Quarterly report pursuant to Section 13 or 15(d)

Our Portfolio (Tables)

v3.5.0.2
Our Portfolio (Tables)
6 Months Ended
Jun. 30, 2016
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, 2016:

 

    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

  $ 372      $ 415      $ 17      $ 804      $ —        $ 804   

Financing receivables held-for-sale

    42        —          —          42        —          42   

Investments

    33        15        —          48        —          48   

Real estate(5)

    —          162        —          162        —          162   

Equity method investments

    —          —          —          —          335        335   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 447      $ 592      $ 17      $ 1,056      $ 335      $ 1,391   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

% of Debt and Real Estate Portfolio

    42     56     2     100     N/A        N/A   

Average Remaining Balance(6)

  $ 12      $ 9      $ 17      $ 10      $ 21      $ 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 $268 million of U.S. federal government transactions and $179 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, $10 million of the transactions have been rated investment grade by an independent rating agency. Commercial investment grade financing receivables include $177 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 renewable energy projects.
(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 84 transactions each with outstanding balances that are less than $1 million and that in the aggregate total $30 million.
Components of Financing Receivables

The components of financing receivables as of June 30, 2016 and December 31, 2015, were as follows:

 

     June 30, 2016      December 31,
2015
 
     (dollars in millions)  

Financing receivables

     

Financing or minimum lease payments(1)

   $ 1,061       $ 1,025   

Unearned interest income

     (254      (238

Allowance for credit losses

     —           —     

Unearned fee income, net of initial direct costs

     (3      (3
  

 

 

    

 

 

 

Financing receivables(1)

   $ 804       $ 784   
  

 

 

    

 

 

 

 

(1) Excludes $42 million and $60 million in financing receivables held-for-sale as of June 30, 2016 and December 31, 2015, 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, 2016:

 

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

Financing Receivables (1)

          

Maturities by period

   $ 804      $ 1      $ 83      $ 39      $ 681   

Weighted average yield by period

     5.5     4.0     7.0     4.1     5.4

Investments

          

Maturities by period

   $ 48      $ —        $ —        $ 1      $ 47   

Weighted average yield by period

     3.8     —       —       4.7     3.9

 

(1) Excludes financing receivables held-for-sale of $42 million.
Components of Real Estate Portfolio

The components of our real estate portfolio as of June 30, 2016 and December 31, 2015, were as follows:

 


     June 30, 2016      December 31,
2015
 
     (dollars in millions)  

Real Estate

     

Land

   $ 132       $ 129   

Real estate related intangibles

     33         28   

Accumulated amortization of real estate intangibles

     (3      (1
  

 

 

    

 

 

 

Real Estate

   $ 162       $ 156
Schedule of Future Amortization Expenses Related to Intangible Assets and Future Minimum Rental Income Payments under Land Lease Agreements

As of June 30, 2016, the future amortization expense of these intangible assets and the future minimum rental income payments under our land lease agreements are as follows:

 

Year Ending December 31,

   Future
Amortization
Expense
     Minimum
Rental Income
Payments
 
     (dollars in millions)  

From July 1, 2016 to December 31, 2016

   $ 1       $ 4   

2017

     1         10   

2018

     1         11   

2019

     1         11   

2020

     1         10   

2021

     1         11   

Thereafter

     24         292   
  

 

 

    

 

 

 

Total

   $ 30       $ 349