Ha Sustainable Infrastructure Capital, Inc. · NYSE:HASI
Ha Sustainable Infrastructure Capital — Investor Presentation (March 2024)
50 slides from Ha Sustainable Infrastructure Capital's investor presentation, March 2024
Slide 1: Corporate Profile March 2024
Corporate Profile March 2024
Slide 2: 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 12% >7m Managed Assets1 Distributable EPS2 Annual Total Return3 MT CO2 Avoided Annually4 Markets & Asset Classes Behind-the-Meter Grid-Connected
Slide 3: 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 4: 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 5: Client Ambition Expands our Opportunity Set
Client Ambition Expands our Opportunity Set Pipelines expanding with BTM GC increased focus on energy 52% 30% transition and IRA tailwinds HASI 12-mo Pipeline1 Expansion into adjacent decarbonization markets >$5b FTN 18% >$25b in 2024 estimated US Pipeline of >150 opportunities and >30 project capex
Slide 6: 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 12/31/23 6
Slide 7: 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 8: Current Valuation Presents Attractive Entry Point
Current Valuation Presents Attractive Entry Point1,2 23x 23x 19x 16x 10x ` 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 3/14/24 and consensus earnings per shar
Slide 9: Pipeline, Portfolio and Managed Assets
Pipeline, Portfolio and Managed Assets
Slide 10: 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 11: 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 52% 30% $2.3b Community Solar HASI $1.9b 18% $1.8b 12-mo Pipeline1 $1.7b >$5b Resi Other Community Solar Solar FTN 26% C&I 18% Public Public Resi Solar Publi
Slide 12: Portfolio Yield Increased from 7.7% to 7.9% QoQ
Portfolio Yield Increased from 7.7% to 7.9% QoQ Community Solar 5% Other Community Other 3% Solar C&I GC GC Solar 10% Solar 4% 17% C&I 19% Public 5% Sector 4% Portfolio1 Managed Wind 9% $6.2b Wind Assets1 Yield: 7.9%2 18% Fuels, $12.3b Transport & Public Nature 7% Resi Solar Sector 28% Fuels, Transp
Slide 13: Financial Performance & Funding Platform
Financial Performance & Funding Platform
Slide 14: Continued Growth in Portfolio, Dist. NII and GoS Fees
Continued Growth in Portfolio, Dist. NII and GoS Fees Financial Results (FY23) Higher New Investment Yields in 2023 Change Improve Long Term Distributable NII Results Unaudited1 FY22 FY23 YoY >9% GAAP Diluted EPS $0.47 $1.42 >7.5% Distributable EPS $2.08 $2.23 +7% >7% >7% GAAP NII $45m $58m 2020 202
Slide 15: Consistent High Growth in Key Metrics
Consistent High Growth in Key Metrics Distributable EPS1 Distributable 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% Portfoli
Slide 16: Illustrative Business Model
Illustrative Business Model As a % of Assets 1 Illustrative Capital Plan Portfolio Additions Portfolio Yield2 7.75% - 8.25% 60-70% Debt • 1.5-2.0x debt / equity • Investment Grade (Moody’s) (-) Interest Expense3 (3.75% - 4.25%) 30-40% Equity • Retained and new issue • Accretive to Distributable EPS
Slide 17: 2024-26 Guidance Bridge to Long-Term Business Model
2024-26 Guidance Bridge to Long-Term Business Model Distributable 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 While Reducing Payout Ratio Primary u
Slide 18: Growing Both Dividend & Retained Earnings
Growing Both Dividend & Retained Earnings $2.97 $2.81 Dist. 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% 6
Slide 19: Strong Margins through Various Interest Rate Environments
Strong Margins through Various Interest Rate Environments Portfolio Yield 1 Interest Expense / Avg Debt Balance 2 Incremental investments at attractive margins 7.9% 2023 2023 New 7.6% 7.6% 7.5% 7.5% >9% New Asset Investment 6.8% Yield Yield1 5.4% 2023 5.1% 5.0% 2023 New 4.9% 7% 7% New Debt 4.6% Debt
Slide 20: Robust Funding Platform Supports Business Growth
Robust Funding Platform Supports Business Growth Entering 2024 with Strong • Raised $550m in corporate unsecured bonds in December, followed by $200m add-on in January Liquidity Cash >$930m • 2.0x debt to equity2 Liquidity Unsecured Revolver Sources1 • 92% of debt fixed or hedged3 CP • Baa3/BB+/BB+
Slide 21: Cash Flow Sources and Uses
Cash Flow Sources and Uses $ millions1 2023 2022 2021 Adjusted Cash Flow from Operations Plus Other $266 $287 $259 Portfolio Collections2 (-) Dividend ($160) ($132) ($114) (=) Cash Available for Reinvestment $106 $155 $146 (-) Investments Funded3 ($2,225) ($871) ($960) (+) Capital Raised $1,969 $693
Slide 22: Summary of Total Debt and Hedge Portfolio
Summary of Total Debt and Hedge Portfolio Debt Amount Debt Facility Interest Rate2 Maturity Year (millions) 1 Fixed Rate Debt Corporate Senior Unsecured Notes $1,000 3.38% 2026 Corporate Senior Unsecured Notes $550 8.00% 2027 Floating Rate Debt, Swapped to Fixed Term Loan A $532 6.47% 2025 Where Not
Slide 23: Sustainability & Impact
ity & 9 re) = (e) _ 2) =) WY) Impact
Slide 24: Sustainability and Impact: Unwavering Commitment to Climate Action and Diversity
Sustainability and Impact: Unwavering Commitment to Climate Action and Diversity Engage in Meaningful Community Investment through the HASI Foundation Since 2020, HASI has declared over $6.5m in social dividends to fund the Foundation’s climate justice initiatives Climate Solutions Climate Solutions
Slide 25: 2023 Sustainability & Impact Highlights
2023 Sustainability & Impact Highlights Reported to investors that HASI is 100% aligned with the EU Taxonomy and believe that holding our shares is in compliance with SFDR Articles 6, 8, and 91 Submitted formal comments in support of an “Emissions Matching” approach – in alignment with our longstand
Slide 26: 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 27: Appendix: Market Highlights & Investment Examples
Appendix Market Highlights & Investment Examples
Slide 28: 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 29: 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 30: 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 31: 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 32: 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 33: Appendix: Risk & Underwriting
Appendix Risk & Underwriting
Slide 34: 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% > 295k consumers Typically Residential 28% WAVG FICO: “Very 2 Slightly bel
Slide 35: Robust and Disciplined Monitoring & Evaluation Process
Robust and Disciplined Monitoring & Evaluation Process Quarterly Investment Review Process Loans/Leases EMI Securitization Assets • Each investment has its own model • Each investment has its own model that • Mark-to-Market quarterly for market which is updated upon a payment is updated periodically
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 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 41: 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 42: Income Statement
Income Statement IN ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (@OLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) For the Three Months For the Year Ended Ended December 31, December 31, 2023 2022 2023 2022 Revenue Interest income $ 62,170 $ 36,752 $ 207,794 $
Slide 43: Balance Sheet
Balance Sheet HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) December 31, December 31, 2023 2022 Assets Cash and cash equivalents $ 62.632 $ 155.714 Equity method investments 2,966,305 1,869,712 Commercial receivabl
Slide 44: Statement of Cashflows
Statement of Cashflows HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS: (DOLLARS IN THOUSANDS) ‘Years Ended December 31, 2023 2022 2021 ‘Cash flows from operating activities ‘Net cash provided by (used in) investing activities (1,992,803) (592,110) _ (
Slide 45: Reconciliation of GAAP Net Cash Operating Activities to Adjusted Cash Flow
Reconciliation of GAAP Net Cash Operating Activities to Adjusted Cash Flow from Operations and Other Portfolio Collections 45
Slide 46: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings 46
Slide 47: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings 47
Slide 48: Reconciliation of GAAP-based NII to Distributable NII
Reconciliation of GAAP-based NII to Distributable 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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