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What changed in HA Sustainable Infrastructure Capital, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of HA Sustainable Infrastructure Capital, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+458 added−463 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-14)

Top changes in HA Sustainable Infrastructure Capital, Inc.'s 2025 10-K

458 paragraphs added · 463 removed · 368 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

65 edited+14 added−37 removed44 unchanged
Biggest changeWe periodically provide other services, including arranging financings that are held on the balance sheets of other investors and advising various companies with respect to structuring investments. Refer to Item 7. Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Liquidity and Capital Resources, for additional discussion on our financings and our ratios and Item 8.
Biggest changeManagement’s Discussion and Analysis of Financial Conditions and Results of Operations—Liquidity and Capital Resources”, for additional discussion on our financings and our ratios and “Item 8. Financial Statements and Supplementary Data”, Notes 5, 7 and 8 to our audited financial statements for further information on the types and amounts of our financing activities.
HASI’s investment thesis is that we can generate superior risk-adjusted returns by investing in sustainable infrastructure assets based on four key premises: • With growth in data centers, domestic manufacturing, and the electrification of transportation, industry, and other sectors of the economy expected to drive U.S. power demand higher, we expect clean energy assets that provide - 8 - lower cost and faster speed-to-market solutions that supply that demand will provide a growing number of opportunities to invest at attractive rates of return; • With solar and wind energy, on an unsubsidized basis, representing the lowest cost source of electricity, according to Lazard Inc.’s “Levelized Cost of Energy” reports, given zero feedstock cost and no direct exposure to the volatility of fossil fuel commodity prices, clean energy should not only be in high demand but generate superior economic returns; • With scientific consensus that climate change is linked to human activities and resulting in a growing frequency and magnitude of extreme weather events and environmental disasters causing billions of dollars of damages in the United States every year, assets that reduce or avoid carbon emissions can not only reduce potential regulatory and social costs but also substantial financial costs, while also providing an embedded option that may increase in value if regulatory authorities were to set a price on carbon emissions as has been done in other countries; and • With growing demand for energy infrastructure assets that improve the reliability of the electric grid and enhance national security, assets that improve the resilience of the grid such as distributed energy resources, and that do not depend on fuel imported from foreign sources, will provide greater value and potentially superior rates of return..
HASI’s investment thesis is that we can generate superior risk-adjusted returns by investing in sustainable infrastructure assets based on four key premises: • With growth in data centers, domestic manufacturing, and the electrification of transportation, industry, and other sectors of the economy expected to drive U.S. power demand higher, we expect clean energy assets that provide lower cost and faster speed-to-market solutions that supply that demand will provide a growing number of opportunities to invest at attractive rates of return; - 8 - • With solar and wind energy, on an unsubsidized basis, representing the lowest cost source of electricity, according to Lazard Inc.’s “Levelized Cost of Energy” reports, given zero feedstock cost and no direct exposure to the volatility of fossil fuel commodity prices, clean energy should not only be in high demand but generate superior economic returns; • With scientific consensus that climate change is linked to human activities and resulting in a growing frequency and magnitude of extreme weather events and environmental disasters causing billions of dollars of damages in the United States every year, assets that reduce or avoid carbon emissions can not only reduce potential regulatory and social costs but also substantial financial costs, while also providing an embedded option that may increase in value if regulatory authorities were to set a price on carbon emissions as has been done in other countries; and • With growing demand for energy infrastructure assets that improve the reliability of the electric grid and enhance national security, assets that improve the resilience of the grid such as distributed energy resources, and that do not depend on fuel imported from foreign sources, will provide greater value and potentially superior rates of return..
We have adopted a Statement of Corporate Policy Regarding Equity Transactions that governs the process to be followed in the purchase or sale of our securities by any of our directors, officers, employees and consultants and prohibits any such persons from buying or selling our securities on the basis of material nonpublic information, and also prohibits our directors and officers from hedging equity securities of the Company, holding such securities in a margin account or pledging such securities as collateral for a loan.
We have adopted a Statement of Corporate Policy Regarding Securities Transactions that governs the process to be followed in the purchase or sale of our securities by any of our directors, officers, employees and consultants and prohibits any such persons from buying or selling our securities on the basis of material nonpublic information, and also prohibits our directors and officers from hedging equity securities of the Company, holding such securities in a margin account or pledging such securities as collateral for a loan.
In addition, we have implemented whistleblowing procedures designed to facilitate the report of accounting and auditing matters as well as Code of Conduct matters (the “Whistleblower Policy”) that sets forth procedures by which any Covered Persons (as defined in the Whistleblower Policy) may report, on a confidential basis, concerns regarding, among other things, any questionable or unethical accounting, internal accounting controls or auditing matters with our Audit Committee as well as any potential Code - 12 - of Conduct or ethics violations with our Nominating, Governance and Corporate Responsibility Committee or our Chief Legal Officer.
In addition, we have implemented whistleblowing procedures designed to facilitate the report of accounting and auditing matters as well as Code of Conduct matters (the “Whistleblower Policy”) that sets forth procedures by which any Covered Persons (as defined in the Whistleblower Policy) may report, on a confidential basis, concerns regarding, among other things, any questionable or unethical accounting, internal accounting controls or auditing matters with our Audit Committee as well as any potential Code of Conduct or ethics violations with our Nominating, Governance and Corporate Responsibility Committee or our Chief Legal Officer.
We believe that our long history of climate solutions investing, the experience, expertise and relationships of our management team, the anticipated credit strength of the obligors or investees involved in our investments and the size and growth potential of our market, position us well to capitalize on our strategy. - 9 - Refer to Item 7.
We believe that our long history of climate solutions investing, the experience, expertise and relationships of our management team, the anticipated credit strength of the obligors or investees involved in our investments and the size and growth potential of our market, position us well to capitalize on our strategy. Refer to Item 7.
In order to foster the highest standards of ethics and conduct in all business relationships, we have adopted a Code of Business Conduct and Ethics policy (the “Code of Conduct”). This policy covers a wide range of business practices and procedures and applies to our officers, directors, employees, agents, representatives, and consultants.
In order to foster the highest standards of ethics and conduct in all business relationships, we have adopted a Code of Business Conduct and Ethics policy (the “Code of Conduct”). This policy covers a wide range of business practices and - 12 - procedures and applies to our officers, directors, employees, agents, representatives, and consultants.
We operate our business in a manner that permits us to maintain our exemption from registration as an investment company under the 1940 Act. - 7 - MARKET OVERVIEW The market for sustainable infrastructure assets remains strong and continues to grow, supported by three major trends impacting the U.S. economy and energy markets, which we expect will continued for several years.
We operate our business in a manner that permits us to maintain our exemption from registration as an investment company under the 1940 Act. - 7 - MARKET OVERVIEW The market for sustainable infrastructure assets remains strong and continues to grow, supported by four major trends impacting the U.S. economy and energy markets, which we expect will continued for several years.
Our investment strategy is focused on three end markets: • Behind-the-Meter (“BTM”): distributed renewable energy projects which reduce energy cost and/or usage through residential, commercial & industrial, and community solar power and energy storage deployments, as well as energy efficiency improvements such as heating, ventilation, and air conditioning systems (HVAC), lighting, energy controls, roofs, windows, building shells, and/or combined heat and power systems.
Our investment strategy is focused on three end markets: • Behind-the-Meter (“BTM”) : distributed renewable energy projects which reduce energy cost and/or usage and increase resiliency through residential, commercial & industrial, and community solar power and energy storage deployments, as well as energy efficiency improvements such as heating, ventilation, and air conditioning systems (HVAC), lighting, energy controls, roofs, windows, building shells, and/or combined heat and power systems.
We endeavor to select qualified individuals from a diverse pool of candidates derived from broad outreach efforts when we are recruiting. We are committed to the development and/or promotion of highly-qualified personnel from all demographics including women, people of color and other recognized groups for management and Board positions.
We endeavor to select qualified individuals from a diverse pool of candidates derived from broad outreach efforts when we are recruiting. We are committed to the development and/or promotion of highly-qualified personnel from all demographics including women, people of color and other underrecognized groups for management and Board positions.
Notable features of our corporate governance structure include the following: • our Corporate Governance Guidelines provide for a majority vote policy for the election of directors pursuant to which any nominee who receives a greater number of votes “withheld” from his or her election than votes “for” such election shall promptly tender his or her resignation to our Board for their consideration to accept or reject such resignation; • our Board is not staggered, with each of our directors subject to re-election annually; • our Board has determined that eight of our ten directors are independent for purposes of the New York Stock Exchange (“NYSE”) corporate governance listing standards and Rule 10A-3 under the Exchange Act; • we have a lead independent director of our Board that convenes and chairs executive sessions of the independent directors to discuss certain matters without management or the chairman present; • we have separated the executive chairman and chief executive officer roles; • three of our directors qualify as an “audit committee financial expert” as defined by the Securities and Exchange Commission (the “SEC”); • four of our directors (including our lead independent director) are women and two of our directors are people of underrepresented ethnicity constituting 40% and 20% respectively, of our Board in furtherance of our board diversity policy; • a target retirement age of 75 has been established for our directors; • we have an active stockholder outreach program, including providing stockholders the right to vote on an advisory basis on the fairness of the remuneration of executives; • our Board members and named executive officers are required to maintain certain levels of stock ownership in our company ranging between three and six times their base salary or retainer, depending on position; • we have a Clawback Policy that provides for the possible recoupment of performance or incentive-based compensation in the event of an accounting restatement due to material noncompliance by us with any financial reporting requirements under the securities laws (other than due to a change in applicable accounting methods, rules or interpretations); and • stockholders have the ability to amend the Company’s bylaws by the affirmative vote of the holders of a majority of the outstanding shares of our common stock pursuant to a binding proposal submitted by a stockholder.
Notable features of our corporate governance structure include the following: • our Corporate Governance Guidelines provide for a majority vote policy for the election of directors pursuant to which any nominee who receives a greater number of votes “withheld” from his or her election than votes “for” such election shall promptly tender his or her resignation to our Board for their consideration to accept or reject such resignation; • our Board is not staggered, with each of our directors subject to re-election annually; • our Board has determined that ten of our twelve directors are independent for purposes of the New York Stock Exchange (“NYSE”) corporate governance listing standards and Rule 10A-3 under the Exchange Act; • we have a lead independent director of our Board that convenes and chairs executive sessions of the independent directors to discuss certain matters without management or the chairman present; • we have separated the chairperson and chief executive officer roles; • four of our directors qualify as an “audit committee financial expert” as defined by the Securities and Exchange Commission (the “SEC”); • five of our directors (including our lead independent director) are women and two of our directors are people of underrecognized ethnicity constituting 42% and 17%, respectively, of our Board in furtherance of our board diversity policy; • a target retirement age of 75 has been established for our directors; • we have an active stockholder outreach program, including providing stockholders the right to vote on an advisory basis on the fairness of the remuneration of executives; • our Board members and named executive officers are required to maintain certain levels of stock ownership in our Company ranging between three and six times their base salary or retainer, depending on position; • we have a Clawback Policy that provides for the possible recoupment of performance or incentive-based compensation in the event of an accounting restatement due to material noncompliance by us with any financial reporting requirements under the securities laws (other than due to a change in applicable accounting methods, rules or interpretations); and • stockholders have the ability to amend the Company’s bylaws by the affirmative vote of the holders of a majority of the outstanding shares of our common stock pursuant to a binding proposal submitted by a stockholder.
For FTN assets, the off-takers may be oil and gas refiners, industrial companies, and vertically integrated electric utilities. One of the defining criteria of our investment strategy is that all HASI investments are neutral to negative on incremental carbon emissions or have some other tangible environmental benefit such as reducing water consumption or increasing resilience to extreme weather events.
For FTN assets, the offtakers may be oil and gas refiners, industrial companies, and vertically integrated electric utilities. One of the defining criteria of our investment strategy is that all HASI investments are neutral to negative on incremental carbon emissions or have some other tangible environmental benefit such as reducing water consumption or increasing resilience to extreme weather events.
We know that the effects of climate change are already disproportionately impacting disadvantaged communities, and these adverse outcomes will be exacerbated if we do not eliminate harmful g reenhouse gas emissions. Equally so, we acknowledge the legacy of discriminatory policies in creating and perpetuating this imbalance. We believe that the energy transition presents an opportunity to address these disparities. .
We know that the effects of climate change are already disproportionately impacting disadvantaged communities, and these adverse outcomes will be exacerbated if we do not eliminate harmful greenhouse gas emissions. Equally so, we acknowledge the legacy of discriminatory policies in creating and perpetuating this imbalance. We believe that the energy transition presents an opportunity to address these disparities.
The off-taker or counterparty for BTM assets may be the building owner or occupant, and our investment may be secured by the installed improvements or other real estate rights; • Grid-Connected (“GC”) : utility-scale renewable energy projects that deploy cleaner energy sources, such as solar, solar-plus-storage, and wind, to generate cleaner, lower cost energy.
The offtaker or counterparty for BTM assets may be the building owner or occupant, and our investment may be secured by the installed improvements or other real estate rights; • Grid-Connected (“GC”) : utility-scale renewable energy projects that deploy cleaner energy sources, such as solar, solar-plus-storage, and wind, to generate cleaner, lower cost energy.
This strategy has enabled us to generate attractive risk-adjusted returns and provide stockholders with diversified exposure to the energy transition. We are internally managed by an executive team that has extensive relevant industry knowledge and experience, and a team of over 150 full-time investment, operating, and technical professionals.
This strategy has enabled us to generate attractive risk-adjusted returns and provide stockholders with diversified exposure to the energy transition. We are internally managed by an executive team that has extensive relevant industry knowledge and experience, and oversees a team of over 170 full-time investment, operating, and technical professionals.
Management operates and evaluates the business with a particular focus on growing Adjusted earnings per share, as well as Adjusted Net Investment Income, which represents interest income and rental income revenue plus equity method investments earnings (a non-GAAP adjustment to our income from equity method investments that we believe is a useful indicator of the underlying economics of our investments) less interest expense and excluding the amortization of real estate intangibles and non-cash equity compensation expense.
Management operates and evaluates the business with a particular focus on growing Adjusted Earnings per share, as well as Adjusted Recurring Net Investment Income, which represents interest and rental income and management fee and retained interest income plus adjusted income from equity method investments (a non-GAAP adjustment to our income from equity method investments that we believe is a useful indicator of the underlying economics of our investments), less interest expense and excluding the amortization of real estate intangibles and non-cash equity compensation expense.
The off-takers or counterparties for GC assets may be utility, electric users, or participants in the wholesale electric power markets who have entered into contractual commitments, such as power purchase agreements (“PPAs”), to purchase power produced by a renewable energy project at a specified price with potential price escalators for a portion of the project’s estimated life; and • Fuels, Transport, and Nature (“FTN”): a range of infrastructure assets that are designed to reduce emissions and/or provide environmental benefits in projects beyond the power grid, such as transportation and fuels, including renewable natural gas (RNG) plants, transportation fleet enhancements, and ecological restoration projects, among others.
The offtakers or counterparties for GC assets may be utilities, electricity users, or participants in the wholesale electric power markets who have entered into contractual commitments, such as power purchase agreements (“PPAs”), to purchase power produced by a renewable energy project at a specified price with potential price escalators for a portion of the project’s estimated life; and • Fuels, Transport, and Nature (“FTN”): a range of infrastructure assets that are designed to reduce emissions and/or provide environmental benefits in projects beyond the power grid, such as transportation and fuels, including renewable natural gas (RNG) plants, transportation fleet enhancements, and ecological restoration projects, among others.
In 2017, we believe we were the first U.S-based public company to commit to the Climate Disclosure Standards Board led initiative on implementing the recommendations of the Financial Stability Board’s Task Force for Climate-related Financial Disclosures (“TCFD”).
In 2017, we believe we were the first U.S-based public company to commit to the Climate Disclosure Standards Board’s voluntary initiative on implementing the recommendations of the Financial Stability Board’s Task Force for Climate-related Financial Disclosures (“TCFD”).
As of December 31, 2024, our managed assets totaled approximately $13.7 billion, and generally fall into one of three categories: (1) our Portfolio, which primarily consists of receivables and equity method investments we have retained on our balance sheet, (2) the portion of assets in our co-investment structures that are not included in our Portfolio but held by our investment partners in these structures, and (3) assets we have securitized by transferring all or a portion of the economics of the transaction, typically using securitization trusts, to institutional investors in exchange for cash and, in certain cases, residual interests in the trusts and ongoing fees.
As of December 31, 2025, our managed assets totaled approximately $16.1 billion, and generally fall into one of three categories: (1) our Portfolio, which primarily consists of receivables and equity method investments we have retained on our balance sheet, (2) fee-generating assets in our co-investment structures that are not included in our Portfolio but held by our investment partners in these structures, and (3) assets we have securitized by transferring all or a portion of the economics of the transaction, typically using securitization trusts, to institutional investors in exchange for cash and, in certain cases, residual interests in the trusts and ongoing fees.
A further description of our financing activities can be found herein in the section titled “Financing Strategy”. In addition, we are committed to leadership in transparent disclosure on sustainability, impact, and governance matters.
A further description of our financing activities can be found herein in the section titled “Financing Strategy.” In addition, we are committed to leadership in transparent disclosure on sustainability, impact, and governance matters.
We compensate our employees according to our fair remuneration policies and believe in paying for performance. Therefore, employees typically receive a portion of their compensation in the form of annual bonuses as well as equity grants which are both tied in part to the Company’s financial performance.
We compensate our employees according to our fair remuneration policies and believe in paying for performance. Therefore, employees typically receive a portion of their compensation in the form of annual bonuses as well as equity grants in addition to competitive base salaries, which are both tied in part to the Company’s financial performance.
In addition, we typically secure our investments with collateral that we are confident will support the return of our capital, further lowering the risk of our investments. We make our investments via a variety of structures, including: • equity investments in either preferred or common structures in unconsolidated entities; • commercial and government receivables or securities, and • real estate.
In addition, we typically secure our investments with collateral that we are confident will support the return of our capital, further lowering the risk of our investments. We make our investments via a variety of structures, including equity investments in either preferred or common structures in unconsolidated entities, receivables and securities.
Our investments take many forms, including equity, joint ventures, real estate, commercial and government receivables or securities, and other financing transactions.
Our investments take many forms, including equity, joint ventures, real estate, receivables or securities, and other financing transactions.
We fund our investments in climate solutions using a broad range of financing sources including corporate unsecured bonds, convertible bonds, non-recourse or recourse debt from banks and financial institutions, equity, syndications and off-balance sheet securitization structures. We manage our short-term liquidity needs through short-term commercial paper issuances and revolving credit facilities.
We fund our investments in climate solutions using a broad range of financing sources including corporate unsecured bonds, convertible bonds, secured or unsecured debt from banks and financial institutions, equity, syndications and off-balance sheet securitization structures. We manage our short-term liquidity needs through short-term commercial paper issuances and a revolving credit facility.
In particular, we are focused primarily on investments which are: • income-generating sustainable infrastructure assets; • supported by underlying, long-term recurring cash flows; • contracted with creditworthy, incentivized off-takers; • rely upon proven commercial technologies; and • originated by programmatic clients One of the primary metrics we utilize to measure our return on capital is a cash-on-cash internal rate of return over the life of the investment.
In particular, we are focused primarily on investments which are: • income-generating sustainable infrastructure assets; • supported by underlying, long-term recurring cash flows; • contracted with creditworthy, incentivized offtakers; • reliant upon proven commercial technologies; and • originated by programmatic clients One of our primary metrics to measure our return on capital is a cash-on-cash internal rate of return over the life of the investment.
We may adjust the mix and duration of our assets over time in order to allow us to manage various aspects of our Portfolio, including expected risk-adjusted returns, macroeconomic conditions, liquidity, availability of adequate financing for our assets, and our exemption from registration as an investment company under the 1940 Act.
We may adjust the mix and duration of our assets over time in order to allow us to manage various aspects of our Portfolio. Factors considered in managing the Portfolio include expected risk-adjusted returns, macroeconomic conditions, liquidity, availability of adequate financing for our assets, and our exemption from registration as an investment company under the 1940 Act.
In addition, certain of our debt issuances meet the environmental eligibility criteria for green bonds as defined by the International Capital Markets Association’s Green Bond Principles, which we believe makes our debt more attractive for certain investors compared to such offerings that do not qualify under these principles.
In addition, certain of our debt issuances meet the environmental eligibility criteria for green bonds as defined by the International Capital Markets Association’s Green Bond Principles, which we believe makes our debt more attractive for certain investors compared to other offerings that do not qualify under these principles. Refer to “Item 7.
Our equity investments in climate solutions projects are operated by various renewable energy companies or by joint ventures in which we participate. These transactions allow us to participate in the cash flows associated with these projects, typically on a priority basis.
Our equity investments in energy transition and infrastructure projects are operated by various renewable energy companies or by joint ventures in which we participate. These transactions allow us to participate in the cash flows associated with these projects, typically on a priority basis.
Second is the heightened focus on energy prices stemming from the inflation shock experienced between 2022 and 2024, which we believe will support the desire to supply this energy demand growth from an “all of the above” energy strategy that includes a breadth of energy sources, with a specific focus on the lowest cost sources of electricity like solar power.
Second is the heightened focus on energy prices stemming from ongoing inflation experienced since 2022 and the expectation that power prices may continue to rise, which we believe will support the desire to supply this energy demand growth from an “all of the above” energy strategy that includes a breadth of energy sources, with a specific focus on the lowest cost sources of electricity like solar power.
In our off-balance sheet financings, 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. The availability of securitization counterparties has remained high throughout various market cycles due to investor demand for high credit quality, long-term climate-positive investments.
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. The availability of securitization counterparties has remained high throughout various market cycles due to investor demand for high credit quality, long-term climate-positive investments.
In addition to the above environmental reporting initiatives, beginning in 2022, we report our corporate emissions under PCAF, a voluntary global financial industry-led partnership to implement a consistent and transparent disclosure framework to report carbon emissions and avoided emissions resulting from financed assets. We also disclose metrics related to our Human Capital Strategy. Refer to “Item 7.
In addition to the above environmental reporting initiatives, beginning in 2022, we report our corporate emissions under PCAF, a voluntary global financial industry-led partnership to implement a consistent and transparent disclosure framework to report carbon emissions and avoided emissions resulting from financed assets.
We also provide continuous dialogue in between these formal touchpoints. We believe we provide attractive benefits that promote the health of our employees and their families and design compelling job opportunities, aligned with our mission, in an energizing work environment. We also encourage our employees to continue to develop in their careers, including by obtaining advanced degrees or professional certifications.
Managers also engage in frequent dialogue in between these formal touchpoints. We believe we provide attractive benefits that promote the health of our employees and their families and design compelling job opportunities, aligned with our mission, in an energizing work environment. We also encourage our employees to continue to develop in their careers.
C ertain of our debt issuances have been evaluated to determine that they meet the environmental eligibility criteria for green bonds as defined by the International Capital Markets Association’s Green Bond Principles.
C ertain of our debt issuances have been evaluated to determine that they meet the environmental eligibility criteria for green bonds as defined by the International Capital Markets Association’s Green Bond Principles. We also disclose metrics related to our Human Capital Strategy. Refer to “Item 7.
The returns we generate on our investments are generally derived from five primary sources: (1) interest income, (2) income from equity method investments, (3) gains on the sale of assets through securitizations, (4) fee revenue from co-investment vehicles and securitized assets that we manage, and (5) residual income generated by the portion of securitized assets that we have retained.
As of December 31, 2025, we also managed approximately $7.2 billion assets held in unconsolidated securitization trusts. - 6 - The returns we generate on our investments are generally derived from five primary sources: (1) interest income, (2) income from equity method investments, (3) gains on the sale of assets through securitizations, (4) fee revenue from co-investment vehicles and securitized assets that we manage, and (5) residual income generated by the portion of securitized assets that we have retained.
With over $13 billion in managed assets, including a portfolio of $6.6 billion in assets retained on our balance sheet, our investments span a broad range of sustainable infrastructure assets, which in aggregate represent more than 7 gigawatts (GW) of solar power capacity (including 3.5 GW utility-scale) and more than 4 GW of onshore wind power capacity–which together generate 20 terawatt-hours (TWh) of electricity annually–as well as battery storage capacity of more than 1 GW, RNG facilities with the capacity to produce more than 40 million diesel gallons-equivalent, more than 1,000 commercial fleet vehicles, and more than 375 energy efficiency projects.
With over $16 billion in Managed Assets, including a Portfolio of $7.6 billion in assets retained on our balance sheet, our investments span a broad range of sustainable infrastructure assets, which in aggregate represent more than 8 gigawatts (GW) of solar power capacity (including more than 4 GW utility-scale) and more than 7 GW of onshore wind power capacity as well as battery storage capacity of more than 2 GWh, RNG facilities with the capacity to produce more than 57 million diesel gallons-equivalent, more than 1,200 commercial fleet vehicles, and more than 380 energy efficiency projects.
Partnering with these clients, we are able to earn attractive risk-adjusted returns by investing in a variety of asset classes across our three primary climate solutions markets: Behind the Meter Grid-Connected Fuels, Transport, and Nature (BTM) (GC) (FTN) • Residential solar and storage • Utility-scale solar • Renewable natural gas • Community, commercial, and industrial solar and storage • Onshore wind • Fleet decarbonization • Energy efficiency • Battery energy storage systems • Ecological restoration Through December 31, 2024, we have cumulatively closed more than 1,250 investments spanning more than 100 different clients since 1998.
Partnering with these clients, we make investments in a variety of asset classes across our three primary climate solutions markets: Behind the Meter Grid-Connected Fuels, Transport, and Nature (BTM) (GC) (FTN) • Residential solar and storage • Utility-scale solar • Renewable natural gas • Community, commercial, and industrial solar and storage • Onshore wind • Fleet decarbonization • Energy efficiency • Battery energy storage systems • Ecological restoration Through December 31, 2025, we have cumulatively closed more than 1,300 investments spanning more than 150 different clients over a period of 30 years.
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Human Capital Metrics”. When issuing debt, we generally provide the estimated carbon emission savings using CarbonCount, and in some instances are able to achieve better borrowing rates by achieving certain CarbonCount scores.
When issuing debt, we generally provide the estimated carbon emission savings using CarbonCount, and in some instances are able to achieve better borrowing rates by achieving certain CarbonCount scores.
As of December 31, 2024, our Portfolio totaled approximately $6.6 billion, consisting of over 550 investments. Approximately 47% of our Portfolio is invested in BTM assets, approximately 39% invested in GC assets, and approximately 14% invested in FTN investments.
As of December 31, 2025, our Portfolio totaled approximately $7.6 billion, consisting of over 700 investments. Approximately 52% of our Portfolio is invested in BTM assets, approximately 34% invested in GC assets, and approximately 14% invested in FTN investments.
As described under “Investment Strategy”, we quantify the carbon impact of each of our investments. In addition, we operate our business in a manner intended to reduce our own environmental impact, including by purchasing renewable energy credits to mitigate the impact of our office operations, encouraging recycling and composting, and offering clean transportation employee incentives for electric and hybrid vehicles.
In addition, we operate our business in a manner intended to reduce our own environmental impact, including by purchasing renewable energy credits to mitigate the impact of our office operations, encouraging recycling and composting, and offering clean transportation employee incentives for electric and hybrid vehicles. We have also adopted policies focused on minimizing the environmental impact of our operations.
We have also adopted policies focused on minimizing the environmental impact of our operations. In 2021, we established - 11 - targets for our transition to net-zero carbon emissions by 2050 using the foundational framework developed by the Science Based Targets Initiative. Impact.
In 2021, we established targets for our transition to net-zero carbon emissions by 2050 using the foundational framework developed by the Science Based Targets Initiative. Impact.
Our culture is focused on hiring and retaining highly talented employees with diverse perspectives and empowering them to create value for our stockholders, and our success is dependent on employee understanding of and investment in their role in that value creation. Our employees are responsible for upholding our vision, purpose, and values.
Our culture is focused on hiring, developing and retaining highly talented employees with diverse perspectives and empowering them to create value for our stockholders, and our success is dependent on our employees understanding and investing in their role in that value creation in relation to their execution of our business plan.
We run a periodic education series that includes internal and external speakers presenting topics of interest that are relevant to our employees. We provide multiple learning solutions that cover a wide range of areas such as leadership skills, financial knowledge, technology training, presentation skills, and training intended to support an inclusive environment for all.
We provide multiple learning solutions that cover a wide range of areas such as leadership skills, financial knowledge, technology training, presentation skills, and training intended to support an inclusive environment for all.
In 2024, we established CarbonCount Holdings 1 LLC (“CCH1”), a co-investment structure established to jointly invest $2 billion in certain eligible climate positive projects with an affiliate of Kohlberg Kravis Roberts & Co. L.P. (“KKR”). See Item 8. Financial Statements and Supplementary Data, Note 6 to our financial statements for further information on CCH1.
In 2024, we established CarbonCount Holdings 1 LLC (“CCH1”), a co-investment structure, to jointly invest $2 billion in certain eligible climate positive projects with an affiliate of Kohlberg Kravis Roberts & Co. L.P.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations, for additional discussion on the performance of our Portfolio. FINANCING STRATEGY Our financing strategy is focused on lowering our cost of capital while also growing and diversifying our sources of capital.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations, for additional discussion on the performance of our Portfolio. - 9 - FINANCING STRATEGY Our financing strategy is focused on lowering our cost of capital while also growing and diversifying our sources of capital, as we seek to minimize the amount of equity we issue while continuing to manage leverage within credit rating agency limits.
Our policy is “equal pay for equal work” in compliance with applicable state law. Compensation for our employees is based upon experience, seniority, educational attainment, and individual contribution and company performance against goals. As of December 31, 2024, we employed 158 people. We intend to hire additional business professionals as needed to assist in the implementation of our business strategy.
We comply with all applicable federal, state, and local employment and civil rights laws. Our policy is “equal pay for equal work” in compliance with applicable state law. Compensation for our employees is based upon experience, seniority, educational attainment, and individual contribution and Company performance against goals. As of December 31, 2025, we employed 178 people.
Additionally, we have a committee of employees from across our organization that is focused on implementing sustainability and impact strategies and policies and reports directly to our chief executive officer. Annually we publish a report that illustrates our progress on these matters.
The Nominating, Governance and Corporate Responsibility Committee of our Board is responsible for our oversight of sustainability, impact, and governance matters, including related policies and communications. Additionally, we have a committee of employees from across our organization that is focused on implementing sustainability and impact strategies and policies and reports directly to our chief executive officer.
We have achieved success as a leading pure play publicly-traded investor in sustainable infrastructure assets because of a number of differentiating qualities that we believe provide us with a competitive advantage in the market.
See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for further information on our non-GAAP financial measures. We have achieved success as a leading pure play publicly-traded investor in sustainable infrastructure assets because of a number of differentiating qualities that we believe provide us with a competitive advantage in the market.
The mix of our Portfolio is expected to vary over time, as 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. - 6 - As of December 31, 2024, assets held in our co-investment structures that were not consolidated as part of our Portfolio but held by our investment partners in these structures totaled approximately $300 million.
The mix of our Portfolio is expected to vary over time, as 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.
In aggregate, we estimate our investments enable the avoidance of approximately 8 million metric tons of carbon dioxide equivalent annually (based on the aggregate of each of our project’s first year of operations). We completed approximately $2.3 billion of transactions during both 2024 and 2023, and from 2020 through 2024 we have closed more than $10 billion of transactions.
In aggregate, we estimate our investments enable the avoidance of approximately 10 million metric tons of carbon dioxide equivalent annually (based on the aggregate of each of our project’s first year of operations).
During periods of market disruption, certain sources of financing may be less accessible than others which may impact our financing decisions. Over time, as market conditions change, we may use other forms of financial leverage in addition to these financing arrangements.
Over time, as market conditions change, we may use other forms of financial leverage in addition to these financing arrangements.
Although we are not restricted by any regulatory requirements as to the type or amount of financial leverage we may use, our Board has established a target limit of our leverage ratio, defined as the ratio of debt to equity, of at or below 2.5 to 1, and a target range for our percentage of fixed rate debt to total debt of between 75% and 100%, allowing 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.
Our Board has established a target range for our percentage of fixed rate debt to total debt of between 75% and 100%, allowing 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. See additional discussion in “Item 7.
We are a signatory to the United Nations Global Compact, an initiative focused on responsible business practices related to human rights, labor, the environment and anti-corruption. Sustainability. Our business and business strategy are focused on addressing climate change, in part through the reduction of carbon emissions that have been scientifically linked to climate change.
Annually we publish a report that illustrates our progress on these matters. We are a signatory to the United Nations Global Compact, an initiative focused on responsible business practices related to human rights, labor, the environment and anti-corruption. - 11 - Sustainability.
Achieving investment grade status has further enhanced our financing strategy by improving our access to capital and lowering our cost of capital. The decision on how we finance our business is largely driven by our target capital structure, and by market conditions including the overall interest rate environment, prevailing credit spreads and the terms of available financing.
The decision on how we finance our business is largely driven by our target capital structure, and by market conditions including the overall interest rate environment, prevailing credit spreads and the terms of available financing. During periods of market disruption, certain sources of financing may be less accessible than others which may impact our financing decisions.
Our employees are typically engaged in our mission of sustainability and we believe this engagement improves their performance, as well as our employee recruitment and retention. Our chief executive officer periodically leads employee meetings intended to reinforce the importance of our mission and regularly meets with small groups of employees to receive their feedback on our business.
Our chief executive officer periodically leads employee - 10 - meetings intended to reinforce the importance of our mission and regularly meets with small groups of employees to receive their feedback on our business. We also meet no less than quarterly as a Company to provide information to employees on our strategy, mission, and financial results.
We continuously evaluate our employees’ level of engagement through in-person or remote meetings and through formal surveys or similar tools administered on a periodic basis. - 10 - We adhere to a blended learning approach with the understanding that our people learn from experiences (on the job and outside of work), from other people (mentors or supportive managers), and from formal learning and training programs.
We adhere to a blended learning approach with the understanding that our people learn from experiences (on the job and outside of work), from other people (mentors or supportive managers), and from formal learning and training programs. We run a periodic education series that includes internal and external speakers presenting topics of interest that are relevant to our employees.
Under the direction of our chief executive officer and our Board, we are focused on achieving a high level of environmental and social responsibility and strong corporate governance. The Nominating, Governance and Corporate Responsibility Committee of our Board is responsible for our oversight of sustainability, impact, and governance matters, including related policies and communications.
SUSTAINABILITY, IMPACT AND CORPORATE GOVERNANCE We own and invest in a diversified portfolio of sustainable infrastructure projects focused on reducing or mitigating the impacts of climate change. Under the direction of our chief executive officer and our Board, we are focused on achieving a high level of environmental and social responsibility and strong corporate governance.
We track and report internally on key talent metrics including workforce demographics, critical role pipeline data, and engagement and inclusion indices. Decisions regarding staffing, selection, and promotions are made on the basis of individual qualifications related to the requirements of the position.
We track and report internally on key talent metrics including workforce demographics, and engagement and inclusion indices. We view our workforce as a strategic asset. Decisions regarding staffing, selection, and promotions are made on the basis of both our business needs and the skills, competencies, experience, and performance of the individuals considered for each role.
We may finance our investments through the use of cash on hand, debt which may be either recourse or non-recourse and either fixed-rate or floating-rate, or equity, and may also finance such transactions through the use of off-balance sheet securitizations or syndication structures. When issuing debt, we generally provide the estimated carbon emission savings using CarbonCount.
We believe we have available a broad range of financing sources to fund our growing investment volume. We may finance our investments through the use of cash on hand, debt which may be either secured or unsecured and either fixed-rate or floating-rate, or equity, and may also finance transactions through the use of off-balance sheet securitizations or co-investment structures.
Financial Statements and Supplementary Data, Notes 5, 7 and 8 to our financial statements for further information on the types and amounts of our financing activities. HUMAN CAPITAL STRATEGY An emphasis on a durable social fabric, including engaged, collaborative, and fairly compensated staff, is an important factor in our financial success.
HUMAN CAPITAL STRATEGY We believe that emphasizing a durable social fabric, including engaged, collaborative, and fairly compensated staff, is an important factor in our financial success.
This outlook is underscored by a breadth of forecasts including McKinsey & Company (“McKinsey”) which estimates growth in U.S. electricity demand of more than 1,000 terawatt-hours (TWh) between 2024 and 2030, with power demand from data centers alone requiring 50 gigawatts (GW) of new generating capacity, and requiring energy infrastructure investment of more than $500 billion, excluding costs for transmission and distribution and computer equipment within the data centers.
This outlook is underscored by a breadth of forecasts including McKinsey & Company (“McKinsey”) which estimates growth in U.S. electricity demand of approximately 750 terawatt-hours (TWh) between 2025 and 2030, while 451 Research anticipates that power demand from data centers will increase from 50 gigawatts (GW) in 2024 to over 130 GW in 2030.
Our pipeline represents transactions that could potentially close in the next 12 months. There can, however, 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.
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 December 31, 2025, our pipeline consisted of more than $6.5 billion in new equity, debt and real estate opportunities.
As discussed in the “Investment Strategy” section above, we quantify the environmental impact of every transaction we execute through the application of CarbonCount. Our 2024 CarbonCount and avoided emissions for investments originated in 2024 can be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Environmental Metrics”.
As discussed in the “Investment Strategy” section above, we quantify the environmental impact of every transaction we execute through the application of CarbonCount.
Operationally, we target a leverage ratio below our Board’s target limit, in the range of 1.8 to 2.0 to 1. See additional discussion in “Item 7. Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Liquidity and Capital Resources” regarding our ongoing evaluation of our leverage limits and fixed-rate debt targets.
Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Liquidity and Capital Resources” regarding our ongoing evaluation of our leverage limits and fixed-rate debt targets. When issuing debt, we generally provide the estimated carbon emission savings using CarbonCount.
Refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations – Human Capital Metrics” for discussion of metrics related to our Human Capital Strategy. SUSTAINABILITY, IMPACT AND CORPORATE GOVERNANCE We own and invest in a diversified portfolio of climate solutions projects focused on reducing or mitigating the impacts of climate change.
We intend to hire additional business professionals as needed to assist in the implementation of our business strategy. Refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Human Capital Metrics” for discussion of metrics related to our Human Capital Strategy.
For additional information concerning these competitive risks, see “Item 1A. Risk Factors—We operate in a competitive market, which may impact the terms of the investments we make.” INFORMATION ABOUT OUR EXECUTIVE OFFICERS AND OTHER LEADERSHIP TEAM PERSONNEL Our executive officers and other leadership team personnel and their biographies are provided below. On February 13, 2025, we announced that Charles W.
For additional information concerning these competitive risks, see “Item 1A. Risk Factors—We operate in a competitive market, which may impact the terms of the investments we make.” - 13 - AVAILABLE INFORMATION We maintain a website at www.hasi.com. Information on our website is not incorporated by reference in this Form 10-K.
We may consider further use of similar structures to allow us to expand the investments that we make or to manage our Portfolio diversification. During 2024, we received a second investment grade rating from a major rating agency, which enabled our bonds to be included in investment grade bond indices.
We may consider further use of similar structures to allow us to expand the investments that we make or to manage our Portfolio diversification. Certain of the assets we originate have a risk and return profile which makes them better suited for other institutional investors rather than for inclusion in our own Portfolio.
Removed
As of December 31, 2024, we also managed approximately $6.8 billion in securitized assets held in unconsolidated securitization trusts.
Added
We completed approximately $4.3 billion and $2.3 billion of transactions during 2025 and 2024, respectively, and from 2020 through 2025 we have closed more than $14 billion of transactions.
Removed
As of December 31, 2024, our pipeline consisted of more than $5.5 billion in new equity, debt and real estate opportunities. Of our pipeline, 48% is related to BTM assets and 25% is related to GC assets, with the remainder related to FTN.
Added
As of December 31, 2025, fee-generating assets held in our co-investment structures that were not consolidated as part of our Portfolio but held by our investment partners in these structures totaled approximately $951 million.
Removed
We believe we have available a broad range of financing sources as part of our strategy to fund our investments.
Added
Our pipeline represents transactions that could potentially close in the next 12 months in which we will be the lead originator, as well as opportunities in which we may participate with other institutional investors.
Removed
We may also use other funds or structures such as CCH1 where institutional investors purchase all or a portion of the economics of the transaction and where we may receive upfront or ongoing fees for managing the assets.
Added
Of our pipeline, 35% is related to BTM assets, 37% is related to GC assets, 20% is related to FTN assets, with the remainder related to “Next Frontier” assets, which represent opportunities in adjacent markets where potential investments align with our investment strategy.
Removed
We also meet no less than quarterly as a company to provide information to employees on our strategy, mission, and financial results.
Added
McKinsey finds that globally, data center capital expenditures are expected to exceed $1.7 trillion by 2030, excluding IT hardware.
Removed
Melko will become executive vice president and chief financial officer, Marc T. Pangburn will become executive vice president and chief revenue and strategy officer, and Nathaniel J. Rose will become senior managing director, each effective as of March 1, 2025. Jeffrey A. Lipson , 57, has served as president and our chief executive officer since 2023.
Added
During 2025, we issued $500 million principal amount of junior subordinated notes which mature in 2056. The rating agencies give partial equity treatment to this type of issuance and therefore, it reduces our reliance on equity issuance to maintain our credit ratings. Also during 2025, we received a third investment grade rating from a major rating agency.
Removed
Prior to becoming chief executive officer, Mr. Lipson served as an executive vice president and our chief operating officer since 2021 and as our chief financial officer since 2019. Previously, Mr. Lipson was president and chief executive officer and director of Congressional Bank (now Forbright Bank). Mr.
Added
Achieving investment grade status improved our access to capital and lowered our cost of capital. In addition, we believe the use of co-investment structures reduces our reliance on raising additional capital to fund our business, while providing additional returns from asset management fee income.
Removed
Lipson also previously served in various roles for CapitalSource, Bank of America, and its predecessor FleetBoston Financial. Mr. Lipson received a Bachelor of Science degree in Economics from Pennsylvania State - 13 - University in 1989 and a Master of Business Administration in Finance from New York University’s Leonard N. Stern School of Business in 1993. Marc T.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

112 edited+21 added−16 removed265 unchanged
Biggest changeIn addition, to the extent we make investments that involve direct appropriations, we will depend on approval of the necessary spending for the projects. The repayment of the investment, or the return on our asset, could be adversely affected if appropriations for any such projects are delayed or terminated.
Biggest changeThe repayment of the investment, or the return on our asset, could be adversely affected if appropriations for any such projects are delayed or terminated. Risks Related to Our Assets and Projects in Which We Invest Changes in interest rates could adversely affect the value of our assets and negatively affect our profitability.
Further, as has occurred in the past, technological progress in electricity generation, storage or in the production of traditional fuels or the discovery of large new deposits of traditional fuels could reduce the cost of energy generated from those sources and consequently reduce the demand for the types of projects in which we invest, which could harm our new business origination prospects as well as the value of our existing Portfolio.
Further, as has occurred in the past, technological progress in electricity generation, storage or production of traditional fuels or the discovery of large new deposits of traditional fuels could reduce the cost of energy generated from those sources and consequently reduce the demand for the types of projects in which we invest, which could harm our new business origination prospects as well as the value of our existing Portfolio.
Alternatively, some government entities may choose to provide appropriations or other credit support for climate solutions projects, which would negatively impact the use of private capital such as ours. This could have a material and adverse effect on the return of and return on our investments for existing projects and on our ability to originate new assets.
Alternatively, some government entities may choose to provide appropriations or other credit support for climate solutions projects, which would negatively impact the use of private capital such as ours. This could have a material and adverse effect on the return on our investments for existing projects and on our ability to originate new assets.
These provisions could also make it difficult for stockholders to elect directors that are not nominated by the current members of our Board or take other corporate actions, including effecting changes in our management.
These provisions could also make it difficult for stockholders to elect directors that are not nominated by the current members of our Board or to take other corporate actions, including effecting changes in our management.
Such actions could have a dramatic impact on our business, results of operations and financial condition, and the cost of complying with any additional laws and regulations or the elimination or reduction in scope of various existing laws and regulations could have a material adverse effect on our financial condition and results of operations.
Such actions could have a dramatic impact on our business, results of operations and financial condition, and the cost of complying with any additional laws and regulations or the elimination or reduction in scope of various existing laws and regulations could have a material adverse effect on our business, financial condition and results of operations.
While we would seek to terminate the relevant hedge transaction and may have a claim against the defaulting counterparty for any losses, including unrealized gains, there is no assurance that we would be able to recover such amounts or to replace the relevant hedge on economically viable terms or at all.
While we would seek to terminate the relevant hedge transaction and may have a claim against the defaulting counterparty for any losses, including unrealized gains, there is no assurance that we would be able to recover such amounts or replace the relevant hedge on economically viable terms or at all.
These provisions include: • the denial of any right of our stockholders to remove members of our Board except upon the approval of at least two-thirds of the shares of then entitled to vote at an election of directors; • the exclusive right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our Board; • limitations on the ability of our stockholders to call special meetings; • a prohibition on actions by holders of our common stock by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • establishing advance notice provisions for stockholder proposals and nominations for elections to our Board to be acted upon at meetings of stockholders; • the ability of our Board to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; and • the requirement that the affirmative vote of the holders of at least two-thirds in voting power of all the then-outstanding shares of our common stock be obtained to amend our charter or bylaws.
These provisions include: • the denial of any right of our stockholders to remove members of our Board except upon the approval of at least two-thirds of the shares of then entitled to vote at an election of directors; • the exclusive right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our Board; • limitations on the ability of our stockholders to call special meetings; • a prohibition on actions by holders of our common stock by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • advance notice provisions for stockholder proposals and nominations for elections to our Board to be acted upon at meetings of stockholders; • the ability of our Board to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; and • the requirement that the affirmative vote of the holders of at least two-thirds in voting power of all the then-outstanding shares of our common stock be obtained to amend our charter or bylaws.
Some of the factors that have or in the future could negatively affect the market price of our common stock include: • our actual or projected operating results, financial condition, cash flows and liquidity or changes in business strategy or prospects; • changes in the mix of our investment products and services, including the level of securitizations or fee income in any quarter; • actual or perceived conflicts of interest with individuals, including our executives; • our ability to arrange financing for projects; • equity issuances by us, or share resales by our stockholders, or the perception that such issuances or resales may occur; • seasonality in construction and demand for our investments; • actual or anticipated accounting problems; • publication of research reports about us or the climate solutions industry; • changes in market valuations of similar companies; • adverse market reaction to any increased indebtedness we may incur in the future; • commodity price changes; • interest rate changes; • additions to or departures of our key personnel; - 35 - • speculation or negative publicity in the press or investment community; • our failure to meet, or the lowering of, our earnings estimates or those of any securities analysts; • increases in market interest rates, which may lead investors to demand a higher distribution yield for our common stock, and would result in increased interest expenses on certain of our debt; • changes in governmental policies, regulations or laws; • failure to maintain our exemption from registration as an investment company under the 1940 Act; • price and volume fluctuations in the stock market generally; and • general market and economic conditions, including the current state of the credit and capital markets.
Some of the factors that have or in the future could negatively affect the market price of our common stock include: • our actual or projected operating results, financial condition, cash flows and liquidity or changes in business strategy or prospects; • changes in the mix of our investment products and services, including the level of securitizations or fee income in any quarter; • actual or perceived conflicts of interest with individuals, including our executives; • our ability to arrange financing for projects; - 33 - • equity issuances by us, or share resales by our stockholders, or the perception that such issuances or resales may occur; • seasonality in construction and demand for our investments; • actual or anticipated accounting problems; • publication of research reports about us or the climate solutions industry; • changes in market valuations of similar companies; • adverse market reaction to any increased indebtedness we may incur in the future; • commodity price changes; • interest rate changes; • additions to or departures of our key personnel; • speculation or negative publicity in the press or investment community; • our failure to meet, or the lowering of, our earnings estimates or those of any securities analysts; • increases in market interest rates, which may lead investors to demand a higher distribution yield for our common stock, and would result in increased interest expenses on certain of our debt; • changes in governmental policies, regulations or laws; • failure to maintain our exemption from registration as an investment company under the 1940 Act; • price and volume fluctuations in the stock market generally; and • general market and economic conditions, including the current state of the credit and capital markets.
Although our energy efficiency investments do not normally require additional governmental appropriations to cover repayment due to the energy and operating savings derived from the newly installed equipment and systems, a significant decline in the fiscal health, level of appropriations or budgets of government customers may make it difficult for them to remain current on existing payment obligations or undesirable to enter into new energy efficiency improvement projects.
Although our energy efficiency investments do not normally require additional governmental appropriations to cover repayment due to the energy and operating savings derived from the newly installed equipment and systems, a significant decline in the fiscal health, level of appropriations or budgets may make it difficult for our government customers to remain current on existing payment obligations or undesirable to enter into new energy efficiency improvement projects.
With respect to the projects in which we invest, increases in interest rates, have caused, and in general, may in the future cause: (1) project owners to be less interested in borrowing or raising equity and thus reduce the demand for our investments; (2) the interest expense associated with the project’s borrowings to increase; (3) the market value of the project’s fixed rate or fixed return assets to decline; and (4) the market value of any of the project’s fixed-rate interest rate swap agreements to increase.
With respect to the projects in which we invest, prior increases in interest rates have caused, and in general, may in the future cause: (1) project owners to be less interested in borrowing or raising equity and thus reduce the demand for our investments; (2) the interest expense associated with the project’s borrowings to increase; (3) the market value of the project’s fixed rate or fixed return assets to decline; and (4) the market value of any of the project’s fixed-rate interest rate swap agreements to increase.
The securities issued by any wholly-owned or majority-owned subsidiaries that we hold or may form in the future that are exempted from the definition of “investment company” based on Section 3(c)(1) or 3(c)(7) of the 1940 Act, together with any other investment securities we may own, may not have a value in excess of 40% of the value of our total assets on a non-consolidated basis.
The securities issued by any wholly-owned or majority-owned subsidiaries that we hold or may form in the future that are exempted from the definition of “investment company” based on Section 3(c)(1) or 3(c)(7) of the 1940 Act, together with any - 29 - other investment securities we may own, may not have a value in excess of 40% of the value of our total assets on a non-consolidated basis.
As a holder of the residual value or other such interests, we are more exposed to losses on the underlying collateral because the interest we retain in the securitization vehicle or other entity would be subordinate to the more senior notes or interests issued to investors and we would, therefore, absorb all of the losses, up to the value of our interests, sustained with respect to the underlying assets before the owners of the notes or other interests experience any losses.
As a holder of the residual value or other such interests, we are more exposed to losses on the underlying collateral because the interest we retain in the securitization vehicle or other entity would be subordinate to the more senior notes or interests issued to investors and we - 31 - would, therefore, absorb all of the losses, up to the value of our interests, sustained with respect to the underlying assets before the owners of the notes or other interests experience any losses.
Net metering typically allows some project customers to interconnect their on-site solar or other renewable energy systems to the utility grid and offset their utility electricity purchases by receiving a bill credit at the utility’s retail rate for the amount of energy in excess of their electric usage that is generated by their renewable energy system and is exported to the grid.
Net metering typically allows some project customers to interconnect their on-site solar or other renewable energy systems to the utility grid - 14 - and offset their utility electricity purchases by receiving a bill credit at the utility’s retail rate for the amount of energy in excess of their electric usage that is generated by their renewable energy system and is exported to the grid.
In the case of securities ranking equally with instruments we hold, we would have to share on an equal basis any distributions with other stakeholders holding such instruments in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant project. - 21 - We invest in joint ventures and other similar arrangements that subject us to additional risks.
In the case of securities ranking equally with instruments we hold, we would have to share on an equal basis any distributions with other stakeholders holding such instruments in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant project. We invest in joint ventures and other similar arrangements that subject us to additional risks.
Government entities, due to the wide-ranging scope of their authority, have significant leverage in setting their contractual and regulatory relationships with third parties. In addition, government permits, licenses, concessions, leases and contracts are generally very complex, which may result in periods of non-compliance, or disputes over interpretation or enforceability.
Government entities, due to the wide-ranging scope of their authority, have significant leverage in setting their contractual and regulatory relationships with - 16 - third parties. In addition, government permits, licenses, concessions, leases and contracts are generally very complex, which may result in periods of non-compliance, or disputes over interpretation or enforceability.
If we, or our projects, fail to qualify for, or choose not to pursue, hedge accounting treatment, our, or our projects, operating results may be impacted because losses on the derivatives that we, or our projects, enter into may not be offset by a change in the fair value of the related hedged transaction in our statement of operations presented under GAAP.
If we or our projects fail to qualify for, or choose not to pursue, hedge accounting treatment, our, or our projects, operating results may be negatively impacted because losses on the derivatives that we or our projects enter into may not be offset by a change in the fair value of the related hedged transaction in our statement of operations presented under GAAP.
The Tax Benefits Preservation Plan was terminated in conjunction with our conversion from a Maryland corporation to a Delaware corporation in July 2024 (the “Conversion”). In the Conversion, we adopted our charter. Our charter includes provisions that are also intended to reduce the risk of an “ownership change” under Section 382 of the Code (the “Charter Tax Benefit Provisions”).
The Tax Benefits Preservation Plan was terminated in conjunction with our conversion from a Maryland corporation to a Delaware corporation in July 2024 (the “Conversion”). In the Conversion, we adopted our charter, which includes provisions that are also intended to reduce the risk of an “ownership change” under Section 382 of the Code (the “Charter Tax Benefit Provisions”).
If the market for various types of climate solutions projects or the investment techniques related to such projects do not develop as we anticipate, new business generation in this target area may be adversely impacted. The market for various types of climate solutions projects is emerging and rapidly evolving, leaving their future success uncertain.
If the market for various types of climate solutions projects or the investment techniques related to such projects do not develop as we anticipate, new business generation in this target area may be adversely impacted. The market for various types of climate solutions projects is emerging and rapidly evolving, leaving the future success of such projects uncertain.
Any extended interruption in a project’s construction or operation, a project’s inability to operate its assets efficiently, manage capital expenditures and costs or generate earnings and cash flow could have a material adverse effect on the repayment of and return on our investment and our business, financial condition, results of operations and cash flows.
Any extended interruption in a project’s construction or operation, a project’s inability to operate its assets efficiently, manage capital expenditures and costs or generate earnings and - 21 - cash flow could have a material adverse effect on the repayment of and return on our investment and our business, financial condition, results of operations and cash flows.
Failure to qualify as a REIT for prior taxable years would subject us to U.S. federal income tax and potentially state and local tax. We elected to be taxed as a REIT commencing with our taxable year ended December 31, 2013, but recently terminated our election, effective January 1, 2024.
Failure to qualify as a REIT for prior taxable years would subject us to U.S. federal income tax and potentially state and local tax. We elected to be taxed as a REIT commencing with our taxable year ended December 31, 2013, but terminated our election, effective January 1, 2024.
In many cases, in addition to contractual protections and remedies, project owners may seek guaranties, warranties and construction bonding to provide additional protection. - 24 - The warranties provided by the third parties and, in some cases, their subcontractors, typically limit any direct harm that results from relying on their products and services.
In many cases, in addition to contractual protections and remedies, project owners may seek guaranties, warranties and construction bonding to provide additional protection. The warranties provided by the third parties and, in some cases, their subcontractors, typically limit any direct harm that results from relying on their products and services.
In addition, renewable energy projects rely on electric and other types of transmission lines and facilities owned and operated by third parties to receive and distribute their energy. Any substantial access barriers to these lines and facilities could adversely impact the demand or financial performance for such projects and our investments.
In addition, renewable energy projects rely on electric and other types of transmission lines and facilities owned and operated by third parties to receive and distribute energy. Any substantial access barriers to these lines and facilities could adversely impact the demand or financial performance for such projects and our investments.
We have begun to expand and may seek to expand our investments outside of the United States in the future. These operations will be subject to a variety of risks - 30 - that we do not face in the United States, including risk from changes in foreign country regulations, infrastructure, legal systems and markets.
We have begun to expand and may seek to expand our investments outside of the United States in the future. These operations will be subject to a variety of risks that we do not face in the United States, including risk from changes in foreign country regulations, infrastructure, legal systems and markets.
Although we believe that these financings were properly treated as financings of our TRSs for U.S. federal income tax purposes, no assurance can be provided that the IRS would not assert that such financings should be treated as issued by other entities in our structure, which could impact our compliance with the TRS limitation and the other REIT requirements during the period that we elected to be taxed as a REIT. - 28 - If the IRS were to determine that we failed to qualify as a REIT for any prior taxable year ended on or before December 31, 2023, and we do not qualify for certain statutory relief provisions, we would be subject to U.S. federal income tax on our taxable income for such taxable year at the applicable corporate rate.
Although we believe that these financings were properly treated as financings of our TRSs for U.S. federal income tax purposes, no assurance can be provided that the IRS would not assert that such financings should be treated as issued by other entities in our structure, which could impact our compliance with the TRS limitation and the other REIT requirements during the period that we elected to be taxed as a REIT. - 26 - If the IRS were to determine that we failed to qualify as a REIT for any prior taxable year ended on or before December 31, 2023, and we do not qualify for certain statutory relief provisions, we would be subject to U.S. federal income tax on our taxable income for such taxable year at the applicable corporate rate.
Adverse developments resulting from changes in interest rates could have a material adverse effect on our business, financial condition and results of operations. The lack of liquidity of our assets may adversely affect our business, including our ability to value our assets. Volatile market conditions could significantly and negatively impact the liquidity of our assets.
Adverse developments resulting from changes in interest rates could have a material adverse effect on our business, financial condition and results of operations. - 17 - The lack of liquidity of our assets may adversely affect our business, including our ability to value our assets. Volatile market conditions could significantly and negatively impact the liquidity of our assets.
These provisions may limit our ability to leverage certain assets and limit our overall debt levels. We, or the projects in which we invest, enter into hedging transactions that could expose us to contingent liabilities or additional credit risk in the future and adversely impact our financial condition.
These provisions may limit our ability to leverage certain assets and limit our overall debt levels. - 32 - We, or the projects in which we invest, enter into hedging transactions that could expose us to contingent liabilities or additional credit risk in the future and adversely impact our financial condition.
Our business could be negatively impacted if any of our disclosures, including our CarbonCount or similar metrics, reporting to third-party standards, or reporting against our goals, are inaccurate, perceived to be inaccurate, or alleged to be inaccurate. - 17 - We operate in a competitive market, which may impact the terms of our investments.
Our business could be negatively impacted if any of our disclosures, including our CarbonCount or similar metrics, reporting to third-party standards, or reporting against our goals, are inaccurate, or perceived or alleged to be inaccurate. We operate in a competitive market, which may impact the terms of our investments.
Risks Related to our Borrowings and Hedging We use financial leverage in executing our business strategy, which may adversely affect the returns on our assets and may reduce cash available for distribution to our stockholders, as well as increase losses when economic conditions are unfavorable.
Risks Related to our Borrowings and Hedging - 30 - We use financial leverage in executing our business strategy, which may adversely affect the returns on our assets and may reduce cash available for distribution to our stockholders, as well as increase losses when economic conditions are unfavorable.
The result of these incidents could include disrupted operations, misstated or unreliable financial data, disrupted market price of our common stock, misappropriation of assets, liability for stolen assets or information, increased cybersecurity protection and insurance cost, regulatory enforcement, litigation and damage to our relationships.
The result of these incidents could include disrupted operations, misstated or unreliable financial data, disrupted market price of our common stock, misappropriation of assets, liability for stolen assets or information, - 28 - increased cybersecurity protection and insurance cost, regulatory enforcement, litigation and damage to our relationships.
If changes in asset values or income occur quickly, this may be especially difficult to accomplish. This difficulty may be exacerbated by the illiquid nature of the assets we may own. We may have to make decisions that we otherwise would not make absent 1940 Act considerations.
If changes in asset values or income occur quickly, this may be especially difficult to accomplish. This difficulty may be exacerbated by the illiquid nature of certain of the assets we own. We may have to make decisions that we otherwise would not make absent 1940 Act considerations.
At the end of the billing period, the customer simply pays for the net energy used or receives a credit at the retail rate if more energy is produced than consumed. Net metering policies are under review or have been limited or amended in a number of states.
At the end of the billing period, the customer pays for the net energy used or receives a credit at the retail rate if more energy is produced than consumed. Net metering policies are under review or have been limited or amended in a number of states.
We invest in projects that rely on third parties to manufacture quality products or provide reliable services in a timely manner and the failure of these third parties could cause project performance to be adversely affected. We invest in projects that typically rely on third parties to select, manage or provide equipment or services.
We invest in projects that rely on third parties to manufacture quality products or provide reliable services in a timely manner and the failure of these third parties could cause project performance to be adversely affected. - 22 - We invest in projects that typically rely on third parties to select, manage or provide equipment or services.
A climate related event in a non-related part of the business could have a material adverse impact on the financial strength of such end-customer and their ability to honor their contractual obligations which could negatively impact on revenue and the cash flow of the project and our business.
A climate related event in a non-related part of the business could have a material adverse impact on the financial strength of such end-customer and their - 18 - ability to honor their contractual obligations which could negatively impact on revenue and the cash flow of the project and our business.
Our ability to originate new assets could be adversely affected if one or more of the - 18 - ESCOs or other origination sources with whom we have relationships are suspended or debarred or fail to win new, or renew existing, contracts.
Our ability to originate new assets could be adversely affected if one or more of the ESCOs or other origination sources with whom we have relationships are suspended or debarred or fail to win new, or renew existing, contracts.
As a result, if a hedging counterparty cannot perform under the terms of the hedge, we would not receive payments due under that hedge, we may lose any unrealized gain - 34 - associated with the hedge and the hedged liability would cease to be hedged.
As a result, if a hedging counterparty cannot perform under the terms of the hedge, we would not receive payments due under that hedge, we may lose any unrealized gain associated with the hedge and the hedged liability would cease to be hedged.
By their terms, such instruments may entitle the holders to receive payment of interest, principal payments or other distributions on or before the dates on which we are entitled to receive payments with respect to the instruments in which we invest.
By their terms, such instruments - 19 - may entitle the holders to receive payment of interest, principal payments or other distributions on or before the dates on which we are entitled to receive payments with respect to the instruments in which we invest.
To the extent those parties are unable to perform on their contractual obligations or performance guarantees we may see diminished equity returns or the special purpose entity may be unable to - 22 - repay their loan timely or at all.
To the extent those parties are unable to perform on their contractual obligations or performance guarantees we may see diminished equity returns or the special purpose entity may be unable to repay their loan timely or at all.
Congress and other governmental and regulatory bodies have taken, are taking or may in the future take, various actions to address inflation, financial crises, perceived trade imbalances, or other areas of regulatory concern.
Congress and other governmental and regulatory bodies have taken, are taking or may in the future take, various actions to address inflation, financial crises, real or perceived trade imbalances, or other areas of regulatory concern.
Although there is limited authority directly on point, given the nature of, and the extent to which, the structural improvements securing the receivables held by us during the period we elected to be taxed as a REIT were integrated into and served the related buildings, we believe that the better view is that the nature and scope of our rights in such buildings that inured to us as a result of our receivables were sufficient to - 27 - satisfy the requirements of the Real Property Regulations described above.
Although there is limited authority directly on point, given the nature of, and the extent to which, the structural improvements securing the receivables held by us during the period we elected to be taxed as a REIT were integrated into and served the related buildings, we believe that the better view is that the nature and scope of our rights in such buildings that inured to us as a result of our receivables were sufficient to - 25 - satisfy the requirements of the Real Property Regulations described above.
We may not be successful in developing and implementing policies and strategies that will be effective in managing these risks in each country where we decide to do business. Our failure to manage these risks successfully could harm our international projects, reduce our international income or increase our costs, thus adversely affecting our business, financial condition and operating results.
We may not be successful in developing and implementing policies and strategies that will be effective in managing these risks in each country where we decide to do business. Our failure to manage these risks successfully could harm any future international projects, reduce our international income or increase our costs, thus adversely affecting our business, financial condition and operating results.
These exemptions generally require that at least 55% of such subsidiaries’ portfolios must be comprised of qualifying assets that meet - 31 - the requirements of the exemption.
These exemptions generally require that at least 55% of such subsidiaries’ portfolios must be comprised of qualifying assets that meet the requirements of the exemption.
This could also significantly harm our business, financial condition, results of operations, and our ability to make distributions, which could cause the value of our common stock to decline. A default will also significantly limit our financing alternatives such that we will be unable to pursue our leverage strategy, which could curtail the returns on our assets.
This could also significantly harm our business, financial condition, results of operations, and our ability to make distributions, which could cause the value of our common stock to decline. A default would also significantly limit our financing alternatives such that we would be unable to pursue our leverage strategy, which could curtail the returns on our assets.
If the interconnection or transmission agreement of a project is terminated for any reason, they may not be able to replace it with an interconnection and transmission arrangement on terms as favorable as the existing arrangement, or at all, or they may experience significant delays or costs in connection with securing a replacement.
If the interconnection or transmission agreement of a project is terminated for any reason, the project may not be able to replace it with an interconnection and transmission arrangement on terms as favorable as the terminated arrangement, or at all, or the project may experience significant delays or costs in connection with securing a replacement.
Certain financing agreements also contain cross-default provisions, so that if a default occurs under any one agreement, the lenders under our other agreements could also declare a default. A default and resulting repayment acceleration could significantly reduce our liquidity, which could require us to sell our assets to repay amounts due and outstanding.
Certain financing agreements also contain cross-default provisions, such that if a default occurs under any one agreement, the lenders under certain other agreements could also declare a default. A default and resulting repayment acceleration could significantly reduce our liquidity, which could require us to sell assets to repay amounts due and outstanding.
In addition, certain of our financing arrangements contain provisions that provide for a preference in cash flow allocations to the lender from our assets or an acceleration of principal payments owed when certain conditions are present related to the underlying assets that serve as collateral for the financing.
In addition, certain of our financing agreements contain provisions that provide for a preference in cash flow allocations to the lender from our assets or an acceleration of principal payments owed when certain conditions are present related to the underlying assets that serve as collateral for the financing.
The cash flows or cost savings of a project can be affected by, among other things: the terms of the power purchase or other use agreements used in such project; the creditworthiness of the off-taker or project user; price of power or services now and in the future; the technology deployed; unanticipated expenses in the development or operation of the project and changes in national, regional, state or local economic conditions, laws and regulations; and force majeure events.
The cash flows or cost savings of a project can be affected by, among other things: the terms of the power purchase or other use agreements used in such project; the creditworthiness of the offtaker or project user; price of power or services now and in the future; the technology deployed; unanticipated expenses in the development or operation of the project and changes in national, regional, state or local economic conditions, laws and regulations; and force majeure events.
Any failure or interruption of these systems could cause delays or other problems in - 29 - our originating, financing, investing, asset and financial management and reporting activities, which could have a material adverse effect on our operating results.
Any failure or interruption of these systems could cause delays or other problems in - 27 - our originating, financing, investing, asset and financial management and reporting activities, which could have a material adverse effect on our operating results.
Our duties, as the general partner, to our Operating Partnership and our partners may come into conflict with the duties of our directors and officers to us. - 25 - Under Delaware law, a general partner of a Delaware limited partnership owes its limited partners the duties of good faith and fair dealing.
Our duties, as the general partner, to our Operating Partnership and our partners may come into conflict with the duties of our directors and officers to us. - 23 - Under Delaware law, a general partner of a Delaware limited partnership owes its limited partners the duties of good faith and fair dealing.
Furthermore, the bankruptcy, insolvency, or other liquidity constraints of one or more customers may result in a renegotiation or rejection of the third-party contract, delay the receipt of any obligations or reduce the likelihood of collecting defaulted obligations.
Furthermore, the bankruptcy, insolvency, or other liquidity constraints of one or more of our customers may result in a renegotiation or rejection of the relevant third-party contract, delay the receipt of any obligations or reduce the likelihood of collecting defaulted obligations.
This change in interest rates may adversely affect our earnings and, in turn, cash available for distribution to our stockholders. In addition, as we may use short-term borrowings that are generally short-term commitments of capital, lenders may respond to market conditions making it more difficult for us to obtain continued financing.
Any such change in interest rates may adversely affect our earnings and, in turn, cash available for distribution to our stockholders. In addition, as we may use short-term borrowings that are generally short-term commitments of capital, lenders may respond to market conditions making it more difficult for us to obtain continued financing.
The ability of our assets to generate revenue from certain projects depends on having interconnection arrangements and services. The future success of our assets will depend, in part, on their ability to maintain satisfactory interconnection agreements.
The ability of our assets to generate revenue from certain projects depends on having interconnection arrangements and services. The future success of our assets will depend, in part, on the ability of such assets to maintain satisfactory interconnection agreements.
For example, Federal Energy Regulatory Commission (“FERC”) conducted its own review of grid resiliency and the functioning of electricity markets and has made, and could continue to make, changes to policies and regulations related to the function of the electricity markets and grid resiliency which may negatively impact the use of renewable energy or encourage the use of fossil fuel energy over renewable energy.
For example, Federal Energy Regulatory Commission (“FERC”) conducted a review of grid resiliency and the functioning of electricity markets and has made, and could continue to make, changes to policies and regulations related to the function of the electricity markets and grid resiliency which may negatively impact the use of renewable energy or encourage the use of fossil fuel energy over renewable energy.
See Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Use of Estimates for a discussion of the accounting estimates, judgments and assumptions that we believe are the most critical to an understanding of our business, financial condition and results of operations. Further, our provision for loan losses is evaluated on a quarterly basis.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Use of Estimates” for a discussion of the accounting estimates, judgments and assumptions that we believe are the most critical to an understanding of our business, financial condition and results of operations. Further, our provision for loan losses is evaluated on a quarterly basis.
In addition, the inability to securitize our Portfolio or assets within our Portfolio could hurt our performance and our ability to grow our business. We also use various special purpose entities to own and finance our assets. These subsidiaries incur various types of debt, that can be used to finance one or more of our assets.
In addition, the inability to securitize our Portfolio or assets within our Portfolio could adversely affect our performance and our ability to grow our business. We also use various special purpose entities to own and finance our assets. These subsidiaries incur various types of debt, that can be used to finance one or more of our assets.
We may fail or be unable to fully achieve one or more of our sustainability and governance goals due to a range of factors within or beyond our control, or we may adjust or modify our goals in light of new information, adjusted projections, or a change in business strategy, which could negatively impact our reputation and our business.
We may fail or be unable to fully achieve one or more of our sustainability and governance goals due to a range of factors, or we may adjust or modify our goals in light of new information, adjusted projections, or a change in business strategy, which could negatively impact our reputation and our business.
In addition to natural risks such as earthquake, flood, drought, lightning, wildfire, hurricane, ice, wind, and temperature extremes, other hazards, such as fire, explosion, structural collapse and machinery failure, acts of terrorism or related acts of war, hostile cyber intrusions, pandemics or other public health issue, or other catastrophic events are inherent risks in the construction and operation of a project.
In addition to natural risks such as earthquake, flood, drought, lightning, wildfire, hurricane, ice, wind, and temperature extremes, other hazards, such as fire, explosion, structural collapse and machinery failure, geopolitical conflicts, acts of terrorism or related acts of war, hostile cyber intrusions, pandemics or other public health issues, or other catastrophic events are inherent risks in the construction and operation of a project.
Because we may not have the ability to exercise control, we may not be able to realize some or all of the benefits expected from our investment. If any of the foregoing were to occur, our business, financial condition and results of operations could suffer as a result.
Because we may not have the ability to exercise control, we may not be able to realize some or all of the benefits expected from our investment. If any of the foregoing were to occur, our business, financial condition and results of operations could suffer.
There is a risk that these customers may default under their contracts. In addition, many of these end-customers are large entities with wide ranging activities. An event in a non-related part of the business could have a material adverse impact on the financial strength of such end-customer, such as the effect of wildfires on the California utilities.
There is a risk that these customers may default under their respective contracts. In addition, many of these end-customers are large entities with wide ranging activities. An event in a non-related part of their respective businesses could have a material adverse impact on the financial strength of such end-customer, such as the effect of wildfires on certain California utilities.
However, our current policy is to pay quarterly distributions, though the timing, declaration, amount and payment of any dividends will be within the discretion of our Board, and will depend upon various factors, including our earnings, our financial condition, our liquidity, our debt covenants, applicable provisions of Delaware law and other factors as our Board may deem relevant from time to time.
While our current policy is to pay quarterly distributions, the timing, declaration, amount and payment of any dividends is within the discretion of our Board, and will depend upon various factors, including our earnings, financial condition, liquidity, debt covenants, applicable provisions of Delaware law and other factors as our Board may deem relevant from time to time.
Please also refer to the sections entitled “Forward-Looking Statements” and “Risk Factor Summary”. - 15 - Risks Related to Our Business and Our Industry If the cost of energy generated by traditional sources of energy declines from present levels, demand for the projects in which we invest may decline.
Please also refer to the sections entitled “Forward-Looking Statements” and “Risk Factor Summary.” Risks Related to Our Business and Our Industry If the cost of energy generated by traditional sources of energy declines from present levels, demand for the projects in which we invest may decline.
In addition, the terms of our non-recourse debt include restrictions and covenants, including limitations on our ability to transfer or incur liens on the assets that secure the debt. For further information see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.
In addition, the terms of our non-recourse debt include restrictions and covenants, including limitations on our ability to transfer or incur liens on the assets that secure the debt. For further information see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”.
During periods of economic downturn in the global economy, the solvency and financial wherewithal of counterparties with whom we do business could be impacted and our exposure to credit risks from obligors increases, and our efforts to monitor and mitigate the associated risks may not be effective in reducing our credit risks.
During periods of economic downturn in the global economy, the solvency and financial wherewithal of counterparties with whom we do business could be impacted thereby increasing our exposure to credit risks from obligors, and our efforts to monitor and mitigate the associated risks may not be effective.
Some of our project companies are structured as joint ventures, partnerships, securitizations, and syndications, and we also at times invest in project companies through co-investment structures. Part of our strategy is to participate with other institutional investors or the project’s sponsor on various climate solutions transactions.
Part of our strategy is to participate with other institutional investors or project sponsors on various climate solutions transactions. Accordingly, some of our project companies are structured as joint ventures, partnerships, securitizations, and syndications, and we also at times invest in project companies through co-investment structures.
Generally, any projects involving construction are subject to various construction and operating delays and risks that have in the past caused them to, and may in the future cause them to, incur higher than expected costs or generate less than expected amounts of savings or outputs, such as electricity in the case of a renewable energy project.
Generally, projects involving construction are subject to various construction and operating delays and risks that have in the past and may in the future cause higher than expected costs or less than expected amounts of savings or outputs (such as electricity in the case of a renewable energy project).
If we match our competitors’ pricing, terms and structure, we may not be able to achieve acceptable risk-adjusted returns on our assets or we may be forced to bear greater risks of loss.
We may lose business opportunities if we do not match our competitors’ pricing, terms and structure. If we match our competitors’ pricing, terms and structure, we may not be able to achieve acceptable risk-adjusted returns on our assets or we may be forced to bear greater risks of loss.
In the event a counterparty to us or one of our climate solutions projects becomes insolvent or unable to make payments, we may fail to recover the full value of our investment or realize the value from the counterparty’s contract, thus reducing our earnings and liquidity.
In the event a counterparty becomes insolvent or unable to make payments, we may fail to recover the full value of our investment or realize the value from the counterparty’s contract, thus reducing our earnings and liquidity.
We, or our projects, may fail to qualify for hedge accounting treatment for a number of reasons, including if we, or our projects, use instruments that do not meet the Accounting Standards Codification (“ASC”) Topic 815 definition of a derivative, we, or our projects, fail to satisfy ASC Topic 815 hedge documentation and hedge effectiveness assessment requirements or the hedge relationship is not highly effective.
We or our projects may choose not to pursue, or fail to qualify for, hedge accounting treatment relating to derivative and hedging transactions for a number of reasons, including if we or our projects (1) use instruments that do not meet the Accounting Standards Codification (“ASC”) Topic 815 definition of a derivative, (2) fail to satisfy ASC Topic 815 hedge documentation and hedge effectiveness assessment requirements or (3) the hedge relationship is not highly effective.
In recent years “anti-ESG” sentiment has gained momentum across the U.S., with several states and Congress having proposed or enacted “anti-ESG” policies, legislation, or initiatives or issued related legal opinions, and the President having recently issued an executive order opposing diversity equity and inclusion (“DEI”) initiatives in the private sector.
In recent years, “anti-ESG” sentiment has gained momentum across the United States, with several states and Congress having proposed or enacted “anti-ESG” policies, legislation, or initiatives or issued related legal opinions, and the issuance of an executive order opposing diversity equity and inclusion (“DEI”) initiatives in the private sector.
The projects in which we invest typically depend in part on various U.S. federal, state or local governmental policies and incentives that support or enhance project economic feasibility.
The projects in which we invest may be influenced by and/or depend in part on various U.S. federal, state or local governmental policies and incentives that support or enhance project economic feasibility.
If we are unable to repay or refinance the remaining balance of this debt, or if the terms of any available refinancing are not favorable, we may be forced to liquidate assets or incur higher costs which may significantly harm our business, financial condition, results of operations, and our ability to make distributions, which could in turn cause the value of our common stock to decline.
Some of our borrowings will have a remaining balance when they come due and if we are unable to repay or refinance the remaining balance of such debt, or if the terms of any available refinancing are not favorable, we may be forced to liquidate assets or incur higher costs which may significantly harm our business, financial condition, results of operations, and our ability to make distributions, which could in turn cause the value of our common stock to decline.
Our charter provides that, to the fullest extent permitted by law, and unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court of the State of Delaware) will be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of ours to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware (the “DGCL”), our charter or our bylaws (as either may be amended or restated) or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (iv) any action asserting a claim governed by the internal affairs doctrine of the law of the State of - 26 - Delaware.
Our charter provides that, to the fullest extent permitted by law, and unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court of the State of Delaware) will be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of us, (2) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of ours to us or our stockholders, (3) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware (the “DGCL”), our charter or our bylaws (as either may be amended or restated) or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (4) any action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware. - 24 - However, our charter provides that federal district courts of the United States of America will be the sole and exclusive forum for claims under the Securities Act.
Decreases in interest rates, in general, may over time cause: (1) project owners to be more interested in borrowing or raising equity thus increase the demand for our assets; (2) prepayments on our assets, to the extent allowed, to increase; (3) the interest expense associated with the project’s borrowings to decrease; (4) the market value of the project’s fixed rate or fixed return assets to increase; and (5) the market value of any fixed-rate interest rate swap agreements to decrease.
Decreases in interest rates, in general, may over time cause: (i) project owners to be more interested in borrowing or raising equity thus increasing the demand for our assets; (ii) prepayments and refinancings on our assets, to the extent allowed, to increase; (iii) the interest expense associated with the project’s borrowings to decrease; (iv) the market value of the project’s fixed rate or fixed return assets to increase; and (v) the market value of any fixed-rate interest rate swap agreements to decrease.
While the projects maintain insurance, obtain warranties from vendors and obligate contractors to meet certain performance levels, the proceeds of such insurance, warranties or performance guarantees may not cover the lost revenues, increased expenses or liquidated damages payments should the project experience any equipment breakdowns, insurance claims or non-performance by contractors or vendors. - 23 - Some of the projects in which we invest may require substantial operating or capital expenditures in the future.
While the projects maintain insurance, obtain warranties from vendors and obligate contractors to meet certain performance levels, the proceeds of such insurance, warranties or performance guarantees may not cover the lost revenues, increased expenses or liquidated damages payments should the project experience any equipment breakdowns, insurance claims or non-performance by contractors or vendors.
For example, low natural gas prices may reduce the demand for projects like renewable energy that can substitute for natural gas. Low natural gas prices also typically adversely affect both the price available to renewable energy projects under future power sale agreements and the price of the electricity the projects sell on either a forward or a spot-market basis.
Low natural gas prices also typically adversely affect both the price available to renewable energy projects under future power sale agreements and the price of the electricity operating projects sell on either a forward or a spot-market basis.
There can be no assurance that the laws and regulations governing the 1940 Act, including the Division of Investment Management of the SEC providing more specific or different guidance regarding these exemptions, will not change in a manner that adversely affects our operations. For example, on August 31, 2011, the SEC issued a concept release (No. IC-29778; File No.
There can be no assurance that the laws and regulations governing the 1940 Act, including the Division of Investment Management of the SEC providing more specific or different guidance regarding these exemptions, will not change in a manner that adversely affects our operations.
If errors are identified, our reputation and our business could be negatively impacted. If we were to seek more extensive assurance or attestation with respect to such sustainability and governance metrics, we may be unable to obtain such assurance or attestation or may face increased costs related to obtaining and/or maintaining such assurance or attestation.
If we were to seek more extensive assurance or attestation with respect to such sustainability and governance metrics, we may be unable to obtain such assurance or attestation or may face increased costs related to obtaining and/or maintaining such assurance or attestation.
Moreover, no assurance can be given that we will be able to make distributions to our stockholders at any time in the future or that the level of any distributions we do make to our stockholders will achieve a market yield or increase or even be maintained over time, any of which could materially and adversely affect us.
Moreover, no assurance can be given that we will be able to make distributions to our stockholders at any time in the future or that the level of any such distributions will achieve a market yield or increase or even be maintained over time, any of which could materially and adversely affect us. - 34 - Future offerings of debt or equity securities, which may rank senior to our common stock, may adversely affect the market price of our common stock.
Upon the subsequent disposition or sale of such assets, we could incur future losses or gains based on the difference between the sale price received and adjusted value of such assets as reflected on our balance sheet at the time of sale.
Upon the subsequent disposition or sale of such assets, we could incur future losses or gains based on the difference between the sale price received and adjusted value of such assets as reflected on our balance sheet at the time of sale. Any such losses could have a material adverse effect on our business, financial condition and results of operations.
Our credit facilities have rates that adjust on a frequent basis based on prevailing short-term interest rates.
Our borrowings may have a shorter duration than our assets. Our credit facilities have rates that adjust on a frequent basis based on prevailing short-term interest rates.
In most instances, projects which sell power under PPAs commit to sell minimum levels of generation. If the project generates less than the committed volumes, it may be required to buy the shortfall of electricity on the open market or make payments of liquidated damages or be in default under a PPA, which could result in its termination.
If the project generates less than the committed volumes, it may be required to buy the shortfall of electricity on the open market or make payments of liquidated damages or be in default under a PPA, which could result in termination of the relevant contract.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Chief Technology Officer (“CTO”), who also serves as our chief information security officer, helps identify, assess and manage our cybersecurity threats and risks. Collaborating with their team, they are responsible for steering the company-wide cybersecurity strategy, policy, standards, architecture, and processes.
Biggest changeOur Head of Technology Infrastructure & Chief Information Security Officer (“CISO”) helps identify, assess and manage our cybersecurity threats and risks. Collaborating with their team, they are responsible for steering the Company-wide cybersecurity strategy, policy, standards, architecture, and processes.
Risk Factors” in this Annual Report on Form 10-K, including “Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, a misappropriation of funds, and/or damage to our business relationships, all of which could negatively impact our financial results.” Governance Our Board addresses our cybersecurity risk management as part of its general oversight function.
Risk Factors” in this Annual Report on Form 10-K, including “Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, a misappropriation of funds, and/or damage to our business relationships, all of which could negatively impact our financial results.” - 35 - Governance Our Board addresses our cybersecurity risk management as part of its general oversight function.
Risk management and strategy - 36 - We have implemented and maintain various information security processes at each of our remote and office locations designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third-party hosted services, communications systems, hardware and software, and our critical data, including intellectual property and confidential information that is proprietary, strategic or competitive in nature (“Information Systems and Data”).
Risk management and strategy We have implemented and maintain various information security processes at each of our remote and office locations designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third-party hosted services, communications systems, hardware and software, and our critical data, including intellectual property and confidential information that is proprietary, strategic or competitive in nature (“Information Systems and Data”).
For example, (1) cybersecurity risk is addressed as a component of our enterprise risk management program; (2) the information security function works with our leadership team to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business; (3) our CTO evaluates material risks from cybersecurity threats against our overall business objectives and reports to the Finance & Risk Committee of our Board (the “Finance and Risk Committee”), which evaluates our overall enterprise risk.
For example, (1) cybersecurity risk is addressed as a component of our enterprise risk management program; (2) the information security function works with our leadership team to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business; and (3) our CISO evaluates material risks from cybersecurity threats against our overall business objectives and reports to the Finance and Risk Committee of our Board (the “Finance and Risk Committee”), which evaluates our overall enterprise risk.
They also identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and our risk profile using various methods. The Company’s information security program, led by our CTO, collaborates with various departments within the organization, such as information technology, legal, enterprise risk management, human resources, accounting, finance, and internal audit, as well as external third-party partners.
They also identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and our risk profile using various methods. The Company’s information security program, led by our CISO, collaborates with various departments within the organization, such as information technology, legal, enterprise risk management, human resources, accounting, finance, and internal audit, as well as external third-party partners.
In addition, our incident response plan and vulnerability management processes include reporting to our Board for certain cybersecurity incidents. The Finance & Risk Committee receives periodic reports from CTO concerning our significant cybersecurity threats and risk and the processes we have implemented to address them.
In addition, our incident response plan and vulnerability management processes include reporting to our Board for certain cybersecurity incidents. The Finance and Risk Committee receives periodic reports from our CISO concerning our significant cybersecurity threats and risk and the processes we have implemented to address them.
The Finance & Risk Committee also receives various reports, summaries or presentations related to cybersecurity threats, risk and mitigation. - 37 -
The Finance and Risk Committee also receives various reports, summaries or presentations related to cybersecurity threats, risk and mitigation.
Our CTO is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel. Our CTO is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Our CISO is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel. Our CISO is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
The Finance & Risk Committee is responsible for overseeing the Company’s cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our CTO. The CTO has a over two decades of information technology and cybersecurity leadership experience.
The Finance and Risk Committee is responsible for overseeing the Company’s cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our CISO. The CISO has over two decades of information technology and cybersecurity leadership experience.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we may be involved in various claims and legal actions in the ordinary course of business. As of December 31, 2024, we are not currently subject to any legal proceedings that are likely to have a material adverse effect on our financial position, results of operations or cash flows. Item 4.
Biggest changeItem 3. Legal Proceedings From time to time, we may be involved in various claims and legal actions in the ordinary course of business. As of December 31, 2025, we are not currently subject to any legal proceedings that are likely to have a material adverse effect on our financial position, results of operations or cash flows. Item 4.
Mine Safety Disclosures Not applicable. - 38 - PART II
Mine Safety Disclosures Not applicable. - 36 - PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDate Total number of shares purchased (1) Average price per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the plans or programs 3/5/2024 6,198 $ 25.36 N/A N/A 5/15/2024 9,563 32.28 N/A N/A 8/15/2024 1,160 31.06 N/A N/A 11/15/2024 1,005 27.22 N/A N/A (1) During the year ended December 31, 2024, certain of our employees surrendered shares of our common stock owned by them to satisfy their tax and other compensation related withholdings associated with the vesting of restricted stock and restricted stock units.
Biggest changeDate Total number of shares purchased (1) Average price per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the plans or programs 2/3/2025 615 $ 27.56 N/A N/A 3/5/2025 13,191 28.53 N/A N/A 4/3/2025 462 29.05 N/A N/A 5/15/2025 20,651 28.35 N/A N/A 5/30/2025 568 25.05 N/A N/A 7/10/2025 81 27.67 N/A N/A 8/15/2025 1,511 27.64 N/A N/A 9/2/2025 326 27.73 N/A N/A 11/15/2025 1,239 33.65 N/A N/A (1) During the year ended December 31, 2025, certain of our employees surrendered shares of our common stock owned by them to satisfy their tax and other compensation related withholdings associated with the vesting of restricted stock and restricted stock units.
Any distributions we make will be at the discretion of our Board and will depend upon, among other things, our actual results of operations. These results and our ability to pay distributions will be affected by various factors, including the net interest and other income from our Portfolio, our operating expenses and any other expenditures. See Item 1A.
Any distributions we make will be at the discretion of our Board and will depend upon, among other things, our actual results of operations. These results and our ability to pay distributions will be affected by various factors, including the net interest and other income from our Portfolio, our operating expenses and any other expenditures. See “Item 1A.
The 161 holders of record do not include the beneficial owners of our common stock whose shares are held by a broker or bank. Such information was obtained from The Depository Trust Company. Dividends We intend to make regular quarterly distributions to holders of our common stock.
The 166 holders of record do not include the beneficial owners of our common stock whose shares are held by a broker or bank. Such information was obtained from The Depository Trust Company. Dividends We intend to make regular quarterly distributions to holders of our common stock.
The graph assumes that $100 was invested at closing on December 31, 2019, in our shares of common stock, the S&P 500 Index, and the peer group index and that all dividends were reinvested without the payment of any commissions.
The graph assumes that $100 was invested at closing on December 31, 2020, in our shares of common stock, the S&P 500 Index, and the peer group index and that all dividends were reinvested without the payment of any commissions.
See Note 11 to our audited financial statements in this Form 10-K for details of our dividends declared in 2024 and 2023.
See Note 11 to our audited financial statements in this Form 10-K for details of our dividends declared in 2025 and 2024.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The table below summarizes all of our repurchases of our common stock during 2024.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The table below summarizes all of our repurchases of our common stock during 2025.
The following graph is a comparison of the cumulative total stockholder return from December 31, 2019 to December 31, 2024 on shares of our common stock, the Standard & Poor’s 500 Index (the “S&P 500 Index”), and a peer group index, the ALPS Clean Energy ETF.
The following graph is a comparison of the cumulative total stockholder return from December 31, 2020 to December 31, 2025 on shares of our common stock, the Standard & Poor’s 500 Index (the “S&P 500 Index”), and a peer group index, the ALPS Clean Energy ETF.
Risk Factors, and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this Form 10-K, for information regarding the sources of funds used for dividends and for a discussion of factors, if any, which may adversely affect our ability to pay dividends.
Risk Factors”, and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”, of this Form 10-K, for information regarding the sources of funds used for dividends and for a discussion of factors, if any, which may adversely affect our ability to pay dividends.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the NYSE under the symbol “HASI.” Holders As of February 11, 2025, we had 161 registered holders of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the NYSE under the symbol “HASI.” Holders As of February 9, 2026, we had 166 registered holders of our common stock.
Non-controlling interest holders exchanged 10,000 OP units for the same number of shares of common stock during the year ended December 31, 2024. The price paid per share is based on the closing price of our common stock as of the date of the exchange and withholding. Item 6. [Reserved] None. - 40 -
Non-controlling interest holders exchanged 157,046 OP units for the same number of shares of common stock during the year ended December 31, 2025. The price paid per share is based on the closing price of our common stock as of the date of the exchange and withholding. - 38 - Item 6. [Reserved] None.
There can be no assurance that the performance of our common stock will continue in line with the same or similar trends depicted in the graph below. - 39 - Company or Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 HA Sustainable Infrastructure Capital, Inc. $ 100.00 $ 205.95 $ 176.97 $ 100.75 $ 102.54 $ 105.61 S&P 500 Index 100.00 118.39 152.34 124.73 157.48 196.84 Alps Clean Energy ETF 100.00 240.24 193.54 138.53 110.77 81.19 Sources: Bloomberg L.P.
There can be no assurance that the performance of our common stock will continue in line with the same or similar trends depicted in the graph below. - 37 - Company or Index 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 HA Sustainable Infrastructure Capital, Inc. $ 100.00 $ 85.93 $ 48.92 $ 49.79 $ 51.28 $ 63.61 S&P 500 Index 100.00 128.68 105.36 133.03 166.28 195.98 Alps Clean Energy ETF 100.00 80.56 57.66 46.11 33.79 42.39 Sources: Bloomberg L.P.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeComparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 Years ended December 31, $ Change % Change 2024 2023 (dollars in thousands) Revenue Interest income $ 263,792 $ 207,794 $ 55,998 27 % Rental income 2,095 21,251 (19,156) (90) % Gain on sale of assets 80,341 68,637 11,704 17 % Securitization asset income 26,054 19,259 6,795 35 % Other income 11,313 2,930 8,383 286 % Total revenue 383,595 319,871 63,724 20 % Expenses Interest expense 242,364 171,008 71,356 42 % Provision for loss on receivables 1,059 11,832 (10,773) (91) % Compensation and benefits 81,319 64,344 16,975 26 % General and administrative 32,905 31,283 1,622 5 % Total expenses 357,647 278,467 79,180 28 % Income before equity method investments 25,948 41,404 (15,456) (37) % Income (loss) from equity method investments 247,878 140,974 106,904 76 % Income (loss) before income taxes 273,826 182,378 91,448 50 % Income tax benefit (expense) (70,198) (31,621) (38,577) 122 % Net income (loss) $ 203,628 $ 150,757 $ 52,871 35 % • Net income increased by approximately $53 million as a result of a $107 million increase in income from equity method investments and a $64 million increase in total revenue, partially offset by a $79 million increase in total expense and a $39 million increase in income tax expense.
Biggest changeThese assets do not have a contractual maturity date and the underlying securitized assets have contractual maturity dates until 2065. - 46 - Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024 Years ended December 31, $ Change % Change 2025 2024 (dollars in thousands) Revenue Interest and rental income $ 286,363 $ 265,887 $ 20,476 8 % Gain on sale of assets 65,089 80,341 (15,252) (19) % Management fees and retained interest income 33,621 26,054 7,567 29 % Origination fee and other income 15,429 11,313 4,116 36 % Total revenue 400,502 383,595 16,907 4 % Expenses Interest expense 292,404 242,364 50,040 21 % Provision for loss on receivables and retained interests in securitization trusts 12,145 1,059 11,086 1,047 % Compensation and benefits 92,460 81,319 11,141 14 % General and administrative 30,677 32,905 (2,228) (7) % Total expenses 427,686 357,647 70,039 20 % Income (loss) before equity method investments (27,184) 25,948 (53,132) (205) % Income (loss) from equity method investments 300,667 247,878 52,789 21 % Income (loss) before income taxes 273,483 273,826 (343) — % Income tax benefit (expense) (85,247) (70,198) (15,049) 21 % Net income (loss) $ 188,236 $ 203,628 $ (15,392) (8) % • Net income decreased by approximately $15 million.
We make judgments, based in part, on supporting legal opinions, on whether these entities should be consolidated as a variable interest entity, as defined in ASC 810, Consolidation, and whether the transfers to these entities are accounted for as a sale of a financial asset or a secured borrowing under ASC 860, Transfers and Servicing .
We make judgments, based in part on supporting legal opinions, as to whether these entities should be consolidated as a variable interest entity, as defined in ASC 810, Consolidation, and whether the transfers to these entities are accounted for as a sale of a financial asset or a secured borrowing under ASC 860, Transfers and Servicing .
If any of these government policies, incentives or regulations are adversely amended, delayed, eliminated, reduced, retroactively changed or not extended beyond their current expiration dates or there is a negative impact from the recent federal law changes or proposals, the operating results of the projects we finance and the demand for, and the returns available from our investments may decline, which could harm our business.
If any of these government policies, incentives or regulations are further adversely amended, delayed, eliminated, reduced, retroactively changed or not extended beyond their current expiration dates or there is a negative impact from the recent federal law changes or proposals, the operating results of the projects we finance and the demand for, and the returns available from our investments may decline, which could harm our business.
We believe a non-GAAP measure, such as adjusted earnings, that adjusts for the items discussed above is and has been a meaningful indicator of our economic performance in any one period and is useful to our investors as well as management in evaluating our performance as it relates to expected dividend payments over time.
We believe a non-GAAP measure, such as Adjusted Earnings, that adjusts for the items discussed above is and has been a meaningful indicator of our economic performance in any one period and is useful to our investors as well as management in evaluating our performance, including as it relates to expected dividend payments over time.
The decision as to how we finance specific assets or groups of assets is largely driven by risk and portfolio and financial management considerations, including the potential for gain on sale or fee income, as well as the overall interest rate environment, prevailing credit spreads, the terms of available financing, and financial market conditions.
The decision as to how we finance specific assets or groups of assets is largely driven by risk, portfolio, and financial management considerations, including the potential for gain on sale or fee income, the overall interest rate environment including prevailing credit spreads, the terms of available financing, and financial market conditions.
While we generally intend to hold our target assets that we do not securitize upon acquisition as long term investments, certain of our investments may be sold in order to manage our interest rate risk and liquidity needs, to meet other operating objectives and to adapt to market conditions.
While we generally intend to hold our target assets that we do not securitize upon acquisition as long-term investments, certain of our investments may be sold in order to manage our interest rate risk and liquidity needs, to meet other operating objectives or to adapt to market conditions.
Furthered by supportive government policies, culminating in transformative legislation and incentives - 41 - including the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS Act, there has been a resurgence of investment in domestic manufacturing in the United States over the last few years. According to the U.S.
Furthered by supportive government policies, culminating in transformative legislation and incentives including the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS Act, there has been a resurgence of investment in domestic manufacturing in the United States over the last few years. According to the U.S.
We perform an ongoing assessment as to whether each entry is a voting interest entity or a variable interest entity, and for variable interest entities, we make judgments to determine the primary beneficiary of each entity as required by ASC 810, which includes an assessment of the type and degree of control we have over the entity.
We perform an ongoing assessment as to whether each entity is a voting interest entity or a variable interest entity, and for variable interest entities, we make judgments to determine the primary beneficiary of each entity as required by ASC 810, which includes an assessment of the type and degree of control we have over the entity.
In addition, Adjusted Cash Flow from Operations plus Other Portfolio Collections is not comparable to Net cash provided by (used in) financing activities in that it excludes many of our financing activities such as proceeds from common stock issuances and borrowings and repayments of unsecured debt.
In addition, Adjusted Cash from Operations plus Other Portfolio Collections is not comparable to Net cash provided by (used in) financing activities in that it excludes many of our financing activities such as proceeds from common stock issuances and borrowings and repayments of unsecured debt.
Factors Impacting our Operating Results We expect that our results of operations will be affected by a number of factors and will primarily depend on the size and mix of our Portfolio, the income we receive from securitizations, syndications and other services, our Portfolio’s credit risk profile, changes in market interest rates, commodity prices, federal, state and/or municipal governmental policies, general market conditions in local, regional and national economies, and maintain our exemption from registration as an investment company under the 1940 Act and the impact of climate change.
Factors Impacting our Operating Results We expect that our results of operations will be affected by a number of factors and will primarily depend on the size and mix of our Portfolio, the income we receive from securitizations, syndications and other services, our Portfolio’s credit risk profile, changes in market interest rates, commodity prices, federal, state and/or municipal governmental policies, general market conditions in local, regional and national economies, and our ability to maintain our exemption from registration as an investment company under the 1940 Act and the impact of climate change.
Off-Balance Sheet Arrangements We have relationships with non-consolidated entities or financial partnerships, such as entities often referred to as structured investment vehicles, or special purpose or variable interest entities, established to facilitate the sale of securitized assets.
Off-Balance Sheet Arrangements 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 believe renewable energy and storage provide important solutions to both of these issues. Distributed energy resources, particularly rooftop solar, and battery storage improve grid resilience, while lowering dependence and utilization of transmission and distribution infrastructure.
We believe renewable energy and storage provide important solutions to both of these - 40 - issues. Distributed energy resources, particularly rooftop solar and battery storage, improve grid resilience, while lowering dependence and utilization of transmission and distribution infrastructure.
Cash available for reinvestment is a non-GAAP measure which is calculated as adjusted cash flow from operations plus other portfolio collections less dividend and distribution payments made during the period.
Cash available for reinvestment is a non-GAAP measure which is calculated as Adjusted Cash from Operations Plus Other Portfolio Collections less dividend and distribution payments made during the period.
Our management uses it in this way and we believe that our investors use it in a similar - 54 - fashion to evaluate our investment performance, and as such, we believe that its disclosure is useful to our investors.
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.
According to the levelized cost of energy (“LCOE”) reports that Lazard Inc. publishes annually, solar energy and wind energy now provide the lowest potential cost of electricity in the United States, even on an unsubsidized basis, which we believe will continue to lead to high demand for clean energy infrastructure assets to help minimize energy inflation.
According to the levelized cost of energy (“LCOE”) reports that Lazard Inc. publishes annually, new build solar energy and wind energy now provide the lowest potential cost of electricity in the United States, even on an unsubsidized basis, which we believe will continue to lead to high demand for clean energy infrastructure assets to help minimize energy inflation.
As it relates to the Convertible Notes, those obligations may be settled at maturity with cash, or with the issuance of shares to the extent that the market price of our common stock exceeds the strike price on our Convertible Notes. For further information on our long-term debt, see Note 8 to our financial statements of this Form 10-K.
As it relates to the Convertible Notes, those obligations may be settled at maturity with cash, or with the issuance of shares to the extent that the market price of our common stock exceeds the strike price on our Convertible Notes. For further information on our long-term debt, see Note 8 to our audited financial statements in this Form 10-K.
We also have maturities related to our non-recourse debt and Convertible Notes. However, as it relates to the non-recourse debt, to the extent there are not sufficient cash flows received from investments pledged as collateral for such debt, the investor has no recourse against other corporate assets to recover any shortfalls and corporate cash contributions would not be required.
We also have maturities related to our non-recourse debt. However, as it relates to the non-recourse debt, to the extent there are not sufficient cash flows received from investments pledged as collateral for such debt, the investor has no recourse against other corporate assets to recover any shortfalls and corporate cash contributions would not be required.
Thus, in calculating adjusted earnings, for certain of these investments where there are characteristics as described above, we further adjust GAAP net income (loss) to take into account our calculation of the return on capital (based upon the underwritten investment rate), as adjusted to reflect the performance of the project and the cash distributed.
Thus, in calculating Adjusted Earnings, we adjust GAAP net income (loss) for certain of our investments where there are characteristics as described above to take into account our calculation of the return on capital (based upon the underwritten investment rate), as adjusted to reflect the performance of the project and the cash distributed.
We use a similar approach in the underwriting of our receivables. - 49 - Under GAAP, we account for these equity method investments utilizing the HLBV method.
We use a similar approach in the underwriting of our receivables. Under GAAP, we account for these equity method investments utilizing the HLBV method.
This non-GAAP financial measure may not be comparable to similarly titled or other similar measures used by other companies. Although there is also not a directly comparable GAAP measure that demonstrates how we consider cash available for dividend payment, below is a reconciliation of this measure to Net cash provided by operating activities.
This non-GAAP financial measure may not be comparable to similarly titled or other similar measures used by other companies. Although there is also not a directly comparable GAAP measure that demonstrates how we consider cash available for dividend payment and reinvestment, below is a reconciliation of this measure to Net cash provided by operating activities.
In calculating 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.
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.
Nevertheless, unanticipated credit losses could occur and during periods of economic downturn in the global economy, our exposure to credit risks from obligors increases, and our efforts to monitor and mitigate the associated risks may not be effective in reducing our credit losses. See Item 7A.
Nevertheless, unanticipated credit losses could occur and during periods of economic downturn in the global economy, our exposure to credit risks from obligors increases, and our efforts to monitor and mitigate the associated risks may not be effective in reducing our credit losses. See “Item 7A.
Accordingly, our book value does not necessarily represent an estimate of our net realizable value, liquidation value or our fair market value. - 59 -
Accordingly, our book value does not necessarily represent an estimate of our net realizable value, liquidation value or our fair market value.
Credit Risks We source and identify quality opportunities within our broad areas of expertise and apply our rigorous underwriting processes to our transactions, which, we believe, will generally enable us to minimize our credit losses and maintain our current level of financing costs.
Credit Risks We identify opportunities within our broad areas of expertise and apply our rigorous underwriting processes to our transactions, which, we believe, will generally enable us to minimize our credit losses and maintain our current level of financing costs.
Quantitative and Qualitative Disclosures about Credit Risks for further information on our credit risks and see Note 6 to our audited financial statements in this Form 10-K for additional detail of the credit risks surrounding our Portfolio.
Quantitative and Qualitative Disclosures” about Credit Risks for further information on our credit risks and see Note 6 to our audited financial statements in this Form 10-K for additional detail of the credit risks surrounding our Portfolio.
Finally, this expected growth in U.S. electricity demand combined with the increase in climate events and disasters, as discussed above, is also leading to greater attention to and prioritization of improving the resilience and reliability of the grid, while greater geopolitical conflict and uncertainty along with volatility in fossil fuel prices is leading to growing prioritization of national energy security.
Finally, the expected growth in U.S. electricity demand combined with the increase in climate events and disasters, as discussed above, is also leading to greater attention to and prioritization of improving the resilience and reliability of the grid. Simultaneously, greater geopolitical conflict and uncertainty along with volatility in fossil fuel prices is leading to growing prioritization of national energy security.
In addition, renewable energy’s use of freely available natural - 42 - resources, such as solar and wind energy, reduce the electric grid’s reliance on fossil fuels, which despite higher domestic production, continues to be primarily imported from foreign nations, many of whom are hostile to the United State.
In addition, renewable energy’s use of freely available natural resources, such as solar and wind energy, reduce the electric grid’s reliance on fossil fuels, which despite higher domestic production, continues to be primarily imported from foreign nations, many of whom are hostile to the United States.
The timing and impact of future sales of receivables and investments, if any, cannot be predicted with any certainty. We or our affiliates may, at any time and from time to time, seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise.
The timing and impact of future sales of receivables, debt securities, or equity method investments, if any, cannot be predicted with any certainty. We may, at any time and from time to time, seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise.
We seek to manage credit risk through thorough due diligence and underwriting processes, strong structural protections in our transaction agreements with customers and continual, active asset management and portfolio monitoring.
We seek to manage credit risk through thorough due diligence and underwriting processes, strong structural protections in our transaction agreements and continual, active asset management and portfolio monitoring.
(2) This is a non-GAAP adjustment to reflect the return on capital of our equity method investments as described above. (3) This adjustment is to eliminate the intercompany portion of fees received from co-investment structures that for GAAP net income is included in the Equity method income line item.
(2) This is a non-GAAP adjustment to reflect the return on capital of our equity method investments as described above. (3) This adjustment is to eliminate the intercompany portion of up-front origination fees received from co-investment structures that for GAAP net income is included in the Equity method income line item.
Also, Adjusted Cash Flow from Operations plus Other Portfolio Collections differs from Net cash provided by (used in) investing activities in that it excludes many of the uses of cash used in our investing activities such as Equity method investments, Purchases of and investments in receivables, Purchases of investments, and Collateral provided to and received from hedge counterparties.
Adjusted Cash from Operations plus Other Portfolio Collections also differs from Net cash provided by (used in) investing activities in that it excludes many of the uses of cash used in our investing activities such as Equity method investments, Purchases of and investments in receivables, Purchases of debt securities, and Collateral provided to and received from hedge counterparties.
First and foremost, there have been significant changes in the outlook for U.S. power demand, with load growth now expected to experience its most significant increase since before the turn of this century. For the last 25 years, U.S. electricity demand has been essentially flat at approximately 4,000 TWh per year, according to the U.S.
First and foremost, there have been significant changes in the outlook for U.S. power demand, with load growth now expected to experience its most significant increase since before the turn of this century. For the past 20 years, U.S. electricity demand has been essentially flat at approximately 4,000 TWh per year, according to the U.S.
In addition, we may decide for any particular asset that we should securitize or otherwise sell a portion, or all, of the asset, which would result in gain on sale of receivables and investments or fee income as described below.
In addition, we may decide for any particular asset that we should securitize or otherwise sell a portion, or all, of the asset, which would result in gain on sale of receivables and debt securities or fee income as described below.
This metric is calculated on the ten year period ending December 31, 2024. Incurred losses include both realized losses on equity method investments and realized credit losses on receivables and investments. Although there is not a direct comparable GAAP measure, we have presented average annual recognized loss on Managed Assets as calculated under GAAP for comparison.
This metric is calculated on the ten year period ending December 31, 2025. Incurred losses include both realized losses on equity method investments and realized credit losses on receivables and debt securities. Although there is not a direct comparable GAAP measure, we have presented average annual recognized loss on Managed Assets as calculated under GAAP for comparison.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our financial statements and accompanying notes included in Item 8. Financial Statements and Supplementary Data, of this Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our financial statements and accompanying notes included in Item 8. Financial Statements and Supplementary Data, of this Form 10-K. Refer to “Item 7.
We are subject to interest rate risk in connection with new asset originations and our borrowings, including our revolving credit facilities, and in the future, to the extent we choose to enter into any new floating rate assets, revolving credit facilities or other borrowings. See Item 7A.
We are subject to interest rate risk in connection with new asset originations and our borrowings, including our revolving credit facilities, and in the future, to the extent we choose to enter into any new floating rate assets, revolving credit facilities or other borrowings.
The amount of financial leverage we may deploy for particular assets 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.
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.
Results of Operations For a comparison of our results of operations for the fiscal years ended December 31, 2023 and December 31, 2022, see “Part II, Item 7.
Results of Operations For a comparison of our results of operations for the fiscal years ended December 31, 2024 and December 31, 2023, see “Part II, Item 7.
As of December 31, 2024, our managed assets total approximately $13.7 billion, and generally fall into one of three categories: (1) our Portfolio, which represents investments we have retained on our balance sheet, (2) assets in our co-investment structures that are not in our Portfolio but held by our investment partners in these structures, and (3) assets we have securitized by transferring all or a portion of the economics of the investment, typically using securitization trusts, to institutional investors in exchange for cash and/or residual interests in the assets and in some cases, ongoing fees.
As of December 31, 2025, our managed assets total approximately $16.1 billion, and generally fall into one of three categories: (1) our Portfolio, which represents investments we have retained on our balance sheet, (2) fee-generating assets in our co-investment structures that are not in our Portfolio but held by our investment partners in these structures, and (3) assets we have securitized by transferring all or a portion of the economics of the investment, typically using securitization trusts, to institutional investors in exchange for cash and/or residual interests in the assets and in some cases, ongoing fees.
The Federal Reserve Board of Governors increased the federal funds rate (the rate at which banks lend to one another) 11 times in 2022 and 2023 for an overall increase of 5.25% to reduce inflation to stated targets. In 2024, as inflationary pressures eased, the Board of Governors lowered rates three times for an overall decrease of 1.00%.
The Federal Reserve Board of Governors increased the federal funds rate (the rate at which banks lend to one another) 11 times in 2022 and 2023 for an overall increase of 5.25% to reduce inflation to stated targets. In 2024 and 2025, as inflationary pressures eased, the Board of Governors lowered rates six times for an overall decrease of 1.75%.
According to the National Oceanic and Atmospheric Administration (“NOAA”), the year 2024 was the warmest year on record, while the ten warmest years since 1850 have occurred in the last decade.
According to the National Oceanic and Atmospheric Administration (“NOAA”), the year 2025 was the third warmest year on record, while the ten warmest years since 1850 have occurred in the last decade.
Commercial entities, developers of climate solutions projects, and government agencies consider the impacts of these policies and incentives when making decisions on capital expenditures. Government regulations may also impact the terms of third party financing provided to support these projects.
Commercial entities, developers of sustainable infrastructure projects, and government agencies consider the impacts of these policies and incentives when making decisions on capital expenditures. Government regulations may also impact the terms of third party financing provided to support these projects.
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 $910 million for the year ended December 31, 2024.
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 $959 million for the year ended December 31, 2025.
Sources and Uses of Cash We had approximately $150 million and $75 million in unrestricted cash, cash equivalents, and restricted cash as of December 31, 2024 and 2023, respectively. The following table summarizes our cash flows for the years ended December 31, 2024, 2023, and 2022.
Sources and Uses of Cash We had approximately $145 million and $150 million in unrestricted cash, cash equivalents, and restricted cash as of December 31, 2025 and 2024, respectively. The following table summarizes our cash flows for the years ended December 31, 2025, 2024, and 2023.
Under this method, we recognize income or loss based on the change in the amount each partner would receive, typically based on the negotiated profit and loss allocation, if the assets were liquidated at book value, after adjusting for any distributions or contributions made during such quarter.
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.
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 for an investor to 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 - 48 - 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.
Following a decades-long trend towards offshoring, there has been a sharp reversal in recent years in favor of reshoring, as manufacturers have sought to (a) reduce supply chain vulnerabilities exposed by the Covid-19 pandemic, (b) address a growing consumer segment in favor of "Made in the USA” products, and (c) overcoming growing national security concerns stemming from the country's higher dependence on foreign countries for manufacturing goods, particularly for strategic industries like industrial materials, energy products, and semiconductors.
Following a decades-long trend towards offshoring, there has been a sharp reversal in recent years in favor of reshoring, as manufacturers have sought to (1) reduce supply chain vulnerabilities exposed by the Covid-19 pandemic, (2) address a growing consumer segment in favor of “Made in the USA” products, and (3) overcome growing national security concerns stemming from the country's higher dependence on foreign countries for manufacturing goods, particularly for strategic industries like industrial materials, energy products, and semiconductors.
Overview We are an investor in sustainable infrastructure assets advancing the energy transition. With more than $13 billion in managed assets, our investment strategy is focused primarily on long-lived real assets that are supported by long-term recurring cash flows.
Overview We are an investor in sustainable infrastructure assets advancing the energy transition. With more than $16 billion in managed assets, our investment strategy is focused primarily on long-lived real assets that generate long-term recurring cash flows.
Portfolio Our Portfolio totaled approximately $6.6 billion as of December 31, 2024, and included approximately $3.1 billion of BTM assets, approximately $2.6 billion of GC assets, and approximately $0.9 billion of FTN assets. Approximately 52% of our Portfolio consisted of unconsolidated equity investments in renewable energy related projects.
Portfolio Our Portfolio totaled approximately $7.6 billion as of December 31, 2025, and included approximately $3.9 billion of BTM assets, approximately $2.6 billion of GC assets, and approximately $1.1 billion of FTN assets. Approximately 52% of our Portfolio consisted of equity investments in renewable energy related projects.
As of December 31, 2024, we held approximately $6.6 billion of assets in our Portfolio, and we also managed approximately $7.1 billion in securitization trusts or co-investment vehicles that are not consolidated on our balance sheet. See Item 1. Business for a further discussion of our business, investing strategy, and financing strategy.
As of December 31, 2025, we held approximately $7.6 billion of assets in our Portfolio, and we also managed approximately $8.5 billion in securitization trusts or co-investment vehicles that are not consolidated on our balance sheet. See “Item 1. Business” for a further discussion of our business, investing strategy, and financing strategy.
More recently, however, a number of new macro trends have materially altered the U.S. electricity market, including growth in data centers, a resurgence in domestic manufacturing, as well as the broader trend of electrification of more sectors of the economy, including on-road transportation, industrial manufacturing, and space heating, among others. • Data centers.
This growth is due to a number of new macro trends that have materially altered the U.S. electricity market, including growth in data centers, a resurgence in domestic manufacturing, as well as the broader trend of electrification of more sectors of the economy, including on-road transportation, industrial manufacturing, and space heating, among others. • Data centers.
If our determination of fair value is determined to be incorrect, our gain on sale of receivables and investments in our income statement and securitization assets on our balance sheet will be inaccurate. See Note 3 to our audited financial statements in this Form 10-K for a discussion around fair value measurements.
If our determination of fair value is determined to be incorrect, our gain on sale of receivables and debt securities in our income statement and retained interests in securitization trusts on our balance sheet will be inaccurate. See Note 3 to our audited financial statements in this Form 10-K for a discussion around fair value measurements.
Regardless of the nature of our equity interest, we typically negotiate the purchase prices of our equity investments, which have a finite expected life, based on our underwritten project cash flows discounted back to the net present value, based on a target investment rate, with the cash flows to be received in the future reflecting both a return on the capital (at the investment rate) and a return of the capital we have committed to the project.
We typically negotiate the purchase prices of our equity investments based on our underwritten project cash flows discounted back to a net present value, based on a target investment rate, with the cash flows to be received in the future reflecting both a return on the capital (at the investment rate) and a return of the capital we have committed to the project.
We believe that the aggregate of these items, which combine as a non-GAAP financial measure titled Adjusted Cash Flow from Operations plus Other Portfolio Collections, is a useful measure of the liquidity we have available from our assets to fund both new investments and our regular quarterly dividends.
We believe that the aggregate of these items, which together we present as a non-GAAP financial measure titled Adjusted Cash from Operations plus Other Portfolio Collections, is a useful measure of the liquidity generated from our assets to fund both new investments and our regular quarterly dividends.
The total amount of income from securitizations, syndications, and other services will vary from quarter to quarter depending on various factors, including the level of our originations, the duration, credit quality and types of assets we originate, current and anticipated future interest rates, the impact on our leverage, the mix of our Portfolio and our need to tailor our mix of assets in order to maintain our exemption from registration under the 1940 Act.
The total amount of income from securitizations, management and origination fees, and other services will vary from quarter to quarter depending on various factors, including the level of our originations, the amount of assets within our managed co-investment structures, the duration, credit quality and types of assets we originate, current and anticipated future interest rates, the impact on our leverage, the mix of our Portfolio and our need to tailor our mix of assets in order to maintain our exemption from registration under the 1940 Act.
The table below shows these metrics as of December 31, 2024 is: Average Annual Recognized Loss (GAAP) on Managed Assets 0.12 % Average Annual Realized Loss on Managed Assets 0.07 % 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.
The table below shows these metrics as of December 31, 2025 is: Average Annual Recognized Loss (GAAP) on Managed Assets 0.13 % Average Annual Realized Loss on Managed Assets 0.08 % 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.
The following table provides results related to our equity method investments for the last three years: Years ended December 31, 2024 2023 2022 (dollars in millions) Income (loss) under GAAP $ 248 $ 141 $ 31 Collections of Adjusted earnings $ 90 $ 39 $ 57 Return of capital 17 24 101 Cash collected (1) $ 107 $ 63 $ 158 (1) Cash collected during 2023 and 2022 includes $9 million and $64 million, respectively of debt issuance proceeds from certain of our equity method investees, the repayment of which we have guaranteed.
The following table provides results related to our equity method investments for the last three years: Years ended December 31, 2025 2024 2023 (dollars in millions) Income (loss) under GAAP $ 301 $ 248 $ 141 Collections of Adjusted Earnings $ 195 $ 90 $ 39 Return of capital 83 17 24 Cash collected (1) $ 278 $ 107 $ 63 (1) Cash collected includes $14 million in 2025 and $9 million in 2023 related to debt issuance proceeds from certain of our equity method investees, the repayment of which we have guaranteed.
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 totaled approximately $6.6 billion as of December 31, 2024.
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.
Refer to ‘Item 7 -- Management’s Discussion and Analysis of Financial Condition and Results of Operations’ on our Form 10-K for the year ended December 31, 2023 for a discussion of our results for the year ended December 31, 2023 and a comparison of our results of operations for the fiscal years ended December 31, 2023 and December 31, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” on our Form 10-K for the year ended December 31, 2024 for a discussion of our results for the year ended December 31, 2024 and a comparison of our results of operations for the fiscal years ended December 31, 2024 and December 31, 2023.
As discussed in Item 1. Business - Human Capital Strategy, we believe that fostering an internal culture of belonging that is supportive and allows people of all background to flourish lends itself to the highest levels of company performance and facilitates the attraction and retention of best-in-class talent.
Business—Human Capital Strategy”, we believe that fostering an internal culture of belonging that is supportive and allows people of all backgrounds to flourish lends itself to the highest levels of Company performance and facilitates the attraction and retention of best-in-class talent.
Maturities of recourse debt obligations In addition to general operational obligations, which are typically paid as incurred, and dividends and distributions, which are declared by our Board quarterly, we have future cash needs related to the payments due at maturity of our Senior Unsecured Notes and our term loan facilities, and the balances of our short-term commercial paper programs and our revolving credit facilities.
Maturities of recourse debt obligations In addition to general operational obligations, which are typically paid as incurred, and dividends and distributions, which are declared by our Board quarterly, we have potential future cash needs related to the payments due at maturity of our Commercial Paper Notes, Senior Notes, Junior Subordinated Notes, Convertible Notes and Term Loan facilities.
As shown in the table below, our debt to equity ratio was approximately 1.8 to 1 as of December 31, 2024, which is 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 December 31, 2025, below our current Board-approved leverage limit of up to 2.5 to 1.
In the future, adjusted earnings may also exclude one-time events pursuant to changes in GAAP and certain other adjustments as approved by a majority of our independent directors. Prior to 2024, we referred to this metric as distributable earnings.
In the future, Adjusted Earnings may also exclude one-time events pursuant to changes in GAAP and certain other adjustments as approved by a majority of our independent directors.
The following table provides a summary of our anticipated principal repayments for our receivables and investments as of December 31, 2024: - 47 - Principal payment due by Period Total Less than 1 year 1-5 years 5-10 years More than 10 years (in millions) Receivables (excluding allowance) $ 2,946 $ 113 $ 1,292 $ 1,072 $ 469 Investments 7 1 1 3 2 See Note 6 to our audited financial statements in this Form 10-K for information on: • the anticipated maturity dates of our receivables and investments and the weighted average yield for each range of maturities as of December 31, 2024, • the term of our leases and a schedule of our future minimum rental income under our land lease agreements as of December 31, 2024, • the Performance Ratings of our Portfolio, and • the receivables on non-accrual status.
The following table provides a summary of our anticipated principal repayments for our receivables and debt securities as of December 31, 2025: Principal payment due by Period Total Less than 1 year 1-5 years 5-10 years More than 10 years (in millions) Receivables (excluding allowance) $ 3,342 $ 421 $ 1,991 $ 682 $ 248 Debt securities 73 2 8 4 59 See Note 6 to our audited financial statements in this Form 10-K for information on: • the maturity dates of our receivables and debt securities and the weighted average yield for each range of maturities as of December 31, 2025; • the term of our leases and a schedule of our future minimum rental income under our land lease agreements as of December 31, 2025; • the Performance Ratings of our Portfolio; and • the receivables on non-accrual status.
(5) Shares used to calculated 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.
(6) Included in Interest expense within our statements of operations. (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.
We have long-standing relationships with the leading clean energy project developers, owners and operators, utilities, and ESCOS, which provide recurring, programmatic investment and fee-generating opportunities, while also enabling scale benefits and operational efficiencies. We completed approximately $2.3 billion of transactions during both 2024 and 2023.
We have long-standing relationships with the leading U.S. clean energy project developers, owners and operators, utilities, and energy service companies (“ESCOS”), which provide recurring, programmatic investment and fee-generating opportunities, while also enabling scale benefits and operational and transactional efficiencies. We completed approximately $4.3 billion of transactions during 2025 and $2.3 billion in 2024.
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. We have calculated our adjusted earnings for the years ended December 31, 2024, 2023 and 2022.
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.
This is especially true for utility scale projects that sell power on a wholesale basis such as many of our Grid-Connected projects as opposed to Behind-the-Meter projects which compete against the retail or delivered costs of electricity which includes the cost of transmitting and distributing the electricity to the end user. See Item 7A.
This is true for utility scale projects that sell power on a wholesale basis and for Behind-the-Meter projects that compete against the retail or delivered costs of electricity, which includes the cost of transmitting the electricity to the end user. See “Item 7A.
If the instrument is more debt-like then we will include any related interest expense and exclude the underlying shares issuable upon conversion of the instrument. If the instrument is more equity-like and is more dilutive when treated as equity then we will exclude any related interest expense and include the weighted average shares underlying the instrument.
If the instrument is determined to be more equity-like and is more dilutive when treated as equity then we will exclude any related interest expense and include the weighted average shares underlying the instrument.
For more detail on commodity price impacts, see “Item 7A. Quantitative and Qualitative Disclosures about Market Risk-Commodity Price Risk”. Notwithstanding any concerns that current market conditions have raised for our business, we believe significant opportunities exist for us to grow our business.
Quantitative and Qualitative Disclosures about Market Risk—Commodity Price Risk.” Notwithstanding any concerns that current market conditions have raised for our business, we believe significant opportunities exist for us to grow our business.
According to the Pew Research Center, 54% of U.S. adults in 2022 described climate change as a major threat to the country’s well-being, up from 44% in 2010, while approximately two-thirds of US. adults in 2023 said renewable energy development should be prioritized over expanding oil, gas, and coal production.
According to the Pew Research Center, 51% of U.S. adults in 2025 described climate change as a major threat to the country’s well-being, up from 40% in 2013, while approximately 64% of US. adults in 2024 said renewable energy development should be prioritized over expanding oil, gas, and coal production.
The gain may be comprised of either or both cash received and a residual interest in securitized assets. We may also recognize additional income from servicing fees from these securitized assets over the life of the asset.
For transactions that we securitize via a non-consolidated trust, we recognize a gain on the securitization. The gain may be comprised of either or both cash received and a residual interest in securitized assets. We may also recognize additional income from servicing fees from these securitized assets over the life of the asset.
The table below presents, for the debt investments 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, interest expense incurred, and average yield or cost. Our earnings from our equity method investments are not included in this table.
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, interest expense incurred, and average yield or cost.
Adjusted Earnings We calculate adjusted earnings as GAAP net income (loss) excluding non-cash equity compensation expense, provisions for loss on receivables, amortization of intangibles, non-cash provision (benefit) for taxes, losses or (gains) from modification or extinguishment of debt facilities, any one-time acquisition related costs or non-cash tax charges and the earnings attributable to our non-controlling interest of our Operating Partnership.
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.
However, as a result of the application of the HLBV method, including the impact of tax allocations, the high levels of depreciation and other non-cash expenses that are common to renewable energy projects and the differences between the agreed upon profit and loss and the cash flow allocations, the distributions and thus the economic returns (i.e. return on capital) achieved from the investment are often significantly different from the income or loss that is allocated to us under the HLBV method in any one period.
The application of the HLBV method described above results in GAAP income or loss in any one period that is often significantly different from the economic returns achieved from the investment in any one period as a result of the impact of tax allocations, the high levels of depreciation and other non-cash expenses that are common to renewable energy projects and the differences between the agreed upon profit and loss and the cash flow allocations.
Our sources of liquidity typically include collections from our Portfolio, cash proceeds from asset sales and securitizations, fee revenue, proceeds from debt transactions, and proceeds from equity transactions. Our uses of liquidity typically include funding investments, operating expenses (including cash compensation), interest and principal payments on our debt, stockholder dividends and limited partner distributions, and funding investments.
Our uses of liquidity typically include funding investments, operating expenses including cash compensation, interest and principal payments on our debt, and stockholder dividends and limited partner distributions. We pay our operating expenses, our debt service, and dividends from collections on our Portfolio, fee income and proceeds from sales of Portfolio investments.
Debt excludes securitizations that are not consolidated on our balance sheet. We intend to use financial leverage for the primary purpose of financing our Portfolio and business activities and not for the purpose of speculating on changes in interest rates.
We intend to use financial leverage for the primary purpose of financing our Portfolio and business activities and not for the purpose of speculating on changes in interest rates.
For the year ended December 31, 2024 2023 2022 (in millions) Cash provided by (used in) operating activities $ 6 $ 100 $ — Cash provided by (used in) investing activities (131) (1,993) (592) Cash provided by (used in) financing activities 200 1,792 517 Increase (decrease) in cash and cash equivalents $ 75 $ (101) $ (75) Discussion of significant changes in cash provided by operating activities Net cash provided by operating activities for the year ended December 31, 2024 was $94 million lower than the year ended December 31, 2023.
For the year ended December 31, 2025 2024 2023 (in millions) Cash provided by (used in) operating activities $ 167 $ 6 $ 100 Cash provided by (used in) investing activities (856) (131) (1,993) Cash provided by (used in) financing activities 684 200 1,792 Increase (decrease) in cash, cash equivalents, and restricted cash $ (5) $ 75 $ (101) Discussion of significant changes in cash provided by operating activities Net cash provided by operating activities for the year ended December 31, 2025 was $161 million higher than the year ended December 31, 2024.
See Note 10 to our financial statements in this Form 10-K regarding the amount of our distributions that are treated as ordinary taxable income to our stockholders. The dividends declared in 2024 and 2023 are described in Note 11 to our audited financial statements in this Form 10-K.
See Note 10 to our financial statements in this Form 10-K regarding the amount of our distributions that are treated as ordinary taxable income to our stockholders.
Quantitative and Qualitative Disclosures about Market Risk for further information on the impact of commodity prices. - 44 - Government Policies We make investments in renewable energy projects that typically depend in part on various federal, state or local governmental policies that support or enhance the project’s economic feasibility.
Quantitative and Qualitative Disclosures about Market Risk” for further information on the impact of commodity prices. - 42 - Government Policies We make investments in energy transition projects that may benefit from various federal, state or local governmental policies that support or enhance the project’s economic feasibility.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWhile we cannot fully protect our investments, we seek to mitigate these risks by using third party experts to conduct engineering and weather analysis and insurance reviews as appropriate. Weather related risks are at times managed in cooperation with our clients where they buy offsetting power positions to mitigate power market disruptions or operational impacts.
Biggest changeWeather-related risks are at times managed in cooperation with our clients where they buy offsetting power positions to mitigate power market disruptions or operational impacts. Once a transaction has closed we continue to monitor the environmental risks to the Portfolio. - 62 -
Additionally, we have a Finance and Risk Committee of our Board which discusses and reviews policies and guidelines with respect to our risk assessment and risk management for various risks, including, but not limited to, our interest rate, counter party, credit, capital availability, refinancing risks, and cybersecurity.
Additionally, we have a Finance and Risk Committee of our Board which discusses and reviews policies and guidelines with respect to our risk assessment and risk management for various risks, including, but not limited to, our interest rate, counter party, credit, capital availability, refinancing risks, and cybersecurity risks.
This is especially true for GC utility scale projects that sell power on a wholesale basis as opposed to BTM projects which compete against the retail or delivered costs of electricity which includes the cost of transmitting and distributing the electricity to the end user.
This is especially true for GC utility scale projects that sell power on a wholesale basis, as BTM projects compete against the retail or delivered costs of electricity which includes the cost of transmitting and distributing the electricity to the end user.
The results of our reviews are used to update the project’s risk rating as necessary. Additional detail of the credit risks surrounding our Portfolio can be found in Note 6 to our financial statements in this Form 10-K.
The results of our reviews are used to update the project’s risk rating as necessary. Additional detail of the credit risks surrounding our Portfolio can be found in Note 6 to our audited financial statements in this Form 10-K.
We often invest in utility scale solar projects by owning the land under the project where our rent is paid out of project operational costs before the debt or equity in the project receives any payments.
We often invest in utility scale solar projects by owning the - 61 - land under the project where our rent is paid out of project operational costs before the debt or equity in the project receives any payments.
We seek to manage credit risk using thorough due diligence and underwriting processes, strong structural protections in our agreements with customers and continual, active asset management and portfolio monitoring.
We seek to manage credit risk using thorough due diligence and underwriting processes, strong structural protections in our loan agreements with customers and continual, active asset management and portfolio monitoring.
If interest rates rise, and our fixed - 60 - rate debt balance remains constant, we expect the fair value of our fixed rate debt to decrease and the value of any hedges on floating rate debt to increase.
If interest rates rise, and our fixed rate debt balance remains constant, we expect the fair value of our fixed rate debt to decrease and the value of our hedges, if any, on floating rate debt to increase.
Although we generally focus on renewable energy projects that have the majority of their operating cash flow supported by long-term PPAs or leases, many of our projects have shorter term contracts (which may have the potential of producing higher current returns) or sell their power, energy or environmental attributes in the open market on a merchant basis.
Although we generally focus on renewable energy projects that have the majority of their operating cash flow supported by long-term PPAs or leases, many of the projects in which we invest have shorter term contracts (which may have the potential of producing higher current returns) or sell their power, energy or environmental attributes in the open market on a merchant basis.
See also “Credit Risks” discussed above. Commodity and Environmental Attribute Price Risk When we make equity or debt investments for a renewable energy project that acts as a substitute for an underlying commodity, we may be exposed to volatility in prices for that commodity.
See also “Credit Risks” discussed above. Commodity and Environmental Attribute Price Risk When we make equity or debt investments in an energy transition project that acts as a substitute for an underlying commodity, we may be exposed to volatility in prices for that commodity.
These structural protections, which are typically in the form of a preferred return or cash sweep mechanism, are designed to allow recovery of our capital and an acceptable return over time. When structuring and underwriting these transactions, we evaluate these transactions using a variety of scenarios, including natural gas prices remaining low for an extended period of time.
These structural protections, which are typically in the form of a preferred return mechanism, are designed to allow recovery of our capital and an acceptable return over time. When structuring and underwriting these transactions, we evaluate these transactions using a variety of scenarios, including natural gas prices remaining low for an extended period of time.
We monitor the impact of interest rate changes on the market for new originations and often have the flexibility to negotiate the term of our investments to offset interest rate increases.
We monitor the impact of interest rate changes on the market for new originations and often have the flexibility to negotiate the terms of our investments to offset interest rate increases.
We are exposed to credit risk in our other projects that do not benefit from governments as the obligor such as on balance sheet financing of projects undertaken by universities, schools and hospitals, as well as privately owned commercial projects.
We are exposed to credit risk in our other projects that do not benefit from governments obligors such as on-balance sheet financing of projects undertaken by universities, schools and hospitals, as well as privately owned commercial projects.
We attempt to reduce interest rate risks and to minimize exposure to interest rate fluctuations through the use of fixed rate financing structures, when appropriate, whereby we seek to (1) match the maturities of our debt obligations with the maturities of our assets, (2) borrow at fixed rates for a period of time or (3) match the interest rates on our assets with like-kind debt (i.e., we may finance floating rate assets with floating rate debt and fixed-rate assets with fixed-rate debt), directly or through the use of interest rate swap agreements, interest rate cap agreements or other financial instruments, or through a combination of these strategies.
We attempt to reduce interest rate risks and to minimize exposure to interest rate fluctuations through the use of fixed rate financing structures, when appropriate, whereby we seek to (1) match the maturities of our debt obligations with the maturities of our assets, (2) borrow at - 60 - fixed rates for a period of time or (3) match the interest rates on our assets with like-kind debt (i.e., we may finance floating rate assets with floating rate debt and fixed-rate assets with fixed-rate debt), directly or through the use of interest rate derivatives or other financial instruments, or through a combination of these strategies.
We first evaluate the credit rating of the offtakers or counterparties to the project using an average of the external credit ratings for an obligor, if available, or an estimated internal rating based on a third-party credit scoring system.
We first evaluate the credit rating of the offtakers or counterparties involved in the project using an average of the external credit ratings for an obligor, if available, or an estimated internal rating based on a third-party credit scoring system.
As energy or environment attribute price volatility continues or as PPAs expire, the cash flows from certain of our projects are exposed to these market conditions and we work with the projects sponsors to minimize any impact as part of our on-going active asset management and portfolio monitoring.
As energy or environmental attribute price volatility continues or as PPAs expire, the cash flows from certain of our projects in which we have invested are exposed to these market conditions. We work with the projects sponsors to minimize any impact as part of our on-going active asset management and portfolio monitoring.
See Note 3 to our audited financial statements in this Form 10-K for the estimated fair value of our fixed rate long-term debt, which is based on having the same debt service requirements that could have been borrowed at the date presented, at prevailing current market interest rates.
See Note 3 to our audited financial statements in this Form 10-K for the estimated fair value of our fixed rate long-term debt, which is based on upon the terms of comparable debt that could have been borrowed at the date presented, at prevailing current market interest rates.
Through our investments in various projects, we will be exposed to the credit risk of the obligor of the project’s PPA or other long-term contractual revenue commitments, as well as to the credit risk of certain suppliers and project operators.
Through our investments in various projects, we will be exposed to the credit risk of the obligor of the project’s PPA or other long-term contractual revenue commitments, as well as to the credit risk of certain suppliers and project operators. We have invested in mezzanine loans and, as a result, we are exposed to additional credit risk.
We have invested in mezzanine loans and, as a result, we are exposed to additional credit risk. We seek to manage credit risk through thorough due diligence and underwriting processes, strong structural protections in our transaction agreements with customers and continual, active asset management and portfolio monitoring.
We seek to manage credit risk through thorough due diligence and underwriting processes, strong structural protections in our transaction agreements with customers and continual, active asset management and portfolio monitoring.
An increase in benchmark interest rates would not increase the quarterly interest expense related to our variable rate borrowings as a result of these interest rate swaps. Such hypothetical impact of interest rates on our variable rate borrowings does not consider the effect of any change in overall economic activity that could occur in a rising interest rate environment.
A 50 basis point increase in benchmark interest rates would increase the quarterly interest expense related to the $49 million in floating-rate borrowings by $61 thousand. Such hypothetical impact of interest rates on our variable rate borrowings does not consider the effect of any change in overall economic activity that could occur in a rising interest rate environment.
To the extent transmission and distribution infrastructure in geographies in which we invest is not able to accommodate additional power, additional renewable penetration from other new projects in certain geographic areas could decrease the revenues of our projects. - 61 - Environmental Risks Our business is impacted by the effects of climate change and various related regulatory responses.
To the extent transmission and distribution infrastructure in geographies in which we invest is not able to accommodate additional power, additional renewable penetration from other new projects in certain geographic areas could decrease the revenues of our projects.
Projects in which we invest, or in which we may plan to invest, may also be exposed to volatility in the prices of environmental attributes which the project may produce.
Projects in which we invest, or in which we may plan to invest, may also be exposed to volatility in the prices of environmental attributes which the project may produce, such as renewable energy credits (“RECs”) or renewable identification numbers (“RINs”).
These processes create value through active monitoring of the state of our markets, enforcement of existing contracts and asset management. As described above, we engage in a variety of interest rate management techniques that seek to mitigate the economic effect of interest rate changes on the values of, and returns on, some of our assets.
As described above, we engage in a variety of interest rate management techniques that seek to mitigate the economic effect of interest rate changes on the values of, and returns on, some of our assets.
This discussion outlines potential qualitative impacts to our business, quantitative illustrations of sensitivity as well as our strategy and resilience to these risks and opportunities. Risk Management Our ongoing active asset management and portfolio monitoring processes provide investment oversight and valuable insight into our origination, underwriting and structuring processes.
Risk Management Our ongoing active asset management and portfolio monitoring processes provide investment oversight and valuable insight into our origination, underwriting and structuring processes. These processes create value through active monitoring of the state of our markets, enforcement of existing contracts and asset management.
Removed
Our unsecured term loan is a variable rate loan with an outstanding balance of $247 million as of December 31, 2024, and our revolving credit facilities are variable rate lines of credit. We also have short-term green commercial paper borrowings outstanding of $100 million, which we may refinance through the issuance of additional paper at the then prevailing short-term rate.
Added
We have $5.1 billion of debt with either fixed rates or which we have hedged pursuant to strategies described above to hedge floating rate debt.
Removed
Increases in interest rates would result in higher interest expense while decreases in interest rates would result in lower interest expense.
Added
We have $49 million of debt with variable interest rates outstanding as of December 31, 2025, including any unhedged portions of loans under our term loan facility, revolving credit facilities and borrowings under our commercial paper program. Future increases in interest rates would result in higher interest expense while future decreases in interest rates would result in lower interest expense.
Removed
As described above, we may use various financing techniques including interest rate swap agreements, interest rate cap agreements or other financial instruments, or a combination of these strategies to mitigate the variable interest nature of these facilities, and have $618 million notional value of interest rate swaps to hedge these floating-rate borrowings.
Added
As it relates to natural event risks, when we underwrite and structure our investments, the environmental risks and opportunities are an integral consideration to our investment parameters. While we cannot fully protect our investments, we seek to mitigate these risks by using third party experts to conduct engineering and weather analysis and insurance reviews as appropriate.
Removed
We discuss the risks and opportunities associated with the impacts of climate change in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Impact of climate change on our future operations.
Removed
Once a transaction has closed we continue to monitor the environmental risks to the Portfolio. We further discuss our strategy to managing these risks in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Impact of climate change on our future operations. - 62 -

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