Hannon Armstrong Sustainable Infrastructure Capital, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Our Portfolio (Tables)

Our Portfolio (Tables)

12 Months Ended

Dec. 31, 2017

Asset Retirement Obligation Disclosure [Abstract]

Analysis of Portfolio by Type of Obligor and Credit Quality

The following is an analysis of our Portfolio by type of obligor and credit quality as of December 31, 2017:


	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	$	—		$	—		$	—		$	—		$	502	$	502
Receivables (4)		519			464			10			993			—		993
Receivables held-for-sale		16			3			—			19			—		19
Real estate (5)		—			341			—			341			21		362
Investments		104			47			—			151			—		151

Total	$	639		$	855		$	10		$	1,504		$	523	$	2,027

% of Debt and real estate portfolio		42	%		57	%		1	%		100	%		N/A		N/A
Average remaining balance (6)	$	11		$	9		$	5		$	10		$	19	$	11

(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 $400 million of U.S. federal government transactions and $239 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, $11 million of the transactions have been rated investment grade by an independent rating agency. Commercial investment grade receivables include $314 million of internally rated residential solar loans made on a non-recourse basis to special purpose subsidiaries of the SunPower Corporation (“SunPower”), for which we rely on certain limited indemnities, warranties, and other obligations of SunPower or its other subsidiaries.

(3)	Transactions where the projects or the ultimate obligors are commercial entities that have ratings below investment grade (either by an independent rating agency or using our internal credit analysis).

(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 135 transactions each with outstanding balances that are less than $1 million and that in the aggregate total $52 million.

Summary of Anticipated Maturity Dates of Receivables and Investments and Weighted Average Yield

The following table provides a summary of our anticipated maturity dates of our receivables and investments and the weighted average yield for each range of maturities as of December 31, 2017:


	Total			Less than 1 year			1-5 years			5-10 years			More than 10 years
	(dollars in millions)
Receivables
Maturities by period	$	993		$	3		$	22		$	62		$	906
Weighted average yield by period		5.2	%		7.3	%		5.8	%		5.1	%		5.1	%
Investments
Maturities by period	$	151		$	—		$	65		$	14		$	72
Weighted average yield by period		4.0	%		—	%		3.6	%		4.0	%		4.3	%

Components of Real Estate Portfolio

The components of our real estate portfolio as of December 31, 2017 and 2016, were as follows:


	December 31,
	2017			2016
	(in millions)
Real estate
Land	$	247		$	145
Lease intangibles		99			29
Accumulated amortization of lease intangibles		(5	)		(2	)

Real estate	$	341		$	172

Schedule of Future Amortization Expenses Related to Intangible Assets and Future Minimum Rental Payments under Land Lease Agreements

As of December 31, 2017, the future amortization expense of these intangible assets and the future minimum rental payments under our land lease agreements are as follows:


Year Ending December 31,	Future Amortization Expense		Minimum Rental Payments
	(in millions)
2018	$	3	$	20
2019		3		20
2020		3		20
2021		3		20
2022		3		20
Thereafter		79		741

Total	$	94	$	841

Summary of Outstanding Deferred Funding Obligations to be Paid

The outstanding deferred funding obligations to be paid are as follows:


Year Ending December 31,	Future Payments
	(in millions)
2018	$	97
2019		35
2020		16
2021		5

Total	$	153