Quarterly report pursuant to Section 13 or 15(d)

Our Portfolio - Financing Receivables, Investments and Real Estate (Tables)

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Our Portfolio - Financing Receivables, Investments and Real Estate (Tables)
6 Months Ended
Jun. 30, 2015
Receivables [Abstract]  
Analysis of Portfolio by Type of Obligor and Credit Quality

The following is an analysis of our Portfolio by type of obligor and credit quality as of June 30, 2015, with 99% of the debt and real estate portion of our Portfolio rated investment grade as shown below:

 

     Investment Grade                     
     Government (1)     Commercial
Investment
Grade(2)
    Commercial
Non-Investment
Grade (3)
    Subtotal,
Debt and
Real Estate
    Equity Method
Investments(4)
     Total  
     ($ in millions)  

Financing receivables

   $ 297      $ 392      $ —        $ 689      $ —         $ 689   

Financing receivables held-for-sale

     85        —          —          85        —           85   

Investments

     —          15        13        28        —           28   

Real estate(5)

     —          152        —          152        —           152   

Equity method investments

     —          —          —          —          162         162   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total

   $ 382      $ 559      $ 13      $ 954      $ 162       $ 1,116   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

% of Debt and Real Estate Portfolio

     40     59     1     100     N/A         N/A   

Average Remaining Balance(6)

   $ 13      $ 10      $ 13      $ 11      $ 16       $ 11   

 

(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 $280 million of U.S. federal government transactions and $102 million of transactions where the ultimate obligors are state or local governments. Transactions may have guaranties of energy savings from third party service providers, the majority of which are entities rated investment grade by an independent rating agency.
(2) Transactions where the projects or the ultimate obligors are commercial entities, including institutions such as hospitals or universities, that have been rated investment grade (either by an independent rating agency or based on our internal credit analysis). Of this total, $62 million of the transactions have been rated investment grade by an independent rating agency. Commercial investment grade financing receivables includes $137 million of internally rated residential solar loans where the cash flows which support our financing receivables are subordinated to the tax equity investors (whose return is largely derived from the renewable energy tax incentives) and for which we rely on certain tax related indemnities of the publicly traded residential solar provider.
(3) Transactions where the projects or the ultimate obligors are commercial entities, including institutions such as hospitals or universities, that have ratings below investment grade (either by an independent rating agency or using our internal credit analysis).
(4) Consists of minority ownership interest in operating wind projects in which we earn a preferred return.
(5) Includes the real estate and the lease intangible assets through which we receive scheduled lease payments, typically under long-term triple net lease agreements.
(6) Excludes 77 transactions each with outstanding balances that are less than $1 million and that in the aggregate total $25 million.
Components of Financing Receivables

The components of financing receivables as of June 30, 2015 and December 31, 2014, were as follows:

 

     June 30,
2015
     December 31,
2014
 
     (amounts in millions)  

Financing receivables

     

Financing or minimum lease payments(1)

   $ 863       $ 723   

Unearned interest income

     (171      (166

Allowance for credit losses

     —           (1

Unearned fee income, net of initial direct costs

     (3      (3
  

 

 

    

 

 

 

Financing receivables(1)

   $ 689       $ 553   
  

 

 

    

 

 

 

 

(1) Excludes $85 million and $62 million in financing receivables held-for-sale as of June 30, 2015 and December 31, 2014, respectively.
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 financing receivables and investments and the weighted average yield for each range of maturities as of June 30, 2015:

 

     Total     Less than
1 year
    1-5 years     5-10 years     More than
10 years
 
     (amounts in millions)  

Financing Receivables (1)

    

Payment due by period

   $ 689      $ 1      $ 140      $ 46      $ 502   

Weighted average yield by period

     5.5     7.2     6.2     5.8     5.3

Investments

      

Payment due by period

   $ 28      $ —        $ 13      $ —        $ 15   

Weighted average yield by period

     5.1     —       5.7     —       4.4

 

(1) Excludes financing receivables held-for-sale of $85 million.
Components of Real Estate Portfolio

The components of our real estate portfolio as of June 30, 2015 and December 31, 2014, were as follows:

 

     June 30,
2015
     December 31,
2014
 
     (amounts in millions)  

Real Estate

     

Land

   $ 127       $ 91   

Real estate related intangibles

     26         23   

Accumulated amortization of real estate intangibles

     (1      (0
  

 

 

    

 

 

 

Real Estate

   $ 152       $ 114   
  

 

 

    

 

 

 
Future Amortization Expenses Related to Intangible Assets

As of June 30, 2015, the future amortization expense of these intangible assets was as follows:

 

Year Ending December 31,    (amounts in
millions)
 

From July 1, 2015 to December 31, 2015

   $ 0.3   

2016

     0.7   

2017

     0.7   

2018

     0.7   

2019

     0.7   

2020

     0.7   

Thereafter

     21.7   
  

 

 

 

Total

   $ 25.5   
  

 

 

 
Future Minimum Rental Income under Land Lease Agreements

As of June 30, 2015, the future minimum rental income under our land lease agreements is as follows:

 

Year Ending December 31,    (amounts in
millions)
 

From July 1, 2015 to December 31, 2015

   $ 6   

2016

     12   

2017

     12   

2018

     12   

2019

     12   

2020

     12   

Thereafter

     396   
  

 

 

 

Total

   $ 462