What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-08 compared with 2024-11-08 · 260 added, 386 removed, 850 unchanged (43% of the section changed)

3 unchanged sentences

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

September 30, 2024 (unaudited) December 31, 2023

March 31, 2025 (unaudited) December 31, 2024

Cash and cash equivalents $ 67,390 $ 129,758

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(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

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

2024 2023 2024 2023

For the Three Months Ended March 31,

Interest income $ 66,394 $ 68,692

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Net income (loss) attributable to non-controlling interest holders

440 201 2,367 692

Net income (loss) attributable to controlling stockholders $ 56,612 $ 123,025

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(DOLLARS IN THOUSANDS)

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

2024 2023 2024 2023

Three Months Ended March 31,

Net income (loss) $ 58,185 $ 124,548

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

Unrealized gain (loss) on available-for-sale securities and securitization assets, net of tax benefit (provision) of $( 1.9 ) million for the three months ended March 31, 2025 and $ 1.7 million for the three months ended March 31, 2024

5,430 ( 5,088 )

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

Unrealized gain (loss) on interest rate swaps, net of tax benefit (provision) of $ 2.7 million for the three months ended March 31, 2025 and $( 7.1 ) million for the three months ended March 31, 2024

( 7,895 ) 21,231

1 unchanged sentence

Comprehensive income (loss) attributable to non-controlling interest holders

( 18 ) 917 2,267 1,465

Comprehensive income (loss) attributable to controlling stockholders $ 54,187 $ 138,971

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Shares Amount

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 )

Unrealized gain (loss) on available-for-sale securities and securitization assets — — — — 13,357 190 13,547

Unrealized gain (loss) on interest rate swaps — — — — ( 46,872 ) ( 648 ) ( 47,520 )

Issued shares of common stock 3,041 30 97,678 — — — 97,708

Equity-based compensation — — 1,118 — — 3,001 4,119

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

Balance at December 31, 2024

118,960 $ 1,190 $ 2,592,964 $ ( 297,499 ) $ 40,101 $ 68,319 $ 2,405,075

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

Net income (loss) — — — 56,612 — 1,573 58,185

4 unchanged sentences

Issuance (repurchase) of vested equity-based compensation shares 20 — ( 393 ) — — — ( 393 )

Purchase of capped calls

— — 3,097 — — — 3,097

Dividends and distributions — — — ( 51,008 ) — ( 1,038 ) ( 52,046 )

Balance at September 30, 2023

Balance at March 31, 2025

120,709 $ 1,207 $ 2,646,415 $ ( 291,895 ) $ 37,675 $ 77,342 $ 2,470,744

See accompanying notes.

Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Non-controlling interests Total

Shares Amount

Balance at December 31, 2023

Net income (loss)

112,174 $ 1,122 $ 2,381,510 $ ( 303,536 ) $ 13,165 $ 49,364 $ 2,141,625

Unrealized gain (loss) on available-for-sale securities and securitization assets — — — — 3,830 67 3,897

Unrealized gain (loss) on interest rate swaps — — — — ( 9,458 ) ( 166 ) ( 9,624 )

Issued shares of common stock 5,997 60 182,119 — — — 182,179

Equity-based compensation — — 3,145 — — 15,857 19,002

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 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

Net income (loss) — — — 123,025 — 1,523 124,548

— — — 59,075 — 692 59,767

Unrealized gain (loss) on available-for-sale securities and securitization assets — — — — ( 5,025 ) ( 63 ) ( 5,088 )

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Issuance (repurchase) of vested equity-based compensation shares 9 — ( 158 ) — — — ( 158 )

Conversion of convertible notes — — 2 — — — 2

Purchase of capped calls

— — ( 37,835 ) — — — ( 37,835 )

Dividends and distributions — — — ( 47,309 ) — ( 879 ) ( 48,188 )

Balance at September 30, 2023

Balance at March 31, 2024

113,476 $ 1,135 $ 2,415,118 $ ( 227,820 ) $ 29,111 $ 55,871 $ 2,273,415

3 unchanged sentences

(DOLLARS IN THOUSANDS)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities

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Change in accrued interest on receivables and investments ( 20,810 ) ( 17,709 )

Cash received (paid) upon hedge settlement 19,261 —

Other ( 2,424 ) 10,364

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Equity method investment distributions received 7,642 3,762

Proceeds from sales of equity method investments 2,107 —

Purchases of and investments in receivables ( 137,596 ) ( 230,885 )

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Proceeds from sale of real estate — 115,767

Purchases of investments and securitization assets ( 10,537 ) ( 14,404 )

Posting of hedge collateral ( 26,380 ) —

Receipt of hedge collateral 16,150 —

Collateral provided to hedge counterparties

Collateral received from hedge counterparties

Other 3,214 ( 450 )

3 unchanged sentences

Principal payments on credit facilities ( 25,000 ) ( 450,000 )

Proceeds from issuance of term loan 250,000 200,000

Principal payments on term loan ( 5,437 ) ( 35,339 )

2 unchanged sentences

( 4,348 ) ( 68,910 )

Proceeds from issuance of commercial paper notes — 49,775

Principal payments on commercial paper notes

Proceeds from (repayments of) commercial paper notes

331,000 35,000

Proceeds from issuance of senior unsecured notes — 205,500

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 46,614 30,386

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Payment of financing costs ( 634 ) ( 7,498 )

Posting of hedge collateral ( 134,150 ) —

Receipt of hedge collateral 124,700 106,330

Collateral provided to hedge counterparties

( 45,270 ) ( 24,900 )

Collateral received from hedge counterparties

27,000 69,000

Other ( 3,860 ) ( 725 )

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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 —

Deconsolidation of non-recourse debt — 51,233

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

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

prior to July 2, 2024 (the “Company”), actively partners with clients to deploy real assets that facilitate the energy transition, which we refer to as “climate solutions”.

March 31, 2025

HA Sustainable Infrastructure Capital, Inc.

(the “Company”), actively partners with clients to deploy real assets that facilitate the energy transition.

Our investments take various forms, including equity, joint ventures, land ownership, lending, and other financing transactions.

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We also generate recurring income through our residual ownership in securitization and syndication structures.

The Company and its subsidiaries are hereafter referred to as “we,” “us” or “our.” We refer to the income producing assets that we hold on our balance sheet as our “Portfolio.” Our Portfolio includes equity investments in either preferred or common structures in unconsolidated entities and receivables and debt securities.

We finance our business through cash on hand, recourse and non-recourse debt, convertible securities, or equity issuances and may also decide to finance such transactions through the use of off-balance sheet securitization or syndication structures.

The Company and its subsidiaries are hereafter referred to as “we,” “us” or “our.” We refer to the income-producing assets that we hold on our balance sheet as our “Portfolio.” Our Portfolio includes equity investments in either preferred or common structures in unconsolidated entities, receivables, and debt securities.

We finance our business through cash on hand, secured and unsecured debt, convertible securities, or equity issuances and may also decide to finance such transactions through the use of off-balance sheet securitization or syndication structures.

Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “HASI.” We intend to continue to operate our business in a manner that will maintain our exemption from registration as an investment company under the Investment Company Act of 1940 (the “1940 Act”), as amended.

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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 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.

Our results of operations for the three-month periods ended March 31, 2025 and 2024, 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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We have established various special purpose entities or securitization trusts for the purpose of securitizing certain assets that are not consolidated in our financial statements as described below in Securitization of Financial Assets.

Since we have assessed that we have power over and receive the benefits from those special purpose entities that are formed for the purpose of holding our assets on our balance sheet, we have concluded we are the primary beneficiary and

should consolidate these entities under the provisions of ASC 810.

We also have certain subsidiaries we deem to be voting interest entities that we control through our ownership of voting interests and accordingly consolidate.

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Once the preferred return, if applicable, is achieved, the partnership “flips” and common equity investors, often the operator of the project, receive a larger portion of the cash flows, with the previously preferred investors retaining an on-going residual interest.

Our equity investments in climate solutions projects are accounted for under the equity method of accounting.

Under the equity method of accounting, the carrying value of these equity method investments is determined based on amounts we invested, adjusted for the earnings or losses of the investee allocated to us based on the LLC agreement, less distributions received.

We generally conclude that investments where the LLC agreements contain preferences with regard to cash flows from operations, capital events and liquidation contain substantive profit sharing arrangements, so we accordingly reflect our share of profits and losses by determining the difference between our claim on the investee’s reported book value at the beginning and the end of the period, which is adjusted for distributions received and contributions made during the period.

Our equity investments are accounted for under the equity method of accounting.

Under the equity method of accounting, the carrying value of these equity method investments is determined based on amounts we invested, adjusted for earnings or losses of the investee allocated to us based on the LLC agreement, less distributions received.

We generally conclude that investments where the LLC agreements contain preferences with regard to cash flows from operations, capital events or liquidation are considered substantive profit sharing arrangements, so we accordingly reflect our share of profits and losses by determining the difference between our claim on the investee’s reported book value at the beginning and the end of the period, which is adjusted for distributions received and contributions made during the period.

This claim is calculated as the amount we would receive if the investee were to liquidate all of its assets at the recorded amounts determined in accordance with GAAP and distribute the resulting cash to creditors and investors in accordance with their respective priorities.

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and other factors.

Receivables include project loans and receivables, and are separately presented in our balance sheet to illustrate the differing nature of the credit risk related to these assets.

Receivables include project loans and receivables.

Unless otherwise noted, we generally have the ability and intent to hold our receivables for the foreseeable future and accordingly we classify them as held for investment.

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At inception of the arrangement, the carrying value of receivables held for investment represents the present value of the note, lease or other payments, net of any unearned fee income, which is recognized as income over the term of the note or lease using the effective interest method.

Receivables that are held for investment are carried at amortized cost, net of

any unamortized acquisition premiums or discounts and include origination and acquisition costs, as applicable.

Receivables that are held for investment are carried at amortized cost, net of any unamortized acquisition premiums or discounts and include origination and acquisition costs, as applicable.

Our initial investment and principal repayments of these receivables are classified as investing activities and the interest collected is classified as operating activities in our consolidated statements of cash flows.

Receivables that we intend to sell in the short-term are classified as held-for-sale and are carried at the lower of amortized cost or fair value on our balance sheet, which is assessed on an individual asset basis.

The purchases and proceeds from receivables that we intend to sell at origination are classified as operating activities in our consolidated statements of cash flows.

The purchases and proceeds from receivables that we intend to sell at origination are

classified as operating activities in our consolidated statements of cash flows.

Interest collected is classified as an operating activity in our consolidated statements of cash flows.

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The change in PIK in any period is included in Change in accrued interest on receivables and investments in the operating section of our statement of cash flows.

We evaluate our receivables for an allowance as determined under ASC Topic 326 Financial Instruments- Credit Losses (“Topic 326”) and for our internally derived asset performance categories included in Note 6 to our financial statements in this Form 10-Q on at least a quarterly basis and more frequently when economic or other conditions warrant such an evaluation.

We may enter into real estate transactions which may be characterized as “failed sale-leaseback” transactions as defined under ASC Topic 842, Leases , and thus are accounted for as financing transactions similarly to our receivables as described herein.

We evaluate our receivables for an allowance as determined under ASC Topic 326 Financial Instruments- Credit Losses (“Topic 326”) and for our internally derived asset performance categories included in Note 6 to our financial statements on at least a quarterly basis and more frequently when economic or other conditions warrant such an evaluation.

When a receivable becomes 90 days or more past due, and if we otherwise do not expect the debtor to be able to service all of its debt or other obligations, we will generally consider the receivable delinquent or impaired and place the receivable on non-accrual status and cease recognizing income from that receivable until the borrower has demonstrated the ability and intent to pay contractual amounts due.

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In developing our forecasts, we consider a number of qualitative and quantitative factors in our assessment, which may include a project’s operating results, loan-to-value ratio, any cash reserves held by the project, the ability of expected cash from operations to cover the cash flow requirements currently and into the future, key terms of the transaction, the ability of the borrower to refinance the transaction, other credit support from the sponsor or guarantor and the project’s collateral value.

In addition, we consider the overall economic environment, the climate solutions sector, the effect of local, industry, and broader economic factors, such as unemployment rates and power prices, the impact of any variation in weather and the historical and anticipated trends in interest rates, defaults and loss severities for similar transactions.

In addition, we consider the overall economic environment, the sectors in which we invest, the effect of local, industry, and broader economic factors, such as unemployment rates and power prices, the impact of any variation in weather and the historical and anticipated trends in interest rates, defaults and loss severities for similar transactions.

For assets where the obligor is a publicly rated entity, we consider the published historical performance of entities with similar ratings in developing our estimate of an allowance, making adjustments determined by management to be appropriate during the reasonable and supportable forecast period.

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Any provision we record for an allowance is a non-cash reconciling item to cash from operating activities in our consolidated statements of cash flows.

Real estate consists of land or other real property and its related lease intangibles, net of accumulated amortization.

Our real estate is generally leased to tenants on a triple net lease basis, whereby the tenant is responsible for all operating expenses relating to the property, generally including property taxes, insurance, maintenance, repairs and capital expenditures.

Certain real estate transactions may be characterized as “failed sale-leaseback” transactions as defined under ASC Topic 842, Leases , and thus are accounted for as financing transactions similarly to our receivables as described above in Receivables.

For our real estate lease transactions that are classified as operating leases, the scheduled rental revenue typically varies during the lease term and thus rental income is recognized on a straight-line basis, unless there is considerable risk as to collectability, so as to produce a constant periodic rent over the term of the lease.

Accrued rental income is the aggregate difference between the scheduled rents that vary during the lease term and the income recognized on a straight-line basis and is recorded in other assets.

Expenses, if any, related to the ongoing operation of leases where we are the lessor, are charged to

operations as incurred.

Our initial investment is classified as investing activities and income collected for rental income is classified as operating activities in our consolidated statements of cash flows.

When our real estate transactions are treated as an asset acquisition with an operating lease, we typically record our real estate purchases at cost, including acquisition and closing costs, which is allocated to each tangible and intangible asset acquired on a relative fair value basis.

Securitization of Assets

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Derivatives are recorded at fair value.

If a derivative is designated as a cash flow hedge and meets the highly effective threshold, the change in the fair value of the derivative is recorded in AOCI, net of associated deferred income tax effects and is recognized in earnings along with the income tax effect at the same time as the hedged item, which is when interest expense is recognized.

Any amounts in AOCI are recognized in earnings along with the income tax effect at the same time as the hedged item, which is when interest expense is recognized.

For any derivative instruments not designated as hedging instruments, changes in fair value would be recognized in earnings in the period that the change occurs.

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These transactions are freestanding equity-linked derivative instruments that qualify for the exemption for contracts indexed to, and settled in, an issuer’s own equity found in ASC 815, and accordingly the payment of the option premium was recorded as a reduction of Additional Paid-in-Capital within our Statement of Stockholders’ Equity.

We elected and qualified to be taxed as a REIT for U.S.

federal income tax purposes, commencing with our taxable year ended December 31, 2013, through our taxable year ended December 31, 2023.

We have revoked our REIT election effective January 1, 2024 and beginning in taxable year 2024 are taxed as a taxable C Corporation.

For tax years 2023 and prior, we had taxable REIT subsidiaries (“TRS”) that were taxed separately, and that were generally subject to U.S.

federal, state and local income taxes.

To qualify as a REIT, we were required to meet on an ongoing basis several organizational and operational requirements, including a requirement that we distribute at least 90% of our REIT’s net taxable income before dividends paid, excluding capital gains, to our stockholders each year.

As a REIT, for tax years ended December 31, 2023 and earlier, we were not subject to U.S.

federal corporate income tax on that portion of net income that was distributed to our owners in accordance with the REIT rules.

Subsequent to our REIT status revocation, all of our net taxable income is subject to U.S.

federal and state income tax at the applicable corporate tax rate, and dividends paid to stockholders are no longer tax deductible.

We account for income taxes under ASC 740, Income Taxes (“ASC 740”) using the asset and liability method.

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We have adopted equity incentive plans which provide for grants of stock options, stock appreciation rights, restricted stock units, shares of restricted common stock, phantom shares, dividend equivalent rights, long-term incentive-plan units (“LTIP Units”) and other restricted limited partnership units issued by our Operating Partnership and other equity-based awards.

From time to time, we may grant equity or equity-based awards as compensation to our senior management team, independent directors, employees, advisors, consultants and other personnel.

From time to time, we may grant equity or equity-based awards as compensation to our independent directors, employees, advisors, consultants and other personnel.

Certain awards earned under each plan are based on achieving various performance or market targets, which are generally earned between 0 % and 200 % of the initial target, depending on the extent to which the performance or market target is met.

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We record compensation expense for grants made in accordance with ASC 718, Compensation-Stock Compensation .

We record compensation expense for unvested grants that vest solely based on service conditions on a straight-line basis over the vesting period of the entire award based upon the fair market value of the grant on the date of grant.

We record compensation expense for unvested grants that vest solely based on service conditions on a straight-line basis over the

vesting period of the entire award based upon the fair market value of the grant on the date of grant.

Fair market value for restricted common stock is based on our share price on the date of grant.

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The fair value of these awards, as measured at the grant date, is recognized over the requisite service period, even if the market conditions are not met.

The grant date fair value of these awards was developed by an independent appraiser using a Monte Carlo simulation.

The grant date fair value of these awards is developed by an independent appraiser using a Monte Carlo simulation.

Forfeitures of unvested awards are recognized as they occur.

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We compute earnings per share of common stock in accordance with ASC 260, Earnings Per Share .

Basic earnings per share is calculated by dividing net income attributable to controlling stockholders (after consideration of the earnings allocated to unvested grants, if applicable) by the weighted-average number of shares of common stock outstanding during the period excluding the weighted average number of unvested grants, if applicable (“participating securities” as defined in Note 12 to our financial statements in this Form 10-Q).

Diluted earnings per share is calculated by dividing net income attributable to controlling stockholders (after consideration of the earnings allocated to unvested grants, if applicable) by the weighted-average number of shares of common stock outstanding during the period plus other potential common stock instruments if they are dilutive.

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Segment Reporting

We manage our business as a single portfolio, and report all of our activities as one business segment.

We manage our business as a single portfolio which we originate from a single pipeline, and accordingly we report all of our activities as one reportable segment.

Our single reportable segment generates net investment and equity method investment income through investments in energy transition assets and infrastructure projects, as well as revenue through the gain on sale of assets and recurring asset management fees.

The consolidated financial statements presented herein reflect the activities of our single reportable segment, and the accounting policies of our single reportable segment are those found here in this Note 2.

Our chief operating decision maker (“CODM”) is our chief executive officer.

The CODM assesses performance for this segment and decides how to allocate resources based in part on net income as recorded in our income statement.

Included in this metric are the significant segment expenses reviewed by the CODM, which include interest expense, compensation and benefits, and general and administrative, each of which is reported in our income statement.

We do not have material intra-company sales or transfers.

In evaluating segment assets, the CODM uses receivables, equity method investments, real estate, and investments as reported on our balance sheet, which together we refer to as our Portfolio.

Amounts invested in such assets can be found in our statement of cash flows.

Segment asset amounts are used by the CODM when evaluating the return on investment on our Portfolio.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

2023-07 amended the existing segment reporting requirements by requiring disclosure of the significant segment expenses based on how management internally views segment information and by allowing the disclosure of more than one measure of segment profit or loss, as well as by expanding the interim period segment requirements.

The ASU also requires single-reportable segment entities to report the disclosures required under ASC Topic 280, Segment Reporting .

2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Upon adoption of ASU No.

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

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.

Accounting standards updates issued before May 8, 2025, and effective after March 31, 2025, 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 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.

As of March 31, 2025 and December 31, 2024, 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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• Level 3 — Unobservable inputs are used when little or no market data is available.

The tables below illustrate the estimated fair value of our financial instruments on our balance sheet.

The tables below state the estimated fair value of our financial instruments on our balance sheet.

Unless otherwise discussed below, fair values for our Level 2 and Level 3 measurements are measured using a discounted cash flow model, contractual terms and inputs which consist of base interest rates and spreads over base rates which are based upon market observation and recent comparable transactions.

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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 September 30, 2024

As of March 31, 2025

Fair Value Carrying

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Investments (1)

18 18 Level 3

Securitization residual assets (2)

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Liabilities (3)

Credit facilities $ 116 $ 116 Level 3

Commercial paper notes 430 430 Level 3

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Derivative liabilities 6 6 Level 2

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

(1) The amortized cost of our investments as of March 31, 2025, was $ 8 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 September 30, 2024 was $ 289 million.

The amortized cost of our securitization residual assets net of allowance for credit losses as of March 31, 2025 was $ 310 million.

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

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

The amortized cost of our securitization residual assets as of December 31, 2023, was $ 258 million.

The amortized cost of our securitization residual assets net of allowance for credit losses as of December 31, 2024, was $ 301 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 September 30, For the nine months ended September 30,

2024 2023 2024 2023

For the three months ended March 31,

(in millions)

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Balance, end of period $ 265 $ 220

The following table illustrates our securitization residual assets in an unrealized loss position:

We had the following securitization residual assets in an unrealized loss position:

Estimated Fair Value Unrealized Losses (1)

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(in millions)

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

March 31, 2025 $ 46 $ 159 $ 2 $ 48 19 71

December 31, 2024 67 152 4 52 28 69

(1) Other than the assets for which there is a reserve as discussed in Note 5, loss positions are due to interest rates movements and is not indicative of credit deterioration.

(1) Other than the assets for which there is a reserve as discussed in Note 5, loss positions are due to interest rates movements and are not indicative of credit deterioration.

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 September 30, 2024 and December 31, 2023.

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.

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 based upon transactions involving similar assets of approximately 1 % to 5 % as of March 31, 2025 and 1 % to 6 % as of December 31, 2024.

The weighted average discount rates used to determine the fair value of our securitization residual assets as of March 31, 2025 and December 31, 2024 were 6.9 % and 7.3 %, respectively.

Non-recurring Fair Value Measurements

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(in millions)

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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 nine months ended September 30, 2024 or September 30, 2023.

No OP units were redeemed by non-controlling interest holders during the three months ended March 31, 2025 or March 31, 2024.

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

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The LTIP Units are designed to qualify as profits interests in the Operating Partnership and initially will have a capital account balance of zero and, therefore, will not have full parity with OP units with respect to liquidating distributions or other rights.

However, the amended and restated agreement of limited partnership of the Operating Partnership (the “OP Agreement”) provides that “book gains,” or economic appreciation, in the Operating Partnership will be allocated first to the LTIP Units until the capital account per LTIP Units is equal to the capital account per-unit of the OP units.

However, the second amended and restated agreement of limited partnership of the Operating Partnership (the “OP Agreement”) provides that “book gains,” or economic appreciation, in the Operating Partnership will be allocated first to the LTIP Units until the capital account per LTIP Units is equal to the capital account per-unit of the OP units.

Under the terms of the OP Agreement, the Operating Partnership will revalue its assets upon the occurrence of certain specified events, and any increase in valuation from the time of grant until such event will be allocated first to the holders of LTIP Units to equalize the capital accounts of such holders with the capital accounts of OP unit holders.

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The following summarizes certain transactions with securitization trusts:

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

2024 2023 2024 2023

For the Three Months Ended March 31,

(in millions)

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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 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.

Depending on the nature of the transaction risks, the all-in discount rate ranged from 5.8 % to 7.0 % for the three months ended March 31, 2025.

As of March 31, 2025 and December 31, 2024, our managed assets totaled $ 14.5 billion and $ 13.7 billion, respectively, of which $ 7.4 billion and $ 7.1 billion, respectively, were securitized assets held in unconsolidated securitization trusts or other investors’ portions of assets held in co-investment structures.

As of March 31, 2025 and December 31, 2024, the securitization trusts held $ 6.4 billion and $ 6.2 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 September 30, 2024 Three months ended September 30, 2023

Government Commercial Government Commercial

(in millions)

Beginning balance $ — $ 3 $ — $ —

Provision for loss on securitization assets — — — 3

Ending balance $ — $ 3 $ — $ 3

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

Three months ended March 31, 2025 Three months ended March 31, 2024

Government Commercial Government Commercial

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Ending balance $ — $ 3 $ — $ 3

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.

As of March 31, 2025, 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 47 % of our securitization residual assets.

These technologies are installed in facilities owned by, or operated for or by, federal, state or local government entities where the ultimate obligor for the receivable is a governmental entity.

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Our Portfolio

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.

As of March 31, 2025, our Portfolio included approximately $ 7.1 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 energy transition projects.

The receivables and investments are typically collateralized by contractually committed debt obligations of government entities or private high credit quality obligors and are often supported by additional forms of credit enhancement, including security interests and supplier guaranties.

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In developing and evaluating performance against our credit criteria, we consider a number of qualitative and quantitative criteria which may include a project’s operating results, loan-to-value ratio, any cash reserves, the ability of expected cash from operations to cover the cash flow requirements currently and into the future, key terms of the transaction, the ability of the borrower to refinance the transaction, the financial and operating capability of the borrower, its sponsors or the obligor as well as any guarantors and the project’s collateral value.

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 September 30, 2024, which is assessed quarterly:

In addition, we consider the overall economic environment, the sectors in which we invest, 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 March 31, 2025, which is assessed quarterly:

Portfolio Performance

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Prior to 2020

481 33 — — 514

Total receivables held-for-investment 2,982 33 — — 3,015

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(3) This category includes our assets where based on our credit criteria and performance to date, we believe there is substantial doubt regarding our ability to recover some or all of our invested capital.

Loans in this category are placed on non-accrual status.

(4) Receivable vintage refers to the period in which the relevant loan agreement is signed, and a given vintage may contain loan advances made in periods subsequent to the period in which the loan agreement was signed.

Receivables or investments in this category are placed on non-accrual status.

(4) Receivable vintage refers to the period in which the relevant agreement is signed, and a given vintage may contain advances made in periods subsequent to the period in which the agreement was signed.

(5) Some of the individual projects included in portfolios that make up our equity method investments have government off-takers.

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

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

As of March 31, 2025, our allowance for losses on receivables was $ 54 million based on our expectation of credit losses over the lives of the receivables in our portfolio.

During the three months ended March 31, 2025, we increased our reserve by approximately $ 4 million, driven primarily by changes in macroeconomic assumptions used to predict future credit losses.

Below is a summary of the carrying value of our receivables held-for-investment, loan funding commitments, and allowance by type of receivable or “Portfolio Segment”, as defined by Topic 326, as of March 31, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024

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

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Total $ 3,015 $ 418 $ 54 $ 2,946 $ 545 $ 50

(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.

(1) As of March 31, 2025, 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.

Risk characteristics of our commercial receivables include a project’s operating risks, which include the impact of the overall economic environment, the sectors in which we invest, the effect of local, industry, and broader economic factors, the impact of any variation in weather and trends in interest rates.

We use assumptions related to these risks to estimate an allowance using a discounted cash flow analysis or the PD/LGD method as discussed in Note 2 to our financial statements in this Form 10-Q.

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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 $ 54 million allowance on these $ 3.0 billion in assets as a result of lower probability assumptions utilized in our allowance methodology.

(2) As of September 30, 2024, our government receivables include $ 7 million of U.S.

(2) As of March 31, 2025, our government receivables include $ 6 million of U.S.

federal government transactions and $ 27 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 September 30, 2024 Three months ended September 30, 2023

Government Commercial Government Commercial

(in millions)

Beginning balance $ — $ 48 $ — $ 44

Provision for loss on receivables — 1 — 7

Ending balance $ — $ 49 $ — $ 51

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

Three months ended March 31, 2025 Three months ended March 31, 2024

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 September 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 March 31, 2025:

Total Less than 1

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Weighted average yield by period 8.7 % 6.4 % 8.9 % 9.2 % 8.2 %

Our real estate is leased to renewable energy projects, typically under long-term triple net leases.

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 September 30, 2024 and December 31, 2023, were as follows:

September 30, 2024 December 31, 2023

(in millions)

Land $ 3 $ 97

Lease intangibles — 22

Accumulated amortization of lease intangibles — ( 8 )

Real estate $ 3 $ 111

Equity Method Investments

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

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

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

As of March 31, 2025, we held the following equity method investments:

Investee Carrying Value

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Jupiter Equity Holdings LLC $ 629

CarbonCount Holdings 1 LLC 506

Daggett Renewable HoldCo LLC 417

Lighthouse Renewable HoldCo 2 LLC 353

CarbonCount Holdings 1 LLC 84

Other equity method investments 2,088

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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 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.

Through March 31, 2025, 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 $ 98 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 $ 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.

We have made investments in the preferred cash equity interests of Daggett of approximately $ 232 million through March 31, 2025, 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 off-takers.

Daggett is governed by a limited liability company agreement between us and the sponsor serving as managing member and contain customary terms and conditions.

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Subject to customary exceptions, no member can transfer any of its equity ownership in Daggett to a third party without approval of the review committee of Daggett.

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

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

Lighthouse Renewables HoldCo 2 LLC

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 September 30, 2024.

We have made investments in the preferred cash equity interests of the Lighthouse 2 of approximately $ 420 million through March 31, 2025.

Alongside the project sponsor and under terms outlined in the partnership agreement, we have made $ 19 million in working capital loans to Lighthouse 2 primarily for payments related to winter storm Uri.

Those working capital loans are included in our Related Party Transactions disclosures below.

Those working capital loans are included in

our Related Party Transactions disclosures below.

The Lighthouse 2 projects feature contracted cash flows with a diversified group of predominately investment grade corporate and university offtakers.

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Subject to customary exceptions, no member of Lighthouse 2 can transfer any of its equity ownership in Lighthouse 2 to a third party without approval of the review committee of Lighthouse 2.

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.

We use the equity method of accounting to account for our preferred equity interest 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

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CCH1 has been formed as a Delaware limited liability company.

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.

CCH1 is governed by a board of directors (“the Board”) which will initially be composed of four directors, two of whom will be appointed by us and two of whom will be appointed by KKR Hoops.

HASI CarbonCount and KKR Hoops have each committed $ 1 billion to CCH1 to be invested in eligible assets during an 18 month investment period, which was extended to 30 months in May 2025.

In addition, HASI, through its indirect subsidiaries, HASI 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.

CCH1 is governed by a board of directors (“the Board”) currently composed of four directors, two of whom are appointed by us and two of whom are appointed by KKR Hoops.

Actions of the Board generally require the affirmative vote of at least three out of four directors.

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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 %.

At inception, and prior to KKR’s acquisition of its interest in CCH1, we seeded CCH1 with equity method investments and receivables which were previously on our balance sheet with a combined book value of $ 108 million, and which are expected to have a total invested amount of $ 191 million once fully funded.

We received approximately $ 55 million from KKR for the purchase of their share of the net assets of CCH1, resulting in the deconsolidation of CCH1 by us.

There were no material differences between the amounts paid by KKR and the carrying values of the contributed assets, resulting in no material gain or loss upon deconsolidation and no material basis differences established.

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

To date, both we and KKR have each funded $ 503 million of our individual $ 1 billion commitment amount.

As of March 31, 2025, CCH1 contains $ 989 million book value in assets, 84 % of which are receivables.

While we do not recognize our income from CCH1 in arrears, CCH1 will recognize income from its equity method investees one quarter in arrears to allow for its receipt of financial information.

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, including SunPower Corporation further described below.

Of our receivables, approximately $ 813 million are loans made to entities in which we also have non-controlling equity investments of approximately $ 1.2 billion.

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

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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We are not obligated to contribute capital to support these entities beyond agreements to make contributions to allow for the entities to purchase additional renewable energy assets.

Because the loans made to these entities are typically subordinate to senior debt and tax equity investors in the projects, these loans, which have maturities of over ten years , may accrue PIK interest in the early years of the project until sufficient cash flow is available for our interest payments.

Because the loans made to these entities are typically subordinate to senior debt and tax equity investors in the projects, these loans, which typically have maturities of over ten years , may accrue PIK interest in the early years of the project until sufficient cash flow is available for our interest payments.

Any change in PIK interest is included in Change in accrued interest on receivables and investments in the operating section of our statement of cash flows.

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 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

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

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

(in millions)

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Additional investments made in related party loans

79 95 172 187

Principal collected from related party loans 10 17

Interest collected from related party loans 17 17

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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We have an unsecured revolving credit facility pursuant to a revolving credit agreement with a syndicate of lenders.

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.

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.

The current applicable margins are 1.625 % for SOFR-based loans and 0.625 % for prime rate-based loans, plus an additional 0.10 %.

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

In the first quarter of 2025, we added two new lenders to the existing syndicate and increased the maximum outstanding borrowing amount of this facility to $ 1.55 billion.

The maturity of the facility remains April 2028.

As of March 31, 2025, there are no outstanding borrowings under the facility, and 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 up to 0.10 % to the extent our Portfolio achieves certain targeted levels of carbon emissions avoidance, as measured by our CarbonCount © metric.

The current applicable margins are 1.625 % for SOFR-based loans and 0.625 % for prime rate-based loans, plus an additional 0.10 %, before applying any adjustments for achieved levels of carbon emissions avoidance.

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.

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At our option, upon maturity of the unsecured revolving credit facility, we have the ability to convert amounts borrowed into term loans for a fee equal to 1.875 % of the term loan amounts.

CarbonCount Green Commercial Paper Note Program

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.

We obtained an irrevocable direct-pay letter of credit in an amount not to exceed $ 125 million from Bank of America, N.A, to support these obligations which expires in April 2026.

Bank of America provides a direct-pay letter of credit to the noteholders in the same amount of each commercial paper note.

The letter of credit is automatically drawn upon at maturity of a commercial paper note and the noteholders are repaid in full.

We have a five business-day grace period during which we repay Bank of America for the amount drawn or issue a new commercial paper note.

Following the five business-day grace period, any amount then-outstanding is converted into a loan from Bank of America.

Commercial paper notes are not redeemable or subject to voluntary prepayment and cannot exceed 397 days.

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 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 %.

Credit-Enhanced Commercial Paper Note Program

We have a Green CarbonCount Commercial Paper Note Program (the “commercial paper program”) that allows us to issue commercial paper notes at any time, with such notes supported by an irrevocable direct-pay letter of credit from Bank of America, N.A.

(“Credit-Enhanced Commercial Paper Notes”).

The capacity of the program allows for up to $ 125 million outstanding at any time, and the program matures in April 2026.

Bank of America provides a direct-pay letter of credit to the noteholders in the same amount of each Credit-Enhanced Commercial Paper Notes.

The letter of credit is automatically drawn upon at maturity of a Credit-Enhanced Commercial Paper Note and the noteholders are repaid in full.

We have a five business-day grace period during which we repay Bank of America for the amount drawn or issue a new Credit-Enhanced Commercial Paper Note.

Following the five business-day grace period,

any amount then-outstanding is converted into a loan from Bank of America.

Credit-Enhanced Commercial Paper Notes are not redeemable or subject to voluntary prepayment and cannot exceed 397 days.

An amount equal to the proceeds of our Credit-Enhanced 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 March 31, 2025, we have no Credit-Enhanced Commercial Paper Notes outstanding under the facility.

Credit-Enhanced Commercial Paper Notes will be issued at a discount based on market pricing, subject to broker fees of 0.10 %.

For issuance of the letter of credit, we will pay 1.325 % on any drawn letter of credit amounts to Bank of America, N.A., and 0.35 % on any unused letter of credit capacity.

Any loans converted from drawn letter of credit amounts bear interest at a rate of Term SOFR plus 1.875 %, plus an additional 0.10 %.

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

Fees paid on the drawn letters of credit may be adjusted by 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 March 31, 2025, we have no remaining unamortized financing costs associated with the Credit-enhanced 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.

The letter of credit also includes customary events of default and remedies.

Standalone Commercial Paper Program

We issue unsecured short-term promissory notes pursuant to a CarbonCount Green Commercial Paper Program which are guaranteed by certain of our subsidiaries (“Standalone Commercial Paper Notes”).

Standalone Commercial Paper Notes are issued at a discount based on market pricing, subject to broker fees of 0.05 %.

Standalone Commercial Paper Notes are not redeemable, are not subject to voluntary prepayment, and are not to exceed 367 days.

Our board of directors has approved the issuance of up to $ 1 billion principal amount of Standalone Commercial Paper Notes at any given time.

As a credit enhancement for our Standalone Commercial Paper Notes, we reserve capacity under our unsecured revolving credit facility for the principal amount of any outstanding Standalone Commercial Paper Notes.

The proceeds from our Standalone Commercial Paper Notes are used to acquire or refinance, in whole or in part, eligible green projects, including assets that are neutral to negative on incremental carbon emissions.

As of March 31, 2025, we had $ 431 million principal amount of Stand-alone Commercial Paper Notes outstanding, which bear an average borrowing cost of 5.23 % and which mature in 2025.

Senior secured revolving credit agreement

In the second quarter of 2024, we entered into a senior secured revolving credit agreement with a maximum outstanding principal amount of $ 100 million which matures in 2029.

Under the terms of the senior secured revolving credit agreement, we will pledge collateral to the facility in the form of certain qualifying land assets or assets secured by land and will be allowed to borrow up to 80 % of our cash amount invested in the collateral pledged.

Any loans under the agreement bear interest at a rate of Term SOFR plus 1.90 %, and interest is due quarterly.

The rate of interest can be reduced by up to 0.10 % to the extent our Portfolio achieves certain targeted levels of carbon emissions avoidance as measured by our CarbonCount metric.

There is a commitment fee of 0.20 % of the used capacity of the agreement, which is paid quarterly.

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

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.

In 2024, we entered into a senior secured revolving credit agreement with a maximum outstanding principal amount of $ 100 million which matures in 2029, under which we could pledge collateral to the facility in the form of certain qualifying land assets or assets secured by land.

In 2025, we terminated the agreement in exchange for the lender joining the syndicate of lenders participating in our unsecured revolving credit facility.

Long-term Debt

Non-recourse debt

We have outstanding the following asset-backed non-recourse debt:

Outstanding Balance

as of Anticipated

Maturity Carrying Value of Assets Pledged as of

September 30, 2024 December 31, 2023 Interest

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

of Assets Pledged

(dollars in millions)

HASI Sustainable Yield Bond 2015-1A (1)

$ — $ 68 4.28 % October 2034 $ — $ — $ 136 Receivables, real estate, real estate intangibles, and restricted cash

HASI SYB Trust 2016-2 (2)

— 51 4.35 % April 2037 — — 57 Receivables and restricted cash

HASI Harmony Issuer 95 — 6.78 % July 2043 — 261 — Equity method investments

Other non-recourse

40 43 3.15 % - 7.23 %

2024 to 2032 17 41 46 Receivables

Unamortized financing costs ( 4 ) ( 2 )

Non-recourse debt (4)

(1) We prepaid this obligation in the first quarter of 2024.

(2) In the first quarter of 2024, contractual terms of this agreement were modified, which caused us to deconsolidate the entities holding such debt and its related pledged collateral.

(3) Other non-recourse debt consists of various debt agreements used to finance certain of our receivables.

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 $ 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.

There is no recourse for repayment of these obligations other than to the applicable borrower and any collateral pledged as security for the obligations.

Generally, the assets and credit of these entities are not available to satisfy any of our other debts and obligations.

The creditors can only look to the borrower, the cash flows of the pledged assets and any other collateral pledged, to satisfy the debt and we are not otherwise liable for nonpayment of such cash flows.

The debt agreements contain terms, conditions, covenants and representations and warranties that are customary and typical for transactions of this nature, including 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 and stock repurchases.

The agreements also include customary events of default, the occurrence of which may result in termination of the agreements, acceleration of amounts due and accrual of default interest.

We typically act as servicer for the debt transactions.

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 September 30, 2024, were as follows:

Future minimum maturities

(in millions)

October 1, 2024 to December 31, 2024 $ 3

Thereafter 84

Total minimum maturities $ 135

Unamortized financing costs ( 4 )

Total non-recourse debt $ 131

The stated minimum maturities of non-recourse debt above include only the mandatory minimum principal payments.

To the extent there are additional cash flows received from our investments serving as collateral for certain of our non-recourse debt facilities, these additional cash flows may be required to be used to make additional principal payments against the respective debt.

Any additional principal payments made due to these provisions may impact the anticipated balance at maturity of these financings.

To the extent there are not sufficient cash flows received from those investments pledged as collateral, the investor has no recourse against other corporate assets to recover any shortfalls.

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 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.

We are in compliance with all covenants as of March 31, 2025 and December 31, 2024.

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.

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

The following are summarized terms of the Senior Unsecured Notes as of March 31, 2025:

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

(in millions)

2025 Notes $ — (1)

April 15, 2025 6.00 % April 15 and

October 15th N/A

2026 Notes 1,000 June 15, 2026 3.375 % June 15 and December 15 March 15, 2026 (1)

2 unchanged sentences

2030 Notes 375 (4)

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

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.

September 15, 2030 3.750 % February 15 and August 15

July 1, 2034 6.375 % July 1 and

(1) Prior to this date, we may redeem, at our option, some or all of the 2026 Notes for the outstanding principal amount plus the applicable “make-whole” premium as defined in the indenture governing the 2026 Notes plus accrued and unpaid interest through the redemption date.

In addition, prior to this date, we may redeem up to 40 % of the Senior Unsecured Notes using the proceeds of certain equity offerings at a price equal to par plus the coupon percentage of the principal amount thereof, plus accrued but unpaid interest, if any, to, but excluding, the applicable redemption date.

On, or subsequent to, this date we may redeem the 2026 Notes in whole or in part at redemption prices defined in the indenture governing the 2026 Notes, plus accrued and unpaid interest though the redemption date.

On, or subsequent to, this date we may redeem the 2026 Notes at par, plus accrued and unpaid interest though the redemption date.

(2) Prior to this date, we may redeem, at our option, some or all of the 2027 Notes for the outstanding principal amount plus the applicable “make-whole” premium as defined in the indenture governing the 2027 Notes plus accrued and unpaid interest through the redemption date.

On, or subsequent to, this date we may redeem the 2027 Notes in whole or in part at a price equal to 100 % of the principal amount, plus accrued and unpaid interest though the redemption date.

On, or subsequent to, this date we may redeem the 2027 Notes in whole or in part at a price equal to 100 % of the outstanding principal amount, plus accrued and unpaid interest though the redemption date.

(3) In January 2024 in a follow-on offering we issued $ 200 million principal amount of 2027 Notes for net proceeds of $ 204 million, equivalent to a yield to maturity of 7.08 % for the new issuance.

1 unchanged sentence

We may redeem the 2030 Notes in whole or in part at redemption prices defined in the indenture governing the 2030 Notes plus accrued and unpaid interest though the redemption date.

(5) In the third quarter of 2024, we issued $ 700 million principal amount of 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 %.

In December 2024, we issued an additional $ 300 million principal amount of 2034 Notes for gross proceeds of $ 300 million.

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(in millions)

4 unchanged sentences

Carrying value of Senior Unsecured Notes $ 3,145 $ 3,139

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.

We recorded approximately $ 44 million in interest expense related to the Senior Unsecured Notes in the three months ended March 31, 2025 compared to approximately $ 34 million in the three months ended March 31, 2024.

Convertible Notes

1 unchanged sentence

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 September 30, 2024:

The following are summarized terms of the Convertible Notes as of March 31, 2025:

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

5 unchanged sentences

(1) The conversion or exchange ratio is subject to adjustment for dividends declared above these amounts per share per quarter and certain other events that may be dilutive to the holder.

(2) The 2025 Exchangeable Senior Notes accrete to a premium at maturity equal to 3.25 % per annum.

The current balance including accreted premium is $ 217 million.

(2) Subsequent to March 31, 2025, we used $ 220 million in proceeds from our unsecured revolving line of credit to repay the 2025 Exchangeable Senior Notes.

For the exchangeable senior notes, following the occurrence of a make-whole fundamental change, we will, in certain circumstances, increase the exchange rate for a holder that converts its exchangeable notes in connection with such make-whole fundamental change.

6 unchanged sentences

The notes accrete to a premium at maturity at an effective rate of 3.25 % annually.

The balance as of March 31, 2025 including accreted premium is $ 220 million.

Subsequent to March 31, 2025, we used $ 220 million in proceeds from our unsecured revolving line of credit to repay the 2025 Exchangeable Senior Notes.

Upon any exchange of these Notes, holders will receive a number of shares of our common stock equal to the product of (i) the aggregate initial principal amount of the notes to be exchanged, divided by $1,000 and (ii) the applicable exchange rate, plus cash in lieu of fractional shares.

1 unchanged sentence

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(in millions)

4 unchanged sentences

Carrying value of Convertible Notes

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.

We recorded approximately $ 6 million in interest expense related to our Convertible Notes in the three months ended March 31, 2025 and 2024.

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.

11 unchanged sentences

We have entered into a CarbonCount Term Loan Facility (“the Unsecured Term Loan Facility”) with a syndicate of banks which has an outstanding principal and accrued interest amount of $ 244 million.

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

Principal amounts under the Unsecured 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 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 March 31, 2025, the applicable margin is 1.875 % plus 0.10 %, and the current interest rate is 6.25 %.

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

Interest is due and payable quarterly.

Interest is due and payable monthly.

Payments of 1.25 % of the outstanding principal balance are due quarterly.

We intend to allocate an amount equal to the net proceeds of this offering to the acquisition or refinancing of, in whole or in part, new and/or existing eligible green projects, which include assets that are neutral to negative on incremental carbon emissions.

Loans under the unsecured term loan facility can be prepaid without penalty.

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 September 30, 2024 are as follows:

Loans under the Unsecured Term Loan Facility can be prepaid without penalty, and the facility matures in 2027.

Amounts which were due under the term loan facility as of March 31, 2025 are as follows:

Future maturities

(in millions)

October 1, 2024 to December 31, 2024 $ 7

April 1, 2025 to December 31, 2025 $ 9

Unamortized Financing Costs ( 4 )

3 unchanged sentences

Secured Term Loan

We have a term loan (“Secured Term Loan”) with a maturity date of January 2028, under which principal amounts bear interest at a rate of Daily Term SOFR plus a credit spread of 2.25 %, plus 0.10 %.

We have a secured term loan (“Secured Term Loan”) with a maturity date of January 2028, under which principal amounts bear interest at a rate of Daily Term SOFR plus a credit spread of 2.25 %, plus 0.10 %.

We are required to hold interest rate swaps with notional values equal to 85 % of the outstanding principal amount of the loan.

The facility is subject to mandatory principal amortization of 5 % per annum, with principal and interest payments due quarterly.

The Secured Term Loan is subject to mandatory principal amortization of 5 % per annum, with principal and interest payments due quarterly.

The Secured Term Loan 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.

The Secured Term Loan also includes customary events of default and remedies.

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 September 30, 2024 are as follows:

As of March 31, 2025, the outstanding principal and accrued interest balance is $ 165 million, the interest rate as of the last rate reset is 6.74 %, and we have receivables, securitization assets, and equity method investments pledged with a carrying value of $ 414 million.

Amounts which were due under the Secured Term Loan Facility as of March 31, 2025 are as follows:

Future maturities

(in millions)

October 1, 2024 to December 31, 2024 $ 2

April 1, 2025 to December 31, 2025 $ 8

Unamortized Financing Costs ( 2 )

Carrying Value $ 163

Non-recourse debt

We have outstanding the following asset-backed non-recourse debt and bank loans:

Outstanding Balance

as of Anticipated

Maturity Carrying Value of Assets Pledged as of

March 31, 2025 December 31, 2024 Interest

Rate Maturity Date March 31, 2025 December 31, 2024 Description

of Assets Pledged

(dollars in millions)

HASI Harmony Issuer 92 96 6.78 % July 2043 — 261 266 Equity method investments

Other non-recourse

37 40 3.15 % - 7.23 %

2026 to 2032 17 39 41 Receivables

Unamortized financing costs ( 4 ) ( 4 )

Non-recourse debt (2)

(1) Other non-recourse debt consists of various debt agreements used to finance certain of our receivables.

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

(2) The total collateral pledged against our non-recourse debt was $ 300 million and $ 307 million as of March 31, 2025 and December 31, 2024, respectively.

These amounts include $ 16 million and $ 20 million of restricted cash pledged for debt service payments as of March 31, 2025 and December 31, 2024, respectively.

There is no recourse for repayment of these obligations other than to the applicable borrower and any collateral pledged as security for the obligations.

Generally, the assets and credit of these entities are not available to satisfy any of our other debts and obligations.

The agreements also include customary events of default, the occurrence of which may result in termination of the agreements, acceleration of amounts due and accrual of default interest.

We typically act as servicer for the debt transactions.

We were in compliance with all covenants as of March 31, 2025 and December 31, 2024.

The stated minimum maturities of non-recourse debt as of March 31, 2025, were as follows:

Future minimum maturities

(in millions)

April 1, 2025 to December 31, 2025 $ 7

Thereafter 75

Total minimum maturities $ 129

Unamortized financing costs ( 4 )

Total non-recourse debt $ 125

The stated minimum maturities of non-recourse debt above include only the mandatory minimum principal payments.

Any additional principal payments made due to these provisions may impact the anticipated balance at maturity of these financings.

To the extent there are not sufficient cash flows received from those investments pledged as collateral, the investor has no recourse against other corporate assets to recover any shortfalls.

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 September 30, 2024:

Instrument type Hedged Rate Notional Value Fair Value as of

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

Instrument type Hedged Rate Notional Value Fair Value as of Term of derivative and forecasted transactions

Index March 31, 2025 December 31, 2024

$ in millions

2 unchanged sentences

Interest rate swap Overnight SOFR 3.09 % 600 21 32 June 2026 to June 2033

Interest rate swap Overnight SOFR 3.08 % 400 — (1)

8 April 2025 to April 2035

Interest rate collar 1 month SOFR 3.70 % - 4.00 %

4 unchanged sentences

$ 1,992 $ 33 67

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

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.

(1) 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 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.

As of March 31, 2025, all

of our derivatives were designated as hedging instruments which were deemed to be effective.

As of March 31, 2025, we have posted $ 6 million of collateral, which is netted against the derivative liability included in accounts payable, accrued expenses, and other on our balance sheet.

We hold $ 39 million of collateral posted by our counterparties, $ 35 million of which we have netted against the derivative asset which is included in other assets on our balance sheet, with the remainder being included in accounts payable, accrued expenses, and other.

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

(Amounts in millions)

Beginning Balance - January 1, 2023 $ —

Beginning Balance - December 31, 2023

Changes in fair value 95

3 unchanged sentences

Amounts released into interest expense ( 1 )

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

Ending Balance - March 31, 2025

The below table shows the benefit (expense) included in interest expense as a result of our hedging activities for the three months ended March 31, 2025 and 2024, respectively.

We expect a net benefit of approximately $ 1 million to be released out of AOCI into interest expense over the 12 months following March 31, 2025.

Three months ended March 31,

(in thousands)

3 unchanged sentences

Certain of the projects in which we have equity method investments also have interest rate swaps which are designated as cash flow hedges, and we recognize the portion of the gain or loss allocated to us related to those instruments through other comprehensive income.

Subsequent to March 31, 2025, we entered into forward-starting interest rate swaps with a notional value of $ 300 million to manage interest rate risk associated with future expected debt issuances.

These swaps have a term of December 2025 to December 2035, are indexed to Overnight SOFR, and have a range of fixed rates between 3.46 % and 3.59 %.

Commitments and Contingencies

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

As of March 31, 2025, 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 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 February 2025.

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

As of March 31, 2025, 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 March 31, 2025, 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 own debt securities of energy efficiency projects.

As of March 31, 2025, 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 $ 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.

We recorded an income tax expense of approximately $ 24 million and $ 46 million for the three months ended March 31, 2025 and 2024, respectively.

For the three months ended March 31, 2025 and 2024, our income tax expense was determined using the statutory federal tax rate of 21%, and combined state tax rates, net of federal benefit, of approximately 5 % for 2025 and 4 % for 2024.

Dividends and Distributions

8 unchanged sentences

5/7/2025 7/2/2025 7/11/2025 $ 0.420

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.

8 unchanged sentences

Q1 2024 ATM 1.193 $ 25.89 (2)

5/30/2023 Public Offering 15.000 22.23 (4)

Q2 2024 ATM 1.662 31.42 (2)

2 unchanged sentences

Q1 2025 ATM 1.629 29.07 (2)

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.

(2) Includes shares issued in connection with the exercise of the underwriters’ option to purchase additional shares.

(2) Represents the average price per share at which investors in our ATM offerings purchased our shares.

(4) Represents the price per share at which the underwriters in our public offering purchased our shares.

Equity-based Compensation Awards

We have issued equity awards that vest from 2025 to 2029 subject to service, performance and market conditions.

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.

During the three months ended March 31, 2025, our board of directors awarded employees and directors 787,843 shares of restricted stock, restricted stock units and LTIP Units that vest from 2026 to 2029.

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

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.

For the three months ended March 31, 2025 we recorded $ 10 million of stock based compensation compared to $ 7 million during the three months ended March 31, 2024.

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 $ 24 million as of September 30, 2024.

The total unrecognized compensation expense related to awards of shares of restricted stock and restricted stock units was approximately $ 35 million as of March 31, 2025.

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

10 unchanged sentences

Forfeited ( 4,610 ) 25.96 ( 0.1 )

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

Ending Balance — March 31, 2025 521,456 $ 28.32 $ 14.8

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

5 unchanged sentences

Incremental performance shares granted — — —

Vested ( 18,041 ) 35.17 ( 0.6 )

Forfeited ( 15,912 ) 68.12 ( 1.1 )

2 unchanged sentences

Incremental performance shares granted — — —

Vested ( 988 ) 45.99 —

Forfeited ( 20,308 ) 58.77 ( 1.2 )

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

Ending Balance — March 31, 2025 57,446 $ 39.35 $ 2.3

(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 — September 30, 2024 560,971 $ 29.99 $ 16.9

Ending Balance — March 31, 2025 732,678 $ 28.41 $ 20.9

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

6 unchanged sentences

Incremental performance shares granted — — —

Vested ( 96,496 ) 19.94 ( 1.9 )

Forfeited ( 86,274 ) 65.28 ( 5.6 )

3 unchanged sentences

Forfeited ( 125,550 ) 54.77 ( 6.9 )

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

Ending Balance — March 31, 2025 529,793 $ 40.68 $ 21.6

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

9 unchanged sentences

Forfeited — — —

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

Ending Balance — December 31, 2024 128,024 $ 25.96 $ 3.3

Granted 119,735 28.73 3.5

Incremental performance shares granted — — —

Forfeited — — —

Ending Balance — March 31, 2025 247,759 $ 27.30 $ 6.8

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

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The incremental performance shares granted relate to the vesting of awards at the achieved performance level.

NOL Stockholder Rights Plan

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 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.

On July 1, 2024, we entered into an amendment which caused the Rights under the Plan to expire on July 1, 2024, effectively terminating the Plan at that time in anticipation of the effectiveness of the Company’s reincorporation as a Delaware corporation on July 2, 2024.

The Company’s Delaware Certificate of Incorporation includes Charter Tax Benefit Provisions which are intended to replace the Tax Benefits Preservation Plan.

Pursuant to the Plan, during the period in which it existed, if a stockholder (or group) became a 5 % stockholder without meeting certain exceptions, the Rights became exercisable upon board approval and entitled stockholders (other than the 5 % stockholder or group causing the Rights to become exercisable) to purchase additional of our common shares at a significant discount, resulting in significant dilution in the economic interest and voting power of the 5 % stockholder or group causing the Rights to become exercisable.

Stockholders owning 5 % or more of our outstanding shares at the time the Plan was adopted were grandfathered and would have only caused the Rights to distribute and become exercisable if they acquire any additional HASI shares.

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 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

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

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

2024 2023 2024 2023

Three Months Ended March 31,

(in millions, except share and per share data)

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Weighted-average number of OP units 1,447,380 1,393,885

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

As of March 31,

Participating securities:

Unvested restricted common stock and unvested LTIP Units with time-based vesting conditions outstanding at period end 1,254,135 982,670

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

2024 2023 2024 2023

Three Months Ended March 31,

Potentially dilutive securities as of period end that were not dilutive for the presented periods:

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LTIP Units with market-based vesting conditions 282,034 407,584

LTIP Units with performance-based vesting conditions

247,759 128,024

Potential shares of common stock related to Convertible Notes — —

Equity Method Investments

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

As of March 31, 2025 and December 31, 2024, we had 46 and 47 investments, respectively, which we accounted for using 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.

The limited liability company agreements do not define a fixed percentage of our ownership of these entities, and our claims on the net assets of each investment changes over time as preferred investors achieve their pre-negotiated preferred returns.

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

The following is a summary of the consolidated balance sheets and income statements of the entities in which we have a significant equity method investment.

These amounts are presented on the underlying investees’ accounting basis.

In certain instances, adjustment to these equity values may be necessary in order to reflect our basis in these investments.

In certain instances, adjustment to these equity values may be necessary in order to reflect our basis in these investments, for reasons including but not limited to the investees reporting to us being on a cost basis rather than a fair value basis or due to our allocations under HLBV differing from our purchase price of the investment.

As described in Note 2, any difference between the amount of our investment and the amount of our share of underlying equity is generally amortized over the life of the assets and liabilities to which the differences relate.

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As these swaps are settled, the projects will sell power at the higher market price, offsetting the loss recognized on the energy hedges.

Jupiter Equity Holdings LLC Daggett Renewable Holdco LLC Other Investments (1)

As of March 31, 2025 and December 31, 2024, we have accumulated other comprehensive income net of tax effect of $ 41 million and $ 23 million respectively, related to the interest rate swaps designated as cash flow hedges by our investees.

Palmetto HASI Holdings LLC

Other Investments (1)

(in millions)

Balance Sheet

As of June 30, 2024

As of December 31, 2024

Current assets $ 113 $ 938 $ 1,051

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Income Statement

For the six months ended June 30, 2024

For the year ended December 31, 2024

Revenue 15 1,186 1,201

1 unchanged sentence

Net income (loss) 1 ( 325 ) ( 324 )

For the six months ended June 30, 2023

For the year ended December 31, 2023

Revenue — 1,184 1,184

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