Annual report pursuant to Section 13 and 15(d)

Our Portfolio (Tables)

v3.25.0.1
Our Portfolio (Tables)
 12 Months Ended
Dec. 31, 2024
Investments [Abstract]  
Schedule of Analysis of Portfolio Performance Ratings
The following is an analysis of the Performance Ratings of our Portfolio as of December 31, 2024, which is assessed quarterly:

Portfolio Performance
Commercial Government
1 (1)
2 (2)
3 (3)
1 (1)
Total
Receivable vintage (4)
(dollars in millions)
2024 $ 65  $ —  $ —  $ —  $ 65 
2023 881  —  —  —  881 
2022 959  —  —  —  959 
2021 295  —  —  —  295 
2020 175  —  —  —  175 
Prior to 2020
 536  —  —  35  571 
Total receivables held-for-investment
2,911  —  —  35  2,946 
Less: Allowance for loss on receivables
 (50) —  —  —  (50)
Net receivables held-for-investment
 2,861  —  —  35  2,896 
Receivables held-for-sale 39  —  —  37  76 
Investments 5  —  —  2  7 
Real estate 3  —  —  —  3 
Equity method investments (5)
3,577  35  —  —  3,612 
Total
 $ 6,485  $ 35  $ —  $ 74  $ 6,594 
Percent of Portfolio 98  % 1  % —  % 1  % 100  %
(1)This category includes our assets where based on our credit criteria and performance to date we believe that our risk of not receiving our invested capital remains low.
(2)This category includes our assets where based on our credit criteria and performance to date we believe there is a moderate level of risk to not receiving some or all of our invested capital.
(3)This category includes our assets where based on our credit criteria and performance to date, we believe there is substantial doubt regarding our ability to recover some or all of our invested capital. Loans in this category are placed on non-accrual status.
(4)Receivable vintage refers to the period in which the relevant loan agreement is signed, and a given vintage may contain loan advances made in periods subsequent to the period in which the loan agreement was signed.
(5)Some of the individual projects included in portfolios that make up our equity method investments have government off-takers. As they are part of large portfolios, they are not classified separately.
Schedule of Carrying Value, Expected Loan Funding Commitments, and Allowance by Type of Receivable
Below is a summary of the carrying value, expected loan funding commitments, and allowance by type of receivable or “Portfolio Segment,” as defined by Topic 326, as of December 31, 2024 and 2023:
December 31, 2024 December 31, 2023
Gross Carrying Value Loan Funding Commitments Allowance Gross Carrying Value Loan Funding Commitments Allowance
(in millions)
Commercial (1)
$ 2,911  $ 545  $ 50  $ 3,033  $ 423  $ 50 
Government (2)
35  —  —  91  —  — 
Total $ 2,946  $ 545  $ 50  $ 3,124  $ 423  $ 50 

(1)As of December 31, 2024, this category of assets includes $1.5 billion of mezzanine loans made on a non-recourse basis to bankruptcy-remote special purpose subsidiaries of residential solar companies which hold residential solar assets where we rely on certain limited indemnities, warranties, and other obligations of the residential solar companies or their other subsidiaries. These residential solar assets typically contain back-up servicer provisions to allow for continuity of operations in the event the project sponsor is unable to fulfill its duties in that capacity. See “Related Party Transactions” below for discussion of loans in this category made to special purpose entities that were previously sponsored by the SunPower Corporation.
Risk characteristics of our commercial receivables include a project’s operating risks, which include the impact of the overall economic environment, the climate solutions sector, the effect of local, industry, and broader economic factors, the impact of any variation in weather and trends in interest rates. We use assumptions related to these risks to estimate an allowance using a discounted cash flow analysis or the PD/LGD method as discussed in Note 2. All of our commercial receivables are included in Performance Rating 1 in the Portfolio Performance table above. For those assets in Performance Rating 1, the credit worthiness of the obligor combined with the various structural protections of our assets cause us to believe we have a low risk we will not receive our invested capital, however we recorded a $50 million allowance on these $2.9 billion in assets as a result of lower probability assumptions utilized in our allowance methodology.
(2)As of December 31, 2024, our government receivables include $7 million of U.S. federal government transactions and $28 million of transactions where the ultimate obligors are state or local governments.
Risk characteristics of our government receivables include the energy savings or the power output of the projects and the ability of the government obligor to generate revenue for debt service, via taxation or other means. Transactions may have guarantees of energy savings or other performance support from third-party service providers, which typically are entities, directly or whose ultimate parent entity is, rated investment grade by an independent rating agency. All of our government receivables are included in Performance Rating 1 in the Portfolio Performance table above. Our allowance for government receivables is primarily calculated by using PD/LGD methods as discussed in Note 2. Our expectation of credit losses for these receivables is immaterial given the high credit-quality of the obligors.

The following table reconciles our beginning and ending allowance for loss on receivables by Portfolio Segment for the year ended December 31, 2024:
Commercial Government
(in millions)
Beginning balance - December 31, 2022
 $ 41  $ — 
Provision for loss on receivables 9  — 
Write-off of allowance —  — 
Ending balance - December 31, 2023
 50  — 
Provision for loss on receivables —  — 
Write-off of allowance —  — 
Ending balance - December 31, 2024
 $ 50  $ — 
Schedule of Anticipated Maturity Dates of Receivables and Investments and Weighted Average Yield
The following table provides a summary of our anticipated maturity dates of our receivables and the weighted average yield for each range of maturities as of December 31, 2024:
Total Less than 1
year		 1-5 years 5-10 years More than 10
years
  (dollars in millions)
Maturities by period (excluding allowance) $ 2,946  $ 24  $ 892  $ 894  $ 1,136 
Weighted average yield by period 8.6  % 6.6  % 8.3  % 9.4  % 8.4  %
Schedule of Components of Real Estate Portfolio The components of our real estate portfolio as of December 31, 2024 and 2023, were as follows:
December 31,
2024 2023
  (in millions)
Real estate
Land $ 3  $ 97 
Lease intangibles —  22 
Accumulated amortization of lease intangibles —  (8)
Real estate $ 3  $ 111 
Schedule of Equity Method Investments As of December 31, 2024, we held the following equity method investments:
Investee Carrying Value
  (in millions)
Jupiter Equity Holdings, LLC $ 613 
Daggett Renewable HoldCo LLC
 422 
Lighthouse Renewable HoldCo 2 LLC
 363 
CarbonCount Holdings 1 LLC
 309 
Other equity method investments
 1,905 
Total equity method investments $ 3,612 
The following is a summary of the consolidated balance sheets and income statements of the entities in which we have a significant equity method investment. These amounts are presented on the underlying investees’ accounting basis. In certain instances, adjustment to these equity values may be necessary in order to reflect our basis in these investments, for reasons including but not limited to the investees reporting to us being on a cost basis rather than a fair value basis or due to our allocations under HLBV differing from our purchase price of the investment. As described in Note 2, any difference between the amount of our investment and the amount of our share of underlying equity is generally amortized over the life of the assets and liabilities to which the differences relate. Our basis in equity method investments exceeds the basis reported to us by our investees by an aggregate amount of $104 million, and $284 million, as of December 31, 2024 and 2023, respectively. Certain of the projects in which we have equity method investments also have interest rate swaps which are designated as cash flow hedges, and we recognize the portion of the gain or loss allocated to us related to those instruments through other comprehensive income. As of December 31, 2024 and 2023, we have accumulated other comprehensive income net of tax effect of $23 million and $47 million respectively, related to the interest rate swaps designated as cash flow hedges by our investees.
Daggett Renewable HoldCo LLC
Other Investments (1)
Total
Balance Sheet
(in millions)
As of September 30, 2024
Current assets $ 66  $ 1,156  $ 1,222 
Total assets 1,114  20,217  21,331 
Current liabilities 13  2,050  2,063 
Total liabilities 453  9,514  9,967 
Members’ equity 661  10,703  11,364 
As of December 31, 2023
Current assets 35  947  982 
Total assets 677  17,917  18,594 
Current liabilities 10  920  930 
Total liabilities 262  8,398  8,660 
Members’ equity 415  9,519  9,934 
Income Statement
For the nine months ended September 30, 2024
Revenue 50  860  910 
Income (loss) from continuing operations (16) (264) (280)
Net income (loss) (16) (264) (280)
For the year ended December 31, 2023
Revenue 16  1,209  1,225 
Income (loss) from continuing operations (6) (63) (69)
Net income (loss) (6) (63) (69)
For the year ended December 31, 2022
Revenue —  500  500 
Income (loss) from continuing operations —  (392) (392)
Net income (loss) —  (392) (392)
(1)    Represents aggregated financial statement information for investments not separately presented.
Schedule of Related Party Transactions
The following table provides additional detail on our transactions with related party equity method investees:
For the year ended December 31,
2024 2023 2022
(in millions)
Interest income from related party loans $ 81  $ 68  $ 60 
Additional investments made in related party loans
 246  324  164 
Principal collected from related party loans 322  36  87 
Interest collected from related party loans 64  62  64