Management’s Discussion and Analysis of Financial Condition and Results of Operations
−Removed: In this Form 10-Q, unless specifically stated otherwise or the context otherwise indicates, references to “we,” “our,” “us,” and the “Company” refer to HA Sustainable Infrastructure Capital, Inc., a Delaware corporation formerly known as Hannon Armstrong Infrastructure Capital, Inc.
+Added: In this Form 10-Q, unless specifically stated otherwise or the context otherwise indicates, references to “we,” “our,” “us,” and the “Company” refer to HA Sustainable Infrastructure Capital, Inc., a Delaware corporation formerly known as Hannon Armstrong Sustainable Infrastructure Capital, Inc.
prior to July 2, 2024, Hannon Armstrong Sustainable Infrastructure, L.P., and any of our other subsidiaries.
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a range of real assets spanning high-emitting economic sectors other than the power grid such as transportation and fuels in the United States, including renewable natural gas (RNG) plants, transportation fleet enhancements, and ecological restoration projects, among others.
−Removed: We prefer investments in which the assets use proven technology and have a long-term, creditworthy off-taker or counterparties.
+Added: We prefer investments in which the assets use proven technology and have long-term, creditworthy off-takers or counterparties.
For BTM assets, the off-taker or counterparty may be the building owner or occupant, and our investment may be secured by the installed improvements or other real estate rights.
For GC assets, the off-takers or counterparties may be utility or electric users who have entered into contractual commitments, such as power purchase agreements (“PPAs”), to purchase power produced by a renewable energy project at a specified price with potential price escalators for a portion of the project’s estimated life.
−Removed: We completed approximately $260 million and $822 million of transactions during the three and six months ended June 30, 2024, respectively, compared to approximately $426 million and $815 million during the same period in 2023, respectively.
−Removed: As of June 30, 2024, pursuant to our strategy of holding transactions on our balance sheet, we held approximately $6.2 billion of transactions on our balance sheet, which we refer to as our “Portfolio.” As of June 30, 2024, our Portfolio consisted of approximately 500 assets and we seek to manage the diversity of our Portfolio by, among other factors, project type, project operator, type of investment, type of technology, transaction size, geography, obligor and maturity.
+Added: We completed approximately $396 million and $1.2 billion of transactions during the three and nine months ended September 30, 2024, respectively, compared to approximately $973 million and $1.8 billion during the same period in 2023, respectively.
+Added: As of September 30, 2024, pursuant to our strategy of holding transactions on our balance sheet, we held approximately $6.3 billion of transactions on our balance sheet, which we refer to as our “Portfolio.” As of September 30, 2024, our Portfolio consisted of approximately 520 assets and we seek to manage the diversity of our Portfolio by, among other factors, project type, project operator, type of investment, type of technology, transaction size, geography, obligor and maturity.
For those transactions that we choose not to hold on our balance sheet, we transfer all or a portion of the economics of the transaction, typically using securitization trusts, to institutional investors in exchange for cash and/or residual interests in the assets and in some cases, ongoing fees.
−Removed: As of June 30, 2024, we managed approximately $6.8 billion in assets in these securitization trusts or vehicles that are not consolidated on our balance sheet.
−Removed: When combined with our Portfolio, as of June 30, 2024, we manage approximately $13 billion of assets which we refer to as our “Managed Assets”.
+Added: As of September 30, 2024, we managed approximately $6.8 billion in assets in these securitization trusts or vehicles that are not consolidated on our balance sheet.
+Added: When combined with our Portfolio, as of September 30, 2024, we manage approximately $13 billion of assets which we refer to as our “Managed Assets”.
Our equity investments in climate solutions projects are operated by various renewable energy companies or by joint ventures in which we participate.
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Our pipeline of transactions that could potentially close in the next 12 months consists of opportunities in which we will be the lead originator as well as opportunities in which we may participate with other institutional investors.
−Removed: As of June 30, 2024, our pipeline consisted of more than $5.5 billion in new equity, debt and real estate opportunities.
+Added: As of September 30, 2024, our pipeline consisted of more than $5.5 billion in new equity, debt and real estate opportunities.
Of our pipeline, approximately 46% is related to BTM assets and 30% is related to GC assets, with the remainder related to FTN.
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Understanding our accounting policies and the extent to which we make judgments and estimates in applying these policies is integral to understanding our financial statements.
−Removed: We believe the estimates and assumptions used in preparing our financial statements and related footnotes are reasonable and supportable based on the best information available to us as of June 30, 2024.
+Added: We believe the estimates and assumptions used in preparing our financial statements and related footnotes are reasonable and supportable based on the best information available to us as of September 30, 2024.
Various uncertainties may materially impact the accuracy of the estimates and assumptions used in the financial statements and related footnotes and, as a result, actual results may vary significantly from estimates.
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Our Portfolio
−Removed: Our Portfolio totaled approximately $6.2 billion as of June 30, 2024 and included approximately $3.0 billion of BTM assets and approximately $2.4 billion of GC assets, and approximately $0.8 billion of FTN assets.
+Added: Our Portfolio totaled approximately $6.3 billion as of September 30, 2024 and included approximately $3.0 billion of BTM assets and approximately $2.4 billion of GC assets, and approximately $0.9 billion of FTN assets.
Approximately 51% of our Portfolio consisted of unconsolidated equity investments in renewable energy related projects.
Approximately 42% consisted of fixed-rate receivables and debt securities, which are classified as investments on our balance sheet, approximately 5% consisted of floating-rate receivables, and 2% of our Portfolio was real estate leased to renewable energy projects under lease agreements.
−Removed: Our Portfolio consisted of over 500 transactions with an average size of $12 million and the weighted average remaining life of our Portfolio (excluding match-funded transactions) of approximately 17 years as of June 30, 2024.
−Removed: The table below provides details on the interest rate and maturity of our receivables and debt securities as of June 30, 2024:
+Added: Our Portfolio consisted of over 520 transactions with an average size of $12 million and the weighted average remaining life of our Portfolio (excluding match-funded transactions) of approximately 17 years as of September 30, 2024.
+Added: The table below provides details on the interest rate and maturity of our receivables and debt securities as of September 30, 2024:
Balance Maturity
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Fixed-rate investments, interest rates less than 5.00% per annum 7 2033 to 2047
+Added: Fixed-rate investments, interest rates 9.50% or greater per annum
Total receivables and investments $ 2,918
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Our earnings from our equity method investments are not included in this table.
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
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(1) Excludes any loss on debt modification or extinguishment included in interest expense in our income statement.
−Removed: The following table provides a summary of our anticipated principal repayments for our receivables and investments as of June 30, 2024:
+Added: The following table provides a summary of our anticipated principal repayments for our receivables and investments as of September 30, 2024:
Principal payment due by Period
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See Note 6 to our financial statements in this Form 10-Q for information on:
−Removed: • the anticipated maturity dates of our receivables and investments and the weighted average yield for each range of maturities as of June 30, 2024,
−Removed: • the term of our leases and a schedule of our future minimum rental income under our land lease agreements as of June 30, 2024,
+Added: • the anticipated maturity dates of our receivables and investments and the weighted average yield for each range of maturities as of September 30, 2024,
+Added: • the term of our leases and a schedule of our future minimum rental income under our land lease agreements as of September 30, 2024,
• the Performance Ratings of our Portfolio, and
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Results of Operations
−Removed: Comparison of the Three Months Ended June 30, 2024 vs.
−Removed: Three Months Ended June 30, 2023
−Removed: Three months ended June 30,
+Added: Comparison of the Three Months Ended September 30, 2024 vs.
+Added: Three Months Ended September 30, 2023
+Added: Three months ended September 30,
2024 2023 $ Change % Change
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Net income (loss) $ (19,176) $ 21,647 $ (40,823) (189) %
−Removed: • Net income increased by $13 million due to an increase in revenue of $20 million and an increase in income from equity method investments of $25 million, offset by a $19 million increase in total expenses, and a $12 million increase in income tax expense.
−Removed: • Total revenue increased by $20 million due to a $15 million increase in interest income and securitization asset income, driven by a higher average Managed Assets balance and higher average interest rate.
+Added: • Net income decreased by $41 million due to a decrease in revenue of $8 million, a decrease in income from equity method investments of $26 million and an increase in total expenses of $9 million, partially offset by a $2 million increase in income tax benefit.
+Added: • Total revenue decreased by $8 million due to a $15 million decrease in gain on sale income, the result of a change in the mix and volume of assets being securitized.
+Added: Interest and securitization asset income increased $13 million, driven by a higher average receivables and securitization assets balance.
Rental income decreased by $6 million due to the sale of real estate assets in 2023 and 2024.
−Removed: Gain on sale and other income increased by $11 million, driven by a change in the mix and volume of assets being securitized.
• Interest expense increased by $16 million primarily due to a larger average outstanding debt balance and a higher average interest rate.
−Removed: We recorded a $4 million benefit for loss on receivables and securitization assets, driven primarily by a reduction in our reserve related to the contribution of assets into a co-investment vehicle.
−Removed: • Compensation and benefits and general and administrative expenses increased by $5 million primarily due to growth of the company and to a change in our retirement policy, resulting in the acceleration of share-based compensation expense.
−Removed: • Income (loss) from equity method investments using HLBV allocations increased by $25 million primarily due to allocations of income in the current period related to tax credits allocated to other investors.
−Removed: • Income tax expense increased by $12 million primarily due to higher pre-tax book income.
−Removed: Comparison of the Six Months Ended June 30, 2024 vs.
−Removed: Six Months Ended June 30, 2023
−Removed: Six Months Ended June 30,
+Added: We recorded a $1 million provision for loss on receivables and securitization assets, driven primarily by new loans and loan commitments made during the quarter.
+Added: • Compensation and benefits and general and administrative expenses increased by $1 million primarily due to growth of the company.
+Added: • Income (loss) from equity method investments using HLBV allocations decreased by $26 million primarily due to allocations of mark-to-market losses related to power purchase agreements held by certain of the projects in which we have invested.
+Added: • Income tax benefit increased by $2 million primarily due to lower pre-tax book income (loss).
+Added: Comparison of the Nine Months Ended September 30, 2024 vs.
+Added: Nine Months Ended September 30, 2023
+Added: Nine Months Ended September 30,
2024 2023 $ Change % Change
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• Net income increased by $73 million due to an increase in income from equity method investments of $135 million and an increase in total revenue of $49 million, offset by an increase in total expenses of $56 million and an increase in income tax expense of $55 million.
−Removed: • Total revenue increased by $57 million due to a $42 million increase in interest income and securitization income driven by higher Managed Assets.
+Added: • Total revenue increased by $49 million due to a $56 million increase in interest income and securitization income driven by higher receivables and securitization assets balances.
Rental income decreased by $17 million due to the sale of real estate assets in 2023 and 2024.
1 unchanged sentence
• Interest expense increased by $60 million primarily due to a larger average outstanding debt balance and a higher average interest rate.
−Removed: We recorded a benefit for loss on receivables of $2 million driven primarily by a reduction in our reserve related to the contribution of assets into a co-investment vehicle.
+Added: We recorded a benefit for loss on receivables of $1 million driven primarily by a reduction in our reserve related to the contribution of assets into a co-investment vehicle, partially offset by loans and loan commitments made during the period.
• Compensation and benefits and general and administrative expense increased by $9 million primarily due to growth of the company.
−Removed: • Income from equity method investments increased by $161 million primarily due to allocations of income in the current period related to tax credits allocated to other investors in a grid-connected utility-scale solar project, as those tax credits reduced the tax equity investors ongoing claim on the net assets of the project, as well as due to an allocation of income related to mark-to-market income related to a power price derivative held by one of the projects in which we have invested.
+Added: • Income from equity method investments increased by $135 million primarily due to allocations of income related to tax credits allocated to other investors in a grid-connected utility-scale solar project, as those tax credits reduced the tax equity investors ongoing claim on the net assets of the project.
• Income tax expense increased by $55 million primarily due to larger income before income taxes driven primarily by income from equity method investments discussed above.
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We have acquired equity investments in portfolios of projects which have the majority of the distributions payable to more senior investors in the first few years of the project.
−Removed: The following table provides results related to our equity method investments for the three and six months ended June 30, 2024 and 2023.
−Removed: Three months ended June 30, Six months ended June 30,
+Added: The following table provides results related to our equity method investments for the three and nine months ended September 30, 2024 and 2023.
+Added: Three months ended September 30, Nine months ended September 30,
2024 2023 2024 2023
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In addition, our methodology for calculating adjusted earnings may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported adjusted earnings may not be comparable to similar metrics reported by other companies.
−Removed: The table below provides a reconciliation of our GAAP net income (loss) to adjusted earnings for the three and six months ended June 30, 2024 and 2023.
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: The table below provides a reconciliation of our GAAP net income (loss) to adjusted earnings for the three and nine months ended September 30, 2024 and 2023.
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
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1,233 9,792 (944) 12,481
+Added: Loss (gain) on debt modification or extinguishment 953 — 953 —
Amortization of intangibles
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$ 62,624 $ 0.52 $ 68,801 $ 0.62 $ 215,213 $ 1.83 $ 171,605 $ 1.70
+Added: Shares for adjusted earnings per share (5)
+Added: 119,799,985 110,290,640 117,568,734 101,046,485
(1) The per share data reflects the GAAP diluted earnings per share and is the most comparable GAAP measure to our adjusted earnings per share.
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Since we remove GAAP Equity method income for purposes of our Adjusted Earnings metric, we add back the elimination through this adjustment.
−Removed: (4) In addition to these provisions, in the six months ended June 30, 2024, we concluded that an equity method investment along with certain loans we had made to this investee, were not recoverable.
+Added: (4) In addition to these provisions, in the nine months ended September 30, 2024, we concluded that an equity method investment, along with certain loans we had made to this investee, were not recoverable.
The equity method investment and loans had a carrying value of $0 due to the losses already recognized through GAAP income from equity method investments as a result of operating losses sustained by the investee.
−Removed: We have excluded this write-off from Adjusted earnings, as this investment was an investment in a corporate entity which is not a part of our current investment strategy and is immaterial to our Portfolio.
+Added: We have excluded this write-off from Adjusted earnings, as this investment was an investment in a corporate entity which is not a part of our current
+Added: investment strategy and is immaterial to our Portfolio.
The loss associated with this investment is included in our Average Annual Realized Loss on Managed Assets metric disclosed below.
−Removed: (5) Adjusted earnings per share are based on 117,506,065 shares and 116,453,108 shares for the three and six months ended June 30, 2024, respectively, and 99,581,898 shares and 96,441,450 shares for the three and six months ended June 30, 2023, respectively, which represents the weighted average number of fully-diluted shares outstanding including our restricted stock awards, restricted stock units, long-term incentive plan units, and the non-
−Removed: controlling interest in our Operating Partnership.
+Added: (5) Shares used to calculated adjusted earnings per share represents the weighted average number of shares outstanding including our issued unrestricted common shares, restricted stock awards, restricted stock units, long-term incentive plan units, and the non-controlling interest in our Operating Partnership.
We include any potential common stock issuances related to share based compensation units in the amount we believe is reasonably certain to vest.
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The following is a reconciliation of our GAAP-based net investment income to our adjusted net investment income:
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
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Equity method earnings adjustment 59,436 41,034 174,189 113,453
+Added: Loss (gain) on debt modification or extinguishment 953 — 953 —
Amortization of real estate intangibles 3 716 177 2,260
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The following is a reconciliation of our GAAP-based Portfolio to our Managed Assets:
−Removed: June 30, 2024 December 31, 2023
+Added: September 30, 2024 December 31, 2023
(in millions)
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Management uses Cash available for reinvestment in this way, and we believe that our investors use it in a similar fashion.
−Removed: For the year ended, For the year ended, For the six months ended, For the six months ended, For the TTM ended,
−Removed: December 31, 2022 December 31, 2023 June 30, 2024 June 30, 2023 June 30, 2024
+Added: For the year ended, For the year ended, For the nine months ended, For the nine months ended, For the TTM ended,
+Added: December 31, 2022 December 31, 2023 September 30, 2024 September 30, 2023 September 30, 2024
(in thousands)
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(1) Included in Other in the cash provided (used in) investing activities section of our statement of cash flows.
−Removed: For the year ended, For the year ended, For the six months ended, For the six months ended, For the TTM ended,
−Removed: December 31, 2022 December 31, 2023 June 30, 2024 June 30, 2023 June 30, 2024
+Added: For the year ended, For the year ended, For the nine months ended, For the nine months ended, For the TTM ended,
+Added: December 31, 2022 December 31, 2023 September 30, 2024 September 30, 2023 September 30, 2024
(in thousands)
−Removed: Components of adjusted cash flow from operations and plus portfolio collections:
+Added: Components of adjusted cash flow from operations plus portfolio collections:
Cash collected from our Portfolio 424,301 442,322 718,588 346,321 814,589
9 unchanged sentences
(1) Includes cash from the sale of assets on our balance sheet as well as securitization transactions.
−Removed: (2) For the six months and TTM ended June 30, 2024, interest paid includes a $19 million benefit from the settlement of a derivative which was designated as a cash flow hedge.
+Added: (2) For the nine months and TTM ended September 30, 2024, interest paid includes a $19 million benefit from the settlement of a derivative which was designated as a cash flow hedge.
Other Metrics
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Our management uses portfolio yield this way and we believe that our investors use it in a similar fashion to evaluate certain characteristics of our Portfolio compared to our peers, and as such, we believe that the disclosure of portfolio yield is useful to our investors.
−Removed: Our Portfolio totaled approximately $6.2 billion as of June 30, 2024.
−Removed: Unlevered portfolio yield was 8.0% as of June 30, 2024 and 7.9% as of December 31, 2023.
−Removed: See Note 6 to our financial statements and MD&A - Our Business in this Form 10-Q for additional discussion of the characteristics of our portfolio as of June 30, 2024.
+Added: Our Portfolio totaled approximately $6.3 billion as of September 30, 2024.
+Added: Unlevered portfolio yield was 8.1% as of September 30, 2024 and 7.9% as of December 31, 2023.
+Added: See Note 6 to our financial statements and MD&A - Our Business in this Form 10-Q for additional discussion of the characteristics of our portfolio as of September 30, 2024.
Average Annual Realized Loss on Managed Assets
Average Annual Realized Loss on Managed Assets represents the average annual rate of our incurred losses, calculated as the amount of realized losses incurred in each year as a percentage of each year’s average annual Managed Assets.
−Removed: This metric is calculated on the ten year period ending June 30, 2024.
+Added: This metric is calculated on the ten year period ending September 30, 2024.
Incurred losses include both realized losses on equity method investments and realized credit losses on receivables and investments.
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Our management uses it in this way and we believe that our investors use it in a similar fashion to evaluate our investment performance, and as such, we believe that its disclosure is useful to our investors.
−Removed: The table below shows these metrics as of June 30, 2024 is:
+Added: The table below shows these metrics as of September 30, 2024 is:
Average Annual Recognized Loss on Managed Assets (GAAP)
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We then determine the metric tons of carbon emissions avoided per thousand dollars of investments, in a calculation we refer to as CarbonCount, which enables us to measure the impact our investments have on avoiding carbon emissions.
−Removed: We estimate that our investments originated during the quarter ended June 30, 2024, will avoid annual carbon emissions by approximately 60,000 metric tons, equating to a CarbonCount® of 0.26.
+Added: We estimate that our investments originated during the quarter ended September 30, 2024, will avoid annual carbon emissions by approximately 70,000 metric tons, equating to a CarbonCount® of 0.18.
We estimate that our investments made since 2013 have cumulatively avoided annual carbon emissions by over 7 million metric tons.
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Below is a summary of our available liquidity by source:
−Removed: As of June 30, 2024
+Added: As of September 30, 2024
(in millions)
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Total liquidity $ 1,299
−Removed: Capital markets activity during the six months ended June 30, 2024
−Removed: During the six months ended 2024, we increased the available capacity available under our unsecured revolving credit facility to $1.25 billion, and extended the maturity of the facility to April 2028.
+Added: Capital markets activity during the nine months ended September 30, 2024
+Added: During the nine months ended September 30, 2024, we increased the available capacity available under our unsecured revolving credit facility to $1.25 billion, and extended the maturity of the facility to April 2028.
We also extended the maturity of our unsecured term loan facility to April 2027, and used proceeds from the unsecured revolving credit facility to partially prepay our unsecured term loan facility by $275 million.
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Also in June 2024, we established a senior secured credit facility, designed to warehouse climate solutions assets until they achieve key technical milestones, at which point we may consider them for sale to large institutional investors under our established securitization programs.
−Removed: During the six months ended June 30, 2024, we issued $82 million in equity, issued an additional $200 million principal amount of 2027 Senior Unsecured Notes for proceeds of $204 million, and issued $94 million of non-recourse debt secured by equity method investments.
+Added: During the nine months ended September 30, 2024, we issued $181 million in equity, issued an additional $200 million principal amount of 2027 Senior Unsecured Notes for proceeds of $204 million, and issued $94 million of non-recourse debt secured by equity method investments.
+Added: In the quarter ended September 30, 2024, we issued $700 million of senior unsecured notes due 2034 at a yield to maturity of 6.476% and used $400m of the net proceeds from such offering to redeem our 6.00% Senior Notes due 2025, and the remainder to temporarily repay a portion of the outstanding borrowings under our unsecured revolving credit facility.
As discussed in Note 8 to our financial statements in this Form 10-Q, we entered into a strategic partnership with KKR called CarbonCount Holdings 1, LLC (“CCH1”), under which we each have committed to invest $1 billion in climate solutions projects over an 18 month period.
−Removed: Subsequent to June 30, 2024, we issued $700 million of senior unsecured notes due 2034 at a yield to maturity of 6.476% and used the net proceeds from such offering to temporarily repay a portion of the outstanding borrowings under our unsecured revolving credit facility and to redeem our 6.00% Senior Notes due 2025.
Maturities of recourse debt obligations
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For further information on our long-term debt, see Note 8 to our financial statements of this Form 10-Q.
−Removed: As of June 30, 2024, the maturity profile of our recourse debt obligations was as follows:
−Removed: (1) Amounts presented include adjustments for the issuance of the 2034 Notes on July 1, 2024, and the use of proceeds from such offering to redeem our 2025 Notes and to temporarily repay our unsecured revolving credit facility.
+Added: As of September 30, 2024, the maturity profile of our recourse debt obligations was as follows:
Additional borrowings and financial leverage management
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The amount of financial leverage we may deploy for particular assets will depend upon our target capital structure and the availability of particular types of financing and our assessment of the credit, liquidity, price volatility and other risks of such assets, and the interest rate environment.
−Removed: As shown in the table below, our debt to equity ratio was approximately 1.8 to 1 as of June 30, 2024, below our current board-approved leverage limit of up to 2.5 to 1.
−Removed: Our percentage of fixed rate debt including the impact of our interest rate derivatives was approximately 99% as of June 30, 2024, which is within our targeted fixed rate debt percentage range of 75% to 100%.
+Added: As shown in the table below, our debt to equity ratio was approximately 1.8 to 1 as of September 30, 2024, below our current board-approved leverage limit of up to 2.5 to 1.
+Added: Our percentage of fixed rate debt including the impact of our interest rate derivatives was approximately 100% as of September 30, 2024, which is at the top of our targeted fixed rate debt percentage range of 75% to 100%.
Our targeted fixed rate debt range allows for percentages as low as 70% on a short term basis if we intend to repay or swap floating rate borrowings in the near term.
The calculation of our fixed-rate debt and financial leverage is shown in the chart below:
−Removed: June 30, 2024 % of Total December 31, 2023 % of Total
+Added: September 30, 2024 % of Total December 31, 2023 % of Total
(dollars in millions) (dollars in millions)
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The timing and impact of future sales of receivables and investments, if any, cannot be predicted with any certainty.
+Added: We or our affiliates may, at any time and from time to time, seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise.
+Added: Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.
+Added: The amounts involved may be material.
We believe our identified sources of liquidity will be adequate for purposes of meeting our short-term and long-term liquidity needs, which include funding future investments, debt service, operating costs and distributions to our stockholders.
Sources and Uses of Cash
−Removed: We had approximately $161 million and $75 million of unrestricted cash, cash equivalents, and restricted cash as of June 30, 2024 and December 31, 2023, respectively.
−Removed: The following table summarizes our cash flows for the six months ended June 30, 2024 and 2023.
+Added: We had approximately $59 million and $75 million of unrestricted cash, cash equivalents, and restricted cash as of September 30, 2024 and December 31, 2023, respectively.
+Added: The following table summarizes our cash flows for the nine months ended September 30, 2024 and 2023.
See our statements of cash flows for full details on the components of each category of cash flows.
−Removed: As discussed above, Adjusted cash from operations plus other portfolio collections was $632 million for the six months ended June 30, 2024.
−Removed: For the six months ended,
−Removed: June 30, 2024 June 30, 2023
+Added: As discussed above, Adjusted cash from operations plus other portfolio collections was $740 million for the nine months ended September 30, 2024.
+Added: For the nine months ended,
+Added: September 30, 2024 September 30, 2023
(in millions)
4 unchanged sentences
Discussion of changes in cash provided by (used in) operating activities
−Removed: Cash provided by (used in) operating activities for the six months ended June 30, 2024 was $70 million lower than the same period ended June 30, 2023.
+Added: Cash provided by (used in) operating activities for the nine months ended September 30, 2024 was $74 million lower than the same period ended September 30, 2023.
Net income was $73 million higher in the current period, which was offset by higher net negative adjustments to net income of $147 million when compared to the prior period.
Discussion of changes in cash provided by (used in) investing activities
−Removed: Cash provided by (used in) investing activities for the six months ended June 30, 2024 was $873 million higher than the same period ended June 30, 2023.
+Added: Cash provided by (used in) investing activities for the nine months ended September 30, 2024 was $1.4 billion higher than the same period ended September 30, 2023.
This was driven by $341 million higher principal collections from receivables in the current period, $209 million of which was driven by a large, one-time prepayment.
−Removed: We received $92 million more from the sales of receivables in the period ended June 30, 2024 than the same period in the prior year.
−Removed: We invested $261 million less in equity method investments in the period ended June 30, 2024 than the same period in the prior year.
+Added: We received $117 million more from the sales of receivables in the period ended September 30, 2024 than the same period in the prior year.
+Added: We invested $383 million less in equity method investments and $519 million less in receivables and investments in the period ended September 30, 2024 than the same period in the prior year.
Discussion of changes in cash provided by (used in) financing activities
−Removed: Cash provided by (used in) financing activities for the six months ended June 30, 2024 was $693 million lower than the same period ended June 30, 2023, primarily driven by lower borrowings net of principal repayments of approximately $403 million than in the prior period, and lower equity issuances of $276 million.
+Added: Cash provided by (used in) financing activities for the nine months ended September 30, 2024 was $1.4 billion lower than the same period ended September 30, 2023, primarily driven by lower borrowings net of principal repayments of approximately $1 billion than in the prior period, and lower equity issuances of $285 million.
Off-Balance Sheet Arrangements
We have relationships with non-consolidated entities or financial partnerships, such as entities often referred to as structured investment vehicles, or special purpose or variable interest entities, established to facilitate the sale of securitized assets.
−Removed: Other than our securitization assets (including any outstanding servicer advances) of approximately $247 million as of June 30, 2024, that may be at risk in the event of defaults or prepayments in our securitization trusts and as discussed below, and except as disclosed in Note 9 to our financial statements in this Form 10-Q, we have not guaranteed any obligations of non-consolidated entities or entered into any commitment or intent to provide additional funding to any such entities.
+Added: Other than our securitization assets (including any outstanding servicer advances) of approximately $258 million as of September 30, 2024, that may be at risk in the event of defaults or prepayments in our securitization trusts and as discussed below, and except as disclosed in Note 9 to our financial statements in this Form 10-Q, we have not guaranteed any obligations of non-consolidated entities or entered into any commitment or intent to provide additional funding to any such entities.
A more detailed description of our relations with non-consolidated entities can be found in Note 2 to our financial statements in this Form 10-Q.
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Book Value Considerations
−Removed: As of June 30, 2024, we carried only our investments, residual assets in securitized financial assets, and derivatives at fair value on our balance sheet.
+Added: As of September 30, 2024, we carried only our investments, residual assets in securitized financial assets, and derivatives at fair value on our balance sheet.
As a result, in reviewing our book value, there are a number of important factors and limitations to consider.
−Removed: Other than our investments, residual assets in securitized financial assets, and derivatives that are carried on our balance sheet at fair value as of June 30, 2024, the carrying value of our remaining assets and liabilities are calculated as of a particular point in time, which is largely determined at the time such assets and liabilities were added to our balance sheet using a cost basis in accordance with GAAP, adjusted for income or loss recognized on such assets.
+Added: Other than our investments, residual assets in securitized financial assets, and derivatives that are carried on our balance sheet at fair value as of September 30, 2024, the carrying value of our remaining assets and liabilities are calculated as of a particular point in time, which is largely determined at the time such assets and liabilities were added to our balance sheet using a cost basis in accordance with GAAP, adjusted for income or loss recognized on such assets.
Other than the allowance for current expected credit losses applied to our receivables, our remaining assets and liabilities do not incorporate other factors that may have a significant impact on their value, most notably any impact of business activities, changes in estimates, or changes in general economic conditions, interest rates or commodity prices since the dates the assets or liabilities were initially recorded.
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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.