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

Quarterly report pursuant to Section 13 or 15(d)

Our Portfolio (Tables)

Our Portfolio (Tables)

6 Months Ended

Jun. 30, 2016

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