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

Annual report pursuant to Section 13 and 15(d)

Our Portfolio (Tables)

Our Portfolio (Tables)

12 Months Ended

Dec. 31, 2015

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 December 31, 2015:


	Investment Grade
	Government (1)			Commercial Investment Grade (2)			Commercial Non-Investment Grade (3)			Subtotal, Debt and Real Estate			Equity Method Investments (4)		Total
	(dollars in millions)
Financing receivables	$	401		$	383		$	—		$	784		$	—	$	784
Financing receivables held-for-sale		60			—			—			60			—		60
Investments		—			16			13			29			—		29
Real estate (5)		—			156			—			156			—		156
Equity method investments		—			—			—			—			319		319

Total	$	461		$	555		$	13		$	1,029		$	319	$	1,348

% of Debt and Real Estate Portfolio		45	%		54	%		1	%		100	%		N/A		N/A
Average Remaining Balance (6)	$	12		$	9		$	13		$	10		$	27	$	12

(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 $297 million of U.S. federal government transactions and $164 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, $12 million of the transactions have been rated investment grade by an independent rating agency. Commercial investment grade financing receivables include $175 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 ownership interests 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 $26 million.

Components of Financing Receivables

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


	December 31,
	2015			2014
	(dollars in millions)
Financing receivables
Financing or minimum lease payments (1)	$	1,025		$	723
Unearned interest income		(238	)		(166	)
Allowance for credit losses		—			(1	)
Unearned fee income, net of initial direct costs		(3	)		(3	)

Financing receivables (1)	$	784		$	553

(1)	Excludes $60 million and $62 million in financing receivables held-for-sale at December 31, 2015 and 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 December 31, 2015:


	Total			Less than 1 year			1-5 years			5-10 years			More than 10 years
				(dollars in millions)
Financing Receivables (1)
Payment due by period	$	784		$	—		$	122		$	52		$	610
Weighted average yield by period		5	%		—	%		6	%		5	%		5	%
Investments
Payment due by period	$	29		$	13		$	—		$	1		$	15
Weighted average yield by period		5	%		6	%		—	%		5	%		4	%

(1)	Excludes financing receivables held-for-sale of $60 million.

Components of Real Estate Portfolio

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


	December 31,
	2015			2014
	(dollars in million)
Real Estate
Land	$	129		$	91
Real estate related intangibles		28			23
Accumulated amortization of real estate intangibles		(1	)		(0	)

Real Estate	$	156		$	114

Future Amortization Expenses Related to Intangible Assets

As of December 31, 2015, the future amortization expense of these intangible assets is as follows:


	(dollars in millions)
Year Ending December 31,
2016	$	1
2017		1
2018		1
2019		1
2020		1
Thereafter		22

Total	$	27

Schedule of Future Minimum Rental Income Payments under Land Lease Agreements

As of December 31, 2015, the future minimum rental income payments under our land lease agreements is as follows:


	(dollars in millions)
Year Ending December 31,
2016	$	8
2017		9
2018		10
2019		10
2020		10
Thereafter		250

Total	$	297