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Earnings PresentationFourth Quarter and Full Year 2025
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Forward Looking Statements 2 Some of the information contained herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used herein, words such as "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may," "target," or similar expressions, are intended to identify such forward-looking statements. Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those described in the forward-looking statements are discussed under the caption "Risk Factors" included in our Form 10-K that will be filed for the year ended December 31, 2025 (the “Form 10-K”) with the U.S. Securities and Exchange Commission (“SEC”), as well as in other reports that we file with the SEC. Other important factors that we think could cause our actual results to differ materially from expected results are summarized below, including the impact of the One Big Beautiful Bill Act on the U.S., regional and global economies, the U.S. climate solutions market and the broader financial markets. Other factors besides those listed could also adversely affect us. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except where otherwise noted, forward-looking statements are based on beliefs, assumptions and expectations as of September 30, 2025. The guidance discussed herein reflects our estimates of (i) yield on our existing portfolio; (ii) yield on incremental portfolio investments, inclusive of our existing pipeline; (iii) the volume and profitability of transactions; (iv) amount, timing, and costs of debt and equity capital to fund new investments; (v) changes in costs and expenses reflective of our forecasted operations; (vi) disruptions to the renewable energy supply chain that may result from changes in the regulatory environment and other factors; (vii) the general interest rate and market environment; (viii) the impact of the One Big Beautiful Bill Act on our industry and our business; (ix) the impact of our revocation of our REIT election; (x) and our ability to expand into new markets. All guidance is based on current expectations regarding economic conditions, the regulatory environment, the dynamics of the markets in which we operate and the judgment of our management team, among other factors. In addition, actual dividend distributions are subject to approval by our Board of Directors on a quarterly basis. The Company has not provided GAAP (as defined below) guidance as forecasting a comparable GAAP financial measure, such as net income, would require that the Company apply the hypothetical liquidation at book value (“HLBV”) method to certain investments. In order to forecast under the HLBV method, the Company would be required to make various assumptions related to expected changes in the net asset value of the various entities and how such changes would be allocated under HLBV. GAAP HLBV earnings over a period of time are very sensitive to these assumptions especially in regard to when a partnership transaction flips and thus the liquidation scenarios change materially. The Company believes that these assumptions would require unreasonable efforts to complete and if completed, the wide variation in projected GAAP earnings based upon a range of scenarios would not be meaningful to investors. Accordingly, the Company has not included a GAAP reconciliation table related to any adjusted earnings guidance. The Company disclaims any obligation to update, or publicly release the results of any update or revisions to, these forward-looking statements, including to reflect new estimates, events or circumstances after the date of this presentation.This presentation refers to certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Additional information concerning these non-GAAP financial measures as well as reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the Appendix herein. Estimated carbon emission savings are calculated using the estimated kilowatt hours, gallons of fuel oil, million British thermal units of natural gas and gallons of water saved as appropriate, for each project. The energy savings are converted into an estimate of metric tons of carbon dioxide equivalent emissions based upon the project’s location and the corresponding emissions factor data from the U.S. Government and International Energy Agency. Portfolios of projects are represented on an aggregate basis. The carbon and water savings information included in this presentation is based on data from a third-party source that we believe to be reliable. We have not independently verified such data, which involves risks and uncertainties and is subject to change based on various factors. Past performance is not indicative nor a guarantee of future returns.
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Broad-Based Momentum Across the Business 3 Volume$4.3B transactions closed in 2025Pipeline1> $6.5BCapital EfficiencyCCH1 + IG ratings + hybridWith Incremental Adjusted ROE5surpassing 19% last year, Adjusted ROE4increased 70 bps to 13.4% for 2025Higher profits onnew shares issuedProfitabilityNew investment yields2>10.5%HASI bond yields3<6.25%1. As of 12/31/252. For the full year 2025. Represents yields on new portfolio investments only; excludes follow-on investments of previous transactions3. Refers to market pricing of HASI’s publicly-traded senior bonds as of February 9, 20264. See Appendix for explanations and reconciliations to the relevant GAAP measures for Adjusted EPS (pp. 32 and 27, respectively) and Adjusted ROE (pp. 33 and 28, respectively) 5. Incremental Adjusted ROE is calculated as change in Adjusted Earnings divided by change in quarterly average of Shareholder Equity throughout each yearAdjusted EPS4+10% Y/Y to $2.70
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•New balance sheet/CCH1 transactions grew ~140% Y/Y to $3.6b in 2025•2025 includes $1.2b SunZia investment closed in October•New balance sheet/CCH1 transactions expected to range between $2.0b and $3.0b in 2026 Strong Demand Driving Higher Volumes 4$0.9$1.4$1.8$1.5$3.6$0.8$0.4$0.5$0.8$0.82021 2022 2023 2024 2025Balance Sheet/CCH1Securitized A Significant Increase in Closed Transactions in 2025, as New Asset Yields Held in Double-Digits 1. Figures may not sum due to rounding2. Represents yields on new portfolio investments only; excludes follow-on investments of previous transactions $4.3$2.3$2.3$1.8$1.7Closed Transactions ($b)1 New Asset Yields22021 2022 2023 2024 2025>10.5%>10.5%>9.0%>7.5%•New asset yields1at >10.5% in 2025 for the second year in a row•Yields on new investments have increased with no change in our risk profile>7.0%
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Market Fundamentals Remain Highly Attractive 5 BTM:•Resi solar lease/PPA market projected to grow >20% Y/Y in 20262•Higher battery attach rates of >40% increase addressable market3•Improving customer value proposition with electric utility rate growth of 15-40% forecast from 2023 to 20304GC:•99% of new capacity in 2026 forecast to be renewables/storage US5•Solar/storage/wind pipeline of >180 GW, or >$230b capital investment6•Renewable PPA prices up >40% since 2023 while maintaining lowest LCOE7FTN:•RNG production is forecast to more than double from 2025 to 20308•Uptick in gas turbine orders also underpins higher RNG demand•Treasury guidance has offered more clarity on 45Z tax creditsGrid-Connected 37%Next Frontier7% Behind-the-Meter 35%Fuels, Transport & Nature 21%>$6.5b 12-mo Pipeline1BTM EnergyEfficiency19%BTM Solar & Storage16%Next Frontier: •Multiple opportunities currently under evaluation1. As of 12/31/252. Wood Mackenzie/SEIA’s “US Solar Market Insight Report: Q4 2025” (December 2025)3. Wood Mackenzie’s “US Energy Storage Monitor: Q4 2025” (December 2025) 4. ICF’s “Rising Current: America’s Growing Electricity Demand” (May 2025)5. EIA’s “Short-Term Energy Outlook” (February 2026) 6. American Clean Power’s “Clean Power Quarterly Market Report: Q3 2025” (December 2025)7. LevelTen’s “PPA Price Index: Q3 2025”8. ICF’s “Near-Term Renewable Natural Gas Demand Assessment” (November 2025)
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New Investments Remain Highly Diversified 6TransportationRNGOnshore WindResi SolarPublic Sector Energy EfficiencyC&IGC SolarCommunity Solar2021 2022 2023 2024 2025$1.7b$1.8b$2.3b$4.3$2.3bOther Volume Growth Spans Multiple Asset Classes
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Consistent Adjusted EPS1Growth of ~10% per Year 1. See Appendix for an explanation of Adjusted EPS (p. 32) and reconciliation to the relevant GAAP measure (p. 27).7$1.88$2.08$2.23$2.45$2.702021 2022 2023 2024 2025 +10%CAGRResilient Profitability Through Changes in the Economic, Political and Interest Rate Environment
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Adjusted ROE is on the Rise 8Adjusted ROE1Incremental Adjusted ROE212.1%12.7%13.4%13.5%16.3%19.2%0%5%10%15%20%25% 2023 2024 20251. See Appendix for an explanation of Adjusted ROE (p. 33) and reconciliation to the relevant GAAP measure (p. 28). In 2025, we changed the methodology for our Adjusted ROE calculation to use the average of the Stockholders’ Equity at the end of the preceding year and as of the end each of the year’s four quarters. We have recast prior periods to conform with this new methodology2. Incremental Adjusted ROE is calculated as change in Adjusted Earnings divided by change in quarterly average of Shareholder Equity throughout each year Increase in Incremental Adjusted ROE over the Last Few Years Indicates Continued Growth in Adjusted ROE
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Ongoing Improvements to the Efficiency of Our Equity Capital 9$100 $100 $100 $100$100$200 $200 $200$250$300 $300$450$300$450Pre-CCH1 CCH1 (Unlevered) CCH1 (0.5xLeverage)Jr. SubordinatedDebt$300$600$1,350 Total Investment Capital per $100 of HASI EquityCapital Efficiency Improvements Support Continued Increases in Adjusted ROE $900Acceleration in the reduction of our payout ratio expected to enable a greater portion of new investments to be funded by retained earnings rather than new share issuances11. Assumes HASI debt-to-equity ratio remains 2.0x using rating agency definition that assigns at least 50% equity credit to junior subordinated notesHASI EquityHASI Sr. DebtKKR EquityCCH1 DebtHASI Jr. Debt
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Landmark Investments with Sunrun & Pattern Closed in Q4 10 $500Million>40khome power plants >300MW$1.2Billion~10TWh annual generation2.6GW Image Credit: Sunrun Image Credit: GE Vernova
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2028 Adjusted ROE2:>17% Introducing New Guidance Framework for 2028 11 2028 Adjusted EPS1:$3.50 - $3.60 We aim to further lower our equity issuance through greater capital recycling by accelerating the reduction in our payout ratio to:<50% by 2028 <40% by 2030 The use of Absolute EPS rather than a CAGR enables management to provide guidance updates with more precision during interim periodsWe continue to expect long-term annual growth in Adjusted EPS1of ~10% on average1. See Appendix for an explanation of Adjusted EPS (p. 32) and reconciliation to the relevant GAAP measure (p. 27) 2. See Appendix for an explanation of Adjusted ROE (p. 33) and reconciliation to the relevant GAAP measure (p. 28)
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121. See Appendix for explanations and reconciliations to the relevant GAAP measures for Adjusted Recurring Net Investment Income (pp. 33 & 29), Adjusted Earnings and Adjusted EPS (pp. 32 & 27) 2. Represents the sum of (a) Management Fees and Retained Income Revenue and (b) Origination Fee and Other Income Revenue. Not adjusted for the elimination of our proportionate share of fees earned from our co-investment structures3. See Appendix for an explanation of Adjusted ROE (p. 33) and reconciliation to the relevant GAAP measure (p. 28)4. Incremental Adjusted ROE is calculated as change in Adjusted Earnings divided by change in quarterly average of Shareholder Equity throughout the year 20252024 $1.41$1.62GAAP Diluted EPS$185m$200mGAAP Net Income Attributable to Controlling Shareholders$28m$50mGAAP-Based Net Investment Income7.3%8.9%GAAP ROENew Highs in Adjusted EPS and Adjusted ROE in 2025 Adjusted EPS growth of 10.2% Y/Y$2.70$2.45Adjusted EPS1 $342m$291mAdjusted Earnings1 $362m$289mAdjusted Recurring Net Investment Income1$49m$37mManagement Fees, Retained Interest Income, Origination Fees and Other Inc.2 $65m$80mGain on Sale Revenue13.4%12.7%Adjusted ROE3 Incremental Adjusted ROE was 19.2% in 20254 Adjusted Recurring Investment Income has grown at a 26% CAGR since 2021 to $362m
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Managed Assets Up 18% Y/Y to $16.1 Billion 13 Managed Assets1Portfolio2$2.9$3.6$4.3$6.2$6.6$7.62020 2021 2022 2023 2024 2025$16.1$12.3$9.8$8.8$7.2$13.7PortfolioPortfolio:$7.6bPublic Sector 3%Community Solar 9%Other 1%C&I6%Resi Solar & Storage32%RNG13%Onshore Wind17%GC Solar & Storage17% 1. As of the end of each period. Includes our Portfolio, our partner’s share of CCH1, and assets securitized off balance sheet2. As of 12/31/25. Figures may not sum due to rounding•17% CAGR since 2020•Average annual realized losses remain <10 bps3•Up 15% Y/Y in 2025•Portfolio yield of 8.8%43. See Appendix for a definition of average annual realized losses (p. 21)4. As of 12/31/25. See Appendix for an explanation of Portfolio Yield (p. 33)5. Including back leverage and expected recycling of cash collectionsOff-Balance SheetTransportation3% •HASI and KKR each committed additional $500m in equity in Q4•Sufficient capacity to support new transactions through 2026YE5 2Receivables 25%Equity Investments 75%Community Solar 6%C&I 6%Resi Solar 43%GC Solar 18%FTN 3% By Investment Type2By Asset Class2GC Wind24%
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Recurring Income Is the Primary Driver of Our EPS Growth 1. Based on the share count used in our Adjusted EPS calculation14 $1.70$2.22$2.27$2.42$2.86$0.81$0.64$0.66$0.68$0.512021 2022 2023 2024 2025Adjusted Recurring Net Investment Income per ShareGain on Sale Revenue per Share1Since 2021, Adjusted Recurring Net Investment Income has grown by $1.16 per share and offset a reduction in Gain on Sale revenue of $0.30 per share 1
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Building a Broader, More Resilient Funding Platform 151. Represents total face value inclusive of rollovers in 2025$1.8b of liquidity as of 12/31/25 EquityRevolving credit facilitiesConvertsJr. subordinated notesCo-Investment vehiclesStand-alone CPDelayed draw term loanUnsecured notes•Capacity increased by $475m in 2025 to $1.825b across 19 banks•Three IG Ratings•Refinanced $700m of bonds due 2026 and 2027•New facility closed in Q4 which enhances flexibility to address near-term maturities•KKR and HASI committed an additional $1b in equity for $3b total•Scaled program to 384 issuances totaling $7.4b1 at <5% interest rate•Inaugural $500m issuance in new segment of the bond market in Q4•Reduces share issuance as credit rating agencies assign ≥50% equity credit•Refinanced $200m of notes that matured in 2025Introduced in2024-25 •Improvement in equity efficiency demonstrated with new equity issuances of $237m to support a $1b increase in our Portfolio in 2025, compared to new equity issuances of $204m for a $400m increase in our Portfolio in 2024
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4Q25 Sustainability and Impact Highlights 16 Carbon Emissions1CarbonCount: 0.49 (4Q25)Water Savings2WaterCount: 40 (4Q25) 1.7 Million MT CO2Avoided from New Transactions Closed in 2025(3.2)(5.2)(6.0)(6.6)(7.4)(8.2)(9.9)(10)(9)(8)(7)(6)(5)(4)(3)(2)(1)02019 2020 2021 2022 2023 2024 2025 (9)(8)(7)(6)(5)(4)(3)(2)(1)02019 2020 2021 2022 2023 2024 2025Efficiency Measures Avoided Grid MWhsCumulative Metric Tons of CO2Avoided Annually3(million tons)Cumulative Gallons of Water Saved Annually3(billion gallons)Named to CDP A-Listfor 4thConsecutive Year>$1 Million Granted by HASI Foundation in 2025 (3.4)(4.0)(4.2)(6.3)(7.0)(7.3)(7.6) 1. CarbonCount® is a proprietary scoring tool for evaluating real assets to determine the efficiency by which each dollar of invested capital avoids annual carbon dioxide equivalent (CO2e) emissions2. WaterCountTMis a scoring tool that evaluates investments in U.S.-based projects to estimate the expected water consumption reduction per $1,000 of investment3. Cumulative metric tons of CO2e emissions avoided and water saved annually through HASI’s closed transactions from 2013 through 2025
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17 Well-Positioned for Continued Growth and Higher Returns Closed balance sheet/CCH1 transactions expected to total $2.0 – $3.0b in 2026New InvestmentsReturn on EquityAdjusted ROE expected to grow from 13.4% in 2025 to at least 17% in 2028Access to Capital$1.8b of liquidityand IG ratings sufficient to support maturities and new fundingsAdjusted EPSExpected range of $3.50 - $3.60 in 2028Equity issuanceMinimizing share issuance and maximizing profitability of each new share issuedHASI PlatformSignificant investment in talent and technology to support further growth
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Appendix18
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Portfolio and Related Debt Metrics 19 2025202420232022202113.4%12.7%12.1%11.5%11.5%Adjusted ROE1 >10.5%>10.5%>9.0%>7.5%>7.0%New Asset Yields2 8.8%8.3%7.9%7.5%7.5%Portfolio Yield3 5.8%5.6%5.0%4.3%4.6%Interest Expense / Avg. Debt Balance4$ millionsPortfolio Bridge: Q3 2025 to Q4 2025$7,542Portfolio at 9/30/25$199Funding of new investments$341Funding of prior investments($337)Principal collections5($191)Syndications and securitizations$32Other$7,586Portfolio at 12/31/25$0$200$400$600$800$1,0002026 2027 2028 2029 2030 2031 2032 2033 2034 2033 … 2056Debt Maturities ($m)6 Convertible NotesSr. Unsecured NotesBank Term Loans1.7x1. See Appendix for an explanation of Adjusted ROE (p. 33) and reconciliation to the relevant GAAP measure (p. 28)2. Represents yields on new portfolio investments only; excludes follow-on investments of previous transactions.3. As of the end of each period. See Appendix slide 33 for an explanation of Portfolio Yield4. As measured by int. exp. divided by avg. debt balance; excludes incremental int. exp. related to debt prepayments.5. Reflects principal collections of receivables and total distributions from our equity method investments6. Reflects maturities of term debt only and excludes commercial paper outstanding as of 12/31/257. As measured by credit rating agencies (assigning 50% equity credit to jr. subordinated notes)8. Includes fixed rate or hedged base rate debt. See Appendix slide 20 for details on our hedges Debt-to-Equity ratio7(within 1.5-2.0 target)99%of debt at fixed rates or hedged8
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Adjusted Cash Flow from Operations Plus Other Portfolio Collections1 20 202320242025$ millions2 $442$891$1,200Cash collected from our Portfolio$34$325$33Cash collected from sale of assets3 ($79)($86)($89)Cash used for compensation and benefits and G&A expenses($138)($173)($228)Interest paid4 $27$33$50Management Fees and retained interest income + Origination Fees and Other Income($22)($73)($7)Principal payments on non-recourse debt$2($8)($1)Other$266$910$959Adjusted Cash from operations plus other portfolio collections($160)($192)($210)(-) Dividend$106$718$749Cash Available for Reinvestment($2,225)($1,075)($1,566)(-) Investments Funded5 $1,969$419$953(+) Net Capital Raised$50$13($141)Other Sources/Uses of Cash($100)$75($5)Change in Cash1. See Appendix for an explanation of Adjusted Cash Flow from Operations Plus Other Portfolio Collections and Cash Available for Reinvestment (p. 31)2. Amounts may not sum due to rounding3. Includes cash from the sale of assets on our balance sheet as well as securitization transactions4. For 2024, interest paid includes a $20 million benefit from the settlement of a derivative which was designated as a cash flow hedge. For 2025, interest paid includes a $24 million benefit from the settlement of a derivative which was designated as a cash flow hedge5. Does not include receivables held-for-sale
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Strong Portfolio with Positive Credit Attributes 21 Recent Portfolio PerformanceObligor CreditStructural SeniorityPortfolio(%)5Asset Class>415k consumers WAVG FICO: “Very Good” 6Subordinated Debt or Structured Equity32%ResidentialTypically IG corporates or utilitiesTypically Super Senior or Structured Equity17%GC SolarTypically IG corporates or utilitiesTypically Structured Equity17%WindVarious incentivized offtakersTypically Senior15%Fuels, Transport & NatureTypically creditworthy consumers and/or IG corporatesTypically Structured Equity9%CommunityTypically IG corporatesTypically Structured Equity6%C&IPredominantly IG govt or quasi-govt entitiesSenior or Structured Equity3%Public Sector Positive Credit AttributesPerformance MetricDescriptionRating~99%Performing11~1%Slightly below metrics22~0%Significantly below metrics330.13%Average annual recognized loss on Managed Assets (GAAP)40.08%Average annual realized loss on Managed Assets (Non-GAAP)4Outstanding Credit History1. This category includes our assets where, based on our credit criteria and performance to date, we believe that our risk of not receiving our invested capital remains low. | 2. This category includes our assets where, based on our credit criteria and performance to date, we believe there is a moderate level of risk to not receiving some or all of our invested capital | 3. This category includes our assets where, based on our credit criteria and performance to date, we believe there is substantial doubt regarding our ability to recover some or all of our invested capital | 4. Average Annual Recognized (GAAP)/ Realized (Non-GAAP) Loss on Managed Assets is the average rate of our annual recognized (GAAP)/ realized (Non-GAAP) losses, calculated as a percentage of recognized (GAAP)/ realized (Non-GAAP) losses incurred in each year relative to average Managed Assets. This metric includes the 10 year period ending December 31, 2025. These losses include both losses related to equity method investments and receivables and investments. | 5. Total may not sum due to rounding | 6. As of September 30, 2025; located across 21 states and the District of Columbia, Puerto Rico and Guam; qualitative FICO Rating corresponds to average FICO Score range for consumer obligors (as of lease origination dates)
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Summary of Total Debt and Hedge Portfolio 221. As of 12/31/20252. Interest rate includes hedge rate where applicable3. CP is renewed periodically on short term basis. Maturity of 2028 reflects that of our revolving line of credit, under which capacity is reserved for CP Maturity YearEffective Interest Rate2Debt Amount (millions)1Debt Facility20263.38%$600 Corporate Senior Unsecured Notes20277.75%$450 Corporate Senior Unsecured Notes20275.76%$234 Term Loan A20284.47%$226 Commercial Paper Notes3 20283.75%$403 Convertible Notes20285.73%$45 Revolving Line of Credit20286.76%$156 Rhea Debt Facility20303.87%$375 Corporate Senior Unsecured Notes20316.09%$600Corporate Senior Unsecured Notes20346.21%$1,000Corporate Senior Unsecured Notes20356.57%$400Corporate Senior Unsecured Notes20426.78%$90Harmony20567.95%$500Junior Subordinated Notes2026 to 20323.15%-7.23%$34Other Non-RecourseHedge Period EndHedge StructureFixed RateNotional ($ in millions)Hedged Instrument1 5/26/2026Collar3.70% (Floor) 4.00% (Cap)$250Short-term borrowings 3/27/2033Pay fixed / Receive 1-mo Term SOFR3.79%$200Term Loan A6/10/2033Pay fixed / Receive Daily SOFR4.41%$158Rhea Debt Facility6/15/2033Fwd-starting Pay Fixed / Receive SOFR3.09%$6002026 Sr. Notes4 6/15/2037Fwd-starting Pay Fixed / Receive SOFR3.72%$3752027 Sr. Notes5Fixed Rate DebtFloating Rate Debt, Swapped to Fixed Where Noted Below 4. 2026 Sr. Note Hedges have a mandatory early termination provision by 9/15/20265. 2027 Sr. Note Hedges have a mandatory early termination provision by 6/15/2027
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Tobe Income Statement 23
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Balance Sheet 24
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Statement of Cashflows 25
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Cash Available for Reinvestment 26 (1) Represents return of capital distributions from our equity method investments included in cash provided by (used in) investing activities section of our statement of cash flows which is incremental to any equity method investment distributions found in net cash provided by operating activities. (2) Included in Other in the cash provided (used in) investing activities section of our statement of cash flows.
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Reconciliation of GAAP Net Income to Adjusted Earnings 27(1) The per share data reflects the GAAP diluted earnings per share which is the most comparable GAAP measure to our Adjusted Earnings per Share.(2) This is a non-GAAP adjustment to reflect the return on capital of our equity method investments as described below in the “Supplemental Financial Data” section on Slide 32.(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 Earnings metric, we add back the eliminations through this adjustment.(4) This adjustment is to eliminate the intercompany portion of ongoing asset management 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 Earnings metric, we add back the elimination through this adjustment.(5) 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, 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.(6) Shares used to calculate Adjusted Earnings per share represents the weighted average number of shares outstanding including our issued unrestricted common shares, restricted stock awards, restricted stock units, long-term incentive plan units, and the non-controlling interest in our Operating Partnership. We include any potential common stock issuances related to share based compensation units in the amount we believe is reasonably certain to vest. As it relates to Convertible Notes, we assess whether the instrument is more akin to debt or equity based on the value of the underlying shares compared to the conversion price during each period. If the instrument is determined to be more debt-like then we will include any related interest expense and exclude the underlying shares issuable upon conversion of the instrument. If the instrument is determined to be more equity-like and is more dilutive when treated as equity then we will exclude any related interest expense and include the weighted average shares underlying the instrument. We will consider the impact of any capped calls we hold in assessing whether an instrument is equity-like or debt like.
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Reconciliation of GAAP Net Income to Adjusted ROE 28 (1) For 2025, we changed the methodology for our calculation of Average Stockholders’ Equity to be calculated as the average of the Stockholders’ Equity at the end of the preceding year and as of the end each of the year’s four quarters. We have recast prior periods to conform with this calculation methodology.
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Reconciliation of GAAP-based Net Investment Income to Adjusted Recurring Net Investment Income 29(1) GAAP-based net investment income (loss) as reported in previous periods was not defined to include Management fees and retained interest income. It has been included here in comparative periods to reflect the new definition. (2) This is a non-GAAP adjustment to reflect the return on capital of our equity method investments as described below in the “Supplemental Financial Data” section on Slide 32.(3) GAAP net income includes an elimination of the intercompany portion of management fees received from co-investment structures in the Equity method income line item. Since GAAP Equity method income is not a component of this metric, we include the elimination of the management fee through this adjustment.
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Reconciliation of GAAP-Based Portfolio to Managed Assets 30(1) 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 $1.9 billion and $0.6 billion as of December 31, 2025 and 2024, respectively. (2) Represents assets in our co-investment structures which are not attributable to our co-investors, and therefore are not fee-generating. Such assets are attributable to us but were financed with debt issued by the co-investment structure and therefore are not reflected in the equity method investment we hold in the structure
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Explanatory Notes 31 GuidanceThe Company expects Adjusted Earnings per Share to range between $3.50 and $3.60 in 2028. The Company also expects Adjusted ROE to be more than 17% in 2028. In addition, the payout ratio of distributions of annual dividends per share as a percentage of annual Adjusted Earnings per Share is expected to decline to below 50% by 2028 and below 40% by 2030. This guidance reflects the Company’s judgments and estimates of (i) yield on its existing portfolio; (ii) yield on incremental portfolio investments, inclusive of the Company’s existing pipeline; (iii) the volume and profitability of transactions; (iv) amount, timing, and costs of debt and equity capital to fund new investments; (v) changes in costs and expenses reflective of the Company’s forecasted operations; and (vi) the general interest rate and market environment. In addition, distributions are subject to approval by the Company’s Board of Directors on a quarterly basis. The Company has not provided GAAP guidance as discussed in the Forward-Looking Statements. Adjusted Cash from Operations plus Other Portfolio Collections We operate our business in a manner that considers total cash collected from our portfolio after making necessary operating and debt service payments to assess the amount of cash we have available to fund dividends and investments. We believe that the aggregate of these items, which combine as a non-GAAP financial measure titled Adjusted Cash from Operations plus Other Portfolio Collections, is a useful measure of the liquidity we have available from our assets to fund both new investments and our regular quarterly dividends. This non-GAAP financial measure may not be comparable to similarly titled or other similar measures used by other companies. Although there is also not a directly comparable GAAP measure that demonstrates how we consider cash available for dividend payment, set forth further in the Appendix is a reconciliation of this measure to GAAP Net cash provided by operating activities.Also, Adjusted Cash from Operations plus Other Portfolio Collections differs from Net Cash Provided by (Used in) Investing Activities in that it excludes many of the uses of cash used in our investing activities such as Equity Method Investments, Purchases of and Investments in Receivables, Purchases of Debt Securities, and Collateral Provided to and Received from Hedge Counterparties. In addition, Adjusted Cash from Operations plus Other Portfolio Collections is not comparable to Net cash provided by (used in) financing activities in that it excludes many of our financing activities such as proceeds from common stock issuances and borrowings and repayments of unsecured debt.Cash Available for ReinvestmentCash Available for Reinvestment is a non-GAAP measure which is calculated as Adjusted Cash from Operations Plus Other Portfolio Collections less dividend and distribution payments made during the period. We believe Cash Available for Reinvestment is useful as a measure of our ability to make incremental investments from internally-generated capital after factoring in all necessary cash outflows to operate the business. Management uses Cash Available for Reinvestment in this way, and we believe that our investors use it in a similar fashion.
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Supplemental Financial Data 32 Adjusted Earnings and Earnings on Equity Method InvestmentsWe calculate Adjusted Earnings as GAAP net income (loss) excluding equity-based expenses, provisions for loss on receivables, amortization of intangibles, losses or (gains) from modification or extinguishment of debt facilities, non-cash tax charges and the earnings attributable to our non-controlling interest of our Operating Partnership. 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.We believe a non-GAAP measure, such as Adjusted Earnings, that adjusts for the items discussed above is and has been a meaningful indicator of our economic performance in any one period and is useful to our investors as well as management in evaluating our performance including as it relates to expected dividend payments over time. Additionally, we believe that our investors also use Adjusted 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 Adjusted Earnings 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. Given our equity method investments are in project companies, they typically have a finite expected life. We typically negotiate the purchase prices of our equity investments based on our underwritten project cash flows discounted back to a net present value, based on a target investment rate, with the cash flows to be received in the future reflecting both a return on the capital (at the investment rate) and a return of the capital we have committed to the project. We 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 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. The application of the HLBV method described above, results in GAAP income or loss in any one period that is often significantly different from the economic returns achieved from the investment in any one period as a result of the impact of tax allocations, the high levels of depreciation and other non-cash expenses that are common to renewable energy projects and the differences between the agreed upon profit and loss and the cash flow allocations. Thus, in calculating Adjusted Earnings, we adjust GAAP net income (loss) for certain of our investments where there are characteristics as described above to take into account our calculation of the return on capital (based upon the underwritten investment rate), as adjusted to reflect the performance of the project and the cash distributed. 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 Adjusted Earnings measure is an important supplement to the income (loss) from equity method investments as determined under GAAP that helps investors understand the economic performance of these investments where HLBV income can differ substantially from the economic returns in any one period.Adjusted Earnings does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), or an indication of our cash flow from operating activities (determined in accordance with GAAP), or a measure of our liquidity, or an indication of funds available to fund our cash needs, including our ability to make cash distributions. In addition, our methodology for calculating Adjusted Earnings may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported Adjusted Earnings may not be comparable to similar metrics reported by other companies.
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Supplemental Financial Data 33 Managed AssetsWe consolidate assets on our balance sheet, securitize assets off-balance sheet, and manage assets in which we co-invest with other parties via equity method investments. Therefore, certain receivables and other assets are not reflected on our balance sheet where we may have a residual interest in the performance of the investment, such as a retained interest in cash flows. Thus, we present our investments on a non-GAAP managed basis. We believe that our Managed Asset information is useful to investors because it portrays the amount of both on- and off-balance sheet receivables that we manage, which enables investors to understand and evaluate the credit performance associated with our portfolio of receivables, equity investments and residual assets in off-balance sheet assets. Our management also uses Managed Assets in this way. Our non-GAAP Managed Assets measure may not be comparable to similarly titled measures used by other companies.Adjusted Recurring Net Investment IncomeAdjusted Recurring Net Investment Income is calculated as GAAP-based Net Investment Income (Interest and Rental Income and Management Fees and Retained Interest Income, less Interest Expense), as reported within our financial statements prepared in accordance with US GAAP, plus Adjusted Income from Equity Method Investments plus loss on debt modification or extinguishment and amortization of real estate intangibles, less the elimination of our proportionate share of ongoing asset management fees earned from co-investment structures. We utilize this measure in operating our business and believe it is useful information for our investors and management for the reasons discussed in our Adjusted Earnings measure. Our Adjusted Recurring Net Investment Income measure may not be comparable to similarly titled measures used by other companies.Portfolio YieldWe calculate Portfolio Yield as the weighted average underwritten yield of the investments in our Portfolio as of the end of the period. Underwritten yield is the rate at which we discount the expected cash flows from the assets in our Portfolio to determine our purchase price. In calculating underwritten yield, we make certain assumptions, including the timing and amounts of cash flows generated by our investments, which may differ from actual results, and may update this yield to reflect our most current estimates of project performance. We believe that Portfolio Yield provides an additional metric to understand certain characteristics of our Portfolio as of a point in time. Our management uses Portfolio Yield this way and we believe that our investors use it in a similar fashion to evaluate certain characteristics of our Portfolio compared to our peers, and as such, we believe that the disclosure of Portfolio Yield is useful to our investors. Our Portfolio Yield measure may not be comparable to similarly titled measures used by other companies.Adjusted ROEAdjusted Return on Equity is a measure of the economic performance of our invested equity capital. Adjusted Return on Equity is calculated as our adjusted earnings divided by our average stockholder’s equity for the period. The direct comparable GAAP measure is GAAP-based return on equity. Adjusted Return on Equity differs from GAAP-based return on equity in that the numerator of the calculation contains those adjustments described in the Adjusted Earnings section. We believe that Adjusted Return on Equity gives investors an understanding into our performance after considering the effects of financial leverage. Our management uses it in this way. Our Adjusted Return on Equity measure may not be comparable to similarly titled measures used by other companies.
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Visit our website at www.hasi.comSecurities are offered by HASI Securities, LLC, a registered broker dealer, member FINRA and SIPC and subsidiary of HA Sustainable Infrastructure Capital, Inc. Listen to the HASI Climate Positive podcast