Hannon Armstrong Sustainable Infrastructure Capital(HASI) - 2025 Q1 - Quarterly Report

Asset Management - The company managed assets totaling approximately $14.5 billion as of March 31, 2025, with a portfolio valued at approximately$7.1 billion[179]. - The portfolio consisted of approximately $3.4 billion in Behind-the-Meter (BTM) assets,$2.7 billion in Grid-Connected (GC) assets, and $1.0 billion in Fuels, Transport, and Nature (FTN) assets[188]. - The company's pipeline of potential new opportunities as of March 31, 2025, was valued at more than$5.5 billion, with approximately 49% related to BTM assets and 30% related to GC assets[183]. - Approximately 54% of the portfolio consisted of unconsolidated equity investments in renewable energy-related projects[188]. - Equity method investments increased to $3.993 billion as of March 31, 2025, from$3.612 billion at the end of 2024, reflecting a growth of 10.6%[210]. Financial Performance - Total revenue for the three months ended March 31, 2025, was $96.941 million, a decrease of$8.875 million or 8% compared to $105.816 million in the same period of 2024[194]. - Net income for the three months ended March 31, 2025, was$58.185 million, a decrease of $66.363 million or 53$124.548 million in 2024[194]. - Adjusted earnings for the three months ended March 31, 2025, were $78.067 million, slightly down from$78.906 million in 2024[204]. - Income from equity method investments decreased by $70.561 million or 45$87.989 million, primarily due to lower mark-to-market income[194]. - GAAP-based net investment income for Q1 2025 was $1.800 million, significantly lower than$8.666 million in Q1 2024, marking an 79.2% decrease[208]. Income and Expenses - Interest income from receivables for the three months ended March 31, 2025, was $66 million, with an average interest rate of 8.7$2.298 million or 3% to $66.394 million, while rental income dropped significantly by$1.763 million or 96% to $83 thousand[194]. - Total expenses increased by$9.224 million or 10% to $102.847 million, driven by a$4 million increase in compensation and benefits expenses[194]. - The company recorded a provision for loss on receivables and securitization assets of $3.812 million, an increase of$1.790 million or 89% compared to $2.022 million in 2024[194]. Cash Flow and Liquidity - Cash available for reinvestment was$106.122 million for the TTM ended March 31, 2025, a decrease from $717.806 million for the TTM ended March 31, 2024[214]. - Total cash collected from the portfolio for the year ended December 31, 2024, was$891.250 million, compared to $442.322 million for the year ended December 31, 2023[216]. - Principal collections from receivables for Q1 2025 were$40.455 million, a decrease from $141.594 million in Q1 2024[213]. - Adjusted cash from operations plus other portfolio collections for Q1 2025 was$265.908 million, down from $910.075 million in Q1 2024[216]. - Total liquidity as of March 31, 2025, is$1.302 billion, consisting of $67 million in unrestricted cash and$1.235 billion in unused credit capacity[224]. Debt and Financing - The company has $4.5 billion of debt with fixed rates or hedged floating rate debt, and$218 million of debt with variable interest rates as of March 31, 2025[259]. - The debt to equity ratio was approximately 1.9 to 1 as of March 31, 2025, below the board-approved leverage limit of 2.5 to 1[235]. - Cash provided by financing activities for the three months ended March 31, 2025, was $294 million, significantly higher than$51 million in the same period of 2024[246]. - The company plans to continue issuing debt and equity to finance its business, utilizing both on-balance sheet and off-balance sheet securitizations[232]. - The company increased the available capacity under its unsecured revolving credit facility to $1.55 billion during the three months ended March 31, 2025[225]. Risk Management - The company employs a risk rating system to evaluate projects, estimating the probability of default and recovery rates based on obligors' credit ratings[255]. - The company is exposed to credit risk from various projects, including those not backed by government guarantees, such as financing for universities and hospitals[254]. - Interest rate risk is influenced by factors such as governmental policies and economic conditions, impacting the company's ability to secure financing[256]. - The company actively manages interest rate risks through fixed rate financing structures and financial instruments like interest rate swaps[257]. - Environmental risks are integral to the company's investment parameters, with ongoing monitoring of these risks post-transaction[265].