Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI) Q1 2023 Earnings Conference Call May 4, 2023 5:00 PM ET Company Participants Jeff Lipson - President, Chief Executive Officer Marc Pangburn - Chief Financial Officer Neha Gaddam - Senior Director of Investor Relations, Corporate Finance Conference Call Participants Noah Kaye - Oppenheimer Cameron Lochridge - Bank of America Chris Souther - B. Riley Jeff Rossetti - Cowen Operator Greetings! And welcome to the HASI’s First Quarter Earnings ...

Forward Looking Statements This presentation refers to certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). Additional information concerning these non-GAAP financial measures as well as reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the Appendix herein. Consistently Strong Execution with Continued Forward Momentum | --- | --- | --- | |-------|----------------- ...

Part I [Business](index=7&type=section&id=Item%201.%20Business) HASI invests in climate solutions, growing managed assets to $9.8 billion in 2022, focusing on diversified portfolios and ESG leadership Key Business Metrics (as of December 31, 2022) | Metric | 2022 Value (billion USD) | 2021 Value (billion USD) | | :--- | :--- | :--- | | Transactions Completed | ~$1.8 | ~$1.7 | | On-Balance Sheet Portfolio | ~$4.3 | ~$3.6 | | Managed Assets (On & Off-Balance Sheet) | ~$9.8 | ~$8.8 | | Number of Employees | 114 | Not specified | - The company's investment strategy is centered on three key markets: - **Behind-the-Meter (BTM):** Projects reducing energy usage at the point of consumption (e.g., solar, energy efficiency) Constitutes **~56% of the Portfolio** - **Grid-Connected (GC):** Large-scale renewable projects like solar and wind farms Constitutes **~40% of the Portfolio** - **Sustainable Infrastructure (SI):** Projects like upgraded transmission, water infrastructure, and renewable natural gas[39](index=39&type=chunk)[43](index=43&type=chunk) - HASI utilizes a variety of investment structures, including equity investments (preferred or common), commercial and government receivables (loans), and real estate ownership (land leases for projects)[41](index=41&type=chunk) - The company emphasizes transparent ESG reporting, using its proprietary CarbonCount® tool to measure the carbon emissions avoided by its investments For 2022 originations, the CarbonCount was **0.35**, equating to over **600,000 metric tons of annual carbon emissions avoided**[33](index=33&type=chunk)[44](index=44&type=chunk) - A significant management succession was announced effective March 1, 2023: Jeffrey W Eckel will become Executive Chairman, Jeffrey A Lipson will become President and CEO, and Marc T Pangburn will become CFO[81](index=81&type=chunk) [Risk Factors](index=16&type=page&id=Item%201A.%20Risk%20Factors) The company faces risks from government policy dependence, market competition, illiquid investments, and complex REIT compliance - **Business & Industry Risks:** The business heavily depends on U.S federal, state, and local government policies and incentives A decline in this support, such as changes to the Inflation Reduction Act, could harm the business The company also operates in a competitive market and faces pressure from fluctuations in the cost of traditional energy sources[100](index=100&type=chunk)[107](index=107&type=chunk)[117](index=117&type=chunk) - **Asset & Project Risks:** Investments are often illiquid, not rated by agencies, and subject to delinquency and loss The company generally does not control the projects it invests in and is exposed to the credit risk of various sponsors and offtakers, performance risk of the underlying technology, and physical risks from climate change and extreme weather[122](index=122&type=chunk)[129](index=129&type=chunk)[151](index=151&type=chunk) - **Company & Financial Risks:** The company must manage complex regulations to maintain its REIT status and its exemption from the 1940 Act, which can limit investment choices It is exposed to cybersecurity risks, interest rate fluctuations affecting borrowing costs and asset values, and risks associated with financial leverage[176](index=176&type=chunk)[182](index=182&type=chunk)[190](index=190&type=chunk) - **Taxation & REIT Risks:** Complying with REIT requirements is complex and may force the liquidation of assets or foregoing attractive investments to meet income, asset, and distribution tests Failure to qualify as a REIT would result in significant adverse tax consequences[236](index=236&type=chunk)[247](index=247&type=chunk) [Unresolved Staff Comments](index=43&type=page&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[264](index=264&type=chunk) [Properties](index=43&type=section&id=Item%202.%20Properties) The company's principal executive offices are located at One Park Place, Suite 200, Annapolis, Maryland 21401 - The company's main office is located in Annapolis, Maryland[265](index=265&type=chunk) [Legal Proceedings](index=43&type=section&id=Item%203.%20Legal%20Proceedings) As of December 31, 2022, the company is not subject to any legal proceedings that are expected to have a material adverse effect on its financial position, results of operations, or cash flows - The company is not currently subject to any material legal proceedings[266](index=266&type=chunk) [Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[267](index=267&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=44&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) HASI common stock trades on NYSE, with regular quarterly distributions and limited share repurchases for tax obligations - The company's common stock is listed on the NYSE under the ticker symbol "HASI"[270](index=270&type=chunk) - The company intends to pay regular quarterly dividends, contingent on operational results, financial condition, and maintaining its REIT status[271](index=271&type=chunk) 2022 Issuer Purchases of Equity Securities | Period | Total Shares Purchased | Average Price Paid per Share ($) | | :--- | :--- | :--- | | March 1 - March 31, 2022 | 45,045 | $49.09 | | May 1 - May 31, 2022 | 25,295 | $37.53 | | June 1 - June 30, 2022 | 20 | $39.20 | | August 1 - August 30, 2022 | 1,152 | $43.11 | *Purchases were primarily to satisfy employee tax withholdings on vested stock. [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net income declined in 2022 due to equity investment losses, despite revenue growth, while liquidity remained strong and distributable earnings rose Comparison of Operations (2022 vs. 2021) | Metric | 2022 (million USD) | 2021 (million USD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $239.7 | $213.2 | +12% | | Total Expenses | $221.7 | $195.1 | +14% | | Income from Equity Method Investments | $31.3 | $126.4 | -75% | | Net Income | $41.9 | $127.3 | -67% | - The significant decrease in net income was primarily driven by a **$95 million reduction** in income from equity method investments This was due to non-recurring income from tax credit allocations in 2021 and unrealized mark-to-market losses on economic hedges in 2022[348](index=348&type=chunk) Non-GAAP Distributable Earnings Reconciliation Summary | Metric | 2022 (million USD) | 2021 (million USD) | | :--- | :--- | :--- | | **Net Income Attributable to Controlling Stockholders** | **$41.5** | **$126.6** | | Equity Method Investments Adjustment | +$100.5 | -$22.7 | | Non-cash & Other Adjustments | +$43.8 | +$54.8 | | **Distributable Earnings** | **$185.8** | **$158.7** | | **Distributable EPS** | **$2.08** | **$1.88** | - The company maintains a strong liquidity position with **$156 million in unrestricted cash**, **$600 million in unused capacity** on its unsecured revolving credit facility, and **$100 million available** under its commercial paper program as of year-end 2022[382](index=382&type=chunk) Leverage and Debt Profile | Metric | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Debt to Equity Ratio | 1.8 to 1 | 1.6 to 1 | | Percentage of Fixed-Rate Debt | 86% | 94% | [Quantitative and Qualitative Disclosures About Market Risk](index=74&type=page&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages primary market risks including credit, interest rate, liquidity, and commodity price through various mitigation strategies - Primary market risks identified are: credit quality of counterparties, market interest rates, asset liquidity, and commodity prices[407](index=407&type=chunk) - The company is subject to interest rate risk on its floating-rate borrowings A **50 basis point increase** in benchmark interest rates would increase quarterly interest expense by **$538,000** on the **$431 million** of variable rate borrowings outstanding at year-end[414](index=414&type=chunk) - The company attempts to mitigate interest rate risk by matching asset and liability maturities and using fixed-rate financing As of December 31, 2022, approximately **86% of the company's debt was fixed-rate**[387](index=387&type=chunk)[412](index=412&type=chunk) - Commodity price risk is most relevant for Grid-Connected (GC) projects This risk is generally mitigated by structuring investments with long-term Power Purchase Agreements (PPAs) or other structural protections like preferred returns[418](index=418&type=chunk)[419](index=419&type=chunk) - Risk management is an ongoing process involving active asset monitoring, enforcement of contracts, and use of a Board-level Finance and Risk Committee to oversee policies regarding interest rate, credit, and capital availability risks[422](index=422&type=chunk) [Financial Statements and Supplementary Data](index=78&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Audited financial statements show asset growth and an unqualified opinion, with equity investment accounting identified as a Critical Audit Matter - The independent registered public accounting firm, Ernst & Young LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting[427](index=427&type=chunk)[444](index=444&type=chunk) - A Critical Audit Matter was identified concerning the 'Accounting for Equity Investments in Climate Solutions Projects' This was due to the complex judgments involved in determining control for consolidation purposes, applying the Hypothetical Liquidation at Book Value (HLBV) method, and assessing for other-than-temporary impairment (OTTI)[433](index=433&type=chunk)[434](index=434&type=chunk) Consolidated Balance Sheet Summary (in thousands) | Account | Dec 31, 2022 (thousand USD) | Dec 31, 2021 (thousand USD) | | :--- | :--- | :--- | | Total Assets | $4,760,148 | $4,148,311 | | Total Liabilities | $3,095,402 | $2,581,796 | | Total Stockholders' Equity | $1,664,746 | $1,566,515 | Consolidated Statement of Operations Summary (in thousands) | Account | 2022 (thousand USD) | 2021 (thousand USD) | | :--- | :--- | :--- | | Total Revenue | $239,737 | $213,166 | | Total Expenses | $221,736 | $195,083 | | Income (loss) from equity method investments | $31,291 | $126,421 | | Net Income (loss) | $41,911 | $127,346 | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=119&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with its accountants on accounting and financial disclosure - None[623](index=623&type=chunk) [Controls and Procedures](index=119&type=page&id=Item%209A.%20Controls%20and%20Procedures) Management and auditors concluded that disclosure controls and internal control over financial reporting were effective as of year-end 2022 - Management concluded that disclosure controls and procedures were effective as of the end of the period[624](index=624&type=chunk) - Management assessed internal control over financial reporting as effective as of December 31, 2022 The independent auditor's report concurred with this assessment[627](index=627&type=chunk)[629](index=629&type=chunk) - No material changes to internal control over financial reporting occurred during the fourth quarter of 2022[628](index=628&type=chunk) [Other Information](index=119&type=page&id=Item%209B.%20Other%20Information) The company announced a leadership succession effective March 1, 2023, with new CEO and CFO appointments and related employment agreements - A planned leadership succession was announced to be effective March 1, 2023[630](index=630&type=chunk) - Jeffrey W Eckel will transition from CEO to Executive Chairman[631](index=631&type=chunk) - Jeffrey A Lipson will be promoted from COO/CFO to President & CEO[637](index=637&type=chunk) - Marc T Pangburn will be promoted from Co-CIO to Executive Vice President and CFO[643](index=643&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=121&type=page&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - None[648](index=648&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=122&type=section&id=Item%2010.%20Directors,%20Executive%20Officers,%20and%20Corporate%20Governance) Information required by this item, including details on directors, executive officers, the code of ethics, and corporate governance matters, is incorporated by reference from the company's definitive proxy statement for its 2023 annual meeting of stockholders - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the forthcoming Proxy Statement[651](index=651&type=chunk)[652](index=652&type=chunk)[653](index=653&type=chunk) [Executive Compensation](index=122&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive proxy statement for its 2023 annual meeting of stockholders - Information regarding executive compensation is incorporated by reference from the forthcoming Proxy Statement[654](index=654&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=122&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership by certain beneficial owners and management is incorporated by reference from the company's definitive proxy statement As of December 31, 2022, there were 7,435,731 securities remaining available for future issuance under the company's equity compensation plans - Information regarding security ownership is incorporated by reference from the forthcoming Proxy Statement[655](index=655&type=chunk) Equity Compensation Plan Information (as of Dec 31, 2022) | Plan Category | Number of securities remaining available for future issuance | | :--- | :--- | | Equity compensation plans approved by stockholders | 7,435,731 | | Equity compensation plans not approved by stockholders | 0 | | **Total** | **7,435,731** | [Certain Relationships and Related Transactions and Director Independence](index=123&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's definitive proxy statement for its 2023 annual meeting of stockholders - Information regarding related party transactions and director independence is incorporated by reference from the forthcoming Proxy Statement[658](index=658&type=chunk) [Principal Accountant Fees and Services](index=123&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services, as well as the Audit Committee's pre-approval policies, is incorporated by reference from the company's definitive proxy statement for its 2023 annual meeting of stockholders - Information regarding accountant fees and services is incorporated by reference from the forthcoming Proxy Statement[659](index=659&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=124&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, financial statement schedules (including Schedule II - Valuation and Qualifying Accounts), and all exhibits filed as part of the Form 10-K Exhibits include corporate governance documents, indentures for various debt issuances, employment agreements, and required certifications - This section contains the index of financial statements, schedules, and exhibits filed with the report[661](index=661&type=chunk)[662](index=662&type=chunk) - Key exhibits filed include new employment agreements for the executive leadership succession, various debt indentures, and equity incentive plan documents[663](index=663&type=chunk)[665](index=665&type=chunk)[666](index=666&type=chunk) [Form 10-K Summary](index=127&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company did not provide a summary for this item - None[667](index=667&type=chunk)

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI) Q4 2022 Earnings Conference Call February 16, 2023 5:00 PM ET Company Participants Neha Gaddam - Senior Director, Investor Relations & Corporate Finance Jeff Eckel - Chairman & Chief Executive Officer Jeff Lipson - Chief Financial Officer & Chief Operating Officer Marc Pangburn - Executive Vice President & Co-Chief Investment Officer Conference Call Participants Noah Kaye - Oppenheimer Chris Souther - B. Riley Mark Strauss - JPMorgan Oper ...

| --- | --- | --- | --- | --- | --- | --- | |------------------|---------------------------------------------------------|-------|-------|-------|-----------|-------| | | | | | | | | | | | | | | INVESTING | | | HANNON ARMSTRONG | EARNINGS PRESENTATION Fourth Quarter and Full Year 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | FORWARD LOOKING STATEMENTS Other important factors that we think could cause our actual results to differ materially f ...

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI) Q3 2022 Earnings Conference Call November 3, 2022 5:00 PM ET Company Participants Neha Gaddam - Senior Director, Investor Relations & Corporate Finance Jeff Eckel - Chairman & Chief Executive Officer Jeff Lipson - Chief Operating Officer & Chief Financial Officer Conference Call Participants Noah Kaye - Oppenheimer Chris Souther - B. Riley Ben Kallo - Baird Jeff Osborne - Cowen and Company Julien Dumoulin-Smith - Bank of America Operator ...

| --- | --- | --- | --- | --- | --- | --- | --- | |------------------|------------------------------------------|-------|-------|-------|-------|-----------|-------| | | | | | | | | | | | | | | | | INVESTING | | | HANNON ARMSTRONG | EARNINGS PRESENTATION Third Quarter 2022 | | | | | OLUT | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | FORWARD LOOKING STATEMENTS Other important factors that we think could cause our actual results to differ mater ...

Financial Performance - Hannon Armstrong's Distributable EPS reached a record of $0.60[6] - Distributable Net Investment Income (NII) increased by 44% year-over-year (YOY) and 13% from Q1[5, 6] - The company declared a dividend of $0.375 per share[6] - GAAP Diluted EPS was $(0.21)[5, 12] Portfolio and Investments - The portfolio expanded by 30% YOY, reaching $3.9 billion[5, 11] - Managed Assets grew by 16% YOY, totaling $9.3 billion[5] - Transactions closed amounted to $340 million[5] - The portfolio yield stood at 7.4%[5, 11] Pipeline and Future Outlook - The company has a robust pipeline exceeding $4 billion[10] - Hannon Armstrong affirms guidance for Distributable EPS (2021-2024) with a CAGR of 10%-13% and DPS with a CAGR of 5%-8%[6]

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI) Q2 2022 Earnings Conference Call August 4, 2022 5:00 PM ET Company Participants Neha Gaddam - Investor Relations Jeff Eckel - Chairman and Chief Executive Officer Jeff Lipson - Chief Financial Offer and Chief Operating Officer Conference Call Participants Noah Kaye - Oppenheimer Chris Souther - B. Riley Mark Strouse - JPMorgan Stephen Byrd - Morgan Stanley Jeff Osborne - Cowen and Company Julien Dumoulin-Smith - Bank of America Operator G ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-35877 HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. (Exact name of registrant as specified in its charter) Maryland 46-1347456 (S ...