Ha Sustainable Infrastructure Capital, Inc. · NYSE:HASI
Ha Sustainable Infrastructure Capital — Q1 2024 Earnings Presentation
30 slides from Ha Sustainable Infrastructure Capital's earnings presentation, May 7, 2024
Slide 1: Earnings Presentation First Quarter 2024
Earnings Presentation First Quarter 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: Executing on Our Plan: Key Highlights
Executing on Our Plan Key Highlights $2b $0.68 $562m Q1 Adjusted EPS1 KKR Partnership Q1 Closed Transactions $0.98 Q1 GAAP EPS2 24% $0.415 Affirm YoY Growth Dividend Guidance3 in Managed Assets Per Share 1. See Appendix for an explanation of Adjusted Earnings (previously Distributable Earnings), inc
Slide 4: 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 5: CarbonCount Holdings 1 Provides Significant Benefits
CarbonCount Holdings 1 Provides Significant Benefits Consistent with Increases Fee Capital Light Priority Investment Capacity Income Reduces Reliance … As Clean Energy Demand Diversity & on Capital Markets Increases our Opportunities Stability of Revenue More Dynamic and Resilient 5
Slide 6: HASI & KKR: A Powerful Collaboration
HASI & KKR: A Powerful Collaboration • Partner with KKR Core Infrastructure KKR platform to accelerate pace of investment • HASI will source and manage investments for CCH1 consistent with existing 50% 50% investment strategy and interface with our ownership ownership clients • Expect to deploy comb
Slide 7: Growth in Pipeline Reflects Long-term Demand for Energy Transition
Growth in Pipeline Reflects Long-term Demand for Energy Transition BTM GC 51% 26% • Demand growth continues to drive >$5.5b opportunities 12-mo Pipeline1 • Pipeline growth in community solar, energy FTN efficiency, GC solar and renewable fuels 23% Q1 Closed Transactions Q1 Closed Transactions $ in m
Slide 8: Higher Gain on Sale Income Driving Q1 Earnings Growth
Higher Gain on Sale Income Driving Q1 Earnings Growth Change Adjusted NII1 Results Unaudited1 1Q23 1Q24 YoY GAAP Diluted EPS $0.26 $0.98 1Q23 1Q24 Adjusted NII $47.1m $64.3m Adjusted EPS $0.53 $0.68 +28% GAAP NII $12.4m $8.7m Recurring Capital Light Income *Will include CCH1 recurring management fee
Slide 9: Continued Growth in Portfolio & Managed Assets
Continued Growth in Portfolio & Managed Assets 36% growth YoY 24% growth YoY Public Sector 3% C&I GC Solar 6% GC Solar 17% Community 19% Solar 10% Public Sector Managed Portfolio1 40% Wind 10% Assets1 $6.4b Wind Resi Solar 19% $12.9b FTN 7% 29% FTN Other Resi Solar 3% 14% 14% “Portfolio” refers to a
Slide 10: Higher ROE in Q1 and Maintaining Strong Margins
Higher ROE in Q1 and Maintaining Strong Margins Adjusted ROE 1 Portfolio Yield 2 Interest Expense / Avg Debt Balance 3 Gain on Sale from asset rotation driving higher Q1 13.9% ROE 11.4% 11.8% 11.1% 11.2% 10.5% 10.7% New asset yields in Q1 of ~10.5%4 7.6% 7.6% 7.9% 8.0% 7.5% 7.5% 6.8% Temporary compr
Slide 11: Successfully Extended and Upsized Bank Facilities
Successfully Extended and Upsized Bank Facilities Revolver primarily undrawn Laddered Debt Maturities4 $2,000 Cash CP $1,500 $1,000 >$800m Liquidity Sources1 $500 Unsecured $0 Revolver 2024 2025 2026 2027 2028 2029 2030 Credit facilities, Convertible Senior TLA and CP Program Notes Unsecured Notes 1
Slide 12: 1Q24 Sustainability and Impact Highlights
1Q24 Sustainability and Impact Highlights Published 2023 HASI donated $2.5 million Social Verified Scope 3, Category 15 Sustainability & Dividend to HASI Foundation to (financed) emissions with Apex Impact Report1 support Climate Justice initiatives Carbon Emissions2 CarbonCount: 0.94 (1Q24) Water S
Slide 13: Capital Light Partnership to Transform and Scale Business
Capital Light Partnership to Transform and Scale Business Strategy Well-Positioned Climate | Clients | Assets for Increasing Demand Consistent with capital light priority to scale CCH1 Managed Assets and generate fee income Executing on Goal to Previously announced payout ratio guidance coupled Redu
Slide 14: Appendix
Appendix 14
Slide 15: CarbonCount Holdings 1 (CCH1) FAQ
CarbonCount Holdings 1 (CCH1) FAQ Q What is the structure of CCH1? Is HASI changing its investment Will CCH1 have exclusivity on HASI’s Q Q CCH1 is a 50/50 partnership between HASI strategy as part of this transaction? pipeline? A and KKR No, HASI will maintain its current investment For a majority
Slide 16: 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 17: Cash Flow Sources and Uses
Cash Flow Sources and Uses $ millions1 1Q24 (TTM) 2023 2022 2021 Adjusted Cash Flow from Operations Plus Other $465 $266 $287 $259 Portfolio Collections2 (-) Dividend ($170) ($160) ($132) ($114) (=) Cash Available for Reinvestment $296 $106 $155 $146 (-) Investments Funded3 ($2,125) ($2,225) ($871)
Slide 18: 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 $525 6.38% 2025 Convertible Notes $403 3.75% 2028 Corporate Senior Unsecured N
Slide 19: 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”5
Slide 20: 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 21: 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 22: Supplemental Financial Data
Supplemental Financial Data Assets Under Management 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 servici
Slide 23: Income Statement
Income Statement HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) For the Three Months Ended March 31, 204 2023 Revenue Interest income S 68,692 $ 43,108 Rental income 1,846 6,487 Gain on sale of a
Slide 24: Balance Sheet
Balance Sheet HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) Assets Cash and cash equivalents Equity method investments Receivables. net of allowance of $52 million and $50 million. respectively Receivable
Slide 25: Statement of Cashflows
Statement of Cashflows HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, (DOLLARS IN THOUSANDS) (UNAUDITED) Three Months Ended hl, 20m 3023 ‘Cash flows from operating activities Cash flows from financing activities ‘Net sncome (loss) S 124548
Slide 26: Adjusted Cash Flow from Operations Plus Other Portfolio Collections
Adjusted Cash Flow from Operations Plus Other Portfolio Collections 26
Slide 27: Reconciliation of GAAP Net Income to Adjusted Earnings
Reconciliation of GAAP Net Income to Adjusted Earnings 27
Slide 28: Reconciliation of GAAP-based NII to Adjusted NII
Reconciliation of GAAP-based NII to Adjusted NII 28
Slide 29: Additional GAAP to Non-GAAP Reconciliations
Additional GAAP to Non-GAAP Reconciliations 29
Slide 30: 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 — Q1 2024 Earnings Presentation on 6ix