,787 
11,989,564 
8,344,450 
8,918,624 
Taxes
 
 
 
 
 
 
 
 
 
 
 
Current tax expense
276,755 
105,020 
104,479 
435,756 
2,503,808 
486,054 
854,075 
922,010 
3,843,937 
13,474 
Deferred tax expense (benefit)
(646,857)
(1,953,973)
(153,342)
(115,391)
(4,310,646)
(161,171)
742,879 
(340,562)
(2,869,563)
(4,069,500)
2,936,044 
Income tax expense (benefit), net
(370,102)
(1,848,953)
(48,863)
320,365 
(1,806,838)
324,883 
742,879 
513,513 
(1,947,553)
(225,563)
2,949,518 
Net Income
4,005,147 
838,025 
4,597,142 
4,496,803 
402,793 
2,277,903 
3,393,043 
2,496,274 
13,937,117 
8,570,013 
5,969,106 
Less: Net Income attributable to non-controlling interest
384,221 
410,806 
412,004 
410,175 
388,423 
389,485 
387,135 
391,114 
1,617,206 
1,556,157 
1,466,767 
Net Income attributable to CorEnergy Stockholders
3,620,926 
427,219 
4,185,138 
4,086,628 
14,370 
1,888,418 
3,005,908 
2,105,160 
12,319,911 
7,013,856 
4,502,339 
Preferred dividend requirements
1,037,110 
1,037,109 
1,037,109 
737,500 
3,848,828 
Net Income attributable to Common Stockholders
2,583,816 
(609,890)
3,148,029 
3,349,128 
14,370 
1,888,418 
3,005,908 
2,105,160 
8,471,083 
7,013,856 
4,502,339 
Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
Changes in fair value of qualifying hedges attributable to CorEnergy stockholders
218,576 
(223,176)
18,202 
(276,107)
(197,245)
214,602 
(270,838)
(70,620)
(262,505)
(324,101)
777,403 
Changes in fair value of qualifying hedges attributable to non-controlling interest
51,104 
(52,180)
4,256 
(64,555)
(46,120)
50,175 
(63,324)
(16,511)
(61,375)
(75,780)
181,762 
Net Change in Other Comprehensive Income (Loss)
269,680 
(275,356)
22,458 
(340,662)
(243,365)
264,777 
(334,162)
(87,131)
(323,880)
(399,881)
959,165 
Total Comprehensive Income
4,274,827 
562,669 
4,619,600 
4,156,141 
159,428 
2,542,680 
3,058,881 
2,409,143 
13,613,237 
8,170,132 
6,928,271 
Less: Comprehensive income attributable to non-controlling interest
435,325 
358,626 
416,260 
345,620 
342,303 
439,660 
323,811 
374,603 
1,555,831 
1,480,377 
1,648,529 
Comprehensive Income attributable to CorEnergy Stockholders
$ 3,839,502 
$ 204,043 
$ 4,203,340 
$ 3,810,521 
$ (182,875)
$ 2,103,020 
$ 2,735,070 
$ 2,034,540 
$ 12,057,406 
$ 6,689,755 
$ 5,279,742 
Earnings Per Common Share:
 
 
 
 
 
 
 
 
 
 
 
Basic (in dollars per share)
$ 0.22 
$ (0.05)
$ 0.33 
$ 0.36 
$ 0.00 
$ 0.30 
$ 0.48 
$ 0.35 
$ 0.79 
$ 1.06 
$ 0.93 
Diluted (in dollars per share)
$ 0.22 
$ (0.05)
$ 0.33 
$ 0.36 
$ 0.00 
$ 0.30 
$ 0.48 
$ 0.35 
$ 0.79 
$ 1.06 
$ 0.93 
Weighted Average Shares of Common Stock Outstanding:
 
 
 
 
 
 
 
 
 
 
 
Basic (in shares)
 
 
 
 
 
 
 
 
10,685,892 
6,605,715 
4,829,879 
Diluted (in shares)
 
 
 
 
 
 
 
 
10,685,892 
6,605,715 
4,829,879 
Dividends declared per share (in dollars per share)
 
 
 
 
 
 
 
 
$ 2.75 
$ 2.57 
$ 1.875 
Consolidated Statements of Equity (USD $)
Total
USD ($)
Capital Stock [Member]
USD ($)
Preferred Stock [Member]
USD ($)
Warrants [Member]
USD ($)
Additional Paid-in Capital [Member]
USD ($)
Accumulated Other Comprehensive Income (Loss) [Member]
USD ($)
Retained Earnings (Accumulated Deficit) [Member]
USD ($)
Non-Controlling Interest [Member]
USD ($)
Parent Company [Member]
USD ($)
Series A Cumulative Redeemable Preferred Stock [Member]
USD ($)
Series A Cumulative Redeemable Preferred Stock [Member]
Preferred Stock [Member]
USD ($)
Series A Cumulative Redeemable Preferred Stock [Member]
Additional Paid-in Capital [Member]
USD ($)
Dividend Reinvestment Plan [Member]
USD ($)
Dividend Reinvestment Plan [Member]
Capital Stock [Member]
Beginning balance at Dec. 31, 2012
$ 210,842,192 
$ 4,828 
 
$ 1,370,700 
$ 175,275,988 
 
$ 4,209,023 
$ 29,981,653 
 
 
 
 
 
 
Beginning balance, shares at Dec. 31, 2012
 
4,828,133 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss)
5,969,106 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in fair value of qualifying hedges attributable to CorEnergy stockholders
777,403 
 
 
 
 
 
 
 
777,403 
 
 
 
 
 
Net Income (Loss) attributable to non-controlling interest
1,466,767 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in fair value of qualifying hedges attributable to non-controlling interest
181,762 
 
 
 
 
 
 
(181,762)
 
 
 
 
 
 
Distributions to stockholders sourced as return of capital
9,055,060 
 
 
 
(1,923,760)
 
(7,131,300)
 
 
 
 
 
 
 
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders
(3,282,152)
 
 
 
 
 
 
(3,282,152)
 
 
 
 
 
 
Reinvestment of distributions to stockholders, shares
 
3,099 
 
 
 
 
 
 
 
 
 
 
 
 
Reinvestment of distributions to stockholders
 
 
 
108,116 
 
 
 
 
 
 
 
 
 
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax
959,165 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest
6,928,271 
 
 
 
 
777,403 
4,502,339 
1,648,529 
 
 
 
 
 
 
Net income attributable to CORR stockholders
4,502,339 
 
 
 
 
 
 
 
4,502,339 
 
 
 
 
 
Reinvestment of distributions by common stockholders in additional common shares
(108,119)
 
 
 
 
 
 
 
(108,119)
 
 
 
 
 
Capital stock, non-convertible, $0.001 par value; 11,939,697 and 9,321,010 shares issued and outstanding at December 31, 2015, and December 31, 2014 (100,000,000 shares authorized)
4,831 
 
 
 
 
 
 
 
 
 
 
 
 
Warrants, no par value; 0 and 945,594 issued and outstanding at December 31, 2014 and December 31, 2013 (5,000,000 authorized)
 
 
 
1,370,700 
 
 
 
 
 
 
 
 
 
 
Additional paid-in capital
173,460,344 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated other comprehensive income
777,403 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated retained earnings
1,580,062 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-controlling Interest
 
 
 
 
 
 
 
28,348,030 
 
 
 
 
 
 
Ending balance at Dec. 31, 2013
205,541,370 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance, shares at Dec. 31, 2013
 
4,831,232 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss)
8,570,013 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in fair value of qualifying hedges attributable to CorEnergy stockholders
(324,101)
 
 
 
 
 
 
 
(324,101)
 
 
 
 
 
Net Income (Loss) attributable to non-controlling interest
1,556,157 
 
 
 
 
 
 
1,556,157 
 
 
 
 
 
 
Shares issued during period
 
4,485,000 
 
 
 
 
 
 
 
 
 
 
 
 
Net offering proceeds
141,725,228 
4,485 
 
 
141,720,743 
 
 
 
 
 
 
 
 
 
Changes in fair value of qualifying hedges attributable to non-controlling interest
(75,780)
 
 
 
 
 
 
75,780 
 
 
 
 
 
 
Distributions to stockholders sourced as return of capital
(15,328,084)
 
 
 
(6,734,166)
 
(8,593,918)
 
 
 
 
 
 
 
Common stock issued under director's compensation plan (in shares)
 
805 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock issued under director's compensation plan
30,000 
 
 
29,999 
 
 
 
 
 
 
 
 
 
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders
(2,737,712)
 
 
 
 
 
 
(2,737,712)
 
 
 
 
 
 
Reinvestment of distributions to stockholders, shares
 
 
 
 
 
 
 
 
 
 
 
 
 
3,973 
Reinvestment of distributions to stockholders
 
 
 
140,104 
 
 
 
 
 
 
 
 
 
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax
(399,881)
 
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest
8,170,132 
 
 
 
 
(324,101)
7,013,856 
1,480,377 
 
 
 
 
 
 
Net income attributable to CORR stockholders
7,013,856 
 
 
 
 
 
 
 
7,013,856 
 
 
 
 
 
Reinvestment of distributions by common stockholders in additional common shares
(140,108)
 
 
 
 
 
 
 
(140,108)
 
 
 
(140,108)
 
Adjustments to Additional Paid in Capital, Warrant Issued
 
 
 
(1,370,700)
1,370,700 
 
 
 
 
 
 
 
 
 
Capital stock, non-convertible, $0.001 par value; 11,939,697 and 9,321,010 shares issued and outstanding at December 31, 2015, and December 31, 2014 (100,000,000 shares authorized)
9,321 
 
 
 
 
 
 
46,605 
 
 
 
 
 
Warrants, no par value; 0 and 945,594 issued and outstanding at December 31, 2014 and December 31, 2013 (5,000,000 authorized)
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional paid-in capital
309,987,724 
 
 
 
 
 
 
 
309,950,440 
 
 
 
 
 
Accumulated other comprehensive income
453,302 
 
 
 
 
453,302 
 
 
453,302 
 
 
 
 
 
Accumulated retained earnings
 
 
 
 
 
 
 
 
 
 
 
 
Non-controlling Interest
27,090,695 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance at Dec. 31, 2014
337,541,042 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance, shares at Dec. 31, 2014
9,321,010 
9,321,010 
 
 
 
 
 
 
9,321,010 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss)
13,937,117 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in fair value of qualifying hedges attributable to CorEnergy stockholders
(262,505)
 
 
 
 
(262,505)
 
 
(262,505)
 
 
 
 
 
Net Income (Loss) attributable to non-controlling interest
1,617,206 
 
 
 
 
 
 
1,617,206 
 
 
 
 
 
 
Shares issued during period
 
2,587,500 
 
 
 
 
 
 
 
 
 
 
 
 
Net offering proceeds
73,257,364 
2,587 
 
 
73,254,777 
 
 
 
 
54,210,476 
56,250,000 
(2,039,524)
 
 
Changes in fair value of qualifying hedges attributable to non-controlling interest
(61,375)
 
 
 
 
 
 
61,375 
 
 
 
 
 
 
Distributions to stockholders sourced as return of capital
(29,346,139)
 
 
 
(20,529,353)
 
(8,816,786)
 
 
 
 
 
 
 
Common stock issued under director's compensation plan (in shares)
 
2,677 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock issued under director's compensation plan
90,000 
 
 
89,997 
 
 
 
 
 
 
 
 
 
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders
(2,486,464)
 
 
 
 
 
 
(2,486,464)
 
 
 
 
 
 
Reinvestment of distributions to stockholders, shares
 
 
 
 
 
 
 
 
 
 
 
 
 
28,510 
Reinvestment of distributions to stockholders
 
29 
 
 
817,886 
 
 
 
 
 
 
 
 
 
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax
(323,880)
 
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest
13,613,237 
 
 
 
 
(262,505)
12,319,911 
1,555,831 
 
 
 
 
 
 
Net income attributable to CORR stockholders
12,319,911 
 
 
 
 
 
 
 
12,319,911 
 
 
 
 
 
Reinvestment of distributions by common stockholders in additional common shares
 
 
 
 
 
 
 
 
(817,915)
 
 
 
(817,915)
 
Series A preferred stock dividends
(3,503,125)
 
 
 
 
 
(3,503,125)
 
 
 
 
 
 
 
Capital stock, non-convertible, $0.001 par value; 11,939,697 and 9,321,010 shares issued and outstanding at December 31, 2015, and December 31, 2014 (100,000,000 shares authorized)
11,940 
 
56,250,000 
 
 
 
 
 
11,940 
 
 
 
 
 
Warrants, no par value; 0 and 945,594 issued and outstanding at December 31, 2014 and December 31, 2013 (5,000,000 authorized)
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional paid-in capital
361,581,507 
 
 
 
 
 
 
 
361,581,507 
 
 
 
 
 
Accumulated other comprehensive income
190,797 
 
 
 
 
190,797 
 
 
190,797 
 
 
 
 
 
Accumulated retained earnings
 
 
 
 
 
 
 
 
 
 
 
 
Non-controlling Interest
26,160,062 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance at Dec. 31, 2015
$ 444,194,306 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance, shares at Dec. 31, 2015
11,939,697 
11,939,697 
 
 
 
 
 
 
11,939,697 
 
 
 
 
 
Consolidated Statements of Equity (Parenthetical) (Series A Preferred Stock [Member])
12 Months Ended
Dec. 31, 2015
Series A Preferred Stock [Member]
 
Preferred stock interest rate
7.375% 
Consolidated Statements of Cash Flows (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Operating Activities
 
 
 
Net Income
$ 13,937,117 
$ 8,570,013 
$ 5,969,106 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Deferred income tax, net
(2,869,563)
(4,069,500)
2,936,044 
Depreciation, amortization and ARO accretion
20,662,297 
14,289,017 
12,339,704 
Provision for loan loss
13,784,137 
Net distributions and dividend income, including recharacterization of income
(371,323)
960,384 
(567,276)
Net realized and unrealized loss on trading securities
251,213 
Net realized and unrealized (gain) loss on other equity securities
1,063,613 
(1,357,496)
(5,617,766)
Unrealized gain on derivative contract
(70,333)
(70,720)
(11,095)
Common stock issued under directors compensation plan
90,000 
30,000 
Changes in assets and liabilities:
 
 
 
Increase in accounts and other receivables
(2,273,092)
(966,667)
(1,856,528)
Increase in financing note accrued interest receivable
(355,208)
(Increase) decrease in prepaid expenses and other assets
(37,462)
96,743 
272,194 
Increase in management fee payable
599,348 
468,961 
555,892 
Increase (decrease) in accounts payable and other accrued liabilities
(847,683)
(2,276,773)
260,538 
Increase (decrease) in current income tax liability
583,361 
(4,690,329)
Increase (decrease) in unearned revenue
(711,230)
711,230 
(2,133,685)
Net cash provided by operating activities
42,600,618 
16,968,553 
7,708,012 
Investing Activities
 
 
 
Proceeds from sale of long-term investment of trading and other equity securities
10,806,879 
5,580,985 
Proceeds from sale of leased property held for sale
7,678,246 
Deferred lease costs
(336,141)
(74,037)
Acquisition expenditures
(251,513,344)
(168,204,309)
(1,834,036)
Purchases of property and equipment, net
(138,918)
(11,970)
(40,670)
Proceeds from sale of property and equipment
948 
5,201 
Increase in financing notes receivable
(524,037)
(20,648,714)
Principal payment on financing note receivable
100,000 
Return of capital on distributions received
121,578 
981,373 
1,772,776 
Net cash (used) provided by investing activities
(244,612,616)
(177,075,793)
5,410,219 
Financing Activities
 
 
 
Payments on lease obligation
(20,698)
Debt financing costs
(1,617,991)
(3,269,429)
(144,798)
Net offering proceeds on Series A preferred stock
54,210,476 
Net offering proceeds on common stock
73,184,679 
141,797,913 
(523,094)
Net offering proceeds on convertible debt
111,262,500 
Dividends paid on Series A preferred stock
(3,503,125)
Dividends paid on common stock
(28,528,224)
(15,187,976)
(8,946,941)
Distributions to non-controlling interest
(2,486,464)
(2,737,712)
(3,282,152)
Advances on revolving line of credit
45,392,332 
34,676,948 
221,332 
Payments on revolving line of credit
(77,533,609)
(2,617,606)
(139,397)
Proceeds from term debt
45,000,000 
Principal payments on term debt
(1,800,000)
Principal payments on credit facility
(4,528,000)
(2,940,000)
Net cash (used) provided by financing activities
209,052,574 
149,722,138 
(12,835,748)
Net Change in Cash and Cash Equivalents
7,040,576 
(10,385,102)
282,483 
Cash and Cash Equivalents at beginning of period
7,578,164 
17,963,266 
17,680,783 
Cash and Cash Equivalents at end of period
14,618,740 
7,578,164 
17,963,266 
Supplemental Disclosure of Cash Flow Information
 
 
 
Interest paid
7,873,333 
2,762,903 
2,651,355 
Income taxes paid (net of refunds)
747,406 
3,260,576 
4,637,068 
Non-Cash Investing Activities
 
 
 
Change in accounts payable and accrued expenses related to intangibles and deferred costs
(68,417)
Change in accounts payable and accrued expenses related to acquisition expenditures
(614,880)
270,615 
(1,545,163)
Change in accounts payable and accrued expenses related to issuance of financing and other notes receivable
(39,248)
39,248 
Non-Cash Financing Activities
 
 
 
Change in accounts payable and accrued expenses related to the issuance of common equity
(72,685)
72,685 
(523,094)
Change in accounts payable and accrued expenses related to debt financing costs
(43,039)
(176,961)
116,383 
Reinvestment of distributions by common stockholders in additional common shares
 
$ 140,108 
$ 108,119 
Introduction and Basis of Presentation
INTRODUCTION AND BASIS OF PRESENTATION
INTRODUCTION AND BASIS OF PRESENTATION
Introduction
CorEnergy Infrastructure Trust, Inc. ("CorEnergy"), was organized as a Maryland corporation and commenced operations on December 8, 2005. The Company's common shares are listed on the New York Stock Exchange under the symbol “CORR.” As used in this report, the terms "we", "us", "our" and the "Company" refer to CorEnergy and its subsidiaries.
We are primarily focused on acquiring and financing midstream and downstream real estate assets within the U.S. energy infrastructure sector and concurrently entering into long-term triple-net participating leases with energy companies. We also may provide other types of capital, including loans secured by energy infrastructure assets. Targeted assets include pipelines, storage tanks, transmission lines and gathering systems, among others. These sale-leaseback or real property mortgage transactions provide the energy company with a source of capital that is an alternative to sources such as corporate borrowing, bond offerings, or equity offerings. Many of our leases contain participation features in the financial performance or value of the underlying infrastructure real property asset. The triple-net lease structure requires that the tenant pay all operating expenses of the business conducted by the tenant, including real estate taxes, insurance, utilities, and expenses of maintaining the asset in good working order. We consider our investments in these energy infrastructure assets to be a single business segment and report them accordingly in our financial statements.
Taxable REIT subsidiaries hold our securities portfolio, operating businesses and certain financing notes receivable as follows:
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 one of our operating companies, Omega Pipeline Company, LLC.
Corridor MoGas, Inc. holds two other operating companies, MoGas Pipeline, LLC ("MoGas") and United Property Systems, LLC.
CorEnergy BBWS, Inc., Corridor Private and Corridor Leeds Path West, Inc. hold financing notes receivable.
Basis of Presentation and Use of Estimates
The accompanying consolidated financial statements include our accounts and the accounts of our wholly owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) set forth in the Accounting Standards Codification ("ASC"), as published by the Financial Accounting Standards Board ("FASB"), and with the Securities and Exchange Commission (“SEC”) instructions to Form 10-K. The accompanying consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the periods presented. There were no adjustments that, in the opinion of management, were not of a normal and recurring nature. All intercompany transactions and balances have been eliminated in consolidation, and our net earnings are reduced by the portion of net earnings attributable to non-controlling interests.
The Company consolidates certain entities when it is deemed to be the primary beneficiary in a variable interest entity ("VIE"), as defined in FASB ASC Topic on Consolidation. The Topic on Consolidation requires the consolidation of other entities in which the Company has a controlling financial interest. The equity method of accounting is applied to entities in which the Company is not the primary beneficiary as defined in the Consolidation Topic of FASB ASC, or does not have effective control, but can exercise influence over the entity with respect to its operations and major decisions. This topic requires an ongoing reassessment.
Significant Accounting Policies
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES
A. Use of Estimates – The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, recognition of distribution income and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from those estimates.
B. Leased Property – The Company includes assets subject to lease arrangements within Leased property, net of accumulated depreciation, in the Consolidated Balance Sheets. Lease payments received are reflected in Lease revenue on the Consolidated Statements of Income, net of amortization of any off-market adjustments. Costs in connection with the creation and execution of a lease are capitalized and amortized over the lease term. See Note 3 for further discussion.
C. Cash and Cash Equivalents – The Company maintains cash balances at financial institutions in amounts that regularly exceed FDIC insured limits. The Company’s cash equivalents are comprised of short-term, liquid money market instruments.
D. Long-Lived Assets – Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of the asset. Expenditures for repairs and maintenance are charged to operations as incurred, and improvements, which extend the useful lives of assets, are capitalized and depreciated over the remaining estimated useful life of the asset. The Company periodically reviews its long-lived assets, primarily real estate, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company’s review involves comparing current and future operating performance of the assets, the most significant of which is undiscounted operating cash flows, to the carrying value of the assets. Based on this analysis, a provision for loss is recognized, if any.
The Company initially records long-lived assets at their purchase price plus any direct acquisition costs, unless the transaction is accounted for as a business combination, in which case the acquisition costs are expensed as incurred. If the transaction is accounted for as a business combination, the Company allocates the purchase price to the acquired tangible and intangible assets and liabilities based on their estimated fair values. See Note 5 for further information.
E. Intangibles and Goodwill – The Company may acquire long-lived assets that are subject to an existing lease contract with the seller or other lessee party and the Company may assume outstanding debt of the seller as part of the consideration paid. If, at the time of acquisition, the existing lease or debt contract is not at current market terms, the Company will record an asset or liability at the time of acquisition representing the amount by which the fair value of the lease or debt contract differs from its contractual value. Such amount is then amortized over the remaining contract term as an adjustment to the related lease revenue or interest expense. In a business combination, goodwill is recorded when the purchase price paid exceeds the estimated fair value of the net assets acquired. Refer to Note 5 for further details regarding the goodwill acquired in the MoGas Transaction.
The Company reviews its long-lived assets, including goodwill, for impairment at least annually or whenever events or circumstances indicate the carrying value of an asset may not be recoverable. The Company's review involves comparing current and future operating performance of the assets, the most significant of which is undiscounted operating cash flows, to the carrying value of the assets. If the carrying amount of an asset exceeds its implied fair value, an impairment loss would be recognized for the amount of the excess. No long-lived asset or goodwill impairment write-downs were recognized during the years ended December 31, 2015, 2014 and 2013. See paragraph (H) below.
F. Earnings Per Share – Basic earnings per share ("EPS") is computed using the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period except for periods of net loss for which no common share equivalents are included because their effect would be anti-dilutive. Dilutive common equivalent shares consist of shares issuable upon conversion of the convertible notes calculated using the if-converted method. See paragraph (N) below.
G. Investment Securities – The Company’s investments in securities are classified as other equity securities and represent interests in private companies which the Company has elected to report at fair value under the fair value option.
These investments generally are subject to restrictions on resale, have no established trading market and are valued on a quarterly basis. Because of the inherent uncertainty of valuation, the fair values of such investments, which are determined in accordance with procedures approved by the Company’s Board of Directors, may differ materially from the values that would have been used had a ready market existed for the investments.
The Company determines fair value to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has determined the principal market, or the market in which the Company exits its private portfolio investments with the greatest volume and level of activity, to be the private secondary market. Typically, private companies are bought and sold based on multiples of EBITDA, cash flows, net income, revenues, or in limited cases, book value.
For private company investments, value is often realized through a liquidity event. Therefore, the value of the Company as a whole (enterprise value) at the reporting date often provides the best evidence of the value of the investment and is the initial step for valuing the Company’s privately issued securities. For any one company, enterprise value may best be expressed as a range of fair values, from which a single estimate of fair value will be derived. In determining the enterprise value of a portfolio company, an analysis is prepared consisting of traditional valuation methodologies including market and income approaches. The Company considers some or all of the traditional valuation methods based on the individual circumstances of the portfolio company in order to derive its estimate of enterprise value.
The fair value of investments in private portfolio companies is determined based on various factors, including enterprise value, observable market transactions, such as recent offers to purchase a company, recent transactions involving the purchase or sale of the equity securities of the company, or other liquidation events. The determined equity values may be discounted when the Company has a minority position, or is subject to restrictions on resale, has specific concerns about the receptivity of the capital markets to a specific company at a certain time, or other comparable factors exist.
The Company undertakes a multi-step valuation process each quarter in connection with determining the fair value of private investments. We have retained an independent valuation firm to provide third party valuation consulting services based on procedures that the Company has identified and may ask them to perform from time to time on all or a selection of private investments as determined by the Company. The multi-step valuation process is specific to the level of assurance that the Company requests from the independent valuation firm. For positive assurance, the process is as follows:
The independent valuation firm prepares the valuations and the supporting analysis.
The valuation report is reviewed and approved by senior management.
The Audit Committee of the Board of Directors reviews the supporting analysis and accepts the valuations.
H. Financing Notes Receivable - Financing notes receivable are presented at face value plus accrued interest receivable and deferred loan origination costs and net of related direct loan origination income. Each quarter the Company reviews its financing notes receivable to determine if the balances are realizable based on factors affecting the collectability of those balances. Factors may include credit quality, timeliness of required periodic payments, past due status and management discussions with obligors. The Company evaluates the collectability of both interest and principal of each of its loans to determine if an allowance is needed. An allowance will be recorded when based on current information and events, the Company determines it is probable that it will be unable to collect all amounts due according to the existing contractual terms. If the Company does determine an allowance is necessary, the amount deemed uncollectable is expensed in the period of determination. An insignificant delay or shortfall in the amount of payments does not necessarily result in the recording of an allowance. Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing financing revenue on that loan until all principal and interest have been brought current. Interest income recognition is resumed if and when the previously reserved-for financing notes become contractually current and performance has been demonstrated. Payments received subsequent to the recording of an allowance will be recorded as a reduction to principal. During the year ended December 31, 2015, the Company created a provision for loan losses in the amount of approximately $13.8 million. The Company's financing notes receivable are discussed more fully in Note 6.
I. Lease Receivable – Lease receivables are determined according to the terms of the lease agreements entered into by the Company and its lessees, as discussed within Note 4. Lease receivables may also represent timing differences between straight-line revenue recognition and contractual lease receipts and is recorded within accounts and other receivables on the balance sheet. As of December 31, 2015, lease payments by our tenants have remained timely and without lapse.
J. Accounts Receivable – Accounts receivable are presented at face value net of an allowance for doubtful accounts within accounts and other receivables on the balance sheet. Accounts are considered past due based on the terms of sale with the customers. The Company reviews accounts for collectability based on an analysis of specific outstanding receivables, current economic conditions and past collection experience. At December 31, 2015, and December 31, 2014, the Company determined that an allowance for doubtful accounts was not necessary.
K. Derivative Instruments and Hedging Activities - FASB ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company's objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. The Company's derivative assets and liabilities are presented on a gross basis.
As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.
FASB ASC 820, Fair Value Measurements and Disclosure ("ASC 820"), defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. In accordance with ASC 820, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.
L. Fair Value Measurements - Various inputs are used in determining the fair value of the Company’s assets and liabilities. These inputs are summarized in the three broad levels listed below:
Level 1 – quoted prices in active markets for identical investments
Level 2 – other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.)
Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)
ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances. ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity's own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
M. Asset Retirement Obligations – In accordance with ASC 410-20, Asset Retirement Obligations, we recognized an asset retirement obligation (ARO) in conjunction with the acquisition of the GIGS in June 2015 that existed at the time. The liability was initially measured using the amount agreed upon between the parties in an arm's length transaction, which under ASC 410-20, represents fair value, and will be subsequently adjusted for ARO accretion expense and changes in the amount or timing of the estimated cash flows.
We measure changes in the liability for an ARO due to passage of time by applying an interest method of allocation to the amount of the liability at the beginning of the period. The interest rate used to measure that change is the credit-adjusted risk-free rate that existed when the ARO, or portion thereof, was initially measured. The Company's credit-adjusted risk-free rate at the time of acquisition was 5.58 percent. The increase in the carrying amount of the liability will be recognized as an expense classified as an operating item in the statement of income, hereinafter referred to as ARO accretion expense.
The fair value of the obligation at the acquisition date has been capitalized as part of the carrying amount of the related long-lived assets and will be depreciated over the asset's remaining useful life. The useful lives of most pipeline gathering systems are primarily derived from available supply resources and ultimate consumption of those resources by end users. Indeterminate asset retirement obligation costs will be recognized in the period in which sufficient information exists to reasonably estimate potential settlement dates and methods. The ARO is discussed more fully in Note 16 .
N. Convertible Debt – In accordance with ASC 470, Debt ("ASC 470") the Company records its Convertible Senior Notes at the aggregate principal amount, less discount. We are amortizing the debt discount over the life of the convertible notes as additional non-cash interest expense utilizing the effective interest method. Refer to Note 15 for additional information.
O. Revenue Recognition – Specific recognition policies for the Company’s revenue items are as follows:
Lease revenue – Base rent related to the Company’s leased property is recognized on a straight-line basis over the term of the lease when collectability is reasonably assured. Contingent rent is recognized when it is earned, based on the achievement of specified performance criteria. Rental payments received in advance are classified as unearned revenue and included as a liability within the Consolidated Balance Sheets. Unearned revenue is amortized ratably over the lease period as revenue recognition criteria are met. Rental payments received in arrears are accrued and classified as Lease Receivable and included in assets within the Consolidated Balance Sheets.
Sales revenue – Revenues related to natural gas distribution and performance of management services are recognized in accordance with GAAP upon delivery of natural gas and upon the substantial performance of management and supervision services related to the expansion of the natural gas distribution system. Omega, acting as a principal, provides natural gas supply for its customers. In addition, Omega is paid fees for the operation and maintenance of its natural gas distribution system, including any necessary expansion of the distribution system. Omega is responsible for the coordination, supervision and quality of the expansions while actual construction is generally performed by third party contractors. Revenues from expansion efforts are recognized in accordance with GAAP using either a completed contract or percentage of completion method based on the level and volume of estimates utilized, as well as the certainty or uncertainty of our ability to collect those revenues.
Transportation revenue – MoGas generates revenue from natural gas transportation and recognizes that revenue on firm contracted capacity over the contract period regardless of whether the contracted capacity is used. For interruptible or volumetric based transportation, revenue is recognized when physical deliveries of natural gas are made at the delivery point agreed upon by both parties.
Financing revenue – Our financing notes receivable are considered a core product offering and therefore the related income is presented as a component of operating income. For increasing rate loans, base interest income is recorded ratably over the life of the loan, using the effective interest rate. The net amount of deferred loan origination income and costs are amortized on a straight-line basis over the life of the loan and reported as an adjustment to yield in financing revenue. Participating financing revenues are recorded when specific performance criteria have been met.
P. Cost of Sales – Included in the Company’s cost of sales are the amounts paid for gas and propane, along with related transportation, which are delivered to customers, as well as, the cost of material and labor related to the expansion of the Omega natural gas distribution system.
Q. Transportation, maintenance and general and administrative – These expenses are incurred both internally and externally. The internal expenses relate to system control, pipeline operations, maintenance, insurance and taxes. Other internal expenses include payroll cost for employees associated with gas control, field employees, the office manager and the vice presidents of operations and finance. The external costs consist of professional services such as audit and accounting, legal and regulatory and engineering.
R. Asset Acquisition Expenses – Costs incurred in connection with the research of real property acquisitions not accounted for as business combinations are expensed until it is determined that the acquisition of the real property is probable. Upon such determination, costs incurred in connection with the acquisition of the property are capitalized as described in paragraph (D) above. Deferred costs related to an acquisition that we have determined, based on our judgment, not to pursue are expensed in the period in which such determination is made. Costs incurred in connection with a business combination are expensed as incurred.
S. Offering Costs – Offering costs related to the issuance of common or preferred stock are charged to additional paid-in capital when the stock is issued.
T. Debt Issuance Costs – Costs incurred for the issuance of new debt are capitalized and amortized into interest expense over the debt term. See Note 14 for further discussion.
U. Distributions to Stockholders – Distributions to both common and preferred stockholders are determined by the Board of Directors. Distributions to common stockholders are recorded on the ex-dividend date and distributions to preferred stockholders are recorded when declared by the Board of Directors.
V. Other Income Recognition Specific policies for the Company’s other income items are as follows:
Net distributions and dividend income from investments – Distributions and dividends from investments are recorded on their ex-dates and are reflected as other income within the accompanying Consolidated Statements of Income. Distributions received from the Company’s investments are generally characterized as ordinary income, capital gains and distributions received from investment securities. The portion characterized as return of capital is paid by our investees from their cash flow from operations. The Company records investment income, capital gains and distributions received from investment securities based on estimates made at the time such distributions are received. Such estimates are based on information available from each company and other industry sources. These estimates may subsequently be revised based on information received from the entities after their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Company.
Net realized and unrealized gain (loss) from investments – Securities transactions are accounted for on the date the securities are purchased or sold. Realized gains and losses are reported on an identified cost basis. The Company records investment income and return of capital based on estimates made at the time such distributions are received. Such estimates are based on information available from the portfolio company and other industry sources. These estimates may subsequently be revised based on information received from the portfolio company after their tax reporting periods are concluded, as the actual character of these distributions are not known until after our fiscal year end.
W. Federal and State Income Taxation – In 2013 we qualified, and in March 2014 elected (effective as of January 1, 2013), to be treated as a REIT for federal income tax purposes. Because certain of our assets may not produce REIT-qualifying income or be treated as interests in real property, those assets are held in wholly-owned Taxable REIT Subsidiaries ("TRSs") in order to limit the potential that such assets and income could prevent us from qualifying as a REIT.
As a REIT, the Company holds and operates certain of our assets through one or more wholly-owned TRSs. Our use of TRSs enables us to continue to engage in certain businesses while complying with REIT qualification requirements and also allows us to retain income generated by these businesses for reinvestment without the requirement of distributing those earnings. In the future, we may elect to reorganize and transfer certain assets or operations from our TRSs to the Company or other subsidiaries, including qualified REIT subsidiaries.
The Company's trading securities and other equity securities are limited partnerships or limited liability companies which are treated as partnerships for federal and state income tax purposes. As a limited partner, the Company reports its allocable share of taxable income in computing its own taxable income. To the extent held by a TRS, the TRS's tax expense or benefit is included in the Consolidated Statements of Income based on the component of income or gains and losses to which such expense or benefit relates. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. It is expected that for the year ended December 31, 2015, and future periods, any deferred tax liability or asset generated will be related entirely to the assets and activities of the Company's TRSs.
If we cease to qualify as a REIT, the Company, as a C corporation, would be obligated to pay federal and state income tax on its taxable income. Currently, the highest regular marginal federal income tax rate for a corporation is 35 percent. The Company may be subject to a 20 percent federal alternative minimum tax on its federal alternative minimum taxable income to the extent that its alternative minimum tax exceeds its regular federal income tax.
X. Recent Accounting Pronouncements – In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2014-08 "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." Under this guidance, only disposals representing a strategic shift in operations would be presented as discontinued operations. This guidance requires expanded disclosure that provides information about the assets, liabilities, income and expenses of discontinued operations. Additionally, the guidance requires additional disclosure for a disposal of a significant part of an entity that does not qualify for discontinued operations reporting. This guidance was effective for reporting periods beginning on or after December 15, 2014 with early adoption permitted for disposals or classifications of assets as held-for-sale that have not been reported in financial statements previously issued or available for issuance. It is expected that fewer disposal transactions will meet the new criteria to be reported as discontinued operations. The Company elected early adoption of the standard and the effects of applying the revised guidance did not have a material effect on the consolidated financial statements and related disclosures. Refer to Note 3 for further information.
In August 2015, the FASB issued ASU No. 2015-14 "Revenue from Contracts with Customers - Deferral of the Effective Date." The amendments in this update defer the effective date of ASU No. 2014-09 "Revenue from Contracts with Customers", for all entities by one year. ASU No. 2014-09 adds to the FASB ASC by requiring entities to recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to customers and provide additional disclosures. As amended, the effective date for public entities is annual reporting periods beginning after December 15, 2017 and interim periods therein. As such, we will be required to adopt the standard in the first quarter of fiscal year 2018. Early adoption is not permitted before the first quarter of fiscal year 2017. ASC 606 may be adopted using either the "full retrospective" approach, in which the standard is applied to all of the periods presented, or a "modified retrospective" approach. The Company is currently evaluating which transition method to use and the potential future impact, if any, the standard will have on the Company's consolidated financial statements and related disclosures. However, we do not expect its adoption to have a significant impact on our consolidated financial statements, as a substantial portion of our revenue consists of rental income from leasing arrangements, which is specifically excluded from ASU 2014-09.
In August 2014, the FASB issued ASU No. 2014-15 "Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern", that will require management to evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the financial statements are issued on both an interim and annual basis. Management will be required to provide certain footnote disclosures if it concludes that substantial doubt exists or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. ASU No. 2014-15 becomes effective for annual periods beginning in 2016 and for interim reporting periods starting in the first quarter of 2017. The Company does not expect the adoption of this amendment to have a material impact on its consolidated financial statements.
In February 2015, the FASB issued ASU No. 2015-02 "Consolidation (Topic 810), Amendments to the Consolidation Analysis." ASU 2015-02 is aimed at asset managers, however, it will also have an effect on all reporting entities that have variable interests in other legal entities. In some cases, consolidation conclusions will change. In other cases, reporting entities will need to provide additional disclosures about entities that currently aren't considered variable interest entities but will be considered VIE's under the new guidance if they have a variable interest in those entities. At the very least, reporting entities will need to re-evaluate their consideration conclusions and potentially revise their documentation. For public companies, ASU No. 2015-02 is effective for annual periods beginning after December 15, 2015 and interim periods within those years using either a retrospective or a modified retrospective approach. Management has evaluated this amendment and does not expect adoption to have a material impact on the Company's consolidated financial statements.
In April 2015, the FASB issued ASU No. 2015-03 "Interest-Imputation of Interest" to simplify presentation of debt issuance costs. The amendments in this update require debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Then in June 2015, the FASB issued ASU No. 2015-15 "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements" to clarify that ASU No. 2015-03 does not address the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. As a result, an entity may present debt issuance costs related to line-of-credit arrangements as an asset instead of a direct deduction from the carrying amount of the debt. The clarification is effective as of issuance with ASU No. 2015-03 effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Management evaluated this amendment and does not expect adoption to have a material impact on the Company's consolidated financial statements.
In September 2015, the FASB issued ASU No. 2015-16 "Simplifying the Accounting for Measurement-Period Adjustments." ASU No. 2015-16 requires, for business combinations, that the acquirer record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. ASU No. 2015-16 is effective for fiscal years beginning after December 15, 2015. Management has evaluated this amendment and does not expect adoption to have a material impact on the Company's consolidated financial statements.
In February 2016, the FASB issued ASU No. 2016-02 "Leases" which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016-02 is effective for fiscal years and interim periods beginning after December 31, 2018. Early adoption is permitted. The new leases standard requires adoption using a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. Management is still in the process of evaluating this amendment.
Leased Properties
LEASED PROPERTIES
LEASED PROPERTIES
Grand Isle Gathering System
On June 23, 2015, we (i) completed a follow-on equity offering of 2,587,500 shares of common stock that generated $73.3 million in proceeds net of underwriting discounts, (ii) completed a new issue of convertible debt in an underwritten public offering that generated $111.3 million in proceeds net of underwriting discounts, and (iii) drew approximately $42 million under our existing Senior Credit Facility. On June 30, 2015, our subsidiary, Grand Isle Corridor, LP ("Grand Isle Corridor"), used the net proceeds from the offerings and the advance under our Senior Credit Facility to close on a Purchase and Sale Agreement to acquire the Grand Isle Gathering System (the "GIGS"), a subsea, midstream pipeline system in the Gulf of Mexico from a subsidiary of Energy XXI Ltd ("EXXI") for $245 million, the assumption of asset retirement obligation liabilities of approximately $12.5 million, asset acquisition costs of approximately $1.9 million and deferred lease costs of approximately $336 thousand, for a total consideration of $259.8 million. Grand Isle Corridor, LP also entered into a long-term triple-net lease agreement relating to the use of the GIGS with Energy XXI GIGS Services, LLC, a wholly owned operating subsidiary of EXXI.
Physical Assets
The GIGS includes 153 miles (unaudited) of offshore pipeline in the Gulf of Mexico that connects to seven producing fields (unaudited), six of which are operated by EXXI and one by ExxonMobil, and includes a 16-acre (unaudited) onshore terminal and saltwater disposal system consisting of four storage tanks (unaudited), a saltwater disposal facility with three injection wells (unaudited), and associated pipelines, land, buildings and facilities. Of the seven oil fields (unaudited) that connect to the Grand Isle Gathering System, four are among the top 15 producing oil fields in the Gulf of Mexico shelf as ranked by total cumulative oil production to date—the West Delta 30, West Delta 73, Grand Isle 16/22 and South Pass 89. As of March 31, 2015, the Grand Isle Gathering System transported approximately 60,000 Bbls/d (unaudited) (18,000 oil (unaudited) and 42,000 water (unaudited)) with total capacity of 120,000 Bbls/d (unaudited). Five other shippers (unaudited) utilize the GIGS for transportation of oil to onshore sales points and transportation of produced water for disposal onshore.    
The asset will be depreciated for book purposes over an estimated useful life of 30 years. The amount of depreciation recognized for the leased property for the years ended December 31, 2015 and 2014, was $4.3 million and $0, respectively.
See Note 4 for further information regarding the Grand Isle Lease Agreement (as defined therein).
Pinedale LGS
Our subsidiary, Pinedale Corridor, LP ("Pinedale LP"), owns a system of gathering, storage, and pipeline facilities (the "Pinedale LGS"), with associated real property rights in the Pinedale Anticline in Wyoming.
Physical Assets
The Pinedale LGS consists of more than 150 miles (unaudited) of pipelines with four (unaudited) above-ground central gathering facilities. The system is leased to and used by Ultra Petroleum Corp. ("Ultra Petroleum") as a method of separating water, condensate and associated flash gas from a unified stream and subsequently selling or treating and disposing of the separated products. Prior to entering the Pinedale LGS, a commingled hydrocarbon stream is separated into wellhead natural gas and a liquids stream. The wellhead natural gas is transported to market by a third party. The remaining liquids, primarily water, are transported by the Pinedale LGS to one of its four central gathering facilities where they pass through a three-phase separator which separates condensate, water and associated natural gas. Condensate is a valuable hydrocarbon commodity that is sold by Ultra Petroleum; water is transported to disposal wells or a treatment facility for re-use; and the natural gas is sold or otherwise used by Ultra Petroleum for fueling on-site operational equipment.
The asset is depreciated for book purposes over an estimated useful life of 26 years. The amount of depreciation recognized for the leased property for the years ended December 31, 2015, December 31, 2014 and December 31, 2013, was $8.9 million.
See Note 4 for further information regarding the Pinedale Lease Agreement (as defined therein)
Non-Controlling Interest Partner
The Prudential Insurance Company of America ("Prudential") funded a portion of the Pinedale LGS acquisition and, as a limited partner, holds 18.95 percent of the economic interest in Pinedale LP. The general partner, Pinedale GP, holds the remaining 81.05 percent of the economic interest.
Debt
Pinedale LP borrowed $70 million pursuant to a secured term credit facility with KeyBank National Association serving as a lender and the administrative agent on behalf of other lenders participating in the credit facility ("KeyBank Term Facility"). The credit facility was amended on December 31, 2015, and will remain in effect through March 30, 2016. The credit facility is secured by the Pinedale LGS. See Note 14 for further information regarding the credit facility.
Portland Terminal Facility
The Portland Terminal Facility is a rail and marine facility adjacent to the Willamette River in Portland, Oregon which is triple-net leased to Arc Terminals Holdings LLC ("Arc Terminals"), an indirect, wholly-owned subsidiary of Arc Logistics Partners LP ("Arc Logistics"). The 39-acre (unaudited) site has 84 tanks (unaudited) with a total storage capacity of approximately 1.5 million barrels (unaudited). The Portland Terminal Facility is capable of receiving, storing and delivering crude oil and refined petroleum products. Products are received and delivered via railroad or marine (up to Panamax size vessels). The marine facilities are accessed through a neighboring terminal facility via an owned pipeline. The Portland Terminal Facility offers heating systems, emulsions and an on-site product testing laboratory as ancillary services.
As of December 31, 2015, we completed the funding of an additional $10 million of terminal-related improvement projects in support of Arc Terminals’ commercial strategy to optimize the Portland Terminal Facility and generate stable cash flows, including: i) upgrade a portion of the existing storage assets; ii) enhance existing terminal infrastructure; and iii) develop, design, engineer and construct throughput expansion opportunities.
The asset is depreciated for book purposes over an estimated useful life of 30 years. The amount of depreciation recognized for the leased property for the years ended December 31, 2015, December 31, 2014 and December 31, 2013, was $1.2 million, $1.4 million and $0, respectively.
See Note 4 for further information regarding the Portland Lease Agreement related to the Portland Terminal Facility assets.
LEASED PROPERTY HELD FOR SALE
Eastern Interconnect Project (EIP)
Physical Assets
On November 1, 2012, the Company entered into a definitive Purchase Agreement with PNM to sell the Company’s 40 percent undivided interest in the EIP upon termination of the PNM Lease Agreement on April 1, 2015. Upon termination, the Company received $7.7 million for its undivided interest, resulting in no gain or loss being recorded during the three-month period ended June 30, 2015. For further information regarding the Purchase Agreement with PNM and the PNM Lease Agreement related to the EIP transmission assets, see Note 4.
The EIP transmission assets were utilized by the lessee to move electricity across New Mexico between Albuquerque and Clovis. The physical assets include 216 miles (unaudited) of 345 kilovolt (unaudited) transmission lines, towers, easement rights, converters and other grid support components. Originally, the assets were depreciated for book purposes over an estimated useful life of 20 years. Pursuant to the Purchase Agreement discussed in Note 4, the Company reevaluated the residual value used to calculate its depreciation of EIP, and determined that a change in estimate was necessary. The change in estimate resulted in higher depreciation expenses beginning in November of 2012 through the expiration of the lease on April 1, 2015.
The amount of depreciation expense related to the EIP leased property for the years ended December 31, 2015, December 31, 2014 and December 31, 2013, was $570 thousand, $2.3 million and $2.3 million, respectively.
EIP Leased Property Held for Sale consisted of the following:
EIP Leased Property Held for Sale
 
 
December 31, 2015
 
December 31, 2014
Leased asset
 
$

 
$
14,126,849

Less: accumulated depreciation
 

 
(5,878,933
)
Net leased asset held for sale
 
$

 
$
8,247,916

Leases
LEASES
LEASES
As of December 31, 2015, the Company had three significant leases. The table below displays the impact of the Company's most significant leases on total leased properties and total lease revenues for the periods presented.

As a Percentage of (1)

Leased Properties

Lease Revenues

As of December 31,

For the Years Ended December 31,

2015

2014

2015

2014
 
2013
Pinedale LGS
40.0%

79.2%

42.9%

71.9%
 
88.7%
Grand Isle Gathering System
50.1%


42.3%

 
Portland Terminal Facility
9.6%

17.2%

13.3%

19.0%
 
Public Service of New Mexico (2)

3.1%

1.3%

9.1%
 
11.3%
(1) Insignificant leases are not presented, thus percentages do not sum to 100%.
(2) The Public Service of New Mexico lease terminated on April 1, 2015. See additional discussion of the PNM lease under the heading Lease of Property Held for Sale, below.

Grand Isle Gathering System
Grand Isle Corridor, LP entered into a long-term triple-net lease agreement on June 30, 2015, relating to the use of the GIGS (the “Grand Isle Lease Agreement”) with Energy XXI GIGS Services, LLC (the "EXXI Tenant"). The Grand Isle Lease Agreement has an initial eleven-year term and may be extended for one additional term equal to the lesser of nine years or 75 percent of the expected remaining useful life of the GIGS. The EXXI Tenant’s obligations under the lease agreement are guaranteed by EXXI. During the initial term, the EXXI Tenant will make minimum monthly rental payments that are initially $2.6 million in year one, increase to a maximum of $4.2 million in year seven and decline to $3.5 million in year eleven. In addition, the EXXI Tenant will pay variable rent payments based on a ten percent participation above a pre-defined threshold, which will be calculated monthly on the volumes of EXXI oil that flow through the GIGS, multiplied by the average daily closing price of crude oil for the applicable calendar month. Variable rent will be capped at 39 percent of the total rent for each month. Tangible assets, excluding land, will be depreciated over the 30-year depreciable life of the leased property with associated depreciation expense of approximately $8.6 million annually beginning July 1, 2015 (unaudited).
As of December 31, 2015, and December 31, 2014, approximately $321 thousand and $0, respectively, of net deferred lease costs related to the GIGS are included in the accompanying Consolidated Balance Sheets. The deferred costs are amortized over the 11-year life of the Grand Isle Lease Agreement. For the years ended December 31, 2015, 2014 and 2013, $15 thousand, $0 and $0, respectively was included in amortization expense within the Consolidated Statement of Income.
In view of the fact that EXXI leases a substantial portion of the Company's net leased property, which is a significant source of revenues and operating income, its financial condition and ability and willingness to satisfy its obligations under its lease with the Company are expected to have a considerable impact on the Company's results of operations going forward.
EXXI is currently subject to the reporting requirements of the Exchange Act and is required to file with the SEC annual reports containing audited financial statements and quarterly reports containing unaudited financial statements. The audited financial statements and unaudited financial statements of EXXI can be found on the SEC's website at www.sec.gov (NASDAQ: EXXI). The Company makes no representation as to the accuracy or completeness of the audited and unaudited financial statements of EXXI, but has no reason to doubt the accuracy or completeness of such information. In addition, EXXI has no duty, contractual or otherwise, to advise the Company of any events that might have occurred subsequent to the date of such financial statements which could affect the significance or accuracy of such information.
Pinedale LGS
Pinedale LP entered into a long-term triple-net lease agreement on December 20, 2012, relating to the use of the Pinedale LGS (the “Pinedale Lease Agreement”) with Ultra Wyoming LGS, LLC (“Ultra Wyoming”), an indirect wholly-owned subsidiary of Ultra Petroleum. The Pinedale Lease Agreement has a fifteen-year initial term and may be extended for additional five-year terms at the sole discretion of Ultra Wyoming. Ultra Wyoming utilizes the Pinedale LGS to gather and transport a commingled stream of oil, natural gas and water, then further utilizes the Pinedale LGS to separate this stream into its separate components. Ultra Wyoming's obligations under the Pinedale Lease Agreement are guaranteed by Ultra Petroleum and Ultra Petroleum's operating subsidiary, Ultra Resources, Inc. (“Ultra Resources”), pursuant to the terms of a related parent guaranty. Annual rent for the initial term under the Pinedale Lease Agreement is a minimum of $20 million (as adjusted annually for changes based on the Consumer Price Index (“CPI”), subject to annual maximum adjustments of 2 percent). Additionally, the Pinedale Lease Agreement has a variable rent component based on the volume of liquid hydrocarbons and water that flowed through the Pinedale LGS in a prior month, subject to Pinedale LP not being in default under the Pinedale Lease Agreement. For 2015, the quarterly rent increased by $85 thousand to $5.2 million based on the CPI adjustment as specified in the lease terms. Total annual rent may not exceed $27.5 million during the initial fifteen-year term.
As of December 31, 2015, December 31, 2014 and December 31, 2013, approximately $734 thousand, $796 thousand and $857 thousand, respectively, of net deferred lease costs are included in the accompanying Consolidated Balance Sheets. The deferred costs are amortized over the 15-year life of the Pinedale Lease Agreement. For each of the years ended December 31, 2015, December 31, 2014 and December 31, 2013, $61 thousand is included in amortization expense within the Consolidated Statements of Income.
The assets comprising the Pinedale LGS include real property and land rights to which the purchase consideration was allocated based on relative fair values and equaled $122.3 million and $105.7 million, respectively, at the time of acquisition. Beginning in December 2012, the real property and land rights are being depreciated over the 26-year life of the related land lease.
In view of the fact that Ultra Petroleum leases a substantial portion of the Company's net leased property, which is a significant source of revenues and operating income, its financial condition and ability and willingness to satisfy its obligations under its lease with the Company are expected to have a considerable impact on the Company's results of operation going forward.
Ultra Petroleum is currently subject to the reporting requirements Exchange Act and is required to file with the SEC annual reports containing audited financial statements and quarterly reports containing unaudited financial statements. The audited financial statements and unaudited financial statements of Ultra Petroleum can be found on the SEC's website at www.sec.gov (NYSE: UPL). The Company makes no representation as to the accuracy or completeness of the audited and unaudited financial statements of Ultra Petroleum, but has no reason to doubt the accuracy or completeness of such information. In addition, Ultra Petroleum has no duty, contractual or otherwise, to advise the Company of any events that might have occurred subsequent to the date of such financial statements which could affect the significance or accuracy of such information.
Portland Terminal Facility
LCP Oregon entered into the Portland Lease Agreement on January 21, 2014. Arc Logistics has guaranteed the obligations of Arc Terminals under the Portland Lease Agreement. The Portland Lease Agreement grants Arc Terminals substantially all authority to operate the Portland Terminal Facility. During the initial fifteen-year term, Arc Terminals will make base monthly rental payments as well as variable rent payments based on the volume of liquid hydrocarbons that flowed through the Portland Terminal Facility in the prior month in excess of a designated threshold of 12,500 barrels per day of oil equivalent (unaudited). Variable rent is capped at 30 percent of total rent each month, which would be the equivalent of the Portland Terminal Facility’s expected throughput capacity.
Base rent as of December 31, 2015, increased to $513 thousand per month due to completion of $10.0 million in planned construction projects at the Portland Terminal Facility. For the years ended December 31, 2015, 2014 and 2013, $946 thousand, $241 thousand and $0, respectively, in incremental base rent was received due to construction completed as of the end of each year.
Arc Logistics is currently subject to the reporting requirements of the Exchange Act and is required to file with the SEC annual reports containing audited financial statements and quarterly reports containing unaudited financial statements. The audited financial statements and unaudited financial statements of Arc Logistics can be found on the SEC's web site at www.sec.gov (NYSE: ARCX). The Company makes no representation as to the accuracy or completeness of the audited and unaudited financial statements of Arc Logistics but has no reason to doubt the accuracy or completeness of such information. In addition, Arc Logistics has no duty, contractual or otherwise, to advise the Company of any events that might have occurred subsequent to the date of such financial statements which could affect the significance or accuracy of such information. None of the information in the public reports of Arc Logistics that are filed with the SEC is incorporated by reference into, or in any way form, a part of this filing.
The future contracted minimum rental receipts for all net leases as of December 31, 2015, are as follows:
Future Minimum Lease Receipts
Years Ending December 31,
 
Amount
2016
 
$
59,607,929

2017
 
60,931,762

2018
 
61,139,762

2019
 
63,468,195

2020
 
70,629,654

Thereafter
 
451,794,133

Total
 
$
767,571,435


Lease of Property Held for Sale
Public Service Company of New Mexico ("PNM")
The EIP leased asset held for sale was leased on a triple-net basis through April 1, 2015, (the "PNM Lease Agreement") to PNM, an independent electric utility company serving approximately 500 thousand customers (unaudited) in New Mexico. PNM is a subsidiary of PNM Resources Inc. (NYSE: PNM) ("PNM Resources").
At the time of acquisition, the lease payments under the PNM Lease Agreement were determined to be above market rates for similar leased assets and the Company recorded an intangible asset of $1.1 million for this premium which was amortized as a reduction to lease revenue over the lease term. See Note 13 below for further details of the intangible asset.
On November 1, 2012, the Company entered into a definitive Purchase Agreement with PNM to sell the Company’s 40 percent undivided interest in the EIP upon termination of the PNM Lease Agreement on April 1, 2015, for $7.7 million. Upon execution of the Agreement, the schedule of the lease payments under the PNM Lease Agreement was changed so that the last scheduled semi-annual lease payment was received by the Company on October 1, 2012. Additionally, PNM's remaining basic lease payments due to the Company were accelerated. The semi-annual payments of approximately $1.4 million that were originally scheduled to be paid on April 1, and October 1, 2013, were received by the Company on November 1, 2012. The three remaining lease payments due April 1, 2014, October 1, 2014, and April 1, 2015, were paid in full on January 2, 2014. For the years ended December 31, 2015, December 31, 2014 and December 31, 2013, revenue of $638 thousand, $2.6 million and $2.6 million respectively, is included in lease revenue within the Consolidated Statements of Income.
Mogas Acquisition
MOGAS ACQUISITION
MOGAS TRANSACTION
On November 24, 2014, our wholly owned taxable REIT subsidiary, Corridor MoGas, executed a Purchase Agreement (the “MoGas Purchase Agreement”) with Mogas Energy, LLC (“Seller”) to acquire all of the equity interests of two entities, MoGas Pipeline, LLC ("MoGas") and United Property Systems, LLC ("UPS") (collectively, the "MoGas Transaction"). MoGas is the owner and operator of an approximately 263-mile (unaudited) interstate natural gas pipeline system in and around St. Louis and extending into central Missouri. The pipeline system, regulated by FERC, delivers natural gas to both investor-owned and municipal local distribution systems and has eight firm transportation customers. The pipeline system receives natural gas at three receipt points (unaudited) and delivers that natural gas at 22 delivery points (unaudited). UPS owns 10.28 acres of real property (unaudited) that includes office and storage space which is leased to MoGas. A portion of that land is also leased to an operator of a small cement plant owned by a third party. The combined purchase price of MoGas and UPS was $125 million, funded by a combination of equity proceeds and revolving credit facility, as further discussed in Note 14 to these Consolidated Financial Statements.
On November 17, 2014, the Company completed a follow-on equity offering of 2,990,000 shares of common stock, raising approximately $102 million in gross proceeds at $6.80 per share (net proceeds of approximately $96 million after underwriters' discount). Then on November 24, 2014, the Company borrowed $32 million (net proceeds of approximately $29 million after $3 million in fees). The total cash proceeds of $125 million were then used to capitalize Corridor MoGas, $90 million of which was in the form of a term note, who then concurrently used the cash to fund the purchase price to the Seller, $7 million of which, was placed in an indemnity escrow account. The Purchase Agreement describes the circumstances under which escrowed funds are to be released and the party to receive such released funds. Currently, the Company has no reason to believe that any of the funds in escrow will be returned.
The Company accounted for the acquisition under the acquisition method in accordance with ASC 805, Business Combinations (“ASC 805”), and the initial accounting for this business combination is final and complete. The Company's assessment of the fair values and the allocation of purchase price to the identified tangible and intangible assets is its best estimate of fair value. The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed, which the Company determined using Level 1, Level 2 and Level 3 inputs:
Acquisition Date Fair Values
 
Amount
Leased Property:
 
Land
$
210,000

Buildings and improvements
1,188,000

Total Leased Property
$
1,398,000

 
 
Property and Equipment:
 
Land
$
580,000

Depreciable property:
 
Natural Gas Pipeline
119,081,732

Vehicles and Trailers
378,000

Office Equipment
43,400

Total Property and Equipment
$
119,503,132

 
 
Goodwill
$
1,718,868

Cash and cash equivalents
4,098,274

Accounts receivable
1,357,905

Prepaid assets
125,485

Accounts payable and other accrued liabilities
(3,781,664
)
 
 
Net assets acquired
$
125,000,000


The fair values of land, depreciable property and goodwill were determined using internally developed models that were based on market assumptions and comparable transportation data as well as external valuations performed by unrelated third parties. The market assumptions used as inputs to the Company’s fair value model include replacement construction costs, leasing assumptions, growth rates, discount rates, terminal capitalization rates and transportation yields. The Company uses data on its existing portfolio of investments as well as similar market data from third party sources, when available, in determining these Level 3 inputs. The carrying value of cash and cash equivalents, accounts receivable, prepaid assets and accounts payable and other accrued liabilities, approximate fair value due to their short term, highly liquid nature.
Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. Management believes that goodwill in the transaction results from various benefits. The pipeline system interconnects with three receipt points, the Panhandle Eastern, Rockies Express and Mississippi River Transmission Pipelines, which allows MoGas the flexibility to source natural gas from a variety of gas producing regions in the U.S. This advantageous position enhances operational efficiency, and allows MoGas customers to procure natural gas in times of peak demand and scarce supply. Two of the largest MoGas customers are also two large suppliers of natural gas for the St. Louis area. Additionally, the characteristics of the tangible assets and operations acquired in the MoGas Transaction are consistent with Company investment criteria and strategy. Some of these criteria include investments that are fixed asset intensive, with long depreciable lives, capable of providing stable cash flows due to limited commodity price sensitivity, as well as experienced management teams capable of effectively and efficiently operating the assets now and through possible future growth opportunities. Goodwill related to this acquisition is deductible for income tax purposes.
Pro Forma Financial Information (unaudited)
For comparative purposes, the following table illustrates the effect on the Consolidated Statements of Income and Comprehensive Income as well as earnings per share - basic and diluted as if the Company had consummated the MoGas Transaction as of January 1, 2013:
 
For the Year Ended
 
December 31, 2014
 
December 31, 2013
Total Revenue (1)
$
53,315,951

 
$
42,551,314

Total Expenses (2)
35,742,957

 
33,429,175

Operating Income
17,572,994

 
9,122,139

Other Income (Expense) (3)
(3,997,916
)
 
1,137,606

Tax Benefit (Expense) (4)
641,304

 
(734,461
)
Net Income
14,216,382

 
9,525,284

Less: Net Income attributable to non-controlling interest
1,556,157

 
1,466,767

Net Income attributable to CORR Stockholders
$
12,660,225

 
$
8,058,517

Earnings per share:
 
 
 
Basic and Diluted
$
1.37

 
$
1.03

Weighted Average Shares of Common Stock Outstanding:
 
 
 
Basic and Diluted (5)
9,236,345

 
7,819,879

(1) Includes elimination adjustments for intercompany sales and rent.
(2) Includes adjustments for an increase in management fee payable, elimination of intercompany purchases and rent, depreciation, and other miscellaneous expenses.
(3) Includes adjustments for interest expense and other miscellaneous income.
(4) Includes an adjustment for a deferred tax benefit.
(5) Shares outstanding were adjusted for the November 17, 2014, follow-on equity offering mentioned above.
Financing Notes Receivable
FINANCING NOTES RECEIVABLE
FINANCING NOTES RECEIVABLE
Black Bison Financing Notes Receivable
On March 13, 2014, our wholly-owned subsidiary, Corridor Bison, entered into a Loan Agreement with Black Bison Water Services, LLC ("Black Bison WS"). Black Bison WS's initial loan draw in the amount of $4.3 million was used to acquire real property in Wyoming and to pay loan transaction expenses. Corridor Bison agreed to loan Black Bison WS up to $11.5 million (the "Black Bison WS Loan") to finance the acquisition and development of real property to provide water sourcing, water disposal, or water treating and recycling services for the oil and natural gas industry.
On July 23, 2014, the Company increased its secured financing to Black Bison WS from $11.5 million to $15.3 million. The Company executed an amendment to the Black Bison WS Loan Agreement to increase the loan to $12 million, and entered into an additional loan for $3.3 million from a taxable REIT subsidiary of the Company, CorEnergy BBWS, on substantially the same terms (the "TRS Loan" and, together with the Black Bison WS Loan, as amended, the "Black Bison Loans"). The purpose of the increase in the secured financing was to fund the acquisition and development of real property and related equipment to provide water sourcing, water disposal, or water treating and recycling services for the oil and natural gas industry. There were no other material changes to the terms of the loan agreement. In connection with the Amendment and the TRS Loan, the Company fully funded the remainder of the $15.3 million capacity of the combined Black Bison Loans.
Interest initially accrued on the outstanding principal amount of both Black Bison Loans at an annual base rate of 12 percent, which base rate increases by 2 percent of the current base rate per year. In addition, starting in April 2015 and continuing for each month thereafter, the outstanding principal of the Black Bison Loans was set to bear variable interest calculated as a function of the increase in volume of water treated by Black Bison WS during the particular month. The base interest plus variable interest, paid monthly, is capped at 19 percent per annum. The Black Bison Loans mature on March 31, 2024, and were set to amortize by quarterly payments beginning on March 31, 2015. The Loans are secured by the real property and equipment held by Black Bison WS and the outstanding equity in Black Bison WS and its affiliates. The Black Bison Loans are also guarantied by all affiliates of Black Bison WS and further secured by all assets of those guarantors.
Due to reduced drilling activity in Black Bison WS’s area of operations, during the first quarter of 2015 Black Bison WS requested, and the Company granted, a waiver of certain financial covenants. Black Bison WS and its affiliates did not make the principal payments to the Company that were scheduled to begin on March 31, 2015. As a result, we entered into an agreement with Black Bison WS, effective June 17, 2015 (the "June Forbearance Agreement"), as follows:
We agreed to forbear through August 15, 2015, from exercising any remedies relating to certain existing defaults. A reduced principal and interest payment schedule was applied (as described below). The forbearance period, which terminated on August 15, 2015, was subject to compliance by Black Bison WS and its affiliates with additional conditions set forth in the agreement and to the non-occurrence of any defaults under the Loans other than the existing defaults.
We agreed to accept temporarily reduced interest payments under the Black Bison Loans in the maximum amount of $50 thousand per month for June and July of 2015, with such maximum amount increasing to $75 thousand per month for August through December 2015 (subject to the continuation of the forbearance period in the Company’s sole discretion). Interest that accrues but is not payable pursuant to these terms during the forbearance period was to be added to the principal of the Black Bison Loans. We accrued additional interest from the date on which such interest otherwise would have been payable, and shall be payable in full upon termination of the forbearance period. No principal payments were required during the forbearance period. Black Bison WS also agreed to a general release of any prior claims related to the Black Bison Loans or the forbearance and to reimburse the Company for its additional expenses incurred in connection with granting the forbearance agreement.
When the June Forbearance Agreement expired on August 15, 2015, we entered into a new forbearance agreement (the “August Forbearance Agreement”) which includes the following material terms:
We agreed to continue to forbear from exercising any remedies relating to the existing defaults during a new forbearance period, which was extended to the earlier to occur of (a) thirty days after we give Black Bison WS notice of the termination of the August Forbearance Agreement and (b) June 30, 2016, subject again to compliance by Black Bison WS and its affiliates with additional conditions set forth in the agreement and to the non-occurrence of any defaults under the Black Bison Loans other than the existing defaults.
We agreed to not require any principal or interest payments on the indebtedness during the period in which the August Forbearance Agreement is in effect. Interest that accrues but is not payable pursuant to these terms during the forbearance period will be added to the principal of the Black Bison Loans, will accrue additional interest from the date on which such interest otherwise would have been payable, and shall be payable in full upon termination of the forbearance period under the August Forbearance Agreement.
The August Forbearance Agreement clarified that the holders of the outstanding equity securities of Black Bison and its affiliates that are pledged as security for the Black Bison Loans cannot vote such securities for the purpose of approving any election to file for bankruptcy protection or related actions during the forbearance period.
Drilling activity in the Black Bison area of operations has continued to decline. Due to these market conditions the Company has determined a provision for loan loss with respect to the Black Bison Loans should be reflected for financial reporting purposes. The 2015 income statement reflects a Provision for Loan Loss of $13.8 million, which includes $14 thousand in deferred origination income, net of deferred origination costs, and $355 thousand of interest accrued under the Forbearance agreement up to the second quarter of 2015.
Financing revenue as presented in the 2015 financial statements does not reflect any financing revenue from the notes for the Black Bison Loans in the third and fourth quarters. These notes are considered by the Company to be on non-accrual status and have been reflected as such in the financial statements. As a result, under GAAP we no longer recognize Financing revenue on our Black Bison Loans. As of December 31, 2015, the net note receivable from Black Bison WS is $2.0 million.
As a condition to the Black Bison WS Loan, Corridor Bison acquired a Warrant to purchase a number of equity units, which as of March 13, 2014 represented 15 percent of the outstanding equity of Black Bison Intermediate Holdings, LLC ("Intermediate Holdings"). Corridor Bison paid $34 thousand for the Warrant, which amount was determined to represent the fair value of the Warrant as of the date of purchase. Corridor Bison capitalized approximately $13 thousand in asset acquisition expenses in relation to the Warrant. The exercise price of the Warrant was $3.16 per unit. The exercise price increases at a rate of 12 percent per annum.
Corridor Bison assigned to CorEnergy BBWS its rights and obligations in the Warrant dated March 13, 2014. As a condition of the TRS Loan, the parties entered into an Amended and Restated Warrant, pursuant to which the amount available to purchase thereunder was increased to a number of equity units, which, as of July 23, 2014, represented 18.72 percent of the outstanding equity of Intermediate Holdings. CorEnergy BBWS paid an additional $51 thousand for this increase in the amount that could be purchased pursuant to the Amended and Restated Warrant. CorEnergy BBWS capitalized $25 thousand in asset acquisition expenses in relation to the Warrant. Including capitalized asset acquisition costs, the Company paid approximately $123 thousand for the Warrant, which is recorded at a fair value of $0 as of December 31, 2015. The amount paid was determined to be the current value of the incremental amount that could be purchased under the Amended and Restated Warrant at the date of purchase. Furthermore, the warrant qualifies as a derivative, with all changes in fair value reflected in the consolidated statements of income and comprehensive income in the current period.
Four Wood Financing Note Receivable
On December 31, 2014, our wholly-owned subsidiary, Four Wood Corridor, LLC (“Four Wood Corridor”), entered into a Loan Agreement with SWD Enterprises, LLC (“SWD Enterprises”), a wholly-owned subsidiary of Four Wood Energy, pursuant to which Four Wood Corridor made a loan to SWD Enterprises for $4.0 million. Concurrently, our TRS, Corridor Private entered into a TRS Loan Agreement with SWD Enterprises, pursuant to which Corridor Private made a loan to SWD Enterprises for $1.0 million. The proceeds of the REIT loan and the TRS loan were used by SWD Enterprises and its affiliates to finance the acquisition of real and personal property that provides saltwater disposal services for the oil and natural gas industry, and to pay related expenses.
For the REIT loan from Four Wood Corridor, interest initially accrues on the outstanding principal at an annual base rate of 12 percent. For the TRS loan from Corridor Private, interest initially accrues on the outstanding principal at an annual base rate of 13 percent. The base rates of both loans will increase by 2 percent of the current base rate per year. In addition, for both loans, starting in January 2016 and continuing for each month thereafter, the outstanding principal of the Loans will bear variable interest calculated as a function of the increase in volume of water treated by SWD Enterprises during the particular month. The base interest plus variable interest, paid monthly, is capped at 19 percent per annum for the REIT loan and 20 percent per annum for the TRS Loan. The Loans mature on December 31, 2024, and are to be amortized by quarterly payments beginning March 31, 2016, and annual prepayments based upon free cash flows of the Borrower and its affiliates commencing on January 15, 2016. The Loans are secured by the real property and equipment held by SWD Enterprises and the outstanding equity in SWD Enterprises and its affiliates. The Loans are also guaranteed by all affiliates of SWD Enterprises.
SWD Enterprises is required through the loan agreement to comply with certain financial covenants. During 2015, the Company was made aware of an event of default for failure to comply with the Tangible Net Worth and Coverage Ratio covenant for the reporting period ending June 30, 2015. SWD Enterprises has continued to make regular interest payments on the term loan, has raised equity, and made a prepayment of principal on the REIT loan. SWD Enterprises is not due to make principal payments until first quarter 2016. As a result of the equity raise, the Company agreed to amend the terms of the loan agreement to update the financial covenants to a level that CORR believes SWD Enterprises will be able to meet. The amended terms of the loan agreement do not provide any concessions for interest rate terms or maturity of the credit facility. The amended terms did require SWD Enterprises to make a $100 thousand prepayment of principal on the REIT loan. The Company believes the notes receivable with SWD Enterprises are fully collectible as of December 31, 2015.
Variable Interest Entities
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES
The Company's variable interest in Variable Interest Entities ("VIE" or "VIEs") currently are in the form of equity ownership and loans provided by the Company to a VIE. The Company examines specific criteria and uses its judgment when determining if the Company is the primary beneficiary of a VIE and is therefore required to consolidate the investments. Factors considered in determining whether the Company is the primary beneficiary include risk-and-reward sharing, experience and financial condition of the other partner(s), voting rights, involvement in day-to-day capital and operating decisions, representation on a VIE's executive committee or Board of Directors, whether or not the Company has the power to direct the activities of the VIE that most significantly impact the VIE's economic performance, existence of unilateral kick-out rights or voting rights, and the level of economic disproportionality between the Company and the other partner(s).
Consolidated VIEs
As of December 31, 2015, the Company does not have any investments in VIEs that qualify for consolidation.
Unconsolidated VIE
At December 31, 2015, the Company's recorded investment in Black Bison WS and Intermediate Holdings, collectively a VIE that is unconsolidated, was $2.0 million. The Company's maximum exposure to loss associated with the investment is limited to the Company's outstanding notes receivable, discussed in Note 6, totaling $2.0 million and $15.9 million as of December 31, 2015, and December 31, 2014, respectively. While this entity is a VIE, the Company has determined that the power to direct the activities of the VIE that most significantly impact the VIE's economic performance is not held by the Company, therefore the VIE is not consolidated.
Income Taxes
INCOME TAXES
INCOME TAXES
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting and tax purposes. Components of the Company’s deferred tax assets and liabilities as of December 31, 2015, and 2014, are as follows:
Deferred Tax Assets and Liabilities
 
 
December 31, 2015
 
December 31, 2014
Deferred Tax Assets:
 
 
 
 
Net operating loss carryforwards
 
$
543,116

 
$
679,692

Net unrealized loss on investment securities
 
251,539

 

Cost recovery of leased and fixed assets
 

 
1,042,207

Loan Loss Provision
 
1,257,436

 

Other loss carryforwards
 
1,833,240

 

Sub-total
 
$
3,885,331

 
$
1,721,899

Deferred Tax Liabilities:
 
 
 
 
Basis reduction of investment in partnerships
 
$
(2,159,058
)
 
$
(2,842,332
)
Net unrealized gain on investment securities
 

 
(142,154
)
Cost recovery of leased and fixed assets
 
(119,297
)
 

Sub-total
 
(2,278,355
)
 
(2,984,486
)
Total net deferred tax asset (liability)
 
$
1,606,976

 
$
(1,262,587
)

For the year ended December 31, 2015, the total deferred tax asset presented above relates to the Company's TRSs. The Company recognizes the tax benefits of uncertain tax positions only when the position is “more likely than not” to be sustained upon examination by the tax authorities based on the technical merits of the tax position. The Company’s policy is to record interest and penalties on uncertain tax positions as part of tax expense. Tax years subsequent to the year ending November 30, 2007, remain open to examination by federal and state tax authorities.
Total income tax expense differs from the amount computed by applying the federal statutory income tax rate of 35 percent for the years ended December 31, 2015, 2014, and 2013, to income or loss from operations and other income and expense for the years presented, as follows:
Income Tax Expense (Benefit)
 
 
For the Years Ended December 31,
 
 
2015
 
2014
 
2013
Application of statutory income tax rate
 
$
3,630,325

 
$
2,375,903

 
$
2,608,151

State income taxes, net of federal tax (benefit)
 
(134,597
)
 
(47,731
)
 
273,174

Federal Tax Attributable to Income of Real Estate Investment Trust
 
(5,189,849
)
 
(2,607,207
)
 
(927,254
)
Other
 
(253,432
)
 
53,472

 
995,447

Total income tax expense (benefit)
 
$
(1,947,553
)
 
$
(225,563
)
 
$
2,949,518


Total income taxes are computed by applying the federal statutory rate of 35 percent plus a blended state income tax rate. Corridor Public Inc. and Corridor Private Inc. had a blended state rate of approximately 2.82 percent for the year ended December 31, 2015, 3.92 percent for the year ended December 31, 2014 and 3.11 percent for the year ended December 31, 2013. CorEnergy BBWS Inc. does not record a provision for state income taxes because it operates only in Wyoming, which does not have state income tax. Because Mowood Corridor Inc. and Corridor MoGas Inc. primarily only operate in the state of Missouri, a blended state income tax rate of 5 percent was used for the operations of both TRSs for the years ended December 31, 2015, 2014, and 2013. For year ended December 31, 2015, all of the income tax benefit presented above relates to the assets and activities held in the Company's TRSs. The components of income tax benefit include the following for the periods presented:
Components of Income Tax Expense (Benefit)
 
 
For the Years Ended December 31,
 
 
2015
 
2014
 
2013
Current tax expense
 
 
 
 
 
 
Federal
 
$
781,941

 
$
3,456,858

 
$
(7,139
)
State (net of federal tax benefit)
 
140,069

 
387,079

 
20,613

Total current tax expense
 
922,010

 
3,843,937

 
13,474

Deferred tax expense (benefit)
 
 
 
 
 
 
Federal
 
(2,594,897
)
 
(3,634,689
)
 
2,683,483

State (net of federal tax benefit)
 
(274,666
)
 
(434,811
)
 
252,561

Total deferred tax expense (benefit)
 
(2,869,563
)
 
(4,069,500
)
 
2,936,044

Total income tax expense (benefit), net
 
$
(1,947,553
)
 
$
(225,563
)
 
$
2,949,518


As of December 31, 2014 the TRSs had a net operating loss of $894 thousand. For the year ended December 31, 2015, the TRSs incurred a total net operating loss of approximately $478 thousand, resulting in a total net operating loss of approximately $1.4 million as of December 31, 2015. The net operating loss may be carried forward for 20 years. If not utilized, this net operating loss will expire as follows: $90 thousand, $804 thousand, and $478 thousand in the years ending December 31, 2033, 2034, and 2035 respectively. The amount of deferred tax asset for net operating losses as of December 31, 2015, includes amounts for the year ended December 31, 2015. The aggregate cost of securities for federal income tax purposes and securities with unrealized appreciation and depreciation, were as follows:
Aggregate Cost of Securities for Income Tax Purposes (Unaudited)
 
 
December 31, 2015
 
December 31, 2014
Aggregate cost for federal income tax purposes
 
$
4,750,252

 
$
4,218,986

Gross unrealized appreciation
 
5,133,908

 
7,436,696

Gross unrealized depreciation
 
(97,500
)
 
 
Net unrealized appreciation
 
$
5,036,408

 
$
7,436,696


The Company provides the following tax information to its common stockholders pertaining to the character of distributions paid during tax years 2013, 2014, and 2015. For a stockholder that received all distributions in cash during 2015, 72 percent (unaudited) will be treated as ordinary dividend income and 28 percent (unaudited) will be treated as return of capital. Of the ordinary dividend income, 3 percent (unaudited) will be treated as qualified dividend income. The per share characterization by quarter is reflected in the following tables:
2015 Common Stock Tax Information (unaudited)
Record Date
 
Ex-Dividend Date
 
Payable Date
 
Total Distribution per Share
 
Total Ordinary Dividends
 
Qualified Dividends
 
Capital Gain Distributions
 
Nondividend Distributions
02/13/2015
 
02/11/2015
 
02/27/2015
 
$
0.6500

 
$
0.4680

 
$
0.0126

 
$

 
$
0.1820

05/15/2015
 
05/13/2015
 
05/29/2015
 
0.6750

 
0.4860

 
0.0131

 

 
0.1890

08/17/2015
 
08/13/2015
 
08/31/2015
 
0.6750

 
0.4860

 
0.0131

 

 
0.1890

11/13/2015
 
11/10/2015
 
11/30/2015
 
0.7500

 
0.5400

 
0.0146

 

 
0.2100

Total 2015 Distributions
 
$
2.7500

 
$
1.9800

 
$
0.0534

 
$

 
$
0.7700

2014 Common Stock Tax Information (unaudited)
Record Date
 
Ex-Dividend Date
 
Payable Date
 
Total Distribution per Share
 
Total Ordinary Dividends
 
Qualified Dividends
 
Capital Gain Distributions
 
Nondividend Distributions
01/13/2014
 
01/09/2014
 
01/23/2014
 
$
0.6250

 
$
0.4640

 
$
0.2250

 
$

 
$
0.1610

05/14/2014
 
05/12/2014
 
05/22/2014
 
0.6450

 
0.4790

 
0.2320

 

 
0.1660

08/15/2014
 
08/13/2014
 
08/29/2014
 
0.6500

 
0.4825

 
0.2335

 

 
0.1675

11/14/2014
 
11/12/2014
 
11/28/2014
 
0.6500

 
0.4825

 
0.2335

 

 
0.1675

Total 2014 Distributions
 
$
2.5700

 
$
1.9080

 
$
0.9240

 
$

 
$
0.6620

2013 Common Stock Tax Information (unaudited)
Record Date
 
Ex-Dividend Date
 
Payable Date
 
Total Distribution per Share
 
Total Ordinary Dividends
 
Qualified Dividends
 
Capital Gain Distributions
 
Nondividend Distributions
03/08/2013
 
03/06/2013
 
03/19/2013
 
$
0.6250

 
$
0.6250

 
$
0.6250

 
$

 
$

06/28/2013
 
06/26/2013
 
07/05/2013
 
0.6250

 
0.1835

 
0.1835

 

 
0.4415

09/30/2013
 
09/26/2013
 
10/04/2013
 
0.6250

 

 

 

 
0.6250

Total 2013 Distributions
 
$
1.8750

 
$
0.8085

 
$
0.8085

 
$

 
$
1.0665


The Company provides the following tax information to its preferred stockholders pertaining to the character of distributions paid during the 2015 tax year. For a stockholder that received all distributions in cash during 2015, 100 percent (unaudited) will be treated as ordinary dividend income and 0 percent (unaudited) will be treated as return of capital. Of the ordinary dividend income, 3 percent (unaudited) will be treated as qualified dividend income. The per share characterization by quarter is reflected in the following table:
2015 Preferred Stock Tax Information (unaudited)
Record Date
 
Ex-Dividend Date
 
Payable Date
 
Total Distribution per Share
 
Total Ordinary Dividends
 
Qualified Dividends
 
Capital Gain Distributions
 
Nondividend Distributions
05/15/2015
 
05/13/2015
 
06/01/2015
 
$
0.6351

 
$
0.6351

 
$
0.0171

 
$

 
$

08/17/2015
 
08/13/2015
 
08/31/2015
 
0.4609

 
0.4609

 
0.0124

 

 

11/13/2015
 
11/11/2015
 
11/30/2015
 
0.4609

 
0.4609

 
0.0124

 

 

Total 2015 Distributions
 
$
1.5569

 
$
1.5569

 
$
0.0419

 
$

 
$


We elected effective for our 2013 tax year to be treated as a REIT for federal income tax purposes. Our REIT election, assuming continued compliance with the applicable tests, will continue in effect for subsequent tax years. The Company satisfied the annual income test and the quarterly asset tests necessary for us to qualify to be taxed as a REIT for 2013, 2014 and 2015. Distributions made during 2013 and treated as qualifying dividend income relate to pre-REIT tax years earnings and profits that were required to be distributed by calendar year-end 2013. Distributions made during 2014 and 2015 and treated as qualifying dividend income relate to taxable dividends received from our TRSs that were received and distributed in 2014 and 2015.
Property and Equipment
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
Property and Equipment
 
 
December 31, 2015
 
December 31, 2014
Land
 
$
580,000

 
$
580,000

Natural gas pipeline
 
124,386,348

 
124,297,157

Vehicles and trailers
 
524,921

 
506,958

Office equipment and computers
 
87,696

 
59,027

Gross property and equipment
 
125,578,966

 
125,443,142

Less: accumulated depreciation
 
(5,948,988
)
 
(2,623,020
)
Net property and equipment
 
$
119,629,978

 
$
122,820,122



The amounts of depreciation of property and equipment recognized for the years ended December 31, 2015, December 31, 2014 and December 31, 2013, were $3.3 million, $593 thousand and $283 thousand, respectively.
Concentrations
CONCENTRATIONS
CONCENTRATIONS
MoGas
MoGas relies on certain key customers for a significant portion of its revenues. Laclede Gas, Ameren Energy and Omega Pipeline Company (an affiliate of the Company) accounted for approximately 66 percent, 19 percent and 10 percent, respectively, of MoGas' contracted transportation revenues for the year ended December 31, 2015 and 67%, 19%, and 10%, respectively, for the 37-day period ending December 31, 2014.
Mowood, Omega
Omega had a 10-year agreement (the "DOD Agreement") with the Department of Defense (“DOD”) to provide natural gas and gas distribution services to Fort Leonard Wood. The DOD Agreement expired January 31, 2015. On January 28, 2015, the DOD awarded Omega a 6-month bridge agreement with very similar terms and conditions as the original agreement for Omega to continue providing natural gas and gas distribution services until a new 10-year agreement could be reached. On June 12, 2015, the DOD gave notice of their intent to extend the bridge agreement to October 31, 2015, and again on October 16, 2015, to extend the bridge agreement to January 31, 2016. The extensions were made to provide additional time to negotiate terms for a new agreement. On January 28, 2016, the DOD awarded Omega a new 10-year agreement with very similar terms and conditions as the original and bridge agreements for Omega to continue providing natural gas and gas distribution services through March 31, 2026.
Revenue related to the DOD contract accounted for 89 percent, 88 percent, and 80 percent of our sales revenue for the years ended December 31, 2015, 2014 and 2013, respectively. Omega performs management and operational services related to the operation and expansion of the natural gas distribution system used by the DOD. The amount due from the DOD accounts for 10 percent and 25 percent of the consolidated accounts and other receivables balances as of December 31, 2015 and 2014, respectively.
Omega’s contracts for its supply of natural gas are concentrated among select providers. Purchases from its largest supplier of natural gas accounted for 91 percent, 64 percent, and 41 percent of our cost of sales after intercompany eliminations for the years ended December 31, 2015, 2014, and 2013, respectively. Omega also experiences a substantial amount of seasonality in gas sales. As a result, overall sales and operating income are generally higher in the first and fourth quarters and lower during the second and third quarters.
Management and Advisory Agreements
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT
On December 1, 2011, the Company executed a Management Agreement with Corridor InfraTrust Management, LLC (“Corridor”), a related party. Under the Management Agreement, Corridor (i) presents the Company with suitable acquisition opportunities consistent with the investment policies and objectives of the Company, (ii) is responsible for the day-to-day operations of the Company, and (iii) performs such services and activities relating to the assets and operations of the Company as may be appropriate. A new Management Agreement between the Company and Corridor was approved by the Board of Directors and became effective July 1, 2013. The new agreement did not change in any respect the terms for determination or payment of compensation for the Manager, does not have a specific term, and will remain in place unless terminated by the Company or the Manager in the manner permitted pursuant to the agreement. The new management agreement was amended as of January 1, 2014, to change the methodology for calculating the quarterly management fee.
The terms of the Management Agreement include a quarterly management fee equal to 0.25 percent (1.00 percent annualized) of the value of the Company’s Managed Assets as of the end of each quarter. For purposes of the Management Agreement, “Managed Assets” means the total assets of the Company (including any securities receivables, other personal property or real property purchased with or attributable to any borrowed funds) minus (A) the initial invested value of all non-controlling interests, (B) the value of any hedged derivative assets, (C) any prepaid expenses, and (D) all of the accrued liabilities other than (1) deferred taxes and (2) debt entered into for the purpose of leverage. For purposes of the definition of Managed Assets, the Company’s securities portfolio will be valued at then current market value. For purposes of the definition of Managed Assets, other personal property and real property assets will include real and other personal property owned and the assets of the Company invested, directly or indirectly, in equity interests in or loans secured by real estate or personal property (including acquisition related costs and acquisition costs that may be allocated to intangibles or are unallocated), valued at the aggregate historical cost, before reserves for depreciation, amortization, impairment charges or bad debts or other similar noncash reserves.
On May 8, 2015, the Company entered into a new Management Agreement with Corridor, effective as of May 1, 2015 (the “New Management Agreement”), that replaced the prior Management Agreement. The following material terms of the prior Management Agreement, as described in our Annual Report on Form 10-K for the year ended December 31, 2014, are carried forward in the New Management Agreement:
Under the New Management Agreement, Corridor (i) presents the Company with suitable acquisition opportunities consistent with the investment policies and objectives of the Company, (ii) is responsible for the day-to-day operations of the Company, and (iii) performs such services and activities relating to the assets and operations of the Company as may be appropriate.
The terms of the New Management Agreement provide for a quarterly management fee equal to 0.25 percent (1.00 percent annualized) of the value of the Company’s Managed Assets as of the end of each quarter. For purposes of the New Management Agreement, “Managed Assets” is determined in the same manner as under the prior Management Agreement, as described in Item 1 of our Annual Report on Form 10-K.
The New Management Agreement also includes a quarterly incentive fee of 10 percent of the increase in distributions paid over a distribution threshold equal to $0.125 per share per quarter, and requires that at least half of any incentive fees be reinvested in the Company’s common stock.
The New Management Agreement varies from the prior Management Agreement in three principal ways. First, the new agreement eliminates the ability of the independent directors to terminate the agreement for poor investment performance. However, the New Management Agreement gives a majority of the stockholders of the Company, or two-thirds of the independent directors, the ability to terminate the agreement for any reason on thirty (30) days’ prior written notice, so long as that notice is delivered with a termination payment equal to three times the base management fee and incentive fee paid to the manager in the last four quarters. Second, the New Management Agreement clarifies that the manager is to be reimbursed for all fees and travel expenses incurred by its staff while conducting business expected to benefit the Company. Finally, the New Management Agreement, which does not have a specific term, and will remain in place unless terminated by the Company or Corridor in the manner permitted pursuant to the agreement, deletes certain references to the Investment Company Act of 1940 that are no longer relevant to the Company. The foregoing description of the terms of the New Management Agreement is qualified in its entirety by reference to the full terms of such agreement, which is incorporated by reference to the Registrant's form 10-Q, filed May 11, 2015.
During the year ended December 31, 2015, and the first quarter of 2016, the Company and the Manager agreed to the following modifications to the fee arrangements described above:
in order to ensure equitable application of the quarterly management fee provisions of the New Management Agreement to the GIGS acquisition, which closed on June 30, 2015, the Manager waived any incremental management fee due as of the end of the second quarter based on the net impact of the GIGS Acquisition as of June 30, 2015;
in light of the Provision for Loan Loss recorded with respect to the Black Bison Loans as described in Note 6, the Manager voluntarily recommended, and the Company agreed, that effective on and after September 30, 2015, solely for the purpose of computing the value of the Company’s Managed Assets in calculating the quarterly management fee described above, the Company’s investment in the Black Bison Loans and the Black Bison Warrant will be valued based on their estimated net realizable value (which shall not exceed the amount of the Company’s initial investment) as of the end of the quarter for which the Management Fee is to be calculated;
in light of the provision for uncollectible interest recorded with respect to Black Bison loans as described in Note 6, the Manager voluntarily recommended, and the Company agreed, that the Manager would waive $133,194 of the total $278,619 incentive fee that would otherwise be payable under the provisions described above with respect to dividends paid on the Company’s common stock during the year ended December 31, 2015, and accordingly the Manager received an incentive fee of $145,425 for such period.
Fees incurred under the Management Fee Agreement for the years ended December 31, 2015, 2014, and 2013 were $5.7 million, $3.5 million, and $2.6 million, respectively, and are reported in the General and Administrative line item on the Income Statement.
The Company pays Corridor, as the Company's Administrator pursuant to an Administrative Agreement, a fee equal to an annual rate of 0.04 percent of the value of the Company's Managed Assets, with a minimum annual fee of $30 thousand. Fees incurred under the Administrative Agreement for the years ended December 31, 2015, 2014, and 2013 were $224 thousand, $134 thousand, and $112 thousand, respectively, and are reported in the General and Administrative line item on the Income Statement.
Fair Value of Other Securities
FAIR VALUE OF OTHER SECURITIES
FAIR VALUE OF OTHER SECURITIES
The major components of net realized and unrealized gain or loss on trading securities for the years ended December 31, 2015, 2014 and 2013 are as follows:
Major Components of Net Realized and Unrealized Loss on Trading Securities
 
For the Years Ended December 31,
 
2015
 
2014
 
2013
Net unrealized loss on trading securities
$

 
$

 
$

Net realized loss on trading securities

 

 
(251,213
)
Total net realized and unrealized loss on trading securities
$

 
$

 
$
(251,213
)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following tables provide the fair value measurements of applicable Company assets and liabilities by level within the fair value hierarchy as of December 31, 2015, and December 31, 2014. These assets and liabilities are measured on a recurring basis.
December 31, 2015
 
 
December 31, 2015
 
Fair Value
 
 
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
Other equity securities
 
$
8,393,683

 
$

 
$

 
$
8,393,683

Total Assets
 
$
8,393,683

 
$

 
$

 
$
8,393,683

December 31, 2014
 
 
December 31, 2014
 
Fair Value
 
 
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
Other equity securities
 
$
9,572,181

 
$

 
$

 
$
9,572,181

Total Assets
 
$
9,572,181

 
$

 
$

 
$
9,572,181

The changes for all Level 3 securities measured at fair value on a recurring basis using significant unobservable inputs for the years ended December 31, 2015 and 2014, are as follows:
Level 3 Rollforward
For the Year Ended December 31, 2015
 
Fair Value Beginning Balance
 
Acquisitions
 
Disposals
 
Total Realized and Unrealized Gains/(Losses) Included in Net Income
 
Return of Capital Adjustments Impacting Cost Basis of Securities
 
Fair Value Ending Balance
 
Changes in Unrealized Losses, Included In Net Income, Relating to Securities Still Held (1)
Other equity securities
 
$
9,217,181

 
$

 
$

 
$
(1,073,243
)
 
$
249,745

 
$
8,393,683

 
$
(1,073,243
)
Warrant investment
 
355,000

 

 

 
(355,000
)
 

 

 
(355,000
)
Total
 
$
9,572,181

 
$

 
$

 
$
(1,428,243
)
 
$
249,745

 
$
8,393,683

 
$
(1,428,243
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Year Ended December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other equity securities
 
$
23,304,321

 
$

 
$
(13,245,379
)
 
$
139,612

 
$
(981,373
)
 
$
9,217,181

 
$
139,612

Warrant Investment
 
 
 
97,500

 
 
 
257,500

 
 
 
355,000

 
257,500

Total
 
$
23,304,321

 
$
97,500

 
$
(13,245,379
)
 
$
397,112

 
$
(981,373
)
 
$
9,572,181

 
$
397,112

(1) Located in Net realized and unrealized gain on other equity securities in the Consolidated Statements of Income

The Company utilizes the beginning of reporting period method for determining transfers between levels. There were no transfers between levels 1, 2 or 3 for the years ended December 31, 2015 and 2014.
In accordance with ASC 820, the Company fair values their derivative financial instruments. Please refer to Note 17, Interest Rate Hedge Swaps, for more information. Additionally, the Company had a non-recurring fair value measurement related to the acquisition of an asset retirement obligation, see Note 16, Asset Retirement Obligation, for more information.
In connection with the October 2014 sale of the Company's shares in VantaCore, a portion of the proceeds were placed in escrow and a receivable was recorded. Changes in the fair value of the escrow receivable are recorded as a net realized or unrealized gain or loss on other equity securities included within the Consolidated Statements of Income and Comprehensive Income. For the years ended December 31, 2015 and 2014, approximately $365 thousand and $5 thousand, were included as an unrealized gain, respectively.
Valuation Techniques and Unobservable Inputs
The Company’s other equity securities, which represent securities issued by private companies, are classified as Level 3 assets. Significant judgment is required in selecting the assumptions used to determine the fair values of these investments. See Note 2, Significant Accounting Policies, for additional discussion.
For the year ended December 31, 2014, the Company’s Warrant Investment was valued using a binomial option pricing model. The key assumptions used in the binomial model are the fair value of equity of the underlying business; the Warrant's strike price; the expected volatility of equity; the time to the Warrant's expiry; the risk-free rate, and the expected dividend yields. Due to the inherent uncertainty of determining the fair value of the Warrant Investment, which does not have a readily available market, the assumptions used the binomial model to value the Company’s Warrant Investment were based on Level 2 and Level 3 inputs. The Company’s Warrant Investment was valued at $0 at December 31, 2015 due to the current reduction in Black Bison’s business activity that also resulted in the Provision for Loan Loss with respect to the Black Bison Loans discussed in further detail in Note 6.

As of December 31, 2015 and 2014, the Company’s investment in Lightfoot Capital Partners, LP and Lightfoot Capital Partners GP LLC, collectively, ("Lightfoot") is its only remaining significant private company investment. Lightfoot in turn owns a combination of public and private investments. Therefore, Lightfoot was valued using a combination of the following valuation techniques: (i) public share price of private companies' investments discounted for a lack of marketability, with the discount estimated at 11.8 percent to 15.2 percent and 17.7 percent to 22.8 percent as of December 31, 2015 and 2014, respectfully, and (ii) discounted cash flow analysis using an estimated discount rate of 14.0 percent to 16.0 percent and 13.0 percent to 15.0 percent as of December 31, 2015 and 2014, respectively. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investment may fluctuate from period to period. Additionally, the fair value of the Company’s investment may differ from the values that would have been used had a ready market existed for such investment and may differ materially from the values that the Company may ultimately realize.
As of both December 31, 2015 and 2014, the Company held a 6.6 percent and 1.5 percent equity interest in Lightfoot LP and Lightfoot GP, respectively.
Certain condensed combined unaudited financial information of the unconsolidated affiliate, Lightfoot, is presented in the following tables (in thousands).
 
 
December 31, 2015
(Unaudited)
 
December 31, 2014
(Unaudited)
Assets
 
 
 
 
Current assets
 
$
24,276

 
$
25,783

Noncurrent assets
 
696,461

 
382,957

Total Assets
 
$
720,737

 
$
408,740

Liabilities
 
 
 
 
Current liabilities
 
$
19,993

 
$
14,318

Noncurrent liabilities
 
246,808

 
113,810

Total Liabilities
 
$
266,801

 
$
128,128

 
 
 
 
 
Partner's equity
 
453,936

 
280,612

Total liabilities and partner's equity
 
$
720,737

 
$
408,740


 
 
For the Years Ending December 31,
(Unaudited)
 
 
2015
 
2014
Revenues
 
$
81,789

 
$
54,906

Operating expenses
 
76,755

 
62,764

Other income (expenses)
 
12,469

 
15,459

Income from Operations
 
$
17,503

 
$
7,601

Less: Net Income attributable to noncontrolling interests
 
(8,901
)
 
(761
)
Net Income attributable to Partner's Capital
 
$
8,602

 
$
6,840


The following section describes the valuation methodologies used by the Company for estimating fair value for financial instruments not recorded at fair value, but fair value is included for disclosure purposes only, as required under disclosure guidance related to the fair value of financial instruments.
Cash and Cash Equivalents — The carrying value of cash, amounts due from banks, federal funds sold and securities purchased under resale agreements approximates fair value.
Escrow Receivable — The escrow receivable due to the Company as of December 31, 2015, which relates to the sale of VantaCore, is anticipated to be released upon satisfaction of certain post-closing obligations and the expiration of certain time periods (50 percent was released 12 months after the October 1, 2014 closing date (i.e. October 1, 2015), and the other 50 percent to be released 18 months after close (i.e. April 1, 2016)). The fair value of the escrow receivable is reflected net of a discount for the potential that the full amount due to the Company would not be realized.
Financing Notes Receivable — The financing notes receivable are valued on a non-recurring basis. The financing notes receivable are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Financing Notes with carrying values that are not expected to be recovered through future cash flows are written-down to their estimated net realizable value.
Long-term Debt — The fair value of the Company’s long-term debt is calculated, for disclosure purposes, by discounting future cash flows by a rate equal to the expected market rate for an equivalent transaction.
Line of Credit — The carrying value of the line of credit approximates the fair value due to its short-term nature.
Carrying and Fair Value Amounts
 
 
 
 
 
 
 
 
 
 
 
 
Level within fair value hierarchy
 
December 31, 2015
 
December 31, 2014
 
 
 
Carrying
Amount
 
Fair Value
 
Carrying
Amount
 
Fair Value
Financial Assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
Level 1
 
$
14,618,740

 
$
14,618,740

 
$
7,578,164

 
$
7,578,164

Escrow receivable
 
Level 2
 
$
1,392,917

 
$
1,392,917

 
$
2,438,500

 
$
2,438,500

Financing notes receivable (Note 6)
 
Level 2
 
$
7,675,626

 
$
7,675,626

 
$
20,687,962

 
$
20,687,962

Hedged Derivative Asset (Note 17)
 
Level 2
 
$
98,259

 
$
98,259

 
$
351,807

 
$
351,807

Financial Liabilities:
 
 
 
 
 
 
 
 
Long-term debt
 
Level 2
 
$
217,375,153

 
$
193,573,834

 
$
67,060,000

 
$
67,060,000

Line of credit
 
Level 2
 
$

 
$

 
$
32,141,277

 
$
32,141,277

Intangibles
INTANGIBLES
INTANGIBLES
The Company recorded an intangible lease asset, related to the PNM Lease Agreement, for the fair value of the amount by which the remaining contractual lease payments exceed market lease rates at the time of acquisition. The intangible lease asset was being amortized on a straight-line basis over the life of the lease term, which expired on April 1, 2015. Annual amortization of the intangible lease asset totaling $73 thousand for the year ended December 31, 2015 and $292 thousand for the years ended December 31, 2014 and December 31, 2013, is reflected in the accompanying Consolidated Statements of Income as a reduction to lease revenue. These same amounts are included in Amortization expense in the accompanying Consolidated Statements of Cash Flows. Refer to Note 4 for further discussion around the PNM Purchase Agreement.
Intangible Lease Asset
 
 
December 31, 2015
 
December 31, 2014
Intangible lease asset
 
$

 
$
1,094,771

Accumulated amortization
 

 
(1,021,784
)
Net intangible lease asset
 
$


$
72,987

Credit Facilities
CREDIT FACILITIES
CREDIT FACILITIES
Credit Facilities of the REIT
On September 26, 2014, the Company entered into a $30 million revolving credit facility (the "Regions Revolver") with certain lenders and Regions Bank, as an agent for such lenders. Then in conjunction with the MoGas Transaction on November 24, 2014, increased the credit facility to $90 million at the REIT level, and $3.0 million at the subsidiary entity level. For the first six months, subsequent to the increase, the facility bore interest on the outstanding balance at a rate of LIBOR plus 3.50 percent. Beginning on May 24, 2015 and through July 7, 2015, the interest rate was determined by a pricing grid where the applicable interest rate was LIBOR plus 2.75 percent to 3.50 percent, depending on the Company's leverage ratio at such time. On June 29, 2015, the Company borrowed against the Regions Revolver in the amount of $42 million in conjunction with the GIGS transaction.
On July 8, 2015, the Company amended and upsized its existing $93 million credit facility with Regions Bank (as lender and administrative agent for the other participating lenders) to provide borrowing commitments of $153 million, consisting of (i) an increase in the Regions Revolver at the CorEnergy parent entity level to $105 million, (ii) a $45 million term loan at the CorEnergy parent entity level (the "Regions Term Loan") and (iii) a $3 million revolving credit facility at the subsidiary entity level (the "MoGas Revolver" as detailed below and, collectively with the upsized Regions Revolver and the Regions Term Loan, the "Regions Credit Facility"). Upon closing the Regions Credit Facility, CorEnergy drew $45 million on the Regions Term Loan to pay off the balance on the Regions Revolver that had been used in funding the GIGS acquisition in June 2015. The Company now has approximately $95.8 million of available borrowing capacity on the Regions Revolver.
The Regions Credit Facility has a maturity date of December 15, 2019 for both the Regions Revolver and the Regions Term Loan. Borrowings under the Regions Credit Facility will generally bear interest on the outstanding principal amount using a LIBOR pricing grid that is expected to equal a LIBOR rate plus an applicable margin of 2.75 percent - 3.75 percent (3.07% percent as of December 31, 2015), based on the Company's senior secured recourse leverage ratio. Total availability is subject to a borrowing base. The Term Note requires quarterly principal payments of $900 thousand which began on September 30, 2015. The Regions Credit Facility contains, among other restrictions, certain financial covenants including the maintenance of certain financial ratios, as well as default and cross-default provisions customary for transactions of this nature (with applicable customary grace periods). Upon the occurrence of an event of default, payment of all amounts outstanding under the Regions Credit Facility shall become immediately due and payable.
The Regions Credit Facility is secured by substantially all of the assets owned by the Company and its subsidiaries other than (i)the assets held by Mowood, LLC, Omega Pipeline Company, Pinedale Corridor, LP and Pinedale, GP Inc. (the "Unrestricted
Subs") and (ii) the equity investments in the Unrestricted Subs.
As of December 31, 2015, and December 31, 2014, approximately $3.3 million and $1.3 million, respectively, in net deferred debt issuance costs related to the Regions Credit Facility are included in the accompanying Consolidated Balance Sheets. For the years ended December 31, 2015 and 2014, $927 thousand and $217 thousand, respectively, of deferred debt cost amortization is included in interest expense within the accompanying Consolidated Statements of Income. As of December 31, 2015, the Company was in compliance with all covenants of the Regions Credit Facility.
On May 8, 2013, the Company entered into a $20 million revolving line of credit with KeyBank. The primary term of the facility was three years with the option for a one-year extension. Outstanding balances under the revolving credit facility (the "KeyBank Revolver") accrued interest at a variable annual rate equal to LIBOR plus 4.0 percent or the Prime Rate plus 2.75 percent. The facility was for the purpose of funding general working capital needs and if necessary, to provide short-term financing for the acquisition of additional real property assets. The amount available to be drawn under this facility was subject to a borrowing base limitation. The agreement was terminated on September 26, 2014.
As of December 31, 2015, and December 31, 2014, approximately $0 in net deferred debt issuance costs, related to the KeyBank Revolver, are included in the accompanying Consolidated Balance Sheets. The deferred costs were initially amortized over the anticipated four-year term of the Key Bank Revolver facility. For the years ended December 31, 2015, December 31, 2014, and December 31, 2013, $0, $47 thousand, and $42 thousand of deferred debt issuance cost amortization, respectively, is included in interest expense within the accompanying Consolidated Statements of Income. Upon termination in 2014, the remaining deferred debt issuance costs totaling approximately $161 thousand were expensed in full.
The annual remaining principal payment requirements as of December 31, 2015 per the contractual maturities of our Regions Credit Facilities are as follows:
Year
Total Payments
2016
$
3,600,000

2017
3,600,000

2018
3,600,000

2019
32,400,000

2020

Thereafter

Total
$
43,200,000


Pinedale Facility
On December 20, 2012, Pinedale LP closed on a $70 million secured term credit facility with KeyBank serving as a lender and as administrative agent on behalf of other lenders participating in the credit facility. Outstanding balances under the original KeyBank Term Facility generally accrued interest at a variable annual rate equal to LIBOR plus 3.25 percent. The credit facility remained in effect up until December 31, 2015, with an option to extend through December 31, 2016. The Company elected not to extend the KeyBank Term Facility through December 31, 2016. The Company did however extend the facility through March 30, 2016 and made an additional principal payment of $1.0 million on December 31, 2015. During the extension period, borrowings under this credit facility will bear interest on the outstanding principal amount at LIBOR plus 4.25 percent. The credit facility is secured by the Pinedale LGS asset. Under the original agreement Pinedale LP was obligated to pay all accrued interest monthly and was further obligated to make monthly principal payments, which began on March 7, 2014, in the amount of $294 thousand or 0.42 percent of the principal balance as of March 1, 2014. Going forward, Pinedale LP is required to make principal payments according to the extension agreement. The entire remaining principal is due on March 30, 2016.
The registrant has provided to KeyBank a guarantee against certain inappropriate conduct by or on behalf of Pinedale LP or us. The credit agreement contains, among other restrictions, specific financial covenants including the maintenance of certain financial coverage ratios and a minimum net worth requirement. The Company is required to maintain a restricted collateral account into which Ultra Wyoming makes all lease payments under the Pinedale Lease Agreement. Payments of principal and interest pursuant to the credit facility are drawn by KeyBank directly from the restricted collateral account prior to transferring the remaining cash to the Pinedale LP operating account. The balance in the restricted collateral account at December 31, 2015 was $0.
Pinedale LP's credit facility with KeyBank limits distributions by Pinedale LP to the Company. Distributions by Pinedale LP to the Company are permitted to the extent required for the Company to maintain its REIT qualification, so long as Pinedale LP's obligations to KeyBank have not been accelerated following an Event of Default (as defined in the credit facility). The KeyBank Term Facility also requires that Pinedale LP maintain minimum net worth levels and certain leverage ratios, which along with other provisions of the credit facility limit cash dividends and loans to the Company. At December 31, 2015, the net assets of Pinedale LP were $137.6 million. As of December 31, 2015, Pinedale LP was in compliance with all of the financial covenants of the secured term credit facility.
As of December 31, 2015 and 2014, approximately $156 thousand and $501 thousand, respectively, in net deferred debt issuance costs related to the KeyBank Term Facility are included in the accompanying Consolidated Balance Sheets. The deferred costs will be amortized over the remaining term of the KeyBank Term Facility extension. For the years ended December 31, 2015, 2014, and 2013, $500 thousand, $517 thousand, and $515 thousand of deferred debt cost amortization is included in interest expense within the accompanying Consolidated Statements of Income.
The Company has executed interest rate swap derivatives to add stability to our interest expense and to manage our exposure to interest rate movements on our LIBOR based borrowings. Interest rate swaps involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. See Note 17 for further information regarding interest rate swap derivatives.
The annual remaining principal payment requirements as of December 31, 2015 per the contractual maturities of our Pinedale Credit Facilities are as follows:
Year
Total Payments
2016
$
62,532,000

2017

2018

2019

2020

Thereafter

Total
$
62,532,000


MoGas Revolver
In conjunction with the MoGas Transaction, MoGas and UPS, as co-borrowers, entered into a revolving credit agreement dated November 24, 2014 (the “MoGas Revolver”), with certain lenders, including Regions Bank as agent for such lenders. Pursuant to the MoGas Revolver, the co-borrowers may borrow, prepay and re-borrow loans up to $3.0 million outstanding at any time. The MoGas Revolver is secured by the assets held at MoGas and has a maturity date of November 24, 2018. Interest accrues under the MoGas Revolver at the same rate and pursuant to the same terms as it accrues under the Regions Revolver. As of December 31, 2015, there were no outstanding borrowings against the MoGas Revolver. As of December 31, 2015, the co-borrowers are in compliance of all covenants of the MoGas Revolver.
Mowood/Omega Credit Facility
On October 15, 2013, Mowood and Omega entered into a Revolving Note Payable Agreement (“2013 Note Payable Agreement”), replacing a prior $1.3 million secured Note Payable Agreement (as amended), under which interest accrued and was payable monthly at LIBOR plus 4 percent and which expired on October 29, 2013. The 2013 Note Payable Agreement had a maximum borrowing base of $1.5 million. Borrowings on the 2013 Note Payable Agreement are secured by Mowood’s and Omega's assets. Interest accrued at the Prime Lending Rate as published in the Wall Street Journal, plus 0.5 percent, and was payable monthly, and in full, with accrued interest, on the termination date of October 15, 2014.
On October 15, 2014, Mowood and Omega renewed the 2013 Note Payable Agreement by entering into a Revolving Note Payable Agreement ("2014 Note Payable Agreement"), extending the maturity date to January 31, 2015. Then on January 30, 2015, Mowood and Omega modified the 2014 Note Payable Agreement to extend the maturity date to July 31, 2015. On July 31, 2015, the 2014 Note Payable Agreement was allowed to expire and a new $1.5 million revolving line of credit ("Mowood/Omega Revolver") was established with Regions Bank. The new Mowood/Omega Revolver will be used for working capital and general business purposes, is guaranteed and secured by the assets of Mowood and has a maturity of July 31, 2016. Interest accrues at LIBOR plus 4 percent and is payable monthly in arrears with no unused fee. There was no outstanding balance at December 31, 2015.
Convertible Debt (Notes)
CONVERTIBLE DEBT
CONVERTIBLE DEBT
On June 29, 2015, the Company completed a public offering of $115 million aggregate principal amount of 7.00% Convertible Senior Notes Due 2020 (the "Convertible Notes"). The Convertible Notes mature on June 15, 2020 and bear interest at a rate of 7.0 percent per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2015. For the year ended December 31, 2015, there is $4.1 million of interest expense resulting from the Convertible Notes. The Convertible Notes were issued with an underwriters discount of $3.7 million which will be amortized over the life of the Notes. The amount of amortization included in interest expense for the year ended December 31, 2015 is $381 thousand.
As of December 31, 2015 and 2014, approximately $219 thousand and $0, respectively, in net deferred debt issuance costs related to the Convertible Notes are included in the accompanying Consolidated Balance Sheets. For the year ended December 31, 2015 there is $22 thousand of deferred debt cost amortization included in interest expense within the accompanying Consolidated Statements of Income. Including the impact of the convertible debt discount and related deferred debt issuance costs, the effective interest rate on the Convertible Notes is approximately 7.7 percent.
The Company may not redeem the Convertible Notes prior to the maturity date. Holders may convert their Convertible Notes into shares of the Company’s common stock at their option until the close of business on the second scheduled trading day immediately preceding the maturity date. The initial conversion rate for the Convertible Notes will be 30.3030 shares of Common Stock per $1,000 principal amount of the Convertible Notes, equivalent to an initial conversion price of $33.0 per share of Common Stock. Such conversion rate will be subject to adjustment in certain events as specified in the Indenture.
The Convertible Notes may not be redeemed prior to the maturity date; however, upon the occurrence of a fundamental change (as defined in the Indenture), holders may require the Company to repurchase all or a portion of the Convertible Notes for cash at a price equal to 100 percent of the principal amount of the Convertible Notes to be purchased plus any accrued and unpaid interest, if any, to, but excluding, the applicable fundamental change repurchase date as prescribed in the Indenture. In addition, in certain circumstances the Company will increase the conversion rate for a holder that converts the Convertible Notes in connection with any of a specified set of corporate events, each of which is deemed to constitute a make whole adjustment event pursuant to the terms of the Indenture.
The Convertible Notes rank equal in right of payment to any other current and future unsecured obligations of the Company and senior in right of payment to any other current and future indebtedness of the Company that is contractually subordinated to the Convertible Notes. The Convertible Notes are structurally subordinated to all liabilities (including trade payables) of the Company’s subsidiaries. The Convertible Notes are effectively junior to all of the Company’s existing or future secured debt, to the extent of the value of the collateral securing such debt.
Asset Retirement Obligation (Notes)
Asset Retirement Obligation
ASSET RETIREMENT OBLIGATION
A component of the consideration exchanged to purchase the GIGS assets from Energy XXI USA, Inc. in June 2015, was the assumption of the seller’s asset retirement obligation associated with such assets. The ARO represents the estimated costs of decommissioning the GIGS pipelines and onshore oil receiving and separation facilities in Grand Isle, Louisiana at retirement. In accordance with ASC 410-20, Asset Retirement Obligations, we recognized an ARO at an agreed-upon fair value on the date of acquisition of $12.5 million. A corresponding asset retirement cost was capitalized as part of the carrying amount of the related long-lived assets and will be depreciated over the assets’ remaining useful lives.
The liability was initially measured using the amount agreed upon between the parties in an arm's length transaction, which under ASC 410-20, represents fair value. During negotiations with EXXI and to arrive at an agreed-upon amount, we commissioned an independent third-party study whereby the cost of decommissioning GIGS' offshore pipelines were estimated as though they were decommissioned in place for Federal Waters and as though they were removed in State Waters. In accordance with State and Federal requirements, the pipelines are pigged, flushed with ends cut, plugged and buried. Onshore estimates include complete removal of the facility. The piping and tanks are cleaned of hydrocarbons. All surface piping, tanks, equipment, concrete and gravel are dismantled and removed to three feet below the ground surface. Concrete and gravel are removed and the site is graded to a smooth contour. The liability will be adjusted annually for ARO accretion expense and periodically for changes in the amount or timing of the estimated future cash flows. Future expected cash flows will be based on subjective estimates and assumptions, which inherently include significant uncertainties which are beyond our control. These assumptions represent Level 3 inputs, as further discussed in Note 2.
In periods subsequent to the initial measurement of an ARO, we recognize period-to-period changes in the liability resulting from either (a) the passage of time or (b) revisions to either the timing or the amount of the original estimate of undiscounted cash flows. Consequently, the ARO has been accreted for the passage of time. For the years ended December 31, 2015, 2014 and 2013, $339 thousand, $0 and $0 of accretion expense was recorded, respectively.
Our tenant, EXXI Tenant, has an ARO related to the platform which is currently attached to the GIGS pipelines. If in the future, EXXI is unable to fulfill their obligation, we may be required to assume the liability for the related asset removal costs.
The following table is a reconciliation of the asset retirement obligation as of December 31, 2015:
Asset Retirement Obligation
 
For the Years Ended
 
 
December 31, 2015
 
December 31, 2014
 
December 31, 2013
Beginning asset retirement obligation
 
$

 
$

 
$

Liabilities assumed
 
12,500,000

 

 

Expenditures
 

 

 

ARO accretion expense
 
339,042

 

 

Ending asset retirement obligation
 
$
12,839,042

 
$

 
$

Interest Rate Hedge Swaps
INTEREST RATE HEDGE SWAPS
INTEREST RATE HEDGE SWAPS
Derivative Financial Instruments
Currently, the Company uses interest rate swaps to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including forward interest rate curves. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate forward curves.
To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. In conjunction with the FASB's fair value measurement guidance in ASC 820, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of December 31, 2015, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.
The table below presents the Company's hedged derivative asset measured at fair value on a recurring basis as well as their classification on the Consolidated Balance Sheets as of December 31, 2015, and December 31, 2014, aggregated by the level in the fair value hierarchy within which those measurements fall. Hedges that are valued as receivable by the Company are considered Asset Derivatives and those that are valued as payable by the Company are considered Liability Derivatives.
 
 
Balance Sheet
Classification
 
Fair Value Hierarchy
Balance Sheet Line Item
 
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
December 31, 2015
Hedged derivative liability
 
Liability
 
$

 
$
98,259

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
Hedged derivative receivable
 
Asset
 
$

 
$
351,807

 
$

Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.)
Level 3 - significant unobservable inputs (including the Company's own assumptions in determining the fair value of investments)

Risk Management Objective of Using Derivatives
The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company's known or expected cash payments principally related to the Company's borrowings.
Cash Flow Hedges of Interest Rate Risk
The Company's objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an upfront premium.
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated Other Comprehensive Income (“AOCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Company elected to designate its interest rate swaps as cash flow hedges in April 2013 and such derivatives are being used to hedge the variable cash flows associated with existing variable-rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. For the years ended December 31, 2015, and December 31, 2014, there was a loss due to ineffectiveness of approximately $1 thousand recorded in earnings. For the year ended December 31, 2013, there was a gain due to ineffectiveness of approximately $6 thousand recorded in earnings.
Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company's variable-rate debt. Over the next 12 months, the Company estimates that an additional $22 thousand will be reclassified as an increase to interest expense.
As of December 31, 2015, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
Outstanding Derivatives Designated as Cash Flow Hedges of Interest Rate Risk
Interest Rate Derivative
 
Number of Instruments
 
Notional Amount Outstanding
 
 
 
 
 
Floating Rate Received
 
Fixed Rate Paid
 
 
 
Effective Date
 
Termination Date
 
 
Interest Rate Swap
 
2
 
$52,500,000
 
February 5, 2013
 
December 5, 2017
 
1-month US Dollar LIBOR
 
0.865%

Non-Designated Hedges
Derivatives not designated as hedges are not speculative and are used to manage the Company's exposure to interest rate movements and other identified risks. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings and were equal to net losses of approximately $0, $0 and $75 thousand for the years ended December 31, 2015, December 31, 2014, and December 31, 2013, respectively.
Tabular Disclosure of the Effect of Derivative Instruments on the Income Statement
The tables below present the effect of the Company's derivative financial instruments on the Income Statement for the years ended December 31, 2015, December 31, 2014 and December 31, 2013.
 
 
For the Years Ended December 31,
Derivatives in Cash Flow Hedging Relationship
 
2015
 
2014
 
2013
Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion)
 
$
(611,879
)
 
$
(705,826
)
 
$
741,344

Amount of Gain (Loss) Reclassified from AOCI on Derivatives (Effective Portion) Recognized in Net Income1
 
(287,999
)
 
(305,945
)
 
(217,821
)
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion, Amounts Excluded from Effectiveness Testing)1
 
(1,284
)
 
(897
)
 
5,969

 
 
 
 
 
 
 
Derivatives Not Designated as Hedging Instruments
 
 
 
 
 
 
Amount of Gain (Loss) Recognized in Income on Derivative2
 
$

 
$

 
$
(75,200
)
 
 
 
 
 
 
 
(1) Included in "Interest Expense" on the face of the Consolidated Statements of Income and Comprehensive Income.
(2) The gain or (loss) recognized in income on derivatives includes changes in fair value of the derivatives as well as the periodic cash settlements and interest accruals for derivatives not designated as hedging instruments.

Tabular Disclosure of Offsetting Derivatives
The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company's derivatives as of December 31, 2015, and December 31, 2014. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Balance Sheets. There were no offsetting derivative liabilities as of December 31, 2015, and December 31, 2014.
Offsetting Derivatives
 
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Balance Sheets
 
Net Amounts of Assets presented in the Balance Sheets
 
Gross Amounts Not
Offset in the Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Instruments
 
Cash Collateral Received
 
Net Amount
Offsetting Derivative Assets as of December 31, 2015
 
$
98,259

 
$

 
$
98,259

 
$

 
$

 
$
98,259

 
 
 
 
 
 
 
 
 
 
 
 
 
Offsetting Derivative Assets as of December 31, 2014
 
$
351,807

 
$

 
$
351,807

 
$

 
$

 
$
351,807


Credit-Risk Related Contingent Features
The Company has agreements with some of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.
As of December 31, 2015, the Company did not have any derivatives that were in a net liability position. Therefore, the credit risk-related contingent features discussed above would not apply as of December 31, 2015.
Stockholder's Equity
STOCKHOLDER'S EQUITY
STOCKHOLDER'S EQUITY
REDEEMABLE PREFERRED STOCK
The Company's authorized preferred stock consists of 10 million shares having a par value of $0.001 per share. On January 27, 2015, the Company sold, in an underwritten public offering, 2,250,000 depositary shares, each representing 1/100th of a share of 7.375% Series A Cumulative Redeemable Preferred Stock ("Series A Preferred"). Pursuant to this offering, the Company issued 22,500 whole shares of Series A Preferred and received net cash proceeds of approximately $54.2 million. The depositary shares pay an annual dividend of $1.84375 per share, equivalent to 7.375 percent of the $25.00 liquidation preference. The depositary shares may be redeemed on or after January 27, 2020, at the Company’s option, in whole or in part, at the $25.00 liquidation preference plus all accrued and unpaid dividends to, but not including, the date of redemption. The depositary shares have no stated maturity, are not subject to any sinking fund or mandatory redemption and are not convertible into any other securities of the Company except in connection with certain changes of control. Holders of the depositary shares generally have no voting rights, except for limited voting rights if the Company fails to pay dividends for six or more quarters (whether or not consecutive) and in certain other circumstances. The depositary shares representing the Series A Preferred trade on the NYSE under the ticker “CORRPrA." The aggregate par value of the preferred shares at December 31, 2015, is $23. See Note 22, Subsequent Events, for further information regarding the declaration of a dividend on the 7.375% Series A Cumulative Redeemable Preferred Stock.
COMMON STOCK
As of December 31, 2015, the Company had 11,939,697 of common shares issued and outstanding. Effective December 1, 2015, the Company completed a one-for-five reverse common stock split. As a result, every five issued and outstanding shares of common stock of the Company converted into one share of common stock. The par value of each share of common stock and the number of authorized shares remained unchanged. On December 31, 2015, the Company's board of director's authorized a share repurchase program for the Company to buy up to $10.0 million of its common stock. The Company plans to repurchase shares from time to time through open market transactions, including through block purchases, in privately negotiated transactions or otherwise. The timing, manner, price and amount of any repurchases are to be determined by senior management, depending on market prices and other conditions. We are not obligated to repurchase any shares of stock under the program and may terminate the program at any time. See Note 22, Subsequent Events, for further information regarding the declaration of a dividend on the common stock.
SHELF REGISTRATION
On January 23, 2015, we had a shelf registration statement declared effective by the SEC, pursuant to which we may publicly offer additional securities consisting of senior and/or subordinated debt securities, shares of preferred stock (or depositary shares representing fractional interests therein), shares of common stock, warrants or rights to purchase any of the foregoing securities, and units consisting of two or more of these classes or series of securities, with an aggregate offering price of up to $300.0 million. The following summarizes transactions that have occurred through December 31, 2015, under the January 23, 2015, shelf:
DRIP Shares - As of December 31, 2015, we have issued 28,510 shares of common stock under the Company’s dividend reinvestment plan that reduced availability by approximately $818 thousand.
June 2015 - In connection with the purchase of the GIGS we completed a follow-on offering of 2,587,500 shares of common stock that reduced availability by $77.6 million.
June 2015 - In connection with the purchase of the GIGS we issued convertible senior notes that reduced availability by $115.0 million. See Note 15, Convertible Debt, for additional information.
As of December 31, 2015, the remaining availability under our January 2015 shelf registration statement was approximately $106.6 million of maximum aggregate offering price of securities. See Note 22, Subsequent Events, for further information regarding the $600 million shelf registration statement that was declared effective by the SEC on February 18, 2016.
Warrants
WARRANTS
WARRANTS
The Company issued 945,594 warrants (representing the right to purchase one share of the Company’s common stock for $11.41 per common share on a pre-Reverse Stock Split basis) on February 7, 2007, all of which expired unexercised on February 6, 2014, and are no longer outstanding as of December 31, 2015.
Earnings Per Share
EARNINGS PER SHARE
EARNINGS PER SHARE
Basic earnings per share data is computed based on the weighted average number of shares of common stock outstanding during the periods. Diluted EPS data is computed based on the weighted average number of shares of common stock outstanding, including all potentially issuable shares of common stock. Diluted EPS for the year ended December 31, 2015 excludes the impact to income and the number of shares outstanding from the conversion of the 7.00% Convertible Senior Notes, because to do so would be antidilutive.
Earnings Per Share
 
 
 
 
 
 
For the Years Ended December 31,
 
2015
 
2014
 
2013
Net income attributable to CorEnergy stockholders
$
12,319,911

 
$
7,013,856

 
$
4,502,339

Less: preferred dividend requirements
3,848,828

 

 

Net income attributable to common stockholders
$
8,471,083

 
$
7,013,856

 
$
4,502,339

Weighted average shares - basic
10,685,892

 
6,605,715

 
4,829,879

Basic earnings per share
$
0.79

 
$
1.06

 
$
0.93

 
 
 
 
 
 
Net income attributable to common stockholders (from above)
$
8,471,083

 
$
7,013,856

 
$
4,502,339

Add: After tax effect of convertible interest

 

 

Income attributable for dilutive securities
$
8,471,083

 
$
7,013,856

 
$
4,502,339

Weighted average shares - diluted
10,685,892

 
6,605,715

 
4,829,879

Diluted earnings per share
$
0.79

 
$
1.06

 
$
0.93

QUARTERLY FINANCIAL DATA (Unaudited) QUARTERLY FINANCIAL DATA (Unaudited)
QUARTERLY FINANCIAL DATA (Unaudited)
QUARTERLY FINANCIAL DATA (Unaudited)
 
 
For the Fiscal 2015 Quarters Ended
 
 
March 31
 
June 30
 
September 30
 
December 31
Revenue
 
 
 
 
 
 
 
 
Lease revenue
 
$
7,336,101

 
$
6,799,879

 
$
16,966,056

 
$
16,984,036

Sales revenue
 
2,341,655

 
1,665,908

 
1,434,694

 
1,717,787

Financing revenue
 
660,392

 
668,904

 
182,604

 
185,650

Transportation revenue
 
3,649,735

 
3,546,979

 
3,557,096

 
3,591,459

Total Revenue
 
13,987,883

 
12,681,670

 
22,140,450

 
22,478,932

Expenses
 
 
 
 
 
 
 
 
Cost of sales (excluding depreciation expense)
 
1,248,330

 
569,958

 
382,851

 
618,073

Depreciation, amortization and ARO accretion expense
 
4,048,832

 
3,495,986

 
5,836,665

 
5,385,068

Provision for loan losses
 

 

 
7,951,137

 
5,833,000

Transportation, maintenance and general and administrative
 
991,608

 
1,076,352

 
856,050

 
935,775

Operating expenses
 
206,360

 
195,673

 
264,812

 
83,095

General and administrative
 
2,568,519

 
1,905,329

 
2,837,762

 
2,434,094

Total Expenses
 
9,063,649

 
7,243,298

 
18,129,277

 
15,289,105

Income (Loss) from Operations, before income taxes
 
$
4,924,234

 
$
5,438,372

 
$
4,011,173

 
$
7,189,827

Other Income (Expense)
 
 
 
 
 
 
 
 
Net distributions and dividend income
 
$
590,408

 
$
193,410

 
$
241,563

 
$
245,374

Net realized and unrealized gain (loss) on other equity securities
 
449,798

 
43,385

 
(1,408,751
)
 
(148,045
)
Interest expense
 
(1,147,272
)
 
(1,126,888
)
 
(3,854,913
)
 
(3,652,111
)
Total Other Income (Expense)
 
(107,066
)
 
(890,093
)
 
(5,022,101
)
 
(3,554,782
)
Income (Loss) before income taxes
 
4,817,168

 
4,548,279

 
(1,010,928
)
 
3,635,045

Taxes
 
 
 
 
 
 
 
 
Current tax expense
 
435,756

 
104,479

 
105,020

 
276,755

Deferred tax expense (benefit)
 
(115,391
)
 
(153,342
)
 
(1,953,973
)
 
(646,857
)
Income tax expense (benefit), net
 
320,365

 
(48,863
)
 
(1,848,953
)
 
(370,102
)
Net Income
 
4,496,803

 
4,597,142

 
838,025

 
4,005,147

Less: Net Income attributable to non-controlling interest
 
410,175

 
412,004

 
410,806

 
384,221

Net Income attributable to CorEnergy Stockholders
 
$
4,086,628

 
$
4,185,138

 
$
427,219

 
$
3,620,926

Preferred dividend requirements
 
737,500

 
1,037,109

 
1,037,109

 
1,037,110

Net Income (Loss) attributable to Common Stockholders
 
$
3,349,128

 
$
3,148,029

 
$
(609,890
)
 
$
2,583,816

 
 
 
 
 
 
 
 
 
Net Income
 
$
4,496,803

 
$
4,597,142

 
$
838,025

 
$
4,005,147

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
Changes in fair value of qualifying hedges attributable to CorEnergy stockholders
 
(276,107
)
 
18,202

 
(223,176
)
 
218,576

Changes in fair value of qualifying hedges attributable to non-controlling interest
 
(64,555
)
 
4,256

 
(52,180
)
 
51,104

Net Change in Other Comprehensive Income (Loss)
 
$
(340,662
)
 
$
22,458

 
$
(275,356
)
 
$
269,680

Total Comprehensive Income
 
4,156,141

 
4,619,600

 
562,669

 
4,274,827

Less: Comprehensive income attributable to non-controlling interest
 
345,620

 
416,260

 
358,626

 
435,325

Comprehensive Income attributable to CorEnergy Stockholders
 
$
3,810,521

 
$
4,203,340

 
$
204,043

 
$
3,839,502

Earnings (Loss) Per Common Share:
 
 
 
 
 
 
 
 
Basic
 
$
0.36

 
$
0.33

 
$
(0.05
)
 
$
0.22

Diluted
 
$
0.36

 
$
0.33

 
$
(0.05
)
 
$
0.22


 
 
For the Fiscal 2014 Quarters Ended
 
 
March 31
 
June 30
 
September 30
 
December 31
Revenue
 
 
 
 
 
 
 
 
Lease revenue
 
$
6,762,408

 
$
7,065,677

 
$
7,191,187

 
$
7,204,493

Sales revenue
 
3,259,530

 
1,813,607

 
1,741,209

 
2,894,556

Financing revenue
 
25,619

 
139,728

 
413,482

 
498,984

Transportation revenue
 

 

 

 
1,298,093

Total Revenue
 
10,047,557

 
9,019,012

 
9,345,878

 
11,896,126

Expenses
 
 
 
 
 
 
 
 
Cost of sales (excluding depreciation expense)
 
2,707,358

 
1,384,998

 
1,284,711

 
1,914,901

Depreciation, amortization and ARO accretion expense
 
3,146,978

 
3,220,253

 
3,252,604

 
3,575,420

Provision for loan losses
 

 

 

 

Transportation, maintenance and general and administrative
 

 

 

 
458,872

Operating expenses
 
222,741

 
213,533

 
210,009

 
194,627

General and administrative
 
1,432,955

 
1,334,960

 
1,841,493

 
3,263,345

Total Expenses
 
7,510,032

 
6,153,744

 
6,588,817

 
9,407,165

Operating Income
 
$
2,537,525

 
$
2,865,268

 
$
2,757,061

 
$
2,488,961

Other Income (Expense)
 
 
 
 
 
 
 
 
Net distributions and dividend income
 
$
5,056

 
$
5,988

 
$
1,688,830

 
$
136,909

Net realized and unrealized gain (loss) on other equity securities
 
1,294,182

 
2,084,026

 
(865,470
)
 
(2,978,764
)
Interest expense
 
(826,976
)
 
(819,360
)
 
(977,635
)
 
(1,051,151
)
Total Other Income (Expense)
 
472,262

 
1,270,654

 
(154,275
)
 
(3,893,006
)
Income (Loss) before income taxes
 
3,009,787

 
4,135,922

 
2,602,786

 
(1,404,045
)
Taxes
 
 
 
 
 
 
 
 
Current tax expense
 
854,075

 

 
486,054

 
2,503,808

Deferred tax expense (benefit)
 
(340,562
)
 
742,879

 
(161,171
)
 
(4,310,646
)
Income tax expense (benefit), net
 
513,513

 
742,879

 
324,883

 
(1,806,838
)
Net Income
 
2,496,274

 
3,393,043

 
2,277,903

 
402,793

Less: Net Income attributable to non-controlling interest
 
391,114

 
387,135

 
389,485

 
388,423

Net Income attributable to CorEnergy Stockholders
 
$
2,105,160

 
$
3,005,908

 
$
1,888,418

 
$
14,370

Preferred dividend requirements
 

 

 

 

Net Income (Loss) attributable to Common Stockholders
 
$
2,105,160

 
$
3,005,908

 
$
1,888,418

 
$
14,370

 
 
 
 
 
 
 
 
 
Net Income
 
$
2,496,274

 
$
3,393,043

 
$
2,277,903

 
$
402,793

Other comprehensive income (loss):
 


 


 


 


Changes in fair value of qualifying hedges attributable to CorEnergy stockholders
 
(70,620
)
 
(270,838
)
 
214,602

 
(197,245
)
Changes in fair value of qualifying hedges attributable to non-controlling interest
 
(16,511
)
 
(63,324
)
 
50,175

 
(46,120
)
Net Change in Other Comprehensive Income (Loss)
 
$
(87,131
)
 
$
(334,162
)
 
$
264,777

 
$
(243,365
)
Total Comprehensive Income
 
2,409,143

 
3,058,881

 
2,542,680

 
159,428

Less: Comprehensive income attributable to non-controlling interest
 
374,603

 
323,811

 
439,660

 
342,303

Comprehensive Income attributable to CorEnergy Stockholders
 
$
2,034,540

 
$
2,735,070

 
$
2,103,020

 
$
(182,875
)
Earnings (Loss) Per Common Share:
 


 


 


 


Basic
 
$
0.35

 
$
0.48

 
$
0.30

 
$
0.00

Diluted
 
$
0.35

 
$
0.48

 
$
0.30

 
$
0.00

Subsequent Events
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
The Company performed an evaluation of subsequent events through the date of the issuance of these financial statements and determined that no additional items require recognition or disclosure, except for the following:
Common Stock Dividend Declaration
On January 26, 2016, our Board of Directors declared the 2015 fourth quarter dividend of $0.750 per share for CorEnergy common stock. The dividend was paid on February 29, 2016, to shareholders of record on February 12, 2016.
Preferred Stock Dividend Declaration
On January 26, 2016, our Board of Directors also declared a cash dividend of $0.4609375 per depositary share for the Company’s 7.375% Series A Cumulative Redeemable Preferred Stock for the quarter ending December 31, 2015. The preferred stock dividend was paid on February 29, 2016 to shareholders of record on February 12, 2016.
Shelf Registration Statement
On February 18, 2016 we had a new shelf registration statement, with an aggregate offering price of up to $600 million, declared effective by the SEC, pursuant to which we may publicly offer additional securities consisting of (i) common stock, (ii) preferred stock, (iii) fractional interests in shares of our preferred stock represented by depositary shares, (iv) senior and/or subordinated debt securities, (v) subscription rights to purchase shares of our common stock, preferred stock (or depositary shares representing a fractional interest therein) and/or debt securities, (vi) warrants representing rights to purchase shares of our common stock, preferred stock (or depositary shares representing a fractional interest therein) and/or debt securities, or (vii) units consisting of a combination of any of the foregoing. We refer to the foregoing collectively as our securities. We may offer our securities in one or more offerings and in one or more classes or series, separately or together.
Omega Department of Defense contract
On January 28, 2016, Omega was awarded a new 10 year contract with the Department of Defense, to provide natural gas and gas distribution assets to Fort Leonard Wood through Omega’s approximately 70 mile (unaudited) pipeline distribution system on the military base.
Black Bison Foreclosure
Effective February 29, 2016, the Company foreclosed on 100 percent of the equity of BB Intermediate, the holding company of Black Bison Water Services, LLC, the borrower of the Black Bison financing notes receivable.
Pinedale Facility
CorEnergy has obtained a Consent from its lenders under the Regions Credit Facility, which will permit the Company to utilize the revolving credit facility to refinance the Pinedale LP secured term credit facility. CorEnergy, along with Prudential, expect to refinance their pro rata shares of the Pinedale LP secured term credit facility prior to March 30, 2016.
SWD Enterprises Covenant Breach
Due to reduced drilling activity in SWD Enterprises' area of operations, they have breached certain covenants. The Company is in discussions with SWD Enterprises related to resolution of the breach.
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CorEnergy Infrastructure Trust, Inc.
CONDENSED BALANCE SHEETS
 
December 31, 2015
 
December 31, 2014
Assets
 
 
 
 
Leased property, net of accumulated depreciation of $559,078 and $374,699
 
$
4,234,578

 
$
4,418,957

Leased property held for sale, net of accumulated depreciation of $0 and $5,878,933
 

 
8,247,916

Investments
 
458,088,998

 
219,883,494

Cash and cash equivalents
 
10,089,436

 
3,599,935

Due from subsidiary
 
8,317,719

 
12,236,050

Note receivable from subsidiary
 
92,730,000

 
95,300,000

Intangible lease asset, net of accumulated amortization of $0 and $1,021,784
 

 
72,987

Deferred debt issuance costs, net of accumulated amortization of $674,658 and $69,772
 
2,450,323

 
1,645,887

Deferred lease costs, net of accumulated amortization of $16,123 and $10,808
 
63,653

 
68,968

Income tax receivable
 
4,394

 
319,122

Prepaid expenses and other assets
 
116,475

 
147,114

Total Assets
 
$
576,095,576

 
$
345,940,430

Liabilities and Equity
 
 
 
 
Current Maturities of Long-Term Debt
 
3,600,000

 

Accounts payable and other accrued liabilities
 
1,300,792

 
1,339,739

Management fees payable
 
1,763,747

 
1,164,399

Due to affiliate
 
153,640

 
274,715

Line of credit
 

 
32,000,000

Unearned revenue
 

 
711,230

Long-Term Debt
 
151,243,153

 
 
Total Liabilities
 
$
158,061,332

 
$
35,490,083

Equity
 

 
 
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 and 0 issued and outstanding as of December 31, 2015, and December 31, 2014
 
$
56,250,000

 
$

Capital stock, non-convertible, $0.001 par value; 11,939,697 and 9,321,010 shares issued and outstanding at December 31, 2015, and December 31, 2014 (100,000,000 shares authorized)
 
11,940

 
46,605

Additional paid-in capital
 
361,581,507

 
309,950,440

Accumulated retained earnings
 

 

Accumulated other comprehensive income
 
190,797

 
453,302

Total Equity
 
418,034,244

 
310,450,347

Total Liabilities and Equity
 
$
576,095,576

 
$
345,940,430

See accompanying Schedule I Notes to Condensed Financial Statements.

SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - CorEnergy Infrastructure Trust, Inc. - Continued
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 
For the Years Ended December 31,
 
 
2015
 
2014
 
2013
Revenue
 
 
 
 
 
 
Lease revenue
 
$
638,243

 
$
2,552,976

 
$
2,552,976

Earnings (loss) from subsidiary
 
10,894,003

 
6,730,060

 
5,720,413

Total Revenue
 
11,532,246

 
9,283,036

 
8,273,389

Expenses
 
 
 
 
 
 
Depreciation expense
 
754,050

 
2,463,062

 
2,463,052

Amortization expense
 
5,316

 
5,318

 
5,320

General and administrative
 
1,426,598

 
1,061,421

 
1,509,297

Total Expenses
 
2,185,964

 
3,529,801

 
3,977,669

Operating Income (Loss)
 
$
9,346,282

 
$
5,753,235

 
$
4,295,720

Other Income (Expense)
 
 
 
 
 
 
Net distributions and dividend income
 
$
13,542

 
$
13,117

 
$
6,681

Net realized and unrealized gain (loss) on trading securities
 

 

 

Net realized and unrealized gain (loss) on other equity securities
 

 

 

Interest on loans to subsidiaries
 
9,294,537

 
1,100,349

 
752,305

Interest income (expense)
 
(6,334,450
)
 
147,155

 
(49,214
)
Total Other Income (Expense)
 
2,973,629

 
1,260,621

 
709,772

Income (Loss) before income taxes
 
12,319,911

 
7,013,856

 
5,005,492

Taxes
 
 
 
 
 
 
Current tax expense (benefit)
 

 

 
(540,111
)
Deferred tax expense (benefit)
 

 

 
1,043,264

Income tax expense (benefit), net
 

 

 
503,153

Net Income (Loss)
 
12,319,911

 
7,013,856

 
4,502,339

 
 
 
 
 
 
 
Other comprehensive income:
 
 
 
 
 
 
Changes in fair value of qualifying hedges
 
(262,505
)
 
(324,101
)
 
777,403

Total Comprehensive Income
 
$
12,057,406

 
$
6,689,755

 
$
5,279,742

See accompanying Schedule I Notes to Condensed Financial Statements.


SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - CorEnergy Infrastructure Trust, Inc. - Continued
CONDENSED STATEMENTS OF CASH FLOW
 
For the Years Ended December 31,
 
 
2015
 
2014
 
2013
Net cash provided by (used in) operating activities
 
$
18,060,382

 
$
(2,047,777
)
 
$
(8,040,654
)
Investing Activities
 
 
 
 
 
 
Proceeds from sale of leased property held for sale
 
7,678,246

 

 

Issuance of note to subsidiary
 

 
(90,000,000
)
 

Principal payments received from notes to subsidiaries
 
2,570,000

 

 

Investment in consolidated subsidiaries
 
(261,597,946
)
 
(96,570,263
)
 
(1,651,956
)
Cash distributions from consolidated subsidiaries
 
23,392,442

 
18,559,328

 
19,337,911

Net cash provided by (used in) investing activities
 
$
(227,957,258
)
 
$
(168,010,935
)
 
$
17,685,955

Financing Activities
 
 
 
 
 
 
Debt financing costs
 
(1,439,929
)
 
(1,600,908
)
 
(30,002
)
Net offering proceeds on Series A preferred stock
 
54,210,476

 

 

Net offering proceeds on common stock
 
73,184,679

 
141,797,913

 
(523,094
)
Net offering proceeds on convertible debt
 
111,262,500

 

 

Dividends paid on Series A preferred stock
 
(3,503,125
)
 

 

Dividends paid on common stock
 
(28,528,224
)
 
(15,187,976
)
 
(8,946,941
)
Advances on revolving line of credit
 
42,000,000

 
32,000,000

 

Payments on revolving line of credit
 
(74,000,000
)
 

 

Proceeds from term debt
 
45,000,000

 

 

Principal payments on term debt
 
(1,800,000
)
 

 

Net cash provided by (used in) financing activities
 
$
216,386,377

 
$
157,009,029

 
$
(9,500,037
)
Net Change in Cash and Cash Equivalents
 
$
6,489,501

 
$
(13,049,683
)
 
$
145,264

Cash and Cash Equivalents at beginning of period
 
3,599,935

 
16,649,618

 
16,504,354

Cash and Cash Equivalents at end of period
 
$
10,089,436

 
$
3,599,935

 
$
16,649,618

Supplemental Disclosure of Cash Flow Information
 
 
 
 
 
 
Income taxes paid (net of refunds)
 
$
314,728

 
$
192,938

 
$
3,761,161

Non-Cash Investing Activities
 
 
 
 
 
 
Change in accounts payable and accrued expenses related to acquisition expenditures
 
$

 
$
(344,065
)
 
$
(1,407,724
)
Non-Cash Financing Activities
 
 
 
 
 
 
Change in accounts payable and accrued expenses related to the issuance of equity
 
$
(72,685
)
 
$
72,685

 
$
(523,094
)
Change in accounts payable and accrued expenses related to debt financing costs
 
$
(30,607
)
 
$
(176,961
)
 
$
220,000

Reinvestment of distributions by common stockholders in additional common shares
 
$
817,915

 
$
140,108

 
$
108,119

See accompanying Schedule I Notes to Condensed Financial Statements.
NOTES TO SCHEDULE I CONDENSED FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
In the parent-company-only financial statements, the Company's investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since the date of acquisition. The parent-company-only financial statements should be read in conjunction with the Company's consolidated financial statements.
NOTE B - DIVIDENDS FROM SUBSIDIARIES
Cash dividends paid to CorEnergy Infrastructure Trust, Inc. from the Company's consolidated subsidiaries were $23.4 million, $18.6 million, and $19.3 million for the years ended December 31, 2015, December 31, 2014, and December 31, 2013, respectively.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Notes)
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Text Block]

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CorEnergy Infrastructure Trust, Inc.
 
 
 
 
 
 
Initial Cost to Company
 
Cost Capitalized Subsequent to Acquisition
 
Gross Amount Carried at Close of Period 12/31/15
 
 
 
 
 
 
 
Description
 
Location
 
Date Acquired
 
Land
 
Building & Fixtures
 
Improvements
 
Land
 
Building & Fixtures
 
Total
 
Accumulated Depreciation
 
Investment in Real Estate, net, at 12/31/15
 
Encumbrances
 
Pinedale LGS1
 
Pinedale, WY
 
2012
 
$
105,485,063

 
$
125,119,062

 

 
$
105,485,063

 
$
125,119,062

 
$
230,604,125

 
$
26,893,218

 
$
203,710,907

 
$
62,532,000

 
Portland Terminal Facility2
 
Portland, OR
 
2014
 
13,700,000

 
27,961,956

 
10,000,000

 
13,700,000

 
37,961,956

 
51,661,956

 
2,625,606

 
49,036,350

 
7,141,946

5 
UPS
 
St. Louis, MO
 
2014
 
210,000

 
1,188,000

 

 
210,000

 
1,188,000

 
1,398,000

 
32,670

 
1,365,330

 
193,265

5 
Grand Isle Gathering System 3 4
 
Gulf of Mexico
 
2015
 
960,000

 
258,471,397

 

 
960,000

 
258,471,397

 
259,431,397

 
4,317,769

 
255,113,628

 
35,864,789

5 
 
 
 
 
 
 
$
120,355,063

 
$
412,740,415

 
$
10,000,000

 
$
120,355,063

 
$
422,740,415

 
$
543,095,478

 
$
33,869,263

 
$
509,226,215

 
$
105,732,000

 
(1) In connection with the asset acquisition, CorEnergy and Pinedale LP incurred acquisition costs of $2,557,910, which are included in the total asset balance.
 
(2) In connection with the asset acquisition, LCP Oregon Holdings incurred acquisition costs of $1,777,956, which are included in the total asset balance.
 
(3) In connection with the asset acquisition, Grand Isle Gathering System incurred acquisition costs of $1,931,396, which are included in the total asset balance.
 
(4) Included in the Building and Fixtures amount is $12,500,000 and included in Accumulated Depreciation is $202,536 relating to the Asset Retirement Obligation, which was included as non-cash consideration in the purchase of the asset.
 
(5) These 3 properties are covered by the Regions Credit Facility. The amount outstanding at that facility at December 31, 2015, is $43,200,000, which has been allocated out pro rata among these properties based on total gross amount carried at the close of December 31, 2015.
 
NOTES TO SCHEDULE III - CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
Reconciliation of Real Estate and Accumulated Depreciation
 
For the Years Ended December 31,
 
2015
 
2014
 
2013
Investment in real estate:
 
 
 
 
 
Balance, beginning of year
$
293,823,903

 
$
244,975,206

 
$
244,686,333

Addition: Acquisitions and developments
263,398,424

 
48,848,697

 
288,873

Deduction: Dispositions and other
(14,126,849
)
 

 

Balance, end of year
$
543,095,478

 
$
293,823,903

 
$
244,975,206

Accumulated depreciation:
 
 
 
 
 
Balance, beginning of year
$
25,295,958

 
$
12,754,588

 
$
1,607,624

Addition: Depreciation
15,021,908

 
12,541,370

 
11,146,964

Deduction: Dispositions and other
(6,448,603
)
 

 

Balance, end of year
$
33,869,263

 
$
25,295,958

 
$
12,754,588

The aggregate cost of the properties is approximately $9,646,148 lower for federal income tax purposes at December 31, 2015. The tax basis of the properties is unaudited.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE (Notes)
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE - CorEnergy Infrastructure Trust, Inc.
Description
 
Interest Rate
 
Final Maturity
 
Monthly Payment Amount (2)
 
Prior Liens
 
Face Value
 
Carrying Amount of Mortgage
 
Principal Amount of Loans Subject to Delinquent Principal or Interest
First Mortgages
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Campbell County - Wyoming (Reed, Gillette, Lemay)
 
12.00%
(1
)
3/31/2024
 
$

 
None
 
$
12,000,000

 
$
1,857,000

(3
)
$
12,000,000

Billings, Dunn, and McKenzie Counties, North Dakota (Morlock Well)
 
12.00%
 
12/31/2024
 
$
40,000

 
None
 
4,000,000

 
3,993,376

 

Second Mortgages
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Campbell County - Wyoming (Reed, Gillette, Lemay)
 
12.00%
(1
)
3/31/2024
 
$

 
None
 
3,300,000

 

(3
)
3,300,000

Billings, Dunn, and McKenzie Counties, North Dakota (Morlock Well)
 
13.00%
 
12/31/2024
 
$
10,833

 
None
 
1,000,000

 
1,026,645

 

 
 
 
 
 
 
 
 
 
 
$
20,300,000

 
$
6,877,021

 
$
15,300,000

(1) Interest rate increases by 2% of the previous year's rate.
(2) Equal monthly installments comprised of interest.
(3) Due to decreased economic activity, a provision for loan loss was recorded for these loans. See Note 6 for further information.

NOTES TO SCHEDULE IV - CONSOLIDATED MORTGAGE LOANS ON REAL ESTATE
Reconciliation of Mortgage Loans on Real Estate
 
 
For the Years Ended December 31,
 
 
2015
 
2014
 
2013
Beginning balance
 
$
20,435,170

 
$

 
$

Additions:
 
 
 
 
 
 
New loans
 

 
20,300,000

 

Net deferred costs
 
(8,211
)
 
(86,508
)
 

Interest receivable
 
302,395

 
220,349

 

Total Additions
 
$
294,184

 
$
20,433,841

 
$

 
 
 
 
 
 
 
Deductions:
 
 
 
 
 
 
Principal repayments
 
$
100,000

 
$

 
$

Amortization of deferred costs
 
(6,804
)
 
1,329

 

Principal, Interest and Deferred Costs Write Down 1
 
$
13,759,137

 
$

 
$

Total deductions
 
$
13,852,333

 
$
1,329

 
$

 
 
 
 
 
 
 
Ending balance
 
$
6,877,021

 
$
20,435,170

 
$


(1) This amount relates to the amounts written down relating to the Mortgage Loans. The amount of provision for loan loss on the Income Statement has an extra $25,000 that relates to a write down of a prepaid asset relating to Black Bison
Significant Accounting Policies (Policies)
Use of Estimates – The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, recognition of distribution income and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from those estimates.
Leased Property – The Company includes assets subject to lease arrangements within Leased property, net of accumulated depreciation, in the Consolidated Balance Sheets. Lease payments received are reflected in Lease revenue on the Consolidated Statements of Income, net of amortization of any off-market adjustments. Costs in connection with the creation and execution of a lease are capitalized and amortized over the lease term. See Note 3 for further discussion.
Cash and Cash Equivalents – The Company maintains cash balances at financial institutions in amounts that regularly exceed FDIC insured limits. The Company’s cash equivalents are comprised of short-term, liquid money market instruments.
Long-Lived Assets – Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of the asset. Expenditures for repairs and maintenance are charged to operations as incurred, and improvements, which extend the useful lives of assets, are capitalized and depreciated over the remaining estimated useful life of the asset. The Company periodically reviews its long-lived assets, primarily real estate, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company’s review involves comparing current and future operating performance of the assets, the most significant of which is undiscounted operating cash flows, to the carrying value of the assets. Based on this analysis, a provision for loss is recognized, if any.
The Company initially records long-lived assets at their purchase price plus any direct acquisition costs, unless the transaction is accounted for as a business combination, in which case the acquisition costs are expensed as incurred. If the transaction is accounted for as a business combination, the Company allocates the purchase price to the acquired tangible and intangible assets and liabilities based on their estimated fair values. See Note 5 for further information.
E. Intangibles and Goodwill – The Company may acquire long-lived assets that are subject to an existing lease contract with the seller or other lessee party and the Company may assume outstanding debt of the seller as part of the consideration paid. If, at the time of acquisition, the existing lease or debt contract is not at current market terms, the Company will record an asset or liability at the time of acquisition representing the amount by which the fair value of the lease or debt contract differs from its contractual value. Such amount is then amortized over the remaining contract term as an adjustment to the related lease revenue or interest expense. In a business combination, goodwill is recorded when the purchase price paid exceeds the estimated fair value of the net assets acquired. Refer to Note 5 for further details regarding the goodwill acquired in the MoGas Transaction.
The Company reviews its long-lived assets, including goodwill, for impairment at least annually or whenever events or circumstances indicate the carrying value of an asset may not be recoverable. The Company's review involves comparing current and future operating performance of the assets, the most significant of which is undiscounted operating cash flows, to the carrying value of the assets. If the carrying amount of an asset exceeds its implied fair value, an impairment loss would be recognized for the amount of the excess. No long-lived asset or goodwill impairment write-downs were recognized during the years ended December 31, 2015, 2014 and 2013. See paragraph (H) below.
Earnings Per Share – Basic earnings per share ("EPS") is computed using the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period except for periods of net loss for which no common share equivalents are included because their effect would be anti-dilutive. Dilutive common equivalent shares consist of shares issuable upon conversion of the convertible notes calculated using the if-converted method. See paragraph (N) below.
Investment Securities – The Company’s investments in securities are classified as other equity securities and represent interests in private companies which the Company has elected to report at fair value under the fair value option.
These investments generally are subject to restrictions on resale, have no established trading market and are valued on a quarterly basis. Because of the inherent uncertainty of valuation, the fair values of such investments, which are determined in accordance with procedures approved by the Company’s Board of Directors, may differ materially from the values that would have been used had a ready market existed for the investments.
The Company determines fair value to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has determined the principal market, or the market in which the Company exits its private portfolio investments with the greatest volume and level of activity, to be the private secondary market. Typically, private companies are bought and sold based on multiples of EBITDA, cash flows, net income, revenues, or in limited cases, book value.
For private company investments, value is often realized through a liquidity event. Therefore, the value of the Company as a whole (enterprise value) at the reporting date often provides the best evidence of the value of the investment and is the initial step for valuing the Company’s privately issued securities. For any one company, enterprise value may best be expressed as a range of fair values, from which a single estimate of fair value will be derived. In determining the enterprise value of a portfolio company, an analysis is prepared consisting of traditional valuation methodologies including market and income approaches. The Company considers some or all of the traditional valuation methods based on the individual circumstances of the portfolio company in order to derive its estimate of enterprise value.
The fair value of investments in private portfolio companies is determined based on various factors, including enterprise value, observable market transactions, such as recent offers to purchase a company, recent transactions involving the purchase or sale of the equity securities of the company, or other liquidation events. The determined equity values may be discounted when the Company has a minority position, or is subject to restrictions on resale, has specific concerns about the receptivity of the capital markets to a specific company at a certain time, or other comparable factors exist.
The Company undertakes a multi-step valuation process each quarter in connection with determining the fair value of private investments. We have retained an independent valuation firm to provide third party valuation consulting services based on procedures that the Company has identified and may ask them to perform from time to time on all or a selection of private investments as determined by the Company. The multi-step valuation process is specific to the level of assurance that the Company requests from the independent valuation firm. For positive assurance, the process is as follows:
The independent valuation firm prepares the valuations and the supporting analysis.
The valuation report is reviewed and approved by senior management.
The Audit Committee of the Board of Directors reviews the supporting analysis and accepts the valuations.
Financing Notes Receivable - Financing notes receivable are presented at face value plus accrued interest receivable and deferred loan origination costs and net of related direct loan origination income. Each quarter the Company reviews its financing notes receivable to determine if the balances are realizable based on factors affecting the collectability of those balances. Factors may include credit quality, timeliness of required periodic payments, past due status and management discussions with obligors. The Company evaluates the collectability of both interest and principal of each of its loans to determine if an allowance is needed. An allowance will be recorded when based on current information and events, the Company determines it is probable that it will be unable to collect all amounts due according to the existing contractual terms. If the Company does determine an allowance is necessary, the amount deemed uncollectable is expensed in the period of determination. An insignificant delay or shortfall in the amount of payments does not necessarily result in the recording of an allowance. Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will generally cease recognizing financing revenue on that loan until all principal and interest have been brought current. Interest income recognition is resumed if and when the previously reserved-for financing notes become contractually current and performance has been demonstrated. Payments received subsequent to the recording of an allowance will be recorded as a reduction to principal. During the year ended December 31, 2015, the Company created a provision for loan losses in the amount of approximately $13.8 million. The Company's financing notes receivable are discussed more fully in Note 6.
I. Lease Receivable – Lease receivables are determined according to the terms of the lease agreements entered into by the Company and its lessees, as discussed within Note 4. Lease receivables may also represent timing differences between straight-line revenue recognition and contractual lease receipts and is recorded within accounts and other receivables on the balance sheet. As of December 31, 2015, lease payments by our tenants have remained timely and without lapse.
Accounts Receivable – Accounts receivable are presented at face value net of an allowance for doubtful accounts within accounts and other receivables on the balance sheet. Accounts are considered past due based on the terms of sale with the customers. The Company reviews accounts for collectability based on an analysis of specific outstanding receivables, current economic conditions and past collection experience. At December 31, 2015, and December 31, 2014, the Company determined that an allowance for doubtful accounts was not necessary.
Derivative Instruments and Hedging Activities - FASB ASC 815, Derivatives and Hedging (“ASC 815”), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company's objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. The Company's derivative assets and liabilities are presented on a gross basis.
As required by ASC 815, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.
FASB ASC 820, Fair Value Measurements and Disclosure ("ASC 820"), defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. In accordance with ASC 820, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.
Fair Value Measurements - Various inputs are used in determining the fair value of the Company’s assets and liabilities. These inputs are summarized in the three broad levels listed below:
Level 1 – quoted prices in active markets for identical investments
Level 2 – other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.)
Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)
ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances. ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity's own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
Asset Retirement Obligations – In accordance with ASC 410-20, Asset Retirement Obligations, we recognized an asset retirement obligation (ARO) in conjunction with the acquisition of the GIGS in June 2015 that existed at the time. The liability was initially measured using the amount agreed upon between the parties in an arm's length transaction, which under ASC 410-20, represents fair value, and will be subsequently adjusted for ARO accretion expense and changes in the amount or timing of the estimated cash flows.
We measure changes in the liability for an ARO due to passage of time by applying an interest method of allocation to the amount of the liability at the beginning of the period. The interest rate used to measure that change is the credit-adjusted risk-free rate that existed when the ARO, or portion thereof, was initially measured. The Company's credit-adjusted risk-free rate at the time of acquisition was 5.58 percent. The increase in the carrying amount of the liability will be recognized as an expense classified as an operating item in the statement of income, hereinafter referred to as ARO accretion expense.
The fair value of the obligation at the acquisition date has been capitalized as part of the carrying amount of the related long-lived assets and will be depreciated over the asset's remaining useful life. The useful lives of most pipeline gathering systems are primarily derived from available supply resources and ultimate consumption of those resources by end users. Indeterminate asset retirement obligation costs will be recognized in the period in which sufficient information exists to reasonably estimate potential settlement dates and methods. The ARO is discussed more fully in Note 16 .
Convertible Debt – In accordance with ASC 470, Debt ("ASC 470") the Company records its Convertible Senior Notes at the aggregate principal amount, less discount. We are amortizing the debt discount over the life of the convertible notes as additional non-cash interest expense utilizing the effective interest method. Refer to Note 15 for additional information.
Revenue Recognition – Specific recognition policies for the Company’s revenue items are as follows:
Lease revenue – Base rent related to the Company’s leased property is recognized on a straight-line basis over the term of the lease when collectability is reasonably assured. Contingent rent is recognized when it is earned, based on the achievement of specified performance criteria. Rental payments received in advance are classified as unearned revenue and included as a liability within the Consolidated Balance Sheets. Unearned revenue is amortized ratably over the lease period as revenue recognition criteria are met. Rental payments received in arrears are accrued and classified as Lease Receivable and included in assets within the Consolidated Balance Sheets.
Sales revenue – Revenues related to natural gas distribution and performance of management services are recognized in accordance with GAAP upon delivery of natural gas and upon the substantial performance of management and supervision services related to the expansion of the natural gas distribution system. Omega, acting as a principal, provides natural gas supply for its customers. In addition, Omega is paid fees for the operation and maintenance of its natural gas distribution system, including any necessary expansion of the distribution system. Omega is responsible for the coordination, supervision and quality of the expansions while actual construction is generally performed by third party contractors. Revenues from expansion efforts are recognized in accordance with GAAP using either a completed contract or percentage of completion method based on the level and volume of estimates utilized, as well as the certainty or uncertainty of our ability to collect those revenues.
Transportation revenue – MoGas generates revenue from natural gas transportation and recognizes that revenue on firm contracted capacity over the contract period regardless of whether the contracted capacity is used. For interruptible or volumetric based transportation, revenue is recognized when physical deliveries of natural gas are made at the delivery point agreed upon by both parties.
Financing revenue – Our financing notes receivable are considered a core product offering and therefore the related income is presented as a component of operating income. For increasing rate loans, base interest income is recorded ratably over the life of the loan, using the effective interest rate. The net amount of deferred loan origination income and costs are amortized on a straight-line basis over the life of the loan and reported as an adjustment to yield in financing revenue. Participating financing revenues are recorded when specific performance criteria have been met.
Cost of Sales – Included in the Company’s cost of sales are the amounts paid for gas and propane, along with related transportation, which are delivered to customers, as well as, the cost of material and labor related to the expansion of the Omega natural gas distribution system
Transportation, maintenance and general and administrative – These expenses are incurred both internally and externally. The internal expenses relate to system control, pipeline operations, maintenance, insurance and taxes. Other internal expenses include payroll cost for employees associated with gas control, field employees, the office manager and the vice presidents of operations and finance. The external costs consist of professional services such as audit and accounting, legal and regulatory and engineering.
Asset Acquisition Expenses – Costs incurred in connection with the research of real property acquisitions not accounted for as business combinations are expensed until it is determined that the acquisition of the real property is probable. Upon such determination, costs incurred in connection with the acquisition of the property are capitalized as described in paragraph (D) above. Deferred costs related to an acquisition that we have determined, based on our judgment, not to pursue are expensed in the period in which such determination is made. Costs incurred in connection with a business combination are expensed as incurred.
Offering Costs – Offering costs related to the issuance of common or preferred stock are charged to additional paid-in capital when the stock is issued
Debt Issuance Costs – Costs incurred for the issuance of new debt are capitalized and amortized into interest expense over the debt term. See Note 14 for further discussion.
Distributions to Stockholders – Distributions to both common and preferred stockholders are determined by the Board of Directors. Distributions to common stockholders are recorded on the ex-dividend date and distributions to preferred stockholders are recorded when declared by the Board of Directors.
Other Income Recognition Specific policies for the Company’s other income items are as follows:
Net distributions and dividend income from investments – Distributions and dividends from investments are recorded on their ex-dates and are reflected as other income within the accompanying Consolidated Statements of Income. Distributions received from the Company’s investments are generally characterized as ordinary income, capital gains and distributions received from investment securities. The portion characterized as return of capital is paid by our investees from their cash flow from operations. The Company records investment income, capital gains and distributions received from investment securities based on estimates made at the time such distributions are received. Such estimates are based on information available from each company and other industry sources. These estimates may subsequently be revised based on information received from the entities after their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Company.
Net realized and unrealized gain (loss) from investments – Securities transactions are accounted for on the date the securities are purchased or sold. Realized gains and losses are reported on an identified cost basis. The Company records investment income and return of capital based on estimates made at the time such distributions are received. Such estimates are based on information available from the portfolio company and other industry sources. These estimates may subsequently be revised based on information received from the portfolio company after their tax reporting periods are concluded, as the actual character of these distributions are not known until after our fiscal year end.
Federal and State Income Taxation – In 2013 we qualified, and in March 2014 elected (effective as of January 1, 2013), to be treated as a REIT for federal income tax purposes. Because certain of our assets may not produce REIT-qualifying income or be treated as interests in real property, those assets are held in wholly-owned Taxable REIT Subsidiaries ("TRSs") in order to limit the potential that such assets and income could prevent us from qualifying as a REIT.
As a REIT, the Company holds and operates certain of our assets through one or more wholly-owned TRSs. Our use of TRSs enables us to continue to engage in certain businesses while complying with REIT qualification requirements and also allows us to retain income generated by these businesses for reinvestment without the requirement of distributing those earnings. In the future, we may elect to reorganize and transfer certain assets or operations from our TRSs to the Company or other subsidiaries, including qualified REIT subsidiaries.
The Company's trading securities and other equity securities are limited partnerships or limited liability companies which are treated as partnerships for federal and state income tax purposes. As a limited partner, the Company reports its allocable share of taxable income in computing its own taxable income. To the extent held by a TRS, the TRS's tax expense or benefit is included in the Consolidated Statements of Income based on the component of income or gains and losses to which such expense or benefit relates. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. It is expected that for the year ended December 31, 2015, and future periods, any deferred tax liability or asset generated will be related entirely to the assets and activities of the Company's TRSs.
If we cease to qualify as a REIT, the Company, as a C corporation, would be obligated to pay federal and state income tax on its taxable income. Currently, the highest regular marginal federal income tax rate for a corporation is 35 percent. The Company may be subject to a 20 percent federal alternative minimum tax on its federal alternative minimum taxable income to the extent that its alternative minimum tax exceeds its regular federal income tax.
Recent Accounting Pronouncements – In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2014-08 "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." Under this guidance, only disposals representing a strategic shift in operations would be presented as discontinued operations. This guidance requires expanded disclosure that provides information about the assets, liabilities, income and expenses of discontinued operations. Additionally, the guidance requires additional disclosure for a disposal of a significant part of an entity that does not qualify for discontinued operations reporting. This guidance was effective for reporting periods beginning on or after December 15, 2014 with early adoption permitted for disposals or classifications of assets as held-for-sale that have not been reported in financial statements previously issued or available for issuance. It is expected that fewer disposal transactions will meet the new criteria to be reported as discontinued operations. The Company elected early adoption of the standard and the effects of applying the revised guidance did not have a material effect on the consolidated financial statements and related disclosures. Refer to Note 3 for further information.
In August 2015, the FASB issued ASU No. 2015-14 "Revenue from Contracts with Customers - Deferral of the Effective Date." The amendments in this update defer the effective date of ASU No. 2014-09 "Revenue from Contracts with Customers", for all entities by one year. ASU No. 2014-09 adds to the FASB ASC by requiring entities to recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to customers and provide additional disclosures. As amended, the effective date for public entities is annual reporting periods beginning after December 15, 2017 and interim periods therein. As such, we will be required to adopt the standard in the first quarter of fiscal year 2018. Early adoption is not permitted before the first quarter of fiscal year 2017. ASC 606 may be adopted using either the "full retrospective" approach, in which the standard is applied to all of the periods presented, or a "modified retrospective" approach. The Company is currently evaluating which transition method to use and the potential future impact, if any, the standard will have on the Company's consolidated financial statements and related disclosures. However, we do not expect its adoption to have a significant impact on our consolidated financial statements, as a substantial portion of our revenue consists of rental income from leasing arrangements, which is specifically excluded from ASU 2014-09.
In August 2014, the FASB issued ASU No. 2014-15 "Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern", that will require management to evaluate whether there are conditions and events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the financial statements are issued on both an interim and annual basis. Management will be required to provide certain footnote disclosures if it concludes that substantial doubt exists or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. ASU No. 2014-15 becomes effective for annual periods beginning in 2016 and for interim reporting periods starting in the first quarter of 2017. The Company does not expect the adoption of this amendment to have a material impact on its consolidated financial statements.
In February 2015, the FASB issued ASU No. 2015-02 "Consolidation (Topic 810), Amendments to the Consolidation Analysis." ASU 2015-02 is aimed at asset managers, however, it will also have an effect on all reporting entities that have variable interests in other legal entities. In some cases, consolidation conclusions will change. In other cases, reporting entities will need to provide additional disclosures about entities that currently aren't considered variable interest entities but will be considered VIE's under the new guidance if they have a variable interest in those entities. At the very least, reporting entities will need to re-evaluate their consideration conclusions and potentially revise their documentation. For public companies, ASU No. 2015-02 is effective for annual periods beginning after December 15, 2015 and interim periods within those years using either a retrospective or a modified retrospective approach. Management has evaluated this amendment and does not expect adoption to have a material impact on the Company's consolidated financial statements.
In April 2015, the FASB issued ASU No. 2015-03 "Interest-Imputation of Interest" to simplify presentation of debt issuance costs. The amendments in this update require debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Then in June 2015, the FASB issued ASU No. 2015-15 "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements" to clarify that ASU No. 2015-03 does not address the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. As a result, an entity may present debt issuance costs related to line-of-credit arrangements as an asset instead of a direct deduction from the carrying amount of the debt. The clarification is effective as of issuance with ASU No. 2015-03 effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Management evaluated this amendment and does not expect adoption to have a material impact on the Company's consolidated financial statements.
In September 2015, the FASB issued ASU No. 2015-16 "Simplifying the Accounting for Measurement-Period Adjustments." ASU No. 2015-16 requires, for business combinations, that the acquirer record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. ASU No. 2015-16 is effective for fiscal years beginning after December 15, 2015. Management has evaluated this amendment and does not expect adoption to have a material impact on the Company's consolidated financial statements.
In February 2016, the FASB issued ASU No. 2016-02 "Leases" which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016-02 is effective for fiscal years and interim periods beginning after December 31, 2018. Early adoption is permitted. The new leases standard requires adoption using a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. Management is still in the process of evaluating this amendment.
Leased Properties (Tables)
Disclosure of Long Lived Assets Held-for-sale
EIP Leased Property Held for Sale consisted of the following:
EIP Leased Property Held for Sale
 
 
December 31, 2015
 
December 31, 2014
Leased asset
 
$

 
$
14,126,849

Less: accumulated depreciation
 

 
(5,878,933
)
Net leased asset held for sale
 
$

 
$
8,247,916

Leases (Tables)
As of December 31, 2015, the Company had three significant leases. The table below displays the impact of the Company's most significant leases on total leased properties and total lease revenues for the periods presented.

As a Percentage of (1)

Leased Properties

Lease Revenues

As of December 31,

For the Years Ended December 31,

2015

2014

2015

2014
 
2013
Pinedale LGS
40.0%

79.2%

42.9%

71.9%
 
88.7%
Grand Isle Gathering System
50.1%


42.3%

 
Portland Terminal Facility
9.6%

17.2%

13.3%

19.0%
 
Public Service of New Mexico (2)

3.1%

1.3%

9.1%
 
11.3%
(1) Insignificant leases are not presented, thus percentages do not sum to 100%.
(2) The Public Service of New Mexico lease terminated on April 1, 2015. See additional discussion of the PNM lease under the heading Lease of Property Held for Sale, below.

The future contracted minimum rental receipts for all net leases as of December 31, 2015, are as follows:
Future Minimum Lease Receipts
Years Ending December 31,
 
Amount
2016
 
$
59,607,929

2017
 
60,931,762

2018
 
61,139,762

2019
 
63,468,195

2020
 
70,629,654

Thereafter
 
451,794,133

Total
 
$
767,571,435

Mogas Acquisition (Tables)
The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed, which the Company determined using Level 1, Level 2 and Level 3 inputs:
Acquisition Date Fair Values
 
Amount
Leased Property:
 
Land
$
210,000

Buildings and improvements
1,188,000

Total Leased Property
$
1,398,000

 
 
Property and Equipment:
 
Land
$
580,000

Depreciable property:
 
Natural Gas Pipeline
119,081,732

Vehicles and Trailers
378,000

Office Equipment
43,400

Total Property and Equipment
$
119,503,132

 
 
Goodwill
$
1,718,868

Cash and cash equivalents
4,098,274

Accounts receivable
1,357,905

Prepaid assets
125,485

Accounts payable and other accrued liabilities
(3,781,664
)
 
 
Net assets acquired
$
125,000,000

For comparative purposes, the following table illustrates the effect on the Consolidated Statements of Income and Comprehensive Income as well as earnings per share - basic and diluted as if the Company had consummated the MoGas Transaction as of January 1, 2013:
 
For the Year Ended
 
December 31, 2014
 
December 31, 2013
Total Revenue (1)
$
53,315,951

 
$
42,551,314

Total Expenses (2)
35,742,957

 
33,429,175

Operating Income
17,572,994

 
9,122,139

Other Income (Expense) (3)
(3,997,916
)
 
1,137,606

Tax Benefit (Expense) (4)
641,304

 
(734,461
)
Net Income
14,216,382

 
9,525,284

Less: Net Income attributable to non-controlling interest
1,556,157

 
1,466,767

Net Income attributable to CORR Stockholders
$
12,660,225

 
$
8,058,517

Earnings per share:
 
 
 
Basic and Diluted
$
1.37

 
$
1.03

Weighted Average Shares of Common Stock Outstanding:
 
 
 
Basic and Diluted (5)
9,236,345

 
7,819,879

(1) Includes elimination adjustments for intercompany sales and rent.
(2) Includes adjustments for an increase in management fee payable, elimination of intercompany purchases and rent, depreciation, and other miscellaneous expenses.
(3) Includes adjustments for interest expense and other miscellaneous income.
(4) Includes an adjustment for a deferred tax benefit.
(5) Shares outstanding were adjusted for the November 17, 2014, follow-on equity offering mentioned above.
Income Taxes (Tables)
Components of the Company’s deferred tax assets and liabilities as of December 31, 2015, and 2014, are as follows:
Deferred Tax Assets and Liabilities
 
 
December 31, 2015
 
December 31, 2014
Deferred Tax Assets:
 
 
 
 
Net operating loss carryforwards
 
$
543,116

 
$
679,692

Net unrealized loss on investment securities
 
251,539

 

Cost recovery of leased and fixed assets
 

 
1,042,207

Loan Loss Provision
 
1,257,436

 

Other loss carryforwards
 
1,833,240

 

Sub-total
 
$
3,885,331

 
$
1,721,899

Deferred Tax Liabilities:
 
 
 
 
Basis reduction of investment in partnerships
 
$
(2,159,058
)
 
$
(2,842,332
)
Net unrealized gain on investment securities
 

 
(142,154
)
Cost recovery of leased and fixed assets
 
(119,297
)
 

Sub-total
 
(2,278,355
)
 
(2,984,486
)
Total net deferred tax asset (liability)
 
$
1,606,976

 
$
(1,262,587
)
Total income tax expense differs from the amount computed by applying the federal statutory income tax rate of 35 percent for the years ended December 31, 2015, 2014, and 2013, to income or loss from operations and other income and expense for the years presented, as follows:
Income Tax Expense (Benefit)
 
 
For the Years Ended December 31,
 
 
2015
 
2014
 
2013
Application of statutory income tax rate
 
$
3,630,325

 
$
2,375,903

 
$
2,608,151

State income taxes, net of federal tax (benefit)
 
(134,597
)
 
(47,731
)
 
273,174

Federal Tax Attributable to Income of Real Estate Investment Trust
 
(5,189,849
)
 
(2,607,207
)
 
(927,254
)
Other
 
(253,432
)
 
53,472

 
995,447

Total income tax expense (benefit)
 
$
(1,947,553
)
 
$
(225,563
)
 
$
2,949,518

December 31, 2015, all of the income tax benefit presented above relates to the assets and activities held in the Company's TRSs. The components of income tax benefit include the following for the periods presented:
Components of Income Tax Expense (Benefit)
 
 
For the Years Ended December 31,
 
 
2015
 
2014
 
2013
Current tax expense
 
 
 
 
 
 
Federal
 
$
781,941

 
$
3,456,858

 
$
(7,139
)
State (net of federal tax benefit)
 
140,069

 
387,079

 
20,613

Total current tax expense
 
922,010

 
3,843,937

 
13,474

Deferred tax expense (benefit)
 
 
 
 
 
 
Federal
 
(2,594,897
)
 
(3,634,689
)
 
2,683,483

State (net of federal tax benefit)
 
(274,666
)
 
(434,811
)
 
252,561

Total deferred tax expense (benefit)
 
(2,869,563
)
 
(4,069,500
)
 
2,936,044

Total income tax expense (benefit), net
 
$
(1,947,553
)
 
$
(225,563
)
 
$
2,949,518


As of December 31, 2014 the TRSs had a net operating loss of $894 thousand. For the year ended December 31, 2015, the TRSs incurred a total net operating loss of approximately $478 thousand, resulting in a total net operating loss of approximately $1.4 million as of December 31, 2015. The net operating loss may be carried forward for 20 years. If not utilized, this net operating loss will expire as follows: $90 thousand, $804 thousand, and $478 thousand in the years ending December 31, 2033, 2034, and 2035 respectively. The amount of deferred tax asset for net operating losses as of December 31, 2015, includes amounts for the year ended December 31, 2015. The aggregate cost of securities for federal income tax purposes and securities with unrealized appreciation and depreciation, were as follows:
Aggregate Cost of Securities for Income Tax Purposes (Unaudited)
 
 
December 31, 2015
 
December 31, 2014
Aggregate cost for federal income tax purposes
 
$
4,750,252

 
$
4,218,986

Gross unrealized appreciation
 
5,133,908

 
7,436,696

Gross unrealized depreciation
 
(97,500
)
 
 
Net unrealized appreciation
 
$
5,036,408

 
$
7,436,696

The per share characterization by quarter is reflected in the following table:
2015 Preferred Stock Tax Information (unaudited)
Record Date
 
Ex-Dividend Date
 
Payable Date
 
Total Distribution per Share
 
Total Ordinary Dividends
 
Qualified Dividends
 
Capital Gain Distributions
 
Nondividend Distributions
05/15/2015
 
05/13/2015
 
06/01/2015
 
$
0.6351

 
$
0.6351

 
$
0.0171

 
$

 
$

08/17/2015
 
08/13/2015
 
08/31/2015
 
0.4609

 
0.4609

 
0.0124

 

 

11/13/2015
 
11/11/2015
 
11/30/2015
 
0.4609

 
0.4609

 
0.0124

 

 

Total 2015 Distributions
 
$
1.5569

 
$
1.5569

 
$
0.0419

 
$

 
$

The per share characterization by quarter is reflected in the following tables:
2015 Common Stock Tax Information (unaudited)
Record Date
 
Ex-Dividend Date
 
Payable Date
 
Total Distribution per Share
 
Total Ordinary Dividends
 
Qualified Dividends
 
Capital Gain Distributions
 
Nondividend Distributions
02/13/2015
 
02/11/2015
 
02/27/2015
 
$
0.6500

 
$
0.4680

 
$
0.0126

 
$

 
$
0.1820

05/15/2015
 
05/13/2015
 
05/29/2015
 
0.6750

 
0.4860

 
0.0131

 

 
0.1890

08/17/2015
 
08/13/2015
 
08/31/2015
 
0.6750

 
0.4860

 
0.0131

 

 
0.1890

11/13/2015
 
11/10/2015
 
11/30/2015
 
0.7500

 
0.5400

 
0.0146

 

 
0.2100

Total 2015 Distributions
 
$
2.7500

 
$
1.9800

 
$
0.0534

 
$

 
$
0.7700

2014 Common Stock Tax Information (unaudited)
Record Date
 
Ex-Dividend Date
 
Payable Date
 
Total Distribution per Share
 
Total Ordinary Dividends
 
Qualified Dividends
 
Capital Gain Distributions
 
Nondividend Distributions
01/13/2014
 
01/09/2014
 
01/23/2014
 
$
0.6250

 
$
0.4640

 
$
0.2250

 
$

 
$
0.1610

05/14/2014
 
05/12/2014
 
05/22/2014
 
0.6450

 
0.4790

 
0.2320

 

 
0.1660

08/15/2014
 
08/13/2014
 
08/29/2014
 
0.6500

 
0.4825

 
0.2335

 

 
0.1675

11/14/2014
 
11/12/2014
 
11/28/2014
 
0.6500

 
0.4825

 
0.2335

 

 
0.1675

Total 2014 Distributions
 
$
2.5700

 
$
1.9080

 
$
0.9240

 
$

 
$
0.6620

2013 Common Stock Tax Information (unaudited)
Record Date
 
Ex-Dividend Date
 
Payable Date
 
Total Distribution per Share
 
Total Ordinary Dividends
 
Qualified Dividends
 
Capital Gain Distributions
 
Nondividend Distributions
03/08/2013
 
03/06/2013
 
03/19/2013
 
$
0.6250

 
$
0.6250

 
$
0.6250

 
$

 
$

06/28/2013
 
06/26/2013
 
07/05/2013
 
0.6250

 
0.1835

 
0.1835

 

 
0.4415

09/30/2013
 
09/26/2013
 
10/04/2013
 
0.6250

 

 

 

 
0.6250

Total 2013 Distributions
 
$
1.8750

 
$
0.8085

 
$
0.8085

 
$

 
$
1.0665

Property and Equipment (Tables)
Property and Equipment
Property and equipment consists of the following:
Property and Equipment
 
 
December 31, 2015
 
December 31, 2014
Land
 
$
580,000

 
$
580,000

Natural gas pipeline
 
124,386,348

 
124,297,157

Vehicles and trailers
 
524,921

 
506,958

Office equipment and computers
 
87,696

 
59,027

Gross property and equipment
 
125,578,966

 
125,443,142

Less: accumulated depreciation
 
(5,948,988
)
 
(2,623,020
)
Net property and equipment
 
$
119,629,978

 
$
122,820,122

Fair Value of Other Securities (Tables)
The major components of net realized and unrealized gain or loss on trading securities for the years ended December 31, 2015, 2014 and 2013 are as follows:
Major Components of Net Realized and Unrealized Loss on Trading Securities
 
For the Years Ended December 31,
 
2015
 
2014
 
2013
Net unrealized loss on trading securities
$

 
$

 
$

Net realized loss on trading securities

 

 
(251,213
)
Total net realized and unrealized loss on trading securities
$

 
$

 
$
(251,213
)
The following tables provide the fair value measurements of applicable Company assets and liabilities by level within the fair value hierarchy as of December 31, 2015, and December 31, 2014. These assets and liabilities are measured on a recurring basis.
December 31, 2015
 
 
December 31, 2015
 
Fair Value
 
 
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
Other equity securities
 
$
8,393,683

 
$

 
$

 
$
8,393,683

Total Assets
 
$
8,393,683

 
$

 
$

 
$
8,393,683

December 31, 2014
 
 
December 31, 2014
 
Fair Value
 
 
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
Other equity securities
 
$
9,572,181

 
$

 
$

 
$
9,572,181

Total Assets
 
$
9,572,181

 
$

 
$

 
$
9,572,181

The changes for all Level 3 securities measured at fair value on a recurring basis using significant unobservable inputs for the years ended December 31, 2015 and 2014, are as follows:
Level 3 Rollforward
For the Year Ended December 31, 2015
 
Fair Value Beginning Balance
 
Acquisitions
 
Disposals
 
Total Realized and Unrealized Gains/(Losses) Included in Net Income
 
Return of Capital Adjustments Impacting Cost Basis of Securities
 
Fair Value Ending Balance
 
Changes in Unrealized Losses, Included In Net Income, Relating to Securities Still Held (1)
Other equity securities
 
$
9,217,181

 
$

 
$

 
$
(1,073,243
)
 
$
249,745

 
$
8,393,683

 
$
(1,073,243
)
Warrant investment
 
355,000

 

 

 
(355,000
)
 

 

 
(355,000
)
Total
 
$
9,572,181

 
$

 
$

 
$
(1,428,243
)
 
$
249,745

 
$
8,393,683

 
$
(1,428,243
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Year Ended December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other equity securities
 
$
23,304,321

 
$

 
$
(13,245,379
)
 
$
139,612

 
$
(981,373
)
 
$
9,217,181

 
$
139,612

Warrant Investment
 
 
 
97,500

 
 
 
257,500

 
 
 
355,000

 
257,500

Total
 
$
23,304,321

 
$
97,500

 
$
(13,245,379
)
 
$
397,112

 
$
(981,373
)
 
$
9,572,181

 
$
397,112

(1) Located in Net realized and unrealized gain on other equity securities in the Consolidated Statements of Income

Certain condensed combined unaudited financial information of the unconsolidated affiliate, Lightfoot, is presented in the following tables (in thousands).
 
 
December 31, 2015
(Unaudited)
 
December 31, 2014
(Unaudited)
Assets
 
 
 
 
Current assets
 
$
24,276

 
$
25,783

Noncurrent assets
 
696,461

 
382,957

Total Assets
 
$
720,737

 
$
408,740

Liabilities
 
 
 
 
Current liabilities
 
$
19,993

 
$
14,318

Noncurrent liabilities
 
246,808

 
113,810

Total Liabilities
 
$
266,801

 
$
128,128

 
 
 
 
 
Partner's equity
 
453,936

 
280,612

Total liabilities and partner's equity
 
$
720,737

 
$
408,740

As of both December 31, 2015 and 2014, the Company held a 6.6 percent and 1.5 percent equity interest in Lightfoot LP and Lightfoot GP, respectively.
Certain condensed combined unaudited financial information of the unconsolidated affiliate, Lightfoot, is presented in the following tables (in thousands).
 
 
December 31, 2015
(Unaudited)
 
December 31, 2014
(Unaudited)
Assets
 
 
 
 
Current assets
 
$
24,276

 
$
25,783

Noncurrent assets
 
696,461

 
382,957

Total Assets
 
$
720,737

 
$
408,740

Liabilities
 
 
 
 
Current liabilities
 
$
19,993

 
$
14,318

Noncurrent liabilities
 
246,808

 
113,810

Total Liabilities
 
$
266,801

 
$
128,128

 
 
 
 
 
Partner's equity
 
453,936

 
280,612

Total liabilities and partner's equity
 
$
720,737

 
$
408,740


 
 
For the Years Ending December 31,
(Unaudited)
 
 
2015
 
2014
Revenues
 
$
81,789

 
$
54,906

Operating expenses
 
76,755

 
62,764

Other income (expenses)
 
12,469

 
15,459

Income from Operations
 
$
17,503

 
$
7,601

Less: Net Income attributable to noncontrolling interests
 
(8,901
)
 
(761
)
Net Income attributable to Partner's Capital
 
$
8,602

 
$
6,840

Carrying and Fair Value Amounts
 
 
 
 
 
 
 
 
 
 
 
 
Level within fair value hierarchy
 
December 31, 2015
 
December 31, 2014
 
 
 
Carrying
Amount
 
Fair Value
 
Carrying
Amount
 
Fair Value
Financial Assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
Level 1
 
$
14,618,740

 
$
14,618,740

 
$
7,578,164

 
$
7,578,164

Escrow receivable
 
Level 2
 
$
1,392,917

 
$
1,392,917

 
$
2,438,500

 
$
2,438,500

Financing notes receivable (Note 6)
 
Level 2
 
$
7,675,626

 
$
7,675,626

 
$
20,687,962

 
$
20,687,962

Hedged Derivative Asset (Note 17)
 
Level 2
 
$
98,259

 
$
98,259

 
$
351,807

 
$
351,807

Financial Liabilities:
 
 
 
 
 
 
 
 
Long-term debt
 
Level 2
 
$
217,375,153

 
$
193,573,834

 
$
67,060,000

 
$
67,060,000

Line of credit
 
Level 2
 
$

 
$

 
$
32,141,277

 
$
32,141,277

Intangibles (Tables)
Amortization of the intangible lease asset
Intangible Lease Asset
 
 
December 31, 2015
 
December 31, 2014
Intangible lease asset
 
$

 
$
1,094,771

Accumulated amortization
 

 
(1,021,784
)
Net intangible lease asset
 
$


$
72,987

Credit Facilities (Tables)
Schedule of Maturities of Long-term Debt
The annual remaining principal payment requirements as of December 31, 2015 per the contractual maturities of our Pinedale Credit Facilities are as follows:
Year
Total Payments
2016
$
62,532,000

2017

2018

2019

2020

Thereafter

Total
$
62,532,000

The annual remaining principal payment requirements as of December 31, 2015 per the contractual maturities of our Regions Credit Facilities are as follows:
Year
Total Payments
2016
$
3,600,000

2017
3,600,000

2018
3,600,000

2019
32,400,000

2020

Thereafter

Total
$
43,200,000

Asset Retirement Obligation (Tables)
Schedule of asset retirement obligations
The following table is a reconciliation of the asset retirement obligation as of December 31, 2015:
Asset Retirement Obligation
 
For the Years Ended
 
 
December 31, 2015
 
December 31, 2014
 
December 31, 2013
Beginning asset retirement obligation
 
$

 
$

 
$

Liabilities assumed
 
12,500,000

 

 

Expenditures
 

 

 

ARO accretion expense
 
339,042

 

 

Ending asset retirement obligation
 
$
12,839,042

 
$

 
$

Interest Rate Hedge Swaps (Tables)
The table below presents the Company's hedged derivative asset measured at fair value on a recurring basis as well as their classification on the Consolidated Balance Sheets as of December 31, 2015, and December 31, 2014, aggregated by the level in the fair value hierarchy within which those measurements fall. Hedges that are valued as receivable by the Company are considered Asset Derivatives and those that are valued as payable by the Company are considered Liability Derivatives.
 
 
Balance Sheet
Classification
 
Fair Value Hierarchy
Balance Sheet Line Item
 
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
December 31, 2015
Hedged derivative liability
 
Liability
 
$

 
$
98,259

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
Hedged derivative receivable
 
Asset
 
$

 
$
351,807

 
$

Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.)
Level 3 - significant unobservable inputs (including the Company's own assumptions in determining the fair value of investments)
As of December 31, 2015, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
Outstanding Derivatives Designated as Cash Flow Hedges of Interest Rate Risk
Interest Rate Derivative
 
Number of Instruments
 
Notional Amount Outstanding
 
 
 
 
 
Floating Rate Received
 
Fixed Rate Paid
 
 
 
Effective Date
 
Termination Date
 
 
Interest Rate Swap
 
2
 
$52,500,000
 
February 5, 2013
 
December 5, 2017
 
1-month US Dollar LIBOR
 
0.865%
The tables below present the effect of the Company's derivative financial instruments on the Income Statement for the years ended December 31, 2015, December 31, 2014 and December 31, 2013.
 
 
For the Years Ended December 31,
Derivatives in Cash Flow Hedging Relationship
 
2015
 
2014
 
2013
Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion)
 
$
(611,879
)
 
$
(705,826
)
 
$
741,344

Amount of Gain (Loss) Reclassified from AOCI on Derivatives (Effective Portion) Recognized in Net Income1
 
(287,999
)
 
(305,945
)
 
(217,821
)
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion, Amounts Excluded from Effectiveness Testing)1
 
(1,284
)
 
(897
)
 
5,969

 
 
 
 
 
 
 
Derivatives Not Designated as Hedging Instruments
 
 
 
 
 
 
Amount of Gain (Loss) Recognized in Income on Derivative2
 
$

 
$

 
$
(75,200
)
 
 
 
 
 
 
 
(1) Included in "Interest Expense" on the face of the Consolidated Statements of Income and Comprehensive Income.
(2) The gain or (loss) recognized in income on derivatives includes changes in fair value of the derivatives as well as the periodic cash settlements and interest accruals for derivatives not designated as hedging instruments.
The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company's derivatives as of December 31, 2015, and December 31, 2014. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Balance Sheets. There were no offsetting derivative liabilities as of December 31, 2015, and December 31, 2014.
Offsetting Derivatives
 
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Balance Sheets
 
Net Amounts of Assets presented in the Balance Sheets
 
Gross Amounts Not
Offset in the Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Instruments
 
Cash Collateral Received
 
Net Amount
Offsetting Derivative Assets as of December 31, 2015
 
$
98,259

 
$

 
$
98,259

 
$

 
$

 
$
98,259

 
 
 
 
 
 
 
 
 
 
 
 
 
Offsetting Derivative Assets as of December 31, 2014
 
$
351,807

 
$

 
$
351,807

 
$

 
$

 
$
351,807

Earnings Per Share (Tables)
Computation of basic and diluted earnings per share
Basic earnings per share data is computed based on the weighted average number of shares of common stock outstanding during the periods. Diluted EPS data is computed based on the weighted average number of shares of common stock outstanding, including all potentially issuable shares of common stock. Diluted EPS for the year ended December 31, 2015 excludes the impact to income and the number of shares outstanding from the conversion of the 7.00% Convertible Senior Notes, because to do so would be antidilutive.
Earnings Per Share
 
 
 
 
 
 
For the Years Ended December 31,
 
2015
 
2014
 
2013
Net income attributable to CorEnergy stockholders
$
12,319,911

 
$
7,013,856

 
$
4,502,339

Less: preferred dividend requirements
3,848,828

 

 

Net income attributable to common stockholders
$
8,471,083

 
$
7,013,856

 
$
4,502,339

Weighted average shares - basic
10,685,892

 
6,605,715

 
4,829,879

Basic earnings per share
$
0.79

 
$
1.06

 
$
0.93

 
 
 
 
 
 
Net income attributable to common stockholders (from above)
$
8,471,083

 
$
7,013,856

 
$
4,502,339

Add: After tax effect of convertible interest

 

 

Income attributable for dilutive securities
$
8,471,083

 
$
7,013,856

 
$
4,502,339

Weighted average shares - diluted
10,685,892

 
6,605,715

 
4,829,879

Diluted earnings per share
$
0.79

 
$
1.06

 
$
0.93

QUARTERLY FINANCIAL DATA (Unaudited) (Tables)
Schedule of Quarterly Financial Information
 
 
For the Fiscal 2015 Quarters Ended
 
 
March 31
 
June 30
 
September 30
 
December 31
Revenue
 
 
 
 
 
 
 
 
Lease revenue
 
$
7,336,101

 
$
6,799,879

 
$
16,966,056

 
$
16,984,036

Sales revenue
 
2,341,655

 
1,665,908

 
1,434,694

 
1,717,787

Financing revenue
 
660,392

 
668,904

 
182,604

 
185,650

Transportation revenue
 
3,649,735

 
3,546,979

 
3,557,096

 
3,591,459

Total Revenue
 
13,987,883

 
12,681,670

 
22,140,450

 
22,478,932

Expenses
 
 
 
 
 
 
 
 
Cost of sales (excluding depreciation expense)
 
1,248,330

 
569,958

 
382,851

 
618,073

Depreciation, amortization and ARO accretion expense
 
4,048,832

 
3,495,986

 
5,836,665

 
5,385,068

Provision for loan losses
 

 

 
7,951,137

 
5,833,000

Transportation, maintenance and general and administrative
 
991,608

 
1,076,352

 
856,050

 
935,775

Operating expenses
 
206,360

 
195,673

 
264,812

 
83,095

General and administrative
 
2,568,519

 
1,905,329

 
2,837,762

 
2,434,094

Total Expenses
 
9,063,649

 
7,243,298

 
18,129,277

 
15,289,105

Income (Loss) from Operations, before income taxes
 
$
4,924,234

 
$
5,438,372

 
$
4,011,173

 
$
7,189,827

Other Income (Expense)
 
 
 
 
 
 
 
 
Net distributions and dividend income
 
$
590,408

 
$
193,410

 
$
241,563

 
$
245,374

Net realized and unrealized gain (loss) on other equity securities
 
449,798

 
43,385

 
(1,408,751
)
 
(148,045
)
Interest expense
 
(1,147,272
)
 
(1,126,888
)
 
(3,854,913
)
 
(3,652,111
)
Total Other Income (Expense)
 
(107,066
)
 
(890,093
)
 
(5,022,101
)
 
(3,554,782
)
Income (Loss) before income taxes
 
4,817,168

 
4,548,279

 
(1,010,928
)
 
3,635,045

Taxes
 
 
 
 
 
 
 
 
Current tax expense
 
435,756

 
104,479

 
105,020

 
276,755

Deferred tax expense (benefit)
 
(115,391
)
 
(153,342
)
 
(1,953,973
)
 
(646,857
)
Income tax expense (benefit), net
 
320,365

 
(48,863
)
 
(1,848,953
)
 
(370,102
)
Net Income
 
4,496,803

 
4,597,142

 
838,025

 
4,005,147

Less: Net Income attributable to non-controlling interest
 
410,175

 
412,004

 
410,806

 
384,221

Net Income attributable to CorEnergy Stockholders
 
$
4,086,628

 
$
4,185,138

 
$
427,219

 
$
3,620,926

Preferred dividend requirements
 
737,500

 
1,037,109

 
1,037,109

 
1,037,110

Net Income (Loss) attributable to Common Stockholders
 
$
3,349,128

 
$
3,148,029

 
$
(609,890
)
 
$
2,583,816

 
 
 
 
 
 
 
 
 
Net Income
 
$
4,496,803

 
$
4,597,142

 
$
838,025

 
$
4,005,147

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
Changes in fair value of qualifying hedges attributable to CorEnergy stockholders
 
(276,107
)
 
18,202

 
(223,176
)
 
218,576

Changes in fair value of qualifying hedges attributable to non-controlling interest
 
(64,555
)
 
4,256

 
(52,180
)
 
51,104

Net Change in Other Comprehensive Income (Loss)
 
$
(340,662
)
 
$
22,458

 
$
(275,356
)
 
$
269,680

Total Comprehensive Income
 
4,156,141

 
4,619,600

 
562,669

 
4,274,827

Less: Comprehensive income attributable to non-controlling interest
 
345,620

 
416,260

 
358,626

 
435,325

Comprehensive Income attributable to CorEnergy Stockholders
 
$
3,810,521

 
$
4,203,340

 
$
204,043

 
$
3,839,502

Earnings (Loss) Per Common Share:
 
 
 
 
 
 
 
 
Basic
 
$
0.36

 
$
0.33

 
$
(0.05
)
 
$
0.22

Diluted
 
$
0.36

 
$
0.33

 
$
(0.05
)
 
$
0.22


 
 
For the Fiscal 2014 Quarters Ended
 
 
March 31
 
June 30
 
September 30
 
December 31
Revenue
 
 
 
 
 
 
 
 
Lease revenue
 
$
6,762,408

 
$
7,065,677

 
$
7,191,187

 
$
7,204,493

Sales revenue
 
3,259,530

 
1,813,607

 
1,741,209

 
2,894,556

Financing revenue
 
25,619

 
139,728

 
413,482

 
498,984

Transportation revenue
 

 

 

 
1,298,093

Total Revenue
 
10,047,557

 
9,019,012

 
9,345,878

 
11,896,126

Expenses
 
 
 
 
 
 
 
 
Cost of sales (excluding depreciation expense)
 
2,707,358

 
1,384,998

 
1,284,711

 
1,914,901

Depreciation, amortization and ARO accretion expense
 
3,146,978

 
3,220,253

 
3,252,604

 
3,575,420

Provision for loan losses
 

 

 

 

Transportation, maintenance and general and administrative
 

 

 

 
458,872

Operating expenses
 
222,741

 
213,533

 
210,009

 
194,627

General and administrative
 
1,432,955

 
1,334,960

 
1,841,493

 
3,263,345

Total Expenses
 
7,510,032

 
6,153,744

 
6,588,817

 
9,407,165

Operating Income
 
$
2,537,525

 
$
2,865,268

 
$
2,757,061

 
$
2,488,961

Other Income (Expense)
 
 
 
 
 
 
 
 
Net distributions and dividend income
 
$
5,056

 
$
5,988

 
$
1,688,830

 
$
136,909

Net realized and unrealized gain (loss) on other equity securities
 
1,294,182

 
2,084,026

 
(865,470
)
 
(2,978,764
)
Interest expense
 
(826,976
)
 
(819,360
)
 
(977,635
)
 
(1,051,151
)
Total Other Income (Expense)
 
472,262

 
1,270,654

 
(154,275
)
 
(3,893,006
)
Income (Loss) before income taxes
 
3,009,787

 
4,135,922

 
2,602,786

 
(1,404,045
)
Taxes
 
 
 
 
 
 
 
 
Current tax expense
 
854,075

 

 
486,054

 
2,503,808

Deferred tax expense (benefit)
 
(340,562
)
 
742,879

 
(161,171
)
 
(4,310,646
)
Income tax expense (benefit), net
 
513,513

 
742,879

 
324,883

 
(1,806,838
)
Net Income
 
2,496,274

 
3,393,043

 
2,277,903

 
402,793

Less: Net Income attributable to non-controlling interest
 
391,114

 
387,135

 
389,485

 
388,423

Net Income attributable to CorEnergy Stockholders
 
$
2,105,160

 
$
3,005,908

 
$
1,888,418

 
$
14,370

Preferred dividend requirements
 

 

 

 

Net Income (Loss) attributable to Common Stockholders
 
$
2,105,160

 
$
3,005,908

 
$
1,888,418

 
$
14,370

 
 
 
 
 
 
 
 
 
Net Income
 
$
2,496,274

 
$
3,393,043

 
$
2,277,903

 
$
402,793

Other comprehensive income (loss):
 


 


 


 


Changes in fair value of qualifying hedges attributable to CorEnergy stockholders
 
(70,620
)
 
(270,838
)
 
214,602

 
(197,245
)
Changes in fair value of qualifying hedges attributable to non-controlling interest
 
(16,511
)
 
(63,324
)
 
50,175

 
(46,120
)
Net Change in Other Comprehensive Income (Loss)
 
$
(87,131
)
 
$
(334,162
)
 
$
264,777

 
$
(243,365
)
Total Comprehensive Income
 
2,409,143

 
3,058,881

 
2,542,680

 
159,428

Less: Comprehensive income attributable to non-controlling interest
 
374,603

 
323,811

 
439,660

 
342,303

Comprehensive Income attributable to CorEnergy Stockholders
 
$
2,034,540

 
$
2,735,070

 
$
2,103,020

 
$
(182,875
)
Earnings (Loss) Per Common Share:
 


 


 


 


Basic
 
$
0.35

 
$
0.48

 
$
0.30

 
$
0.00

Diluted
 
$
0.35

 
$
0.48

 
$
0.30

 
$
0.00

Significant Accounting Policies (Details Textual) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Accounting Policies [Abstract]
 
 
 
Reserve for financing notes and related accrued interest receivable
$ 13,784,137 
$ 0 
 
Credit adjusted risk free rate
5.58% 
 
 
Federal statutory income tax rate
35.00% 
35.00% 
35.00% 
Federal minimum alternative minimum tax rate
2,000.00% 
 
 
Leased Properties - Grand Isle Gathering System (Details) (USD $)
0 Months Ended 12 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended
Jun. 23, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Jun. 23, 2015
Jun. 23, 2015
Senior Credit Facility [Member]
Jun. 23, 2015
Grand Isle Gathering System [Member]
mi
well
acre
oil_field
tanks
Jun. 23, 2015
Grand Isle Gathering System [Member]
well
acre
oil_field
tanks
Mar. 31, 2015
Grand Isle Gathering System [Member]
bbl
Jun. 23, 2015
Grand Isle Gathering System [Member]
Energy XXI GIGS Services, LLC [Member]
oil_field
Jun. 23, 2015
Grand Isle Gathering System [Member]
ExxonMobil [Member]
oil_field
Dec. 31, 2015
Assets Leased to Others [Member]
Grand Isle Gathering System [Member]
Dec. 31, 2014
Assets Leased to Others [Member]
Grand Isle Gathering System [Member]
Jun. 23, 2015
Grand Isle Gathering System [Member]
Grand Isle Corridor, LP [Member]
Jun. 23, 2015
Grand Isle Gathering System [Member]
Grand Isle Corridor, LP [Member]
Sale Leaseback Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of common stock offered
 
11,939,697 
9,321,010 
 
2,587,500 
 
 
 
 
 
 
 
 
 
 
Net offering proceeds on common stock
$ 73,300,000 
$ 73,184,679 
$ 141,797,913 
$ (523,094)
 
 
 
 
 
 
 
 
 
 
 
Net proceeds of convertible debt
111,300,000 
111,262,500 
 
 
 
 
 
 
 
 
 
 
 
Advances on revolving line of credit
 
45,392,332 
34,676,948 
221,332 
 
42,000,000 
 
 
 
 
 
 
 
 
 
Cash portion of consideration
 
 
 
 
 
 
 
 
 
 
 
 
 
245,000,000 
 
Liabilities assumed in acquisition
 
 
 
 
 
 
 
 
 
 
 
 
 
12,500,000 
 
Asset acquisition costs
 
 
 
 
 
 
 
 
 
 
 
 
 
1,900,000 
 
Deferred leasing costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
336,000 
Total consideration
 
 
 
 
 
 
 
 
 
 
 
 
 
259,800,000 
 
Length of offshore pipeline
 
 
 
 
 
 
153 
 
 
 
 
 
 
 
 
Number of producing oil fields
 
 
 
 
 
 
 
 
 
 
 
 
Number of acres in the onshore terminal and saltwater disposal system
 
 
 
 
 
 
 
16 
 
 
 
 
 
 
 
Number of storage tanks
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of injection wells
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume of fluid GIGS transported
 
 
 
 
 
 
 
 
60,000 
 
 
 
 
 
 
Volume of oil GIGS transported
 
 
 
 
 
 
 
 
18,000 
 
 
 
 
 
 
Volume of water GIGS transported
 
 
 
 
 
 
 
 
42,000 
 
 
 
 
 
 
Total capacity GIGS can transport, volume
 
 
 
 
 
 
 
 
120,000 
 
 
 
 
 
 
Estimated useful lives of assets
 
 
 
 
 
 
30 years 
 
 
 
 
 
 
 
 
Depreciation
 
 
 
 
 
 
 
 
 
 
 
$ 4,300,000 
$ 0 
 
 
Leased Properties - Pinedale LGS (Details) (USD $)
1 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2012
Pinedale Liquids Gathering System [Member]
Dec. 31, 2015
Pinedale Liquids Gathering System [Member]
mi
facility
Dec. 20, 2012
Key Bank [Member]
Secured Debt [Member]
Pinedale Liquids Gathering System [Member]
Dec. 31, 2015
Assets Leased to Others [Member]
Pinedale Liquids Gathering System [Member]
Dec. 31, 2014
Assets Leased to Others [Member]
Pinedale Liquids Gathering System [Member]
Dec. 31, 2013
Assets Leased to Others [Member]
Pinedale Liquids Gathering System [Member]
Sale Leaseback Transaction [Line Items]
 
 
 
 
 
 
 
 
Length of transmission lines physical assets
 
 
 
150 
 
 
 
 
Number of Above-ground Central Gathering Facilities
 
 
 
 
 
 
 
Estimated useful lives of assets
 
 
 
26 years 
 
 
 
 
Depreciation
 
 
 
 
 
$ 8,900,000 
$ 8,900,000 
$ 8,900,000 
Ownership percentage by noncontrolling owners
 
 
18.95% 
 
 
 
 
 
Non controlling economic interest pinedale GP
 
 
81.05% 
 
 
 
 
 
Long-term debt
$ 151,243,153 
$ 63,532,000 
 
 
$ 70,000,000 
 
 
 
Leased Properties - Portland Terminal Facility (Details) (USD $)
12 Months Ended
Dec. 31, 2015
tanks
bbl
acre
Dec. 31, 2014
Dec. 31, 2013
Portland Terminal Facility [Member]
 
 
 
Sale Leaseback Transaction [Line Items]
 
 
 
Acres owned
39 
 
 
Number Of Tanks
84 
 
 
Crude oil and petroleum product storage capacity
1,500,000 
 
 
Estimated useful lives of assets
30 years 
 
 
Depreciation
$ 1,200,000 
$ 1,400,000 
$ 0 
Portland Terminal Facility [Member]
 
 
 
Sale Leaseback Transaction [Line Items]
 
 
 
Construction and Development Costs
$ 10,000,000 
 
 
- Eastern Interconnect Project (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Eastern Interconnect Project [Member]
kV
mi
Dec. 31, 2014
Eastern Interconnect Project [Member]
Dec. 31, 2013
Eastern Interconnect Project [Member]
Dec. 31, 2015
Public Service Company of New Mexico [Member]
Oct. 31, 2012
Public Service Company of New Mexico [Member]
Dec. 31, 2015
Future Expectations [Member]
Public Service Company of New Mexico [Member]
Sale Leaseback Transaction [Line Items]
 
 
 
 
 
 
Business Acquisition, Percentage of Voting Interests Acquired
 
 
 
 
40.00% 
 
Length of transmission lines physical assets
216 
 
 
 
 
 
Power of transmission lines physical assets
345 
 
 
 
 
 
Estimated useful lives of assets
20 years 
 
 
 
 
 
Amount of depreciation of leased property
$ 570,000 
$ 2,300,000 
$ 2,300,000 
 
 
 
Lease Expiration Date
 
 
 
Apr. 01, 2015 
 
 
Fair Value of Lease Option Under Agreement
 
 
 
 
 
$ 7,700,000 
Leased Properties - Property Held for Sale (Details) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Leases [Abstract]
 
 
Leased asset
$ 0 
$ 14,126,849 
Less: accumulated depreciation
(5,878,933)
Net leased asset held for sale
$ 0 
$ 8,247,916 
- Significant Leases (Details)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Pinedale Liquids Gathering System [Member]
 
 
 
Operating Leased Assets [Line Items]
 
 
 
Percentage of total leased properties
40.00% 
79.20% 
 
Percentage of leased property revenue
42.90% 
71.90% 
88.70% 
Grand Isle Gathering System [Member]
 
 
 
Operating Leased Assets [Line Items]
 
 
 
Percentage of total leased properties
50.10% 
0.00% 
 
Percentage of leased property revenue
42.30% 
0.00% 
0.00% 
Portland Terminal Facility [Member]
 
 
 
Operating Leased Assets [Line Items]
 
 
 
Percentage of total leased properties
9.60% 
17.20% 
 
Percentage of leased property revenue
13.30% 
19.00% 
0.00% 
Public Service Company of New Mexico [Member]
 
 
 
Operating Leased Assets [Line Items]
 
 
 
Percentage of total leased properties
0.00% 
3.10% 
 
Percentage of leased property revenue
1.30% 
9.10% 
11.30% 
Leases - Narrative (Details) (USD $)
3 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 0 Months Ended 3 Months Ended 12 Months Ended 0 Months Ended
Dec. 31, 2015
lease
payment
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
lease
payment
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2015
Public Service Company of New Mexico [Member]
customer
Oct. 31, 2012
Public Service Company of New Mexico [Member]
Dec. 31, 2012
Pinedale Liquids Gathering System [Member]
Dec. 31, 2015
Pinedale Liquids Gathering System [Member]
Dec. 31, 2014
Pinedale Liquids Gathering System [Member]
Dec. 31, 2013
Pinedale Liquids Gathering System [Member]
Dec. 31, 2015
Pinedale Liquids Gathering System [Member]
Real Property [Member]
Dec. 31, 2015
Pinedale Liquids Gathering System [Member]
Land Rights [Member]
Dec. 20, 2012
Minimum [Member]
Pinedale Liquids Gathering System [Member]
Dec. 20, 2012
Maximum [Member]
Pinedale Liquids Gathering System [Member]
Dec. 31, 2015
Portland Terminal Facility [Member]
Dec. 31, 2015
Portland Terminal Facility [Member]
bbl
Dec. 31, 2014
Portland Terminal Facility [Member]
Dec. 31, 2013
Portland Terminal Facility [Member]
Dec. 31, 2015
Future Expectations [Member]
Public Service Company of New Mexico [Member]
Dec. 31, 2014
Lease Revenue [Member]
Dec. 31, 2015
Lease Revenue [Member]
Dec. 31, 2014
Lease Revenue [Member]
Dec. 31, 2013
Lease Revenue [Member]
Jun. 30, 2015
Property Subject to Operating Lease [Member]
Grand Isle Gathering System [Member]
term
Dec. 31, 2015
Property Subject to Operating Lease [Member]
Grand Isle Gathering System [Member]
Dec. 31, 2015
Property Subject to Operating Lease [Member]
Grand Isle Gathering System [Member]
Dec. 31, 2014
Property Subject to Operating Lease [Member]
Grand Isle Gathering System [Member]
Dec. 31, 2013
Property Subject to Operating Lease [Member]
Grand Isle Gathering System [Member]
Jun. 30, 2015
Energy XXI GIGS Services, LLC [Member]
Property Subject to Operating Lease [Member]
Grand Isle Gathering System [Member]
Operating Leased Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Significant Leases
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Settlement date
 
 
 
 
 
 
 
 
 
 
 
 
 
Dec. 20, 2012 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Term of contract
 
 
 
 
 
 
 
 
 
 
 
 
 
15 years 
 
 
 
 
 
 
 
 
15 years 
 
 
 
 
 
 
 
11 years 
 
 
 
 
 
Number of additional renewal terms
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Variable rent payment, daily volume threshold
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12,500 
 
 
 
 
 
 
 
 
 
 
 
 
 
Variable rent payment, maximum percent of total rent
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30.00% 
 
 
 
 
 
 
 
39.00% 
 
 
 
 
 
Amount monthly rent is increased to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 513,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional Expected Project Costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,000,000 
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal term
 
 
 
 
 
 
 
 
 
 
 
 
 
5 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9 years 
 
 
 
 
 
Expected remaining useful life of asset
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
75.00% 
 
 
 
 
 
Minimum monthly rental payments during year one
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,600,000 
Minimum monthly rental payments during year seven
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,200,000 
Minimum monthly rental payments during year eleven
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,500,000 
Operating Lease, Annual Rent Payment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20,000,000 
27,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Rent Escalator
 
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rent, Quarterly Increase, Based on CPI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,200,000 
85,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred lease costs, net of accumulated amortization of $139,983 and $124,641
 
 
 
 
 
 
 
 
 
 
 
 
 
 
734,000 
796,000 
857,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
321,000 
321,000 
 
 
Deferred Costs Amortization Period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11 years 
 
 
 
Amortization expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
61,000 
61,000 
61,000 
 
 
 
 
 
 
 
 
 
 
73,000 
292,000 
292,000 
 
15,000 
 
 
Business Combination, Contingent Consideration, Asset, Noncurrent
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
122,300,000 
105,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Estimated useful lives of assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
26 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30 years 
 
 
 
 
 
Depreciation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,600,000 
 
 
 
 
 
Increase in Rent from Construction
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
946,000 
 
241,000 
 
 
 
 
 
 
 
 
 
 
 
Number of Customers Served
 
 
 
 
 
 
 
 
 
 
 
500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales Lease Back Intangible Asset Amortized
 
 
 
 
 
 
 
 
 
 
 
1,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Percentage of Voting Interests Acquired
 
 
 
 
 
 
 
 
 
 
 
 
40.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lease Expiration Date
 
 
 
 
 
 
 
 
 
 
 
Apr. 01, 2015 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value of Lease Option Under Agreement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,700,000 
 
 
 
 
 
 
 
 
 
 
Lease Rental Receipt Semi Annually
 
 
 
 
 
 
 
 
 
 
 
1,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Remaining Lease Payments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$ 22,478,932 
$ 22,140,450 
$ 12,681,670 
$ 13,987,883 
$ 11,896,126 
$ 9,345,878 
$ 9,019,012 
$ 10,047,557 
$ 71,288,935 
$ 40,308,573 
$ 31,286,020 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2,553,000 
$ 638,000 
 
$ 2,553,000 
 
 
 
 
 
 
- Future Miniumum Rental Receipts (Details) (USD $)
Dec. 31, 2015
Leases [Abstract]
 
2016
$ 59,607,929 
2017
60,931,762 
2018
61,139,762 
2019
63,468,195 
2020
70,629,654 
Thereafter
451,794,133 
Total
$ 767,571,435 
Mogas Acquisition (Details) (USD $)
0 Months Ended 12 Months Ended 0 Months Ended
Jun. 23, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Nov. 24, 2014
Mogas [Member]
business
customer
mi
Point
acre
Nov. 17, 2014
Mogas [Member]
Nov. 24, 2014
Mogas [Member]
mi
Point
acre
Nov. 17, 2014
Mogas [Member]
Nov. 24, 2014
Term Note [Member]
Mogas [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
Number of Businesses Acquired
 
 
 
 
 
 
 
 
Length of pipeline, in miles
 
 
 
 
 
 
263 
 
 
Number of Firm Transportation Customers
 
 
 
 
 
 
 
 
Number of receipt points
 
 
 
 
 
 
 
 
Number od delivery points
 
 
 
 
 
 
22 
 
 
Acres owned
 
 
 
 
 
 
10.28 
 
 
Consideration transferred
 
 
 
 
$ 125,000,000 
 
 
 
 
Shares issued during period
 
 
 
 
 
2,990,000 
 
 
 
Net offering proceeds
 
73,257,364 
141,725,228 
 
 
102,000,000 
 
 
 
Share price
 
 
 
 
 
 
 
$ 6.80 
 
Net offering proceeds on Series A preferred stock
73,300,000 
73,184,679 
141,797,913 
(523,094)
 
96,000,000 
 
 
 
Debt amount
 
 
 
 
 
 
32,000,000 
 
90,000,000 
Proceeds from debt
 
 
 
 
29,000,000 
 
 
 
 
Deferred finance costs
 
 
 
 
 
 
3,000,000 
 
 
Cash in escrow
 
 
 
 
 
 
 
 
$ 7,000,000 
Mogas Acquisition - Assets and Liabilities Assumed (Details) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Nov. 24, 2014
Mogas [Member]
Nov. 24, 2014
Land [Member]
Mogas [Member]
Nov. 24, 2014
Building Improvements [Member]
Mogas [Member]
Nov. 24, 2014
Natural Gas Pipeline [Member]
Mogas [Member]
Nov. 24, 2014
Vehicles and Trailers [Member]
Mogas [Member]
Nov. 24, 2014
Office Equipment [Member]
Mogas [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
Leased Property:
 
 
$ 1,398,000 
$ 210,000 
$ 1,188,000 
 
 
 
Property and Equipment:
 
 
119,503,132 
580,000 
 
119,081,732 
378,000 
43,400 
Goodwill
1,718,868 
1,718,868 
1,718,868 
 
 
 
 
 
Cash and cash equivalents
 
 
4,098,274 
 
 
 
 
 
Accounts receivable
 
 
1,357,905 
 
 
 
 
 
Prepaid assets
 
 
125,485 
 
 
 
 
 
Accounts payable and other accrued liabilities
 
 
(3,781,664)
 
 
 
 
 
Net assets acquired
 
 
$ 125,000,000 
 
 
 
 
 
Mogas Acquisition - Proforma Operations (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Less: Net Income (Loss) attributable to non-controlling interest
$ 384,221 
$ 410,806 
$ 412,004 
$ 410,175 
$ 388,423 
$ 389,485 
$ 387,135 
$ 391,114 
$ 1,617,206 
$ 1,556,157 
$ 1,466,767 
Mogas [Member]
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total Revenue
 
 
 
 
 
 
 
 
 
53,315,951 
42,551,314 
Total Expenses
 
 
 
 
 
 
 
 
 
35,742,957 
33,429,175 
Operating Income
 
 
 
 
 
 
 
 
 
17,572,994 
9,122,139 
Other Income (Expense)
 
 
 
 
 
 
 
 
 
(3,997,916)
1,137,606 
Tax Benefit (Expense)
 
 
 
 
 
 
 
 
 
641,304 
(734,461)
Net Income
 
 
 
 
 
 
 
 
 
14,216,382 
9,525,284 
Net Income attributable to CORR Stockholders
 
 
 
 
 
 
 
 
 
$ 12,660,225 
$ 8,058,517 
Basic and Diluted
 
 
 
 
 
 
 
 
 
$ 1.37 
$ 1.03 
Basic and Diluted
 
 
 
 
 
 
 
 
 
9,236,345 
7,819,879 
Financing Notes Receivable (Details) (USD $)
3 Months Ended 12 Months Ended 0 Months Ended 1 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended 1 Months Ended 5 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Jul. 23, 2014
Long-term Debt [Member]
Black Bison Water Services LLC [Member]
Mar. 13, 2014
Line of Credit [Member]
Mar. 13, 2014
Line of Credit [Member]
Black Bison Water Services LLC [Member]
Jul. 23, 2014
Line of Credit [Member]
Black Bison Water Services LLC [Member]
Dec. 31, 2014
Line of Credit [Member]
REIT Loan [Member]
Dec. 31, 2015
Line of Credit [Member]
REIT Loan [Member]
Dec. 31, 2014
Line of Credit [Member]
TRS Loan [Member]
Dec. 31, 2015
Line of Credit [Member]
TRS Loan [Member]
Dec. 31, 2015
Subsidiaries [Member]
Long-term Debt [Member]
Jul. 23, 2014
Subsidiaries [Member]
Long-term Debt [Member]
Jul. 23, 2014
Subsidiaries [Member]
Long-term Debt [Member]
Black Bison Water Services LLC [Member]
Mar. 13, 2014
Warrant [Member]
Jul. 31, 2014
Warrant [Member]
Dec. 31, 2015
Warrant [Member]
Dec. 31, 2015
Loans Agreement [Member]
Subsidiaries [Member]
Dec. 31, 2015
Loans Agreement [Member]
Subsidiaries [Member]
Jun. 30, 2015
Loans Agreement [Member]
Subsidiaries [Member]
Dec. 31, 2015
Black Bison and Intermediate Holdings [Member]
Dec. 31, 2014
Black Bison and Intermediate Holdings [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advances on revolving line of credit
 
 
 
 
 
 
 
 
$ 45,392,332 
$ 34,676,948 
$ 221,332 
 
$ 4,000,000 
$ 4,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
 
12,000,000 
 
11,500,000 
15,300,000 
 
 
 
 
 
1,000,000 
3,300,000 
 
 
 
 
 
 
 
 
Debt Instrument, Interest Rate, Stated Percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
12.00% 
 
 
12.00% 
 
13.00% 
 
 
 
 
 
 
 
 
 
 
 
Basis spread on variable rate
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
2.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Variable Rent Cap, Percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
19.00% 
 
19.00% 
 
20.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Class of Warrant or Right, Right To Purchase Percentage Of Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15.00% 
 
 
 
 
 
 
 
Proceeds for Purchase of Shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
34,000 
51,000 
 
 
 
 
 
 
Class of Warrants or Rights, Capitalized Costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13,000 
25,000 
 
 
 
 
 
 
Payments for Acquisition of Warrant
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
123,000 
 
 
 
 
 
 
Equity, Fair Value Disclosure
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Temporarily reduced interest payments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
75,000 
50,000 
 
 
 
Provision for loan loss
5,833,000 
7,951,137 
13,784,137 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred origination costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
14,000 
14,000 
 
 
 
Interest accrued
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
355,000 
 
 
Net investment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,000,000 
15,900,000 
Class of Warrant or Right, Exercise Price of Warrants or Rights
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 3.16 
 
 
 
 
 
 
 
Class of Warrant or Right, Value of Percent of Capital Contributed Increase Per Annum
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12.00% 
 
 
 
 
 
 
 
Class of Warrant or Right, Value of Percent of Capital Contributed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
18.72% 
 
 
 
 
 
 
Debt Instrument, Prepayment, Principal
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 100,000 
 
 
 
 
 
 
 
 
 
 
Variable Interest Entities (Details) (Black Bison and Intermediate Holdings [Member], USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Black Bison and Intermediate Holdings [Member]
 
 
Variable Interest Entity [Line Items]
 
 
Net investment
$ 2.0 
$ 15.9 
Income Taxes (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Operating Loss Carryforwards [Line Items]
 
 
 
Net operating loss of taxable reit subsidiary
$ 500,000 
 
 
Blended state tax rate
2.82% 
3.92% 
3.11% 
Deferred Tax Assets:
 
 
 
Net operating loss carryforwards
543,116 
679,692 
 
Net unrealized loss on investment securities
251,539 
 
Cost recovery of leased and fixed assets
1,042,207 
 
Loan Loss Provision
1,257,436 
 
Other loss carryforwards
1,833,240 
 
Sub-total
3,885,331 
1,721,899 
 
Deferred Tax Liabilities:
 
 
 
Basis reduction of investment in partnerships
(2,159,058)
(2,842,332)
 
Net unrealized gain on investment securities
(142,154)
 
Cost recovery of leased and fixed assets
(119,297)
 
Sub-total
(2,278,355)
(2,984,486)
 
Total net deferred tax asset (liability)
1,606,976 
(1,262,587)
 
Mowood LLC [Member]
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
Blended state tax rate
5.00% 
5.00% 
5.00% 
Subsidiaries [Member]
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
Net operating loss of taxable reit subsidiary
$ 1,400,000 
$ 894,000 
 
Income Taxes (Details 1) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Tax Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Blended state tax rate
 
 
 
 
 
 
 
 
2.82% 
3.92% 
3.11% 
Total income tax expense (benefit) differs from the amount computed by applying the federal statutory income tax rates net investment income and net realized and unrealized gains on investments
 
 
 
 
 
 
 
 
 
 
 
Application of statutory income tax rate
 
 
 
 
 
 
 
 
$ 3,630,325 
$ 2,375,903 
$ 2,608,151 
State income taxes, net of federal tax (benefit)
 
 
 
 
 
 
 
 
(134,597)
(47,731)
273,174 
Federal Tax Attributable to Income of Real Estate Investment Trust
 
 
 
 
 
 
 
 
(5,189,849)
(2,607,207)
(927,254)
Other
 
 
 
 
 
 
 
 
(253,432)
53,472 
995,447 
Income tax expense (benefit), net
$ (370,102)
$ (1,848,953)
$ (48,863)
$ 320,365 
$ (1,806,838)
$ 324,883 
$ 742,879 
$ 513,513 
$ (1,947,553)
$ (225,563)
$ 2,949,518 
Income Taxes (Details 2) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Current tax expense
 
 
 
 
 
 
 
 
 
 
 
Federal
 
 
 
 
 
 
 
 
$ 781,941 
$ 3,456,858 
$ (7,139)
State (net of federal tax benefit)
 
 
 
 
 
 
 
 
140,069 
387,079 
20,613 
Total current tax expense
276,755 
105,020 
104,479 
435,756 
2,503,808 
486,054 
854,075 
922,010 
3,843,937 
13,474 
Deferred tax expense (benefit)
 
 
 
 
 
 
 
 
 
 
 
Federal
 
 
 
 
 
 
 
 
(2,594,897)
(3,634,689)
2,683,483 
State (net of federal tax benefit)
 
 
 
 
 
 
 
 
(274,666)
(434,811)
252,561 
Total deferred tax expense (benefit)
(646,857)
(1,953,973)
(153,342)
(115,391)
(4,310,646)
(161,171)
742,879 
(340,562)
(2,869,563)
(4,069,500)
2,936,044 
Income tax expense (benefit), net
$ (370,102)
$ (1,848,953)
$ (48,863)
$ 320,365 
$ (1,806,838)
$ 324,883 
$ 742,879 
$ 513,513 
$ (1,947,553)
$ (225,563)
$ 2,949,518 
Income Taxes (Details 3) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Aggregate cost of securities for federal income tax purposes and securities with unrealized appreciation and depreciation
 
 
Aggregate cost for federal income tax purposes
$ 4,750,252 
$ 4,218,986 
Gross unrealized appreciation
5,133,908 
7,436,696 
Gross unrealized depreciation
(97,500)
 
Net unrealized appreciation
$ 5,036,408 
$ 7,436,696 
Income Taxes (Details Textual) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Taxes (Textual) [Abstract]
 
 
 
Federal statutory income tax rate
35.00% 
35.00% 
35.00% 
Blended state tax rate
2.82% 
3.92% 
3.11% 
Net operating loss for federal income tax purposes
$ 500 
 
 
Net Operating Loss Carry Forward Period
20 years 
 
 
NOL expiring in 2033 if not utilized
90 
 
 
NOL expiring in 2034 if not utilized
804 
 
 
NOL expiring in 2035 if not utilized
478 
 
 
Mowood LLC [Member]
 
 
 
Income Taxes (Textual) [Abstract]
 
 
 
Blended state tax rate
5.00% 
5.00% 
5.00% 
Subsidiaries [Member]
 
 
 
Income Taxes (Textual) [Abstract]
 
 
 
Net operating loss for federal income tax purposes
$ 1,400 
$ 894 
 
Income Taxes - Common Stock Information (Details)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 2.75 
$ 2.57 
$ 1.875 
Dividend Declared [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 2.7500 
$ 2.5700 
$ 1.8750 
Dividends declared per share, preferred stock (in dollars per share)
$ 1.5569 
 
 
Ordinary Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 1.9800 
$ 1.9080 
$ 0.8085 
Dividends declared per share, preferred stock (in dollars per share)
$ 1.5569 
 
 
Qualified Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.0534 
$ 0.9240 
$ 0.8085 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.0419 
 
 
Capital Gain Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.0000 
$ 0.0000 
$ 0.0000 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.0000 
 
 
Nondividend Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.7700 
$ 0.6620 
$ 1.0665 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.0000 
 
 
Installment One [Member] |
Dividend Declared [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.6500 
$ 0.6250 
$ 0.6250 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.6351 
 
 
Installment One [Member] |
Ordinary Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.4680 
$ 0.4640 
$ 0.6250 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.6351 
 
 
Installment One [Member] |
Qualified Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.0126 
$ 0.2250 
$ 0.6250 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.0171 
 
 
Installment One [Member] |
Capital Gain Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.0000 
$ 0.0000 
$ 0.0000 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.0000 
 
 
Installment One [Member] |
Nondividend Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.1820 
$ 0.1610 
$ 0.0000 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.0000 
 
 
Installment Two [Member] |
Dividend Declared [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.6750 
$ 0.6450 
$ 0.6250 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.4609 
 
 
Installment Two [Member] |
Ordinary Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.4860 
$ 0.4790 
$ 0.1835 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.4609 
 
 
Installment Two [Member] |
Qualified Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.0131 
$ 0.2320 
$ 0.1835 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.0124 
 
 
Installment Two [Member] |
Capital Gain Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.0000 
$ 0.0000 
$ 0.0000 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.0000 
 
 
Installment Two [Member] |
Nondividend Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.1890 
$ 0.1660 
$ 0.4415 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.0000 
 
 
Installment Three [Member] |
Dividend Declared [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.6750 
$ 0.6500 
 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.4609 
 
 
Installment Three [Member] |
Ordinary Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.4860 
$ 0.4825 
 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.4609 
 
 
Installment Three [Member] |
Qualified Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.0131 
$ 0.2335 
 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.0124 
 
 
Installment Three [Member] |
Capital Gain Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.0000 
$ 0.0000 
 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.0000 
 
 
Installment Three [Member] |
Nondividend Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.1890 
$ 0.1675 
 
Dividends declared per share, preferred stock (in dollars per share)
$ 0.0000 
 
 
Installment Four [Member] |
Dividend Declared [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.7500 
$ 0.6500 
$ 0.6250 
Installment Four [Member] |
Ordinary Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.5400 
$ 0.4825 
$ 0.0000 
Installment Four [Member] |
Qualified Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.0146 
$ 0.2335 
$ 0.0000 
Installment Four [Member] |
Capital Gain Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.0000 
$ 0.0000 
$ 0.0000 
Installment Four [Member] |
Nondividend Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Dividends declared per share, common stock (in dollars per share)
$ 0.2100 
$ 0.1675 
$ 0.6250 
Common Stock [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Ordinary dividend income percentage
72.00% 
 
 
Cash distribution percentage treated as return of capital
28.00% 
 
 
Qualified dividend income percentage
3.00% 
 
 
Preferred Stock [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Ordinary dividend income percentage
100.00% 
 
 
Cash distribution percentage treated as return of capital
0.00% 
 
 
Qualified dividend income percentage
3.00% 
 
 
Property and Equipment (Details) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Component of property and equipment
 
 
Gross property and equipment
$ 125,578,966 
$ 125,443,142 
Less accumulated depreciation
(5,948,988)
(2,623,020)
Net property and equipment
119,629,978 
122,820,122 
Land and Land Improvements [Member]
 
 
Component of property and equipment
 
 
Gross property and equipment
580,000 
580,000 
Natural gas pipeline [Member]
 
 
Component of property and equipment
 
 
Gross property and equipment
124,386,348 
124,297,157 
Vehicles and trailers [Member]
 
 
Component of property and equipment
 
 
Gross property and equipment
524,921 
506,958 
Computers [Member]
 
 
Component of property and equipment
 
 
Gross property and equipment
$ 87,696 
$ 59,027 
Property and Equipment (Details Textual) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Property, Plant and Equipment [Abstract]
 
 
 
Amount of depreciation of property and equipment recognized
$ 3,300 
$ 593 
$ 283 
Concentrations (Details)
12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Jan. 31, 2015
Department of Defense [Member]
Omega [Member]
Jan. 28, 2015
Department of Defense [Member]
Omega [Member]
Dec. 31, 2015
Department of Defense [Member]
Omega [Member]
Jan. 28, 2016
Subsequent Event [Member]
Department of Defense [Member]
Omega [Member]
Dec. 31, 2015
Mogas [Member]
Dec. 31, 2014
Mogas [Member]
Dec. 31, 2013
Mogas [Member]
Natural gas distribution agreement
 
 
 
10 years 
6 months 
 
10 years 
 
 
 
Potential natural gas distribution agreement
 
 
 
 
 
10 years 
 
 
 
 
Percentage of Capacity
66.00% 
19.00% 
10.00% 
 
 
 
 
67.00% 
19.00% 
10.00% 
Revenue related to the DOD contract
89.00% 
88.00% 
80.00% 
 
 
 
 
 
 
 
Percentage of amounts due from the department of defense in relation to consolidated accounts receivable
10.00% 
25.00% 
 
 
 
 
 
 
 
 
Percentage of payment to supplier of natural gas in relation to cost of sales
91.00% 
64.00% 
41.00% 
 
 
 
 
 
 
 
Management and Advisory Agreements (Details) (USD $)
12 Months Ended
Nov. 30, 2011
Corridor Infra Trust Management [Member]
Dec. 31, 2015
New Management Agreement [Member]
Dec. 31, 2014
New Management Agreement [Member]
Dec. 31, 2013
New Management Agreement [Member]
Dec. 31, 2015
Administrative Agreement [Member]
Dec. 31, 2015
Administrative Agreement [Member]
Corridor Infra Trust Management [Member]
Dec. 31, 2014
Administrative Agreement [Member]
Corridor Infra Trust Management [Member]
Dec. 31, 2013
Administrative Agreement [Member]
Corridor Infra Trust Management [Member]
Agreements (Textual) [Abstract]
 
 
 
 
 
 
 
 
Quarterly management fee percentage on the value of company's average monthly managed assets
0.25% 
 
 
 
 
 
 
 
Annual management fee percentage on the value of company's average monthly managed assets
1.00% 
 
 
 
 
 
 
 
Quarterly incentive fee on increase in distributions paid
10.00% 
 
 
 
 
 
 
 
Threshold distribution per quarter
$ 0.125 
 
 
 
 
 
 
 
Annually rate of fee percentage on the value of company's average daily managed assets
 
 
 
 
0.04% 
 
 
 
Administrator minimum annual fee
 
 
 
 
$ 30,000 
 
 
 
Incentive fees waived
 
133,194 
 
 
 
 
 
 
Incentive fees
 
278,619 
 
 
 
 
 
 
Incentive fee paid
 
145,425 
 
 
 
 
 
 
Management fees
 
$ 5,700,000 
$ 3,500,000 
$ 2,600,000 
 
$ 224,000 
$ 134,000 
$ 112,000 
Fair Value of Other Securities - Trading Securities (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Fair Value Disclosures [Abstract]
 
 
 
Net unrealized loss on trading securities
$ 0 
$ 0 
$ 0 
Net realized loss on trading securities
(251,213)
Total net realized and unrealized loss on trading securities
$ 0 
$ 0 
$ (251,213)
Fair Value of Other Securities (Details 1) (Fair Value, Measurements, Recurring [Member], USD $)
Dec. 31, 2015
Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other equity securities
$ 8,393,683 
 
Total Assets
8,393,683 
9,572,181 
Other equity securities
 
9,572,181 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other equity securities
 
Total Assets
Other equity securities
 
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other equity securities
 
Total Assets
Other equity securities
 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other equity securities
8,393,683 
 
Total Assets
8,393,683 
9,572,181 
Other equity securities
 
$ 9,572,181 
Fair Value of Other Securities (Details 2) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Warrant [Member]
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Disposals
$ 0 
$ (13,245,379)
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Fair Value Beginning Balance
9,572,181 
23,304,321 
Acquisitions
97,500 
Total Realized and Unrealized Gains/(Losses) Included in Net Income
(1,428,243)
397,112 
Return of Capital Adjustments Impacting Cost Basis of Securities
249,745 
(981,373)
Fair Value Ending Balance
8,393,683 
9,572,181 
Changes in Unrealized Losses, Included In Net Income, Relating to Securities Still Held (1)
(1,428,243)
397,112 
Fair Value, Inputs, Level 3 [Member] |
Other Equity Investments [Member]
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Fair Value Beginning Balance
9,217,181 
23,304,321 
Acquisitions
Disposals
(13,245,379)
Total Realized and Unrealized Gains/(Losses) Included in Net Income
(1,073,243)
139,612 
Return of Capital Adjustments Impacting Cost Basis of Securities
249,745 
(981,373)
Fair Value Ending Balance
8,393,683 
9,217,181 
Changes in Unrealized Losses, Included In Net Income, Relating to Securities Still Held (1)
(1,073,243)
139,612 
Fair Value, Inputs, Level 3 [Member] |
Warrant Investment [Member]
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Fair Value Beginning Balance
355,000 
 
Acquisitions
97,500 
Total Realized and Unrealized Gains/(Losses) Included in Net Income
(355,000)
257,500 
Return of Capital Adjustments Impacting Cost Basis of Securities
 
Fair Value Ending Balance
355,000 
Changes in Unrealized Losses, Included In Net Income, Relating to Securities Still Held (1)
(355,000)
257,500 
Fair Value, Inputs, Level 3 [Member] |
Warrant [Member]
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
Disposals
$ 0 
 
Fair Value of Other Securities (Details 3) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
 
 
Assets
$ 678,490,022 
$ 443,815,842 
Total Liabilities
234,295,716 
106,274,800 
Reported Value Measurement [Member]
 
 
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
 
 
Assets
720,737 
408,740 
Total Liabilities
266,801 
128,128 
Unconsolidated Affiliates [Member] |
Reported Value Measurement [Member]
 
 
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
 
 
Assets, Current
24,276 
25,783 
Assets, Noncurrent
696,461 
382,957 
Liabilities, Current
19,993 
14,318 
Liabilities, Noncurrent
246,808 
113,810 
Members' Equity
453,936 
280,612 
Total liabilities and partner's equity
$ 720,737 
$ 408,740 
Fair Value of Other Securities (Details 4) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenues
$ 22,478,932 
$ 22,140,450 
$ 12,681,670 
$ 13,987,883 
$ 11,896,126 
$ 9,345,878 
$ 9,019,012 
$ 10,047,557 
$ 71,288,935 
$ 40,308,573 
$ 31,286,020 
Nonoperating Income (Expense)
(3,554,782)
(5,022,101)
(890,093)
(107,066)
(3,893,006)
(154,275)
1,270,654 
472,262 
(9,574,042)
(2,304,365)
2,662,989 
Less: Net Income attributable to non-controlling interest
(384,221)
(410,806)
(412,004)
(410,175)
(388,423)
(389,485)
(387,135)
(391,114)
(1,617,206)
(1,556,157)
(1,466,767)
Reported Value Measurement [Member] |
Unconsolidated Affiliates [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenues
 
 
 
 
 
 
 
 
81,789 
54,906 
 
Operating Expenses
 
 
 
 
 
 
 
 
76,755 
62,764 
 
Nonoperating Income (Expense)
 
 
 
 
 
 
 
 
12,469 
15,459 
 
Income from Operations
 
 
 
 
 
 
 
 
17,503 
7,601 
 
Less: Net Income attributable to non-controlling interest
 
 
 
 
 
 
 
 
(8,901)
(761)
 
Net Income attributable to Partner's Capital
 
 
 
 
 
 
 
 
$ 8,602 
$ 6,840 
 
Fair Value of Other Securities (Details 5) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Carrying Amount [Member]
 
 
Financial instruments financial assets and financial liabilities at fair value
 
 
Financing notes receivable
$ 7,675,626 
$ 20,687,962 
Carrying Amount [Member] |
Level 1 [Member]
 
 
Financial instruments financial assets and financial liabilities at fair value
 
 
Cash and cash equivalents
14,618,740 
7,578,164 
Carrying Amount [Member] |
Level 2 [Member]
 
 
Financial instruments financial assets and financial liabilities at fair value
 
 
Escrow receivable
1,392,917 
2,438,500 
Hedged Derivative Asset
98,259 
351,807 
Long-term debt
217,375,153 
67,060,000 
Line of credit
32,141,277 
Fair Value [Member] |
Level 1 [Member]
 
 
Financial instruments financial assets and financial liabilities at fair value
 
 
Cash and cash equivalents
14,618,740 
7,578,164 
Fair Value [Member] |
Level 2 [Member]
 
 
Financial instruments financial assets and financial liabilities at fair value
 
 
Escrow receivable
1,392,917 
2,438,500 
Hedged Derivative Asset
98,259 
351,807 
Financing Notes Receivable Fair Value Disclosure
7,675,626 
20,687,962 
Long-term debt
193,573,834 
67,060,000 
Line of credit
$ 0 
$ 32,141,277 
Fair Value of Other Securities (Details Textual) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Schedule of Equity Method Investments [Line Items]
 
 
Transfers between levels
$ 0 
 
Unrealized gain on other equity securities
364,633 
5,000 
Investment warrants
$ 0 
 
Escrow Receivable Release Percentage after Time Expiration
50.00% 
 
Lightfoot Capital Partners LP [Member]
 
 
Schedule of Equity Method Investments [Line Items]
 
 
Equity interest percentage
6.60% 
1.50% 
Minimum [Member] |
Lightfoot Capital Partners LP [Member]
 
 
Schedule of Equity Method Investments [Line Items]
 
 
Fair Value Inputs, Discount for Lack of Marketability
11.80% 
17.70% 
Fair Value Inputs, Discount Rate
14.00% 
13.00% 
Maximum [Member] |
Lightfoot Capital Partners LP [Member]
 
 
Schedule of Equity Method Investments [Line Items]
 
 
Fair Value Inputs, Discount for Lack of Marketability
15.20% 
22.80% 
Fair Value Inputs, Discount Rate
16.00% 
15.00% 
Intangibles (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Amortization of the intangible lease asset
 
 
 
Intangible lease asset
$ 0 
$ 1,094,771 
 
Accumulated amortization
(1,021,784)
 
Net intangible lease asset
72,987 
 
Lease Revenue [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Amortization expense
$ 73,000 
$ 292,000 
$ 292,000 
Credit Facilities (Details) (USD $)
0 Months Ended 3 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended 3 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended
May 8, 2013
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2015
Parent Company [Member]
Dec. 31, 2014
Parent Company [Member]
Dec. 31, 2013
Parent Company [Member]
Dec. 31, 2015
Pinedale Liquids Gathering System [Member]
Oct. 15, 2013
Mowood LLC [Member]
Revolving note payable [Member]
Oct. 29, 2010
Mowood LLC [Member]
Revolving note payable [Member]
Mar. 13, 2014
Line of Credit [Member]
Oct. 29, 2013
Line of Credit [Member]
Mowood LLC [Member]
Revolving note payable [Member]
Oct. 15, 2013
Line of Credit [Member]
Mowood LLC [Member]
Revolving note payable [Member]
Jun. 23, 2015
Revolving Credit Facility [Member]
Dec. 20, 2012
Key Bank [Member]
Secured Debt [Member]
Dec. 31, 2015
Key Bank [Member]
Secured Debt [Member]
Dec. 20, 2012
Key Bank [Member]
Secured Debt [Member]
May 8, 2013
Key Bank [Member]
Line of Credit [Member]
Dec. 31, 2015
Key Bank [Member]
Line of Credit [Member]
Dec. 31, 2014
Key Bank [Member]
Line of Credit [Member]
Dec. 31, 2015
Key Bank [Member]
Line of Credit [Member]
May 8, 2013
Key Bank [Member]
Line of Credit [Member]
Dec. 31, 2015
Key Bank [Member]
Term Loan [Member]
Dec. 31, 2014
Key Bank [Member]
Term Loan [Member]
Dec. 31, 2013
Key Bank [Member]
Term Loan [Member]
Dec. 31, 2015
Regions [Member]
Revolving Credit Facility [Member]
Dec. 31, 2014
Regions [Member]
Revolving Credit Facility [Member]
Nov. 24, 2014
Regions [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
Regions [Member]
Revolving Credit Facility [Member]
Nov. 24, 2014
Regions [Member]
Revolving Credit Facility [Member]
Subsidiaries [Member]
Nov. 24, 2014
London Interbank Offered Rate (LIBOR) [Member]
Nov. 24, 2014
Minimum [Member]
London Interbank Offered Rate (LIBOR) [Member]
Nov. 24, 2014
Maximum [Member]
London Interbank Offered Rate (LIBOR) [Member]
Nov. 24, 2014
Mogas [Member]
Regions [Member]
Revolving Credit Facility [Member]
Jul. 8, 2015
Line of Credit [Member]
Jun. 29, 2015
Line of Credit [Member]
Revolving Credit Facility [Member]
Dec. 31, 2015
Line of Credit [Member]
Revolving Credit Facility [Member]
Jul. 8, 2015
Line of Credit [Member]
Revolving Credit Facility [Member]
Jul. 31, 2015
Line of Credit [Member]
Revolving Credit Facility [Member]
Mowood/Omega Revolver [Member]
Jul. 8, 2015
Line of Credit [Member]
Term Loan [Member]
Parent Company [Member]
Jul. 8, 2015
Line of Credit [Member]
Term Loan [Member]
Subsidiaries [Member]
Jul. 31, 2015
Line of Credit [Member]
London Interbank Offered Rate (LIBOR) [Member]
Revolving Credit Facility [Member]
Mowood/Omega Revolver [Member]
Jul. 8, 2015
Line of Credit [Member]
Minimum [Member]
London Interbank Offered Rate (LIBOR) [Member]
Revolving Credit Facility [Member]
Jul. 8, 2015
Line of Credit [Member]
Maximum [Member]
London Interbank Offered Rate (LIBOR) [Member]
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available borrowing capacity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 95,800,000 
 
 
 
 
 
 
 
Line of Credit Facility, Covenant Terms
three years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of Credit Extension Period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 year 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Description of variable rate basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued interest on outstanding balance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
4.00% 
0.50% 
 
3.25% 
4.25% 
 
4.00% 
 
 
 
 
 
 
 
 
 
 
 
 
3.50% 
2.75% 
3.50% 
 
 
 
 
 
 
 
 
4.00% 
2.75% 
3.75% 
Effective percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.07% 
 
 
 
 
 
 
 
Debt Instrument, Additional Principal Payment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of Credit Facility, Periodic Payment, Principal
 
 
 
 
 
 
 
 
 
294,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
900,000 
 
 
 
 
 
 
 
Required principle payment as percentage of outstanding amount, beginning in year two
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.42% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted Cash and Cash Equivalents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
678,490,022 
 
 
 
443,815,842 
 
 
 
678,490,022 
443,815,842 
 
576,095,576 
345,940,430 
 
137,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt issuance cost
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Costs Amortization Period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
3,652,111 
3,854,913 
1,126,888 
1,147,272 
1,051,151 
977,635 
819,360 
826,976 
9,781,184 
3,675,122 
3,288,378 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
500,000 
517,000 
515,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,500,000 
1,300,000 
 
 
 
 
 
 
70,000,000 
 
 
 
 
20,000,000 
 
 
 
 
 
90,000,000 
30,000,000 
3,000,000 
 
 
 
3,000,000 
153,000,000 
 
93,000,000 
105,000,000 
1,500,000 
45,000,000 
3,000,000 
 
 
 
Loan facility secured by assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,500,000 
1,300,000 
 
 
 
 
 
 
70,000,000 
 
 
 
 
20,000,000 
 
 
 
 
 
90,000,000 
30,000,000 
3,000,000 
 
 
 
3,000,000 
153,000,000 
 
93,000,000 
105,000,000 
1,500,000 
45,000,000 
3,000,000 
 
 
 
Amortization of Financing Costs and Discounts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
47,000 
42,000 
 
 
 
 
927,000 
217,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
debt instrument, basis spread on prime rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.75% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred debt issuance costs, net of accumulated amortization of $1,430,366 and $1,124,655
 
 
 
 
 
 
 
 
 
 
 
 
2,450,323 
1,645,887 
 
 
 
 
 
 
 
 
 
 
 
 
161,000 
 
161,000 
 
156,000 
501,000 
 
3,300,000 
1,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current Fiscal Year End Date
 
 
 
 
 
 
 
 
 
--12-31 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Borrowed against the revolver
 
 
 
 
 
 
 
 
 
$ 45,392,332 
$ 34,676,948 
$ 221,332 
$ 42,000,000 
$ 32,000,000 
$ 0 
 
 
 
$ 4,000,000 
 
 
$ 42,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 42,000,000 
 
 
 
 
 
 
 
 
Credit Facilities - Long Term Debt Maturities (Details) (USD $)
Dec. 31, 2015
Pinedale Credit Facilities [Member]
 
Debt Instrument [Line Items]
 
2016
$ 62,532,000 
2017
2018
2019
2020
Thereafter
Total
62,532,000 
Regions Credit Facility [Member]
 
Debt Instrument [Line Items]
 
2016
3,600,000 
2017
3,600,000 
2018
3,600,000 
2019
32,400,000 
2020
Thereafter
Total
$ 43,200,000 
Convertible Debt (Details) (Convertible Debt [Member], Convertible Senior Notes Due 2020 [Member], USD $)
0 Months Ended 12 Months Ended
Jun. 29, 2015
Dec. 31, 2015
Jun. 29, 2015
Dec. 31, 2014
Debt Instrument [Line Items]
 
 
 
 
Aggregate principal amount
 
 
$ 115,000,000 
 
Coupon rate
 
 
7.00% 
 
Amount of underwriter's discount
 
 
3,700,000 
 
Amortization of discount
 
381,000 
 
 
Deferred debt issuance costs, net
 
219,000 
 
Deferred debt cost amortization
 
22,000 
 
 
Effective percentage
 
7.70% 
 
 
Interest expense
 
4,100,000 
 
 
Conversion rate, principal amount of convertible note
$ 1,000 
 
 
 
Percentage of principal amount redeemed
100.00% 
 
 
 
Common Stock [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Conversion rate, number of common stock (in shares)
30.303 
 
 
 
Conversion price per share of common stock
 
 
$ 33 
 
Asset Retirement Obligation (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
 
 
 
Asset retirement obligation
$ 0 
$ 0 
$ 0 
Liabilities assumed
12,500,000 
Expenditures
ARO accretion expense
339,042 
Ending asset retirement obligation
12,839,042 
Grand Isle Gathering System [Member]
 
 
 
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
 
 
 
Ending asset retirement obligation
$ 12,500,000 
 
 
Interest Rate Hedge Swaps (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Fair Value, Measurements, Recurring [Member]
 
 
 
Hedged derivative receivable
$ 98,259 
 
 
Level 1 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
 
Hedged derivative liability
 
 
Hedged derivative receivable
 
 
Level 2 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
 
Hedged derivative liability
98,259 
 
 
Level 3 [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
 
Hedged derivative liability
 
 
Hedged derivative receivable
 
 
Not Designated as Hedging Instrument [Member] |
Interest rate contract [Member]
 
 
 
Gain recognized in earnings
75,000 
Not Designated as Hedging Instrument [Member] |
Interest rate contract [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
 
Gain recognized in earnings
 
$ 351,807 
 
Interest Rate Hedge Swaps (Details 2) (Not Designated as Hedging Instrument [Member], Interest Rate Swap [Member], USD $)
Dec. 31, 2015
Instrument
Not Designated as Hedging Instrument [Member] |
Interest Rate Swap [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Number of Instruments
Notional Amount Outstanding
$ 52,500,000 
Fixed Rate Paid
0.865% 
Interest Rate Hedge Swaps (Details 3) (Not Designated as Hedging Instrument [Member], USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Interest Rate Swap [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Derivative, Number of Instruments Held
 
 
Derivative, Notional Amount
$ 52,500,000 
 
 
Derivative, Forward Interest Rate
0.865% 
 
 
Interest rate contract [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Interest Expense
$ 0 
$ 0 
$ 75,000 
Interest Rate Hedge Swaps (Details 4) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
Amount of Gain (Loss) Reclassified from AOCI on Derivatives (Effective Portion) Recognized in Net Income1
$ 22,000 
 
 
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion, Amounts Excluded from Effectiveness Testing)1
1,000 
1,000 
(6,000)
Designated as Hedging Instrument [Member]
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net
(611,879)
(705,826)
741,344 
Amount of Gain (Loss) Reclassified from AOCI on Derivatives (Effective Portion) Recognized in Net Income1
(287,999)
(305,945)
(217,821)
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion, Amounts Excluded from Effectiveness Testing)1
(1,284)
(897)
5,969 
Not Designated as Hedging Instrument [Member]
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net
$ 0 
$ 0 
$ (75,200)
Interest Rate Hedge Swaps (Details Textual) (USD $)
12 Months Ended 3 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2015
Designated as Hedging Instrument [Member]
Dec. 31, 2014
Designated as Hedging Instrument [Member]
Dec. 31, 2013
Designated as Hedging Instrument [Member]
Dec. 31, 2015
Not Designated as Hedging Instrument [Member]
Interest rate contract [Member]
Dec. 31, 2014
Not Designated as Hedging Instrument [Member]
Interest rate contract [Member]
Dec. 31, 2013
Not Designated as Hedging Instrument [Member]
Interest rate contract [Member]
Dec. 31, 2014
Fair Value, Measurements, Recurring [Member]
Not Designated as Hedging Instrument [Member]
Interest rate contract [Member]
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
 
 
 
 
 
 
Gain (loss) on Fair Value Hedge Ineffectiveness, Net
$ (1,000)
$ (1,000)
$ 6,000 
$ 1,284 
$ 897 
$ (5,969)
 
 
 
 
Loss recognized in earnings
 
 
 
 
 
 
75,000 
351,807 
Reclassified into interest expense over the next 12 months
$ 22,000 
 
 
$ (287,999)
$ (305,945)
$ (217,821)
 
 
 
 
Stockholder's Equity (Details) (USD $)
0 Months Ended 12 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 1 Months Ended
Jan. 27, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2015
Jun. 23, 2015
Jan. 23, 2015
Jan. 27, 2015
Series A Cumulative Redeemable Preferred Stock [Member]
Jan. 27, 2015
Depositary Shares [Member]
Dec. 31, 2015
Preferred Stock [Member]
Series A Cumulative Redeemable Preferred Stock [Member]
Jan. 27, 2015
Preferred Stock [Member]
Series A Cumulative Redeemable Preferred Stock [Member]
Dec. 31, 2015
Common Stock [Member]
Dec. 31, 2014
Common Stock [Member]
Dec. 31, 2013
Common Stock [Member]
Jan. 27, 2015
Underwritten Public Offering [Member]
Depositary Shares [Member]
Jan. 27, 2015
Underwritten Public Offering [Member]
Depositary Shares [Member]
Dec. 31, 2015
Dividend Reinvestment Plan [Member]
Dec. 31, 2014
Dividend Reinvestment Plan [Member]
Dec. 31, 2015
Dividend Reinvestment Plan [Member]
Common Stock [Member]
Dec. 31, 2014
Dividend Reinvestment Plan [Member]
Common Stock [Member]
Jun. 30, 2015
Purchase of GIGS, Common Stock Offering [Member]
Jun. 30, 2015
Purchase of GIGS, Convertible Debt Offering [Member]
Sep. 30, 2015
CORRPrA [Member]
Feb. 18, 2016
Subsequent Event [Member]
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock, authorized
 
 
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock, par value
 
$ 0 
 
$ 0.001 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares sold in offering
 
 
 
 
 
 
 
 
 
 
2,587,500 
4,485,000 
 
2,250,000 
 
 
 
 
 
 
 
 
 
Coupon rate
 
 
 
 
 
 
 
 
7.375% 
7.375% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock, issued
 
 
22,500 
 
 
22,500 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net offering proceeds
$ 54,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual dividend, per share
 
 
 
 
 
 
 
$ 1.84375 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liquidation preference, per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 25.00 
 
 
 
 
 
 
 
 
Series A Cumulative Redeemable Preferred Stock, value of stock issed
 
 
56,250,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23 
 
Shares of common stock offered
 
9,321,010 
 
11,939,697 
2,587,500 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Authorized amount of shares to be repurchased
 
 
 
 
 
 
 
 
 
 
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Shelf Registration Statement Aggregate Offering Price
 
 
 
106,600,000 
 
300,000,000.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
600,000,000 
Reinvestment of distributions to stockholders, shares
 
 
 
 
 
 
 
 
 
 
 
 
3,099 
 
 
 
 
28,510 
3,973 
 
 
 
 
Number of shares in offering (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,587,500 
 
 
 
Reinvestment of distributions by common stockholders in additional common shares
 
$ 140,108 
$ 108,119 
 
 
 
 
 
 
 
 
 
 
 
 
$ 817,915 
$ 140,108 
 
 
$ 77,600,000 
$ 115,000,000 
 
 
Warrants (Details) (USD $)
12 Months Ended 0 Months Ended
Dec. 31, 2015
Feb. 7, 2007
Feb. 7, 2007
Warrant [Member]
Class of Warrant or Right [Line Items]
 
 
 
Shares issued during period
 
 
945,594 
Right to purchase one share of common stock, per common share
 
$ 11.41 
 
Warrants expiration date
Feb. 06, 2014 
 
 
Earnings Per Share (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Jun. 29, 2015
Convertible Debt [Member]
Convertible Senior Notes Due 2020 [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Interest Rate, Stated Percentage
 
 
 
 
 
 
 
 
 
 
 
7.00% 
Net income attributable to CorEnergy stockholders
$ 3,620,926 
$ 427,219 
$ 4,185,138 
$ 4,086,628 
$ 14,370 
$ 1,888,418 
$ 3,005,908 
$ 2,105,160 
$ 12,319,911 
$ 7,013,856 
$ 4,502,339 
 
Less: preferred dividend requirements
1,037,110 
1,037,109 
1,037,109 
737,500 
3,848,828 
 
Net income attributable to common stockholders
2,583,816 
(609,890)
3,148,029 
3,349,128 
14,370 
1,888,418 
3,005,908 
2,105,160 
8,471,083 
7,013,856 
4,502,339 
 
Weighted average shares - basic
 
 
 
 
 
 
 
 
10,685,892 
6,605,715 
4,829,879 
 
Basic earnings per share (in dollars per share)
$ 0.22 
$ (0.05)
$ 0.33 
$ 0.36 
$ 0.00 
$ 0.30 
$ 0.48 
$ 0.35 
$ 0.79 
$ 1.06 
$ 0.93 
 
Add: After tax effect of convertible interest
 
 
 
 
 
 
 
 
 
Income attributable for dilutive securities
 
 
 
 
 
 
 
 
$ 8,471,083 
$ 7,013,856 
$ 4,502,339 
 
Weighted average shares - diluted
 
 
 
 
 
 
 
 
10,685,892 
6,605,715 
4,829,879 
 
Diluted earnings per share (in dollars per share)
$ 0.22 
$ (0.05)
$ 0.33 
$ 0.36 
$ 0.00 
$ 0.30 
$ 0.48 
$ 0.35 
$ 0.79 
$ 1.06 
$ 0.93 
 
QUARTERLY FINANCIAL DATA (Unaudited) (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Revenue
 
 
 
 
 
 
 
 
 
 
 
Lease revenue
$ 16,984,036 
$ 16,966,056 
$ 6,799,879 
$ 7,336,101 
$ 7,204,493 
$ 7,191,187 
$ 7,065,677 
$ 6,762,408 
$ 48,086,072 
$ 28,223,765 
$ 22,552,976 
Sales revenue
1,717,787 
1,434,694 
1,665,908 
2,341,655 
2,894,556 
1,741,209 
1,813,607 
3,259,530 
7,160,044 
9,708,902 
8,733,044 
Financing revenue
185,650 
182,604 
668,904 
660,392 
498,984 
413,482 
139,728 
25,619 
1,697,550 
1,077,813 
Transportation revenue
3,591,459 
3,557,096 
3,546,979 
3,649,735 
1,298,093 
14,345,269 
1,298,093 
Total Revenue
22,478,932 
22,140,450 
12,681,670 
13,987,883 
11,896,126 
9,345,878 
9,019,012 
10,047,557 
71,288,935 
40,308,573 
31,286,020 
Expenses
 
 
 
 
 
 
 
 
 
 
 
Cost of sales (excluding depreciation expense)
618,073 
382,851 
569,958 
1,248,330 
1,914,901 
1,284,711 
1,384,998 
2,707,358 
2,819,212 
7,291,968 
6,734,665 
Depreciation, amortization and ARO accretion expense
5,385,068 
5,836,665 
3,495,986 
4,048,832 
3,575,420 
3,252,604 
3,220,253 
3,146,978 
18,766,551 
13,195,255 
11,491,285 
Provision for loan losses
5,833,000 
7,951,137 
13,784,137 
Transportation, maintenance and general and administrative
935,775 
856,050 
1,076,352 
991,608 
458,872 
3,859,785 
458,872 
Operating expenses
83,095 
264,812 
195,673 
206,360 
194,627 
210,009 
213,533 
222,741 
749,940 
840,910 
924,571 
General and administrative
2,434,094 
2,837,762 
1,905,329 
2,568,519 
3,263,345 
1,841,493 
1,334,960 
1,432,955 
9,745,704 
7,872,753 
5,879,864 
Total Expenses
15,289,105 
18,129,277 
7,243,298 
9,063,649 
9,407,165 
6,588,817 
6,153,744 
7,510,032 
49,725,329 
29,659,758 
25,030,385 
Income (Loss) from Operations, before income taxes
7,189,827 
4,011,173 
5,438,372 
4,924,234 
2,488,961 
2,757,061 
2,865,268 
2,537,525 
21,563,606 
10,648,815 
6,255,635 
Other Income (Expense)
 
 
 
 
 
 
 
 
 
 
 
Net distributions and dividend income
245,374 
241,563 
193,410 
590,408 
136,909 
1,688,830 
5,988 
5,056 
1,270,755 
1,836,783 
584,814 
Net realized and unrealized gain (loss) on other equity securities
(148,045)
(1,408,751)
43,385 
449,798 
(2,978,764)
(865,470)
2,084,026 
1,294,182 
(1,063,613)
(466,026)
5,617,766 
Interest expense
(3,652,111)
(3,854,913)
(1,126,888)
(1,147,272)
(1,051,151)
(977,635)
(819,360)
(826,976)
(9,781,184)
(3,675,122)
(3,288,378)
Total Other Income (Expense)
(3,554,782)
(5,022,101)
(890,093)
(107,066)
(3,893,006)
(154,275)
1,270,654 
472,262 
(9,574,042)
(2,304,365)
2,662,989 
Income (Loss) before income taxes
3,635,045 
(1,010,928)
4,548,279 
4,817,168 
(1,404,045)
2,602,786 
4,135,922 
3,009,787 
11,989,564 
8,344,450 
8,918,624 
Taxes
 
 
 
 
 
 
 
 
 
 
 
Current tax expense
276,755 
105,020 
104,479 
435,756 
2,503,808 
486,054 
854,075 
922,010 
3,843,937 
13,474 
Deferred tax expense (benefit)
(646,857)
(1,953,973)
(153,342)
(115,391)
(4,310,646)
(161,171)
742,879 
(340,562)
(2,869,563)
(4,069,500)
2,936,044 
Income tax expense (benefit), net
(370,102)
(1,848,953)
(48,863)
320,365 
(1,806,838)
324,883 
742,879 
513,513 
(1,947,553)
(225,563)
2,949,518 
Net Income
4,005,147 
838,025 
4,597,142 
4,496,803 
402,793 
2,277,903 
3,393,043 
2,496,274 
13,937,117 
8,570,013 
5,969,106 
Less: Net Income attributable to non-controlling interest
384,221 
410,806 
412,004 
410,175 
388,423 
389,485 
387,135 
391,114 
1,617,206 
1,556,157 
1,466,767 
Net income attributable to CorEnergy stockholders
3,620,926 
427,219 
4,185,138 
4,086,628 
14,370 
1,888,418 
3,005,908 
2,105,160 
12,319,911 
7,013,856 
4,502,339 
Preferred dividend requirements
1,037,110 
1,037,109 
1,037,109 
737,500 
3,848,828 
Net Income (Loss) attributable to Common Stockholders
2,583,816 
(609,890)
3,148,029 
3,349,128 
14,370 
1,888,418 
3,005,908 
2,105,160 
8,471,083 
7,013,856 
4,502,339 
Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
 
Changes in fair value of qualifying hedges attributable to CorEnergy stockholders
218,576 
(223,176)
18,202 
(276,107)
(197,245)
214,602 
(270,838)
(70,620)
(262,505)
(324,101)
777,403 
Changes in fair value of qualifying hedges attributable to non-controlling interest
51,104 
(52,180)
4,256 
(64,555)
(46,120)
50,175 
(63,324)
(16,511)
(61,375)
(75,780)
181,762 
Net Change in Other Comprehensive Income (Loss)
269,680 
(275,356)
22,458 
(340,662)
(243,365)
264,777 
(334,162)
(87,131)
(323,880)
(399,881)
959,165 
Total Comprehensive Income
4,274,827 
562,669 
4,619,600 
4,156,141 
159,428 
2,542,680 
3,058,881 
2,409,143 
13,613,237 
8,170,132 
6,928,271 
Less: Comprehensive income attributable to non-controlling interest
435,325 
358,626 
416,260 
345,620 
342,303 
439,660 
323,811 
374,603 
1,555,831 
1,480,377 
1,648,529 
Comprehensive Income attributable to CorEnergy Stockholders
$ 3,839,502 
$ 204,043 
$ 4,203,340 
$ 3,810,521 
$ (182,875)
$ 2,103,020 
$ 2,735,070 
$ 2,034,540 
$ 12,057,406 
$ 6,689,755 
$ 5,279,742 
Earnings Per Common Share:
 
 
 
 
 
 
 
 
 
 
 
Basic (in dollars per share)
$ 0.22 
$ (0.05)
$ 0.33 
$ 0.36 
$ 0.00 
$ 0.30 
$ 0.48 
$ 0.35 
$ 0.79 
$ 1.06 
$ 0.93 
Diluted (in dollars per share)
$ 0.22 
$ (0.05)
$ 0.33 
$ 0.36 
$ 0.00 
$ 0.30 
$ 0.48 
$ 0.35 
$ 0.79 
$ 1.06 
$ 0.93 
Subsequent Events (Details) (USD $)
12 Months Ended 0 Months Ended 0 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Jan. 23, 2015
Feb. 18, 2016
Subsequent Event [Member]
Jan. 26, 2016
Common Stock [Member]
Subsequent Event [Member]
Jan. 26, 2016
Series A Cumulative Redeemable Preferred Stock [Member]
Depositary Shares [Member]
Subsequent Event [Member]
Dec. 31, 2015
Series A Cumulative Redeemable Preferred Stock [Member]
Preferred Stock [Member]
Jan. 27, 2015
Series A Cumulative Redeemable Preferred Stock [Member]
Preferred Stock [Member]
Jan. 31, 2015
Department of Defense [Member]
Omega [Member]
Jan. 28, 2015
Department of Defense [Member]
Omega [Member]
Jan. 28, 2016
Department of Defense [Member]
Omega [Member]
Subsequent Event [Member]
Jan. 28, 2016
Department of Defense [Member]
Omega [Member]
Subsequent Event [Member]
mi
Feb. 29, 2016
BB Intermediate [Member]
Subsequent Event [Member]
Subsequent Event [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends declared per share (in dollars per share)
$ 2.75 
$ 2.57 
$ 1.875 
 
 
$ 0.750 
 
 
 
 
 
 
 
 
Depositary stock, dividends declared per share (in dollars per share)
 
 
 
 
 
 
$ 0.460937500 
 
 
 
 
 
 
 
Coupon rate
 
 
 
 
 
 
 
7.375% 
7.375% 
 
 
 
 
 
Shelf Registration Statement Aggregate Offering Price
$ 106,600,000 
 
 
$ 300,000,000.0 
$ 600,000,000 
 
 
 
 
 
 
 
 
 
Natural gas distribution agreement
 
 
 
 
 
 
 
 
 
10 years 
6 months 
10 years 
 
 
Length of pipeline, in miles
 
 
 
 
 
 
 
 
 
 
 
 
70 
 
Equity interest percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Balance Sheet (Details) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Assets
 
 
 
 
Leased property, net of accumulated depreciation of $559,078 and $374,699
$ 509,226,215 
$ 260,280,029 
 
 
Leased property held for sale, net of accumulated depreciation of $0 and $5,878,933
8,247,916 
 
 
Investments
8,393,683 
9,572,181 
 
 
Cash and cash equivalents
14,618,740 
7,578,164 
17,963,266 
17,680,783 
Intangible lease asset, net of accumulated amortization of $0 and $1,021,784
72,987 
 
 
Prepaid expenses and other assets
491,024 
732,110 
 
 
Total Assets
678,490,022 
443,815,842 
 
 
Liabilities and Equity
 
 
 
 
Current maturities of long-term debt
66,132,000 
3,528,000 
 
 
Accounts payable and other accrued liabilities
2,317,774 
3,935,307 
 
 
Management fees payable
1,763,747 
1,164,399 
 
 
Line of credit
32,141,277 
 
 
Unearned revenue
711,230 
 
 
Long-term debt
151,243,153 
63,532,000 
 
 
Total Liabilities
234,295,716 
106,274,800 
 
 
Equity
 
 
 
 
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 and 0 issued and outstanding as of December 31, 2015, and December 31, 2014
56,250,000 
 
 
Capital stock, non-convertible, $0.001 par value; 11,939,697 and 9,321,010 shares issued and outstanding at December 31, 2015, and December 31, 2014 (100,000,000 shares authorized)
11,940 
9,321 
4,831 
 
Additional paid-in capital
361,581,507 
309,987,724 
173,460,344 
 
Accumulated retained earnings
1,580,062 
 
Accumulated other comprehensive income
190,797 
453,302 
777,403 
Total Equity
418,034,244 
310,450,347 
 
 
Total Liabilities and Equity
678,490,022 
443,815,842 
 
 
Parent Company [Member]
 
 
 
 
Assets
 
 
 
 
Leased property, net of accumulated depreciation of $559,078 and $374,699
4,234,578 
4,418,957 
 
 
Leased property held for sale, net of accumulated depreciation of $0 and $5,878,933
8,247,916 
 
 
Investments
458,088,998 
219,883,494 
 
 
Cash and cash equivalents
10,089,436 
3,599,935 
16,649,618 
16,504,354 
Due from subsidiary
8,317,719 
12,236,050 
 
 
Note receivable from subsidiary
92,730,000 
95,300,000 
 
 
Intangible lease asset, net of accumulated amortization of $0 and $1,021,784
72,987 
 
 
Deferred debt issuance costs, net of accumulated amortization of $674,658 and $69,772
2,450,323 
1,645,887 
 
 
Deferred lease costs, net of accumulated amortization of $16,123 and $10,808
63,653 
68,968 
 
 
Income tax receivable
4,394 
319,122 
 
 
Prepaid expenses and other assets
116,475 
147,114 
 
 
Total Assets
576,095,576 
345,940,430 
 
 
Liabilities and Equity
 
 
 
 
Current maturities of long-term debt
3,600,000 
 
 
Accounts payable and other accrued liabilities
1,300,792 
1,339,739 
 
 
Management fees payable
1,763,747 
1,164,399 
 
 
Due to affiliate
153,640 
274,715 
 
 
Line of credit
32,000,000 
 
 
Unearned revenue
711,230 
 
 
Long-term debt
151,243,153 
 
 
 
Total Liabilities
158,061,332 
35,490,083 
 
 
Equity
 
 
 
 
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 and 0 issued and outstanding as of December 31, 2015, and December 31, 2014
56,250,000 
 
 
Capital stock, non-convertible, $0.001 par value; 11,939,697 and 9,321,010 shares issued and outstanding at December 31, 2015, and December 31, 2014 (100,000,000 shares authorized)
11,940 
46,605 
 
 
Additional paid-in capital
361,581,507 
309,950,440 
 
 
Accumulated retained earnings
 
 
Accumulated other comprehensive income
190,797 
453,302 
 
 
Total Equity
418,034,244 
310,450,347 
 
 
Total Liabilities and Equity
$ 576,095,576 
$ 345,940,430 
 
 
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Balance Sheet Parenthetical (Details) (USD $)
Dec. 31, 2015
Jun. 23, 2015
Dec. 31, 2014
Property Subject to or Available for Operating Lease, Accumulated Depreciation
$ 33,869,263 
 
$ 19,417,025 
Property Held For Sale, Accumulated Depreciation
 
5,878,933 
Finite-Lived Intangible Assets, Accumulated Amortization
 
1,021,784 
Preferred stock, par value
$ 0.001 
 
$ 0 
Preferred Stock, Shares Authorized
10,000,000 
 
Preferred Stock, Shares Issued
22,500 
 
Preferred Stock, Shares Outstanding
22,500 
 
Common Stock, Par or Stated Value Per Share
$ 0.001 
 
$ 0.001 
Capital stock non-convertible, shares issued
11,939,697 
2,587,500 
9,321,010 
Common Stock, Shares, Outstanding
11,939,697 
 
9,321,010 
Common Stock, Shares Authorized
100,000,000 
 
100,000,000 
Parent Company [Member]
 
 
 
Property Subject to or Available for Operating Lease, Accumulated Depreciation
559,078 
 
374,699 
Property Held For Sale, Accumulated Depreciation
 
5,878,933 
Finite-Lived Intangible Assets, Accumulated Amortization
 
1,021,784 
Deferred debt cost amortization
674,658 
 
69,772 
Deferred Costs, Leasing, Accumulated Amortization
16,123 
 
10,808 
Preferred Stock, Liquidation Preference, Value
$ 56,250,000 
 
$ 56,250,000 
Liquidation preference, per share
$ 2,500 
 
$ 2,500 
Preferred stock, par value
$ 0.001 
 
$ 0.001 
Preferred Stock, Shares Authorized
10,000,000 
 
10,000,000 
Preferred Stock, Shares Issued
 
Preferred Stock, Shares Outstanding
 
Common Stock, Par or Stated Value Per Share
$ 0.001 
 
$ 0.001 
Capital stock non-convertible, shares issued
11,939,697 
 
9,321,010 
Common Stock, Shares, Outstanding
11,939,697 
 
9,321,010 
Common Stock, Shares Authorized
100,000,000 
 
100,000,000 
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Income and Comprehensive Income (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Lease revenue
$ 16,984,036 
$ 16,966,056 
$ 6,799,879 
$ 7,336,101 
$ 7,204,493 
$ 7,191,187 
$ 7,065,677 
$ 6,762,408 
$ 48,086,072 
$ 28,223,765 
$ 22,552,976 
Revenues
22,478,932 
22,140,450 
12,681,670 
13,987,883 
11,896,126 
9,345,878 
9,019,012 
10,047,557 
71,288,935 
40,308,573 
31,286,020 
General and administrative
2,434,094 
2,837,762 
1,905,329 
2,568,519 
3,263,345 
1,841,493 
1,334,960 
1,432,955 
9,745,704 
7,872,753 
5,879,864 
Costs and Expenses
15,289,105 
18,129,277 
7,243,298 
9,063,649 
9,407,165 
6,588,817 
6,153,744 
7,510,032 
49,725,329 
29,659,758 
25,030,385 
Operating Income
7,189,827 
4,011,173 
5,438,372 
4,924,234 
2,488,961 
2,757,061 
2,865,268 
2,537,525 
21,563,606 
10,648,815 
6,255,635 
Net distributions and dividend income
245,374 
241,563 
193,410 
590,408 
136,909 
1,688,830 
5,988 
5,056 
1,270,755 
1,836,783 
584,814 
Net realized and unrealized loss on trading securities
 
 
 
 
 
 
 
 
(251,213)
Net realized and unrealized gain (loss) on other equity securities
(148,045)
(1,408,751)
43,385 
449,798 
(2,978,764)
(865,470)
2,084,026 
1,294,182 
(1,063,613)
(466,026)
5,617,766 
Nonoperating Income (Expense)
(3,554,782)
(5,022,101)
(890,093)
(107,066)
(3,893,006)
(154,275)
1,270,654 
472,262 
(9,574,042)
(2,304,365)
2,662,989 
Income (Loss) before income taxes
3,635,045 
(1,010,928)
4,548,279 
4,817,168 
(1,404,045)
2,602,786 
4,135,922 
3,009,787 
11,989,564 
8,344,450 
8,918,624 
Current tax expense
276,755 
105,020 
104,479 
435,756 
2,503,808 
486,054 
854,075 
922,010 
3,843,937 
13,474 
Deferred tax expense (benefit)
(646,857)
(1,953,973)
(153,342)
(115,391)
(4,310,646)
(161,171)
742,879 
(340,562)
(2,869,563)
(4,069,500)
2,936,044 
Income Tax Expense (Benefit)
(370,102)
(1,848,953)
(48,863)
320,365 
(1,806,838)
324,883 
742,879 
513,513 
(1,947,553)
(225,563)
2,949,518 
Net Income (Loss) Attributable to Parent
3,620,926 
427,219 
4,185,138 
4,086,628 
14,370 
1,888,418 
3,005,908 
2,105,160 
12,319,911 
7,013,856 
4,502,339 
Changes in fair value of qualifying hedges attributable to CorEnergy stockholders
218,576 
(223,176)
18,202 
(276,107)
(197,245)
214,602 
(270,838)
(70,620)
(262,505)
(324,101)
777,403 
Net Change in Other Comprehensive Income (Loss)
269,680 
(275,356)
22,458 
(340,662)
(243,365)
264,777 
(334,162)
(87,131)
(323,880)
(399,881)
959,165 
Parent Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Lease revenue
 
 
 
 
 
 
 
 
638,243 
2,552,976 
2,552,976 
Income (Loss) from Equity Method Investments
 
 
 
 
 
 
 
 
10,894,003 
6,730,060 
5,720,413 
Revenues
 
 
 
 
 
 
 
 
11,532,246 
9,283,036 
8,273,389 
Depreciation
 
 
 
 
 
 
 
 
754,050 
2,463,062 
2,463,052 
Amortization expense
 
 
 
 
 
 
 
 
5,316 
5,318 
5,320 
General and administrative
 
 
 
 
 
 
 
 
1,426,598 
1,061,421 
1,509,297 
Costs and Expenses
 
 
 
 
 
 
 
 
2,185,964 
3,529,801 
3,977,669 
Operating Income
 
 
 
 
 
 
 
 
9,346,282 
5,753,235 
4,295,720 
Net distributions and dividend income
 
 
 
 
 
 
 
 
13,542 
13,117 
6,681 
Net realized and unrealized loss on trading securities
 
 
 
 
 
 
 
 
Net realized and unrealized gain (loss) on other equity securities
 
 
 
 
 
 
 
 
Interest on loans to subsidiaries
 
 
 
 
 
 
 
 
9,294,537 
1,100,349 
752,305 
Interest income (expense)
 
 
 
 
 
 
 
 
(6,334,450)
147,155 
(49,214)
Nonoperating Income (Expense)
 
 
 
 
 
 
 
 
2,973,629 
1,260,621 
709,772 
Income (Loss) before income taxes
 
 
 
 
 
 
 
 
12,319,911 
7,013,856 
5,005,492 
Current tax expense
 
 
 
 
 
 
 
 
(540,111)
Deferred tax expense (benefit)
 
 
 
 
 
 
 
 
1,043,264 
Income Tax Expense (Benefit)
 
 
 
 
 
 
 
 
503,153 
Net Income (Loss) Attributable to Parent
 
 
 
 
 
 
 
 
12,319,911 
7,013,856 
4,502,339 
Changes in fair value of qualifying hedges attributable to CorEnergy stockholders
 
 
 
 
 
 
 
 
(262,505)
(324,101)
777,403 
Net Change in Other Comprehensive Income (Loss)
 
 
 
 
 
 
 
 
$ 12,057,406 
$ 6,689,755 
$ 5,279,742 
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Cash Flows (Details) (USD $)
0 Months Ended 12 Months Ended
Jun. 23, 2015
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Net cash provided by (used in) operating activities
 
$ 42,600,618 
$ 16,968,553 
$ 7,708,012 
Proceeds from sale of leased property held for sale
 
7,678,246 
Increase in financing notes receivable
 
(524,037)
(20,648,714)
Principal payment on financing note receivable
 
100,000 
Net cash (used) provided by in investing activities
 
(244,612,616)
(177,075,793)
5,410,219 
Debt financing costs
 
(1,617,991)
(3,269,429)
(144,798)
Net offering proceeds on Series A preferred stock
 
54,210,476 
Net offering proceeds on common stock
73,300,000 
73,184,679 
141,797,913 
(523,094)
Net proceeds of convertible debt
111,300,000 
111,262,500 
Dividends paid on Series A preferred stock
 
(3,503,125)
Dividends paid on common stock
 
(28,528,224)
(15,187,976)
(8,946,941)
Advances on revolving line of credit
 
45,392,332 
34,676,948 
221,332 
Payments on revolving line of credit
 
(77,533,609)
(2,617,606)
(139,397)
Proceeds from term debt
 
45,000,000 
Principal payments on term debt
 
(1,800,000)
Net cash (used) provided by financing activities
 
209,052,574 
149,722,138 
(12,835,748)
Net Change in Cash and Cash Equivalents
 
7,040,576 
(10,385,102)
282,483 
Cash and Cash Equivalents at beginning of period
 
7,578,164 
17,963,266 
17,680,783 
Cash and Cash Equivalents at end of period
 
14,618,740 
7,578,164 
17,963,266 
Parent Company [Member]
 
 
 
 
Net cash provided by (used in) operating activities
 
18,060,382 
(2,047,777)
(8,040,654)
Proceeds from sale of leased property held for sale
 
7,678,246 
Increase in financing notes receivable
 
(90,000,000)
Principal payment on financing note receivable
 
2,570,000 
Investment in consolidated subsidiaries
 
(261,597,946)
(96,570,263)
(1,651,956)
Cash distributions from consolidated subsidiaries
 
23,392,442 
18,600,000 
19,300,000 
Net cash (used) provided by in investing activities
 
(227,957,258)
(168,010,935)
17,685,955 
Debt financing costs
 
(1,439,929)
(1,600,908)
(30,002)
Net offering proceeds on Series A preferred stock
 
54,210,476 
Net offering proceeds on common stock
 
73,184,679 
141,797,913 
(523,094)
Net proceeds of convertible debt
 
111,262,500 
Dividends paid on Series A preferred stock
 
(3,503,125)
Dividends paid on common stock
 
(28,528,224)
(15,187,976)
(8,946,941)
Advances on revolving line of credit
 
42,000,000 
32,000,000 
Payments on revolving line of credit
 
(74,000,000)
Proceeds from term debt
 
45,000,000 
Principal payments on term debt
 
(1,800,000)
Net cash (used) provided by financing activities
 
216,386,377 
157,009,029 
(9,500,037)
Net Change in Cash and Cash Equivalents
 
6,489,501 
(13,049,683)
145,264 
Cash and Cash Equivalents at beginning of period
 
3,599,935 
16,649,618 
16,504,354 
Cash and Cash Equivalents at end of period
 
$ 10,089,436 
$ 3,599,935 
$ 16,649,618 
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Supplemental Cash Flow Information (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income taxes paid (net of refunds)
$ 747,406 
$ 3,260,576 
$ 4,637,068 
Change in accounts payable and accrued expenses related to acquisition expenditures
(614,880)
270,615 
(1,545,163)
Change in accounts payable and accrued expenses related to the issuance of common equity
(72,685)
72,685 
(523,094)
Change in accounts payable and accrued expenses related to debt financing costs
(43,039)
(176,961)
116,383 
Reinvestment of distributions by common stockholders in additional common shares
 
140,108 
108,119 
Parent Company [Member]
 
 
 
Income taxes paid (net of refunds)
314,728 
192,938 
3,761,161 
Change in accounts payable and accrued expenses related to acquisition expenditures
(344,065)
(1,407,724)
Change in accounts payable and accrued expenses related to the issuance of common equity
(72,685)
72,685 
(523,094)
Change in accounts payable and accrued expenses related to debt financing costs
(30,607)
(176,961)
220,000 
Reinvestment of distributions by common stockholders in additional common shares
$ 817,915 
$ 140,108 
$ 108,119 
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Additional Information (Details) (Parent Company [Member], USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Parent Company [Member]
 
 
 
Cash dividends paid
$ 23,392,442 
$ 18,600,000 
$ 19,300,000 
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Details) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
 
 
 
 
Initial Cost to Company, Land
$ 120,355,063 
 
 
 
Initial Cost to Company, Building & Fixtures
412,740,415 
 
 
 
Cost Capitalized Subsequent to Acquisition, Improvements
10,000,000 
 
 
 
Gross Amount Carried at Close of Period, Land
120,355,063 
 
 
 
Gross Amount Carried at Close of Period, Building & Fixtures
422,740,415 
 
 
 
Gross Amount Carried at Close of Period, Total
543,095,478 
293,823,903 
244,975,206 
244,686,333 
Accumulated Depreciation
33,869,263 
25,295,958 
12,754,588 
1,607,624 
Investment in Real Estate, net
509,226,215 
 
 
 
Encumbrances
105,732,000 
 
 
 
Grand Isle Gathering System [Member]
 
 
 
 
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
 
 
 
 
Initial Cost to Company, Land
960,000 
 
 
 
Initial Cost to Company, Building & Fixtures
258,471,397 
 
 
 
Cost Capitalized Subsequent to Acquisition, Improvements
 
 
 
Gross Amount Carried at Close of Period, Land
960,000 
 
 
 
Gross Amount Carried at Close of Period, Building & Fixtures
258,471,397 
 
 
 
Gross Amount Carried at Close of Period, Total
259,431,397 
 
 
 
Accumulated Depreciation
4,317,769 
 
 
 
Investment in Real Estate, net
255,113,628 
 
 
 
Encumbrances
35,864,789 
 
 
 
Portland Terminal Facility [Member]
 
 
 
 
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
 
 
 
 
Initial Cost to Company, Land
13,700,000 
 
 
 
Initial Cost to Company, Building & Fixtures
27,961,956 
 
 
 
Cost Capitalized Subsequent to Acquisition, Improvements
10,000,000 
 
 
 
Gross Amount Carried at Close of Period, Land
13,700,000 
 
 
 
Gross Amount Carried at Close of Period, Building & Fixtures
37,961,956 
 
 
 
Gross Amount Carried at Close of Period, Total
51,661,956 
 
 
 
Accumulated Depreciation
2,625,606 
 
 
 
Investment in Real Estate, net
49,036,350 
 
 
 
Encumbrances
7,141,946 
 
 
 
UPS [Member]
 
 
 
 
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
 
 
 
 
Initial Cost to Company, Land
210,000 
 
 
 
Initial Cost to Company, Building & Fixtures
1,188,000 
 
 
 
Cost Capitalized Subsequent to Acquisition, Improvements
 
 
 
Gross Amount Carried at Close of Period, Land
210,000 
 
 
 
Gross Amount Carried at Close of Period, Building & Fixtures
1,188,000 
 
 
 
Gross Amount Carried at Close of Period, Total
1,398,000 
 
 
 
Accumulated Depreciation
32,670 
 
 
 
Investment in Real Estate, net
1,365,330 
 
 
 
Encumbrances
193,265 
 
 
 
Pinedale Liquids Gathering System [Member]
 
 
 
 
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
 
 
 
 
Initial Cost to Company, Land
105,485,063 
 
 
 
Initial Cost to Company, Building & Fixtures
125,119,062 
 
 
 
Cost Capitalized Subsequent to Acquisition, Improvements
 
 
 
Gross Amount Carried at Close of Period, Land
105,485,063 
 
 
 
Gross Amount Carried at Close of Period, Building & Fixtures
125,119,062 
 
 
 
Gross Amount Carried at Close of Period, Total
230,604,125 
 
 
 
Accumulated Depreciation
26,893,218 
 
 
 
Investment in Real Estate, net
203,710,907 
 
 
 
Encumbrances
$ 62,532,000 
 
 
 
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - Reconciliation of Real Estate (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Investment in real estate:
 
 
 
Balance, beginning of year
$ 293,823,903 
$ 244,975,206 
$ 244,686,333 
Addition: Acquisitions and developments
263,398,424 
48,848,697 
288,873 
Deduction: Dispositions and other
(14,126,849)
Balance, end of year
543,095,478 
293,823,903 
244,975,206 
Accumulated depreciation:
 
 
 
Balance, beginning of year
25,295,958 
12,754,588 
1,607,624 
Addition: Depreciation
15,021,908 
12,541,370 
11,146,964 
Deduction: Dispositions and other
(6,448,603)
Balance, end of year
$ 33,869,263 
$ 25,295,958 
$ 12,754,588 
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - Additional Information (Details) (USD $)
12 Months Ended
Dec. 31, 2015
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
 
Federal income tax basis
$ 9,646,148 
Pinedale Liquids Gathering System [Member]
 
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
 
Acquisition costs
2,557,910 
Portland Terminal Facility [Member]
 
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
 
Acquisition costs
1,777,956 
Grand Isle Gathering System [Member]
 
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
 
Acquisition costs
1,931,396 
Building and Improvement, Asset retirement obligation
12,500,000 
Accumulated Depreciation, Asset retirement obligation
202,536 
Regions Credit Facility [Member]
 
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
 
Amount outstanding
$ 43,200,000 
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Mortgage Loans on Real Estate [Line Items]
 
Face Value
$ 20,300,000 
Carrying Amount of Mortgage
6,877,021 
Principal Amount of Loans Subject to Delinquent Principal or Interest
15,300,000 
Campbell County - Wyoming (Reed, Gillette, Lemay) [Member] |
First Mortgage [Member]
 
Mortgage Loans on Real Estate [Line Items]
 
Interest Rate
12.00% 
Monthly Payment Amount
Face Value
12,000,000 
Carrying Amount of Mortgage
1,857,000 
Principal Amount of Loans Subject to Delinquent Principal or Interest
12,000,000 
Campbell County - Wyoming (Reed, Gillette, Lemay) [Member] |
Second Mortgage [Member]
 
Mortgage Loans on Real Estate [Line Items]
 
Interest Rate
12.00% 
Monthly Payment Amount
Face Value
3,300,000 
Carrying Amount of Mortgage
Principal Amount of Loans Subject to Delinquent Principal or Interest
3,300,000 
Billings, Dunn, and McKenzie Counties, North Dakota (Morlock Well) [Member] |
First Mortgage [Member]
 
Mortgage Loans on Real Estate [Line Items]
 
Interest Rate
12.00% 
Monthly Payment Amount
40,000 
Face Value
4,000,000 
Carrying Amount of Mortgage
3,993,376 
Principal Amount of Loans Subject to Delinquent Principal or Interest
Billings, Dunn, and McKenzie Counties, North Dakota (Morlock Well) [Member] |
Second Mortgage [Member]
 
Mortgage Loans on Real Estate [Line Items]
 
Interest Rate
13.00% 
Monthly Payment Amount
10,833 
Face Value
1,000,000 
Carrying Amount of Mortgage
1,026,645 
Principal Amount of Loans Subject to Delinquent Principal or Interest
$ 0 
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE - Reconciliation of Mortgage Loans (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Mortgage Loans on Real Estate [Abstract]
 
 
 
Beginning balance
$ 20,435,170 
$ 0 
$ 0 
Additions:
 
 
 
New loans
20,300,000 
Net deferred costs
(8,211)
(86,508)
Interest receivable
302,395 
220,349 
Total Additions
294,184 
20,433,841 
Deductions:
 
 
 
Principal repayments
100,000 
Amortization of deferred costs
(6,804)
1,329 
Principal, Interest and Deferred Costs Write Down
13,759,137 
Total deductions
13,852,333 
1,329 
Ending balance
$ 6,877,021 
$ 20,435,170 
$ 0