What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-13 compared with 2025-02-14 · 303 added, 239 removed, 392 unchanged (58% of the section changed)

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Financial Statements and Supplementary Data, of this Form 10-K.

Refer to ‘Item 7 -- Management’s Discussion and Analysis of Financial Condition and Results of Operations’ on our Form 10-K for the year ended December 31, 2023 for a discussion of our results for the year ended December 31, 2023 and a comparison of our results of operations for the fiscal years ended December 31, 2023 and December 31, 2022.

Refer to “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” on our Form 10-K for the year ended December 31, 2024 for a discussion of our results for the year ended December 31, 2024 and a comparison of our results of operations for the fiscal years ended December 31, 2024 and December 31, 2023.

We are an investor in sustainable infrastructure assets advancing the energy transition.

With more than $13 billion in managed assets, our investment strategy is focused primarily on long-lived real assets that are supported by long-term recurring cash flows.

In addition to net investment income from our portfolio, we also generate gains-on-sale from securitization transactions, as well as on-going fees from asset management and other services.

We are internally managed by an executive team that has extensive relevant industry knowledge and experience, and a team of over 150 clean energy investment, operating, and technical professionals.

We have long-standing relationships with the leading clean energy project developers, owners and operators, utilities, and ESCOS, which provide recurring, programmatic investment and fee-generating opportunities, while also enabling scale benefits and operational efficiencies.

We completed approximately $2.3 billion of transactions during both 2024 and 2023.

With more than $16 billion in managed assets, our investment strategy is focused primarily on long-lived real assets that generate long-term recurring cash flows.

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.

We are internally managed by an executive team that has extensive relevant industry knowledge and experience, and have a team of over 170 full-time investment, operating, and technical professionals.

We have long-standing relationships with the leading U.S.

clean energy project developers, owners and operators, utilities, and energy service companies (“ESCOS”), which provide recurring, programmatic investment and fee-generating opportunities, while also enabling scale benefits and operational and transactional efficiencies.

We completed approximately $4.3 billion of transactions during 2025 and $2.3 billion in 2024.

As of December 31, 2025, our managed assets total approximately $16.1 billion, and generally fall into one of three categories:

(1) our Portfolio, which represents investments we have retained on our balance sheet, (2) assets in our co-investment structures that are not in our Portfolio but held by our investment partners in these structures, and (3) assets we have securitized by transferring all or a portion of the economics of the investment, typically using securitization trusts, to institutional investors in exchange for cash and/or residual interests in the assets and in some cases, ongoing fees.

(1) our Portfolio, which represents investments we have retained on our balance sheet, (2) fee-generating assets in our co-investment structures that are not in our Portfolio but held by our investment partners in these structures, and (3) assets we have securitized by transferring all or a portion of the economics of the investment, 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 December 31, 2025, we held approximately $7.6 billion of assets in our Portfolio, and we also managed approximately $8.5 billion in securitization trusts or co-investment vehicles that are not consolidated on our balance sheet.

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power demand, with load growth now expected to experience its most significant increase since before the turn of this century.

For the last 25 years, U.S.

For the past 20 years, U.S.

electricity demand has been essentially flat at approximately 4,000 TWh per year, according to the U.S.

Energy Information Administration (the “EIA”), due largely to the impact of successful energy efficiency and conservation initiatives.

More recently, however, a number of new macro trends have materially altered the U.S.

According to the EIA, electricity generation by the U.S.

electric power sector increased by 2.5% in 2025, and is expected to increase by 1% in 2026 and 3% in 2027.

This growth is due to a number of new macro trends that have materially altered the U.S.

electricity market, including growth in data centers, a resurgence in domestic manufacturing, as well as the broader trend of electrification of more sectors of the economy, including on-road transportation, industrial manufacturing, and space heating, among others.

• Data centers.

Spurred in part by unprecedented investment in artificial intelligence, data center power demand is expected to grow substantially, from less than 4% of total U.S.

power demand in 2024 to more than 11% by 2030, or approximately 400 TWh, according to McKinsey, which estimates such demands would necessitate approximately 55 GW of new generation capacity and require approximately $500 billion of capital investment in data center energy infrastructure, excluding transmission and distribution investment as well as the investments in computer equipment within data centers.

Data centers represent approximately 30-40% of the total increase in U.S.

electricity demand of more than 1,000 TWh that McKinsey estimates between 2024 and 2030.

Spurred in part by unprecedented investment in artificial intelligence, data center power demand is expected to grow substantially.

Data center share of total U.S.

power demand is expected to increase from approximately 5% of total U.S.

power demand in 2025 to 12% by 2030, with 124 GW of AI capacity added on a cumulative basis between 2025 and 2030, resulting in overall U.S.

data center energy demand increasing from 224 terawatt-hours in 2025 to 606 terawatt-hours in 2030.

McKinsey expects that capital expenditures on data center

infrastructure beyond IT hardware are expected to exceed $1.7 trillion by 2030, representing sustainable infrastructure investment opportunities beyond grid-connected power generation.

• Domestic manufacturing.

Following a decades-long trend towards offshoring, there has been a sharp reversal in recent years in favor of reshoring, as manufacturers have sought to (a) reduce supply chain vulnerabilities exposed by the Covid-19 pandemic, (b) address a growing consumer segment in favor of "Made in the USA” products, and (c) overcoming growing national security concerns stemming from the country's higher dependence on foreign countries for manufacturing goods, particularly for strategic industries like industrial materials, energy products, and semiconductors.

Furthered by supportive government policies, culminating in transformative legislation and incentives

including the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS Act, there has been a resurgence of investment in domestic manufacturing in the United States over the last few years.

Following a decades-long trend towards offshoring, there has been a sharp reversal in recent years in favor of reshoring, as manufacturers have sought to (1) reduce supply chain vulnerabilities exposed by the Covid-19 pandemic, (2) address a growing consumer segment in favor of “Made in the USA” products, and (3) overcome growing national security concerns stemming from the country's higher dependence on foreign countries for manufacturing goods, particularly for strategic industries like industrial materials, energy products, and semiconductors.

Furthered by supportive government policies, culminating in transformative legislation and incentives including the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS Act, there has been a resurgence of investment in domestic manufacturing in the United States over the last few years.

According to the U.S.

Census Bureau, in 2025, U.S.

spending on construction of manufacturing facilities surpassed $230 billion, up from approximately $75 billion in 2020.

This rise in spending on domestic manufacturing is expected to create a minimum of 250 million square feet of new manufacturing space and 210,000 manufacturing jobs by 2030, according to NewMark.

This growth in domestic manufacturing is estimated to drive an increase in U.S.

electricity demand of more than 100 TWh by 2030, according to Rystad Energy.

spending on construction of manufacturing facilities surpassed an annualized rate of $200 billion, up from approximately $75 billion in 2020.

This rise in spending on domestic manufacturing is expected to create a minimum of 250 million square feet of new manufacturing space by 2030, according to NewMark.

• The “electrification of everything.” Further driving U.S.

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One of the most prominent of these trends is the electrification of on-road transportation.

With sales of new light-duty electric vehicles in the United States growing 7% to more than 1.3 million in 2024, representing more than 8% of total new car sales, there were more than 4.8 million light-duty battery electric vehicles registered in the United States at the end of 2023, based on U.S.

Department of Energy data, up from less than 100,000 in 2012.

With sales of new light-duty electric vehicles in the United States totaling approximately 1.3 million in 2025, representing 8% of total new car sales, according to the National Automobile Dealers Association, there were more than 7 million light-duty battery electric vehicles registered in the United States at the end of 2025, based on Energy Electric Institute and Cox Automotive data, up from less than 100,000 in 2012.

With electric vehicles on U.S.

roads expected to grow to more than 78 million by 2035, representing 26% of all passenger vehicles on the road, according to Edison Energy Institute’s October 2024 forecast, it is estimated that electric vehicle charging alone could increase annual U.S.

roads expected to grow to approximately 53 million by 2035, according to Bloomberg New Energy Finance’s June 2025 forecast, it is estimated that electric vehicle charging alone could increase annual U.S.

electricity demand by more than 175 TWh by 2035.

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According to the levelized cost of energy (“LCOE”) reports that Lazard Inc.

publishes annually, solar energy and wind energy now provide the lowest potential cost of electricity in the United States, even on an unsubsidized basis, which we believe will continue to lead to high demand for clean energy infrastructure assets to help minimize energy inflation.

publishes annually, new build solar energy and wind energy now provide the lowest potential cost of electricity in the United States, even on an unsubsidized basis, which we believe will continue to lead to high demand for clean energy infrastructure assets to help minimize energy inflation.

The third trend is the recognition of the real and growing financial cost of climate change.

According to the Pew Research Center, 51% of U.S.

adults in 2022 described climate change as a major threat to the country’s well-being, up from 44% in 2010, while approximately two-thirds of US.

adults in 2025 described climate change as a major threat to the country’s well-being, up from 40% in 2013, while approximately 64% of US.

adults in 2024 said renewable energy development should be prioritized over expanding oil, gas, and coal production.

Further, we believe the substantial increase over the last several years in both the magnitude and frequency of environmental disasters linked to climate change will lead to greater appreciation not only of the broader impacts of climate change but also the very real financial costs it is incurring as well.

According to the National Oceanic and Atmospheric Administration (“NOAA”), the year 2024 was the warmest year on record, while the ten warmest years since 1850 have occurred in the last decade.

In 2024, there were 27 confirmed climate disaster events in the United States with losses exceeding $1 billion that in aggregate accounted for total damage of approximately $183 billion, according to National Centers for Environmental Information, including Hurricane Helene at a cost of approximately $79 billion and Hurricane Milton at approximately $34 billion.

This compares to 28 climate disaster events in the United States with losses exceeding $1 billion in 2023 representing an aggregate cost of approximately $95 billion, and 2010 with 7 such climate disaster events with aggregate losses exceeding $20 billion.

More recently, the wildfires in Los Angeles County in January 2025 have resulted in damage that are expected exceed $250 billion, according to AccuWeather, which would make it the costliest natural disaster in U.S.

history, surpassing Hurricane Katrina in 2005.

According to the National Oceanic and Atmospheric Administration (“NOAA”), the year 2025 was the third warmest year on record, while the ten warmest years since 1850 have occurred in the last decade.

According to ClimateCentral, a policy-neutral 501(c)(3) nonprofit, in 2025 there were 23 confirmed climate disaster events in the United States with losses exceeding $1 billion that in aggregate accounted for total damage of approximately $115 billion.

Over the period from 2016 to 2025, there have been over 200 such events with aggregate costs of $1.5 trillion.

It has become clear that climate change is not merely a concern for environmentalists but a real and growing threat to communities across the United States (and globe) that is resulting in substantial and growing financial cost to society.

We believe the persistence and possibility of intensification of these events will not only result in even greater recognition of the threat of climate change but a growing appreciation for clean energy and other climate solutions and in turn an increase in the types of sustainable infrastructure investment opportunities that are the focus of HASI’s business model.

Finally, this expected growth in U.S.

electricity demand combined with the increase in climate events and disasters, as discussed above, is also leading to greater attention to and prioritization of improving the resilience and reliability of the grid, while greater geopolitical conflict and uncertainty along with volatility in fossil fuel prices is leading to growing prioritization of national energy security.

We believe renewable energy and storage provide important solutions to both of these issues.

Finally, the expected growth in U.S.

Simultaneously, greater geopolitical conflict and uncertainty along with volatility in fossil fuel prices is leading to growing prioritization of national energy security.

We believe renewable energy and storage provide important solutions to both of these

Distributed energy resources, particularly rooftop solar and battery storage, improve grid resilience, while lowering dependence and utilization of transmission and distribution infrastructure.

In addition, renewable energy’s use of freely available natural

resources, such as solar and wind energy, reduce the electric grid’s reliance on fossil fuels, which despite higher domestic production, continues to be primarily imported from foreign nations, many of whom are hostile to the United State.

In addition, renewable energy’s use of freely available natural resources, such as solar and wind energy, reduce the electric grid’s reliance on fossil fuels, which despite higher domestic production, continues to be primarily imported from foreign nations, many of whom are hostile to the United States.

As a result, we believe the growing focus on grid reliability and resilience, as well as national energy independence and security, are supportive of growth in clean energy demand in general, and in sustainable infrastructure assets.

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power markets and providing powerful tailwinds to demand for the sustainable infrastructure assets that HASI invests in and the returns we generate on them.

Separately, interest rates can also impact how we operate and manage our business.

Interest rates were volatile in 2024, and are expected to continue to be volatile into 2025.

In addition to the impact of these long-term trends on the U.S.

economy and energy markets, shorter-term movements in both interest rates and energy prices can also impact how we operate and manage our business.

Interest rates in particular can impact not only the returns we generate on our investments, but also our cost of funding.

The Federal Reserve Board of Governors increased the federal funds rate (the rate at which banks lend to one another) 11 times in 2022 and 2023 for an overall increase of 5.25% to reduce inflation to stated targets.

In 2024, as inflationary pressures eased, the Board of Governors lowered rates three times for an overall decrease of 1.00%.

In 2024 and 2025, as inflationary pressures eased, the Board of Governors lowered rates six times for an overall decrease of 1.75%.

See “Item 7A.

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To date, inflationary pressures have not had a material impact on our business.

Finally, with most of our investments and assets serving the energy markets, energy–and in particular–electricity prices also can impact the pricing and rates of returns of our investments.

According to the EIA, the average annual Henry Hub natural gas price for 2024 was $2.21/MMBtu, a decrease of 16% from 2023 and 68% from 2022, the largest two year decline on record.

The EIA cites robust natural gas production and limited growth in natural gas consumption as key contributors to the sharp decrease in price compared to prior years.

The EIA’s outlook for 2025 and 2026 is for the average price of natural gas to increase, to an average of $3.10 per MMBtu in 2025, and $4.00 per MMBtu in 2026.

While we typically invest in projects which sell power at prices which have been prenegotiated under power purchase agreements, lower natural gas prices, may negatively impact, renewable energy projects that sell wholesale power on a “merchant” basis at spot market prices, as wholesale electricity prices are closely tied to wholesale natural gas prices in many parts of the United States.

For more detail on commodity price impacts, see “Item 7A.

Finally, as most of the sustainable infrastructure assets we invest in are energy projects, energy—and in particular electricity—prices can also impact the pricing and returns we generate on our investments.

After rising more than 5% in 2025, average U.S.

retail electricity prices have increased by 29% between 2020 and 2025 and are forecasted to rise a further 4% between 2025 and 2027, according to the Energy Information Administration.

Similarly, wholesale electricity capacity prices have risen considerably in key markets such as PJM where capacity prices reached a new record for the third auction in a row at $333 per MW-day in December 2025, and MISO where the average annualized clearing price of approximately $215 per MW-day at the most recent auction in April 2025 increased more than ten times compared to the prior year’s.

The increase in electricity prices is a result of the recent growth in U.S.

electricity demand and, in our view, underscores the need for an increase in electricity generation capacity across the country.

Not only can higher electricity prices impact the pricing and returns of new investments, but we believe they can also increase the value of our existing project investments.

For more detail on the impact of energy prices, see “Item 7A.

Quantitative and Qualitative Disclosures about Market Risk—Commodity Price Risk.”

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Factors Impacting our Operating Results

We expect that our results of operations will be affected by a number of factors and will primarily depend on the size and mix of our Portfolio, the income we receive from securitizations, syndications and other services, our Portfolio’s credit risk profile, changes in market interest rates, commodity prices, federal, state and/or municipal governmental policies, general market conditions in local, regional and national economies, and maintain our exemption from registration as an investment company under the 1940 Act and the impact of climate change.

We expect that our results of operations will be affected by a number of factors and will primarily depend on the size and mix of our Portfolio, the income we receive from securitizations, syndications and other services, our Portfolio’s credit risk profile, changes in market interest rates, commodity prices, federal, state and/or municipal governmental policies, general market conditions in local, regional and national economies, and our ability to maintain our exemption from registration as an investment company under the 1940 Act and the impact of climate change.

Portfolio Size and Mix

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To the extent the size of our Portfolio changes due to equity method investment activity, the income or loss from such investments will not be included in revenue but are reflected as income (loss) from equity method investments in our income statement and will vary over time.

In addition, we may decide for any particular asset that we should securitize or otherwise sell a portion, or all, of the asset, which would result in gain on sale of receivables and investments or fee income as described below.

The level of portfolio activity will fluctuate from period to period based upon the market demand for the capital we provide, our view of economic fundamentals including interest rates, the present mix of our Portfolio, our ability to identify new opportunities that meet our investment criteria, the volume of projects that have advanced to stages where we believe a transaction is appropriate, seasonality in our activities and in the various projects where we may provide debt or equity and our ability to consummate the identified opportunities, including as a result of our available capital.

The level of our new origination activity, the percentage of the originations that we choose to retain on our balance sheet and the related income, will directly impact our interest and rental revenue and income from equity method investments.

Income from Securitization, Syndication and Other Services

We earn gain on sale of assets or fee income by securitizing or selling all or a portion of certain transactions.

Income from Securitization, Management and Origination Fees, and Other Services

We earn gain on sale of assets by securitizing or selling all or a portion of certain transactions.

For transactions that we securitize via a non-consolidated trust, we recognize a gain on the securitization.

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We may also recognize additional income from servicing fees from these securitized assets over the life of the asset.

We view the revenue from such activities as a valuable component of our earnings and an important source of franchise value.

In many cases, we arrange the securitization of the loan or other asset prior to originating the transaction and thus avoid exposure to credit spread and interest rate risks.

In these cases, we avoid funding risks for these financings or other assets given that our securitization partners contractually agree to fund such assets before the origination transaction is completed.

We also generate fee income for syndications where we arrange financings that are held by other investors or if we sell existing transactions to other investors.

In these transactions, unless we decide to hold a portion of the economic interest of the transaction on our balance sheet, we have no exposure to risks related to ownership of those financings.

We may charge advisory, retainer or other fees, including through our broker dealer subsidiary and for our management services provided to co-investment structures.

The total amount of income from securitizations, syndications, and other services will vary from quarter to quarter depending on various factors, including the level of our originations, the duration, credit quality and types of assets we originate, current and anticipated future interest rates, the impact on our leverage, the mix of our Portfolio and our need to tailor our mix of assets in order to maintain our exemption from registration under the 1940 Act.

We source and identify quality opportunities within our broad areas of expertise and apply our rigorous underwriting processes to our transactions, which, we believe, will generally enable us to minimize our credit losses and maintain our current level of financing costs.

We view the revenue from such activities as a valuable component of our earnings and an important source of franchise value.

We earn origination fees when co-investment structures we manage fund investments that we have sourced on their behalf, and we also earn ongoing management fees based on the assets held within these structures.

We may charge advisory, retainer or other fees to third parties, including through our broker dealer subsidiary.

The total amount of income from securitizations, management and origination fees, and other services will vary from quarter to quarter depending on various factors, including the level of our originations, the amount of assets within our managed co-investment structures, the duration, credit quality and types of assets we originate, current and anticipated future interest rates, the impact on our leverage, the mix of our Portfolio and our need to tailor our mix of assets in order to maintain our exemption from registration under the 1940 Act.

We identify opportunities within our broad areas of expertise and apply our rigorous underwriting processes to our transactions, which, we believe, will generally enable us to minimize our credit losses and maintain our current level of financing costs.

In the case of various renewable energy and other sustainable infrastructure projects, we will be exposed to the credit risk of the obligor of the project’s PPA or other long-term contractual revenue commitments, as well as to the credit risk of certain suppliers and project operators.

We are also exposed to credit risk in our other projects that do not benefit from governments as the obligor such as on balance sheet financing of projects undertaken by universities, schools and hospitals, as well as privately owned commercial projects.

We are also exposed to credit risk in our on-balance sheet financing of projects undertaken by universities, schools and hospitals, as well as privately owned commercial projects.

We have extended mezzanine loans to various special purpose entities which own residential or community solar projects, and the ultimate repayment of those loans is dependent on the creditworthiness of the related residential obligors.

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While we do not anticipate facing significant credit risk in our assets related to government energy efficiency projects, we are subject to varying degrees of credit risk in these projects in relation to payment guarantees provided by ESCOs that are required in the event that certain energy savings are not realized by the customer.

We seek to manage credit risk through thorough due diligence and underwriting processes, strong structural protections in our transaction agreements with customers and continual, active asset management and portfolio monitoring.

We seek to manage credit risk through thorough due diligence and underwriting processes, strong structural protections in our transaction agreements and continual, active asset management and portfolio monitoring.

Nevertheless, unanticipated credit losses could occur and during periods of economic downturn in the global economy, our exposure to credit risks from obligors increases, and our efforts to monitor and mitigate the associated risks may not be effective in reducing our credit losses.

See “Item 7A.

Quantitative and Qualitative Disclosures” about Credit Risks for further information on our credit risks and see Note 6 to our audited financial statements in this Form 10-K for additional detail of the credit risks surrounding our Portfolio.

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We are subject to interest rate risk in connection with new asset originations and our borrowings, including our revolving credit facilities, and in the future, to the extent we choose to enter into any new floating rate assets, revolving credit facilities or other borrowings.

We have entered into interest rate derivatives to hedge a portion of the risk associated with our floating rate borrowings.

See “Item 7A.

Quantitative and Qualitative Disclosures about Market Risk” for further information on interest rates risks and liquidity.

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For example, the performance of renewable energy projects that produce electricity can be impacted by volatility in the market prices of various forms of energy, including electricity, coal and natural gas.

This is especially true for utility scale projects that sell power on a wholesale basis such as many of our Grid-Connected projects as opposed to Behind-the-Meter projects which compete against the retail or delivered costs of electricity which includes the cost of transmitting and distributing the electricity to the end user.

This is true for utility scale projects that sell power on a wholesale basis and for Behind-the-Meter projects that compete against the retail or delivered costs of electricity, which includes the cost of transmitting the electricity to the end user.

See “Item 7A.

Quantitative and Qualitative Disclosures about Market Risk” for further information on the impact of commodity prices.

Government Policies

We make investments in renewable energy projects that typically depend in part on various federal, state or local governmental policies that support or enhance the project’s economic feasibility.

We make investments in energy transition projects that may benefit from various federal, state or local governmental policies that support or enhance the project’s economic feasibility.

Such policies may include governmental initiatives, laws and regulations designed to reduce energy usage and impact the use of renewable energy or the investment in, and the use of, climate solutions.

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Other incentives include tariffs, tax incentives and other cash and non-cash payments.

Commercial entities, developers of climate solutions projects, and government agencies consider the impacts of these policies and incentives when making decisions on capital expenditures.

Commercial entities, developers of sustainable infrastructure projects, and government agencies consider the impacts of these policies and incentives when making decisions on capital expenditures.

Government regulations may also impact the terms of third party financing provided to support these projects.

If any of these government policies, incentives or regulations are adversely amended, delayed, eliminated, reduced, retroactively changed or not extended beyond their current expiration dates or there is a negative impact from the recent federal law changes or proposals, the operating results of the projects we finance and the demand for, and the returns available from our investments may decline, which could harm our business.

If any of these government policies, incentives or regulations are further adversely amended, delayed, eliminated, reduced, retroactively changed or not extended beyond their current expiration dates or there is a negative impact from the recent federal law changes or proposals, the operating results of the projects we finance and the demand for, and the returns available from our investments may decline, which could harm our business.

Critical Accounting Policies and Use of Estimates

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We account for our investment in entities that are considered voting or variable interest entities under ASC 810, Consolidation .

We perform an ongoing assessment as to whether each entry is a voting interest entity or a variable interest entity, and for variable interest entities, we make judgments to determine the primary beneficiary of each entity as required by ASC 810, which includes an assessment of the type and degree of control we have over the entity.

We perform an ongoing assessment as to whether each entity is a voting interest entity or a variable interest entity, and for variable interest entities, we make judgments to determine the primary beneficiary of each entity as required by ASC 810, which includes an assessment of the type and degree of control we have over the entity.

If we would conclude that certain of these entities should be consolidated, we would include the entities’ assets, liabilities and related activity in our financial statements, along with non-controlling interests related to the ownership of the other equity holders.

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Impairment of our Portfolio

We evaluate the various assets in our Portfolio on at least a quarterly basis, and more frequently when economic or other conditions warrant such an evaluation, for delinquencies or other events that may indicate a potential impairment or specific

consideration in the development of the allowance for credit losses.

For our equity method investments and real estate, if an impairment charge is deemed appropriate it would be recorded in our income statement and reduce our net income.

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We have established various special purpose entities or securitization trusts for the purpose of securitizing certain receivables or other debt investments.

We make judgments, based in part, on supporting legal opinions, on whether these entities should be consolidated as a variable interest entity, as defined in ASC 810, Consolidation, and whether the transfers to these entities are accounted for as a sale of a financial asset or a secured borrowing under ASC 860, Transfers and Servicing .

We make judgments, based in part on supporting legal opinions, as to whether these entities should be consolidated as a variable interest entity, as defined in ASC 810, Consolidation, and whether the transfers to these entities are accounted for as a sale of a financial asset or a secured borrowing under ASC 860, Transfers and Servicing .

If we would conclude that certain of these special purpose entities or securitization trusts should be consolidated, we would include the assets and liabilities of the entity and their related activity in our financial statements.

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We also make assumptions regarding the fair value of our securitization assets in these transferred assets.

If our determination of fair value is determined to be incorrect, our gain on sale of receivables and investments in our income statement and securitization assets on our balance sheet will be inaccurate.

If our determination of fair value is determined to be incorrect, our gain on sale of receivables and debt securities in our income statement and retained interests in securitization trusts on our balance sheet will be inaccurate.

See Note 3 to our audited financial statements in this Form 10-K for a discussion around fair value measurements.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 14, 2025.

We completed approximately $2.3 billion of transactions during both 2024 and 2023.

We completed approximately $4.3 billion of transactions during 2025 and $2.3 billion in 2024.

Our strategy includes holding a large portion of these transactions on our balance sheet.

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Our Portfolio totaled approximately $7.6 billion as of December 31, 2025, and included approximately $3.9 billion of BTM assets, approximately $2.6 billion of GC assets, and approximately $1.1 billion of FTN assets.

Approximately 52% of our Portfolio consisted of unconsolidated equity investments in renewable energy related projects.

Approximately 46% consisted of commercial and government receivables on our balance sheet, and the remainder of our Portfolio was real estate leased to renewable energy projects under long-term operating lease agreements.

Approximately 52% of our Portfolio consisted of equity investments in renewable energy related projects.

Approximately 39% consisted of fixed-rate receivables and debt securities, approximately 7% 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 700 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 December 31, 2025.

Our Portfolio consisted of the following asset classes as of December 31, 2025:

The table below provides details on the interest rate and maturity of our receivables and debt securities as of December 31, 2025:

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(in millions)

Floating-rate receivable, interest rate of 10.0%

Floating-rate receivables, interest rates 9.50% or greater per annum

$ 507 2027 to 2030

Fixed-rate receivables, interest rates less than 5.00% per annum 43 2029 to 2047

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Receivables, net of allowance 3,280

Fixed-rate investments, interest rates less than 5.00% per annum 7 2033 to 2047

Total receivables and investments $ 2,903

Fixed-rate debt securities, interest rates less than 5.00% per annum

6 2033 to 2047

Fixed-rate debt securities, interest rates from 8.01% to 9.49% per annum

Fixed-rate debt securities, interest rates 9.50% or greater per annum

Total receivables and debt securities

(1) Excludes receivables held-for-sale of $114 million.

The table below presents, for the debt investments and real estate related holdings of our Portfolio and our interest-bearing liabilities inclusive of our short-term commercial paper issuances and revolving credit facilities, the average outstanding balances, income earned, interest expense incurred, and average yield or cost.

The table below presents, for the receivables, debt securities, and real estate related holdings of our Portfolio and our interest-bearing liabilities inclusive of our short-term commercial paper issuances and revolving credit facilities, the average outstanding balances, income earned, interest expense incurred, and average yield or cost.

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

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Portfolio, excluding equity method investments

Interest income, receivables $ 260 $ 203 $ 132

Average balance of receivables $ 3,086 $ 2,424 $ 1,650

Average interest rate of receivables 8.4 % 8.4 % 8.0 %

Interest income, investments $ 1 $ 1 $ 1

Average balance of investments $ 12 $ 12 $ 13

Average interest rate of investments 6.1 % 4.9 % 4.4 %

Rental income $ 2 $ 21 $ 26

Average balance of real estate $ 25 $ 286 $ 357

Average yield on real estate 8.5 % 7.4 % 7.3 %

Average balance of receivables, investments, and real estate $ 3,123 $ 2,722 $ 2,021

Average yield from receivables, investments, and real estate 8.4 % 8.3 % 7.9 %

Interest expense, including the impact of cash flow hedges (1)

Interest and rental income from receivables, debt securities, and real estate

$ 283 $ 263 $ 225

Average balance of receivables, debt securities, and real estate

$ 3,283 $ 3,123 $ 2,722

Average yield from receivables, debt securities, and real estate

8.6 % 8.4 % 8.3 %

Interest expense (1)

$ 281 $ 241 $ 171

Average balance of debt $ 4,810 $ 4,273 $ 3,437

Average cost of debt 5.8 % 5.6 % 5.0 %

(1) Excludes 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 investments as of December 31, 2024:

(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 December 31, 2025:

Principal payment due by Period

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Receivables (excluding allowance) $ 3,342 $ 421 $ 1,991 $ 682 $ 248

Investments 7 1 1 3 2

Debt securities

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

• the anticipated maturity dates of our receivables and investments and the weighted average yield for each range of maturities as of December 31, 2024,

• the maturity dates of our receivables and debt securities and the weighted average yield for each range of maturities as of December 31, 2025;

• the term of our leases and a schedule of our future minimum rental income under our land lease agreements as of December 31, 2025;

• the Performance Ratings of our Portfolio, and

• the Performance Ratings of our Portfolio;

• the receivables on non-accrual status.

For information on our securitization assets relating to our securitization trusts, see Note 5 to our audited financial statements in this Form 10-K.

The securitization assets do not have a contractual maturity date and the underlying securitized assets have contractual maturity dates until 2065.

For information on our retained interests in securitization trusts, see Note 5 to our audited financial statements in this Form 10-K.

These assets do not have a contractual maturity date and the underlying securitized assets have contractual maturity dates until 2065.

Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024

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(dollars in thousands)

Interest income $ 263,792 $ 207,794 $ 55,998 27 %

Rental income 2,095 21,251 (19,156) (90) %

Interest and rental income

$ 286,363 $ 265,887 $ 20,476 8 %

Gain on sale of assets

65,089 80,341 (15,252) (19) %

Securitization asset income

Management fees and retained interest income

33,621 26,054 7,567 29 %

Origination fee and other income

15,429 11,313 4,116 36 %

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Interest expense 292,404 242,364 50,040 21 %

Provision for loss on receivables 1,059 11,832 (10,773) (91) %

Provision for loss on receivables and retained interests in securitization trusts

12,145 1,059 11,086 1,047 %

Compensation and benefits 92,460 81,319 11,141 14 %

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Total expenses 427,686 357,647 70,039 20 %

Income before equity method investments 25,948 41,404 (15,456) (37) %

Income (loss) before equity method investments

(27,184) 25,948 (53,132) (205) %

Income (loss) from equity method investments 300,667 247,878 52,789 21 %

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Net income (loss) $ 188,236 $ 203,628 $ (15,392) (8) %

• Net income increased by approximately $53 million as a result of a $107 million increase in income from equity method investments and a $64 million increase in total revenue, partially offset by a $79 million increase in total expense and a $39 million increase in income tax expense.

• Net income decreased by approximately $15 million.

Increases in total revenue of $17 million and income from equity method investments of $53 million were offset by increased total expenses of $70 million, while income tax expense increased by $15 million.

These results do not include the Non-GAAP earnings adjustment related to equity method investments, which is discussed in the Non-GAAP Financial Measures section.

• Interest income and securitization asset income increased by $63 million due to a larger receivable portfolio and a larger securitization assets balance.

Rental income decreased as a result of the deconsolidation of certain special purpose entities which held such land assets as a result of amendments to terms of the non-recourse debt held by those special purpose entities.

See the table above for information on our average receivables, investment, and land balance and average yield on those assets.

Gain on sale of assets increased by $12 million primarily due to a larger

volume of assets being securitized.

Other income increased by $8 million due to fees earned from asset management activities, including $5 million of fees earned related to our temporary role as service provider to special purpose vehicles in which we have invested that were previously sponsored by SunPower Corporation.

In 2025, these services will be provided by an equity method investee we have formed with the replacement investor in those special purpose vehicles.

• Interest and rental income income increased by $20 million due to a larger receivable and debt securities portfolio and a higher average interest rate on those assets.

See the table above for information on our average receivables, debt securities, and real estate balance and average yield on those assets.

Gain on sale of assets decreased by $15 million primarily due to a smaller volume of assets being securitized.

Management fees and retained interest income increased by $8 million primarily due to increased fee-generating managed assets.

Origination fee and other income increased by $4 million due to fees earned from originating assets on behalf of co-investments structures that we manage.

• Interest expense for the year increased by approximately $50 million due to a higher average rate on a higher average debt balance.

See the table above for detail on our average debt rate and average debt balance.

Provision for loss on receivables decreased by $11 million compared to the prior period as a result of the release of certain loan specific reserves due to the contributions of loans to a co-investment structure and non-recurring prepayments, offset partially by provision on new loans and loan commitments.

Provision for loss on receivables increased by $11 million compared to the prior period driven primarily by loan-specific reserves on existing portfolio assets as well as new loans and loan commitments made during the period.

• Compensation and benefits increased by $11 million as a result of an increase in our employee headcount and compensation.

General and administrative increased by $2 million due to additional investment in corporate infrastructure.

Included in compensation and benefits and general and administrative expenses for 2024 are $6 million of costs related to our temporary role as service provider to special purpose vehicles in which we have invested previously sponsored by SunPower Corporation.

In 2025, these services will be provided by an equity method investee we have formed with the replacement investor in those special purpose vehicles.

• Income from equity method investments increased by $107 million, primarily due to allocations of income in the current period related to tax credits allocated to our investors related to a grid-connected utility-scale solar project, as those tax credits reduced the tax equity investors ongoing claim on the net assets of the project.

• Income tax expense increased by $39 million primarily due to an increase in our pre-tax book income.

General and administrative decreased by $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 $53 million, primarily due to allocations of income in the current period related to tax credits allocated to other investors in a solar project in which we have invested, as those tax credits reduced the tax equity investors ongoing claim on the net assets of the project.

These income allocations were partially offset by a loss we were allocated from an investee due to their sale of a project back to the project sponsor as discussed in Note 6 to our audited financial statements.

• Income tax expense increased by $15 million primarily driven by a remeasurement of state deferred taxes and adjustments related to changes in estimates made in calculating the Company’s income tax expense.

Non-GAAP Financial Measures

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

(1) adjusted earnings, (2) adjusted 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.

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Adjusted Earnings

We calculate adjusted earnings as GAAP net income (loss) excluding non-cash equity compensation 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, any one-time acquisition related costs or 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 equity-based expenses, provisions for loss on receivables, amortization of intangibles, 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.

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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.

Prior to 2024, we referred to this metric as distributable earnings.

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.

Certain of our equity method investments in renewable energy and energy efficiency projects are structured using typical partnership “flip” structures where the investors with cash distribution preferences receive a pre-negotiated return consisting of priority distributions from the project cash flows, in many cases, along with tax attributes.

Tax equity investors typically realize a large portion of their return through an allocation of the majority of tax attributes, such as tax depreciation and tax credits, as such credits are realized by the project.

Once this preferred return is achieved, the partnership “flips” and the common equity investor, often the operator or sponsor of the project, receives more of the cash flows through its equity interests while the previously preferred investors retain an ongoing residual interest.

We have made investments in both the preferred and common equity of these structures.

Regardless of the nature of our equity interest, we typically negotiate the purchase prices of our equity investments, which have a finite expected life, based on our underwritten project cash flows discounted back to the net present value, based on a target investment rate, with the cash flows to be received in the future reflecting both a return on the capital (at the investment rate) and a return of the capital we have committed to the project.

Given our equity method investments are in project companies, they typically have a finite expected life.

We typically negotiate the purchase prices of our equity investments based on our underwritten project cash flows discounted back to a net present value, based on a target investment rate, with the cash flows to be received in the future reflecting both a return on the capital (at the investment rate) and a return of the capital we have committed to the project.

We use a similar approach in the underwriting of our receivables.

Under GAAP, we account for these equity method investments utilizing the HLBV method.

Under this method, we recognize income or loss based on the change in the amount each partner would receive, typically based on the negotiated profit and loss allocation, if the assets were liquidated at book value, after adjusting for any distributions or contributions made during such quarter.

The HLBV allocations of income or loss may be impacted by the receipt of tax attributes, as tax equity investors are allocated losses in proportion to the tax benefits received, while the sponsors of the project are allocated gains of a similar amount.

The investment tax credit available for election in solar projects is a one-time credit realized in the quarter when the project is considered operational for tax purposes and is fully allocated under HLBV in that quarter (subject to an impairment test), while the production tax credit required for wind projects and electable for solar projects is a ten-year credit and thus is allocated under HLBV over a ten year period.

Under this method, we recognize income or loss based on the change in the amount each partner would receive if the assets were liquidated at book value, after adjusting for any distributions or contributions made during such quarter.

The amount received in a liquidation is typically based on the negotiated profit and loss allocation, which may differ from the allocation of distributable cash in any given period.

The amount allocated to a tax equity investor during the hypothetical liquidation is typically reduced over time as tax attributes are allocated to them and they achieve portions of their preferred return.

Accordingly, tax equity investors are allocated losses as they receive tax benefits, while the sponsors of the project and other investors subordinate to tax equity are allocated gains of a similar amount.

Tax equity investors can generally elect either investment tax credits or production tax credits, which are each recognized over different time periods.

This results in different HLBV income profiles despite the fact that cash allocations are typically not directly impacted by such a tax credit election.

In addition, the agreed upon allocations of the project’s cash flows may differ materially from the profit and loss allocation used for the HLBV calculations in a given period.

We also consider the impact of any OTTI in determining our income from equity method investments.

The cash distributions for those equity method investments where we apply HLBV are segregated into a return on and return of capital on our cash flow statement based on the cumulative income (loss) that has been allocated using the HLBV method.

However, as a result of the application of the HLBV method, including the impact of tax allocations, the high levels of depreciation and other non-cash expenses that are common to renewable energy projects and the differences between the agreed upon profit and loss and the cash flow allocations, the distributions and thus the economic returns (i.e.

return on capital) achieved from the investment are often significantly different from the income or loss that is allocated to us under the HLBV method in any one period.

Thus, in calculating adjusted earnings, for certain of these investments where there are characteristics as described above, we further adjust GAAP net income (loss) to take into account our calculation of the return on capital (based upon the underwritten investment rate), as adjusted to reflect the performance of the project and the cash distributed.

We believe this equity method investment adjustment to our GAAP net income (loss) in calculating our adjusted earnings measure is an important supplement to the income (loss) from equity method investments as determined under GAAP for an investor to understand the economic performance of these investments where HLBV income can differ substantially from the economic returns in any one period.

The application of the HLBV method described above results in GAAP income or loss in any one period that is often significantly different from the economic returns achieved from the investment in any one period as a result of the impact of tax allocations, the high levels of depreciation and other non-cash expenses that are common to renewable energy projects and the differences between the agreed upon profit and loss and the cash flow allocations.

Thus, in calculating Adjusted Earnings, we adjust GAAP net income (loss) for certain of our investments where there are characteristics as described above to take into account our calculation of the return on capital (based upon the underwritten investment rate), as adjusted to reflect the performance of the project and the cash distributed.

In calculating the underwritten investment rate, 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 this equity method investment adjustment to our GAAP net income (loss) in calculating our Adjusted Earnings measure is an important

supplement to the income (loss) from equity method investments as determined under GAAP that helps investors understand the economic performance of these investments where HLBV income can differ substantially from the economic returns in any one period.

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.

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$ 278 $ 107 $ 63

(1) Cash collected during 2023 and 2022 includes $9 million and $64 million, respectively of debt issuance proceeds from certain of our equity method investees, the repayment of which we have guaranteed.

(1) Cash collected includes $14 million in 2025 and $9 million in 2023 related to debt issuance proceeds from certain of our equity method investees, the repayment of which we have guaranteed.

Adjusted Earnings does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), or an indication of our cash flow from operating activities (determined in accordance with GAAP), or a measure of our liquidity, or an indication of funds available to fund our cash needs, including our ability to make cash distributions.

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.

We have calculated our adjusted earnings for the years ended December 31, 2024, 2023 and 2022.

The table below provides a reconciliation of our GAAP net income to adjusted earnings:

The table below provides a reconciliation of our GAAP net income (loss) to Adjusted Earnings for the years ended December 31, 2025, 2024 and 2023:

Years Ended December 31,

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(dollars in thousands, except per share amounts)

Net income attributable to controlling stockholders (1)

Net income (loss) attributable to controlling stockholders (1)

$ 184,547 $ 1.41 $ 200,037 $ 1.62 $ 148,836 $ 1.42

Reverse GAAP income from equity method investments (300,667) (247,878) (140,974)

Equity method investments earnings

adjustment (2)

Adjusted income from equity method investments (2)

327,481 239,032 156,757

Elimination of proportionate share of fees earned from co-investment structures (3)

Elimination of proportionate share of up-front origination fees earned from co-investment structures (3)

(6,844) (1,554) —

Elimination of proportionate share of ongoing asset management fees earned from co-investment structures (4)

(4,288) (590) —

Equity-based expenses

29,885 25,608 19,782

Non-cash provision for loss on receivables (4)

Provision for loss on receivables (5)

12,145 1,059 11,832

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Non-cash provision (benefit) for income taxes 85,247 70,198 31,621

70,198 31,621 7,381

Current year earnings attributable to non-controlling interest

4 unchanged sentences

126,639,114 118,648,176 104,319,803

(1) The per share data reflects the GAAP diluted earnings per share and is the most comparable GAAP measure to our Adjusted earnings per share.

(1) The per share data reflects the GAAP diluted earnings per share which is the most comparable GAAP measure to our Adjusted Earnings per share.

(2) This is a non-GAAP adjustment to reflect the return on capital of our equity method investments as described above.

(3) This adjustment is to eliminate the intercompany portion of fees received from co-investment structures that for GAAP net income is included in the Equity method income line item.

(3) This adjustment is to eliminate the intercompany portion of up-front origination fees received from co-investment structures that for GAAP net income is included in the Equity method income line item.

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

(4) In addition to these provisions, in 2022 we wrote off two commercial receivables with a combined total carrying value of approximately $8 million which represented assignments of land lease payments from two wind projects that we had originated in 2014 as a part of an acquisition of a large land portfolio.

In 2017, the operator of the projects terminated the lease, at which time we filed a legal claim and placed these assets on non-accrual status.

In 2019, we received a court decision indicating that the owners of the projects were within their rights under the contract terms to terminate the lease which impacts the land lease assignments to us, at which time we reserved the receivables for their full carrying amount.

In 2022, we received a court decision indicating that our appeal was not successful, and accordingly wrote off the full amount of the receivable.

We have excluded the write-off from Adjusted earnings for the year ended December 31, 2022, due to the infrequent occurrence of credit losses as well as the unique nature of the receivables, as the assignment of land lease payments from wind projects represent a small portion of our total portfolio.

(4) This adjustment is to eliminate the intercompany portion of ongoing asset management fees received from co-investment structures that for GAAP net income is included in the Equity method income line item.

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

(5) In 2024, we concluded that an equity method investment, along with certain loans we had made to this investee, were not recoverable.

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

(5) Shares used to calculated Adjusted earnings per share represents the weighted average number of shares outstanding including our issued unrestricted common shares, restricted stock awards, restricted stock units, long-term incentive plan units, and the non-controlling interest in our Operating Partnership.

(6) Included in Interest expense within our statements of operations.

(7) Shares used to calculate Adjusted Earnings per share represents the weighted average number of shares outstanding including our issued unrestricted common shares, restricted stock awards, restricted stock units, long-term incentive plan units, and the non-controlling interest in our Operating Partnership.

We include any potential common stock issuances related to share based compensation units in the amount we believe is reasonably certain to vest.

As it relates to Convertible Notes, we will assess the market characteristics around the instrument to determine if it is more akin to debt or equity based on the value of the underlying shares compared to the conversion price.

If the instrument is more debt-like then we will include any related interest expense and exclude the underlying shares issuable upon conversion of the instrument.

If the instrument is more equity-like and is more dilutive when treated as equity then we will exclude any related interest expense and include the weighted average shares underlying the instrument.

We will consider the impact of any capped calls in assessing whether an instrument is equity-like or debt like.

Adjusted Net Investment Income

We have a portfolio of investments that we finance using a combination of debt and equity.

We calculate adjusted net investment income as shown in the table below by adjusting GAAP-based net investment income for those earnings adjustments that are applicable to adjusted net investment income.

We believe that this measure is useful to investors as it shows the recurring income generated by our Portfolio after the associated interest cost of debt financing.

Our management also uses adjusted net investment income in this way.

Our non-GAAP adjusted net investment income measure may not be comparable to similarly titled measures used by other companies.

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

Prior to 2024, we referred to this measure as distributable net investment income.

The following is a reconciliation of our GAAP-based net investment income to our adjusted net investment income for the years ended December 31, 2024, 2023 and 2022:

As it relates to Convertible Notes, we assess whether the instrument is more akin to debt or equity based on the value of the underlying shares compared to the conversion price during each period.

If the instrument is determined to be more debt-like then we will include any related interest expense and exclude the underlying shares issuable upon conversion of the instrument.

If the instrument is determined to be more equity-like and is more dilutive when treated as equity then we will exclude any related interest expense and include the weighted average shares underlying the instrument.

We will consider the impact of any capped calls we hold in assessing whether an instrument is equity-like or debt like.

Adjusted Recurring Net Investment Income

We have a Portfolio of investments that we finance using a combination of debt and equity, and we also generate recurring income from our retained interests in securitization trusts and from ongoing management fees from our securitization trusts and our co-investment vehicle.

We calculate Adjusted Recurring Net Investment Income as shown in the table below by adjusting GAAP-based net investment income for those earnings adjustments that are applicable to Adjusted Recurring Net Investment Income.

We believe that this measure is useful to investors as it shows the recurring income generated by our Portfolio after the associated interest cost of debt financing and from our asset management activities.

Our management also uses Adjusted Recurring Net Investment Income in this way.

Our non-GAAP Adjusted Recurring Net Investment Income measure may not be comparable to similarly titled measures used by other companies.

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, including information about our equity method investments, see the discussion above related to Adjusted Earnings.

The following is a reconciliation of our GAAP-based net investment income to our Adjusted Recurring Net Investment Income for the years ended December 31, 2025, 2024 and 2023:

Years Ended December 31,

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(in thousands)

Interest income $ 263,792 $ 207,794 $ 134,656

Rental income 2,095 21,251 26,245

GAAP-based investment revenue $ 265,887 $ 229,045 $ 160,901

Interest and rental income

$ 286,363 $ 265,887 $ 229,045

Management fees and retained interest income

33,621 26,054 19,259

Interest expense

GAAP-based net investment income $ 23,523 $ 58,037 $ 45,342

Equity method earnings adjustment 239,032 156,757 131,762

(292,404) (242,364) (171,008)

GAAP-based net investment income (loss) (1)

27,580 49,577 77,296

Adjusted income from equity method investments (2)

327,481 239,032 156,757

Loss (gain) on debt modification or extinguishment (3)

Amortization of real estate intangibles 11 180 2,473

Adjusted net investment income

Elimination of proportionate share of ongoing asset management fees earned from co-investment structures (4)

(4,288) (590) —

Adjusted Recurring Net Investment Income

$ 361,955 $ 289,152 $ 236,526

(1) GAAP-based net investment income (loss) as reported in previous periods was not defined to include Management fees and retained interest income.

It has been included here in comparative periods to reflect the new definition.

(2) This is a non-GAAP adjustment to reflect the return on capital of our equity method investments as described above.

(3) Included in Interest expense within our statements of operations.

(4) GAAP net income includes an elimination of the intercompany portion of ongoing asset management fees received from co-investment structures in the Equity method income line item.

Since GAAP Equity method income is not a component of this metric, we include the elimination of the management fee through this adjustment.

Managed Assets

As we consolidate assets on our balance sheet, securitize assets off-balance sheet, and manage asset in which we coinvest with other parties, certain receivables and other assets are not reflected on our balance sheet where we may have a residual interest in the performance of the investment, such as a retained interest in cash flows.

We consolidate assets on our balance sheet, securitize assets off-balance sheet, and manage assets in which we coinvest with other parties via equity method investments.

Therefore, certain of our receivables and other assets are not reflected on our balance sheet where we may have a residual interest in the performance of the investment, such as a retained interest in cash flows.

Thus, we present our investments on a non-GAAP “Managed Assets” basis.

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Receivables held-for-sale 114 76

Real estate 3 111

Investments 7 7

Real estate and debt securities

GAAP-based Portfolio 7,586 6,594

Other investors’ share of assets held in securitization trusts

Other investors’ share of assets held in co-investment structures (1)

Assets held in securitization trusts

Fee-generating assets held in co-investment structures (1)

Non-fee generating assets held in co-investment structures (2)

Managed Assets

(1) Total assets in co-investment structures are $600 million and an additional $215 million relates to closed transactions not yet funded as of December 31, 2024.

Adjusted Cash Flow from Operations Plus Other Portfolio Collections

We operate our business in a manner that considers total cash collected from our portfolio and making necessary operating and debt service payments to assess the amount of cash we have available to fund dividends and investments.

We believe that the aggregate of these items, which combine as a non-GAAP financial measure titled Adjusted Cash Flow from Operations plus Other Portfolio Collections, is a useful measure of the liquidity we have available from our assets to fund both new investments and our regular quarterly dividends.

$ 16,071 $ 13,703

(1) Represents assets in our co-investment structures which are attributable to our co-investors and on which we earn an asset management fee.

Total assets in co-investment structures are $1.9 billion and $0.6 billion as of December 31, 2025 and 2024, respectively.

There are $1.6 billion of closed transactions which have not yet funded as of December 31, 2025.

(2) Represents assets in our co-investment structures which are not attributable to our co-investors, and therefore are not fee-generating.

Such assets are attributable to us but were financed with debt issued by the co-investment structure and therefore are not reflected in the carrying value of the equity method investment we hold in the structure.

The following shows our Managed Assets by asset class as of December 31, 2025:

Adjusted Cash from Operations plus Other Portfolio Collections

We operate our business in a manner that considers total cash collected from our Portfolio after making necessary operating and debt service payments to assess the amount of cash we have available to fund dividends and investments.

We believe that the aggregate of these items, which together we present as a non-GAAP financial measure titled Adjusted Cash from Operations plus Other Portfolio Collections, is a useful measure of the liquidity generated from our assets to fund both new investments and our regular quarterly dividends.

This non-GAAP financial measure may not be comparable to similarly titled or other similar measures used by other companies.

Although there is also not a directly comparable GAAP measure that demonstrates how we consider cash available for dividend payment, below is a reconciliation of this measure to Net cash provided by operating activities.

Also, Adjusted Cash Flow from Operations plus Other Portfolio Collections differs from Net cash provided by (used in) investing activities in that it excludes many of the uses of cash used in our investing activities such as Equity method investments, Purchases of and investments in receivables, Purchases of investments, and Collateral provided to and received from hedge counterparties.

In addition, Adjusted Cash Flow from Operations plus Other Portfolio Collections is not comparable to Net cash provided by (used in) financing activities in that it excludes many of our financing activities such as proceeds from common stock issuances and borrowings and repayments of unsecured debt.

Cash available for reinvestment is a non-GAAP measure which is calculated as adjusted cash flow from operations plus other portfolio collections less dividend and distribution payments made during the period.

We believe Cash available for reinvestment is useful as a measure of our ability to make incremental investments from reinvested capital after factoring in all necessary cash outflows to operate the business.

Although there is also not a directly comparable GAAP measure that demonstrates how we consider cash available for dividend payment and reinvestment, below is a reconciliation of this measure to Net cash provided by operating activities.

Adjusted Cash from Operations plus Other Portfolio Collections also differs from Net cash provided by (used in) investing activities in that it excludes many of the uses of cash used in our investing activities such as Equity method investments, Purchases of and investments in receivables, Purchases of debt securities, and Collateral provided to and received from hedge counterparties.

In addition, Adjusted Cash from Operations plus Other Portfolio Collections is not comparable to Net cash provided by (used in) financing activities in that it excludes many of our financing activities such as proceeds from common stock issuances and borrowings and repayments of unsecured debt.

Cash available for reinvestment is a non-GAAP measure which is calculated as Adjusted Cash from Operations Plus Other Portfolio Collections less dividend and distribution payments made during the period.

We believe Cash Available for Reinvestment is useful as a measure of our ability to make incremental investments from internally generated capital after factoring in all necessary cash outflows to operate the business.

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

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Equity method investment distributions received (1)

59,416 39,142 30,140

Proceeds from sales of equity method investments — 9,472 —

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Proceeds from sales of land

Principal collections from debt securities (2)

1,849 47 3,805

Principal collections from investments (1)

Proceeds from the sale of a previously consolidated VIE (2)

Proceeds from sales of investments and securitization assets 5,390 — 7,020

Proceeds from sales of debt securities and retained interests in securitization trusts

Principal payments on non-recourse debt (7,136) (72,989) (21,606)

Adjusted cash flow from operations and other portfolio collections

Adjusted Cash from Operations plus Other Portfolio Collections

$ 959,224 $ 910,075 $ 265,908

Dividends and distributions

(209,776) (192,269) (159,786)

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$ 749,448 $ 717,806 $ 106,122

(1) Represents return of capital distributions from our equity method investments included in cash provided by (used in) investing activities section of our statement of cash flows which is incremental to any equity method investment distributions found in net cash provided by operating activities.

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

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(227,867) (172,679) (138,418)

Securitization asset and other income

Management fees and retained interest income and origination fees and other income

50,170 33,044 26,506

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(151) (8,083) 1,751

Adjusted cash flow from operations and other portfolio collections

Adjusted Cash from Operations plus Other Portfolio Collections

$ 959,224 $ 910,075 $ 265,908

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

(2) For the year ended December 31, 2024, interest paid includes a $20 million cash benefit from the settlement of a derivative which was designated as a cash flow hedge.

(2) Interest paid includes cash benefits of $25 million and $20 million from the settlement of derivatives which were designated as cash flow hedges for the years ended December 31, 2025 and 2024, respectively.

Adjusted Return on Equity

Adjusted Return on Equity is a measure of the economic performance of our invested equity capital.

Adjusted Return on Equity is calculated as our adjusted earnings divided by our average stockholder’s equity for the period.

The direct comparable GAAP measure is GAAP-based return on equity, which we have presented below.

Adjusted Return on Equity differs from GAAP-based return on equity in that the numerator of the calculation contains those adjustments described in the Adjusted Earnings section above.

We believe that Adjusted Return on Equity gives investors an understanding into our performance after considering the effects of financial leverage.

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

For the year ended December 31,

2025 2024 2023

(in thousands)

GAAP Net Income

$ 188,236 $ 203,628 $ 150,757

Average Stockholders’ Equity (1)

2,561,639 2,293,276 1,911,797

GAAP-based return on equity

7.3 % 8.9 % 7.9 %

Adjusted Earnings

$ 342,377 $ 290,636 $ 232,248

Average Stockholders’ Equity (1)

2,561,639 2,293,276 1,911,797

Adjusted Return on Equity

13.4 % 12.7 % 12.1 %

(1) For 2025, we changed the methodology for our calculation of Average Stockholders’ Equity to be calculated as the average of the Stockholders’ Equity at the end of the preceding year and as of the end each of the year’s four quarters.

We have recast prior periods to conform with this calculation methodology.

Other Measures and Metrics

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This metric is calculated on the ten year period ending December 31, 2025.

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

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

Although there is not a direct comparable GAAP measure, we have presented average annual recognized loss on Managed Assets as calculated under GAAP for comparison.

Average Annual Realized Loss on Managed Assets differs from average annual recognized loss on Managed Assets as calculated under GAAP as the timing is based on realization of loss rather than GAAP recognition.

We believe that Average Annual Realized Loss on Managed Assets provides an additional metric for assessing our underwriting quality over our history of investing in climate solutions.

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.

We believe that Average Annual Realized Loss on Managed Assets provides an additional metric to our underwriting quality over our history of

investing in energy transition assets and infrastructure.

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 December 31, 2025 is:

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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.

Our management uses Portfolio Yield this way and we believe that our investors use it in a similar fashion to evaluate certain characteristics of our Portfolio compared to our peers, and as such, we believe that the disclosure of Portfolio Yield is useful to our investors.

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

Our Portfolio totaled approximately $7.6 billion as of December 31, 2025.

Unlevered Portfolio Yield was 8.8% as of December 31, 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-K for additional discussion of the characteristics of our Portfolio as of December 31, 2024.

See Note 6 to our audited financial statements and “MD&A—Our Business” in this Form 10-K for additional discussion of the characteristics of our Portfolio as of December 31, 2025.

Human Capital Metrics

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As of December 31, 2025, we employed 173 people full-time, 5 people part-time, and 16 people as independent contractors.

The average tenure of our employees as of December 31, 2024, was approximately 4.5 years, and more than 40% of our employees had been employed by us for more than 4 years.

The average tenure of our full-time employees as of December 31, 2025, was approximately 4.5 years, and more than 40% of our employees had been employed by us for more than 4 years.

For the year ended December 31, 2025, we had a voluntary employee turnover rate of 5%.

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As discussed in “Item 1.

Business - Human Capital Strategy, we believe that fostering an internal culture of belonging that is supportive and allows people of all background to flourish lends itself to the highest levels of company performance and facilitates the attraction and retention of best-in-class talent.

Business—Human Capital Strategy”, we believe that fostering an internal culture of belonging that is supportive and allows people of all backgrounds to flourish lends itself to the highest levels of Company performance and facilitates the attraction and retention of best-in-class talent.

We track and report internally on key talent metrics including workforce demographics, critical role pipeline data, diversity data, and engagement and inclusion metrics.

These metrics are actively managed and reported to our executive leadership as well as our Board.

In addition to diversity of gender and ethnic background, we also value diversity of thought, with 54% of our leadership team and 70% of our Board possessing degrees outside the fields of business or economics, including in science and engineering, liberal and fine arts, and law.

Liquidity and Capital Resources

Liquidity is a measure of our ability to meet potential short term (within one year) and long term cash requirements.

Liquidity is a measure of our available cash and committed short-term borrowing capacity.

We carefully manage and forecast our liquidity sources and uses on a frequent basis.

Our sources of liquidity typically include collections from our Portfolio, cash proceeds from asset sales and securitizations, fee revenue, proceeds from debt transactions, and proceeds from equity transactions.

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

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

We finance our investments primarily with non-recourse or recourse debt, equity and off-balance sheet securitization or co-investment structures.

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 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.

We have available to us a broad range of financing sources to finance our investments including secured or unsecured debt, equity and off-balance sheet securitization or co-investment structures.

We maintain sufficiently available liquidity in the form of unrestricted cash and immediately available capacity on our credit facilities to manage our net cash flow.

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Unused capacity under our Credit-enhanced Commercial Paper Program

Unused capacity under our senior secured credit facility 22

Total liquidity

(1) Our unused capacity under the unsecured revolving credit facility is $1,341 million, however we have voluntarily reduced such capacity by the $100 million principal amount of the standalone commercial paper notes outstanding to serve as a credit enhancement to those standalone commercial paper notes.

(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 December 31, 2025, that reserved capacity was $226 million, and we have presented the available capacity under our unsecured revolving credit facility of $1.8 billion as reduced by that amount.

Capital markets activity during the year ended December 31, 2025

During the year ended December 31, 2024, we increased the available capacity available under our unsecured revolving credit facility to $1.35 billion, and extended the maturity of the facility to April 2028.

We also extended the maturity of our unsecured term loan facility to April 2027, and used borrowings from the unsecured revolving credit facility to partially prepay our unsecured term loan facility by $275 million.

We also increased the available capacity under our credit-enhanced green commercial paper notes program to $125 million, and extended the term of the facility to April 2026.

We established a senior secured credit facility, designed to warehouse qualifying climate solutions assets until they achieve key technical milestones, at which point we may consider them for sale to large institutional investors under our established securitization programs.

The capacity of this senior secured credit facility is $100 million, subject to the amount of pledged collateral.

In December of 2024, we launched a stand-alone commercial paper notes program, whereby we can issue commercial paper notes up to the lesser of the amount of available capacity currently existing under our unsecured credit facility or $1 billion.

During the year ended December 31, 2024, we issued an additional $200 million principal amount of 2027 Senior Unsecured Notes for proceeds of $204 million, and issued $94 million of non-recourse debt secured by equity method investments.

We also issued $1 billion of senior unsecured notes due 2034, and used $400 million of the net proceeds from such offering to redeem our 6.00% Senior Notes due 2025, and the remainder to temporarily repay a portion of the outstanding borrowings under our unsecured revolving credit facility.

We also issued $204 million in equity during 2024.

As discussed in Note 8 to our financial statements in this Form 10-K, we entered into a strategic partnership with KKR called CarbonCount Holdings 1, LLC (“CCH1”), under which we each have committed to invest $1 billion in climate solutions projects over an 18 month period.

During the year ended December 31, 2025, we increased the available capacity available under our unsecured revolving credit facility to $1.825 billion, adding five additional banks.

We issued $600 million principal amount of senior notes due 2031 and $400 million principal amount of senior 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 notes due 2026 and 2027, respectively.

We issued $500 million principal amount of 2056 junior subordinated notes, which credit rating agencies consider to be partly equity under their rating methodologies, and therefore reduces our reliance on equity issuances to maintain our credit ratings.

We repaid $220 million of Convertible Notes with existing liquidity, and issued $237 million in equity through our at-the-market equity program.

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.

As discussed in Note 6 to our audited financial statements in this Form 10-K, in 2024 we entered into a strategic partnership with KKR called CCH1, under which we each had committed at inception to invest $1 billion in eligible projects over an 18 month period.

In 2025, the commitment was increased to $1.5 billion of which $913 million remains to be funded by each of us as of December 31, 2025.

The commitment period was extended to conclude in December 2027 to allow additional time to invest the additional equity commitments as well as 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.

Maturities of recourse debt obligations

In addition to general operational obligations, which are typically paid as incurred, and dividends and distributions, which are declared by our Board quarterly, we have future cash needs related to the payments due at maturity of our Senior Unsecured Notes and our term loan facilities, and the balances of our short-term commercial paper programs and our revolving credit facilities.

We also have maturities related to our non-recourse debt and Convertible Notes.

In addition to general operational obligations, which are typically paid as incurred, and dividends and distributions, which are declared by our Board quarterly, we have potential future cash needs related to the payments due at maturity of our Commercial Paper Notes, Senior Notes, Junior Subordinated Notes, Convertible Notes and Term Loan facilities.

We also have maturities related to our non-recourse debt.

However, as it relates to the non-recourse debt, to the extent there are not sufficient cash flows received from investments pledged as collateral for such debt, the investor has no recourse against other corporate assets to recover any shortfalls and corporate cash contributions would not be required.

As it relates to the Convertible Notes, those obligations may be settled at maturity with cash, or with the issuance of shares to the extent that the market price of our common stock exceeds the strike price on our Convertible Notes.

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

The maturity profile of our recourse debt obligations are shown below:

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

The maturity profile of our recourse debt obligations is shown in the table below.

Amounts exclude $226 million principal amount of Standalone Commercial Paper Notes which mature in 2026, 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 recourse or non-recourse 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 may issue additional equity.

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

We also use separately funded special purpose entities or co-investment vehicles to allow us to expand the investments that we make or to manage Portfolio diversification.

The decision as to how we finance specific assets or groups of assets is largely driven by risk and portfolio and financial management considerations, including the potential for gain on sale or fee income, as well as the overall interest rate environment, prevailing credit spreads, the terms of available financing, and financial market conditions.

The decision as to how we finance specific assets or groups of assets is largely driven by risk, portfolio, and financial management considerations, including the potential for gain on sale or fee income, the overall interest rate environment including prevailing credit spreads, the terms of available financing, and financial market conditions.

During periods of market disruptions, certain sources of financing may be more readily accessible than others which may impact our financing decisions.

Over time, as market conditions change, we may use other forms of debt and equity in addition to these financing arrangements.

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 December 31, 2024, which is 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 100% as of December 31, 2024, which is at the top of our Board-approved targeted fixed rate debt percentage range of 75% to 100%.

The amount of financial leverage we may use 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 1.7 to 1 as of December 31, 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 99% as of December 31, 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.

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$ 5,149 100 % $ 4,400 100 %

Equity $ 2,405 $ 2,142

Debt for leverage calculation (3)

$ 4,899 $ 4,400

Equity for leverage calculation (3)

Leverage 1.7 to 1 1.8 to 1

(1) Floating-rate borrowings include borrowings under our floating-rate credit facilities and commercial paper issuances with less than six months original maturity, to the extent such borrowings are not hedged using interest rate swaps.

(2) Fixed-rate debt includes the impact of our interest rate swaps and collars on debt that is otherwise floating.

(2) Fixed-rate debt includes the impact of our interest rate derivatives on debt that is otherwise floating.

Debt excludes securitizations that are not consolidated on our balance sheet.

Since the borrowing rate associated with our junior subordinated notes is fixed for the first five years until which time we have the option to redeem them, we have included those notes as fixed-rate debt.

(3) Our leverage ratio includes the impact, as approved by our Board and as consistent with the methodologies of the credit rating agencies, of reflecting our $500 million principal amount of junior subordinated notes outstanding as of December 31, 2025 as being 50% equity.

We intend to use financial leverage for the primary purpose of financing our Portfolio and business activities and not for the purpose of speculating on changes in interest rates.

While we may temporarily exceed the leverage limit, if our Board approves a material change to this limit, we anticipate advising our stockholders of this change through disclosure in our periodic reports and other filings under the Exchange Act.

While we generally intend to hold our target assets that we do not securitize upon acquisition as long term investments, certain of our investments may be sold in order to manage our interest rate risk and liquidity needs, to meet other operating objectives and to adapt to market conditions.

The timing and impact of future sales of receivables and investments, if any, cannot be predicted with any certainty.

We or our affiliates may, at any time and from time to time, seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise.

While we generally intend to hold our target assets that we do not securitize upon acquisition as long-term investments, certain of our investments may be sold in order to manage our interest rate risk and liquidity needs, to meet other operating objectives or to adapt to market conditions.

The timing and impact of future sales of receivables, debt securities, or equity method investments, if any, cannot be predicted with any certainty.

We may, at any time and from time to time, seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise.

Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

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684 200 1,792

Increase (decrease) in cash and cash equivalents

Increase (decrease) in cash, cash equivalents, and restricted cash

$ (5) $ 75 $ (101)

Discussion of significant changes in cash provided by operating activities

Net cash provided by operating activities for the year ended December 31, 2024 was $94 million lower than the year ended December 31, 2023.

Net income was $53 million higher in the current period, which was offset by higher net negative adjustments to net income of $147 million when compared to the prior period.

Net cash provided by operating activities for the year ended December 31, 2025 was $161 million higher than the year ended December 31, 2024.

Net income was $15 million lower in the current period, which was offset by lower net negative adjustments to net income of $176 million when compared to the prior period.

$151 million of the overall increase is driven by additional equity method investment distributions being considered operating in nature under GAAP in the current period.

Discussion of significant changes in cash used in investing activities

Net cash used in investing activities for the year ended December 31, 2024 was $1.8 billion lower than the year ended December 31, 2023.

In 2024, we invested $473 million less in equity method in equity method investments, made $676 million fewer loans and investments, We received $116 million more for the sale of real estate, $164 million more from the sale of receivables, and collected $403 million additional in principal collections from receivables, driven primarily by a large prepayment in 2024.

Net cash used in investing activities for the year ended December 31, 2025 was $725 million higher than in the year ended December 31, 2024.

In 2025, we invested $488 million more in portfolio assets, and received $294 million less from the sale of assets.

This was partially offset by greater principal collections from receivables and investing equity method investment distributions of $125 million.

Discussion of significant changes in cash provided by financing activities

Net cash provided by financing activities for the year ended December 31, 2024 was $1.6 billion lower than the year ended December 31, 2023.

Net credit facility activity was $750 million lower than in the prior year.

We issued $115 million less in term loans in the current year, and made $551 million additional term loan payments.

We issued $289 million less common stock in the current period.

We had a net $221 million cash inflow related to the issuance and repayments of convertible notes and related capped call purchase in 2023 which did not recur in the current period.

Hedging collateral financing activities provided $39 million more in 2024 than in 2023.

Net cash provided by financing activities for the year ended December 31, 2025 was $483 million higher than the year ended December 31, 2024.

Net credit facility and commercial paper activity was $501 million higher than in the prior year.

We had higher net long-term borrowing inflows of $62 million in the current year.

These amounts were partially offset by $95 million net decrease in cash provided to (received from) hedge counterparties.

Supplemental Guarantor Information

The Company and each of Hannon Armstrong Sustainable Infrastructure, L.P., Hannon Armstrong Capital, LLC.

HAC Holdings I LLC, HAC Holdings II LLC, HAT Holdings I LLC and HAT Holdings II LLC (the "Subsidiary Guarantors") have filed a shelf registration statement on Form S-3 with the SEC pursuant to which the Company may offer and sell debt securities from time to time and such securities may be guaranteed by the Subsidiary Guarantors.

HAC Holdings I LLC, HAC Holdings II LLC, HAT Holdings I LLC and HAT Holdings II LLC (the “Subsidiary Guarantors”) have filed registrations statement with the SEC pursuant to which the Company has offered, and may in the future, offer and sell debt securities from time to time and such securities may be guaranteed by the Subsidiary Guarantors.

The Subsidiary Guarantors are consolidated in the Company's Consolidated Financial Statements and separate Consolidated Financial Statements of the Subsidiary Guarantors have not been presented in accordance with Rule 3-10 of Regulation S-X.

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Off-Balance Sheet Arrangements

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

Other than our securitization assets (including any outstanding servicer advances) of approximately $263 million as of December 31, 2024 , that may be at risk in the event of defaults or prepayments in our securitization trusts and as discussed below, and except as disclosed in Note 9 to our audited financial statements in this Form 10-K, 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.

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.

We have retained interests in securitization trusts (including any outstanding servicer advances) of approximately $310 million as of December 31, 2025 , that may be at risk in the event of defaults or prepayments in our securitization trusts and certain limited guarantees as discussed below.

We have not guaranteed any obligations of our non-consolidated entities or entered into any commitment or intent to provide additional funding to any such entities except as disclosed in Note 9 to our audited financial statements in this Form 10-K.

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

Additionally, we have made certain loans to equity method investees which we describe in Note 6 to our audited financial statements in this Form 10-K.

In connection with some of our transactions, we have provided certain limited guarantees to other transaction participants covering the accuracy of certain limited representations, warranties or covenants and provided an indemnity against certain losses from “bad acts” including fraud, failure to disclose a material fact, theft, misappropriation, voluntary bankruptcy or unauthorized transfers.

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In the event that our Board determines to make distributions in excess of the income or cash flow generated from our assets, we may make such distributions from the proceeds of future offerings of equity or debt securities or other forms of debt financing or the sale of assets.

Our Board had approved of our revocation of our REIT status effective for tax year 2024.

We elected to be taxed as a REIT during tax years 2023 and previous.

Our Board approved of our conversion to a C-Corporation in 2024 effective in that tax year.

Prior to this conversion, we elected to be taxed as a REIT during tax years 2023 and previous.

federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that it pays tax at regular corporate rates to the extent that it annually distributes less than 100% of its REIT taxable income.

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Book Value Considerations

As of December 31, 2024, we carried only our investments, residual assets in securitized financial assets, and our derivatives at fair value on our balance sheet.

As of December 31, 2025, we carried only our debt securities, receivables held-for-sale for which we had elected the fair value option, if any, retained interests in securitization trusts, and our 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 investments, the residual assets in securitized financial assets, and derivatives that are carried on our balance sheet at fair value as of December 31, 2024, the carrying value of our remaining assets and liabilities are calculated as of a particular point in time, which is largely determined at the time such assets and liabilities were added to our balance sheet using a cost basis in accordance with GAAP, adjusted for income or loss recognized on such assets.

Other than our those assets listed above which are carried at fair value on our balance sheet, the carrying value of our remaining assets and liabilities are typically determined using a cost basis approach 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.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis