Ha Sustainable Infrastructure Capital, Inc. · NYSE:HASI
Ha Sustainable Infrastructure Capital — Q2 2024 Earnings Presentation
33 slides from Ha Sustainable Infrastructure Capital's earnings presentation, Aug 1, 2024
Slide 1: Earnings Presentation Second Quarter 2024
Earnings Presentation Second 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: Q2 2024 Highlights
Q2 2024 Highlights CCH1 >10.5% $0.63 strategic partnership 1H24 new asset yield1 Q2 Adjusted EPS2 Investment Grade 8.0% $0.23 rating portfolio yield1 Q2 GAAP EPS3 2024 – 2026 Guidance Affirmed4 1. Yields are as of 6/30/24 and refer solely to portfolio assets. For explanation of Portfolio Yield, see
Slide 4: Climate Solutions at Scale
Climate Solutions at Scale Annual solar & wind energy generated ~20 TWh1 by assets in our portfolio 5.8m MMBTU2 RNG operating capacity in our portfolio 8m MT CO2 Emissions avoided annually by our managed assets2 ~1,000 Gigawatts of new renewable energy capacity is expected to be added to the U.S. po
Slide 5: Ideally Positioned to Benefit from Industry Trends
Ideally Positioned to Benefit from Industry Trends Clean Energy Demand Growth 34 GW New U.S. Electricity Capacity1 21 GW 27 GW 20%+ forecasted increase in U.S. electricity Differentiated demand by 20302 approach to investing 1980 2000 2020 Renewables Other Diversified sources Capital Formation of ca
Slide 6: Investment Grade Status Improves Margins and Enhances Stability
Investment Grade Status Improves Margins and Enhances Stability BB minus BBB Spreads1 Lower 400 debt costs 300 200 Longer 100 maturities Jul 14 Jul 15 Jul 16 Jul 17 Jul 18 Jul 19 Jul 20 Jul 21 Jul 22 Jul 23 Jul 24 Fewer market HASI’s Spreads Non-IG: 339 bps First IG: 225 bps Average since 2014: 120
Slide 7: 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 $19.
Slide 8: Managed Assets Have Grown by >80% since 2020
Managed Assets Have Grown by >80% since 2020 Managed Assets1 ($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 9: 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 10: 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 11: 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 12: 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 13: Optimally Positioned to Capitalize on Growth of the Energy Transition
Optimally Positioned to Capitalize on Growth of the Energy Transition Demand Clean energy demand inflecting higher Access to Capital Continued diversification of funding platform Investment-grade bond priced at tighter Cost of Capital spreads / lower interest costs 13
Slide 14: Appendix
Appendix 14
Slide 15: $5.5b Pipeline Remains Well-Diversified
$5.5b Pipeline Remains Well-Diversified Grid-Connected 22% >$5.5b 12-mo Pipeline1 Behind-the-Meter 55% Fuels, Transport, & Nature 23% 1. As of 6/30/24 15
Slide 16: 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 17: Portfolio Bridge: Q1 2024 to Q2 2024
Portfolio Bridge: Q1 2024 to Q2 2024 $46 $121 $51 $348 $75 $ in millions $6,391 $6,186 Beginning Funding of new Funding of Principal Syndications Other Ending Portfolio investments prior Collections and Portfolio (3/31/24) investments Securitizations (6/30/24) 17
Slide 18: SunStrong Represents a Small Portion of Investments
SunStrong Represents a Small Portion of Investments with Transition to Alternate Servicing Underway <6% of Portfolio as of 6/30/24 <3% of Originations since 2021 2021 2022 2023 1H24 SunStrong Other SunStrong Other HASI’s mezzanine loans to SunStrong are fully collateralized by underlying cash flows
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”
Slide 20: 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 21: 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 Adjusted EPS1: 8-10% Adj-EPS CAGR2 $2.97 $2.81 2023 2024 2025 2
Slide 22: Low P/E Multiple Relative to Comparable Sectors
Low P/E Multiple Relative to Comparable Sectors 40.4x 23.8x 22.3x 20.8x 16.0x 13.4x Clean Energy Category 1 Clean Energy Category 2 Asset 3 Category Midcap 4 Category Midcap Electric HASI Manufacturers Providers Managers MLPs Utilities Note: Based on stock prices and consensus estimates as of July 2
Slide 23: Explanatory Notes
Explanatory Notes Adjusted Cash Flow from Operations plus Other Portfolio Collections We operate our business in a manner that considers total cash collected from our portfolio and making necessary operating and debt service payments to assess the amount of cash we have available to fund dividends a
Slide 24: Supplemental Financial Data
Supplemental Financial Data Adjusted Earnings and Earnings on Equity Method Investments We calculate Adjusted earnings as GAAP net income (loss) excluding non-cash equity compensation expense, provisions for loss on receivables, amortization of intangibles, non-cash provision (benefit) for taxes, ga
Slide 25: Supplemental Financial Data
Supplemental Financial Data Managed Assets As we both consolidate assets on our balance sheet and securitize assets, certain of our receivables and other assets are not reflected on our balance sheet where we may have a residual interest in the performance of the investment, such as servicing rights
Slide 26: Income Statement
Income Statement HA SUSTAINABLE INFRASTRUCTURE CAPITAL, I (CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) For the Three Months For the Six Months Ended June 30, Ended June 30, ET} 2023 2024 2023 Revenue Interest income S 62779 S$ 48,222 $ 13
Slide 27: 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 $47 million
Slide 28: Statement of Cashflows
Statement of Cashflows HA SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, (DOLLARS IN THOUSANDS) (oxavprreD) Cash flows from operating activities ‘Cash flaws from financing activities ‘Net income (loss) S$ 151492 $ 38,120 Proceeds from credit fucitities 616,
Slide 29: Adjusted Cash Flow from Operations Plus Other Portfolio Collections
Adjusted Cash Flow from Operations Plus Other Portfolio Collections 29
Slide 30: 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 31: Reconciliation of GAAP-based NII to Adjusted NII
Reconciliation of GAAP-based NII to Adjusted NII 31
Slide 32: Additional GAAP to Non-GAAP Reconciliations
Additional GAAP to Non-GAAP Reconciliations 32
Slide 33: 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 — Q2 2024 Earnings Presentation on 6ix