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What changed in Ameresco, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Ameresco, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+268 added−253 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-29)

Top changes in Ameresco, Inc.'s 2024 10-K

268 paragraphs added · 253 removed · 200 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeAs a result, we experienced increased participation in both the utilization of our volunteer hours and activities. Diversity, Equity, Inclusion and Justice We welcome, support, and celebrate unique ways of thinking. We believe innovation demands diversity of thought, and Ameresco has done well by welcoming and celebrating employees from diverse backgrounds.
Biggest changeCulture and Engagement We welcome, support, and celebrate many ways of thinking. We believe innovation demands variety of thought, and Ameresco has done well by welcoming and celebrating employees from a wide range of backgrounds. We are proud to be an employer that believes in equal opportunity for everyone.
We collect and analyze the customer’s utility bill and other data related 5 Table of Contents to energy use. If the bills are complex or numerous, we often utilize our proprietary enterprise energy management software tools to scan, compile and analyze the information. Our experienced engineers visit and assess the customer’s current energy systems and infrastructure.
We collect and analyze the customer’s utility bill and other data related to energy use. If the bills are complex or numerous, we often utilize our proprietary enterprise energy management software tools 5 Table of Contents to scan, compile and analyze the information. Our experienced engineers visit and assess the customer’s current energy systems and infrastructure.
Federal, Canada, and Europe segments offer energy efficiency products and services which include the design, engineering, and installation of equipment and other measures to improve the efficiency and control the operation of a facility’s energy infrastructure, renewable energy solutions, and services and the development and construction of small-scale plants that we own or develop for customers that produce electricity, gas, heat, or cooling from renewable sources of energy and O&M services.
Federal, and Europe segments offer energy efficiency products and services which include the design, engineering, and installation of equipment and other measures to improve the efficiency and control the operation of a facility’s energy infrastructure, renewable energy solutions, and services and the development and construction of small-scale plants that we own or develop for customers that produce electricity, gas, heat, or cooling from renewable sources of energy and O&M services.
Human Capital Management We believe our employees are Ameresco’s greatest resource, as they come together to creatively integrate our advanced technology portfolio and develop innovative, transformative energy solutions for our customers. The diversity of our team coupled with our deep bench of technical expertise enables us to tackle the most complex energy opportunities.
Human Capital Management We believe our employees are Ameresco’s greatest resource, as they come together to creatively integrate our advanced technology portfolio and develop innovative, transformative energy solutions for our customers. The breath of our team coupled with our deep bench of technical expertise enables us to tackle the most complex energy opportunities.
To best serve our expansive customer base, as of December 31, 2023, we have approximately 60 offices located throughout North America, and Europe and more than 1,500 dedicated energy and business professionals with years of proven experience and a strong commitment to customer satisfaction.
To best serve our expansive customer base, as of December 31, 2024, we have approximately 60 offices located throughout North America and Europe and more than 1,500 dedicated energy and business professionals with years of proven experience and a strong commitment to customer satisfaction.
Our Alternative Fuels segment sells electricity and processed RNG derived from biomethane from small-scale plants that we own and operate and provides O&M services for customer owned small-scale RNG plants. The “All Other” category offers consulting services and the sale of solar PV energy products and systems which we refer to as integrated-PV.
Our Renewable Fuels segment sells electricity and processed RNG derived from biomethane from small-scale plants that we own and operate and provides O&M services for customer owned small-scale RNG plants. The “All Other” category offers software and consulting services and the sale of solar PV energy products and systems which we refer to as integrated-PV.
While employee healthcare costs and access to a wide variety of medical providers have always been at the top of our criteria list, we also continued to focus our 2023 benefit offerings on choice and specifically our mental health and well-being offerings.
While employee healthcare costs and access to a wide variety of medical providers have always been at the top of our criteria list, we also continued to focus our 2024 benefit offerings on choice and our mental health and well-being offerings.
Approximately 71.8% of our revenues were derived from federal, state, provincial, or local government entities, including public housing authorities, public universities, and municipal utilities. Our federal customers include various divisions of the U.S. federal government. The U.S. federal government is considered a single customer and segment for reporting purposes (see table above under “Our Business Segments”).
Approximately 67.3% of our revenues were derived from federal, state, provincial, or local government entities, including public housing authorities, public universities, and municipal utilities. Our federal customers include various divisions of the U.S. federal government. The U.S. federal government is considered a single customer and segment for reporting purposes (see table above under “Our Business Segments”).
For more information on our initiatives noted above, please see our 2023 Environmental, Social and Governance Report to be published in 2024 which will be available at www.ameresco.com. 8 Table of Contents Seasonality See “Our business is affected by seasonal trends and construction cycles, and these trends and cycles could have an adverse effect on our operating results” in Item 1A, Risk Factors and “Overview — Effects of Seasonality” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of seasonality in our business.
For more information on our initiatives noted above, please see our 2024 Impact Report to be published in 2025 which will be available at www.ameresco.com. 8 Table of Contents Seasonality See “Our business is affected by seasonal trends and construction cycles, and these trends and cycles could have an adverse effect on our operating results” in Item 1A, Risk Factors and “Overview — Effects of Seasonality” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of seasonality in our business.
Our direct sales force develops and follows up on customer leads. As of December 31, 2023, we had 168 employees in direct sales. In preparation for a proposal, our team typically conducts a preliminary audit of the customer’s needs and requirements and identifies areas to enhance efficiencies and reduce costs.
Our direct sales force develops and follows up on customer leads. As of December 31, 2024, we had 166 employees in direct sales. In preparation for a proposal, our team typically conducts a preliminary audit of the customer’s needs and requirements and identifies areas to enhance efficiencies and reduce costs.
Our Business Segments Our company is primarily organized by region, where each region may perform our key services under our various lines of business. Our reportable business segments largely follow our regional segmentation. For the year ended December 31, 2023, our reportable business segments were as follows: • U.S. Regions • U.S.
Our Business Segments Our company is primarily organized by region, where each region may perform our key services under our various lines of business. Our reportable business segments largely follow our regional segmentation. For the year ended December 31, 2024, our reportable business segments were as follows: • North America Regions • U.S.
We are also subject to local regulations in the international jurisdictions where we operate, including Canada, Italy, the United Kingdom, and Greece. Our projects must conform to all applicable electric reliability, building and safety, and environmental regulations and codes, which vary from place to place and time to time.
We are also subject to local regulations in the international jurisdictions where we operate, including Canada, the United Kingdom and elsewhere in Europe. Our projects must conform to all applicable electric reliability, building and safety, and environmental regulations and codes, which vary from place to place and time to time.
For the year ended December 31, 2023, our largest 20 customers accounted for approximately 56.4% of our total revenues. Other than the U.S. federal government, no customers represented 10% or more of our revenues during this period.
For the year ended December 31, 2024, our largest 20 customers accounted for approximately 56.8% of our total revenues. Other than the U.S. federal government, no customers represented 10% or more of our revenues during this period.
Federal 29.3 % 21.5 % 32.3 % Canada 5.1 % 3.2 % 4.1 % Alternative Fuels 8.5 % 6.3 % 9.1 % Europe 11.1 % 3.4 % 3.8 % All Other 5.5 % 4.0 % 5.4 % Total revenues 100.0 % 100.0 % 100.0 % (1) See Note 3 “Revenue from Contracts with Customers” for our disaggregated revenue and Note 20 “Business Segment Information” for additional information.
Federal 21.0 % 29.3 % 21.5 % Renewable Fuels 9.8 % 8.5 % 6.3 % Europe 14.2 % 10.9 % 3.2 % All Other 5.3 % 6.5 % 4.7 % Total revenues 100.0 % 100.0 % 100.0 % (1) See Note 3 “Revenue from Contracts with Customers” for our disaggregated revenue and Note 20 “Business Segment Information” for additional information.
We wanted to ensure our employees have a variety of help and resources available, offered in platforms and services they felt comfortable using, should they need it. In addition, we offered a comprehensive Employee Assistance Plan to all Ameresco employees and their family members should they need assistance with any life planning matters.
We want to ensure our employees have a variety of help and resources available, offered through platforms and services they feel comfortable using, should they need it. In addition, we offer a comprehensive Employee Assistance Plan to all Ameresco global employees and their family members should they need assistance with life planning matters.
From energy conservation through a variety of measures to the generation of green, renewable power, our customers and their communities reap the benefits of reducing energy consumption, costs, and associated carbon emissions. In 2023, we served customers throughout the United States, Canada, and Europe.
From energy conservation through a variety of measures to the generation of green, renewable power, our customers and their communities reap the benefits of reducing energy consumption, costs, and associated carbon emissions. In 2024, we served customers throughout North America and Europe.
To facilitate our employees’ career development with a focus on retention, we have improved on the frequency of career path discussions, training, and succession planning. During 2023 we have improved upon our performance management process and rolled out a formal mentorship program pairing employees with mentors within our leadership team focusing on established goals and guidance with various skills.
To facilitate our employees’ career development with a focus on retention, we have increased the frequency of career path discussions, training, and succession planning. During 2024, we also improved our performance management process and continued our mentorship program pairing employees with mentors within our leadership team focusing on established goals and guidance with various skills.
We focus on team-based employee philanthropy, wellness-focused employee benefits, and donating our time to our local communities through education and training. 7 Table of Contents As of December 31, 2023, we had a total of 1,503 employees based in 46 U.S. states, including the District of Columbia, eight Canadian provinces, seven office locations throughout the United Kingdom, and one office in Italy.
We focus on team-based employee philanthropy, wellness-focused employee benefits, and donating our time to our local communities through education and training. 7 Table of Contents As of December 31, 2024, we had a total of 1,509 employees based in 43 U.S. states, including the District of Columbia, eight Canadian provinces, five locations throughout the United Kingdom, one location in Italy, and one in Greece.
As of December 31, 2023, we owned and operated 185 small-scale renewable energy plants including solar PV installations which generate electricity or deliver renewable gas fuel with a combined capacity of approximately 508 megawatt equivalents (“MWe”) and have energy assets in development and construction with a combined capacity of approximately 717 MWe, which includes 48 MWe attributable to a non-controlling interest.
As of December 31, 2024, we owned and operated 209 small-scale renewable energy plants including solar PV installations which generate electricity or deliver renewable gas fuel with a combined capacity of approximately 731 megawatt equivalents (“MWe”) and have energy assets in development and construction with a combined capacity of approximately 637 MWe.
The table below shows the type and number of plants we owned and operated as of December 31, 2023: Plants Owned and Operated Quantity Biogas: RNG 5 Biogas: non-RNG 22 Solar and battery assets 151 Other 7 Total plants owned and operated 185 3 Table of Contents Other Our other lines of business include photovoltaic solar energy products and systems (“integrated-PV”), consulting, and enterprise energy management services.
The table below shows the type and number of plants we owned and operated as of December 31, 2024: Plants Owned and Operated Quantity Biogas: RNG (1) 8 Biogas: non-RNG 20 Solar and battery assets 176 Other 5 Total plants owned and operated 209 (1) Includes 1 plant co-owned with non-controlling interest holder 3 Table of Contents Other Our other lines of business include photovoltaic solar energy products and systems (“integrated-PV”), consulting, and enterprise energy management services.
Each session features a different topic to cover various aspects of Ameresco’s solution portfolio and is presented by our internal subject matter experts. All employees are encouraged to attend live and participate in the Q&A. We provide a tuition reimbursement program to support career development within our organization.
Each session features a different topic to cover various aspects of Ameresco’s solution portfolio and is presented by our internal subject matter experts. All employees are encouraged to attend live and participate in the Q&A. We launched Udemy for Business as our cornerstone of digital learning and development that is available to all employees globally.
Philanthropic Activities We actively participate in philanthropic activities that support our local communities and provide an opportunity for dynamic team building.
Philanthropic Activities We actively participate in philanthropic activities that support our local communities and provide an opportunity for dynamic team building. During 2024, we hosted eight volunteer initiatives sponsored by members of our executive management team.
During 2023, we hosted eight volunteer initiatives sponsored by eight members of our executive management team, our employees were encouraged to use paid community service days to donate time and creative energy to these events as well as organizations that touch them personally and to give back to the environment and their communities.
Our employees were encouraged to use paid community service days to donate time and creative energy to these events as well as organizations that touch them personally and to give back to the environment and their communities. As a result, we experienced increased participation in both the utilization of our volunteer hours and activities.
Drawing from decades of experience, we develop these tailored energy projects for federal, state, and local governments, educational and healthcare institutions, airports, public housing authorities, commercial/industrial customers, transportation and infrastructure, and utilities across the United States, Canada, and Europe. We have sourced and raised approximately $5.5 billion in project financing while delivering $14.4 billion in energy solutions since our inception.
Drawing from decades of experience, Ameresco reduces energy use and delivers diversified generation solutions to Federal, state and local governments, utilities, educational and healthcare institutions, housing authorities, and commercial and industrial customers across the North America and Europe. We have sourced and raised approximately $6.4 billion in project financing while delivering $16.2 billion in energy solutions since our inception.
The table below shows the percentage of revenues by segment for the last three years: 2023 2022 2021 % of Revenues by Segment (1) U.S. Regions 40.5 % 61.6 % 45.3 % U.S.
The table below shows the percentage of revenues by segment for the last three years: 2024 2023 2022 % of Revenues by Segment (1) North America Regions 49.7 % 44.8 % 64.3 % U.S.
Federal • Canada • Alternative Fuels • Europe • All Other Europe was formerly included in “All Other”. As a result, previously reported amounts have been reclassified for comparative purposes due to the growth in the segment in 2023. Our U.S. Regions, U.S.
As a result, previously reported amounts have been reclassified for comparative purposes. Our North America Regions, U.S.
During the year ended December 31, 2023, our global workforce is made up of 23% female and 77% male. In addition, 33% of our executive management team are female and 21% of our managers are female. Benefits with a Purpose The health, safety, and well-being of our employees continues to be a top priority at Ameresco.
Our talent team focuses on bringing a wide range of candidates into our pipeline and is trained in skills-based recruiting to identify qualified candidates that meet our needs. Benefits with a Purpose The health, safety, and well-being of our employees continues to be a top priority at Ameresco.
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Item 1. Business Company Overview Ameresco is a leading clean technology integrator and renewable energy asset developer, owner, and operator. Our comprehensive portfolio includes energy efficiency, infrastructure upgrades, asset sustainability, and renewable energy solutions.
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Item 1. Business Company Overview Ameresco is a leading energy solutions provider dedicated to helping customers reduce costs, enhance resilience, and decarbonize to net zero in the global energy transition. Our comprehensive portfolio includes implementing smart energy efficiency solutions, upgrading aging infrastructure, and developing, constructing, and operating distributed energy resources.
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We are proud to be an equal opportunity workplace and an Affirmative Action employer. To educate, support, and promote the culture of diversity, equity, inclusion and justice at Ameresco, diversity in the workplace is discussed at all levels in the organization. Annual diversity in the workplace training is rolled out to all Ameresco employees.
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We have also taken steps to ensure our business is strategically aligned with our core offerings and as part of these efforts, in 2024, we divested an energy technology and advisory services company which allows us to focus on our primary business areas while actively pursuing new growth opportunities within our target markets.
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This comprehensive training is critical to ensuring we are focused on educating our teams and fostering a culture that is all-inclusive. Recruiting is a key element in our commitment to diversity, equity, inclusion, and justice.
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Federal • All Other • Renewable Fuels (previously Alternative Fuels) • Europe 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”.
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Our talent team focuses on attracting and recruiting a diverse workforce by partnering with organizations such as the STEM Like a Girl, New England Women in Energy and the Environment, Massachusetts Rehabilitation Commission, Recruit Military, Hiring Our Heroes, and the Society of Women Engineers (Portland, OR Chapter).
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To foster a healthy, vibrant, and innovative environment, we educate our employees on collaborative and respectful problem-solving skills and how to navigate different points of view in a positive and productive way. Recruiting is a key element in our commitment to equal opportunity. We are keen to bring talented and qualified individuals into our company.
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Through several options of applications of corporate programs, we continued our partnership and memberships to Care.com, Gympass, and Headspace and Virgin Pulse mobile apps. Career Advancement Ameresco strives to implement creative ways for our employees to support career advancement.
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Through our benefit offerings, our employees can also take advantage of tools and benefits to enhance their physical, mental or financial health. Career Advancement Ameresco strives to implement creative ways for our employees to support career advancement.
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In addition, we support employee growth by investing in career advancing certification programs for our employees.
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In 2024, we also launched a manager development program focused on enhancing management and leadership skills for managers across all parts of the organization. We provide a tuition reimbursement program to support career development within our organization. In addition, we support employee growth by investing in career advancing certification programs.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe loss of our ownership interest in a subsidiary or some or all of a subsidiary’s assets or the requirement to make capital contributions under our construction and development loan could have a material adverse effect on our business, financial condition and operating results. 23 Table of Contents If we fail to comply with the obligation in our Senior Credit Facilities to use commercially reasonable efforts to raise a minimum of $100 million equity or subordinated debt financing, we could be in default under the Senor Credit Facilities or if the terms of such financing are not favorable to us our financial condition may be adversely impacted Our Senior Credit Facilities require us to use commercially reasonable efforts (assuming normal market conditions) to raise a minimum of $100 million equity or subordinated debt financing by April 15, 2024.
Biggest changeThe loss of our ownership interest in a subsidiary or some or all of a subsidiary’s assets or the requirement to make capital contributions under our construction and development loan could have a material adverse effect on our business, financial condition and operating results.
As a result of such actions, we would expect to incur restructuring expenses and accounting charges which may be material. Several factors could cause a restructuring to adversely affect our business, financial condition, and results of operations. These include potential disruption of our operations, the development of our small-scale renewable energy projects and other aspects of our business.
As a result of such actions, we would expect to incur restructuring expenses and accounting charges which may be material. Several factors could cause a restructuring to adversely affect our business, financial condition, and results of operations. These include potential disruption to our operations, the development of our small-scale renewable energy projects and other aspects of our business.
Development, installation, and construction of our energy efficiency and renewable energy projects, and operation of our renewable energy projects, entails many risks, including: • failure or delays in receiving components and equipment that meet our requirements, • failure or delays in obtaining all necessary rights to land access and use, • failure or delays in receiving quality performance of contractors and other third-party service providers, • increases (including as a result of inflation) in the cost of labor, equipment, and commodities needed to construct or operate projects, • failure or delays in obtaining permitting and addressing other regulatory issues, license revocation, and changes in legal requirements, • failure or delays in obtaining other governmental support or approvals, or in overcoming objections from members of the public or adjoining landowners, • shortages of equipment or skilled labor, • unforeseen engineering problems, • failure of a customer to accept or pay for renewable energy that we supply, • weather interferences, catastrophic events including fires, explosions, earthquakes, droughts, and acts of terrorism; and accidents involving personal injury or the loss of life, • environmental, archaeological or geological conditions • health or similar issues, a pandemic, or epidemic, such as COVID-19, • labor disputes and work stoppages, • mishandling of hazardous substances and waste, and other events outside of our control.
Development, installation, and construction of our energy efficiency and renewable energy projects, and operation of our renewable energy projects, entails many risks, including: • failure or delays in receiving components and equipment that meet our requirements, • failure or delays in obtaining all necessary rights to land access and use, • failure or delays in receiving quality performance of contractors and other third-party service providers, • increases (including as a result of inflation) in the cost of labor, equipment, and commodities needed to construct or operate projects, • failure or delays in obtaining permitting and addressing other regulatory issues, license revocation, and changes in legal requirements, • failure or delays in obtaining other governmental support or approvals, or in overcoming objections from members of the public or adjoining landowners, • shortages of equipment or skilled labor, • unforeseen engineering problems, • failure of a customer to accept or pay for renewable energy that we supply, • weather interferences, catastrophic events including fires, explosions, earthquakes, droughts, and acts of terrorism; and accidents involving personal injury or the loss of life, • environmental, archaeological or geological conditions • health or similar issues, a pandemic, or epidemic, • labor disputes and work stoppages, • mishandling of hazardous substances and waste, and other events outside of our control.
These conditions, combined with an increased demand for certain products needed for our business, such as lithium-ion battery cells and solar panels has created a shortfall of and increased costs for these products and has caused challenges and delays in our projects and may impact the profitability of our projects.
These conditions, combined with an increased demand for certain products needed for our business, such as lithium-ion battery cells, inverters, and solar panels has created a shortfall of and increased costs for these products and has caused challenges and delays in our projects and may impact the profitability of our projects.
In accordance with generally accepted accounting principles in the United States, we capitalize certain expenditures and advances relating to our new acquisitions, pending acquisitions, project development costs, interest costs related to project financing and certain energy assets. In addition, we have considerable unamortized assets.
In accordance with generally accepted accounting principles in the United States, we capitalize certain expenditures and advances relating to our acquisitions, pending acquisitions, project development costs, interest costs related to project financing and certain energy assets. In addition, we have considerable unamortized assets.
Furthermore, certain of our facilities, projects and suppliers are located in or operate operations in locations that are susceptible to natural disasters. The frequency of weather-related natural disasters may be increasing due to climate change.
Furthermore, certain of our facilities, projects and suppliers are located in or operate in locations that are susceptible to natural disasters. The frequency of weather-related natural disasters may be increasing due to climate change.
The IRA contains extended and expanded clean energy tax credits such as the Investment Tax Credit (“ITC”), the Production Tax Credit (“PTC”), and created other financial incentives designed to promote the development of certain domestic clean energy projects.
The IRA extended and expanded clean energy tax credits such as the Investment Tax Credit (“ITC”), the Production Tax Credit (“PTC”), and created other financial incentives designed to promote the development of certain domestic clean energy projects.
We own, and in the future may acquire or establish, operating or development projects in joint ventures. Joint ventures inherently involve a lesser degree of control over business operations.
We own, and in the future may acquire or establish, operating or development projects through joint ventures. Joint ventures inherently involve a lesser degree of control over business operations.
Any of these factors could give rise to construction delays, costs in excess of our expectations or cause us not to meet commitments given to our customers. We have, for example, experienced disruptions in development, installation and construction as a result of continued supply chain and logistics challenges, facility closures, and we may continue to experience such disruptions.
Any of these factors could give rise to construction delays, costs in excess of our expectations or cause us not to meet commitments given to our customers. We have, for example, experienced disruptions in development, installation and construction as a result of continued supply chain and logistics challenges, and we may continue to experience such disruptions.
If those changes or clarifying guidance issued by the IRS result in lower levels of energy efficiency improvements, it could impact the deduction available and the tax rate. In addition, like other companies, we may be subject to examination of our income tax returns by the U.S.
If those changes or clarifying guidance issued by the IRS result in lower levels of energy efficiency improvements, it could impact the deduction available and the tax rate. In addition, like other companies, we have and may in the future be subject to examination of our income tax returns by the U.S.
Provisions in our senior credit facility and term loan, project financing term loans and construction loans impose customary restrictions on our and certain of our subsidiaries’ business activities and uses of cash and other collateral. These agreements also contain other customary covenants, including covenants that require us to meet specified financial ratios and financial tests.
Provisions in our senior credit facility and term loan and second lien term loan, project financing term loans and construction loans impose customary restrictions on our and certain of our subsidiaries’ business activities and uses of cash and other collateral. These agreements also contain other customary covenants, including covenants that require us to meet specified financial ratios and financial tests.
Department of Energy Savannah River Site in South Carolina, a subsidiary of ours is exposed to the risk that the price of the biomass that will be used to fuel the cogeneration facility may rise during the remainder of the 19-year performance period of the contract. S everal provisions in that contract mitigate the price risk.
Department of Energy Savannah River Site in South Carolina, a subsidiary of ours is exposed to the risk that the price of the biomass that will be used to fuel the cogeneration facility may rise during the remainder of the 18-year performance period of the contract. S everal provisions in that contract mitigate the price risk.
While federal, state and local government rules governing such contracts vary, such rules may, for example, permit the funding of such projects through long-term financing arrangements; permit long-term payback periods from the savings realized through such contracts; allow units of government to exclude debt related to such projects from the calculation of their statutory debt limitation; allow for award of contracts on a “best value” instead of “lowest cost” basis; and allow for the use of sole source providers.
While federal, state and local government rules governing such contracts vary, such rules may, for example, permit the funding of such projects through long-term financing arrangements; permit long-term payback periods from the savings realized through such contracts; allow units of 20 Table of Contents government to exclude debt related to such projects from the calculation of their statutory debt limitation; allow for award of contracts on a “best value” instead of “lowest cost” basis; and allow for the use of sole source providers.
We may assume responsibility under customer contracts for factors outside our control, including, in connection with some customer projects, the risk that fuel prices will increase. We typically do not take responsibility under our contracts for a wide variety of factors outside our control.
We may assume responsibility under customer contracts for factors outside our control, including, in connection with some customer projects, the risk that fuel and component prices will increase. We typically do not take responsibility under our contracts for a wide variety of factors outside our control.
For example, our Turnkey Engineering, Procurement, Construction and Maintenance Agreement and the underlying purchase orders dated as of October 21, 2021 (the “SCE Agreement”) with SCE obligated us to achieve certain substantial completion milestone dates for the facilities no later than August 1, 2022, and for at least two years thereafter meet specified availability and capacity guarantees.
For example, our Turnke y Engineering, Procurement, Construction and Maintenance Agreement and the underlying purchase orders dated as of October 21, 2021 (the “SCE Agreement”) with SCE obligated us to achieve certain substantial completion milestone dates for the facilities no later than August 1, 2022, and for at least two years thereafter meet specified availability and capacity guarantees.
RECs are created through state law requirements for utilities to purchase a portion of their energy from renewable energy sources and changes in state laws or regulation relating to 19 Table of Contents RECs may adversely affect the availability of RECs or other environmental attributes and the future prices for RECs or other environmental attributes, which could have an adverse effect on our business, financial condition, and results of operations.
RECs are created through state law requirements for utilities to purchase a portion of their energy from renewable energy sources and changes in state laws or regulation relating to RECs may adversely affect the availability of RECs or other environmental attributes and the future prices for RECs or other environmental attributes, which could have an adverse effect on our business, financial condition, and results of operations.
Although our subsidiary debt is typically non-recourse to Ameresco, if a subsidiary of ours defaults on such obligations, or if one project financed by a particular subsidiary’s indebtedness encounters difficulties or is terminated, then we may from time to time determine to provide financial support to the subsidiary in order to maintain rights to the project or otherwise avoid the adverse consequences of a default.
Although our subsidiary debt is typically non-recourse to Ameresco, if a subsidiary of ours defaults on such obligations, or if one 23 Table of Contents project financed by a particular subsidiary’s indebtedness encounters difficulties or is terminated, then we may from time to time determine to provide financial support to the subsidiary in order to maintain rights to the project or otherwise avoid the adverse consequences of a default.
To the extent that any attacks, disruptions or security breach results in a loss or damage to our data, or an inappropriate disclosure of information, or adversely impact the 15 Table of Contents assets we own or operate, it could cause significant damage to our reputation, affect our relationships with our customers and employees, lead to claims against us and ultimately harm our business and operating results.
To the extent that any attacks, disruptions or security breach results in a loss or damage to our data, or an inappropriate disclosure of information, or adversely impact the assets we own or operate, it could cause significant damage to our reputation, affect our relationships with our customers and employees, lead to claims against us and ultimately harm our business and operating results.
We have for example in the past commenced, and may in the future commence, development of certain projects, such as battery and solar projects, prior to having entered into final binding contracts with the customer or financing party. We expect to invest a significant amount of capital to develop projects whether owned by us or by third parties.
We have for example in the past commenced, and may in the future commence, development of certain projects, such as battery and solar projects, prior to having entered into final binding contracts with the customer or financing party. 12 Table of Contents We expect to invest a significant amount of capital to develop projects whether owned by us or by third parties.
We are subject to seasonal fluctuations and construction cycles, particularly in climates that experience colder weather during the winter months, such as the northern United States and Canada, and climates that experience extreme weather events, such as wildfires, storms, or flooding, or at educational institutions, where large projects are typically carried out during summer months when their facilities are unoccupied.
We are subject to seasonal fluctuations and construction cycles, particularly in areas that experience colder weather during the winter months, such as the northern United States and Canada, and other areas that experience extreme weather events, such as wildfires, storms, or flooding, or at educational institutions, where large projects are typically carried out during summer months when their facilities are unoccupied.
Many of our competitors have longer operating histories and greater resources than us and could focus their substantial financial resources to develop a competitive advantage, others may be smaller and able to adapt to the constantly changing demand of the market more quickly. The passage of the IRA and the opportunities it brings could intensify competition in our industry.
Many of our competitors have longer operating histories and greater resources than we do and could focus their substantial financial resources to develop a competitive advantage, others may be smaller and able to adapt to the constantly changing demand of the market more quickly. The passage of the IRA and the opportunities it brings could intensify competition in our industry.
For example, in 2022 we had to undertake some unscheduled maintenance at some of our RNG plants impacting the energy output from such plants. Any extended interruption in the plant’s operation, or failure of the plant for any reason to generate the expected amount of output, could have a material adverse effect on our business and operating results.
For example, in previous years, we had to undertake some unscheduled maintenance at some of our RNG plants impacting the energy output from such plants. Any extended interruption in the plant’s operation, or failure of the plant for any reason to generate the expected amount of output, could have a material adverse effect on our business and operating results.
Any future acquisitions that we may make could disrupt our business, cause dilution to our stockholders and harm our business, financial condition or operating results, and our use of joint ventures could expose us to additional risks and liabilities.
Any future acquisitions that we may make could disrupt our business, cause dilution to our stockholders and harm our business, financial condition or operating results, and our joint ventures could expose us to additional risks and liabilities.
If we become subject to additional regulation under PUHCA, FPA, or other regulatory frameworks, if existing regulatory requirements become more onerous, or if other material changes to the regulation of the electric power markets take place, our business, financial condition, and operating results could be adversely affected. 21 Table of Contents Changes in utility regulation and tariffs could adversely affect our business.
If we become subject to additional regulation under PUHCA, FPA, or other regulatory frameworks, if existing regulatory requirements become more onerous, or if other material changes to the regulation of the electric power markets take place, our business, financial condition, and operating results could be adversely affected. Changes in utility regulation and tariffs could adversely affect our business.
In addition, the U.S. government generally has not taken action to materially burden the international supply chain, which has been important to the development of renewable energy facilities at acceptable prices.
In addition, the U.S. government historically has not taken action to materially burden the international supply chain, which has been important to the development of renewable energy facilities at acceptable prices.
Because the techniques used to obtain unauthorized access, to disable or degrade systems, and to generate cyberattacks change frequently, have become increasingly more sophisticated, and may be difficult to detect for periods of time, we may not anticipate these acts or respond adequately or timely.
Because the techniques used to obtain unauthorized access, to disable or degrade systems, and to 15 Table of Contents generate cyberattacks change frequently, have become increasingly more sophisticated, and may be difficult to detect for periods of time, we may not anticipate these acts or respond adequately or timely.
This could have an adverse effect on the rates we charge for power from our projects and our cost of regulatory compliance. Wholesale electric power sales are subject to increasing regulation. The terms and conditions for power sales, and the right to enter and remain in the wholesale electric sector, are subject to FERC oversight.
This 21 Table of Contents could have an adverse effect on the rates we charge for power from our projects and our cost of regulatory compliance. Wholesale electric power sales are subject to increasing regulation. The terms and conditions for power sales, and the right to enter and remain in the wholesale electric sector, are subject to FERC oversight.
Compliance with those laws and regulations can require us to incur substantial costs. Moreover, if our compliance programs are not successful, we could be subject to penalties or to revocation of our permits, which may require us to curtail or cease operations of the affected projects.
Compliance with those laws and regulations can require us to incur substantial costs. Moreover, if our compliance programs are not successful, we could be subject to penalties or to revocation of 22 Table of Contents our permits, which may require us to curtail or cease operations of the affected projects.
As of December 31, 2023 and 2022, we had backlog of approximately $1.3 billion and $1.0 billion, respectively, in expected future revenues under signed customer contracts for the installation or construction of projects, which we sometimes refer to as fully-contracted backlog; and we also had been awarded projects for which we do not yet have signed customer contracts with estimated total future revenues of an additional $2.6 billion and $1.6 billion, respectively.
As of December 31, 2024 and 2023, we had backlog of approximately $2.5 billion and $1.3 billion, respectively, in expected future revenues under signed customer contracts for the installation or construction of projects, which we sometimes refer to as fully-contracted backlog; and we also had been awarded projects for which we do not yet have signed customer contracts with estimated total future revenues of an additional $2.3 billion and $2.6 billion, respectively.
Furthermore, the Organization for Economic Cooperation and Development (OECD) Inclusive Framework of 137 jurisdictions have joined a two-pillar plan to reform international taxation rules.
Furthermore, the Organization for Economic Cooperation and Development (OECD) Inclusive Framework of 140 jurisdictions have joined a two-pillar plan to reform international taxation rules.
Risks Related to our Indebtedness Our senior credit facility, energy asset financing term loans and construction loans contain financial and operating restrictions that may limit our business activities and our access to credit, and they may not be sufficient to fund our capital needs and growth.
Risks Related to our Indebtedness Our senior credit facility, second lien term loan, energy asset financing term loans and construction loans contain financial and operating restrictions that may limit our business activities and our access to credit, and they may not be sufficient to fund our capital needs and growth.
In the 16 Table of Contents case of a solar photovoltaic installation that ceases operations, the offtake agreement terms generally require that we remove the assets, including fixing or reimbursing the site owner for any damages caused by the assets or the removal of such assets.
In the case of a solar photovoltaic installation that ceases operations, the offtake agreement terms generally require that we remove the assets, including fixing or reimbursing the site owner for any damages caused by the assets or the removal of such assets.
Our utilization of the share repurchase program depends upon a variety of factors, including the trading price of our Class A common stock, liquidity, securities laws restrictions, tax and other regulatory restrictions, alternative uses of capital, and market and economic conditions.
Our utilization 24 Table of Contents of the share repurchase program depends upon a variety of factors, including the trading price of our Class A common stock, liquidity, securities laws restrictions, tax and other regulatory restrictions, alternative uses of capital, and market and economic conditions.
We may also incur substantial expenses and costs in 22 Table of Contents connection with maintaining compliance with such laws. Globally, laws such as the General Data Protection Regulation (“GDPR”) in Europe and new and emerging state laws in the United States on privacy, data, and related technologies, have created new compliance obligations and significantly increases fines for noncompliance.
We may also incur substantial expenses and costs in connection with maintaining compliance with such laws. Globally, laws such as the General Data Protection Regulation (“GDPR”) in Europe and new and emerging state laws in the United States on privacy, data, and related technologies, have created new compliance obligations and significantly increases fines for noncompliance.
As of December 31, 2023 and 2022, we had O&M backlog of approximately $1.2 billion. Our O&M backlog represents expected future revenues under signed, multi-year customer contracts for the delivery of O&M services, primarily for energy efficiency and renewable energy construction projects completed by us for our customers.
As of December 31, 2024 and 2023, we had O&M backlog of approximately $1.4 billion and $1.2 billion, respectively. Our O&M backlog represents expected future revenues under signed, multi-year customer contracts for the delivery of O&M services, primarily for energy efficiency and renewable energy construction projects completed by us for our customers.
The Senior Credit Facilities are subject to quarter end ratio covenants, including a maximum ratio of total funded debt to EBITDA and a debt service coverage ratio (each as defined in the agreement and described in more detail in this Form 10-K) as well as certain other customary operational covenants.
The Senior Credit Facilities and second lien term loan are subject to quarter end ratio covenants, including a maximum ratio of total funded debt to EBITDA and a debt service coverage ratio (each as defined in the agreement and described in more detail in this Form 10-K) as well as certain other customary operational covenants.
These operations will be subject to a variety of risks that we do not face in the United States, and that we may face only to a limited degree in Canada and Europe, including: • building and managing a highly experienced foreign workforce and overseeing and ensuring the performance of foreign subcontractors, • increased travel, infrastructure and legal and compliance costs associated with multiple international locations, • additional withholding taxes or other taxes on our foreign income, and tariffs or other restrictions on foreign trade or investment, • imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements, many of which differ from those in the United States, • increased exposure to foreign currency exchange rate risk, • longer payment cycles for sales in some foreign countries and potential difficulties in enforcing contracts and collecting accounts receivable, • difficulties in repatriating overseas earnings, • international and regional economic, political and labor conditions in the countries in which we operate; and • political unrest, war, incidents of terrorism, pandemics, or responses to such events.
These operations will be subject to a variety of risks that we do not face in the United States, and that we may face only to a limited degree in Canada and Europe, including: • building and managing a highly experienced foreign workforce and overseeing and ensuring the performance of foreign subcontractors, • increased travel, infrastructure and legal and compliance costs associated with multiple international locations, • additional withholding taxes or other taxes on our foreign income, and tariffs or other restrictions on foreign trade or investment, • imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements, many of which differ from those in the United States, • increased exposure to foreign currency exchange rate risk, • longer payment cycles for sales in some foreign countries and potential difficulties in enforcing contracts and collecting accounts receivable, • difficulties in repatriating overseas earnings, • international and regional economic, political and labor conditions in the countries in which we operate; and • political unrest, war, incidents of terrorism, pandemics, or responses to such events. 18 Table of Contents Our overall success in international markets will depend, in part, on our ability to succeed in differing legal, regulatory, economic, social, and political conditions.
A whole building-level commitment requires future measurement and verification of increased energy efficiency for a whole building, 13 Table of Contents often based on readings of the utility meter where usage is measured.
A whole building-level commitment requires future measurement and verification of increased energy efficiency for a whole building, often based on readings of the utility meter where usage is measured.
Historically, including for the years ended December 31, 2023 and 2022, 72% and 46%, respectively, of our revenues have been derived from sales to federal, state, provincial, or local governmental entities, including public housing authorities, public universities, and municipal utilities.
Historically, including for the years ended December 31, 2024 and 2023, 67% and 72%, respectively, of our revenues have been derived from sales to federal, state, provincial, or local governmental entities, including public housing authorities, public universities, and municipal utilities.
Any stock repurchase would be through open market transactions or in privately negotiated transactions, in 24 Table of Contents accordance with applicable securities laws and regulatory limitations. We may reduce or eliminate our share repurchase program in the future.
Any stock repurchase would be through open market transactions or in privately negotiated transactions, in accordance with applicable securities laws and regulatory limitations. We may reduce or eliminate our share repurchase program in the future.
Our failure to comply with the covenants under our project financing debt or our Senior Credit Facilities may result in the declaration of an event of default and cause us to be unable to borrow under our Senior Credit Facilities.
Our failure to comply with the covenants under our project financing debt, our Senior Credit Facilities or second lien term loan may result in the declaration of an event of default and cause us to be unable to borrow under our Senior Credit Facilities.
If an event of default occurs under our project financing debt or our Senior Credit Facilities, we may not be able to cure it within any applicable cure period, if at all.
If an event of default occurs under our project financing debt, our Senior Credit Facilities or second lien term loan, we may not be able to cure it within any applicable cure period, if at all.
In addition to preventing additional borrowings under these facilities, an event of default, if not cured or waived, may result in the acceleration of the maturity of indebtedness outstanding under it or the applicable project financing term loan, which would require us to pay all amounts outstanding.
In addition to preventing additional borrowings under the Senior Credit Facilities, an event of default, if not cured or waived, may result in the acceleration of the maturity of indebtedness outstanding under our Senior Credit Facilities, senior term loan or the applicable project financing term loan, which would require us to pay all amounts outstanding.
If we are unable to complete the development of a project or enter into contracts with the customer, we may write-down or write-off some or all of these capitalized investments, which would have an adverse impact on our net income in the period in which the loss is recognized and could have an adverse impact our ability to finance our operations. 12 Table of Contents We are exposed to the credit risk of some of our customers.
If we are unable to complete the development of a project or enter into contracts with the customer, we may write-down or write-off some or all of these capitalized investments, which would have an adverse impact on our net income in the period in which the loss is recognized and could have an adverse impact our ability to finance our operations.
Internal Revenue Service and other tax authorities; our U.S. federal tax returns for 2020 through 2023 are subject to audit by federal, state, and foreign tax authorities.
Internal Revenue Service and other tax authorities; our U.S. federal tax returns for 2021 through 2024 are subject to audit by federal, state, and foreign tax authorities.
Most of our revenues are derived under multi-year or long-term contracts with our customers, and our revenues are therefore dependent to a large extent on the creditworthiness of our customers.
We are exposed to the credit risk of some of our customers. Most of our revenues are derived under multi-year or long-term contracts with our customers, and our revenues are therefore dependent to a large extent on the creditworthiness of our customers.
This could have a material adverse effect on our reputation, business or results of operations. A significant decline in the fiscal health of federal, state, provincial, and local governments could reduce demand for our energy efficiency and renewable energy projects.
This could have a material adverse effect on our reputation, business, and results of operations. A significant decline in the fiscal health of federal, state, provincial, and local governments could reduce demand for our energy efficiency and renewable energy projects and a significant reduction of the federal workforce could delay federal contracting and adversely impact our federal business.
For small-scale renewable energy plants that we own, as well as certain larger projects for customers, such as the battery storage project with SCE, we typically rely on a combination of our working capital and debt to finance construction costs.
For small-scale renewable energy plants that we own, as well as certain larger projects for customers, we typically rely on a combination of our working capital and debt to finance construction costs.
We may not be able to replace expiring offtake agreements with contracts on similar terms. If we are unable to replace an expired offtake agreement with an acceptable new contract, we may be required to remove the small-scale renewable energy plant from the site or, alternatively, we may sell the assets to the customer.
If we are unable to replace an expired offtake agreement with an acceptable new contract, we may be required to remove the small-scale renewable energy plant from the site or, alternatively, we may sell the assets to the customer.
We have been subject to and may in the future experience cybersecurity threats, including advanced and persistent cyberattacks, phishing and social engineering schemes, particularly on internet applications. Such cyber and other security threats could compromise the assets we own and operate or data in our systems .
We have been subject to and may in the future experience cybersecurity threats, including advanced and persistent cyberattacks, phishing and social engineering schemes, particularly on internet applications. This risk may increase as we implement artificial intelligence features into our operations. Such cyber and other security threats could compromise the assets we own and operate or data in our systems .
This deduction is related to energy efficient improvements we provide under government contracts. The Consolidated Appropriations Act, 2021 made permanent the Section 179D Energy Efficient Commercial Building Deduction. That Act, along with the IRA, also made changes to the way the deduction is calculated.
Our tax rate has historically been significantly impacted by the IRC Section 179D deduction. This deduction is related to energy efficient improvements we provide under government contracts. The Consolidated Appropriations Act, 2021 made permanent the Section 179D Energy Efficient Commercial Building Deduction. That Act, along with the IRA, also made changes to the way the deduction is calculated.
From time to time in future periods, we may be required to incur a charge against earnings in an amount equal to any unamortized capitalized expenditures and advances, net of any portion thereof that we estimate will be recoverable, through sale or otherwise, relating to: (i) any operation or other asset that is being sold, permanently shut down, impaired or has not generated or is not expected to generate sufficient cash flow; (ii) any pending acquisition that is not consummated; (iii) any project that is not expected to be successfully completed; and (iv) any goodwill or other intangible assets that are determined to be impaired.
We have in the past incurred charges, and may from time to time in future periods be required to incur a charge against earnings in an amount equal to any unamortized capitalized expenditures and advances, net of any portion thereof that we estimate will be recoverable, through sale or otherwise, relating to: (i) any operation or other asset that is being sold, permanently shut down, impaired or has not generated or is not expected to generate sufficient cash flow; (ii) any pending acquisition that is not consummated; (iii) any project that is not expected to be successfully completed; and (iv) any goodwill or other intangible assets that are determined to be impaired. 17 Table of Contents In response to such charges and costs and other market factors, we may be required to implement restructuring plans in an effort to reduce the size and cost of our operations and to better match our resources with our market opportunities.
In addition, some of the third parties we engage for our design, construction and operation projects operate internationally and our reliance on their products and services may be impacted by economic, political, and labor conditions in those regions as well as the uncertainty caused by the evolving relations between the United States and these regions, including China and the Middle East.
In addition, some of the third parties we engage for our design, construction and operation projects operate internationally and our reliance on their products and services may be impacted by economic, political, and labor conditions in those regions.
In addition, if there is a partial or full shutdown of any federal, state, provincial or local governing body this may adversely impact our financial performance. 11 Table of Contents Provisions in our government contracts may harm our business, financial condition and operating results.
In addition, if there is a partial or full shutdown of any federal, state, provincial or local governing body this may adversely impact our financial performance.
If we were to commence construction in anticipation of obtaining the final, non-appealable permits needed for a project, we would be subject to the risk of being unable to complete the project if all the permits were not obtained.
Delays could also increase the cost so substantially that the projects are no longer attractive to us. If we were to commence construction in anticipation of obtaining the final, non-appealable permits needed for a project, we would be subject to the risk of being unable to complete the project if all the permits were not obtained.
Some of our third-party business partners have international operations and are also subject to these risks and if our third-party business partners are unable to appropriately manage these risks, our business may be harmed. 18 Table of Contents Risks related to Regulations or Governmental Actions Our business depends in part on federal, state, provincial and local government support for energy efficiency and renewable energy, and a decline in such support or the imposition of additional taxes, tariffs, duties, or other assessments on renewable energy or the equipment necessary to generate or deliver it, could harm our business.
Risks related to Regulations or Governmental Actions Our business depends in part on federal, state, provincial and local government support for energy efficiency and renewable energy, and a decline in such support or the imposition of additional taxes, tariffs, duties, or other assessments on renewable energy or the equipment necessary to generate or deliver it, could harm our business.
The success of our business and construction projects depends in large part on the skill of our personnel and on trade labor resources, including with certain specialty subcontractor skills.
The success of our business and construction projects depends in large part on the skill of our personnel and on trade labor resources, including with certain specialty subcontractor skills. Competition for personnel, particularly those with expertise in the energy services and renewable energy industries, is hig h.
The prices for these materials fluctuate and their available supply may be unstable, depending on market conditions, regulation and global demand for these materials. As a result of increased global production of energy storage products and electric vehicles, suppliers of these raw materials may be unable to meet our volume or timing needs.
As a result of increased global production of energy storage products and electric vehicles, suppliers of these raw materials may be unable to meet our volume or timing needs.
This may have an adverse effect on our business and operating results. Our provision for income taxes is subject to volatility and could be adversely affected by changes in tax laws or regulations, particularly changes in tax incentives in support of energy efficiency.
Our provision for income taxes is subject to volatility and could be adversely affected by changes in tax laws or regulations, particularly changes in tax incentives in support of energy efficiency, clean electricity and biofuel production.
Employee morale and productivity could also suffer and result in unintended employee attrition. Any restructuring would require substantial management time and attention and may divert management from other important work.
Employee morale and productivity could also suffer and result in unintended employee attrition. Any restructuring would require substantial management time and attention and may divert management from other important work. Moreover, we could encounter delays in executing any restructuring plans, which could cause further disruption and additional unanticipated expense.
If we fail to satisfy certain milestone obligations, fail come to an agreement with SCE or otherwise resolve matters related to substantial completion or related force majeure relief, or fail to meet the availability and capacity guarantees, we may be subject to liquidated damages and under certain circumstances SCE may have a right to terminate the agreement.
If we fail to come to an agreement with SCE or otherwise resolve matters related to substantial completion or related force majeure relief, or fail to meet the availability and capacity guarantees, we may be subject to liquidated damages up to the maximum amount of $89 million.
The stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of publicly traded companies. If the stock market in general experiences a significant decline, the trading price of our Class A common stock could decline for reasons unrelated to our business, financial condition, or operating results.
If the stock market in general experiences a significant decline, the trading price of our Class A common stock could decline for reasons unrelated to our business, financial condition, or operating results.
For example, we are dependent on the continued supply of lithium-ion battery cells for our energy storage products, and we will require substantially more cells to grow our battery storage business based on our current plans. Currently, we rely on limited number of suppliers for these cells.
These changes may affect our ability to source materials and products, potentially leading to increased costs and operational challenges. For example, we are dependent on the continued supply of lithium-ion battery cells for our energy storage products, and we will require substantially more cells to grow our battery storage business based on our current plans.
Global trade challenges including supply chain delays continue to persist and have been exacerbated by global unrest and wars. These conditions may have long-lasting adverse impact on us and our industries.
We have been and may continue to be impacted by macroeconomic conditions such as supply chain challenges, a shortfall of certain products needed for our business, and inflationary pressures. Global trade challenges including supply chain delays continue to persist and have been exacerbated by global unrest and wars. These conditions may have long-lasting adverse impact on us and our industries.
Under a pre-agreed efficiency commitment, our customer reviews the project design in advance and agrees that, upon or shortly after completion of installation of the specified equipment comprising the project, the pre-agreed increase in energy efficiency will have been met.
Under a pre-agreed efficiency commitment, our customer reviews the project design in advance and agrees that, upon or shortly after completion of installation of the specified equipment comprising the project, the pre-agreed increase in energy efficiency will have been met. 13 Table of Contents Under an equipment-level commitment, we commit to a level of increased energy efficiency based on the difference in use measured first with the existing equipment and then with the replacement equipment upon completion of installation.
In such circumstances, if we are unable to meet such commitments, we may be required to incur additional costs or face penalties. Despite the steps we have taken to mitigate risks under these and other contracts, such steps may not be sufficient to avoid the need to incur increased costs to satisfy our commitments, and such costs could be material.
Despite the steps we have taken to mitigate risks under these and other contracts, such steps may not be sufficient to avoid the need to incur increased costs to satisfy our commitments, and such costs could be material. Increased costs that we are unable to pass through to our customers could have a material adverse effect on our operating results.
We sometimes seek to sell forward a portion of our SRECs and other environmental attributes under contracts to fix the revenues from those attributes for financing purposes or hedge against future declines in prices of such environmental attributes.
Some of our biofuel may also qualify for various state incentives, such as the Low Carbon Fuel Standard (“LCFS”), the pricing or availability of which may fluctuate. 19 Table of Contents We sometimes seek to sell forward a portion of our SRECs and other environmental attributes under contracts to fix the revenues from those attributes for financing purposes or hedge against future declines in prices of such environmental attributes.
Similarly, we have not entered into long-term agreements with respect to the RINs for which the production and sale of such biofuel may qualify. The failure to sell such processed RNG, medium-BTU gas, electricity, or the related RINs at a favorable price, or at all could have a material adverse effect on our business and operating results.
The failure to sell such processed RNG, medium-BTU gas, electricity, or the related RINs at a favorable price, or at all could have a material adverse effect on our business and operating results. 16 Table of Contents We may not be able to replace expiring offtake agreements with contracts on similar terms.
Uncertainty remains under the IRA on which types of projects are eligible for the tax credits and incentives and how projects can demonstrate compliance with the requirements, we may not receive full value of the tax credits and incentives, which could increase our income tax expense, reduce our net income and adversely impact the profitability of our projects or our ability to finance our projects.
As a result, we may not receive full value of the tax credits and incentives, which could increase our income tax expense, reduce our net income and adversely impact the profitability of our projects or our ability to finance our projects.
If we were to lose the services of any of our executive officers or key employees, our ability to effectively manage our operations and implement our strategy could be harmed and our business may suffer. 14 Table of Contents We have been and may continue to be impacted by macroeconomic conditions such as supply chain challenges, a shortfall of certain products needed for our business, and inflationary pressures.
If we 14 Table of Contents were to lose the services of any of our executive officers or key employees, our ability to effectively manage our operations and implement our strategy could be harmed and our business may suffer.
As of December 31, 2023, the balance of our Senior Credit Facilities was $279.9 million, $65.0 million of which was outstanding under the delayed draw term loan. These Senior Credit Facilities may not be sufficient to meet our needs as our business grows, and we may be unable to extend or replace them on acceptable terms, or at all.
These Senior Credit Facilities and second lien term loan may not be sufficient to meet our needs as our business grows, and we may be unable to extend or replace them on acceptable terms, or at all.
We cannot predict the duration of these global challenges or their impact on our business. If we experience unfavorable global market conditions, our business, prospects, financial condition, and operating results may be harmed.
We cannot predict the duration of these global challenges or their impact on our business. If we experience unfavorable global market conditions, our business, prospects, financial condition, and operating results may be harmed. The 'America First' trade policy has introduced a variety of tariffs and may further strain trade relations, create inflationary pressures, and cause additional supply chain disruptions.
We may have exposure to additional tax liabilities and our effective tax rate may increase or fluctuate, which could increase our income tax expense and reduce our net income and we may not be able to utilize the full value of tax credits and incentives available under the IRA or may become subject to penalties if we fail to meet requirements for these credits and incentives.
We may not be able to utilize the full value of tax credits and incentives available under the IRA or may become subject to penalties if we fail to meet requirements for these credits and incentives. This may have an adverse effect on our business and operating results.
Moreover, we could encounter delays in executing any restructuring plans, which could cause further disruption and additional unanticipated expense. 17 Table of Contents See also Note 2, “Summary of Significant Accounting Policies” and Note 5, “Goodwill and Intangible Assets, Net”, to our consolidated financial statements appearing in Item 8 of this Report.
See also Note 2, “Summary of Significant Accounting Policies” and Note 5, “Goodwill and Intangible Assets, Net”, to our consolidated financial statements appearing in Item 8 of this Report.
In the event of non-payment by one or more of our customers, our business, financial condition and operating results could be adversely affected. Our business is affected by seasonal trends and construction cycles, and these trends and cycles could have an adverse effect on our operating results.
Our business is affected by seasonal trends and construction cycles, and these trends and cycles could have an adverse effect on our operating results.
Our failure to manage these risks successfully could harm our international operations, reduce our international sales, and increase our costs, thus adversely affecting our business, financial condition and operating results.
We may not be successful in developing and implementing policies and strategies that will be effective in managing these risks in each country where we do business. Our failure to manage these risks successfully could harm our international operations, reduce our international sales, and increase our costs, thus adversely affecting our business, financial condition and operating results.
Certain of our debt agreements, including our Senior Credit Facilities, also contain subjective acceleration clauses based on a lender deeming that a “material adverse change” in our business has occurred. If these clauses are implicated, and the lender declares that an event of default has occurred, the outstanding indebtedness would likely be immediately due and owing.
Certain of our debt agreements, including our Senior Credit Facilities and second lien term loan, also contain subjective acceleration clauses based on a lender deeming that a “material adverse change” in our business has occurred.
The trading price of our Class A common stock is volatile and could be subject to wide fluctuations, some of which are beyond our control. During the year ended December 31, 2023, our Class A common stock has traded at a low of $18.40 and a high of $65.86.
Risks Related to Ownership of Our Class A Common Stock The trading price of our Class A common stock is volatile. The trading price of our Class A common stock is volatile and could be subject to wide fluctuations, some of which are beyond our control.
Due to the uncertainty in the regulatory and legislative processes, we cannot determine the effect any such legislation and regulation may have on our products and operations.
Failure to comply with trade restrictions and other governmental restrictions could subject us to fines and penalties. This could have a negative impact on our business and results of operation. Due to the uncertainty in the regulatory and legislative processes, we cannot determine the effect any such legislation and regulation may have on our products and operations.
We have over the past few years experienced longer lead times in the permitting process for projects and such delays have and may further impair or delay our ability to develop projects. Delays could also increase the cost so substantially that the projects are no longer attractive to us.
In addition, we cannot predict whether the permits will attract significant opposition or whether the permitting process will be lengthened due to complexities and appeals. We have over the past few years experienced longer lead times in the permitting process for projects and such delays have and may further impair or delay our ability to develop projects.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThis includes receiving regular exercises, cyber-event simulations, training programs and an annual attestation to our Technology Acceptable Use Policy. 25 Table of Contents See “A failure of our information technology (“IT”) and data security infrastructure or cyber or other security incidents, vulnerabilities or other deficiencies, could adversely impact our business, reputation or results of operation or could cause us to default under our contractual obligations.” in Item 1A, Risk Factors.
Biggest changeSee “A failure of our information technology (“IT”) and data security infrastructure or cyber or other security incidents, vulnerabilities or other deficiencies, could adversely impact our business, reputation or results of operation or could cause us to default under our contractual obligations.” in Item 1A, Risk Factors.
For example, we have engaged an outside consulting firm with expertise in the field to help us assess our systems, monitor risk and implement best practices and to support the internal audit of our cyber security programs and we regularly consults with industry groups on emerging industry trends.
For example, we have engaged an outside consulting firm with expertise in the field to help us assess our systems, monitor risk and implement best practices and to support the internal audit of our cyber security programs and we regularly consult with industry groups on emerging industry trends.
We firmly believe that cybersecurity is a collective responsibility that extends to every employee, and we prioritize it as an ongoing objective. To increase our employees' awareness of cyber threats, we provide education and share best practices through a security awareness training program.
We firmly believe that cybersecurity is a collective responsibility that extends to every employee, and we prioritize it as an ongoing objective. To increase our employees' awareness 25 Table of Contents of cyber threats, we provide education and share best practices through a security awareness training program.
The full Board of Directors receives regular reports from the Audit Committee and our management on our cyber security program and the emerging threat landscape. We have a Senior Vice President of Information Technology whose team is responsible for leading company-wide cybersecurity strategy, policy, standards and processes and works across relevant units of Ameresco.
The full Board of Directors receives regular reports from the Audit Committee and our management on our cyber security program and the emerging threat landscape. Our Senior Vice President of Information Technology is responsible for leading our company-wide cybersecurity strategy, policy, standards and processes and together with our whole information technology team works across relevant units of Ameresco.
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This includes receiving regular exercises, cyber-event simulations, training programs and an annual attestation to our Technology Acceptable Use Policy.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters is located in Framingham, Massachusetts, where we occupy approximately 23,000 square feet under a lease expiring on June 30, 2025.
Biggest changeItem 2. Properties Our corporate headquarters is located in Framingham, Massachusetts, where we occupy approximately 14,200 square feet under a lease expiring on October 31, 2029.
We also own 183 small-scale renewable energy plants throughout North America and two in Ireland, which are located on sites we own or lease, or sites provided by customers. We expect to add new facilities and expand existing facilities as we continue to add employees and expand our business into new geographic areas.
We also own 207 small-scale renewable energy plants throughout North America and two in Ireland, which are located on sites we own or lease, or sites provided by customers. We expect to add new facilities and expand existing facilities as we continue to add employees and expand our business into new geographic areas.
We occupy regional offices in Phoenix, Arizona; Oak Brook, Illinois; Portland, Maine; Columbia, Maryland; Charlotte, North Carolina; Knoxville, Tennessee; Renton, Washington, Richmond Hill, Ontario; London, England; and Milan, Italy each less than 20,000 square feet, under lease agreements. In addition, we lease space, typically of lesser size, for 49 field offices throughout North America and Europe.
We occupy regional offices in Phoenix, Arizona; Oak Brook, Illinois; Portland, Maine; Columbia, Maryland; Charlotte, North Carolina; Knoxville, Tennessee; Richmond Hill, Ontario; London, England; and Milan, Italy each less than 20,000 square feet, under lease agreements. In addition, we lease space, typically of lesser size, for 50 field offices throughout North America and Europe.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES 26 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 26 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 29 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 40 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 42
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 26 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 26 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 28 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 40 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 42

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following graph compares the cumulative total return attained by our Class A common shareholders with the Russell 2000 index and the NASDAQ Clean Edge Green Energy index. The information presented assumes an investment of $100 on 26 Table of Contents December 31, 2018 and that all dividends were reinvested.
Biggest changeThe information presented assumes an investment of $100 on December 31, 2019 and that all dividends were reinvested.
Issuer Purchases of Equity Securities We did not repurchase any shares of our common stock under our stock repurchase program authorized by the Board of Directors on April 27, 2016 (the “Repurchase Program”) during the year ended December 31, 2023.
Issuer Purchases of Equity Securities We did not repurchase any shares of our common stock under our stock repurchase program authorized by the Board of Directors on April 27, 2016 (the “Repurchase Program”) during the year ended December 31, 2024.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our Class A common stock trades on the New York Stock Exchange under the symbol “AMRC”. As of February 23, 2024, and according to the records of our transfer agent, there were 11 shareholders of record of our Class A common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our Class A common stock trades on the New York Stock Exchange under the symbol “AMRC”. As of February 24, 2025, and according to the records of our transfer agent, there were 11 shareholders of record of our Class A common stock.
As of December 31, 2023, there were shares having a dollar value of approximately $5.9 million that may yet be purchased under the Repurchase Program. 27 Table of Contents Under the Repurchase Program, we are authorized to repurchase up to $17.6 million of our Class A common stock.
As of December 31, 2024, there were shares having a dollar value of approximately $5.7 million that may yet be purchased under the Repurchase Program. 27 Table of Contents Under the Repurchase Program, we are authorized to repurchase up to $17.6 million of our Class A common stock.
Stock Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.
Stock Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing. 26 Table of Contents The following graph compares the cumulative total return attained by our Class A common shareholders with the Russell 2000 index and the NASDAQ Clean Edge Green Energy index.
The graph shows the value that each of these investments would have had at the end of each year. 12/31/2018 12/31/2019 12/30/2020 12/30/2021 12/30/2022 12/31/2023 Ameresco, Inc. $100.00 $124.11 $370.50 $577.59 $405.25 $224.61 Russell 2000 Index $100.00 $125.52 $150.58 $172.90 $137.56 $160.85 NASDAQ Clean Edge Green Energy Index $100.00 $142.67 $406.35 $395.62 $276.35 $248.97 Shareholder returns over the indicated period should not be considered indicative of future shareholder returns.
The graph shows the value that each of these investments would have had at the end of each year. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Ameresco, Inc. $100.00 $298.51 $465.37 $326.51 $180.97 $134.17 Russell 2000 Index $100.00 $119.96 $137.74 $109.59 $128.14 $142.93 NASDAQ Clean Edge Green Energy Index $100.00 $284.83 $277.30 $193.70 $174.51 $141.58 Shareholder returns over the indicated period should not be considered indicative of future shareholder returns.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAll financial result comparisons are against the prior year period. • Revenue: total revenues decreased primarily due to a $480.0 million, or 32%, decrease in our project revenue attributed to the timing of revenue recognized based upon costs incurred to date relative to total expected costs on active projects, including our SCE battery storage project. 32 Table of Contents • Cost of Revenues and Gross Profit: the decrease in cost of revenues is primarily due to the decrease in project revenues described above, however, our gross profit as a percent of revenues increased due to the lower revenue contribution from our lower margin, design-build SCE battery storage project. • Selling, General and Administrative Expenses: the increase is primarily due to higher professional fees of $2.5 million, higher project development fees of $2.1 million, partially offset by lower net salaries and benefits of $4.6 million as a result of a decrease in non-cash stock-based compensation expense. • Asset Impairments: This year includes impairment charges of $1.6 million recorded in 2023 related to two of our landfill gas to energy assets, and a goodwill impairment charge of $2.2 million related to one of our reporting units. • Other Expenses, Net: Other expenses, net, includes gains and losses from derivatives transactions, foreign currency transactions, interest expense, interest income, amortization of financing costs and certain government incentives.
Biggest changeAll financial result comparisons are against the prior year period. • Revenue: total revenues increased primarily due to a $337.4 million, or 34%, increase in our project revenue attributed to the timing of revenue recognized based upon costs incurred to date relative to total expected costs on active projects. • Cost of Revenues and Gross Profit: the increase in cost of revenues is primarily due to the increased project revenues described above, however, our gross profit as a percent of revenues decreased primarily due to cost overruns on two large-scale legacy projects and a mix of lower-margin projects. • Earnings from Unconsolidated Entities: the decrease in earnings from unconsolidated entities is due to the sale of one of our equity method investments during the first quarter of 2024. • Gain on Sale of Business, Net: in 2024, we divested an energy technology and advisory services company and recognized a gain of $38.0 million, net of transaction expenses. 31 Table of Contents • Selling, General and Administrative Expenses: the increase is primarily due to higher net salaries and benefits of $8.3 million, of which $3.8 million is from increased non-cash stock-based compensation expense, higher insurance of $1.6 million and occupancy costs of $1 million, partially offset by a decrease in professional fees of $2.0 million. • Asset Impairments: This year includes long-lived asset impairment charges of $12.4 million recorded in 2024 primarily related to one of our landfill gas to energy assets and solar panels purchased under the IRS safe harbor provisions for renewable energy projects.
We currently plan additional financings of $300.0 million to $350.0 million in 2024 to fund the construction or acquisition of new renewable energy plants as discussed above. We may also, from time to time, finance our operations through issuance or offering of equity or debt securities.
We currently plan additional financings of $300.0 million to $350.0 million in 2025 to fund the construction or acquisition of new renewable energy plants as discussed above. We may also, from time to time, finance our operations through issuance or offering of equity or debt securities.
These audits can 39 Table of Contents involve complex issues and may require an extended period of time to resolve. We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position.
These audits can involve complex issues and may require an extended period of time to resolve. We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position.
At this point, we also determine the subcontractor, what equipment will be used, and assist in arranging for third party financing, as applicable. Recently, awarded projects have been taking an average of 12 31 Table of Contents to 24 months to result in a signed contract and convert to fully-contracted backlog.
At this point, we also determine the subcontractor, what equipment will be used, and assist in arranging for third party financing, as applicable. Recently, awarded projects have been taking an average of 12 to 24 months to result in a signed contract and convert to fully-contracted backlog.
Adjustments to income tax expense to the extent we establish a valuation allowance or adjust this allowance in a period could have a material impact on our financial condition and results of operations. Recent Accounting Pronouncements See Note 2 of the “Notes to Consolidated Financial Statements” for a discussion of recent accounting standards.
Adjustments to income tax expense to the extent we establish a valuation allowance or adjust this allowance in a period could have a material impact on our financial condition and results of operations. Recent Accounting Pronouncements See Note 2 of the “Notes to Consolidated Financial Statements” for a discussion of recent accounting standards. 39 Table of Contents
We provide solutions primarily throughout the U.S., Canada, and Europe, and our revenues are derived principally from energy efficiency projects, which entail the design, engineering, and installation of equipment and other measures that incorporate a range of innovative technology and techniques to improve the efficiency and control the operation of a facility’s energy infrastructure; this can include designing and constructing a central plant or cogeneration system for a customer providing power, heat and/or cooling to a building, or other small-scale plant that produces electricity, gas, heat or cooling from renewable sources of energy.
We provide solutions primarily throughout North America and Europe, and our revenues are derived principally from energy efficiency projects, which entail the design, engineering, and installation of equipment and other measures that incorporate a range of innovative technology and techniques to improve the efficiency and control the operation of a facility’s energy infrastructure; this can include designing and constructing a central plant or cogeneration system for a customer providing power, heat and/or cooling to a building, or other small-scale plant that produces electricity, gas, heat or cooling from renewable sources of energy.
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.
See 30 Table of Contents “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.
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.
If we fail to come to an agreement with SCE about the applicability and scope of force 29 Table of Contents 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.
The portion related to spending for EaaS assets was approximately $399.8 million and $36.4 million at December 31, 2023 and 2022, respectively. These are also important metrics because they help us gauge our future capacity to generate electricity or deliver renewable gas fuel which contributes to our recurring revenue stream.
The portion related to spending for EaaS assets was approximately $538.4 million and $399.8 million at December 31, 2024 and 2023, respectively. These are also important metrics because they help us gauge our future capacity to generate electricity or deliver renewable gas fuel which contributes to our recurring revenue stream.
We expect to incur additional expenditures in connection with the following activities: • equity investments, energy project asset acquisitions and business acquisitions that we may fund from time to time 34 Table of Contents • capital investment in current and future energy assets • material, equipment, and other expenditures for large projects We regularly monitor and assess our ability to meet funding requirements.
We expect to incur additional expenditures in connection with the following activities: • equity investments, project asset acquisitions, and business acquisitions that we may fund from time to time • capital investment in current and future energy assets • material, equipment, and other expenditures for large projects We regularly monitor and assess our ability to meet funding requirements.
Based on our assessment during the year ended December 31, 2023, one reporting unit had a fair value that was 2% less than the carrying value and we recorded a $1,644 goodwill impairment, which was $2,222 net of tax and was primarily driven by a decline in projected cash flows, including revenues and profitability.
During the year ended December 31, 2023, one reporting unit had a fair value that was 2% less than the carrying value and we recorded a $1,644 goodwill impairment, which was $2,222 net of tax and was primarily driven by a decline in projected cash flows, including revenues and profitability.
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. For example, recent increases in inflation and interest rates have impacted overall market returns on assets.
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.
Any increase or decrease in estimated costs to complete a performance obligation without a corresponding change to the contract price could impact the calculation of cumulative revenue to date and gross profit on the 38 Table of Contents project.
Any increase or decrease in estimated costs to complete a performance obligation without a corresponding change to the contract price could impact the calculation of cumulative revenue to date and gross profit on the project.
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 $154.3 million during the year ended December 31, 2023 and are recorded as financing cash inflows.
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 $164.8 million during the year ended December 31, 2024 and are recorded as financing cash inflows.
We estimate the total consideration payable by the customer when the contracts contain variable consideration provisions, based on the most likely amount anticipated to be recognized for transferring the promised goods or services.
We estimate the total consideration payable by the customer when the contracts contain variable consideration provisions, based on the most likely amount anticipated to be recognized for transferring the 37 Table of Contents promised goods or services.
In addition, our unrecognized stock-based compensation expense decreased from $46.7 million at December 31, 2022 to $30.1 million at December 31, 2023, and is expected to be recognized over a weighted-average period of two years. See Note 14 “Stock-based Compensation and Other Employee Benefits” for additional information.
In addition, our unrecognized stock-based compensation expense decreased from $30.1 million at December 31, 2023 to $28.0 million at December 31, 2024, and is expected to be recognized over a weighted-average period of two years. See Note 14 “Stock-based Compensation and Other Employee Benefits” for additional information.
Our results of operations for the year-ended December 31, 2023 reflect a year-over-year decline in terms of revenues, operating income, and net income attributable to common shareholders.
Our results of operations for the year-ended December 31, 2024 reflect a year-over-year increase in terms of revenues, operating income, and net income attributable to common shareholders.
Liquidity and Capital Resources Overview Since inception, we have funded operations primarily through cash flow from operations, advances from Federal ESPC projects, our senior secured credit facility, and various forms of other debt (see “Project Financing” below).
Liquidity and Capital Resources Overview 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 “Energy Asset Financing” below).
During the year ended December 31, 2023, we were impacted by supply chain disruptions and varying levels of inflation, as a result macroeconomic conditions, causing delays in the timely delivery of material to customer sites and delays and disruptions in the completion of certain projects, including those pursuant to the SCE Agreement, and increased shipping and transportation costs, as well as increased component and labor costs.
During the year ended December 31, 2024, we were impacted by supply chain disruptions and varying levels of inflation, as a result macroeconomic conditions, causing delays in the timely delivery of material to customer sites and delays and disruptions in the completion of certain project, and increased shipping and transportation costs, as well as increased component and labor costs.
Impairment Assessments We evaluate our long-lived assets, including goodwill and intangible assets, for impairment as events or changes in circumstances indicate the carrying value of these assets may not be fully recoverable, and at least annually (fourth quarter) for goodwill and intangible assets that have indefinite lives.
Impairment Assessments We evaluate our long-lived assets, including goodwill and intangible assets, for impairment as events or changes in circumstances indicate the carrying value of these assets may not be fully recoverable, and at least annually (fourth quarter) for goodwill and intangible assets that have indefinite lives. In 2023, we changed the assessment date from December 31st to October 31st.
The use of the cash received under these arrangements is to pay project costs classified as operating cash flows and totaled $260.4 million during the year ended December 31, 2023.
The use of the cash received under these arrangements is to pay project costs classified as operating cash flows and totaled $158.9 million during the year ended December 31, 2024.
This negatively impacted our results of operations during the year ended December 31, 2023. We expect the trends of supply chain challenges to continue beyond this year. 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. In August 2023, the U.S.
This negatively impacted our results of operations during the year ended December 31, 2024. We expect to experience continued supply chain challenges beyond this year. 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.
Assets in Development Assets in development, which represents the potential design/build project value of small-scale renewable energy plants that have been awarded or for which we have secured development rights, were estimated at $2,445.9 million as of December 31, 2023, including $89.8 million attributable to a non-controlling interest, and $1,625.7 million as of December 31, 2022.
Assets in Development Assets in development, which represents the potential design/build project value of small-scale renewable energy plants that have been awarded or for which we have secured development rights, were estimated at $2.3 billion as of December 31, 2024, and $2.4 billion, including $90 million attributable to a non-controlling interest, as of December 31, 2023.
Significant judgment is required in determining income tax expense, deferred tax assets and liabilities and uncertain tax positions. The underlying assumptions are also highly susceptible to change from period to period.
Income Taxes We are subject to income taxes in the U.S. and six foreign jurisdictions. Significant judgment is required in determining income tax expense, deferred tax assets and liabilities and uncertain tax positions. The underlying assumptions are also highly susceptible to change from period to period.
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 lithium-ion battery cells, semiconductors, and other components required for our clean energy solutions may continue or become more pronounced.
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 28 Table of Contents 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.
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.
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. Divestiture of a Business On December 31, 2024, we completed the sale of a business.
These financings totaled $533.1 million in principal amounts as of December 31, 2023 and $478.5 million as of December 31, 2022.
These financings totaled $555.4 million in principal amounts as of December 31, 2024 and $533.1 million as of December 31, 2023.
The adjusted purchase price for phase 1 was $88.0 million, of which $5.0 million was paid in cash, $46.7 million was financed through a seller’s note, and we assumed a construction loan on the energy asset project for $36.3 million. We are in process of converting the construction loan to a term loan. We also received cash of $11.2 million.
The adjusted purchase price for phase 1 was $88.0 million, of which $5.0 million was paid in cash, $46.7 million was financed through a seller’s note, and we assumed a construction loan on the energy asset project for $36.3 million. The construction loan was converted to a term loan in February 2024 and has a maturity date of April 2030.
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. During 2022, we entered into joint venture arrangements in Greece and California and acquired an operating wind farm in Ireland.
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.
Basic earnings per share for 2023 was $1.20, a decrease of $0.63 per share compared to 2022. Diluted earnings per share for 2023 was $1.17, a decrease of $0.61 per share, compared to 2022. Business Segment Analysis Our reportable segments for the year ended December 31, 2023 were U.S. Regions, U.S. Federal, Canada, Alternative Fuels, and Europe.
Basic earnings per share for 2024 was $1.08, a decrease of $0.12 per share compared to 2023. Diluted earnings per share for 2024 was $1.07, a decrease of $0.10 per share, compared to 2023. Business Segment Analysis Our reportable segments for the year ended December 31, 2024 were North America Regions, U.S. Federal, Europe, and Renewable Fuels (formerly Alternative Fuels).
One reporting unit with goodwill had an estimated fair value that exceeded its carrying value by 16%. All other reporting units with goodwill had estimated fair values that exceeded their carrying values by at least 65% as of December 31, 2023. Income Taxes We are subject to income taxes in the U.S. and five foreign jurisdictions.
One reporting unit with goodwill had an estimated fair value that exceeded its carrying value by 16%. All other reporting units with goodwill had estimated fair values that exceeded their carrying values by at least 65% as of December 31, 2023.
We also agreed to sell back to the seller investment tax credits for the project acquired as part of this transaction for the fair market value of these credits and we received $21.0 million in January 2024 for the transfer of these credits. In addition, we assumed a land lease for the energy asset project.
We sold back to the seller ITCs for the project acquired as part of this transaction for the fair market value of these credits and we received $21.0 million in early 2024 for the transfer of these credits. In addition, we assumed a land lease for the energy asset project. See Note 8 “Leases” for additional information on the lease.
Material energy asset construction and term loan financings during the year ended December 31, 2023 were as follows: • March 2023 Construction Credit Facility, 2.00% - we entered into a credit agreement for a construction facility with a total commitment of CAD$100.0 million and as of December 31, 2023, no funds were drawn under this facility. • April 2023 Construction Credit Facility, 6.82%, due July 1, 2024 - one of our consolidated joint venture subsidiaries (“JV”) entered into a construction loan agreement with two lenders for a principal amount of up to $140.8 million under an energy asset credit facility.
Other than what is included above, significant financings during the year ended December 31, 2024 were as follows: • April 2023, 6.82%, due July 31, 2024 - one of our consolidated joint venture subsidiaries (“JV”) entered into a construction loan agreement with two lenders for a principal amount of up to $140.8 million under an energy asset credit facility.
This deduction is related to energy-efficient improvements we provide under government contracts. The Consolidated Appropriations Act, 2021 made permanent the Section 179D Energy Efficient Commercial Building Deduction. That Act made changes to the way the deduction is calculated.
This deduction is related to energy-efficient improvements we provide under government contracts. The Consolidated Appropriations Act, 2021 made permanent the Section 179D Energy Efficient Commercial Building Deduction. That Act made changes to the way the deduction is calculated. If those changes result in lower levels of energy efficiency improvements, it could impact the deduction available and the tax rate.
Selected Measures of Liquidity and Capital Resources December 31, (In Thousands) 2023 2022 Cash and cash equivalents $ 79,271 $ 115,534 Working capital $ 227,000 $ 189,283 Availability under revolving credit facility $ 37,489 $ 345 Cash Flows The following table summarizes our changes in cash, cash equivalents, and restricted cash: Year Ended December 31, (In Thousands) 2023 2022 Cash flows used in operating activities $ (69,991) $ (338,288) Cash flows used in investing activities (566,943) (328,358) Cash flows provided by financing activities 640,803 730,227 Effect of exchange rate changes on cash (81) (747) Net increase (decrease) in cash, cash equivalents, and restricted cash $ 3,788 $ 62,834 Our service offering also includes the development, construction, and operation of small-scale renewable energy plants.
Selected Measures of Liquidity and Capital Resources December 31, (In Thousands) 2024 2023 Cash and cash equivalents $ 108,516 $ 79,271 Working capital $ 412,126 $ 227,000 Availability under revolving credit facility $ 21,099 $ 37,489 Cash Flows The following table summarizes our changes in cash, cash equivalents, and restricted cash: Year Ended December 31, (In Thousands) 2024 2023 Cash flows from operating activities $ 117,598 $ (69,991) Cash flows from investing activities (386,637) (566,943) Cash flows from financing activities 313,944 640,803 Effect of exchange rate changes on cash (203) (81) Net increase in cash, cash equivalents, and restricted cash $ 44,702 $ 3,788 36 Table of Contents Our service offering also includes the development, construction, and operation of small-scale renewable energy plants.
We currently plan to invest approximately $350.0 million to $400.0 million in capital investments in 2024, principally for the construction or acquisition of new renewable energy plants.
As noted above, we sold a business in December 2024 and received net proceeds of $54.2 million, We currently plan to invest approximately $350.0 million to $400.0 million in capital investments in 2025, principally for the construction or acquisition of new renewable energy plants.
The IRA may increase the competition in our industry and as such increase the demand and cost for labor, equipment and commodities needed for our projects. 29 Table of Contents Supply Chain Disruptions and Other Global Factors We continue to monitor the impact of global economic conditions on our operations, financial results, and liquidity, including the result of supply chain challenges, war in Ukraine and the Middle East, evolving relations between the U.S. and China, and other geopolitical tensions.
Supply Chain Disruptions and Other Global Factors 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.
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 transactions, tax equity transfers, and our general access to credit and equity markets, will be sufficient to fund our operations through at least February 2025.
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 February 2026. 33 Table of Contents 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.
Cash Flows from Financing Activities Our primary sources of financing during 2023 were proceeds of $843.5 million from long-term debt financings and construction revolvers, $168.9 million from advances on Federal ESPC projects and energy assets, partially offset by repayments of long-term debt totaling $303.1 million, net payments on our senior secured revolving credit facility of $43.0 million, and distributions to non-controlling interests of $21.8 million.
During 2023, we received net proceeds of $843.5 million from long-term energy asset debt financings, $168.9 million from advances on Federal ESPC projects and energy assets, partially offset by repayments of long-term corporate debt of $155.0 million, repayments of energy asset debt totaling $148.1 million, and net payments on our senior secured revolving credit facility of $43.0 million.
Senior Secured Credit Facility — Revolver and Term Loans During the year ended December 31, 2023, we entered into three amendments to our fifth amended and restated senior secured credit facility, which extended the maturity date of our delayed draw term loan A, resulted in $155.0 million paid for the year ended December 31, 2023, $10.0 million due and paid on January 31, 2024 and February 14, 2024, and $10.0 million due on March 31, 2024.
Senior Secured Credit Facility — Revolver and Term Loans During the year ended December 31, 2024, we entered into a number of amendments to our fifth amended and restated senior secured credit facility (the “Senior Secured Credit Facility”) , which extended the maturity date of our delayed draw term loan A (“DDTLA”).
The following table presents our backlog: As of December 31, (In Thousands) 2023 2022 Project Backlog (1) Fully-contracted backlog $ 1,323,742 $ 1,001,325 Awarded, not yet signed customer contracts 2,555,197 1,638,640 Total project backlog $ 3,878,939 $ 2,639,965 12-month project backlog $ 718,577 $ 595,020 (1) Project backlog net of minority interests O&M Backlog Fully-contracted backlog $ 1,221,661 $ 1,231,120 12-month O&M backlog $ 88,930 $ 89,520 Total project backlog represents energy efficiency projects that are active within our sales cycle.
The following table presents our backlog: As of December 31, (In Thousands) 2024 2023 Project Backlog (1) Fully-contracted backlog $ 2,544,304 $ 1,323,742 Awarded, not yet signed customer contracts 2,274,012 2,555,197 Total project backlog $ 4,818,316 $ 3,878,939 12-month project backlog $ 1,145,729 $ 718,577 (1) Project backlog net of non-controlling interests O&M Backlog Fully-contracted backlog $ 1,378,087 $ 1,221,661 12-month O&M backlog $ 98,734 $ 88,930 Total project backlog represents energy efficiency projects that are active within our sales cycle, either full-contracted or awarded.
The remaining $32.5 million was financed by a seller’s note accruing interest of 5.0% and is payable in August 2024. We may be required to make additional contingent payments for this acquisition based on certain projects achieving commercial operation and if the projects qualify for higher energy tax credits than expected.
We may be required to make additional contingent payments for this acquisition based on certain projects achieving commercial operation and if the projects qualify for higher energy tax credits than expected.
During 2023, we drew down a total of $276.7 million under this facility. As of December 31, 2023, our total construction and term loans outstanding was $1.0 billion. See Note 9 “Debt and Financing Lease Liabilities” for additional information about these loans.
As of December 31, 2024, our total energy asset construction and operating facilities outstanding was $1.0 billion. See Note 9 “Debt and Financing Lease Liabilities” for additional information about these loans.
Federal: the increase is primarily due to a $8.4 million, or 3%, increase in project revenue attributable to the timing of revenue recognized as a result of the phase of active projects compared to the prior year and a $1.6 million, or 3%, increase in O&M revenue. • Canada: the increase is primarily due to higher project revenues which were partially offset by unfavorable foreign exchange rates. 33 Table of Contents • Alternative Fuels: the increase is primarily due to a $2.3 million, or 2%, increase in energy asset revenues resulting from the continued growth of our operating portfolio, increased production levels and more favorable pricing on renewable identification numbers (“RIN’s”) generated from our renewable natural gas facilities. • Europe: revenues increased year-over-year primarily due to higher project revenue of $85.1 million, or 158%, resulting from increased overall activity which included revenues of $52.2 million related to the acquisition of Enerqos earlier in 2023 and increased revenues in Greece of $28.3 million. • All Other: All other revenues is consistent with the prior year.
Federal: the decrease is primarily due to a $48.2 million, or 14%, decrease in project revenue attributable to the timing of revenue recognized as a result of the phase of active projects compared to the prior year, partially offset by increases of $11.1 million in energy asset revenue and $6.6 million in O&M revenue. • Renewable Fuels: the increase is primarily due to higher project revenues of $43.4 million and a $15.6 million 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. 32 Table of Contents • Europe: revenues increased primarily due to higher project revenue of $100.1 million, or 72%, 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. • All Other: All other revenues were higher primarily due to increased consulting revenue.
Stock-based Compensation During the year ended December 31, 2023, we granted 170,000 common stock options to certain employees and 66,247 restricted stock units to our employees and non-employee directors under our 2020 Stock Incentive Plan. Our stock-based compensation expense decreased from $15.0 million for the year ended December 31, 2022 to $10.3 million for the year ended December 31, 2023.
Stock-based Compensation During the year ended December 31, 2024, we granted 791,503 common stock options to certain employees and 122,366 restricted stock units (“RSUs”) to our employees and non-employee directors under our 2020 Stock Incentive Plan.
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.
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”).
Results of Operations The following table sets forth certain financial data from the consolidated statements of income for the periods indicated (1) : Year Ended December 31, 2023 2022 Year-Over-Year Change (In Thousands) Dollar Amount % of Revenues Dollar Amount % of Revenues Dollar Change % Change Revenues $ 1,374,633 100.0 % $ 1,824,422 100.0 % $ (449,789) (24.7) % Cost of revenues 1,128,204 82.1 % 1,533,589 84.1 % (405,385) (26.4) % Gross profit 246,429 17.9 % 290,833 15.9 % (44,404) (15.3) % Earnings from unconsolidated entities 1,758 0.1 % 1,647 0.1 % 111 6.7 % Selling, general and administrative expenses 162,138 11.8 % 159,488 8.7 % 2,650 1.7 % Asset impairments 3,831 0.3 % — — % 3,831 100.0 % Operating income 82,218 6.0 % 132,992 7.3 % (50,774) (38.2) % Other expenses, net 43,949 3.2 % 27,273 1.5 % 16,676 61.1 % Income before income taxes 38,269 2.8 % 105,719 5.8 % (67,450) (63.8) % Income tax (benefit) provision (25,635) (1.9) % 7,170 0.4 % (32,805) 457.5 % Net income $ 63,904 4.6 % $ 98,549 5.4 % $ (34,645) (35.2) % Net income attributable to non-controlling interest and redeemable non-controlling interest $ (1,434) (0.1) % $ (3,623) (0.2) % $ (2,189) (60.4) % Net income attributable to common shareholders $ 62,470 4.5 % $ 94,926 5.2 % $ (32,456) (34.2) % (1) A comparison of our 2022 and 2021 results can be found in Item 7 of our 2022 Form 10-K filed with the SEC.
Results of Operations The following table sets forth certain financial data from the consolidated statements of income for the periods indicated (1) : Year Ended December 31, 2024 2023 Year-Over-Year Change (In Thousands) Dollar Amount % of Revenues Dollar Amount % of Revenues Dollar Change % Change Revenues $ 1,769,928 100.0 % $ 1,374,633 100.0 % $ 395,295 28.8 % Cost of revenues 1,513,837 85.5 % 1,128,204 82.1 % 385,633 34.2 % Gross profit 256,091 14.5 % 246,429 17.9 % 9,662 3.9 % Selling, general and administrative expenses 173,761 9.8 % 162,138 11.8 % 11,623 7.2 % Gain on sale of business, net 38,007 2.1 % — — % 38,007 100.0 % Asset impairments 12,384 0.7 % 3,831 0.3 % 8,553 223.3 % Earnings from unconsolidated entities 792 — % 1,758 0.1 % (966) (54.9) % Operating income 108,745 6.1 % 82,218 6.0 % 26,527 32.3 % Interest and other expenses, net 74,805 4.2 % 43,949 3.2 % 30,856 70.2 % Income before income taxes 33,940 1.9 % 38,269 2.8 % (4,329) (11.3) % Income tax benefit (20,000) (1.1) % (25,635) (1.9) % (5,635) (22.0) % Net income $ 53,940 3.0 % $ 63,904 4.6 % $ (9,964) (15.6) % Net loss (income) attributable to non-controlling interest and redeemable non-controlling interest $ 2,817 0.2 % $ (1,434) (0.1) % $ (4,251) (296.4) % Net income attributable to common shareholders $ 56,757 3.2 % $ 62,470 4.5 % $ (5,713) (9.1) % (1) A comparison of our 2023 and 2022 results can be found in Item 7 of our 2023 Form 10-K filed with the SEC.
We do not allocate any indirect expenses to the segments. Corporate activity improved primarily due to lower net salaries and benefit costs of $4.7 million, related to a decrease in non-cash stock-based compensation expense, and higher interest income partially offset by higher interest expense of $3.2 million.
We do not allocate any indirect expenses to the segments. Corporate expenses increased primarily due higher interest expense, net of $11.1 million, higher net salaries and benefit costs of $7.6 million, including an increase in non-cash stock-based compensation expense of $3.8 million, and foreign currency transaction losses of $2.5 million versus gains of $0.5 million last year.
We acquired the remaining interest in this JV in January 2024 when we closed on the acquisition of BCE. • August 2023 Construction Credit Facility, 9.34%, due August 31, 2026 - we entered into a construction and development loan agreement which provides a loan in a principal amount of up to $300.0 million.
See “August 2024 Master Sale-leaseback” below. • August 2023, 8.53%, due August 31, 2026 - we entered into a construction and development loan agreement, which provides a loan in a principal amount of up to $300.0 million.
Income before Income Taxes and Unallocated Corporate Activity Year Ended December 31, Year-Over-Year Change (In Thousands) 2023 2022 Dollar Change % Change U.S. Regions $ 38,746 $ 88,531 $ (49,785) (56.2) % U.S.
Income (Loss) before Income Taxes and Unallocated Corporate Activity Year Ended December 31, Year-Over-Year Change (In Thousands) 2024 2023 Dollar Change % Change North America Regions $ 40,903 $ 40,869 $ 34 0.1 % U.S.
At the closing, we drew down $200.0 million under this facility, of which approximately $187.0 million was used to reimburse Ameresco for development and construction costs. Subsequent to closing, we drew down an additional $78.9 million. The loan contains a one-year extension option that can be exercised if certain circumstances are met, including payment of a $3.0 million extension fee.
At the closing, we drew down $200.0 million under this facility, of which approximately $187.0 million was used to reimburse Ameresco for development and construction costs.
Other expenses, net increased primarily due to higher interest expenses, net of interest income of $9.7 million related to increased levels of project debt, a higher average balance on our senior secured debt facility, factoring fees in Italy of $5.8 million, and a decrease in government incentives received of $2.0 million. • Income before Income Taxes: the decrease is due to reasons described above. • Income Tax Expense (Benefit): the provision 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.
Interest and other expenses, net increased primarily due to higher interest expenses, net of interest income of $28.9 million related to increased levels of project debt and higher rate paid on our second lien term loan, and foreign currency transaction losses of $3.8 million versus gains of $0.6 million last year. • 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 generated tax credits and differences between financial accounting and tax reporting requirements.
The debt raise, if successful, would be used to repay outstanding amounts on the senior secured credit facility. 35 Table of Contents Energy Asset Financing Energy Asset Construction Facilities, Financing Facilities, and Term Loans We have entered into a number of construction and term loan agreements for the purpose of constructing and owning certain renewable energy plants.
Energy Asset Financing Energy Asset Construction and Operating Facilities, Sale-leasebacks, and Financing Leases We have entered into a number of construction and term loan agreements for the purpose of constructing and owning certain renewable energy plants.
Federal: the decrease is due primarily to higher interest expense. • Canada: the increase is primarily due to the increase in project revenues described above partially offset by higher project development costs. • Alternative Fuels: the decrease is primarily due to higher direct costs related to unplanned downtime, higher interest expense, higher depreciation expense related to the timing of assets placed in operations and impairment charges recorded in 2023 related to two of our landfill gas to energy assets. • Europe: the decrease is primarily due to factoring fees of $5.8 million, increased salaries and benefits, net, and depreciation and amortization as a result of the acquisition of Enerqos, partially offset by the increased revenues noted above. • All Other: the decrease is primarily due to increased salaries and benefits, net. • Unallocated corporate activity includes all corporate level selling, general and administrative expenses and other expenses not allocated to the reportable segments.
Federal: the decrease is due primarily to the decreased revenues described above, higher interest expense, net of $3.6 million and lower earnings from unconsolidated entities of $1.1 million. • Renewable Fuels: the decrease is primarily due to higher asset impairment charges of $7.6 million on one of our landfill gas to energy assets and higher interest expense of $9.5 million, partially offset by the higher revenues described above. • Europe: the decrease is primarily due to a higher mix of lower-margin projects, increased salaries and benefits, net, and higher interest expense, partially offset by decreased bank discount fees. • All Other: the increase is primarily due to a gain of $38.0 million on the sale of business, net and increased consulting revenue. • Unallocated corporate activity includes all corporate level selling, general and administrative expenses and other expenses not allocated to the reportable segments.
The obligations under the loan are guaranteed by all the related subsidiaries and are secured by the subsidiaries’ assets as well as our equity interest in the borrower entity and in the case of default under the facility, a default under our Senior Secured Credit Facility or a change in control of Ameresco, Inc., we are required to make capital contributions to the borrower entity who then would be required to use the proceeds from the capital contributions to repay the construction and development loan. • October 2022 Financing Facility, 6.70%, due August 31, 2039 - during 2023, we entered into an amendment and an amended and restated loan agreement that increased the original commitment of $125.0 million to $500.0 million, increased the interest rate to 6.70% and changed the maturity date to August 31, 2039.
In the case of default under the facility, a default under our Senior Secured Credit Facility or a change in control of Ameresco, Inc., we are required to make capital contributions to the borrower entity who then would be required to use the proceeds from the capital contributions to repay the construction and development loan.
Cash Flows from Investing Activities During 2023, we made capital investments of $538.4 million in new energy assets and $7.6 million in major maintenance of energy assets, compared to $304.6 million and $18.0 million, respectively, in 2022. This year we paid $9.2 million, net of cash received, for an acquisition and also contributed $6.0 million to joint venture investments.
These were partially offset by decreased cash flows of $149.5 million from accounts receivable. Cash Flows from Investing Activities During 2024, we made capital investments of $417.0 million in new energy assets and $17.1 million in major maintenance of energy assets, compared to $538.4 million and $7.6 million, respectively, in 2023.
As of December 31, 2023, our total sale-leasebacks classified as long-term financing facilities outstanding was $185.7 million. As of December 31, 2023, our total financing leases outstanding was $13.9 million.
As of December 31, 2024, our total sale-leasebacks classified as long-term financing facilities outstanding was $399.4 million. As of December 31, 2024, our total financing leases outstanding was $12.9 million. These are our sale-leaseback arrangements entered into as of December 31, 2018 which remain under the previous guidance.
The tax benefit rate for 2022 was favorable, primarily due to increases in the benefits associated with energy efficiency tax incentives, including Section 48 Solar Investment Tax Credits, deductions associated with the Section 179D Commercial Buildings Energy Efficiency Tax Deduction, and compensation deductions resulting from employee stock option disqualifying dispositions. • Net Income and Earnings Per Share: Net income attributable to common shareholders decreased due to the reasons described above.
Treasury regulations related to renewable gas projects. The tax benefit for 2023 was favorable, primarily due to higher deductions under Section 179D and deferred state tax benefits resulting from reduced state tax rates. • Net Income and Earnings Per Share: Net income attributable to common shareholders decreased due to the reasons described above.
The amendment increased the total funded debt to EBITDA covenant ratio from a maximum of 3.50 to 3.75 for the quarter ending December 31, 2023, and 3.50 thereafter. As of December 31, 2023, the balance on the senior secured credit facility was $279.9 million and we had funds available of $37.5 million.
The overall rate table for all loans under the agreement was also increased by 0.25%. The amendments increased the total funded debt to EBITDA covenant ratio from a maximum of 3.50 to 3.75 for the quarter ending December 31, 2024, and 3.50 thereafter.
These are our sale-leaseback arrangements entered into as of December 31, 2018 which remain under the previous guidance. 36 Table of Contents See Notes 8 “Leases” and 9 “Debt and Financing Lease Liabilities” for additional information on these financing facilities.
See Notes 8 “Leases” and 9 “Debt and Financing Lease Liabilities” for additional information on these financing facilities.
Unforeseen events and changes in circumstances or market conditions could adversely affect these estimates, which could result in an impairment charge.
Unforeseen events and changes in circumstances or market conditions could adversely affect these estimates, which could result in an impairment charge. We had no goodwill impairments for the year ended December 31, 2024 and reporting units with goodwill had estimated fair values that exceeded their carrying values by at least 49%.
During the year ended December 31, 2023, we paid $18.4 million in principal on the seller’s note, the balance of which was paid in January 2024.
We also received cash of $11.2 million. In January 2024 we paid off the remaining balance on the seller’s note in the amount of $29.4 million.
The effective tax rate was lower in 2023 as compared to 2022 primarily due to higher deductions under the Section 179D Energy Efficient Commercial Buildings Deduction for both 2023 under the IRA and for prior periods which were documented and claimed on amended tax returns during 2023, deferred state tax benefits resulting from reduced state tax rates in future periods.
The tax benefit was lower in 2024 as compared to 2023 because we incurred additional tax expense from the deferred effect of an increase in our future effective state tax rates resulting from apportionment changes and the Section 179D Energy Efficient Commercial Buildings Deduction available for 2024 was lower due to the timing of project completions, offset by higher tax credits generated as a result of new U.S.
During 2022, we received net proceeds of $468.5 million from long-term debt financings, $252.7 million from advances on Federal ESPC projects and energy assets, partially offset by repayments of long-term debt totaling $161.9 million.
Cash Flows from Financing Activities Our primary sources of financing during 2024 were proceeds of $643.5 million from energy asset debt financings, $170.8 million from advances on Federal ESPC projects and energy assets, proceeds from the second lien term loan of $100.0 million, contributions from non-controlling interest of $35.4 million, partially offset by repayments of energy asset debt and financing leases totaling $424.4 million, repayments of long-term corporate debt of $127.0 million, and payments on the seller’s promissory note of $61.9 million.
At the closing, the JV drew down $90.9 million for construction of an energy asset and subsequently drew down an additional $43.5 million. The loan will be repaid after the energy asset project achieves provisional acceptance, through a sale-leaseback financing under lease agreements entered into between the same parties, as part of the closing documents.
We acquired the remaining interest in this JV in January 2024 when we closed on the acquisition of BCE. In August 2024, this construction loan was repaid through a sale-leaseback financing under lease agreements entered into between the same parties, as part of the original closing.
The remaining amounts are included in “All Other”. Europe was formerly included in “All Other” but was disaggregated due to growth in the segment in 2023. As a result, previously reported amounts have been reclassified for comparative purposes. See Note 20 “Business Segment Information” for additional information about our segments.
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.
Removed
Overview Ameresco is a leading clean technology integrator with a comprehensive portfolio of energy efficiency and renewable energy supply solutions. We help organizations meet energy saving and energy management challenges with an integrated, comprehensive approach to energy efficiency and renewable energy.
Added
Overview Ameresco is a leading energy solutions provider dedicated to helping customers navigate the energy transition. Our comprehensive portfolio includes implementing smart energy efficiency solutions, upgrading aging infrastructure, and developing, constructing, and operating distributed energy resources.
Removed
Leveraging budget neutral solutions, including ESPCs and PPAs, we aim to eliminate the financial barriers that traditionally hamper energy efficiency and renewable energy projects. Drawing from decades of experience, Ameresco develops tailored energy management projects for its customers in the commercial, industrial, local, state and federal government, K-12 education, higher education, healthcare, public housing sectors, and utilities.
Added
Drawing from decades of experience, Ameresco reduces energy use and delivers diversified generation solutions to Federal, state and local governments, utilities, educational and healthcare institutions, housing authorities, and commercial and industrial customers.
Removed
During 2023, we acquired Enerqos Energy Solutions S.r.l. (“Enerqos”) a renewable energy and energy efficiency company headquartered in Milan, Italy and entered into a joint venture agreement with Bristol City, U.K. to transform the way the city generates, distributes, stores and uses energy.
Added
Key Factors and Trends Regulatory Environment and Federal Policies Federal policies play an important role in our business and our business benefits from regulatory measures and various tax credits, such as the Investment Tax Credit (“ITC”) and the Production Tax Credit (“PTC”) and funds appropriated through the IRA and the IIJA.
Removed
On August 4, 2023, we entered into a purchase and sale agreement to acquire an energy asset project and the ability to acquire 100% of the stock of Bright Canyon Energy Corporation (“BCE”) in a two-phased transaction, exclusive of each other. Phase 1, the purchase of the energy asset project, closed on August 4, 2023.
Added
The scope of these tax credits and the availability of funding through the IRA and IIJA may evolve with the new U.S. administration. Recent presidential executive orders that directed a review and potential termination of funds appropriated through the IRA and the IIJA have resulted in some pauses and cancellations of our projects.
Removed
In the second phase, which closed on January 12, 2024, we acquired BCE, including its interest in one of our consolidated joint ventures and its interests in project subsidiaries developing or with rights to develop solar, battery, and microgrid assets. Key Factors and Trends The Inflation Reduction Act The IRA was signed into law on August 16, 2022.
Added
We also anticipate that federal workforce reductions and other cost savings initiatives may cause additional delays, extend our sales cycles and impact new award activity. However, we continue to believe there is a long-term demand for our budget neutral, cost-saving solutions.
Removed
The bill invests nearly $369 billion in energy and climate policies. The provisions of the IRA are intended to, among other things, incentivize domestic clean energy investment, manufacturing, and deployment. The IRA incentivizes the deployment of clean energy technologies by extending and expanding federal incentives such as the ITC and the Production Tax Credit (“PTC”).
Added
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.
Removed
We view the enactment of the IRA as favorable for the overall business climate for the renewable energy industry.
Added
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed14 unchanged
Biggest changeAs a consequence, gross profit, operating results, profitability, and cash flows are impacted by relative changes in the value of the Canadian dollar and GBP. We have not repatriated earnings from our foreign subsidiaries but have elected to invest in new business opportunities there. See Note 10, “Income Taxes” to our consolidated financial statements in this Report.
Biggest changeAs a consequence, gross profit, operating results, profitability, and cash flows are impacted by relative changes in the value of the CAD, GB and EUR. We have not repatriated 40 Table of Contents earnings from our foreign subsidiaries but have elected to invest in new business opportunities there.
The fair value of these make-whole provisions was determined based on available market data and a with and without model. 40 Table of Contents Our exposure to market interest rate risk is not hedged in a manner that completely eliminates the effects of changing market conditions on earnings or cash flow.
The fair value of these make-whole provisions was determined based on available market data and a with and without model. Our exposure to market interest rate risk is not hedged in a manner that completely eliminates the effects of changing market conditions on earnings or cash flow.
Changes in these rates may have an impact on future cash flows and earnings. We manage these risks through normal operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. Interest Rate Risk We had cash and cash equivalents totaling $79.3 million as of December 31, 2023 and $115.5 million as of December 31, 2022.
Changes in these rates may have an impact on future cash flows and earnings. We manage these risks through normal operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. Interest Rate Risk We had cash and cash equivalents totaling $108.5 million as of December 31, 2024 and $79.3 million as of December 31, 2023.
For the year ended December 31, 2023, due to the weakening of the Canadian dollar and GBP versus the U.S. dollar, our foreign currency translation resulted in a gain of $1.6 million which we recorded as an increase in accumulated other comprehensive income, compared to a loss of $3.4 million for the year ended December 31, 2022.
For the year ended December 31, 2024, due to the weakening of the CAD, GBP, and EUR versus the U.S. dollar, our foreign currency translation resulted in a loss of $3.2 million which we recorded as a decrease in accumulated other comprehensive income, compared to a gain of $1.6 million for the year ended December 31, 2023.
We do not hedge our exposure to foreign currency exchange risk. 41 Table of Contents
See Note 10, “Income Taxes” to our consolidated financial statements in this Report. We do not hedge our exposure to foreign currency exchange risk. 41 Table of Contents

Other AMRC 10-K year-over-year comparisons