HA Sustainable Infrastructure Capital, Inc.

Good afternoon and welcome to the Hannon Armstrong's conference call on its second quarter 2021 financial results. Leadership will be utilizing the 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 will be in listen-only mode. If you need any operator assistance, please press start, then zero on your telephone keypad. At this time, I would like to turn the call over to Chad Reed, Vice President, Investor Relations and ESG for the company.

Thank you, Kate. Good afternoon, everyone, and welcome. Earlier this afternoon, Hinton Armstrong distributed a press release detailing our second 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'd like to remind you that some of the comments made in the course of this call are forward-looking statements 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 Factors 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. During this call, we will primarily discuss non-GAAP financial measures, which we believe help investors gain a meaningful understanding of our core financial results and guidance. 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 Eckel, 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 terrific results for the second quarter. Record distributable earnings of 57 cents per share, an increase of 43 percent year-over-year, and distributable net investment income of 33 million, an increase of 64 percent year-over-year. We issued a billion-dollar green bond at 3.375 percent the lowest coupon for unsecured high-yield green bonds ever, thus lowering our cost of debt capital. We also grew our portfolio 43 percent year-over-year to $3 billion and grew our managed assets to $8 billion. And of course, we declared a dividend of 35 cents per share. We continue our leadership on ESG issues with our carbon count disclosures and our response to the SEC on mandatory ESG disclosures, which we'll talk about later. Turning to slide four, we highlight three trends that are reinforcing the markets in which we invest, and as a result, increased demand for climate solutions investing. Extreme weather events across the U.S. and the globe are driving acceptance of the climate change reality, and that reality will require, by some estimates, $2 to $4 trillion of climate solutions investments annually over the next three decades in order to limit global warming to one and a half degrees Celsius. As we have articulated over the last eight plus years, climate change represents an enormous and imperative investment opportunity. Second, policy tailwinds from the Biden administration and soon from Congress, it appears, are thoughtful and constructive, both in the infrastructure bill and the drafts of the budget reconciliation bill. The infrastructure bills focus on transmission and increasing the power of FERC positives for renewable energy. And while nothing is certain in the reconciliation bill, extension of tax credits, conversion of those credits to direct pay, and a carbon border adjustment would all be positive policy tailwinds for the climate solutions industries. Again, as we have shown over the prior four years, we don't need a policy tailwind to prosper, but we certainly do welcome them. Finally, corporate America is continuing to lead by adopting aggressive in near-term decarbonization targets, which in turn drives demand for the climate solutions our clients engineer. Increasingly, this demand is for 24-7 renewable energy to reduce the company's carbon footprint, which drives development of physical assets we can invest in and represents an increased sophistication in how corporates are making a meaningful change in their carbon emissions. Together, these three trends reinforce the growth we are seeing in our core markets which I discuss on the next slide. Slide five provides an update on our 12-month pipeline, which we are again reporting as greater than $3 billion. Our pipeline is driven by programmatic relationships with many of the leading clean energy and infrastructure companies, and we see growth in virtually every one of the approximately 10 end markets where we invest. Energy efficiency opportunities are a significant portion of the behind-the-meter pipeline, as government and corporate obligors want to reduce greenhouse gas emissions while also saving money and improving electric reliability. The solar pipeline is up as well, inclusive of residential and community solar. The grid-connected pipeline continues to expand in each of the markets, led by solar assets and the land on which those solar projects sit. Lastly, we continue to source attractive climate resilience opportunities, as reflected in our sustainable infrastructure pipeline and expect this opportunity to grow further as the impacts of severe weather continue to challenge state and local governments. We've been asked frequently about the impact of recent inflation pressures and supply chain constraints on projects in our pipeline, especially for solar projects. While we have seen a small number of projects delayed or renegotiated, most projects continue to move forward for a number of reasons. Demand from consumer, corporate, and utility buyers remains very strong, and indications are that PPA prices are increasing. Second, our clients typically enjoy significant market share, which better positions them to obtain materials and labor and to mitigate or pass along any cost increases. Finally, the industry, led by associations such as American Clean Power, is developing alternative supply chains and establishing an audit trail to ensure that polysilicon used in solar panel manufacturing is not sourced through forced labor, consistent with the Biden administration's recently issued order. We strongly support these initiatives. For these three reasons, we're pleased to report that we see no material delays and continue to expect a very active second half of this year. Now I'll turn it over to Jeff Hale to detail our portfolio performance and financial results.