INFRAREIT, INC., 10-Q filed on 5/3/2018
Quarterly Report
v3.8.0.1
Document and Entity Information - shares
3 Months Ended
Mar. 31, 2018
Apr. 30, 2018
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 31, 2018  
Document Fiscal Year Focus 2018  
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 Accelerated Filer  
Entity Common Stock, Shares Outstanding   43,960,884
v3.8.0.1
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Mar. 31, 2018
Dec. 31, 2017
Current Assets    
Cash and cash equivalents $ 1,624 $ 2,867
Restricted cash 1,683 1,683
Due from affiliates 32,605 35,172
Inventory 6,891 6,759
Prepaids and other current assets 1,401 2,460
Total current assets 44,204 48,941
Electric Plant, net 1,782,965 1,772,229
Goodwill 138,384 138,384
Other Assets 33,251 34,314
Total Assets 1,998,804 1,993,868
Current Liabilities    
Accounts payable and accrued liabilities 26,947 21,230
Short-term borrowings 35,500 41,000
Current portion of long-term debt 67,847 68,305
Dividends and distributions payable 15,176 15,169
Accrued taxes 5,919 5,633
Total current liabilities 151,389 151,337
Long-Term Debt, Less Deferred Financing Costs 839,649 841,215
Regulatory Liabilities 104,180 100,458
Total liabilities 1,095,218 1,093,010
Commitments and Contingencies
Equity    
Common stock, $0.01 par value; 450,000,000 shares authorized; 43,960,884 and 43,796,915 issued and outstanding as of March 31, 2018 and December 31, 2017, respectively 440 438
Additional paid-in capital 709,461 706,357
Accumulated deficit (47,854) (49,728)
Total InfraREIT, Inc. equity 662,047 657,067
Noncontrolling interest 241,539 243,791
Total equity 903,586 900,858
Total Liabilities and Equity $ 1,998,804 $ 1,993,868
v3.8.0.1
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Mar. 31, 2018
Dec. 31, 2017
Statement Of Financial Position [Abstract]    
Common stock, par or stated value per share $ 0.01 $ 0.01
Common stock, shares authorized 450,000,000 450,000,000
Common stock, shares issued 43,960,884 43,796,915
Common stock, shares, outstanding 43,960,884 43,796,915
v3.8.0.1
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Income Statement [Abstract]    
Lease revenue $ 45,656 $ 39,624
Operating costs and expenses    
General and administrative expense 6,088 5,981
Depreciation 11,577 12,687
Total operating costs and expenses 17,665 18,668
Income from operations 27,991 20,956
Other (expense) income    
Interest expense, net (10,674) (9,698)
Other income, net 733 3
Total other expense (9,941) (9,695)
Income before income taxes 18,050 11,261
Income tax expense 286 244
Net income 17,764 11,017
Less: Net income attributable to noncontrolling interest 4,900 3,068
Net income attributable to InfraREIT, Inc. $ 12,864 $ 7,949
Net income attributable to InfraREIT, Inc. common stockholders per share:    
Basic $ 0.29 $ 0.18
Diluted 0.29 0.18
Cash dividends declared per common share $ 0.25 $ 0.25
v3.8.0.1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Cash flows from operating activities    
Net income $ 17,764 $ 11,017
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation 11,577 12,687
Amortization of deferred financing costs 1,071 1,004
Allowance for funds used during construction - other funds (730)  
Equity based compensation 140 140
Changes in assets and liabilities:    
Due from affiliates 2,567 5,496
Inventory (132) 47
Prepaids and other current assets (573) (721)
Accounts payable and accrued liabilities 3,153 140
Net cash provided by operating activities 34,837 29,810
Cash flows from investing activities    
Additions to electric plant (15,011) (52,223)
Proceeds from asset exchange transaction 1,632  
Net cash used in investing activities (13,379) (52,223)
Cash flows from financing activities    
Proceeds from short-term borrowings 12,000 34,000
Repayments of short-term borrowings (17,500) (9,500)
Repayments of long-term debt (2,032) (1,921)
Dividends and distributions paid (15,169) (15,161)
Net cash (used in) provided by financing activities (22,701) 7,418
Net decrease in cash, cash equivalents and restricted cash (1,243) (14,995)
Cash, cash equivalents and restricted cash at beginning of period 4,550 19,294
Cash, cash equivalents and restricted cash at end of period $ 3,307 $ 4,299
v3.8.0.1
Description of Business and Presentation of Financial Statements
3 Months Ended
Mar. 31, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Description of Business and Presentation of Financial Statements

1.

Description of Business and Presentation of Financial Statements

Basis of Presentation

InfraREIT, Inc. is a Maryland corporation, which may be referred to in these financial statements as the “Company,” “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, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. For further information, refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the U.S. Securities and Exchange Commission (SEC) on March 5, 2018 (2017 Form 10-K).

We held 72.4% of the outstanding partnership units (OP Units) in InfraREIT Partners, LP (Operating Partnership or InfraREIT LP) as of March 31, 2018 and are its general partner. We include the accounts of the Operating Partnership and its subsidiaries in our consolidated financial statements. Hunt Consolidated, Inc. affiliates, current or former employees and members of our board of directors held the other 27.6% of the outstanding OP Units as of March 31, 2018.

Use of Estimates

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Recent Accounting Guidance

Recently Adopted Accounting Guidance

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. ASU 2014-09 requires revenue to be recognized when promised goods or services are transferred to customers in an amount that reflects the expected consideration for these goods and services. As part of this guidance, lease transactions have been excluded from the requirements of this standard. We adopted this guidance on January 1, 2018. As this guidance only applies to us if certain lease criteria are present and under limited circumstances, the new guidance currently has a minimal impact on our financial position, results of operations and cash flows. We will continue to monitor our transactions and apply the new guidance as circumstances require.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Clarification of Certain Cash Receipts and Cash Payments. The objective of ASU 2016-15 is to eliminate the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on eight specific cash flow issues. The new standard should be applied retrospectively to all periods presented, unless deemed impracticable, in which case prospective application is permitted. We adopted the new guidance on January 1, 2018 and the new guidance did not impact our Consolidated Statement of Cash Flows.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 203): Restricted Cash (A Consensus of the FASB Emerging Issues Task Force). ASU 2016-18 adds to or clarifies current guidance on the classification and presentation of restricted cash in the statement of cash flows. The new guidance requires entities to include in their cash and cash equivalent balances in the statement of cash flows those amounts that are deemed to be restricted cash and restricted cash equivalents. We adopted the guidance on January 1, 2018 and have adjusted all periods presented for the change in presentation of restricted cash on our Consolidated Statement of Cash Flows.

Recent Accounting Guidance Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 amended the existing accounting standard for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 is effective for periods beginning after December 15, 2018, with early adoption permitted. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. We believe the new guidance will have a minimal impact on our financial position, results of operations and cash flows due to the limited changes around lessor transactions.

v3.8.0.1
Asset Exchange Transaction
3 Months Ended
Mar. 31, 2018
Nonmonetary Transactions [Abstract]  
Asset Exchange Transaction

2.

Asset Exchange Transaction

In July 2017, our regulated subsidiary, Sharyland Distribution & Transmission Services, L.L.C. (SDTS), and our sole tenant, Sharyland Utilities, L.P. (Sharyland), signed a definitive agreement (Definitive Agreement) with Oncor Electric Delivery Company LLC (Oncor) to exchange SDTS’s retail distribution assets and certain transmission assets for a group of Oncor’s transmission assets located in Northwest and Central Texas (Asset Exchange Transaction). The Asset Exchange Transaction closed in November 2017 and, among other things, resulted in SDTS exchanging $403 million of net assets for $383 million of transmission assets owned by Oncor, $18 million of net cash and a $2 million receivable from Oncor as of December 31, 2017. The transaction resulted in a gain of $0.3 million for SDTS. The receivable from Oncor was included in prepaids and other current assets in the Consolidated Balance Sheets at December 31, 2017. The receivable from Oncor was collected during the first quarter of 2018. These transactions were structured to qualify, in part, as a simultaneous tax deferred like-kind exchange of assets to the extent that the assets are of “like kind” (within the meaning of Section 1031 of the Internal Revenue Code of 1986, as amended).

v3.8.0.1
Cash, Cash Equivalents and Restricted Cash
3 Months Ended
Mar. 31, 2018
Cash And Cash Equivalents [Abstract]  
Cash, Cash Equivalents and Restricted Cash

3.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash within the Consolidated Balance Sheets that sum to the total of the same such amounts shown on the Consolidated Statements of Cash Flows:

 

 

 

March 31,

 

(In thousands)

 

2018

 

 

2017

 

Cash

 

$

1,624

 

 

$

2,617

 

Restricted cash

 

 

1,683

 

 

 

1,682

 

Total cash, cash equivalents and restricted cash shown on the Statement of Cash Flows

 

$

3,307

 

 

$

4,299

 

 

Amounts included in restricted cash represent the principal and interest payable for two consecutive periods associated with the $25.0 million senior secured notes of the Operating Partnership’s wholly-owned subsidiary, Transmission and Distribution Company, L.L.C. (TDC), as described in Note 9, Long-Term Debt.

v3.8.0.1
Related Party Transactions
3 Months Ended
Mar. 31, 2018
Related Party Transactions [Abstract]  
Related Party Transactions

4.

Related Party Transactions

We lease, through SDTS, all our regulated assets to Sharyland through several lease agreements. Under the leases, we have agreed to fund capital expenditures for footprint projects. Our leases define “footprint projects” to be transmission or, if applicable, distribution projects that (1) are primarily situated within our current or previous distribution service territory, as applicable; (2) physically hang from our existing transmission assets, such as the addition of another circuit to our existing transmission lines, or that are physically located within one of our substations or (3) connect or are otherwise added to transmission lines or other properties that comprise a part of the transmission assets acquired in the Asset Exchange Transaction.

We earned lease revenues from Sharyland under these agreements of $45.7 million and $39.6 million during the three months ended March 31, 2018 and 2017, respectively. In connection with our leases with Sharyland, we had a deferred rent liability of $14.6 million and $14.7 million as of March 31, 2018 and December 31, 2017, respectively, which is included in accounts payable and accrued liabilities on the Consolidated Balance Sheets.

In addition to rent payments that Sharyland makes to us, we and Sharyland also make payments to each other under the leases that primarily consist of payments to reimburse Sharyland for the costs of gross plant and equipment added to our regulated assets. For the three months ended March 31, 2018 and 2017, the net amount of payments we made to Sharyland was $15.0 million and $52.2 million, respectively.

In connection with the Definitive Agreement, 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 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 Definitive Agreement relating to certain matters for which SDTS relies, in whole or in part, upon Sharyland under the leases and as operator of the assets and an allocation of expenses incurred in connection with the transactions. For information related to Asset Exchange Transaction, see Note 2, Asset Exchange Transaction.

As part of the Asset Exchange Transaction, we incurred $0.2 million in legal fees related to us obtaining the lenders’ consents to complete the Asset Exchange Transaction. These costs are eligible to be recovered through rates collected from customers during a 24-month period starting January 2018 through December 2019. We sold the recoverable costs to Sharyland in exchange for 24 equal monthly payments beginning January 2018 through December 2019. The equal monthly payments from Sharyland will be received through the CREZ lease. As of March 31, 2018, Sharyland had made three monthly payments related to the recoverable legal fees. As of December 31, 2017, there were no payments due from Sharyland related to the legal fees and no payments had been received. These fees are included in due from affiliates on the Consolidated Balance Sheets.

As of March 31, 2018 and December 31, 2017, accounts payable and accrued liabilities on the Consolidated Balance Sheets included $4.9 million and $2.1 million, respectively, related to amounts owed to Sharyland for construction costs incurred and property taxes paid on our behalf. As of March 31, 2018 and December 31, 2017, amounts due from affiliates on the Consolidated Balance Sheets included $32.6 million and $35.2 million, respectively, related to amounts owed by Sharyland primarily associated with our leases.

The management fee paid to Hunt Utility Services, LLC (Hunt Manager) for the three months ended March 31, 2018 and 2017 was $3.5 million and $7.0 million, respectively. There were no prepaid or accrued amounts associated with the management fees on the Consolidated Balance Sheets as of March 31, 2018 and December 31, 2017. As of December 31, 2016, there was $3.5 million accrued associated with management fees on the Consolidated Balance Sheets. Additionally, during each of the three months ended March 31, 2018 and 2017, 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.

Our management agreement with Hunt Manager provides for an annual base fee, or management fee. The base fee for each twelve month period beginning each April 1 will equal 1.50% of our total equity as of December 31 of the immediately preceding year, subject to a $30.0 million cap. The term of the management agreement expires December 31, 2019 and will automatically renew for successive five year terms unless a majority of our independent directors decides to terminate the agreement.

The annual base fees through March 31, 2019 are as follows:

 

(In millions)

 

Base Fee

 

April 1, 2016 - March 31, 2017

 

$

14.0

 

April 1, 2017 - March 31, 2018

 

 

14.2

 

April 1, 2018 - March 31, 2019

 

 

13.5

 

 

v3.8.0.1
Electric Plant and Depreciation
3 Months Ended
Mar. 31, 2018
Public Utilities Property Plant And Equipment [Abstract]  
Electric Plant and Depreciation

5.

Electric Plant and Depreciation

The major classes of electric plant are as follows:

 

 

 

 

 

(In thousands)

 

March 31, 2018

 

 

December 31, 2017

 

Electric plant:

 

 

 

 

 

 

 

 

Transmission plant

 

$

1,744,737

 

 

$

1,685,466

 

Distribution plant

 

 

149,888

 

 

 

143,865

 

General plant

 

 

3,023

 

 

 

3,023

 

Total plant in service

 

 

1,897,648

 

 

 

1,832,354

 

Construction work in progress

 

 

66,988

 

 

 

113,643

 

Total electric plant

 

 

1,964,636

 

 

 

1,945,997

 

Accumulated depreciation

 

 

(181,671

)

 

 

(173,768

)

Electric plant, net

 

$

1,782,965

 

 

$

1,772,229

 

 

General plant consists primarily of a warehouse, buildings and associated assets. Construction work in progress (CWIP) relates to various projects underway related to our regulated assets. 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 $29.1 million and $29.4 million as of March 31, 2018 and December 31, 2017, respectively.

 

v3.8.0.1
Goodwill
3 Months Ended
Mar. 31, 2018
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill

6.

Goodwill

Goodwill represents the excess of costs of an acquired business over the fair value of the assets acquired, less liabilities assumed. We conduct an impairment test of goodwill at least annually. As of March 31, 2018 and December 31, 2017, $138.4 million was recorded as goodwill on the Consolidated Balance Sheets.

v3.8.0.1
Other Assets
3 Months Ended
Mar. 31, 2018
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]  
Other Assets

7.

Other Assets

Other assets are as follows:

 

 

 

March 31, 2018

 

 

December 31, 2017

 

(In thousands)

 

Gross

Carrying

Amount

 

 

Accumulated

Amortization

 

 

Net

Carrying

Amount

 

 

Gross

Carrying

Amount

 

 

Accumulated

Amortization

 

 

Net

Carrying

Amount

 

Deferred financing costs on undrawn revolver

 

$

967

 

 

$

(639

)

 

$

328

 

 

$

967

 

 

$

(591

)

 

$

376

 

Other regulatory assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred financing costs

 

 

28,570

 

 

 

(21,959

)

 

 

6,611

 

 

 

28,570

 

 

 

(20,944

)

 

 

7,626

 

Deferred costs recoverable in future years

 

 

23,793

 

 

 

 

 

 

23,793

 

 

 

23,793

 

 

 

 

 

 

23,793

 

Other regulatory assets

 

 

52,363

 

 

 

(21,959

)

 

 

30,404

 

 

 

52,363

 

 

 

(20,944

)

 

 

31,419

 

Investments

 

 

2,519

 

 

 

 

 

 

2,519

 

 

 

2,519

 

 

 

 

 

 

2,519

 

Other assets

 

$

55,849

 

 

$

(22,598

)

 

$

33,251

 

 

$

55,849

 

 

$

(21,535

)

 

$

34,314

 

 

Deferred financing costs on undrawn revolver consist of costs incurred in connection with the establishment of the InfraREIT LP revolving credit facility. See Note 8, Borrowings Under Credit Facilities.

Other regulatory assets consist of deferred financing costs within our regulated subsidiary, SDTS. The deferred financing costs primarily consist of debt issuance costs incurred in connection with the construction of SDTS’s regulated assets or the refinancing of related debt. See Note 8, Borrowings Under Credit Facilities and Note 9, Long-Term 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 as of March 31, 2018 and December 31, 2017 represent operating costs incurred from the inception of Sharyland through 2007. We have determined that these costs are probable of recovery through future rates based on orders of the PUCT in Sharyland’s prior rate cases and regulatory precedent.

In connection with the acquisition of Cap Rock Holding Corporation, we received a participation in the National Rural Utilities Cooperative Finance Corporation. We account for this investment under the cost method of accounting. We believe that the investment is not impaired as of March 31, 2018 and December 31, 2017.

 

v3.8.0.1
Borrowings Under Credit Facilities
3 Months Ended
Mar. 31, 2018
Debt Disclosure [Abstract]  
Borrowings Under Credit Facilities

8.

Borrowings Under Credit Facilities

InfraREIT LP Revolving Credit Facility

In 2014, InfraREIT LP entered into a $75.0 million revolving credit facility, led by Bank of America, N.A., as administrative agent, with up to $15.0 million available for issuance of letters of credit and a maturity date of December 10, 2019. The revolving credit facility is secured by certain assets of InfraREIT LP, including accounts and other personal property, and is guaranteed by us and TDC, with the TDC guarantee secured by the assets of, and InfraREIT LP’s equity interests in, TDC on materially the same basis as TDC’s senior secured notes described below in Note 9, Long-Term Debt.

Borrowings and other extensions of credit under the revolving credit facility bear interest, at InfraREIT LP’s election, at a rate equal to (1) the one, two, three or six month London Interbank Offered Rate (LIBOR) plus 2.5%, or (2) a base rate (equal to the highest of (a) the Federal Funds Rate plus ½ of 1%, (b) the administrative agent’s prime rate and (c) LIBOR plus 1%) plus 1.5%. Letters of credit are subject to a letter of credit fee equal to the daily amount available to be drawn times 2.5%. InfraREIT LP is also required to pay a commitment fee and other customary fees under the revolving credit facility. InfraREIT LP may prepay amounts outstanding under the revolving credit facility in whole or in part without premium or penalty.

As of March 31, 2018 and December 31, 2017, there were no borrowings or letters of credit outstanding and there was $75.0 million of borrowing capacity available under the revolving credit facility. As of March 31, 2018 and December 31, 2017, InfraREIT LP was in compliance with all debt covenants under the credit agreement.

SDTS Revolving Credit Facility

In 2014, SDTS entered into the third amended and restated credit agreement led by Royal Bank of Canada, as administrative agent, with a maturity date of December 10, 2019. The credit agreement contains a revolving credit facility with a borrowing capacity up to $250.0 million with up to $25.0 million of the revolving credit facility available for issuance of letters of credit and up to $5.0 million of the revolving credit facility available for swingline loans. The revolving credit facility is secured by certain of SDTS’s regulated assets, the leases, certain accounts and TDC’s equity interests in SDTS on the same basis as SDTS’s various senior secured note obligations described below in Note 9, Long-Term Debt.

The interest rate for the revolving credit facility is based, at SDTS’s option, at a rate equal to either (1) a base rate, determined as the greatest of (a) the administrative agent’s prime rate, (b) the federal funds effective rate plus ½ of 1% and (c) LIBOR plus 1.00% per annum, plus a margin of either 0.75% or 1.00% per annum, depending on the total debt to capitalization ratio of SDTS on a consolidated basis or (2) LIBOR plus a margin of either 1.75% or 2.00% per annum, depending on the total debt to capitalization ratio of SDTS on a consolidated basis. SDTS is also required to pay a commitment fee and other customary fees under its revolving credit facility. SDTS is entitled to prepay amounts outstanding under the revolving credit facility with no prepayment penalty.

As of March 31, 2018, SDTS had $35.5 million of borrowings outstanding at an interest rate of 3.63%, no letters of credit outstanding and $214.5 million of borrowing capacity available under this revolving credit facility. As of December 31, 2017, SDTS had $41.0 million of borrowings outstanding at a weighted average interest rate of 3.12% with no letters of credit outstanding and $209.0 million of borrowing capacity available under this revolving credit facility. As of March 31, 2018 and December 31, 2017, SDTS was in compliance with all debt covenants under the credit agreement.

The credit agreements require InfraREIT LP and SDTS to comply with customary covenants for facilities of this type, including: debt to capitalization ratios, debt service coverage ratios, limitations on additional debt, liens, investments, mergers, acquisitions, dispositions or entry into any line of business other than the business of the transmission and distribution of electric power and the provision of ancillary services and certain restrictions on the payment of dividends. The debt to capitalization ratio on the SDTS credit facility is calculated on a combined basis with Sharyland. The credit agreements also contain restrictions on the amount of Sharyland’s indebtedness and other restrictions on, and covenants applicable to, Sharyland.

The revolving credit facilities of InfraREIT LP and SDTS are subject to customary events of default. If an event of default occurs under either facility and is continuing, the lenders may accelerate amounts due under such revolving credit facility.

v3.8.0.1
Long-Term Debt
3 Months Ended
Mar. 31, 2018
Debt Instruments [Abstract]  
Long-Term Debt

9.

Long-Term Debt

Long-term debt consisted of the following:

 

 

 

 

 

March 31, 2018

 

 

December 31, 2017

 

(Dollar amounts in thousands)

 

Maturity Date

 

Amount

Outstanding

 

 

Interest

Rate

 

 

Amount

Outstanding

 

 

Interest

Rate

 

TDC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior secured notes - $25.0 million

 

December 30, 2020

 

$

15,938

 

 

8.50%

 

 

$

16,250

 

 

8.50%

 

SDTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior secured notes - $60.0 million

 

June 20, 2018

 

 

60,000

 

 

5.04%

 

 

 

60,000

 

 

5.04%

 

Senior secured term loan - $200.0 million

 

June 5, 2020

 

 

200,000

 

 

3.04%

 

 

 

200,000

 

 

2.71%

 

Senior secured notes - $400.0 million

 

December 3, 2025

 

 

400,000

 

 

3.86%

 

 

 

400,000

 

 

3.86%

 

Senior secured notes - $100.0 million

 

January 14, 2026

 

 

100,000

 

 

3.86%

 

 

 

100,000

 

 

3.86%

 

Senior secured notes - $53.5 million

 

December 30, 2029

 

 

40,009

 

 

7.25%

 

 

 

40,546

 

 

7.25%

 

Senior secured notes - $110.0 million

 

September 30, 2030

 

 

91,638

 

 

6.47%

 

 

 

92,821

 

 

6.47%

 

Total SDTS debt

 

 

 

 

891,647

 

 

 

 

 

 

 

893,367

 

 

 

 

 

Total long-term debt

 

 

 

 

907,585

 

 

 

 

 

 

 

909,617

 

 

 

 

 

Less unamortized deferred financing costs

 

 

 

 

(89

)

 

 

 

 

 

 

(97

)

 

 

 

 

Total long-term debt, less deferred

    financing costs

 

 

 

 

907,496

 

 

 

 

 

 

 

909,520

 

 

 

 

 

Less current portion of long-term debt

 

 

 

 

(67,847

)

 

 

 

 

 

 

(68,305

)

 

 

 

 

Debt classified as long-term debt, less

    deferred financing costs

 

 

 

$

839,649

 

 

 

 

 

 

$

841,215

 

 

 

 

 

 

In 2010, TDC issued $25.0 million aggregate principal amount of 8.50% per annum senior secured notes to The Prudential Insurance Company of America and affiliates (TDC Notes). Principal and interest on the TDC Notes are payable quarterly, and the TDC Notes are secured by the assets of, and InfraREIT LP’s equity interest in, TDC on materially the same basis as with lenders under InfraREIT LP’s revolving credit facility described above in Note 7, Borrowings Under Credit Facilities. In connection with the issuance of the TDC Notes, TDC incurred deferred financing costs which are shown as a reduction of the senior secured notes balance. The amount of unamortized deferred financing costs associated with the TDC Notes was $0.1 million as of March 31, 2018 and December 31, 2017.

SDTS has $60.0 million aggregate principal amount of 5.04% per annum senior secured notes issued to The Prudential Insurance Company of America and affiliates in 2011 (2011 Notes). Interest is payable quarterly while no principal payments are due until maturity.

In June 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 in 10 year senior secured notes, series A (Series A Notes), and in 2016 issued an additional $100.0 million in 10 year senior secured notes, series B (Series B Notes). These senior secured notes bear interest at a rate of 3.86% per annum, payable semi-annually. The Series A Notes are due at maturity with outstanding accrued interest payable each June and December. The Series B Notes are due at maturity with outstanding accrued interest payable each January and July.

In 2009, SDTS issued $53.5 million aggregate principal amount of 7.25% per annum senior secured notes to The Prudential Insurance Company of America and affiliates (2009 Notes). Principal and interest on 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, 2018 and December 31, 2017, SDTS and TDC were in compliance with all debt covenants under the applicable agreements.

SDTS’s Series A Notes, Series B Notes, 2009 Notes, 2010 Notes, 2011 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.

 

v3.8.0.1
Fair Value of Financial Instruments
3 Months Ended
Mar. 31, 2018
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments

10.

Fair Value of Financial Instruments

The carrying amounts of our cash and cash equivalents, restricted cash, due from affiliates and accounts payable approximate fair value due to the short-term nature of these assets and liabilities.

We had fixed interest rate borrowings totaling $707.6 million and $709.6 million under our senior secured notes with a weighted average interest rate of 4.6% per annum as of March 31, 2018 and December 31, 2017, respectively. The fair value of these borrowings is estimated using discounted cash flow analysis based on current market rates.

As of March 31, 2018 and December 31, 2017, we had $200.0 million of borrowings under our 2017 Term Loan that accrues interest under a floating interest rate structure, which is typically repriced every month or three months. Accordingly, the carrying value of such indebtedness approximated its fair value for the amounts outstanding.

Financial instruments, measured at fair value, by level within the fair value hierarchy were as follows:

 

 

 

Carrying

 

 

Fair Value

 

(In thousands)

 

Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

March 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

$

907,585

 

 

$

 

 

$

932,011

 

 

$

 

December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

$

909,617

 

 

$

 

 

$

950,522

 

 

$

 

 

v3.8.0.1
Regulatory Matters
3 Months Ended
Mar. 31, 2018
Public Utilities Rate Matters [Abstract]  
Regulatory Matters

11.

Regulatory Matters

Regulatory Liability

Regulatory liabilities are as follows:

 

(In thousands)

 

March 31, 2018

 

 

December 31, 2017

 

Cost of removal

 

$

48,401

 

 

$

44,679

 

Excess ADFIT

 

 

55,779

 

 

 

55,779

 

Regulatory liabilities

 

$

104,180

 

 

$

100,458

 

 

Our regulatory liability related to cost of removal is established through depreciation rates and represents amounts that we expect to incur in the future. The regulatory liability is recorded as a long-term liability net of actual removal costs incurred.

As an owner of regulated utility assets, we established an accumulated deferred federal income tax (ADFIT) balance for regulatory purposes primarily associated with the difference between U.S. GAAP and federal income tax depreciation on our assets. This ADFIT was calculated based on a 35% corporate federal income tax rate but was not recorded on our consolidated balance sheets or income statements due to the expectation that we would not pay corporate federal income taxes as a result of our REIT structure. With the passage of the Tax Cuts and Jobs Act (TCJA), the corporate federal income tax rate was reduced to 21% effective for tax years beginning on or after January 1, 2018. Regulatory accounting rules require utilities to revalue their ADFIT balances based on a change in corporate federal income tax rates, to remove the difference from ADFIT and to create a regulatory liability for the reduction in ADFIT. Therefore, we reduced the ADFIT by $55.8 million and created a regulatory liability for regulatory purposes. Additionally, in accordance with ASC Topic 980, Regulated Operations, Section 405, Liabilities, we recorded the $55.8 million regulatory liability on our Consolidated Balance Sheet with a corresponding reduction to our revenue as deferred tax liabilities have not been previously recorded on our Consolidated Balance Sheets. The regulatory liability will be amortized as an increase to revenue over a future period to be determined in a future rate proceeding. The amount and expected amortization of the regulatory liability could be adjusted in the future due to new laws, regulations or regulatory actions.

Rate Case Filing

In January 2014, the PUCT approved a rate case (2013 Rate Case) filed by Sharyland applicable to our regulated assets providing for a capital structure consisting of 55% debt and 45% equity; a cost of debt of 6.73%; a return on equity of 9.70%; and a return on invested capital of 8.06% in calculating rates. The new rates became effective May 1, 2014. Under the order approving the 2013 Rate Case, Sharyland was required to file its next rate case in 2016 (2016 Rate Case). In November 2017, the 2016 Rate Case was dismissed, which resulted in the 2013 Rate Case regulatory parameters remaining in place. As part of the PUCT order approving the Asset Exchange Transaction, the PUCT also granted SDTS a CCN to continue to own and lease its assets to Sharyland. SDTS and Sharyland are required to file a new rate case by July 1, 2020 with a test year ending December 31, 2019.

v3.8.0.1
Commitments and Contingencies
3 Months Ended
Mar. 31, 2018
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

12.

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 and cash flows.

 

v3.8.0.1
Equity
3 Months Ended
Mar. 31, 2018
Equity [Abstract]  
Equity

13.

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, 2018 and 2017. We paid a total of $15.2 million in dividends and distributions during each of the three months ended March 31, 2018 and 2017.

v3.8.0.1
Noncontrolling Interest
3 Months Ended
Mar. 31, 2018
Noncontrolling Interest [Abstract]  
Noncontrolling Interest

14.

Noncontrolling Interest

We present as a noncontrolling interest the portion of any equity in entities that we control and consolidate but do not own. Generally, OP Units of our Operating Partnership participate in net income allocations and distributions and entitle their holder to the right, subject to the terms set forth in the partnership agreement, to require the Operating Partnership to redeem all or a portion of the OP Units held by such limited partner. At our option, we may satisfy this redemption with cash or by exchanging shares of InfraREIT, Inc. common stock on a one-for-one basis. As of March 31, 2018 and December 31, 2017, there were a total of 16.7 million and 16.9 million OP Units, respectively, held by the limited partners of the Operating Partnership.

During the three months ended March 31, 2018 and 2017, an aggregate of 28,952 and 31,633 long-term incentive units (LTIP Units), respectively, were issued by the Operating Partnership to members of our board of directors. For additional information, refer to Note 17, Share-Based Compensation.

We follow the guidance issued by the FASB regarding the classification and measurement of redeemable securities. Accordingly, we have determined that the OP Units meet the requirements to be classified as permanent equity. During the three months ended March 31, 2018, we redeemed 163,969 OP Units with the issuance of 163,969 shares of common stock. We redeemed 3,100 OP Units with the issuance of 3,100 shares of common stock during the three months ended March 31, 2017.

v3.8.0.1
Earnings Per Share
3 Months Ended
Mar. 31, 2018
Earnings Per Share [Abstract]  
Earnings Per Share

15.

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, 2018 and 2017.

Earnings per share are calculated as follows:

 

 

 

Three Months Ended March 31,

 

(In thousands, except per share data)

 

2018

 

 

2017

 

Basic net income per share:

 

 

 

 

 

 

 

 

Net income attributable to InfraREIT, Inc.

 

$

12,864

 

 

$

7,949

 

Weighted average common shares outstanding

 

 

43,832

 

 

 

43,775

 

Basic net income per share

 

$

0.29

 

 

$

0.18

 

Diluted net income per share:

 

 

 

 

 

 

 

 

Net income attributable to InfraREIT, Inc.

 

$

12,864

 

 

$

7,949

 

Weighted average common shares outstanding

 

 

43,832

 

 

 

43,775

 

Redemption of Operating Partnership units

 

 

 

 

 

 

Weighted average dilutive shares outstanding

 

 

43,832

 

 

 

43,775

 

Diluted net income per share

 

$

0.29

 

 

$

0.18

 

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

 

$

4,900

 

 

$

3,068

 

Redemption of Operating Partnership units

 

 

16,872

 

 

 

16,900

 

 

v3.8.0.1
Leases
3 Months Ended
Mar. 31, 2018
Leases [Abstract]  
Leases

16.

Leases

The following table shows the composition of our lease revenue:

 

 

 

Three Months Ended March 31,

 

(In thousands)

 

2018

 

 

2017

 

Base rent (straight-line)

 

$

45,656

 

 

$

39,624

 

Percentage rent

 

 

 

 

 

 

Total lease revenue

 

$

45,656

 

 

$

39,624

 

 

SDTS has entered into various leases with Sharyland for all our placed in service regulated assets. The master lease agreements, as amended, expire at various dates from December 31, 2019 through December 31, 2022. Our leases primarily consist of base rent, but certain lease supplements contain percentage rent as well. The lease supplements governing the Stanton Transmission Loop, Permian Basin assets and assets acquired in the Asset Exchange Transaction, which are part of the CREZ assets, only provide for base rent. Rent for the assets in McAllen and the CREZ assets not acquired in the Asset Exchange Transaction is comprised primarily of base rent but also includes percentage rent. Prior to its termination on December 31, 2017, the lease that previously covered the Permian Basis assets as well as the assets in Brady and Celeste, Texas that were transferred to Oncor in the Asset Exchange Transaction also included a percentage rent component. Percentage rent under our leases is based on a percentage of Sharyland’s annual gross revenue, as defined in the applicable lease, in excess of annual specified breakpoints, which are at least equal to the base rent under each lease.

The rate used for percentage rent for the reported time periods varies by lease and ranges from a high of 31% to a low of 23%. Because an annual specified breakpoint must be met under our leases before we can recognize any percentage rent, we anticipate that little to no percentage rent will be recognized in the first and second quarters of each year, with the largest amounts of percentage rent recognized during the third and fourth quarters of each year.

v3.8.0.1
Share Based Compensation
3 Months Ended
Mar. 31, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Share-Based Compensation

17.

Share-Based Compensation

We currently utilize the InfraREIT, Inc. 2015 Equity Incentive Plan primarily to compensate the non-executive directors for their service on our board of directors. The following table shows the aggregate LTIP Units issued to members of our board of directors during the three months ended March 31, 2018 and 2017:

 

Grant Date

 

LTIP Units

 

 

Grant Date

Fair Value

per LTIP Unit

 

 

Aggregate

Fair Value

(in thousands)

 

 

Vesting Date

January 2017

 

 

31,633

 

 

$

18.02

 

 

$

570

 

 

January 2018

January 2018

 

 

28,952

 

 

 

18.61

 

 

 

539

 

 

January 2019

 

As part of our board of directors’ quarterly compensation, each non-executive director can, subject to certain exceptions, elect to receive part of their compensation in our common stock instead of cash with full vesting upon issuance. During 2017 and 2018, all directors received their quarterly compensation in cash. The compensation expense, which represents the fair value of the stock or LTIP Unit measured at market price at the date of grant, is recognized on a straight-line basis over the vesting period. For each of the three months ended March 31, 2018 and 2017, $0.1 million was recognized as compensation expense related to these grants and is included in general and administrative expense on the Consolidated Statements of Operations. The unamortized compensation expense related to these grants was $0.4 million as of March 31, 2018 and 2017.

v3.8.0.1
Supplemental Cash Flow Information
3 Months Ended
Mar. 31, 2018
Supplemental Cash Flow Information [Abstract]  
Supplemental Cash Flow Information

18.

Supplemental Cash Flow Information

Supplemental cash flow information and non-cash investing and financing activities are as follows:

 

 

 

Three Months Ended March 31,

 

(In thousands)

 

2018

 

 

2017

 

Supplemental cash flow information

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

7,469

 

 

$

6,418

 

Non-cash investing and financing activities

 

 

 

 

 

 

 

 

Change in accrued additions to electric plant

 

 

(2,902

)

 

 

8,876

 

Allowance for funds used during construction - debt

 

 

820

 

 

 

815

 

Redemption of operating partnership units for common stock

 

 

3,106

 

 

 

55

 

Dividends and distributions payable

 

 

15,176

 

 

 

15,169

 

 

v3.8.0.1
Description of Business and Presentation of Financial Statements (Policies)
3 Months Ended
Mar. 31, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Basis of Presentation

Basis of Presentation

InfraREIT, Inc. is a Maryland corporation, which may be referred to in these financial statements as the “Company,” “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, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. For further information, refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the U.S. Securities and Exchange Commission (SEC) on March 5, 2018 (2017 Form 10-K).

We held 72.4% of the outstanding partnership units (OP Units) in InfraREIT Partners, LP (Operating Partnership or InfraREIT LP) as of March 31, 2018 and are its general partner. We include the accounts of the Operating Partnership and its subsidiaries in our consolidated financial statements. Hunt Consolidated, Inc. affiliates, current or former employees and members of our board of directors held the other 27.6% of the outstanding OP Units as of March 31, 2018.

Use of Estimates

Use of Estimates

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Recent Accounting Guidance

Recent Accounting Guidance

Recently Adopted Accounting Guidance

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. ASU 2014-09 requires revenue to be recognized when promised goods or services are transferred to customers in an amount that reflects the expected consideration for these goods and services. As part of this guidance, lease transactions have been excluded from the requirements of this standard. We adopted this guidance on January 1, 2018. As this guidance only applies to us if certain lease criteria are present and under limited circumstances, the new guidance currently has a minimal impact on our financial position, results of operations and cash flows. We will continue to monitor our transactions and apply the new guidance as circumstances require.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Clarification of Certain Cash Receipts and Cash Payments. The objective of ASU 2016-15 is to eliminate the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on eight specific cash flow issues. The new standard should be applied retrospectively to all periods presented, unless deemed impracticable, in which case prospective application is permitted. We adopted the new guidance on January 1, 2018 and the new guidance did not impact our Consolidated Statement of Cash Flows.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 203): Restricted Cash (A Consensus of the FASB Emerging Issues Task Force). ASU 2016-18 adds to or clarifies current guidance on the classification and presentation of restricted cash in the statement of cash flows. The new guidance requires entities to include in their cash and cash equivalent balances in the statement of cash flows those amounts that are deemed to be restricted cash and restricted cash equivalents. We adopted the guidance on January 1, 2018 and have adjusted all periods presented for the change in presentation of restricted cash on our Consolidated Statement of Cash Flows.

Recent Accounting Guidance Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 amended the existing accounting standard for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 is effective for periods beginning after December 15, 2018, with early adoption permitted. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. We believe the new guidance will have a minimal impact on our financial position, results of operations and cash flows due to the limited changes around lessor transactions.

v3.8.0.1
Cash, Cash Equivalents and Restricted Cash (Tables)
3 Months Ended
Mar. 31, 2018
Cash And Cash Equivalents [Abstract]  
Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash within Consolidated Balance Sheets

The following table provides a reconciliation of cash, cash equivalents and restricted cash within the Consolidated Balance Sheets that sum to the total of the same such amounts shown on the Consolidated Statements of Cash Flows:

 

 

 

March 31,

 

(In thousands)

 

2018

 

 

2017

 

Cash

 

$

1,624

 

 

$

2,617

 

Restricted cash

 

 

1,683

 

 

 

1,682

 

Total cash, cash equivalents and restricted cash shown on the Statement of Cash Flows

 

$

3,307

 

 

$

4,299

 

 

v3.8.0.1
Related Party Transactions (Tables)
3 Months Ended
Mar. 31, 2018
Related Party Transactions [Abstract]  
Schedule of Annual Base Fees

The annual base fees through March 31, 2019 are as follows:

 

(In millions)

 

Base Fee

 

April 1, 2016 - March 31, 2017

 

$

14.0

 

April 1, 2017 - March 31, 2018

 

 

14.2

 

April 1, 2018 - March 31, 2019

 

 

13.5

 

 

v3.8.0.1
Electric Plant and Depreciation (Tables)
3 Months Ended
Mar. 31, 2018
Public Utilities Property Plant And Equipment [Abstract]  
Schedule of Major Classes of Electric Plant

The major classes of electric plant are as follows:

 

 

 

 

 

(In thousands)

 

March 31, 2018

 

 

December 31, 2017

 

Electric plant:

 

 

 

 

 

 

 

 

Transmission plant

 

$

1,744,737

 

 

$

1,685,466

 

Distribution plant

 

 

149,888

 

 

 

143,865

 

General plant

 

 

3,023

 

 

 

3,023

 

Total plant in service

 

 

1,897,648

 

 

 

1,832,354

 

Construction work in progress

 

 

66,988

 

 

 

113,643

 

Total electric plant

 

 

1,964,636

 

 

 

1,945,997

 

Accumulated depreciation

 

 

(181,671

)

 

 

(173,768

)

Electric plant, net

 

$

1,782,965

 

 

$

1,772,229

 

 

v3.8.0.1
Other Assets (Tables)
3 Months Ended
Mar. 31, 2018
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]  
Summary of Other Assets

Other assets are as follows:

 

 

 

March 31, 2018

 

 

December 31, 2017

 

(In thousands)

 

Gross

Carrying

Amount

 

 

Accumulated

Amortization

 

 

Net

Carrying

Amount

 

 

Gross

Carrying

Amount

 

 

Accumulated

Amortization

 

 

Net

Carrying

Amount

 

Deferred financing costs on undrawn revolver

 

$

967

 

 

$

(639

)

 

$

328

 

 

$

967

 

 

$

(591

)

 

$

376

 

Other regulatory assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred financing costs

 

 

28,570

 

 

 

(21,959

)

 

 

6,611

 

 

 

28,570

 

 

 

(20,944

)

 

 

7,626

 

Deferred costs recoverable in future years

 

 

23,793

 

 

 

 

 

 

23,793

 

 

 

23,793

 

 

 

 

 

 

23,793

 

Other regulatory assets

 

 

52,363

 

 

 

(21,959

)

 

 

30,404

 

 

 

52,363

 

 

 

(20,944

)

 

 

31,419

 

Investments

 

 

2,519

 

 

 

 

 

 

2,519

 

 

 

2,519

 

 

 

 

 

 

2,519

 

Other assets

 

$

55,849

 

 

$

(22,598

)

 

$

33,251

 

 

$

55,849

 

 

$

(21,535

)

 

$

34,314

 

 

v3.8.0.1
Long-Term Debt (Tables)
3 Months Ended
Mar. 31, 2018
Debt Instruments [Abstract]  
Components of Long-Term Debt

Long-term debt consisted of the following:

 

 

 

 

 

March 31, 2018

 

 

December 31, 2017

 

(Dollar amounts in thousands)

 

Maturity Date

 

Amount

Outstanding

 

 

Interest

Rate

 

 

Amount

Outstanding

 

 

Interest

Rate

 

TDC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior secured notes - $25.0 million

 

December 30, 2020

 

$

15,938

 

 

8.50%

 

 

$

16,250

 

 

8.50%

 

SDTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior secured notes - $60.0 million

 

June 20, 2018

 

 

60,000

 

 

5.04%

 

 

 

60,000

 

 

5.04%

 

Senior secured term loan - $200.0 million

 

June 5, 2020

 

 

200,000

 

 

3.04%

 

 

 

200,000

 

 

2.71%

 

Senior secured notes - $400.0 million

 

December 3, 2025

 

 

400,000

 

 

3.86%

 

 

 

400,000

 

 

3.86%

 

Senior secured notes - $100.0 million

 

January 14, 2026

 

 

100,000

 

 

3.86%

 

 

 

100,000

 

 

3.86%

 

Senior secured notes - $53.5 million

 

December 30, 2029

 

 

40,009

 

 

7.25%

 

 

 

40,546

 

 

7.25%

 

Senior secured notes - $110.0 million

 

September 30, 2030

 

 

91,638

 

 

6.47%

 

 

 

92,821

 

 

6.47%

 

Total SDTS debt

 

 

 

 

891,647