Ameresco, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

ENERGY ASSETS, NET

ENERGY ASSETS, NET

9 Months Ended

Sep. 30, 2024

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Energy assets, net consisted of the following:


	September 30, 2024		December 31, 2023
Energy assets (1)	$	2,304,905	$	2,054,145
Less - accumulated depreciation and amortization	(422,317)		(364,721)
Energy assets, net	$	1,882,588	$	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 and excludes energy assets held for sale. See section below and Note 19 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 $48,035, of which $9,839 was paid in cash and $32,500 was financed through a seller’s note. The remaining balance due of $5,696 was paid during the nine months ended September 30, 2024. In September 2024, we paid a portion of the seller’s note in the amount of $12,500. We also assumed four land leases for the energy asset projects.

See Note 8 for additional information about the BCE-related loans, Note 7 for information on the leases and Note 10 for potential additional commitments.

Phase 2, the purchase of the energy asset projects did not constitute a business in accordance with ASC 805-50, Business Combinations.

Transfer of Investment Tax Credits

On June 27, 2024 we sold investment tax credits (“ITC”) on four energy assets to a third party at a fair value of $23,667 which was received during the three months ended June 30, 2024. We also received a deposit of $239 for the sale of ITC on four additional energy assets at a total fair value of $23,867. During the quarter ended September 30, 2024 we sold the ITC on the remaining four energy assets and received proceeds of $23,628. The benefit from the sale of the ITC will be recognized in profit or loss as a reduction to depreciation expense over the life of the energy assets.

Depreciation and Amortization Expense

The following table sets forth our depreciation and amortization expense on energy assets, net of deferred grant and ITC amortization:


	Three Months Ended September 30,				Nine Months Ended September 30,
Location	2024		2023		2024		2023
Cost of revenues (2)	$	21,667	$	15,122	$	57,352	$	42,847

(2) Includes depreciation and amortization on financing lease assets (see Note 7).

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 September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Capitalized interest	$	12,001	$	12,824	$	42,451	$	28,842

The following tables sets forth information related to our ARO assets and ARO liabilities:


	Location	September 30, 2024		December 31, 2023
ARO assets, net	Energy assets, net	$	4,495	$	4,800


ARO liabilities, non-current	Other liabilities	$	6,071	$	5,960


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Depreciation expense of ARO assets	$	65	$	53	$	175	$	161
Accretion expense of ARO liabilities	$	89	$	64	$	243	$	194