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Share Name | Share Symbol | Market | Type |
---|---|---|---|
HA Sustainable Infrastructure Capital Inc | NYSE:HASI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-1.52 | -4.65% | 31.20 | 32.48 | 30.93 | 32.23 | 1,455,728 | 23:24:45 |
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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|
|
Maryland
|
|
46-1347456
|
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
|
|
1906 Towne Centre Blvd
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Suite 370
|
|
21401
|
Annapolis,
|
Maryland
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|
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(Address of principal executive offices)
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|
(Zip code)
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|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.01 per value per share
|
HASI
|
New York Stock Exchange
|
Large accelerated filer
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|
☒
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Accelerated filer
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☐
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|
|||
Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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|
•
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our expected returns and performance of our investments;
|
•
|
the state of government legislation, regulation and policies that support or enhance the economic feasibility of sustainable infrastructure projects, including energy efficiency and renewable energy projects and the general market demands for such projects;
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•
|
market trends in our industry, energy markets, commodity prices, interest rates, the debt and lending markets or the general economy;
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•
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our business and investment strategy;
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•
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availability of opportunities to invest in projects that reduce carbon emissions or increase resilience to climate change including energy efficiency and renewable energy projects and our ability to complete potential new opportunities in our pipeline;
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•
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our relationships with originators, investors, market intermediaries and professional advisers;
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•
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competition from other providers of capital;
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•
|
our or any other companies’ projected operating results;
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•
|
actions and initiatives of the federal, state and local governments and changes to federal, state and local government policies, regulations, tax laws and rates and the execution and impact of these actions, initiatives and policies;
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•
|
the state of the U.S. economy generally or in specific geographic regions, states or municipalities, and economic trends;
|
•
|
our ability to obtain and maintain financing arrangements on favorable terms, including securitizations;
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•
|
general volatility of the securities markets in which we participate;
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•
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changes in the value of our assets, our portfolio of assets and our investment and underwriting process;
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•
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the impact of weather conditions, natural disasters, accidents or equipment failures or other events that disrupt the operation of our investments or negatively impact the value our assets;
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•
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rates of default or decreased recovery rates on our assets;
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•
|
interest rate and maturity mismatches between our assets and any borrowings used to fund such assets;
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•
|
changes in interest rates, including the flattening of the yield curve, and the market value of our assets and target assets;
|
•
|
changes in commodity prices, including continued low natural gas prices;
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•
|
effects of hedging instruments on our assets or liabilities;
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•
|
the degree to which our hedging strategies may or may not protect us from risks, such as interest rate volatility;
|
•
|
impact of and changes in accounting guidance;
|
•
|
our ability to maintain our qualification as a real estate investment trust ("REIT") for U.S. federal income tax purposes;
|
•
|
our ability to maintain our exemption from registration under the Investment Company Act of 1940, as amended (the “1940 Act”);
|
•
|
availability of and our ability to attract and retain qualified personnel;
|
•
|
estimates relating to our ability to generate sufficient cash in the future to operate our business and to make distributions to our stockholders; and
|
•
|
our understanding of our competition.
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Page
|
|
||
Item 1.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
September 30, 2019 (unaudited)
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Equity method investments
|
$
|
449,304
|
|
|
$
|
471,044
|
|
Government receivables
|
299,877
|
|
|
497,464
|
|
||
Commercial receivables, net of allowance
|
674,728
|
|
|
447,196
|
|
||
Real estate
|
363,037
|
|
|
365,370
|
|
||
Investments
|
113,177
|
|
|
169,793
|
|
||
Cash and cash equivalents
|
186,152
|
|
|
21,418
|
|
||
Other assets
|
192,893
|
|
|
182,628
|
|
||
Total Assets
|
$
|
2,279,168
|
|
|
$
|
2,154,913
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accounts payable, accrued expenses and other
|
$
|
39,851
|
|
|
$
|
36,509
|
|
Deferred funding obligations
|
1,073
|
|
|
72,100
|
|
||
Credit facilities
|
37,824
|
|
|
258,592
|
|
||
Non-recourse debt (secured by assets of $887 million and $1,105 million, respectively)
|
664,722
|
|
|
834,738
|
|
||
Senior unsecured notes
|
505,513
|
|
|
—
|
|
||
Convertible notes
|
147,642
|
|
|
148,451
|
|
||
Total Liabilities
|
1,396,625
|
|
|
1,350,390
|
|
||
Stockholders’ Equity:
|
|
|
|
||||
Preferred stock, par value $0.01 per share, 50,000,000 shares authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, par value $0.01 per share, 450,000,000 shares authorized, 64,924,800 and 60,510,086 shares issued and outstanding, respectively
|
649
|
|
|
605
|
|
||
Additional paid in capital
|
1,063,102
|
|
|
965,384
|
|
||
Accumulated deficit
|
(193,121
|
)
|
|
(163,205
|
)
|
||
Accumulated other comprehensive income (loss)
|
8,746
|
|
|
(1,684
|
)
|
||
Non-controlling interest
|
3,167
|
|
|
3,423
|
|
||
Total Stockholders’ Equity
|
882,543
|
|
|
804,523
|
|
||
Total Liabilities and Stockholders’ Equity
|
$
|
2,279,168
|
|
|
$
|
2,154,913
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Interest income
|
$
|
19,322
|
|
|
$
|
16,771
|
|
|
$
|
54,270
|
|
|
$
|
46,098
|
|
Rental income
|
6,469
|
|
|
6,257
|
|
|
19,415
|
|
|
18,166
|
|
||||
Gain on sale of receivables and investments
|
7,713
|
|
|
10,868
|
|
|
16,718
|
|
|
31,333
|
|
||||
Fee income
|
5,338
|
|
|
1,487
|
|
|
12,850
|
|
|
4,114
|
|
||||
Total revenue
|
38,842
|
|
|
35,383
|
|
|
103,253
|
|
|
99,711
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
16,561
|
|
|
19,681
|
|
|
46,861
|
|
|
57,424
|
|
||||
Provision for loss on receivables
|
8,027
|
|
|
—
|
|
|
8,027
|
|
|
—
|
|
||||
Compensation and benefits
|
7,193
|
|
|
6,309
|
|
|
21,281
|
|
|
17,966
|
|
||||
General and administrative
|
3,737
|
|
|
3,551
|
|
|
10,818
|
|
|
10,481
|
|
||||
Total expenses
|
35,518
|
|
|
29,541
|
|
|
86,987
|
|
|
85,871
|
|
||||
Income before equity method investments
|
3,324
|
|
|
5,842
|
|
|
16,266
|
|
|
13,840
|
|
||||
Income (loss) from equity method investments
|
5,984
|
|
|
11,671
|
|
|
18,114
|
|
|
19,969
|
|
||||
Income (loss) before income taxes
|
9,308
|
|
|
17,513
|
|
|
34,380
|
|
|
33,809
|
|
||||
Income tax (expense) benefit
|
(132
|
)
|
|
(939
|
)
|
|
1,298
|
|
|
(1,110
|
)
|
||||
Net income (loss)
|
$
|
9,176
|
|
|
$
|
16,574
|
|
|
$
|
35,678
|
|
|
$
|
32,699
|
|
Net income (loss) attributable to non-controlling interest holders
|
74
|
|
|
91
|
|
|
191
|
|
|
177
|
|
||||
Net income (loss) attributable to controlling stockholders
|
$
|
9,102
|
|
|
$
|
16,483
|
|
|
$
|
35,487
|
|
|
$
|
32,522
|
|
Basic earnings (loss) per common share
|
$
|
0.14
|
|
|
$
|
0.30
|
|
|
$
|
0.55
|
|
|
$
|
0.60
|
|
Diluted earnings (loss) per common share
|
$
|
0.13
|
|
|
$
|
0.30
|
|
|
$
|
0.54
|
|
|
$
|
0.60
|
|
Weighted average common shares outstanding—basic
|
64,922,325
|
|
|
52,728,587
|
|
|
63,492,884
|
|
|
52,167,308
|
|
||||
Weighted average common shares outstanding—diluted
|
65,630,711
|
|
|
52,728,587
|
|
|
64,147,835
|
|
|
52,167,308
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss)
|
$
|
9,176
|
|
|
$
|
16,574
|
|
|
$
|
35,678
|
|
|
$
|
32,699
|
|
Unrealized gain (loss) on available-for-sale securities, net of tax benefit (provision) of $0.1 million and $0.2 million in each of the three and nine month periods ended 2019, and $0.0 million in each of the three and nine month periods ended 2018
|
10,289
|
|
|
(970
|
)
|
|
16,884
|
|
|
(4,002
|
)
|
||||
Unrealized gain (loss) on interest rate swaps, net of tax benefit (provision) of $0.0 million in each of the three and nine month periods ended 2019 and $(2.0) million in each of the three and nine months period ended 2018, respectively
|
(2,483
|
)
|
|
136
|
|
|
(6,415
|
)
|
|
8,115
|
|
||||
Comprehensive income (loss)
|
16,982
|
|
|
15,740
|
|
|
46,147
|
|
|
36,812
|
|
||||
Less: Comprehensive income (loss) attributable to non-controlling interest holders
|
101
|
|
|
86
|
|
|
230
|
|
|
199
|
|
||||
Comprehensive income (loss) attributable to controlling stockholders
|
$
|
16,881
|
|
|
$
|
15,654
|
|
|
$
|
45,917
|
|
|
$
|
36,613
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Non-controlling interests
|
|
Total
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
Balance at June 30, 2019
|
64,913
|
|
|
$
|
649
|
|
|
$
|
1,060,086
|
|
|
$
|
(180,217
|
)
|
|
$
|
968
|
|
|
$
|
3,258
|
|
|
$
|
884,744
|
|
Net income (loss)
|
|
|
|
|
|
|
9,102
|
|
|
|
|
74
|
|
|
9,176
|
|
||||||||||
Unrealized gain (loss) on available-for-sale securities
|
|
|
|
|
|
|
|
|
10,250
|
|
|
39
|
|
|
10,289
|
|
||||||||||
Unrealized gain (loss) on interest rate swaps
|
|
|
|
|
|
|
|
|
(2,472
|
)
|
|
(11
|
)
|
|
(2,483
|
)
|
||||||||||
Issued shares of common stock
|
|
|
|
|
82
|
|
|
|
|
|
|
|
|
82
|
|
|||||||||||
Equity-based compensation
|
|
|
|
|
3,023
|
|
|
|
|
|
|
13
|
|
|
3,036
|
|
||||||||||
Issuance (repurchase) of vested equity-based compensation shares
|
8
|
|
|
|
|
(28
|
)
|
|
|
|
|
|
|
|
(28
|
)
|
||||||||||
Redemption of OP Units
|
4
|
|
|
|
|
(61
|
)
|
|
|
|
|
|
(43
|
)
|
|
(104
|
)
|
|||||||||
Dividends and distributions
|
|
|
|
|
|
|
(22,006
|
)
|
|
|
|
(163
|
)
|
|
(22,169
|
)
|
||||||||||
Balance at September 30, 2019
|
64,925
|
|
|
$
|
649
|
|
|
$
|
1,063,102
|
|
|
$
|
(193,121
|
)
|
|
$
|
8,746
|
|
|
$
|
3,167
|
|
|
$
|
882,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at June 30, 2018
|
52,728
|
|
|
$
|
527
|
|
|
$
|
789,129
|
|
|
$
|
(150,624
|
)
|
|
$
|
3,855
|
|
|
$
|
3,509
|
|
|
$
|
646,396
|
|
Net income (loss)
|
|
|
|
|
|
|
16,483
|
|
|
|
|
91
|
|
|
16,574
|
|
||||||||||
Unrealized gain (loss) on available-for-sale securities
|
|
|
|
|
|
|
|
|
(965
|
)
|
|
(5
|
)
|
|
(970
|
)
|
||||||||||
Unrealized gain (loss) on interest rate swaps
|
|
|
|
|
|
|
|
|
134
|
|
|
2
|
|
|
136
|
|
||||||||||
Issued shares of common stock
|
|
|
—
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
(6
|
)
|
||||||||||
Equity-based compensation
|
|
|
|
|
2,269
|
|
|
|
|
|
|
11
|
|
|
2,280
|
|
||||||||||
Issuance (repurchase) of vested equity-based compensation shares
|
1
|
|
|
—
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
(9
|
)
|
|||||||||
Dividends and distributions
|
|
|
|
|
|
|
(17,693
|
)
|
|
|
|
(94
|
)
|
|
(17,787
|
)
|
||||||||||
Balance at September 30, 2018
|
52,729
|
|
|
$
|
527
|
|
|
$
|
791,383
|
|
|
$
|
(151,834
|
)
|
|
$
|
3,024
|
|
|
$
|
3,514
|
|
|
$
|
646,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Non-controlling interests
|
|
Total
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
Balance at December 31, 2018
|
60,510
|
|
|
$
|
605
|
|
|
$
|
965,384
|
|
|
$
|
(163,205
|
)
|
|
$
|
(1,684
|
)
|
|
$
|
3,423
|
|
|
$
|
804,523
|
|
Net income (loss)
|
|
|
|
|
|
|
35,487
|
|
|
|
|
191
|
|
|
35,678
|
|
||||||||||
Unrealized gain (loss) on available-for-sale securities
|
|
|
|
|
|
|
|
|
16,817
|
|
|
67
|
|
|
16,884
|
|
||||||||||
Unrealized gain (loss) on interest rate swaps
|
|
|
|
|
|
|
|
|
(6,387
|
)
|
|
(28
|
)
|
|
(6,415
|
)
|
||||||||||
Issued shares of common stock
|
3,994
|
|
|
40
|
|
|
97,226
|
|
|
|
|
|
|
|
|
97,266
|
|
|||||||||
Equity-based compensation
|
|
|
|
|
9,573
|
|
|
|
|
|
|
42
|
|
|
9,615
|
|
||||||||||
Issuance (repurchase) of vested equity-based compensation shares
|
417
|
|
|
4
|
|
|
(9,020
|
)
|
|
|
|
|
|
|
|
(9,016
|
)
|
|||||||||
Redemption of OP Units
|
4
|
|
|
|
|
(61
|
)
|
|
|
|
|
|
(43
|
)
|
|
(104
|
)
|
|||||||||
Dividends and distributions
|
|
|
|
|
|
|
(65,403
|
)
|
|
|
|
(485
|
)
|
|
(65,888
|
)
|
||||||||||
Balance at September 30, 2019
|
64,925
|
|
|
$
|
649
|
|
|
$
|
1,063,102
|
|
|
$
|
(193,121
|
)
|
|
$
|
8,746
|
|
|
$
|
3,167
|
|
|
$
|
882,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2017
|
51,665
|
|
|
$
|
517
|
|
|
$
|
770,983
|
|
|
$
|
(131,251
|
)
|
|
$
|
(1,065
|
)
|
|
$
|
3,597
|
|
|
$
|
642,781
|
|
Net income (loss)
|
|
|
|
|
|
|
32,522
|
|
|
|
|
177
|
|
|
32,699
|
|
||||||||||
Unrealized gain (loss) on available-for-sale securities
|
|
|
|
|
|
|
|
|
(3,981
|
)
|
|
(21
|
)
|
|
(4,002
|
)
|
||||||||||
Unrealized gain (loss) on interest rate swaps
|
|
|
|
|
|
|
|
|
8,070
|
|
|
45
|
|
|
8,115
|
|
||||||||||
Issued shares of common stock
|
834
|
|
|
8
|
|
|
15,385
|
|
|
|
|
|
|
|
|
15,393
|
|
|||||||||
Equity-based compensation
|
|
|
|
|
8,086
|
|
|
|
|
|
|
42
|
|
|
8,128
|
|
||||||||||
Issuance (repurchase) of vested equity-based compensation shares
|
226
|
|
|
2
|
|
|
(3,051
|
)
|
|
|
|
|
|
|
|
(3,049
|
)
|
|||||||||
Redemption of OP Units
|
4
|
|
|
|
|
(20
|
)
|
|
|
|
|
|
(47
|
)
|
|
(67
|
)
|
|||||||||
Dividends and distributions
|
|
|
|
|
|
|
(53,105
|
)
|
|
|
|
(279
|
)
|
|
(53,384
|
)
|
||||||||||
Balance at September 30, 2018
|
52,729
|
|
|
$
|
527
|
|
|
$
|
791,383
|
|
|
$
|
(151,834
|
)
|
|
$
|
3,024
|
|
|
$
|
3,514
|
|
|
$
|
646,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
35,678
|
|
|
$
|
32,699
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Provision for loss on receivables
|
8,027
|
|
|
—
|
|
||
Depreciation and amortization
|
2,693
|
|
|
3,561
|
|
||
Amortization of deferred financing costs
|
5,073
|
|
|
7,891
|
|
||
Equity-based compensation
|
10,385
|
|
|
7,881
|
|
||
Equity method investments
|
3,695
|
|
|
2,381
|
|
||
Non-cash gain on securitization
|
(18,575
|
)
|
|
(22,349
|
)
|
||
Gain on sale of receivables and investments
|
3,140
|
|
|
—
|
|
||
Changes in receivables held-for-sale
|
—
|
|
|
4,110
|
|
||
Changes in accounts payable and accrued expenses
|
(4,804
|
)
|
|
2,421
|
|
||
Other
|
(13,726
|
)
|
|
(8,800
|
)
|
||
Net cash provided by (used in) operating activities
|
31,586
|
|
|
29,795
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Equity method investments
|
(48,301
|
)
|
|
(3,756
|
)
|
||
Equity method investment distributions received
|
53,485
|
|
|
77,196
|
|
||
Proceeds from sales of equity method investments
|
8,433
|
|
|
12,433
|
|
||
Purchases of and investments in receivables
|
(274,472
|
)
|
|
(114,276
|
)
|
||
Principal collections from receivables
|
48,900
|
|
|
29,332
|
|
||
Proceeds from sales of receivables
|
134,932
|
|
|
—
|
|
||
Purchases of real estate
|
—
|
|
|
(23,178
|
)
|
||
Purchases of investments
|
(22,242
|
)
|
|
(19,127
|
)
|
||
Principal collections from investments
|
5,432
|
|
|
3,750
|
|
||
Proceeds from sales of investments and securitization assets
|
90,993
|
|
|
—
|
|
||
Funding of escrow accounts
|
(28,672
|
)
|
|
(28,759
|
)
|
||
Withdrawal from escrow accounts
|
29,156
|
|
|
29,090
|
|
||
Other
|
2,891
|
|
|
(736
|
)
|
||
Net cash provided by (used in) investing activities
|
535
|
|
|
(38,031
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from credit facilities
|
101,500
|
|
|
158,938
|
|
||
Principal payments on credit facilities
|
(321,869
|
)
|
|
(2,784
|
)
|
||
Proceeds from issuance of non-recourse debt
|
34,988
|
|
|
51,934
|
|
||
Principal payments on non-recourse debt
|
(180,708
|
)
|
|
(108,747
|
)
|
||
Proceeds from issuance of senior unsecured notes
|
507,313
|
|
|
—
|
|
||
Payments on deferred funding obligations
|
(18,791
|
)
|
|
(70,373
|
)
|
||
Net proceeds of common stock issuances
|
96,648
|
|
|
15,326
|
|
||
Payments of dividends and distributions
|
(64,239
|
)
|
|
(53,063
|
)
|
||
Other
|
(17,319
|
)
|
|
(4,232
|
)
|
||
Net cash provided by (used in) financing activities
|
137,523
|
|
|
(13,001
|
)
|
||
Increase (decrease) in cash, cash equivalents, and restricted cash
|
169,644
|
|
|
(21,237
|
)
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
59,353
|
|
|
118,177
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
228,997
|
|
|
$
|
96,940
|
|
Interest paid
|
$
|
39,884
|
|
|
$
|
50,880
|
|
Non-cash changes in deferred funding obligations and non-recourse debt (financing activity)
|
(78,008
|
)
|
|
843
|
|
||
Non-cash changes in receivables and investments (investing activity)
|
59,979
|
|
|
(248
|
)
|
||
Non-cash changes in residual assets (investing activity)
|
(21,746
|
)
|
|
(23,335
|
)
|
||
Non-cash changes in escrow accounts (investing activity)
|
18,029
|
|
|
—
|
|
1.
|
The Company
|
•
|
Equity in either preferred or common structures in unconsolidated entities;
|
•
|
Government and commercial receivables, such as loans for renewable energy and energy efficiency projects;
|
•
|
Real estate, such as land or other assets leased for use by sustainable infrastructure projects typically under long-term leases; and
|
•
|
Investments in debt securities of renewable energy or energy efficiency projects.
|
•
|
Level 2 — Observable prices that are based on inputs not quoted on active markets but corroborated by market data.
|
•
|
Level 3 — Unobservable inputs are used when little or no market data is available.
|
|
As of September 30, 2019
|
||||||||
|
Fair Value
|
|
Carrying
Value |
|
Level
|
||||
|
(in millions)
|
|
|
||||||
Assets
|
|
|
|
|
|
||||
Government receivables
|
$
|
318
|
|
|
$
|
300
|
|
|
Level 3
|
Commercial receivables
|
692
|
|
|
675
|
|
|
Level 3
|
||
Investments (1)
|
113
|
|
|
113
|
|
|
Level 3
|
||
Securitization residual assets (2)
|
84
|
|
|
84
|
|
|
Level 3
|
||
Liabilities
|
|
|
|
|
|
||||
Credit facilities (3)
|
$
|
38
|
|
|
$
|
38
|
|
|
Level 3
|
Non-recourse debt (3)
|
714
|
|
|
680
|
|
|
Level 3
|
||
Senior unsecured notes (3)
|
533
|
|
|
514
|
|
|
Level 2
|
||
Convertible notes (3)
|
168
|
|
|
151
|
|
|
Level 2
|
(1)
|
The amortized cost of our investments as of September 30, 2019, was $109 million.
|
(2)
|
Included in other assets on the consolidated balance sheet.
|
(3)
|
Fair value and carrying value exclude unamortized debt issuance costs.
|
|
As of December 31, 2018
|
||||||||
|
Fair Value
|
|
Carrying
Value |
|
Level
|
||||
|
(in millions)
|
|
|
||||||
Assets
|
|
|
|
|
|
||||
Government receivables
|
$
|
487
|
|
|
$
|
497
|
|
|
Level 3
|
Commercial receivables
|
443
|
|
|
447
|
|
|
Level 3
|
||
Investments (1)
|
170
|
|
|
170
|
|
|
Level 3
|
||
Securitization residual assets (2)
|
71
|
|
|
71
|
|
|
Level 3
|
||
Liabilities
|
|
|
|
|
|
||||
Credit facilities (3)
|
$
|
259
|
|
|
$
|
259
|
|
|
Level 3
|
Non-recourse debt (3)
|
835
|
|
|
852
|
|
|
Level 3
|
||
Convertible notes (3)
|
139
|
|
|
152
|
|
|
Level 2
|
|
For the three months ended September 30,
|
|
For the nine months ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in millions)
|
||||||||||||||
Balance, beginning of period
|
$
|
124
|
|
|
$
|
154
|
|
|
$
|
170
|
|
|
$
|
151
|
|
Purchases of investments
|
7
|
|
|
12
|
|
|
22
|
|
|
19
|
|
||||
Payments on investments
|
(2
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|
(4
|
)
|
||||
Sale of investments
|
(20
|
)
|
|
—
|
|
|
(85
|
)
|
|
—
|
|
||||
Realized gains on investments recorded in earnings
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Unrealized gains (losses) on investments recorded in AOCI
|
2
|
|
|
(1
|
)
|
|
8
|
|
|
(4
|
)
|
||||
Balance, end of period
|
$
|
113
|
|
|
$
|
162
|
|
|
$
|
113
|
|
|
$
|
162
|
|
|
Estimated Fair Value
|
|
Unrealized Losses (1)
|
||||||||||||
|
Securities with a loss shorter than 12 months
|
|
Securities with a loss longer than 12 months
|
|
Securities with a loss shorter than 12 months
|
|
Securities with a loss longer than 12 months
|
||||||||
|
(in millions)
|
||||||||||||||
September 30, 2019
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
1
|
|
December 31, 2018
|
82
|
|
|
67
|
|
|
1
|
|
|
3
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
|
(in millions)
|
||||||
Cash deposits
|
$
|
186
|
|
|
$
|
21
|
|
Restricted cash deposits (included in other assets)
|
43
|
|
|
38
|
|
||
Total cash deposits
|
$
|
229
|
|
|
$
|
59
|
|
Amount of cash deposits in excess of amounts federally insured
|
$
|
227
|
|
|
$
|
57
|
|
4.
|
Non-Controlling Interest
|
5.
|
Securitization of Financial Assets
|
|
As of and for the nine months ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Gains on securitizations
|
$
|
16
|
|
|
$
|
31
|
|
Cost of financial assets securitized
|
560
|
|
|
595
|
|
||
Proceeds from securitizations
|
576
|
|
|
626
|
|
||
Residual and servicing assets included in other assets
|
85
|
|
|
69
|
|
||
Cash received from residual and servicing assets
|
7
|
|
|
3
|
|
6.
|
Our Portfolio
|
|
Investment Grade
|
|
|
|
|
|
|
||||||||||||||||
|
Government (1)
|
|
Commercial Investment Grade (2)
|
|
Commercial Non-Investment Grade (3)
|
|
Subtotal,
Debt and Real Estate |
|
Equity
Method Investments |
|
Total
|
||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||
Equity investments in renewable energy projects
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
427
|
|
|
$
|
427
|
|
Receivables (4)
|
300
|
|
|
158
|
|
|
517
|
|
|
975
|
|
|
—
|
|
|
975
|
|
||||||
Real estate (5)
|
—
|
|
|
363
|
|
|
—
|
|
|
363
|
|
|
22
|
|
|
385
|
|
||||||
Investments
|
34
|
|
|
79
|
|
|
—
|
|
|
113
|
|
|
—
|
|
|
113
|
|
||||||
Total
|
$
|
334
|
|
|
$
|
600
|
|
|
$
|
517
|
|
|
$
|
1,451
|
|
|
$
|
449
|
|
|
$
|
1,900
|
|
% of Debt and real estate portfolio
|
23
|
%
|
|
41
|
%
|
|
36
|
%
|
|
100
|
%
|
|
N/A
|
|
|
N/A
|
|
||||||
Average remaining balance (6)
|
$
|
8
|
|
|
$
|
6
|
|
|
$
|
16
|
|
|
$
|
8
|
|
|
$
|
15
|
|
|
$
|
9
|
|
(1)
|
Transactions where the ultimate obligor is the U.S. federal government or state or local governments where the obligors are rated investment grade (either by an independent rating agency or based upon our internal credit analysis). This amount includes $223 million of U.S. federal government transactions and $111 million of transactions where the ultimate obligors are state or local governments. Transactions may have guaranties of energy savings from third party service providers, which typically are entities rated investment grade by an independent rating agency.
|
(2)
|
Transactions where the projects or the ultimate obligors are commercial entities that have been rated investment grade (either by an independent rating agency or based on our internal credit analysis). Of this total, $8 million of the transactions have been rated investment grade by an independent rating agency.
|
(3)
|
Transactions where the projects or the ultimate obligors are commercial entities that either have ratings below investment grade (either by an independent rating agency or using our internal credit analysis) or where the nature of the subordination in the asset causes it to be considered non-investment grade. This category of assets includes $445 million of mezzanine loans made on a non-recourse basis to special purpose subsidiaries of residential solar companies where the nature of the subordination causes it to be considered non-investment grade. These loans are secured by residential solar assets and we rely on certain limited indemnities, warranties, and other obligations of the residential solar companies or their other subsidiaries. Approximately $260 million of our non-investment grade loans were made to entities in which we also have non-controlling equity investments of approximately $19 million. Commercial Non-Investment Grade receivables also includes $72 million of transactions where the projects or the ultimate obligors are commercial entities that have ratings below investment grade using our internal credit analysis. $8 million of loans are on non-accrual status and are fully reserved for loss. See Receivables and Investments below for further information.
|
(4)
|
Total reconciles to the total of the government receivables and commercial receivables lines of the consolidated balance sheets.
|
(5)
|
Includes the real estate and the lease intangible assets (including those held through equity method investments) from which we receive scheduled lease payments, typically under long-term triple net lease agreements.
|
(6)
|
Excludes approximately 175 transactions each with outstanding balances that are less than $1 million and that in the aggregate total $60 million.
|
Investment Date
|
|
Investee
|
|
Carrying Value
|
||
|
|
|
|
(in millions)
|
||
Various
|
|
2007 Vento I, LLC
|
|
$
|
81
|
|
December 2015
|
|
Buckeye Wind Energy Class B Holdings, LLC
|
|
73
|
|
|
Various
|
|
Vivint Solar Asset 1 Class B, LLC
|
|
50
|
|
|
Various
|
|
Northern Frontier Wind, LLC
|
|
45
|
|
|
December 2018
|
|
3D Engie, LLC
|
|
39
|
|
|
October 2016
|
|
Invenergy Gunsight Mountain Holdings, LLC
|
|
35
|
|
|
Various
|
|
Helix Fund I, LLC
|
|
26
|
|
|
Various
|
|
Other transactions
|
|
100
|
|
|
|
|
Total equity method investments
|
|
$
|
449
|
|
|
Total
|
|
Less than 1
year |
|
1-5 years
|
|
5-10 years
|
|
More than 10
years |
||||||||||
|
(dollars in millions)
|
||||||||||||||||||
Receivables
|
|
|
|
|
|
|
|
|
|
||||||||||
Maturities by period
|
$
|
975
|
|
|
$
|
3
|
|
|
$
|
62
|
|
|
$
|
187
|
|
|
$
|
723
|
|
Weighted average yield by period
|
7.8
|
%
|
|
4.8
|
%
|
|
7.3
|
%
|
|
7.5
|
%
|
|
7.9
|
%
|
|||||
Investments
|
|
|
|
|
|
|
|
|
|
||||||||||
Maturities by period
|
$
|
113
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
101
|
|
Weighted average yield by period
|
4.6
|
%
|
|
—
|
%
|
|
—
|
%
|
|
4.1
|
%
|
|
4.7
|
%
|
|
September 30,
2019 |
|
December 31, 2018
|
||||
|
(in millions)
|
||||||
Real estate
|
|
|
|
||||
Land
|
$
|
269
|
|
|
$
|
269
|
|
Lease intangibles
|
104
|
|
|
104
|
|
||
Accumulated amortization of lease intangibles
|
(10
|
)
|
|
(8
|
)
|
||
Real estate
|
$
|
363
|
|
|
$
|
365
|
|
|
Future Amortization Expense
|
|
Minimum Rental Income Payments
|
||||
|
(in millions)
|
||||||
From October 1, 2019 to December 31, 2019
|
$
|
1
|
|
|
$
|
5
|
|
2020
|
3
|
|
|
22
|
|
||
2021
|
3
|
|
|
22
|
|
||
2022
|
3
|
|
|
22
|
|
||
2023
|
3
|
|
|
23
|
|
||
2024
|
3
|
|
|
24
|
|
||
Thereafter
|
78
|
|
|
765
|
|
||
Total
|
$
|
94
|
|
|
$
|
883
|
|
7.
|
Credit facilities
|
|
Rep-Based
Facility |
|
Approval-Based Facility
|
||||
|
(dollars in millions)
|
||||||
Outstanding balance
|
$
|
—
|
|
|
$
|
38
|
|
Value of collateral pledged to credit facility
|
115
|
|
|
199
|
|
||
Weighted average short-term borrowing rate
|
—
|
%
|
|
3.56
|
%
|
|
Future minimum maturities
|
||
|
(in millions)
|
||
October 1, 2019 to December 31, 2019
|
$
|
—
|
|
2020
|
7
|
|
|
2021
|
8
|
|
|
2022
|
8
|
|
|
2023
|
15
|
|
|
Total
|
$
|
38
|
|
8.
|
Long-term Debt
|
|
Outstanding Balance
as of |
|
|
|
|
|
|
|
Anticipated
Balance at Maturity |
|
Carrying Value of Assets Pledged as of
|
|
|
||||||||||||||
|
September 30, 2019
|
|
December 31, 2018
|
|
Interest
Rate |
|
|
|
Maturity Date
|
|
|
September 30,
2019 |
|
December 31, 2018
|
|
Description
of Assets Pledged |
|||||||||||
|
(dollars in millions)
|
|
|
||||||||||||||||||||||||
HASI Sustainable Yield Bond 2013-1 (1)
|
$
|
—
|
|
|
$
|
55
|
|
|
2.79%
|
|
|
|
December 2019
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
76
|
|
|
Receivables
|
HASI Sustainable Yield Bond 2015-1A
|
87
|
|
|
90
|
|
|
4.28%
|
|
|
|
October 2034
|
|
—
|
|
|
127
|
|
|
135
|
|
|
Receivables, real estate and real estate intangibles
|
|||||
HASI Sustainable Yield Bond 2015-1B Note
|
13
|
|
|
13
|
|
|
5.41%
|
|
|
|
October 2034
|
|
—
|
|
|
127
|
|
|
135
|
|
|
Class B Bond of HASI Sustainable Yield Bond 2015-1
|
|||||
2017 Credit Agreement
|
77
|
|
|
112
|
|
|
4.12%
|
|
|
|
January 2023
|
|
—
|
|
|
93
|
|
|
151
|
|
|
Equity interests in Strong Upwind Holdings I, II, III, and IV LLC, and Northern Frontier, LLC
|
|||||
HASI SYB Loan Agreement 2015-2
|
29
|
|
|
32
|
|
|
6.17%
|
|
(2)
|
|
December 2023
|
|
—
|
|
|
73
|
|
|
72
|
|
|
Equity interest in Buckeye Wind Energy Class B Holdings LLC, related interest rate swap
|
|||||
HASI SYB Trust 2016-2
|
76
|
|
|
77
|
|
|
4.35%
|
|
|
|
April 2037
|
|
—
|
|
|
77
|
|
|
81
|
|
|
Receivables
|
|||||
2017 Master Repurchase Agreement
|
—
|
|
|
56
|
|
|
—%
|
|
|
|
January 2020
|
(3)
|
—
|
|
|
62
|
|
|
67
|
|
|
Receivables and investments
|
|||||
HASI ECON 101 Trust
|
129
|
|
|
133
|
|
|
3.57%
|
|
|
|
May 2041
|
|
—
|
|
|
134
|
|
|
137
|
|
|
Receivables and investments
|
|||||
HASI SYB Trust 2017-1
|
156
|
|
|
159
|
|
|
3.86%
|
|
|
|
March 2042
|
|
—
|
|
|
207
|
|
|
208
|
|
|
Receivables, real estate and real estate intangibles
|
|||||
Other non-recourse
debt (4)
|
113
|
|
|
125
|
|
|
3.15% - 7.45%
|
|
|
|
2019 to 2046
|
|
18
|
|
|
114
|
|
|
178
|
|
|
Receivables
|
|||||
Debt issuance costs
|
(15
|
)
|
|
(17
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-recourse debt (5)
|
$
|
665
|
|
|
$
|
835
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
This bond was prepaid without penalty in the second quarter of 2019.
|
(2)
|
Interest rate represents the current period’s LIBOR based rate plus the spread. We have hedged the LIBOR rate exposure using interest rate swaps fixed at 2.55% for HASI SYB Loan Agreement 2015-2.
|
(3)
|
We modified this agreement in the second quarter of 2019 to extend the maturity date to October 2019, and again in the fourth quarter of 2019 to extend the maturity to January 2020.
|
(4)
|
Other non-recourse debt consists of various debt agreements used to finance certain of our receivables for their term. Debt service payment requirements, in a majority of cases, are equal to or less than the cash flows received from the underlying receivables.
|
(5)
|
The total collateral pledged against our non-recourse debt was $887 million and $1,105 million as of September 30, 2019 and December 31, 2018, respectively. In addition, $41 million and $35 million of our restricted cash balance was pledged as collateral to various non-recourse loans as of September 30, 2019 and December 31, 2018, respectively.
|
|
Future minimum maturities
|
||
|
(in millions)
|
||
October 1, 2019 to December 31, 2019
|
$
|
12
|
|
2020
|
25
|
|
|
2021
|
26
|
|
|
2022
|
27
|
|
|
2023
|
126
|
|
|
2024
|
33
|
|
|
Thereafter
|
431
|
|
|
Total minimum maturities
|
$
|
680
|
|
Deferred financing costs, net
|
(15
|
)
|
|
Total non-recourse debt
|
$
|
665
|
|
|
September 30, 2019
|
||
|
(in millions)
|
||
Principal
|
$
|
500
|
|
Accrued interest
|
7
|
|
|
Unamortized premium
|
7
|
|
|
Less: Unamortized financing costs
|
(8
|
)
|
|
Carrying value of 2024 Notes
|
$
|
506
|
|
|
September 30,
2019 |
|
December 31, 2018
|
||||
|
(in millions)
|
||||||
Principal
|
$
|
150
|
|
|
$
|
150
|
|
Accrued interest
|
1
|
|
|
2
|
|
||
Less: Unamortized financing costs
|
(3
|
)
|
|
(4
|
)
|
||
Carrying value of convertible notes
|
$
|
148
|
|
|
$
|
148
|
|
9.
|
Commitments and Contingencies
|
Announced Date
|
|
Record Date
|
|
Pay Date
|
|
Amount per
share |
|||
2/21/2018
|
|
4/4/2018
|
|
|
4/12/2018
|
|
$
|
0.330
|
|
5/31/2018
|
|
7/5/2018
|
|
|
7/12/2018
|
|
0.330
|
|
|
9/12/2018
|
|
10/3/2018
|
|
|
10/11/2018
|
|
0.330
|
|
|
12/12/2018
|
|
12/26/2018
|
(1)
|
|
1/10/2019
|
|
0.330
|
|
|
2/21/2019
|
|
4/3/2019
|
|
|
4/11/2019
|
|
0.335
|
|
|
6/6/2019
|
|
7/5/2019
|
|
|
7/12/2019
|
|
0.335
|
|
|
9/12/2019
|
|
10/3/2019
|
|
|
10/10/2019
|
|
0.335
|
|
(1)
|
This dividend was treated as a distribution in 2019 for tax purposes.
|
Closing Date
|
|
Common Stock Offerings
|
|
Shares Issued (1)
|
|
Price Per Share
|
|
Net Proceeds (2)
|
|||||||
|
|
|
|
(amounts in millions, except per share amounts)
|
|||||||||||
5/18/18 to 6/25/18
|
|
ATM
|
|
0.834
|
|
|
$
|
18.76
|
|
|
(3)
|
|
$
|
15
|
|
11/15/18 to 12/11/18
|
|
ATM
|
|
2.777
|
|
|
23.37
|
|
|
(3)
|
|
64
|
|
||
12/17/2018 and 1/3/2019
|
|
Public Offering
|
|
5.465
|
|
|
21.60
|
|
|
(4)
|
|
117
|
|
||
1/23/19 to 3/21/19
|
|
ATM
|
|
1.603
|
|
|
23.39
|
|
|
(3)
|
|
37
|
|
||
5/7/2019 to 6/7/2019
|
|
ATM
|
|
1.926
|
|
|
26.33
|
|
|
(3)
|
|
50
|
|
(1)
|
Includes shares issued in connection with the exercise of the underwriters’ option to purchase additional shares.
|
(2)
|
Net proceeds from the offerings are shown after deducting underwriting discounts, commissions and other offering costs.
|
(3)
|
Represents the average price per share at which investors in our ATM offerings purchased our shares.
|
(4)
|
Represents the price per share at which the underwriters in our public offerings purchased our shares.
|
|
Restricted Shares of Common Stock
|
|
Weighted Average Grant Date Fair Value
|
|
Value
|
|||||
|
|
|
(per share)
|
|
(in millions)
|
|||||
Ending Balance — December 31, 2017
|
1,399,593
|
|
|
$
|
18.73
|
|
|
$
|
26.2
|
|
Granted
|
454,106
|
|
|
19.72
|
|
|
9.0
|
|
||
Vested
|
(370,072
|
)
|
|
18.88
|
|
|
(7.0
|
)
|
||
Forfeited
|
(96,871
|
)
|
|
18.92
|
|
|
(1.8
|
)
|
||
Ending Balance — December 31, 2018
|
1,386,756
|
|
|
$
|
19.00
|
|
|
$
|
26.4
|
|
Granted
|
150,493
|
|
|
23.99
|
|
|
3.6
|
|
||
Vested
|
(767,885
|
)
|
|
18.90
|
|
|
(14.5
|
)
|
||
Forfeited
|
(5,789
|
)
|
|
20.62
|
|
|
(0.1
|
)
|
||
Ending Balance — September 30, 2019
|
763,575
|
|
|
$
|
20.07
|
|
|
$
|
15.4
|
|
|
Restricted Stock Units (1)
|
|
Weighted Average Grant Date Fair Value
|
|
Value
|
|||||
|
|
|
(per share)
|
|
(in millions)
|
|||||
Ending Balance — December 31, 2017
|
255,706
|
|
|
$
|
18.99
|
|
|
$
|
4.9
|
|
Granted
|
176,128
|
|
|
20.24
|
|
|
3.5
|
|
||
Vested
|
(20,368
|
)
|
|
18.99
|
|
|
(0.4
|
)
|
||
Forfeited
|
(18,318
|
)
|
|
19.05
|
|
|
(0.3
|
)
|
||
Ending Balance — December 31, 2018
|
393,148
|
|
|
$
|
19.55
|
|
|
$
|
7.7
|
|
Granted
|
46,586
|
|
|
25.10
|
|
|
1.2
|
|
||
Vested
|
(1,380
|
)
|
|
21.68
|
|
|
—
|
|
||
Forfeited
|
(2,776
|
)
|
|
22.23
|
|
|
(0.1
|
)
|
||
Ending Balance — September 30, 2019
|
435,578
|
|
|
$
|
20.12
|
|
|
$
|
8.8
|
|
(1)
|
As discussed in Note 2, restricted stock units with market-based vesting conditions can vest between 0% and 200% subject to both the absolute performance of the Company's common stock as well as relative performance compared to a group of peers.
|
|
LTIP Units (1)
|
|
Weighted Average Grant Date Fair Value
|
|
Value
|
|||||
|
|
|
(per share)
|
|
(in millions)
|
|||||
Ending Balance — December 31, 2018
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Granted
|
209,330
|
|
|
25.84
|
|
|
5.4
|
|
||
Vested
|
(8,020
|
)
|
|
25.82
|
|
|
(0.2
|
)
|
||
Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
||
Ending Balance — September 30, 2019
|
201,310
|
|
|
$
|
25.84
|
|
|
$
|
5.2
|
|
(1)
|
See Note 4 for information on the vesting of LTIP Units.
|
|
LTIP Units (1)
|
|
Weighted Average Grant Date Fair Value
|
|
Value
|
|||||
|
|
|
(per share)
|
|
(in millions)
|
|||||
Ending Balance — December 31, 2018
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Granted
|
180,500
|
|
|
26.70
|
|
|
4.8
|
|
||
Vested
|
—
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
||
Ending Balance — September 30, 2019
|
180,500
|
|
|
$
|
26.70
|
|
|
$
|
4.8
|
|
(1)
|
See Note 4 for information on the vesting of LTIP Units. LTIP Units with market-based vesting conditions can vest between 0% and 200% subject to both the absolute performance of the Company's common stock as well as relative performance compared to a group of peers.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Numerator:
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands, except share and per share data)
|
||||||||||||||
Net income (loss) attributable to controlling stockholders and participating securities
|
$
|
9,102
|
|
|
$
|
16,483
|
|
|
$
|
35,487
|
|
|
$
|
32,522
|
|
Less: Dividends on participating securities
|
(300
|
)
|
|
(433
|
)
|
|
(900
|
)
|
|
(1,342
|
)
|
||||
Undistributed earnings attributable to participating securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss) attributable to controlling stockholders
|
$
|
8,802
|
|
|
$
|
16,050
|
|
|
$
|
34,587
|
|
|
$
|
31,180
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of common shares — basic
|
64,922,325
|
|
|
52,728,587
|
|
|
63,492,884
|
|
|
52,167,308
|
|
||||
Weighted-average number of common shares — diluted
|
65,630,711
|
|
|
52,728,587
|
|
|
64,147,835
|
|
|
52,167,308
|
|
||||
Basic earnings per common share
|
$
|
0.14
|
|
|
$
|
0.30
|
|
|
$
|
0.55
|
|
|
$
|
0.60
|
|
Diluted earnings per common share
|
$
|
0.13
|
|
|
$
|
0.30
|
|
|
$
|
0.54
|
|
|
$
|
0.60
|
|
Other Information:
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of OP units
|
279,415
|
|
|
281,289
|
|
|
278,202
|
|
|
282,171
|
|
||||
Unvested restricted common stock outstanding at period end (i.e., participating securities)
|
|
|
|
|
763,575
|
|
|
1,310,796
|
|
|
Buckeye Wind Energy Class B Holdings, LLC
|
|
Other Investments (1)
|
|
Total
|
||||||
|
(in millions)
|
||||||||||
Balance Sheet
|
|
|
|
|
|
||||||
As of June 30, 2019
|
|||||||||||
Current assets
|
$
|
3
|
|
|
$
|
332
|
|
|
$
|
335
|
|
Total assets
|
271
|
|
|
4,085
|
|
|
4,356
|
|
|||
Current liabilities
|
1
|
|
|
187
|
|
|
188
|
|
|||
Total liabilities
|
12
|
|
|
1,416
|
|
|
1,428
|
|
|||
Members' equity
|
259
|
|
|
2,669
|
|
|
2,928
|
|
|||
As of December 31, 2018
|
|||||||||||
Current assets
|
4
|
|
|
228
|
|
|
232
|
|
|||
Total assets
|
276
|
|
|
3,903
|
|
|
4,179
|
|
|||
Current liabilities
|
1
|
|
|
163
|
|
|
164
|
|
|||
Total liabilities
|
12
|
|
|
1,204
|
|
|
1,216
|
|
|||
Members' equity
|
264
|
|
|
2,699
|
|
|
2,963
|
|
|||
Income Statement
|
|
|
|
|
|
||||||
For the six months ended June 30, 2019
|
|||||||||||
Revenue
|
7
|
|
|
179
|
|
|
186
|
|
|||
Income from continuing operations
|
(2
|
)
|
|
(18
|
)
|
|
(20
|
)
|
|||
Net income
|
(2
|
)
|
|
(18
|
)
|
|
(20
|
)
|
|||
For the six months ended June 30, 2018
|
|||||||||||
Revenue
|
7
|
|
|
131
|
|
|
138
|
|
|||
Income from continuing operations
|
(2
|
)
|
|
32
|
|
|
30
|
|
|||
Net income
|
(2
|
)
|
|
32
|
|
|
30
|
|
•
|
Behind-The-Meter ("BTM"): distributed building or facility projects, which reduce energy usage or cost through the use of solar generation and energy storage or energy efficiency improvements including heating, ventilation and air conditioning systems (“HVAC”), lighting, energy controls, roofs, windows, building shells, and/or combined heat and power systems;
|
•
|
Grid Connected ("GC"): projects that deploy cleaner energy sources, such as solar and wind to generate power where the off-taker or counterparty is transacting in the wholesale electric power grid; and
|
•
|
Other Sustainable Infrastructure: upgraded transmission or distribution systems, water and storm water infrastructure, seismic retrofits and other projects, that improve water or energy efficiency, increase resiliency, positively impact the environment or more efficiently use natural resources.
|
•
|
Equity in either preferred or common structures in unconsolidated entities;
|
•
|
Government and commercial receivables or securities, such as loans for renewable energy and energy efficiency projects; and
|
•
|
Real estate, such as land or other assets leased for use by sustainable infrastructure projects typically under long-term leases.
|
•
|
Equity investments in either preferred or common structures in unconsolidated entities;
|
•
|
Government and commercial receivables, such as loans for renewable energy and energy efficiency projects;
|
•
|
Real estate, such as land or other assets leased for use by sustainable infrastructure projects typically under long-term leases; and
|
•
|
Investments in debt securities of renewable energy or energy efficiency projects.
|
|
Balance
|
|
Maturity
|
||
|
(in millions)
|
|
|
||
Fixed-rate receivables, interest rates less than 5.00% per annum
|
$
|
280
|
|
|
2020 to 2046
|
Fixed-rate receivables, interest rates from 5.00% to 6.50% per annum
|
69
|
|
|
2020 to 2054
|
|
Fixed-rate receivables, interest rates greater than 6.50% per annum
|
634
|
|
|
2019 to 2069
|
|
Receivables
|
983
|
|
|
|
|
Allowance for loss on receivables
|
(8
|
)
|
|
|
|
Receivables, net of allowance
|
975
|
|
|
|
|
Fixed-rate investments, interest rates less than 5.00% per annum
|
68
|
|
|
2025 to 2045
|
|
Fixed-rate investments, interest rates from 5.00% to 6.50% per annum
|
45
|
|
|
2028 to 2051
|
|
Total receivables and investments
|
$
|
1,088
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(dollars in millions)
|
||||||||||||||
Interest income, receivables
|
$
|
17
|
|
|
$
|
15
|
|
|
$
|
48
|
|
|
$
|
40
|
|
Average monthly balance of receivables
|
$
|
906
|
|
|
$
|
1,041
|
|
|
$
|
901
|
|
|
$
|
1,004
|
|
Average interest rate of receivables
|
7.5
|
%
|
|
5.6
|
%
|
|
7.1
|
%
|
|
5.3
|
%
|
||||
Interest income, investments
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
5
|
|
Average monthly balance of investments
|
$
|
126
|
|
|
$
|
166
|
|
|
$
|
160
|
|
|
$
|
160
|
|
Average interest rate of investments
|
4.5
|
%
|
|
4.1
|
%
|
|
4.3
|
%
|
|
4.0
|
%
|
||||
Rental income
|
$
|
7
|
|
|
$
|
6
|
|
|
$
|
19
|
|
|
$
|
18
|
|
Average monthly balance of real estate
|
$
|
363
|
|
|
$
|
355
|
|
|
$
|
364
|
|
|
$
|
345
|
|
Average yield on real estate
|
7.1
|
%
|
|
7.0
|
%
|
|
7.1
|
%
|
|
7.0
|
%
|
||||
Average monthly balance of receivables, investments, and real estate
|
$
|
1,395
|
|
|
$
|
1,562
|
|
|
$
|
1,425
|
|
|
$
|
1,509
|
|
Average yield from receivables, investments, and real estate
|
7.2
|
%
|
|
5.8
|
%
|
|
6.8
|
%
|
|
5.6
|
%
|
||||
Interest expense (1)
|
$
|
14
|
|
|
$
|
16
|
|
|
$
|
40
|
|
|
$
|
46
|
|
Average monthly balance of debt (1)
|
$
|
1,102
|
|
|
$
|
1,349
|
|
|
$
|
1,106
|
|
|
$
|
1,272
|
|
Average interest rate of debt (1)
|
5.2
|
%
|
|
4.8
|
%
|
|
4.8
|
%
|
|
4.8
|
%
|
||||
Average interest spread (1)
|
2.0
|
%
|
|
1.0
|
%
|
|
2.0
|
%
|
|
0.8
|
%
|
||||
Net investment margin (1)
|
3.1
|
%
|
|
1.6
|
%
|
|
3.1
|
%
|
|
1.6
|
%
|
(1)
|
Excludes amounts related to the non-recourse debt used to finance the equity method investments in the renewable energy projects because our earnings from these equity investments are not included in total revenue.
|
|
Payment due by Period
|
||||||||||||||||||
|
Total
|
|
Less than
1 year
|
|
1-5
years
|
|
5-10
years
|
|
More than
10 years
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Receivables
|
$
|
975
|
|
|
$
|
60
|
|
|
$
|
136
|
|
|
$
|
127
|
|
|
$
|
652
|
|
Investments
|
113
|
|
|
4
|
|
|
18
|
|
|
25
|
|
|
66
|
|
•
|
the anticipated maturity dates of our receivables and investments and the weighted average yield for each range of maturities as of September 30, 2019,
|
•
|
the term of our leases and a schedule of our future minimum rental income under our land lease agreements as of September 30, 2019,
|
•
|
the credit quality of our Portfolio, and
|
•
|
the receivables on non-accrual status.
|
|
Three Months Ended September 30,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
(dollars in millions)
|
|||||||||||||
Revenue
|
|
|
|
|
|
|
|
|||||||
Interest income
|
$
|
19
|
|
|
$
|
17
|
|
|
$
|
2
|
|
|
12
|
%
|
Rental income
|
7
|
|
|
6
|
|
|
1
|
|
|
17
|
%
|
|||
Gain on sale of receivables and investments
|
8
|
|
|
11
|
|
|
(3
|
)
|
|
(27
|
)%
|
|||
Fee income
|
5
|
|
|
1
|
|
|
4
|
|
|
400
|
%
|
|||
Total revenue
|
39
|
|
|
35
|
|
|
4
|
|
|
11
|
%
|
|||
Expenses
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
17
|
|
|
20
|
|
|
(3
|
)
|
|
(15
|
)%
|
|||
Provision for loss on receivables
|
8
|
|
|
—
|
|
|
8
|
|
|
NM
|
|
|||
Compensation and benefits
|
7
|
|
|
6
|
|
|
1
|
|
|
17
|
%
|
|||
General and administrative
|
4
|
|
|
3
|
|
|
1
|
|
|
33
|
%
|
|||
Total expenses
|
36
|
|
|
29
|
|
|
7
|
|
|
24
|
%
|
|||
Income before equity method investments
|
3
|
|
|
6
|
|
|
(3
|
)
|
|
(50
|
)%
|
|||
Income (loss) from equity method investments
|
6
|
|
|
12
|
|
|
(6
|
)
|
|
(50
|
)%
|
|||
Income (loss) before income taxes
|
9
|
|
|
18
|
|
|
(9
|
)
|
|
(50
|
)%
|
|||
Income tax (expense) benefit
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
(100
|
)%
|
|||
Net income (loss)
|
$
|
9
|
|
|
$
|
17
|
|
|
$
|
(8
|
)
|
|
(47
|
)%
|
•
|
Net income decreased by $8 million primarily due to a recent court ruling resulting in a provision for loss on receivables that were previously placed on non-accrual status in 2017. A $4 million increase in total revenue and a $3 million decrease in interest expense were offset by a $6 million decrease in income from equity method investments and a $1 million net increase in compensation and benefits and general and administrative expenses and taxes. These results do not reflect the non-GAAP core earnings adjustment applied to our equity method investments, which is discussed in the non-GAAP financial measures section below. See Note 6 to our financial statements for a further discussion of our allowance for loss on receivables.
|
•
|
Total revenue increased by $4 million due to a $3 million increase in interest and rental income resulting from higher yielding assets in the portfolio and a $1 million increase in gain on sale and fee income.
|
•
|
Interest expense decreased by $3 million primarily due to lower average outstanding borrowings.
|
•
|
Income from equity method investments decreased by $6 million, primarily due to a project company's negotiated settlement of a power purchase agreement with one of our investee's off-takers in the same period last year.
|
|
Nine Months Ended September 30,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
$ Change
|
|
% Change
|
|||||||
|
(dollars in millions)
|
|||||||||||||
Revenue
|
|
|
|
|
|
|
|
|||||||
Interest income
|
$
|
54
|
|
|
$
|
46
|
|
|
$
|
8
|
|
|
17
|
%
|
Rental income
|
19
|
|
|
18
|
|
|
1
|
|
|
6
|
%
|
|||
Gain on sale of receivables and investments
|
17
|
|
|
31
|
|
|
(14
|
)
|
|
(45
|
)%
|
|||
Fee income
|
13
|
|
|
5
|
|
|
8
|
|
|
160
|
%
|
|||
Total revenue
|
103
|
|
|
100
|
|
|
3
|
|
|
3
|
%
|
|||
Expenses
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
47
|
|
|
57
|
|
|
(10
|
)
|
|
(18
|
)%
|
|||
Provision for loss on receivables
|
8
|
|
|
—
|
|
|
8
|
|
|
NM
|
|
|||
Compensation and benefits
|
21
|
|
|
18
|
|
|
3
|
|
|
17
|
%
|
|||
General and administrative
|
11
|
|
|
11
|
|
|
—
|
|
|
—
|
%
|
|||
Total expenses
|
87
|
|
|
86
|
|
|
1
|
|
|
1
|
%
|
|||
Income before equity method investments
|
16
|
|
|
14
|
|
|
2
|
|
|
14
|
%
|
|||
Income (loss) from equity method investments
|
18
|
|
|
20
|
|
|
(2
|
)
|
|
(10
|
)%
|
|||
Income (loss) before income taxes
|
34
|
|
|
34
|
|
|
—
|
|
|
—
|
%
|
|||
Income tax (expense) benefit
|
1
|
|
|
(1
|
)
|
|
2
|
|
|
(200
|
)%
|
|||
Net income (loss)
|
$
|
35
|
|
|
$
|
33
|
|
|
$
|
2
|
|
|
6
|
%
|
•
|
Net income increased by approximately $2 million as a result of a $3 million increase in total revenue and a $10 million decrease in interest expense which was offset by the $8 million provision described above and a $3 million increase in compensation and benefits and general and administrative expenses. A decrease in income from equity method investments offset an increase in income tax (expense) benefit. These results do not reflect the non-GAAP core earnings adjustment applied to our equity method investments, which is discussed in the non-GAAP financial measures section below.
|
•
|
Total revenue increased by $3 million when compared to the same period in 2018. Higher interest income and rental income of $9 million resulting from higher yielding assets in the portfolio offset the decline in the combination of gain on sale of receivables and investments and fee income of $6 million primarily due to the mix of our securitization activity including the rotation of lower yielding assets off of our balance sheet in 2019.
|
•
|
Interest expense decreased by $10 million primarily due to lower average outstanding borrowings. Provision for loss on receivables grew by $8 million due to a recent court ruling resulting in a provision for loss on receivables that were previously placed on non-accrual status in 2017. See Note 6 to our financial statements for a further discussion of our allowance for loss on receivables.
|
•
|
Compensation and benefits increased by $3 million due to an increase in equity-based compensation expense resulting from the timing of vesting and higher award valuations.
|
•
|
Income from equity method investments decreased by $2 million during the nine months ended September 30, 2019 when compared to the same period in 2018, primarily due to a project company's negotiated settlement of a power purchase agreement with one of our investee's off-takers in the same period last year. This decline was offset by a $2 million increase in income tax benefit as compared to 2018.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||||||||||
|
$
|
|
Per
Share
|
|
$
|
|
Per
Share
|
|
$
|
|
Per
Share
|
|
$
|
|
Per
Share
|
||||||||||||||||
|
(dollars in thousands, except per share amounts)
|
||||||||||||||||||||||||||||||
Net income (loss) attributable to controlling stockholders (1)
|
$
|
9,102
|
|
|
$
|
0.13
|
|
|
$
|
16,483
|
|
|
$
|
0.30
|
|
|
$
|
35,487
|
|
|
$
|
0.54
|
|
|
$
|
32,522
|
|
|
$
|
0.60
|
|
Core earnings adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Reverse GAAP (income) loss from equity method investments
|
(5,984
|
)
|
|
|
|
(11,671
|
)
|
|
|
|
(18,114
|
)
|
|
|
|
(19,969
|
)
|
|
|
||||||||||||
Add back core equity method investments earnings
|
9,715
|
|
|
|
|
10,306
|
|
|
|
|
28,857
|
|
|
|
|
30,810
|
|
|
|
||||||||||||
Non-cash equity-based compensation charges
|
3,395
|
|
|
|
|
2,657
|
|
|
|
|
10,384
|
|
|
|
|
7,881
|
|
|
|
||||||||||||
Non-cash provision for loss on receivables
|
8,027
|
|
|
|
|
—
|
|
|
|
|
8,027
|
|
|
|
|
—
|
|
|
|
||||||||||||
Amortization of intangibles
|
823
|
|
|
|
|
812
|
|
|
|
|
2,462
|
|
|
|
|
2,380
|
|
|
|
||||||||||||
Non-cash provision (benefit) for income taxes
|
132
|
|
|
|
|
932
|
|
|
|
|
(1,304
|
)
|
|
|
|
932
|
|
|
|
||||||||||||
Current year earnings attributable to non-controlling interest
|
74
|
|
|
|
|
91
|
|
|
|
|
191
|
|
|
|
|
177
|
|
|
|
||||||||||||
Core earnings (2)
|
$
|
25,284
|
|
|
$
|
0.38
|
|
|
$
|
19,610
|
|
|
$
|
0.36
|
|
|
$
|
65,990
|
|
|
$
|
1.01
|
|
|
$
|
54,733
|
|
|
$
|
1.01
|
|
(1)
|
This is the GAAP diluted earnings per share and is the most comparable GAAP measure to our core earnings per share.
|
(2)
|
Core earnings per share is based on 66,785,779 shares and 65,425,114 shares for the three and nine months ended September 30, 2019 and 54,711,488 shares and 54,116,864 shares for the three and nine months ended September 30, 2018, which represents the weighted average number of fully-diluted shares outstanding including our restricted stock awards and restricted stock units and the non-controlling interest in our Operating Partnership. We include any potential common stock issuance in this calculation related to our convertible notes using the treasury stock method.
|
|
As of
|
||||||
|
September 30, 2019
|
|
December 31,
2018 |
||||
|
(dollars in millions)
|
||||||
Equity method investments
|
$
|
449
|
|
|
$
|
471
|
|
Government receivables
|
300
|
|
|
497
|
|
||
Commercial receivables
|
675
|
|
|
447
|
|
||
Real estate
|
363
|
|
|
365
|
|
||
Investments
|
113
|
|
|
170
|
|
||
Assets held in securitization trusts
|
3,768
|
|
|
3,334
|
|
||
Managed Assets
|
$
|
5,668
|
|
|
$
|
5,284
|
|
Losses on receivables as a percentage of assets under management
|
0.1
|
%
|
|
0.0
|
%
|
|
September 30, 2019
|
|
% of Total
|
|
December 31, 2018
|
|
% of Total
|
||||||
|
(dollars in millions)
|
|
|
|
(dollars in millions)
|
|
|
||||||
Floating-rate borrowings
|
$
|
38
|
|
|
3
|
%
|
|
$
|
317
|
|
|
26
|
%
|
Fixed-rate debt
|
1,318
|
|
|
97
|
%
|
|
925
|
|
|
74
|
%
|
||
Total debt (1)
|
$
|
1,356
|
|
|
100
|
%
|
|
$
|
1,242
|
|
|
100
|
%
|
Equity
|
$
|
883
|
|
|
|
|
$
|
805
|
|
|
|
||
Leverage
|
1.5 to 1
|
|
|
|
|
1.5 to 1
|
|
|
|
(1)
|
Floating-rate borrowings include borrowings under our floating-rate credit facilities, and approximately $58 million of non-recourse debt with floating rate exposure as of December 31, 2018, respectively. Fixed-rate debt also includes the present notional value of non-recourse debt that is hedged using interest rate swaps. Debt excludes securitizations that are not consolidated on our balance sheet.
|
Period
|
|
Total number of shares purchased
|
|
Average price
per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
|
|
Maximum
number of
shares that
may yet be
purchased
under the
plans or programs
|
||
March 2019
|
|
253,743
|
|
|
25.31
|
|
|
N/A
|
|
N/A
|
May 2019
|
|
97,343
|
|
|
26.36
|
|
|
N/A
|
|
N/A
|
July 2019
|
|
885
|
|
|
28.06
|
|
|
N/A
|
|
N/A
|
August 2019
|
|
91
|
|
|
26.83
|
|
|
N/A
|
|
N/A
|
Exhibit
number
|
|
Exhibit description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
101.SCH*
|
|
Inline XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL*
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF*
|
|
Inline XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB*
|
|
Inline XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101. PRE*
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
104
|
|
Cover Page Interactive Data File Included as Exhibit 101 (embedded within the Inline XBRL document)
|
|
|
|
|
|
|
|
|
|
|
HANNON ARMSTRONG SUSTAINABLE
INFRASTRUCTURE CAPITAL, INC.
(Registrant)
|
|
|
|
||
Date: November 1, 2019
|
|
|
|
/s/ Jeffrey W. Eckel
|
|
|
|
|
Jeffrey W. Eckel
|
|
|
|
|
Chairman, Chief Executive Officer and President
|
|
|
|
||
Date: November 1, 2019
|
|
|
|
/s/ Charles W. Melko
|
|
|
|
|
Charles W. Melko
|
|
|
|
|
Chief Accounting Officer and Senior Vice President
|
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