HA Sustainable Infrastructure Capital, Inc.

operation when we fund our investment. This is a reminder that our investments occur at a de-risk stage of development and we typically do not incur permitting or policy risk. Further, this graphic provides a depiction of the stage of the investments in our pipeline and strong evidence that our pipeline is not at risk related to permitting tariffs or subsequent tax policy changes. Turning to page 6, our pipeline has grown over the past few quarters and now exceeds $6 billion. Our pie chart reinforces the diversification of our business with strong representation from each of our markets and a new slice representing the next frontier asset classes discussed on our February earnings call. The -the-meter pipeline includes a long list of energy efficiency, community solar, and residential solar and storage projects with several existing and new clients. The grid connected pipeline is also very active as many developers are in search of capital to execute on their pipelines and our fuels transportation and nature pipeline continues to reflect the significant opportunity particularly in renewable natural gas and transportation which are less impacted by policy changes. Turning to page 7, I'd like to emphasize the significant improvement in the efficiency of our balance sheet. Putting aside our securitization activity and retained capital, prior to CCH1 closing in 2024, $100 of equity raising resulted in $300 of investments. Following CCH1, we have doubled the investment dollars for each dollar of equity. Now that we have closed the debt facility at CCH1 with a vehicle leverage target of 0.5, the investment dollars for each dollar of equity has tripled from the original business model. As a reminder, we also earn fees on both the KKR equity investment and the funded CCH1 debt balance. This slide is a powerful reminder of the significant strides we have made in our efforts to grow earnings while limiting additional equity issuance. And with that, I will pass the call over to Chuck Mucco to discuss our financial results.

Thanks, Jeff. Before I get into our quarterly results, I would like to take a minute to discuss the ways we create value for our shareholders. First, we generate returns from closing a creative transactions into our portfolio, either through our CCH1 structure or directly onto our balance sheet and minimizing the cost of capital related to our funding sources. Second, once we have funded the investment, we can further optimize the portfolio and also reinvest cash received into other high-yielding investments. And lastly, we generate recurring and one-time fees related to our securitization activities and CCH1. These fees typically do not require any equity capital, which further enhances our return on equity. Now to take a look at our transaction activity, on slide eight, we have closed approximately 900 million in transactions in the first half of this year, which is 9% higher than last year. Q2 was lower than Q1 and was not the result of a particular theme, rather normal course changes in the closing timeline. Given the strength of our pipeline, we feel good about the outlook of closings the remainder of the year and the total being higher than 2024. We continue to be successful in closing transactions with double-digit yields and had a weighted average closing yield of greater than .5% and continue to execute across all of our asset classes. On slide nine, we are meaningfully scaling our platform with managed assets of $14.6 billion and a portfolio of $7.2 billion, up 13% and 16% respectively from the same time last year. Our CCH1 co-investment structure is now $1.1 billion of funded assets and with the recent debt transaction at CCH1 has $1.5 billion of additional capacity that we expect will be filled before the end of 2026. As a reminder, the investments in CCH1 are comprised of both receivables and equity investments, but due to the structure show up in equity method investments on our balance sheet. Our portfolio yield is .3% and we expect it to increase over time as we fund the higher yielding investments that we have closed over the past year. To sum it up, we have built a base of diversified transactions creating a recurring income stream that is a reliable source of income year after year, especially given the high quality performance of the assets as is evidenced by a realized loss rate of less than 10 basis points. On slide 10, we are making a modification to one of our metrics, adjusted net investment income, to include other recurring sources of revenue and it is now called adjusted recurring net investment income. In addition to the income generated from our portfolio, we're also beginning to generate meaningful recurring fees from our retained interest in securitizations and CCH1 asset management fees. Combining these other recurring income sources with our portfolio income will provide a metric that is a helpful indicator of the growing high quality recurring income that we are generating. When comparing our adjusted recurring net investment income for the first half of 2025 of 164 million to the same period last year, it has grown 19%. As a reminder, this is not our only source of income and we also have income from gain on sale from our securitization activities and upfront fees from our CCH1 co-investment structure, which are more dependent on new transactions. On slide 11, the efforts we have put into scaling a high quality investment platform have resulted in our third investment grade rating. We already had this rating with Moody's and Fitch and we were recently upgraded to investment grade by S&P. Having three investment grade ratings assists us in minimizing our cost of debt. This upgrade from S&P is a notable validation of our business model, especially given the macro economic backdrop that we have seen thus far in 2025. Subsequent to receiving our S&P upgrade, we issued 1 billion of bonds with 600 million that matures in 2031 and 400 million that matures in 2035. The proceeds were largely used to refinance 900 million of debt and this transaction displays our capabilities in managing our debt structure to minimize risk and cost. To further illustrate these capabilities, we partially tendered the 2026 bonds that were issued in 2021 when the 10 year treasury was at 75 basis points and it was evident that interest rates could be much higher when we refinanced the bonds. We managed our business and scaled our platform to give us access to the investment grade market and also executed some hedges and were able to refinance at a cost that keeps us well positioned to meet our earnings guidance and hit our target ROE. This is a great example of the resilient balance sheet we have built and the capabilities of our liability platform. Related to our capital structure, we ended the quarter with a debt to equity ratio of 1.8 times and continue to operate within our target range of one and a half to two times. Lastly, we continue to operate with strong levels of liquidity, which was 1.4 billion at the end of the second quarter. This liquidity will provide us flexibility in funding our business and managing the refinancing of our remaining 2026 bond maturity. On slide 12, we illustrate the trend in our portfolio yield and our realized cost of debt. We have been able to maintain our margins even as interest rates have risen and it's expect to see our portfolio yield further increase as our higher yielding investments are funded. We will see a slight increase in our cost of debt next quarter when the recent debt issuance impacts our interest expense. The effective weighted average cost of this recent issuance was .28% and we expect it to impact our total average cost by approximately 20 basis points. On slide 13, our Q2 adjusted EPS was 60 cents and we are continuing to deliver an attractive return with our ROE of .9% in Q2. Our newly modified metric, adjusted recurring investment income was 85 million for the quarter and increased 25% from the same period in the prior year. Our gain on sale, origination fee and other income was 9 million. As highlighted on our Q1 call, our full year gain on sale activity is expected to be more in line with the level seen between 2021 and 2023 and we expect the majority of the total gain on sale this year to come through in the second half of the year due to the expected timing of closings. Overall, we are executing on the activities that will continue to deliver value through the growth of our adjusted recurring investment income and the efficiency created from CCH1 on the need for equity capital and we believe we are well on track to deliver on our guidance to grow earnings into 2027. Before I hand the call back to Jeff, in an effort to ensure we are providing information that is most useful to our investors, we will be publishing on our website a summary of our key historical metrics that should assist in building models. We hope that it is helpful and certainly would like to hear your feedback. With that, I will pass it back to Jeff for a few topics in closing.

Thanks, Chuck. Turning to page 14, we present our sustainability and impact highlights, noting our cumulative carbon count and water count numbers reflect the significant impact of our investment strategy over time. Including on page 15, our business model has produced a powerful combination of robust investment activity, access to deep pools of capital, attractive margins, and results that are non-cyclical and sustainable in all interest rate and policy environments. The core components of this resilient business model have been in place for several years, validating its true durability. Successful execution of this business model relies on a talented team and my HACI colleagues continue to flawlessly and relentlessly overcome all obstacles reflected in our ongoing sustainability and sustainability goals. As always, thank you to this outstanding team. Operator, please open the line for questions.