HA Sustainable Infrastructure Capital, Inc. 10-Q

Item 1. Financial Statements HA SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) June 30, 2025 (unaudited) December 31, 2024 Assets Cash and cash equivalents $ 86,508 $ 129,758 Equity method investments 4,082,998 3,612,394 Receivables, net of allowance of $ 55 million and $ 50 million, respectively 3,025,993 2,895,837 Receivables held-for-sale 43,489 75,556 Real estate and debt securities 15,903 9,802 Retained interests in securitization trusts, net of allowance of $ 3 million and $ 3 million, respectively 272,194 248,688 Other assets 69,081 108,210 Total Assets $ 7,596,166 $ 7,080,245 Liabilities and Stockholders’ Equity Liabilities: Accounts payable, accrued expenses and other $ 292,074 $ 275,639 Credit facilities 1,116 1,001 Commercial paper notes 356,197 100,057 Term loans payable 397,893 407,978 Non-recourse debt (secured by assets of $ 305 million and $ 307 million, respectively) 126,472 131,589 Senior unsecured notes 3,431,248 3,139,363 Convertible notes 402,531 619,543 Total Liabilities 5,007,531 4,675,170 Stockholders’ Equity: Preferred stock, par value $ 0.01 per share, 50,000,000 shares authorized, no shares issued and outstanding — — Common stock, par value $ 0.01 per share, 450,000,000 shares authorized, 123,577,987 and 118,960,353 shares issued and outstanding, respectively 1,236 1,190 Additional paid-in capital 2,723,636 2,592,964 Accumulated deficit ( 245,392 ) ( 297,499 ) Accumulated other comprehensive income (loss) 30,738 40,101 Non-controlling interest 78,417 68,319 Total Stockholders’ Equity 2,588,635 2,405,075 Total Liabilities and Stockholders’ Equity $ 7,596,166 $ 7,080,245 See accompanying notes. - 1 - HA SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) For the Three Months Ended June 30, For the Six Months Ended June 30, 2025 2024 2025 2024 Revenue 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 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 Expenses Interest expense 79,746 59,530 144,424 121,403 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 General and administrative 6,497 7,955 15,874 17,007 Total expenses 105,412 84,101 208,258 177,723 Income (loss) before equity method investments ( 19,727 ) 10,416 ( 25,632 ) 22,609 Income (loss) from equity method investments 157,680 26,874 245,667 185,424 Income (loss) before income taxes 137,953 37,290 220,035 208,033 Income tax (expense) benefit ( 38,158 ) ( 10,346 ) ( 62,055 ) ( 56,541 ) Net income (loss) $ 99,795 $ 26,944 $ 157,980 $ 151,492 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 Basic earnings (loss) per common share $ 0.80 $ 0.23 $ 1.28 $ 1.31 Diluted earnings (loss) per common share $ 0.74 $ 0.23 $ 1.18 $ 1.22 Weighted average common shares outstanding—basic 121,515,164 114,329,692 120,454,366 113,473,750 Weighted average common shares outstanding—diluted 137,740,850 114,433,285 137,830,564 131,922,504 See accompanying notes. - 2 - HA SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (DOLLARS IN THOUSANDS) (UNAUDITED) 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 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 $ 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 Comprehensive income (loss) 92,727 39,048 148,447 179,738 Less: 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 See accompanying notes. - 3 - HA SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (AMOUNTS IN THOUSANDS) (UNAUDITED) Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Non-controlling interests Total Shares Amount 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 retained interests in securitization trusts — — — — 1,834 43 1,877 Unrealized gain (loss) on interest rate swaps — — — — ( 8,771 ) ( 174 ) ( 8,945 ) Issued shares of common stock 2,755 27 73,234 — — — 73,261 Equity-based compensation — — 1,086 — — 4,510 5,596 Other 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. - 4 - Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Non-controlling interests Total Shares Amount Balance at December 31, 2024 118,960 $ 1,190 $ 2,592,964 $ ( 297,499 ) $ 40,101 $ 68,319 $ 2,405,075 Net income (loss) — — — 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 ) Issued shares of common stock 4,485 44 122,684 — — — 122,728 Equity-based compensation — — 2,383 — — 13,037 15,420 Other 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 June 30, 2024 115,152 $ 1,152 $ 2,467,512 $ ( 249,277 ) $ 41,052 $ 62,728 $ 2,323,167 See accompanying notes. - 5 - HA SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS) (UNAUDITED) Six Months Ended June 30, 2025 2024 Cash flows from operating activities Net income (loss) $ 157,980 $ 151,492 Adjustments to reconcile net income (loss) to net cash provided by operating activities: 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 expenses 18,272 17,341 Equity method investments ( 171,121 ) ( 161,958 ) Non-cash gain on securitization ( 11,407 ) ( 53,891 ) (Gain) loss on sale of receivables and debt securities — 8,532 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 debt securities ( 27,371 ) ( 33,242 ) Cash received (paid) upon hedge settlement 17,696 19,261 Other 8,421 ( 2,002 ) Net cash provided by (used in) operating activities 42,450 ( 3,886 ) Cash flows from investing activities Equity method investments ( 299,980 ) ( 168,896 ) 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 ) Principal collections from receivables 172,080 470,788 Proceeds from sales of receivables 8,344 99,166 Proceeds from sale of real estate — 115,767 Purchases of debt securities and retained interests in securitization trusts ( 6,545 ) — Collateral provided to hedge counterparties ( 4,110 ) ( 1,140 ) Collateral received from hedge counterparties 5,340 4,010 Other 8,230 ( 680 ) Net cash provided by (used in) investing activities ( 384,161 ) 185,205 Cash flows from financing activities Proceeds from credit facilities 395,000 616,792 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 ) Proceeds from issuance of non-recourse debt — 94,000 Principal payments on non-recourse debt ( 4,950 ) ( 69,958 ) Proceeds from (repayments of) commercial paper notes 256,500 80,000 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 ) Redemption premium paid ( 6,645 ) — Payment of financing costs ( 7,195 ) ( 19,711 ) Collateral provided to hedge counterparties ( 110,320 ) ( 90,860 ) Collateral received from hedge counterparties 71,890 114,700 Other ( 6,402 ) ( 1,435 ) Net cash provided by (used in) financing activities 295,361 ( 95,053 ) Increase (decrease) in cash, cash equivalents, and restricted cash ( 46,350 ) 86,266 Cash, cash equivalents, and restricted cash at beginning of period 150,156 75,082 Cash, cash equivalents, and restricted cash at end of period $ 103,806 $ 161,348 Interest paid $ 146,497 $ 110,097 Supplemental disclosure of non-cash activity Interests retained from securitization transactions $ 18,662 $ 28,164 Equity method investments retained from securitization and deconsolidation transactions — 32,564 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 29,051 — See accompanying notes. - 6 - HA SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 2025 1. The Company 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. 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. 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. We operate our business through, and along with two of our wholly owned subsidiaries serve as the general partners of, our operating partnership subsidiary, Hannon Armstrong Sustainable Infrastructure, L.P., (the “Operating Partnership”), which was formed to acquire and directly or indirectly own our assets. 2. Summary of Significant Accounting Policies Basis of Presentation The preparation of financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and such differences could be material. These financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2024, as filed with the SEC. In the opinion of management, all adjustments necessary to present fairly our financial position, results of operations and cash flows have been included. Our results of operations for the three- and six-month periods ended June 30, 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. Certain amounts in the prior years have been reclassified to conform to the current year presentation. The consolidated financial statements include our accounts and controlled subsidiaries, including the Operating Partnership. All material intercompany transactions and balances have been eliminated in consolidation. Following the guidance for non-controlling interests in Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”), references in this report to our earnings per share and our net income and stockholders’ equity attributable to common stockholders do not include amounts attributable to non-controlling interests. Consolidation 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 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. - 7 - Certain of our equity method investments were determined to be interests in VIEs in which we are not the primary beneficiary, as we do not direct the significant activities of these entities, and thus we account for those investments as Equity Method Investments as discussed below. Our maximum exposure to loss through these investments is typically limited to their recorded values. However, we may provide financial commitments to these VIEs or guarantee certain of their obligations. Certain other entities in which we have equity investments have been assessed to be voting interest entities and as we exert significant influence rather than control through our ownership of voting interests, we do not consolidate them and thus account for them as equity method investments described below. Equity Method Investments We have made equity investments, typically in structures where we have a preferred return position. 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. Investors in a preferred return position, if any, typically receive a priority distribution of all or a portion of the project’s cash flows, and in some cases, tax attributes. 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 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, 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. Cash distributions received from each equity method investment are classified as operating activities to the extent of cumulative earnings for each investment in our consolidated statements of cash flows. Our initial investment and additional cash distributions beyond the amounts that are classified as operating activities are classified as investing activities in our consolidated statements of cash flows. We typically recognize earnings one quarter in arrears for these investments to allow for the receipt of financial information. Our proportionate share of any revenue earned from equity method investees is eliminated through the income (loss) from equity method investment line of our income statement. We evaluate quarterly whether the current carrying value of our investments accounted for using the equity method have an other than temporary impairment (“OTTI”). An OTTI occurs when the estimated fair value of an investment is below the carrying value and the difference is determined to not be recoverable in the near term. First, we consider both qualitative and quantitative evidence in determining whether there is an indicator of a loss in investment value below carrying value. After considering the weight of available evidence, if it is determined that there is an indication of loss in investment value, we will perform a fair value analysis. If the resulting fair value is less than the carrying value, we will determine if this loss in value is OTTI, and we will recognize any OTTI in the income statement as an impairment. This evaluation requires significant judgment regarding, but not limited to, the severity and duration of the impairment; the ability and intent to hold the securities until recovery; financial condition, liquidity, and near-term prospects of the issuer; specific events; and other factors. Receivables 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. Our ability and intent to hold certain receivables may change from time to time depending on a number of factors including economic, liquidity and capital market conditions. 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. 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 have classified as held-for-sale at - 8 - 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. Receivables from certain projects are subordinate to preferred investors in a project who are allocated the majority of such project’s cash in the early years of the investment. Accordingly, such receivables may include the ability to defer scheduled interest payments in exchange for increasing our receivable balance. 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 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. 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. If a receivable’s status significantly improves regarding the debtor’s ability to service the debt or other obligations, we will remove it from non-accrual status. We determine our allowance based on the current expectation of credit losses over the contractual life of our receivables as required by Topic 326. We use a variety of methods in developing our allowance, including discounted cash flow analysis and probability-of-default/loss given default (“PD/LGD”) methods. In developing our estimates, we consider our historical experience with our and similar assets in addition to our view of both current conditions and what we expect to occur within a period of time for which we can develop reasonable and supportable forecasts, typically two years . For periods following the reasonable and supportable forecast period, we revert to historical information when developing assumptions used in our estimates. 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 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. We have made certain loan commitments that are within the scope of Topic 326. When estimating an allowance for these loan commitments we consider the probability of certain amounts to be funded and apply either a discounted cash flow or PD/LGD methodology as described above. We charge off receivables against the allowance, if any, when we determine the unpaid principal balance is uncollectible, net of recovered amounts. For those assets where we record our allowance using a discounted cash flow method, we have elected to record the change in allowance due solely to the passage of time through the provision for loss on receivables in our income statement. 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. Securitization of Assets We have established various special purpose entities or securitization trusts for the purpose of securitizing certain financial assets. We determined that the trusts used in securitizations are VIEs, as defined in ASC 810. When we conclude that we are not the primary beneficiary of certain trusts because we do not have power over those trusts’ significant activities, we do not consolidate the trust. We typically serve as primary or master servicer of these trusts; however, as the servicer, we do not have the power to make significant decisions impacting the performance of the trusts. We account for transfers of financial assets to these securitization trusts as sales pursuant to ASC 860, Transfers and Servicing (“ASC 860”), when we have concluded the transferred assets have been isolated from the transferor (i.e., put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership) and we have surrendered control over the transferred assets. When we are unable to conclude that we have been sufficiently isolated from the securitized financial assets, we treat such trusts as secured borrowings, retaining the assets on our balance sheet and recording the amounts due to the trust investor as non-recourse debt. Transfers of non-financial assets are accounted for under ASC 610-20, Gains and Losses from the Derecognition of Non-financial Assets , and those transfers are accounted for as sales when we have concluded that we have transferred control of the non-financial asset. - 9 - 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 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. For retained interests, we generally estimate fair value based on the present value of future expected cash flows using our best estimates of the key assumptions of anticipated losses, prepayment rates, and current market discount rates commensurate with the risks involved. Cash flows related to our securitizations at origination are classified as operating activities in our consolidated statements of cash flows. 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 assets and the revised expected cash flows. This yield is used prospectively to recognize our income related to these assets. 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 Cash and cash equivalents include short-term government securities, certificates of deposit and money market funds, all of which had an original maturity of three months or less at the date of purchase. These securities are carried at their purchase price, which approximates fair value. Restricted Cash Restricted cash includes cash and cash equivalents set aside with certain lenders primarily to support obligations outstanding as of the balance sheet dates. Restricted cash is reported as part of other assets in our consolidated balance sheets. Refer to Note 3 to our financial statements in this Form 10-Q for disclosure of the balances of restricted cash included in other assets. Convertible Notes We have issued convertible and exchangeable senior unsecured notes (together, “Convertible Notes”) that are accounted for in accordance with ASC 470-20, Debt with Conversion and Other Options , and ASC 815, Derivatives and Hedging (“ASC 815”) . Under ASC 815, issuers of certain convertible or exchangeable debt instruments are generally required to separately account for the conversion or exchange option of the debt instrument as either a derivative or equity, unless it meets the scope exemption for contracts indexed to, and settled in, an issuer’s own equity. Since our conversion or exchange options are both indexed to our equity and can be settled in our common stock at our option, we have met the scope exemption, and therefore, we do not separately account for the embedded conversion or exchange options. The initial issuance and any principal repayments are classified as financing activities and interest payments are classified as operating activities in our consolidated statements of cash flows. 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 We use derivative financial instruments, including interest rate swaps and collars, to manage, or hedge, our interest rate risk exposures associated with new debt issuances and anticipated refinancings of existing debt, to manage our exposure to fluctuations in interest rates on floating-rate debt, and to optimize the mix of our fixed and floating-rate debt. Our objective is to reduce the impact of changes in interest rates on our results of operations and cash flows. 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 asset position) or accounts payable, accrued expenses and other (if in an unrealized liability position) and in net unrealized gains and losses in AOCI as described below. The cash settlements of our interest rate swaps, if any, are classified as operating activities in our consolidated statements of cash flows. 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 - 10 - qualify for hedge accounting. Instruments that meet the required hedging criteria are formally designated as hedging instruments at the inception of the derivative contract. 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. 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. We assess, both at the inception of the hedge and on an ongoing basis, whether the derivatives designated as cash flow hedges are highly effective in offsetting the changes in cash flows of the hedged items. We also assess on an ongoing basis whether the forecasted transactions remain probable, and discontinue hedge accounting if we conclude that they do not. We do not hold derivatives for trading purposes. Any collateral posted or received as credit support against derivative positions are netted against those derivatives in our balance sheets. When our collateral account with any particular counterparty is in a liability position, we include inflows and outflows related to those collateral postings within financing activities in our statement of cash flows. When our collateral account with any particular counterparty is in an asset position, we include inflows and outflows related to those collateral postings within investing activities in our statement of cash flows. The inflows and outflows related to instruments designated as cash flow hedges are included within our statement of cash flows in the same section as the hedged item, which is typically operating activities for our instruments which hedge interest rate risk exposures. Interest rate derivative contracts contain a credit risk that counterparties may be unable to fulfill the terms of the agreement. We attempt to minimize that risk by evaluating the creditworthiness of our counterparties, who are limited to major banks and financial institutions, and do not anticipate nonperformance by the counterparties due to their requirement to post collateral. We have entered into certain capped call transactions to mitigate the economic dilution that may result from the conversion or exchange of certain of our Convertible Notes. 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. Income Taxes We account for income taxes under ASC 740, Income Taxes (“ASC 740”) using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. We evaluate any deferred tax assets for valuation allowances based on an assessment of available evidence including sources of taxable income, prior years taxable income, any existing taxable temporary differences and our future investment and business plans that may give rise to taxable income. We treat any tax credits we receive from our equity investments in renewable energy projects as reductions of federal income taxes of the year in which the credit arises. We apply ASC 740 with respect to how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. This guidance requires the accounting and disclosure of tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are “more likely than not” to be sustained by the applicable tax authority. We are required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which includes U.S. federal and certain states. Equity-Based Compensation 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 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. In addition to performance or market targets, income or gain must be allocated by our Operating Partnership to certain LTIP Units issued by our Operating Partnership so that the capital accounts of such units are equalized with the capital accounts of other holders of OP units before parity is reached and LTIP Units can be converted to limited partnership units. 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 - 11 - 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. For awards where the vesting is contingent upon achievement of certain performance targets, compensation expense is measured based on the fair market value on the grant date and is recorded over the requisite service period (which includes the performance period). Actual performance results at the end of the performance period determines the number of shares that will ultimately be awarded. We have also issued awards where the vesting is contingent upon service being provided for a defined period and certain market conditions being met. 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 is developed by an independent appraiser using a Monte Carlo simulation. Forfeitures of unvested awards are recognized as they occur. We have a retirement policy that 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 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 performance measures and without the requirement for continued employment. Employees are eligible for the retirement policy upon meeting age and years of service criteria. We record compensation expense for unvested grants through the date in which an employee meets the retirement criteria. Earnings Per Share 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). 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. Other potentially dilutive common stock instruments include our unvested restricted stock, other equity-based awards, and Convertible Notes. The restricted stock and other equity-based awards are included if they are dilutive using the treasury stock method. The treasury stock method assumes that theoretical proceeds received for future service provided is used to purchase shares of treasury stock at the average market price per share of common stock, which is deducted from the total shares of potential common stock included in the calculation. When unvested grants are dilutive, the earnings allocated to these dilutive unvested grants are not deducted from the net income attributable to controlling stockholders when calculating diluted earnings per share. The Convertible Notes are included if they are dilutive using the if-converted method, which removes interest expense related to the Convertible Notes from the net income attributable to controlling stockholders and includes the weighted average shares of potential common stock over the period issuable upon conversion or exchange of the note. No adjustment is made for shares of potential common stock that are anti-dilutive during a period. Our capped call transactions are anti-dilutive and therefore their impact will be excluded from earnings per share. Segment Reporting 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 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. Segment asset amounts are used by the CODM when evaluating the return on investment on our Portfolio. Recently Issued Accounting Pronouncements 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. - 12 - 3. Fair Value Measurements Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The fair value accounting guidance provides a three-level hierarchy for classifying financial instruments. The levels of inputs used to determine the fair value of our financial assets and liabilities carried on the balance sheet at fair value and for those which only disclosure of fair value is required are characterized in accordance with the fair value hierarchy established by ASC 820, Fair Value Measurements. Where inputs for a financial asset or liability fall in more than one level in the fair value hierarchy, the financial asset or liability is classified in its entirety based on the lowest level input that is significant to the fair value measurement of that financial asset or liability. We use our judgment and consider factors specific to the financial assets and liabilities in determining the significance of an input to the fair value measurements. As of June 30, 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: • Level 1 — Quoted prices (unadjusted) in active markets that are accessible at the measurement date. • Level 2 — Observable prices that are based on inputs not quoted on active markets but corroborated by market data. • Level 3 — Unobservable inputs are used when little or no market data is available. 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. An increase in these inputs would result in a lower fair value and a decline would result in a higher fair value. Our Senior Unsecured Notes (as defined below) and Convertible Notes are valued using a market-based approach and observable prices. The receivables held-for-sale, if any, are carried at the lower of cost or fair value, as determined on an individual asset basis. As of June 30, 2025 Fair Value Carrying Value Level (in millions) Assets Receivables $ 2,845 $ 3,026 Level 3 Receivables held-for-sale 50 43 Level 3 Debt securities (1) 13 13 Level 3 Retained interests in securitization trusts (2) 272 272 Level 3 Derivative assets 21 21 Level 2 Liabilities (3) Commercial paper notes 356 356 Level 3 Term loans payable 403 403 Level 3 Non-recourse debt 129 130 Level 3 Senior unsecured notes 3,426 3,456 Level 2 Convertible Notes 472 409 Level 2 Derivative liabilities 7 7 Level 2 (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. - 13 - As of December 31, 2024 Fair Value Carrying Value Level (in millions) Assets Receivables $ 2,700 $ 2,896 Level 3 Receivables held-for-sale 79 76 Level 3 Debt securities (1) 7 7 Level 3 Retained interests in securitization trusts (2) 249 249 Level 3 Derivative assets 72 72 Level 2 Liabilities (3) Credit facilities $ 1 $ 1 Level 3 Commercial paper notes 100 100 Level 3 Term loan facilities 415 415 Level 3 Non-recourse debt 132 136 Level 3 Senior unsecured notes 3,098 3,162 Level 2 Convertible Notes: 2025 Exchangeable Senior Notes 214 218 Level 2 2028 Exchangeable Senior Notes 470 408 Level 2 Total Convertible Notes 684 626 Derivative liabilities 3 3 Level 2 (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. 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 retained interests in securitization trusts 5 4 9 8 Additions to retained interests in securitization trusts 11 21 19 28 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 retained interests in securitization trusts in an unrealized loss position: Estimated Fair Value Unrealized Losses (1) Count of Assets Assets with a loss shorter than 12 months Assets with a loss longer than 12 months Assets with a loss shorter than 12 months Assets with a loss longer than 12 months Assets with a loss shorter than 12 months Assets with a loss longer than 12 months (in millions) 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 assets until a recovery of fair value. - 14 - 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 Our financial statements may include non-recurring fair value measurements related to acquisitions and non-monetary transactions, if any. Assets acquired in a business combination, if any, are recorded at their fair value. We may use third-party valuation firms to assist us with developing our estimates of fair value. Concentration of Credit Risk 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. Additionally, certain of our investments are collateralized by projects concentrated in certain geographic regions throughout the United States. These investments typically have structural credit protections to mitigate our risk exposure and, in most cases, the projects are insured for estimated physical loss, which helps to mitigate the possible risk from these concentrations. We had cash deposits that are subject to credit risk as shown below: June 30, 2025 December 31, 2024 (in millions) Cash deposits $ 87 $ 130 Restricted cash deposits (included in other assets) 17 20 Total cash deposits $ 104 $ 150 Amount of cash deposits in excess of amounts federally insured $ 102 $ 148 4. Non-Controlling Interest Units of limited partnership interests in the Operating Partnership (“OP units”) that are owned by limited partners other than us are included in non-controlling interest on our consolidated balance sheets. The non-controlling interest holders are generally allocated their pro rata share of income, other comprehensive income and equity transactions. 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. 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. LTIP Units issued to employees are held by HASI Management HoldCo LLC. 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 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. Once this has occurred, the LTIP Units will achieve full parity with the OP units for all purposes, including with respect to liquidating distributions and redemption rights. In addition to these attributes, there are vesting and settlement conditions similar to our other equity-based awards as discussed in Notes 2 and 11 to our financial statements in this Form 10-Q. - 15 - 5. Securitization of Financial Assets The following summarizes certain transactions with securitization trusts: For the Three Months Ended June 30, For the Six Months Ended June 30, 2025 2024 2025 2024 (in millions) Gains on securitizations $ 8 $ 26 $ 28 $ 55 Cost of financial assets securitized 84 299 278 758 Proceeds from securitizations 92 325 306 813 Cash received from retained interests in securitization trusts and servicing 7 3 11 6 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. 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 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. - 16 - 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 June 30, 2025 Three 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 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. 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. 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. 6. Our Portfolio 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 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. 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 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. - 17 - The following is an analysis of the Performance Ratings of our Portfolio as of June 30, 2025, which is assessed quarterly: Portfolio Performance 1 (1) 2 (2) 3 (3) Total Commercial Government Commercial Commercial Receivable vintage (4) (dollars in millions) 2025 $ 48 $ — $ — $ — $ 48 2024 64 — — — 64 2023 975 — 29 — 1,004 2022 949 — — — 949 2021 289 — — — 289 2020 173 — — — 173 Prior to 2020 521 33 — — 554 Total receivables held-for-investment 3,019 33 29 — 3,081 Less: Allowance for loss on receivables ( 55 ) — — — ( 55 ) Net receivables held-for-investment 2,964 33 29 — 3,026 Receivables held-for-sale 40 3 — — 43 Debt securities and real estate 14 2 — — 16 Equity method investments (5) 4,050 — 33 — 4,083 Total $ 7,068 $ 38 $ 62 $ — $ 7,168 Percent of Portfolio 99 % — % 1 % — % 100 % (1) This category includes our assets where based on our credit criteria and performance to date we believe that our risk of not receiving our invested capital remains low. (2) This category includes our assets where based on our credit criteria and performance to date we believe there is a moderate level of risk to not receiving some or all of our invested capital. 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 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. (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. Receivables 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. - 18 - 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 June 30, 2025 and December 31, 2024: June 30, 2025 December 31, 2024 Gross Carrying Value Loan Funding Commitments Allowance Gross Carrying Value Loan Funding Commitments Allowance (in millions) Commercial (1) 3,048 331 55 2,911 545 50 Government (2) $ 33 $ — $ — $ 35 $ — $ — Total $ 3,081 $ 331 $ 55 $ 2,946 $ 545 $ 50 (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. 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. All of our commercial receivables are included in Performance Rating 1 in the Portfolio Performance table above. For those assets in Performance Rating 1, the credit worthiness of the obligor combined with the various structural protections of our assets cause us to believe we have a low risk we will not receive our invested capital, however we recorded a $ 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 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. Risk characteristics of our government receivables include the energy savings or the power output of the projects and the ability of the government obligor to generate revenue for debt service, via taxation or other means. Transactions may have guarantees of energy savings or other performance support from third-party service providers, which typically are entities, directly or whose ultimate parent entity is, rated investment grade by an independent rating agency. All of our government receivables are included in Performance Rating 1 in the Portfolio Performance table above. Our allowance for government receivables is primarily calculated by using PD/LGD methods as discussed in Note 2 to our financial statements in this Form 10-Q. Our expectation of credit losses for these receivables is immaterial given the high credit-quality of the obligors. The following table reconciles our beginning and ending allowance for loss on receivables by Portfolio Segment: Three months ended June 30, 2025 Three months ended June 30, 2024 Government Commercial Government Commercial (in millions) Beginning balance $ — $ 54 $ — $ 52 Provision for loss on receivables — 1 — ( 4 ) 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 June 30, 2025: Total Less than 1 year 1-5 years 5-10 years More than 10 years (dollars in millions) Maturities by period (excluding allowance) $ 3,081 $ 70 $ 1,151 $ 766 $ 1,094 Weighted average yield by period 8.8 % 9.2 % 8.9 % 9.2 % 8.3 % - 19 - 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 June 30, 2025, we held the following equity method investments: Investee Carrying Value (in millions) Jupiter Equity Holdings LLC $ 627 CarbonCount Holdings 1 LLC 559 Daggett Renewable HoldCo LLC 439 Lighthouse Renewable HoldCo 2 LLC 341 Other equity method investments 2,117 Total equity method investments $ 4,083 Jupiter Equity Holdings LLC 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 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. Those loans are included in our Related Party Transactions disclosures below. The projects typically feature cash flows from fixed-price power purchase agreements and financial hedges contracted with highly creditworthy off-takers and counterparties. Jupiter is governed by an amended and restated limited liability company agreement, dated July 1, 2020, by and among the members, one of our subsidiaries and a subsidiary of the project sponsor, which contains customary terms and conditions. We own 100 % of the Class A Units in Jupiter corresponding to 49 % of the distributions from Jupiter subject to the preferences discussed below. Most major decisions that may impact Jupiter, its subsidiaries or its assets, require the majority vote of a four person committee on which we and the project sponsor each have two representatives. Through Jupiter, we will be entitled to preferred distributions until certain return targets are achieved. Once these return targets are achieved, distributions will be allocated approximately 33 % to us and approximately 67 % to the sponsor. We and the sponsor each have a right of first offer if the other party desires to transfer any of its equity ownership to a third party. We use the equity method of accounting to account for our preferred equity interest in Jupiter, and have elected to recognize earnings from this investment one quarter in arrears to allow for the receipt of financial information. Daggett Renewable HoldCo LLC 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 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. Daggett is governed by a limited liability company agreement between us and the sponsor serving as managing member and contain customary terms and conditions. Most major decisions that may impact Daggett, its subsidiaries or its assets, require a unanimous vote of the representatives present at a meeting of a review committee in which a quorum is present. The review committee is a four person committee, which includes two of our representatives and two sponsor representatives. Commencing on a certain date following the effective date of the applicable limited liability company agreement, we will be entitled to preferred distributions until certain return targets of each investment are achieved. 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 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 - 20 - 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. The Lighthouse 2 projects feature contracted cash flows with a diversified group of predominately investment grade corporate and university offtakers. Lighthouse 2 is governed by a limited liability company agreement between us and the sponsor serving as managing member and contain customary terms and conditions. Most major decisions that may impact Lighthouse 2, its subsidiaries or its assets, require a unanimous vote of the representatives present at a meeting of a review committee in which a quorum is present. The review committee is a four person committee, which includes two of our representatives and two sponsor representatives. Commencing on a certain date following the effective date of the applicable limited liability company agreement, we will be entitled to preferred distributions until certain return targets of each investment are achieved. 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 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 CarbonCount Holdings 1 LLC 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. L.P. (“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. 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. Pursuant to the service agreement, the Board has delegated to the Service Providers certain rights and powers to manage the day-to-day business and affairs of CCH1, while retaining control over the significant decision making of CCH1. We account for our investment in CCH1 as an equity method investment. The Broker-Dealer sources investment opportunities for CCH1 pursuant to the terms of the Services Agreement. Through the Broker-Dealer, HASI is obligated to present all of the investment opportunities it identifies that fit within certain predetermined criteria to the Board until either joint venture party’s commitment has been fully invested or upon the date that the 30 -month investment period described above expires or is earlier terminated. The investment criteria under the Services Agreement includes investment opportunities that we would typically have originated on our balance sheet. CCH1 pays the Broker-Dealer, for provision of the services provided, an upfront fee on each funding of investments generally equal to 1 % of the total cash consideration funded by CCH1 to the applicable investment counterparty. CCH1 also pays the Asset Manager, for provision of the services provided by it, ongoing fees in respect of asset management and administering the management and operation of CCH1, payable when deducted from CCH1’s cash available for distribution. The fee payable to the Asset Manager is calculated on the basis of certain performance thresholds and will generally not be less than 0.5 % of invested capital per annum, subject to certain limited exceptions, nor more than 1.00 %. To date, both we and KKR have each funded $ 524 million of our individual $ 1 billion commitment amount. 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. - 21 - Other Related Party Transactions Of our receivables, approximately $ 826 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. Our equity investments allow us to participate in the residual economics of those contributed assets alongside the other partner, and our rights under the project operating agreements do not allow us to make any significant unilateral decisions regarding the terms of the arrangement. These assets are bankruptcy remote from the project sponsor, and 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. 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 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 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 June 30, 2025 Three Months Ended June 30, 2024 Six Months Ended June 30, 2025 Six Months Ended June 30, 2024 (in millions) Interest income from related party loans $ 18 $ 18 $ 37 $ 39 Additional investments made in related party loans 49 33 95 94 Principal collected from related party loans 69 226 79 243 Interest collected from related party loans 24 17 40 34 7. Credit facility and commercial paper notes Unsecured revolving credit facility We have an unsecured revolving credit facility pursuant to a revolving credit agreement with a syndicate of lenders. 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 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, stock repurchases, and dividends we can declare. The unsecured revolving credit facility also includes customary events of default and remedies. 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. 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 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 - 22 - 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 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 %. 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 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 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. 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 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 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. 8. Long-term Debt 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”). 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. 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. - 23 - 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 600 (1) June 15, 2026 3.375 % June 15 and December 15 March 15, 2026 (2) 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 N/A 2031 Notes 600 (6) January 15, 2031 6.150 % January 15 and July 15 December 15, 2030 (7) 2034 Notes 1,000 (8) July 1, 2034 6.375 % July 1 and January 1 N/A 2035 Notes 400 (9) July 15, 2035 6.750 % January 15 and July 15 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. 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 at par, plus accrued and unpaid interest though the redemption date. (3) 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. 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 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. (4) 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. (5) We issued the $ 375 million aggregate principal amount of the 2030 Notes for total proceeds of $ 371 million ($ 367 million net of issuance costs) at an effective interest rate of 3.87 %. 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. (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 %. - 24 - The following table presents a summary of the components of the Senior Unsecured Notes: June 30, 2025 December 31, 2024 (in millions) Principal $ 3,425 $ 3,125 Accrued interest 40 41 Unamortized premium (discount) ( 9 ) ( 4 ) Less: Unamortized financing costs ( 25 ) ( 23 ) Carrying value of Senior Unsecured Notes $ 3,431 $ 3,139 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 45 34 89 68 Convertible Notes We have outstanding exchangeable senior notes, and have previously issued convertible senior notes, together “Convertible Notes”. Holders may convert or exchange any of their Convertible Notes into shares of our common stock at the applicable conversion or exchange ratio at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, unless the Convertible Notes have been previously redeemed or repurchased by us. The following are summarized terms of the Convertible Notes as of June 30, 2025: Outstanding Principal Amount Maturity Date Stated Interest Rate Interest Payment Dates Conversion/Exchange Ratio Conversion/Exchange Price Issuable Shares Dividend Threshold Amount (1) (in millions) (in millions) 2025 Exchangeable Senior Notes $ — (2) May 1, 2025 0.000 % N/A 17.8724 $ 55.95 — $ 0.375 2028 Exchangeable Senior Notes 403 August 15, 2028 3.750 % February 15 and August 15 36.9842 $ 27.04 14.9 $ 0.395 (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) 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. 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 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 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. We have allocated or 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. - 25 - The following table presents a summary of the components of our Convertible Notes: June 30, 2025 December 31, 2024 (in millions) Principal $ 403 $ 603 Accrued interest 6 6 Premium — 18 Less: Unamortized financing costs ( 6 ) ( 7 ) Carrying value of Convertible Notes $ 403 $ 620 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. The Capped Calls are separate transactions and are not part of the terms of the 2028 Exchangeable Senior Notes. The total premium for the Capped Calls was recorded as a reduction of additional paid-in capital. The Company used a portion of the proceeds from the 2028 Exchangeable Senior Notes to pay for the cost of the Capped Call premium. The material terms of the Capped Calls are as follows: (in millions except per share data) Aggregate cost of capped calls $ 38 Initial strike price per share $ 27.14 Initial cap price per share $ 43.42 Shares of our common stock covered by the capped calls 14.8 Expiration date August 15, 2028 - 26 - CarbonCount Term Loan Facility 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 $ 241 million. 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 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. 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, and the facility matures in 2027. Amounts which were due under the term loan facility as of June 30, 2025 are as follows: Future maturities (in millions) July 1, 2025 to December 31, 2025 $ 6 2026 12 2027 223 Total 241 Less: 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, stock repurchases and dividends we declare. The term loan facility also includes customary events of default and remedies. - 27 - Secured Term Loan 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 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 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) July 1, 2025 to December 31, 2025 $ 6 2026 12 2027 11 2028 133 Total 162 Less: Unamortized Financing Costs ( 2 ) Carrying Value $ 160 Non-recourse debt We have outstanding the following asset-backed non-recourse debt and bank loans: Outstanding Balance as of Anticipated Balance at Maturity Carrying Value of Assets Pledged as of June 30, 2025 December 31, 2024 Interest Rate Maturity Date June 30, 2025 December 31, 2024 Description of Assets Pledged (dollars in millions) HASI Harmony Issuer 93 96 6.78 % July 2043 — 266 266 Equity method investments Other non-recourse debt (1) 37 40 3.15 % - 7.23 % 2026 to 2032 17 39 41 Receivables Unamortized financing costs ( 4 ) ( 4 ) Non-recourse debt (2) $ 126 $ 132 (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 $ 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. 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 - 28 - interest. We typically act as servicer for the debt transactions. 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 June 30, 2025, were as follows: Future minimum maturities (in millions) July 1, 2025 to December 31, 2025 $ 6 2026 11 2027 14 2028 6 2029 10 2030 7 Thereafter 76 Total minimum maturities $ 130 Unamortized financing costs ( 4 ) Total non-recourse debt $ 126 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 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 assets pledged as collateral, the investor has no recourse against other corporate assets to recover any shortfalls. - 29 - Interest Rate Swaps 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 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 % 150 (1) 5 24 June 2026 to June 2033 Interest rate swap Overnight SOFR 3.09 % 600 16 32 June 2026 to June 2033 Interest rate collar 1 month SOFR 3.70 % - 4.00 % (2) 250 — — May 2023 to May 2026 Interest rate swaps Overnight SOFR 4.39 % to 4.42 % (3) 165 ( 7 ) ( 3 ) September 2023 to June 2033 Interest rate swap Overnight SOFR 3.72 % 375 4 11 June 2027 to June 2037 $ 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 %. (3) Consists of three interest rate swaps with identical maturities and effective dates. The fair values of our interest rate derivatives designated and qualifying as effective cash flow hedges are reflected in our consolidated balance sheets as a component of other assets (if in an unrealized gain position) or accounts payable, accrued expenses and other (if in an unrealized loss position) and in net unrealized gains and losses in AOCI. As of June 30, 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. 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 - December 31, 2023 $ 1 Changes in fair value 95 Amounts released into interest expense ( 10 ) Ending Balance - December 31, 2024 $ 86 Changes in fair value ( 35 ) Amounts released into interest expense ( 2 ) Ending Balance - June 30, 2025 $ 49 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. - 30 - Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 (in thousands) Interest expense $ 79,746 $ 59,530 $ 144,424 $ 121,403 Benefit (expense) included in interest expense due to hedging activities 873 2,808 1,824 5,615 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. 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. 9. Commitments and Contingencies Litigation The nature of our operations exposes us to the risk of claims and litigation in the normal course of our business. We are not currently subject to any legal proceedings that are probable of having a material adverse effect on our financial position, results of operations or cash flows. Guarantees and other commitments In connection with some of our transactions, we have provided certain limited representations, warranties, covenants and/or provided an indemnity against certain losses resulting from our own actions, including related to certain investment tax credits. As of June 30, 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 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 August 2025. 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. 10. Income Tax 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. - 31 - 11. Equity Dividends and Distributions Our board of directors declared the following dividends in 2024 and 2025: Announced Date Record Date Pay Date Amount per share 2/15/2024 4/5/2024 4/19/2024 $ 0.415 5/7/2024 7/3/2024 7/12/2024 $ 0.415 8/1/2024 10/4/2024 10/18/2024 $ 0.415 11/7/2024 12/30/2024 (1) 01/10/2025 $ 0.415 2/13/2025 4/4/2025 04/18/2025 $ 0.420 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. Equity Offerings We have an effective universal shelf registration statement registering the potential offer and sale, from time to time and in one or more offerings, of any combination of our common stock, preferred stock, depositary shares, debt securities, warrants and rights (collectively referred to as the “securities”). We may offer the securities directly, through agents, or to or through underwriters by means of ordinary brokers’ transactions on the NYSE or otherwise at market prices prevailing at the time of sale or at negotiated prices and may include “at the market” (“ATM”) offerings to or through a market maker or into an existing trading market on an exchange or otherwise. We have a dividend reinvestment and stock purchase plan, allowing stockholders and holders of OP Units (including LTIP Units) to purchase shares of our common stock by reinvesting cash dividends or distributions received. We completed the following public offerings (including ATM issuances) of our common stock during 2025 and 2024: Date/Period Common Stock Offerings Shares Issued Price Per Share Net Proceeds (1) (amounts in millions, except per share amounts) Q1 2024 ATM 1.193 $ 25.89 (2) $ 31 Q2 2024 ATM 1.662 31.42 (2) 52 Q3 2024 ATM 3.040 32.55 (2) 98 Q4 2024 ATM 0.753 32.01 (2) 24 Q1 2025 ATM 1.629 29.07 (2) 47 Q2 2025 ATM 2.755 26.91 (2) 73 (1) Net proceeds from the offerings are shown after deducting underwriting discounts and commissions. (2) Represents the average price per share at which investors in our ATM offerings 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 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. - 32 - 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 $ 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. A summary of the unvested shares of restricted common stock that have been issued is as follows: Restricted Shares of Common Stock Weighted Average Grant Date Fair Value Value (per share) (in millions) Ending Balance — December 31, 2023 135,667 $ 33.90 $ 4.6 Granted 232,837 26.96 6.3 Vested ( 44,540 ) 36.98 ( 1.7 ) Forfeited ( 4,584 ) 27.55 ( 0.1 ) Ending Balance — December 31, 2024 319,380 $ 28.50 $ 9.1 Granted 238,774 28.74 6.9 Vested ( 84,164 ) 28.92 ( 2.5 ) Forfeited ( 32,826 ) 28.04 ( 0.9 ) 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: Restricted Stock Units (1) Weighted Average Grant Date Fair Value Value (per share) (in millions) Ending Balance — December 31, 2023 94,654 $ 48.42 $ 4.6 Granted — — — Incremental performance shares granted — — — Vested — — — Forfeited ( 15,912 ) 68.12 ( 1.1 ) Ending Balance — December 31, 2024 78,742 $ 44.44 $ 3.5 Granted — — — Incremental performance shares granted — — — Vested ( 3,482 ) 42.25 ( 0.1 ) Forfeited ( 26,810 ) 54.04 ( 1.5 ) 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. The incremental performance shares granted relate to the vesting of awards at the achieved performance level. - 33 - A summary of the unvested LTIP Units that have time-based vesting conditions that have been issued is as follows: LTIP Units (1) Weighted Average Grant Date Fair Value Value (per share) (in millions) Ending Balance — December 31, 2023 477,074 $ 34.40 $ 16.5 Granted 320,063 26.96 8.6 Vested ( 236,166 ) 34.79 ( 8.2 ) Forfeited — — — Ending Balance — December 31, 2024 560,971 $ 29.99 $ 16.9 Granted 371,234 28.12 10.4 Vested ( 281,048 ) 31.79 ( 8.9 ) Forfeited ( 10,800 ) 27.77 ( 0.3 ) Ending Balance — June 30, 2025 640,357 $ 28.15 $ 18.1 (1) See Note 4 for information on the vesting of LTIP Units. A summary of the unvested LTIP Units that have market-based vesting conditions that have been issued is as follows: LTIP Units (1) Weighted Average Grant Date Fair Value Value (per share) (in millions) Ending Balance — December 31, 2023 493,858 $ 47.76 $ 23.6 Granted 128,024 39.11 5.0 Incremental performance shares granted — — — Vested — — — Forfeited ( 86,274 ) 65.28 ( 5.6 ) Ending Balance — December 31, 2024 535,608 $ 42.87 $ 23.0 Granted 119,735 45.66 5.5 Incremental performance shares granted — — — Vested — — — Forfeited ( 125,550 ) 54.77 ( 6.9 ) Ending Balance — June 30, 2025 529,793 $ 40.68 $ 21.6 (1) See Note 4 for information on the vesting of LTIP Units. LTIP Units with market-based vesting conditions can vest between 0 % and 200 % subject to both the absolute performance of our common stock as well as relative performance compared to a group of peers. The incremental performance shares granted relate to the vesting of awards at the achieved performance level. - 34 - A summary of the unvested LTIP Units that have performance-based vesting conditions that have been issued is as follows: LTIP Units (1) Weighted Average Grant Date Fair Value Value (per share) (in millions) Ending Balance — December 31, 2023 — $ — $ — Granted 128,024 25.96 3.3 Incremental performance shares granted — — — Vested — — — Forfeited — — — Ending Balance — December 31, 2024 128,024 $ 25.96 $ 3.3 Granted 119,735 28.73 3.5 Incremental performance shares granted — — — Vested — — — Forfeited — — — Ending Balance — June 30, 2025 247,759 $ 27.30 $ 6.8 (1) See Note 4 for information on the vesting of LTIP Units. LTIP Units with performance-based vesting conditions can vest between 0 % and 200 % subject to the achievement of certain adjusted earnings per share. The incremental performance shares granted relate to the vesting of awards at the achieved performance level. 12. Earnings per Share of Common Stock The net income or loss attributable to the non-controlling OP units have been excluded from the basic earnings per share and the diluted earnings per share calculations attributable to common stockholders. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are excluded from net income available to common stockholders in the computation of earnings per share pursuant to the two-class method. Certain share-based awards are included in the diluted share count to the extent they are dilutive as discussed in Note 2. To the extent our Convertible Notes are dilutive under the if-converted method, we add back the interest expense to the numerator and include the weighted average shares of potential common stock over the period issuable upon conversion or exchange of the note in the denominator in calculating dilutive EPS as described in Note 2. - 35 - The computation of basic and diluted earnings per common share of our common stock is as follows: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Numerator: (in millions, except share and per share data) Net income (loss) attributable to controlling stockholders and participating securities $ 98.4 $ 26.5 $ 155.1 $ 149.6 Less: Dividends and distributions on participating securities ( 0.5 ) ( 0.3 ) ( 1.0 ) ( 0.8 ) Less: Undistributed earnings attributable to participating securities ( 0.4 ) — ( 0.5 ) ( 0.4 ) Net income (loss) attributable to controlling stockholders — basic 97.5 26.2 153.6 148.4 Add: Interest expense related to Convertible Notes under the if-converted method 3.5 — 8.0 12.5 Add: Undistributed earnings attributable to participating securities 0.4 — 0.5 0.4 Net income (loss) attributable to controlling stockholders — dilutive $ 101.4 $ 26.2 $ 162.1 $ 161.3 Denominator: Weighted-average number of common shares — basic 121,515,164 114,329,692 120,454,366 113,473,750 Weighted-average number of common shares — diluted 137,740,850 114,433,285 137,830,564 131,922,504 Basic earnings per common share $ 0.80 $ 0.23 $ 1.28 $ 1.31 Diluted earnings per common share $ 0.74 $ 0.23 $ 1.18 $ 1.22 Securities being allocated a portion of earnings: Weighted-average number of OP units 1,794,515 1,529,282 1,621,906 1,461,584 As of June 30, 2025 2024 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 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: Unvested restricted common stock and unvested LTIP Units with time-based vesting conditions 1,081,522 858,423 1,081,522 858,423 Restricted stock units — 20,926 — 20,926 LTIP Units with market-based vesting conditions 119,735 253,574 119,735 253,574 LTIP Units with performance-based vesting conditions 247,761 — 247,761 — Potential shares of common stock related to Convertible Notes — 18,397,237 — — - 36 - 13. Equity Method Investments 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. 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, 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. Certain of our equity method investments have the unrealized mark-to-market losses on energy hedges at the project level that do not qualify for hedge accounting. These unrealized mark-to-market losses, which resulted from rising energy prices, are recorded in the revenue line of the projects’ statements of operations. As these swaps are settled, the projects will sell power at the higher market price, offsetting the loss recognized on the energy hedges. Certain of the projects in which we have equity method investments also have interest rate swaps which are designated as cash flow hedges, and we recognize the portion of the gain or loss allocated to us related to those instruments through other comprehensive income. As of 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 Other Investments (1) Total (in millions) Balance Sheet As of March 31, 2025 Current assets $ 35 $ 877 $ 912 Total assets 1,841 20,521 22,362 Current liabilities 7 1,561 1,568 Total liabilities 585 9,087 9,672 Members' equity 1,256 11,434 12,690 As of December 31, 2024 Current assets 113 921 1,034 Total assets 1,367 20,281 21,648 Current liabilities 5 1,400 1,405 Total liabilities 393 8,911 9,304 Members' equity 974 11,370 12,344 Income Statement For the three months ended March 31, 2025 Revenue 8 298 306 Income (loss) from continuing operations ( 27 ) ( 122 ) ( 149 ) Net income (loss) ( 27 ) ( 164 ) ( 191 ) For the the three months ended March 31, 2024 Revenue — 257 257 Income (loss) from continuing operations ( 1 ) ( 106 ) ( 107 ) Net income (loss) ( 1 ) ( 132 ) ( 133 ) (1) Represents aggregated financial statement information for investments not separately presented. - 37 -