Ameresco Inc

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the notes related thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2023 included in our Annual Report on Form 10-K (“2023 Form 10-K”) for the year ended December 31, 2023 filed on February 29, 2024 with the U.S. Securities and Exchange Commission (“SEC”). This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward looking statements include statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans, objectives of management, expected market growth, the impact of changes in the U.S. administration and other characterizations of future events or circumstances. All statements, other than statements of historical fact, including statements that refer to our expectations as to the future growth of our business and associated expenses; our expectations as to revenue generation; the future availability of borrowings under our revolving credit facility; the expected future growth of the market for energy efficiency and renewable energy solutions; our backlog, awarded projects and recurring revenue and the timing of such matters; our expectations as to financing and acquisition activity; the impact of any restructuring; the uses of future earnings; our intention to repurchase shares of our Class A common stock; the expected energy and cost savings of our projects; the expected energy production capacity of our renewable energy plants; the impact of supply chain disruptions, shortage and cost of materials and labor, and other macroeconomic and geopolitical challenges; our expectations related to our agreement with SCE including the impact of any delays; the impact of a possible U.S. federal government shutdown; the U.S. Department of Commerce’s solar panel import investigation; the imposition of additional tariffs, and other characterizations of future events or circumstances are forward-looking statements. Forward looking statements are often, but not exclusively, identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” “target,” “project,” “predict” or “continue,” and similar expressions or variations. These forward-looking statements are based on current expectations and assumptions that are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially and adversely from future results expressed or implied by such forward-looking st…

Excerpt shortened here; the source contains the full paragraph.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the notes related thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2024 included in our Annual Report on Form 10-K (“2024 Form 10-K”) for the year ended December 31, 2024 filed on February 28, 2025 with the U.S. Securities and Exchange Commission (“SEC”). This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward looking statements include statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans, objectives of management, expected market growth, the impact of changes in the U.S. administration and other characterizations of future events or circumstances. All statements, other than statements of historical fact, including statements that refer to our expectations as to the future growth of our business and associated expenses; our expectations as to revenue generation; the future availability of borrowings under our revolving credit facility; the expected future growth of the market for energy efficiency and renewable energy solutions; our backlog, awarded projects and recurring revenue and the timing of such matters; our expectations as to financing and acquisition activity; the impact of any restructuring; the uses of future earnings; our intention to repurchase shares of our Class A common stock; the expected energy and cost savings of our projects; the expected energy production capacity of our renewable energy plants; the impact of supply chain disruptions, shortage and cost of materials and labor, and other macroeconomic and geopolitical challenges; our expectations related to our agreement with SCE including the impact of any delays; the impact of a possible U.S. federal government shutdown; the U.S. Department of Commerce’s solar panel import investigation; the imposition of additional tariffs, and other characterizations of future events or circumstances are forward-looking statements. Forward looking statements are often, but not exclusively, identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” “target,” “project,” “predict” or “continue,” and similar expressions or variations. These forward-looking statements are based on current expectations and assumptions that are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially and adversely from future results expressed or implied by such forward-looking st…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

In addition to organic growth, strategic acquisitions of complementary businesses and assets have been an important part of our growth enabling us to broaden our service offerings and expand our geographical reach.

Current wording

In addition to organic growth, strategic acquisitions of complementary businesses and assets, and joint venture arrangements have been an important part of our growth enabling us to broaden our service offerings and expand our geographical reach.

Previous wording

We continue to monitor the impact of global conditions on our operations, financial results, and liquidity, such as the impact of supply chain challenges, the war in Ukraine and the Middle East, the volatile U.S. political climate, including uncertainty regarding the impact of the results of the U.S. presidential election and evolving relations between the U.S. and China. The impact to our future operations, results of operations as a result of these global trends, remains uncertain and the challenges we face, such as demand for our products and services, governmental support for clean energy, an increase in costs for logistics and supply chains, intermittent supplier delays, and shortages of certain components needed for our business, such as lithium-ion battery cells, semiconductors, and other components required for our clean energy solutions may continue or become more pronounced.

Current wording

We continue to monitor the impact of global economic conditions on our operations, financial results, and liquidity, such as the impact of tariffs, supply chain challenges, the wars in Ukraine and the Middle East, evolving relations between the U.S. and China, and other geopolitical tensions. Import duties, tariffs and other import restrictions, including the Uyghur Forced Labor Protection Act, restrict the global supply of, and raise prices for, supplies needed for our business. In addition, tariffs and trade restrictions that have been introduced any may be introduced as part of the 'America First' trade policy may further increase the cost of components needed for our offerings and may strain trade relations, create inflationary pressures and cause additional supply chain disruptions. The impact to our future operations and results of operations as a result of these global trends remains uncertain and the challenges we face, including increases in costs for logistics and supply chains, intermittent supplier delays, and shortages of certain components needed for our business, such as electrical equipment, steel and aluminum as well as BESS equipment or components required for our projects and clean energy solutions may continue or become more pronounced.

Previous wording

During the nine months ended September 30, 2024, we were impacted by supply chain disruptions and varying levels of inflation, as a result macroeconomic conditions. These conditions caused delays in the timely delivery of material to customer sites, delays and disruptions in the completion of certain projects, increased shipping and transportation costs, and increased component and labor costs. This negatively impacted our results of operations during the nine months ended September 30, 2024. We expect the trends of supply chain challenges to continue. We continue to monitor macroeconomic conditions to remain flexible and to optimize and evolve our business as appropriate to address the challenges presented from these conditions.

Current wording

During the three months ended March 31, 2025, we continued to face supply chain disruptions and varying levels of inflation driven by macroeconomic conditions. This caused some delays in the timely delivery of material to customer sites and in the timely completion of certain project and increased shipping, transportation, component and labor costs, negatively impacting our results of operations during the three months ended March 31, 2025. We expect these challenges will persist and they may intensify. We continue to monitor macroeconomic conditions to remain flexible and to optimize and evolve our business as appropriate to address the challenges presented from these conditions.

Previous wording

The global emphasis on climate change and reducing carbon emissions has created opportunities for our industry. Sustainability has been at the forefront of our business since its inception, and we are committed to staying at the leading edge of innovation taking place in the energy sector. We believe the next decade will be marked by dramatic changes in the power infrastructure with resources shifting to more distributed assets, storage, and microgrids to increase overall reliability and resiliency. The sustainability efforts are impacted by regulations, and changes in the regulatory climate may impact the demand for our products and offerings. See “Our business depends in part on federal, state, provincial and local government support or the imposition of additional taxes, tariffs, duties, or other assessments on renewable energy or the equipment necessary to generate or deliver it, for energy efficiency and renewable energy, and a decline in such support could harm our business” and “Compliance with environmental laws could adversely affect our operating results” in Item 1A, Risk Factors in our 2023 Form 10-K.

Current wording

Global emphasis on climate change and reducing carbon emissions has created opportunities for our industry. Sustainability has been at the forefront of our business since its inception, and we are committed to staying at the leading edge of innovation taking place in the energy sector. We believe the next decade will be marked by dramatic changes in the power infrastructure with resources shifting to more distributed assets, storage, and microgrids to increase overall reliability and resiliency. The sustainability efforts are impacted by regulations, and changes in the regulatory climate may impact the demand for our products and offerings. See “Our business depends in part on federal, state, provincial and local government support or the imposition of additional taxes, tariffs, duties, or other assessments on renewable energy or the equipment necessary to generate or deliver it, for energy efficiency and renewable energy, and a decline in such support could harm our business” and “Compliance with environmental laws could adversely affect our operating results” in Item 1A, Risk Factors in our 2024 Form 10-K.

Previous wording

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”). The engineering, procurement and construction price is approximately $892.0 million, in the aggregate, including two years of O&M revenues, subject to customary potential adjustments for changes in the work. 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.

Current wording

In October 2021, we entered into a contract with SCE to design and build three grid scale BESS at three sites near existing substation parcels throughout SCE’s service territory in California with an aggregate capacity of 537.5 MW (“the SCE Agreement”). The engineering, procurement and construction price is approximately $892.0 million in the aggregate, including two years of O&M revenues, subject to customary potential adjustments for changes in the work. 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”). On August 30, 2024, we reached an agreement with SCE on the substantial completion of two out of three battery energy storage system projects. We received approximately $110 million on September 5, 2024 as milestone payments, reflecting both an offset of liquidated damages which are still in dispute and $3 million that SCE withheld for additional work SCE required. Upon final acceptance of these two projects, we will invoice SCE for the remaining final acceptance milestone payments for these projects. The SCE projects continue to progress, and we expect them to be finalized this year.

Previous wording

On August 30 2024, we reached an agreement with SCE on the substantial completion of two out of three battery energy storage system projects. We received approximately $110 million on September 5, 2024 as milestone payments, reflecting both a set-off of liquidated damages which are still in dispute and $3 million that SCE withheld for additional work SCE required. Upon final acceptance of these two projects, we will invoice SCE for the remaining final acceptance milestone payments for these projects. The Agreement also confirmed that the final resolution related to our obligation to pay the liquidated damages withheld and the applicability and scope of any force majeure relief as well as any cost recovery we may be entitled to remain subject to dispute. Ameresco is continuing discussions with SCE on these matters and its view continues to be that liquidated damages should not be applied. If we fail to come to an agreement with SCE about the applicability and scope of force majeure relief and liquidated damages, we may be required to pay liquidated damages up to an aggregate maximum of $89 million and may not be able to recover costs associated with the force majeure events.

Current wording

The August 2024 agreement with SCE also confirmed that the final resolution related to our obligation to pay the liquidated damages withheld and the applicability and scope of any force majeure relief as well as any cost recovery we may be entitled to remain subject to dispute. We are continuing discussions with SCE on these matters and our view continues to be that liquidated damages should not be applied. If we fail to come to an agreement with SCE about the applicability and scope of force majeure relief and liquidated damages, we may be required to pay liquidated damages up to an aggregate maximum of $89 million and may not be able to recover costs associated with the force majeure events.

Previous wording

During the nine months ended September 30, 2024, we granted 626,503 common stock options and 122,366 restricted stock units (“RSUs”) to certain employees and directors under our 2020 Plan. Our unrecognized stock-based compensation expense was $29.0 million at September 30, 2024, compared to $30.1 million at December 31, 2023, and is expected to be recognized over a weighted-average period of two years. See Note 16 “Stock-based Compensation” for additional information.

Current wording

During the three months ended March 31, 2025, we granted 88,000 common stock options and 74,160 restricted stock units (“RSUs”) to certain employees under our 2020 Plan. Our unrecognized stock-based compensation expense was $25.7 million at March 31, 2025, compared to $28.0 million at December 31, 2024, and is expected to be recognized over a weighted-average period of three years. See Note 16 “Stock-based Compensation” for additional information.

Previous wording

We define our 12-month backlog as the estimated amount of revenues that we expect to recognize in the next twelve months from our fully-contracted backlog. See “We may not recognize all revenues from our backlog or receive all payments anticipated under awarded projects and customer contracts” and “In order to secure contracts for new projects, we typically face a long and variable selling cycle that requires significant resource commitments and requires a long lead time before we realize revenues” in Item 1A, Risk Factors in our 2023 Form 10-K.

Current wording

We define our 12-month backlog as the estimated amount of revenue that we expect to recognize in the next twelve months from our fully-contracted backlog. See “We may not recognize all revenues from our backlog or receive all payments anticipated under awarded projects and customer contracts” and “In order to secure contracts for new projects, we typically face a long and variable selling cycle that requires significant resource commitments and requires a long lead time before we realize revenues” in Item 1A, Risk Factors in our 2024 Form 10-K.

Previous wording

Assets in development, which represents the potential design/build project value of renewable energy plants that have been awarded or for which we have secured development rights, were estimated at $2.3 billion and $1.8 billion, net of amount attributable to a non-controlling interest at September 30, 2024 and 2023, respectively. This is another important metric because it helps us gauge our future capital expenditure needs and develop-and-sell opportunities as well as our capacity to generate electricity or deliver renewable gas fuel which contributes to our recurring revenue stream.

Current wording

Assets in development, which represents the potential design/build project value of renewable energy plants that have been awarded or for which we have secured development rights, were estimated at $2.3 billion and $2.6 billion, net of amount attributable to a non-controlling interest at March 31, 2025 and 2024, respectively. This is another important metric because it helps us gauge our future capital expenditure needs and develop-and-sell opportunities as well as our capacity to generate electricity or deliver renewable gas fuel, which contributes to our recurring revenue stream.

Previous wording

The following tables set forth certain financial data from the condensed consolidated statements of income for the periods indicated:

Current wording

The following tables set forth certain financial data from the condensed consolidated statements of loss for the periods indicated:

Previous wording

•Revenues: total revenues for the three months ended September 30, 2024 increased over 2023 primarily due to a $142.7 million, or 59%, increase in our project revenues attributed to the timing of revenue recognized based upon costs incurred to date relative to total expected costs on active projects.

Current wording

•Revenues: total revenues for the three months ended March 31, 2025 increased over 2024 primarily due to a $47.2 million, or 23%, increase in our project revenues attributed to the timing of revenue recognized based upon costs incurred to date relative to total expected costs on active projects.

Previous wording

•Cost of Revenues and Gross Profit: the increase in cost of revenues is primarily due to the increase in project revenues described above and higher depreciation expenses from the continued growth in our operating assets portfolio. Gross profit as a percent of revenues decreased due primarily to cost budget revisions on our SCE battery storage projects and a mix of lower-margin projects.

Current wording

•Cost of Revenues and Gross Profit: the increase in cost of revenues is primarily due to the increase in project revenues described above and higher depreciation expenses from the continued growth in our operating assets portfolio. Gross profit as a percentage of revenues decreased due largely to a higher mix of lower-margin projects, primarily due to our continued growth in Europe.

Previous wording

•Selling, General and Administrative Expenses (“SG&A”): SG&A expenses for the three months ended September 30, 2024 decreased over 2023 primarily due to lower professional fees partially offset by higher occupancy costs, salaries and related benefits and insurance.

Current wording

•Selling, General and Administrative Expenses (“SG&A”): SG&A expenses for the three months ended March 31, 2025 decreased from 2024 primarily due to an additional gain of $1.4 million recognized in 2025 from the sale of an energy technology and advisory services company late in 2024, partially offset by increases in professional fees and project development.

Previous wording

•Other Expenses, Net: Other expenses, net for the three months ended September 30, 2024 increased over 2023 primarily due to higher interest expenses, net of $9.2 million related to an increase in the amount of energy asset financings and corporate debt outstanding and higher interest rates and increased losses from derivatives transactions of $6.7 million, partially offset by increased gains from foreign currency transactions of $3.6 million and a decrease in factoring fees of $1.8 million.

Current wording

•Other Expenses, Net: Other expenses, net for the three months ended March 31, 2025 increased over 2024 primarily due to higher interest expenses, net of $4.2 million related to an increase in the amount of energy asset financings and corporate debt outstanding and higher interest rates and losses from derivatives transactions of $1.3 million compared to gains last year of $2.4 million, partially offset by gains from foreign currency transactions of $1.5 million and increased government incentives of $2.4 million.

Previous wording

•Income Tax Benefit: the benefit for income taxes is based on various rates set by federal, state, provincial and local authorities and is affected by permanent and temporary differences between financial accounting and tax reporting requirements. We expect the effective tax rate will be higher in 2024 as compared to 2023 primarily due to the effects of foreign earnings, a smaller period discrete benefit and lower current year forecast for Section 179D Energy Efficient Building deductions, offset by higher investment tax credits from solar, and storage plants placed into service or are forecasted to be placed into service during 2024.

Current wording

•Income Tax Expense: the provision for income taxes is based on various rates set by federal, state, provincial and local authorities and is affected by differences between financial accounting and tax reporting requirements. We expect the effective tax rate benefit will be lower in 2025 as compared to 2024 primarily due to decreased investment tax credits from solar, and storage plants placed into service or are forecasted to be placed into service during 2025 that are fixed over higher income, offset by state taxes and the effects of foreign earnings.

Previous wording

•Net Income and Earnings Per Share: Net income attributable to common shareholders decreased due to the reasons described above, partially offset by a lower net loss attributable to NCI and redeemable NCI this year compared to the prior year. Basic and diluted earnings per share for the three months ended September 30, 2024 was $0.34 and $0.33, respectively, a decrease of $0.07 in per share compared to the same period of 2023.

Current wording

•Net Loss and Earnings Per Share: Net loss decreased due to the reasons described above. The net loss attributable to non-controlling interests and redeemable non-controlling interests is lower this year compared to the prior year. Basic and diluted earnings per share for the three months ended March 31, 2025 was $(0.10), a decrease of $0.04 per share compared to the same period of 2024.

Previous wording

Our reportable segments for the three and nine months ended September 30, 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. These segments do not include results of other activities, such as corporate operating expenses not specifically allocated to the segments. See Note 17 “Business Segment Information” for additional information about our segments.

Current wording

Our reportable segments three months ended March 31, 2025 are North America Regions, U.S. Federal, Europe, Renewable Fuels, and All Other. These segments do not include results of other activities, such as corporate operating expenses not specifically allocated to the segments. See Note 17 “Business Segment Information” for additional information about our segments.

Previous wording

All financial result comparisons made below relate to the three and nine-month period and are against the same prior year period unless otherwise noted.

Current wording

All financial result comparisons made below relate to the three-month period and are against the same prior year period unless otherwise noted.

Previous wording

•Europe: revenues increased primarily due to higher project revenues resulting from the timing of revenue recognized based upon costs incurred to date relative to total expected costs on active projects in the United Kingdom compared to the prior period.

Current wording

•Europe: revenues increased primarily due to higher project revenues resulting from the timing of revenue recognized based upon costs incurred to date relative to total expected costs on active projects primarily related to increased activity under our joint venture in Greece compared to the prior period.

Previous wording

•Alternative Fuels: the increase is primarily due to higher project revenues and an increase in energy asset revenues resulting from the continued growth of our operating portfolio, increased production levels and stronger pricing on renewable identification numbers (“RIN’s”) generated from our renewable natural gas facilities.

Current wording

•Renewable Fuels: the increase is primarily due to an increase in energy asset revenues resulting from the continued growth of our operating portfolio and increased production levels partially offset by lower pricing on renewable identification numbers (“RIN’s”) generated from our renewable natural gas facilities.

Previous wording

•All Other: All other revenues increased year-over-year primarily due to increased consulting revenue.

Current wording

•All Other: All other revenues decreased year-over-year primarily due to the divestiture of an energy technology and advisory services company in the fourth quarter of 2024.

Previous wording

Income before Taxes and Unallocated Corporate Activity

Current wording

Loss before Taxes and Unallocated Corporate Activity

Previous wording

•North America Regions: the increase is primarily due to the increased revenues noted above and lower SG&A expenses, partially offset by higher interest expenses, net and lower gains on derivatives.

Current wording

•North America Regions: the increase is primarily due to the increased revenues noted above, increased government incentives of $2.4 million, partially offset by higher interest expenses, net and losses on derivatives versus gains in the prior period.

Previous wording

•Alternative Fuels: the is primarily due to the increased revenues described above and lower SG&A expenses, partially offset by higher interest expenses and losses on derivatives.

Current wording

•Renewable Fuels: the decrease is primarily due to higher interest expenses and losses on derivatives, partially offset by the increased revenues noted above.

Previous wording

•Unallocated corporate activity includes all corporate level selling, general and administrative expenses and other expenses not allocated to the segments. We do not allocate any indirect expenses to the segments. Corporate activity decreased for the three-month period is primarily due to lower SG&A expenses and increased gains from foreign currency transactions, partially offset by higher interest expenses, net. Corporate activity increased for the nine-month period primarily due to higher interest expenses, net partially offset by higher foreign currency transaction gains.

Current wording

•Unallocated corporate activity includes all corporate level selling, general and administrative expenses and other expenses not allocated to the segments. We do not allocate any indirect expenses to the segments. Corporate activity decreased for the three-month period is primarily due to an additional gain of $1.4 million recognized in 2025 from the sale of an energy technology and advisory services company late in 2024, increased gains from foreign currency transactions, partially offset by higher interest expenses, net.

Previous wording

Since inception, we have funded operations primarily through cash flow from operations, advances from Federal ESPC projects, our senior secured credit facility, our second lien term loan and various forms of other debt and equity offerings. See Note 8 “Debt and Financing Lease Liabilities” for additional information.

Current wording

Since inception, we have funded operations primarily through cash flow from operations, advances from Federal ESPC projects, our senior secured credit facility, second lien term loan and various forms of other debt. See Note 8 “Debt and Financing Lease Liabilities” for additional information.

Previous wording

We regularly monitor and assess our ability to meet funding requirements. We believe that cash and cash equivalents, working capital and availability under our revolving senior secured credit facility, combined with our right (subject to lender consent) to increase our revolving credit facility by $100.0 million, plus asset sales, tax equity transfers, ITC sales, and our general access to credit and equity markets, will be sufficient to fund our operations through at least November 2025 and thereafter.

Current wording

We regularly monitor and assess our ability to meet funding requirements. We believe that cash and cash equivalents, working capital and availability under our revolving senior secured credit facility, combined with our right (subject to lender consent) to increase our revolving credit facility by $100.0 million, plus develop and sell asset transactions, sales of tax attributes, and our general access to credit and equity markets, will be sufficient to fund our operations through at least May 2026 and thereafter.

Previous wording

We continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate and that we can meet our capital and debt service requirements. This may include limiting discretionary spending across the organization and re-prioritizing our capital projects amid times of political unrest, the duration of supply challenges, the rate and duration of the inflationary pressures, and other events affecting our liquidity. For example, recent increases in inflation and interest rates have impacted overall market returns on assets. We have therefore been particularly prudent in our capital commitments over the past few quarters, ensuring that our assets in development continue to align with our hurdle rates.

Current wording

We continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can continue to operate and that we can meet our capital and debt service requirements. This may include limiting discretionary spending across the organization and re-prioritizing our capital projects amid times of political unrest, the duration of supply challenges, and the rate and duration of the inflationary pressures, and other events affecting our liquidity. For example, recent increases in inflation and interest rates have impacted overall market returns on assets. We have therefore been particularly prudent in our capital commitments over the past few quarters, ensuring that our assets in development continue to align with our hurdle rates.

Previous wording

As of September 30, 2024, the balance on the senior secured term loans was $71.3 million, the balance on the senior secured revolving credit facility was $106.5 million, and we had funds available of $67.1 million.

Current wording

As of March 31, 2025, the balance on the senior secured term loans was $98.8 million, the balance on the senior secured revolving credit facility was $78.0 million, and we had funds available of $24.6 million.

Previous wording

We have entered into a number of construction and term loan agreements for the purpose of constructing and owning certain renewable energy plants. The physical assets and the operating agreements related to the renewable energy plants are generally owned by wholly owned, single member “special purpose” subsidiaries of Ameresco. These construction and term loans are structured as project financings made directly to a subsidiary, and upon commercial operation and achieving certain milestones in the credit agreement, the related construction loan converts into a term loan. While we are required under generally accepted accounting principles (“GAAP”) to reflect these loans as liabilities on our condensed consolidated balance sheets, they are generally non-recourse and not direct obligations of Ameresco, Inc., except to the extent of completion guarantees and EPC contracts and certain equity contribution obligations under our August 2023 Construction Credit Facility as described in more detail below.

Current wording

We have entered into a number of construction and term loan agreements for the purpose of constructing and owning certain renewable energy plants. The physical assets and the operating agreements related to the renewable energy plants are generally owned by wholly owned, single member “special purpose” subsidiaries of Ameresco. These construction and term loans are structured as project financings made directly to a subsidiary, and upon commercial operation and achieving certain milestones in the credit agreement, the related construction loan converts into a term loan. While we are required under generally accepted accounting principles (“GAAP”) to reflect these loans as liabilities on our condensed consolidated balance sheets, they are generally non-recourse and not direct obligations of Ameresco, Inc., except to the extent of completion guarantees and EPC contracts and certain equity contribution obligations under our August 2023 Construction Credit Facility.

Previous wording

During the nine months ended September 30, 2024, we sold and leased back three energy assets for $24.3 million in cash proceeds under our master sale-leaseback agreements.

Current wording

During the three months ended March 31, 2025, we sold and leased back two energy assets for $9.5 million in cash proceeds under our master sale-leaseback agreements.

Previous wording

We have arrangements with certain third-parties to provide advances to us during the construction or installation of projects for certain customers, typically federal governmental entities, in exchange for our assignment to the lenders of our rights to the long-term receivables arising from the ESPCs related to such projects. These financings totaled $520.5 million as of September 30, 2024. Under the terms of these financing arrangements, we are required to complete the construction or installation of the project in accordance with the contract with our customer, and the liability remains on our condensed consolidated balance sheets until the completed project is accepted by the customer.

Current wording

We have arrangements with certain third-parties to provide advances to us during the construction or installation of projects for certain customers, typically federal governmental entities, in exchange for our assignment to the lenders of our rights to the long-term receivables arising from the ESPCs related to such projects. These financings totaled $567.6 million as of March 31, 2025. Under the terms of these financing arrangements, we are required to complete the construction or installation of the project in accordance with the contract with our customer, and the liability remains on our condensed consolidated balance sheets until the completed project is accepted by the customer.

Previous wording

We are the primary obligor for financing received, but only until final acceptance of the work by the customer. At this point recourse to us ceases and the ESPC receivables are transferred to the investor. The transfers of receivables under these agreements do not qualify for sales accounting until final customer acceptance of the work, so the advances from the investors are not classified as operating cash flows. Cash draws that we received under these ESPC agreements were $129.4 million during the nine months ended September 30, 2024, and are recorded as financing cash inflows. The use of the cash received under these arrangements is to pay project costs classified as operating cash flows and totaled $110.8 million during the nine months ended September 30, 2024. Due to the manner in which the ESPC contracts with the third-party investors are structured, our reported operating cash flows are materially impacted by the fact that operating cash flows only reflect the ESPC contract expenditure outflows and do not reflect any inflows from the corresponding contract revenues. Upon acceptance of the project by the federal customer the ESPC receivable and corresponding ESPC liability are removed from our condensed consolidated balance sheets as a non-cash settlement.

Current wording

We are the primary obligor for financing received, but only until final acceptance of the work by the customer. At this point recourse to us ceases and the ESPC receivables are transferred to the investor. The transfers of receivables under these agreements do not qualify for sales accounting until final customer acceptance of the work, so the advances from the investors are not classified as operating cash flows. Cash draws that we received under these ESPC agreements were $29.7 million during the three months ended March 31, 2025, and are recorded as financing cash inflows. The use of the cash received under these arrangements is to pay project costs classified as operating cash flows and totaled $17.9 million during the three months ended March 31, 2025. Due to the manner in which the ESPC contracts with the third-party investors are structured, our reported operating cash flows are materially impacted by the fact that operating cash flows only reflect the ESPC contract expenditure outflows and do not reflect any inflows from the corresponding contract revenues. Upon acceptance of the project by the federal customer the ESPC receivable and corresponding ESPC liability are removed from our condensed consolidated balance sheets as a non-cash settlement.

Previous wording

Our cash flows from operating activities during the nine months ended September 30, 2024 increased over the same period last year primarily due to increases in cash flows of $121.4 million in unbilled revenue (costs and estimated earnings in excess of billings) due to the timing of when certain projects are invoiced, including our SCE battery storage project when compared to the prior year period, $26.0 million in prepaid expenses and other current assets, $52.0 million in accounts payable, accrued expenses and other current liabilities, $32.8 million in Federal ESPC receivable, and $32.1 million in deferred revenue (billings in excess of cost and estimated earnings), partially offset by decreases of $122.2 million in accounts receivable and $14.8 million in net income.

Current wording

Our cash flows from operating activities during the three months ended March 31, 2025 decreased over the same period last year primarily due to increases in cash outflows of $111.8 million in accounts payable, accrued expenses and other current liabilities and $17.8 million in prepaid expenses and other current assets, partially offset by increases in cash inflows of $49.8 million in unbilled revenue (costs and estimated earnings in excess of billings) due to the timing of when certain projects are invoiced when compared to the prior year period and $29.8 million in accounts receivable.

Previous wording

During the nine months ended September 30, 2024 we made capital investments of $341.8 million in new energy assets and $13.6 million in major maintenance of energy assets compared to $445.5 million and $8.0 million, respectively, in 2023.

Current wording

During the three months ended March 31, 2025 we made capital investments of $107.9 million in new energy assets and $6.0 million in major maintenance of energy assets compared to $105.6 million and $5.4 million, respectively, in 2024.

Previous wording

We currently plan to invest approximately $20 million to $75 million in additional capital expenditures during the remainder of 2024, principally for the construction or acquisition of new renewable energy plants, the majority of which we expect to fund with project finance debt.

Current wording

We currently plan to invest approximately $200 million to $250 million in additional capital expenditures during the remainder of 2025, principally for the construction or acquisition of new renewable energy plants, the majority of which we expect to fund with project finance debt.

Previous wording

Our primary sources of financing for the nine months ended September 30, 2023 were net proceeds from long-term debt of $720.0 million, net proceeds received from Federal ESPC projects and energy asset receivable financing arrangements of $119.8 million, partially offset by payments on long-term debt of $162.7 million and net payments on our senior secured revolving credit facility of $115.0 million.

Current wording

Our primary sources of financing for the three months ended March 31, 2025 were proceeds from energy asset financings of $112.6 million, proceeds from long-term corporate debt financings of $100.0 million, net proceeds received from Federal ESPC projects and energy asset receivable financing arrangements of $33.3 million, partially offset by payments on long-term debt and debt fees of $76.7 million, and net payments on our senior secured revolving credit facility of $57.0 million.

Previous wording

Our primary sources of financing for the nine months ended September 30, 2024 were net proceeds from long-term debt of $653.5 million, net proceeds received from Federal ESPC projects and energy asset receivable financing arrangements of $134.6 million, contributions from a non-controlling interest of $33.8 million, offset by payments on long-term debt of $441.6 million, net, payments on the seller’s note for the BCE phase 1 and 2 acquisitions of $41.9 million, and net payments on our senior secured revolving credit facility of $33.4 million.

Current wording

Our primary sources of financing for the three months ended March 31, 2024 were proceeds from energy asset financings of $89.3 million, contributions from a non-controlling interest of $28.9 million, net proceeds received from Federal ESPC projects and energy asset receivable financing arrangements of $24.3 million, net proceeds from our senior secured revolving credit facility of $20.1 million, partially offset by payments on long-term debt and debt fees of $55.8 million, and payments on seller’s promissory note of $29.4 million.

Previous wording

We currently plan additional project financings of approximately $50 million during the remainder of 2024 to fund the construction or the acquisition of new renewable energy plants as discussed above.

Current wording

We currently plan additional project financings of approximately $250 million to $300 million during the remainder of 2025 to fund the construction or the acquisition of new renewable energy plants as discussed above.