Good afternoon, and welcome to Hannon Armstrong Sustainable Infrastructure Capital's 2013 First Quarter Earnings Conference Call. Management will be utilizing a slide presentation for this call, which is available now for download on Hannon Armstrong's Investor Relations page, investors.hannonarmstrong.com. [Operator Instructions] As a reminder, this conference is being recorded. At this time, I would like to turn the conference call over to Steve Chuslo, General Counsel at Hannon Armstrong.

Good afternoon, everyone. By now, you should have received a copy of the earnings release for the company's first quarter 2013 results. If you have not, a copy is available on our website at www.hannonarmstrong.com. Today's speakers are Jeff Eckel, Chief Executive Officer; and Brendan Herron, Chief Financial Officer. Before we begin, I would like to remind you that some of the comments made on today's 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 Exchange Act of 1934, as amended. For these statements, the company claims the protections of the Safe Harbor for forward-looking statements contained in such sections. The forward-looking statements made on this call are subject to the risks and uncertainties and include information about possible or assumed future results of the company's business, financial condition, liquidity, results of operations, plans and objectives. The forward-looking statements are based on the company's beliefs, assumptions and expectations of its future performance, taking into account all the information currently available to it. Except as required by law, the company is not obligated to and do not intend to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. These statements are subject to the risks and uncertainties described in the Risk Factors section of the company's Form 10-Q 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. I would now like to turn the call over to Jeff Eckel, the Chief Executive Officer.

Thanks, Jeff (sic) [Steve], and good afternoon, everyone. I didn't expect technical difficulties in the first quarterly call, so this is a good test. I'd like to welcome you all to Hannon Armstrong Sustainable Infrastructure Capital's First Quarter 2013 Earnings Call. I'm joined on today's call by Brendan Herron, our Chief Financial Officer; and Nate Rose, our Chief Investment Officer. I believe the announcer, Jen, said the material is on our website, and we've issued a press release today. I'd like to start off the call by providing some introductory comments about our recent IPO and, more importantly, the progress we've made deploying capital since completion of the IPO. Then, I'll turn the call over to Brendan, who will discuss the Q1 results for our predecessor company. And finally, I'll come back on to walk you through our company in more detail and walk through the slides, and we'll wrap up by taking questions. We're very pleased to be hosting our first earnings call as a publicly-traded company following the successful completion of our IPO last month. We sold 13.3 million shares and raised $155 million in net proceeds after underwriting discounts in the initial offering. And the underwriters’ option adds an additional $9.5 million net to our capital. We intend to lever our equity on a 2:1 basis and deploy our capital by financing sustainable infrastructure projects. The offering was the culmination of a lot of hard work over the last few years, and I'd like to thank the many people involved, including our staff, who thankfully were working hard when the 3 of us were on the road; our clients; and our financing partners. And a very special thank you to our many new investors who spent the time learning the Hannon Armstrong investment story and making an…

Thanks, Jeff. As required under SEC rules, we filed a 10-Q today for the results of operations for Hannon Armstrong Capital, LLC, which is our predecessor company. Under SEC rules, we'll be reporting these first quarter results and our year-to-date numbers all year, and we'll be showing comparative numbers against the same period and year-to-date last year for the predecessor. The first quarter results and the comparative last year results are pre-IPO and do not reflect the enhanced business model that Jeff just described. Thus, these figures are not a good measure of our earnings potential or the results of our business post-IPO. For the quarter ended March 31, the predecessor reported investment revenue from financing receivables of $2.7 million versus $2.6 million in the same period last year. After backing out investment interest expense, net investment revenue was flat at $500,000. The net investment revenue pre-IPO is purely the recognition of our fee income on our match-funded on balance sheet transactions. Going forward, you will see the investment revenue grow from the deals Jeff described and other deals we put on the balance sheet. As we will be financing those transactions with a combination of our new debt facilities and equity, we expect to see net investment revenue grow significantly. For example, the $109 million of deals Jeff announced earlier will generate over $1.5 million per quarter in investment revenue, and we'll be growing that revenue number as we continue to grow assets and deploy capital. On the fee side of the business, other investment revenue declined to $0.3 million from $1.5 million in the same period a year ago. The decline is largely due to the lack of any securitization transactions in the quarter. This is a good example of why a fee-only business would be a difficult…

Thanks, Brendan. As this is our first public call and some of you may not have had the opportunity to hear our story during the roadshow, I want to take some time to provide an introduction to our company. And if you have access to the slides on the website, I'll refer to them occasionally. First, some background. Hannon Armstrong is a 32-year-old specialty finance company that provides capital, mostly debt, for sustainable infrastructure projects. We have financed our business historically through securitizations and syndications which generate fees. After the IPO, we'll hold more assets on our balance sheet, but we will continue to securitize and syndicate transactions. We think it's a very scalable business that leverages our existing client base of Global 1000 companies. Since 2000, we've done about $4 billion of transactions in approximately 450 individual transactions. We truly believe in the financial merits of sustainable infrastructure, and our management team has dedicated our careers to the sustainable infrastructure industry. We are delighted to have completed the IPO, which provided our company with capital and, in turn, introduced a new asset class to institutional and retail investors. We expect to generate an attractive risk-adjusted yield with a roadmap to getting above 7% by year end. That yield will be earned through the cash flows that stem from projects that use proven technologies and our financed using proven financial structures. The cash flows are generated from high credit quality obligors to fully-contracted, life-of-investment revenue streams, and all of this is in the U.S. market for sustainable infrastructure, which we believe is large and growing. This is, importantly, an internally-managed business, which means our management team is fully aligned with shareholders, with management owning over 8% of the business. Looking at our assets, we finance proven technologies like HVAC, lighting,…

[Operator Instructions] Our first question comes from the line of Vivek Agrawal with Wells Fargo Securities.

I had a question around the $109 million that you closed in the quarter. The $61 million that was outside of what was provided in the initial investment, can you give us a breakdown of the buckets of the composition of that?

We've hit all the buckets. We prefer to not, given the information that's out there, to talk -- I think, some observers could figure it out and those are probably the ones we compete with. But generally, the business is developing as we expected it would. We're seeing deals at all asset classes, and they will all close in due time.

And then, I guess, secondly, around your pipeline, is it fair to assume that it's in the buckets that you have provided as your targeted portfolio?

Sure. It doesn't get onto our pipeline unless it's prescreened and fits into our investment thesis. So there are deals we see that -- they should be good deals for somebody but they're not our kind of deal, so absolutely.

Right. And lastly, on your prepared remarks, you talked a little bit about water and wastewater type of projects. I guess that was a little bit higher than what you had put out in the prospectus, is that -- I assume that's something that you find a little bit of -- find more interest in. Is that's something that is also more competitive relative to the other buckets?

I don't think there's any difference in what we presented in the prospectus or on the roadshow in the sense that we didn't provide a lot of detail on any of that. But any of the studies that look at U.S. infrastructure are very clear that this is one of the classes that will need just a substantial amount of investment. And so I'm not exactly sure what you're pointing to -- maybe, Brendan, you have...

So, Vivek, I think the numbers in the roadshow -- I mean, the prospectus are the historical-managed portfolio, and I think Jeff was quoting in the slide kind of the couple year out target. So what we see is a growth in other sustainable over the next couple of years. We think there's an opportunity there to grow that category. So we expect that to grow from about 9% or 10%, as was listed in the prospectus, to approximately 20% to 25% of the portfolio as we move forward.

[Operator Instructions] Our next question comes from Arias Kellier [ph] with Iron Bank.

I'm intrigued by one comment that you made to the effect that many of the projects that you fund would actually benefit from inflation. I was wondering whether you could elaborate a bit on that and also just touch on a bit of the tools that you use to manage interest rate risk in your portfolio?

Sure, this is Brendan. So on the inflation, one of the things that we do is we replace commodities. So if you think about energy efficiency, for example, we're replacing electricity. In other places, we may replace natural gas, and in some of the resource recovery type work, we actually replace other commodities. So as the value of those commodities go up, so as electric prices go up, for example, there's -- because we're replacing and basically locking in the value, there's a further benefit to the participant. And that's one of the things that the, for example, the government organizations find very helpful is that when we are doing an energy efficiency project, we are effectively allowing them to lock in their energy bill for the next -- for the life of the project. And by doing that, they get kind of a levelized payment, so they're not exposed then when there is inflation in those areas. And as far as interest rate hedging, I think as we've talked to various people on the road and things, there's a couple of things to think about in interest rate. First of all, because we continue to originate in all interest rate environments, the originations will kind of act as a bond ladder. We'll also have a blend of fix and floating on the asset side, and then finally on the liability side, we anticipate that we will either hedge in some way, either capture swaps or the portfolio on the debt side, so that we fix out the cost of the debt. Given the current interest rate environment, it's relatively inexpensive to fix out cost of debt. And then longer term, we're going to be looking at doing more asset-backed securities and public debt securities, and we expect that both of those would be more term -- fixed-term type facilities. So that, again, would allow us to fix out the cost of the debt side.

[Operator Instructions]

All right, thank you. I appreciate your interest in Hannon Armstrong, and we look forward to getting back on the phone with you in another 3 months. So long.

Thank you. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.