UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

2024


OR


☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to


Commission File Number: 001-39798

LOGO

CBRE ACQUISITION HOLDINGS,file number 001-04321


ALTUS POWER, INC.

(Exact Namename of Registrantregistrant as Specifiedspecified in its Charter)

charter)
Delaware85-344839685-3448396

(State or other jurisdiction of

incorporation or organization)

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

2100 McKinney Avenue

Suite 1250

Dallas, Texas

2200 Atlantic Street, Sixth Floor
Stamford,75201CT06902
(Address of principal executive offices)Principal Executive Offices)(Zip Code)

Registrant’s

(203)-698-0090
Registrant's telephone number, including area code: (214) 979-6100

code


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

Title of each class

Trading Symbol(s)

Trading

Symbol(s)

Name of each exchange

on which registered

SAILSM (Stakeholder Aligned Initial Listing) securities, each consisting of one share of Class A common stock, $0.0001 par value and one-fourth of one redeemable warrant$0.0001 per shareAMPSCBAH.UNew York Stock Exchange
Class A common stock included as part of the SAILSM securitiesCBAHNew York Stock Exchange
Warrants included as part of the SAILSM securities, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.00CBAH WSNew York Stock Exchange



Indicate by check mark whether the registrantregistrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),; and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  ☒   No  ☐


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

(Check one):
Large accelerated filer☐Accelerated filer☒
Non-accelerated filer  ☐
Non-accelerated filer☒Smaller reporting company☒
☐
Emerging growth company☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐




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

☒




As of May 14, 2021,April 30, 2024, there were 40,250,000159,874,981 shares of the Company’s Class A common stock par value $0.0001 per share,outstanding and 2,012,500796,950 shares of the Company’s Class B common stock par value $0.0001 per share, issued and outstanding.



Table of Contents


Part I - Financial Information
Condensed Consolidated Statements of Operations
Page

PART I.

Condensed Consolidated Statements of Comprehensive Income

2
Condensed Consolidated Balance Sheets

Item 1.

FinancialCondensed Consolidated Statements (Unaudited)

2

Balance Sheets

2

Statement of Operations

3

Statement of Changes in Stockholders’ Deficit

Equity		4

StatementCondensed Consolidated Statements of Cash Flows

5

Notes to UnauditedCondensed Consolidated Financial Statements

6

Management’s Management's Discussion and Analysis of Financial Condition and Results of Operations

17

Quantitative and Qualitative Disclosures About Market Risk

20

Controls and Procedures

20
Part II - Other Information

PART II.

20

Item 1.

20

Item 1A.

Risk Factors

21

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

21

Defaults Upon Senior Securities

22

Mine Safety Disclosures

22

Other Information

22

22

Signatures

23

i

3

PART I—FINANCIAL INFORMATION

Table of Contents
Part I. Financial Information

Item 1. Financial Statements.

CBRE ACQUISITION HOLDINGS, INC.

BALANCE SHEETS

(Unaudited)

   March 31,
2021		  December 31,
2020		 

ASSETS

   

Current Assets:

   

Cash

  $279,819  $625,916 

Prepaid and other current assets

   1,418,423   1,447,037 
  

 

 

  

 

 

 

Total Current Assets

   1,698,242   2,072,953 

Assets held in Trust Account

   402,507,058   402,501,008 
  

 

 

  

 

 

 

Total Assets

  $404,205,300  $404,573,961 
  

 

 

  

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

   

Current Liabilities:

   

Accounts payable

  $—    $4,835 

Due to related party

   21,156   6,144 

Franchise tax payable

   —     26,218 

Accrued expenses

   697,423   96,850 
  

 

 

  

 

 

 

Total Current Liabilities

   718,579   134,047 

Deferred underwriting commission

   14,087,500   14,087,500 

Redeemable Warrant Liability

   9,257,500   18,716,250 
  

 

 

  

 

 

 

Total Liabilities

   24,063,579   32,937,797 

Commitments and contingencies

   —     —   

Class A common stock subject to possible redemption, 40,250,000 shares at a redemption value of $10.00 per share

   402,507,058   402,501,008 

Stockholders’ Equity (Deficit)

   

Preferred stock, $0.0001 par value; 1,000,000 shares authorized, none issued and outstanding

   —     —   

Class A common stock, $0.0001 par value; 250,000,000 shares authorized

   —     —   

Class B common stock, $0.0001 par value; 10,000,000 shares authorized, 2,012,500 shares issued and outstanding

   201   201 

Additional paid-in capital

   —     —   

Accumulated deficit

   (22,365,538)   (30,865,045) 
  

 

 

  

 

 

 

Total Stockholders’ Deficit

   (22,365,337)   (30,864,844) 
  

 

 

  

 

 

 

Total Liabilities and Stockholders’ Deficit

  $404,205,300  $404,573,961 
  

 

 

  

 

 

 

Statements

Altus Power, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except share and per share data)
 Three Months Ended March 31,
 20242023
Operating revenues, net$40,659 $29,378 
Operating expenses
Cost of operations (exclusive of depreciation and amortization shown separately below)10,920 5,976 
General and administrative10,022 7,362 
Depreciation, amortization and accretion expense16,130 11,376 
Acquisition and entity formation costs1,066 1,491 
(Gain) loss on fair value remeasurement of contingent consideration, net(79)50 
Gain on disposal of property, plant and equipment(88)— 
Stock-based compensation4,304 2,872 
Total operating expenses$42,275 $29,127 
Operating (loss) income(1,616)251 
Other (income) expense
Change in fair value of Alignment Shares liability(26,077)(17,018)
Other (income) expense, net(683)90 
Interest expense, net16,193 12,446 
Total other income, net$(10,567)$(4,482)
Income before income tax expense$8,951 $4,733 
Income tax expense(4,896)(888)
Net income$4,055 $3,845 
Net loss attributable to noncontrolling interests and redeemable noncontrolling interests(3,454)(1,772)
Net income attributable to Altus Power, Inc.$7,509 $5,617 
Net income per share attributable to common stockholders
Basic$0.05 $0.04 
Diluted$0.05 $0.03 
Weighted average shares used to compute net income per share attributable to common stockholders
Basic159,025,740 158,621,674 
Diluted162,242,148 161,003,402 
The accompanying notes are an integral part of thethese unaudited condensed consolidated financial statements.

CBRE ACQUISITION HOLDINGS, INC.

STATEMENT







4
Table of Contents
Altus Power, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

   Three Months
Ended March 31,
2021		 

Operating expenses

  $959,243 
  

 

 

 

Loss from operations

   959,243 
  

 

 

 

Other income (expense):

  

Change in fair value of redeemable warrant liability

   9,458,750 

Interest income earned on assets held in Trust Account

   6,050 
  

 

 

 

Loss before income tax expense

  $8,505,557 

Provision for income taxes

   —   

Net income (loss)

  $8,505,557 
  

 

 

 

Net loss per share:

  

Class A Common Stock – basic and diluted

  $0.20 
  

 

 

 

Class B Common Stock – basic and diluted

  $0.20 
  

 

 

 

COMPREHENSIVE INCOME

(unaudited)
(In thousands)
 Three Months Ended March 31,
 20242023
Net income$4,055 $3,845 
Other comprehensive loss
Foreign currency translation adjustment9 9 
Unrealized loss on a cash flow hedge, net of tax— (771)
Reclassification of realized gain on cash flow hedge to net income(404)$— 
Other comprehensive loss, net of tax$(395)$(762)
Total comprehensive income$3,660 $3,083 
Comprehensive loss attributable to the noncontrolling and redeemable noncontrolling interests(3,454)(1,772)
Comprehensive income attributable to Altus Power, Inc.$7,114 $4,855 
The accompanying notes are an integral part of thethese unaudited condensed consolidated financial statements.

CBRE ACQUISITION HOLDINGS, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

(Unaudited)

   Common Stock   Common Stock   Additional        
   Class A   Class B   Paid-in   Accumulated  Stockholders’ 
   Shares   Amount   Shares   Amount   Capital   Deficit  Deficit 

Balance at December 31, 2020

   —     $—      2,012,500   $201   $—     $(30,865,045)  $(30,864,844) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  

 

 

 

Subsequent measurement under ASC 480-10-S99

   —      —      —      —      —      (6,050)  $(6,050) 

Net income

   —      —      —      —      —      8,505,557  $8,505,557 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  

 

 

 

Balance at March 31, 2021

   —     $ —      2,012,500   $201   $—     $(22,365,538)  $(22,365,337) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  

 

 

 

5
Table of Contents
Altus Power, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except share and per share data)
 As of March 31, 2024As of December 31, 2023
Assets
Current assets:
Cash and cash equivalents$173,266 $160,817 
Current portion of restricted cash17,622 45,358 
Accounts receivable, net20,057 17,100 
Other current assets5,763 5,522 
Total current assets216,708 228,797 
Restricted cash, noncurrent portion12,625 12,752 
Property, plant and equipment, net1,745,407 1,619,047 
Intangible assets, net47,330 47,588 
Operating lease asset183,655 173,804 
Derivative assets2,585 530 
Other assets10,166 7,831 
Total assets$2,218,476 $2,090,349 
Liabilities, redeemable noncontrolling interests, and stockholders' equity
Current liabilities:
Accounts payable$7,411 $7,338 
Construction payable11,672 14,108 
Interest payable13,958 8,685 
Purchase price payable, current9,291 9,514 
Due to related parties85 51 
Current portion of long-term debt, net73,429 39,611 
Operating lease liability, current6,293 6,861 
Contract liability, current2,802 2,940 
Other current liabilities21,144 17,402 
Total current liabilities146,085 106,510 
Alignment Shares liability34,415 60,502 
Long-term debt, net of unamortized debt issuance costs and current portion1,253,819 1,163,307 
Intangible liabilities, net20,033 18,945 
Asset retirement obligations18,701 17,014 
Operating lease liability, noncurrent189,136 180,701 
Contract liability, noncurrent6,132 5,620 
Deferred tax liabilities, net14,725 9,831 
Other long-term liabilities2,989 2,908 
Total liabilities$1,686,035 $1,565,338 
Commitments and contingent liabilities (Note 11)
Redeemable noncontrolling interests24,389 26,044 
Stockholders' equity
Common stock $0.0001 par value; 988,591,250 shares authorized as of March 31, 2024, and December 31, 2023; 159,874,981 and 158,999,886 shares issued and outstanding as of March 31, 2024, and December 31, 2023, respectively16 16 
Additional paid-in capital488,408 485,063 
Accumulated deficit(47,765)(55,274)
Accumulated other comprehensive income16,878 17,273 
Total stockholders' equity$457,537 $447,078 
Noncontrolling interests50,515 51,889 
Total equity$508,052 $498,967 
Total liabilities, redeemable noncontrolling interests, and equity$2,218,476 $2,090,349 


6
Table of Contents
The following table presents the assets and liabilities of the consolidated variable interest entities (refer to Note 4).
(In thousands)
As of
March 31, 2024
As of
December 31, 2023
Assets of consolidated VIEs, included in total assets above:
Cash$13,947 $12,191 
Current portion of restricted cash436 1,066 
Accounts receivable, net9,373 8,068 
Other current assets1,445 973 
Restricted cash, noncurrent portion3,979 4,002 
Property, plant and equipment, net868,645 845,024 
Intangible assets, net5,360 5,507 
Operating lease asset98,103 79,597 
Other assets2,228 2,228 
Total assets of consolidated VIEs$1,003,516 $958,656 
Liabilities of consolidated VIEs, included in total liabilities above:
Accounts payable$1,207 $1,056 
Operating lease liability, current3,042 2,542 
Current portion of long-term debt, net3,021 3,021 
Contract liability, current484 484 
Other current liabilities1,592 1,473 
Long-term debt, net of unamortized debt issuance costs and current portion38,926 38,958 
Intangible liabilities, net3,819 4,522 
Asset retirement obligations9,394 9,185 
Operating lease liability, noncurrent100,671 82,913 
Contract liability, noncurrent4,591 4,011 
Other long-term liabilities1,750 1,771 
Total liabilities of consolidated VIEs$168,497 $149,936 
The accompanying notes are an integral part of thethese unaudited condensed consolidated financial statements.

CBRE ACQUISITION HOLDINGS, INC.

STATEMENT

7
Table of Contents
Altus Power, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

   For the Three
Months
Ended March 31,
2021		 

CASH FLOWS FROM OPERATING ACTIVITIES:

  

Net income

  $8,505,557 

Adjustments to reconcile net income to net cash used in operating activities:

  

Accrued interest income (from Trust Account)

   (6,050) 

Change in fair value of redeemable warrant liability

   (9,458,750) 

Changes in operating assets and liabilities:

  

Prepaid and other current assets

   28,614 

Accounts payable

   (4,835) 

Due to related party

   15,012 

Franchise tax payable

   (26,218) 

Accrued expenses

   600,573 
  

 

 

 

Net cash used in operating activities

  $(346,097) 
  

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

   —   
  

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

   —   
  

 

 

 

Decrease in cash

   (346,097) 

Cash at beginning of period

   625,916 
  

 

 

 

Cash at end of period

  $279,819 
  

 

 

 

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:

  

Change in Class A common stock subject to possible redemption

  $6,050 

CHANGES IN EQUITY

(unaudited)
(In thousands, except share data)
 Common StockAdditional
Paid-in Capital		 Accumulated Other Comprehensive Loss Accumulated DeficitTotal
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 compensation83,541 — 2,813 — — 2,813 — 2,813 
Cash distributions to noncontrolling interests— — — — — — (526)(526)
Cash contributions from noncontrolling interests— — — — — — 1,737 1,737 
Conversion of Alignment Shares to Class A Common Stock2,011 — 11 — — 11 — 11 
Noncontrolling interests assumed through acquisitions— — — — — — 13,296 13,296 
Redemption of redeemable noncontrolling interests— — 1,374 1,374 1,374 
Other comprehensive loss— — — (762)— (762)(762)
Net income (loss)— — — — 5,617 5,617 (2,633)2,984 
As of March 31, 2023158,989,953 16 474,202 (762)(40,302)433,154 32,699 465,853 

 Common StockAdditional
Paid-in Capital		Accumulated Other Comprehensive IncomeAccumulated
Deficit		Total
Stockholders'
Equity		Non
Controlling
Interests		Total Equity
 SharesAmount
As of December 31, 2023158,999,886 $16 $485,063 $17,273 $(55,274)$447,078 $51,889 $498,967 
Stock-based compensation, net of withholding taxes873,104 — 3,335 — — 3,335 — 3,335 
Cash distributions to noncontrolling interests— — — — — — (899)(899)
Conversion of Alignment Shares to Class A Common Stock1,991 — 10 — — 10 — 10 
Noncontrolling interests assumed through acquisitions— — — — — — 2,100 2,100 
Other comprehensive loss— — — (395)— (395)— (395)
Net income— — — — 7,509 7,509 (2,575)4,934 
As of March 31, 2024159,874,981 $16 $488,408 $16,878 $(47,765)$457,537 $50,515 $508,052 
The accompanying notes are an integral part of thethese unaudited condensed consolidated financial statements.

CBRE Acquisition Holdings,

8
Table of Contents
Altus Power, Inc.

Notes

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
 Three Months Ended March 31,
 20242023
Cash flows from operating activities
Net income$4,055 $3,845 
Adjustments to reconcile net income to net cash from operating activities:
Depreciation, amortization and accretion16,130 11,376 
Non-cash lease transactions(1,299)112 
Deferred tax expense4,896 888 
Amortization of debt discount and financing costs1,200 753 
Change in fair value of Alignment Shares liability(26,077)(17,018)
Remeasurement of contingent consideration(79)50 
Gain on disposal of property, plant and equipment(88)— 
Reclassification of realized gain on cash flow hedge to net income(404)— 
Stock-based compensation4,111 2,813 
Other(1,080)138 
Changes in assets and liabilities, excluding the effect of acquisitions
Accounts receivable(1,326)1,685 
Due to related parties34 101 
Derivative assets(2,055)1,769 
Other assets(1,448)1,206 
Accounts payable68 2,828 
Interest payable5,273 1,204 
Contract liability163 152 
Other liabilities2,451 2,323 
Net cash provided by operating activities4,525 14,225 
Cash flows used for investing activities
Capital expenditures(18,538)(24,844)
Payments to acquire renewable energy businesses, net of cash and restricted cash acquired(119,617)(288,241)
Payments to acquire renewable energy facilities from third parties, net of cash and restricted cash acquired(4,035)(6,350)
Proceeds from disposal of property, plant and equipment266 — 
Net cash used for investing activities(141,924)(319,435)
Cash flows used for financing activities
Proceeds from issuance of long-term debt131,895 204,687 
Repayment of long-term debt(7,208)(7,724)
Payment of debt issuance costs(1,231)(1,976)
Payment of deferred purchase price payable— (4,531)
Contributions from noncontrolling interests— 1,737 
Redemption of redeemable noncontrolling interests— (1,098)
Distributions to noncontrolling interests(1,471)(1,102)
Net cash provided by financing activities121,985 189,993 
Net decrease in cash, cash equivalents, and restricted cash(15,414)(115,217)
Cash, cash equivalents, and restricted cash, beginning of period218,927 199,398 
Cash, cash equivalents, and restricted cash, end of period$203,513 $84,181 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
9
Table of Contents
Three Months Ended March 31,
20242023
Supplemental cash flow disclosure
Cash paid for interest$12,256 $6,509 
Cash paid for taxes21 — 
Non-cash investing and financing activities
Asset retirement obligations$1,391 $3,847 
Debt assumed through acquisitions— 8,100 
Noncontrolling interest assumed through acquisitions2,100 13,296 
Redeemable noncontrolling interest assumed through acquisitions— 8,100 
Accrued distributions to noncontrolling interests205 — 
Accrued deferred financing costs19 — 
Acquisitions of property and equipment included in construction payable— 10,872 
Conversion of Alignment Shares into common stock10 11 
Deferred purchase price payable— 7,069 
10
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 Financial Statements

NOTE 1—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Organization and General

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. (the “Company”) was incorporated as a Delaware corporation on October 13, 2020. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”). The Company is an “emerging growth company,(“CBAH” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

On October 13, 2020, the Company was funded by its Sponsor (as defined below) in the amount of $25,100, purchasing 100 undesignated shares of common stock for $100 and advancing $25,000 in exchange for a promissory note. The registration statement for the Company’s initial public offering (the “Initial Public Offering”) was declared effective on December 10, 2020. On December 15, 2020, the Company consummated the Initial Public Offering (as described below). As of March 31, 2021, the Company had neither engaged in any operations nor generated any revenues to date. The Company will not generate operating revenues prior to the completion of its Business Combination and will generate non-operating income in the form of interest income on permitted investments from the proceeds derived from the Initial Public Offering. See “The Trust Account” below. The Company has selected December 31st as its fiscal year end.

Sponsor

The Company’s sponsor is CBRE Acquisition Sponsor, LLC, a Delaware limited liability company (the “Sponsor”). On November 6, 2020, the Sponsor purchased an aggregate of 2,300,000 shares of Class B common stock (“Class B common stock” or “Alignment Shares”) for an aggregate purchase price of $25,000, or approximately $0.01 per share, paid through the cancellation of an equivalent outstanding amount under the promissory note between the Company and the Sponsor, and the tender to the Company of all 100 shares of the Company’s undesignated common stock held by the Sponsor. On November 27, 2020, 287,500 shares of Class B common stock were forfeited by the Sponsor. In connection with the Initial Public Offering, the Company amended and restated its certificate of incorporation to reclassify its Class B common stock. See “Note 3—Initial Public Offering—Alignment Shares” below. In connection with the Initial Public Offering, the Sponsor sold an aggregate of 201,250 Alignment Shares to certain of the Company’s directors, or their respective designees, and an officer of the Company.

Initial Public Offering

The Company intends to finance a Business Combination with proceeds of $402,500,000 from the Initial Public Offering of 40,250,000 SAILSM securities (including the full exercise of the underwriter’s over-allotment option) consisting of one share of Class A common stock, $0.0001 par value, of the Company (“Class A common stock”) and one-fourth of one warrant and approximately $11,050,000 from the sale of 7,366,667 Private Placement Warrants (as defined below) at $1.50 per warrant. Approximately $402,500,000 was held in a Trust Account (as defined below) as of the closing of the Initial Public Offering and the sale of Private Placement Warrants. The underwriter’s over-allotment option, which was exercised in full by the underwriter on December 11, 2020, included 5,250,000 SAILSM securities consisting of 5,250,000 shares of Class A common stock and 1,312,500 warrants which were issued to cover over-allotments.

On and following February 1, 2021, holders of the Company’s SAILSM securities may elect to separately trade the shares of Class A common stock and warrants included in the SAILSM securities. Any SAILSM securities not separated will continue to tradebecame listed on the New York Stock Exchange (“NYSE”) under the stock symbol “CBAH.U,” and any underlying shares of Class A common stock and warrants that are separated will trade on NYSE under the symbols “CBAH” and “CBAH WS,” respectively. No fractional warrants will be issued upon separation of the SAILSM securities and only whole warrants will trade.

The Trust Account

Of the $413,550,000 in proceeds from the Initial Public Offering and the sale of the Private Placement Warrants, $402,500,000 was deposited in an interest-bearing U.S. based trust account (“Trust Account”). The funds in the Trust Account will be invested only in specified U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations (collectively “permitted investments”).

Funds will remain in the Trust Account except for the withdrawal of interest earned on the funds that may be released to the Company to pay taxes. The proceeds from the Initial Public Offering and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of (i) the completion of a Business Combination, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s Business Combination or to redeem 100% of the public shares if the Company does not complete a Business Combination within 24 months (or 27 months from the consummation of the Initial Public Offering if the Company has executed a letter of intent, agreement in principle or definitive agreement for a Business Combination within 24 months from the consummation of the Initial Public Offering but has not completed the Business Combination within such 24-month period) from the closing of the Initial Public Offering or (B) with respect to other specified provisions relating to stockholders’ rights or pre-Business Combination activity, and (iii) the redemption of all of the Company’s public shares if it has not completed a Business Combination within 24 months (or 27 months, as applicable) from the closing of the Initial Public Offering, subject to applicable law.

The remaining proceeds outside the Trust Account may be used to pay business, legal and accounting due diligence costs on prospective acquisitions, listing fees and continuing general and administrative expenses.

"AMPS."

Business Combination

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering, although substantially all of the net proceeds of the Initial Public Offering are intended to be generally applied toward consummating a Business Combination with (or acquisition of) a target business. As used herein, a Business Combination must be with one or more target businesses that together have an aggregate fair market value equal to at least 80% of the balance in the Trust Account (less any deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the Company signing a definitive agreement.

After signing a definitive agreement for a Business Combination, the Company will provide the public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock either (i) in connection with a stockholder meeting to approve the Business Combination or (ii) by means of a tender offer. Each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the Business Combination at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the Business Combination including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the Trust Account is initially anticipated to be approximately $10.00 per public share. The per-share amount the Company will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions payable to the underwriter. The decision as to whether the Company will seek stockholder approval of the Business Combination or will allow stockholders to sell their shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval under applicable law or stock exchange listing requirements. If the Company seeks stockholder approval, it will complete its Business Combination only if a majority of the outstanding shares of Class A common stock voted are voted in favor of the Business Combination (or, if the applicable rules of the NYSE then in effect require, a majority of the outstanding shares of common stock held by public stockholders are voted in favor of the business transaction). However, in no event will the Company redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001, after payment of the deferred underwriting commission (the “Redemption Floor”). In such an instance, the Company would not proceed with the redemption of its public shares and the related Business Combination, and instead may search for an alternate Business Combination.

The Company has 24 months from the closing date of the Initial Public Offering to complete its Business Combination (or 27 months, as applicable). If the Company does not complete a Business Combination within this period, it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, subject to lawfully available funds therefore, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds in the Trust Account and not previously released to the Company to pay its taxes (and up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. The Sponsor and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they will waive their rights to liquidating distributions from the Trust Account with respect to their Alignment Shares if the Company fails to complete a Business Combination within 24 months from the closing of the Initial Public Offering (or 27 months, as applicable). However, if the Sponsor and the Company’s officers and directors acquire public shares after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such public shares if the Company fails to complete a Business Combination within the allotted 24 month period (or 27 month period, as applicable).

The underwriter has agreed to waive its rights to any deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination and those amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Company’s public shares.

If the Company fails to complete a Business Combination, the redemption of the Company’s public shares will reduce the book value of the shares held by the Sponsor and the Company’s directors and officers, who will be the only remaining stockholders after such redemptions.

If the Company holds a stockholder vote or there is a tender offer for shares in connection with a Business Combination, a public stockholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes, subject to the Redemption Floor. As a result, such shares have been recorded at their redemption amount and classified as temporary equity in accordance with FASB

2.Significant Accounting Standards Codification (ASC) 480, “Distinguishing Liabilities from Equity” (ASC 480).

Going Concern Consideration

In connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company has access to additional funds from the Sponsor that are sufficient to fund the working capital needs of the Company for at least one year from the issuance of these financial statements. See “Note 4—Related Party Transactions—Notes Payable—Sponsor” for further information.

Policies

Revision of Prior Period Financial Statements

Pursuant to the Initial Public Offering, the Company sold 40,250,000 SAILSM securities (including the full exercise of the underwriter’s over-allotment option) at a price of $10.00 per unit (a “SAILSM security”). Each SAILSM security consists of one share of Class A common stock of the Company at $0.0001 par value and one-fourth of one redeemable warrant (or 10,062,500 redeemable warrants in the aggregate) (the “Redeemable Warrants”). Historically, the Company accounted for the Redeemable Warrants as equity.

On April 12, 2021, the Securities and Exchange Commission (the “SEC”) released a public statement (the “Public Statement”) informing market participants that warrants issued by special purpose acquisition companies may require classification as a liability. Due to the clarifying guidance within the Public Statement, the Company determined that the Redeemable Warrants should be classified as liabilities, which requires the Redeemable Warrants to be measured at fair value with any changes in fair value each period reported in earnings. Additionally, since the Redeemable Warrants are classified as liabilities, the issuance costs associated with the Initial Public Offering that are allocated to the Redeemable Warrants are expensed in the Statement of Operations.

The Company also reconsidered its historical accounting policy related to its Class A common stock subject to redemption and determined that all Class A common stock are subject to redemption, except pursuant to the Redemption Floor, and have a redemption value reflective of the balance in the Trust Account.

The Company assessed the materiality of the errors on the prior periods’ financial statements in accordance with ASC 250, “Accounting Changes and Error Corrections” (ASC 250), and concluded that the errors were not material to prior reporting periods. Therefore, in accordance with ASC 250 (“SEC Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”), the financial statements as of December 31, 2020, which are presented herein, have been revised. The following are selected line items from the Company’s financial statements illustrating the effect of the error correction thereon:

Balance Sheet as of December 31, 2020

   As Reported   Adjustment   As Revised 

Redeemable warrant liability

  $—     $18,716,250   $18,716,250 

Class A common stock subject to possible redemption

   385,352,413    17,148,595    402,501,008 

Class A common stock

   171    (171)    —   

Additional paid-in capital

   5,295,372    (5,295,372)    —   

Accumulated deficit

   (295,743)    (30,569,302)    (30,865,045) 
  

 

 

   

 

 

   

 

 

 

Total Stockholders’ Equity (Deficit)

  $5,000,001   $(35,864,845)   $(30,864,844) 
  

 

 

   

 

 

   

 

 

 

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

and Principles of Consolidation

The accompanyingCompany prepares its unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”GAAP”) and pursuant to the accounting and disclosure rules 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, consisting only ofincluding normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentationstatement of the Company’s financial position atas of March 31, 20212024, and the results of operations and cash flows for the period presented.

Emerging Growth Company

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities and Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

Cash

Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company did not have any cash equivalents as ofthree months ended March 31, 2021 or December 31, 2020.

Assets Held in Trust Account

2024, and 2023. The Company invests in U.S. government securities, within the meaning set forth in Section 2(a)(16)results of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by the Company.

As of March 31, 2021, the assets held in the Trust Account were comprised of $402,505,042 invested in marketable debt securities and $2,016 of interest receivable associated with those investments. As of December 31, 2020, the assets held in the Trust Account were comprised of $402,500,000 invested in marketable debt securities and $1,008 of interest receivable associated with those investments. The Company classifies the marketable debt securities held in the Trust Account as availableoperations for sale. Available for sale debt securities are carried at their fair value and any difference between cost and fair value is recorded as an unrealized gain or loss, net of income taxes, and is reported as accumulated other comprehensive income (loss) in the statements of equity. The cost of securities sold is based on the specific identification method. The estimated fair values of marketable debt securities held in the Trust Account are determined using available market information. During the three months ended March 31, 2021 and the period ended December 31, 2020, there have been no realized or unrealized gains or losses or declines in value resulting from credit losses on the debt securities held in the Trust Account. Interest and dividends on the debt securities held in the Trust Account2024, are included in Interest income earned on assets held in Trust Account in the Statement of Operations.

During the three months ended March 31, 2021 and the period ended December 31, 2020, the Company did not withdraw any interest income from the Trust Account to pay its tax obligations.

Class A Common Stock Subject to Possible Redemptions

The Company accounts for its common stock as subject to possible redemption in accordance with the guidance in ASC 480. Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the controlnecessarily indicative of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock features certain redemption rightsresults that are considered tomay be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, the Company’s Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s Balance Sheet.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures” (ASC 820), approximates the carrying amounts represented in the Balance Sheet due to their short-term nature.

Fair Value Measurement

ASC 820 establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment, characteristics specific to the investment, market conditions and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurements) and the lowest priority to unobservable inputs (Level III measurements).

Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining fair value.

The three levels of the fair value hierarchy under ASC 820 are as follows:

Level I — Quoted prices (unadjusted) in active markets for identical investments at the measurement date are used.

Level II — Pricing inputs are other than quoted prices included within Level I that are observableexpected for the investment, either directlyfull year or indirectly. Level II pricing inputs include quoted prices for similar investments in active markets, quoted prices for identicalany other future interim or similar investments in markets that are not active, inputs other than quoted prices that are observable for the investment, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level III — Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. The inputs used in determination of fair value require significant judgment and estimation.

In some cases, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the investment is categorized in its entirety is determined based on the lowest level input that is significant to the investment. Assessing the significance of a particular input to the valuation of an investment in its entirety requires judgment and considers factors specific to the investment. The categorization of an investment within the hierarchy is based upon the pricing transparency of the investment and does not necessarily correspond to the perceived risk of that investment.

annual period.

Offering Costs

The Company incurred $22,926,943 in offering costs in connection with the Initial Public Offering. Offering costs consist of legal, accounting, underwriting fees and other costs incurred that are directly related to the Initial Public Offering. The Company complies with the requirements of ASC 340, “Other Assets and Deferred Costs” (ASC 340), and SEC Staff Accounting Bulletin Topic 5A “Expenses of Offering.” These offering costs were allocated between the Redeemable Warrant liability ($997,322) and Class A common stock subject to redemption ($21,929,621) in proportion to the proceeds of the Initial Public Offering.

Income Taxes

Income taxes are accounted for under the asset and liability method in accordance with the “Accounting for Income Taxes” Topic of the FASB ASC (Topic 740). Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and tax basis of assets and liabilities and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured by applying enacted tax rates and laws and are released in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are provided against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.

Net Income per Share of Common Stock

The Company has two classes of common stock, Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two classes of common stock. Net income per share of common stock is computed by dividing pro rata net income by the weighted average number of shares of common stock outstanding during the period, plus to the extent dilutive, the incremental number of shares of common stock to settle warrants, as calculated using the treasury stock method.

The Company has not considered the effect of the Redeemable Warrants and Private Placement Warrants to purchase an aggregate of 17,429,167 Class A common stock in the calculation of diluted income per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants are out of the money and hence would not result in the issuance of incremental shares of common stock under the treasury stock method. As a result, diluted income per share of common stock is the same as basic income per share of common stock for the period. No warrants were exercised during the three months ended March 31, 2021.

   Class A
common stock		   Class B
common stock		 

Basic and diluted net income per share:

    

Numerator:

    

Allocation of net loss including accretion of temporary equity

  $8,094,768   $404,738 
  

 

 

   

 

 

 

Denominator:

    

Weighted-average shares outstanding

   40,250,000    2,012,500 
  

 

 

   

 

 

 

Basic and diluted net loss per share

  $0.20   $0.20 
  

 

 

   

 

 

 

Stock-Based Compensation

Stock-based compensation expense associated with the Company’s equity awards is measured at fair value upon the grant date and recognized over the requisite service period. To the extent a stock-based award is subject to a performance condition, the amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event is deemed probable to occur. The fair value of equity awards has been estimated using Monte Carlo simulations. Forfeitures are recognized as incurred.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported amounts of assets and liabilities and disclosure of contingent assets and liabilities atin the date of thecondensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.accompanying notes. Actual results could differ materially from those estimates. Refer to “Note 7—Redeemable Warrant Liability”
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 Redeemable Warrant liability. Referchief operating decision makers is the chief executive officer. Based on the financial information presented to “Note 8—Stock-Based Compensation”and reviewed by the chief operating decision makers 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, revenue from net metering credit agreements,
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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)
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 March 31, 2024As of December 31, 2023
Cash and cash equivalents$173,266 $160,817 
Current portion of restricted cash17,622 45,358 
Restricted cash, noncurrent portion12,625 12,752 
Total$203,513 $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 March 31, 2024 and no customers that individually accounted over 10% of total operating revenues, net for the valuationthree months ended March 31, 2024.
The Company had no customers that individually accounted for over 10% of our stock-based compensation.

total accounts receivable, net as of December 31, 2023. The Company had one customer that individually accounted for over 10% (i.e., 15.0%) of total operating revenues, net for the three months ended March 31, 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 impact of this ASU, but does not currently expect it to have a material impact on its consolidated financial statements and related disclosures.
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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)
In December 2019,2023, the Financial Accounting Standards Board (FASB)FASB issued ASU 2019-12, “IncomeNo. 2023-09, Income Taxes (ASC(Topic 740): SimplifyingImprovements 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 Accounting forrate 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.” This ASU removes specific exceptions to the general principles in ASC 740taxes paid must be similarly disaggregated by federal, state, and improves and simplifies financial statement preparers’ application of income tax-related guidance.foreign based on a quantitative threshold. This ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within those years,2024, with early adoption permitted. The guidance shall be applied on a prospective basis with the option to apply retrospectively. The Company adopted ASU 2019-12 inwill apply the first quarterguidance upon the effective date. The Company is currently evaluating the impact of 2021 and the adoption did not have a material impactthis update on the Company’sits consolidated financial statements and related disclosures.

Management

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 March 31,
 20242023
Power sales under PPAs$12,625 $8,986 
Power sales under NMCAs9,977 6,836 
Power sales on wholesale markets295 356 
Total revenue from power sales22,897 16,178 
Solar renewable energy credit revenue9,936 10,067 
Rental income2,085 626 
Performance based incentives4,807 2,098 
Revenue recognized on contract liabilities914 409 
Other20 — 
Total operating revenues, net$40,659 $29,378 

Transaction price allocated to the remaining performance obligation
In accordance with optional exemptions available under Topic 606, the Company does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect ondisclose the Company’s financial statements.

NOTE 3—INITIAL PUBLIC OFFERING

Pursuantvalue 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 the Initial Public Offering,which the Company sold 40,250,000 SAILSM securities (includinghave the full exerciseright 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 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 underwriter’s over-allotment option) at a pricecontract. Most of $10.00the 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 SAILSM security. Each SAILSM security consistsshare data, unless otherwise noted)
2024$14,958 
202515,329 
202611,498 
20275,967 
20281,029 
Total$48,781 
Accounts receivable
The following table presents the detail of one share of Class A common stock and one-fourth of one Redeemable Warrant (or 10,062,500 Redeemable Warrantsreceivables as recorded in accounts receivable in the aggregate). Underunaudited condensed consolidated balance sheets:
 As of March 31, 2024As of December 31, 2023
Power sales under PPAs$6,557 $3,582 
Power sales under NMCAs9,896 8,094 
Power sales on wholesale markets63 249 
Total power sales16,516 11,925 
Solar renewable energy credits3,324 3,379 
Rental income134 450 
Performance based incentives83 1,346 
Total$20,057 $17,100 
Payments for all accounts receivable in the termsabove table are typically received within 30 days from invoicing. As of the warrant agreement,both March 31, 2024, and December 31, 2023, the Company has agreed to use its commercially reasonable efforts to file a registration statement underdetermined that the Securities Act following the completion of the Business Combination covering the shares of common stock issuable upon exercise of the Redeemable Warrants. Each whole Redeemable Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.00 per share subject to adjustment as provided herein. The warrants will become exercisable on the later of 30 days after the completion of the Business Combination or 12 months from the closing of the Initial Public Offering and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. Only whole warrants may be exercised and no fractional warrants will be issued upon separation of the SAILSM securities and only whole warrants will trade. allowance for credit losses is $0.9 million.
Contract liabilities
The Company grantedrecognizes contract liabilities related to long-term agreements to sell solar renewable energy credits ("SRECs") that are prepaid by customers before SRECs are delivered. The Company will recognize revenue associated with the underwriter a 45-day optioncontract liabilities as SRECs are delivered to purchase up to an additional 5,250,000 SAILSM securities to cover over-allotments, which was exercised in full by the underwriter on December 11, 2020.

Alignment Shares

customers through 2037. As of March 31, 2021,2024, the SponsorCompany had current and non-current contract liabilities of $2.8 million and $6.1 million, respectively. As of December 31, 2023, the Company had current and non-current contract liabilities of $2.9 million and $5.6 million, respectively. The Company does not have any other significant contract asset or liability balances related to revenues.

Rental income
Rental income is primarily derived from the master lease agreement with Vitol (as described in Note 5, "Acquisitions"), as well as long-term PPAs accounted for as operating leases under ASC 842. The Company's leases include various renewal options which are included in the lease term when the Company has determined it is reasonably certain of exercising the options based on consideration of all relevant factors that create an economic incentive for the Company as lessor. Certain leases include variable lease payments associated with production of solar facilities, which are recognized as rental income in period the energy is delivered. Maturities of fixed rental payments as of March 31, 2024, are as follows:
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
2024$6,803 
20256,118 
20262,892 
2027513 
2028514 
Thereafter5,255 
Total$22,095 
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 and, therefore, has consolidated the VIEs as of March 31, 2024, and December 31, 2023. No VIEs were deconsolidated during the three months ended March 31, 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 three months ended March 31, 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
March 31, 2024
As of
December 31, 2023
Current assets$25,201 $22,298 
Non-current assets978,315 936,358 
Total assets$1,003,516 $958,656 
Current liabilities$9,346 $8,576 
Non-current liabilities159,151 141,360 
Total liabilities$168,497 $149,936 
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 three months ended March 31, 2024 and 2023, for which the Company determined that it is not the primary beneficiary and thus did not consolidate.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
The Company considered qualitative and quantitative factors in determining which VIEs are deemed significant. As of March 31, 2024 and December 31, 2023, the Company consolidated thirty-six and thirty-five VIEs, respectively. No VIEs were deemed significant as of March 31, 2024 and December 31, 2023.
5.Acquisitions
2024 Acquisitions
Vitol Acquisition
On January 31, 2024, the Company, through its wholly-owned subsidiary, Altus Power, LLC, acquired an 84 MW portfolio of 20 operating solar energy facilities located across five US states (the “Vitol Acquisition”). The portfolio was acquired from Vitol Solar I LLC (“Vitol”) through an acquisition of 100% of the outstanding membership interests in 18 project companies and 100% of the outstanding Class B membership interest in a partnership which owns 2 project companies. The total purchase price was approximately $119.7 million and the transaction was entered into by the Company to grow its portfolio of solar energy facilities. The purchase price and associated transaction costs were funded by cash on hand. The purchase price is also subject to customary adjustments for working capital and other items.

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

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

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

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
Assets
Accounts receivable$1,649 
Property, plant and equipment123,363 
Operating lease asset7,835 
Other assets1,691 
Total assets acquired134,538 
Liabilities
Accounts payable249 
Intangible liabilities2,370 
Asset retirement obligation1,374 
Operating lease liability7,187 
Contract liability1,130 
Other liabilities393 
Total liabilities assumed12,703 
Non-controlling interests2,100 
Total fair value of consideration transferred$119,735 

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 
Post-closing purchase price true-up45 
Total fair value of consideration transferred$119,735 

The Company incurred approximately $0.7 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 three months ended March 31, 2024. Acquisition related costs include legal, consulting, and other transaction-related costs.
The impact of the Vitol Acquisition on the Company's revenue and net income in the consolidated statement of operations was an increase of $2.0 million and $1.2 million, respectively, for the three months ended March 31, 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(2,270)9 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 directorsactual 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.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
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 March 31, 2024 (unaudited)For the three months ended March 31, 2023 (unaudited)
Operating revenues, net$41,281 $31,474 
Net income4,866 3,722 

Asset Acquisitions
During the three months ended March 31, 2024, the Company acquired a solar energy facility located in Massachusetts with a total nameplate capacity of 1.3 MW from a third party for a total purchase price of $4.0 million. The acquisition was accounted for as an acquisition of assets, whereby the Company acquired $4.0 million of property, plant and officers hold 2,012,500 Alignment Shares.equipment and $0.6 million of operating lease assets, and assumed $0.6 million of operating lease liabilities. During the three months ended March 31, 2024, the Company also acquired land in Massachusetts from a third party for a total purchase price of $1.2 million.
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 Alignment Sharesportfolio was acquired from Project Hyperion Holdco LP (the “Seller”) for total consideration of $121.7 million. The purchase price and associated transaction costs were funded by the proceeds from an amendment of the APAF III Term Loan (as defined in Note 8, "Debt") and cash on hand. The Caldera Acquisition was made pursuant to the purchase and sale agreement (the "PSA") dated October 27, 2023, and entered into by the Company to grow its portfolio of solar energy facilities. Pursuant to the PSA, the Company acquired 100% ownership interest in Project Hyperion, LLC, a holding entity that owns the acquired solar energy facilities.
The Company accounted for the Caldera Acquisition under the acquisition method of accounting for business combinations. Under the acquisition method, the purchase price was allocated to the assets acquired and liabilities assumed on December 20, 2023, based on their estimated fair value. All fair value measurements of assets acquired and liabilities assumed, including the noncontrolling interests, were based on significant estimates and assumptions, including Level 3 (unobservable) inputs, which require judgment. Estimates and assumptions include the estimates of future power generation, commodity prices, operating costs, and appropriate discount rates.
The assets acquired and liabilities assumed are designatedrecognized provisionally on the consolidated balance sheet at their estimated fair values as shares 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 December 20, 2024.
The following table presents the preliminary allocation of the purchase price to the assets acquired and liabilities assumed, based on their estimated fair values on December 20, 2023:
Provisional accounting as of December 20, 2023Measurement period adjustmentsAdjusted provisional accounting as of December 20, 2023
Assets
Accounts receivable$876 $— $876 
Property, plant and equipment131,728 (223)131,505 
Intangible assets350 — 350 
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
Operating lease asset15,557 — 15,557 
Other assets2,079 (95)1,984 
Total assets acquired150,590 (318)150,272 
Liabilities
Intangible liabilities5,200 — 5,200 
Asset retirement obligation1,920 — 1,920 
Operating lease liability17,567 — 17,567 
Other liabilities1,275 (244)1,031 
Total liabilities assumed25,962 (244)25,718 
Non-controlling interests2,900 — 2,900 
Total fair value of consideration transferred, net of cash acquired$121,728 $(74)$121,654 

The fair value of consideration transferred, net of cash acquired, as of December 20, 2023, is determined as follows:
Cash consideration paid to seller on closing$80,942 $— $80,942 
Cash consideration paid to settle debt on behalf of 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 
(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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
6. Debt
 
As of
March 31, 2024
As of
December 31, 2023
Interest
Type		Weighted
average
interest rate
Long-term debt
APAF Term Loan$471,466 $474,609 Fixed3.51 %
APAF II Term Loan111,821 112,810 Floating*SOFR + 1.475%
APAF III Term Loan423,619 426,619 Fixed6.03 %
APAF IV Term Loan101,000 — Fixed6.45 %
APAGH Term Loan100,000 100,000 Fixed8.50 %
APAG Revolver65,000 65,000 FloatingSOFR + 1.60%
APACF II Facility31,868 — FloatingSOFR + 3.25%
Other term loans11,000 11,000 Fixed3.04 %
Financing obligations recognized in failed sale leaseback transactions42,850 42,767 Imputed3.97 %
Total principal due for long-term debt1,358,624 1,232,805 
Unamortized discounts and premiums(13,291)(13,722)
Unamortized deferred financing costs(18,085)(16,165)
Less: Current portion of long-term debt73,429 39,611 
Long-term debt, less current portion$1,253,819 $1,163,307 
* Interest rate is effectively fixed by interest rate swap, see discussion below.
APAF Term Loan
On August 25, 2021, APA Finance, LLC (“APAF”), a wholly owned subsidiary of the Company, entered into a $503.0 million term loan facility with Blackstone Insurance Solutions (“BIS”) through a consortium of lenders, which consists of investment grade-rated Class A and Class B common stocknotes (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 March 31, 2024, the outstanding principal balance of the APAF Term Loan was $471.5 million less unamortized debt discount and loan issuance costs totaling $6.5 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 March 31, 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 reclassifiedused 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 the 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.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
As of March 31, 2024, the outstanding principal balance of the APAF II Term Loan was $111.8 million, less unamortized debt issuance costs of $2.0 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 March 31, 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 IIIBorrower”) 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 APAF III 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 APAF III Borrower has the right to increase the funding facility to make additional draws for certain solar generating facilities, as set forth in the credit agreement. On February 15, 2023, the Company borrowed $193.0 million from this facility to fund the True Green II Acquisition and the associated costs and expenses. The principal balance borrowed under the APAF III Term Loan was offset by $4.0 million of debt issuance costs and $6.3 million of issuance discount, which have been deferred and will be recognized as interest expense through June 30, 2033. The APAF III Term Loan is secured by membership interests in the Company's subsidiaries.
On June 15, 2023 and July 21, 2023, the Company amended the APAF III Term Loan to add $47.0 million and $28.0 million of additional borrowings, respectively, the proceeds of which were used to repay outstanding term loans under the Construction to Term Loan Facility (as defined below), and to provide long-term financing for new solar projects. The principal balance borrowed under the amendments was offset by $0.3 million and $0.2 million of issuance costs, respectively, and $1.5 million and $1.1 million of issuance discount, respectively, which have been deferred and will be recognized as interest expense through June 30, 2033.
On December 20, 2023, the Company amended the APAF III Term Loan to add $163.0 million of additional borrowings, the proceeds of which were used to fund the Caldera Acquisition. The amendment increased the weighted average fixed interest rate for all borrowings under the APAF III Term Loan to 6.03%, and increased the rate of amortization for the new borrowings under the amendment to 3.25% per annum until June 30, 2033. The principal balance borrowed under the amendment was offset by $1.3 million of issuance costs and $0.8 million of issuance discount, which have been deferred and will be recognized as interest expense through June 30, 2033.
As of March 31, 2024, the outstanding principal balance of the APAF III Term Loan was $423.6 million, less unamortized debt issuance costs and discount of $14.0 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 March 31, 2024, and December 31, 2023, the Company was in compliance with all covenants.
APAF IV Term Loan
On March 26, 2024, the Company, through its subsidiaries, APA Finance IV, LLC (the “APAF IVBorrower”), 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 Initial Public OfferingVitol Acquisition, which closed on January 31, 2024. The principal balance borrowed under the APAF IV Term Loan was offset by
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
$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 March 31, 2024, the outstanding principal balance of the APAF IV Term Loan was $101.0 million, less unamortized debt issuance costs and discount of $1.6 million. As of March 31, 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 “APAGHBorrower”), 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 Company’s second amendedassets of the APAGH Borrower, its parent, Altus Power, LLC (“Holdings”) and restated certificatethe 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 incorporation, filedthe 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 March 31, 2024, the outstanding principal balance of the APAGH Term Loan was $100.0 million, less unamortized debt issuance costs of $3.8 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 March 31, 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 March 31, 2024, and December 31, 2023, there was $65.0 million outstanding under the APAG Revolver. As of March 31, 2024, and December 31, 2023, the Company was in compliance with all covenants under the APAG Revolver.
APACF II Facility
On November 10, 2020. 2023, APACF II, LLC (“APACF II” or the “APACF IIBorrower”) 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. On January 19, 2024, the Company borrowed $31.9 million under the APACF II Facility, which was
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
offset by $0.6 million of debt issuance costs, 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.

As discussed furtherof March 31, 2024, the outstanding principal balance of the APACF II Facility was $31.9 million, less unamortized debt issuance costs of $0.9 million. As of December 31, 2023, no amounts were outstanding under the APACF II Facility. As of March 31, 2024, the Company was in Note 4,compliance with all covenants under the APACF II Facility.
Other Term Loans - Construction 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 March 31, 2024, the outstanding principal balance of the term loan is $11.0 million, less unamortized debt discount of $1.7 million. As of December 31, 2023, the outstanding principal balance of the term loan is $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 March 31, 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 March 31, 2024, the Company had $52.3 million of letters of credit outstanding and $51.1 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 March 31, 2024 and December 31, 2023, the Company had outstanding surety bonds of $5.9 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 March 31, 2024, the Company's recorded financing obligations were $41.9 million, net of $0.9 million of deferred transaction costs. As of December 31, 2023, the Company's recorded financing obligations were $41.8 million, net of $0.9
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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)
million of deferred transaction costs. Payments of $0.3 million and $0.2 million were made under financing obligations for the three months ended March 31, 2024, and 2023, respectively. Interest expense, inclusive of the amortization of deferred transaction costs for the three months ended March 31, 2024 and 2023, was $0.4 million.
During the three months ended March 31, 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 three months ended March 31, 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$2,788 
20253,023 
20262,995 
20272,986 
20282,967 
Thereafter14,143 
Total$28,902 
The difference between the outstanding financing obligation of $42.9 million and $28.9 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 obligations included in minimum lease payments. The remaining difference is due to $3.8 million of interest accrued and a $0.4 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:
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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)
March 31, 2024
Level 1Level 2Level 3Total
Assets
Cash equivalents:
Money market fund$62,695 $— $— $62,695 
Derivative assets:
Interest rate swaps$— $2,585 $— $2,585 
Total assets at fair value62,695 2,585 — 65,280 
Liabilities
Alignment Shares liability— — 34,415 34,415 
Other long-term liabilities:
True Green II Acquisition - contingent liability— — 4,880 4,880 
Caldera Acquisition - contingent liability— — 2,300 2,300 
Total liabilities at fair value— — 41,595 41,595 
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 March 31, 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 (such officers, together with the Sponsor, purchased the shares of Class B common stock for an aggregate purchase price of $25,000 or approximately $0.01 per share. The purchase price of the Alignment Shares was determined by dividing the amount contributed to the Company by the number of Alignment Shares issued. In connection with the Initial Public Offering, the “Sponsor sold an aggregate of 201,250 Alignment Shares to certain of the Company’s directors, or their respective designees,Parties”) and an officer of the Company.former CBAH directors. The Alignment Shares are entitled to 20% of the voting power of the Company’s common stock prior to the completion of the Company’s Business Combination.

The Alignment Shares are designated as shares of Class B common stock and are different from thewill automatically convert into shares of Class A common stock includedbased upon the Total Return (as defined in Exhibit 4.4 to our 2022 Annual Report on Form 10-K) on the SAILSM securities in several important ways, including that:

Only holdersClass A common stock as of the Alignment Shares have the right to vote on the election of directors prior to the Business Combination;

The Alignment Shares are subject to certain transfer restrictions, as described in more detail below;

The Sponsor and the Company’s officers and directors have entered a letter agreement with the Company, pursuant to which they have agreed (i) to waive their redemption rights with respect to any Alignment Shares and public shares they hold in connection with the completionrelevant measurement date over each of the Business Combination, (ii) to waive their redemption rights with respect to any Alignment Shares and public shares they hold in connection with a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of its public shares if the Company has not consummated a Business Combination within 24 months (or 27 months, as applicable) from the closing of the Initial Public Offering or with respect to other specified provisions relating to stockholders’ rights or pre-Business Combination activity; and (iii) to waive their rights to liquidating distributions from the Trust Account with respect to any Alignment Shares they hold if the Company fails to complete a Business Combination within 24 months (or 27 months, as applicable) from the closing of the Initial Public Offering, although they are entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete a Business Combination within such time period. If the Company submits the Business Combination to the public stockholders for a vote, the Sponsor and the Company’s directors and officers have agreed, pursuant to such letter agreement, to vote their Alignment Shares and any public shares purchased during or after the Initial Public Offering in favor of the Business Combination; and

The 2,012,500 shares of Class B common stock, par value $0.0001 per share, will convert as follows: on the last day of each measurement period, which will occur annually over tenseven fiscal years following the Merger.

Upon the consummation of the Business Combination (and, with respect to any measurement period in whichMerger, Alignment Shares have no continuing service requirement and do not create an unconditional obligation requiring the Company undergoesto redeem the instruments by transferring assets. In addition, the shares convert to a change of control or in which the Company is liquidated, dissolved or wound up, on the business day immediately prior to such event instead of on the last day of such measurement period), 201,250 Alignment Shares will automatically convert, subject to adjustment as described herein, into shares of the Company’s Class A common stock (“conversion shares”), as follows:

If the sum (such sum, the “Total Return”) of (i) the VWAP, calculated in accordance with “Item 15. Exhibits, and Financial Statement Schedules—Exhibit 4.5 Description of Securities—Alignment Shares—Volume weighted average price” of the Company’s Annual Report on Form 10-K which is incorporated herein by reference, of sharesvariable number of Class A common stock for the final fiscal quarter in such measurement period and (ii) the amount per share of any dividends or distributions paid or payable to holders of Class A common stockdepending on the record date for which is on or prior to the last day of the measurement period does not exceed the price threshold (as defined below), the number of conversion shares for such measurement period will be 2,013 shares of Class A common stock;

If the Total Return exceeds the price threshold but does not exceed an amount equal to 130% of the price threshold, then the number of conversion shares for such measurement period will be the greater of (i) 2,013 shares of Class A common stock and (ii) 20% of the difference between the Total Return and the price threshold, multiplied by (A) the sum (such sum (as proportionally adjusted to give effect to any stock splits, stock capitalizations, stock combinations, stock dividends, reorganizations, recapitalizations or any such similar transactions), the “Closing Share Count”) of (x) the number of shares of Class A common stock outstanding immediately after the closing of the Initial Public Offering (including any exercise of the over-allotment option) and (y) if in connection with the Business Combination there are issued any shares of Class A common stock or Equity-Linked Securities (as defined below), the number of shares of Class A common stock so issued and the maximum number of shares of Class A common stock issuable (whether settled in shares or in cash) upon conversion or exercise of such Equity-Linked Securities, divided by (B) the Total Return; and

If the Total Return exceeds an amount equal to 130% of the price threshold, then the number of conversion shares for such measurement period will be the greater of (i) 2,013 shares of Class A common stock and (ii) the sum of (x) 20% of the difference between an amount equal to 130% of the price threshold and the price threshold and (y) 30% of the difference between the Total Return and an amount equal to 130% of the price threshold, multiplied by (A) the Closing Share Count, divided by (B) the Total Return.

The term “measurement period” means (i) the period beginning on the date of the Company’s Business Combination and ending with, and including, the first fiscal quarter following the end of the fiscal year in which the Company consummates the Business Combination and (ii) each of the nine successive four-fiscal-quarter periods. The “price threshold” will initially equal $10.00 for the first measurement period and will thereafter be adjusted at the beginning of each subsequent measurement period to be equal to the greater of (i) the price threshold for the immediately preceding measurement period and (ii) the VWAP for the immediately preceding measurement period (in each case, as proportionally adjusted to give effect to any stock splits, stock capitalizations, stock combinations, stock dividends, reorganizations, recapitalizations or any such similar transactions). “Equity-Linked Securities” means securities issued by the Company and/or any entities that (after giving effect to completion of the Business Combination) are subsidiaries of the Company that are directly or indirectly convertible into or exercisable for shares of Class A common stock, or for a cash settlement value in lieu thereof. The foregoing calculations will be based on the Company’s fiscal year and fiscal quarters, which may change as a result of the Business Combination.

Upon a change of control occurring after the Business Combination (but not in connection with the Business Combination), for the measurement period in which the change of control transaction occurs, the 201,250 Alignment Shares will automatically convert into conversion shares (on the business day immediately prior to such event), as follows:

If, prior to the date of such change of control, the Alignment Shares have already cumulatively converted into a number of shares of Class A common stock equal in the aggregate to at least 5% of the Closing Share Count (the “5% Threshold Amount”), the number of conversion shares will equal the greater of (i) 2,013 shares of Class A common stock and (ii) the number of shares of Class A common stock that would be issuable based on the excess of the Total Return above the price threshold as described above with such Total Return calculated based on the purchase price or deemed value agreed upon in the change of control transaction rather than the VWAP for the final fiscal quarter in the relevant measurement period;

If, prior to the date of the change of control, the Alignment Shares have not already cumulatively converted into a number of shares of Class A common stock equal in the aggregate to at least the 5% Threshold Amount, the number of conversion shares will equal the greater of (i) the 5% Threshold Amount less any shares of Class A common stock previously issued upon conversion of Alignment Shares and (ii) the number of shares that would be issuable based on the excess of the Total Return above the price threshold described above with the Total Return calculated based on the purchase price or deemed value agreed upon in the change of control transaction rather than the VWAP for the final fiscal quarter in the relevant measurement period; and

To the extent any remaining tranches of 201,250 Alignment Shares remain outstanding, each remaining tranche of 201,250 Alignment Shares will automatically convert into 2,013 shares of the Company’s Class A common stock.

The Company’s Sponsor, directors and officers have agreed not to transfer, assign or sell (i) any of their respective Alignment Shares except to any permitted transferees and (ii) any of their respective shares of Class A common stock deliverable upon conversion of the Alignment Shares for 30 days following the completion of the Company’s Business Combination.

Private Placement Warrants

On December 10, 2020 the Sponsor purchased from the Company an aggregate of 7,366,667 Private Placement Warrants at atrading price of $1.50 per warrant (approximately $11,050,000 in the aggregate), in a private placement that occurred simultaneously with the completion of the Initial Public Offering (the “Private Placement Warrants”). Each Private Placement Warrant entitles the holder to purchase one share of Class A common stock at $11.00 per share, subject to adjustment. A portion of the purchase price of the Private Placement Warrants were added to the proceeds from the Initial Public Offering to be held in the Trust Account such that at the time of closing $402,500,000 are held in the Trust Account.

The Private Placement Warrants are not redeemable by the Company so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants are redeemable by the Company and exercisable by the holders on the same basis as the warrants included in the SAILSM securities sold in the Initial Public Offering. The Sponsor, or its permitted transferees, have the option to exercise the Private Placement Warrants on a cashless basis. The Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of the Business Combination.

If the Company does not complete a Business Combination within 24 months from the closing of the offering (or 27 months, as applicable), the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Company’s public shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.

Registration and Stockholder Rights

The registration and stockholder rights agreement of the Company (the “Registration and Stockholder Rights Agreement”) provides that holders of the Alignment Shares, Private Placement Warrants and warrants that may be issued upon conversion of working capital loans, if any, have registration rights to require the Company to register a sale of any of the Company’s securities held by such holders. These holders are entitled to make demands that the Company register such securities for sale under the Securities Act. In addition, these holders have certain “piggy-back” registration rights to include such securities in other registration statements filed by the Company and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the costs and expenses incurred in connection with filing any such registration statements. Pursuant to the Registration and Stockholder Rights Agreement, the Sponsor is entitled to nominate three individuals for election to the Company’s board of directors, as long as the Sponsor holds any securities covered by the Registration and Stockholder Rights Agreement.

Indemnity

The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third-party vendor (other than the Company’s independent auditors) for services rendered or products sold to the Company, or a prospective target business with which the Company discussed entering into a transaction agreement, reduces the amount of funds in the Trust Account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believes that the Sponsor’s only assets are securities of the Company and, therefore, the Sponsor may not be able to satisfy those obligations. The Company has not asked the Sponsor to reserve for such eventuality as the Company believes the likelihood of the Sponsor having to indemnify the Trust Account is limited because the Company will endeavor to have all third party vendors (other than the Company’s independent auditors) and prospective target businesses as well as other entities execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

NOTE 4—RELATED PARTY TRANSACTIONS

Shares of Common Stock

On October 13, 2020, the Sponsor purchased 100 undesignated shares of common stock for a purchase price of $100, or $1 per share, and advanced $25,000 in exchange for a promissory note. Prior to the Sponsor’s initial investment in the Company, the Company had no assets. On November 6, 2020, the Sponsor purchased an aggregate of 2,300,000 shares of Class B common stock for an aggregate purchase price of $25,000, or approximately $0.01 per share, paid through the cancellation of an equivalent outstanding amount under the promissory note between the Company and the Sponsor, and the tender to the Company of all 100 shares of the Company’s undesignated common stock held by the Sponsor. See “Note payable—Sponsor” and “Note 6—Stockholders’ Deficit” below. On November 27, 2020, 287,500 shares of Class B common stock were forfeited by the Sponsor. In connection with the Initial Public Offering, the Sponsor sold an aggregate of 201,250 Alignment Shares to certain of the Company’s directors, or their respective designees, and an officer of the Company. As of March 31, 2021 and December 31, 2020, the Sponsor and the Company’s directors and officers held 2,012,500 Alignment Shares.

Private Placement Warrants Purchase

On December 10, 2020, the Sponsor purchased from the Company an aggregate of 7,366,667 Private Placement Warrants at a price of $1.50 per warrant or approximately $11,050,000 in the aggregate. See “Note 3—Initial Public Offering—Private Placement Warrants.” Approximately $3,000,000 of proceeds of the Private Placement Warrants purchase were added to the capital of the Company.

Note Payable—Sponsor

On October 13, 2020, the Sponsor advanced $25,000 to the Company in exchange for a promissory note. On November 6, 2020, the Sponsor purchased an aggregate of 2,300,000 shares of Class B common stock for an aggregate purchase price of $25,000, or approximately $0.01 per share, paid through the cancellation of an equivalent outstanding amount under the promissory note between the Company and the Sponsor, and the tender to the Company of all 100 shares of the Company’s undesignated common stock held by the Sponsor. Prior to the Initial Public Offering, the Sponsor loaned the Company $215,316 pursuant to an amended and restated unsecured promissory note to cover expenses related to the Company’s Initial Public Offering. These loans were noninterest bearing, unsecured and due at the earlier of June 30, 2021 and the closing of the Initial Public Offering. The $215,316 loan made pursuant to the amended and restated unsecured promissory note was repaid upon the completion of the Initial Public Offering out of the offering proceeds that have been allocated for the payment of offering expenses (other than underwriting commissions) not held in the Trust Account.

On February 16, 2021, the Company entered into a Second Amended and Restated Promissory Note with the Sponsor, with borrowing capacity up to $3,000,000, in order to finance transaction costs in connection with an intended Business Combination. The note is non-interest bearing and the unpaid principal balance of the promissory note shall be payable on the earlier of: (i) the consummation of a Business Combination and (ii) December 31, 2022. The principal amount of such loans may be convertible into Private Placement Warrants of the post-Business Combination entity at a price of $1.50 per warrant at the option of the Sponsor. These warrants would be identical to the Private Placement Warrants. No amounts were outstanding under the note by the Company as of March 31, 2021. Subsequent to March 31, 2021, the Company borrowed $1,100,000 under the note, which remains outstanding as of May 17, 2021.

Administrative Service Agreement

On December 10, 2020, the Company entered into an agreement to pay $10,000 a month for office space, administrative and support services to an affiliate of the Sponsor and will terminate the agreement upon the earlier of a Business Combination or the liquidation of the Company. For the three months ended March 31, 2021, the Company recorded $30,000 of expense related to this agreement, which is included in Operating expenses on the Statement of Operations.

NOTE 5— COMMITMENT AND CONTINGENCIES

Underwriting Agreement

The underwriter was entitled to underwriting discounts and commissions of $0.55 per SAILSM security, or $22,137,500, of which $8,050,000 was paid at closing of the Initial Public Offering. As of March 31, 2021, the Company had $14,087,500 of accrued offering costs in the accompanying Balance Sheet, representing deferred underwriting commissions that will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes the Business Combination, subject to the terms of the underwriting agreement. A portion of such amount, not to exceed 20% of the total amount of the deferred underwriting commissions held in the Trust Account, may be re-allocated or paid (a) to any underwriter from the Company’s Initial Public Offering in an amount (at the sole discretion of the Company’s management team) that is disproportionate to the portion of the aggregate deferred underwriting commission payable to such underwriter based on their participation in the Initial Public Offering and/or (b) to third parties that did not participate in the Company’s Initial Public Offering (but who are members of the Financial Industry Regulatory Authority (“FINRA”)) that assist the Company in consummating a Business Combination. The election to re-allocate or make any such payments to third parties will be solely at the discretion of the Company’s management team, and such third parties will be selected by the management team in their sole and absolute discretion. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

NOTE 6—STOCKHOLDERS’ DEFICIT

Common Stock

The Company is authorized to issue 250,000,000 shares of Class A common stock with a par value of $0.0001 per share. As of March 31, 2021 and December 31, 2020, there were 40,250,000 shares of Class A common stock outstanding, all of which are presented as temporary equity outside of the stockholders’ deficit section of the Company’s Balance Sheet due to their redemption features. Refer to “Note 1—Description of Organization and Business Operations—Business Combination” and “Note 2—Summary of Significant Accounting Policies—Class A Common Stock Subject to Redemptions” for details on the redemption features associated with the Company’s Class A common stock.

The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $0.0001 per share. As of March 31, 2021 and December 31, 2020, there were 2,012,500 shares of Class B common stock issued and outstanding.

The underwriter’s over-allotment option, which was exercised in full by the underwriter on December 11, 2020, included 5,250,000 SAILSM securities consisting of 5,250,000 shares of Class A common stock and 1,312,500 warrants which were issued to cover over-allotments.

Preferred Stock

The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of March 31, 2021 and December 31, 2020, there were no shares of preferred stock issued or outstanding.

Warrants

Upon the closing of the Initial Public Offering, the Company simultaneously issued the Private Placement Warrants. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants are redeemable by the Company and exercisable by the holders on the same basis as the warrants included in the SAILSM securities sold in the Initial Public Offering. The Sponsor, or its permitted transferees, have the option to exercise the Private Placement Warrants on a cashless basis. The Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of the Business Combination. If the Company does not complete the Business Combination within 24 months from the closing of the offering (or 27-months, as applicable), the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Company’s public shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.

NOTE 7—REDEEMABLE WARRANT LIABILITY

Pursuant to the Initial Public Offering, the Company sold 40,250,000 SAILSM securities (including the full exercise of the underwriter’s over-allotment option) at a price of $10.00 per SAILSM security. Each SAILSM security consists of one share of Class A common stock of the Company at $0.0001 par value and one-fourth of one Redeemable Warrant (or 10,062,500 Redeemable Warrants in the aggregate). See “Note 3—Initial Public Offering” for additional details on the Redeemable Warrants.

The Company determined that the Redeemable Warrants qualified as freestanding financial instruments that are bifurcated from the Class A common stock and classified asdividends paid/payable to the holders of Class A common stock. Therefore, the shares do not represent an obligation or a separate liability pursuantconditional obligation to issue a variable number of shares with a monetary value based on any of the criteria in ASC 815, “Derivatives480, 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 Hedging” (ASC 815). According to ASC 815, financial instruments classified as liabilities are(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.
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Altus Power, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)

The 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 70% and risk-free interest rate of 4.31% 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 three months ended March 31, 2024For the three months ended March 31, 2023
 Shares$Shares$
Beginning balance996,188 $60,502 1,207,500 $66,145 
Alignment Shares converted(199,238)(10)(201,250)(11)
Fair value remeasurement— (26,077)— (17,018)
Ending balance796,950 $34,415 1,006,250 $49,116 

Interest Rate Swaps
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 March 31, 20212024 and December 31, 2020,2023, the notional amounts were $118.8 million and $112.8 million, respectively. For the three months ended March 31, 2024 and 2023, the change in fair value of interest rate swaps resulted in a gain of $2.1 million and a gain of $2.7 million, respectively, which was 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, 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 condensed 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 months ended March 31, 2024, the adjustment to Interest expense, net was $0.4 million. 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 months ended March 31, 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
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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)
observable, the overall fair value measurement of the contingent consideration is classified as Level 3. As of March 31, 2024 and December 31, 2023, the fair value of the Redeemable Warrantscontingent consideration was $9,257,500$2.3 million and $18,716,250,$2.6 million, respectively, and was included in Other current liabilities in the condensed consolidated balance sheets. For the three months ended March 31, 2024, the Company recorded a gain on remeasurement of contingent liability of $0.3 million.
True Green II Acquisition
In connection with the remeasurementacquisition 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 March 31, 2024 and December 31, 2023, the fair value of the contingent consideration was $4.9 million and $4.7 million, respectively, and was included in Other current liabilities in the condensed consolidated balance sheets. For the three months ended March 31, 2024, the Company recorded $0.2 million loss on fair value remeasurement of 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.
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 liability for the contingent consideration associated with power rates is included in Other long-term liabilities in the condensed consolidated balance sheets at the estimated fair value of $3.1 million as of March 31, 2024 and December 31, 2023. For the three months ended March 31, 2024 and 2023, the Company recorded a loss on fair value remeasurement of contingent consideration associated with power rates of zero and $0.1 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. As of December 31, 2023, the 36-month measurement period for the contingent liability associated with market power rates has ended and the contingency was resolved with $3.1 million payable in 2024.
8.Equity
As of March 31, 2024, the Company had 988,591,250 authorized and 159,874,981 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, respectively. 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 March 31, 2024, and December 31, 2023, no common stock dividends have been declared.
As of March 31, 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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Altus Power, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)
9.Redeemable WarrantsNoncontrolling Interests
The changes in the components of $9,458,750redeemable noncontrolling interests are presented in the table below:
 For the three months ended March 31,
 20242023
Redeemable noncontrolling interest, beginning balance$26,044 $18,133 
Cash distributions(571)(576)
Accrued distributions(206)— 
Redemption of redeemable noncontrolling interests— (2,175)
Assumed redeemable noncontrolling interest through business combination— 8,100 
Net (loss) income attributable to redeemable noncontrolling interest(878)861 
Redeemable noncontrolling interest, ending balance$24,389 $24,343 
10.Leases
The following table presents the components of operating lease cost for the three months ended March 31, 2021 in the Change in fair value2024, and 2023:
For the three months ended March 31,
20242023
Operating lease expense$4,069 $2,391 
Variable lease expense418 357 
Total lease expense$4,487 $2,748 

The following table presents supplemental information related to our operating leases:
For the three months ended March 31,
20242023
Operating cash flows from operating leases$4,064 $2,238 
Operating lease assets obtained in exchange for new operating lease liabilities$11,891 $32,722 
Weighted average remaining lease term, years23.6 years22.0 years
Weighted average discount rate5.75%5.15%

Maturities of redeemable warrant liability line in the Statement of Operations.

As the Redeemable Warrants, effective February 1, 2021, are separately traded on NYSE under the symbol “CBAH WS,”operating lease liabilities as of March 31, 2021,2024, are as follows:


2024$12,143 
202515,829 
202615,952 
202716,048 
202816,100 
Thereafter294,720 
Total$370,792 
Less: Present value discount(175,363)
Lease liability$195,429 

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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)
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 fair valueordinary course of business the Redeemable Warrants was determined basedCompany 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 quoted trading priceCompany’s financial position or results of operations.
Performance Guarantee Obligations
The Company guarantees certain specified minimum solar energy production output under the Company’s power purchase agreements ("PPAs"), generally over a term of 10, 15 or 25 years. The solar energy systems are monitored to ensure these instruments.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 March 31, 2024, and December 31, 2020,2023, the fair value of these instruments was estimated using Monte Carlo simulation. The key assumptions in the option pricing model utilized are assumptions related to expected underlying share-price volatility, expected term of the warrants, the risk-free interest rateguaranteed minimum solar energy production has been met and the Company’s dividend yield. The expected volatility asCompany has recorded no performance guarantee obligations.
Purchase Commitments
In the ordinary course of the December 15, 2020 was derived from observable public warrant pricing on comparable ‘blank-check’ companies that went public in 2019 and 2020. The risk-free interest rate is based on the interpolated U.S. Constant Maturity Treasury yield. The expected term of the warrants is assumed to be one year until the closing of a Business Combination, and an estimated five year holding period, based on typical equity investor holding periods. The dividend rate is based on the historical rate, whichbusiness, the Company anticipatesmakes various commitments to remain at zero.

NOTE 8—STOCK-BASED COMPENSATION

The Company sold an aggregatepurchase goods and services from specific suppliers. As of 2,300,000 Alignment Shares to the Sponsor on November 6, 2020. On November 27, 2020, the Sponsor sold 201,250 Alignment Shares to certain of the Company’s directors, or their respective designees,March 31, 2024, and an officer ofDecember 31, 2023, the Company had zero outstanding non-cancellable commitments to purchase solar modules.

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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)

12.Related Party Transactions
There was $0.1 million and forfeited 287,500 Alignment Shares$0.1 million due to an adjustment pursuant to the Initial Public Offering. See “Note 3—Initial Public Offering—Alignment Shares” for additional details. As of December 31, 2020related parties, as discussed below, and March 31, 2021, 2,012,500 Alignment Shares were issued and outstanding.

On December 10, 2020, the Company sold an aggregate of 7,366,667 Private Placement Warrants at a price of $1.50 per warrant to the Sponsor in a private placement that occurred simultaneously with the completion of the Initial Public Offering. See “Note 3—Initial Public Offering—Private Placement Warrants” for additional details.

The Company determined that the incremental fair value over the price paid for the Alignment Shares and Private Placement Warrants would qualify as stock-based compensation within scope of ASC 718, “Compensation—Stock Compensation” (ASC 718) as a result of the services the Sponsor and directors and officers are providing to the Company through the date of a Business Combination.

Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date and recognized over the requisite service period. The Alignment Shares and Private Placement Warrants were granted subject to a performance condition (i.e., the occurrence of a Business Combination ), as well as various market conditions (i.e., stock price targets after consummation of the Business Combination). The various market conditions are considered in determining the grant date fair value of these instruments using Monte Carlo simulation. Compensation expenseno amounts due from related to the Alignment Shares and Private Placement Warrants is recognized only when the satisfaction of the performance condition is probable. As March 31, 2020, the Company determined that a Business Combination is not considered probable, and, therefore, no stock-based compensation expense has been recognized through March 31, 2021. Unrecognized stock-based compensation expense in excess of $250 million would be recognized at the date a Business Combination is considered probable (i.e., upon consummation).

NOTE 9—FAIR VALUE MEASUREMENTS

The following table presents information about the Company’s assets and liabilities that are measured on a recurring basisparties as of March 31, 20212024, and indicatesDecember 31, 2023, respectively. Additionally, in the fair value hierarchynormal course of the valuation techniques thatbusiness, the Company utilizedconducts transactions with affiliates, including:

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 March 31, 2024 and 2023, the Company paid $0.2 million and $0.7 million, respectively, of loan issuance costs to determineBlackstone.
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 fair value.

Description

  Quoted Prices in
Active Markets
(Level 1)		   Significant Other
Observable Inputs
(Level 2)		   Significant Other
Unobservable Inputs
(Level 3)		 

Money market fund held by Trust Account

  $402,505,042    —      —   

Redeemable warrant liability

   9,257,500    —      —   
  

 

 

   

 

 

   

 

 

 

Total

  $411,762,542   $ —     $—   

Qualified Referral via an executed Development Agreement, would receive a development fee of between $0.015/watt to $0.030/watt depending on the business segment and teams of such CBRE employees. For the three months ended March 31, 2024 and 2023, the Company did not incur any costs associated with the Commercial Collaboration Agreement. As of March 31, 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 the three months ended March 31, 2024 and 2023, the Company incurred $0.2 million and $0.1 million, respectively, for development services provided under the PSA. As of March 31, 2024, and December 31, 2023, there was $0.1 million due to CBRE for development services provided under the MSA.
Lease Agreements with Link Logistics and CBRE
The following table presents information aboutCompany 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 March 31, 2024, and December 31, 2023, the Company’sCompany recognized operating lease assets and operating lease liabilities that are measured onof $27.1 million and $24.3 million, respectively, in the condensed consolidated balance sheet related to these leases, which have a recurring basis asweighted average remaining lease term of December29 years. During the three months ended March 31, 20202024 and indicates the fair value hierarchy2023, payments made under these leases were $0.7 million and zero, respectively.
30
Table of the valuation techniques that the Company utilized to determine such fair value.

Description

  Quoted Prices in
Active Markets
(Level 1)		   Significant Other
Observable Inputs
(Level 2)		   Significant Other
Unobservable Inputs
(Level 3)		 

Money market fund held by Trust Account

  $402,500,000    —      —   

Redeemable warrant liability

   —      —      18,716,250 
  

 

 

   

 

 

   

 

 

 

Total

  $402,500,000   $ —     $18,716,250 

NOTE 10—INCOME TAXES

Contents

Altus Power, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(Dollar amounts in thousands, except per share data, unless otherwise noted)

13.Earnings per Share
The Company’s provision for income taxescalculation of basic and diluted earnings per share for the three months ended March 31, 20212024 and 2023 was $0.0 million. as follows (in thousands, except share and per share amounts):
 For the three months ended March 31,
 20242023
Net income attributable to Altus Power, Inc.7,509 5,617 
Income attributable to participating securities(1)
(38)(36)
Net income attributable to common stockholders - basic and diluted7,471 5,581 
Class A Common Stock
Weighted average shares of common stock outstanding - basic(2)
159,025,740 158,621,674 
Dilutive restricted stock— 258,789 
Dilutive RSUs3,216,408 2,120,928 
Dilutive conversion of Alignment Shares— 2,011 
Weighted average shares of common stock outstanding - diluted162,242,148 161,003,402 
Net income attributable to common stockholders per share - basic$0.05 $0.04 
Net income attributable to common stockholders per share - diluted$0.05 $0.03 

(1) Represents the income attributable to 796,950 and 1,006,250 Alignment Shares outstanding as of March 31, 2024 and 2023, respectively.

(2) For the three months ended March 31, 2023, the calculation of basic weighted average shares of common stock outstanding excludes 271,259 shares of the Company's Class A common stock provided to holders of the common stock of the Company prior to the Merger, including shares that were subject to vesting conditions.
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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)
14.Stock-Based Compensation
The Company’s effective tax rateCompany recognized $4.3 million and $2.9 million of stock-based compensation expense for the three months ended March 31, 2021 was 0% as the Company continues to record full valuation allowance for all of its deferred tax assets.

2024, and 2023, respectively. As of March 31, 2024, the Company had $46.9 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 March 31, 2024, and December 31, 2020,2023, 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.
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, and $30.51, respectively), which vesting is eligible until the fifth anniversary of grant date.
On March 28, 2024, these 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, 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 months ended March 31, 2024, the Company granted under the Incentive Plan an additional 2,973,127RSUs, that are subject to time-based vesting as described above, with a weighted average grant date fair value per share of $4.89. 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 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
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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)
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
<$840 %
$8-10.9980 %
$11-11.50100 %
$11.51-12.99110 %
$13+120 %

GW Plan PSUs have a grant date fair value per share of $3.95.

The fair value of awards granted and modified during the period was estimated as of the respective grant dates using a Monte Carlo model utilizing a distribution of potential outcomes based on expected volatility of 66% - 69%, a risk-free interest rate of 4.4%, and an expected term of approximately 1-3 years.
As of March 31, 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 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 March 31, 2024, and 2023, the Company granted 4,270,924 and 3,011,148 RSUs, respectively, and recognized $4.3 million and $2.9 million, respectively, of stock-based compensation expenses in relation to the Incentive Plan. For the three months ended March 31, 2024, and 2023, 96,144 and 5,700 RSUs were forfeited, respectively.
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 March 31, 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 three months ended March 31, 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 March 31, 2024, and 2023, the Company had income tax expense of $4.9 million and income tax expense of $0.9 million, respectively. For the three months ended March 31, 2024, the effective tax rate differs from the U.S. statutory rate primarily due to effects of non-deductible compensation, noncontrolling interests, redeemable noncontrolling interests, fair value adjustments for Alignment Shares, as well as state and local income taxes. For the three months ended March 31, 2023, the effective tax rate differs from the U.S. statutory rate primarily due to effects of non-deductible compensation, noncontrolling interests, redeemable noncontrolling interests, fair value adjustments for Alignment Shares, as well as state and local income taxes.
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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 March 31, 2024, through May 9, 2024, which is the date the unaudited condensed consolidated financial statements were available to be issued. Other than the subsequent event disclosed below, there are no subsequent events requiring recording or disclosure in the condensed consolidated financial statements.
Resignation of Lars Norell as Co-Chief Executive Officer and Director

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) subject to his timely election and continued eligibility for COBRA continuation coverage, 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, paid in a lump sum on the eighth day after the execution of the Agreement.

Additionally, the 4,283,452 unvested RSUs and PSUs granted under the Omnibus Plan and held by Mr. Norell will be forfeited. This will result in the reversal of approximately $8.7 million of previously recognized stock-based compensation expense which will be recognized during the three months ended June 30, 2024.

******
34

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” 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 March 31, 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 981 megawatts (“MW”) of solar PV. We have long-term power purchase agreements ("PPAs") with over 450 enterprise entities and contracts with over 24,000 residential customers which are serviced by over 290 MW of community solar projects currently in operation. Our community solar projects are currently serving customers in 8 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 550,000 tons of CO2 emissions per annum.

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Key Factors Affecting Our Performance
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 March 31, 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 three months ended March 31, 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. As described in our Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 29, 2024, we announced the resignation of Lars R. Norell as our Co-Chief Executive Officer and the appointment of Gregg Felton as our sole Chief Executive Officer.
•CBRE Partnership: Our partnership with CBRE, the largest global real estate services company, provides us with a clear path to creating new customer relationships. 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. While we expect seasonal variability to occur, the geographic diversity in our assets helps to mitigate our aggregate seasonal variability.
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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.
Pipeline
Our pipeline, comprised of a mix of operating assets and new build assets, is being evaluated by our team each quarter. As of March 31, 2024, this pipeline includes 14 MW of assets in construction and pre-construction in Maryland with CBRE Investment Management and additional potential new build assets in Illinois which we are in discussions with various CBRE customers about. Additionally, we are evaluating 100 MW to 150 MW of operating asset acquisition opportunities.
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 in the period.
As of March 31,Change
20242023MW%
Megawatts installed981 678 303 45 %
Cumulative megawatts installed increased from 678 MW as of March 31, 2023, to 981 MW as of March 31, 2024, a 45% increase.

As of March 31, 2024As of December 31, 2023Change
MW%
Megawatts installed981 896 85 9 %

Cumulative megawatts installed increased from 896 MW as December 31, 2023, to 981 MW as of March 31, 2024, a 9% increase.

The following table provides an overview of megawatts installed by state as of March 31, 2024:

StateMegawatts installedShare, percentage
New York20520.9%
New Jersey17718.0%
Massachusetts15015.3%
California12012.2%
North Carolina676.8%
Minnesota606.1%
South Carolina424.2%
Hawaii343.5%
Nevada212.2%
All other10510.8%
Total981100.0%

Megawatt Hours Generated
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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.
Three months ended March 31,Change
20242023MWh%
Megawatt hours generated210,000 137,000 73,000 53 %

Megawatt hours generated increased from 137,000 MWh for the three months ended March 31, 2023, to 210,000 MWh for the three months ended March 31, 2024, a 53% 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, 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, net, 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 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.

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.

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Three Months Ended March 31,
20242023
(in thousands)
Reconciliation of Net income to Adjusted EBITDA:
Net income$4,055 $3,845 
Income tax expense4,896 888 
Interest expense, net16,193 12,446 
Depreciation, amortization and accretion expense16,130 11,376 
Stock-based compensation4,304 2,872 
Acquisition and entity formation costs1,066 1,491 
(Gain) loss on fair value remeasurement of contingent consideration, net(79)50 
Gain on disposal of property, plant and equipment(88)— 
Change in fair value of Alignment Shares liability(26,077)(17,018)
Other (income) expense, net(683)90 
Adjusted EBITDA$19,717 $16,040 
Three Months Ended March 31,
20242023
(in thousands)
Reconciliation of Adjusted EBITDA margin:
Adjusted EBITDA$19,717 $16,040 
Operating revenues, net40,659 29,378 
Adjusted EBITDA margin48 %55 %

Components of Results of Operations
The Company derives its operating revenues principally from power purchase agreements, net metering credit agreements, solar renewable energy credits, 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 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 concludeda right to invoice which is equal to the volume of energy delivered multiplied by the applicable contract rate. As of March 31, 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 net metering credit agreements (“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 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 March 31, 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
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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.
In 2023, performance based incentives are primarily represented by cash awards granted to the Company by the New York State Energy Research & Development Authority ("NYSERDA") 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. 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
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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. Stock-based compensation expense is recognized for awards granted under the Legacy Incentive Plans and Omnibus 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 March 31, 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 expense and income, 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 the Companya portion of our deferred state tax assets will not realizebe realized. We evaluate the benefitrecoverability of itsour 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.
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Results of Operations – Three Months Ended March 31, 2024, Compared to Three Months Ended March 31, 2023 (Unaudited)

Three Months Ended March 31,Change
20242023$%
(in thousands)
Operating revenues, net$40,659 $29,378 $11,281 38.4 %
Operating expenses
Cost of operations (exclusive of depreciation and amortization shown separately below)10,920 5,976 4,944 82.7 %
General and administrative10,022 7,362 2,660 36.1 %
Depreciation, amortization and accretion expense16,130 11,376 4,754 41.8 %
Acquisition and entity formation costs1,066 1,491 (425)(28.5)%
(Gain) loss on fair value remeasurement of contingent consideration, net(79)50 (129)(258.0)%
Gain on disposal of property, plant and equipment(88)— (88)100.0 %
Stock-based compensation4,304 2,872 1,432 49.9 %
Total operating expenses$42,275 $29,127 $13,148 45.1 %
Operating (loss) income(1,616)251 (1,867)*
Other (income) expense
Change in fair value of Alignment Shares liability(26,077)(17,018)(9,059)53.2 %
Other (income) expense, net(683)90 (773)*
Interest expense, net16,193 12,446 3,747 30.1 %
Total other income, net$(10,567)$(4,482)$(6,085)135.8 %
Income before income tax expense$8,951 $4,733 $4,218 89.1 %
Income tax expense(4,896)(888)(4,008)*
Net income$4,055 $3,845 $210 5.5 %
Net loss attributable to noncontrolling interests and redeemable noncontrolling interests(3,454)(1,772)(1,682)94.9 %
Net income attributable to Altus Power, Inc.$7,509 $5,617 $1,892 33.7 %
Net income per share attributable to common stockholders
Basic$0.05 $0.04 $0.01 25.0 %
Diluted$0.05 $0.03 $0.02 66.7 %
Weighted average shares used to compute net income per share attributable to common stockholders
Basic159,025,740 158,621,674 404,066 0.3 %
Diluted162,242,148 161,003,402 1,238,746 0.8 %

* Percentage is not meaningful


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Operating revenues, net
Three Months Ended March 31,Change
20242023Change%
(in thousands)
Power sales under PPAs$12,625 $8,986 $3,639 40.5 %
Power sales under NMCAs9,977 6,836 3,141 45.9 %
Power sales on wholesale markets295 356 (61)(17.1)%
Total revenue from power sales22,897 16,178 6,719 41.5 %
Solar renewable energy credit revenue9,936 10,067 (131)(1.3)%
Rental income2,085 626 1,459 233.1 %
Performance based incentives4,807 2,098 2,709 129.1 %
Revenue recognized on contract liabilities914 409 505 123.5 %
Other20 — 20 100.0 %
Total operating revenues, net$40,659 $29,378 $11,281 38.4 %
Operating revenues, net increased by $11.3 million, or 38.4%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to the increased number of operating solar energy facilities in our portfolio.
Cost of operations
Three Months Ended March 31,Change
20242023$%
(in thousands)
Cost of operations (exclusive of depreciation and amortization shown separately below)$10,920 $5,976 $4,944 82.7 %
Cost of operations increased by $4.9 million, or 82.7%, during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, primarily due to the increased number of operating solar energy facilities in our portfolio.
General and administrative
Three Months Ended March 31,Change
20242023$%
(in thousands)
General and administrative$10,022 $7,362 $2,660 36.1 %
General and administrative expense increased by $2.7 million, or 36.1%, during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, primarily due to increase in general personnel costs resulting from increased headcount in multiple job functions.
Depreciation, amortization and accretion expense
Three Months Ended March 31,Change
20242023$%
(in thousands)
Depreciation, amortization and accretion expense$16,130 $11,376 $4,754 41.8 %
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Depreciation, amortization and accretion expense increased by $4.8 million, or 41.8%, during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, primarily due to the increased number of operating solar energy facilities in our portfolio.
Acquisition and entity formation costs
Three Months Ended March 31,Change
20242023$%
(in thousands)
Acquisition and entity formation costs$1,066 $1,491 $(425)(28.5)%
Acquisition and entity formation costs decreased by 28.5% during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, primarily due to costs associated with net operating lossesthe True Green II Acquisition (as defined in Note 7, "Fair Value Measurements" to our condensed consolidated financial statements included elsewhere in this Report) completed on February 15, 2023.
(Gain) loss on fair value remeasurement of contingent consideration
Three Months Ended March 31,Change
20242023$%
(in thousands)
(Gain) loss on fair value remeasurement of contingent consideration$(79)$50 $(129)(258.0)%
Gain or loss on fair value remeasurement of contingent consideration is primarily associated with the True Green II Acquisition, the Caldera Acquisition, and capitalized start-up costs. Start-up costs cannot be amortized untilthe Solar Acquisition (as defined in our condensed consolidated financial statements included elsewhere in this Report). A gain or loss on fair value remeasurement was recorded for the three months ended March 31, 2024 and 2023, due to changes in the values of significant assumptions used in the measurement of fair value.
Gain on disposal of property, plant and equipment
Three Months Ended March 31,Change
20242023$%
(in thousands)
Gain on disposal of property, plant and equipment$(88)$— $(88)100.0 %
Gain on disposal of property, plant and equipment is associated with the disposal of a solar facility that occurred during the three months ended March 31, 2024. The gain was calculated as the difference excess of consideration received over the carrying value of the disposed asset.
Stock-based compensation
Three Months Ended March 31,Change
20242023$%
(in thousands)
Stock-based compensation$4,304 $2,872 $1,432 49.9 %
Stock-based compensation expense increased by $1.4 million, or 49.9%, during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, primarily due to restricted stock units granted under the Omnibus Incentive Plan (as defined in Note 14, "Stock-Based Compensation," to our condensed consolidated financial statements included elsewhere in this Report).
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Change in fair value of Alignment Shares liability
Three Months Ended March 31,Change
20242023$%
(in thousands)
Change in fair value of Alignment Shares liability$(26,077)$(17,018)$(9,059)53.2 %
In connection with the Merger, the Company starts businessassumed a liability related to Alignment Shares, which was remeasured as of March 31, 2024 and 2023, and the resulting gain was included in the condensed consolidated statement of operations. The gain was primarily driven by the decrease in the Company's stock price during each period.
Other (income) expense, net
Three Months Ended March 31,Change
20242023$%
(in thousands)
Other (income) expense, net$(683)$90 $(773)*
* Percentage is not meaningful
Other income was $0.7 million during the three months ended March 31, 2024, as compared to other expense of $0.1 million during the three months ended March 31, 2023, primarily due to interest income during three months ended March 31, 2024, as well as miscellaneous other income and expense items during each period.
Interest expense, net
Three Months Ended March 31,Change
20242023$%
(in thousands)
Interest expense, net$16,193 $12,446 $3,747 30.1 %
Interest expense increased by $3.7 million, or 30.1%, during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, primarily due to the increase of outstanding debt held by the Company. The increase was partially offset by $2.1 million of unrealized gain on interest rate swaps during the three months ended March 31, 2024.
Income tax expense
Three Months Ended March 31,Change
20242023$%
(in thousands)
Income tax expense$(4,896)$(888)$(4,008)*
* Percentage is not meaningful
For the three months ended March 31, 2024, the Company recorded an income tax expense of $4.9 million in relation to pretax income of $9.0 million, which resulted in an effective income tax rate of 54.7%. 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.
For the three months ended March 31, 2023, the Company recorded an income tax expense of $0.9 million in relation to a pretax income of $4.7 million, which resulted in an effective income tax rate of 18.8%. The effective income tax rate was primarily impacted by fair value remeasurement of Alignment Shares, nondeductible compensation, 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
45

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 full valuation allowance has been established,permanent tax difference which impacts the Company’s estimated annual effective tax rate.
Net loss attributable to redeemable noncontrolling interests and noncontrolling interests
Three Months Ended March 31,Change
20242023$%
(in thousands)
Net loss attributable to noncontrolling interests and redeemable noncontrolling interests$(3,454)$(1,772)$(1,682)94.9 %

Net loss attributable to redeemable noncontrolling interests and noncontrolling interests increased by $1.7 million, or 94.9%, during the three months ended March 31, 2024, as future events such as business combinations cannot be considered when assessingcompared to the realizabilitythree months ended March 31, 2023, primarily due to changes in funding provided by tax equity investors and acquisitions of deferred tax assets. Accordingly, the net deferredequity partnerships with non-controlling interests. Overall loss was partially offset by loss allocations due to reduced recapture periods for investment tax assets have been fully reserved.

credits.


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Liquidity and Capital Resources
As of March 31, 20212024, the Company had total cash and restricted cash of $203.5 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 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 March 31, 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 March 31, 2024 and December 31, 2020,2023, the Company had outstanding letters of credit and surety bonds totaling $58.2 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
47

three months ended March 31, 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.
As of March 31, 2024, the outstanding principal balance of the APAF Term Loan was $471.5 million less unamortized debt discount and loan issuance costs totaling $6.5 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 March 31, 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 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 March 31, 2024, the outstanding principal balance of the APAF II Term Loan was $111.8 million, less unamortized debt issuance costs of $2.0 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 March 31, 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 IIIBorrower”) 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 APAF III 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 APAF III 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
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Construction to Term Loan Facility (as defined below), and to provide long-term financing for new solar projects. The principal balance borrowed under the amendments was offset by $0.3 million and $0.2 million of issuance costs, respectively, and $1.5 million and $1.1 million of issuance discount, respectively, which have been deferred and will be recognized as interest expense through June 30, 2033.
On December 20, 2023, the Company amended the APAF III Term Loan to add $163.0 million of additional borrowings, the proceeds of which were used to fund the Caldera Acquisition. The amendment increased the weighted average fixed interest rate for all borrowings under the APAF III Term Loan to 6.03%, and increased the rate of amortization for the new borrowings under the amendment to 3.25% per annum until June 30, 2033. The principal balance borrowed under the amendment was offset by $1.3 million of issuance costs and $0.8 million of issuance discount, which have been deferred and will be recognized as interest expense through June 30, 2033.
As of March 31, 2024, the outstanding principal balance of the APAF III Term Loan was $423.6 million, less unamortized debt issuance costs and discount of $14.0 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 March 31, 2024, and December 31, 2023, the Company was in compliance with all covenants.
APAF IV Term Loan
On March 26, 2024, the Company, through its subsidiaries, APA Finance IV, LLC (the “APAF IVBorrower”), 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 March 31, 2024, the outstanding principal balance of the APAF IV Term Loan was $101.0 million, less unamortized debt issuance costs and discount of $1.6 million. As of March 31, 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 “APAGHBorrower”), 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 recordedto 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 tax liability for uncertain tax positions.outstanding balance at an initial fixed rate equal to 8.50%, subject to adjustments. The Company’s continuing practicematurity 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 recognize potential accrued interest and/or penaltiesfund 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 incomethe APAGH Term Loan, which have been deferred and will be recognized as interest expense through December 27, 2029.

As of March 31, 2024, the outstanding principal balance of the APAGH Term Loan was $100.0 million, less unamortized debt issuance costs of $3.8 million. As of December 31, 2023, the outstanding principal balance of the APAGH Term Loan was
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$100.0 million, less unamortized debt issuance costs and discount of $4.0 million. As of March 31, 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 March 31, 2024, and December 31, 2023, there was $65.0 million outstanding under the APAG Revolver. As of March 31, 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 IIBorrower”) 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 mattersequity 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 borrowings occur, 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. On January 19, 2024, the Company borrowed $31.9 million under the APACF II Facility, which was offset by $0.6 million of debt issuance costs, 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.

As of March 31, 2024, the outstanding principal balance of the APACF II Facility was $31.9 million, less unamortized debt issuance costs of $0.9 million. As of December 31, 2023, no amounts were outstanding under the APACF II Facility. As of March 31, 2024, the Company was in compliance with all covenants under the APACF II Facility.
Other Term Loans - Construction 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 March 31, 2024, the outstanding principal balance of the term loan is $11.0 million, less unamortized debt discount of $1.7 million. As of December 31, 2023, the outstanding principal balance of the term loan is $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 March 31, 2024, and December 31, 2023, the Company was in compliance with all covenants.
Financing Obligations Recognized in Failed Sale Leaseback Transactions
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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 income tax expense. the condensed consolidated balance sheets.
As of March 31, 2024, the Company's recorded financing obligations were $41.9 million, net of $0.9 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 of $0.3 million and $0.2 million were made under financing obligations for the three months ended March 31, 2024, and 2023, respectively. Interest expense, inclusive of the amortization of deferred transaction costs for the three months ended March 31, 2024 and 2023, was $0.4 million.
Cash Flows
For the Three Months Ended March 31, 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:
Three Months Ended March 31,
20242023
(in thousands)
Net cash provided by (used for):
Operating activities$4,525 $14,225 
Investing activities(141,924)(319,435)
Financing activities121,985 189,993 
Net decrease in cash and restricted cash$(15,414)$(115,217)
Operating Activities
During the three months ended March 31, 2021,2024, cash provided by operating activities of $4.5 million consisted primarily of net income of $4.1 million adjusted for net non-cash income of $2.7 million and a net increase in liabilities of $8.0 million, partially offset by a net increase in assets of $4.8 million.
During the Company didthree months ended March 31, 2023, cash provided by operating activities of $14.2 million consisted primarily of net income of $3.8 million adjusted for net non-cash income of $0.9 million, a net increase in assets of $4.7 million, and a net increase in liabilities of $6.6 million.
Investing Activities
During the three months ended March 31, 2024, net cash used in investing activities was $141.9 million, consisting of $18.5 million of capital expenditures, $119.6 million of payments to acquire renewable energy businesses, net of cash and restricted cash acquired, and $4.0 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 three months ended March 31, 2023, net cash used in investing activities was $319.4 million, consisting of $24.8 million of capital expenditures, $288.2 million of payments to acquire renewable energy businesses, net of cash and restricted cash acquired, and $6.4 million of payments to acquire renewable energy facilities from third parties, net of cash and restricted cash acquired.
Financing Activities
During the three months ended March 31, 2024, net cash provided by financing activities was $122.0 million, consisting of $131.9 million of proceeds from issuance of long-term debt. Net cash provided by financing activities was partially off-set
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by $7.2 million to repay long-term debt, $1.2 million paid for debt issuance costs, and $1.5 million of distributions to noncontrolling interests.
During the three months ended March 31, 2023, net cash provided by financing activities was $190.0 million, consisting of $204.7 million of proceeds from issuance of long-term debt and $1.7 million of contributions from noncontrolling interests. Net cash provided by financing activities was partially offset by $7.7 million to repay long-term debt, $2.0 million paid for debt issuance costs, $4.5 million of deferred purchase price payable, $1.1 million of redemption of redeemable noncontrolling interests, and $1.1 million of distributions to noncontrolling interests.
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 accrue any interestreadily apparent from other sources. Some of these accounting estimates and penalties.

NOTE 11—SUBSEQUENT EVENTS

Subsequent Events

Management has evaluated subsequentassumptions are particularly sensitive because of their significance to our condensed consolidated financial statements and because of the possibility that future events and transactions that occurred after the balance sheet date up to May  17, 2021, the dateaffecting them may differ markedly from what had been assumed when the financial statements were issued.

Item 2. Management’s Discussion and Analysisprepared. As of Financial Condition and Results of Operations.

The following discussion and analysis ofMarch 31, 2024, there have been no significant changes to the Company’s financial condition and results of operations should be readaccounting estimates that we have deemed critical. Our critical accounting estimates are more fully described in conjunction with our financial statements and the notes related thereto which are included in Part I, Item 1. Financial Statements of this Quarterly2023 Annual Report on Form 10-Q. Certain information contained10-K.

Other than the policies noted in Note 2, “Significant Accounting Policies,” in the discussionCompany’s notes to the condensed consolidated financial statements in this Report, there have been no material changes to its critical accounting policies and analysis set forth below includes forward-looking statements. Our actual results may differ materially fromestimates as compared to those anticipateddisclosed in these forward-lookingits audited consolidated financial statements as a result of many factors, including those set forth under “Special Note Regarding Forward-Looking Statements,” “Part I, Item 1A. Risk Factors” and elsewhere in our 2023 Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2021 (our “2020 Annual Report”).

Overview

We are a blank check company incorporated on October 13, 2020 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or assets, which we refer to throughout this Quarterly Report on Form 10-Q as our business combination. We completed our initial public offering (“Initial Public Offering”) on December 15, 2020. We are an “emerging growth company,” as defined in10-K.

Emerging Growth Company Status
In April 2012, the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”) and, as such, we are subject to allor the JOBS Act, was enacted. Section 107 of the risks associated with early stage and emergingJOBS Act provides that an “emerging growth companies.

Since completing our Initial Public Offering, we have reviewed, and continue to review, a number of opportunities to enter into a business combination withcompany,” or an operating business, including entering into discussions with potential target businesses, but we are not able to determine at this time whether we will complete a business combination with anyEGC, can take advantage of the target businesses that we have reviewed or had discussions with or with any other target business. Although we may pursue an acquisitionextended transition period provided in any industry or geography, we intend to capitalize on the ability of our management team and the broader CBRE platform to identify, acquire and operate a business that may provide opportunities for attractive risk-adjusted returns. We intend to effectuate our business combination using cash from the proceeds of our Initial Public Offering and the saleSection 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 placement warrants, our common stock, debt,companies. Altus Power has elected to use the extended transition period for new or a combination of cash, stock and debt.

Results of Operations

During the three months ended March 31, 2021, we reported net income of $8,505,557. As of March 31, 2021, we had neither engaged in any operations nor generated any revenues to date. We will not generate any operating revenues until after completion of our business combination, at the earliest. The net incomerevised accounting standards during the three months ended March 31, 2021 is primarily driven by the decreaseperiod in the fair value of the Redeemable Warrant (as defined below) liability from December 31, 2020 to March 31, 2021. Since completing our Initial Public Offering,which we generate non-operating income on cash and funds held in the trust account in the form of interest income on cash and funds invested in specified U.S. government treasury obligations or in specified money market funds which invest only in direct U.S. government treasury obligations. Other than the decrease in the fair value of the Redeemable Warrant liability, there has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our last audited financial statements. remain an EGC.


We expect to incur increased expensesremain 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 result“large accelerated filer,” with at least $700 million of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We cannot assure you that our plans to complete our business combination will be successful.

Duringequity securities held by non-affiliates; (3) the three months ended March 31, 2021, our activities mainly consisted of identifying and evaluating prospective acquisition candidates for a business combination. We believe thatdate on which we have sufficient funds available to complete our efforts to effect a business combination with an operating business byissued more than $1.0 billion in non-convertible debt securities during the prior three-year period; and (4) December 15, 2022 (or March 15, 2023 if applicable). However, if our estimates31, 2025, the last day of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a business combination are less thanfiscal year ending after the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our business combination.

Liquidity and Capital Resources

On October 13, 2020, CBRE Acquisition Sponsor, LLC (our “Sponsor”) purchased 100 shares of undesignated common stock for an aggregate purchase price of $100, or $1.00 per share. On November 6, 2020, our Sponsor purchased an aggregate of 2,300,000 sharesfifth anniversary of our Class B common stock for an aggregate purchase priceinitial public offering.

Recent Accounting Pronouncements
A description of $25,000, or approximately $0.01 per share. On November 27, 2020, 287,500 of such shares were forfeited by the holder thereof. Prior to the initial investment in the Company of $25,000 by our Sponsor, the Company had no assets, tangible or intangible.

On October 21, 2020, our Sponsor agreed to loan us up to $300,000 by the issuance of an unsecured promissory note to be used for a portion of the expenses related to the organization of our company and our Initial Public Offering. As of December 15, 2020 the outstanding balance on the loan was $215,316. This loan was non-interest bearing, unsecured and due at the earlier of June 30, 2021, and the closing of our Initial Public Offering. The loan was repaid in full upon the consummation of our Initial Public Offering out of the $1,500,000 of offering proceeds that had been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account (as defined below).

On December 15, 2020 we consummated our Initial Public Offering of 40,250,000 SAILSM, including the issuance of 5,250,000 SAILSM securities as a result of the underwriter’s exercise of its over-allotment option. Each SAILSM security consists of one share of Class A common stock, $0.0001 par value per share (the “Class A common stock”), and one-fourth of one Redeemable Warrant (the “Redeemable Warrants”), each whole Redeemable Warrant entitling the holder thereof to purchase one share of Class A common stock at an exercise price of $11.00 per share. The SAILSM securities were sold at an offering price of $10.00 per SAILSM security, generating gross proceeds of $402,500,000, including the proceeds from the exercise of the underwriter’s over-allotment option. In connection with the consummation of the Initial Public Offering and the issuance and sale of the SAILSM securities, we consummated the private placement of 7,366,667 warrants (the “private placement warrants”) at a price of $1.50 per private placement warrant, each exercisable to purchase one share of Class A common stock at $11.00 per share, generating total proceeds of approximately $11,050,000. After deducting the underwriting discounts and commissions (excluding the deferred underwriting discount held in the trust account, which amount will be payable upon the consummation of our business combination, if consummated) and the estimated offering expenses, the total net proceeds from our Initial Public Offering and the sale of the private placement warrants was $402,500,000 (or $10.00 per SAILSM security sold in the Initial Public Offering), which was placed in the trust account in the United States (the “trust account”) maintained by Continental Stock Transfer and Trust Company acting as trustee (the “Trustee”). The amount of proceeds not deposited in the trust account was $1,500,000 at the closing of our Initial Public Offering. Funds will remain in the trust account except for the withdrawal of interest earned on the fundsrecently issued accounting pronouncements that may be released to the us to pay taxes.

On February 16, 2021, we entered into a second amended and restated promissory note (the “second amended and restated promissory note”) withpotentially impact our Sponsor, with borrowing capacity up to $3,000,000. in order to finance transaction costs in connection with an intended business combination. The note is non-interest bearing and the unpaid principal balance of the promissory note shall be payable on the earlier of: (i) the consummation of a business combination and (ii) December 31, 2022 (or March 31, 2023 if applicable). The principal amount of such loans may be convertible into private placement warrants of the post-business combination entity at a price of $1.50 per warrant at the option of our sponsor. These warrants would be identical to the private placement warrants. No amounts were outstanding under the note by the Company as of March 31, 2021. Subsequent to March 31, 2021, the Company borrowed $1,100,000 under the note, which remains outstanding as of May 17, 2021.

At March 31, 2021, we had $402,507,058 in the trust account and we had $279,819 in cash and cash equivalents outside the trust account, which is available to fund our working capital requirements.

We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (excluding deferred underwriting commissions) to complete our business combination. We may withdraw interest to pay our taxes, if any. We estimate our annual franchise tax obligations, based on the number of shares of our common stock authorized and outstanding to be approximately $10,000, which is the maximum amount of annual franchise taxes payable by us as a Delaware corporation per annum. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

Off-balance Sheet Financing Arrangements

We had no obligations, assets or liabilities which would be considered off-balance sheet arrangements at March 31, 2021. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

We had not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial agreements involving assets as of March 31, 2021.

Contractual Obligations

We did not have any long-term debt obligations, capital lease obligations, operating lease obligations or purchase obligations at March 31, 2021. In connection with the Initial Public Offering, we entered into an administrative services agreement to pay monthly recurring expenses of $10,000 to CBRE, Inc., an affiliate of our Sponsor, for office space, administrative and support services. The administrative services agreement terminates upon the earlier of the completion of a business combination or the liquidation of the Company. The underwriter is entitled to underwriting discounts and commissions of 5.5%, of which 2.0% ($8,050,000) was paid at the consummation of our Initial Public Offering, and 3.5% ($14,087,500) was deferred. The deferred underwriting commission will become payable to the underwriter from the amounts held in the trust account solely in the event that the Company completes a business combination, subject to the terms of the underwriting agreement. The underwriter is not entitled to any interest accrued on the deferred underwriting discount.

A portion of the deferred underwriting commission, not to exceed 20% of the total amount of the deferred underwriting commissions held in the trust account, may be re-allocated or paid (a) to any underwriter from our Initial Public Offering in an amount (at the sole discretion of the Company’s management team) that is disproportionate to the portion of the aggregate deferred underwriting commission payable to such underwriter based on their participation in the Initial Public Offering and/or (b) to third parties that did not participate in our Initial Public Offering (but who are members of FINRA) that assist the Company in consummating a business combination. The election to or make any such payments to third parties will be solely at the discretion of the Company’s management team, and such third parties will be selected by the management team in their sole and absolute discretion. The deferred fee will become payable to the underwriters from the amounts held in the trust account solely in the event that the Company completes a business combination, subject to the terms of the underwriting agreement.

Critical Accounting Policies

The accompanying financial statements have been prepared in accordance with U.S. GAAP and pursuant to the accounting and disclosure rules and regulations of the SEC, and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the Company’s financial position at March 31, 2021 and the results of operations and cash flows for the period presented. Actual results could materially differ from those estimates. A discussion of such critical accounting policies, which include financial instruments, fair value measurement, stock-based compensation and income taxes can be foundis disclosed in Note 2 to our 2020 Annual Report. There have been no material changes to these policies as of March 31, 2021, except as follows:

Redeemable Warrant liability

Pursuant to the Initial Public Offering, the Company sold 40,250,000 SAILSM securities (including the full exercise of the underwriter’s over-allotment option) at a price of $10.00 per SAILSM security. Each SAILSM security consists of one share of Class A common stock of the Company at $0.0001 par value and one-fourth of one Redeemable Warrant (or 10,062,500 Redeemable Warrants in the aggregate).

The Company determined that the Redeemable Warrants qualified as freestanding financial instruments that are bifurcated from the Class A common stock and classified as a separate liability pursuant to ASC 815, Derivatives and Hedging” (ASC 815). According to ASC 815, financial instruments classified as liabilities are presented at fair value each reporting period, with changes in fair value recorded through earnings. As of March 31, 2021 and December 31, 2020, the value of the Redeemable Warrants was $9,257,500 and $18,716,250, respectively, and the Company recorded a gain on the remeasurement of the Redeemable Warrants of $9,458,750 for the three months ended March 31, 2021 in the Change in fair value of redeemable warrant liability line in the Statement of Operations.

As the Redeemable Warrants, effective February 1, 2021, are separately traded on NYSE under the symbol “CBAH WS,” as of March 31, 2021, the fair value of the Redeemable Warrants was determined based on the quoted trading price of these instruments. As of December 31, 2020, the fair value of these instruments was estimated using Monte Carlo simulation. The key assumptions in the option pricing model utilized are assumptions related to underlying expected share-price volatility of the warrants, the expected term, risk-free interest rate and the Company’s dividend yield. The expected volatility as of the December 15, 2020 was derived from observable public warrant pricing on comparable ‘blank-check’ companies that went public in 2019 and 2020. The risk-free interest rate is based on the interpolated U.S. Constant Maturity Treasury yield. The expected term of the warrants is assumed to be one year until the closing of a business combination, and an estimated five year holding period, based on typical equity investor holding periods. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.

Recently Issued Accounting Pronouncements Not Yet Adopted

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’scondensed consolidated financial statements based on current operations of the Company. The impact of any recently issued accounting standards will be re-evaluated on a regular basis or if a business combination is completed where the impact could be material.

appearing elsewhere in this Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

AsRisk

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 March 31, 2021, we were not subject to any material market orour outstanding debt has a fixed interest rate risk, except as described in the Risk Factors discussed herein and(for further details refer to Note 6, "Debt," in our 2020 Annual Report. The net proceeds of the Initial Public Offering and the private placement warrants, including amountsunaudited condensed consolidated financial statements included elsewhere in the trust account, were investedthis Report). However, changes in U.S. government securities withinterest rates create a maturity of 185 days or less or in money market funds that meetmodest risk because certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, that invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure toborrowings bear interest at floating rates based on LIBOR plus a specified margin. We sometimes manage our interest rate risk.

We have not engaged in any hedging activities sinceexposure on floating-rate debt by entering into derivative instruments to hedge all or a

52

portion of our inceptioninterest rate exposure on October 13, 2020.certain debt facilities. We do not expectenter 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 engage insignificant 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 and limits the amount of credit risk from any hedging activities with respect to the market risk to which we are exposed.

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 by us 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 principal executive officerChief Executive Officer and principal financial officer or persons performing similar functions,Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an

Based on this evaluation of the effectiveness of our disclosure controls and procedures, as of the end of the fiscal quarter ended March 31, 2021, as such term is defined in Rules 13a-15(e)our management, including our Chief Executive Officer and 15d-15(e) under the Securities and Exchange Act, as amended (the “Exchange Act”). Based on this evaluation, our principal executive officer and principal financial officer hasChief Financial Officer, have concluded that during the period covered by this report, our disclosure controls and procedures were not effective as of March 31, 2021, due to2024, because of the material weaknessweaknesses in our internal control over financial reporting discussed below.

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

In light

As discussed above, we implemented certain measures to remediate the material weaknesses identified in the design and operation of management’s conclusion, following a review of the Redeemable Warrants in connection with the SEC Staff Statement, as described in “Note 1—Description of Organization and Business Operations” of our Financial Statements, to adjust the accounting for certain complex financial instruments, including the Redeemable Warrants, our internal control over financial reporting did not result in sufficient risk assessment of the underlying accounting for certain complex financial instruments which we determined to be a material weakness.

There werereporting. Other than those measures, there have been no changes in our internal control over financial reporting that occurred(as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended March 31, 2021 covered by this Quarterly Report on Form 10-Q2024, that hashave materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting. In response to the material weakness related to our accounting for certain complex financial instruments, we have engaged accounting advisors and performed a thorough review of our complex financial instruments and accounting positions.

PART II—OTHER INFORMATION

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Part II - Other Information

Item 1. Legal Proceedings.

None.

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.

With the exception of the following, thereFactors

There have been no material changes to our risk factors as previously disclosedthe Risk Factors described in our 2020 Annual Report.

Our Redeemable Warrants are now accounted for as derivative liabilities and are recorded at fair value with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our common stock or may make it more difficult for us to consummate an initial business combination.

We issued 10,062,500 Redeemable Warrants as part of the SAILSM securities offered in our Initial Public Offering. We have accounted for such warrants underlying the SAILSM securities offered in our Initial Public Offering as a warrant liability. At each reporting period (1) the accounting treatment of the Redeemable Warrants will be re-evaluated for proper accounting treatment as a liability or equity and (2) the fair value of the liability of the Redeemable Warrants will be remeasured and the change in the fair value of the liability will be recorded as other income (expense) in our statement of operations. For the three months ended March 31, 2021, we recorded a gain of $9,458,750 with respect to our outstanding Redeemable Warrants (see “Change in fair value of redeemable warrant liability” in the Part I, Item 1. Financial Statements—Statement1A "Risk Factors" of Operations of this Quarterlythe 2023 Annual Report on Form 10-Q).

As the Redeemable Warrants, effective February 1, 2021 are separately traded on NYSE under the symbol “CBAH WS,” the fair value of the Redeemable Warrants will be determined based on the quoted traded price of these instruments. The share price of our common stock represents the primary underlying variable that impacts the value of the derivative instruments. Additional factors that impact the value of the derivative instruments include the volatility of our stock price, discount rates and stated interest rates. As a result, our financial statements and results of operations will fluctuate quarterly, based on various factors, such as the share price of our common stock, many of which are outside of our control. If our stock price is volatile, we expect that we will recognize non-cash gains or losses on our Redeemable Warrants or any other similar derivative instruments each reporting period and that the amount of such gains or losses could be material. The impact of changes in fair value on earnings may have an adverse effect on the market price of our common stock. In addition, potential targets may seek a special purpose acquisition company that does not have warrants that are accounted for as a liability, or have any warrants at all, which may make it more difficult for us to consummate a business combination with a target business.

10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Proceeds

None.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Securities
None.

Item 4. Mine Safety Disclosures.

Disclosures

Not applicable.

Item 5. Other Information.

None.

Information

During the three months ended March 31, 2024, the following director/officer terminated their previously adopted “Rule 10b5-1 trading arrangement,” as defined in Item 408(a) of Regulation S-K intending to satisfy the affirmative defense of Rule 10b5-1(c): Mr. Weber terminated his 10b5-1 trading arrangement, which was adopted on September 14, 2023 had a duration of December 14, 2023 to December 31, 2024, and provided for a sale of 750,000 total shares of Class A common stock, subject to certain pricing triggers.

During the three months ended March 31, 2024, the following directors and/or officers adopted a “Rule 10b5-1 trading arrangement,” as defined in Item 408(a) of Regulation S-K intending to satisfy the affirmative defense of Rule 10b5-1(c):

Name and Title
Maximum Number of Shares of Class A Common Stock to be Sold (1)
Duration (2)
Adoption DateExpiration Date
Lars Norell (3)
Former Co-Chief Executive Officer
1,080,000July 1, 2024 – May 30, 2025March 28, 2024May 30, 2025

(1) The volume of sales is determined, in part, based on certain pricing triggers outlined in each adopting person's trading arrangement.

(2) Each trading arrangement permits transactions through and including the earlier to occur of (a) the completion of all sales or (b) the expiration date listed in the table.

(3) Mr. Norell entered into his Rule 10b5-1 trading arrangement, dated March 28, 2024 (the “Norell Trading Arrangement”) through Start Capital LLC, an entity which he controls. The Norell Trading Arrangement amends Mr. Norell’s prior Rule 10b5-1 trading arrangement intending to satisfy the affirmative defense of Rule 10b5-1(c), which was adopted on December 28, 2022, and amended on August 25, 2023, had a duration of December 1, 2023 to May 30, 2025, and provided for a sale of 1,800,000 total shares of Class A common stock, subject to certain pricing triggers.




54

Item 6. Exhibits.

Exhibits
Exhibit No.Description

Exhibit

Number

10.1*		Description
10.2*
  3.131.1*Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2021)
  3.2Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 of the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2021)
  31.1*
31.2*
  31.2*
32**
  32*
101.INS
101.INSXBRL Instance Document –- the instance document does not appear in the Interactive Data File because XBRLits tags are embedded within the Inlineinline XBRL document.
101.SCH
101.SCHXBRL Taxonomy Extension Schema Document
101.CAL
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LAB
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PRE
101.PREXBRL Taxonomy Extension Presentation Linkbase Document

*104

Filed herewith.

Cover Page Interactive Data File (embedded within the inline XBRL document).

*Filed herewith

**Furnished herewith
55

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, thereuntohereunto duly authorized.

Date: May 9, 2024By:/s/ Gregg J. Felton
Name:CBRE ACQUISITION HOLDINGS, INC.Gregg J. Felton
Title:Chief Executive Officer

Date: May 9, 2024By:/s/ Dustin L. Weber
Name:Dustin L. Weber
Date: May 17, 2021Title:By:

/s/ Cash J. Smith

Cash J. Smith

President, Chief Financial Officer and Secretary

(Principal Financial and Accounting Officer)

23



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