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Summary of Leased Properties, Major Tenants and Lease Terms | |||
Property | Grand Isle Gathering System | Pinedale LGS(1) | Portland Terminal Facility |
Location | Gulf of Mexico/Louisiana | Pinedale, WY | Portland, OR |
Tenant | Energy XXI GIGS Services, LLC | Ultra Wyoming LGS, LLC | Arc Terminals Holdings LLC |
Asset Description | Approximately 153 miles of offshore pipeline with total capacity of 120 thousand Bbls/d, including a 16-acre onshore terminal and saltwater disposal system | Approximately 150 miles of pipelines and four central storage facilities | A 39-acre rail and marine facility property adjacent to the Willamette River with 84 tanks and total storage capacity of approximately 1.5 million barrels |
Date Acquired | June 2015 | December 2012 | January 2014 |
Initial Lease Term | 11 years | 15 years | 15 years |
Renewal Option | equal to the lesser of 9-years or 75 percent of the remaining useful life | 5-year terms | 5-year terms |
Current Monthly Rent Payments | 7/1/16 - 6/30/17: $2,826,250 7/1/17 - 6/30/18: $2,854,667 | $1,741,933 | $513,355 |
Initial Estimated Useful Life | 27 years | 26 years | 30 years |
(1) Non-Controlling Interest Partner, Prudential, funded a portion of the Pinedale LGS acquisition and, as a limited partner, holds 18.95 percent of the economic interest in Pinedale LP. The general partner, Pinedale GP, a wholly-owned subsidiary of the Company, holds the remaining 81.05 percent of the economic interest. |
Future Minimum Lease Receipts (1) | ||||
Years Ending December 31, | Amount | |||
2017 | $ | 45,937,056 | ||
2018 | 61,356,965 | |||
2019 | 63,750,535 | |||
2020 | 70,919,225 | |||
2021 | 77,101,146 | |||
Thereafter | 376,854,030 | |||
Total | $ | 695,918,957 | ||
(1)Future minimum lease receipts include base rents for the Portland Terminal Facility through its initial 15-year term. The lessee has a purchase option on the facility beginning in February 2017, which it can exercise with 90-days notice, as well as lease termination options on the fifth and tenth anniversaries of the lease. If exercised, the purchase option and termination options are subject to additional payment provisions and termination fees prescribed under the lease. |
As a Percentage of (1) | ||||||||
Leased Properties | Lease Revenues | |||||||
For the Three Months Ended | ||||||||
March 31, 2017 | December 31, 2016 | March 31, 2017 | March 31, 2016 | |||||
Pinedale LGS | 39.8% | 39.8% | 30.6% | 30.4% | ||||
Grand Isle Gathering System | 50.1% | 50.0% | 59.6% | 59.8% | ||||
Portland Terminal Facility | 9.9% | 9.9% | 9.7% | 9.7% | ||||
(1) Insignificant leases are not presented; thus percentages may not sum to 100%. |
For the Three Months Ended | |||||||
March 31, 2017 | March 31, 2016 | ||||||
Depreciation Expense | |||||||
GIGS | $ | 2,438,649 | $ | 2,143,722 | |||
Pinedale | 2,217,360 | 2,217,360 | |||||
Portland Terminal Facility | 318,915 | (113,659 | ) | ||||
United Property Systems | 9,059 | 7,425 | |||||
Total Depreciation Expense | $ | 4,983,983 | $ | 4,254,848 | |||
Amortization Expense - Deferred Lease Costs | |||||||
GIGS | $ | 7,641 | $ | 7,641 | |||
Pinedale | 15,342 | 15,342 | |||||
Total Amortization Expense - Deferred Lease Costs | $ | 22,983 | $ | 22,983 | |||
ARO Accretion Expense | |||||||
GIGS | $ | 160,629 | $ | 184,082 | |||
Total ARO Accretion Expense | $ | 160,629 | $ | 184,082 |
March 31, 2017 | December 31, 2016 | ||||||
Net Deferred Lease Costs | |||||||
GIGS | $ | 282,806 | $ | 290,447 | |||
Pinedale | 657,743 | 673,085 | |||||
Total Deferred Lease Costs, net | $ | 940,549 | $ | 963,532 |
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Deferred Tax Assets and Liabilities | ||||||||
March 31, 2017 | December 31, 2016 | |||||||
Deferred Tax Assets: | ||||||||
Net operating loss carryforwards | $ | 1,209,892 | $ | 1,144,818 | ||||
Net unrealized loss on investment securities | 272,474 | 61,430 | ||||||
Cost recovery of leased and fixed assets | 705,505 | 739,502 | ||||||
Loan Loss Provision | 608,086 | 608,086 | ||||||
Other loss carryforwards | 3,536,701 | 3,187,181 | ||||||
Sub-total | $ | 6,332,658 | $ | 5,741,017 | ||||
Deferred Tax Liabilities: | ||||||||
Basis reduction of investment in partnerships | $ | (2,195,747 | ) | $ | (2,158,746 | ) | ||
Cost recovery of leased and fixed assets | (2,079,776 | ) | (1,823,982 | ) | ||||
Sub-total | $ | (4,275,523 | ) | $ | (3,982,728 | ) | ||
Total net deferred tax asset | $ | 2,057,135 | $ | 1,758,289 |
Income Tax Expense (Benefit) | ||||||||
For the Three Months Ended | ||||||||
March 31, 2017 | March 31, 2016 | |||||||
Application of statutory income tax rate | $ | 2,567,905 | $ | 747,599 | ||||
State income taxes, net of federal tax (benefit) | (35,437 | ) | (83,260 | ) | ||||
Federal Tax Attributable to Income of Real Estate Investment Trust | (2,865,074 | ) | (1,919,465 | ) | ||||
Total income tax expense (benefit) | $ | (332,606 | ) | $ | (1,255,126 | ) |
Components of Income Tax Expense (Benefit) | ||||||||
For the Three Months Ended | ||||||||
March 31, 2017 | March 31, 2016 | |||||||
Current tax expense (benefit) | ||||||||
Federal | $ | (30,469 | ) | $ | (627,197 | ) | ||
State (net of federal tax benefit) | (3,291 | ) | (50,534 | ) | ||||
Total current tax expense (benefit) | $ | (33,760 | ) | $ | (677,731 | ) | ||
Deferred tax expense (benefit) | ||||||||
Federal | $ | (266,700 | ) | $ | (544,669 | ) | ||
State (net of federal tax benefit) | (32,146 | ) | (32,726 | ) | ||||
Total deferred tax expense (benefit) | $ | (298,846 | ) | $ | (577,395 | ) | ||
Total income tax expense (benefit), net | $ | (332,606 | ) | $ | (1,255,126 | ) |
Aggregate Cost of Securities for Income Tax Purposes (Unaudited) | ||||||||
March 31, 2017 | December 31, 2016 | |||||||
Aggregate cost for federal income tax purposes | $ | 4,049,249 | $ | 4,327,077 | ||||
Gross unrealized appreciation | 4,959,447 | 5,408,242 | ||||||
Gross unrealized depreciation | — | — | ||||||
Net unrealized appreciation | $ | 4,959,447 | $ | 5,408,242 |
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Property and Equipment | ||||||||
March 31, 2017 | December 31, 2016 | |||||||
Land | $ | 580,000 | $ | 580,000 | ||||
Natural gas pipeline | 124,288,156 | 124,288,156 | ||||||
Vehicles and trailers | 570,267 | 570,267 | ||||||
Office equipment and computers | 267,095 | 267,095 | ||||||
Gross property and equipment | $ | 125,705,518 | $ | 125,705,518 | ||||
Less: accumulated depreciation | (10,131,025 | ) | (9,292,712 | ) | ||||
Net property and equipment | $ | 115,574,493 | $ | 116,412,806 |
For the Three Months Ended | |||||||
March 31, 2017 | March 31, 2016 | ||||||
Depreciation Expense | $ | 838,313 | $ | 834,905 |
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March 31, 2017 | ||||||||||||||||
March 31, 2017 | Fair Value | |||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | ||||||||||||||||
Other equity securities | $ | 8,563,297 | $ | — | $ | — | $ | 8,563,297 | ||||||||
Interest Rate Swap Derivative | 50,689 | — | 50,689 | — | ||||||||||||
Total Assets | $ | 8,613,986 | $ | — | $ | 50,689 | $ | 8,563,297 |
December 31, 2016 | ||||||||||||||||
December 31, 2016 | Fair Value | |||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | ||||||||||||||||
Other equity securities | $ | 9,287,209 | $ | — | $ | — | $ | 9,287,209 | ||||||||
Interest Rate Swap Derivative | 19,950 | — | 19,950 | — | ||||||||||||
Total Assets | $ | 9,307,159 | $ | — | $ | 19,950 | $ | 9,287,209 |
Level 3 Rollforward | ||||||||||||||||||||||||||||
For the Three Months Ended March 31, 2017 | 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 | $ | 9,287,209 | $ | — | $ | — | $ | (544,208 | ) | $ | (179,704 | ) | $ | 8,563,297 | $ | (544,208 | ) | |||||||||||
Total | $ | 9,287,209 | $ | — | $ | — | $ | (544,208 | ) | $ | (179,704 | ) | $ | 8,563,297 | $ | (544,208 | ) | |||||||||||
For the Three Months Ended March 31, 2016 | ||||||||||||||||||||||||||||
Other equity securities | $ | 8,393,683 | $ | — | $ | — | $ | (1,672,081 | ) | $ | 115,840 | $ | 6,837,442 | $ | (1,672,081 | ) | ||||||||||||
Total | $ | 8,393,683 | $ | — | $ | — | $ | (1,672,081 | ) | $ | 115,840 | $ | 6,837,442 | $ | (1,672,081 | ) | ||||||||||||
(1) Located in Net realized and unrealized gain on other equity securities in the Consolidated Statements of Income |
March 31, 2017 | December 31, 2016 | |||||||
(Unaudited) | (Unaudited) | |||||||
Assets | ||||||||
Current assets | $ | 16,182 | $ | 20,412 | ||||
Noncurrent assets | 696,341 | 698,745 | ||||||
Total Assets | $ | 712,523 | $ | 719,157 | ||||
Liabilities | ||||||||
Current liabilities | $ | 13,593 | $ | 14,718 | ||||
Noncurrent liabilities | 268,891 | 268,805 | ||||||
Total Liabilities | $ | 282,484 | $ | 283,523 | ||||
Partner's equity | 430,039 | 435,634 | ||||||
Total liabilities and partner's equity | $ | 712,523 | $ | 719,157 |
For the Three Months Ended | ||||||||
(Unaudited) | ||||||||
March 31, 2017 | March 31, 2016 | |||||||
Revenues | $ | 25,925 | $ | 26,067 | ||||
Operating expenses | 22,471 | 22,072 | ||||||
Income (Loss) from Operations | $ | 3,454 | $ | 3,995 | ||||
Other income | 1,910 | 2,374 | ||||||
Net Income | $ | 5,364 | $ | 6,369 | ||||
Less: Net Income attributable to non-controlling interests | (3,130 | ) | (4,007 | ) | ||||
Net Income attributable to Partner's Capital | $ | 2,234 | $ | 2,362 |
Carrying and Fair Value Amounts | ||||||||||||||||||
Level within fair value hierarchy | March 31, 2017 | December 31, 2016 | ||||||||||||||||
Carrying Amount (1) | Fair Value | Carrying Amount | Fair Value | |||||||||||||||
Financial Assets: | ||||||||||||||||||
Cash and cash equivalents | Level 1 | $ | 11,375,702 | $ | 11,375,702 | $ | 7,895,084 | $ | 7,895,084 | |||||||||
Financing notes receivable (Note 4) | Level 3 | $ | 1,500,000 | $ | 1,500,000 | $ | 1,500,000 | $ | 1,500,000 | |||||||||
Financial Liabilities: | ||||||||||||||||||
Secured Credit Facilities | Level 2 | $ | 86,992,738 | $ | 86,992,738 | $ | 89,387,985 | $ | 89,387,985 | |||||||||
Unsecured convertible senior notes | Level 1 | $ | 111,441,691 | $ | 127,300,380 | $ | 111,244,895 | $ | 129,527,940 | |||||||||
(1) The carrying value of debt balances are presented net of unamortized original issuance discount and debt issuance costs. |
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Total Commitment or Original Principal | Quarterly Principal Payments | March 31, 2017 | December 31, 2016 | ||||||||||||||||||||
Maturity Date | Amount Outstanding | Interest Rate | Amount Outstanding | Interest Rate | |||||||||||||||||||
7% Unsecured Convertible Senior Notes | $ | 115,000,000 | $ | — | 6/15/2020 | $ | 114,000,000 | 7.00 | % | $ | 114,000,000 | 7.00 | % | ||||||||||
CorEnergy Secured Credit Facility: | |||||||||||||||||||||||
CorEnergy Revolver | $ | 105,000,000 | $ | — | 12/15/2019 | 44,000,000 | 3.99 | % | 44,000,000 | 3.76 | % | ||||||||||||
CorEnergy Term Loan | $ | 45,000,000 | $ | 1,615,000 | 12/15/2019 | 35,125,000 | 3.98 | % | 36,740,000 | 3.74 | % | ||||||||||||
MoGas Revolver | $ | 3,000,000 | $ | — | 12/15/2019 | — | 3.98 | % | — | 3.77 | % | ||||||||||||
Omega Line of Credit | $ | 1,500,000 | $ | — | 7/31/2017 | — | 4.98 | % | — | 4.77 | % | ||||||||||||
Pinedale Secured Credit Facility: | |||||||||||||||||||||||
$58.5M Term Loan – related party (1) | $ | 11,085,750 | $ | 167,139 | 3/30/2021 | 8,061,844 | 8.00 | % | 8,860,577 | 8.00 | % | ||||||||||||
Total Debt | $ | 201,186,844 | $ | 203,600,577 | |||||||||||||||||||
Less: | |||||||||||||||||||||||
Unamortized deferred financing costs (2) | $ | 350,976 | $ | 381,531 | |||||||||||||||||||
Unamortized discount on 7% Convertible Senior Notes | 2,401,439 | 2,586,166 | |||||||||||||||||||||
Long-term debt, net of deferred financing costs | $ | 198,434,429 | $ | 200,632,880 | |||||||||||||||||||
Debt due within one year | $ | 7,128,556 | $ | 7,128,556 | |||||||||||||||||||
(1) $47,414,250 of the original $58.5 million term loan is payable to CorEnergy under the same terms, and eliminates in consolidation. | |||||||||||||||||||||||
(2) A portion of the unamortized deferred financing costs, related to our revolving credit facilities, are included in Deferred Costs in the Assets section of the Consolidated Balance Sheets. See the next table for deferred financing costs included in the Asset section of the Consolidated Balance Sheets. |
Deferred Financing Costs, net (1) | ||||||||
March 31, 2017 | December 31, 2016 | |||||||
CorEnergy Credit Facility | $ | 1,914,929 | $ | 2,168,518 | ||||
(1) This is the portion of deferred financing costs which relate to a revolving credit facility and are not presented as a reduction to Long-term debt but rather as Deferred Costs in the Asset section of the Consolidated Balance Sheets. |
Deferred Financing Cost Amortization Expense(1)(2) | |||||||
For the Three Months Ended | |||||||
March 31, 2017 | March 31, 2016 | ||||||
CorEnergy Credit Facility | $ | 272,074 | $ | 262,302 | |||
Pinedale Credit Facility | — | 156,330 | |||||
Total Deferred Debt Cost Amortization | $ | 272,074 | $ | 418,632 | |||
(1) Amortization of deferred debt issuance costs is included in interest expense in the Consolidated Statements of Income. | |||||||
(2) For the amount of deferred debt costs amortization relating to the Convertible Notes included in the Consolidated Statements of Income, see the Convertible Debt footnote. |
Total Remaining Contractual Payments | ||||||||||||||||
Year | CorEnergy Revolver | CorEnergy Term Loan | Pinedale Credit Facility | Total | ||||||||||||
2017 | $ | — | $ | 4,845,000 | $ | 501,416 | $ | 5,346,416 | ||||||||
2018 | — | 6,460,000 | 668,556 | 7,128,556 | ||||||||||||
2019 | 44,000,000 | 23,820,000 | 668,556 | 68,488,556 | ||||||||||||
2020 | 668,556 | 668,556 | ||||||||||||||
2021 | — | — | 5,554,760 | 5,554,760 | ||||||||||||
Thereafter | — | — | — | — | ||||||||||||
Total | $ | 44,000,000 | $ | 35,125,000 | $ | 8,061,844 | $ | 87,186,844 |
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Convertible Note Interest Expense | ||||||||
For the Three Months Ended | ||||||||
March 31, 2017 | March 31, 2016 | |||||||
7% Convertible Notes | $ | 1,995,000 | $ | 2,012,500 | ||||
Discount Amortization | 184,728 | 188,235 | ||||||
Deferred Debt Issuance Amortization | 12,069 | 12,255 | ||||||
Total | $ | 2,191,797 | $ | 2,212,990 |
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Summary of Leased Properties, Major Tenants and Lease Terms | |||
Property | Grand Isle Gathering System | Pinedale LGS(1) | Portland Terminal Facility |
Location | Gulf of Mexico/Louisiana | Pinedale, WY | Portland, OR |
Tenant | Energy XXI GIGS Services, LLC | Ultra Wyoming LGS, LLC | Arc Terminals Holdings LLC |
Asset Description | Approximately 153 miles of offshore pipeline with total capacity of 120 thousand Bbls/d, including a 16-acre onshore terminal and saltwater disposal system | Approximately 150 miles of pipelines and four central storage facilities | A 39-acre rail and marine facility property adjacent to the Willamette River with 84 tanks and total storage capacity of approximately 1.5 million barrels |
Date Acquired | June 2015 | December 2012 | January 2014 |
Initial Lease Term | 11 years | 15 years | 15 years |
Renewal Option | equal to the lesser of 9-years or 75 percent of the remaining useful life | 5-year terms | 5-year terms |
Current Monthly Rent Payments | 7/1/16 - 6/30/17: $2,826,250 7/1/17 - 6/30/18: $2,854,667 | $1,741,933 | $513,355 |
Initial Estimated Useful Life | 27 years | 26 years | 30 years |
(1) Non-Controlling Interest Partner, Prudential, funded a portion of the Pinedale LGS acquisition and, as a limited partner, holds 18.95 percent of the economic interest in Pinedale LP. The general partner, Pinedale GP, a wholly-owned subsidiary of the Company, holds the remaining 81.05 percent of the economic interest. |
Future Minimum Lease Receipts (1) | ||||
Years Ending December 31, | Amount | |||
2017 | $ | 45,937,056 | ||
2018 | 61,356,965 | |||
2019 | 63,750,535 | |||
2020 | 70,919,225 | |||
2021 | 77,101,146 | |||
Thereafter | 376,854,030 | |||
Total | $ | 695,918,957 | ||
(1)Future minimum lease receipts include base rents for the Portland Terminal Facility through its initial 15-year term. The lessee has a purchase option on the facility beginning in February 2017, which it can exercise with 90-days notice, as well as lease termination options on the fifth and tenth anniversaries of the lease. If exercised, the purchase option and termination options are subject to additional payment provisions and termination fees prescribed under the lease. |
As a Percentage of (1) | ||||||||
Leased Properties | Lease Revenues | |||||||
For the Three Months Ended | ||||||||
March 31, 2017 | December 31, 2016 | March 31, 2017 | March 31, 2016 | |||||
Pinedale LGS | 39.8% | 39.8% | 30.6% | 30.4% | ||||
Grand Isle Gathering System | 50.1% | 50.0% | 59.6% | 59.8% | ||||
Portland Terminal Facility | 9.9% | 9.9% | 9.7% | 9.7% | ||||
(1) Insignificant leases are not presented; thus percentages may not sum to 100%. |
For the Three Months Ended | |||||||
March 31, 2017 | March 31, 2016 | ||||||
Depreciation Expense | |||||||
GIGS | $ | 2,438,649 | $ | 2,143,722 | |||
Pinedale | 2,217,360 | 2,217,360 | |||||
Portland Terminal Facility | 318,915 | (113,659 | ) | ||||
United Property Systems | 9,059 | 7,425 | |||||
Total Depreciation Expense | $ | 4,983,983 | $ | 4,254,848 | |||
Amortization Expense - Deferred Lease Costs | |||||||
GIGS | $ | 7,641 | $ | 7,641 | |||
Pinedale | 15,342 | 15,342 | |||||
Total Amortization Expense - Deferred Lease Costs | $ | 22,983 | $ | 22,983 | |||
ARO Accretion Expense | |||||||
GIGS | $ | 160,629 | $ | 184,082 | |||
Total ARO Accretion Expense | $ | 160,629 | $ | 184,082 |
March 31, 2017 | December 31, 2016 | ||||||
Net Deferred Lease Costs | |||||||
GIGS | $ | 282,806 | $ | 290,447 | |||
Pinedale | 657,743 | 673,085 | |||||
Total Deferred Lease Costs, net | $ | 940,549 | $ | 963,532 |
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Deferred Tax Assets and Liabilities | ||||||||
March 31, 2017 | December 31, 2016 | |||||||
Deferred Tax Assets: | ||||||||
Net operating loss carryforwards | $ | 1,209,892 | $ | 1,144,818 | ||||
Net unrealized loss on investment securities | 272,474 | 61,430 | ||||||
Cost recovery of leased and fixed assets | 705,505 | 739,502 | ||||||
Loan Loss Provision | 608,086 | 608,086 | ||||||
Other loss carryforwards | 3,536,701 | 3,187,181 | ||||||
Sub-total | $ | 6,332,658 | $ | 5,741,017 | ||||
Deferred Tax Liabilities: | ||||||||
Basis reduction of investment in partnerships | $ | (2,195,747 | ) | $ | (2,158,746 | ) | ||
Cost recovery of leased and fixed assets | (2,079,776 | ) | (1,823,982 | ) | ||||
Sub-total | $ | (4,275,523 | ) | $ | (3,982,728 | ) | ||
Total net deferred tax asset | $ | 2,057,135 | $ | 1,758,289 |
Income Tax Expense (Benefit) | ||||||||
For the Three Months Ended | ||||||||
March 31, 2017 | March 31, 2016 | |||||||
Application of statutory income tax rate | $ | 2,567,905 | $ | 747,599 | ||||
State income taxes, net of federal tax (benefit) | (35,437 | ) | (83,260 | ) | ||||
Federal Tax Attributable to Income of Real Estate Investment Trust | (2,865,074 | ) | (1,919,465 | ) | ||||
Total income tax expense (benefit) | $ | (332,606 | ) | $ | (1,255,126 | ) |
Components of Income Tax Expense (Benefit) | ||||||||
For the Three Months Ended | ||||||||
March 31, 2017 | March 31, 2016 | |||||||
Current tax expense (benefit) | ||||||||
Federal | $ | (30,469 | ) | $ | (627,197 | ) | ||
State (net of federal tax benefit) | (3,291 | ) | (50,534 | ) | ||||
Total current tax expense (benefit) | $ | (33,760 | ) | $ | (677,731 | ) | ||
Deferred tax expense (benefit) | ||||||||
Federal | $ | (266,700 | ) | $ | (544,669 | ) | ||
State (net of federal tax benefit) | (32,146 | ) | (32,726 | ) | ||||
Total deferred tax expense (benefit) | $ | (298,846 | ) | $ | (577,395 | ) | ||
Total income tax expense (benefit), net | $ | (332,606 | ) | $ | (1,255,126 | ) |
Aggregate Cost of Securities for Income Tax Purposes (Unaudited) | ||||||||
March 31, 2017 | December 31, 2016 | |||||||
Aggregate cost for federal income tax purposes | $ | 4,049,249 | $ | 4,327,077 | ||||
Gross unrealized appreciation | 4,959,447 | 5,408,242 | ||||||
Gross unrealized depreciation | — | — | ||||||
Net unrealized appreciation | $ | 4,959,447 | $ | 5,408,242 |
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Property and Equipment | ||||||||
March 31, 2017 | December 31, 2016 | |||||||
Land | $ | 580,000 | $ | 580,000 | ||||
Natural gas pipeline | 124,288,156 | 124,288,156 | ||||||
Vehicles and trailers | 570,267 | 570,267 | ||||||
Office equipment and computers | 267,095 | 267,095 | ||||||
Gross property and equipment | $ | 125,705,518 | $ | 125,705,518 | ||||
Less: accumulated depreciation | (10,131,025 | ) | (9,292,712 | ) | ||||
Net property and equipment | $ | 115,574,493 | $ | 116,412,806 |
For the Three Months Ended | |||||||
March 31, 2017 | March 31, 2016 | ||||||
Depreciation Expense | $ | 838,313 | $ | 834,905 |
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March 31, 2017 | ||||||||||||||||
March 31, 2017 | Fair Value | |||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | ||||||||||||||||
Other equity securities | $ | 8,563,297 | $ | — | $ | — | $ | 8,563,297 | ||||||||
Interest Rate Swap Derivative | 50,689 | — | 50,689 | — | ||||||||||||
Total Assets | $ | 8,613,986 | $ | — | $ | 50,689 | $ | 8,563,297 |
December 31, 2016 | ||||||||||||||||
December 31, 2016 | Fair Value | |||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets: | ||||||||||||||||
Other equity securities | $ | 9,287,209 | $ | — | $ | — | $ | 9,287,209 | ||||||||
Interest Rate Swap Derivative | 19,950 | — | 19,950 | — | ||||||||||||
Total Assets | $ | 9,307,159 | $ | — | $ | 19,950 | $ | 9,287,209 |
Level 3 Rollforward | ||||||||||||||||||||||||||||
For the Three Months Ended March 31, 2017 | 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 | $ | 9,287,209 | $ | — | $ | — | $ | (544,208 | ) | $ | (179,704 | ) | $ | 8,563,297 | $ | (544,208 | ) | |||||||||||
Total | $ | 9,287,209 | $ | — | $ | — | $ | (544,208 | ) | $ | (179,704 | ) | $ | 8,563,297 | $ | (544,208 | ) | |||||||||||
For the Three Months Ended March 31, 2016 | ||||||||||||||||||||||||||||
Other equity securities | $ | 8,393,683 | $ | — | $ | — | $ | (1,672,081 | ) | $ | 115,840 | $ | 6,837,442 | $ | (1,672,081 | ) | ||||||||||||
Total | $ | 8,393,683 | $ | — | $ | — | $ | (1,672,081 | ) | $ | 115,840 | $ | 6,837,442 | $ | (1,672,081 | ) | ||||||||||||
(1) Located in Net realized and unrealized gain on other equity securities in the Consolidated Statements of Income |
March 31, 2017 | December 31, 2016 | |||||||
(Unaudited) | (Unaudited) | |||||||
Assets | ||||||||
Current assets | $ | 16,182 | $ | 20,412 | ||||
Noncurrent assets | 696,341 | 698,745 | ||||||
Total Assets | $ | 712,523 | $ | 719,157 | ||||
Liabilities | ||||||||
Current liabilities | $ | 13,593 | $ | 14,718 | ||||
Noncurrent liabilities | 268,891 | 268,805 | ||||||
Total Liabilities | $ | 282,484 | $ | 283,523 | ||||
Partner's equity | 430,039 | 435,634 | ||||||
Total liabilities and partner's equity | $ | 712,523 | $ | 719,157 |
For the Three Months Ended | ||||||||
(Unaudited) | ||||||||
March 31, 2017 | March 31, 2016 | |||||||
Revenues | $ | 25,925 | $ | 26,067 | ||||
Operating expenses | 22,471 | 22,072 | ||||||
Income (Loss) from Operations | $ | 3,454 | $ | 3,995 | ||||
Other income | 1,910 | 2,374 | ||||||
Net Income | $ | 5,364 | $ | 6,369 | ||||
Less: Net Income attributable to non-controlling interests | (3,130 | ) | (4,007 | ) | ||||
Net Income attributable to Partner's Capital | $ | 2,234 | $ | 2,362 |
Carrying and Fair Value Amounts | ||||||||||||||||||
Level within fair value hierarchy | March 31, 2017 | December 31, 2016 | ||||||||||||||||
Carrying Amount (1) | Fair Value | Carrying Amount | Fair Value | |||||||||||||||
Financial Assets: | ||||||||||||||||||
Cash and cash equivalents | Level 1 | $ | 11,375,702 | $ | 11,375,702 | $ | 7,895,084 | $ | 7,895,084 | |||||||||
Financing notes receivable (Note 4) | Level 3 | $ | 1,500,000 | $ | 1,500,000 | $ | 1,500,000 | $ | 1,500,000 | |||||||||
Financial Liabilities: | ||||||||||||||||||
Secured Credit Facilities | Level 2 | $ | 86,992,738 | $ | 86,992,738 | $ | 89,387,985 | $ | 89,387,985 | |||||||||
Unsecured convertible senior notes | Level 1 | $ | 111,441,691 | $ | 127,300,380 | $ | 111,244,895 | $ | 129,527,940 | |||||||||
(1) The carrying value of debt balances are presented net of unamortized original issuance discount and debt issuance costs. |
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Total Commitment or Original Principal | Quarterly Principal Payments | March 31, 2017 | December 31, 2016 | ||||||||||||||||||||
Maturity Date | Amount Outstanding | Interest Rate | Amount Outstanding | Interest Rate | |||||||||||||||||||
7% Unsecured Convertible Senior Notes | $ | 115,000,000 | $ | — | 6/15/2020 | $ | 114,000,000 | 7.00 | % | $ | 114,000,000 | 7.00 | % | ||||||||||
CorEnergy Secured Credit Facility: | |||||||||||||||||||||||
CorEnergy Revolver | $ | 105,000,000 | $ | — | 12/15/2019 | 44,000,000 | 3.99 | % | 44,000,000 | 3.76 | % | ||||||||||||
CorEnergy Term Loan | $ | 45,000,000 | $ | 1,615,000 | 12/15/2019 | 35,125,000 | 3.98 | % | 36,740,000 | 3.74 | % | ||||||||||||
MoGas Revolver | $ | 3,000,000 | $ | — | 12/15/2019 | — | 3.98 | % | — | 3.77 | % | ||||||||||||
Omega Line of Credit | $ | 1,500,000 | $ | — | 7/31/2017 | — | 4.98 | % | — | 4.77 | % | ||||||||||||
Pinedale Secured Credit Facility: | |||||||||||||||||||||||
$58.5M Term Loan – related party (1) | $ | 11,085,750 | $ | 167,139 | 3/30/2021 | 8,061,844 | 8.00 | % | 8,860,577 | 8.00 | % | ||||||||||||
Total Debt | $ | 201,186,844 | $ | 203,600,577 | |||||||||||||||||||
Less: | |||||||||||||||||||||||
Unamortized deferred financing costs (2) | $ | 350,976 | $ | 381,531 | |||||||||||||||||||
Unamortized discount on 7% Convertible Senior Notes | 2,401,439 | 2,586,166 | |||||||||||||||||||||
Long-term debt, net of deferred financing costs | $ | 198,434,429 | $ | 200,632,880 | |||||||||||||||||||
Debt due within one year | $ | 7,128,556 | $ | 7,128,556 | |||||||||||||||||||
(1) $47,414,250 of the original $58.5 million term loan is payable to CorEnergy under the same terms, and eliminates in consolidation. | |||||||||||||||||||||||
(2) A portion of the unamortized deferred financing costs, related to our revolving credit facilities, are included in Deferred Costs in the Assets section of the Consolidated Balance Sheets. See the next table for deferred financing costs included in the Asset section of the Consolidated Balance Sheets. |
Deferred Financing Cost Amortization Expense(1)(2) | |||||||
For the Three Months Ended | |||||||
March 31, 2017 | March 31, 2016 | ||||||
CorEnergy Credit Facility | $ | 272,074 | $ | 262,302 | |||
Pinedale Credit Facility | — | 156,330 | |||||
Total Deferred Debt Cost Amortization | $ | 272,074 | $ | 418,632 | |||
(1) Amortization of deferred debt issuance costs is included in interest expense in the Consolidated Statements of Income. | |||||||
(2) For the amount of deferred debt costs amortization relating to the Convertible Notes included in the Consolidated Statements of Income, see the Convertible Debt footnote. |
Deferred Financing Costs, net (1) | ||||||||
March 31, 2017 | December 31, 2016 | |||||||
CorEnergy Credit Facility | $ | 1,914,929 | $ | 2,168,518 | ||||
(1) This is the portion of deferred financing costs which relate to a revolving credit facility and are not presented as a reduction to Long-term debt but rather as Deferred Costs in the Asset section of the Consolidated Balance Sheets. |
Total Remaining Contractual Payments | ||||||||||||||||
Year | CorEnergy Revolver | CorEnergy Term Loan | Pinedale Credit Facility | Total | ||||||||||||
2017 | $ | — | $ | 4,845,000 | $ | 501,416 | $ | 5,346,416 | ||||||||
2018 | — | 6,460,000 | 668,556 | 7,128,556 | ||||||||||||
2019 | 44,000,000 | 23,820,000 | 668,556 | 68,488,556 | ||||||||||||
2020 | 668,556 | 668,556 | ||||||||||||||
2021 | — | — | 5,554,760 | 5,554,760 | ||||||||||||
Thereafter | — | — | — | — | ||||||||||||
Total | $ | 44,000,000 | $ | 35,125,000 | $ | 8,061,844 | $ | 87,186,844 |
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Convertible Note Interest Expense | ||||||||
For the Three Months Ended | ||||||||
March 31, 2017 | March 31, 2016 | |||||||
7% Convertible Notes | $ | 1,995,000 | $ | 2,012,500 | ||||
Discount Amortization | 184,728 | 188,235 | ||||||
Deferred Debt Issuance Amortization | 12,069 | 12,255 | ||||||
Total | $ | 2,191,797 | $ | 2,212,990 |
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