Ha Sustainable Infrastructure Capital, Inc. · NYSE:HASI
Ha Sustainable Infrastructure Capital — Investor Presentation (November 2024)
50 slides from Ha Sustainable Infrastructure Capital's investor presentation, November 2024
Slide 1: Corporate Profile November 2024
Corporate Profile November 2024
Slide 2: Forward Looking Statements
Forward Looking Statements Some of the information contained herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used herein, words such as "believe," "expect," "an
Slide 3: Investing in Climate Solutions
Investing in Climate Solutions We actively partner with clients to deploy real assets that facilitate the energy transition Key Stats $13 Billion 10% CAGR 13% 8m Managed Assets1 Adjusted EPS2 Annual Total Return3 MT CO2 Avoided Annually4 Markets & Asset Classes Behind-the-Meter Grid-Connected Fuels,
Slide 4: Key Pillars of our Business
Key Pillars of our Business Climate Clients Assets Programmatic Preeminent Climate Invest in Income Partnerships Are a Pure Play Generating Real Assets Differentiated Approach Capital to Facilitate the Solve Client Problems Proven Technologies Energy Transition Measure and Report Never Compete Non-C
Slide 5: Climate Solutions are a Multi-Decade Growth Opportunity
Climate Solutions are a Multi-Decade Growth Opportunity U.S. Clean Energy Capacity Installed U.S. Annual Investment in Energy Transition ~1,500 ~$1t GW ~300 GW ~$300b 20231 20352 20233 2024-20504 HASI is well-positioned to maintain or grow market share 1. Cumulative installed capacity at the end of
Slide 6: Client Ambition Expands our Opportunity Set
Client Ambition Expands our Opportunity Set Pipelines expanding with BTM GC increased focus on energy 46% 30% transition and IRA tailwinds HASI 12-mo Pipeline1 Expansion into adjacent >$5.5b decarbonization markets FTN 24% >$25b in 2024 estimated US Pipeline of >150 opportunities and >30 project cap
Slide 7: Assets Align with Common Attributes
Assets Align with Common Attributes Real Contracted Assets Cashflows Top-Tier Proven Clients Technologies $13b Managed Assets1 High-Quality, Climate Incented Positive Offtakers 1. As of 6/30/24 7
Slide 8: Unique Value Proposition to Investors and Clients
Unique Value Proposition to Investors and Clients Clients Investors Trusted Partnership With Access to Energy Transition Aligned Goals in Lower-Risk Structure Programmatic Transactions Non-Cyclical Improve Efficiencies Business Model Market and Diverse End Markets Policy Expertise Flexible and Attri
Slide 9: Low P/E Multiple Relative to Comparable Sectors
Low P/E Multiple Relative to Comparable Sectors 45x 28x 22x 20x 16x 12x Clean Energy Category 1 Asset 2 Category Midcap 3 Category Clean Energy Category 4 Midcap Electric HASI Manufacturers Managers MLPs Providers Utilities Note: Based on stock prices and S&P CapIQ consensus 2024 estimates as of Nov
Slide 10: Investments, Portfolio and Managed Assets
Investments, Portfolio and Managed Assets
Slide 11: Programmatic Clients Drive Repeat Business
Programmatic Clients Drive Repeat Business We invest in partners, and our programmatic …in multiple sectors and technologies partnership drives repeat and expanding business… within the energy transition Commencement Transactions Asset Classes 2001 >100 2 >360 11.4 GW 2001 >50 3 Energy of Grid-Conne
Slide 12: Consistent, Diversified Investment Volumes
Consistent, Diversified Investment Volumes Closed Transactions 2020-20231: $2.3b Community $1.9b Solar $1.8b 18% $1.7b Other Community Solar Resi Solar C&I 26% Resi Solar Public Sector Public Public Sector Sector Onshore FTN 42% 27% Wind FTN 38% Onshore Wind 30% GC Solar GC GC Solar Solar 30% 18% 20
Slide 13: Managed Assets Have Grown by >80% since 2020
Managed Assets Have Grown by >80% since 2020 Managed Assets1 ($b) Closed Transactions ($m) $13.1 Closed Transactions YTD2 $1.2b $12.3 $9.8 Public Sector $8.8 25% $7.2 FTN 17% Resi Solar 14% $6.2 $6.3 $2.9 $3.6 $4.3 GC Solar 13% 2020 2021 2022 2023 3Q24 Community Solar 10% C&I 7% Managed Assets Portf
Slide 14: Portfolio at $6.3b, up 15% YoY
Portfolio at $6.3b, up 15% YoY Portfolio at 9/30/241 ($b) Portfolio New Asset Yields2 ~10.5% GC Solar Resi 19% >8.5% Solar 29% $6.3b Wind 19% Community Solar 8% C&I FTN 7% 14% 3 Public Sector 2023 YTD 2024 YTD 3 Other 3% 1% Portfolio growth YTD reflects $400m of rotation out New portfolio asset yiel
Slide 15: Financial Performance & Funding Platform
Financial Performance & Funding Platform
Slide 16: Consistent High Growth in Key Metrics
Consistent High Growth in Key Metrics Adjusted EPS1 Adjusted NII1 CAGR: 12% CAGR: 28% $2.08 $2.23 $217 $1.88 $180 $1.55 $m $1.40 $134 $82 $88 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Gain on Sale, Fees, and Securitization Income Off Balance Sheet Managed Assets1 CAGR: 23% Portfolio CAGR: 19
Slide 17: Q3 2024 Income Statement Detail
Q3 2024 Income Statement Detail Adjusted Adjusted 3Q23 3Q24 Net Investment Income1 EPS1 $192 $1.83 $1.70 GAAP Diluted EPS $0.20 ($0.17) $160 +8% +20% Adjusted EPS1 $0.62 $0.52 GAAP NII $17.0m $4.8m 2023 YTD 2024 YTD 2023 YTD 2024 YTD Recurring Capital Light Income Upfront Capital Light Income Adjust
Slide 18: 2024-26 Guidance Bridge to Long-Term Business Model
2024-26 Guidance Bridge to Long-Term Business Model Adjusted EPS1 Dividend Per Share (DPS) Long-Term Business Model 10% CAGR 50% payout ratio (Realized 2014-2023 CAGR of 10%) 2024 – 2026 Guidance 8-10% CAGR2 60-70% payout ratio Guidance Continued DPS growth Primary upside potential Adjusted EPS1 whi
Slide 19: Growing Both Dividend & Retained Earnings
Growing Both Dividend & Retained Earnings $2.97 $2.81 Adj. EPS1 …By 2030 DPS2 $2.23 $2.08 60-70% payout Equity Primarily $1.88 Generated Through $1.55 $1.58 Retained Earnings $1.50 $1.40 $1.36 $1.40 $1.34 Continued Dividend Growth 2019 2020 2021 2022 2023 2026 Payout Target of 96% 88% 74% 72% 71% 60
Slide 20: Evolution of the Funding Platform
Evolution of the Funding Platform Primarily Access Access to Access funded by to public unsecured to private securitizations equity corporate infrastructure debt capital Pre-IPO 2013 2019 2024 Initial Corporate CarbonCount Public Offering Debt Ratings Holdings 1 CCH1 is a Significant Milestone in th
Slide 21: Effectively Navigating a Higher Interest Rate Environment
Effectively Navigating a Higher Interest Rate Environment 12.4% 11.8% 11.1% 11.2% 11.4% 10.5% 10.7% 7.9% 8.1% 7.6% 7.6% 7.5% 7.5% 6.8% 5.4% 5.6% 4.9% 5.1% 5.0% 4.6% 4.3% 2018 2019 2020 2021 2022 2023 Q3 2024 1 2 3 Adjusted ROE Portfolio Yield Interest Expense / Avg Debt Balance Gain on sale contribu
Slide 22: Ample Liquidity to Invest in Our Pipeline
Ample Liquidity to Invest in Our Pipeline Revolver Largely Undrawn Debt Maturities Extend out to 20341 Cash CP $1,000 Secured Facility >$1.3b $500 Liquidity Sources1 Unsecured Revolver $0 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Credit facilities, TLA Convertible Notes Senior Unsecured
Slide 23: Adjusted Cash from Operations Plus Other Portfolio Collections
Adjusted Cash from Operations Plus Other Portfolio Collections1 $ millions2 3Q24 (TTM) 2023 2022 Cash collected from our Portfolio $815 $442 $424 Cash collected from sale of assets3 $259 $34 $47 Cash used for compensation and benefits and G&A expenses ($79) ($79) ($64) Interest paid4 ($170) ($138) (
Slide 24: Summary of Total Debt and Hedge Portfolio
Summary of Total Debt and Hedge Portfolio Debt Facility Debt Amount (millions) 1 Interest Rate2 Maturity Year Corporate Senior Unsecured Notes $1,000 3.38% 2026 Corporate Senior Unsecured Notes $750 8.00% 2027 Term Loan A $250 5.71% 2027 Convertible Notes $403 3.75% 2028 Corporate Senior Unsecured N
Slide 25: Sustainability & Impact
Sustainability & Impact
Slide 26: Unwavering Commitment to Climate Action and Diversity
Unwavering Commitment to Climate Action and Diversity Engage in Meaningful Community Investment through the HASI Foundation Since its inception in 2020, HASI has declared over $6.5m in social dividends to fund the Foundation’s climate justice initiatives Update 2023 Climate Solutions Climate Solutio
Slide 27: 3Q24 Sustainability and Impact Highlights
3Q24 Sustainability and Impact Highlights Ranked top 95th Percentile of Named Among Newsweek’s HASI Foundation Grant to Support Peer Group by S&P Corporate Greenest Companies 2025 in Energy Industry Fellowships for Sustainability Assessment Specialty Finance Category HBCU Students Carbon Emissions1
Slide 28: CarbonCount: Transparent, Comparable, Accountable
CarbonCount: Transparent, Comparable, Accountable Measuring the Climate Impact of Every Investment CarbonCount is a proprietary scoring tool for evaluating real assets to determine the efficiency by which each dollar of invested capital avoids annual carbon emissions (CO2e) Annual Hourly MWh Generat
Slide 29: Appendix: Market Highlights & Investment Examples
Appendix Market Highlights & Investment Examples
Slide 30: GC Market Outlook
GC Market Outlook HASI’s GC business consists of utility-scale wind, solar and storage investments GC Capacity Forecast to Grow by ~450 GW by 20301 Strong Fundamentals With Tremendous Growth 800 700 Most cost-effective 600 energy source Gigawatts (GW) 500 400 300 Required for corporates 200 and util
Slide 31: BTM Market Outlook
BTM Market Outlook High growth enabled by favorable legislation, technology advancement and strong demand $131b $131b of cumulative 100% investments through 20261 90% 80% 35% 35% 44% Share of annual DER capex 44% 47% 47% 51% 51% 70% Key Demand Drivers: 60% 50% Emissions / Resilience / 40% Energy Cos
Slide 32: Capturing Decarbonization Opportunities Beyond the Power Sector
Capturing Decarbonization Opportunities Beyond the Power Sector Carbon is Everywhere U.S. GHG Emissions by Sector1 HASI Time to Scale Grid-Connected / Behind-the-Meter Now Climate Solutions expanding to include RNG Fleet Decarbonization Industrial, Transport, Electricity Transport Agriculture, and B
Slide 33: Illustrative Investments
Illustrative Investments Fuels, Transport Fuels, Transport Behind-the-Meter Grid-Connected & Nature & Nature Renewable C&I Wind Ecological Natural Gas Solar & Solar Restoration $125 million <$30 million >1.3 GW >$40 million Senior debt investment with an Equity investment with a solar Minority stake
Slide 34: Illustrative Investments
Illustrative Investments Fuels, Transport Behind-the-Meter Behind-the-Meter Grid-Connected & Nature Residential Microgrid Solar Fleet Solar Resiliency Land Decarbonization >$200 million >$20 million >$100 million >$70 million Investment in a portfolio of high Investment in energy savings Acquisition
Slide 35: Appendix: Risk & Underwriting
Appendix Risk & Underwriting
Slide 36: Strong Portfolio with Positive Credit Attributes
Strong Portfolio with Positive Credit Attributes Recent Portfolio Performance Positive Credit Attributes Rating Description Performance Metric Asset Class Portfolio(%)6 Structural Seniority Obligor Credit > 355k consumers WAVG 1 Performing1 ~99% Residential 29% Typically Preferred FICO: “Very Good”
Slide 37: Robust and Disciplined Underwriting and Monitoring
Robust and Disciplined Underwriting and Monitoring Primary Underwriting Variability of Primary Post-Closing Activities Metrics Performance Credit Quality Collection Residential Monitoring delinquencies and defaults (% of Re-contracting Revenue Solar total value) Regulatory Savings to Customer Grid-
Slide 38: Diversified Offtakers with Limited Concentration
Diversified Offtakers with Limited Concentration Residential Solar Community Solar Corporate / Utilities / P3 # of active # of Projects >80 >130 High Quality and Primarily >310k customers Investment Grade Offtakers WA FICO 746 # of States 5 LA Unified School District 1.9% University of Iowa 1.9% Avg
Slide 39: Appendix: Recent Financials
Appendix Recent Financials 39
Slide 40: Explanatory Notes
Explanatory Notes Adjusted Cash Flow from Operations plus Other Portfolio Collections We operate our business in a manner that considers total cash collected from our portfolio and making necessary operating and debt service payments to assess the amount of cash we have available to fund dividends a
Slide 41: Supplemental Financial Data
Supplemental Financial Data Adjusted Earnings and Earnings on Equity Method Investments We calculate Adjusted earnings as GAAP net income (loss) excluding non-cash equity compensation expense, provisions for loss on receivables, amortization of intangibles, non-cash provision (benefit) for taxes, ga
Slide 42: Supplemental Financial Data
Supplemental Financial Data Managed Assets As we both consolidate assets on our balance sheet and securitize assets, certain of our receivables and other assets are not reflected on our balance sheet where we may have a residual interest in the performance of the investment, such as servicing rights
Slide 43: Income Statement
Income Statement HA SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) For the Three Months —_For the Nine Months Ended September 30, Ended September 30, 2024 23 2024 2003 Revenue Interest income S 64,068
Slide 44: Balance Sheet
Balance Sheet HA SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) September 30, 2028 wdited) December 31,2023, Assets Cash and cash equivalents s 44,053 § 62,632 Equity method investments 3,353,204 2,966,305 Rece
Slide 45: Statement of Cashflows
Statement of Cashflows HA SUSTAINABLE INFRASTRUCTURE CAP PAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS) (UNAUDITED) te Monts Ended ‘Nine Months Ended September 30, September 30, mas 3 a LAAT eS su 0m eta ton) SCS Seen Diatpapefosas ott aed umes) (42400) Adjustments
Slide 46: Cash Available for Reinvestment
Cash Available for Reinvestment 46
Slide 47: Reconciliation of GAAP Net Income to Adjusted Earnings
Reconciliation of GAAP Net Income to Adjusted Earnings (1) The per share data reflects the GAAP diluted earnings per share and is the most comparable GAAP measure 5) Shares used to calculated adjusted earnings per share represents the weighted to our adjusted earnings per share. average number of sh
Slide 48: Reconciliation of GAAP-based NII to Adjusted NII
Reconciliation of GAAP-based NII to Adjusted NII 48
Slide 49: Additional GAAP to Non-GAAP Reconciliations
Additional GAAP to Non-GAAP Reconciliations 49
Slide 50: Visit our website at www.hasi.com
Visit our website at www.hasi.com Securities are offered by Hannon Armstrong Securities, LLC, a registered broker dealer, member FINRA and SIPC and subsidiary of Hannon Armstrong Sustainable Infrastructure Capital, Inc.
HA Sustainable Infrastructure Capital — Investor Presentation (November 2024) on 6ix