The InfraREIT Inc. board has directed management to pursue an alternative structure involving the termination of the company's real estate investment trust status, following the completion of an initial review.
The "De-REIT alternative," which calls for a traditional C-corporation structure, could involve negotiations with Hunt Consolidated Inc. and its affiliates on their current arrangements.
"Our pursuit of a De-REIT alternative does not change our core strategy," said InfraREIT CEO David Campbell in a May 3 statement. "We are committed to operating and expanding our franchise as a transmission-focused utility, supporting load growth in West Texas and the expansion of renewables in the Panhandle.
Publicly-traded InfraREIT is the majority owner of Sharyland Distribution & Transmission Services LLC, which leases its transmission and distribution assets to Sharyland Utilities LP. InfraREIT is owned by an investor consortium that includes Hunt Consolidated.
In the same news release, InfraREIT reported non-GAAP net income of $17.8 million, or 29 cents per share, in the first quarter of 2018, compared with net income of $12.0 million, or 20 cents per share, in the prior-year period.
Net income attributable to the company was $12.9 million, or 29 cents per share, an increase from $7.9 million, or 18 cents per share, a year ago.
Adjusted funds from operations were $28.6 million in the most recent quarter, up from $24.7 million in the 2017 first quarter.
Lease revenue, consisting only of base rent, increased 15% to $45.7 million from $39.6 million a year ago.
The company reaffirmed non-GAAP earnings in the range of $1.22 per share to $1.32 per share for full-year 2018.