2016 INTERACTIVE ANNUAL REPORT

Real Estate Investment Trusts (REITs) have historically been used for traditional real property holdings that produce rental income, such as apartment buildings, shopping centers and office space. In 2007, we obtained a private letter ruling from the Internal Revenue Service confirming that our regulated assets could constitute real estate assets under applicable REIT rules. Since InfraREIT’s formation in 2010, InfraREIT and Sharyland, our tenant, have developed expertise in owning and operating electric infrastructure assets in a REIT.

For an entity to qualify as a REIT, the entity must meet certain thresholds:

  • The REIT must own the property
  • Rental income must be paid to the REIT by a separate operator of the property
  • 75 percent of income must be rents from real estate assets
  • 75 percent of the assets must be real estate assets
  • The REIT must have 100 or more shareholders
  • 90 percent of the taxable income must be distributed by the REIT as dividends to investors on an annual basis

As long as these and certain other thresholds are met, the REIT receives a deduction for dividends paid. If not, the REIT is taxed as a regular corporation.

The information provided on these pages includes forward-looking statements, which are subject to known and unknown risks and uncertainties that could cause actual results to differ materially. We refer you to the discussion of risk factors that could affect future results and performance in our most recent prospectus and other SEC filings. InfraREIT, Inc. assumes no obligation to update any forward-looking statements made here as a result of new information or future events or developments.

InfraREIT, Inc. makes no claims concerning the accuracy of the information provided on these pages, and will not be held liable for any use of this information. Note: Historical and current stock price performance data is not necessarily indicative of future performance.