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  "documentTitle": "Hannon Armstrong Sustainable Infrastructure Capital (HASI)",
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  "authorName": "Carson Block",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2022-07-12 00:00:00",
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  "notes": "The slide includes a table detailing SunStrong's materiality to HASI's loan balance and commercial receivables.",
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      "text": "HASI, in our view, improperly applies widely-used HLBV accounting method to misleadingly inflate income and operating cash flow.",
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      "text": "HASI uses an accounting loophole to book non-cash Hypothetical Liquidation at Book Value (HLBV) income... HASI further inflates earnings by applying unreasonably low discount rates... HASI also inflates earnings by booking non-cash PIK interest income...",
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      "text": "SunStrong Loans as % of Total Commercial Receivables: 29.0%",
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      "text": "HASI, in our view, improperly applies widely-used HLBV accounting method to misleadingly inflate income and operating cash flow. We therefore adjust its 2021 reported $126.4 million income from EMIs to a loss ranging from ($226.7 million) to ($166.8 million). Because of how HASI abuses HLBV accounting, it is able to record non-cash and unrealizable HLBV income, regardless of how a project is performing.",
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      "text": "HASI's loans to SunStrong were 54.5% of its total loans to EMIs as of year-end 2021, and 29.0% of HASI's commercial receivables. However, HASI has not disclosed the number of loans to SunStrong, their associated interest rates or maturities, or the amount paid in PIKs. Similarly, HASI has not disclosed asset sales like the Helix transaction, or their impact on HASI cash flows. We illustrate SunStrong's materiality to HASI below:",
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      "text": "indicated by the large volumes of mezzanine financing provided by HASI, averaging ~$300 million over the last 3 years and often with a PIK option, as well as HASI's ability to control the JV's decision to take on new loans, refinance debts, and/or make distributions to itself.",
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      "text": "SunStrong Makes Up Over Half of HASI's EMI Loan Balance",
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      "text": "GAAP Income Manipulation Technique #1: HASI Misleads on Earnings From Early-Stage Projects Due to Improperly Using a Loophole in HLBV Accounting",
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      "text": "HASI Books Three Significant Non-Cash, Unrealizable Income Streams",
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