What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-07 compared with 2025-08-08 · 102 added, 98 removed, 435 unchanged (31% of the section changed)

32 unchanged sentences

• originated by programmatic clients.

We completed approximately $189 million and $894 million of transactions during the three and six months ended June 30, 2025, respectively, compared to approximately $260 million and $822 million during the same period in 2024, respectively.

As of June 30, 2025 we held approximately $7.2 billion of transactions on our balance sheet, which we refer to as our “Portfolio.” As of June 30, 2025, our Portfolio consisted of over 600 assets and we seek to manage the diversity of our Portfolio by, among other factors, project type, project operator, type of investment, type of technology, transaction size, geography, obligor and maturity.

We completed approximately $649 million and $1.5 billion of transactions during the three and nine months ended September 30, 2025, respectively, compared to approximately $396 million and $1.2 billion during the same period in 2024, respectively.

As of September 30, 2025 we held approximately $7.5 billion of transactions on our balance sheet, which we refer to as our “Portfolio.” As of September 30, 2025, our Portfolio consisted of over 600 assets and we seek to manage the diversity of our Portfolio by, among other factors, project type, project operator, type of investment, type of technology, transaction size, geography, obligor and maturity.

For those transactions that we choose not to hold on our balance sheet, we transfer all or a portion of the economics of the transaction, typically using securitization trusts, to institutional investors in exchange for cash and/or residual interests in the assets and in some cases, ongoing fees.

As of June 30, 2025, we managed approximately $7.4 billion in assets in these securitization trusts or vehicles that are not consolidated on our balance sheet.

When combined with our Portfolio, as of June 30, 2025, we manage approximately $14.6 billion of assets which we refer to as our “Managed Assets”.

As of September 30, 2025, we managed approximately $7.5 billion in assets in these securitization trusts or vehicles that are not consolidated on our balance sheet.

When combined with our Portfolio, as of September 30, 2025, we manage approximately $15 billion of assets which we refer to as our “Managed Assets.”

Our equity investments in energy transition assets and infrastructure projects are operated by various renewable energy companies or by joint ventures in which we participate.

16 unchanged sentences

There can be no assurance with regard to any specific terms of such pipeline transactions or that any or all of the transactions in our pipeline will be completed.

As of June 30, 2025, our pipeline consisted of more than $6.0 billion in new equity, debt and real estate opportunities.

As of September 30, 2025, our pipeline consisted of more than $6.0 billion in new equity, debt and real estate opportunities.

Of our pipeline, approximately 39% is related to BTM assets, 38% is related to GC assets, and 18% are related to FTN assets, with the remainder related to “Next Frontier” assets, which represent opportunities in burgeoning markets where potential investments align with our investment strategy.

9 unchanged sentences

Understanding our accounting policies and the extent to which we make judgments and estimates in applying these policies is integral to understanding our financial statements.

We believe the estimates and assumptions used in preparing our financial statements and related footnotes are reasonable and supportable based on the best information available to us as of June 30, 2025.

Various uncertainties may materially impact the accuracy of the estimates and assumptions used in the financial statements and related footnotes and, as a result, actual results may vary significantly from estimates.

6 unchanged sentences

Our Portfolio

Our Portfolio totaled approximately $7.2 billion as of June 30, 2025 and included approximately $3.5 billion of BTM assets, approximately $2.7 billion of GC assets, and approximately $1.0 billion of FTN assets.

Our Portfolio totaled approximately $7.5 billion as of September 30, 2025 and included approximately $3.7 billion of BTM assets, approximately $2.8 billion of GC assets, and approximately $1.0 billion of FTN assets.

Approximately 53% of our Portfolio consisted of equity method investments in renewable energy related projects.

Approximately 37% consisted of fixed-rate receivables and debt securities, approximately 8% consisted of floating-rate receivables, and 2% of our Portfolio was real estate leased to renewable energy projects under lease agreements.

Our Portfolio consisted of over 600 transactions with an average size of $10 million and the weighted average remaining life of our Portfolio (excluding match-funded transactions) of approximately 16 years as of June 30, 2025.

Our Portfolio consisted of the following asset classes as of June 30, 2025:

The table below provides details on the interest rate and maturity of our receivables and debt securities as of June 30, 2025:

Our Portfolio consisted of over 600 transactions with an average size of $11 million and the weighted average remaining life of our Portfolio (excluding match-funded transactions) of approximately 16 years as of September 30, 2025.

Our Portfolio consisted of the following asset classes as of September 30, 2025:

The table below provides details on the interest rate and maturity of our receivables and debt securities as of September 30, 2025:

Balance Maturity

1 unchanged sentence

Floating rate receivable, interest rate of 12.03% per annum

$ 604 2027 to 2030

Fixed-rate receivables, interest rates less than 5.00% per annum 44 2029 to 2047

17 unchanged sentences

Our earnings from our equity method investments are not included in this table.

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

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

2025 2024 2025 2024

22 unchanged sentences

(1) Excludes any loss on debt modification or extinguishment included in interest expense in our income statement.

The following table provides a summary of our anticipated principal repayments for our receivables and debt securities as of June 30, 2025:

The following table provides a summary of our anticipated principal repayments for our receivables and debt securities as of September 30, 2025:

Principal payment due by Period

5 unchanged sentences

See Note 6 to our financial statements in this Form 10-Q for information on:

• the anticipated maturity dates of our receivables and debt securities and the weighted average yield for each range of maturities as of June 30, 2025,

• the term of our leases and a schedule of our future minimum rental income under our land lease agreements as of June 30, 2025,

• the Performance Ratings of our Portfolio, and

• the anticipated maturity dates of our receivables and debt securities and the weighted average yield for each range of maturities as of September 30, 2025;

• the term of our leases and a schedule of our future minimum rental income under our land lease agreements as of September 30, 2025;

• the Performance Ratings of our Portfolio;

• the receivables on non-accrual status.

2 unchanged sentences

Results of Operations

Comparison of the Three Months Ended June 30, 2025 vs.

Three Months Ended June 30, 2024

Three months ended June 30,

Comparison of the Three Months Ended September 30, 2025 vs.

Three Months Ended September 30, 2024

Three months ended September 30,

2025 2024 $ Change % Change

19 unchanged sentences

Net income (loss) $ 84,906 $ (19,176) $ 104,082 (543) %

• Net income increased by $73 million due primarily to an increase in income from equity method investments of $131 million, offset by a decrease in revenue of $9 million, an increase in total expenses of $21 million, and a $28 million increase in income tax expense.

• Total revenue decreased by $9 million due to an $18 million decrease in gain on sale income, the result of a change in the mix and timing of assets being securitized.

Interest and rental income increased by $5 million due to higher asset yields on a higher average asset balance.

Management fees and retained interest income increased by $4 million due to additional assets added to a co-investment structure.

Origination fee and other income increased by $1 million due to fees recognized on the origination of assets within a co-investment structure.

• Interest expense increased by $20 million due to the write-off of debt issuance costs and fees incurred associated with the repurchase of the 2026 and 2027 notes in the amount of $11 million, as well as to a larger average outstanding debt balance and a higher average interest rate.

We recorded a $1 million provision for loss on receivables and retained interests in securitization trusts, driven primarily by changes in loan specific assumptions used to calculate reserves for certain receivables.

• Compensation and benefits expenses decreased by $3 million primarily due to the prior period acceleration of share-based compensation related to those employees who met the age and years of service criteria of our retirement policy which did not recur in the current period.

• Net income increased by $104 million due primarily to an increase in income from equity method investments of $148 million and an increase in revenue of $21 million, offset by an increase in total expenses of $23 million, and a $42 million increase in income tax expense.

• Total revenue increased by $21 million due to a $17 million increase in gain on sale income, the result of an origination of a held-for-sale receivable for which we elected the fair value option in the current period.

Interest and rental income increased by $5 million due to a higher average asset balance.

• Interest expense increased by $12 million due to a larger average outstanding debt balance and a higher average interest rate.

We recorded a $3 million provision for loss on receivables and retained interests in securitization trusts, driven primarily by loan and loan commitments made during the period.

• Compensation and benefits expenses increased by $10 million primarily due to timing of incentive-based compensation accrued in the current quarter.

• Income (loss) from equity method investments increased by $148 million primarily due to higher HLBV allocations in the current period of income related to tax credits allocated to other investors in solar projects, as those tax credits reduced the tax equity investors’ ongoing claim on the net assets of the project.

• Income tax expense increased by $42 million primarily due to higher pre-tax book income.

Comparison of the Six Months Ended June 30, 2025 vs.

Six Months Ended June 30, 2024

Six Months Ended June 30,

Comparison of the Nine Months Ended September 30, 2025 vs.

Nine Months Ended September 30, 2024

Nine Months Ended September 30,

2025 2024 $ Change % Change

19 unchanged sentences

Net income (loss) $ 242,886 $ 132,316 $ 110,570 84 %

• Net income increased by $6 million due to an increase in income from equity method investments of $60 million, offset by a decrease in total revenue of $18 million, an increase in total expenses of $31 million and an increase in income tax expense of $6 million.

• Total revenue decreased by $18 million due to a $28 million decrease in gain on sale of assets, driven by a change in the mix and timing of assets being securitized, including the balance sheet rotation of certain land and government receivable assets in the prior period which did not recur.

This was partially offset by increases to management fees and retained interest income and origination fee and other income, due to higher fees recognized due to increased investment in a co-investment structure.

• Net income increased by $111 million due to an increase in income from equity method investments of $208 million and an increase in total revenue of $3 million, offset by an increase in total expenses of $54 million and an increase in income tax expense of $47 million.

• Total revenue increased by $3 million due to increases in interest and rental income, management fees and retained interest income and origination fee and other income.

Interest and rental income increased due to a higher average Portfolio balance.

Management fees and retained interest income and origination fee and other income increases were driven by increased investment in a co-investment structure.

These were partially offset by an $11 million decrease in gain on sale of assets, driven by a change in the mix and timing of assets being securitized, including the balance sheet rotation of certain land and government receivable assets in the prior period which did not recur.

• Interest expense increased by $35 million primarily due to the write-off of debt issuance costs and fees incurred associated with the repurchase of the 2026 and 2027 notes in the amount of $11 million, as well as a larger average outstanding debt balance and a higher average interest rate.

We recorded a provision for loss on receivables of $5 million driven primarily by changes in macroeconomic assumptions used to predict future credit losses.

We recorded a provision for loss on receivables of $8 million driven primarily by changes in macroeconomic assumptions used to predict future credit losses as well as loan and loan commitments.

• Compensation and benefits increased by $12 million due to an increase in employee headcount.

General and administrative expenses decreased $2 million as legal fees related to our conversion to a Delaware corporation in the prior year did not recur.

• Income from equity method investments increased by $208 million primarily due to allocations of income related to tax credits allocated to other investors in solar projects, as those tax credits reduced the tax equity investors’ ongoing claim on the net assets of the project.

2 unchanged sentences

We consider the following non-GAAP financial measures useful to investors as key supplemental measures of our performance:

(1) adjusted earnings, (2) adjusted recurring net investment income, (3) managed assets, and (4) adjusted cash from operations plus other portfolio collections.

(1) Adjusted Earnings, (2) Adjusted Recurring Net Investment Income, (3) Managed Assets, and (4) Adjusted

Cash from Operations plus Other Portfolio Collections.

These non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss as measures of our operating performance.

1 unchanged sentence

Adjusted Earnings

We calculate adjusted earnings as GAAP net income (loss) excluding non-cash equity expense, provisions for loss on receivables, amortization of intangibles, non-cash provision (benefit) for taxes, losses or (gains) from modification or extinguishment of debt facilities, non-cash tax charges and the earnings attributable to our non-controlling interest of our Operating Partnership.

We calculate Adjusted Earnings as GAAP net income (loss) excluding non-cash equity expense, provisions for loss on receivables, amortization of intangibles, non-cash provision (benefit) for taxes, losses (gains) from modification or extinguishment of debt facilities, non-cash tax charges and the earnings attributable to our non-controlling interest of our Operating Partnership.

We also make an adjustment to eliminate our portion of fees we earn from related-party co-investment structures, and for our equity method investments in the renewable energy projects as described below.

1 unchanged sentence

In the future, Adjusted Earnings may also exclude one-time events pursuant to changes in GAAP and certain other adjustments as approved by a majority of our independent directors.

We believe a non-GAAP measure, such as adjusted earnings, that adjusts for the items discussed above is and has been a meaningful indicator of our economic performance in any one period and is useful to our investors as well as management in evaluating our performance as it relates to expected dividend payments over time.

We believe a non-GAAP measure, such as Adjusted Earnings, that adjusts for the items discussed above is and has been a meaningful indicator of our economic performance in any one period and is useful to our investors as well as management in evaluating our performance, including as it relates to expected dividend payments over time.

Additionally, we believe that our investors also use Adjusted Earnings, or a comparable supplemental performance measure, to evaluate and compare our performance to that of our peers, and as such, we believe that the disclosure of Adjusted Earnings is useful to our investors.

19 unchanged sentences

We have acquired equity investments in portfolios of projects which have the majority of the distributions payable to more senior investors in the first few years of the project.

The following table provides results related to our equity method investments for the three and six months ended June 30, 2025 and 2024.

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

The following table provides results related to our equity method investments for the three and nine months ended September 30, 2025 and 2024.

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

2025 2024 2025 2024

2 unchanged sentences

Collections of Adjusted Earnings

$ 68 $ 26 $ 141 $ 57

Return of Capital 25 6 46 10

2 unchanged sentences

In addition, our methodology for calculating Adjusted Earnings may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported Adjusted Earnings may not be comparable to similar metrics reported by other companies.

The table below provides a reconciliation of our GAAP net income (loss) to adjusted earnings for the three and six months ended June 30, 2025 and 2024.

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

The table below provides a reconciliation of our GAAP net income (loss) to Adjusted Earnings for the three and nine months ended September 30, 2025 and 2024.

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

2025 2024 2025 2024

25 unchanged sentences

Since we remove GAAP Equity method income for purposes of our Adjusted Earnings metric, we add back the eliminations through this adjustment.

(4) In addition to these provisions, in the six months ended June 30, 2024, we concluded that an equity method investment, along with certain loans we had made to this investee, were not recoverable.

(4) In addition to these provisions, in the nine months ended September 30, 2024, we concluded that an equity method investment, along with certain loans we had made to this investee, were not recoverable.

The equity method investment and loans had a carrying value of $0 due to the losses already recognized through GAAP income from equity method investments as a result of operating losses sustained by the investee.

We have excluded this write-off from Adjusted earnings, as this investment was an investment in a corporate entity which is not a part of our current investment strategy and

is immaterial to our Portfolio.

We have excluded this write-off from Adjusted Earnings, as this investment was an investment in a corporate entity which is not a part of our current investment strategy and is immaterial to our Portfolio.

The loss associated with this investment is included in our Average Annual Realized Loss on Managed Assets metric disclosed below.

12 unchanged sentences

This measure also differs from our previously reported “Adjusted Net Investment Income”, as Adjusted Net Investment Income did not include Management fees and retained interest income.

For further information on the adjustments between GAAP-based net investment income and adjusted recurring net investment income, see the discussion above related to Adjusted Earnings.

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

For further information on the adjustments between GAAP-based net investment income and Adjusted Recurring Net Investment Income, including information about our equity method investments, see the discussion above related to Adjusted Earnings.

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

2025 2024 2025 2024

28 unchanged sentences

The following is a reconciliation of our GAAP-based Portfolio to our Managed Assets:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(in millions)

7 unchanged sentences

Managed Assets $ 15,047 $ 13,703

(1) Total assets in co-investment structures are $1.1 billion as of June 30, 2025 .

Not included in this amount is an additional $310 million related to closed transactions not yet funded as of June 30, 2025.

The following shows our Managed Assets by asset class as of June 30, 2025:

(1) Total assets in co-investment structures are $1.2 billion as of September 30, 2025 .

Not included in this amount is an additional $254 million related to closed transactions not yet funded as of September 30, 2025.

The following shows our Managed Assets by asset class as of September 30, 2025:

Adjusted Cash from Operations plus Other Portfolio Collections

9 unchanged sentences

Management uses Cash Available for Reinvestment in this way, and we believe that our investors use it in a similar fashion.

For the year ended, For the year ended, For the six months ended, For the six months ended, For the TTM ended,

December 31, 2023 December 31, 2024 June 30, 2025 June 30, 2024 June 30, 2025

For the year ended, For the year ended, For the nine months ended, For the nine months ended, For the TTM ended,

December 31, 2023 December 31, 2024 September 30, 2025 September 30, 2024 September 30, 2025

(in thousands)

12 unchanged sentences

Proceeds from sales of debt securities and retained interests in securitization trusts — 5,390 — — 5,390

— 5,390 — — 5,390

Principal payments on non-recourse debt (21,606) (72,989) (6,484) (72,302) (7,171)

Adjusted Cash from Operations plus Other Portfolio Collections 265,908 910,075 611,437 740,215 781,297

265,908 910,075 241,991 632,085 519,981

Dividends (159,786) (192,269) (155,627) (142,178) (205,718)

2 unchanged sentences

(2) Included in Other in the cash provided (used in) investing activities section of our statement of cash flows.

For the year ended, For the year ended, For the six months ended, For the six months ended, For the TTM ended,

December 31, 2023 December 31, 2024 June 30, 2025 June 30, 2024 June 30, 2025

For the year ended, For the year ended, For the nine months ended, For the nine months ended, For the TTM ended,

December 31, 2023 December 31, 2024 September 30, 2025 September 30, 2024 September 30, 2025

(in thousands)

7 unchanged sentences

Management fees and retained interest income and origination fees and other income 26,506 33,044 31,818 22,223 42,639

26,506 33,044 20,919 9,988 43,975

Principal payments on non-recourse debt (21,606) (72,989) (6,484) (72,302) (7,171)

1 unchanged sentence

Adjusted Cash from Operations plus Other Portfolio Collections $ 265,908 $ 910,075 $ 611,437 $ 740,215 $ 781,297

$ 265,908 $ 910,075 $ 241,991 $ 632,085 $ 519,981

(1) Includes cash from the sale of assets on our balance sheet as well as securitization transactions.

(2) For the six months and TTM ended June 30, 2025, interest paid includes an $18 million benefit from the settlement of a derivative which was designated as a cash flow hedge.

For the six months and TTM ended June 30, 2024, interest paid includes a $19 million benefit from the settlement of a derivative which was designated as a cash flow hedge.

(2) For the nine months and TTM ended September 30, 2025, interest paid includes an $18 million benefit from the settlement of a derivative which was designated as a cash flow hedge.

For the nine months and TTM ended September 30, 2024, interest paid includes a $19 million benefit from the settlement of a derivative which was designated as a cash flow hedge.

Other Metrics

2 unchanged sentences

Underwritten yield is the rate at which we discount the expected cash flows from the assets in our Portfolio to determine our purchase price.

In calculating underwritten yield, we make certain assumptions, including the timing and amounts of cash flows generated by our investments, which may differ from actual results, and may update this yield to reflect our most current estimates of project performance.

In calculating an investment’s underwritten yield, we make certain assumptions, including the timing and amounts of cash flows generated by our investments, which may differ from actual results, and may update this yield to reflect our most current estimates of project performance.

We believe that Portfolio Yield provides an additional metric to understand certain characteristics of our Portfolio as of a point in time.

1 unchanged sentence

Our Portfolio Yield measure may not be comparable to similarly titled measures used by other companies.

Our Portfolio totaled approximately $7.2 billion as of June 30, 2025.

Unlevered portfolio yield was 8.3% as of June 30, 2025 and 8.3% as of December 31, 2024.

See Note 6 to our financial statements and MD&A - Our Business in this Form 10-Q for additional discussion of the characteristics of our portfolio as of June 30, 2025.

Our Portfolio totaled approximately $7.5 billion as of September 30, 2025.

Unlevered Portfolio Yield was 8.6% as of September 30, 2025 and 8.3% as of December 31, 2024.

See Note 6 to our financial statements and MD&A - Our Business in this Form 10-Q for additional discussion of the characteristics of our portfolio as of September 30, 2025.

Average Annual Realized Loss on Managed Assets

Average Annual Realized Loss on Managed Assets represents the average annual rate of our incurred losses, calculated as the amount of realized losses incurred in each year as a percentage of each year’s average annual Managed Assets.

This metric is calculated over the ten year period ending June 30, 2025.

This metric is calculated over the ten-year period ending September 30, 2025.

Incurred losses include both realized losses on equity method investments and realized credit losses on receivables and debt securities.

3 unchanged sentences

Our management uses it in this way and we believe that our investors use it in a similar fashion to evaluate our investment performance, and as such, we believe that its disclosure is useful to our investors.

The table below shows these metrics as of June 30, 2025 is:

The table below shows these metrics as of September 30, 2025 is:

Average Annual Recognized Loss (GAAP) on Managed Assets

5 unchanged sentences

Our uses of liquidity typically include funding investments, operating expenses (including cash compensation), interest and principal payments on our debt, and stockholder dividends and limited partner distributions.

We typically pay our operating expenses, our debt service, and dividends from collections on our Portfolio and proceeds from sales of Portfolio investments.

We typically pay our operating expenses, our debt service, and dividends from collections on our Portfolio, fee income and proceeds from sales of Portfolio investments.

We use borrowings as part of our financing strategy to increase potential returns to our stockholders and have available to us a broad range of financing sources.

2 unchanged sentences

Below is a summary of our available liquidity by source:

As of June 30, 2025

As of September 30, 2025

(in millions)

4 unchanged sentences

(1) 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.

As of June 30, 2025, that reserved capacity was $357 million, and we have presented the capacity under our unsecured revolving credit facility of $1.5 billion as reduced by that amount.

Capital markets activity during the six months ended June 30, 2025

During the six months ended June 30, 2025, we increased the available capacity available under our unsecured revolving credit facility to $1.55 billion, adding two additional banks.

We issued $600 million of senior unsecured notes due 2031 and $400 million of senior unsecured notes due 2035, and used proceeds of the notes to complete a cash tender offer to repurchase $400 million and $300 million of senior unsecured notes due 2026 and 2027 respectively.

As of September 30, 2025, that reserved capacity was $577 million, and we have presented the available capacity under our unsecured revolving credit facility of $1.4 billion as reduced by that amount.

Capital markets activity during the nine months ended September 30, 2025

During the nine months ended September 30, 2025, we increased the available capacity available under our unsecured revolving credit facility to $1.55 billion, adding two additional banks.

We issued $600 million of senior unsecured notes due 2031 and $400 million of senior unsecured notes due 2035, and used the proceeds of the notes issuances to complete a cash tender offer to repurchase $400 million and $300 million of senior unsecured notes due 2026 and 2027, respectively.

We repaid $220 million of Convertible Notes with existing liquidity, and issued $187 million in equity.

As discussed in Note 8 to our financial statements in this Form 10-Q, we entered into a strategic partnership with KKR called CarbonCount Holdings 1, LLC (“CCH1”), under which we each have committed to invest $1 billion in eligible projects over an 18 month period, of which $476 million remains to be funded by each of us as of June 30, 2025.

The commitment period was extended to 30 months in May 2025 to allow additional time to invest the proceeds of senior notes to be issued by CCH1.

In November 2025, we entered into an agreement that provides for a delayed-draw term loan facility in an aggregate principal amount of up to $250 million, available to be drawn during the period from March 16, 2026 through the earlier of June 15, 2026 or the date when the full principal amount is drawn.

Drawn loans, if any, mature on June 15, 2028.

The facility has a commitment fee during the availability period, and bears interest at a rate of SOFR or alternative base rate plus applicable margins based on our current credit rating.

The current applicable margins are 1.650% for SOFR-based loans and 0.650% for alternative base rate-based loans.

over an 18-month period, of which $476 million remains to be funded by each of us as of September 30, 2025.

The commitment period was extended to 30 months in May 2025 to allow additional time to invest the proceeds of senior notes issued by CCH1.

Such senior notes allow CCH1 to invest in assets in amounts incremental to commitments of the investors.

5 unchanged sentences

For further information on our long-term debt, see Note 8 to our financial statements of this Form 10-Q.

As of June 30, 2025, the maturity profile of our long-term recourse debt obligations is shown in the table below.

Amounts exclude $357 million principal amount of commercial paper notes which mature in 2025, as we have reserved capacity under our credit facility for such amounts as described above.

As of September 30, 2025, the maturity profile of our long-term recourse debt obligations is shown in the table below.

Amounts exclude $577 million principal amount of Standalone Commercial Paper Notes which mature in 2025, as we have reserved capacity under our credit facility for such amounts as described above.

Additional borrowings and financial leverage management

As a means of financing our business, we plan to continue to issue debt which may be either secured or unsecured and either fixed-rate or floating-rate and may issue additional equity.

As a means of financing our business, we plan to continue to issue debt which may be either secured or unsecured and either fixed-rate or floating-rate, and we may issue additional equity.

We also expect to use both on-balance sheet and off-balance sheet securitizations.

4 unchanged sentences

The amount of financial leverage we may deploy for particular assets will depend upon our target capital structure and the availability of particular types of financing and our assessment of the credit, liquidity, price volatility and other risks of such assets, and the interest rate environment.

As shown in the table below, our debt to equity ratio was approximately 1.8 to 1 as of June 30, 2025, below our current board-approved leverage limit of up to 2.5 to 1.

Our percentage of fixed rate debt including the impact of our interest rate derivatives was approximately 97% as of June 30, 2025, which is at upper-end of our targeted fixed rate debt percentage range of 75% to 100%.

As shown in the table below, our debt to equity ratio was approximately 1.9 to 1 as of September 30, 2025, below our current board-approved leverage limit of up to 2.5 to 1.

Our percentage of fixed rate debt including the impact of our interest rate derivatives was approximately 88% as of September 30, 2025, which is within our

targeted fixed rate debt percentage range of 75% to 100%.

Our targeted fixed rate debt range allows for percentages as low as 70% on a short term basis if we intend to repay or swap floating rate borrowings in the near term.

The calculation of our fixed-rate debt and financial leverage is shown in the chart below:

June 30, 2025 % of Total December 31, 2024 % of Total

September 30, 2025 % of Total December 31, 2024 % of Total

(dollars in millions) (dollars in millions)

18 unchanged sentences

Sources and Uses of Cash

We had approximately $104 million and $150 million of unrestricted cash, cash equivalents, and restricted cash as of June 30, 2025 and December 31, 2024, respectively.

The following table summarizes our cash flows for the six months ended June 30, 2025 and 2024.

We had approximately $319 million and $150 million of unrestricted cash, cash equivalents, and restricted cash as of September 30, 2025 and December 31, 2024, respectively.

Our cash balance was higher at September 30, 2025 compared to December 31, 2024 due primarily to the receipt at period-end of large principal prepayments from Portfolio receivables.

The following table summarizes our cash flows for the nine months ended September 30, 2025 and 2024.

See our statements of cash flows for full details on the components of each category of cash flows.

As discussed above, Adjusted cash from operations plus other portfolio collections was $242 million for the six months ended June 30, 2025.

For the six months ended,

June 30, 2025 June 30, 2024

As discussed above, Adjusted Cash from Operations plus Other Portfolio Collections was $611 million for the nine months ended September 30, 2025.

For the nine months ended,

September 30, 2025 September 30, 2024

(in millions)

4 unchanged sentences

Discussion of changes in cash provided by (used in) operating activities

Cash provided by (used in) operating activities for the six months ended June 30, 2025 was $46 million higher than the same period ended June 30, 2024.

Net income was $6 million higher in the current period, and there were higher adjustments to net income of $40 million when compared to the prior period.

Cash provided by (used in) operating activities for the nine months ended September 30, 2025 was $97 million lower than the same period ended September 30, 2024.

Net income was $111 million higher in the current period, and there were higher negative adjustments to net income of $208 million when compared to the prior period, including $159 million higher net investment in receivables held-for-sale which has the impact of reducing cash provided by (used in) operating activities.

Discussion of changes in cash provided by (used in) investing activities

Cash provided by (used in) investing activities for the six months ended June 30, 2025 was $569 million lower than the same period ended June 30, 2024.

We invested $131 million more in equity method investments and collected $299 million less in principal from receivables in the period ended June 30, 2025 than the same period in the prior year.

In the prior year, we sold $116 million of real estate, which did not recur in the current period, and sold $91 million fewer receivables in the current period.

These changes were offset by $60 million less invested in receivables than in the same period in the prior year.

Cash provided by (used in) investing activities for the nine months ended September 30, 2025 was $565 million lower than the same period ended September 30, 2024.

We invested $268 million more in equity method investments and receivables in the period ended September 30, 2025 than the same period in the prior year.

In the prior year, we sold $116 million of real estate, which did not recur in the current period, and received $116 million less from the sale of receivables in the current period.

Discussion of changes in cash provided by (used in) financing activities

Cash provided by (used in) financing activities for the six months ended June 30, 2025 was $390 million higher than the same period ended June 30, 2024.

We had higher net borrowings from our revolving credit facility and commercial paper notes of $262 million compared to the prior period.

We had higher net borrowings from senior unsecured notes of $91 million in the current period.

In the prior period, we had higher net repayments of $300 million principal related to term loans than in the current period.

These amounts were offset by $200 million principal payments on Convertible Notes made in the current period.

Cash provided by (used in) financing activities for the nine months ended September 30, 2025 was $847 million higher than the same period ended September 30, 2024.

We had higher net borrowings from our revolving credit facility and commercial paper notes of $1.0 billion compared to the prior period.

Net proceeds from long-term borrowings were $137 million lower in the current period than in the prior period.

Supplemental Guarantor Information

5 unchanged sentences

We have relationships with non-consolidated entities or financial partnerships, often referred to as structured investment vehicles, special purpose entities, or variable interest entities, established to facilitate the sale of securitized assets.

Other than our retained interests in securitization trusts (including any outstanding servicer advances) of approximately $272 million as of June 30, 2025, that may be at risk in the event of defaults or prepayments in our securitization trusts and certain limited guarantees as discussed below, and except as disclosed in Note 9 to our financial statements in this Form 10-Q, we have not guaranteed any obligations of non-consolidated entities or entered into any commitment or intent to provide additional funding to any such entities.

Other than our retained interests in securitization trusts (including any outstanding servicer advances) of approximately $278 million as of September 30, 2025, that may be at risk in the event of defaults or prepayments in our securitization trusts and certain limited guarantees as discussed below, and except as disclosed in Note 9 to our financial statements in this Form 10-Q, we have not guaranteed any obligations of non-consolidated entities or entered into any commitment or intent to provide additional funding to any such entities.

A more detailed description of our relations with non-consolidated entities can be found in Note 2 to our financial statements in this Form 10-Q.

7 unchanged sentences

Book Value Considerations

As of June 30, 2025, we carried only our debt securities, retained interests in securitization trusts, and derivatives at fair value on our balance sheet.

As of September 30, 2025, we carried only our debt securities, receivables held-for-sale for which we had elected the fair value option, retained interests in securitization trusts, and derivatives at fair value on our balance sheet.

As a result, in reviewing our book value, there are a number of important factors and limitations to consider.

Other than our debt securities, retained interests in securitization trusts, and derivatives that are carried on our balance sheet at fair value as of June 30, 2025, the carrying value of our remaining assets and liabilities are calculated as of a particular point in time, which is largely determined at the time such assets and liabilities were added to our balance sheet using a cost basis in accordance with GAAP, adjusted for income or loss recognized on and cash collected from such assets.

Other than our debt securities, retained interests in securitization trusts, and derivatives that are carried on our balance sheet at fair value as of September 30, 2025, the carrying value of our remaining assets and liabilities are calculated as of a particular point in time, which is largely determined at the time such assets and liabilities were added to our balance sheet using a cost basis in accordance with GAAP, adjusted for income or loss recognized on and cash collected from such assets.

Other than the allowance for current expected credit losses applied to our receivables, our remaining assets and liabilities do not incorporate other factors that may have a significant impact on their value, most notably any impact of business activities, changes in estimates, or changes in general economic conditions, interest rates or commodity prices since the dates the assets or liabilities were initially recorded.

1 unchanged sentence

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis