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

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

The 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 December 20, 2024.


Assets
Accounts receivable			876
Property, plant and equipment			131,728
Intangible assets			350
Operating lease asset			15,557
Other assets			2,079
Total assets acquired			150,590

Liabilities
Intangible liabilities			5,200
Asset retirement obligation			1,920
Operating lease liability			17,567
Other liabilities			1,275
Total liabilities assumed			25,962



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

The contingent consideration is related to the estimated earnout cash payment of a maximum of $8 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 9, "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.

The impact of the Caldera Acquisition on the Company's revenue in the consolidated statement of operations was an increase of $0.2 million for the year ended December 31, 2023. The impact of the Caldera Acquisition on the Company's net income was not material for the year ended December 31, 2023.

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:

The following unaudited pro forma combined results of operations give effect to the Caldera Acquisition as if it had occurred on January 1, 2022. The unaudited pro forma combined results of operations are provided for informational purposes only and do not purport to represent the Company’s actual consolidated results of operations had the Caldera Acquisition occurred on the date assumed, nor are these financial statements necessarily indicative of the Company’s future consolidated results of operations. The unaudited pro forma combined results of operations do not reflect the costs of any integration activities or any benefits that may result from operating efficiencies or revenue synergies.

On July 13, 2023, the Company acquired a solar energy facility and a battery energy storage system located in Massachusetts with nameplate capacities of 10.3 MW and 5 MW, respectively, for a total purchase price of $24.4 million ("Marshall Street Acquisition"). The Marshall Street Acquisition was made pursuant to the membership interest purchase agreement dated July 13, 2023, through which the Company acquired 100% ownership interest in SRD Marshall MM, LLC, and was entered into by the Company to grow its portfolio of solar energy facilities.

The Company accounted for the Marshall Street 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 July 13, 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.


Assets
Accounts receivable	$	273
Property, plant and equipment	28,798
Operating lease asset	891
Total assets acquired	29,962

Liabilities
Construction payable	1,885
Asset retirement obligation	256
Operating lease liability	391
Total liabilities assumed	2,532
Redeemable non-controlling interests	3,040
Total fair value of consideration transferred	$	24,390

The Company incurred approximately $0.1 million of acquisition related costs related to the Marshall Street 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.

During the year ended December 31, 2023, the Company acquired solar energy facilities located in Rhode Island, California, Massachusetts, and New York with a total nameplate capacity of 13.2 MW from third parties for a total purchase price of $24.5 million. As of December 31, 2023, $0.4 million of total consideration remained payable to sellers and was included as purchase price payable on the consolidated balance sheet. The acquisitions were accounted for as acquisitions of assets, whereby the Company acquired $27.4 million of property, plant and equipment and $6.0 million of operating lease assets, and assumed $7.9 million of operating lease liabilities, $0.5 million of intangible liabilities, $2.1 million of financing lease obligations, and $0.3 million of asset retirement obligations. The intangible liabilities are associated with unfavorable rate power purchase agreements and have a weighted average amortization period of 5 years. During the year ended December 31, 2023, the Company also acquired land in California and Massachusetts from third parties for a total purchase price of $2.8 million.

During the year ended December 31, 2023, the Company acquired solar energy facilities located in Massachusetts, Maine, and New Jersey with a total nameplate capacity of 8.0 MW from third parties for a total purchase price of $11.9 million. As of December 31, 2023, $0.3 million of total consideration remained payable to sellers and was included as purchase price payable on the consolidated balance sheet. The acquisitions were accounted for as acquisitions of variable interest entities that do not constitute a business. The Company acquired $14.8 million of property, plant and equipment and $3.0 million of operating lease assets, and assumed $2.9 million of operating lease liabilities, $0.5 million of intangible liabilities, $0.1 million of asset retirement obligations, and $0.2 million of redeemable noncontrolling interests. The intangible liabilities are associated with an unfavorable SREC agreement and has a weighted average amortization period of 5 years.

On February 15, 2023, APA Finance III, LLC ("APAF III"), a wholly-owned subsidiary of the Company, acquired a 220 MW portfolio of 55 operating and 3 in-development solar energy facilities located across eight US states (the “True Green II Acquisition”). The portfolio was acquired from True Green Capital Fund III, L.P. (“True Green” or the “Seller”) for total consideration of approximately $308.5 million. The purchase price and associated transaction costs were funded by the proceeds from the APAF III Term Loan (as defined in Note 8, "Debt") and cash on hand. The True Green II Acquisition was made pursuant to the purchase and sale agreement (the "PSA") dated December 23, 2022, 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 APAF III Operating, LLC, a holding entity that owns the acquired solar energy facilities.

The Company accounted for the True Green II 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 February 15, 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 accounting for the True Green II Acquisition was finalized as of December 31, 2023. Subsequent to the acquisition date, the Company made certain measurement period adjustments to provisional accounting as a result of clarification of information utilized to determine fair value of assets acquired and liabilities assumed, and reconciling working capital adjustments with the seller. The following table presents the final allocation of the purchase price to the assets acquired and liabilities assumed, based on their estimated fair values on February 15, 2023, and inclusive of measurement period adjustments:


	Provisional accounting as of February 15, 2023		Measurement period adjustments		Final accounting as of February 15, 2023
Assets
Accounts receivable	$	4,358	$	(357)	$	4,001
Property, plant and equipment	334,958		9,265		344,223
Intangible assets	850		—		850
Operating lease asset	32,053		198		32,251
Other assets	1,739		835		2,574
Total assets acquired	373,958		9,941		383,899

Liabilities
Long-term debt(1)	8,100		(200)		7,900
Intangible liabilities	4,100		—		4,100
Asset retirement obligation	3,795		—		3,795
Operating lease liability	37,723		(1,932)		35,791
Contract liability(2)	3,534		—		3,534
Other liabilities	—		1,932		1,932
Total liabilities assumed	57,252		(200)		57,052
Redeemable non-controlling interests	8,100		1,300		9,400
Non-controlling interests	13,296		204		13,500
Total fair value of consideration transferred, net of cash acquired	$	295,310	$	8,637	$	303,947


	Provisional accounting as of February 15, 2023		Measurement period adjustments		Final accounting as of February 15, 2023
Cash consideration paid to True Green on closing	$	212,850	$	—	$	212,850
Cash consideration paid to settle debt and interest rate swaps on behalf of True Green	76,046		—		76,046
Cash consideration in escrow accounts(3)	3,898		—		3,898
Purchase price payable(4)	7,069		663		7,732
Contingent consideration payable(5)	—		7,974		7,974
Total fair value of consideration transferred	299,863		8,637		308,500
Restricted cash acquired	4,553		—		4,553
Total fair value of consideration transferred, net of cash acquired	$	295,310	$	8,637	303,947

(2) Acquired contract liabilities relate to long-term agreements to sell renewable energy credits that were fully prepaid by the customer prior to the acquisition date. The Company will recognize revenue associated with the contract liabilities as renewable energy credits are delivered to the customer through 2036.

(5) Contingent consideration represents amounts that may be payable upon the Seller's completion of in-development solar energy facilities and the Company obtaining tax equity financing. Refer to the Contingent Consideration section of Note 9, "Fair Value Measurements" for further information.

The Company incurred approximately $2.8 million of acquisition related costs related to the True Green II 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, as well as $0.8 million of costs to acquire SRECs available for sale that were sold by the Company to its customers during the year ended December 31, 2023, which was recorded in Other current assets in the purchase price allocation.

The Company attributed the intangible asset and liability values to favorable and 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 acquired intangible assets and assumed intangible liabilities as of the acquisition date:


	Fair Value (thousands)		Weighted Average Amortization Period
Favorable rate revenue contracts – PPA	$	800	19 years
Favorable rate revenue contracts – SREC	50		16 years
Unfavorable rate revenue contracts – PPA	(800)		17 years
Unfavorable rate revenue contracts – SREC	(3,300)		3 years

only and do not purport to represent the Company’s actual consolidated results of operations had the True Green II Acquisition occurred on the date assumed, nor are these financial statements necessarily indicative of the Company’s future consolidated results of operations. The unaudited pro forma combined results of operations do not reflect the costs of any integration activities or any benefits that may result from operating efficiencies or revenue synergies.

On November 11, 2022, APA Finance II, LLC, a wholly-owned subsidiary of the Company, acquired a 88 MW portfolio of nineteen solar energy facilities operating across eight US states. The portfolio was acquired from D.E. Shaw Renewables Investments L.L.C. ("DESRI") for total consideration of $100.8 million ("DESRI Acquisition"). The DESRI Acquisition was made pursuant to membership interest purchase agreements (the "MIPAs") dated September 26, 2022, and entered into by the Company to grow its portfolio of solar energy facilities. Pursuant to the MIPAs, the Company acquired 100% ownership interest in holding entities that own the acquired solar energy facilities. The Company accounted for the DESRI 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 November 11, 2022, 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 accounting for the DESRI Acquisition was finalized as of November 11, 2023. Subsequent to the to the acquisition date, the Company made certain measurement period adjustments to provisional accounting recognized. These adjustments consist of a decrease in Operating lease asset of $0.7 million, an increase in Intangible assets of $0.8 million, and an increase in Intangible liabilities of $0.1 million.


	Provisional accounting as of November 11, 2022		Measurement period adjustments		Final accounting as of November 11, 2022
Assets
Accounts receivable	$	2,001	$	—	$	2,001
Derivative assets	2,462		—		2,462
Other assets	432		—		432
Property, plant and equipment	179,500		—		179,500
Operating lease asset	17,831		(740)		17,091
Intangible assets	29,479		760		30,239
Total assets acquired	231,705		20		231,725

Liabilities
Accounts payable	275		—		275
Accrued liabilities	746		—		746
Long-term debt	105,346		—		105,346
Intangible liabilities	771		20		791
Operating lease liability	20,961		—		20,961
Contract liability(1)	7,200		—		7,200
Asset retirement obligation	1,508		—		1,508
Total liabilities assumed	136,807		20		136,827
Non-controlling interests	$	184	$	—	$	184
Total fair value of consideration transferred, net of cash acquired	$	94,714	$	—	$	94,714


	Provisional accounting as of November 11, 2022		Measurement period adjustments		Final accounting as of November 11, 2022
Cash consideration to the seller on closing	$	82,235	$	—	$	82,235
Fair value of purchase price payable(2)	19,017		—		19,017
Post-closing purchase price true-up	(469)		—		(469)
Total fair value of consideration transferred	100,783		—		100,783
Cash acquired	1,220		—		1,220
Restricted cash acquired	4,849		—		4,849
Total fair value of consideration transferred, net of cash acquired	$	94,714	$	—	$	94,714

(1) Acquired contract liabilities related to long-term agreements to sell renewable energy credits that were fully prepaid by the customer prior to the acquisition date. The Company will recognize revenue associated with the contract liabilities as renewable energy credits are delivered to the customer through December 31, 2028.

(2) Purchase price outstanding as of December 31, 2022, is payable in three installments in two, twelve and eighteen months following the acquisition date, subject to the accuracy of general representations and warranty provisions included in MIPAs. During the year ended December 31, 2023, the Company paid DESRI $12.5 million of the outstanding purchase price payable net of $0.5 million working capital adjustment.

The Company attributed the intangible asset and liability values to favorable and unfavorable rate revenue contracts to sell power. 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:

On April 1, 2022, the Company acquired a 1.0 MW solar energy facility located in New Jersey (the "Stellar NJ Acquisition") from a third party for a total purchase price of $1.3 million. The transaction was accounted for as an acquisition of assets, whereby the Company acquired $2.3 million of property, plant and equipment and assumed $0.4 million of intangible liabilities and $0.6 million of construction payable. The intangible liability assumed is associated with an unfavorable rate power purchase agreement and has a weighted average amortization period of 15 years.

On June 10, 2022, the Company acquired a 4.6 MW portfolio of six solar energy facilities located in Hawaii (the "Stellar HI 2 Acquisition") from a third party for a total purchase price of $9.9 million, including $0.2 million of transaction related costs. This transaction was accounted for as an acquisition of assets, whereby the Company acquired $7.3 million of property, plant and equipment, $2.9 million of intangible assets, and $0.2 million of operating lease assets, and assumed $0.5 million of intangible liabilities and $0.1 million of asset retirement obligations.

The Company attributed intangible asset and liability values to favorable and unfavorable rate revenue contracts to sell power generated by the acquired solar energy facilities. 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: