Annual report pursuant to Section 13 and 15(d)

Our Portfolio (Tables)

v3.10.0.1
Our Portfolio (Tables)
12 Months Ended
Dec. 31, 2018
Investment Portfolios [Abstract]  
Analysis of Portfolio by Type of Obligor and Credit Quality
The following is an analysis of our Portfolio as of December 31, 2018:
 
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
$

 
$

 
$

 
$

 
$
449

 
$
449

Receivables (4)
498

 
148

 
299

 
945

 

 
945

Real estate (5)

 
365

 

 
365

 
22

 
387

Investments
102

 
68

 

 
170

 

 
170

Total
$
600

 
$
581

 
$
299

 
$
1,480

 
$
471

 
$
1,951

% of Debt and real estate portfolio
41
%
 
39
%
 
20
%
 
100
%
 
N/A

 
N/A

Average remaining balance (6)
$
12

 
$
6

 
$
14

 
$
9

 
$
16

 
$
10


(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 $384 million of U.S. federal government transactions and $216 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, $9 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 $273 million of mezzanine loans made in 2018 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. This amount also includes $18 million of transactions made in 2018 where the projects or the ultimate obligors are commercial entities that have ratings below investment grade using our internal credit analysis, and $8 million of loans on non-accrual status. 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 170 transactions each with outstanding balances that are less than $1 million and that in the aggregate total $64 million.
Schedule of Equity Method Investments
As of December 31, 2018, we held the following equity method investments:
Investment Date
 
Investee
 
Carrying Value
 
 
 
 
(in millions)
Various
 
2007 Vento I, LLC
 
$
92

Various
 
Northern Frontier Wind, LLC
 
75

December 2015
 
Buckeye Wind Energy Class B Holdings, LLC
 
72

December 2018
 
3D Engie, LLC
 
49

October 2016
 
Invenergy Gunsight Mountain Holdings, LLC
 
37

Various
 
Helix Fund I, LLC
 
26

Various
 
Other transactions
 
120

 
 
Total equity method investments
 
$
471

The following is a summary of the consolidated financial position and results of operations of the significant entities accounted for using the equity method.


 
Buckeye Wind
Energy Class
B Holdings,
LLC
 
MM Solar Parent LLC
 
Helix Fund I, LLC
 
Other
investments (1)
 
Total
 
 
Balance Sheet
 
 
 
 
 
 
 
 
 
As of September 30, 2018
 
 
 
 
 
 
 
 
 
Current assets
$
4

 
$
4

 
$
1

 
$
248

 
$
257

Total assets
280

 
84

 
27

 
3,713

 
4,104

Current liabilities
3

 
5

 

 
108

 
116

Total liabilities
13

 
33

 

 
955

 
1,001

Members’ equity
267

 
51

 
27

 
2,758

 
3,103

As of December 31, 2017
 
 
 
 
 
 
 
 
 
Current assets
3

 
3

 
1

 
130

 
137

Total assets
286

 
85

 
28

 
2,866

 
3,265

Current liabilities
1

 
5

 

 
70

 
76

Total liabilities
11

 
36

 

 
319

 
366

Members’ equity
275

 
49

 
28

 
2,547

 
2,899

Income Statement
 
 
 
 
 
 
 
 
 
For the nine months ended September 30, 2018
 
 
 
 
 
 
 
 
 
Revenue
10

 
8

 
2

 
197

 
217

Income from continuing operations
(5
)
 
4

 
1

 
19

 
19

Net income
(5
)
 
4

 
1

 
19

 
19

For the year ended December 31, 2017
 
 
 
 
 
 
 
 
 
Revenue
12

 
11

 
2

 
248

 
273

Income from continuing operations
(8
)
 
4

 
1

 
(49
)
 
(52
)
Net income
(8
)
 
4

 
1

 
(49
)
 
(52
)
For the year ended December 31, 2016
 
 
 
 
 
 
 
 
 
Revenue
13

 
12

 

 
283

 
308

Income from continuing operations
(6
)
 
5

 

 
23

 
22

Net income
(6
)
 
5

 

 
23

 
22


(1)
Represents aggregated financial statement information for investments not separately presented.
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, 2018:
 
Total
 
Less than 1 year
 
1-5 years
 
5-10 years
 
More than 10
years
 
(dollars in millions)
Receivables
 
 
 
 
 
 
 
 
 
Maturities by period
$
945

 
$
1

 
$
17

 
$
57

 
$
870

Weighted average yield by period
6.6
%
 
3.4
%
 
6.0
%
 
4.8
%
 
6.7
%
Investments
 
 
 
 
 
 
 
 
 
Maturities by period
$
170

 
$
64

 
$

 
$
13

 
$
93

Weighted average yield by period
4.2
%
 
3.6
%
 
%
 
4.1
%
 
4.7
%
Components of Real Estate Portfolio
The components of our real estate portfolio as of December 31, 2018 and 2017, were as follows:
 
December 31,
 
2018
 
2017
 
(in millions)
Real estate
 
 
 
Land
$
269

 
$
247

Lease intangibles
104

 
99

Accumulated amortization of lease intangibles
(8
)
 
(5
)
Real estate
$
365

 
$
341

Schedule of Future Amortization Expenses Related to Intangible Assets and Future Minimum Rental Payments under Land Lease Agreements
As of December 31, 2018, the future amortization expense of the intangible assets and the future minimum rental income payments under our land lease agreements are as follows:
Year Ending December 31,
 
Future
Amortization
Expense
 
Minimum
Rental
Payments
 
 
(in millions)
2019
 
$
3

 
$
22

2020
 
3

 
22

2021
 
3

 
22

2022
 
3

 
22

2023
 
3

 
23

Thereafter
 
81

 
788

Total
 
$
96

 
$
899

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)
2019
 
$
51

2020
 
16

2021
 
5

Total
 
$
72