What changed in this filing

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Item 1. Financial Statements

2025-08-08 compared with 2025-05-08 · 290 added, 203 removed, 907 unchanged (35% of the section changed)

3 unchanged sentences

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

March 31, 2025 (unaudited) December 31, 2024

June 30, 2025 (unaudited) December 31, 2024

Cash and cash equivalents $ 86,508 $ 129,758

3 unchanged sentences

Receivables held-for-sale 43,489 75,556

Real estate 2,981 2,984

Investments 7,006 6,818

Securitization assets, net of allowance of $ 3 million and $ 3 million, respectively

Real estate and debt securities

Retained interests in securitization trusts, net of allowance of $ 3 million and $ 3 million, respectively

272,194 248,688

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(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

For the Three Months Ended March 31,

Interest income $ 66,394 $ 68,692

Rental income 83 1,846

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

2025 2024 2025 2024

Interest and rental income

$ 67,441 $ 62,862 $ 133,918 $ 133,400

Gain on sale of assets 7,829 25,795 26,497 54,405

Securitization asset income 6,999 4,898

Other income 4,797 1,769

Management fees and retained interest income

8,988 5,218 15,987 10,116

Origination fee and other income

1,427 642 6,224 2,411

Total revenue 85,685 94,517 182,626 200,332

Interest expense 79,746 59,530 144,424 121,403

Provision (benefit) for loss on receivables and securitization assets 3,812 2,022

Provision (benefit) for loss on receivables and retained interests in securitization trusts

1,038 ( 4,198 ) 4,850 ( 2,177 )

Compensation and benefits 18,131 20,814 43,110 41,490

8 unchanged sentences

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

1,350 404 2,923 1,926

Net income (loss) attributable to controlling stockholders $ 98,445 $ 26,540 $ 155,057 $ 149,566

7 unchanged sentences

(DOLLARS IN THOUSANDS)

Three Months Ended March 31,

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

2025 2024 2025 2024

Net income (loss) $ 99,795 $ 26,944 $ 157,980 $ 151,492

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

Unrealized gain (loss) on available-for-sale securities and retained interests in securitization trusts, net of tax benefit (provision) of $( 0.6 ) million and $( 2.5 ) million for the three and six months ended June 30, 2025 and $ 1.5 million and $ 3.2 million for the three and six months ended June 30, 2024

1,877 ( 4,562 ) 7,307 ( 9,650 )

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

Unrealized gain (loss) on interest rate swaps, net of tax benefit (provision) of $ 3.1 million and $ 5.8 million for the three and six months ended June 30, 2025 and $( 5.9 ) million and $( 12.9 ) million for the three and six months ended June 30, 2024

( 8,945 ) 16,666 ( 16,840 ) 37,896

1 unchanged sentence

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

1,220 566 2,753 2,286

Comprehensive income (loss) attributable to controlling stockholders $ 91,507 $ 38,482 $ 145,694 $ 177,452

5 unchanged sentences

Shares Amount

Balance at December 31, 2024

Balance at March 31, 2025

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

Net income (loss) — — — 98,445 — 1,350 99,795

Unrealized gain (loss) on available-for-sale securities and securitization assets — — — — 5,343 87 5,430

Unrealized gain (loss) on available-for-sale securities and retained interests in securitization trusts

— — — — 1,834 43 1,877

Unrealized gain (loss) on interest rate swaps — — — — ( 8,771 ) ( 174 ) ( 8,945 )

1 unchanged sentence

Equity-based compensation — — 1,086 — — 4,510 5,596

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

114 2 2,901 — — ( 3,630 ) ( 727 )

Dividends and distributions — — — ( 51,942 ) — ( 1,024 ) ( 52,966 )

Balance at June 30, 2025

123,578 $ 1,236 $ 2,723,636 $ ( 245,392 ) $ 30,738 $ 78,417 $ 2,588,635

Balance at March 31, 2024

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

Net income (loss) — — — 26,541 — 403 26,944

Unrealized gain (loss) on available-for-sale debt securities and retained interests in securitization trusts

— — — — ( 4,502 ) ( 60 ) ( 4,562 )

Unrealized gain (loss) on interest rate swaps — — — — 16,443 223 16,666

Issued shares of common stock 1,663 17 51,611 — — — 51,628

Equity-based compensation — — 1,091 — — 7,190 8,281

Issuance (repurchase) of vested equity-based compensation shares 13 — ( 308 ) — — — ( 308 )

Dividends and distributions — — — ( 47,998 ) — ( 899 ) ( 48,897 )

Balance at June 30, 2024

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

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, 2024

1 unchanged sentence

Net income (loss)

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

— — — 155,057 — 2,923 157,980

Unrealized gain (loss) on available-for-sale debt securities and retained interests in securitization trusts

— — — — 7,176 131 7,307

Unrealized gain (loss) on interest rate swaps — — — — ( 16,539 ) ( 301 ) ( 16,840 )

1 unchanged sentence

Equity-based compensation — — 2,383 — — 13,037 15,420

133 2 5,605 — — ( 3,630 ) 1,977

Dividends and distributions — — — ( 102,950 ) — ( 2,062 ) ( 105,012 )

Balance at June 30, 2025

123,578 $ 1,236 $ 2,723,636 $ ( 245,392 ) $ 30,738 $ 78,417 $ 2,588,635

Balance at December 31, 2023

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

Net income (loss)

— — — 149,566 — 1,926 151,492

Unrealized gain (loss) on available-for-sale securities and retained interests in securitization trusts

— — — — ( 9,527 ) ( 123 ) ( 9,650 )

Unrealized gain (loss) on interest rate swaps — — — — 37,414 482 37,896

Issued shares of common stock 2,956 30 84,441 — — — 84,471

Equity-based compensation — — 2,027 — — 12,856 14,883

Issuance (repurchase) of vested equity-based compensation shares 22 — ( 466 ) — — — ( 466 )

Dividends and distributions — — — ( 95,307 ) — ( 1,777 ) ( 97,084 )

Balance at March 31, 2024

Balance at June 30, 2024

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

3 unchanged sentences

(DOLLARS IN THOUSANDS)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

1 unchanged sentence

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Provision for loss on receivables 3,812 2,022

Provision for loss on receivables and retained interests in securitization trusts

4,850 ( 2,177 )

Depreciation and amortization 418 515

Amortization of financing costs 7,895 8,192

Equity-based compensation 9,825 6,601

Equity-based expenses

18,272 17,341

Equity method investments ( 171,121 ) ( 161,958 )

1 unchanged sentence

( 11,407 ) ( 53,891 )

(Gain) loss on sale of receivables and investments — 9,869

(Gain) loss on sale of receivables and debt securities

Loss on debt extinguishment 10,557 —

Changes in receivables held-for-sale ( 4,285 ) ( 6,750 )

Changes in accounts payable and accrued expenses 30,545 50,801

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

Change in accrued interest on receivables and debt securities

( 27,371 ) ( 33,242 )

Cash received (paid) upon hedge settlement 17,696 19,261

Other 8,421 ( 2,002 )

3 unchanged sentences

Equity method investment distributions received 19,529 11,426

Proceeds from sales of equity method investments — 2,107

Purchases of and investments in receivables ( 287,049 ) ( 347,343 )

2 unchanged sentences

Proceeds from sale of real estate — 115,767

Purchases of debt securities and retained interests in securitization trusts

Collateral provided to hedge counterparties

( 4,110 ) ( 1,140 )

Collateral received from hedge counterparties

4 unchanged sentences

Principal payments on credit facilities ( 395,000 ) ( 701,792 )

Proceeds from issuance of term loan — 250,000

Principal payments on term loan ( 11,124 ) ( 561,023 )

5 unchanged sentences

Proceeds from issuance of senior unsecured notes 996,174 205,500

Principal payments on convertible notes ( 200,000 ) —

Redemption of senior unsecured notes ( 700,000 ) —

Net proceeds of common stock issuances 119,876 82,014

Payments of dividends and distributions ( 102,443 ) ( 93,280 )

Withholdings on employee share vesting ( 393 ) ( 157 )

Redemption premium paid ( 6,645 ) —

Payment of financing costs ( 7,195 ) ( 19,711 )

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Supplemental disclosure of non-cash activity

Residual assets retained from securitization transactions $ 7,313 $ 6,715

Interests retained from securitization transactions

$ 18,662 $ 28,164

Equity method investments retained from securitization and deconsolidation transactions

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

Deconsolidation of non-recourse debt — 51,233

Deconsolidation of assets pledged for non-recourse debt — 51,761

Removal of deferred financing obligation upon securitization

See accompanying notes.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

HA Sustainable Infrastructure Capital, Inc.

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

We generate net investment income from our portfolio, and fees through gain-on-sale securitization transactions, asset management and servicing, broker/dealer and other services.

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

We generate recurring income from net investment income from our portfolio, from income through our residual ownership in securitization and co-investment structures, and from asset management and other services.

We also generate income through gain-on-sale securitization transactions, broker/dealer and other services.

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.

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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-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.

Our results of operations for the three- and six-month periods ended June 30, 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 account for our investments in entities that are considered voting interest entities or variable interest entities (“VIEs”) under ASC 810 and assess on an ongoing basis whether we should consolidate these entities.

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.

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We have made equity investments, typically in structures where we have a preferred return position.

These investments are typically owned in holding companies (using limited liability companies (“LLCs”) taxed as partnerships) where we partner with either the operator of the project or other institutional investors.

These investments are typically owned in holding companies (that are generally limited liability companies (“LLCs”) taxed as partnerships) where we partner with either the operator of the project or other institutional investors.

We share in the cash flows, income and tax attributes according to a negotiated schedule which typically does not correspond with our ownership percentages.

1 unchanged sentence

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 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.

Our equity investments are accounted for under the equity method of accounting, under which the carrying value of these investments is determined based on amounts we invested, adjusted for earnings or losses of the investee allocated to us based on terms of 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 to 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.

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.

This method is referred to as the hypothetical liquidation at book value method (“HLBV”).

Our exposure to loss in these investments is limited to the amount of our equity investment, as well as receivables from or guarantees made to the same investee.

Our exposure to loss in these investments is limited to the amount of our equity investment, plus receivables from or guarantees made to the same investee, if any.

Any difference between the amount of our investment and the amount of underlying equity in net assets at the time of our investment is generally amortized over the life of the assets and liabilities to which the difference relates.

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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 have classified as held-for-sale 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.

2 unchanged sentences

We generally accrue this paid-in-kind (“PIK”) interest when collection is expected, and cease accruing PIK interest if there is insufficient value to support the accrual or we expect that any portion of the principal or interest due is not collectible.

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.

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

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.

24 unchanged sentences

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

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

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

Gain or loss on the sale of assets is calculated based on the excess of the proceeds received from the securitization (net of any transaction costs) plus any retained interests obtained over the cost basis of the assets sold.

1 unchanged sentence

Cash flows related to our securitizations at origination are classified as operating activities in our consolidated statements of cash flows.

We initially account for all separately recognized servicing assets and servicing liabilities at fair value and subsequently measure such servicing assets and liabilities using the amortization method.

Servicing assets and liabilities are amortized in proportion to, and over the period of, estimated net servicing income with servicing income recognized as earned.

We assess servicing assets for impairment at each reporting date.

If the amortized cost of servicing assets is greater than the estimated fair value, we will recognize an impairment in net income.

We account for our other retained interests in securitized financial assets, the residual assets, similar to available-for-sale debt securities and carry them at fair value, with changes in fair value recorded in accumulated other comprehensive income (“AOCI”) pursuant to ASC 325-40, Beneficial Interests in Securitized Financial Assets .

Income related to the residual assets is recognized using the effective interest rate method and included in securitization income in our income statement.

Our residual assets are evaluated for impairment on a quarterly basis under Topic 326.

A residual asset is impaired if its fair value is less than its carrying value.

We account for our retained interests in securitization trusts similar to available-for-sale debt securities and carry them at fair value, with changes in fair value recorded in accumulated other comprehensive income (“AOCI”) pursuant to ASC 325-40, Beneficial Interests in Securitized Financial Assets .

Income related to these assets is recognized using the effective interest rate method and included in securitization income in our income statement.

These assets are evaluated for impairment on a quarterly basis under Topic 326.

Such assets are impaired if their fair value is less than its carrying value.

The credit component of impairments, if any, are recognized by recording an allowance against the amortized cost of the asset.

For changes in expected cash flows, we will calculate a new yield based on the current amortized cost of the residual assets and the revised expected cash flows.

For changes in expected cash flows, we will calculate a new yield based on the current amortized cost of the assets and the revised expected cash flows.

This yield is used prospectively to recognize our income related to these assets.

Residual interests in securitized non-financial assets are accounted for as equity method investments, and subject to those accounting policies described above.

Retained interests in securitized non-financial assets are accounted for as equity method investments, and subject to those accounting policies described above.

Cash and Cash Equivalents

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If converted or exchanged, the carrying value of each Convertible Note is reclassified into stockholders’ equity.

In order to offset the economic impacts of any potential dilution upon conversion or exchange of such notes, we have entered into capped call transactions, the accounting for which is discussed below in Derivative Financial Instruments.

Derivative Financial Instruments

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The interest rate derivatives we use are intended to be designated as cash flow hedges and are considered highly effective in reducing our exposure to the interest rate risk that they are designated to hedge.

This effectiveness is required in order to qualify for hedge accounting.

This effectiveness is required in order to

qualify for hedge accounting.

Instruments that meet the required hedging criteria are formally designated as hedging instruments at the inception of the derivative contract.

61 unchanged sentences

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.

In evaluating segment assets, the CODM uses receivables, equity method investments, real estate, and debt securities 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.

1 unchanged sentence

Recently Issued Accounting Pronouncements

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.

Accounting standards updates issued before August 8, 2025, and effective after June 30, 2025, are not expected to have a material effect on our consolidated financial statements and related disclosures.

Fair Value Measurements

4 unchanged sentences

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 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.

As of June 30, 2025 and December 31, 2024, only our retained interests in securitization trusts, our derivatives, and our debt securities 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:

7 unchanged sentences

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 March 31, 2025

As of June 30, 2025

Fair Value Carrying

2 unchanged sentences

Receivables held-for-sale 50 43 Level 3

Investments (1)

Securitization residual assets (2)

Debt securities (1)

13 13 Level 3

Retained interests in securitization trusts (2)

272 272 Level 3

Derivative assets 21 21 Level 2

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Convertible Notes

2025 Exchangeable Senior Notes 220 220 Level 2

2028 Exchangeable Senior Notes 498 404 Level 2

Total Convertible Notes 718 624

472 409 Level 2

Derivative liabilities 7 7 Level 2

(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 March 31, 2025 was $ 310 million.

(1) The amortized cost of our debt securities as of June 30, 2025, was $ 8 million.

(2) The amortized cost of our retained interests in securitization trusts net of allowance for credit losses as of June 30, 2025 was $ 321 million.

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

4 unchanged sentences

Receivables held-for-sale 79 76 Level 3

Investments (1)

Securitization residual assets (2)

Debt securities (1)

Retained interests in securitization trusts (2)

249 249 Level 3

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Derivative liabilities 3 3 Level 2

(1) The amortized cost of our investments as of December 31, 2024, 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 December 31, 2024, was $ 301 million.

(1) The amortized cost of our debt securities as of December 31, 2024, was $ 8 million.

(2) The amortized cost of our retained interests in securitization trusts net of allowance for credit losses as of December 31, 2024, was $ 301 million.

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

Securitization residual assets

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 March 31,

Retained interests in securitization trusts

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

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

2025 2024 2025 2024

(in millions)

Balance, beginning of period $ 265 $ 220 $ 249 $ 219

Accretion of securitization residual assets 5 4

Additions to securitization residual assets 7 7

Collections of securitization residual assets ( 3 ) ( 3 )

Unrealized gains (losses) on securitization residual assets recorded in OCI 7 ( 7 )

Provision for loss on securitization residual assets — —

Accretion of retained interests in securitization trusts

Additions to retained interests in securitization trusts

Collections from retained interests in securitization trusts

( 6 ) ( 2 ) ( 9 ) ( 5 )

Unrealized gains (losses) on retained interests in securitization trusts recorded in OCI

( 3 ) ( 5 ) 4 ( 12 )

Balance, end of period $ 272 $ 238 $ 272 $ 238

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

We had the following retained interests in securitization trusts in an unrealized loss position:

Estimated Fair Value Unrealized Losses (1)

2 unchanged sentences

(in millions)

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

June 30, 2025 $ 60 $ 158 $ 2 $ 50 24 72

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 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 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.

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

In determining the fair value of our retained interests in securitization trusts, 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 June 30, 2025 and 1 % to 6 % as of December 31, 2024.

The weighted average discount rates used to determine the fair value of our retained interests in securitization trusts as of June 30, 2025 and December 31, 2024 were 7.0 % and 7.3 %, respectively.

Non-recurring Fair Value Measurements

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Concentration of Credit Risk

Receivables, real estate leases and debt investments consist primarily of receivables from various projects, U.S.

Our receivables and debt securities are backed by various projects, U.S.

federal government-backed receivables, and investment grade state and local government receivables and do not, in our view, represent a significant concentration of credit risk given the large number of diverse offtakers and other obligors of the projects.

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

March 31, 2025 December 31, 2024

June 30, 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 three months ended March 31, 2025 or March 31, 2024.

During the six months ended June 30, 2025, 81,498 OP units were redeemed by non-controlling interest holders.

No OP units were redeemed by non-controlling interest holders during the six months ended June 30, 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 following summarizes certain transactions with securitization trusts:

For the Three Months Ended March 31,

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

2025 2024 2025 2024

(in millions)

2 unchanged sentences

Proceeds from securitizations 92 325 306 813

Cash received from residual and servicing assets 4 3

In connection with securitization transactions, we typically retain servicing responsibilities and residual assets.

Cash received from retained interests in securitization trusts and servicing

In connection with securitization transactions, we typically retain servicing responsibilities and residual interests in the securitization trusts.

We generally receive annual servicing fees that are typically up to 0.25 % of the outstanding balance.

We may periodically make servicer advances that are subject to credit risk.

Included in securitization assets in our consolidated balance sheets are our servicing assets at amortized cost and our residual assets at fair value.

Our residual assets are subordinate to investors’ interests, and their values are subject to credit, prepayment and interest rate risks on the transferred financial assets.

Other than our securitization assets representing these residual interests in the trusts’ assets, the investors and the securitization trusts have no recourse to our other assets for failure of debtors to pay when due.

Assets related to our retained interests in securitization trusts are held on our balance sheet at fair value.

Our retained interests are subordinate to investors’ interests, and their values are subject to credit, prepayment and interest rate risks on the transferred financial assets.

Other than our retained interests in the trusts’ assets, the investors and the securitization trusts have no recourse to our other assets for failure of debtors to pay when due.

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 5.8 % 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.

Depending on the nature of the transaction risks, the all-in discount rate ranged from 6.2 % to 7.0 % for the six months ended June 30, 2025.

As of June 30, 2025 and December 31, 2024, our managed assets totaled $ 14.6 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 June 30, 2025 and December 31, 2024, the securitization trusts held $ 6.3 billion and $ 6.2 billion, respectively, of notes due to investors.

We have an allowance for losses on our retained interests in securitization trusts 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.

There has been no change in the underlying credit quality of the securitized assets since origination.

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

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

Three months ended June 30, 2025 Three months ended June 30, 2024

Government Commercial Government Commercial

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Beginning balance $ — $ 3 $ — $ 3

Provision for loss on securitization assets — — — —

Provision for loss on retained interests in securitization trusts

Ending balance $ — $ 3 $ — $ 3

As of March 31, 2025, there were no material payments from debtors to the securitization trusts that were greater than 90 days past due.

Six months ended June 30, 2025 Six months ended June 30, 2024

Government Commercial Government Commercial

(in millions)

Beginning balance $ — $ 3 $ — $ 3

Provision for loss on retained interests in securitization trusts

Ending balance $ — $ 3 $ — $ 3

As of June 30, 2025, there were no material payments from debtors to the securitization trusts that were greater than 90 days past due.

Of our retained interests in securitization trusts, 55 % are related to c ontracts where the underlying cash flows are secured by an interest in real estate which are typically senior in terms of repayment to other financings.

Receivables from contracts for the installation of energy efficiency and other technologies are the source of cash flows of 45 % of our securitization residual assets.

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The contracts may have guarantees of energy savings from third-party service providers, which typically are entities rated investment grade by an independent rating agency.

The remainder of our securitization residual assets are related to c ontracts where the underlying cash flows are secured by an interest in real estate which are typically senior in terms of repayment to other financings.

Our Portfolio

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.

As of June 30, 2025, our Portfolio included approximately $ 7.2 billion of equity method investments, receivables, real estate and debt securities 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.

The receivables and debt securities 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.

The real estate is typically land and related lease intangibles for long-term leases to wind and solar projects.

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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:

The following is an analysis of the Performance Ratings of our Portfolio as of June 30, 2025, which is assessed quarterly:

Portfolio Performance

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Receivables held-for-sale 40 3 — — 43

Investments 5 2 — — 7

Real estate 3 — — — 3

Debt securities and real estate

Equity method investments (5)

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(2) This category includes our assets where based on our credit criteria and performance to date we believe there is a moderate level of risk to not receiving some or all of our invested capital.

In the second quarter of 2025, we moved into this category a receivable previously included in Category 1 where the underlying assets are experiencing project-specific operational challenges which are currently in the process of being remediated.

(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.

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

Receivables or debt securities 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.

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

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

As of June 30, 2025, our allowance for losses on receivables was $ 55 million based on our expectation of credit losses over the lives of the receivables in our portfolio.

During the three months ended June 30, 2025, we increased our reserve by approximately $ 1 million, driven primarily by changes in project-specific assumptions used to predict future credit losses related to the receivable described above which was moved to Category 2 in our Portfolio Performance analysis.

June 30, 2025 December 31, 2024

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

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Total $ 3,081 $ 331 $ 55 $ 2,946 $ 545 $ 50

(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.

(1) As of June 30, 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.

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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 $ 55 million allowance on these $ 3.0 billion in assets as a result of lower probability assumptions utilized in our allowance methodology.

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

(2) As of June 30, 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 March 31, 2025 Three months ended March 31, 2024

Three months ended June 30, 2025 Three months ended June 30, 2024

Government Commercial Government Commercial

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Ending balance $ — $ 55 $ — $ 48

Six months ended June 30, 2025 Six months ended June 30, 2024

Government Commercial Government Commercial

(in millions)

Beginning balance $ — $ 50 $ — $ 50

Provision for loss on receivables — 5 — ( 2 )

Ending balance $ — $ 55 $ — $ 48

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 March 31, 2025:

The following table provides a summary of our anticipated maturity dates of our receivables and the weighted average yield for each range of maturities as of June 30, 2025:

Total Less than 1

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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:

As of June 30, 2025, we held the following equity method investments:

Investee Carrying Value

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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.

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.

Through June 30, 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 $ 96 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 March 31, 2025, reflecting final funding true-ups after all projects reached substantial completion.

We have made investments in the preferred cash equity interests of Daggett of approximately $ 232 million through June 30, 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.

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

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

investments in the preferred cash equity interests of the Lighthouse 2 of approximately $ 420 million through June 30, 2025.

Alongside the project sponsor and under terms outlined in the partnership agreement, we have made $ 15 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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CarbonCount Holdings 1 LLC

On May 4, 2024, we, through our indirect subsidiary, HASI CarbonCount Holdings 1, LLC (“HASI CarbonCount”), a Delaware limited liability company, and Hoops Midco, LLC (“KKR Hoops”), an investment vehicle established as a Delaware limited liability company and managed by an affiliate of Kohlberg Kravis Roberts & Co.

We, through our indirect subsidiary, HASI CarbonCount Holdings 1, LLC (“HASI CarbonCount”) and Hoops Midco, LLC (“KKR Hoops”), an investment vehicle managed by an affiliate of Kohlberg Kravis Roberts & Co.

(“KKR”), entered into agreements to acquire interests in CarbonCount Holdings 1 LLC (“CCH1”), established to invest in certain eligible climate positive projects across the United States, as further described below.

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 eligible assets during an 18 month investment period, which was extended to 30 months in May 2025.

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To date, both we and KKR have each funded $ 524 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.

As of June 30, 2025, CCH1 contains $ 1.1 billion book value in assets, 79 % of which are receivables or debt securities.

In the second quarter of 2025, CCH1 entered into an agreement to issue up to $ 592 million of senior notes due 2045 pursuant to a note purchase agreement, $ 200 million of which had been issued as of June 30, 2025.

Proceeds from the senior notes will be used to make investments incremental to the $ 1 billion commitment per investor.

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

Other Related Party Transactions

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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.

Any change in PIK interest is included in Change in accrued interest on receivables and debt securities 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 investees:

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

Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 Six Months Ended June 30, 2025 Six Months Ended June 30, 2024

(in millions)

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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 facility matures in April 2028.

As of June 30, 2025, there are no outstanding borrowings under the facility and approximately $ 9 million of remaining unamortized financing costs associated with the unsecured revolving credit facility 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.

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

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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.

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

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.

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.

As of June 30, 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 %.

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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.

As of June 30, 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.

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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.

As of June 30, 2025, we had $ 357 million principal amount of Standalone Commercial Paper Notes outstanding, which bear an average borrowing cost of 5.46 % and mature in 2025.

Senior secured revolving credit agreement

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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”).

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

We are in compliance with all covenants as of June 30, 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 March 31, 2025:

In June 2025, we issued $ 600 million principal amount of senior unsecured notes due in 2031 (“2031 Notes”) and $ 400 million principal amount of senior unsecured notes due in 2035 (“2035 Notes”).

We used a portion of the proceeds to complete a cash tender offer to repurchase $ 400 million principal amount of 2026 Notes for $ 395 million and $ 300 million principal amount of 2027 Notes for $ 314 million, inclusive of accrued interest through the settlement date.

The net premium paid of $ 5 million, the write-off of debt issuance costs of $ 4 million, and approximately $ 2 million of expenses incurred in relation to the tender, are recorded in interest expense within our consolidated statement of operations.

The following are summarized terms of the Senior Unsecured Notes as of June 30, 2025:

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

(in millions)

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

2026 Notes 600 (1)

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2027 Notes 450 (1)(4)

June 15, 2027 8.000 % June 15 and December 15 March 15, 2027 (3)

2030 Notes 375 (5)

September 15, 2030 3.750 % February 15 and August 15

January 15, 2031 6.150 % January 15 and

December 15, 2030 (7)

July 1, 2034 6.375 % July 1 and

July 15, 2035 6.750 % January 15 and

April 15, 2035 (7)

(1) See above for discussion of the partial repurchases of the outstanding notes which occurred in the second quarter of 2025.

(2) 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.

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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 %.

(6) We issued the $ 600 million aggregate principal amount of the 2031 notes for total proceeds of $ 598 million ($ 593 million net of issuance costs) at an effective interest rate of 6.218 %.

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

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

(8) In 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.

(9) We issued the $ 400 million aggregate principal amount of the 2035 notes for total proceeds of $ 398 million ($ 395 million net of issuance costs) at an effective interest rate of 6.815 %.

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(in millions)

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Carrying value of Senior Unsecured Notes $ 3,431 $ 3,139

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.

The following table presents interest expense related to the Senior Unsecured Notes:

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

2025 2024 2025 2024

(in millions)

Interest Expense

Convertible Notes

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

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

The following are summarized terms of the Convertible Notes as of June 30, 2025:

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

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(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) 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.

(2) In the second quarter of 2025, we used $ 220 million in proceeds from our unsecured revolving line of credit to repay the 2025 Exchangeable Senior Notes inclusive of its accrued interest which was paid at maturity in the form of an accreted premium.

For the 2028 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.

There are no cash settlement provisions for the 2025 Exchangeable Senior Notes and the exchange option can only be settled through physical delivery of our common stock.

Upon exchange of the 2028 Exchangeable Senior Notes, exchange may be settled through cash, shares of our common stock or a combination of cash and shares of our common stock, at our election (as described in the indenture related to the 2028 Exchangeable Senior Notes).

Additionally, upon the occurrence of certain fundamental changes involving us, holders of the 2025 Exchangeable Senior Notes or the 2028 Exchangeable Senior Notes may require us to redeem all or a portion of their notes for cash at a price of 100 % of the principal amount outstanding, plus accrued and unpaid interest.

Additionally, upon the occurrence of certain fundamental changes involving us, holders of the 2028 Exchangeable Senior Notes may require us to redeem all or a portion of their notes for cash at a price of 100 % of the principal amount outstanding, plus accrued and unpaid interest.

We may redeem the 2028 Exchangeable Senior Notes in whole or in part, at our option, on or after August 20, 2026 and prior to the 62nd scheduled trading day immediately preceding the maturity date for such notes, if certain conditions are met including our common stock trading above 130 % of the exchange price for at least 20 trading days, as set forth in the indenture relating to the 2028 Exchangeable Senior Notes.

Any shares of our common stock issuable upon exchange of the 2025 Exchangeable Senior Notes or 2028 Exchangeable Senior Notes will have certain registration rights.

We have issued $ 200 million of 0.00 % Exchangeable Senior Notes due 2025 which are guaranteed by us and certain of our subsidiaries and may, under certain conditions, be exchangeable for our common stock.

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.

Any shares of our common stock issuable upon exchange of the 2028 Exchangeable Senior Notes will have certain registration rights.

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.

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(in millions)

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Accrued interest 6 6

Premium 20 18

Unamortized financing costs ( 6 ) ( 7 )

Carrying value of Convertible Notes

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

The following table presents interest expense related to our Convertible Notes:

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

2025 2024 2025 2024

(in millions)

Interest Expense

$ 5 $ 6 $ 11 $ 13

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.

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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 %.

As of June 30, 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.

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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:

Amounts which were due under the term loan facility as of June 30, 2025 are as follows:

Future maturities

(in millions)

April 1, 2025 to December 31, 2025 $ 9

July 1, 2025 to December 31, 2025 $ 6

Unamortized Financing Costs ( 3 )

Carrying Value $ 238

The Unsecured Term Loan Facility 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 term loan facility also includes customary events of default and remedies.

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

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:

As of June 30, 2025, the outstanding principal and accrued interest balance is $ 162 million, the interest rate as of the last rate reset is 6.70 %, and we have receivables, retained interests in securitization trusts, and equity method investments pledged with a carrying value of $ 416 million.

Amounts which were due under the Secured Term Loan Facility as of June 30, 2025 are as follows:

Future maturities

(in millions)

April 1, 2025 to December 31, 2025 $ 8

July 1, 2025 to December 31, 2025 $ 6

Unamortized Financing Costs ( 2 )

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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

June 30, 2025 December 31, 2024 Interest

Rate Maturity Date June 30, 2025 December 31, 2024 Description

of Assets Pledged

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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.

(2) The total collateral pledged against our non-recourse debt was $ 305 million and $ 307 million as of June 30, 2025 and December 31, 2024, respectively.

These amounts include $ 16 million and $ 20 million of restricted cash pledged for debt service payments as of June 30, 2025 and December 31, 2024, respectively.

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

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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.

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

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.

We were in compliance with all covenants as of June 30, 2025 and December 31, 2024.

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 March 31, 2025, were as follows:

The stated minimum maturities of non-recourse debt as of June 30, 2025, were as follows:

Future minimum maturities

(in millions)

April 1, 2025 to December 31, 2025 $ 7

July 1, 2025 to December 31, 2025 $ 6

Thereafter 76

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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.

To the extent there are additional cash flows received from the pledged assets 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.

To the extent there are not sufficient cash flows received from those assets 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 March 31, 2025:

We have entered into certain derivatives designed to hedge interest rate risk with certain of our floating-rate interest exposures, 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.

From time to time we may also enter into forward-starting interest rate swaps to hedge interest rate risks associated with incremental debt we expect to issue.

We have entered into the following derivative transactions that are designated as cash flow hedges as of June 30, 2025:

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

Index March 31, 2025 December 31, 2024

Index June 30, 2025 December 31, 2024

$ in millions

Interest rate swap 1 month SOFR 3.79 % $ 200 $ ( 4 ) $ 3 March 2023 to March 2033

Interest rate swap Overnight SOFR 2.98 % 400 16 24 June 2026 to June 2033

Interest rate swap Overnight SOFR 2.98 % 150 (1)

5 24 June 2026 to June 2033

Interest rate swap Overnight SOFR 3.09 % 600 16 32 June 2026 to June 2033

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$ 1,740 $ 14 67

(1 ) In the second quarter of 2025, we partially settled $ 250 million notional of this hedge, which previously had a notional value of $ 400 million, for cash proceeds of approximately $ 11 million.

The associated benefit in AOCI will be released into net income as a benefit to interest expense over the period of the forecasted transaction.

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

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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 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.

As of June 30, 2025, all of our derivatives were designated as hedging instruments which were deemed to be effective.

As of June 30, 2025, we have posted $ 7 million of collateral, which is netted against the derivative liability included in accounts payable, accrued expenses, and other on our balance sheet.

We hold $ 19 million of collateral posted by our counterparties, $ 17 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.

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Amounts released into interest expense ( 2 )

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,

Ending Balance - June 30, 2025

We expect a net benefit of approximately $ 2 million to be released out of AOCI into interest expense over the 12 months following June 30, 2025.

The below table shows the benefit (expense) included in interest expense as a result of our hedging activities for the three and six months ended June 30, 2025 and 2024, respectively.

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

2025 2024 2025 2024

(in thousands)

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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 %.

In April 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 had a term of December 2025 to December 2035, were indexed to Overnight SOFR, and had a range of fixed rates between 3.46 % and 3.59 %.

We financially settled these instruments for cash proceeds of $ 7 million in June of 2025 in connection with the issuance of the 2031 Notes and the 2035 Notes described in Note 8 above.

The associated benefit in AOCI will be released into net income as a benefit to interest expense over the period of the forecasted transaction.

Commitments and Contingencies

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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 March 31, 2025, there have been no such actions resulting in claims against the Company.

As of June 30, 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 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.

As of June 30, 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 June 30, 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.

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 May 2025.

As of March 31, 2025, our maximum obligation under this guarantee is approximately $ 87 million.

As of June 30, 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 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.

We recorded an income tax expense of approximately $ 38 million and $ 62 million for the three and six months ended June 30, 2025, compared to a $ 10 million and $ 57 million income tax expense in the three and six months ended June 30, 2024.

For the three and six months ended June 30, 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

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

8/7/2025 10/3/2025 10/17/2025 $ 0.420

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

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Q1 2025 ATM 1.629 29.07 (2)

Q2 2025 ATM 2.755 26.91 (2)

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

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

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.

During the six months ended June 30, 2025, our board of directors awarded employees and directors 849,478 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 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.

For the three and six months ended June 30, 2025 we recorded $ 6 million and $ 15 million of stock based compensation, respectively, compared to $ 8 million and $ 15 million during the three and six months ended June 30, 2024, respectively.

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

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

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

The total unrecognized compensation expense related to awards of shares of restricted stock and restricted stock units was approximately $ 29 million as of June 30, 2025.

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

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Forfeited ( 32,826 ) 28.04 ( 0.9 )

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

Ending Balance — June 30, 2025 441,164 $ 28.58 $ 12.6

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

11 unchanged sentences

Forfeited ( 26,810 ) 54.04 ( 1.5 )

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

Ending Balance — June 30, 2025 48,450 $ 39.29 $ 1.9

(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 ( 10,800 ) 27.77 ( 0.3 )

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

Ending Balance — June 30, 2025 640,357 $ 28.15 $ 18.1

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

11 unchanged sentences

Forfeited ( 125,550 ) 54.77 ( 6.9 )

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

Ending Balance — June 30, 2025 529,793 $ 40.68 $ 21.6

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

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Forfeited — — —

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

Ending Balance — June 30, 2025 247,759 $ 27.30 $ 6.8

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

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

Three Months Ended March 31,

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

2025 2024 2025 2024

(in millions, except share and per share data)

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Weighted-average number of OP units 1,794,515 1,529,282 1,621,906 1,461,584

As of March 31,

As of June 30,

Participating securities:

Unvested restricted common stock and unvested LTIP Units with time-based vesting conditions outstanding at period end 1,081,522 858,423

Three Months Ended March 31,

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

2025 2024 2025 2024

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

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Equity Method Investments

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

As of both June 30, 2025 and December 31, 2024, we had 47 investments 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.

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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.

As of June 30, 2025 and December 31, 2024, we have accumulated other comprehensive income net of tax effect of $ 34 million and $ 23 million respectively, related to the interest rate swaps designated as cash flow hedges by our investees.

Palmetto HASI Holdings LLC

2 unchanged sentences

Balance Sheet

As of December 31, 2024

As of March 31, 2025

Current assets $ 35 $ 877 $ 912

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Income Statement

For the year ended December 31, 2024

For the three months ended March 31, 2025

Revenue 8 298 306

1 unchanged sentence

Net income (loss) ( 27 ) ( 164 ) ( 191 )

For the year ended December 31, 2023

For the the three months ended March 31, 2024

Revenue — 257 257

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