000148813912/312024Q1FALSEhttp://fasb.org/us-gaap/2023#PropertyPlantAndEquipmentOtherNethttp://fasb.org/us-gaap/2023#PropertyPlantAndEquipmentOtherNethttp://fasb.org/us-gaap/2023#LongTermDebtCurrenthttp://fasb.org/us-gaap/2023#LongTermDebtCurrenthttp://fasb.org/us-gaap/2023#LongTermDebtAndCapitalLeaseObligationshttp://fasb.org/us-gaap/2023#LongTermDebtAndCapitalLeaseObligations00014881392024-01-012024-03-310001488139us-gaap:CommonClassAMember2024-05-01xbrli:shares0001488139us-gaap:CommonClassBMember2024-05-0100014881392024-03-31iso4217:USD00014881392023-12-310001488139us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2024-03-310001488139us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2023-12-31iso4217:USDxbrli:shares0001488139us-gaap:CommonClassAMember2023-12-310001488139us-gaap:CommonClassAMember2024-03-310001488139us-gaap:CommonClassBMember2023-12-310001488139us-gaap:CommonClassBMember2024-03-3100014881392023-01-012023-03-3100014881392022-12-310001488139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-12-310001488139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-12-310001488139us-gaap:AdditionalPaidInCapitalMember2022-12-310001488139us-gaap:RetainedEarningsMember2022-12-310001488139us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001488139us-gaap:TreasuryStockCommonMember2022-12-310001488139us-gaap:NoncontrollingInterestMember2022-12-310001488139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-01-012023-03-310001488139us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001488139us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001488139us-gaap:NoncontrollingInterestMember2023-01-012023-03-310001488139us-gaap:RetainedEarningsMember2023-01-012023-03-3100014881392023-03-310001488139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-03-310001488139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-03-310001488139us-gaap:AdditionalPaidInCapitalMember2023-03-310001488139us-gaap:RetainedEarningsMember2023-03-310001488139us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001488139us-gaap:TreasuryStockCommonMember2023-03-310001488139us-gaap:NoncontrollingInterestMember2023-03-310001488139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-12-310001488139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-12-310001488139us-gaap:AdditionalPaidInCapitalMember2023-12-310001488139us-gaap:RetainedEarningsMember2023-12-310001488139us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001488139us-gaap:TreasuryStockCommonMember2023-12-310001488139us-gaap:NoncontrollingInterestMember2023-12-310001488139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-01-012024-03-310001488139us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001488139us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001488139us-gaap:NoncontrollingInterestMember2024-01-012024-03-310001488139us-gaap:RetainedEarningsMember2024-01-012024-03-310001488139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2024-03-310001488139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2024-03-310001488139us-gaap:AdditionalPaidInCapitalMember2024-03-310001488139us-gaap:RetainedEarningsMember2024-03-310001488139us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001488139us-gaap:TreasuryStockCommonMember2024-03-310001488139us-gaap:NoncontrollingInterestMember2024-03-310001488139amrc:ProjectRevenueMemberamrc:NorthAmericaRegionsMember2024-01-012024-03-310001488139amrc:ProjectRevenueMemberamrc:USFederalMember2024-01-012024-03-310001488139amrc:ProjectRevenueMemberamrc:EuropeSegmentMember2024-01-012024-03-310001488139amrc:AlternativeFuelsMemberamrc:ProjectRevenueMember2024-01-012024-03-310001488139us-gaap:AllOtherSegmentsMemberamrc:ProjectRevenueMember2024-01-012024-03-310001488139amrc:ProjectRevenueMember2024-01-012024-03-310001488139amrc:OperationsAndMaintenanceRevenueMemberamrc:NorthAmericaRegionsMember2024-01-012024-03-310001488139amrc:OperationsAndMaintenanceRevenueMemberamrc:USFederalMember2024-01-012024-03-310001488139amrc:OperationsAndMaintenanceRevenueMemberamrc:EuropeSegmentMember2024-01-012024-03-310001488139amrc:AlternativeFuelsMemberamrc:OperationsAndMaintenanceRevenueMember2024-01-012024-03-310001488139us-gaap:AllOtherSegmentsMemberamrc:OperationsAndMaintenanceRevenueMember2024-01-012024-03-310001488139amrc:OperationsAndMaintenanceRevenueMember2024-01-012024-03-310001488139amrc:EnergyAssetsRevenueMemberamrc:NorthAmericaRegionsMember2024-01-012024-03-310001488139amrc:EnergyAssetsRevenueMemberamrc:USFederalMember2024-01-012024-03-310001488139amrc:EnergyAssetsRevenueMemberamrc:EuropeSegmentMember2024-01-012024-03-310001488139amrc:EnergyAssetsRevenueMemberamrc:AlternativeFuelsMember2024-01-012024-03-310001488139amrc:EnergyAssetsRevenueMemberus-gaap:AllOtherSegmentsMember2024-01-012024-03-310001488139amrc:EnergyAssetsRevenueMember2024-01-012024-03-310001488139amrc:OtherRevenueMemberamrc:NorthAmericaRegionsMember2024-01-012024-03-310001488139amrc:OtherRevenueMemberamrc:USFederalMember2024-01-012024-03-310001488139amrc:OtherRevenueMemberamrc:EuropeSegmentMember2024-01-012024-03-310001488139amrc:OtherRevenueMemberamrc:AlternativeFuelsMember2024-01-012024-03-310001488139amrc:OtherRevenueMemberus-gaap:AllOtherSegmentsMember2024-01-012024-03-310001488139amrc:OtherRevenueMember2024-01-012024-03-310001488139amrc:NorthAmericaRegionsMember2024-01-012024-03-310001488139amrc:USFederalMember2024-01-012024-03-310001488139amrc:EuropeSegmentMember2024-01-012024-03-310001488139amrc:AlternativeFuelsMember2024-01-012024-03-310001488139us-gaap:AllOtherSegmentsMember2024-01-012024-03-310001488139amrc:ProjectRevenueMemberamrc:NorthAmericaRegionsMember2023-01-012023-03-310001488139amrc:ProjectRevenueMemberamrc:USFederalMember2023-01-012023-03-310001488139amrc:ProjectRevenueMemberamrc:EuropeSegmentMember2023-01-012023-03-310001488139amrc:AlternativeFuelsMemberamrc:ProjectRevenueMember2023-01-012023-03-310001488139us-gaap:AllOtherSegmentsMemberamrc:ProjectRevenueMember2023-01-012023-03-310001488139amrc:ProjectRevenueMember2023-01-012023-03-310001488139amrc:OperationsAndMaintenanceRevenueMemberamrc:NorthAmericaRegionsMember2023-01-012023-03-310001488139amrc:OperationsAndMaintenanceRevenueMemberamrc:USFederalMember2023-01-012023-03-310001488139amrc:OperationsAndMaintenanceRevenueMemberamrc:EuropeSegmentMember2023-01-012023-03-310001488139amrc:AlternativeFuelsMemberamrc:OperationsAndMaintenanceRevenueMember2023-01-012023-03-310001488139us-gaap:AllOtherSegmentsMemberamrc:OperationsAndMaintenanceRevenueMember2023-01-012023-03-310001488139amrc:OperationsAndMaintenanceRevenueMember2023-01-012023-03-310001488139amrc:EnergyAssetsRevenueMemberamrc:NorthAmericaRegionsMember2023-01-012023-03-310001488139amrc:EnergyAssetsRevenueMemberamrc:USFederalMember2023-01-012023-03-310001488139amrc:EnergyAssetsRevenueMemberamrc:EuropeSegmentMember2023-01-012023-03-310001488139amrc:EnergyAssetsRevenueMemberamrc:AlternativeFuelsMember2023-01-012023-03-310001488139amrc:EnergyAssetsRevenueMemberus-gaap:AllOtherSegmentsMember2023-01-012023-03-310001488139amrc:EnergyAssetsRevenueMember2023-01-012023-03-310001488139amrc:OtherRevenueMemberamrc:NorthAmericaRegionsMember2023-01-012023-03-310001488139amrc:OtherRevenueMemberamrc:USFederalMember2023-01-012023-03-310001488139amrc:OtherRevenueMemberamrc:EuropeSegmentMember2023-01-012023-03-310001488139amrc:OtherRevenueMemberamrc:AlternativeFuelsMember2023-01-012023-03-310001488139amrc:OtherRevenueMemberus-gaap:AllOtherSegmentsMember2023-01-012023-03-310001488139amrc:OtherRevenueMember2023-01-012023-03-310001488139amrc:NorthAmericaRegionsMember2023-01-012023-03-310001488139amrc:USFederalMember2023-01-012023-03-310001488139amrc:EuropeSegmentMember2023-01-012023-03-310001488139amrc:AlternativeFuelsMember2023-01-012023-03-310001488139us-gaap:AllOtherSegmentsMember2023-01-012023-03-31xbrli:pure0001488139country:US2024-01-012024-03-310001488139country:US2023-01-012023-03-310001488139country:CA2024-01-012024-03-310001488139country:CA2023-01-012023-03-310001488139srt:EuropeMember2024-01-012024-03-310001488139srt:EuropeMember2023-01-012023-03-3100014881392024-04-012024-03-310001488139amrc:EnerqosMember2023-03-302023-03-300001488139amrc:EnerqosMember2023-03-300001488139amrc:EnerqosMember2024-01-012024-03-310001488139amrc:EnerqosMember2023-03-312023-03-310001488139amrc:EnerqosMember2023-12-312023-12-310001488139amrc:EnerqosMember2023-03-310001488139amrc:EnerqosMember2023-12-310001488139amrc:EnerqosMember2023-04-012023-12-3100014881392024-01-012024-01-01amrc:reporting_unit0001488139amrc:NorthAmericaRegionsMember2023-12-310001488139amrc:USFederalMember2023-12-310001488139amrc:EuropeSegmentMember2023-12-310001488139amrc:AlternativeFuelsMember2023-12-310001488139us-gaap:AllOtherSegmentsMember2023-12-310001488139amrc:NorthAmericaRegionsMember2024-03-310001488139amrc:USFederalMember2024-03-310001488139amrc:EuropeSegmentMember2024-03-310001488139amrc:AlternativeFuelsMember2024-03-310001488139us-gaap:AllOtherSegmentsMember2024-03-310001488139us-gaap:OtherIntangibleAssetsMember2024-01-012024-03-310001488139us-gaap:OtherIntangibleAssetsMember2023-01-012023-03-310001488139amrc:RenewalEnergyProgramMember2024-03-310001488139amrc:RenewalEnergyProgramMember2023-12-310001488139amrc:BrightCanyonCorporationMember2023-08-040001488139amrc:BrightCanyonCorporationMember2023-08-042023-08-040001488139amrc:BrightCanyonCorporationMember2023-01-012023-12-310001488139amrc:BrightCanyonCorporationMember2024-01-012024-01-310001488139amrc:BrightCanyonCorporationMember2024-01-122024-01-120001488139amrc:BrightCanyonCorporationMember2024-01-120001488139amrc:BrightCanyonCorporationMember2024-03-3100014881392023-12-282023-12-28amrc:land_lease0001488139amrc:AssetRetirementObligationAROAssetMember2024-01-012024-03-310001488139amrc:AssetRetirementObligationAROAssetMember2023-01-012023-03-310001488139amrc:GroundLeaseMember2024-03-31amrc:lease_liability0001488139amrc:SolarPhotovoltaicProjectsMemberamrc:August2018LongTermFinanceLiabilityMember2024-01-012024-03-31amrc:project0001488139amrc:RevolvingSeniorSecuredCreditFacilityMemberus-gaap:LineOfCreditMember2024-03-310001488139amrc:RevolvingSeniorSecuredCreditFacilityMemberus-gaap:LineOfCreditMember2023-12-310001488139amrc:SeniorSecuredMemberus-gaap:SecuredDebtMember2024-03-310001488139amrc:SeniorSecuredMemberus-gaap:SecuredDebtMember2023-12-310001488139us-gaap:RevolvingCreditFacilityMemberamrc:EnergyAssetConstructionFacilitiesMemberus-gaap:LineOfCreditMember2024-03-310001488139us-gaap:RevolvingCreditFacilityMemberamrc:EnergyAssetConstructionFacilitiesMemberus-gaap:LineOfCreditMember2023-12-310001488139us-gaap:SecuredDebtMemberamrc:EnergyAssetTermLoansMember2024-03-310001488139us-gaap:SecuredDebtMemberamrc:EnergyAssetTermLoansMember2023-12-310001488139amrc:LongTermFinancingFacilitiesMemberamrc:FinancingFacilityMember2024-03-310001488139amrc:LongTermFinancingFacilitiesMemberamrc:FinancingFacilityMember2023-12-310001488139us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2024-03-310001488139amrc:SeniorSecuredMemberus-gaap:SecuredDebtMemberus-gaap:SubsequentEventMember2024-04-102024-04-100001488139amrc:SeniorSecuredMemberus-gaap:SecuredDebtMemberus-gaap:SubsequentEventMember2024-04-100001488139us-gaap:RevolvingCreditFacilityMemberamrc:FixedRateNoteDueAugust2039Memberus-gaap:LineOfCreditMember2024-03-310001488139us-gaap:RevolvingCreditFacilityMemberamrc:FixedRateNoteDueAugust2039Memberus-gaap:LineOfCreditMember2024-01-012024-03-310001488139amrc:ConstructionCreditFacilityDueJuly2024Memberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2024-03-310001488139amrc:ConstructionCreditFacilityDueJuly2024Memberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2024-01-012024-03-310001488139us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberamrc:ConstructionCreditFacilityDueAugust2026Member2024-03-310001488139us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberamrc:ConstructionCreditFacilityDueAugust2026Member2024-01-012024-03-310001488139amrc:BrightCanyonCorporationMemberus-gaap:SecuredDebtMember2024-02-260001488139amrc:BrightCanyonCorporationMemberus-gaap:SecuredDebtMemberamrc:SecuredOvernightFinancingRateSOFR4YearTermMember2024-02-262024-02-260001488139amrc:BrightCanyonCorporationMemberus-gaap:SecuredDebtMemberamrc:SecuredOvernightFinancingRateSOFR2YearTermMember2024-02-262024-02-260001488139us-gaap:SubsequentEventMemberamrc:SeniorSecuredNotesDueJune2042Memberus-gaap:SeniorNotesMember2024-04-05amrc:note0001488139amrc:SeniorSecuredNotesDueJune2042FirstLienMemberus-gaap:SubsequentEventMemberus-gaap:SeniorNotesMember2024-04-050001488139us-gaap:SubsequentEventMemberus-gaap:SeniorNotesMemberamrc:SeniorSecuredNotesDueJune2042SecondLienMember2024-04-050001488139amrc:SeniorSecuredNotesDueJune2042FirstLienMemberus-gaap:SubsequentEventMemberus-gaap:SeniorNotesMember2024-04-052024-04-050001488139us-gaap:SubsequentEventMemberus-gaap:SeniorNotesMemberamrc:SeniorSecuredNotesDueJune2042SecondLienMember2024-04-052024-04-050001488139us-gaap:RevolvingCreditFacilityMemberus-gaap:SubsequentEventMemberus-gaap:LineOfCreditMemberamrc:ConstructionCreditFacilityDueAugust2026Member2024-04-052024-04-0500014881392021-10-012021-10-310001488139amrc:PlugSmartMember2021-12-012021-12-310001488139amrc:PlugSmartMember2021-12-310001488139amrc:PlugSmartMember2023-12-310001488139amrc:PlugSmartMember2024-03-310001488139us-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001488139us-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001488139us-gaap:HybridInstrumentMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001488139us-gaap:HybridInstrumentMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001488139us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001488139us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001488139us-gaap:FairValueMeasurementsRecurringMember2024-03-310001488139us-gaap:FairValueMeasurementsRecurringMember2023-12-3100014881392023-01-012023-12-310001488139us-gaap:EstimateOfFairValueFairValueDisclosureMember2024-03-310001488139us-gaap:CarryingReportedAmountFairValueDisclosureMember2024-03-310001488139us-gaap:EstimateOfFairValueFairValueDisclosureMember2023-12-310001488139us-gaap:CarryingReportedAmountFairValueDisclosureMember2023-12-310001488139us-gaap:FairValueMeasurementsNonrecurringMember2023-12-310001488139us-gaap:FairValueMeasurementsNonrecurringMember2024-03-310001488139us-gaap:OtherAssetsMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001488139us-gaap:OtherAssetsMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-12-310001488139us-gaap:OtherAssetsMemberus-gaap:NondesignatedMemberus-gaap:InterestRateSwapMember2024-03-310001488139us-gaap:OtherAssetsMemberus-gaap:NondesignatedMemberus-gaap:InterestRateSwapMember2023-12-310001488139us-gaap:NondesignatedMemberus-gaap:InterestRateSwapMemberus-gaap:OtherLiabilitiesMember2024-03-310001488139us-gaap:NondesignatedMemberus-gaap:InterestRateSwapMemberus-gaap:OtherLiabilitiesMember2023-12-310001488139us-gaap:NondesignatedMemberus-gaap:HybridInstrumentMemberus-gaap:OtherLiabilitiesMember2024-03-310001488139us-gaap:NondesignatedMemberus-gaap:HybridInstrumentMemberus-gaap:OtherLiabilitiesMember2023-12-310001488139us-gaap:NondesignatedMember2024-03-31amrc:derivative_instrument0001488139us-gaap:NondesignatedMember2023-12-310001488139us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:NonoperatingIncomeExpenseMember2024-01-012024-03-310001488139us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:NonoperatingIncomeExpenseMember2023-01-012023-03-310001488139us-gaap:NondesignatedMemberus-gaap:InterestRateSwapMemberus-gaap:NonoperatingIncomeExpenseMember2024-01-012024-03-310001488139us-gaap:NondesignatedMemberus-gaap:InterestRateSwapMemberus-gaap:NonoperatingIncomeExpenseMember2023-01-012023-03-310001488139us-gaap:NondesignatedMemberus-gaap:HybridInstrumentMemberus-gaap:NonoperatingIncomeExpenseMember2024-01-012024-03-310001488139us-gaap:NondesignatedMemberus-gaap:HybridInstrumentMemberus-gaap:NonoperatingIncomeExpenseMember2023-01-012023-03-310001488139us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-12-310001488139us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-01-012024-03-310001488139us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-03-310001488139amrc:InterestRateSwapOctober2029Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-01-012024-03-310001488139amrc:InterestRateSwapOctober2029Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001488139amrc:InterestRateSwapJune2033Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-01-012024-03-310001488139amrc:InterestRateSwapJune2033Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001488139amrc:InterestRateSwapDecember2027Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-01-012024-03-310001488139amrc:InterestRateSwapDecember2027Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001488139amrc:InterestRateSwapJune2028Contract1Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-01-012024-03-310001488139amrc:InterestRateSwapJune2028Contract1Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001488139amrc:InterestRateSwapJune2028Contract2Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-01-012024-03-310001488139amrc:InterestRateSwapJune2028Contract2Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001488139us-gaap:NondesignatedMemberamrc:InterestRateSwapMarch2033Contract1Member2024-01-012024-03-310001488139us-gaap:NondesignatedMemberamrc:InterestRateSwapMarch2033Contract1Member2024-03-310001488139us-gaap:NondesignatedMemberamrc:InterestRateSwapMarch2033Contract2Member2024-01-012024-03-310001488139us-gaap:NondesignatedMemberamrc:InterestRateSwapMarch2033Contract2Member2024-03-310001488139amrc:InterestRateSwapDecember2040Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-01-012024-03-310001488139amrc:InterestRateSwapDecember2040Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001488139us-gaap:NondesignatedMemberamrc:InterestRateSwapJuly2041Member2024-01-012024-03-310001488139us-gaap:NondesignatedMemberamrc:InterestRateSwapJuly2041Member2024-03-310001488139us-gaap:NondesignatedMemberus-gaap:OtherLiabilitiesMemberamrc:MakeWholeProvisionDecember2038Member2024-03-310001488139us-gaap:NondesignatedMemberamrc:MakeWholeProvisionApril2031Memberus-gaap:OtherLiabilitiesMember2024-03-310001488139us-gaap:NondesignatedMemberamrc:MakeWholeProvisionFebruary2034Memberus-gaap:OtherLiabilitiesMember2024-03-310001488139us-gaap:NondesignatedMemberamrc:MakeWholeProvisionDecember2027Memberus-gaap:OtherLiabilitiesMember2024-03-310001488139us-gaap:NondesignatedMemberamrc:MakeWholeProvisionMay2028Memberus-gaap:OtherLiabilitiesMember2024-03-310001488139us-gaap:NondesignatedMemberamrc:MakeWholeProvisionApril2045Memberus-gaap:OtherLiabilitiesMember2024-03-310001488139amrc:MakeWholeProvisionMarch2046Memberus-gaap:NondesignatedMemberus-gaap:OtherLiabilitiesMember2024-03-310001488139us-gaap:NondesignatedMemberamrc:MakeWholeProvisionMarch2042Memberus-gaap:OtherLiabilitiesMember2024-03-310001488139us-gaap:NondesignatedMemberus-gaap:OtherLiabilitiesMemberamrc:MakeWholeProvisionDecember2047Member2024-03-310001488139amrc:InvestmentFundsMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2024-03-310001488139us-gaap:VariableInterestEntityPrimaryBeneficiaryMemberamrc:OtherVIEsMember2024-03-310001488139amrc:InvestmentFundsMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2023-12-310001488139us-gaap:VariableInterestEntityPrimaryBeneficiaryMemberamrc:OtherVIEsMember2023-12-310001488139us-gaap:CorporateJointVentureMember2024-02-090001488139us-gaap:CorporateJointVentureMember2024-02-092024-02-09amrc:joint_ventureamrc:equity_investment0001488139us-gaap:EmployeeStockOptionMember2024-01-012024-03-310001488139amrc:StockIncentive2020PlanMember2024-01-012024-03-310001488139us-gaap:EmployeeStockOptionMemberamrc:StockIncentive2020PlanMember2024-01-012024-03-310001488139amrc:StockIncentive2020PlanMemberus-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001488139us-gaap:OperatingSegmentsMemberamrc:NorthAmericaRegionsMember2024-01-012024-03-310001488139us-gaap:OperatingSegmentsMemberamrc:USFederalMember2024-01-012024-03-310001488139us-gaap:OperatingSegmentsMemberamrc:EuropeSegmentMember2024-01-012024-03-310001488139amrc:AlternativeFuelsMemberus-gaap:OperatingSegmentsMember2024-01-012024-03-310001488139us-gaap:AllOtherSegmentsMemberus-gaap:OperatingSegmentsMember2024-01-012024-03-310001488139srt:ConsolidationEliminationsMember2024-01-012024-03-310001488139us-gaap:OperatingSegmentsMemberamrc:NorthAmericaRegionsMember2023-01-012023-03-310001488139us-gaap:OperatingSegmentsMemberamrc:USFederalMember2023-01-012023-03-310001488139us-gaap:OperatingSegmentsMemberamrc:EuropeSegmentMember2023-01-012023-03-310001488139amrc:AlternativeFuelsMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001488139us-gaap:AllOtherSegmentsMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001488139srt:ConsolidationEliminationsMember2023-01-012023-03-310001488139us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMemberamrc:FiveEnergyAssetProjectsMember2024-01-012024-03-31amrc:energy_asset0001488139us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMemberamrc:FiveEnergyAssetProjectsMember2024-03-310001488139us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMemberamrc:FiveEnergyAssetProjectsMember2023-12-310001488139us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMemberamrc:NorthAmericaRegionsMemberamrc:FiveEnergyAssetProjectsMember2024-03-310001488139amrc:USFederalMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMemberamrc:FiveEnergyAssetProjectsMember2024-03-310001488139us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMemberamrc:NorthAmericaRegionsMemberamrc:FiveEnergyAssetProjectsMember2023-12-310001488139amrc:USFederalMemberus-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMemberamrc:FiveEnergyAssetProjectsMember2023-12-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One) | | | | | | | | |
☑ | | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2024
OR | | | | | | | | |
☐ | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___________ to ___________.
Commission File Number: 001-34811
Ameresco, Inc.
(Exact name of registrant as specified in its charter) | | | | | | | | |
Delaware | | 04-3512838 |
(State or Other Jurisdiction of Incorporation or Organization) | | (I.R.S. Employer Identification No.) |
111 Speen Street, Suite 410 Framingham, Massachusetts | | 01701 |
(Address of Principal Executive Offices) | | (Zip Code) |
(508) 661-2200
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
Title of Each Class | Trading Symbol | Name of exchange on which registered |
Class A Common Stock, par value $0.0001 per share | AMRC | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): | | | | | | | | | | | |
Large accelerated filer ☑ | Accelerated Filer o | Non-accelerated filer o | Smaller reporting company ☐ |
Emerging growth company ☐ | | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. | | | | | |
Class | Shares outstanding as of May 1, 2024 |
Class A Common Stock, $0.0001 par value per share | 34,338,602 |
Class B Common Stock, $0.0001 par value per share | 18,000,000 |
| |
Part I - Financial Information
Item 1. Condensed Consolidated Financial Statements
AMERESCO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts) | | | | | | | | | | | |
| March 31, 2024 | | December 31, 2023 |
| (Unaudited) | | |
ASSETS | | |
Current assets: | | | |
Cash and cash equivalents (1) | $ | 77,681 | | | $ | 79,271 | |
Restricted cash (1) | 57,737 | | | 62,311 | |
Accounts receivable, net of allowance of $898 and $903, respectively (1) | 146,836 | | | 153,362 | |
Accounts receivable retainage, net | 32,158 | | | 33,826 | |
Costs and estimated earnings in excess of billings (1) | 652,428 | | | 636,163 | |
Inventory, net | 13,076 | | | 13,637 | |
Prepaid expenses and other current assets (1) | 118,813 | | | 123,391 | |
Income tax receivable | 4,836 | | | 5,775 | |
Project development costs, net | 22,907 | | | 20,735 | |
Total current assets (1) | 1,126,472 | | | 1,128,471 | |
Federal ESPC receivable | 577,651 | | | 609,265 | |
Property and equipment, net (1) | 17,170 | | | 17,395 | |
Energy assets, net (1) | 1,788,569 | | | 1,689,424 | |
Deferred income tax assets, net | 25,677 | | | 26,411 | |
Goodwill, net | 75,311 | | | 75,587 | |
Intangible assets, net | 6,197 | | | 6,808 | |
Operating lease assets (1) | 69,348 | | | 58,586 | |
Restricted cash, non-current portion (1) | 12,553 | | | 12,094 | |
Other assets (1) | 104,318 | | | 89,735 | |
Total assets (1) | $ | 3,803,266 | | | $ | 3,713,776 | |
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS, AND STOCKHOLDERS’ EQUITY |
Current liabilities: | | | |
Current portions of long-term debt and financing lease liabilities, net (1) | $ | 539,201 | | | $ | 322,247 | |
Accounts payable (1) | 437,240 | | | 402,752 | |
Accrued expenses and other current liabilities (1) | 109,954 | | | 108,831 | |
Current portions of operating lease liabilities (1) | 14,220 | | | 13,569 | |
Billings in excess of cost and estimated earnings | 61,267 | | | 52,903 | |
Income taxes payable | 398 | | | 1,169 | |
Total current liabilities (1) | 1,162,280 | | | 901,471 | |
Long-term debt and financing lease liabilities, net of current portion, unamortized discount and debt issuance costs (1) | 1,011,576 | | | 1,170,075 | |
Federal ESPC liabilities | 504,689 | | | 533,054 | |
Deferred income tax liabilities, net | 4,584 | | | 4,479 | |
Deferred grant income | 6,737 | | | 6,974 | |
Long-term operating lease liabilities, net of current portion (1) | 50,710 | | | 42,258 | |
Other liabilities (1) | 88,619 | | | 82,714 | |
Commitments and contingencies (Note 10) | | | |
Redeemable non-controlling interests, net | 43,908 | | | 46,865 | |
(1) Includes restricted assets of consolidated variable interest entities (“VIEs”) at March 31, 2024 and December 31, 2023 of $194,752 and $312,701, respectively. Includes liabilities of consolidated VIEs at March 31, 2024 and December 31, 2023 of $45,878 and 199,063, respectively. See Note 13.
AMERESCO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts) (Continued) | | | | | | | | | | | |
| March 31, 2024 | | December 31, 2023 |
| (Unaudited) | | |
Stockholders’ equity: | | | |
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding at March 31, 2024 and December 31, 2023 | $ | — | | | $ | — | |
Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 36,421,956 shares issued and 34,320,161 shares outstanding at March 31, 2024, 36,378,990 shares issued and 34,277,195 shares outstanding at December 31, 2023 | 3 | | | 3 | |
Class B common stock, $0.0001 par value, 144,000,000 shares authorized, 18,000,000 shares issued and outstanding at March 31, 2024 and December 31, 2023 | 2 | | | 2 | |
Additional paid-in capital | 327,367 | | | 320,892 | |
Retained earnings | 592,947 | | | 595,911 | |
Accumulated other comprehensive loss, net | (3,592) | | | (3,045) | |
Treasury stock, at cost, 2,101,795 shares at March 31, 2024 and December 31, 2023 | (11,788) | | | (11,788) | |
Stockholders’ equity before non-controlling interest | 904,939 | | | 901,975 | |
Non-controlling interests | 25,224 | | | 23,911 | |
Total stockholders’ equity | 930,163 | | | 925,886 | |
Total liabilities, redeemable non-controlling interests, and stockholders’ equity | $ | 3,803,266 | | | $ | 3,713,776 | |
See notes to condensed consolidated financial statements.
AMERESCO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME
(In thousands, except share and per share amounts) (Unaudited)
| | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| 2024 | | 2023 | | | | |
Revenues | $ | 298,406 | | | $ | 271,042 | | | | | |
Cost of revenues | 251,413 | | | 221,094 | | | | | |
Gross profit | 46,993 | | | 49,948 | | | | | |
Earnings from unconsolidated entities | 555 | | | 450 | | | | | |
Selling, general and administrative expenses | 39,555 | | | 41,301 | | | | | |
Operating income | 7,993 | | | 9,097 | | | | | |
Other expenses, net | 14,171 | | | 8,043 | | | | | |
(Loss) income before income taxes | (6,178) | | | 1,054 | | | | | |
Income tax provision (benefit) | — | | | (503) | | | | | |
Net (loss) income | (6,178) | | | 1,557 | | | | | |
Net loss (income) attributable to non-controlling interests and redeemable non-controlling interests | 3,241 | | | (455) | | | | | |
Net (loss) income attributable to common shareholders | $ | (2,937) | | | $ | 1,102 | | | | | |
| | | | | | | |
Net (loss) income per share attributable to common shareholders: | | | | | | | |
Basic | $ | (0.06) | | | $ | 0.02 | | | | | |
Diluted | $ | (0.06) | | | $ | 0.02 | | | | | |
Weighted average common shares outstanding: | | | | | | | |
Basic | 52,289 | | | 51,963 | | | | | |
Diluted | 52,289 | | | 53,261 | | | | | |
See notes to condensed consolidated financial statements.
AMERESCO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(In thousands) (Unaudited)
| | | | | | | | | | | |
| Three Months Ended March 31, |
| 2024 | | 2023 |
Net (loss) income | $ | (6,178) | | | $ | 1,557 | |
Other comprehensive income (loss): | | | |
Unrealized gain (loss) from interest rate hedges, net of tax | 539 | | | (868) | |
Foreign currency translation adjustments | (1,162) | | | 282 | |
Total other comprehensive loss | (623) | | | (586) | |
Comprehensive (loss) income | (6,801) | | | 971 | |
Comprehensive (loss) income attributable to non-controlling interests and redeemable non-controlling interests: | | | |
Net loss (income) | 3,241 | | | (455) | |
Foreign currency translation adjustments | 76 | | | (8) | |
Comprehensive loss (income) attributable to non-controlling interests and redeemable non-controlling interests | 3,317 | | | (463) | |
Comprehensive (loss) income attributable to common shareholders | $ | (3,484) | | | $ | 508 | |
| | | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
See notes to condensed consolidated financial statements.
AMERESCO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
For the Three Months Ended March 31, 2024 and 2023
(In thousands, except share amounts) (Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Redeemable Non-controlling Interests | | Class A Common Stock | | Class B Common Stock | | Additional Paid-in Capital | | | | Accumulated Other Comprehensive Loss | | Treasury Stock | | Non-controlling Interests | | Total Stockholders’ Equity |
| | Shares | | Amount | | Shares | | Amount | | | Retained Earnings | | | Shares | | Amount | | |
Balance, December 31, 2022 | $ | 46,623 | | | 33,948,362 | | | $ | 3 | | | 18,000,000 | | | $ | 2 | | | $ | 306,314 | | | $ | 533,549 | | | $ | (4,051) | | | 2,101,795 | | | $ | (11,788) | | | $ | 49,002 | | | $ | 873,031 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Exercise of stock options | — | | | 82,000 | | | — | | | — | | | — | | | 571 | | | — | | | — | | | — | | | — | | | — | | | 571 | |
Stock-based compensation expense | — | | | — | | | — | | | — | | | — | | | 4,037 | | | — | | | — | | | — | | | — | | | — | | | 4,037 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Unrealized loss from interest rate hedges, net | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (868) | | | — | | | — | | | — | | | (868) | |
Foreign currency translation adjustment | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 274 | | | — | | | — | | | 8 | | | 282 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Distributions to redeemable non-controlling interests | (178) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
Accretion of tax equity financing fees | 27 | | | — | | | — | | | — | | | — | | | — | | | (27) | | | — | | | — | | | — | | | — | | | (27) | |
Investment fund call option exercise | 196 | | | — | | | — | | | — | | | — | | | (196) | | | — | | | — | | | — | | | — | | | — | | | (196) | |
Contributions from non-controlling interest | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 16,417 | | | 16,417 | |
Net income | 32 | | | — | | | — | | | — | | | — | | | — | | | 1,102 | | | — | | | — | | | — | | | 423 | | | 1,525 | |
Balance, March 31, 2023 | $ | 46,700 | | | 34,030,362 | | | $ | 3 | | | 18,000,000 | | | $ | 2 | | | $ | 310,726 | | | $ | 534,624 | | | $ | (4,645) | | | 2,101,795 | | | $ | (11,788) | | | $ | 65,850 | | | $ | 894,772 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Balance, December 31, 2023 | $ | 46,865 | | | 34,277,195 | | | $ | 3 | | | 18,000,000 | | | $ | 2 | | | $ | 320,892 | | | $ | 595,911 | | | $ | (3,045) | | | 2,101,795 | | | $ | (11,788) | | | $ | 23,911 | | | $ | 925,886 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Exercise of stock options | — | | | 31,889 | | | — | | | — | | | — | | | 183 | | | — | | | — | | | — | | | — | | | — | | | 183 | |
Stock-based compensation expense | — | | | — | | | — | | | — | | | — | | | 3,026 | | | — | | | — | | | — | | | — | | | — | | | 3,026 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Restricted stock units released | — | | | 11,077 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Unrealized gain from interest rate hedges, net | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 539 | | | — | | | — | | | — | | | 539 | |
Foreign currency translation adjustment | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (1,086) | | | — | | | — | | | (76) | | | (1,162) | |
| | | | | | | | | | | | | | | | | | | | | | | |
Distributions to redeemable non-controlling interests | (129) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Accretion of tax equity financing fees | 27 | | | — | | | — | | | — | | | — | | | — | | | (27) | | | — | | | — | | | — | | | — | | | (27) | |
| | | | | | | | | | | | | | | | | | | | | | | |
Contributions from non-controlling interests | — | | | — | | | — | | | — | | | — | | | 3,040 | | | — | | | — | | | — | | | — | | | 25,824 | | | 28,864 | |
Distributions to non-controlling interest | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (63) | | | (63) | |
Purchase of shares from non-controlling interest | — | | | — | | | — | | | — | | | — | | | 226 | | | — | | | — | | | — | | | — | | | (23,986) | | | (23,760) | |
Net loss | (2,855) | | | — | | | — | | | — | | | — | | | — | | | (2,937) | | | — | | | — | | | — | | | (386) | | | (3,323) | |
Balance, March 31, 2024 | $ | 43,908 | | | 34,320,161 | | | $ | 3 | | | 18,000,000 | | | $ | 2 | | | $ | 327,367 | | | $ | 592,947 | | | $ | (3,592) | | | 2,101,795 | | | $ | (11,788) | | | $ | 25,224 | | | $ | 930,163 | |
See notes to condensed consolidated financial statements.
AMERESCO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited) | | | | | | | | | | | |
| Three Months Ended March 31, |
| 2024 | | 2023 |
Cash flows from operating activities: | | | |
Net (loss) income | $ | (6,178) | | | $ | 1,557 | |
Adjustments to reconcile net (loss) income to net cash flows from operating activities: | | | |
Depreciation of energy assets, net | 17,124 | | | 13,341 | |
Depreciation of property and equipment | 1,175 | | | 644 | |
Increase in contingent consideration | — | | | 121 | |
Accretion of ARO liabilities | 66 | | | 66 | |
Amortization of debt discount and debt issuance costs | 982 | | | 790 | |
Amortization of intangible assets | 539 | | | 302 | |
Provision for bad debts | 1 | | | 93 | |
Loss on write-off of long-lived assets | — | | | 18 | |
| | | |
Non-cash project revenue related to in-kind leases | (775) | | | — | |
Earnings from unconsolidated entities | (555) | | | (450) | |
Net (gain) loss from derivatives | (2,359) | | | 163 | |
| | | |
Stock-based compensation expense | 3,026 | | | 4,037 | |
Deferred income taxes, net | 687 | | | (7,142) | |
| | | |
Unrealized foreign exchange loss (gain) | 806 | | | (29) | |
Changes in operating assets and liabilities: | | | |
Accounts receivable | 5,899 | | | 58,954 | |
Accounts receivable retainage | 1,580 | | | 2,439 | |
Federal ESPC receivable | (26,395) | | | (33,736) | |
Inventory, net | 561 | | | 608 | |
Costs and estimated earnings in excess of billings | (7,842) | | | 85,748 | |
Prepaid expenses and other current assets | 104 | | | 929 | |
Income taxes receivable, net | 180 | | | 6,380 | |
Project development costs | (1,728) | | | (1,812) | |
Other assets | (1,413) | | | (1,903) | |
Accounts payable, accrued expenses and other current liabilities | 23,849 | | | (82,266) | |
Billings in excess of cost and estimated earnings | 9,160 | | | 9,398 | |
Other liabilities | 2,323 | | | 522 | |
Cash flows from operating activities | 20,817 | | | 58,772 | |
Cash flows from investing activities: | | | |
Purchases of property and equipment | (962) | | | (1,657) | |
Capital investment in energy assets | (105,633) | | | (89,787) | |
Capital investment in major maintenance of energy assets | (5,355) | | | (589) | |
| | | |
Net proceeds from equity method investment | 12,956 | | | — | |
Contributions to equity method investments | (4,776) | | | — | |
Acquisitions, net of cash received | — | | | (9,182) | |
Loans to joint venture investments | — | | | (38) | |
Cash flows from investing activities | (103,770) | | | (101,253) | |
| | | |
| | | |
See notes to condensed consolidated financial statements. |
| | | |
| | | |
| | | |
| | | |
| | | | | | | | | | | |
| | | |
AMERESCO, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands) (Unaudited) (Continued) |
|
| Three Months Ended March 31, |
| 2024 | | 2023 |
Cash flows from financing activities: | | | |
| | | |
Payments of debt discount and debt issuance costs | $ | (590) | | | $ | (366) | |
Proceeds from exercises of options and ESPP | 183 | | | 571 | |
| | | |
Proceeds from senior secured revolving credit facility, net | 20,100 | | | — | |
Proceeds from long-term debt financings | 89,321 | | | 58,188 | |
Proceeds from Federal ESPC projects | 19,581 | | | 42,309 | |
Net proceeds from energy asset receivable financing arrangements | 4,748 | | | 4,438 | |
| | | |
Contributions from non-controlling interests | 28,864 | | | 16,308 | |
Distributions to non-controlling interest | (63) | | | — | |
Distributions to redeemable non-controlling interests, net | (133) | | | (161) | |
Payment on seller's promissory note | (29,441) | | | — | |
Payments on long-term debt and financing leases | (55,196) | | | (15,159) | |
Cash flows from financing activities | 77,374 | | | 106,128 | |
Effect of exchange rate changes on cash | (126) | | | 42 | |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (5,705) | | | 63,689 | |
Cash, cash equivalents, and restricted cash, beginning of period | 153,676 | | | 149,888 | |
Cash, cash equivalents, and restricted cash, end of period | $ | 147,971 | | | $ | 213,577 | |
| | | |
Supplemental disclosures of cash flow information: | | | |
Cash paid for interest | $ | 26,911 | | | $ | 13,135 | |
Cash paid for income taxes | $ | 59 | | | $ | 323 | |
Non-cash Federal ESPC settlement | $ | 49,926 | | | $ | — | |
Accrued purchases of energy assets | $ | 88,447 | | | $ | 97,542 | |
Non-cash contributions from non-controlling interest | $ | — | | | $ | 109 | |
Non-cash financing for energy asset project acquisition | $ | 32,500 | | | $ | — | |
See notes to condensed consolidated financial statements.
AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited)
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements of Ameresco, Inc. (including its subsidiaries, the “Company,” “Ameresco,” “we,” “our,” or “us”) are unaudited, according to certain rules and regulations of the Securities and Exchange Commission, and include, in our opinion, normal recurring adjustments necessary for a fair presentation in conformity with accounting principles generally accepted in the United States (“GAAP”) of the results for the periods indicated.
The results of operations for the three months ended March 31, 2024 are not necessarily indicative of results which may be expected for the full year. The December 31, 2023 consolidated balance sheet data was derived from audited financial statements, but certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. The interim condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2023, included in our annual report on Form 10-K (“2023 Form 10-K”) filed with the Securities and Exchange Commission on February 29, 2024. Reclassification and Rounding
Certain prior period amounts were reclassified to conform to the presentation in the current period. We round amounts in the condensed consolidated financial statements to thousands and calculate all percentages and per-share data from the underlying whole-dollar amounts. Thus, certain amounts may not foot, crossfoot, or recalculate based on reported numbers due to rounding.
Significant Risks and Uncertainties
Global factors have continued to result in global supply chain disruptions and inflationary pressures.
We have considered the impact of general global economic conditions on the assumptions and estimates used, which may change in response to this evolving situation. Results of future operations and liquidity could be adversely impacted by a number of factors including supply chain disruptions, varying levels of inflation, payments of outstanding receivable amounts beyond normal payment terms, workforce disruptions, and uncertain demand. As of the date of issuance of these condensed consolidated financial statements, we cannot reasonably estimate the extent to which macroeconomic conditions may impact our financial condition, liquidity, or results of operations in the foreseeable future. The ultimate impact of the pandemic and general global economic conditions on our business is highly uncertain and will depend on future developments, and such impacts could exist for an extended period of time, even after the pandemic subsides.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Our accounting policies are set forth in Note 2 to the consolidated financial statements contained in our 2023 Form 10-K. We have included certain updates to those policies below. Accounts Receivable and Allowance for Credit Losses
Changes in the allowance for credit losses are as follows: | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| 2024 | | 2023 | | | | |
Allowance for credit losses, beginning of period | $ | 903 | | | $ | 911 | | | | | |
Charges to (recoveries of) costs and expenses, net | 1 | | | 93 | | | | | |
Account write-offs and other | (6) | | | (33) | | | | | |
Allowance for credit losses, end of period | $ | 898 | | | $ | 971 | | | | | |
Accounts Receivable Factoring
Ameresco’s wholly-owned subsidiary in Italy entered into factoring agreements to sell certain receivables to unrelated third-party financial institutions on a non-recourse basis. These transactions are accounted for in accordance with ASC Topic 860, Transfers and Servicing and result in a reduction in accounts receivable because the agreements transfer effective control over the receivables, and related risk, to the buyers. Our Italian subsidiary does not retain any interest in the underlying accounts
AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited) (Continued)
receivable once sold. Trade accounts receivables balances sold are removed from the condensed consolidated balance sheets, and cash received is reflected in operating activities in the condensed consolidated statements of cash flows. Factoring fees during the three months ended March 31, 2024 and 2023 were $169 and $0, respectively, and are included in other expense, net in the condensed consolidated statements of income. See Note 18. Other Expenses, Net.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist primarily of other receivables, deferred project costs, and other short-term prepaid expenditures that will be expensed within one year.
Prepaid expenses and other current assets comprised of the following:
| | | | | | | | | | | |
| March 31, 2024 | | December 31, 2023 |
Other receivables | $ | 44,014 | | | $ | 74,454 | |
Deferred project costs | 65,020 | | | 38,240 | |
Prepaid expenses | 9,779 | | | 10,697 | |
Prepaid expenses and other current assets | $ | 118,813 | | | $ | 123,391 | |
| | | |
Recent Accounting Pronouncements
Business Combinations— Joint Venture Formations
In August 2023, the FASB issued ASU 2023-05, Business Combinations— Joint Venture Formations (Subtopic 805-60) Recognition and Initial Measurement, which addresses the accounting for contributions made to a joint venture, upon formation, in a joint venture’s separate financial statements. ASU 2023-05 is effective prospectively for all joint venture formations with a formation date on or after January 1, 2025. We are currently evaluating the impact that adopting this new accounting standard would have on our condensed consolidated consolidated financial statements.
Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, which updates the disclosure or presentation requirements for a variety of topics in the codification. ASU 2023-06 is effective from the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K, with early adoption prohibited. We will monitor the removal of the requirements from the current regulations and adopt the related amendments, but we do not anticipate this new guidance will have a material impact on our condensed consolidated financial statements as we are currently subject to SEC requirements.
Segment Reporting (Topic 820) - Improvements to Reportable Segment Disclosures
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 820) - Improvements to Reportable Segment Disclosures, which improves reportable segment disclosures by requiring enhanced disclosures for significant segment expenses and other segment items. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We are currently evaluating the impact that adopting this new accounting standard would have on our condensed consolidated financial statements.
Income Taxes (Topic 740) - Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the income tax disclosures, including disaggregation of information in the rate reconciliation table and disaggregated information related to income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. We are currently evaluating the impact that adopting this new accounting standard would have on our condensed consolidated financial statements.
Compensation—Stock Compensation (Topic 718) - Scope Application of Profits Interest and Similar Awards
In March 2024, the FASB issued ASU 2024-01, Compensation—Stock Compensation (Topic 718) - Scope Application of Profits Interest and Similar Awards, to clarify how to determine if a profits interest or similar award is within the scope of ASC 718 or is not a share-based payment arrangement and is within the scope of other guidance. ASU 2024-01 is effective for fiscal years
AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited) (Continued)
beginning after December 15, 2024. We are currently evaluating the impact that adopting this new accounting standard would have on our condensed consolidated financial statements.
Codification Improvements—Amendments to Remove References to the Concepts Statements
In March 2024, the FASB issued ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements, to remove references to various FASB Concepts Statements based on suggestions received from stakeholders on the Accounting Standards Codification and other incremental improvements to GAAP. ASU 2024-02 is effective for fiscal years beginning after December 15, 2024. We are currently evaluating the impact that adopting this new accounting standard would have on our condensed consolidated financial statements.
3. REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue
Our reportable segments for the three months ended March 31, 2024 were North America Regions, U.S. Federal, Europe, Alternative Fuels and All Other. On January 1, 2024, we changed the structure of our internal organization, and our U.S. Regions and Canada are now included in North America Regions. Additionally, our Asset Sustainability Group was formerly included in Canada, but is now included in “All Other”. As a result, previously reported amounts have been reclassified for comparative purposes.
The following table presents our revenue disaggregated by line of business and reportable segment for the three months ended March 31, 2024:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| North America Regions | | U.S. Federal | | Europe | | Alternative Fuels | | All Other | | Total |
Project revenue | $ | 116,211 | | | $ | 43,479 | | | $ | 41,424 | | | $ | 3,163 | | | $ | 7 | | | $ | 204,284 | |
O&M revenue | 6,933 | | | 15,278 | | | 747 | | | 2,377 | | | — | | | 25,335 | |
Energy assets | 13,754 | | | 1,929 | | | 171 | | | 27,300 | | | — | | | 43,154 | |
| | | | | | | | | | | |
Other | 1,387 | | | 204 | | | 1,780 | | | 19 | | | 22,243 | | | 25,633 | |
Total revenues | $ | 138,285 | | | $ | 60,890 | | | $ | 44,122 | | | $ | 32,859 | | | $ | 22,250 | | | $ | 298,406 | |
The following table presents our revenue disaggregated by line of business and reportable segment for the three months ended March 31, 2023: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| North America Regions | | U.S. Federal | | Europe | | Alternative Fuels | | All Other | | Total |
Project revenue | $ | 119,231 | | | $ | 45,549 | | | $ | 17,200 | | | $ | — | | | $ | 1,250 | | | $ | 183,230 | |
O&M revenue | 5,539 | | | 12,700 | | | 333 | | | 3,686 | | | — | | | 22,258 | |
Energy assets | 14,407 | | | 1,076 | | | 519 | | | 24,653 | | | 117 | | | 40,772 | |
| | | | | | | | | | | |
Other | 1,365 | | | 231 | | | 1,044 | | | — | | | 22,142 | | | 24,782 | |
Total revenues | $ | 140,542 | | | $ | 59,556 | | | $ | 19,096 | | | $ | 28,339 | | | $ | 23,509 | | | $ | 271,042 | |
The following table presents information related to our revenue recognized over time:
| | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| 2024 | | 2023 | | | | |
Percentage of revenue recognized over time | 94% | | 93% | | | | |
The remainder of our revenue is for products and services transferred at a point in time, at which point revenue is recognized.
AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited) (Continued)
We attribute revenues to customers based on the location of the customer. The following table presents information related to our revenues by geographic area: | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| 2024 | | 2023 | | | | |
United States | $ | 239,099 | | | $ | 233,084 | | | | | |
Canada | 15,180 | | | 17,234 | | | | | |
Europe | 44,127 | | | 20,724 | | | | | |
Total revenues | $ | 298,406 | | | $ | 271,042 | | | | | |
Contract Balances
The following tables provide information about receivables, contract assets and contract liabilities from contracts with customers: | | | | | | | | | | | | | | |
| | March 31, 2024 | | December 31, 2023 |
Accounts receivable, net | | $ | 146,836 | | | $ | 153,362 | |
Accounts receivable retainage, net | | 32,158 | | | 33,826 | |
Contract Assets: | | | | |
Costs and estimated earnings in excess of billings | | $ | 652,428 | | | $ | 636,163 | |
Contract Liabilities: | | | | |
Billings in excess of cost and estimated earnings | | $ | 61,267 | | | $ | 52,903 | |
Billings in excess of cost and estimated earnings, non-current (1) | | 19,883 | | | 18,688 | |
Total contract liabilities | | $ | 81,150 | | | $ | 71,591 | |
| | | | | | | | | | | |
| March 31, 2023 | | December 31, 2022 |
Accounts receivable, net | $ | 130,940 | | | $ | 174,009 | |
Accounts receivable retainage, net | 35,625 | | | 38,057 | |
Contract Assets: | | | |
Costs and estimated earnings in excess of billings | $ | 497,762 | | | $ | 576,363 | |
Contract Liabilities: | | | |
Billings in excess of cost and estimated earnings | $ | 39,326 | | | $ | 34,796 | |
Billings in excess of cost and estimated earnings, non-current (1) | 12,510 | | | 7,617 | |
Total contract liabilities | $ | 51,836 | | | $ | 42,413 | |
| | | |
(1) Performance obligations that are expected to be completed beyond the next twelve months and are included in other liabilities in the condensed consolidated balance sheets. |
The increase in contract assets for the three months ended March 31, 2024 was primarily due to billings of $210,475 offset by revenue recognized of $203,216. Contract assets are also affected by reclassifications, primarily from contract liabilities as a result of timing of customer payments. The increase in contract liabilities was primarily driven by the receipt of advance payments from customers, and related billings, as well as reclassifications from contract assets as a result of timing of customer payments. The advance payments and reclassifications exceeded the recognition of revenue as performance obligations were satisfied. For the three months ended March 31, 2024, we recognized revenue of $60,748 and billed $46,306 to customers that had balances which were included in contract liabilities at December 31, 2023.
The decrease in contract assets for the three months ended March 31, 2023 was primarily due to billings of $286,203 offset by revenue recognized of $190,415. Contract assets also decreased due to reclassifications, primarily from contract liabilities as a result of timing of customer payments. The increase in contract liabilities was primarily driven by the receipt of advance payments from customers, and related billings, as well as reclassifications from contract assets as a result of timing of customer payments. The advance payments and reclassifications exceeded the recognition of revenue as performance obligations were satisfied.. For the three months ended March 31, 2023, we recognized revenue of $34,715 and billed $39,082 to customers that had balances which were included in the beginning balance of contract liabilities.
AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited) (Continued)
Performance Obligations
Our remaining performance obligations (“backlog”) represent the unrecognized revenue value of our contract commitments. At March 31, 2024, we had contracted backlog of $2,658,592 of which approximately 32% is anticipated to be recognized as revenue in the next twelve months. The remaining performance obligations primarily relate to the energy efficiency and renewable energy construction projects, including long-term operations and maintenance (“O&M”) services related to these projects. The long-term services have varying initial contract terms, up to 25 years.
Project Development Costs
Project development costs of $3,120 and $2,612 were recognized in our condensed consolidated statements of (loss) income on projects that converted to customer contracts during the three months ended March 31, 2024 and 2023, respectively.
No impairment charges in connection with our project development costs were recorded during the three or three months ended March 31, 2024 and 2023.
4. BUSINESS ACQUISITIONS AND RELATED TRANSACTIONS
We account for acquisitions using the acquisition method in accordance with ASC 805, Business Combinations. The purchase price for each acquisition is allocated to the assets based on their estimated fair values at the date of acquisition. The excess purchase price over the estimated fair value of the net assets acquired, which is calculated using level 3 inputs per the fair value hierarchy as defined in Note 11, is recorded as goodwill. Intangible assets, if identified, are also recorded. See Note 5 for additional information.
Enerqos Energy Solutions S.r.l. (“Enerqos”)
On February 24, 2023, we signed a definitive purchase and sale agreement to acquire Enerqos, a renewable energy and energy efficiency company headquartered in Milan, Italy. The acquisition closed on March 30, 2023 and the total purchase consideration was $13,445, of which $9,535 has been paid. There is no contingent consideration related to this acquisition. Cash acquired was $353, debt assumed was $3,951, and a deferred tax liability, net of $931 was recorded. In accordance with the SEC’s Regulation S-X and GAAP, we evaluated and determined that Enerqos is not deemed to be a significant subsidiary, therefore, we are not presenting the pro-forma effects of this acquisition on our operations.
The estimated goodwill of $6,855 from the Enerqos acquisition consists largely of expected benefits, including the combined entities experience and the acquired workforce. This goodwill is not deductible for income tax purposes. The estimated fair value of tangible and intangible assets acquired and liabilities assumed are based on management's estimates and assumptions that are preliminary and subject to adjustments. Any measurement period adjustments made within one year from acquisition date, are recorded as adjustments to goodwill. Any adjustments made beyond the measurement period will be included in our condensed consolidated statements of income.
The results of the acquisition since the date of the acquisition have been included in our operations as presented in the accompanying condensed consolidated statements of (loss) income, condensed consolidated statements of comprehensive (loss) income and condensed consolidated statements of cash flows. For the quarter ended March 31, 2024, we recognized $4,178 of revenue and $740 of net loss relating to Enerqos.
AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited) (Continued)
A summary of the cumulative consideration paid and allocation of the purchase price for the Enerqos acquisition are presented in the table below:
| | | | | | | | | | | | | | | | | |
| Preliminary March 31, 2023 | | Measurement Period Adjustment | | As Adjusted December 31, 2023 |
Cash | $ | 9,535 | | | $ | — | | | $ | 9,535 | |
Long-term debt assumed, net of current portions | 3,951 | | | — | | | 3,951 | |
FX adjustment | (41) | | | — | | | (41) | |
Fair value of consideration transferred | $ | 13,445 | | | $ | — | | | $ | 13,445 | |
| | | | | |
Cash and cash equivalents | $ | 190 | | | $ | — | | | $ | 190 | |
Accounts receivable | 6,230 | | | — | | | 6,230 | |
Costs and estimated earnings in excess of billings | 8,985 | | | — | | | 8,985 | |
Prepaid expenses and other current assets | 16,504 | | | — | | | 16,504 | |
Project development costs | 5,140 | | | — | | | 5,140 | |
Property and equipment and energy assets | 1,234 | | | — | | | 1,234 | |
Intangible assets | 4,438 | | | — | | | 4,438 | |
Long-term restricted cash | 163 | | | — | | | 163 | |
Accounts payable | (15,480) | | | — | | | (15,480) | |
Accrued expenses and other current liabilities | (4,510) | | | 165 | | | (4,345) | |
Current portions of long-term debt | (15,165) | | | — | | | (15,165) | |
Deferred income tax liabilities, net | (931) | | | — | | | (931) | |
Other liabilities | (208) | | | — | | | (208) | |
Recognized identifiable assets acquired and liabilities assumed | $ | 6,590 | | | $ | 165 | | | $ | 6,755 | |
Goodwill | $ | 6,855 | | | $ | (165) | | | $ | 6,690 | |
5. GOODWILL AND INTANGIBLE ASSETS, NET
Due to the change in the structure of our internal organization, a portion of our goodwill was allocated to two new reporting units based on their relative fair values as of January 1, 2024. See Note 3 for additional information about the organizational changes. The changes in the carrying value of goodwill balances by reportable segment were as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| North America Regions | | U.S. Federal | | Europe | | Alternative Fuels | | Other | | Total |
Carrying Value of Goodwill | | | | | | | | | | | |
Balance, December 31, 2023 | $ | 40,681 | | | $ | 3,981 | | | $ | 13,034 | | | $ | — | | | $ | 17,891 | | | $ | 75,587 | |
Goodwill acquired during the year | — | | | — | | | — | | | — | | | — | | | — | |
Fair value allocation | (1,474) | | | — | | | — | | | — | | | 1,474 | | | — | |
Currency effects | (70) | | | — | | | (206) | | | — | | | — | | | (276) | |
Balance, March 31, 2024 | $ | 39,137 | | | $ | 3,981 | | | $ | 12,828 | | | $ | — | | | $ | 19,365 | | | $ | 75,311 | |
Definite-lived intangible assets, net consisted of the following: | | | | | | | | | | | |
| As of March 31, 2024 | | As of December 31, 2023 |
Gross carrying amount | $ | 36,960 | | | 37,147 | |
Less - accumulated amortization | (30,763) | | | (30,339) | |
Intangible assets, net | $ | 6,197 | | | $ | 6,808 | |
AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited) (Continued)
The table below sets forth amortization expense: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Three Months Ended March 31, | | |
Asset type | | Location | | 2024 | | 2023 | | | | |
| | | | | | | | | | |
All other intangible assets | | Selling, general and administrative expenses | | 539 | | | 302 | | | | | |
| | | | | | | | | | |
6. ENERGY ASSETS, NET
Energy assets, net consisted of the following: | | | | | | | | | | | |
| March 31, 2024 | | December 31, 2023 |
Energy assets (1) | $ | 2,170,223 | | | $ | 2,054,145 | |
Less - accumulated depreciation and amortization | (381,654) | | | (364,721) | |
Energy assets, net | $ | 1,788,569 | | | $ | 1,689,424 | |
| | | |
(1) Includes financing lease assets (see Note 7), capitalized interest and asset retirement obligations (“ARO”) assets (see tables below). Also includes the energy asset projects acquired in January 2024. See section below for additional information. |
August 2023 Purchase and Sale Agreement
On August 4, 2023, we entered into a purchase and sale agreement to acquire an energy asset project and to acquire 100% of the stock of Bright Canyon Energy Corporation (“BCE”) in a two-phased transaction. Phase 1, the purchase of the energy asset project, closed on August 4, 2023 and did not constitute a business in accordance with ASC 805-50, Business Combinations.
The purchase price for phase 1 was $87,964, of which $5,000 was paid in cash, $46,694 was financed through a seller’s note, and we assumed a construction loan on the energy asset project for $36,270. We also acquired cash of $11,206. During the year ended December 31, 2023, we paid $18,400 in principal on the sellers note. In January 2024, the purchase price was increased by $1,147 and we paid off the seller’s note in the amount of $29,441. We also assumed a land lease for the energy asset project.
On December 28, 2023, we executed an amended and restated purchase and sale agreement, which primarily revised the timing of payments on phase 2. In the second phase, which closed on January 12, 2024, we acquired BCE, including its interest in a consolidated joint venture and its interests in project subsidiaries developing or with rights to develop solar, battery, and microgrid assets for an adjusted purchase price of $47,956, of which $9,839 was paid in cash and $32,500 was financed through a seller’s note. The remaining balance due of $5,617 is included in accrued expenses and other current liabilities at March 31, 2024. We also assumed four land leases for the energy asset projects.
Phase 2, the purchase of the energy asset projects did not constitute a business in accordance with ASC 805-50, Business Combinations.
See Note 8 for additional information about these loans, Note 7 for information on the leases and Note 10 for potential additional commitments.
Depreciation and Amortization Expense
The following table sets forth our depreciation and amortization expense on energy assets, net of deferred grant amortization: | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
Location | 2024 | | 2023 | | | | |
Cost of revenues (2) | $ | 17,124 | | | $ | 13,341 | | | | | |
| | | | | | | |
(2) Includes depreciation and amortization on financing lease assets (see Note 7). | | | | |
AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited) (Continued)
Capitalized Interest
The following table presents the interest costs relating to construction financing during the period of construction, which were capitalized as part of energy assets, net: | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| 2024 | | 2023 | | | | |
Capitalized interest | $ | 14,872 | | | $ | 6,376 | | | | | |
The following tables sets forth information related to our ARO assets and ARO liabilities: | | | | | | | | | | | | | | |
| Location | March 31, 2024 | | December 31, 2023 |
ARO assets, net | Energy assets, net | $ | 4,619 | | | $ | 4,800 | |
| | | | |
| | | | |
ARO liabilities, non-current | Other liabilities | $ | 5,886 | | | $ | 5,960 | |
| | | | |
| | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| 2024 | | 2023 | | | | |
Depreciation expense of ARO assets | $ | 44 | | | $ | 55 | | | | | |
Accretion expense of ARO liabilities | $ | 66 | | | $ | 66 | | | | | |
7. LEASES
The table below sets forth supplemental condensed consolidated balance sheet information related to our leases: | | | | | | | | | | | |
| March 31, 2024 | | December 31, 2023 |
Operating Leases: | | | |
Operating lease assets | $ | 69,348 | | | $ | 58,586 | |
| | | |
Current portions of operating lease liabilities | $ | 14,220 | | | $ | 13,569 | |
Long-term portions of operating lease liabilities | 50,710 | | | 42,258 | |
Total operating lease liabilities | $ | 64,930 | | | $ | 55,827 | |
Weighted-average remaining lease term | 19 years | | 18 years |
Weighted-average discount rate | 6.6 | % | | 6.6 | % |
| | | |
Financing Leases: | | | |
Energy assets | $ | 26,736 | | | $ | 27,262 | |
| | | |
Current portions of financing lease liabilities | $ | 1,027 | | | $ | 871 | |
Long-term financing lease liabilities, net of current portion, unamortized discount and debt issuance costs | 12,871 | | | 13,057 | |
Total financing lease liabilities | $ | 13,898 | | | $ | 13,928 | |
Weighted-average remaining lease term | 13 years | | 13 years |
Weighted-average discount rate | 12.05 | % | | 12.05 | % |
AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited) (Continued)
The costs related to our leases were as follows: | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| 2024 | | 2023 | | | | |
Operating Leases: | | | | | | | |
Operating lease costs | $ | 3,056 | | | $ | 2,120 | | | | | |
| | | | | | | |
Financing Leases: | | | | | | | |
Amortization expense | 526 | | | 526 | | | | | |
Interest on lease liabilities | 392 | | | 444 | | | | | |
| | | | | | | |
Total lease costs | $ | 3,974 | | | $ | 3,090 | | | | | |
Supplemental cash flow information related to our leases was as follows: | | | | | | | | | | | |
| Three Months Ended March 31, |
| 2024 | | 2023 |
Cash paid for amounts included in the measurement of operating lease liabilities | $ | 4,932 | | | $ | 1,852 | |
Right-of-use assets (“ROU”) obtained in exchange for new operating lease liabilities (1) | $ | 12,736 | | | $ | 1,319 | |
| | | |
(1) Includes non-monetary lease transactions of $10,378. See disclosure below for additional information. |
| | | |
The table below sets forth our estimated minimum future lease obligations under our leases: | | | | | | | | | | | |
| Operating Leases | | Financing Leases |
Year ended December 31, | | | |
2024 | $ | 12,766 | | | $ | 2,207 | |
2025 | 12,403 | | | 2,213 | |
2026 | 7,093 | | | 2,054 | |
2027 | 6,006 | | | 1,922 | |
2028 | 5,061 | | | 1,955 | |
Thereafter | 61,421 | | | 15,935 | |
Total minimum lease payments | 104,750 | | | 26,286 | |
Less: interest | 39,820 | | | 12,388 | |
Present value of lease liabilities | $ | 64,930 | | | $ | 13,898 | |
We have a future lease commitment for a ground lease which does not yet meet the criteria for recording a ROU asset or ROU liability. The net present value of this commitment totals $10,500 as of March 31, 2024 and relates to lease payments to be made over a 20-year period. We are in process of modifying the terms of this agreement such that the criteria to record a ROU asset and ROU liability may not be met.
Non-monetary Lease Transactions
We have six lease liabilities consisting of obligations that will be settled with non-monetary consideration. The lease liabilities relating to non-monetary consideration were recorded during the three months ended March 31, 2024 based on the fair market value of the project services or back up power expected to be provided, which approximate the cash payments.
Sale-leasebacks
These facilities are accounted for as failed sale leasebacks and are classified as long-term financing facilities.
AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited) (Continued)
August 2018 Master Sale-leaseback
We enter into amendments to our August 2018 master lease and participation agreement from to time to time, which may extend the maturity date, increase the availability, or modify other covenants.
We sold and leased back one energy assets for $4,444 in cash proceeds under this facility during the three months ended March 31, 2024. As of March 31, 2024, we have available funds remaining under this lending commitment.
Net gains from amortization expense recognized in cost of revenues relating to deferred gains and losses in connection with our sale-leaseback agreements were $57 and $57 for the three months ended March 31, 2024 and 2023, respectively.
December 2020 Master Sale-leaseback
We enter into amendments to our December 2020 master lease and participation agreement from to time to time, which may extend the maturity date, increase the availability, or modify other covenants. As of March 31, 2024, we were in default under this agreement as we had failed to satisfy the insurance requirements and historical coverage ratio under this agreement. On May 3, 2024, we received a waiver of this default.
8. DEBT AND FINANCING LEASE LIABILITIES
Our debt and financing lease liabilities are comprised of the following: | | | | | | | | | | | |
| March 31, 2024 | | December 31, 2023 |
Senior secured revolving credit facility (1) | $ | 160,000 | | | $ | 140,000 | |
Senior secured term loans | 108,750 | | | 139,900 | |
Energy asset construction facilities (2) | 469,904 | | | 470,248 | |
Energy asset term loans (2) | 632,883 | | | 564,530 | |
Sale-leasebacks (3) | 185,863 | | | 185,698 | |
Financing lease liabilities (4) | 13,898 | | | 13,928 | |
| | | |
Total debt and financing lease liabilities | 1,571,298 | | | 1,514,304 | |
Less: current maturities | 539,201 | | | 322,247 | |
Less: unamortized discount and debt issuance costs | 20,521 | | | 21,982 | |
Long-term debt and financing lease liabilities, net of current portion, unamortized discount and debt issuance costs | $ | 1,011,576 | | | $ | 1,170,075 | |
| | | |
(1) At March 31, 2024, funds of $27,269 were available for borrowing under this facility. |
(2) Most of these agreements are now using the Secured Overnight Financing Rate (“SOFR”) as the primary reference rate used to calculate interest. |
(3) These facilities are accounted for as failed sale leasebacks and are classified as long-term financing facilities. See Note 7 for additional disclosures. |
(4) Financing lease liabilities are sale-leaseback arrangements under previous guidance. See Note 7 for additional disclosures. |
|
| | | |
|
Senior Secured Term Loans
On April 10, 2024, we entered into amendment number five to the fifth amended and restated senior secured credit facility to extend the maturity date of the delayed draw term loan A (“DDTLA”) from March 4, 2025 to August 15, 2024. The amendment also included the following modifications:
•principal installments on the DDTLA of $5,000 at closing of the amendment and $7,500 each on or before May 15, 2024, June 15, 2024, and July 15, 2024, with the balance of $7,500 due on August 15, 2024,
•the date by which we shall use commercially reasonable efforts to raise $100,000 in equity or subordinated debt financing was changed from April 15, 2024 to May 15, 2024.
AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited) (Continued)
October 2022, Financing Facility, 6.70%, due August 31, 2039
During the three months ended March 31, 2024, we drew down an additional $35,448 and at March 31, 2024, $376,836 was outstanding under this facility, net of unamortized debt discount and issuance costs.
April 2023, Construction Credit Facility, 6.80%, due July 31, 2024
During the three months ended March 31, 2024, we drew down an additional $5,001 and at March 31, 2024, $138,260 was outstanding under this facility, net of unamortized debt discount. At March 31, 2024, there was no availability remaining.
August 2023, Construction Credit Facility, 9.32%, due August 31, 2026
During the three months ended March 31, 2024, we drew down an additional $31,204 and at March 31, 2024, $296,931 was outstanding under this facility, net of unamortized debt discount and issuance costs. We were in default on this credit facility due to administrative errors, for which a waiver was received on April 5, 2024.
Debt Instruments - Energy Project Asset Acquisitions
As discussed in Note 6, on August 4, 2023, we acquired an energy asset project. The purchase price for phase 1 was $87,964, of which $5,000 was paid in cash, $46,694 was financed through a seller’s note, and we assumed a construction loan on the energy asset project for $36,270. During the year ended December 31, 2023, we paid $18,400 in principal on the seller’s note. In January 2024, the purchase price was increased by $1,147 and we paid off the seller’s note in the amount of $29,441.
On February 26, 2024, the construction loan in the amount of $36,270 was converted into a term loan and has a maturity date of April 2030. The term loan bears a base SOFR interest rate of 5.33% at March 31, 2024, and an applicable margin of 1.635% per annum for four years after the term conversion date and 1.76% per annum for the following two years. The interest and principal is paid quarterly commencing on March 31, 2024. We failed to achieve the final conditions required to convert the term loan on or prior to March 31, 2024, however, a waiver was obtained on May 1, 2024 and the deadline of achieving the final conditions was extended to May 31, 2024.
In the second phase, which closed on January 12, 2024, we acquired BCE, including its interest in a consolidated joint venture and its interests in project subsidiaries developing or with rights to develop solar, battery, and microgrid assets for an adjusted purchase price of $47,956, of which $9,839 was paid in cash and $32,500 was financed through a seller’s note. The note bears interest at fixed rate of 5.0% per annum and the principal and interest is due on August 2024.
April 2024, Senior Secured Notes, due June 30, 2042
On April 5, 2024, an Omnibus Amendment and Reaffirmation Agreement was executed with reference to the Note Purchase and Private Shelf Agreement, dated as of July 27, 2021, and two new series B notes (first lien and second lien) were authorized in the amounts of $92,512 and $12,657, with a maturity date of June 30, 2042. Gross proceeds from the initial issuance on April 5, 2024 were $83,282 and $12,292 with the remainder to be issued upon achieving certain permitting-related and other administrative conditions. The notes bear interest at fixed rates of 6.20% and 8.00%, respectively, per annum and the interest is payable quarterly commencing September 30, 2024. At closing, we incurred $1,052 in lenders fees and debt issuance costs. Proceeds from these notes in the amount of $86,462 were used to pay a portion of the August 2023 construction credit facility.
9. INCOME TAXES
We recorded a provision for income taxes of $0 and benefit of $503 for the three months ended March 31, 2024 and 2023, respectively.
The effective tax rate was 0.0% for the three months ended March 31, 2024, compared to a benefit of 47.7% for the three months ended March 31, 2023. The principal reasons for the higher effective rate for 2024 is due to the effects of a smaller Section 179D Energy Efficient Building deduction, offset by higher investment tax credits from solar, and storage plants placed into service or are forecasted to be placed into service during 2024, state taxes, and foreign earnings.
AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited) (Continued)
10. COMMITMENTS AND CONTINGENCIES
From time to time, we issue letters of credit and performance bonds with our third-party lenders, to provide collateral.
Legal Proceedings
We are involved in a variety of other claims and other legal proceedings generally incidental to our normal business activities. When we conclude that it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, it is accrued through a charge to earnings and, if material, disclosed below. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. While the ultimate amount of liability incurred in any of these matters is dependent on future developments, in our opinion, the recorded liability is adequate to cover the future payment of such liability and claims. However, the final outcome of any of these claims and legal proceedings cannot be predicted with certainty, and unfavorable or unexpected outcomes could result in additional accruals that could be significant to results of operations in a particular year or quarter. Any adjustments to the recorded liability will be reflected in earnings in the periods in which such adjustments become known. For any other claims where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established, but the matter, if potentially material, is disclosed below. We routinely review relevant information with respect to our matters and update our accruals, disclosures and estimates of reasonably possible loss based on such reviews. While the outcome of any of these matters cannot be accurately predicted, we do not believe the ultimate resolution of any of these existing matters would have a material adverse effect on our financial condition or results of operations.
In October 2021, we entered into a contract with SCE to design and build three grid scale battery energy storage system (“BESS”) at three sites near existing substation parcels throughout SCE’s service territory in California with an aggregate capacity of 537.5 megawatt (“MW”) (“the SCE Agreement”). As previously disclosed, due to supply chain delays, weather and other events, we were unable to complete the projects by August 1, 2022 (the “Guaranteed Completion Date”) and made related force majeure claims. In late 2022, SCE also instructed us to adjust the completion of the sites into 2023. Under the SCE Agreement, a failure to reach the Guaranteed Completion Date could, under certain circumstances, result in liquidated damages up to a maximum amount of $89 million being applied. We have been working with SCE to analyze the applicability and scope of force majeure relief based on our force majeure claims. In February 2024, in response to us issuing an invoice to SCE for one of the sites, SCE notified us that they intend to withhold liquidated damages for that project. Our view is that liquidated damages should not be applied. It is at least reasonably possible we may incur an obligation to pay liquidated damages up to the maximum amount.
Commitments as a Result of Acquisitions
In December 2021, we completed our acquisition of Plug Smart which provided for an earn-out based on future EBITDA targets beginning with EBITDA performance for the month of December 2021 and each fiscal year thereafter, over a five-year period through December 31, 2026. The maximum cumulative earn-out is $5,000 and we evaluated financial forecasts of the acquired business and concluded that the fair value of this earn-out was approximately $1,465 upon acquisition and as of December 31, 2023. At March 31, 2024, the fair value of the contingent consideration remained consistent at $1,465 and is included in accrued expenses and other current liabilities, and other liabilities on the condensed consolidated balance sheets. See Note 11 for additional information.
The August 4, 2023 purchase and sale agreement with BCE includes a potential earn-out that could be earned if the projects achieve specified value thresholds in certain phase 2 projects, each of which is very early in development, or if milestones are achieved on other future projects that are not yet started. The total earn-out is limited to $40,000 over a seven-year period beginning on January 12, 2024. We shall record a liability for the phase 2 earn-out payments when the amounts are probable and estimable. As of March 31, 2024, none of the earn-out amounts are considered probable and estimable.
11. FAIR VALUE MEASUREMENT
We recognize our financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or
AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited) (Continued)
liability in an orderly transaction between market participants on the measurement date. Three levels of inputs that may be used to measure fair value are as follows:
Level 1: Inputs are based on unadjusted quoted prices for identical instruments traded in active markets.
Level 2: Inputs are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.
The following table presents the input level used to determine the fair values of our financial instruments measured at fair value on a recurring basis: | | | | | | | | | | | | | | | | | |
| | | Fair Value as of |
| Level | | March 31, 2024 | | December 31, 2023 |
Assets: | | | | | |
Interest rate swap instruments | 2 | | $ | 5,172 | | | $ | 3,970 | |
| | | | | |
| | | | | |
Liabilities: | | | | | |
Interest rate swap instruments | 2 | | $ | — | | | $ | 629 | |
| | | | | |
Make-whole provisions | 2 | | 4,755 | | | 6,012 | |
Contingent consideration | 3 | | 1,465 | | | 1,465 | |
Total liabilities | | | $ | 6,220 | | | $ | 8,106 | |
The following table sets forth a summary of changes in the fair value of contingent consideration liability classified as level 3:
| | | | | | | | | | | |
| Fair Value as of |
| March 31, 2024 | | December 31, 2023 |
Contingent consideration liability balance at the beginning of period | $ | 1,465 | | | $ | 4,158 | |
| | | |
Changes in fair value included in earnings | — | | | 347 | |
Payment of contingent consideration | — | | | (3,040) | |
| | | |
Contingent consideration liability balance at the end of period | $ | 1,465 | | | $ | 1,465 | |
The following table sets forth the fair value and the carrying value of our long-term debt, excluding financing leases: | | | | | | | | | | | | | | | | | | | | | | | |
| As of March 31, 2024 | | As of December 31, 2023 |
| Fair Value | | Carrying Value | | Fair Value | | Carrying Value |
Long-term debt (Level 2) | $ | 1,527,006 | | | $ | 1,536,879 | | | $ | 1,466,458 | | | $ | 1,478,394 | |
The fair value of our long-term debt was estimated using discounted cash flows analysis, based on our current incremental borrowing rates for similar types of borrowing arrangements which are considered to be level two inputs. There have been no transfers in or out of level two or three financial instruments for the three months ended March 31, 2024 and the year ended December 31, 2023.
We are also required to periodically measure certain other assets at fair value on a nonrecurring basis, including long-lived assets, goodwill and other intangible assets. We calculated the fair value used in our annual goodwill impairment analysis utilizing a discounted cash flow analysis and determined that the inputs used were level 3 inputs. There were no assets recorded at fair value on a non-recurring basis as of March 31, 2024 or December 31, 2023.
AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited) (Continued)
12. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The following table presents information about the fair value amounts of our cash flow derivative instruments: | | | | | | | | | | | | | | | | | |
| | | Derivatives as of |
| | | March 31, 2024 | | December 31, 2023 |
| Balance Sheet Location | | Fair Value | | Fair Value |
Derivatives Designated as Hedging Instruments: | | | | | |
Interest rate swap contracts | Other assets | | $ | 1,752 | | | $ | 1,023 | |
| | | | | |
Derivatives Not Designated as Hedging Instruments: | | | | | |
Interest rate swap contracts | Other assets | | $ | 3,420 | | | $ | 2,947 | |
Interest rate swap contracts | Other liabilities | | $ | — | | | $ | 629 | |
| | | | | |
| | | | | |
Make-whole provisions | Other liabilities | | $ | 4,755 | | | $ | 6,012 | |
As of March 31, 2024 and December 31, 2023, all but 3 of our freestanding derivatives were designated as hedging instruments.
The following table presents information about the effects of our derivative instruments on our condensed consolidated statements of income and condensed consolidated statements of comprehensive income: | | | | | | | | | | | | | | | | | | | | | |
| | | Amount of (Gain) Loss Recognized in Net (Loss) Income |
| Location of (Gain) Loss Recognized in Net (Loss) Income | | Three Months Ended March 31, | | |
| | 2024 | | 2023 | | | | |
Derivatives Designated as Hedging Instruments: | | | | | | | | |
Interest rate swap contracts | Other expenses, net | | $ | (276) | | | $ | 11 | | | | | |
|