v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The fair value accounting guidance provides a three-level hierarchy for classifying financial instruments. The levels of inputs used to determine the fair value of our financial assets and liabilities carried on the balance sheet at fair value and for those which only disclosure of fair value is required are characterized in accordance with the fair value hierarchy established by ASC 820, Fair Value Measurements. Where inputs for a financial asset or liability fall in more than one level in the fair value hierarchy, the financial asset or liability is classified in its entirety based on the lowest level input that is significant to the fair value measurement of that financial asset or liability. We use our judgment and consider factors specific to the financial assets and liabilities in determining the significance of an input to the fair value measurements. As of June 30, 2026 and December 31, 2025, our retained interests in securitization trusts, our derivatives, receivables for which we have elected the fair value option, if any, and our debt securities were carried at fair value on the consolidated balance sheets on a recurring basis. The three levels of the fair value hierarchy are described below:
•Level 1 — Quoted prices (unadjusted) in active markets that are accessible at the measurement date.
•Level 2 — Observable prices that are based on inputs not quoted on active markets but corroborated by market data.
•Level 3 — Unobservable inputs are used when little or no market data is available.
The tables below state the estimated fair value of our financial instruments on our balance sheet. Unless otherwise discussed below, fair values for our Level 2 and Level 3 measurements are measured using a discounted cash flow model, the inputs to which consist of base interest rates and spreads over base rates. Spreads are based upon market observation and recent comparable transactions. An increase in these inputs would result in a lower fair value and a decline would result in a higher fair value. Our Senior Notes and Junior Subordinated Notes (each as defined below), and our Convertible Notes are valued using a market-based approach and observable prices. The receivables held-for-sale, if any and excluding those on which we have elected the fair value option, are carried at the lower of cost or fair value, as determined on an individual asset basis.
As of June 30, 2026
Fair ValueCarrying
Value		Level
(in millions)
Assets
Receivables
$3,091 $3,145 Level 3
Receivables held-for-sale (1)
77 73 Level 3
Debt securities (2)
72 72 Level 3
Retained interests in securitization trusts (3)
332 332 Level 3
Derivative assets4 4 Level 2
Liabilities (4)
Credit facility
$1 $1 Level 3
Commercial paper notes— — Level 3
Term loans payable479 479 Level 3
Non-recourse debt119 123 Level 3
Senior notes
3,876 3,836 Level 1
(5)
Junior subordinated notes1,149 1,109 Level 1
(5)
Convertible Notes
604 408 Level 2
Derivative liabilities— — Level 2
(1)Included in our receivables held-for-sale balance as of June 30, 2026 are $51 million of receivables for which we have elected the fair value option. The amortized cost of our receivables held-for-sale was $62 million.
(2)The amortized cost of our debt securities as of June 30, 2026, was $55 million.
(3)The amortized cost of our retained interests in securitization trusts net of allowance for credit losses as of June 30, 2026 was $383 million.
(4)Fair value and carrying value exclude unamortized financing costs.
(5)In the quarter ended June 30, 2026, we determined that the markets for these instruments have become active enough for them to be valued using Level 1 inputs.
As of December 31, 2025
Fair ValueCarrying
Value		Level
(in millions)
Assets
Receivables
$3,222 $3,280 Level 3
Receivables held-for-sale128 114 Level 3
Debt securities (1)
73 73 Level 3
Retained interests in securitization trusts (2)
300 300 Level 3
Derivative assets25 25 Level 2
Liabilities (3)
Credit facility
$46 $46 Level 3
Commercial paper notes225 225 Level 3
Term loans payable
391 391 Level 3
Non-recourse debt128 128 Level 3
Junior subordinated notes
529 505 Level 2
Senior notes
3,539 3,489 Level 2
Convertible Notes
527 408 Level 2
Derivative liabilities6 6 Level 2
(1)    The amortized cost of our debt securities as of December 31, 2025, was $43 million.
(2)    The amortized cost of our retained interests in securitization trusts net of allowance for credit losses as of December 31, 2025, was $348 million.
(3)    Fair value and carrying value exclude unamortized financing costs.
Receivables held-for-sale carried at fair value
The following table reconciles the beginning and ending balances for our Level 3 receivables held-for-sale for which we have elected the fair value option:
For the three months ended June 30,For the six months ended June 30,
2026202520262025
(in millions)
Balance, beginning of period$— $— $— $— 
Investments in receivables held-for-sale
41 — 41 — 
Unrealized gains (losses) on receivables held-for-sale (1)
10 — 10 — 
Balance, end of period$51 $— $51 $— 
(1)    Included in Gain on sale of assets within our statements of operations and in Non-cash gain on securitization within our statement of cash flows.
We elected fair value on these assets as we intend to securitize them with an institutional investor in the near term, and presenting them at fair value on our balance sheet best presents the economics we expect to realize from such transactions. We valued these assets using a discounted cash flow valuation technique using a weighted average discount rate of 6.6% as of June 30, 2026. The assets have an aggregate unpaid principal amount of $41 million, and no assets are past due.
Debt Securities
The following table reconciles the beginning and ending balances for our Level 3 debt securities that are carried at fair value on a recurring basis:
For the three months ended June 30,For the six months ended June 30,
2026202520262025
(in millions)
Balance, beginning of period$73 $7 $73 $7 
Purchases of debt securities
— 5 — 5
Equity method investee losses applied (1)
1 — 13 — 
Unrealized gains (losses) on debt securities recorded in OCI
(2)6 (14)6 
Balance, end of period$72 $18 $72 $18 
(1)    As described in Note 2, losses in excess of basis from equity method investments from which we have other outstanding instruments are allocated against those other instruments. In the three months ended June 30, 2026, we were allocated income from these investments from which we had previously applied losses to related debt securities, so previously applied losses were reversed.
We had the following debt securities in an unrealized loss position:
Estimated Fair Value
Unrealized Losses (1)
Count of Assets
Assets with a loss shorter than 12 monthsAssets with a loss longer than 12 monthsAssets with a loss shorter than 12 monthsAssets with a loss longer than 12 monthsAssets with a loss shorter than 12 monthsAssets with a loss longer than 12 months
(in millions)
June 30, 2026$60 $7 $1.2 $1.0 1 5 
December 31, 202562 7 0.3 0.9 1 5 
(1)    Loss positions are due to interest rates movements and are not indicative of credit deterioration. We have the intent and ability to hold these assets until a recovery of fair value.
In determining the fair value of our debt securities, we used a market-based risk-free rate and added a range of interest rate spreads based upon transactions involving similar assets of approximately 3% to 6% as of June 30, 2026 and December 31, 2025. The weighted average discount rates used to determine the fair value of our debt securities as of June 30, 2026 and December 31, 2025 were 9.8% and 9.7%, respectively.
Retained interests in securitization trusts
The following table reconciles the beginning and ending balances for our Level 3 retained interest in securitization trust assets that are carried at fair value on a recurring basis, with changes in fair value recorded through AOCI:
For the three months ended June 30,For the six months ended June 30,
2026202520262025
(in millions)
Balance, beginning of period$326 $265 $300 $249 
Accretion of retained interests in securitization trusts
6 5 11 9
Additions to retained interests in securitization trusts
5 11 29 19 
Collections from retained interests in securitization trusts
(4)(6)(6)(9)
Unrealized gains (losses) on retained interests in securitization trusts recorded in OCI
(1)(3)(2)4 
Balance, end of period$332 $272 $332 $272 
We had the following retained interests in securitization trusts in an unrealized loss position:
Estimated Fair Value
Unrealized Losses (1)
Count of Assets
Assets with a loss shorter than 12 monthsAssets with a loss longer than 12 monthsAssets with a loss shorter than 12 monthsAssets with a loss longer than 12 monthsAssets with a loss shorter than 12 monthsAssets with a loss longer than 12 months
(in millions)
June 30, 2026$32 $201 $1 $54 10 88 
December 31, 202531 188 1 51 8 87 
(1)    Other than the assets for which there is a reserve as discussed in Note 5, loss positions are due to interest rates movements and are not indicative of credit deterioration. We have the intent and ability to hold these assets until a recovery of fair value.
In determining the fair value of our retained interests in securitization trusts, we used a market-based risk-free rate and added a range of interest rate spreads based upon transactions involving similar assets of approximately 1% to 5% as of June 30, 2026 and December 31, 2025. The weighted average discount rates used to determine the fair value of our retained interests in securitization trusts as of June 30, 2026 and December 31, 2025 were 7.2% and 7.0%, respectively.
Non-recurring Fair Value Measurements
Our financial statements may include non-recurring fair value measurements related to acquisitions and non-monetary transactions. We may use third-party valuation firms to assist us with developing our estimates of fair value.
Consolidation of a VIE
In the quarter ended June 30, 2026, we exercised certain of our protective rights under a loan agreement to a project company. This action resulted in our ability to direct the significant activities related to the projects. Accordingly, we have consolidated the project company to which the loan was made. We used the discounted cash flow method to determine the carrying value of the assets consolidated and the non-controlling interests which represent the sponsor’s ongoing equity interest. The valuations were prepared with Level 3 inputs, which include discount rates and expected future cash flows. We used a discount rate of approximately 15% to value the $165 million of in-construction property, plant, and equipment which is now included in other assets on our balance sheet. We used a discount rate of approximately 18% to value the $14 million of non-controlling interests. No gain or loss was recognized upon consolidation.
Impairment of equity method investments
In the quarter ended June 30, 2026, we identified two equity method investments as being other than temporarily impaired, and we recorded an impairment loss of $70 million which is included in Income from equity method investments within our statements of operations. To determine the amount of the impairment, we valued the investments using the discounted cash flow method. The valuations were prepared with Level 3 inputs, which include a discount rate of 10% and expected future cash flows.