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• | 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. |
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• | 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. |
• | 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) |
• | 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. |
• | 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. |
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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 |
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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. |
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 |
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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 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. |
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• | 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. |
• | 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. |
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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 | ) |
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 |
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 |
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 |
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 |
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 | $ | — | $ | — |
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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 |
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• | 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. |
• | 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. |
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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 | ) |
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 |
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 |
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 |
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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 |
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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 |
Year | Total Payments | ||
2016 | $ | 62,532,000 | |
2017 | — | ||
2018 | — | ||
2019 | — | ||
2020 | — | ||
Thereafter | — | ||
Total | $ | 62,532,000 |
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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 | $ | — | $ | — |
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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) |
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% |
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. |
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 |
|
• | 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. |
|
|
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 |
|
|
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. |
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. |
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. |
|
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. |
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 |
|
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. |
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 |
|
• | 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. |
• | 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) |
• | 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. |
• | 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. |
|
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 |
|
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. |
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 |
|
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 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. |
|
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 | ) |
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 |
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 |
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 |
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 | $ | — | $ | — |
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 | ||||||||
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 |
|
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 | ) |
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 |
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 |
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 |
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 |
|
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 |
|
Year | Total Payments | ||
2016 | $ | 62,532,000 | |
2017 | — | ||
2018 | — | ||
2019 | — | ||
2020 | — | ||
Thereafter | — | ||
Total | $ | 62,532,000 |
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 | ||||||||||||
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 | $ | — | $ | — |
|
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) |
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% |
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. |
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 |
|
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 |
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