CorEnergy defines AFFO as FFO plus transaction costs, amortization of debt issuance costs, deferred leasing costs, and above market rent, less maintenance capital expenditures (if any), amortization of debt premium and adjustments to lease revenue resulting from the EIP sale. Management uses AFFO as a measure of long-term sustainable cash flow.
The pro forma table below reflects the completion as of December 1, 2011 of the LGS acquisition actually completed December 20, 2012. The pro forma FFO and AFFO calculations include the purchase of the LGS, execution of the Lease Agreement, the sale of 14.95 million shares of common stock, for a total of approximately 24 million shares outstanding, the execution of the $70 million secured term credit facility, and the $30 million co-investment by Prudential. Additional detail on this table is provided in management’s discussion and analysis of financial results in the Company’s Form 10-K for the year ended Nov. 30, 2012.
Pro forma FFO and AFFO for the year ended Nov. 30, 2012
|Net Income (attributable to CorEnergy Stockholders)||$||6,086,255||$||0.25|
|Funds From Operations (FFO)||$||14,240,554||$||0.59|
|Adjusted Funds From Operations (AFFO)||$||13,111,199||$||0.54|
2012 Annual Performance Review
CorEnergy’s stock price increased approximately 8.5 percent for the 2012 fiscal year, closing at $8.46 on Nov. 30, 2012 compared to $7.80 on Nov. 30, 2011. This contributed to a total investment return based on market value and assuming reinvestment of distributions of approximately 14.1 percent for the year ended Nov. 30, 2012. CorEnergy reported net income attributable to common stockholders of $12.3 million for the year ended Nov. 30, 2012, equivalent to earnings of $1.34 per common share. This is compared to approximately $3 million as of Nov. 30, 2011. The increase in income was primarily due to the sale of High Sierra in June of 2012. As of Nov. 30, 2012, the fair value of CorEnergy’s investment securities, excluding cash equivalents, was approximately $75 million, with approximately $55 million in publicly-traded securities and approximately $20 million in private securities. Net of the sale of High Sierra, the fair value of CorEnergy’s private securities increased approximately $3.5 million from Nov. 30, 2011 to Nov. 30, 2012.