10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 001-35877

HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC.

(Exact name of registrant as specified in its charter)

Maryland	46-1347456
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1906 Towne Centre Blvd, Suite 370 Annapolis,
Maryland	21401
(Address of principal executive offices)	(Zip code)

(410) 571-9860

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐  (Do not check if a smaller reporting company)	Smaller reporting company	☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 43,312,945 shares of common stock, par value $0.01 per share, outstanding as of November 1, 2016 (which includes 1,323,460 shares of unvested restricted common stock).

FORWARD-LOOKING STATEMENTS

We make forward-looking statements in this Quarterly Report on Form 10-Q (“Form 10-Q”) within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are subject to risks and uncertainties. For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. When we use the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may” or similar expressions, we intend to identify forward-looking statements.

Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those described in the forward-looking statements are contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (our “2015 Form 10-K”) that was filed with the U.S. Securities and Exchange Commission (the “SEC”), and include risks discussed in the Management’s Discussion and Analysis of Financial Condition and Results of Operation of this Form 10-Q and in other periodic reports that we file with the SEC. Statements regarding the following subjects, among others, may be forward-looking:

• our expected returns and performance of our investments;

• the state of government legislation, regulation and policies that support energy efficiency, renewable energy and sustainable infrastructure projects and that enhance the economic feasibility of energy efficiency, renewable energy and sustainable infrastructure projects and the general market demands for such projects;

• market trends in our industry, energy markets, commodity prices, interest rates, the debt and lending markets or the general economy;

• our business and investment strategy;

• availability of opportunities to finance energy efficiency, renewable energy and sustainable infrastructure projects and our ability to complete potential new opportunities in our pipeline;

• our relationships with originators, investors, market intermediaries and professional advisers;

• competition from other providers of financing;

• our or any other companies’ projected operating results;

• actions and initiatives of the U.S. federal, state and local governments and changes to U.S. federal, state and local government policies, regulations, tax laws and rates and the execution and impact of these actions, initiatives and policies;

• the state of the U.S. economy generally or in specific geographic regions, states or municipalities; economic trends and economic recoveries;

• our ability to obtain and maintain financing arrangements on favorable terms, including securitizations;

• general volatility of the securities markets in which we participate;

• changes in the value of our assets, our portfolio of assets and our investment and underwriting process;

• interest rate and maturity mismatches between our assets and any borrowings used to fund such assets;

• changes in interest rates and the market value of our assets and target assets;

• changes in commodity prices;

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• effects of hedging instruments on our assets;

• rates of default or decreased recovery rates on our assets;

• the degree to which our hedging strategies may or may not protect us from interest rate volatility;

• impact of and changes in accounting guidance and similar matters;

• our ability to maintain our qualification, as a real estate investment trust for U.S. federal income tax purposes (a “REIT”);

• our ability to maintain our exception from registration under the Investment Company Act of 1940, as amended (the “1940 Act”);

• availability of qualified personnel;

• estimates relating to our ability to make distributions to our stockholders in the future; and

• our understanding of our competition.

Forward-looking statements are based on beliefs, assumptions and expectations as of the date of this Form 10-Q. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements after the date of this Form 10-Q, whether as a result of new information, future events or otherwise.

The risks included here are not exhaustive. Other sections of this Form 10-Q or our 2015 Form 10-K may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

The following discussion is a supplement to and should be read in conjunction with our 2015 Form 10-K.

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TABLE OF CONTENTS

		Page
PART 1 FINANCIAL INFORMATION			1
Item 1.	Financial Statements		1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		37
Item 4.	Controls and Procedures		39
PART II. OTHER INFORMATION			40
Item 1.	Legal Proceedings		40
Item 1A.	Risk Factors		40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		40
Item 3.	Defaults Upon Senior Securities		40
Item 4.	Mine Safety Disclosures		40
Item 5.	Other Information		40
Item 6.	Exhibits		41
SIGNATURES			42

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PART 1 FINANCIAL INFORMATION

Item 1. Financial Statements

HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2016 and DECEMBER 31, 2015

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

	September 30, 2016			December 31, 2015
Assets
Financing receivables	$	865,481		$	783,967
Financing receivables held-for-sale		7,378			60,376
Investments available-for-sale		50,291			29,017
Real estate		134,815			128,769
Real estate related intangible assets		30,924			26,930
Equity method investments in affiliates		323,968			318,769
Cash and cash equivalents		72,968			42,645
Other assets		70,340			79,148
Total Assets	$	1,556,165		$	1,469,621
Liabilities and Stockholders’ Equity
Liabilities:
Accounts payable, accrued expenses and other	$	28,015		$	17,875
Deferred funding obligations		64,331			108,499
Credit facilities		356,419			247,350
Nonrecourse debt (secured by assets of $763 million and $815 million, respectively)		610,267			663,791
Total Liabilities		1,059,032			1,037,515
Stockholders’ Equity:
Preferred stock, par value $0.01 per share, 50,000,000 shares authorized, no shares issued and outstanding		—			—
Common stock, par value $0.01 per share, 450,000,000 shares authorized, 41,989,485 and 37,010,603 shares issued and outstanding, respectively		420			370
Additional paid in capital		578,107			482,431
Retained deficit		(80,865	)		(52,701	)
Accumulated other comprehensive loss		(4,289	)		(1,905	)
Non-controlling interest		3,760			3,911
Total Stockholders’ Equity		497,133			432,106
Total Liabilities and Stockholders’ Equity	$	1,556,165		$	1,469,621

See accompanying notes.

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HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2016			2015			2016			2015
Revenue:
Interest income, financing receivables	$	12,043		$	10,064		$	36,178		$	26,609
Interest income, investments		494			364			1,303			1,118
Rental income		2,977			1,988			8,768			6,641
Gain on sale of receivables and investments		2,724			2,529			13,665			6,956
Fee income		770			98			1,422			1,160
Total Revenue		19,008			15,043			61,336			42,484
Expenses:
Investment interest expense		(10,635	)		(6,689	)		(32,945	)		(18,940	)
Compensation and benefits		(4,325	)		(4,341	)		(14,497	)		(12,171	)
General and administrative		(1,991	)		(2,034	)		(6,129	)		(5,360	)
Total Expenses		(16,951	)		(13,064	)		(53,571	)		(36,471	)
Income before equity method investments in affiliates		2,057			1,979			7,765			6,013
Income (loss) from equity method investments in affiliates		1,331			187			2,677			(162	)
Income before income taxes		3,388			2,166			10,442			5,851
Income tax expense		(41	)		(24	)		(123	)		(77	)
Net Income	$	3,347		$	2,142		$	10,319		$	5,774
Net income attributable to non-controlling interest holders		18			23			75			62
Net Income Attributable to Controlling Shareholders	$	3,329		$	2,119		$	10,244		$	5,712
Basic earnings per common share	$	0.07		$	0.06		$	0.23		$	0.16
Diluted earnings per common share	$	0.07		$	0.06		$	0.23		$	0.16
Weighted average common shares outstanding—basic		41,988,036			31,221,982			38,924,977			29,046,742
Weighted average common shares outstanding—diluted		41,998,036			31,221,982			38,924,977			29,046,742

See accompanying notes.

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HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(DOLLARS IN THOUSANDS)

(UNAUDITED)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016		2015			2016			2015
Net Income	$	3,347	$	2,142		$	10,319		$	5,774
Unrealized gain/(loss) on interest rate swaps, net of taxes of $0.0 million in 2016		488		—			(5,428	)		—
Unrealized gain/(loss) on available-for-sale securities, net of taxes benefit/(provision) of $0.0 million in each of the three and nine months periods ended 2016 and $0.0 million and $0.2 million for the three and nine months ended 2015, respectively		2,065		(788	)		3,027			(1,281	)
Comprehensive income	$	5,900	$	1,354		$	7,918		$	4,493
Less: Comprehensive income attributable to non-controlling interests holders		38		16			58			49
Comprehensive Income Attributable to Controlling Shareholders	$	5,862	$	1,338		$	7,860		$	4,444

See accompanying notes.

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HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN THOUSANDS)

(UNAUDITED)

	Nine Months Ended September 30,
	2016			2015
Cash flows from operating activities
Net income	$	10,319		$	5,774
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,350			2,716
Equity-based compensation		7,452			7,728
From equity method investments in affiliates		570			162
Gain on sale of financing receivables and investments		(10,319	)		(5,069	)
Changes in financing receivables held-for-sale		40,560			15,019
Changes in accounts payable and accrued expenses		4,596			119
Other		(7,523	)		(4,652	)
Net cash provided by operating activities		51,005			21,797
Cash flows from investing activities
Purchases of financing receivables		(223,051	)		(222,823	)
Principal collections from financing receivables		104,741			59,188
Proceeds from sales of financing receivables		35,052			57,995
Purchases of investments		(25,895	)		(21,190	)
Principal collections from investments		1,406			8,792
Proceeds from sales of investments		13,914			10,794
Purchases of real estate		(10,964	)		(42,007	)
Investments in equity method affiliates, net		(14,165	)		(42,633	)
Distributions received from equity method affiliates		41,800			21,095
Other		12,192			(3,119	)
Net cash used in investing activities		(64,970	)		(173,908	)
Cash flows from financing activities
Proceeds from credit facilities		270,900			236,786
Principal payments on credit facilities		(161,275	)		(174,555	)
Proceeds from nonrecourse debt		—			112,126
Principal payments on nonrecourse debt		(56,324	)		(38,419	)
Payments on deferred funding obligations		(56,281	)		(65,869	)
Net proceeds of common stock issuances		91,167			81,546
Payments of dividends and distributions		(36,401	)		(23,062	)
Other		(7,498	)		(3,961	)
Net cash provided by financing activities		44,288			124,592
Increase (decrease) in cash and cash equivalents		30,323			(27,519	)
Cash and cash equivalents at beginning of period		42,645			58,199
Cash and cash equivalents at end of period	$	72,968		$	30,680
Interest paid	$	28,056		$	18,545

See accompanying notes.

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HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

September 30, 2016

1. The Company

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (“the Company”) provides debt and equity to the energy efficiency and renewable energy markets. The Company and its subsidiaries are hereafter referred to as “we,” “us,” or “our.” We refer to the financings that we hold on our balance sheet as our “Portfolio.” Our Portfolio may include:

• Financing Receivables, such as project loans, receivables and direct financing leases,

• Investments, such as debt and equity securities,

• Real Estate, such as land or other physical assets and related intangible assets used in renewable energy projects, and

• Equity Investments in unconsolidated affiliates, such as projects where we hold non-consolidated equity interests in renewable energy projects.

We finance our business through cash on hand, borrowings under our credit facilities and debt transactions, and various asset-backed securitization transactions and equity issuances. We also generate fee income through asset-backed securitizations, by providing broker/dealer services and by servicing assets owned by third parties. Some of our subsidiaries are special purpose entities that are formed for specific operations associated with financing sustainable infrastructure receivables for specific long term contracts.

Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “HASI.” We have qualified as a REIT and also intend to operate our business in a manner that will continue to permit us to maintain our exception from registration as an investment company under the Investment Company Act of 1940, as amended. We operate our business through, and serve as the sole general partner of, our operating partnership subsidiary, Hannon Armstrong Sustainable Infrastructure, L.P, (the “Operating Partnership”), which was formed to acquire and directly or indirectly own our assets.

2. Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements reflect all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the financial position, results of operations, comprehensive income and cash flows for the periods presented. The preparation of financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and such differences could be material. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the entire year. Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted. Certain amounts in the prior year have been reclassified to conform to the current year presentation, including the format of the revenue section of the income statement to include a calculation of Total Revenue.

The condensed consolidated financial statements include the accounts of the Company and its controlled subsidiaries, including the Operating Partnership. All significant intercompany transactions and balances have been eliminated in consolidation.

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Following the guidance for non-controlling interests in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation, references in this report to our earnings per share and our net income and shareholders’ equity attributable to common shareholders do not include amounts attributable to non-controlling interests.

Financing Receivables

Financing receivables include financing energy efficiency and renewable energy project loans, receivables and direct financing leases.

Unless otherwise noted, we generally have the ability and intent to hold our financing receivables for the foreseeable future and thus they are classified as held for investment. Our ability and intent to hold certain financing receivables may change from time to time depending on a number of factors, including economic, liquidity and capital market conditions. The carrying value of financing receivables held for investment represents the present value of the note, lease or other payments, net of any unearned fee income, which is recognized as income over the term of the note or lease using the effective interest method. Financing receivables that are held for investment are carried, unless deemed impaired, at cost, net of any unamortized acquisition premiums or discounts and include origination and acquisition costs, as applicable. Financing receivables that we intend to sell in the short-term are classified as held-for-sale and are carried at the lower of amortized cost or fair value on our balance sheet. The net purchases and proceeds from these sales of our held-for-sale financing receivables are recorded as an operating activity in our statement of cash flows based on our intent at the time of purchase. We may secure nonrecourse debt with the proceeds from our financing receivables. We evaluate any modifications of financing receivables to determine whether the modification is a minor modification in accordance with the guidance in ASC 310, Receivables.

We evaluate our financing receivables for potential delinquency or impairment on at least a quarterly basis and more frequently when economic or other conditions warrant such an evaluation. When a financing receivable becomes 90 days or more past due, and if we otherwise do not expect the debtor to be able to service all of its debt or other obligations, we will generally consider the financing receivable delinquent or impaired and place the financing receivable on non-accrual status and cease recognizing income from that financing receivable until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a financing receivable’s status significantly improves regarding the debtor’s ability to service the debt or other obligations, we will remove it from non-accrual status.

A financing receivable is also considered impaired as of the date when, based on current information and events, it is determined that it is probable that we will be unable to collect all amounts due in accordance with the original contracted terms. Many of our financing receivables are secured by energy efficiency and renewable energy infrastructure projects. Accordingly, we regularly evaluate the extent and impact of any credit deterioration associated with the performance and value of the underlying project, as well as the financial and operating capability of the borrower, its sponsors or the obligor as well as any guarantors. We consider a number of qualitative and quantitative factors in our assessment, including, as appropriate, a project’s operating results, loan-to-value ratios and any cash reserves, the ability of expected cash from operations to cover the cash flow requirements currently and into the future, key terms of the transaction, the ability of the borrower to refinance the transaction, other credit support from the sponsor or guarantor and the project’s collateral value. In addition, we consider the overall economic environment, the sustainable infrastructure sector, the effect of local, industry, and broader economic factors, the impact of any variation in weather and the historical and anticipated trends in interest rates, defaults and loss severities for similar transactions.

If a financing receivable is considered to be impaired, we record an allowance to reduce the carrying value of the financing receivable to the present value of expected future cash flows discounted at the financing receivable’s contractual effective rate or the amount realizable from other contractual terms such as the currently estimated fair market value of the collateral less estimated selling costs, if repayment is expected solely from the collateral. We charge off financing receivables against the allowance when we determine the unpaid principal balance is uncollectible, net of recovered amounts.

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Investments

Investments include debt securities that meet the criteria of ASC 320, Investments—Debt and Equity Securities. We have designated our debt securities as available-for-sale and carry these securities at fair value on our balance sheet. Unrealized gains and losses, to the extent not considered other than temporary impairment (“OTTI”), on available-for-sale debt securities are recorded as a component of accumulated other comprehensive income (“OCI”) in equity on our balance sheet.

We evaluate our investments for OTTI on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Our OTTI assessment is a subjective process requiring the use of judgments and assumptions. Accordingly, we regularly evaluate the extent and impact of any credit deterioration associated with the financial and operating performance and value of the underlying project. We consider a number of qualitative and quantitative factors in our assessment. We first consider the current fair value of the security and the duration of any unrealized loss. Other factors considered include changes in the credit rating, performance of the underlying project, key terms of the transaction, the value of any collateral and any support provided by the sponsor or guarantor.

To the extent that we have identified an OTTI for a security and intend to hold the investment to maturity and we do not expect that we will be required to sell the security prior to recovery of the amortized cost basis, we recognize only the credit component of OTTI in earnings. We determine the credit component using the difference between the securities’ amortized cost basis and the present value of its expected future cash flows, discounted using the effective interest method or its estimated collateral value. Any remaining unrealized loss due to factors other than credit, or the non-credit component, is recorded in accumulated OCI.

To the extent we hold investments with an OTTI and if we have made the decision to sell the security or it is more likely than not that we will be required to sell the security prior to recovery of its amortized cost basis, we recognize the entire portion of the impairment in earnings.

Premiums or discounts on investment securities are amortized or accreted into investment interest income using the effective interest method.

Real Estate

Real estate reflects land or other real estate held on our balance sheet. Real estate intangibles reflect the value of associated lease intangibles, net of any amortization. In accordance with ASC 805, Business Combinations, the fair value of the real estate acquired in a business combination with in-place leases is allocated to (i) the acquired tangible assets, consisting of land or other real property such as buildings, and (ii) the identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and the value of other acquired intangible assets, based in each case on their fair values.

The fair value of the tangible assets of an acquired leased property is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land, building and tenant improvements, if any, based on the determination of the fair values of these assets. The as-if-vacant fair value of a property is determined by management based on an appraisal of the property by a qualified appraiser.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as intangible assets based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases, and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the lease, including renewal periods likely of being exercised by the lessee. The capitalized above-market lease values are amortized as a reduction of rental income and the capitalized below-market lease values are amortized as an increase to rental income. We also record, as appropriate, an intangible asset for in-place leases. The value of the leases in place at the time of the transaction is equal to the potential revenue (rent and expenses) lost if the leases were not in place (during downtime) and that would be incurred to obtain the lease. The amortization is calculated over the initial term unless management believes that it is likely that the tenant would exercise the renewal option, whereby we would amortize the value attributable to the renewal over the renewal period. If a lease were to be terminated, all unamortized amounts relating to that lease would be written off.

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We record the purchases of real estate, other than in a business combination (i.e. real estate with no in-place leases), as asset acquisitions that are recorded at cost, including acquisition and closing costs. Our real estate is generally leased to tenants on a net lease basis, whereby the tenant is responsible for all operating expenses relating to the property, generally including property taxes, insurance, maintenance, repairs and capital expenditures. Scheduled rental revenue typically varies during the lease term and thus rental income is recognized on a straight-line basis, unless there is considerable risk as to collectability, so as to produce a constant periodic rent over the term of the lease. Accrued rental income is the aggregate difference between the scheduled rents which vary during the lease term and the income recognized on a straight-line basis and is recorded in other assets. Rental expenses (if any) are charged to operations as incurred.

Securitization of Receivables

We have established various special purpose entities or securitization trusts for the purpose of securitizing certain financing receivables or other debt investments. We determined that the trusts used in securitizations are variable interest entities, or VIEs, as defined in ASC 810, Consolidation. We typically serve as primary or master servicer of these trusts; however, as the servicer, we do not have the power to make significant decisions impacting the performance of the trusts. Based on an analysis of the structure of the trusts, under U.S. GAAP, we have concluded that we are not the primary beneficiary of the trusts as we do not have power over the trusts’ significant activities. Therefore, we do not consolidate these trusts in our condensed consolidated financial statements.

We account for transfers of financing receivables to these securitization trusts as sales pursuant to ASC 860, Transfers and Servicing, as we have concluded the transferred receivables have been isolated from the transferor (i.e., put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership) and we have surrendered control over the transferred receivables. We have received true-sale-at-law opinions for all of our securitization trust structures and non-consolidation legal opinions for all but one old securitization trust structure that support our conclusion regarding the transferred receivables. When we sell receivables in securitizations, we generally retain minor interests in the form of servicing rights and residual assets, which we refer to as securitization assets.

Gain or loss on the sale of receivables is calculated based on the excess of the proceeds received from the securitization (less any transaction costs) plus any retained interests obtained over the cost basis of the receivables sold. For retained interests, we generally estimate fair value based on the present value of future expected cash flows using our best estimates of the key assumptions of anticipated losses, prepayment rates, and current market discount rates commensurate with the risks involved.

We initially account for all separately recognized servicing assets and servicing liabilities at fair value and subsequently measure such servicing assets and liabilities using the amortization method. Servicing assets and liabilities are amortized in proportion to, and over the period of, estimated net servicing income with servicing income recognized as earned. We assess servicing assets for impairment at each reporting date. If the amortized cost of servicing assets is greater than the estimated fair value, we will recognize an impairment in net income.

Our other retained interest in securitized assets, the residual assets, are classified as available-for-sale securities and carried at fair value on the condensed consolidated balance sheets in Other Assets. We generally do not sell our residual assets. Our residual assets are evaluated for impairment on a quarterly basis. Interest income related to the residual assets is recognized using the effective interest rate method. If there is a change in expected cash flows related to the residual assets, we calculate a new yield based on the current amortized cost of the residual assets and the revised expected cash flows. This yield is used prospectively to recognize interest income.

Cash and Cash Equivalents

Cash and cash equivalents include short-term government securities, certificates of deposit and money market funds, all of which had an original maturity of three months or less at the date of purchase. These securities are carried at their purchase price, which approximates fair value.

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Restricted Cash

Restricted cash includes cash and cash equivalents set aside with certain lenders primarily to support deferred funding and other obligations outstanding as of the balance sheet dates. Restricted Cash is reported as part of Other Assets in the condensed consolidated balance sheets.

Variable Interest Entities and Equity Method Investments in Affiliates

We account for our investment in entities that are considered voting or variable interest entities under ASC 810, Consolidation. We perform an ongoing assessment to determine the primary beneficiary of each entity as required by ASC 810. We have established various special purpose entities or securitization trusts for the purpose of securitizing certain financing receivables or other debt investments which are not consolidated in our financial statements as described in Securitization of Receivables above.

Substantially all of the activities of the special purpose entities that are formed for the purpose of holding our financing receivables and investments on our balance sheet are closely associated with our activities. Based on our assessment, we determined that we have power over and receive the benefits of these special purpose entities; hence, we are the primary beneficiary and should consolidate these entities under the provisions of ASC 810.

We have made equity investments in various renewable energy projects. We share in the cash flows and tax attributes according to a negotiated schedule. Our renewable energy projects are typically owned in partnerships structures (using limited liability companies, or LLCs, taxed as partnerships) where we, along with other large institutional investors, if any, receive a stated preferred return consisting of a priority distribution of all or a portion of the project’s cash flows, and in some cases, tax attributes. Once this preferred return is achieved, the partnership “flips” and the company which operates the project receives a larger portion of the cash flows through its interest in the holding company and we, along with the other institutional investors, will have an on-going residual interest.

We made several new equity investments in renewable energy projects in 2016 that, along with our existing investments, are accounted for under the equity method of accounting. Certain of our equity method investments were determined to be VIEs. Our maximum exposure to loss associated with our equity method investments is limited to our recorded value of our investments.

Under the equity method of accounting, the carrying value of our equity method investments is determined based on amounts we invested, adjusted for the equity in earnings or losses of investee allocated based on the limited liability entity agreement, less distributions received. Because the limited liability entity and holding company agreements contain preferences with regard to cash flows from operations, capital events and liquidation, we reflect our share of profits and losses by determining the difference between our “claim on the investee’s book value” at the end and the beginning of the period. This claim is calculated as the amount we would receive (or be obligated to pay) if the investee were to liquidate all of its assets at recorded amounts determined in accordance with U.S. GAAP and distribute the resulting cash to creditors and investors in accordance with their respective priorities. This method is commonly referred to as the hypothetical liquidation at book value method or (“HLBV”). Intra company gains and losses are eliminated for an amount equal to our interest and are reflected in the share in loss from equity method investments in affiliates in the consolidated statements of operations. Cash distributions received from our equity method investments are classified as operating cash flows to the extent of cumulative HLBV earnings. Any additional cash flows are deemed to be returns of the investment and are classified as investing cash flows. We have elected to recognize earnings from these investments one quarter in arrears to allow for the receipt of financial information.

We evaluate the realization of our investment accounted for using the equity method if circumstances indicate that our investment is OTTI. OTTI occurs when the estimated fair value of an investment is below the carrying value and the difference is determined to not be recoverable. This evaluation requires significant judgment regarding, but not limited to, the severity and duration of the impairment; the ability and intent to hold the securities until recovery; financial condition, liquidity, and near-term prospects of the issuer; specific events; and other factors. Based on an evaluation of our equity method investments, we determined that no impairment had occurred during the three or nine months ended September 30, 2016 or 2015.

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Derivative Financial Instruments

We utilize derivative financial instruments, primarily interest rate swaps, to manage, or hedge, our interest rate risk exposures associated with new debt issuances, to manage our exposure to fluctuations in interest rates on variable rate debt, and to optimize the mix of our fixed and floating-rate debt. In addition, we use forward-starting interest rate swap contracts to manage a portion of our interest rate exposure for anticipated refinancing of our long-term debts. Our objective is to manage the impact of interest rates on the results of operations and cash flows and the market value of our debt.

The interest rate swaps we use are designated as cash flow hedges and are considered highly effective in reducing our exposure to the interest rate risk that they are designated to hedge. This effectiveness is essential in order to qualify for hedge accounting. Instruments that meet these hedging criteria are formally designated as hedges at the inception of the derivative contract. Derivatives are recorded on the consolidated balance sheet at fair value. If a derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in Accumulated Other Comprehensive Income, net of associated deferred income tax effects, in our Consolidated Statements of Stockholders’ Equity and Comprehensive Income (Loss) and are recognized in the Consolidated Statements of Operations when the hedged item affects earnings. Changes in fair value of the ineffective portions of these hedges are recognized in general and administrative expenses in our Consolidated Statements of Operations. For any derivative instruments not designated as hedging instruments, changes in fair value would be recognized in our Consolidated Statements of Operations in the period that the change occurs. We assess, both at the inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. We do not hold derivatives for trading purposes.

Interest rate swap contracts contain a credit risk that counterparties may be unable to fulfill the terms of the agreement. We attempt to minimize that risk by evaluating the creditworthiness of its counterparties, who are limited to major banks and financial institutions, and do not anticipate nonperformance by the counterparties.

Income Taxes

We elected and qualified to be taxed as a REIT for U.S. federal income tax purposes, commencing with our taxable year ended December 31, 2013. To qualify as a REIT, we must meet on an ongoing basis a number of organizational and operational requirements, including a requirement that we currently distribute at least 90% of our net taxable income, excluding capital gains, to our shareholders. We intend to continue to meet the requirements for qualification as a REIT. As a REIT, we are not subject to U.S. federal corporate income tax on that portion of net income that is currently distributed to our owners. However, our taxable REIT subsidiaries (“TRSs”) will generally be subject to U.S. federal, state, and local income taxes as well as taxes of foreign jurisdictions, if any.

We account for income taxes of our TRSs using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted.

We apply accounting guidance with respect to how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. This guidance requires the accounting and disclosure of tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are “more likely than not” to be sustained by the applicable tax authority. We are required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which includes U.S. federal and certain states. We have no examinations in progress, none are expected at this time, and years 2012 through 2015 are open. As of September 30, 2016 and December 31, 2015, we had no uncertain tax positions. Our policy is to recognize interest expense and penalties related to income tax matters as a component of general and administrative expense. There were no accrued interest and penalties as of September 30, 2016 and December 31, 2015, and no interest and penalties were recognized during the three or nine months ended September 30, 2016 and 2015.

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Equity-Based Compensation

At the time of completion of our initial public offering (“IPO”), we adopted our 2013 Equity Incentive Plan (the “2013 Plan”), which provides for grants of stock options, stock appreciation rights, restricted stock units, shares of restricted common stock, phantom shares, dividend equivalent rights, long-term incentive-plan units (“LTIP units”) and other restricted limited partnership units issued by our Operating Partnership and other equity-based awards. From time to time, we may award unvested restricted stock as compensation to members of our senior management team, our independent directors, employees, advisors, consultants and other personnel under our 2013 Plan.

We record compensation expense for stock awards in accordance with ASC 718, Compensation—Stock Compensation. We record compensation expense for unvested shares that vest solely based on service conditions on a straight-line basis over the vesting period based upon the fair market value of the shares on the date of grant. For awards where the vesting is contingent upon achievement of certain performance targets, compensation expense is recorded over the requisite service period (which includes the performance period) based on our estimate of the achievement of the various performance targets. Our share price at the date of grant and actual performance results at the end of the performance period determine the fair value and the number of shares that will ultimately be awarded. The award earned is generally between 0% and 150% of the initial target, depending on the extent to which the performance target are met.

Earnings Per Share

We compute earnings per share of common stock in accordance with ASC 260, Earnings Per Share. Basic earnings per share is calculated by dividing net income attributable to controlling stockholders (after consideration of the earnings allocated to unvested shares of restricted common stock) by the weighted-average number of shares of common stock outstanding during the period excluding the weighted average number of unvested shares of restricted common stock or restricted stock units (“participating securities” as defined in Note 12). Diluted earnings per share is calculated by dividing net income attributable to controlling stockholders by the weighted-average number of shares of common stock outstanding during the period plus other potentially dilutive securities. No adjustment is made for shares that are anti-dilutive during a period.

Segment Reporting

We provide and arrange debt and equity financing for sustainable infrastructure projects and report all of our activities as one business segment.

Recently Issued Accounting Pronouncements

Revenue from Contracts with Customers

In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. The FASB proposed delaying the effective date of the standard by one year and issued a proposal that is intended to clarify and simplify the guidance. The updated standard becomes effective for us on January 1, 2018 and we expect will be first presented in our March 31, 2018, Form 10-Q. We have not yet selected a transition method, and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures.

Consolidation

In February 2015, the FASB issued ASU No. 2015-02 “Consolidation (Topic 810) Amendments to the Consolidation Analysis,” which affects the following areas of the consolidation analysis: limited partnerships and similar entities, evaluation of fees paid to a decision maker or service provider as a variable interest and in determination of the primary beneficiary, effect of related parties on the primary beneficiary determination and for certain investment funds. ASU No. 2015-02 is effective for us for our fiscal year ending December 31, 2016 and interim periods therein. The adoption of this standard did not have a material impact on our consolidated financial position, results of operations and cash flows.

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Income Taxes

In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740) – Balance Sheet Classification of Deferred Taxes.” The purpose of the standard is to simplify the presentation of deferred taxes on a classified balance sheet. Under current GAAP, deferred income tax assets and liabilities are separated into current and noncurrent amounts in the balance sheet. The amendments in ASU 2015-17 require that all deferred tax assets and liabilities be classified as noncurrent in the balance sheet. The ASU will be effective for us beginning January 1, 2017, including interim periods in the calendar year 2017, but with early adoption permitted. Since we do not report a classified balance sheet, we do not expect the adoption of ASU 2015-17 to have a material impact on our consolidated financial statements and related disclosures.

Leases

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Changes were made to align lessor accounting with the lessee accounting model and ASU No. 2014-09, “Revenue from Contracts with Customers.” The new lease guidance simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The ASU will be effective for us beginning January 1, 2019. Early application is permitted for all public business entities upon issuance. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Lessees may not apply a full retrospective transition approach. We are currently evaluating the impact of the application of this accounting standard update on our consolidated financial statements and related disclosures.

Share-Based Payments

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting.” Under the new guidance, entities will be required to recognize all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. In addition, the new guidance will allow an employer to repurchase up to the maximum statutory income tax rates in the applicable jurisdictions without triggering liability accounting and allow an entity to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur. The guidance is effective for us beginning after December 15, 2016, and interim periods within those years. Early adoption is permitted in any annual or interim period for which financial statements haven’t been issued or made available for issuance, but all of the guidance must be adopted in the same period. We implemented this standard in the second quarter of 2016. The implementation did not have a material impact on our consolidated financial statements and related disclosures. See Note 11 for further information.

Equity Method Investments

In March 2016, the FASB issued ASU No. 2016-07, “Simplifying the Transition to the Equity Method of Accounting.” The new standard eliminates the requirement for an investor to retroactively apply the equity method when an increase in ownership interest in an investee triggers equity method accounting. It also simplifies in certain areas the accounting for equity method investments. The new standard becomes effective for us in fiscal year ending December 31, 2017 and interim periods therein. The adoption of this standard is not expected to have a material impact on our consolidated financial statements and related disclosures.

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Credit Losses

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments (Topic 326).” ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 will replace the “incurred loss” approach under existing guidance with an “expected loss” model for instruments measured at amortized cost, and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as currently required. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We are currently evaluating the impact the adoption of ASU 2016-13 will have on our consolidated financial statements and related disclosures.

Statement of Cash Flows

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 provides guidance on how certain cash receipts and cash payments are presented and classified in the statement of cash flows where the current GAAP treatment is either unclear or there is no specific accounting guidance. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017 and is to be applied using a retrospective transition method to each period presented. The adoption of this standard is not expected to have a material impact on our consolidated financial statements and related disclosures.

3. Fair Value Measurements

Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The fair value accounting guidance provides a three-level hierarchy for classifying financial instruments. The levels of inputs used to determine the fair value of our financial assets and liabilities carried on the balance sheet at fair value and for those for which only disclosure of fair value is required are characterized in accordance with the fair value hierarchy established by ASC 820, Fair Value Measurements. Where inputs for a financial asset or liability fall in more than one level in the fair value hierarchy, the financial asset or liability is classified in its entirety based on the lowest level input that is significant to the fair value measurement of that financial asset or liability. We use our judgment and consider factors specific to the financial assets and liabilities in determining the significance of an input to the fair value measurements. As of September 30, 2016 and December 31, 2015, only our residual assets (described in Note 5), financing receivables held-for-sale, interest rate swaps and investments available-for-sale, if any, were carried at fair value on the condensed consolidated balance sheets on a recurring basis. The three levels of the fair value hierarchy are described below:

• Level 1—Quoted prices (unadjusted) in active markets that are accessible at the measurement date.

• Level 2—Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

• Level 3—Unobservable inputs are used when little or no market data is available.

Unless otherwise discussed below, fair value is measured using a discounted cash flow model, contractual terms and Level 3 unobservable inputs which consist of base interest rates and spreads over base rates which are based upon market observation and recent comparable transactions. An increase in these unobservable inputs would result in a lower fair value and a decline would result in a higher fair value. The financing receivables held for sale are carried at the lower of cost or market.

	As of September 30, 2016
	Fair Value		Carrying Value		Level
	(dollars in millions)
Assets
Financing receivables	$	914	$	865		Level 3
Financing receivables held-for-sale		7		7		Level 3
Investments available-for-sale(1)		50		50		Level 3
Liabilities
Credit facilities	$	356	$	356		Level 3
Nonrecourse debt(2)		649		624		Level 3
Derivative liabilities		6		6		Level 2

(1) The amortized cost of our investments available-for-sale as of September 30, 2016, was $51 million.

(2) Fair value and carrying value of nonrecourse debt excludes unamortized debt issuance costs.

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	As of December 31, 2015
	Fair Value		Carrying Value		Level
	(dollars in millions)
Assets
Financing receivables	$	806	$	784		Level 3
Financing receivables held-for-sale		61		60		Level 3
Investments available-for-sale(1)		29		29		Level 3
Liabilities
Credit facility	$	247	$	247		Level 3
Nonrecourse debt(2)		690		680		Level 3
Derivative liabilities		1		1		Level 2

(1) The amortized cost of our investments available-for-sale as of December 31, 2015, was $31 million.

(2) Fair value and carrying value of nonrecourse debt excludes unamortized debt issuance costs.

Investments

We carry our investments in debt securities at fair value on our balance sheet as investments available-for-sale. The following table reconciles the beginning and ending balances for our Level 3 investments that are carried at fair value on a recurring basis:

	For the three months ended September 30,					For the nine months ended September 30,
	2016		2015			2016			2015
	(dollars in millions)
Balance, beginning of period	$	48	$	28		$	29		$	27
Purchases of investments available-for-sale		2		1			34			21
Payments on investments available-for-sale		—		—			(1	)		(9	)
Sale of investments available-for-sale		—		—			(14	)		(11	)
Gains on investments available-for-sale recorded in earnings		—		—			1			1
Gains (losses) on investments available-for-sale recorded in OCI(1)		—		(1	)		1			(1	)
Balance, end of period	$	50	$	28		$	50		$	28

(1) As of September 30, 2016, approximately $11 million of investment grade rated debt that we held for more than 12 months was in an unrealized loss position due to interest rate movements. As of September 30, 2016, we held no other securities in an unrealized loss position.

For investments held at fair value, we used a range of interest rate spreads of approximately 1% to 5% based upon comparable transactions.

As of December 31, 2015, we held a $13 million senior secured debt investment, along with a large financial institution which held the remaining approximately $45 million in outstanding debt securities, in an operating wind project that was being foreclosed upon and expected to be sold. The foreclosure and sale was completed in 2016 and we recovered the full value of our debt investment and recognized a gain of $0.8 million.

Interest Rate Swap Agreements

The fair values of the derivative financial instruments are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. We have determined that the significant inputs, such as interest yield curves and discount rates, used to value our derivatives fall within Level 2 of the fair value hierarchy and that the credit valuation adjustments associated with our counterparties and our own credit risk utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of our or our counterparties default. As of September 30, 2016 and December 31, 2015, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of our derivatives.

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As a result, we determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. See Note 8 for the estimated fair value of our derivative financial instruments. The fair values of the derivative financial instruments are included in the accounts payable, accrued expenses and other line item in the condensed consolidated balance sheets.

Non-recurring Fair Value Measurements

Our financial statements may include non-recurring fair value measurements related to acquisitions and non-monetary transactions, if any. Assets acquired in a business combination are recorded at their fair value. We may use third party valuation firms to assist us with developing our estimates of fair value.

Concentration of Credit Risk

Financing receivables, investments and leases consist primarily of U.S. federal government-backed receivables, investment grade state and local government receivables and receivables from various sustainable infrastructure projects and do not, in our view, represent a significant concentration of credit risk. See Note 6 for an analysis by type of obligor. As described above, we do not believe we have a significant credit exposure to our interest rate swap providers. We had cash deposits that are subject to credit risk as shown below:

	September 30, 2016		December 31, 2015
	(dollars in millions)
Cash deposits	$	73	$	43
Restricted cash deposits (included in Other assets)		25		36
Total cash deposits	$	98	$	79
Amount of cash deposits in excess of amounts federally insured	$	94	$	75

4. Non-Controlling Interest

Non-Controlling Interest in Consolidated Entities

Units of limited partnership interests in the Operating Partnership (“OP units”) that are owned by limited partners other than the Company are included in non-controlling interest on our condensed consolidated balance sheets. The non-controlling interest holders are generally allocated their pro rata share of income, other comprehensive income and equity transactions. The outstanding OP units held by outside limited partners represents less than 1% of our outstanding OP units and are redeemable for cash, or at our option, for a like number of shares of our common stock. No OP units were exchanged for shares of common stock during the nine months ended September 30, 2016.

5. Securitization of Receivables

The following summarizes certain transactions with our securitization trusts:

	For the Nine Months Ended September 30,
	2016		2015
	(dollars in millions)
Gains on securitizations	$	13	$	6
Purchase of receivables securitized	$	394	$	219
Proceeds from securitizations	$	407	$	225
Residual and servicing assets included in Other Assets	$	18	$	9
Cash received from residual and servicing assets	$	2	$	1

In connection with securitization transactions, we typically retain servicing responsibilities and residual assets. In certain instances, we receive annual servicing fees of up to 0.20% of the outstanding balance. We may periodically make servicer advances, which are subject to credit risk. Included in other assets in our condensed consolidated balance sheets are our servicing assets at amortized cost, our residual assets at fair value, and our

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servicing advances at cost, if any. Our residual assets are subordinate to investors’ interests, and their values are subject to credit, prepayment and interest rate risks on the transferred financial assets. The investors and the securitization trusts have no recourse to our other assets for failure of debtors to pay when due. In computing gains and losses on securitizations, we use the same discount rates we use for the fair value calculation of residual assets, which are determined based on a review of comparable market transactions. Depending on the nature of the transaction risks, the discount rate ranged from 4% to 7%.

As of September 30, 2016 and December 31, 2015, our managed assets totaled $3.6 billion and $3.2 billion, of which $2.2 billion and $1.8 billion were securitized assets held in unconsolidated securitization trusts. There were no securitization credit losses during the three or nine months ended September 30, 2016 or 2015, and no material securitization delinquencies as of September 30, 2016 and December 31, 2015. The securitized assets consist of financing receivables from contracts for the installation of energy efficiency and other technologies in facilities owned by, or operated for or by, the federal government where the ultimate obligor is the U.S. federal government. The contracts may have guarantees of energy savings from third party service providers, the majority of which are entities rated investment grade by an independent rating agency. Based on the nature of the receivables and experience to date, we do not currently expect to incur any credit losses on the receivables sold.

6. Our Portfolio

As of September 30, 2016, our Portfolio included approximately $1.4 billion of financing receivables, investments, real estate and equity method investments on our balance sheet. The financing receivables and investments are typically collateralized by contractually committed debt obligations of government entities or private high credit quality obligors and are often supported by additional forms of credit enhancement, including security interests and supplier guaranties. The real estate is typically land and related lease intangibles for long-term leases to wind and solar projects with high credit quality obligors. The equity method investments represent our minority equity investments in renewable energy projects.

The following is an analysis of our Portfolio by type of obligor and credit quality as of September 30, 2016:

	Investment Grade
	Government(1)			Commercial Investment Grade(2)			Commercial Non- Investment Grade (3)			Subtotal, Debt and Real Estate			Equity Method Investments(4)		Total
	(dollars in millions)
Financing receivables	$	380		$	464		$	21		$	865		$	—	$	865
Financing receivables held-for-sale		7			—			—			7			—		7
Investments		33			17			—			50			—		50
Real estate(5)					166			—			166			—		166
Equity method investments		—			—			—			—			324		324
Total	$	420		$	647		$	21		$	1,088		$	324	$	1,412
% of Debt and Real Estate Portfolio		39	%		59	%		2	%		100	%		N/A		N/A
Average Remaining Balance(6)	$	10		$	10		$	11		$	10		$	19	$	11

(1) Transactions where the ultimate obligor is the U.S. federal government or state or local governments where the obligors are rated investment grade (either by an independent rating agency or based upon our internal credit analysis). This amount includes $230 million of U.S. federal government transactions and $190 million of transactions where the ultimate obligors are state or local governments. Transactions may have guaranties of energy savings from third party service providers, the majority of which are entities rated investment grade by an independent rating agency.

(2) Transactions where the projects or the ultimate obligors are commercial entities, including institutions such as hospitals or universities, that have been rated investment grade (either by an independent rating agency or based on our internal credit analysis). Of this total, $11 million of the transactions have been rated investment grade by an independent rating agency. Commercial investment grade financing receivables include $260 million of internally rated residential solar loans made on a nonrecourse basis to special purpose subsidiaries of SunPower Corporation, for which we rely on certain limited indemnities, warranties and other obligations of SunPower Corporation or its other subsidiaries.

(3) Transactions where the projects or the ultimate obligors are commercial entities, including institutions such as hospitals or universities, that have ratings below investment grade (either by an independent rating agency or using our internal credit analysis).

(4) Consists of ownership interests in operating renewable energy projects.

(5) Includes the real estate and the lease intangible assets through which we receive scheduled lease payments, typically under long-term triple net lease agreements.

(6) Excludes 88 transactions each with outstanding balances that are less than $1 million and that in the aggregate total $31 million.

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The components of financing receivables as of September 30, 2016 and December 31, 2015, were as follows:

	September 30, 2016			December 31, 2015
	(dollars in millions)
Financing receivables
Financing or minimum lease payments(1)	$	1,122		$	1,025
Unearned interest income		(255	)		(238	)
Allowance for credit losses		—			—
Unearned fee income, net of initial direct costs		(2	)		(3	)
Financing receivables(1)	$	865		$	784

(1) Excludes $7 million and $60 million in financing receivables held-for-sale as of September 30, 2016 and December 31, 2015, respectively.

In accordance with the terms of certain purchase agreements related to financing receivables or other investments, payments of the purchase price are scheduled to be made over time, generally within 12 months of entering into the transaction, and as a result, we have recorded deferred funding obligations of $64 million and $108 million as of September 30, 2016 and December 31, 2015, respectively. Approximately $41 million of those investments were pledged as collateral against these obligations.

The following table provides a summary of our anticipated maturity dates of our financing receivables and investments and the weighted average yield for each range of maturities as of September 30, 2016:

	Total			Less than 1 year			1-5 years			5-10 years			More than 10 years
	(dollars in millions)
Financing Receivables (1)
Maturities by period	$	865		$	1		$	48		$	80		$	736
Weighted average yield by period		5.4	%		4.0	%		6.4	%		5.0	%		5.3	%
Investments
Maturities by period	$	50		$	—		$	—		$	1		$	49
Weighted average yield by period		3.9	%		—	%		—	%		4.7	%		4.0	%

(1) Excludes financing receivables held-for-sale of $7 million.

Our real estate is leased to renewable energy projects, typically under long-term triple net leases with expiration dates that range between the years 2033 and 2051 under the initial terms and 2047 and 2080 if all extensions are exercised. The components of our real estate portfolio as of September 30, 2016 and December 31, 2015, were as follows:

	September 30, 2016			December 31, 2015
	(dollars in millions)
Real Estate
Land	$	135		$	129
Real estate related intangibles		33			28
Accumulated amortization of real estate intangibles		(2	)		(1	)
Real Estate	$	166		$	156

There are conservation easement agreements covering several of our properties that limit the use of the property upon expiration of the respective leases. The real estate related intangible assets are amortized on a straight-line basis over the contracted lease term.

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As of September 30, 2016, the future amortization expense of these intangible assets and the future minimum rental income payments under our land lease agreements are as follows:

Year Ending December 31,	Future Amortization Expense		Minimum Rental Income Payments
	(dollars in millions)
From October 1, 2016 to December 31, 2016	$	—	$	2
2017		1		10
2018		1		11
2019		1		11
2020		1		10
2021		1		11
Thereafter		26		292
Total	$	31	$	347

We have made minority interest investments in a number of renewable energy projects operated by renewable energy companies that we account for as equity method investments. In June 2016, we acquired interests in several limited liability companies that collectively own approximately 43 megawatts of operating distributed commercial, industrial and residential solar projects. We receive a priority distribution from these projects until negotiated financial targets are achieved at which time the partnerships will flip and the company that operates the project will receive a larger portion of the cash flows and we will have an on-going residual interest. We financed approximately $33 million of the approximately $42 million purchase price with the seller through a two-year non-interest bearing loan secured by our ownership interest in the limited liability companies. We have recorded our purchase obligation to the seller as a deferred funding obligation on our balance sheet and have reflected an imputed interest expense on the outstanding balance on the investment interest expense line of our income statement. As of September 30, 2016, we held equity method investments of approximately $324 million in these renewable energy projects.

See Note 2 for our accounting treatment of these investments and Note 13 for the aggregate financial position and results of operations of the significant holding companies.

We had no financing receivables, investments or leases that were impaired or on nonaccrual status as of September 30, 2016 or December 31, 2015. There was no provision for credit losses for the three or nine months ended September 30, 2016 or 2015. We did not have any loan modifications that qualify as trouble debt restructurings for the three or nine months ended September 30, 2016 or 2015.

7. Credit Facilities

Revolver

We have a senior secured revolving credit facility with an outstanding balance of $307 million. The facility provides for total maximum advances of $1.5 billion with the aggregate amount outstanding at any point in time of $500 million and which consists of two components, the G&I Facility and the PF Facility. The “G&I Facility” can be used to leverage certain qualifying government and institutional financings entered into by us and the “PF Facility” can be used to leverage certain qualifying project financings entered into by us.

The facility was originally entered into in 2013 and has been amended a number of times, including in January 2016. The effect of the various amendments has been to increase the size, flexibility and allocation of the facility and extend the termination date to July 19, 2019. The limit of borrowing at any point in time and the total maximum advances are summarized below:

	Limit of Borrowing at any point in time				Maximum Total Advances
As of	G&I Facility		PF Facility		G&I Facility		PF Facility
	(dollars in millions)
December 31, 2014	$	125	$	325	$	375	$	975
December 31, 2015	$	150	$	350	$	450	$	1,050
January 2016	$	250	$	250	$	600	$	900

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Loans under the G&I Facility bear interest at a rate equal to the London Interbank Offered Rate (“LIBOR”) plus 1.5% or, under certain circumstances, 1.5% plus the highest of (i) the Federal Funds Rate plus 0.5%, (ii) the rate of interest publicly announced by Bank of America from time to time as its “prime rate,” and (iii) LIBOR plus 1.0%. Loans under the PF Facility bear interest at a rate equal to LIBOR plus 2.5%, or an agreed upon margin, or, under certain circumstances, 2.5% plus the highest of (i) the Federal Funds Rate plus 0.5%, (ii) the rate of interest publicly announced by Bank of America from time to time as its “prime rate,” and (iii) LIBOR plus 1.0%. Under the PF Facility, we also have the option to borrow at a fixed rate of interest until the expiration of the credit facility in July 2019. The fixed rate is determined by agreement with the Administrative Agent and is based on the prevailing US SWAP rate of an equivalent term to the average-life of the fixed rate portion of the borrowing plus an agreed upon margin. The loans are made through wholly-owned special purpose subsidiaries (the “Borrowers”) and we have guaranteed the obligations of the Borrowers under the credit facility pursuant to (x) a Continuing Guaranty, dated July 19, 2013, and (y) a Limited Guaranty, dated July 19, 2013, both as amended and restated.

Any financing we propose to be included in the borrowing base as collateral under the facility is subject to the approval of the administrative agent in its sole discretion and the payment of a placement fee. We may, with the consent of the administrative agent, borrow against new projects before such projects become Approved Financings (as defined in the PF Facility loan agreement) but after they have been pledged as collateral. The amount eligible to be drawn under the facility for purposes of financing such investments will be based on a discount to the value of each investment or an applicable valuation percentage. Under the G&I Facility, the applicable valuation percentage for non-delinquent investments is 85% in the case of a U.S. federal government obligor, 80% in the case of an institutional obligor or a state and local obligor, and with respect to other obligors or in certain circumstances, such other percentage as the administrative agent may prescribe. Under the PF Facility, the applicable valuation percentage is 67% or such other percentage as the administrative agent may prescribe. The sum of approved financings after taking into account the valuation percentages and any changes in the valuation of the financings in accordance with the loan agreements determines the borrowing capacity, subject to the overall facility limits described above.

The following table provides additional detail on our credit facility as of September 30, 2016 and December 31, 2015:

	September 30, 2016			December 31, 2015
	(dollars in millions)
Outstanding balance	$	307		$	247
Value of collateral pledged to credit facility	$	423		$	356
Weighted average short-term borrowing rate		2.4	%		2.3	%

We incurred approximately $13 million of costs associated with the credit facility that have been capitalized (included in other assets on the condensed consolidated balance sheets) and are being amortized on a straight-line basis over the term of the Loan Agreements. On each monthly payment date, the Borrowers shall also pay to the administrative agent, for the benefit of the lenders, certain availability fees for each Loan Agreement equal to 0.50%, divided by 360, multiplied by the excess of the available borrowing capacity under each component of the credit facility over the actual amount borrowed under such component.

The credit facility contains terms, conditions, covenants, and representations and warranties that are customary and typical for a transaction of this nature, including various affirmative and negative covenants, and limitations on the incurrence of liens and indebtedness, investments, fundamental organizational changes, dispositions, changes in the nature of business, transactions with affiliates, use of proceeds and stock repurchases.

The credit facility also includes customary events of default, including the existence of a default in more than 50% of underlying financings. The occurrence of an event of default may result in termination of the credit facility, acceleration of amounts due under the credit facility, and accrual of default interest at a rate of LIBOR plus 2.50% in the case of the G&I Facility and at a rate of LIBOR plus 5.00% in the case of the PF Facility.

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We were in compliance with the required financial covenants described below at each quarterly reporting date that such covenants were applicable:

Covenant	Covenant Threshold
Minimum Liquidity (defined as available borrowings under the Loan Agreements plus unrestricted cash divided by actual borrowings) of greater than:		5%
12 month rolling Net Interest Margin of greater than:		zero
Maximum Debt to Equity Ratio of less than: (1)		4 to 1

⁽¹⁾ Debt is defined as Total Indebtedness excluding accounts payable and accrued expenses and nonrecourse debt.

Term Loan

In September 2016, we borrowed $50 million from a financial institution on a short-term basis. This recourse credit facility matures on December 30, 2016 and can be repaid at anytime. It bears interest at a fixed rate of 4.8% which increases to 6.8% on November 14, 2016 and is also secured by the equity of our special purpose subsidiary that holds $84 million of residential solar financing receivables. The credit facility contains terms, conditions, covenants, and representations and warranties that are customary and typical for a transaction of this nature, including various affirmative and negative covenants, and limitations on the incurrence of liens and indebtedness, investments, fundamental organizational changes, dispositions, changes in the nature of business, transactions with affiliates, use of proceeds and stock repurchases.

This credit facility also includes customary events of default. The occurrence of an event of default may result in termination of the credit facility, acceleration of amounts due under the credit facility, and accrual of default interest at the fixed rate plus 2.0%. We recorded $0.5 million of debt issuance costs which are netted against the outstanding balance.

8. Nonrecourse Debt

We have outstanding the following asset-backed nonrecourse debt and bank loans (dollars in millions):

	Outstanding Balance as of													Value of Assets Pledged as of
	September 30, 2016			December 31, 2015			Interest Rate			Maturity Date		Anticipated Balance at Maturity		September 30, 2016		December 31, 2015		Description of Assets Pledged
HASI Sustainable Yield Bond 2013-1	$	77		$	83			2.79	%		December 2019	$	57	$	93	$	99	Financing receivables
ABS Loan Agreement	$	92		$	102			5.74	%		September 2021	$	17	$	100	$	117	Equity interest in Strong Upwind Holdings I, LLC
HASI Sustainable Yield Bond 2015-1	$	98		$	100			4.28	%		October 2034	$	—	$	138	$	139	Financing receivables, real estate and real estate intangibles
HASI SYB Loan Agreement 2015-1	$	76		$	90			4.34	% (1)		December 2021	$	—	$	100	$	117	Equity interest in Strong Upwind Holdings II and III, LLC, related interest rate swap
HASI SYB Loan Agreement 2015-2	$	41		$	42			4.92	% (1)		December 2023	$	—	$	70	$	71	Equity interest in Buckeye Wind Energy Class B Holdings LLC, related interest rate swap
HASI SYB Loan Agreement 2015-3	$	152		$	162			4.92	%		December 2020	$	132	$	176	$	175	Residential Solar Financing receivables
Other nonrecourse debt (2)	$	88		$	101			2.26	% - 7.45%		2017 to 2032	$	—	$	86	$	97	Financing receivables
Debt issuance costs	$	(14	)	$	(16	)
Nonrecourse debt	$	610		$	664

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(1) Interest rate represents the current period’s LIBOR based rate plus the spread. Also see the interest rate swap contracts shown in the table below.

(2) Other nonrecourse debt consists of various debt agreements used to finance certain of our financing receivables for the term of the financing receivables. Debt service payment requirements, in a majority of cases, are equal to or less than the cash flows received from the underlying financing receivables.

We have pledged the ownership interest in the relevant assets or the relevant assets themselves to bankruptcy remote entities as security for the nonrecourse debt. The assets and credit of these entities are not available to satisfy any of our other debts and obligations, except as set forth in the debt agreements. The debtors can only look to the cash flows of the pledged assets to satisfy the debt and we are not liable for nonpayment of such cash flows. The debt agreements contain terms, conditions, covenants, and representations and warranties that are customary and typical for a transaction of this nature, including limitations on the incurrence of liens and indebtedness, investments, fundamental organizational changes, dispositions, changes in the nature of business, transactions with affiliates, use of proceeds and stock repurchases. The agreements also include customary events of default, the occurrence of which may result in termination of the agreements, acceleration of amounts due, and accrual of default interest. We typically act as servicer for the debt transactions.

We have guaranteed the performance of the representations and warranties and other obligations of certain of our subsidiaries under certain of the debt agreements and provided an indemnity against certain losses from “bad acts” of such subsidiaries including fraud, failure to disclose a material fact, theft, misappropriation, voluntary bankruptcy or unauthorized transfers. In the case of the debt secured by our renewable energy equity interests, we have also guaranteed the compliance of our subsidiaries with certain tax matters and certain obligations if certain of our joint venture partners exercise their right to withdraw from our partnerships.

The HASI Sustainable Yield Bond (“HASI SYB”) 2015-1 consists of two notes, (i) $101 million in aggregate principal amount of 4.28% HASI SYB 2015-1A, Class A Bonds (the “Class A Bonds”) and (ii) $18 million in aggregate principal amount of 5.0% HASI SYB 2015-1B, Class B Bonds (the “Class B Bonds”), both with an anticipated repayment date in October 2034. The Class A Bonds rank senior to the Class B Bonds in priority of payment. We retained the Class B Bonds. The other loan and debt transactions were negotiated with, and held by, commercial banks, including one loan agreement that has a corporate financial subsidiary as a co-lender.

In connection with several of our nonrecourse debt borrowings, we have entered into the following interest rate swaps that are designated as cash flow hedges (dollars in millions):

						Notional Value as of				Fair Value as of
	Base Rate		Hedged Rate			September 30, 2016		December 31, 2015		September 30, 2016			December 31, 2015			Term
HASI SYB Loan Agreement 2015-1		3 month Libor		1.55	%	$	70	$	81	$	(0.8	)	$	(0.3	)	December 2015 to September 2021
HASI SYB Loan Agreement 2015-2		3 month Libor		1.52	%	$	37	$	38	$	(0.4	)	$	(0.1	)	December 2015 to December 2018
HASI SYB Loan Agreement 2015-2		3 month Libor		2.55	%	$	29	$	29	$	(1.1	)	$	(0.2	)	December 2018 to December 2024
HASI SYB Loan Agreement 2015-3		1 month Libor		2.34	%	$	119	$	—	$	(3.9	)	$	—		November 2020 to August 2028
Total						$	255	$	148	$	(6.2	)	$	(0.6	)

The total fair value of our hedges relating to interest rate hedges that are effective in offsetting variable cash flows is reflected as unrealized losses in accumulated other comprehensive income and in Accounts payable, accrued expenses and other in the accompanying condensed consolidated balance sheets. As of September 30, 2016 and December 31, 2015, all of our derivatives were designated as hedging instruments and there was no ineffectiveness recorded on our designated hedges and no portion of the Accumulated other comprehensive income, net of associated deferred income tax effects, related to our interest rate hedges was reclassified into interest expense.

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The next 12-months of stated minimum maturities of nonrecourse debt are as follows:

As of September 30,	(dollars in millions)
2016	$	49
2017		40
2018		38
2019		95
2020		164
Thereafter		238
	$	624
Deferred financing costs, net		(14	)
Total nonrecourse debt	$	610

The stated minimum maturities of nonrecourse debt above include only the mandatory minimum principal payments. To the extent there are additional cash flows received from Strong Upwind Holdings II, LLC, Strong Upwind Holdings III, LLC or Buckeye Wind Energy Class B Holdings LLC, these additional cash flows are required to be used to make additional principal payments against the respective HASI SYB Loan Agreement 2015-1 and HASI SYB Loan Agreement 2015-2 notes.

9. Commitments and Contingencies

Litigation

The nature of our operations exposes us to the risk of claims and litigation in the normal course of our business. Other than non-material litigation arising out of the ordinary course of business, we are not currently subject to any legal proceedings that are probable of having a material adverse effect on our financial position, results of operations or cash flows.

10. Income Tax

We recorded a tax expense of less than $0.1 million for the three and nine months ended September 30, 2016 and 2015. Our income tax expense was determined using a federal rate of 35% and a combined state rate, net of federal benefit, of 5%.

11. Equity

Dividends and Distributions

Our board of directors declared the following dividends in 2015 and 2016:

Announced Date	Record Date	Pay Date	Amount per share
3/17/15	3/30/15	4/9/15	$	0.26
6/16/15	6/30/15	7/9/15	$	0.26
9/16/15	9/30/15	10/8/15	$	0.26
12/15/15	12/30/15	1/7/16	$	0.30
3/15/16	3/30/16	4/7/16	$	0.30
6/07/16	7/06/16	7/14/16	$	0.30
9/15/16	10/05/16	10/13/16	$	0.30

We have an effective shelf registration statement registering the potential offer and sale of up to $500 million of any combination of our common stock, preferred stock, depositary shares and warrants and rights (collectively referred to as the “securities”). We may offer the securities directly, through agents, or to or through underwriters by means of ordinary brokers’ transactions on the NYSE or otherwise at market prices prevailing at the time of sale or at negotiated prices and may include “at the market” (“ATM”) offerings or sales “at the market,” to or through a market maker or into an existing trading market on an exchange or otherwise. We completed the following public offerings and ATM offerings of our common stock in 2015 and 2016:

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Closing Date	Common Stock Offerings	Shares Issued1		Price Per Share			Net Proceeds 2
		(amounts in millions, except per share amounts)
5/4/15	Public Offering		4.60	$	18.50	3	$	82
10/19/15	Public Offering		5.75	$	18.00	3	$	99
6/21/16	Public Offering		4.60	$	19.78	4	$	91
5/9/16 to 6/30/16	ATM		0.065	$	20.31	5	$	1

¹ Includes shares issued in connection with the exercise of the underwriters’ option to purchase additional shares.

² Net proceeds from the offerings is shown after deducting underwriting discounts, commissions and other offering costs.

³  Represents the public offering price per share.

⁴  Represents the price per share at which the underwriters in our public offerings purchased shares from our company.

⁵  Represents the average price per share at which investors in our ATM offerings purchased shares from our company.

Awards of Shares of Restricted Common Stock under our 2013 Plan

We recognize equity-based compensation expense as described in Note 2 and have issued both awards with service conditions and awards with both service and performance conditions. During the nine months ended September 30, 2016, our board of directors awarded employees and directors 367,753 shares of restricted common stock that vest in 2016 to 2019 and 291,000 shares of restricted common stock to certain employees that vest upon the achievement of certain performance targets. As of September 30, 2016, we have concluded that it is probable that the performance conditions will be met.

For the three and nine months ended September 30, 2016, we recorded $3 million and $7 million, respectively, of equity-based compensation expense as compared to $3 million and $8 million, respectively, for the three and nine months ended September 30, 2015. The total unrecognized compensation expense related to awards of shares of restricted common stock was approximately $12 million as of September 30, 2016, that is expected to be recognized over a weighted-average term of approximately two years. As part of the implementation of ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting,” we will recognize forfeitures when they occur as opposed to the previous requirement under which we reduced equity-based compensation expense for an estimated forfeiture rate of up to 5%. Expenses recognized year to date, and the adjustment to retained earnings for the equity-based compensation expense previously recognized, from the adoption of this change was approximately $1 million.

A summary of the unvested shares of restricted common stock that have been issued is as follows:

	Restricted Shares of Common Stock			Weighted Average Share Price		Value (in millions)
Balance — December 31, 2014		964,820		$	13.41	$	12.9
Granted		586,648			17.29		10.2
Vested		(285,289	)		13.61		(3.9	)
Forfeited		(18,110	)		15.54		(0.3	)
Balance — December 31, 2015		1,248,069		$	15.16	$	18.9
Granted		658,753			18.62		12.3
Vested		(572,174	)		13.79		(7.9	)
Forfeited		(11,188	)		17.25		(0.2	)
Ending Balance — September 30, 2016		1,323,460		$	17.46	$	23.1

12. Earnings per Share of Common Stock

Both the net income or loss attributable to the non-controlling OP units and the non-controlling limited partners’ outstanding OP units have been excluded from net income or loss and the diluted earnings per share calculation attributable to common stockholders.

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Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method. Any shares of common stock which, if included in the diluted earnings per share calculation, would have an anti-dilutive effect have been excluded from the diluted earnings per share calculation.

The computation of basic and diluted earnings per common share is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
Numerator:	2016			2015			2016			2015
	(in millions, except share and per share data)
Net income attributable to controlling shareholders and participating securities	$	3.3		$	2.1		$	10.2		$	5.7
Less: Dividends paid on participating securities		(0.4	)		(0.3	)		(1.3	)		(1.0	)
Undistributed earnings attributable to participating securities		—			—			—			—
Net income attributable to controlling shareholders	$	2.9		$	1.8		$	8.9		$	4.7
Denominator:
Weighted-average number of common shares — basic		41,988,036			31,221,982			38,924,977			29,046,742
Weighted-average number of common shares — diluted		41,988,036			31,221,982			38,924,977			29,046,742
Basic earnings per common share	$	0.07		$	0.06		$	0.23		$	0.16
Diluted earnings per common share	$	0.07		$	0.06		$	0.23		$	0.16
Other Information:
Weighted-average number of OP units		284,992			284,992			284,992			298,218
Unvested restricted common stock outstanding								1,323,460			1,297,584

13. Equity Method Investments in Affiliate

As described in Notes 1 and 2, we have noncontrolling equity investments in entities that own minority interests in renewable energy projects. We recognized income of $1.3 million and $2.7 million during the three and nine months ended September 30, 2016, respectively, from our equity method investments, as compared to a income of $0.2 million and a loss of $0.2 million during the three and nine months ended September 30, 2015, respectively.

The following is a summary of the consolidated financial position and results of operations of the significant holding companies, accounted for using the equity method:

	As of June 30, 2016			As of December 31, 2015
	(dollars in millions, unaudited)
Current Assets	$	57		$	72
Total Assets	$	1,651		$	1,724
Current Liabilities	$	18		$	18
Total Liabilities	$	68		$	68
Members’ Equity	$	1,583		$	1,656
	For the six months ended June 30,
	2016			2015
	(dollars in millions, unaudited)
Revenue	$	66		$	77
Income from Continuing Operations	$	(5	)	$	21
Net Income	$	(5	)	$	21

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

In this Form 10-Q, unless specifically stated otherwise or the context otherwise indicates, references to “we,” “our,” “us,” and “HASI” refer to Hannon Armstrong Sustainable Infrastructure Capital, Inc., a Maryland corporation, Hannon Armstrong Sustainable Infrastructure, L.P., and any of our other subsidiaries. Hannon Armstrong Sustainable Infrastructure, L.P. is a Delaware limited partnership of which we are the sole general partner and to which we refer in this Form 10-Q as our “Operating Partnership.”

The following discussion is a supplement to and should be read in conjunction with the accompanying condensed consolidated financial statements and related notes and with our 2015 Form 10-K, that was filed with the SEC.

Our Business

We provide debt and equity financing to the energy efficiency and renewable energy markets. We focus on providing preferred or senior level capital to established sponsors and high credit quality obligors for assets that generate long-term, recurring and predictable cash flows.

We are internally managed and our management team has extensive industry knowledge and experience having completed its first renewable energy financing over 25 years ago and its first energy efficiency financing over 15 years ago. We have deep and long-standing relationships in the markets we target with leading energy service providers, manufacturers, project developers and owners. We originate many of our transactions through programmatic finance relationships with global energy service companies (“ESCOs”), such as Honeywell International, Ingersoll Rand, Johnson Controls, Schneider Electric, Siemens and United Technologies. We also originate transactions with renewable energy manufacturers, developers and operators such as EDF Renewable Energy, EDP Renewables, E.ON, First Solar, Invenergy, SunPower and other companies who own and operate renewable energy projects, including a number of U.S. utility companies. Additionally, we rely on relationships with a variety of key financial participants, including institutional investors, private equity funds, senior lenders, and investment and commercial banks, as well as leading intermediaries, to complement our origination and financing activities. We believe we are the leading provider of financing for energy efficiency projects for the U.S. federal government, the largest property owner and energy user in the United States.

We focus our investment activities primarily on:

• Energy Efficiency Projects: projects, typically undertaken by ESCOs or other similar service providers, which reduce a building’s or facility’s energy usage or cost by improving or installing various building components, including heating, ventilation and air conditioning systems (“HVAC systems”), lighting, energy controls, roofs, windows, building shells, and/or combined heat and power systems; and

• Renewable Energy Projects: projects that deploy cleaner energy sources, such as solar and wind to generate power production.

We may also provide financing solutions for other projects, such as water or communications infrastructure, that improve water or energy efficiency, increase energy system resiliency, positively impact the environment or more efficiently use natural resources.

Our goal is to deliver attractive risk-adjusted returns to our stockholders by investing in projects that generate long-term, recurring and predictable cash flows or cost savings. The cash flows or cost savings are generally generated from proven technologies that minimize performance uncertainty, enabling us to more accurately predict project cash flow over the term of the financing or investment. We provide capital through debt financings and a variety of preferred and common equity structures with a preference for structures in which we hold a senior or preferred position in the capital structure.

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Our financings typically benefit from contractually committed obligations of government entities or private, high credit quality obligors. When we provide financing for energy efficiency projects, we are usually assigned the payment stream and other contractual rights, often using our pre-existing master purchase agreements with the ESCOs. Our financings are generally also secured by the installed improvements. For renewable energy projects, we focus on those that use proven technology and that often have contractually committed agreements, such as power purchase agreements (“PPAs”), with high credit quality utilities or large electricity users under which the utility or user purchases the power produced by the project at a minimum price with potential price escalators for a portion of the project’s estimated life. These projects may be distributed (building or facility specific and may be combined with other energy efficiency projects) or utility-scale (standalone projects designed to sell power to electric utilities or large users).

We completed approximately $242 million and $712 million of transactions during the three and nine months ended September 30, 2016, respectively, compared to approximately $140 and $595 million in the same periods in 2015. Our strategy includes holding a large portion of these transactions on our balance sheet. For those transactions that we choose not to hold on our balance sheet, we transfer all or a portion of the economics of the transaction, typically using securitization trusts, to institutional investors in exchange for upfront revenues and in some cases, ongoing fees for managing the assets. We securitized or sold approximately 46% of our 2016 transactions.

As of September 30, 2016 we held approximately $1.4 billion of transactions on our balance sheet, which we refer to as our “Portfolio.” Our Portfolio included the following as of September 30, 2016:

• Financing receivables, such as project loans, receivables and direct financing leases,

• Debt securities,

• Real estate, such as land or other physical assets and related intangible assets used in sustainable infrastructure projects, and

• Equity investments in unconsolidated affiliates, such as projects where we hold a non-controlling equity interest in a project.

For more information on the assets included in our Portfolio, see the “Our Portfolio” section of Financial Condition and Results of Operation discussed below.

As of September 30, 2016, we managed approximately $2.2 billion in trusts or vehicles that are not consolidated on our balance sheet. When combined with our Portfolio, as of September 30, 2016, we managed approximately $3.6 billion of assets which we refer to as our managed assets.

Since April 2013, we have raised net proceeds of approximately $560 million in public offerings of our common stock and completed approximately $610 million of nonrecourse borrowings and secured credit facilities with maximum capacity of $550 million.

We have a large and active pipeline of potential new opportunities that are in various stages of our underwriting process. We refer to potential opportunities as being part of our pipeline if we have determined that the project fits within our investment strategy and exhibits the appropriate risk/reward characteristics through an initial credit analysis, including a quantitative and qualitative assessment of the opportunity, as well as research on the market and sponsor. Our pipeline of transactions that could potentially close in the next 12 months consists of opportunities in which we will be the lead originator, as well as projects in which we may participate with other institutional investors. As of September 30, 2016, our pipeline consisted of more than $2.5 billion in new debt and equity opportunities. There can, however, be no assurance if, or when, any or all of the transactions in our pipeline will be completed.

We elected to be, and intend to continue to operate our business so as to qualify to be taxed as a REIT for U.S. federal income tax purposes, commencing with our taxable year ended December 31, 2013. We also intend to continue to operate our business in a manner that will permit us to maintain our exception from registration as an investment company under the 1940 Act.

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Factors Impacting our Operating Results

We expect that our results of operations will be affected by a number of factors and will primarily depend on the size of our Portfolio, including the mix of transactions which we hold in our Portfolio, the income we receive from securitizations, syndications and other services, our Portfolio’s credit risk profile, changes in market interest rates and liquidity, commodity prices, U.S. federal, state and/or municipal governmental policies, general market conditions in local, regional and national economies and our ability to qualify as a REIT and maintain our exception from registration as an investment company under the 1940 Act. We provide a summary of the factors impacting our operating results in our 2015 Form 10-K under “MD&A – Factors Impacting our Operating Results.”

Critical Accounting Policies and Use of Estimates

Our financial statements are prepared in accordance with U.S. GAAP, which requires the use of estimates and assumptions that involve the exercise of judgment and use of assumptions as to future uncertainties. Understanding our accounting policies and the extent to which we use management judgment and estimates in applying these policies is integral to understanding our financial statements. We provide a summary of our significant accounting policies under Note 2 in our 2015 Form 10-K and under Note 2 of this Form 10-Q.

We have identified the following accounting policies as critical because they require significant judgments and assumptions about highly complex and inherently uncertain matters and the use of reasonably different estimates and assumptions could have a material impact on our reported results of operations or financial condition. These critical accounting policies govern:

• Financing receivables and the related accounting for allowance for credit losses and impairments

• Investments and the related accounting for impairments

• Real estate

• Securitization of receivables and other fee income

• Valuation of financial instruments

• Variable interest entities and equity method investments in affiliates

• Derivative financial instruments

• Income taxes

• Equity-based compensation

We evaluate our critical accounting estimates and judgments on an ongoing basis and update them, as necessary, based on changing conditions.

We provide additional information on our critical accounting policies and use of estimates under “MD&A—Critical Accounting Policies and Use of Estimates” in our 2015 Form 10-K.

Financial Condition and Results of Operation

Our Portfolio

As of September 30, 2016, our Portfolio was approximately $1.4 billion and included $0.4 billion of energy efficiency investments and approximately $1.0 billion of renewable energy (wind and solar) transactions. Approximately 65% of our Portfolio consisted of fixed rate loans, financing receivables, direct financing leases or debt securities, approximately 12% was real estate investments with long-term leases and approximately 23% represented minority ownership of renewable energy projects. Our real estate investments consist of over 15,000 acres of land leased under long-term lease agreements with over 35 renewable energy projects.

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Excluding our equity investments, approximately 38% of our Portfolio consisted of U.S. federal government or state or local government obligors, approximately 60% consisted of investment grade commercial obligations and 2% consisted of non-investment grade rated commercial obligations, in all cases rated either by an independent third party rating service or our internal credit rating system. Our Portfolio, as of September 30, 2016, included approximately 122 transactions of greater than $1 million and had a weighted average remaining life (excluding match-funded transactions) of approximately 11 years. For further information on our Portfolio, see Notes 1 and 6 to our financial statements of this Form 10-Q.

The table below provides details on the interest rate and maturity of our financing receivables and investments as of September 30, 2016:

	Balance in Millions		Maturity
Fixed-rate financing receivables, interest rates less than 5.00% per annum		346		2017 to 2040
Fixed-rate financing receivables, interest rates from 5.01% to 6.50% per annum		311		2017 to 2046
Fixed-rate financing receivables, interest rates greater than 6.50% per annum		208		2018 to 2069
Financing receivables		865
Allowance for credit losses		—
Financing receivables, net of allowance		865
Financing receivables held-for-sale, interest rates of less than 5.00% per annum		7		2032
Fixed-rate investment in debt securities, interest rates of less than 5.50% per annum		50		2025 to 2038
Total Financing Receivables and Investments	$	922

The table below presents, for each major category of our Portfolio and the related interest-bearing liabilities, the average outstanding balances, investment income earned, the interest expense incurred, and average yield or cost. Our earnings from our equity method investments are not included in Total Revenue and thus we have excluded our equity method investments and the related earnings and interest expenses from these calculations. Our net investment margin represents the difference between the interest, investment and rental income generated by our Portfolio and the interest expense, divided by our Portfolio balance.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
	(dollars in millions)
Interest Income, Financing receivables	$	12		$	10		$	36		$	27
Average monthly balance of financing receivables	$	805		$	746		$	843		$	666
Average interest rate from financing receivables		6.0	%		5.4	%		5.7	%		5.3	%
Interest Income, Investments	$	0.5		$	0.4		$	1.3		$	1.1
Average monthly balance of investments	$	50		$	29		$	41		$	27
Average interest rate of investments		4.0	%		5.0	%		4.2	%		5.4	%
Rental Income	$	3		$	2		$	9		$	6
Average monthly balance of real estate	$	162		$	153		$	162		$	135
Average yield on real estate		7.3	%		5.2	%		7.2	%		6.5	%
Average monthly balance of Portfolio	$	1,017		$	928		$	1,045		$	829
Average yield from Portfolio		6.1	%		5.4	%		5.9	%		5.5	%
Investment interest expense (1)	$	7		$	5		$	22		$	14
Average monthly balance of debt (1)	$	650		$	625		$	705		$	556
Average interest rate from debt(1)		4.3	%		3.3	%		4.2	%		3.3	%
Average interest spread(1)		1.8	%		2.1	%		1.7	%		2.2	%
Net investment margin(1)		3.3	%		3.2	%		3.1	%		3.3	%

(1) Excludes the nonrecourse debt used to finance the equity investments in the renewable energy projects because our earnings from the equity investments in the renewable energy projects are not included in total revenue.

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The following table provides a summary of our anticipated principal repayments for our financing receivables and investments as of September 30, 2016:

	Payment due by Period
	Total		Less than 1 year		1-5 years		5-10 years		More than 10 years
	(dollars in millions)
Financing Receivables(1)	$	865	$	59	$	157	$	239	$	410
Investments	$	50	$	1	$	6	$	5	$	38

(1) Financing receivables does not include financing receivables held-for-sale of $7 million.

See Note 6 to our financial statements in this Form 10-Q:

• For the anticipated maturity dates of our financing receivables and investments and the weighted average yield for each range of maturities as of September 30, 2016, and

• For information on the term of our leases and a schedule of our future minimum rental income under our land lease agreements as of September 30, 2016.

For information on our residual assets relating to our securitization trusts, see Note 5 to our financial statements in this Form 10-Q. The residual assets do not have a contractual maturity date and the underlying securitized assets have contractual maturity dates until 2040.

As previously discussed in our 2015 Form 10-K, along with other regulatory filings, we held a $13 million senior secured debt investment, along with a large financial institution who held the remaining approximately $45 million in outstanding debt securities, in an operating wind project that was being foreclosed upon and expected to be sold. The foreclosure and sale was completed in 2016 and we recovered the full value of our debt investment and recognized a gain of $0.8 million.

We had no financing receivables, investments or leases on nonaccrual status as of September 30, 2016 or December 31, 2015. We did not have any loan modifications that qualify as troubled debt restructurings for the three or nine months ended September 30, 2016 or 2015.

Results of Operations

Comparison of the Three Months Ended September 30, 2016 vs. Three Months Ended September 30, 2015

	Three Months Ended September 30,
	2016			2015			$ Change			% Change
	(dollars in millions)
Revenue:
Interest Income, Financing receivables	$	12		$	10		$	2			20	%
Interest Income, Investments		0			0			0			NM
Rental Income		3			2			1			50	%
Gain on sale of receivables and investments		3			3			—			NM
Fee income		1			0			1			100	%
Total Revenue		19			15			4			27	%
Expenses:
Investment interest expense		(11	)		(7	)		(4	)		(57	)%
Compensation and benefits		(4	)		(4	)		—			NM
General and administrative		(2	)		(2	)		—			NM
Total Expenses		(17	)		(13	)		(4	)		(31	)%
Income before equity method investments in affiliates		2			2			—			NM
Income from equity method investments		1			—			1			100	%
Net income before income tax		3			2			1			50	%
Income tax expense		—			—			—			NM
Net Income	$	3		$	2		$	1			50	%

* NM – Percentage change is not meaningful.

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• Net Income increased by approximately $1 million as a result of a $4 million increase in total revenue and $1 million increase in income from equity method investments, partially offset by a $4 million increase in total expenses attributable primarily to an increase in interest expense. These results do not include the Non-GAAP Core Earnings adjustment related to recognizing income based on a constant yield methodology in order to treat our renewable energy equity investments in a manner similar to our other investments, which is discussed in the Non-GAAP Financial Measures section below.

• Total Revenue grew by approximately $4 million as Interest Income, Financing Receivables increased by $2 million due primarily to an increase in average size of the financing receivables and income of approximately $1 million from the prepayment of a project finance loan. Rental Income and Fee income also grew by approximately $1 million each.

• The increase in revenue was offset by $4 million of higher interest expense due primarily to an increase in fixed rate debt outstanding during the three months ended September 30, 2016, when compared to the same period in 2015. Interest expense in the three months ended September 30, 2016, includes approximately $4 million of interest expense related to approximately $244 million of loans outstanding as of September 30, 2016, secured by our renewable energy equity investments as compared to interest expense of approximately $2 million in the same period of 2015 on borrowings of approximately $102 million as of September 30, 2015. We recorded equity method income related to those investments of approximately $1 million in the three months ended September 2016 as compared to $0.2 million for the same period in 2015. See the Non-GAAP Financial Measures section below for more information.

Comparison of the Nine Months Ended September 30, 2016 vs. Nine Months Ended September 30, 2015

	Nine Months Ended September 30,
	2016			2015			$ Change			% Change
	(dollars in millions)
Revenue:
Interest Income, Financing receivables	$	36		$	27		$	9			33	%
Interest Income, Investments		1			1			—			NM
Rental Income		9			6			3			50	%
Gain on sale of receivables and investments		14			7			7			100	%
Fee income		1			1			—			NM
Total Revenue		61			42			19			45	%
Expenses:
Investment interest expense		(33	)		(19	)		(14	)		(74	)%
Compensation and benefits		(14	)		(12	)		(2	)		(17	)%
General and administrative		(6	)		(5	)		(1	)		(20	)%
Total Expenses		(53	)		(36	)		(17	)		(47	)%
Income before equity method investments in affiliates		8			6			2			33	%
Income (loss) in equity method investments		2			—			2			100	%
Net income before income tax		10			6			4			67	%
Income tax (expense) benefit		—			—			—			NM
Net Income	$	10		$	6		$	4			67	%

* NM – Percentage change is not meaningful.

• Net Income increased by approximately $4 million as a result of a $19 million increase in Total Revenue and $2 million increase in income from equity method investments, partially offset by a $17 million increase in total expenses, including a $14 million increase in interest expense. These results do not include the Non-GAAP Core Earnings adjustment related to recognizing income based on the a constant yield methodology in order to treat our renewable energy equity investments in a manner similar to our other investments, which is discussed in the Non-GAAP Financial Measures section below.

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• Interest Income, Financing Receivables increased by $9 million due to an approximately $180 million increase in the average financing receivables balance in our Portfolio as compared to 2015. Rental Income grew by $3 million due to an approximately $25 million increase in the average real estate balance in our Portfolio as compared to 2015. Gain on sale of receivables and investments grew by $7 million due primarily to an increase in securitization activity and a gain on the sale of a debt security in the first half of 2016.

• The increase in revenue was offset by $14 million of higher interest expense due to an increase in the average outstanding balance of our debt and higher fixed rate debt amounts outstanding during the nine months ended September 30, 2016, when compared to the same period in 2015. Interest expense for the nine months ended 2016 includes approximately $11 million of interest expense related to approximately $244 million of loans outstanding as of September 30, 2016, secured by our renewable energy equity investments as compared to interest expense of approximately $5 million in the same period in 2015 on borrowings of approximately $102 million as of September 30, 2015. We recorded equity method income related to those investments of approximately $2 million in 2016 and losses of less than $1 million in 2015, respectively. See the Non-GAAP Financial Measures section below for more information.

• Compensation and benefits increased by $2 million due to higher staffing costs and general and administrative costs increased by approximately $1 million due primarily to higher costs associated with our compliance efforts related to the Sarbanes-Oxley Act.

Non-GAAP Financial Measures

We consider the following non-GAAP financial measures useful to investors as key supplemental measures of our performance: (1) core earnings and (2) managed assets. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss as measures of our operating performance. These non-GAAP financial measures, as calculated by us, may not be comparable to similarly named financial measures as reported by other companies that do not define such terms exactly as we define such terms.

Core Earnings

We calculate Core Earnings as U.S. GAAP net income excluding non-cash equity compensation expense, non-cash provision for credit losses, amortization of intangibles, one-time acquisition related costs, if any and any non-cash tax charges. We also make an adjustment to account for our equity method investments in the renewable energy projects as described below. In the future, Core Earnings may also exclude one-time events pursuant to changes in U.S. GAAP and certain other non-cash charges as approved by a majority of our independent directors.

Our equity method investments in the renewable energy projects are structured using typical partnership “flip” structures where we, along with other institutional investors, if any, receive a pre-negotiated preferred return consisting of priority distributions from the project cash flows, in many cases, along with tax attributes. Once this preferred return is achieved, the partnership flips and the renewable energy company, which operates the project, receives more of the cash flows through its equity interests with the institutional investors retaining an ongoing residual interest. The cash flows in renewable energy projects are often significantly different from the net income due to high levels of depreciation and other non-cash expense and the agreed upon allocation of cash flow in a project with these preferred returns may be different than the profit and loss allocation.

Under U.S. GAAP, we account for these investments utilizing the hypothetical liquidation at book value method (“HLBV”), in this case, at the end of the immediately preceding quarter. Under this method, we recognize income or loss based on the change in the amount each partner would receive, typically based on the profit and loss allocation, if the assets were liquidated at book value, after adjusting for any distributions or contributions made during such quarter. Given the structure of the investments, we negotiated the purchase prices of our renewable energy investments based on our assessment of the expected cash flows we will receive from each investment discounted back to net present value based on a discount rate that represented an expected yield on the investment. This is similar to how we value the expected cash flows in financing receivables. In an attempt to treat these investments in a manner similar to our other investments and our initial valuation and because we are entitled to receive a preferred return of cash flows on our investments independent of how profits and losses are allocated, in

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calculating Core Earnings for the below periods, we include as Core Earnings the distributions received from these investments less an estimated return of capital. Generally, under this methodology, we reflect our initial capital investment as being amortized over the life of the project using a constant yield. The initial constant yield we selected is equal to the discount rates we determined when making our investment decisions. On at least a quarterly basis, we will review and, if appropriate, adjust the discount rates and the expected amortization for purposes of calculating Core Earnings in future periods, as necessary, to reflect changes in both actual cash flows received and our estimates of the future cash flows from the projects. Our allocation of profits and losses in certain of our equity investment transactions is projected to change in 2019, which is expected to result in an increase of the amount of HLBV profits or losses allocated to us.

As of September 30, 2016, we have outstanding borrowings of approximately $244 million, most of which is on a nonrecourse basis, using our equity method investments as collateral. Included in our U.S. GAAP investment interest expense for the nine months ended September 30, 2016, was approximately $11 million of interest expense related to loans secured by our equity investments. For the nine months ended September 30, 2016, we collected cash distributions from our renewable energy equity investments of approximately $45 million, of which $19 million represents our Core Earnings adjustment for these investments based upon the constant yield methodology discussed above.

We believe that Core Earnings provides an additional measure of our core operating performance by eliminating the impact of certain non-cash expenses and facilitating a comparison of our financial results to those of other comparable REITs with fewer or no non-cash charges and comparison of our own operating results from period to period. Our management uses Core Earnings in this way. We believe that our investors also use Core Earnings, or a comparable supplemental performance measure, to evaluate and compare our performance to that of our peers, and as such, we believe that the disclosure of Core Earnings is useful to (and expected by) our investors.

However, Core Earnings does not represent cash generated from operating activities in accordance with U.S. GAAP and should not be considered as an alternative to net income (determined in accordance with U.S. GAAP), or an indication of our cash flow from operating activities (determined in accordance with U.S. GAAP), a measure of our liquidity, or an indication of funds available to fund our cash needs, including our ability to make cash distributions. In addition, our methodology for calculating Core Earnings may differ from the methodologies employed by other REITs to calculate the same or similar supplemental performance measures, and accordingly, our reported Core Earnings may not be comparable to the core earnings reported by other REITs.

We have calculated our Core Earnings for the three and nine months ended September 30, 2016 and September 30, 2015. The table below provides a reconciliation of our U.S. GAAP net income to Core Earnings:

	Three Months Ended September 30,								Nine Months Ended September 30,
	2016				2015				2016				2015
	$		Per Share		$		Per Share		$		Per Share		$		Per Share
	(dollars in thousands, except per share amounts)
Net income attributable to controlling shareholders	$	3,329	$	0.07	$	2,119	$	0.06	$	10,244	$	0.23	$	5,712	$	0.16
Core Earnings Adjustments
Equity investments in renewable energy projects		6,244				3,173				18,558				9,544
Non-cash equity-based compensation charges		2,531				2,701				7,452				7,728
Amortization of intangibles		364				527				1,076				939
Non-cash provision for taxes		—				—				—				47
Current year earnings attributable to minority interest		18				23				75				62
Core Earnings(1)	$	12,486	$	0.29	$	8,543	$	0.26	$	37,405	$	0.92	$	24,032	$	0.79

(1) Core Earnings per share is based on 43,596,100 shares and 40,589,360 shares for the three and nine months ended September 30, 2016, respectively, and 32,787,514 shares and 30,585,319 shares for the three and nine months ended September 30, 2015, respectively, which represents the weighted average number of fully-diluted shares outstanding including participating securities and the minority interest in our Operating Partnership.

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Managed Assets

As we both consolidate assets on our balance sheet and securitize investments, certain of our financing receivables and other assets are not reflected on our balance sheet where we may have a residual interest in the performance of the investment. Thus, we present our investments on a non-GAAP “managed” basis, which assumes that securitized financing receivables are not sold. We believe that our managed asset information is useful to investors because it portrays the amount of both on- and off-balance sheet financing receivables that we manage, which enables investors to understand and evaluate the credit performance associated with the portfolio of financing receivables and investments reported on our consolidated balance sheet and our retained interests in securitized financing receivables. Our non-GAAP managed assets measure may not be comparable to similarly titled measures used by other companies.

The following is a reconciliation of our U.S. GAAP Portfolio to our managed assets as of September 30, 2016 and December 31, 2015:

	As of
	September 30, 2016			December 31, 2015
	(dollars in millions)
Financing receivables	$	865		$	784
Financing receivables held-for-sale		7			60
Investments		50			29
Real estate		166			156
Equity method investments in affiliates		324			319
Assets held in securitization trusts		2,163			1,840
Managed Assets	$	3,575		$	3,188
Credit losses as a percentage of assets under management		0.0	%		0.0	%

Liquidity and Capital Resources

Liquidity is a measure of our ability to meet potential short term (within one year) and long term cash requirements, including ongoing commitments to repay borrowings, fund and maintain our current and future assets, make distributions to our stockholders and other general business needs. We will use significant cash to make debt and equity investments, repay principal and interest on our borrowings, make distributions to our stockholders and fund our operations.

We use borrowings as part of our financing strategy to increase potential returns to our stockholders and have available to us a broad range of financing sources. In July 2013, we entered into a $350 million senior secured revolving credit facility with maximum total advances of $700 million. Since that time, we have entered into a number of amendments intended to increase the flexibility and borrowing capability under the credit facility and to extend the maturity date. The facility has been increased to $500 million with maximum total advances of $1.5 billion and the facility was extended an additional year and matures in July 2019.

In September 2016, we borrowed $50 million from a financial institution. This recourse credit agreement matures on December 30, 2016 and can be repaid at anytime. It bears interest at a fixed rate of 4.8% which increases to 6.8% on November 14, 2016 and is also secured by the equity of our special purpose subsidiary that holds $84 million of residential solar financing receivables.

In addition, we have completed approximately $610 million of nonrecourse borrowings since April 2013. We also continue to utilize off-balance sheet securitization transactions where we transfer the loans or other assets we originate to securitization trusts or other bankruptcy remote special purpose funding vehicles that are not consolidated on our balance sheet. As of September 30, 2016, the outstanding principal balance of our assets financed through the use of these off-balance sheet transactions was approximately $2.2 billion.

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Large institutional investors, primarily insurance companies and commercial banks, have provided the financing for these nonrecourse and off-balance sheet financings. We have worked to expand our liquidity and access to the debt and bank loan markets and have entered into transactions with a number of new lenders and insurance companies in the last year. We continue to provide details on the greenhouse gas emissions (“GHG”) saved by our investments and believe that investors increasingly are interested in investments that have a measurable GHG savings. For further information on the credit facility, asset backed nonrecourse notes, securitizations and our nonrecourse match funded debt, see Note 5, 7 and 8 to our financial statements of this Form 10-Q.

The decision on how we finance specific assets or groups of assets is largely driven by capital allocations and risk and portfolio management considerations, as well as the overall interest rate environment, prevailing credit spreads and the terms of available financing and market conditions. Over time, as market conditions change, we may use other forms of leverage in addition to these financings arrangements.

We plan to continue to use fixed and floating rate borrowings which may be in the form of additional bank credit facilities (including term loans of various durations and revolving facilities), warehouse facilities, repurchase agreements and public and private equity and debt issuances as a means of financing our business. We also expect to use both on-balance sheet and non-consolidated securitizations and also believe we will be able to customize securitized tranches to meet investment preferences of different investors. We may also consider the use of separately funded special purpose entities or funds to allow us to expand the investments that we make.

We may continue to raise funds through public and private offerings of equity and debt securities. Beginning with our initial public offering in April 2013, we have raised total net proceeds of approximately $560 million in public offerings of our common stock including approximately $91 million in a follow on public offering completed in the second quarter of 2016. In May 2016, we established an “at-the-market” equity distribution program, or our ATM program, pursuant to which we can offer to sell, from time to time, up to an aggregate amount of $75 million of our common stock. During the nine months ended September 30, 2016, we issued a total of 65,000 shares and raised approximately $1 million under our ATM program.

Although we are not restricted by any regulatory requirements to maintain our leverage ratio at or below any particular level, the amount of leverage we may deploy for particular assets will depend upon the availability of particular types of financing and our assessment of the credit, liquidity, price volatility and other risks of those assets, the interest rate environment and the credit quality of our financing counterparties. As of September 30, 2016, our debt to equity ratio was 1.9 to 1, which is slightly below our target range of 2.5 to 1. Our fixed rate debt was approximately 67% as of September 30, 2016, near the upper end of our targeted fixed rate debt percentage range of approximately 50% to 70%. The calculation of our debt at fixed rates and leverage is shown in the chart below:

	September 30, 2016		% of Total
	($ in millions)
Floating-Rate Borrowings	$	317		33	%
Fixed-Rate debt	$	650		67	%
Total Debt(1)	$	967		100	%
Equity	$	497
Leverage		1.9 to 1

(1) Floating-Rate Borrowings include borrowings under our floating-rate credit facility, our short term borrowing and approximately $10 million of nonrecourse debt that has not been hedged. Fixed-Rate debt includes the present notional value of nonrecourse debt that is hedged using interest rate swaps. Debt excludes securitizations that are not consolidated on our balance sheet (where the collateral is typically borrowings with U.S. government obligors).

We intend to use leverage for the primary purpose of financing our portfolio and business activities and not for the purpose of speculating on changes in interest rates. While we may temporarily exceed the leverage target, if our board of directors approves a material change to our leverage target, we anticipate advising our stockholders of this change through disclosure in our periodic reports and other filings under the Exchange Act.

While we generally intend to hold our target assets that we do not securitize upon acquisition as long term investments, certain of our investments may be sold in order to manage our interest rate risk and liquidity needs, to meet other operating objectives and to adapt to market conditions. The timing and impact of future sales of financings, if any, cannot be predicted with any certainty. Since we expect that our assets will generally be financed, we expect that a significant portion of the proceeds from sales of our assets (if any), prepayments and scheduled amortization will be used to repay balances under our financing sources.

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We believe these identified sources of liquidity will be adequate for purposes of meeting our short term and long term liquidity needs, which include funding future investments, operating costs and distributions to our stockholders. To qualify as a REIT, we must distribute annually at least 90% of our REIT’s taxable income without regard to the deduction for dividends paid and excluding net capital gains. These dividend requirements limit our ability to retain earnings and thereby replenish or increase capital for growth and our operations.

Sources and Uses of Cash

We had approximately $73 million and $43 million of unrestricted cash and cash equivalents as of September 30, 2016 and December 31, 2015, respectively.

Cash Flows Relating to Operating Activities

Net cash provided by operating activities was approximately $51 million for nine months ended September 30, 2016, driven primarily by net income of $10 million and net cash provided by the sale of financing receivables (including financing receivables held-for-sale) and investments of $30 million, and adjustments for noncash items of $14 million, consisting primarily of equity based compensation and depreciation and amortization, offset by changes in accounts payable and various accruals of $3 million.

Net cash provided by operating activities was $22 million for the nine months ended September 30, 2015, driven by net income of $6 million, net cash provided from the sale of financing receivables (including financing receivables held-for-sale) and investments of $10 million, and adjustments for noncash items of $11 million, consisting primarily of equity based compensation and depreciation and amortization, offset by changes in accounts payable and various accruals of $5 million.

Cash Flows Relating to Investing Activities

Net cash used in investing activities was approximately $65 million for nine months ended September 30, 2016. We used $249 million to purchase financing receivables and investments, $11 million to purchase real estate, and made an additional $14 million investment in our renewable energy equity investments. We received $49 million from the sale of financing receivables and investments and $42 million in distributions in excess of our cumulative income from our equity investments in renewable energy projects. In addition, we collected cash from principal payments on our financing receivables and investments of $106 million and had $12 million cash inflow from other investing activities.

Net cash used in investing activities was $174 million for the nine months ended September 30, 2015. We used $244 million to purchase financing receivables and investments, $42 million to purchase real estate and a net of $43 million for additional wind equity investments. We collected cash from principal payments on our financing receivables and investments of $68 million. In addition, we received $69 million from the sale of financing receivables and investments and cash distributions from our investment in our wind projects of $21 million. In addition, $3 million was used for other investing activities.

Cash Flows Relating to Financing Activities

Net cash provided by financing activities was approximately $44 million for the nine months ended September 30, 2016. This includes net borrowings from our credit facilities of $110 million and net proceeds of $91 million from the issuance of our common stock, partially offset by payments of $121 million on our nonrecourse debt and deferred funding and other financing obligations and dividend and distribution payments of $36 million.

Net cash provided by financing activities was $125 million for the nine months ended September 30, 2015. This includes credit facility and nonrecourse debt borrowings of $349 million and net proceeds of $82 million from the sale of our common stock. These cash inflows were partially offset by payments to reduce our borrowings under the credit facility, deferred funding obligations and nonrecourse debts totaling $279 million, the payment of dividends and distributions of $23 million, and other cash outflows of $4 million.

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Off-Balance Sheet Arrangements

We have relationships with non-consolidated entities or financial partnerships, such as entities often referred to as structured investment vehicles, or special purpose or variable interest entities, established to facilitate the sale of securitized assets. Other than our securitization assets (including any outstanding servicer advances) of approximately $18 million as of September 30, 2016, that may be at risk in the event of defaults in our securitization trusts, we have not guaranteed any obligations of nonconsolidated entities or entered into any commitment or intent to provide additional funding to any such entities. A more detailed description of our relations with non-consolidated entities can be found in Note 2 included in the notes to the condensed consolidated financial statements included in this Form 10-Q and as described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations —Critical Accounting Policies and Use of Estimates,” in our 2015 Form 10-K, filed with the SEC.

Dividends

U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pay tax at regular corporate rates to the extent that it annually distributes less than 100% of its REIT taxable income. Our current policy is to pay quarterly distributions, which on an annual basis will equal or exceed substantially all of our REIT taxable income. Any distributions we make will be at the discretion of our board of directors and will depend upon, among other things, our actual results of operations. These results and our ability to pay distributions will be affected by various factors, including the net interest and other income from our portfolio, our operating expenses and any other expenditures. In the event that our board of directors determines to make distributions in excess of the income or cash flow generated from our assets, we may make such distributions from the proceeds of future offerings of equity or debt securities or other forms of debt financing or the sale of assets. To the extent that in respect of any calendar year, cash available for distribution is less than our taxable income, we could be required to sell assets or borrow funds to make cash distributions or make a portion of the required distribution in the form of a taxable stock distribution or distribution of debt securities. We will generally not be required to make distributions with respect to activities conducted through our domestic TRSs.

We anticipate that our distributions generally will be taxable as ordinary income to our stockholders, although a portion of the distributions may be designated by us as qualified dividend income or capital gain or may constitute a return of capital. In addition, a portion of such distributions may be taxable stock dividends payable in our shares. We will furnish annually to each of our stockholders a statement setting forth distributions paid during the preceding year and their characterization as ordinary income, return of capital, qualified dividend income or capital gain.

The dividends declared in 2015 and 2016 are described under Note 11 to our financial statements in this Form 10-Q.

Book Value Considerations

As of September 30, 2016, we carried only our investments available-for-sale, interest rate swaps and retained assets in securitized receivables at fair value on our balance sheet. As a result, in reviewing our book value, there are a number of important factors and limitations to consider. Other than the approximately $50 million in investments available-for-sale, approximately $6 million liability for interest rate swaps and the $17 million in residual assets relating to our retained interests in securitized receivables that are on our balance sheet at fair value as of September 30, 2016, the carrying value of our remaining assets and liabilities are calculated as of a particular point in time, which is largely determined at the time such assets and liabilities were added to our balance sheet using a cost basis in accordance with U.S. GAAP. As such, our remaining assets and liabilities do not incorporate other factors that may have a significant impact on their value, most notably any impact of business activities, changes in estimates, or changes in general economic conditions or interest rates since the dates the assets or liabilities were initially recorded. Accordingly, our book value does not necessarily represent an estimate of our net realizable value, liquidation value or our market value as a whole.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk

We anticipate that our primary market risks will be related to the credit quality of our counterparties and project companies, market interest rates, the liquidity of our assets and commodity prices. We will seek to manage these risks while, at the same time, seeking to provide an opportunity to stockholders to realize attractive returns through ownership of our common stock.

Credit Risks

We source and identify quality opportunities within our broad areas of expertise and apply our rigorous underwriting processes to our transactions, which, we believe, will generally enable us to minimize our credit losses and keep financing costs low. While we do not anticipate facing significant credit risk in our financings related to U.S. federal government or other governmental energy efficiency projects, we are subject to varying degrees of credit risk in these projects in relation to guarantees provided by ESCOs where payments under energy savings performance contracts are contingent upon achieving pre-determined levels of energy savings. We are also exposed to credit risk in projects including those projects we have under long-term lease arrangements that do not benefit from a governmental obligor. We increasingly target such projects as part of our strategy. In the case of various renewable energy and sustainable infrastructure projects, we will also be exposed to the credit risk of the obligor of the project’s power purchase agreement or other long-term contractual revenue commitments, as well as to the credit risk of certain suppliers and project operators. We may encounter enhanced credit risk as we expect that over time our strategy will increasingly include mezzanine debt and equity investments. We seek to manage credit risk thorough due diligence and underwriting processes, strong structural protections in our transaction agreements with customers and continual, active asset management and portfolio monitoring. Nevertheless, unanticipated credit losses could occur and during periods of economic downturn in the global economy, our exposure to credit risks from obligors increases, and our efforts to monitor and mitigate the associated risks may not be completely effective in reducing our credit risks.

Interest Rate and Borrowing Risks

Interest rate risk is highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control.

We are subject to interest rate risk in connection with new asset originations and our credit facility, and in the future, will be subject to interest rate risk for any new floating rate assets and credit facilities. Because short-term borrowings are generally short-term commitments of capital, lenders may respond to market conditions, making it more difficult for us to secure continued financing. If we are not able to renew our then existing facilities or arrange for new financing on terms acceptable to us, or if we default on our covenants or are otherwise unable to access funds under any of these facilities, we may have to curtail entering into new transactions and/or dispose of assets. We face particular risk in this regard given that we expect many of our borrowings will have a shorter duration than the assets they finance. Increasing interest rates may reduce the demand for our investments while declining interest rates may increase the demand. Both our current and future credit facilities may be of limited duration and are periodically refinanced at then current market rates. We expect to attempt to reduce interest rate risks and to minimize exposure to interest rate fluctuations through the use of match funded or fixed rate financing structures, when appropriate, whereby we may seek (1) to match the maturities of our debt obligations with the maturities of our assets, (2) to borrow at fixed rates for a period of time, like in our asset backed securitizations, or (3) to match the interest rates on our assets with like-kind debt (i.e., we may finance floating rate assets with floating rate debt and fixed-rate assets with fixed-rate debt), directly or through the use of interest rate swap agreements, interest rate cap agreements or other financial instruments, or through a combination of these strategies. We expect these instruments will allow us to minimize, but not eliminate, the risk that we have to refinance our liabilities before the maturities of our assets and to reduce the impact of changing interest rates on our earnings. In addition to the use of traditional derivative instruments, we also seek to mitigate interest rate risk by using securitizations, syndications and other techniques to construct a portfolio with a staggered maturity profile. We monitor the impact of interest rate changes on the market for new originations and often have the flexibility to increase the term of the project to offset interest rate increases.

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Our nonrecourse debt is at fixed rates or we have generally used interest rate hedges which convert the floating rate to fixed rate as described in Note 8 to our financial statements in this Form 10-Q. Changes in market rates impact the fair value of the fixed rate debt but have no impact on our consolidated financial statements, other than the fair value change of our interest rate hedges which should be offset by a corresponding change in the value of the debt. If interest rates rise, and our fixed debt balance remains constant, we expect the fair value of our debt to decrease and the value of our hedge to increase. See Note 3 to our financial statements in this Form 10-Q for the estimated fair value of our fixed rate nonrecourse debt, which is based on having the same debt service requirements that could have been borrowed at the date presented, at prevailing current market interest rates.

Our credit facility is a variable rate loan with approximately $307 million outstanding as of September 30, 2016 and we have approximately $10 million of variable rate exposure under our nonrecourse debt. Significant increases in interest rates would result in higher interest expense while decreases in interest rates would result in lower interest expense. As described above, we may use various financing techniques including interest rate swap agreements, interest rate cap agreements or other financial instruments, or a combination of these strategies to mitigate the variable interest nature of this facility. A 50 basis point increase in LIBOR would increase the quarterly interest expense related to the $317 million in variable rate borrowings by $0.4 million. Such hypothetical impact of interest rates on our variable rate borrowings does not consider the effect of any change in overall economic activity that could occur in a rising interest rate environment. Further, in the event of such a change in interest rates, we may take actions to further mitigate our exposure to such a change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the analysis assumes no changes in our financial structure.

We record our retained assets at fair value in our financial statements and any changes in the discount rate would impact the value of these assets. See Note 3 to our financial statements in this Form 10-Q.

Liquidity and Concentration Risk

The assets that comprise our asset portfolio are not and will not be publicly traded. A portion of these assets may be subject to legal and other restrictions on resale or will otherwise be less liquid than publicly-traded securities. The illiquidity of our assets may make it difficult for us to sell such assets if the need or desire arises, including in response to changes in economic and other conditions. Our projects typically have one obligor and thus we are subject to concentration risk and could incur significant losses if any of these projects perform poorly or if we are required to write down the value of any these projects. See also “—Credit Risks” above.

Commodity Price Risk

When we provide debt or equity for a project that acts as a substitute for an underlying commodity we are exposed to volatility in prices for that commodity. For example, the performance of renewable energy projects that produce electricity can be impacted by volatility in the market prices of various forms of energy, including electricity, coal and natural gas. This is especially true for utility scale projects that sell power on a wholesale basis, like many of our wind projects, as opposed to distributed renewable projects or energy efficiency projects which compete against the retail or delivered costs of electricity which includes the cost of transmitting and distributing the electricity to the end user.

Although we generally focus on renewable energy projects that have the majority of their operating cash flow supported by long term PPAs, ranging from 10 to 30 years, to the extent that the projects have shorter term contracts (which may have the potential of producing higher current returns) or sell their power in the open market on a merchant basis, the cash flows of such projects, and thus the repayment of, or the returns available for, our assets, may be subject to risk if energy prices change. We also mitigate our exposure through structural protections. These structural protections, which are typically in the form of a preferred return, are designed to allow recovery of our capital and an acceptable return over time. When structuring and underwriting these transactions, we evaluate these transactions using a variety of scenarios, including natural gas prices remaining low for an extended period of time. In the case of utility scale solar projects, we focus on owning the land under the project where our rent is paid out of project operational costs before the debt or equity in the project receives any payments.

We believe the current low prices in natural gas will increase demand for some types of our projects, such as combined heat and power, but may reduce the demand for other projects such as renewable energy that may be a substitute for natural gas. We seek to structure our energy efficiency financings so that we typically avoid exposure to commodity price risk. However, volatility in energy prices may cause building owners and other parties to be reluctant to commit to projects for which repayment is based upon a fixed monetary value for energy savings that would not decline if the price of energy declines.

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Risk Management

Our ongoing active asset management and portfolio monitoring processes provide investment oversight and valuable insight into our origination, underwriting and structuring processes. These processes create value through active monitoring of the state of our markets, enforcement of existing contracts and real-time receivables management. Subject to maintaining our qualification as a REIT, and as described above, we engage in a variety of interest rate management techniques that seek to mitigate the economic effect of interest rate changes on the values of, and returns on, some of our assets. While there have been only two incidents of credit loss, amounting to approximately $18 million (net of recoveries) on the more than $5 billion of transactions we originated since 2000, which represents an aggregate loss of less than approximately 0.4% on cumulative transactions originated over this time period, there can be no assurance that we will continue to be as successful, particularly as we invest in more credit sensitive assets or more equity positions and engage in increasing numbers of transactions with obligors other than U.S. federal government agencies.

We seek to manage credit risk using thorough due diligence and underwriting processes, strong structural protections in our loan agreements with customers and continual, active asset management and portfolio monitoring.

Recent U.S. Federal Income Tax Regulatory Developments

In addition, to the adoption of the Protecting Americans From Tax Hikes Act of 2015 (the “PATH Act”). which is discussed in our Form 10-K for the year ended December 31, 2015, the following is a discussion of certain recent significant developments in the U.S. federal income tax laws affecting REIT qualification that have important implications with respect to our qualification as a REIT:

Real Property Regulations

As previously disclosed beginning in our Form 10-Q for the quarter ended September 30, 2014, in May of 2014, the Treasury Department and the Internal Revenue Service, or the IRS, published proposed regulations which considered revisions to the definition of “real property” for purposes of the REIT income and asset tests. On August 30, 2016, these regulations, which we refer to as the Real Property Regulations, became final and will apply to us with respect to our taxable years beginning after December 31, 2016. Among other things, the Real Property Regulations provide that an obligation secured by a structural component of a building or other inherently permanent structure qualifies as a real estate asset for REIT qualification purposes only if such obligation is also secured by a real property interest in the inherently permanent structure served by such structural component. This aspect of the Real Property Regulations has important implications for our qualification as a REIT since a significant portion of our REIT qualifying assets consists of financing receivables that are secured by liens on installed structural improvements designed to improve the energy efficiency of buildings and a significant portion of REIT qualifying gross income is interest income earned with respect to such financing receivables.

The structural improvements securing our financing receivables generally qualify as “fixtures” under local real property law, as well as under the Uniform Commercial Code, or the UCC, which governs rights and obligations of parties in secured transactions. Although not controlling for REIT purposes, the general rule in the United States is that once improvements are permanently installed in real properties, such improvements become fixtures and thus take on the character of and are considered to be real property for local law purposes. In general, in the United States, laws governing fixtures, including the UCC, afford lenders who have secured their financings with security interests in fixtures with rights that extend not just to the fixtures that secure their financings, but also to the real properties in which such fixtures have been installed. By way of example only, Section 9-604(b) of the UCC, which has been adopted in all but two states in the United States, permits a lender secured by a structural component, upon a default, to enforce its rights under the UCC or under applicable real property laws. Although there is limited authority directly on point, we believe the nature and scope of our rights in the buildings in which the structural improvements securing our financing receivables have been fully integrated are sufficient to satisfy the requirement of the Real Property Regulations described above. In addition to the limited authority directly on point, two other important caveats apply in this regard. First, the Real Property Regulations do not define what is required for an obligation secured by a lien on a structural component to also be secured by a real property interest in the building served by such structural component, although the final Real Property Regulations do not include the requirement that the interest in the real property held by a REIT be “equivalent” to the REIT’s interest in the structural component itself as was initially included in the proposed version of the Real Property Regulations, which never became effective, which implies that under the final Real Property Regulations our rights as a creditor in the building need not be equivalent to our rights in the structural components serving the building. Second, real property law is typically defined at a state or local jurisdiction basis and the specific rights available to us as a fixture lien holder in the real properties in which our structural components have been installed may vary between jurisdictions as a result of a range of factors including the specific local real property law requirements and judicial and regulatory interpretations of such laws, and the competing rights of mortgage and other lenders. Further, these issues have been considered by the courts in only a few jurisdictions, and their resolution in many jurisdictions is therefore uncertain. As a result of the foregoing, no assurance can be given that the IRS will not challenge our position that our financing receivables meet the requirements of the Real Property Regulations or that, if challenged, such position would be sustained.

                Prior to the issuance of the Real Property Regulations, we received a private letter ruling from the IRS, which we refer to as the Ruling, which, based on the representations and assumptions contained therein, held that our financing receivables qualify as real estate assets and the income from such financing receivables qualify as interest income from mortgages on real property for purposes of the REIT requirements. The preamble to the Real Property Regulations provides that, to the extent a private letter ruling issued prior to the issuance of the Real Property Regulations is inconsistent with the Real Property Regulations, the private letter ruling is revoked prospectively from the applicability date of the Real Property Regulations. We do not believe that the Ruling is inconsistent with the Real Property Regulations because we believe the analysis in the Ruling was based on similar principles as the relevant portions of the Real Property Regulations, and accordingly we do not believe that the Real Property Regulations impact our ability to rely on the Ruling. However, no assurance can be given that the IRS would not successfully assert that we are not permitted to rely on the Ruling because the Ruling has been revoked by the Real Property Regulations.

If the IRS were to assert that a significant portion of our financing receivables do not qualify as real estate assets and do not generate income treated as interest income from mortgages on real property, we would fail to satisfy both the gross income requirements and asset requirements applicable to REITs. As a result, we could be required to pay one or more penalty taxes, which could be significant in amount, alter our mix of assets or adjust our business strategy, or we could fail to qualify as a REIT.

Tax on Built in Gains

As indicated in our 10-K, the PATH Act reduced the period during which dispositions of properties that were acquired with net built-in gains from C corporations in carry-over basis transactions will trigger a built-in gains tax from 10 years to 5 years for taxable years beginning after December 31, 2014. However, on June 7, 2016, the IRS and Treasury Department issued temporary regulations changing the recognition period back to ten years, effective for assets with built-in gain acquired on or after August 8, 2016.

Item 4. Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer, based on their evaluation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) required by paragraph (b) of Rule 13a-15 or Rule 15d-15, have concluded that as of September 30, 2016, the Company’s disclosure controls and procedures were effective to give reasonable assurances to the timely collection, evaluation and disclosure of information relating to the Company that would potentially be subject to disclosure under the Exchange Act and the rules and regulations promulgated thereunder.

Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in our periodic reports.

Changes in Internal Controls over Financial Reporting

There have been no changes in the Company’s “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the three month period ended September 30, 2016, that have materially affected, or was reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The nature of our operations exposes us to the risk of claims and litigation in the normal course of our business. Other than non-material litigation arising out of the ordinary course of business, we are not currently subject to any legal proceedings that are probable of having a material adverse effect on our financial position, results of operations or cash flows.

Item 1A. Risk Factors

For a discussion of our potential risks and uncertainties, see the information in Item 1A. “Risk Factors” of our 2015 Form 10-K, filed with the SEC, which is accessible on the SEC’s website at www.sec.gov.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities

During the nine months ended September 30, 2016, certain of our employees surrendered common stock owned by them to satisfy their federal and state tax obligations associated with the vesting of their restricted stock awards. No OP units were exchanged for shares of common stock during the nine months ended September 30, 2016.

The table below summarizes all of our repurchases of common stock during 2016. The number of shares purchased represents shares of common stock surrendered by certain of our employees to satisfy their tax and other compensation related withholdings associated with the vesting of restricted stock. The price paid per share is based on the closing price of our common stock as of the date of the withholding.

Period	Total number of shares purchased		Average price per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under the plans or programs
February 2016		413	$	17.49	N/A	N/A
March 2016		8,991	$	18.06	N/A	N/A
April 2016		62,800	$	19.93	N/A	N/A
May 2016		168,302	$	19.70	N/A	N/A
June 2016		15,295	$	20.30	N/A	N/A
August 2016		2,491	$	22.80	N/A	N/A

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits 

Exhibit number	Exhibit description
3.1	Articles of Amendment and Restatement of Hannon Armstrong Sustainable Infrastructure Capital, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 10-Q for the quarter ended June 30, 2013 (No. 001-35877), filed on August 9, 2013)
3.2	Bylaws of Hannon Armstrong Sustainable Infrastructure Capital, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 10-Q for the quarter ended June 30, 2013 (No. 001-35877), filed on August 9, 2013)
3.3	Amended and Restated Agreement of Limited Partnership of Hannon Armstrong Sustainable Infrastructure, L.P. (incorporated by reference to Exhibit 3.3 to the Registrant’s Form 10-Q for the quarter ended June 30, 2013 (No. 001-35877), filed on August 9, 2013)
4.1	Specimen Common Stock Certificate of Hannon Armstrong Sustainable Infrastructure Capital, Inc. (incorporated by reference to Exhibit 4.1 to the Registrant’s Form S-11 (No. 333-186711), filed on April 12, 2013)
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Chief Executive Officer pursuant to section 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes—Oxley Act of 2002
32.2**	Certification of Chief Financial Officer pursuant to section 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes—Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101 PRE	XBRL Taxonomy Extension Presentation Linkbase

* Filed herewith.

** Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC.
	(Registrant)
Date: November 3, 2016	/s/ Jeffrey W. Eckel
	Jeffrey W. Eckel
	Chairman, Chief Executive Officer and President
Date: November 3, 2016	/s/ J. Brendan Herron
	J. Brendan Herron
	Chief Financial Officer and Executive Vice President
	(Duly Authorized Officer and Chief Accounting Officer)

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EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Jeffrey W. Eckel, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Hannon Armstrong Sustainable Infrastructure Capital, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 3, 2016	By:	/s/ Jeffrey W. Eckel
		Name: Jeffrey W. Eckel
		Title: Chairman, Chief Executive Officer and President

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, J. Brendan Herron, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Hannon Armstrong Sustainable Infrastructure Capital, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 3, 2016	By:	/s/ J. Brendan Herron
		Name: J. Brendan Herron
		Title: Chief Financial Officer and Executive Vice President

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002, 10 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Hannon Armstrong Sustainable Infrastructure Capital, Inc. (the “Company”) for the period ended September 30, 2016, to be filed with the Securities and Exchange Commission on or about the date hereof (the “report”), I, Jeffrey W. Eckel, Chief Executive Officer and President of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1. The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

It is not intended that this statement be deemed to be filed for purposes of the Securities Exchange Act of 1934.

Date: November 3, 2016	By:	/s/ Jeffrey W. Eckel
		Name: Jeffrey W. Eckel
		Title: Chairman, Chief Executive Officer and President

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002, 10 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Hannon Armstrong Sustainable Infrastructure Capital, Inc. (the “Company”) for the period ended September 30, 2016, to be filed with the Securities and Exchange Commission on or about the date hereof (the “report”), I, J. Brendan Herron, Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1. The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

It is not intended that this statement be deemed to be filed for purposes of the Securities Exchange Act of 1934.

Date: November 3, 2016	By:	/s/ J. Brendan Herron
		Name: J. Brendan Herron
		Title: Chief Financial Officer and Executive Vice President

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 01, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Trading Symbol	HASI
Entity Registrant Name	Hannon Armstrong Sustainable Infrastructure Capital, Inc.
Entity Central Index Key	0001561894
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		43,312,945

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Assets
Financing receivables	$ 865,481	$ 783,967
Financing receivables held-for-sale	7,378	60,376
Investments available-for-sale	50,291	29,017
Real estate	134,815	128,769
Real estate related intangible assets	30,924	26,930
Equity method investments in affiliates	323,968	318,769
Cash and cash equivalents	72,968	42,645
Other assets	70,340	79,148
Total Assets	1,556,165	1,469,621
Liabilities:
Accounts payable, accrued expenses and other	28,015	17,875
Deferred funding obligations	64,331	108,499
Credit facilities	356,419	247,350
Nonrecourse debt (secured by assets of $763 million and $815 million, respectively)	610,267	663,791
Total Liabilities	1,059,032	1,037,515
Stockholders' Equity:
Preferred stock, par value $0.01 per share, 50,000,000 shares authorized, no shares issued and outstanding
Common stock, par value $0.01 per share, 450,000,000 shares authorized, 41,989,485 and 37,010,603 shares issued and outstanding, respectively	420	370
Additional paid in capital	578,107	482,431
Retained deficit	(80,865)	(52,701)
Accumulated other comprehensive loss	(4,289)	(1,905)
Non-controlling interest	3,760	3,911
Total Stockholders' Equity	497,133	432,106
Total Liabilities and Stockholders' Equity	$ 1,556,165	$ 1,469,621

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Nonrecourse notes, secured by assets	$ 763	$ 815
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	450,000,000	450,000,000
Common stock, shares issued	41,989,485	37,010,603
Common stock, shares outstanding	41,989,485	37,010,603

XML

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenue:
Interest income, financing receivables	$ 12,043	$ 10,064	$ 36,178	$ 26,609
Interest income, investments	494	364	1,303	1,118
Rental income	2,977	1,988	8,768	6,641
Gain on sale of receivables and investments	2,724	2,529	13,665	6,956
Fee income	770	98	1,422	1,160
Total Revenue	19,008	15,043	61,336	42,484
Expenses:
Investment interest expense	(10,635)	(6,689)	(32,945)	(18,940)
Compensation and benefits	(4,325)	(4,341)	(14,497)	(12,171)
General and administrative	(1,991)	(2,034)	(6,129)	(5,360)
Total Expenses	(16,951)	(13,064)	(53,571)	(36,471)
Income before equity method investments in affiliates	2,057	1,979	7,765	6,013
Income (loss) from equity method investments in affiliates	1,331	187	2,677	(162)
Income before income taxes	3,388	2,166	10,442	5,851
Income tax expense	(41)	(24)	(123)	(77)
Net Income	3,347	2,142	10,319	5,774
Net income attributable to non-controlling interest holders	18	23	75	62
Net Income Attributable to Controlling Shareholders	$ 3,329	$ 2,119	$ 10,244	$ 5,712
Basic earnings per common share	$ 0.07	$ 0.06	$ 0.23	$ 0.16
Diluted earnings per common share	$ 0.07	$ 0.06	$ 0.23	$ 0.16
Weighted average common shares outstanding-basic	41,988,036	31,221,982	38,924,977	29,046,742
Weighted average common shares outstanding-diluted	41,998,036	31,221,982	38,924,977	29,046,742

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Net Income	$ 3,347	$ 2,142	$ 10,319	$ 5,774
Unrealized gain/(loss) on interest rate swaps, net of taxes of $0.0 million in 2016	488		(5,428)
Unrealized gain/(loss) on available-for-sale securities, net of taxes benefit/(provision) of $0.0 million in each of the three and nine months periods ended 2016 and $0.0 million and $0.2 million for the three and nine months ended 2015, respectively	2,065	(788)	3,027	(1,281)
Comprehensive income	5,900	1,354	7,918	4,493
Less: Comprehensive income attributable to non-controlling interests holders	38	16	58	49
Comprehensive Income Attributable to Controlling Shareholders	$ 5,862	$ 1,338	$ 7,860	$ 4,444

XML

Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Unrealized gain/(loss) on interest rate swaps, taxes	$ 0.0		$ 0.0
Unrealized gain/(loss) on available-for-sale securities, benefit/(provision)	$ 0.0	$ 0.0	$ 0.0	$ 0.2

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities
Net Income	$ 10,319	$ 5,774
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,350	2,716
Equity-based compensation	7,452	7,728
From equity method investments in affiliates	570	162
Gain on sale of financing receivables and investments	(10,319)	(5,069)
Changes in financing receivables held-for-sale	40,560	15,019
Changes in accounts payable and accrued expenses	4,596	119
Other	(7,523)	(4,652)
Net cash provided by operating activities	51,005	21,797
Cash flows from investing activities
Purchases of financing receivables	(223,051)	(222,823)
Principal collections from financing receivables	104,741	59,188
Proceeds from sales of financing receivables	35,052	57,995
Purchases of investments	(25,895)	(21,190)
Principal collections from investments	1,406	8,792
Proceeds from sales of investments	13,914	10,794
Purchases of real estate	(10,964)	(42,007)
Investments in equity method affiliates, net	(14,165)	(42,633)
Distributions received from equity method affiliates	41,800	21,095
Other	12,192	(3,119)
Net cash used in investing activities	(64,970)	(173,908)
Cash flows from financing activities
Proceeds from credit facilities	270,900	236,786
Principal payments on credit facilities	(161,275)	(174,555)
Proceeds from nonrecourse debt		112,126
Principal payments on nonrecourse debt	(56,324)	(38,419)
Payments on deferred funding obligations	(56,281)	(65,869)
Net proceeds of common stock issuances	91,167	81,546
Payments of dividends and distributions	(36,401)	(23,062)
Other	(7,498)	(3,961)
Net cash provided by financing activities	44,288	124,592
Increase (decrease) in cash and cash equivalents	30,323	(27,519)
Cash and cash equivalents at beginning of period	42,645	58,199
Cash and cash equivalents at end of period	72,968	30,680
Interest paid	$ 28,056	$ 18,545

XML

The Company

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The Company

1. The Company

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (“the Company”) provides debt and equity to the energy efficiency and renewable energy markets. The Company and its subsidiaries are hereafter referred to as “we,” “us,” or “our.” We refer to the financings that we hold on our balance sheet as our “Portfolio.” Our Portfolio may include:

• Financing Receivables, such as project loans, receivables and direct financing leases,

• Investments, such as debt and equity securities,

• Real Estate, such as land or other physical assets and related intangible assets used in renewable energy projects, and

• Equity Investments in unconsolidated affiliates, such as projects where we hold non-consolidated equity interests in renewable energy projects.

We finance our business through cash on hand, borrowings under our credit facilities and debt transactions, and various asset-backed securitization transactions and equity issuances. We also generate fee income through asset-backed securitizations, by providing broker/dealer services and by servicing assets owned by third parties. Some of our subsidiaries are special purpose entities that are formed for specific operations associated with financing sustainable infrastructure receivables for specific long term contracts.

Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “HASI.” We have qualified as a REIT and also intend to operate our business in a manner that will continue to permit us to maintain our exception from registration as an investment company under the Investment Company Act of 1940, as amended. We operate our business through, and serve as the sole general partner of, our operating partnership subsidiary, Hannon Armstrong Sustainable Infrastructure, L.P, (the “Operating Partnership”), which was formed to acquire and directly or indirectly own our assets.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements reflect all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the financial position, results of operations, comprehensive income and cash flows for the periods presented. The preparation of financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and such differences could be material. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the entire year. Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted. Certain amounts in the prior year have been reclassified to conform to the current year presentation, including the format of the revenue section of the income statement to include a calculation of Total Revenue.

The condensed consolidated financial statements include the accounts of the Company and its controlled subsidiaries, including the Operating Partnership. All significant intercompany transactions and balances have been eliminated in consolidation.

Following the guidance for non-controlling interests in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation, references in this report to our earnings per share and our net income and shareholders’ equity attributable to common shareholders do not include amounts attributable to non-controlling interests.

Financing Receivables

Financing receivables include financing energy efficiency and renewable energy project loans, receivables and direct financing leases.

Unless otherwise noted, we generally have the ability and intent to hold our financing receivables for the foreseeable future and thus they are classified as held for investment. Our ability and intent to hold certain financing receivables may change from time to time depending on a number of factors, including economic, liquidity and capital market conditions. The carrying value of financing receivables held for investment represents the present value of the note, lease or other payments, net of any unearned fee income, which is recognized as income over the term of the note or lease using the effective interest method. Financing receivables that are held for investment are carried, unless deemed impaired, at cost, net of any unamortized acquisition premiums or discounts and include origination and acquisition costs, as applicable. Financing receivables that we intend to sell in the short-term are classified as held-for-sale and are carried at the lower of amortized cost or fair value on our balance sheet. The net purchases and proceeds from these sales of our held-for-sale financing receivables are recorded as an operating activity in our statement of cash flows based on our intent at the time of purchase. We may secure nonrecourse debt with the proceeds from our financing receivables. We evaluate any modifications of financing receivables to determine whether the modification is a minor modification in accordance with the guidance in ASC 310, Receivables.

We evaluate our financing receivables for potential delinquency or impairment on at least a quarterly basis and more frequently when economic or other conditions warrant such an evaluation. When a financing receivable becomes 90 days or more past due, and if we otherwise do not expect the debtor to be able to service all of its debt or other obligations, we will generally consider the financing receivable delinquent or impaired and place the financing receivable on non-accrual status and cease recognizing income from that financing receivable until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a financing receivable’s status significantly improves regarding the debtor’s ability to service the debt or other obligations, we will remove it from non-accrual status.

A financing receivable is also considered impaired as of the date when, based on current information and events, it is determined that it is probable that we will be unable to collect all amounts due in accordance with the original contracted terms. Many of our financing receivables are secured by energy efficiency and renewable energy infrastructure projects. Accordingly, we regularly evaluate the extent and impact of any credit deterioration associated with the performance and value of the underlying project, as well as the financial and operating capability of the borrower, its sponsors or the obligor as well as any guarantors. We consider a number of qualitative and quantitative factors in our assessment, including, as appropriate, a project’s operating results, loan-to-value ratios and any cash reserves, the ability of expected cash from operations to cover the cash flow requirements currently and into the future, key terms of the transaction, the ability of the borrower to refinance the transaction, other credit support from the sponsor or guarantor and the project’s collateral value. In addition, we consider the overall economic environment, the sustainable infrastructure sector, the effect of local, industry, and broader economic factors, the impact of any variation in weather and the historical and anticipated trends in interest rates, defaults and loss severities for similar transactions.

If a financing receivable is considered to be impaired, we record an allowance to reduce the carrying value of the financing receivable to the present value of expected future cash flows discounted at the financing receivable’s contractual effective rate or the amount realizable from other contractual terms such as the currently estimated fair market value of the collateral less estimated selling costs, if repayment is expected solely from the collateral. We charge off financing receivables against the allowance when we determine the unpaid principal balance is uncollectible, net of recovered amounts.

Investments

Investments include debt securities that meet the criteria of ASC 320, Investments—Debt and Equity Securities. We have designated our debt securities as available-for-sale and carry these securities at fair value on our balance sheet. Unrealized gains and losses, to the extent not considered other than temporary impairment (“OTTI”), on available-for-sale debt securities are recorded as a component of accumulated other comprehensive income (“OCI”) in equity on our balance sheet.

We evaluate our investments for OTTI on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Our OTTI assessment is a subjective process requiring the use of judgments and assumptions. Accordingly, we regularly evaluate the extent and impact of any credit deterioration associated with the financial and operating performance and value of the underlying project. We consider a number of qualitative and quantitative factors in our assessment. We first consider the current fair value of the security and the duration of any unrealized loss. Other factors considered include changes in the credit rating, performance of the underlying project, key terms of the transaction, the value of any collateral and any support provided by the sponsor or guarantor.

To the extent that we have identified an OTTI for a security and intend to hold the investment to maturity and we do not expect that we will be required to sell the security prior to recovery of the amortized cost basis, we recognize only the credit component of OTTI in earnings. We determine the credit component using the difference between the securities’ amortized cost basis and the present value of its expected future cash flows, discounted using the effective interest method or its estimated collateral value. Any remaining unrealized loss due to factors other than credit, or the non-credit component, is recorded in accumulated OCI.

To the extent we hold investments with an OTTI and if we have made the decision to sell the security or it is more likely than not that we will be required to sell the security prior to recovery of its amortized cost basis, we recognize the entire portion of the impairment in earnings.

Premiums or discounts on investment securities are amortized or accreted into investment interest income using the effective interest method.

Real Estate

Real estate reflects land or other real estate held on our balance sheet. Real estate intangibles reflect the value of associated lease intangibles, net of any amortization. In accordance with ASC 805, Business Combinations, the fair value of the real estate acquired in a business combination with in-place leases is allocated to (i) the acquired tangible assets, consisting of land or other real property such as buildings, and (ii) the identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and the value of other acquired intangible assets, based in each case on their fair values.

The fair value of the tangible assets of an acquired leased property is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land, building and tenant improvements, if any, based on the determination of the fair values of these assets. The as-if-vacant fair value of a property is determined by management based on an appraisal of the property by a qualified appraiser.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as intangible assets based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases, and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the lease, including renewal periods likely of being exercised by the lessee. The capitalized above-market lease values are amortized as a reduction of rental income and the capitalized below-market lease values are amortized as an increase to rental income. We also record, as appropriate, an intangible asset for in-place leases. The value of the leases in place at the time of the transaction is equal to the potential revenue (rent and expenses) lost if the leases were not in place (during downtime) and that would be incurred to obtain the lease. The amortization is calculated over the initial term unless management believes that it is likely that the tenant would exercise the renewal option, whereby we would amortize the value attributable to the renewal over the renewal period. If a lease were to be terminated, all unamortized amounts relating to that lease would be written off.

We record the purchases of real estate, other than in a business combination (i.e. real estate with no in-place leases), as asset acquisitions that are recorded at cost, including acquisition and closing costs. Our real estate is generally leased to tenants on a net lease basis, whereby the tenant is responsible for all operating expenses relating to the property, generally including property taxes, insurance, maintenance, repairs and capital expenditures. Scheduled rental revenue typically varies during the lease term and thus rental income is recognized on a straight-line basis, unless there is considerable risk as to collectability, so as to produce a constant periodic rent over the term of the lease. Accrued rental income is the aggregate difference between the scheduled rents which vary during the lease term and the income recognized on a straight-line basis and is recorded in other assets. Rental expenses (if any) are charged to operations as incurred.

Securitization of Receivables

We have established various special purpose entities or securitization trusts for the purpose of securitizing certain financing receivables or other debt investments. We determined that the trusts used in securitizations are variable interest entities, or VIEs, as defined in ASC 810, Consolidation. We typically serve as primary or master servicer of these trusts; however, as the servicer, we do not have the power to make significant decisions impacting the performance of the trusts. Based on an analysis of the structure of the trusts, under U.S. GAAP, we have concluded that we are not the primary beneficiary of the trusts as we do not have power over the trusts’ significant activities. Therefore, we do not consolidate these trusts in our condensed consolidated financial statements.

We account for transfers of financing receivables to these securitization trusts as sales pursuant to ASC 860, Transfers and Servicing, as we have concluded the transferred receivables have been isolated from the transferor (i.e., put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership) and we have surrendered control over the transferred receivables. We have received true-sale-at-law opinions for all of our securitization trust structures and non-consolidation legal opinions for all but one old securitization trust structure that support our conclusion regarding the transferred receivables. When we sell receivables in securitizations, we generally retain minor interests in the form of servicing rights and residual assets, which we refer to as securitization assets.

Gain or loss on the sale of receivables is calculated based on the excess of the proceeds received from the securitization (less any transaction costs) plus any retained interests obtained over the cost basis of the receivables sold. For retained interests, we generally estimate fair value based on the present value of future expected cash flows using our best estimates of the key assumptions of anticipated losses, prepayment rates, and current market discount rates commensurate with the risks involved.

We initially account for all separately recognized servicing assets and servicing liabilities at fair value and subsequently measure such servicing assets and liabilities using the amortization method. Servicing assets and liabilities are amortized in proportion to, and over the period of, estimated net servicing income with servicing income recognized as earned. We assess servicing assets for impairment at each reporting date. If the amortized cost of servicing assets is greater than the estimated fair value, we will recognize an impairment in net income.

Our other retained interest in securitized assets, the residual assets, are classified as available-for-sale securities and carried at fair value on the condensed consolidated balance sheets in Other Assets. We generally do not sell our residual assets. Our residual assets are evaluated for impairment on a quarterly basis. Interest income related to the residual assets is recognized using the effective interest rate method. If there is a change in expected cash flows related to the residual assets, we calculate a new yield based on the current amortized cost of the residual assets and the revised expected cash flows. This yield is used prospectively to recognize interest income.

Cash and Cash Equivalents

Cash and cash equivalents include short-term government securities, certificates of deposit and money market funds, all of which had an original maturity of three months or less at the date of purchase. These securities are carried at their purchase price, which approximates fair value.

Restricted Cash

Restricted cash includes cash and cash equivalents set aside with certain lenders primarily to support deferred funding and other obligations outstanding as of the balance sheet dates. Restricted Cash is reported as part of Other Assets in the condensed consolidated balance sheets.

Variable Interest Entities and Equity Method Investments in Affiliates

We account for our investment in entities that are considered voting or variable interest entities under ASC 810, Consolidation. We perform an ongoing assessment to determine the primary beneficiary of each entity as required by ASC 810. We have established various special purpose entities or securitization trusts for the purpose of securitizing certain financing receivables or other debt investments which are not consolidated in our financial statements as described in Securitization of Receivables above.

Substantially all of the activities of the special purpose entities that are formed for the purpose of holding our financing receivables and investments on our balance sheet are closely associated with our activities. Based on our assessment, we determined that we have power over and receive the benefits of these special purpose entities; hence, we are the primary beneficiary and should consolidate these entities under the provisions of ASC 810.

We have made equity investments in various renewable energy projects. We share in the cash flows and tax attributes according to a negotiated schedule. Our renewable energy projects are typically owned in partnerships structures (using limited liability companies, or LLCs, taxed as partnerships) where we, along with other large institutional investors, if any, receive a stated preferred return consisting of a priority distribution of all or a portion of the project’s cash flows, and in some cases, tax attributes. Once this preferred return is achieved, the partnership “flips” and the company which operates the project receives a larger portion of the cash flows through its interest in the holding company and we, along with the other institutional investors, will have an on-going residual interest.

We made several new equity investments in renewable energy projects in 2016 that, along with our existing investments, are accounted for under the equity method of accounting. Certain of our equity method investments were determined to be VIEs. Our maximum exposure to loss associated with our equity method investments is limited to our recorded value of our investments.

Under the equity method of accounting, the carrying value of our equity method investments is determined based on amounts we invested, adjusted for the equity in earnings or losses of investee allocated based on the limited liability entity agreement, less distributions received. Because the limited liability entity and holding company agreements contain preferences with regard to cash flows from operations, capital events and liquidation, we reflect our share of profits and losses by determining the difference between our “claim on the investee’s book value” at the end and the beginning of the period. This claim is calculated as the amount we would receive (or be obligated to pay) if the investee were to liquidate all of its assets at recorded amounts determined in accordance with U.S. GAAP and distribute the resulting cash to creditors and investors in accordance with their respective priorities. This method is commonly referred to as the hypothetical liquidation at book value method or (“HLBV”). Intra company gains and losses are eliminated for an amount equal to our interest and are reflected in the share in loss from equity method investments in affiliates in the consolidated statements of operations. Cash distributions received from our equity method investments are classified as operating cash flows to the extent of cumulative HLBV earnings. Any additional cash flows are deemed to be returns of the investment and are classified as investing cash flows. We have elected to recognize earnings from these investments one quarter in arrears to allow for the receipt of financial information.

We evaluate the realization of our investment accounted for using the equity method if circumstances indicate that our investment is OTTI. OTTI occurs when the estimated fair value of an investment is below the carrying value and the difference is determined to not be recoverable. This evaluation requires significant judgment regarding, but not limited to, the severity and duration of the impairment; the ability and intent to hold the securities until recovery; financial condition, liquidity, and near-term prospects of the issuer; specific events; and other factors. Based on an evaluation of our equity method investments, we determined that no impairment had occurred during the three or nine months ended September 30, 2016 or 2015.

Derivative Financial Instruments

We utilize derivative financial instruments, primarily interest rate swaps, to manage, or hedge, our interest rate risk exposures associated with new debt issuances, to manage our exposure to fluctuations in interest rates on variable rate debt, and to optimize the mix of our fixed and floating-rate debt. In addition, we use forward-starting interest rate swap contracts to manage a portion of our interest rate exposure for anticipated refinancing of our long-term debts. Our objective is to manage the impact of interest rates on the results of operations and cash flows and the market value of our debt.

The interest rate swaps we use are designated as cash flow hedges and are considered highly effective in reducing our exposure to the interest rate risk that they are designated to hedge. This effectiveness is essential in order to qualify for hedge accounting. Instruments that meet these hedging criteria are formally designated as hedges at the inception of the derivative contract. Derivatives are recorded on the consolidated balance sheet at fair value. If a derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in Accumulated Other Comprehensive Income, net of associated deferred income tax effects, in our Consolidated Statements of Stockholders’ Equity and Comprehensive Income (Loss) and are recognized in the Consolidated Statements of Operations when the hedged item affects earnings. Changes in fair value of the ineffective portions of these hedges are recognized in general and administrative expenses in our Consolidated Statements of Operations. For any derivative instruments not designated as hedging instruments, changes in fair value would be recognized in our Consolidated Statements of Operations in the period that the change occurs. We assess, both at the inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. We do not hold derivatives for trading purposes.

Interest rate swap contracts contain a credit risk that counterparties may be unable to fulfill the terms of the agreement. We attempt to minimize that risk by evaluating the creditworthiness of its counterparties, who are limited to major banks and financial institutions, and do not anticipate nonperformance by the counterparties.

Income Taxes

We elected and qualified to be taxed as a REIT for U.S. federal income tax purposes, commencing with our taxable year ended December 31, 2013. To qualify as a REIT, we must meet on an ongoing basis a number of organizational and operational requirements, including a requirement that we currently distribute at least 90% of our net taxable income, excluding capital gains, to our shareholders. We intend to continue to meet the requirements for qualification as a REIT. As a REIT, we are not subject to U.S. federal corporate income tax on that portion of net income that is currently distributed to our owners. However, our taxable REIT subsidiaries (“TRSs”) will generally be subject to U.S. federal, state, and local income taxes as well as taxes of foreign jurisdictions, if any.

We account for income taxes of our TRSs using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted.

We apply accounting guidance with respect to how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. This guidance requires the accounting and disclosure of tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are “more likely than not” to be sustained by the applicable tax authority. We are required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which includes U.S. federal and certain states. We have no examinations in progress, none are expected at this time, and years 2012 through 2015 are open. As of September 30, 2016 and December 31, 2015, we had no uncertain tax positions. Our policy is to recognize interest expense and penalties related to income tax matters as a component of general and administrative expense. There were no accrued interest and penalties as of September 30, 2016 and December 31, 2015, and no interest and penalties were recognized during the three or nine months ended September 30, 2016 and 2015.

Equity-Based Compensation

At the time of completion of our initial public offering (“IPO”), we adopted our 2013 Equity Incentive Plan (the “2013 Plan”), which provides for grants of stock options, stock appreciation rights, restricted stock units, shares of restricted common stock, phantom shares, dividend equivalent rights, long-term incentive-plan units (“LTIP units”) and other restricted limited partnership units issued by our Operating Partnership and other equity-based awards. From time to time, we may award unvested restricted stock as compensation to members of our senior management team, our independent directors, employees, advisors, consultants and other personnel under our 2013 Plan.

We record compensation expense for stock awards in accordance with ASC 718, Compensation—Stock Compensation. We record compensation expense for unvested shares that vest solely based on service conditions on a straight-line basis over the vesting period based upon the fair market value of the shares on the date of grant. For awards where the vesting is contingent upon achievement of certain performance targets, compensation expense is recorded over the requisite service period (which includes the performance period) based on our estimate of the achievement of the various performance targets. Our share price at the date of grant and actual performance results at the end of the performance period determine the fair value and the number of shares that will ultimately be awarded. The award earned is generally between 0% and 150% of the initial target, depending on the extent to which the performance target are met.

Earnings Per Share

We compute earnings per share of common stock in accordance with ASC 260, Earnings Per Share. Basic earnings per share is calculated by dividing net income attributable to controlling stockholders (after consideration of the earnings allocated to unvested shares of restricted common stock) by the weighted-average number of shares of common stock outstanding during the period excluding the weighted average number of unvested shares of restricted common stock or restricted stock units (“participating securities” as defined in Note 12). Diluted earnings per share is calculated by dividing net income attributable to controlling stockholders by the weighted-average number of shares of common stock outstanding during the period plus other potentially dilutive securities. No adjustment is made for shares that are anti-dilutive during a period.

Segment Reporting

We provide and arrange debt and equity financing for sustainable infrastructure projects and report all of our activities as one business segment.

Recently Issued Accounting Pronouncements

Revenue from Contracts with Customers

In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. The FASB proposed delaying the effective date of the standard by one year and issued a proposal that is intended to clarify and simplify the guidance. The updated standard becomes effective for us on January 1, 2018 and we expect will be first presented in our March 31, 2018, Form 10-Q. We have not yet selected a transition method, and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures.

Consolidation

In February 2015, the FASB issued ASU No. 2015-02 “Consolidation (Topic 810) Amendments to the Consolidation Analysis,” which affects the following areas of the consolidation analysis: limited partnerships and similar entities, evaluation of fees paid to a decision maker or service provider as a variable interest and in determination of the primary beneficiary, effect of related parties on the primary beneficiary determination and for certain investment funds. ASU No. 2015-02 is effective for us for our fiscal year ending December 31, 2016 and interim periods therein. The adoption of this standard did not have a material impact on our consolidated financial position, results of operations and cash flows.

Income Taxes

In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740) – Balance Sheet Classification of Deferred Taxes.” The purpose of the standard is to simplify the presentation of deferred taxes on a classified balance sheet. Under current GAAP, deferred income tax assets and liabilities are separated into current and noncurrent amounts in the balance sheet. The amendments in ASU 2015-17 require that all deferred tax assets and liabilities be classified as noncurrent in the balance sheet. The ASU will be effective for us beginning January 1, 2017, including interim periods in the calendar year 2017, but with early adoption permitted. Since we do not report a classified balance sheet, we do not expect the adoption of ASU 2015-17 to have a material impact on our consolidated financial statements and related disclosures.

Leases

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Changes were made to align lessor accounting with the lessee accounting model and ASU No. 2014-09, “Revenue from Contracts with Customers.” The new lease guidance simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The ASU will be effective for us beginning January 1, 2019. Early application is permitted for all public business entities upon issuance. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Lessees may not apply a full retrospective transition approach. We are currently evaluating the impact of the application of this accounting standard update on our consolidated financial statements and related disclosures.

Share-Based Payments

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting.” Under the new guidance, entities will be required to recognize all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. In addition, the new guidance will allow an employer to repurchase up to the maximum statutory income tax rates in the applicable jurisdictions without triggering liability accounting and allow an entity to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur. The guidance is effective for us beginning after December 15, 2016, and interim periods within those years. Early adoption is permitted in any annual or interim period for which financial statements haven’t been issued or made available for issuance, but all of the guidance must be adopted in the same period. We implemented this standard in the second quarter of 2016. The implementation did not have a material impact on our consolidated financial statements and related disclosures. See Note 11 for further information.

Equity Method Investments

In March 2016, the FASB issued ASU No. 2016-07, “Simplifying the Transition to the Equity Method of Accounting.” The new standard eliminates the requirement for an investor to retroactively apply the equity method when an increase in ownership interest in an investee triggers equity method accounting. It also simplifies in certain areas the accounting for equity method investments. The new standard becomes effective for us in fiscal year ending December 31, 2017 and interim periods therein. The adoption of this standard is not expected to have a material impact on our consolidated financial statements and related disclosures.

Credit Losses

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments (Topic 326).” ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 will replace the “incurred loss” approach under existing guidance with an “expected loss” model for instruments measured at amortized cost, and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as currently required. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We are currently evaluating the impact the adoption of ASU 2016-13 will have on our consolidated financial statements and related disclosures.

Statement of Cash Flows

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 provides guidance on how certain cash receipts and cash payments are presented and classified in the statement of cash flows where the current GAAP treatment is either unclear or there is no specific accounting guidance. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017 and is to be applied using a retrospective transition method to each period presented. The adoption of this standard is not expected to have a material impact on our consolidated financial statements and related disclosures.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

3. Fair Value Measurements

Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The fair value accounting guidance provides a three-level hierarchy for classifying financial instruments. The levels of inputs used to determine the fair value of our financial assets and liabilities carried on the balance sheet at fair value and for those for which only disclosure of fair value is required are characterized in accordance with the fair value hierarchy established by ASC 820, Fair Value Measurements. Where inputs for a financial asset or liability fall in more than one level in the fair value hierarchy, the financial asset or liability is classified in its entirety based on the lowest level input that is significant to the fair value measurement of that financial asset or liability. We use our judgment and consider factors specific to the financial assets and liabilities in determining the significance of an input to the fair value measurements. As of September 30, 2016 and December 31, 2015, only our residual assets (described in Note 5), financing receivables held-for-sale, interest rate swaps and investments available-for-sale, if any, were carried at fair value on the condensed consolidated balance sheets on a recurring basis. The three levels of the fair value hierarchy are described below:

• Level 1—Quoted prices (unadjusted) in active markets that are accessible at the measurement date.

• Level 2—Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

• Level 3—Unobservable inputs are used when little or no market data is available.

Unless otherwise discussed below, fair value is measured using a discounted cash flow model, contractual terms and Level 3 unobservable inputs which consist of base interest rates and spreads over base rates which are based upon market observation and recent comparable transactions. An increase in these unobservable inputs would result in a lower fair value and a decline would result in a higher fair value. The financing receivables held for sale are carried at the lower of cost or market.

	As of September 30, 2016
	Fair Value		Carrying Value		Level
	(dollars in millions)
Assets
Financing receivables	$	914	$	865		Level 3
Financing receivables held-for-sale		7		7		Level 3
Investments available-for-sale(1)		50		50		Level 3
Liabilities
Credit facilities	$	356	$	356		Level 3
Nonrecourse debt(2)		649		624		Level 3
Derivative liabilities		6		6		Level 2

(1) The amortized cost of our investments available-for-sale as of September 30, 2016, was $51 million.

(2) Fair value and carrying value of nonrecourse debt excludes unamortized debt issuance costs.

	As of December 31, 2015
	Fair Value		Carrying Value		Level
	(dollars in millions)
Assets
Financing receivables	$	806	$	784		Level 3
Financing receivables held-for-sale		61		60		Level 3
Investments available-for-sale(1)		29		29		Level 3
Liabilities
Credit facility	$	247	$	247		Level 3
Nonrecourse debt(2)		690		680		Level 3
Derivative liabilities		1		1		Level 2

(1) The amortized cost of our investments available-for-sale as of December 31, 2015, was $31 million.

(2) Fair value and carrying value of nonrecourse debt excludes unamortized debt issuance costs.

Investments

We carry our investments in debt securities at fair value on our balance sheet as investments available-for-sale. The following table reconciles the beginning and ending balances for our Level 3 investments that are carried at fair value on a recurring basis:

	For the three months ended September 30,					For the nine months ended September 30,
	2016		2015			2016			2015
	(dollars in millions)
Balance, beginning of period	$	48	$	28		$	29		$	27
Purchases of investments available-for-sale		2		1			34			21
Payments on investments available-for-sale		—		—			(1	)		(9	)
Sale of investments available-for-sale		—		—			(14	)		(11	)
Gains on investments available-for-sale recorded in earnings		—		—			1			1
Gains (losses) on investments available-for-sale recorded in OCI(1)		—		(1	)		1			(1	)
Balance, end of period	$	50	$	28		$	50		$	28

(1) As of September 30, 2016, approximately $11 million of investment grade rated debt that we held for more than 12 months was in an unrealized loss position due to interest rate movements. As of September 30, 2016, we held no other securities in an unrealized loss position.

For investments held at fair value, we used a range of interest rate spreads of approximately 1% to 5% based upon comparable transactions.

As of December 31, 2015, we held a $13 million senior secured debt investment, along with a large financial institution which held the remaining approximately $45 million in outstanding debt securities, in an operating wind project that was being foreclosed upon and expected to be sold. The foreclosure and sale was completed in 2016 and we recovered the full value of our debt investment and recognized a gain of $0.8 million.

Interest Rate Swap Agreements

The fair values of the derivative financial instruments are determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. We have determined that the significant inputs, such as interest yield curves and discount rates, used to value our derivatives fall within Level 2 of the fair value hierarchy and that the credit valuation adjustments associated with our counterparties and our own credit risk utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of our or our counterparties default. As of September 30, 2016 and December 31, 2015, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of our derivatives. As a result, we determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. See Note 8 for the estimated fair value of our derivative financial instruments. The fair values of the derivative financial instruments are included in the accounts payable, accrued expenses and other line item in the condensed consolidated balance sheets.

Non-recurring Fair Value Measurements

Our financial statements may include non-recurring fair value measurements related to acquisitions and non-monetary transactions, if any. Assets acquired in a business combination are recorded at their fair value. We may use third party valuation firms to assist us with developing our estimates of fair value.

Concentration of Credit Risk

Financing receivables, investments and leases consist primarily of U.S. federal government-backed receivables, investment grade state and local government receivables and receivables from various sustainable infrastructure projects and do not, in our view, represent a significant concentration of credit risk. See Note 6 for an analysis by type of obligor. As described above, we do not believe we have a significant credit exposure to our interest rate swap providers. We had cash deposits that are subject to credit risk as shown below:

	September 30, 2016		December 31, 2015
	(dollars in millions)
Cash deposits	$	73	$	43
Restricted cash deposits (included in Other assets)		25		36
Total cash deposits	$	98	$	79
Amount of cash deposits in excess of amounts federally insured	$	94	$	75

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Non-Controlling Interest

9 Months Ended

Sep. 30, 2016

Noncontrolling Interest [Abstract]

Non-Controlling Interest

4. Non-Controlling Interest

Non-Controlling Interest in Consolidated Entities

Units of limited partnership interests in the Operating Partnership (“OP units”) that are owned by limited partners other than the Company are included in non-controlling interest on our condensed consolidated balance sheets. The non-controlling interest holders are generally allocated their pro rata share of income, other comprehensive income and equity transactions. The outstanding OP units held by outside limited partners represents less than 1% of our outstanding OP units and are redeemable for cash, or at our option, for a like number of shares of our common stock. No OP units were exchanged for shares of common stock during the nine months ended September 30, 2016.

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Securitization of Receivables

9 Months Ended

Sep. 30, 2016

Transfers and Servicing [Abstract]

Securitization of Receivables

5. Securitization of Receivables

The following summarizes certain transactions with our securitization trusts:

	For the Nine Months Ended September 30,
	2016		2015
	(dollars in millions)
Gains on securitizations	$	13	$	6
Purchase of receivables securitized	$	394	$	219
Proceeds from securitizations	$	407	$	225
Residual and servicing assets included in Other Assets	$	18	$	9
Cash received from residual and servicing assets	$	2	$	1

In connection with securitization transactions, we typically retain servicing responsibilities and residual assets. In certain instances, we receive annual servicing fees of up to 0.20% of the outstanding balance. We may periodically make servicer advances, which are subject to credit risk. Included in other assets in our condensed consolidated balance sheets are our servicing assets at amortized cost, our residual assets at fair value, and our servicing advances at cost, if any. Our residual assets are subordinate to investors’ interests, and their values are subject to credit, prepayment and interest rate risks on the transferred financial assets. The investors and the securitization trusts have no recourse to our other assets for failure of debtors to pay when due. In computing gains and losses on securitizations, we use the same discount rates we use for the fair value calculation of residual assets, which are determined based on a review of comparable market transactions. Depending on the nature of the transaction risks, the discount rate ranged from 4% to 7%.

As of September 30, 2016 and December 31, 2015, our managed assets totaled $3.6 billion and $3.2 billion, of which $2.2 billion and $1.8 billion were securitized assets held in unconsolidated securitization trusts. There were no securitization credit losses during the three or nine months ended September 30, 2016 or 2015, and no material securitization delinquencies as of September 30, 2016 and December 31, 2015. The securitized assets consist of financing receivables from contracts for the installation of energy efficiency and other technologies in facilities owned by, or operated for or by, the federal government where the ultimate obligor is the U.S. federal government. The contracts may have guarantees of energy savings from third party service providers, the majority of which are entities rated investment grade by an independent rating agency. Based on the nature of the receivables and experience to date, we do not currently expect to incur any credit losses on the receivables sold.

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Our Portfolio

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Our Portfolio

6. Our Portfolio

As of September 30, 2016, our Portfolio included approximately $1.4 billion of financing receivables, investments, real estate and equity method investments on our balance sheet. The financing receivables and investments are typically collateralized by contractually committed debt obligations of government entities or private high credit quality obligors and are often supported by additional forms of credit enhancement, including security interests and supplier guaranties. The real estate is typically land and related lease intangibles for long-term leases to wind and solar projects with high credit quality obligors. The equity method investments represent our minority equity investments in renewable energy projects.

The following is an analysis of our Portfolio by type of obligor and credit quality as of September 30, 2016:

	Investment Grade
	Government(1)			Commercial Investment Grade(2)			Commercial Non- Investment Grade (3)			Subtotal, Debt and Real Estate			Equity Method Investments(4)		Total
	(dollars in millions)
Financing receivables	$	380		$	464		$	21		$	865		$	—	$	865
Financing receivables held-for-sale		7			—			—			7			—		7
Investments		33			17			—			50			—		50
Real estate(5)					166			—			166			—		166
Equity method investments		—			—			—			—			324		324
Total	$	420		$	647		$	21		$	1,088		$	324	$	1,412
% of Debt and Real Estate Portfolio		39	%		59	%		2	%		100	%		N/A		N/A
Average Remaining Balance(6)	$	10		$	10		$	11		$	10		$	19	$	11

(1) Transactions where the ultimate obligor is the U.S. federal government or state or local governments where the obligors are rated investment grade (either by an independent rating agency or based upon our internal credit analysis). This amount includes $230 million of U.S. federal government transactions and $190 million of transactions where the ultimate obligors are state or local governments. Transactions may have guaranties of energy savings from third party service providers, the majority of which are entities rated investment grade by an independent rating agency.

(2) Transactions where the projects or the ultimate obligors are commercial entities, including institutions such as hospitals or universities, that have been rated investment grade (either by an independent rating agency or based on our internal credit analysis). Of this total, $11 million of the transactions have been rated investment grade by an independent rating agency. Commercial investment grade financing receivables include $260 million of internally rated residential solar loans made on a nonrecourse basis to special purpose subsidiaries of SunPower Corporation, for which we rely on certain limited indemnities, warranties and other obligations of SunPower Corporation or its other subsidiaries.

(3) Transactions where the projects or the ultimate obligors are commercial entities, including institutions such as hospitals or universities, that have ratings below investment grade (either by an independent rating agency or using our internal credit analysis).

(4) Consists of ownership interests in operating renewable energy projects.

(5) Includes the real estate and the lease intangible assets through which we receive scheduled lease payments, typically under long-term triple net lease agreements.

(6) Excludes 88 transactions each with outstanding balances that are less than $1 million and that in the aggregate total $31 million.

The components of financing receivables as of September 30, 2016 and December 31, 2015, were as follows:

	September 30, 2016			December 31, 2015
	(dollars in millions)
Financing receivables
Financing or minimum lease payments(1)	$	1,122		$	1,025
Unearned interest income		(255	)		(238	)
Allowance for credit losses		—			—
Unearned fee income, net of initial direct costs		(2	)		(3	)
Financing receivables(1)	$	865		$	784

(1) Excludes $7 million and $60 million in financing receivables held-for-sale as of September 30, 2016 and December 31, 2015, respectively.

In accordance with the terms of certain purchase agreements related to financing receivables or other investments, payments of the purchase price are scheduled to be made over time, generally within 12 months of entering into the transaction, and as a result, we have recorded deferred funding obligations of $64 million and $108 million as of September 30, 2016 and December 31, 2015, respectively. Approximately $41 million of those investments were pledged as collateral against these obligations.

The following table provides a summary of our anticipated maturity dates of our financing receivables and investments and the weighted average yield for each range of maturities as of September 30, 2016:

	Total			Less than 1 year			1-5 years			5-10 years			More than 10 years
	(dollars in millions)
Financing Receivables (1)
Maturities by period	$	865		$	1		$	48		$	80		$	736
Weighted average yield by period		5.4	%		4.0	%		6.4	%		5.0	%		5.3	%
Investments
Maturities by period	$	50		$	—		$	—		$	1		$	49
Weighted average yield by period		3.9	%		—	%		—	%		4.7	%		4.0	%

(1) Excludes financing receivables held-for-sale of $7 million.

Our real estate is leased to renewable energy projects, typically under long-term triple net leases with expiration dates that range between the years 2033 and 2051 under the initial terms and 2047 and 2080 if all extensions are exercised. The components of our real estate portfolio as of September 30, 2016 and December 31, 2015, were as follows:

	September 30, 2016			December 31, 2015
	(dollars in millions)
Real Estate
Land	$	135		$	129
Real estate related intangibles		33			28
Accumulated amortization of real estate intangibles		(2	)		(1	)
Real Estate	$	166		$	156

There are conservation easement agreements covering several of our properties that limit the use of the property upon expiration of the respective leases. The real estate related intangible assets are amortized on a straight-line basis over the contracted lease term.

As of September 30, 2016, the future amortization expense of these intangible assets and the future minimum rental income payments under our land lease agreements are as follows:

Year Ending December 31,	Future Amortization Expense		Minimum Rental Income Payments
	(dollars in millions)
From October 1, 2016 to December 31, 2016	$	—	$	2
2017		1		10
2018		1		11
2019		1		11
2020		1		10
2021		1		11
Thereafter		26		292
Total	$	31	$	347

We have made minority interest investments in a number of renewable energy projects operated by renewable energy companies that we account for as equity method investments. In June 2016, we acquired interests in several limited liability companies that collectively own approximately 43 megawatts of operating distributed commercial, industrial and residential solar projects. We receive a priority distribution from these projects until negotiated financial targets are achieved at which time the partnerships will flip and the company that operates the project will receive a larger portion of the cash flows and we will have an on-going residual interest. We financed approximately $33 million of the approximately $42 million purchase price with the seller through a two-year non-interest bearing loan secured by our ownership interest in the limited liability companies. We have recorded our purchase obligation to the seller as a deferred funding obligation on our balance sheet and have reflected an imputed interest expense on the outstanding balance on the investment interest expense line of our income statement. As of September 30, 2016, we held equity method investments of approximately $324 million in these renewable energy projects.

See Note 2 for our accounting treatment of these investments and Note 13 for the aggregate financial position and results of operations of the significant holding companies.

We had no financing receivables, investments or leases that were impaired or on nonaccrual status as of September 30, 2016 or December 31, 2015. There was no provision for credit losses for the three or nine months ended September 30, 2016 or 2015. We did not have any loan modifications that qualify as trouble debt restructurings for the three or nine months ended September 30, 2016 or 2015.

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Credit Facilities

9 Months Ended

Sep. 30, 2016

Text Block [Abstract]

Credit Facilities

7. Credit Facilities

Revolver

We have a senior secured revolving credit facility with an outstanding balance of $307 million. The facility provides for total maximum advances of $1.5 billion with the aggregate amount outstanding at any point in time of $500 million and which consists of two components, the G&I Facility and the PF Facility. The “G&I Facility” can be used to leverage certain qualifying government and institutional financings entered into by us and the “PF Facility” can be used to leverage certain qualifying project financings entered into by us.

The facility was originally entered into in 2013 and has been amended a number of times, including in January 2016. The effect of the various amendments has been to increase the size, flexibility and allocation of the facility and extend the termination date to July 19, 2019. The limit of borrowing at any point in time and the total maximum advances are summarized below:

	Limit of Borrowing at any point in time				Maximum Total Advances
As of	G&I Facility		PF Facility		G&I Facility		PF Facility
	(dollars in millions)
December 31, 2014	$	125	$	325	$	375	$	975
December 31, 2015	$	150	$	350	$	450	$	1,050
January 2016	$	250	$	250	$	600	$	900

Loans under the G&I Facility bear interest at a rate equal to the London Interbank Offered Rate (“LIBOR”) plus 1.5% or, under certain circumstances, 1.5% plus the highest of (i) the Federal Funds Rate plus 0.5%, (ii) the rate of interest publicly announced by Bank of America from time to time as its “prime rate,” and (iii) LIBOR plus 1.0%. Loans under the PF Facility bear interest at a rate equal to LIBOR plus 2.5%, or an agreed upon margin, or, under certain circumstances, 2.5% plus the highest of (i) the Federal Funds Rate plus 0.5%, (ii) the rate of interest publicly announced by Bank of America from time to time as its “prime rate,” and (iii) LIBOR plus 1.0%. Under the PF Facility, we also have the option to borrow at a fixed rate of interest until the expiration of the credit facility in July 2019. The fixed rate is determined by agreement with the Administrative Agent and is based on the prevailing US SWAP rate of an equivalent term to the average-life of the fixed rate portion of the borrowing plus an agreed upon margin. The loans are made through wholly-owned special purpose subsidiaries (the “Borrowers”) and we have guaranteed the obligations of the Borrowers under the credit facility pursuant to (x) a Continuing Guaranty, dated July 19, 2013, and (y) a Limited Guaranty, dated July 19, 2013, both as amended and restated.

Any financing we propose to be included in the borrowing base as collateral under the facility is subject to the approval of the administrative agent in its sole discretion and the payment of a placement fee. We may, with the consent of the administrative agent, borrow against new projects before such projects become Approved Financings (as defined in the PF Facility loan agreement) but after they have been pledged as collateral. The amount eligible to be drawn under the facility for purposes of financing such investments will be based on a discount to the value of each investment or an applicable valuation percentage. Under the G&I Facility, the applicable valuation percentage for non-delinquent investments is 85% in the case of a U.S. federal government obligor, 80% in the case of an institutional obligor or a state and local obligor, and with respect to other obligors or in certain circumstances, such other percentage as the administrative agent may prescribe. Under the PF Facility, the applicable valuation percentage is 67% or such other percentage as the administrative agent may prescribe. The sum of approved financings after taking into account the valuation percentages and any changes in the valuation of the financings in accordance with the loan agreements determines the borrowing capacity, subject to the overall facility limits described above.

The following table provides additional detail on our credit facility as of September 30, 2016 and December 31, 2015:

	September 30, 2016			December 31, 2015
	(dollars in millions)
Outstanding balance	$	307		$	247
Value of collateral pledged to credit facility	$	423		$	356
Weighted average short-term borrowing rate		2.4	%		2.3	%

We incurred approximately $13 million of costs associated with the credit facility that have been capitalized (included in other assets on the condensed consolidated balance sheets) and are being amortized on a straight-line basis over the term of the Loan Agreements. On each monthly payment date, the Borrowers shall also pay to the administrative agent, for the benefit of the lenders, certain availability fees for each Loan Agreement equal to 0.50%, divided by 360, multiplied by the excess of the available borrowing capacity under each component of the credit facility over the actual amount borrowed under such component.

The credit facility contains terms, conditions, covenants, and representations and warranties that are customary and typical for a transaction of this nature, including various affirmative and negative covenants, and limitations on the incurrence of liens and indebtedness, investments, fundamental organizational changes, dispositions, changes in the nature of business, transactions with affiliates, use of proceeds and stock repurchases.

The credit facility also includes customary events of default, including the existence of a default in more than 50% of underlying financings. The occurrence of an event of default may result in termination of the credit facility, acceleration of amounts due under the credit facility, and accrual of default interest at a rate of LIBOR plus 2.50% in the case of the G&I Facility and at a rate of LIBOR plus 5.00% in the case of the PF Facility.

We were in compliance with the required financial covenants described below at each quarterly reporting date that such covenants were applicable:

Covenant	Covenant Threshold
Minimum Liquidity (defined as available borrowings under the Loan Agreements plus unrestricted cash divided by actual borrowings) of greater than:		5%
12 month rolling Net Interest Margin of greater than:		zero
Maximum Debt to Equity Ratio of less than: (1)		4 to 1

⁽¹⁾ Debt is defined as Total Indebtedness excluding accounts payable and accrued expenses and nonrecourse debt.

Term Loan

In September 2016, we borrowed $50 million from a financial institution on a short-term basis. This recourse credit facility matures on December 30, 2016 and can be repaid at anytime. It bears interest at a fixed rate of 4.8% which increases to 6.8% on November 14, 2016 and is also secured by the equity of our special purpose subsidiary that holds $84 million of residential solar financing receivables. The credit facility contains terms, conditions, covenants, and representations and warranties that are customary and typical for a transaction of this nature, including various affirmative and negative covenants, and limitations on the incurrence of liens and indebtedness, investments, fundamental organizational changes, dispositions, changes in the nature of business, transactions with affiliates, use of proceeds and stock repurchases.

This credit facility also includes customary events of default. The occurrence of an event of default may result in termination of the credit facility, acceleration of amounts due under the credit facility, and accrual of default interest at the fixed rate plus 2.0%. We recorded $0.5 million of debt issuance costs which are netted against the outstanding balance.

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Nonrecourse Debt

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Nonrecourse Debt

8. Nonrecourse Debt

We have outstanding the following asset-backed nonrecourse debt and bank loans (dollars in millions):

	Outstanding Balance as of													Value of Assets Pledged as of
	September 30, 2016			December 31, 2015			Interest Rate			Maturity Date		Anticipated Balance at Maturity		September 30, 2016		December 31, 2015		Description of Assets Pledged
HASI Sustainable Yield Bond 2013-1	$	77		$	83			2.79	%		December 2019	$	57	$	93	$	99	Financing receivables
ABS Loan Agreement	$	92		$	102			5.74	%		September 2021	$	17	$	100	$	117	Equity interest in Strong Upwind Holdings I, LLC
HASI Sustainable Yield Bond 2015-1	$	98		$	100			4.28	%		October 2034	$	—	$	138	$	139	Financing receivables, real estate and real estate intangibles
HASI SYB Loan Agreement 2015-1	$	76		$	90			4.34	% (1)		December 2021	$	—	$	100	$	117	Equity interest in Strong Upwind Holdings II and III, LLC, related interest rate swap
HASI SYB Loan Agreement 2015-2	$	41		$	42			4.92	% (1)		December 2023	$	—	$	70	$	71	Equity interest in Buckeye Wind Energy Class B Holdings LLC, related interest rate swap
HASI SYB Loan Agreement 2015-3	$	152		$	162			4.92	%		December 2020	$	132	$	176	$	175	Residential Solar Financing receivables
Other nonrecourse debt (2)	$	88		$	101			2.26	% - 7.45%		2017 to 2032	$	—	$	86	$	97	Financing receivables
Debt issuance costs	$	(14	)	$	(16	)
Nonrecourse debt	$	610		$	664

(1) Interest rate represents the current period’s LIBOR based rate plus the spread. Also see the interest rate swap contracts shown in the table below.

(2) Other nonrecourse debt consists of various debt agreements used to finance certain of our financing receivables for the term of the financing receivables. Debt service payment requirements, in a majority of cases, are equal to or less than the cash flows received from the underlying financing receivables.

We have pledged the ownership interest in the relevant assets or the relevant assets themselves to bankruptcy remote entities as security for the nonrecourse debt. The assets and credit of these entities are not available to satisfy any of our other debts and obligations, except as set forth in the debt agreements. The debtors can only look to the cash flows of the pledged assets to satisfy the debt and we are not liable for nonpayment of such cash flows. The debt agreements contain terms, conditions, covenants, and representations and warranties that are customary and typical for a transaction of this nature, including limitations on the incurrence of liens and indebtedness, investments, fundamental organizational changes, dispositions, changes in the nature of business, transactions with affiliates, use of proceeds and stock repurchases. The agreements also include customary events of default, the occurrence of which may result in termination of the agreements, acceleration of amounts due, and accrual of default interest. We typically act as servicer for the debt transactions.

We have guaranteed the performance of the representations and warranties and other obligations of certain of our subsidiaries under certain of the debt agreements and provided an indemnity against certain losses from “bad acts” of such subsidiaries including fraud, failure to disclose a material fact, theft, misappropriation, voluntary bankruptcy or unauthorized transfers. In the case of the debt secured by our renewable energy equity interests, we have also guaranteed the compliance of our subsidiaries with certain tax matters and certain obligations if certain of our joint venture partners exercise their right to withdraw from our partnerships.

The HASI Sustainable Yield Bond (“HASI SYB”) 2015-1 consists of two notes, (i) $101 million in aggregate principal amount of 4.28% HASI SYB 2015-1A, Class A Bonds (the “Class A Bonds”) and (ii) $18 million in aggregate principal amount of 5.0% HASI SYB 2015-1B, Class B Bonds (the “Class B Bonds”), both with an anticipated repayment date in October 2034. The Class A Bonds rank senior to the Class B Bonds in priority of payment. We retained the Class B Bonds. The other loan and debt transactions were negotiated with, and held by, commercial banks, including one loan agreement that has a corporate financial subsidiary as a co-lender.

In connection with several of our nonrecourse debt borrowings, we have entered into the following interest rate swaps that are designated as cash flow hedges (dollars in millions):

						Notional Value as of				Fair Value as of
	Base Rate		Hedged Rate			September 30, 2016		December 31, 2015		September 30, 2016			December 31, 2015			Term
HASI SYB Loan Agreement 2015-1		3 month Libor		1.55	%	$	70	$	81	$	(0.8	)	$	(0.3	)	December 2015 to September 2021
HASI SYB Loan Agreement 2015-2		3 month Libor		1.52	%	$	37	$	38	$	(0.4	)	$	(0.1	)	December 2015 to December 2018
HASI SYB Loan Agreement 2015-2		3 month Libor		2.55	%	$	29	$	29	$	(1.1	)	$	(0.2	)	December 2018 to December 2024
HASI SYB Loan Agreement 2015-3		1 month Libor		2.34	%	$	119	$	—	$	(3.9	)	$	—		November 2020 to August 2028
Total						$	255	$	148	$	(6.2	)	$	(0.6	)

The total fair value of our hedges relating to interest rate hedges that are effective in offsetting variable cash flows is reflected as unrealized losses in accumulated other comprehensive income and in Accounts payable, accrued expenses and other in the accompanying condensed consolidated balance sheets. As of September 30, 2016 and December 31, 2015, all of our derivatives were designated as hedging instruments and there was no ineffectiveness recorded on our designated hedges and no portion of the Accumulated other comprehensive income, net of associated deferred income tax effects, related to our interest rate hedges was reclassified into interest expense.

The next 12-months of stated minimum maturities of nonrecourse debt are as follows:

As of September 30,	(dollars in millions)
2016	$	49
2017		40
2018		38
2019		95
2020		164
Thereafter		238
	$	624
Deferred financing costs, net		(14	)
Total nonrecourse debt	$	610

The stated minimum maturities of nonrecourse debt above include only the mandatory minimum principal payments. To the extent there are additional cash flows received from Strong Upwind Holdings II, LLC, Strong Upwind Holdings III, LLC or Buckeye Wind Energy Class B Holdings LLC, these additional cash flows are required to be used to make additional principal payments against the respective HASI SYB Loan Agreement 2015-1 and HASI SYB Loan Agreement 2015-2 notes.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

Litigation

The nature of our operations exposes us to the risk of claims and litigation in the normal course of our business. Other than non-material litigation arising out of the ordinary course of business, we are not currently subject to any legal proceedings that are probable of having a material adverse effect on our financial position, results of operations or cash flows.

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Income Tax

9 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

Income Tax

10. Income Tax

We recorded a tax expense of less than $0.1 million for the three and nine months ended September 30, 2016 and 2015. Our income tax expense was determined using a federal rate of 35% and a combined state rate, net of federal benefit, of 5%.

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Equity

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Equity

11. Equity

Dividends and Distributions

Our board of directors declared the following dividends in 2015 and 2016:

Announced Date	Record Date	Pay Date	Amount per share
3/17/15	3/30/15	4/9/15	$	0.26
6/16/15	6/30/15	7/9/15	$	0.26
9/16/15	9/30/15	10/8/15	$	0.26
12/15/15	12/30/15	1/7/16	$	0.30
3/15/16	3/30/16	4/7/16	$	0.30
6/07/16	7/06/16	7/14/16	$	0.30
9/15/16	10/05/16	10/13/16	$	0.30

We have an effective shelf registration statement registering the potential offer and sale of up to $500 million of any combination of our common stock, preferred stock, depositary shares and warrants and rights (collectively referred to as the “securities”). We may offer the securities directly, through agents, or to or through underwriters by means of ordinary brokers’ transactions on the NYSE or otherwise at market prices prevailing at the time of sale or at negotiated prices and may include “at the market” (“ATM”) offerings or sales “at the market,” to or through a market maker or into an existing trading market on an exchange or otherwise. We completed the following public offerings and ATM offerings of our common stock in 2015 and 2016:

Closing Date	Common Stock Offerings	Shares Issued1		Price Per Share			Net Proceeds 2
		(amounts in millions, except per share amounts)
5/4/15	Public Offering		4.60	$	18.50	3	$	82
10/19/15	Public Offering		5.75	$	18.00	3	$	99
6/21/16	Public Offering		4.60	$	19.78	4	$	91
5/9/16 to 6/30/16	ATM		0.065	$	20.31	5	$	1

¹ Includes shares issued in connection with the exercise of the underwriters’ option to purchase additional shares.

² Net proceeds from the offerings is shown after deducting underwriting discounts, commissions and other offering costs.

³  Represents the public offering price per share.

⁴  Represents the price per share at which the underwriters in our public offerings purchased shares from our company.

⁵  Represents the average price per share at which investors in our ATM offerings purchased shares from our company.

Awards of Shares of Restricted Common Stock under our 2013 Plan

We recognize equity-based compensation expense as described in Note 2 and have issued both awards with service conditions and awards with both service and performance conditions. During the nine months ended September 30, 2016, our board of directors awarded employees and directors 367,753 shares of restricted common stock that vest in 2016 to 2019 and 291,000 shares of restricted common stock to certain employees that vest upon the achievement of certain performance targets. As of September 30, 2016, we have concluded that it is probable that the performance conditions will be met.

For the three and nine months ended September 30, 2016, we recorded $3 million and $7 million, respectively, of equity-based compensation expense as compared to $3 million and $8 million, respectively, for the three and nine months ended September 30, 2015. The total unrecognized compensation expense related to awards of shares of restricted common stock was approximately $12 million as of September 30, 2016, that is expected to be recognized over a weighted-average term of approximately two years. As part of the implementation of ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting,” we will recognize forfeitures when they occur as opposed to the previous requirement under which we reduced equity-based compensation expense for an estimated forfeiture rate of up to 5%. Expenses recognized year to date, and the adjustment to retained earnings for the equity-based compensation expense previously recognized, from the adoption of this change was approximately $1 million.

A summary of the unvested shares of restricted common stock that have been issued is as follows:

	Restricted Shares of Common Stock			Weighted Average Share Price		Value (in millions)
Balance — December 31, 2014		964,820		$	13.41	$	12.9
Granted		586,648			17.29		10.2
Vested		(285,289	)		13.61		(3.9	)
Forfeited		(18,110	)		15.54		(0.3	)
Balance — December 31, 2015		1,248,069		$	15.16	$	18.9
Granted		658,753			18.62		12.3
Vested		(572,174	)		13.79		(7.9	)
Forfeited		(11,188	)		17.25		(0.2	)
Ending Balance — September 30, 2016		1,323,460		$	17.46	$	23.1

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Earnings per Share of Common Stock

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Earnings per Share of Common Stock

12. Earnings per Share of Common Stock

Both the net income or loss attributable to the non-controlling OP units and the non-controlling limited partners’ outstanding OP units have been excluded from net income or loss and the diluted earnings per share calculation attributable to common stockholders.

Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method. Any shares of common stock which, if included in the diluted earnings per share calculation, would have an anti-dilutive effect have been excluded from the diluted earnings per share calculation.

The computation of basic and diluted earnings per common share is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
Numerator:	2016			2015			2016			2015
	(in millions, except share and per share data)
Net income attributable to controlling shareholders and participating securities	$	3.3		$	2.1		$	10.2		$	5.7
Less: Dividends paid on participating securities		(0.4	)		(0.3	)		(1.3	)		(1.0	)
Undistributed earnings attributable to participating securities		—			—			—			—
Net income attributable to controlling shareholders	$	2.9		$	1.8		$	8.9		$	4.7
Denominator:
Weighted-average number of common shares — basic		41,988,036			31,221,982			38,924,977			29,046,742
Weighted-average number of common shares — diluted		41,988,036			31,221,982			38,924,977			29,046,742
Basic earnings per common share	$	0.07		$	0.06		$	0.23		$	0.16
Diluted earnings per common share	$	0.07		$	0.06		$	0.23		$	0.16
Other Information:
Weighted-average number of OP units		284,992			284,992			284,992			298,218
Unvested restricted common stock outstanding								1,323,460			1,297,584

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Equity Method Investments in Affiliate

9 Months Ended

Sep. 30, 2016

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments in Affiliate

13. Equity Method Investments in Affiliate

As described in Notes 1 and 2, we have noncontrolling equity investments in entities that own minority interests in renewable energy projects. We recognized income of $1.3 million and $2.7 million during the three and nine months ended September 30, 2016, respectively, from our equity method investments, as compared to a income of $0.2 million and a loss of $0.2 million during the three and nine months ended September 30, 2015, respectively.

The following is a summary of the consolidated financial position and results of operations of the significant holding companies, accounted for using the equity method:

	As of June 30, 2016			As of December 31, 2015
	(dollars in millions, unaudited)
Current Assets	$	57		$	72
Total Assets	$	1,651		$	1,724
Current Liabilities	$	18		$	18
Total Liabilities	$	68		$	68
Members’ Equity	$	1,583		$	1,656
	For the six months ended June 30,
	2016			2015
	(dollars in millions, unaudited)
Revenue	$	66		$	77
Income from Continuing Operations	$	(5	)	$	21
Net Income	$	(5	)	$	21

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The condensed consolidated financial statements reflect all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the financial position, results of operations, comprehensive income and cash flows for the periods presented. The preparation of financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and such differences could be material. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the entire year. Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted. Certain amounts in the prior year have been reclassified to conform to the current year presentation, including the format of the revenue section of the income statement to include a calculation of Total Revenue.

The condensed consolidated financial statements include the accounts of the Company and its controlled subsidiaries, including the Operating Partnership. All significant intercompany transactions and balances have been eliminated in consolidation.

Following the guidance for non-controlling interests in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation, references in this report to our earnings per share and our net income and shareholders’ equity attributable to common shareholders do not include amounts attributable to non-controlling interests.

Financing Receivables

Financing Receivables

Financing receivables include financing energy efficiency and renewable energy project loans, receivables and direct financing leases.

Unless otherwise noted, we generally have the ability and intent to hold our financing receivables for the foreseeable future and thus they are classified as held for investment. Our ability and intent to hold certain financing receivables may change from time to time depending on a number of factors, including economic, liquidity and capital market conditions. The carrying value of financing receivables held for investment represents the present value of the note, lease or other payments, net of any unearned fee income, which is recognized as income over the term of the note or lease using the effective interest method. Financing receivables that are held for investment are carried, unless deemed impaired, at cost, net of any unamortized acquisition premiums or discounts and include origination and acquisition costs, as applicable. Financing receivables that we intend to sell in the short-term are classified as held-for-sale and are carried at the lower of amortized cost or fair value on our balance sheet. The net purchases and proceeds from these sales of our held-for-sale financing receivables are recorded as an operating activity in our statement of cash flows based on our intent at the time of purchase. We may secure nonrecourse debt with the proceeds from our financing receivables. We evaluate any modifications of financing receivables to determine whether the modification is a minor modification in accordance with the guidance in ASC 310, Receivables.

We evaluate our financing receivables for potential delinquency or impairment on at least a quarterly basis and more frequently when economic or other conditions warrant such an evaluation. When a financing receivable becomes 90 days or more past due, and if we otherwise do not expect the debtor to be able to service all of its debt or other obligations, we will generally consider the financing receivable delinquent or impaired and place the financing receivable on non-accrual status and cease recognizing income from that financing receivable until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a financing receivable’s status significantly improves regarding the debtor’s ability to service the debt or other obligations, we will remove it from non-accrual status.

A financing receivable is also considered impaired as of the date when, based on current information and events, it is determined that it is probable that we will be unable to collect all amounts due in accordance with the original contracted terms. Many of our financing receivables are secured by energy efficiency and renewable energy infrastructure projects. Accordingly, we regularly evaluate the extent and impact of any credit deterioration associated with the performance and value of the underlying project, as well as the financial and operating capability of the borrower, its sponsors or the obligor as well as any guarantors. We consider a number of qualitative and quantitative factors in our assessment, including, as appropriate, a project’s operating results, loan-to-value ratios and any cash reserves, the ability of expected cash from operations to cover the cash flow requirements currently and into the future, key terms of the transaction, the ability of the borrower to refinance the transaction, other credit support from the sponsor or guarantor and the project’s collateral value. In addition, we consider the overall economic environment, the sustainable infrastructure sector, the effect of local, industry, and broader economic factors, the impact of any variation in weather and the historical and anticipated trends in interest rates, defaults and loss severities for similar transactions.

If a financing receivable is considered to be impaired, we record an allowance to reduce the carrying value of the financing receivable to the present value of expected future cash flows discounted at the financing receivable’s contractual effective rate or the amount realizable from other contractual terms such as the currently estimated fair market value of the collateral less estimated selling costs, if repayment is expected solely from the collateral. We charge off financing receivables against the allowance when we determine the unpaid principal balance is uncollectible, net of recovered amounts.

Investments

Investments

Investments include debt securities that meet the criteria of ASC 320, Investments—Debt and Equity Securities. We have designated our debt securities as available-for-sale and carry these securities at fair value on our balance sheet. Unrealized gains and losses, to the extent not considered other than temporary impairment (“OTTI”), on available-for-sale debt securities are recorded as a component of accumulated other comprehensive income (“OCI”) in equity on our balance sheet.

We evaluate our investments for OTTI on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Our OTTI assessment is a subjective process requiring the use of judgments and assumptions. Accordingly, we regularly evaluate the extent and impact of any credit deterioration associated with the financial and operating performance and value of the underlying project. We consider a number of qualitative and quantitative factors in our assessment. We first consider the current fair value of the security and the duration of any unrealized loss. Other factors considered include changes in the credit rating, performance of the underlying project, key terms of the transaction, the value of any collateral and any support provided by the sponsor or guarantor.

To the extent that we have identified an OTTI for a security and intend to hold the investment to maturity and we do not expect that we will be required to sell the security prior to recovery of the amortized cost basis, we recognize only the credit component of OTTI in earnings. We determine the credit component using the difference between the securities’ amortized cost basis and the present value of its expected future cash flows, discounted using the effective interest method or its estimated collateral value. Any remaining unrealized loss due to factors other than credit, or the non-credit component, is recorded in accumulated OCI.

To the extent we hold investments with an OTTI and if we have made the decision to sell the security or it is more likely than not that we will be required to sell the security prior to recovery of its amortized cost basis, we recognize the entire portion of the impairment in earnings.

Premiums or discounts on investment securities are amortized or accreted into investment interest income using the effective interest method.

Real Estate

Real Estate

Real estate reflects land or other real estate held on our balance sheet. Real estate intangibles reflect the value of associated lease intangibles, net of any amortization. In accordance with ASC 805, Business Combinations, the fair value of the real estate acquired in a business combination with in-place leases is allocated to (i) the acquired tangible assets, consisting of land or other real property such as buildings, and (ii) the identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and the value of other acquired intangible assets, based in each case on their fair values.

The fair value of the tangible assets of an acquired leased property is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land, building and tenant improvements, if any, based on the determination of the fair values of these assets. The as-if-vacant fair value of a property is determined by management based on an appraisal of the property by a qualified appraiser.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market in-place lease values are recorded as intangible assets based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases, and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining term of the lease, including renewal periods likely of being exercised by the lessee. The capitalized above-market lease values are amortized as a reduction of rental income and the capitalized below-market lease values are amortized as an increase to rental income. We also record, as appropriate, an intangible asset for in-place leases. The value of the leases in place at the time of the transaction is equal to the potential revenue (rent and expenses) lost if the leases were not in place (during downtime) and that would be incurred to obtain the lease. The amortization is calculated over the initial term unless management believes that it is likely that the tenant would exercise the renewal option, whereby we would amortize the value attributable to the renewal over the renewal period. If a lease were to be terminated, all unamortized amounts relating to that lease would be written off.

We record the purchases of real estate, other than in a business combination (i.e. real estate with no in-place leases), as asset acquisitions that are recorded at cost, including acquisition and closing costs. Our real estate is generally leased to tenants on a net lease basis, whereby the tenant is responsible for all operating expenses relating to the property, generally including property taxes, insurance, maintenance, repairs and capital expenditures. Scheduled rental revenue typically varies during the lease term and thus rental income is recognized on a straight-line basis, unless there is considerable risk as to collectability, so as to produce a constant periodic rent over the term of the lease. Accrued rental income is the aggregate difference between the scheduled rents which vary during the lease term and the income recognized on a straight-line basis and is recorded in other assets. Rental expenses (if any) are charged to operations as incurred.

Securitization of Receivables

Securitization of Receivables

We have established various special purpose entities or securitization trusts for the purpose of securitizing certain financing receivables or other debt investments. We determined that the trusts used in securitizations are variable interest entities, or VIEs, as defined in ASC 810, Consolidation. We typically serve as primary or master servicer of these trusts; however, as the servicer, we do not have the power to make significant decisions impacting the performance of the trusts. Based on an analysis of the structure of the trusts, under U.S. GAAP, we have concluded that we are not the primary beneficiary of the trusts as we do not have power over the trusts’ significant activities. Therefore, we do not consolidate these trusts in our condensed consolidated financial statements.

We account for transfers of financing receivables to these securitization trusts as sales pursuant to ASC 860, Transfers and Servicing, as we have concluded the transferred receivables have been isolated from the transferor (i.e., put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership) and we have surrendered control over the transferred receivables. We have received true-sale-at-law opinions for all of our securitization trust structures and non-consolidation legal opinions for all but one old securitization trust structure that support our conclusion regarding the transferred receivables. When we sell receivables in securitizations, we generally retain minor interests in the form of servicing rights and residual assets, which we refer to as securitization assets.

Gain or loss on the sale of receivables is calculated based on the excess of the proceeds received from the securitization (less any transaction costs) plus any retained interests obtained over the cost basis of the receivables sold. For retained interests, we generally estimate fair value based on the present value of future expected cash flows using our best estimates of the key assumptions of anticipated losses, prepayment rates, and current market discount rates commensurate with the risks involved.

We initially account for all separately recognized servicing assets and servicing liabilities at fair value and subsequently measure such servicing assets and liabilities using the amortization method. Servicing assets and liabilities are amortized in proportion to, and over the period of, estimated net servicing income with servicing income recognized as earned. We assess servicing assets for impairment at each reporting date. If the amortized cost of servicing assets is greater than the estimated fair value, we will recognize an impairment in net income.

Our other retained interest in securitized assets, the residual assets, are classified as available-for-sale securities and carried at fair value on the condensed consolidated balance sheets in Other Assets. We generally do not sell our residual assets. Our residual assets are evaluated for impairment on a quarterly basis. Interest income related to the residual assets is recognized using the effective interest rate method. If there is a change in expected cash flows related to the residual assets, we calculate a new yield based on the current amortized cost of the residual assets and the revised expected cash flows. This yield is used prospectively to recognize interest income.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include short-term government securities, certificates of deposit and money market funds, all of which had an original maturity of three months or less at the date of purchase. These securities are carried at their purchase price, which approximates fair value.

Restricted Cash

Restricted Cash

Restricted cash includes cash and cash equivalents set aside with certain lenders primarily to support deferred funding and other obligations outstanding as of the balance sheet dates. Restricted Cash is reported as part of Other Assets in the condensed consolidated balance sheets.

Variable Interest Entities and Equity Method Investments in Affiliates

Variable Interest Entities and Equity Method Investments in Affiliates

We account for our investment in entities that are considered voting or variable interest entities under ASC 810, Consolidation. We perform an ongoing assessment to determine the primary beneficiary of each entity as required by ASC 810. We have established various special purpose entities or securitization trusts for the purpose of securitizing certain financing receivables or other debt investments which are not consolidated in our financial statements as described in Securitization of Receivables above.

Substantially all of the activities of the special purpose entities that are formed for the purpose of holding our financing receivables and investments on our balance sheet are closely associated with our activities. Based on our assessment, we determined that we have power over and receive the benefits of these special purpose entities; hence, we are the primary beneficiary and should consolidate these entities under the provisions of ASC 810.

We have made equity investments in various renewable energy projects. We share in the cash flows and tax attributes according to a negotiated schedule. Our renewable energy projects are typically owned in partnerships structures (using limited liability companies, or LLCs, taxed as partnerships) where we, along with other large institutional investors, if any, receive a stated preferred return consisting of a priority distribution of all or a portion of the project’s cash flows, and in some cases, tax attributes. Once this preferred return is achieved, the partnership “flips” and the company which operates the project receives a larger portion of the cash flows through its interest in the holding company and we, along with the other institutional investors, will have an on-going residual interest.

We made several new equity investments in renewable energy projects in 2016 that, along with our existing investments, are accounted for under the equity method of accounting. Certain of our equity method investments were determined to be VIEs. Our maximum exposure to loss associated with our equity method investments is limited to our recorded value of our investments.

Under the equity method of accounting, the carrying value of our equity method investments is determined based on amounts we invested, adjusted for the equity in earnings or losses of investee allocated based on the limited liability entity agreement, less distributions received. Because the limited liability entity and holding company agreements contain preferences with regard to cash flows from operations, capital events and liquidation, we reflect our share of profits and losses by determining the difference between our “claim on the investee’s book value” at the end and the beginning of the period. This claim is calculated as the amount we would receive (or be obligated to pay) if the investee were to liquidate all of its assets at recorded amounts determined in accordance with U.S. GAAP and distribute the resulting cash to creditors and investors in accordance with their respective priorities. This method is commonly referred to as the hypothetical liquidation at book value method or (“HLBV”). Intra company gains and losses are eliminated for an amount equal to our interest and are reflected in the share in loss from equity method investments in affiliates in the consolidated statements of operations. Cash distributions received from our equity method investments are classified as operating cash flows to the extent of cumulative HLBV earnings. Any additional cash flows are deemed to be returns of the investment and are classified as investing cash flows. We have elected to recognize earnings from these investments one quarter in arrears to allow for the receipt of financial information.

We evaluate the realization of our investment accounted for using the equity method if circumstances indicate that our investment is OTTI. OTTI occurs when the estimated fair value of an investment is below the carrying value and the difference is determined to not be recoverable. This evaluation requires significant judgment regarding, but not limited to, the severity and duration of the impairment; the ability and intent to hold the securities until recovery; financial condition, liquidity, and near-term prospects of the issuer; specific events; and other factors. Based on an evaluation of our equity method investments, we determined that no impairment had occurred during the three or nine months ended September 30, 2016 or 2015.

Derivative Financial Instruments

Derivative Financial Instruments

We utilize derivative financial instruments, primarily interest rate swaps, to manage, or hedge, our interest rate risk exposures associated with new debt issuances, to manage our exposure to fluctuations in interest rates on variable rate debt, and to optimize the mix of our fixed and floating-rate debt. In addition, we use forward-starting interest rate swap contracts to manage a portion of our interest rate exposure for anticipated refinancing of our long-term debts. Our objective is to manage the impact of interest rates on the results of operations and cash flows and the market value of our debt.

The interest rate swaps we use are designated as cash flow hedges and are considered highly effective in reducing our exposure to the interest rate risk that they are designated to hedge. This effectiveness is essential in order to qualify for hedge accounting. Instruments that meet these hedging criteria are formally designated as hedges at the inception of the derivative contract. Derivatives are recorded on the consolidated balance sheet at fair value. If a derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in Accumulated Other Comprehensive Income, net of associated deferred income tax effects, in our Consolidated Statements of Stockholders’ Equity and Comprehensive Income (Loss) and are recognized in the Consolidated Statements of Operations when the hedged item affects earnings. Changes in fair value of the ineffective portions of these hedges are recognized in general and administrative expenses in our Consolidated Statements of Operations. For any derivative instruments not designated as hedging instruments, changes in fair value would be recognized in our Consolidated Statements of Operations in the period that the change occurs. We assess, both at the inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. We do not hold derivatives for trading purposes.

Interest rate swap contracts contain a credit risk that counterparties may be unable to fulfill the terms of the agreement. We attempt to minimize that risk by evaluating the creditworthiness of its counterparties, who are limited to major banks and financial institutions, and do not anticipate nonperformance by the counterparties.

Income Taxes

Income Taxes

We elected and qualified to be taxed as a REIT for U.S. federal income tax purposes, commencing with our taxable year ended December 31, 2013. To qualify as a REIT, we must meet on an ongoing basis a number of organizational and operational requirements, including a requirement that we currently distribute at least 90% of our net taxable income, excluding capital gains, to our shareholders. We intend to continue to meet the requirements for qualification as a REIT. As a REIT, we are not subject to U.S. federal corporate income tax on that portion of net income that is currently distributed to our owners. However, our taxable REIT subsidiaries (“TRSs”) will generally be subject to U.S. federal, state, and local income taxes as well as taxes of foreign jurisdictions, if any.

We account for income taxes of our TRSs using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted.

We apply accounting guidance with respect to how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. This guidance requires the accounting and disclosure of tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are “more likely than not” to be sustained by the applicable tax authority. We are required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which includes U.S. federal and certain states. We have no examinations in progress, none are expected at this time, and years 2012 through 2015 are open. As of September 30, 2016 and December 31, 2015, we had no uncertain tax positions. Our policy is to recognize interest expense and penalties related to income tax matters as a component of general and administrative expense. There were no accrued interest and penalties as of September 30, 2016 and December 31, 2015, and no interest and penalties were recognized during the three or nine months ended September 30, 2016 and 2015.

Equity-Based Compensation

Equity-Based Compensation

At the time of completion of our initial public offering (“IPO”), we adopted our 2013 Equity Incentive Plan (the “2013 Plan”), which provides for grants of stock options, stock appreciation rights, restricted stock units, shares of restricted common stock, phantom shares, dividend equivalent rights, long-term incentive-plan units (“LTIP units”) and other restricted limited partnership units issued by our Operating Partnership and other equity-based awards. From time to time, we may award unvested restricted stock as compensation to members of our senior management team, our independent directors, employees, advisors, consultants and other personnel under our 2013 Plan.

We record compensation expense for stock awards in accordance with ASC 718, Compensation—Stock Compensation. We record compensation expense for unvested shares that vest solely based on service conditions on a straight-line basis over the vesting period based upon the fair market value of the shares on the date of grant. For awards where the vesting is contingent upon achievement of certain performance targets, compensation expense is recorded over the requisite service period (which includes the performance period) based on our estimate of the achievement of the various performance targets. Our share price at the date of grant and actual performance results at the end of the performance period determine the fair value and the number of shares that will ultimately be awarded. The award earned is generally between 0% and 150% of the initial target, depending on the extent to which the performance target are met.

Earnings Per Share

Earnings Per Share

We compute earnings per share of common stock in accordance with ASC 260, Earnings Per Share. Basic earnings per share is calculated by dividing net income attributable to controlling stockholders (after consideration of the earnings allocated to unvested shares of restricted common stock) by the weighted-average number of shares of common stock outstanding during the period excluding the weighted average number of unvested shares of restricted common stock or restricted stock units (“participating securities” as defined in Note 12). Diluted earnings per share is calculated by dividing net income attributable to controlling stockholders by the weighted-average number of shares of common stock outstanding during the period plus other potentially dilutive securities. No adjustment is made for shares that are anti-dilutive during a period.

Segment Reporting

Segment Reporting

We provide and arrange debt and equity financing for sustainable infrastructure projects and report all of our activities as one business segment.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Revenue from Contracts with Customers

In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. The FASB proposed delaying the effective date of the standard by one year and issued a proposal that is intended to clarify and simplify the guidance. The updated standard becomes effective for us on January 1, 2018 and we expect will be first presented in our March 31, 2018, Form 10-Q. We have not yet selected a transition method, and we are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures.

Consolidation

In February 2015, the FASB issued ASU No. 2015-02 “Consolidation (Topic 810) Amendments to the Consolidation Analysis,” which affects the following areas of the consolidation analysis: limited partnerships and similar entities, evaluation of fees paid to a decision maker or service provider as a variable interest and in determination of the primary beneficiary, effect of related parties on the primary beneficiary determination and for certain investment funds. ASU No. 2015-02 is effective for us for our fiscal year ending December 31, 2016 and interim periods therein. The adoption of this standard did not have a material impact on our consolidated financial position, results of operations and cash flows.

Income Taxes

In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740) – Balance Sheet Classification of Deferred Taxes.” The purpose of the standard is to simplify the presentation of deferred taxes on a classified balance sheet. Under current GAAP, deferred income tax assets and liabilities are separated into current and noncurrent amounts in the balance sheet. The amendments in ASU 2015-17 require that all deferred tax assets and liabilities be classified as noncurrent in the balance sheet. The ASU will be effective for us beginning January 1, 2017, including interim periods in the calendar year 2017, but with early adoption permitted. Since we do not report a classified balance sheet, we do not expect the adoption of ASU 2015-17 to have a material impact on our consolidated financial statements and related disclosures.

Leases

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Changes were made to align lessor accounting with the lessee accounting model and ASU No. 2014-09, “Revenue from Contracts with Customers.” The new lease guidance simplifies the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. The ASU will be effective for us beginning January 1, 2019. Early application is permitted for all public business entities upon issuance. Lessees must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Lessees may not apply a full retrospective transition approach. We are currently evaluating the impact of the application of this accounting standard update on our consolidated financial statements and related disclosures.

Share-Based Payments

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting.” Under the new guidance, entities will be required to recognize all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. In addition, the new guidance will allow an employer to repurchase up to the maximum statutory income tax rates in the applicable jurisdictions without triggering liability accounting and allow an entity to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures as they occur. The guidance is effective for us beginning after December 15, 2016, and interim periods within those years. Early adoption is permitted in any annual or interim period for which financial statements haven’t been issued or made available for issuance, but all of the guidance must be adopted in the same period. We implemented this standard in the second quarter of 2016. The implementation did not have a material impact on our consolidated financial statements and related disclosures. See Note 11 for further information.

Equity Method Investments

In March 2016, the FASB issued ASU No. 2016-07, “Simplifying the Transition to the Equity Method of Accounting.” The new standard eliminates the requirement for an investor to retroactively apply the equity method when an increase in ownership interest in an investee triggers equity method accounting. It also simplifies in certain areas the accounting for equity method investments. The new standard becomes effective for us in fiscal year ending December 31, 2017 and interim periods therein. The adoption of this standard is not expected to have a material impact on our consolidated financial statements and related disclosures.

Credit Losses

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments (Topic 326).” ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 will replace the “incurred loss” approach under existing guidance with an “expected loss” model for instruments measured at amortized cost, and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as currently required. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We are currently evaluating the impact the adoption of ASU 2016-13 will have on our consolidated financial statements and related disclosures.

Statement of Cash Flows

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 provides guidance on how certain cash receipts and cash payments are presented and classified in the statement of cash flows where the current GAAP treatment is either unclear or there is no specific accounting guidance. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017 and is to be applied using a retrospective transition method to each period presented. The adoption of this standard is not expected to have a material impact on our consolidated financial statements and related disclosures.

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Summary of Fair Value and Carrying Value of Financial Assets and Liabilities

As of September 30, 2016
	Fair Value		Carrying Value		Level
	(dollars in millions)
Assets
Financing receivables	$	914	$	865		Level 3
Financing receivables held-for-sale		7		7		Level 3
Investments available-for-sale(1)		50		50		Level 3
Liabilities
Credit facilities	$	356	$	356		Level 3
Nonrecourse debt(2)		649		624		Level 3
Derivative liabilities		6		6		Level 2

(1) The amortized cost of our investments available-for-sale as of September 30, 2016, was $51 million.

(2) Fair value and carrying value of nonrecourse debt excludes unamortized debt issuance costs.

	As of December 31, 2015
	Fair Value		Carrying Value		Level
	(dollars in millions)
Assets
Financing receivables	$	806	$	784		Level 3
Financing receivables held-for-sale		61		60		Level 3
Investments available-for-sale(1)		29		29		Level 3
Liabilities
Credit facility	$	247	$	247		Level 3
Nonrecourse debt(2)		690		680		Level 3
Derivative liabilities		1		1		Level 2

(1) The amortized cost of our investments available-for-sale as of December 31, 2015, was $31 million.

(2) Fair value and carrying value of nonrecourse debt excludes unamortized debt issuance costs.

Schedule of Reconciliation of Level 3 Investments Available-for-Sale Securities

The following table reconciles the beginning and ending balances for our Level 3 investments that are carried at fair value on a recurring basis:

	For the three months ended September 30,					For the nine months ended September 30,
	2016		2015			2016			2015
	(dollars in millions)
Balance, beginning of period	$	48	$	28		$	29		$	27
Purchases of investments available-for-sale		2		1			34			21
Payments on investments available-for-sale		—		—			(1	)		(9	)
Sale of investments available-for-sale		—		—			(14	)		(11	)
Gains on investments available-for-sale recorded in earnings		—		—			1			1
Gains (losses) on investments available-for-sale recorded in OCI(1)		—		(1	)		1			(1	)
Balance, end of period	$	50	$	28		$	50		$	28

(1) As of September 30, 2016, approximately $11 million of investment grade rated debt that we held for more than 12 months was in an unrealized loss position due to interest rate movements. As of September 30, 2016, we held no other securities in an unrealized loss position.

Schedule of Cash Deposits Subject to Credit Risk

We had cash deposits that are subject to credit risk as shown below:

	September 30, 2016		December 31, 2015
	(dollars in millions)
Cash deposits	$	73	$	43
Restricted cash deposits (included in Other assets)		25		36
Total cash deposits	$	98	$	79
Amount of cash deposits in excess of amounts federally insured	$	94	$	75

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Securitization of Receivables (Tables)

9 Months Ended

Sep. 30, 2016

Transfers and Servicing [Abstract]

Summary of Certain Transactions with Securitization Trusts

The following summarizes certain transactions with our securitization trusts:

	For the Nine Months Ended September 30,
	2016		2015
	(dollars in millions)
Gains on securitizations	$	13	$	6
Purchase of receivables securitized	$	394	$	219
Proceeds from securitizations	$	407	$	225
Residual and servicing assets included in Other Assets	$	18	$	9
Cash received from residual and servicing assets	$	2	$	1

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Our Portfolio (Tables)

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Analysis of Portfolio by Type of Obligor and Credit Quality

The following is an analysis of our Portfolio by type of obligor and credit quality as of September 30, 2016:

	Investment Grade
	Government(1)			Commercial Investment Grade(2)			Commercial Non- Investment Grade (3)			Subtotal, Debt and Real Estate			Equity Method Investments(4)		Total
	(dollars in millions)
Financing receivables	$	380		$	464		$	21		$	865		$	—	$	865
Financing receivables held-for-sale		7			—			—			7			—		7
Investments		33			17			—			50			—		50
Real estate(5)					166			—			166			—		166
Equity method investments		—			—			—			—			324		324
Total	$	420		$	647		$	21		$	1,088		$	324	$	1,412
% of Debt and Real Estate Portfolio		39	%		59	%		2	%		100	%		N/A		N/A
Average Remaining Balance(6)	$	10		$	10		$	11		$	10		$	19	$	11

(1) Transactions where the ultimate obligor is the U.S. federal government or state or local governments where the obligors are rated investment grade (either by an independent rating agency or based upon our internal credit analysis). This amount includes $230 million of U.S. federal government transactions and $190 million of transactions where the ultimate obligors are state or local governments. Transactions may have guaranties of energy savings from third party service providers, the majority of which are entities rated investment grade by an independent rating agency.

(2) Transactions where the projects or the ultimate obligors are commercial entities, including institutions such as hospitals or universities, that have been rated investment grade (either by an independent rating agency or based on our internal credit analysis). Of this total, $11 million of the transactions have been rated investment grade by an independent rating agency. Commercial investment grade financing receivables include $260 million of internally rated residential solar loans made on a nonrecourse basis to special purpose subsidiaries of SunPower Corporation, for which we rely on certain limited indemnities, warranties and other obligations of SunPower Corporation or its other subsidiaries.

(3) Transactions where the projects or the ultimate obligors are commercial entities, including institutions such as hospitals or universities, that have ratings below investment grade (either by an independent rating agency or using our internal credit analysis).

(4) Consists of ownership interests in operating renewable energy projects.

(5) Includes the real estate and the lease intangible assets through which we receive scheduled lease payments, typically under long-term triple net lease agreements.

(6) Excludes 88 transactions each with outstanding balances that are less than $1 million and that in the aggregate total $31 million.

Components of Financing Receivables

The components of financing receivables as of September 30, 2016 and December 31, 2015, were as follows:

	September 30, 2016			December 31, 2015
	(dollars in millions)
Financing receivables
Financing or minimum lease payments(1)	$	1,122		$	1,025
Unearned interest income		(255	)		(238	)
Allowance for credit losses		—			—
Unearned fee income, net of initial direct costs		(2	)		(3	)
Financing receivables(1)	$	865		$	784

(1) Excludes $7 million and $60 million in financing receivables held-for-sale as of September 30, 2016 and December 31, 2015, respectively.

Summary of Anticipated Maturity Dates of Financing Receivables and Investments and Weighted Average Yield

The following table provides a summary of our anticipated maturity dates of our financing receivables and investments and the weighted average yield for each range of maturities as of September 30, 2016:

	Total			Less than 1 year			1-5 years			5-10 years			More than 10 years
	(dollars in millions)
Financing Receivables (1)
Maturities by period	$	865		$	1		$	48		$	80		$	736
Weighted average yield by period		5.4	%		4.0	%		6.4	%		5.0	%		5.3	%
Investments
Maturities by period	$	50		$	—		$	—		$	1		$	49
Weighted average yield by period		3.9	%		—	%		—	%		4.7	%		4.0	%

(1) Excludes financing receivables held-for-sale of $7 million.

Components of Real Estate Portfolio

The components of our real estate portfolio as of September 30, 2016 and December 31, 2015, were as follows:

	September 30, 2016			December 31, 2015
	(dollars in millions)
Real Estate
Land	$	135		$	129
Real estate related intangibles		33			28
Accumulated amortization of real estate intangibles		(2	)		(1	)
Real Estate	$	166		$	156

Schedule of Future Amortization Expenses Related to Intangible Assets and Future Minimum Rental Income Payments under Land Lease Agreements

As of September 30, 2016, the future amortization expense of these intangible assets and the future minimum rental income payments under our land lease agreements are as follows:

Year Ending December 31,	Future Amortization Expense		Minimum Rental Income Payments
	(dollars in millions)
From October 1, 2016 to December 31, 2016	$	—	$	2
2017		1		10
2018		1		11
2019		1		11
2020		1		10
2021		1		11
Thereafter		26		292
Total	$	31	$	347

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Credit Facilities (Tables)

9 Months Ended

Sep. 30, 2016

Text Block [Abstract]

Schedule of Limit of Borrowing at Any Point in Time and Total Maximum Advances

The limit of borrowing at any point in time and the total maximum advances are summarized below:

	Limit of Borrowing at any point in time				Maximum Total Advances
As of	G&I Facility		PF Facility		G&I Facility		PF Facility
	(dollars in millions)
December 31, 2014	$	125	$	325	$	375	$	975
December 31, 2015	$	150	$	350	$	450	$	1,050
January 2016	$	250	$	250	$	600	$	900

Schedule of Additional Detail on Credit Facility

The following table provides additional detail on our credit facility as of September 30, 2016 and December 31, 2015:

	September 30, 2016			December 31, 2015
	(dollars in millions)
Outstanding balance	$	307		$	247
Value of collateral pledged to credit facility	$	423		$	356
Weighted average short-term borrowing rate		2.4	%		2.3	%

Summary of Required Covenant Included in Loan Agreements

We were in compliance with the required financial covenants described below at each quarterly reporting date that such covenants were applicable:

Covenant	Covenant Threshold
Minimum Liquidity (defined as available borrowings under the Loan Agreements plus unrestricted cash divided by actual borrowings) of greater than:		5%
12 month rolling Net Interest Margin of greater than:		zero
Maximum Debt to Equity Ratio of less than: (1)		4 to 1

⁽¹⁾ Debt is defined as Total Indebtedness excluding accounts payable and accrued expenses and nonrecourse debt.

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Nonrecourse Debt (Tables)

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Schedule of Outstanding Asset-Backed Nonrecourse Debt and Bank Loans

We have outstanding the following asset-backed nonrecourse debt and bank loans (dollars in millions):

	Outstanding Balance as of													Value of Assets Pledged as of
	September 30, 2016			December 31, 2015			Interest Rate			Maturity Date		Anticipated Balance at Maturity		September 30, 2016		December 31, 2015		Description of Assets Pledged
HASI Sustainable Yield Bond 2013-1	$	77		$	83			2.79	%		December 2019	$	57	$	93	$	99	Financing receivables
ABS Loan Agreement	$	92		$	102			5.74	%		September 2021	$	17	$	100	$	117	Equity interest in Strong Upwind Holdings I, LLC
HASI Sustainable Yield Bond 2015-1	$	98		$	100			4.28	%		October 2034	$	—	$	138	$	139	Financing receivables, real estate and real estate intangibles
HASI SYB Loan Agreement 2015-1	$	76		$	90			4.34	% (1)		December 2021	$	—	$	100	$	117	Equity interest in Strong Upwind Holdings II and III, LLC, related interest rate swap
HASI SYB Loan Agreement 2015-2	$	41		$	42			4.92	% (1)		December 2023	$	—	$	70	$	71	Equity interest in Buckeye Wind Energy Class B Holdings LLC, related interest rate swap
HASI SYB Loan Agreement 2015-3	$	152		$	162			4.92	%		December 2020	$	132	$	176	$	175	Residential Solar Financing receivables
Other nonrecourse debt (2)	$	88		$	101			2.26	% - 7.45%		2017 to 2032	$	—	$	86	$	97	Financing receivables
Debt issuance costs	$	(14	)	$	(16	)
Nonrecourse debt	$	610		$	664

(1) Interest rate represents the current period’s LIBOR based rate plus the spread. Also see the interest rate swap contracts shown in the table below.

(2) Other nonrecourse debt consists of various debt agreements used to finance certain of our financing receivables for the term of the financing receivables. Debt service payment requirements, in a majority of cases, are equal to or less than the cash flows received from the underlying financing receivables.

Schedule of Interest Rate Swaps that Are Designated as Cash Flow Hedges

In connection with several of our nonrecourse debt borrowings, we have entered into the following interest rate swaps that are designated as cash flow hedges (dollars in millions):

						Notional Value as of				Fair Value as of
	Base Rate		Hedged Rate			September 30, 2016		December 31, 2015		September 30, 2016			December 31, 2015			Term
HASI SYB Loan Agreement 2015-1		3 month Libor		1.55	%	$	70	$	81	$	(0.8	)	$	(0.3	)	December 2015 to September 2021
HASI SYB Loan Agreement 2015-2		3 month Libor		1.52	%	$	37	$	38	$	(0.4	)	$	(0.1	)	December 2015 to December 2018
HASI SYB Loan Agreement 2015-2		3 month Libor		2.55	%	$	29	$	29	$	(1.1	)	$	(0.2	)	December 2018 to December 2024
HASI SYB Loan Agreement 2015-3		1 month Libor		2.34	%	$	119	$	—	$	(3.9	)	$	—		November 2020 to August 2028
Total						$	255	$	148	$	(6.2	)	$	(0.6	)

Schedule of Minimum Maturities of Nonrecourse Debt

The next 12-months of stated minimum maturities of nonrecourse debt are as follows:

As of September 30,	(dollars in millions)
2016	$	49
2017		40
2018		38
2019		95
2020		164
Thereafter		238
	$	624
Deferred financing costs, net		(14	)
Total nonrecourse debt	$	610

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Equity (Tables)

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Summary of Dividends Declared by Board of Directors

Our board of directors declared the following dividends in 2015 and 2016:

Announced Date	Record Date	Pay Date	Amount per share
3/17/15	3/30/15	4/9/15	$	0.26
6/16/15	6/30/15	7/9/15	$	0.26
9/16/15	9/30/15	10/8/15	$	0.26
12/15/15	12/30/15	1/7/16	$	0.30
3/15/16	3/30/16	4/7/16	$	0.30
6/07/16	7/06/16	7/14/16	$	0.30
9/15/16	10/05/16	10/13/16	$	0.30

Schedule of Common Stock Public Offerings and ATM Offerings

We completed the following public offerings and ATM offerings of our common stock in 2015 and 2016:

Closing Date	Common Stock Offerings	Shares Issued1		Price Per Share			Net Proceeds 2
		(amounts in millions, except per share amounts)
5/4/15	Public Offering		4.60	$	18.50	3	$	82
10/19/15	Public Offering		5.75	$	18.00	3	$	99
6/21/16	Public Offering		4.60	$	19.78	4	$	91
5/9/16 to 6/30/16	ATM		0.065	$	20.31	5	$	1

¹ Includes shares issued in connection with the exercise of the underwriters’ option to purchase additional shares.

² Net proceeds from the offerings is shown after deducting underwriting discounts, commissions and other offering costs.

³  Represents the public offering price per share.

⁴  Represents the price per share at which the underwriters in our public offerings purchased shares from our company.

⁵  Represents the average price per share at which investors in our ATM offerings purchased shares from our company.

Summary of Unvested Shares of Restricted Common Stock

A summary of the unvested shares of restricted common stock that have been issued is as follows:

	Restricted Shares of Common Stock			Weighted Average Share Price		Value (in millions)
Balance — December 31, 2014		964,820		$	13.41	$	12.9
Granted		586,648			17.29		10.2
Vested		(285,289	)		13.61		(3.9	)
Forfeited		(18,110	)		15.54		(0.3	)
Balance — December 31, 2015		1,248,069		$	15.16	$	18.9
Granted		658,753			18.62		12.3
Vested		(572,174	)		13.79		(7.9	)
Forfeited		(11,188	)		17.25		(0.2	)
Ending Balance — September 30, 2016		1,323,460		$	17.46	$	23.1

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Earnings per Share of Common Stock (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Earnings Per Common Share

The computation of basic and diluted earnings per common share is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
Numerator:	2016			2015			2016			2015
	(in millions, except share and per share data)
Net income attributable to controlling shareholders and participating securities	$	3.3		$	2.1		$	10.2		$	5.7
Less: Dividends paid on participating securities		(0.4	)		(0.3	)		(1.3	)		(1.0	)
Undistributed earnings attributable to participating securities		—			—			—			—
Net income attributable to controlling shareholders	$	2.9		$	1.8		$	8.9		$	4.7
Denominator:
Weighted-average number of common shares — basic		41,988,036			31,221,982			38,924,977			29,046,742
Weighted-average number of common shares — diluted		41,988,036			31,221,982			38,924,977			29,046,742
Basic earnings per common share	$	0.07		$	0.06		$	0.23		$	0.16
Diluted earnings per common share	$	0.07		$	0.06		$	0.23		$	0.16
Other Information:
Weighted-average number of OP units		284,992			284,992			284,992			298,218
Unvested restricted common stock outstanding								1,323,460			1,297,584

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Equity Method Investments in Affiliate (Tables)

9 Months Ended

Sep. 30, 2016

Strong Upwind Holdings LLC [Member]

Schedule of Investments in Equity Method Affiliate

The following is a summary of the consolidated financial position and results of operations of the significant holding companies, accounted for using the equity method:

	As of June 30, 2016			As of December 31, 2015
	(dollars in millions, unaudited)
Current Assets	$	57		$	72
Total Assets	$	1,651		$	1,724
Current Liabilities	$	18		$	18
Total Liabilities	$	68		$	68
Members’ Equity	$	1,583		$	1,656
	For the six months ended June 30,
	2016			2015
	(dollars in millions, unaudited)
Revenue	$	66		$	77
Income from Continuing Operations	$	(5	)	$	21
Net Income	$	(5	)	$	21

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Summary of Significant Accounting Policies - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) Segment	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Summary of Significant Accounting Policies [Line Items]
Financing receivable, past due			90 days
Cash and cash equivalents original maturity period			3 months
Impairment of equity method investments	$ 0	$ 0	$ 0	$ 0
Real estate investment description			To qualify as a REIT, we must meet on an ongoing basis a number of organizational and operational requirements, including a requirement that we currently distribute at least 90% of our net taxable income, excluding capital gains, to our shareholders.
Income tax examination, description			We have no examinations in progress, none are expected at this time, and years 2012 through 2015 are open.
Uncertain tax positions	0		$ 0		$ 0
Accrued interest and penalties	$ 0		0		$ 0
Interest and penalties recognized during the period		$ 0	$ 0
Number of segment reported | Segment			1
2013 Plan [Member] | Performance Based Restricted Stock Award [Member]
Summary of Significant Accounting Policies [Line Items]
Stock-based award vesting minimum percentage			0.00%
Stock-based award vesting maximum percentage			150.00%
Stock-based award, range of vesting percentage description			The award earned is generally between 0% and 150% of the initial target, depending on the extent to which the performance target are met.
Earliest Tax Year [Member]
Summary of Significant Accounting Policies [Line Items]
Open tax year			2012
Latest Tax Year [Member]
Summary of Significant Accounting Policies [Line Items]
Open tax year			2015
Minimum [Member]
Summary of Significant Accounting Policies [Line Items]
Percentage of taxable income distributed to stockholders			90.00%

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Fair Value Measurements - Summary of Fair Value and Carrying Value of Financial Assets and Liabilities (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Fair Value [Member] | Level 3 [Member] | Credit Facilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	$ 356	$ 247
Fair Value [Member] | Level 3 [Member] | Nonrecourse Debt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	649	690
Fair Value [Member] | Level 3 [Member] | Financing Receivable [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	914	806
Fair Value [Member] | Level 3 [Member] | Financing Receivables Held-for-Sale [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	7	61
Fair Value [Member] | Level 3 [Member] | Investments Available-for-Sale [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	50	29
Fair Value [Member] | Fair Value, Inputs, Level 2 [Member] | Derivative Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	6	1
Carrying Value [Member] | Level 3 [Member] | Credit Facilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	356	247
Carrying Value [Member] | Level 3 [Member] | Nonrecourse Debt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	624	680
Carrying Value [Member] | Level 3 [Member] | Financing Receivable [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	865	784
Carrying Value [Member] | Level 3 [Member] | Financing Receivables Held-for-Sale [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	7	60
Carrying Value [Member] | Level 3 [Member] | Investments Available-for-Sale [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	50	29
Carrying Value [Member] | Fair Value, Inputs, Level 2 [Member] | Derivative Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	$ 6	$ 1

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Fair Value Measurements - Summary of Fair Value and Carrying Value of Financial Assets and Liabilities (Parenthetical) (Detail) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Fair Value Disclosures [Abstract]
Amortized cost	$ 51	$ 31

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Fair Value Measurements - Schedule of Reconciliation of Level 3 Investments Available-for-Sale Securities (Detail) - Investments Available-for-Sale [Member] - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	$ 48	$ 28	$ 29	$ 27
Purchases of investments available-for-sale	2	1	34	21
Payments on investments available-for-sale			(1)	(9)
Sale of investments available-for-sale			(14)	(11)
Gains on investments available-for-sale recorded in earnings			1	1
Gains (losses) on investments available-for-sale recorded in OCI		(1)	1	(1)
Balance, end of period	$ 50	$ 28	$ 50	$ 28

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Fair Value Measurements - Schedule of Reconciliation of Level 3 Investments Available-for-Sale Securities (Parenthetical) (Detail) $ in Millions	Sep. 30, 2016 USD ($) Security
Fair Value Disclosures [Abstract]
Investment grade rated debt held for more than 12 months | $	$ 11
Securities in unrealized loss position | Security	1

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Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Wind Projects [Member]
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]
Senior secured debt investment		$ 13.0
Recognized gain on sale of debt investment	$ 0.8
Wind Projects [Member] | Large Financial Institution [Member]
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]
Senior secured debt investment		$ 45.0
Level 3 [Member]
Fair Value, Option, Qualitative Disclosures Related to Election [Line Items]
Fair value interest rate spreads, minimum	1.00%
Fair value interest rate spreads, maximum	5.00%

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Fair Value Measurements - Schedule of Cash Deposits Subject to Credit Risk (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014
Fair Value Disclosures [Abstract]
Cash deposits	$ 72,968	$ 42,645	$ 30,680	$ 58,199
Restricted cash deposits (included in Other assets)	25,000	36,000
Total cash deposits	98,000	79,000
Amount of cash deposits in excess of amounts federally insured	$ 94,000	$ 75,000

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Non-Controlling Interest - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2016 shares
Noncontrolling Interest [Line Items]
Exchange of operating partnership units to common stock	0
Minimum [Member]
Noncontrolling Interest [Line Items]
Outstanding OP units held by outside limited partners	1.00%

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Securitization of Receivables - Summary of Certain Transactions with Securitization Trusts (Detail) - Securitization Trust [Member] - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Fair Value Assumption, Date of Securitization or Asset-backed Financing Arrangement, Transferor's Continuing Involvement, Servicing Assets or Liabilities [Line Items]
Gains on securitizations	$ 13	$ 6
Purchase of receivables securitized	394	219
Proceeds from securitizations	407	225
Cash received from residual and servicing assets	2	1
Residual Assets [Member]
Fair Value Assumption, Date of Securitization or Asset-backed Financing Arrangement, Transferor's Continuing Involvement, Servicing Assets or Liabilities [Line Items]
Residual and servicing assets included in Other Assets	$ 18	$ 9

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Securitization of Receivables - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Managed receivables	$ 3,600,000,000		$ 3,600,000,000		$ 3,200,000,000
Securitization credit losses	0	$ 0	0	$ 0
Asset-backed Securities, Securitized Loans and Receivables [Member]
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Managed receivables	$ 2,200,000,000		$ 2,200,000,000		$ 1,800,000,000
Minimum [Member]
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Discount rates to determine fair market value of underlying assets			4.00%
Maximum [Member]
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Annual servicing fees			0.20%
Discount rates to determine fair market value of underlying assets			7.00%

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Our Portfolio - Additional Information (Detail)	1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 30, 2016 USD ($) MW	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Financing Receivable, Recorded Investment [Line Items]
Financing receivables, investments, real estate and equity method investments		$ 1,412,000,000		$ 1,412,000,000
Deferred funding obligations		64,331,000		64,331,000		$ 108,499,000
Investment securities pledged as collateral		41,000,000		41,000,000
Total megawatts power acquired from third party | MW	43
Payments to acquire projects	$ 33,000,000
Investment amount	$ 42,000,000
Non interest bearing period	2 years
Equity method investments		323,968,000		323,968,000		318,769,000
Financing receivables on non accrual status		0		0		$ 0
Loan modifications that qualify as trouble debt restructurings		0	$ 0	0	$ 0
Provision for credit losses		$ 0	$ 0	$ 0	$ 0
Minimum [Member]
Financing Receivable, Recorded Investment [Line Items]
Long-term triple net leases expiration dates range				2033
Long-term triple net leases extended expiration dates range				2047
Maximum [Member]
Financing Receivable, Recorded Investment [Line Items]
Long-term triple net leases expiration dates range				2051
Long-term triple net leases extended expiration dates range				2080

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Our Portfolio - Analysis of Portfolio by Type of Obligor and Credit Quality (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	$ 865,000
Financing receivables held-for-sale	7,378	$ 60,376
Investments	50,291	29,017
Real estate	166,000
Equity method investments	323,968	$ 318,769
Total	1,412,000
Average Remaining Balance	11,000
Commercial Investment Grade [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	464,000
Investments	17,000
Real estate	166,000
Total	647,000
Average Remaining Balance	10,000
Commercial Non-Investment Grade [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	21,000
Total	21,000
Average Remaining Balance	$ 11,000
Credit Concentration Risk [Member] | Commercial Investment Grade [Member] | Debt and Real Estate Portfolio [Member]
Financing Receivable, Recorded Investment [Line Items]
% of Debt and Real Estate Portfolio	59.00%
Credit Concentration Risk [Member] | Commercial Non-Investment Grade [Member] | Debt and Real Estate Portfolio [Member]
Financing Receivable, Recorded Investment [Line Items]
% of Debt and Real Estate Portfolio	2.00%
Government [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	$ 380,000
Financing receivables held-for-sale	7,000
Investments	33,000
Total	420,000
Average Remaining Balance	$ 10,000
Government [Member] | Credit Concentration Risk [Member] | Debt and Real Estate Portfolio [Member]
Financing Receivable, Recorded Investment [Line Items]
% of Debt and Real Estate Portfolio	39.00%
Subtotal, Debt and Real Estate [Member]
Financing Receivable, Recorded Investment [Line Items]
Financing receivables	$ 865,000
Financing receivables held-for-sale	7,000
Investments	50,000
Real estate	166,000
Total	1,088,000
Average Remaining Balance	$ 10,000
Subtotal, Debt and Real Estate [Member] | Credit Concentration Risk [Member] | Debt and Real Estate Portfolio [Member]
Financing Receivable, Recorded Investment [Line Items]
% of Debt and Real Estate Portfolio	100.00%
Equity Method Investments [Member]
Financing Receivable, Recorded Investment [Line Items]
Equity method investments	$ 324,000
Total	324,000
Average Remaining Balance	$ 19,000

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Our Portfolio - Analysis of Portfolio by Type of Obligor and Credit Quality (Parenthetical) (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) Transactions	Dec. 31, 2015 USD ($)
Financing Receivable, Recorded Investment [Line Items]
Total financing receivable	$ 865,481	$ 783,967
Number of transactions | Transactions	88
Financial receivable outstanding, Average Remaining Balance	$ 11,000
Total aggregate remaining balance	31,000
Investment Grade By Independent Rating Agency [Member]
Financing Receivable, Recorded Investment [Line Items]
Total financing receivable	11,000
U.S. Federal Government [Member]
Financing Receivable, Recorded Investment [Line Items]
Total financing receivable	230,000
State, Local, Institutions [Member]
Financing Receivable, Recorded Investment [Line Items]
Total financing receivable	190,000
Maximum [Member]
Financing Receivable, Recorded Investment [Line Items]
Financial receivable outstanding, Average Remaining Balance	1,000
Commercial Investment Grade [Member]
Financing Receivable, Recorded Investment [Line Items]
Financial receivable outstanding, Average Remaining Balance	10,000
Commercial Investment Grade [Member] | Residential Solar Loan [Member] | Subsidiaries Of SunPower Corporation [Member]
Financing Receivable, Recorded Investment [Line Items]
Total financing receivable	$ 260,000

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Our Portfolio - Components of Financing Receivables (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Financing receivables
Unearned interest income	$ (255,000)	$ (238,000)
Allowance for credit losses	0	0
Unearned fee income, net of initial direct costs	(2,000)	(3,000)
Financing receivables	865,481	783,967
Commercial Portfolio Segment [Member]
Financing receivables
Financing or minimum lease payments	$ 1,122,000	$ 1,025,000

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Our Portfolio - Components of Financing Receivables (Parenthetical) (Detail) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Receivables [Abstract]
Financing receivables held-for-sale	$ 7	$ 60

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Our Portfolio - Summary of Anticipated Maturity Dates of Financing Receivables and Investments and Weighted Average Yield (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2016 USD ($)
Receivables [Abstract]
Financing Receivables, Maturities total	$ 865
Financing Receivables, Maturities in less than 1 year	1
Financing Receivables, Maturities in 1-5 years	48
Financing Receivables, Maturities in 5-10 years	80
Financing Receivables,Maturities in more than 10 years	$ 736
Financing Receivables, weighted average yield total	5.40%
Financing Receivables, weighted average yield in less than 1 year	4.00%
Financing Receivables, weighted average yield in 1-5 years	6.40%
Financing Receivables, weighted average yield in 5-10 years	5.00%
Financing Receivables, weighted average yield in more than 10 years	5.30%
Investments, Maturities total	$ 50
Investments, Maturities in less than 1 year	0
Investments, Maturities in 1-5 years	0
Investments, Maturities in 5-10 years	1
Investments, Maturities in more than 10 years	$ 49
Investments, weighted average yield total	3.90%
Investments, weighted average yield in less than 1 year	0.00%
Investments, weighted average yield in 1-5 years	0.00%
Investments, weighted average yield in 5-10 years	4.70%
Investments, weighted average yield in more than 10 years	4.00%

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Our Portfolio - Summary of Anticipated Maturity Dates of Financing Receivables and Investments and Weighted Average Yield (Parenthetical) (Detail) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Receivables [Abstract]
Financing receivables held-for-sale	$ 7	$ 60

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Our Portfolio - Components of Real Estate Portfolio (Detail) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Real Estate Properties [Line Items]
Accumulated amortization of real estate intangibles	$ (2)	$ (1)
Real Estate	166	156
Land [Member]
Real Estate Properties [Line Items]
Real Estate	135	129
Real Estate Related Intangibles [Member]
Real Estate Properties [Line Items]
Real Estate	$ 33	$ 28

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Our Portfolio - Schedule of Future Amortization Expenses Related to Intangible Assets and Future Minimum Rental Income Payments under Land Lease Agreements (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Finite Lived Intangible Assets Future Amortization Expense And Capital Leased Assets [Abstract]
From October 1, 2016 to December 31, 2016	$ 0
2017	1,000
2018	1,000
2019	1,000
2020	1,000
2021	1,000
Thereafter	26,000
Net intangible assets	30,924	$ 26,930
From October 1, 2016 to December 31, 2016	2,000
2017	10,000
2018	11,000
2019	11,000
2020	10,000
2021	11,000
Thereafter	292,000
Total	$ 347,000

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Credit Facilities - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2016	Jan. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Line of Credit Facility [Line Items]
Credit facility outstanding	$ 356,419,000		$ 247,350,000
Termination of credit facility	Jul. 19, 2019
Issuance costs	$ 13,000,000
Fees for loan agreement description	Fees for each Loan Agreement equal to 0.50%, divided by 360, multiplied by the excess of the available borrowing capacity under each component of the credit facility over the actual amount borrowed under such component.
Default underlying financings	50.00%
Financing receivables	$ 865,000,000
Debt issuance cost	$ 14,000,000
Qualifying Government and Institutional Loans (G&I Facility) [Member]
Line of Credit Facility [Line Items]
Maximum advances on credit facilities		$ 600,000,000	450,000,000	$ 375,000,000
Qualifying Project Finance Loans (PF Facility) [Member]
Line of Credit Facility [Line Items]
Maximum advances on credit facilities		$ 900,000,000	$ 1,050,000,000	$ 975,000,000
London Interbank Offered Rate	LIBOR plus 2.5%
Floating interest rate	2.50%
Applicable valuation percentages	67.00%
London Interbank Offered Rate (LIBOR) [Member] | Qualifying Government and Institutional Loans (G&I Facility) [Member]
Line of Credit Facility [Line Items]
London Interbank Offered Rate	("LIBOR") plus 1.5%
Floating interest rate	1.50%
Fixed interest rate	1.50%
London Interbank Offered Rate (LIBOR) [Member] | Qualifying Government and Institutional Loans (G&I Facility) [Member] | 1.5% [Member]
Line of Credit Facility [Line Items]
Floating interest rate	1.00%
London Interbank Offered Rate (LIBOR) [Member] | Qualifying Project Finance Loans (PF Facility) [Member]
Line of Credit Facility [Line Items]
Fixed interest rate	2.50%
London Interbank Offered Rate (LIBOR) [Member] | Qualifying Project Finance Loans (PF Facility) [Member] | 1.5% [Member]
Line of Credit Facility [Line Items]
Floating interest rate	1.00%
Federal Funds Effective Swap Rate [Member] | Qualifying Government and Institutional Loans (G&I Facility) [Member] | 1.5% [Member]
Line of Credit Facility [Line Items]
Floating interest rate	0.50%
Federal Funds Effective Swap Rate [Member] | Qualifying Project Finance Loans (PF Facility) [Member]
Line of Credit Facility [Line Items]
London Interbank Offered Rate	Federal Funds Rate plus 0.5%
Federal Funds Effective Swap Rate [Member] | Qualifying Project Finance Loans (PF Facility) [Member] | 1.5% [Member]
Line of Credit Facility [Line Items]
Floating interest rate	0.50%
Residential Solar Loan [Member]
Line of Credit Facility [Line Items]
Financing receivables	$ 84,000,000
Credit Default Option [Member] | Qualifying Government and Institutional Loans (G&I Facility) [Member]
Line of Credit Facility [Line Items]
London Interbank Offered Rate	LIBOR plus 2.50%
Floating interest rate	2.50%
Credit Default Option [Member] | Qualifying Project Finance Loans (PF Facility) [Member]
Line of Credit Facility [Line Items]
London Interbank Offered Rate	LIBOR plus 5.00%
Floating interest rate	5.00%
Loans Payable [Member]
Line of Credit Facility [Line Items]
Short-term loans borrowed	$ 50,000,000
Fixed interest rate	4.80%
Incremental interest rate	6.80%
Maturity date	2016-12
Additional interest rate on debt default	2.00%
Debt issuance cost	$ 500,000
U.S. Federal Government [Member] | Qualifying Government and Institutional Loans (G&I Facility) [Member]
Line of Credit Facility [Line Items]
Applicable valuation percentages	85.00%
Institutional [Member] | Qualifying Government and Institutional Loans (G&I Facility) [Member]
Line of Credit Facility [Line Items]
Applicable valuation percentages	80.00%
Senior Secured Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum advances on credit facilities	$ 1,500,000,000
Credit facility outstanding	$ 500,000,000

XML

Credit Facilities - Schedule of Limit of Borrowing at Any Point in Time and Total Maximum Advances (Detail) - USD ($)	Jan. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Qualifying Government and Institutional Loans (G&I Facility) [Member]
Line of Credit Facility [Line Items]
Limit of Borrowing at any point in time	$ 250,000,000	$ 150,000,000	$ 125,000,000
Maximum Total Advances	600,000,000	450,000,000	375,000,000
Qualifying Project Finance Loans (PF Facility) [Member]
Line of Credit Facility [Line Items]
Limit of Borrowing at any point in time	250,000,000	350,000,000	325,000,000
Maximum Total Advances	$ 900,000,000	$ 1,050,000,000	$ 975,000,000

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Credit Facilities - Schedule of Additional Detail on Credit Facility (Detail) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
Outstanding balance	$ 356,419	$ 247,350
Value of collateral pledged to credit facility	$ 423,000	$ 356,000
Weighted average short-term borrowing rate	2.40%	2.30%

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Credit Facilities - Summary of Required Covenant Included in Loan Agreements (Detail) - Covenants Threshold [Member]	Sep. 30, 2016 USD ($)
Line of Credit Facility [Line Items]
Minimum Liquidity (defined as available borrowings under the Loan Agreements plus unrestricted cash divided by actual borrowings) of greater than:	5.00%
12 month rolling Net Interest Margin of greater than:	$ 0
Maximum Debt to Equity Ratio of less than:	4

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Nonrecourse Debt - Schedule of Outstanding Asset-Backed Nonrecourse Debt and Bank Loans (Detail) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Financial Instruments Owned and Pledged as Collateral [Line Items]
Debt issuance costs	$ (14)
Nonrecourse Asset-Backed Debt, Anticipated Balance at Maturity	0
Value of Assets Pledged, Equity interest	$ 41
Minimum [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Nonrecourse Asset-Backed Debt, Interest Rate	2.26%
Nonrecourse Asset-Backed Debt, Maturity Date	2017-12
Maximum [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Nonrecourse Asset-Backed Debt, Interest Rate	7.45%
Nonrecourse Asset-Backed Debt, Maturity Date	2032-12
HASI Sustainable Yield Bond 2013-1 [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Nonrecourse Asset-Backed Debt, Interest Rate	2.79%
Nonrecourse Asset-Backed Debt, Maturity Date	2019-12
Nonrecourse Asset-Backed Debt, Anticipated Balance at Maturity	$ 57
ABS Loan Agreement [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Nonrecourse Asset-Backed Debt, Interest Rate	5.74%
Nonrecourse Asset-Backed Debt, Maturity Date	2021-09
Nonrecourse Asset-Backed Debt, Anticipated Balance at Maturity	$ 17
HASI Sustainable Yield Bond 2015-1 [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Nonrecourse Asset-Backed Debt, Interest Rate	4.28%
Nonrecourse Asset-Backed Debt, Maturity Date	2034-10
HASI SYB Loan Agreement 2015-1 [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Nonrecourse Asset-Backed Debt, Interest Rate	4.34%
Nonrecourse Asset-Backed Debt, Maturity Date	2021-12
HASI SYB Loan Agreement 2015-2 [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Nonrecourse Asset-Backed Debt, Interest Rate	4.92%
Nonrecourse Asset-Backed Debt, Maturity Date	2023-12
HASI SYB Loan Agreement 2015-3 [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Nonrecourse Asset-Backed Debt, Interest Rate	4.92%
Nonrecourse Asset-Backed Debt, Maturity Date	2020-12
Nonrecourse Asset-Backed Debt, Anticipated Balance at Maturity	$ 132
Asset-Backed Nonrecourse Debt Agreement [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Other nonrecourse debt	88	$ 101
Debt issuance costs	(14)	(16)
Outstanding Balance	610	664
Value of Assets Pledged, Equity interest	$ 86	97
Description of Assets Pledged	Financing receivables
Asset-Backed Nonrecourse Debt Agreement [Member] | HASI Sustainable Yield Bond 2013-1 [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Outstanding Balance	$ 77	83
Value of Assets Pledged, Equity interest	$ 93	99
Description of Assets Pledged	Financing receivables
Asset-Backed Nonrecourse Debt Agreement [Member] | ABS Loan Agreement [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Outstanding Balance	$ 92	102
Value of Assets Pledged, Equity interest	$ 100	117
Description of Assets Pledged	Equity interest in Strong Upwind Holdings I, LLC
Asset-Backed Nonrecourse Debt Agreement [Member] | HASI Sustainable Yield Bond 2015-1 [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Outstanding Balance	$ 98	100
Value of Assets Pledged, Equity interest	$ 138	139
Description of Assets Pledged	Financing receivables, real estate and real estate intangibles
Asset-Backed Nonrecourse Debt Agreement [Member] | HASI SYB Loan Agreement 2015-1 [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Outstanding Balance	$ 76	90
Value of Assets Pledged, Equity interest	$ 100	117
Description of Assets Pledged	Equity interest in Strong Upwind Holdings II and III, LLC, related interest rate swap
Asset-Backed Nonrecourse Debt Agreement [Member] | HASI SYB Loan Agreement 2015-2 [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Outstanding Balance	$ 41	42
Value of Assets Pledged, Equity interest	$ 70	71
Description of Assets Pledged	Equity interest in Buckeye Wind Energy Class B Holdings LLC, related interest rate swap
Asset-Backed Nonrecourse Debt Agreement [Member] | HASI SYB Loan Agreement 2015-3 [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Outstanding Balance	$ 152	162
Value of Assets Pledged, Equity interest	$ 176	$ 175
Description of Assets Pledged	Residential Solar Financing receivables

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Nonrecourse Debt - Additional Information (Detail) - USD ($)			9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2016
Debt Instrument [Line Items]
Nonrecourse Asset-Backed Debt, Aggregate Principal Amount	$ 610,267,000	$ 663,791,000	$ 610,267,000
Ineffectiveness recorded on designated hedges	0	0
Reclassification out of Accumulated Other Comprehensive Income [Member]
Debt Instrument [Line Items]
Interest Expense	0	$ 0
Asset-Backed Nonrecourse Debt Agreement [Member] | HASI Sustainable Yield Bond 2015-1A ("HASI SYB") [Member]
Debt Instrument [Line Items]
Nonrecourse Asset-Backed Debt, Aggregate Principal Amount	$ 101,000,000		$ 101,000,000
Nonrecourse Asset-Backed Debt, Interest Rate	4.28%		4.28%
Nonrecourse Asset-Backed Debt, Maturity Date			2034-10
Asset-Backed Nonrecourse Debt Agreement [Member] | HASI Sustainable Yield Bond 2015-1B [Member]
Debt Instrument [Line Items]
Nonrecourse Asset-Backed Debt, Aggregate Principal Amount	$ 18,000,000		$ 18,000,000
Nonrecourse Asset-Backed Debt, Interest Rate	5.00%		5.00%
Nonrecourse Asset-Backed Debt, Maturity Date			2034-10

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Nonrecourse Debt - Schedule of Interest Rate Swaps that Are Designated as Cash Flow Hedges (Detail) - Cash Flow Hedging [Member] - Interest Rate Swap [Member] - USD ($)	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Derivatives, Fair Value [Line Items]
Notional Value	$ 255,000,000	$ 148,000,000
Fair Value	$ (6,200,000)	(600,000)
HASI SYB Loan Agreement 2015-1 [Member]
Derivatives, Fair Value [Line Items]
Hedged Rate	1.55%
Notional Value	$ 70,000,000	81,000,000
Fair Value	$ (800,000)	(300,000)
HASI SYB Loan Agreement 2015-1 [Member] | Minimum [Member]
Derivatives, Fair Value [Line Items]
Maturity	2015-12
HASI SYB Loan Agreement 2015-1 [Member] | Maximum [Member]
Derivatives, Fair Value [Line Items]
Maturity	2021-09
HASI SYB Loan Agreement 2015-1 [Member] | Base Rate [Member]
Derivatives, Fair Value [Line Items]
Base Rate	3 month Libor
HASI SYB Loan Agreement 2015-2 A [Member]
Derivatives, Fair Value [Line Items]
Hedged Rate	1.52%
Notional Value	$ 37,000,000	38,000,000
Fair Value	$ (400,000)	(100,000)
HASI SYB Loan Agreement 2015-2 A [Member] | Minimum [Member]
Derivatives, Fair Value [Line Items]
Maturity	2015-12
HASI SYB Loan Agreement 2015-2 A [Member] | Maximum [Member]
Derivatives, Fair Value [Line Items]
Maturity	2018-12
HASI SYB Loan Agreement 2015-2 A [Member] | Base Rate [Member]
Derivatives, Fair Value [Line Items]
Base Rate	3 month Libor
HASI SYB Loan Agreement 2015-2 B [Member]
Derivatives, Fair Value [Line Items]
Hedged Rate	2.55%
Notional Value	$ 29,000,000	29,000,000
Fair Value	$ (1,100,000)	$ (200,000)
HASI SYB Loan Agreement 2015-2 B [Member] | Minimum [Member]
Derivatives, Fair Value [Line Items]
Maturity	2018-12
HASI SYB Loan Agreement 2015-2 B [Member] | Maximum [Member]
Derivatives, Fair Value [Line Items]
Maturity	2024-12
HASI SYB Loan Agreement 2015-2 B [Member] | Base Rate [Member]
Derivatives, Fair Value [Line Items]
Base Rate	3 month Libor
HASI SYB Loan Agreement 2015-3 [Member]
Derivatives, Fair Value [Line Items]
Hedged Rate	2.34%
Notional Value	$ 119,000,000
Fair Value	$ (3,900,000)
HASI SYB Loan Agreement 2015-3 [Member] | Minimum [Member]
Derivatives, Fair Value [Line Items]
Maturity	2020-11
HASI SYB Loan Agreement 2015-3 [Member] | Maximum [Member]
Derivatives, Fair Value [Line Items]
Maturity	2028-08
HASI SYB Loan Agreement 2015-3 [Member] | Base Rate [Member]
Derivatives, Fair Value [Line Items]
Base Rate	1 month Libor

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Nonrecourse Debt - Schedule of Minimum Maturities of Nonrecourse Debt (Detail) $ in Millions	Sep. 30, 2016 USD ($)
Debt Disclosure [Abstract]
Maturity of Nonrecourse debt, 2016	$ 49
Maturity of Nonrecourse debt, 2017	40
Maturity of Nonrecourse debt, 2018	38
Maturity of Nonrecourse debt, 2019	95
Maturity of Nonrecourse debt, 2020	164
Maturity of Nonrecourse debt, Thereafter	238
Total minimum maturities	624
Deferred financing costs, net	(14)
Total nonrecourse debt	$ 610

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Income Tax - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Tax Holiday [Line Items]
Income tax (expense)	$ (41)	$ (24)	$ (123)	$ (77)
Effective income tax rate reconciliation, at federal statutory income tax rate, Percent			35.00%
Effective income tax rate reconciliation, State and local income taxes, Percent			5.00%
Maximum [Member]
Income Tax Holiday [Line Items]
Income tax (expense)	$ (100)	$ (100)	$ (100)	$ (100)

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Equity - Summary of Dividends Declared by Board of Directors (Detail) - $ / shares								9 Months Ended
	Oct. 13, 2016	Jul. 14, 2016	Apr. 07, 2016	Jan. 07, 2016	Oct. 08, 2015	Jul. 09, 2015	Apr. 09, 2015	Sep. 30, 2016
3/30/15 Record Date [Member]
Dividends Payable [Line Items]
Announced Date								Mar. 17, 2015
Record Date								Mar. 30, 2015
Pay Date								Apr. 09, 2015
Amount per share							$ 0.26
6/30/15 Record Date [Member]
Dividends Payable [Line Items]
Announced Date								Jun. 16, 2015
Record Date								Jun. 30, 2015
Pay Date								Jul. 09, 2015
Amount per share						$ 0.26
09/30/15 Record Date [Member]
Dividends Payable [Line Items]
Announced Date								Sep. 16, 2015
Record Date								Sep. 30, 2015
Pay Date								Oct. 08, 2015
Amount per share					$ 0.26
12/30/15 Record Date [Member]
Dividends Payable [Line Items]
Announced Date								Dec. 15, 2015
Record Date								Dec. 30, 2015
Pay Date								Jan. 07, 2016
Amount per share				$ 0.30
3/30/2016 Record Date [Member]
Dividends Payable [Line Items]
Announced Date								Mar. 15, 2016
Record Date								Mar. 30, 2016
Pay Date								Apr. 07, 2016
Amount per share			$ 0.30
07/06/16 Record Date [Member]
Dividends Payable [Line Items]
Announced Date								Jun. 07, 2016
Record Date								Jul. 06, 2016
Pay Date								Jul. 14, 2016
Amount per share		$ 0.30
10/05/16 Record Date [Member]
Dividends Payable [Line Items]
Announced Date								Sep. 15, 2016
Record Date								Oct. 05, 2016
Pay Date								Oct. 13, 2016
Subsequent Event [Member] | 10/05/16 Record Date [Member]
Dividends Payable [Line Items]
Amount per share	$ 0.30

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Equity - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amount of potential offer and sale of securities			$ 13,914,000	$ 10,794,000
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amount of potential offer and sale of securities			$ 500,000,000
Restricted Common Stock [Member] | 2013 Plan [Member] | Employees and Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares awarded			367,753
Restricted Common Stock [Member] | 2013 Plan [Member] | Employees and Directors [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted common shares vesting years			2019
Restricted Common Stock [Member] | 2013 Plan [Member] | Employees and Directors [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted common shares vesting years			2016
Restricted Common Stock [Member] | 2013 Plan [Member] | Certain Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares awarded			291,000
Restricted Incentive [Member] | 2013 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense	$ 3,000,000	$ 3,000,000	$ 7,000,000	$ 8,000,000
Unrecognized compensation expense	12,000,000		$ 12,000,000
Weighted-average term in which unrecognized compensation expense is expected to be recognized			2 years
Assumed forfeiture rate for calculation of equity-based compensation expense			5.00%
Restricted Incentive [Member] | 2013 Plan [Member] | Maximum [Member] | Accounting Standards Update 2016-09 [Member] | Retained Earnings [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Adjustment to retained earnings for the equity based compensation expense	$ 1,000,000		$ 1,000,000

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Equity - Schedule of Common Stock Public Offerings and ATM Offerings (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Net proceeds from follow-on from public offering	$ 91,167	$ 81,546
5/4/2015 Closing Date [Member] | Public Offering [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Public offerings and ATM offerings of common stock, Closing Date	May 04, 2015
Public offerings of common stock, Shares Issued	4,600
Public offerings of common stock, Price Per Share	$ 18.50
Net proceeds from follow-on from public offering	$ 82,000
10/19/2015 Closing Date [Member] | Public Offering [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Public offerings and ATM offerings of common stock, Closing Date	Oct. 19, 2015
Public offerings of common stock, Shares Issued	5,750
Public offerings of common stock, Price Per Share	$ 18.00
Net proceeds from follow-on from public offering	$ 99,000
6/21/2016 Closing Date [Member] | Public Offering [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Public offerings and ATM offerings of common stock, Closing Date	Jun. 21, 2016
Public offerings of common stock, Shares Issued	4,600
Public offerings of common stock, Price Per Share	$ 19.78
Net proceeds from follow-on from public offering	$ 91,000
5/09/2016 to 6/30/2016 Closing Date [Member] | At the Market Offering [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Public offerings of common stock, Shares Issued	65
Public offerings of common stock, Price Per Share	$ 20.31
Net proceeds from follow-on from public offering	$ 1,000
5/09/2016 to 6/30/2016 Closing Date [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Public offerings and ATM offerings of common stock, Closing Date	May 09, 2016
5/09/2016 to 6/30/2016 Closing Date [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Public offerings and ATM offerings of common stock, Closing Date	Jun. 30, 2016

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Equity - Summary of Unvested Shares of Restricted Common Stock (Detail) - Restricted Incentive [Member] - USD ($) $ / shares in Units, $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance, Restricted Shares of Common Stock	1,248,069	964,820
Granted, Restricted Shares of Common Stock	658,753	586,648
Vested, Restricted Shares of Common Stock	(572,174)	(285,289)
Forfeited, Restricted Shares of Common Stock	(11,188)	(18,110)
Ending Balance, Restricted Shares of Common Stock	1,323,460	1,248,069
Beginning Balance, Weighted Average Share Price	$ 15.16	$ 13.41
Granted, Weighted Average Share Price	18.62	17.29
Vested, Weighted Average Share Price	13.79	13.61
Forfeited, Weighted Average Share Price	17.25	15.54
Ending Balance, Weighted Average Share Price	$ 17.46	$ 15.16
Beginning Balance, Fair Value of Restricted Shares of Common Stock	$ 18.9	$ 12.9
Granted, Fair Value of Restricted Shares of Common Stock	12.3	10.2
Vested, Fair Value of Restricted Shares of Common Stock	(7.9)	(3.9)
Forfeited, Fair Value of Restricted Shares of Common Stock	(0.2)	(0.3)
Ending Balance, Fair Value of Restricted Shares of Common Stock	$ 23.1	$ 18.9

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Earnings per Share of Common Stock - Schedule of Computation of Basic and Diluted Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Numerator:
Net income attributable to controlling shareholders and participating securities	$ 3,329	$ 2,119	$ 10,244	$ 5,712
Less: Dividends paid on participating securities	(400)	(300)	(1,300)	(1,000)
Undistributed earnings attributable to participating securities	0	0	0	0
Net income attributable to controlling shareholders	$ 2,900	$ 1,800	$ 8,900	$ 4,700
Denominator:
Weighted-average number of common shares - basic	41,988,036	31,221,982	38,924,977	29,046,742
Weighted-average number of common shares - diluted	41,998,036	31,221,982	38,924,977	29,046,742
Basic earnings per common share	$ 0.07	$ 0.06	$ 0.23	$ 0.16
Diluted earnings per common share	$ 0.07	$ 0.06	$ 0.23	$ 0.16
Other Information:
Weighted-average number of OP units	284,992	284,992	284,992	298,218
Unvested restricted common stock outstanding			1,323,460	1,297,584

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Equity Method Investments in Affiliate - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Schedule of Equity Method Investments [Line Items]
Income (loss) from equity method investments in affiliates	$ 1,331	$ 187	$ 2,677	$ (162)
Strong Upwind Holdings LLC [Member]
Schedule of Equity Method Investments [Line Items]
Income (loss) from equity method investments in affiliates	$ 1,300	$ 200	$ 2,700	$ (200)

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Equity Method Investments in Affiliate - Summary of Consolidated Financial Position and Results of Operations of Significant Holding Companies, Accounted for Using Equity Method (Detail) - Strong Upwind Holdings LLC [Member] - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Schedule Of Results Related To Equity Accounted Investees [Line Items]
Current Assets	$ 57		$ 72
Total Assets	1,651		1,724
Current Liabilities	18		18
Total Liabilities	68		68
Members' Equity	1,583		$ 1,656
Revenue	66	$ 77
Income from Continuing Operations	(5)	21
Net Income	$ (5)	$ 21