Ha Sustainable Infrastructure Capital, Inc. · NYSE:HASI
Ha Sustainable Infrastructure Capital — Q1 2023 Earnings Presentation
26 slides from Ha Sustainable Infrastructure Capital's earnings presentation, May 4, 2023
Slide 1: Earnings Presentation First Quarter 2023
Earnings Presentation First 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: Consistently Strong Execution with Continued Forward Momentum
Consistently Strong Execution with Continued Forward Momentum Another Strong Quarter • 11% CAGR of Distributable EPS and 15% annual TSR since IPO1 Caps 1st Decade of • 1Q23 Distributable EPS of $0.532 and GAAP EPS of $0.26 Outstanding Investor • Declared dividend of $0.395 per share Returns • Affirm
Slide 4: Key Themes from Successful Investor Day
Key Themes from Successful Investor Day 1 Climate | Clients | Assets – pillars reflect a differentiated strategy 2 Our business model has been proven resilient and non-cyclical 3 Pace, scale and project complexity favor a trusted and programmatic partner 4 Highly experienced and talented team Compel
Slide 5: Diverse End Markets and Clients Support a Robust Investment Pipeline
Diverse End Markets and Clients Support a Robust Investment Pipeline > 40 programmatic clients providing deal flow for repeat business Diversified Pipeline representing >8 asset classes pipeline provides consistent short-term and long-term opportunity set BTM Clients 41% Pipeline1 GC 46% acceleratin
Slide 6: Improving Performance Metrics Through Market Volatility
Improving Performance Metrics Through Market Volatility Financial Results (1Q23) Distributable NII1 Portfolio growth provides stability in earnings Change Results Unaudited1 1Q22 1Q23 YoY $47.1 $42.5 $ in millions GAAP Diluted EPS $0.51 $0.26 Distributable EPS $0.52 $0.53 GAAP NII $10.1m $12.4m 1Q22
Slide 7: Strong Opportunity Set Drives Growth in Closings and Portfolio
Strong Opportunity Set Drives Growth in Closings and Portfolio Highest ever 1st quarter closed Portfolio grew 9% in 1Q23, primarily from transactions with average yield >8% funding previously closed investments Green Real Estate 1% GC Community Solar Solar Fuels, C&I 8% GC Solar Transport & 6% 22% N
Slide 8: Profitable Growth in all Rate Environments
Profitable Growth in all Rate Environments Portfolio Yield1 vs. Cost of Debt2 • Disciplined focus on margins • Forecasted debt refinancing cost supports Portfolio Yield profitability targets Interest Expense / Avg Debt Balance 7.6% 7.6% 7.5% 7.5% 7.5% 6.8% Illustrative 10-12% ROE3 5.4% 5.1% 4.9% 4.8
Slide 9: Margins Supported by Mitigating Interest Rate Risk
Margins Supported by Mitigating Interest Rate Risk Maintaining Ample Liquidity • 2.0x debt to equity2 Cash • 87% of debt is fixed rate3 >$490m Liquidity • Credit rating of Baa3 (Investment Grade) by Sources1 Moody’s, and BB+ by S&P / Fitch Unsecured Revolver • Swapped floating rate bank debt to 10yr
Slide 10: Recent ESG Activity
Recent ESG Activity Released 2022 Impact Report, CarbonCount 2.0 White Paper, and proposal to E Environmental improve GHG Protocol Extraordinary employee engagement with HASI Foundation approving grants to S Social mission aligned non-profits Kimberly A. Reed joins the Board, bringing significant pe
Slide 11: Unique and Differentiated Business Model
Unique and Differentiated Business Model Climate Access to the entire energy transition Partnership strategy positions Clients us to capture the growth opportunity Assets Non-cyclical and lower risk business model 11
Slide 12: Appendix
APPENDIX
Slide 13: Current Valuation Presents Attractive Entry Point
Current Valuation Presents Attractive Entry Point1,2 27x 22x 18x 17x 11x ` Renewables Energy Services Vertically Asset Managers HASI Equipment Integrated Utilities Income Generating, Growth Company, at an Attractive Value 1. P/E calculated based on closing price as of 5/2/23 and expected median 2023
Slide 14: 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 (%) 6 Seniority 1 Performing1 99% > 275k consumers Typically Residential 32% WAVG FICO: “Very 2 Slightly belo
Slide 15: Cash Flow Sources and Uses
Cash Flow Sources and Uses $ millions1 1Q23 TTM 2022 2021 2020 Adjusted Cash Flow from Operations Plus Other Portfolio Collections2 $294 $287 $259 $309 (-) Dividend ($136) ($132) ($114) ($100) (=) Cash Available for Reinvestment $158 $155 $146 $209 3 (-) Investments Funded ($1,213) ($871) ($960) ($1
Slide 16: 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 17: 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 18: 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 19: Income Statement
Income Statement HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS, (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) For the Three Months Ended March 31, 2023 2022 Revenue Interest income $43,108 $ 30,242 Rental income 6,487 6,499 Gain on sale of recei
Slide 20: Balance Sheet
Balance Sheet HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) Assets Cash and cash equivalents Equity method investments ‘Commercial receivables, net of allowance of $43 million and $41 million, respectively
Slide 21: Statement of Cashflows
Statement of Cashflows Confidential 21
Slide 22: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings 22
Slide 23: Reconciliation of GAAP-based NII to Distributable NII
Reconciliation of GAAP-based NII to Distributable NII 23
Slide 24: Additional GAAP to Non-GAAP Reconciliations
Additional GAAP to Non-GAAP Reconciliations 24
Slide 25: Additional GAAP to Non-GAAP Reconciliations
Additional GAAP to Non-GAAP Reconciliations 25
Slide 26: 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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