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

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

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

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

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


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

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


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

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

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

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


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

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


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

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

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

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

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

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


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

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


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

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.

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 – SREC	350	4 years
Unfavorable rate revenue contracts – SREC	(5,200)	3 years