Financial Data and Key Metrics Changes - In Q3 2024, the company reported adjusted earnings per share (EPS) of 0.52,withyear−to−dateadjustedEPSreaching1.83, representing an 8% growth over the same period in 2023 [6][25] - Managed assets grew by 14% year-over-year, exceeding 13billion,whiletheoverallportfolioyieldincreasedto8.11.2 billion year-to-date as of September 30, 2024, and have reached 1.7billionasofthecalldate[5][6]BusinessLineDataandKeyMetricsChanges−Thecompanyhasclosed1.2 billion in transactions year-to-date, with expectations to exceed 2billionintotaltransactionclosingsfortheyear[22]−Theportfoliogrowthreflectsanassetrotationinitiative,replacingover400 million of lower-yielding investments with higher-yielding ones [23] Market Data and Key Metrics Changes - The company noted that the renewable natural gas (RNG) market is large and growing, with significant investments from large developers and private equity firms [35] - The company’s pipeline remains diversified, exceeding 5.5billion,withexpectationstoonboardapproximately10newclientsthisyear[19]CompanyStrategyandDevelopmentDirection−ThecompanyaimsforannualadjustedEPSgrowthbetween80.17, attributed to mark-to-market impacts related to power contracts, which are expected to stabilize over time as power prices increase [25][26] - The partnership with KKR is progressing well, with additional transactions closed in the third quarter and early fourth quarter [17] Q&A Session Summary Question: How significant is RNG in the FTN market and can it support declines in solar and wind? - Management indicated that the RNG market is large and growing, with significant investments being made, and it is expected to become a meaningful part of the business alongside wind and solar [35][36] Question: What are the rate hedges and their impact on earnings power? - Management explained that various hedges are in place for floating rate facilities, supporting earnings, and ensuring a duration profile that fits closely with asset cash flows [37][38] Question: How does the company limit exposure to RIN credit volatility? - Management noted that being in a senior debt position with good cash flow coverage helps mitigate RIN risk [43] Question: Updates on the KKR partnership and project funding? - Management confirmed that additional investments have been added to the KKR vehicle, which is operating as designed, with more disclosures expected as the vehicle grows [44][47] Question: Visibility on achieving 2billioninoriginationsfortheyear?−Managementexpressedconfidenceinclosingtheremainingamounttoreachthe2 billion target, citing strong activity in October and early November [49] Question: Clarification on GAAP equity method loss? - Management clarified that the GAAP loss is due to mark-to-market accounting for power contracts, which will reflect higher asset values over time as power prices increase [55]
