Portfolio Overview - As of September 30, 2025, the company's Portfolio totaled approximately $7.5 billion, including $3.7 billion in Behind-the-Meter (BTM) assets, $2.8 billion in Grid-Connected (GC) assets, and $1.0 billion in Fuels, Transport, and Nature (FTN) assets[208]. - The company's pipeline of potential new opportunities as of September 30, 2025, consisted of more than $6.0 billion, with approximately 39% related to BTM assets, 38% to GC assets, and 18% to FTN assets[203]. - Approximately 53% of the Portfolio consisted of equity method investments in renewable energy-related projects, while 37% consisted of fixed-rate receivables and debt securities[208]. - The average size of transactions in the Portfolio was approximately $11 million, with a weighted average remaining life of about 16 years[208]. - The GAAP-based Portfolio increased to $7.542 billion as of September 30, 2025, compared to $6.594 billion as of December 31, 2024, reflecting a growth of 14.4%[235]. Financial Performance - The company completed approximately $649 million and $1.5 billion of transactions during the three and nine months ended September 30, 2025, respectively, compared to approximately $396 million and $1.2 billion during the same periods in 2024[200]. - Total revenue for Q3 2025 reached $103.064 million, a 26% increase from $81.965 million in Q3 2024[215]. - Net income for Q3 2025 was $84.906 million, a significant increase of $104.082 million compared to a net loss of $19.176 million in Q3 2024[216]. - For the nine months ended September 30, 2025, total revenue was $285.690 million, a slight increase of 1% from $282.298 million in the same period of 2024[217]. - Net income for the nine months ended September 30, 2025, was $242.886 million, an increase of $110.570 million or 84% compared to $132.316 million in 2024[217]. Income and Expenses - Interest and rental income for Q3 2025 increased to $68.976 million, up 8% from $64.151 million in Q3 2024[215]. - Interest expense rose to $71.481 million in Q3 2025, reflecting a 20% increase from $59.401 million in Q3 2024[215]. - The average cost of debt for Q3 2025 was 5.9%, compared to 5.6% in Q3 2024[215]. - Adjusted Earnings for Q3 2025 were $102.5 million, or $0.80 per share, up from $62.6 million, or $0.52 per share in Q3 2024[228]. - The company reported a return of capital of $25 million in Q3 2025, compared to $6 million in Q3 2024[226]. Cash Flow and Liquidity - Cash collected in Q3 2025 was $93 million, significantly higher than $32 million in Q3 2024[226]. - The total cash collected for the nine months ended September 30, 2025, was $187 million, compared to $67 million in the same period of 2024[226]. - Total liquidity available as of September 30, 2025, was $1.136 billion, consisting of $302 million in unrestricted cash and $804 million in unused capacity under the unsecured revolving credit facility[250]. - Cash provided by financing activities for the nine months ended September 30, 2025, was $759 million, significantly higher than the $(89) million reported for the same period in 2024[271]. - Cash used in investing activities decreased by $565 million compared to the same period in 2024, with increased investments in equity method investments and receivables[270]. Debt and Financing - The company has a strategic partnership with KKR for joint investments in eligible projects, enhancing its investment capabilities[202]. - The company entered into a delayed-draw term loan facility of up to $250 million, available from March 16, 2026, to June 15, 2026, with a maturity date of June 15, 2028[252]. - As of September 30, 2025, the company's long-term recourse debt obligations totaled $5.189 billion, with a debt-to-equity ratio of approximately 1.9 to 1, below the board-approved limit of 2.5 to 1[260][261]. - The percentage of fixed-rate debt was approximately 88% as of September 30, 2025, within the targeted range of 75% to 100%[261]. - The company plans to continue issuing debt, which may be secured or unsecured, and may also issue additional equity to finance its business[258]. Risk Management - The company anticipates that its primary market risks will relate to credit quality, market interest rates, liquidity of assets, and commodity prices[278]. - The company actively manages credit risk through thorough due diligence, strong structural protections, and continuous portfolio monitoring[290]. - The company employs various interest rate management techniques to mitigate risks, including matching debt maturities with asset maturities and using interest rate swaps[282]. - Environmental risks are integral to the company's investment parameters, and ongoing asset management includes monitoring these risks[290]. - Changes in discount rates will impact the fair value of certain assets recorded at fair value in the financial statements[285].
Hannon Armstrong Sustainable Infrastructure Capital(HASI) - 2025 Q3 - Quarterly Report