Business Context and Reporting Period
Hannon Armstrong Sustainable Infrastructure Capital, Inc. filed this Form 8-K on April 28, 2015, to disclose preliminary results of operations and financial condition for the quarter ended March 31, 2015, and year-to-date activity through April 27, 2015.
Key Financial Metrics
- Transaction Volume: Approximately $167 million completed year-to-date (Jan 1 – Apr 27, 2015); approximately $104 million closed in Q1 2015; an additional $63 million closed since the quarter-end.
- Core Earnings (Preliminary): Estimated at $0.26 to $0.27 per share for Q1 2015.
- Debt to Equity Ratio: Approximately 2.0 to 1 as of March 31, 2015 (excluding match-funded other nonrecourse debt).
- Debt Composition: Fixed debt represented approximately 39% of total fixed and floating debt (excluding match-funded other nonrecourse debt).
- Liquidity: Approximately $321.0 million outstanding under the senior secured revolving credit facility with Bank of America, N.A. as of March 31, 2015.
Material Changes Versus Prior Period
- Transaction Growth: Year-to-date transaction volume increased to $167 million in 2015 compared to $132 million in the same period of 2014.
- Earnings Growth: Preliminary core earnings per share for Q1 2015 ($0.26–$0.27) represent an increase from $0.20 per share in Q1 2014.
Guidance, Outlook, and Risks
The Company provided preliminary estimates for Q1 2015 core earnings and leverage ratios. Management noted that these figures are subject to change upon the completion of financial statements and final adjustments required by U.S. GAAP. The filing explicitly states there can be no assurance that the estimated ranges are indicative of final results or future performance. Core earnings are calculated by excluding non-cash equity compensation, non-cash provision for credit losses, amortization of intangibles, one-time acquisition costs, and non-cash tax charges, while adjusting for equity method investments in wind projects.
Investor Verification Checklist
- Verify the final audited Q1 2015 financial statements to confirm the preliminary core earnings range of $0.26 to $0.27 per share.
- Confirm the final debt-to-equity ratio and total debt composition after the completion of financial closing procedures.
- Review the upcoming Form 10-Q for detailed breakdowns of the $167 million in year-to-date transactions and the specific nature of the $63 million in post-quarter closings.
- Monitor for any material adjustments to the $321.0 million outstanding balance on the revolving credit facility.