HASI 10-K & 10-Q changes, risk factors and insider trading

Our business and operations are subject to a number of risks and uncertainties, the occurrence of which could adversely affect our business, financial condition, consolidated results of operations and ability to make distributions to stockholders and could cause the value of our capital stock to decline. We may refer to the energy efficiency, renewable energy and the other sustainable infrastructure projects or markets in which we participate collectively as climate solutions projects or the industry. Please also refer to the sections entitled “Forward-Looking Statements” and “Risk Factor SummarySummary.”.

Many traditional sources of energy such as coal, petroleum-based fuels and natural gas can be influenced by the price of underlying or substitute commodities. Such prices, which have decreasedin the past, and may continuein tothe future, decrease, may reduce the demand for energy efficiency projects or other projects, including renewable energy facilities, that do not rely on fossil fuel energy sources. For example, low natural gas prices may reduce the demand for projects like renewable energy projects 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 theoperating projects sell on either a forward or a spot-market basis. 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. In addition, volatility in commodity prices, including energy prices, may cause building owners and other parties to be reluctant to commit to projects for which repayment is based upon a fixed monetary value for energy savings that would not decline if the price of energy declines. Any resulting decline in demand for our investments or the price that industry participants receive for the sale of fossil fuel could adversely impact our operating results.

The market for various types of climate solutions projects is emerging and rapidly evolving, leaving theirthe future success of such projects uncertain. If some or all market segments or investing techniques prove unsuitable for widespread commercial deployment or if demand for such projects or techniques fail to grow sufficiently, the demand for our capital may decline or develop more slowly than we anticipate. Many factors will influence the widespread adoption and demand for such projects and investing techniques, including general and local economic conditions, commodity prices of fossil fuel energy sources, the cost and availability of energy storage, the cost-effectiveness of various projects and techniques, performance and reliability of such technologies compared to conventional power sources and technologies, and the extent of government subsidies and regulatory developments. Any changes in the markets, products, technologies, financing techniques, or the regulatory environment could adversely impact the demand or financial performance for such projects and our investments.

There has been a nationwide increase in distributed generation which has prompted discussions among policy makers and regulators regarding ways to both better integrate distributed energy resources into the electric grid and how to compensate distributed generators. Many states have a regulatory policy known as net energy metering, or net metering. 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. 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. The ability and willingness of customers to pay for renewable energy systems that benefit from net metering rules may be reduced if net metering rules are eliminated or their benefits reduced, which may also impact our returns on such systems.

Federal, state and local government regulations and policies concerning the electric utility industry, and internal policies and regulations promulgated by electric utilities, heavily influence the market for electricity products and services. These regulations and policies often relate to electricity pricing and the interconnection of customer-owned electricity generation. In the United States, governments and utilities continuously modify these regulations and policies. These regulations and policies could deter customers from purchasing energy efficiency and renewable energy systems. For example, Federal Energy Regulatory Commission (“FERC”) conducted its owna 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. This could result in a significant reduction in the potential demand for such systems. Utilities commonly charge fees to larger, industrial customers for disconnecting from the electric grid or for having the capacity to use power from the electric grid for back-up purposes. In addition, there is an increasing trend towards initiating or increasing fixed fees for users to have electricity service from a utility. These fees could increase our customers’ cost to use energy efficiency and renewable energy systems not supplied by the utility and make them less desirable, thereby harming our business, prospects, financial condition and results of operations. In addition, any changes to government or internal utility regulations and policies that favor electric utilities could reduce competitiveness and cause a significant reduction in demand for systems in which we invest.

Our sustainability and governance strategy and practices and the level of transparency with which we are approaching them are foundational to our business and expose us to several risks. 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,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. A failurefailure, towhether real or perception of a failureperceived, to disclose metrics and set goals that are rigorous enough or in an acceptable format, aappropriately failureselect to appropriatelyand manage selection ofour goals, a failure to or perception of a failure to make appropriate disclosures, stockholder perception of a failure to prioritize the “correct” sustainability and governance goals, or an unfavorable sustainability and governance-related rating by a third party, could negatively impact our reputation and our business.

The environmental,Environmental, social, and governance (“ESG”) standards, norms, or metrics, are constantly evolving. In recent yearsyears, “anti-ESG” sentiment has gained momentum across the U.S.,United States, with several states and Congress having proposed or enacted “anti-ESG” policies, legislation, or initiatives or issued related legal opinions, and the Presidentissuance having recently issuedof an executive order opposing diversity equity and inclusion (“DEI”) initiatives in the private sector. If we do not successfully manage expectations across varied stakeholder interests, such anti-ESG and anti-DEI-related policies, legislation, initiatives, litigation, legal opinions, and scrutiny could result in us facing additional compliance obligations, becoming the subject of investigations and enforcement actions, or sustaining reputational harm.

Certain data we utilize in our CarbonCount or similar metric calculations is prepared by third parties or receives limited assurance from and/or verification by third partiesparties. andAccordingly, such metric calculations may undergo a less rigorous review process than assurance sought in connection with more traditional audits and suchany related review processprocesses may not identify errors and may notor protect us from potential liability under the securities laws. 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. 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 to be inaccurate, or alleged to be inaccurate.

We compete against a number of parties who may provide alternatives to our investments including, among others, a wide variety of financial institutions, including private equity sponsors, government entities and energy industry participants. Increasing investor acceptance of the climate solutions market has increased the level of competition we experience. We also encounter competition in the form of potential customers or our origination partners electing to use their own capital rather than engaging an outside provider such as us. Increasing investor acceptance of the climate solutions market has increased the level of competition we experience. Some of our competitors are significantly larger than we are, have access to greater capital and other resources than we do and may have other advantages over us. In addition, some of our competitors have higher risk tolerances or different risk assessments, which allow those competitors to consider a wider variety of investments and establish more relationships than we can. Further, many of our competitors are not subject to the operating constraints associated with maintenance of an exemption from the 1940 Act. These characteristics could allow our competitors to consider a wider variety of opportunities, establish more relationships and offer better pricing and more flexible structuring than we can offer. 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. The increase in the number or the size of our competitors in this market has resulted, and could continue to result, in less attractive terms on our investments or the need to accept a higher level of risks associated with our investments. As a result, competitive pressures we face could have a material adverse effect on our business, financial condition and results of operations.

Our business is influenced by and depends in part on U.S. federal, state and local government laws, regulations and policies, and changes in such laws, regulations or policies, or a decline in the level of government support could harmadversely affect our business.

The projects in which we invest typicallymay 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. Such policies may include governmental initiatives, laws and regulations designed to reduce energy usage and impact the use of renewable energy or the investment in and the use of climate solutions, including the Infrastructure Investment and Jobs Act and the Inflation Reduction Act. U.S. federal policies and incentives include, for example, tax credits, tax deductions, bonus depreciation, federal grants and loan guarantees and energy market regulations. State and local governments policies and incentives include, for example, renewable portfolio standards (“RPS”), feed-in tariffs, other tariffs, tax incentives and other cash and non-cash payments.

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 themour government customers to remain current on existing payment obligations or undesirable to enter into new energy efficiency improvement projects. 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. Moreover, other changes in resources available to governments may also impact their willingness to undertake energy efficiency projects. For example, an increase in money set aside for government expenditures for energy efficiency projects may reduce demand for our investments.

With respect to the projects in which we invest, prior increases in interest rates,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. Decreases in interest rates, in general, may over time cause: (1i) project owners to be more interested in borrowing or raising equity thus increaseincreasing the demand for our assets; (2ii) prepayments and refinancings on our assets, to the extent allowed, to increase; (3iii) the interest expense associated with the project’s borrowings to decrease; (4iv) the market value of the project’s fixed rate or fixed return assets to increase; and (5v) the market value of any fixed-rate interest rate swap agreements to decrease. Adverse developments resulting from changes in interest rates could have a material adverse effect on our business, financial condition and results of operations.

A decline in the fair market value of any asset we carry at fair value, may require us to reduce the value of such assets under GAAP. In addition, our other financial assets are subject to an impairment assessment that could result in adjustments to their carrying values. 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.

These estimates, judgments and assumptions are inherently uncertain, and, if they prove to be wrong, then we face the risk that charges to income will be required. Any charges could significantly harm our business, financial condition, results of operations and the price of our securities. 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. The determination of our provision for loan losses requires us to make certain estimates and judgments, which may be difficult to determine. Our estimates and judgments are based on a number of factors and may not be correct. If our estimates or judgments are incorrect, our results of operations and financial condition could be adversely impacted. 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 our provision of loan losses.

Our investments are subject to risks of delinquency, foreclosure and loss. In many cases, the ability of a borrower to return our invested capital and our expected return is dependent primarily upon the successful development, construction and operation of the underlying project. If the cash flow of the project is reduced, the borrower’s ability to return our capital and our expected return may be impaired. We make certain estimates regarding project cash flows or savings during the underwriting of our investment. These estimates may not prove accurate, as actual results may vary from estimates. 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-takerofftaker 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.

SomePart 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. Part of our strategy is to participate with other institutional investors or the project’s sponsor on various climate solutions transactions. These arrangements are driven by the magnitude of capital required to complete acquisitions and the development of climate solutions projects and other industry-wide trends that we believe will continue. Such arrangements involve risks not present where a third party is not involved, including the possibility that partners or co-venturers might become bankrupt or otherwise fail to fund their share of required capital contributions. Additionally, partners or co-venturers might at any time have economic or other business interests or goals different from ours. These investments generally provide for a reduced level of control over an acquired project because governance rights are shared with others. Accordingly, project decisions relating to the management, operation and the timing and nature of any exit, are often made by a majority vote of the investors or by separate agreements that are reached with respect to individual decisions. In addition, project operations may be subject to the risk that the project owners may make business, financial or management choices with which we do not agree or the management of the project may take risks or otherwise act in a manner that does not serve our interests, including not making distributions. 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.suffer.

Many of the projects in which we invest rely on revenue or repayment from contractual commitments of end-customers, including federal, state, or local governments for energy efficiency projectsprojects, or utilities or other customers under PPAs. 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 thetheir businessrespective businesses could have a material adverse impact on the financial strength of such end-customer, such as the effect of wildfires on thecertain California utilities. 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. Some projects rely on one customer for their revenue and thus the project could be materially and adversely affected by any material change in the financial condition of that customer. While there may be alternative customers for such a project, there can be no assurance that a new contract on the same terms will be able to be negotiated for the project.

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 itstermination termination.of the relevant contract. In the event that any of these events were to occur, our business, financial condition, and results of operations could suffer as a result.suffer.

Where we make loans to or own equity interests in special purposes entities such as those that lease solar energy systems to residential customers, those special purpose entities often enter into various contractual arrangements with, or receive performance guarantees from the affiliate project sponsor to ensure satisfactory equipment or other project performance over the term of the lease or power purchase agreement. 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. WeWhile seekwe to mitigate these credit risks by employingemploy a comprehensive review and asset selection processprocess, and carefulcarefully monitor acquired assets on an ongoing monitoring of acquired assets. Nevertheless,basis, unanticipated credit losses could occur which could adversely impact our operating results. During periods of economic downturn in the global economy, the solvency and financial wherewithal of counterparties with whom we do business could be impacted andthereby increasing our exposure to credit risks from obligors increases,obligors, and our efforts to monitor and mitigate the associated risks may not be effective in reducing our credit risks.effective. 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 addition, the insolvency of one or more of our, or one of our climate solutions projects’, counterparties could reduce the amount of financing available to us, which would make it more difficult for us to leverage the value of our assets and obtain substitute financing on attractive terms or at all. A material reduction in our financing sources or an adverse change in the terms of our financings could have a material adverse effect on our financial condition and results of operations. Certain participants in the sustainable energy industry have experienced significant declines in the value of their equity and difficulty in raising or refinancing debt, which increases the credit risk to these companies and they may not be able to fulfill their obligations which could adversely impact our operating results.

The future success of our assets will depend, in part, on theirthe ability of such assets to maintain satisfactory interconnection agreements. If the interconnection or transmission agreement of a project is terminated for any reason, theythe project may not be able to replace it with an interconnection and transmission arrangement on terms as favorable as the existingterminated arrangement, or at all, or theythe project may experience significant delays or costs in connection with securing a replacement. If a network to which one or more of the projects is connected experiences equipment or operational problems or other forms of “down time,” the affected project may lose revenue and be exposed to non-performance penalties and claims from its customers. These may include claims for damages incurred by customers, such as the additional cost of acquiring alternative electricity supply at then-current spot market rates. The owners of the network will not usually compensate electricity generators for lost income due to down time. In addition, our projects may be exposed to a locational basis risk resulting from a difference between where the power is generated and the contracted delivery point. These factors could materially affect these projects, which could negatively affect our business, results of operations, financial condition, and cash flow.

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,outputs (such as electricity in the case of a renewable energy project.project).

The ongoing operation of the projects in which we invest involves risks that include construction delays, the breakdown or failure of equipment or processes or performance below expected levels of output or efficiency due to wear and tear, the impact of inflation, latent defect, design error or operator error or force majeure events, among other things. 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 issue,issues, or other catastrophic events are inherent risks in the construction and operation of a project. These and other hazards can cause significant personal injury or loss of life, severe damage to and destruction of property, plant and equipment and contamination of, or damage to, the environment and suspension of operations. Operation of a project also involves risks that the operator will be unable to transport its product to its customers in an efficient manner due to a lack of transmission capacity. Unplanned outages of projects, including extensions of scheduled outages due to mechanical failures or other problems, occur from time to time and are an inherent risk of the business. Unplanned outages typically increase operation and maintenance expenses and may reduce revenues as a result of selling less electricity or require the project to incur significant costs as a result of obtaining replacement power from third parties in the open market to satisfy forward power sales obligations. 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. 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.

We have indirectly, through equity method investments and securitization trust structures, invested in land leased to renewable energy projects in specific regions. Our returns and cash flow from such investments are dependent on favorable leasing terms and tenant stability, and are vulnerable to factors such as lease performance, market value fluctuations, natural disasters,disasters and tenants’ financial health. Tenants experiencing project downturns, increased costs, or insolvencies could lead to significant losses. If tenants terminate or do not renew leases, we may not be able to re-lease the land with favorable leases or sell the land at prices that allow us to recover our investment or achieve our desired investment returns. Tenant bankruptcy could limit claims against unpaid rent, leading to operational losses. Concentration of projects in certain states exposes us to potential adverse political or regulatory changes or to potential natural disasters, impacting property values and leasing capabilities.

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.

Under various U.S. federal, state and local laws, an owner or operator of real estate or a project may become liable for the costs of removal of certain hazardous substances released from the project or any underlying real property. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of such hazardous substances. We acquire real property rights, make investments in projects that own real property, have collateral consisting of real property and in the course of our business, we may take title to a project or its underlying real estate assets relating to one of our debt financings. In these cases, we could be subject to environmental liabilities with respect to these assets.

The presence of hazardous substances may adversely affect our, or another owner’s,our ability to sell a contaminated project or borrow using the project as collateral. To the extent that we, or another project owner,we become liable for the removal costs, our investment, or the abilityresults of theoperation ownerand tofinancial make payments to us,condition may be negativelyadversely impacted.affected.

Our charter and bylaws contain provisions that could delay or prevent a change in control of our company.Company. 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. These provisions include:

•establishing advance notice provisions for stockholder proposals and nominations for elections to our Board to be acted upon at meetings of stockholders;

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 (i1) any derivative action or proceeding brought on behalf of us, (ii2) 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, (iii3) 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 (iv4) any action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware. 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.

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. Prior to terminating our REIT election, our qualification as a REIT depended upon our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. We structured our activities in a manner designed to satisfy all the requirements to qualify as a REIT. However, the REIT qualification requirements are extremely complex and interpretation of the U.S. federal income tax laws governing qualification as a REIT is limited. Furthermore, any opinion of our counsel, regarding qualification as a REIT is not binding on the Internal Revenue Service (the “IRS”). Satisfying the asset tests depended on our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination. Furthermore, during the period that we elected to be taxed as a REIT, we invested in certain assets that we believed were qualifying assets for purposes of the REIT assets tests, such as mezzanine loans meeting certain requirements and commercial property assessed clean energy assets, and no assurance can be provided that the IRS would agree with such characterizations. Accordingly, if certain of our operations were to be recharacterized by the IRS, such recharacterization could jeopardize our ability to have satisfied all requirements for qualification as a REIT for prior taxable years. Furthermore, future legislative, judicial or administrative changes to the U.S. federal income tax laws could be applied retroactively, which could result in our disqualification as a REIT for prior taxable years.

A corporation’s ability to deduct its federal NOL carryforwards and to utilize certain other available tax attributes can be substantially constrained under the general annual limitation rules of Section 382 of the Code (“Section 382”) if it undergoes an “ownership change” as defined in Section 382 (generally where cumulative stock ownership changes among material stockholders exceed 50% during a rolling three-year period). An ownership change may severely limit or effectively eliminate our ability to utilize our NOL carryforwards and other tax attributes. In October 2023, our Board adopted a tax benefits preservation plan (the “Tax Benefits Preservation Plan”) in order to preserve our ability to use our NOLs and certain other tax attributes to reduce potential future income tax obligations. 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.charter, Our charterwhich 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 Charter Tax Benefit Provisions generally restrict any person or entity from attempting to transfer any of our stock to the extent that transfer would, if effected and subject to certain exceptions, (i) result in an individual, entity, firm, corporation, estate, trust or other person or group of persons described in the Charter Tax Benefit Provisions as a “Person” owning 4.8% or more of our common stock (which the Charter Tax Benefit Provisions refer to as a “Prohibited Ownership Percentage”) or (ii) increase the ownership percentage of any Person that has a Prohibited Ownership Percentage, subject to certain exceptions. The Charter Tax Benefit Provisions provide that any transfer that violates the Charter Tax Benefit Provisions shall be null and void ab initio and shall not be effective to transfer any record, legal, beneficial or any other ownership of the number of shares which result in the violation of the Charter Tax Benefit Provisions.

Our overall success in international markets will depend, in part, on our ability to succeed in different legal, regulatory, economic, social and political conditions. 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 ourany future international projects, reduce our international income or increase our costs, thus adversely affecting our business, financial condition and operating results.

The U.S. federal government, the Federal Reserve Board of Governors, the U.S. Treasury, the SEC, U.S. 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. 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. The far-ranging governmentGovernment intervention in the economic and financial systemsystem, such as new or increased tariffs, may carry unintended consequences and cause market distortions. We are unable to predict at this time the extent and nature of such unintended consequences and market distortions, if any. The inability to evaluate the potential impacts could have a material adverse effect on the operations of our business.

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. SW7-34-11, Companies Engaged in the Business of Acquiring Mortgages and Mortgage-Related Instruments) pursuant to which it is reviewing the scope of the exemption from registration under Section 3(c)(5)(C) of the 1940 Act. While the SEC has yet to provide additional information on its position relating to these exemptions and timing of any future changes to the exemptions remain unknown, anyAny additional guidance from the SEC or its staff from this process or in other circumstances could provide additional flexibility to us, or it could further inhibit our ability to pursue the strategies we have chosen. If we or our subsidiaries fail to maintain an exemption from the 1940 Act, we could, among other things, be required either to (1) change the manner in which we conduct our operations to avoid being required to register as an investment company, (2) effect sales of our assets in a manner that, or at a time when, we would not otherwise choose to do so or (3) register as an investment company, any of which could negatively affect our business, our ability to make distributions, our financing strategy and the market price for shares of our common stock.

If the market value or income potential of our assets changes as a result of changes in interest rates, general market conditions, government actions or other factors, we may need to adjust the portfolio mix of our real estate assets and income or liquidate our non-qualifying assets to maintain our exemption from the 1940 Act. 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 may own. We may have to make decisions that we otherwise would not make absent 1940 Act considerations.

We use debt to finance our assets, including credit facilities, recourse and non-recourse debt, securitizations, and syndications. Changes in the financial markets and the economy generally could adversely affect one or more of our lenders or potential lenders and could cause one or more of our lenders, potential lenders or institutional investors to be unwilling or unable to provide us with financing or participate in securitizations or could increase the costs of that financing or securitization. Some of our borrowings will have a remaining balance when they come due.due Ifand if we are unable to repay or refinance the remaining balance of thissuch 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. The return on our assets and cash available for distribution to our stockholders may be reduced to the extent that market conditions prevent us from leveraging our assets or increase the cost of our financing relative to the income that can be derived from the assets acquired. Increases in our financing costs will reduce cash available for distributions to stockholders. We may not be able to meet our financing obligations and, to the extent that we cannot, we risk the loss of some or all of our assets to liquidation or sale to satisfy the obligations.

As some of our borrowings will have a remaining balance at maturity, we may be required to enter into new borrowings at higher rates or to sell certain of our assets to repay the loan. Our credit facilities have rates that adjust on a frequent basis based on prevailing short-term interest rates. Increases in interest rates, or a flattening or inversion of the yield curve, reduce the spread between the returns on our assets which are typically priced using longer-term interest rates and the cost of any new borrowings or borrowings where the interest rate adjusts to market rates or is based on shorter-term rates. ThisAny 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. If we are not able to renew our then existing facilities or arrange for new financing on terms acceptable to us, or if we default on our covenants or are otherwise unable to access funds under any of these facilities, we may have to curtail entering into new transactions and/or dispose of assets. We will face these risks given that a number of our borrowings have a shorter duration than the assets they finance.

We typically retain the residual value associated with a securitization. We have also established special purpose entities through which we hold only a partial or subordinate interest or a residual value after taking into account our non-recourse debt facilities or a right to participate in the profits of such entity once it achieves a predefined threshold. 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. In addition, the inability to securitize our Portfolio or assets within our Portfolio could hurtadversely affect our performance and our ability to grow our business.

Certain of our existing credit facilities and debt contain, and any future financing facilities may contain, various affirmative and negative covenants, including maintenance of an interest coverage ratio and limitations on the incurrence of liens and indebtedness, investments, fundamental organizational changes, dispositions, changes in the nature of business, transactions with affiliates, use of proceeds and stock repurchases. 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.Resources”.

Our non-recourse debt limits our ability to take action with regard to the assets pledged as security for the debt. These restrictions, as well as any other covenants contained in any future financings, may interfere with our ability to obtain financing, or to engage in other business activities, which may significantly limit or harm our business, financial condition, liquidity and results of operations. Certain financing agreements also contain cross-default provisions, sosuch that if a default occurs under any one agreement, the lenders under ourcertain 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. 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 willwould also significantly limit our financing alternatives such that we willwould be unable to pursue our leverage strategy, which could curtail the returns on our assets.

In addition, certain of our financing arrangementsagreements 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. These provisions may limit our ability to obtain distributions from the underlying assets and could impact our cash flow and expected returns.

Even though most swaps are cleared through a central counterparty clearinghouse, certain transactions could be executed bilaterally with a counterparty. While we have the ability to require counterparties to post, to the extent we have not obtained sufficient collateral, we would remain exposed to our counterparty’s ability to perform on its obligations under each hedge and cannot look to the creditworthiness of a central counterparty for performance. 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. 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. In such case, we could be forced to cover our unhedged liabilities at the then current market price. We may also be at risk for any collateral we have pledged to secure our obligations under the hedge if the counterparty becomes insolvent or files for bankruptcy.

Moreover, the projects in which we invest,invest may enter into various forms of hedging including interest rate and power price hedging. To the extent they enter into such hedges, the financial results of the project will be exposed to similar risks as described above which could adversely impact our results of operations. Further, the hedges entered into by us or the projects in which we invest may not be effective which could adversely impact our economics.

We,We or our projects,projects may choose not to pursue, or fail to qualify for, hedge accounting treatment relating to derivative and hedging transactions. We, or our projects, may fail to qualify for hedge accounting treatmenttransactions for a number of reasons, including if we,we or our projects,projects (1) use instruments that do not meet the Accounting Standards Codification (“ASC”) Topic 815 definition of a derivative, we, or our projects,(2) fail to satisfy ASC Topic 815 hedge documentation and hedge effectiveness assessment requirements or (3) the hedge relationship is not highly effective. If we,we or our projects,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,we or our projects,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.

As a REIT, we were generally required, among other things, to distribute annually at least 90% of our REIT taxable income (without regard to the deduction for dividends paid and excluding net capital gains) each year for us to have qualified as, and to have maintained our qualification as a REIT. Effective January 1, 2024, we revoked our REIT election and startingsince in 2024then we werehave been taxed as a C corporation,corporation. and asAs a result, in 2024 and going forward, we wereare no longer subject to thisthe REIT distribution requirement. However,While our current policy is to pay quarterly distributions, though the timing, declaration, amount and payment of any dividends will beis 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. 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 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.

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 --7. Management’s Discussion and Analysis of Financial Condition and Results of Operations’Operations” on our Form 10-K for the year ended December 31, 20232024 for a discussion of our results for the year ended December 31, 20232024 and a comparison of our results of operations for the fiscal years ended December 31, 20232024 and December 31, 2022.2023.

We are an investor in sustainable infrastructure assets advancing the energy transition. With more than $13$16 billion in managed assets, our investment strategy is focused primarily on long-lived real assets that are supported bygenerate long-term recurring cash flows. InWe additiongenerate torecurring income from net investment income from our portfolio, wefrom alsoincome generatethrough gains-on-saleour fromresidual ownership in securitization transactions,and asco-investment wellstructures, as on-going feesand from asset management and other services. We also generate income through gain-on-sale securitization transactions, broker/dealer and other services.

We are internally managed by an executive team that has extensive relevant industry knowledge and experience, and have a team of over 150170 clean energyfull-time investment, operating, and technical professionals. We have long-standing relationships with the leading U.S. clean energy project developers, owners and operators, utilities, and ESCOS,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 $2.3$4.3 billion of transactions during both 20242025 and 2023.$2.3 billion in 2024. As of December 31, 2024,2025, our managed assets total approximately $13.7$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. As of December 31, 2024,2025, we held approximately $6.6$7.6 billion of assets in our Portfolio, and we also managed approximately $7.1$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.

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 lastpast 2520 years, U.S. electricity demand has been essentially flat at approximately 4,000 TWh per year, according to the U.S. Energy Information Administration (the “EIA”), due largely to the impact of successful energy efficiency and conservation initiatives. MoreAccording recently,to however,the EIA, electricity generation by the U.S. electric power sector increased by 2.5% in 2025, and is expected to increase by 1% in 2026 and 3% in 2027. 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.

•Domestic manufacturing. 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 (a1) reduce supply chain vulnerabilities exposed by the Covid-19 pandemic, (b2) address a growing consumer segment in favor of "“Made in the USA” products, and (c3) overcomingovercome 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. 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. Census Bureau, in 2024,2025, U.S. spending on construction of manufacturing facilities surpassed $230an annualized rate of $200 billion, up from approximately $75 billion in 2020. This rise in spending on domestic manufacturing is expected to create a minimum of 250 million square feet of new manufacturing space and 210,000 manufacturing jobs by 2030, according to NewMark. This growth in domestic manufacturing is estimated to drive an increase in U.S. electricity demand of more than 100 TWh by 2030, according to Rystad Energy.

•The “electrification of everything.” Further driving U.S. load growth higher is the broader trend of electrification expanding to more products and processes that had previously been powered by fossil fuels like diesel, oil, and natural gas. One of the most prominent of these trends is the electrification of on-road transportation. With sales of new light-duty electric vehicles in the United States growingtotaling 7% to more thanapproximately 1.3 million in 2024,2025, representing more than 8% of total new car sales, according to the National Automobile Dealers Association, there were more than 4.87 million light-duty battery electric vehicles registered in the United States at the end of 2023,2025, based on U.S.Energy DepartmentElectric ofInstitute Energyand Cox Automotive data, up from less than 100,000 in 2012. With electric vehicles on U.S. roads expected to grow to moreapproximately than 7853 million by 2035, representing 26% of all passenger vehicles on the road, according to EdisonBloomberg New Energy Institute’sFinance’s OctoberJune 20242025 forecast, it is estimated that electric vehicle charging alone could increase annual U.S. electricity demand by more than 300175 TWh by 2035. In addition, electrification has taken hold across a number of other sectors of the U.S. economy, including space heating–underscored by annual sales of heat pumps surpassing sales of gas furnaces since 2022–as well as the electrification of industrial processes, including greater adoption of electric furnaces and electric boilers, among other processes and products, which we believe will drive U.S. electricity demand even higher.

The second important trend affecting our market and demand for assets we invest in is heightened concern and focus on inflation, and in turn, the desire to supply the expected U.S. load growth over the next decade with the lowest cost and least inflationary sources of electricity. From 2021 to 2023, the United States economy, along with many other economies across the globe, suffered from the first inflation shock in multiple decades. This has led to heightened sensitivity to prices among consumers and businesses, which we believe will lead to extensive effort by businesses and policymakers to minimize inflation in energy prices. We believe this will lead not only to an “all of the above” energy strategy that does not limit any potential sources of energy, but emphasizes a widespread supply of energy from as many sources as possible, with a prioritization of the lowest cost sources of energy. 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.

The third trend is the recognition of the real and growing financial cost of climate change. According to the Pew Research Center, 54%51% of U.S. adults in 20222025 described climate change as a major threat to the country’s well-being, up from 44%40% in 2010,2013, while approximately two-thirds64% of US. adults in 20232024 said renewable energy development should be prioritized over expanding oil, gas, and coal production. Further, we believe the substantial increase over the last several years in both the magnitude and frequency of environmental disasters linked to climate change will lead to greater appreciation not only of the broader impacts of climate change but also the very real financial costs it is incurring as well. According to the National Oceanic and Atmospheric Administration (“NOAA”), the year 20242025 was the third warmest year on record, while the ten warmest years since 1850 have occurred in the last decade. InAccording 2024,to ClimateCentral, a policy-neutral 501(c)(3) nonprofit, in 2025 there were 2723 confirmed climate disaster events in the United States with losses exceeding $1 billion that in aggregate accounted for total damage of approximately $183$115 billion,billion. accordingOver the period from 2016 to National2025, Centersthere forhave Environmentalbeen Information,over including Hurricane Helene at a cost of approximately $79 billion and Hurricane Milton at approximately $34 billion. This compares to 28 climate disaster events in the United States with losses exceeding $1 billion in 2023 representing an aggregate cost of approximately $95 billion, and 2010 with 7200 such climate disaster events with aggregate lossescosts exceedingof $20$1.5 billion. More recently, the wildfires in Los Angeles County in January 2025 have resulted in damage that are expected exceed $250 billion, according to AccuWeather, which would make it the costliest natural disaster in U.S. history, surpassing Hurricane Katrina in 2005.trillion. It has become clear that climate change is not merely a concern for environmentalists but a real and growing threat to communities across the United States (and globe) that is resulting in substantial and growing financial cost to society. We believe the persistence and possibility of intensification of these events will not only result in even greater recognition of the threat of climate change but a growing appreciation for clean energy and other climate solutions and in turn an increase in the types of sustainable infrastructure investment opportunities that are the focus of HASI'sHASI’s business model.

Finally, thisthe 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,grid. whileSimultaneously, greater geopolitical conflict and uncertainty along with volatility in fossil fuel prices is leading to growing prioritization of national energy security. We believe renewable energy and storage provide important solutions to both of these issues. Distributed energy resources, particularly rooftop solar,solar and battery storagestorage, improve grid resilience, while lowering dependence and utilization of transmission and distribution infrastructure. 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 State.States. As a result, we believe the growing focus on grid reliability and resilience, as well as national energy independence and security, are supportive of growth in clean energy demand in general, and in sustainable infrastructure assets.

Separately,In addition to the impact of these long-term trends on the U.S. economy and energy markets, shorter-term movements in both interest rates and energy prices can also impact how we operate and manage our business. Interest rates were volatile in 2024,particular andcan areimpact expectednot toonly continuethe toreturns bewe volatilegenerate intoon 2025.our investments, but also our cost of funding. 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 2024,2024 and 2025, as inflationary pressures eased, the Board of Governors lowered rates threesix times for an overall decrease of 1.00%.1.75%. See “Item 7A. Quantitative and Qualitative Disclosures about Market Risk-InterestRisk—Interest Rate and Borrowing Risks” for an analysis of the impact of rates on our business. To date, inflationary pressures have not had a material impact on our business.

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.

The size and mix of our Portfolio will be a key driver of revenue. Generally, as the size of our Portfolio on our balance sheet grows the amount of our revenue will increase. Our Portfolio may grow at an uneven pace as opportunities to originate new assets may be irregularly timed, and the timing and extent of our success in such originations cannot be predicted. To the extent the size of our Portfolio changes due to equity method investment activity, the income or loss from such investments will not be included in revenue but are reflected as income (loss) from equity method investments in our income statement and will vary over time. 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 investmentsdebt securities or fee income as described below. The level of portfolio activity will fluctuate from period to period based upon the market demand for the capital we provide, our view of economic fundamentals including interest rates, the present mix of our Portfolio, our ability to identify new opportunities that meet our investment criteria, the volume of projects that have advanced to stages where we believe a transaction is appropriate, seasonality in our activities and in the various projects where we may provide debt or equity and our ability to consummate the identified opportunities, including as a result of our available capital. The level of our new origination activity, the percentage of the originations that we choose to retain on our balance sheet and the related income, will directly impact our interest and rental revenue and income from equity method investments.

Income from Securitization, SyndicationManagement and Origination Fees, and Other Services

We earn gain on sale of assets or fee income by securitizing or selling all or a portion of certain transactions. 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. In many cases, we arrange the securitization of the loan or other asset prior to originating the transaction and thus avoid exposure to credit spread and interest rate risks. In these cases, we avoid funding risks for these financings or other assets given that our securitization partners contractually agree to fund such assets before the origination transaction is completed. We view the revenue from such activities as a valuable component of our earnings and an important source of franchise value.

The total amount of income from securitizations, syndications,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.

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. In the case of various renewable energy and other sustainable infrastructure 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 are also exposed to credit risk in our other projects that do not benefit from governments as the obligor such as on balanceon-balance sheet financing of projects undertaken by universities, schools and hospitals, as well as privately owned commercial projects. We have extended mezzanine loans to various special purpose entities which own residential or community solar projects, and the ultimate repayment of those loans is dependent on the creditworthiness of the related residential obligors. As a result of investing in these and other mezzanine loans, we are exposed to additional credit risk. In certain instances, interest is paid on our mezzanine loans in-kind, which increases our outstanding loan balances and causes the ultimate repayment of cash to occur later. While we do not anticipate facing significant credit risk in our assets related to government energy efficiency projects, we are subject to varying degrees of credit risk in these projects in relation to payment guarantees provided by ESCOs that are required in the event that certain energy savings are not realized by the customer.

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. 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. 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.

Interest rate risk is highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control. 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. We have entered into interest rate derivatives to hedge a portion of the risk associated with our floating rate borrowings. See “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” for further information on interest rates risks and liquidity.

When we make investments in a project that is exposed to commodity prices, we may also be exposed to volatility in those prices. For example, the performance of renewable energy projects that produce electricity can be impacted by volatility in the market prices of various forms of energy, including electricity, coal and natural gas. This is especially true for utility scale projects that sell power on a wholesale basis suchand as many of our Grid-Connected projects as opposed tofor Behind-the-Meter projects whichthat compete against the retail or delivered costs of electricityelectricity, which includes the cost of transmitting and distributing the electricity to the end user. See “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” for further information on the impact of commodity prices.

We make investments in renewableenergy energytransition projects that typicallymay dependbenefit in part onfrom various federal, state or local governmental policies that support or enhance the project’s economic feasibility. Such policies may include governmental initiatives, laws and regulations designed to reduce energy usage and impact the use of renewable energy or the investment in, and the use of, climate solutions. Policies and incentives provided by the U.S. federal government may include tax credits, tax deductions, bonus depreciation, federal grants and loan guarantees, and energy market regulations. The value of tax credits, deductions and incentives and how they can be realized may be impacted by changes in tax laws, rates, or regulations.

Commercial entities, developers of climatesustainable solutionsinfrastructure 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. 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 account for our investment in entities that are considered voting or variable interest entities under ASC 810, Consolidation. We perform an ongoing assessment as to whether each entryentity 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. If we would conclude that certain of these entities should be consolidated, we would include the entities’ assets, liabilities and related activity in our financial statements, along with non-controlling interests related to the ownership of the other equity holders. Refer to discussion below relating to additional consolidation considerations related to the securitization of receivables. We further discuss our process for evaluating these judgments in Note 2 to our audited financial statements in this Form 10-K.

We have established various special purpose entities or securitization trusts for the purpose of securitizing certain receivables or other debt investments. We make judgments, based in part,part on supporting legal opinions, onas 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 we would conclude that certain of these special purpose entities or securitization trusts should be consolidated, we would include the assets and liabilities of the entity and their related activity in our financial statements. If sale accounting is not met in these transactions, it would be treated as a secured borrowing rather than a sale in our financial statements, which would result in reduced revenue in the period in which an asset contributed to the trust and an increase in assets and non-recourse debt. We further discuss our process for evaluating these judgments in Note 2 to our audited financial statements in this Form 10-K. We also make assumptions regarding the fair value of our securitization assets in these transferred assets. If our determination of fair value is determined to be incorrect, our gain on sale of receivables and investmentsdebt securities in our income statement and retained interests in securitization assetstrusts 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.

We completed approximately $2.3$4.3 billion of transactions during both 20242025 and 2023.$2.3 billion in 2024. Our strategy includes holding a large portion of these transactions on our balance sheet. We refer to the transactions we hold on our balance sheet as of a given date as our “Portfolio”. Our Portfolio was approximately $6.6$7.6 billion as of December 31, 20242025 and $6.2$6.6 billion December 31, 2023.2024.

Our Portfolio totaled approximately $6.6$7.6 billion as of December 31, 2024,2025, and included approximately $3.1$3.9 billion of BTM assets, approximately $2.6 billion of GC assets, and approximately $0.9$1.1 billion of FTN assets. Approximately 52% of our Portfolio consisted of unconsolidated equity investments in renewable energy related projects. Approximately 46%39% consisted of commercialfixed-rate receivables and governmentdebt receivablessecurities, onapproximately our7% balanceconsisted sheet,of floating-rate receivables, and the remainder2% of our Portfolio was real estate leased to renewable energy projects under long-term operating lease agreements. Our Portfolio consisted of over 550700 transactions with an average size of $11$10 million and the weighted average remaining life of our Portfolio (excluding match-funded transactions) of approximately 16 years as of December 31, 2024.2025. Our Portfolio consisted of the following asset classes as of December 31, 2025:

The table below presents, for the receivables, debt investmentssecurities, 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.

(1) Excludes any loss on debt modification or extinguishment included in interest expense in our income statement.

The following table provides a summary of our anticipated principal repayments for our receivables and investmentsdebt securities as of December 31, 20242025:

•the anticipated maturity dates of our receivables and investmentsdebt securities and the weighted average yield for each range of maturities as of December 31, 2024,2025;

•the term of our leases and a schedule of our future minimum rental income under our land lease agreements as of December 31, 2024,2025;

•the Performance Ratings of our Portfolio,Portfolio; and

For information on our securitizationretained assetsinterests relating to ourin securitization trusts, see Note 5 to our audited financial statements in this Form 10-K. The securitizationThese assets do not have a contractual maturity date and the underlying securitized assets have contractual maturity dates until 2065.

•Net income increaseddecreased by approximately $53$15 million. Increases in total revenue of $17 million as a result of a $107 million increase inand income from equity method investments andof a $64$53 million increase in total revenue, partiallywere offset by a $79 million increase inincreased total expenseexpenses andof a$70 $39million, million increase inwhile income tax expense.expense increased by $15 million. These results do not include the Non-GAAP earnings adjustment related to equity method investments, which is discussed in the Non-GAAP Financial Measures section.

•Interest income and securitizationrental assetincome income increased by $63$20 million due to a larger receivable and debt securities portfolio and a largerhigher securitizationaverage assetsinterest balance.rate Rental income decreased as a result of the deconsolidation of certain special purpose entities which held such land assets as a result of amendments to terms of the non-recourse debt held byon those special purpose entities.assets. See the table above for information on our average receivables, investment,debt securities, and landreal estate balance and average yield on those assets. Gain on sale of assets increaseddecreased by $12$15 million primarily due to a largersmaller volume of assets being securitized. OtherManagement fees and retained interest income increased by $8 million primarily due to increased fee-generating managed assets. Origination fee and other income increased by $4 million due to fees earned from assetoriginating managementassets activities,on including $5 millionbehalf of feesco-investments earnedstructures related to our temporary role as service provider to special purpose vehicles in whichthat we have invested that were previously sponsored by SunPower Corporation. In 2025, these services will be provided by an equity method investee we have formed with the replacement investor in those special purpose vehicles.manage.

•Interest expense for the year increased by approximately $71$50 million due to a higher average rate on a higher average debt balance. See the table above for detail on our average debt rate and average debt balance. Provision for loss on receivables decreasedincreased by $11 million compared to the prior period asdriven aprimarily resultby of the release of certain loan specificloan-specific reserves dueon toexisting theportfolio contributionsassets ofas loanswell to a co-investment structure and non-recurring prepayments, offset partially by provision onas new loans and loan commitments.commitments made during the period.

•Compensation and benefits increased by $17$11 million as a result of an increase in our employee headcount and compensation. General and administrative increaseddecreased by $2 million dueas tolegal additional investment in corporate infrastructure. Included in compensation and benefits and general and administrative expenses for 2024 are $6 million of costsfees related to our temporary role as service providerconversion to speciala purposeDelaware vehiclescorporation in which we have invested previously sponsored by SunPower Corporation. In 2025, these services will be provided by an equity method investee we have formed with the replacementprior investoryear indid thosenot special purpose vehicles.recur.

•Income from equity method investments increased by $107$53 million, primarily due to allocations of income in the current period related to tax credits allocated to ourother investors related toin a grid-connected utility-scale solar project,project in which we have invested, as those tax credits reduced the tax equity investors ongoing claim on the net assets of the project. These income allocations were partially offset by a loss we were allocated from an investee due to their sale of a project back to the project sponsor as discussed in Note 6 to our audited financial statements.

•Income tax expense increased by $39$15 million primarily duedriven by a remeasurement of state deferred taxes and adjustments related to an increasechanges in ourestimates pre-taxmade bookin income.calculating the Company’s income tax expense.

We consider the following non-GAAP financial measures useful to investors as key supplemental measures of our performance: (1) adjustedAdjusted earnings,Earnings, (2) adjustedAdjusted netRecurring investmentNet income,Investment Income, (3) managedManaged assets,Assets, and (4) adjustedAdjusted cashCash from operationsOperations plus otherOther portfolioPortfolio collections.Collections. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss as measures of our operating performance. These non-GAAP financial measures, as calculated by us, may not be comparable to similarly named financial measures as reported by other companies that do not define such terms exactly as we define such terms.

We calculate adjustedAdjusted earningsEarnings as GAAP net income (loss) excluding non-cashequity-based equity compensation expense,expenses, 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. We also make an adjustment to eliminate our portion of fees we earn from related-party co-investment structures, and for our equity method investments in the renewable energy projects as described below. We will use judgment in determining when we will reflect the losses on receivables in our adjustedAdjusted earningsEarnings, and will consider certain circumstances such as the time period in default, sufficiency of collateral as well as the outcomes of any related litigation. In the future, adjustedAdjusted earningsEarnings 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.

We believe a non-GAAP measure, such as adjustedAdjusted earnings,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 performanceperformance, including as it relates to expected dividend payments over time. Additionally, we believe that our investors also use adjustedAdjusted earnings,Earnings, or a comparable supplemental performance measure, to evaluate and compare our performance to that of our peers, and as such, we believe that the disclosure of adjustedAdjusted earningsEarnings is useful to our investors.

Certain of our equity method investments in renewable energy and energy efficiency projects are structured using typical partnership “flip” structures where the investors with cash distribution preferences receive a pre-negotiated return consisting of priority distributions from the project cash flows, in many cases, along with tax attributes. Tax equity investors typically realize a large portion of their return through an allocation of the majority of tax attributes, such as tax depreciation and tax credits, as such credits are realized by the project. Once this preferred return is achieved, the partnership “flips” and the common equity investor, often the operator or sponsor of the project, receives more of the cash flows through its equity interests while the previously preferred investors retain an ongoing residual interest. We have made investments in both the preferred and common equity of these structures. Regardless of the nature ofGiven our equity interest,method weinvestments are in project companies, they typically have a finite expected life. We typically negotiate the purchase prices of our equity investments, which have a finite expected life,investments based on our underwritten project cash flows discounted back to thea 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 use a similar approach in the underwriting of our receivables.

Under GAAP, we account for these equity method investments utilizing the HLBV method. 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,receive if the assets were liquidated at book value, after adjusting for any distributions or contributions made during such quarter. The HLBVamount allocationsreceived in a liquidation is typically based on the negotiated profit and loss allocation, which may differ from the allocation of incomedistributable orcash lossin mayany begiven impactedperiod. byThe amount allocated to a tax equity investor during the receipthypothetical liquidation is typically reduced over time as tax attributes are allocated to them and they achieve portions of taxtheir attributes,preferred asreturn. Accordingly, tax equity investors are allocated losses inas proportionthey to thereceive tax benefits received,benefits, while the sponsors of the project and other investors subordinate to tax equity are allocated gains of a similar amount. TheTax equity investors can generally elect either investment tax creditcredits available for election in solar projects is a one-time credit realized in the quarter when the project is considered operational for tax purposes and is fully allocated under HLBV in that quarter (subject to an impairment test), while theor production tax creditcredits, requiredwhich forare windeach projectsrecognized andover electabledifferent fortime solarperiods. projectsThis isresults in different HLBV income profiles despite the fact that cash allocations are typically not directly impacted by such a ten-yeartax credit and thus is allocated under HLBV over a ten year period.election. In addition, the agreed upon allocations of the project’s cash flows may differ materially from the profit and loss allocation used for the HLBV calculations in a given period. We also consider the impact of any OTTI in determining our income from equity method investments.

The cash distributions for those equity method investments where we apply HLBV are segregated into a return on and return of capital on our cash flow statement based on the cumulative income (loss) that has been allocated using the HLBV method. However, as a result of the application of the HLBV method,method includingdescribed 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, 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.allocations. Thus, in calculating adjustedAdjusted earnings,Earnings, we adjust GAAP net income (loss) for certain of theseour investments where there are characteristics as described above, we further adjust GAAP net income (loss)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. 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. We believe this equity method investment adjustment to our GAAP net income (loss) in calculating our adjustedAdjusted earningsEarnings measure is an important supplement to the income (loss) from equity method investments as determined under GAAP forthat anhelps investor toinvestors understand the economic performance of these investments where HLBV income can differ substantially from the economic returns in any one period.

(1) Cash collected duringincludes 2023$14 million in 2025 and 2022 includes $9 million andin $642023 million,related respectively ofto debt issuance proceeds from certain of our equity method investees, the repayment of which we have guaranteed.

We have calculated our adjusted earnings for the years ended December 31, 2024, 2023 and 2022. The table below provides a reconciliation of our GAAP net income (loss) to adjustedAdjusted earningsEarnings for the years ended December 31, 2025, 2024 and 2023:

(1)The per share data reflects the GAAP diluted earnings per share andwhich is the most comparable GAAP measure to our Adjusted earningsEarnings per share.

(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. Since we remove GAAP Equity method income for purposes of our Adjusted earningsEarnings metric, we add back the elimination through this adjustment.

(45)In addition to these provisions, in 2022 we wrote off two commercial receivables with a combined total carrying value of approximately $8 million which represented assignments of land lease payments from two wind projects that we had originated in 2014 as a part of an acquisition of a large land portfolio. In 2017, the operator of the projects terminated the lease, at which time we filed a legal claim and placed these assets on non-accrual status. In 2019, we received a court decision indicating that the owners of the projects were within their rights under the contract terms to terminate the lease which impacts the land lease assignments to us, at which time we reserved the receivables for their full carrying amount. In 2022, we received a court decision indicating that our appeal was not successful, and accordingly wrote off the full amount of the receivable. We have excluded the write-off from Adjusted earnings for the year ended December 31, 2022, due to the infrequent occurrence of credit losses as well as the unique nature of the receivables, as the assignment of land lease payments from wind projects represent a small portion of our total portfolio. In 2024, we concluded that an equity method investment, along with certain loans we had made to this investee, were not recoverable. The equity method investment and loans had a carrying value of $0 due to the losses already recognized through GAAP income from equity method investments as a result of operating losses sustained by the investee. We have excluded this write-off from Adjusted earnings,Earnings, as this investment was an investment in a corporate entity which is not a part of our current investment strategy and is immaterial to our Portfolio. The loss associated with these investments is included in our Average Annual Realized Loss on Managed Assets metric disclosed below.

We completed approximately $637$1.1 millionbillion and $1.7 billion of transactions during the three and six months ended MarchJune 31,30, 2026, respectively, compared to approximately $706$189 million and $894 million during the same period in 2025.2025, respectively. As of MarchJune 31,30, 2026, our total Managed Assets are $16.4$17.6 billion, and include our Portfolio, the portion of assets owned by others in our co-investment vehicle, and other assets in securitization trusts. We held approximately $7.6$8.2 billion of transactions on our balance sheet, which we refer to as our “Portfolio.” As of MarchJune 31,30, 2026, our Portfolio consisted of over 600 assets and 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. The fee-generating assets attributable to other investors in our co-investment structures that were not consolidated as part of our Portfolio totaled approximately $1.1$1.5 billion.

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. 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. As of MarchJune 31,30, 2026, we manage approximately $7.3$7.4 billion in assets in such securitization trusts.

We have a large and active pipeline of potential new opportunities that are in various stages of our underwriting process. We refer to potential opportunities as being part of our pipeline if we have determined that the project fits within our investment strategy and exhibits the appropriate risk and reward characteristics through an initial credit analysis, including a quantitative and qualitative assessment of the opportunity, as well as research on the relevant market and sponsor. Our pipeline of transactions that could potentially close in the next 12 months consists of opportunities in which we will be the lead originator as well as opportunities in which we may participate with other institutional investors. 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 MarchJune 31,30, 2026, our pipeline consisted of more than $6.5 billion in new equity, debt and real estate opportunities. Of our pipeline, approximately 34%35% is related to BTM assets, 47%51% is related to GC assets, and 14%8% are related to FTN assets, with the remainder related to other sustainable infrastructure.

Our financial statements are prepared in accordance with GAAP, which requires the use of estimates and assumptions that involve the exercise of judgment and use of assumptions as to future uncertainties. Understanding our accounting policies and the extent to which we make judgments and estimates in applying these policies is integral to understanding our financial statements. We believe the estimates and assumptions used in preparing our financial statements and related footnotes are reasonable and supportable based on the best information available to us as of MarchJune 31,30, 2026. Various uncertainties may materially impact the accuracy of the estimates and assumptions used in the financial statements and related footnotes and, as a result, actual results may vary significantly from estimates.

Our Portfolio totaled approximately $7.6$8.2 billion as of MarchJune 31,30, 2026 and included approximately $3.8$4.1 billion of BTM assets, approximately $2.6 billion of GC assets, and approximately $1.2$1.5 billion of FTN assets. Approximately 54%56% of our Portfolio consisted of equity method investments in renewable energy related projects. Approximately 38%34% consisted of fixed-rate receivables and debt securities, approximately 6% consisted of floating-rate receivables, and 2%4% of our Portfolio was real estate leased to renewable energy projects under lease agreements.agreements and other Portfolio assets. Our Portfolio consisted of over 600 transactions with an average size of $12 million and the weighted average remaining life of our Portfolio (excluding match-funded transactions) of approximately 16 years as of MarchJune 31,30, 2026. Our Portfolio consisted of the following asset classes as of MarchJune 31,30, 2026:

The table below provides details on the interest rate and maturity of our receivables and debt securities as of MarchJune 31,30, 2026:

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, the interest expense incurred, and average yield or cost. Our earnings from our equity method investments are not included in this table.

The following table provides a summary of our anticipated principal repayments for our receivables and debt securities as of MarchJune 31,30, 2026:

•the anticipated maturity dates of our receivables and debt securities and the weighted average yield for each range of maturities as of MarchJune 31,30, 2026;

•the term of our leases and a schedule of our future minimum rental income under our land lease agreements as of MarchJune 31,30, 2026;

Comparison of the Three Months Ended MarchJune 31,30, 2026 vs. Three Months Ended MarchJune 31,30, 2025

•Net income decreasedincreased by $132$32 million due primarily to aan decreaseincrease in income (loss) from equity method investments of $167$21 million and an increase in revenue of $35 million, offset partially by an increase in total expenses of $47 million, offset by an increase in revenue of $27$6 million and a $55$19 million decreaseincrease in income tax expense.

•Total revenue increased by $27$35 million due to an increase in interest and rental income of $16$17 million caused by a higher average asset balance and asset yield, a $4$8 million increase in gain on sale of assets driven primarily by the origination of a changeheld-for-sale receivable for which we elected the fair value option in the mixcurrent of assets being securitized,period, a $4$6 million increase in origination fee and other income due to aadditional structuringinvestments advisoryoriginated feein recognized,co-investment structures, and a $3$4 million increase in management fees and retained interest income due to a larger fee-earning Managed Assets balance.

•Interest expense increased by $35$8 million due to $19 million in redemption fees and the expensing of capitalized debt issuance costs associated with our redemption of the 2027 Senior Notes, as well dueprimarily to a larger average outstanding debt balance and a higher average interest rate driven in part by the issuance of Junior Subordinated Notes that bear a higher interest rate but which reduce our need to issue equity to maintain our desired financial leverage ratio as a result of the partial equity treatment of these instruments by rating agencies. We recorded aan $5$11 million provisionbenefit for loss on receivables and retained interests in securitization trusts, driven primarily by a loan-specific reserve wherereleases, including the underlyingrelease assetsdriven areby experiencingthe project-specificconsolidation technicalof challengesa whichproject arecompany currentlyborrower as discussed in theNote process6 ofto beingour remediated.financial statements in this Form 10-Q.

•Compensation and benefits expenses increased by $11$8 million primarily due to thegrowth acceleration of share-based compensation due to employees meetingin the criteriasize of the Company’sbusiness retirementand policy.timing of incentive-based compensation accrued in the current period.

•Income tax expense decreasedincreased by $55$19 million primarily due to lowerhigher pre-tax book income.income driven by the items discussed above.

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, and non-cash tax charges and including the earnings attributable to our non-controlling interest of our Operating Partnership. We also make an adjustment to eliminate our portion of fees we earn from related-party co-investment structures, and for our equity method investments in the renewable energy projects as described below. We will use judgment in determining when we will reflect the losses on receivables in our Adjusted Earnings, and will consider certain circumstances such as the time period in default, sufficiency of collateral as well as the outcomes of any related litigation. 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.

Under GAAP, we account for these equity method investments utilizingusing the HLBV method. 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. The amount received in a liquidation is typically based on the negotiated profit and loss allocation, which may differ from the allocation of distributable cash in any given period. The amount allocated to a tax equity investor during the hypothetical liquidation is typically reduced over time as tax attributes are allocated to them and they achieve portions of their preferred return. Accordingly, tax equity investors are allocated losses as they receive tax benefits, while the sponsors of the project and other investors subordinate to tax equity are allocated gains of a similar amount. Tax equity investors can generally elect either investment tax credits or production tax credits, which are each recognized over different time periods. This results in different HLBV income profiles despite the fact that cash allocations are typically not directly impacted by such a tax credit election. In addition, the agreed upon allocations of the project’s cash flows may differ materially from the profit and loss allocation used for the HLBV calculations in a given period.

We have acquired equity investments in portfolios of projects which have the majority of the distributions payable to more senior investors in the first few years of the project. The following table provides results related to our equity method investments for the three and six months ended MarchJune 31,30, 2026 and 2025.

The table below provides a reconciliation of our GAAP net income (loss) to Adjusted Earnings for the three and six months ended MarchJune 31,30, 2026 and 2025.

(6)Includes impact of cash paid for state income taxes during the three and six months ended MarchJune 31,30, 2026.

The following is a reconciliation of our GAAP-based net investment income to our Adjusted Recurring Net Investment Income for the three and six months ended MarchJune 31,30, 2026 and 2025:

The following is a reconciliation of our GAAP-based Portfolio to our Managed Assets as of MarchJune 31,30, 2026 and December 31, 2025:

(12)Represents assets in our co-investment structures which are attributable to our co-investors and on which we earn an asset management fee. Total assets in co-investment structures are $2.3$2.9 billion and $1.9 billion as of MarchJune 31,30, 2026 and December 31, 2025, respectively. There are $1.5$1.4 billion of closed transactions which have not yet funded as of MarchJune 31,30, 2026.

The following shows our Managed Assets by asset class as of MarchJune 31,30, 2026:

Other MetricsMetric

Average Annual Realized Loss on Managed Assets represents the average annual rate of our incurred losses, calculated as the amount of realized losses incurred in each year as a percentage of each year’s average annual Managed Assets. This metric is calculated over the ten-year period ending MarchJune 31,30, 2026. 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 averageAverage annualAnnual recognizedRecognized lossLoss on Managed Assets as calculated under GAAP for comparison. Average Annual Realized Loss on Managed Assets differs from averageAverage annualAnnual recognizedRecognized lossLoss on Managed Assets as calculated under GAAP as the timing is based on realization of loss rather than GAAP recognition. We believe that Average Annual Realized Loss on Managed Assets provides an additional metric to our underwriting quality over our history of investing in energy transition assets and infrastructure. 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. The table below shows these metrics as of March 31, 2026 is:

(1) As a credit enhancement for our Standalone Commercial Paper Notes, we reserve capacity under our unsecured revolving credit facility for the principal amount of any outstanding Standalone Commercial Paper Notes, if any. As of MarchJune 31,30, 2026, we had no outstanding Standalone Commercial Paper Notes.

Capital markets activity during the threesix months ended MarchJune 31,30, 2026

During the threesix months ended MarchJune 31,30, 2026, we issued $600 million principal amount of Junior Subordinated Notes due November 2056 and $400 million principal amount of Senior Notes due 2036. We used a portion of the proceeds of these issuances to redeem the outstanding $450 million principal amount of our 8.00% Senior Notes due 2027, with the remaining proceeds used to temporarily pay down short-term borrowings and ultimately invest in Portfolio assets. We used existing liquidity to redeem the outstanding $600 million principal amount of our 3.375% Senior Notes due 2026. We issued $1 billion principal amount of Senior Notes due 2033, and used a portion of the proceeds to pay down our Secured Term Loan. We did not issue any equity during the threesix months ended MarchJune 31,30, 2026.

The maturity profile of our long-term recourse debt obligations as of MarchJune 31,30, 2026, is shown in the table below.

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. As shown in the table below, our debt to equity ratio was approximately 1.61.7 to 1 as of MarchJune 31,30, 2026, within our target operating range of between 1.5 to 1 and 2.0 to 1, and below our current board-approved leverage limit of up to 2.5 to 1. Our debt to equity ratio reflects 50% of our outstanding principal amount of Junior Subordinated Notes as equity as consistent with the treatment by rating agencies and as approved by our board. Our percentage of fixed rate debt including the impact of our interest rate derivatives was approximately 100%95% as of MarchJune 31,30, 2026, which is within our targeted fixed rate debt percentage range of 75% to 100%. Our targeted fixed rate debt range allows 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.

The calculation of our fixed-rate debt and financial leverage as of MarchJune 31,30, 2026 and December 31, 2025 is shown in the chart below:

We had approximately $151$281 million and $145 million of unrestricted cash, cash equivalents, and restricted cash as of MarchJune 31,30, 2026 and December 31, 2025, respectively. The following table summarizes our cash flows for the threesix months ended MarchJune 31,30, 2026 and 2025. 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 $235$456 million for the threesix months ended MarchJune 31,30, 2026.

Cash provided by (used in) operating activities for the threesix months ended MarchJune 31,30, 2026 was $53$41 million higher than the same period ended MarchJune 31,30, 2025. Net income was $132$100 million lower in the current period, and there was a greater adjustment to net income of $185$141 million when compared to the prior period. This increase in adjustment to net income includes $51 million greater cash receivedprovided (paid)by foroperating held-for-saleactivities receivableswas anddriven $41primarily by equity method investments, where $40 million more in equity method investment distributions which were classified as operating, which were offset partially by increased cash interest paid of $41 million.operating.

Cash provided by (used in) investing activities for the threesix months ended MarchJune 31,30, 2026 was $140$159 million lower than the same period ended MarchJune 31,30, 2025. We collectedinvested $204$394 million moreadditional in principalequity frommethod receivablesinvestments in the current period, which was partially offset by $105$172 million additional investedmore in equity method investments and receivables. We alsoprincipal collected from receivables in the current period as well as the collection of a $63 million reimbursement from a co-investor for CCH1 advances made by us on their behalf in December 2025.

Cash provided by (used in) financing activities for the threesix months ended MarchJune 31,30, 2026 was $120$300 million lowergreater than the same period ended MarchJune 31,30, 2025. We had lower netNet borrowings from ourlong-term revolvingcapital creditsources facilityincluding Senior Notes, Convertible Notes, Junior Subordinated Notes, and commercialterm paper notes of $602 million compared to the prior period, while net proceeds from senior notes and junior subordinated notesloans were $549$948 million higher in the current period than in the prior period. We had $527 million lower net borrowings from short-term sources including our unsecured revolving credit facility and our commercial paper programs. We also issued $47$120 million in common stock in the prior period, which did not recur in the current period.

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 have retained interests in securitization trusts (including any outstanding servicer advances) of approximately $339$336 million as of MarchJune 31,30, 2026, that may be at risk in the event of defaults or prepayments in our securitization trusts and certain limited guarantees as discussed below. We have not guaranteed any obligations of non-consolidated entities or entered into any commitment or intent to provide additional funding to any such entities except as disclosed in Note 9 to our financial statements in this Form 10-Q. A more detailed description of our relations with non-consolidated entities can be found in Note 2 to our financial statements in this Form 10-Q. Additionally, we have made certain loans to equity method investees which we describe in Note 6 to our financial statements in this Form 10-Q.

As of MarchJune 31,30, 2026, we carried only our debt securities, our receivables held-for-sale for which we had elected the fair value option, if any, our retained interests in securitization trusts, and derivatives at fair value on our balance sheet. As a result, in reviewing our book value, there are a number of important factors and limitations to consider. Other than those assets listed above that are carried on our balance sheet at fair value as of MarchJune 31,30, 2026, the carrying value of our remaining assets and liabilities are typically determined using a cost basis approach in accordance with GAAP, adjusted for income or loss recognized on and cash collected from such assets. Other than the allowance for current expected credit losses applied to our receivables, our remaining assets and liabilities do not incorporate other factors that may have a significant impact on their value, most notably any impact of business activities, changes in estimates, or changes in general economic conditions, interest rates or commodity prices since the dates the assets or liabilities were initially recorded. Accordingly, our book value does not necessarily represent an estimate of our net realizable value, liquidation value or our fair market value.