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Table of Contents
<br />to 24 months to result in a signed contract and convert to fully -contracted backlog. It may take longer, as it depends on the size and complexity of the project. Historically,
<br />approximately 90% of our awarded backlog projects have resulted in a signed contract. After the customer and Ameresco agree to the terms of the contract and the contract
<br />becomes executed, the project moves to fully -contracted backlog. The contracts reflected in our fully -contracted backlog typically have a construction period of 12 to 36 months
<br />and we typically expect to recognize revenue for such contracts over the same period.
<br />Our O&M backlog represents expected future revenues under signed, multi -year customer contracts for the delivery of O&M services, primarily for energy efficiency and
<br />renewable energy construction projects completed by us for our customers.
<br />We define our 12-month backlog as the estimated amount of revenues that we expect to recognize in the next twelve months from our fully -contracted backlog. See Note 2
<br />"Summary of Significant Accounting Policies" for our revenue recognition policies. See "We may not recognize all revenues from our backlog or receive all payments
<br />anticipated under awarded projects and customer contracts" and "In order to secure contracts for new projects, we typically face a long and variable selling cycle that requires
<br />significant resource commitments and requires a long lead time before we realize revenues" in Item 1 A, Risk Factors.
<br />Assets in Development
<br />Assets in development, which represents the potential design/build project value of small-scale renewable energy plants that have been awarded or for which we have secured
<br />development rights, were estimated at $2,445.9 million as of December 31, 2023, including $89.8 million attributable to a non -controlling interest, and $1,625.7 million as of
<br />December 31, 2022. The portion related to spending for EaaS assets was approximately $399.8 million and $36.4 million at December 31, 2023 and 2022, respectively. These
<br />are also important metrics because they help us gauge our future capacity to generate electricity or deliver renewable gas fuel which contributes to our recurring revenue stream.
<br />Results of Operations
<br />The following table sets forth certain financial data from the consolidated statements of income for the periods indicated1):
<br />Year Ended December 31,
<br />2023
<br />2022
<br />Year -Over -Year Change
<br />(In Thousands)
<br />Dollar Amount
<br />% of Revenues
<br />Dollar Amount
<br />% of Revenues
<br />Dollar Change
<br />% Change
<br />Revenues
<br />$ 1,374,633
<br />100.0 %
<br />$ 1,824,422
<br />100.0 %
<br />$ (449,789)
<br />(24.7)%
<br />Cost of revenues
<br />1,128,204
<br />82.1 %
<br />1,533,589
<br />84.1 %
<br />(405,385)
<br />(26.4)%
<br />Gross profit
<br />246,429
<br />17.9 %
<br />290,833
<br />15.9 %
<br />(44,404)
<br />(15.3)%
<br />Earnings from unconsolidated entities
<br />1,758
<br />0.1 %
<br />1,647
<br />0.1 %
<br />ill
<br />6.7 %
<br />Selling, general and administrative expenses
<br />162,138
<br />11.8 %
<br />159,488
<br />8.7 %
<br />2,650
<br />1.7 %
<br />Asset impairments
<br />3,831
<br />0.3 %
<br />%
<br />3,831
<br />100.0 %
<br />Operating income
<br />82,218
<br />6.0 %
<br />132,992
<br />7.3 %
<br />(50,774)
<br />(38.2)%
<br />Other expenses, net
<br />43,949
<br />3.2 %
<br />27,273
<br />1.5 %
<br />16,676
<br />61.1 %
<br />Income before income taxes
<br />38,269
<br />2.8 %
<br />105,719
<br />5.8 %
<br />(67,450)
<br />(63.8)%
<br />Income tax (benefit) provision
<br />(25,635)
<br />(1.9)%
<br />7,170
<br />0.4 %
<br />(32,805)
<br />457.5 %
<br />Net income
<br />$ 63,904
<br />4.6 %
<br />$ 98,549
<br />5.4 %
<br />$ (34,645)
<br />(35.2)%
<br />Net income attributable to non -controlling interest and
<br />redeemable non -controlling interest
<br />$ (1,434)
<br />(0.1)%
<br />$ (3,623)
<br />(0.2)%
<br />$ (2,189)
<br />(60.4)%
<br />Net income attributable to common shareholders
<br />$ 62,470
<br />4.5 %
<br />$ 94,926
<br />5.2 %
<br />$ (32,456)
<br />(34.2)%
<br />(1) A comparison of our 2022 and 2021 results can be found in Item 7 of our 2022 Form 10-K filed with the SEC.
<br />Our results of operations for the year -ended December 31, 2023 reflect a year -over -year decline in terns of revenues, operating income, and net income attributable to common
<br />shareholders. All financial result comparisons are against the prior year period.
<br />• Revenue: total revenues decreased primarily due to a $480.0 million, or 32%, decrease in our project revenue attributed to the timing of revenue recognized based upon
<br />costs incurred to date relative to total expected costs on active projects, including our SCE battery storage project.
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