Ha Sustainable Infrastructure Capital, Inc. · NYSE:HASI
Ha Sustainable Infrastructure Capital — Q2 2020 Earnings Presentation
24 slides from Ha Sustainable Infrastructure Capital's earnings presentation, Aug 6, 2020
Slide 1: Earnings Presentation Second Quarter 2020
EARNINGS PRESENTATION Second Quarter 2020
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 Change Solutions
INVESTING IN CLIMATE CHANGE SOLUTIONS Recent Highlights1 • Recorded YOY GAAP EPS of $0.16 and increased Core EPS (Pre-CECL Provision) 33% to $0.40 (2Q20) Key Performance Indicators 2Q20 2Q19 • Achieved YOY growth in GAAP NII of 18% to $21m and Core NII of GAAP $0.16 $0.19 29% to $49m (1H20) • Declar
Slide 4: Strengths of the Hannon Armstrong Business Model
STRENGTHS OF THE HANNON ARMSTRONG BUSINESS MODEL • Because assets save obligors money, generally uncorrelated with the business Virtually all investments save the cycle 1 obligor money • Outstanding credit history with de minimis (~30 bps) cumulative credit losses since IPO • Robust pipeline from le
Slide 5: Pipeline Growth Continues
PIPELINE GROWTH CONTINUES Markets Weighted toward EE opportunities1 Behind-the-Meter Solar opportunities balanced between resi, GC 16% C&I, and community SI With execution of ENGIE co-investment, Pipeline2 9% Grid-Connected pipeline reverts to more normalized level >$2.5b Well balanced between wind
Slide 6: ENGIE Investment Highlights
ENGIE INVESTMENT HIGHLIGHTS Investment Overview • ~$540m preferred equity investment with ENGIE as equity co-investor • 2.3 GW contracted, grid-connected operating portfolio across 5 states • Large corporate and utility off-takers, including Amazon, Allianz, Ingersoll Rand, Microsoft, T Mobile, Targ
Slide 7: Portfolio Diversification Enhanced with ENGIE Investment
PORTFOLIO DIVERSIFICATION ENHANCED WITH ENGIE INVESTMENT Pro Forma for Markets1 As of 6/30 ENGIE Investment Energy Efficiency Utility-Scale Solar Behind-the-Meter Distributed Solar 5% Yield: 8.1% Storage Public Public Solar Sector Green Real Estate3 Solar Sector Land 16% 21% 21% 2% Land Green Real E
Slide 8: 2Q20 Results: Continuing to Grow NII While Delivering Strong Gain on Sale Revenue
2Q20 RESULTS: CONTINUING TO GROW NII WHILE DELIVERING STRONG GAIN ON SALE REVENUE Results, Unaudited1 2Q20 2Q19 1H20 1H19 Commentary ($ in millions, except per share figures) GAAP Earnings $12.0 $12.7 $36.3 $26.4 Higher interest and Gain on Sale revenue offset by GAAP Diluted EPS $0.16 $0.19 $0.51 $
Slide 9: Business Model Strengthens as Recurring NII Grows
BUSINESS MODEL STRENGTHENS AS RECURRING NII GROWS Core Net Investment Income1 Portfolio Yield and Leverage1 Portfolio Yield Leverage (debt-to-equity) $100 9% 2.5x $82 $80 $68 8% 7.6% 7.7% 2.0x $ in millions $62 $60 6.8% $48 $49 7% 1.5x $40 $36 $38 $20 6% 1.0x $0 5% 0.5x 2015 2016 2017 2018 2019 1H19
Slide 10: Balance Sheet Update
BALANCE SHEET UPDATE June 30, 2020 Expanded Balance Sheet Liquidity Assets ($ in millions) • Reacted to crisis by increasing Balance Sheet by Cash $542 >$500m via cash raised from green bond and equity Equity method investments 556 ATM issuances Government receivables 256 Commercial receivables 843
Slide 11: Portfolio Performance and Counterparty Credit
PORTFOLIO PERFORMANCE AND COUNTERPARTY CREDIT Recent Portfolio Performance Counterparty Credit Other Equity Balance Sheet Method Investments Government 14% Typically, senior in Portfolio (%) Typically, preferred 21% Rating Description structure 2Q20 in structure $2.1b IG: 100% Portfolio 1 Performing
Slide 12: Durable Capital Structure
DURABLE CAPITAL STRUCTURE Demonstrated access to diversified funding Capital Raised ($m)2 $1,800 sources • $8.3 billion raised across multiple capital markets since $1,200 2013 IPO1 • Raised $400m in unsecured green bonds and $44m in $600 equity in 2Q20 $0 Conservative leverage profile 2015 2016 201
Slide 13: Policy Resilience
POLICY RESILIENCE U.S. renewables already competitively priced and Unsubsidized U.S. LCOE ranges ($/MWh)2 poised for continued growth $200 • Significant cost reductions have resulted in an unsubsidized $150 LCOE1 today that place renewables on par with or cheaper than alternatives $100 • From 2021 t
Slide 14: Industry-Leading ESG
INDUSTRY-LEADING ESG COVID-19 Contributed to and walked nearly 800 miles in support of the Chesapeake Bay Foundation’s Relief Organizations E Environmental “Walk the Watershed” virtual fundraiser Updated green bond disclosures on website Maryland Food Bank Launched a DEIJ1 working group and convenin
Slide 15: Appendix
APPENDIX
Slide 16: Supplemental Financial Data
SUPPLEMENTAL FINANCIAL DATA Explanatory Notes Core Earnings and Earnings on Equity Method Investments We calculate core earnings as GAAP net income (loss) excluding non-cash equity compensation expense, certain provisions for loss on receivables, amortization of intangibles, any one-time acquisition
Slide 17: Supplemental Financial Data
SUPPLEMENTAL FINANCIAL DATA Explanatory Notes Managed Assets As we both consolidate assets on our balance sheet and securitize assets off-balance sheet, 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
Slide 18: Supplemental Financial Data
SUPPLEMENTAL FINANCIAL DATA Explanatory Notes Portfolio/Credit Quality Footnotes Equity investments in various renewable energy and energy efficiency projects. These investments are typically owned in holding companies where our equity “Other Equity Method Investments” interests are typically senior
Slide 19: Income Statement
INCOME STATEMENT HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) Revenue Interest income Rental income Gain on sale of receivables and investments Fee income Total revenue Expenses Interest expens
Slide 20: Balance Sheet
BALANCE SHEET 20 HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) HANNON ARMSTRONG
Slide 21: Reconciliation of GAAP Net Income to Core Earnings
RECONCILIATION OF GAAP NET INCOME TO CORE EARNINGS 21
Slide 22: Additional GAAP to Core Reconciliations
ADDITIONAL GAAP TO CORE RECONCILIATIONS 22
Slide 23: Additional GAAP to Core Reconciliations
ADDITIONAL GAAP TO CORE RECONCILIATIONS 23
Slide 24: Visit our website at www.hannonarmstrong.com
Visit our website at www.hannonarmstrong.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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