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美国
证券交易委员会
华盛顿特区20549
表格 10-Q
(标记一个)
 ☒
根据1934年证券交易法第13或15(d)条款的季度报告。
截至2024年6月30日季度结束 2024年9月30日

或

 ☐
根据1934年证券交易法第13或15(d)条款的过渡报告
为过渡期从 至

委员会文件编号 001-04321

ALTUS POWER, INC.
（依凭章程所载的完整登记名称）
特拉华州
85-3448396
(成立地或组织其他管辖区)
（联邦税号）
2200 大西洋街, 六楼
Stamford,
康涅狄格州
06902
（总部地址）
(邮递区号)
(203)-698-0090
注册人电话号码，包括区码

根据1973年证券交易法第12(b)条规定注册的证券：
每种类别的名称交易标的（s）每个注册交易所的名称
普通A级股票，每股面值$0.0001AMPS纽约证券交易所


以勾号标示注册人：(1) 在过去 12 个月内已提交所有根据 1934 年证券交易法第 13 条或第 15 (d) 条所要求提交的所有报告（或在较短的时间内，注册人须提交该等报告）；及 (2) 过去 90 天内已遵守该等申报要求。是  ☒否☐ 

请用勾选标示该登记人是否已经在其公司网站上以电子形式提交并发布了根据Regulation S-t第405条规定（本章第232.405条）要求在过去12个月内（或要求登记人提交和发布此类文件的较短期间）。是  ☒否☐ 

请打勾表示公司是大型加速递交者、加速递交者、非加速递交者、较小报告公司或新兴成长公司。请参见《交易所法》第120条2款中“大型加速递交者”、“加速递交者”、“较小报告公司”和“新兴成长公司”的定义。（请勾选一项）：
大型加速归档人
☐
加速归档人
☒
非加速报表提交者
☐
小型报告公司
☐
新兴成长型企业
☒
                
如果该企业为新兴成长型企业，请在是否选择不使用证交法第13(a)条所提供之符合任何新的或修订财务会计标准的延长过渡期的方格中打勾。
☐



请勾选表示，公司是否为壳公司（如本法案第1202条所定义）。是☐不是☒



截至2024年11月7日，发行人拥有 159,999,527 普通A类股股票，并且 796,950 类B普通股股份。


目录

3
目录
第一部分. 财务信息
项目1. 基本报表
Altus Power, Inc.
综合损益简明合并报表
(未经审核)
（以千为单位，除股份及每股数据外）
 截至9月30日止三个月期间，截至九月三十日止九个月
 2024202320242023
营业收入，净$58,681 $45,079 $151,800 $120,970 
营业费用
营运成本（不包括下面单独显示的折旧和摊销费用）11,891 7,825 34,083 21,382 
总务及行政9,824 8,194 32,086 23,847 
折旧、摊销和折价摊薄费用17,151 13,719 50,447 38,054 
收购和实体成立成本765 268 2,281 3,128 
对待业负债之公平价值重新衡量（增加）减少，净额(900)50 (2,379)150 
资产处置（亏损）收益— — (88)649 
以股份为基础之报酬支出4,662 4,176 4,739 11,304 
总营业费用$43,393 $34,232 $121,169 $98,514 
营业收入15,288 10,847 30,631 22,456 
其他支出
对齐股责任公平价值变动(10,214)(3,508)(48,172)(23,331)
其他收益（费用），净额210 339 (1,608)1,569 
利息费用，净额21,783 9,180 55,841 30,150 
总其他费用，净额$11,779 $6,011 $6,061 $8,388 
税前收入$3,509 $4,836 $24,570 $14,068 
所得税效益（费用）5,100 1,940 21,243 (77)
净利润$8,609 $6,776 $45,813 $13,991 
本公司净（亏损）利益归属于非控制权益和可赎回非控制权益(9,029)1,446 (16,979)(3,781)
净利润归属于Altus Power, Inc.$17,638 $5,330 $62,792 $17,772 
每股净利润归属于普通股股东
基本$0.11 $0.03 $0.39 $0.11 
稀释$0.11 $0.03 $0.38 $0.11 
用于计算归属于普通股股东每股净利润的加权平均股份
基本159,990,880 158,719,684 159,641,018 158,687,373 
稀释164,393,794 160,198,154 165,720,558 160,965,682 
附注是这些未经审计的简明综合财务报表的一个组成部分。





4
目录

Altus Power, Inc.
综合损益简明合并财务报表
(未经审核)
（以千为单位）
 截至9月30日止三个月期间，截至九月三十日止九个月
 2024202320242023
净利润$8,609 $6,776 $45,813 $13,991 
其他全面收益（损失）
外币翻译调整— — 9 9 
现金流量对冲的未实现盈利（税后）— 8,422 — 11,421 
现金流量对冲的已实现盈利重分类至净利润(433)— (1,270)— 
其他综合收益（税后净额损失）$(433)$8,422 $(1,261)$11,430 
累计综合收益$8,176 $15,198 $44,552 $25,421 
归属于非控股和可赎回非控股权益的综合（亏损）收益(9,029)1,446 (16,979)(3,781)
Altus Power, Inc.归属的综合收益$17,205 $13,752 $61,531 $29,202 
附注是这些未经审计的简明综合财务报表的一个组成部分。
5
目录
Altus Power, Inc.
缩短的合并资产负债表
(未经审核)
（以千为单位，除股份及每股数据外）
 
截至2024年9月30日
截至2023年12月31日
资产
流动资产:
现金及约当现金$96,899 $160,817 
受限现金的当前部分1,334 45,358 
应收帐款净额34,326 17,100 
其他流动资产6,211 5,522 
全部流动资产138,770 228,797 
限制性现金，非流动部分13,094 12,752 
不动产、厂房及设备净值1,835,399 1,619,047 
无形资产，扣除累计摊销49,169 47,588 
营业租赁资产183,677 173,804 
衍生金融资产— 530 
递延税款资产，净额12,303 — 
其他资产7,663 7,831 
资产总额$2,240,075 $2,090,349 
负债、可赎回非控制权益和股东权益
流动负债：
应付账款$8,914 $7,338 
应付施工款11,356 14,108 
应付利息13,885 8,685 
应付购买价款，流动11,379 9,514 
应关联方款项 90 51 
长期负债的当期部分，净额143,449 39,611 
营运租赁负债，流动5,478 6,861 
合同负债，流动2,078 2,940 
其他流动负债34,179 17,402 
流动负债合计230,808 106,510 
配股负债12,320 60,502 
长期负债，减去未摊销发行债券成本和流动部分1,177,991 1,163,307 
无形负债，净额17,088 18,945 
资产退役义务19,577 17,014 
非流动经营租赁负债189,604 180,701 
合同负债，非流动5,978 5,620 
递延所得税负债，净额— 9,831 
其他长期负债2,869 2,908 
总负债$1,656,235 $1,565,338 
承诺和条件性负债（附注11）
可赎回的非控制权益。21,817 26,044 
股东权益
普通股 $0.0001 面值； 988,591,250 自2024年9月30日和2023年12月31日授权发行股票数为： 159,989,890 和 158,999,886 截至2024年9月30日和2023年12月31日已发行及流通股票数为：
16 16 
资本公积额额外增资491,264 485,063 
保留收益（累积亏损）7,518 (55,274)
其他综合收益累计额16,012 17,273 
股东权益总额$514,810 $447,078 
非控制权益47,213 51,889 
总股本$562,023 $498,967 
负债总额，可赎回的非控制权益和权益$2,240,075 $2,090,349 
6
目录


下表列出了合并变量利益实体的资产和负债（请参阅注释4）。
（以千计）
截至
2024 年 9 月 30 日
截至
2023 年 12 月 31 日
合并后的VIE的资产，包含在上述总资产中：
现金$35,375 $12,191 
限制性现金的当前部分535 1,066 
应收账款，净额18,047 8,068 
其他流动资产1,229 973 
限制性现金，非流动部分3,808 4,002 
财产、厂房和设备，净额927,547 845,024 
无形资产，净额5,900 5,507 
经营租赁资产92,535 79,597 
其他资产2,395 2,228 
合并后的VIE的总资产$1,087,371 $958,656 
合并后的VIE的负债，包含在上述总负债中：
应付账款$1,924 $1,056 
应付建筑费115 — 
经营租赁负债，当前2,742 2,542 
长期债务的流动部分，净额3,022 3,021 
合同责任，当前484 484 
其他流动负债25,329 1,473 
长期债务，扣除未摊销的债务发行成本和流动部分37,873 38,958 
无形负债，净额3,921 4,522 
资产报废债务10,177 9,185 
经营租赁负债，非当期95,657 82,913 
合同责任，非流动4,160 4,011 
其他长期负债1,712 1,771 
合并后的VIE的负债总额$187,116 $149,936 
附注是这些未经审计的简明综合财务报表的组成部分。
7
目录
Altus Power, Inc.
压缩的股东权益变动表
(未经审计)
（单位：千美元，以股份数据为单位）

 普通股额外
实收资本		 累计其他综合收益 （累计赤字）留存收益总计
股东
股权		 非
控制
兴趣爱好		 权益总额
 股票金额    
截至2023年6月30日158,989,953 $16 $478,458 $3,008 $(33,477)$448,005 $34,446 $482,451 
股票薪酬支出— — 4,176 — — 4,176 — 4,176 
向非控股权益分配现金— — — — — — (562)(562)
来自非控股权益的现金捐款— — — — — — 2,073 2,073 
其他综合收入— — — 8,422 — 8,422 — 8,422 
净收入— — — — 5,330 5,330 1,182 6,512 
截至2023年9月30日158,989,953 16 482,634 11,430 (28,147)465,933 37,139 503,072 


 普通股额外的
实收资本		累计其他综合收益（损失）（累计
净利润（留存收益）		总计
股东权益
股权		非
控制
利益		总股本
 股份金额
截至2024年6月30日159,989,890 $16 $484,181 $16,445 $(10,120)$490,522 $49,834 $540,356 
股份补偿费用— — 4,657 — — 4,657 — 4,657 
股权非控制权益现金分配— — — — — — (715)(715)
对非控股权益的应计分配— — — — — — (77)(77)
非控股权益的现金投入— — — — — — 12,072 12,072 
赎回非控制权益— — 2,426 — — 2,426 (4,781)(2,355)
其他综合损失— — — (433)— (433)— (433)
净利润（损失）— — — — 17,638 17,638 (9,120)8,518 
截至2024年9月30日
159,989,890 $16 $491,264 $16,012 $7,518 $514,810 $47,213 $562,023 

附注是这些未经审计的简明综合财务报表的组成部分。

8
目录
Altus Power, Inc.
压缩的股东权益变动表
(未经审计)
（单位：千美元，以股份数据为单位）

 Common StockAdditional
Paid-in Capital		 Accumulated Other Comprehensive Income (Accumulated
Deficit) Retained Earnings		Total
Stockholders'
Equity		 Non
Controlling
Interests		 Total Equity
 SharesAmount    
As of December 31, 2022158,904,401 $16 $470,004 $— $(45,919)$424,101 $20,825 $444,926 
Stock-based compensation expense83,541 — 11,245 — — 11,245 — 11,245 
Cash distributions to noncontrolling interests— — — — — — (1,577)(1,577)
Cash contributions from noncontrolling interests— — — — — — 8,347 8,347 
Conversion of alignment shares to Class A Common Stock2,011 — 11 — — 11 — 11 
Noncontrolling interests assumed through acquisitions— — — — — — 13,500 13,500 
Redemption of redeemable noncontrolling interests— — 1,374 — — 1,374 — 1,374 
Other comprehensive income— — — 11,430 11,430 — 11,430 
Net income (loss)— — — — 17,772 17,772 (3,956)13,816 
As of September 30, 2023158,989,953 16 482,634 11,430 (28,147)465,933 37,139 503,072 


 Common StockAdditional
Paid-in Capital		Accumulated Other Comprehensive Income (Loss)(Accumulated
Deficit) Retained Earnings		Total
Stockholders'
Equity		Non
Controlling
Interests		Total Equity
 SharesAmount
As of December 31, 2023
158,999,886 $16 $485,063 $17,273 $(55,274)$447,078 $51,889 $498,967 
Stock-based compensation expense988,013 — 3,765 — — 3,765 — 3,765 
Cash distributions to noncontrolling interests— — — — — — (2,188)(2,188)
Cash contributions from noncontrolling interests— — — — — — 16,176 16,176 
Conversion of Alignment Shares to Class A Common Stock and exercised warrants1,991 — 10 — — 10 — 10 
Noncontrolling interests assumed through acquisitions— — — — — — 2,100 2,100 
Accrued distributions to noncontrolling interests— — — — — — (155)(155)
Redemption of noncontrolling interests— — 2,426 — — 2,426 (4,781)(2,355)
Other comprehensive loss— — — (1,261)— (1,261)— (1,261)
Net income (loss)— — — — 62,792 62,792 (15,828)46,964 
As of September 30, 2024
159,989,890 $16 $491,264 $16,012 $7,518 $514,810 $47,213 $562,023 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Table of Contents
Altus Power, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
 Nine Months Ended September 30,
 20242023
Cash flows from operating activities
Net income$45,813 $13,991 
Adjustments to reconcile net income to net cash from operating activities:
Depreciation, amortization and accretion50,447 38,054 
Non-cash lease transactions(1,265)467 
Deferred tax (benefit) expense(21,296)67 
Amortization of debt discount and financing costs4,003 2,657 
Change in fair value of Alignment Shares liability(48,172)(23,331)
Remeasurement of contingent consideration, net(2,379)150 
(Gain) loss on disposal of property, plant and equipment(88)649 
Reclassification of realized gain on cash flow hedge to net income(1,270)— 
Stock-based compensation expense4,541 11,245 
Other(2,002)243 
Changes in assets and liabilities, excluding the effect of acquisitions
Accounts receivable(15,741)(5,668)
Due to related parties39 (59)
Derivative assets530 (52)
Other assets246 3,236 
Accounts payable1,780 2,245 
Interest payable5,200 4,059 
Contract liability344 346 
Other liabilities(371)797 
Net cash provided by operating activities20,359 49,096 
Cash flows used for investing activities
Capital expenditures(57,640)(89,344)
Payments to acquire renewable energy businesses, net of cash and restricted cash acquired(119,240)(313,292)
Payments to acquire renewable energy facilities from third parties, net of cash and restricted cash acquired(84,999)(28,259)
Proceeds from disposal of property, plant and equipment266 2,350 
Net cash used for investing activities(261,613)(428,545)
Cash flows provided by financing activities
Proceeds from issuance of long-term debt211,451 311,642 
Repayment of long-term debt(94,782)(41,900)
Payment of debt issuance costs(1,232)(2,969)
Payment of deferred purchase price payable(8,102)(4,531)
Payment of contingent consideration(5,793)— 
Contributions from noncontrolling interests16,176 8,347 
Redemption of noncontrolling interests(3,191)— 
Redemption of redeemable noncontrolling interests— (3,224)
Distributions to noncontrolling interests(4,300)(3,326)
Proceeds from transfer of investment tax credits related to noncontrolling interests23,427 — 
Net cash provided by financing activities133,654 264,039 
Net decrease in cash, cash equivalents, and restricted cash(107,600)(115,410)
Cash, cash equivalents, and restricted cash, beginning of period218,927 199,398 
Cash, cash equivalents, and restricted cash, end of period$111,327 $83,988 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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Table of Contents
Nine Months Ended September 30,
20242023
Supplemental cash flow disclosure
Cash paid for interest$46,556 $25,017 
Cash paid for taxes34 85 
Non-cash investing and financing activities
Asset retirement obligations$1,792 $4,291 
Debt assumed through acquisitions— 7,883 
Noncontrolling interest assumed through acquisitions2,100 13,500 
Redeemable noncontrolling interest assumed through acquisitions(100)11,341 
Accrued distributions to noncontrolling interests1,018 — 
Acquisitions of property and equipment included in construction payable— 1,730 
Conversion of Alignment Shares into common stock10 11 
Deferred purchase price payable— 7,606 
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Table of Contents
Altus Power, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)

1.General
Company Overview
Altus Power, Inc., a Delaware corporation (the “Company” or “Altus Power”), headquartered in Stamford, Connecticut, develops, owns, constructs and operates large-scale roof, ground and carport-based photovoltaic solar energy generation and storage systems for the purpose of producing and selling electricity to credit worthy counterparties, including commercial and industrial, public sector and community solar customers, under long-term contracts. The solar energy facilities are owned by the Company in project-specific limited liability companies (the “Solar Facility Subsidiaries”).
On December 9, 2021 (the “Closing Date”), the Company merged (the “Merger”) with CBRE Acquisition Holdings, Inc. (“CBAH”) and became listed on the New York Stock Exchange under the stock symbol “AMPS.”
2.Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The Company prepares its unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and regulations of the U.S. Securities and Exchange Commission ("SEC") for interim financial reporting. The Company’s condensed consolidated financial statements include the results of wholly-owned and partially-owned subsidiaries in which the Company has a controlling interest. All intercompany balances and transactions have been eliminated in consolidation.
Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023, filed with the Company’s 2023 Annual Report on Form 10-K on March 14, 2024, and the related notes which provide a more complete discussion of the Company’s accounting policies and certain other information. The information as of December 31, 2023, included in the condensed consolidated balance sheets was derived from the Company’s audited consolidated financial statements. The condensed consolidated financial statements were prepared on the same basis as the audited consolidated financial statements and reflect all adjustments, including normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the Company’s financial position as of September 30, 2024, and the results of operations and cash flows for the three and nine months ended September 30, 2024, and 2023. The results of operations for the three and nine months ended September 30, 2024, are not necessarily indicative of the results that may be expected for the full year or any other future interim or annual period.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.
In recording transactions and balances resulting from business operations, the Company uses estimates based on the best information available. Estimates are used for such items as the fair value of net assets acquired in connection with accounting for business combinations, the useful lives of the solar energy facilities, and inputs and assumptions used in the valuation of asset retirement obligations (“AROs”), contingent consideration, derivative instruments, and Class B common stock, par value $0.0001 per share (“Alignment Shares”).
Segment Information
Operating segments are defined as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the chief executive officer. Based on the financial information presented to and reviewed by the chief operating decision maker in deciding how to allocate the resources and in assessing the performance of the Company, the Company has determined it operates as a single operating segment and has one reportable segment, which includes revenue under power purchase agreements (“PPAs”), revenue from net metering credit
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Table of Contents
Altus Power, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
agreements, solar renewable energy credit revenue, rental income, performance based incentives and other revenue. The Company’s principal operations, revenue and decision-making functions are located in the United States.
Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents includes all cash balances on deposit with financial institutions and readily marketable securities with original maturity dates of three months or less at the time of acquisition and are denominated in U.S. dollars. Pursuant to the budgeting process, the Company maintains certain cash and cash equivalents on hand for possible equipment replacement related costs.

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

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets. Cash, cash equivalents, and restricted cash consist of the following:
 
As of September 30, 2024
As of December 31, 2023
Cash and cash equivalents$96,899 $160,817 
Current portion of restricted cash1,334 45,358 
Restricted cash, noncurrent portion13,094 12,752 
Total$111,327 $218,927 
Concentration of Credit Risk
The Company maintains its cash in bank deposit accounts which, at times, may exceed Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash balances.
The Company had no customers that individually accounted for over 10% of total accounts receivable, net as of September 30, 2024, and no customers that individually accounted for over 10% of total operating revenues, net for the three and nine months ended September 30, 2024.
The Company had no customers that individually accounted for over 10% of total accounts receivable, net as of December 31, 2023. The Company had no customers that individually accounted for over 10% of total operating revenues, net for the three months ended September 30, 2023, and one customer that individually accounted for over 10% (i.e., 11.5%), of total operating revenues, net for the nine months ended September 30, 2023.
Accounting Pronouncements
As a public company, the Company is provided the option to adopt new or revised accounting guidance as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) either (1) within the same periods as those otherwise applicable to public business entities, or (2) within the same time periods as non-public business entities, including early adoption when permissible. The Company expects to elect to adopt new or revised accounting guidance within the same time period as non-public business entities, as indicated below.
Recent Accounting Pronouncements Not Yet Adopted
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this update require disclosure of incremental segment information and the title and position of the chief operating decision maker ("CODM"). Registrants will be required to disclose significant segment expenses that are regularly provided to the CODM, as well as additional information on segment profit and loss measures and how such information is used by the CODM to assess segment performance and allocate resources. This ASU is effective for annual periods beginning in January 2024 and interim periods beginning in January 2025. The Company is currently evaluating the
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Altus Power, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
impact of this ASU, but does not currently expect it to have a material impact on its consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update require enhanced income tax disclosures, particularly related to a reporting entity's effective tax rate reconciliation and income taxes paid. For the rate reconciliation table, the update requires additional categories of information about federal, state, and foreign taxes and details about significant reconciling items, subject to a quantitative threshold. Income taxes paid must be similarly disaggregated by federal, state, and foreign based on a quantitative threshold. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The guidance shall be applied on a prospective basis with the option to apply retrospectively. The Company will apply the guidance upon the effective date. The Company is currently evaluating the impact of this update on its consolidated financial statements and related disclosures.
3.Revenue and Accounts Receivable
Disaggregation of Total Operating Revenues, net
The following table presents the detail of total operating revenues, net as recorded in the unaudited condensed consolidated statements of operations:
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Power sales under PPAs$21,532 $17,442 $54,879 $43,079 
Power sales under NMCAs18,934 13,846 44,404 33,970 
Power sales on wholesale markets870 550 1,706 1,474 
Total revenue from power sales41,336 31,838 100,989 78,523 
Solar renewable energy credit revenue13,489 9,753 33,541 33,346 
Rental income2,967 586 8,183 2,198 
Performance based incentives298 1,925 7,073 4,487 
Revenue recognized on contract liabilities591 977 2,014 2,416 
Total operating revenues, net$58,681 $45,079 $151,800 $120,970 
Transaction price allocated to the remaining performance obligation
In accordance with optional exemptions available under Topic 606, the Company does not disclose the value of unsatisfied performance obligations for (1) contracts with an original expected length of one year or less, (2) with the exception of fixed consideration, contracts for which revenue is recognized at the amount to which the Company have the right to invoice for goods provided and services performed, and (3) contracts for which variable consideration relates entirely to an unsatisfied performance obligation.
Contracts with fixed consideration consist primarily of performance obligations to supply fixed quantities of solar renewable energy credits ("SRECs"). Contracts with variable volumes and/or variable pricing, including those with pricing provisions tied to a consumer price or other index, have also been excluded as the related consideration under the contract is variable at inception of the contract. Most of the Company's solar renewable energy credit revenue is related to contracts with variable consideration.
The Company expects to recognize revenue for the following amounts related to fixed consideration associated with remaining performance obligations in each of the future periods noted:
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Altus Power, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
2024$8,506 
202515,892 
202619,536 
202711,107 
20281,029 
Thereafter23 
Total$56,093 
Accounts receivable
The following table presents the detail of receivables as recorded in accounts receivable in the unaudited condensed consolidated balance sheets:
 
As of September 30, 2024
As of December 31, 2023
Power sales under PPAs$10,169 $3,582 
Power sales under NMCAs16,703 8,094 
Power sales on wholesale markets115 249 
Total power sales26,987 11,925 
Solar renewable energy credits7,175 3,379 
Rental income118 450 
Performance based incentives46 1,346 
Total$34,326 $17,100 
Payments for all accounts receivable in the above table are typically received within 30 days from invoicing. As of both September 30, 2024, and December 31, 2023, the Company determined that the allowance for credit losses was $0.9 million.
Contract liabilities
The Company recognizes contract liabilities related to long-term agreements to sell SRECs that are prepaid by customers before SRECs are delivered. The Company will recognize revenue associated with the contract liabilities as SRECs are delivered to customers through 2037. As of September 30, 2024, the Company had current and non-current contract liabilities of $2.1 million and $6.0 million, respectively. As of December 31, 2023, the Company had current and non-current contract liabilities of $2.9 million and $5.6 million, respectively. The Company does not have any other significant contract asset or liability balances related to revenues.
Rental income
Rental income is primarily derived from the master lease agreement with Vitol (as described in Note 5, "Acquisitions"), as well as long-term PPAs accounted for as operating leases under ASC 842. The Company's leases include various renewal options which are included in the lease term when the Company has determined it is reasonably certain of exercising the options based on consideration of all relevant factors that create an economic incentive for the Company as lessor. Certain leases include variable lease payments associated with production of solar facilities, which are recognized as rental income in period the energy is delivered. Maturities of fixed rental payments as of September 30, 2024, are as follows:
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Altus Power, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
2024$1,184 
20256,083 
20262,892 
2027513 
2028514 
Thereafter5,255 
Total16,441 
Banked Net Metering Credits
Operating revenues do not include net metering credits that were awarded to the Company by utilities but not yet sold to customers and were banked by the Company. Revenues from sales of banked net metering credits are recognized once they are allocated and used by customers.
4.Variable Interest Entities
The Company consolidates all variable interest entities (“VIEs”) in which it holds a variable interest and is deemed to be the primary beneficiary of the variable interest entity. Generally, a VIE is an entity with at least one of the following conditions: (a) the total equity investment at risk is insufficient to allow the entity to finance its activities without additional subordinated financial support, or (b) the holders of the equity investment at risk, as a group, lack the characteristics of having a controlling financial interest. The primary beneficiary of a VIE is required to consolidate the VIE and to disclose certain information about its significant variable interests in the VIE. The primary beneficiary of a VIE is the entity that has both (1) the power to direct the activities that most significantly impact the entity’s economic performance and (2) the obligations to absorb losses or receive benefits that could potentially be significant to the VIE.
The Company participates in certain partnership arrangements that qualify as VIEs. Consolidated VIEs consist primarily of tax equity financing arrangements and partnerships in which an investor holds a noncontrolling interest and does not have substantive kick-out or participating rights. The Company, through its subsidiaries, is the primary beneficiary of such VIEs, because as the manager, it has the power to direct the day-to-day operating activities of the entity. In addition, the Company is exposed to economics that could potentially be significant to the entity given its ownership interest, therefore, has consolidated the VIEs as of September 30, 2024 and December 31, 2023. No VIEs were deconsolidated during the nine months ended September 30, 2024 and 2023.
The obligations of the consolidated VIEs discussed in the following paragraphs are nonrecourse to the Company. In certain instances where the Company establishes a new tax equity structure, the Company is required to provide liquidity in accordance with the contractual agreements. The Company has no requirement to provide liquidity to purchase assets or guarantee performance of the VIEs unless further noted in the following paragraphs. The Company made certain contributions during the nine months ended September 30, 2024 and 2023, as determined in the respective operating agreement.
The carrying amounts and classification of the consolidated VIE assets and liabilities included in condensed consolidated balance sheets are as follows:
 
As of
September 30, 2024
As of
December 31, 2023
Current assets$55,186 $22,298 
Non-current assets1,032,185 936,358 
Total assets$1,087,371 $958,656 
Current liabilities$33,616 $8,576 
Non-current liabilities153,500 141,360 
Total liabilities$187,116 $149,936 
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
The amounts shown in the table above exclude intercompany balances which are eliminated upon consolidation. All of the assets in the table above are restricted for settlement of the VIE obligations, and all of the liabilities in the table above can only be settled using VIE resources.
The Company has not identified any VIEs during the nine months ended September 30, 2024 and 2023, for which the Company determined that it is not the primary beneficiary and thus did not consolidate.
The Company considered qualitative and quantitative factors in determining which VIEs are deemed significant. As of September 30, 2024 and December 31, 2023, the Company consolidated thirty-seven and thirty-five VIEs, respectively.
As discussed in Note 5, on July 3, 2024 and September 10, 2024, the Company acquired all outstanding equity interests in three entities that were deemed to be VIEs due to insufficient amounts of at-risk equity to finance activities without additional subordinated financial support. The Company, through its subsidiaries, is the primary beneficiary through its ownership interests, as the Company has the power to direct the operating activities of the VIEs and is exposed to economics that could potentially be significant to the entities. Subsequent to the acquisition date, the Company made additional investments in two of the acquired VIEs and the at-risk equity in these entities became sufficient to finance their operations. Therefore, as of September 30, 2024, these entities were consolidated under the voting interest entity model.
5.Acquisitions
2024 Acquisitions
MN8 Acquisition
On April 10, 2024, the Company entered into a Purchase and Sale Agreement to acquire four in-development solar facilities for an estimated gross purchase price of approximately $113 million, subject to customary adjustments.

On July 3, 2024 and September 10, 2024, the Company acquired three of the in-development solar energy facilities located in Maine with a total expected nameplate capacity of 19.7 MW from third party for a total purchase price of $84.1 million (the “MN8 Acquisition”). As of September 30, 2024, $9.3 million of total consideration remained payable to the seller and was included as purchase price payable on the condensed consolidated balance sheet. The acquisitions were accounted for as acquisitions of variable interest entities that do not constitute a business (refer to Note 4, "Variable Interest Entities"). The Company acquired $84.5 million of property, plant and equipment and $2.1 million of operating lease assets, and assumed $2.1 million of operating lease liabilities and $0.4 million of asset retirement obligations.

Vitol Acquisition
On January 31, 2024, the Company, through its wholly-owned subsidiary, Altus Power, LLC, acquired an 84 MW portfolio of 20 operating solar energy facilities located across five U.S. states (the “Vitol Acquisition”). The portfolio was acquired from Vitol Solar I LLC (“Vitol”) through an acquisition of 100% of the outstanding membership interests in 18 project companies and 100% of the outstanding Class B membership interest in a partnership which owns 2 project companies. The total purchase price was approximately $119.5 million and the transaction was entered into by the Company to grow its portfolio of solar energy facilities. The purchase price and associated transaction costs were funded by cash on hand. The purchase price is also subject to customary adjustments for working capital and other items.
In conjunction with the acquisition, the Company entered into a master lease agreement to lease certain solar facilities back to Vitol, as well as an asset management agreement under which the Company will manage the solar facilities during the term of the master lease agreement. The master lease agreement is accounted for as an operating lease under ASC 842 and lease payments are included in rental income within the condensed consolidated statement of operations. The lease term varies by solar facility, with individual lease terms ending between 2024 and 2026.

The Company accounted for the Vitol Acquisition under the acquisition method of accounting for business combinations. Under the acquisition method, the purchase price was allocated to the assets acquired and liabilities assumed on January 31, 2024 based on their estimated fair value. All fair value measurements of assets acquired and liabilities assumed, including the noncontrolling interests, were based on significant estimates and assumptions, including Level 3 (unobservable) inputs, which
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
require judgment. Estimates and assumptions include the estimates of future power generation, commodity prices, operating costs, and appropriate discount rates.

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

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

Provisional accounting as of January 31, 2024Measurement period adjustmentsAdjusted provisional accounting as of January 31, 2024
Assets
Accounts receivable$1,649 $(164)$1,485 
Property, plant and equipment123,363 (822)122,541 
Operating lease asset7,835 (1,799)6,036 
Other assets1,691 (2)1,689 
Total assets acquired134,538 (2,787)131,751 
Liabilities
Accounts payable249 65 314 
Intangible liabilities2,370 (800)1,570 
Asset retirement obligation1,374 — 1,374 
Operating lease liability7,187 (1,799)5,388 
Contract liability1,130 — 1,130 
Other liabilities393 172 565 
Total liabilities assumed12,703 (2,362)10,341 
Non-controlling interests2,100 — 2,100 
Total fair value of consideration transferred$119,735 $(425)$119,310 

The fair value of consideration transferred, net of cash acquired, as of January 31, 2024, is determined as follows:
Cash consideration paid to Vitol on closing$119,690 $— $119,690 
Post-closing purchase price true-up45 (221)(176)
Total fair value of consideration transferred119,735 (221)119,514 
Cash acquired— 204 204 
Total fair value of consideration transferred, net of cash acquired$119,735 $(425)$119,310 

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
The impact of the Vitol Acquisition on the Company's revenue and net income in the condensed consolidated statement of operations was an increase of $8.6 million and $5.4 million, respectively, for the nine months ended September 30, 2024.
Intangibles at Acquisition Date
The Company attributed the intangible liability values to unfavorable rate revenue contracts to sell power and SRECs. The following table summarizes the estimated fair values and the weighted average amortization periods of the assumed intangible liabilities as of the acquisition date:
Fair Value
(thousands)		Weighted Average Amortization Period
Unfavorable rate revenue contracts – PPA(100)11 years
Unfavorable rate revenue contracts – SREC(1,470)10 years

Unaudited Pro Forma Combined Results of Operations
The following unaudited pro forma combined results of operations give effect to the Vitol Acquisition as if it had occurred on January 1, 2023. The unaudited pro forma combined results of operations are provided for informational purposes only and do not purport to represent the Company’s actual consolidated results of operations had the Vitol Acquisition occurred on the date assumed, nor are these financial statements necessarily indicative of the Company’s future consolidated results of operations. The unaudited pro forma combined results of operations do not reflect the costs of any integration activities or any benefits that may result from operating efficiencies or revenue synergies.
For the three months ended September 30, 2024 (unaudited)For the three months ended September 30, 2023 (unaudited)For the nine months ended September 30, 2024 (unaudited)For the nine months ended September 30, 2023 (unaudited)
Operating revenues, net$58,681 $48,121 $152,662 $129,464 
Net income8,609 8,565 47,143 17,856 

Asset Acquisitions
During the nine months ended September 30, 2024, the Company acquired solar energy facilities located in Massachusetts, New Jersey, and Colorado with a total nameplate capacity of 12.3 MW from third parties for a total purchase price of $13.5 million. The acquisitions were accounted for as acquisitions of assets, whereby the Company acquired $13.5 million of property, plant and equipment and $0.7 million of operating lease assets, and assumed $0.7 million of operating lease liabilities.
2023 Acquisitions
Caldera Acquisition
On December 20, 2023, Altus Power, LLC, a wholly-owned subsidiary of the Company, acquired a 121 MW portfolio of 35 operating solar energy facilities located across six US states (the “Caldera Acquisition”). The portfolio was acquired from Project Hyperion Holdco LP (the “Seller”) for total consideration of $121.7 million. The purchase price and associated transaction costs were funded by the proceeds from an amendment of the APAF III Term Loan (as defined in Note 6, "Debt") and cash on hand. The Caldera Acquisition was made pursuant to the purchase and sale agreement (the "PSA") dated October 27, 2023, and entered into by the Company to grow its portfolio of solar energy facilities. Pursuant to the PSA, the Company acquired 100% ownership interest in Project Hyperion, LLC, a holding entity that owns the acquired solar energy facilities.
The Company accounted for the Caldera Acquisition under the acquisition method of accounting for business combinations. Under the acquisition method, the purchase price was allocated to the assets acquired and liabilities assumed on December 20, 2023, based on their estimated fair value. All fair value measurements of assets acquired and liabilities assumed, including the noncontrolling interests, were based on significant estimates and assumptions, including Level 3 (unobservable) inputs, which
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
require judgment. Estimates and assumptions include the estimates of future power generation, commodity prices, operating costs, and appropriate discount rates.
The accounting for the Caldera Acquisition was finalized as of September 30, 2024. Subsequent to the acquisition date, the Company made certain measurement period adjustments to provisional accounting recognized. The adjustments consist of decreases in Property, plant and equipment acquired of $0.6 million, Other assets acquired of $0.1 million, Other liabilities assumed of $0.5 million, and noncontrolling interests assumed of $0.1 million, and an increase in Cash and restricted cash acquired of $0.1 million.
The following table presents the final allocation of the purchase price to the assets acquired and liabilities assumed, based on their estimated fair values on December 20, 2023:
Provisional accounting as of December 20, 2023Measurement period adjustmentsFinal accounting as of December 20, 2023
Assets
Accounts receivable$876 $— $876 
Property, plant and equipment131,728 (596)131,132 
Intangible assets350 — 350 
Operating lease asset15,557 — 15,557 
Other assets2,079 (95)1,984 
Total assets acquired150,590 (691)149,899 
Liabilities
Intangible liabilities5,200 — 5,200 
Asset retirement obligation1,920 — 1,920 
Operating lease liability17,567 — 17,567 
Other liabilities1,275 (517)758 
Total liabilities assumed25,962 (517)25,445 
Non-controlling interests2,900 (100)2,800 
Total fair value of consideration transferred, net of cash acquired$121,728 $(74)$121,654 

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

Cash consideration paid to seller on closing$80,942 $— $80,942 
Cash consideration paid to settle debt on behalf of seller38,966 — 38,966 
Purchase price payable(1)
4,189 — 4,189 
Contingent consideration payable2,600 — 2,600 
Total fair value of consideration transferred126,697 — 126,697 
Cash and restricted cash acquired4,969 74 5,043 
Total fair value of consideration transferred, net of cash acquired$121,728 $(74)$121,654 
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
(1) The Company paid the entire purchase price payable amount after the acquisition date but prior to December 31, 2023.
The contingent consideration is related to the estimated earnout cash payment of a maximum of $8.0 million dependent on actual power generation of the acquired solar generating facilities during the 12-month period following the acquisition date. Refer to the Contingent Consideration section of Note 7, "Fair Value Measurements" for further information.
The Company incurred approximately $0.9 million of acquisition related costs related to the Caldera Acquisition, which are recorded as part of Acquisition and entity formation costs in the consolidated statement of operations for the year ended December 31, 2023. Acquisition related costs include legal, consulting, and other transaction-related costs.    
Intangibles at Acquisition Date
The Company attributed the intangible asset and liability values to favorable and unfavorable rate revenue contracts to sell SRECs. The following table summarizes the estimated fair values and the weighted average amortization periods of the acquired intangible assets and assumed intangible liabilities as of the acquisition date:
Fair Value
(thousands)		Weighted Average Amortization Period
Favorable rate revenue contracts – SREC350 4 years
Unfavorable rate revenue contracts – SREC(5,200)3 years
6. Debt
 
As of
September 30, 2024
As of
December 31, 2023
Interest
Type		Weighted
average
interest rate
Long-term debt
APAF Term Loan$465,181 $474,609 Fixed3.51 %
APAF II Term Loan104,548 112,810 Floating*
SOFR + 1.475%
APAF III Term Loan417,621 426,619 Fixed6.03 %
APAF IV Term Loan100,495 — Fixed6.45 %
APAGH Term Loan100,000 100,000 Fixed8.50 %
APAG Revolver10,000 65,000 Floating
SOFR + 1.60%
APACF II Facility101,685 — Floating
SOFR + 3.25%
Other term loans9,350 11,000 Fixed3.02 %
Financing obligations recognized in failed sale leaseback transactions41,736 42,767 Imputed3.97 %
Total principal due for long-term debt1,350,616 1,232,805 
Unamortized discounts(12,428)(13,722)
Unamortized deferred financing costs(16,748)(16,165)
Less: Current portion of long-term debt143,449 39,611 
Long-term debt, less current portion$1,177,991 $1,163,307 
* Interest rate is effectively fixed by interest rate swap, see discussion below.
APAF Term Loan
On August 25, 2021, APA Finance, LLC (“APAF”), a wholly owned subsidiary of the Company, entered into a $503.0 million term loan facility with Blackstone Insurance Solutions ("BIS") through a consortium of lenders, which consists of investment
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
grade-rated Class A and Class B notes (the “APAF Term Loan”). The APAF Term Loan has a weighted average 3.51% annual fixed rate and matures on February 29, 2056 (“Final Maturity Date”).
The APAF Term Loan amortizes at an initial rate of 2.5% of outstanding principal per annum for a period of 8 years at which point the amortization steps up to 4% per annum until September 30, 2031 (“Anticipated Repayment Date”). After the Anticipated Repayment Date, the loan becomes fully-amortizing, and all available cash is used to pay down principal until the Final Maturity Date. The APAF Term Loan is secured by membership interests in the Company's subsidiaries.
As of September 30, 2024, the outstanding principal balance of the APAF Term Loan was $465.2 million less unamortized debt discount and loan issuance costs totaling $6.1 million. As of December 31, 2023, the outstanding principal balance of the APAF Term Loan was $474.6 million less unamortized debt discount and loan issuance costs totaling $6.7 million.
As of September 30, 2024, and December 31, 2023, the Company was in compliance with all covenants under the APAF Term Loan.
APAF II Term Loan
On December 23, 2022, APA Finance II, LLC (“APAF II”), a wholly owned subsidiary of the Company, entered into a $125.7 million term loan facility (the “APAF II Term Loan”) with KeyBank National Association ("KeyBank") and The Huntington Bank ("Huntington") as lenders. The proceeds of the APAF II Term Loan were used to repay the outstanding amounts under certain project-level loans. The APAF II Term Loan matures on December 23, 2027, and has a variable interest rate based on Secured Overnight Financing Rate (“SOFR”) plus a spread of 1.475%. Simultaneously with entering into the APAF II Term Loan, the Company entered into interest rate swaps for 100% of the amount of debt outstanding, which effectively fixed the interest rate at 4.885% (see Note 7, "Fair Value Measurements," for further details). The APAF II Term Loan is secured by membership interests in the Company's subsidiaries.
As of September 30, 2024, the outstanding principal balance of the APAF II Term Loan was $104.5 million, less unamortized debt issuance costs of $1.8 million. As of December 31, 2023, the outstanding principal balance of the APAF II Term Loan was $112.8 million, less unamortized debt issuance costs of $2.2 million. As of September 30, 2024, and December 31, 2023, the Company was in compliance with all covenants under the APAF II Term Loan.
APAF III Term Loan
On February 15, 2023, the Company, through its subsidiaries, APA Finance III Borrower, LLC (the “APAF III Borrower”) and APA Finance III Borrower Holdings, LLC (“Holdings”), entered into a new long-term funding facility under the terms of a credit agreement among the Borrower, Holdings, Blackstone Asset Based Finance Advisors LP, which is an affiliate of the Company, U.S. Bank Trust Company, N.A., as administrative agent, U.S. Bank N.A., as document custodian, and the lenders party thereto (the “APAF III Term Loan”).
This funding facility provides for a term loan of $204.0 million at a fixed rate of 5.62%. The APAF III Term Loan amortizes at a rate of 2.5% of initial outstanding principal until the anticipated repayment date of June 30, 2033. The maturity date of the term loan is October 31, 2047. Upon lender approval, the Borrower has the right to increase the funding facility to make additional draws for certain solar generating facilities, as set forth in the credit agreement. On February 15, 2023, the Company borrowed $193.0 million from this facility to fund the True Green II Acquisition and the associated costs and expenses. The principal balance borrowed under the APAF III Term Loan was offset by $4.0 million of debt issuance costs and $6.3 million of issuance discount, which have been deferred and will be recognized as interest expense through June 30, 2033. The APAF III Term Loan is secured by membership interests in the Company's subsidiaries.
On June 15, 2023 and July 21, 2023, the Company amended the APAF III Term Loan to add $47.0 million and $28.0 million of additional borrowings, respectively, the proceeds of which were used to repay outstanding term loans under the Construction Loan to Term Loan Facility (as defined below), and to provide long-term financing for new solar projects. The principal balance borrowed under the amendments was offset by $0.3 million and $0.2 million of issuance costs, respectively, and $1.5 million and $1.1 million of issuance discount, respectively, which have been deferred and will be recognized as interest expense through June 30, 2033.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
On December 20, 2023, the Company amended the APAF III Term Loan to add $163.0 million of additional borrowings, the proceeds of which were used to fund the Caldera Acquisition. The amendment increased the weighted average fixed interest rate for all borrowings under the APAF III Term Loan to 6.03% and increased the rate of amortization for the new borrowings under the amendment to 3.25% per annum until June 30, 2033. The principal balance borrowed under the amendment was offset by $1.3 million of issuance costs and $0.8 million of issuance discount, which have been deferred and will be recognized as interest expense through June 30, 2033.
As of September 30, 2024, the outstanding principal balance of the APAF III Term Loan was $417.6 million, less unamortized debt issuance costs and discount of $13.2 million. As of December 31, 2023, the outstanding principal balance of the APAF III Term Loan was $426.6 million, less unamortized debt issuance costs and discount of $14.3 million. As of September 30, 2024 and December 31, 2023, the Company was in compliance with all covenants under the APAF III Term Loan.
APAF IV Term Loan
On March 26, 2024, the Company, through its subsidiaries, APA Finance IV, LLC (the “APAF IV Borrower”), and APA Finance IV Holdings, LLC (“Holdings”) has entered into a new term loan facility under the terms of a credit agreement among the APAF IV Borrower, Holdings, Blackstone Asset Based Finance Advisors LP, which is an affiliate of the Company, U.S. Bank Trust Company, N.A., as administrative agent, U.S. Bank N.A., as document custodian, and the lenders party thereto (the “APAF IV Term Loan”).
The APAF IV Term Loan, which matures on March 26, 2049, bears interest at a fixed rate of 6.45% per annum on outstanding principal amounts under the term loan. The Term Loan Facility has an anticipated repayment date of June 30, 2034. Upon lender approval, the APAF IV Borrower has the right to increase the Term Loan Facility to make additional draws for certain acquisitions of solar assets that otherwise satisfy the criteria for permitted acquisitions, as defined in the credit agreement. On March 26, 2024, the Company borrowed $101.0 million under the APAF IV Term Loan in connection with the Vitol Acquisition, which closed on January 31, 2024. The principal balance borrowed under the APAF IV Term Loan was offset by $1.6 million of debt issuance costs, which have been deferred and will be recognized as interest expense through June 30, 2034. The APAF IV Term Loan is secured by membership interests in the Company's subsidiaries.
As of September 30, 2024, the outstanding principal balance of the APAF IV Term Loan was $100.5 million, less unamortized debt issuance costs and discount of $1.5 million. As of September 30, 2024, the Company was in compliance with all covenants under the APAF IV Term Loan.
APAGH Term Loan
On December 27, 2023, APA Generation Holdings, LLC (“APAGH” or the “APAGH Borrower”), a wholly owned subsidiary of the Company, entered into a credit agreement (the “APAGH Term Loan”) with an affiliate of Goldman Sachs Asset Management and CPPIB Credit Investments III Inc., a subsidiary of Canada Pension Plan Investment Board, as “Lenders.” The total commitment under the credit agreement is $100.0 million. The Company can also allow for the funding of additional incremental loans in an amount not to exceed $100.0 million over the term of the credit agreement at the discretion of the Lenders. Subject to certain exceptions, the APAGH Borrower’s obligations to the Lenders are secured by the assets of the APAGH Borrower, its parent, Altus Power, LLC (“Holdings”) and the Company and are further guaranteed by Holdings and the Company.
Interest accrues on any outstanding balance at an initial fixed rate equal to 8.50%, subject to adjustments. The maturity date of the term loan is December 27, 2029.

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

As of September 30, 2024, the outstanding principal balance of the APAGH Term Loan was $100.0 million, less unamortized debt issuance costs and discount of $3.5 million. As of December 31, 2023, the outstanding principal balance of the APAGH
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
Term Loan was $100.0 million, less unamortized debt issuance costs and discount of $4.0 million. As of September 30, 2024 and December 31, 2023, the Company was in compliance with all covenants.
APAG Revolver
On December 19, 2022, APA Generation, LLC (“APAG”), a wholly owned subsidiary of the Company, entered into revolving credit facility with Citibank, N.A. with a total committed capacity of $200.0 million (the "APAG Revolver"). Outstanding amounts under the APAG Revolver have a variable interest rate based on a base rate and an applicable margin. The APAG Revolver is secured by membership interests in the Company's subsidiaries. The APAG Revolver matures on December 19, 2027. As of September 30, 2024, and December 31, 2023, outstanding under the APAG Revolver were $10.0 million and $65.0 million, respectively. As of September 30, 2024, and December 31, 2023, the Company was in compliance with all covenants under the APAG Revolver.
APACF II Facility
On November 10, 2023, APACF II, LLC (“APACF II” or the “APACF II Borrower”) a wholly-owned subsidiary of the Company, entered into a credit agreement among the APACF II Borrower, APACF II Holdings, LLC, Pass Equipment Co., LLC, each of the project companies from time to time party thereto, each of the tax equity holdcos from time to time party thereto, U.S. Bank Trust Company, National Association, U.S. Bank National Association, each lender from time to time party thereto (collectively, the “Lenders”) and Blackstone Asset Based Finance Advisors LP, as Blackstone representative (“APACF II Facility”).
The aggregate amount of the commitments under the credit agreement is $200.0 million. The APACF II Facility matures on November 10, 2027, and bears interest at an annual rate of SOFR plus 3.25%. Borrowings under the APACF II Facility, which mature 364 days after the borrowing occurs, may be used by the APACF II Borrower to fund construction costs including equipment, labor, interconnection, as well as other development costs. The Company incurred $0.3 million of debt issuance costs related to the APACF II Facility, which have been deferred and will be recognized as interest expense through November 10, 2027. The APACF II Facility is secured by membership interests in the Company's subsidiaries and other collateral, including equipment.

During both the three and nine months ended September 30, 2024, the Company capitalized $1.6 million of interest expense incurred under the APACF II Facility, which is included in property, plant and equipment, net in the condensed consolidated balance sheets as of September 30, 2024.

As of September 30, 2024, the outstanding principal balance of the APACF II Facility was $101.7 million, less unamortized debt issuance costs of $0.7 million. As of December 31, 2023, no amounts were outstanding under the APACF II Facility. As of September 30, 2024, the Company was in compliance with all covenants under the APACF II Facility.
Other Term Loans - Construction Loan to Term Loan Facility
On January 10, 2020, APA Construction Finance, LLC (“APACF”) a wholly-owned subsidiary of the Company, entered into a credit agreement with Fifth Third Bank, National Association and Deutsche Bank AG New York Branch to fund the development and construction of future solar facilities (“Construction Loan to Term Loan Facility”). The Construction Loan to Term Loan Facility included a construction loan commitment of $187.5 million, which expired on January 10, 2023. The construction loan commitment can convert to a term loan upon commercial operation of a particular solar energy facility. On June 15, 2023, the Company repaid all outstanding term loans of $15.8 million and terminated the facility.
Other Term Loans - Project-Level Term Loan
In conjunction with an acquisition of assets on August 29, 2022, the Company assumed a project-level term loan with an outstanding principal balance of $14.1 million and a fair value discount of $2.2 million. The term loan is subject to scheduled semi-annual amortization and interest payments, and matures on September 1, 2029.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
As of September 30, 2024, the outstanding principal balance of the term loan was $9.4 million, less unamortized debt discount of $1.5 million. As of December 31, 2023, the outstanding principal balance of the term loan was $11.0 million, less unamortized debt discount of $1.8 million.
The term loan is secured by an interest in the underlying solar project assets and the revenues generated by those assets. As of September 30, 2024, and December 31, 2023, the Company was in compliance with all covenants.
Letter of Credit Facilities and Surety Bond Arrangements
The Company enters into letters of credit and surety bond arrangements with lenders, local municipalities, government agencies, and land lessors. These arrangements relate to certain performance-related obligations and serve as security under the applicable agreements. As of September 30, 2024, the Company had $53.0 million of letters of credit outstanding and $50.4 million of unused capacity. As of December 31, 2023, the Company had $54.7 million of letters of credit outstanding and $54.4 million of unused capacity. Additionally, as of September 30, 2024 and December 31, 2023, the Company had outstanding surety bonds of $6.0 million and $5.4 million, respectively.
To the extent liabilities are incurred as a result of the activities covered by the letters of credit or surety bonds, such liabilities are included on the accompanying condensed consolidated balance sheets. From time to time, the Company is required to post financial assurances to satisfy contractual and other requirements generated in the normal course of business. Some of these assurances are posted to comply with federal, state or other government agencies’ statutes and regulations. The Company sometimes uses letters of credit to satisfy these requirements and these letters of credit reduce the Company’s borrowing facility capacity.
Financing Obligations Recognized in Failed Sale Leaseback Transactions
From time to time, the Company sells equipment to third parties and enters into master lease agreements to lease the equipment back for an agreed-upon term. The Company has assessed these arrangements and determined that the transfer of assets should not be accounted for as a sale in accordance with ASC 842. Therefore, the Company accounts for these transactions using the financing method by recognizing the consideration received as a financing obligation, with the assets subject to the transaction remaining on the balance sheet of the Company and depreciated based on the Company's normal depreciation policy. The aggregate proceeds have been recorded as long-term debt within the condensed consolidated balance sheets.
As of September 30, 2024, the Company's recorded financing obligations were $40.9 million, net of $0.8 million of deferred transaction costs. As of December 31, 2023, the Company's recorded financing obligations were $41.8 million, net of $0.9 million of deferred transaction costs. Payments $1.2 million and $1.1 million were made under financing obligations for the three months ended September 30, 2024, and 2023, respectively. Payments of $2.3 million and $2.6 million were made under financing obligations for the nine months ended September 30, 2024 and 2023, respectively. Interest expense, inclusive of the amortization of deferred transaction costs, for the both three months ended September 30, 2024 and 2023, was $0.4 million. Interest expense, inclusive of the amortization of deferred transaction costs, for both the nine months ended September 30, 2024 and 2023, was $1.3 million.
During the nine months ended September 30, 2023, the Company paid $0.5 million to extinguish financing obligations of $0.6 million, resulting in a gain on extinguishment of debt of $0.1 million. During the nine months ended September 30, 2024, the Company extinguished no financing obligations.
The table below shows the payments required under the failed sale-leaseback financing obligations for the years ended:
2024$916 
20253,023 
20262,995 
20272,986 
20282,967 
Thereafter14,143 
Total$27,030 
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
The difference between the outstanding sale-leaseback financing obligation of $41.7 million and $27.0 million of contractual payments due, including residual value guarantees, is due to $13.2 million of investment tax credits claimed by the respective counterparties, less $2.6 million of the implied interest on financing obligation included in minimum lease payments. The remaining difference is due to $4.6 million of interest accrued and a $0.5 million difference between the required contractual payments and the fair value of financing obligations acquired.
7.Fair Value Measurements
The Company measures certain assets and liabilities at fair value, which is defined as the price that would be received from the sale of an asset or paid to transfer a liability (i.e., an exit price) on the measurement date in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. Our fair value measurements use the following hierarchy, which prioritizes valuation inputs based on the extent to which the inputs are observable in the market.
•Level 1 - Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured.
•Level 2 - Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs are observable in active markets are Level 2 valuation techniques.
•Level 3 - Valuation techniques in which one or more significant inputs are unobservable. Such inputs reflect our estimate of assumptions that market participants would use to price an asset or liability.
The Company holds various financial instruments that are not required to be recorded at fair value. For cash, restricted cash, accounts receivable, accounts payable, and short-term debt, the carrying amounts approximate fair value due to the short maturity of these instruments.
The following table provides the financial instruments measured at fair value on a recurring basis:
September 30, 2024
Level 1Level 2Level 3Total
Assets
Cash equivalents:
Money market fund$45,467 $— $— $45,467 
Total assets at fair value$45,467 $— $— $45,467 
Liabilities
Derivative liabilities:
Interest rate swaps— 660 — 660 
Alignment Shares liability— — 12,320 12,320 
Other long-term liabilities:
True Green II Acquisition - contingent liability— — 2,187 2,187 
Total liabilities at fair value$— $660 $14,507 $15,167 
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
December 31, 2023
Level 1Level 2Level 3Total
Assets
Derivative assets:
Interest rate swaps$— $530 $— $530 
Total assets at fair value$— $530 $— $530 
Liabilities
Alignment Shares liability— — 60,502 60,502 
Other long-term liabilities:
True Green II Acquisition - contingent liability— — 4,658 4,658 
Caldera Acquisition - contingent liability— — 2,600 2,600 
Total liabilities at fair value$— $— $67,760 $67,760 
Alignment Shares Liability
As of September 30, 2024, the Company had 796,950 Alignment Shares outstanding, all of which are held by CBRE Acquisition Sponsor, LLC (the "Sponsor"), certain former officers of CBAH and former CBAH directors. The Alignment Shares will automatically convert into shares of Class A common stock based upon the Total Return (as defined in Exhibit 4.4 to our 2021 Annual Report on Form 10-K) on the Class A common stock as of the relevant measurement date over each of the seven fiscal years following the Merger.
Upon the consummation of the Merger, Alignment Shares have no continuing service requirement and do not create an unconditional obligation requiring the Company to redeem the instruments by transferring assets. In addition, the shares convert to a variable number of Class A common stock depending on the trading price of the Class A common stock and dividends paid/payable to the holders of Class A common stock. Therefore, the shares do not represent an obligation or a conditional obligation to issue a variable number of shares with a monetary value based on any of the criteria in ASC 480, Distinguishing Liabilities From Equity. The Company determined that the Alignment Shares meet the definition of a derivative because they contain (i) an underlying (Class A common stock price), (ii) a notional amount (a fixed number of Class B common stock), (iii) no or minimal initial net investment (the Sponsor paid a de minimis amount which is less than the estimated fair value of the shares), and (iv) net settleable through a conversion of the Alignment Shares into Class A shares. As such, the Company concluded that the Alignment Shares meet the definition of a derivative, which will be presented at fair value each reporting period, with changes in fair value recorded through earnings.
The Company estimates the fair value of outstanding Alignment Shares using a Monte Carlo simulation valuation model utilizing a distribution of potential outcomes based on a set of underlying assumptions such as stock price, volatility, and risk-free interest rate. As volatility of 66% and risk-free interest rate of 3.58% are not observable inputs, the overall fair value measurement of Alignment Shares is classified as Level 3. Unobservable inputs can be volatile and a change in those inputs might result in a significantly higher or lower fair value measurement of Alignment Shares.

 
For the nine months ended September 30, 2024
For the nine months ended September 30, 2023
 Shares$Shares$
Beginning balance996,188 $60,502 1,207,500 $66,145 
Alignment Shares converted(199,238)(10)(201,250)(11)
Alignment Shares forfeited— — (10,062)(432)
Fair value remeasurement— (48,172)— (22,899)
Ending balance796,950 $12,320 996,188 $42,803 
Interest Rate Swaps
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
The Company's derivative instruments consist of interest rate swaps that are not designated as cash flow hedges or fair value hedges under accounting guidance. The Company uses interest rate swaps to manage its net exposure to interest rate changes. These instruments are custom, over-the-counter contracts with various bank counterparties that are not traded on an active market but valued using readily observable market inputs and the overall fair value measurement is classified as Level 2. As of September 30, 2024 and December 31, 2023, the notional amounts were $104.5 million and $112.8 million, respectively. For the three and nine months ended September 30, 2024, the change in fair value of interest rate swaps resulted in a loss of $3.6 million and $1.2 million, respectively. For the three and nine months ended September 30, 2023, the change in fair value of interest rate swaps resulted in a gain of $3.2 million and $3.7 million, respectively. The change in fair value of interest rate swaps is recorded as interest expense in the condensed consolidated statements of operations.
Forward Starting Interest Rate Swap
The Company entered into a forward starting interest rate swap on January 31, 2023, with an effective date of January 31, 2025, and a termination date of January 31, 2035. This transaction had a notional amount of $250.0 million and was designated as a cash flow hedge of the Company's forecasted fixed-rate or floating-rate debt issuances.
Later in 2023, the Company terminated the forward starting interest rate swap for total cash proceeds of $16.7 million. The total gain of $17.3 million was recorded as a component of Other comprehensive income in the consolidated statements of comprehensive income for the year ended December 31, 2023. The Company allocated $238.0 million of the notional amount to the incremental debt issuances under the APAF III Term Loan and $12.0 million to the APAF IV Term Loan.
Other comprehensive income of $17.3 million associated with the incremental debt issuances under the APAF III Term Loan and APAF IV Term Loan is recognized as an adjustment to interest expense, net over the term of the debt. For the three and nine months ended September 30, 2024, the adjustment to Interest expense, net was $0.4 million and $1.3 million, respectively. Approximately $1.6 million of the gain in other comprehensive income will be reclassified into earnings during the next 12 months.
The cash flow hedge was determined to be fully effective during the three and nine months ended September 30, 2024. As such, no amount of ineffectiveness has been included in net income. The amount included in other comprehensive income will be reclassified to current earnings should all or a portion of the hedge no longer be considered effective. The Company expects the hedge to remain fully effective during the remaining term of the swap.
Contingent Consideration
Caldera Acquisition
In connection with the Caldera Acquisition on December 20, 2023, contingent consideration of $8.0 million may be payable upon achieving certain power volumes generated by the acquired solar energy facilities. The Company estimated the fair value of contingent consideration for future earnout payments using a Monte Carlo simulation model. Significant assumptions used in the measurement include the estimated volumes of power generation of acquired solar energy facilities during the 12-month period since the acquisition date and the risk-adjusted discount rate associated with the business. As the inputs are not observable, the overall fair value measurement of the contingent consideration is classified as Level 3. As of September 30, 2024 and December 31, 2023, the fair value of the contingent consideration was zero and $2.6 million, respectively, and is included in other current liabilities in the condensed consolidated balance sheets. For the three and nine months ended September 30, 2024, the Company recorded a gain on remeasurement of contingent liability of $0.9 million and $2.6 million, respectively.
True Green II Acquisition
In connection with the acquisition of a portfolio of 58 solar energy facilities with a combined nameplate capacity of 220 MW on February 15, 2023 (the "True Green II Acquisition"), contingent consideration of $10.0 million may be payable upon the seller's completion of in-development solar energy facilities and the Company obtaining tax equity financing. The Company estimated the fair value of the contingent consideration by using the expected cash flow approach. These cash flows were then discounted to present value using the risk-adjusted discount rate associated with the business. As the inputs are not observable, the overall fair value measurement of the contingent consideration is classified as Level 3. As of September 30, 2024 and December 31, 2023, the fair value of the contingent consideration was $2.2 million and $4.7 million, respectively, and was included in other current liabilities in the condensed consolidated balance sheets. For the three and nine months ended September 30, 2024, the Company recorded loss of zero and $0.2 million, respectively, on fair value remeasurement of
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
contingent liability associated with the True Green II Acquisition in the condensed consolidated statements of operations. The loss was recorded due to the remeasurement of the contingent liability based on the actual amount of tax equity financing received. For the three and nine months ended September 30, 2023, there was no gain or loss on fair value remeasurement of the contingent liability. During the three and nine months ended September 30, 2024, the Company paid zero and $2.7 million, respectively, to settle a portion of the contingent liability.
Solar Acquisition
In connection with the acquisition of a portfolio of sixteen solar energy facilities with a combined nameplate capacity of 61.5 MW on December 22, 2020 (the "Solar Acquisition"), contingent consideration of $3.1 million may be payable upon achieving certain market power rates and $7.4 million upon achieving certain power volumes generated by the acquired solar energy facilities. The Company estimated the fair value of the contingent consideration for future earnout payments using a Monte Carlo simulation model. Significant assumptions used in the measurement include the estimated volumes of power generation of acquired solar energy facilities during the 18-36-month period since the acquisition date, market power rates during the 36-month period, and the risk-adjusted discount rate associated with the business. As the inputs are not observable, the overall fair value measurement of the contingent consideration is classified as Level 3.
The liability for the contingent consideration associated with production volumes expired on June 30, 2022. The 36-month measurement period for the contingent liability associated with market power rates ended as of December 31, 2023, and the contingency was resolved with a $3.1 million payment in 2024. The liability for the contingent consideration associated with power rates is included in other current liabilities in the condensed consolidated balance sheets at the estimated fair value of zero and $3.1 million as of September 30, 2024 and December 31, 2023, respectively. For the three and nine months ended September 30, 2024, the Company recorded no gain or loss on fair value remeasurement of contingent consideration associated with power rates. For the three and nine months ended September 30, 2023, the Company recorded a loss on fair value remeasurement of contingent consideration associated with power rates of $0.1 million and $0.2 million, respectively, within operating income in the condensed consolidated statements of operations. Gains and losses are recorded due to changes in significant assumptions used in the measurement, including the actual versus estimated volumes of power generation of acquired solar energy facilities and market power rates.
8.Equity
As of September 30, 2024, the Company had 988,591,250 authorized and 158,989,890 issued and outstanding shares of Class A common stock. As of December 31, 2023, the Company had 988,591,250 authorized and 158,999,886 issued and outstanding shares of Class A common stock. Class A common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the Company’s board of directors. As of September 30, 2024, and December 31, 2023, no common stock dividends have been declared.
As of September 30, 2024, and December 31, 2023, the Company had 796,950 and 996,188 authorized and issued shares of Class B common stock, respectively, also referred to as the Alignment Shares. Refer to Note 7, "Fair Value Measurements," for further details.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
9.Redeemable Noncontrolling Interests
The changes in the components of redeemable noncontrolling interests are presented in the table below:
 
For the nine months ended September 30,
 20242023
Redeemable noncontrolling interest, beginning balance$26,044 $18,133 
Cash distributions(2,112)(1,747)
Accrued distributions(864)— 
Redemption of redeemable noncontrolling interests— (4,301)
Assumed redeemable noncontrolling interest through business combination(100)11,341 
Net (loss) income attributable to redeemable noncontrolling interest(1,151)175 
Redeemable noncontrolling interest, ending balance$21,817 $23,601 
10.Leases
The following table presents the components of operating lease cost for the three and nine months ended September 30, 2024, and 2023:
For the three months ended September 30,
For the nine months ended September 30,
2024202320242023
Operating lease expense$4,085 $2,757 $12,337 $7,931 
Variable lease expense556 479 1,413 1,290 
Total lease expense$4,641 $3,236 $13,750 $9,221 

The following table presents supplemental information related to our operating leases:
For the nine months ended September 30,
20242023
Cash paid for operating leases$13,202 $7,235 
Operating lease assets obtained in exchange for new operating lease liabilities$15,654 $64,904 
Weighted-average remaining lease term, years23.3 years23.3 years
Weighted average discount rate5.77 %5.32 %

Maturities of operating lease liabilities as of September 30, 2024, are as follows:

2024$3,967 
202515,970 
202616,120 
202716,219 
202816,275 
Thereafter300,872 
Total$369,423 
Less: Present value discount(174,341)
Lease liability$195,082 
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
11.Commitments and Contingencies
Legal
The Company is a party to a number of claims and governmental proceedings which are ordinary, routine matters incidental to its business. In addition, in the ordinary course of business the Company periodically has disputes with vendors and customers. The outcomes of these matters are not expected to have, either individually or in the aggregate, a material adverse effect on the Company’s financial position or results of operations.
Performance Guarantee Obligations
The Company guarantees certain specified minimum solar energy production output under the Company’s PPA agreements, generally over a term of 10, 15 or 25 years. The solar energy systems are monitored to ensure these outputs are achieved. The Company evaluates if any amounts are due to customers based upon not meeting the guaranteed solar energy production outputs at each reporting period end. As of September 30, 2024, and December 31, 2023, the guaranteed minimum solar energy production has been met and the Company has recorded no performance guarantee obligations.
Purchase Commitments
In the ordinary course of business, the Company makes various commitments to purchase goods and services from specific suppliers. As of September 30, 2024, and December 31, 2023, the Company had zero outstanding non-cancellable commitments to purchase solar modules.

12.Related Party Transactions
There was $0.1 million and $0.1 million due to related parties, as discussed below, and no amounts due from related parties as of September 30, 2024, and December 31, 2023, respectively. Additionally, in the normal course of business, the Company conducts transactions with affiliates, such as:
Blackstone Credit Facilities
Under the APAF Term Loan, APAF III Term Loan, APAF IV Term Loan, and APACF II Facility, subsidiaries of The Blackstone Group (“Blackstone”), a related party, serve as agents between the Company and a consortium of third-party lenders. See Note 6, "Debt" for further details.
During the three months ended September 30, 2024 and 2023, the Company paid $0.1 million and $0.1 million, respectively of loan issuance costs to Blackstone. During the nine months ended September 30, 2024 and 2023, the Company paid $0.3 million and $0.9 million, respectively, of loan issuance costs to Blackstone.
Commercial Collaboration Agreement with CBRE
In connection with the Merger, the Company and CBRE entered into a commercial collaboration agreement (the “Commercial Collaboration Agreement”) effective upon the Merger, pursuant to which, among other things, CBRE will invite the Company to join CBRE’s strategic supplier program and CBRE will promote the Company as its preferred clean energy renewable provider/partner, CBRE and the Company will create a business opportunity referral program with CBRE’s brokers, CBRE will reasonably collaborate with the Company to develop and bring to market new products and/or bundles for Company’s customers, the Company will consider in good faith inviting CBRE to become a solar tax equity partner for the Company, on a non-exclusive basis, on market terms to be mutually agreed and CBRE will provide, at no cost to the Company, reasonable access to data-driven research and insights prepared by CBRE (subject to certain exceptions). The Commercial Collaboration Agreement continues for a period of seven years, with automatic one-year renewal period, unless earlier terminated by either party in accordance with the terms set forth therein.
On December 9, 2022, the Company amended the Commercial Collaboration Agreement to update the business arrangement and associated fee approach, which provides that CBRE employees, including brokers, non-brokers and other employees who partnered with the Company to bring clean electrification solutions to CBRE’s client base, who met certain minimum criteria (“Qualified Referral”) and who documented such Qualified Referral via an executed Development Agreement, would receive a
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
development fee of between $0.015/watt to $0.030/watt depending on the business segment and teams of such CBRE employees. For the nine months ended September 30, 2024 and 2023, the Company did not incur any costs associated with the Commercial Collaboration Agreement. As of September 30, 2024 and December 31, 2023, there were no amounts due to CBRE associated with the Commercial Collaboration Agreement.
Master Services Agreement with CBRE
On June 13, 2022, the Company, through its wholly-owned subsidiary, entered into a Master Services Agreement ("MSA") with CBRE under which CBRE assists the Company in developing solar energy facilities. For both the three months ended September 30, 2024 and 2023, the Company incurred $0.2 million for development services provided under the MSA. For the nine months ended September 30, 2024 and 2023, the Company incurred $0.5 million and $0.4 million, respectively, for development services provided under the MSA. As of September 30, 2024 and December 31, 2023, there was $0.1 million and $0.1 million due to CBRE for development services provided under the MSA.
Lease Agreements with Link Logistics and CBRE
The Company has a right to use rooftops to develop and operate solar facilities under lease agreements with subsidiaries of Link Logistics Real Estate Management LLC (“Link Logistics”), a Blackstone portfolio company, and subsidiaries of CBRE. As of September 30, 2024, the Company recognized operating lease assets and operating lease liabilities of $27.6 million and $27.7 million, respectively, in the condensed consolidated balance sheet related to these leases, which have a weighted average remaining lease term of 29 years. As of December 31, 2023, the Company recognized operating lease assets and operating lease liabilities of $24.3 million in the condensed consolidated balance sheet related to these leases. During the three months ended September 30, 2024 and 2023, payments made under these leases were $0.4 million and zero, respectively. During nine months ended September 30, 2024 and 2023, payments made under these leases were $1.8 million and zero, respectively.
CEO Transition Costs
On April 26, 2024, Lars Norell resigned as Co-Chief Executive Officer and director of the Company. There were no disagreements between the Company and Mr. Norell that led to his decision to resign as Co-Chief Executive Officer and director. The board of directors has appointed Gregg Felton as sole Chief Executive Officer of the Company.
In connection with his resignation, Mr. Norell has signed a separation and release agreement (the “Agreement”), where he will receive severance, which includes (i) eighteen (18) months’ base salary, for an aggregate amount of approximately $0.9 million, payable as salary continuation in accordance with the Company’s normal pay schedule, (ii) a subsidized COBRA continuation coverage for 12 months, or if earlier, until he becomes eligible for medical benefits from a subsequent employer, (iii) a pro rata short-term incentive bonus for plan year 2024, to be paid in March 2025 at the same time that such bonuses are paid to current employees, and (iv) an additional payment of approximately $1.0 million, less applicable payroll deductions, which was paid in a lump sum on the eighth day after the execution of the Agreement.

During the three and nine months ended September 30, 2024, the Company recognized zero and $2.2 million, respectively, of expenses in connection with the CEO transition which are included in general and administrative expenses in the condensed consolidated statement of operations. As of September 30, 2024, there are $0.9 million of remaining payments under the Agreement, which are included in other liabilities in the condensed consolidated balance sheet.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
13.Earnings per Share
The calculation of basic and diluted earnings per share for the three and nine months ended September 30, 2024 and 2023 was as follows (in thousands, except share and per share amounts):
 
For the three months ended September 30,
For the nine months ended September 30,
 2024202320242023
Net income attributable to Altus Power, Inc.17,638 5,330 62,792 17,772 
Income attributable to participating securities(1)
(87)(33)(312)(113)
Net income attributable to common stockholders - basic and diluted17,551 5,297 62,480 17,659 
Class A Common Stock
Weighted average shares of common stock outstanding - basic(2)
159,990,880 158,719,684 159,641,018 158,687,373 
Dilutive restricted stock— 265,133 — 260,885 
Dilutive RSUs4,402,914 1,213,337 6,079,540 2,017,424 
Weighted average shares of common stock outstanding - diluted164,393,794 160,198,154 165,720,558 160,965,682 
Net income attributable to common stockholders per share - basic$0.11 $0.03 $0.39 $0.11 
Net income attributable to common stockholders per share - diluted$0.11 $0.03 $0.38 $0.11 

(1) Represents the income attributable to 796,950 and 996,188 Alignment Shares outstanding as of September 30, 2024 and 2023, respectively.

(2) For the three months and nine months ended September 30, 2023, the calculation of basic weighted average shares of common stock outstanding excludes 271,259 of the Company's Class A common stock provided to holders of the common stock of the Company prior to the Merger, that are subject to vesting conditions.
14.Stock-Based Compensation
The Company recognized $4.7 million and $4.2 million of stock-based compensation expense for the three months ended September 30, 2024, and 2023, respectively. The Company recognized $4.7 million and $11.3 million of stock-based compensation expense for the nine months ended September 30, 2024, and 2023, respectively. As of September 30, 2024, the Company had $29.2 million of unrecognized share-based compensation expense related to unvested restricted units, respectively, which the Company expects to recognize over a weighted-average period of approximately 2 years.
Legacy Incentive Plans
Prior to the Merger, Legacy Altus maintained the APAM Holdings LLC Restricted Units Plan, adopted in 2015 (the “APAM Plan”) and APAM Holdings LLC adopted the 2021 Profits Interest Incentive Plan (the “Holdings Plan”, and together with the APAM Plan, the “Legacy Incentive Plans”), which provided for the grant of restricted units that were intended to qualify as profits interests to employees, officers, directors and consultants. In connection with the Merger, vested restricted units previously granted under the Legacy Incentive Plans were exchanged for shares of Class A Common Stock, and unvested Altus Restricted Shares under each of the Legacy Incentive Plans were exchanged for restricted Class A Common Stock with the same vesting conditions. As of September 30, 2024, and December 31, 2023, zero and 210,710 shares of Class A Common Stock were restricted under the Holdings Plan, respectively. No further awards will be made under the Legacy Incentive Plans.
The fair value of the granted units was determined using the Black-Scholes Option Pricing model and relied on assumptions and inputs provided by the Company. All option models utilize the same assumptions with regard to (i) current valuation, (ii) volatility, (iii) risk-free interest rate, and (iv) time to maturity. The models, however, use different assumptions with regard to the strike price which vary by award.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
Omnibus Incentive Plan
On July 12, 2021, the Company entered into the Management Equity Incentive Letter with each of Mr. Felton and Mr. Norell pursuant to which, on February 5, 2022, the compensation committee granted to Mr. Felton and Mr. Norell, together with other senior executives, including Mr. Savino, Chief Construction Officer, and Mr. Weber, Chief Financial Officer, restricted stock units (“RSUs”) under the Omnibus Incentive Plan (the "Incentive Plan") that are subject to time-based and, for the named executive officers and certain other executives, eighty percent (80%) of such RSUs also further subject to performance-based vesting, with respect to an aggregate five percent (5%) of the Company’s Class A common stock on a fully diluted basis, excluding the then-outstanding shares of the Company’s Class B common stock or any shares of the Company’s Class A common stock into which such shares of the Company’s Class B common stock are or may be convertible. Subject to continued employment on each applicable vesting date, the time-based RSUs generally vest 33 1/3% on each of the third, fourth and fifth anniversaries of the Closing, and the performance-based RSUs vest with respect to 33 1/3% of the award upon the achievement of the above time-based requirement and the achievement of a hurdle representing a 25% annual compound annual growth rate measured based on an initial value of $10.00 per share (i.e., on each of the third anniversary, the fourth anniversary, and the fifth anniversary of the date of grant, the stock price performance hurdle shall be $19.53, $24.41, $30.51, respectively), which vesting is eligible until the fifth anniversary of grant date.
On March 28, 2024, the vesting conditions of such performance-based RSUs were modified by the compensation committee to set the hurdles at $14.00, $18.00, and $22.00, respectively. This modification impacted five grantees and resulted in $3.1 million of incremental expense. As of September 30, 2024, the unrecognized expense related to the modification was $1.1 million, which the Company expects to recognize over a weighted average period of 2 years.
Additionally, under the Incentive Plan the Company granted performance stock units ("PSUs") that are subject to market and service vesting conditions, each of which represents the right to receive one share of the Company's Class A Common Stock and which vest in one installment on the third anniversary of the grant date based upon the Company's total stockholder return when compared to the Invesco Solar ETF (TAN), subject to certain adjustments, and the Russell 2000 index, assigning a weight of 50% to each. The number of PSUs vested, and thus shares of Class A Common Stock issued, could range from 0 to 150% of such PSUs.
During the three and nine months ended September 30, 2024, the Company granted under the Incentive Plan an additional 58,357 and 3,081,484 RSUs, respectively, that are subject to time-based vesting as described above, with a weighted average grant date fair value per share of $4.15 and $4.87, respectively. During the nine months ended September 30, 2024, the Company also granted 546,024 PSUs that are subject to market-based vesting as described above, with a grant date fair value per share of $5.22. Further, the Company granted 751,773 of incentive performance stock units ("GW Plan PSUs") that cliff vest on December 31, 2026, if the Company adds 1.1 gigawatt of installed solar capacity starting January 1, 2024 and subject to continued employment on the vesting date. The number of GW Plan PSUs vested, and thus shares of Class A Common Stock issued, will be calculated based on the average stock price of the Company's Class A Common Stock during the twenty trading days prior to and including (if applicable) the vesting date (the "AMPS Price") as follows:
AMPS PricePayout
<$8
40 %
$8-10.99
80 %
$11-11.50
100 %
$11.51-12.99
110 %
$13+
120 %
GW Plan PSUs have a grant date fair value per share of $3.95. No PSUs or GW Plan PSUs were granted during the three months ended September 30, 2024.
As of both September 30, 2024, and December 31, 2023, there were 30,992,545 shares of the Company's Class A common stock authorized for issuance under the Incentive Plan. The number of shares authorized for issuance under the Incentive Plan will increase on January 1 of each year from 2024 to 2031 by the lesser of (i) 5% of the number of shares outstanding as of the close of business on the immediately preceding December 31 and (ii) the number of shares determined by the Company's board of directors. The number of shares authorized for issuance under the Incentive Plan increased by 5% of outstanding shares as
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Altus Power, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
described in the foregoing on January 1, 2022 and January 1, 2023. The number of shares authorized for issuance under the Incentive Plan did not increase on January 1, 2024.
For the three months ended September 30, 2024, and 2023, the Company granted 58,357 and 5,000 RSUs, respectively, and recognized $4.7 million and $4.2 million of stock-based compensation expense, respectively, in relation to the Incentive Plan. For the nine months ended September 30, 2024 and 2023, the Company granted 4,379,281 and 3,026,148 RSUs, respectively, and recognized $4.7 million and $11.3 million, respectively, of stock-based compensation expense in relation to the Incentive Plan. For the three months ended September 30, 2024, and 2023, 112,690 and 34,228 RSUs were forfeited, respectively. For the nine months ended September 30, 2024 and 2023, 4,631,282 and 45,282 RSUs were forfeited, respectively.
Included in forfeited RSUs for the nine months ended September 30, 2024, are the 4,283,452 unvested RSUs and PSUs granted under the Incentive Plan to Mr. Norell, which were forfeited in connection with the CEO transition described in Note 12, "Related Party Transactions." This forfeiture resulted in the reversal of $8.7 million of previously recognized stock-based compensation expense during the second quarter of 2024.
Employee Stock Purchase Plan
On December 9, 2021, we adopted the 2021 Employee Stock Purchase Plan ("ESPP"), which provides a means by which eligible employees may be given an opportunity to purchase shares of the Company’s Class A common stock. As of both September 30, 2024, and December 31, 2023, there were 4,662,020 shares of the Company's Class A common stock authorized for issuance under the ESPP. The number of shares authorized for issuance under the ESPP will increase on January 1 of each year from 2024 to 2031 by the lesser of (i) 1% of the number of shares outstanding as of the close of business on the immediately preceding December 31 and (ii) the number of shares determined by the Company's board of directors. No shares of the Company’s Class A common stock were issued and no stock-based compensation expense was recognized in relation to the ESPP for the nine months ended September 30, 2024, and 2023. The number of shares authorized for issuance under the ESPP increased by 1% of outstanding shares as described in the foregoing on January 1, 2022 and January 1, 2023. The number of shares authorized for issuance under the ESPP did not increase on January 1, 2024.
15.Income Taxes
The income tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate as adjusted for discrete items arising in that quarter.
For the three months ended September 30, 2024, and 2023, the Company had income tax benefit of $5.1 million and $1.9 million, respectively. For the nine months ended September 30, 2024, and 2023, the Company had income tax benefit of $21.2 million and income tax expense of $0.1 million, respectively. For the three and nine months ended September 30, 2024, the effective tax rate differs from the U.S. statutory rate primarily due to the fair value remeasurement of Alignment Shares, nondeductible compensation, net losses attributable to noncontrolling interests and redeemable noncontrolling interests, and state income taxes. Additionally, there was an income tax benefit resulting from the forfeiture of stock awards associated with the CEO transition. For the three and nine months ended September 30, 2023, the effective tax rate differs from the U.S. statutory rate primarily due to the fair value remeasurement of Alignment Shares, nondeductible compensation, net losses attributable to noncontrolling interests and redeemable noncontrolling interests, state income taxes, and other miscellaneous items.
The Company accounts for its nonrefundable transferable investment tax credits ("ITCs") under ASC 740 using the flow-through method and has elected to consider the ability to transfer its ITCs in assessing its need for a valuation allowance. During the three months ended September 30, 2024, the Company, through its consolidated tax equity partnerships, entered into tax credit purchase agreements ("TCPAs") with a third-party purchaser to sell the Section 48(a) ITCs generated by certain of the Company’s solar projects during tax year ending December 31, 2024. In accordance with the TCPA, the Company received cash proceeds of $23.4 million, however, the ITCs have not been transferred as of September 30, 2024, and as such, the Company recognized a liability to transfer ITCs within other current liabilities in the condensed consolidated balance sheet. Transfer of ITCs did not have a material impact on the Company's income tax benefit recognized for the three and nine months ended September 30, 2024. The Company did not enter into any TCPAs during the three and nine months ended September 30, 2023.
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Altus Power, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
16.Subsequent Events
The Company has evaluated subsequent events from September 30, 2024, through November 12, 2024, which is the date the unaudited condensed consolidated financial statements were available to be issued. There are no subsequent events requiring recording or disclosure in the condensed consolidated financial statements.

******
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of financial condition and operating results for Altus Power, Inc. (as used in this section, “Altus Power,” “we,” “us,” “our,” or the “Company”) has been prepared by Altus Power’s management. You should read the following discussion and analysis together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q, and our 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2024 (the “2023 Annual Report on Form 10-K”). Any references in this section to “we,” “our” or “us” shall mean Altus Power. In addition to historical information, this Quarterly Report on Form 10-Q for the period ended September 30, 2024 (this “Report”), including this management’s discussion and analysis (“MD&A”), contains statements that are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements do not convey historical information but relate to predicted or potential future events and financial results, such as statements of our plans, strategies and intentions, or our future performance or goals that are based upon management's current expectations. Our forward-looking statements can often be identified by the use of forward-looking terminology such as “believes,” “expects,” “intends,” “may,” “could,” “will,” “should,” “plans,” “projects,” “forecasts,” “seeks,” “anticipates,” “goal,” “objective,” “target,” “estimate,” “future,” “outlook,” “vision,” or variations of such words or similar terminology. Investors and prospective investors are cautioned that such forward-looking statements are only projections based on current estimations. These statements involve risks and uncertainties and are based upon various assumptions. Such risks and uncertainties include, but are not limited to the risks as described in the “Risk Factors” in our 2023 Annual Report on Form 10-K. These risks and uncertainties, among others, could cause our actual future results to differ materially from those described in our forward-looking statements or from our prior results. Any forward-looking statement made by us in this Report is based only on information currently available to us and speaks to circumstances only as of the date on which it is made. Except as required by applicable law, we are not obligated to update these forward-looking statements, even though our situation may change in the future.

Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Altus Power’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. These risks, uncertainties, assumptions and other important factors include, but are not limited to: (1) the risk that pending acquisitions may not close in the anticipated timeframe or at all due to a closing condition not being met; (2) failure to obtain required consents or regulatory approvals in a timely manner or otherwise; (3) the ability of Altus Power to successfully integrate the acquisition of solar assets into its business and generate profit from their operations; (4) the ability of Altus Power to retain customers and maintain and expand relationships with business partners, suppliers and customers; (5) the risk of litigation and/or regulatory actions related to the proposed acquisition of solar assets; and (6) the possibility that Altus Power may be adversely affected by other economic, business, regulatory, credit risk and/or competitive factors.
Overview
We are a developer, owner and operator of large-scale roof, ground and carport-based photovoltaic (“PV”) and energy storage systems serving commercial and industrial, public sector and community solar customers. Our mission is to create a clean electrification ecosystem and drive the clean energy transition of our customers across the United States while simultaneously enabling the adoption of corporate environmental, social and governance (“ESG”) targets. In order to achieve our mission, we develop, own and operate a network of solar generation and energy storage facilities. We believe we have the in-house expertise to develop, build and provide operations and maintenance and customer servicing for our assets. The strength of our platform is enabled by premier sponsorship from The Blackstone Group (“Blackstone”), which provides an efficient capital source and access to a network of portfolio companies, and CBRE Group, Inc. (“CBRE”), which provides direct access to its portfolio of owned and managed commercial and industrial (“C&I”) properties.

We own systems across the United States from Hawaii to Maine. Our portfolio currently consists of over 1 gigawatt (“GW”) of solar PV. We have long-term power purchase agreements (“PPAs”) with over 450 enterprise entities and contracts with approximately 30,000 residential customers which are serviced by over 300 megawatts ("MW") of community solar projects currently in operation. Our community solar projects are currently serving customers in 9 states. We also participate in numerous renewable energy credit (“REC”) programs throughout the country. We have experienced significant growth in the last fiscal year as a product of organic growth and targeted acquisitions and operate in 25 states, providing clean electricity to our customers equal to the electricity consumption of over 100,000 homes, displacing over 800,000 tons of CO2 emissions per annum.
Key Factors Affecting Our Performance
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Our results of operations and our ability to grow our business over time could be impacted by a number of factors and trends that affect our industry generally, as well as new offerings of services and products we may acquire or seek to acquire in the future. Additionally, our business is concentrated in certain markets, putting us at risk of region-specific disruptions such as adverse economic, regulatory, political, weather and other conditions. See “Risk Factors” in our 2023 Annual Report on Form 10-K for further discussion of risks affecting our business. We believe the factors discussed below are key to our success:
Competition
We compete in the C&I scale renewable energy space with utilities, developers, independent power producers, pension funds and private equity funds for new investment opportunities. We expect to grow our market share because of the following competitive strengths:
•Development Capability: We have established an innovative approach to the development process. From site identification and customer origination through the construction phase, we’ve established a streamlined process enabling us to further create the scalability of our platform and significantly reduce the costs and time in the development process. Part of our attractiveness to our customers is our ability to ensure a high level of execution certainty. We anticipate that this ability to originate, source, develop and finance projects will ensure we can continue to grow and meet the needs of our customers.
•Long-term Revenue Contracts: Our C&I solar generation contracts have a typical length of 20 years or longer, creating long-term relationships with customers that allow us to cross-sell additional current and future products and services. The average remaining life of our current contracts is approximately 15 years. These long-term contracts are either structured at a fixed rate, often with an escalator, or floating rate pegged at a discount to the prevailing local utility rates. We refer to these latter contracts as variable rate, and as of September 30, 2024, these variable rate contracts make up approximately 54% of our current installed portfolio. Contracts with a fixed rate and a fixed rate with an escalator make up approximately 28% and 18% of our current installed portfolio, respectively. During the nine months ended September 30, 2024, overall utility rates generally increased in states where we have projects under variable rate contracts, but there can be no guarantee that they will continue to do so. The realization of solar power price increases varies depending on region, utility and terms of revenue contract, but generally, we would benefit from such increases in the future as inflationary pressures persist.
•Flexible Financing Solutions: We have a market-leading cost of capital in an investment-grade rated scalable credit facility from Blackstone, which enables us to be competitive bidders in asset acquisition and development. In addition to our Blackstone term loan, we also have financing available through a revolving credit facility which has $200 million of committed capacity with 5-year maturity and interest of SOFR plus spread between 160 - 260 basis points on drawn balances, a construction facility which has $200 million of committed capacity with a 5-year maturity and interest of SOFR plus 350 basis points on drawn balances, and a term loan which has $100 million of additional committed capacity with a 6-year maturity and an initial fixed interest rate of 8.50%, subject to adjustments.
•Leadership: We have a strong executive leadership team who has extensive experience in capital markets, solar development and solar construction, with over 20 years of experience each. Moreover, through the transaction structure, management and employees will continue to own a significant interest in the Company.
•CBRE Partnership: Our partnership with CBRE, the largest global real estate services company, provides us with a clear path to creating new customer relationships. Ninety percent (90%) of the Fortune 100 are CBRE clients, providing a significant opportunity for us to expand our customer base.
Seasonality
The amount of electricity our solar energy systems produce is dependent in part on the amount of sunlight, or irradiation, where the assets are located. Because shorter daylight hours in winter months and poor weather conditions due to rain or snow results in less irradiation, the output of solar energy systems will vary depending on the season and the overall weather conditions in a year. Historically, sales of energy generated from our solar energy systems have contributed on average approximately 18% to 20% of our annual revenues during the first quarter, 25% to 29% during the second quarter, 29% to 31% during the third quarter, and 22% to 26% during the fourth quarter. While we expect seasonal variability to occur, the geographic diversity in our assets helps to mitigate our aggregate seasonal variability.
Another aspect of seasonality relates to our construction program, which is more productive during warmer weather months and generally results in project completion during fourth quarter. This is particularly relevant for our projects under construction in colder climates like the Northeast.
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Pipeline
As of September 30, 2024, our pipeline of opportunities totaled over one gigawatt and is comprised of a mix of (i) development projects for solar generating and storage projects that are not yet built, which primarily consist of those we are looking to acquire from the current owner of such project and (ii) existing solar generating and storage projects currently in operation that we are looking to acquire from the current owner of the facilities. As an independent solar power producer, we are not regularly engaged in our own early stage development of solar generating and storage projects and generally prefer to source opportunities from our early stage channel partners, viewing those as a more productive and efficient way to grow our business.
Our pipeline is dynamic with new opportunities being evaluated by our team each quarter as possible candidates to be included in the pipeline. Also, during the quarter, we evaluate our existing pipeline opportunities and may determine that certain pipeline opportunities no longer meeting our needs. Upon such a determination, those pipeline opportunities would then be excluded from the pipeline. As a result, our pipeline changes regularly and is very fluid. Given the number of potential pipeline opportunities and the confidential nature of such opportunities, we do not identify these opportunities specifically and thus it is difficult to show when a project might have been added or removed from our pipeline and at what phase.
As discussed in the table below, there are five types of pipeline opportunities for which we’ve identified both the number of megawatts subject to such opportunities and the probability of their completion:
Type of Pipeline Opportunity and PhaseSize, MWProbability of completion
Development projects
Development solar generating and storage projects - in construction or pre-construction phase (not yet built)162High
Development solar generating or storage projects - in contract / in negotiation phase (not yet built)258Medium
Operating acquisitions
Acquisitions of operating solar generating and storage projects - in closing phase (existing projects)8High
Acquisitions of operating solar generating and storage projects - in negotiation (existing projects)218Medium
Development projects and operating acquisitions
Development projects and operating acquisitions - initial engagement phaseRemaining projectsLow
Total pipeline of opportunities> 1,000
We consider development solar generating and storage projects that are currently in construction or pre-construction primarily as those projects developed by other parties, such as our channel partners, that we may acquire.
We classify development projects in the “in construction” phase as having commenced construction but the project is not yet operational. In the case of “pre-construction” projects, the execution of definitive documents to acquire development rights may not have occurred or the projects are waiting for the satisfaction of one or more critical components to become in-construction, such as submission and approval of an interconnection application, site control, awarded revenue contract, final permits, etc.
We consider development projects that are in the “in contract / in negotiation” phase to include projects where we are currently negotiating commercial terms with clients or channel partners and working toward the signing of documents such as a letter of intent, lease, or power purchase agreement.
We consider acquisitions of operating solar generating and storage projects in the “in closing” phase to include deals where we have entered exclusivity agreements with the seller and/or have agreed upon terms and are working toward the execution of definitive purchase agreements.
We consider acquisitions of operating solar generating and storage projects that are in the “in negotiation” phase to include deals where we do not have exclusivity agreements in place, but have completed our initial valuation of the projects, determined it meets our needs and are working to negotiate and agree upon commercial terms with the seller.
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The remainder of our pipeline of development projects and operating acquisitions are in the “initial engagement” phase. In both cases, we are in the early stage of sourcing the opportunity and we are actively evaluating and have not yet determined whether they meet our needs or if we can agree on satisfactory terms and, as such, these early stage projects should not be relied upon in the making of investment decisions as there is no certainty that such early stage projects will be consummated in the next twelve months, if at all. Please refer to the “Risk Factors” in our 2023 Annual Report on Form 10-K.
Key Financial and Operational Metrics
We regularly review a number of metrics, including the following key operational and financial metrics, to evaluate our business, measure our performance and liquidity, identify trends affecting our business, formulate our financial projections and make strategic decisions.
Megawatts Installed
Megawatts installed represents the aggregate megawatt nameplate capacity of solar energy systems for which panels, inverters, and mounting and racking hardware have been installed on premises.
As of September 30,
Change
20242023MW%
Megawatts installed
1,013 721 292 40 %
Cumulative megawatts installed increased from 721 MW as of September 30, 2023, to 1,013 MW as of September 30, 2024, a 40% increase.

As of September 30, 2024
As of December 31, 2023
Change
MW%
Megawatts installed
1,013 896 117 13 %
Cumulative megawatts installed increased from 896 MW as of December 31, 2023, to 1,013 MW as of September 30, 2024, a 13% increase.

The following table provides an overview of megawatts installed by state as of September 30, 2024:

StateMegawatts installedShare, percentage
New York20520.2%
New Jersey18518.3%
Massachusetts15014.8%
California12011.9%
North Carolina676.6%
Minnesota605.9%
South Carolina424.1%
Hawaii343.4%
Maine333.2%
All other11711.6%
Total1,013100.0%

“Capacity Factor” means the amount of electricity that a generating unit produces over a period of time divided by the amount of electricity it could have produced if it had run at full power over that same time period (e.g., in the case of solar energy, if the sun was shining brightly 24 hours a day, seven days a week). For the nine months ended September 30, 2024, the capacity factor of our solar generating facilities ranged from 9.1% to 26.9% across each of the states in which we operate and the weighted average capacity across our entire portfolio was 14.6%. The size of our portfolio is approximately 1 GW with the average size of solar facilities of 2 MW, and these facilities are located across 25 different states in our portfolio. Given this, we
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do not view the Capacity Factor of any one of our solar generating facilities, or the change in that Capacity Factor due to weather, seasonality or other factors, to be material to our operating revenues.

Megawatt Hours Generated
Megawatt hours (“MWh”) generated represents the output of solar energy systems from operating solar energy systems. MWh generated relative to nameplate capacity can vary depending on multiple factors such as design, equipment, location, weather and overall system performance. Megawatt hours generated excludes the output of solar energy systems under the master lease agreement with Vitol, as described in Note 5, "Acquisitions," to our condensed consolidated financial statements included elsewhere in this Report.
Three months ended September 30,
Change
20242023MWh%
Megawatt hours generated
333,000 239,000 94,000 39 %

Megawatt hours generated increased from 239,000 MWh for the three months ended September 30, 2023, to 333,000 MWh for the three months ended September 30, 2024, a 39% increase.

Nine months ended September 30,
Change
20242023MWh%
Megawatt hours generated
874,000 638,000 236,000 37 %

Megawatt hours generated increased from 638,000 MWh for the nine months ended September 30, 2023, to 874,000 MWh for the nine months ended September 30, 2024, a 37% increase.
Non-U.S. GAAP Financial Measures
Adjusted EBITDA
We define adjusted EBITDA as net income plus net interest expense, depreciation, amortization and accretion expense, income tax expense or benefit, acquisition and entity formation costs, stock-based compensation expense or benefit, and excluding the effect of certain non-recurring items we do not consider to be indicative of our ongoing operating performance such as, but not limited to, gain or loss on fair value remeasurement of contingent consideration, gain or loss on disposal of property, plant and equipment, change in fair value of Alignment Shares liability, loss on extinguishment of debt, CEO transition costs (see Note 12, "Related Party Transactions," to our condensed consolidated financial statements included elsewhere in this Report for further details), and other miscellaneous items of other income and expenses.
We define adjusted EBITDA margin as adjusted EBITDA divided by operating revenues.
Adjusted EBITDA and adjusted EBITDA margin are non-U.S. GAAP financial measures that we use to measure our performance. We believe that investors and analysts also use adjusted EBITDA and adjusted EBITDA margin in evaluating our operating performance. These measurements are not recognized in accordance with U.S. GAAP and should not be viewed as an alternative to U.S. GAAP measures of performance. The U.S. GAAP measure most directly comparable to adjusted EBITDA is net income and to adjusted EBITDA margin is net income over operating revenues. The presentation of adjusted EBITDA and adjusted EBITDA margin should not be construed to suggest that our future results will be unaffected by non-cash or non-recurring items. In addition, our calculation of adjusted EBITDA and adjusted EBITDA margin are not necessarily comparable to adjusted EBITDA and adjusted EBITDA margin as calculated by other companies and investors and analysts should read carefully the components of our calculations of these non-U.S. GAAP financial measures.
We believe adjusted EBITDA is useful to management, investors and analysts in providing a measure of core financial performance adjusted to allow for comparisons of results of operations across reporting periods on a consistent basis. Factors in this determination include the exclusion of (1) variability due to gains or losses related to fair value remeasurement of contingent consideration and the change in fair value of Alignment Shares liability, (2) strategic decisions to acquire businesses, dispose of property, plant and equipment or extinguish debt, and (3) the non-recurring nature of stock-based compensation, CEO transition costs, and other miscellaneous items of income and expense, which affect results in a given period or periods. In addition, adjusted EBITDA represents the business performance of the Company before the application of statutory income tax rates and tax adjustments corresponding to the various jurisdictions in which the Company operates, as well as interest expense and depreciation, amortization and accretion expense, which are not representative of our ongoing operating performance.
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Adjusted EBITDA is also used by our management for internal planning purposes, including our consolidated operating budget, and by our board of directors in setting performance-based compensation targets. Adjusted EBITDA should not be considered an alternative to but viewed in conjunction with U.S. GAAP results, as we believe it provides a more complete understanding of ongoing business performance and trends than U.S. GAAP measures alone. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.
Three Months Ended September 30,Nine Months Ended September 30,
2024
2023
2024
2023
(in thousands)(in thousands)
Reconciliation of Net income to Adjusted EBITDA:
Net income$8,609 $6,776 $45,813 $13,991 
Income tax (benefit) expense(5,100)(1,940)(21,243)77 
Interest expense, net21,783 9,180 55,841 30,150 
Depreciation, amortization and accretion expense17,151 13,719 50,447 38,054 
Stock-based compensation expense4,662 4,176 4,739 11,304 
Acquisition and entity formation costs765 268 2,281 3,128 
(Gain) loss on fair value remeasurement of contingent consideration, net(900)50 (2,379)150 
(Gain) loss on disposal of property, plant and equipment— — (88)649 
Change in fair value of Alignment Shares liability(10,214)(3,508)(48,172)(23,331)
Other expense (income), net210 339 (1,608)1,569 
CEO transition costs— — 2,203 — 
Adjusted EBITDA
$36,966 $29,060 $87,834 $75,741 
Three Months Ended September 30,Nine Months Ended September 30,
2024
2023
2024
2023
(in thousands)(in thousands)
Reconciliation of Adjusted EBITDA margin:
Adjusted EBITDA
$36,966 $29,060 $87,834 $75,741 
Operating revenues, net
58,681 45,079 151,800 120,970 
Adjusted EBITDA margin
63 %64 %58 %63 %

Components of Results of Operations
The Company derives its operating revenues principally from PPAs, net metering credit agreements (“NMCAs”), solar renewable energy credits (“SRECs”), and performance based incentives.
Power sales under PPAs. A portion of the Company’s power sales revenues is earned through the sale of energy (based on kilowatt hours) pursuant to the terms of PPAs. The Company’s PPAs typically have fixed or floating rates and are generally invoiced monthly. The Company applied the practical expedient allowing the Company to recognize revenue in the amount that the Company has a right to invoice which is equal to the volume of energy delivered multiplied by the applicable contract rate. As of September 30, 2024, PPAs have a weighted-average remaining life of 11 years.
Power sales under net metering credit agreements. A portion of the Company’s power sales revenues are obtained through the sale of net metering credits under NMCAs. Net metering credits are awarded to the Company by the local utility based on kilowatt hour generation by solar energy facilities, and the amount of each credit is determined by the utility’s applicable tariff. The Company currently receives net metering credits from various utilities including Eversource Energy, National Grid Plc, and Xcel Energy. There are no direct costs associated with net metering credits, and therefore, they do not receive an allocation of costs upon generation. Once awarded, these credits are then sold to third party offtakers pursuant to the terms of the offtaker agreements. The Company views each net metering credit in these arrangements as a distinct performance obligation satisfied at a point in time. Generally, the customer obtains control of net metering credits at the point in time when
42

the utility assigns the generated credits to the Company account, who directs the utility to allocate to the customer based upon a schedule. The transfer of credits by the Company to the customer can be up to one month after the underlying power is generated. As a result, revenue related to NMCA is recognized upon delivery of net metering credits by the Company to the customer. As of September 30, 2024, NMCAs have a weighted-average remaining life of 19 years.
SREC revenue. The Company applies for and receives SRECs in certain jurisdictions for power generated by solar energy systems it owns. The quantity of SRECs is based on the amount of energy produced by the Company’s qualifying generation facilities. SRECs are sold pursuant to agreements with third parties, who typically require SRECs to comply with state-imposed renewable portfolio standards. Holders of SRECs may benefit from registering the credits in their name to comply with these state-imposed requirements, or from selling SRECs to a party that requires additional SRECs to meet its compliance obligations. The Company receives SRECs from various state regulators including New Jersey Board of Public Utilities, Massachusetts Department of Energy Resources, and Maryland Public Service Commission. There are no direct costs associated with SRECs and therefore, they do not receive an allocation of costs upon generation. The majority of individual SREC sales reflect a fixed quantity and fixed price structure over a specified term. The Company typically sells SRECs to different customers from those purchasing the energy under PPAs. The Company believes the sale of each SREC is a distinct performance obligation satisfied at a point in time and that the performance obligation related to each SREC is satisfied when each SREC is delivered to the customer.
Power sales on wholesale markets. A portion of the Company’s power sales revenues is earned through the sale of energy (based on kilowatt hours) on the wholesale market operated by PJM Interconnection at floating spot prices. The promise to sell energy on a wholesale market is a separate distinct performance obligation and revenue is recognized as energy is delivered at the interconnection point.
Rental income. Rental income is primarily derived from the master lease agreement with Vitol (as described in Note 5, "Acquisitions," to our condensed consolidated financial statements included elsewhere in this Report) as well as long-term PPAs accounted for as operating leases under ASC 842. The Company's leases include various renewal options which are included in the lease term when the Company has determined it is reasonably certain of exercising the options based on consideration of all relevant factors that create an economic incentive for the Company as lessor. Certain leases include variable lease payments associated with production of solar facilities, which are recognized as rental income in period the energy is delivered.
Performance based incentives. Many state governments, utilities, municipal utilities and co-operative utilities offer a rebate or other cash incentive for the installation and operation of a renewable energy facility. Up-front rebates provide funds based on the cost, size or expected production of a renewable energy facility. Performance based incentives provide cash payments to a system owner based on the energy generated by its renewable energy facility during a pre-determined period, and they are paid over that time period. The Company recognizes revenue from state and utility incentives at the point in time in which they are earned.
Performance based incentives are primarily represented by cash awards granted to the Company by the New York State Energy Research & Development Authority for the development of distributed solar facilities in the State of New York.
Revenue recognized on contract liabilities. The Company recognizes contract liabilities related to long-term agreements to sell SRECs that are prepaid by customers before SRECs are delivered. The Company will recognize revenue associated with the contract liabilities as SRECs are delivered to customers through 2037.
Cost of operations (exclusive of depreciation and amortization). Cost of operations primarily consists of operations and maintenance expense, site lease expense, insurance premiums, property taxes and other miscellaneous costs associated with the operations of solar energy facilities. Altus Power expects its cost of operations to continue to grow in conjunction with its business growth. These costs as a percentage of revenue will decrease over time, offsetting efficiencies and economies of scale with inflationary increases of certain costs.
General and administrative. General and administrative expense consists primarily of salaries, bonuses, benefits and all other employee-related costs, including stock-based compensation, professional fees related to legal, accounting, human resources, finance and training, information technology and software services, marketing and communications, travel, rent, and other office-related expenses.
Altus Power expects increased general and administrative expenses as it continues to grow its business but to decrease over time as a percentage of revenue. Altus Power also expects to incur additional expenses as a result of operating as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the U.S.
43

Securities and Exchange Commission ("SEC"). Further, Altus Power expects to incur higher expenses for investor relations, accounting advisory, directors' and officers’ insurance, and other professional services.
Depreciation, amortization and accretion expense. Depreciation expense represents depreciation on solar energy systems that have been placed in service. Depreciation expense is computed using the straight-line composite method over the estimated useful lives of assets. Leasehold improvements are depreciated over the shorter of the estimated useful lives or the remaining term of the lease. Amortization includes third party costs necessary to acquire PPA and NMCA customers, value ascribed to in-place leases, and favorable and unfavorable rate revenues contracts. Value ascribed to in-place leases is amortized using the straight-line method ratably over the term of the individual site leases. Third party costs necessary to acquire PPAs and NMCA customers are amortized using the straight-line method ratably over 15-25 years based upon the term of the customer contract. Estimated fair value allocated to the favorable and unfavorable rate PPAs and REC agreements are amortized using the straight-line method over the remaining non-cancelable terms of the respective agreements. Accretion expense includes over time increase of asset retirement obligations associated with solar energy facilities.
Acquisition and entity formation costs. Acquisition and entity formation costs represent costs incurred to acquire businesses and form new legal entities. Such costs primarily consist of professional fees for banking, legal, accounting and appraisal services.
Fair value remeasurement of contingent consideration. In connection with various acquisitions, contingent consideration may be payable upon achieving certain conditions. The Company estimates the fair value of contingent consideration using a Monte Carlo simulation model or an expected cash flow approach. Significant assumptions used in the measurement of fair value of contingent consideration associated with various acquisitions include market power rates, estimated volumes of power generation of acquired solar energy facilities, percentage of completion of in-development solar energy facilities, and the risk-adjusted discount rate associated with the business.
Gain or loss on disposal of property, plant and equipment. In connection with the disposal of assets, the Company recognizes a gain or loss on disposal of property, plant and equipment, which represents the difference between the consideration received and the carrying value of the disposed asset.
Stock-based compensation expense. Stock-based compensation expense is recognized for awards granted under the Legacy Incentive Plans and Incentive Plan, as defined in Note 14, "Stock-Based Compensation," to our condensed consolidated financial statements included elsewhere in this Report.
Change in fair value of Alignment Shares liability. Alignment Shares represent Class B common stock of the Company which were issued in connection with the Merger. Class B common stock, par value $0.0001 per share ("Alignment Shares") are accounted for as liability-classified derivatives, which were remeasured as of September 30, 2024, and the resulting gain was included in the condensed consolidated statements of operations. The Company estimates the fair value of outstanding Alignment Shares using a Monte Carlo simulation valuation model utilizing a distribution of potential outcomes based on a set of underlying assumptions such as stock price, volatility, and risk-free interest rates.
Other income and expense, net. Other income and expenses primarily represent interest income and other miscellaneous items.
Interest expense, net. Interest expense, net represents interest on our borrowings under our various debt facilities, amortization of debt discounts and deferred financing costs, and unrealized gains and losses on interest rate swaps.
Income tax expense and benefit. We account for income taxes under ASC 740, Income Taxes. As such, we determine deferred tax assets and liabilities based on temporary differences resulting from the different treatment of items for tax and financial reporting purposes. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. Additionally, we must assess the likelihood that deferred tax assets will be recovered as deductions from future taxable income. We have a partial valuation allowance on our deferred state tax assets because we believe it is more likely than not that a portion of our deferred state tax assets will not be realized. We evaluate the recoverability of our deferred tax assets on an annual basis.
Net income and loss attributable to noncontrolling interests and redeemable noncontrolling interests. Net income and loss attributable to noncontrolling interests and redeemable noncontrolling interests represents third-party interests in the net income or loss of certain consolidated subsidiaries based on Hypothetical Liquidation at Book Value.
44

Results of Operations – Three Months Ended September 30, 2024, Compared to Three Months Ended September 30, 2023 (Unaudited)

Three Months Ended September 30,Change
20242023$%
(in thousands)
Operating revenues, net$58,681 $45,079 $13,602 30.2 %
Operating expenses
Cost of operations (exclusive of depreciation and amortization shown separately below)11,891 7,825 4,066 52.0 %
General and administrative9,824 8,194 1,630 19.9 %
Depreciation, amortization and accretion expense17,151 13,719 3,432 25.0 %
Acquisition and entity formation costs765 268 497 185.4 %
(Gain) loss on fair value remeasurement of contingent consideration, net(900)50 (950)*
Stock-based compensation expense4,662 4,176 486 11.6 %
Total operating expenses$43,393 $34,232 $9,161 26.8 %
Operating income15,288 10,847 4,441 40.9 %
Other (income) expense
Change in fair value of Alignment Shares liability(10,214)(3,508)(6,706)191.2 %
Other expense, net210 339 (129)(38.1)%
Interest expense, net21,783 9,180 12,603 137.3 %
Total other expense, net$11,779 $6,011 $5,768 96.0 %
Income before income taxes$3,509 $4,836 $(1,327)(27.4)%
Income tax benefit5,100 1,940 3,160 162.9 %
Net income$8,609 $6,776 $1,833 27.1 %
Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests(9,029)1,446 (10,475)*
Net income attributable to Altus Power, Inc.$17,638 $5,330 $12,308 230.9 %
Net income per share attributable to common stockholders
Basic$0.11 $0.03 $0.08 266.7 %
Diluted$0.11 $0.03 $0.08 266.7 %
Weighted average shares used to compute net income per share attributable to common stockholders
Basic159,990,880 158,719,684 1,271,196 0.8 %
Diluted164,393,794 160,198,154 4,195,640 2.6 %

* Percentage is not meaningful

45

Operating revenues, net
Three Months Ended September 30,Change
20242023Change%
(in thousands)
Power sales under PPAs$21,532 $17,442 $4,090 23.4 %
Power sales under NMCAs18,934 13,846 5,088 36.7 %
Power sales on wholesale markets870 550 320 58.2 %
Total revenue from power sales41,336 31,838 9,498 29.8 %
Solar renewable energy credit revenue13,489 9,753 3,736 38.3 %
Rental income2,967 586 2,381 *
Performance based incentives298 1,925 (1,627)(84.5)%
Revenue recognized on contract liabilities591 977 (386)(39.5)%
Total operating revenues, net$58,681 $45,079 $13,602 30.2 %

* Percentage is not meaningful
Operating revenues, net increased by $13.6 million, or 30.2%, for three months ended September 30, 2024, compared to three months ended September 30, 2023, which is primarily a result of the following:
•An increase in power sales of approximately $9.5 million, driven by a 39.3% increase in power generation from 239,000 MWh for three months ended September 30, 2023, to 333,000 MWh for three months ended September 30, 2024. The increase in power generated was driven by a 210 MW increase in the weighted average installed capacity primarily as a result of the Caldera Acquisition in December 2023, the Vitol Acquisition in January 2024, and other solar facilities acquired and placed in service by the Company after September 30, 2023.
•An increase in solar renewable energy credits revenue of $3.7 million is primarily explained by the increase in the number of SRECs sold from solar facilities acquired and placed in service subsequent to September 30, 2023.
•An increase in rental income of $2.4 million is primarily due to the Vitol Acquisition in January 2024 and lease of certain solar facilities back to Vitol.
•A decrease in performance based incentives of $1.6 million is due to the New York State Energy Research & Development Authority (“NYSERDA”) performance based incentives received for the development of solar facilities in the State of New York during three months ended September 30, 2023. No NYSERDA incentives were received during three months ended September 30, 2024.
Cost of operations
Three Months Ended September 30,Change
20242023$%
(in thousands)
Cost of operations (exclusive of depreciation and amortization shown separately below)
$11,891 $7,825 $4,066 52.0 %

Cost of operations increased by 52.0% from $7.8 million for three months ended September 30, 2023, to $11.9 million for three months ended September 30, 2024. The increase in the Company’s portfolio of operating solar facilities from 712 MW weighted average installed capacity for three months ended September 30, 2023 to 988 MW for three months ended September 30, 2024 contributed $3.0 million to the cost of operations. The remaining change of $1.0 million is due to the increase in various components of the cost of operations.
General and administrative
46

Three Months Ended September 30,Change
20242023$%
(in thousands)
General and administrative
$9,824 $8,194 $1,630 19.9 %
General and administrative expense increased by $1.6 million, or 19.9%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to increase in general personnel costs resulting from increased headcount in multiple job functions.
Depreciation, amortization and accretion expense
Three Months Ended September 30,Change
20242023$%
(in thousands)
Depreciation, amortization and accretion expense
$17,151 $13,719 $3,432 25.0 %
Depreciation, amortization and accretion expense increased by $3.4 million, or 25.0%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to the increased number of operating solar energy facilities in our portfolio.
Acquisition and entity formation costs
Three Months Ended September 30,Change
20242023$%
(in thousands)
Acquisition and entity formation costs
$765 $268 $497 185.4 %
Acquisition and entity formation costs increased by $0.5 million, or 185.4%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to costs associated with the MN8 Acquisition (as defined in Note 5, "Acquisitions," to our condensed consolidated financial statements included elsewhere in this Report) during the three months ended September 30, 2024.
(Gain) loss on fair value remeasurement of contingent consideration
Three Months Ended September 30,Change
20242023$%
(in thousands)
(Gain) loss on fair value remeasurement of contingent consideration
$(900)$50 $(950)*

* Percentage is not meaningful
Gain or loss on fair value remeasurement of contingent consideration is primarily associated with the True Green II Acquisition, the Caldera Acquisition, and the Solar Acquisition (as defined in Note 5, "Acquisitions," to our condensed consolidated financial statements included elsewhere in this Report). A gain or loss on fair value remeasurement was recorded for the three months ended September 30, 2024 and 2023, due to changes in the values of significant assumptions used in the measurement of fair value.
Stock-based compensation expense
47

Three Months Ended September 30,Change
20242023$%
(in thousands)
Stock-based compensation expense
$4,662 $4,176 $486 11.6 %
Stock-based compensation expense of $4.7 million and $4.2 million during the three months ended September 30, 2024, and 2023, respectively, was primarily due to restricted stock units granted under the Incentive Plan (as defined in Note 14, "Stock-Based Compensation," to our condensed consolidated financial statements included elsewhere in this Report).
Change in fair value of Alignment Shares liability
Three Months Ended September 30,Change
20242023$%
(in thousands)
Change in fair value of Alignment Shares liability
$(10,214)$(3,508)$(6,706)191.2 %
In connection with the Merger, the Company assumed a liability related to Alignment Shares, which was remeasured as of September 30, 2024 and 2023, and the resulting gain was included in the condensed consolidated statement of operations. The gain was primarily driven by the decrease in the Company's stock price during each period.
Other expense, net
Three Months Ended September 30,Change
20242023$%
(in thousands)
Other expense, net
$210 $339 $(129)(38.1)%
Other expense, net was $0.2 million during the three months ended September 30, 2024, as compared to $0.3 million during the three months ended September 30, 2023, primarily due to lower interest income during the three months ended September 30, 2024, as well as miscellaneous other income and expense items during each period.
Interest expense, net
Three Months Ended September 30,Change
20242023$%
(in thousands)
Interest expense, net
$21,783 $9,180 $12,603 137.3 %
Interest expense increased by $12.6 million, or 137.3%, during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to the increase of outstanding debt held by the Company. Additionally, the Company recognized an unrealized loss on interest rate swaps of $3.6 million during the three months ended September 30, 2024, as compared to an unrealized gain on interest rate swaps of $3.2 million during the three months ended September 30, 2023.
Income tax benefit
Three Months Ended September 30,Change
20242023$%
(in thousands)
Income tax benefit
$5,100 $1,940 $3,160 162.9 %


48

For the three months ended September 30, 2024, the Company recorded an income tax benefit of $5.1 million in relation to pretax income of $3.5 million, which resulted in an effective income tax rate of negative 145.3%. The effective income tax rate was primarily impacted by fair value remeasurement of Alignment Shares, nondeductible compensation, net losses attributable to noncontrolling interests and redeemable noncontrolling interests, and state income taxes.
For the three months ended September 30, 2023, the Company recorded an income tax benefit of $1.9 million in relation to a pretax income of $4.8 million, which resulted in an effective income tax rate of negative 39.6%. The effective income tax rate was primarily impacted by fair value remeasurement of Alignment Shares, nondeductible compensation, net losses attributable to noncontrolling interests and redeemable noncontrolling interests, state income taxes, and other miscellaneous items.
Related to the fair value remeasurement, the Company has issued Alignment Shares. These awards are liability classified awards for U.S. GAAP, and, as such, they are required to be remeasured to fair value each reporting period with the change in value included in operating income. The Alignment Shares are considered equity awards for U.S. tax purposes. Therefore, the change in U.S. GAAP value does not result in taxable income or deduction. The U.S. GAAP change in fair value results in a permanent tax difference which impacts the Company’s estimated annual effective tax rate.
Net (loss) income attributable to redeemable noncontrolling interests and noncontrolling interests
Three Months Ended September 30,Change
20242023$%
(in thousands)
Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests
$(9,029)$1,446 $(10,475)*

* Percentage is not meaningful
Net loss attributable to redeemable noncontrolling interests and noncontrolling interests increased by $10.5 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily due to funding provided by a tax equity investor, changes in income and loss allocations in accordance with agreements, and loss allocations due to reduced recapture periods for investment tax credits.

49

Results of Operations – Nine Months Ended September 30, 2024, Compared to Nine Months Ended September 30, 2023 (Unaudited)

Nine Months Ended September 30,Change
20242023$%
(in thousands)
Operating revenues, net$151,800 $120,970 $30,830 25.5 %
Operating expenses
Cost of operations (exclusive of depreciation and amortization shown separately below)34,083 21,382 12,701 59.4 %
General and administrative32,086 23,847 8,239 34.5 %
Depreciation, amortization and accretion expense50,447 38,054 12,393 32.6 %
Acquisition and entity formation costs2,281 3,128 (847)(27.1)%
(Gain) loss on fair value remeasurement of contingent consideration, net(2,379)150 (2,529)*
(Gain) loss on disposal of property, plant and equipment(88)649 (737)(113.6)%
Stock-based compensation expense4,739 11,304 (6,565)(58.1)%
Total operating expenses$121,169 $98,514 $22,655 23.0 %
Operating income30,631 22,456 8,175 36.4 %
Other (income) expense
Change in fair value of Alignment Shares liability(48,172)(23,331)(24,841)106.5 %
Other expense (income), net(1,608)1,569 (3,177)(202.5)%
Interest expense, net55,841 30,150 25,691 85.2 %
Total other expense, net$6,061 $8,388 $(2,327)(27.7)%
Income before income taxes$24,570 $14,068 $10,502 74.7 %
Income tax benefit (expense)21,243 (77)21,320 *
Net income$45,813 $13,991 $31,822 227.4 %
Net loss attributable to noncontrolling interests and redeemable noncontrolling interests(16,979)(3,781)(13,198)*
Net income attributable to Altus Power, Inc.$62,792 $17,772 $45,020 253.3 %
Net income per share attributable to common stockholders
Basic$0.39 $0.11 $0.28 254.5 %
Diluted$0.38 $0.11 $0.27 245.5 %
Weighted average shares used to compute net income per share attributable to common stockholders
Basic159,641,018 158,687,373 953,645 0.6 %
Diluted165,720,558 160,965,682 4,754,876 3.0 %

* Percentage is not meaningful



50

Operating revenues, net
Nine Months Ended September 30,Change
20242023Change%
(in thousands)
Power sales under PPAs$54,879 $43,079 $11,800 27.4 %
Power sales under NMCAs44,404 33,970 10,434 30.7 %
Power sales on wholesale markets1,706 1,474 232 15.7 %
Total revenue from power sales100,989 78,523 22,466 28.6 %
Solar renewable energy credit revenue33,541 33,346 195 0.6 %
Rental income8,183 2,198 5,985 272.3 %
Performance based incentives7,073 4,487 2,586 57.6 %
Revenue recognized on contract liabilities2,014 2,416 (402)(16.6)%
Total operating revenues, net$151,800 $120,970 $30,830 25.5 %

Operating revenues, net increased by $30.8 million, or 25.5%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, which is primarily a result of the following:
•An increase in power sales of approximately $22.5 million, driven by a 28.6% increase in power generation from 638,000 MWh for the nine months ended September 30, 2023 to 874,000 MWh for the nine months ended September 30, 2024. The increase in power generated was driven by a 250 MW increase in the weighted average installed capacity primarily as a result of the Caldera Acquisition in December 2023, the Vitol Acquisition in January 2024, and other solar facilities acquired or placed in service by the Company subsequent to September 30, 2023.
•An increase in rental income of $6.0 million is primarily due to the Vitol Acquisition in January 2024 and lease of certain solar facilities back to Vitol.
•An increase in performance based incentives of $2.6 million is primarily due to the NYSERDA performance based incentives received for the development of solar facilities in the State of New York. During the nine months ended September 30, 2024, the Company was awarded $6.0 million of performance based incentives as compared to $3.6 million during the nine months ended September 30, 2023.
Cost of operations
Nine Months Ended September 30,Change
20242023$%
(in thousands)
Cost of operations (exclusive of depreciation and amortization shown separately below)
$34,083 $21,382 $12,701 59.4 %
Cost of operations increased by 59.4% from $21.4 million for the nine months ended September 30, 2023, to $34.1 million for the nine months ended September 30, 2024. The increase in the Company’s portfolio of operating solar facilities from 656 MW weighted average installed capacity for the nine months ended September 30, 2023 to 966 MW for the nine months ended September 30, 2024, contributed $10.1 million to the cost of operations. The remaining change of $2.6 million is due to the increase in various components of the cost of operations.
General and administrative
Nine Months Ended September 30,Change
20242023$%
(in thousands)
General and administrative
$32,086 $23,847 $8,239 34.5 %
51

General and administrative expense increased by $8.2 million, or 34.5%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to increase in general personnel costs resulting from increased headcount in multiple job functions.
Depreciation, amortization and accretion expense
Nine Months Ended September 30,Change
20242023$%
(in thousands)
Depreciation, amortization and accretion expense
$50,447 $38,054 $12,393 32.6 %
Depreciation, amortization and accretion expense increased by $12.4 million, or 32.6%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to the increased number of operating solar energy facilities in our portfolio.
Acquisition and entity formation costs
Nine Months Ended September 30,Change
20242023$%
(in thousands)
Acquisition and entity formation costs
$2,281 $3,128 $(847)(27.1)%
Acquisition and entity formation costs decreased by $0.8 million, or 27.1%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to costs associated with the True Green II Acquisition during the nine months ended September 30, 2023.
(Gain) loss on fair value remeasurement of contingent consideration
Nine Months Ended September 30,Change
20242023$%
(in thousands)
(Gain) loss on fair value remeasurement of contingent consideration
$(2,379)$150 $(2,529)*

* Percentage is not meaningful
Gain or loss on fair value remeasurement of contingent consideration is primarily associated with the True Green II Acquisition, the Caldera Acquisition, and the Solar Acquisition. A gain or loss on fair value remeasurement was recorded for the nine months ended September 30, 2024 and 2023, due to changes in the values of significant assumptions used in the measurement of fair value.
(Gain) loss on disposal of property, plant and equipment
Nine Months Ended September 30,Change
20242023$%
(in thousands)
(Gain) loss on disposal of property, plant and equipment
$(88)$649 $(737)(113.6)%
Gain or loss on disposal of property, plant and equipment is associated with the disposal of a solar facility that occurred during the nine months ended September 30, 2024. The gain or loss was calculated as the difference between the consideration received and the carrying value of the disposed asset.
52

Stock-based compensation expense
Nine Months Ended September 30,Change
20242023$%
(in thousands)
Stock-based compensation expense
$4,739 $11,304 $(6,565)(58.1)%
Stock-based compensation expense of $4.7 million and $11.3 million during the nine months ended September 30, 2024, and 2023, respectively, was primarily due to restricted stock units granted under the Incentive Plan. Stock-based compensation expense during the nine months ended September 30, 2024, was offset by the reversal of expense in connection with the resignation of Lars Norell as Co-Chief Executive Officer and director of the Company on April 28, 2024. Refer to Note 12, "Related Party Transactions," to our condensed consolidated financial statements included elsewhere in this Report for further details.
Change in fair value of Alignment Shares liability
Nine Months Ended September 30,Change
20242023$%
(in thousands)
Change in fair value of Alignment Shares liability
$(48,172)$(23,331)$(24,841)106.5 %
In connection with the Merger, the Company assumed a liability related to Alignment Shares, which was remeasured as of September 30, 2024 and 2023, and the resulting gain was included in the condensed consolidated statement of operations. The gain was primarily driven by the decrease in the Company's stock price during each period.
Other (income) expense, net
Nine Months Ended September 30,Change
20242023$%
(in thousands)
Other (income) expense, net
$(1,608)$1,569 $(3,177)(202.5)%
Other income was approximately $1.6 million during the nine months ended September 30, 2024, as compared to other expense of $1.6 million during the nine months ended September 30, 2023, primarily due to interest income during the nine months ended September 30, 2024, as well as miscellaneous other income and expense items during each period.
Interest expense, net
Nine Months Ended September 30,Change
20242023$%
(in thousands)
Interest expense, net
$55,841 $30,150 $25,691 85.2 %
Interest expense increased by $25.7 million, or 85.2%, during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to the increase of outstanding debt held by the Company. Additionally, the Company recognized an unrealized loss on interest rate swaps of $1.2 million during the nine months ended September 30, 2024, as compared to an unrealized gain on interest rate swaps of $3.7 million during the nine months ended September 30, 2023.
Income tax benefit (expense)
53

Nine Months Ended September 30,Change
20242023$%
(in thousands)
Income tax benefit (expense)
$21,243 $(77)$21,320 *

* Percentage is not meaningful.

For the nine months ended September 30, 2024, the Company recorded an income tax benefit of $21.2 million in relation to pretax income of $24.6 million, which resulted in an effective income tax rate of negative 86.5%. The effective income tax rate was primarily impacted by fair value remeasurement of Alignment Shares, nondeductible compensation, net losses attributable to noncontrolling interests and redeemable noncontrolling interests, and state income taxes. Additionally, there was an income tax benefit resulting from the forfeiture of stock awards associated with the CEO transition.
For the nine months ended September 30, 2023, the Company recorded an income tax expense of $0.1 million in relation to a pretax income of $14.1 million, which resulted in an effective income tax rate of 0.7%. The effective income tax rate was primarily impacted by fair value remeasurement of Alignment Shares, nondeductible compensation, net losses attributable to noncontrolling interests and redeemable noncontrolling interests, and state income taxes.
Related to the fair value remeasurement, the Company has issued Alignment Shares. These awards are liability classified awards for U.S. GAAP, and, as such, they are required to be remeasured to fair value each reporting period with the change in value included in operating income. The Alignment Shares are considered equity awards for U.S. tax purposes. Therefore, the change in U.S. GAAP value does not result in taxable income or deduction. The U.S. GAAP change in fair value results in a permanent tax difference which impacts the Company’s estimated annual effective tax rate.
Net loss attributable to redeemable noncontrolling interests and noncontrolling interests
Nine Months Ended September 30,Change
20242023$%
(in thousands)
Net loss attributable to noncontrolling interests and redeemable noncontrolling interests
$(16,979)$(3,781)$(13,198)*

* Percentage is not meaningful.

Net loss attributable to redeemable noncontrolling interests and noncontrolling interests increased by $13.2 million during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily due to funding provided by a tax equity investor, changes in income and loss allocations in accordance with agreements, and by loss allocations due to reduced recapture periods for investment tax credits.
Liquidity and Capital Resources
As of September 30, 2024, the Company had total cash, cash equivalents, and restricted cash of $111.3 million. For a discussion of our restricted cash, see Note 2, “Significant Accounting Policies, Cash, Cash Equivalents, and Restricted Cash,” to our condensed consolidated financial statements.
We seek to maintain diversified and cost-effective funding sources to finance and maintain our operations, fund capital expenditures, including customer acquisitions, and satisfy obligations arising from our indebtedness. Historically, our primary sources of liquidity included proceeds from the issuance of redeemable preferred stock, borrowings under our debt facilities, third party tax equity investors and cash from operations. Our business model requires substantial outside financing arrangements to grow the business and facilitate the deployment of additional solar energy facilities. We will seek to raise additional required capital from borrowings under our existing debt facilities, third party tax equity investors, and cash from operations.
The solar energy systems that are in service are expected to generate a positive return rate over the useful life, typically 32 years. After solar energy systems commence operations, they typically do not require significant additional capital expenditures to maintain operating performance. However, in order to grow, we are currently dependent on financing from
54

outside parties. The Company expects to have sufficient cash and cash flows from operations to meet working capital, debt service obligations, contingencies and anticipated required capital expenditures for at least the next 12 months. However, we are subject to business and operational risks that could adversely affect our ability to raise additional financing. If financing is not available to us on acceptable terms if and when needed, we may be unable to finance installation of our new customers’ solar energy systems in a manner consistent with our past performance, our cost of capital could increase, or we may be required to significantly reduce the scope of our operations, any of which would have a material adverse effect on our business, financial condition, results of operations and prospects. In addition, our tax equity funds and debt instruments impose restrictions on our ability to draw on financing commitments. If we are unable to satisfy such conditions, we may incur penalties for non-performance under certain tax equity funds, experience installation delays, or be unable to make installations in accordance with our plans or at all. Any of these factors could also impact customer satisfaction, our business, operating results, prospects and financial condition.
Contractual Obligations and Commitments
We enter into service agreements in the normal course of business. These contracts do not contain any minimum purchase commitments. Certain agreements provide for termination rights subject to termination fees or wind down costs. Under such agreements, we are contractually obligated to make certain payments to vendors, mainly, to reimburse them for their unrecoverable outlays incurred prior to cancellation. The exact amounts of such obligations are dependent on the timing of termination, and the exact terms of the relevant agreement and cannot be reasonably estimated. As of September 30, 2024, we do not expect to cancel these agreements.
The Company has operating leases for land and building rooftops and has contractual commitments to make payments in accordance with site lease agreements.
Off-Balance Sheet Arrangements
The Company enters into letters of credit and surety bond arrangements with lenders, local municipalities, government agencies, and land lessors. These arrangements relate to certain performance-related obligations and serve as security under the applicable agreements. As of September 30, 2024 and December 31, 2023, the Company had outstanding letters of credit and surety bonds totaling $59.0 million and $60.1 million, respectively. Our outstanding letters of credit are primarily used to fund the debt service reserve accounts associated with our term loans. We believe the Company will fulfill the obligations under the related arrangements and do not anticipate any material losses under these letters of credit or surety bonds.
ATM Program
On April 6, 2023, the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”), Nomura Securities International, Inc. (“Nomura”) and Truist Securities, Inc. (“Truist” and, together with Cantor and Nomura, the “Agents,” and each, an “Agent”). The Sales Agreement provides for the offer and sale of our Class A common stock from time to time through an “at the market offering” (“ATM”) program under which the Agents act as sales agent or principal, subject to certain limitations, including the maximum aggregate dollar amount registered pursuant to the applicable prospectus supplement. Pursuant to the prospectus supplement filed by the Company on dated April 6, 2023, the Company may offer and sell up to $200 million of shares of Class A common stock pursuant to the Sales Agreement. For the nine months ended September 30, 2024, no shares of common stock were sold through the ATM equity program. Any issuances under the ATM are subject to approval of the Board.
Debt
APAF Term Loan
On August 25, 2021, APA Finance, LLC (“APAF”), a wholly owned subsidiary of the Company, entered into a $503.0 million term loan facility with Blackstone Insurance Solutions ("BIS") through a consortium of lenders, which consists of investment grade-rated Class A and Class B notes (the “APAF Term Loan”). The APAF Term Loan has a weighted average 3.51% annual fixed rate and matures on February 29, 2056 (“Final Maturity Date”).
The APAF Term Loan amortizes at an initial rate of 2.5% of outstanding principal per annum for a period of 8 years at which point the amortization steps up to 4% per annum until September 30, 2031 (“Anticipated Repayment Date”). After the Anticipated Repayment Date, the loan becomes fully-amortizing, and all available cash is used to pay down principal until the Final Maturity Date. The APAF Term Loan is secured by membership interests in the Company's subsidiaries.
55

As of September 30, 2024, the outstanding principal balance of the APAF Term Loan was $465.2 million less unamortized debt discount and loan issuance costs totaling $6.1 million. As of December 31, 2023, the outstanding principal balance of the APAF Term Loan was $474.6 million less unamortized debt discount and loan issuance costs totaling $6.7 million.
As of September 30, 2024, and December 31, 2023, the Company was in compliance with all covenants under the APAF Term Loan.
APAF II Term Loan
On December 23, 2022, APA Finance II, LLC (“APAF II”), a wholly owned subsidiary of the Company, entered into a $125.7 million term loan facility (the “APAF II Term Loan”) with KeyBank National Association ("KeyBank") and The Huntington Bank ("Huntington") as lenders. The proceeds of the APAF II Term Loan were used to repay the outstanding amounts under certain project-level loans. The APAF II Term Loan matures on December 23, 2027, and has a variable interest rate based on Secured Overnight Financing Rate (“SOFR”) plus a spread of 1.475%. Simultaneously with entering into the APAF II Term Loan, the Company entered into interest rate swaps for 100% of the amount of debt outstanding, which effectively fixed the interest rate at 4.885% (see Note 7, "Fair Value Measurements," to our condensed consolidated financial statements included elsewhere in this Report for further details). The APAF II Term Loan is secured by membership interests in the Company's subsidiaries.
As of September 30, 2024, the outstanding principal balance of the APAF II Term Loan was $104.5 million, less unamortized debt issuance costs of $1.8 million. As of December 31, 2023, the outstanding principal balance of the APAF II Term Loan was $112.8 million, less unamortized debt issuance costs of $2.2 million. As of September 30, 2024, and December 31, 2023, the Company was in compliance with all covenants under the APAF II Term Loan.
APAF III Term Loan
On February 15, 2023, the Company, through its subsidiaries, APA Finance III Borrower, LLC (the “APAF III Borrower”) and APA Finance III Borrower Holdings, LLC (“Holdings”), entered into a new long-term funding facility under the terms of a credit agreement among the Borrower, Holdings, Blackstone Asset Based Finance Advisors LP, which is an affiliate of the Company, U.S. Bank Trust Company, N.A., as administrative agent, U.S. Bank N.A., as document custodian, and the lenders party thereto (the “APAF III Term Loan”).
This funding facility provides for a term loan of $204.0 million at a fixed rate of 5.62%. The APAF III Term Loan amortizes at a rate of 2.5% of initial outstanding principal until the anticipated repayment date of June 30, 2033. The maturity date of the term loan is October 31, 2047. Upon lender approval, the Borrower has the right to increase the funding facility to make additional draws for certain solar generating facilities, as set forth in the credit agreement. On February 15, 2023, the Company borrowed $193.0 million from this facility to fund the True Green II Acquisition and the associated costs and expenses. The principal balance borrowed under the APAF III Term Loan was offset by $4.0 million of debt issuance costs and $6.3 million of issuance discount, which have been deferred and will be recognized as interest expense through June 30, 2033. The APAF III Term Loan is secured by membership interests in the Company's subsidiaries.
On June 15, 2023 and July 21, 2023, the Company amended the APAF III Term Loan to add $47.0 million and $28.0 million of additional borrowings, respectively, the proceeds of which were used to repay outstanding term loans under the Construction Loan to Term Loan Facility (as defined below), and to provide long-term financing for new solar projects. The principal balance borrowed under the amendments was offset by $0.3 million and $0.2 million of issuance costs, respectively, and $1.5 million and $1.1 million of issuance discount, respectively, which have been deferred and will be recognized as interest expense through June 30, 2033.
On December 20, 2023, the Company amended the APAF III Term Loan to add $163.0 million of additional borrowings, the proceeds of which were used to fund the Caldera Acquisition. The amendment increased the weighted average fixed interest rate for all borrowings under the APAF III Term Loan to 6.03% and increased the rate of amortization for the new borrowings under the amendment to 3.25% per annum until June 30, 2033. The principal balance borrowed under the amendment was offset by $1.3 million of issuance costs and $0.8 million of issuance discount, which have been deferred and will be recognized as interest expense through June 30, 2033.
As of September 30, 2024, the outstanding principal balance of the APAF III Term Loan was $417.6 million, less unamortized debt issuance costs and discount of $13.2 million. As of December 31, 2023, the outstanding principal balance of the APAF III Term Loan was $426.6 million, less unamortized debt issuance costs and discount of $14.3 million. As of September 30, 2024 and December 31, 2023, the Company was in compliance with all covenants under the APAF III Term Loan.
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APAF IV Term Loan
On March 26, 2024, the Company, through its subsidiaries, APA Finance IV, LLC (the “APAF IV Borrower”), and APA Finance IV Holdings, LLC (“Holdings”) has entered into a new term loan facility under the terms of a credit agreement among the APAF IV Borrower, Holdings, Blackstone Asset Based Finance Advisors LP, which is an affiliate of the Company, U.S. Bank Trust Company, N.A., as administrative agent, U.S. Bank N.A., as document custodian, and the lenders party thereto (the “APAF IV Term Loan”).
The APAF IV Term Loan, which matures on March 26, 2049, bears interest at a fixed rate of 6.45% per annum on outstanding principal amounts under the term loan. The Term Loan Facility has an anticipated repayment date of June 30, 2034. Upon lender approval, the APAF IV Borrower has the right to increase the Term Loan Facility to make additional draws for certain acquisitions of solar assets that otherwise satisfy the criteria for permitted acquisitions, as defined in the credit agreement. On March 26, 2024, the Company borrowed $101.0 million under the APAF IV Term Loan in connection with the Vitol Acquisition (as defined in Note 5, "Acquisitions," to our condensed consolidated financial statements included elsewhere in this Report), which closed on January 31, 2024. The principal balance borrowed under the APAF IV Term Loan was offset by $1.6 million of debt issuance costs, which have been deferred and will be recognized as interest expense through June 30, 2034. The APAF IV Term Loan is secured by membership interests in the Company's subsidiaries.
As of September 30, 2024, the outstanding principal balance of the APAF IV Term Loan was $100.5 million, less unamortized debt issuance costs and discount of $1.5 million. As of September 30, 2024, the Company was in compliance with all covenants under the APAF IV Term Loan.
APAGH Term Loan
On December 27, 2023, APA Generation Holdings, LLC (“APAGH” or the “APAGH Borrower”), a wholly owned subsidiary of the Company, entered into a credit agreement (the “APAGH Term Loan”) with an affiliate of Goldman Sachs Asset Management and CPPIB Credit Investments III Inc., a subsidiary of Canada Pension Plan Investment Board, as “Lenders.” The total commitment under the credit agreement is $100.0 million. The Company can also allow for the funding of additional incremental loans in an amount not to exceed $100.0 million over the term of the credit agreement at the discretion of the Lenders. Subject to certain exceptions, the APAGH Borrower’s obligations to the Lenders are secured by the assets of the APAGH Borrower, its parent, Altus Power, LLC (“Holdings”) and the Company and are further guaranteed by Holdings and the Company.
Interest accrues on any outstanding balance at an initial fixed rate equal to 8.50%, subject to adjustments. The maturity date of the term loan is December 27, 2029.

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

As of September 30, 2024, the outstanding principal balance of the APAGH Term Loan was $100.0 million, less unamortized debt issuance costs of $3.5 million. As of December 31, 2023, the outstanding principal balance of the APAGH Term Loan was $100.0 million, less unamortized debt issuance costs and discount of $4.0 million. As of September 30, 2024 and December 31, 2023, the Company was in compliance with all covenants.
APAG Revolver
On December 19, 2022, APA Generation, LLC (“APAG”), a wholly owned subsidiary of the Company, entered into revolving credit facility with Citibank, N.A. with a total committed capacity of $200.0 million (the "APAG Revolver"). Outstanding amounts under the APAG Revolver have a variable interest rate based on a base rate and an applicable margin. The APAG Revolver is secured by membership interests in the Company's subsidiaries. The APAG Revolver matures on December 19, 2027. As of September 30, 2024, and December 31, 2023, outstanding under the APAG Revolver were $10.0 million and $65.0 million, respectively. As of September 30, 2024, and December 31, 2023, the Company was in compliance with all covenants under the APAG Revolver.
APACF II Facility
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On November 10, 2023, APACF II, LLC (“APACF II” or the “APACF II Borrower”) a wholly-owned subsidiary of the Company, entered into a credit agreement among the APACF II Borrower, APACF II Holdings, LLC, Pass Equipment Co., LLC, each of the project companies from time to time party thereto, each of the tax equity holdcos from time to time party thereto, U.S. Bank Trust Company, National Association, U.S. Bank National Association, each lender from time to time party thereto (collectively, the “Lenders”) and Blackstone Asset Based Finance Advisors LP, as Blackstone representative (“APACF II Facility”).
The aggregate amount of the commitments under the credit agreement is $200.0 million. The APACF II Facility matures on November 10, 2027, and bears interest at an annual rate of SOFR plus 3.25%. Borrowings under the APACF II Facility, which mature 364 days after the borrowing occurs, may be used by the APACF II Borrower to fund construction costs including equipment, labor, interconnection, as well as other development costs. The Company incurred $0.3 million of debt issuance costs related to the APACF II Facility, which have been deferred and will be recognized as interest expense through November 10, 2027. The APACF II Facility is secured by membership interests in the Company's subsidiaries and other collateral, including equipment.

During both the three and nine months ended September 30, 2024, the Company capitalized $1.6 million of interest expense incurred under the APACF II Facility, which is included in property, plant and equipment, net in the condensed consolidated balance sheets as of September 30, 2024.

As of September 30, 2024, the outstanding principal balance of the APACF II Facility was $101.7 million, less unamortized debt issuance costs of $0.7 million. As of December 31, 2023, no amounts were outstanding under the APACF II Facility. As of September 30, 2024, the Company was in compliance with all covenants under the APACF II Facility.
Other Term Loans - Construction Loan to Term Loan Facility
On January 10, 2020, APA Construction Finance, LLC (“APACF”) a wholly-owned subsidiary of the Company, entered into a credit agreement with Fifth Third Bank, National Association and Deutsche Bank AG New York Branch to fund the development and construction of future solar facilities (“Construction Loan to Term Loan Facility”). The Construction Loan to Term Loan Facility included a construction loan commitment of $187.5 million, which expired on January 10, 2023. The construction loan commitment can convert to a term loan upon commercial operation of a particular solar energy facility. On June 15, 2023, the Company repaid all outstanding term loans of $15.8 million and terminated the facility.
Other Term Loans - Project-Level Term Loan
In conjunction with an acquisition of assets on August 29, 2022, the Company assumed a project-level term loan with an outstanding principal balance of $14.1 million and a fair value discount of $2.2 million. The term loan is subject to scheduled semi-annual amortization and interest payments, and matures on September 1, 2029.
As of September 30, 2024, the outstanding principal balance of the term loan was $9.4 million, less unamortized debt discount of $1.5 million. As of December 31, 2023, the outstanding principal balance of the term loan was $11.0 million, less unamortized debt discount of $1.8 million.
The term loan is secured by an interest in the underlying solar project assets and the revenues generated by those assets. As of September 30, 2024, and December 31, 2023, the Company was in compliance with all covenants.
Financing Obligations Recognized in Failed Sale Leaseback Transactions
From time to time, the Company sells equipment to third parties and enters into master lease agreements to lease the equipment back for an agreed-upon term. The Company has assessed these arrangements and determined that the transfer of assets should not be accounted for as a sale in accordance with ASC 842. Therefore, the Company accounts for these transactions using the financing method by recognizing the consideration received as a financing obligation, with the assets subject to the transaction remaining on the balance sheet of the Company and depreciated based on the Company's normal depreciation policy. The aggregate proceeds have been recorded as long-term debt within the condensed consolidated balance sheets.
As of September 30, 2024, the Company's recorded financing obligations were $40.9 million, net of $0.8 million of deferred transaction costs. As of December 31, 2023, the Company's recorded financing obligations were $41.8 million, net of $0.9 million of deferred transaction costs. Payments $1.2 million and $1.1 million were made under financing obligations for the three months ended September 30, 2024, and 2023, respectively. Payments of $2.3 million and $2.6 million were made under financing obligations for the nine months ended September 30, 2024 and 2023, respectively. Interest expense, inclusive
58

of the amortization of deferred transaction costs, for the both three months ended September 30, 2024 and 2023, was $0.4 million. Interest expense, inclusive of the amortization of deferred transaction costs, for both the nine months ended September 30, 2024 and 2023, was $1.3 million.
Cash Flows
For the Nine Months Ended September 30, 2024 and 2023
The following table sets forth the primary sources and uses of cash and restricted cash for each of the periods presented below:
Nine Months Ended September 30,
20242023
(in thousands)
Net cash provided by (used for):
Operating activities
$20,359 $49,096 
Investing activities
(261,613)(428,545)
Financing activities
133,654 264,039 
Net decrease in cash and restricted cash
$(107,600)$(115,410)
Operating Activities
During the nine months ended September 30, 2024, cash provided for operating activities of $20.4 million consisted primarily of net income of $45.8 million adjusted for net non-cash income of $17.5 million, and a net increase in assets of $14.9 million partially offset by a net increase in liabilities of $7.0 million.
During the nine months ended September 30, 2023, cash provided by operating activities of $49.1 million consisted primarily of net income of $14.0 million adjusted for net non-cash expenses of $30.2 million, and net increase in liabilities of $7.4 million partially offset by a net increase in assets of $2.5 million.
Investing Activities
During the nine months ended September 30, 2024, net cash used in investing activities was $261.6 million, consisting of $57.6 million of capital expenditures, $119.2 million of payments to acquire renewable energy businesses, net of cash and restricted cash acquired, and $85.0 million of payments to acquire renewable energy facilities from third parties, net of cash and restricted cash acquired. Net cash used in investing activities was partially offset by $0.3 million of proceeds from disposal of property, plant and equipment.
During the nine months ended September 30, 2023, net cash used in investing activities was $428.5 million, consisting of $89.3 million of capital expenditures, $313.3 million of payments to acquire renewable energy businesses, net of cash and restricted cash acquired, and $28.3 million of payments to acquire renewable energy facilities from third parties, net of cash and restricted cash acquired.
Financing Activities
Net cash provided by financing activities was $133.7 million for the nine months ended September 30, 2024, consisting of $211.5 million of proceeds from issuance of long-term debt, $16.2 million of contributions from noncontrolling interests, and $23.4 million of proceeds from the transfer of investment tax credits. Net cash provided by financing activities was partially off-set by $94.8 million to repay long-term debt, $1.2 million paid for debt issuance costs, $4.3 million of distributions to noncontrolling interests, $8.1 million of deferred purchase price paid, $5.8 million of contingent consideration paid, and $3.2 million of cash paid to redeem noncontrolling interests.
Net cash provided by financing activities was $264.0 million for the nine months ended September 30, 2023, consisting of $311.6 million of proceeds from issuance of long-term debt and $8.3 million of contributions from noncontrolling interests. Net cash provided by financing activities was partially offset by $41.9 million to repay long-term debt, $3.0 million paid for debt issuance costs, $4.5 million of deferred purchase price paid, $3.2 million of cash paid to redeem redeemable noncontrolling interests, and $3.3 million of distributions to noncontrolling interests.
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Critical Accounting Policies and Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to inventories, long-lived assets, goodwill, identifiable intangibles, contingent consideration liabilities and deferred income tax valuation allowances. We base our estimates on historical experience and on appropriate and customary assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Some of these accounting estimates and assumptions are particularly sensitive because of their significance to our condensed consolidated financial statements and because of the possibility that future events affecting them may differ markedly from what had been assumed when the financial statements were prepared. As of September 30, 2024, there have been no significant changes to the accounting estimates that we have deemed critical. Our critical accounting estimates are more fully described in our 2023 Annual Report on Form 10-K.
Other than the policies noted in Note 2, “Significant Accounting Policies,” in the Company’s notes to the condensed consolidated financial statements in this Report, there have been no material changes to its critical accounting policies and estimates as compared to those disclosed in its audited consolidated financial statements in our 2023 Annual Report on Form 10-K.
Emerging Growth Company Status
In April 2012, the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, was enacted. Section 107 of the JOBS Act provides that an “emerging growth company,” or an EGC, can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. Thus, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Altus Power has elected to use the extended transition period for new or revised accounting standards during the period in which we remain an EGC.
We expect to remain an EGC until the earliest to occur of: (1) the last day of the fiscal year in which we, as applicable, have more than $1.235 billion in annual revenue; (2) the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates; (3) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period; and (4) December 31, 2025, the last day of the fiscal year ending after the fifth anniversary of our initial public offering.
Recent Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our condensed consolidated financial statements appearing elsewhere in this Report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to various market risks in our normal business activities. Market risk is the potential loss that may result from market changes associated with our business or with an existing or forecasted financial or commodity transactions.
Interest Rate Risk
A significant portion of our outstanding debt has a fixed interest rate (for further details refer to Note 6, "Debt," in our unaudited condensed consolidated financial statements included elsewhere in this Report). However, changes in interest rates create a modest risk because certain borrowings bear interest at floating rates based on LIBOR plus a specified margin. We sometimes manage our interest rate exposure on floating-rate debt by entering into derivative instruments to hedge all or a portion of our interest rate exposure on certain debt facilities. We do not enter into any derivative instruments for trading or speculative purposes. Changes in economic conditions could result in higher interest rates, thereby increasing our interest expense and operating expenses and reducing funds available for capital investments, operations, and other purposes. A hypothetical 10% increase in our interest rates on our variable debt facilities would not have a material impact on the value of the Company’s cash, cash equivalents, debt, net income, or cash flows.
Credit Risk
Financial instruments which potentially subject Altus to significant concentrations of credit risk consist principally of cash and restricted cash. Our investment policy requires cash and restricted cash to be placed with high-quality financial institutions
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and limits the amount of credit risk from any one issuer. We additionally perform ongoing credit evaluations of our customers’ financial condition whenever deemed necessary and generally do not require collateral.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q, as such term is defined in Rules 13a‐15(e) and 15d‐15(e) under the Securities and Exchange Act, as amended (the “Exchange Act”).
Disclosure controls and procedures are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Based on this evaluation of our disclosure controls and procedures, our management, including our Chief Executive Officer and Chief Financial Officer, have concluded that our disclosure controls and procedures were not effective as of September 30, 2024, because of the material weaknesses in our internal control over financial reporting that were disclosed in our 2023 Annual Report on Form 10-K.
Remediation Plan
As previously described in Part II, Item 9A of our 2023 Annual Report on Form 10-K, with the oversight of senior management and our audit committee, we are taking the steps below and plan to take additional measures to remediate the underlying causes of the material weaknesses:
•We have proceeded with steps intended to remediate the insufficient qualified personnel material weakness, including the verification that sufficient resources are maintained to operate an effective control environment;
•We have performed an initial formalized risk assessment for SOX processes, and are remediating identified control gaps; and
•We have proceeded with steps intended to remediate the selection and development of control activities material weakness through the implementation of numerous controls over systems, process, governance and people to improve the broader effectiveness of internal controls over financial reporting.
We cannot assure you that the measures we have taken to date, and are continuing to implement, will be sufficient to remediate the material weaknesses we have identified or avoid potential future material weaknesses.
Changes in Internal Control over Financial Reporting
As discussed above, we implemented certain measures to remediate the material weaknesses identified in the design and operation of our internal control over financial reporting. Other than those measures, there have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Part II - Other Information
Item 1. Legal Proceedings
From time to time, the Company is a party to a number of claims and governmental proceedings which are ordinary, routine matters incidental to its business. In addition, in the ordinary course of business the Company periodically has disputes with vendors and customers. All current pending matters are not expected to have, either individually or in the aggregate, a material adverse effect on the Company’s financial position or results of operations.
Item 1A. Risk Factors
There have been no material changes to the Risk Factors described in Part I, Item 1A "Risk Factors" of the 2023 Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information

None.

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Item 6. Exhibits
Exhibit No.Description
10.1*
31.1*
31.2*
32**
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*Filed herewith
**Furnished herewith
***The schedules and similar attachments to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company undertakes to promptly provide a copy of the omitted schedules and similar attachments on a supplemental basis to the SEC or its staff, if requested.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Date: November 12, 2024By:/s/ Gregg J. Felton
Name:Gregg J. Felton
Title:Chief Executive Officer


Date: November 12, 2024By:/s/ Dustin L. Weber
Name:Dustin L. Weber
Title:Chief Financial Officer


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