Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 29, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
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 Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 43,962,167 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 3,223 | $ 2,867 |
Restricted cash | 1,687 | 1,683 |
Due from affiliates | 33,401 | 35,172 |
Inventory | 7,592 | 6,759 |
Prepaids and other current assets | 1,041 | 2,460 |
Total current assets | 46,944 | 48,941 |
Electric Plant, net | 1,800,517 | 1,772,229 |
Goodwill | 138,384 | 138,384 |
Other Assets | 31,771 | 34,314 |
Total Assets | 2,017,616 | 1,993,868 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 28,345 | 21,230 |
Short-term borrowings | 101,000 | 41,000 |
Current portion of long-term debt | 8,667 | 68,305 |
Dividends and distributions payable | 15,176 | 15,169 |
Accrued taxes | 748 | 5,633 |
Total current liabilities | 153,936 | 151,337 |
Long-Term Debt, Less Deferred Financing Costs | 834,693 | 841,215 |
Regulatory Liabilities | 111,811 | 100,458 |
Total liabilities | 1,100,440 | 1,093,010 |
Commitments and Contingencies | ||
Equity | ||
Common stock, $0.01 par value; 450,000,000 shares authorized; 43,962,167 and 43,796,915 issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 440 | 438 |
Additional paid-in capital | 709,488 | 706,357 |
Accumulated deficit | (38,229) | (49,728) |
Total InfraREIT, Inc. equity | 671,699 | 657,067 |
Noncontrolling interest | 245,477 | 243,791 |
Total equity | 917,176 | 900,858 |
Total Liabilities and Equity | $ 2,017,616 | $ 1,993,868 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
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 | 43,962,167 | 43,796,915 |
Common stock, shares, outstanding | 43,962,167 | 43,796,915 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Lease revenue | $ 48,926 | $ 51,618 | $ 142,409 | $ 131,664 |
Operating costs and expenses | ||||
General and administrative expense | 6,787 | 6,718 | 19,506 | 19,565 |
Depreciation | 12,063 | 13,328 | 35,632 | 38,997 |
Total operating costs and expenses | 18,850 | 20,046 | 55,138 | 58,562 |
Income from operations | 30,076 | 31,572 | 87,271 | 73,102 |
Other (expense) income | ||||
Interest expense, net | (10,120) | (10,357) | (31,864) | (30,196) |
Other income, net | 7 | 331 | 1,114 | 351 |
Total other expense | (10,113) | (10,026) | (30,750) | (29,845) |
Income before income taxes | 19,963 | 21,546 | 56,521 | 43,257 |
Income tax expense (benefit) | 257 | 308 | (4,885) | 873 |
Net income | 19,706 | 21,238 | 61,406 | 42,384 |
Less: Net income attributable to noncontrolling interest | 5,435 | 5,908 | 16,937 | 11,797 |
Net income attributable to InfraREIT, Inc. | $ 14,271 | $ 15,330 | $ 44,469 | $ 30,587 |
Net income attributable to InfraREIT, Inc. common stockholders per share: | ||||
Basic | $ 0.32 | $ 0.35 | $ 1.01 | $ 0.70 |
Diluted | 0.32 | 0.35 | 1.01 | 0.70 |
Cash dividends declared per common share | $ 0.25 | $ 0.25 | $ 0.75 | $ 0.75 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total InfraREIT, Inc. Equity | Noncontrolling Interest |
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 | |||||
Dividends and distributions | (15,169) | (10,944) | (10,944) | (4,225) | ||
Redemption of operating partnership units for common stock | 55 | 55 | (55) | |||
Redemption of operating partnership units for common stock, shares | 3,100 | |||||
Net income | 11,017 | 7,949 | 7,949 | 3,068 | ||
Equity based compensation | 140 | 140 | ||||
Balance at Mar. 31, 2017 | 939,899 | $ 438 | 705,900 | (21,238) | 685,100 | 254,799 |
Balance, shares at Mar. 31, 2017 | 43,775,383 | |||||
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 | |||||
Redemption of operating partnership units for common stock, shares | 23,349 | |||||
Net income | $ 42,384 | |||||
Balance at Sep. 30, 2017 | 941,216 | $ 438 | 706,337 | (20,494) | 686,281 | 254,935 |
Balance, shares at Sep. 30, 2017 | 43,795,632 | |||||
Balance at Mar. 31, 2017 | 939,899 | $ 438 | 705,900 | (21,238) | 685,100 | 254,799 |
Balance, shares at Mar. 31, 2017 | 43,775,383 | |||||
Dividends and distributions | (15,169) | (10,944) | (10,944) | (4,225) | ||
Redemption of operating partnership units for common stock | 55 | 55 | (55) | |||
Redemption of operating partnership units for common stock, shares | 3,107 | |||||
Net income | 10,129 | 7,308 | 7,308 | 2,821 | ||
Equity based compensation | 145 | 145 | ||||
Balance at Jun. 30, 2017 | 935,004 | $ 438 | 705,955 | (24,874) | 681,519 | 253,485 |
Balance, shares at Jun. 30, 2017 | 43,778,490 | |||||
Dividends and distributions | (15,169) | (10,950) | (10,950) | (4,219) | ||
Redemption of operating partnership units for common stock | 382 | 382 | (382) | |||
Redemption of operating partnership units for common stock, shares | 17,142 | |||||
Net income | 21,238 | 15,330 | 15,330 | 5,908 | ||
Equity based compensation | 143 | 143 | ||||
Balance at Sep. 30, 2017 | 941,216 | $ 438 | 706,337 | (20,494) | 686,281 | 254,935 |
Balance, shares at Sep. 30, 2017 | 43,795,632 | |||||
Balance at Dec. 31, 2017 | 900,858 | $ 438 | 706,357 | (49,728) | 657,067 | 243,791 |
Balance, shares at Dec. 31, 2017 | 43,796,915 | |||||
Dividends and distributions | (15,176) | (10,990) | (10,990) | (4,186) | ||
Redemption of operating partnership units for common stock | $ 2 | 3,104 | 3,106 | (3,106) | ||
Redemption of operating partnership units for common stock, shares | 163,969 | |||||
Net income | 17,764 | 12,864 | 12,864 | 4,900 | ||
Equity based compensation | 140 | 140 | ||||
Balance at Mar. 31, 2018 | 903,586 | $ 440 | 709,461 | (47,854) | 662,047 | 241,539 |
Balance, shares at Mar. 31, 2018 | 43,960,884 | |||||
Balance at Dec. 31, 2017 | $ 900,858 | $ 438 | 706,357 | (49,728) | 657,067 | 243,791 |
Balance, shares at Dec. 31, 2017 | 43,796,915 | |||||
Redemption of operating partnership units for common stock, shares | 165,252 | |||||
Net income | $ 61,406 | |||||
Balance at Sep. 30, 2018 | 917,176 | $ 440 | 709,488 | (38,229) | 671,699 | 245,477 |
Balance, shares at Sep. 30, 2018 | 43,962,167 | |||||
Balance at Mar. 31, 2018 | 903,586 | $ 440 | 709,461 | (47,854) | 662,047 | 241,539 |
Balance, shares at Mar. 31, 2018 | 43,960,884 | |||||
Dividends and distributions | (15,176) | (10,990) | (10,990) | (4,186) | ||
Redemption of operating partnership units for common stock | 27 | 27 | (27) | |||
Redemption of operating partnership units for common stock, shares | 1,283 | |||||
Net income | 23,936 | 17,334 | 17,334 | 6,602 | ||
Equity based compensation | 180 | 180 | ||||
Balance at Jun. 30, 2018 | 912,526 | $ 440 | 709,488 | (41,510) | 668,418 | 244,108 |
Balance, shares at Jun. 30, 2018 | 43,962,167 | |||||
Dividends and distributions | (15,176) | (10,990) | (10,990) | (4,186) | ||
Net income | 19,706 | 14,271 | 14,271 | 5,435 | ||
Equity based compensation | 120 | 120 | ||||
Balance at Sep. 30, 2018 | $ 917,176 | $ 440 | $ 709,488 | $ (38,229) | $ 671,699 | $ 245,477 |
Balance, shares at Sep. 30, 2018 | 43,962,167 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities | ||
Net income | $ 61,406 | $ 42,384 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 35,632 | 38,997 |
Amortization of deferred financing costs | 2,568 | 3,101 |
Allowance for funds used during construction - other funds | (1,094) | (318) |
Equity based compensation | 440 | 428 |
Changes in assets and liabilities: | ||
Due from affiliates | 1,624 | 4,036 |
Inventory | (833) | 95 |
Prepaids and other current assets | (66) | (27) |
Accounts payable and accrued liabilities | (590) | 334 |
Net cash provided by operating activities | 99,087 | 89,030 |
Cash flows from investing activities | ||
Additions to electric plant | (48,653) | (147,803) |
Proceeds from asset exchange transaction | 1,632 | |
Net cash used in investing activities | (47,021) | (147,803) |
Cash flows from financing activities | ||
Proceeds from short-term borrowings | 118,000 | 110,500 |
Repayments of short-term borrowings | (58,000) | (213,000) |
Proceeds from borrowings of long-term debt | 200,000 | |
Repayments of long-term debt | (66,185) | (5,845) |
Deferred financing costs | (809) | |
Dividends and distributions paid | (45,521) | (45,499) |
Net cash (used in) provided by financing activities | (51,706) | 45,347 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 360 | (13,426) |
Cash, cash equivalents and restricted cash at beginning of period | 4,550 | 19,294 |
Cash, cash equivalents and restricted cash at end of period | $ 4,910 | $ 5,868 |
Description of Business and Pre
Description of Business and Presentation of Financial Statements | 9 Months Ended |
Sep. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business and Presentation of Financial Statements | 1. Description of Business and Presentation of Financial Statements Basis of Presentation InfraREIT, Inc. is a Maryland corporation, which may be referred to in these financial statements as the “Company,” “InfraREIT,” “we,” “us” and “our.” These unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. For further information, refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the U.S. Securities and Exchange Commission (SEC) on March 5, 2018 (2017 Form 10-K). We held 72.4% of the outstanding partnership units (OP Units) in InfraREIT Partners, LP (Operating Partnership or InfraREIT LP) as of September 30, 2018 and are its general partner. We include the accounts of the Operating Partnership and its subsidiaries in our consolidated financial statements. Hunt Consolidated, Inc. (Hunt) affiliates, current or former employees and members of our board of directors held the other 27.6% of the outstanding OP Units as of September 30, 2018. Use of Estimates The preparation of our 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. Recent Accounting Guidance Recently Adopted Accounting Guidance In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Clarification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 203): Restricted Cash (A Consensus of the FASB Emerging Issues Task Force) Recent Accounting Guidance Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 Leases (Topic 842): Targeted Improvements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement |
2017 Asset Exchange Transaction
2017 Asset Exchange Transaction | 9 Months Ended |
Sep. 30, 2018 | |
Nonmonetary Transactions [Abstract] | |
2017 Asset Exchange Transaction | 2 . 2017 Asset Exchange Transaction In July 2017, our regulated subsidiary, Sharyland Distribution & Transmission Services, L.L.C. (SDTS), and our sole tenant, Sharyland Utilities, L.P. (Sharyland), signed a definitive agreement (2017 Asset Exchange Agreement) with Oncor Electric Delivery Company LLC (Oncor) to exchange SDTS’s retail distribution assets and certain transmission assets for a group of Oncor’s transmission assets located in Northwest and Central Texas (2017 Asset Exchange Transaction). The 2017 Asset Exchange Transaction closed in November 2017 and, among other things, resulted in SDTS exchanging $403 million of net assets for $383 million of transmission assets owned by Oncor, $18 million of net cash and a $2 million receivable from Oncor as of December 31, 2017. The transaction resulted in a gain of $0.3 million for SDTS. The receivable from Oncor was included in prepaids and other current assets in the Consolidated Balance Sheets at December 31, 2017 and was collected during the first quarter of 2018. These transactions were structured to qualify, in part, as a simultaneous tax deferred like-kind exchange of assets to the extent that the assets are of “like kind” (within the meaning of Section 1031 of the Internal Revenue Code of 1986, as amended). |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash | 9 Months Ended |
Sep. 30, 2018 | |
Cash And Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | 3 . Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash within the Consolidated Balance Sheets that sum to the total of the same such amounts shown on the Consolidated Statements of Cash Flows: September 30, (In thousands) 2018 2017 Cash and cash equivalents $ 3,223 $ 4,186 Restricted cash 1,687 1,682 Total cash, cash equivalents and restricted cash shown on the Statement of Cash Flows $ 4,910 $ 5,868 Amounts included in restricted cash represent the principal and interest payable for two consecutive periods associated with the $25.0 million senior secured notes of the Operating Partnership’s wholly-owned subsidiary, Transmission and Distribution Company, L.L.C. (TDC), as described in Note 9, Long-Term Debt |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 4 . Related Party Transactions We lease, through SDTS, all our regulated assets to Sharyland through several lease agreements. Under the leases, we have agreed to fund capital expenditures for footprint projects. Our leases define “footprint projects” to be transmission or, if applicable, distribution projects that (1) are primarily situated within our current or previous distribution service territory, as applicable, (2) physically hang from our existing transmission assets, such as the addition of another circuit to our existing transmission lines, or that are physically located within one of our substations or (3) connect or are otherwise added to transmission lines or other properties that comprise a part of the transmission assets acquired in the 2017 Asset Exchange Transaction. We earned lease revenue from Sharyland under these agreements of $48.9 million and $51.6 million during the three months ended September 30, 2018 and 2017, respectively. We earned lease revenue of $142.4 million and $131.7 million from Sharyland during the nine months ended September 30, 2018 and 2017, respectively. In connection with our leases with Sharyland, we had a deferred rent liability of $14.6 million and $14.7 million as of September 30, 2018 and December 31, 2017, respectively, which is included in accounts payable and accrued liabilities on the Consolidated Balance Sheets. In addition to rent payments that Sharyland makes to us, we 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 our regulated assets. For the nine months ended September 30, 2018 and 2017, the net amount of payments we made to Sharyland was $48.3 million and $151.2 million, respectively. In July 2017, SDTS and Sharyland entered into a letter agreement (Side Letter) in which they agreed to certain terms and conditions to address the actual or potential conflicts of interest arising between SDTS and Sharyland in connection with the 2017 Asset Exchange Transaction. Specifically, the Side Letter includes, among other things, certain representations and warranties from Sharyland that correspond to representations and warranties of SDTS under the 2017 Asset Exchange Agreement relating to certain matters for which SDTS relies, in whole or in part, upon Sharyland under the leases and as operator of the assets and an allocation of expenses incurred in connection with the transactions. For information related to the 2017 Asset Exchange Transaction, see Note 2, 2017 Asset Exchange Transaction As of September 30, 2018 and December 31, 2017, accounts payable and accrued liabilities on the Consolidated Balance Sheets included $5.0 million and $2.1 million, respectively, related to amounts owed to Sharyland for construction costs incurred and property taxes paid on our behalf. As of September 30, 2018 and December 31, 2017, amounts due from affiliates on the Consolidated Balance Sheets included $33.4 million and $35.2 million, respectively, related to amounts owed by Sharyland primarily associated with our leases. The management fee paid to Hunt Utility Services, LLC (Hunt Manager) for the nine months ended September 30, 2018 and 2017 was $10.3 million and $14.1 million, respectively. There were no prepaid or accrued amounts associated with the management fees on the Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017. As of December 31, 2016, there was $3.5 million accrued associated with management fees on the Consolidated Balance Sheets. Additionally, during the nine months ended September 30, 2018 and 2017, we paid Hunt Manager $0.1 million and $0.2 million, respectively, for reimbursement of annual software license and maintenance fees and other expenses in accordance with our management agreement. Our management agreement with Hunt Manager provides for an annual base fee, or management fee. The base fee for each 12 month period beginning each April 1 will equal 1.50% of our 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 our independent directors decides to terminate the agreement. The annual base fees through March 31, 2019 are as follows: (In millions) Base Fee April 1, 2016 - March 31, 2017 $ 14.0 April 1, 2017 - March 31, 2018 14.2 April 1, 2018 - March 31, 2019 13.5 For information related to the pending sale of InfraREIT and asset exchange with Sharyland, including the proposed termination of the leases and management agreement, see Note 20, Subsequent Events |
Electric Plant and Depreciation
Electric Plant and Depreciation | 9 Months Ended |
Sep. 30, 2018 | |
Public Utilities Property Plant And Equipment [Abstract] | |
Electric Plant and Depreciation | 5 . Electric Plant and Depreciation The major classes of electric plant are as follows: (In thousands) September 30, 2018 December 31, 2017 Electric plant: Transmission plant $ 1,784,175 $ 1,685,466 Distribution plant 151,458 143,865 General plant 3,023 3,023 Total plant in service 1,938,656 1,832,354 Construction work in progress 60,027 113,643 Total electric plant 1,998,683 1,945,997 Accumulated depreciation (198,166 ) (173,768 ) Electric plant, net $ 1,800,517 $ 1,772,229 General plant consists primarily of a warehouse, buildings and associated assets. Construction work in progress (CWIP) reflects the regulated asset projects in various stages of construction prior to being placed in service. 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 $28.6 million and $29.4 million as of September 30, 2018 and December 31, 2017, respectively. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | 6 . Goodwill Goodwill represents the excess of costs of an acquired business over the fair value of the assets acquired, less liabilities assumed. We conduct an impairment test of goodwill at least annually. As of September 30, 2018 and December 31, 2017, $138.4 million was recorded as goodwill on the Consolidated Balance Sheets. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Other Assets | 7 . Other Assets Other assets are as follows: September 30, 2018 December 31, 2017 (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 $ (736 ) $ 231 $ 967 $ (591 ) $ 376 Other regulatory assets: Deferred financing costs 10,365 (5,137 ) 5,228 28,570 (20,944 ) 7,626 Deferred costs recoverable in future years 23,793 — 23,793 23,793 — 23,793 Other regulatory assets 34,158 (5,137 ) 29,021 52,363 (20,944 ) 31,419 Investments 2,519 — 2,519 2,519 — 2,519 Other assets $ 37,644 $ (5,873 ) $ 31,771 $ 55,849 $ (21,535 ) $ 34,314 Deferred financing costs on undrawn revolver consist of costs incurred in connection with the establishment of the InfraREIT LP revolving credit facility. See Note 8, Borrowings Under Credit Facilities Other regulatory assets consist of deferred financing costs within our regulated subsidiary, SDTS. The deferred financing costs primarily consist of debt issuance costs incurred in connection with the construction of SDTS’s regulated assets or the refinancing of related debt. These assets are classified as regulatory assets and amortized over the length of the related loan. These costs are recovered through rates established in rate cases. The $18.2 million gross deferred financing costs associated with our 2011 Notes (defined below) were fully amortized in June 2018 and removed from our Consolidated Balance Sheets when the 2011 Notes were repaid at maturity. See Note 9, Long-Term Debt Deferred costs recoverable in future years of $23.8 million as of September 30, 2018 and December 31, 2017 represent operating costs incurred from the inception of Sharyland through 2007. We have determined that these costs are probable of recovery through future rates based on orders of the Public Utility Commission of Texas (PUCT) in Sharyland’s prior rate cases and regulatory precedent. In connection with the acquisition of Cap Rock Holding Corporation, we received a participation in the National Rural Utilities Cooperative Finance Corporation. We account for this investment under the cost method of accounting. We believe that the investment is not impaired as of September 30, 2018 and December 31, 2017. |
Borrowings Under Credit Facilit
Borrowings Under Credit Facilities | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Borrowings Under Credit Facilities | 8 . Borrowings Under Credit Facilities InfraREIT LP Revolving Credit Facility In 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 us and 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 9, 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 administrative agent’s 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 September 30, 2018 and December 31, 2017, 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 September 30, 2018 and December 31, 2017, InfraREIT LP was in compliance with all debt covenants under the credit agreement. SDTS Revolving Credit Facility In 2014, SDTS entered into the third amended and restated credit agreement led by Royal Bank of Canada, as administrative agent, with a maturity date of December 10, 2019. The credit agreement contains a revolving credit facility with a borrowing capacity up to $250.0 million with up to $25.0 million of the revolving credit facility available for issuance of letters of credit and up to $5.0 million of the revolving credit facility available for swingline loans. The revolving credit facility is secured by certain of SDTS’s regulated 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 below in Note 9, 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 September 30, 2018, SDTS had $101.0 million of borrowings outstanding at a weighted average interest rate of 4.21%, no letters of credit outstanding and $149.0 million of borrowing capacity available under this revolving credit facility. As of December 31, 2017, SDTS had $41.0 million of borrowings outstanding at a weighted average interest rate of 3.12% with no letters of credit outstanding and $209.0 million of borrowing capacity available under this revolving credit facility. As of September 30, 2018 and December 31, 2017, 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 | 9 Months Ended |
Sep. 30, 2018 | |
Debt Instruments [Abstract] | |
Long-Term Debt | 9 . Long-Term Debt Long-term debt consisted of the following: September 30, 2018 December 31, 2017 (Dollar amounts in thousands) Maturity Date Amount Outstanding Interest Rate Amount Outstanding Interest Rate TDC Senior secured notes - $25.0 million December 30, 2020 $ 15,313 8.50% $ 16,250 8.50% SDTS Senior secured notes - $60.0 million June 20, 2018 — n/a 60,000 5.04% Senior secured term loan - $200.0 million June 5, 2020 200,000 3.42% 200,000 2.71% 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% 100,000 3.86% Senior secured notes - $53.5 million December 30, 2029 38,905 7.25% 40,546 7.25% Senior secured notes - $110.0 million September 30, 2030 89,214 6.47% 92,821 6.47% Total SDTS debt 828,119 893,367 Total long-term debt 843,432 909,617 Less unamortized deferred financing costs (72 ) (97 ) Total long-term debt, less deferred financing costs 843,360 909,520 Less current portion of long-term debt (8,667 ) (68,305 ) Debt classified as long-term debt, less deferred financing costs $ 834,693 $ 841,215 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 7, Borrowings Under Credit Facilities SDTS had $60.0 million aggregate principal amount of 5.04% per annum senior secured notes that were issued to The Prudential Insurance Company of America and affiliates in 2011 (2011 Notes). Interest was payable quarterly while no principal payments were due until maturity. These notes were paid in full at maturity during June 2018 with proceeds from SDTS’s revolving credit facility. In 2017, SDTS entered into a $200.0 million senior secured term loan credit facility (2017 Term Loan) with Canadian Imperial Bank of Commerce, New York Branch (CIBC) and Mizuho Bank, Ltd., as lenders, and CIBC as administrative agent. The interest rate for the 2017 Term Loan 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 0.5% and (c) LIBOR plus 1.00% per annum, plus a margin of 0.25% per annum or (2) LIBOR plus a margin of 1.25% per annum. The LIBOR interest period may be one, two, three or six months, but interest is payable no less frequently than quarterly. In 2015, SDTS issued $400.0 million series A senior secured notes (Series A Notes), and in 2016 issued an additional $100.0 million series B senior secured notes (Series B Notes). These senior secured notes are due at maturity and bear interest at a rate of 3.86% per annum, payable semi-annually. The outstanding accrued interest payable on the Series A Notes is due each June and December while the accrued interest payable on the Series B Notes is due 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 the 2009 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 the 2010 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. SDTS is entitled to prepay amounts outstanding under the 2017 Term Loan with no prepayment penalty. The 2017 Term Loan is also subject to required prepayments upon the occurrence of certain events. The agreements governing the senior secured notes and 2017 Term Loan contain customary covenants, such as debt to capitalization ratios, debt service coverage ratios, limitations 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 September 30, 2018 and December 31, 2017, SDTS and TDC were in compliance with all debt covenants under the applicable agreements. See Note 20, Subsequent Events SDTS’s Series A Notes, Series B Notes, 2009 Notes, 2010 Notes and 2017 Term Loan are, and the 2011 Notes were, secured by certain of SDTS’s regulated 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 8, Borrowings Under Credit Facilities The senior secured notes of TDC and SDTS and 2017 Term Loan 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. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 10 . Fair Value of Financial Instruments The carrying amounts of our 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. We had fixed interest rate borrowings totaling $643.4 million and $709.6 million under our senior secured notes with a weighted average interest rate of 4.5% and 4.6% per annum as of September 30, 2018 and December 31, 2017, respectively. The fair value of these borrowings was estimated using discounted cash flow analysis based on current market rates. As of September 30, 2018 and December 31, 2017, we had $200.0 million of borrowings under our 2017 Term Loan that accrues interest under a floating interest rate structure, which is typically repriced every month or three months. Accordingly, the carrying value of such indebtedness approximated its fair value for the amounts outstanding. 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 September 30, 2018 Long-term debt $ 843,432 $ — $ 859,303 $ — December 31, 2017 Long-term debt $ 909,617 $ — $ 950,522 $ — |
Regulatory Matters
Regulatory Matters | 9 Months Ended |
Sep. 30, 2018 | |
Public Utilities Rate Matters [Abstract] | |
Regulatory Matters | 1 1 . Regulatory Matters Regulatory Liability Regulatory liabilities are as follows: (In thousands) September 30, 2018 December 31, 2017 Cost of removal $ 56,032 $ 44,679 Excess ADFIT 55,779 55,779 Regulatory liabilities $ 111,811 $ 100,458 Our regulatory liability related to cost of removal is established through depreciation rates and represents amounts that we expect to incur in the future. The regulatory liability is recorded as a long-term liability net of actual removal costs incurred. As an owner of regulated utility assets, we established an accumulated deferred federal income tax (ADFIT) balance for regulatory purposes primarily associated with the difference between U.S. GAAP and federal income tax depreciation on our assets. This ADFIT was calculated based on a 35% corporate federal income tax rate but was not recorded on our consolidated balance sheets or income statements due to the expectation that we would not pay corporate federal income taxes as a result of our REIT structure. With the passage of the Tax Cuts and Jobs Act (TCJA), the corporate federal income tax rate was reduced to 21% effective for tax years beginning on or after January 1, 2018. Regulatory accounting rules require utilities to revalue their ADFIT balances based on a change in corporate federal income tax rates, to remove the difference from ADFIT and to create a regulatory liability for the reduction in ADFIT. Therefore, we reduced the ADFIT by $55.8 million and created a regulatory liability for regulatory purposes. Additionally, in accordance with Accounting Standards Codification (ASC) Topic 980, Regulated Operations Liabilities Rate Case Filing In January 2014, the PUCT approved a rate case (2013 Rate Case) filed by Sharyland applicable to our regulated assets providing for a capital structure consisting of 55% debt and 45% equity; a cost of debt of 6.73%; a return on equity of 9.70%; and a return on invested capital of 8.06% in calculating rates. The new rates became effective May 1, 2014. Under the order approving the 2013 Rate Case, Sharyland was required to file its next rate case in 2016 (2016 Rate Case). In November 2017, the 2016 Rate Case was dismissed resulting in the 2013 Rate Case regulatory parameters remaining in place. As part of the PUCT order approving the 2017 Asset Exchange Transaction, the PUCT also granted SDTS a CCN to continue to own and lease its assets to Sharyland. Under existing PUCT orders, SDTS and Sharyland are required to file a new rate case by July 1, 2020 using the test year ending December 31, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 1 2 . Commitments and Contingencies From time to time, we are a party to various legal proceedings arising in the ordinary course of business. Although we cannot predict the outcome of any such legal proceedings, we do not believe the resolution of these proceedings, individually or in the aggregate, will have a material impact on our business, financial condition or results of operations, liquidity or cash flows. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Equity | 1 3 . Equity We and the Operating Partnership declared cash dividends on common stock and distributions on OP Units of $0.75 per share or unit, as applicable, during each of the nine months ended September 30, 2018 and 2017. We paid a total of $45.5 million in dividends and distributions during each of the nine months ended September 30, 2018 and 2017. |
Noncontrolling Interest
Noncontrolling Interest | 9 Months Ended |
Sep. 30, 2018 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | 1 4 . Noncontrolling Interest We present as a noncontrolling interest the portion of any equity in entities that we control and consolidate but do not own. Generally, OP Units of our 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 OP Units held by such limited partner. At our option, we may satisfy this redemption requirement with cash or by exchanging shares of InfraREIT, Inc. common stock on a one-for-one basis. As of September 30, 2018 and December 31, 2017, there were a total of 16.7 million and 16.9 million OP Units, respectively, held by the limited partners of the Operating Partnership. During the nine months ended September 30, 2018 and 2017, an aggregate of 28,952 and 31,633 long-term incentive units (LTIP Units), respectively, were issued by the Operating Partnership to members of our board of directors. For additional information, refer to Note 17, Share-Based Compensation We follow the guidance issued by the FASB regarding the classification and measurement of redeemable securities. Accordingly, we have determined that the OP Units meet the requirements to be classified as permanent equity. During the nine months ended September 30, 2018, we redeemed 165,252 OP Units with the issuance of 165,252 shares of common stock. We redeemed 23,349 OP Units with the issuance of 23,349 shares of common stock during the nine months ended September 30, 2017. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
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 our common stock, if such redemption were dilutive. The redemption of OP Units would have been anti-dilutive during the three and nine months ended September 30, 2018 and 2017. Earnings per share are calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except per share data) 2018 2017 2018 2017 Basic net income per share: Net income attributable to InfraREIT, Inc. $ 14,271 $ 15,330 $ 44,469 $ 30,587 Weighted average common shares outstanding 43,962 43,784 43,919 43,779 Basic net income per share $ 0.32 $ 0.35 $ 1.01 $ 0.70 Diluted net income per share: Net income attributable to InfraREIT, Inc. $ 14,271 $ 15,330 $ 44,469 $ 30,587 Weighted average common shares outstanding 43,962 43,784 43,919 43,779 Redemption of Operating Partnership units — — — — Weighted average dilutive shares outstanding 43,962 43,784 43,919 43,779 Diluted net income per share $ 0.32 $ 0.35 $ 1.01 $ 0.70 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 $ 5,435 $ 5,908 $ 16,937 $ 11,797 Redemption of Operating Partnership units 16,742 16,891 16,785 16,896 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2018 | |
Leases [Abstract] | |
Leases | 1 6 . Leases The following table shows the composition of our lease revenue: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 Base rent (straight-line) $ 48,390 $ 42,336 $ 141,873 $ 122,382 Percentage rent 536 9,282 536 9,282 Total lease revenue $ 48,926 $ 51,618 $ 142,409 $ 131,664 SDTS has entered into various leases with Sharyland for all our placed in service regulated assets. The master lease agreements, as amended, expire at various dates from December 31, 2019 through December 31, 2022. Our leases primarily consist of base rent, but certain lease supplements contain percentage rent as well. The lease supplements governing the Stanton Transmission Loop, Permian Basin assets and assets acquired in the 2017 Asset Exchange Transaction, which are part of the competitive renewable energy zones (CREZ) assets, only provide for base rent. Rent for the assets in McAllen and the CREZ assets not acquired in the 2017 Asset Exchange Transaction is comprised primarily of base rent but also includes percentage rent. Prior to its termination on December 31, 2017, the lease that previously covered the Permian Basin assets as well as the assets in Brady and Celeste, Texas that were transferred to Oncor in the 2017 Asset Exchange Transaction also included a percentage rent component. Percentage rent under our leases is based on a percentage of Sharyland’s annual gross revenue, as defined in the applicable lease, in excess of annual specified breakpoints, which are at least equal to the base rent under each lease. The rate used for percentage rent for the reported time periods varies by lease and ranges from a high of 31% to a low of 23%. Because an annual specified breakpoint must be met under our leases before we can recognize any percentage rent, we anticipate that little to no percentage rent will be recognized in the first and second quarters of each year, with the largest amounts of percentage rent recognized during the third and fourth quarters of each year. See Note 20, Subsequent Events |
Share Based Compensation
Share Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | 1 7 . Share-Based Compensation We currently utilize the InfraREIT, Inc. 2015 Equity Incentive Plan primarily for the annual compensation of the non-executive directors for their service on our board of directors. The following table shows the aggregate LTIP Units issued to members of our board of directors during the nine months ended September 30, 2018 and 2017: Grant Date LTIP Units Grant Date Fair Value per LTIP Unit Aggregate Fair Value (in thousands) Vesting Date January 2017 31,633 $ 18.02 $ 570 January 2018 January 2018 28,952 18.61 539 January 2019 As part of our board of directors’ quarterly compensation, each non-executive director can, subject to certain exceptions, elect to receive part of their compensation in our common stock instead of cash with full vesting upon issuance. During 2017 and 2018, all directors elected to receive their quarterly compensation in cash. The compensation expense, which represents the fair value of the stock or LTIP Unit measured at market price at the date of grant, is recognized on a straight-line basis over the vesting period. For each of the three months ended September 30, 2018 and 2017, $0.1 million was recognized as compensation expense related to these grants and is included in general and administrative expense on the Consolidated Statements of Operations. We recognized $0.4 million of compensation expense during each of the nine months ended September 30, 2018 and 2017. The unamortized compensation expense related to these grants was $0.1 million as of September 30, 2018. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 18. Income Taxes Historically, we have accrued for potential taxes, penalties and interest related to Texas state franchise taxes on our rental income on our Consolidated Balance Sheets. However, during the second quarter of 2018, we reached a settlement with the state of Texas in which no franchise taxes were owed on lease revenue for all tax years through 2017. As a result, the accrued liability for these potential taxes of $4.9 million and penalties and interest of $0.7 million were removed from our Consolidated Balance Sheets and recognized as an income tax benefit on our Consolidated Statements of Operations during the second quarter of 2018. The tax portion of the liability represented unrecognized tax benefits that, if recognized, would have impacted our effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows: (In thousands) September 30, 2018 December 31, 2017 Balance at beginning of period $ 4,864 $ 3,827 Additions based on tax positions related to the current year — 1,037 Settlements (4,864 ) — Balance at end of period $ — $ 4,864 As a result of the Texas franchise tax settlement, we began accruing and paying Texas franchise tax on our gross lease revenues effective January 1, 2018. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | 1 9 . Supplemental Cash Flow Information Supplemental cash flow information and non-cash investing and financing activities are as follows: Nine Months Ended September 30, (In thousands) 2018 2017 Supplemental cash flow information Cash paid for interest $ 28,317 $ 26,004 Non-cash investing and financing activities Change in accrued additions to electric plant (2,943 ) 8,901 Allowance for funds used during construction - debt 1,971 2,261 Redemption of operating partnership units for common stock 3,133 492 Dividends and distributions payable 15,176 15,169 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 20. Subsequent Events Pending Corporate Transactions Sale and Asset Exchange On October 18, 2018, InfraREIT and InfraREIT LP entered into a definitive agreement to be acquired by Oncor for $21.00 per share or OP Unit, as applicable, in cash, valued at approximately $1.275 billion, plus the assumption of our net debt of approximately $940 million as of September 30, 2018. As a condition to Oncor’s acquisition of InfraREIT, SDTS and Oncor also signed a definitive agreement with Sharyland to exchange, immediately prior to Oncor’s acquisition, SDTS’s South Texas assets for Sharyland’s Golden Spread Electric Cooperative interconnection located in the Texas Panhandle, along with certain development projects in the Texas Panhandle and South Plains regions, including the Lubbock Power & Light interconnection. The difference between the net book value of the exchanged assets will be paid in cash at closing. SDTS and Sharyland have agreed to terminate their existing leases in connection with the asset exchange. The asset exchange with Sharyland and merger with Oncor are mutually dependent on one another and neither will become effective without the closing of the other. Arrangements with Hunt Under our management agreement with Hunt Manager, which will be terminated upon the closing of the transactions, Hunt Manager is entitled to the payment of a termination fee upon the termination or non-renewal of the management agreement. The termination of the management agreement automatically triggers the termination of the development agreement between us and Hunt. We have agreed to pay Hunt approximately $40.5 million at the closing of the transactions to terminate the management agreement, development agreement, leases with Sharyland, and all other existing agreements between InfraREIT or our subsidiaries and Hunt, Sharyland or their affiliates. This amount is consistent with the termination fee that is contractually required under the management agreement. Closing Conditions The closing of the transactions is dependent upon and will be subject to several closing conditions, including: PUCT approval of the transactions; other regulatory approvals; stockholder approval; certain lender consents; the substantially concurrent closing of the acquisition by an affiliate of Sempra Energy of a 50% limited partnership interest in Sharyland Holdings, LP, which will own a 100% interest in Sharyland; and other customary closing conditions. Timeline Under the definitive agreements, SDTS, Sharyland and Oncor are required to file a Sale-Transfer-Merger application with the PUCT no later than November 30, 2018. A special meeting of our stockholders will be held following the filing of the definitive proxy statement with the SEC and subsequent mailing to our stockholders, which is expected to be filed by December 10, 2018. The transactions are expected to close by mid-2019. |
Description of Business and P_2
Description of Business and Presentation of Financial Statements (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation InfraREIT, Inc. is a Maryland corporation, which may be referred to in these financial statements as the “Company,” “InfraREIT,” “we,” “us” and “our.” These unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. For further information, refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the U.S. Securities and Exchange Commission (SEC) on March 5, 2018 (2017 Form 10-K). We held 72.4% of the outstanding partnership units (OP Units) in InfraREIT Partners, LP (Operating Partnership or InfraREIT LP) as of September 30, 2018 and are its general partner. We include the accounts of the Operating Partnership and its subsidiaries in our consolidated financial statements. Hunt Consolidated, Inc. (Hunt) affiliates, current or former employees and members of our board of directors held the other 27.6% of the outstanding OP Units as of September 30, 2018. |
Use of Estimates | Use of Estimates The preparation of our 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. |
Recent Accounting Guidance | Recent Accounting Guidance Recently Adopted Accounting Guidance In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Clarification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 203): Restricted Cash (A Consensus of the FASB Emerging Issues Task Force) Recent Accounting Guidance Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 Leases (Topic 842): Targeted Improvements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement |
Cash, Cash Equivalents and Re_2
Cash, Cash Equivalents and Restricted Cash (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Cash And Cash Equivalents [Abstract] | |
Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash within Consolidated Balance Sheets | The following table provides a reconciliation of cash, cash equivalents and restricted cash within the Consolidated Balance Sheets that sum to the total of the same such amounts shown on the Consolidated Statements of Cash Flows: September 30, (In thousands) 2018 2017 Cash and cash equivalents $ 3,223 $ 4,186 Restricted cash 1,687 1,682 Total cash, cash equivalents and restricted cash shown on the Statement of Cash Flows $ 4,910 $ 5,868 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Annual Base Fees | The annual base fees through March 31, 2019 are as follows: (In millions) Base Fee April 1, 2016 - March 31, 2017 $ 14.0 April 1, 2017 - March 31, 2018 14.2 April 1, 2018 - March 31, 2019 13.5 |
Electric Plant and Depreciati_2
Electric Plant and Depreciation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Public Utilities Property Plant And Equipment [Abstract] | |
Schedule of Major Classes of Electric Plant | The major classes of electric plant are as follows: (In thousands) September 30, 2018 December 31, 2017 Electric plant: Transmission plant $ 1,784,175 $ 1,685,466 Distribution plant 151,458 143,865 General plant 3,023 3,023 Total plant in service 1,938,656 1,832,354 Construction work in progress 60,027 113,643 Total electric plant 1,998,683 1,945,997 Accumulated depreciation (198,166 ) (173,768 ) Electric plant, net $ 1,800,517 $ 1,772,229 |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Summary of Other Assets | Other assets are as follows: September 30, 2018 December 31, 2017 (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 $ (736 ) $ 231 $ 967 $ (591 ) $ 376 Other regulatory assets: Deferred financing costs 10,365 (5,137 ) 5,228 28,570 (20,944 ) 7,626 Deferred costs recoverable in future years 23,793 — 23,793 23,793 — 23,793 Other regulatory assets 34,158 (5,137 ) 29,021 52,363 (20,944 ) 31,419 Investments 2,519 — 2,519 2,519 — 2,519 Other assets $ 37,644 $ (5,873 ) $ 31,771 $ 55,849 $ (21,535 ) $ 34,314 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Instruments [Abstract] | |
Components of Long-Term Debt | Long-term debt consisted of the following: September 30, 2018 December 31, 2017 (Dollar amounts in thousands) Maturity Date Amount Outstanding Interest Rate Amount Outstanding Interest Rate TDC Senior secured notes - $25.0 million December 30, 2020 $ 15,313 8.50% $ 16,250 8.50% SDTS Senior secured notes - $60.0 million June 20, 2018 — n/a 60,000 5.04% Senior secured term loan - $200.0 million June 5, 2020 200,000 3.42% 200,000 2.71% 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% 100,000 3.86% Senior secured notes - $53.5 million December 30, 2029 38,905 7.25% 40,546 7.25% Senior secured notes - $110.0 million September 30, 2030 89,214 6.47% 92,821 6.47% Total SDTS debt 828,119 893,367 Total long-term debt 843,432 909,617 Less unamortized deferred financing costs (72 ) (97 ) Total long-term debt, less deferred financing costs 843,360 909,520 Less current portion of long-term debt (8,667 ) (68,305 ) Debt classified as long-term debt, less deferred financing costs $ 834,693 $ 841,215 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 Long-term debt $ 843,432 $ — $ 859,303 $ — December 31, 2017 Long-term debt $ 909,617 $ — $ 950,522 $ — |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Public Utilities Rate Matters [Abstract] | |
Summary of Regulatory Liabilities | Regulatory liabilities are as follows: (In thousands) September 30, 2018 December 31, 2017 Cost of removal $ 56,032 $ 44,679 Excess ADFIT 55,779 55,779 Regulatory liabilities $ 111,811 $ 100,458 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Earnings Per Share | Earnings per share are calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except per share data) 2018 2017 2018 2017 Basic net income per share: Net income attributable to InfraREIT, Inc. $ 14,271 $ 15,330 $ 44,469 $ 30,587 Weighted average common shares outstanding 43,962 43,784 43,919 43,779 Basic net income per share $ 0.32 $ 0.35 $ 1.01 $ 0.70 Diluted net income per share: Net income attributable to InfraREIT, Inc. $ 14,271 $ 15,330 $ 44,469 $ 30,587 Weighted average common shares outstanding 43,962 43,784 43,919 43,779 Redemption of Operating Partnership units — — — — Weighted average dilutive shares outstanding 43,962 43,784 43,919 43,779 Diluted net income per share $ 0.32 $ 0.35 $ 1.01 $ 0.70 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 $ 5,435 $ 5,908 $ 16,937 $ 11,797 Redemption of Operating Partnership units 16,742 16,891 16,785 16,896 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Leases [Abstract] | |
Schedule of Composition of Lease Revenue | The following table shows the composition of our lease revenue: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2018 2017 2018 2017 Base rent (straight-line) $ 48,390 $ 42,336 $ 141,873 $ 122,382 Percentage rent 536 9,282 536 9,282 Total lease revenue $ 48,926 $ 51,618 $ 142,409 $ 131,664 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Aggregate LTIP Units Issued to Board of Directors | The following table shows the aggregate LTIP Units issued to members of our board of directors during the nine months ended September 30, 2018 and 2017: Grant Date LTIP Units Grant Date Fair Value per LTIP Unit Aggregate Fair Value (in thousands) Vesting Date January 2017 31,633 $ 18.02 $ 570 January 2018 January 2018 28,952 18.61 539 January 2019 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Unrecognized Tax Benefits | The tax portion of the liability represented unrecognized tax benefits that, if recognized, would have impacted our effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows: (In thousands) September 30, 2018 December 31, 2017 Balance at beginning of period $ 4,864 $ 3,827 Additions based on tax positions related to the current year — 1,037 Settlements (4,864 ) — Balance at end of period $ — $ 4,864 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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: Nine Months Ended September 30, (In thousands) 2018 2017 Supplemental cash flow information Cash paid for interest $ 28,317 $ 26,004 Non-cash investing and financing activities Change in accrued additions to electric plant (2,943 ) 8,901 Allowance for funds used during construction - debt 1,971 2,261 Redemption of operating partnership units for common stock 3,133 492 Dividends and distributions payable 15,176 15,169 |
Description of Business and P_3
Description of Business and Presentation of Financial Statements - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Description Of Business And Presentation Of Financial Statements [Line Items] | |
Percentage of partnership units outstanding | 72.40% |
Hunt Consolidated, Inc. | |
Description Of Business And Presentation Of Financial Statements [Line Items] | |
Percentage of partnership units outstanding | 27.60% |
2017 Asset Exchange Transacti_2
2017 Asset Exchange Transaction - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Nonmonetary Transaction [Line Items] | ||
Proceeds from asset exchange transaction | $ 1,632 | |
Sharyland Distribution & Transmission Services, L.L.C. | 2017 Asset Exchange Agreement | Oncor Electric Delivery Company LLC | ||
Nonmonetary Transaction [Line Items] | ||
Net assets exchanged | $ 403,000 | |
Transmission assets | 383,000 | |
Proceeds from asset exchange transaction | 18,000 | |
Gain on asset exchange transaction | 300 | |
Sharyland Distribution & Transmission Services, L.L.C. | 2017 Asset Exchange Agreement | Oncor Electric Delivery Company LLC | Prepaids and Other Current Assets | ||
Nonmonetary Transaction [Line Items] | ||
Receivable under asset exchange transaction | $ 2,000 |
Cash, Cash Equivalents and Re_3
Cash, Cash Equivalents and Restricted Cash - Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash within Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Cash And Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 3,223 | $ 2,867 | $ 4,186 | |
Restricted cash | 1,687 | 1,683 | 1,682 | |
Total cash, cash equivalents and restricted cash shown on the Statement of Cash Flows | $ 4,910 | $ 4,550 | $ 5,868 | $ 19,294 |
Cash, Cash Equivalents and Re_4
Cash, Cash Equivalents and Restricted Cash - Additional Information (Details) $ in Millions | Sep. 30, 2018USD ($) |
Transmission and Distribution Company, L.L.C | Senior Secured Notes, 8.50% | |
Restricted Cash And Cash Equivalents Items [Line Items] | |
Long-term debt, face amount | $ 25 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | ||||||
Due from affiliates | $ 33,401,000 | $ 33,401,000 | $ 35,172,000 | |||
Hunt Utility Services, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Payment for management fee | 10,300,000 | $ 14,100,000 | ||||
Prepaid management fee | 0 | 0 | 0 | |||
Accrued management fee | $ 0 | $ 0 | 0 | $ 3,500,000 | ||
Management agreement expiration date | Dec. 31, 2019 | |||||
Agreement successive renewal terms | 5 years | |||||
Management fee, description | The base fee for each 12 month period beginning each April 1 will equal 1.50% of our 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% | 1.50% | ||||
Management fee cap | $ 30,000,000 | $ 30,000,000 | ||||
Hunt Utility Services, LLC | License and Maintenence Fees | ||||||
Related Party Transaction [Line Items] | ||||||
Reimbursement of annual software license and maintenance fees and other expenses | 100,000 | 200,000 | ||||
Sharyland | ||||||
Related Party Transaction [Line Items] | ||||||
Lease revenue from related party | 48,900,000 | $ 51,600,000 | 142,400,000 | 131,700,000 | ||
Deferred rent liability | 14,600,000 | 14,600,000 | 14,700,000 | |||
Payments to acquire plant, and equipment | 48,300,000 | $ 151,200,000 | ||||
Accounts payable and accrued liabilities | 5,000,000 | 5,000,000 | 2,100,000 | |||
Due from affiliates | $ 33,400,000 | $ 33,400,000 | $ 35,200,000 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Annual Base Fees (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Annual base fees | $ 14.2 | $ 14 | |
Scenario, Forecast | |||
Related Party Transaction [Line Items] | |||
Annual base fees | $ 13.5 |
Electric Plant and Depreciati_3
Electric Plant and Depreciation - Schedule of Major Classes of Electric Plant (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Electric plant: | ||
Transmission plant | $ 1,784,175 | $ 1,685,466 |
Distribution plant | 151,458 | 143,865 |
General plant | 3,023 | 3,023 |
Total plant in service | 1,938,656 | 1,832,354 |
Construction work in progress | 60,027 | 113,643 |
Total electric plant | 1,998,683 | 1,945,997 |
Accumulated depreciation | (198,166) | (173,768) |
Electric plant, net | $ 1,800,517 | $ 1,772,229 |
Electric Plant and Depreciati_4
Electric Plant and Depreciation - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Public Utilities Property Plant And Equipment [Abstract] | ||
Electric plant, net includes plant acquisition adjustments | $ 28.6 | $ 29.4 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 138,384 | $ 138,384 |
Other Assets - Summary of Other
Other Assets - Summary of Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Other Assets Noncurrent [Abstract] | ||
Deferred financing costs on undrawn revolver, Gross Carrying Amount | $ 967 | $ 967 |
Other regulatory assets Deferred financing costs, Gross Carrying Amount | 10,365 | 28,570 |
Other regulatory assets Deferred costs recoverable in future years, Gross Carrying Amount | 23,793 | 23,793 |
Other regulatory assets, Gross Carrying Amount | 34,158 | 52,363 |
Investments, Gross Carrying Amount | 2,519 | 2,519 |
Other assets, Gross Carrying Amount | 37,644 | 55,849 |
Deferred financing costs on undrawn revolver, Accumulated Amortization | (736) | (591) |
Other regulatory assets Deferred financing costs, Accumulated Amortization | (5,137) | (20,944) |
Other regulatory assets, Accumulated Amortization | (5,137) | (20,944) |
Other assets, Accumulated Amortization | (5,873) | (21,535) |
Deferred financing costs on undrawn revolver, Net Carrying Amount | 231 | 376 |
Other regulatory assets Deferred financing costs, Net Carrying Amount | 5,228 | 7,626 |
Other regulatory assets Deferred costs recoverable in future years, Net Carrying Amount | 23,793 | 23,793 |
Other regulatory assets, Net Carrying Amount | 29,021 | 31,419 |
Investments, Net Carrying Amount | 2,519 | 2,519 |
Other assets, Net Carrying Amount | $ 31,771 | $ 34,314 |
Other Assets - Additional Infor
Other Assets - Additional Information (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Other Assets [Line Items] | ||
Other regulatory assets Deferred financing costs, Gross Carrying Amount | $ 10,365,000 | $ 28,570,000 |
Deferred costs recoverable in future years | 23,793,000 | 23,793,000 |
Investment impaired | 0 | $ 0 |
Senior Secured Notes, 5.04% | ||
Other Assets [Line Items] | ||
Other regulatory assets Deferred financing costs, Gross Carrying Amount | $ 18,200,000 |
Borrowings Under Credit Facil_2
Borrowings Under Credit Facilities - Additional Information (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2014 | Dec. 31, 2017 | |
InfraREIT LP Revolving Credit Facility | |||
Line Of Credit Facility [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 75,000,000 | ||
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 administrative agent’s 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%. | ||
Letter of credit fee multiplier | 2.50% | ||
Amount of revolving credit facility under agreement | $ 0 | $ 0 | |
Letters of credit outstanding amount | 0 | 0 | |
Line of credit facility, remaining borrowing capacity | $ 75,000,000 | 75,000,000 | |
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% | ||
InfraREIT LP Revolving Credit Facility | Letter Of Credit | |||
Line Of Credit Facility [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 15,000,000 | ||
Third Amended and Restated Credit Agreement | SDTS | |||
Line Of Credit Facility [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 250,000,000 | ||
Credit facility, maturity date | Dec. 10, 2019 | ||
Third Amended and Restated Credit Agreement | Letter Of Credit | SDTS | |||
Line Of Credit Facility [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 25,000,000 | ||
Third Amended and Restated Credit Agreement | Swingline Loans | SDTS | |||
Line Of Credit Facility [Line Items] | |||
Credit facility, maximum borrowing capacity | $ 5,000,000 | ||
Revolving Credit Facility | SDTS | |||
Line Of Credit Facility [Line Items] | |||
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 | ||
Amount of revolving credit facility under agreement | $ 101,000,000 | 41,000,000 | |
Line of credit facility, remaining borrowing capacity | $ 149,000,000 | $ 209,000,000 | |
Debt, weighted average interest rate | 4.21% | 3.12% | |
Revolving Credit Facility | Federal Funds Rate | SDTS | |||
Line Of Credit Facility [Line Items] | |||
Debt instrument, basis spread on variable rate | 0.50% | ||
Revolving Credit Facility | LIBOR | SDTS | |||
Line Of Credit Facility [Line Items] | |||
Debt instrument, basis spread on variable rate | 1.00% | ||
Revolving Credit Facility | LIBOR | SDTS | Minimum | |||
Line Of Credit Facility [Line Items] | |||
Debt instrument, basis spread on variable rate | 1.75% | ||
Revolving Credit Facility | LIBOR | SDTS | Maximum | |||
Line Of Credit Facility [Line Items] | |||
Debt instrument, basis spread on variable rate | 2.00% | ||
Revolving Credit Facility | Base Rate | SDTS | Minimum | |||
Line Of Credit Facility [Line Items] | |||
Debt instrument, basis spread on variable rate | 0.75% | ||
Revolving Credit Facility | Base Rate | SDTS | Maximum | |||
Line Of Credit Facility [Line Items] | |||
Debt instrument, basis spread on variable rate | 1.00% | ||
Revolving Credit Facility | Letter Of Credit | SDTS | |||
Line Of Credit Facility [Line Items] | |||
Amount of revolving credit facility under agreement | $ 0 | $ 0 |
Long-Term Debt - Components of
Long-Term Debt - Components of Long-Term Debt (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | |
Debt Instrument [Line Items] | |||||
Long-term debt, Amount Outstanding | $ 843,432 | $ 909,617 | |||
Less unamortized deferred financing costs | (72) | (97) | |||
Total long-term debt, less deferred financing costs | 843,360 | 909,520 | |||
Less current portion of long-term debt | (8,667) | (68,305) | |||
Debt classified as long-term debt, less deferred financing costs | $ 834,693 | $ 841,215 | |||
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 | $ 15,313 | $ 16,250 | |||
Interest bearing note, maturity date | Dec. 30, 2020 | ||||
SDTS | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, Amount Outstanding | $ 828,119 | $ 893,367 | |||
SDTS | 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 | ||||
Interest bearing note, maturity date | Jun. 20, 2018 | ||||
SDTS | 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 | Senior Secured Notes, 3.86% Maturing in 2026 | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, Interest Rate | 3.86% | 3.86% | |||
Long-term debt, Amount Outstanding | $ 100,000 | $ 100,000 | |||
Interest bearing note, maturity date | Jan. 14, 2026 | ||||
SDTS | 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 | $ 38,905 | $ 40,546 | |||
Interest bearing note, maturity date | Dec. 30, 2029 | ||||
SDTS | 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 | $ 89,214 | $ 92,821 | |||
Interest bearing note, maturity date | Sep. 30, 2030 | ||||
SDTS | Senior Secured Term Loan | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, Amount Outstanding | $ 200,000 | $ 200,000 | |||
Interest bearing note, maturity date | Jun. 5, 2020 | ||||
Long-term debt, Interest Rate | 3.42% | 2.71% |
Long-Term Debt - Components o_2
Long-Term Debt - Components of Long-Term Debt (Parenthetical) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 |
TDC | Senior Secured Notes, 8.50% | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, face amount | $ 25 | $ 25 | ||
SDTS | Senior Secured Notes, 5.04% | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, face amount | 60 | $ 60 | ||
SDTS | Senior Secured Term Loan | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, face amount | 200 | |||
SDTS | Senior Secured Notes, 3.86% | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, face amount | 400 | |||
SDTS | Senior Secured Notes, 3.86% Maturing in 2026 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, face amount | 100 | |||
SDTS | Senior Secured Notes, 7.25% | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, face amount | 53.5 | $ 53.5 | ||
SDTS | 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 | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | |
Debt Instrument [Line Items] | |||||||
Deferred financing costs, Net Carrying Amount | $ 231 | $ 376 | |||||
2017 Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, face amount | 200,000 | $ 200,000 | |||||
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 | $ 100 | $ 100 | |||||
SDTS | Senior Secured Notes, 5.04% | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, face amount | $ 60,000 | $ 60,000 | |||||
Long-term debt, stated interest rate | 5.04% | 5.04% | |||||
SDTS | 2017 Term Loan | Canadian Imperial Bank of Commerce, New York Branch and Mizuho Bank, Ltd. | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, face amount | $ 200,000 | ||||||
Interest rate description | The interest rate for the 2017 Term Loan 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 0.5% and (c) LIBOR plus 1.00% per annum, plus a margin of 0.25% per annum or (2) LIBOR plus a margin of 1.25% per annum. The LIBOR interest period may be one, two, three or six months, but interest is payable no less frequently than quarterly. | ||||||
SDTS | 2017 Term Loan | Canadian Imperial Bank of Commerce, New York Branch and Mizuho Bank, Ltd. | Federal Funds Rate | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 0.50% | ||||||
SDTS | 2017 Term Loan | Canadian Imperial Bank of Commerce, New York Branch and Mizuho Bank, Ltd. | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 1.00% | ||||||
SDTS | 2017 Term Loan | Canadian Imperial Bank of Commerce, New York Branch and Mizuho Bank, Ltd. | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 0.25% | ||||||
SDTS | 2017 Term Loan | Canadian Imperial Bank of Commerce, New York Branch and Mizuho Bank, Ltd. | One, Two, Three or Six Month London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 1.25% | ||||||
SDTS | 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% | ||||
SDTS | 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% | ||||
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% | ||||||
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% |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term Debt | $ 834,693 | $ 841,215 |
2017 Term Loan | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term debt, face amount | 200,000 | 200,000 |
Senior Secured Notes | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term Debt | $ 643,400 | $ 709,600 |
Debt, weighted average interest rate | 4.50% | 4.60% |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Carrying Value | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 843,432 | $ 909,617 |
Level 2 | Fair Value | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 859,303 | $ 950,522 |
Regulatory Matters - Summary of
Regulatory Matters - Summary of Regulatory Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Public Utilities General Disclosures [Line Items] | ||
Regulatory Liabilities | $ 111,811 | $ 100,458 |
Cost of Removal | ||
Public Utilities General Disclosures [Line Items] | ||
Regulatory Liabilities | 56,032 | 44,679 |
Excess ADFIT | ||
Public Utilities General Disclosures [Line Items] | ||
Regulatory Liabilities | $ 55,779 | $ 55,779 |
Regulatory Matters - Additional
Regulatory Matters - Additional Information (Details) - USD ($) $ in Thousands | May 01, 2014 | Sep. 30, 2018 | Dec. 31, 2017 |
Public Utilities General Disclosures [Line Items] | |||
Corporate federal income tax rate | 21.00% | 35.00% | |
Regulatory liability related to creation of excess accumulated deferred federal income tax | $ 55,800 | ||
Regulatory liabilities | 111,811 | $ 100,458 | |
Sharyland | |||
Public Utilities General Disclosures [Line Items] | |||
Public utilities, approved capital structure, debt percentage | 55.00% | ||
Public utilities, approved capital structure, equity percentage | 45.00% | ||
Public utilities, approved cost of debt percentage | 6.73% | ||
Public utilities, approved return on equity, percentage | 9.70% | ||
Public utilities, approved return on invested capital, percentage | 8.06% | ||
Excess ADFIT | |||
Public Utilities General Disclosures [Line Items] | |||
Regulatory liabilities | $ 55,779 | $ 55,779 |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Equity [Abstract] | ||||
Cash dividends declared per share to shareholders | $ 0.25 | $ 0.25 | $ 0.75 | $ 0.75 |
Cash distributions declared to unit holders, per unit | $ 0.75 | $ 0.75 | ||
Dividends and distributions paid | $ 45,521 | $ 45,499 |
Noncontrolling Interest - Addit
Noncontrolling Interest - Additional Information (Details) - shares | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
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 | 16,700,000 | 16,900,000 | |
Operating partnership units redeem | 165,252 | 23,349 | |
Common shares issued | 165,252 | 23,349 | |
LTIP Units | |||
Minority Interest [Line Items] | |||
Operating partnership units issued | 28,952 | 31,633 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Basic net income per share: | ||||
Net income attributable to InfraREIT, Inc. | $ 14,271 | $ 15,330 | $ 44,469 | $ 30,587 |
Weighted average common shares outstanding | 43,962 | 43,784 | 43,919 | 43,779 |
Basic net income per share | $ 0.32 | $ 0.35 | $ 1.01 | $ 0.70 |
Diluted net income per share: | ||||
Net income attributable to InfraREIT, Inc. | $ 14,271 | $ 15,330 | $ 44,469 | $ 30,587 |
Weighted average common shares outstanding | 43,962 | 43,784 | 43,919 | 43,779 |
Weighted average dilutive shares outstanding | 43,962 | 43,784 | 43,919 | 43,779 |
Diluted net income per share | $ 0.32 | $ 0.35 | $ 1.01 | $ 0.70 |
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 | $ 5,435 | $ 5,908 | $ 16,937 | $ 11,797 |
Redemption of Operating Partnership units | 16,742 | 16,891 | 16,785 | 16,896 |
Leases - Schedule of Compositio
Leases - Schedule of Composition of Lease Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Leases [Abstract] | ||||
Base rent (straight-line) | $ 48,390 | $ 42,336 | $ 141,873 | $ 122,382 |
Percentage rent | 536 | 9,282 | 536 | 9,282 |
Total lease revenue | $ 48,926 | $ 51,618 | $ 142,409 | $ 131,664 |
Leases - Additional Information
Leases - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Operating Leased Assets [Line Items] | |
Operating leases placed in services dates description | SDTS has entered into various leases with Sharyland for all our placed in service regulated assets. The master lease agreements, as amended, expire at various dates from December 31, 2019 through December 31, 2022. |
Lease expiration date range, start date | Dec. 31, 2019 |
Lease expiration date range, end date | Dec. 31, 2022 |
S/B/C Lease | |
Operating Leased Assets [Line Items] | |
Lease terminated date | Dec. 31, 2017 |
Maximum | |
Operating Leased Assets [Line Items] | |
Rate of rent used, Percentage | 31.00% |
Minimum | |
Operating Leased Assets [Line Items] | |
Rate of rent used, Percentage | 23.00% |
Share-Based Compensation - Aggr
Share-Based Compensation - Aggregate LTIP Units Issued to Board of Directors (Details) - 2015 Equity Incentive Plan - Director - LTIP Units - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Grant Date | 2018-01 | 2017-01 |
LTIP Units | 28,952 | 31,633 |
Grant Date Fair Value per Share | $ 18.61 | $ 18.02 |
Aggregate Fair Value | $ 539 | $ 570 |
Vesting Date | 2019-01 | 2018-01 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - 2015 Equity Incentive Plan - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Unamortized stock compensation expense | $ 100,000 | $ 100,000 | ||
General And Administrative Expense | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Compensation expenses | $ 100,000 | $ 100,000 | $ 400,000 | $ 400,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Income Tax Contingency [Line Items] | ||||
Accrued liability for potential taxes | $ 4,864 | |||
Texas | ||||
Income Tax Contingency [Line Items] | ||||
Franchise taxes on lease revenue | $ 0 | $ 0 | ||
Accrued liability for potential taxes | $ 4,900 | |||
Penalties and interest | $ 700 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Balance at beginning of period | $ 4,864 | $ 3,827 |
Additions based on tax positions related to the current year | 1,037 | |
Settlements | $ (4,864) | |
Balance at end of period | $ 4,864 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Supplemental Cash Flow Information and Non-cash Investing and Financing Activities (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Supplemental cash flow information | |||
Cash paid for interest | $ 28,317 | $ 26,004 | |
Non-cash investing and financing activities | |||
Change in accrued additions to electric plant | (2,943) | 8,901 | |
Allowance for funds used during construction - debt | 1,971 | 2,261 | |
Redemption of operating partnership units for common stock | 3,133 | 492 | |
Dividends and distributions payable | $ 15,176 | $ 15,169 | $ 15,169 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Oct. 18, 2018 | |
Sharyland Holdings, LP | ||
Subsequent Event [Line Items] | ||
Equity interest percentage | 50.00% | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | |
Hunt Consolidated, Inc. | ||
Subsequent Event [Line Items] | ||
Termination fee for termination agreement | $ 40.5 | |
Oncor Electric Delivery Company LLC | Definitive Agreement | ||
Subsequent Event [Line Items] | ||
Business combination, assumption of net debt | $ 940 | |
Subsequent Event | Oncor Electric Delivery Company LLC | Definitive Agreement | ||
Subsequent Event [Line Items] | ||
Business acquisition, share price | $ 21 | |
Business acquisition, value in cash | $ 1,275 |