Earnings Presentation First Quarter 2025 Forward Looking Statements Other important factors that we think could cause our actual results to differ materially from expected results are summarized below, including the impact of the Inflation Reduction Act ("IRA") and on the U.S., regional and global economies, the U.S. climate solutions market and the broader financial markets. Other factors besides those listed could also adversely affect us. In addition, we cannot assess the impact of each factor on our bus ...

Financial Performance - GAAP net income for Q1 2025 was $56.6 million, down 54% from $123 million in Q1 2024[17] - Adjusted earnings for Q1 2025 were approximately $78 million, a slight decrease from $79 million in Q1 2024[25] - Total revenue for Q1 2025 was $97 million, an 8% decrease from $106 million in Q1 2024[13] - Net income for Q1 2025 was $58,185,000, down 53.3% from $124,548,000 in Q1 2024[42] - Basic earnings per share for Q1 2025 were $0.47, compared to $1.08 in Q1 2024, reflecting a decline of 56.0%[42] - GAAP net income for Q1 2025 was $88 million, down 44.7% from $159 million in Q1 2024[55] - Adjusted earnings for Q1 2025 were $78.067 million, slightly down from $78.906 million in Q1 2024, with adjusted earnings per share at $0.64 compared to $0.68[57] Investment and Asset Management - Adjusted net investment income increased by 12% year-over-year to $72 million in Q1 2025, compared to $64 million in Q1 2024[22] - Managed assets grew 12% year-over-year to $14.5 billion, with a portfolio of approximately $7.1 billion, up 11% year-over-year[8] - The company closed over $700 million in transactions during the quarter, setting a Q1 record, with a pipeline exceeding $5.5 billion[5] - Managed assets reached $14.496 billion as of March 31, 2025, compared to $13.703 billion at the end of 2024, indicating a growth of 5.8%[60] - Equity method investments increased to $3.993 billion as of March 31, 2025, up from $3.612 billion at the end of 2024[60] Cash Flow and Liquidity - Cash flows from operating activities were negative at $(37,121,000) in Q1 2025, compared to positive cash flows of $20,931,000 in Q1 2024[46] - Cash collected in Q1 2025 was $26 million, an increase of 62.5% from $16 million in Q1 2024[55] - Cash available for reinvestment as of March 31, 2025, was $717,806,000, a decrease from $(11,702,000) in the previous quarter[64] - Cash collected from the portfolio for the three months ended March 31, 2025, was $111,249,000, compared to $208,907,000 for the same period in 2024[66] - Cash collected from the sale of assets for the year ended December 31, 2024, was $325,051,000, with $21,665,000 collected in the three months ended March 31, 2025[66] Dividends and Shareholder Returns - A quarterly dividend of $0.42 per share was declared, payable on July 11, 2025[31] - Dividends paid for the three months ended March 31, 2025, were $(50,397,000), compared to $(45,093,000) for the same period in 2024[64] Debt and Financial Ratios - The debt-to-equity ratio as of March 31, 2025, was 1.9, within the target range of 1.5 to 2.0[26] - Total assets increased to $7,475,961,000 as of March 31, 2025, up from $7,080,245,000 at the end of 2024, representing a growth of 5.6%[44] - Total liabilities rose to $5,005,217,000 as of March 31, 2025, compared to $4,675,170,000 at the end of 2024, an increase of 7.0%[44] Risk and Provisions - The company reported a provision for loss on receivables of $3,812,000 in Q1 2025, up from $2,022,000 in Q1 2024, indicating increased risk in receivables[42] - The company made equity method investments totaling $(247,714,000) in Q1 2025, compared to $(127,422,000) in Q1 2024, indicating a significant increase in investment activity[46]

Core Viewpoint - HA Sustainable Infrastructure Capital (HASI) has experienced a significant decline of 20.3% over the past four weeks, but it is now in oversold territory, indicating a potential for a trend reversal as analysts expect better earnings than previously predicted [1]. Group 1: Stock Performance and Technical Indicators - The stock's Relative Strength Index (RSI) reading is at 21.81, suggesting that the heavy selling pressure may be exhausting, which could lead to a rebound towards the previous equilibrium of supply and demand [5]. - A stock is generally considered oversold when its RSI falls below 30, indicating a potential entry opportunity for investors [2]. Group 2: Earnings Estimates and Analyst Consensus - There has been a consensus among sell-side analysts to raise earnings estimates for HASI, with a 0.1% increase in the consensus EPS estimate over the last 30 days, which typically correlates with price appreciation [7]. - HASI holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the stock's potential for a turnaround [8].

Core Viewpoint - HA Sustainable Infrastructure Capital (HASI) has received a Zacks Rank 2 (Buy) upgrade due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is based on the changing earnings picture, specifically tracking the Zacks Consensus Estimate for EPS from sell-side analysts for the current and following years [2]. - A company's future earnings potential, reflected in earnings estimate revisions, is strongly correlated with near-term stock price movements [5]. Impact of Institutional Investors - Institutional investors utilize earnings estimates to determine the fair value of a company's shares, leading to buying or selling actions that influence stock prices [5]. Business Improvement Indicators - The rising earnings estimates for HA Sustainable Infrastructure Capital indicate an improvement in the company's underlying business, which is expected to positively affect its stock price [6]. Importance of Earnings Estimate Revisions - Empirical research shows a strong correlation between earnings estimate revisions and near-term stock movements, making tracking these revisions beneficial for investment decisions [7]. Zacks Rank System Performance - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks averaging an annual return of +25% since 1988 [8]. - The upgrade of HA Sustainable Infrastructure Capital to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [11]. Earnings Estimate for HA Sustainable Infrastructure Capital - For the fiscal year ending December 2025, HA Sustainable Infrastructure Capital is expected to earn $2.66 per share, reflecting a year-over-year change of 8.6%, with a 1.1% increase in the Zacks Consensus Estimate over the past three months [9].

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Climate Commitment and Investments - The company established CarbonCount Holdings 1 LLC to jointly invest $2 billion in eligible climate-positive projects with KKR[51]. - The company is committed to achieving net-zero carbon emissions by 2050, with established targets under the Science Based Targets Initiative[69]. - The company maintains a commitment to providing capital for climate solutions, indicating a long-term growth strategy[268]. - The company entered into a strategic partnership with KKR, committing to invest $1 billion in climate solutions projects over an 18-month period[340]. - The company’s financing strategy includes the use of green bonds, which meet environmental eligibility criteria[51]. Financial Performance - Total revenue rose to $383.6 million in 2024, a 20% increase from $319.9 million in 2023[299]. - Net income increased by approximately $52.9 million, reaching $203.6 million in 2024, a 35% rise compared to $150.8 million in 2023[299]. - Interest income increased to $263.8 million in 2024, up 27% from $207.8 million in 2023[299]. - Income from equity method investments rose to $247.9 million in 2024, a 76% increase from $141 million in 2023[299]. - Adjusted earnings for 2024 were $290,636,000, or $2.45 per share, compared to $232,248,000, or $2.23 per share in 2023, reflecting a 25% increase in adjusted earnings year-over-year[312]. Portfolio and Asset Management - The company completed approximately $2.3 billion of transactions during both 2024 and 2023, with a Portfolio totaling approximately $6.6 billion as of December 31, 2024, up from $6.2 billion in 2023[291]. - The Portfolio included approximately $3.1 billion of Behind-the-Meter (BTM) assets, $2.6 billion of Grid-Connected (GC) assets, and $0.9 billion of Front-of-the-Neter (FTN) assets, with over 550 transactions averaging $11 million each[292]. - Approximately 52% of the Portfolio consisted of unconsolidated equity investments in renewable energy projects, while 46% consisted of commercial and government receivables[292]. - The company recognized equity method investments of $3,612,000,000 in 2024, an increase from $2,966,000,000 in 2023, representing a growth of about 22%[319]. - The company evaluates its Portfolio for potential impairments on a quarterly basis, impacting net income if impairment charges are deemed necessary[288]. Employee Engagement and Diversity - The company employs 158 people as of December 31, 2024, with plans to hire additional professionals to support business strategy[65]. - The board consists of 40% women and 20% individuals from underrepresented ethnicities, promoting diversity[72]. - The average tenure of employees was approximately 4.5 years, with a voluntary employee turnover rate of 5% as of December 31, 2024[331]. - The company emphasizes employee engagement and development, with a focus on diverse perspectives and fair compensation[57]. Risk Management - The company manages credit risk through thorough due diligence, strong structural protections, and active asset management, although exposure to credit risks may increase during economic downturns[276]. - Interest rate risk is influenced by various factors, including governmental policies and economic conditions, affecting new asset originations and borrowings[277]. - The company is exposed to commodity price volatility, particularly in renewable energy projects that sell power on a wholesale basis[278]. - Government policies and incentives play a crucial role in the economic feasibility of renewable energy projects, and any adverse changes could negatively impact operating results[282]. Capital Structure and Liquidity - The debt to equity ratio was approximately 1.8 to 1 as of December 31, 2024, which is below the Board-approved leverage limit of up to 2.5 to 1[345]. - The company had total liquidity of $1.518 billion as of December 31, 2024, including $130 million in unrestricted cash and $1.241 billion in unused capacity under its unsecured revolving credit facility[337]. - The company increased the available capacity under its unsecured revolving credit facility to $1.35 billion and extended its maturity to April 2028[338]. - Cash available for reinvestment in 2024 was $717,806,000, significantly higher than $106,122,000 in 2023, showing a substantial increase[324]. Market Conditions and Economic Factors - The Federal Reserve increased the federal funds rate 11 times in 2022 and 2023, totaling a 5.25% increase, followed by three rate cuts in 2024, resulting in a 1.00% decrease[266]. - Inflationary pressures have not materially impacted the company's business to date[266]. - The average annual Henry Hub natural gas price for 2024 was $2.21/MMBtu, a decrease of 16% from 2023 and 68% from 2022, marking the largest two-year decline on record[267]. - The company expects the average price of natural gas to rise to $3.10 per MMBtu in 2025 and $4.00 per MMBtu in 2026[267]. - The company has experienced increased competition in the alternative investment and climate solutions market, impacting its operational strategies[81].

Financial Data and Key Metrics Changes - In 2024, the company achieved adjusted earnings per share (EPS) growth of 10%, reaching $2.45, and adjusted net investment income (NII) grew 22% to a new high of $264 million [46][47][48] - The company maintained robust margins despite interest rate fluctuations, with a weighted average yield exceeding 10.5% in 2024, and portfolio yield increased to 8.3% from 7.9% year-over-year [51][52] Business Line Data and Key Metrics Changes - The company closed $2.3 billion of new transactions in 2024, including a record $1.1 billion in Q4, demonstrating strong activity across its business lines [48][49] - The managed assets totaled $13.7 billion, increasing 11% year-over-year, with a portfolio of $6.6 billion, which grew 7% from 2023 [50][54] Market Data and Key Metrics Changes - The demand for power in the U.S. is forecasted to double over the next 25 years, driven by factors such as data centers, domestic manufacturing, and electrification [24][25] - Forward price curves in ERCOT and PJM have doubled over the last five years, indicating rising energy prices and a strong market for renewables [25][26] Company Strategy and Development Direction - The company is extending its adjusted EPS guidance of 8% to 10% annual growth through 2027, reflecting confidence in its business model and market fundamentals [12][58] - The investment strategy will focus on continuity, adaptability, and exploring new growth paths, including international opportunities and new asset classes [34][39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model amid policy uncertainties, emphasizing the importance of clean energy projects in addressing climate-related challenges [16][17][22] - The company anticipates continued growth in investment opportunities, particularly in renewables, as clients remain committed to accelerating projects despite policy changes [30][31] Other Important Information - The company announced an increase in its dividend to $0.42 per share, targeting a payout ratio of 50% by 2030, with an interim target of 55% to 60% by the end of the guidance period [13] - The company has initiated a commercial paper issuance program to generate savings on short-term borrowings [55] Q&A Session Summary Question: Timing of new opportunities in the portfolio - Management indicated that some opportunities are tangible and near-term, while others may take longer to materialize, with pricing adjusted based on risk [63][64] Question: Expansion into new markets and its impact on capital raising - Management clarified that the funding strategy for new asset classes will remain consistent with historical practices, not resulting in more or less capital raising [67] Question: Discussions regarding future co-investment partnerships - Management stated that while a co-investment strategy will be a permanent part of the capital structure, there are no advanced discussions on new partnerships at this time [71] Question: Insights on gain on sale levels and future EPS growth - Management noted that while 2024 had an outsized gain related to asset rotation, client-related gain on sale will remain consistent, and other revenue streams are expected to grow [104] Question: International opportunities and their size relative to the U.S. pipeline - Management emphasized that international opportunities will primarily be pursued with existing clients, maintaining a focus on the U.S. market in the near term [150][151]

For the quarter ended December 2024, HA Sustainable Infrastructure Capital (HASI) reported revenue of $37.74 million, up 3% over the same period last year. EPS came in at $0.62, compared to $0.53 in the year-ago quarter.The reported revenue represents a surprise of +45.51% over the Zacks Consensus Estimate of $25.93 million. With the consensus EPS estimate being $0.58, the EPS surprise was +6.90%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they ...

Earnings Presentation Fourth Quarter and Full Year 2024 Forward Looking Statements Some of the information contained herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used herein, words such as "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may," "target," or similar expressions, are intended to identify such forward-looking statem ...