Good afternoon. And welcome to Hannon Armstrong Sustainable Infrastructure Capital’s 2014 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 at investors.hannonarmstrong.com. Today’s call is being recorded and we have allocated one hour for prepared remarks and Q&A. All participants will be in a listen-only mode. (Operator Instructions). At this time, I would like to now turn the conference call over to Steve Chuslo, General Counsel for Hannon Armstrong.

Thank you, operator. Good afternoon, everyone. By now you should have received a copy of the earnings release for the company’s first quarter 2014 results. If you have not, the copy is available on our website www.hannonarmstrong.com. Today’s speakers are Jeffery 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 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 this call. In addition, all forward-looking statements are made as on 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 Jeffery Eckel, President and CEO.

Thanks Steve, and good afternoon everyone and thank you listening to HAS’s Q1 earnings call. Today, we are announcing core earnings of $3.3 million or $0.20 per share in line with the $0.22 dividend we announced in March. This is $0.02 from Q4 mostly related to increased interest expense that Brendan will speak to but we are on track to grow core earnings by the previously indicated 13% to 15% by Q4, 2014. We continued our execution of our business plan as we have in prior quarters by closing on over $125 million transactions, adding SunPower and Soltage as new clients to our existing client base, increasing our leverage from 1.2 to 1.5 to 1 and managing our 97% investment grade portfolio as well as our interest rate exposure. As most of you know we went back to the equity markets in April, a year from our IPO date and raised an additional $70 million of capital which when levered with our BAML credit facility, will provide us another five to eight months of capital to invest. As we were raising that equity and speaking with investors, one of the consistent questions that came up was a desire for more granularity around where we are investing and what those yields are in the various markets. Page 4 is an effort to provide more information on the various investment opportunities we see today. On the left and representing lower historical yields and spreads are the federal state and local markets. This is a relatively high credit quality asset class and a reliable source of originations for HASI. In fact the federal ESPC market received another boost from the Obama administration last Friday with a call for another $2 billion of federal ESPC transactions over the next three years. This builds on…

Thanks Jeff. We make our money by holding assets on our balance sheet or by securitizing originated projects with institutional investors in exchange for fee income. Given the change in the business model our IPO to hold more assets and generate net investment revenue, we believe the appropriate comparison of our result is to the prior quarter and thus would discuss our results on a sequential quarter-to-quarter basis. In Q1, our total revenue net of investment interest expense was 5.7 million, a decline from 6.2 million in Q4. Approximately 300,000 of this is the incremental interest expense relating to the first full quarter of our 2.79% fixed rate debt as it compared to the interests expense we would have incurred if we have continued to use our floating rate BAML credit facility. We also experienced higher interest expense due to increased leverage as we moved our leverage ratio to 1.5 to 1. Our $300,000 increase in other investment income, more than offset slightly lower investment revenue which resulted from timing differences in redeploying approximately $50 million of repayment in asset sales that we received at the end of the year in the beginning of Q1. We target our other investment revenue to largely offset our other expenses which it did for the quarter. For the fourth quarter since our IPO, our other investment revenue was $10 million as opposed to core other expenses of 9.6 million and thus we exceeded our target. Core earnings fell to $3.3 million or $0.20 per share compared to 3.6 million last quarter or $0.22 per share as a result of the incremental interest expense associated with our fixed rate debt of $300,000 or $0.02 a share. It is important to note that we ended Q1 with 46% of our debt fixed. Our plan is…

Thanks Brendan and once again thank you to the HASI team for another terrific effort this quarter. Our priorities for 2014 include capitalizing on the high growth distributed energy asset market, expanding our HASI ABS program with rated debt driving EPS growth in the 13% to 15% range which when combined with our dividend should provide investors with a 20% total return, and finally targeting $1 billion of assets by year-end on the balance sheet. We appreciate you listening to our Q1 update and we’ll now open the call up for a few questions.

Thank you. Ladies and gentlemen we’ll now be conducting a question-and-answer session. (Operator Instructions). Our first question comes from the line of Ben Kallo with Robert W. Baird. Please proceed with your question.

Hey gentlemen, thanks for taking my question. As far as the 125 million of transaction goes for Q1, looking back over your past quarters, it seems kind of at the lower end, is there anything to read through on that?

No, Ben, good question. We always said transactions will slip and the one thing we are worried about was any one quarter counting on any one deal. We did have a few transactions slipped from Q1 to Q2 but in fact if you look at it on an annualized basis, that was a short quarter in the first quarter, we're at about 99.5% of our annualized rate for originations on $800 million target. So we feel like we're completely on target and going forward the market just looks really rich for us.

Great. And then as far as pipeline, you guys mentioned the 2 billion, in excess of 2 billion; can you guys give any granularity on that on where you're seeing the opportunities and how we should think of that going forward?

: I mean, we tried to make these slides a little more interesting and change them up a bit but generally the energy efficiency and the clean energy split is pretty consistent between this quarter and prior quarters. As we said, we are definitely seeing a shift towards distributed energy assets, distributed generation in the clean energy category and I think the SunPower and Soltage transactions just speak to that. Those wouldn’t have been on our lead list a year ago and they certainly are a growing area for us to focus on.

Great, thank you. And then my last one, the $2 billion of federal energy efficiency projects is self-explanatory but also at the same time, the President called for the IRS and the Treasury to clarify laws around solar and real property. How does that impact you guys and what’s your view and your take on that? And I will hop back in queue there.

: Sure, well we are studying the proposed rules, what they generally do is confirm our view of the rules. These aren’t changes to the rules, they are meant to be clarifications and we don’t see a significant change to our business. The one thing that might actually happen is that REITs that actually own buildings, maybe able to call some solar assets, a good REIT asset, beyond that it’s not clear what else is actually being proposed. Brendan would you add anything to that?

No, I think that’s a good summary. It’s mostly, saying in different way, it’s kind of the cumulative case law and revenue rulings and things that we had over the years, they did specifically address solar focused on some place where an owner owned put solar panels on his roof.

Thank you. Our next question comes from the line of Ken Bruce with Bank of America. Please proceed with your question.

Thanks, good evening gentlemen. Just a clarifying point on one of the last questions there, so the move towards the distributed energy, is that going away from the other sustainable or is that the way to think about it just in the context of how you laid out the general composition of the balance sheet and the origination mix going forward?

: Thanks, Ken. The other sustainable has always been a bit of a catch all category for us until we see a real trend in one of those asset classes like fiber or water, they are more occasional transactions. I think and we continue to see those transaction. I really think the proportions between clean energy and energy efficiency, and then by definition other sustainable are staying pretty much in the same ratios, just trending towards more distributed rather than utility scale.

Okay. And the opportunity as it’s evolving in the distributed energy, you obviously seem very excited about, it seems a little abrupt just in terms of how quick this market has shifted. Can you maybe give us a little understanding as to what was happening on the utility scale side that’s made it less attractive to you and why the pursuit of distributed at this point?

: Well, I think we've been talking about this for at least the last three quarters, so it’s not a surprising shift for us. Really I think it starts with new builds are down in the large scale wind business and large scale solar business in-part because the expiry of the PTC for wind but also the renewable portfolio standards particularly in California have been pretty well satisfied by the existing set of projects. So, there isn’t the regulatory drive for additional projects at the same level they were in the past. That will change as RPSs increase and new projects will turnaround. But in let’s say 2014, we are seeing a pronounced shift towards distributed away from utility.

And the distributed part is due to the increase in competiveness of -- especially solar and the continued upward trend, expected upward trend in retail rates. And so solar and the distributed assets compete against retail price of electricity and although the cost to generation has come down with all our natural gas, retail rates have stayed flat or increased due to other investment utilities have to make in improving the reliability to grade in those types of things.

Okay. Thank you. And then in terms of residential, that particular asset class obviously gets a lot of press for a lot of different reasons. And I guess I am trying to understand what the nature of the credit is and how it’s different than what you may have been used to looking in other types of investments. And in addition to that what you’ve needed to do to develop the infrastructure to do that business in a large scale if you intend to do so?

: So I think it can -- the answer to this question, we continue to look at transactions that are -- where we have -- that in a well-structured way the ability to structure we look at them on a portfolio basis with very good coverage ratios and those types of things. If you do look at our portfolio residential projects, you’re going to then go look at the credit scores throughout the portfolio, but you’re also looking at the cash flows and how you can structure so that your -- you have -- you're not expose to individual homeowner credits. And I think that’s one of our focus is, that we look this as a -- when we are doing residential, we're looking at as a portfolio basis. I mean if you think about compared to what we’re doing at residential compared to, for example a solar city, they are getting credit for their equity value in those transactions we’re sitting senior and again continuing to be senior debt. So to the extent there was any issue in the portfolio in the nature of those transactions, obviously the equity is going take the first hit. So we think these transactions, at least the one we’ve entered into have been well structured and we continue to focus on that and pay particular attention to the credit attributes of the portfolio. But we’re not -- to be clear we’re not aggregating individual transactions ourselves. We’re going to manufactures or working with manufactures and others who are aggregating the transactions, and coming to us with a portfolio.

Thank you. Our next question comes from the line of Charles Nabhan with Wells Fargo. Please proceed with your question.

Hi, guys. Thank you for taking my question. You’ve indicated in the past that the 2 to 1 leverage target isn’t necessarily an absolute cap; could you give us a sense of how high maybe above that target that you would be willing to go given that the leverage on the fixed rate bond is 10 to 1?

: Yes, Charles. I think it’s something we consider to talk about and look internally the 2 to 1 is what has been approved by the board and what we think is reasonable right now given the size of the portfolio and the percentage; fixed versus floating interest rate. As we’ve always said, on individual transactions, especially where we can take interest rate off the table like the bond will go to a higher leverage target. So I think you’ll see individual transactions take advantage of higher leverage. And whether that leads us to eventually being in a position where we feel comfortable changing from our 2 to 1 target I think, we continue to look at that and think about that. But at this point in time when the overall portfolio, I don't think we're prepared to give you a particular number and I think we’re sticking to our 2 to 1 target.

Okay. Great. And also it would seem this, a diverse set of opportunity and a huge pipeline of opportunity out there. Looking at the company from an infrastructure standpoint, do you feel that the current employee base is sufficient to capitalize on that set of opportunity or do you see potential growth in the company’s infrastructure maybe over the next year or two?

: Well, I think we will be adding one or two people, Brandon referred to some increase in SG&A but any rate of increase will be substantially left in the rate of growth and the assets and the interest earnings. And that’s the scalable nature of the platform, but yes, there’s -- we have a plan to add a few people but it’s -- (demand) [ph] is relative to at the current stuff.

The other thing to think about there Charles is when we’re going after these new markets, we’re going after the way we historically have gone after it. So SunPower, you can think about SunPower in Solar as being no different JCI or Honeywell in energy efficiency there. You know they are the manufacturer, they are likely a participant in the project and we’re just helping themselves their panels.

: And they're there in all the markets and utility market commercial, industrial and residential similar to JCI and Honeywell.

So, we'll continue to approach the market the same way using kind of the leverage of the manufacturers and other key participants in the market.

Okay. And if I could sneak one more and in your past slides you’ve outlined a federal government goal of 30% reduction in energy consumption by 2015. Now is the 2 billion in projects through 2016, is that incremental to that consumption goal or how does that correlate?

: It is incremental, it builds on top of the prior 2 billion, as to what that does to the 30% number, I am not sure that anybody at the White House has done that math or we haven’t seen it.

Thank you. (Operator Instructions) Our next question comes from Paul Strigler from Esplanade. Please proceed with your question.

Hey guys. Can you just -- I am looking through the presentation, can you just tie-in for me the sort of $0.25 to $0.26 core EPS in Q4, ‘14 with that 6.6% sort of target yield based on the current stock price. It seems like at least by my math, the yield will be well over 7%.

: The 6.6 is the current yield, Paul, so $0.22 times 4 divided by where we were trading yesterday.

Great, okay. So, that 6.6% dividend yield is simply the current yield, there's been not a change in your target yield.

: Correct, that was -- it may have been not labeled clearly but our intention was just to say where we were today.

Great, good. And then on the SG&A, will you be able to cover the -- what 10% to 15% increase with season gains on securitization or should we expect sort of that relationship to change a little bit?

: I mean we have always talked in generality that we expect it to largely offset it, so we'll continue to work towards that target, we're a little ahead of the target this year. So -- but we'll continue to work towards a target that makes sense. As we have always talked, we look at the opportunity to hold or sell transactions on an individual transaction basis and what it does on the portfolio. So, depending on what we see in transactions and how they impact the portfolio will drive the exact math on how that will work.

Thank you. Ladies and gentlemen that’s all the time we have for questions today. I would like to turn the floor back over to management for closing comments.

: Thank you very much. We have our annual meeting on May 20th; hopefully some of you can come. We look forward to it and that’s it. Thank you very much.