Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 29, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | HIFR | |
Entity Registrant Name | InfraREIT, Inc. | |
Entity Central Index Key | 0001506401 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 44,005,370 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 3,487 | $ 1,808 |
Restricted cash | 1,693 | 1,689 |
Due from affiliates | 33,126 | 38,174 |
Inventory | 6,862 | 6,903 |
Prepaids and other current assets | 2,648 | 1,077 |
Total current assets | 47,816 | 49,651 |
Electric Plant, net | 1,814,584 | 1,811,317 |
Goodwill | 138,384 | 138,384 |
Other Assets | 31,671 | 31,678 |
Total Assets | 2,032,455 | 2,031,030 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 20,881 | 19,657 |
Short-term borrowings | 106,500 | 112,500 |
Current portion of long-term debt | 8,919 | 8,792 |
Dividends and distributions payable | 15,182 | 15,176 |
Accrued taxes | 1,307 | 1,052 |
Total current liabilities | 152,789 | 157,177 |
Long-Term Debt, Less Deferred Financing Costs | 830,185 | 832,455 |
Regulatory Liabilities | 119,362 | 115,532 |
Long-Term Operating Lease Liabilities | 345 | |
Total liabilities | 1,102,681 | 1,105,164 |
Commitments and Contingencies | ||
Equity | ||
Common stock, $0.01 par value; 450,000,000 shares authorized; 44,005,370 and 43,974,998 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | 440 | 440 |
Additional paid-in capital | 708,519 | 708,283 |
Accumulated deficit | (29,278) | (32,022) |
Total InfraREIT, Inc. equity | 679,681 | 676,701 |
Noncontrolling interest | 250,093 | 249,165 |
Total equity | 929,774 | 925,866 |
Total Liabilities and Equity | $ 2,032,455 | $ 2,031,030 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
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 | 44,005,370 | 43,974,998 |
Common stock, shares, outstanding | 44,005,370 | 43,974,998 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Lease revenue | $ 48,574 | $ 45,656 |
Operating costs and expenses | ||
General and administrative expense | 7,087 | 6,088 |
Depreciation | 12,204 | 11,577 |
Total operating costs and expenses | 19,291 | 17,665 |
Income from operations | 29,283 | 27,991 |
Other (expense) income | ||
Interest expense, net | (10,060) | (10,674) |
Other income, net | 1 | 733 |
Total other expense | (10,059) | (9,941) |
Income before income taxes | 19,224 | 18,050 |
Income tax expense | 255 | 286 |
Net income | 18,969 | 17,764 |
Less: Net income attributable to noncontrolling interest | 5,224 | 4,900 |
Net income attributable to InfraREIT, Inc. | $ 13,745 | $ 12,864 |
Net income attributable to InfraREIT, Inc. common stockholders per share: | ||
Basic | $ 0.31 | $ 0.29 |
Diluted | 0.31 | 0.29 |
Cash dividends declared per common share | $ 0.25 | $ 0.25 |
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, 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 | 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, 2018 | 925,866 | $ 440 | 708,283 | (32,022) | 676,701 | 249,165 |
Balance, shares at Dec. 31, 2018 | 43,974,998 | |||||
Dividends and distributions | $ (15,181) | (11,001) | (11,001) | (4,180) | ||
Redemption of operating partnership units for common stock | 116 | 116 | (116) | |||
Redemption of operating partnership units for common stock, shares | 7,698 | 7,698 | ||||
Common stock issued, shares | 22,674 | |||||
Net income | $ 18,969 | 13,745 | 13,745 | 5,224 | ||
Equity based compensation | 120 | 120 | 120 | |||
Balance at Mar. 31, 2019 | $ 929,774 | $ 440 | $ 708,519 | $ (29,278) | $ 679,681 | $ 250,093 |
Balance, shares at Mar. 31, 2019 | 44,005,370 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities | ||
Net income | $ 18,969 | $ 17,764 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 12,204 | 11,577 |
Amortization of deferred financing costs | 361 | 1,071 |
Allowance for funds used during construction - other funds | (730) | |
Equity based compensation | 120 | 140 |
Changes in assets and liabilities: | ||
Due from affiliates | 5,048 | 2,567 |
Inventory | 41 | (132) |
Prepaids and other current assets | (1,553) | (573) |
Accounts payable and accrued liabilities | 1,217 | 3,153 |
Net cash provided by operating activities | 36,407 | 34,837 |
Cash flows from investing activities | ||
Additions to electric plant | (11,396) | (15,011) |
Proceeds from asset exchange transaction | 1,632 | |
Net cash used in investing activities | (11,396) | (13,379) |
Cash flows from financing activities | ||
Proceeds from short-term borrowings | 22,000 | 12,000 |
Repayments of short-term borrowings | (28,000) | (17,500) |
Repayments of long-term debt | (2,152) | (2,032) |
Dividends and distributions paid | (15,176) | (15,169) |
Net cash used in financing activities | (23,328) | (22,701) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 1,683 | (1,243) |
Cash, cash equivalents and restricted cash at beginning of period | 3,497 | 4,550 |
Cash, cash equivalents and restricted cash at end of period | $ 5,180 | $ 3,307 |
Description of Business and Pre
Description of Business and Presentation of Financial Statements | 3 Months Ended |
Mar. 31, 2019 | |
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 three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. 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, 2018 filed with the U.S. Securities and Exchange Commission (SEC) on February 27, 2019 (2018 Form 10-K). We hold 72.5% of the outstanding partnership units (OP Units) in InfraREIT Partners, LP (Operating Partnership or InfraREIT LP) as of March 31, 2019 and are its general partner. We include the accounts of the Operating Partnership and its subsidiaries in our consolidated financial statements. Affiliates and current or former employees of Hunt Consolidated, Inc. (Hunt) and members of our board of directors hold the other 27.5% of the outstanding OP Units as of March 31, 2019. 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 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), Narrow-Scope Improvements for Lessors, Leases (Topic 842): Targeted Improvements, Leases Recent Accounting Guidance Not Yet Adopted 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 |
Pending Corporate Transactions
Pending Corporate Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Pending Corporate Transactions | 2 . 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 Electric Delivery Company LLC (Oncor) for $21.00 per share or OP Unit, as applicable, in cash, valued at approximately $1.275 billion, plus the assumption of InfraREIT’s net debt of approximately $940 million as of March 31, 2019. As a condition to Oncor’s acquisition of InfraREIT, Sharyland Distribution & Transmission, L.L.C. (SDTS) and Oncor also signed a definitive agreement with Sharyland Utilities, L.P. (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 the management agreement with Hunt Utility Services, LLC (Hunt Manager), which will be terminated upon the closing of the sale and asset exchange transaction described above, 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 InfraREIT and Hunt. InfraREIT has 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 its subsidiaries and Hunt, Sharyland or their affiliates. This amount is consistent with the termination fee, as calculated at the time the Company entered into the omnibus termination agreement, contractually required under the management agreement. Closing Conditions and Status The closing of the transactions is dependent upon and subject to several closing conditions, including: • Public Utility Commission of Texas (PUCT) approval of the transactions, including: o exchange of assets with Sharyland; o acquisition of InfraREIT by Oncor; and o Sempra Energy’s 50% ownership of Sharyland Holdings LP; • other necessary regulatory approvals, including approval by the Federal Energy Regulatory Commission (FERC), the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act) and clearance by the Committee on Foreign Investment in the United States (CFIUS); • stockholder approval; • certain lender consents; and • other customary closing conditions. Early termination of the 30-day waiting period required by the HSR Act was received in December 2018. In December 2018, the Operating Partnership’s wholly-owned subsidiary, Transmission and Distribution Company, L.L.C. (TDC) and SDTS entered into amendments that, effective as of the closing, will satisfy the closing condition with respect to the lender consents. Additionally, a special meeting of InfraREIT’s stockholders was held on February 7, 2019, at which time the stockholders voted to approve the transaction. Furthermore, in March 2019, CFIUS clearance was received for the transactions and FERC issued an order approving the transactions. SDTS, Sharyland, Oncor and Sempra Energy filed a Sale-Transfer-Merger (STM) application with the PUCT on November 30, 2018. In April 2019, the parties to the STM proceeding filed a Stipulation (Settlement) with the PUCT, which is subject to review and approval by the PUCT. A hearing on the merits was held on April 10, 2019. The 180-day deadline for the STM is May 29, 2019, although the PUCT is permitted to extend that deadline for an additional 60 days if necessary. During the three months ended March 31, 2019, we incurred expenses of $1.7 million for the sale of InfraREIT and related transactions which are included in general and administrative expense on our Consolidated Statements of Operations. We did not have these expenses during the three months ended March 31, 2018 as the definitive agreements with respect to the transactions were not executed until October 2018. We continue to expect the transactions to close by mid-2019, subject to obtaining the PUCT approval and satisfaction of other customary closing conditions. See Note 20, Subsequent Events |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash | 3 Months Ended |
Mar. 31, 2019 | |
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: March 31, (In thousands) 2019 2018 Cash and cash equivalents $ 3,487 $ 1,624 Restricted cash 1,693 1,683 Total cash, cash equivalents and restricted cash shown on the Statement of Cash Flows $ 5,180 $ 3,307 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 TDC, as described in Note 9, Long-Term Debt |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
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 from Oncor in 2017 when SDTS exchanged all of its retail distribution assets for a group of Oncor’s transmission assets located near Wichita Falls, Abilene and Brownwood, Texas (2017 Asset Exchange Transaction). Footprint Projects do not include the addition of a new substation on our existing transmission lines or generation interconnections to our existing transmission lines, unless the addition or interconnection occurred within our current or prior distribution service territories. We earned lease revenue from Sharyland under these agreements of $48.6 million and $45.7 million during the three months ended March 31, 2019 and 2018, respectively. In connection with our leases with Sharyland, we had a deferred rent liability of $9.8 million and $11.1 million as of March 31, 2019 and December 31, 2018, 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 three months ended March 31, 2019 and 2018, the net amount of payments we made to Sharyland was $9.9 million and $15.0 million, respectively. As of March 31, 2019 and December 31, 2018, accounts payable and accrued liabilities on the Consolidated Balance Sheets included $3.2 million and $2.9 million, respectively, related to amounts owed to Sharyland for construction costs incurred and property taxes paid on our behalf. As of March 31, 2019 and December 31, 2018, amounts due from affiliates on the Consolidated Balance Sheets included $33.1 million and $38.2 million, respectively, related to amounts owed by Sharyland primarily associated with our leases. The management fee paid to Hunt Manager for the three months ended March 31, 2019 and 2018 was $3.4 million and $3.5 million, respectively. There were no prepaid or accrued amounts associated with the management fees on the Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018. Additionally, during the three months ended March 31, 2019 and 2018, we paid Hunt Manager less than $0.1 million for reimbursement of annual software license and maintenance fees and other expenses in accordance with our management agreement. The 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. We must notify Hunt Manager no later than September 30, 2019 if we intend not to renew the management agreement at the end of its current term, which expires December 31, 2019. Otherwise, the management agreement will automatically renew for successive five-year terms unless a majority of our independent directors decides to terminate the agreement. The base fees through December 31, 2019 are as follows: (In millions) Base Fee April 1, 2017 - March 31, 2018 $ 14.2 April 1, 2018 - March 31, 2019 13.5 April 1, 2019 - December 31, 2019 10.4 If the management agreement is renewed under its current terms, we would owe $3.5 million for the first quarter of 2020, and the management fee owed for the subsequent 12-month period would be calculated as described above. If, instead, the management agreement is terminated, we would owe Hunt Manager a termination fee equal to three times the sum of the management fee paid during the four quarters prior to when the termination notice was given with payment due December 31, 2019. Assuming a termination notice of September 30, 2019, the termination fee would be approximately $41.1 million. 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 2, Pending Corporate Transactions 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. As a condition to Oncor’s acquisition of InfraREIT, in October 2018 SDTS entered into a definitive agreement to exchange certain assets with Sharyland. See Note 2, Pending Corporate Transactions In connection with the sale of InfraREIT and related transactions, in October 2018 we entered into an omnibus termination agreement pursuant to which the management agreement, development agreement, leases and all other existing agreements between us and Hunt, Sharyland or their affiliates will be terminated upon the closing. Under the omnibus termination agreement, we have agreed to pay Hunt approximately $40.5 million upon the closing of the sale. This amount is consistent with the termination fee, as calculated at the time we entered into the omnibus termination agreement, contractually required under the management agreement. For additional information, see Note 2, Pending Corporate Transactions |
Electric Plant and Depreciation
Electric Plant and Depreciation | 3 Months Ended |
Mar. 31, 2019 | |
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) March 31, 2019 December 31, 2018 Electric plant: Transmission plant $ 1,794,442 $ 1,794,438 Distribution plant 151,698 151,698 General plant 3,210 3,023 Total plant in service 1,949,350 1,949,159 Construction work in progress 77,568 66,121 Total electric plant 2,026,918 2,015,280 Accumulated depreciation (212,334 ) (203,963 ) Electric plant, net $ 1,814,584 $ 1,811,317 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 $28.2 million and $28.5 million as of March 31, 2019 and December 31, 2018, respectively. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 and December 31, 2018, $138.4 million was recorded as goodwill on the Consolidated Balance Sheets. |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Other Assets | 7 . Other Assets Other assets are as follows: March 31, 2019 December 31, 2018 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Deferred financing costs on undrawn revolver $ 1,025 $ (811 ) $ 214 $ 1,025 $ (779 ) $ 246 Other regulatory assets: Deferred financing costs 10,610 (5,810 ) 4,800 10,610 (5,490 ) 5,120 Deferred costs recoverable in future years 23,793 — 23,793 23,793 — 23,793 Other regulatory assets 34,403 (5,810 ) 28,593 34,403 (5,490 ) 28,913 Operating lease right-of-use asset 345 — 345 — — — Investments 2,519 — 2,519 2,519 — 2,519 Other assets $ 38,292 $ (6,621 ) $ 31,671 $ 37,947 $ (6,269 ) $ 31,678 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. Deferred costs recoverable in future years of $23.8 million at March 31, 2019 and December 31, 2018 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 PUCT in Sharyland’s prior rate cases and regulatory precedent. Operating lease right-of-use asset represents the asset associated with two land leases in which we are the lessee. For additional information see Note 16, Leases 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 March 31, 2019 and December 31, 2018. |
Borrowings Under Credit Facilit
Borrowings Under Credit Facilities | 3 Months Ended |
Mar. 31, 2019 | |
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. In December 2018, InfraREIT LP entered into an amendment to its revolving credit facility that extended the maturity date with respect to $67.0 million of the available revolving credit facility to December 10, 2020. The remaining $8.0 million of the available revolving credit facility will continue to mature on 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 March 31, 2019 and December 31, 2018, 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 March 31, 2019 and December 31, 2018, InfraREIT LP was in compliance with all debt covenants under the credit agreement. SDTS Revolving Credit Facility In 2014, SDTS entered into a third amended and restated credit agreement led by Royal Bank of Canada, as administrative agent. In December 2018, SDTS entered into an amendment to its revolving credit agreement that extended the maturity date from December 10, 2019 to December 10, 2020. 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 March 31, 2019, SDTS had $106.5 million of borrowings outstanding at a weighted average interest rate of 4.49%, no letters of credit outstanding and $143.5 million of borrowing capacity available under this revolving credit facility. As of December 31, 2018, SDTS had $112.5 million of borrowings outstanding at a weighted average interest rate of 4.59% with no letters of credit outstanding and $137.5 million of borrowing capacity available under this revolving credit facility. As of March 31, 2019 and December 31, 2018, 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 | 3 Months Ended |
Mar. 31, 2019 | |
Debt Instruments [Abstract] | |
Long-Term Debt | 9 . Long-Term Debt Long-term debt consisted of the following: March 31, 2019 December 31, 2018 (Dollar amounts in thousands) Maturity Date Amount Outstanding Interest Rate Amount Outstanding Interest Rate TDC Senior secured notes - $25.0 million December 30, 2020 $ 14,687 8.50% $ 15,000 8.50% SDTS Senior secured term loan - $200.0 million June 5, 2020 200,000 3.74% 200,000 3.73% 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 37,762 7.25% 38,338 7.25% Senior secured notes - $110.0 million September 30, 2030 86,712 6.47% 87,973 6.47% Total SDTS debt 824,474 826,311 Total long-term debt 839,161 841,311 Less unamortized deferred financing costs (57 ) (64 ) Total long-term debt, less deferred financing costs 839,104 841,247 Less current portion of long-term debt (8,919 ) (8,792 ) Debt classified as long-term debt, less deferred financing costs $ 830,185 $ 832,455 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 8, Borrowings Under Credit Facilities 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 March 31, 2019 and December 31, 2018, SDTS and TDC were in compliance with all debt covenants under the applicable agreements. See Note 2, Pending Corporate Transactions SDTS’s Series A Notes, Series B Notes, 2009 Notes, 2010 Notes and 2017 Term Loan are 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 | 3 Months Ended |
Mar. 31, 2019 | |
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 $639.2 million and $641.3 million under our senior secured notes with a weighted average interest rate of 4.5% per annum as of March 31, 2019 and December 31, 2018. The fair value of these borrowings was estimated using discounted cash flow analysis based on current market rates. As of March 31, 2019 and December 31, 2018, 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 March 31, 2019 Long-term debt $ 839,161 $ — $ 882,033 $ — December 31, 2018 Long-term debt $ 841,311 $ — $ 864,281 $ — |
Regulatory Matters
Regulatory Matters | 3 Months Ended |
Mar. 31, 2019 | |
Public Utilities Rate Matters [Abstract] | |
Regulatory Matters | 1 1 . Regulatory Matters Regulatory Liability Regulatory liabilities are as follows: (In thousands) March 31, 2019 December 31, 2018 Cost of removal $ 63,583 $ 59,753 Excess accumulated deferred federal income tax 55,779 55,779 Regulatory liabilities $ 119,362 $ 115,532 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. Prior to the enactment of the Tax Cuts and Jobs Act (TCJA) in December 2017, 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 real estate investment trust (REIT) structure. With the passage of the 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 Topic 980, Regulated Operations Liabilities Rate Setting We have separated, between Sharyland and SDTS, the functionality that is typically combined under one commonly owned group in an integrated utility. SDTS is generally responsible for financing and funding asset additions, while Sharyland is responsible for construction management, operation and maintenance of our regulated assets. Accordingly, the PUCT’s order approving our restructuring into a REIT structure required Sharyland and SDTS to be regulated on a combined basis, and Sharyland, as the holder of the certificate of convenience and necessity (CCN) required to operate our regulated assets, historically has made all regulatory filings related to our assets with the PUCT. As part of the rate case in Docket No. 45414 related to SDTS’s assets (2016 Rate Case), the PUCT raised certain questions indicating that this regulatory construct might change in the future, including the potential regulation of the leases between Sharyland and SDTS as tariffs. In November 2017, the 2016 Rate Case was dismissed upon the completion of the 2017 Asset Exchange Transaction (Rate Case Dismissal), but the dismissal preserved the right of the parties to the 2016 Rate Case to address in a future proceeding all issues not mooted by the Rate Case Dismissal. Additionally, as part of the PUCT order approving the 2017 Asset Exchange Transaction, SDTS was granted a separate CCN to continue to own and lease its assets to Sharyland. The regulatory parameters in Sharyland’s rates and applicable to our regulated assets provide 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. Additionally, Sharyland’s rates also reflect the recovery of an income tax allowance, with respect to our transmission assets, at the 21% corporate federal income tax rate and, with respect to our wholesale distribution assets, at the prior 35% corporate federal income tax rate. 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. If the sale of InfraREIT is not completed and we are required to move forward with the 2020 rate case, the outcome of that rate case will result in an adjustment to many of the current parameters applicable to our regulated assets. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
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 | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Equity | 1 3 . Equity We and the Operating Partnership declared cash dividends on common stock and distributions on OP Units of $0.25 per share or unit, as applicable, during each of the three months ended March 31, 2019 and 2018. We paid a total of $15.2 million in dividends and distributions during each of the three months ended March 31, 2019 and 2018. |
Noncontrolling Interest
Noncontrolling Interest | 3 Months Ended |
Mar. 31, 2019 | |
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 the Operating Partnership participate in net income allocations and distributions and entitle their holder to the right, subject to the terms set forth in the partnership agreement, to require the Operating Partnership to redeem all or a portion of the OP Units held by such limited partner. At our option, we may satisfy this redemption requirement with cash or by exchanging shares of our common stock on a one-for-one basis. As of March 31, 2019 and December 31, 2018, there were a total of 16.7 million OP Units held by the limited partners of the Operating Partnership. During the three months ended March 31, 2018, an aggregate of 28,952 long-term incentive units (LTIP Units) were issued by the Operating Partnership to members of our board of directors. There were no LTIP Units issued during the three months ended March 31, 2019. 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 three months ended March 31, 2019, we redeemed 7,698 OP Units with the issuance of 7,698 shares of common stock. We redeemed 163,969 OP Units with the issuance of 163,969 shares of common stock during the three months ended March 31, 2018. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
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 months ended March 31, 2019 and 2018. Earnings per share are calculated as follows: Three Months Ended March 31, (In thousands, except per share data) 2019 2018 Basic net income per share: Net income attributable to InfraREIT, Inc. $ 13,745 $ 12,864 Weighted average common shares outstanding 43,998 43,832 Basic net income per share $ 0.31 $ 0.29 Diluted net income per share: Net income attributable to InfraREIT, Inc. $ 13,745 $ 12,864 Weighted average common shares outstanding 43,998 43,832 Redemption of Operating Partnership units — — Weighted average dilutive shares outstanding 43,998 43,832 Diluted net income per share $ 0.31 $ 0.29 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 $ 5,224 $ 4,900 Redemption of Operating Partnership units 16,729 16,872 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | 1 6 . Leases Leases with SDTS as Lessor As part of the adoption of Topic 842, we elected to not reassess the lease classification for any expired or existing leases; therefore, all of the leases for our regulated assets will continue to be classified as operating leases. Additionally, we have elected to exclude lessor costs paid directly by Sharyland to third parties on our behalf from consideration in the contracts and from variable payments. The following table shows the composition of our lease revenue: Three Months Ended March 31, (In thousands) 2019 2018 Base rent (straight-line) $ 48,574 $ 45,656 Percentage rent — — Total lease revenue $ 48,574 $ 45,656 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. All of the rent with respect to the capital expenditures to be placed in service in 2019 consist only of base rent. 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 an annual breakpoint specified in each lease, 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 26% to 30%. Because an annual specified breakpoint must be met under our leases before we can recognize any percentage rent, we anticipate that revenue will grow over the year with little to no percentage rent recognized in the first and second quarters of each year, with the largest amounts recognized during the third and fourth quarters of each year. Future minimum rent revenue expected in accordance with these lease agreements is as follows for the years ending December 31: (In thousands) Total 2019 $ 194,068 2020 184,438 2021 9,089 2022 4,954 2023 — Thereafter — Total $ 392,549 See Note 2, Pending Corporate Transactions Leases with SDTS as Lessee As part of the adoption of Topic 842, we elected not to reassess existing or expired land easements that were not previously treated as leases; therefore, our existing land easements as of January 1, 2019 will continue to be treated as land and not land leases and will be included in electric plant, net on our Consolidated Balance Sheets. Land easements entered into or modified after January 1, 2019 will be evaluated under Topic 842 to determine if they meet the definition of a lease. We are the lessee under two land leases that are subleased to Sharyland under the master lease agreements described above under the caption Leases with SDTS as Lessor Both land leases are surface leases where the lessor retains the mineral rights. There were no initial direct costs incurred or residual value guarantees provided. The weighted-average remaining lease term is 43.2 years. The following table describes the main attributes of the land leases: Name of Lease Expiration Date Renewal Periods Rent Escalations Initial Annual Rent (In dollars) Brownsville November 1, 2067 None None $ 10,435 Scottish Rite-Rocky Road January 12, 2035 Four 5-year terms 5% increase every 5 years after initial term 8,000 We have recorded the operating lease right-of-use assets in prepaids and other current assets and other assets, and the lease liabilities in accounts payable and accrued liabilities and long-term operating lease liabilities on our Consolidated Balance Sheets as follows: (In thousands) March 31, 2019 Prepaid and other current assets $ 18 Other assets 345 Total right-of-use asset $ 363 Accounts payable and accrued liabilities $ 18 Long-term operating lease liabilities 345 Total operating lease liabilities $ 363 See Note 7, Other Assets In determining the right-of-use assets and operating lease liabilities, we used a discount rate of 4.25%, which is our incremental borrowing rate, and assumed that we would exercise all four five-year term extensions related to the Scottish Rite-Rocky Road lease. Rent expense for these operating leases is recognized on a straight-line basis over the lease term and is included in general and administrative expense on our Consolidated Statements of Operations. |
Share Based Compensation
Share Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
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 common stock issued to members of our board of directors for the three months ended March 31, 2019: Grant Date Shares of Common Stock Grant Date Value per Share Aggregate Fair Value (in thousands) Vesting Date January 2019 22,674 $ 21.15 $ 480 January 2020 There was no common stock issued to our directors during the three months ended March 31, 2018. The following table shows the aggregate LTIP Units issued to members of our board of directors for the three months ended March 31, 2018: Grant Date LTIP Units Grant Date Fair Value per LTIP Unit Aggregate Fair Value (in thousands) Vesting Date January 2018 28,952 $ 18.61 $ 539 January 2019 There were no LTIP Units issued to our directors during the three months ended March 31, 2019. As part of our board of directors’ quarterly compensation, each non-executive director can, subject to certain exceptions, elect to receive part of his or her compensation in our common stock instead of cash with full vesting upon issuance. During 2019 and 2018, all directors received their quarterly compensation in cash. The compensation expense, which represents the fair value of the common 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 March 31, 2019 and 2018, $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. The unamortized compensation expense related to these grants was $0.4 million as of March 31, 2019. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 18. Income Taxes Franchise Taxes Effective January 1, 2018, we began accruing and paying Texas franchise tax on our gross lease revenues. The accrued franchise tax is recorded in accrued taxes on our Consolidated Balance Sheets, while the expense is recognized in income tax expense on our Consolidated Statements of Operations. For each of the three months ended March 31, 2019 and 2018, $0.3 million was recognized related to Texas franchise tax on our gross lease revenues. Tax Cuts and Jobs Act In 2017, the TCJA was signed into law reducing the corporate federal income tax rate from 35% to 21%, effective for taxable years beginning on or after January 1, 2018. As a result of the reduction in the corporate federal income tax rate, we recorded $55.8 million as a regulatory liability on our Consolidated Balance Sheets as of December 31, 2017 related to the creation of excess ADFIT, related to our assets. See Note 11, Regulatory Matters |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 31, 2019 | |
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: Three Months Ended March 31, (In thousands) 2019 2018 Supplemental cash flow information Cash paid for interest $ 7,832 $ 7,469 Establishment of operating lease right-of-use assets and liabilities 363 — Non-cash investing and financing activities Change in accrued additions to electric plant (242 ) (2,902 ) Allowance for funds used during construction - debt 988 820 Redemption of operating partnership units for common stock 116 3,106 Dividends and distributions payable 15,182 15,176 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 20. Subsequent Events Pending Corporate Transactions In April 2019, the parties to the STM proceeding filed the Settlement with the PUCT reflecting an agreement to settle all outstanding issues in our STM in Docket No. 48929. The Settlement is supported or unopposed by all parties to the STM. The Settlement is subject to review and approval by the PUCT. A hearing on the merits was held on April 10, 2019. We continue to expect the transactions to close by mid-2019, subject to obtaining the PUCT approval and satisfaction of other customary closing conditions. |
Description of Business and P_2
Description of Business and Presentation of Financial Statements (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
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 three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. 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, 2018 filed with the U.S. Securities and Exchange Commission (SEC) on February 27, 2019 (2018 Form 10-K). We hold 72.5% of the outstanding partnership units (OP Units) in InfraREIT Partners, LP (Operating Partnership or InfraREIT LP) as of March 31, 2019 and are its general partner. We include the accounts of the Operating Partnership and its subsidiaries in our consolidated financial statements. Affiliates and current or former employees of Hunt Consolidated, Inc. (Hunt) and members of our board of directors hold the other 27.5% of the outstanding OP Units as of March 31, 2019. |
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 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), Narrow-Scope Improvements for Lessors, Leases (Topic 842): Targeted Improvements, Leases Recent Accounting Guidance Not Yet Adopted 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) | 3 Months Ended |
Mar. 31, 2019 | |
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: March 31, (In thousands) 2019 2018 Cash and cash equivalents $ 3,487 $ 1,624 Restricted cash 1,693 1,683 Total cash, cash equivalents and restricted cash shown on the Statement of Cash Flows $ 5,180 $ 3,307 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Annual Base Fees | The base fees through December 31, 2019 are as follows: (In millions) Base Fee April 1, 2017 - March 31, 2018 $ 14.2 April 1, 2018 - March 31, 2019 13.5 April 1, 2019 - December 31, 2019 10.4 |
Electric Plant and Depreciati_2
Electric Plant and Depreciation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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) March 31, 2019 December 31, 2018 Electric plant: Transmission plant $ 1,794,442 $ 1,794,438 Distribution plant 151,698 151,698 General plant 3,210 3,023 Total plant in service 1,949,350 1,949,159 Construction work in progress 77,568 66,121 Total electric plant 2,026,918 2,015,280 Accumulated depreciation (212,334 ) (203,963 ) Electric plant, net $ 1,814,584 $ 1,811,317 |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Summary of Other Assets | Other assets are as follows: March 31, 2019 December 31, 2018 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Deferred financing costs on undrawn revolver $ 1,025 $ (811 ) $ 214 $ 1,025 $ (779 ) $ 246 Other regulatory assets: Deferred financing costs 10,610 (5,810 ) 4,800 10,610 (5,490 ) 5,120 Deferred costs recoverable in future years 23,793 — 23,793 23,793 — 23,793 Other regulatory assets 34,403 (5,810 ) 28,593 34,403 (5,490 ) 28,913 Operating lease right-of-use asset 345 — 345 — — — Investments 2,519 — 2,519 2,519 — 2,519 Other assets $ 38,292 $ (6,621 ) $ 31,671 $ 37,947 $ (6,269 ) $ 31,678 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Instruments [Abstract] | |
Components of Long-Term Debt | Long-term debt consisted of the following: March 31, 2019 December 31, 2018 (Dollar amounts in thousands) Maturity Date Amount Outstanding Interest Rate Amount Outstanding Interest Rate TDC Senior secured notes - $25.0 million December 30, 2020 $ 14,687 8.50% $ 15,000 8.50% SDTS Senior secured term loan - $200.0 million June 5, 2020 200,000 3.74% 200,000 3.73% 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 37,762 7.25% 38,338 7.25% Senior secured notes - $110.0 million September 30, 2030 86,712 6.47% 87,973 6.47% Total SDTS debt 824,474 826,311 Total long-term debt 839,161 841,311 Less unamortized deferred financing costs (57 ) (64 ) Total long-term debt, less deferred financing costs 839,104 841,247 Less current portion of long-term debt (8,919 ) (8,792 ) Debt classified as long-term debt, less deferred financing costs $ 830,185 $ 832,455 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 Long-term debt $ 839,161 $ — $ 882,033 $ — December 31, 2018 Long-term debt $ 841,311 $ — $ 864,281 $ — |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Public Utilities Rate Matters [Abstract] | |
Summary of Regulatory Liabilities | Regulatory liabilities are as follows: (In thousands) March 31, 2019 December 31, 2018 Cost of removal $ 63,583 $ 59,753 Excess accumulated deferred federal income tax 55,779 55,779 Regulatory liabilities $ 119,362 $ 115,532 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Earnings Per Share | Earnings per share are calculated as follows: Three Months Ended March 31, (In thousands, except per share data) 2019 2018 Basic net income per share: Net income attributable to InfraREIT, Inc. $ 13,745 $ 12,864 Weighted average common shares outstanding 43,998 43,832 Basic net income per share $ 0.31 $ 0.29 Diluted net income per share: Net income attributable to InfraREIT, Inc. $ 13,745 $ 12,864 Weighted average common shares outstanding 43,998 43,832 Redemption of Operating Partnership units — — Weighted average dilutive shares outstanding 43,998 43,832 Diluted net income per share $ 0.31 $ 0.29 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 $ 5,224 $ 4,900 Redemption of Operating Partnership units 16,729 16,872 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Composition of Lease Revenue | The following table shows the composition of our lease revenue: Three Months Ended March 31, (In thousands) 2019 2018 Base rent (straight-line) $ 48,574 $ 45,656 Percentage rent — — Total lease revenue $ 48,574 $ 45,656 |
Schedule of Future Minimum Rent Revenue Expected in Accordance with Lease Agreement | Future minimum rent revenue expected in accordance with these lease agreements is as follows for the years ending December 31: (In thousands) Total 2019 $ 194,068 2020 184,438 2021 9,089 2022 4,954 2023 — Thereafter — Total $ 392,549 |
Schedule of Land Leases | The following table describes the main attributes of the land leases: Name of Lease Expiration Date Renewal Periods Rent Escalations Initial Annual Rent (In dollars) Brownsville November 1, 2067 None None $ 10,435 Scottish Rite-Rocky Road January 12, 2035 Four 5-year terms 5% increase every 5 years after initial term 8,000 |
Schedule of Right-of-use Assets and Operating Lease Liabilities | We have recorded the operating lease right-of-use assets in prepaids and other current assets and other assets, and the lease liabilities in accounts payable and accrued liabilities and long-term operating lease liabilities on our Consolidated Balance Sheets as follows: (In thousands) March 31, 2019 Prepaid and other current assets $ 18 Other assets 345 Total right-of-use asset $ 363 Accounts payable and accrued liabilities $ 18 Long-term operating lease liabilities 345 Total operating lease liabilities $ 363 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Aggregate Common Stock Issued to Members of Board of Directors | The following table shows the aggregate common stock issued to members of our board of directors for the three months ended March 31, 2019: Grant Date Shares of Common Stock Grant Date Value per Share Aggregate Fair Value (in thousands) Vesting Date January 2019 22,674 $ 21.15 $ 480 January 2020 |
Aggregate LTIP Units Issued to Board of Directors | The following table shows the aggregate LTIP Units issued to members of our board of directors for the three months ended March 31, 2018: Grant Date LTIP Units Grant Date Fair Value per LTIP Unit Aggregate Fair Value (in thousands) Vesting Date January 2018 28,952 $ 18.61 $ 539 January 2019 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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: Three Months Ended March 31, (In thousands) 2019 2018 Supplemental cash flow information Cash paid for interest $ 7,832 $ 7,469 Establishment of operating lease right-of-use assets and liabilities 363 — Non-cash investing and financing activities Change in accrued additions to electric plant (242 ) (2,902 ) Allowance for funds used during construction - debt 988 820 Redemption of operating partnership units for common stock 116 3,106 Dividends and distributions payable 15,182 15,176 |
Description of Business and P_3
Description of Business and Presentation of Financial Statements - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Jan. 01, 2019 | |
Description Of Business And Presentation Of Financial Statements [Line Items] | ||
Right-of-use assets | $ 363 | |
Operating lease liabilities | $ 363 | |
ASU 2016-02 | ||
Description Of Business And Presentation Of Financial Statements [Line Items] | ||
Right-of-use assets | $ 400 | |
Operating lease liabilities | $ 400 | |
InfraREIT LP | ||
Description Of Business And Presentation Of Financial Statements [Line Items] | ||
Percentage of partnership units outstanding | 72.50% | |
Hunt Consolidated, Inc. | InfraREIT LP | ||
Description Of Business And Presentation Of Financial Statements [Line Items] | ||
Percentage of partnership units outstanding | 27.50% |
Pending Corporate Transactions
Pending Corporate Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Oct. 18, 2018 | |
Business Acquisition [Line Items] | |||
Expenses on sale of business and related transactions | $ 0 | ||
General And Administrative Expense | |||
Business Acquisition [Line Items] | |||
Expenses on sale of business and related transactions | $ 1,700,000 | ||
Sharyland Holdings, LP | Sempra Energy | |||
Business Acquisition [Line Items] | |||
Equity interest percentage | 50.00% | ||
Hunt Consolidated, Inc. | |||
Business Acquisition [Line Items] | |||
Termination fee related to Sale of InfraREIT, Inc | $ 40,500,000 | ||
Oncor Electric Delivery Company LLC | Definitive Agreement | |||
Business Acquisition [Line Items] | |||
Business acquisition, share price | $ 21 | ||
Business acquisition, value in cash | $ 1,275,000,000 | ||
Business combination, assumption of net debt | $ 940,000,000 |
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 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Cash And Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 3,487 | $ 1,808 | $ 1,624 | |
Restricted cash | 1,693 | 1,689 | 1,683 | |
Total cash, cash equivalents and restricted cash shown on the Statement of Cash Flows | $ 5,180 | $ 3,497 | $ 3,307 | $ 4,550 |
Cash, Cash Equivalents and Re_4
Cash, Cash Equivalents and Restricted Cash - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2010 |
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 | $ 25 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2020 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||||
Due from affiliates | $ 33,126,000 | $ 38,174,000 | ||
Hunt Utility Services, LLC | ||||
Related Party Transaction [Line Items] | ||||
Payment for management fee | 3,400,000 | $ 3,500,000 | ||
Prepaid management fee | 0 | 0 | ||
Accrued management fee | 0 | 0 | ||
Reimbursement of annual software license and maintenance fees and other expenses | $ 100,000 | |||
Type of Cost, Good or Service [Extensible List] | us-gaap:LicenseAndMaintenanceMember | us-gaap:LicenseAndMaintenanceMember | ||
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% | |||
Management fee cap | $ 30,000,000 | |||
Hunt Utility Services, LLC | Scenario, Forecast | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties | $ 3,500,000 | |||
Hunt Utility Services, LLC | Maximum | ||||
Related Party Transaction [Line Items] | ||||
Reimbursement of annual software license and maintenance fees and other expenses | $ 100,000 | |||
Sharyland | ||||
Related Party Transaction [Line Items] | ||||
Lease revenue from related party | 48,600,000 | 45,700,000 | ||
Deferred rent liability | 9,800,000 | 11,100,000 | ||
Payments to acquire plant, and equipment | 9,900,000 | $ 15,000,000 | ||
Accounts payable and accrued liabilities | 3,200,000 | 2,900,000 | ||
Due from affiliates | 33,100,000 | $ 38,200,000 | ||
Termination Fee | Hunt Utility Services, LLC | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties | 41,100,000 | |||
Hunt Consolidated, Inc. | ||||
Related Party Transaction [Line Items] | ||||
Termination fee related to Sale of InfraREIT, Inc | $ 40,500,000 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Annual Base Fees (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Annual base fees | $ 13.5 | $ 14.2 | |
Scenario, Forecast | |||
Related Party Transaction [Line Items] | |||
Annual base fees | $ 10.4 |
Electric Plant and Depreciati_3
Electric Plant and Depreciation - Schedule of Major Classes of Electric Plant (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Electric plant: | ||
Transmission plant | $ 1,794,442 | $ 1,794,438 |
Distribution plant | 151,698 | 151,698 |
General plant | 3,210 | 3,023 |
Total plant in service | 1,949,350 | 1,949,159 |
Construction work in progress | 77,568 | 66,121 |
Total electric plant | 2,026,918 | 2,015,280 |
Accumulated depreciation | (212,334) | (203,963) |
Electric plant, net | $ 1,814,584 | $ 1,811,317 |
Electric Plant and Depreciati_4
Electric Plant and Depreciation - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Public Utilities Property Plant And Equipment [Abstract] | ||
Electric plant, net includes plant acquisition adjustments | $ 28.2 | $ 28.5 |
Goodwill - Additional Informati
Goodwill - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
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 | Mar. 31, 2019 | Dec. 31, 2018 |
Other Assets Noncurrent [Abstract] | ||
Deferred financing costs on undrawn revolver, Gross Carrying Amount | $ 1,025 | $ 1,025 |
Other regulatory assets Deferred financing costs, Gross Carrying Amount | 10,610 | 10,610 |
Other regulatory assets Deferred costs recoverable in future years, Gross Carrying Amount | 23,793 | 23,793 |
Other regulatory assets, Gross Carrying Amount | 34,403 | 34,403 |
Operating lease right-of-use asset, Gross Carrying Amount | 345 | |
Investments, Gross Carrying Amount | 2,519 | 2,519 |
Other assets, Gross Carrying Amount | 38,292 | 37,947 |
Deferred financing costs on undrawn revolver, Accumulated Amortization | (811) | (779) |
Other regulatory assets Deferred financing costs, Accumulated Amortization | (5,810) | (5,490) |
Other regulatory assets, Accumulated Amortization | (5,810) | (5,490) |
Other assets, Accumulated Amortization | (6,621) | (6,269) |
Deferred financing costs on undrawn revolver, Net Carrying Amount | 214 | 246 |
Other regulatory assets Deferred financing costs, Net Carrying Amount | 4,800 | 5,120 |
Other regulatory assets Deferred costs recoverable in future years, Net Carrying Amount | 23,793 | 23,793 |
Other regulatory assets, Net Carrying Amount | 28,593 | 28,913 |
Operating lease right-of-use asset, Net Carrying Amount | 345 | |
Investments, Net Carrying Amount | 2,519 | 2,519 |
Other assets, Net Carrying Amount | $ 31,671 | $ 31,678 |
Other Assets - Additional Infor
Other Assets - Additional Information (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019USD ($)Lease | Dec. 31, 2018USD ($) | |
Other Assets Noncurrent [Abstract] | ||
Deferred costs recoverable in future years | $ 23,793,000 | $ 23,793,000 |
Investment impaired | $ 0 | $ 0 |
Number of land leases | Lease | 2 |
Borrowings Under Credit Facil_2
Borrowings Under Credit Facilities - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Nov. 30, 2018 | Mar. 31, 2019 | Dec. 31, 2014 | |
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 | Dec. 10, 2019 | ||
Credit facility, remaining borrowing capacity | $ 75,000,000 | $ 75,000,000 | ||
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 | ||
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 | Amendment | ||||
Line Of Credit Facility [Line Items] | ||||
Credit facility, maximum borrowing capacity | $ 67,000,000 | |||
Credit facility, maturity date | Dec. 10, 2020 | |||
Credit facility, remaining borrowing capacity | $ 8,000,000 | |||
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, 2020 | 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] | ||||
Credit facility, remaining borrowing capacity | $ 137,500,000 | $ 143,500,000 | ||
Revolving credit facility, interest rate description | a rate equal to either (1) a base rate, determined as the greatest of (a) the administrative agent’s prime rate, (b) the federal funds effective rate plus ½ of 1% and (c) LIBOR plus 1.00% per annum, plus a margin of either 0.75% or 1.00% per annum, depending on the total debt to capitalization ratio of SDTS on a consolidated basis or (2) LIBOR plus a margin of either 1.75% or 2.00% per annum | |||
Amount of revolving credit facility under agreement | $ 112,500,000 | $ 106,500,000 | ||
Debt, weighted average interest rate | 4.59% | 4.49% | ||
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 | 3 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2010 | Dec. 31, 2009 | |
Debt Instrument [Line Items] | ||||
Long-term debt, Amount Outstanding | $ 839,161 | $ 841,311 | ||
Less unamortized deferred financing costs | (57) | (64) | ||
Total long-term debt, less deferred financing costs | 839,104 | 841,247 | ||
Less current portion of long-term debt | (8,919) | (8,792) | ||
Debt classified as long-term debt, less deferred financing costs | 830,185 | 832,455 | ||
TDC | Senior Secured Notes, 8.50% | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, Amount Outstanding | $ 14,687 | $ 15,000 | ||
Interest bearing note, maturity date | Dec. 30, 2020 | |||
Long-term debt, Interest Rate | 8.50% | 8.50% | 8.50% | |
SDTS | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, Amount Outstanding | $ 824,474 | $ 826,311 | ||
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 | 3.74% | 3.73% | ||
SDTS | Senior Secured Notes, 3.86% | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, Amount Outstanding | $ 400,000 | $ 400,000 | ||
Interest bearing note, maturity date | Dec. 3, 2025 | |||
Long-term debt, Interest Rate | 3.86% | 3.86% | ||
SDTS | Senior Secured Notes, 3.86% Maturing in 2026 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, Amount Outstanding | $ 100,000 | $ 100,000 | ||
Interest bearing note, maturity date | Jan. 14, 2026 | |||
Long-term debt, Interest Rate | 3.86% | 3.86% | ||
SDTS | Senior Secured Notes, 7.25% | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, Amount Outstanding | $ 37,762 | $ 38,338 | ||
Interest bearing note, maturity date | Dec. 30, 2029 | |||
Long-term debt, Interest Rate | 7.25% | 7.25% | 7.25% | |
SDTS | Senior Secured Notes, 6.47% | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, Amount Outstanding | $ 86,712 | $ 87,973 | ||
Interest bearing note, maturity date | Sep. 30, 2030 | |||
Long-term debt, Interest Rate | 6.47% | 6.47% | 6.47% |
Long-Term Debt - Components o_2
Long-Term Debt - Components of Long-Term Debt (Parenthetical) (Details) - USD ($) $ in Millions | Mar. 31, 2019 | 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 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 | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2010 | Dec. 31, 2009 | |
Debt Instrument [Line Items] | |||||||
Deferred financing costs, Net Carrying Amount | $ 214 | $ 246 | |||||
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 | 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 | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Long-term Debt | $ 830,185 | $ 832,455 |
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 | $ 639,200 | $ 641,300 |
Debt, weighted average interest rate | 4.50% | 4.50% |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Carrying Value | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 839,161 | $ 841,311 |
Level 2 | Fair Value | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 882,033 | $ 864,281 |
Regulatory Matters - Summary of
Regulatory Matters - Summary of Regulatory Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Public Utilities General Disclosures [Line Items] | |||
Regulatory Liabilities | $ 119,362 | $ 115,532 | |
Cost of Removal | |||
Public Utilities General Disclosures [Line Items] | |||
Regulatory Liabilities | 63,583 | 59,753 | |
Excess Accumulated Deferred Federal Income Tax | |||
Public Utilities General Disclosures [Line Items] | |||
Regulatory Liabilities | $ 55,779 | $ 55,779 | $ 55,800 |
Regulatory Matters - Additional
Regulatory Matters - Additional Information (Details) - USD ($) $ in Thousands | May 01, 2014 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Public Utilities General Disclosures [Line Items] | ||||
Corporate federal income tax rate | 21.00% | 21.00% | 35.00% | |
Regulatory liability related to creation of excess accumulated deferred federal income tax | $ 55,800 | $ 55,800 | ||
Regulatory liabilities | 119,362 | $ 115,532 | ||
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 | $ 55,800 |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Equity [Abstract] | ||
Cash dividends declared per share to shareholders | $ 0.25 | $ 0.25 |
Cash distributions declared to unit holders, per unit | $ 0.25 | $ 0.25 |
Dividends and distributions paid | $ 15,176 | $ 15,169 |
Noncontrolling Interest - Addit
Noncontrolling Interest - Additional Information (Details) - shares | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
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 | 16,700,000 | |
Operating partnership units redeem | 7,698 | 163,969 | |
Common shares issued | 7,698 | 163,969 | |
LTIP Units | |||
Minority Interest [Line Items] | |||
Operating partnership units issued | 0 | 28,952 |
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 | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Basic net income per share: | ||
Net income attributable to InfraREIT, Inc. | $ 13,745 | $ 12,864 |
Weighted average common shares outstanding | 43,998 | 43,832 |
Basic net income per share | $ 0.31 | $ 0.29 |
Diluted net income per share: | ||
Net income attributable to InfraREIT, Inc. | $ 13,745 | $ 12,864 |
Weighted average common shares outstanding | 43,998 | 43,832 |
Weighted average dilutive shares outstanding | 43,998 | 43,832 |
Diluted net income per share | $ 0.31 | $ 0.29 |
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 | $ 5,224 | $ 4,900 |
Redemption of Operating Partnership units | 16,729 | 16,872 |
Leases - Schedule of Compositio
Leases - Schedule of Composition of Lease Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Leases [Abstract] | ||
Base rent (straight-line) | $ 48,574 | $ 45,656 |
Total lease revenue | $ 48,574 | $ 45,656 |
Leases - Additional Information
Leases - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2019USD ($)Lease | |
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 |
Number of properties subject to ground leases | Lease | 2 |
Initial direct costs | $ 0 |
Residual value guarantees | $ 0 |
Weighted-average remaining lease term | 43 years 2 months 12 days |
Discount rate | 4.25% |
Scottish Rite Rocky Road | |
Operating Leased Assets [Line Items] | |
Renewal Periods | Four 5-year terms |
Operating lease renewal term | 5 years |
Maximum | |
Operating Leased Assets [Line Items] | |
Rate of rent used, Percentage | 30.00% |
Minimum [Member] | |
Operating Leased Assets [Line Items] | |
Rate of rent used, Percentage | 26.00% |
Leases - Future Minimum Rent Re
Leases - Future Minimum Rent Revenue Expected in Accordance with Lease Agreement (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 194,068 |
2020 | 184,438 |
2021 | 9,089 |
2022 | 4,954 |
Total | $ 392,549 |
Leases - Schedule of Land Lease
Leases - Schedule of Land Leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Brownsville | |
Operating Leased Assets [Line Items] | |
Expiration Date | Nov. 1, 2067 |
Renewal Periods | None |
Rent Escalations | None |
Initial Annual Rent (In dollars) | $ 10,435 |
Scottish Rite Rocky Road | |
Operating Leased Assets [Line Items] | |
Expiration Date | Jan. 12, 2035 |
Renewal Periods | Four 5-year terms |
Lessee, Operating Lease, Renewal Term | 5 years |
Rent Escalations | 5% increase every 5 years after initial term |
Rent Escalations, Incraese in Percentage | 5.00% |
Lessee Operating Lease, Rent Escalation Term | 5 years |
Initial Annual Rent (In dollars) | $ 8,000 |
Leases - Schedule of Right-of-u
Leases - Schedule of Right-of-use Assets and Operating Lease Liabilities (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Lessee Lease Description [Line Items] | |
Total right-of-use asset | $ 363 |
Accounts payable and accrued liabilities | $ 18 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent |
Long-Term Operating Lease Liabilities | $ 345 |
Total operating lease liabilities | 363 |
Prepaid and Other Current Assets | |
Lessee Lease Description [Line Items] | |
Total right-of-use asset | 18 |
Other Assets | |
Lessee Lease Description [Line Items] | |
Total right-of-use asset | $ 345 |
Share-Based Compensation - Aggr
Share-Based Compensation - Aggregate Common Stock Issued to Members of Board of Directors (Details) - 2015 Equity Incentive Plan - Director $ / shares in Units, $ in Thousands | 1 Months Ended |
Jan. 31, 2019USD ($)$ / sharesshares | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |
Grant Date | 2019-01 |
Shares of Common Stock | shares | 22,674 |
Grant Date Fair Value per Share | $ / shares | $ 21.15 |
Aggregate Fair Value | $ | $ 480 |
Vesting Date | 2020-01 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
2015 Equity Incentive Plan | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Unamortized stock compensation expense | $ 0.4 | |
2015 Equity Incentive Plan | General And Administrative Expense | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Compensation expenses | $ 0.1 | $ 0.1 |
Director | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Common stock issued to directors | 0 | |
LTIP Units | 0 |
Share-Based Compensation - Ag_2
Share-Based Compensation - Aggregate LTIP Units Issued to Board of Directors (Details) - Director - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2019 | Jan. 31, 2018 | Mar. 31, 2019 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
LTIP Units | 0 | ||
2015 Equity Incentive Plan | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Grant Date | 2019-01 | ||
Grant Date Fair Value per Share | $ 21.15 | ||
Aggregate Fair Value | $ 480 | ||
Vesting Date | 2020-01 | ||
2015 Equity Incentive Plan | LTIP Units | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Grant Date | 2018-01 | ||
LTIP Units | 28,952 | ||
Grant Date Fair Value per Share | $ 18.61 | ||
Aggregate Fair Value | $ 539 | ||
Vesting Date | 2019-01 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Contingency [Line Items] | ||||
Corporate federal income tax rate | 21.00% | 21.00% | 35.00% | |
Regulatory liability related to creation of excess accumulated deferred federal income tax | $ 55.8 | $ 55.8 | ||
Texas | ||||
Income Tax Contingency [Line Items] | ||||
Franchise taxes on lease revenue | $ 0.3 | $ 0.3 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Supplemental Cash Flow Information and Non-cash Investing and Financing Activities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Supplemental cash flow information | |||
Cash paid for interest | $ 7,832 | $ 7,469 | |
Establishment of operating lease right-of-use assets and liabilities | 363 | ||
Non-cash investing and financing activities | |||
Change in accrued additions to electric plant | (242) | (2,902) | |
Allowance for funds used during construction - debt | 988 | 820 | |
Redemption of operating partnership units for common stock | 116 | 3,106 | |
Dividends and distributions payable | $ 15,182 | $ 15,176 | $ 15,176 |