HA Sustainable Infrastructure Capital, Inc.

Greetings and welcome to HACI's fourth quarter and full year 2025 earnings conference call and webcast. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Aaron Chu, Senior Vice President of Investor Relations.

Thank you, Operator, and good afternoon to everyone joining us today for HACI's fourth quarter 2025 conference call. Earlier this afternoon, HACI distributed a press release reporting our fourth quarter 2025 results, a copy of which is available on our website, along with a slide presentation we will be referring to today. This conference call is being webcast live on the investor relations page of our website where a replay will be available later today. Some of the comments made in this call are forward looking statements which are subject to risks and uncertainties described in the risk factors section of the company's Form 10-K and other filings with the SEC. Actual results may differ materially from those stated. Today's discussion also includes some non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is available in our earnings release and presentation. Joining us on the call today are Jeff Lipson, the company's president and CEO, as well as Chuck Melko, our chief financial officer. Also available for Q&A are Susan Nickey, our chief client officer, and Mark Pangburn, our chief revenue and strategy officer. To kick things off, I will turn it over to our president and CEO, Jeff Lipson. Jeff?

Thank you, Aaron, and welcome to our fourth quarter and full year 2025 call. We are very pleased and proud to report that 2025 was an outstanding year for HACI with meaningful progress in all aspects of our business and a particularly strong finish in the fourth quarter with a higher volume of transactions closed than in any previous full year. The level of client development activity remains elevated and the demand for project level capital is extremely strong. creating continued tailwinds for our business as evidenced by both our 2025 results and our outlook for the next several years. Our climate clients asset strategy continues to thrive as we execute on closing attractive climate positive investments with programmatic clients supported by project cash flows from high quality offtakers. Turning to slide three, not only was 2025 the strongest year of results we have ever recorded, on virtually every metric used to monitor and assess our performance, but the underlying fundamentals of the business have been enhanced, establishing pathways to future continued success. Notably, nearly every facet of our business is operating at a high level right now, including new investment volumes, returns, profitability, and capital efficiency. These higher volumes are supported by a new paradigm of load growth in the United States, rising demand for third-party providers of permanent capital, and HACI's competitive advantage. We closed $4.3 billion in new transactions in 2025, 87 percent more than 2024. And our pipeline has continued to grow from more than $5.5 billion at the end of Q1 to more than $6.5 billion at the end of 2025. Not only have our investment volumes scaled meaningfully larger, we are also increasing returns on these investments. For the second year in a row, yield on new investments has exceeded 10.5 percent. Meanwhile, our bond spreads continue to narrow, and our senior unsecured term bonds are trading with a yield below 6.25 percent today. These attractive margins have been a key factor in driving adjusted EPS growth, which was 10.2 percent in 2025. We have also made significant strides enhancing our business model and capital efficiency. In 2025, we issued our inaugural junior subordinated hybrid notes. With access to this new segment of the bond market, along with our investment grade ratings and our CCH1 co-investment vehicle with KKR, we have become significantly more profitable with each new share and are issuing fewer shares to grow our business. It is also noteworthy that we upsize CCH1's equity commitments by $1 billion in the fourth quarter. This combination of one, large volumes, two, increasing profitability, and three, approved capital efficiency have combined to push our 2025 ROE above 13 percent and our incremental ROE above 19 percent. On the next few pages, I will further expand the discussion of these three items. Turning to slide four, I want to particularly highlight the enormous year we had in closing new investments in 2025. Of course, the $1.2 billion investment in the SunZia project we announced on our last quarterly call was a big contributor. But even without that investment, we closed more than $3 billion in new investments last year. This is a testament to not only how strong the underlying demand is in the U.S., but also the important role HACI is playing in the market and the strength of our business model. Importantly, we have accomplished this with no change in our risk appetite or the general range of returns on the investments. Our asset-level investment strategy continues to be well-received by our clients and is driving attractive risk-adjusted returns. Of note, historically, we have reported one figure covering the total transactions closed volume, including both the securitized and unbalanced sheet. However, going forward, we're going to break this out separately. In the dark blue bars, you can see our investment volume retained on our balance sheet and included in CCH1 totaled $3.6 billion in 2025. up approximately 140 percent year-over-year from $1.5 billion in 2024. On slide five, we display our diverse pipeline, which remains in excess of $6.5 billion. Virtually all of our markets remain active, and opportunities to invest continue to grow. Ultimately, our business is driven by fundamental economics, which outweigh policy changes as it relates to development activity. The underlying demand for power and the cost effectiveness and shorter development cycles in our asset classes combine to create an attractive investing environment. The economics of this development continues to improve as PPA rates have increased more than 40% over the past three years. In our behind the meter business, the trend towards more third party ownership and leases results in more opportunity as we've always focused on providing capital to lease portfolios. The increase in battery attachment has allowed for an increase in customer payments and a corresponding increase in our investment opportunity. Our grid-connected business is benefiting from the significant growth in the renewables pipeline, primarily driven by solar and storage, which now exceeds $230 billion. Renewables now comprise 99 percent of the projected capacity additions in 2026. And our FTN business remains a growth engine as RNG production is forecasted to more than double by 2030 and will benefit from the trend of increasing gas production and the existing infrastructure. Turning to slide six, we emphasize the diversity of our platform, which is an underlying strength of the business model. The chart depicts different asset classes achieving the highest volume in various years. Notably, after several years of minimal volume, Onshore wind investments were 33 percent of the volume in 2025. Our ability to pivot as opportunities arise among a diverse set of asset classes from a large pipeline is a key factor in the consistency of our financial results. Turning to slide seven, we recap the last five years of adjusted earnings per share. Again, I note the resilience of our business model and the outstanding execution of our team. This five-year period included a pandemic supply chain challenges, elevated inflation, a rapid rise in interest rates, policy disruption, permitting and transmission difficulties, client bankruptcies, and many other challenges. Despite these obstacles, our team remained focused on sourcing, closing, and effectively managing large and diverse volumes of high quality climate positive investments, producing these consistently outstanding results. In fact, our 10-year compound average growth rate and adjusted earnings per share is also 10%. Turning to slide eight, we emphasize that each dollar we invest has become increasingly more profitable as measured by incremental ROE, which is a metric that Chuck introduced last quarter. This metric is measured by the change in adjusted earnings divided by the change in shareholders' equity. On this basis, incremental returns in 2025 exceeded 19%, as the combination of higher yields, lower debt costs, and balance sheet efficiency continue to enhance our profitability. On slide nine, we provide an illustration of our tremendous progress achieving improved equity efficiency. Prior to CCH1, $100 of proceeds from new equity issuance resulted in $300 of new investments. The additions of CCH1, modest debt on the CCH1 vehicle, and our hybrid offering have collectively produced an outcome such that $100 of proceeds from new shares now results in $1.35 billion of new investments. This represents an improvement of more than 400 percent as measured by the earning assets that can be originated from each dollar of equity. Turning to page 10, we emphasize two large investments we closed in the fourth quarter. On the left, a joint venture with our longtime partner, Sunrun, totaling $500 million. Residential solar and storage continues to benefit from increasing utility rates and consumers' desire for affordability and resiliency. The unique structure of this joint venture enables ITC transferability in a programmatic and efficient way, allowing Sunrun to scale its business while providing an attractive risk-adjusted return to HACI. And on the right, we reemphasize the SunZia project with Pattern that we discussed on the third quarter call. Our largest investment ever This is the largest onshore wind project in North America and remains on schedule to fund in the second quarter of this year. On page 11, we reflect and update an extension of our guidance. Our consistent results allow us to once again extend our guidance out three years until 2028. In that year, we expect adjusted earnings per share to be in the range of $3.50 to $3.60. We are shifting to a nominal EPS guidance range from an EPS growth rate so that we may provide more precise updates in the future. Additionally, we expect our adjusted ROE to exceed 17 percent by 2028, driven by the profitability and efficiency discussed a few moments ago. Regarding our payout ratio, we discussed at our investor day in 2023 a trend of utilizing slower dividend growth and correspondingly more recycled retained earnings to reduce the payout ratio to 50% by 2030. We are now ahead of schedule on that trend and expect the payout ratio to be below 50% by 2028 and below 40% by 2030, as capital recycling also adds to the equity efficiency of our business model. To summarize, our three-year plan underscores our confidence in our ongoing ability to achieve our profitability objectives. Now I'd like to ask Chuck to discuss our financial results and funding activity in greater detail.