HA Sustainable Infrastructure Capital, Inc. — Second Quarter 2026 Earnings Summary

Financial Performance

• GAAP EPS was $0.92 in Q2 2026, up from $0.74 in Q2 2025.
• Adjusted EPS was $0.75 in Q2 2026, up from $0.60 in Q2 2025.
• GAAP net income attributable to controlling stockholders was $128.6 million in Q2 2026, compared to $98.4 million in Q2 2025.
• Adjusted Earnings were $98.7 million in Q2 2026, compared to $75.0 million in Q2 2025.
• GAAP-based Net Investment Income was $9.9 million in Q2 2026, compared to a loss of $3.3 million in Q2 2025.
• Adjusted Recurring Net Investment Income totaled $107.0 million in Q2 2026, a 26% increase from $85.3 million in Q2 2025.
• GAAP-based ROE was 20.3% in Q2 2026; Adjusted ROE increased to 15.2% in Q2 2026.
• Total debt outstanding was $5.9 billion as of June 30, 2026, compared to $4.7 billion as of June 30, 2025.
• Weighted-average interest cost was 6.2% in Q2 2026, compared to 5.8% in Q2 2025.
• Cash and cash equivalents totaled $250 million as of June 30, 2026.
• Total liquidity was $2.2 billion as of June 30, 2026, including $1.9 billion of unused capacity under the revolving credit facility and commercial paper program.
• Debt-to-equity ratio was 1.7x as of June 30, 2026, within the target range of 1.5x to 2.0x.

Guidance and Future Outlook

• Raised Adjusted EPS guidance for 2028 to a range of $3.55 to $3.65, up from the prior range of $3.50 to $3.60.
• Maintained guidance for Adjusted ROE of more than 17.0% in 2028.
• Expects distributions of annual dividends per share of common stock to decline to less than 50% of annual Adjusted EPS by 2028 and less than 40% by 2030.
• Expects $2-3 billion in new balance sheet/CCH1 investments in 2026.
• Pipeline of new transactions was more than $6.5 billion as of June 30, 2026.
• Guidance reflects judgments on portfolio yield, incremental investment volume and profitability, capital costs, operating expenses, and the general interest rate and market environment.

Business Segments and Product Lines

• Managed Assets grew 20% year-over-year to $17.6 billion as of June 30, 2026.
• GAAP-based Portfolio was approximately $8.2 billion as of June 30, 2026, with a yield of 9.2% for the three months ended June 30, 2026, compared to 8.2% in the prior year period.
• Equity Method Investments totaled $4.8 billion as of June 30, 2026, up 17% from $4.1 billion in Q2 2025.
• Receivables, net of allowance, and Receivables Held-for-Sale totaled $3.2 billion as of June 30, 2026, up 5% from $3.1 billion in Q2 2025.
• Closed more than $1.4 billion in balance sheet/CCH1 transactions year-to-date through Q2 2026.
• Closed new transactions totaling approximately $1.1 billion in Q2 2026, including $975 million in transactions to be held on the balance sheet or at co-investment structures.
• Weighted average yields on new Portfolio investments were underwritten at more than 11% during Q2 2026.
• Portfolio is diversified with approximately $4.1 billion in Behind-the-Meter assets, $2.6 billion in Grid-Connected assets, and the remainder in Fuels, Transportation, and Nature.
• Issued $1 billion in unsecured notes at an effective cost of approximately 5.6%.
• Increased revolver capacity by $425 million to $2.25 billion in July 2026.
• Issued no new shares through the ATM year-to-date.

Market and Competitive Landscape

• Investment activity remained elevated due to heightened demand for new electric generation.
• Portfolio credit performance remains strong with negligible losses.
• Approximately 98% of the portfolio is classified in Commercial Category 1 (low risk of capital loss), 2% in Category 2 (moderate risk), and 0% in Category 3 (substantial doubt).
• Two loans previously in Category 2 were consolidated due to the exercise of protective rights, moving the associated assets to "Other Portfolio assets."
• Two investments within Equity Method Investments recognized a GAAP impairment loss of $70 million due to changes in assumptions, including the market discount rate.

Risks and Challenges

• Forward-looking statements are subject to risks and uncertainties, including factors discussed in the "Risk Factors" section of the Form 10-K.
• GAAP earnings are sensitive to assumptions regarding the hypothetical liquidation at book value (HLBV) method, particularly regarding partnership "flip" structures and tax attribute allocations.
• Actual results may differ materially from forward-looking guidance due to changes in yield, transaction volume, capital costs, and market environments.

Management Commentary and Tone

• CEO Jeffrey A. Lipson expressed pleasure with first-half results, citing elevated investment activity and programmatic partnerships.
• CFO Chuck Melko noted continued management of the cost of capital with improved spreads in the June debt issuance.
• Management highlighted that the increase in Adjusted ROE is supported by minimal ATM share issuances in 2026.
• Management views Adjusted Recurring Net Investment Income as a helpful indicator of the full underlying economics of investments, including equity and debt investments net of interest expense.

Other Key Points

• Board of Directors approved a quarterly cash dividend of $0.425 per share of common stock, payable on October 16, 2026, to stockholders of record as of October 2, 2026.
• Estimated 282,000 metric tons of carbon emissions will be avoided annually by transactions closed in the quarter.
• Managed Assets are avoiding approximately 10.4 million metric tons of carbon emissions annually based on the proprietary CarbonCount score.
• Consolidated a project company resulting in $165 million of in-construction fixed assets, a $25 million liability, and $14 million of non-controlling interest on the balance sheet.
• Adjusted Earnings per share calculation includes weighted average shares outstanding plus non-controlling interest units and potential common stock issuances related to share-based compensation.
• No GAAP guidance was provided due to the complexity and sensitivity of the HLBV method for forecasting.