HA Sustainable Infrastructure Capital Inc

Previous wording

In this Form 10-Q, unless specifically stated otherwise or the context otherwise indicates, references to “we,” “our,” “us,” and the “Company” refer to HA Sustainable Infrastructure Capital, Inc., a Delaware corporation formerly known as Hannon Armstrong Infrastructure Capital, Inc. prior to July 2, 2024, Hannon Armstrong Sustainable Infrastructure, L.P., and any of our other subsidiaries. Hannon Armstrong Sustainable Infrastructure, L.P. is a Delaware limited partnership of which we are the sole general partner and to which we refer in this Form 10-Q as our “Operating Partnership.” We invest in projects which, among others things, are focused on reducing the impact of greenhouse gases that have been scientifically linked to climate change. We refer to these gases, which are often for consistency expressed as carbon dioxide equivalents, as carbon emissions.

Current wording

In this Form 10-Q, unless specifically stated otherwise or the context otherwise indicates, references to “we,” “our,” “us,” and the “Company” refer to HA Sustainable Infrastructure Capital, Inc., a Delaware corporation formerly known as Hannon Armstrong Sustainable Infrastructure Capital, Inc. prior to July 2, 2024, Hannon Armstrong Sustainable Infrastructure, L.P., and any of our other subsidiaries. Hannon Armstrong Sustainable Infrastructure, L.P. is a Delaware limited partnership of which we are the sole general partner and to which we refer in this Form 10-Q as our “Operating Partnership.” We invest in projects which, among others things, are focused on reducing the impact of greenhouse gases that have been scientifically linked to climate change. We refer to these gases, which are often for consistency expressed as carbon dioxide equivalents, as carbon emissions.

Previous wording

We are a climate positive investment firm that actively partners with clients to deploy real assets that facilitate the energy transition. With more than $12 billion in managed assets, our vision is that every investment improves our climate future. Our investments take many forms, including equity, joint ventures, real estate, receivables or securities, and other financing transactions. In addition to Net Investment Income from our portfolio, we also generate ongoing fees through gain-on-sale securitization transactions, asset management, and other services.

Current wording

We are a climate positive investment firm that actively partners with clients to deploy real assets that facilitate the energy transition. With more than $13 billion in managed assets, our vision is that every investment improves our climate future. Our investments take many forms, including equity, joint ventures, real estate, receivables or securities, and other financing transactions. In addition to Net Investment Income from our portfolio, we also generate ongoing fees through gain-on-sale securitization transactions, asset management, and other services.

Previous wording

We prefer investments in which the assets use proven technology and have a long-term, creditworthy off-taker or counterparties. For BTM assets, the off-taker or counterparty may be the building owner or occupant, and our investment may be secured by the installed improvements or other real estate rights. For GC assets, the off-takers or counterparties may be utility or electric users who have entered into contractual commitments, such as power purchase agreements (“PPAs”), to purchase power produced by a renewable energy project at a specified price with potential price escalators for a portion of the project’s estimated life.

Current wording

We prefer investments in which the assets use proven technology and have long-term, creditworthy off-takers or counterparties. For BTM assets, the off-taker or counterparty may be the building owner or occupant, and our investment may be secured by the installed improvements or other real estate rights. For GC assets, the off-takers or counterparties may be utility or electric users who have entered into contractual commitments, such as power purchase agreements (“PPAs”), to purchase power produced by a renewable energy project at a specified price with potential price escalators for a portion of the project’s estimated life.

Previous wording

We completed approximately $260 million and $822 million of transactions during the three and six months ended June 30, 2024, respectively, compared to approximately $426 million and $815 million during the same period in 2023, respectively. As of June 30, 2024, pursuant to our strategy of holding transactions on our balance sheet, we held approximately $6.2 billion of transactions on our balance sheet, which we refer to as our “Portfolio.” As of June 30, 2024, our Portfolio consisted of approximately 500 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. For those transactions that we choose not to hold on our balance sheet, we transfer all or a portion of the economics of the transaction, 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 June 30, 2024, we managed approximately $6.8 billion in assets in these securitization trusts or vehicles that are not consolidated on our balance sheet. When combined with our Portfolio, as of June 30, 2024, we manage approximately $13 billion of assets which we refer to as our “Managed Assets”.

Current wording

We completed approximately $396 million and $1.2 billion of transactions during the three and nine months ended September 30, 2024, respectively, compared to approximately $973 million and $1.8 billion during the same period in 2023, respectively. As of September 30, 2024, pursuant to our strategy of holding transactions on our balance sheet, we held approximately $6.3 billion of transactions on our balance sheet, which we refer to as our “Portfolio.” As of September 30, 2024, our Portfolio consisted of approximately 520 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. For those transactions that we choose not to hold on our balance sheet, we transfer all or a portion of the economics of the transaction, 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 September 30, 2024, we managed approximately $6.8 billion in assets in these securitization trusts or vehicles that are not consolidated on our balance sheet. When combined with our Portfolio, as of September 30, 2024, we manage approximately $13 billion of assets which we refer to as our “Managed Assets”.

Previous wording

40 - typically on a priority basis. Our debt investments in various renewable energy or other sustainable infrastructure projects or portfolios of projects are generally secured by the installed improvements, or other real estate rights. Our energy efficiency debt investments are usually assigned the payment stream from the project savings and other contractual rights, often using our pre-existing master purchase agreements with the ESCOs.

Current wording

41 - typically on a priority basis. Our debt investments in various renewable energy or other sustainable infrastructure projects or portfolios of projects are generally secured by the installed improvements, or other real estate rights. Our energy efficiency debt investments are usually assigned the payment stream from the project savings and other contractual rights, often using our pre-existing master purchase agreements with the ESCOs.

Previous wording

We have a large and active pipeline of potential new opportunities that are in various stages of our underwriting process. We believe the Inflation Reduction Act signed into law on August 16, 2022, incentivizes the construction of and investment in climate solutions and will result in additional investment opportunities in the markets in which we invest over the next several years, which may result in increases in our pipeline in the future. 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. As of June 30, 2024, our pipeline consisted of more than $5.5 billion in new equity, debt and real estate opportunities. Of our pipeline, approximately 55% is related to BTM assets and 22% is related to GC assets, with the remainder related to FTN. There can, however, 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.

Current wording

We have a large and active pipeline of potential new opportunities that are in various stages of our underwriting process. We believe the Inflation Reduction Act signed into law on August 16, 2022, incentivizes the construction of and investment in climate solutions and will result in additional investment opportunities in the markets in which we invest over the next several years, which may result in increases in our pipeline in the future. 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. As of September 30, 2024, our pipeline consisted of more than $5.5 billion in new equity, debt and real estate opportunities. Of our pipeline, approximately 46% is related to BTM assets and 30% is related to GC assets, with the remainder related to FTN. There can, however, 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.

Previous wording

Our Portfolio totaled approximately $6.2 billion as of June 30, 2024 and included approximately $3.0 billion of BTM assets and approximately $2.4 billion of GC assets, and approximately $0.8 billion of FTN assets. Approximately 52% of our Portfolio consisted of unconsolidated equity investments in renewable energy related projects. Approximately 41% consisted of fixed-rate receivables and debt securities, which are classified as investments on our balance sheet, approximately 4% consisted of floating-rate receivables, and 3% of our Portfolio was real estate leased to renewable energy projects under lease agreements. Our Portfolio consisted of over 500 transactions with an average size of $12 million and the weighted average remaining life of our Portfolio (excluding match-funded transactions) of approximately 17 years as of June 30, 2024.

Current wording

Our Portfolio totaled approximately $6.3 billion as of September 30, 2024 and included approximately $3.0 billion of BTM assets and approximately $2.4 billion of GC assets, and approximately $0.9 billion of FTN assets. Approximately 51% of our Portfolio consisted of unconsolidated equity investments in renewable energy related projects. Approximately 42% consisted of fixed-rate receivables and debt securities, which are classified as investments on our balance sheet, approximately 5% consisted of floating-rate receivables, and 2% of our Portfolio was real estate leased to renewable energy projects under lease agreements. Our Portfolio consisted of over 520 transactions with an average size of $12 million and the weighted average remaining life of our Portfolio (excluding match-funded transactions) of approximately 17 years as of September 30, 2024.

Previous wording

(1) Excludes receivables held for sale of $36 million.

Current wording

(1) Excludes receivables held for sale of $22 million.

Previous wording

•Net income increased by $13 million due to an increase in revenue of $20 million and an increase in income from equity method investments of $25 million, offset by a $19 million increase in total expenses, and a $12 million increase in income tax expense.

Current wording

•Net income decreased by $41 million due to a decrease in revenue of $8 million, a decrease in income from equity method investments of $26 million and an increase in total expenses of $9 million, partially offset by a $2 million increase in income tax benefit.

Previous wording

•Total revenue increased by $20 million due to a $15 million increase in interest income and securitization asset income, driven by a higher average Managed Assets balance and higher average interest rate. Rental income decreased by $6 million due to the sale of real estate assets in 2023 and 2024. Gain on sale and other income increased by $11 million, driven by a change in the mix and volume of assets being securitized.

Current wording

•Total revenue decreased by $8 million due to a $15 million decrease in gain on sale income, the result of a change in the mix and volume of assets being securitized. Interest and securitization asset income increased $13 million, driven by a higher average receivables and securitization assets balance. Rental income decreased by $6 million due to the sale of real estate assets in 2023 and 2024.

Previous wording

•Interest expense increased by $20 million primarily due to a larger average outstanding debt balance and a higher average interest rate. We recorded a $4 million benefit for loss on receivables and securitization assets, driven primarily by a reduction in our reserve related to the contribution of assets into a co-investment vehicle.

Current wording

•Interest expense increased by $16 million primarily due to a larger average outstanding debt balance and a higher average interest rate. We recorded a $1 million provision for loss on receivables and securitization assets, driven primarily by new loans and loan commitments made during the quarter.

Previous wording

•Compensation and benefits and general and administrative expenses increased by $5 million primarily due to growth of the company and to a change in our retirement policy, resulting in the acceleration of share-based compensation expense.

Current wording

•Compensation and benefits and general and administrative expenses increased by $1 million primarily due to growth of the company.

Previous wording

•Income (loss) from equity method investments using HLBV allocations increased by $25 million primarily due to allocations of income in the current period related to tax credits allocated to other investors.

Current wording

•Income (loss) from equity method investments using HLBV allocations decreased by $26 million primarily due to allocations of mark-to-market losses related to power purchase agreements held by certain of the projects in which we have invested.

Previous wording

•Income tax expense increased by $12 million primarily due to higher pre-tax book income.

Current wording

•Income tax benefit increased by $2 million primarily due to lower pre-tax book income (loss).

Previous wording

Comparison of the Six Months Ended June 30, 2024 vs. Six Months Ended June 30, 2023

Current wording

Comparison of the Nine Months Ended September 30, 2024 vs. Nine Months Ended September 30, 2023

Previous wording

•Net income increased by $113 million due to an increase in income from equity method investments of $161 million and an increase in total revenue of $57 million, offset by an increase in total expenses of $48 million and an increase in income tax expense of $57 million.

Current wording

•Net income increased by $73 million due to an increase in income from equity method investments of $135 million and an increase in total revenue of $49 million, offset by an increase in total expenses of $56 million and an increase in income tax expense of $55 million.

Previous wording

•Total revenue increased by $57 million due to a $42 million increase in interest income and securitization income driven by higher Managed Assets. Rental income decreased by $11 million due to the sale of real estate assets in 2023 and 2024. Gain on sale and other income increased by $25 million, driven by a change in the mix and volume of assets being securitized, which included the balance sheet rotation of certain land and government receivable assets.

Current wording

•Total revenue increased by $49 million due to a $56 million increase in interest income and securitization income driven by higher receivables and securitization assets balances. Rental income decreased by $17 million due to the sale of real estate assets in 2023 and 2024. Gain on sale and other income increased by $10 million, driven by a change in the mix and volume of assets being securitized, which included the balance sheet rotation of certain land and government receivable assets.

Previous wording

•Interest expense increased by $44 million primarily due to a larger average outstanding debt balance and a higher average interest rate. We recorded a benefit for loss on receivables of $2 million driven primarily by a reduction in our reserve related to the contribution of assets into a co-investment vehicle.

Current wording

•Interest expense increased by $60 million primarily due to a larger average outstanding debt balance and a higher average interest rate. We recorded a benefit for loss on receivables of $1 million driven primarily by a reduction in our reserve related to the contribution of assets into a co-investment vehicle, partially offset by loans and loan commitments made during the period.

Previous wording

•Compensation and benefits and general and administrative expense increased by $8 million primarily due to growth of the company.

Current wording

•Compensation and benefits and general and administrative expense increased by $9 million primarily due to growth of the company.

Previous wording

•Income from equity method investments increased by $161 million primarily due to allocations of income in the current period related to tax credits allocated to other investors in a grid-connected utility-scale solar project, as those tax credits reduced the tax equity investors ongoing claim on the net assets of the project, as well as due to an allocation of income related to mark-to-market income related to a power price derivative held by one of the projects in which we have invested.

Current wording

•Income from equity method investments increased by $135 million primarily due to allocations of income related to tax credits allocated to other investors in a grid-connected utility-scale solar project, as those tax credits reduced the tax equity investors ongoing claim on the net assets of the project.

Previous wording

•Income tax expense increased by $57 million primarily due to larger income before income taxes driven primarily by income from equity method investments discussed above.

Current wording

•Income tax expense increased by $55 million primarily due to larger income before income taxes driven primarily by income from equity method investments discussed above.

Previous wording

45 - 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.

Current wording

46 - 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.

Previous wording

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 June 30, 2024 and 2023.

Current wording

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 nine months ended September 30, 2024 and 2023.

Previous wording

The table below provides a reconciliation of our GAAP net income (loss) to adjusted earnings for the three and six months ended June 30, 2024 and 2023.

Current wording

The table below provides a reconciliation of our GAAP net income (loss) to adjusted earnings for the three and nine months ended September 30, 2024 and 2023.

Previous wording

(4)In addition to these provisions, in the six months ended June 30, 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 this investment is included in our Average Annual Realized Loss on Managed Assets metric disclosed below.

Current wording

(4)In addition to these provisions, in the nine months ended September 30, 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

Previous wording

47 - 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 will assess the market characteristics around the instrument to determine if it is more akin to debt or equity based on the value of the underlying shares compared to the conversion price. If the instrument is 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 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 in assessing whether an instrument is equity-like or debt like.

Current wording

(5)Shares used to calculated 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 will assess the market characteristics around the instrument to determine if it is more akin to debt or equity based on the value of the underlying shares compared to the conversion price. If the instrument is 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 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 in assessing whether an instrument is equity-like or debt like.

Previous wording

(2) For the six months and TTM ended June 30, 2024, interest paid includes a $19 million benefit from the settlement of a derivative which was designated as a cash flow hedge.

Current wording

(2) For the nine months and TTM ended September 30, 2024, interest paid includes a $19 million benefit from the settlement of a derivative which was designated as a cash flow hedge.

Previous wording

Our Portfolio totaled approximately $6.2 billion as of June 30, 2024. Unlevered portfolio yield was 8.0% as of June 30, 2024 and 7.9% as of December 31, 2023. See Note 6 to our financial statements and MD&A - Our Business in this Form 10-Q for additional discussion of the characteristics of our portfolio as of June 30, 2024.

Current wording

Our Portfolio totaled approximately $6.3 billion as of September 30, 2024. Unlevered portfolio yield was 8.1% as of September 30, 2024 and 7.9% as of December 31, 2023. See Note 6 to our financial statements and MD&A - Our Business in this Form 10-Q for additional discussion of the characteristics of our portfolio as of September 30, 2024.

Previous wording

As a part of our investment process, we calculate the estimated metric tons of carbon emissions avoided by our investments by applying emissions factor data representing the locational marginal emissions associated with a projects location to an estimate of a project’s energy production or savings to compute an estimate of metric tons of carbon emissions avoided. We then determine the metric tons of carbon emissions avoided per thousand dollars of investments, in a calculation we refer to as CarbonCount, which enables us to measure the impact our investments have on avoiding carbon emissions. We estimate that our investments originated during the quarter ended June 30, 2024, will avoid annual carbon emissions by approximately 60,000 metric tons, equating to a CarbonCount® of 0.26. We estimate that our investments made since 2013 have cumulatively avoided annual carbon emissions by over 7 million metric tons.

Current wording

As a part of our investment process, we calculate the estimated metric tons of carbon emissions avoided by our investments by applying emissions factor data representing the locational marginal emissions associated with a projects location to an estimate of a project’s energy production or savings to compute an estimate of metric tons of carbon emissions avoided. We then determine the metric tons of carbon emissions avoided per thousand dollars of investments, in a calculation we refer to as CarbonCount, which enables us to measure the impact our investments have on avoiding carbon emissions. We estimate that our investments originated during the quarter ended September 30, 2024, will avoid annual carbon emissions by approximately 70,000 metric tons, equating to a CarbonCount® of 0.18. We estimate that our investments made since 2013 have cumulatively avoided annual carbon emissions by over 7 million metric tons.

Previous wording

Capital markets activity during the six months ended June 30, 2024

Current wording

Capital markets activity during the nine months ended September 30, 2024

Previous wording

During the six months ended 2024, we increased the available capacity available under our unsecured revolving credit facility to $1.25 billion, and extended the maturity of the facility to April 2028. We also extended the maturity of our unsecured term loan facility to April 2027, and used proceeds from the unsecured revolving credit facility to partially prepay our unsecured term loan facility by $275 million. We also increased the available capacity under our green commercial paper program to $125 million, and extended the term of the facility to April 2026. Also in June 2024, we established a senior secured credit facility, designed to warehouse climate solutions assets until they achieve key technical milestones, at which point we may consider them for sale to large institutional investors under our established securitization programs. During the six months ended June 30, 2024, we issued $82 million in equity, issued an additional $200 million principal amount of 2027 Senior Unsecured Notes for proceeds of $204 million, and issued $94 million of non-recourse debt secured by equity method investments.

Current wording

During the nine months ended September 30, 2024, we increased the available capacity available under our unsecured revolving credit facility to $1.25 billion, and extended the maturity of the facility to April 2028. We also extended the maturity of our unsecured term loan facility to April 2027, and used proceeds from the unsecured revolving credit facility to partially prepay our unsecured term loan facility by $275 million. We also increased the available capacity under our green commercial paper program to $125 million, and extended the term of the facility to April 2026. Also in June 2024, we established a senior secured credit facility, designed to warehouse climate solutions assets until they achieve key technical milestones, at which point we may consider them for sale to large institutional investors under our established securitization programs. During the nine months ended September 30, 2024, we issued $181 million in equity, issued an additional $200 million principal amount of 2027 Senior Unsecured Notes for proceeds of $204 million, and issued $94 million of non-recourse debt secured by equity method investments. In the quarter ended September 30, 2024, we issued $700 million of senior unsecured notes due 2034 at a yield to maturity of 6.476% and used $400m of the net proceeds from such offering to redeem our 6.00% Senior Notes due 2025, and the remainder to temporarily repay a portion of the outstanding borrowings under our unsecured revolving credit facility.

Previous wording

The amount of financial leverage we may deploy for particular assets 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 1.8 to 1 as of June 30, 2024, below our current board-approved leverage limit of up to 2.5 to 1. Our percentage of fixed rate debt including the impact of our interest rate derivatives was approximately 99% as of June 30, 2024, 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.

Current wording

The amount of financial leverage we may deploy for particular assets 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 1.8 to 1 as of September 30, 2024, below our current board-approved leverage limit of up to 2.5 to 1. Our percentage of fixed rate debt including the impact of our interest rate derivatives was approximately 100% as of September 30, 2024, which is at the top of 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.

Previous wording

We had approximately $161 million and $75 million of unrestricted cash, cash equivalents, and restricted cash as of June 30, 2024 and December 31, 2023, respectively. The following table summarizes our cash flows for the six months ended June 30, 2024 and 2023. 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 $632 million for the six months ended June 30, 2024.

Current wording

We had approximately $59 million and $75 million of unrestricted cash, cash equivalents, and restricted cash as of September 30, 2024 and December 31, 2023, respectively. The following table summarizes our cash flows for the nine months ended September 30, 2024 and 2023. 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 $740 million for the nine months ended September 30, 2024.

Previous wording

Cash provided by (used in) operating activities for the six months ended June 30, 2024 was $70 million lower than the same period ended June 30, 2023. Net income was $113 million higher in the current period, which was offset by higher net negative adjustments to net income of $183 million when compared to the prior period.

Current wording

Cash provided by (used in) operating activities for the nine months ended September 30, 2024 was $74 million lower than the same period ended September 30, 2023. Net income was $73 million higher in the current period, which was offset by higher net negative adjustments to net income of $147 million when compared to the prior period.

Previous wording

Cash provided by (used in) investing activities for the six months ended June 30, 2024 was $873 million higher than the same period ended June 30, 2023. This was driven by $397 million higher principal collections from receivables in the current period, $209 million of which was driven by a large, one-time prepayment. We received $92 million more from the sales of receivables in the period ended June 30, 2024 than the same period in the prior year. We invested $261 million less in equity method investments in the period ended June 30, 2024 than the same period in the prior year.

Current wording

Cash provided by (used in) investing activities for the nine months ended September 30, 2024 was $1.4 billion higher than the same period ended September 30, 2023. This was driven by $341 million higher principal collections from receivables in the current period, $209 million of which was driven by a large, one-time prepayment. We received $117 million more from the sales of receivables in the period ended September 30, 2024 than the same period in the prior year. We invested $383 million less in equity method investments and $519 million less in receivables and investments in the period ended September 30, 2024 than the same period in the prior year.

Previous wording

Cash provided by (used in) financing activities for the six months ended June 30, 2024 was $693 million lower than the same period ended June 30, 2023, primarily driven by lower borrowings net of principal repayments of approximately $403 million than in the prior period, and lower equity issuances of $276 million.

Current wording

Cash provided by (used in) financing activities for the nine months ended September 30, 2024 was $1.4 billion lower than the same period ended September 30, 2023, primarily driven by lower borrowings net of principal repayments of approximately $1 billion than in the prior period, and lower equity issuances of $285 million.

Previous wording

We have relationships with non-consolidated entities or financial partnerships, such as entities often referred to as structured investment vehicles, or special purpose or variable interest entities, established to facilitate the sale of securitized assets. Other than our securitization assets (including any outstanding servicer advances) of approximately $247 million as of June 30, 2024, that may be at risk in the event of defaults or prepayments in our securitization trusts and as discussed below, and except as disclosed in Note 9 to our financial statements in this Form 10-Q, 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. 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.

Current wording

We have relationships with non-consolidated entities or financial partnerships, such as entities often referred to as structured investment vehicles, or special purpose or variable interest entities, established to facilitate the sale of securitized assets. Other than our securitization assets (including any outstanding servicer advances) of approximately $258 million as of September 30, 2024, that may be at risk in the event of defaults or prepayments in our securitization trusts and as discussed below, and except as disclosed in Note 9 to our financial statements in this Form 10-Q, 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. 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.