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Table of Contents
<br />AMERESCO, INC.
<br />NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<br />(In thousands, except per share amounts)
<br />i N 7 *Yfil 71 y I [1A[1] a.11R9lei om:
<br />Ameresco, Inc. (including its subsidiaries, the "Company," "Ameresco", "we," "our," or "us") was organized as a Delaware corporation on April 25, 2000. We are a leading
<br />cleantech integrator and renewable energy asset developer, owner and operator. Our comprehensive portfolio includes energy efficiency, infrastructure upgrades, asset
<br />sustainability, and renewable energy solutions delivered to clients throughout North America and Europe. We provide solutions, both services and products, which enable our
<br />customers to reduce their energy consumption, lower their operating and maintenance costs and realize environmental benefits. Our comprehensive set of solutions includes
<br />upgrades to a facility's energy infrastructure and the development, construction, and operation of distributed energy resources. We also sell certain solar photovoltaic ("solar
<br />PV") equipment worldwide and operate in the United States, Canada and Europe. We have successfully completed energy saving, environmentally responsible projects with
<br />Federal, state and local governments, healthcare and educational institutions, housing authorities, and commercial and industrial customers.
<br />We are compensated through a variety of methods, including: 1) direct payments based on fee -for -services contracts (utilizing lump -sum or cost-plus pricing methodologies), 2)
<br />the sale of energy from our energy assets, and 3) direct payment for solar PV equipment and systems.
<br />2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
<br />Principles of Consolidation
<br />The accompanying consolidated financial statements include the accounts of Ameresco, our subsidiaries, certain contracts in which we have a controlling financial interest and
<br />three investment funds formed to fund the purchase and operation of solar energy systems, which are consolidated with Ameresco as variable interest entities ("VIEs"). We use
<br />a qualitative approach in assessing the consolidation requirement for VIEs. This approach focuses on determining whether we have the power to direct the activities of the VIE
<br />that most significantly affect the VIE's economic performance and whether we have the obligation to absorb losses or the right to receive benefits that could potentially be
<br />significant to the VIE. For all periods presented, we have determined that we are the primary beneficiary in a majority of our operational VIEs. When we have determined we
<br />are the primary beneficiary, we evaluate our relationships with the VIEs on an ongoing basis to ensure that we continue to be the primary beneficiary. All significant
<br />intercompany accounts and transactions have been eliminated. Gains and losses from the translation of all foreign currency financial statements are recorded in accumulated
<br />other comprehensive income, net, within stockholders' equity. We prepare our consolidated financial statements in conformity with the accounting principles generally accepted
<br />in the United States of America ("GAAP").
<br />Reclassification and Rounding
<br />Certain prior period amounts were reclassified to conform to the presentation in the current period. We round amounts in the consolidated financial statements to thousands and
<br />calculate all percentages and per-share data from the underlying whole -dollar amounts. Thus, certain amounts may not foot, crossfoot, or recalculate based on reported numbers
<br />due to rounding.
<br />Use of Estimates
<br />GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the
<br />date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Changes in circumstances could cause actual results
<br />to differ materially from those estimates. The estimates and assumptions used in these consolidated financial statements relate to management's estimates of final construction
<br />contract profit in accordance with accounting for long-term contracts, allowance for credit losses, realization of project development costs, leases, fair value of derivative
<br />financial instruments, accounting for business acquisitions, stock -based awards, impairment of goodwill and long-lived assets, income taxes, and potential liability in
<br />conjunction with contingent consideration.
<br />Self -insured Health Insurance
<br />We are self -insured for employee health insurance and the maximum exposure in fiscal year 2023 under the plan was 200 per covered participant, after which reinsurance takes
<br />effect. The liability for unpaid claims and associated expenses, including incurred but not reported claims, is determined by management and reflected in our consolidated
<br />balance sheets in accrued
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