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• | Corridor Public Holdings, Inc. and its wholly-owned subsidiary Corridor Private Holdings, Inc ("CorPrivate"), hold our securities portfolio. |
• | Mowood Corridor, Inc. and its wholly-owned subsidiary, Mowood, LLC ("Mowood"), which is the holding company for one of our operating companies, Omega Pipeline Company, LLC (“Omega”). |
• | Corridor MoGas, Inc. ("CorMoGas") holds two other operating companies, MoGas Pipeline, LLC ("MoGas") and United Property Systems, LLC ("UPS"). |
• | CorEnergy BBWS, Inc. ("BBWS"), CorPrivate and Corridor Leeds Path West, Inc. ("Leeds Path West") 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 collectibility 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 for transportation services and 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 actual volume. 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 in the revenue section. 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 fees 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 | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Leased asset | $ | 14,126,849 | $ | 14,126,849 | ||||
Less: accumulated depreciation | (6,448,603 | ) | (5,878,933 | ) | ||||
Net leased asset held for sale | $ | 7,678,246 | $ | 8,247,916 |
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As a Percentage of | |||||||||
Leased Properties | Lease Revenues | ||||||||
As of | As of | For the Three Months Ended | |||||||
March 31, 2015 | December 31, 2014 | March 31, 2015 | March 31, 2014 | ||||||
Pinedale LGS | 78.68% | 79.17% | 70.36% | 75.07% | |||||
Portland Terminal Facility | 17.93% | 17.24% | 20.68% | 15.49% | |||||
Public Service of New Mexico (1) | 2.87% | 3.07% | 8.70% | 9.44% |
Ultra Petroleum Corp. Summary Consolidated Balance Sheets (in thousands) | |||||||
March 31, 2015 | December 31, 2014 | ||||||
(Unaudited) | |||||||
Current assets | $ | 270,073 | $ | 277,138 | |||
Non-current assets | 3,995,957 | 3,948,552 | |||||
Total Assets | $ | 4,266,030 | $ | 4,225,690 | |||
Current liabilities | $ | 346,179 | $ | 445,718 | |||
Non-current liabilities | 3,682,624 | 3,568,312 | |||||
Total Liabilities | $ | 4,028,803 | $ | 4,014,030 | |||
Shareholder's equity (deficit) | 237,227 | 211,660 | |||||
Total Liabilities and Shareholder's Equity | $ | 4,266,030 | $ | 4,225,690 | |||
Ultra Petroleum Corp. Summary Consolidated Statements of Operations (in thousands) | |||||||
For The Three Months Ended | |||||||
March 31, 2015 | March 31, 2014 | ||||||
(Unaudited) | |||||||
Revenues | $ | 219,309 | $ | 326,299 | |||
Expenses | 189,347 | 154,829 | |||||
Operating Income | 29,962 | 171,470 | |||||
Other (Expense), net | (6,795 | ) | (69,751 | ) | |||
Income before income tax (benefit) provision | 23,167 | 101,719 | |||||
Income tax (benefit) provision | (2,022 | ) | 4 | ||||
Net Income | $ | 25,189 | $ | 101,715 |
Future Minimum Lease Receipts | ||||
Years Ending December 31, | Amount | |||
2015 | $ | 19,886,910 | ||
2016 | 26,515,880 | |||
2017 | 26,515,880 | |||
2018 | 26,515,880 | |||
2019 | 26,623,475 | |||
Thereafter | 225,236,893 | |||
Total | $ | 351,294,918 |
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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 |
Three months ended March 31, 2014 | |||
Total Revenue (1) | $ | 13,328,988 | |
Total Expenses (2) | 8,935,739 | ||
Operating Income | 4,393,249 | ||
Other Income (Expense) (3) | (999,479 | ) | |
Tax Benefit (Expense) (4) | 160,326 | ||
Net Income | 3,554,096 | ||
Less: Net Income attributable to non-controlling interest | 391,114 | ||
Net Income attributable to CORR Stockholders | $ | 3,162,982 | |
Earnings per share: | |||
Basic and Diluted | $ | 0.07 | |
Weighted Average Shares of Common Stock Outstanding: | |||
Basic and Diluted (5) | 44,923,357 |
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Deferred Tax Assets and Liabilities | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Deferred Tax Assets: | ||||||||
Net operating loss carryforwards | $ | (1,033,385 | ) | $ | (679,692 | ) | ||
Cost recovery of leased and fixed assets | (795,444 | ) | (1,042,207 | ) | ||||
Sub-total | $ | (1,828,829 | ) | $ | (1,721,899 | ) | ||
Deferred Tax Liabilities: | ||||||||
Basis reduction of investment in partnerships | $ | 2,661,415 | $ | 2,842,332 | ||||
Net unrealized gain on investment securities | 314,610 | 142,154 | ||||||
Sub-total | 2,976,025 | 2,984,486 | ||||||
Total net deferred tax liability | $ | 1,147,196 | $ | 1,262,587 |
Income Tax Expense (Benefit) | ||||||||
For the Three Months Ended | ||||||||
March 31, 2015 | March 31, 2014 | |||||||
Application of statutory income tax rate | $ | 1,553,434 | $ | 918,346 | ||||
State income taxes, net of federal tax benefit | 37,051 | 42,979 | ||||||
Federal Tax Attributable to Income of Real Estate Investment Trust | (1,270,120 | ) | (447,812 | ) | ||||
Total income tax expense | $ | 320,365 | $ | 513,513 |
Components of Income Tax Expense (Benefit) | ||||||||
For the Three Months Ended | ||||||||
March 31, 2015 | March 31, 2014 | |||||||
Current tax expense | ||||||||
Federal | $ | 391,946 | $ | 784,377 | ||||
State (net of federal tax benefit) | 43,810 | 69,698 | ||||||
Total current tax expense | 435,756 | 854,075 | ||||||
Deferred tax benefit | ||||||||
Federal | (108,632 | ) | (313,843 | ) | ||||
State (net of federal tax benefit) | (6,759 | ) | (26,719 | ) | ||||
Total deferred tax benefit | (115,391 | ) | (340,562 | ) | ||||
Total income tax expense, net | $ | 320,365 | $ | 513,513 |
Aggregate Cost of Securities for Income Tax Purposes | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Aggregate cost for federal income tax purposes | $ | 5,152,653 | $ | 4,218,986 | ||||
Gross unrealized appreciation | 7,649,287 | 7,436,696 | ||||||
Net unrealized appreciation | $ | 7,649,287 | $ | 7,436,696 |
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Property and Equipment | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Land | $ | 580,000 | $ | 580,000 | ||||
Natural gas pipeline | 124,313,621 | 124,297,157 | ||||||
Vehicles and trailers | 506,958 | 506,958 | ||||||
Office equipment and computers | 59,027 | 59,027 | ||||||
Gross property and equipment | 125,459,606 | 125,443,142 | ||||||
Less: accumulated depreciation | (3,455,219 | ) | (2,623,020 | ) | ||||
Net property and equipment | $ | 122,004,387 | $ | 122,820,122 |
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March 31, 2015 | ||||||||||||||||
March 31, 2015 | Fair Value | |||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | ||||||||||||||||
Other equity securities | $ | 10,363,438 | $ | — | $ | — | $ | 10,363,438 | ||||||||
Total Assets | $ | 10,363,438 | $ | — | $ | — | $ | 10,363,438 |
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 Three Months Ended March 31, 2015 | Fair Value Beginning Balance | Acquisitions | Disposals | Total Realized and Unrealized Gains Included in Net Income | Return of Capital Adjustments Impacting Cost Basis of Securities | Fair Value Ending Balance | Changes in Unrealized Gains, Included In Net Income, Relating to Securities Still Held (1) | |||||||||||||||||||||
Other equity securities | $ | 9,217,181 | $ | — | $ | 679,798 | $ | 341,459 | $ | 10,238,438 | $ | 679,798 | ||||||||||||||||
Warrant investment | 355,000 | — | (230,000 | ) | — | 125,000 | (230,000 | ) | ||||||||||||||||||||
Total | $ | 9,572,181 | $ | — | $ | — | $ | 449,798 | $ | 341,459 | $ | 10,363,438 | $ | 449,798 | ||||||||||||||
For The Three Months Ended March 31, 2014 | ||||||||||||||||||||||||||||
Other equity securities | $ | 23,304,321 | $ | — | $ | — | $ | 1,294,182 | $ | (491,260 | ) | $ | 24,107,243 | $ | 1,294,182 | |||||||||||||
Total | $ | 23,304,321 | $ | — | $ | — | $ | 1,294,182 | $ | (491,260 | ) | $ | 24,107,243 | $ | 1,294,182 |
Significant Unobservable Inputs Used To Value Portfolio Investments | ||||||||||||||
March 31, 2014 | ||||||||||||||
Unobservable Inputs | Range | Weighted Average | ||||||||||||
Assets at Fair Value | Fair Value | Valuation Technique | Low | High | ||||||||||
Other equity securities, at fair value | $ | 24,107,243 | Public company historical EBITDA analysis | Historical EBITDA Valuation Multiples | 9.6x | 10.6x | 10.1x | |||||||
Public company projected EBITDA analysis | Projected EBITDA Valuation Multiples | 8.3x | 9.3x | 8.8x | ||||||||||
M&A company analysis | EV/LTM 2012 EBITDA | 8.3x | 9.3x | 8.8x | ||||||||||
Discounted cash flow | Weighted Average Cost of Capital | 9.5x | 14.0% | 11.8% |
March 31, 2015 | December 31, 2014 | |||||||
Assets | ||||||||
Current assets | $ | 21,854 | $ | 25,783 | ||||
Noncurrent assets | 382,670 | 382,957 | ||||||
Total Assets | $ | 404,524 | $ | 408,740 | ||||
Liabilities | ||||||||
Current liabilities | $ | 14,099 | $ | 14,318 | ||||
Noncurrent liabilities | 114,008 | 113,810 | ||||||
Total Liabilities | $ | 128,107 | $ | 128,128 | ||||
Partner's equity | 276,417 | 280,612 | ||||||
Total liabilities and partner's equity | $ | 404,524 | $ | 408,740 |
For The Three Months Ended | ||||||||
March 31, 2015 | March 31, 2014 | |||||||
Revenues | $ | 13,557 | $ | 13,213 | ||||
Operating expenses | 15,128 | 13,584 | ||||||
Other income (expenses) | 3,834 | 3,770 | ||||||
Net income | $ | 2,263 | $ | 3,399 | ||||
EBITDA | $ | 8,034 | $ | 7,500 |
Carrying and Fair Value Amounts | ||||||||||||||||||
Level within fair value hierarchy | March 31, 2015 | December 31, 2014 | ||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||
Financial Assets: | ||||||||||||||||||
Cash and cash equivalents | Level 1 | $ | 26,634,586 | $ | 26,634,586 | $ | 7,578,164 | $ | 7,578,164 | |||||||||
Escrow receivable | Level 2 | $ | 2,438,500 | $ | 2,438,500 | $ | 2,438,500 | $ | 2,438,500 | |||||||||
Financing notes receivable | Level 2 | $ | 20,881,295 | $ | 20,881,295 | $ | 20,687,962 | $ | 20,687,962 | |||||||||
Financial Liabilities: | ||||||||||||||||||
Long-term debt | Level 2 | $ | 66,178,000 | $ | 66,178,000 | $ | 67,060,000 | $ | 67,060,000 | |||||||||
Line of credit | Level 2 | $ | 565,583 | $ | 565,583 | $ | 32,141,277 | $ | 32,141,277 |
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Intangible Lease Asset | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Intangible lease asset | $ | 1,094,771 | $ | 1,094,771 | ||||
Accumulated amortization | (1,094,771 | ) | (1,021,784 | ) | ||||
Net intangible lease asset | $ | — | $ | 72,987 |
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Derivative Financial Instruments Measured At Fair Value on a Recurring Basis | |||||||||||||||
Balance Sheet Classification | Fair Value Hierarchy | ||||||||||||||
Balance Sheet Line Item | Level 1 | Level 2 | Level 3 | ||||||||||||
March 31, 2015 | |||||||||||||||
Hedged derivative asset | Assets | $ | — | $ | 28,025 | $ | — | ||||||||
December 31, 2014 | |||||||||||||||
Hedged derivative asset | Assets | $ | — | $ | 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 Three Months Ended | ||||||
Derivatives in Cash Flow Hedging Relationship | March 31, 2015 | March 31, 2014 | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) | $ | (414,082 | ) | $ | (161,889 | ) |
Amount of Gain (Loss) Reclassified from AOCI on Derivatives (Effective Portion) Recognized in Net Income1 | (73,420 | ) | (74,758 | ) | ||
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion, Amounts Excluded from Effectiveness Testing)1 | (779 | ) | (170 | ) | ||
(1) Included in "Interest Expense" on the face of the Income Statement |
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 March 31, 2015 | $ | 28,025 | $ | — | $ | 28,025 | $ | — | $ | — | $ | 28,025 | ||||||||||||
Offsetting Derivative Assets as of December 31, 2014 | $ | 351,807 | $ | — | $ | 351,807 | $ | — | $ | — | $ | 351,807 |
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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 threshold distribution 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. |
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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 collectibility 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 for transportation services and 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 actual volume. 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 in the revenue section. 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 fees 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 | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Leased asset | $ | 14,126,849 | $ | 14,126,849 | ||||
Less: accumulated depreciation | (6,448,603 | ) | (5,878,933 | ) | ||||
Net leased asset held for sale | $ | 7,678,246 | $ | 8,247,916 |
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As a Percentage of | |||||||||
Leased Properties | Lease Revenues | ||||||||
As of | As of | For the Three Months Ended | |||||||
March 31, 2015 | December 31, 2014 | March 31, 2015 | March 31, 2014 | ||||||
Pinedale LGS | 78.68% | 79.17% | 70.36% | 75.07% | |||||
Portland Terminal Facility | 17.93% | 17.24% | 20.68% | 15.49% | |||||
Public Service of New Mexico (1) | 2.87% | 3.07% | 8.70% | 9.44% |
Ultra Petroleum Corp. Summary Consolidated Balance Sheets (in thousands) | |||||||
March 31, 2015 | December 31, 2014 | ||||||
(Unaudited) | |||||||
Current assets | $ | 270,073 | $ | 277,138 | |||
Non-current assets | 3,995,957 | 3,948,552 | |||||
Total Assets | $ | 4,266,030 | $ | 4,225,690 | |||
Current liabilities | $ | 346,179 | $ | 445,718 | |||
Non-current liabilities | 3,682,624 | 3,568,312 | |||||
Total Liabilities | $ | 4,028,803 | $ | 4,014,030 | |||
Shareholder's equity (deficit) | 237,227 | 211,660 | |||||
Total Liabilities and Shareholder's Equity | $ | 4,266,030 | $ | 4,225,690 | |||
Ultra Petroleum Corp. Summary Consolidated Statements of Operations (in thousands) | |||||||
For The Three Months Ended | |||||||
March 31, 2015 | March 31, 2014 | ||||||
(Unaudited) | |||||||
Revenues | $ | 219,309 | $ | 326,299 | |||
Expenses | 189,347 | 154,829 | |||||
Operating Income | 29,962 | 171,470 | |||||
Other (Expense), net | (6,795 | ) | (69,751 | ) | |||
Income before income tax (benefit) provision | 23,167 | 101,719 | |||||
Income tax (benefit) provision | (2,022 | ) | 4 | ||||
Net Income | $ | 25,189 | $ | 101,715 |
Future Minimum Lease Receipts | ||||
Years Ending December 31, | Amount | |||
2015 | $ | 19,886,910 | ||
2016 | 26,515,880 | |||
2017 | 26,515,880 | |||
2018 | 26,515,880 | |||
2019 | 26,623,475 | |||
Thereafter | 225,236,893 | |||
Total | $ | 351,294,918 |
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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 |
Three months ended March 31, 2014 | |||
Total Revenue (1) | $ | 13,328,988 | |
Total Expenses (2) | 8,935,739 | ||
Operating Income | 4,393,249 | ||
Other Income (Expense) (3) | (999,479 | ) | |
Tax Benefit (Expense) (4) | 160,326 | ||
Net Income | 3,554,096 | ||
Less: Net Income attributable to non-controlling interest | 391,114 | ||
Net Income attributable to CORR Stockholders | $ | 3,162,982 | |
Earnings per share: | |||
Basic and Diluted | $ | 0.07 | |
Weighted Average Shares of Common Stock Outstanding: | |||
Basic and Diluted (5) | 44,923,357 |
|
Deferred Tax Assets and Liabilities | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Deferred Tax Assets: | ||||||||
Net operating loss carryforwards | $ | (1,033,385 | ) | $ | (679,692 | ) | ||
Cost recovery of leased and fixed assets | (795,444 | ) | (1,042,207 | ) | ||||
Sub-total | $ | (1,828,829 | ) | $ | (1,721,899 | ) | ||
Deferred Tax Liabilities: | ||||||||
Basis reduction of investment in partnerships | $ | 2,661,415 | $ | 2,842,332 | ||||
Net unrealized gain on investment securities | 314,610 | 142,154 | ||||||
Sub-total | 2,976,025 | 2,984,486 | ||||||
Total net deferred tax liability | $ | 1,147,196 | $ | 1,262,587 |
Income Tax Expense (Benefit) | ||||||||
For the Three Months Ended | ||||||||
March 31, 2015 | March 31, 2014 | |||||||
Application of statutory income tax rate | $ | 1,553,434 | $ | 918,346 | ||||
State income taxes, net of federal tax benefit | 37,051 | 42,979 | ||||||
Federal Tax Attributable to Income of Real Estate Investment Trust | (1,270,120 | ) | (447,812 | ) | ||||
Total income tax expense | $ | 320,365 | $ | 513,513 |
Components of Income Tax Expense (Benefit) | ||||||||
For the Three Months Ended | ||||||||
March 31, 2015 | March 31, 2014 | |||||||
Current tax expense | ||||||||
Federal | $ | 391,946 | $ | 784,377 | ||||
State (net of federal tax benefit) | 43,810 | 69,698 | ||||||
Total current tax expense | 435,756 | 854,075 | ||||||
Deferred tax benefit | ||||||||
Federal | (108,632 | ) | (313,843 | ) | ||||
State (net of federal tax benefit) | (6,759 | ) | (26,719 | ) | ||||
Total deferred tax benefit | (115,391 | ) | (340,562 | ) | ||||
Total income tax expense, net | $ | 320,365 | $ | 513,513 |
Aggregate Cost of Securities for Income Tax Purposes | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Aggregate cost for federal income tax purposes | $ | 5,152,653 | $ | 4,218,986 | ||||
Gross unrealized appreciation | 7,649,287 | 7,436,696 | ||||||
Net unrealized appreciation | $ | 7,649,287 | $ | 7,436,696 |
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Property and Equipment | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Land | $ | 580,000 | $ | 580,000 | ||||
Natural gas pipeline | 124,313,621 | 124,297,157 | ||||||
Vehicles and trailers | 506,958 | 506,958 | ||||||
Office equipment and computers | 59,027 | 59,027 | ||||||
Gross property and equipment | 125,459,606 | 125,443,142 | ||||||
Less: accumulated depreciation | (3,455,219 | ) | (2,623,020 | ) | ||||
Net property and equipment | $ | 122,004,387 | $ | 122,820,122 |
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March 31, 2015 | ||||||||||||||||
March 31, 2015 | Fair Value | |||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | ||||||||||||||||
Other equity securities | $ | 10,363,438 | $ | — | $ | — | $ | 10,363,438 | ||||||||
Total Assets | $ | 10,363,438 | $ | — | $ | — | $ | 10,363,438 |
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 Three Months Ended March 31, 2015 | Fair Value Beginning Balance | Acquisitions | Disposals | Total Realized and Unrealized Gains Included in Net Income | Return of Capital Adjustments Impacting Cost Basis of Securities | Fair Value Ending Balance | Changes in Unrealized Gains, Included In Net Income, Relating to Securities Still Held (1) | |||||||||||||||||||||
Other equity securities | $ | 9,217,181 | $ | — | $ | 679,798 | $ | 341,459 | $ | 10,238,438 | $ | 679,798 | ||||||||||||||||
Warrant investment | 355,000 | — | (230,000 | ) | — | 125,000 | (230,000 | ) | ||||||||||||||||||||
Total | $ | 9,572,181 | $ | — | $ | — | $ | 449,798 | $ | 341,459 | $ | 10,363,438 | $ | 449,798 | ||||||||||||||
For The Three Months Ended March 31, 2014 | ||||||||||||||||||||||||||||
Other equity securities | $ | 23,304,321 | $ | — | $ | — | $ | 1,294,182 | $ | (491,260 | ) | $ | 24,107,243 | $ | 1,294,182 | |||||||||||||
Total | $ | 23,304,321 | $ | — | $ | — | $ | 1,294,182 | $ | (491,260 | ) | $ | 24,107,243 | $ | 1,294,182 |
Carrying and Fair Value Amounts | ||||||||||||||||||
Level within fair value hierarchy | March 31, 2015 | December 31, 2014 | ||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||
Financial Assets: | ||||||||||||||||||
Cash and cash equivalents | Level 1 | $ | 26,634,586 | $ | 26,634,586 | $ | 7,578,164 | $ | 7,578,164 | |||||||||
Escrow receivable | Level 2 | $ | 2,438,500 | $ | 2,438,500 | $ | 2,438,500 | $ | 2,438,500 | |||||||||
Financing notes receivable | Level 2 | $ | 20,881,295 | $ | 20,881,295 | $ | 20,687,962 | $ | 20,687,962 | |||||||||
Financial Liabilities: | ||||||||||||||||||
Long-term debt | Level 2 | $ | 66,178,000 | $ | 66,178,000 | $ | 67,060,000 | $ | 67,060,000 | |||||||||
Line of credit | Level 2 | $ | 565,583 | $ | 565,583 | $ | 32,141,277 | $ | 32,141,277 |
Significant Unobservable Inputs Used To Value Portfolio Investments | ||||||||||||||
March 31, 2014 | ||||||||||||||
Unobservable Inputs | Range | Weighted Average | ||||||||||||
Assets at Fair Value | Fair Value | Valuation Technique | Low | High | ||||||||||
Other equity securities, at fair value | $ | 24,107,243 | Public company historical EBITDA analysis | Historical EBITDA Valuation Multiples | 9.6x | 10.6x | 10.1x | |||||||
Public company projected EBITDA analysis | Projected EBITDA Valuation Multiples | 8.3x | 9.3x | 8.8x | ||||||||||
M&A company analysis | EV/LTM 2012 EBITDA | 8.3x | 9.3x | 8.8x | ||||||||||
Discounted cash flow | Weighted Average Cost of Capital | 9.5x | 14.0% | 11.8% |
March 31, 2015 | December 31, 2014 | |||||||
Assets | ||||||||
Current assets | $ | 21,854 | $ | 25,783 | ||||
Noncurrent assets | 382,670 | 382,957 | ||||||
Total Assets | $ | 404,524 | $ | 408,740 | ||||
Liabilities | ||||||||
Current liabilities | $ | 14,099 | $ | 14,318 | ||||
Noncurrent liabilities | 114,008 | 113,810 | ||||||
Total Liabilities | $ | 128,107 | $ | 128,128 | ||||
Partner's equity | 276,417 | 280,612 | ||||||
Total liabilities and partner's equity | $ | 404,524 | $ | 408,740 |
March 31, 2015 | December 31, 2014 | |||||||
Assets | ||||||||
Current assets | $ | 21,854 | $ | 25,783 | ||||
Noncurrent assets | 382,670 | 382,957 | ||||||
Total Assets | $ | 404,524 | $ | 408,740 | ||||
Liabilities | ||||||||
Current liabilities | $ | 14,099 | $ | 14,318 | ||||
Noncurrent liabilities | 114,008 | 113,810 | ||||||
Total Liabilities | $ | 128,107 | $ | 128,128 | ||||
Partner's equity | 276,417 | 280,612 | ||||||
Total liabilities and partner's equity | $ | 404,524 | $ | 408,740 |
For The Three Months Ended | ||||||||
March 31, 2015 | March 31, 2014 | |||||||
Revenues | $ | 13,557 | $ | 13,213 | ||||
Operating expenses | 15,128 | 13,584 | ||||||
Other income (expenses) | 3,834 | 3,770 | ||||||
Net income | $ | 2,263 | $ | 3,399 | ||||
EBITDA | $ | 8,034 | $ | 7,500 |
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Intangible Lease Asset | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Intangible lease asset | $ | 1,094,771 | $ | 1,094,771 | ||||
Accumulated amortization | (1,094,771 | ) | (1,021,784 | ) | ||||
Net intangible lease asset | $ | — | $ | 72,987 |
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Derivative Financial Instruments Measured At Fair Value on a Recurring Basis | |||||||||||||||
Balance Sheet Classification | Fair Value Hierarchy | ||||||||||||||
Balance Sheet Line Item | Level 1 | Level 2 | Level 3 | ||||||||||||
March 31, 2015 | |||||||||||||||
Hedged derivative asset | Assets | $ | — | $ | 28,025 | $ | — | ||||||||
December 31, 2014 | |||||||||||||||
Hedged derivative asset | Assets | $ | — | $ | 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 Three Months Ended | ||||||
Derivatives in Cash Flow Hedging Relationship | March 31, 2015 | March 31, 2014 | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivative (Effective Portion) | $ | (414,082 | ) | $ | (161,889 | ) |
Amount of Gain (Loss) Reclassified from AOCI on Derivatives (Effective Portion) Recognized in Net Income1 | (73,420 | ) | (74,758 | ) | ||
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion, Amounts Excluded from Effectiveness Testing)1 | (779 | ) | (170 | ) | ||
(1) Included in "Interest Expense" on the face of the Income Statement |
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 March 31, 2015 | $ | 28,025 | $ | — | $ | 28,025 | $ | — | $ | — | $ | 28,025 | ||||||||||||
Offsetting Derivative Assets as of December 31, 2014 | $ | 351,807 | $ | — | $ | 351,807 | $ | — | $ | — | $ | 351,807 |
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