HASI Adopts Tax Benefit Preservation Plan for Net Operating Losses

Hannon Armstrong Sustainable Infrastructure Capital, Inc. ("HASI," "we," "our" or the "Company") (NYSE: HASI), today announced that its Board of Directors (the "Board") has adopted a tax benefits preservation plan (the "NOL Plan") to help preserve the value of its net operating losses ("NOLs") and other tax attributes (together with NOLs, "Tax Attributes").

The Company estimates that its cumulative NOL carryforwards exceed $465 million, as of December 31, 2022, which together with its other tax attributes can be utilized in certain circumstances to reduce future U.S. corporate income tax liabilities. However, the Company’s ability to use its Tax Attributes may become substantially limited if HASI were to experience an "ownership change" as defined under Section 382 of the Internal Revenue Code. In general, an ownership change would occur if one or more stockholders beneficially owning at least five percent of the outstanding HASI stock (or deemed to be a "5% stockholder" under Section 382) increase their aggregate ownership in HASI by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. The NOL Plan reduces the risk of an ownership change by deterring any person from obtaining beneficial ownership of 4.9 percent or more of HASI stock.

In connection with its adoption of the NOL Plan, the Board declared a dividend of one right to purchase junior participating preferred stock, which are referred to as "rights," for each outstanding share of HASI common stock. The dividend will be payable to holders of record as of the close of business on November 21, 2023. Any shares of HASI common stock issued after the record date will be issued together with a right. The rights will become exercisable after a person or group, without the approval of the Board, acquires beneficial ownership of 4.9 percent or more of HASI stock or commences a tender offer or exchange offer for HASI stock that would result in such beneficial ownership of 4.9 percent or more. Existing HASI stockholders that, as of the date of this press release, beneficially own (together with their affiliates and associates) in excess of 4.9 percent of HASI’s stock are "grandfathered in" at their current ownership level, but the rights will become exercisable if any such existing HASI stockholders, without Board approval, acquires additional shares (other than as a result of a stock repurchase, dividend or split). If the rights become exercisable, all holders of rights, other than the person or group whose acquisition of HASI stock triggered the rights, will be entitled to purchase HASI common stock at a 50 percent discount to its then-current market value. Rights held by the person or group whose acquisition of HASI stock triggered the rights will become void and will not be exercisable or eligible for exchange. In addition, the Board may choose to exchange all or any portion of the rights, once they become exercisable, for one share of HASI common stock per right (subject to adjustment under the NOL Plan). The distribution of the rights is not taxable to stockholders or to the Company.