Equity

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Equity

Equity

Dividends and Distributions

Our Board declared the following dividends in 2022, 2023, and 2023:

Announced Date	Record Date		Pay Date	Amount per share
2/17/2022	04/4/2022		04/11/2022	$	0.375
5/3/2022	07/5/2022		07/12/2022	0.375
8/4/2022	10/4/2022		10/11/2022	0.375
11/3/2022	12/28/2022	(1)	01/6/2023	0.375
02/16/2023	04/3/2023		04/10/2023	0.395
05/4/2023	07/5/2023		07/12/2023	0.395
08/3/2023	10/4/2023		10/11/2023	0.395
11/2/2023	12/29/2023	(1)	01/12/2024	0.395
02/15/2024	04/5/2024		04/19/2024	0.415

(1)These dividends are treated as distributions in the following year for tax purposes.

Equity Offerings

We have an effective universal shelf registration statement registering the potential offer and sale, from time to time and in one or more offerings, of any combination of our common stock, preferred stock, depositary shares, debt securities, 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, to or through a market maker or into an existing trading market on an exchange or otherwise. In January 2023, we established a dividend reinvestment and stock purchase plan, allowing stockholders and holders of OP Units (including LTIP Units) to purchase shares of our common stock by reinvesting cash dividends or distributions received. We completed the following public offerings (including ATM issuances) of our common stock in 2022 and 2023:

Date/Period	Common Stock Offerings	Shares Issued	Price Per Share (1)		Net Proceeds (2)
		(amounts in millions, except per share amounts)
Q1 2022	ATM	1.050	$	48.14	$	50
Q2 2022	ATM	0.731	38.91		28
Q3 2022	ATM	1.346	36.85		49
Q4 2022	ATM	1.996	31.41		62
Q1 2023	ATM	0.763	31.31		24
5/30/2023	Public Offering	15.000	22.23		333
Q2 2023	ATM	0.053	26.07		1
Q3 2023	ATM	4.394	24.71		107
Q4 2023	ATM	1.006	28.81		29

(1)Represents the average price per share at which investors in our ATM offerings purchased our shares.

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

Equity-based Compensation Awards

We have 7,500,000 awards authorized for issuance under our current equity-based compensation plan. As of December 31, 2023, we have issued awards with service, performance and market conditions and have 6,340,415 awards remaining available for issuance. During the year ended December 31, 2023, our Board awarded employees and directors 765,767 shares of restricted stock, restricted stock units, and LTIP Units that vest from 2024 to 2027. Refer to Note 4 for background on the LTIP Units.

A summary of equity-based compensation expense and the fair value of shares and LTIP Units vested on the vesting date for the years ended December 31, 2023, 2022, and 2021 is shown below.

	2023		2022		2021
	(in millions)
Equity-based compensation expense	$	18	$	20	$	17
Fair value of awards vested on vesting date	11		34		44

The total unrecognized compensation expense related to awards of shares of restricted stock, restricted stock units, and LTIP Units was approximately $20 million as of December 31, 2023. We expect to recognize compensation expense related to these awards over a weighted-average term of approximately 2 years. A summary of the unvested shares of restricted common stock that have been issued is as follows:

	Restricted Shares of Common Stock	Weighted Average Grant Date Fair Value		Value
		(per share)		(in millions)
Ending Balance—December 31, 2021	193,548	$	38.66	$	7.5
Granted	71,911	37.32		2.7
Vested	(93,646)	46.46		(4.3)
Forfeited	(3,361)	46.83		(0.2)
Ending Balance—December 31, 2022	168,452	$	33.59	$	5.7
Granted	77,938	30.03		2.3
Vested	(98,367)	29.18		(2.9)
Forfeited	(12,356)	42.74		(0.5)
Ending Balance—December 31, 2023	135,667	$	33.90	$	4.6

A summary of the unvested shares of restricted stock units that have market-based vesting conditions that have been issued is as follows:

	Restricted Stock Units (1)	Weighted Average Grant Date Fair Value		Value
		(per share)		(in millions)
Ending Balance—December 31, 2021	78,366	$	35.32	$	2.8
Granted	24,790	58.77		1.5
Incremental performance shares granted	39,730	25.12		1.0
Vested	(79,460)	25.12		(2.1)
Forfeited	(5,022)	49.00		(0.2)
Ending Balance—December 31, 2022	58,404	$	51.03	$	3.0
Granted	63,446	39.29		2.4
Incremental performance shares granted	7,305	34.63		0.3
Vested	(18,041)	35.17		(0.6)
Forfeited	(16,460)	30.90		(0.5)
Ending Balance—December 31, 2023	94,654	$	48.42	$	4.6

(1)    As discussed in Note 2, restricted stock units with market-based vesting conditions can vest between 0% and 200% subject to both the absolute performance of our common stock as well as relative performance compared to a group of peers. The incremental performance shares granted relate to the vesting of an award at the 200% level.

A summary of the unvested LTIP Units that have time-based vesting conditions that have been issued is as follows:

	LTIP Units (1)	Weighted Average Grant Date Fair Value		Value
		(per share)		(in millions)
Ending Balance—December 31, 2021	384,046	$	43.15	$	16.6
Granted	174,340	44.08		7.7
Vested	(279,123)	44.64		(12.5)
Forfeited	(2,497)	46.08		(0.1)
Ending Balance—December 31, 2022	276,766	$	42.21	$	11.7
Granted	342,349	30.08		10.3
Vested	(142,041)	39.21		(5.5)
Forfeited	—	—		—
Ending Balance—December 31, 2023	477,074	$	34.40	$	16.5

(1)    See Note 4 for information on the vesting of LTIP Units.

A summary of the unvested LTIP Units that have market-based vesting conditions that have been issued is as follows:

	LTIP Units (1)	Weighted Average Grant Date Fair Value		Value
		(per share)		(in millions)
Ending Balance—December 31, 2021	347,478	$	31.61	$	11.0
Granted	125,550	54.77		6.9
Incremental performance shares granted	149,000	26.70		4.0
Vested	(298,000)	26.70		(8.0)
Forfeited	—	—		—
Ending Balance—December 31, 2022	324,028	$	42.84	$	13.9
Granted	282,034	39.29		11.1
Incremental performance shares granted	40,394	19.94		0.8
Vested	(96,496)	19.94		(1.9)
Forfeited	(56,102)	4.56		(0.3)
Ending Balance—December 31, 2023	493,858	$	47.76	$	23.6

(1)    See Note 4 for information on the vesting of LTIP Units. LTIP Units with market-based vesting conditions can vest between 0% and 200% subject to both the absolute performance of our common stock as well as relative performance compared to a group of peers. The incremental performance shares granted relate to the vesting of awards at the actual performance level.

NOL Stockholder Rights Plan

In 2023, we entered into a Tax Benefits Preservation Plan (“The Plan”), which is designed to protect our tax benefits in connection with any "ownership change" within the meaning of Section 382 of the Internal Revenue Code of 1986. Under the Plan, we declared a dividend distribution of one right (a “Right”) for each outstanding share of our common stock to be paid to all record holders of our common stock at the close of business on November 21, 2023. The Plan is intended to reduce the risk that our ability to use net operating losses ("NOLs") and certain other Tax Benefits will become substantially limited as the result of an “ownership change”.

Pursuant to the Plan, if a stockholder (or group) becomes a 5% stockholder without meeting certain exceptions, the Rights become exercisable upon board approval and entitle stockholders (other than the 5% stockholder or group causing the rights to become exercisable) to purchase additional of our common shares at a significant discount, resulting in significant dilution in the economic interest and voting power of the 5% stockholder or group causing the Rights to become exercisable. Stockholders owning 5% or more of our outstanding shares at the time the Plan was adopted were grandfathered and will only cause the Rights to distribute and become exercisable if they acquire any additional HASI shares. Under the Plan, the Board has the ability to determine in its sole discretion that any person shall not be deemed an acquiring person and therefore that the Rights shall not become exercisable if such person becomes a 5% stockholder. The adoption of the Plan and the dividend distribution will not have an impact on our consolidated financial statements.