What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-08 compared with 2024-08-02 · 171 added, 134 removed, 1065 unchanged (22% of the section changed)

3 unchanged sentences

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

June 30, 2024 (unaudited) December 31, 2023

September 30, 2024 (unaudited) December 31, 2023

Cash and cash equivalents $ 44,053 $ 62,632

32 unchanged sentences

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

For the Three Months Ended June 30, For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2024 2023 2024 2023

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Total expenses 84,848 76,091 262,572 206,247

Income before equity method investments 10,416 9,669 22,609 13,279

Income (loss) before equity method investments

( 2,883 ) 13,760 19,726 27,039

Income (loss) from equity method investments ( 23,405 ) 2,759 162,019 27,429

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(DOLLARS IN THOUSANDS)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Net income (loss) $ ( 19,176 ) $ 21,647 $ 132,316 $ 59,767

Unrealized gain (loss) on available-for-sale securities and securitization assets, net of tax benefit (provision) of $ 1.5 million and $ 3.2 million for the three and six months ended June 30, 2024 and $ 0.3 million and $ 0.0 million for the three and six months ended June 30, 2023

Unrealized gain (loss) on available-for-sale securities and securitization assets, net of tax benefit (provision) of $( 4.5 ) million and $( 1.3 ) million for the three and nine months ended September 30, 2024 and $ 0.6 million and $ 0.6 million for the three and nine months ended September 30, 2023

13,547 ( 20,614 ) 3,897 ( 17,046 )

Unrealized gain (loss) on interest rate swaps, net of tax benefit (provision) of $( 5.9 ) million and $( 12.9 ) million for the three and six months ended June 30, 2024 and $ 1.1 million and $ 1.4 million for the three and six months ended June 30, 2023

Unrealized gain (loss) on interest rate swaps, net of tax benefit (provision) of $ 16.1 million and $ 3.1 million for the three and nine months ended September 30, 2024 and $( 26.4 ) million and $( 24.9 ) million for the three and nine months ended September 30, 2023

( 47,520 ) 76,597 ( 9,624 ) 75,481

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Shares Amount

Balance at March 31, 2024 113,476 $ 1,135 $ 2,415,118 $ ( 227,820 ) $ 29,111 $ 55,871 $ 2,273,415

Balance at June 30, 2024

115,152 $ 1,152 $ 2,467,512 $ ( 249,277 ) $ 41,052 $ 62,728 $ 2,323,167

Net income (loss) — — — ( 19,616 ) — 440 ( 19,176 )

4 unchanged sentences

Issuance (repurchase) of vested equity-based compensation shares 2 — ( 36 ) — — — ( 36 )

— — 1,382 — — — 1,382

Dividends and distributions — — — ( 49,191 ) — ( 901 ) ( 50,092 )

Balance at September 30, 2024

118,195 $ 1,182 $ 2,567,654 $ ( 318,084 ) $ 7,537 $ 64,810 $ 2,323,099

Balance at June 30, 2023 106,769 $ 1,068 $ 2,283,257 $ ( 326,413 ) $ ( 8,002 ) $ 43,998 $ 1,993,908

Balance at March 31, 2023 91,658 $ 917 $ 1,946,904 $ ( 297,708 ) $ ( 32,820 ) $ 41,522 $ 1,658,815

Net income (loss) — — — 21,446 — 201 21,647

4 unchanged sentences

Issuance (repurchase) of vested equity-based compensation shares 3 — ( 33 ) — — — ( 33 )

Conversion of Convertible Notes — — 2 — — — 2

Purchase of capped calls

— — ( 37,835 ) — — — ( 37,835 )

Dividends and distributions — — — ( 43,962 ) — ( 733 ) ( 44,695 )

Balance at June 30, 2023 106,770 $ 1,068 $ 2,283,255 $ ( 326,413 ) $ ( 8,003 ) $ 43,998 $ 1,993,905

Balance at September 30, 2023

111,166 $ 1,112 $ 2,353,453 $ ( 348,929 ) $ 47,264 $ 46,994 $ 2,099,894

See accompanying notes.

9 unchanged sentences

Issuance (repurchase) of vested equity-based compensation shares 24 — ( 502 ) — — — ( 502 )

— — 1,382 — — — 1,382

Dividends and distributions — — — ( 144,497 ) — ( 2,679 ) ( 147,176 )

Balance at June 30, 2024 115,152 $ 1,152 $ 2,467,512 $ ( 249,277 ) $ 41,052 $ 62,728 $ 2,323,167

Balance at September 30, 2024

118,195 $ 1,182 $ 2,567,654 $ ( 318,084 ) $ 7,537 $ 64,810 $ 2,323,099

Balance at December 31, 2022 90,837 $ 908 $ 1,924,200 $ ( 285,474 ) $ ( 10,397 ) $ 35,509 $ 1,664,746

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Conversion of convertible notes — — 2 — — — 2

Purchase of capped calls

— — ( 37,835 ) — — — ( 37,835 )

Dividends and distributions — — — ( 122,530 ) — ( 2,595 ) ( 125,125 )

Balance at June 30, 2023 106,770 $ 1,068 $ 2,283,255 $ ( 326,413 ) $ ( 8,003 ) $ 43,998 $ 1,993,905

Balance at September 30, 2023

111,166 $ 1,112 $ 2,353,453 $ ( 348,929 ) $ 47,264 $ 46,994 $ 2,099,894

See accompanying notes.

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(DOLLARS IN THOUSANDS)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities

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Proceeds from issuance of non-recourse debt

Proceeds from issuance of commercial paper notes 80,000 100,000

Principal payments on non-recourse debt

( 72,302 ) ( 14,714 )

Proceeds from issuance of commercial paper notes — 49,775

Principal payments on commercial paper notes

Proceeds from issuance of senior unsecured notes 900,355 —

Proceeds from issuance of convertible notes — 402,500

Principal payments on convertible notes — ( 143,748 )

Purchase of capped calls related to the issuance of convertible notes — ( 37,835 )

Redemption of senior unsecured notes ( 400,000 ) —

Net proceeds of common stock issuances 179,722 465,015

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Residual assets retained from securitization transactions $ 31,662 $ 26,020

Equity method investments retained from securitization transactions

Equity method investments retained from securitization and deconsolidation transactions

32,564 144,603

Equity method investments retained from sale of assets upon establishment of co-investment structure 54,655 —

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024

September 30, 2024

HA Sustainable Infrastructure Capital, Inc., formerly known as Hannon Armstrong Sustainable Infrastructure Capital, Inc.

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In the opinion of management, all adjustments necessary to present fairly our financial position, results of operations and cash flows have been included.

Our results of operations for the three- and six-month periods ended June 30, 2024 and 2023, are not necessarily indicative of the results to be expected for the full year or any other future period.

Our results of operations for the three- and nine-month periods ended September 30, 2024 and 2023, are not necessarily indicative of the results to be expected for the full year or any other future period.

Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted.

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Transfers of non-financial assets are accounted for under ASC 610-20, Gains and Losses from the Derecognition of Non-financial Assets , and those transfers are accounted for as sales when we have concluded that we have transferred control of the non-financial asset.

For transfers treated as sales under ASC 860, we have received true-sale-at-law and non-consolidation legal opinions for all of our securitization trust structures to support our conclusion regarding the transferred financial assets.

For transfers treated as sales under ASC 860, we have received true-sale-at-law and non-consolidation legal opinions to support our conclusion regarding the transferred financial assets.

When we sell financial assets in securitizations, we generally retain interests in the form of servicing rights and residual assets, which we refer to as securitization assets.

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Under ASC 815, issuers of certain convertible or exchangeable debt instruments are generally required to separately account for the conversion or exchange option of the debt instrument as either a derivative or equity, unless it meets the scope exemption for contracts indexed to, and settled in, an issuer’s own equity.

Since our conversion or exchange options are both indexed to our equity and can only be settled in our common stock, we have met the scope exemption, and therefore, we do not separately account for the embedded conversion or exchange options.

Since our conversion or exchange options are both indexed to our equity and can be settled in our common stock at our option, we have met the scope exemption, and therefore, we do not separately account for the embedded conversion or exchange options.

The initial issuance and any principal repayments are classified as financing activities and interest payments are classified as operating activities in our consolidated statements of cash flows.

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2023-07, we will provide the disclosures required by ASC Topic 280, Segment Reporting.

Other accounting standards updates issued before August 2, 2024, and effective after June 30, 2024, are not expected to have a material effect on our consolidated financial statements and related disclosures.

Other accounting standards updates issued before November 8, 2024, and effective after September 30, 2024, are not expected to have a material effect on our consolidated financial statements and related disclosures.

Fair Value Measurements

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We use our judgment and consider factors specific to the financial assets and liabilities in determining the significance of an input to the fair value measurements.

As of June 30, 2024 and December 31, 2023, only our residual assets related to our securitization trusts, our derivatives, and our investments were carried at fair value on the consolidated balance sheets on a recurring basis.

As of September 30, 2024 and December 31, 2023, only our residual assets related to our securitization trusts, our derivatives, and our investments were carried at fair value on the consolidated balance sheets on a recurring basis.

The three levels of the fair value hierarchy are described below:

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The receivables held-for-sale, if any, are carried at the lower of cost or fair value, as determined on an individual asset basis.

As of June 30, 2024

As of September 30, 2024

Fair Value Carrying

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Investments (1)

18 18 Level 3

Securitization residual assets (2)

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Derivative liabilities 37 37 Level 2

(1) The amortized cost of our investments as of June 30, 2024, was $ 8 million.

(1) The amortized cost of our investments as of September 30, 2024, was $ 19 million.

(2) Included in securitization assets on the consolidated balance sheet.

The amortized cost of our securitization residual assets net of allowance for credit losses as of June 30, 2024 was $ 287 million.

The amortized cost of our securitization residual assets net of allowance for credit losses as of September 30, 2024 was $ 289 million.

(3) Fair value and carrying value exclude unamortized financing costs.

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The following table reconciles the beginning and ending balances for our Level 3 securitization residual assets that are carried at fair value on a recurring basis, with changes in fair value recorded through AOCI:

For the three months ended June 30, For the six months ended June 30,

For the three months ended September 30, For the nine months ended September 30,

2024 2023 2024 2023

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Unrealized gains (losses) on securitization residual assets recorded in OCI 18 ( 20 ) 5 ( 16 )

Provision for loss on securitization residual assets — ( 3 ) — ( 3 )

Balance, end of period $ 258 $ 183 $ 258 $ 183

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(in millions)

June 30, 2024 $ 23 $ 177 $ 1 $ 52 18 73

September 30, 2024 $ 7 $ 161 $ 0.3 $ 39 10 66

December 31, 2023 24 164 0.3 41 11 66

1 unchanged sentence

We have the intent and ability to hold these investments until a recovery of fair value.

In determining the fair value of our securitization residual assets, we used a market-based risk-free rate and added a range of interest rate spreads of approximately 1 % to 6 % based upon transactions involving similar assets as of June 30, 2024 and December 31, 2023.

The weighted average discount rates used to determine the fair value of our securitization residual assets as of June 30, 2024 and December 31, 2023 were 6.9 % and 6.6 %, respectively.

The weighted average discount rates used to determine the fair value of our securitization residual assets as of September 30, 2024 and December 31, 2023 were 6.6 % and 6.6 %, respectively.

Non-recurring Fair Value Measurements

8 unchanged sentences

We had cash deposits that are subject to credit risk as shown below:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(in millions)

7 unchanged sentences

The outstanding OP units not held by us represent approximately 1 % of our outstanding OP units and are redeemable by the limited partners for cash, or at our option, for a like number of shares of our common stock.

No OP units were redeemed by non-controlling interest holders during the six months ended June 30, 2024 or June 30, 2023.

No OP units were redeemed by non-controlling interest holders during the nine months ended September 30, 2024 or September 30, 2023.

We have also granted to members of our leadership team and directors LTIP Units pursuant to our equity incentive plans.

7 unchanged sentences

The following summarizes certain transactions with securitization trusts:

As of and for the six months ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2024 2023 2024 2023

(in millions)

2 unchanged sentences

Proceeds from securitizations 114 45 927 477

Residual and servicing assets 238 204

Cash received from residual and servicing assets 7 4 13 15

6 unchanged sentences

In computing gains and losses on securitizations, we use discount rates based on a review of comparable market transactions including Level 3 unobservable inputs, which consist of base interest rates and spreads over these base rates.

Depending on the nature of the transaction risks, the all-in discount rate ranged from 6 % to 8 % for the six months ended June 30, 2024.

As of June 30, 2024 and December 31, 2023, our managed assets totaled $ 13.0 billion and $ 12.3 billion, respectively, of which $ 6.8 billion and $ 6.1 billion, respectively, were securitized assets held in unconsolidated securitization trusts or other investors’ portions of assets held in co-investment structures.

As of June 30, 2024 and December 31, 2023, these trusts held $ 6.2 billion and $ 5.6 billion, respectively, of notes due to investors.

Depending on the nature of the transaction risks, the all-in discount rate ranged from 5 % to 9 % for the nine months ended September 30, 2024.

As of September 30, 2024 and December 31, 2023, our managed assets totaled $ 13.1 billion and $ 12.3 billion, respectively, of which $ 6.8 billion and $ 6.1 billion, respectively, were securitized assets held in unconsolidated securitization trusts or other investors’ portions of assets held in co-investment structures.

As of September 30, 2024 and December 31, 2023, trusts holding transferred financial assets held $ 6.2 billion and $ 5.6 billion, respectively, of notes due to investors.

We have an allowance for losses on securitization residual assets related to assets secured by property assessed clean energy liens, as a result of our estimates of cash flows due to prepayments on certain of these assets.

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The following table reconciles our beginning and ending allowance for loss on securitization residual assets:

Three months ended June 30, 2024 Three months ended June 30, 2023

Three months ended September 30, 2024 Three months ended September 30, 2023

Government Commercial Government Commercial

3 unchanged sentences

Ending balance $ — $ 3 $ — $ 3

Six months ended June 30, 2024 Six months ended June 30, 2023

Nine months ended September 30, 2024 Nine months ended September 30, 2023

Government Commercial Government Commercial

3 unchanged sentences

Ending balance $ — $ 3 $ — $ 3

As of June 30, 2024, there were no material payments from debtors to the securitization trusts that were greater than 90 days past due.

As of September 30, 2024, there were no material payments from debtors to the securitization trusts that were greater than 90 days past due.

Receivables from contracts for the installation of energy efficiency and other technologies are the source of cash flows of $ 122 million of our securitization residual assets.

3 unchanged sentences

Our Portfolio

As of June 30, 2024, our Portfolio included approximately $ 6.2 billion of equity method investments, receivables, real estate and investments on our balance sheet.

As of September 30, 2024, our Portfolio included approximately $ 6.3 billion of equity method investments, receivables, real estate and investments on our balance sheet.

The equity method investments represent our non-controlling equity investments in climate solutions projects.

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In addition, we consider 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 the historical and anticipated trends in interest rates, defaults and loss severities for similar transactions.

The following is an analysis of the Performance Ratings of our Portfolio as of June 30, 2024, which is assessed quarterly:

The following is an analysis of the Performance Ratings of our Portfolio as of September 30, 2024, which is assessed quarterly:

Portfolio Performance

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As they are part of large portfolios, they are not classified separately.

As of June 30, 2024, our allowance for losses on receivables was $ 48 million based on our expectation of credit losses over the lives of the receivables in our portfolio.

During the three months ended June 30, 2024, we decreased our reserve by approximately $ 4 million, driven by a large payment on a loan with a reserve and the contribution of loans with reserves to a co-investment structure.

Below is a summary of the carrying value, loan funding commitments, and allowance by type of receivable or “Portfolio Segment”, as defined by Topic 326, as of June 30, 2024 and December 31, 2023:

June 30, 2024 December 31, 2023

As of September 30, 2024, our allowance for losses on receivables was $ 49 million based on our expectation of credit losses over the lives of the receivables in our portfolio.

During the three months ended September 30, 2024, we increased our reserve by approximately $ 1 million, driven primarily by loans and loan commitments made during the period.

Below is a summary of the carrying value, loan funding commitments, and allowance by type of receivable or “Portfolio Segment”, as defined by Topic 326, as of September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

Gross Carrying Value Loan Funding Commitments Allowance Gross Carrying Value Loan Funding Commitments Allowance

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Total $ 2,949 $ 455 $ 49 $ 3,124 $ 423 $ 50

(1) As of June 30, 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.

(1) As of September 30, 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 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.

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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 $ 49 million allowance on these $ 2.9 billion in assets as a result of lower probability assumptions utilized in our allowance methodology.

(2) As of June 30, 2024, our government receivables include $ 8 million of U.S.

(2) As of September 30, 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.

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The following table reconciles our beginning and ending allowance for loss on receivables by Portfolio Segment:

Three months ended June 30, 2024 Three months ended June 30, 2023

Three months ended September 30, 2024 Three months ended September 30, 2023

Government Commercial Government Commercial

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Ending balance $ — $ 49 $ — $ 51

Six months ended June 30, 2024 Six months ended June 30, 2023

Nine months ended September 30, 2024 Nine months ended September 30, 2023

Government Commercial Government Commercial

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We have no receivables on non-accrual status.

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 June 30, 2024:

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 September 30, 2024:

Total Less than 1

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In the first quarter of 2024, we sold $ 100 million carrying value of land and related intangibles, and we retain a residual interest in those assets in the form of an equity method investment.

The components of our real estate portfolio that we own directly as of June 30, 2024 and December 31, 2023, were as follows:

June 30, 2024 December 31, 2023

The components of our real estate portfolio that we own directly as of September 30, 2024 and December 31, 2023, were as follows:

September 30, 2024 December 31, 2023

(in millions)

5 unchanged sentences

We have made non-controlling equity investments in a number of climate solutions projects that we account for as equity method investments.

As of June 30, 2024, we held the following equity method investments:

As of September 30, 2024, we held the following equity method investments:

Investee Carrying Value

8 unchanged sentences

We have a preferred equity interest in Jupiter Equity Holdings LLC (“Jupiter”) that owns nine operating onshore wind projects and four operating utility-scale solar projects with an aggregate capacity of approximately 2.3 gigawatts.

As of June 30, 2024, we have made capital contributions to Jupiter of approximately $ 562 million related to these projects reflecting final funding true-ups after all projects reached substantial completion.

As of September 30, 2024, we have made capital contributions to Jupiter of approximately $ 562 million related to these projects reflecting final funding true-ups after all projects reached substantial completion.

Alongside the project sponsor and under terms outlined in the partnership agreement, we have made $ 91 million in loans to Jupiter for both payments related to winter storm Uri as well as for payments to allow for the restructuring of certain power purchase agreements and tax equity arrangements, which we expect to increase both near-term cash flows and expected lifetime return.

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We have preferred equity interests in Daggett Renewable HoldCo LLC (“Daggett”) which owns two utility-scale solar projects developed and managed by the project sponsor.

We have made investments in the preferred cash equity interests of

Daggett of approximately $ 238 million through June 30, 2024.

We have made investments in the preferred cash equity interests of Daggett of approximately $ 232 million through September 30, 2024, reflecting final funding true-ups after all projects reached

substantial completion..

The Daggett projects feature contracted cash flows with a diversified group of predominately investment grade utility offtakers.

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We have preferred equity interests in Lighthouse Renewables HoldCo 2 LLC (“Lighthouse 2”) which owns three onshore wind and utility-scale solar and solar-plus-storage projects, all developed and managed by the project sponsor.

We have made investments in the preferred cash equity interests of the Lighthouse 2 of approximately $ 420 million through June 30, 2024.

We have made investments in the preferred cash equity interests of the Lighthouse 2 of approximately $ 420 million through September 30, 2024.

Alongside the project sponsor and under terms outlined in the partnership agreement, we have made $ 18 million in working capital loans to Lighthouse 2 primarily for payments related to winter storm Uri.

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We use the equity method of accounting to account for our preferred equity interests in Lighthouse 2, and have elected to recognize earnings from this investment one quarter in arrears to allow for the receipt of financial information.

Related Party Transactions

CarbonCount Holdings 1 LLC

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CCH1 has been formed as a Delaware limited liability company.

HASI CarbonCount and KKR Hoops have each commited $ 1 billion to CCH1 to be invested in clean energy assets during an 18 month investment period.

HASI CarbonCount and KKR Hoops have each committed $ 1 billion to CCH1 to be invested in clean energy assets during an 18 month investment period.

In addition, HASI, through its indirect subsidiaries, Hannon Armstrong Securities, LLC (the “Broker-Dealer”) and CarbonCount Holdings Manager LLC (the “Asset Manager”, and, together with the Broker-Dealer, the “Service Providers”), is engaged by CCH1 pursuant to a services agreement (the “Services Agreement’) to provide certain services to CCH1.

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CCH1 pays the Broker-Dealer, for provision of the services provided, an upfront fee on each funding of investments generally equal to 1 % of the total cash consideration funded by CCH1 to the applicable investment counterparty.

pays the Asset Manager, for provision of the services provided by it, ongoing fees in respect of asset management and administering the management and operation of CCH1, payable when deducted from CCH1’s cash available for distribution.

CCH1 also pays the Asset Manager, for provision of the services provided by it, ongoing fees in respect of asset management and administering the management and operation of CCH1, payable when deducted from CCH1’s cash available for distribution.

The fee payable to the Asset Manager is calculated on the basis of certain performance thresholds and will generally not be less than 0.5 % of invested capital per annum, subject to certain limited exceptions, nor more than 1.00 %.

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CCH1 will recognize income from its equity method investees one quarter in arrears to allow for its receipt of financial information.

Related Party Transactions

Other Related Party Transactions

Of our receivables, approximately $ 899 million are loans made to entities in which we also have non-controlling equity investments of approximately $ 832 million.

Typically, these equity method investments are LLCs taxed as partnerships that we have entered into with various renewable energy project sponsors, such as SunPower Corporation.

Typically, these equity method investments are LLCs taxed as partnerships that we have entered into with various renewable energy project sponsors, including SunPower Corporation further described below.

We negotiate the commercial terms of these loans with the other partner, and the assets against which the project sponsors are borrowing are contributed into the LLCs upon the execution of the loans.

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On a quarterly basis, we assess these loans for any impairment inclusive of any PIK interest accrued under CECL as discussed above under Receivables.

The following table provides additional detail on these related party transactions:

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023 Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

The following table provides additional detail on our transactions with related party equity method investments:

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

(in millions)

1 unchanged sentence

Additional investments made in related party loans

79 95 172 187

Principal collected from related party loans 17 12 260 27

Interest collected from related party loans 15 15 49 45

Investments related to SunPower Corporation

On August 5, 2024, SunPower Corporation (“SunPower”), a project sponsor for certain of the residential solar projects in which we invest, declared Chapter 11 bankruptcy.

As of September 30, 2024, we have commercial receivables with a gross carrying value of $ 327 million due from special purpose entities which own individual residential solar assets (“SunStrong SPEs”) for which SunPower performed certain services including billing and collections, operations and maintenance, and accounting, tax filings, and financial reporting.

These SunStrong SPEs are bankruptcy remote from SunPower, and were jointly owned by SunPower and us.

The cash flows supporting our loans are from each individual residential customer rather than SunPower and are not expected to be materially impacted by this event.

We evaluate these loans quarterly during our assessment of allowance for loan losses, and have determined that our allowance for loan losses related to these loans has not been materially impacted by these events.

As of September 30, 2024, we had equity method investments of $ 31 million in the SunStrong SPEs.

We have not identified any OTTI with regards to these assets, and we do not expect our equity method investments in these entities to be materially impacted by this ownership change.

In October of 2024, SunPower’s interests in such entities were purchased by a third party, who have retained SunPower’s governance rights within those structures and who intend to be a long-term co-owner of the SunStrong SPEs, and accordingly we have continued and will continue to account for our interest in these entities as equity method investments.

We are taking steps to ensure continuation of the services currently provided by SunPower, including the engagement of replacement service providers.

As of the date of filing of these financial statements, we do not believe the bankruptcy of SunPower will have a material impact on our consolidated financial statements.

Credit facility and commercial paper notes

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In the second quarter of 2024, we increased the maximum outstanding borrowing amount of this facility to $ 1.25 billion, and extended the maturity to April 2028.

As of June 30, 2024, the outstanding balance on this facility was $ 317 million, and it currently bears interest at a weighted average rate of 7.01 %.

As of June 30, 2024, we have approximately $ 10 million of remaining unamortized financing costs associated with the unsecured revolving credit facility that have been capitalized and included in other assets on our balance sheet and are being amortized on a straight-line basis over the term of the unsecured revolving credit facility.

In October of 2024, we added a new lender to the existing syndicate and increased the capacity of the facility by an additional $ 100 million.

As of September 30, 2024, the outstanding balance on this facility was $ 116 million, and it currently bears interest at a weighted average rate of 6.83 %.

As of September 30, 2024, we have approximately $ 9 million of remaining unamortized financing costs associated with the unsecured revolving credit facility that have been capitalized and included in other assets on our balance sheet and are being amortized on a straight-line basis over the term of the unsecured revolving credit facility.

The unsecured revolving credit facility has a commitment fee based on our current credit rating and bears interest at a rate of SOFR or prime rate plus applicable margins based on our current credit rating, which may also be adjusted downward up to 0.10 % to the extent our Portfolio achieves certain targeted levels of carbon emissions avoidance, as measured by our CarbonCount © metric.

1 unchanged sentence

The unsecured revolving credit facility has a commitment fee based on our current credit rating.

The unsecured revolving credit facility contains terms, conditions, covenants, and representations and warranties that are

customary and typical for transactions of this nature, including various affirmative and negative covenants, and limitations on the incurrence of liens and indebtedness, investments, fundamental organizational changes, dispositions, changes in the nature of business, transactions with affiliates, use of proceeds, stock repurchases, and dividends we can declare.

The unsecured revolving credit facility contains terms, conditions, covenants, and representations and warranties that are customary and typical for transactions of this nature, including various affirmative and negative covenants, and limitations on the incurrence of liens and indebtedness, investments, fundamental organizational changes, dispositions, changes in the nature of business, transactions with affiliates, use of proceeds, stock repurchases, and dividends we can declare.

The unsecured revolving credit facility also includes customary events of default and remedies.

1 unchanged sentence

CarbonCount Green Commercial Paper Note Program

As of June 30, 2024, we have a CarbonCount Green Commercial Paper Note Program (the “commercial paper program”) that allows us to issue commercial paper notes at any time.

As of September 30, 2024, we have a CarbonCount Green Commercial Paper Note Program (the “commercial paper program”) that allows us to issue commercial paper notes at any time.

In the second quarter of 2024, we increased the capacity of the program to allow for up to $ 125 million outstanding at any time, and extended the maturity of the program to April 2026.

6 unchanged sentences

An amount equal to the proceeds of our commercial paper notes are allocated to either the acquisition or refinance of, in whole or in part, eligible green projects, including assets that are neutral to negative on incremental carbon emissions.

As of June 30, 2024, we have $ 110 million of commercial paper notes outstanding under the facility, which together bear an average total borrowing rate of 6.73 %.

As of September 30, 2024, we have $ 18 million of commercial paper notes outstanding under the facility, which together bear an average total borrowing rate of 6.25 %.

Commercial paper notes will be issued at a discount based on market pricing, subject to broker fees of 0.10 %.

2 unchanged sentences

Fees paid on the drawn letters of credit may be reduced by up to 0.1 % to the extent our Portfolio achieves certain targeted levels of carbon emissions avoidance as measured by our CarbonCount metric.

As of June 30, 2024, we have no remaining unamortized financing costs associated with the commercial paper program and associated letter of credit.

As of September 30, 2024, we have no remaining unamortized financing costs associated with the commercial paper program and associated letter of credit.

The associated letter of credit contains terms, conditions, covenants, and representations and warranties that are customary and typical for a transaction of this nature, including various affirmative and negative covenants, and limitations on the incurrence of liens and indebtedness, investments, fundamental organizational changes, dispositions, changes in the nature of business, transactions with affiliates, use of proceeds, stock repurchases and dividends we declare.

8 unchanged sentences

The senior secured revolving credit agreement also includes customary events of default and remedies.

As of June 30, 2024, we had no balance outstanding on the senior secured revolving credit agreement, and availability under the revolving credit agreement of $ 22 million based on the pledged collateral.

As of September 30, 2024, we had no balance outstanding on the senior secured revolving credit agreement, and we had availability under the revolving credit agreement of $ 22 million based on the pledged collateral.

We had approximately $ 1 million in unamortized financing costs associated with the senior secured revolving credit agreement, which are included in other assets.

5 unchanged sentences

Maturity Carrying Value of Assets Pledged as of

June 30, 2024 December 31, 2023 Interest

Rate Maturity Date June 30, 2024 December 31, 2023 Description

September 30, 2024 December 31, 2023 Interest

Rate Maturity Date September 30, 2024 December 31, 2023 Description

of Assets Pledged

14 unchanged sentences

Scheduled debt service payment requirements are equal to or less than the cash flows received from the underlying receivables.

(4) The total collateral pledged against our non-recourse debt was $ 306 million and $ 239 million as of June 30, 2024 and December 31, 2023, respectively.

These amounts include $ 15 million and $ 11 million of restricted cash pledged for debt service payments as of June 30, 2024 and December 31, 2023, respectively.

(4) The total collateral pledged against our non-recourse debt was $ 302 million and $ 239 million as of September 30, 2024 and December 31, 2023, respectively.

These amounts include $ 13 million and $ 11 million of restricted cash pledged for debt service payments as of September 30, 2024 and December 31, 2023, respectively.

We have pledged the financed assets, and typically our interests in one or more parents or subsidiaries of the borrower that are legally separate bankruptcy remote special purpose entities as security for the non-recourse debt.

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We typically act as servicer for the debt transactions.

We were in compliance with all covenants as of June 30, 2024 and December 31, 2023.

We were in compliance with all covenants as of September 30, 2024 and December 31, 2023.

We have guaranteed the accuracy of certain of the representations and warranties and other obligations of certain of our subsidiaries under certain of the debt agreements and provided an indemnity against certain losses from “bad acts” of such subsidiaries including fraud, failure to disclose a material fact, theft, misappropriation, voluntary bankruptcy or unauthorized transfers.

The stated minimum maturities of non-recourse debt as of June 30, 2024, were as follows:

The stated minimum maturities of non-recourse debt as of September 30, 2024, were as follows:

Future minimum maturities

(in millions)

July 1, 2024 to December 31, 2024 $ 7

October 1, 2024 to December 31, 2024 $ 3

Thereafter 84

7 unchanged sentences

Senior Unsecured Notes

We have outstanding senior unsecured notes issued jointly by certain of our subsidiaries which are guaranteed by the Company and certain other subsidiaries (the “Senior Unsecured Notes”).

We have outstanding senior unsecured notes issued by us or jointly by certain of our subsidiaries which are guaranteed by the Company and certain other subsidiaries (the “Senior Unsecured Notes”).

The Senior Unsecured Notes were subject to covenants that limited our ability to incur additional indebtedness and required us to maintain unencumbered assets of not less than 120 % of our unsecured debt.

These covenants terminated during the second quarter of 2024 as a result of the Senior Unsecured Notes having been rated investment grade by two of the three major credit rating agencies and no event of default having occurred.

We are in compliance with all of our remaining covenants as of June 30, 2024 and December 31, 2023.

These covenants terminated during the second quarter of 2024 as a result of us being rated an investment grade issuer by two of the three major credit rating agencies and no event of default having occurred.

We are in compliance with all of our remaining covenants as of September 30, 2024 and December 31, 2023.

The Senior Unsecured Notes impose certain requirements in the event that we merge with or sell substantially all of our assets to another entity.

We allocate an amount equal to the net proceeds of our Senior Unsecured Notes to the acquisition or refinance of, in whole or in part, eligible green projects, including assets that are neutral to negative on incremental carbon emissions.

Subsequent to June 30, 2024, we issued $ 700 million principal amount of Senior Unsecured Notes due in July 2034 (“2034 Notes”), which bear interest at a rate of 6.375 %.

The notes were issued for gross proceeds of $ 695 million, resulting in a yield to maturity of 6.476 %.

We used a portion of the proceeds from this issuance to redeem the outstanding principal amount of the 2025 notes.

The following are summarized terms of the Senior Unsecured Notes as of June 30, 2024:

The following are summarized terms of the Senior Unsecured Notes as of September 30, 2024:

Outstanding Principal Amount Maturity Date Stated Interest Rate Interest Payment Dates Redemption Terms Modification Date

8 unchanged sentences

September 15, 2030 3.75 % February 15th and August 15th N/A

(1) Subsequent to June 30, 2024, we redeemed the 2025 Notes using proceeds from the issuance of the 2034 Notes.

July 1, 2034 6.38 % July 1st and

(1) In the third quarter of 2024, we issued $ 700 million principal amount of Senior Unsecured Notes due in July 2034 (“2034 Notes”), which bear interest at a rate of 6.375 %.

The notes were issued for gross proceeds of $ 695 million, resulting in a yield to maturity of 6.476 %.

We used a portion of the proceeds from this issuance to redeem the outstanding principal amount of the 2025 notes.

There was no premium paid upon redemption.

9 unchanged sentences

The following table presents a summary of the components of the Senior Unsecured Notes:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(in millions)

4 unchanged sentences

Carrying value of Senior Unsecured Notes $ 2,840 $ 2,319

We recorded approximately $ 34 million and $ 68 million in interest expense related to the Senior Unsecured Notes in the three and six months ended June 30, 2024, respectively, compared to approximately $ 19 million and $ 38 million in the three and six months ended June 30, 2023, respectively.

We recorded approximately $ 40 million and $ 108 million in interest expense related to the Senior Unsecured Notes in the three and nine months ended September 30, 2024, respectively, compared to approximately $ 19 million and $ 57 million in the three and nine months ended September 30, 2023, respectively.

Convertible Notes

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Holders may convert or exchange any of their Convertible Notes into shares of our common stock at the applicable conversion or exchange ratio at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, unless the Convertible Notes have been previously redeemed or repurchased by us.

The following are summarized terms of the Convertible Notes as of June 30, 2024:

The following are summarized terms of the Convertible Notes as of September 30, 2024:

Outstanding Principal Amount Maturity Date Stated Interest Rate Interest Payment Dates Conversion/Exchange Ratio Conversion/Exchange Price Issuable Shares Dividend Threshold Amount (1)

18 unchanged sentences

The following table presents a summary of the components of our Convertible Notes:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(in millions)

4 unchanged sentences

Carrying value of Convertible Notes

We recorded approximately $ 6 million and $ 13 million in interest expense related to our Convertible Notes in the three and six months ended June 30, 2024 compared to $ 2 million and $ 5 million for the three and six months ended June 30, 2023, respectively.

We recorded approximately $ 6 million and $ 19 million in interest expense related to our Convertible Notes in the three and nine months ended September 30, 2024 compared to $ 5 million and $ 9 million for the three and nine months ended September 30, 2023, respectively.

In order to mitigate the potential dilution to our common stock upon exchange of the 2028 Exchangeable Senior Notes, we entered into privately-negotiated capped call transactions (“Capped Calls”) with certain counterparties.

12 unchanged sentences

Principal amounts under the term loan facility will bear interest at a rate of Term SOFR plus applicable margins based on our current credit rating, which may be adjusted downward up to 0.10 % to the extent our Portfolio achieves certain targeted levels of carbon emissions avoidance, as measured by our CarbonCount © metric.

As of June 30, 2024, the applicable margin is 1.875 % plus 0.10 %, and the current interest rate is 7.26 %.

As of September 30, 2024, the applicable margin is 1.875 % plus 0.10 %, and the current interest rate is 7.02 %.

The coupon on any drawn amounts will be reset at monthly, quarterly, or semi-annual intervals at our election.

4 unchanged sentences

In the second quarter of 2024, we extended the maturity date to 2027, with no changes to the pricing terms, and used proceeds from our unsecured revolving credit facility to make a partial prepayment of $ 275 million on the unsecured term loan facility to reduce the outstanding principal balance.

Amounts which were due under the term loan facility as of June 30, 2024 are as follows:

Amounts which were due under the term loan facility as of September 30, 2024 are as follows:

Future maturities

(in millions)

July 1, 2024 to December 31, 2024 $ 7

October 1, 2024 to December 31, 2024 $ 7

Unamortized Financing Costs ( 5 )

8 unchanged sentences

The secured term loan also includes customary events of default and remedies.

As of June 30, 2024, the outstanding principal and accrued interest balance is $ 171 million, the interest rate is 7.69 %, and we have financing receivables pledged with a carrying value of $ 411 million.

As of September 30, 2024, the outstanding principal and accrued interest balance is $ 169 million, the interest rate is 7.68 %, and we have financing receivables pledged with a carrying value of $ 409 million.

In the first quarter of 2024, we removed $ 45 million of pledged assets as collateral, and made a principal payment of $ 28 million.

We have $ 3 million of remaining unamortized financing costs associated with the Secured Term Loan that have been netted against the loan on our balance sheet and are being amortized on a straight-line basis over the term of the Secured Term Loan Facility.

Amounts which were due under the Secured Term Loan Facility as of June 30, 2024 are as follows:

Amounts which were due under the Secured Term Loan Facility as of September 30, 2024 are as follows:

Future maturities

(in millions)

July 1, 2024 to December 31, 2024 $ 4

October 1, 2024 to December 31, 2024 $ 2

Unamortized Financing Costs ( 3 )

1 unchanged sentence

Interest Rate Swaps

In connection with several of our long-term borrowings, including floating-rate loans from our Term Loan Facility, unsecured revolving credit facility, Secured Term Loan and the anticipated refinancings of certain of our Senior Unsecured Notes we have entered into the following derivative transactions that are designated as cash flow hedges as of June 30, 2024:

Instrument type Hedged Rate Notional Value Fair Value as of

Index June 30, 2024 December 31, 2023 Term of derivative and forecasted transactions

Index September 30, 2024 December 31, 2023 Term of derivative and forecasted transactions

$ in millions

8 unchanged sentences

170 ( 9 ) ( 8 ) September 2023 to June 2033

Interest rate swap Overnight SOFR 3.72 % 375 ( 10 ) — June 2027 to June 2037

$ 2,595 $ ( 25 ) 2

(1) This swap was financially settled in June 2024, for a benefit of $ 19 million.

The $ 19 million is in AOCI as of June 30, 2024 and will be amortized into interest expense over the term of the 2034 Notes.

The $ 19 million is in AOCI as of September 30, 2024 and will be amortized into interest expense over the term of the 2034 Notes.

(2) Interest rate collar consists of a purchased interest rate cap of 4.00 % and a written interest rate floor of 3.70 %.

1 unchanged sentence

The fair values of our interest rate derivatives designated and qualifying as effective cash flow hedges are reflected in our consolidated balance sheets as a component of other assets (if in an unrealized gain position) or accounts payable, accrued expenses and other (if in an unrealized loss position) and in net unrealized gains and losses in AOCI.

As of June 30, 2024, all of our derivatives were designated as hedging instruments which were deemed to be effective.

As of June 30, 2024, we hold $ 33 million of collateral related to our interest rate derivatives, and we have posted $ 6 million of collateral.

We have netted our $ 33 million of the liability associated with that collateral against the derivative asset in other assets on our balance sheet, with the remaining liability in accounts payable, accrued interest, and other.

We have netted $ 4 million of the asset associated with that collateral included in accounts payable, accrued expenses and other, with the remaining in other assets.

As of September 30, 2024, all of our derivatives were designated as hedging instruments which were deemed to be effective.

As of September 30, 2024, we have posted $ 19 million of collateral.

We have netted $ 17 million of our posted collateral against the derivative liability which is included in accounts payable, accrued expenses, and other on our balance sheet.

The remaining $ 2 million of our collateral is included in other assets.

The below table shows the changes in our AOCI balance related to our interest rate derivatives designated and qualifying as effective cash flow hedges:

6 unchanged sentences

Amounts released into interest expense 8

Ending Balance - June 30, 2024 $ 62

The below table shows the benefit (expense) included in interest expense as a result of our hedging activities for the three and six months ended June 30, 2024 and 2023, respectively.

We expect a benefit of $ 3 million to be released out of AOCI into interest expense over the 12 months following June 30, 2024.

Three months ended June 30, Six months ended June 30,

Ending Balance - September 30, 2024

The below table shows the benefit (expense) included in interest expense as a result of our hedging activities for the three and nine months ended September 30, 2024 and 2023, respectively.

We expect an expense of $ 2 million to be released out of AOCI into interest expense over the 12 months following September 30, 2024.

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

9 unchanged sentences

In connection with some of our transactions, we have provided certain limited representations, warranties, covenants and/or provided an indemnity against certain losses resulting from our own actions, including related to certain investment tax credits.

As of June 30, 2024, there have been no such actions resulting in claims against the Company.

As of September 30, 2024, there have been no such actions resulting in claims against the Company.

As a part of broader project restructuring in order to increase our expected cash flows from the investment, we alongside the project sponsor, made guarantees to support the working capital needs of two of the project companies owned by Jupiter, an equity method investee.

The guarantees are in effect until the tax equity investors in those project companies achieve their target preferred returns, and our contractual maximum under these guarantees is $ 53 million, and is limited to $ 20 million in any particular calendar year.

As of June 30, 2024, we have no liability recorded as a result of these guarantees as we believe it is not probable we will be required to perform under them.

As of June 30, 2024, we have not been asked to perform under them.

As of September 30, 2024, we have no liability recorded as a result of these guarantees as we believe it is not probable we will be required to perform under them.

As of September 30, 2024, we have not been asked to perform under them.

We have made a guarantee related to the financing of four of our joint venture entities that owns debt securities of energy efficiency projects.

We received $ 73 million of the proceeds of this financing arrangement, and in turn have guaranteed the obligations of the entity related to this financing, which includes collateral posting requirements as well as repayment of the financing at maturity in November 2024.

As of June 30, 2024, our maximum obligation under this guarantee is approximately $ 87 million.

As of September 30, 2024, our maximum obligation under this guarantee is approximately $ 87 million.

We believe the likelihood of having to perform under the guarantee is remote, have recorded no liability associated with this guarantee, and presently have not been required to post collateral as the assets of the joint venture entities are enough to support the financing obligation.

We have executed a separate agreement with our joint venture partner pursuant to which it is liable for 15 % of this obligation repayable to us.

We recorded an income tax (expense) benefit of approximately $( 10 ) million and $( 57 ) million for the three and six months ended June 30, 2024, compared to a $ 2 million and $ 0.2 million income tax (expense) benefit in the three and six months ended June 30, 2023.

For the three and six months ended June 30, 2024 and 2023, our income tax (expense) benefit was determined using the federal tax rate of 21%, and combined state tax rates, net of federal benefit, of approximately 4 % for 2024 and 3 % for 2023.

We recorded an income tax (expense) benefit of approximately $ 7 million and $( 49 ) million for the three and nine months ended September 30, 2024, compared to a $ 5 million and $ 5 million income tax (expense) benefit in the three and nine months ended September 30, 2023.

For the three and nine months ended September 30, 2024 and 2023, our income tax (expense) benefit was determined using the federal tax rate of 21%, and combined state tax rates, net of federal benefit, of approximately 4 % for 2024 and 3 % for 2023.

Dividends and Distributions

9 unchanged sentences

8/1/2024 10/4/2024 10/18/2024 $ 0.415

11/7/2024 12/30/2024 01/10/2025 $ 0.415

(1) This dividend is treated as a distribution in the year following the record date for tax purposes.

1 unchanged sentence

We have an effective universal shelf registration statement registering the potential offer and sale, from time to time and in one or more offerings, of any combination of our common stock, preferred stock, depositary shares, debt securities, warrants and rights (collectively referred to as the “securities”).

We may offer the securities directly, through agents, or to or through underwriters by means of ordinary brokers’ transactions on the NYSE or otherwise at market prices prevailing at the time of sale or at negotiated prices and may include “at the market” (“ATM”) offerings to or through a market maker or into an existing trading market on an exchange or otherwise.We have a dividend reinvestment and stock purchase plan, allowing stockholders and holders of OP Units (including LTIP Units) to purchase shares of our common stock by reinvesting cash dividends or distributions received.

We have a dividend reinvestment and stock purchase plan, allowing stockholders and holders of OP Units (including LTIP Units) to purchase shares of our common stock by reinvesting cash dividends or distributions received.

We completed the following public offerings (including ATM issuances) of our common stock during 2024 and 2023:

9 unchanged sentences

Q2 2024 ATM 1.662 31.42 (3)

Q3 2024 ATM 3.040 32.55 (3)

(1) Net proceeds from the offerings are shown after deducting underwriting discounts and commissions.

4 unchanged sentences

We have issued equity awards that vest from 2024 to 2028 subject to service, performance and market conditions.

During the six months ended June 30, 2024, our board of directors awarded employees and directors 777,160 shares of restricted stock, restricted stock units and LTIP Units that vest from 2025 to 2028.

During the nine months ended September 30, 2024, our board of directors awarded employees and directors 798,160 shares of restricted stock, restricted stock units and LTIP Units that vest from 2025 to 2028.

Refer to Note 4 to our financial statements in this Form 10-Q for background on the LTIP Units.

For the three and six months ended June 30, 2024 we recorded $ 8 million and $ 15 million of stock based compensation, respectively, compared to $ 4 million and $ 11 million during the three and six months ended June 30, 2023, respectively.

For the three and nine months ended September 30, 2024 we recorded $ 4 million and $ 19 million of stock based compensation, respectively, compared to $ 3 million and $ 15 million during the three and nine months ended September 30, 2023, respectively.

We have a retirement policy which provides for full vesting at retirement of any time-based awards that were granted prior to the date of retirement and permits the vesting of market-based or performance-based awards that were granted prior to the date of retirement according to the original vesting schedule of the award, subject to the achievement of the applicable market or performance measures.

Employees are eligible for the retirement policy upon meeting age and years of service criteria.

The total unrecognized compensation expense related to awards of shares of restricted stock and restricted stock units was approximately $ 27 million as of June 30, 2024.

The total unrecognized compensation expense related to awards of shares of restricted stock and restricted stock units was approximately $ 24 million as of September 30, 2024.

We expect to recognize compensation expense related to our equity awards over a weighted-average term of approximately 2 years.

10 unchanged sentences

Forfeited ( 3,399 ) 27.55 ( 0.1 )

Ending Balance — June 30, 2024 297,452 $ 28.35 $ 8.4

Ending Balance — September 30, 2024 313,152 $ 28.48 $ 8.9

A summary of the unvested shares of restricted stock units that have market-based vesting conditions that have been issued is as follows:

11 unchanged sentences

Forfeited ( 15,480 ) 68.81 ( 1.1 )

Ending Balance — June 30, 2024 79,790 $ 44.40 $ 3.6

Ending Balance — September 30, 2024 79,174 $ 44.43 $ 3.5

(1) As discussed in Note 2, restricted stock units with market-based vesting conditions can vest between 0 % and 200 % subject to both the absolute performance of the Company's common stock as well as relative performance compared to a group of peers.

12 unchanged sentences

Forfeited — — —

Ending Balance — June 30, 2024 560,971 $ 29.99 $ 16.9

Ending Balance — September 30, 2024 560,971 $ 29.99 $ 16.9

(1) See Note 4 for information on the vesting of LTIP Units.

12 unchanged sentences

Forfeited ( 86,274 ) 65.28 ( 5.6 )

Ending Balance — June 30, 2024 535,608 $ 42.87 $ 23.0

Ending Balance — September 30, 2024 535,608 $ 42.87 $ 23.0

(1) See Note 4 for information on the vesting of LTIP Units.

9 unchanged sentences

Forfeited — — —

Ending Balance — June 30, 2024 128,024 $ 25.96 $ 3.3

Ending Balance — September 30, 2024 128,024 $ 25.96 $ 3.3

(1) See Note 4 for information on the vesting of LTIP Units.

2 unchanged sentences

NOL Stockholder Rights Plan

As of June 30, 2024, we had a Tax Benefits Preservation Plan (“the Plan”), which is designed to protect our tax benefits in connection with any “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986.

In 2023, we established a Tax Benefits Preservation Plan (“the Plan”), which was designed to protect our tax benefits in connection with any “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986.

Under the Plan, we declared a dividend distribution of one right (a “Right”) for each outstanding share of our common stock to be paid to all record holders of our common stock at the close of business on November 21, 2023.

The Plan is intended to reduce the risk that our ability to use net operating losses (“NOLs”) and certain other Tax Benefits will become substantially limited as the result of an “ownership change”.

The Plan was intended to reduce the risk that our ability to use net operating losses (“NOLs”) and certain other Tax Benefits would have become substantially limited as the result of an “ownership change”.

As of December 31, 2023, we had approximately $ 666 million of NOLs and $ 31 million of tax credits available that may be used to offset future taxable income.

4 unchanged sentences

Under the Plan, the Board had the ability to determine in its sole discretion that any person shall not be deemed an acquiring person and therefore that the Rights shall not become exercisable if such person becomes a 5 % stockholder.

The adoption of the Plan and the dividend distribution did not, and the termination of the plan will not, have an impact on our consolidated financial statements.

The adoption and termination of the Plan and the dividend distribution did not have an impact on our consolidated financial statements.

Earnings per Share of Common Stock

4 unchanged sentences

The computation of basic and diluted earnings per common share of our common stock is as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

15 unchanged sentences

Weighted-average number of OP units 1,608,735 1,365,040 1,510,634 1,294,511

As of June 30, 2024 As of June 30, 2023

As of September 30, 2024 As of September 30, 2023

Participating securities:

Unvested restricted common stock and unvested LTIP Units with time-based vesting conditions outstanding at period end 874,124 613,373

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

6 unchanged sentences

Equity Method Investments

We recognized income from our equity method investments of approximately $ 27 million and $ 185 million during the three and six months ended June 30, 2024, respectively, compared to $ 2 million and $ 25 million during the three and six months ended June 30, 2023, respectively.

We recognized income from our equity method investments of approximately $( 23 ) million and $ 162 million during the three and nine months ended September 30, 2024, respectively, compared to $ 3 million and $ 27 million during the three and nine months ended September 30, 2023, respectively.

We describe our accounting for non-controlling equity investments in Note 2.

As of June 30, 2024 and December 31, 2023, we had 47 and 46 investments, respectively, which we accounted for under the equity method.

As of September 30, 2024 and December 31, 2023, we had 47 and 46 investments, respectively, which we accounted for under the equity method.

The majority of these investees are limited liability companies taxed as partnerships wherein we participate in cash distributions and tax attributes according to pre-negotiated profit-sharing arrangements.

10 unchanged sentences

Balance Sheet

As of March 31, 2024

As of June 30, 2024

Current assets $ 59 $ 68 $ 1,036 $ 1,163

10 unchanged sentences

Income Statement

For the three months ended March 31, 2024

For the six months ended June 30, 2024

Revenue 6 31 489 526

1 unchanged sentence

Net income (loss) ( 95 ) 1 ( 102 ) ( 196 )

For the three months ended March 31, 2023

For the six months ended June 30, 2023

Revenue 59 2 386 447

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements