HA Sustainable Infrastructure Capital, Inc.

Good afternoon, and welcome to Hannon Armstrong's conference call on its first quarter 2021 financial results. Leadership will be utilizing a slide presentation for this call, which is available now for download on the company's investor relations page at investors.hannonarmstrong.com. Today's call is being recorded, and we have allocated 30 minutes for prepared remarks and Q&A. All participants are in a listen-only mode. If you need any operator assistance, please press star zero on your telephone keypad. At this time, I would like to turn the conference call over to Chad Reed, Vice President, Investor Relations, and ESG for the company. Please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome. Earlier this afternoon, Hannon Armstrong distributed a press release detailing our first quarter 2021 results, a copy of which is available on our website. This conference call is being webcast live on the Investor Relations page of our website, where a replay will be available later today. Before the call begins, I would like to remind you that some of the comments made in the course of this call are forward-looking statements, and within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities and Exchange Act of 1934 as amended. The company claims the protections of the safe harbor for forward-looking statements contained in such sections. The forward-looking statements made in this call are subject to the risks and uncertainties described in the risk factor section of the company's Form 10-K and other filings with the SEC. Actual results may differ materially from those described during the call. In addition, all forward-looking statements are made as of today and the company does not undertake any responsibility to update any forward-looking statements based on new circumstances or revised expectations. Please note that certain non-GAAP financial measures will be discussed on this conference call. A presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. A reconciliation of GAAP to non-GAAP financial measures is available on our posted earnings release and slide presentation. Joining me on today's call are Jeff Heckel, the company's chairman and CEO, and Jeff Lipson, our CFO and COO. With that, I'd like to turn the call over to Jeff, who will begin on slide three. Jeff? Thank you, Chad, and good afternoon, everyone.

Today we are reporting gap earnings of 61 cents per share and distributable earnings of 43 cents per share. 38% portfolio growth year-over-year to $2.9 billion and 19% growth in our managed assets to $7.4 billion. The establishment of a $400 million unsecured revolving credit facility, a 10 basis point increase in our portfolio yield to 7.7% from the Q4 levels, and the declaration of a dividend of 35 cents per share. We continue our leadership on ESG reporting with our carbon count disclosures and our 2020 impact report. Turning to slide four, we remain confident in our ability to achieve the three-year guidance target we established last quarter due to expected portfolio growth, stable or improving margins, and improvements in our operating leverage. These three factors will be the drivers for growth in distributable earnings per share of 7 to 10 percent through 2023 and the dividend growth at a rate of 3 to 5 percent annually also through 2023. With distributable earnings growing faster than our dividend, we can continue to retain capital for accretive investments and believe the combination of earnings growth and dividend yield remain attractive on a total return basis. On slide five, we provide an update on our 12-month pipeline, which we are again reporting as greater than $3 billion. Our pipeline is driven by both new and existing programmatic relationships with the leading clean energy and infrastructure companies, and we see strong growth in virtually every one of the approximately 10 end markets where we invest. Energy efficiency opportunities continue to dominate the behind-the-meter or BTM pipeline as government and corporate obligors save money with energy efficiency improve their reliability, all the while reducing greenhouse gas emissions. The solar pipeline is up as well, inclusive of the residential CNI and community solar markets. The grid-connected pipeline continues to expand in each of the markets, led first by grid-connected solar, solar land, and then offshore wind. Lastly, we continue to source attractive climate resilience opportunities as reflected in our sustainable infrastructure pipelines. and expect this opportunity to grow further as the impacts of severe weather continue to challenge state and local government stormwater management efforts. We've been asked frequently lately about project delays due to COVID, silicon chip shortages, or delays in anticipation of government stimulus, and are pleased to report that we see no noticeable project or transaction delays and expect a very active 2021. Turning to slide six, we detail our $2.9 billion balance sheet portfolio as of the end of the first quarter. As I said at the beginning, the portfolio yield ticked up slightly from last quarter, but otherwise is fairly steady at 7.7% on over 220 investments with an average size of $13 million and a weighted average life of 18 years. With no asset class comprising more than 28% of the portfolio, the diversity of our portfolio remains a strength. a little more detail on the portfolio. The behind-the-meter assets represents roughly half of our portfolio and generates a yield of 8.4 percent. The strong credit profile of these assets is driven by the fact that virtually all of these assets save money for the obligor. The grid-connected portfolio represents, grid-connected investments represent the other half of the portfolio with an expected forward-looking yield of 7.1 percent. This market continues to be driven primarily by onshore wind in solar land with utility-scale solar, a small but growing piece of the pie, as reflected in the pipeline discussion on the prior slide. We remain pleased with the diversity of our portfolio and believe this is a key driver of its consistently strong performance. Now I'll turn it over to Jeff L. to detail our portfolio performance and financial results.