Our Portfolio (Tables)
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9 Months Ended |
Sep. 30, 2018 |
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| Investment Portfolios [Abstract] |
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| Analysis of Portfolio by Type of Obligor and Credit Quality |
The following is an analysis of our Portfolio as of September 30, 2018:
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Investment Grade |
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Government (1)
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Commercial Investment Grade (2)
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Commercial Non-Investment Grade (3)
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Subtotal,
Debt and
Real Estate |
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Equity
Method
Investments |
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Total |
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(dollars in millions) |
Equity investments in renewable energy projects |
$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
412 |
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$ |
412 |
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Receivables (4)
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504 |
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457 |
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120 |
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1,081 |
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— |
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1,081 |
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Receivables held-for-sale |
16 |
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— |
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— |
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16 |
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— |
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16 |
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Real estate (5)
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— |
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362 |
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— |
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362 |
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22 |
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384 |
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Investments |
101 |
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61 |
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— |
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162 |
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— |
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162 |
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Total |
$ |
621 |
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$ |
880 |
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$ |
120 |
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$ |
1,621 |
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$ |
434 |
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$ |
2,055 |
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% of Debt and real estate portfolio |
38 |
% |
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55 |
% |
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7 |
% |
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100 |
% |
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N/A |
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N/A |
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Average remaining balance (6)
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$ |
11 |
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$ |
9 |
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$ |
40 |
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$ |
10 |
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$ |
16 |
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$ |
11 |
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(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 $389 million of U.S. federal government transactions and $232 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.
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(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, $9 million of the transactions have been rated investment grade by an independent rating agency. Commercial investment grade receivables include $308 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 subsidiaries.
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(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 subordination in the asset causes it to be considered non-investment grade. This includes an approximately $110 million mezzanine loan made in the third quarter of 2018 on a non-recourse basis to special purpose subsidiaries of SunPower secured by residential solar assets and for which we rely on certain limited indemnities, warranties, and other obligations of SunPower or its other subsidiaries. See Receivables and Investments below for further information.
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(4) |
Total reconciles to the total of the government receivables and commercial receivables lines of the consolidated balance sheets. |
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(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. |
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(6) |
Excludes approximately 160 transactions each with outstanding balances that are less than $1 million and that in the aggregate total $60 million.
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| Schedule of Equity Method Investments |
As of September 30, 2018, we held the following equity method investments:
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Investment Date |
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Investee |
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Carrying Value |
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(in millions) |
Various |
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Vento I, LLC |
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$ |
90 |
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Various |
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Northern Frontier, LLC |
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86 |
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December 2015 |
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Buckeye Wind Energy Class B Holdings, LLC |
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72 |
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October 2016 |
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Invenergy Gunsight Mountain Holdings, LLC |
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37 |
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June 2016 |
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MM Solar Holdings, LLC |
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30 |
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Various |
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Helix Fund I, LLC |
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23 |
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Various |
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Other transactions |
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96 |
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Total equity method investments |
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$ |
434 |
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The following is a summary of the consolidated financial position and results of operations of the significant entities accounted for using the equity method.
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Buckeye Wind Energy Class B Holdings, LLC |
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MM Solar Parent, LLC |
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Helix Fund I, LLC |
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Other Investments (1)
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Total |
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(in millions) |
Balance Sheet |
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As of June 30, 2018 |
Current assets |
$ |
3 |
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$ |
3 |
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$ |
1 |
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$ |
31 |
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$ |
38 |
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Total assets |
281 |
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85 |
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28 |
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879 |
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1,273 |
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Current liabilities |
1 |
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5 |
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— |
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18 |
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24 |
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Total liabilities |
11 |
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34 |
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— |
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32 |
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77 |
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Members' equity |
270 |
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51 |
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28 |
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847 |
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1,196 |
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As of December 31, 2017 |
Current assets |
3 |
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3 |
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1 |
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29 |
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36 |
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Total assets |
286 |
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85 |
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28 |
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917 |
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1,316 |
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Current liabilities |
1 |
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5 |
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— |
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25 |
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31 |
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Total liabilities |
11 |
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37 |
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— |
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55 |
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103 |
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Members' equity |
275 |
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48 |
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28 |
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862 |
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1,213 |
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Income Statement |
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For the six months ended June 30, 2018 |
Revenue |
7 |
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6 |
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1 |
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31 |
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45 |
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Income from continuing operations |
(2 |
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3 |
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— |
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18 |
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19 |
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Net income |
(2 |
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3 |
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— |
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18 |
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19 |
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For the six months ended June 30, 2017 |
Revenue |
6 |
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6 |
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1 |
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44 |
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57 |
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Income from continuing operations |
(4 |
) |
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3 |
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— |
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8 |
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7 |
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Net income |
(4 |
) |
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3 |
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— |
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8 |
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7 |
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(1) Represents aggregated financial statement information for investments not separately presented.
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| Summary of Anticipated Maturity Dates of Financing 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 September 30, 2018:
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Total |
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Less than 1
year |
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1-5 years |
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5-10 years |
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More than 10
years |
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(dollars in millions) |
Receivables (1)
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Maturities by period |
$ |
1,081 |
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$ |
1 |
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$ |
18 |
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$ |
64 |
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$ |
998 |
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Weighted average yield by period |
5.8 |
% |
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2.4 |
% |
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5.8 |
% |
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4.6 |
% |
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5.9 |
% |
Investments |
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Maturities by period |
$ |
162 |
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$ |
— |
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$ |
64 |
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$ |
13 |
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$ |
85 |
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Weighted average yield by period |
4.2 |
% |
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— |
% |
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3.6 |
% |
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4.1 |
% |
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4.6 |
% |
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(1) |
Excludes receivables held-for-sale of $16 million.
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| Components of Real Estate Portfolio |
The components of our real estate portfolio as of September 30, 2018 and December 31, 2017, were as follows:
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September 30, 2018 |
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December 31, 2017 |
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(in millions) |
Real estate |
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Land |
$ |
266 |
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$ |
247 |
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Lease intangibles |
103 |
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99 |
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Accumulated amortization of lease intangibles |
(7 |
) |
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(5 |
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Real estate |
$ |
362 |
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$ |
341 |
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| Schedule of Future Amortization Expenses Related to Intangible Assets and Future Minimum Rental Income Payments under Land Lease Agreements |
As of September 30, 2018, the future amortization expense of the intangible assets and the future minimum rental income payments under our land lease agreements are as follows:
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Future Amortization Expense |
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Minimum Rental Income Payments |
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(in millions) |
From October 1, 2018 to December 31, 2018 |
$ |
1 |
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$ |
5 |
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2019 |
3 |
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21 |
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2020 |
3 |
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21 |
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2021 |
3 |
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22 |
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2022 |
3 |
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22 |
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2023 |
3 |
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23 |
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Thereafter |
80 |
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778 |
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Total |
$ |
96 |
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$ |
892 |
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| Summary of Outstanding Deferred Funding Obligations to be Paid |
The outstanding deferred funding obligations to be paid are as follows:
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Deferred Funding Obligations |
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(in millions) |
From October 1, 2018 to December 31, 2018 |
$ |
27 |
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2019 |
35 |
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2020 |
16 |
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2021 |
5 |
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Total |
$ |
83 |
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