Ha Sustainable Infrastructure Capital, Inc. · NYSE:HASI
Ha Sustainable Infrastructure Capital — Investor Presentation (August 2024)
50 slides from Ha Sustainable Infrastructure Capital's investor presentation, August 2024
Slide 1: Corporate Profile
Corporate Profile August 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 14% 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 55% 22% 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 $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 35x 21x 21x 20x 16x 13x Clean Energy Category 1 Clean Energy Category 2 Asset 3 Category Midcap 4 Category Midcap Electric HASI Manufacturers Providers Managers MLPs Utilities Note: Based on stock prices and S&P CapIQ consensus 2024 estimates as of Aug
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 2001 >40 3 >360 11.4 GW 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) $12.3 $13.0 $815 $823 $9.8 $8.8 $7.2 $6.2 $6.2 $2.9 $3.6 $4.3 2020 2021 2022 2023 2Q24 1H23 1H24 >8.5% >10.5% Managed Assets Portfolio Yield on New Portfolio Assets2 “Portfolio” refers to all investments held
Slide 14: Portfolio at $6.2b, up 27% YoY
Portfolio at $6.2b, up 27% YoY Well diversified across asset classes Public Sector Other 3% 1% Community Solar Portfolio yield1: 8.0% 7% C&I 6% GC Solar 20% Change in portfolio during Q2 Portfolio 2024 included transfer of $109 million of investments to CCH1 $6.2b Wind Resi Solar 29% 20% FTN CCH1 in
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: Q2 Earnings Detail
Q2 Earnings Detail Results Unaudited1 2Q23 2Q24 Adjusted Net Investment Income1 GAAP Diluted EPS $0.14 $0.23 1H23 1H24 Adjusted NII $101.1m $126.9m Adjusted EPS $0.53 $0.63 +19% GAAP NII $14.8m $3.3m Recurring Capital Light Income Adjusted NII $54.0m $62.6m +16% 1H23 1H24 Gain on Sale, Fees and $19.
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: Navigating a Higher Interest Rate Environment
Navigating a Higher Interest Rate Environment Adjusted ROE 1 Portfolio Yield 2 Interest Expense / Avg Debt Balance 3 Gain on Sale from asset rotation driving higher 1H ROE 13.3% 11.8% 11.1% 11.2% 11.4% 10.5% 10.7% Temporary compression due to newly issued debt yet to be deployed in higher 7.9% 8.0%
Slide 22: Ample Liquidity to Invest in Our Pipeline
Ample Liquidity to Invest in Our Pipeline Revolver largely undrawn Debt Maturities Now Extending to 20341 $1,000 CP Secured Cash Facility $500 >$1.4b Liquidity Sources1 $0 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Unsecured Revolver Credit facilities, Convertible Senior Unsecured TLA an
Slide 23: Adjusted Cash from Operations Plus Other Portfolio Collections
Adjusted Cash from Operations Plus Other Portfolio Collections1 $ millions2 2Q24 (TTM) 2023 2022 Cash collected from our Portfolio $863 $442 $424 Cash collected from sale of assets3 $235 $34 $47 Cash used for compensation and benefits and G&A expenses ($79) ($79) ($64) Interest paid4 ($161) ($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 5.76% 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: 2Q24 Sustainability and Impact Highlights
2Q24 Sustainability and Impact Highlights S&P’s Second Party Opinion Named Green Business Culture HASI Foundation grant (SPO) on Green Bond Winner - Net Zero Companies of to support local non-profit Framework receives highest the Future @ 2024 Reuters Global focused on green rating: ‘Dark Green’ Ene
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 Highlights
BTM Market Highlights 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
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, I (CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) For the Three Months For the Six Months Ended June 30, Ended June 30, ET} 2023 2024 2023 Revenue Interest income S 62779 S$ 48,222 $ 13
Slide 44: Balance Sheet
Balance Sheet A SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) June 30,2024 (unaudited) Assets Cash and cash equivalents s 145,605 Equity method investments 3371373 Receivables, net of allowance of $47 million
Slide 45: Statement of Cashflows
Statement of Cashflows HA SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, (DOLLARS IN THOUSANDS) (oxavprreD) Cash flows from operating activities ‘Cash flaws from financing activities ‘Net income (loss) S$ 151492 $ 38,120 Proceeds from credit fucitities 616,
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 4) Adjusted earnings per share are based on 117,506,065 shares and 116,453,108 comparable GAAP measure to our adjusted earnings per share. shares for the three a
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.
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