CORENERGY INFRASTRUCTURE TRUST, INC., 10-K filed on 3/2/2017
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2016
Feb. 28, 2017
Jun. 30, 2016
Document and Entity Information [Abstract]
 
 
 
Entity Registrant Name
CorEnergy Infrastructure Trust, Inc. 
 
 
Entity Central Index Key
0001347652 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2016 
 
 
Amendment Flag
false 
 
 
Document Fiscal Year Focus
2016 
 
 
Document Fiscal Period Focus
Q4 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 340,158,808 
Entity Common Stock, Shares Outstanding
 
11,893,147 
 
Consolidated Balance Sheets (USD $)
Dec. 31, 2016
Dec. 31, 2015
Assets
 
 
Leased property, net of accumulated depreciation of $52,219,717 and $33,869,263
$ 489,258,369 
$ 509,226,215 
Property and equipment, net of accumulated depreciation of $9,292,712 and $5,948,988
116,412,806 
119,629,978 
Financing notes and related accrued interest receivable, net of reserve of $4,100,000 and $13,784,137
1,500,000 
7,675,626 
Other equity securities, at fair value
9,287,209 
8,393,683 
Cash and cash equivalents
7,895,084 
14,618,740 
Accounts and other receivables
19,415,666 
10,431,240 
Deferred costs, net of accumulated amortization of $2,261,151 and $2,717,609
3,132,050 
4,187,271 
Prepaid expenses and other assets
354,230 
491,024 
Deferred tax asset
1,758,289 
1,606,976 
Goodwill
1,718,868 
1,718,868 
Total Assets
650,732,571 
677,979,621 
Liabilities and Equity
 
 
Secured credit facilities, net (including $8,860,577 and $0 with related party)
89,387,985 
105,440,842 
Unsecured convertible senior notes, net of discount and debt issuance costs of $2,755,105 and $3,576,090
111,244,895 
111,423,910 
Asset retirement obligation
11,882,943 
12,839,042 
Accounts payable and other accrued liabilities
2,416,283 
2,317,774 
Management fees payable
1,735,024 
1,763,747 
Unearned revenue
155,961 
Total Liabilities
216,823,091 
233,785,315 
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 issued and outstanding at December 31, 2016, and December 31, 2015
56,250,000 
56,250,000 
Capital stock, non-convertible, $0.001 par value; 11,886,216 and 11,939,697 shares issued and outstanding at December 31, 2016, and December 31, 2015 (100,000,000 shares authorized)
11,886 
11,940 
Additional paid-in capital
350,217,746 
361,581,507 
Accumulated other comprehensive income (loss)
(11,196)
190,797 
Total CorEnergy Equity
406,468,436 
418,034,244 
Non-controlling Interest
27,441,044 
26,160,062 
Total Equity
433,909,480 
444,194,306 
Total Liabilities and Equity
$ 650,732,571 
$ 677,979,621 
Consolidated Balance Sheets (Parenthetical) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Accumulated depreciation, leased property
$ 52,219,717 
$ 33,869,263 
Accumulated depreciation, property and equipment
9,292,712 
5,948,988 
Reserve for financing notes and related accrued interest receivable
4,100,000 
13,784,137 
Accumulated amortization, Deferred costs
2,261,151 
2,717,609 
Secured debt, related party
8,860,577 
Preferred stock, par value (in dollars per share)
$ 0.001 
 
Preferred stock, authorized (in shares)
10,000,000 
 
Capital stock non-convertible, par value (in dollars per share)
$ 0.001 
$ 0.001 
Capital stock non-convertible, shares issued (in shares)
11,886,216 
11,939,697 
Capital stock non-convertible, shares outstanding (in shares)
11,886,216 
11,939,697 
Capital stock non-convertible, shares authorized (in shares)
100,000,000 
100,000,000 
Series A Cumulative Redeemable Preferred Stock [Member]
 
 
Preferred stock interest rate
7.375% 
7.375% 
Preferred Stock, Liquidation Preference
56,250,000 
56,250,000 
Preferred Stock, Liquidation Preference (in dollars per share)
$ 2,500 
$ 2,500 
Preferred stock, par value (in dollars per share)
$ 0.001 
$ 0.001 
Preferred stock, authorized (in shares)
10,000,000 
10,000,000 
Preferred stock, issued (in shares)
22,500 
22,500 
Preferred stock, outstanding (in shares)
22,500 
22,500 
Convertible Debt [Member]
 
 
Discount and debt issuance costs
$ 2,755,105 
$ 3,576,090 
Consolidated Statements of Income and Comprehensive Income (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Revenue
 
 
 
Lease revenue
$ 67,994,130 
$ 48,086,072 
$ 28,223,765 
Transportation and distribution revenue
21,094,112 
14,345,269 
1,298,093 
Financing revenue
162,344 
1,697,550 
1,077,813 
Sales revenue
7,160,044 
9,708,902 
Total Revenue
89,250,586 
71,288,935 
40,308,573 
Expenses
 
 
 
Transportation and distribution expenses
6,463,348 
4,609,725 
1,299,782 
Cost of Sales
2,819,212 
7,291,968 
General and administrative
12,270,380 
9,745,704 
7,872,753 
Depreciation, amortization and ARO accretion expense
22,522,871 
18,766,551 
13,195,255 
Provision for loan loss and disposition
5,014,466 
13,800,000 
Total Expenses
46,271,065 
49,725,329 
29,659,758 
Operating Income
42,979,521 
21,563,606 
10,648,815 
Other Income (Expense)
 
 
 
Net distributions and dividend income
1,140,824 
1,270,755 
1,836,783 
Net realized and unrealized gain (loss) on other equity securities
824,482 
(1,063,613)
(466,026)
Interest expense
(14,417,839)
(9,781,184)
(3,675,122)
Total Other Expense
(12,452,533)
(9,574,042)
(2,304,365)
Income before income taxes
30,526,988 
11,989,564 
8,344,450 
Taxes
 
 
 
Current tax expense (benefit)
(313,107)
922,010 
3,843,937 
Deferred tax benefit
(151,313)
(2,869,563)
(4,069,500)
Income tax benefit, net
(464,420)
(1,947,553)
(225,563)
Net Income
30,991,408 
13,937,117 
8,570,013 
Less: Net Income attributable to non-controlling interest
1,328,208 
1,617,206 
1,556,157 
Net Income attributable to CorEnergy Stockholders
29,663,200 
12,319,911 
7,013,856 
Preferred dividend requirements
4,148,437 
3,848,828 
Net Income attributable to Common Stockholders
25,514,763 
8,471,083 
7,013,856 
Other comprehensive income (loss):
 
 
 
Changes in fair value of qualifying hedges attributable to CorEnergy stockholders
(201,993)
(262,505)
(324,101)
Changes in fair value of qualifying hedges attributable to non-controlling interest
(47,226)
(61,375)
(75,780)
Net Change in Other Comprehensive Loss
(249,219)
(323,880)
(399,881)
Total Comprehensive Income
30,742,189 
13,613,237 
8,170,132 
Less: Comprehensive income attributable to non-controlling interest
1,280,982 
1,555,831 
1,480,377 
Comprehensive Income attributable to CorEnergy Stockholders
$ 29,461,207 
$ 12,057,406 
$ 6,689,755 
Earnings Per Common Share:
 
 
 
Basic (in dollars per share)
$ 2.14 
$ 0.79 
$ 1.06 
Diluted (in dollars per share)
$ 2.14 
$ 0.79 
$ 1.06 
Weighted Average Shares of Common Stock Outstanding:
 
 
 
Basic (in shares)
11,901,985 
10,685,892 
6,605,715 
Diluted (in shares)
11,901,985 
10,685,892 
6,605,715 
Dividends declared per share (in dollars per share)
$ 3 
$ 2.75 
$ 2.57 
Consolidated Statements of Equity (USD $)
Total
Capital Stock [Member]
Preferred Stock [Member]
Warrants [Member]
Additional Paid-in Capital [Member]
Accumulated Other Comprehensive Income [Member]
Retained Earnings [Member]
Non-Controlling Interest [Member]
Series A Cumulative Redeemable Preferred Stock [Member]
Series A Cumulative Redeemable Preferred Stock [Member]
Preferred Stock [Member]
Series A Cumulative Redeemable Preferred Stock [Member]
Additional Paid-in Capital [Member]
Beginning balance at Dec. 31, 2013
$ 205,541,370 
$ 4,831 
$ 0 
$ 1,370,700 
$ 173,460,344 
$ 777,403 
$ 1,580,062 
$ 28,348,030 
 
 
 
Beginning balance, (in shares) at Dec. 31, 2013
 
4,831,232 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Net income
8,570,013 
 
 
 
 
 
7,013,856 
1,556,157 
 
 
 
Net change in cash flow hedges
(399,881)
 
 
 
 
(324,101)
 
(75,780)
 
 
 
Total Comprehensive Income
8,170,132 
 
 
 
 
(324,101)
7,013,856 
1,480,377 
 
 
 
Issuance of shares during period, (in shares)
 
4,485,000 
 
 
 
 
 
 
 
 
 
Issuance of shares during period
141,725,228 
4,485 
 
 
141,720,743 
 
 
 
 
 
 
Common stock dividends
(15,328,084)
 
 
 
(6,734,166)
 
(8,593,918)
 
 
 
 
Common stock issued under director's compensation plan (in shares)
 
805 
 
 
 
 
 
 
 
 
 
Common stock issued under director's compensation plan
30,000 
 
 
29,999 
 
 
 
 
 
 
Distributions to Non-controlling interest
(2,737,712)
 
 
 
 
 
 
(2,737,712)
 
 
 
Reinvestment of dividends paid to common stockholders (in shares)
 
3,973 
 
 
 
 
 
 
 
 
 
Reinvestment of dividends paid to common stockholders
140,108 
 
 
140,104 
 
 
 
 
 
 
Warrant expiration
 
 
 
(1,370,700)
1,370,700 
 
 
 
 
 
 
Ending balance at Dec. 31, 2014
337,541,042 
9,321 
309,987,724 
453,302 
27,090,695 
 
 
 
Ending balance, (in shares) at Dec. 31, 2014
 
9,321,010 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Net income
13,937,117 
 
 
 
 
 
12,319,911 
1,617,206 
 
 
 
Net change in cash flow hedges
(323,880)
 
 
 
 
(262,505)
 
(61,375)
 
 
 
Total Comprehensive Income
13,613,237 
 
 
 
 
(262,505)
12,319,911 
1,555,831 
 
 
 
Issuance of shares during period, (in shares)
 
2,587,500 
 
 
 
 
 
 
 
 
 
Issuance of shares during period
73,257,364 
2,587 
 
 
73,254,777 
 
 
 
54,210,476 
56,250,000 
(2,039,524)
Series A preferred stock dividends
(3,503,125)
 
 
 
 
 
(3,503,125)
 
 
 
 
Common stock dividends
(29,346,139)
 
 
 
(20,529,353)
 
(8,816,786)
 
 
 
 
Common stock issued under director's compensation plan (in shares)
 
2,677 
 
 
 
 
 
 
 
 
 
Common stock issued under director's compensation plan
90,000 
 
 
89,997 
 
 
 
 
 
 
Distributions to Non-controlling interest
(2,486,464)
 
 
 
 
 
 
(2,486,464)
 
 
 
Reinvestment of dividends paid to common stockholders (in shares)
 
28,510 
 
 
 
 
 
 
 
 
 
Reinvestment of dividends paid to common stockholders
817,915 
29 
 
 
817,886 
 
 
 
 
 
 
Ending balance at Dec. 31, 2015
444,194,306 
11,940 
56,250,000 
 
361,581,507 
190,797 
26,160,062 
 
 
 
Ending balance, (in shares) at Dec. 31, 2015
11,939,697 
11,939,697 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Net income
30,991,408 
 
 
 
 
 
29,663,200 
1,328,208 
 
 
 
Net change in cash flow hedges
(249,219)
 
 
 
 
(201,993)
 
(47,226)
 
 
 
Total Comprehensive Income
30,742,189 
 
 
 
 
(201,993)
29,663,200 
1,280,982 
 
 
 
Issuance of shares during period, (in shares)
 
 
 
945,594 
 
 
 
 
 
 
 
Repurchase of common stock (in shares)
 
(90,613)
 
 
 
 
 
 
 
 
 
Repurchase of common stock
(2,041,851)
(91)
 
 
(2,041,760)
 
 
 
 
 
 
Series A preferred stock dividends
(4,148,437)
 
 
 
 
 
(4,148,437)
 
 
 
 
Common stock dividends
(35,712,616)
 
 
 
(10,197,853)
 
(25,514,763)
 
 
 
 
Common stock issued under director's compensation plan (in shares)
 
2,551 
 
 
 
 
 
 
 
 
 
Common stock issued under director's compensation plan
60,000 
 
 
59,998 
 
 
 
 
 
 
Reinvestment of dividends paid to common stockholders (in shares)
 
34,581 
 
 
 
 
 
 
 
 
 
Reinvestment of dividends paid to common stockholders
815,889 
35 
 
 
815,854 
 
 
 
 
 
 
Ending balance at Dec. 31, 2016
$ 433,909,480 
$ 11,886 
$ 56,250,000 
 
$ 350,217,746 
$ (11,196)
$ 0 
$ 27,441,044 
 
 
 
Ending balance, (in shares) at Dec. 31, 2016
11,886,216 
11,886,216 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Equity (Parenthetical) (Series A Cumulative Redeemable Preferred Stock [Member])
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Series A Cumulative Redeemable Preferred Stock [Member]
 
 
Preferred stock interest rate
7.375% 
7.375% 
Consolidated Statements of Cash Flow (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Operating Activities
 
 
 
Net Income
$ 30,991,408 
$ 13,937,117 
$ 8,570,013 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Deferred income tax, net
(151,313)
(2,869,563)
(4,069,500)
Depreciation, amortization and ARO accretion
24,548,350 
20,662,297 
14,289,017 
Provision for loan loss
5,014,466 
13,800,000 
Gain on repurchase of convertible debt
(71,702)
Net distributions and dividend income, including recharacterization of income
(117,004)
(371,323)
960,384 
Net realized and unrealized (gain) loss on other equity securities
(781,153)
1,063,613 
(1,357,496)
Unrealized gain on derivative contract
(75,591)
(70,333)
(70,720)
Settlement of derivative contract
(95,319)
Common stock issued under directors compensation plan
60,000 
90,000 
30,000 
Changes in assets and liabilities:
 
 
 
Increase in accounts and other receivables
(8,534,426)
(2,273,092)
(383,306)
Decrease (increase) in financing note accrued interest receivable
95,114 
(355,208)
Decrease (increase) in prepaid expenses and other assets
329,735 
(37,462)
96,743 
(Decrease) increase in management fee payable
(28,723)
599,348 
468,961 
Decrease in accounts payable and other accrued liabilities
(231,151)
(847,683)
(2,276,773)
Increase (decrease) in unearned revenue
155,961 
(711,230)
711,230 
Net cash provided by operating activities
51,108,652 
42,600,618 
16,968,553 
Investing Activities
 
 
 
Proceeds from sale of long-term investment in other equity securities
10,806,879 
Proceeds from assets and liabilities held for sale
644,934 
7,678,246 
Deferred lease costs
(336,141)
Acquisition expenditures
(251,513,344)
(168,204,309)
Purchases of property and equipment, net
(191,926)
(138,918)
(11,970)
Proceeds from asset foreclosure and sale
223,451 
948 
Increase in financing notes receivable
(202,000)
(524,037)
(20,648,714)
Principal payment on financing note receivable
100,000 
Return of capital on distributions received
4,631 
121,578 
981,373 
Net cash provided (used) by investing activities
479,090 
(244,612,616)
(177,075,793)
Financing Activities
 
 
 
Debt financing costs
(193,000)
(1,617,991)
(3,269,429)
Net offering proceeds on Series A preferred stock
54,210,476 
Net offering proceeds on common stock
73,184,679 
141,797,913 
Net offering proceeds on convertible debt
111,262,500 
Repurchases of common stock
(2,041,851)
Repurchases of convertible debt
(899,960)
Dividends paid on Series A preferred stock
(4,148,437)
(3,503,125)
Dividends paid on common stock
(34,896,727)
(28,528,224)
(15,187,976)
Distributions to non-controlling interest
(2,486,464)
(2,737,712)
Advances on revolving line of credit
44,000,000 
45,392,332 
34,676,948 
Payments on revolving line of credit
(77,533,609)
(2,617,606)
Proceeds from term debt
45,000,000 
Principal payments on credit facility
(60,131,423)
(6,328,000)
(2,940,000)
Net cash (used) provided by financing activities
(58,311,398)
209,052,574 
149,722,138 
Net Change in Cash and Cash Equivalents
(6,723,656)
7,040,576 
(10,385,102)
Cash and Cash Equivalents at beginning of period
14,618,740 
7,578,164 
17,963,266 
Cash and Cash Equivalents at end of period
7,895,084 
14,618,740 
7,578,164 
Supplemental Disclosure of Cash Flow Information
 
 
 
Interest paid
12,900,901 
7,873,333 
2,762,903 
Income taxes paid (net of refunds)
37,736 
747,406 
3,260,576 
Non-Cash Investing Activities
 
 
 
Change in accounts and other receivables
(450,000)
Change in accounts payable and accrued expenses related to acquisition expenditures
(614,880)
270,615 
Change in accounts payable and accrued expenses related to issuance of financing and other notes receivable
(39,248)
39,248 
Net change in Assets Held for Sale, Property and equipment, Prepaid expenses and other assets, Accounts payable and other accrued liabilities and Liabilities held for sale
(1,776,549)
Non-Cash Financing Activities
 
 
 
Change in accounts payable and accrued expenses related to the issuance of common equity
(72,685)
72,685 
Change in accounts payable and accrued expenses related to debt financing costs
(43,039)
(176,961)
Reinvestment of distributions by common stockholders in additional common shares
$ 815,889 
$ 817,915 
$ 140,108 
Introduction and Basis of Presentation
INTRODUCTION AND BASIS OF PRESENTATION
INTRODUCTION AND BASIS OF PRESENTATION
Introduction
CorEnergy Infrastructure Trust, Inc. and its subsidiaries (referred to as "CorEnergy" or "the Company"), was organized as a Maryland corporation and commenced operations on December 8, 2005. The Company's common shares are listed on the New York Stock Exchange under the symbol “CORR” and its depositary shares representing Series A Preferred are listed on the New York Stock Exchange under the symbol "CORR PrA".
The Company is primarily focused on acquiring and financing midstream and downstream real estate assets within the U.S. energy infrastructure sector and concurrently entering into long-term triple-net participating leases with energy companies. The Company also may provide other types of capital, including loans secured by energy infrastructure assets. Targeted assets include pipelines, storage tanks, transmission lines, and gathering systems, among others. These sale-leaseback or real property mortgage transactions provide the energy company with a source of capital that is an alternative to other sources such as corporate borrowing, bond offerings, or equity offerings. Many of the Company's leases contain participation features in the financial performance or value of the underlying infrastructure real property asset. The triple-net lease structure requires that the tenant pay all operating expenses of the business conducted by the tenant, including real estate taxes, insurance, utilities, and expenses of maintaining the asset in good working order. CorEnergy considers its investments in these energy infrastructure assets to be a single business segment and report them accordingly in its financial statements.
In 2013 CorEnergy qualified for REIT status, and in March 2014 elected (effective as of January 1, 2013), to be treated as a REIT for federal income tax purposes. Because certain of the Company's assets may not produce REIT-qualifying income or be treated as interests in real property, those assets are held in wholly-owned Taxable REIT Subsidiaries ("TRSs") in order to limit the potential that such assets and income could prevent the Company from qualifying as a REIT. The Company's use of TRSs enables it to continue to engage in certain businesses while complying with REIT qualification requirements and also allows it to retain income generated by these businesses for reinvestment without the requirement of distributing those earnings. In the future, the Company may elect to reorganize and transfer certain assets or operations from its TRSs to the Company or other subsidiaries, including qualified REIT subsidiaries.
Taxable REIT subsidiaries hold the Company's securities portfolio, operating businesses and certain financing notes receivable as follows:
Corridor Public Holdings, Inc. and its wholly-owned subsidiary Corridor Private Holdings, Inc, hold the Company's securities portfolio.
Mowood Corridor, Inc. and its wholly-owned subsidiary, Mowood, LLC, which is the holding company for the Company's operating company, Omega Pipeline Company, LLC.
Corridor MoGas, Inc. holds the operating companies, MoGas Pipeline, LLC and United Property Systems, LLC.
CorEnergy BBWS, Inc., Corridor Private Holdings, Inc., and Corridor Leeds Path West, Inc. may, from time to time, hold financing notes receivable.
Basis of Presentation and Use of Estimates
The accompanying consolidated financial statements include CorEnergy accounts and the accounts of its wholly owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) set forth in the Accounting Standards Codification ("ASC"), as published by the Financial Accounting Standards Board ("FASB"), and with the Securities and Exchange Commission (“SEC”) instructions to Form 10-K. The accompanying consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the periods presented. There were no adjustments that, in the opinion of management, were not of a normal and recurring nature. All intercompany transactions and balances have been eliminated in consolidation, and the net earnings are reduced by the portion of net earnings attributable to non-controlling interests.
Significant Accounting Policies
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES
A. Use of Estimates – The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
B. Leased Property – The Company includes assets subject to lease arrangements within Leased property, net of accumulated depreciation, in the Consolidated Balance Sheets. Lease payments received are reflected in Lease revenue on the Consolidated Statements of Income, net of amortization of any off-market adjustments. Costs in connection with the creation and execution of a lease are capitalized and amortized over the lease term. See Note 3 for further discussion.
C. Property and Equipment – Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of the asset. Expenditures for repairs and maintenance are charged to operations as incurred, and improvements, which extend the useful lives of assets, are capitalized and depreciated over the remaining estimated useful life of the asset. The Company initially records long-lived assets at their purchase price plus any direct acquisition costs, unless the transaction is accounted for as a business combination, in which case the acquisition costs are expensed as incurred. If the transaction is accounted for as a business combination, the Company allocates the purchase price to the acquired tangible and intangible assets and liabilities based on their estimated fair values.
D. Long-Lived Asset Impairment – The Company’s long-lived assets consist primarily of a subsea midstream pipeline system, liquids gathering system, petroleum products terminal, and natural gas pipelines that have been obtained through asset acquisitions and a business combination. Management continually monitors its business, the business environment, and performance of its operations to determine if an event has occurred that indicates that the carrying value of a long-lived asset may be impaired. When a triggering event occurs, which is a determination that involves judgment, management utilizes cash flow projections to assess its ability to recover the carrying value of its assets based on our long-lived assets' ability to generate future cash flows on an undiscounted basis. This differs from the evaluation of goodwill, for which the recoverability assessment utilizes fair value estimates that include discounted cash flows in the estimation process, and accordingly any goodwill impairment recognized may not be indicative of a similar impairment of the related underlying long-lived assets.
Management’s projected cash flows of long-lived assets are generally based on contractual cash flows relating to existing leases that extend many years into the future. If those cash flow projections indicate that the long-lived asset's carrying value is not recoverable, management records an impairment charge for the excess of carrying value of the asset over its fair value. The estimate of fair value considers a number of factors, including the potential value that would be received if the asset were sold, discount rates, and projected cash flows. Due to the imprecise nature of these projections and assumptions, actual results can differ from management’s estimates. There were no impairments of long-lived assets recorded during the years ended December 31, 2016, 2015 or 2014.
E. Financing Notes Receivable – Financing notes receivable are presented at face value plus accrued interest receivable and deferred loan origination costs and net of related direct loan origination income. Each quarter the Company reviews its financing notes receivable to determine if the balances are realizable based on factors affecting the collectability of those balances. Factors may include credit quality, timeliness of required periodic payments, past due status and management discussions with obligors. The Company evaluates the collectability of both interest and principal of each of its loans to determine if an allowance is needed. An allowance will be recorded when based on current information and events, the Company determines it is probable that it will be unable to collect all amounts due according to the existing contractual terms. If the Company does determine an allowance is necessary, the amount deemed uncollectable is expensed in the period of determination. An insignificant delay or shortfall in the amount of payments does not necessarily result in the recording of an allowance. Generally, when interest and/or principal payments on a loan become past due, or if the Company does not otherwise expect the borrower to be able to service its debt and other obligations, the Company will place the loan on non-accrual status and will generally cease recognizing financing revenue on that loan until all principal and interest have been brought current. Interest income recognition is resumed if and when the previously reserved-for financing notes become contractually current and performance has been demonstrated. Payments received subsequent to the recording of an allowance will be recorded as a reduction to principal. During the years, ended December 31, 2016 and 2015, the Company recorded provisions for loan losses of approximately $5.0 million and $13.8 million, respectively. The Company's financing notes receivable are discussed more fully in Note 4.
F. Investment Securities – The Company’s investments in securities are classified as other equity securities and represent interests in private companies which the Company has elected to report at fair value under the fair value option. These investments generally are subject to restrictions on resale, have no established trading market and are valued on a quarterly basis. Because of the inherent uncertainty of valuation, the fair values of such investments, which are determined in accordance with procedures approved by the Company’s Board of Directors, may differ materially from the values that would have been used had a ready market existed for the investments.
The Company determines fair value to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has determined the principal market, or the market in which the Company exits its private portfolio investments with the greatest volume and level of activity, to be the private secondary market. Typically, private companies are bought and sold based on multiples of EBITDA, cash flows, net income, revenues, or in limited cases, book value.
For private company investments, value is often realized through a liquidity event. Therefore, the value of the Company as a whole (enterprise value) at the reporting date often provides the best evidence of the value of the investment and is the initial step for valuing the Company’s privately issued securities. For any one company, enterprise value may best be expressed as a range of fair values, from which a single estimate of fair value will be derived. In determining the enterprise value of a portfolio company, an analysis is prepared consisting of traditional valuation methodologies including market and income approaches. The Company considers some or all of the traditional valuation methods based on the individual circumstances of the portfolio company in order to derive its estimate of enterprise value.
The fair value of investments in private portfolio companies is determined based on various factors, including enterprise value, observable market transactions, such as recent offers to purchase a company, recent transactions involving the purchase or sale of the equity securities of the company, or other liquidation events. The determined equity values may be discounted when the Company has a minority position, or is subject to restrictions on resale, has specific concerns about the receptivity of the capital markets to a specific company at a certain time, or other comparable factors exist.
The Company undertakes a multi-step valuation process each quarter in connection with determining the fair value of private investments. It has retained an independent valuation firm to provide third party valuation consulting services based on procedures that the Company has identified and may ask them to perform from time to time on all or a selection of private investments as determined by the Company. The multi-step valuation process is specific to the level of assurance that the Company requests from the independent valuation firm. For positive assurance, the process is as follows:
The independent valuation firm prepares the valuations and the supporting analysis.
The valuation report is reviewed and approved by senior management.
The Audit Committee of the Board of Directors reviews the supporting analysis and accepts the valuations.
G. Fair Value Measurements – FASB ASC 820, Fair Value Measurements and Disclosure ("ASC 820"), defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Various inputs are used in determining the fair value of the Company’s assets and liabilities. These inputs are summarized in the three broad levels listed below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.)
Level 3 - significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)
See Note 11 for further discussion of the Company’s fair value measurements.
H. Cash and Cash Equivalents – The Company maintains cash balances at financial institutions in amounts that regularly exceed FDIC insured limits. The Company’s cash equivalents are comprised of short-term, liquid money market instruments.
I. Accounts and other receivables – Accounts receivable are presented at face value net of an allowance for doubtful accounts within accounts and other receivables on the balance sheet. Accounts are considered past due based on the terms of sale with the customers. The Company reviews accounts for collectability based on an analysis of specific outstanding receivables, current economic conditions and past collection experience. For the years ended December 31, 2016 and 2015, the Company determined that an allowance for doubtful accounts was not necessary.
Lease receivables are determined according to the terms of the lease agreements entered into by the Company and its lessees, as discussed within Note 3. Lease receivables may also represent timing differences between straight-line revenue recognition and contractual lease receipts and is recorded within Accounts and other receivables on the balance sheet. As of December 31, 2016, lease payments by our tenants have remained timely and without lapse.
J. Goodwill – Goodwill represents the excess of the amount paid for the MoGas business over the fair value of the net identifiable assets acquired. To comply with ASC 350, Intangibles - Goodwill and Other ("ASC 350"), the Company performs an impairment test for goodwill annually, or more frequently in the event that a triggering event has occurred. December 31st is the Company’s annual testing date.
In accordance with ASC 350, a company may elect to perform a qualitative assessment to determine whether the two-step quantitative impairment test is required. If the company elects to perform a qualitative assessment, the two-step quantitative impairment test is required only if the conclusion is that it is more likely than not that the reporting unit's fair value is less than its carrying amount. For the December 31, 2016 annual impairment test, management proceeded directly to the quantitative two-step approach and did not perform a qualitative assessment. Under the two-step approach, Step 1 compares the fair value of the reporting unit to its carrying value. As of the December 31, 2016 testing date, the fair value of the MoGas reporting unit was determined to be greater than its carrying value; therefore, a Step 2 was not required to be completed and no impairment was recorded.
The reporting unit fair value is based upon consideration of various valuation methodologies, one of which is projecting future cash flows discounted at rates commensurate with the risks involved ("Discounted Cash Flow" or "DCF"). Assumptions used in a DCF require the exercise of significant judgment, including judgment about appropriate discount rates and terminal values, growth rates, and the amount and timing of expected future cash flows. Forecasted cash flows require management to make judgments and assumptions, including estimates of future volumes and rates. Declines in volumes or rates from those forecasted, or other changes in assumptions, may result in a change in management's estimate and result in an impairment.
K. Debt Discount and Debt Issuance Costs – Costs incurred for the issuance of new debt are capitalized and amortized into interest expense over the debt term. Issuance costs related to long-term debt are recorded as a direct deduction from the carrying amount of that debt liability, net of accumulated amortization. Issuance costs related to line-of-credit arrangements however, are presented as an asset instead of a direct deduction from the carrying amount of the debt. See Note 12 for further discussion. In accordance with ASC 470, Debt ("ASC 470") the Company recorded its Convertible Senior Notes at the aggregate principal amount, less discount. The Company is amortizing the debt discount over the life of the convertible notes as additional non-cash interest expense utilizing the effective interest method. Refer to Note 13 for additional information.
L. Asset Retirement Obligations – The Company follows ASC 410-20, Asset Retirement Obligations, which requires that an asset retirement obligation (“ARO”) associated with the retirement of a long-lived asset be recognized as a liability in the period in which it is incurred and becomes determinable, with an offsetting increase in the carrying amount of the associated asset. The Company recognized an existing ARO in conjunction with the acquisition of the GIGS in June 2015, which was initially measured at fair value at the acquisition date.
We measure changes in the ARO liability due to passage of time by applying an interest method of allocation to the amount of the liability at the beginning of the period. The increase in the carrying amount of the liability is recognized as an expense classified as an operating item in the statement of income, hereinafter referred to as ARO accretion expense. The Company periodically reassesses the timing and amount of cash flows anticipated associated with the ARO and adjusts the fair value of the liability accordingly under the guidance in ASC 410-20.
The fair value of the obligation at the acquisition date was capitalized as part of the carrying amount of the related long-lived assets and is being depreciated over the asset's remaining useful life. The useful lives of most pipeline gathering systems are primarily derived from available supply resources and ultimate consumption of those resources by end users. Adjustments to the ARO resulting from reassessments of the timing and amount of cash flows will result in changes to the retirement costs capitalized as part of the carrying amount of the asset.
Refer to Note 14 for additional information.
M. Revenue Recognition – Specific recognition policies for the Company’s revenue items are as follows:
Lease revenue – Base rent related to the Company’s leased property is recognized on a straight-line basis over the term of the lease when collectability is reasonably assured. Contingent rent is recognized when it is earned, based on the achievement of specified performance criteria. Rental payments received in advance are classified as unearned revenue and included as a liability within the Consolidated Balance Sheets. Unearned revenue is amortized ratably over the lease period as revenue recognition criteria are met. Rental payments received in arrears are accrued and classified as Lease Receivable and included in assets within the Consolidated Balance Sheets.
Transportation and distribution revenue – This represents revenue related to natural gas transportation, distribution, and supply. Transportation revenues are recognized by MoGas 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. Distribution revenue is recognized by Omega based on agreed upon contractual terms over each annual period during the terms of the contract. Beginning February 1, 2016, due to changes that commenced under a new contract with the Department of Defense ("DOD"), gas sales and cost of (gas) sales are presented on a net basis in the Transportation and distribution revenue line.
Omega is also 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 using either a completed contract, percentage of completion, or cost-plus method based on the level and volume of estimates utilized, as well as the certainty or uncertainty of our ability to collect those revenues. Under the new DOD contract, the annual contracted amount for pipeline maintenance is invoiced monthly by Omega on a straight-line basis. Amounts invoiced in excess of earned revenue are classified as unearned revenue and included as a liability within the Consolidated Balance Sheets.
Financing revenue – Historically, financing notes receivable have been 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.
N. Transportation and distribution expense Included here are both MoGas's costs of operating and maintaining the natural gas transmission line, and Omega's costs of operating and maintaining the natural gas distribution system, including any necessary expansion of the distribution system. These costs are incurred both internally and externally. The internal costs relate to system control, pipeline operations, maintenance, insurance, and taxes. Other internal costs include payroll for employees associated with gas control, field employees, and management. The external costs consist of professional services such as audit and accounting, legal and regulatory, and engineering.
Historically, Omega's amounts paid for gas and propane delivered to customers were presented as cost of sales. Beginning February 1, 2016, under a new contract with the Department of Defense, amounts paid by Omega for gas and propane are netted against sales and are presented in the transportation and distribution revenue line. See paragraph (M) above.
O. Other Income Recognition Specific policies for the Company’s other income items are as follows:
Net distributions and dividend income from investments – Distributions and dividends from investments are recorded on their ex-dates and are reflected as other income within the accompanying Consolidated Statements of Income. Distributions received from the Company’s investments are generally characterized as ordinary income, capital gains and distributions received from investment securities. The portion characterized as return of capital is paid by our investees from their cash flow from operations. The Company records investment income, capital gains and distributions received from investment securities based on estimates made at the time such distributions are received. Such estimates are based on information available from each company and other industry sources. These estimates may subsequently be revised based on information received from the entities after their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Company.
Net realized and unrealized gain (loss) from investments – Securities transactions are accounted for on the date the securities are purchased or sold. Realized gains and losses are reported on an identified cost basis. The Company records investment income and return of capital based on estimates made at the time such distributions are received. Such estimates are based on information available from the portfolio company and other industry sources. These estimates may subsequently be revised based on information received from the portfolio company after their tax reporting periods are concluded, as the actual character of these distributions are not known until after our fiscal year end.
P. Asset Acquisition Expenses – Costs incurred in connection with the research of real property acquisitions not accounted for as business combinations are expensed until it is determined that the acquisition of the real property is probable. Upon such determination, costs incurred in connection with the acquisition of the property are capitalized as described in paragraph (C) above. Deferred costs related to an acquisition that we have determined, based on our judgment, not to pursue are expensed in the period in which such determination is made. Costs incurred in connection with a business combination are expensed as incurred.
Q. Offering Costs – Offering costs related to the issuance of common or preferred stock are charged to additional paid-in capital when the stock is issued.
R. Derivative Instruments and Hedging Activities – The Company uses forward swap contracts primarily to reduce exposure to changes in interest rates on a portion of its variable-rate debt and to provide a cash flow hedge. In accordance with FASB ASC 815, Derivatives and Hedging (“ASC 815”), these derivative contracts are recorded on the balance sheet at fair value. Historically, these derivative instruments have been designated as hedges for accounting purposes. The measurement of the cash flow hedge ineffectiveness has historically been recognized in earnings, when applicable. The effective portion of the gain or loss on qualifying swaps has been reported in accumulated other comprehensive income (loss) ("AOCI"), in accordance with ASC 815. For swaps de-designated as cash flow hedges, changes in fair value of the swaps have been fully recognized in earnings. See Note 15 for further discussion.
S. Earnings Per Share – Basic earnings per share ("EPS") is computed using the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period except for periods of net loss for which no common share equivalents are included because their effect would be anti-dilutive. Dilutive common equivalent shares consist of shares issuable upon conversion of the Convertible Notes calculated using the if-converted method.
T. Federal and State Income Taxation – In 2013 the Company qualified for REIT status, and in March 2014 elected (effective as of January 1, 2013), to be treated as a REIT for federal income tax purposes. Because certain of its assets may not produce REIT-qualifying income or be treated as interests in real property, those assets are held in wholly-owned Taxable REIT Subsidiaries ("TRSs") in order to limit the potential that such assets and income could prevent the Company from qualifying as a REIT.
As a REIT, the Company holds and operates certain of its assets through one or more wholly-owned TRSs. The Company's use of TRSs enables it to continue to engage in certain businesses while complying with REIT qualification requirements and also allows it to retain income generated by these businesses for reinvestment without the requirement of distributing those earnings. In the future, the Company may elect to reorganize and transfer certain assets or operations from its TRSs to the Company or other subsidiaries, including qualified REIT subsidiaries.
The Company's trading securities and other equity securities are limited partnerships or limited liability companies which are treated as partnerships for federal and state income tax purposes. As a limited partner, the Company reports its allocable share of taxable income in computing its own taxable income. To the extent held by a TRS, the TRS's tax expense or benefit is included in the Consolidated Statements of Income based on the component of income or gains and losses to which such expense or benefit relates. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. It is expected that for the year ended December 31, 2016, and future periods, any deferred tax liability or asset generated will be related entirely to the assets and activities of the Company's TRSs.
If the Company ceased to qualify as a REIT, the Company, as a C corporation, would be obligated to pay federal and state income tax on its taxable income. Currently, the highest regular marginal federal income tax rate for a corporation is 35 percent. The Company may be subject to a 20 percent federal alternative minimum tax on its federal alternative minimum taxable income to the extent that its alternative minimum tax exceeds its regular federal income tax.
U. Recent Accounting Pronouncements – In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-09 "Revenue from Contracts with Customers", which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The standard was originally effective for interim and annual periods beginning after December 15, 2016 and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. On July 9, 2015, the FASB approved a one-year deferral of the effective date making the standard effective for interim and annual periods beginning after December 15, 2017. The FASB will continue to permit entities to adopt the standard on the original effective date if they choose. The Company is currently planning to use the modified retrospective transition method. However, we do not expect its adoption to have a significant impact on our consolidated financial statements, as a substantial portion of our revenue consists of rental income from leasing arrangements, which is specifically excluded from ASU 2014-09.
In April 2015, the FASB issued ASU No. 2015-03 "Interest-Imputation of Interest Simplifying the Presentation of Debt Issuance Costs". The amendments in this update require debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. In June 2015, the FASB issued ASU No. 2015-15 "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements" to clarify that ASU No. 2015-03 does not address the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. As a result, an entity may present debt issuance costs related to line-of-credit arrangements as an asset instead of a direct deduction from the carrying amount of the debt. We adopted the accounting standards update as of January 1, 2016 with retrospective application to our December 31, 2015 Consolidated Balance Sheets. The effect of the adoption was to reclassify $510 thousand of debt issuance costs at December 31, 2015 from deferred costs, net of accumulated amortization, to long-term debt.
In January 2016, the FASB issued ASU 2016-01 "Financial Instruments — Overall: Recognition and Measurement of Financial Assets and Financial Liabilities," which will require entities to measure their investments at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicability exception. The practicability exception will be available for equity investments that do not have readily determinable fair values. The guidance will be effective for us beginning with the first quarter of 2018. We are currently evaluating the impact of the new standard but do not believe its adoption will have a material impact on our consolidated financial statements.
In February 2016, the FASB issued ASU No. 2016-02 "Leases" which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016-02 is effective for fiscal years and interim periods beginning after December 31, 2018, with early adoption permitted. At adoption, the standard will be applied using a modified retrospective approach. Management is still in the process of evaluating the impact of the standard on our consolidated financial statements and related disclosures.
In June 2016, the FASB issued ASU 2016-13 "Financial Instruments - Credit Losses" which introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. The new model, referred to as the current expected credit losses ("CECL model"), will apply to financial assets subject to credit losses and measured at amortized cost, and certain off-balance sheet credit exposures. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. Early application of the guidance will be permitted for all entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact that adopting the new standard will have on our consolidated financial statements.
In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments”. This new standard will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The new standard is effective for fiscal years beginning after December 15, 2017 and will require adoption on a retrospective basis unless it is impracticable to apply, in which case we would be required to apply the amendments prospectively as of the earliest date practicable. We are currently evaluating the impact that adopting the new standard will have on our consolidated financial statements.
Leased Properties and Leases
LEASED PROPERTIES AND LEASES
LEASED PROPERTIES AND LEASES
As of December 31, 2016, the Company had three significant leased properties located in Oregon, Wyoming, Louisiana, and the Gulf of Mexico, which are leased on a triple-net basis to major tenants, described in the table below. These major tenants are responsible for the payment of all taxes, maintenance, repairs, insurance, and other operating expenses relating to the leased properties. The long-term, triple-net leases generally have an initial term of 11 to 15 years with options for renewals. Lease payments are scheduled to increase at varying intervals during the initial terms of the leases. The following table summarizes the significant leased properties, major tenants and lease terms:
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 42-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
7/1/15 - 6/30/16: $2,625,417
7/1/16 - 6/30/17: $2,826,250
$1,723,833(2)
$513,355
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.
(2) Monthly rent payments will increase to $1,741,933 beginning January 1, 2017.

The future contracted minimum rental receipts for all leases as of December 31, 2016, are as follows:
Future Minimum Lease Receipts (1)
Years Ending December 31,
 
Amount
2017
 
$
61,201,298

2018
 
61,356,965

2019
 
63,724,621

2020
 
70,890,429

2021
 
77,071,774

Thereafter
 
376,628,521

Total
 
$
710,873,608

(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.

The table below displays the Company's individually significant leases as a percentage of total leased properties and total lease revenues for the periods presented:
 
 
As a Percentage of (1)
 
 
Leased Properties
 
Lease Revenues
 
 
As of December 31,
 
For the Years Ended December 31,
 
 
2016
 
2015
 
2016
 
2015
 
2014
Pinedale LGS
 
39.8%
 
40.0%
 
30.4%
 
42.9%
 
71.9%
Grand Isle Gathering System
 
50.0%
 
50.1%
 
59.8%
 
42.3%
 
Portland Terminal Facility
 
9.9%
 
9.6%
 
9.7%
 
13.3%
 
19.0%
Public Service of New Mexico(2)
 
 
 
 
1.3%
 
9.1%
(1) Insignificant leases are not presented; thus percentages may not sum to 100%.
(2) The Public Service of New Mexico lease terminated on April 1, 2015.

The following table reflects the depreciation and amortization included in the accompanying Consolidated Statements of Income associated with our leases and leased properties:
 
For the Years Ended December 31,
 
2016
 
2015
 
2014
Depreciation Expense
 
 
 
 
 
GIGS
$
8,605,506

 
$
4,317,769

 
$

Pinedale
8,869,440

 
8,869,440

 
8,869,445

Portland Terminal Facility
843,084

 
1,235,369

 
1,390,236

Eastern Interconnect Project

 
569,670

 
2,278,680

United Property Systems
32,424

 
29,700

 
3,011

Total Depreciation Expense
$
18,350,454

 
$
15,021,948

 
$
12,541,372

Amortization Expense - Deferred Lease Costs
 
 
 
 
 
GIGS
$
30,564

 
$
15,130

 
$

Pinedale
61,368

 
61,368

 
61,369

Total Amortization Expense - Deferred Lease Costs
$
91,932

 
$
76,498

 
$
61,369

ARO Accretion Expense
 
 
 
 
 
GIGS
$
726,664

 
$
339,042

 
$

Total ARO Accretion Expense
$
726,664

 
$
339,042

 
$


The following table reflects the deferred costs that are included in the accompanying Consolidated Balance Sheets associated with our leased properties:
 
December 31, 2016
 
December 31, 2015
Net Deferred Lease Costs
 
 
 
GIGS
$
290,447

 
$
321,011

Pinedale
673,085

 
734,454

Total Deferred Lease Costs, net
$
963,532

 
$
1,055,465


Substantially all of our tenants' financial results are driven by exploiting naturally occurring oil and natural gas hydrocarbon deposits beneath the Earth's surface. As a result, our tenants' financial results are highly dependent on the performance of the oil and natural gas industry, which is highly competitive and subject to volatility. During the terms of our leases, we monitor credit quality of our tenants by reviewing their published credit ratings, if available, reviewing publicly available financial statements, or reviewing financial or other operating statements, monitoring news reports regarding our tenants and their respective businesses, and monitoring the timeliness of lease payments and the performance of other financial covenants under their leases.
Ultra Petroleum
On April 29, 2016 Ultra Petroleum, filed a voluntary petition to reorganize under Chapter 11. The filing included Ultra Wyoming LGS, LLC, the operator of the Pinedale LGS and tenant of the Pinedale Lease Agreement. The bankruptcy filing of both the guarantor, Ultra Petroleum, and the tenant and circumstances prompting the filing constituted defaults under the terms of the Pinedale Lease Agreement. The bankruptcy filing serves as a stay of the Company's ability to exercise remedies for certain of those defaults. However, Section 365 of the Bankruptcy Code requires Ultra Wyoming to comply on a timely basis with many provisions of the Pinedale Lease Agreement, including the payment provisions. The only exception to that requirement would be if Ultra Wyoming had taken specific action to reject the Pinedale Lease Agreement. During the fourth quarter of 2016, CorEnergy and Ultra Wyoming agreed to, and completed, mediation, which resulted in Ultra Wyoming's agreement to assume the Pinedale lease without amendment. This lease assumption was approved by the bankruptcy court on November 28, 2016.
Ultra Petroleum is currently subject to the reporting requirements under the Exchange Act and is required to file with the SEC annual reports containing audited financial statements and quarterly reports containing unaudited financial statements. While the SEC, under certain circumstances, may accept reporting on a modified basis from an issuer involved in a bankruptcy proceeding, the Company currently has no indication that Ultra Petroleum has requested or intends to request such relief. Its stock is currently trading on the OTC Markets (OTC Pink: UPLMQ). Other SEC filings can be found at www.sec.gov (UPLMQ) or at www.otcmarkets.com (UPLMQ). The Company makes no representation as to the accuracy or completeness of the audited and unaudited financial statements of Ultra Petroleum, but has no reason to doubt the accuracy or completeness of such information. In addition, Ultra Petroleum has no duty, contractual or otherwise, to advise the Company of any events that might have occurred subsequent to the date of such financial statements which could affect the significance or accuracy of such information. None of the information in the public reports of Ultra Petroleum that are filed with the SEC is incorporated by reference into, or in any way form, a part of this filing.
EXXI
On April 14, 2016, Energy XXI and substantially all of its directly and indirectly owned subsidiaries filed a voluntary petition to reorganize under Chapter 11, after reaching an agreement with certain creditors to provide support for a restructuring of its debt. The bankruptcy filing of Energy XXI, the guarantor of the Grand Isle Lease Agreement, and its failure to make interest payments to its creditors within the applicable cure period, would have constituted defaults under the terms of the Grand Isle Lease Agreement. However, to facilitate post-filing financing arrangements between the EXXI Debtor Group and its lenders, the Company provided a conditional waiver to certain remedies available to it as a result of these non-monetary defaults. EXXI Tenant did not file for bankruptcy. Therefore, its obligations under the Grand Isle Lease Agreement were not subject to the proceedings which affected the EXXI Debtor Group and all scheduled lease payments remained current throughout the proceedings. On December 30, 2016, EXXI announced its emergence from Chapter 11 Bankruptcy. The succeeding company is named Energy XXI Gulf Coast, Inc.
EXXI has historically been subject to the reporting requirements under the Exchange Act and required to file with the SEC annual reports containing audited financial statements and quarterly reports containing unaudited financial statements. Following emergence from bankruptcy, the succeeding company has continued to file Exchange Act reports with the SEC as well. Its SEC filings can be found at www.sec.gov (historical - EXXI; successor - Energy XXI Gulf Coast, Inc.). The Company makes no representation as to the accuracy or completeness of the audited and unaudited financial statements of EXXI, but has no reason to doubt the accuracy or completeness of such information. In addition, EXXI has no duty, contractual or otherwise, to advise the Company of any events that might have occurred subsequent to the date of such financial statements which could affect the significance or accuracy of such information. None of the information in the public reports of EXXI that are filed with the SEC is incorporated by reference into, or in any way form, a part of this filing.
Arc Logistics
Arc Logistics is currently subject to the reporting requirements of the Exchange Act and is required to file with the SEC annual reports containing audited financial statements and quarterly reports containing unaudited financial statements. The audited financial statements and unaudited financial statements of Arc Logistics can be found on the SEC's web site at www.sec.gov (NYSE: ARCX). The Company makes no representation as to the accuracy or completeness of the audited and unaudited financial statements of Arc Logistics but has no reason to doubt the accuracy or completeness of such information. In addition, Arc Logistics has no duty, contractual or otherwise, to advise the Company of any events that might have occurred subsequent to the date of such financial statements which could affect the significance or accuracy of such information. None of the information in the public reports of Arc Logistics that are filed with the SEC is incorporated by reference into, or in any way form, a part of this filing.
Lease of Property Held for Sale
Public Service Company of New Mexico ("PNM")
On November 1, 2012, the Company entered into a definitive Purchase Agreement with PNM to sell the Company's 40 percent undivided interest in the EIP upon termination of the PNM Lease Agreement on April 1, 2015, for $7.7 million. The EIP leased asset held for sale was leased on a triple-net basis through April 1, 2015, (the "PNM Lease Agreement") to PNM, an independent electric utility company serving approximately 500 thousand customers (unaudited) in New Mexico. PNM is a subsidiary of PNM Resources Inc. (NYSE: PNM) ("PNM Resources").
At the time of acquisition, the lease payments under the PNM Lease Agreement were determined to be above market rates for similar leased assets and the Company recorded an intangible asset of $1.1 million for this premium which was amortized as a reduction to lease revenue over the lease term. Annual amortization of the intangible lease asset totaling $73 thousand for the year ended December 31, 2015 and $292 thousand for the year ended December 31, 2014 is reflected in the accompanying Consolidated Statements of Income as a reduction to lease revenue. These same amounts are included in Amortization expense in the accompanying Consolidated Statements of Cash Flows.
Financing Notes Receivable
FINANCING NOTES RECEIVABLE
FINANCING NOTES RECEIVABLE
Black Bison Financing Notes
On March 13, 2014, our wholly-owned subsidiary, Corridor Bison, entered into a Loan Agreement with Black Bison Water Services, LLC ("Black Bison WS"). Black Bison WS's initial loan draw in the amount of $4.3 million was used to acquire real property in Wyoming and to pay loan transaction expenses. Corridor Bison agreed to loan Black Bison WS up to $11.5 million (the "Black Bison WS Loan") to finance the acquisition and development of real property to provide water sourcing, water disposal, or water treating and recycling services for the oil and natural gas industry.
On July 23, 2014, the Company increased its secured financing to Black Bison WS from $11.5 million to $15.3 million. The Company executed an amendment to the Black Bison WS Loan Agreement to increase the loan to $12.0 million, and entered into an additional loan for $3.3 million from a taxable REIT subsidiary of the Company, CorEnergy BBWS, on substantially the same terms (the "TRS Loan" and, together with the Black Bison WS Loan, as amended, the "Black Bison Loans"). The purpose of the increase in the secured financing was to fund the acquisition and development of real property and related equipment to provide water sourcing, water disposal, or water treating and recycling services for the oil and natural gas industry. There were no other material changes to the terms of the loan agreement. In connection with the Amendment and the TRS Loan, the Company fully funded the remainder of the $15.3 million capacity of the combined Black Bison Loans. Interest initially accrued on the outstanding principal amount of both Black Bison Loans at an annual base rate of 12 percent, which base rate was to increase by 2 percent of the current base rate per year. In addition, starting in April 2015 and continuing for each month thereafter, the outstanding principal of the Black Bison Loans was set to bear variable interest calculated as a function of the increase in volume of water treated by Black Bison WS during the particular month. The base interest plus variable interest, was payable monthly, and capped at 19 percent per annum. The Black Bison Loans were set to mature on March 31, 2024, and were set to amortize by quarterly payments beginning on March 31, 2015. The Loans were secured by the real property and equipment held by Black Bison WS and the outstanding equity in Black Bison WS and its affiliates. The Black Bison Loans were also guaranteed by all affiliates of Black Bison WS and further secured by all assets of those guarantors.
Due to reduced drilling activity in the Black Bison area of operations, Black Bison WS requested, and the Company granted, certain temporary forbearance waivers in June 2015 and August 2015 that had the effect of excusing the borrower from full performance under the terms of the Black Bison Loans while such waivers were in effect. None of the granted forbearance agreements were deemed to be concessions. As a result of the continued inability of the borrower to perform under the terms of these loans, even as temporarily modified by the waivers, effective December 31, 2015 the Company recorded a provision for loan loss with respect to the Black Bison Loans of $13.8 million, which included $14 thousand in deferred origination income, net of deferred origination costs, and $355 thousand of accrued interest. As of December 31, 2015, the net note receivable balance from Black Bison WS was $2.0 million.
Beginning with the third quarter of 2015, these notes were considered by the Company to be on non-accrual status and no further financing revenue was recorded from that point. Effective February 29, 2016, the Company foreclosed on 100 percent of the equity of BB Intermediate, the holding company of Black Bison Water Services, LLC, the borrower of the Black Bison financing notes, as well as all of the other collateral securing the Black Bison Loans as described above. The foreclosure was accepted in satisfaction of outstanding loan balances. The real property assets were sold or disposed of, as further described in Note 8, Property And Equipment.
Four Wood Financing Note Receivable
On December 31, 2014, a subsidiary of the Company, Four Wood Corridor, LLC (“Four Wood Corridor”), entered into a Loan Agreement with SWD Enterprises, LLC (“SWD Enterprises”), a wholly-owned subsidiary of Four Wood Energy, pursuant to which Four Wood Corridor made a loan to SWD Enterprises for $4.0 million (the "REIT Loan"). Concurrently, the Company’s TRS, Corridor Private entered into a TRS Loan Agreement with SWD Enterprises, pursuant to which Corridor Private made a loan to SWD Enterprises for $1.0 million (the "TRS Loan"). The proceeds of the REIT Loan and the TRS Loan were used by SWD Enterprises and its affiliates to finance the acquisition of real and personal property that provides saltwater disposal services for the oil and natural gas industry, and to pay related expenses. For the REIT Loan from Four Wood Corridor, interest initially accrued on the outstanding principal at an annual base rate of 12 percent. For the TRS Loan from Corridor Private, interest initially accrued on the outstanding principal at an annual base rate of 13 percent. The base rates of both loans were to increase by 2 percent of the current base rate per year. The Loans are secured by the real property and equipment held by SWD Enterprises and the outstanding equity in SWD Enterprises and its affiliates. The Loans are also guaranteed by all affiliates of SWD Enterprises.
As a result of the decreased economic activity by SWD, the Company recorded a provision for loan loss with respect to the SWD Loans. The Income Statement for the year ended December 31, 2016 reflects a Provision for Loan Loss of $3.5 million, which includes $71 thousand of deferred origination income and $98 thousand of interest accrued under the original loan agreements. The loans were placed on non-accrual status during the first quarter of 2016.
Effective October 1, 2016, a portion of the financing notes with SWD were restructured. The interest rate on the $4.0 million REIT Loan was reduced to 10 percent and the required principal amortization was delayed until September 30, 2018. The Company is in the process of restructuring the remaining TRS Loan. The restructuring did not have a material impact to the consolidated financial statements. The balance of the loans, net of the reserve for loan loss, represents the amount expected to be received as of December 31, 2016. The balance of the loans has been valued based on the enterprise value of SWD Enterprises, and thus the value of the collateral supporting the loans, at $1.5 million as of December 31, 2016.
Variable Interest Entities
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES
The FASB issued ASU 2015-02, "Consolidations (Topic 810) - Amendments to the Consolidation Analysis" (“ASU 2015-02”), which amended previous consolidation guidance, including introducing a separate consolidation analysis specific to limited partnerships and other similar entities. Under this analysis, limited partnerships and other similar entities are considered a variable interest entity (“VIE”) unless the limited partners hold substantive kick-out rights or participating rights. Management determined that Pinedale LP and Grand Isle Corridor LP are VIEs under the amended guidance because the limited partners of both partnerships lack both substantive kick-out rights and participating rights. As such, management evaluated the qualitative criteria under FASB ASC Topic 810 - Consolidation in conjunction with ASU 2015-02 to make a determination whether these partnerships should be consolidated on the Company's financial statements. ASC Topic 810-10 requires the primary beneficiary of a variable interest entity's activities to consolidate the VIE. The primary beneficiary is identified as the enterprise that has a) the power to direct the activities of the VIE that most significantly impact the entity's economic performance and b) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. The standard requires an ongoing analysis to determine whether the variable interest gives rise to a controlling financial interest in the VIE. Based upon the general partners’ roles and rights as afforded by the partnership agreements and its exposure to losses and benefits of each of the partnerships through its significant limited partner interests, management determined that CorEnergy is the primary beneficiary of both Pinedale LP and Grand Isle Corridor LP. Based upon that evaluation, the consolidated financial statements presented continue to consolidate both of the partnerships.
MoGas Transaction MoGas Transaction
MoGas Transaction
MOGAS TRANSACTION
On November 24, 2014, a wholly owned taxable REIT subsidiary of the Company, Corridor MoGas, executed a Purchase Agreement (the “MoGas Purchase Agreement”) with MoGas Energy, LLC (“Seller”) to acquire all of the equity interests of two entities, MoGas Pipeline, LLC ("MoGas") and United Property Systems, LLC ("UPS") (collectively, the "MoGas Transaction"). MoGas is the owner and operator of an interstate natural gas pipeline system in and around St. Louis and extending into central Missouri. The pipeline system, regulated by FERC, delivers natural gas to both investor-owned and municipal local distribution systems and has eight firm transportation customers. UPS owns real property that includes office and storage space which is leased to MoGas. A portion of that land is also leased to an operator of a small cement plant owned by a third party. The combined purchase price of MoGas and UPS was $125 million, funded by a combination of equity proceeds and revolving credit facility.
Pro Forma Financial Information (unaudited)
For comparative purposes, the following table illustrates the effect on the Consolidated Statements of Income and Comprehensive Income as well as earnings per share—basic and diluted—as if the Company had consummated the MoGas Transaction as of January 1, 2014:
 
For the Year Ended December 31, 2014
Total Revenue (1)
$
53,315,951

Total Expenses (2)
35,742,957

Operating Income
17,572,994

Other Expenses, net (3)
(3,997,916
)
Tax Benefit (4)
641,304

Net Income
14,216,382

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

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

Earnings per share:
 
Basic and Diluted
$
1.37

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

(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 related to the acquisition.
Income Taxes
INCOME TAXES
INCOME TAXES
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting and tax purposes. Components of the Company’s deferred tax assets and liabilities as of December 31, 2016, and December 31, 2015, are as follows:
Deferred Tax Assets and Liabilities
 
 
December 31, 2016
 
December 31, 2015
Deferred Tax Assets:
 
 
 
 
Net operating loss carryforwards
 
$
1,144,818

 
$
543,116

Net unrealized loss on investment securities
 
61,430

 
251,539

Loan Loss Provision
 
608,086

 
1,257,436

Other loss carryforwards
 
3,187,181

 
1,833,240

Sub-total
 
$
5,001,515

 
$
3,885,331

Deferred Tax Liabilities:
 
 
 
 
Basis reduction of investment in partnerships
 
$
(2,158,746
)
 
$
(2,159,058
)
Cost recovery of leased and fixed assets
 
(1,084,480
)
 
(119,297
)
Sub-total
 
$
(3,243,226
)
 
$
(2,278,355
)
Total net deferred tax asset
 
$
1,758,289

 
$
1,606,976


As of December 31, 2016, the total deferred tax assets and liabilities presented above relate to the Company's TRSs. The Company recognizes the tax benefits of uncertain tax positions only when the position is “more likely than not” to be sustained upon examination by the tax authorities based on the technical merits of the tax position. The Company’s policy is to record interest and penalties on uncertain tax positions as part of tax expense. Tax years subsequent to the year ended December 31, 2012, remain open to examination by federal and state tax authorities.
Total income tax expense/(benefit) differs from the amount computed by applying the federal statutory income tax rate of 35 percent, for the years ended December 31, 2016, 2015 and 2014, to income or loss from operations and other income and expense for the years presented, as follows:
Income Tax Benefit
 
 
For the Years Ended December 31,
 
 
2016
 
2015
 
2014
Application of statutory income tax rate
 
$
10,219,573

 
$
3,630,325

 
$
2,375,903

State income taxes, net of federal tax benefit
 
26,215

 
(134,597
)
 
(47,731
)
Income of Real Estate Investment Trust not subject to tax
 
(10,663,371
)
 
(5,189,849
)
 
(2,607,207
)
Other
 
(46,837
)
 
(253,432
)
 
53,472

Total income tax benefit
 
$
(464,420
)
 
$
(1,947,553
)
 
$
(225,563
)

Total income taxes are computed by applying the federal statutory rate of 35 percent plus a blended state income tax rate. Corridor Public Holdings, Inc. and Corridor Private Holdings, Inc. had a blended state rate of approximately 3.78 percent, 2.82 percent, and 3.92 percent for the years ended December 31, 2016, 2015 and 2014, respectively. CorEnergy BBWS, Inc. does not record a provision for state income taxes because it operates only in Wyoming, which does not have state income tax. Because Mowood Corridor, Inc. and Corridor MoGas, Inc. primarily only operate in the state of Missouri, a blended state income tax rate of 5 percent was used for the operations of both TRSs for the years ended December 31, 2016, 2015 and 2014. For the year ended December 31, 2016, all of the income tax benefit presented above relates to the assets and activities held in the Company's TRSs. The components of income tax expense/(benefit) include the following for the periods presented:
Components of Income Tax Benefit
 
 
For the Years Ended December 31,
 
 
2016
 
2015
 
2014
Current tax expense (benefit)
 
 
 
 
 
 
Federal
 
$
(321,720
)
 
$
781,941

 
$
3,456,858

State (net of federal tax benefit)
 
8,613

 
140,069

 
387,079

Total current tax expense (benefit)
 
$
(313,107
)
 
$
922,010

 
$
3,843,937

Deferred tax benefit
 
 
 

 

Federal
 
$
(168,915
)
 
$
(2,594,897
)
 
$
(3,634,689
)
State (net of federal tax benefit)
 
17,602

 
(274,666
)
 
(434,811
)
Total deferred tax benefit
 
$
(151,313
)
 
$
(2,869,563
)
 
$
(4,069,500
)
Total income tax benefit, net
 
$
(464,420
)
 
$
(1,947,553
)
 
$
(225,563
)

As of December 31, 2015, the TRSs had a net operating loss of $1.4 million. For the year ended December 31, 2016, the TRSs incurred a total net operating loss of approximately $1.6 million, resulting in a total net operating loss of approximately $3.0 million as of December 31, 2016. The net operating loss may be carried forward for 20 years. If not utilized, this net operating loss will expire as follows: $90 thousand, $804 thousand, $479 thousand, and $1.6 million in the years ending December 31, 2033, 2034, 2035 and 2036 respectively. The amount of deferred tax asset for net operating losses as of December 31, 2016, includes amounts for the year ended December 31, 2016. The aggregate cost of securities for federal income tax purposes and securities with unrealized appreciation and depreciation, were as follows:
Aggregate Cost of Securities for Income Tax Purposes (unaudited)
 
 
December 31, 2016
 
December 31, 2015
Aggregate cost for federal income tax purposes
 
$
4,327,077

 
$
4,750,252

Gross unrealized appreciation
 
5,408,242

 
5,133,908

Gross unrealized depreciation
 

 
(97,500
)
Net unrealized appreciation
 
$
5,408,242

 
$
5,036,408


The Company provides the following tax information to its common stockholders pertaining to the character of distributions paid during tax years 2016, 2015 and 2014. For a stockholder that received all distributions in cash during 2016, 39.4 percent will be treated as ordinary dividend income and 60.6 percent will be treated as return of capital. Of the ordinary dividend income, 0 percent will be treated as qualified dividend income. The per share characterization by quarter is reflected in the following tables:
2016 Common Stock Tax Information
Record Date
 
Ex-Dividend Date
 
Payable Date
 
Total Distribution per Share
 
Total Ordinary Dividends
 
Qualified Dividends
 
Capital Gain Distributions
 
Nondividend Distributions
02/12/2016
 
02/10/2016
 
02/29/2016
 
$
0.7500

 
$
0.2955

 
$

 
$

 
$
0.4545

05/13/2016
 
05/11/2016
 
05/31/2016
 
0.7500

 
0.2955

 

 

 
0.4545

08/17/2016
 
08/15/2016
 
08/31/2016
 
0.7500

 
0.2955

 

 

 
0.4545

11/15/2016
 
11/11/2016
 
11/30/2016
 
0.7500

 
0.2955

 

 

 
0.4545

Total 2016 Distributions
 
$
3.0000

 
$
1.1820

 
$

 
$

 
$
1.8180

2015 Common Stock Tax Information
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
 
11/11/2015
 
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
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


The Company provides the following tax information to its preferred stockholders pertaining to the character of distributions paid during the 2016 and 2015 tax years. For a stockholder that received all distributions in cash during 2016, 100 percent will be treated as ordinary dividend income and 0 percent will be treated as return of capital. Of the ordinary dividend income, 0 percent will be treated as qualified dividend income. The per share characterization by quarter is reflected in the following table:
2016 Preferred Stock Tax Information
Record Date
 
Ex-Dividend Date
 
Payable Date
 
Total Distribution per Share
 
Total Ordinary Dividends
 
Qualified Dividends
 
Capital Gain Distributions
 
Nondividend Distributions
02/12/2016
 
02/10/2016
 
02/29/2016
 
$
0.4609

 
$
0.4609

 
$

 
$

 
$

05/13/2016
 
05/11/2016
 
05/31/2016
 
0.4609

 
0.4609

 

 

 

08/17/2016
 
08/15/2016
 
08/31/2016
 
0.4609

 
0.4609

 

 

 

11/15/2016
 
11/11/2016
 
11/30/2016
 
0.4609

 
0.4609

 

 

 

Total 2016 Distributions
 
$
1.8436

 
$
1.8436

 
$

 
$

 
$

2015 Preferred Stock Tax Information
Record Date
 
Ex-Dividend Date
 
Payable Date
 
Total Distribution per Share
 
Total Ordinary Dividends
 
Qualified Dividends
 
Capital Gain Distributions
 
Nondividend Distributions
05/15/2015
 
05/13/2015
 
06/01/2015
 
$
0.6351

 
$
0.6351

 
$
0.0171

 
$

 
$

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

 
0.4609

 
0.0124

 

 

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

 
0.4609

 
0.0124

 

 

Total 2015 Distributions
 
$
1.5569

 
$
1.5569

 
$
0.0419

 
$

 
$


We elected, effective for our 2013 tax year, to be treated as a REIT for federal income tax purposes. Our REIT election, assuming continued compliance with the applicable tests, will continue in effect for subsequent tax years. The Company satisfied the annual income test and the quarterly asset tests necessary for us to qualify to be taxed as a REIT for 2016, 2015 and 2014. Distributions made during 2016, 2015 and 2014 are treated as qualifying dividend income related to taxable dividends received from our TRSs that were received and distributed in the respective years.
Property and Equipment
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
Property and Equipment
 
 
December 31, 2016
 
December 31, 2015
Land
 
$
580,000

 
$
580,000

Natural gas pipeline
 
124,288,156

 
124,386,349

Vehicles and trailers
 
570,267

 
524,921

Office equipment and computers
 
267,095

 
87,696

Gross property and equipment
 
$
125,705,518

 
$
125,578,966

Less: accumulated depreciation
 
(9,292,712
)
 
(5,948,988
)
Net property and equipment
 
$
116,412,806

 
$
119,629,978



Depreciation of property and equipment is as follows:
 
For the Years Ended December 31,
 
2016
 
2015
 
2014
Depreciation Expense
$
3,353,821

 
$
3,329,063

 
$
592,514


Assets and Liabilities Held for Sale
Effective February 29, 2016, the Company foreclosed on 100 percent of the equity of BB Intermediate, the holding company of BBWS, the borrower of the Black Bison financing notes. On June 16, 2016, the Company entered into an asset sale agreement with Expedition Water Solutions for the sale of specified disposal wells and related equipment as outlined in the sale agreement. Consideration received by the company included $748 thousand cash, net of fees, and the future right to royalty cash payments totaling $6.5 million, which was fair valued at $450 thousand at the time of sale and is included in Accounts and other receivables within the Consolidated Balance Sheet at December 31, 2016. The rights to future cash payments are tied to the future volumes of water disposed in each of the wells sold. Also as a result of the sale, the Company recognized a loss of approximately $369 thousand which has been included in the Provision for loan losses within the Consolidated Statement of Income.
On June 30, 2016, assets acquired by BBWS in a seller-financed transaction prior to the Company's foreclosure on BB Intermediate, were returned to the seller in full satisfaction of the remaining note balance of approximately $439 thousand.
There were no assets or liabilities held for sale at December 31, 2016 or December 31, 2015.
Concentrations
Concentrations
CONCENTRATIONS
The Company has customer concentrations through major tenants at its three significant leased properties as discussed fully in Note 3. In addition to these lease concentrations, contracted transportation revenues from the Company's subsidiary, MoGas, to its largest customer, Laclede Gas, represented approximately 12 percent and 15 percent of consolidated revenues for the years ended December 31, 2016 and 2015, respectively. MoGas was acquired in November 2014 as discussed further in Note 6.
Management Agreement
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT
The Company has executed a Management Agreement with Corridor InfraTrust Management, LLC (“Corridor”), a related party. Under the Management Agreement, Corridor (i) presents the Company with suitable acquisition opportunities consistent with the investment policies and objectives of the Company, (ii) is responsible for the day-to-day operations of the Company, and (iii) performs such services and activities relating to the assets and operations of the Company as may be appropriate. References to the Management Agreement as in effect prior to May 1, 2015 mean the Management Agreement that became effective July 1, 2013, as amended effective January 1, 2014, while references to the Management Agreement as in effect on and after May 1, 2015 mean the new Management Agreement entered into May 8, 2015, effective as of May 1, 2015.
The Management Agreement effective May 1, 2015 varies from the prior Management Agreement in three principal ways. First, the new agreement eliminates the ability of the independent directors to terminate the agreement for poor investment performance. However, the new Management Agreement gives a majority of the stockholders of the Company, or two-thirds of the independent directors, the ability to terminate the agreement for any reason on thirty (30) days’ prior written notice, so long as that notice is delivered with a termination payment equal to three times the base management fee and incentive fee paid to the manager in the last four quarters. Second, the new Management Agreement clarifies that the manager is to be reimbursed for all fees and travel expenses incurred by its staff while conducting business expected to benefit the Company. Finally, the new Management Agreement, which does not have a specific term, and will remain in place unless terminated by the Company or Corridor in the manner permitted pursuant to the agreement, deletes certain references to the Investment Company Act of 1940 that are no longer relevant to the Company. The foregoing description of the terms of the May 1, 2015 Management Agreement is qualified in its entirety by reference to the full terms of such agreement, which is incorporated by reference to the Registrant's form 10-Q, filed May 11, 2015.
The terms of the Management Agreement provide for a quarterly management fee to be paid to Corridor 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. “Managed Assets” means the total assets of the Company (including any securities receivables, other personal property or real property purchased with or attributable to any borrowed funds) minus (A) the initial invested value of all non-controlling interests, (B) the value of any hedged derivative assets, (C) any prepaid expenses, and (D) all of the accrued liabilities other than (1) deferred taxes and (2) debt entered into for the purpose of leverage. For purposes of the definition of Managed Assets, the Company’s securities portfolio will be valued at then current market value. For purposes of the definition of Managed Assets, other personal property and real property assets will include real and other personal property owned and the assets of the Company invested, directly or indirectly, in equity interests in or loans secured by real estate or personal property (including acquisition related costs and acquisition costs that may be allocated to intangibles or are unallocated), valued at the aggregate historical cost, before reserves for depreciation, amortization, impairment charges or bad debts or other similar noncash reserves.
The Management Agreement also provides for payment of a quarterly incentive fee of 10 percent of the increase in distributions paid over a distribution threshold equal to $0.625 per share per quarter, and requires that at least half of any incentive fees that are paid be reinvested in the Company’s common stock.
During the years ended December 31, 2016 and 2015, the Company and the Manager agreed to the following modifications to the fee arrangements described above:
In order to ensure equitable application of the quarterly management fee provisions of the 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 of 2015 based on the net impact of the GIGS Acquisition as of June 30, 2015;
In light of the provisions for loan losses recognized by the Company on certain of its energy infrastructure financing investments (collectively, the "Underperforming Loans") during 2015 and the first quarter of 2016, the Manager voluntarily recommended, and the Company agreed, that effective on and after the Company's March 31, 2016 balance sheet date, solely for the purpose of computing the value of the Company’s Managed Assets in calculating the quarterly management fee under the terms of the Management Agreement, that portion of the Management Fee attributable to the Company’s investment in the Underperforming Loans shall be based on the estimated net realizable value of such loans, which shall not exceed the amount invested in the Underperforming Loans as of the end of the quarter for which the Management Fee is to be calculated. This agreement superseded a similar prior agreement between the Company and the Manager, which was effective as of September 30, 2015, concerning valuation of the Black Bison Loans for purposes of calculating the Management Fee.
In light of the provision for uncollectable interest recorded with respect to Black Bison loans as described in Note 4, the Manager voluntarily recommended, and the Company agreed, that the Manager would waive $133 thousand of the total $279 thousand 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 thousand for such period.
Effective June 30, 2016, the Manager voluntarily recommended, and the Company agreed, that the Manager would waive $54 thousand of the total $149 thousand incentive fee that would otherwise be payable under the provisions of the Management Agreement with respect to dividends paid on the Company's common stock during the quarter ended June 30, 2016.
Effective December 31, 2016, the Manager voluntarily recommended, and the Company agreed, that the Manager would waive $34 thousand of the total $148 thousand incentive fee that would otherwise be payable under the provisions of the Management Agreement with respect to dividends paid on the Company's common stock during the year ended December 31, 2016.
Fees incurred under the Management Agreement for the years ended December 31, 2016, 2015, and 2014 were $7.2 million, $5.7 million, and $3.5 million, respectively, and are reported in the General and Administrative line item on the Income Statement.
The Company pays Corridor, as the Company's Administrator pursuant to an Administrative Agreement, an administrative fee equal to an annual rate of 0.04 percent of the value of the Company's Managed Assets, with a minimum annual fee of $30 thousand. Fees incurred under the Administrative Agreement for the years ended December 31, 2016, 2015, and 2014 were $266 thousand, $224 thousand, and $134 thousand, respectively, and are reported in the General and Administrative line item on the Income Statement.
Fair Value
FAIR VALUE
FAIR VALUE
The following tables set forth the Company's assets and liabilities measured at fair value on a recurring basis, by input level within the fair value hierarchy, as of December 31, 2016 and December 31, 2015.
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

December 31, 2015
 
 
December 31, 2015
 
Fair Value
 
 
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
Other equity securities
 
$
8,393,683

 
$

 
$

 
$
8,393,683

Interest rate swap derivative
 
98,259

 

 
98,259

 

Total Assets
 
$
8,491,942

 
$

 
$
98,259

 
$
8,393,683

At December 31, 2016 and 2015, the only assets and liabilities measured at fair value on a recurring basis are the Company's derivatives and its equity securities. On March 30, 2016, the Company terminated one of its interest rate swaps with a notional amount of $26.3 million concurrent with the assignment of the $70 million Pinedale Credit Facility. The remaining interest rate swap was de-designated from hedge accounting as of March 30, 2016. Subsequent to de-designation, changes in the fair value are recognized in earnings in the period in which the changes occur.
The valuation of the interest rate swaps are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including forward interest rate curves. The inputs used to value the derivatives fall primarily within Level 2 of the value hierarchy. See further discussion in Note 15, Interest Rate Hedge Swaps.
The changes for all Level 3 securities measured at fair value on a recurring basis using significant unobservable inputs for the years ended December 31, 2016 and 2015, are as follows:
Level 3 Rollforward
For the Year Ended 2016
 
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
 
$
8,393,683

 
$

 
$

 
$
781,154

 
$
112,372

 
$
9,287,209

 
$
781,154

Total
 
$
8,393,683

 
$

 
$

 
$
781,154

 
$
112,372

 
$
9,287,209

 
$
781,154

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Year Ended 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
)
(1) Located in Net realized and unrealized gain on other equity securities in the Consolidated Statements of Income

The Company utilizes the beginning of reporting period method for determining transfers between levels. There were no transfers between levels 1, 2 or 3 for the years ended December 31, 2016 and 2015.
In connection with the October 2014 sale of the Company's shares in VantaCore, a portion of the proceeds were placed in escrow and a receivable was recorded. Changes in the fair value of the escrow receivable were recorded as a net realized or unrealized gain or loss on other equity securities included within the Consolidated Statements of Income and Comprehensive Income. For the years ended December 31, 2016, 2015, and 2014, approximately $43 thousand, $365 thousand, and $5 thousand were included as a gain, respectively.
Valuation Techniques and Unobservable Inputs
The Company’s other equity securities, which represent securities issued by private companies, are classified as Level 3 assets. Significant judgment is required in selecting the assumptions used to determine the fair values of these investments.
As of December 31, 2016 and December 31, 2015, the Company’s investment in Lightfoot Capital Partners, LP and Lightfoot Capital Partners GP LLC, collectively, ("Lightfoot") is its only remaining significant private company investment. Lightfoot in turn owns a combination of public and private investments. Therefore, Lightfoot was valued using a combination of the following valuation techniques: (i) public share price of private companies' investments discounted for a lack of marketability (with a discount estimated at 11.8 percent to 15.2 percent as of December 31, 2015, based on lack of marketability prior to the end of the subordination period), and (ii) discounted cash flow analysis using an estimated discount rate of 14.5 percent to 16.5 percent as of December 31, 2016 and 14.0 percent to 16.0 percent as of December 31, 2015, respectively. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investment may fluctuate from period to period. Additionally, the fair value of the Company’s investment may differ from the values that would have been used had a ready market existed for such investment and may differ materially from the values that the Company may ultimately realize.
As of both December 31, 2016 and December 31, 2015, the Company held a 6.6 percent and 1.5 percent equity interest in Lightfoot LP and Lightfoot GP, respectively. Lightfoot’s assets include an ownership interest in Gulf LNG, a 1.5 billion cubic feet per day (“bcf/d”) receiving, storage, and regasification terminal in Pascagoula, Mississippi, and common units and subordinated units representing an approximately 40 percent aggregate limited partner interest, and a noneconomic general partner interest, in Arc Logistics Partners LP (NYSE: ARCX). During November 2016, Lightfoot's subordinated units were converted to common units. As such, there was no discount for lack of marketability applied as of December 31, 2016. The Company holds observation rights on Lightfoot's Board of Directors.
During the year ended December 31, 2015, the Company’s Warrant Investment was valued using a binomial option pricing model. The key assumptions used in the binomial model were the fair value of equity of the underlying business; the Warrant's strike price; the expected volatility of equity; the time to the Warrant's expiry; the risk-free rate, and the expected dividend yields. Due to the inherent uncertainty of determining the fair value of the Warrant Investment, which did not have a readily available market, the assumptions used the binomial model to value the Company’s Warrant Investment were based on Level 2 and Level 3 inputs.
Certain condensed combined unaudited financial information of the unconsolidated affiliate, Lightfoot, is presented in the following tables (in thousands):
 
 
December 31, 2016
 
December 31, 2015
 
 
(Unaudited)
 
(Unaudited)
Assets
 
 
 
 
Current assets
 
$
20,413

 
$
24,276

Noncurrent assets
 
698,745

 
696,461

Total Assets
 
$
719,158

 
$
720,737

Liabilities
 
 
 
 
Current liabilities
 
$
14,307

 
$
19,993

Noncurrent liabilities
 
268,175

 
246,808

Total Liabilities
 
$
282,482

 
$
266,801

 
 
 
 
 
Partner's equity
 
436,676

 
453,936

Total liabilities and partner's equity
 
$
719,158

 
$
720,737


 
 
For the Years Ended December 31,
 
 
(Unaudited)
 
 
2016
 
2015
 
2014
Revenues
 
$
105,381

 
$
81,788

 
$
54,906

Operating expenses
 
86,071

 
76,774

 
62,835

Income (Loss) from Operations
 
$
19,310

 
$
5,014

 
$
(7,929
)
Other income
 
9,159

 
12,469

 
15,517

Net Income
 
$
28,469

 
$
17,483

 
$
7,588

Less: Net Income attributable to non-controlling interests
 
(18,717
)
 
(8,901
)
 
(761
)
Net Income attributable to Partner's Capital
 
$
9,752

 
$
8,582

 
$
6,827


The following section describes the valuation methodologies used by the Company for estimating fair value for financial instruments not recorded at fair value, but fair value is included for disclosure purposes only, as required under disclosure guidance related to the fair value of financial instruments.
Cash and Cash Equivalents — The carrying value of cash, amounts due from banks, federal funds sold and securities purchased under resale agreements approximates fair value.
Escrow Receivable — At December 31, 2015, the fair value of the escrow receivable, which related to the sale of VantaCore, was reflected net of a discount for the potential that the full amount due to the Company would not be realized. On April 1, 2016, the Company recorded a gain when the full value of the escrow receivable was received.
Financing Notes Receivable — The financing notes receivable are valued on a non-recurring basis. The financing notes receivable are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Financing Notes with carrying values that are not expected to be recovered through future cash flows are written-down to their estimated net realizable value. Estimates of realizable value are determined based on unobservable inputs, including estimates of future cash flow generation and value of collateral underlying the notes.
Derivative Asset — The Company uses interest rate swaps to manage interest rate risk. The fair value of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the respective derivative.
Long-term Debt — The fair value of the Company’s long-term debt is calculated, for disclosure purposes, by market quotes or by discounting future cash flows by a rate equal to the expected market rate for an equivalent transaction.
Line of Credit — The carrying value of the line of credit approximates the fair value due to its short-term nature.
Carrying and Fair Value Amounts
 
 
Level within fair value hierarchy
 
December 31, 2016
 
December 31, 2015
 
 
 
Carrying
Amount
 
Fair Value
 
Carrying
Amount
 
Fair Value
Financial Assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
Level 1
 
$
7,895,084

 
$
7,895,084

 
$
14,618,740

 
$
14,618,740

Escrow receivable
 
Level 2
 
$

 
$

 
$
1,392,917

 
$
1,392,917

Financing notes receivable (Note 4)
 
Level 3
 
$
1,500,000

 
$
1,500,000

 
$
7,675,626

 
$
7,675,626

Derivative asset
 
Level 2
 
$
19,950

 
$
19,950

 
$
98,259

 
$
98,259

Financial Liabilities:
 
 
 
 
 
 
 
 
Secured credit facilities(1)
 
Level 2
 
$
89,387,985

 
$
89,387,985

 
$
105,440,842

 
$
105,440,842

Unsecured convertible senior notes
 
Level 2
 
$
111,244,895

 
$
129,527,940

 
$
111,423,910

 
$
92,575,000

(1) Includes current maturities
Credit Facilities
CREDIT FACILITIES
CREDIT FACILITIES
The following is a summary of debt facilities and balances as of December 31, 2016 and December 31, 2015:
 
Total Commitment
 or Original Principal
 
Quarterly Principal Payments
 
 
 
December 31, 2016
 
December 31, 2015
 
 
 
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
%
 
$
115,000,000

 
7.00
%
CorEnergy Credit Facility:
 
 
 
 
 
 
 
 
 
 
 
 
 
CorEnergy Revolver
$
105,000,000

 
$

 
12/15/2019
 
44,000,000

 
3.76
%
 

 
3.07
%
CorEnergy Term Loan
$
45,000,000

 
$
1,615,000

 
12/15/2019
 
36,740,000

 
3.74
%
 
43,200,000

 
3.07
%
MoGas Revolver
$
3,000,000

 
$

 
12/15/2019
 

 
3.77
%
 

 
3.07
%
Omega Line of Credit
$
1,500,000

 
$

 
7/31/2017
 

 
4.77
%
 

 
4.43
%
Pinedale Credit Facility:
 
 
 
 
 
 
 
 
 
 
 
 
 
$70M Term Loan
$
70,000,000

 
$

 
3/30/2016
 

 

 
62,532,000

 
4.67
%
$58.5M Term Loan – related party (1)
$
11,085,750

 
$
167,139

 
3/30/2021
 
8,860,577

 
8.00
%
 

 

Total Debt
 
$
203,600,577

 
 
 
$
220,732,000

 
 
Less:
 
 
 
 
 
 
 
 
Unamortized deferred financing costs (2)
 
$
381,531

 
 
 
$
510,401

 
 
Unamortized discount on 7% Convertible Senior Notes
 
2,586,166

 
 
 
3,356,847

 
 
Long-term debt, net of deferred financing costs
 
$
200,632,880

 
 
 
$
216,864,752

 
 
Debt due within one year
 
$
7,128,556

 
 
 
$
66,132,000

 
 
(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)
 
 
December 31, 2016
 
December 31, 2015
CorEnergy Credit Facility
 
$
2,168,518

 
$
2,975,476

Pinedale Credit Facility
 

 
156,330

Total Deferred Debt Costs, net
 
$
2,168,518

 
$
3,131,806

(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 Years Ended December 31,
 
 
2016
 
2015
 
2014
CorEnergy Credit Facility
 
$
1,078,526

 
$
926,930

 
$
284,709

Pinedale Credit Facility
 
156,330

 
500,326

 
516,864

Total Deferred Debt Cost Amortization
 
$
1,234,856

 
$
1,427,256

 
$
801,573

(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.

The remaining contractual principal payments as of December 31, 2016, under the credit facilities are as follows:
Total Remaining Contractual Payments
Year
 
CorEnergy
Revolver
 
CorEnergy Term Loan
 
Pinedale Credit Facility
 
Total
2017
 

 
6,460,000

 
668,556

 
7,128,556

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
 

 

 
6,186,353

 
6,186,353

Total
 
$
44,000,000

 
$
36,740,000

 
$
8,860,577

 
$
89,600,577


CorEnergy Credit Facilities
On September 26, 2014, the Company entered into a $30 million revolving credit facility (the "CorEnergy Revolver") with certain lenders and Regions Bank, as an agent for such lenders. Then in conjunction with the MoGas Transaction on November 24, 2014, increased the credit facility to $90 million at the REIT level, and $3 million at the subsidiary entity level. For the first six months, subsequent to the increase, the facility bore interest on the outstanding balance at a rate of LIBOR plus 3.50 percent. Beginning on May 24, 2015 and through July 7, 2015, the interest rate was determined by a pricing grid where the applicable interest rate was LIBOR plus 2.75 percent to 3.50 percent, depending on the Company's leverage ratio at such time. On June 29, 2015, the Company borrowed against the CorEnergy Revolver in the amount of $42 million in conjunction with the GIGS transaction.
On July 8, 2015, the Company amended and upsized its existing $93 million credit facility with Regions Bank (as lender and administrative agent for the other participating lenders) to provide borrowing commitments of $153 million, consisting of (i) an increase in the CorEnergy Revolver at the CorEnergy parent entity level to $105 million, (ii) a $45 million term loan at the CorEnergy parent entity level (the "CorEnergy Term Loan") and (iii) a $3 million revolving credit facility at the subsidiary entity level (the "MoGas Revolver" as detailed below and, collectively with the upsized CorEnergy Revolver and the CorEnergy Term Loan, the "CorEnergy Credit Facility"). Upon closing the CorEnergy Credit Facility, CorEnergy drew $45 million on the CorEnergy Term Loan to pay off the balance on the CorEnergy Revolver that had been used in funding the GIGS acquisition in June 2015.
The CorEnergy Credit Facility has a maturity date of December 15, 2019 for both the CorEnergy Revolver and the CorEnergy Term Loan. Borrowings under the credit facility will generally bear interest on the outstanding principal amount using a LIBOR pricing grid that is expected to equal a LIBOR rate plus an applicable margin of 2.75 percent to 3.75 percent, based on the Company's senior secured recourse leverage ratio. Total availability is subject to a borrowing base. The term note required quarterly principal payments of $900 thousand which began on September 30, 2015. Quarterly principal payments were subsequently increased to $1.6 million in conjunction with the financing of the Pinedale Credit Facility, discussed further, below. The CorEnergy Credit Facility contains, among other restrictions, certain financial covenants including the maintenance of certain financial ratios, as well as default and cross-default provisions customary for transactions of this nature (with applicable customary grace periods). Upon the occurrence of an event of default, payment of all amounts outstanding under the CorEnergy Credit Facility shall become immediately due and payable. As of December 31, 2016, the Company was in compliance with all covenants of the CorEnergy Credit Facility.
The CorEnergy Credit Facility is secured by substantially all of the assets owned by the Company and its subsidiaries other than (i) the assets held by Mowood, LLC, Omega Pipeline Company, Pinedale Corridor, LP and Pinedale, GP Inc. (the "Unrestricted Subs") and (ii) the equity investments in the Unrestricted Subs.
On May 8, 2013, the Company entered into a $20 million revolving line of credit with KeyBank. The primary term of the facility was three years with the option for a one-year extension. Outstanding balances under the revolving credit facility accrued interest at a variable annual rate equal to LIBOR plus 4.0 percent or the Prime Rate plus 2.75 percent. The facility was for the purpose of funding general working capital needs and if necessary, to provide short-term financing for the acquisition of additional real property assets. The amount available to be drawn under this facility was subject to a borrowing base limitation. The agreement was terminated on September 26, 2014.
MoGas Revolver
In conjunction with the MoGas Transaction, MoGas and United Property Systems, as co-borrowers, entered into a revolving credit agreement dated November 24, 2014 (the “MoGas Revolver”), with certain lenders, including Regions Bank as agent for such lenders. Pursuant to the MoGas Revolver, the co-borrowers may borrow, prepay and re-borrow loans up to $3.0 million outstanding at any time. The MoGas Revolver is secured by the assets held at MoGas and has a maturity date of December 15, 2019. Interest accrues under the MoGas Revolver at the same rate and pursuant to the same terms as it accrues under the CorEnergy Revolver. As of December 31, 2016, there were no outstanding borrowings against the MoGas Revolver. As of December 31, 2016, the co-borrowers are in compliance with all covenants of the MoGas Revolver.
Mowood/Omega Credit Facility
On October 15, 2014, Mowood and Omega entered into a Revolving Note Payable Agreement ("2014 Note Payable Agreement"), which extended the maturity date of a prior agreement to January 31, 2015. Then on January 30, 2015, Mowood and Omega modified the 2014 Note Payable Agreement to extend the maturity date to July 31, 2015. On July 31, 2015, the 2014 Note Payable Agreement was allowed to expire and a new $1.5 million revolving line of credit ("Mowood/Omega Revolver") was established. The new Mowood/Omega Revolver is used for working capital and general business purposes, is guaranteed and secured by the assets of Mowood and initially had a maturity of July 31, 2016. On July 28, 2016, the maturity date was extended to July 31, 2017. Interest accrues at LIBOR plus 4 percent and is payable monthly in arrears with no unused fee. There was no outstanding balance at December 31, 2016.
Pinedale Credit Facility
On December 20, 2012, Pinedale LP closed on a $70 million secured term credit facility. Outstanding balances under the original facility generally accrued interest at a variable annual rate equal to LIBOR plus 3.25 percent. This credit facility was secured by the Pinedale LGS asset. Under the original agreement, Pinedale LP was obligated to pay all accrued interest monthly and was further obligated to make monthly principal payments, which began on March 7, 2014, in the amount of $294 thousand or 0.42 percent of the principal balance as of March 1, 2014.
The credit facility remained in effect until December 31, 2015, with an option to extend through December 31, 2016. Although the Company elected not to extend the facility for an additional one-year period it did amend the facility to extend the maturity date to March 30, 2016. During the extension period, the company made principal payments of $3.2 million and the credit facility bore interest on the outstanding principal amount at LIBOR plus 4.25 percent.
On March 4, 2016, the Company obtained a consent from its lenders under the CorEnergy Credit Facility, which permitted the Company to utilize the CorEnergy Credit Facility to refinance the Company's pro rata share of the remaining balance of the Pinedale secured term credit facility. On March 30, 2016, the Company and Prudential ("the Refinancing Lenders"), refinanced the remaining $58.5 million principal balance of the $70 million credit facility (on a pro rata basis equal to their respective equity interests in Pinedale LP, with the Company’s 81.05 percent share being approximately $47.4 million) and executed a series of agreements assigning the credit facility to CorEnergy Infrastructure Trust, Inc. as Agent for the Refinancing Lenders. The facility was further modified to extend the maturity date to March 30, 2021; to increase the LIBOR Rate to the greater of (i) 1.00 percent and (ii) the one-month LIBOR rate; and to increase the LIBOR Rate Spread to seven percent (7.00 percent) per annum. The Company's portion of the debt and interest is eliminated in consolidation and Prudential's portion of the debt is shown as a related-party liability. The Company also terminated one of two related interest rate swaps with a notional amount of $26.3 million.
The Company has provided to Prudential a guarantee against certain inappropriate conduct by or on behalf of Pinedale LP or CorEnergy. The credit agreement contains, among other restrictions, specific financial covenants including the maintenance of certain financial coverage ratios and a minimum net worth requirement. Pinedale LP was in compliance with all covenants under the Pinedale Credit Facility as of December 31, 2016.
Pinedale LP's credit facility with the Refinancing Lenders requires all lease payments by Ultra Wyoming to be made to an account under the control of the company as Agent and limits distributions by Pinedale LP to the Company. Distributions by Pinedale LP to the Company are permitted to the extent required for the Company to maintain its REIT qualification, so long as Pinedale LP's obligations under the credit facility have not been accelerated following an Event of Default (as defined in the credit facility). However, Pinedale LP automatically entered into a Cash Control Period (as defined in the credit facility) with the Refinancing Lenders upon the April 29, 2016, bankruptcy filing by Ultra Wyoming and its parent guarantor, Ultra Petroleum. During a Cash Control Period, the Company as Agent may (and, upon the request of any lender, shall) sweep all funds for the repayment of accrued interest, scheduled principal payments and principal prepayments on the loans, in all cases to the extent of such available funds, until such time as the Cash Control Period has terminated or the Ultra Lease has been affirmed by Ultra Wyoming in a lawful bankruptcy proceeding. For the year ended December 31, 2016, pursuant to these additional cash sweep provisions, an additional $9.1 million was distributed (pro rata, based on ownership percentages) to the Refinancing Lenders as a reduction to the outstanding principal. The credit facility also requires that Pinedale LP maintain minimum net worth levels and certain leverage ratios, which along with other provisions of the credit facility limit cash dividends and loans to the Company. At December 31, 2016, the net assets of Pinedale LP were $144.3 million.
Convertible Debt
CONVERTIBLE DEBT
CONVERTIBLE DEBT
On June 29, 2015, the Company completed a public offering of $115 million aggregate principal amount of 7.00% Convertible Senior Notes Due 2020 (the "Convertible Notes"). The Convertible Notes mature on June 15, 2020 and bear interest at a rate of 7.0 percent per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2015.
Holders may convert their Convertible Notes into shares of the Company’s common stock at their option until the close of business on the second scheduled trading day immediately preceding the maturity date. The initial conversion rate for the Convertible Notes will be 30.3030 shares of Common Stock per $1,000 principal amount of the Convertible Notes, equivalent to an initial conversion price of $33 per share of Common Stock. Such conversion rate will be subject to adjustment in certain events as specified in the Indenture.
The Convertible Notes may not be redeemed prior to the maturity date; however, upon the occurrence of a fundamental change (as defined in the Indenture), holders may require the Company to repurchase all or a portion of the Convertible Notes for cash at a price equal to 100 percent of the principal amount of the Convertible Notes to be purchased plus any accrued and unpaid interest, if any, to, but excluding, the applicable fundamental change repurchase date as prescribed in the Indenture. In addition, in certain circumstances the Company will increase the conversion rate for a holder that converts the Convertible Notes in connection with any of a specified set of corporate events, each of which is deemed to constitute a make whole adjustment event pursuant to the terms of the Indenture.
The Convertible Notes rank equal in right of payment to any other current and future unsecured obligations of the Company and senior in right of payment to any other current and future indebtedness of the Company that is contractually subordinated to the Convertible Notes. The Convertible Notes are structurally subordinated to all liabilities (including trade payables) of the Company’s subsidiaries. The Convertible Notes are effectively junior to all of the Company’s existing or future secured debt, to the extent of the value of the collateral securing such debt.
The Convertible Notes were initially issued with an underwriters' discount of $3.7 million which is being amortized over the life of the Convertible Notes. Additionally, the Company incurred approximately $241 thousand in debt issuance costs associated with the Convertible Notes which are being amortized over the life of the notes. Including the impact of the convertible debt discount and related deferred debt issuance costs, the effective interest rate on the Convertible Notes was approximately 7.7 percent for each of the years ended December 31, 2016 and 2015.
On May 23, 2016, the Company repurchased $1 million of its convertible bonds on the open market. This resulted in the company writing off a portion of the original underwriter's discount and deferred debt costs, as well as recognizing a gain on extinguishment of debt of $72 thousand which is included in Interest Expense in the Consolidated Statements of Income.
The following is a summary of the impact of Convertible Notes on interest expense for the years ended December 31, 2016 and 2015:
Convertible Note Interest Expense
 
 
For the Years Ended December 31,
 
 
2016
 
2015
7% Convertible Notes
 
$
8,008,195

 
$
4,069,722

Discount Amortization
 
744,081

 
380,653

Deferred Debt Issuance Amortization
 
48,566

 
21,656

Total
 
$
8,800,842

 
$
4,472,031

Asset Retirement Obligation
Asset Retirement Obligation
ASSET RETIREMENT OBLIGATION
A component of the consideration exchanged to purchase the GIGS assets from Energy XXI in June 2015, was the assumption of the seller’s asset retirement obligation associated with such assets. The ARO represents the estimated costs of decommissioning the GIGS pipelines and onshore oil receiving and separation facilities in Grand Isle, Louisiana at retirement. The Company recognized the ARO at its estimated fair value on the date of acquisition with a corresponding ARO asset capitalized as part of the carrying amount of the related long-lived assets to be depreciated over the assets’ remaining useful lives.
The Company's tenant, EXXI Tenant, has an ARO related to the platform which is currently attached to the GIGS pipelines. If in the future, EXXI is unable to fulfill their obligation, the Company may be required to assume the liability for the related asset removal costs.
In periods subsequent to the initial measurement of an ARO, the Company recognizes changes in the liability resulting from (a) the passage of time through accretion expense and (b) revisions to either the timing or the amount of the estimate of undiscounted cash flows based on periodic revaluations. Future expected cash flows are based on subjective estimates and assumptions, which inherently include significant uncertainties which are beyond the Company's control. These assumptions represent Level 3 inputs in the fair value hierarchy. The Company has no assets that are legally restricted for purposes of settling asset retirement obligations.
The following table is a reconciliation of the asset retirement obligation as of December 31, 2016 and 2015:
Asset Retirement Obligation
 
 
For the Years Ended
 
 
2016
 
2015
Beginning asset retirement obligation
 
$
12,839,042

 
$

Liabilities assumed
 

 
12,500,000

ARO accretion expense
 
726,664

 
339,042

Revision in cash flow estimates
 
(1,682,763
)
 

Ending asset retirement obligation
 
$
11,882,943

 
$
12,839,042

Interest Rate Hedge Swaps
Interest Rate Hedge Swaps
INTEREST RATE HEDGE SWAPS
Derivative Instruments and Hedging Activities
The Company uses interest rate swaps to add stability to interest expense and to manage its exposure to interest rate movements. In February 2013, the Company entered into two interest rate swap agreements associated with a portion of its variable rate debt under the $70 million Pinedale Credit Facility, as discussed further in Note 12. The notional amount covered under these agreements totaled $52.5 million (split evenly between the two agreements). Under the terms of the interest rate swap agreements, the Company received a floating rate based on the one-month LIBOR and paid a fixed rate of 0.865%. Each of the swap agreements was set to expire in December 2017. The agreements were designated as cash flow hedges at inception and accordingly, the effective portion of the gain or loss on the swap was reported as a component of accumulated other comprehensive income ("AOCI") and was reclassified into interest expense when the interest rate swap transaction affected earnings. Any ineffective portion of the gain or loss was recognized immediately in interest expense.
On March 30, 2016, the Company restructured the Pinedale Credit Facility, as further discussed in Note 12. In connection with the assignment of the Pinedale Credit Facility, the Company terminated one of the interest rate swap agreements with a notional amount of $26.3 million and the remaining interest rate swap with a notional amount of $26.3 million was de-designated from hedge accounting.
The table below presents the effect of the Company’s derivative financial instruments on the Statements of Income and Comprehensive Income for the years ended December 31, 2016, 2015 and 2014 (note that the ineffective portion is not presented as it was inconsequential for all periods presented):
 
 
For the Years Ended December 31,
Derivatives in Cash Flow Hedging Relationship
 
2016
 
2015
 
2014
Amount of Loss on Derivatives Recognized in AOCI (Effective Portion)
 
$
(300,181
)
 
$
(611,879
)
 
$
(705,826
)
Amount of Loss on Derivatives Reclassified from AOCI (Effective Portion) Recognized in Net Income(1)
 
(50,964
)
 
(287,999
)
 
(305,945
)
 
 
 
 
 
 
 
Derivatives Not Designated as Hedging Instruments
 
 
 
 
 
 
Amount of Gain on Derivatives Recognized in Income(2)
 
$
73,204

 
$

 
$

(1) Included in "Interest Expense" on the face of the Consolidated Statements of Income and Comprehensive Income.
(2) The gain recognized in income on derivatives includes changes in fair value for derivatives subsequent to de-designation from hedge accounting.
Stockholder's Equity
STOCKHOLDER'S EQUITY
STOCKHOLDERS' EQUITY
PREFERRED STOCK
The Company's authorized preferred stock consists of 10 million shares having a par value of $0.001 per share. On January 27, 2015, the Company sold, in an underwritten public offering, 2,250,000 depositary shares, each representing 1/100th of a share of 7.375% Series A Cumulative Redeemable Preferred Stock ("Series A Preferred"). Pursuant to this offering, the Company issued 22,500 whole shares of Series A Preferred and received net cash proceeds of approximately $54.2 million. The depositary shares pay an annual dividend of $1.84375 per share, equivalent to 7.375 percent of the $25.00 liquidation preference. The depositary shares may be redeemed on or after January 27, 2020, at the Company’s option, in whole or in part, at the $25.00 liquidation preference plus all accrued and unpaid dividends to, but not including, the date of redemption. The depositary shares have no stated maturity, are not subject to any sinking fund or mandatory redemption and are not convertible into any other securities of the Company except in connection with certain changes of control. Holders of the depositary shares generally have no voting rights, except for limited voting rights if the Company fails to pay dividends for six or more quarters (whether or not consecutive) and in certain other circumstances. The depositary shares representing the Series A Preferred trade on the NYSE under the ticker “CORRPrA." The aggregate par value of the preferred shares at December 31, 2016, is $23. See Note 19, Subsequent Events, for further information regarding the declaration of a dividend on the 7.375% Series A Cumulative Redeemable Preferred Stock.
COMMON STOCK
On December 31, 2015, the Company's board of director's authorized a share repurchase program for the Company to buy up to $10.0 million of its common stock. During 2016, the Company repurchased 90,613 shares for approximately $2.0 million in cash. Under the program, which expired December 31, 2016, the Company was authorized to repurchase shares from time to time through open market transactions, including through block purchases, privately negotiated transactions, or otherwise. As of December 31, 2016, the Company had 11,886,216 of common shares issued and outstanding. See Note 19, Subsequent Events, for further information regarding the declaration of a dividend on the common stock.
SHELF REGISTRATION
On February 18, 2016, the Company had a new shelf registration statement declared effective by the SEC, pursuant to which it may publicly offer additional debt or equity securities with an aggregate offering price of up to $600 million. As of December 31, 2016, the Company had issued 34,581 shares of common stock under its dividend reinvestment plan, reducing availability by approximately $816 thousand to approximately $599.2 million.
WARRANTS
The Company issued 945,594 warrants (representing the right to purchase one share of the Company’s common stock for $11.41 per common share on a pre-Reverse Stock Split basis) on February 7, 2007, all of which expired unexercised on February 6, 2014, and are no longer outstanding as of December 31, 2016.
Earnings Per Share
EARNINGS PER SHARE
EARNINGS PER SHARE
Basic earnings per share data is computed based on the weighted average number of shares of common stock outstanding during the periods. Diluted EPS data is computed based on the weighted average number of shares of common stock outstanding, including all potentially issuable shares of common stock. Diluted EPS for the years ended December 31, 2016 and 2015excludes the impact to income and to the potential number of shares outstanding from the conversion of the 7.00% Convertible Senior Notes, because such impact would be antidilutive.
Earnings Per Share
 
For the Years Ended December 31,
 
2016
 
2015
 
2014
Net income attributable to CorEnergy stockholders
$
29,663,200

 
$
12,319,911

 
$
7,013,856

Less: preferred dividend requirements
4,148,437

 
3,848,828

 

Net income attributable to common stockholders
$
25,514,763

 
$
8,471,083

 
$
7,013,856

Weighted average shares - basic
11,901,985

 
10,685,892

 
6,605,715

Basic earnings per share
$
2.14

 
$
0.79

 
$
1.06

 
 
 
 
 
 
Net income attributable to common stockholders (from above)
$
25,514,763

 
$
8,471,083

 
$
7,013,856

Add: After tax effect of convertible interest

 

 

Income attributable for dilutive securities
$
25,514,763

 
$
8,471,083

 
$
7,013,856

Weighted average shares - diluted
11,901,985

 
10,685,892

 
6,605,715

Diluted earnings per share
$
2.14

 
$
0.79

 
$
1.06

Quarterly Financial Data (Unaudited)
Quarterly Financial Data (Unaudited)
QUARTERLY FINANCIAL DATA (Unaudited)
 
 
For the Fiscal 2016 Quarters Ended
 
 
March 31
 
June 30
 
September 30
 
December 31
Revenue
 
 
 
 
 
 
 
 
Lease revenue
 
$
16,996,072

 
$
16,996,072

 
$
16,996,155

 
$
17,005,831

Transportation and distribution revenue
 
5,099,451

 
5,064,680

 
5,119,330

 
5,810,651

Financing revenue
 
162,344

 

 

 

Total Revenue
 
22,257,867

 
22,060,752

 
22,115,485

 
22,816,482

Expenses
 
 
 
 
 
 
 
 
Transportation and distribution expenses
 
1,362,325

 
1,378,306

 
1,482,161

 
2,240,556

General and administrative
 
3,289,852

 
2,773,240

 
3,021,869

 
3,185,419

Depreciation, amortization and ARO accretion expense
 
5,296,818

 
5,737,025

 
5,744,266

 
5,744,762

Provision for loan losses
 
4,645,188

 
369,278

 

 

Total Expenses
 
14,594,183

 
10,257,849

 
10,248,296

 
11,170,737

Income from Operations, before income taxes
 
$
7,663,684

 
$
11,802,903

 
$
11,867,189

 
$
11,645,745

Other Income (Expense)
 
 
 
 
 
 
 
 
Net distributions and dividend income
 
$
375,573

 
$
214,169

 
$
277,523

 
$
273,559

Net realized and unrealized gain (loss) on other equity securities
 
(1,628,752
)
 
1,199,665

 
1,430,858

 
(177,289
)
Interest expense
 
(3,926,009
)
 
(3,540,812
)
 
(3,520,856
)
 
(3,430,162
)
Total Other Income (Expense)
 
(5,179,188
)
 
(2,126,978
)
 
(1,812,475
)
 
(3,333,892
)
Income before income taxes
 
2,484,496

 
9,675,925

 
10,054,714

 
8,311,853

Taxes
 
 
 
 
 
 
 
 
Current tax expense (benefit)
 
(677,731
)
 
203,652

 
95,125

 
65,847

Deferred tax expense (benefit)
 
(577,395
)
 
206,786

 
388,027

 
(168,731
)
Income tax expense (benefit), net
 
(1,255,126
)
 
410,438

 
483,152

 
(102,884
)
Net Income
 
3,739,622

 
9,265,487

 
9,571,562

 
8,414,737

Less: Net Income attributable to non-controlling interest
 
348,501

 
310,960

 
340,377

 
328,370

Net Income attributable to CorEnergy Stockholders
 
$
3,391,121

 
$
8,954,527

 
$
9,231,185

 
$
8,086,367

Preferred dividend requirements
 
1,037,109

 
1,037,109

 
1,037,109

 
1,037,110

Net Income attributable to Common Stockholders
 
$
2,354,012

 
$
7,917,418

 
$
8,194,076

 
$
7,049,257

 
 
 
 
 
 
 
 
 
Earnings Per Common Share:
 
 
 
 
 
 
 
 
Basic
 
$
0.20

 
$
0.66

 
$
0.69

 
$
0.59

Diluted
 
$
0.20

 
$
0.66

 
$
0.68

 
$
0.59

See accompanying Notes to Consolidated Financial Statements.

 
 
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

Transportation and distribution revenue
 
3,649,735

 
3,546,979

 
3,557,096

 
3,591,459

Financing revenue
 
660,392

 
668,904

 
182,604

 
185,650

Sales revenue
 
2,341,655

 
1,665,908

 
1,434,694

 
1,717,787

Total Revenue
 
13,987,883

 
12,681,670

 
22,140,450

 
22,478,932

Expenses
 
 
 
 
 
 
 
 
Transportation and distribution expenses
 
1,197,968

 
1,272,025

 
1,120,862

 
1,018,870

Cost of sales
 
1,248,330

 
569,958

 
382,851

 
618,073

General and administrative
 
2,568,519

 
1,905,329

 
2,837,762

 
2,434,094

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

Total Expenses
 
9,063,649

 
7,243,298

 
18,129,277

 
15,289,105

Income 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

 
 
 
 
 
 
 
 
 
Earnings (Loss) Per Common Share:
 
 
 
 
 
 
 
 
Basic
 
$
0.36

 
$
0.33

 
$
(0.05
)
 
$
0.22

Diluted
 
$
0.36

 
$
0.33

 
$
(0.05
)
 
$
0.22

See accompanying Notes to Consolidated Financial Statements.
Subsequent Events
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
The Company performed an evaluation of subsequent events through the date of the issuance of these financial statements and determined that no additional items require recognition or disclosure, except for the following:
Common Stock Dividend
On January 25, 2017, our Board of Directors declared the 2016 fourth quarter dividend of $0.75 per share for CorEnergy common stock. The dividend was paid on February 28, 2017, to shareholders of record on February 13, 2017.
Preferred Stock Dividend
On January 25, 2017, our Board of Directors also declared a cash dividend of $0.4609375 per depositary share for the Company’s 7.375% Series A Cumulative Redeemable Preferred Stock for the quarter ending December 31, 2016. The preferred stock dividend was paid on February 28, 2017, to shareholders of record on February 13, 2017.
MoGas Contract Amendment
Effective March 1, 2017, MoGas entered into a long-term firm transportation services agreement with its largest customer, Laclede Gas. The agreement, which amends a prior agreement, extends the termination date for Laclede’s existing firm transportation services agreement from October 31, 2017 to October 31, 2030. Tariff rates under the extended agreement will be discounted from the current rate of $12.385 per dekatherm per month to $6.386 per dekatherm per month beginning on November 1, 2018.
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
CorEnergy Infrastructure Trust, Inc.
CONDENSED BALANCE SHEETS
 
December 31, 2016
 
December 31, 2015
Assets
 
 
 
 
Leased property, net of accumulated depreciation of $743,458 and $559,078
 
$
4,050,198

 
$
4,234,578

Investments
 
451,603,448

 
458,088,998

Cash and cash equivalents
 
5,933,481

 
10,089,436

Due from subsidiary
 
9,770,878

 
8,317,719

Note receivable from subsidiary
 
128,244,591

 
92,730,000

Deferred costs, net of accumulated amortization of $1,240,297 and $633,687
 
1,548,255

 
2,003,575

Prepaid expenses and other assets
 
173,774

 
116,475

Income tax receivable
 
4,394

 
4,394

Total Assets
 
$
601,329,019

 
$
575,585,175

Liabilities and Equity
 
 
 
 
Secured credit facilities, net
 
80,527,408

 
42,908,842

Unsecured convertible senior notes, net of discount and debt issuance costs of $2,755,105 and $3,576,090
 
111,244,895

 
111,423,910

Accounts payable and other accrued liabilities
 
1,199,616

 
1,300,792

Management fees payable
 
1,735,024

 
1,763,747

Due to affiliate
 
153,640

 
153,640

Total Liabilities
 
$
194,860,583

 
$
157,550,931

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 issued and outstanding at December 31, 2016, and December 31, 2015
 
$
56,250,000

 
$
56,250,000

Capital stock, non-convertible, $0.001 par value; 11,886,216 and 11,939,697 shares issued and outstanding at December 31, 2016, and December 31, 2015 (100,000,000 shares authorized)
 
11,886

 
11,940

Additional paid-in capital
 
350,217,746

 
361,581,507

Accumulated other comprehensive income
 
(11,196
)
 
190,797

Total Equity
 
406,468,436

 
418,034,244

Total Liabilities and Equity
 
$
601,329,019

 
$
575,585,175

See accompanying Schedule I Notes to Condensed Financial Statements.
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - CorEnergy Infrastructure Trust, Inc. - Continued
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 
For the Years Ended December 31,
 
 
2016
 
2015
 
2014
Revenue
 
 
 
 
 
 
Lease revenue
 
$

 
$
638,243

 
$
2,552,976

Earnings from subsidiary
 
32,856,338

 
10,894,003

 
6,730,060

Total Revenue
 
32,856,338

 
11,532,246

 
9,283,036

Expenses
 
 
 
 
 
 
General and administrative
 
2,236,358

 
1,426,598

 
1,061,421

Depreciation expense
 
184,380

 
754,050

 
2,463,062

Amortization expense
 
5,316

 
5,316

 
5,318

Total Expenses
 
2,426,054

 
2,185,964

 
3,529,801

Operating Income
 
$
30,430,284

 
$
9,346,282

 
$
5,753,235

Other Income (Expense)
 
 
 
 
 
 
Net distributions and dividend income
 
$
12,963

 
$
13,542

 
$
13,117

Interest on loans to subsidiaries
 
11,705,465

 
9,294,537

 
1,100,349

Interest income (expense), net
 
(12,485,510
)
 
(6,334,450
)
 
147,155

Total Other Income (Expense)
 
(767,082
)
 
2,973,629

 
1,260,621

Net Income
 
29,663,202

 
12,319,911

 
7,013,856

 
 
 
 
 
 
 
Other comprehensive income:
 
 
 
 
 
 
Changes in fair value of qualifying hedges
 
(201,993
)
 
(262,505
)
 
(324,101
)
Total Comprehensive Income
 
29,461,209

 
$
12,057,406

 
$
6,689,755

See accompanying Schedule I Notes to Condensed Financial Statements.
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - CorEnergy Infrastructure Trust, Inc. - Continued
CONDENSED STATEMENTS OF CASH FLOW
 
For the Years Ended December 31,
 
 
2016
 
2015
 
2014
Net cash provided by (used in) operating activities
 
$
(3,141,286
)
 
$
7,166,380

 
$
(2,047,777
)
Investing Activities
 
 
 
 
 
 
Proceeds from sale of leased property held for sale
 

 
7,678,246

 

Issuance of note to subsidiary
 
(47,414,250
)
 

 
(90,000,000
)
Principal payments received from notes to subsidiaries
 
11,899,659

 
2,570,000

 

Investment in consolidated subsidiaries
 

 
(250,703,944
)
 
(96,570,263
)
Cash distributions from consolidated subsidiaries
 
39,139,897

 
23,392,442

 
18,559,328

Net cash provided by (used in) investing activities
 
$
3,625,306

 
$
(217,063,256
)
 
$
(168,010,935
)
Financing Activities
 
 
 
 
 
 
Debt financing costs
 
(193,000
)
 
(1,439,929
)
 
(1,600,908
)
Net offering proceeds on Series A preferred stock
 

 
54,210,476

 

Net offering proceeds on common stock
 

 
73,184,679

 
141,797,913

Net offering proceeds on convertible debt
 

 
111,262,500

 

Repurchases of common stock
 
(2,041,851
)
 

 

Repurchases of convertible debt
 
(899,960
)
 

 

Dividends paid on Series A preferred stock
 
(4,148,437
)
 
(3,503,125
)
 

Dividends paid on common stock
 
(34,896,727
)
 
(28,528,224
)
 
(15,187,976
)
Advances on revolving line of credit
 
44,000,000

 
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
 
(6,460,000
)
 
(1,800,000
)
 

Net cash provided by (used in) financing activities
 
$
(4,639,975
)
 
$
216,386,377

 
$
157,009,029

Net Change in Cash and Cash Equivalents
 
$
(4,155,955
)
 
$
6,489,501

 
$
(13,049,683
)
Cash and Cash Equivalents at beginning of period
 
10,089,436

 
3,599,935

 
16,649,618

Cash and Cash Equivalents at end of period
 
$
5,933,481

 
$
10,089,436

 
$
3,599,935

Supplemental Disclosure of Cash Flow Information
 
 
 
 
 
 
Interest Paid
 
$
11,335,654

 
$
5,254,591

 
$

Income taxes paid (net of refunds)
 
$

 
$
314,728

 
$
192,938

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

 
$

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

 
$
(72,685
)
 
$
72,685

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

 
$
(30,607
)
 
$
(176,961
)
Reinvestment of distributions by common stockholders in additional common shares
 
$
815,889

 
$
817,915

 
$
140,108

See accompanying Schedule I Notes to Condensed Financial Statements.
NOTES TO SCHEDULE I CONDENSED FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
In the parent-company-only financial statements, the Company's investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since the date of acquisition. The parent-company-only financial statements should be read in conjunction with the Company's consolidated financial statements.
NOTE B - DIVIDENDS FROM SUBSIDIARIES
Cash dividends paid to CorEnergy Infrastructure Trust, Inc. from the Company's consolidated subsidiaries were $39.1 million, $23.4 million, and $18.6 million for the years ended December 31, 2016, 2015, and 2014, respectively.
NOTE C - BASIS OF PRESENTATION
The Company reclassified $10.9 million in Earnings from subsidiary in the Condensed Statement of Cash Flows for the 2015 period. The amount previously reported in operating cash flows has been reclassified and presented in investing cash flows in the current year presentation. Line items on the Condensed Statement of Cash Flows impacted by the correction are as follows:
 
 
2015
 Previously Reported
 
Reclassification
 
2015
As
 Adjusted
 
 
 
 
 
 
 
Net Cash provided by operating activities
18,060,382

 
(10,894,002
)
 
7,166,380

 
 
 
 
 
 
 
Investing Activities
 
 
 
 
 
 
Investment in consolidated subsidiaries
(261,597,946
)
 
10,894,002

 
(250,703,944
)
Net Cash used in investing activities
(227,957,258
)
 
10,894,002

 
(217,063,256
)
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CorEnergy Infrastructure Trust, Inc.
 
 
 
 
 
 
Initial Cost to Company
 
Costs Capitalized Subsequent to Acquisition
 
Gross Amount Carried at Close of Period 12/31/16
 
 
 
 
 
 
 
 
Description
 
Location
 
Encumbrances
 
Land
 
Building & Fixtures
 
Improvements / Adjustments (4)
 
Land
 
Building & Fixtures
 
Total
 
Accumulated Depreciation
 
Investment in Real Estate, net, at 12/31/16
 
Date Acquired
 
Life on which depreciation in latest income statement is computed
Pinedale LGS1 6
 
Pinedale, WY
 
$
8,860,577

 
$
105,485,063

 
$
125,119,062

 

 
$
105,485,063

 
$
125,119,062

 
$
230,604,125

 
$
35,762,658

 
$
194,841,467

 
2012
 
26 years
Portland Terminal Facility2 5
 
Portland, OR
 
13,417,612

 
13,700,000

 
27,961,956

 
10,000,000

 
13,700,000

 
37,961,956

 
51,661,956

 
3,468,690

 
48,193,266

 
2014
 
30 years
United Property Systems 5
 
St. Louis, MO
 
380,066

 
210,000

 
1,188,000

 
65,371

 
210,000

 
1,253,371

 
1,463,371

 
65,094

 
1,398,277

 
2014
 
40 years
Grand Isle Gathering System 3 4 5
 
Gulf of Mexico
 
66,942,322

 
960,000

 
258,471,397

 
(1,682,763
)
 
960,000

 
256,788,634

 
257,748,634

 
12,923,275

 
244,825,359

 
2015
 
30 years
 
 
 
 
$
89,600,577

 
$
120,355,063

 
$
412,740,415

 
$
8,382,608

 
$
120,355,063

 
$
421,123,023

 
$
541,478,086

 
$
52,219,717

 
$
489,258,369

 
 
 
 
(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) Initial costs associated with the GIGS asset include amounts capitalized related to an acquired asset retirement obligation (ARO). The negative subsequent adjustment relates to a downward revision of the ARO based on periodic reevaluation as required under FASB ASC 410-20.
(5) These 3 properties are covered by the CorEnergy Credit Facility. The amount outstanding at December 31, 2016, is $36.7 million under the term loan and $44.0 million under the revolver, which have been allocated on a pro rata basis among these properties based on total gross amount carried at the close of December 31, 2016.
(6) The amount outstanding at the Pinedale Credit Facility is $8,860,578, which represents Prudential's 18.95% share. CorEnergy's 81.05% share equals $37,897,082 which is eliminated in consolidation.
NOTES TO SCHEDULE III - CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
Reconciliation of Real Estate and Accumulated Depreciation
 
For the Years Ended December 31,
 
2016
 
2015
 
2014
Investment in real estate:
 
 
 
 
 
Balance, beginning of year
$
543,095,478

 
$
293,823,903

 
$
244,975,206

Addition: Acquisitions and developments
65,373

 
263,398,424

 
48,848,697

Deduction: Dispositions and other1
(1,682,765
)
 
(14,126,849
)
 

Balance, end of year
$
541,478,086

 
$
543,095,478

 
$
293,823,903

Accumulated depreciation:
 
 
 
 
 
Balance, beginning of year
$
33,869,263

 
$
25,295,958

 
$
12,754,588

Addition: Depreciation
18,350,454

 
15,021,908

 
12,541,370

Deduction: Dispositions and other

 
(6,448,603
)
 

Balance, end of year
$
52,219,717

 
$
33,869,263

 
$
25,295,958

(1) The Grand Isle Gathering System had a change in estimate related to the ARO in 2016.

The aggregate cost of the properties is approximately $10,858,436 lower for federal income tax purposes at December 31, 2016. The tax basis of the properties is unaudited.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE - CorEnergy Infrastructure Trust, Inc.
Description
 
Interest Rate
 
Final Maturity
 
Monthly Payment Amount
 
Prior Liens
 
Face Value
 
Carrying Amount of Mortgage
 
Principal Amount of Loans Subject to Delinquent Principal or Interest
First Mortgages
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Billings, Dunn, and McKenzie Counties, North Dakota (Morlock Well)
 
10.00%
 
6/30/2026
 
$
33,333

 
None
 
4,000,000

 
1,500,000

(1)
4,000,000

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

 
None
 
1,000,000

 

(1)
1,000,000

 
 
 
 
 
 
 
 
 
 
$
5,000,000

 
$
1,500,000

 
$
5,000,000

(1) Due to decreased economic activity, a provision for loan loss was recorded for these loans. See Note 4 for further information.
NOTES TO SCHEDULE IV - CONSOLIDATED MORTGAGE LOANS ON REAL ESTATE
Reconciliation of Mortgage Loans on Real Estate
 
 
For the Years Ended December 31,
 
 
2016
 
2015
 
2014
Beginning balance
 
$
6,877,021

 
$
20,435,170

 
$

Additions:
 
 
 
 
 
 
New loans
 
100,000

 

 
20,300,000

Net deferred costs
 

 
(8,211
)
 
(86,508
)
Interest receivable (1)
 
(95,114
)
 
302,395

 
220,349

Total Additions
 
$
4,886

 
$
294,184

 
$
20,433,841

 
 
 
 
 
 
 
Deductions:
 
 
 
 
 
 
Principal repayments
 
$

 
$
100,000

 
$

Foreclosures
 
1,857,000

 
 
 
 
Amortization of deferred costs
 
(2,025
)
 
(6,804
)
 
(1,329
)
Principal, Interest and Deferred Costs Write Down (2)
 
3,526,932

 
13,759,137

 
$

Total deductions
 
$
5,381,907

 
$
13,852,333

 
$
(1,329
)
 
 
 
 
 
 
 
Ending balance
 
$
1,500,000

 
$
6,877,021

 
$
20,435,170

(1) In 2016, $100 thousand of interest receivable on the SWD Enterprises REIT note was converted to principal.
(2) For 2016, the amount of provision for loan loss on the income statement also includes (a) $656 thousand of loan losses not related to mortgage loans and (b) $832 thousand of losses associated with the foreclosure and sale of Black Bison. For 2015, the amount of provision for loan loss on the Income Statement includes $25 thousand that relates to a write down of a prepaid asset relating to the Black Bison loans.
Significant Accounting Policies (Policies)
Basis of Presentation and Use of Estimates
The accompanying consolidated financial statements include CorEnergy accounts and the accounts of its wholly owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) set forth in the Accounting Standards Codification ("ASC"), as published by the Financial Accounting Standards Board ("FASB"), and with the Securities and Exchange Commission (“SEC”) instructions to Form 10-K. The accompanying consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the periods presented. There were no adjustments that, in the opinion of management, were not of a normal and recurring nature. All intercompany transactions and balances have been eliminated in consolidation, and the net earnings are reduced by the portion of net earnings attributable to non-controlling interests.
Use of Estimates – The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Leased Property – The Company includes assets subject to lease arrangements within Leased property, net of accumulated depreciation, in the Consolidated Balance Sheets. Lease payments received are reflected in Lease revenue on the Consolidated Statements of Income, net of amortization of any off-market adjustments. Costs in connection with the creation and execution of a lease are capitalized and amortized over the lease term. See Note 3 for further discussion.
Property and Equipment – Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of the asset. Expenditures for repairs and maintenance are charged to operations as incurred, and improvements, which extend the useful lives of assets, are capitalized and depreciated over the remaining estimated useful life of the asset. The Company initially records long-lived assets at their purchase price plus any direct acquisition costs, unless the transaction is accounted for as a business combination, in which case the acquisition costs are expensed as incurred. If the transaction is accounted for as a business combination, the Company allocates the purchase price to the acquired tangible and intangible assets and liabilities based on their estimated fair values.
Long-Lived Asset Impairment – The Company’s long-lived assets consist primarily of a subsea midstream pipeline system, liquids gathering system, petroleum products terminal, and natural gas pipelines that have been obtained through asset acquisitions and a business combination. Management continually monitors its business, the business environment, and performance of its operations to determine if an event has occurred that indicates that the carrying value of a long-lived asset may be impaired. When a triggering event occurs, which is a determination that involves judgment, management utilizes cash flow projections to assess its ability to recover the carrying value of its assets based on our long-lived assets' ability to generate future cash flows on an undiscounted basis. This differs from the evaluation of goodwill, for which the recoverability assessment utilizes fair value estimates that include discounted cash flows in the estimation process, and accordingly any goodwill impairment recognized may not be indicative of a similar impairment of the related underlying long-lived assets.
Management’s projected cash flows of long-lived assets are generally based on contractual cash flows relating to existing leases that extend many years into the future. If those cash flow projections indicate that the long-lived asset's carrying value is not recoverable, management records an impairment charge for the excess of carrying value of the asset over its fair value. The estimate of fair value considers a number of factors, including the potential value that would be received if the asset were sold, discount rates, and projected cash flows. Due to the imprecise nature of these projections and assumptions, actual results can differ from management’s estimates. There were no impairments of long-lived assets recorded during the years ended December 31, 2016, 2015 or 2014.
Financing Notes Receivable – Financing notes receivable are presented at face value plus accrued interest receivable and deferred loan origination costs and net of related direct loan origination income. Each quarter the Company reviews its financing notes receivable to determine if the balances are realizable based on factors affecting the collectability of those balances. Factors may include credit quality, timeliness of required periodic payments, past due status and management discussions with obligors. The Company evaluates the collectability of both interest and principal of each of its loans to determine if an allowance is needed. An allowance will be recorded when based on current information and events, the Company determines it is probable that it will be unable to collect all amounts due according to the existing contractual terms. If the Company does determine an allowance is necessary, the amount deemed uncollectable is expensed in the period of determination. An insignificant delay or shortfall in the amount of payments does not necessarily result in the recording of an allowance. Generally, when interest and/or principal payments on a loan become past due, or if the Company does not otherwise expect the borrower to be able to service its debt and other obligations, the Company will place the loan on non-accrual status and will generally cease recognizing financing revenue on that loan until all principal and interest have been brought current. Interest income recognition is resumed if and when the previously reserved-for financing notes become contractually current and performance has been demonstrated. Payments received subsequent to the recording of an allowance will be recorded as a reduction to principal.
Investment Securities – The Company’s investments in securities are classified as other equity securities and represent interests in private companies which the Company has elected to report at fair value under the fair value option. These investments generally are subject to restrictions on resale, have no established trading market and are valued on a quarterly basis. Because of the inherent uncertainty of valuation, the fair values of such investments, which are determined in accordance with procedures approved by the Company’s Board of Directors, may differ materially from the values that would have been used had a ready market existed for the investments.
The Company determines fair value to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has determined the principal market, or the market in which the Company exits its private portfolio investments with the greatest volume and level of activity, to be the private secondary market. Typically, private companies are bought and sold based on multiples of EBITDA, cash flows, net income, revenues, or in limited cases, book value.
For private company investments, value is often realized through a liquidity event. Therefore, the value of the Company as a whole (enterprise value) at the reporting date often provides the best evidence of the value of the investment and is the initial step for valuing the Company’s privately issued securities. For any one company, enterprise value may best be expressed as a range of fair values, from which a single estimate of fair value will be derived. In determining the enterprise value of a portfolio company, an analysis is prepared consisting of traditional valuation methodologies including market and income approaches. The Company considers some or all of the traditional valuation methods based on the individual circumstances of the portfolio company in order to derive its estimate of enterprise value.
The fair value of investments in private portfolio companies is determined based on various factors, including enterprise value, observable market transactions, such as recent offers to purchase a company, recent transactions involving the purchase or sale of the equity securities of the company, or other liquidation events. The determined equity values may be discounted when the Company has a minority position, or is subject to restrictions on resale, has specific concerns about the receptivity of the capital markets to a specific company at a certain time, or other comparable factors exist.
The Company undertakes a multi-step valuation process each quarter in connection with determining the fair value of private investments. It has retained an independent valuation firm to provide third party valuation consulting services based on procedures that the Company has identified and may ask them to perform from time to time on all or a selection of private investments as determined by the Company. The multi-step valuation process is specific to the level of assurance that the Company requests from the independent valuation firm. For positive assurance, the process is as follows:
The independent valuation firm prepares the valuations and the supporting analysis.
The valuation report is reviewed and approved by senior management.
The Audit Committee of the Board of Directors reviews the supporting analysis and accepts the valuations.
Fair Value Measurements – FASB ASC 820, Fair Value Measurements and Disclosure ("ASC 820"), defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Various inputs are used in determining the fair value of the Company’s assets and liabilities. These inputs are summarized in the three broad levels listed below:
Level 1 - quoted prices in active markets for identical investments
Level 2 - other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.)
Level 3 - significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)
See Note 11 for further discussion of the Company’s fair value measurements.
Cash and Cash Equivalents – The Company maintains cash balances at financial institutions in amounts that regularly exceed FDIC insured limits. The Company’s cash equivalents are comprised of short-term, liquid money market instruments.
Accounts and other receivables – Accounts receivable are presented at face value net of an allowance for doubtful accounts within accounts and other receivables on the balance sheet. Accounts are considered past due based on the terms of sale with the customers. The Company reviews accounts for collectability based on an analysis of specific outstanding receivables, current economic conditions and past collection experience. For the years ended December 31, 2016 and 2015, the Company determined that an allowance for doubtful accounts was not necessary.
Lease receivables are determined according to the terms of the lease agreements entered into by the Company and its lessees, as discussed within Note 3. Lease receivables may also represent timing differences between straight-line revenue recognition and contractual lease receipts and is recorded within Accounts and other receivables on the balance sheet. As of December 31, 2016, lease payments by our tenants have remained timely and without lapse.
Goodwill – Goodwill represents the excess of the amount paid for the MoGas business over the fair value of the net identifiable assets acquired. To comply with ASC 350, Intangibles - Goodwill and Other ("ASC 350"), the Company performs an impairment test for goodwill annually, or more frequently in the event that a triggering event has occurred. December 31st is the Company’s annual testing date.
In accordance with ASC 350, a company may elect to perform a qualitative assessment to determine whether the two-step quantitative impairment test is required. If the company elects to perform a qualitative assessment, the two-step quantitative impairment test is required only if the conclusion is that it is more likely than not that the reporting unit's fair value is less than its carrying amount. For the December 31, 2016 annual impairment test, management proceeded directly to the quantitative two-step approach and did not perform a qualitative assessment. Under the two-step approach, Step 1 compares the fair value of the reporting unit to its carrying value. As of the December 31, 2016 testing date, the fair value of the MoGas reporting unit was determined to be greater than its carrying value; therefore, a Step 2 was not required to be completed and no impairment was recorded.
The reporting unit fair value is based upon consideration of various valuation methodologies, one of which is projecting future cash flows discounted at rates commensurate with the risks involved ("Discounted Cash Flow" or "DCF"). Assumptions used in a DCF require the exercise of significant judgment, including judgment about appropriate discount rates and terminal values, growth rates, and the amount and timing of expected future cash flows. Forecasted cash flows require management to make judgments and assumptions, including estimates of future volumes and rates. Declines in volumes or rates from those forecasted, or other changes in assumptions, may result in a change in management's estimate and result in an impairment.
Debt Discount and Debt Issuance Costs – Costs incurred for the issuance of new debt are capitalized and amortized into interest expense over the debt term. Issuance costs related to long-term debt are recorded as a direct deduction from the carrying amount of that debt liability, net of accumulated amortization. Issuance costs related to line-of-credit arrangements however, are presented as an asset instead of a direct deduction from the carrying amount of the debt. See Note 12 for further discussion. In accordance with ASC 470, Debt ("ASC 470") the Company recorded its Convertible Senior Notes at the aggregate principal amount, less discount. The Company is amortizing the debt discount over the life of the convertible notes as additional non-cash interest expense utilizing the effective interest method. Refer to Note 13 for additional information.
Asset Retirement Obligations – The Company follows ASC 410-20, Asset Retirement Obligations, which requires that an asset retirement obligation (“ARO”) associated with the retirement of a long-lived asset be recognized as a liability in the period in which it is incurred and becomes determinable, with an offsetting increase in the carrying amount of the associated asset. The Company recognized an existing ARO in conjunction with the acquisition of the GIGS in June 2015, which was initially measured at fair value at the acquisition date.
We measure changes in the ARO liability due to passage of time by applying an interest method of allocation to the amount of the liability at the beginning of the period. The increase in the carrying amount of the liability is recognized as an expense classified as an operating item in the statement of income, hereinafter referred to as ARO accretion expense. The Company periodically reassesses the timing and amount of cash flows anticipated associated with the ARO and adjusts the fair value of the liability accordingly under the guidance in ASC 410-20.
The fair value of the obligation at the acquisition date was capitalized as part of the carrying amount of the related long-lived assets and is being depreciated over the asset's remaining useful life. The useful lives of most pipeline gathering systems are primarily derived from available supply resources and ultimate consumption of those resources by end users. Adjustments to the ARO resulting from reassessments of the timing and amount of cash flows will result in changes to the retirement costs capitalized as part of the carrying amount of the asset.
Refer to Note 14 for additional information.
Revenue Recognition – Specific recognition policies for the Company’s revenue items are as follows:
Lease revenue – Base rent related to the Company’s leased property is recognized on a straight-line basis over the term of the lease when collectability is reasonably assured. Contingent rent is recognized when it is earned, based on the achievement of specified performance criteria. Rental payments received in advance are classified as unearned revenue and included as a liability within the Consolidated Balance Sheets. Unearned revenue is amortized ratably over the lease period as revenue recognition criteria are met. Rental payments received in arrears are accrued and classified as Lease Receivable and included in assets within the Consolidated Balance Sheets.
Transportation and distribution revenue – This represents revenue related to natural gas transportation, distribution, and supply. Transportation revenues are recognized by MoGas 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. Distribution revenue is recognized by Omega based on agreed upon contractual terms over each annual period during the terms of the contract. Beginning February 1, 2016, due to changes that commenced under a new contract with the Department of Defense ("DOD"), gas sales and cost of (gas) sales are presented on a net basis in the Transportation and distribution revenue line.
Omega is also 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 using either a completed contract, percentage of completion, or cost-plus method based on the level and volume of estimates utilized, as well as the certainty or uncertainty of our ability to collect those revenues. Under the new DOD contract, the annual contracted amount for pipeline maintenance is invoiced monthly by Omega on a straight-line basis. Amounts invoiced in excess of earned revenue are classified as unearned revenue and included as a liability within the Consolidated Balance Sheets.
Financing revenue – Historically, financing notes receivable have been 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.
Transportation and distribution expense Included here are both MoGas's costs of operating and maintaining the natural gas transmission line, and Omega's costs of operating and maintaining the natural gas distribution system, including any necessary expansion of the distribution system. These costs are incurred both internally and externally. The internal costs relate to system control, pipeline operations, maintenance, insurance, and taxes. Other internal costs include payroll for employees associated with gas control, field employees, and management. The external costs consist of professional services such as audit and accounting, legal and regulatory, and engineering.
Historically, Omega's amounts paid for gas and propane delivered to customers were presented as cost of sales. Beginning February 1, 2016, under a new contract with the Department of Defense, amounts paid by Omega for gas and propane are netted against sales and are presented in the transportation and distribution revenue line. See paragraph (M) above.
Other Income Recognition Specific policies for the Company’s other income items are as follows:
Net distributions and dividend income from investments – Distributions and dividends from investments are recorded on their ex-dates and are reflected as other income within the accompanying Consolidated Statements of Income. Distributions received from the Company’s investments are generally characterized as ordinary income, capital gains and distributions received from investment securities. The portion characterized as return of capital is paid by our investees from their cash flow from operations. The Company records investment income, capital gains and distributions received from investment securities based on estimates made at the time such distributions are received. Such estimates are based on information available from each company and other industry sources. These estimates may subsequently be revised based on information received from the entities after their tax reporting periods are concluded, as the actual character of these distributions is not known until after the fiscal year end of the Company.
Net realized and unrealized gain (loss) from investments – Securities transactions are accounted for on the date the securities are purchased or sold. Realized gains and losses are reported on an identified cost basis. The Company records investment income and return of capital based on estimates made at the time such distributions are received. Such estimates are based on information available from the portfolio company and other industry sources. These estimates may subsequently be revised based on information received from the portfolio company after their tax reporting periods are concluded, as the actual character of these distributions are not known until after our fiscal year end.
Asset Acquisition Expenses – Costs incurred in connection with the research of real property acquisitions not accounted for as business combinations are expensed until it is determined that the acquisition of the real property is probable. Upon such determination, costs incurred in connection with the acquisition of the property are capitalized as described in paragraph (C) above. Deferred costs related to an acquisition that we have determined, based on our judgment, not to pursue are expensed in the period in which such determination is made. Costs incurred in connection with a business combination are expensed as incurred.
Offering Costs – Offering costs related to the issuance of common or preferred stock are charged to additional paid-in capital when the stock is issued.
Derivative Instruments and Hedging Activities – The Company uses forward swap contracts primarily to reduce exposure to changes in interest rates on a portion of its variable-rate debt and to provide a cash flow hedge. In accordance with FASB ASC 815, Derivatives and Hedging (“ASC 815”), these derivative contracts are recorded on the balance sheet at fair value. Historically, these derivative instruments have been designated as hedges for accounting purposes. The measurement of the cash flow hedge ineffectiveness has historically been recognized in earnings, when applicable. The effective portion of the gain or loss on qualifying swaps has been reported in accumulated other comprehensive income (loss) ("AOCI"), in accordance with ASC 815. For swaps de-designated as cash flow hedges, changes in fair value of the swaps have been fully recognized in earnings. See Note 15 for further discussion.
Earnings Per Share – Basic earnings per share ("EPS") is computed using the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the period except for periods of net loss for which no common share equivalents are included because their effect would be anti-dilutive. Dilutive common equivalent shares consist of shares issuable upon conversion of the Convertible Notes calculated using the if-converted method.
Federal and State Income Taxation – In 2013 the Company qualified for REIT status, and in March 2014 elected (effective as of January 1, 2013), to be treated as a REIT for federal income tax purposes. Because certain of its assets may not produce REIT-qualifying income or be treated as interests in real property, those assets are held in wholly-owned Taxable REIT Subsidiaries ("TRSs") in order to limit the potential that such assets and income could prevent the Company from qualifying as a REIT.
As a REIT, the Company holds and operates certain of its assets through one or more wholly-owned TRSs. The Company's use of TRSs enables it to continue to engage in certain businesses while complying with REIT qualification requirements and also allows it to retain income generated by these businesses for reinvestment without the requirement of distributing those earnings. In the future, the Company may elect to reorganize and transfer certain assets or operations from its TRSs to the Company or other subsidiaries, including qualified REIT subsidiaries.
The Company's trading securities and other equity securities are limited partnerships or limited liability companies which are treated as partnerships for federal and state income tax purposes. As a limited partner, the Company reports its allocable share of taxable income in computing its own taxable income. To the extent held by a TRS, the TRS's tax expense or benefit is included in the Consolidated Statements of Income based on the component of income or gains and losses to which such expense or benefit relates. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is recognized if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. It is expected that for the year ended December 31, 2016, and future periods, any deferred tax liability or asset generated will be related entirely to the assets and activities of the Company's TRSs.
If the Company ceased to qualify as a REIT, the Company, as a C corporation, would be obligated to pay federal and state income tax on its taxable income. Currently, the highest regular marginal federal income tax rate for a corporation is 35 percent. The Company may be subject to a 20 percent federal alternative minimum tax on its federal alternative minimum taxable income to the extent that its alternative minimum tax exceeds its regular federal income tax.
Recent Accounting Pronouncements – In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-09 "Revenue from Contracts with Customers", which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The standard was originally effective for interim and annual periods beginning after December 15, 2016 and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. On July 9, 2015, the FASB approved a one-year deferral of the effective date making the standard effective for interim and annual periods beginning after December 15, 2017. The FASB will continue to permit entities to adopt the standard on the original effective date if they choose. The Company is currently planning to use the modified retrospective transition method. However, we do not expect its adoption to have a significant impact on our consolidated financial statements, as a substantial portion of our revenue consists of rental income from leasing arrangements, which is specifically excluded from ASU 2014-09.
In April 2015, the FASB issued ASU No. 2015-03 "Interest-Imputation of Interest Simplifying the Presentation of Debt Issuance Costs". The amendments in this update require debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. In June 2015, the FASB issued ASU No. 2015-15 "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements" to clarify that ASU No. 2015-03 does not address the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. As a result, an entity may present debt issuance costs related to line-of-credit arrangements as an asset instead of a direct deduction from the carrying amount of the debt. We adopted the accounting standards update as of January 1, 2016 with retrospective application to our December 31, 2015 Consolidated Balance Sheets. The effect of the adoption was to reclassify $510 thousand of debt issuance costs at December 31, 2015 from deferred costs, net of accumulated amortization, to long-term debt.
In January 2016, the FASB issued ASU 2016-01 "Financial Instruments — Overall: Recognition and Measurement of Financial Assets and Financial Liabilities," which will require entities to measure their investments at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicability exception. The practicability exception will be available for equity investments that do not have readily determinable fair values. The guidance will be effective for us beginning with the first quarter of 2018. We are currently evaluating the impact of the new standard but do not believe its adoption will have a material impact on our consolidated financial statements.
In February 2016, the FASB issued ASU No. 2016-02 "Leases" which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016-02 is effective for fiscal years and interim periods beginning after December 31, 2018, with early adoption permitted. At adoption, the standard will be applied using a modified retrospective approach. Management is still in the process of evaluating the impact of the standard on our consolidated financial statements and related disclosures.
In June 2016, the FASB issued ASU 2016-13 "Financial Instruments - Credit Losses" which introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. The new model, referred to as the current expected credit losses ("CECL model"), will apply to financial assets subject to credit losses and measured at amortized cost, and certain off-balance sheet credit exposures. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. Early application of the guidance will be permitted for all entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact that adopting the new standard will have on our consolidated financial statements.
In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments”. This new standard will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The new standard is effective for fiscal years beginning after December 15, 2017 and will require adoption on a retrospective basis unless it is impracticable to apply, in which case we would be required to apply the amendments prospectively as of the earliest date practicable. We are currently evaluating the impact that adopting the new standard will have on our consolidated financial statements.
Leased Properties and Leases (Tables)
The following table summarizes the significant leased properties, major tenants and lease terms:
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 42-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
7/1/15 - 6/30/16: $2,625,417
7/1/16 - 6/30/17: $2,826,250
$1,723,833(2)
$513,355
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.
(2) Monthly rent payments will increase to $1,741,933 beginning January 1, 2017.
The future contracted minimum rental receipts for all leases as of December 31, 2016, are as follows:
Future Minimum Lease Receipts (1)
Years Ending December 31,
 
Amount
2017
 
$
61,201,298

2018
 
61,356,965

2019
 
63,724,621

2020
 
70,890,429

2021
 
77,071,774

Thereafter
 
376,628,521

Total
 
$
710,873,608

(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.
The table below displays the Company's individually significant leases as a percentage of total leased properties and total lease revenues for the periods presented:
 
 
As a Percentage of (1)
 
 
Leased Properties
 
Lease Revenues
 
 
As of December 31,
 
For the Years Ended December 31,
 
 
2016
 
2015
 
2016
 
2015
 
2014
Pinedale LGS
 
39.8%
 
40.0%
 
30.4%
 
42.9%
 
71.9%
Grand Isle Gathering System
 
50.0%
 
50.1%
 
59.8%
 
42.3%
 
Portland Terminal Facility
 
9.9%
 
9.6%
 
9.7%
 
13.3%
 
19.0%
Public Service of New Mexico(2)
 
 
 
 
1.3%
 
9.1%
(1) Insignificant leases are not presented; thus percentages may not sum to 100%.
(2) The Public Service of New Mexico lease terminated on April 1, 2015.
The following table reflects the depreciation and amortization included in the accompanying Consolidated Statements of Income associated with our leases and leased properties:
 
For the Years Ended December 31,
 
2016
 
2015
 
2014
Depreciation Expense
 
 
 
 
 
GIGS
$
8,605,506

 
$
4,317,769

 
$

Pinedale
8,869,440

 
8,869,440

 
8,869,445

Portland Terminal Facility
843,084

 
1,235,369

 
1,390,236

Eastern Interconnect Project

 
569,670

 
2,278,680

United Property Systems
32,424

 
29,700

 
3,011

Total Depreciation Expense
$
18,350,454

 
$
15,021,948

 
$
12,541,372

Amortization Expense - Deferred Lease Costs
 
 
 
 
 
GIGS
$
30,564

 
$
15,130

 
$

Pinedale
61,368

 
61,368

 
61,369

Total Amortization Expense - Deferred Lease Costs
$
91,932

 
$
76,498

 
$
61,369

ARO Accretion Expense
 
 
 
 
 
GIGS
$
726,664

 
$
339,042

 
$

Total ARO Accretion Expense
$
726,664

 
$
339,042

 
$

The following table reflects the deferred costs that are included in the accompanying Consolidated Balance Sheets associated with our leased properties:
 
December 31, 2016
 
December 31, 2015
Net Deferred Lease Costs
 
 
 
GIGS
$
290,447

 
$
321,011

Pinedale
673,085

 
734,454

Total Deferred Lease Costs, net
$
963,532

 
$
1,055,465

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

Total Expenses (2)
35,742,957

Operating Income
17,572,994

Other Expenses, net (3)
(3,997,916
)
Tax Benefit (4)
641,304

Net Income
14,216,382

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

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

Earnings per share:
 
Basic and Diluted
$
1.37

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

(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 related to the acquisition.
Income Taxes (Tables)
Components of the Company’s deferred tax assets and liabilities as of December 31, 2016, and December 31, 2015, are as follows:
Deferred Tax Assets and Liabilities
 
 
December 31, 2016
 
December 31, 2015
Deferred Tax Assets:
 
 
 
 
Net operating loss carryforwards
 
$
1,144,818

 
$
543,116

Net unrealized loss on investment securities
 
61,430

 
251,539

Loan Loss Provision
 
608,086

 
1,257,436

Other loss carryforwards
 
3,187,181

 
1,833,240

Sub-total
 
$
5,001,515

 
$
3,885,331

Deferred Tax Liabilities:
 
 
 
 
Basis reduction of investment in partnerships
 
$
(2,158,746
)
 
$
(2,159,058
)
Cost recovery of leased and fixed assets
 
(1,084,480
)
 
(119,297
)
Sub-total
 
$
(3,243,226
)
 
$
(2,278,355
)
Total net deferred tax asset
 
$
1,758,289

 
$
1,606,976

Total income tax expense/(benefit) differs from the amount computed by applying the federal statutory income tax rate of 35 percent, for the years ended December 31, 2016, 2015 and 2014, to income or loss from operations and other income and expense for the years presented, as follows:
Income Tax Benefit
 
 
For the Years Ended December 31,
 
 
2016
 
2015
 
2014
Application of statutory income tax rate
 
$
10,219,573

 
$
3,630,325

 
$
2,375,903

State income taxes, net of federal tax benefit
 
26,215

 
(134,597
)
 
(47,731
)
Income of Real Estate Investment Trust not subject to tax
 
(10,663,371
)
 
(5,189,849
)
 
(2,607,207
)
Other
 
(46,837
)
 
(253,432
)
 
53,472

Total income tax benefit
 
$
(464,420
)
 
$
(1,947,553
)
 
$
(225,563
)
The components of income tax expense/(benefit) include the following for the periods presented:
Components of Income Tax Benefit
 
 
For the Years Ended December 31,
 
 
2016
 
2015
 
2014
Current tax expense (benefit)
 
 
 
 
 
 
Federal
 
$
(321,720
)
 
$
781,941

 
$
3,456,858

State (net of federal tax benefit)
 
8,613

 
140,069

 
387,079

Total current tax expense (benefit)
 
$
(313,107
)
 
$
922,010

 
$
3,843,937

Deferred tax benefit
 
 
 

 

Federal
 
$
(168,915
)
 
$
(2,594,897
)
 
$
(3,634,689
)
State (net of federal tax benefit)
 
17,602

 
(274,666
)
 
(434,811
)
Total deferred tax benefit
 
$
(151,313
)
 
$
(2,869,563
)
 
$
(4,069,500
)
Total income tax benefit, net
 
$
(464,420
)
 
$
(1,947,553
)
 
$
(225,563
)
The aggregate cost of securities for federal income tax purposes and securities with unrealized appreciation and depreciation, were as follows:
Aggregate Cost of Securities for Income Tax Purposes (unaudited)
 
 
December 31, 2016
 
December 31, 2015
Aggregate cost for federal income tax purposes
 
$
4,327,077

 
$
4,750,252

Gross unrealized appreciation
 
5,408,242

 
5,133,908

Gross unrealized depreciation
 

 
(97,500
)
Net unrealized appreciation
 
$
5,408,242

 
$
5,036,408


The per share characterization by quarter is reflected in the following table:
2016 Preferred Stock Tax Information
Record Date
 
Ex-Dividend Date
 
Payable Date
 
Total Distribution per Share
 
Total Ordinary Dividends
 
Qualified Dividends
 
Capital Gain Distributions
 
Nondividend Distributions
02/12/2016
 
02/10/2016
 
02/29/2016
 
$
0.4609

 
$
0.4609

 
$

 
$

 
$

05/13/2016
 
05/11/2016
 
05/31/2016
 
0.4609

 
0.4609

 

 

 

08/17/2016
 
08/15/2016
 
08/31/2016
 
0.4609

 
0.4609

 

 

 

11/15/2016
 
11/11/2016
 
11/30/2016
 
0.4609

 
0.4609

 

 

 

Total 2016 Distributions
 
$
1.8436

 
$
1.8436

 
$

 
$

 
$

2015 Preferred Stock Tax Information
Record Date
 
Ex-Dividend Date
 
Payable Date
 
Total Distribution per Share
 
Total Ordinary Dividends
 
Qualified Dividends
 
Capital Gain Distributions
 
Nondividend Distributions
05/15/2015
 
05/13/2015
 
06/01/2015
 
$
0.6351

 
$
0.6351

 
$
0.0171

 
$

 
$

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

 
0.4609

 
0.0124

 

 

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

 
0.4609

 
0.0124

 

 

Total 2015 Distributions
 
$
1.5569

 
$
1.5569

 
$
0.0419

 
$

 
$

The per share characterization by quarter is reflected in the following tables:
2016 Common Stock Tax Information
Record Date
 
Ex-Dividend Date
 
Payable Date
 
Total Distribution per Share
 
Total Ordinary Dividends
 
Qualified Dividends
 
Capital Gain Distributions
 
Nondividend Distributions
02/12/2016
 
02/10/2016
 
02/29/2016
 
$
0.7500

 
$
0.2955

 
$

 
$

 
$
0.4545

05/13/2016
 
05/11/2016
 
05/31/2016
 
0.7500

 
0.2955

 

 

 
0.4545

08/17/2016
 
08/15/2016
 
08/31/2016
 
0.7500

 
0.2955

 

 

 
0.4545

11/15/2016
 
11/11/2016
 
11/30/2016
 
0.7500

 
0.2955

 

 

 
0.4545

Total 2016 Distributions
 
$
3.0000

 
$
1.1820

 
$

 
$

 
$
1.8180

2015 Common Stock Tax Information
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
 
11/11/2015
 
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
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

Property and Equipment (Tables)
Property and Equipment
Property and equipment consists of the following:
Property and Equipment
 
 
December 31, 2016
 
December 31, 2015
Land
 
$
580,000

 
$
580,000

Natural gas pipeline
 
124,288,156

 
124,386,349

Vehicles and trailers
 
570,267

 
524,921

Office equipment and computers
 
267,095

 
87,696

Gross property and equipment
 
$
125,705,518

 
$
125,578,966

Less: accumulated depreciation
 
(9,292,712
)
 
(5,948,988
)
Net property and equipment
 
$
116,412,806

 
$
119,629,978



Depreciation of property and equipment is as follows:
 
For the Years Ended December 31,
 
2016
 
2015
 
2014
Depreciation Expense
$
3,353,821

 
$
3,329,063

 
$
592,514

Fair Value (Tables)
The following tables set forth the Company's assets and liabilities measured at fair value on a recurring basis, by input level within the fair value hierarchy, as of December 31, 2016 and December 31, 2015.
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

December 31, 2015
 
 
December 31, 2015
 
Fair Value
 
 
 
Level 1
 
Level 2
 
Level 3
Assets:
 
 
 
 
 
 
 
 
Other equity securities
 
$
8,393,683

 
$

 
$

 
$
8,393,683

Interest rate swap derivative
 
98,259

 

 
98,259

 

Total Assets
 
$
8,491,942

 
$

 
$
98,259

 
$
8,393,683

The changes for all Level 3 securities measured at fair value on a recurring basis using significant unobservable inputs for the years ended December 31, 2016 and 2015, are as follows:
Level 3 Rollforward
For the Year Ended 2016
 
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
 
$
8,393,683

 
$

 
$

 
$
781,154

 
$
112,372

 
$
9,287,209

 
$
781,154

Total
 
$
8,393,683

 
$

 
$

 
$
781,154

 
$
112,372

 
$
9,287,209

 
$
781,154

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Year Ended 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
)
(1) Located in Net realized and unrealized gain on other equity securities in the Consolidated Statements of Income

Certain condensed combined unaudited financial information of the unconsolidated affiliate, Lightfoot, is presented in the following tables (in thousands):
 
 
December 31, 2016
 
December 31, 2015
 
 
(Unaudited)
 
(Unaudited)
Assets
 
 
 
 
Current assets
 
$
20,413

 
$
24,276

Noncurrent assets
 
698,745

 
696,461

Total Assets
 
$
719,158

 
$
720,737

Liabilities
 
 
 
 
Current liabilities
 
$
14,307

 
$
19,993

Noncurrent liabilities
 
268,175

 
246,808

Total Liabilities
 
$
282,482

 
$
266,801

 
 
 
 
 
Partner's equity
 
436,676

 
453,936

Total liabilities and partner's equity
 
$
719,158

 
$
720,737

 
 
For the Years Ended December 31,
 
 
(Unaudited)
 
 
2016
 
2015
 
2014
Revenues
 
$
105,381

 
$
81,788

 
$
54,906

Operating expenses
 
86,071

 
76,774

 
62,835

Income (Loss) from Operations
 
$
19,310

 
$
5,014

 
$
(7,929
)
Other income
 
9,159

 
12,469

 
15,517

Net Income
 
$
28,469

 
$
17,483

 
$
7,588

Less: Net Income attributable to non-controlling interests
 
(18,717
)
 
(8,901
)
 
(761
)
Net Income attributable to Partner's Capital
 
$
9,752

 
$
8,582

 
$
6,827

Carrying and Fair Value Amounts
 
 
Level within fair value hierarchy
 
December 31, 2016
 
December 31, 2015
 
 
 
Carrying
Amount
 
Fair Value
 
Carrying
Amount
 
Fair Value
Financial Assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
Level 1
 
$
7,895,084

 
$
7,895,084

 
$
14,618,740

 
$
14,618,740

Escrow receivable
 
Level 2
 
$

 
$

 
$
1,392,917

 
$
1,392,917

Financing notes receivable (Note 4)
 
Level 3
 
$
1,500,000

 
$
1,500,000

 
$
7,675,626

 
$
7,675,626

Derivative asset
 
Level 2
 
$
19,950

 
$
19,950

 
$
98,259

 
$
98,259

Financial Liabilities:
 
 
 
 
 
 
 
 
Secured credit facilities(1)
 
Level 2
 
$
89,387,985

 
$
89,387,985

 
$
105,440,842

 
$
105,440,842

Unsecured convertible senior notes
 
Level 2
 
$
111,244,895

 
$
129,527,940

 
$
111,423,910

 
$
92,575,000

(1) Includes current maturities
Credit Facilities (Tables)
Deferred Financing Costs, net (1)
 
 
December 31, 2016
 
December 31, 2015
CorEnergy Credit Facility
 
$
2,168,518

 
$
2,975,476

Pinedale Credit Facility
 

 
156,330

Total Deferred Debt Costs, net
 
$
2,168,518

 
$
3,131,806

(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 Years Ended December 31,
 
 
2016
 
2015
 
2014
CorEnergy Credit Facility
 
$
1,078,526

 
$
926,930

 
$
284,709

Pinedale Credit Facility
 
156,330

 
500,326

 
516,864

Total Deferred Debt Cost Amortization
 
$
1,234,856

 
$
1,427,256

 
$
801,573

(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.
The following is a summary of debt facilities and balances as of December 31, 2016 and December 31, 2015:
 
Total Commitment
 or Original Principal
 
Quarterly Principal Payments
 
 
 
December 31, 2016
 
December 31, 2015
 
 
 
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
%
 
$
115,000,000

 
7.00
%
CorEnergy Credit Facility:
 
 
 
 
 
 
 
 
 
 
 
 
 
CorEnergy Revolver
$
105,000,000

 
$

 
12/15/2019
 
44,000,000

 
3.76
%
 

 
3.07
%
CorEnergy Term Loan
$
45,000,000

 
$
1,615,000

 
12/15/2019
 
36,740,000

 
3.74
%
 
43,200,000

 
3.07
%
MoGas Revolver
$
3,000,000

 
$

 
12/15/2019
 

 
3.77
%
 

 
3.07
%
Omega Line of Credit
$
1,500,000

 
$

 
7/31/2017
 

 
4.77
%
 

 
4.43
%
Pinedale Credit Facility:
 
 
 
 
 
 
 
 
 
 
 
 
 
$70M Term Loan
$
70,000,000

 
$

 
3/30/2016
 

 

 
62,532,000

 
4.67
%
$58.5M Term Loan – related party (1)
$
11,085,750

 
$
167,139

 
3/30/2021
 
8,860,577

 
8.00
%
 

 

Total Debt
 
$
203,600,577

 
 
 
$
220,732,000

 
 
Less:
 
 
 
 
 
 
 
 
Unamortized deferred financing costs (2)
 
$
381,531

 
 
 
$
510,401

 
 
Unamortized discount on 7% Convertible Senior Notes
 
2,586,166

 
 
 
3,356,847

 
 
Long-term debt, net of deferred financing costs
 
$
200,632,880

 
 
 
$
216,864,752

 
 
Debt due within one year
 
$
7,128,556

 
 
 
$
66,132,000

 
 
(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.
The remaining contractual principal payments as of December 31, 2016, under the credit facilities are as follows:
Total Remaining Contractual Payments
Year
 
CorEnergy
Revolver
 
CorEnergy Term Loan
 
Pinedale Credit Facility
 
Total
2017
 

 
6,460,000

 
668,556

 
7,128,556

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
 

 

 
6,186,353

 
6,186,353

Total
 
$
44,000,000

 
$
36,740,000

 
$
8,860,577

 
$
89,600,577

Convertible Debt (Tables)
Components of convertible debt
The following is a summary of the impact of Convertible Notes on interest expense for the years ended December 31, 2016 and 2015:
Convertible Note Interest Expense
 
 
For the Years Ended December 31,
 
 
2016
 
2015
7% Convertible Notes
 
$
8,008,195

 
$
4,069,722

Discount Amortization
 
744,081

 
380,653

Deferred Debt Issuance Amortization
 
48,566

 
21,656

Total
 
$
8,800,842

 
$
4,472,031

Asset Retirement Obligation (Tables)
Schedule of asset retirement obligations
The following table is a reconciliation of the asset retirement obligation as of December 31, 2016 and 2015:
Asset Retirement Obligation
 
 
For the Years Ended
 
 
2016
 
2015
Beginning asset retirement obligation
 
$
12,839,042

 
$

Liabilities assumed
 

 
12,500,000

ARO accretion expense
 
726,664

 
339,042

Revision in cash flow estimates
 
(1,682,763
)
 

Ending asset retirement obligation
 
$
11,882,943

 
$
12,839,042

Interest Rate Hedge Swaps (Tables)
Schedule of gain (loss) on derivative instruments
The table below presents the effect of the Company’s derivative financial instruments on the Statements of Income and Comprehensive Income for the years ended December 31, 2016, 2015 and 2014 (note that the ineffective portion is not presented as it was inconsequential for all periods presented):
 
 
For the Years Ended December 31,
Derivatives in Cash Flow Hedging Relationship
 
2016
 
2015
 
2014
Amount of Loss on Derivatives Recognized in AOCI (Effective Portion)
 
$
(300,181
)
 
$
(611,879
)
 
$
(705,826
)
Amount of Loss on Derivatives Reclassified from AOCI (Effective Portion) Recognized in Net Income(1)
 
(50,964
)
 
(287,999
)
 
(305,945
)
 
 
 
 
 
 
 
Derivatives Not Designated as Hedging Instruments
 
 
 
 
 
 
Amount of Gain on Derivatives Recognized in Income(2)
 
$
73,204

 
$

 
$

(1) Included in "Interest Expense" on the face of the Consolidated Statements of Income and Comprehensive Income.
(2) The gain recognized in income on derivatives includes changes in fair value for derivatives subsequent to de-designation from hedge accounting.
Earnings Per Share (Tables)
Computation of basic and diluted earnings per share
Earnings Per Share
 
For the Years Ended December 31,
 
2016
 
2015
 
2014
Net income attributable to CorEnergy stockholders
$
29,663,200

 
$
12,319,911

 
$
7,013,856

Less: preferred dividend requirements
4,148,437

 
3,848,828

 

Net income attributable to common stockholders
$
25,514,763

 
$
8,471,083

 
$
7,013,856

Weighted average shares - basic
11,901,985

 
10,685,892

 
6,605,715

Basic earnings per share
$
2.14

 
$
0.79

 
$
1.06

 
 
 
 
 
 
Net income attributable to common stockholders (from above)
$
25,514,763

 
$
8,471,083

 
$
7,013,856

Add: After tax effect of convertible interest

 

 

Income attributable for dilutive securities
$
25,514,763

 
$
8,471,083

 
$
7,013,856

Weighted average shares - diluted
11,901,985

 
10,685,892

 
6,605,715

Diluted earnings per share
$
2.14

 
$
0.79

 
$
1.06

Quarterly Financial Data (Unaudited) (Tables)
Schedule of Quarterly Financial Information
 
 
For the Fiscal 2016 Quarters Ended
 
 
March 31
 
June 30
 
September 30
 
December 31
Revenue
 
 
 
 
 
 
 
 
Lease revenue
 
$
16,996,072

 
$
16,996,072

 
$
16,996,155

 
$
17,005,831

Transportation and distribution revenue
 
5,099,451

 
5,064,680

 
5,119,330

 
5,810,651

Financing revenue
 
162,344

 

 

 

Total Revenue
 
22,257,867

 
22,060,752

 
22,115,485

 
22,816,482

Expenses
 
 
 
 
 
 
 
 
Transportation and distribution expenses
 
1,362,325

 
1,378,306

 
1,482,161

 
2,240,556

General and administrative
 
3,289,852

 
2,773,240

 
3,021,869

 
3,185,419

Depreciation, amortization and ARO accretion expense
 
5,296,818

 
5,737,025

 
5,744,266

 
5,744,762

Provision for loan losses
 
4,645,188

 
369,278

 

 

Total Expenses
 
14,594,183

 
10,257,849

 
10,248,296

 
11,170,737

Income from Operations, before income taxes
 
$
7,663,684

 
$
11,802,903

 
$
11,867,189

 
$
11,645,745

Other Income (Expense)
 
 
 
 
 
 
 
 
Net distributions and dividend income
 
$
375,573

 
$
214,169

 
$
277,523

 
$
273,559

Net realized and unrealized gain (loss) on other equity securities
 
(1,628,752
)
 
1,199,665

 
1,430,858

 
(177,289
)
Interest expense
 
(3,926,009
)
 
(3,540,812
)
 
(3,520,856
)
 
(3,430,162
)
Total Other Income (Expense)
 
(5,179,188
)
 
(2,126,978
)
 
(1,812,475
)
 
(3,333,892
)
Income before income taxes
 
2,484,496

 
9,675,925

 
10,054,714

 
8,311,853

Taxes
 
 
 
 
 
 
 
 
Current tax expense (benefit)
 
(677,731
)
 
203,652

 
95,125

 
65,847

Deferred tax expense (benefit)
 
(577,395
)
 
206,786

 
388,027

 
(168,731
)
Income tax expense (benefit), net
 
(1,255,126
)
 
410,438

 
483,152

 
(102,884
)
Net Income
 
3,739,622

 
9,265,487

 
9,571,562

 
8,414,737

Less: Net Income attributable to non-controlling interest
 
348,501

 
310,960

 
340,377

 
328,370

Net Income attributable to CorEnergy Stockholders
 
$
3,391,121

 
$
8,954,527

 
$
9,231,185

 
$
8,086,367

Preferred dividend requirements
 
1,037,109

 
1,037,109

 
1,037,109

 
1,037,110

Net Income attributable to Common Stockholders
 
$
2,354,012

 
$
7,917,418

 
$
8,194,076

 
$
7,049,257

 
 
 
 
 
 
 
 
 
Earnings Per Common Share:
 
 
 
 
 
 
 
 
Basic
 
$
0.20

 
$
0.66

 
$
0.69

 
$
0.59

Diluted
 
$
0.20

 
$
0.66

 
$
0.68

 
$
0.59

See accompanying Notes to Consolidated Financial Statements.

 
 
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

Transportation and distribution revenue
 
3,649,735

 
3,546,979

 
3,557,096

 
3,591,459

Financing revenue
 
660,392

 
668,904

 
182,604

 
185,650

Sales revenue
 
2,341,655

 
1,665,908

 
1,434,694

 
1,717,787

Total Revenue
 
13,987,883

 
12,681,670

 
22,140,450

 
22,478,932

Expenses
 
 
 
 
 
 
 
 
Transportation and distribution expenses
 
1,197,968

 
1,272,025

 
1,120,862

 
1,018,870

Cost of sales
 
1,248,330

 
569,958

 
382,851

 
618,073

General and administrative
 
2,568,519

 
1,905,329

 
2,837,762

 
2,434,094

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

Total Expenses
 
9,063,649

 
7,243,298

 
18,129,277

 
15,289,105

Income 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

 
 
 
 
 
 
 
 
 
Earnings (Loss) Per Common Share:
 
 
 
 
 
 
 
 
Basic
 
$
0.36

 
$
0.33

 
$
(0.05
)
 
$
0.22

Diluted
 
$
0.36

 
$
0.33

 
$
(0.05
)
 
$
0.22

See accompanying Notes to Consolidated Financial Statements.
Significant Accounting Policies (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Provision for loan loss
$ 0 
$ 0 
$ 369,278 
$ 4,645,188 
$ 5,833,000 
$ 7,951,137 
$ 0 
$ 0 
$ 5,014,466 
$ 13,800,000 
$ 0 
Deferred debt financing costs, net
3,132,050 
 
 
 
4,187,271 
 
 
 
3,132,050 
4,187,271 
 
Accounting Standards Update 2015-03 [Member] |
Intangibles and Deferred Costs, Net of Accumulated Amortization [Member]
 
 
 
 
 
 
 
 
 
 
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Deferred debt financing costs, net
 
 
 
 
(510,000)
 
 
 
 
(510,000)
 
Accounting Standards Update 2015-03 [Member] |
Long-term Debt [Member]
 
 
 
 
 
 
 
 
 
 
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Deferred debt financing costs, net
 
 
 
 
$ 510,000 
 
 
 
 
$ 510,000 
 
Leased Properties and Leases (Details) (USD $)
12 Months Ended 12 Months Ended
Dec. 31, 2016
leased_property
Dec. 31, 2016
Grand Isle Gathering System [Member]
mi
acre
Jun. 30, 2016
Grand Isle Gathering System [Member]
Jun. 30, 2017
Grand Isle Gathering System [Member]
Forecast [Member]
Dec. 31, 2016
Pinedale Liquids Gathering System [Member]
facility
mi
Dec. 31, 2017
Pinedale Liquids Gathering System [Member]
Forecast [Member]
Dec. 31, 2016
Pinedale Liquids Gathering System [Member]
Prudential [Member]
Limited Partner [Member]
Dec. 31, 2016
Pinedale Liquids Gathering System [Member]
Pinedale LP [Member]
General Partner [Member]
Dec. 31, 2016
Portland Terminal Facility [Member]
bbl
acre
tank
Dec. 31, 2016
Minimum [Member]
Dec. 31, 2016
Maximum [Member]
Sale Leaseback Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Number of significant leased properties
 
 
 
 
 
 
 
 
 
 
Initial Lease Term
 
11 years 
 
 
15 years 
 
 
 
15 years 
11 years 
15 years 
Length of offshore pipeline (in miles)
 
153 
 
 
150 
 
 
 
 
 
 
Pipeline capacity (in bbl/day)
 
120,000 
 
 
 
 
 
 
 
 
 
Number of acres in the onshore terminal and saltwater disposal system (in acres)
 
16 
 
 
 
 
 
 
 
 
 
Number of storage facilities
 
 
 
 
 
 
 
 
 
 
Acres owned (in acres)
 
 
 
 
 
 
 
 
42 
 
 
Number of tanks
 
 
 
 
 
 
 
 
84 
 
 
Crude oil and petroleum product storage capacity (in bbl)
 
 
 
 
 
 
 
 
1,500,000 
 
 
Renewal Option
 
9 years 
 
 
5 years 
 
 
 
5 years 
 
 
Renewal Term, percentage of remaining useful life
 
75.00% 
 
 
 
 
 
 
 
 
 
Current Monthly Rent Payments
 
 
$ 2,625,417 
$ 2,826,250 
$ 1,723,833 
$ 1,741,933 
 
 
$ 513,355 
 
 
Estimated Useful Life
 
27 years 
 
 
26 years 
 
 
 
30 years 
 
 
Ownership percentage
 
 
 
 
 
 
18.95% 
81.05% 
 
 
 
Leased Properties and Leases - Future Minimum Lease Receipts (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Sale Leaseback Transaction [Line Items]
 
2017
$ 61,201,298 
2018
61,356,965 
2019
63,724,621 
2020
70,890,429 
2021
77,071,774 
Thereafter
376,628,521 
Total
$ 710,873,608 
Portland Terminal Facility [Member]
 
Sale Leaseback Transaction [Line Items]
 
Initial lease term
15 years 
Exercise period of purchase option
90 days 
Leased Properties and Leases - Significant Leases (Details)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Pinedale LGS [Member]
 
 
 
Operating Leased Assets [Line Items]
 
 
 
Percentage of total leased properties
39.80% 
40.00% 
 
Percentage of leased property revenue
30.40% 
42.90% 
71.90% 
Grand Isle Gathering System [Member]
 
 
 
Operating Leased Assets [Line Items]
 
 
 
Percentage of total leased properties
50.00% 
50.10% 
 
Percentage of leased property revenue
59.80% 
42.30% 
0.00% 
Portland Terminal Facility [Member]
 
 
 
Operating Leased Assets [Line Items]
 
 
 
Percentage of total leased properties
9.90% 
9.60% 
 
Percentage of leased property revenue
9.70% 
13.30% 
19.00% 
Public Service Company of New Mexico [Member]
 
 
 
Operating Leased Assets [Line Items]
 
 
 
Percentage of total leased properties
0.00% 
0.00% 
 
Percentage of leased property revenue
0.00% 
1.30% 
9.10% 
Leased Properties and Leases - Amortization and Depreciation Expense (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Sale Leaseback Transaction [Line Items]
 
 
 
Depreciation Expense
$ 3,353,821 
$ 3,329,063 
$ 592,514 
ARO Accretion Expense
726,664 
339,042 
 
All Properties [Member]
 
 
 
Sale Leaseback Transaction [Line Items]
 
 
 
Depreciation Expense
18,350,454 
15,021,948 
12,541,372 
Amortization Expense - Deferred Lease Costs
91,932 
76,498 
61,369 
ARO Accretion Expense
726,664 
339,042 
Net Deferred Lease Costs
963,532 
1,055,465 
 
GIGS [Member]
 
 
 
Sale Leaseback Transaction [Line Items]
 
 
 
Depreciation Expense
8,605,506 
4,317,769 
Amortization Expense - Deferred Lease Costs
30,564 
15,130 
ARO Accretion Expense
726,664 
339,042 
Net Deferred Lease Costs
290,447 
321,011 
 
Pinedale [Member]
 
 
 
Sale Leaseback Transaction [Line Items]
 
 
 
Depreciation Expense
8,869,440 
8,869,440 
8,869,445 
Amortization Expense - Deferred Lease Costs
61,368 
61,368 
61,369 
Net Deferred Lease Costs
673,085 
734,454 
 
Portland Terminal Facility [Member]
 
 
 
Sale Leaseback Transaction [Line Items]
 
 
 
Depreciation Expense
843,084 
1,235,369 
1,390,236 
Eastern Interconnect Project [Member]
 
 
 
Sale Leaseback Transaction [Line Items]
 
 
 
Depreciation Expense
569,670 
2,278,680 
United Property Systems [Member]
 
 
 
Sale Leaseback Transaction [Line Items]
 
 
 
Depreciation Expense
$ 32,424 
$ 29,700 
$ 3,011 
Leased Properties and Leases - Additional Information (Details) (USD $)
12 Months Ended 12 Months Ended
Dec. 31, 2016
Public Service Company of New Mexico [Member]
customer
Apr. 1, 2015
Public Service Company of New Mexico [Member]
Nov. 1, 2012
Public Service Company of New Mexico [Member]
Dec. 31, 2015
Lease Revenue [Member]
Dec. 31, 2014
Lease Revenue [Member]
Sale Leaseback Transaction [Line Items]
 
 
 
 
 
Undivided interest
 
 
40.00% 
 
 
Lease agreement
 
$ 7,700,000 
 
 
 
Number of customers served
500,000 
 
 
 
 
Intangible asset amortized
 
 
1,100,000 
 
 
Amortization of intangible assets
 
 
 
$ 73,000 
$ 292,000 
Financing Notes Receivable - Black Bison Financing Notes (Details) (USD $)
3 Months Ended 12 Months Ended 0 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2014
Line of Credit [Member]
Mar. 13, 2014
Black Bison Water Services LLC [Member]
Line of Credit [Member]
Jul. 23, 2014
Black Bison Water Services LLC [Member]
Line of Credit [Member]
Jul. 23, 2014
Black Bison Water Services LLC [Member]
Long-term Debt [Member]
Dec. 31, 2014
Subsidiaries [Member]
Long-term Debt [Member]
Jul. 23, 2014
Subsidiaries [Member]
Black Bison Water Services LLC [Member]
Long-term Debt [Member]
Dec. 31, 2015
Loans Agreement [Member]
Subsidiaries [Member]
Dec. 31, 2015
Black Bison and Intermediate Holdings [Member]
Feb. 29, 2016
BB Intermediate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advances on revolving line of credit
 
 
 
 
 
 
 
 
$ 44,000,000 
$ 45,392,332 
$ 34,676,948 
$ 4,000,000 
$ 4,300,000 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
 
 
11,500,000 
15,300,000 
12,000,000 
1,000,000 
3,300,000 
 
 
 
Interest Rate
 
 
 
 
 
 
 
 
 
 
 
 
12.00% 
 
 
 
 
 
 
 
Basis spread on variable rate
 
 
 
 
 
 
 
 
 
 
 
2.00% 
2.00% 
 
 
 
 
 
 
 
Variable rent cap percentage
 
 
 
 
 
 
 
 
 
 
 
 
19.00% 
 
 
 
 
 
 
 
Provision for loan loss
369,278 
4,645,188 
5,833,000 
7,951,137 
5,014,466 
13,800,000 
 
 
 
 
 
 
 
 
 
Deferred origination costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
14,000 
 
 
Interest accrued
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
355,000 
 
 
Net note receivable balance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2,000,000 
 
Equity interest percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
Financing Notes Receivable (Details) (USD $)
3 Months Ended 12 Months Ended 0 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2016
SWD Enterprises [Member]
Feb. 29, 2016
BB Intermediate [Member]
Dec. 31, 2014
Line of Credit [Member]
Dec. 31, 2014
Line of Credit [Member]
TRS Loan [Member]
Dec. 31, 2014
Line of Credit [Member]
REIT Loan [Member]
Dec. 31, 2014
Long-term Debt [Member]
Subsidiaries [Member]
Oct. 1, 2016
SWD Enterprises [Member]
Dec. 31, 2016
SWD Enterprises [Member]
TRS Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advances on revolving line of credit
 
 
 
 
 
 
 
 
$ 44,000,000 
$ 45,392,332 
$ 34,676,948 
 
 
$ 4,000,000 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,000,000 
 
 
Interest Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13.00% 
12.00% 
 
 
 
Basis spread on variable rate
 
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
 
 
 
 
 
Provision for loan loss
369,278 
4,645,188 
5,833,000 
7,951,137 
5,014,466 
13,800,000 
3,500,000 
 
 
 
 
 
 
 
Equity interest percentage
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
Deferred origination costs
 
 
 
 
 
 
 
 
 
 
 
71,000 
 
 
 
 
 
 
 
Interest accrued
 
 
 
 
 
 
 
 
 
 
 
98,000 
 
 
 
 
 
 
 
Reduction in interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10.00% 
 
Financing receivable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,500,000 
MoGas Transaction (Details) (Mogas [Member], USD $)
In Millions, unless otherwise specified
0 Months Ended
Nov. 24, 2014
business
Mogas [Member]
 
Business Acquisition [Line Items]
 
Number of businesses acquired
Purchase price
$ 125 
MoGas Transaction - Pro Forma Information (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Less: Net Income attributable to non-controlling interest
$ 328,370 
$ 340,377 
$ 310,960 
$ 348,501 
$ 384,221 
$ 410,806 
$ 412,004 
$ 410,175 
$ 1,328,208 
$ 1,617,206 
$ 1,556,157 
Mogas [Member]
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total Revenue
 
 
 
 
 
 
 
 
 
 
53,315,951 
Total Expenses
 
 
 
 
 
 
 
 
 
 
35,742,957 
Operating Income
 
 
 
 
 
 
 
 
 
 
17,572,994 
Other Expenses, net
 
 
 
 
 
 
 
 
 
 
(3,997,916)
Tax Benefit
 
 
 
 
 
 
 
 
 
 
641,304 
Net Income
 
 
 
 
 
 
 
 
 
 
14,216,382 
Less: Net Income attributable to non-controlling interest
 
 
 
 
 
 
 
 
 
 
1,556,157 
Net Income attributable to CORR Stockholders
 
 
 
 
 
 
 
 
 
 
$ 12,660,225 
Earnings per share, Basic and Diluted (in dollars per share)
 
 
 
 
 
 
 
 
 
 
$ 1.37 
Weighted Average Shares of Common Stock Outstanding, Basic and Diluted (in shares)
 
 
 
 
 
 
 
 
 
 
9,236,345 
Income Taxes - Deferred Tax Assets and Liabilities (Details) (USD $)
Dec. 31, 2016
Dec. 31, 2015
Deferred Tax Assets:
 
 
Net operating loss carryforwards
$ 1,144,818 
$ 543,116 
Net unrealized loss on investment securities
61,430 
251,539 
Loan Loss Provision
608,086 
1,257,436 
Other loss carryforwards
3,187,181 
1,833,240 
Sub-total
5,001,515 
3,885,331 
Deferred Tax Liabilities:
 
 
Basis reduction of investment in partnerships
(2,158,746)
(2,159,058)
Cost recovery of leased and fixed assets
(1,084,480)
(119,297)
Sub-total
(3,243,226)
(2,278,355)
Total net deferred tax asset
$ 1,758,289 
$ 1,606,976 
Income Taxes (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Income Taxes (Textual) [Abstract]
 
 
 
Federal statutory income tax rate
35.00% 
35.00% 
35.00% 
Net operating loss for federal income tax purposes
$ 3,000,000 
 
 
NOL expiring in 2033 if not utilized
90,000 
 
 
NOL expiring in 2034 if not utilized
804,000 
 
 
NOL expiring in 2035 if not utilized
479,000 
 
 
NOL expiring in 2036 if not utilized
1,600,000 
 
 
Subsidiaries [Member]
 
 
 
Income Taxes (Textual) [Abstract]
 
 
 
Net operating loss for federal income tax purposes
$ 1,600,000 
$ 1,400,000 
 
State [Member] |
Subsidiaries [Member]
 
 
 
Income Taxes (Textual) [Abstract]
 
 
 
Blended state tax rate
3.78% 
2.82% 
3.92% 
State [Member] |
MISSOURI |
Mowood LLC [Member]
 
 
 
Income Taxes (Textual) [Abstract]
 
 
 
Blended state tax rate
5.00% 
5.00% 
5.00% 
Income Taxes - Income Tax Benefit (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Total income tax expense (benefit) differs from the amount computed by applying the federal statutory income tax rates net investment income and net realized and unrealized gains on investments
 
 
 
 
 
 
 
 
 
 
 
Application of statutory income tax rate
 
 
 
 
 
 
 
 
$ 10,219,573 
$ 3,630,325 
$ 2,375,903 
State income taxes, net of federal tax benefit
 
 
 
 
 
 
 
 
26,215 
(134,597)
(47,731)
Income of Real Estate Investment Trust not subject to tax
 
 
 
 
 
 
 
 
(10,663,371)
(5,189,849)
(2,607,207)
Other
 
 
 
 
 
 
 
 
(46,837)
(253,432)
53,472 
Income tax benefit, net
$ (102,884)
$ 483,152 
$ 410,438 
$ (1,255,126)
$ (370,102)
$ (1,848,953)
$ (48,863)
$ 320,365 
$ (464,420)
$ (1,947,553)
$ (225,563)
Income Taxes - Components of Income Tax Benefit (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Current tax expense (benefit)
 
 
 
 
 
 
 
 
 
 
 
Federal
 
 
 
 
 
 
 
 
$ (321,720)
$ 781,941 
$ 3,456,858 
State (net of federal tax benefit)
 
 
 
 
 
 
 
 
8,613 
140,069 
387,079 
Total current tax expense (benefit)
65,847 
95,125 
203,652 
(677,731)
276,755 
105,020 
104,479 
435,756 
(313,107)
922,010 
3,843,937 
Deferred tax benefit
 
 
 
 
 
 
 
 
 
 
 
Federal
 
 
 
 
 
 
 
 
(168,915)
(2,594,897)
(3,634,689)
State (net of federal tax benefit)
 
 
 
 
 
 
 
 
17,602 
(274,666)
(434,811)
Total deferred tax benefit
(168,731)
388,027 
206,786 
(577,395)
(646,857)
(1,953,973)
(153,342)
(115,391)
(151,313)
(2,869,563)
(4,069,500)
Income tax benefit, net
$ (102,884)
$ 483,152 
$ 410,438 
$ (1,255,126)
$ (370,102)
$ (1,848,953)
$ (48,863)
$ 320,365 
$ (464,420)
$ (1,947,553)
$ (225,563)
Income Taxes - Aggregate Cost of Securities for Income Tax Purposes (Details) (USD $)
Dec. 31, 2016
Dec. 31, 2015
Aggregate cost of securities for federal income tax purposes and securities with unrealized appreciation and depreciation
 
 
Aggregate cost for federal income tax purposes
$ 4,327,077 
$ 4,750,252 
Gross unrealized appreciation
5,408,242 
5,133,908 
Gross unrealized depreciation
(97,500)
Net unrealized appreciation
$ 5,408,242 
$ 5,036,408 
Income Taxes - Common Stock Distribution (Details)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 3 
$ 2.75 
$ 2.57 
Dividend Declared [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 3 
$ 2.75 
$ 2.57 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 1.8436 
$ 1.5569 
 
Ordinary Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 1.182 
$ 1.98 
$ 1.908 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 1.8436 
$ 1.5569 
 
Qualified Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0.0534 
$ 0.924 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0.0419 
 
Capital Gain Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0 
$ 0 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0 
 
Nondividend Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 1.818 
$ 0.77 
$ 0.662 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0 
 
Installment One [Member] |
Dividend Declared [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0.75 
$ 0.65 
$ 0.625 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0.4609 
$ 0.6351 
 
Installment One [Member] |
Ordinary Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0.2955 
$ 0.468 
$ 0.464 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0.4609 
$ 0.6351 
 
Installment One [Member] |
Qualified Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0.0126 
$ 0.225 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0.0171 
 
Installment One [Member] |
Capital Gain Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0 
$ 0 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0 
 
Installment One [Member] |
Nondividend Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0.4545 
$ 0.1820 
$ 0.161 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0 
 
Installment Two [Member] |
Dividend Declared [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0.75 
$ 0.675 
$ 0.645 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0.4609 
$ 0.4609 
 
Installment Two [Member] |
Ordinary Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0.2955 
$ 0.486 
$ 0.479 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0.4609 
$ 0.4609 
 
Installment Two [Member] |
Qualified Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0.0131 
$ 0.232 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0.0124 
 
Installment Two [Member] |
Capital Gain Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0 
$ 0 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0 
 
Installment Two [Member] |
Nondividend Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0.4545 
$ 0.1890 
$ 0.166 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0 
 
Installment Three [Member] |
Dividend Declared [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0.75 
$ 0.675 
$ 0.65 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0.46091 
$ 0.4609 
 
Installment Three [Member] |
Ordinary Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0.2955 
$ 0.486 
$ 0.4825 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0.46091 
$ 0.4609 
 
Installment Three [Member] |
Qualified Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0.0131 
$ 0.2335 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0.0124 
 
Installment Three [Member] |
Capital Gain Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0 
$ 0 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0 
 
Installment Three [Member] |
Nondividend Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0.4545 
$ 0.1890 
$ 0.1675 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0 
 
Installment Four [Member] |
Dividend Declared [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0.75 
$ 0.75 
$ 0.65 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0.4609 
 
 
Installment Four [Member] |
Ordinary Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0.2955 
$ 0.54 
$ 0.4825 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0.4609 
 
 
Installment Four [Member] |
Qualified Dividends [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0.0146 
$ 0.2335 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0 
 
 
Installment Four [Member] |
Capital Gain Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0 
$ 0 
$ 0 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0 
 
 
Installment Four [Member] |
Nondividend Distribution [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Common Stock, Dividends declared per share (in dollars per share)
$ 0.4545 
$ 0.21 
$ 0.1675 
Preferred Stock, Dividends declared per share (in dollars per share)
$ 0 
 
 
Common Stock [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Ordinary income dividend percentage
39.40% 
 
 
Return of capital percentage
60.60% 
 
 
Qualified dividend income percentage
0.00% 
 
 
Preferred Stock [Member]
 
 
 
Dividends Payable [Line Items]
 
 
 
Ordinary income dividend percentage
100.00% 
 
 
Return of capital percentage
0.00% 
 
 
Qualified dividend income percentage
0.00% 
 
 
Property and Equipment (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Component of property and equipment
 
 
 
Gross property and equipment
$ 125,705,518 
$ 125,578,966 
 
Less: accumulated depreciation
(9,292,712)
(5,948,988)
 
Net property and equipment
116,412,806 
119,629,978 
 
Depreciation Expense
3,353,821 
3,329,063 
592,514 
Land [Member]
 
 
 
Component of property and equipment
 
 
 
Gross property and equipment
580,000 
580,000 
 
Natural gas pipeline [Member]
 
 
 
Component of property and equipment
 
 
 
Gross property and equipment
124,288,156 
124,386,349 
 
Vehicles and trailers [Member]
 
 
 
Component of property and equipment
 
 
 
Gross property and equipment
570,267 
524,921 
 
Office equipment and computers [Member]
 
 
 
Component of property and equipment
 
 
 
Gross property and equipment
$ 267,095 
$ 87,696 
 
Property and Equipment - Additional Information (Details) (USD $)
12 Months Ended 0 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2016
Provision for Loan Losses [Member]
Jun. 16, 2016
Expedition Water Solutions [Member]
Wells and Related Equipment [Member]
Jun. 30, 2016
Expedition Water Solutions [Member]
Wells and Related Equipment [Member]
Jun. 16, 2016
Expedition Water Solutions [Member]
Wells and Related Equipment [Member]
Accounts and Other Receivables [Member]
Feb. 29, 2016
BB Intermediate [Member]
Property, Plant and Equipment [Line Items]
 
 
 
 
 
 
 
 
Equity interest percentage
 
 
 
 
 
 
 
100.00% 
Proceeds from disposal of assets
$ 223,451 
$ 0 
$ 948 
 
$ 748,000 
 
 
 
Future cash payments from sale of assets
 
 
 
 
6,500,000 
 
 
 
Fair value of future cash payments
 
 
 
 
 
 
450,000 
 
Loss on disposition of assets
 
 
 
369,000 
 
 
 
 
Remaining note balance
 
 
 
 
 
$ 439,000 
 
 
Concentrations (Details)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Risks and Uncertainties [Abstract]
 
 
Percentage of capacity
12.00% 
15.00% 
Management Agreement (Details) (USD $)
12 Months Ended 3 Months Ended 12 Months Ended
Dec. 31, 2016
Corridor Infra Trust Management [Member]
Dec. 31, 2016
General and Administrative Expense [Member]
Corridor Infra Trust Management [Member]
Dec. 31, 2015
General and Administrative Expense [Member]
Corridor Infra Trust Management [Member]
Dec. 31, 2014
General and Administrative Expense [Member]
Corridor Infra Trust Management [Member]
Jun. 30, 2016
New Management Agreement [Member]
Dec. 31, 2016
New Management Agreement [Member]
Dec. 31, 2015
New Management Agreement [Member]
Dec. 31, 2016
Administrative Agreement [Member]
Management Agreement [Line Items]
 
 
 
 
 
 
 
 
Quarterly management fee percentage
0.25% 
 
 
 
 
 
 
 
Annual management fee percentage
1.00% 
 
 
 
 
 
 
 
Quarterly incentive fee percentage in relation to distribution threshold
10.00% 
 
 
 
 
 
 
 
Distribution threshold (in dollars per share)
$ 0.625 
 
 
 
 
 
 
 
Incentive fees waived
 
 
 
 
 
 
$ 133,000 
 
Incentive Fee
 
 
 
 
54,000 
34,000 
279,000 
 
Payments for other fees
 
 
 
 
149,000 
148,000 
145,000 
 
Management Fee
 
7,200,000 
5,700,000 
3,500,000 
 
 
 
 
Annual rate percentage of managed assets
 
 
 
 
 
 
 
0.04% 
Minimum annual fee
 
 
 
 
 
 
 
30,000 
Administrative Fee
 
$ 266,000 
$ 224,000 
$ 134,000 
 
 
 
 
Fair Value - Assets and Liabilities Measured on a Recurring Basis (Details) (Fair Value, Measurements, Recurring [Member], USD $)
Dec. 31, 2016
Dec. 31, 2015
Assets:
 
 
Other equity securities
$ 9,287,209 
$ 8,393,683 
Total Assets
9,307,159 
8,491,942 
Interest Rate Swap [Member]
 
 
Assets:
 
 
Derivative asset
19,950 
98,259 
Level 1 [Member]
 
 
Assets:
 
 
Other equity securities
Total Assets
Level 1 [Member] |
Interest Rate Swap [Member]
 
 
Assets:
 
 
Derivative asset
Level 2 [Member]
 
 
Assets:
 
 
Other equity securities
Total Assets
19,950 
98,259 
Level 2 [Member] |
Interest Rate Swap [Member]
 
 
Assets:
 
 
Derivative asset
19,950 
98,259 
Level 3 [Member]
 
 
Assets:
 
 
Other equity securities
9,287,209 
8,393,683 
Total Assets
9,287,209 
8,393,683 
Level 3 [Member] |
Interest Rate Swap [Member]
 
 
Assets:
 
 
Derivative asset
$ 0 
$ 0 
Fair Value (Details) (USD $)
12 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2016
Lightfoot Capital Partners LP [Member]
Dec. 31, 2015
Lightfoot Capital Partners LP [Member]
Dec. 31, 2016
Minimum [Member]
Lightfoot Capital Partners LP [Member]
Dec. 31, 2015
Minimum [Member]
Lightfoot Capital Partners LP [Member]
Dec. 31, 2016
Maximum [Member]
Lightfoot Capital Partners LP [Member]
Dec. 31, 2015
Maximum [Member]
Lightfoot Capital Partners LP [Member]
Mar. 30, 2016
Cash Flow Hedging [Member]
Instrument
Dec. 20, 2012
Pinedale Credit Facilities [Member]
Key Bank [Member]
Dec. 31, 2015
Lightfoot Capital Partners LP [Member]
Dec. 31, 2016
Lightfoot Capital Partners LP [Member]
Arc Logistics Partners LP [Member]
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of instruments terminated
 
 
 
 
 
 
 
 
 
 
 
 
Notional amount
 
 
 
 
 
 
 
 
 
$ 26,300,000 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
70,000,000 
 
 
Unrealized gain on other equity securities
$ 43,000 
$ 365,000 
$ 5,000 
 
 
 
 
 
 
 
 
 
 
Discount percentage for lack of marketability
 
 
 
 
 
 
11.80% 
 
15.20% 
 
 
 
 
Discount rate percentage
 
 
 
 
 
14.50% 
14.00% 
16.50% 
16.00% 
 
 
 
 
Equity interest percentage
 
 
 
6.60% 
1.50% 
 
 
 
 
 
 
 
 
Receiving and regasification terminal, volume per day (bcf/d)
 
 
 
 
 
 
 
 
 
 
 
1.5 
1,500,000,000 
Limited partner interest
 
 
 
 
 
 
 
 
 
 
 
 
40.00% 
Fair Value - Changes in Level 3 Securities (Details) (Level 3 [Member], USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
Fair Value Beginning Balance
$ 8,393,683 
$ 9,572,181 
Acquisitions
Disposals
Total Realized and Unrealized Gains/(Losses) Included in Net Income
781,154 
(1,428,243)
Return of Capital Adjustments Impacting Cost Basis of Securities
112,372 
249,745 
Fair Value Ending Balance
9,287,209 
8,393,683 
Changes in Unrealized Losses, Included In Net Income, Relating to Securities Still Held
781,154 
(1,428,243)
Other Equity Securities [Member]
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
Fair Value Beginning Balance
8,393,683 
9,217,181 
Acquisitions
Disposals
Total Realized and Unrealized Gains/(Losses) Included in Net Income
781,154 
(1,073,243)
Return of Capital Adjustments Impacting Cost Basis of Securities
112,372 
249,745 
Fair Value Ending Balance
9,287,209 
8,393,683 
Changes in Unrealized Losses, Included In Net Income, Relating to Securities Still Held
781,154 
(1,073,243)
Warrant Investment [Member]
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
Fair Value Beginning Balance
 
355,000 
Acquisitions
 
Disposals
 
Total Realized and Unrealized Gains/(Losses) Included in Net Income
 
(355,000)
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
 
$ (355,000)
Fair Value - Balance Sheet of Unconsolidated Affiliate (Details) (USD $)
Dec. 31, 2016
Dec. 31, 2015
Assets
 
 
Total Assets
$ 650,732,571 
$ 677,979,621 
Liabilities
 
 
Total Liabilities
216,823,091 
233,785,315 
Reported Value Measurement [Member] |
Unconsolidated Affiliates [Member]
 
 
Assets
 
 
Current assets
20,413 
24,276 
Noncurrent assets
698,745 
696,461 
Total Assets
719,158 
720,737 
Liabilities
 
 
Current liabilities
14,307 
19,993 
Noncurrent liabilities
268,175 
246,808 
Total Liabilities
282,482 
266,801 
Partner's equity
436,676 
453,936 
Total liabilities and partner's equity
$ 719,158 
$ 720,737 
Fair Value - Income Statement of Unconsolidated Affiliate (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total Revenue
$ 22,816,482 
$ 22,115,485 
$ 22,060,752 
$ 22,257,867 
$ 22,478,932 
$ 22,140,450 
$ 12,681,670 
$ 13,987,883 
$ 89,250,586 
$ 71,288,935 
$ 40,308,573 
Other income
(3,333,892)
(1,812,475)
(2,126,978)
(5,179,188)
(3,554,782)
(5,022,101)
(890,093)
(107,066)
(12,452,533)
(9,574,042)
(2,304,365)
Net Income
8,414,737 
9,571,562 
9,265,487 
3,739,622 
4,005,147 
838,025 
4,597,142 
4,496,803 
30,991,408 
13,937,117 
8,570,013 
Less: Net Income attributable to non-controlling interests
(328,370)
(340,377)
(310,960)
(348,501)
(384,221)
(410,806)
(412,004)
(410,175)
(1,328,208)
(1,617,206)
(1,556,157)
Reported Value Measurement [Member] |
Unconsolidated Affiliates [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total Revenue
 
 
 
 
 
 
 
 
105,381 
81,788 
54,906 
Operating expenses
 
 
 
 
 
 
 
 
86,071 
76,774 
62,835 
Income (Loss) from Operations
 
 
 
 
 
 
 
 
19,310 
5,014 
(7,929)
Other income
 
 
 
 
 
 
 
 
9,159 
12,469 
15,517 
Net Income
 
 
 
 
 
 
 
 
28,469 
17,483 
7,588 
Less: Net Income attributable to non-controlling interests
 
 
 
 
 
 
 
 
(18,717)
(8,901)
(761)
Net Income attributable to Partner's Capital
 
 
 
 
 
 
 
 
$ 9,752 
$ 8,582 
$ 6,827 
Fair Value - Carrying and Fair Value Amounts (Details) (USD $)
Dec. 31, 2016
Dec. 31, 2015
Carrying Amount [Member] |
Level 1 [Member]
 
 
Financial Assets:
 
 
Cash and cash equivalents
$ 7,895,084 
$ 14,618,740 
Carrying Amount [Member] |
Level 2 [Member]
 
 
Financial Assets:
 
 
Escrow receivable
1,392,917 
Derivative asset
19,950 
98,259 
Financial Liabilities:
 
 
Long-term debt
89,387,985 
105,440,842 
Unsecured convertible senior notes
111,244,895 
111,423,910 
Carrying Amount [Member] |
Level 3 [Member]
 
 
Financial Assets:
 
 
Financing notes receivable
1,500,000 
7,675,626 
Fair Value [Member] |
Level 1 [Member]
 
 
Financial Assets:
 
 
Cash and cash equivalents
7,895,084 
14,618,740 
Fair Value [Member] |
Level 2 [Member]
 
 
Financial Assets:
 
 
Escrow receivable
1,392,917 
Derivative asset
19,950 
98,259 
Financial Liabilities:
 
 
Long-term debt
89,387,985 
105,440,842 
Unsecured convertible senior notes
129,527,940 
92,575,000 
Fair Value [Member] |
Level 3 [Member]
 
 
Financial Assets:
 
 
Financing notes receivable
$ 1,500,000 
$ 7,675,626 
Credit Facilities - Schedule of Debt (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Jun. 29, 2015
Debt Instrument [Line Items]
 
 
 
Amount Outstanding
$ 203,600,577 
$ 220,732,000 
 
Deferred costs, net of accumulated amortization of $1,240,297 and $633,687
3,132,050 
4,187,271 
 
Total
200,632,880 
216,864,752 
 
Debt due within one year
7,128,556 
66,132,000 
 
7% Unsecured Convertible Senior Notes [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Unamortized discount
2,586,166 
3,356,847 
 
Convertible Debt and Line of Credit [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Deferred costs, net of accumulated amortization of $1,240,297 and $633,687
381,531 
510,401 
 
Convertible Debt [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Deferred costs, net of accumulated amortization of $1,240,297 and $633,687
241,000 
 
 
Unamortized discount
3,700,000 
 
 
Convertible Debt [Member] |
7% Unsecured Convertible Senior Notes [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total Commitment or Original Principal
115,000,000 
 
115,000,000 
Quarterly Principal Payments
 
 
Amount Outstanding
114,000,000 
115,000,000 
 
Interest Rate
7.00% 
7.00% 
7.00% 
Line of Credit [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total
89,600,577 
 
 
Line of Credit [Member] |
Revolving Credit Facility [Member] |
CorEnergy Revolver [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total Commitment or Original Principal
105,000,000 
 
 
Quarterly Principal Payments
 
 
Amount Outstanding
44,000,000 
 
Interest Rate
3.76% 
3.07% 
 
Total
44,000,000 
 
 
Line of Credit [Member] |
Revolving Credit Facility [Member] |
MoGas Revolver [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total Commitment or Original Principal
3,000,000 
 
 
Quarterly Principal Payments
 
 
Amount Outstanding
 
Interest Rate
3.77% 
3.07% 
 
Line of Credit [Member] |
Revolving Credit Facility [Member] |
Omega Line of Credit [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total Commitment or Original Principal
1,500,000 
 
 
Quarterly Principal Payments
 
 
Amount Outstanding
 
Interest Rate
4.77% 
4.43% 
 
Line of Credit [Member] |
Term Loan [Member] |
CorEnergy Term Loan [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total Commitment or Original Principal
45,000,000 
 
 
Quarterly Principal Payments
1,615,000 
 
 
Amount Outstanding
36,740,000 
43,200,000 
 
Interest Rate
3.74% 
3.07% 
 
Total
36,740,000 
 
 
Line of Credit [Member] |
Term Loan [Member] |
$70M Term Loan [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total Commitment or Original Principal
70,000,000 
 
 
Quarterly Principal Payments
 
 
Amount Outstanding
62,532,000 
 
Interest Rate
0.00% 
4.67% 
 
Line of Credit [Member] |
Term Loan [Member] |
$58.5M Term Loan [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total Commitment or Original Principal
58,500,000.0 
 
 
Term loan payable to CorEnergy
47,414,250 
 
 
Line of Credit [Member] |
Term Loan [Member] |
$58.5M Term Loan - Related Party, Less Amount Payable to CorEnergy [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total Commitment or Original Principal
11,085,750 
 
 
Quarterly Principal Payments
167,139 
 
 
Amount Outstanding
$ 8,860,577 
$ 0 
 
Interest Rate
8.00% 
0.00% 
 
Credit Facilities - Deferred Financing Costs (Details) (USD $)
Dec. 31, 2016
Dec. 31, 2015
Debt Instrument [Line Items]
 
 
Deferred debt financing costs, net
$ 3,132,050 
$ 4,187,271 
Deferred Costs, Assets [Member] |
Line of Credit [Member]
 
 
Debt Instrument [Line Items]
 
 
Deferred debt financing costs, net
2,168,518 
3,131,806 
Deferred Costs, Assets [Member] |
Line of Credit [Member] |
CorEnergy Credit Facility [Member]
 
 
Debt Instrument [Line Items]
 
 
Deferred debt financing costs, net
2,168,518 
2,975,476 
Deferred Costs, Assets [Member] |
Line of Credit [Member] |
Pinedale Credit Facility [Member]
 
 
Debt Instrument [Line Items]
 
 
Deferred debt financing costs, net
$ 0 
$ 156,330 
Credit Facilities - Amortization of Deferred Financing Costs (Details) (Interest Expense [Member], Line of Credit [Member], USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Debt Instrument [Line Items]
 
 
 
Total Deferred Debt Cost Amortization
$ 1,234,856 
$ 1,427,256 
$ 801,573 
CorEnergy Credit Facility [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total Deferred Debt Cost Amortization
1,078,526 
926,930 
284,709 
Pinedale Credit Facility [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Total Deferred Debt Cost Amortization
$ 156,330 
$ 500,326 
$ 516,864 
Credit Facilities - Long Term Debt Maturities (Details) (USD $)
Dec. 31, 2016
Dec. 31, 2015
Debt Instrument [Line Items]
 
 
Total
$ 200,632,880 
$ 216,864,752 
Line of Credit [Member]
 
 
Debt Instrument [Line Items]
 
 
2017
7,128,556 
 
2018
7,128,556 
 
2019
68,488,556 
 
2020
668,556 
 
2021
6,186,353 
 
Total
89,600,577 
 
Line of Credit [Member] |
Revolving Credit Facility [Member] |
CorEnergy Revolver [Member]
 
 
Debt Instrument [Line Items]
 
 
2017
 
2018
 
2019
44,000,000 
 
2020
 
2021
 
Total
44,000,000 
 
Line of Credit [Member] |
Revolving Credit Facility [Member] |
Pinedale Credit Facility [Member]
 
 
Debt Instrument [Line Items]
 
 
2017
668,556 
 
2018
668,556 
 
2019
668,556 
 
2020
668,556 
 
2021
6,186,353 
 
Total
8,860,577 
 
Line of Credit [Member] |
Term Loan [Member] |
CorEnergy Term Loan [Member]
 
 
Debt Instrument [Line Items]
 
 
2017
6,460,000 
 
2018
6,460,000 
 
2019
23,820,000 
 
2020
 
2021
 
Total
$ 36,740,000 
 
Credit Facilities - CorEnergy Credit Facilities (Details) (USD $)
0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended
May 8, 2013
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2014
Line of Credit [Member]
Nov. 24, 2014
Regions [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
Regions [Member]
Revolving Credit Facility [Member]
May 8, 2013
Key Bank [Member]
Line of Credit [Member]
May 8, 2013
Key Bank [Member]
Line of Credit [Member]
Nov. 24, 2014
Subsidiaries [Member]
Regions [Member]
Revolving Credit Facility [Member]
Dec. 31, 2016
Parent Company [Member]
Dec. 31, 2015
Parent Company [Member]
Dec. 31, 2014
Parent Company [Member]
Nov. 24, 2014
LIBOR [Member]
May 8, 2013
LIBOR [Member]
Key Bank [Member]
Line of Credit [Member]
May 8, 2013
Prime Rate [Member]
Key Bank [Member]
Line of Credit [Member]
Nov. 24, 2014
Minimum [Member]
LIBOR [Member]
Nov. 24, 2014
Maximum [Member]
LIBOR [Member]
Jul. 8, 2015
Line of Credit [Member]
Jun. 29, 2015
Line of Credit [Member]
Revolving Credit Facility [Member]
Dec. 31, 2016
Line of Credit [Member]
Revolving Credit Facility [Member]
Dec. 31, 2015
Line of Credit [Member]
Revolving Credit Facility [Member]
Jul. 8, 2015
Line of Credit [Member]
Revolving Credit Facility [Member]
Jul. 8, 2015
Line of Credit [Member]
Subsidiaries [Member]
Term Loan [Member]
Jul. 8, 2015
Line of Credit [Member]
Parent Company [Member]
Term Loan [Member]
Jul. 8, 2015
Line of Credit [Member]
Minimum [Member]
LIBOR [Member]
Revolving Credit Facility [Member]
Jul. 8, 2015
Line of Credit [Member]
Maximum [Member]
LIBOR [Member]
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
$ 90,000,000 
$ 30,000,000 
 
$ 20,000,000 
$ 3,000,000 
 
 
 
 
 
 
 
 
$ 153,000,000 
 
$ 93,000,000 
 
$ 105,000,000 
$ 3,000,000 
$ 45,000,000 
 
 
Basis spread on variable rate
 
 
 
 
2.00% 
 
 
 
 
 
 
 
 
3.50% 
4.00% 
2.75% 
2.75% 
3.50% 
 
 
 
 
 
 
 
2.75% 
3.75% 
Borrowed against the revolver
 
44,000,000 
45,392,332 
34,676,948 
4,000,000 
 
 
 
 
 
44,000,000 
42,000,000 
32,000,000 
 
 
 
 
 
 
42,000,000 
 
 
 
 
 
 
 
Monthly principal periodic payment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,600,000 
$ 900,000 
 
 
 
 
 
Covenant terms
P3Y 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Extension period
 
 
 
 
 
 
 
1 year 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit Facilities (Details) (USD $)
0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 0 Months Ended 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Mar. 30, 2016
Key Bank [Member]
Secured Debt [Member]
Dec. 31, 2016
Key Bank [Member]
Secured Debt [Member]
Feb. 28, 2013
Key Bank [Member]
Secured Debt [Member]
Dec. 20, 2012
Key Bank [Member]
Secured Debt [Member]
Mar. 7, 2014
Key Bank [Member]
Secured Debt [Member]
Pinedale Liquids Gathering System [Member]
Mar. 7, 2014
Key Bank [Member]
Secured Debt [Member]
Pinedale Liquids Gathering System [Member]
Nov. 24, 2014
Regions [Member]
Revolving Credit Facility [Member]
Sep. 26, 2014
Regions [Member]
Revolving Credit Facility [Member]
Nov. 24, 2014
LIBOR [Member]
Dec. 20, 2012
LIBOR [Member]
Key Bank [Member]
Secured Debt [Member]
Dec. 31, 2016
LIBOR [Member]
Key Bank [Member]
Secured Debt [Member]
Nov. 24, 2014
Maximum [Member]
LIBOR [Member]
Mar. 30, 2016
Maximum [Member]
LIBOR [Member]
Key Bank [Member]
Secured Debt [Member]
Jul. 8, 2015
Line of Credit [Member]
Dec. 31, 2016
Line of Credit [Member]
Revolving Credit Facility [Member]
Dec. 31, 2015
Line of Credit [Member]
Revolving Credit Facility [Member]
Jul. 8, 2015
Line of Credit [Member]
Revolving Credit Facility [Member]
Jul. 31, 2015
Line of Credit [Member]
Revolving Credit Facility [Member]
Mowood/Omega Revolver [Member]
Jul. 31, 2015
Line of Credit [Member]
Revolving Credit Facility [Member]
Mowood/Omega Revolver [Member]
Jul. 8, 2015
Line of Credit [Member]
Maximum [Member]
LIBOR [Member]
Revolving Credit Facility [Member]
Mar. 30, 2016
Pinedale Liquids Gathering System [Member]
Mar. 30, 2016
Pinedale Liquids Gathering System [Member]
Dec. 31, 2016
Pinedale Liquids Gathering System [Member]
Key Bank [Member]
Secured Debt [Member]
Mar. 30, 2016
Pinedale Liquids Gathering System [Member]
Key Bank [Member]
Secured Debt [Member]
Mar. 30, 2016
Cash Flow Hedging [Member]
Instrument
Mar. 31, 2016
Interest Rate Swap [Member]
Instrument
Mar. 30, 2016
Interest Rate Swap [Member]
Cash Flow Hedging [Member]
Instrument
Nov. 24, 2014
Mogas [Member]
Regions [Member]
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
$ 70,000,000 
$ 70,000,000 
 
 
$ 90,000,000 
$ 30,000,000 
 
 
 
 
 
$ 153,000,000 
$ 93,000,000 
 
$ 105,000,000 
 
$ 1,500,000.0 
 
 
 
 
 
 
 
 
$ 3,000,000.0 
Basis spread on variable rate
 
 
1.00% 
 
 
 
 
 
 
 
3.50% 
3.25% 
4.25% 
3.50% 
7.00% 
 
 
 
 
4.00% 
 
3.75% 
 
 
 
 
 
 
 
 
Monthly principal periodic payment
 
 
 
 
 
 
294,000 
 
 
 
 
 
 
 
 
 
1,600,000 
900,000 
 
 
 
 
 
 
 
 
 
 
 
 
Required principle payment as percentage of outstanding amount, beginning in year two
 
 
 
 
 
 
 
0.42% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal payments made through extension period
 
 
 
3,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured credit facilities, net
89,387,985 
105,440,842 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
58,500,000 
 
 
 
 
Non controlling economic interest pinedale GP
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
81.05% 
 
 
 
 
 
 
 
Value of economic interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
47,400,000 
 
 
 
 
 
 
Number of instruments terminated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flow hedge terminated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
26,300,000 
26,300,000 
 
Cash sweep provision distribution
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,100,000 
 
 
 
 
 
Total Assets
$ 650,732,571 
$ 677,979,621 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 144,300,000 
 
 
 
 
 
Convertible Debt - Additional Information (Details) (USD $)
0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 0 Months Ended
May 23, 2016
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2016
Convertible Senior Notes Due 2020 [Member]
Dec. 31, 2015
Convertible Senior Notes Due 2020 [Member]
May 23, 2016
Convertible Debt [Member]
Dec. 31, 2016
Convertible Debt [Member]
Dec. 31, 2015
Convertible Debt [Member]
Jun. 29, 2015
Convertible Debt [Member]
Convertible Senior Notes Due 2020 [Member]
Dec. 31, 2016
Convertible Debt [Member]
Convertible Senior Notes Due 2020 [Member]
Dec. 31, 2015
Convertible Debt [Member]
Convertible Senior Notes Due 2020 [Member]
Jun. 29, 2015
Convertible Debt [Member]
Convertible Senior Notes Due 2020 [Member]
Jun. 29, 2015
Common Stock [Member]
Convertible Debt [Member]
Convertible Senior Notes Due 2020 [Member]
Jun. 29, 2015
Common Stock [Member]
Convertible Debt [Member]
Convertible Senior Notes Due 2020 [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Face amount
 
 
 
 
 
 
 
 
 
 
$ 115,000,000 
 
$ 115,000,000 
 
 
Interest Rate
 
 
 
 
 
 
 
 
 
 
7.00% 
7.00% 
7.00% 
 
 
Interest expense
 
 
 
 
 
 
 
8,800,842 
4,472,031 
 
8,008,195 
4,069,722 
 
 
 
Shares issued (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
30.3030 
 
Principal amount
 
 
 
 
 
 
 
 
 
1,000 
 
 
 
 
 
Conversion price (in dollars per share)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 33.0 
Percentage of principal amount redeemed
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
Amount of underwriter's discount
 
 
 
 
2,586,166 
3,356,847 
 
3,700,000 
 
 
 
 
 
 
 
Deferred debt financing costs, net
 
3,132,050 
4,187,271 
 
 
 
 
241,000 
 
 
 
 
 
 
 
Effective percentage
 
 
 
 
 
 
 
7.70% 
7.70% 
 
 
 
 
 
 
Repurchases of convertible debt
1,000,000 
899,960 
 
 
 
 
 
 
 
 
 
 
 
Gain on extinguishment of debt
 
 
 
 
 
 
$ 72,000 
 
 
 
 
 
 
 
 
Convertible Debt (Details) (Convertible Debt [Member], USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Jun. 29, 2015
Debt Instrument [Line Items]
 
 
 
Interest expense
$ 8,800,842 
$ 4,472,031 
 
Discount amortization
744,081 
380,653 
 
Deferred debt issuance amortization
48,566 
21,656 
 
Convertible Senior Notes Due 2020 [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Interest expense
$ 8,008,195 
$ 4,069,722 
 
Interest Rate
7.00% 
7.00% 
7.00% 
Asset Retirement Obligation (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
 
 
Beginning asset retirement obligation
$ 12,839,042 
$ 0 
Liabilities assumed
12,500,000 
ARO accretion expense
726,664 
339,042 
Revision in cash flow estimates
(1,682,763)
Ending asset retirement obligation
$ 11,882,943 
$ 12,839,042 
Interest Rate Hedge Swaps - Additional Information (Details) (USD $)
Mar. 31, 2016
Interest Rate Swap [Member]
Instrument
Feb. 28, 2013
Interest Rate Swap [Member]
Instrument
Feb. 28, 2013
Secured Debt [Member]
Key Bank [Member]
Dec. 20, 2012
Secured Debt [Member]
Key Bank [Member]
Derivative [Line Items]
 
 
 
 
Number of derivative agreements
 
 
 
Maximum borrowing capacity
 
 
$ 70,000,000 
$ 70,000,000 
Notional amount
26,300,000 
52,500,000 
 
 
Fixed interest rate
 
0.865% 
 
 
Number of instruments terminated
 
 
 
Notional amount terminated
$ 26,300,000 
 
 
 
Interest Rate Hedge Swaps (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Designated as Hedging Instrument [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Amount of (Loss) Gain on Derivatives Recognized in AOCI (Effective Portion)
$ (300,181)
$ (611,879)
$ (705,826)
Amount of Loss on Derivatives Reclassified from AOCI (Effective Portion) Recognized in Net Income
(50,964)
(287,999)
(305,945)
Not Designated as Hedging Instrument [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Amount of (Loss) Gain on Derivatives Recognized in AOCI (Effective Portion)
$ 73,204 
$ 0 
$ 0 
Stockholder's Equity (Details) (USD $)
0 Months Ended 12 Months Ended
Jan. 27, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Feb. 18, 2016
Class of Stock [Line Items]
 
 
 
 
 
Preferred stock, authorized (in shares)
 
10,000,000 
 
 
 
Preferred stock, par value (in dollars per share)
 
$ 0.001 
 
 
 
Net offering proceeds
$ 54,200,000 
 
 
 
 
Repurchase of common stock
 
2,041,851 
 
 
 
Shares of common stock offered (in shares)
 
11,886,216 
11,939,697 
 
 
Aggregate offering price of shelf registration
 
 
 
 
600,000,000 
Reinvestment of dividends paid to common stockholders
 
815,889 
817,915 
140,108 
 
CORRPrA [Member]
 
 
 
 
 
Class of Stock [Line Items]
 
 
 
 
 
Preferred stock, par value (in dollars per share)
 
$ 22.50 
 
 
 
Series A Cumulative Redeemable Preferred Stock [Member]
 
 
 
 
 
Class of Stock [Line Items]
 
 
 
 
 
Preferred stock, authorized (in shares)
 
10,000,000 
10,000,000 
 
 
Preferred stock, par value (in dollars per share)
 
$ 0.001 
$ 0.001 
 
 
Preferred stock, issued (in shares)
22,500 
22,500 
22,500 
 
 
Preferred stock, liquidation preference (in dollars per share)
 
$ 2,500 
$ 2,500 
 
 
Depositary Shares [Member]
 
 
 
 
 
Class of Stock [Line Items]
 
 
 
 
 
Percent equivalent of preferred shares
 
1.00% 
 
 
 
Annual dividend, per share (in dollars per share)
$ 1.84375 
 
 
 
 
Preferred Stock [Member] |
Series A Cumulative Redeemable Preferred Stock [Member]
 
 
 
 
 
Class of Stock [Line Items]
 
 
 
 
 
Coupon rate percentage
7.375% 
7.375% 
 
 
 
Common Stock [Member]
 
 
 
 
 
Class of Stock [Line Items]
 
 
 
 
 
Shares sold in offering (in shares)
 
 
2,587,500 
4,485,000 
 
Authorized amount of shares to be repurchased
 
 
10,000,000 
 
 
Repurchase of common stock (in shares)
 
90,613 
 
 
 
Repurchase of common stock
 
91 
 
 
 
Reinvestment of distributions to stockholders (in shares)
 
34,581 
28,510 
3,973 
 
Reinvestment of dividends paid to common stockholders
 
35 
29 
 
Warrants [Member]
 
 
 
 
 
Class of Stock [Line Items]
 
 
 
 
 
Shares sold in offering (in shares)
 
945,594 
 
 
 
Right to purchase one share of common stock (in dollars per share)
 
$ 11.41 
 
 
 
Underwritten Public Offering [Member] |
Depositary Shares [Member]
 
 
 
 
 
Class of Stock [Line Items]
 
 
 
 
 
Shares sold in offering (in shares)
2,250,000 
 
 
 
 
Dividend Reinvestment Plan [Member]
 
 
 
 
 
Class of Stock [Line Items]
 
 
 
 
 
Reinvestment of distributions to stockholders (in shares)
 
34,581 
 
 
 
Reinvestment of dividends paid to common stockholders
 
816,000 
 
 
 
Shelf registration after dividend reinvestment plan reduction
 
$ 599,200,000 
 
 
 
Earnings Per Share (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2016
Convertible Debt [Member]
Convertible Senior Notes Due 2020 [Member]
Dec. 31, 2015
Convertible Debt [Member]
Convertible Senior Notes Due 2020 [Member]
Jun. 29, 2015
Convertible Debt [Member]
Convertible Senior Notes Due 2020 [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument coupon rate
 
 
 
 
 
 
 
 
 
 
 
7.00% 
7.00% 
7.00% 
Net income attributable to CorEnergy stockholders
$ 8,086,367 
$ 9,231,185 
$ 8,954,527 
$ 3,391,121 
$ 3,620,926 
$ 427,219 
$ 4,185,138 
$ 4,086,628 
$ 29,663,200 
$ 12,319,911 
$ 7,013,856 
 
 
 
Less: preferred dividend requirements
1,037,110 
1,037,109 
1,037,109 
1,037,109 
1,037,110 
1,037,109 
1,037,109 
737,500 
4,148,437 
3,848,828 
 
 
 
Net Income attributable to Common Stockholders
7,049,257 
8,194,076 
7,917,418 
2,354,012 
2,583,816 
(609,890)
3,148,029 
3,349,128 
25,514,763 
8,471,083 
7,013,856 
 
 
 
Weighted average shares - basic (in shares)
 
 
 
 
 
 
 
 
11,901,985 
10,685,892 
6,605,715 
 
 
 
Basic earnings per share (in dollars per share)
$ 0.59 
$ 0.69 
$ 0.66 
$ 0.20 
$ 0.22 
$ (0.05)
$ 0.33 
$ 0.36 
$ 2.14 
$ 0.79 
$ 1.06 
 
 
 
Add: After tax effect of convertible interest
 
 
 
 
 
 
 
 
 
 
 
Income attributable for dilutive securities
 
 
 
 
 
 
 
 
$ 25,514,763 
$ 8,471,083 
$ 7,013,856 
 
 
 
Weighted average shares - diluted (in shares)
 
 
 
 
 
 
 
 
11,901,985 
10,685,892 
6,605,715 
 
 
 
Diluted earnings per share (in dollars per share)
$ 0.59 
$ 0.68 
$ 0.66 
$ 0.20 
$ 0.22 
$ (0.05)
$ 0.33 
$ 0.36 
$ 2.14 
$ 0.79 
$ 1.06 
 
 
 
Quarterly Financial Data (Unaudited) (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Revenue
 
 
 
 
 
 
 
 
 
 
 
Lease revenue
$ 17,005,831 
$ 16,996,155 
$ 16,996,072 
$ 16,996,072 
$ 16,984,036 
$ 16,966,056 
$ 6,799,879 
$ 7,336,101 
$ 67,994,130 
$ 48,086,072 
$ 28,223,765 
Transportation and distribution revenue
5,810,651 
5,119,330 
5,064,680 
5,099,451 
3,591,459 
3,557,096 
3,546,979 
3,649,735 
21,094,112 
14,345,269 
1,298,093 
Financing revenue
162,344 
185,650 
182,604 
668,904 
660,392 
162,344 
1,697,550 
1,077,813 
Sales revenue
 
 
 
 
1,717,787 
1,434,694 
1,665,908 
2,341,655 
7,160,044 
9,708,902 
Total Revenue
22,816,482 
22,115,485 
22,060,752 
22,257,867 
22,478,932 
22,140,450 
12,681,670 
13,987,883 
89,250,586 
71,288,935 
40,308,573 
Expenses
 
 
 
 
 
 
 
 
 
 
 
Transportation and distribution expenses
2,240,556 
1,482,161 
1,378,306 
1,362,325 
1,018,870 
1,120,862 
1,272,025 
1,197,968 
6,463,348 
4,609,725 
1,299,782 
Cost of sales
 
 
 
 
618,073 
382,851 
569,958 
1,248,330 
2,819,212 
7,291,968 
General and administrative
3,185,419 
3,021,869 
2,773,240 
3,289,852 
2,434,094 
2,837,762 
1,905,329 
2,568,519 
12,270,380 
9,745,704 
7,872,753 
Depreciation, amortization and ARO accretion expense
5,744,762 
5,744,266 
5,737,025 
5,296,818 
5,385,068 
5,836,665 
3,495,986 
4,048,832 
22,522,871 
18,766,551 
13,195,255 
Provision for loan loss and disposition
369,278 
4,645,188 
5,833,000 
7,951,137 
5,014,466 
13,800,000 
Total Expenses
11,170,737 
10,248,296 
10,257,849 
14,594,183 
15,289,105 
18,129,277 
7,243,298 
9,063,649 
46,271,065 
49,725,329 
29,659,758 
Operating Income
11,645,745 
11,867,189 
11,802,903 
7,663,684 
7,189,827 
4,011,173 
5,438,372 
4,924,234 
42,979,521 
21,563,606 
10,648,815 
Other Income (Expense)
 
 
 
 
 
 
 
 
 
 
 
Net distributions and dividend income
273,559 
277,523 
214,169 
375,573 
245,374 
241,563 
193,410 
590,408 
1,140,824 
1,270,755 
1,836,783 
Net realized and unrealized gain (loss) on other equity securities
(177,289)
1,430,858 
1,199,665 
(1,628,752)
(148,045)
(1,408,751)
43,385 
449,798 
 
 
 
Interest expense
(3,430,162)
(3,520,856)
(3,540,812)
(3,926,009)
(3,652,111)
(3,854,913)
(1,126,888)
(1,147,272)
(14,417,839)
(9,781,184)
(3,675,122)
Total Other Expense
(3,333,892)
(1,812,475)
(2,126,978)
(5,179,188)
(3,554,782)
(5,022,101)
(890,093)
(107,066)
(12,452,533)
(9,574,042)
(2,304,365)
Income before income taxes
8,311,853 
10,054,714 
9,675,925 
2,484,496 
3,635,045 
(1,010,928)
4,548,279 
4,817,168 
30,526,988 
11,989,564 
8,344,450 
Taxes
 
 
 
 
 
 
 
 
 
 
 
Current tax expense (benefit)
65,847 
95,125 
203,652 
(677,731)
276,755 
105,020 
104,479 
435,756 
(313,107)
922,010 
3,843,937 
Deferred tax benefit
(168,731)
388,027 
206,786 
(577,395)
(646,857)
(1,953,973)
(153,342)
(115,391)
(151,313)
(2,869,563)
(4,069,500)
Income tax benefit, net
(102,884)
483,152 
410,438 
(1,255,126)
(370,102)
(1,848,953)
(48,863)
320,365 
(464,420)
(1,947,553)
(225,563)
Net Income
8,414,737 
9,571,562 
9,265,487 
3,739,622 
4,005,147 
838,025 
4,597,142 
4,496,803 
30,991,408 
13,937,117 
8,570,013 
Less: Net Income attributable to non-controlling interest
328,370 
340,377 
310,960 
348,501 
384,221 
410,806 
412,004 
410,175 
1,328,208 
1,617,206 
1,556,157 
Net Income attributable to CorEnergy Stockholders
8,086,367 
9,231,185 
8,954,527 
3,391,121 
3,620,926 
427,219 
4,185,138 
4,086,628 
29,663,200 
12,319,911 
7,013,856 
Preferred dividend requirements
1,037,110 
1,037,109 
1,037,109 
1,037,109 
1,037,110 
1,037,109 
1,037,109 
737,500 
4,148,437 
3,848,828 
Net Income attributable to Common Stockholders
$ 7,049,257 
$ 8,194,076 
$ 7,917,418 
$ 2,354,012 
$ 2,583,816 
$ (609,890)
$ 3,148,029 
$ 3,349,128 
$ 25,514,763 
$ 8,471,083 
$ 7,013,856 
Earnings Per Common Share:
 
 
 
 
 
 
 
 
 
 
 
Basic (in dollars per share)
$ 0.59 
$ 0.69 
$ 0.66 
$ 0.20 
$ 0.22 
$ (0.05)
$ 0.33 
$ 0.36 
$ 2.14 
$ 0.79 
$ 1.06 
Diluted (in dollars per share)
$ 0.59 
$ 0.68 
$ 0.66 
$ 0.20 
$ 0.22 
$ (0.05)
$ 0.33 
$ 0.36 
$ 2.14 
$ 0.79 
$ 1.06 
Subsequent Events (Details)
12 Months Ended 0 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Jan. 25, 2017
Common Stock [Member]
Subsequent Event [Member]
Jan. 25, 2017
Series A Cumulative Redeemable Preferred Stock [Member]
Depositary Shares [Member]
Subsequent Event [Member]
Dec. 31, 2016
Series A Cumulative Redeemable Preferred Stock [Member]
Preferred Stock [Member]
Jan. 27, 2015
Series A Cumulative Redeemable Preferred Stock [Member]
Preferred Stock [Member]
Dec. 31, 2016
Laclede Gas [Member]
Nov. 1, 2018
Forecast [Member]
Laclede Gas [Member]
Subsequent Event [Line Items]
 
 
 
 
 
 
 
 
 
Dividends declared per share (in dollars per share)
$ 3 
$ 2.75 
$ 2.57 
$ 0.750 
 
 
 
 
 
Depositary stock, dividends declared per share (in dollars per share)
 
 
 
 
$ 0.4609375 
 
 
 
 
Coupon rate percentage
 
 
 
 
 
7.375% 
7.375% 
 
 
Tariff rate (in dollars per MMBtu)
 
 
 
 
 
 
 
12.385 
6.386 
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Balance Sheet (Details) (USD $)
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Assets
 
 
 
 
Leased property, net of accumulated depreciation of $743,458 and $559,078
$ 489,258,369 
$ 509,226,215 
 
 
Investments
9,287,209 
8,393,683 
 
 
Cash and cash equivalents
7,895,084 
14,618,740 
7,578,164 
17,963,266 
Deferred costs, net of accumulated amortization of $1,240,297 and $633,687
3,132,050 
4,187,271 
 
 
Prepaid expenses and other assets
354,230 
491,024 
 
 
Total Assets
650,732,571 
677,979,621 
 
 
Liabilities and Equity
 
 
 
 
Secured credit facilities, net
89,387,985 
105,440,842 
 
 
Unsecured convertible senior notes, net of discount and debt issuance costs of $2,755,105 and $3,576,090
111,244,895 
111,423,910 
 
 
Accounts payable and other accrued liabilities
2,416,283 
2,317,774 
 
 
Management fees payable
1,735,024 
1,763,747 
 
 
Total Liabilities
216,823,091 
233,785,315 
 
 
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 issued and outstanding at December 31, 2016, and December 31, 2015
56,250,000 
56,250,000 
 
 
Capital stock, non-convertible, $0.001 par value; 11,886,216 and 11,939,697 shares issued and outstanding at December 31, 2016, and December 31, 2015 (100,000,000 shares authorized)
11,886 
11,940 
 
 
Additional paid-in capital
350,217,746 
361,581,507 
 
 
Accumulated other comprehensive income (loss)
(11,196)
190,797 
 
 
Total CorEnergy Equity
406,468,436 
418,034,244 
 
 
Total Liabilities and Equity
650,732,571 
677,979,621 
 
 
Parent Company [Member]
 
 
 
 
Assets
 
 
 
 
Leased property, net of accumulated depreciation of $743,458 and $559,078
4,050,198 
4,234,578 
 
 
Investments
451,603,448 
458,088,998 
 
 
Cash and cash equivalents
5,933,481 
10,089,436 
3,599,935 
16,649,618 
Due from subsidiary
9,770,878 
8,317,719 
 
 
Note receivable from subsidiary
128,244,591 
92,730,000 
 
 
Deferred costs, net of accumulated amortization of $1,240,297 and $633,687
1,548,255 
2,003,575 
 
 
Prepaid expenses and other assets
173,774 
116,475 
 
 
Income tax receivable
4,394 
4,394 
 
 
Total Assets
601,329,019 
575,585,175 
 
 
Liabilities and Equity
 
 
 
 
Secured credit facilities, net
80,527,408 
42,908,842 
 
 
Unsecured convertible senior notes, net of discount and debt issuance costs of $2,755,105 and $3,576,090
111,244,895 
111,423,910 
 
 
Accounts payable and other accrued liabilities
1,199,616 
1,300,792 
 
 
Management fees payable
1,735,024 
1,763,747 
 
 
Due to affiliate
153,640 
153,640 
 
 
Total Liabilities
194,860,583 
157,550,931 
 
 
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 issued and outstanding at December 31, 2016, and December 31, 2015
56,250,000 
56,250,000 
 
 
Capital stock, non-convertible, $0.001 par value; 11,886,216 and 11,939,697 shares issued and outstanding at December 31, 2016, and December 31, 2015 (100,000,000 shares authorized)
11,886 
11,940 
 
 
Additional paid-in capital
350,217,746 
361,581,507 
 
 
Accumulated other comprehensive income (loss)
(11,196)
190,797 
 
 
Total CorEnergy Equity
406,468,436 
418,034,244 
 
 
Total Liabilities and Equity
$ 601,329,019 
$ 575,585,175 
 
 
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Balance Sheet Parenthetical (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Jan. 27, 2015
Condensed Balance Sheet Statements, Captions [Line Items]
 
 
 
Accumulated depreciation, leased property
$ 52,219,717 
$ 33,869,263 
 
Accumulated amortization, Deferred costs
2,261,151 
2,717,609 
 
Preferred stock, par value (in dollars per share)
$ 0.001 
 
 
Preferred Stock, Shares Authorized
10,000,000 
 
 
Capital stock non-convertible, par value (in dollars per share)
$ 0.001 
$ 0.001 
 
Capital stock non-convertible, shares issued (in shares)
11,886,216 
11,939,697 
 
Capital stock non-convertible, shares outstanding
11,886,216 
11,939,697 
 
Capital stock non-convertible, shares authorized
100,000,000 
100,000,000 
 
Convertible Debt [Member]
 
 
 
Condensed Balance Sheet Statements, Captions [Line Items]
 
 
 
Discount and debt issuance costs
2,755,105 
3,576,090 
 
Series A Cumulative Redeemable Preferred Stock [Member]
 
 
 
Condensed Balance Sheet Statements, Captions [Line Items]
 
 
 
Preferred stock interest rate
7.375% 
7.375% 
 
Preferred Stock, Liquidation Preference
56,250,000 
56,250,000 
 
Preferred Stock, Liquidation Preference (in dollars per share)
$ 2,500 
$ 2,500 
 
Preferred stock, par value (in dollars per share)
$ 0.001 
$ 0.001 
 
Preferred Stock, Shares Authorized
10,000,000 
10,000,000 
 
Preferred Stock, Shares Issued
22,500 
22,500 
22,500 
Preferred Stock, Shares Outstanding
22,500 
22,500 
 
Parent Company [Member]
 
 
 
Condensed Balance Sheet Statements, Captions [Line Items]
 
 
 
Accumulated depreciation, leased property
743,458 
559,078 
 
Accumulated amortization, Deferred costs
1,240,297 
633,687 
 
Preferred Stock, Liquidation Preference
56,250,000 
56,250,000 
 
Preferred Stock, Liquidation Preference (in dollars per share)
$ 2,500 
$ 2,500 
 
Preferred stock, par value (in dollars per share)
$ 0.001 
$ 0.001 
 
Preferred Stock, Shares Authorized
10,000,000 
10,000,000 
 
Preferred Stock, Shares Issued
22,500 
22,500 
 
Preferred Stock, Shares Outstanding
22,500 
22,500 
 
Capital stock non-convertible, par value (in dollars per share)
$ 0.001 
$ 0.001 
 
Capital stock non-convertible, shares issued (in shares)
11,886,216 
11,939,697 
 
Capital stock non-convertible, shares outstanding
11,886,216 
11,939,697 
 
Capital stock non-convertible, shares authorized
100,000,000 
100,000,000 
 
Parent Company [Member] |
Convertible Debt [Member]
 
 
 
Condensed Balance Sheet Statements, Captions [Line Items]
 
 
 
Discount and debt issuance costs
$ 2,755,105 
$ 3,576,090 
 
Parent Company [Member] |
Series A Cumulative Redeemable Preferred Stock [Member]
 
 
 
Condensed Balance Sheet Statements, Captions [Line Items]
 
 
 
Preferred stock interest rate
7.375% 
 
 
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Income and Comprehensive Income (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Condensed Income Statements, Captions [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Lease revenue
$ 17,005,831 
$ 16,996,155 
$ 16,996,072 
$ 16,996,072 
$ 16,984,036 
$ 16,966,056 
$ 6,799,879 
$ 7,336,101 
$ 67,994,130 
$ 48,086,072 
$ 28,223,765 
Total Revenue
22,816,482 
22,115,485 
22,060,752 
22,257,867 
22,478,932 
22,140,450 
12,681,670 
13,987,883 
89,250,586 
71,288,935 
40,308,573 
General and administrative
3,185,419 
3,021,869 
2,773,240 
3,289,852 
2,434,094 
2,837,762 
1,905,329 
2,568,519 
12,270,380 
9,745,704 
7,872,753 
Depreciation expense
 
 
 
 
 
 
 
 
3,353,821 
3,329,063 
592,514 
Total Expenses
11,170,737 
10,248,296 
10,257,849 
14,594,183 
15,289,105 
18,129,277 
7,243,298 
9,063,649 
46,271,065 
49,725,329 
29,659,758 
Operating Income
11,645,745 
11,867,189 
11,802,903 
7,663,684 
7,189,827 
4,011,173 
5,438,372 
4,924,234 
42,979,521 
21,563,606 
10,648,815 
Net distributions and dividend income
273,559 
277,523 
214,169 
375,573 
245,374 
241,563 
193,410 
590,408 
1,140,824 
1,270,755 
1,836,783 
Total Other Expense
(3,333,892)
(1,812,475)
(2,126,978)
(5,179,188)
(3,554,782)
(5,022,101)
(890,093)
(107,066)
(12,452,533)
(9,574,042)
(2,304,365)
Net Income attributable to CorEnergy Stockholders
8,086,367 
9,231,185 
8,954,527 
3,391,121 
3,620,926 
427,219 
4,185,138 
4,086,628 
29,663,200 
12,319,911 
7,013,856 
Changes in fair value of qualifying hedges
 
 
 
 
 
 
 
 
(201,993)
(262,505)
(324,101)
Net Change in Other Comprehensive Loss
 
 
 
 
 
 
 
 
(249,219)
(323,880)
(399,881)
Parent Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Condensed Income Statements, Captions [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Lease revenue
 
 
 
 
 
 
 
 
638,243 
2,552,976 
Earnings from subsidiary
 
 
 
 
 
 
 
 
32,856,338 
10,894,003 
6,730,060 
Total Revenue
 
 
 
 
 
 
 
 
32,856,338 
11,532,246 
9,283,036 
General and administrative
 
 
 
 
 
 
 
 
2,236,358 
1,426,598 
1,061,421 
Depreciation expense
 
 
 
 
 
 
 
 
184,380 
754,050 
2,463,062 
Amortization expense
 
 
 
 
 
 
 
 
5,316 
5,316 
5,318 
Total Expenses
 
 
 
 
 
 
 
 
2,426,054 
2,185,964 
3,529,801 
Operating Income
 
 
 
 
 
 
 
 
30,430,284 
9,346,282 
5,753,235 
Net distributions and dividend income
 
 
 
 
 
 
 
 
12,963 
13,542 
13,117 
Interest on loans to subsidiaries
 
 
 
 
 
 
 
 
11,705,465 
9,294,537 
1,100,349 
Interest income (expense), net
 
 
 
 
 
 
 
 
(12,485,510)
(6,334,450)
147,155 
Total Other Expense
 
 
 
 
 
 
 
 
(767,082)
2,973,629 
1,260,621 
Net Income attributable to CorEnergy Stockholders
 
 
 
 
 
 
 
 
29,663,202 
12,319,911 
7,013,856 
Changes in fair value of qualifying hedges
 
 
 
 
 
 
 
 
(201,993)
(262,505)
(324,101)
Net Change in Other Comprehensive Loss
 
 
 
 
 
 
 
 
$ 29,461,209 
$ 12,057,406 
$ 6,689,755 
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Cash Flows (Details) (USD $)
0 Months Ended 12 Months Ended
May 23, 2016
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Condensed Cash Flow Statements, Captions [Line Items]
 
 
 
 
Net cash provided by (used in) operating activities
 
$ 51,108,652 
$ 42,600,618 
$ 16,968,553 
Proceeds from assets and liabilities held for sale
 
644,934 
7,678,246 
Issuance of note to subsidiary
 
(202,000)
(524,037)
(20,648,714)
Principal payment on financing note receivable
 
100,000 
Net cash provided (used) by investing activities
 
479,090 
(244,612,616)
(177,075,793)
Debt financing costs
 
(193,000)
(1,617,991)
(3,269,429)
Net offering proceeds on Series A preferred stock
 
54,210,476 
Net offering proceeds on common stock
 
73,184,679 
141,797,913 
Net offering proceeds on convertible debt
 
111,262,500 
Repurchases of common stock
 
(2,041,851)
Repurchases of convertible debt
(1,000,000)
(899,960)
Dividends paid on Series A preferred stock
 
(4,148,437)
(3,503,125)
Dividends paid on common stock
 
(34,896,727)
(28,528,224)
(15,187,976)
Advances on revolving line of credit
 
44,000,000 
45,392,332 
34,676,948 
Payments on revolving line of credit
 
(77,533,609)
(2,617,606)
Proceeds from term debt
 
45,000,000 
Net cash (used) provided by financing activities
 
(58,311,398)
209,052,574 
149,722,138 
Net Change in Cash and Cash Equivalents
 
(6,723,656)
7,040,576 
(10,385,102)
Cash and Cash Equivalents at beginning of period
 
14,618,740 
7,578,164 
17,963,266 
Cash and Cash Equivalents at end of period
 
7,895,084 
14,618,740 
7,578,164 
Parent Company [Member]
 
 
 
 
Condensed Cash Flow Statements, Captions [Line Items]
 
 
 
 
Net cash provided by (used in) operating activities
 
(3,141,286)
7,166,380 
(2,047,777)
Proceeds from assets and liabilities held for sale
 
7,678,246 
Issuance of note to subsidiary
 
(47,414,250)
(90,000,000)
Principal payment on financing note receivable
 
11,899,659 
2,570,000 
Investment in consolidated subsidiaries
 
(250,703,944)
(96,570,263)
Cash distributions from consolidated subsidiaries
 
39,100,000 
23,392,442 
18,600,000 
Net cash provided (used) by investing activities
 
3,625,306 
(217,063,256)
(168,010,935)
Debt financing costs
 
(193,000)
(1,439,929)
(1,600,908)
Net offering proceeds on Series A preferred stock
 
54,210,476 
Net offering proceeds on common stock
 
73,184,679 
141,797,913 
Net offering proceeds on convertible debt
 
111,262,500 
Repurchases of common stock
 
(2,041,851)
Repurchases of convertible debt
 
(899,960)
Dividends paid on Series A preferred stock
 
(4,148,437)
(3,503,125)
Dividends paid on common stock
 
(34,896,727)
(28,528,224)
(15,187,976)
Advances on revolving line of credit
 
44,000,000 
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
 
(6,460,000)
(1,800,000)
Net cash (used) provided by financing activities
 
(4,639,975)
216,386,377 
157,009,029 
Net Change in Cash and Cash Equivalents
 
(4,155,955)
6,489,501 
(13,049,683)
Cash and Cash Equivalents at beginning of period
 
10,089,436 
3,599,935 
16,649,618 
Cash and Cash Equivalents at end of period
 
$ 5,933,481 
$ 10,089,436 
$ 3,599,935 
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Supplemental Cash Flow Information (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Condensed Cash Flow Statements, Captions [Line Items]
 
 
 
Interest paid
$ 12,900,901 
$ 7,873,333 
$ 2,762,903 
Income taxes paid (net of refunds)
37,736 
747,406 
3,260,576 
Change in accounts payable and accrued expenses related to acquisition expenditures
(614,880)
270,615 
Change in accounts payable and accrued expenses related to the issuance of common equity
(72,685)
72,685 
Change in accounts payable and accrued expenses related to debt financing costs
(43,039)
(176,961)
Reinvestment of distributions by common stockholders in additional common shares
815,889 
817,915 
140,108 
Parent Company [Member]
 
 
 
Condensed Cash Flow Statements, Captions [Line Items]
 
 
 
Interest paid
11,335,654 
5,254,591 
Income taxes paid (net of refunds)
314,728 
192,938 
Change in accounts payable and accrued expenses related to acquisition expenditures
(344,065)
Change in accounts payable and accrued expenses related to the issuance of common equity
(72,685)
72,685 
Change in accounts payable and accrued expenses related to debt financing costs
(30,607)
(176,961)
Reinvestment of distributions by common stockholders in additional common shares
$ 815,889 
$ 817,915 
$ 140,108 
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Additional Information (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Condensed Financial Statements, Captions [Line Items]
 
 
 
Net Cash provided by operating activities
$ 51,108,652 
$ 42,600,618 
$ 16,968,553 
Net Cash used in investing activities
479,090 
(244,612,616)
(177,075,793)
Parent Company [Member]
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
Cash dividends paid
39,100,000 
23,392,442 
18,600,000 
Net Cash provided by operating activities
(3,141,286)
7,166,380 
(2,047,777)
Investment in consolidated subsidiaries
(250,703,944)
(96,570,263)
Net Cash used in investing activities
3,625,306 
(217,063,256)
(168,010,935)
2015 Previously Reported [Member] |
Parent Company [Member]
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
Net Cash provided by operating activities
 
18,060,382 
 
Investment in consolidated subsidiaries
 
(261,597,946)
 
Net Cash used in investing activities
 
(227,957,258)
 
Reclassification [Member] |
Parent Company [Member]
 
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
 
Net Cash provided by operating activities
 
(10,894,002)
 
Investment in consolidated subsidiaries
 
10,900,000 
 
Net Cash used in investing activities
 
$ 10,894,002 
 
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2016
Pinedale Liquids Gathering System [Member]
Dec. 31, 2016
Portland Terminal Facility [Member]
Dec. 31, 2016
United Property Systems [Member]
Dec. 31, 2016
Grand Isle Gathering System [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
 
 
 
 
 
 
 
 
Encumbrances
$ 89,600,577 
 
 
 
$ 8,860,577 
$ 13,417,612 
$ 380,066 
$ 66,942,322 
Initial Cost to Company, Land
120,355,063 
 
 
 
105,485,063 
13,700,000 
210,000 
960,000 
Initial Cost to Company, Building & Fixtures
412,740,415 
 
 
 
125,119,062 
27,961,956 
1,188,000 
258,471,397 
Cost Capitalized Subsequent to Acquisition, Improvements
8,382,608 
 
 
 
10,000,000 
65,371 
(1,682,763)
Gross Amount Carried at Close of Period, Land
120,355,063 
 
 
 
105,485,063 
13,700,000 
210,000 
960,000 
Gross Amount Carried at Close of Period, Building & Fixtures
421,123,023 
 
 
 
125,119,062 
37,961,956 
1,253,371 
256,788,634 
Gross Amount Carried at Close of Period, Total
541,478,086 
543,095,478 
293,823,903 
244,975,206 
230,604,125 
51,661,956 
1,463,371 
257,748,634 
Accumulated Depreciation
52,219,717 
33,869,263 
25,295,958 
12,754,588 
35,762,658 
3,468,690 
65,094 
12,923,275 
Investment in Real Estate, net
$ 489,258,369 
 
 
 
$ 194,841,467 
$ 48,193,266 
$ 1,398,277 
$ 244,825,359 
Life on which depreciation in latest income statement is computed
 
 
 
 
26 years 
30 years 
40 years 
30 years 
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - Additional Information (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2016
Pinedale Liquids Gathering System [Member]
Dec. 31, 2016
Portland Terminal Facility [Member]
Dec. 31, 2016
Grand Isle Gathering System [Member]
Dec. 31, 2016
Prudential [Member]
Limited Partner [Member]
Pinedale Liquids Gathering System [Member]
Dec. 31, 2016
Pinedale LP [Member]
General Partner [Member]
Pinedale Liquids Gathering System [Member]
Dec. 31, 2016
Line of Credit [Member]
Dec. 31, 2016
Line of Credit [Member]
CorEnergy Term Loan [Member]
Term Loan [Member]
Dec. 31, 2016
Line of Credit [Member]
CorEnergy Revolver [Member]
Revolving Credit Facility [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
 
 
 
 
 
 
 
 
 
 
Acquisition costs
 
 
$ 2,557,910 
$ 1,777,956 
$ 1,931,396 
 
 
 
 
 
Long-term debt outstanding
200,632,880 
216,864,752 
 
 
 
8,860,578 
37,897,082 
89,600,577 
36,740,000 
44,000,000 
Ownership percentage
 
 
 
 
 
18.95% 
81.05% 
 
 
 
Federal income tax basis
$ 10,858,436 
 
 
 
 
 
 
 
 
 
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - Reconciliation of Real Estate (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Investment in real estate:
 
 
 
Balance, beginning of year
$ 543,095,478 
$ 293,823,903 
$ 244,975,206 
Addition: Acquisitions and developments
65,373 
263,398,424 
48,848,697 
Deduction: Dispositions and other
(1,682,765)
(14,126,849)
Balance, end of year
541,478,086 
543,095,478 
293,823,903 
Accumulated depreciation:
 
 
 
Balance, beginning of year
33,869,263 
25,295,958 
12,754,588 
Addition: Depreciation
18,350,454 
15,021,908 
12,541,370 
Deduction: Dispositions and other
(6,448,603)
Balance, end of year
$ 52,219,717 
$ 33,869,263 
$ 25,295,958 
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Mortgage Loans on Real Estate [Line Items]
 
Face Value
$ 5,000,000 
Carrying Amount of Mortgage
1,500,000 
Principal Amount of Loans Subject to Delinquent Principal or Interest
5,000,000 
Billings, Dunn, and McKenzie Counties, North Dakota (Morlock Well) [Member] |
First Mortgage [Member]
 
Mortgage Loans on Real Estate [Line Items]
 
Interest Rate
10.00% 
Monthly Payment Amount
33,333 
Face Value
4,000,000 
Carrying Amount of Mortgage
1,500,000 
Principal Amount of Loans Subject to Delinquent Principal or Interest
4,000,000 
Billings, Dunn, and McKenzie Counties, North Dakota (Morlock Well) [Member] |
Second Mortgage [Member]
 
Mortgage Loans on Real Estate [Line Items]
 
Interest Rate
13.00% 
Monthly Payment Amount
10,833 
Face Value
1,000,000 
Carrying Amount of Mortgage
Principal Amount of Loans Subject to Delinquent Principal or Interest
$ 1,000,000 
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE - Reconciliation of Mortgage Loans (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Movement in Mortgage Loans on Real Estate [Roll Forward]
 
 
 
Beginning balance
$ 6,877,021 
$ 20,435,170 
$ 0 
Additions:
 
 
 
New loans
100,000 
20,300,000 
Net deferred costs
(8,211)
(86,508)
Interest receivable
(95,114)
302,395 
220,349 
Total Additions
4,886 
294,184 
20,433,841 
Deductions:
 
 
 
Principal repayments
100,000 
Foreclosures
1,857,000 
 
 
Amortization of deferred costs
(2,025)
(6,804)
(1,329)
Principal, Interest and Deferred Costs Write Down
3,526,932 
13,759,137 
Total deductions
5,381,907 
13,852,333 
(1,329)
Ending balance
$ 1,500,000 
$ 6,877,021 
$ 20,435,170 
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE - Additional Information (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Mortgage Loans on Real Estate [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Provision for loan loss
$ 0 
$ 0 
$ 369,278 
$ 4,645,188 
$ 5,833,000 
$ 7,951,137 
$ 0 
$ 0 
$ 5,014,466 
$ 13,800,000 
$ 0 
Not Related Mortgage Loans
 
 
 
 
 
 
 
 
 
 
 
Mortgage Loans on Real Estate [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Provision for loan loss
 
 
 
 
 
 
 
 
656,000 
 
 
Foreclosure and Sale of Black Bison
 
 
 
 
 
 
 
 
 
 
 
Mortgage Loans on Real Estate [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Provision for loan loss
 
 
 
 
 
 
 
 
832,000 
 
 
Write Down of Prepaid Asset Related to Black Bison
 
 
 
 
 
 
 
 
 
 
 
Mortgage Loans on Real Estate [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Provision for loan loss
 
 
 
 
 
 
 
 
 
25,000 
 
SWD Enterprise REIT Note
 
 
 
 
 
 
 
 
 
 
 
Mortgage Loans on Real Estate [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Interest receivable converted to principal
 
 
 
 
 
 
 
 
$ 100,000