Ha Sustainable Infrastructure Capital, Inc. · NYSE:HASI
Ha Sustainable Infrastructure Capital — Investor Presentation (May 2024)
49 slides from Ha Sustainable Infrastructure Capital's investor presentation, May 2024
Slide 1: Corporate Profile
Investing in Climate Solutions® Corporate Profile May 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 >$12 Billion 10% CAGR 15% >7m Managed Assets1 Adjusted EPS2 Annual Total Return3 MT CO2 Avoided Annually4 Markets & Asset Classes Behind-the-Meter Grid-Connected Fuel
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 Capacity1 U.S. Annual Investment in Energy Transition2 ~$1t 896 GW 300 GW >$140b 2022 2030 2022 2023-2050 HASI is well-positioned to maintain or grow market share 1. Cumulative installed capacity for Solar PV, Wind and Storage
Slide 6: Client Ambition Expands our Opportunity Set
Client Ambition Expands our Opportunity Set Pipelines expanding with BTM GC increased focus on energy 51% 26% transition and IRA tailwinds HASI 12-mo Pipeline1 Expansion into adjacent >$5.5b decarbonization markets FTN 23% >$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 >$12b Managed Assets1 High-Quality, Climate Incented Positive Offtakers 1. As of 3/31/24 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: Current Valuation Presents Attractive Entry Point
Current Valuation Presents Attractive Entry Point1,2 25x 23x 17x 17x 13x ` Renewables Energy Services Vertically Asset Managers HASI Equipment Integrated Utilities Income Generating, Growth Company, at an Attractive Value 1. P/E calculated based on price as of 5/13/24 and consensus earnings per shar
Slide 10: Pipeline, Portfolio and Managed Assets
Pipeline, 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 2001 >40 3 >360 11.4 GW Energy of Grid-Conne
Slide 12: Programmatic Partners Drive Consistent Diversified Volume
Programmatic Partners Drive Consistent Diversified Volume Closed Transactions2 BTM GC Two Highest Volume Asset Classes have Changed Every Year 51% 26% $2.3b Community $562m Solar HASI $1.9b 18% closed $1.8b 12-mo Pipeline1 $1.7b investments in 1Q24 >$5.5b Resi Solar Other FTN 26% Community Solar 23%
Slide 13: 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 14: Financial Performance & Funding Platform
Financial Performance & Funding Platform
Slide 15: 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 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: 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 18: 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 19: 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 20: 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 21: 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 22: 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 23: 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 24: Sustainability & Impact
ity & 9 re) = (e) _ 2) =) WY) Impact
Slide 25: 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 26: 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 27: 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 28: Appendix: Market Highlights & Investment Examples
Appendix Market Highlights & Investment Examples
Slide 29: GC Market Highlights
GC Market Highlights HASI GC business consists of utility-scale wind, solar and storage investments GC Market Expected to More Than Double by 20301 Strong Fundamentals With Tremendous Growth 700 600 Most cost-effective 500 energy source 400 GWs 300 200 Required for corporates and utilities to meet t
Slide 30: BTM Market Highlights
BTM Market Highlights High growth enabled by favorable legislation, technology advancement and strong demand $131b $131b of cumulative 100% 100% investments through 20261 90% 90% 80% 80% 35% 35% 44% 44% 47% 47% 51% 51% 70% 70% Key Demand Drivers: 60% capex 60% DERcapex 50% 50% Emissions / Resilience
Slide 31: 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 32: 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 33: 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 34: Appendix: Risk & Underwriting
Appendix Risk & Underwriting
Slide 35: 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 36: 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 37: 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 38: Appendix: Recent Financials
Appendix Recent Financials 38
Slide 39: 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 40: 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 41: 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 42: 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 43: 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 44: 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 45: Adjusted Cash Flow from Operations Plus Other Portfolio Collections
Adjusted Cash Flow from Operations Plus Other Portfolio Collections 45
Slide 46: Reconciliation of GAAP Net Income to Adjusted Earnings
Reconciliation of GAAP Net Income to Adjusted Earnings 46
Slide 47: Reconciliation of GAAP-based NII to Adjusted NII
Reconciliation of GAAP-based NII to Adjusted NII 47
Slide 48: Additional GAAP to Non-GAAP Reconciliations
Additional GAAP to Non-GAAP Reconciliations 48
Slide 49: 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.
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