Quarterly report pursuant to Section 13 or 15(d)

Our Portfolio (Tables)

v3.22.1
Our Portfolio (Tables)
 3 Months Ended
Mar. 31, 2022
Investments [Abstract]  
Schedule of Analysis of Portfolio Performance Ratings
The following is an analysis of the Performance Ratings of our Portfolio as of March 31, 2022, which is assessed quarterly:
Portfolio Performance
1 (1)
2 (2)
3 (3)
Total
Government Commercial Commercial Commercial
Receivable vintage (dollars in millions)
2022 $ —  $ 2  $ —  $ —  $ 2 
2021 —  305  —  —  305 
2020 —  195  —  —  195 
2019 —  468  2  —  470 
2018 —  265  —  —  265 
2017 26  1  9  —  36 
Prior to 2017 90  103  —  8  201 
Total receivables 116  1,339  11  8  1,474 
Less: Allowance for loss on receivables
 —  (26) (3) (8) (37)
Net receivables (4)
116  1,313  8  —  1,437 
Receivables held-for-sale —  66  —  —  66 
Investments 9  7  —  —  16 
Real estate —  360  —  —  360 
Equity method investments (5)
—  1,842  29  —  1,871 
Total
 $ 125  $ 3,588  $ 37  $ —  $ 3,750 
Percent of Portfolio 3  % 96  % 1  % —  % 100  %
Average remaining balance (6)
$ 6  $ 12  $ 10  $ 4  $ 12 
(1)This category includes our assets where based on our credit criteria and performance to date we believe that our risk of not receiving our invested capital remains low.
(2)This category includes our assets where based on our credit criteria and performance to date we believe there is a moderate level of risk to not receiving some or all of our invested capital.
(3)This category includes our assets where based on our credit criteria and performance to date, we believe there is substantial doubt regarding our ability to recover some or all of our invested capital. Included in this category are two commercial receivables with a combined total carrying value of approximately $8 million as of March 31, 2022, which we have held on non-accrual status since 2017. We expect to continue to pursue our legal claims with regards to these assets.
(4)Total reconciles to the total of the government receivables and commercial receivables lines of the consolidated balance sheets.
(5)Some of the individual projects included in portfolios that make up our equity method investments have government off-takers. As they are part of large portfolios, they are not classified separately. 
(6)Average remaining balance is calculated gross of allowance for loss on receivables and excludes approximately 259 transactions each with outstanding balances that are less than $1 million and that in the aggregate total $93 million.
Schedule of Carrying Value, Expected Loan Funding Commitments, and Allowance by Type of Receivable
Below is a summary of the carrying value, expected loan funding commitments, and allowance by type of receivable or “Portfolio Segment”, as defined by Topic 326, as of March 31, 2022 and December 31, 2021:
March 31, 2022 December 31, 2021
Gross Carrying Value Loan Funding Commitments Allowance Gross Carrying Value Loan Funding Commitments Allowance
(in millions)
Commercial (1)
1,358  196  37  1,335  184  36 
Government (2)
$ 116  $ —  $ —  $ 125  $ —  $ — 
Total $ 1,474  $ 196  $ 37  $ 1,460  $ 184  $ 36 
(1)As of March 31, 2022, this category of assets includes $781 million of mezzanine loans made on a non-recourse basis to special purpose subsidiaries of residential solar companies which are secured by residential solar assets where we rely on certain limited indemnities, warranties, and other obligations of the residential solar companies or their other subsidiaries. Approximately $702 million of our commercial receivables are loans made to entities in which we also have non-controlling equity investments of approximately $119 million. This total also includes $48 million of lease agreements where we hold legal title to the underlying real estate which are treated under GAAP as receivables since they were deemed to be failed sale/leaseback transactions as described in Note 2 to our financial statements in this Form 10-Q.
Risk characteristics of our commercial receivables include a project’s operating risks, which include the impact of the overall economic environment, the climate solutions sector, the effect of local, industry, and broader economic factors, the impact of any variation in weather and trends in interest rates. We use assumptions related to these risks to estimate an allowance using a discounted cash flow analysis or the PD/LGD method as discussed in Note 2 to our financial statements in this Form 10-Q. All of our commercial receivables are included in Performance Rating 1 in the Portfolio Performance table above, except for $11 million of receivables included in Performance Category 2 and the $8 million of receivables we have placed on non-accrual status which are included in Performance Rating 3. For those assets in Performance Rating 1, the credit worthiness of the obligor combined with the various structural protections of our assets cause us to believe we have a low risk we will not receive our invested capital, however we recorded a $26 million allowance on these $1.3 billion in assets as a result of lower probability assumptions utilized in our allowance methodology.
(2)As of March 31, 2022, our government receivables include $20 million of U.S. federal government transactions and $96 million of transactions where the ultimate obligors are state or local governments.
Risk characteristics of our government receivables include the energy savings or the power output of the projects and the ability of the government obligor to generate revenue for debt service, via taxation or other means. Transactions may have guarantees of energy savings or other performance support from third-party service providers, which typically are entities, directly or whose ultimate parent entity is, rated investment grade by an independent rating agency. All of our government receivables are included in Performance Rating 1 in the Portfolio Performance table above. Our allowance for government receivables is primarily calculated by using PD/LGD methods as discussed in Note 2 to our financial statements in this Form 10-Q. Our expectation of credit losses for these receivables is immaterial given the high credit-quality of the obligors.
The following table reconciles our beginning and ending allowance for loss on receivables by Portfolio Segment:
Three months ended March 31, 2022 Three months ended March 31, 2021
Government Commercial Government Commercial
(in millions)
Beginning balance $ —  $ 36  $ —  $ 36 
Provision for loss on receivables —  1  —  — 
Ending balance $ —  $ 37  $ —  $ 36 
Schedule 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 the weighted average yield for each range of maturities as of March 31, 2022:
Total Less than 1
year		 1-5 years 5-10 years More than 10
years
  (dollars in millions)
Maturities by period (excluding allowance) $ 1,474  $ 49  $ 52  $ 533  $ 840 
Weighted average yield by period 8.1  % 7.4  % 5.9  % 8.3  % 8.1  %
Investments
The following table provides a summary of our anticipated maturity dates of our investments and the weighted average yield for each range of maturities as of March 31, 2022:
 
Total Less than 1
year		 1-5 years 5-10 years More than 10
years
  (dollars in millions)
Maturities by period $ 16  $ —  $ —  $ —  $ 16 
Weighted average yield by period 4.1  % —  % —  % —  % 4.1  %
Schedule of Components of Real Estate Portfolio The components of our real estate portfolio as of March 31, 2022 and December 31, 2021, were as follows: 
March 31, 2022 December 31, 2021
  (in millions)
Real estate
Land $ 275  $ 269 
Lease intangibles 103  104 
Accumulated amortization of lease intangibles (18) (17)
Real estate $ 360  $ 356 
Schedule of Future Amortization Expenses Related to Intangible Assets and Future Minimum Rental Payments under Land Lease Agreements
As of March 31, 2022, 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 April 1, 2022 to December 31, 2022 $ 2  $ 17 
2023 3  24 
2024 3  24 
2025 3  24 
2026 3  25 
2027 3  25 
Thereafter 68  713 
Total $ 85  $ 852 
Schedule of Equity Method Investments
As of March 31, 2022, we held the following equity method investments:
Investment Date Investee Carrying Value
    (in millions)
Various Jupiter Equity Holdings LLC $ 563 
Various
Lighthouse Partnerships (1)
428 
Various Phase V Class A LLC 130 
March 2020 University of Iowa Energy Collaborative Holdings LLC 124 
Various Other investees 626 
Total equity method investments $ 1,871 
(1)     Represents the total of three equity investments in a portfolio of renewable assets.
Jupiter Equity Holdings LLC Phase V Class A LLC Vivint Solar Asset 3 Holdco Parent LLC
Other Investments (1)
Total
(in millions)
Balance Sheet
As of December 31, 2021
Current assets $ 323  $ 17  $ 13  $ 489  $ 842 
Total assets 3,434  201  384  8,095  12,114 
Current liabilities 188  40  12  472  712 
Total liabilities 687  46  379  4,104  5,216 
Members' equity 2,747  155  5  3,991  6,898 
As of December 31, 2020
Current assets 338  28  86  352  804 
Total assets 3,509  65  303  6,739  10,616 
Current liabilities 248  21  3  395  667 
Total liabilities 502  22  139  3,460  4,123 
Members' equity 3,007  43  164  3,279  6,493 
Income Statement
For the twelve months ended December 31, 2021
Revenue (253) 4  28  393  172 
Income (loss) from continuing operations (450) —  1  (133) (582)
Net income (loss) (450) —  1  (133) (582)
For the twelve months ended December 31, 2020
Revenue (14) —  1  378  365 
Income (loss) from continuing operations (72) —  (2) (164) (238)
Net income (loss) (72) —  (2) (164) (238)
(1)     Represents aggregated financial statement information for investments not separately presented.