Hannon Armstrong Sustainable Infrastructure Capital, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Non-Controlling Interest

Non-Controlling Interest

6 Months Ended

Jun. 30, 2014

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 other limited partners are included in non-controlling interest on our condensed consolidated balance sheets. As of June 30, 2014, the Operating Partnership had 23,091,209 OP units outstanding, of which 98.5% were owned by us and 1.5% were owned by other limited partners. The outstanding OP units held by outside limited partners are redeemable for cash, or at our option, for a like number of shares of our common stock.

In January 2014, we agreed to not exercise our right under the Operating Partnership agreement to deliver shares of our common stock in lieu of cash upon a request for redemption of OP units held our limited partners and instead agreed to redeem such OP units for cash until such time that we have an effective registration statement covering the resale of shares of our common stock issuable upon exchange of OP units held by such limited partners. As a result, we are reporting our non-controlling interest that is redeemable for cash outside of equity as of June 30, 2014. During the three and six months ended June 30, 2014, we redeemed 7,406 and 119,983 OP units held by our non-controlling interest holders for cash of $0.1 million and $1.6 million, respectively. Our remaining non-controlling interest holders held 342,392 OP units as of June 30, 2014.

The following is an analysis of the controlling and non-controlling interest from December 31, 2013, to June 30, 2014:


	Controlling Interest			Non-Controlling Interest Holders			Total
	(amounts in thousands)
Total Non-Controlling Interest and Equity—December 31, 2013	$	146,525		$	4,099		$	150,624
Net income attributable to interest holders		5,581			107			5,688
Issuance of common stock		70,379			—			70,379
Redemption of OP units		(557	)		(1,064	)		(1,621	)
Repurchase of common stock		(205	)		—			(205	)
Equity-based compensation		1,938			32			1,970
Distributions		(8,634	)		(152	)		(8,786	)
Change in accumulated other comprehensive income		2,196			42			2,238
Tax basis difference on contributed asset		1,818			39			1,857
Redemption value change for non-controlling interest redeemable for cash		(1,815	)		1,815			—

		217,226			4,918			222,144
Less Non-Controlling Interest Redeemable for cash		—			(4,918	)		(4,918	)

Total Non-Controlling Interest and Equity—June 30, 2014	$	217,226		$	—		$	217,226

The following is an analysis of the controlling and non-controlling interest from April 23, 2013, the date of our IPO, to June 30, 2013:


	Controlling Interest			Non-Controlling Interest Holders			Total
	(amounts in thousands)
Equity immediately after IPO	$	168,266		$	—		$	168,266
Establishment of non-controlling interest during formation transaction		(4,649	)		4,649			—
Net loss attributable to interest holders		(4,972	)		(141	)		(5,113	)
Change in accumulated other comprehensive income		92			3			95

Total Non-Controlling Interest and Equity—June 30, 2013	$	158,737		$	4,511		$	163,248

Allocation of Profit and Loss and Cash Distributions prior to our IPO

Prior to the IPO, all profits, losses and cash distributions of the Predecessor were allocated based on the percentages as follows:


	Prior to April 23, 2013
MissionPoint HA Parallel Fund, L.P.		70	%
Jeffrey W. Eckel, Chief Executive Officer		18	%
Other management and employees of the Predecessor		12	%

Upon the completion of the IPO, the Preferred Units and Common Units in the Predecessor were exchanged for shares of our common stock or OP units in the Operating Partnership, or for certain unit holders in the Predecessor, were redeemed for cash.

- Definition

The entire disclosure for noncontrolling interest in consolidated subsidiaries, which could include the name of the subsidiary, the ownership percentage held by the parent, the ownership percentage held by the noncontrolling owners, the amount of the noncontrolling interest, the location of this amount on the balance sheet (when not reported separately), an explanation of the increase or decrease in the amount of the noncontrolling interest, the noncontrolling interest share of the net Income or Loss of the subsidiary, the location of this amount on the income statement (when not reported separately), the nature of the noncontrolling interest such as background information and terms, the amount of the noncontrolling interest represented by preferred stock, a description of the preferred stock, and the dividend requirements of the preferred stock.

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