HA Sustainable Infrastructure Capital, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Our Portfolio (Tables)

Our Portfolio (Tables)

6 Months Ended

Jun. 30, 2019

Analysis of Portfolio by Type of Obligor and Credit Quality

The following is an analysis of our Portfolio as of June 30, 2019:



	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	$	—		$	—		$	—		$	—		$	436	$	436
Receivables ⁽⁴⁾	343			156			352			851			—		851
Real estate ⁽⁵⁾	—			364			—			364			22		386
Investments	40			84			—			124			—		124
Total	$	383		$	604		$	352		$	1,339		$	458	$	1,797
% of Debt and real estate portfolio	29		%	45		%	26		%	100		%	N/A		N/A
Average remaining balance ⁽⁶⁾	$	8		$	6		$	15		$	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 $228 million of U.S. federal government transactions and $155 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 $328 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 $206 million of these mezzanine loans were made to entities in which we also have non-controlling equity investments of approximately $24 million. Commercial Non-Investment Grade receivables also includes $16 million of transactions 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 175 transactions each with outstanding balances that are less than $1 million and that in the aggregate total $63 million.

Schedule of Equity Method Investments

As of June 30, 2019, we held the following equity method investments:



Investment Date	Investee	Carrying Value
		(in millions)
Various	2007 Vento I, LLC	$	88
December 2015	Buckeye Wind Energy Class B Holdings, LLC	72
Various	Northern Frontier Wind, LLC	54
Various	Vivint Solar Asset 1 Class B, LLC	46
December 2018	3D Engie, LLC	43
October 2016	Invenergy Gunsight Mountain Holdings, LLC	35
Various	Helix Fund I, LLC	26
Various	Other transactions	94
	Total equity method investments	$	458

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			Other Investments ⁽¹⁾		Total
	(in millions)
Balance Sheet
As of March 31, 2019
Current assets	$	3		$	188	$	191
Total assets	274			3,901		4,175
Current liabilities	1			118		119
Total liabilities	12			1,204		1,216
Members' equity	262			2,697		2,959
As of December 31, 2018
Current assets	4			229		233
Total assets	276			3,916		4,192
Current liabilities	1			163		164
Total liabilities	12			1,204		1,216
Members' equity	264			2,712		2,976
Income Statement
For the three months ended March 31, 2019
Revenue	3			87		90
Income from continuing operations	(1		)	—		(1		)
Net income	(1		)	—		(1		)
For the three months ended March 31, 2018
Revenue	4			62		66
Income from continuing operations	(1		)	5		4
Net income	(1		)	5		4

(1) Represents aggregated financial statement information for investments not separately presented.

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 June 30, 2019:



	Total			Less than 1 year			1-5 years			5-10 years			More than 10 years
	(dollars in millions)
Receivables
Maturities by period	$	851		$	2		$	36		$	58		$	755
Weighted average yield by period	7.3		%	4.3		%	7.0		%	4.6		%	7.5		%
Investments
Maturities by period	$	124		$	—		$	—		$	14		$	110
Weighted average yield by period	4.7		%	—		%	—		%	4.1		%	4.8		%

Components of Real Estate Portfolio

The components of our real estate portfolio as of June 30, 2019 and December 31, 2018, were as follows:



	June 30, 2019			December 31, 2018
	(in millions)
Real estate
Land	$	269		$	269
Lease intangibles	104			104
Accumulated amortization of lease intangibles	(9		)	(8		)
Real estate	$	364		$	365

Schedule of Minimum Rental Income Payments

As of June 30, 2019, the future amortization expense of the intangible assets and the future minimum rental income payments under our land lease agreements are as follows:



	Future Amortization Expense		Minimum Rental Income Payments
	(in millions)
From July 1, 2019 to December 31, 2019	$	1	$	11
2020	3		22
2021	3		22
2022	3		22
2023	3		23
2024	3		24
Thereafter	79		764
Total	$	95	$	888

Schedule of Future Amortization Expense of Intangible Assets

As of June 30, 2019, the future amortization expense of the intangible assets and the future minimum rental income payments under our land lease agreements are as follows:



	Future Amortization Expense		Minimum Rental Income Payments
	(in millions)
From July 1, 2019 to December 31, 2019	$	1	$	11
2020	3		22
2021	3		22
2022	3		22
2023	3		23
2024	3		24
Thereafter	79		764
Total	$	95	$	888