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Table of Contents
<br />• Alternative Fuels: the increase is primarily due to a $2.3 million, or 2%, increase in energy asset revenues resulting from the continued growth of our operating
<br />portfolio, increased production levels and more favorable pricing on renewable identification numbers ("RIN's")
<br />generated from our renewable natural gas facilities.
<br />• Europe: revenues increased year -over -year primarily due to higher project revenue of $85.1 million, or 158%, resulting from increased overall activity which included
<br />revenues of $52.2 million related to the acquisition of Enerqos earlier in
<br />2023 and increased revenues in Greece of $28.3 million.
<br />• All Other: All other revenues is consistent with the prior year.
<br />Income before Income Taxes and Unallocated Corporate Activity
<br />Year Ended December 31,
<br />Year -Over -Year Change
<br />(In Thousands)
<br />2023 2022
<br />Dollar Change % Change
<br />U.S. Regions $
<br />38,746 $ 88,531
<br />$ (49,785) (56.2)%
<br />U.S. Federal
<br />49,237 50,866
<br />(1,629) (3.2)
<br />Canada
<br />3,813 2,554
<br />1,259 49.3
<br />Alternative Fuels
<br />6,215 22,989
<br />(16,774) (73.0)
<br />Europe
<br />4,188 5,589
<br />(1,401) (25.1)
<br />All Other
<br />4,442 6,370
<br />(1,928) (30.3)
<br />Unallocated corporate activity
<br />(68,372) (71,180)
<br />2,808 3.9
<br />Income before income taxes $
<br />38,269 $ 105,719
<br />$ (67,450) (63.8)%
<br />• U.S. Regions: the decrease is primarily due to the lower revenues described above, partially offset by lower salaries and benefit costs and lower project development
<br />costs.
<br />• U.S. Federal: the decrease is due primarily to higher interest expense.
<br />• Canada: the increase is primarily due to the increase in project revenues described above partially offset by higher project development costs.
<br />• Alternative Fuels: the decrease is primarily due to higher direct costs related to unplanned downtime, higher interest expense, higher depreciation expense related to the
<br />timing of assets placed in operations and impairment charges recorded in 2023 related to two of our landfill gas to energy assets.
<br />• Europe: the decrease is primarily due to factoring fees of $5.8 million, increased salaries and benefits, net, and depreciation and amortization as a result of the
<br />acquisition of Enerqos, partially offset by the increased revenues noted above.
<br />• All Other: the decrease is primarily due to increased salaries and benefits, net.
<br />• Unallocated corporate activity includes all corporate level selling, general and administrative expenses and other expenses not allocated to the reportable segments. We
<br />do not allocate any indirect expenses to the segments. Corporate activity improved primarily due to lower net salaries and benefit costs of $4.7 million, related to a
<br />decrease in non -cash stock -based compensation expense, and higher interest income partially offset by higher interest expense of $3.2 million.
<br />Liquidity and Capital Resources
<br />Overview
<br />Since inception, we have funded operations primarily through cash flow from operations, advances from Federal ESPC projects, our senior secured credit facility, and various
<br />forms of other debt (see "Project Financing" below). In addition, in March 2021, we completed an underwritten public offering of 2,875,000 shares of our Class A Common
<br />Stock, for total net proceeds of $120.1 million. See Note 13 "Equity and Earnings per Share" for additional information.
<br />Working capital requirements can be susceptible to fluctuations during the year due to timing differences between costs incurred, the timing of milestone -based customer
<br />invoices and actual cash collections. Working capital may also be affected by seasonality, growth rate of revenue, long lead-time equipment purchase patterns, advances from
<br />Federal ESPC projects, and payment terms for payables relative to customer receivables.
<br />We expect to incur additional expenditures in connection with the following activities:
<br />• equity investments, energy project asset acquisitions and business acquisitions that we may fund from time to time
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