Altus Power, Inc. [AMPS] Filings

10-Q 1 amps-20240630.htm 10-Q amps-20240630

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 June 30, 2024


☐			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 001-04321

ALTUS POWER, INC.

(Exact name of registrant as specified in its charter)

Delaware

85-3448396

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

2200 Atlantic Street, Sixth Floor

Stamford,

06902

(Address of Principal Executive Offices)

(Zip Code)

(203)-698-0090

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	AMPS	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 and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted 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 the 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	☒
Non-accelerated filer	☐	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.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of July 26, 2024, there were 159,989,890 shares of Class A common stock outstanding and 796,950 shares of Class B common stock outstanding.

Table of Contents


Part I - Financial Information
Item 1. Financial Statements			4
Condensed Consolidated Statements of Operations			4
Condensed Consolidated Statements of Comprehensive Income			5
Condensed Consolidated Balance Sheets			6
Condensed Consolidated Statements of Changes in Stockholders' Equity			8
Condensed Consolidated Statements of Cash Flows			10
Notes to Condensed Consolidated Financial Statements			12
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			35
Item 3. Quantitative and Qualitative Disclosures About Market Risk			57
Item 4. Controls and Procedures			57
Part II - Other Information
Item 1. Legal Proceedings			59
Item 1A. Risk Factors			59
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			59
Item 3. Defaults Upon Senior Securities			59
Item 4. Mine Safety Disclosures			59
Item 5. Other Information			59
Item 6. Exhibits			60
Signatures			61

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

Altus Power, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(In thousands, except share and per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating revenues, net	$	52,460	$	46,513	$	93,119	$	75,891
Operating expenses
Cost of operations (exclusive of depreciation and amortization shown separately below)	11,272		7,581		22,192		13,557
General and administrative	12,240		8,291		22,262		15,653
Depreciation, amortization and accretion expense	17,166		12,959		33,296		24,335
Acquisition and entity formation costs	450		1,369		1,516		2,860
(Gain) loss on fair value remeasurement of contingent consideration, net	(1,400)		50		(1,479)		100
Gain on disposal of property, plant and equipment	—		—		(88)		—
Stock-based compensation (benefit) expense	(4,227)		4,256		77		7,128
Total operating expenses	$	35,501	$	34,506	$	77,776	$	63,633
Operating income	16,959		12,007		15,343		12,258
Other (income) expense
Change in fair value of Alignment Shares liability	(11,881)		(2,805)		(37,958)		(19,823)
Other (income) expense, net	(1,135)		1,789		(1,818)		1,879
Interest expense, net	17,865		8,524		34,058		20,970
Total other expense (income), net	$	4,849	$	7,508	$	(5,718)	$	3,026
Income before income taxes	$	12,110	$	4,499	$	21,061	$	9,232
Income tax benefit (expense)	21,039		(1,129)		16,143		(2,017)
Net income	$	33,149	$	3,370	$	37,204	$	7,215
Net loss attributable to noncontrolling interests and redeemable noncontrolling interests	(4,496)		(3,455)		(7,950)		(5,227)
Net income attributable to Altus Power, Inc.	$	37,645	$	6,825	$	45,154	$	12,442
Net income per share attributable to common stockholders
Basic	$	0.23	$	0.04	$	0.28	$	0.08
Diluted	$	0.23	$	0.04	$	0.27	$	0.08
Weighted average shares used to compute net income per share attributable to common stockholders
Basic	159,902,589		158,719,684		159,464,164		158,670,950
Diluted	163,585,652		158,978,275		165,500,438		160,747,045

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Altus Power, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(In thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net income	$	33,149	$	3,370	$	37,204	$	7,215
Other comprehensive income (loss)
Foreign currency translation adjustment	—		—		9		9
Unrealized gain on a cash flow hedge, net of tax	—		3,770		—		2,999
Reclassification of realized gain on cash flow hedge to net income	(433)		—		(837)		—
Other comprehensive (loss) income, net of tax	$	(433)	$	3,770	$	(828)	$	3,008
Total comprehensive income	$	32,716	$	7,140	$	36,376	$	10,223
Comprehensive loss attributable to the noncontrolling and redeemable noncontrolling interests	(4,496)		(3,455)		(7,950)		(5,227)
Comprehensive income attributable to Altus Power, Inc.	$	37,212	$	10,595	$	44,326	$	15,450

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Altus Power, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands, except share and per share data)


	As of June 30, 2024		As of December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	78,379	$	160,817
Current portion of restricted cash	1,166		45,358
Accounts receivable, net	31,822		17,100
Other current assets	8,574		5,522
Total current assets	119,941		228,797
Restricted cash, noncurrent portion	12,733		12,752
Property, plant and equipment, net	1,751,125		1,619,047
Intangible assets, net	48,544		47,588
Operating lease asset	182,031		173,804
Derivative assets	2,965		530
Deferred tax assets, net	6,314		—
Other assets	8,294		7,831
Total assets	$	2,131,947	$	2,090,349
Liabilities, redeemable noncontrolling interests, and stockholders' equity
Current liabilities:
Accounts payable	$	7,492	$	7,338
Construction payable	13,836		14,108
Interest payable	15,133		8,685
Purchase price payable, current	5,673		9,514
Due to related parties	67		51
Current portion of long-term debt, net	73,570		39,611
Operating lease liability, current	4,521		6,861
Contract liability, current	2,453		2,940
Other current liabilities	9,141		17,402
Total current liabilities	131,886		106,510
Alignment Shares liability	22,534		60,502
Long-term debt, net of unamortized debt issuance costs and current portion	1,180,168		1,163,307
Intangible liabilities, net	18,169		18,945
Asset retirement obligations	18,966		17,014
Operating lease liability, noncurrent	187,891		180,701
Contract liability, noncurrent	6,074		5,620
Deferred tax liabilities, net	—		9,831
Other long-term liabilities	3,012		2,908
Total liabilities	$	1,568,700	$	1,565,338
Commitments and contingent liabilities (Note 11)
Redeemable noncontrolling interests	22,891		26,044
Stockholders' equity
Common stock $0.0001 par value; 988,591,250 shares authorized as of June 30, 2024, and December 31, 2023; 159,989,890 and 158,999,886 shares issued and outstanding as of June 30, 2024, and December 31, 2023	16		16
Additional paid-in capital	484,181		485,063
Accumulated deficit	(10,120)		(55,274)
Accumulated other comprehensive income	16,445		17,273
Total stockholders' equity	$	490,522	$	447,078
Noncontrolling interests	49,834		51,889
Total equity	$	540,356	$	498,967
Total liabilities, redeemable noncontrolling interests, and equity	$	2,131,947	$	2,090,349

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The following table presents the assets and liabilities of the consolidated variable interest entities (Refer to Note 4).


(In thousands)	As of June 30, 2024		As of December 31, 2023
Assets of consolidated VIEs, included in total assets above:
Cash	$	12,605	$	12,191
Current portion of restricted cash	325		1,066
Accounts receivable, net	15,620		8,068
Other current assets	1,283		973
Restricted cash, noncurrent portion	3,547		4,002
Property, plant and equipment, net	868,148		845,024
Intangible assets, net	5,781		5,507
Operating lease asset	95,858		79,597
Other assets	2,243		2,228
Total assets of consolidated VIEs	$	1,005,410	$	958,656
Liabilities of consolidated VIEs, included in total liabilities above:
Accounts payable	$	2,235	$	1,056
Operating lease liability, current	2,280		2,542
Current portion of long-term debt, net	3,022		3,021
Contract liability, current	484		484
Other current liabilities	1,629		1,473
Long-term debt, net of unamortized debt issuance costs and current portion	38,626		38,958
Intangible liabilities, net	4,105		4,522
Asset retirement obligations	9,780		9,185
Operating lease liability, noncurrent	98,779		82,913
Contract liability, noncurrent	4,148		4,011
Other long-term liabilities	1,734		1,771
Total liabilities of consolidated VIEs	$	166,822	$	149,936

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Altus Power, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(unaudited)

(In thousands, except share data)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive (Loss)Income		Accumulated Deficit		Total Stockholders' Equity		Non Controlling Interests		Total Equity
	Shares	Amount
As of March 31, 2023	158,989,953	$	16	$	474,202	$	(762)	$	(40,302)	$	433,154	$	32,699	$	465,853
Stock-based compensation expense	—	—		4,256		—		—		4,256		—		4,256
Cash distributions to noncontrolling interests	—	—		—		—		—		—		(489)		(489)
Cash contributions from noncontrolling interests	—	—		—		—		—		—		4,537		4,537
Noncontrolling interests assumed through acquisitions	—	—		—		—		—		—		204		204
Other comprehensive income	—	—		—		3,770		—		3,770		—		3,770
Net income (loss)	—	—		—		—		6,825		6,825		(2,505)		4,320
As of June 30, 2023	158,989,953	16		478,458		3,008		(33,477)		448,005		34,446		482,451


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders' Equity		Non Controlling Interests		Total Equity
	Shares	Amount
As of March 31, 2024	159,874,981	$	16	$	488,408	$	16,878	$	(47,765)	$	457,537	$	50,515	$	508,052
Stock-based compensation benefit(1)	114,909	—		(4,227)		—		—		(4,227)		—		(4,227)
Cash distributions to noncontrolling interests	—	—		—		—		—		—		(574)		(574)
Accrued distributions to noncontrolling interests	—	—		—		—		—		—		(77)		(77)
Cash contributions from noncontrolling interests	—	—		—		—		—		—		4,103		4,103
Other comprehensive loss	—	—		—		(433)		—		(433)		—		(433)
Net income (loss)	—	—		—		—		37,645		37,645		(4,133)		33,512
As of June 30, 2024	159,989,890	$	16	$	484,181	$	16,445	$	(10,120)	$	490,522	$	49,834	$	540,356

(1) Stock-based compensation benefit is recognized in connection with the CEO transition. Refer to Note 14, "Stock-Based Compensation" for further details.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Altus Power, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(unaudited)

(In thousands, except share data)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders' Equity		Non Controlling Interests		Total Equity
	Shares	Amount
As of December 31, 2022	158,904,401	$	16	$	470,004	$	—	$	(45,919)	$	424,101	$	20,825	$	444,926
Stock-based compensation expense	83,541	—		7,069		—		—		7,069		—		7,069
Cash distributions to noncontrolling interests	—	—		—		—		—		—		(1,015)		(1,015)
Cash contributions from noncontrolling interests	—	—		—		—		—		—		6,274		6,274
Conversion of alignment shares to Class A Common Stock	2,011	—		11		—		—		11		—		11
Noncontrolling interests assumed through acquisitions	—	—		—		—		—		—		13,500		13,500
Redemption of redeemable noncontrolling interests	—	—		1,374		—		—		1,374		—		1,374
Other comprehensive income	—	—		—		3,008				3,008		—		3,008
Net income (loss)	—	—		—		—		12,442		12,442		(5,138)		7,304
As of June 30, 2023	158,989,953	16		478,458		3,008		(33,477)		448,005		34,446		482,451


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders' Equity		Non Controlling Interests		Total Equity
	Shares	Amount
As of December 31, 2023	158,999,886	$	16	$	485,063	$	17,273	$	(55,274)	$	447,078	$	51,889	$	498,967
Stock-based compensation benefit(1)	988,013	—		(892)		—		—		(892)		—		(892)
Cash distributions to noncontrolling interests	—	—		—		—		—		—		(1,473)		(1,473)
Cash contributions from noncontrolling interests	—	—		—		—		—		—		4,103		4,103
Conversion of Alignment Shares to Class A Common Stock and exercised warrants	1,991	—		10		—		—		10		—		10
Noncontrolling interests assumed through acquisitions	—	—		—		—		—		—		2,100		2,100
Accrued distributions to noncontrolling interests	—	—		—		—		—		—		(77)		(77)
Other comprehensive loss	—	—		—		(828)		—		(828)		—		(828)
Net income (loss)	—	—		—		—		45,154		45,154		(6,708)		38,446
As of June 30, 2024	159,989,890	$	16	$	484,181	$	16,445	$	(10,120)	$	490,522	$	49,834	$	540,356

(1) Stock-based compensation benefit is recognized in connection with the CEO transition. Refer to Note 14, "Stock-Based Compensation" for further details.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Altus Power, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(In thousands)


	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities
Net income	$	37,204	$	7,215
Adjustments to reconcile net income to net cash from operating activities:
Depreciation, amortization and accretion	33,296		24,335
Non-cash lease transactions	(2,289)		499
Deferred tax expense	(16,143)		2,011
Amortization of debt discount and financing costs	2,458		1,683
Change in fair value of Alignment Shares liability	(37,958)		(19,823)
Remeasurement of contingent consideration, net	(1,479)		100
Gain on disposal of property, plant and equipment	(88)		—
Reclassification of realized gain on cash flow hedge to net income	(837)		—
Stock-based compensation (benefit) expense	(116)		7,069
Other	(1,457)		1,350
Changes in assets and liabilities, excluding the effect of acquisitions
Accounts receivable	(13,163)		(9,597)
Due to related parties	16		41
Derivative assets	(2,435)		2,676
Other assets	(2,683)		1,607
Accounts payable	358		2,924
Interest payable	6,448		3,037
Contract liability	268		243
Other liabilities	(2,478)		121
Net cash (used for) provided by operating activities	(1,078)		25,491
Cash flows used for investing activities
Capital expenditures	(40,497)		(61,982)
Payments to acquire renewable energy businesses, net of cash and restricted cash acquired	(119,444)		(288,903)
Payments to acquire renewable energy facilities from third parties, net of cash and restricted cash acquired	(6,533)		(22,433)
Proceeds from disposal of property, plant and equipment	266		—
Net cash used for investing activities	(166,208)		(373,318)
Cash flows used for financing activities
Proceeds from issuance of long-term debt	131,895		269,850
Repayment of long-term debt	(81,677)		(31,068)
Payment of debt issuance costs	(1,231)		(2,548)
Payment of deferred purchase price payable	(3,860)		(4,531)
Payment of contingent consideration	(5,793)		—
Contributions from noncontrolling interests	4,103		6,274
Redemption of redeemable noncontrolling interests	—		(3,224)
Distributions to noncontrolling interests	(2,800)		(2,189)
Net cash provided by financing activities	40,637		232,564
Net decrease in cash, cash equivalents, and restricted cash	(126,649)		(115,263)
Cash, cash equivalents, and restricted cash, beginning of period	218,927		199,398
Cash, cash equivalents, and restricted cash, end of period	$	92,278	$	84,135

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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	Six Months Ended June 30,
	2024		2023
Supplemental cash flow disclosure
Cash paid for interest	$	28,387	$	15,299
Cash paid for taxes	26		—
Non-cash investing and financing activities
Asset retirement obligations	$	1,391	$	3,943
Debt assumed through acquisitions	—		7,883
Noncontrolling interest assumed through acquisitions	2,100		13,500
Redeemable noncontrolling interest assumed through acquisitions	—		8,100
Accrued distributions to noncontrolling interests	661		—
Acquisitions of property and equipment included in construction payable	—		6,125
Conversion of Alignment Shares into common stock	10		11
Deferred purchase price payable	—		7,606

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Altus Power, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(Dollar amounts in thousands, except per share data, unless otherwise noted)

1.General

Company Overview

Altus Power, Inc., a Delaware corporation (the “Company” or “Altus Power”), headquartered in Stamford, Connecticut, develops, owns, constructs and operates large-scale roof, ground and carport-based photovoltaic solar energy generation and storage systems, for the purpose of producing and selling electricity to credit worthy counterparties, including commercial and industrial, public sector and community solar customers, under long-term contracts. The solar energy facilities are owned by the Company in project-specific limited liability companies (the “Solar Facility Subsidiaries”).

On December 9, 2021 (the “Closing Date”), the Company merged (the “Merger”) with CBRE Acquisition Holdings, Inc. (“CBAH”) and became listed on the New York Stock Exchange under the stock symbol "AMPS."

2.Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The Company prepares its unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and regulations of the U.S. Securities and Exchange Commission ("SEC") for interim financial reporting. The Company’s condensed consolidated financial statements include the results of wholly-owned and partially-owned subsidiaries in which the Company has a controlling interest. All intercompany balances and transactions have been eliminated in consolidation.

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023, filed with the Company’s 2023 annual report on Form 10-K on March 14, 2024, and the related notes which provide a more complete discussion of the Company’s accounting policies and certain other information. The information as of December 31, 2023, included in the condensed consolidated balance sheets was derived from the Company’s audited consolidated financial statements. The condensed consolidated financial statements were prepared on the same basis as the audited consolidated financial statements and reflect all adjustments, including normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the Company’s financial position as of June 30, 2024, and the results of operations and cash flows for the three and six months ended June 30, 2024, and 2023. The results of operations for the three and six months ended June 30, 2024, are not necessarily indicative of the results that may be expected for the full year or any other future interim or annual period.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

In recording transactions and balances resulting from business operations, the Company uses estimates based on the best information available. Estimates are used for such items as the fair value of net assets acquired in connection with accounting for business combinations, the useful lives of the solar energy facilities, and inputs and assumptions used in the valuation of asset retirement obligations (“AROs”), contingent consideration, derivative instruments, and Class B common stock, par value $0.0001 per share (“Alignment Shares”).

Segment Information

Operating segments are defined as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the chief executive officer. Based on the financial information presented to and reviewed by the chief operating decision maker in deciding how to allocate the resources and in assessing the performance of the Company, the Company has determined it operates as a single operating segment and has one reportable segment, which includes revenue under power purchase agreements (“PPAs”), revenue from net metering credit

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Altus Power, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(Dollar amounts in thousands, except per share data, unless otherwise noted)

agreements, solar renewable energy credit revenue, rental income, performance based incentives and other revenue. The Company’s principal operations, revenue and decision-making functions are located in the United States.

Cash, Cash Equivalents, and Restricted Cash

Cash and cash equivalents includes all cash balances on deposit with financial institutions and readily marketable securities with original maturity dates of three months or less at the time of acquisition and are denominated in U.S. dollars. Pursuant to the budgeting process, the Company maintains certain cash and cash equivalents on hand for possible equipment replacement related costs.

The Company records cash that is restricted as to withdrawal or use under the terms of certain contractual agreements as restricted cash. Restricted cash is included in current portion of restricted cash and restricted cash, noncurrent portion on the condensed consolidated balance sheets and includes cash held with financial institutions for cash collateralized letters of credit pursuant to various financing and construction agreements.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets. Cash, cash equivalents, and restricted cash consist of the following:


	As of June 30, 2024		As of December 31, 2023
Cash and cash equivalents	$	78,379	$	160,817
Current portion of restricted cash	1,166		45,358
Restricted cash, noncurrent portion	12,733		12,752
Total	$	92,278	$	218,927

Concentration of Credit Risk

The Company maintains its cash in bank deposit accounts which, at times, may exceed Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash balances.

The Company had no customers that individually accounted for over 10% of total accounts receivable, net as of June 30, 2024, and no customers that individually accounted for over 10% of total operating revenues, net for the three and six months ended June 30, 2024.

The Company had no customers that individually accounted for over 10% of total accounts receivable, net as of December 31, 2023. The Company had one customer that individually accounted for over 10% (i.e., 14.4%) of total operating revenues, net for the three months ended June 30, 2023, and one customer that individually accounted for over 10% (i.e., 14.7%), of total operating revenues, net for the six months ended June 30, 2023.

Accounting Pronouncements

As a public company, the Company is provided the option to adopt new or revised accounting guidance as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) either (1) within the same periods as those otherwise applicable to public business entities, or (2) within the same time periods as non-public business entities, including early adoption when permissible. The Company expects to elect to adopt new or revised accounting guidance within the same time period as non-public business entities, as indicated below.

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this update require disclosure of incremental segment information and the title and position of the chief operating decision maker ("CODM"). Registrants will be required to disclose significant segment expenses that are regularly provided to the CODM, as well as additional information on segment profit and loss measures and how such information is used by the CODM to assess segment performance and allocate resources. This ASU is effective for annual periods beginning in January 2024 and interim periods beginning in January 2025. The Company is currently evaluating the

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Altus Power, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(Dollar amounts in thousands, except per share data, unless otherwise noted)

impact of this ASU, but does not currently expect it to have a material impact on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update require enhanced income tax disclosures, particularly related to a reporting entity's effective tax rate reconciliation and income taxes paid. For the rate reconciliation table, the update requires additional categories of information about federal, state, and foreign taxes and details about significant reconciling items, subject to a quantitative threshold. Income taxes paid must be similarly disaggregated by federal, state, and foreign based on a quantitative threshold. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The guidance shall be applied on a prospective basis with the option to apply retrospectively. The Company will apply the guidance upon the effective date. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures.

3.Revenue and Accounts Receivable

Disaggregation of Total Operating Revenues, net

The following table presents the detail of total operating revenues, net as recorded in the unaudited condensed consolidated statements of operations:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Power sales under PPAs	$	20,722	$	16,641	$	33,347	$	25,627
Power sales under NMCAs	15,493		13,297		25,470		20,133
Power sales on wholesale markets	541		568		836		924
Total revenue from power sales	36,756		30,506		59,653		46,684
Solar renewable energy credit revenue	10,113		13,526		20,049		23,593
Rental income	3,110		986		5,215		1,612
Performance based incentives	1,968		464		6,775		2,562
Revenue recognized on contract liabilities	513		1,031		1,427		1,440
Total operating revenues, net	$	52,460	$	46,513	$	93,119	$	75,891

Transaction price allocated to the remaining performance obligation

In accordance with optional exemptions available under Topic 606, the Company does not disclose the value of unsatisfied performance obligations for (1) contracts with an original expected length of one year or less, (2) with the exception of fixed consideration, contracts for which revenue is recognized at the amount to which the Company have the right to invoice for goods provided and services performed, and (3) contracts for which variable consideration relates entirely to an unsatisfied performance obligation.

Contracts with fixed consideration consist primarily of performance obligations to supply fixed quantities of solar renewable energy credits ("SRECs"). Contracts with variable volumes and/or variable pricing, including those with pricing provisions tied to a consumer price or other index, have also been excluded as the related consideration under the contract is variable at inception of the contract. Most of the Company's solar renewable energy credit revenue is related to contracts with variable consideration.

The Company expects to recognize revenue for the following amounts related to fixed consideration associated with remaining performance obligations in each of the future periods noted:

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Altus Power, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(Dollar amounts in thousands, except per share data, unless otherwise noted)


2024	$	8,452
2025	18,496
2026	15,220
2027	9,327
2028	1,029
Thereafter	23
Total	$	52,547

Accounts receivable

The following table presents the detail of receivables as recorded in accounts receivable in the unaudited condensed consolidated balance sheets:


	As of June 30, 2024		As of December 31, 2023
Power sales under PPAs	$	10,519	$	3,582
Power sales under NMCAs	14,229		8,094
Power sales on wholesale markets	214		249
Total power sales	24,962		11,925
Solar renewable energy credits	5,814		3,379
Rental income	89		450
Performance based incentives	957		1,346
Total	$	31,822	$	17,100

Payments for all accounts receivable in the above table are typically received within 30 days from invoicing. As of both June 30, 2024, and December 31, 2023, the Company determined that the allowance for credit losses was $0.9 million.

Contract liabilities

The Company recognizes contract liabilities related to long-term agreements to sell SRECs that are prepaid by customers before SRECs are delivered. The Company will recognize revenue associated with the contract liabilities as SRECs are delivered to customers through 2037. As of June 30, 2024, the Company had current and non-current contract liabilities of $2.5 million and $6.1 million, respectively. As of December 31, 2023, the Company had current and non-current contract liabilities of $2.9 million and $5.6 million, respectively. The Company does not have any other significant contract asset or liability balances related to revenues.

Rental income

Rental income is primarily derived from the master lease agreement with Vitol (as described in Note 5, "Acquisitions"), as well as long-term PPAs accounted for as operating leases under ASC 842. The Company's leases include various renewal options which are included in the lease term when the Company has determined it is reasonably certain of exercising the options based on consideration of all relevant factors that create an economic incentive for the Company as lessor. Certain leases include variable lease payments associated with production of solar facilities, which are recognized as rental income in period the energy is delivered. Maturities of fixed rental payments as of June 30, 2024, are as follows:

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Altus Power, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(Dollar amounts in thousands, except per share data, unless otherwise noted)


2024	$	3,985
2025	6,118
2026	2,892
2027	513
2028	514
Thereafter	5,255
Total	19,277

Banked Net Metering Credits

Operating revenues do not include net metering credits that were awarded to the Company by utilities but not yet sold to customers and were banked by the Company. Revenues from sales of banked net metering credits are recognized once they are allocated and used by customers.

4.Variable Interest Entities

The Company consolidates all variable interest entities (“VIEs”) in which it holds a variable interest and is deemed to be the primary beneficiary of the variable interest entity. Generally, a VIE is an entity with at least one of the following conditions: (a) the total equity investment at risk is insufficient to allow the entity to finance its activities without additional subordinated financial support, or (b) the holders of the equity investment at risk, as a group, lack the characteristics of having a controlling financial interest. The primary beneficiary of a VIE is required to consolidate the VIE and to disclose certain information about its significant variable interests in the VIE. The primary beneficiary of a VIE is the entity that has both 1) the power to direct the activities that most significantly impact the entity’s economic performance and 2) the obligations to absorb losses or receive benefits that could potentially be significant to the VIE.

The Company participates in certain partnership arrangements that qualify as VIEs. Consolidated VIEs consist primarily of tax equity financing arrangements and partnerships in which an investor holds a noncontrolling interest and does not have substantive kick-out or participating rights. The Company, through its subsidiaries, is the primary beneficiary of such VIEs, because as the manager, it has the power to direct the day-to-day operating activities of the entity. In addition, the Company is exposed to economics that could potentially be significant to the entity given its ownership interest, therefore, has consolidated the VIEs as of June 30, 2024, and December 31, 2023. No VIEs were deconsolidated during the six months ended June 30, 2024 and 2023.

The obligations of the consolidated VIEs discussed in the following paragraphs are nonrecourse to the Company. In certain instances where the Company establishes a new tax equity structure, the Company is required to provide liquidity in accordance with the contractual agreements. The Company has no requirement to provide liquidity to purchase assets or guarantee performance of the VIEs unless further noted in the following paragraphs. The Company made certain contributions during the six months ended June 30, 2024 and 2023, as determined in the respective operating agreement.

The carrying amounts and classification of the consolidated VIE assets and liabilities included in condensed consolidated balance sheets are as follows:


	As of June 30, 2024		As of December 31, 2023
Current assets	$	29,833	$	22,298
Non-current assets	975,577		936,358
Total assets	$	1,005,410	$	958,656
Current liabilities	$	9,650	$	8,576
Non-current liabilities	157,172		141,360
Total liabilities	$	166,822	$	149,936

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Altus Power, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(Dollar amounts in thousands, except per share data, unless otherwise noted)

The amounts shown in the table above exclude intercompany balances which are eliminated upon consolidation. All of the assets in the table above are restricted for settlement of the VIE obligations, and all of the liabilities in the table above can only be settled using VIE resources.

The Company has not identified any VIEs during the six months ended June 30, 2024 and 2023, for which the Company determined that it is not the primary beneficiary and thus did not consolidate.

The Company considered qualitative and quantitative factors in determining which VIEs are deemed significant. As of June 30, 2024 and December 31, 2023, the Company consolidated thirty-six and twenty-six VIEs, respectively. No VIEs were deemed significant as of June 30, 2024 and December 31, 2023.

5.Acquisitions

2024 Acquisitions

Vitol Acquisition

On January 31, 2024, the Company, through its wholly-owned subsidiary, Altus Power, LLC, acquired an 84 MW portfolio of 20 operating solar energy facilities located across five US states (the “Vitol Acquisition”). The portfolio was acquired from Vitol Solar I LLC (“Vitol”) through an acquisition of 100% of the outstanding membership interests in 18 project companies and 100% of the outstanding Class B membership interest in a partnership which owns 2 project companies. The total purchase price was approximately $119.5 million and the transaction was entered into by the Company to grow its portfolio of solar energy facilities. The purchase price and associated transaction costs were funded by cash on hand. The purchase price is also subject to customary adjustments for working capital and other items.

In conjunction with the acquisition, the Company entered into a master lease agreement to lease certain solar facilities back to Vitol, as well as an asset management agreement under which the Company will manage the solar facilities during the term of the master lease agreement. The master lease agreement is accounted for as an operating lease under ASC 842 and lease payments are included in rental income within the condensed consolidated statement of operations. The lease term varies by solar facility, with individual lease terms ending between 2024 and 2026.

The Company accounted for the Vitol Acquisition under the acquisition method of accounting for business combinations. Under the acquisition method, the purchase price was allocated to the assets acquired and liabilities assumed on January 31, 2024 based on their estimated fair value. All fair value measurements of assets acquired and liabilities assumed, including the noncontrolling interests, were based on significant estimates and assumptions, including Level 3 (unobservable) inputs, which require judgment. Estimates and assumptions include the estimates of future power generation, commodity prices, operating costs, and appropriate discount rates.

The assets acquired and liabilities assumed are recognized provisionally on the consolidated balance sheet at their estimated fair values as of the acquisition date. The initial accounting for the business combination is not complete as the Company is in the process of obtaining additional information for the valuation of acquired tangible and intangible assets as well as inputs utilized in the valuation of noncontrolling interests. The provisional amounts are subject to change to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date. Under U.S. GAAP, the measurement period shall not exceed one year from the acquisition date and the Company will finalize these amounts no later than January 31, 2025.

The following table presents the preliminary allocation of the purchase price to the assets acquired and liabilities assumed, based on their estimated fair values on January 31, 2024:

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(Dollar amounts in thousands, except per share data, unless otherwise noted)


	Provisional accounting as of January 31, 2024		Measurement period adjustments		Adjusted provisional accounting as of January 31, 2024
Assets
Accounts receivable	$	1,649	$	(72)	$	1,577
Property, plant and equipment	123,363		(789)		122,574
Operating lease asset	7,835		(1,799)		6,036
Other assets	1,691		(126)		1,565
Total assets acquired	134,538		(2,786)		131,752

Liabilities
Accounts payable	249		64		313
Intangible liabilities	2,370		(800)		1,570
Asset retirement obligation	1,374		—		1,374
Operating lease liability	7,187		(1,799)		5,388
Contract liability	1,130		—		1,130
Other liabilities	393		(30)		363
Total liabilities assumed	12,703		(2,565)		10,138
Non-controlling interests	2,100		—		2,100
Total fair value of consideration transferred	$	119,735	$	(221)	$	119,514

The fair value of consideration transferred, net of cash acquired, as of January 31, 2024, is determined as follows:


Cash consideration paid to Vitol on closing	$	119,690	$	—	$	119,690
Post-closing purchase price true-up	45		(221)		(176)
Total fair value of consideration transferred	119,735		(221)		119,514

The Company incurred approximately $0.9 million of acquisition related costs related to the Vitol Acquisition, which are recorded as part of Acquisition and entity formation costs in the condensed consolidated statement of operations for the six months ended June 30, 2024. Acquisition related costs include legal, consulting, and other transaction-related costs.

The impact of the Vitol Acquisition on the Company's revenue and net income in the condensed consolidated statement of operations was an increase of $5.2 million and $3.1 million, respectively, for the six months ended June 30, 2024.

Intangibles at Acquisition Date

The Company attributed the intangible liability values to unfavorable rate revenue contracts to sell power and SRECs. The following table summarizes the estimated fair values and the weighted average amortization periods of the assumed intangible liabilities as of the acquisition date:


	Fair Value (thousands)	Weighted Average Amortization Period
Unfavorable rate revenue contracts – PPA	(100)	11 years
Unfavorable rate revenue contracts – SREC	(1,470)	10 years

Unaudited Pro Forma Combined Results of Operations

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(Dollar amounts in thousands, except per share data, unless otherwise noted)

The following unaudited pro forma combined results of operations give effect to the Vitol Acquisition as if it had occurred on January 1, 2023. The unaudited pro forma combined results of operations are provided for informational purposes only and do not purport to represent the Company’s actual consolidated results of operations had the Vitol Acquisition occurred on the date assumed, nor are these financial statements necessarily indicative of the Company’s future consolidated results of operations. The unaudited pro forma combined results of operations do not reflect the costs of any integration activities or any benefits that may result from operating efficiencies or revenue synergies.


	For the three months ended June 30, 2024 (unaudited)		For the three months ended June, 2023 (unaudited)		For the six months ended June 30, 2024 (unaudited)		For the six months ended June, 2023 (unaudited)
Operating revenues, net	$	52,460	$	49,381	$	93,981	$	81,345
Net income	33,329		5,039		38,548		9,375

Asset Acquisitions

During the six months ended June 30, 2024, the Company acquired solar energy facilities located in Massachusetts and New Jersey with a total nameplate capacity of 9.8 MW from third parties for a total purchase price of $9.8 million. The acquisitions were accounted for as acquisitions of assets, whereby the Company acquired $9.8 million of property, plant and equipment and $0.6 million of operating lease assets, and assumed $0.6 million of operating lease liabilities.

On April 10, 2024, the Company entered into a Purchase and Sale Agreement to acquire four in-development solar facilities at their respective mechanical completion dates for an estimated gross purchase price of approximately $113 million, subject to customary adjustments.

2023 Acquisitions

Caldera Acquisition

On December 20, 2023, Altus Power, LLC, a wholly-owned subsidiary of the Company, acquired a 121 MW portfolio of 35 operating solar energy facilities located across six US states (the “Caldera Acquisition”). The portfolio was acquired from Project Hyperion Holdco LP (the “Seller”) for total consideration of $121.7 million. The purchase price and associated transaction costs were funded by the proceeds from an amendment of the APAF III Term Loan (as defined in Note 8, "Debt") and cash on hand. The Caldera Acquisition was made pursuant to the purchase and sale agreement (the "PSA") dated October 27, 2023, and entered into by the Company to grow its portfolio of solar energy facilities. Pursuant to the PSA, the Company acquired 100% ownership interest in Project Hyperion, LLC, a holding entity that owns the acquired solar energy facilities.

The Company accounted for the Caldera Acquisition under the acquisition method of accounting for business combinations. Under the acquisition method, the purchase price was allocated to the assets acquired and liabilities assumed on December 20, 2023, based on their estimated fair value. All fair value measurements of assets acquired and liabilities assumed, including the noncontrolling interests, were based on significant estimates and assumptions, including Level 3 (unobservable) inputs, which require judgment. Estimates and assumptions include the estimates of future power generation, commodity prices, operating costs, and appropriate discount rates.

The following table presents the preliminary allocation of the purchase price to the assets acquired and liabilities assumed, based on their estimated fair values on December 20, 2023:

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Altus Power, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(Dollar amounts in thousands, except per share data, unless otherwise noted)


	Provisional accounting as of December 20, 2023		Measurement period adjustments		Adjusted provisional accounting as of December 20, 2023
Assets
Accounts receivable	$	876	$	—	$	876
Property, plant and equipment	131,728		(496)		131,232
Intangible assets	350		—		350
Operating lease asset	15,557		—		15,557
Other assets	2,079		(95)		1,984
Total assets acquired	150,590		(591)		149,999

Liabilities
Intangible liabilities	5,200		—		5,200
Asset retirement obligation	1,920		—		1,920
Operating lease liability	17,567		—		17,567
Other liabilities	1,275		(517)		758
Total liabilities assumed	25,962		(517)		25,445
Non-controlling interests	2,900		—		2,900
Total fair value of consideration transferred, net of cash acquired	$	121,728	$	(74)	$	121,654

The fair value of consideration transferred, net of cash acquired, as of December 20, 2023, is determined as follows:


Cash consideration paid to seller on closing	$	80,942	$	—	$	80,942
Cash consideration paid to settle debt on behalf of seller	38,966		—		38,966
Purchase price payable(1)	4,189		—		4,189
Contingent consideration payable	2,600		—		2,600
Total fair value of consideration transferred	126,697		—		126,697
Cash and restricted cash acquired	4,969		74		5,043
Total fair value of consideration transferred, net of cash acquired	$	121,728	$	(74)	$	121,654

(1) The Company paid the entire purchase price payable amount after the acquisition date but prior to December 31, 2023.

The contingent consideration is related to the estimated earnout cash payment of a maximum of $8.0 million dependent on actual power generation of the acquired solar generating facilities during the 12-month period following the acquisition date. Refer to the Contingent Consideration section of Note 7, "Fair Value Measurements" for further information.

The Company incurred approximately $0.9 million of acquisition related costs related to the Caldera Acquisition, which are recorded as part of Acquisition and entity formation costs in the consolidated statement of operations for the year ended December 31, 2023. Acquisition related costs include legal, consulting, and other transaction-related costs.

Intangibles at Acquisition Date

The Company attributed the intangible asset and liability values to favorable and unfavorable rate revenue contracts to sell SRECs. The following table summarizes the estimated fair values and the weighted average amortization periods of the acquired intangible assets and assumed intangible liabilities as of the acquisition date:

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(Dollar amounts in thousands, except per share data, unless otherwise noted)


	Fair Value (thousands)	Weighted Average Amortization Period
Favorable rate revenue contracts – SREC	350	4 years
Unfavorable rate revenue contracts – SREC	(5,200)	3 years

6. Debt


	As of June 30, 2024		As of December 31, 2023		Interest Type	Weighted average interest rate
Long-term debt
APAF Term Loan	$	468,324	$	474,609	Fixed	3.51	%
APAF II Term Loan	108,697		112,810		Floating*	SOFR + 1.475%
APAF III Term Loan	420,620		426,619		Fixed	6.03	%
APAF IV Term Loan	101,000		—		Fixed	6.45	%
APAGH Term Loan	100,000		100,000		Fixed	8.50	%
APAG Revolver	—		65,000		Floating	SOFR + 1.60%
APACF II Facility	31,868		—		Floating	SOFR + 3.25%
Other term loans	11,000		11,000		Fixed	3.04	%
Financing obligations recognized in failed sale leaseback transactions	42,520		42,767		Imputed	3.97	%
Total principal due for long-term debt	1,284,029		1,232,805
Unamortized discounts	(12,859)		(13,722)
Unamortized deferred financing costs	(17,432)		(16,165)
Less: Current portion of long-term debt	73,570		39,611
Long-term debt, less current portion	$	1,180,168	$	1,163,307

* Interest rate is effectively fixed by interest rate swap, see discussion below.

APAF Term Loan

On August 25, 2021, APA Finance, LLC (“APAF”), a wholly owned subsidiary of the Company, entered into a $503.0 million term loan facility with Blackstone Insurance Solutions ("BIS") through a consortium of lenders, which consists of investment grade-rated Class A and Class B notes (the “APAF Term Loan”). The APAF Term Loan has a weighted average 3.51% annual fixed rate and matures on February 29, 2056 (“Final Maturity Date”).

The APAF Term Loan amortizes at an initial rate of 2.5% of outstanding principal per annum for a period of 8 years at which point the amortization steps up to 4% per annum until September 30, 2031 (“Anticipated Repayment Date”). After the Anticipated Repayment Date, the loan becomes fully-amortizing, and all available cash is used to pay down principal until the Final Maturity Date. The APAF Term Loan is secured by membership interests in the Company's subsidiaries.

As of June 30, 2024, the outstanding principal balance of the APAF Term Loan was $468.3 million less unamortized debt discount and loan issuance costs totaling $6.3 million. As of December 31, 2023, the outstanding principal balance of the APAF Term Loan was $474.6 million less unamortized debt discount and loan issuance costs totaling $6.7 million.

As of June 30, 2024, and December 31, 2023, the Company was in compliance with all covenants under the APAF Term Loan.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(Dollar amounts in thousands, except per share data, unless otherwise noted)

APAF II Term Loan

On December 23, 2022, APA Finance II, LLC (“APAF II”), a wholly owned subsidiary of the Company, entered into a $125.7 million term loan facility (the “APAF II Term Loan”) with KeyBank National Association ("KeyBank") and The Huntington Bank ("Huntington") as lenders. The proceeds of the APAF II Term Loan were used to repay the outstanding amounts under certain project-level loans. The APAF II Term Loan matures on December 23, 2027, and has a variable interest rate based on Secured Overnight Financing Rate (“SOFR”) plus a spread of 1.475%. Simultaneously with entering into the APAF II Term Loan, the Company entered into interest rate swaps for 100% of the amount of debt outstanding, which effectively fixed the interest rate at 4.885% (see Note 7, "Fair Value Measurements," for further details). The APAF II Term Loan is secured by membership interests in the Company's subsidiaries.

As of June 30, 2024, the outstanding principal balance of the APAF II Term Loan was $108.7 million, less unamortized debt issuance costs of $1.9 million. As of December 31, 2023, the outstanding principal balance of the APAF II Term Loan was $112.8 million, less unamortized debt issuance costs of $2.2 million. As of June 30, 2024, and December 31, 2023, the Company was in compliance with all covenants under the APAF II Term Loan.

APAF III Term Loan

On February 15, 2023, the Company, through its subsidiaries, APA Finance III Borrower, LLC (the “APAF III Borrower”) and APA Finance III Borrower Holdings, LLC (“Holdings”), entered into a new long-term funding facility under the terms of a credit agreement among the Borrower, Holdings, Blackstone Asset Based Finance Advisors LP, which is an affiliate of the Company, U.S. Bank Trust Company, N.A., as administrative agent, U.S. Bank N.A., as document custodian, and the lenders party thereto (the “APAF III Term Loan”).

This funding facility provides for a term loan of $204.0 million at a fixed rate of 5.62%. The APAF III Term Loan amortizes at a rate of 2.5% of initial outstanding principal until the anticipated repayment date of June 30, 2033. The maturity date of the term loan is October 31, 2047. Upon lender approval, the Borrower has the right to increase the funding facility to make additional draws for certain solar generating facilities, as set forth in the credit agreement. On February 15, 2023, the Company borrowed $193.0 million from this facility to fund the True Green II Acquisition and the associated costs and expenses. The principal balance borrowed under the APAF III Term Loan was offset by $4.0 million of debt issuance costs and $6.3 million of issuance discount, which have been deferred and will be recognized as interest expense through June 30, 2033. The APAF III Term Loan is secured by membership interests in the Company's subsidiaries.

On June 15, 2023 and July 21, 2023, the Company amended the APAF III Term Loan to add $47.0 million and $28.0 million of additional borrowings, respectively, the proceeds of which were used to repay outstanding term loans under the Construction to Term Loan Facility (as defined below), and to provide long-term financing for new solar projects. The principal balance borrowed under the amendments was offset by $0.3 million and $0.2 million of issuance costs, respectively, and $1.5 million and $1.1 million of issuance discount, respectively, which have been deferred and will be recognized as interest expense through June 30, 2033.

On December 20, 2023, the Company amended the APAF III Term Loan to add $163.0 million of additional borrowings, the proceeds of which were used to fund the Caldera Acquisition. The amendment increased the weighted average fixed interest rate for all borrowings under the APAF III Term Loan to 6.03% and increased the rate of amortization for the new borrowings under the amendment to 3.25% per annum until June 30, 2033. The principal balance borrowed under the amendment was offset by $1.3 million of issuance costs and $0.8 million of issuance discount, which have been deferred and will be recognized as interest expense through June 30, 2033.

As of June 30, 2024, the outstanding principal balance of the APAF III Term Loan was $420.6 million, less unamortized debt issuance costs and discount of $13.6 million. As of December 31, 2023, the outstanding principal balance of the APAF III Term Loan was $426.6 million, less unamortized debt issuance costs and discount of $14.3 million. As of June 30, 2024 and December 31, 2023, the Company was in compliance with all covenants under the APAF III Term Loan.

APAF IV Term Loan

On March 26, 2024, the Company, through its subsidiaries, APA Finance IV, LLC (the “APAF IV Borrower”), and APA Finance IV Holdings, LLC (“Holdings”) has entered into a new term loan facility under the terms of a credit agreement among the APAF IV Borrower, Holdings, Blackstone Asset Based Finance Advisors LP, which is an affiliate of the Company, U.S.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(Dollar amounts in thousands, except per share data, unless otherwise noted)

Bank Trust Company, N.A., as administrative agent, U.S. Bank N.A., as document custodian, and the lenders party thereto (the “APAF IV Term Loan”).

The APAF IV Term Loan, which matures on March 26, 2049, bears interest at a fixed rate of 6.45% per annum on outstanding principal amounts under the term loan. The Term Loan Facility has an anticipated repayment date of June 30, 2034. Upon lender approval, the APAF IV Borrower has the right to increase the Term Loan Facility to make additional draws for certain acquisitions of solar assets that otherwise satisfy the criteria for permitted acquisitions, as defined in the credit agreement. On March 26, 2024, the Company borrowed $101.0 million under the APAF IV Term Loan in connection with the Vitol Acquisition, which closed on January 31, 2024. The principal balance borrowed under the APAF IV Term Loan was offset by $1.6 million of debt issuance costs, which have been deferred and will be recognized as interest expense through June 30, 2034. The APAF IV Term Loan is secured by membership interests in the Company's subsidiaries.

As of June 30, 2024, the outstanding principal balance of the APAF IV Term Loan was $101.0 million, less unamortized debt issuance costs and discount of $1.5 million. As of June 30, 2024, the Company was in compliance with all covenants under the APAF IV Term Loan.

APAGH Term Loan

On December 27, 2023, APA Generation Holdings, LLC (“APAGH” or the “APAGH Borrower”), a wholly owned subsidiary of the Company, entered into a credit agreement (the “APAGH Term Loan”) with an affiliate of Goldman Sachs Asset Management and CPPIB Credit Investments III Inc., a subsidiary of Canada Pension Plan Investment Board, as “Lenders.” The total commitment under the credit agreement is $100.0 million. The Company can also allow for the funding of additional incremental loans in an amount not to exceed $100.0 million over the term of the credit agreement at the discretion of the Lenders. Subject to certain exceptions, the APAGH Borrower’s obligations to the Lenders are secured by the assets of the APAGH Borrower, its parent, Altus Power, LLC (“Holdings”) and the Company and are further guaranteed by Holdings and the Company.

Interest accrues on any outstanding balance at an initial fixed rate equal to 8.50%, subject to adjustments. The maturity date of the term loan is December 27, 2029.

On December 27, 2023, the Company borrowed $100.0 million under the APAGH Term Loan to fund future growth needs, which was partially offset by $3.0 million of issuance discount. The Company incurred $1.0 million of debt issuance costs related to the APAGH Term Loan, which have been deferred and will be recognized as interest expense through December 27, 2029.

As of June 30, 2024, the outstanding principal balance of the APAGH Term Loan was $100.0 million, less unamortized debt issuance costs of $3.6 million. As of December 31, 2023, the outstanding principal balance of the APAGH Term Loan was $100.0 million, less unamortized debt issuance costs and discount of $4.0 million. As of June 30, 2024 and December 31, 2023, the Company was in compliance with all covenants.

APAG Revolver

On December 19, 2022, APA Generation, LLC (“APAG”), a wholly owned subsidiary of the Company, entered into revolving credit facility with Citibank, N.A. with a total committed capacity of $200.0 million (the "APAG Revolver"). Outstanding amounts under the APAG Revolver have a variable interest rate based on a base rate and an applicable margin. The APAG Revolver is secured by membership interests in the Company's subsidiaries. The APAG Revolver matures on December 19, 2027. As of June 30, 2024, and December 31, 2023, outstanding under the APAG Revolver were zero and $65.0 million, respectively. As of June 30, 2024, and December 31, 2023, the Company was in compliance with all covenants under the APAG Revolver.

APACF II Facility

On November 10, 2023, APACF II, LLC (“APACF II” or the “APACF II Borrower”) a wholly-owned subsidiary of the Company, entered into a credit agreement among the APACF II Borrower, APACF II Holdings, LLC, Pass Equipment Co., LLC, each of the project companies from time to time party thereto, each of the tax equity holdcos from time to time party

Table of Contents

Altus Power, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(Dollar amounts in thousands, except per share data, unless otherwise noted)

thereto, U.S. Bank Trust Company, National Association, U.S. Bank National Association, each lender from time to time party thereto (collectively, the “Lenders”) and Blackstone Asset Based Finance Advisors LP, as Blackstone representative (“APACF II Facility”).

The aggregate amount of the commitments under the credit agreement is $200.0 million. The APACF II Facility matures on November 10, 2027, and bears interest at an annual rate of SOFR plus 3.25%. Borrowings under the APACF II Facility, which mature 364 days after the borrowing occurs, may be used by the APACF II Borrower to fund construction costs including equipment, labor, interconnection, as well as other development costs. The Company incurred $0.3 million of debt issuance costs related to the APACF II Facility, which have b

Altus Power, Inc. [AMPS] Filings
10-Q	[2024-08-08]
10-Q	[2024-05-09]
10-K	[2024-03-14]
10-Q	[2023-11-13]
10-Q	[2023-08-14]
10-Q	[2023-05-15]
10-K	[2023-03-30]
10-Q	[2022-11-14]
10-Q	[2022-08-15]
10-Q	[2022-05-16]
10-K	[2022-03-24]
S-1	[2022-01-10]
10-Q	[2021-11-12]
10-Q	[2021-08-13]
10-Q	[2021-05-17]
10-K	[2021-03-31]
S-1	[2020-11-09]