What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-07 compared with 2026-05-08 · 137 added, 98 removed, 424 unchanged (36% of the section changed)

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• originated by programmatic clients.

We completed approximately $637 million of transactions during the three months ended March 31, 2026, compared to approximately $706 million during the same period in 2025.

As of March 31, 2026, our total Managed Assets are $16.4 billion, and include our Portfolio, the portion of assets owned by others in our co-investment vehicle, and other assets in securitization trusts.

We held approximately $7.6 billion of transactions on our balance sheet, which we refer to as our “Portfolio.” As of March 31, 2026, our Portfolio consisted of over 600 assets and we seek to manage the diversity of our Portfolio by, among other factors, project type, project operator, type of investment, type of technology, transaction size, geography, obligor and maturity.

We completed approximately $1.1 billion and $1.7 billion of transactions during the three and six months ended June 30, 2026, respectively, compared to approximately $189 million and $894 million during the same period in 2025, respectively.

As of June 30, 2026, our total Managed Assets are $17.6 billion, and include our Portfolio, the portion of assets owned by others in our co-investment vehicle, and other assets in securitization trusts.

We held approximately $8.2 billion of transactions on our balance sheet, which we refer to as our “Portfolio.” As of June 30, 2026, our Portfolio consisted of over 600 assets and we seek to manage the diversity of our Portfolio by, among other factors, project type, project operator, type of investment, type of technology, transaction size, geography, obligor and maturity.

The fee-generating assets attributable to other investors in our co-investment structures that were not consolidated as part of our Portfolio totaled approximately $1.5 billion.

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We finance such investments via securitization transactions, where we transfer all or a portion of an investment to a securitization trust in exchange for cash and/or residual interests in the trust, and in some cases, ongoing fees.

As of March 31, 2026, we manage approximately $7.3 billion in assets in such securitization trusts.

As of June 30, 2026, we manage approximately $7.4 billion in assets in such securitization trusts.

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

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

As of March 31, 2026, our pipeline consisted of more than $6.5 billion in new equity, debt and real estate opportunities.

As of June 30, 2026, our pipeline consisted of more than $6.5 billion in new equity, debt and real estate opportunities.

Of our pipeline, approximately 35% is related to BTM assets, 51% is related to GC assets, and 8% are related to FTN assets, with the remainder related to other sustainable infrastructure.

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

We believe the estimates and assumptions used in preparing our financial statements and related footnotes are reasonable and supportable based on the best information available to us as of March 31, 2026.

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

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Our Portfolio

Our Portfolio totaled approximately $7.6 billion as of March 31, 2026 and included approximately $3.8 billion of BTM assets, approximately $2.6 billion of GC assets, and approximately $1.2 billion of FTN assets.

Our Portfolio totaled approximately $8.2 billion as of June 30, 2026 and included approximately $4.1 billion of BTM assets, approximately $2.6 billion of GC assets, and approximately $1.5 billion of FTN assets.

Approximately 56% of our Portfolio consisted of equity method investments in renewable energy related projects.

Approximately 38% consisted of fixed-rate receivables and debt securities, approximately 6% consisted of floating-rate receivables, and 2% of our Portfolio was real estate leased to renewable energy projects under lease agreements.

Our Portfolio consisted of over 600 transactions with an average size of $12 million and the weighted average remaining life of our Portfolio (excluding match-funded transactions) of approximately 16 years as of March 31, 2026.

Our Portfolio consisted of the following asset classes as of March 31, 2026:

The table below provides details on the interest rate and maturity of our receivables and debt securities as of March 31, 2026:

Approximately 34% consisted of fixed-rate receivables and debt securities, approximately 6% consisted of floating-rate receivables, and 4% of our Portfolio was real estate leased to renewable energy projects under lease agreements and other Portfolio assets.

Our Portfolio consisted of over 600 transactions with an average size of $12 million and the weighted average remaining life of our Portfolio of approximately 16 years as of June 30, 2026.

Our Portfolio consisted of the following asset classes as of June 30, 2026:

The table below provides details on the interest rate and maturity of our receivables and debt securities as of June 30, 2026:

Balance Maturity

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(1) Excludes receivables held for sale of $73 million.

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, the interest expense incurred, and average yield or cost.

The table below presents, for the receivables, debt securities, and real estate 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, the interest expense incurred, and average yield or cost.

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

Three Months Ended March 31,

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

2026 2025 2026 2025

(dollars in millions)

Portfolio, excluding equity method investments

Portfolio receivables, debt securities, and real estate

Interest and rental income from receivables, debt securities, and real estate $ 83 $ 66 $ 165 $ 132

Average balance of receivables, debt securities, and real estate $ 3,446 $ 3,166 $ 3,458 $ 3,126

$ 3,433 $ 3,052

Average yield from receivables, debt securities, and real estate 9.7 % 8.4 % 9.5 % 8.5 %

Interest expense (1)

$ 86 $ 69 $ 166 $ 134

Average balance of debt $ 5,584 $ 4,776 $ 5,425 $ 4,666

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

The following table provides a summary of our anticipated principal repayments for our receivables and debt securities as of March 31, 2026:

The following table provides a summary of our anticipated principal repayments for our receivables and debt securities as of June 30, 2026:

Principal payment due by Period

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

• the anticipated maturity dates of our receivables and debt securities and the weighted average yield for each range of maturities as of March 31, 2026;

• the term of our leases and a schedule of our future minimum rental income under our land lease agreements as of March 31, 2026;

• the anticipated maturity dates of our receivables and debt securities and the weighted average yield for each range of maturities as of June 30, 2026;

• the term of our leases and a schedule of our future minimum rental income under our land lease agreements as of June 30, 2026;

• the Performance Ratings of our Portfolio;

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Results of Operations

Comparison of the Three Months Ended March 31, 2026 vs.

Three Months Ended March 31, 2025

Three months ended March 31,

Comparison of the Three Months Ended June 30, 2026 vs.

Three Months Ended June 30, 2025

Three months ended June 30,

2026 2025 $ Change % Change

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Interest expense 87,469 79,746 7,723 10 %

Provision for loss on receivables and retained interests in securitization trusts

Provision (benefit) for loss on receivables and retained interests in securitization trusts (11,006) 1,038 (12,044) (1160) %

Compensation and benefits 26,513 18,131 8,382 46 %

General and administrative 7,970 6,497 1,473 23 %

Total expenses 110,946 105,412 5,534 5 %

Income (loss) before equity method investments 9,844 (19,727) 29,571 (150) %

Income (loss) from equity method investments 178,912 157,680 21,232 13 %

Income (loss) before income taxes 188,756 137,953 50,803 37 %

Income tax (expense) benefit (56,973) (38,158) (18,815) 49 %

Net income (loss) $ 131,783 $ 99,795 $ 31,988 32 %

• Net income increased by $32 million due primarily to an increase in income from equity method investments of $21 million and an increase in revenue of $35 million, offset partially by an increase in total expenses of $6 million and a $19 million increase in income tax expense.

• Total revenue increased by $35 million due to an increase in interest and rental income of $17 million caused by a higher average asset yield, a $8 million increase in gain on sale of assets driven primarily by the origination of a held-for-sale receivable for which we elected the fair value option in the current period, a $6 million increase in origination fee and other income due to additional investments originated in co-investment structures, and a $4 million increase in management fees and retained interest income due to a larger fee-earning Managed Assets balance.

• Interest expense increased by $8 million due primarily to a larger average outstanding debt balance and a higher average interest rate driven in part by the issuance of Junior Subordinated Notes that bear a higher interest rate but which reduce our need to issue equity to maintain our desired financial leverage ratio as a result of the partial equity treatment of these instruments by rating agencies.

We recorded an $11 million benefit for loss on receivables and retained interests in securitization trusts, driven primarily by loan-specific reserve releases, including the release driven by the consolidation of a project company borrower as discussed in Note 6 to our financial statements in this Form 10-Q.

• Compensation and benefits expenses increased by $8 million primarily due to growth in the size of the business and timing of incentive-based compensation accrued in the current period.

• Income from equity method investments increased by $21 million primarily due to allocations of income related to tax credits allocated to other investors in solar projects, as those tax credits reduced the tax equity investors’ ongoing claim on the net assets of the project, partially offset by $70 million in equity method investment impairments as discussed in Note 3 to our financial statements in this Form 10-Q.

• Income tax expense increased by $19 million primarily due to higher pre-tax book income driven by the items discussed above.

Comparison of the Six Months Ended June 30, 2026 vs.

Six Months Ended June 30, 2025

Six Months Ended June 30,

2026 2025 $ Change % Change

(dollars in thousands)

Interest and rental income

$ 167,159 $ 133,918 $ 33,241 25 %

Gain on sale of assets 38,583 26,497 12,086 46 %

Management fees and retained interest income

22,581 15,987 6,594 41 %

Origination fee and other income

16,693 6,224 10,469 168 %

Total Revenue 245,016 182,626 62,390 34 %

Interest expense 186,744 144,424 42,320 29 %

Provision (benefit) for loss on receivables and retained interests in securitization trusts (6,465) 4,850 (11,315) (233) %

Compensation and benefits 62,018 43,110 18,908 44 %

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Net income (loss) $ 58,041 $ 157,980 $ (99,939) (63) %

• Net income decreased by $132 million due primarily to a decrease in income (loss) from equity method investments of $167 million and an increase in total expenses of $47 million, offset by an increase in revenue of $27 million and a $55 million decrease in income tax expense.

• Total revenue increased by $27 million due to an increase in interest and rental income of $16 million caused by a higher average asset balance and asset yield, a $4 million increase in gain on sale of assets driven by a change in the mix of assets being securitized, a $4 million increase in origination fee and other income due to a structuring advisory fee recognized, and a $3 million increase in management fees and retained interest income due to a larger fee-earning Managed Assets balance.

• Interest expense increased by $35 million due to $19 million in redemption fees and the expensing of capitalized debt issuance costs associated with our redemption of the 2027 Senior Notes, as well due to a larger average outstanding debt balance and a higher average interest rate driven by the issuance of Junior Subordinated Notes that bear a higher interest rate but which reduce our need to issue equity to maintain our desired financial leverage ratio as a result of the partial equity treatment of these instruments by rating agencies.

We recorded a $5 million provision for loss on receivables and retained interests in securitization trusts, driven primarily by a loan-specific reserve where the underlying assets are experiencing project-specific technical challenges which are currently in the process of being remediated.

• Compensation and benefits expenses increased by $11 million primarily due to the acceleration of share-based compensation due to employees meeting the criteria of the Company’s retirement policy.

• Income (loss) from equity method investments decreased by $167 million primarily due to a $97 million loss caused by a timing difference between an investee’s execution of an investment tax credit sale agreement and their distribution of cash for the credit sale to the tax equity investors.

The execution of the sale agreement increased the tax equity investors’ capital accounts, which increased their allocation of GAAP equity relative to ours under the HLBV method.

The tax equity investors’ capital accounts are expected to normalize in a subsequent period when the cash is distributed to the tax equity investors, which will increase our allocation of GAAP equity.

The timing of the tax capital account impacts does not affect our economics from the investment.

• Income tax expense decreased by $55 million primarily due to lower pre-tax book income.

• Net income decreased by $100 million due to a decrease in income from equity method investments of $146 million and an increase in total expenses of $52 million.

These impacts were partially offset by increases in total revenue of $62 million and a decrease in income tax expense of $36 million.

• Total revenue increased by $62 million due to increases in interest and rental income, management fees and retained interest income and origination fee and other income.

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

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

Gain on sale of assets increased by $12 million driven partially by the origination of a held-for-sale receivable for which we elected the fair value option in the current period.

• Interest expense increased by $42 million due to a larger average outstanding debt balance and a higher average interest rate driven in part by the issuance of Junior Subordinated Notes that bear a higher interest rate but which reduce our need to issue equity to maintain our desired financial leverage ratio as a result of the partial equity treatment of these instruments by rating agencies.

We recorded a benefit for loss on receivables of $6 million driven by loan specific releases, including the release driven by the consolidation of a project company borrower as discussed in Note 6 to our financial statements in this Form 10-Q.

• Compensation and benefits increased by $19 million primarily due to the acceleration of share-based compensation due to employees meeting certain criteria of the Company’s retirement policy.

General and administrative expenses increased $2 million due to growth in the size of the company.

• Income from equity method investments decreased by $146 million primarily due to $70 million in equity method investment impairments as discussed in Note 3, as well as allocations of income related to tax credits allocated to other investors in solar projects in the prior year which did not recur.

• Income tax expense decreased by $36 million primarily due to lower income before income taxes driven primarily by lower income from equity method investments as discussed above.

Non-GAAP Financial Measures

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Adjusted Earnings

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 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, and non-cash tax charges and including 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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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 GAAP, we account for these equity method investments using the HLBV method.

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.

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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 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.

The following table provides results related to our equity method investments for the three months ended March 31, 2026 and 2025.

Three months ended March 31,

The following table provides results related to our equity method investments for the three and six months ended June 30, 2026 and 2025.

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

2026 2025 2026 2025

(in millions)

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Collections of Adjusted Earnings

$ 29 $ 53 $ 64 $ 73

Return of Capital 40 15 70 21

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

The table below provides a reconciliation of our GAAP net income (loss) to Adjusted Earnings for the three months ended March 31, 2026 and 2025.

Three Months Ended March 31,

The table below provides a reconciliation of our GAAP net income (loss) to Adjusted Earnings for the three and six months ended June 30, 2026 and 2025.

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

2026 2025 2026 2025

(dollars in thousands, except per share amounts)

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Provision for loss on receivables

(11,006) 1,038 (6,465) 4,850

Loss (gain) on debt modification or extinguishment (5)

1,387 10,557 20,206 10,878

Amortization of intangibles

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

(6) Includes impact of cash paid for state income taxes during the three months ended March 31, 2026.

(6) Includes impact of cash paid for state income taxes during the three and six months ended June 30, 2026.

(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.

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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 three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

The following is a reconciliation of our GAAP-based net investment income to our Adjusted Recurring Net Investment Income for the three and six months ended June 30, 2026 and 2025:

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

2026 2025 2026 2025

(in thousands)

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Management fees and retained interest income

12,850 8,988 22,581 15,987

Interest expense (87,469) (79,746) (186,744) (144,424)

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

1,387 10,557 20,206 10,878

Amortization of real estate intangibles 3 3 6 7

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Our non-GAAP Managed Assets measure may not be comparable to similarly titled measures used by other companies.

The following is a reconciliation of our GAAP-based Portfolio to our Managed Assets as of March 31, 2026 and December 31, 2025:

March 31, 2026 December 31, 2025

The following is a reconciliation of our GAAP-based Portfolio to our Managed Assets as of June 30, 2026 and December 31, 2025:

June 30, 2026 December 31, 2025

(in millions)

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Real estate and debt securities

Other Portfolio assets (1)

GAAP-based Portfolio 8,201 7,586

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Managed Assets $ 17,564 $ 16,071

(1) In the quarter ended June 30, 2026, we exercised certain of our protective rights under a loan agreement to a project company, which caused us to obtain the ability to direct the significant activities related to the projects, and accordingly to consolidate the project company to which the loans were made.

This amount includes $165 million of in-construction fixed assets we consolidated, net of a $25 million liability to be paid upon project completion and $14 million of non-controlling interest, representing our economic claim on these assets.

(2) 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 $2.3 billion and $1.9 billion as of March 31, 2026 and December 31, 2025, respectively .

There are $1.5 billion of closed transactions which have not yet funded as of March 31, 2026.

Total assets in co-investment structures are $2.9 billion and $1.9 billion as of June 30, 2026 and December 31, 2025, respectively .

There are $1.4 billion of closed transactions which have not yet funded as of June 30, 2026.

(3) 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 March 31, 2026:

The following shows our Managed Assets by asset class as of June 30, 2026:

Adjusted Cash from Operations plus Other Portfolio Collections

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

For the year ended, For the year ended, For the three months ended, For the three months ended, For the TTM ended,

December 31, 2024 December 31, 2025 March 31, 2026 March 31, 2025 March 31, 2026

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

December 31, 2024 December 31, 2025 June 30, 2026 June 30, 2025 June 30, 2026

(in thousands)

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

For the year ended, For the year ended, For the three months ended, For the three months ended, For the TTM ended,

December 31, 2024 December 31, 2025 March 31, 2026 March 31, 2025 March 31, 2026

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

December 31, 2024 December 31, 2025 June 30, 2026 June 30, 2025 June 30, 2026

(in thousands)

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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.

Three months ended

March 31, 2026 March 31, 2025

Three months ended Six months ended

June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

(in thousands)

GAAP Net Income

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15.2 % 11.9 % 15.3 % 12.3 %

(1) Average Stockholders’ Equity is calculated as the average of the Stockholders’ Equity at the beginning and end of each quarterly period.

Other Metrics

Portfolio Yield

We calculate Portfolio Yield as the weighted average underwritten yield of the investments in our Portfolio as of the end of the period.

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 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 March 31, 2026.

Unlevered Portfolio Yield was 9.2% as of March 31, 2026 and 8.8% as of December 31, 2025.

See Note 6 to our financial statements and “MD&A—Our Business” in this Form 10-Q for additional discussion of the characteristics of our Portfolio as of March 31, 2026.

(1) Average Stockholders’ Equity for quarterly periods is calculated as the average of the Stockholders’ Equity at the beginning and end of each quarterly period.

Average Stockholders’ Equity for year-to-date periods is calculated as the average of the Stockholders’ Equity at the end of the preceding year and as of the end of each of the relevant period’s quarters.

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

Average Annual Realized Loss on Managed Assets

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

This metric is calculated over the ten-year period ending March 31, 2026.

This metric is calculated over the ten-year period ending June 30, 2026.

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

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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 March 31, 2026 is:

In the quarter ended June 30, 2026, we recognized a GAAP impairment on two equity method investments to reflect changes in assumptions including the current market discount rate as discussed in Note 6 to our financial statements.

These impairments totaled $70 million and are included in the Average Annual Recognized Loss on Managed Assets metric as calculated under GAAP below.

Given that we have not yet realized any loss, the projects continue to operate, and we expect to receive distributions from the projects in excess of our invested capital, this loss is not yet reflected in Average Annual Realized Loss on Managed Assets.

The table below shows these metrics as of June 30, 2026:

Average Annual Recognized Loss (GAAP) on Managed Assets

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Below is a summary of our available liquidity by source:

As of March 31, 2026

As of June 30, 2026

(in millions)

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Unused capacity under our unsecured revolving credit facility (1)

Unused capacity under our delayed draw term loan (2)

Unused capacity under our Credit-enhanced Commercial Paper Program

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(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, if any.

As of March 31, 2026, we had no outstanding Standalone Commercial Paper Notes.

(2) Amounts are available to be drawn 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.

Capital markets activity during the three months ended March 31, 2026

During the three months ended March 31, 2026, we issued $600 million principal amount of Junior Subordinated Notes due November 2056 and $400 million principal amount of Senior Notes due 2036.

As of June 30, 2026, we had no outstanding Standalone Commercial Paper Notes.

Capital markets activity during the six months ended June 30, 2026

During the six months ended June 30, 2026, we issued $600 million principal amount of Junior Subordinated Notes due November 2056 and $400 million principal amount of Senior Notes due 2036.

We used a portion of the proceeds of these issuances to redeem the outstanding $450 million principal amount of our 8.00% Senior Notes due 2027, with the remaining proceeds used to temporarily pay down short-term borrowings and ultimately invest in Portfolio assets.

We did not issue any equity during the three months ended March 31, 2026.

We used existing liquidity to redeem the outstanding $600 million principal amount of our 3.375% Senior Notes due 2026.

We issued $1 billion principal amount of Senior Notes due 2033, and used a portion of the proceeds to pay down our Secured Term Loan.

We did not issue any equity during the six months ended June 30, 2026.

In July 2026, we replaced the Prior Unsecured Revolving Credit Facility when we entered into the Unsecured Revolving Credit Facility, which increased the maximum outstanding borrowing amount to $2.25 billion, and lowered the applicable margin applied to the benchmark rate by 10 basis points.

The New Unsecured Revolving Credit Facility matures in 2031.

We also replaced our Prior Unsecured Term Loan Facility and delayed-draw facility with a new Unsecured Term Loan Facility which has a balance of $400 million and matures in 2029.

The applicable margin to the benchmark rate decreased by 47.5 basis points when compared to the Prior Unsecured Term Loan Facility.

As discussed in Note 6 to our financial statements in this Form 10-Q, we have an active co-investment vehicle with KKR called CarbonCount Holdings 1, LLC (“CCH1”), under which we each had committed to invest $1.5 billion in eligible projects over an investment period concluding in December 2027.

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

The maturity profile of our long-term recourse debt obligations as of March 31, 2026, is shown in the table below.

The maturity profile of our long-term recourse debt obligations as of June 30, 2026, is shown in the table below.

Additional borrowings and financial leverage management

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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 1.6 to 1 as of March 31, 2026, within our target operating range of between 1.5 to 1 and 2.0 to 1, and below our current board-approved leverage limit of up to 2.5 to 1.

As shown in the table below, our debt to equity ratio was approximately 1.7 to 1 as of June 30, 2026, within our target operating range of between 1.5 to 1 and 2.0 to 1, and below our current board-approved leverage limit of up to 2.5 to 1.

Our debt to equity ratio reflects 50% of our outstanding principal amount of Junior Subordinated Notes as equity as consistent with the treatment by rating agencies and as approved by our board.

Our percentage of fixed rate debt including the impact of our interest rate derivatives was approximately 100% as of March 31, 2026, which is within our targeted fixed rate debt percentage range of 75% to 100%.

Our percentage of fixed rate debt including the impact of our interest rate derivatives was approximately 95% as of June 30, 2026, which is within our targeted fixed rate debt percentage range of 75% to 100%.

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

The calculation of our fixed-rate debt and financial leverage as of March 31, 2026 and December 31, 2025 is shown in the chart below:

March 31, 2026 % of Total December 31, 2025 % of Total

The calculation of our fixed-rate debt and financial leverage as of June 30, 2026 and December 31, 2025 is shown in the chart below:

June 30, 2026 % of Total December 31, 2025 % of Total

(dollars in millions) (dollars in millions)

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Sources and Uses of Cash

We had approximately $151 million and $145 million of unrestricted cash, cash equivalents, and restricted cash as of March 31, 2026 and December 31, 2025, respectively.

The following table summarizes our cash flows for the three months ended March 31, 2026 and 2025.

We had approximately $281 million and $145 million of unrestricted cash, cash equivalents, and restricted cash as of June 30, 2026 and December 31, 2025, respectively.

The following table summarizes our cash flows for the six months ended June 30, 2026 and 2025.

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

As discussed above, Adjusted Cash from Operations plus Other Portfolio Collections was $235 million for the three months ended March 31, 2026.

For the three months ended,

March 31, 2026 March 31, 2025

As discussed above, Adjusted Cash from Operations plus Other Portfolio Collections was $456 million for the six months ended June 30, 2026.

For the six months ended,

June 30, 2026 June 30, 2025

(in millions)

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

Cash provided by (used in) operating activities for the three months ended March 31, 2026 was $53 million higher than the same period ended March 31, 2025.

Cash provided by (used in) operating activities for the six months ended June 30, 2026 was $41 million higher than the same period ended June 30, 2025.

Net income was $100 million lower in the current period, and there was a greater adjustment to net income of $141 million when compared to the prior period.

This increase in adjustment to net income includes $51 million greater cash received (paid) for held-for-sale receivables and $41 million more in equity method investment distributions which were classified as operating, which were offset partially by increased cash interest paid of $41 million.

This increase to cash provided by operating activities was driven primarily by equity method investments, where $40 million more in equity method investment distributions were classified as operating.

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

Cash provided by (used in) investing activities for the three months ended March 31, 2026 was $140 million lower than the same period ended March 31, 2025.

We collected $204 million more in principal from receivables in the current period, which was partially offset by $105 million additional invested in equity method investments and receivables.

We also collected a $63 million reimbursement from a co-investor for CCH1 advances made by us on their behalf in December 2025.

Cash provided by (used in) investing activities for the six months ended June 30, 2026 was $159 million lower than the same period ended June 30, 2025.

We invested $394 million additional in equity method investments in the current period, which was offset by $172 million more in principal collected from receivables in the current period as well as the collection of a $63 million reimbursement from a co-investor for CCH1 advances made by us on their behalf in December 2025.

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

Cash provided by (used in) financing activities for the three months ended March 31, 2026 was $120 million lower than the same period ended March 31, 2025.

We had lower net borrowings from our revolving credit facility and commercial paper notes of $602 million compared to the prior period, while net proceeds from senior notes and junior subordinated notes were $549 million higher in the current period than in the prior period.

Cash provided by (used in) financing activities for the six months ended June 30, 2026 was $300 million greater than the same period ended June 30, 2025.

Net borrowings from long-term capital sources including Senior Notes, Convertible Notes, Junior Subordinated Notes, and term loans were $948 million higher than in the prior period.

We had $527 million lower net borrowings from short-term sources including our unsecured revolving credit facility and our commercial paper programs.

We also issued $120 million in common stock in the prior period, which did not recur in the current period.

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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 $339 million as of March 31, 2026, that may be at risk in the event of defaults or prepayments in our securitization trusts and certain limited guarantees as discussed below.

retained interests in securitization trusts (including any outstanding servicer advances) of approximately $336 million as of June 30, 2026, 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 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 financial statements in this Form 10-Q.

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Book Value Considerations

As of March 31, 2026, we carried only our debt securities, our receivables held-for-sale for which we had elected the fair value option, if any, our retained interests in securitization trusts, and derivatives at fair value on our balance sheet.

As of June 30, 2026, we carried only our debt securities, our receivables held-for-sale for which we had elected the fair value option, if any, our retained interests in securitization trusts, and derivatives at fair value on our balance sheet.

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

Other than those assets listed above that are carried on our balance sheet at fair value as of March 31, 2026, 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 those assets listed above that are carried on our balance sheet at fair value as of June 30, 2026, 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.

1 unchanged sentence

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis