Ha Sustainable Infrastructure Capital, Inc. · NYSE:HASI
Ha Sustainable Infrastructure Capital — Q3 2023 Earnings Presentation
28 slides from Ha Sustainable Infrastructure Capital's earnings presentation, Nov 2, 2023
Slide 1: Earnings Presentation Third Quarter 2023
Earnings Presentation Third Quarter 2023 1
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: Well-Positioned for Current Macroeconomic Conditions
Well-Positioned for Current Macroeconomic Conditions • Energy transition continues to provide enormous investment Strong Long-Term opportunity supported by underlying economic viability Fundamentals • Our client centric business model is thriving • Q3 Distributable EPS1 of $0.62 and GAAP EPS of $0.2
Slide 4: Strong Visibility in Achieving Current Guidance
Strong Visibility in Achieving Current Guidance Affirming Guidance Compounded Annual Growth Distributable EPS (2021 – 2024)1,2 : 10% – 13% Current Guidance Guidance can be achieved with: $2.53 • No incremental equity $2.27 • No new balance sheet investments $2.08 • No incremental debt $1.88 • GoS fe
Slide 5: Expanding Proven Capabilities to Drive Continued Growth in EPS
Expanding Proven Capabilities to Drive Continued Growth in EPS Action Plan Demonstrated Track Record Higher Yielding • Pipeline investments on avg >10%1 Investments • Consistent risk profile Balance Sheet Rotations, • $1.2b of Balance Sheet Rotations2, $2.0b Secured Debt 2, Secured & Bank Debt $2.0b
Slide 6: Record Volume and Asset Yields
Record Volume and Asset Yields $1.8b closed transactions in 2023 YTD % of Closed Asset Class Transactions $973m closed in 3Q23 (2023 YTD) Fuels Transport & Nature 38% YTD & 3Q23 closed transactions yield on Resi Solar 21% average > 9%1 Public Sector 15% GC Solar 12% Expect future investments to cont
Slide 7: Strong Pipeline Driven by Non-Cyclical End Markets
Strong Pipeline Driven by Non-Cyclical End Markets Largest asset class Clients’ pipelines in BTM pipeline is remain robust public sector • Renewables remain GC 2 HASI 36% competitive despite higher costs BTM 12-mo 49% Pipeline1 • Electricity demand expected to increase >$5b • Energy transition asset
Slide 8: Financial Results (3Q23): Portfolio Increased 41% YOY
Portfolio Increased 41% YOY Financial Results (3Q23) Distributable NII1 Drives significant growth in recurring income Change Results Unaudited1 3Q22 3Q23 YoY $160 $ in millions $134 20% GAAP Diluted EPS $0.38 $0.20 Distributable EPS $0.49 $0.62 GAAP NII $11.3m $17.0m 2022 YTD 2023 YTD Distributable
Slide 9: Portfolio Yield Increases from 7.7% to 7.9% QoQ
Portfolio Yield Increases from 7.7% to 7.9% QoQ Portfolio growth (YTD) of $1.2b vs. Anticipated Funding of Previously Closed Transactions3 previous 3-year annual average of $0.7b 4Q23 – 2024 ~ $645m Community Solar C&I 8% GC Solar 6% 19% Public Sector 5% Portfolio Change ($m)4 Portfolio1,2 Beginning
Slide 10: Growth in Margins
Growth in Margins Portfolio Yield1 vs. Cost of Debt2 Portfolio Yield Interest Expense / Avg Debt Balance 7.9% 7.6% 7.6% 7.7% 7.5% 7.5% 7.5% 6.8% 5.4% 5.1% 4.9% 4.8% 4.8% 4.9% 4.6% 4.3% 2018 2019 2020 2021 2022 1Q23 2Q23 3Q23 Proforma refinancing of 2025 and 2026 corporate bonds using current market
Slide 11: Financial Discipline and Conservative Leverage
Financial Discipline and Conservative Leverage Liquidity Remains Strong • Increased Term Loan A by $165m in October 2023 • 1.7x debt to equity2 Cash >$710m • 88% of debt fixed or hedged3 Liquidity Unsecured Revolver Sources1,4 • Baa3/BB+/BB+ Positive Outlook (MDY/S&P/Fitch) • Plan for discontinuatio
Slide 12: Sustainability and Impact
Sustainability and Impact Submitted Scope 3 Category 15 Net Zero target for validation HASI employees (~50% of workforce) led multiple social and climate justice community service initiatives Launched internal biodiversity reporting initiative to align with TNFD framework Carbon Emissions1 Water Sav
Slide 13: Outstanding Performance; Strategy to Adapt to Current Market Conditions
Outstanding Performance; Strategy to Adapt to Current Market Conditions Long-Term Climate | Clients | Assets Fundamentals Demonstrated success of consistent earnings Strong Results growth through interest rate cycles Executing on specific objectives to thrive despite Action Plan challenging capital
Slide 14: Appendix
Appendix
Slide 15: Cash Flow Sources and Uses
Cash Flow Sources and Uses $ millions1 3Q23 TTM 2022 2021 Adjusted Cash Flow from Operations Plus Other Portfolio Collections2 $264 $287 $259 (-) Dividend ($149) ($132) ($114) (=) Cash Available for Reinvestment $115 $155 $146 3 (-) Investments Funded ($1,992) ($871) ($960) (+) Capital Raised $1,672
Slide 16: Summary of Total Debt and Hedge Portfolio
Summary of Total Debt and Hedge Portfolio Debt Amount Debt Facility (millions) 1 Interest Rate2 Maturity Year Corporate Senior Unsecured Notes $1,000 3.38% 2026 Term Loan A $548 6.47% 2025 Revolving Line of Credit3 $487 6.62% 2025 Convertible Notes $403 3.75% 2028 Corporate Senior Unsecured Notes $4
Slide 17: Strong Portfolio with Positive Credit Attributes
Strong Portfolio with Positive Credit Attributes Recent Portfolio Performance Positive Credit Attributes Rating Description Performance Metric Portfolio Structural Asset Class Obligor Credit (%) 4 Seniority 1 Performing1 ~99% > 310k consumers Typically Residential 31% WAVG FICO: “Very 2 Slightly bel
Slide 18: 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 necessary operating and debt service payments to assess the amount of cash we have available to fund investments and di
Slide 19: Supplemental Financial Data
Supplemental Financial Data Distributable Earnings and Earnings on Equity Method Investments We calculate distributable 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
Slide 20: 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 21: 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 For the Nine Months Ended September 30, Ended September 30, 2023 2022 2023 2022 Revenue Interest income S 5429
Slide 22: Balance Sheet
Balance Sheet HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) September December 31, 30, 2023 2022 Assets ‘Cash and cash equivalents $ 155500 $ 155,714 Equity method investments 2,563,948 1,869,712 ‘Commerc
Slide 23: Statement of Cashflows
Statement of Cashflows HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS) (UNAUDITED) Nine Months Ended Nine Months Ended September 30. ‘September 30, 7023 20m 72023 2022 Cash flows from financing activities OT Cash flows
Slide 24: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings 24
Slide 25: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings 25
Slide 26: Reconciliation of GAAP-based NII to Distributable NII
Reconciliation of GAAP-based NII to Distributable NII 26
Slide 27: Additional GAAP to Non-GAAP Reconciliations
Additional GAAP to Non-GAAP Reconciliations 27
Slide 28: 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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