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)

9 Months Ended

Sep. 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 September 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	$	380		$	464		$	21		$	865		$	—	$	865
Financing receivables held-for-sale		7			—			—			7			—		7
Investments		33			17			—			50			—		50
Real estate⁽⁵⁾					166			—			166			—		166
Equity method investments		—			—			—			—			324		324

Total	$	420		$	647		$	21		$	1,088		$	324	$	1,412

% of Debt and Real Estate Portfolio		39	%		59	%		2	%		100	%		N/A		N/A
Average Remaining Balance⁽⁶⁾	$	10		$	10		$	11		$	10		$	19	$	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 $230 million of U.S. federal government transactions and $190 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, $11 million of the transactions have been rated investment grade by an independent rating agency. Commercial investment grade financing receivables include $260 million of internally rated residential solar loans made on a nonrecourse basis to special purpose subsidiaries of SunPower Corporation, for which we rely on certain limited indemnities, warranties and other obligations of SunPower Corporation or its other subsidiaries.

(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 88 transactions each with outstanding balances that are less than $1 million and that in the aggregate total $31 million.

Components of Financing Receivables

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


	September 30, 2016			December 31, 2015
	(dollars in millions)
Financing receivables
Financing or minimum lease payments⁽¹⁾	$	1,122		$	1,025
Unearned interest income		(255	)		(238	)
Allowance for credit losses		—			—
Unearned fee income, net of initial direct costs		(2	)		(3	)

Financing receivables⁽¹⁾	$	865		$	784

(1)	Excludes $7 million and $60 million in financing receivables held-for-sale as of September 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 September 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	$	865		$	1		$	48		$	80		$	736
Weighted average yield by period		5.4	%		4.0	%		6.4	%		5.0	%		5.3	%
Investments
Maturities by period	$	50		$	—		$	—		$	1		$	49
Weighted average yield by period		3.9	%		—	%		—	%		4.7	%		4.0	%

(1)	Excludes financing receivables held-for-sale of $7 million.

Components of Real Estate Portfolio

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


	September 30, 2016			December 31, 2015
	(dollars in millions)
Real Estate
Land	$	135		$	129
Real estate related intangibles		33			28
Accumulated amortization of real estate intangibles		(2	)		(1	)

Real Estate	$	166		$	156

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

As of September 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 October 1, 2016 to December 31, 2016	$	—	$	2
2017		1		10
2018		1		11
2019		1		11
2020		1		10
2021		1		11
Thereafter		26		292

Total	$	31	$	347