Quarterly report pursuant to Section 13 or 15(d)

Our Portfolio (Tables)

v3.23.3
Our Portfolio (Tables)
 9 Months Ended
Sep. 30, 2023
Investments [Abstract]  
Schedule of Analysis of Portfolio Performance Ratings
The following is an analysis of the Performance Ratings of our Portfolio as of September 30, 2023, which is assessed quarterly:
Portfolio Performance
1 (1)
2 (2)
3 (3)
Total
Government Commercial Commercial Commercial
Receivable vintage (4)
(dollars in millions)
2023 $ —  $ 612  $ —  $ —  $ 612 
2022 —  942  —  —  942 
2021 —  293  —  —  293 
2020 —  166  —  —  166 
2019 —  392  —  —  392 
2018 —  275  —  —  275 
Prior to 2018 93  77  —  —  170 
Total receivables 93  2,757  —  —  2,850 
Less: Allowance for loss on receivables
 —  (51) —  —  (51)
Net receivables (5)
93  2,706  —  —  2,799 
Receivables held-for-sale 3  14  —  —  17 
Investments 2  7  —  —  9 
Real estate —  111  —  —  111 
Equity method investments (6)
—  2,521  43  —  2,564 
Total
 $ 98  $ 5,359  $ 43  $ —  $ 5,500 
Percent of Portfolio 2  % 97  % 1  % —  % 100  %

(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. Loans in this category are placed on non-accrual status. Previously included in this category was $11 million of loans we had made in a new market venture where the performance was not meeting expectations. We collected this loan in full in the second quarter of 2023 and accordingly released the related allowance of $5 million.
(4)Receivable vintage refers to the period in which in which the relevant loan agreement is signed, and a given vintage may contain loan advances made in subsequent periods to the loan agreement.
(5)Total reconciles to the total of the government receivables and commercial receivables lines of the consolidated balance sheets.
(6)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.
Schedule of Carrying Value, Expected Loan Funding Commitments, and Allowance by Type of Receivable
Below is a summary of the carrying value, loan funding commitments, and allowance by type of receivable or “Portfolio Segment”, as defined by Topic 326, as of September 30, 2023 and December 31, 2022:
September 30, 2023 December 31, 2022
Gross Carrying Value Loan Funding Commitments Allowance Gross Carrying Value Loan Funding Commitments Allowance
(in millions)
Commercial (1)
2,757  464  51  1,928  256  41 
Government (2)
$ 93  $ —  $ —  $ 103  $ —  $ — 
Total $ 2,850  $ 464  $ 51  $ 2,031  $ 256  $ 41 
(1)As of September 30, 2023, this category of assets includes $1.4 billion of mezzanine loans made on a non-recourse basis to special purpose subsidiaries of residential solar companies which hold residential solar assets where we rely on certain limited indemnities, warranties, and other obligations of the residential solar companies or their other subsidiaries.
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. For those assets, 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 $51 million allowance on these $2.8 billion in assets as a result of lower probability assumptions utilized in our allowance methodology.
(2)As of September 30, 2023, our government receivables include $10 million of U.S. federal government transactions and $83 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 September 30, 2023 Three months ended September 30, 2022
Government Commercial Government Commercial
(in millions)
Beginning balance $ —  $ 44  $ —  $ 37 
Provision for loss on receivables —  7  —  (3)
Ending balance $ —  $ 51  $ —  $ 34 
Nine months ended September 30, 2023 Nine months ended September 30, 2022
Government Commercial Government Commercial
(in millions)
Beginning balance $ —  $ 41  $ —  $ 36 
Provision for loss on receivables —  10  —  6 
Write-off of allowance —  —  —  (8)
Ending balance $ —  $ 51  $ —  $ 34 
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 September 30, 2023:
Total Less than 1
year		 1-5 years 5-10 years More than 10
years
  (dollars in millions)
Maturities by period (excluding allowance) $ 2,850  $ 6  $ 324  $ 1,309  $ 1,211 
Weighted average yield by period 8.4  % 9.4  % 9.0  % 8.5  % 8.0  %
Schedule of Components of Real Estate Portfolio The components of our real estate portfolio as of September 30, 2023 and December 31, 2022, were as follows: 
September 30, 2023 December 31, 2022
  (in millions)
Real estate
Land $ 97  $ 269 
Lease intangibles 22  104 
Accumulated amortization of lease intangibles (8) (20)
Real estate $ 111  $ 353 
Schedule of Future Amortization Expenses Related to Intangible Assets and Future Minimum Rental Payments under Land Lease Agreements
As of September 30, 2023, 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 October 1, 2023 to December 31, 2023 $ —  $ 6 
2024 1  24 
2025 1  24 
2026 1  24 
2027 1  25 
2028 1  25 
Thereafter 9  673 
Total $ 14  $ 801 
Schedule of Equity Method Investments
As of September 30, 2023, we held the following equity method investments:
Investment Date Investee Carrying Value
    (in millions)
Various Jupiter Equity Holdings LLC $ 535 
Various
Lighthouse Partnerships (1)
682 
Various Other investees 1,347 
Total equity method investments $ 2,564 
(1)     Represents the total of five equity investments in a portfolio of renewable assets.
The following is a summary of the consolidated balance sheets and income statements of the entities in which we have a significant equity method investment. These amounts are presented on the underlying investees’ accounting basis. In certain instances, adjustment to these equity values may be necessary in order to reflect our basis in these investments. As described in Note 2, any difference between the amount of our investment and the amount of our share of underlying equity is generally amortized over the life of the assets and liabilities to which the differences relate. Certain of our equity method investments have the unrealized mark-to-market losses on energy hedges at the project level that do not qualify for hedge accounting. These unrealized mark-to-market losses, which resulted from rising energy prices, are recorded in the revenue line of the projects’ statements of operations. As these swaps are settled, the projects will sell power at the higher market price, offsetting the loss recognized on the energy hedges.
Jupiter Equity Holdings LLC
Other Investments (1)
Total
(in millions)
Balance Sheet
As of June 30, 2023
Current assets $ 61  $ 760  $ 821 
Total assets 3,020  12,802  15,822 
Current liabilities 130  818  948 
Total liabilities 685  6,841  7,526 
Members' equity 2,335  5,961  8,296 
As of December 31, 2022
Current assets 106  586  692 
Total assets 3,114  11,588  14,702 
Current liabilities 139  684  823 
Total liabilities 751  6,085  6,836 
Members' equity 2,363  5,503  7,866 
Income Statement
For the six months ended June 30, 2023
Revenue 59  412  471 
Income (loss) from continuing operations (27) (64) (91)
Net income (loss) (27) (64) (91)
For the six months ended June 30, 2022
Revenue (135) 239  104 
Income (loss) from continuing operations (231) (110) (341)
Net income (loss) (231) (110) (341)
(1)     Represents aggregated financial statement information for investments not separately presented.
Schedule of Related Party Transactions
The following table provides additional detail on these related party transactions:
Three Months Ended September 30, 2023 Three Months Ended September 30, 2022 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022
(in millions)
Interest income from related party loans $ 18  $ 14  $ 49  $ 45 
Investments made in related party loans 95  63  187  113 
Principal collected from related party loans 12  7  27  76 
Interest collected from related party loans 15  14  45  49