Opening of Proposals - WWTP Solar Guaranteed Energy Savings Contract Proj. No. 124-015 - Ameresco

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Table of Contents AMERESCO, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except per share amounts) 19. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES During the twelve months ended December 31, 2023, we adopted ASU 2020-04, Reference Rate Reform, fosix interest rate swap contracts with the transition from LIBOR to SOFR as the reference rate. In March 2023, we dedesignated one interest rate swap contract for a previous loan facility and entered into a new interest rate swap contract to hedge $14,084 of the extended loan facility. The new interest rate swap was designated as a cash flow hedge. In June 2023, we prepai(bne loan facility and terminated the related swap prior to its maturity date. In August 2023, we acquired one interest rate swap through an energy asset project acquisition. This interest rate swap was not designated as an effective hedge and we recorded the change in the valuation in other expenses, net in our consolidated statements of income. See Note 7 for additional information about this energy asset project acquisition. The following table presents information about the fair value amounts of our derivative instruments: Derivatives Designated as Hedging Instruments Interest rate swap contracts Interest rate swap contracts Derivatives Not Designated as Hedging Instruments Interest rate swap contracts Interest rate swap contracts Make -whole provisions Derivatives as of December 31, 2023 2022 Balance Sheet Location Fair Value Fair Value Other assets $ 1,023 $ 1,748 Other liabilities $ — $ 9 Other assets $ 2,947 $ 3,454 Other liabilities $ 629 $ Other liabilities $ 6,012 $ 5,348 As of December 31, 2023, all butthree of our freestanding derivatives were designated as hedging instruments and as of December 31, 2022, all buttwo of our derivatives were designated as hedging instruments. The following tables present information about the effects of our derivative instruments on the consolidated statements of income and consolidated statements of comprehensive income: Derivatives Designated as Hedging Instruments Interest rate swap contracts Derivatives Not Designated as Hedging Instruments Interest rate swap contracts Commodity swap contracts Make -whole provisions Amount of (Gain) Loss Recognized in Net Income for the Year Ended Location of (Gain) Loss December 31, Recognized in Net Income 2023 2022 2021 Other expenses, net $ (770) $ 1,037 $ 2,086 Other expenses, net $ 1,354 $ (2,738) $ (996) Other expenses, net $ — $ 2,338 $ 2,325 Other expenses, net $ (2,462) $ (506) $ (1,089) The following table presents the changes in AOCI, net of taxes, from our hedging instruments: Derivatives Designated as Hedging Instruments: Accumulated gain in AOCI at the beginning of the year Unrealized gain recognized in AOCI Gain reclassified from AOCI to other expenses, net AOCI at the end of the year 100 Year Ended December 31, 2023 $ 1,284 232 (770) $ 746