CORR - Earnings call transcript Q4 2018 | CorEnergy Infrastructure Trust, Inc.

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Operator

CorEnergy's Fiscal Year 2018 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Lesley Schorgl. you. Thank ahead. go Please

Lesley Schorgl

joining am Trust Schulte, joined and for earnings Chairman, year call. CEO. I today CorEnergy you fiscal Infrastructure XXXX President Thank by David

filing. as are those for reminder, are Reconciliations Relations in speak Wednesday issued statements available forward-looking statements be protection, Investor audio conference in call, earnings this our maybe presentation to non-GAAP We filings release section discussed results on of of this a this an call, in course from materials of will XXXX our with not could CorEnergy's As as presentation press the GAAP the and under and can outlook Harbor well forward-looking the and made the the XX-K not Schulte, statements. discuss call information on replay that on release and CorEnergy's historical These forward-looking for included which our year available The our that this be securities during purely to applicable subject statements are Safe factors laws. update related available our website. the are differ results, Important you actual cause about Dave the ahead. found our will we and materially documents do between to in the SEC. now website.

Dave Schulte

in year the backdrop your mix. a movement estate We've in market our REIT, in real fundamentals XXXX stability the or portfolio management Gulf and of long-term. the Cox have Grand improving Fed deliver as our believe Lesley. brief XX We've quarter The tenant probably paid Gathering X, Cox with the now System following at to this asset sheet. of and our an or prioritizing team tenant ON place of and Mexico is the during new Isle potential ownership consistency view promises is consecutive the lease volatility our the our accomplished of by operator its fourth trust strengthening overview you, acquisition purchase. balance was infrastructure over of we the energy quarterly for the under we class. favorably. Thank acquisition against offshore investment changes a dividend of on Oil remaining a with and dividends We continues race by our portfolio. growth Slide experienced

Petroleum in Ultra the million XXXX. of Liquids in we in participating use System Wyoming For Pinedale received over rents Gathering $X

into intention went utilize for production. has stated to they're debt December sheet assets growing strengthen annually and the filed with to is debt of future. in attention Last rents a as Ultra continue not guaranteed redeployment has to these FERC approximately its new which rates Our May $XX repayment rate continue taken and million remains balance to ongoing. of maintain or case to requested The its MoGas X. the effect exchanges

Missouri. A incremental However, revenues services a refund those could in projects in Fort a pipeline South rates utility rerouting to separate contract identify outcome Omega includes the initiative continues at Leonard which final the Central its hospital, under to will construction The be case. to of of potential once energy Pipeline Wood produce a upon accommodate completed. Omega subject

a able consistent an Zenith include overall partner Terminal in remaining expectations. that return Illinois constructive and tenant, we following in with January in interest for Zenith outcome the December. the for upgrades for asset million the provided asset completed sold to Portland which didn't sale to in XXXX the $XX and of price the Terminal the its Energy. then We of We're that years, were Finally million our with pleased Joliet this purchase Energy be Cor's end we $XX million at $XX

which transactions, X. on a Slide to performance, seeing key of ongoing roughly effect be on have we you'll revenue, will will of wanted is balance declining and a engaged reduction number provide pause our on an a terminal statement changes to Moving and an in million. CorEnergy sheet million on company's has of X.X going annual income by $X.X which basis the partially in forward. offset The lease depreciation in result sale expense Portland

which has cash the XX-K June using exchange XX expense, was mid-January of note, including additional exchanged newly year. the cash a less dividends convertible in begun $X million X. the and by shares. sheet XXX,XXX declared million the CorEnergy leased bonds million paid current million reflects sale has Our using of the been of including those of would which next generated off of in us already of be approximately and additional shares. sale which mature of Portland from for value our these dividends. in X% to January. balance portion depreciation the would on paid X stabilize proceeds rate, At annual The XX this approximately $X since dividend will effects dividend approximately or of notes, issued million In of million accumulated including in sale save million anticipate the the and decrease common CorEnergy X.X to face offset XX.X of interest property this annually interest included be We a set XX.X

used see a with associated the will for decline of team cash approximate $XXX,XXX change. management Our

affect value addressed dividend transactions the Pinedale approximately preferred Finally we next could paying many X.X equity which Cor how of this participating X.XXX% our you save repurchased going LGS. is forward. annual probably rents dividend slide. on the in But using And million are XXX,XXX payments these capacity, from of will par wondering

targets are CorEnergy the which our reserves times, reinvestment debt dividend to believe an capacity. new recall, earnings repayment of may we X.X dividend adequately long-term for and you necessary AFFO maintain ratio to As assets steps of paying and which

below our the accounting target just chart, is shown treatment range. share per adjusted of the discussed As AFFO revenue for gas XXXX previously in low our GAAP

from see AFFO results of we AFFO in the deleveraging AFFO discussed times share, However, saved $X.XX of approximately prior or we the will forward initiatives. going approximately adjusted decline per of All Portland our dividend. $X.XX $X sales X.X approximately $X.XX slide to constant the in else this interest given effect transactions an due a by to in the offset our in

to combination equity our closer to do dividend while or toward at these through the we order of in sheet in investment of by our asset illustrated attractive believe of plan adequately an deleveraging how get any X.X.We market convertible effects income the On coverage deleveraging target liquidity them can slide move AFFO take prices. we closer that occur generating So X repurchase you're and specific of will debt we of balance gap to remaining target. sheet preferred one guarantee or to continued transactions cannot could balance transactions aware covered And of be metric. from further actions any January or on these we've the of an

While our ratio important in total XX% to XX%. our statements and financial we've debt to down year-end actions of ratio reflected to early to total the XX% from XXXX XX%, sale is capitalization our moved total equity down equity taken in preferred

both leverage our below well remain target we levels. So of

market adjusted XXX expanded availability infrastructure the Portland the million infrastructure years. liquidity private acquisitions. for remained some with discussing pursue last and the investors revisit have XXXX, we Historically which Our listed did who to providing us of just of investor decline assets. liquidity, and listed continued year-end for at sale performance $XX volatility several and a million cash to has of values And wanted access used outlook and XXX reserved grow have significant forms benefit of vehicles bond an publicly awareness many we exchange the adjusted of with low at cash REITs of protection investing, from under to we popularity total where including million downside of the for publicly to revolver convertible over before debt different left based our

the infrastructure the over remained As of criteria, characteristics, also period for the already REIT next which characteristics business. companies in has and as which higher sample the see slide. have attractive markets. reflects risk Cor's our on see group we lower volatility underwriting actually in The dividend largely oil at in slide a charts, were X-year you process of stability On are the a transition can diversified study demonstrated than have experienced disciplined new portfolio, those during before you to the current heart since measured a level than XXXX, same a which group investment growth generated our and relatively listed our high the in period CBRE. distributions in MLPs is which cut X, MLPs, by of can which

initial XXXX, will now, we keep growth reviews and we others So the while been those and discipline remain or asset growth sake. did for reviews. Two for more and resulted for In valuations growth processes. auction either assets have had process deep bids differences for of in our multiple from in just us acquisitions potential criteria our dive poised some have transactions lost again due-diligence many time are in

any complete fit business our acquisitions, which expand did model. we not our did of we best While understanding assets

We banking operators. potential and asset several with as sellers also investment deepened relationships teams as well

$XX their pipelines one call targeting million deals in I'd up XXXX, as diversified this upstream those various as $XXX currently geographies, In happy million well We've operators and conservative be as types. review terminals a remain open size to to in have XXXX, commodity we to be covered opportunities to ground for as storage capital strategies. Our primarily Those questions. lot in continue year the under expanded saw again assets range. two today and as of we're across allocation well the

Operator

question-and-answer the D.A. Barry I'll And be comes you. Thank Oxford question Your from [Operator session. Davidson. of with first a Instructions] line conducing

Barry Oxford

you you are about in and for if, kind you process you're two you of transaction, yourself Dave, one XX let's is started of that this place transactions say out process signatures, those just where of, little alluded the documents alluded two to? a that states you would talk is that could to in a transaction the more conversation

Dave Schulte

probably mark. we conversations stage indications of financial we've at another and alluded the preliminary information. or and But at underway, for so X got review some XX For we're we're interest one the the of two where two to

our So right end of the funnel along. are front further two that very robust We've now. is got

Barry Oxford

it's upstream oil great, bucks that not conservative Dave I remaining okay, mentioned not but range it's argument price it's operators an XX the that make $XX of okay. in is one are And can you but the the think

to wanting engage sale in So and guys they going these see to of of in we to access you provide form are lease-backs? therefore them would more guys the which need capital of activity can

Dave Schulte

Well their executives C they suite annual we messaging companies, a not budget ladder of means. be and their investigation. portfolio within and we those their gas to And than And that and them interact and is what have to them stage constraining budgets. incremental got sort a the, them all they've they're to embedded a oil we interested that with parties within But for to drilling that's still process what can means. describing assets, take to enabling X are several the therefore of lot chance we've do got live it's may activities in year it their an enable earlier or and these their they're they XX of in at existing larger of opportunities sell where redeploy conferences your attend describe CapEx level of for an to already pursue projects that to can our

Barry Oxford

accelerator kind the types CapEx of on more to companies these get of comes on it or putting these One of when foot of projects? kind going their

Dave Schulte

CapEx one hiring drilling for and rigs, resources, planning needs. dollars lengthy these process companies of that for is water of to forward a requires availability fracing a commitments lot obtain the Well, and

to it able Barry, as to time CapEx consider be the that of much place And so the how helpful dramatically. can their need set. to at and But we someone process, anything opportunity direction not part planning somebody right advanced awareness of for be right we the middle change as is an their be what their expect we to be to such at can process in do cycle is

Barry Oxford

Right.

think it part the in and years of might about kind comes or fruition. it? might three process we're that a of guess be two Is to their I kind it So be, to and something way of then making

Dave Schulte

for good redeterminations fairly leads the very think additional acquisitions of experience to companies it. challenges our along with lengthy their The potential lending, way base And own a price or process changes, reason. borrowing properties. of commodity of about That's way is the all that gestation divestitures and

to market. trying people in So receiving that out the and just solution them. what are dynamic Both inquiry these to very opportunities are respond be prepared businesses from we we a think to we're are well we affirmatively suggesting good to be as as would

Barry Oxford

Dave. Thanks Appreciate Okay, it. great.

Dave Schulte

Okay.

Operator

Thank from line with of Instructions] the you. Zuk Our Michael question [Operator next Oppenheimer.

Michael Zuk

Dave. afternoon Good

Dave Schulte

afternoon. Good

Michael Zuk

Can on projects? the give on have Pipeline us I color MoGas. Omega more you And of a status little the a follow-up

Dave Schulte

Well our in their of Defense scoping fast then and customer go review got is to the efficiency And the DoD they to their US process, selected not partner took to to or it's We've Omega do. us quite process and the a get a but is, energy exclusive big while for projects. a with prioritization. there there's we're in and evaluation there things projects present Department it just there us process through

the did pipeline upbeat around of activity. We opportunity there. that So some have we do rerouting sense a mention there's

existing our opportunity well. tends But So pipeline. do us it to go that margin a And with work that's does require as unpredicted. offer to more

relationship the and the we So we're confident very have opportunity in set. Omega

Michael Zuk

with require to mean, that additional some the in we how And extend would expenditures would pipeline, capital then pipeline MoGas could it customers. the if regard lock work? to I

Dave Schulte

Well, be possible always aware get that result Yes. say, customers, gas. we're is the today. to demand being access it in individual we our along in pipeline. volumes anything the in We working by would have contacted facility LDC tie and larger additional in into But a like spent industrial that Usually and manufacturing could don't past, that us and those on of our are front like local capital have pipeline. been to customers directly trying their to aware with of pipeline. But directly to

Michael Zuk

Do for ongoing or we MoGas to pipeline? waiting opportunities Are we come regard we potentially the have marketing with to us. any to are efforts customers

Dave Schulte

primary we to the our most customers, again that And we find and process rate on led And were Liquid renegotiation any, not came local to are potential source and the out You -- the of case, entered had find had pipeline pretty distribution of process prospecting adverse before able aggressive may case. did were their no take we've that. But made recall, were we very their mitigate disclosed a all about through we as extra that affirmatively. to to active the customers where were incremental impacts into with availability trying just tied a those gas. that try to a ago Spire year so we we companies we had rate often of we, we which up about aware we

Michael Zuk

For infrastructure? future or you towards are leaning more acquisitions infrastructure pipeline terminal

Dave Schulte

Most of the interests that we're seeing today is pipeline related.

similar to assets existing So it's our very footprint.

Michael Zuk

or back So to one said were hopefully you all more two to you'll do, and and done you've able ask efforts. this Appreciate so transactions we you that. be can't track, year on though much what than close get your going far

Dave Schulte

you. Thank

Operator

Thank you.

of question Stifel. Selman next line from Our comes Akyol the with

Selman Akyol

when and the or in whole about this afternoon. there to good me. settlement successful the are bit barring for Couple talks you a just quick rate you, no you maybe can talks settlement outcome would when case Thank those up? begin wrap you expect where when rate that you'd of ones talk Can case little thing

Dave Schulte

multiple currently going there of phase would come other to or that we're and are the agreement typically by some is agreement under oversight to rate an case, judge a are predict we the parties Well, and can't to involved the whether between in the settlement which jurisdiction come other parties parties.

were in phase post agreement. discussions. into process prepared However, the that is would middle of filed let when next But into more with and the proposed enter that reach starting entering we're to we're a and the the the it designed we is which prepared over settlement phase, parties rates beyond still be to formal

can't it we or a exactly when will will but And whether time limit. so happen, that is happen there predict

to of And sometime next toward that middle we into the or reached time this passed had limit year will have the phase. have and enter

Selman Akyol

Thank you. just case. be then a And that litigated then would fully

Dave Schulte

That's right.

Selman Akyol

of assets out acquiring and talk Okay. terms can mean, of of process I I the it the other and there that issues issue going out in you've things is you're you And private in guess just you're competition runs. seeing getting it, there? out the sort of line had about guess equity, appreciate a other I just the just then number main just is that making is so to particular goal thinking not I'm and or

Dave Schulte

are have at actually last that auctions a offered chance and and infrastructure for are presentation those generally There you're with they're growth the a rather by potentially been private attended and discussed focused over months. investors and sellers have acquired as have on MLP equity generally the presentation was that aware conference assets we acquisitive, private become Number we MLPs net being buyers. equity funds to And XX do projects that visit that. last at the more -- reasons than assets less to is one the Selman XX of

So in we're competition Where coming of is not a from is funds that not total they needing flexibility the, apply, amount seeing that se. leverage can in flexibility private MLP dividend. the current more competition have per where the

our structure, well of expectation dividend, unlike But more we're have require leverage do So leverage. as an an but equity and modest do as equity. with we

time whether unlike from observed occasions investment private has in So managed. They in their winning largely periods structure it's been or the best equity have financing that in there of we've processes terms fit fund how have source, is a private processes. been se, best have where per and more come that we've in most or privately bid been of they flexibility past

Operator

floor turn closing over question-and-answer to for our concludes session. This you. management Thank to like comments. back I'd our

Dave Schulte

at forward put on only dividend, support. both Well, it will very the control from of preserve our thank again, and is $X to of for we're in focused the you dividend. throughout efforts for you last as continued assets to end very not everybody We believe interest their but I acquisitions endeavor, And our that and continued sustaining year we to the year the thank want tell through additional we and within your can grow XXXX.

Operator

This concludes today's teleconference.

at for disconnect may Thank you your time. your participation. You lines this

CorEnergy Infrastructure Trust (CORR) 28 Feb 192018 Q4 Earnings call transcript