Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 23, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | HIFR | ||
Entity Registrant Name | InfraREIT, Inc. | ||
Entity Central Index Key | 1,506,401 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 526.7 | ||
Entity Common Stock, Shares Outstanding | 43,775,383 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and cash equivalents | $ 17,612 | $ 9,471 |
Restricted cash | 1,682 | 1,682 |
Due from affiliates | 32,554 | 31,172 |
Inventory | 7,276 | 6,731 |
Prepaids and other current assets | 726 | 560 |
Total current assets | 59,850 | 49,616 |
Electric Plant, net | 1,640,820 | 1,434,531 |
Goodwill | 138,384 | 138,384 |
Other Assets | 37,646 | 40,979 |
Total Assets | 1,876,700 | 1,663,510 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 37,372 | 22,943 |
Short-term borrowings | 137,500 | 54,000 |
Current portion of long-term debt | 7,849 | 7,423 |
Dividends and distributions payable | 15,161 | 13,634 |
Accrued taxes | 4,415 | 3,312 |
Total current liabilities | 202,297 | 101,312 |
Long-Term Debt, Less Deferred Financing Costs | 709,488 | 617,305 |
Regulatory Liability | 21,004 | 10,625 |
Total liabilities | 932,789 | 729,242 |
Commitments and Contingencies | ||
Equity | ||
Common stock, $0.01 par value; 450,000,000 shares authorized; 43,772,283 and 43,565,495 issued and outstanding as of December 31, 2016 and 2015, respectively | 438 | 436 |
Additional paid-in capital | 705,845 | 702,213 |
Accumulated deficit | (18,243) | (24,526) |
Total InfraREIT, Inc. equity | 688,040 | 678,123 |
Noncontrolling interest | 255,871 | 256,145 |
Total equity | 943,911 | 934,268 |
Total Liabilities and Equity | $ 1,876,700 | $ 1,663,510 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Common stock, par or stated value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 450,000,000 | 450,000,000 |
Common stock, shares issued | 43,772,283 | 43,565,495 |
Common stock, shares, outstanding | 43,772,283 | 43,565,495 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Lease revenue | $ 172,099 | $ 151,203 | $ 134,415 |
Operating costs and expenses | |||
General and administrative expense | 21,852 | 64,606 | 18,625 |
Depreciation | 46,704 | 40,211 | 35,080 |
Total operating costs and expenses | 68,556 | 104,817 | 53,705 |
Income from operations | 103,543 | 46,386 | 80,710 |
Other (expense) income | |||
Interest expense, net | (36,920) | (28,554) | (32,741) |
Other income (expense), net | 3,781 | 3,048 | (17,236) |
Total other expense | (33,139) | (25,506) | (49,977) |
Income before income taxes | 70,404 | 20,880 | 30,733 |
Income tax expense | 1,103 | 949 | 953 |
Net income | 69,301 | 19,931 | 29,780 |
Less: Net income attributable to noncontrolling interest | 19,347 | 6,664 | 6,882 |
Net income attributable to InfraREIT, Inc. | $ 49,954 | $ 13,267 | $ 22,898 |
Net income attributable to InfraREIT, Inc. common stockholders per share: | |||
Basic | $ 1.14 | $ 0.31 | $ 0.65 |
Diluted | 1.14 | 0.31 | 0.65 |
Cash dividends declared per common share | $ 1 | $ 1.075 | $ 0.310 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income | $ 69,301 | $ 19,931 | $ 29,780 |
Change in fair value of cash flow hedging instrument | 844 | ||
Comprehensive income | 69,301 | 19,931 | 30,624 |
Less: Comprehensive income attributable to noncontrolling interest | 19,347 | 6,664 | 7,116 |
Comprehensive income attributable to InfraREIT, Inc. | $ 49,954 | $ 13,267 | $ 23,508 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Members' Capital | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total InfraREIT, Inc. Equity | Noncontrolling Interest |
Balance at Dec. 31, 2013 | $ 564,193 | $ 428,319 | $ (610) | $ 427,709 | $ 136,484 | |||
Dividends and distributions | (14,130) | (10,830) | (10,830) | (3,300) | ||||
Change in fair value of cash flow hedging instrument | 844 | $ 610 | 610 | 234 | ||||
Net income | 29,780 | 22,898 | 22,898 | 6,882 | ||||
Equity based compensation | 120 | 120 | ||||||
Non-cash noncontrolling interest equity issuance | 4,647 | 4,647 | ||||||
Balance at Dec. 31, 2014 | 585,454 | 440,387 | 440,387 | 145,067 | ||||
Dividends and distributions | (61,099) | (8,964) | $ (35,508) | (44,472) | (16,627) | |||
Repurchase of common shares, value | (66,517) | (66,517) | (66,517) | |||||
Repurchase of common shares | (6,242,999) | |||||||
Initial public offering, net of offering costs | 490,433 | $ 230 | $ 490,203 | 490,433 | ||||
Initial public offering, net of offering costs, shares | 23,000,000 | |||||||
Merger of InfraREIT, L.L.C. and InfraREIT, Inc. and related reorganization transactions | (101,885) | $ 206 | (367,191) | 212,010 | (154,975) | 53,090 | ||
Merger of InfraREIT, L.L.C. and InfraREIT, Inc. and related reorganization transactions, shares | 26,808,494 | |||||||
Net income | 19,931 | $ 2,285 | 10,982 | 13,267 | 6,664 | |||
Equity based compensation | 678 | 678 | ||||||
Non-cash noncontrolling interest equity issuance | 67,273 | 67,273 | ||||||
Balance at Dec. 31, 2015 | 934,268 | $ 436 | 702,213 | (24,526) | 678,123 | 256,145 | ||
Balance, shares at Dec. 31, 2015 | 43,565,495 | |||||||
Dividends and distributions | $ (60,636) | (43,671) | (43,671) | (16,965) | ||||
Redemption of operating partnership units for common stock | $ 2 | 3,275 | 3,277 | (3,277) | ||||
Redemption of operating partnership units for common stock, shares | 186,496 | 186,496 | ||||||
Net income | $ 69,301 | 49,954 | 49,954 | 19,347 | ||||
Equity based compensation | 978 | 357 | 357 | 621 | ||||
Equity based compensation, shares | 20,292 | |||||||
Balance at Dec. 31, 2016 | $ 943,911 | $ 438 | $ 705,845 | $ (18,243) | $ 688,040 | $ 255,871 | ||
Balance, shares at Dec. 31, 2016 | 43,772,283 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | |||
Net income | $ 69,301,000 | $ 19,931,000 | $ 29,780,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 46,704,000 | 40,211,000 | 35,080,000 |
Amortization of deferred financing costs | 4,014,000 | 3,241,000 | 4,383,000 |
Allowance for funds used during construction — other funds | (3,728,000) | (3,048,000) | (1,106,000) |
Change in fair value of contingent consideration | 18,357,000 | ||
Reorganization structuring fee | 44,897,000 | ||
Realized gain on sale of marketable securities | (66,000) | ||
Equity based compensation | 978,000 | 678,000 | 120,000 |
Changes in assets and liabilities: | |||
Due from affiliates | (1,382,000) | (3,350,000) | (7,275,000) |
Inventory | (545,000) | 662,000 | (816,000) |
Prepaids and other current assets | (166,000) | (6,000) | (3,370,000) |
Accounts payable and accrued liabilities | 7,958,000 | 2,644,000 | 7,347,000 |
Net cash provided by operating activities | 123,134,000 | 105,794,000 | 82,500,000 |
Cash flows from investing activities | |||
Additions to electric plant | (231,312,000) | (239,157,000) | (210,791,000) |
Proceeds from sale of assets | 41,211,000 | ||
Sale of marketable securities | 1,065,000 | ||
Cash paid to InfraREIT, L.L.C. investors in the merger, net of cash assumed | (172,400,000) | ||
Net cash used in investing activities | (231,312,000) | (369,281,000) | (210,791,000) |
Cash flows from financing activities | |||
Net proceeds from issuance of common stock upon initial public offering | 493,722,000 | ||
Proceeds from short-term borrowings | 139,500,000 | 87,000,000 | 354,000,000 |
Repayments of short-term borrowings | (56,000,000) | (253,000,000) | (210,000,000) |
Proceeds from borrowings of long-term debt | 100,000,000 | 400,000,000 | 11,000,000 |
Repayments of long-term debt | (7,423,000) | (404,867,000) | (13,934,000) |
Net change in restricted cash | (1,000) | ||
Deferred financing costs | (649,000) | (3,914,000) | (4,908,000) |
Dividends and distributions paid | (59,109,000) | (61,595,000) | 0 |
Net cash provided by financing activities | 116,319,000 | 257,346,000 | 136,157,000 |
Net increase (decrease) in cash and cash equivalents | 8,141,000 | (6,141,000) | 7,866,000 |
Cash and cash equivalents at beginning of year | 9,471,000 | 15,612,000 | 7,746,000 |
Cash and cash equivalents at end of year | $ 17,612,000 | $ 9,471,000 | $ 15,612,000 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | 1. Description of Business and Summary of Significant Accounting Policies Description of Business InfraREIT, Inc. is a Maryland corporation and the surviving corporation of a merger (Merger) with InfraREIT, L.L.C., a Delaware limited liability company, completed on February 4, 2015 in connection with the initial public offering (IPO) of InfraREIT, Inc. and related transactions effected during the first quarter of 2015 (collectively, the Reorganization). As used in these financial statements, unless the context requires otherwise or except as otherwise noted, the words “Company” and “InfraREIT” refer to InfraREIT, L.L.C., before giving effect to the Merger, and InfraREIT, Inc., after giving effect to the Merger, as the context requires, and also refer to the registrant’s subsidiaries, including InfraREIT Partners, LP (Operating Partnership or InfraREIT LP), a Delaware limited partnership, of which InfraREIT, Inc. is the general partner. The Merger was accounted for as a reverse acquisition, which means for accounting purposes the Company treated the assets and liabilities of InfraREIT, Inc. as assumed and incorporated with the assets and liabilities of InfraREIT, L.L.C. InfraREIT, Inc.’s operating results before the Merger primarily reflected costs related to obtaining a private letter ruling from the Internal Revenue Service and accounting services. The main assets and liabilities assumed were marketable securities of $1.1 million and a note payable of $1.0 million. The marketable securities were sold during February 2015 for $1.1 million resulting in a realized gain of $0.1 million which was recorded in other income (expense), net in the Consolidated Statements of Operations. Additionally, the note payable and associated interest were paid in full in February 2015. As a result, these financial statements present the operating results of InfraREIT, L.L.C. for years ended December 31, 2014 and 2013 and its 2015 results through the effectiveness of the Merger along with the operations of InfraREIT, Inc. thereafter. The Company has elected to be taxed as a real estate investment trust (REIT) for federal income tax purposes. The Company is externally managed and advised by Hunt Utility Services, LLC (Hunt Manager), a Delaware limited liability company. Hunt Manager is responsible for managing the Company’s day-to-day affairs, subject to the oversight of the Company’s board of directors. All of the Company’s officers, including the Company’s President and Chief Executive Officer, David A. Campbell, are employees of Hunt Manager. Mr. Campbell also serves as President and Chief Executive Officer of Sharyland Utilities, L.P. (Sharyland or tenant), a Texas-based utility and the Company’s sole tenant. The Company holds 72.2% of the outstanding partnership units (OP Units) in the Operating Partnership as of December 31, 2016. The Company includes the accounts of the Operating Partnership and its subsidiaries in the consolidated financial statements. Hunt Consolidated, Inc. (HCI) affiliates, current or former employees and members of the Company’s board of directors hold the other 27.8% of the outstanding OP Units as of December 31, 2016. Sharyland Distribution & Transmission Services, L.L.C. (SDTS) is the owner of rate-regulated electric transmission and distribution assets (T&D assets) located in the Texas Panhandle near Amarillo (CREZ assets), the Permian Basin in and around Stanton, Central Texas around Brady, Northeast Texas in and around Celeste (S/B/C assets) and South Texas near McAllen (McAllen assets). Previously, SDTS held some of its assets through its former wholly owned subsidiaries, SDTS FERC, L.L.C. (SDTS FERC) and Sharyland Projects, L.L.C. (SPLLC). However, in June 2015, SDTS FERC was merged with and into SDTS with SDTS as the surviving entity, and in December 2015, SPLLC was merged with and into SDTS with SDTS as the surviving entity (SDTS Merger). The T&D assets include over 54,000 electricity delivery points, approximately 815 circuit miles of transmission lines, approximately 40,500 circuit miles of distribution lines, 57 substations and a 300 megawatt high-voltage direct current interconnection between Texas and Mexico (Railroad DC Tie). SDTS leases all its T&D assets to Sharyland under several lease agreements, which operates and maintains the T&D assets. SDTS and Sharyland are each subject to regulation as an electric utility by the Public Utility Commission of Texas (PUCT). Initial Public Offering and Reorganization InfraREIT, Inc. completed its IPO on February 4, 2015, issuing 23,000,000 shares of common stock at a price of $23.00 per share, resulting in gross proceeds of $529.0 million. Immediately after the closing of the IPO, InfraREIT, Inc. completed the Merger, with InfraREIT, L.L.C. merging with and into InfraREIT, Inc., and InfraREIT, Inc. as the surviving entity and general partner of the Operating Partnership. InfraREIT, Inc. used $172.4 million of the net proceeds from the IPO to fund the cash portion of the consideration issued in the Merger, as described in greater detail below. InfraREIT, Inc. contributed the remaining $323.2 million to the Operating Partnership in exchange for common OP Units (Common OP Units). The Operating Partnership used the net proceeds from the IPO that it received from InfraREIT, Inc.: • to repay an aggregate of $1.0 million of indebtedness to HCI; • to repay an aggregate of $72.0 million of indebtedness outstanding under the Operating Partnership’s revolving credit facility and $150.0 million of indebtedness outstanding under SDTS’s revolving credit facility; • to pay offering expenses (other than the underwriting discounts and commissions and the underwriter structuring fee) of $6.3 million; and • for general corporate purposes. The following bullets describe the Merger and related Reorganization that were effected in the first quarter of 2015. • On January 29, 2015, the Operating Partnership effected a reverse unit split whereby each holder of OP Units received 0.938550 OP Units of the same class in exchange for each such unit it held immediately prior to such time, which is referred to as the reverse unit split. Also, on January 29, 2015, InfraREIT, L.L.C. effected a reverse share split whereby each holder of shares received 0.938550 shares of the same class in exchange for each such share it held immediately prior to such time, which is referred to as the reverse share split. All references to unit, share, per unit and per share amounts in these consolidated financial statements and related disclosures have been adjusted to reflect the reverse share split and reverse unit split for all periods presented. • On January 29, 2015, InfraREIT, Inc. issued 1,700,000 shares of common stock to Hunt-InfraREIT, L.L.C. (Hunt-InfraREIT) as a non-cash reorganization advisory fee in accordance with a structuring fee agreement, resulting in the recognition of a $44.9 million non-cash expense in the first quarter of 2015. • On February 4, 2015, the Operating Partnership issued 1,700,000 OP Units to InfraREIT, Inc. in connection with the structuring fee issuance of 1,700,000 shares of InfraREIT, Inc. common stock described immediately above. • On February 4, 2015, the Operating Partnership issued an aggregate of 28,000 of its profit interest OP Units (LTIP Units) to members of InfraREIT’s board of directors. • On February 4, 2015, the Operating Partnership issued 983,418 Common OP Units to Hunt-InfraREIT in settlement of the Operating Partnership’s obligation to issue OP Units to Hunt-InfraREIT related to the competitive renewable energy zone (CREZ) project. • On February 4, 2015, the Operating Partnership issued Hunt-InfraREIT 1,167,287 Common OP Units as an accelerated payment of a portion of the carried interest agreed to in 2010 in connection with the organization of InfraREIT, L.L.C. To effect the shift in ownership from the pre-IPO investors to Hunt-InfraREIT, an equal number of OP Units held by InfraREIT, L.L.C. in the Operating Partnership were canceled at the same time. • On February 4, 2015, as a result of the Merger, (1) holders of 8,000,000 common shares of InfraREIT, L.L.C. received $21.551 per common share, which was equal to the IPO price less the underwriting discounts and commissions and an underwriting structuring fee, (2) holders of the remaining 19,617,755 common shares of InfraREIT, L.L.C. received 19,617,755 shares of InfraREIT, Inc. Class A common stock and (3) holders of 25,145 Class C shares of InfraREIT, L.L.C. received 25,145 shares of InfraREIT, Inc. Class C common stock. • The pre-IPO investors received shares of InfraREIT, Inc. Class A common stock or Class C common stock in the Merger, and certain pre-IPO investors also received cash for a portion of their common shares. • On February 4, 2015, InfraREIT, Inc. contributed $323.2 million to the Operating Partnership in exchange for 15,000,000 Common OP Units. • On February 4, 2015, InfraREIT, Inc. issued 1,551,878 shares of common stock to Hunt-InfraREIT in exchange for 1,551,878 OP Units tendered for redemption by Hunt-InfraREIT in accordance with a redemption agreement. • On February 4, 2015, concurrently with the Merger, InfraREIT, Inc. purchased 6,242,999 common shares in consideration for the issuance of a promissory note to Westwood Trust, as trustee of a trust for the benefit of a charitable beneficiary, in the principal amount of $66.5 million. • Westwood Trust immediately transferred the promissory note to MC Transmission Holdings, Inc. (MC Transmission), and, immediately following receipt of the promissory note, MC Transmission purchased 3,325,874 Common OP Units from the Operating Partnership in consideration for the assignment of the promissory note. The promissory note was then transferred to InfraREIT, Inc. in exchange for the redemption of 6,242,999 OP Units held by InfraREIT, Inc. and the subsequent cancellation of such promissory note, resulting in no cash consideration being paid or received pursuant to the purchase from Westwood Trust or the sale of Common OP Units to MC Transmission. • On March 9, 2015, the Operating Partnership issued 2,329,283 Common OP Units to Hunt-InfraREIT, and InfraREIT, Inc. canceled an equal number of shares of Class A common stock and Class C common stock. Each remaining share of Class A common stock and Class C common stock then converted to common stock on a one-for-one basis. This issuance settled InfraREIT, L.L.C.’s pre-IPO investors’ carried interest obligation agreed to by Hunt-InfraREIT under the investment documents entered into by the parties in 2010. • On March 9, 2015, the 11,264 long-term incentive plan units issued to two of InfraREIT, L.L.C.’s non-voting directors in May 2014 converted on a one-to-one basis to Common OP Units. Limited Partnership Agreement In connection with the Reorganization, the Company adopted a Second Amended and Restated Limited Partnership Agreement which became effective with the closing of the IPO. Upon completion of the IPO, the Operating Partnership had five types of OP Units outstanding: Common OP Units, Class A OP Units, Class B OP Units, Class C OP Units and LTIP Units. On March 9, 2015, the Operating Partnership issued Common OP Units in exchange for outstanding Class A OP Units and Class C OP Units. Such Common OP Units were allocated among the holders of Class A OP Units and Class C OP Units, and the Class A OP Units, Class B OP Units and Class C OP Units were canceled. Following such allocation, the Company adopted a Third Amended and Restated Limited Partnership Agreement that eliminated the provisions related to the Reorganization and the description of the Class A OP Units, Class B OP Units and Class C OP Units; however, it continues to allow amendments to authorize and issue additional classes of OP Units in the future. Principles of Consolidation and Presentation The consolidated financial statements include the Company’s accounts and the accounts of all other entities in which the Company has a controlling financial interest with noncontrolling interest of consolidated subsidiaries reported separately. All significant intercompany balances and transactions have been eliminated. SDTS maintains (and prior to their merger with and into SDTS, SDTS FERC and SPLLC also maintained) accounting records in accordance with the uniform system of accounts, as prescribed by the Federal Energy Regulatory Commission (FERC). In accordance with the applicable consolidation guidance, the Company’s consolidated financial statements reflect the effects of the different rate making principles mandated by the FERC and the PUCT which regulate its subsidiaries’ operations. The accompanying historical consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The historical financial information is not necessarily indicative of the Company’s future results of operations, financial position and cash flows. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Regulation As the owner of rate-regulated T&D assets, regulatory principles applicable to the utility industry also apply to SDTS (and previously applied to its former subsidiaries). The financial statements reflect regulatory assets and liabilities under cost based rate regulation in accordance with accounting standards related to the effect of certain types of regulation. Regulatory decisions can have an impact on the recovery of costs, the rate earned on invested capital and the timing and amount of assets to be recovered by rates. See Note 5, Other Assets SDTS capitalizes allowance for funds used during construction (AFUDC) during the construction of its T&D assets, and SDTS’s lease agreements with Sharyland rely on FERC definitions and accepted standards regarding capitalization of expense to define key terms in the lease such as footprint projects, which are the expenditures SDTS is obligated to fund pursuant to the leases. The amounts funded for these footprint projects include allocations of Sharyland employees’ time and overhead allocations consistent with FERC policies and U.S. GAAP. The leases define “footprint projects” to be transmission or distribution projects primarily situated within the Company’s distribution service territory, or that physically hang from the Company’s existing transmission assets or that are physically located within one of its substations. Sharyland cannot be removed as lessee without prior approval from the PUCT. SDTS transacts with its tenant through several lease arrangements covering all the T&D assets. These lease agreements include provisions for additions and retirements of the T&D assets in the form of new construction or other capitalized projects. See Note 10, Regulatory Matters Cash and Cash Equivalents The Company considers all short-term, highly liquid investments with original maturities of three months or less to be cash equivalents. The Company’s account balances at one or more institutions periodically exceed the Federal Deposit Insurance Corporation (FDIC) insurance coverage and, as a result, there could be a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company has not experienced any losses and believes that the risk is not significant. Restricted Cash Restricted cash represents the principal and interest payable for two consecutive periods associated with the $25.0 million senior secured notes described in Note 7, Long-Term Debt Concentration of Credit Risk Sharyland is the Company’s sole tenant and all the Company’s revenue is driven by the leases with Sharyland. Inventory Inventory consists primarily of transmission parts and materials used in the construction of electric plant. Inventory is valued at average cost when it is acquired and used. Assets Held for Sale The Company records assets held for sale when certain criteria have been met as specified by Accounting Standard Codification (ASC) Topic 360, Property, Plant and Equipment Electric Plant, net Electric plant equipment is stated at the original cost of acquisition or construction, which includes the cost of contracted services, direct labor, materials, acquisition adjustments and overhead items. In accordance with the FERC uniform system of accounts guidance, SDTS recognizes, as a cost to construction work in progress (CWIP), AFUDC on other funds classified as other income (expense), net and AFUDC on borrowed funds classified as a reduction of the interest expense, net on the Consolidated Statements of Operations. The AFUDC blended rate utilized was 6.7%, 6.6% and 4.1% for the years ended December 31, 2016, 2015 and 2014, respectively. Depreciation of property, plant and equipment is calculated on a straight-line basis over the estimated service lives of the properties based on depreciation rates approved by the PUCT. Depreciation rates include plant removal costs as a component of depreciation expense, consistent with regulatory treatment. Actual removal costs incurred are charged to accumulated depreciation. When accrued removal costs exceed incurred removal costs, the difference is reclassified as a regulatory liability to retire assets in the future. The regulatory liability will be relieved as cost of removal charges are incurred upon asset retirement. Repairs are the responsibility of Sharyland as the lessee under the lease agreements. Betterments and improvements generally are the responsibility of SDTS and are capitalized. Provision for depreciation of electric plant is computed using composite straight-line rates as follows: Years Ended December 31, 2016 2015 2014 Transmission plant 1.69% - 1.69% - 1.69% - 3.15% Distribution plant 1.74% - 5.96% 1.74% - 5.96% 1.74% - 5.96% General plant 0.80% - 5.12% 0.80% - 5.12% 0.80% - 5.12% Impairment of Long-Lived Assets The Company evaluates impairment of its long-lived assets annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized only if the carrying amount of a long-lived asset is not recoverable through expected future cash flows. Regulatory assets are charged to expense in the period in which they are no longer probable of future recovery. Goodwill Goodwill represents the excess of costs of an acquired business over the fair value of the assets acquired, less liabilities assumed. Goodwill is not amortized and is tested for impairment annually or more frequently if events or changes in circumstances arise. Accounting Standard Update (ASU) 2011-08, Testing of Goodwill for Impairment The Company’s annual goodwill impairment analysis, which was performed qualitatively during the fourth quarter of 2016, did not result in an impairment charge. As of December 31, 2016 and 2015, $138.4 million was recorded as goodwill on the Consolidated Balance Sheets. Investments An investment is considered impaired if the fair value of the investment is less than its cost. Generally, an impairment is considered other-than-temporary unless (1) the Company has the ability and intent to hold an investment for a reasonable period of time sufficient for an anticipated recovery of fair value up to (or beyond) the cost of the investment; and (2) evidence indicating that the cost of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. If impairment is determined to be other than temporary, then an impairment loss is recognized equal to the difference between the investment’s cost and its fair value. Deferred Financing Costs Amortization of deferred financing costs associated with the issuance of the $25.0 million senior secured notes and the revolving credit facilities is computed using the straight-line method over the life of the loan which approximates the effective interest method. Amortization of deferred financing costs associated with the Company’s regulated subsidiaries is computed using the straight-line method over the life of the loan in accordance with applicable regulatory guidance. Derivative Instruments The Company uses derivatives from time to time to hedge against changes in cash flows related to interest rate risk (cash flow hedging instrument). ASC Topic 815, Derivatives and Hedging Unrealized gains and losses on the effective cash flow hedging instrument are recorded as components of accumulated other comprehensive income. Realized gains and losses on the cash flow hedging instrument are recorded as adjustments to interest expense. Settlements of derivatives are included within operating activities on the Consolidated Statements of Cash Flows. Any ineffectiveness in the cash flow hedging instrument is recorded as an adjustment to interest expense in the current period. Income Taxes InfraREIT, L.L.C. elected to be treated as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with its taxable year ended December 31, 2010, and InfraREIT, Inc. elected to be treated as a REIT commencing with its taxable year ended December 31, 2015. As a result, the Company generally will not be subject to federal income tax on its taxable income that is distributed to its stockholders. A REIT is subject to a number of other organizational and operational requirements, including a requirement that it currently distribute at least 90% of its annual taxable income (with certain adjustments). The Company’s policy is to distribute at least 100% of its taxable income. Accordingly, there is no provision for federal income taxes in the accompanying consolidated financial statements. Even if the Company maintains its qualification for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, including excise taxes, and federal income taxes on any undistributed income. At December 31, 2015, the Company had net operating loss carryforwards for federal income tax purposes of $13.5 million. No net operating losses were used for the year ended December 31, 2016. The estimated net operating loss carryforward for federal tax purposes was $79.4 million at December 31, 2016 and will expire between 2026 and 2036. The net operating loss carryforwards for alternative minimum tax (AMT) are generally limited to offsetting 90% of the alternative minimum taxable income (AMTI) for a given year. The Company recognizes the impact of tax return positions that are more-likely-than-not to be sustained upon audit. Significant judgment is required to evaluate uncertain tax positions. The evaluation of uncertain tax positions is based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of audit issues. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows: Years Ended December 31, (In thousands) 2016 2015 Balance at January 1 $ 2,924 $ 2,135 Additions based on tax positions related to the current year 903 789 Balance at December 31 $ 3,827 $ 2,924 The balance of unrecognized tax benefits relates to state taxes, all of which would impact the effective tax rate if recognized. It is reasonably possible that the amount of the Company’s unrecognized tax benefits will decrease in the next twelve months either because the Company’s position is approved through a ruling by the taxing jurisdiction or the Company agrees to a settlement. At this time, an estimate of the range of the reasonably possible change cannot be made. The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense in the Consolidated Statements of Operations. During the years ended December 31, 2016, 2015 and 2014, the Company recognized interest and penalties of $0.2 million, $0.2 million and $0.1 million, respectively. The Company had accrued interest and penalties of $0.6 million and $0.4 million at December 31, 2016 and 2015, respectively. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2012. Revenue Recognition The Company, through its subsidiaries, is the owner of the T&D assets and recognizes lease revenue over the term of lease agreements with Sharyland. The Company’s lease revenue includes annual payments and additional rents based upon a percentage of revenue earned by Sharyland on the leased assets in excess of annual specified breakpoints. In accordance with the lease agreements, Sharyland, the lessee and operator of the T&D assets, is responsible for the maintenance and operation of the T&D assets and primarily responsible for compliance with all regulatory requirements of the PUCT, the FERC or any other regulatory entity with jurisdiction over the T&D assets on our behalf and with our cooperation. Each of the lease agreements with Sharyland is a net lease that obligates the lessee to pay all property related expenses, including maintenance, repairs, taxes and insurance, and to comply with the terms of the SDTS secured credit facilities and note purchase agreements. The Company recognizes base rent under these leases on a straight-line basis over the applicable lease term. The current lease agreements provide for periodic supplemental adjustments of base rent based upon capital expenditures made by SDTS. The Company recognizes supplemental adjustments of base rent as a modification under these leases on a prospective straight-line basis over the applicable lease term. The Company recognizes percentage rent under these leases once the revenue earned by Sharyland on the leased assets exceeds the annual specified breakpoints. See Note 10, Regulatory Matters Asset Retirement Obligations The Company has identified, but not recognized, asset retirement obligation liabilities related to the T&D assets as a result of certain easements on property on which the Company has assets. Generally, such easements are perpetual and require only the retirement and removal of the assets upon cessation of the property’s use. Management has not estimated and recorded a retirement liability for such easements because the Company plans to use the facilities indefinitely. Interest Expense, net The Company’s interest expense, net primarily consists of interest expense from the senior notes and credit facilities, see Note 6, Borrowings Under Credit Facilities Long-Term Debt Other Income, net AFUDC on other funds of $3.7 million, $3.0 million and $1.1 million was recognized in other income, net during the years ended December 31, 2016, 2015 and 2014, respectively. Comprehensive Income Comprehensive income includes net income and other comprehensive income, which consists of unrealized gains and losses on derivative financial instruments. The Company records deferred hedge gains and losses on its derivative financial instruments that qualify as cash flow hedging instruments as other comprehensive income. Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurements and Disclosures Level 1 — Quoted prices in active markets for identical assets and liabilities. Level 2 — Valuations based on one or more quoted prices in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs that are observable other than quoted prices for the asset or the liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Recent Accounting Guidance Recently Adopted Accounting Guidance In February 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-02, Consolidation (Topic 810) – Amendments to the Consolidation Analysis In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustment Recent Accounting Guidance Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Clarification of Certain Cash Receipts and Cash Payments . The objective of ASU 2016-15 is to eliminate the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on eight specific cash flow issues. ASU 2016-15 is effective for periods beginning after December 15, 2017 with early adoption permitted. The new standard should be applied retrospectively to all periods presented, unless deemed impracticable, in which case, prospective application is permitted. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its cash flows. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (A Consensus of the FASB Emerging Issues Task Force) In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Reportable Segments U.S. GAAP establishes standards for reporting financial and descriptive information about a company’s reportable segments. Management has determined that the Company has one reportable segment, with activities related to ownership and leasing of rate-regulated T&D assets. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 2. Related Party Transactions The Company, through SDTS, leases all its T&D assets to Sharyland through several lease agreements. Under the leases, the Company has agreed to fund capital expenditures for footprint projects. The Company earned lease revenues under these agreements of $172.1 million, $151.2 million and $134.4 million from Sharyland during the years ended December 31, 2016, 2015 and 2014, respectively. In connection with the Company’s leases with Sharyland, the Company recorded a deferred rent liability of $15.6 million and $11.5 million as of December 31, 2016 and 2015, respectively, which is included in accounts payable and accrued liabilities on the Consolidated Balance Sheets. In addition to rent payments that Sharyland makes to the Company, the Company and Sharyland also make payments to each other under the leases that primarily consist of payments to reimburse Sharyland for the costs of gross plant and equipment added to the Company’s T&D assets. For the years ended December 31, 2016 and 2015, the net amount of the payments the Company made to Sharyland was $231.6 million and $245.1 million, respectively. As of December 31, 2016 and 2015, accounts payable and accrued liabilities on the Consolidated Balance Sheets included $13.7 million and $9.2 million, respectively, related to amounts owed to Sharyland. As of December 31, 2016 and 2015, amounts due from affiliates on the Consolidated Balance Sheets included $32.6 million and $31.2 million, respectively, related to amounts owed by Sharyland associated with the Company’s leases. The management fee paid to Hunt Manager for the years ended December 31, 2016 and 2015 was $10.3 million and $12.3 million, respectively. As of December 31, 2016, there was $3.5 million accrued associated with management fees on the Consolidated Balance Sheets. As of December 31, 2015, there were no prepaid or accrued amounts associated with management fees on the Consolidated Balance Sheets. Additionally, during the years ended December 31, 2016 and 2015, the Company paid Hunt Manager $0.5 million for reimbursement of annual software license and maintenance fees and other expenses in accordance with the management agreement. The current management agreement with Hunt Manager, which became effective February 4, 2015, provided for an annual base fee, or management fee, of $10.0 million through April 1, 2015. Effective as of April 1, 2015, the annual base fee was adjusted to $13.1 million annually through March 31, 2016. Effective as of April 1, 2016, the annual base fee was adjusted to $14.0 million annually through March 31, 2017. Effective as of April 1, 2017, the annual base fee will be adjusted to $14.2 million annually through March 31, 2018. The base fee for each twelve month period beginning each April 1 thereafter will equal 1.50% of the Company’s total equity as of December 31 of the immediately preceding year, subject to a $30.0 million cap. The term of the management agreement expires December 31, 2019, and will automatically renew for successive five year terms unless a majority of the Company’s independent directors decides to terminate the agreement. In connection with the organization of InfraREIT, L.L.C. in 2010, the Operating Partnership agreed to issue deemed capital credits and Class A OP Units to Hunt-InfraREIT. The Operating Partnership agreed to issue up to $82.5 million to Hunt-InfraREIT, pro-rata, as the capital expenditures were funded for the CREZ project up to $737.0 million. In addition, the Operating Partnership also agreed to issue Hunt-InfraREIT deemed credits in an amount equal to 5% of the capital expenditures on certain development projects. As of December 31, 2014, the Operating Partnership issued Hunt-InfraREIT an aggregate 6.8 million Class A OP Units in respect to these obligations. On January 1, 2015, the Operating Partnership issued an additional 70,846 Class A OP Units to Hunt-InfraREIT, and, upon completion of InfraREIT’s IPO, the Operating Partnership issued Hunt-InfraREIT an accelerated deemed capital credit equal to 983,418 Class A OP Units, which settled the related obligations to Hunt-InfraREIT. Following this issuance, the Operating Partnership no longer has the obligation to issue deemed capital credits or related equity to Hunt-InfraREIT. The operating Partnership recorded these capital account credits as asset acquisition costs included as part of the capital project in the CWIP balance. In connection with the IPO and Reorganization, the Company incurred an aggregate of $5.0 million of legal fees, a portion of which was paid to reimburse HCI and its subsidiaries (collectively, Hunt), to reimburse certain pre-IPO investors and to reimburse certain of InfraREIT’s independent directors, in each case for legal expenses they incurred in connection with such transactions. Of the total legal fees incurred, $0.1 million of the legal fees were recorded during the first quarter of 2015 and the $4.9 million was incurred during the year ended December 31, 2014. For further information on additional related party transactions the Company entered into as a result of the Reorganization, see the caption Initial Public Offering and Reorganization Description of Business and Summary of Significant Accounting Policies On November 20, 2014, InfraREIT, Inc. borrowed $1.0 million from HCI pursuant to a promissory note. The note accrued interest at 2.5% per year and was due on November 1, 2015. This note and accrued interest were repaid in February 2015 with proceeds from the IPO for a total of $1.0 million. Effective January 15, 2015, the Company sold all the assets related to the Cross Valley transmission line (Cross Valley Project) to a newly formed development company owned by Hunt and certain of the Company’s pre-IPO investors for cash of $34.2 million, which equaled the CWIP of the project on the date of sale, plus reimbursement of out of pocket expenses associated with the project financing. Also on January 15, 2015, the Company sold all the assets related to the Golden Spread Electric Cooperative interconnection (Golden Spread Project) to Hunt for cash of $7.0 million, which equaled the CWIP of the project on the date of sale. These projects are projects to which the Company has a right of first offer under the Company’s development agreement with Hunt Transmission Services, L.L.C. (Hunt Developer). |
Electric Plant and Depreciation
Electric Plant and Depreciation | 12 Months Ended |
Dec. 31, 2016 | |
Public Utilities Property Plant And Equipment [Abstract] | |
Electric Plant and Depreciation | 3 . Electric Plant and Depreciation The major classes of electric plant are as follows: For the Years Ended December 31, (In thousands) 2016 2015 Electric plant: Transmission plant $ 1,203,164 $ 1,080,050 Distribution plant 575,648 457,988 General plant 15,959 15,655 Total plant in service 1,794,771 1,553,693 CWIP 107,189 121,602 Total electric plant 1,901,960 1,675,295 Accumulated depreciation (261,140 ) (240,764 ) Electric plant, net $ 1,640,820 $ 1,434,531 General plant consists primarily of a warehouse, buildings and associated assets. CWIP relates to various transmission and distribution projects underway. The capitalized amounts of CWIP consist primarily of route development expenditures, labor and materials expenditures, right of way acquisitions, engineering services and legal fees. Electric plant, net includes plant acquisition adjustments of $27.7 million and $28.6 million at December 31, 2016 and 2015, respectively. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | 4 . Goodwill Goodwill represents the excess of costs of an acquired business over the fair value of the assets acquired, less liabilities assumed. The Company conducts an impairment test of goodwill at least annually. The Company’s 2016 impairment test did not result in an impairment charge. As of December 31, 2016 and 2015, $138.4 million was recorded as goodwill on the Consolidated Balance Sheets. |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Other Assets | 5 . Other Assets Other assets are as follows: December 31, 2016 December 31, 2015 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Deferred financing costs on undrawn revolver $ 967 $ (397 ) $ 570 $ 967 $ (204 ) $ 763 Other regulatory assets: Deferred financing costs 27,761 (16,997 ) 10,764 27,112 (13,208 ) 13,904 Deferred costs recoverable in future years 23,793 — 23,793 23,793 — 23,793 Other regulatory assets, net 51,554 (16,997 ) 34,557 50,905 (13,208 ) 37,697 Investments 2,519 — 2,519 2,519 — 2,519 Other assets $ 55,040 $ (17,394 ) $ 37,646 $ 54,391 $ (13,412 ) $ 40,979 Deferred financing costs on undrawn revolver consist of costs incurred in connection with the establishment of the InfraREIT LP revolving credit facility, see Note 6, Borrowings Under Credit Facilities Other regulatory assets consist of deferred financing costs within the Company’s regulated subsidiary. These assets are classified as regulatory assets and amortized over the length of the related loan. These costs will be included in the costs to be recovered in connection with a future rate case. Deferred financing costs included in other regulatory assets primarily consist of debt issuance costs incurred in connection with the construction term loan agreement entered into in 2011 by SPLLC, which was at the time one of the Company’s subsidiaries; refinancing costs incurred in connection with the amended and restated revolving credit facility entered into by SDTS in 2013; refinancing costs incurred to amend and restate the SDTS credit facility in order to increase the revolving credit facility to a total of $250.0 million in 2014; and financing costs incurred in connection with SDTS’s senior secured notes, series A and series B in December 2015 and January 2016. See Note 6, Borrowings Under Credit Facilities Long-Term Debt Deferred costs recoverable in future years of $23.8 million at December 31, 2016 and 2015 represent operating costs incurred from inception of Sharyland through 2007. Recovery of these costs has been requested in the December Rate Case Filing. The Company has determined that these costs are probable of recovery through future rates based on orders of the PUCT in Sharyland’s prior rate cases and regulatory precedent. See Note 10, Regulatory Matters In connection with the acquisition of Cap Rock Holding Corporation (Cap Rock), the Company received a participation in the National Rural Utilities Cooperative Finance Corporation (NRUCFC). The Company accounts for this investment under the cost method of accounting. The Company believes that the investment is not impaired at December 31, 2016 and 2015. |
Borrowings Under Credit Facilit
Borrowings Under Credit Facilities | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Borrowings Under Credit Facilities | 6 . Borrowings Under Credit Facilities InfraREIT LP Revolving Credit Facilities In 2014, InfraREIT LP entered into a credit agreement that established a revolving credit facility of $130.0 million that included a letter of credit facility. In December 2014, the credit facility was repaid and terminated using proceeds from InfraREIT LP’s $75.0 million credit facility and SDTS’s amended credit agreement entered into in December 2014, as discussed below. In December 2014, InfraREIT LP entered into a $75.0 million revolving credit facility, led by Bank of America, N.A., as administrative agent, with up to $15.0 million available for issuance of letters of credit and a maturity date of December 10, 2019. The revolving credit facility is secured by certain assets of InfraREIT LP, including accounts and other personal property, and is guaranteed by the Company and Transmission and Distribution Company, L.L.C. (TDC), with the TDC guarantee secured by the assets of, and InfraREIT LP’s equity interests in, TDC on materially the same basis as TDC’s senior secured notes described below in Note 7, Long-Term Debt Borrowings and other extensions of credit under the revolving credit facility bear interest, at InfraREIT LP’s election, at a rate equal to (1) the one, two, three or six month London Interbank Offered Rate (LIBOR) plus 2.5%, or (2) a base rate (equal to the highest of (a) the Federal Funds Rate plus ½ of 1%, (b) the Bank of America prime rate and (c) LIBOR plus 1%) plus 1.5%. Letters of credit are subject to a letter of credit fee equal to the daily amount available to be drawn times 2.5%. InfraREIT LP is also required to pay a commitment fee and other customary fees under the revolving credit facility. InfraREIT LP may prepay amounts outstanding under the revolving credit facility in whole or in part without premium or penalty. As of December 31, 2016 and 2015, there were no borrowings or letters of credit outstanding and there was $75.0 million of borrowing capacity available under the revolving credit facility. As of December 31, 2016 and 2015, InfraREIT LP was in compliance with all debt covenants under the credit agreement. SDTS Revolving Credit Facilities In 2013, SDTS entered into a second amended and restated credit agreement led by Royal Bank of Canada, as administrative agent, which established a revolving credit facility of $75.0 million including a letter of credit facility. In December 2014, SDTS entered into the third amended and restated credit agreement increasing the borrowing capacity up to $250.0 million with a maturity date of December 10, 2019. Up to $25.0 million of the revolving credit facility is available for issuance of letters of credit, and up to $5.0 million of the revolving facility is available for swingline loans. The revolving credit facility is secured by SDTS’s T&D assets, the leases, certain accounts and TDC’s equity interests in SDTS on the same basis as SDTS’s various senior secured note obligations described in Note 7, Long-Term Debt The interest rate for the revolving credit facility is based, at SDTS’s option, at a rate equal to either (1) a base rate, determined as the greatest of (a) the administrative agent’s prime rate, (b) the federal funds effective rate plus ½ of 1% and (c) LIBOR plus 1.00% per annum, plus a margin of either 0.75% or 1.00% per annum, depending on the total debt to capitalization ratio of SDTS on a consolidated basis or (2) LIBOR plus a margin of either 1.75% or 2.00% per annum, depending on the total debt to capitalization ratio of SDTS on a consolidated basis. SDTS is also required to pay a commitment fee and other customary fees under its revolving credit facility. SDTS is entitled to prepay amounts outstanding under the revolving credit facility with no prepayment penalty. As of December 31, 2016, SDTS had $137.5 million of borrowings outstanding at a weighted average interest rate of 2.50%, no letters of credit outstanding and $112.5 million of remaining borrowing capacity available under this revolving credit facility. As of December 31, 2015, SDTS had $54.0 million of borrowings outstanding at a weighted average interest rate of 2.05% with no letters of credit outstanding and $196.0 million of borrowing capacity available under this revolving credit facility. As of December 31, 2016 and 2015, SDTS was in compliance with all debt covenants under the credit agreement. The credit agreements require InfraREIT LP and SDTS to comply with customary covenants for facilities of this type, including: debt to capitalization ratios, debt service coverage ratios, limitations on additional debt, liens, investments, mergers, acquisitions, dispositions or entry into any line of business other than the business of the transmission and distribution of electric power and the provision of ancillary services and certain restrictions on the payment of dividends. The debt to capitalization ratio on the SDTS credit facility is calculated on a combined basis with Sharyland. The credit agreements also contain restrictions on the amount of Sharyland’s indebtedness and other restrictions on, and covenants applicable to, Sharyland. The revolving credit facilities of InfraREIT LP and SDTS are subject to customary events of default. If an event of default occurs under either facility and is continuing, the lenders may accelerate amounts due under such revolving credit facility. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Instruments [Abstract] | |
Long-Term Debt | 7 . Long-Term Debt Long-term debt consisted of the following: December 31, 2016 December 31, 2015 (In thousands) Maturity Date Amount Outstanding Interest Rate Amount Outstanding Interest Rate TDC Senior secured notes - $25.0 million December 30, 2020 $ 17,500 8.50% $ 18,750 8.50% SDTS Senior secured notes - $60.0 million June 20, 2018 60,000 5.04% 60,000 5.04% Senior secured notes - $400.0 million December 3, 2025 400,000 3.86% 400,000 3.86% Senior secured notes - $100.0 million January 14, 2026 100,000 3.86% — N/A Senior secured notes - $53.5 million December 30, 2029 42,600 7.25% 44,512 7.25% Senior secured notes - $110.0 million September 30, 2030 97,366 6.47% 101,627 6.47% Total SDTS debt 699,966 606,139 Total long-term debt 717,466 624,889 Less unamortized deferred financing costs (129 ) (161 ) Total long-term debt, less deferred financing costs 717,337 624,728 Less current portion of long-term debt (7,849 ) (7,423 ) Debt classified as long-term debt, less deferred financing costs $ 709,488 $ 617,305 In 2010, TDC issued $25.0 million aggregate principal amount of 8.50% per annum senior secured notes to The Prudential Insurance Company of America and affiliates (TDC Notes). Principal and interest on the TDC Notes are payable quarterly, and the TDC Notes are secured by the assets of, and InfraREIT LP’s equity interest in, TDC on materially the same basis as with lenders under InfraREIT LP’s revolving credit facility described above in Note 6, Borrowings Under Credit Facilities Description of Business and Summary of Significant Accounting Policies In 2011, SPLLC entered into a construction term loan agreement and issued senior secured notes to The Prudential Insurance Company of America and affiliates (2011 Notes). The construction term loan was converted into a term loan with a balance of $407.0 million in 2014. After this conversion, interest accrued at LIBOR plus 2.25%. Interest under the term loan was payable the last day of the selected interest period for interest periods of three months or less, and every three months for interest periods greater than three months. Amortized principal amounts of the term loan were payable quarterly after the conversion. In 2015, the outstanding principal and interest on the term loan were paid in full with proceeds from the SDTS Series A Notes. The 2011 Notes have a principal balance of $60.0 million which is due in full on June 20, 2018. Interest is payable quarterly at an interest rate of 5.04% per annum. The 2011 Notes do not provide for any principal payments until maturity. The 2011Notes were assumed by SDTS in connection with the SDTS Merger in 2015. In December 2015, SDTS issued $400.0 million in 10 year senior secured notes, series A (Series A Notes), due December 3, 2025, and in January 2016 issued an additional $100.0 million in 10 year senior secured notes, series B (Series B Notes), due January 14, 2026. These senior secured notes were issued through a private placement conducted pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (Securities Act) and bear interest at a rate of 3.86 % per annum, payable semi-annually. The Series A Notes are due at maturity with outstanding accrued interest payable each June and December. The Series B Notes are due at maturity with outstanding accrued interest payable each January and July. In 2009, SDTS issued $53.5 million aggregate principal amount of 7.25% per annum senior secured notes to The Prudential Insurance Company of America and affiliates (2009 Notes). Principal and interest on these senior secured notes are payable quarterly. In 2010, SDTS issued $110.0 million aggregate principal amount of 6.47% per annum senior secured notes to The Prudential Insurance Company of America (2010 Notes). Principal and interest on these senior secured notes are payable quarterly. SDTS and TDC are entitled to prepay amounts outstanding under their senior secured notes, subject to a prepayment penalty equal to the excess of the discounted value of the remaining scheduled payments with respect to such notes over the amount of the prepaid notes. The agreements governing the senior secured notes contain customary covenants, such as debt to capitalization ratios, debt service coverage ratios, limitation on liens, dispositions, mergers, entry into other lines of business, investments and the incurrence of additional indebtedness. The debt to capitalization ratios are calculated on a combined basis with Sharyland. SDTS’s Series A Notes and Series B Notes are not required to maintain a debt service coverage ratio. As of December 31, 2016 and 2015, SDTS and TDC were in compliance with all debt covenants under the applicable agreements. SDTS’s Series A Notes, Series B Notes, 2009 Notes, 2010 Notes and 2011 Notes are secured by substantially all of SDTS’s T&D assets, the leases, certain accounts and TDC’s equity interests in SDTS on the same basis as SDTS’s revolving credit facility described above in Note 6, Borrowings Under Credit Facilities The senior secured notes of TDC and SDTS are subject to customary events of default. If an event of default occurs with respect to the notes and is continuing, the lenders may accelerate the applicable amounts due. Future maturities of long-term debt are as follows for the years ending December 31: (In thousands) Total 2017 $ 7,849 2018 68,305 2019 8,792 2020 21,813 2021 8,621 Thereafter 602,086 Total $ 717,466 |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 8 . Derivative Instruments SPLLC participated in an interest rate swap agreement designated as a cash flow hedge against variable interest rate exposure on a portion of the construction term loan. The Company has not entered into any new derivative instruments since the termination of this swap agreement in June 2014. There were no notional amounts as of December 31, 2014 related to the swap agreement. This cash flow hedging instrument was recorded as a liability on the Consolidated Balance Sheets at fair value, with an offset to accumulated other comprehensive income to the extent the cash flow hedging instrument was effective. The cash flow hedging instrument gains and losses included in other comprehensive income were reclassified into earnings as the underlying transaction occurred. There was no cash flow hedging instrument ineffectiveness recorded for this swap agreement. The Company reclassified $0.9 million related to the swap agreement, included in other comprehensive income, during the year ended December 31, 2014 to interest expense, net on the Consolidated Statements of Operations. The Company did not reclassify any amounts related to the swap agreement to interest expense, net during the years ended December 31, 2016 and 2015. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 9 . Fair Value of Financial Instruments The carrying amounts of the Company’s cash and cash equivalents, restricted cash, due from affiliates and accounts payable approximate fair value due to the short-term nature of these assets and liabilities. The Company had borrowings totaling $717.5 million and $624.9 million under senior secured notes with a weighted average interest rate of 4.6% and 4.8% per annum as of December 31, 2016 and 2015, respectively. The fair value of these borrowings is estimated using discounted cash flow analysis based on current market rates. Financial instruments, measured at fair value, by level within the fair value hierarchy were as follows: Carrying Fair Value (In thousands) Value Level 1 Level 2 Level 3 December 31, 2016 Long-term debt $ 717,466 $ — $ 758,415 $ — December 31, 2015 Long-term debt $ 624,889 $ — $ 657,270 $ — |
Regulatory Matters
Regulatory Matters | 12 Months Ended |
Dec. 31, 2016 | |
Public Utilities Rate Matters [Abstract] | |
Regulatory Matters | 1 0 . Regulatory Matters Regulatory Liability The Company’s regulatory liability is established through depreciation rates related to cost of removal and represents amounts that the Company expects to incur in the future. As of December 31, 2016 and 2015, the Company recorded on the Consolidated Balance Sheets as a long-term liability $21.0 million and $10.6 million, respectively, net of actual removal costs incurred. Rate Case Filing On April 29, 2016, Sharyland filed a system-wide rate proceeding with the PUCT to update its rates (April Rate Case Filing). Pursuant to a restructuring order issued by the PUCT in 2008 allowing the Company to utilize a REIT structure (2008 Restructuring Order), the April Rate Case Filing was prepared using the audited books and records of both Sharyland and SDTS and proposed rates to be set on a combined basis. However, as a result of a preliminary order issued by the PUCT in October 2016 (Preliminary Order), Sharyland and SDTS filed an amended rate case on December 30, 2016 with the PUCT (December Rate Case Filing) which supersedes the April Rate Case Filing and requests: • PUCT approval of a tariff establishing terms and conditions for the leases between Sharyland and SDTS, including rent rates that SDTS will charge Sharyland under the leases; • the PUCT to issue SDTS its own certificate of convenience and necessity; and • new system-wide rates for Sharyland’s system. Sharyland and SDTS have requested the following rate case metrics, among others: • allowed return on equity of 10%; • maintain the capital structure of 55% debt to 45% equity; and • reduce the cost of debt to 4.97%, down from 6.73%. Consistent with the Preliminary Order, SDTS and Sharyland proposed to replace their five existing lease agreements with two new leases, one for transmission assets and one for distribution assets. Each of the leases, if approved by the PUCT, will be executed upon the effectiveness of the rate case and will have a four year term. Sharyland will continue to have operational control over the Company’s T&D assets and will remain primarily responsible for regulatory compliance and reporting requirements related to the Company’s T&D assets on behalf of and with cooperation with SDTS. Further, the Company will continue to be responsible for funding footprint project capital expenditures that are included in the capital expenditure budgets that Sharyland provides on a rolling three year basis, which will be subject to the Company’s approval. Sharyland will remain responsible for funding repair expenditures. The proposed lease payments will include both base and percentage rent as established by the PUCT. Base rent under the leases is a fixed amount. Percentage rent will be an annual amount equal to the percentage (percentage rent rate) of gross revenues collected by Sharyland during the year, subject to certain adjustments as described in the leases, in excess of applicable annual percentage rent breakpoints. The transmission lease, as proposed, will have one annual percentage rent breakpoint and one percentage rent rate. The distribution lease, as proposed, will have two annual percentage rent breakpoints and two percentage rent rates. Sharyland will owe percentage rent based on the percentage rent rate on the portion of its adjusted gross revenues in excess of the applicable annual percentage rent breakpoint. As proposed in the December Rate Case Filing, lease payments under the transmission lease will be updated upon effectiveness of the rate case to give effect to TCOS filings that have been approved by the PUCT after the 2015 test year. The base rent payments will also be updated through TCOS and DCRF filings with the PUCT. These updates will replace the current rent supplements and validation process in the Company’s existing lease structure. The rent rates that have been proposed in the December Rate Case Filing are based on the premise that the Company, as the owner of regulated T&D assets, should receive most of the regulated return on its invested capital, while leaving Sharyland with a portion of the return that gives it the opportunity to operate prudently and remain financially stable. The PUCT’s existing tariff construct does not contemplate the use of a lessor/lessee structure and therefore does not provide a mechanism for updating an asset company’s rates to account for load growth in its tenant’s distribution service territories. Accordingly, we and Sharyland have developed a proposed solution (Transition Payment Agreement) that is intended to allocate the growth in Sharyland’s distribution revenues as additional assets are placed in service after the 2015 test year between TDC, as the unregulated parent company of SDTS, and an unregulated parent company of Sharyland. The Transition Payment Agreement will provide the Company the opportunity to realize an additional portion of Sharyland’s revenue growth to mitigate the regulatory lag on the Company’s assets placed in service between rate cases, similar to the opportunity that integrated utilities enjoy. The Company expects the payments under the Transition Payment Agreement, which will be executed upon the conclusion of the rate case, to be based on a variety of factors, including Sharyland’s distribution revenue growth and the amount of distribution assets placed in service. Without the Transition Payment Agreement in place, the Company would be subject to considerable regulatory lag related to its distribution assets and, accordingly, the potential for reduced revenue related to the Company’s incremental distribution capital expenditures. The initial hearings for the rate case are currently scheduled for March 29 to April 7, 2017 with an anticipated conclusion of the rate case during the third quarter of 2017. Although there is a current timeline for the rate case and proposal for regulating the leases between SDTS and Sharyland, the ultimate timing and outcome of the rate case are uncertain. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 1 1 . Commitments and Contingencies SDTS and Sharyland filed an amended rate case application and rate case filing package with the PUCT on December 30, 2016. For further information regarding the rate case, see Note 10, Regulatory Matters In addition, from time to time, the Company is a party to various legal proceedings arising in the ordinary course of business. Although the Company cannot predict the outcome of any such legal proceedings, the Company does not believe the resolution of these proceedings, individually or in the aggregate, will have a material impact on the Company’s business, financial condition or results of operations, liquidity and cash flows. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Equity | 1 2 . Equity On January 12, 2015, InfraREIT, Inc. amended its charter to increase the number of authorized shares of common stock from 3,000 to 450,000,000. In addition, the par value of the Company’s common stock was reduced from $1 per share to $0.01 per share. Both the authorized number of shares of common stock and the par value were unaffected by the Merger or Reorganization. The Company and the Operating Partnership declared cash dividends on common stock and distributions on OP Units of $1.00, $1.075 and $0.31 per share during the years ended December 31, 2016, 2015 and 2014, respectively. The Company paid a total of $59.1 million and $61.6 million in dividends and distributions during the years ended December 31, 2016 and 2015, respectively. There were no dividends or distributions paid during the year ended December 31, 2014. For federal income tax purposes, the dividends declared in 2016, 2015 and 2014 were classified as ordinary income. The Company is required to distribute at least 90% of its taxable income (excluding net capital gains) to maintain its status as a REIT. Management believes that the Company has distributed at least 100% of its taxable income. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | 1 3 . Accumulated Other Comprehensive Loss There were no changes in accumulated other comprehensive loss for the years ended December 31, 2016 and 2015. Changes in accumulated other comprehensive loss for the year ended December 31, 2014 associated with the interest rate swap designated as a cash flow hedge were as follows: (In thousands) Accumulated Other Comprehensive Loss Attributable to InfraREIT, Inc. Accumulated Other Comprehensive Loss Attributable to Noncontrolling Interest Total Accumulated Other Comprehensive Loss Year Ended December 31, 2014 Other comprehensive loss before reclassifications $ (77 ) $ 28 $ (49 ) Amounts reclassified from accumulated other comprehensive loss 687 206 893 Net period other comprehensive loss $ 610 $ 234 $ 844 |
Noncontrolling Interest
Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2016 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | 1 4 . Noncontrolling Interest The Company presents as a noncontrolling interest the portion of any equity in entities that it controls and consolidates but does not own. Generally, Common OP Units of the Operating Partnership participate in net income allocations and distributions and entitle their holder to the right, subject to the terms set forth in the partnership agreement, to require the Operating Partnership to redeem all or a portion of the Common OP Units held by such limited partner. At the Company’s option, it may satisfy this redemption with cash or by exchanging shares of InfraREIT, Inc. common stock on a one-for-one basis. Prior to the cancellation of all outstanding Class A OP Units, these units also participated in net income allocations and distributions and had the same redemption rights. As of December 31, 2016 and 2015, there were a total of 16.9 million and 17.0 million OP Units, respectively, held by the limited partners of the Operating Partnership. On May 1, 2014, the limited partnership agreement of InfraREIT LP was amended in order to incorporate a long-term incentive plan and InfraREIT LP issued 11,264 related OP Units (pre-IPO LTIP Units) to independent non-voting members of the InfraREIT, L.L.C. board of directors as part of their compensation. During the years ended December 31, 2016 and 2015, an aggregate of 29,722 and 28,000 LTIP Units, respectively, were issued by the Operating Partnership to members of the Company’s board of directors. For additional information, refer to Note 17, Share-Based Compensation The Company follows the guidance issued by the FASB regarding the classification and measurement of redeemable securities. Accordingly, the Company has determined that the Common OP Units meet the requirements to be classified as permanent equity. The Company redeemed 186,496 Common OP Units with the issuance of 186,496 shares of common stock during the year ended December 31, 2016. During the year ended December 31, 2015, the Company did not redeem any OP Units other than, in connection with the Reorganization: (1) 1,551,878 Class A OP Units held by Hunt-InfraREIT, which were exchanged with InfraREIT, Inc. for 1,551,878 shares of common stock of InfraREIT, Inc. and (2) 6,242,999 Class A OP Units in exchange for the assignment of a promissory note in the principal amount of $66.5 million. The Operating Partnership did not redeem any OP Units during the year ended December 31, 2014. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 1 5 . Earnings Per Share Basic earnings per share is calculated by dividing net earnings after noncontrolling interest by the weighted average shares outstanding. Diluted earnings per share is calculated similarly, except that it includes the dilutive effect of the assumed redemption of OP Units for shares of common stock of InfraREIT, Inc. or common shares of InfraREIT, L.L.C., as applicable, if such redemption were dilutive. The redemption of OP Units would have been anti-dilutive during the years ended December 31, 2016, 2015 and 2014. Earnings per share are calculated as follows: Years Ended December 31, (In thousands, except per share data) 2016 2015 2014 Basic net income per share: Net income attributable to InfraREIT, Inc. $ 49,954 $ 13,267 $ 22,898 Weighted average common shares outstanding 43,668 42,983 35,053 Basic net income per share $ 1.14 $ 0.31 $ 0.65 Diluted net income per share: Net income attributable to InfraREIT, Inc. $ 49,954 $ 13,267 $ 22,898 Weighted average common shares outstanding 43,668 42,983 35,053 Redemption of Operating Partnership units — — — Weighted average dilutive shares outstanding 43,668 42,983 35,053 Diluted net income per share $ 1.14 $ 0.31 $ 0.65 Due to the anti-dilutive effect, the computation of diluted earnings per share does not reflect the following adjustments: Net income attributable to noncontrolling interest $ 19,347 $ 6,664 $ 6,882 Redemption of Operating Partnership units 16,968 16,232 10,578 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Leases | 1 6 . Leases The following table shows the composition of the Company’s lease revenue: Years Ended December 31, (In thousands) 2016 2015 2014 Base rent (straight-line) $ 145,030 $ 125,669 $ 106,746 Percentage rent 27,069 25,534 27,669 Total lease revenue $ 172,099 $ 151,203 $ 134,415 SDTS has entered into various leases with Sharyland for all the Company’s placed in service T&D assets. The master lease agreements, as amended, expire at various dates from December 31, 2017 through December 31, 2022. Each agreement includes annual base rent while all but one agreement includes additional percentage rent (based on an agreed upon percentage of the gross revenue of Sharyland, as defined in the lease agreements, in excess of annual specified breakpoints). The rate used for percentage rent for the reported time periods varies by lease and ranges from a high of 37% to a low of 23%. The percentage rent rate for 2017 through the expiration of the leases ranges from a 23% to 31%. Because an annual specified breakpoint must be met under the leases before the Company can recognize any percentage rent, the Company anticipates that revenue will grow over the year with little to no percentage rent recognized in the first and second quarters of each year and with the largest amounts recognized during the third and fourth quarters of each year. Future minimum rent revenue expected in accordance with these lease agreements is as follows for the years ending December 31: (In thousands) Total 2017 $ 163,057 2018 86,094 2019 84,163 2020 70,552 2021 8,528 Thereafter 4,413 Total $ 416,807 For information related to the Company’s proposed new leases, which, if approved by the PUCT will replace the Company’s five existing leases, see Note 10, Regulatory Matters |
Share Based Compensation
Share Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | 17 . Share-Based Compensation InfraREIT, Inc. 2015 Equity Incentive Plan The Company’s pre-IPO board of directors adopted the InfraREIT, Inc. 2015 Equity Incentive Plan (2015 Equity Incentive Plan) which permits the Company to provide equity based compensation to certain personnel who provide services to the Company, Hunt Manager or an affiliate of either, in the form of stock options, stock appreciation rights, dividend equivalent rights, restricted stock, stock units, performance based awards, unrestricted stock, LTIP Units and other equity based awards up to an aggregate of 375,000 shares. The 2015 Equity Incentive Plan provides, among other things, that no participant in the plan will be permitted to acquire, or will have any right to acquire, shares thereunder if such acquisition would be prohibited by the ownership limits contained in the Company’s charter or bylaws or would impair the Company’s status as a REIT. As of December 31, 2016, 296,986 shares were reserved for issuance under the 2015 Equity Incentive Plan. The Company currently utilizes the 2015 Equity Incentive Plan primarily to compensate the non-employee directors for their service on the Company’s board of directors. In January 2016, the Operating Partnership issued an aggregate of 29,722 LTIP Units to members of the Company’s board of directors with a grant date fair value of $18.58 per LTIP Unit and an aggregate fair value of $0.6 million with all LTIP Units fully vested in January 2017. In February 2015, an aggregate of 28,000 LTIP Units were issued by the Operating Partnership with a grant date fair value of $26.41 per share and an aggregate fair value of $0.7 million to members of the Company’s board of directors which fully vested in February 2016. As part of the Company’s board of directors’ quarterly compensation, each non-executive director can, subject to certain exceptions, elect to receive part of their compensation in InfraREIT common stock instead of cash with full vesting upon issuance. During 2016, certain directors elected to receive their compensation in InfraREIT common stock. In January 2016, 4,735 shares of common stock were issued to members of the board of directors with a grant date value of $18.58 per common share and an aggregate fair value of $0.1 million. In April 2016, 5,497 shares of common stock were issued to members of the board of directors with a grant date fair value of $16.81 per common share and an aggregate fair value of $0.1 million. In July 2016, 5,248 shares of common stock were issued to members of the board of directors with a grant date fair value of $17.58 per common share and an aggregate fair value of $0.1 million. In October 2016, 4,812 shares of common stock were issued to members of the board of directors with a grant date fair value of $17.84 per common share and an aggregate fair value of $0.1 million. The compensation expense, which represents the fair value of the stock measured at market price at the date of grant, is recognized on a straight-line basis over the vesting period. For the years ended December 31, 2016 and 2015, $1.0 million and $0.7 million was recognized as compensation expense related to these grants and is included in general and administrative expense on the Consolidated Statements of Operations. There was no unamortized compensation expense related to these grants at December 31, 2016. InfraREIT, Inc. Non-Qualified 2015 Employee Stock Purchase Plan The Company adopted the InfraREIT, Inc. Non-Qualified Employee Stock Purchase Plan (ESPP) that will allow employees of Hunt Manager or its affiliates whose principal duties include the management and operation of the Company’s business to purchase shares of the Company’s common stock at a discount. Pursuant to the management agreement, Hunt Manager is obligated to fund all the costs associated with the ESPP, including the funds necessary to purchase shares of the Company’s common stock in the open market pursuant to the plan. A total of 250,000 shares of common stock are reserved for sale and authorized for issuance under the ESPP. As of December 31, 2016, no shares have been purchased or offered for purchase under the ESPP. Other Stock-Based Compensation During May 2014, 11,264 pre-IPO LTIP Units were issued with an aggregate intrinsic value of $0.1 million with $0.1 million of compensation expense recognized in general and administrative expense during the year ended December 31, 2014. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | 18 . Supplemental Cash Flow Information Supplemental cash flow information and non-cash investing and financing activities are as follows: Years Ended December 31, (In thousands) 2016 2015 2014 Supplemental cash flow information Cash paid during the period for interest $ 33,972 $ 25,850 $ 29,981 Cash (received) paid during the period for taxes — (31 ) 75 Non-cash investing and financing activities Non-cash right of way additions to electric plant — — 337 Change in accrued additions to electric plant 4,113 6,942 20,633 Allowance for funds used during construction - debt 3,142 1,767 1,635 Net non-cash equity issuances related to the Merger and Reorganization — 97,193 — Net non-cash noncontrolling equity issuances related to the Merger and Reorganization — 119,607 — Redemption of operating partnership units for common stock 3,277 — — Non-cash noncontrolling interest equity issuances — 755 4,648 Dividends and distributions payable 15,161 13,634 14,130 |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | 19 . Quarterly Financial Information (Unaudited) Summarized unaudited consolidated quarterly information for the years ended December 31 follows: (In thousands, except per share data) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year 2016 Lease revenue $ 33,665 $ 33,785 $ 49,419 $ 55,230 $ 172,099 General and administrative expense (5,545 ) (4,980 ) (5,336 ) (5,991 ) (21,852 ) Depreciation (11,074 ) (11,410 ) (11,828 ) (12,392 ) (46,704 ) Interest expense, net (8,842 ) (9,055 ) (9,379 ) (9,644 ) (36,920 ) Other income 759 1,137 1,024 861 3,781 Income tax expense (186 ) (293 ) (299 ) (325 ) (1,103 ) Net income 8,777 9,184 23,601 27,739 69,301 Less: Net income attributable to noncontrolling interest 2,462 2,576 6,560 7,749 19,347 Net income attributable to InfraREIT, Inc. $ 6,315 $ 6,608 $ 17,041 $ 19,990 $ 49,954 Basic EPS $ 0.14 $ 0.15 $ 0.39 $ 0.46 $ 1.14 Diluted EPS $ 0.14 $ 0.15 $ 0.39 $ 0.46 $ 1.14 2015 Lease revenue $ 29,372 $ 29,458 $ 41,452 $ 50,921 $ 151,203 General and administrative expense (48,733 ) (4,728 ) (5,504 ) (5,641 ) (64,606 ) Depreciation (9,508 ) (9,671 ) (10,259 ) (10,773 ) (40,211 ) Interest expense, net (7,422 ) (6,939 ) (6,723 ) (7,470 ) (28,554 ) Other income 626 847 707 868 3,048 Income tax expense (208 ) (124 ) (243 ) (374 ) (949 ) Net (loss) income (35,873 ) 8,843 19,430 27,531 19,931 Less: Net (loss) income attributable to noncontrolling interest (9,000 ) 2,481 5,458 7,725 6,664 Net (loss) income attributable to InfraREIT, Inc. $ (26,873 ) $ 6,362 $ 13,972 $ 19,806 $ 13,267 Basic EPS $ (0.65 ) $ 0.15 $ 0.32 $ 0.45 $ 0.31 Diluted EPS $ (0.65 ) $ 0.15 $ 0.32 $ 0.45 $ 0.31 (1) Basic and diluted net income per common share are computed independently for each quarter and full year based on the respective average number of common shares outstanding; therefore, the sum of the quarterly net income per common share data may not equal the net income per common share for the year. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 2 0 . Subsequent Events On January 3, 2017, the Company issued an aggregate of 31,633 LTIP Units to members of the Company’s board of directors with a grant date fair value of $18.02 per LTIP Unit and a fair value of $0.6 million. The LTIP Units are scheduled to vest in January 2018, subject to continued service. On February 27, 2017, the Company’s board of directors declared a quarterly dividend of $0.25 per share of common stock, or $1.00 per share on an annualized basis, payable on April 20, 2017 to holders of record as of March 31, 2017. The Company’s board of directors also authorized the Operating Partnership to make a distribution of $0.25 per OP Unit to the partners in the Operating Partnership, which includes affiliates of Hunt. |
Schedule III _ Electric Plant a
Schedule III – Electric Plant and Accumulated Depreciation | 12 Months Ended |
Dec. 31, 2016 | |
Real Estate And Accumulated Depreciation Disclosure [Abstract] | |
Schedule III – Electric Plant and Accumulated Depreciation | InfraREIT, Inc. SCHEDULE III – ELECTRIC PLANT AND ACCUMULATED DEPRECIATION DECEMBER 31, 2016 (In thousands) Description (1) Encumbrances Initial Cost to Company (2) Cost Subsequent to Acquisition Gross Amount Carried at Period Close (3) Accumulated Depreciation Date of Construction (4) Date Acquired Depreciation Life in Latest Income Statements is Computed (5) Electric Plant Improvements Carrying Cost Electric Plant Total S/B/C assets $ 391,736 $ 901,636 $ — $ — $ 901,636 $ (134,121 ) (4) (4) (5) McAllen assets 67,242 157,124 — — 157,124 (25,379 ) (4) (4) (5) CREZ assets 329,680 685,954 — — 685,954 (40,023 ) (4) (4) (5) Stanton Transmission Loop assets 16,578 92,318 — — 92,318 (59,837 ) (4) (4) (5) ERCOT Transmission assets 32,230 64,928 — — 64,928 (1,780 ) (4) (4) (5) (1) Asset descriptions correspond to asset groups under individual leases. (2) Because the Company’s assets consist entirely of electric plant assets, which are regulated by the PUCT, electric plant is stated at original cost, which includes cost of contracted services, direct labor, materials, acquisition adjustments, capitalized interest and overhead items. (3) See reconciliation on next page. (4) Because additions and improvements to the T&D assets are ongoing, construction and acquisition dates are not applicable. (5) Provision for depreciation of electric plant is computed using straight-lines rates as follows: Transmission plant 1.69% - 3.15% Distribution plant 1.74% - 5.96% General plant 0.80% - 5.12% InfraREIT, Inc. SCHEDULE III – ELECTRIC PLANT AND ACCUMULATED DEPRECIATION FIXED ASSET RECONCILATION (In thousands) December 31, 2016 2015 Electric plant Beginning balance $ 1,675,295 $ 1,447,247 Additions 239,154 235,263 Retirements (12,489 ) (7,215 ) (1) Ending balance 1,901,960 1,675,295 Accumulated depreciation Beginning balance 240,764 220,101 Depreciation expense 46,704 40,211 Retirements (12,489 ) (7,215 ) (1) Cost of removal (13,839 ) (12,333 ) Ending balance 261,140 240,764 Electric plant, net $ 1,640,820 $ 1,434,531 (1) Retirements are shown net of the accumulated depreciation related to the assets that were classified as electric plant held for future use and placed in service as transmission assets during August 2015. |
Description of Business and S29
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business InfraREIT, Inc. is a Maryland corporation and the surviving corporation of a merger (Merger) with InfraREIT, L.L.C., a Delaware limited liability company, completed on February 4, 2015 in connection with the initial public offering (IPO) of InfraREIT, Inc. and related transactions effected during the first quarter of 2015 (collectively, the Reorganization). As used in these financial statements, unless the context requires otherwise or except as otherwise noted, the words “Company” and “InfraREIT” refer to InfraREIT, L.L.C., before giving effect to the Merger, and InfraREIT, Inc., after giving effect to the Merger, as the context requires, and also refer to the registrant’s subsidiaries, including InfraREIT Partners, LP (Operating Partnership or InfraREIT LP), a Delaware limited partnership, of which InfraREIT, Inc. is the general partner. The Merger was accounted for as a reverse acquisition, which means for accounting purposes the Company treated the assets and liabilities of InfraREIT, Inc. as assumed and incorporated with the assets and liabilities of InfraREIT, L.L.C. InfraREIT, Inc.’s operating results before the Merger primarily reflected costs related to obtaining a private letter ruling from the Internal Revenue Service and accounting services. The main assets and liabilities assumed were marketable securities of $1.1 million and a note payable of $1.0 million. The marketable securities were sold during February 2015 for $1.1 million resulting in a realized gain of $0.1 million which was recorded in other income (expense), net in the Consolidated Statements of Operations. Additionally, the note payable and associated interest were paid in full in February 2015. As a result, these financial statements present the operating results of InfraREIT, L.L.C. for years ended December 31, 2014 and 2013 and its 2015 results through the effectiveness of the Merger along with the operations of InfraREIT, Inc. thereafter. The Company has elected to be taxed as a real estate investment trust (REIT) for federal income tax purposes. The Company is externally managed and advised by Hunt Utility Services, LLC (Hunt Manager), a Delaware limited liability company. Hunt Manager is responsible for managing the Company’s day-to-day affairs, subject to the oversight of the Company’s board of directors. All of the Company’s officers, including the Company’s President and Chief Executive Officer, David A. Campbell, are employees of Hunt Manager. Mr. Campbell also serves as President and Chief Executive Officer of Sharyland Utilities, L.P. (Sharyland or tenant), a Texas-based utility and the Company’s sole tenant. The Company holds 72.2% of the outstanding partnership units (OP Units) in the Operating Partnership as of December 31, 2016. The Company includes the accounts of the Operating Partnership and its subsidiaries in the consolidated financial statements. Hunt Consolidated, Inc. (HCI) affiliates, current or former employees and members of the Company’s board of directors hold the other 27.8% of the outstanding OP Units as of December 31, 2016. Sharyland Distribution & Transmission Services, L.L.C. (SDTS) is the owner of rate-regulated electric transmission and distribution assets (T&D assets) located in the Texas Panhandle near Amarillo (CREZ assets), the Permian Basin in and around Stanton, Central Texas around Brady, Northeast Texas in and around Celeste (S/B/C assets) and South Texas near McAllen (McAllen assets). Previously, SDTS held some of its assets through its former wholly owned subsidiaries, SDTS FERC, L.L.C. (SDTS FERC) and Sharyland Projects, L.L.C. (SPLLC). However, in June 2015, SDTS FERC was merged with and into SDTS with SDTS as the surviving entity, and in December 2015, SPLLC was merged with and into SDTS with SDTS as the surviving entity (SDTS Merger). The T&D assets include over 54,000 electricity delivery points, approximately 815 circuit miles of transmission lines, approximately 40,500 circuit miles of distribution lines, 57 substations and a 300 megawatt high-voltage direct current interconnection between Texas and Mexico (Railroad DC Tie). SDTS leases all its T&D assets to Sharyland under several lease agreements, which operates and maintains the T&D assets. SDTS and Sharyland are each subject to regulation as an electric utility by the Public Utility Commission of Texas (PUCT). |
Initial Public Offering and Reorganization | Initial Public Offering and Reorganization InfraREIT, Inc. completed its IPO on February 4, 2015, issuing 23,000,000 shares of common stock at a price of $23.00 per share, resulting in gross proceeds of $529.0 million. Immediately after the closing of the IPO, InfraREIT, Inc. completed the Merger, with InfraREIT, L.L.C. merging with and into InfraREIT, Inc., and InfraREIT, Inc. as the surviving entity and general partner of the Operating Partnership. InfraREIT, Inc. used $172.4 million of the net proceeds from the IPO to fund the cash portion of the consideration issued in the Merger, as described in greater detail below. InfraREIT, Inc. contributed the remaining $323.2 million to the Operating Partnership in exchange for common OP Units (Common OP Units). The Operating Partnership used the net proceeds from the IPO that it received from InfraREIT, Inc.: • to repay an aggregate of $1.0 million of indebtedness to HCI; • to repay an aggregate of $72.0 million of indebtedness outstanding under the Operating Partnership’s revolving credit facility and $150.0 million of indebtedness outstanding under SDTS’s revolving credit facility; • to pay offering expenses (other than the underwriting discounts and commissions and the underwriter structuring fee) of $6.3 million; and • for general corporate purposes. The following bullets describe the Merger and related Reorganization that were effected in the first quarter of 2015. • On January 29, 2015, the Operating Partnership effected a reverse unit split whereby each holder of OP Units received 0.938550 OP Units of the same class in exchange for each such unit it held immediately prior to such time, which is referred to as the reverse unit split. Also, on January 29, 2015, InfraREIT, L.L.C. effected a reverse share split whereby each holder of shares received 0.938550 shares of the same class in exchange for each such share it held immediately prior to such time, which is referred to as the reverse share split. All references to unit, share, per unit and per share amounts in these consolidated financial statements and related disclosures have been adjusted to reflect the reverse share split and reverse unit split for all periods presented. • On January 29, 2015, InfraREIT, Inc. issued 1,700,000 shares of common stock to Hunt-InfraREIT, L.L.C. (Hunt-InfraREIT) as a non-cash reorganization advisory fee in accordance with a structuring fee agreement, resulting in the recognition of a $44.9 million non-cash expense in the first quarter of 2015. • On February 4, 2015, the Operating Partnership issued 1,700,000 OP Units to InfraREIT, Inc. in connection with the structuring fee issuance of 1,700,000 shares of InfraREIT, Inc. common stock described immediately above. • On February 4, 2015, the Operating Partnership issued an aggregate of 28,000 of its profit interest OP Units (LTIP Units) to members of InfraREIT’s board of directors. • On February 4, 2015, the Operating Partnership issued 983,418 Common OP Units to Hunt-InfraREIT in settlement of the Operating Partnership’s obligation to issue OP Units to Hunt-InfraREIT related to the competitive renewable energy zone (CREZ) project. • On February 4, 2015, the Operating Partnership issued Hunt-InfraREIT 1,167,287 Common OP Units as an accelerated payment of a portion of the carried interest agreed to in 2010 in connection with the organization of InfraREIT, L.L.C. To effect the shift in ownership from the pre-IPO investors to Hunt-InfraREIT, an equal number of OP Units held by InfraREIT, L.L.C. in the Operating Partnership were canceled at the same time. • On February 4, 2015, as a result of the Merger, (1) holders of 8,000,000 common shares of InfraREIT, L.L.C. received $21.551 per common share, which was equal to the IPO price less the underwriting discounts and commissions and an underwriting structuring fee, (2) holders of the remaining 19,617,755 common shares of InfraREIT, L.L.C. received 19,617,755 shares of InfraREIT, Inc. Class A common stock and (3) holders of 25,145 Class C shares of InfraREIT, L.L.C. received 25,145 shares of InfraREIT, Inc. Class C common stock. • The pre-IPO investors received shares of InfraREIT, Inc. Class A common stock or Class C common stock in the Merger, and certain pre-IPO investors also received cash for a portion of their common shares. • On February 4, 2015, InfraREIT, Inc. contributed $323.2 million to the Operating Partnership in exchange for 15,000,000 Common OP Units. • On February 4, 2015, InfraREIT, Inc. issued 1,551,878 shares of common stock to Hunt-InfraREIT in exchange for 1,551,878 OP Units tendered for redemption by Hunt-InfraREIT in accordance with a redemption agreement. • On February 4, 2015, concurrently with the Merger, InfraREIT, Inc. purchased 6,242,999 common shares in consideration for the issuance of a promissory note to Westwood Trust, as trustee of a trust for the benefit of a charitable beneficiary, in the principal amount of $66.5 million. • Westwood Trust immediately transferred the promissory note to MC Transmission Holdings, Inc. (MC Transmission), and, immediately following receipt of the promissory note, MC Transmission purchased 3,325,874 Common OP Units from the Operating Partnership in consideration for the assignment of the promissory note. The promissory note was then transferred to InfraREIT, Inc. in exchange for the redemption of 6,242,999 OP Units held by InfraREIT, Inc. and the subsequent cancellation of such promissory note, resulting in no cash consideration being paid or received pursuant to the purchase from Westwood Trust or the sale of Common OP Units to MC Transmission. • On March 9, 2015, the Operating Partnership issued 2,329,283 Common OP Units to Hunt-InfraREIT, and InfraREIT, Inc. canceled an equal number of shares of Class A common stock and Class C common stock. Each remaining share of Class A common stock and Class C common stock then converted to common stock on a one-for-one basis. This issuance settled InfraREIT, L.L.C.’s pre-IPO investors’ carried interest obligation agreed to by Hunt-InfraREIT under the investment documents entered into by the parties in 2010. • On March 9, 2015, the 11,264 long-term incentive plan units issued to two of InfraREIT, L.L.C.’s non-voting directors in May 2014 converted on a one-to-one basis to Common OP Units. |
Limited Partnership Agreement | Limited Partnership Agreement In connection with the Reorganization, the Company adopted a Second Amended and Restated Limited Partnership Agreement which became effective with the closing of the IPO. Upon completion of the IPO, the Operating Partnership had five types of OP Units outstanding: Common OP Units, Class A OP Units, Class B OP Units, Class C OP Units and LTIP Units. On March 9, 2015, the Operating Partnership issued Common OP Units in exchange for outstanding Class A OP Units and Class C OP Units. Such Common OP Units were allocated among the holders of Class A OP Units and Class C OP Units, and the Class A OP Units, Class B OP Units and Class C OP Units were canceled. Following such allocation, the Company adopted a Third Amended and Restated Limited Partnership Agreement that eliminated the provisions related to the Reorganization and the description of the Class A OP Units, Class B OP Units and Class C OP Units; however, it continues to allow amendments to authorize and issue additional classes of OP Units in the future. |
Principles of Consolidation and Presentation | Principles of Consolidation and Presentation The consolidated financial statements include the Company’s accounts and the accounts of all other entities in which the Company has a controlling financial interest with noncontrolling interest of consolidated subsidiaries reported separately. All significant intercompany balances and transactions have been eliminated. SDTS maintains (and prior to their merger with and into SDTS, SDTS FERC and SPLLC also maintained) accounting records in accordance with the uniform system of accounts, as prescribed by the Federal Energy Regulatory Commission (FERC). In accordance with the applicable consolidation guidance, the Company’s consolidated financial statements reflect the effects of the different rate making principles mandated by the FERC and the PUCT which regulate its subsidiaries’ operations. The accompanying historical consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The historical financial information is not necessarily indicative of the Company’s future results of operations, financial position and cash flows. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Regulation | Regulation As the owner of rate-regulated T&D assets, regulatory principles applicable to the utility industry also apply to SDTS (and previously applied to its former subsidiaries). The financial statements reflect regulatory assets and liabilities under cost based rate regulation in accordance with accounting standards related to the effect of certain types of regulation. Regulatory decisions can have an impact on the recovery of costs, the rate earned on invested capital and the timing and amount of assets to be recovered by rates. See Note 5, Other Assets SDTS capitalizes allowance for funds used during construction (AFUDC) during the construction of its T&D assets, and SDTS’s lease agreements with Sharyland rely on FERC definitions and accepted standards regarding capitalization of expense to define key terms in the lease such as footprint projects, which are the expenditures SDTS is obligated to fund pursuant to the leases. The amounts funded for these footprint projects include allocations of Sharyland employees’ time and overhead allocations consistent with FERC policies and U.S. GAAP. The leases define “footprint projects” to be transmission or distribution projects primarily situated within the Company’s distribution service territory, or that physically hang from the Company’s existing transmission assets or that are physically located within one of its substations. Sharyland cannot be removed as lessee without prior approval from the PUCT. SDTS transacts with its tenant through several lease arrangements covering all the T&D assets. These lease agreements include provisions for additions and retirements of the T&D assets in the form of new construction or other capitalized projects. See Note 10, Regulatory Matters |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term, highly liquid investments with original maturities of three months or less to be cash equivalents. The Company’s account balances at one or more institutions periodically exceed the Federal Deposit Insurance Corporation (FDIC) insurance coverage and, as a result, there could be a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company has not experienced any losses and believes that the risk is not significant. |
Restricted Cash | Restricted Cash Restricted cash represents the principal and interest payable for two consecutive periods associated with the $25.0 million senior secured notes described in Note 7, Long-Term Debt |
Concentration of Credit Risk | Concentration of Credit Risk Sharyland is the Company’s sole tenant and all the Company’s revenue is driven by the leases with Sharyland. |
Inventory | Inventory Inventory consists primarily of transmission parts and materials used in the construction of electric plant. Inventory is valued at average cost when it is acquired and used. |
Assets Held for Sale | Assets Held for Sale The Company records assets held for sale when certain criteria have been met as specified by Accounting Standard Codification (ASC) Topic 360, Property, Plant and Equipment |
Electric Plant, net | Electric Plant, net Electric plant equipment is stated at the original cost of acquisition or construction, which includes the cost of contracted services, direct labor, materials, acquisition adjustments and overhead items. In accordance with the FERC uniform system of accounts guidance, SDTS recognizes, as a cost to construction work in progress (CWIP), AFUDC on other funds classified as other income (expense), net and AFUDC on borrowed funds classified as a reduction of the interest expense, net on the Consolidated Statements of Operations. The AFUDC blended rate utilized was 6.7%, 6.6% and 4.1% for the years ended December 31, 2016, 2015 and 2014, respectively. Depreciation of property, plant and equipment is calculated on a straight-line basis over the estimated service lives of the properties based on depreciation rates approved by the PUCT. Depreciation rates include plant removal costs as a component of depreciation expense, consistent with regulatory treatment. Actual removal costs incurred are charged to accumulated depreciation. When accrued removal costs exceed incurred removal costs, the difference is reclassified as a regulatory liability to retire assets in the future. The regulatory liability will be relieved as cost of removal charges are incurred upon asset retirement. Repairs are the responsibility of Sharyland as the lessee under the lease agreements. Betterments and improvements generally are the responsibility of SDTS and are capitalized. Provision for depreciation of electric plant is computed using composite straight-line rates as follows: Years Ended December 31, 2016 2015 2014 Transmission plant 1.69% - 1.69% - 1.69% - 3.15% Distribution plant 1.74% - 5.96% 1.74% - 5.96% 1.74% - 5.96% General plant 0.80% - 5.12% 0.80% - 5.12% 0.80% - 5.12% |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates impairment of its long-lived assets annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized only if the carrying amount of a long-lived asset is not recoverable through expected future cash flows. Regulatory assets are charged to expense in the period in which they are no longer probable of future recovery. |
Goodwill | Goodwill Goodwill represents the excess of costs of an acquired business over the fair value of the assets acquired, less liabilities assumed. Goodwill is not amortized and is tested for impairment annually or more frequently if events or changes in circumstances arise. Accounting Standard Update (ASU) 2011-08, Testing of Goodwill for Impairment The Company’s annual goodwill impairment analysis, which was performed qualitatively during the fourth quarter of 2016, did not result in an impairment charge. As of December 31, 2016 and 2015, $138.4 million was recorded as goodwill on the Consolidated Balance Sheets. |
Investments | Investments An investment is considered impaired if the fair value of the investment is less than its cost. Generally, an impairment is considered other-than-temporary unless (1) the Company has the ability and intent to hold an investment for a reasonable period of time sufficient for an anticipated recovery of fair value up to (or beyond) the cost of the investment; and (2) evidence indicating that the cost of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. If impairment is determined to be other than temporary, then an impairment loss is recognized equal to the difference between the investment’s cost and its fair value. |
Deferred Financing Costs | Deferred Financing Costs Amortization of deferred financing costs associated with the issuance of the $25.0 million senior secured notes and the revolving credit facilities is computed using the straight-line method over the life of the loan which approximates the effective interest method. Amortization of deferred financing costs associated with the Company’s regulated subsidiaries is computed using the straight-line method over the life of the loan in accordance with applicable regulatory guidance. |
Derivative Instruments | Derivative Instruments The Company uses derivatives from time to time to hedge against changes in cash flows related to interest rate risk (cash flow hedging instrument). ASC Topic 815, Derivatives and Hedging Unrealized gains and losses on the effective cash flow hedging instrument are recorded as components of accumulated other comprehensive income. Realized gains and losses on the cash flow hedging instrument are recorded as adjustments to interest expense. Settlements of derivatives are included within operating activities on the Consolidated Statements of Cash Flows. Any ineffectiveness in the cash flow hedging instrument is recorded as an adjustment to interest expense in the current period. |
Income Taxes | Income Taxes InfraREIT, L.L.C. elected to be treated as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with its taxable year ended December 31, 2010, and InfraREIT, Inc. elected to be treated as a REIT commencing with its taxable year ended December 31, 2015. As a result, the Company generally will not be subject to federal income tax on its taxable income that is distributed to its stockholders. A REIT is subject to a number of other organizational and operational requirements, including a requirement that it currently distribute at least 90% of its annual taxable income (with certain adjustments). The Company’s policy is to distribute at least 100% of its taxable income. Accordingly, there is no provision for federal income taxes in the accompanying consolidated financial statements. Even if the Company maintains its qualification for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, including excise taxes, and federal income taxes on any undistributed income. At December 31, 2015, the Company had net operating loss carryforwards for federal income tax purposes of $13.5 million. No net operating losses were used for the year ended December 31, 2016. The estimated net operating loss carryforward for federal tax purposes was $79.4 million at December 31, 2016 and will expire between 2026 and 2036. The net operating loss carryforwards for alternative minimum tax (AMT) are generally limited to offsetting 90% of the alternative minimum taxable income (AMTI) for a given year. The Company recognizes the impact of tax return positions that are more-likely-than-not to be sustained upon audit. Significant judgment is required to evaluate uncertain tax positions. The evaluation of uncertain tax positions is based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of audit issues. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows: Years Ended December 31, (In thousands) 2016 2015 Balance at January 1 $ 2,924 $ 2,135 Additions based on tax positions related to the current year 903 789 Balance at December 31 $ 3,827 $ 2,924 The balance of unrecognized tax benefits relates to state taxes, all of which would impact the effective tax rate if recognized. It is reasonably possible that the amount of the Company’s unrecognized tax benefits will decrease in the next twelve months either because the Company’s position is approved through a ruling by the taxing jurisdiction or the Company agrees to a settlement. At this time, an estimate of the range of the reasonably possible change cannot be made. The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense in the Consolidated Statements of Operations. During the years ended December 31, 2016, 2015 and 2014, the Company recognized interest and penalties of $0.2 million, $0.2 million and $0.1 million, respectively. The Company had accrued interest and penalties of $0.6 million and $0.4 million at December 31, 2016 and 2015, respectively. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2012. |
Revenue Recognition | Revenue Recognition The Company, through its subsidiaries, is the owner of the T&D assets and recognizes lease revenue over the term of lease agreements with Sharyland. The Company’s lease revenue includes annual payments and additional rents based upon a percentage of revenue earned by Sharyland on the leased assets in excess of annual specified breakpoints. In accordance with the lease agreements, Sharyland, the lessee and operator of the T&D assets, is responsible for the maintenance and operation of the T&D assets and primarily responsible for compliance with all regulatory requirements of the PUCT, the FERC or any other regulatory entity with jurisdiction over the T&D assets on our behalf and with our cooperation. Each of the lease agreements with Sharyland is a net lease that obligates the lessee to pay all property related expenses, including maintenance, repairs, taxes and insurance, and to comply with the terms of the SDTS secured credit facilities and note purchase agreements. The Company recognizes base rent under these leases on a straight-line basis over the applicable lease term. The current lease agreements provide for periodic supplemental adjustments of base rent based upon capital expenditures made by SDTS. The Company recognizes supplemental adjustments of base rent as a modification under these leases on a prospective straight-line basis over the applicable lease term. The Company recognizes percentage rent under these leases once the revenue earned by Sharyland on the leased assets exceeds the annual specified breakpoints. See Note 10, Regulatory Matters |
Asset Retirement Obligations | Asset Retirement Obligations The Company has identified, but not recognized, asset retirement obligation liabilities related to the T&D assets as a result of certain easements on property on which the Company has assets. Generally, such easements are perpetual and require only the retirement and removal of the assets upon cessation of the property’s use. Management has not estimated and recorded a retirement liability for such easements because the Company plans to use the facilities indefinitely. |
Interest Expense, net | Interest Expense, net The Company’s interest expense, net primarily consists of interest expense from the senior notes and credit facilities, see Note 6, Borrowings Under Credit Facilities Long-Term Debt |
Other Income, net | Other Income, net AFUDC on other funds of $3.7 million, $3.0 million and $1.1 million was recognized in other income, net during the years ended December 31, 2016, 2015 and 2014, respectively. |
Comprehensive Income | Comprehensive Income Comprehensive income includes net income and other comprehensive income, which consists of unrealized gains and losses on derivative financial instruments. The Company records deferred hedge gains and losses on its derivative financial instruments that qualify as cash flow hedging instruments as other comprehensive income. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurements and Disclosures Level 1 — Quoted prices in active markets for identical assets and liabilities. Level 2 — Valuations based on one or more quoted prices in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs that are observable other than quoted prices for the asset or the liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
Recent Accounting Guidance | Recent Accounting Guidance Recently Adopted Accounting Guidance In February 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-02, Consolidation (Topic 810) – Amendments to the Consolidation Analysis In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustment Recent Accounting Guidance Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Clarification of Certain Cash Receipts and Cash Payments . The objective of ASU 2016-15 is to eliminate the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on eight specific cash flow issues. ASU 2016-15 is effective for periods beginning after December 15, 2017 with early adoption permitted. The new standard should be applied retrospectively to all periods presented, unless deemed impracticable, in which case, prospective application is permitted. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its cash flows. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (A Consensus of the FASB Emerging Issues Task Force) In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers |
Reportable Segments | Reportable Segments U.S. GAAP establishes standards for reporting financial and descriptive information about a company’s reportable segments. Management has determined that the Company has one reportable segment, with activities related to ownership and leasing of rate-regulated T&D assets. |
Description of Business and S30
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Provision for Depreciation of Electric Plant | Provision for depreciation of electric plant is computed using composite straight-line rates as follows: Years Ended December 31, 2016 2015 2014 Transmission plant 1.69% - 1.69% - 1.69% - 3.15% Distribution plant 1.74% - 5.96% 1.74% - 5.96% 1.74% - 5.96% General plant 0.80% - 5.12% 0.80% - 5.12% 0.80% - 5.12% |
Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits follows: Years Ended December 31, (In thousands) 2016 2015 Balance at January 1 $ 2,924 $ 2,135 Additions based on tax positions related to the current year 903 789 Balance at December 31 $ 3,827 $ 2,924 |
Electric Plant and Depreciati31
Electric Plant and Depreciation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Public Utilities Property Plant And Equipment [Abstract] | |
Schedule of Major Classes of Electric Plant | The major classes of electric plant are as follows: For the Years Ended December 31, (In thousands) 2016 2015 Electric plant: Transmission plant $ 1,203,164 $ 1,080,050 Distribution plant 575,648 457,988 General plant 15,959 15,655 Total plant in service 1,794,771 1,553,693 CWIP 107,189 121,602 Total electric plant 1,901,960 1,675,295 Accumulated depreciation (261,140 ) (240,764 ) Electric plant, net $ 1,640,820 $ 1,434,531 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Summary of Other Assets | Other assets are as follows: December 31, 2016 December 31, 2015 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Deferred financing costs on undrawn revolver $ 967 $ (397 ) $ 570 $ 967 $ (204 ) $ 763 Other regulatory assets: Deferred financing costs 27,761 (16,997 ) 10,764 27,112 (13,208 ) 13,904 Deferred costs recoverable in future years 23,793 — 23,793 23,793 — 23,793 Other regulatory assets, net 51,554 (16,997 ) 34,557 50,905 (13,208 ) 37,697 Investments 2,519 — 2,519 2,519 — 2,519 Other assets $ 55,040 $ (17,394 ) $ 37,646 $ 54,391 $ (13,412 ) $ 40,979 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Instruments [Abstract] | |
Components of Long-Term Debt | Long-term debt consisted of the following: December 31, 2016 December 31, 2015 (In thousands) Maturity Date Amount Outstanding Interest Rate Amount Outstanding Interest Rate TDC Senior secured notes - $25.0 million December 30, 2020 $ 17,500 8.50% $ 18,750 8.50% SDTS Senior secured notes - $60.0 million June 20, 2018 60,000 5.04% 60,000 5.04% Senior secured notes - $400.0 million December 3, 2025 400,000 3.86% 400,000 3.86% Senior secured notes - $100.0 million January 14, 2026 100,000 3.86% — N/A Senior secured notes - $53.5 million December 30, 2029 42,600 7.25% 44,512 7.25% Senior secured notes - $110.0 million September 30, 2030 97,366 6.47% 101,627 6.47% Total SDTS debt 699,966 606,139 Total long-term debt 717,466 624,889 Less unamortized deferred financing costs (129 ) (161 ) Total long-term debt, less deferred financing costs 717,337 624,728 Less current portion of long-term debt (7,849 ) (7,423 ) Debt classified as long-term debt, less deferred financing costs $ 709,488 $ 617,305 |
Schedule of Future Maturities of Long-Term Debt | Future maturities of long-term debt are as follows for the years ending December 31: (In thousands) Total 2017 $ 7,849 2018 68,305 2019 8,792 2020 21,813 2021 8,621 Thereafter 602,086 Total $ 717,466 |
Fair Value of Financial Instr34
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments Measured at Fair Value | Financial instruments, measured at fair value, by level within the fair value hierarchy were as follows: Carrying Fair Value (In thousands) Value Level 1 Level 2 Level 3 December 31, 2016 Long-term debt $ 717,466 $ — $ 758,415 $ — December 31, 2015 Long-term debt $ 624,889 $ — $ 657,270 $ — |
Accumulated Other Comprehensi35
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Changes in Accumulated Other Comprehensive Loss Associated with the Interest Rate Swap Designated as Cash Flow Hedge | There were no changes in accumulated other comprehensive loss for the years ended December 31, 2016 and 2015. Changes in accumulated other comprehensive loss for the year ended December 31, 2014 associated with the interest rate swap designated as a cash flow hedge were as follows: (In thousands) Accumulated Other Comprehensive Loss Attributable to InfraREIT, Inc. Accumulated Other Comprehensive Loss Attributable to Noncontrolling Interest Total Accumulated Other Comprehensive Loss Year Ended December 31, 2014 Other comprehensive loss before reclassifications $ (77 ) $ 28 $ (49 ) Amounts reclassified from accumulated other comprehensive loss 687 206 893 Net period other comprehensive loss $ 610 $ 234 $ 844 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Computation of Earnings Per Share | Earnings per share are calculated as follows: Years Ended December 31, (In thousands, except per share data) 2016 2015 2014 Basic net income per share: Net income attributable to InfraREIT, Inc. $ 49,954 $ 13,267 $ 22,898 Weighted average common shares outstanding 43,668 42,983 35,053 Basic net income per share $ 1.14 $ 0.31 $ 0.65 Diluted net income per share: Net income attributable to InfraREIT, Inc. $ 49,954 $ 13,267 $ 22,898 Weighted average common shares outstanding 43,668 42,983 35,053 Redemption of Operating Partnership units — — — Weighted average dilutive shares outstanding 43,668 42,983 35,053 Diluted net income per share $ 1.14 $ 0.31 $ 0.65 Due to the anti-dilutive effect, the computation of diluted earnings per share does not reflect the following adjustments: Net income attributable to noncontrolling interest $ 19,347 $ 6,664 $ 6,882 Redemption of Operating Partnership units 16,968 16,232 10,578 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Schedule of Composition of Lease Revenue | The following table shows the composition of the Company’s lease revenue: Years Ended December 31, (In thousands) 2016 2015 2014 Base rent (straight-line) $ 145,030 $ 125,669 $ 106,746 Percentage rent 27,069 25,534 27,669 Total lease revenue $ 172,099 $ 151,203 $ 134,415 |
Schedule of Future Minimum Rent Revenue Expected in Accordance with Lease Agreement | Future minimum rent revenue expected in accordance with these lease agreements is as follows for the years ending December 31: (In thousands) Total 2017 $ 163,057 2018 86,094 2019 84,163 2020 70,552 2021 8,528 Thereafter 4,413 Total $ 416,807 |
Supplemental Cash Flow Inform38
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information and Non-cash Investing and Financing Activities | Supplemental cash flow information and non-cash investing and financing activities are as follows: Years Ended December 31, (In thousands) 2016 2015 2014 Supplemental cash flow information Cash paid during the period for interest $ 33,972 $ 25,850 $ 29,981 Cash (received) paid during the period for taxes — (31 ) 75 Non-cash investing and financing activities Non-cash right of way additions to electric plant — — 337 Change in accrued additions to electric plant 4,113 6,942 20,633 Allowance for funds used during construction - debt 3,142 1,767 1,635 Net non-cash equity issuances related to the Merger and Reorganization — 97,193 — Net non-cash noncontrolling equity issuances related to the Merger and Reorganization — 119,607 — Redemption of operating partnership units for common stock 3,277 — — Non-cash noncontrolling interest equity issuances — 755 4,648 Dividends and distributions payable 15,161 13,634 14,130 |
Quarterly Financial Informati39
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summarized Unaudited Consolidated Quarterly Information | Summarized unaudited consolidated quarterly information for the years ended December 31 follows: (In thousands, except per share data) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year 2016 Lease revenue $ 33,665 $ 33,785 $ 49,419 $ 55,230 $ 172,099 General and administrative expense (5,545 ) (4,980 ) (5,336 ) (5,991 ) (21,852 ) Depreciation (11,074 ) (11,410 ) (11,828 ) (12,392 ) (46,704 ) Interest expense, net (8,842 ) (9,055 ) (9,379 ) (9,644 ) (36,920 ) Other income 759 1,137 1,024 861 3,781 Income tax expense (186 ) (293 ) (299 ) (325 ) (1,103 ) Net income 8,777 9,184 23,601 27,739 69,301 Less: Net income attributable to noncontrolling interest 2,462 2,576 6,560 7,749 19,347 Net income attributable to InfraREIT, Inc. $ 6,315 $ 6,608 $ 17,041 $ 19,990 $ 49,954 Basic EPS $ 0.14 $ 0.15 $ 0.39 $ 0.46 $ 1.14 Diluted EPS $ 0.14 $ 0.15 $ 0.39 $ 0.46 $ 1.14 2015 Lease revenue $ 29,372 $ 29,458 $ 41,452 $ 50,921 $ 151,203 General and administrative expense (48,733 ) (4,728 ) (5,504 ) (5,641 ) (64,606 ) Depreciation (9,508 ) (9,671 ) (10,259 ) (10,773 ) (40,211 ) Interest expense, net (7,422 ) (6,939 ) (6,723 ) (7,470 ) (28,554 ) Other income 626 847 707 868 3,048 Income tax expense (208 ) (124 ) (243 ) (374 ) (949 ) Net (loss) income (35,873 ) 8,843 19,430 27,531 19,931 Less: Net (loss) income attributable to noncontrolling interest (9,000 ) 2,481 5,458 7,725 6,664 Net (loss) income attributable to InfraREIT, Inc. $ (26,873 ) $ 6,362 $ 13,972 $ 19,806 $ 13,267 Basic EPS $ (0.65 ) $ 0.15 $ 0.32 $ 0.45 $ 0.31 Diluted EPS $ (0.65 ) $ 0.15 $ 0.32 $ 0.45 $ 0.31 (1) Basic and diluted net income per common share are computed independently for each quarter and full year based on the respective average number of common shares outstanding; therefore, the sum of the quarterly net income per common share data may not equal the net income per common share for the year. |
Description of Business and S40
Description of Business and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | Mar. 09, 2015 | Feb. 04, 2015 | Jan. 29, 2015 | Feb. 28, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Business combination, assets assumed, marketable securities | $ 1,100,000 | |||||||
Business combination, liabilities assumed, notes payable | $ 1,000,000 | |||||||
Proceeds from sale of marketable securities | $ 1,100,000 | $ 1,065,000 | ||||||
Realized gain on sale of marketable securities | $ 100,000 | 66,000 | ||||||
Percentage of partnership units outstanding | 72.20% | |||||||
Business combination, contingent consideration, cash payments | $ 172,400,000 | |||||||
Contributed to the operating partnership | $ 323,200,000 | |||||||
Offering expenses | $ 6,300,000 | |||||||
Reorganization structuring fee | 44,897,000 | |||||||
Shares purchased consideration for promissory note | 6,242,999 | |||||||
Repurchase of common shares, value | $ 66,500,000 | $ 66,517,000 | ||||||
AFUDC rate | 6.70% | 6.60% | 4.10% | |||||
Goodwill | $ 138,384,000 | $ 138,384,000 | ||||||
Percentage of taxable income for distribution | 90.00% | |||||||
Percentage of taxable income distributed | 100.00% | |||||||
Percentage of alternative minimum taxable income offsetting | 90.00% | |||||||
Penalties and interest expense | $ 200,000 | 200,000 | $ 100,000 | |||||
Penalties and interest accrued | 600,000 | 400,000 | ||||||
Asset retirement obligation liabilities | 0 | |||||||
AFUDC on Borrowed Funds | 3,100,000 | 1,800,000 | 1,600,000 | |||||
AFUDC on Other Funds | 3,700,000 | 3,000,000 | $ 1,100,000 | |||||
Reclassification From Other Assets To Long-Term Debt | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Retrospective change in deferred financing costs | 200,000 | |||||||
Federal Income Tax | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Net operating loss carryforwards | 79,400,000 | $ 13,500,000 | ||||||
Net operating loss carryforwards used | 0 | |||||||
Senior Secured Notes, 8.50% | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Long-term debt, face amount | 25,000,000 | |||||||
LTIP Units | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Operating partnership issued | 28,000 | |||||||
Operating Partnership Unit | Revolving Credit Facility | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Repayments of outstanding revolving credit facility | 72,000,000 | |||||||
Sharyland Distribution & Transmission Services | Revolving Credit Facility | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Repayments of outstanding revolving credit facility | $ 150,000,000 | |||||||
InfraREIT, L.L.C. | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Initial public offering, net of offering costs, shares | 1,700,000 | |||||||
Common stock sold under IPO, per share | $ 21.551 | |||||||
Contributed to the operating partnership | $ 323,200,000 | |||||||
Partners capital received | 8,000,000 | |||||||
Members capital, shares issued | 15,000,000 | |||||||
Percentage of taxable income for distribution | 90.00% | |||||||
Percentage of taxable income distributed | 100.00% | |||||||
Provision for federal income taxes | $ 0 | |||||||
InfraREIT, L.L.C. | Common Class A | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Initial public offering, net of offering costs, shares | 19,617,755 | |||||||
Common shares converted | 19,617,755 | |||||||
InfraREIT, L.L.C. | Common Class C | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Initial public offering, net of offering costs, shares | 25,145 | |||||||
Common shares converted | 25,145 | |||||||
InfraREIT, L.L.C. | LTIP Units | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Common shares converted | 11,264 | |||||||
Common stock conversion basis | one-to-one | |||||||
InfraREIT, L.L.C. | Operating Partnership Unit | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Reverse share split | 0.938550 | |||||||
Hunt-InfraREIT | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Initial public offering, net of offering costs, shares | 1,551,878 | 1,700,000 | ||||||
Reorganization structuring fee | $ 44,900,000 | |||||||
Operating partnership issued | 1,167,287 | |||||||
Common shares converted | 2,329,283 | |||||||
Common stock conversion basis | one-for-one basis | |||||||
Hunt-InfraREIT | CREZ Project | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Operating partnership issued | 983,418 | |||||||
Hunt-InfraREIT | Operating Partnership Unit | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Common shares converted | 1,551,878 | |||||||
MC Transmission Holdings Inc. | Operating Partnership Unit | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Shares purchased consideration for promissory note | 3,325,874 | |||||||
Initial Public Offering | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Initial public offering, net of offering costs, shares | 23,000,000 | |||||||
Common stock sold under IPO, per share | $ 23 | |||||||
Gross proceeds from issuance of common stock upon initial public offering | $ 529,000,000 | |||||||
Hunt Consolidated Incorporation | ||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | ||||||||
Percentage of partnership units outstanding | 27.80% | |||||||
Repayments of related party debt | $ 1,000,000 |
Description of Business and S41
Description of Business and Summary of Significant Accounting Policies - Schedule of Provision for Depreciation of Electric Plant (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Transmission Plant | Minimum | |||
Public Utility Property Plant And Equipment [Line Items] | |||
Depreciation rate | 1.69% | 1.69% | 1.69% |
Transmission Plant | Maximum | |||
Public Utility Property Plant And Equipment [Line Items] | |||
Depreciation rate | 3.15% | 3.15% | 3.15% |
Distribution Plant | Minimum | |||
Public Utility Property Plant And Equipment [Line Items] | |||
Depreciation rate | 1.74% | 1.74% | 1.74% |
Distribution Plant | Maximum | |||
Public Utility Property Plant And Equipment [Line Items] | |||
Depreciation rate | 5.96% | 5.96% | 5.96% |
General Plant | Minimum | |||
Public Utility Property Plant And Equipment [Line Items] | |||
Depreciation rate | 0.80% | 0.80% | 0.80% |
General Plant | Maximum | |||
Public Utility Property Plant And Equipment [Line Items] | |||
Depreciation rate | 5.12% | 5.12% | 5.12% |
Description of Business and S42
Description of Business and Summary of Significant Accounting Policies - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Balance at January 1 | $ 2,924 | $ 2,135 |
Additions based on tax positions related to the current year | 903 | 789 |
Balance at December 31 | $ 3,827 | $ 2,924 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | Feb. 04, 2015 | Feb. 28, 2015 | Mar. 31, 2015 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jan. 15, 2015 | Jan. 01, 2015 | Nov. 20, 2014 |
Related Party Transaction [Line Items] | |||||||||||||
Due from affiliates | $ 32,554,000 | $ 31,172,000 | |||||||||||
Business combination, contingent consideration, cash payments | $ 172,400,000 | ||||||||||||
Maximum | CREZ Project | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Business combination, contingent consideration, cash payments | 737,000,000 | ||||||||||||
Hunt Utility Services L L C | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Payment for management fee | 10,300,000 | 12,300,000 | |||||||||||
Prepaid management fee | 0 | ||||||||||||
Accrued management fee | 3,500,000 | 0 | |||||||||||
Reimbursement of annual software license and maintenance fees and other expenses | $ 500,000 | 500,000 | |||||||||||
Effective date of management agreement | Feb. 4, 2015 | ||||||||||||
Management fee | $ 13,100,000 | $ 10,000,000 | |||||||||||
Management agreement expiration date | Dec. 31, 2019 | ||||||||||||
Agreement successive renewal terms | 5 years | ||||||||||||
Management fee, description | The base fee for each twelve month period beginning each April 1 thereafter will equal 1.50% of the Company’s total equity as of December 31 of the immediately preceding year, subject to a $30.0 million cap. | ||||||||||||
Investment management fee equity multiplier | 1.50% | ||||||||||||
Management fee cap | $ 30,000,000 | ||||||||||||
Hunt Utility Services L L C | Scenario, Forecast | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Management fee | $ 14,200,000 | $ 14,000,000 | |||||||||||
Hunt Consolidated, Inc. and affiliates | Cross Valley | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Purchase price of assets sold | $ 34,200,000 | ||||||||||||
Hunt Consolidated, Inc. and affiliates | Golden Spread Project | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Purchase price of assets sold | $ 7,000,000 | ||||||||||||
Sharyland | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Lease revenue from related party | 172,100,000 | 151,200,000 | $ 134,400,000 | ||||||||||
Deferred rent liability | 15,600,000 | 11,500,000 | |||||||||||
Payments to acquire plant, and equipment | 231,600,000 | 245,100,000 | |||||||||||
Accounts payable and accrued liabilities | 13,700,000 | 9,200,000 | |||||||||||
Due from affiliates | $ 32,600,000 | $ 31,200,000 | |||||||||||
Hunt-InfraREIT | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Common Unit, Issuance Value | 6,800,000 | ||||||||||||
Percentage of capital expenditure agreed to issue upon operating partnership units | 5.00% | ||||||||||||
Hunt-InfraREIT | Maximum | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Common Unit, Issuance Value | $ 82,500,000 | ||||||||||||
Hunt-InfraREIT | Class A OP Units | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Members capital, shares issued | 70,846 | ||||||||||||
Merger of shares related obligation | 983,418 | ||||||||||||
Hunt And Affiliated Entity | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Aggregate legal fees | $ 100,000 | $ 5,000,000 | $ 4,900,000 | ||||||||||
Hunt Consolidated Incorporation | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Repayments of related party debt | $ 1,000,000 | ||||||||||||
Hunt Consolidated Incorporation | Promissory Notes at 2.5% Accrued Percentage | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Borrowings from related parties | $ 1,000,000 | ||||||||||||
Accrued interest bearing note | 2.50% | ||||||||||||
Interest bearing note, maturity date | Nov. 1, 2015 | ||||||||||||
Interest bearing note, maturity date, description | This note and accrued interest were repaid in February 2015 with proceeds from the IPO for a total of $1.0 million. | ||||||||||||
Repayments of related party debt | $ 1,000,000 |
Electric Plant and Depreciati44
Electric Plant and Depreciation - Schedule of Major Classes of Electric Plant (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Electric plant: | ||
Transmission plant | $ 1,203,164 | $ 1,080,050 |
Distribution plant | 575,648 | 457,988 |
General plant | 15,959 | 15,655 |
Total plant in service | 1,794,771 | 1,553,693 |
CWIP | 107,189 | 121,602 |
Total electric plant | 1,901,960 | 1,675,295 |
Accumulated depreciation | (261,140) | (240,764) |
Electric plant, net | $ 1,640,820 | $ 1,434,531 |
Electric Plant and Depreciati45
Electric Plant and Depreciation - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Public Utilities Property Plant And Equipment [Abstract] | ||
Electric plant, net includes plant acquisition adjustments | $ 27.7 | $ 28.6 |
Goodwill (Details)
Goodwill (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Goodwill impairment charge | $ 0 | |
Goodwill | $ 138,384,000 | $ 138,384,000 |
Other Assets - Summary of Other
Other Assets - Summary of Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Other Assets Noncurrent [Abstract] | ||
Deferred financing costs, Gross Carrying Amount | $ 967 | $ 967 |
Other regulatory assets Deferred financing costs, Gross Carrying Amount | 27,761 | 27,112 |
Deferred costs recoverable in future years, Gross Carrying Amount | 23,793 | 23,793 |
Other regulatory assets, Net Gross Carrying Amount | 51,554 | 50,905 |
Investments, Gross Carrying Amount | 2,519 | 2,519 |
Other assets, Gross Carrying Amount | 55,040 | 54,391 |
Deferred financing costs, Accumulated Amortization | (397) | (204) |
Other regulatory assets Deferred financing costs, Accumulated Amortization | (16,997) | (13,208) |
Other regulatory assets, Net Accumulated Amortization | (16,997) | (13,208) |
Other assets, Accumulated Amortization | (17,394) | (13,412) |
Deferred financing costs, Net Carrying Amount | 570 | 763 |
Other regulatory assets Deferred financing costs, Net Carrying Amount | 10,764 | 13,904 |
Deferred costs recoverable in future years, Net Carrying Amount | 23,793 | 23,793 |
Other regulatory assets, Net Carrying Amount | 34,557 | 37,697 |
Investments, Net Carrying Amount | 2,519 | 2,519 |
Other assets, Net Carrying Amount | $ 37,646 | $ 40,979 |
Other Assets - Additional Infor
Other Assets - Additional Information (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Other Assets [Line Items] | |||
Deferred costs recoverable in future years | $ 23,793,000 | $ 23,793,000 | |
Revolving Credit Facility | Sharyland Distribution & Transmission Services | |||
Other Assets [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 250,000,000 |
Borrowings Under Credit Facil49
Borrowings Under Credit Facilities - Additional Information (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 31, 2014 | Dec. 31, 2013 | |
InfraREIT LP Revolving Credit Facility | |||||
Line Of Credit Facility [Line Items] | |||||
Amount of revolving credit facility under agreement | $ 0 | $ 0 | $ 75,000,000 | $ 130,000,000 | |
Line of credit facility, remaining borrowing capacity | $ 75,000,000 | 75,000,000 | 15,000,000 | ||
Credit facility, maturity date | Dec. 10, 2019 | ||||
Revolving credit facility, interest rate description | a rate equal to (1) the one, two, three or six month London Interbank Offered Rate (LIBOR) plus 2.5%, or (2) a base rate (equal to the highest of (a) the Federal Funds Rate plus ½ of 1%, (b) the Bank of America prime rate and (c) LIBOR plus 1%) plus 1.5%. Letters of credit are subject to a letter of credit fee equal to the daily amount available to be drawn times 2.5%. | ||||
InfraREIT LP Revolving Credit Facility | One, Two, Three or Six Month London Interbank Offered Rate (LIBOR) | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 2.50% | ||||
InfraREIT LP Revolving Credit Facility | Federal Funds Rate | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 0.50% | ||||
InfraREIT LP Revolving Credit Facility | LIBOR | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.00% | ||||
InfraREIT LP Revolving Credit Facility | Base Rate | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.50% | ||||
Revolving Credit Facility | SDTS Credit Agreements | |||||
Line Of Credit Facility [Line Items] | |||||
Amount of revolving credit facility under agreement | $ 137,500,000 | 54,000,000 | $ 75,000,000 | ||
Line of credit facility, remaining borrowing capacity | $ 112,500,000 | $ 196,000,000 | |||
Revolving credit facility, interest rate description | a rate equal to either (1) a base rate, determined as the greatest of (a) the administrative agent’s prime rate, (b) the federal funds effective rate plus ½ of 1% and (c) LIBOR plus 1.00% per annum, plus a margin of either 0.75% or 1.00% per annum, depending on the total debt to capitalization ratio of SDTS on a consolidated basis or (2) LIBOR plus a margin of either 1.75% or 2.00% per annum | ||||
Credit facility, maximum borrowing capacity | 250,000,000 | ||||
Credit facility, extended maturity date | Dec. 10, 2019 | ||||
Debt, weighted average interest rate | 2.50% | 2.05% | |||
Revolving Credit Facility | SDTS Credit Agreements | Letter Of Credit | |||||
Line Of Credit Facility [Line Items] | |||||
Amount of revolving credit facility under agreement | $ 0 | $ 0 | |||
Credit facility, maximum borrowing capacity | 25,000,000 | ||||
Revolving Credit Facility | SDTS Credit Agreements | Swingline Loans | |||||
Line Of Credit Facility [Line Items] | |||||
Line of credit facility, remaining borrowing capacity | $ 5,000,000 | ||||
Revolving Credit Facility | Federal Funds Rate | SDTS Credit Agreements | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 0.50% | ||||
Revolving Credit Facility | LIBOR | SDTS Credit Agreements | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.00% | ||||
Revolving Credit Facility | LIBOR | SDTS Credit Agreements | Minimum | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.75% | ||||
Revolving Credit Facility | LIBOR | SDTS Credit Agreements | Maximum | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 2.00% | ||||
Revolving Credit Facility | Base Rate | SDTS Credit Agreements | Minimum | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 0.75% | ||||
Revolving Credit Facility | Base Rate | SDTS Credit Agreements | Maximum | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.00% |
Long-Term Debt - Components of
Long-Term Debt - Components of Long-Term Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2010 | Dec. 31, 2009 | |
Debt Instrument [Line Items] | ||||
Long-term debt, Amount Outstanding | $ 717,466 | $ 624,889 | ||
Less unamortized deferred financing costs | (129) | (161) | ||
Total long-term debt, less deferred financing costs | 717,337 | 624,728 | ||
Less current portion of long-term debt | (7,849) | (7,423) | ||
Debt classified as long-term debt, less deferred financing costs | $ 709,488 | $ 617,305 | ||
TDC | Senior Secured Notes, 8.50% | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, Interest Rate | 8.50% | 8.50% | 8.50% | |
Long-term debt, Amount Outstanding | $ 17,500 | $ 18,750 | ||
Interest bearing note, maturity date | Dec. 30, 2020 | |||
SDTS Credit Agreements | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, Amount Outstanding | $ 699,966 | $ 606,139 | ||
SDTS Credit Agreements | Senior Secured Notes, 5.04% | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, Interest Rate | 5.04% | 5.04% | ||
Long-term debt, Amount Outstanding | $ 60,000 | $ 60,000 | ||
Interest bearing note, maturity date | Jun. 20, 2018 | |||
SDTS Credit Agreements | Senior Secured Notes, 3.86% | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, Interest Rate | 3.86% | 3.86% | ||
Long-term debt, Amount Outstanding | $ 400,000 | $ 400,000 | ||
Interest bearing note, maturity date | Dec. 3, 2025 | |||
SDTS Credit Agreements | Senior Secured Notes, 3.86% Maturing in 2026 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, Interest Rate | 3.86% | |||
Long-term debt, Amount Outstanding | $ 100,000 | |||
Interest bearing note, maturity date | Jan. 14, 2026 | |||
SDTS Credit Agreements | Senior Secured Notes, 7.25% | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, Interest Rate | 7.25% | 7.25% | 7.25% | |
Long-term debt, Amount Outstanding | $ 42,600 | $ 44,512 | ||
Interest bearing note, maturity date | Dec. 30, 2029 | |||
SDTS Credit Agreements | Senior Secured Notes, 6.47% | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, Interest Rate | 6.47% | 6.47% | 6.47% | |
Long-term debt, Amount Outstanding | $ 97,366 | $ 101,627 | ||
Interest bearing note, maturity date | Sep. 30, 2030 |
Long-Term Debt - Components o51
Long-Term Debt - Components of Long-Term Debt (Parenthetical) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2010 | Dec. 31, 2009 |
Senior Secured Notes, 8.50% | |||
Debt Instrument [Line Items] | |||
Long-term debt, face amount | $ 25 | ||
TDC | Senior Secured Notes, 8.50% | |||
Debt Instrument [Line Items] | |||
Long-term debt, face amount | 25 | $ 25 | |
SDTS Credit Agreements | Senior Secured Notes, 5.04% | |||
Debt Instrument [Line Items] | |||
Long-term debt, face amount | 60 | ||
SDTS Credit Agreements | Senior Secured Notes, 3.86% | |||
Debt Instrument [Line Items] | |||
Long-term debt, face amount | 400 | ||
SDTS Credit Agreements | Senior Secured Notes, 3.86% Maturing in 2026 | |||
Debt Instrument [Line Items] | |||
Long-term debt, face amount | 100 | ||
SDTS Credit Agreements | Senior Secured Notes, 7.25% | |||
Debt Instrument [Line Items] | |||
Long-term debt, face amount | 53.5 | $ 53.5 | |
SDTS Credit Agreements | Senior Secured Notes, 6.47% | |||
Debt Instrument [Line Items] | |||
Long-term debt, face amount | $ 110 | $ 110 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Jan. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2010 | Dec. 31, 2009 | |
Debt Instrument [Line Items] | ||||||
Deferred financing costs, Net Carrying Amount | $ 763 | $ 570 | ||||
Senior Secured Notes, 8.50% | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, face amount | 25,000 | |||||
TDC | Senior Secured Notes, 8.50% | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, face amount | $ 25,000 | $ 25,000 | ||||
Long-term debt, stated interest rate | 8.50% | 8.50% | 8.50% | |||
Deferred financing costs, Net Carrying Amount | $ 200 | $ 100 | ||||
Interest bearing note, maturity date | Dec. 30, 2020 | |||||
Sharyland Projects, L.L.C | Senior Secured Credit Facilities | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, face amount | $ 60,000 | |||||
Long-term debt, stated interest rate | 5.04% | |||||
Construction term loan outstanding converted into term loan | $ 407,000 | |||||
Interest bearing note, maturity date | Jun. 20, 2018 | |||||
Sharyland Projects, L.L.C | Senior Secured Credit Facilities | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 2.25% | |||||
SDTS Credit Agreements | Series A Notes | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, face amount | $ 400,000 | |||||
Long-term debt, stated interest rate | 3.86% | |||||
Interest bearing note, maturity date | Dec. 3, 2025 | |||||
Long-Term Debt Maturity Period | 10 years | |||||
SDTS Credit Agreements | Series B Notes | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, face amount | $ 100,000 | |||||
Long-term debt, stated interest rate | 3.86% | |||||
Interest bearing note, maturity date | Jan. 14, 2026 | |||||
Long-Term Debt Maturity Period | 10 years | |||||
SDTS Credit Agreements | Senior Secured Notes, 7.25% | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, face amount | $ 53,500 | $ 53,500 | ||||
Long-term debt, stated interest rate | 7.25% | 7.25% | 7.25% | |||
Interest bearing note, maturity date | Dec. 30, 2029 | |||||
SDTS Credit Agreements | Senior Secured Notes, 6.47% | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, face amount | $ 110,000 | $ 110,000 | ||||
Long-term debt, stated interest rate | 6.47% | 6.47% | 6.47% | |||
Interest bearing note, maturity date | Sep. 30, 2030 |
Long-Term Debt - Schedule of Fu
Long-Term Debt - Schedule of Future Maturities of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
2,017 | $ 7,849 | |
2,018 | 68,305 | |
2,019 | 8,792 | |
2,020 | 21,813 | |
2,021 | 8,621 | |
Thereafter | 602,086 | |
Total | $ 717,466 | $ 624,889 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Swap Agreement | |||
Derivative [Line Items] | |||
Amount reclassified, interest expense | $ 0 | $ 0 | $ 900,000 |
Sharyland Projects, L.L.C | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 0 |
Fair Value of Financial Instr55
Fair Value of Financial Instruments - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term Debt | $ 709,488 | $ 617,305 |
Senior Secured Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term Debt | $ 717,500 | $ 624,900 |
Debt, weighted average interest rate | 4.60% | 4.80% |
Fair Value of Financial Instr56
Fair Value of Financial Instruments - Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 717,466 | $ 624,889 |
Level 2 | Fair Value | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 758,415 | $ 657,270 |
Regulatory Matters - Additional
Regulatory Matters - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2016USD ($)Lease | Sep. 30, 2016Lease | Dec. 31, 2016USD ($)LeaseRentBreakpointRentRate | Dec. 31, 2015USD ($) | |
Public Utilities General Disclosures [Line Items] | ||||
Regulatory Liability | $ | $ 21,004 | $ 21,004 | $ 10,625 | |
Leasing arrangements, operating leases, term of contract | 4 years | |||
Transmission Assets | ||||
Public Utilities General Disclosures [Line Items] | ||||
Number of annual rent breakpoints | RentBreakpoint | 1 | |||
Number of rent rates | RentRate | 1 | |||
Distribution Assets | ||||
Public Utilities General Disclosures [Line Items] | ||||
Number of annual rent breakpoints | RentBreakpoint | 2 | |||
Number of rent rates | RentRate | 2 | |||
Sharyland Distribution & Transmission Services | Sharyland | ||||
Public Utilities General Disclosures [Line Items] | ||||
Number of lease agreements | 2 | 5 | ||
Sharyland Distribution & Transmission Services | Sharyland | Transmission Assets | ||||
Public Utilities General Disclosures [Line Items] | ||||
Number of lease agreements | 1 | |||
Sharyland Distribution & Transmission Services | Sharyland | Distribution Assets | ||||
Public Utilities General Disclosures [Line Items] | ||||
Number of lease agreements | 1 | |||
Sharyland | Sharyland Distribution & Transmission Services | ||||
Public Utilities General Disclosures [Line Items] | ||||
Public utilities, allowed return on equity, percentage | 10.00% | |||
Sharyland and SDTS | ||||
Public Utilities General Disclosures [Line Items] | ||||
Public utilities, requested capital structure, debt percentage | 55.00% | |||
Public utilities, requested capital structure, equity percentage | 45.00% | |||
Public utilities cost of debt percentage | 6.73% | |||
Public utilities, reduced cost of debt percentage | 4.97% |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 12, 2015 | Jan. 11, 2015 | |
Equity [Abstract] | |||||
Common stock, shares authorized | 450,000,000 | 450,000,000 | 450,000,000 | 3,000 | |
Common stock, par or stated value per share | $ 0.01 | $ 0.01 | $ 0.01 | $ 1 | |
Cash dividends declared per share to shareholders | 1 | 1.075 | $ 0.310 | ||
Cash distributions declared to unit holders, per unit | $ 1 | $ 1.075 | $ 0.31 | ||
Dividends and distributions paid | $ 59,109,000 | $ 61,595,000 | $ 0 | ||
Percentage of taxable income for distribution | 90.00% | ||||
Percentage of taxable income distributed | 100.00% |
Accumulated Other Comprehensi59
Accumulated Other Comprehensive Loss - Additional Information (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | ||
Changes in accumulated other comprehensive loss | $ 0 | $ 0 |
Accumulated Other Comprehensi60
Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Other comprehensive loss before reclassifications | $ (49) |
Amounts reclassified from accumulated other comprehensive loss | 893 |
Net period other comprehensive loss | 844 |
Accumulated Other Comprehensive Loss Attributable to InfraREIT, Inc. | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Other comprehensive loss before reclassifications | (77) |
Amounts reclassified from accumulated other comprehensive loss | 687 |
Net period other comprehensive loss | 610 |
Accumulated Other Comprehensive Loss Attributable To Noncontrolling Interest | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Other comprehensive loss before reclassifications | 28 |
Amounts reclassified from accumulated other comprehensive loss | 206 |
Net period other comprehensive loss | $ 234 |
Noncontrolling Interest - Addit
Noncontrolling Interest - Additional Information (Details) - USD ($) $ in Millions | Feb. 04, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Minority Interest [Line Items] | ||||
Description of units redeemed for cash or, at option, exchanged for common shares | one-for-one basis | |||
OP Units held by the limited partners | 16,900,000 | 17,000,000 | ||
Operating partnership units redeem | 186,496 | |||
Common shares issued | 186,496 | |||
Shares purchased consideration for promissory note | 6,242,999 | |||
Class A OP Units | ||||
Minority Interest [Line Items] | ||||
Shares purchased consideration for promissory note | 6,242,999 | |||
Principal amount of shares purchased consideration for promissory note | $ 66.5 | |||
Class A OP Units | Hunt-InfraREIT | ||||
Minority Interest [Line Items] | ||||
Operating partnership units redeem | 1,551,878 | 0 | ||
Common shares issued | 1,551,878 | |||
LTIP Units | ||||
Minority Interest [Line Items] | ||||
Operating partnership units issued | 29,722 | 28,000 | 11,264 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 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 | |
Basic net income per share: | |||||||||||
Net income attributable to InfraREIT, Inc. | $ 19,990 | $ 17,041 | $ 6,608 | $ 6,315 | $ 19,806 | $ 13,972 | $ 6,362 | $ (26,873) | $ 49,954 | $ 13,267 | $ 22,898 |
Weighted average common shares outstanding | 43,668,000 | 42,983,000 | 35,053,000 | ||||||||
Basic net income per share | $ 0.46 | $ 0.39 | $ 0.15 | $ 0.14 | $ 0.45 | $ 0.32 | $ 0.15 | $ (0.65) | $ 1.14 | $ 0.31 | $ 0.65 |
Diluted net income per share: | |||||||||||
Net income attributable to InfraREIT, Inc. | $ 19,990 | $ 17,041 | $ 6,608 | $ 6,315 | $ 19,806 | $ 13,972 | $ 6,362 | $ (26,873) | $ 49,954 | $ 13,267 | $ 22,898 |
Weighted average common shares outstanding | 43,668,000 | 42,983,000 | 35,053,000 | ||||||||
Redemption of Operating Partnership units | 186,496 | ||||||||||
Weighted average dilutive shares outstanding | 43,668,000 | 42,983,000 | 35,053,000 | ||||||||
Diluted net income per share | $ 0.46 | $ 0.39 | $ 0.15 | $ 0.14 | $ 0.45 | $ 0.32 | $ 0.15 | $ (0.65) | $ 1.14 | $ 0.31 | $ 0.65 |
Due to the anti-dilutive effect, the computation of diluted earnings per share does not reflect the following adjustments: | |||||||||||
Net income attributable to noncontrolling interest | $ 7,749 | $ 6,560 | $ 2,576 | $ 2,462 | $ 7,725 | $ 5,458 | $ 2,481 | $ (9,000) | $ 19,347 | $ 6,664 | $ 6,882 |
Redemption of Operating Partnership units | 16,968,000 | 16,232,000 | 10,578,000 |
Leases - Schedule of Compositio
Leases - Schedule of Composition of Lease Revenue (Details) - USD ($) $ in Thousands | 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 | |
Leases [Abstract] | |||||||||||
Base rent (straight-line) | $ 145,030 | $ 125,669 | $ 106,746 | ||||||||
Percentage rent | 27,069 | 25,534 | 27,669 | ||||||||
Total lease revenue | $ 55,230 | $ 49,419 | $ 33,785 | $ 33,665 | $ 50,921 | $ 41,452 | $ 29,458 | $ 29,372 | $ 172,099 | $ 151,203 | $ 134,415 |
Leases - Additional Information
Leases - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Leased Assets [Line Items] | ||
Operating leases placed in services dates description | SDTS has entered into various leases with Sharyland for all the Company’s placed in service T&D assets. The master lease agreements, as amended, expire at various dates from December 31, 2017 through December 31, 2022. | |
Lease expiration date range, start date | Dec. 31, 2017 | |
Lease expiration date range, end date | Dec. 31, 2022 | |
Maximum | ||
Operating Leased Assets [Line Items] | ||
Rate of rent used, Percentage | 37.00% | |
Minimum | ||
Operating Leased Assets [Line Items] | ||
Rate of rent used, Percentage | 23.00% | |
Scenario, Forecast | Maximum | ||
Operating Leased Assets [Line Items] | ||
Rate of rent used, Percentage | 31.00% | |
Scenario, Forecast | Minimum | ||
Operating Leased Assets [Line Items] | ||
Rate of rent used, Percentage | 23.00% |
Leases - Future Minimum Rent Re
Leases - Future Minimum Rent Revenue Expected in Accordance with Lease Agreement (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Leases [Abstract] | |
2,017 | $ 163,057 |
2,018 | 86,094 |
2,019 | 84,163 |
2,020 | 70,552 |
2,021 | 8,528 |
Thereafter | 4,413 |
Total | $ 416,807 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) | Feb. 04, 2015 | Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Feb. 28, 2015 | May 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Initial Public Offering | ||||||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||||||||
Initial public offering, net of offering costs, shares | 23,000,000 | |||||||||
LTIP Units | ||||||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||||||||
Operating partnership units issued | 29,722 | 28,000 | 11,264 | |||||||
Stock Based Compensation And Other | ||||||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||||||||
Compensation expenses | $ 100,000 | |||||||||
Aggregate intrinsic value of IPO issued | $ 100,000 | |||||||||
Stock Based Compensation And Other | Initial Public Offering | ||||||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||||||||
Initial public offering, net of offering costs, shares | 11,264 | |||||||||
2015 Equity Incentive Plan | ||||||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||||||||
Equity based compensation | 375,000 | |||||||||
Common stock reserved for future Issuance | 296,986 | |||||||||
Unamortized stock compensation expense | $ 0 | |||||||||
2015 Equity Incentive Plan | General And Administrative Expense | ||||||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||||||||
Compensation expenses | $ 1,000,000 | $ 700,000 | ||||||||
2015 Equity Incentive Plan | Director | ||||||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||||||||
Grant date fair value per share | $ 17.84 | $ 17.58 | $ 16.81 | $ 18.58 | ||||||
Grant date fair value | $ 100,000 | $ 100,000 | $ 100,000 | $ 100,000 | ||||||
Aggregate common stock shares issued to directors | 4,812 | 5,248 | 5,497 | 4,735 | ||||||
2015 Equity Incentive Plan | Director | LTIP Units | ||||||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||||||||
LTIP Units issued to directors | 29,722 | |||||||||
Grant date fair value per share | $ 18.58 | $ 26.41 | ||||||||
Grant date fair value | $ 600,000 | $ 700,000 | ||||||||
Vesting period of LTIP Units | Jan. 1, 2017 | |||||||||
Operating partnership units issued | 28,000 | |||||||||
Non-Qualified 2015 Employee Stock Purchase Plan | ||||||||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||||||||
Equity based compensation | 250,000 | |||||||||
Common stock reserved for future Issuance | 250,000 | |||||||||
Shares purchased under ESPP | 0 |
Supplemental Cash Flow Inform67
Supplemental Cash Flow Information - Supplemental Cash Flow Information and Non-cash Investing and Financing Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplemental cash flow information | |||
Cash paid during the period for interest | $ 33,972 | $ 25,850 | $ 29,981 |
Cash (received) paid during the period for taxes | (31) | 75 | |
Non-cash investing and financing activities | |||
Non-cash right of way additions to electric plant | 337 | ||
Change in accrued additions to electric plant | 4,113 | 6,942 | 20,633 |
Allowance for funds used during construction - debt | 3,142 | 1,767 | 1,635 |
Net non-cash equity issuances related to the Merger and Reorganization | 97,193 | ||
Net non-cash noncontrolling equity issuances related to the Merger and Reorganization | 119,607 | ||
Redemption of operating partnership units for common stock | 3,277 | ||
Non-cash noncontrolling interest equity issuances | 755 | 4,648 | |
Dividends and distributions payable | $ 15,161 | $ 13,634 | $ 14,130 |
Quarterly Financial Informati68
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 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 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Lease revenue | $ 55,230 | $ 49,419 | $ 33,785 | $ 33,665 | $ 50,921 | $ 41,452 | $ 29,458 | $ 29,372 | $ 172,099 | $ 151,203 | $ 134,415 |
General and administrative expense | (5,991) | (5,336) | (4,980) | (5,545) | (5,641) | (5,504) | (4,728) | (48,733) | (21,852) | (64,606) | (18,625) |
Depreciation | (12,392) | (11,828) | (11,410) | (11,074) | (10,773) | (10,259) | (9,671) | (9,508) | (46,704) | (40,211) | (35,080) |
Interest expense, net | (9,644) | (9,379) | (9,055) | (8,842) | (7,470) | (6,723) | (6,939) | (7,422) | (36,920) | (28,554) | (32,741) |
Other income | 861 | 1,024 | 1,137 | 759 | 868 | 707 | 847 | 626 | 3,781 | 3,048 | (17,236) |
Income tax expense | (325) | (299) | (293) | (186) | (374) | (243) | (124) | (208) | (1,103) | (949) | (953) |
Net income | 27,739 | 23,601 | 9,184 | 8,777 | 27,531 | 19,430 | 8,843 | (35,873) | 69,301 | 19,931 | 29,780 |
Less: Net income attributable to noncontrolling interest | 7,749 | 6,560 | 2,576 | 2,462 | 7,725 | 5,458 | 2,481 | (9,000) | 19,347 | 6,664 | 6,882 |
Net income attributable to InfraREIT, Inc. | $ 19,990 | $ 17,041 | $ 6,608 | $ 6,315 | $ 19,806 | $ 13,972 | $ 6,362 | $ (26,873) | $ 49,954 | $ 13,267 | $ 22,898 |
Basic EPS | $ 0.46 | $ 0.39 | $ 0.15 | $ 0.14 | $ 0.45 | $ 0.32 | $ 0.15 | $ (0.65) | $ 1.14 | $ 0.31 | $ 0.65 |
Diluted EPS | $ 0.46 | $ 0.39 | $ 0.15 | $ 0.14 | $ 0.45 | $ 0.32 | $ 0.15 | $ (0.65) | $ 1.14 | $ 0.31 | $ 0.65 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 27, 2017 | Jan. 03, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Subsequent Event [Line Items] | |||||
Dividend declared date | Feb. 27, 2017 | ||||
Cash dividends declared per common share | $ 1 | $ 1.075 | $ 0.310 | ||
Dividend payable date | Apr. 20, 2017 | ||||
Dividend record date | Mar. 31, 2017 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Cash distributions to units holders | $ 0.25 | ||||
Subsequent Event | Quarterly Dividend | |||||
Subsequent Event [Line Items] | |||||
Cash dividends declared per common share | 0.25 | ||||
Subsequent Event | Annually Dividend | |||||
Subsequent Event [Line Items] | |||||
Cash dividends declared per common share | $ 1 | ||||
Subsequent Event | Director | LTIP Units | |||||
Subsequent Event [Line Items] | |||||
LTIP Units issued to directors | 31,633 | ||||
Grant date fair value per share | $ 18.02 | ||||
Grant date fair value | $ 0.6 | ||||
Vesting period of LTIP Units | Jan. 1, 2018 |
Schedule III - Electric Plant a
Schedule III - Electric Plant and Accumulated Depreciation - Components of Electric Plant and Accumulated Depreciation (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Real Estate And Accumulated Depreciation [Line Items] | |||
Gross Amount Carried at Period Close | $ 1,901,960 | $ 1,675,295 | $ 1,447,247 |
Accumulated Depreciation | (261,140) | $ (240,764) | $ (220,101) |
Stanton Brady And Celeste Assets | |||
Real Estate And Accumulated Depreciation [Line Items] | |||
Encumbrances | 391,736 | ||
Initial Cost to Company | 901,636 | ||
Gross Amount Carried at Period Close | 901,636 | ||
Accumulated Depreciation | (134,121) | ||
McAllen Assets | |||
Real Estate And Accumulated Depreciation [Line Items] | |||
Encumbrances | 67,242 | ||
Initial Cost to Company | 157,124 | ||
Gross Amount Carried at Period Close | 157,124 | ||
Accumulated Depreciation | (25,379) | ||
Competitive Renewable Energy Zones Assets | |||
Real Estate And Accumulated Depreciation [Line Items] | |||
Encumbrances | 329,680 | ||
Initial Cost to Company | 685,954 | ||
Gross Amount Carried at Period Close | 685,954 | ||
Accumulated Depreciation | (40,023) | ||
Stanton Transmission Loop Assets | |||
Real Estate And Accumulated Depreciation [Line Items] | |||
Encumbrances | 16,578 | ||
Initial Cost to Company | 92,318 | ||
Gross Amount Carried at Period Close | 92,318 | ||
Accumulated Depreciation | (59,837) | ||
ERCOT Transmission Assets | |||
Real Estate And Accumulated Depreciation [Line Items] | |||
Encumbrances | 32,230 | ||
Initial Cost to Company | 64,928 | ||
Gross Amount Carried at Period Close | 64,928 | ||
Accumulated Depreciation | $ (1,780) |
Schedule III - Electric Plant71
Schedule III - Electric Plant and Accumulated Depreciation - Components of Electric Plant and Accumulated Depreciation (Parenthetical) (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Transmission Plant | Minimum | |||
Real Estate And Accumulated Depreciation [Line Items] | |||
Depreciation rate | 1.69% | 1.69% | 1.69% |
Transmission Plant | Maximum | |||
Real Estate And Accumulated Depreciation [Line Items] | |||
Depreciation rate | 3.15% | 3.15% | 3.15% |
Distribution Plant | Minimum | |||
Real Estate And Accumulated Depreciation [Line Items] | |||
Depreciation rate | 1.74% | 1.74% | 1.74% |
Distribution Plant | Maximum | |||
Real Estate And Accumulated Depreciation [Line Items] | |||
Depreciation rate | 5.96% | 5.96% | 5.96% |
General Plant | Minimum | |||
Real Estate And Accumulated Depreciation [Line Items] | |||
Depreciation rate | 0.80% | 0.80% | 0.80% |
General Plant | Maximum | |||
Real Estate And Accumulated Depreciation [Line Items] | |||
Depreciation rate | 5.12% | 5.12% | 5.12% |
Schedule III - Electric Plant72
Schedule III - Electric Plant and Accumulated Depreciation - Components of Electric Plant and Accumulated Depreciation Fixed Asset Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Electric plant | ||
Beginning balance | $ 1,675,295 | $ 1,447,247 |
Additions | 239,154 | 235,263 |
Retirements | (12,489) | (7,215) |
Ending balance | 1,901,960 | 1,675,295 |
Accumulated depreciation | ||
Beginning balance | 240,764 | 220,101 |
Depreciation expense | 46,704 | 40,211 |
Retirements | (12,489) | (7,215) |
Cost of removal | (13,839) | (12,333) |
Ending balance | 261,140 | 240,764 |
Electric plant, net | $ 1,640,820 | $ 1,434,531 |