10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________.

Commission File Number: 001-34811

Ameresco, Inc.

(Exact name of registrant as specified in its charter)

Delaware	04-3512838
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
111 Speen Street, Suite 410 Framingham, Massachusetts	01701
(Address of Principal Executive Offices)	(Zip Code)

(508) 661-2200

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer o	Accelerated Filer  þ	Non-accelerated filer  o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Shares outstanding as of July 28, 2014
Class A Common Stock, $0.0001 par value per share	28,341,948
Class B Common Stock, $0.0001 par value per share	18,000,000

AMERESCO, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2014

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Consolidated Balance Sheets at June 30, 2014 (Unaudited) and December 31, 2013	1
Consolidated Statements of Income (Loss) for the three and six months ended June 30, 2014 and 2013 (Unaudited)	3
Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2014 and 2013 (Unaudited)	4
Consolidated Statement of Changes in Stockholders’ Equity for the six months ended June 30, 2014 (Unaudited)	5
Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and 2013 (Unaudited)	6
Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosures About Market Risk	35
Item 4. Controls and Procedures	35
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	37
Item 1A. Risk Factors	37
Item 6. Exhibits	37
Signatures	38
Exhibit Index	39

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

AMERESCO, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

	June 30,		December 31,
	2014		2013
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	16,408	$	17,171
Restricted cash	12,535		15,497
Accounts receivable, net	74,940		86,008
Accounts receivable retainage	14,422		21,019
Costs and estimated earnings in excess of billings	56,003		71,204
Inventory, net	9,256		10,257
Prepaid expenses and other current assets	12,579		10,177
Income tax receivable	10,646		3,971
Deferred income taxes	6,047		4,843
Project development costs	11,193		9,686
Total current assets	224,029		249,833
Federal ESPC receivable	50,488		44,297
Property and equipment, net	8,213		8,699
Project assets, net	210,256		210,744
Deferred financing fees, net	5,102		5,320
Goodwill	56,460		53,074
Intangible assets, net	9,852		10,253
Other assets	22,583		22,440
Total assets	$	586,983	$	604,660
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	13,498	$	12,974
Accounts payable	73,748		88,733
Accrued expenses and other current liabilities	19,978		11,947
Billings in excess of cost and estimated earnings	15,639		16,933
Income taxes payable	—		615
Total current liabilities	122,863		131,202
Long-term debt, less current portion	91,741		103,222
Federal ESPC liabilities	45,923		44,297
Deferred income taxes	16,180		11,318
Deferred grant income	9,118		8,163
Other liabilities	29,322		29,652
Commitments and contingencies (Note 5)

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

AMERESCO, INC.
CONSOLIDATED BALANCE SHEETS — (Continued)
(in thousands, except share and per share amounts)
	June 30,		December 31,
	2014		2013
	(Unaudited)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding at June 30, 2014 and December 31, 2013	$	—	$	—
Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 28,156,426 shares issued and outstanding at June 30, 2014, 27,869,317 shares issued and outstanding at December 31, 2013	3		3
Class B common stock, $0.0001 par value, 144,000,000 shares authorized, 18,000,000 shares issued and outstanding at June 30, 2014 and December 31, 2013	2		2
Additional paid-in capital	104,899		102,587
Retained earnings	165,532		171,094
Accumulated other comprehensive income, net	1,389		3,112
Non-controlling interest	11		8
Total stockholders’ equity	271,836		276,806
Total liabilities and stockholders’ equity	$	586,983	$	604,660

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

AMERESCO, INC.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(in thousands, except share and per share amounts)

(Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
	2014		2013			2014			2013
Revenues	$	142,558	$	126,252		$	243,289		$	236,388
Cost of revenues	114,622		102,870			197,799			191,487
Gross profit	27,936		23,382			45,490			44,901
Selling, general and administrative expenses	24,154		25,292			48,493			48,893
Operating income (loss)	3,782		(1,910		)	(3,003		)	(3,992		)
Other expenses, net	796		448			2,528			913
Income (loss) before provision (benefit) for income taxes	2,986		(2,358		)	(5,531		)	(4,905		)
Income tax provision (benefit)	267		(577		)	31			(1,200		)
Net income (loss)	$	2,719	$	(1,781	)	$	(5,562	)	$	(3,705	)
Net income (loss) per share attributable to common shareholders:
Basic	$	0.06	$	(0.04	)	$	(0.12	)	$	(0.08	)
Diluted	$	0.06	$	(0.04	)	$	(0.12	)	$	(0.08	)
Weighted average common shares outstanding:
Basic	46,064,049		45,465,529			45,987,447			45,396,765
Diluted	46,573,691		45,465,529			45,987,447			45,396,765

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

AMERESCO, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(Unaudited)

	Three Months Ended June 30,
	2014			2013
Net income (loss)	$	2,719		$	(1,781	)
Other comprehensive (loss) income:
Unrealized (loss) gain from interest rate hedge, net of tax of $277 and $(614), respectively	(1,308		)	1,606
Foreign currency translation adjustments	971			(595		)
Total other comprehensive (loss) income	(337		)	1,011
Comprehensive income (loss)	$	2,382		$	(770	)
	Six Months Ended June 30,
	2014			2013
Net loss	$	(5,562	)	$	(3,705	)
Other comprehensive (loss) income:
Unrealized (loss) gain from interest rate hedge, net of tax of $545 and $(756), respectively	(1,804		)	2,531
Foreign currency translation adjustments	81			(1,547		)
Total other comprehensive (loss) income	(1,723		)	984
Comprehensive loss	$	(7,285	)	$	(2,721	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

AMERESCO, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDEDJUNE 30, 2014

(in thousands, except share amounts)

(Unaudited)

												Accumulated
							Additional					Other					Total
	Class A Common Stock			Class B Common Stock			Paid-in		Retained			Comprehensive			Non-controlling		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Earnings			Income			Interest		Equity
Balance, December 31, 2013	27,869,317	$	3	18,000,000	$	2	$	102,587	$	171,094		$	3,112		$	8	$	276,806
Exercise of stock options	287,109	—		—	—		887		—			—			—		887
Stock-based compensation expense	—	—		—	—		1,425		—			—			—		1,425
Unrealized loss from interest rate hedge, net	—	—		—	—		—		—			(1,804		)	—		(1,804		)
Foreign currency translation adjustment	—	—		—	—		—		—			81			—		81
Non-controlling interest	—	—		—	—		—		—			—			3		3
Net loss	—	—		—	—		—		(5,562		)	—			—		(5,562		)
Balance, June 30, 2014	28,156,426	$	3	18,000,000	$	2	$	104,899	$	165,532		$	1,389		$	11	$	271,836

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

AMERESCO, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	Six Months Ended June 30,
	2014			2013
				(Revised, see Note 2)
Cash flows from operating activities:
Net loss	$	(5,562	)	$	(3,705	)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation of project assets	7,430			6,879
Depreciation of property and equipment	1,677			1,610
Amortization of deferred financing fees	570			332
Amortization of intangible assets	1,878			1,789
Provision for bad debts	266			371
Unrealized gain on interest rate swaps	(1,197		)	(683		)
Stock-based compensation expense	1,425			1,336
Deferred income taxes	4,363			(2,871		)
Excess tax benefits from stock-based compensation arrangements	—			(297		)
Changes in operating assets and liabilities:
Restricted cash	624			(2,122		)
Accounts receivable	10,885			6,856
Accounts receivable retainage	6,494			(1,573		)
Federal ESPC receivable	(18,541		)	(13,785		)
Inventory	1,000			(2,047		)
Costs and estimated earnings in excess of billings	15,157			9,931
Prepaid expenses and other current assets	(2,538		)	(1,526		)
Project development costs	(1,664		)	(2,430		)
Other assets	(1,854		)	(759		)
Accounts payable, accrued expenses and other current liabilities	(6,898		)	(36,186		)
Billings in excess of cost and estimated earnings	(1,399		)	371
Other liabilities	1,082			(73		)
Income taxes payable	(7,264		)	(365		)
Cash flows from operating activities	5,934			(38,947		)
Cash flows from investing activities:
Purchases of property and equipment	(1,195		)	(1,540		)
Purchases of project assets	(10,970		)	(31,619		)
Grant awards received on project assets	3,727			1,580
Proceeds from sales of assets	—			7
Acquisitions, net of cash received	(4,850		)	(9,346		)
Cash flows from investing activities	$	(13,288	)	$	(40,918	)
The accompanying notes are an integral part of these condensed consolidated financial statements.

6

AMERESCO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)
(in thousands)
(Unaudited)
	Six Months Ended June 30,
	2014			2013
				(Revised, see Note 2)
Cash flows from financing activities:
Excess tax benefits from stock-based compensation arrangements	$	—		$	297
Payments of financing fees	(354		)	(504		)
Proceeds from exercises of options	887			1,250
Proceeds from senior secured credit facility	—			15,000
Proceeds from long-term debt financing	—			9,434
Proceeds from Federal ESPC projects	13,976			13,366
Non-controlling interest	3			41
Restricted cash	2,822			1,562
Payments on long-term debt	(10,923		)	(6,741		)
Cash flows from financing activities	6,411			33,705
Effect of exchange rate changes on cash	180			443
Net decrease in cash and cash equivalents	(763		)	(45,717		)
Cash and cash equivalents, beginning of period	17,171			63,348
Cash and cash equivalents, end of period	$	16,408		$	17,631
Supplemental disclosures of cash flow information:
Cash paid for interest	$	3,466		$	2,823
Cash paid for income taxes	$	1,758		$	901
Non-cash Federal ESPC settlement	$	12,350		$	44,739

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands, except share and per share amounts)

1. DESCRIPTION OF BUSINESS

Ameresco, Inc. (including its subsidiaries, the “Company”) was organized as a Delaware corporation on April 25, 2000. The Company is a provider of energy efficiency solutions for facilities throughout North America. The Company provides solutions, both products and services, that enable customers to reduce their energy consumption, lower their operating and maintenance costs and realize environmental benefits. The Company’s comprehensive set of services includes upgrades to a facility’s energy infrastructure and the construction and operation of small-scale renewable energy plants. It also sells certain photovoltaic (“PV”) equipment worldwide. The Company operates in the United States, Canada and Europe.

The Company is 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) the sale of energy from the Company’s generating assets; and 3) direct payment for photovoltaic equipment and systems.

The condensed consolidated financial statements as of June 30, 2014, and for the six months ended June 30, 2014 and 2013, are unaudited. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted. The interim condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation in conformity with GAAP. The interim condensed consolidated financial statements, and notes thereto, should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2013, and notes thereto, included in the Company’s annual report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on March 17, 2014. The results of operations for the interim periods should not be considered indicative of results to be expected for the full year.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reclassification

During the fourth quarter of 2013, the Company changed the manner in which advances received from third-party investors under agreements to finance certain energy savings performance contract (“ESPC”) projects with various Federal Government agencies were classified in the consolidated statements of cash flows. The Company concluded that as the transfers of receivables under these agreements do not qualify for sales accounting under accounting standards codification (“ASC”) 860, Transfers and Servicing, until final customer acceptance of the work, the advances from the investors would be better classified as financing cash flows rather than operating cash flows where they had been previously presented. The use of the cash received under these arrangements to pay project costs will continue to be classified as operating cash flows. Due to the manner in which the energy savings performance contracts with the investors are structured, operating cash flows now only reflect the ESPC contract expenditure outflows and do not reflect any inflows from the corresponding contract revenues. Upon acceptance of the project by the Federal customer the ESPC receivable and corresponding ESPC liability are removed from the Company’s consolidated balance sheet as a non-cash settlement.

The following is a summary of the impact of the change on the previously reported amounts in the consolidated statements of cash flows:

	Six Months Ended June 30, 2013
	As Reported			Adjustment			Revised
Cash flows from operating activities	$	(18,820	)	$	(20,127	)	$	(38,947	)
Cash flows from investing activities	$	(40,918	)	$	—		$	(40,918	)
Cash flows from financing activities	$	13,578		$	20,127		$	33,705

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Ameresco, Inc., its wholly owned subsidiaries and one subsidiary for which there is a minority shareholder. All significant intercompany accounts and transactions have been eliminated. Gains and losses from the translation of all foreign currency financial statements are recorded in accumulated other comprehensive income within stockholders’ equity. The Company prepares its financial statements in conformity with GAAP.

8

AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

(in thousands, except share and per share amounts)

Use of Estimates

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 date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The most significant estimates and assumptions used in these condensed consolidated financial statements relate to management’s estimates of final construction contract profit in accordance with accounting for long-term contracts, allowance for doubtful accounts, inventory reserves, project development costs, fair value of derivative financial instruments and stock-based awards, impairment of long-lived assets, income taxes and potential liability in conjunction with certain commitments and contingencies. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash includes cash on deposit, overnight repurchase agreements and amounts invested in highly liquid money market funds. Cash equivalents consist of short term investments with original maturities of three months or less. The Company maintains accounts with financial institutions and the balances in such accounts, at times, exceed Federally insured limits. This credit risk is divided among a number of financial institutions that management believes to be of high quality. The carrying amount of cash and cash equivalents approximates their fair value.

Restricted Cash

Restricted cash consists of cash held in an escrow account in association with construction draws for ESPCs, construction of project assets, cash collateralized letter of credit and operating and maintenance reserve accounts, as well as cash required under term loans to be maintained in debt service reserve accounts until all obligations have been indefeasibly paid in full.

Accounts Receivable

Accounts receivable are stated at the amount management expects to collect from outstanding balances. An allowance for doubtful accounts is provided for those accounts receivable considered to be uncollectible based upon historical experience and management’s evaluation of outstanding accounts receivable at the end of the period. Bad debts are written off against the allowance when identified.

Changes in the allowance for doubtful accounts are as follows:

	Six Months Ended June 30,
	2014			2013
Allowance for doubtful accounts, beginning of period	$	1,519		$	1,174
Charges to costs and expenses	266			371
Account write-offs and other	(199		)	(24		)
Allowance for doubtful accounts, end of period	$	1,586		$	1,521

Accounts Receivable Retainage

Accounts receivable retainage represents amounts due from customers, but where payments are withheld contractually until certain construction milestones are met. Amounts retained typically range from five percent to ten percent of the total invoice.

Inventory

Inventories, which consist primarily of PV solar panels, batteries and related accessories, are stated at the lower of cost (“first-in, first-out” method) or market (determined on the basis of estimated net realizable values). Provisions have been made to reduce the carrying value of inventory to the net realizable value.

Prepaid Expenses

Prepaid expenses consist primarily of short-term prepaid expenditures that will amortize within one year.

Federal ESPC Receivable

Federal ESPC receivable represents the amount to be paid by various Federal Government agencies for work performed and earned by the Company under specific ESPCs. The Company assigns certain of its rights to receive those payments to third-party lenders that provide construction and permanent financing for such contracts. The receivable is recognized as revenue as each project is constructed. Upon completion and acceptance of the project by the Government, typically within 24

9

AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

(in thousands, except share and per share amounts)

months of construction commencement, the assigned ESPC receivable and corresponding related project debt is eliminated from the Company’s condensed consolidated financial statements.

Project Development Costs

The Company capitalizes as project development costs only those costs incurred in connection with the development of energy projects, primarily direct labor, interest costs, outside contractor services, consulting fees, legal fees and travel, if incurred after a point in time where the realization of related revenue becomes probable. Project development costs incurred prior to the probable realization of revenue are expensed as incurred. The Company classifies as a current asset those project development efforts that are expected to proceed to construction activity in the twelve months that follow. The Company periodically reviews these balances and writes off any amounts where the realization of the related revenue is no longer probable.

Property and Equipment

Property and equipment consists primarily of office and computer equipment, and is recorded at cost. Major additions and improvements are capitalized as additions to the property and equipment accounts, while replacements, maintenance and repairs that do not improve or extend the life of the respective assets, are expensed as incurred. Depreciation and amortization of property and equipment are computed on a straight-line basis over the following estimated useful lives:

Asset Classification	Estimated Useful Life
Furniture and office equipment	Five years
Computer equipment and software costs	Three to five years
Leasehold improvements	Lesser of term of lease or five years
Automobiles	Five years
Land	Unlimited

Project Assets

Project assets consist of costs of materials, direct labor, interest costs, outside contract services and project development costs incurred in connection with the construction of small-scale renewable energy plants that the Company owns and the implementation of energy savings contracts. These amounts are capitalized and amortized over the lives of the related assets or the terms of the related contracts.

The Company capitalizes interest costs relating to construction financing during the period of construction. The interest capitalized is included in the total cost of the project at completion. There was no interest capitalized for the three months ended June 30, 2014. There was $250 of interest capitalized for the three months ended June 30, 2013. The amount of interest capitalized for the six months ended June 30, 2014 and 2013 was $395 and $715, respectively.

Routine maintenance costs are expensed in the current year’s consolidated statements of income (loss) to the extent that they do not extend the life of the asset. Major maintenance, upgrades and overhauls are required for certain components of the Company’s assets. In these instances, the costs associated with these upgrades are capitalized and are depreciated over the shorter of the remaining life of the asset or the period until the next required major maintenance or overhaul. Gains or losses on disposal of property and equipment are reflected in selling, general and administrative expenses in the consolidated statements of income (loss).

The Company evaluates its long-lived assets for impairment as events or changes in circumstances indicate the carrying value of these assets may not be fully recoverable. The Company evaluates recoverability of long-lived assets to be held and used by estimating the undiscounted future cash flows before interest associated with the expected uses and eventual disposition of those assets. When these comparisons indicate that the carrying value of those assets is greater than the undiscounted cash flows, the Company recognizes an impairment loss for the amount that the carrying value exceeds the fair value.

From time to time, the Company applies for and receives cash grant awards from the U.S. Treasury Department (the “Treasury”) under Section 1603 of the American Recovery and Reinvestment Act of 2009 (the “Act”). The Act authorized the Treasury to make payments to eligible persons who place in service qualifying renewable energy projects. The grants are paid in lieu of investment tax credits. All of the cash proceeds from the grants were used and recorded as a reduction in the cost basis of the applicable project assets. If the Company disposes of the property, or the property ceases to qualify as specified

10

AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

(in thousands, except share and per share amounts)

energy property, within five years from the date the property is placed in service, then a prorated portion of the Section 1603 payment must be repaid.

The Company received$3,727inSection 1603 grants during the three and six months ended June 30, 2014. The Company received$289 and $1,580 in Section 1603 grants during the three and six months ended June 30, 2013, respectively.

For tax purposes, the Section 1603 payments are not included in Federal and certain state taxable income and the basis of the property is reduced by 50% of the payment received. Deferred grant income of $9,118 and $8,163 recorded in the accompanying consolidated balance sheets as of June 30, 2014 and December 31,2013, respectively, represents the benefit of the basis difference to be amortized to income tax expense over the life of the related property.

Deferred Financing Fees

Deferred financing fees relate to the external costs incurred to obtain financing for the Company. Deferred financing fees are amortized over the respective term of the financing using the effective interest method, with the exception of the Company’s revolving credit facility, as discussed in Note 9, for which deferred financing fees are amortized on a straight line basis over the term of the agreement.

Goodwill and Intangible Assets

The Company has classified as goodwill the amounts paid in excess of fair value of the net assets (including tax attributes) of companies acquired in purchase transactions. The Company has recorded intangible assets related to customer contracts, customer relationships, non-compete agreements, trade names and technology, each with defined useful lives. The Company assesses the impairment of goodwill and intangible assets that have indefinite lives on an annual basis (December 31^st) and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The Company would record an impairment charge if such an assessment were to indicate that the fair value of such assets was less than their carrying values. Judgment is required in determining whether an event has occurred that may impair the value of goodwill or identifiable intangible assets.

Factors that could indicate that an impairment may exist include significant underperformance relative to plan or long-term projections, significant changes in business strategy, significant negative industry or economic trends or a significant decline in the base price of the Company’s publicly traded stock for a sustained period of time. Although the Company believes goodwill and intangible assets are appropriately stated in the accompanying condensed consolidated financial statements, changes in strategy or market conditions could significantly impact these judgments and require an adjustment to the recorded balance.

Other Assets

Other assets consist primarily of notes and contracts receivable due to the Company from various customers and non-current restricted cash. Other assets also include the fair value of derivatives and the non-current portion of project development costs.

Asset Retirement Obligations

The Company recognizes a liability for the fair value of required asset retirement obligations (“AROs”) when such obligations are incurred. The liability is estimated on a number of assumptions requiring management’s judgment, including equipment removal costs, site restoration costs, salvage costs, cost inflation rates and discount rates and is credited to its projected future value over time. The capitalized asset is depreciated using the convention of depreciation of plant assets. Upon satisfaction of the ARO conditions, any difference between the recorded ARO liability and the actual retirement cost incurred is recognized as an operating gain or loss in the consolidated statements of income (loss). As of June 30, 2014 and December 31,2013, the Company had no AROs.

Federal ESPC Liabilities

Federal ESPC liabilities represent the advances received from third-party investors under agreements to finance certain energy savings performance contract projects with various Federal Government agencies. Upon completion and acceptance of the project by the Government, typically within 24 months of construction commencement, the ESPC receivable from the Government and corresponding related ESPC liability is eliminated from the Company’s consolidated balance sheet. Until recourse to the Company ceases for the ESPC receivables transferred to the investor, upon final acceptance of the work by the Government customer, the Company remains the primary obligor for financing received.

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(in thousands, except share and per share amounts)

Other Liabilities

Other liabilities consist primarily of deferred revenue related to multi-year operation and maintenance contracts which expire as late as 2031. Other liabilities also include the fair value of interest rate swaps.See Note 7 for additional disclosures.

Revenue Recognition

The Company derives revenues from energy efficiency and renewable energy products and services. Energy efficiency products and services include the design, engineering, and installation of equipment and other measures to improve the efficiency, and control the operation, of a facility’s energy infrastructure. Renewable energy products and services include the construction of small-scale plants that produce electricity, gas, heat or cooling from renewable sources of energy, the sale of such electricity, gas, heat or cooling from plants that the Company owns, and the sale and installation of solar energy products and systems.

Revenue from the installation or construction of projects is recognized on a percentage-of-completion basis. The percentage-of-completion for each project is determined on an actual cost-to-estimated final cost basis. Maintenance revenue is recognized as related services are performed. In accordance with industry practice, the Company includes in current assets and liabilities the amounts of receivables related to construction projects realizable and payable over a period in excess of one year. The revenue associated with contract change orders is recognized only when the authorization for the change order has been properly executed and the work has been performed.

When the estimate on a contract indicates a loss, or claims against costs incurred reduce the likelihood of recoverability of such costs, the Company records the entire expected loss immediately, regardless of the percentage of completion.

Billings in excess of cost and estimated earnings represents advanced billings on certain construction contracts. Costs and estimated earnings in excess of billings represent certain amounts under customer contracts that were earned and billable but not invoiced.

The Company sells certain products and services in bundled arrangements, where multiple products and/or services are involved. The Company divides bundled arrangements into separate deliverables and revenue is allocated to each deliverable based on the relative selling price. The relative selling price is determined using third party evidence or management’s best estimate of selling price.

The Company recognizes revenue from the sale and delivery of products, including the output from renewable energy plants, when produced and delivered to the customer, in accordance with specific contract terms, provided that persuasive evidence of an arrangement exists, the Company’s price to the customer is fixed or determinable and collectability is reasonably assured.

The Company recognizes revenue from operations and maintenance (“O&M”) contracts, consulting services and enterprise energy management services as the related services are performed.

For a limited number of contracts under which the Company receives additional revenue based on a share of energy savings, such additional revenue is recognized as energy savings are generated.

Cost of Revenues

Cost of revenues include the cost of labor, materials, equipment, subcontracting and outside engineering that are required for the development and installation of projects, as well as preconstruction costs, sales incentives, associated travel, inventory obsolescence charges, amortization of intangible assets related to customer contracts and, if applicable, costs of procuring financing. A majority of the Company’s contracts have fixed price terms; however, in some cases the Company negotiates protections, such as a cost-plus structure, to mitigate the risk of rising prices for materials, services and equipment.

Cost of revenues also include the costs of maintaining and operating the small-scale renewable energy plants that the Company owns, including the cost of fuel (if any) and depreciation charges.

Income Taxes

The Company provides for income taxes based on the liability method. The Company provides for deferred income taxes based on the expected future tax consequences of differences between the financial statement basis and the tax basis of assets and liabilities calculated using the enacted tax rates in effect for the year in which the differences are expected to be reflected in the tax return.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

(in thousands, except share and per share amounts)

The Company accounts for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors that include, but are not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. The Company evaluates uncertain tax positions on a quarterly basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions.

The Company’s liabilities for uncertain tax positions can be relieved only if the contingency becomes legally extinguished through either payment to the taxing authority or the expiration of the statute of limitations, the recognition of the benefits associated with the position meet the “more-likely-than-not” threshold or the liability becomes effectively settled through the examination process.

The Company considers matters to be effectively settled once the taxing authority has completed all of its required or expected examination procedures, including all appeals and administrative reviews; the Company has no plans to appeal or litigate any aspect of the tax position; and the Company believes that it is highly unlikely that the taxing authority would examine or re-examine the related tax position. The Company also accrues for potential interest and penalties, related to unrecognized tax benefits in income tax expense. See Note 4 for additional information on the Company’s income taxes.

Foreign Currency

The local currency of the Company’s foreign operations is considered the functional currency of such operations. All assets and liabilities of the Company’s foreign operations are translated into U.S. dollars at period-end exchange rates. Income and expense items are translated at average exchange rates prevailing during the period. Translation adjustments are accumulated as a separate component of stockholders’ equity. Foreign currency translation gains and losses are reported in the consolidated statements of comprehensive income (loss). Foreign currency transaction gains and losses are reported in the consolidated statements of income (loss).

Financial Instruments

Financial instruments consist of cash and cash equivalents, restricted cash, accounts and notes receivable, long-term contract receivables, accounts payable, accrued expenses, equity-based liabilities, short- and long-term debt and interest rate swaps. The estimated fair value of cash and cash equivalents, restricted cash, accounts and notes receivable, long-term contract receivables, accounts payable, accrued expenses and equity-based liabilities approximates their carrying value. See below and Note 6 for additional information regarding the Company’s fair value measurements.

Fair Value Measurements

The Company follows the guidance related to fair value measurements for all of its non-financial assets and non-financial liabilities, except for those recognized at fair value in the financial statements at least annually. These assets include goodwill and long-lived assets measured at fair value for impairment assessments, and non-financial assets and liabilities initially measured at fair value in a business combination.

Because of their short maturity, the carrying amounts of cash and cash equivalents, accounts and notes receivable, accounts payable, accrued expenses and short-term debt approximate fair value. The carrying value of long-term variable-rate debt approximates fair value. As of June 30, 2014, the fair value of the Company’s fixed-rate long-term debt exceeds its carrying value by approximately $103. Fair value of the Company’s debt is based on quoted market prices or on rates available to the Company for debt with similar terms and maturities.

The Company accounts for its interest rate swaps as derivative financial instruments in accordance with the related guidance. Under this guidance, derivatives are carried on the Company’s consolidated balance sheets at fair value. The fair value of the Company’s interest rate swaps are determined based on observable market data in combination with expected cash flows for each instrument.

See Note 6 for additional information related to fair value measurements.

Stock-Based Compensation Expense

Stock-based compensation expense results from the issuance of shares of restricted common stock and grants of stock options to employees, directors, outside consultants and others. The Company recognizes the costs associated with restricted

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

(in thousands, except share and per share amounts)

stock and option grants using the fair value recognition provisions of ASC 718, Compensation - Stock Compensation on a straight-line basis over the vesting period of the awards.

Stock-based compensation expense is recognized based on the grant-date fair value. The Company estimates the fair value of the stock-based awards, including stock options, using the Black-Scholes option-pricing model. Determining the fair value of stock-based awards requires the use of highly subjective assumptions, including the fair value of the common stock underlying the award, the expected term of the award and expected stock price volatility.

The assumptions used in determining the fair value of stock-based awards represent management’s estimates, which involve inherent uncertainties and the application of management judgment. As a result, if factors change, and different assumptions are employed, the stock-based compensation could be materially different in the future. The risk-free interest rates are based on the U.S. Treasury yield curve in effect at the time of grant, with maturities approximating the expected life of the stock options.

The Company has no history of paying dividends. Additionally, as of each of the grant dates, there was no expectation that the Company would pay dividends over the expected life of the options. The expected life of the awards is estimated using historical data and management’s expectations. Because there was no public market for the Company’s common stock prior to the Company’s initial public offering, management lacked company-specific historical and implied volatility information. Therefore, estimates of expected stock volatility were based on that of publicly traded peer companies, and it is expected that the Company will continue to use this methodology until such time as there is adequate historical data regarding the volatility of the Company’s publicly traded stock price.

The Company is required to recognize compensation expense for only the portion of options that are expected to vest. Actual historical forfeiture rate of options is based on employee terminations and the number of shares forfeited. This data and other qualitative factors are considered by the Company in determining the forfeiture rate used in recognizing stock compensation expense. If the actual forfeiture rate varies from historical rates and estimates, additional adjustments to compensation expense may be required in future periods. If there are any modifications or cancellations of the underlying unvested securities or the terms of the stock option, it may be necessary to accelerate, increase or cancel any remaining unamortized stock-based compensation expense.

For the three months ended June 30, 2014 and 2013, the Company recorded stock-based compensation expense of $707 and $665, respectively, in connection with stock-based payment awards. For the six months ended June 30, 2014 and 2013, the Company recorded stock-based compensation expense of $1,425 and $1,336, respectively, in connection with stock-based payment awards. The compensation expense is allocated between cost of revenues and selling, general and administrative expenses in the accompanying consolidated statements of income (loss) based on the salaries and work assignments of the employees holding the options. As of June 30, 2014, there was $4,867 of unrecognized compensation expense related to non-vested stock option awards that is expected to be recognized over a weighted-average period of 3.1 years.

The Company also accounts for equity instruments issued to non-employee directors and consultants at fair value. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the date on which the counterparty’s performance is complete. No awards to individuals who were not either an employee or director of the Company occurred during the six months ended June 30, 2014 or during the year ended December 31,2013.

Derivative Financial Instruments

In the normal course of business, the Company utilizes derivatives contracts as part of its risk management strategy to manage exposure to market fluctuations in interest rates. These instruments are subject to various credit and market risks. Controls and monitoring procedures for these instruments have been established and are routinely reevaluated. Credit risk represents the potential loss that may occur because a party to a transaction fails to perform according to the terms of the contract. The measure of credit exposure is the replacement cost of contracts with a positive fair value. The Company seeks to manage credit risk by entering into financial instrument transactions only through counterparties that the Company believes to be creditworthy.

Market risk represents the potential loss due to the decrease in the value of a financial instrument caused primarily by changes in interest rates. The Company seeks to manage market risk by establishing and monitoring limits on the types and

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

(in thousands, except share and per share amounts)

degree of risk that may be undertaken. As a matter of policy, the Company does not use derivatives for speculative purposes. The Company considers the use of derivatives with all financing transactions to mitigate risk.

The Company recognizes cash flows from derivative instruments as operating activities in the consolidated statements of cash flows. The effective portion of changes in fair value on interest rate swaps designated as cash flow hedges are recognized in the Company’s consolidated statements of comprehensive income (loss). The ineffective portion of changes in fair value on interest rate swaps designated as hedges and changes in fair value on interest rate swaps not designated as hedges are recognized in the Company’s consolidated statements of income (loss).

During 2007, the Company entered into twofifteen-year interest rate swap contracts under which the Company agreed to pay an amount equal to a specified fixed rate of interest times a notional principal amount, and to in turn receive an amount equal to a specified variable rate of interest times the same notional principal amount. The swaps cover initial notional amounts of $13,081 and $3,256, each a variable rate note at fixed interest rates of 5.4% and 5.3%, respectively, and expire in March 2024 and February 2021, respectively. These interest rate swaps qualified, but were not designated, as cash flow hedges until April 1, 2010. Since April 2010, they have been designated as hedges.

In March 2010, the Company entered into a fourteen-year interest rate swap contract under which the Company agreed to pay an amount equal to a specified fixed rate of interest times a notional amount, and to in turn receive an amount equal to a specified variable rate of interest times the same notional principal amount. The swap covers an initial notional amount of approximately $27,900 variable rate note at a fixed interest rate of 6.99% and expires in December 2024. This swap was designated as a hedge in March 2013. During the second quarter of 2014 this swap was de-designated and re-designated as a hedge as a result of a partial pay down of the associated hedged debt principal. As a result $566 was reclassified from accumulated other comprehensive income and recorded as a reduction to other expense, net during the three months ended June 30, 2014.

In July 2011, the Company entered into a five-year interest rate swap contract under which the Company agreed to pay an amount equal to a specified fixed rate of interest times a notional amount, and to in turn receive an amount equal to a specified variable rate of interest times the same notional principal amount. The swap covers an initial notional amount of $38,571 variable rate note at a fixed interest rate of 1.965% and expires in June 2016. This interest rate swap has been designated as a hedge since inception.

In October 2012, the Company entered into twoeight-year interest rate swap contracts under which the Company agreed to pay an amount equal to a specified fixed rate of interest times a notional amount, and to in turn receive an amount equal to a specified variable rate of interest times the same notional principal amount. The swaps cover an initial notional amount of $16,750 variable rate note at a fixed interest rate of 1.71%. This notional amount increased to $42,247 on September 30, 2013 and expires in March 2020. This interest rate swap has been designated as a hedge since inception.

In October 2012, the Company also entered into twoeight-year forward starting interest rate swap contracts under which the Company agreed to pay an amount equal to a specified fixed rate of interest times a notional amount, and to in turn receive an amount equal to a specified variable rate of interest times the same notional principal amount. The swaps cover an initial notional amount of $25,377 variable rate note at a fixed interest rate of 3.70%, with an effective date of March 31, 2020, and expires in June 2028. This interest rate swap has been designated as a hedge since inception.

See Notes 6 and 7 for additional information on the Company’s derivative instruments.

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AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

(in thousands, except share and per share amounts)

Earnings Per Share

Basic earnings per share is calculated using the Company’s weighted-average outstanding common shares, including vested restricted shares. When the effects are not anti-dilutive, diluted earnings per share is calculated using: the weighted-average outstanding common shares; the dilutive effect of convertible preferred stock, under the “if converted” method; and the treasury stock method with regard to warrants and stock options; all as determined under the treasury stock method.

	Three Months Ended June 30,					Six Months Ended June 30,
	2014		2013			2014			2013
Net income (loss)	$	2,719	$	(1,781	)	$	(5,562	)	$	(3,705	)
Basic weighted-average shares outstanding	46,064,049		45,465,529			45,987,447			45,396,765
Effect of dilutive securities:
Stock options	509,642		—			—			—
Diluted weighted-average shares outstanding	46,573,691		45,465,529			45,987,447			45,396,765

The Company excluded 716,695 and 987,663 potentially dilutive shares from the calculation of diluted earnings per share for the six months ended June 30, 2014 and 2013, respectively, as the effect would be anti-dilutive due to the Company’s net loss position in both periods.

For the three months ended June 30, 2014 and 2013, the total number of shares of common stock related to stock options excluded from the calculation of dilutive shares, as the effect would be anti-dilutive, was 1,811,928 and 2,475,556, respectively. For the six months ended June 30, 2014 and 2013, the total number of shares of common stock related to stock options excluded from the calculation of dilutive shares, as the effect would be anti-dilutive, was 1,781,928 and 2,532,853, respectively.

Variable Interest Entities

Certain contracts are executed jointly through partnership and joint venture arrangements with unrelated third parties. Generally, these arrangements are characterized by a 50 percent or less ownership interest that requires only a small initial investment. The arrangements are often formed for the single business purpose of executing a specific project and allow the Company to share risks and/or secure specialty skills required for project execution.

        The Company evaluates each partnership and joint venture at inception to determine if it qualifies as a variable interest entity (“VIE”) under ASC 810, Consolidation. A variable interest entity is an entity used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors who are not required to provide sufficient financial resources for the entity to support its activities without additional subordinated financial support. Upon the occurrence of certain events outlined in ASC 810, the Company reassesses its initial determination of whether the partnership or joint venture is a VIE.

        The Company also evaluates whether it is the primary beneficiary of each VIE and consolidates the VIE if the Company has both (a) the power to direct the economically significant activities of the entity and (b) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. The Company considers the contractual agreements that define the ownership structure, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights and board representation of the respective parties in determining whether it qualifies as the primary beneficiary. The Company also considers all parties that have direct or implicit variable interests when determining whether it is the primary beneficiary. When the Company is determined to be the primary beneficiary, the VIE is consolidated. As required by ASC 810, management's assessment of whether the Company is the primary beneficiary of a VIE is continuously performed.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance in this ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The guidance in this ASU supersedes the revenue recognition requirements in ASC 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, this ASU supersedes some cost guidance included in ASC 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss

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(in thousands, except share and per share amounts)

on the transfer of nonfinancial assets that are not in a contract with a customer are amended to be consistent with the guidance on recognition and measurement in this ASU. For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Retrospective application of the amendments in this ASU are required. The new guidance must be adopted using either a full retrospective approach for all periods presented in the period of adoption (with some limited relief provided) or a modified retrospective approach. Early application is not permitted under GAAP. The Company is currently assessing the impact of this ASU on its consolidated financial statements.

3. GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying value of goodwill attributable to each reportable segment are as follows:

	U.S. Regions		U.S. Federal		Canada			Small-Scale Infrastructure		Other		Total
Balance, December 31, 2013	$	24,759	$	3,375	$	4,124		$	—	$	20,816	$	53,074
Goodwill acquired during the year	—		—		—			—		2,575		2,575
Fair value adjustment(1)	—		—		—			—		641		641
Currency effects	—		—		(13		)	—		183		170
Balance, June 30, 2014	$	24,759	$	3,375	$	4,111		$	—	$	24,215	$	56,460
Accumulated Goodwill Impairment Balance, December 31, 2013	$	—	$	—	$	(1,016	)	$	—	$	—	$	(1,016	)
Accumulated Goodwill Impairment Balance, June 30, 2014	$	—	$	—	$	(1,016	)	$	—	$	—	$	(1,016	)

(1) Fair value adjustment represents a final purchase accounting adjustment to decrease the recorded fair value of certain acquired intangible assets totaling $801, net of a $160 deferred tax liability adjustment, related to the Company’s prior year acquisition of The Energy Services Partnership Limited and ESP Response Limited (together “ESP”).

Separable intangible assets that are not deemed to have indefinite lives are amortized over their useful lives. The Company annually assesses whether a change in the life over which the Company’s assets are amortized is necessary, or more frequently if events or circumstances warrant. No changes to useful lives were made during the six months ended June 30, 2014 or for the year ended December 31,2013.

Acquired intangible assets other than goodwill that are subject to amortization include customer contracts, customer relationships, non-compete agreements, technology and trade names. Customer contracts are amortized ratably over the period of the acquired customer contracts ranging in periods from approximately one to five years. All other acquired intangible assets are amortized over periods ranging from approximately four to fifteen years, as defined by the nature of the respective intangible asset. Intangible assets acquired during the six months ended June 30, 2014 consisted of customer contracts, customer relationships, non-compete assets and technology which were assigned a weighted average useful life of 10.6 years.

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(in thousands, except share and per share amounts)

The gross carrying amount and accumulated amortization of intangible assets are as follows:

	As of June 30,		As of December 31,
	2014		2013
Gross Carrying Amount
Customer contracts	$	7,724	$	7,684
Customer relationships	9,239		8,200
Non-compete agreements	3,296		3,230
Technology	2,844		2,386
Trade names	556		556
	23,659		22,056
Accumulated Amortization
Customer contracts	5,983		5,349
Customer relationships	3,565		2,923
Non-compete agreements	2,336		1,872
Technology	1,523		1,299
Trade names	400		360
	13,807		11,803
Intangible assets, net	$	9,852	$	10,253

Amortization expense related to customer contracts is included in cost of revenues in the consolidated statements of income (loss). Amortization expense related to all other acquired intangible assets is included in selling, general and administrative expenses in the consolidated statements of income (loss). Amortization expense for the three months ended June 30, 2014 and 2013 related to customer contracts was $363 and $227, respectively. Amortization expense for the six months ended June 30, 2014 and 2013 related to customer contracts was $614 and $454, respectively. Amortization expense for the three months ended June 30, 2014 and 2013 related to all other acquired intangible assets was $697 and $671, respectively. Amortization expense for the six months ended June 30, 2014 and 2013 related to all other acquired intangible assets was $1,264 and $1,335, respectively.

4. INCOME TAXES

The provision (benefit) for income taxes was $267 and $(577), for the three months ended June 30, 2014 and 2013, respectively. The provision (benefit) for income taxes was $31 and $(1,200), for the six months ended June 30, 2014 and 2013, respectively. The estimated 2014 effective tax rate changed to 8.9% for the three months ended June 30, 2014 from a 24.5% estimated annual effective tax rate for the three months ended June 30, 2013. For the six months ended June 30, 2014 the estimated 2014 effective tax rate was 0.2%, before discrete items, compared to a 24.5% estimated annual effective tax rate for the six months ended June 30, 2013.

At June 30, 2014 and December 31,2013, the Company had approximately $9,200 of total gross unrecognized tax benefits. Of the total gross unrecognized tax benefits as of June 30, 2014 and December 31,2013, approximately $5,500 (net of the Federal benefit on state amounts) represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods.

5. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company is involved in a variety of claims and other legal proceedings generally incidental to its normal business activities. While the outcome of any of these proceedings cannot be accurately predicted, the Company does not believe the ultimate resolution of any of these existing matters would have a material adverse effect on its financial condition or results of operations.

Solar Tariff Contingency

In October 2012, the U.S. Department of Commerce (“Commerce”) announced its final determination in the anti-dumping and countervailing duty investigations of imports of solar cells manufactured in the People’s Republic of China (“PRC”),

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(in thousands, except share and per share amounts)

including solar modules containing such cells. Commerce’s final determination confirmed its previously published anti-dumping duty of 249.96%, in the case of the Company, and increased its countervailing duty from 3.61% to 15.24%; both duties are applied to the value of imports of solar modules containing PRC cells. Under Commerce’s determination, the anti-dumping and countervailing duties both were to apply retroactively 90 days from the date each preliminary decision was published to February 25, 2012 and December 21, 2011, respectively. On November 7, 2012, the International Trade Commission announced its final determination upholding the duties, but eliminating the retroactive periods. Since early 2012, the Company has been importing solar modules containing PRC cells, though it ceased doing so in July 2012 in response to these duties. The Company is monitoring and evaluating its alternatives for obtaining a separate and reduced anti-dumping duty rate. Depending on whether the maximum anti-dumping duty rate of 249.96% or some lower rate applies, the Company may be liable for combined duties of up to approximately $3,300.

The Company has established a reserve reflecting its current estimate of its ultimate exposure to these assessments.

6. FAIR VALUE MEASUREMENT

The Company recognizes its financial assets and liabilities at fair value on a recurring basis (at least annually). Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Three levels of inputs that may be used to measure fair value are as follows:

Level 1:  Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2:  Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3:  Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

The following table presents the input level used to determine the fair values of the Company’s financial instruments measured at fair value on a recurring basis:

		Fair Value as of
		June 30,		December 31,
	Level	2014		2013
Assets:
Interest rate swap instruments	2	$	176	$	1,553
Liabilities:
Interest rate swap instruments	2	$	4,042	$	4,268

The fair value of the Company’s interest rate swaps was determined using a cash flow analysis on the expected cash flow of the contract in combination with observable market-based inputs, including interest rate curves and implied volatilities. As part of this valuation, the Company considered the credit ratings of the counterparties to the interest rate swaps to determine if a credit risk adjustment was required.

The fair value of financial instruments is determined by reference to observable market data and other valuation techniques as appropriate. The only category of financial instruments where the difference between fair value and recorded book value is notable is long-term debt. At June 30, 2014, the fair value of the Company’s long-term debt was estimated using discounted cash flows analysis, based on quoted market prices or on rates available to the Company for debt with similar terms and maturities, which are considered to be level two inputs. There were no transfers in or out of level two for the three month period ended June 30, 2014. Based on the analysis performed, the fair value and the carrying value of the Company’s long-term debt are as follows:

	As of June 30, 2014				As of December 31, 2013
	Fair Value		Carrying Value		Fair Value		Carrying Value
Long-term debt value	$	105,342	$	105,239	$	114,776	$	116,196

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(in thousands, except share and per share amounts)

The Company is also required periodically to measure certain other assets at fair value on a nonrecurring basis, including long-lived assets, goodwill and other intangible assets. The Company determined the fair value used in its annual impairment analysis with its own discounted cash flow analysis. The Company has determined the inputs used in such analysis as Level 3 inputs. The Company did not record any impairment charges on goodwill or other intangible assets as no significant events requiring non-financial assets and liabilities to be measured at fair value occurred for the six months ended June 30, 2014.

7. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Information about the fair value amounts of the Company’s derivative instruments is as follows:

	Derivatives as of
	June 30, 2014			December 31, 2013
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives Designated as Hedging Instruments:
Interest rate swap contracts	Other assets	$	176	Other assets	$	1,553
Interest rate swap contracts	Other liabilities	$	4,042	Other liabilities	$	4,268

The following table presents information about the effects of the Company’s derivative instruments on the consolidated statements of income (loss) and consolidated statements of comprehensive income (loss):

	Location of (Gain) Loss Recognized in Income (Loss)	Amount of (Gain) Loss Recognized in Income (Loss)
		Three Months Ended June 30,						Six Months Ended June 30,
		2014			2013			2014			2013
Derivatives Designated as Hedging Instruments:
Interest rate swap contracts	Other expenses, net	$	(1,068	)	$	(864	)	$	(1,197	)	$	(987	)
Derivatives Not Designated as Hedging Instruments:
Interest rate swap contracts	Other expenses, net	$	—		$	—		$	—		$	(266	)

	Six Months Ended June 30, 2014
	Loss Recognized in Accumulated Other Comprehensive Income		Interest Expense Reclassified from Accumulated Other Comprehensive Income into Other Expenses, Net
Derivatives Designated as Hedging Instruments:
Interest rate swap contracts	$	2,349	$	364

8. BUSINESS SEGMENT INFORMATION

The Company reports results under ASC 280, Segment Reporting. The Company’s reportable segments are U.S. Regions, U.S. Federal, Canada and Small-Scale Infrastructure. The Company’s U.S. Regions, U.S. Federal and Canada segments offer energy efficiency products and services, which include the design, engineering and installation of equipment and other measures to improve the efficiency and control the operation of a facility’s energy infrastructure; renewable energy products and services, which include the construction of small-scale plants for customers that produce electricity, gas, heat or cooling from renewable sources of energy; and O&M services. The Company’s Small-Scale Infrastructure segment sells electricity, processed LFG, heat or cooling produced from renewable sources of energy from small-scale plants that the Company owns. The “All Other” category offers enterprise energy management services, consulting services and the sale and installation of solar PV energy products and systems. These segments do not include results of other activities, such as corporate operating expenses not specifically allocated to the segments.

The reports of the Company’s chief operating decision maker do not include assets at the operating segment level.

20

AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

(in thousands, except share and per share amounts)

An analysis of the Company’s business segment information and reconciliation to the condensed consolidated financial statements is as follows:

	U.S. Regions		U.S. Federal			Canada			Small-Scale Infrastructure		All Other			Total Consolidated
Three Months Ended June 30, 2014
Revenues	$	62,785	$	24,791		$	19,768		$	14,206	$	21,008		$	142,558
Interest income	—		—			—			11		—			11
Interest expense	—		—			258			508		—			766
Depreciation and amortization of intangible assets	333		292			414			3,289		880			5,208
Unallocated corporate activity	—		—			—			—		—			(6,935		)
Income (loss) before taxes, excluding unallocated corporate activity	6,318		2,265			(1,710		)	3,143		(95		)	9,921
Three Months Ended June 30, 2013
Revenues	68,100		12,745			16,125			10,230		19,052			126,252
Interest income	—		—			12			1		2			15
Interest expense	—		—			514			499		—			1,013
Depreciation and amortization of intangible assets	446		288			430			2,437		549			4,150
Unallocated corporate activity	—		—			—			—		—			(6,396		)
Income (loss) before taxes, excluding unallocated corporate activity	4,679		(781		)	(1,204		)	1,489		(145		)	4,038
Six Months Ended June 30, 2014
Revenues	103,791		36,141			36,067			25,355		41,935			243,289
Interest income	—		—			1			23		—			24
Interest expense	—		—			670			1,277		—			1,947
Depreciation and amortization of intangible assets	647		564			820			6,247		1,735			10,013
Unallocated corporate activity	—		—			—			—		—			(15,003		)
Income (loss) before taxes, excluding unallocated corporate activity	6,602		2,265			(3,069		)	3,815		(141		)	9,472
Six Months Ended June 30, 2013
Revenues	122,798		25,708			29,785			20,574		37,523			236,388
Interest income	—		—			26			1		2			29
Interest expense	—		—			672			859		—			1,531
Depreciation and amortization of intangible assets	909		525			784			5,894		1,086			9,198
Unallocated corporate activity	—		—			—			—		—			(12,625		)
Income (loss) before taxes, excluding unallocated corporate activity	$	6,791	$	(120	)	$	(1,934	)	$	2,627	$	356		$	7,720

21

AMERESCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

(in thousands, except share and per share amounts)

9. LONG-TERM DEBT

Variable-Rate Construction and Term Loans

In October 2012, the Company entered into a credit and guaranty agreement with two banks for use in providing limited recourse financing for certain of its landfill gas to energy and solar PV projects. The credit and guaranty agreement provides for a $47,234 construction-to-term loan credit facility and bears interest at a variable rate. At June 30, 2014, $44,053 was outstanding under construction and term loans. The weighted average rate for these loans at June 30, 2014 was 3.240%.

Senior Secured Credit Facility - Revolver and Term Loan

On June 30, 2011, the Company amended and restated the credit and security agreement and continues as the sole borrower under the agreement. The amended and restated facility extends and expands the Company’s prior facility. The facility consists of a $60,000 revolving credit facility and a $40,000 term loan. The revolving credit facility may be increased up to an additional $25,000 at the Company’s option, if the lenders agree. The facility matures on June 30, 2016, and all remaining unpaid amounts outstanding under the facility will be due at that time. At June 30, 2014, $22,857 was outstanding under the term loan and no amounts were outstanding under the revolving credit facility. Payments on the term loan are due in quarterly principal installments of $1,429 together with accrued but unpaid interest, with all remaining unpaid principal amounts due June 30, 2016. The obligations under the facility are guaranteed by certain of the Company’s subsidiaries and are secured by a lien on all of the assets of the Company other than renewable energy projects that the Company owns and that are financed by others. The agreement contains certain financial covenants. In November 2013, the Company amended the senior credit facility to reduce the trailing four quarters minimum required EBITDA amount to $30,000 from $40,000.

On March 12, 2014, the Company amended the senior secured credit facility as follows: (i) to increase the margins added to Bank of America’s prime rate or the one-, two- three- or six-month London interbank deposit rate, as applicable, in determining the interest rate by 25 basis points to 0.50% and 2.00%, respectively; (ii) to waive compliance with the minimum EBITDA covenant for the four consecutive fiscal quarters ended December 31, 2013; (iii) to reduce the required minimum EBITDA amount to $16,500 for the four consecutive fiscal quarters ended March 31, 2014, $22,000 for the four consecutive fiscal quarters ended June 30, 2014, $24,000 for the four consecutive fiscal quarters ended September 30, 2014, and $27,000 for the four consecutive fiscal quarters ended December 31, 2014 and thereafter; (iv) to increase the maximum ratio of total funded debt to EBITDA as of the end of each fiscal quarter to 2.5 to 1.0 for March 31, 2014 and 2.25 to 1.0 for June 30, 2014, returning to 2.0 to 1.0 for September 30, 2014 and thereafter; and (v) to reduce the minimum ratio of cash flow to debt service to 1.25 to 1.0 for the four fiscal quarters ended March 31, 2014, returning to 1.5 to 1.0 for the four fiscal quarters ended June 30, 2014 and thereafter.

For purposes of the Company’s senior secured facility: EBITDA excludes the results of certain renewable energy projects that the Company owns and for which financing from others remains outstanding; total funded debt includes amounts outstanding under both the term loan and revolver portions of the senior secured credit facility plus other indebtedness, but excludes non-recourse indebtedness of project company subsidiaries; cash flow is based on EBITDA as used in the facility, less capital expenditures (other than by project company subsidiaries that are not guarantors under the facility), certain taxes, and dividends and other distributions; and debt service includes principal and interest payments on the indebtedness included in total funded debt other than principal payments on the revolver portion of the facility.

At June 30, 2014 the Company was in compliance with all financial covenants.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2013 included in our Annual Report on Form 10-K for the year ended December 31, 2013 filed on March 17, 2014 with the U.S. Securities and Exchange Commission (“SEC”). This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements, other than statements of historical fact, including statements that refer to projections regarding our future financial performance, our anticipated growth and trends in our businesses, our future capital needs and capital expenditures; our future market position and competitive changes in the marketplace for our services; our ability to integrate new technologies into our services; our ability to access credit or capital markets; our reliance on subcontractors; potential acquisitions or divestitures; the continued availability of key personnel; and other characterizations of future events or circumstances are forward-looking statements. These statements are often, but not exclusively, identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” “target,” “project,” “predict” or “continue,” and similar expressions or variations. These forward-looking statements are based on current expectations and assumptions that are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially and adversely from future results expressed or implied by such forward-looking statements. Risks, uncertainties and factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors,” set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2013 and elsewhere in this Report. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. Subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we undertake no obligation to do so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

Overview

Ameresco is a leading provider of energy efficiency solutions for facilities throughout North America. We provide solutions that enable customers to reduce their energy consumption, lower their operating and maintenance costs and realize environmental benefits. Our comprehensive set of services includes upgrades to a facility’s energy infrastructure and the construction and operation of small-scale renewable energy plants.

In addition to organic growth, strategic acquisitions of complementary businesses and assets have been an important part of our historical development. Since inception, we have completed numerous acquisitions, which have enabled us to broaden our service offerings and expand our geographical reach. Our acquisition of the energy services business of Duke Energy in 2002 expanded our geographical reach into Canada and the southeastern United States and enabled us to penetrate the Federal Government market for energy efficiency projects. The acquisition of the energy services business of Exelon in 2004 expanded our geographical reach into the Midwest. Our acquisition of the energy services business of Northeast Utilities in 2006 substantially grew our capability to provide services for the Federal market and in Europe. Our acquisition of Southwestern Photovoltaic in 2007 significantly expanded our offering of solar energy products and services. Our acquisition of energy services company Quantum in 2010 expanded our geographical reach into the northwest U.S.

We made three acquisitions in 2011. Our acquisition of energy efficiency and demand side management consulting services provider Applied Energy Group, Inc. (“AEG”), expanded our service offering to utility customers. Our acquisition of APS Energy Services Company, Inc., which we renamed Ameresco Southwest, a company that provides a full range of integrated energy efficiency and renewable energy solutions, strengthened our geographical position in the southwest U.S. Our acquisition of the xChangePoint® and energy projects businesses from Energy and Power Solutions, Inc. (“EPS”), which we operate as Ameresco Intelligent Systems (“AIS”), expanded our service offerings to private sector commercial and industrial customers. AIS offers energy efficiency solutions to customers across North America encompassing the food and beverage, meat, dairy, paper, aerospace, oil and gas and REIT industries.

Our acquisition of infrastructure asset management solutions provider FAME Facility Software Solutions Inc. (“FAME”) in 2012 expanded our asset planning consulting and software services offerings and our geographical position in western Canada.

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Our acquisition of the business of Ennovate Corporation in the first quarter of 2013 increased our footprint and penetration in the Rocky Mountain area. Our acquisition of energy management consulting companies The Energy Services Partnership Limited and ESP Response Limited (together “ESP”) in the second quarter of 2013 added a local presence in the United Kingdom, expertise and seasoned energy industry professionals to support multi-national customers of our enterprise energy management service offerings.

Effects of Seasonality

We are subject to seasonal fluctuations and construction cycles, particularly in climates that experience colder weather during the winter months, such as the northern United States and Canada, or at educational institutions, where large projects are typically carried out during summer months when their facilities are unoccupied. In addition, government customers, many of which have fiscal years that do not coincide with ours, typically follow annual procurement cycles and appropriate funds on a fiscal-year basis even though contract performance may take more than one year. Further, government contracting cycles can be affected by the timing of, and delays in, the legislative process related to government programs and incentives that help drive demand for energy efficiency and renewable energy projects. As a result, our revenue and operating income in the third quarter are typically higher, and our revenue and operating income in the first quarter are typically lower, than in other quarters of the year. As a result of such fluctuations, we may occasionally experience declines in revenue or earnings as compared to the immediately preceding quarter, and comparisons of our operating results on a period-to-period basis may not be meaningful.

Our annual and quarterly financial results are also subject to significant fluctuations as a result of other factors, many of which are outside our control. See “Our business is affected by seasonal trends and construction cycles, and these trends and cycles could have an adverse effect on our operating results” in Item 1A, Risk Factors in our Annual Report on Form 10-K.

Backlog and Awarded Projects

Total construction backlog represents projects that are active within our ESPC sales cycle. Our sales cycle begins with the initial contact with the customer and ends, when successful, with a signed contract, also referred to as fully-contracted backlog. Our sales cycle recently has been averaging 18 to 40 months. Awarded backlog is created when a potential customer awards a project to Ameresco following a request for proposal. Once a project is awarded but not yet contracted, we typically conduct a detailed energy audit to determine the scope of the project as well as identify the savings that may be expected to be generated from upgrading the customer’s energy infrastructure. At this point, we also determine the sub-contractor, what equipment will be used, and assist in arranging for third party financing, as applicable. Recently, awarded projects have been taking 12 to 16 months to result in a signed contract and thus convert to fully-contracted backlog. It may take longer, however, depending upon the size and complexity of the project. Historically, approximately 90% of our awarded projects ultimately have resulted in a signed contract. After the customer and Ameresco agree to the terms of the contract and the contract 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 24 months and we typically expect to recognize revenues for such contracts over the same period. Fully-contracted backlog begins converting into revenues generated from backlog on a percentage-of-completion basis once construction has commenced. See “We may not recognize all revenues from our backlog or receive all payments 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 significant resource commitments and requires a long lead time before we realize revenues” in Item 1A, Risk Factors in our Annual Report on Form 10-K.

As of June 30, 2014, we had backlog of approximately $399.4 million in expected future revenues under signed customer contracts for the installation or construction of projects, which we sometimes refer to as fully-contracted backlog; and we also had been awarded projects for which we do not yet have signed customer contracts with estimated total future revenues of an additional $995.0 million. As of June 30, 2013, we had fully-contracted backlog of approximately $324.0 million in expected future revenues under signed customer contracts for the installation or construction of projects; and we also had been awarded projects for which we had not yet signed customer contracts with estimated total future revenues of an additional $1.1 billion.

Critical Accounting Policies and Estimates

This discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expense and related disclosures. The most significant estimates with regard to these condensed consolidated financial statements relate to estimates of final contract

24

profit in accordance with long-term contracts, project development costs, project assets, impairment of goodwill, impairment of long-lived assets, fair value of derivative financial instruments, income taxes and stock-based compensation expense.

Such estimates and assumptions are based on historical experience and on various other factors that management believes to be reasonable under the circumstances. Estimates and assumptions are made on an ongoing basis, and accordingly, the actual results may differ from these estimates.

The following, in no particular order, are certain critical accounting policies that among others, affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements:

• Revenue Recognition;

• Project Assets;

• Derivative Financial Instruments; and

• Variable Interest Entities.

Further details regarding our critical accounting policies and estimates can be found in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K. In addition, please refer to Note 2, “Summary of Significant Accounting Policies,” of our Notes to Condensed Consolidated Financial Statements included under Part I, Item 1 of this Quarterly Report on Form 10-Q. Management has determined that no material changes concerning our critical accounting policies have occurred since December 31, 2013.

Non-GAAP Financial Measures

We use the non-GAAP financial measures defined and discussed below to provide investors and others with useful supplemental information to our financial results prepared in accordance with GAAP. These non-GAAP financial measures should not be considered as an alternative to any measure of financial performance calculated and presented in accordance with GAAP. The tables below provide a reconciliation of these non-GAAP measures to the most directly comparable financial measures prepared in accordance with GAAP.

We understand that, although measures similar to these non-GAAP financial measures are frequently used by investors and securities analysts in their evaluation of companies, they have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for the most directly comparable GAAP financial measures or an analysis of our results of operations as reported under GAAP. To properly and prudently evaluate our business, we encourage investors to review our GAAP financial statements included above, and not to rely on any single financial measure to evaluate our business.

Adjusted EBITDA

We define adjusted EBITDA as operating income (loss) before depreciation, amortization of intangible assets, impairment of goodwill and stock-based compensation expense. We believe adjusted EBITDA is useful to investors in evaluating our operating performance for the following reasons: adjusted EBITDA and similar non-GAAP measures are widely used by investors to measure a company's operating performance without regard to items that can vary substantially from company to company depending upon financing and accounting methods, book values of assets, capital structures and the methods by which assets were acquired; securities analysts often use adjusted EBITDA and similar non-GAAP measures as supplemental measures to evaluate the overall operating performance of companies; and by comparing our adjusted EBITDA in different historical periods, investors can evaluate our operating results without the additional variations of depreciation and amortization expense, goodwill impairment and stock-based compensation expense.

Our management uses adjusted EBITDA: as a measure of operating performance, because it does not include the impact of items that we do not consider indicative of our core operating performance; for planning purposes, including the preparation of our annual operating budget; to allocate resources to enhance the financial performance of the business; to evaluate the effectiveness of our business strategies; and in communications with the board of directors and investors concerning our financial performance.

Adjusted Free Cash Flow

We define adjusted free cash flow as cash flows from operating activities, less purchases of property and equipment, plus proceeds from Federal ESPC projects. Cash received in payment of Federal ESPC projects is treated as a financing cash flow under GAAP due to the unusual financing structure for these projects. These cash flows, however, correspond to the revenues

25

generated by these projects. Thus we believe that adjusting operating cash flow to include the cash generated by our Federal ESPC projects and to give effect for purchases of property and equipment provides investors with a useful measure for evaluating the cash generating ability of our core operating business. Our management uses adjusted free cash flow as a measure of liquidity because it captures all sources of cash associated with our revenues generated by operations.

Reconciliations

The following table presents a reconciliation of adjusted EBITDA to operating income (loss), the most comparable GAAP measure (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2014		2013			2014			2013
Operating income (loss)	$	3,782	$	(1,910	)	$	(3,003	)	$	(3,992	)
Depreciation and amortization of intangible assets	5,836		4,580			10,985			10,278
Stock-based compensation	707		665			1,425			1,336
Adjusted EBITDA	$	10,325	$	3,335		$	9,407		$	7,622

The following table presents a reconciliation of adjusted free cash flow to cash flows from operating activities, the most comparable GAAP measure (in thousands):

	Six Months Ended June 30,
	2014			2013
				(Revised)
Cash flows from operating activities	$	5,934		$	(38,947	)
Less: purchases of property and equipment	(1,195		)	(1,540		)
Plus: proceeds from Federal ESPC projects	13,976			13,366
Adjusted free cash flow	$	18,715		$	(27,121	)

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance in this ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The guidance in this ASU supersedes the revenue recognition requirements in ASC 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, this ASU supersedes some cost guidance included in ASC 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer are amended to be consistent with the guidance on recognition and measurement in this ASU. For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Retrospective application of the amendments in this ASU are required. The new guidance must be adopted using either a full retrospective approach for all periods presented in the period of adoption (with some limited relief provided) or a modified retrospective approach. Early application is not permitted under GAAP. We are currently assessing the impact of this ASU on our consolidated financial statements.

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Results of Operations

The following tables set forth certain financial data from the consolidated statements of income (loss) expressed as a percentage of revenues for the periods presented (in thousands):

	Three Months Ended June 30,
	2014					2013
	Dollar			% of		Dollar			% of
	Amount			Revenues		Amount			Revenues
Revenues	$	142,558		100.0	%	$	126,252		100.0	%
Cost of revenues	114,622			80.4	%	102,870			81.5	%
Gross profit	27,936			19.6	%	23,382			18.5	%
Selling, general and administrative expenses	24,154			16.9	%	25,292			20.0	%
Operating income (loss)	3,782			2.7	%	(1,910		)	(1.5	)%
Other expenses, net	796			0.6	%	448			0.4	%
Income (loss) before provision (benefit) from income taxes	2,986			2.1	%	(2,358		)	(1.9	)%
Income tax provision (benefit)	267			0.2	%	(577		)	(0.5	)%
Net income (loss)	$	2,719		1.9	%	$	(1,781	)	(1.4	)%
	Six Months Ended June 30,
	2014					2013
	Dollar			% of		Dollar			% of
	Amount			Revenues		Amount			Revenues
Revenues	$	243,289		100.0	%	$	236,388		100.0	%
Cost of revenues	197,799			81.3	%	191,487			81.0	%
Gross profit	45,490			18.7	%	44,901			19.0	%
Selling, general and administrative expenses	48,493			19.9	%	48,893			20.7	%
Operating loss	(3,003		)	(1.2	)%	(3,992		)	(1.7	)%
Other expenses, net	2,528			1.0	%	913			0.4	%
Loss before provision (benefit) from income taxes	(5,531		)	(2.3	)%	(4,905		)	(2.1	)%
Income tax provision (benefit)	31			—	%	(1,200		)	(0.5	)%
Net loss	$	(5,562	)	(2.3	)%	$	(3,705	)	(1.6	)%

Revenues

The following tables set forth a comparison of our revenues for the periods presented (in thousands):

	Three Months Ended June 30,				Dollar		Percentage
	2014		2013		Change		Change
Revenues	$	142,558	$	126,252	$	16,306	12.9	%
	Six Months Ended June 30,				Dollar		Percentage
	2014		2013		Change		Change
Revenues	$	243,289	$	236,388	$	6,901	2.9	%

We derive a majority of our revenue from energy efficiency products and services, which accounted for approximately 69.3% and 65.6% of revenues for the six months ended June 30, 2014 and 2013, respectively. Revenues increased $16.3 million, or 12.9%, for the three months ended June 30, 2014 compared to the same period of 2013 due to a $12.0 million increase in revenues from our Federal segment, a $3.6 million increase in our Canada segment, a $4.0 million increase in revenues from our Small-Scale Infrastructure segment and a $1.8 million increase in revenues from enterprise energy management services and the sale of solar PV energy products and systems (“integrated-PV”). These increases were partially offset by a $5.3 million decrease in our U.S. Regions segment.

Revenues increased $6.9 million, or 2.9%, for the six months ended June 30, 2014 compared to the same period of 2013 due to a $10.4 million increase in revenues from our Federal segment, a $6.3 million increase in our Canada segment, a $4.8

27

million increase in revenues from our Small-Scale Infrastructure segment and a $4.6 million increase in revenues from enterprise energy management services and integrated-PV sales. These increases were partially offset by a $19.0 million decrease in our U.S. Regions segment.

Cost of Revenues and Gross Profit

The following tables set forth a comparison of our cost of revenues and gross profit for the periods presented (in thousands):

	Three Months Ended June 30,						Dollar		Percentage
	2014			2013			Change		Change
Cost of revenues	$	114,622		$	102,870		$	11,752	11.4	%
Gross margin %	19.6		%	18.5		%
	Six Months Ended June 30,						Dollar		Percentage
	2014			2013			Change		Change
Cost of revenues	$	197,799		$	191,487		$	6,312	3.3	%
Gross margin %	18.7		%	19.0		%

The majority of our cost of revenues are incurred in connection with energy efficiency projects for which expenditures represented approximately 82.0% and 80.7% of corresponding revenue for the six months ended June 30, 2014 and 2013, respectively. Cost of revenues increased $11.8 million, or 11.4%, for the three months ended June 30, 2014 compared to the same period of 2013 primarily due to the increase in revenues described above, partially offset by a favorable mix of higher margin projects and a $1.0 million recovery related to a customer warranty issue. Cost of revenues increased $6.3 million, or 3.3%, for the six months ended June 30, 2014 compared to the same period of 2013 primarily due to the increase in revenues described above as well as higher fuel and operating costs, at our Savannah River Site (“SRS”), due to weather related issues during the first quarter of 2014, partially offset by the recovery related to a customer warranty issue described above.

As a result of certain acquisitions, we have intangible assets related to customer contracts; these are amortized over a period of approximately one to five years from the respective date of acquisition. This amortization is recorded as a cost of revenues in the consolidated statements of income (loss). For the three months ended June 30,2014 and 2013, we recorded amortization expense of $0.4 million and $0.2 million, respectively, related to customer contracts. For the six months ended June 30, 2014 and 2013, we recorded amortization expense of $0.6 million and $0.5 million, respectively, related to customer contracts.

Selling, General and Administrative Expenses

The following tables set forth a comparison of our selling, general and administrative expenses for the periods presented (in thousands):

	Three Months Ended June 30,				Dollar			Percentage
	2014		2013		Change			Change
Selling, general and administrative expenses	$	24,154	$	25,292	$	(1,138	)	(4.5	)%
	Six Months Ended June 30,				Dollar			Percentage
	2014		2013		Change			Change
Selling, general and administrative expenses	$	48,493	$	48,893	$	(400	)	(0.8	)%

Selling, general and administrative expenses decreased $1.1 million, or 4.5%, for the three months ended June 30, 2014 compared to same period of 2013 primarily due to a $0.5 million decrease in professional fees, $0.5 million decrease in project development costs and a $0.2 million decrease in salaries and benefits. Selling, general and administrative expenses decreased $0.4 million, or 0.8%, for the six months ended June 30, 2014 compared to same period of 2013 primarily due to a $1.0 million decrease in salaries and benefits, partially offset by severance charges recognized during the first quarter of 2014.

Amortization expense of intangible assets related to customer relationships, non-compete agreements, technology and trade names is included in selling, general and administrative expenses in the consolidated statements of income (loss). For the three months ended June 30,2014 and 2013, we recorded amortization expense, related to these intangible assets, of $0.7 million and $0.7 million, respectively. For the six months ended June 30, 2014 and 2013, we recorded amortization expense, related to these intangible assets, of $1.3 million and $1.3 million, respectively.

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Other Expenses, Net

Other expenses, net includes gains and losses from derivatives, interest income and expenses, amortization of deferred financing costs, net and foreign currency transaction gains and losses. Other expenses, net, increased $0.3 million for the three months ended June 30, 2014 compared to same period of 2013 primarily due to a $0.4 million increase in interest expense, net of interest income. Other expenses, net, increased $1.6 million for the six months ended June 30, 2014 compared to same period of 2013 primarily due to a $1.0 million increase in interest expense, net of interest income. The increase in interest expense for the six months ended June 30, 2014 was primarily due to a $0.3 million decrease in interest capitalized relating to construction financing and a $0.5 million increase in interest related to the conversion to term loans on our construction-to-term loan credit facility during the second half of 2013 and first half of 2014.

Income (Loss) Before Taxes

Income before taxes increased $5.3 million for the three months ended June 30, 2014 to $3.0 million from a loss of $(2.4) million for the three months ended June 30, 2013 due to the reasons described above. Loss before taxes increased $0.6 million, or 12.8%, for the six months ended June 30, 2014 to a loss of $(5.5) million from a loss of $(4.9) million for the six months ended June 30, 2013 due to the reasons described above.

Provision (Benefit) from Income Taxes

The provision for income taxes was $0.3 million for the three months ended June 30, 2014, compared to a benefit of $(0.6) million for the three months ended June 30, 2013. The provision for income taxes was $0.0 million for the the six months ended June 30, 2014, compared to a benefit of $(1.2) million for the six months ended June 30, 2013. The estimated annual effective tax rate applied for the three months ended June 30, 2014 was 8.9% and for the six months ended June 30, 2014 was 0.2%, before discrete items, compared to 24.5% for the three and six months ended June 30, 2013, due to investment tax credits on energy efficiency projects placed or expected to be placed in service in 2014 as compared to deductions allowed under Section 179D of the Internal Revenue Code in 2013. The principal reason for the difference between the statutory rate and the estimated annual effective rate for 2014 were the effects of investment tax credits and production tax credits to which we are entitled from plants we own. The principal reasons for the difference between the statutory rate and the estimated annual effective rate for 2013 were the effects of deductions permitted under Section 179D in 2013, which relate to the installation of certain energy efficiency equipment in Federal, state, provincial and local government-owned buildings, as well as tax credits to which we are entitled from plants we own.

Net Income (Loss) and Earnings (Loss) Per Share

Net income increased for the three months ended June 30, 2014 by $4.5 million to $2.7 million from a loss of $(1.8) million for the three months ended June 30, 2013 due to the reasons explained above. Net loss increased for the six months ended June 30, 2014 by $1.9 million to a loss of $(5.6) million from a loss of $(3.7) million for the six months ended June 30, 2013 due to the reasons explained above.

Earnings per share for the three months ended June 30, 2014 was $0.06 per basic share, representing an increase of $0.10 compared to the same period of 2013, and $0.06 per diluted share, representing an increase of $0.10 compared to the same period of 2013. Loss per share for the six months ended June 30, 2014 was $(0.12) per basic share, representing an increase in the loss per share of $(0.04), or 50.0%, compared to the same period of 2013, and $(0.12) per diluted share, representing an increase in the loss per diluted share of $(0.04), or 50.0%, compared to the same period of 2013.

Business Segment Analysis (in thousands)

Our reportable segments are U.S. Regions, U.S. Federal, Canada and Small-Scale Infrastructure. Our U.S. Regions, U.S. Federal and Canada segments offer energy efficiency products and services, which include the design, engineering and installation of equipment and other measures to improve the efficiency and control the operation of a facility’s energy infrastructure; renewable energy products and services, which include the construction of small-scale plants for customers that produce electricity, gas, heat or cooling from renewable sources of energy; and O&M services. Our Small-Scale Infrastructure segment sells electricity, processed LFG, heat or cooling produced from renewable sources of energy from small-scale plants that we own. The “All Other” category offers enterprise energy management services, consulting services and the sale and installation of solar PV energy products and systems. These segments do not include results of other activities, such as corporate operating expenses not specifically allocated to the segments.

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U.S. Regions

	Three Months Ended June 30,				Dollar			Percentage
	2014		2013		Change			Change
Revenues	$	62,785	$	68,100	$	(5,315	)	(7.8	)%
Income before taxes	$	6,318	$	4,679	$	1,639		35.0	%
	Six Months Ended June 30,				Dollar			Percentage
	2014		2013		Change			Change
Revenues	$	103,791	$	122,798	$	(19,007	)	(15.5	)%
Income before taxes	$	6,602	$	6,791	$	(189	)	(2.8	)%

Revenues for the U.S. Regions segment decreased for the three months ended June 30, 2014 compared to same period of 2013 by $5.3 million, or 7.8%, to $62.8 million and decreased for the six months ended June 30, 2014 compared to same period of 2013 by $19.0 million, or 15.5%, to $103.8 million primarily due to a decrease in revenues from the construction of small-scale renewable energy plants for customers.

Income before taxes for the U.S. Regions segment increased for the three months ended June 30, 2014 compared to same period of 2013 by $1.6 million, or 35.0%, to $6.3 million. The increase was primarily due to the recovery related to the customer warranty issue described above. Income before taxes for the U.S. Regions segment decreased for the six months ended June 30, 2014 compared to same period of 2013 by $0.2 million, or 2.8%, to $6.6 million. The decrease was primarily due to a decrease in revenues, partially offset by the customer warranty issue described above.

U.S. Federal

	Three Months Ended June 30,					Dollar		Percentage
	2014		2013			Change		Change
Revenues	$	24,791	$	12,745		$	12,046	94.5	%
Income (loss) before taxes	$	2,265	$	(781	)	$	3,046	390.0	%
	Six Months Ended June 30,					Dollar		Percentage
	2014		2013			Change		Change
Revenues	$	36,141	$	25,708		$	10,433	40.6	%
Income (loss) before taxes	$	2,265	$	(120	)	$	2,385	1,987.5	%

Revenues for the U.S. Federal segment increased for the three months ended June 30, 2014 compared to same period of 2013 by $12.0 million, or 94.5%, to $24.8 million and increased for the six months ended June 30, 2014 compared to same period of 2013 by $10.4 million, or 40.6%, to $36.1 million due to the two large new energy efficiency projects for which revenue began to be recognized primarily during the three months ended June 30, 2014.

Income before taxes for the U.S. Federal segment increased for the three months ended June 30, 2014 compared to a loss for the same period of 2013 by $3.0 million to $2.3 million. The increase was primarily due to the increase in revenues described above. Income before taxes for the U.S. Federal segment increased for the six months ended June 30, 2014 compared to a loss for the same period of 2013 by $2.4 million to $2.3 million. The increase was primarily due to the increase in revenues described above, partially offset by the higher fuel and operating costs at SRS as explained above.

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Canada

	Three Months Ended June 30,						Dollar			Percentage
	2014			2013			Change			Change
Revenues	$	19,768		$	16,125		$	3,643		22.6	%
Loss before taxes	$	(1,710	)	$	(1,204	)	$	(506	)	(42.0	)%
	Six Months Ended June 30,						Dollar			Percentage
	2014			2013			Change			Change
Revenues	$	36,067		$	29,785		$	6,282		21.1	%
Loss before taxes	$	(3,069	)	$	(1,934	)	$	(1,135	)	(58.7	)%

Revenues for the Canada segment increased for the three months ended June 30, 2014 compared to same period of 2013 by $3.6 million, or 22.6%, to $19.8 million and increased for the six months ended June 30, 2014 compared to same period of 2013 by $6.3 million, or 21.1%, to $36.1 million, primarily due to the timing of revenue recognized as a result of the phase of active projects, including advancements in the phase of construction of a large project.

Loss before taxes for the Canada segment increased for the three months ended June 30, 2014 compared to the same period of 2013 by $0.5 million, or 42.0%, to a loss of $1.7 million and increased for the six months ended June 30, 2014 compared to the same period of 2013 by $1.1 million, or 58.7%, to a loss of $3.1 million. The increase in the losses was primarily due to budget revisions during the current quarter on the project described above.

Small-Scale Infrastructure

	Three Months Ended June 30,				Dollar		Percentage
	2014		2013		Change		Change
Revenues	$	14,206	$	10,230	$	3,976	38.9	%
Income before taxes	$	3,143	$	1,489	$	1,654	111.1	%
	Six Months Ended June 30,				Dollar		Percentage
	2014		2013		Change		Change
Revenues	$	25,355	$	20,574	$	4,781	23.2	%
Income before taxes	$	3,815	$	2,627	$	1,188	45.2	%

Revenues for the Small-Scale Infrastructure segment increased for the three months ended June 30, 2014 compared to same period of 2013 by $4.0 million, or 38.9%, to $14.2 million and increased for the six months ended June 30, 2014 compared to same period of 2013 by $4.8 million, or 23.2%, to $25.4 million primarily due to an increase in the number of plants fully operational during the six months ended June 30, 2014, as compared to the same period of 2013.

Income before taxes for the Small-Scale Infrastructure segment increased for the three months ended June 30, 2014 compared to same period of 2013 by $1.7 million, or 111.1%, to $3.1 million and increased for the six months ended June 30, 2014 compared to same period of 2013 by $1.2 million, or 45.2%, to $3.8 million. The increases were primarily due to the increase in revenues described above and improved operating efficiencies, partially offset by an increase in depreciation and interest expense as a result of the increase in plants fully operational, as described above, compared to the same periods of 2013.

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All Other & Unallocated Corporate Activity

	Three Months Ended June 30,						Dollar			Percentage
	2014			2013			Change			Change
Revenues	$	21,008		$	19,052		$	1,956		10.3	%
Loss before taxes	$	(95	)	$	(145	)	$	50		(34.5	)%
Unallocated corporate activity	$	(6,935	)	$	(6,396	)	$	(539	)	8.4	%
	Six Months Ended June 30,						Dollar			Percentage
	2014			2013			Change			Change
Revenues	$	41,935		$	37,523		$	4,412		11.8	%
Income before taxes	$	(141	)	$	356		$	(497	)	(139.6	)%
Unallocated corporate activity	$	(15,003	)	$	(12,625	)	$	(2,378	)	18.8	%

Revenues not allocated to segments and presented as all other increased for the three months ended June 30, 2014 compared to same period of 2013 by$2.0 million,or 10.3%, to $21.0 million and increased for the six months ended June 30, 2014 compared to same period of 2013 by$4.4 million,or 11.8%, to $41.9 million primarily due to increases in integrated -PV sales and enterprise energy management services.

(Loss) income before taxes not allocated to segments and presented as all other was flat for the three months ended June 30, 2014 compared to same period of 2013 and decreased for the six months ended June 30, 2014 compared to same period of 2013 by $0.5 million to a loss of $(0.1) million primarily due an increase in selling, general and administrative, depreciation expense and intangible asset amortization related to our prior year acquisition of ESP and the addition of new operating locations, partially offset by, the increase in revenues described above.

Unallocated corporate activity includes all corporate level selling, general and administrative expenses and other expenses not allocated to the segments. We do not allocate any indirect expenses to the segments.

Unallocated corporate activity increased for the three months ended June 30, 2014 compared to same period of 2013 by$0.5 million,or 8.4%, to $(6.9) million and increased for the six months ended June 30, 2014 compared to same period of 2013 by$2.4 million,or 18.8%, to $(15.0) million primarily due to an increase in interest expense as a result of unrealized losses on interest rate swaps during the first half of 2014 compared to gains in the same period of 2013, as well as severance charges realized during the first quarter of 2014.

Liquidity and Capital Resources

Sources of liquidity. Since inception, we have funded operations primarily through cash flow from operations, advances from Federal ESPC projects and various forms of debt. We believe that available cash and cash equivalents and availability under our revolving senior secured credit facility, combined with our access to credit markets, will be sufficient to fund our operations through 2014 and thereafter.

Proceeds from our Federal ESPC projects are generally received through agreements to sell the ESPC receivables related to certain ESPC contracts to third-party investors. We use the advances from the investors under these agreements to finance the projects. Until recourse to us ceases for the ESPC receivables transferred to the investor, upon final acceptance of the work by the Government customer, we are the primary obligor for financing received. The transfers of receivables under these agreements do not qualify for sales accounting until final customer acceptance of the work, so the advances from the investors are not classified as operating cash flows. Cash draws that we receive under these ESPC agreements are recorded as financing cash inflows. The use of the cash received under these arrangements to pay project costs is classified as operating cash flows. Due to the manner in which the ESPC contracts with the third-party investors are structured, our reported operating cash flows are materially impacted by the fact that operating cash flows only reflect the ESPC contract expenditure outflows and do not reflect any inflows from the corresponding contract revenues. Upon acceptance of the project by the Federal customer the ESPC receivable and corresponding ESPC liability are removed from our consolidated balance sheet as a non-cash settlement. See Note 2 to our Notes to Condensed Consolidated Financial Statements under Part I, Item 1 of this Quarterly Report on Form 10-Q.

As as result of the structure of the Federal ESPC project arrangements management uses adjusted free cash flows, as previously defined, as a measure of liquidity because it captures all sources of cash associated with our revenues generated by

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operations. Adjusted free cash flows for the six months ended June 30, 2014 and 2013 were $18.7 million and $(27.1) million, respectively.

Our service offering also includes the development, construction and operation of small-scale renewable energy plants. Small-scale renewable energy projects, or project assets, can either be developed for the portfolio of assets that we own and operate or designed and built for customers. Expenditures related to projects that we own are recorded as cash outflows from investing activities. Expenditures related to projects that we build for customers are recorded as cash outflows from operating activities as cost of revenues.

The amount of interest capitalized relating to construction financing during the period of construction for the six months ended June 30, 2014 and 2013 was $0.4 million and $0.7 million, respectively.

Cash flows from operating activities. Operating activities provided $5.9 million of net cash during the six months ended June 30, 2014. During that period, we had a net loss of $5.6 million, which is net of non-cash compensation, depreciation, amortization, deferred income taxes and other non-cash items totaling $16.4 million. Decreases in restricted cash, accounts receivable including retainage, inventory and costs and estimated earnings in excess of billings and billings in excess of costs and estimated earnings, net and an increase in other liabilities provided $33.8 million. These were offset by increases in prepaid expenses and other current assets, project development costs and other assets and decreases in accounts payable and accrued expenses and income taxes payable, which used $20.2 million in cash. An increase in Federal ESPC receivables used an additional $18.5 million. As described above, Federal ESPC operating cash flows only reflect the ESPC expenditure outflows and do not reflect any inflows from the corresponding contract revenues, which are recorded as cash inflows from financing activities due to the timing of the receipt of cash related to the assignment of the ESPC receivables to the third-party investors.

Operating activities used $38.9 million of net cash during the six months ended June 30, 2013. During that period, we had a net loss of $3.7 million, which is net of non-cash compensation, depreciation, amortization, deferred income taxes and other non-cash items totaling $8.5 million. Decreases in accounts receivable including retainage and costs and estimated earnings in excess of billings and billings in excess of costs and estimated earnings, net provided $15.6 million. These were offset by increases in restricted cash, inventory, prepaid expenses and other current assets, project development costs and other assets and decreases in accounts payable and accrued expenses, other liabilities and income taxes payable, which used $45.5 million in cash. An increase in Federal ESPC receivables used an additional $13.8 million.

Cash flows from investing activities. Cash flows from investing activities during the six months ended June 30, 2014 used $13.3 million. Development of our renewable energy plants used $11.0 million. We now expect to invest $15.0 million to $25.0 million on capital expenditures, principally for renewable energy plants, in 2014. In addition, we invested $1.2 million in purchases of other property and equipment and $4.9 million was used for acquisitions. Partially offsetting these amounts were $3.7 million related to Section 1603 grants received during the period.

Cash flows from investing activities during the six months ended June 30, 2013 used $40.9 million. Development of our renewable energy plants used $31.6 million. In addition, we invested $1.5 million in purchases of other property and equipment and $9.3 million was used for the acquisition of Ennovate and ESP. These were partially offset by $1.6 million relating to grant awards received on project assets.

Cash flows from financing activities. Cash flows from financing activities during the six months ended June 30, 2014 provided $6.4 million. This was primarily due to a decrease in our investment in restricted cash of $2.8 million and proceeds from exercises of options of $0.9 million. These were partially offset by payments on long-term debt of $10.9 million and payments of financing fees of $0.4 million. Proceeds from Federal ESPC projects provided $14.0 million.

Cash flows from financing activities during the six months ended June 30, 2013 provided $33.7 million. This was primarily due to draws on our revolving credit facility of $15.0 million, proceeds from long-term debt financing of $9.4 million, proceeds from the exercise of stock options of $1.3 million and a decrease in our investment in restricted cash of $1.6 million, partially offset by payments of long-term debt of $6.7 million. Proceeds from Federal ESPC projects provided $13.4 million.

Senior Secured Credit Facility — Revolver and Term Loan

We have a credit and security agreement with two banks. The credit facility consists of a $60.0 million revolving credit facility and an initial $40.0 million term loan. At June 30, 2014, no amounts were outstanding under the revolving credit facility and $22.9 million was outstanding under the term loan. The term loan requires quarterly principal payments of $1.4 million, with the balance due at maturity. Ameresco, Inc. is the sole borrower under the credit facility. The credit facility is

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secured by a lien on all of our assets other than renewable energy projects that we own and for which financing from others remains outstanding, and limits our ability to enter into other financing arrangements. Availability under the revolving credit facility is based on two times our EBITDA for the preceding four quarters, and we are required to maintain a minimum EBITDA amount on a rolling four-quarter basis. EBITDA for purposes of the facility excludes the results of renewable energy projects that we own and for which financing from others remains outstanding. The credit facility matures on June 30, 2016, when all amounts will be due and payable in full.

During the first quarter of 2014, we amended the senior credit facility to:

• increase the margins over the applicable benchmark rate in determining the interest rate by 25 basis points;

• waive compliance with the minimum EBITDA covenant for the four consecutive fiscal quarters ended December 31, 2013;

• reduce the required minimum EBITDA amount to $16.5 million for the four consecutive fiscal quarters ended March 31, 2014, $22.0 million for the four consecutive fiscal quarters ended June 30, 2014, $24.0 million for the four consecutive fiscal quarters ended September 30, 2014, and $27.0 million for the four consecutive fiscal quarters ended December 31, 2014 and thereafter;

• increase the maximum ratio of total funded debt to EBITDA as of the end of each fiscal quarter to 2.5 to 1.0 for March 31, 2014 and 2.25 to 1.0 for June 30, 2014, returning to 2.0 to 1.0 for September 30, 2014 and thereafter; and

• reduce the minimum ratio of cash flow to debt service to 1.25 to 1.0 for the four fiscal quarters ended March 31, 2014, returning to 1.5 to 1.0 for the four fiscal quarters ended June 30, 2014 and thereafter.

As of June 30, 2014 we were in compliance with all of the financial and operational covenants in the senior credit facility. In addition, we do not consider it likely that we will fail to comply with these covenants for the next twelve months.

Project Financing

Construction and Term Loans. We have entered into a number of construction and term loan agreements for the purpose of constructing and owning certain renewable energy plants. The physical assets and the operating agreements related to the renewable energy plants are owned by wholly owned, single member special purpose subsidiaries. These construction and term loans are structured as project financings made directly to a subsidiary, and upon acceptance of a project, the related construction loan converts into a term loan. While we are required under generally accepted accounting principles to reflect these loans as liabilities on our consolidated balance sheet, they are generally nonrecourse and not direct obligations of Ameresco, Inc. As of June 30, 2014, we had outstanding $82.4 million in aggregate principal amount under these loans, bearing interest at rates ranging from 3.2% to 7.3% and maturing at various dates from 2017 to 2028. One loan with an outstanding balance as of June 30, 2014 totaling $4.0 million, does require Ameresco, Inc. to provide assurance to the lender of the project performance. A second loan, entered into during 2012, with an outstanding balance as of June 30, 2014 of $44.1 million requires Ameresco, Inc. to provide assurance to the lender of construction completion with respect to those projects still in construction and of reimbursement upon any recapture of certain renewable energy Government cash grants upon the occurrence of events that cause the recapture of such grants. As of December 31, 2013, we had outstanding $90.5 million in aggregate principal amount under these loans, bearing interest at rates ranging from 6.1% to 8.7% and maturing at various dates from 2015 to 2028.

These construction and term loan agreements require us to comply with a variety of financial and operational covenants. As of June 30, 2014 we were in compliance with all of these financial and operational covenants. In addition, we do not consider it likely that we will fail to comply with these covenants during the term of these agreements.

Federal ESPC Liabilities. We have arrangements with certain lenders to provide advances to us during the construction or installation of projects for certain customers, typically Federal Governmental entities, in exchange for our assignment to the lenders of our rights to the long-term receivables arising from the ESPCs related to such projects. These financings totaled $45.9 million and $44.3 million in principal amounts at June 30, 2014 and December 31, 2013, respectively. Under the terms of these financing arrangements, we are required to complete the construction or installation of the project in accordance with the contract with our customer, and the debt remains on our consolidated balance sheet until the completed project is accepted by the customer.

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Contractual Obligations

The following table summarizes our significant contractual obligations and commitments as of June 30, 2014 (in thousands):

	Payments due by Period
			Less than		One to		Three to		More than
	Total		One Year		Three Years		Five Years		Five Years
Senior Secured Credit Facility:
Revolver	$	—	$	—	$	—	$	—	$	—
Term Loan	22,857		5,714		17,143		—		—
Project Financing:
Construction and term loans	82,382		7,784		12,858		13,183		48,557
Federal ESPC liabilities(1)	45,923		—		45,923		—		—
Interest obligations(2)	33,044		4,719		7,850		6,107		14,368
Operating leases	10,033		3,111		4,596		1,914		412
Total	$	194,239	$	21,328	$	88,370	$	21,204	$	63,337

(1	)	Federal ESPC arrangements relate to the installation and construction of projects for certain customers, typically Federal Governmental entities, where we assign to the third-party lenders our right to customer receivables. We are relieved of the liability when the project is completed and accepted by the customer. We typically expect to be relieved of the liability between one and three years from the date of project construction commencement. The table does not include, for our Federal ESPC liability arrangements, the difference between the aggregate amount of the long-term customer receivables sold by us to the lender and the amount received by us from the lender for such sale.
(2	)	For both the revolver and term loan portion of our senior secured credit facility, the table above assumes that the variable interest rate in effect at June 30, 2014 remains constant for the term of the facility.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules, such as relationships with unconsolidated entities or financial partnerships, which are often referred to as structured finance or special purpose entities, established for the purpose of facilitating financing transactions that are not required to be reflected on our balance sheet.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of June 30, 2014, there have been no significant changes in market risk exposures that materially affected the quantitative and qualitative disclosures as described in Item 7A to our Annual Report on Form 10-K for the year ended December 31, 2013.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this quarterly report, or the evaluation date. Disclosure controls and procedures are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our management, after evaluating the effectiveness of our disclosure controls and procedures as of the evaluation date, concluded that as of the evaluation date, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weakness in our internal control over financial reporting disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on March 17, 2014, and discussed below.

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Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, other than those stated below, during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Material Weakness Discussion and Remediation

As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on March 17, 2014, we identified a material weakness in our internal control over financial reporting. Specifically, we did not have adequate processes to ensure timely preparation and reviews necessary to provide reasonable assurance that financial statements and related disclosures could be prepared in accordance with generally accepted accounting principles and recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

During the quarter ended June 30, 2014, we have undertaken the following actions, which had a material affect on our internal controls over financial reporting, to remediate the material weakness identified:

• we continued to act upon the enhancements to our internal controls that we implemented in 2013 as described in our Annual Report on Form 10-K for the year ended December 31, 2013;

• we continued improving the quality and timing of our accounting close process and financial reporting to allow for an increase in time for review; and

• we separated the corporate controller and chief accounting officer functions and hired a corporate controller to further enhance the timeliness of the review over our accounting close process and financial reporting.

Further work, however, is required to develop appropriate controls in some aspects of our financial statement preparation and review process to provide reasonable assurance that controls are designed in the most effective and efficient manner possible. Therefore, while we believe these changes reduce the risk of financial statement misstatement, there continues to be additional work required for us to conclude that reasonable assurance has been obtained that all controls are operating effectively and in a timely manner. We expect to continue to undertake these actions as appropriate throughout 2014.

The Audit Committee is monitoring management’s continuing development and implementation of its plan for undertaking the foregoing remedial measures. In addition, under the direction of the Audit Committee, management will continue to review and make necessary changes to the overall design of our internal control environment, as well as policies and procedures to improve the overall effectiveness of internal control over financial reporting.

Management is committed to continuous improvement of our internal control processes and will continue to diligently review our reporting controls and procedures. As management continues to evaluate and work to improve internal control over financial reporting, we may determine to take additional measures to address control deficiencies or determine to modify, or in appropriate circumstances not to complete, certain of the remediation measures described above. We expect that our remediation efforts will continue throughout 2014.

For the near-term future, the matter identified above will continue to constitute a material weakness in our internal control over financial reporting that could result in material misstatements in our financial statements not being prevented or detected.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary conduct of our business we are subject to periodic lawsuits, investigations and claims. Although we cannot predict with certainty the ultimate resolution of such lawsuits, investigations and claims against us, we do not believe that any currently pending or threatened legal proceedings to which we are a party will have a material adverse effect on our business, results of operations or financial condition.

For additional information about certain proceedings, please refer to Note 5, “Commitments and Contingencies”, to our Condensed Consolidated Financial Statements included included under Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated into this item by reference.

Item 1A. Risk Factors

As of June 30, 2014, there have been no material changes to the risk factors described in Item 1A to our Annual Report on Form 10-K for the year ended December 31, 2013.

Item 6. Exhibits

The exhibits listed in the Exhibit Index immediately preceding the exhibits are filed (other than exhibit 32.1) as part of this Quarterly Report on Form 10-Q and such Exhibit Index is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	AMERESCO, INC.
Date: July 31, 2014	By:	/s/ Andrew B. Spence
		Andrew B. Spence
		Vice President and Chief Financial Officer (duly authorized and principal financial officer)

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Exhibit Index

Exhibit Number	Description
3.1	Amended and Restated By-Laws of Ameresco, Inc. (as further amended May 22, 2014).
31.1	Principal Executive Officer Certification required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Principal Financial Officer Certification required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following condensed consolidated financial statements from Ameresco, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets (ii) Consolidated Statements of Income (Loss), (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statement of Changes in Stockholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.
	*Furnished herewith.

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EX-3.1

Exhibit 3.1

AMENDED AND RESTATED BY-LAWS

OF

AMERESCO, INC.

adopted April 25, 2000

amended and restated July 20, 2010

further amended May 22, 2014

TABLE OF CONTENTS

Page

ARTICLE I

STOCKHOLDERS

1.1Place of Meetings.......................................................................................................1

1.2Annual Meeting..........................................................................................................1

1.3Special Meetings........................................................................................................1

1.4Notice of Meetings.....................................................................................................1

1.5Voting List..................................................................................................................1

1.6Quorum......................................................................................................................2

1.7Adjournments............................................................................................................2

1.8Voting and Proxies.....................................................................................................2

1.9Action at Meeting......................................................................................................2

1.10Nomination of Directors............................................................................................3

1.11Notice of Business at Annual Meetings.................................................................... 5

1.12Conduct of Meetings..................................................................................................8

1.13No Action by Consent in Lieu of a Meeting..............................................................9

ARTICLE II

DIRECTORS

2.1General Powers..........................................................................................................9

2.2Number, Election and Qualification..........................................................................9

2.3Chairman of the Board; Vice Chairman of the Board...............................................9

2.4Classes of Directors...................................................................................................9

2.5Terms of Office..........................................................................................................9

2.6Quorum......................................................................................................................10

2.7Action at Meeting......................................................................................................10

2.8Removal.....................................................................................................................10

2.9Vacancies...................................................................................................................10

2.10Resignation................................................................................................................10

2.11Regular Meetings.......................................................................................................10

2.12Special Meetings........................................................................................................10

2.13Notice of Special Meetings........................................................................................10

2.14Meetings by Conference Communications Equipment.............................................11

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2.15Action by Consent......................................................................................................11

2.16Committees................................................................................................................11

2.17Compensation of Directors........................................................................................11

ARTICLE III

OFFICERS

3.1Titles..........................................................................................................................12

3.2Election......................................................................................................................12

3.3Qualification..............................................................................................................12

3.4Tenure........................................................................................................................12

3.5Resignation and Removal..........................................................................................12

3.6Vacancies...................................................................................................................12

3.7President; Chief Executive Officer............................................................................12

3.8Vice Presidents..........................................................................................................13

3.9Secretary and Assistant Secretaries...........................................................................13

3.10Treasurer and Assistant Treasurers............................................................................13

3.11Salaries......................................................................................................................14

3.12Delegation of Authority.............................................................................................14

ARTICLE IV

CAPITAL STOCK

4.1Issuance of Stock.......................................................................................................14

4.2Stock Certificates; Uncertificated Shares..................................................................14

4.3Transfers.....................................................................................................................15

4.4Lost, Stolen or Destroyed Certificates.......................................................................15

4.5Record Date...............................................................................................................15

4.6Regulations................................................................................................................16

ARTICLE V

GENERAL PROVISIONS

5.1Fiscal Year..................................................................................................................16

5.2Corporate Seal...........................................................................................................16

5.3Waiver of Notice........................................................................................................16

5.4Voting of Securities....................................................................................................16

5.5Evidence of Authority................................................................................................16

5.6Certificate of Incorporation.......................................................................................16

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5.7Severability................................................................................................................16

5.8Pronouns....................................................................................................................17

5.8Designated Engineer in the State of Washington.......................................................17

ARTICLE VI

AMENDMENTS...............................................................................................................................17

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ARTICLE I

STOCKHOLDERS

1.1Place of Meetings. All meetings of stockholders shall be held at such place as may be designated from time to time by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President or, if not so designated, at the principal office of the corporation.

1.2Annual Meeting. The annual meeting of stockholders for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly be brought before the meeting shall be held on a date and at a time designated by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President (which date shall not be a legal holiday in the place where the meeting is to be held).

1.3Special Meetings. Special meetings of stockholders for any purpose or purposes may be called at any time by only the Board of Directors, the Chairman of the Board or the Chief Executive Officer, and may not be called by any other person or persons. The Board of Directors may postpone or reschedule any previously scheduled special meeting of stockholders. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

1.4Notice of Meetings. Except as otherwise provided by law, notice of each meeting of stockholders, whether annual or special, shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. Without limiting the manner by which notice otherwise may be given to stockholders, any notice shall be effective if given by a form of electronic transmission consented to (in a manner consistent with the General Corporation Law of the State of Delaware) by the stockholder to whom the notice is given. The notices of all meetings shall state the place, date and time of the meeting and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting. The notice of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called. If notice is given by mail, such notice shall be deemed given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the corporation. If notice is given by electronic transmission, such notice shall be deemed given at the time specified in Section 232 of the General Corporation Law of the State of Delaware.

1.5Voting List. The Secretary shall prepare, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least 10 days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the corporation. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. The list shall presumptively determine the

identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.

1.6Quorum. Except as otherwise provided by law, the Certificate of Incorporation or these By-laws, the holders of a majority in voting power of the shares of the capital stock of the corporation issued and outstanding and entitled to vote at the meeting, present in person, present by means of remote communication in a manner, if any, authorized by the Board of Directors in its sole discretion, or represented by proxy, shall constitute a quorum for the transaction of business; provided, however, that where a separate vote by a class or classes or series of capital stock is required by law or the Certificate of Incorporation, the holders of a majority in voting power of the shares of such class or classes or series of the capital stock of the corporation issued and outstanding and entitled to vote on such matter, present in person, present by means of remote communication in a manner, if any, authorized by the Board of Directors in its sole discretion, or represented by proxy, shall constitute a quorum entitled to take action with respect to the vote on such matter. A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum.

1.7Adjournments. Any meeting of stockholders may be adjourned from time to time to any other time and to any other place at which a meeting of stockholders may be held under these By-laws by the chairman of the meeting or by the stockholders present or represented at the meeting and entitled to vote, although less than a quorum. It shall not be necessary to notify any stockholder of any adjournment of less than 30 days if the time and place of the adjourned meeting, and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which adjournment is taken, unless after the adjournment a new record date is fixed for the adjourned meeting. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting.

1.8Voting and Proxies. Each stockholder shall have one vote for each share of stock entitled to vote held of record by such stockholder and a proportionate vote for each fractional share so held, unless otherwise provided by law or the Certificate of Incorporation. Each stockholder of record entitled to vote at a meeting of stockholders may vote in person (including by means of remote communications, if any, by which stockholders may be deemed to be present in person and vote at such meeting) or may authorize another person or persons to vote for such stockholder by a proxy executed or transmitted in a manner permitted by the General Corporation Law of the State of Delaware by the stockholder or such stockholder’s authorized agent and delivered (including by electronic transmission) to the Secretary of the corporation. No such proxy shall be voted upon after three years from the date of its execution, unless the proxy expressly provides for a longer period.

1.9Action at Meeting. When a quorum is present at any meeting, any matter other than the election of directors to be voted upon by the stockholders at such meeting shall be decided by the vote of the holders of shares of stock having a majority in voting power of the votes cast by the holders of all of the shares of stock present or represented at the meeting and voting affirmatively or negatively on such matter (or if there are two or more classes or series of stock entitled to vote as separate classes, then in the case of each such class or series, the holders of a majority in voting power of the shares of stock of that class or series present or represented

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at the meeting and voting affirmatively or negatively on such matter), except when a different vote is required by law, the Certificate of Incorporation or these By-laws. When a quorum is present at any meeting, any election by stockholders of directors shall be determined by a plurality of the votes cast by the stockholders entitled to vote on the election.

1.10Nomination of Directors.

(a)Except for (1) any directors entitled to be elected by the holders of preferred stock, (2) any directors elected in accordance with Section 2.9 hereof by the Board of Directors to fill a vacancy or newly-created directorship or (3) as otherwise required by applicable law or stock exchange regulation, at any meeting of stockholders, only persons who are nominated in accordance with the procedures in this Section 1.10 shall be eligible for election as directors. Nomination for election to the Board of Directors at a meeting of stockholders may be made (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the corporation who (x) timely complies with the notice procedures in Section 1.10(b), (y) is a stockholder of record on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such meeting and (z) is entitled to vote at such meeting.

(b)To be timely, a stockholder’s notice must be received in writing by the Secretary at the principal executive offices of the corporation as follows: (i) in the case of an election of directors at an annual meeting of stockholders, not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that (x) in the case of the annual meeting of stockholders of the corporation to be held in 2011 or (y) in the event that the date of the annual meeting in any other year is advanced by more than 20 days, or delayed by more than 60 days, from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be so received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of (A) the 90th day prior to such annual meeting and (B) the tenth day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs; or (ii) in the case of an election of directors at a special meeting of stockholders, provided that the Board of Directors, the Chairman of the Board or the Chief Executive Officer has determined, in accordance with Section 1.3, that directors shall be elected at such special meeting and provided further that the nomination made by the stockholder is for one of the director positions that the Board of Directors, the Chairman of the Board or the Chief Executive Officer, as the case may be, has determined will be filled at such special meeting, not earlier than the 120th day prior to such special meeting and not later than the close of business on the later of (x) the 90th day prior to such special meeting and (y) the tenth day following the day on which notice of the date of such special meeting was mailed or public disclosure of the date of such special meeting was made, whichever first occurs. In no event shall the adjournment or postponement of a meeting (or the public disclosure thereof) commence a new time period (or extend any time period) for the giving of a stockholder’s notice.

The stockholder’s notice to the Secretary shall set forth: (A) as to each proposed nominee (1) such person’s name, age, business address and, if known, residence address, (2) such person’s principal occupation or employment, (3) the class and series and number of shares of stock of the corporation that are, directly or indirectly, owned, beneficially or of record, by such

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person, (4) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among (x) the stockholder, the beneficial owner, if any, on whose behalf the nomination is being made and the respective affiliates and associates of, or others acting in concert with, such stockholder and such beneficial owner, on the one hand, and (y) each proposed nominee, and his or her respective affiliates and associates, or others acting in concert with such nominee(s), on the other hand, including all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made or any affiliate or associate thereof or person acting in concert therewith were the “registrant” for purposes of such Item and the proposed nominee were a director or executive officer of such registrant, and (5) any other information concerning such person that must be disclosed as to nominees in proxy solicitations pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and (B) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is being made (1) the name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner, (2) the class and series and number of shares of stock of the corporation that are, directly or indirectly, owned, beneficially or of record, by such stockholder and such beneficial owner, (3) a description of any agreement, arrangement or understanding between or among such stockholder and/or such beneficial owner and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are being made or who may participate in the solicitation of proxies in favor of electing such nominee(s), (4) a description of any agreement, arrangement or understanding (including any derivative or short positions, swaps, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into by, or on behalf of, such stockholder or such beneficial owner, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or such beneficial owner with respect to shares of stock of the corporation, (5) any other information relating to such stockholder and such beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (6) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the person(s) named in its notice and (7) a representation whether such stockholder and/or such beneficial owner intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation’s outstanding capital stock reasonably believed by such stockholder or such beneficial owner to be sufficient to elect the nominee (and such representation shall be included in any such proxy statement and form of proxy) and/or (y) otherwise to solicit proxies from stockholders in support of such nomination (and such representation shall be included in any such solicitation materials). Not later than 10 days after the record date for the meeting, the information required by Items (A)(1)-(5) and (B)(1)-(5) of the prior sentence shall be supplemented by the stockholder giving the notice to provide updated information as of the record date. In addition, to be effective, the stockholder’s notice must be accompanied by the written consent of the proposed nominee to serve as a director if elected. The corporation may require any proposed nominee to furnish such other information as the corporation may reasonably require to determine the eligibility of such proposed nominee to

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serve as a director of the corporation or whether such nominee would be independent under applicable Securities and Exchange Commission and stock exchange rules and the corporation’s publicly disclosed corporate governance guidelines. A stockholder shall not have complied with this Section 1.10(b) if the stockholder (or beneficial owner, if any, on whose behalf the nomination is made) solicits or does not solicit, as the case may be, proxies in support of such stockholder’s nominee in contravention of the representations with respect thereto required by this Section 1.10.

(c)The chairman of any meeting shall have the power and duty to determine whether a nomination was made in accordance with the provisions of this Section 1.10 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s nominee in compliance with the representations with respect thereto required by this Section 1.10), and if the chairman should determine that a nomination was not made in accordance with the provisions of this Section 1.10, the chairman shall so declare to the meeting and such nomination shall not be brought before the meeting.

(d)Except as otherwise required by law, nothing in this Section 1.10 shall obligate the corporation or the Board of Directors to include in any proxy statement or other stockholder communication distributed on behalf of the corporation or the Board of Directors information with respect to any nominee for director submitted by a stockholder.

(e)Notwithstanding the foregoing provisions of this Section 1.10, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting to present a nomination, such nomination shall not be brought before the meeting, notwithstanding that proxies in respect of such nominee may have been received by the corporation. For purposes of this Section 1.10, to be considered a “qualified representative of the stockholder”, a person must be authorized by a written instrument executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such written instrument or electronic transmission, or a reliable reproduction of the written instrument or electronic transmission, at the meeting of stockholders.

(f)For purposes of this Section 1.10, “public disclosure” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

1.11Notice of Business at Annual Meetings.

(a)At any annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (1) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (2) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (3) properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, (i) if such business relates to the nomination of a person for

5

election as a director of the corporation, the procedures in Section 1.10 must be complied with and (ii) if such business relates to any other matter, the business must constitute a proper matter under Delaware law for stockholder action and the stockholder must (x) have given timely notice thereof in writing to the Secretary in accordance with the procedures in Section 1.11(b), (y) be a stockholder of record on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such annual meeting and (z) be entitled to vote at such annual meeting.

(b)To be timely, a stockholder’s notice must be received in writing by the Secretary at the principal executive offices of the corporation not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that (x) in the case of the annual meeting of stockholders of the corporation to be held in 2011 or (y) in the event that the date of the annual meeting in any other year is advanced by more than 20 days, or delayed by more than 60 days, from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be so received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of (A) the 90th day prior to such annual meeting and (B) the tenth day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs. In no event shall the adjournment or postponement of an annual meeting (or the public disclosure thereof) commence a new time period (or extend any time period) for the giving of a stockholder’s notice.

The stockholder’s notice to the Secretary shall set forth: (A) as to each matter the stockholder proposes to bring before the annual meeting (1) a brief description of the business desired to be brought before the annual meeting, (2) the text of the proposal (including the exact text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend the By-laws, the exact text of the proposed amendment), and (3) the reasons for conducting such business at the annual meeting, and (B) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is being made (1) the name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner, (2) the class and series and number of shares of stock of the corporation that are, directly or indirectly, owned, beneficially or of record, by such stockholder and such beneficial owner, (3) a description of any material interest of such stockholder or such beneficial owner and the respective affiliates and associates of, or others acting in concert with, such stockholder or such beneficial owner in such business, (4) a description of any agreement, arrangement or understanding between or among such stockholder and/or such beneficial owner and any other person or persons (including their names) in connection with the proposal of such business or who may participate in the solicitation of proxies in favor of such proposal, (5) a description of any agreement, arrangement or understanding (including any derivative or short positions, swaps, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into by, or on behalf of, such stockholder or such beneficial owner, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or such beneficial owner with respect to shares of stock of the corporation, (6) any other information relating to such stockholder and such beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the business proposed pursuant to Section 14 of the

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Exchange Act and the rules and regulations promulgated thereunder, (7) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting and (8) a representation whether such stockholder and/or such beneficial owner intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation’s outstanding capital stock required to approve or adopt the proposal (and such representation shall be included in any such proxy statement and form of proxy) and/or (y) otherwise to solicit proxies from stockholders in support of such proposal (and such representation shall be included in any such solicitation materials). Not later than 10 days after the record date for the meeting, the information required by Items (A)(3) and (B)(1)-(6) of the prior sentence shall be supplemented by the stockholder giving the notice to provide updated information as of the record date. Notwithstanding anything in these By-laws to the contrary, no business shall be conducted at any annual meeting of stockholders except in accordance with the procedures in this Section 1.11; provided that any stockholder proposal which complies with Rule 14a-8 of the proxy rules (or any successor provision) promulgated under the Exchange Act and is to be included in the corporation’s proxy statement for an annual meeting of stockholders shall be deemed to comply with the notice requirements of this Section 1.11. A stockholder shall not have complied with this Section 1.11(b) if the stockholder (or beneficial owner, if any, on whose behalf the proposal is made) solicits or does not solicit, as the case may be, proxies in support of such stockholder’s proposal in contravention of the representations with respect thereto required by this Section 1.11.

(c)The chairman of any annual meeting shall have the power and duty to determine whether business was properly brought before the annual meeting in accordance with the provisions of this Section 1.11 (including whether the stockholder or beneficial owner, if any, on whose behalf the proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s proposal in compliance with the representation with respect thereto required by this Section 1.11), and if the chairman should determine that business was not properly brought before the annual meeting in accordance with the provisions of this Section 1.11, the chairman shall so declare to the meeting and such business shall not be brought before the annual meeting.

(d)Except as otherwise required by law, nothing in this Section 1.11 shall obligate the corporation or the Board of Directors to include in any proxy statement or other stockholder communication distributed on behalf of the corporation or the Board of Directors information with respect to any proposal submitted by a stockholder.

(e)Notwithstanding the foregoing provisions of this Section 1.11, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting to present business, such business shall not be considered, notwithstanding that proxies in respect of such business may have been received by the corporation.

(f)For purposes of this Section 1.11, the terms “qualified representative of the stockholder” and “public disclosure” shall have the same meaning as in Section 1.10.

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1.12Conduct of Meetings.

(a)Meetings of stockholders shall be presided over by the Chairman of the Board, if any, or in the Chairman’s absence by the Vice Chairman of the Board, if any, or in the Vice Chairman’s absence by the Chief Executive Officer, or in the Chief Executive Officer’s absence, by the President, or in the President’s absence by a Vice President, or in the absence of all of the foregoing persons by a chairman designated by the Board of Directors. The Secretary shall act as secretary of the meeting, but in the Secretary’s absence the chairman of the meeting may appoint any person to act as secretary of the meeting.

(b)The Board of Directors may adopt by resolution such rules, regulations and procedures for the conduct of any meeting of stockholders of the corporation as it shall deem appropriate including, without limitation, such guidelines and procedures as it may deem appropriate regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting. Except to the extent inconsistent with such rules, regulations and procedures as adopted by the Board of Directors, the chairman of any meeting of stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the corporation, their duly authorized and constituted proxies or such other persons as shall be determined; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

(c)The chairman of the meeting shall announce at the meeting when the polls for each matter to be voted upon at the meeting will be opened and closed. After the polls close, no ballots, proxies or votes or any revocations or changes thereto may be accepted.

(d)In advance of any meeting of stockholders, the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President shall appoint one or more inspectors of election to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is present, ready and willing to act at a meeting of stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by law, inspectors may be officers, employees or agents of the corporation. Each inspector, before entering upon the discharge of such inspector’s duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by law. Every vote taken by ballots shall be counted by a duly appointed inspector or duly appointed inspectors.

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1.13No Action by Consent in Lieu of a Meeting. Stockholders of the corporation may not take any action by written consent in lieu of a meeting.

ARTICLE II

DIRECTORS

2.1General Powers. The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors, who may exercise all of the powers of the corporation except as otherwise provided by law or the Certificate of Incorporation.

2.2Number, Election and Qualification. Subject to the rights of holders of any series of Preferred Stock to elect directors, the number of directors of the corporation shall be established by the Board of Directors. Election of directors need not be by written ballot. Directors need not be stockholders of the corporation.

2.3Chairman of the Board; Vice Chairman of the Board. The Board of Directors may appoint from its members a Chairman of the Board and a Vice Chairman of the Board, neither of whom need be an employee or officer of the corporation. If the Board of Directors appoints a Chairman of the Board, such Chairman shall perform such duties and possess such powers as are assigned by the Board of Directors and, if the Chairman of the Board is also designated as the corporation’s Chief Executive Officer, shall have the powers and duties of the Chief Executive Officer prescribed in Section 3.7 of these By-laws. If the Board of Directors appoints a Vice Chairman of the Board, such Vice Chairman shall perform such duties and possess such powers as are assigned by the Board of Directors. Unless otherwise provided by the Board of Directors, the Chairman of the Board or, in the Chairman’s absence, the Vice Chairman of the Board, if any, shall preside at all meetings of the Board of Directors.

2.4Classes of Directors. Subject to the rights of holders of any series of Preferred Stock to elect directors, the Board of Directors shall be and is divided into three classes: Class I, Class II and Class III.Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. The allocation of directors among classes shall be determined by resolution of the Board of Directors.

2.5Terms of Office. Subject to the rights of holders of any series of Preferred Stock to elect directors, each director shall serve for a term ending on the date of the third annual meeting of stockholders following the annual meeting of stockholders at which such director was elected; provided that each director initially assigned to Class I shall serve for a term expiring at the corporation’s first annual meeting of stockholders held after the effectiveness of these Amended and Restated By-laws; each director initially assigned to Class II shall serve for a term expiring at the corporation’s second annual meeting of stockholders held after the effectiveness of these Amended and Restated By-laws; and each director initially assigned to Class III shall serve for a term expiring at the corporation’s third annual meeting of stockholders held after the effectiveness of these Amended and Restated By-laws; provided further, that the term of each director shall continue until the election and qualification of his or her successor and be subject to his or her earlier death, resignation or removal.

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2.6Quorum. The greater of (a) a majority of the directors at any time in office and (b) one-third of the number of directors established by the Board of Directors pursuant to Section 2.2 of these By-laws shall constitute a quorum of the Board of Directors. If at any meeting of the Board of Directors there shall be less than such a quorum, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present.

2.7Action at Meeting. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, unless a greater number is required by law or by the Certificate of Incorporation.

2.8Removal. Subject to the rights of holders of any series of Preferred Stock, directors of the corporation may be removed only for cause and only by the affirmative vote of the holders of at least 75% of the votes which all the stockholders would be entitled to cast in any annual election of directors or class of directors.

2.9Vacancies. Subject to the rights of holders of any series of Preferred Stock, any vacancy or newly-created directorship on the Board of Directors, however occurring, shall be filled only by vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director and shall not be filled by the stockholders. A director elected to fill a vacancy shall hold office until the next election of the class for which such director shall have been chosen, subject to the election and qualification of a successor or until such director’s earlier death, resignation or removal.

2.10Resignation. Any director may resign by delivering a resignation in writing or by electronic transmission to the corporation at its principal office or to the Chairman of the Board, the Chief Executive Officer, the President or the Secretary. Such resignation shall be effective upon delivery unless it is specified to be effective at some later time or upon the happening of some later event.

2.11Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place as shall be determined from time to time by the Board of Directors; provided that any director who is absent when such a determination is made shall be given notice of the determination. A regular meeting of the Board of Directors may be held without notice immediately after and at the same place as the annual meeting of stockholders.

2.12Special Meetings. Special meetings of the Board of Directors may be held at any time and place designated in a call by the Chairman of the Board, the Chief Executive Officer, the President, two or more directors, or by one director in the event that there is only a single director in office.

2.13Notice of Special Meetings. Notice of the date, place and time of any special meeting of directors shall be given to each director by the Secretary or by the officer or one of the directors calling the meeting. Notice shall be duly given to each director (a) in person or by telephone at least 24 hours in advance of the meeting, (b) by sending written notice by reputable overnight courier, telecopy, facsimile or electronic transmission, or delivering written notice by

10

hand, to such director’s last known business, home or electronic transmission address at least 48 hours in advance of the meeting, or (c) by sending written notice by first-class mail to such director’s last known business or home address at least 72 hours in advance of the meeting. A notice or waiver of notice of a meeting of the Board of Directors need not specify the purposes of the meeting.

2.14Meetings by Conference Communications Equipment. Directors may participate in meetings of the Board of Directors or any committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting.

2.15Action by Consent. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent to the action in writing or by electronic transmission, and the written consents or electronic transmissions are filed with the minutes of proceedings of the Board of Directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

2.16Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation with such lawfully delegable powers and duties as the Board of Directors thereby confers, to serve at the pleasure of the Board of Directors. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members of the committee present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors and subject to the provisions of law, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation and may authorize the seal of the corporation to be affixed to all papers which may require it. Each such committee shall keep minutes and make such reports as the Board of Directors may from time to time request. Except as the Board of Directors may otherwise determine, any committee may make rules for the conduct of its business, but unless otherwise provided by the directors or in such rules, its business shall be conducted as nearly as possible in the same manner as is provided in these By-laws for the Board of Directors. Except as otherwise provided in the Certificate of Incorporation, these By-laws, or the resolution of the Board of Directors designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.

2.17Compensation of Directors. Directors may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings as the Board of Directors may from time to time determine. No such payment shall preclude any director from

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serving the corporation or any of its parent or subsidiary entities in any other capacity and receiving compensation for such service.

ARTICLE III

OFFICERS

3.1Titles. The officers of the corporation shall consist of a Chief Executive Officer, a President, a Secretary, a Treasurer and such other officers with such other titles as the Board of Directors shall determine, including one or more Vice Presidents, Assistant Treasurers and Assistant Secretaries. The Board of Directors may appoint such other officers as it may deem appropriate.

3.2Election. The Chief Executive Officer, President, Treasurer and Secretary shall be elected annually by the Board of Directors at its first meeting following the annual meeting of stockholders. Other officers may be appointed by the Board of Directors at such meeting or at any other meeting.

3.3Qualification. No officer need be a stockholder. Any two or more offices may be held by the same person.

3.4Tenure. Except as otherwise provided by law, by the Certificate of Incorporation or by these By-laws, each officer shall hold office until such officer’s successor is elected and qualified, unless a different term is specified in the resolution electing or appointing such officer, or until such officer’s earlier death, resignation or removal.

3.5Resignation and Removal. Any officer may resign by delivering a written resignation to the corporation at its principal office or to the Chief Executive Officer, the President or the Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some later time or upon the happening of some later event. Any officer may be removed at any time, with or without cause, by vote of a majority of the directors then in office. Except as the Board of Directors may otherwise determine, no officer who resigns or is removed shall have any right to any compensation as an officer for any period following such officer’s resignation or removal, or any right to damages on account of such removal, whether such officer’s compensation be by the month or by the year or otherwise, unless such compensation is expressly provided for in a duly authorized written agreement with the corporation.

3.6Vacancies. The Board of Directors may fill any vacancy occurring in any office for any reason and may, in its discretion, leave unfilled for such period as it may determine any offices other than those of Chief Executive Officer, President, Treasurer and Secretary. Each such successor shall hold office for the unexpired term of such officer’s predecessor and until a successor is elected and qualified, or until such officer’s earlier death, resignation or removal.

3.7President; Chief Executive Officer. Unless the Board of Directors has designated another person as the corporation’s Chief Executive Officer, the President shall be the Chief Executive Officer of the corporation. The Chief Executive Officer shall have general charge and supervision of the business of the corporation subject to the direction of the Board of Directors, and shall perform all duties and have all powers that are commonly incident to the office of chief

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executive or that are delegated to such officer by the Board of Directors. The President shall perform such other duties and shall have such other powers as the Board of Directors or the Chief Executive Officer (if the President is not the Chief Executive Officer) may from time to time prescribe. In the event of the absence, inability or refusal to act of the Chief Executive Officer or the President (if the President is not the Chief Executive Officer), the Vice President (or if there shall be more than one, the Vice Presidents in the order determined by the Board of Directors) shall perform the duties of the Chief Executive Officer and when so performing such duties shall have all the powers of and be subject to all the restrictions upon the Chief Executive Officer.

3.8Vice Presidents. Each Vice President shall perform such duties and possess such powers as the Board of Directors or the Chief Executive Officer may from time to time prescribe. The Board of Directors may assign to any Vice President the title of Executive Vice President, Senior Vice President or any other title selected by the Board of Directors.

3.9Secretary and Assistant Secretaries. The Secretary shall perform such duties and shall have such powers as the Board of Directors or the Chief Executive Officer may from time to time prescribe. In addition, the Secretary shall perform such duties and have such powers as are incident to the office of the secretary, including without limitation the duty and power to give notices of all meetings of stockholders and special meetings of the Board of Directors, to attend all meetings of stockholders and the Board of Directors and keep a record of the proceedings, to maintain a stock ledger and prepare lists of stockholders and their addresses as required, to be custodian of corporate records and the corporate seal and to affix and attest to the same on documents.

Any Assistant Secretary shall perform such duties and possess such powers as the Board of Directors, the Chief Executive Officer or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal to act of the Secretary, the Assistant Secretary (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Secretary.

In the absence of the Secretary or any Assistant Secretary at any meeting of stockholders or directors, the chairman of the meeting shall designate a temporary secretary to keep a record of the meeting.

3.10Treasurer and Assistant Treasurers. The Treasurer shall perform such duties and shall have such powers as may from time to time be assigned by the Board of Directors or the Chief Executive Officer. In addition, the Treasurer shall perform such duties and have such powers as are incident to the office of treasurer, including without limitation the duty and power to keep and be responsible for all funds and securities of the corporation, to deposit funds of the corporation in depositories selected in accordance with these By-laws, to disburse such funds as ordered by the Board of Directors, to make proper accounts of such funds, and to render as required by the Board of Directors statements of all such transactions and of the financial condition of the corporation.

The Assistant Treasurers shall perform such duties and possess such powers as the Board of Directors, the Chief Executive Officer or the Treasurer may from time to time prescribe. In the event of the absence, inability or refusal to act of the Treasurer, the Assistant Treasurer (or if

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there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Treasurer.

3.11Salaries. Officers of the corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed or allowed from time to time by the Board of Directors.

3.12Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.

ARTICLE IV

CAPITAL STOCK

4.1Issuance of Stock. Subject to the provisions of the Certificate of Incorporation, the whole or any part of any unissued balance of the authorized capital stock of the corporation or the whole or any part of any shares of the authorized capital stock of the corporation held in the corporation’s treasury may be issued, sold, transferred or otherwise disposed of by vote of the Board of Directors in such manner, for such lawful consideration and on such terms as the Board of Directors may determine.

4.2Stock Certificates; Uncertificated Shares. The shares of the corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of the corporation’s stock shall be uncertificated shares. Every holder of stock of the corporation represented by certificates shall be entitled to have a certificate, in such form as may be prescribed by law and by the Board of Directors, representing the number of shares held by such holder registered in certificate form. Each such certificate shall be signed in a manner that complies with Section 158 of the General Corporation Law of the State of Delaware.

Each certificate for shares of stock which are subject to any restriction on transfer pursuant to the Certificate of Incorporation, these By-laws, applicable securities laws or any agreement among any number of stockholders or among such holders and the corporation shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restriction.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of each certificate representing shares of such class or series of stock, provided that in lieu of the foregoing requirements there may be set forth on the face or back of each certificate representing shares of such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests a copy of the full text of the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

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Within a reasonable time after the issuance or transfer of uncertificated shares, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Sections 151, 202(a) or 218(a) of the General Corporation Law of the State of Delaware or, with respect to Section 151 of General Corporation Law of the State of Delaware, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

4.3Transfers. Shares of stock of the corporation shall be transferable in the manner prescribed by law and in these By-laws. Transfers of shares of stock of the corporation shall be made only on the books of the corporation or by transfer agents designated to transfer shares of stock of the corporation. Subject to applicable law, shares of stock represented by certificates shall be transferred only on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or the authenticity of signature as the corporation or its transfer agent may reasonably require. Except as may be otherwise required by law, by the Certificate of Incorporation or by these By- laws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect to such stock, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the corporation in accordance with the requirements of these By-laws.

4.4Lost, Stolen or Destroyed Certificates. The corporation may issue a new certificate of stock in place of any previously issued certificate alleged to have been lost, stolen or destroyed, upon such terms and conditions as the Board of Directors may prescribe, including the presentation of reasonable evidence of such loss, theft or destruction and the giving of such indemnity and posting of such bond as the Board of Directors may require for the protection of the corporation or any transfer agent or registrar.

4.5Record Date. The Board of Directors may fix in advance a date as a record date for the determination of the stockholders entitled to notice of or to vote at any meeting of stockholders, or entitled to receive payment of any dividend or other distribution or allotment of any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action. Such record date shall not precede the date on which the resolution fixing the record date is adopted, and such record date shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action to which such record date relates.

If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day before the day on which notice is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is held. If no record date is fixed, the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to such purpose.

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A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

4.6Regulations. The issue, transfer, conversion and registration of shares of stock of the corporation shall be governed by such other regulations as the Board of Directors may establish.

ARTICLE V

GENERAL PROVISIONS

5.1Fiscal Year. Except as from time to time otherwise designated by the Board of Directors, the fiscal year of the corporation shall begin on the first day of January of each year and end on the last day of December in each year.

5.2Corporate Seal. The corporate seal shall be in such form as shall be approved by the Board of Directors.

5.3Waiver of Notice. Whenever notice is required to be given by law, by the Certificate of Incorporation or by these By-laws, a written waiver signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before, at or after the time of the event for which notice is to be given, shall be deemed equivalent to notice required to be given to such person. Neither the business nor the purpose of any meeting need be specified in any such waiver. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

5.4Voting of Securities. Except as the Board of Directors may otherwise designate, the Chief Executive Officer, the President or the Treasurer may waive notice of, vote, or appoint any person or persons to vote, on behalf of the corporation at, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact for this corporation (with or without power of substitution) at, any meeting of stockholders or securityholders of any other entity, the securities of which may be held by this corporation.

5.5Evidence of Authority. A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by the stockholders, directors, a committee or any officer or representative of the corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action.

5.6Certificate of Incorporation. All references in these By-laws to the Certificate of Incorporation shall be deemed to refer to the Certificate of Incorporation of the corporation, as amended and in effect from time to time.

5.7Severability. Any determination that any provision of these By-laws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these By-laws.

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5.8Pronouns. All pronouns used in these By-laws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.

5.9Designated Engineer in the State of Washington. The Board of Directors, as required by the Revised Code of Washington, has appointed a licensed professional engineer in the state of Washington the Designated Engineer as being in responsible charge of the corporation’s engineering decisions pertaining to engineering activities in that state. The Designated Engineer named in the resolution as being in responsible charge, or an engineer under the Designated Engineer’s direct supervision, shall make all engineering or land surveying decisions pertaining to engineering or land surveying activities in the state of Washington. The Board of Directors grants and delegates to the appropriate officers of the corporation the authority to designate each successor Designated Engineer as being in responsible charge for the practice of engineering and to notify the Washington Board of Registration for Professional Engineers and Land Surveyors of the appointment of each successor Designated Engineer within 30 days after the effective date of the appointment.”

ARTICLE VI

AMENDMENTS

These By-laws may be altered, amended or repealed, in whole or in part, or new By-laws may be adopted by the Board of Directors or by the stockholders as provided in the Certificate of Incorporation.

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EX-31.1

Exhibit 31.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

I, George P. Sakellaris, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Ameresco, Inc. (the “Registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5.	The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: July 31, 2014	/s/ George P. Sakellaris
	George P. Sakellaris
	President and Chief Executive Officer (principal executive officer)

EX-31.2

Exhibit 31.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION

I, Andrew B. Spence, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Ameresco, Inc. (the “Registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5.	The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: July 31, 2014	/s/ Andrew B. Spence
	Andrew B. Spence
	Vice President and Chief Financial Officer (principal financial officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT

TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Ameresco, Inc. (the “Company”) to which this certification is attached and as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company hereby certifies, pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: July 31, 2014		/s/ George P. Sakellaris
		George P. Sakellaris
		President and Chief Executive Officer (principal executive officer)
Date: July 31, 2014		/s/ Andrew B. Spence
		Andrew B. Spence
		Vice President and Chief Financial Officer (principal financial officer)

XML

Derivative Instruments and Hedging Activities- Fair Value of Derivative Instruments on the Balance Sheet (Details) (Recurring, Level 2, Derivatives Designated as Hedging Instruments:, Interest rate swap instruments, USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Other assets
Derivatives, Fair Value [Line Items]
Interest rate swap instruments	$ 176	$ 1,553
Other liabilities
Derivatives, Fair Value [Line Items]
Derivative Liabilities	$ 4,042	$ 4,268

XML

Goodwill and Intangible Assets- Goodwill (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014		Dec. 31, 2013
Goodwill [Roll Forward]
Balance, December 31, 2013	$ 53,074
Goodwill acquired during the year	2,575
Fair value adjustment	641	[1]
Currency effects	170
Balance, June 30, 2014	56,460
Accumulated Goodwill Impairment	(1,016)		(1,016)
Decrease to the recorded fair value of certain acquired intangible assets	(801)
Deferred tax liabilities, goodwill and intangible Assets	160
U.S. Regions
Goodwill [Roll Forward]
Balance, December 31, 2013	24,759
Goodwill acquired during the year	0
Fair value adjustment	0
Currency effects	0
Balance, June 30, 2014	24,759
Accumulated Goodwill Impairment	0		0
U.S. Federal
Goodwill [Roll Forward]
Balance, December 31, 2013	3,375
Goodwill acquired during the year	0
Fair value adjustment	0
Currency effects	0
Balance, June 30, 2014	3,375
Accumulated Goodwill Impairment	0		0
Canada
Goodwill [Roll Forward]
Balance, December 31, 2013	4,124
Goodwill acquired during the year	0
Fair value adjustment	0
Currency effects	(13)
Balance, June 30, 2014	4,111
Accumulated Goodwill Impairment	(1,016)		(1,016)
Small-Scale Infrastructure
Goodwill [Roll Forward]
Balance, December 31, 2013	0
Goodwill acquired during the year	0
Fair value adjustment	0
Currency effects	0
Balance, June 30, 2014	0
Accumulated Goodwill Impairment	0		0
Other
Goodwill [Roll Forward]
Balance, December 31, 2013	20,816
Goodwill acquired during the year	2,575
Fair value adjustment	641	[1]
Currency effects	183
Balance, June 30, 2014	24,215
Accumulated Goodwill Impairment	$ 0		$ 0

[1] Fair value adjustment represents a final purchase accounting adjustment to decrease the recorded fair value of certain acquired intangible assets totaling $801, net of a $160 deferred tax liability adjustment, related to the Company’s prior year acquisition of The Energy Services Partnership Limited and ESP Response Limited (together “ESP”).

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Summary of Significant Accounting Policies- Accounts Receivable (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Changes in the Allowance for Doubtful Accounts [Roll Forward]
Allowance for doubtful accounts, beginning of period	$ 1,519	$ 1,174
Charges to costs and expenses	266	371
Account write-offs and other	(199)	(24)
Allowance for doubtful accounts, end of period	$ 1,586	$ 1,521

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Business Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting Information [Line Items]
Revenues	$ 142,558	$ 126,252	$ 243,289	$ 236,388
Interest income	11	15	24	29
Interest expense	766	1,013	1,947	1,531
Depreciation and amortization of intangible assets	5,208	4,150	10,013	9,198
Unallocated corporate activity	(6,935)	(6,396)	(15,003)	(12,625)
Income before Income Taxes and Unallocated Corporate Expenses	9,921	4,038	9,472	7,720
U.S. Regions
Segment Reporting Information [Line Items]
Revenues	62,785	68,100	103,791	122,798
Interest income	0	0	0	0
Interest expense	0	0	0	0
Depreciation and amortization of intangible assets	333	446	647	909
Unallocated corporate activity	0	0	0	0
Income before Income Taxes and Unallocated Corporate Expenses	6,318	4,679	6,602	6,791
U.S. Federal
Segment Reporting Information [Line Items]
Revenues	24,791	12,745	36,141	25,708
Interest income	0	0	0	0
Interest expense	0	0	0	0
Depreciation and amortization of intangible assets	292	288	564	525
Unallocated corporate activity	0	0	0	0
Income before Income Taxes and Unallocated Corporate Expenses	2,265	(781)	2,265	(120)
Canada
Segment Reporting Information [Line Items]
Revenues	19,768	16,125	36,067	29,785
Interest income	0	12	1	26
Interest expense	258	514	670	672
Depreciation and amortization of intangible assets	414	430	820	784
Unallocated corporate activity	0	0	0	0
Income before Income Taxes and Unallocated Corporate Expenses	(1,710)	(1,204)	(3,069)	(1,934)
Small Scale Infrastructure
Segment Reporting Information [Line Items]
Revenues	14,206	10,230	25,355	20,574
Interest income	11	1	23	1
Interest expense	508	499	1,277	859
Depreciation and amortization of intangible assets	3,289	2,437	6,247	5,894
Unallocated corporate activity	0	0	0	0
Income before Income Taxes and Unallocated Corporate Expenses	3,143	1,489	3,815	2,627
All Other
Segment Reporting Information [Line Items]
Revenues	21,008	19,052	41,935	37,523
Interest income	0	2	0	2
Interest expense	0	0	0	0
Depreciation and amortization of intangible assets	880	549	1,735	1,086
Unallocated corporate activity	0	0	0	0
Income before Income Taxes and Unallocated Corporate Expenses	$ (95)	$ (145)	$ (141)	$ 356

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Fair Value Measurement- Fair Value of Liabilities Measured on a Recurring Basis (Details) (Derivatives Designated as Hedging Instruments:, Recurring, Level 2, Interest rate swap instruments, USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Other assets
Assets:
Interest rate swap instruments	$ 176	$ 1,553
Other liabilities
Liabilities:
Interest rate swap instruments	$ 4,042	$ 4,268

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Description of Business

6 Months Ended

Jun. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

DESCRIPTION OF BUSINESS

Ameresco, Inc. (including its subsidiaries, the “Company”) was organized as a Delaware corporation on April 25, 2000. The Company is a provider of energy efficiency solutions for facilities throughout North America. The Company provides solutions, both products and services, that enable customers to reduce their energy consumption, lower their operating and maintenance costs and realize environmental benefits. The Company’s comprehensive set of services includes upgrades to a facility’s energy infrastructure and the construction and operation of small-scale renewable energy plants. It also sells certain photovoltaic (“PV”) equipment worldwide. The Company operates in the United States, Canada and Europe.

The Company is 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) the sale of energy from the Company’s generating assets; and 3) direct payment for photovoltaic equipment and systems.

The condensed consolidated financial statements as of June 30, 2014, and for the six months ended June 30, 2014 and 2013, are unaudited. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted. The interim condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation in conformity with GAAP. The interim condensed consolidated financial statements, and notes thereto, should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2013, and notes thereto, included in the Company’s annual report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on March 17, 2014. The results of operations for the interim periods should not be considered indicative of results to be expected for the full year.

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Long Term Debt- Term Loan (Details) (Term Loan, Variable Rate Construction Term Loan, USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Oct. 31, 2012
Term Loan | Variable Rate Construction Term Loan
Debt Instrument [Line Items]
Original principal amount		$ 47,234
Debt outstanding	$ 44,053
Weighted average interest rate (percent)	3.24%

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Summary of Significant Accounting Policies- Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014
Accounting Policies [Abstract]
Carrying value of fixed-rate long-term debt in excess of fair value	$ 103

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Summary of Significant Accounting Policies- Asset Retirement Obligations (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Accounting Policies [Abstract]
AROs	$ 0	$ 0

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Long Term Debt- Senior Secured Credit Facility - Revolver and Term Loan (Details) (USD $)	0 Months Ended					6 Months Ended				0 Months Ended
	Mar. 12, 2014 fiscal_quarter	Mar. 12, 2014	Jun. 30, 2014 Revolving Credit Facility	Mar. 12, 2014 Revolving Credit Facility	Jun. 30, 2011 Revolving Credit Facility	Jun. 30, 2014 Term Loan	Nov. 30, 2013 Term Loan	Oct. 31, 2013 Term Loan	Jun. 30, 2011 Term Loan	Mar. 12, 2014 LIBOR Revolving Credit Facility
Line of Credit Facility [Line Items]
Current borrowing capacity					$ 60,000,000				$ 40,000,000
Additional borrowing capacity					25,000,000
Amount outstanding			0			22,857,000
Principal payments due in quarterly installments						1,429,000
Debt covenant minimum EBITDA requirement							40,000,000	30,000,000
Prime rate (percent)										0.50%
Basis spread on variable rate (percent)										2.00%
Increase (decrease) in basis spread on prime rate (percent)				0.25%
Increase in basis spread on variable rate (basis points)				0.25%
Number of consecutive fiscal quarters with waived compliance requirements (fiscal quarters)	4
Debt covenant minimum EBITDA reduced requirement, through March 31, 2014				16,500,000
Debt covenant minimum EBITDA reduced requirement, through June 2014				22,000,000
Debt covenant minimum EBITDA reduced requirement, through September 2014				24,000,000
Debt covenant minimum EBITDA reduced requirement, through December 2014				$ 27,000,000
Debt covenant minimum, Funded Debt to EBITDA, through March 2014		2.5
Debt covenant minimum, Funded Debt to EBITDA, through June 2014		2.25
Debt covenant minimum, Funded Debt to EBITDA, through September 2014		2.0
Cash flow to debt service ratio, through March 2014		1.25
Cash flow to debt service ratio, through June 2014		1.5

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Summary of Significant Accounting Policies-Share-based Compensation (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	$ 707	$ 665	$ 1,425	$ 1,336
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested stock options unrecognized compensation expense	$ 4,867		$ 4,867
Non-vested stock options unrecognized compensation expense, weighted-average period of recognition			3 years 26 days

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Summary of Significant Accounting Policies- Derivative Financial Instruments (Details) (Interest rate swap instruments, USD $) In Thousands, unless otherwise specified	12 Months Ended			1 Months Ended	3 Months Ended	1 Months Ended			1 Months Ended
	Dec. 31, 2007 contract	Dec. 31, 2007 Interest Rate Swap Contract 1	Dec. 31, 2007 Interest Rate Swap Contract 2	Mar. 31, 2010 Interest Rate Swap Contract 3	Jun. 30, 2014 Interest Rate Swap Contract 3	Jul. 31, 2011 Interest Rate Swap Contract 4	Oct. 31, 2012 Interest Rate Swap Contract 5 swap	Sep. 30, 2013 Interest Rate Swap Contract 5	Oct. 31, 2012 Interest Rate Swap Contract 6 swap
Derivative [Line Items]
Number of instruments held (contracts)	2						2		2
Term of interest rate swap contract	15 years			14 years		5 years	8 years		8 years
Initial notional amount of interest rate swaps		$ 13,081	$ 3,256	$ 27,900		$ 38,571	$ 16,750		$ 25,377
Interest rate swaps, variable to fixed interest rates (percent)		5.40%	5.30%	6.99%		1.965%	1.71%		3.70%
Interest Expense Reclassified from Accumulated Other Comprehensive Income into Other Expenses, Net					566
Future increase in notional amount								$ 42,247

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:
Net income (loss)	$ (5,562)	$ (3,705)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation of project assets	7,430	6,879
Depreciation of property and equipment	1,677	1,610
Amortization of deferred financing fees	570	332
Amortization of intangible assets	1,878	1,789
Provision for bad debts	266	371
Unrealized gain on interest rate swaps	(1,197)	(683)
Stock-based compensation expense	1,425	1,336
Deferred income taxes	4,363	(2,871)
Excess tax benefits from stock-based compensation arrangements	0	(297)
Changes in operating assets and liabilities:
Restricted cash	624	(2,122)
Accounts receivable	10,885	6,856
Accounts receivable retainage	6,494	(1,573)
Federal ESPC receivable	(18,541)	(13,785)
Inventory	1,000	(2,047)
Costs and estimated earnings in excess of billings	15,157	9,931
Prepaid expenses and other current assets	(2,538)	(1,526)
Project development costs	(1,664)	(2,430)
Other assets	(1,854)	(759)
Accounts payable, accrued expenses and other current liabilities	(6,898)	(36,186)
Billings in excess of cost and estimated earnings	(1,399)	371
Other liabilities	1,082	(73)
Income taxes payable	(7,264)	(365)
Cash flows from operating activities	5,934	(38,947)
Cash flows from investing activities:
Purchases of property and equipment	(1,195)	(1,540)
Purchases of project assets	(10,970)	(31,619)
Grant awards received on project assets	3,727	1,580
Proceeds from sales of assets	0	7
Acquisitions, net of cash received	(4,850)	(9,346)
Cash flows from investing activities	(13,288)	(40,918)
Cash flows from financing activities:
Excess tax benefits from stock-based compensation arrangements	0	297
Payments of financing fees	(354)	(504)
Proceeds from exercises of options	887	1,250
Proceeds from senior secured credit facility	0	15,000
Proceeds from long-term debt financing	0	9,434
Proceeds from Federal ESPC projects	13,976	13,366
Non-controlling interest	3	41
Restricted cash	2,822	1,562
Payments on long-term debt	(10,923)	(6,741)
Cash flows from financing activities	6,411	33,705
Effect of exchange rate changes on cash	180	443
Net decrease in cash and cash equivalents	(763)	(45,717)
Cash and cash equivalents, beginning of period	16,408	17,631
Cash and cash equivalents, end of period	17,171	63,348
Supplemental disclosures of cash flow information:
Cash paid for interest	3,466	2,823
Cash paid for income taxes	1,758	901
Non-cash Federal ESPC settlement	$ 12,350	$ 44,739

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Summary of Significant Accounting Policies- Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income (loss)	$ 2,719	$ (1,781)	$ (5,562)	$ (3,705)
Basic weighted-average shares outstanding (shares)	46,064,049	45,465,529	45,987,447	45,396,765
Effect of dilutive securities, Stock options (shares)	509,642	0	0	0
Diluted weighted-average shares outstanding (shares)	46,573,691	45,465,529	45,987,447	45,396,765
Common Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities excluded from computation of earnings per share			716,695	987,663
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities excluded from computation of earnings per share	1,811,928	2,475,556	1,781,928	2,532,853

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Derivative Instruments and Hedging Activities- Effects on statements of income and consolidated statements of comprehensive income (Details) (Interest rate swap instruments, USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Derivatives Designated as Hedging Instruments:
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain Recognized in (Loss) Income	$ (1,068)	$ (864)	$ (1,197)	$ (987)
Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain Recognized in (Loss) Income	$ 0	$ 0	$ 0	$ (266)

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 16,408	$ 17,171
Restricted cash	12,535	15,497
Accounts receivable, net	74,940	86,008
Accounts receivable retainage	14,422	21,019
Costs and estimated earnings in excess of billings	56,003	71,204
Inventory, net	9,256	10,257
Prepaid expenses and other current assets	12,579	10,177
Income tax receivable	10,646	3,971
Deferred income taxes	6,047	4,843
Project development costs	11,193	9,686
Total current assets	224,029	249,833
Federal ESPC receivable	50,488	44,297
Property and equipment, net	8,213	8,699
Project assets, net	210,256	210,744
Deferred financing fees, net	5,102	5,320
Goodwill	56,460	53,074
Intangible assets, net	9,852	10,253
Other assets	22,583	22,440
Total assets	586,983	604,660
Current liabilities:
Current portion of long-term debt	13,498	12,974
Accounts payable	73,748	88,733
Accrued expenses and other current liabilities	19,978	11,947
Billings in excess of cost and estimated earnings	15,639	16,933
Income taxes payable	0	615
Total current liabilities	122,863	131,202
Long-term debt, less current portion	91,741	103,222
Federal ESPC liabilities	45,923	44,297
Deferred income taxes	16,180	11,318
Deferred grant income	9,118	8,163
Other liabilities	29,322	29,652
Commitments and contingencies (Note 5)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding at June 30, 2014 and December 31, 2013	0	0
Additional paid-in capital	104,899	102,587
Retained earnings	165,532	171,094
Accumulated other comprehensive income, net	1,389	3,112
Non-controlling interest	11	8
Total stockholders’ equity	271,836	276,806
Total liabilities and stockholders’ equity	586,983	604,660
Common Class A
Stockholders’ equity:
Common shares	3	3
Common Class B
Stockholders’ equity:
Common shares	$ 2	$ 2

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Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Statement of Comprehensive Income [Abstract]
Unrealized gain (loss) from interest rate hedge, tax	$ 277	$ (614)	$ 545	$ (756)

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Income Tax Disclosure [Abstract]
Income tax (benefit) provision	$ 267	$ (577)	$ 31	$ (1,200)
Effective tax rate (percent)	8.90%	24.50%	0.20%	24.50%
Gross unrecognized tax benefits	9,200		9,200		9,200
Unrecognized tax benefits, if recognized would affect effective income tax rate	$ 5,500		$ 5,500		$ 5,500

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Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Value Amounts of Liability Derivative

Information about the fair value amounts of the Company’s derivative instruments is as follows:

	Derivatives as of
	June 30, 2014			December 31, 2013
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives Designated as Hedging Instruments:
Interest rate swap contracts	Other assets	$	176	Other assets	$	1,553
Interest rate swap contracts	Other liabilities	$	4,042	Other liabilities	$	4,268

Effect of Derivative Instruments on the Condensed Consolidated Statements of Comprehensive Income

The following table presents information about the effects of the Company’s derivative instruments on the consolidated statements of income (loss) and consolidated statements of comprehensive income (loss):

	Location of (Gain) Loss Recognized in Income (Loss)	Amount of (Gain) Loss Recognized in Income (Loss)
		Three Months Ended June 30,						Six Months Ended June 30,
		2014			2013			2014			2013
Derivatives Designated as Hedging Instruments:
Interest rate swap contracts	Other expenses, net	$	(1,068	)	$	(864	)	$	(1,197	)	$	(987	)
Derivatives Not Designated as Hedging Instruments:
Interest rate swap contracts	Other expenses, net	$	—		$	—		$	—		$	(266	)

	Six Months Ended June 30, 2014
	Loss Recognized in Accumulated Other Comprehensive Income		Interest Expense Reclassified from Accumulated Other Comprehensive Income into Other Expenses, Net
Derivatives Designated as Hedging Instruments:
Interest rate swap contracts	$	2,349	$	364

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Commitments and Contingencies- Solar Tariff Contingency (Details) (Unfavorable Regulatory Action, USD $) In Thousands, unless otherwise specified	1 Months Ended
	Oct. 31, 2012
Loss Contingencies [Line Items]
Solar tariff, countervailing duty rate prior to increase (percent)	3.61%
Solar tariff, countervailing duty rate (percent)	15.24%
Enforcement retroactive period from date of preliminary determination	90 days
Estimated solar tariff duties	$ 3,300
Maximum
Loss Contingencies [Line Items]
Anti-dumping duty rate (percent)	249.96%

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Summary of Significant Accounting Policies- Restatement (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities	$ 5,934	$ (38,947)
Cash flows from investing activities	(13,288)	(40,918)
Cash flows from financing activities	6,411	33,705
As Reported
Cash flows from operating activities		(18,820)
Cash flows from investing activities		(40,918)
Cash flows from financing activities		13,578
Adjustment
Cash flows from operating activities		(20,127)
Cash flows from investing activities		0
Cash flows from financing activities		$ 20,127

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Consolidated Statement of Changes in Stockholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total USD ($)	Common Class A	Common Class B	Common Stock Common Class A USD ($)	Common Stock Common Class B USD ($)	Additional Paid-in Capital USD ($)	Retained Earnings USD ($)	Accumulated Other Comprehensive Income USD ($)	Non-controlling Interest USD ($)
Balance, December 31, 2013 at Dec. 31, 2013	$ 276,806			$ 3	$ 2	$ 102,587	$ 171,094	$ 3,112	$ 8
Balance, December 31, 2013 (shares) at Dec. 31, 2013		27,869,317	18,000,000	27,869,317	18,000,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options	887					887
Exercise of stock options, net (in shares)				287,109
Stock-based compensation expense	1,425					1,425
Unrealized loss from interest rate hedge, net	(1,804)							(1,804)
Foreign currency translation adjustments	81							81
Non-controlling interest	3								3
Net loss	(5,562)						(5,562)
Balance, June 30, 2014 at Jun. 30, 2014	$ 271,836			$ 3	$ 2	$ 104,899	$ 165,532	$ 1,389	$ 11
Balance, June 30, 2014 (shares) at Jun. 30, 2014		28,156,426	18,000,000	28,156,426	18,000,000

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Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Preferred stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common Class A
Common stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	28,156,426	27,869,317
Common stock, shares outstanding (in shares)	28,156,426	27,869,317
Common Class B
Common stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	144,000,000	144,000,000
Common stock, shares issued (in shares)	18,000,000	18,000,000
Common stock, shares outstanding (in shares)	18,000,000	18,000,000

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Long Term Debt

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Long-term Debt

LONG-TERM DEBT

Variable-Rate Construction and Term Loans

In October 2012, the Company entered into a credit and guaranty agreement with two banks for use in providing limited recourse financing for certain of its landfill gas to energy and solar PV projects. The credit and guaranty agreement provides for a $47,234 construction-to-term loan credit facility and bears interest at a variable rate. At June 30, 2014, $44,053 was outstanding under construction and term loans. The weighted average rate for these loans at June 30, 2014 was 3.240%.

Senior Secured Credit Facility - Revolver and Term Loan

On June 30, 2011, the Company amended and restated the credit and security agreement and continues as the sole borrower under the agreement. The amended and restated facility extends and expands the Company’s prior facility. The facility consists of a $60,000 revolving credit facility and a $40,000 term loan. The revolving credit facility may be increased up to an additional $25,000 at the Company’s option, if the lenders agree. The facility matures on June 30, 2016, and all remaining unpaid amounts outstanding under the facility will be due at that time. At June 30, 2014, $22,857 was outstanding under the term loan and no amounts were outstanding under the revolving credit facility. Payments on the term loan are due in quarterly principal installments of $1,429 together with accrued but unpaid interest, with all remaining unpaid principal amounts due June 30, 2016. The obligations under the facility are guaranteed by certain of the Company’s subsidiaries and are secured by a lien on all of the assets of the Company other than renewable energy projects that the Company owns and that are financed by others. The agreement contains certain financial covenants. In November 2013, the Company amended the senior credit facility to reduce the trailing four quarters minimum required EBITDA amount to $30,000 from $40,000.

On March 12, 2014, the Company amended the senior secured credit facility as follows: (i) to increase the margins added to Bank of America’s prime rate or the one-, two- three- or six-month London interbank deposit rate, as applicable, in determining the interest rate by 25 basis points to 0.50% and 2.00%, respectively; (ii) to waive compliance with the minimum EBITDA covenant for the four consecutive fiscal quarters ended December 31, 2013; (iii) to reduce the required minimum EBITDA amount to $16,500 for the four consecutive fiscal quarters ended March 31, 2014, $22,000 for the four consecutive fiscal quarters ended June 30, 2014, $24,000 for the four consecutive fiscal quarters ended September 30, 2014, and $27,000 for the four consecutive fiscal quarters ended December 31, 2014 and thereafter; (iv) to increase the maximum ratio of total funded debt to EBITDA as of the end of each fiscal quarter to 2.5 to 1.0 for March 31, 2014 and 2.25 to 1.0 for June 30, 2014, returning to 2.0 to 1.0 for September 30, 2014 and thereafter; and (v) to reduce the minimum ratio of cash flow to debt service to 1.25 to 1.0 for the four fiscal quarters ended March 31, 2014, returning to 1.5 to 1.0 for the four fiscal quarters ended June 30, 2014 and thereafter.

For purposes of the Company’s senior secured facility: EBITDA excludes the results of certain renewable energy projects that the Company owns and for which financing from others remains outstanding; total funded debt includes amounts outstanding under both the term loan and revolver portions of the senior secured credit facility plus other indebtedness, but excludes non-recourse indebtedness of project company subsidiaries; cash flow is based on EBITDA as used in the facility, less capital expenditures (other than by project company subsidiaries that are not guarantors under the facility), certain taxes, and dividends and other distributions; and debt service includes principal and interest payments on the indebtedness included in total funded debt other than principal payments on the revolver portion of the facility.

At June 30, 2014 the Company was in compliance with all financial covenants.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Jul. 28, 2014 Common Class A	Jul. 28, 2014 Common Class B
Entity Information [Line Items]
Entity Registrant Name	Ameresco, Inc.
Entity Central Index Key	0001488139
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		28,341,948	18,000,000

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Reclassification

Reclassification

During the fourth quarter of 2013, the Company changed the manner in which advances received from third-party investors under agreements to finance certain energy savings performance contract (“ESPC”) projects with various Federal Government agencies were classified in the consolidated statements of cash flows. The Company concluded that as the transfers of receivables under these agreements do not qualify for sales accounting under accounting standards codification (“ASC”) 860, Transfers and Servicing, until final customer acceptance of the work, the advances from the investors would be better classified as financing cash flows rather than operating cash flows where they had been previously presented. The use of the cash received under these arrangements to pay project costs will continue to be classified as operating cash flows. Due to the manner in which the energy savings performance contracts with the investors are structured, operating cash flows now only reflect the ESPC contract expenditure outflows and do not reflect any inflows from the corresponding contract revenues. Upon acceptance of the project by the Federal customer the ESPC receivable and corresponding ESPC liability are removed from the Company’s consolidated balance sheet as a non-cash settlement.

Principles of Consolidation

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Ameresco, Inc., its wholly owned subsidiaries and one subsidiary for which there is a minority shareholder. All significant intercompany accounts and transactions have been eliminated. Gains and losses from the translation of all foreign currency financial statements are recorded in accumulated other comprehensive income within stockholders’ equity. The Company prepares its financial statements in conformity with GAAP.

Use of Estimates

Use of Estimates

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 date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The most significant estimates and assumptions used in these condensed consolidated financial statements relate to management’s estimates of final construction contract profit in accordance with accounting for long-term contracts, allowance for doubtful accounts, inventory reserves, project development costs, fair value of derivative financial instruments and stock-based awards, impairment of long-lived assets, income taxes and potential liability in conjunction with certain commitments and contingencies. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash includes cash on deposit, overnight repurchase agreements and amounts invested in highly liquid money market funds. Cash equivalents consist of short term investments with original maturities of three months or less. The Company maintains accounts with financial institutions and the balances in such accounts, at times, exceed Federally insured limits. This credit risk is divided among a number of financial institutions that management believes to be of high quality. The carrying amount of cash and cash equivalents approximates their fair value.

Restricted Cash

Restricted Cash

Restricted cash consists of cash held in an escrow account in association with construction draws for ESPCs, construction of project assets, cash collateralized letter of credit and operating and maintenance reserve accounts, as well as cash required under term loans to be maintained in debt service reserve accounts until all obligations have been indefeasibly paid in full.

Accounts Receivable

Accounts Receivable

Accounts receivable are stated at the amount management expects to collect from outstanding balances. An allowance for doubtful accounts is provided for those accounts receivable considered to be uncollectible based upon historical experience and management’s evaluation of outstanding accounts receivable at the end of the period. Bad debts are written off against the allowance when identified.

Accounts Receivable Retainage

Accounts Receivable Retainage

Accounts receivable retainage represents amounts due from customers, but where payments are withheld contractually until certain construction milestones are met. Amounts retained typically range from five percent to ten percent of the total invoice.

Inventory

Inventory

Inventories, which consist primarily of PV solar panels, batteries and related accessories, are stated at the lower of cost (“first-in, first-out” method) or market (determined on the basis of estimated net realizable values). Provisions have been made to reduce the carrying value of inventory to the net realizable value.

Prepaid Expenses

Prepaid Expenses

Prepaid expenses consist primarily of short-term prepaid expenditures that will amortize within one year.

Federal ESPC Receivable

Federal ESPC Receivable

Federal ESPC receivable represents the amount to be paid by various Federal Government agencies for work performed and earned by the Company under specific ESPCs. The Company assigns certain of its rights to receive those payments to third-party lenders that provide construction and permanent financing for such contracts. The receivable is recognized as revenue as each project is constructed. Upon completion and acceptance of the project by the Government, typically within 24 months of construction commencement, the assigned ESPC receivable and corresponding related project debt is eliminated from the Company’s condensed consolidated financial statements.

Project Development Costs

Project Development Costs

The Company capitalizes as project development costs only those costs incurred in connection with the development of energy projects, primarily direct labor, interest costs, outside contractor services, consulting fees, legal fees and travel, if incurred after a point in time where the realization of related revenue becomes probable. Project development costs incurred prior to the probable realization of revenue are expensed as incurred. The Company classifies as a current asset those project development efforts that are expected to proceed to construction activity in the twelve months that follow. The Company periodically reviews these balances and writes off any amounts where the realization of the related revenue is no longer probable.

Property and Equipment

Property and Equipment

Property and equipment consists primarily of office and computer equipment, and is recorded at cost. Major additions and improvements are capitalized as additions to the property and equipment accounts, while replacements, maintenance and repairs that do not improve or extend the life of the respective assets, are expensed as incurred. Depreciation and amortization of property and equipment are computed on a straight-line basis over the following estimated useful lives:

Asset Classification	Estimated Useful Life
Furniture and office equipment	Five years
Computer equipment and software costs	Three to five years
Leasehold improvements	Lesser of term of lease or five years
Automobiles	Five years
Land	Unlimited

Project Assets

Project Assets

Project assets consist of costs of materials, direct labor, interest costs, outside contract services and project development costs incurred in connection with the construction of small-scale renewable energy plants that the Company owns and the implementation of energy savings contracts. These amounts are capitalized and amortized over the lives of the related assets or the terms of the related contracts.

The Company capitalizes interest costs relating to construction financing during the period of construction. The interest capitalized is included in the total cost of the project at completion. There was no interest capitalized for the three months ended June 30, 2014. There was $250 of interest capitalized for the three months ended June 30, 2013. The amount of interest capitalized for the six months ended June 30, 2014 and 2013 was $395 and $715, respectively.

Routine maintenance costs are expensed in the current year’s consolidated statements of income (loss) to the extent that they do not extend the life of the asset. Major maintenance, upgrades and overhauls are required for certain components of the Company’s assets. In these instances, the costs associated with these upgrades are capitalized and are depreciated over the shorter of the remaining life of the asset or the period until the next required major maintenance or overhaul. Gains or losses on disposal of property and equipment are reflected in selling, general and administrative expenses in the consolidated statements of income (loss).

The Company evaluates its long-lived assets for impairment as events or changes in circumstances indicate the carrying value of these assets may not be fully recoverable. The Company evaluates recoverability of long-lived assets to be held and used by estimating the undiscounted future cash flows before interest associated with the expected uses and eventual disposition of those assets. When these comparisons indicate that the carrying value of those assets is greater than the undiscounted cash flows, the Company recognizes an impairment loss for the amount that the carrying value exceeds the fair value.

From time to time, the Company applies for and receives cash grant awards from the U.S. Treasury Department (the “Treasury”) under Section 1603 of the American Recovery and Reinvestment Act of 2009 (the “Act”). The Act authorized the Treasury to make payments to eligible persons who place in service qualifying renewable energy projects. The grants are paid in lieu of investment tax credits. All of the cash proceeds from the grants were used and recorded as a reduction in the cost basis of the applicable project assets. If the Company disposes of the property, or the property ceases to qualify as specified energy property, within five years from the date the property is placed in service, then a prorated portion of the Section 1603 payment must be repaid.

The Company received$3,727inSection 1603 grants during the three and six months ended June 30, 2014. The Company received$289 and $1,580 in Section 1603 grants during the three and six months ended June 30, 2013, respectively.

For tax purposes, the Section 1603 payments are not included in Federal and certain state taxable income and the basis of the property is reduced by 50% of the payment received.

Deferred Financing Fees

Deferred Financing Fees

Deferred financing fees relate to the external costs incurred to obtain financing for the Company. Deferred financing fees are amortized over the respective term of the financing using the effective interest method, with the exception of the Company’s revolving credit facility, as discussed in Note 9, for which deferred financing fees are amortized on a straight line basis over the term of the agreement.

Goodwill and Intangible Assets

Goodwill and Intangible Assets

The Company has classified as goodwill the amounts paid in excess of fair value of the net assets (including tax attributes) of companies acquired in purchase transactions. The Company has recorded intangible assets related to customer contracts, customer relationships, non-compete agreements, trade names and technology, each with defined useful lives. The Company assesses the impairment of goodwill and intangible assets that have indefinite lives on an annual basis (December 31^st) and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The Company would record an impairment charge if such an assessment were to indicate that the fair value of such assets was less than their carrying values. Judgment is required in determining whether an event has occurred that may impair the value of goodwill or identifiable intangible assets.

Factors that could indicate that an impairment may exist include significant underperformance relative to plan or long-term projections, significant changes in business strategy, significant negative industry or economic trends or a significant decline in the base price of the Company’s publicly traded stock for a sustained period of time. Although the Company believes goodwill and intangible assets are appropriately stated in the accompanying condensed consolidated financial statements, changes in strategy or market conditions could significantly impact these judgments and require an adjustment to the recorded balance.

Other Assets

Other Assets

Other assets consist primarily of notes and contracts receivable due to the Company from various customers and non-current restricted cash. Other assets also include the fair value of derivatives and the non-current portion of project development costs.

Asset Retirement Obligations

Asset Retirement Obligations

The Company recognizes a liability for the fair value of required asset retirement obligations (“AROs”) when such obligations are incurred. The liability is estimated on a number of assumptions requiring management’s judgment, including equipment removal costs, site restoration costs, salvage costs, cost inflation rates and discount rates and is credited to its projected future value over time. The capitalized asset is depreciated using the convention of depreciation of plant assets. Upon satisfaction of the ARO conditions, any difference between the recorded ARO liability and the actual retirement cost incurred is recognized as an operating gain or loss in the consolidated statements of income (loss).

Federal ESPC Liabilities

Federal ESPC Liabilities

Federal ESPC liabilities represent the advances received from third-party investors under agreements to finance certain energy savings performance contract projects with various Federal Government agencies. Upon completion and acceptance of the project by the Government, typically within 24 months of construction commencement, the ESPC receivable from the Government and corresponding related ESPC liability is eliminated from the Company’s consolidated balance sheet. Until recourse to the Company ceases for the ESPC receivables transferred to the investor, upon final acceptance of the work by the Government customer, the Company remains the primary obligor for financing received.

Other Liabilities

Other Liabilities

Other liabilities consist primarily of deferred revenue related to multi-year operation and maintenance contracts which expire as late as 2031. Other liabilities also include the fair value of interest rate swaps.See Note 7 for additional disclosures.

Revenue Recognition

Revenue Recognition

The Company derives revenues from energy efficiency and renewable energy products and services. Energy efficiency products and services include the design, engineering, and installation of equipment and other measures to improve the efficiency, and control the operation, of a facility’s energy infrastructure. Renewable energy products and services include the construction of small-scale plants that produce electricity, gas, heat or cooling from renewable sources of energy, the sale of such electricity, gas, heat or cooling from plants that the Company owns, and the sale and installation of solar energy products and systems.

Revenue from the installation or construction of projects is recognized on a percentage-of-completion basis. The percentage-of-completion for each project is determined on an actual cost-to-estimated final cost basis. Maintenance revenue is recognized as related services are performed. In accordance with industry practice, the Company includes in current assets and liabilities the amounts of receivables related to construction projects realizable and payable over a period in excess of one year. The revenue associated with contract change orders is recognized only when the authorization for the change order has been properly executed and the work has been performed.

When the estimate on a contract indicates a loss, or claims against costs incurred reduce the likelihood of recoverability of such costs, the Company records the entire expected loss immediately, regardless of the percentage of completion.

Billings in excess of cost and estimated earnings represents advanced billings on certain construction contracts. Costs and estimated earnings in excess of billings represent certain amounts under customer contracts that were earned and billable but not invoiced.

The Company sells certain products and services in bundled arrangements, where multiple products and/or services are involved. The Company divides bundled arrangements into separate deliverables and revenue is allocated to each deliverable based on the relative selling price. The relative selling price is determined using third party evidence or management’s best estimate of selling price.

The Company recognizes revenue from the sale and delivery of products, including the output from renewable energy plants, when produced and delivered to the customer, in accordance with specific contract terms, provided that persuasive evidence of an arrangement exists, the Company’s price to the customer is fixed or determinable and collectability is reasonably assured.

The Company recognizes revenue from operations and maintenance (“O&M”) contracts, consulting services and enterprise energy management services as the related services are performed.

For a limited number of contracts under which the Company receives additional revenue based on a share of energy savings, such additional revenue is recognized as energy savings are generated.

Cost of Revenues

Cost of Revenues

Cost of revenues include the cost of labor, materials, equipment, subcontracting and outside engineering that are required for the development and installation of projects, as well as preconstruction costs, sales incentives, associated travel, inventory obsolescence charges, amortization of intangible assets related to customer contracts and, if applicable, costs of procuring financing. A majority of the Company’s contracts have fixed price terms; however, in some cases the Company negotiates protections, such as a cost-plus structure, to mitigate the risk of rising prices for materials, services and equipment.

Cost of revenues also include the costs of maintaining and operating the small-scale renewable energy plants that the Company owns, including the cost of fuel (if any) and depreciation charges.

Income Taxes

Income Taxes

The Company provides for income taxes based on the liability method. The Company provides for deferred income taxes based on the expected future tax consequences of differences between the financial statement basis and the tax basis of assets and liabilities calculated using the enacted tax rates in effect for the year in which the differences are expected to be reflected in the tax return.

The Company accounts for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors that include, but are not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. The Company evaluates uncertain tax positions on a quarterly basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions.

The Company’s liabilities for uncertain tax positions can be relieved only if the contingency becomes legally extinguished through either payment to the taxing authority or the expiration of the statute of limitations, the recognition of the benefits associated with the position meet the “more-likely-than-not” threshold or the liability becomes effectively settled through the examination process.

The Company considers matters to be effectively settled once the taxing authority has completed all of its required or expected examination procedures, including all appeals and administrative reviews; the Company has no plans to appeal or litigate any aspect of the tax position; and the Company believes that it is highly unlikely that the taxing authority would examine or re-examine the related tax position. The Company also accrues for potential interest and penalties, related to unrecognized tax benefits in income tax expense. See Note 4 for additional information on the Company’s income taxes.

Foreign Currency

Foreign Currency

The local currency of the Company’s foreign operations is considered the functional currency of such operations. All assets and liabilities of the Company’s foreign operations are translated into U.S. dollars at period-end exchange rates. Income and expense items are translated at average exchange rates prevailing during the period. Translation adjustments are accumulated as a separate component of stockholders’ equity. Foreign currency translation gains and losses are reported in the consolidated statements of comprehensive income (loss). Foreign currency transaction gains and losses are reported in the consolidated statements of income (loss).

Financial Instruments

Financial Instruments

Financial instruments consist of cash and cash equivalents, restricted cash, accounts and notes receivable, long-term contract receivables, accounts payable, accrued expenses, equity-based liabilities, short- and long-term debt and interest rate swaps. The estimated fair value of cash and cash equivalents, restricted cash, accounts and notes receivable, long-term contract receivables, accounts payable, accrued expenses and equity-based liabilities approximates their carrying value.

Fair Value Measurements

Fair Value Measurements

The Company follows the guidance related to fair value measurements for all of its non-financial assets and non-financial liabilities, except for those recognized at fair value in the financial statements at least annually. These assets include goodwill and long-lived assets measured at fair value for impairment assessments, and non-financial assets and liabilities initially measured at fair value in a business combination.

Because of their short maturity, the carrying amounts of cash and cash equivalents, accounts and notes receivable, accounts payable, accrued expenses and short-term debt approximate fair value. The carrying value of long-term variable-rate debt approximates fair value. As of June 30, 2014, the fair value of the Company’s fixed-rate long-term debt exceeds its carrying value by approximately $103. Fair value of the Company’s debt is based on quoted market prices or on rates available to the Company for debt with similar terms and maturities.

The Company accounts for its interest rate swaps as derivative financial instruments in accordance with the related guidance. Under this guidance, derivatives are carried on the Company’s consolidated balance sheets at fair value. The fair value of the Company’s interest rate swaps are determined based on observable market data in combination with expected cash flows for each instrument.

Share-Based Compensation Expense

Stock-Based Compensation Expense

Stock-based compensation expense results from the issuance of shares of restricted common stock and grants of stock options to employees, directors, outside consultants and others. The Company recognizes the costs associated with restricted stock and option grants using the fair value recognition provisions of ASC 718, Compensation - Stock Compensation on a straight-line basis over the vesting period of the awards.

Stock-based compensation expense is recognized based on the grant-date fair value. The Company estimates the fair value of the stock-based awards, including stock options, using the Black-Scholes option-pricing model. Determining the fair value of stock-based awards requires the use of highly subjective assumptions, including the fair value of the common stock underlying the award, the expected term of the award and expected stock price volatility.

The assumptions used in determining the fair value of stock-based awards represent management’s estimates, which involve inherent uncertainties and the application of management judgment. As a result, if factors change, and different assumptions are employed, the stock-based compensation could be materially different in the future. The risk-free interest rates are based on the U.S. Treasury yield curve in effect at the time of grant, with maturities approximating the expected life of the stock options.

The Company has no history of paying dividends. Additionally, as of each of the grant dates, there was no expectation that the Company would pay dividends over the expected life of the options. The expected life of the awards is estimated using historical data and management’s expectations. Because there was no public market for the Company’s common stock prior to the Company’s initial public offering, management lacked company-specific historical and implied volatility information. Therefore, estimates of expected stock volatility were based on that of publicly traded peer companies, and it is expected that the Company will continue to use this methodology until such time as there is adequate historical data regarding the volatility of the Company’s publicly traded stock price.

The Company is required to recognize compensation expense for only the portion of options that are expected to vest. Actual historical forfeiture rate of options is based on employee terminations and the number of shares forfeited. This data and other qualitative factors are considered by the Company in determining the forfeiture rate used in recognizing stock compensation expense. If the actual forfeiture rate varies from historical rates and estimates, additional adjustments to compensation expense may be required in future periods. If there are any modifications or cancellations of the underlying unvested securities or the terms of the stock option, it may be necessary to accelerate, increase or cancel any remaining unamortized stock-based compensation expense.

For the three months ended June 30, 2014 and 2013, the Company recorded stock-based compensation expense of $707 and $665, respectively, in connection with stock-based payment awards. For the six months ended June 30, 2014 and 2013, the Company recorded stock-based compensation expense of $1,425 and $1,336, respectively, in connection with stock-based payment awards. The compensation expense is allocated between cost of revenues and selling, general and administrative expenses in the accompanying consolidated statements of income (loss) based on the salaries and work assignments of the employees holding the options. As of June 30, 2014, there was $4,867 of unrecognized compensation expense related to non-vested stock option awards that is expected to be recognized over a weighted-average period of 3.1 years.

The Company also accounts for equity instruments issued to non-employee directors and consultants at fair value. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the date on which the counterparty’s performance is complete.

Derivative Financial Instruments

Derivative Financial Instruments

In the normal course of business, the Company utilizes derivatives contracts as part of its risk management strategy to manage exposure to market fluctuations in interest rates. These instruments are subject to various credit and market risks. Controls and monitoring procedures for these instruments have been established and are routinely reevaluated. Credit risk represents the potential loss that may occur because a party to a transaction fails to perform according to the terms of the contract. The measure of credit exposure is the replacement cost of contracts with a positive fair value. The Company seeks to manage credit risk by entering into financial instrument transactions only through counterparties that the Company believes to be creditworthy.

Market risk represents the potential loss due to the decrease in the value of a financial instrument caused primarily by changes in interest rates. The Company seeks to manage market risk by establishing and monitoring limits on the types and degree of risk that may be undertaken. As a matter of policy, the Company does not use derivatives for speculative purposes. The Company considers the use of derivatives with all financing transactions to mitigate risk.

The Company recognizes cash flows from derivative instruments as operating activities in the consolidated statements of cash flows. The effective portion of changes in fair value on interest rate swaps designated as cash flow hedges are recognized in the Company’s consolidated statements of comprehensive income (loss). The ineffective portion of changes in fair value on interest rate swaps designated as hedges and changes in fair value on interest rate swaps not designated as hedges are recognized in the Company’s consolidated statements of income (loss).

Earnings Per Share

Earnings Per Share

Basic earnings per share is calculated using the Company’s weighted-average outstanding common shares, including vested restricted shares. When the effects are not anti-dilutive, diluted earnings per share is calculated using: the weighted-average outstanding common shares; the dilutive effect of convertible preferred stock, under the “if converted” method; and the treasury stock method with regard to warrants and stock options; all as determined under the treasury stock method.

Variable Interest Entities

Variable Interest Entities

Certain contracts are executed jointly through partnership and joint venture arrangements with unrelated third parties. Generally, these arrangements are characterized by a 50 percent or less ownership interest that requires only a small initial investment. The arrangements are often formed for the single business purpose of executing a specific project and allow the Company to share risks and/or secure specialty skills required for project execution.

        The Company evaluates each partnership and joint venture at inception to determine if it qualifies as a variable interest entity (“VIE”) under ASC 810, Consolidation. A variable interest entity is an entity used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors who are not required to provide sufficient financial resources for the entity to support its activities without additional subordinated financial support. Upon the occurrence of certain events outlined in ASC 810, the Company reassesses its initial determination of whether the partnership or joint venture is a VIE.

        The Company also evaluates whether it is the primary beneficiary of each VIE and consolidates the VIE if the Company has both (a) the power to direct the economically significant activities of the entity and (b) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. The Company considers the contractual agreements that define the ownership structure, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights and board representation of the respective parties in determining whether it qualifies as the primary beneficiary. The Company also considers all parties that have direct or implicit variable interests when determining whether it is the primary beneficiary. When the Company is determined to be the primary beneficiary, the VIE is consolidated. As required by ASC 810, management's assessment of whether the Company is the primary beneficiary of a VIE is continuously performed.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance in this ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The guidance in this ASU supersedes the revenue recognition requirements in ASC 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, this ASU supersedes some cost guidance included in ASC 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer are amended to be consistent with the guidance on recognition and measurement in this ASU. For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Retrospective application of the amendments in this ASU are required. The new guidance must be adopted using either a full retrospective approach for all periods presented in the period of adoption (with some limited relief provided) or a modified retrospective approach. Early application is not permitted under GAAP. The Company is currently assessing the impact of this ASU on its consolidated financial statements.

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Consolidated Statements of Income (Loss) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Statement [Abstract]
Revenues	$ 142,558	$ 126,252	$ 243,289	$ 236,388
Cost of revenues	114,622	102,870	197,799	191,487
Gross profit	27,936	23,382	45,490	44,901
Selling, general and administrative expenses	24,154	25,292	48,493	48,893
Operating income (loss)	3,782	(1,910)	(3,003)	(3,992)
Other expenses, net	796	448	2,528	913
Income (loss) before provision (benefit) for income taxes	2,986	(2,358)	(5,531)	(4,905)
Income tax provision (benefit)	267	(577)	31	(1,200)
Net income (loss)	$ 2,719	$ (1,781)	$ (5,562)	$ (3,705)
Net income (loss) per share attributable to common shareholders:
Basic (in usd per share)	$ 0.06	$ (0.04)	$ (0.12)	$ (0.08)
Diluted (in usd per share)	$ 0.06	$ (0.04)	$ (0.12)	$ (0.08)
Weighted average common shares outstanding:
Basic (in shares)	46,064,049	45,465,529	45,987,447	45,396,765
Diluted (in shares)	46,573,691	45,465,529	45,987,447	45,396,765

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Income Taxes

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The provision (benefit) for income taxes was $267 and $(577), for the three months ended June 30, 2014 and 2013, respectively. The provision (benefit) for income taxes was $31 and $(1,200), for the six months ended June 30, 2014 and 2013, respectively. The estimated 2014 effective tax rate changed to 8.9% for the three months ended June 30, 2014 from a 24.5% estimated annual effective tax rate for the three months ended June 30, 2013. For the six months ended June 30, 2014 the estimated 2014 effective tax rate was 0.2%, before discrete items, compared to a 24.5% estimated annual effective tax rate for the six months ended June 30, 2013.

At June 30, 2014 and December 31,2013, the Company had approximately $9,200 of total gross unrecognized tax benefits. Of the total gross unrecognized tax benefits as of June 30, 2014 and December 31,2013, approximately $5,500 (net of the Federal benefit on state amounts) represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in any future periods.

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying value of goodwill attributable to each reportable segment are as follows:

	U.S. Regions		U.S. Federal		Canada			Small-Scale Infrastructure		Other		Total
Balance, December 31, 2013	$	24,759	$	3,375	$	4,124		$	—	$	20,816	$	53,074
Goodwill acquired during the year	—		—		—			—		2,575		2,575
Fair value adjustment(1)	—		—		—			—		641		641
Currency effects	—		—		(13		)	—		183		170
Balance, June 30, 2014	$	24,759	$	3,375	$	4,111		$	—	$	24,215	$	56,460
Accumulated Goodwill Impairment Balance, December 31, 2013	$	—	$	—	$	(1,016	)	$	—	$	—	$	(1,016	)
Accumulated Goodwill Impairment Balance, June 30, 2014	$	—	$	—	$	(1,016	)	$	—	$	—	$	(1,016	)

(1) Fair value adjustment represents a final purchase accounting adjustment to decrease the recorded fair value of certain acquired intangible assets totaling $801, net of a $160 deferred tax liability adjustment, related to the Company’s prior year acquisition of The Energy Services Partnership Limited and ESP Response Limited (together “ESP”).

Separable intangible assets that are not deemed to have indefinite lives are amortized over their useful lives. The Company annually assesses whether a change in the life over which the Company’s assets are amortized is necessary, or more frequently if events or circumstances warrant. No changes to useful lives were made during the six months ended June 30, 2014 or for the year ended December 31,2013.

Acquired intangible assets other than goodwill that are subject to amortization include customer contracts, customer relationships, non-compete agreements, technology and trade names. Customer contracts are amortized ratably over the period of the acquired customer contracts ranging in periods from approximately one to five years. All other acquired intangible assets are amortized over periods ranging from approximately four to fifteen years, as defined by the nature of the respective intangible asset. Intangible assets acquired during the six months ended June 30, 2014 consisted of customer contracts, customer relationships, non-compete assets and technology which were assigned a weighted average useful life of 10.6 years.

The gross carrying amount and accumulated amortization of intangible assets are as follows:

	As of June 30,		As of December 31,
	2014		2013
Gross Carrying Amount
Customer contracts	$	7,724	$	7,684
Customer relationships	9,239		8,200
Non-compete agreements	3,296		3,230
Technology	2,844		2,386
Trade names	556		556
	23,659		22,056
Accumulated Amortization
Customer contracts	5,983		5,349
Customer relationships	3,565		2,923
Non-compete agreements	2,336		1,872
Technology	1,523		1,299
Trade names	400		360
	13,807		11,803
Intangible assets, net	$	9,852	$	10,253

Amortization expense related to customer contracts is included in cost of revenues in the consolidated statements of income (loss). Amortization expense related to all other acquired intangible assets is included in selling, general and administrative expenses in the consolidated statements of income (loss). Amortization expense for the three months ended June 30, 2014 and 2013 related to customer contracts was $363 and $227, respectively. Amortization expense for the six months ended June 30, 2014 and 2013 related to customer contracts was $614 and $454, respectively. Amortization expense for the three months ended June 30, 2014 and 2013 related to all other acquired intangible assets was $697 and $671, respectively. Amortization expense for the six months ended June 30, 2014 and 2013 related to all other acquired intangible assets was $1,264 and $1,335, respectively.

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Business Segment Information (Tables)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Schedule of Operational Results by Business Segments

An analysis of the Company’s business segment information and reconciliation to the condensed consolidated financial statements is as follows:

	U.S. Regions		U.S. Federal			Canada			Small-Scale Infrastructure		All Other			Total Consolidated
Three Months Ended June 30, 2014
Revenues	$	62,785	$	24,791		$	19,768		$	14,206	$	21,008		$	142,558
Interest income	—		—			—			11		—			11
Interest expense	—		—			258			508		—			766
Depreciation and amortization of intangible assets	333		292			414			3,289		880			5,208
Unallocated corporate activity	—		—			—			—		—			(6,935		)
Income (loss) before taxes, excluding unallocated corporate activity	6,318		2,265			(1,710		)	3,143		(95		)	9,921
Three Months Ended June 30, 2013
Revenues	68,100		12,745			16,125			10,230		19,052			126,252
Interest income	—		—			12			1		2			15
Interest expense	—		—			514			499		—			1,013
Depreciation and amortization of intangible assets	446		288			430			2,437		549			4,150
Unallocated corporate activity	—		—			—			—		—			(6,396		)
Income (loss) before taxes, excluding unallocated corporate activity	4,679		(781		)	(1,204		)	1,489		(145		)	4,038
Six Months Ended June 30, 2014
Revenues	103,791		36,141			36,067			25,355		41,935			243,289
Interest income	—		—			1			23		—			24
Interest expense	—		—			670			1,277		—			1,947
Depreciation and amortization of intangible assets	647		564			820			6,247		1,735			10,013
Unallocated corporate activity	—		—			—			—		—			(15,003		)
Income (loss) before taxes, excluding unallocated corporate activity	6,602		2,265			(3,069		)	3,815		(141		)	9,472
Six Months Ended June 30, 2013
Revenues	122,798		25,708			29,785			20,574		37,523			236,388
Interest income	—		—			26			1		2			29
Interest expense	—		—			672			859		—			1,531
Depreciation and amortization of intangible assets	909		525			784			5,894		1,086			9,198
Unallocated corporate activity	—		—			—			—		—			(12,625		)
Income (loss) before taxes, excluding unallocated corporate activity	$	6,791	$	(120	)	$	(1,934	)	$	2,627	$	356		$	7,720

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Restatement to on the company's consolidated statements of income

The following is a summary of the impact of the change on the previously reported amounts in the consolidated statements of cash flows:

	Six Months Ended June 30, 2013
	As Reported			Adjustment			Revised
Cash flows from operating activities	$	(18,820	)	$	(20,127	)	$	(38,947	)
Cash flows from investing activities	$	(40,918	)	$	—		$	(40,918	)
Cash flows from financing activities	$	13,578		$	20,127		$	33,705

Changes in Allowance for Doubtful Accounts

Changes in the allowance for doubtful accounts are as follows:

	Six Months Ended June 30,
	2014			2013
Allowance for doubtful accounts, beginning of period	$	1,519		$	1,174
Charges to costs and expenses	266			371
Account write-offs and other	(199		)	(24		)
Allowance for doubtful accounts, end of period	$	1,586		$	1,521

Estimated Useful Lives of Property and Equipment

Depreciation and amortization of property and equipment are computed on a straight-line basis over the following estimated useful lives:

Asset Classification	Estimated Useful Life
Furniture and office equipment	Five years
Computer equipment and software costs	Three to five years
Leasehold improvements	Lesser of term of lease or five years
Automobiles	Five years
Land	Unlimited

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Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Information about the fair value amounts of the Company’s derivative instruments is as follows:

	Derivatives as of
	June 30, 2014			December 31, 2013
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives Designated as Hedging Instruments:
Interest rate swap contracts	Other assets	$	176	Other assets	$	1,553
Interest rate swap contracts	Other liabilities	$	4,042	Other liabilities	$	4,268

The following table presents information about the effects of the Company’s derivative instruments on the consolidated statements of income (loss) and consolidated statements of comprehensive income (loss):

	Location of (Gain) Loss Recognized in Income (Loss)	Amount of (Gain) Loss Recognized in Income (Loss)
		Three Months Ended June 30,						Six Months Ended June 30,
		2014			2013			2014			2013
Derivatives Designated as Hedging Instruments:
Interest rate swap contracts	Other expenses, net	$	(1,068	)	$	(864	)	$	(1,197	)	$	(987	)
Derivatives Not Designated as Hedging Instruments:
Interest rate swap contracts	Other expenses, net	$	—		$	—		$	—		$	(266	)

	Six Months Ended June 30, 2014
	Loss Recognized in Accumulated Other Comprehensive Income		Interest Expense Reclassified from Accumulated Other Comprehensive Income into Other Expenses, Net
Derivatives Designated as Hedging Instruments:
Interest rate swap contracts	$	2,349	$	364

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company is involved in a variety of claims and other legal proceedings generally incidental to its normal business activities. While the outcome of any of these proceedings cannot be accurately predicted, the Company does not believe the ultimate resolution of any of these existing matters would have a material adverse effect on its financial condition or results of operations.

Solar Tariff Contingency

In October 2012, the U.S. Department of Commerce (“Commerce”) announced its final determination in the anti-dumping and countervailing duty investigations of imports of solar cells manufactured in the People’s Republic of China (“PRC”), including solar modules containing such cells. Commerce’s final determination confirmed its previously published anti-dumping duty of 249.96%, in the case of the Company, and increased its countervailing duty from 3.61% to 15.24%; both duties are applied to the value of imports of solar modules containing PRC cells. Under Commerce’s determination, the anti-dumping and countervailing duties both were to apply retroactively 90 days from the date each preliminary decision was published to February 25, 2012 and December 21, 2011, respectively. On November 7, 2012, the International Trade Commission announced its final determination upholding the duties, but eliminating the retroactive periods. Since early 2012, the Company has been importing solar modules containing PRC cells, though it ceased doing so in July 2012 in response to these duties. The Company is monitoring and evaluating its alternatives for obtaining a separate and reduced anti-dumping duty rate. Depending on whether the maximum anti-dumping duty rate of 249.96% or some lower rate applies, the Company may be liable for combined duties of up to approximately $3,300.

The Company has established a reserve reflecting its current estimate of its ultimate exposure to these assessments.

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Fair Value Measurement

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurement

FAIR VALUE MEASUREMENT

The Company recognizes its financial assets and liabilities at fair value on a recurring basis (at least annually). Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Three levels of inputs that may be used to measure fair value are as follows:

Level 1:  Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2:  Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3:  Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

The following table presents the input level used to determine the fair values of the Company’s financial instruments measured at fair value on a recurring basis:

		Fair Value as of
		June 30,		December 31,
	Level	2014		2013
Assets:
Interest rate swap instruments	2	$	176	$	1,553
Liabilities:
Interest rate swap instruments	2	$	4,042	$	4,268

The fair value of the Company’s interest rate swaps was determined using a cash flow analysis on the expected cash flow of the contract in combination with observable market-based inputs, including interest rate curves and implied volatilities. As part of this valuation, the Company considered the credit ratings of the counterparties to the interest rate swaps to determine if a credit risk adjustment was required.

The fair value of financial instruments is determined by reference to observable market data and other valuation techniques as appropriate. The only category of financial instruments where the difference between fair value and recorded book value is notable is long-term debt. At June 30, 2014, the fair value of the Company’s long-term debt was estimated using discounted cash flows analysis, based on quoted market prices or on rates available to the Company for debt with similar terms and maturities, which are considered to be level two inputs. There were no transfers in or out of level two for the three month period ended June 30, 2014. Based on the analysis performed, the fair value and the carrying value of the Company’s long-term debt are as follows:

	As of June 30, 2014				As of December 31, 2013
	Fair Value		Carrying Value		Fair Value		Carrying Value
Long-term debt value	$	105,342	$	105,239	$	114,776	$	116,196

The Company is also required periodically to measure certain other assets at fair value on a nonrecurring basis, including long-lived assets, goodwill and other intangible assets. The Company determined the fair value used in its annual impairment analysis with its own discounted cash flow analysis. The Company has determined the inputs used in such analysis as Level 3 inputs. The Company did not record any impairment charges on goodwill or other intangible assets as no significant events requiring non-financial assets and liabilities to be measured at fair value occurred for the six months ended June 30, 2014.

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Business Segment Information

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Business Segment Information

BUSINESS SEGMENT INFORMATION

The Company reports results under ASC 280, Segment Reporting. The Company’s reportable segments are U.S. Regions, U.S. Federal, Canada and Small-Scale Infrastructure. The Company’s U.S. Regions, U.S. Federal and Canada segments offer energy efficiency products and services, which include the design, engineering and installation of equipment and other measures to improve the efficiency and control the operation of a facility’s energy infrastructure; renewable energy products and services, which include the construction of small-scale plants for customers that produce electricity, gas, heat or cooling from renewable sources of energy; and O&M services. The Company’s Small-Scale Infrastructure segment sells electricity, processed LFG, heat or cooling produced from renewable sources of energy from small-scale plants that the Company owns. The “All Other” category offers enterprise energy management services, consulting services and the sale and installation of solar PV energy products and systems. These segments do not include results of other activities, such as corporate operating expenses not specifically allocated to the segments.

The reports of the Company’s chief operating decision maker do not include assets at the operating segment level.

An analysis of the Company’s business segment information and reconciliation to the condensed consolidated financial statements is as follows:

	U.S. Regions		U.S. Federal			Canada			Small-Scale Infrastructure		All Other			Total Consolidated
Three Months Ended June 30, 2014
Revenues	$	62,785	$	24,791		$	19,768		$	14,206	$	21,008		$	142,558
Interest income	—		—			—			11		—			11
Interest expense	—		—			258			508		—			766
Depreciation and amortization of intangible assets	333		292			414			3,289		880			5,208
Unallocated corporate activity	—		—			—			—		—			(6,935		)
Income (loss) before taxes, excluding unallocated corporate activity	6,318		2,265			(1,710		)	3,143		(95		)	9,921
Three Months Ended June 30, 2013
Revenues	68,100		12,745			16,125			10,230		19,052			126,252
Interest income	—		—			12			1		2			15
Interest expense	—		—			514			499		—			1,013
Depreciation and amortization of intangible assets	446		288			430			2,437		549			4,150
Unallocated corporate activity	—		—			—			—		—			(6,396		)
Income (loss) before taxes, excluding unallocated corporate activity	4,679		(781		)	(1,204		)	1,489		(145		)	4,038
Six Months Ended June 30, 2014
Revenues	103,791		36,141			36,067			25,355		41,935			243,289
Interest income	—		—			1			23		—			24
Interest expense	—		—			670			1,277		—			1,947
Depreciation and amortization of intangible assets	647		564			820			6,247		1,735			10,013
Unallocated corporate activity	—		—			—			—		—			(15,003		)
Income (loss) before taxes, excluding unallocated corporate activity	6,602		2,265			(3,069		)	3,815		(141		)	9,472
Six Months Ended June 30, 2013
Revenues	122,798		25,708			29,785			20,574		37,523			236,388
Interest income	—		—			26			1		2			29
Interest expense	—		—			672			859		—			1,531
Depreciation and amortization of intangible assets	909		525			784			5,894		1,086			9,198
Unallocated corporate activity	—		—			—			—		—			(12,625		)
Income (loss) before taxes, excluding unallocated corporate activity	$	6,791	$	(120	)	$	(1,934	)	$	2,627	$	356		$	7,720

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Goodwill and Intangible Assets- Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 23,659		$ 23,659		$ 22,056
Accumulated Amortization	13,807		13,807		11,803
Intangible assets, net	9,852		9,852		10,253
Amortization of intangible assets			1,878	1,789
Customer contracts
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	7,724		7,724		7,684
Accumulated Amortization	5,983		5,983		5,349
Amortization of intangible assets	363	227	614	454
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	9,239		9,239		8,200
Accumulated Amortization	3,565		3,565		2,923
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	3,296		3,296		3,230
Accumulated Amortization	2,336		2,336		1,872
Technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	2,844		2,844		2,386
Accumulated Amortization	1,523		1,523		1,299
Trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	556		556		556
Accumulated Amortization	400		400		360
Customer Relationships, Noncompete Agreements, Technology and Trade Names
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets useful life			10 years 7 months 6 days
Amortization of intangible assets	$ 697	$ 671	$ 1,264	$ 1,335
Minimum
Finite-Lived Intangible Assets [Line Items]
Estimated useful life			4 years
Minimum | Customer contracts
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets useful life			1 year
Maximum
Finite-Lived Intangible Assets [Line Items]
Estimated useful life			15 years
Maximum | Customer contracts
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets useful life			5 years

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Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Liabilities Measured on a Recurring Basis

The following table presents the input level used to determine the fair values of the Company’s financial instruments measured at fair value on a recurring basis:

		Fair Value as of
		June 30,		December 31,
	Level	2014		2013
Assets:
Interest rate swap instruments	2	$	176	$	1,553
Liabilities:
Interest rate swap instruments	2	$	4,042	$	4,268

Fair Value, by Balance Sheet Grouping

Based on the analysis performed, the fair value and the carrying value of the Company’s long-term debt are as follows:

	As of June 30, 2014				As of December 31, 2013
	Fair Value		Carrying Value		Fair Value		Carrying Value
Long-term debt value	$	105,342	$	105,239	$	114,776	$	116,196

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Summary of Significant Accounting Policies- Property and Equipment (Details)	6 Months Ended
	Jun. 30, 2014
Furniture and office equipment
Property, Plant and Equipment [Line Items]
Property and equipment estimated useful life	5 years
Computer equipment and software costs | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment estimated useful life	3 years
Computer equipment and software costs | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment estimated useful life	5 years
Leasehold improvements | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment estimated useful life	5 years
Automobiles
Property, Plant and Equipment [Line Items]
Property and equipment estimated useful life	5 years

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Derivative Instruments and Hedging Activities- Effects of Derivative Instruments in Accumulated Other Comprehensive Income (Details) (Derivatives Designated as Hedging Instruments:, Interest Rate Swap Contracts, USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Derivatives Designated as Hedging Instruments: | Interest Rate Swap Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Loss Recognized in Accumulated Other Comprehensive Income	$ 2,349
Interest Expense Reclassified from Accumulated Other Comprehensive Income into Other Expenses, Net		$ 364

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Consolidated Statements of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 2,719	$ (1,781)	$ (5,562)	$ (3,705)
Other comprehensive (loss) income:
Unrealized gain (loss) from interest rate hedge, net of tax	(1,308)	1,606	(1,804)	2,531
Foreign currency translation adjustments	971	(595)	81	(1,547)
Total other comprehensive (loss) income	(337)	1,011	(1,723)	984
Comprehensive income (loss)	$ 2,382	$ (770)	$ (7,285)	$ (2,721)

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reclassification

During the fourth quarter of 2013, the Company changed the manner in which advances received from third-party investors under agreements to finance certain energy savings performance contract (“ESPC”) projects with various Federal Government agencies were classified in the consolidated statements of cash flows. The Company concluded that as the transfers of receivables under these agreements do not qualify for sales accounting under accounting standards codification (“ASC”) 860, Transfers and Servicing, until final customer acceptance of the work, the advances from the investors would be better classified as financing cash flows rather than operating cash flows where they had been previously presented. The use of the cash received under these arrangements to pay project costs will continue to be classified as operating cash flows. Due to the manner in which the energy savings performance contracts with the investors are structured, operating cash flows now only reflect the ESPC contract expenditure outflows and do not reflect any inflows from the corresponding contract revenues. Upon acceptance of the project by the Federal customer the ESPC receivable and corresponding ESPC liability are removed from the Company’s consolidated balance sheet as a non-cash settlement.

The following is a summary of the impact of the change on the previously reported amounts in the consolidated statements of cash flows:

	Six Months Ended June 30, 2013
	As Reported			Adjustment			Revised
Cash flows from operating activities	$	(18,820	)	$	(20,127	)	$	(38,947	)
Cash flows from investing activities	$	(40,918	)	$	—		$	(40,918	)
Cash flows from financing activities	$	13,578		$	20,127		$	33,705

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Ameresco, Inc., its wholly owned subsidiaries and one subsidiary for which there is a minority shareholder. All significant intercompany accounts and transactions have been eliminated. Gains and losses from the translation of all foreign currency financial statements are recorded in accumulated other comprehensive income within stockholders’ equity. The Company prepares its financial statements in conformity with GAAP.

Use of Estimates

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 date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The most significant estimates and assumptions used in these condensed consolidated financial statements relate to management’s estimates of final construction contract profit in accordance with accounting for long-term contracts, allowance for doubtful accounts, inventory reserves, project development costs, fair value of derivative financial instruments and stock-based awards, impairment of long-lived assets, income taxes and potential liability in conjunction with certain commitments and contingencies. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash includes cash on deposit, overnight repurchase agreements and amounts invested in highly liquid money market funds. Cash equivalents consist of short term investments with original maturities of three months or less. The Company maintains accounts with financial institutions and the balances in such accounts, at times, exceed Federally insured limits. This credit risk is divided among a number of financial institutions that management believes to be of high quality. The carrying amount of cash and cash equivalents approximates their fair value.

Restricted Cash

Restricted cash consists of cash held in an escrow account in association with construction draws for ESPCs, construction of project assets, cash collateralized letter of credit and operating and maintenance reserve accounts, as well as cash required under term loans to be maintained in debt service reserve accounts until all obligations have been indefeasibly paid in full.

Accounts Receivable

Accounts receivable are stated at the amount management expects to collect from outstanding balances. An allowance for doubtful accounts is provided for those accounts receivable considered to be uncollectible based upon historical experience and management’s evaluation of outstanding accounts receivable at the end of the period. Bad debts are written off against the allowance when identified.

Changes in the allowance for doubtful accounts are as follows:

	Six Months Ended June 30,
	2014			2013
Allowance for doubtful accounts, beginning of period	$	1,519		$	1,174
Charges to costs and expenses	266			371
Account write-offs and other	(199		)	(24		)
Allowance for doubtful accounts, end of period	$	1,586		$	1,521

Accounts Receivable Retainage

Accounts receivable retainage represents amounts due from customers, but where payments are withheld contractually until certain construction milestones are met. Amounts retained typically range from five percent to ten percent of the total invoice.

Inventory

Inventories, which consist primarily of PV solar panels, batteries and related accessories, are stated at the lower of cost (“first-in, first-out” method) or market (determined on the basis of estimated net realizable values). Provisions have been made to reduce the carrying value of inventory to the net realizable value.

Prepaid Expenses

Prepaid expenses consist primarily of short-term prepaid expenditures that will amortize within one year.

Federal ESPC Receivable

Federal ESPC receivable represents the amount to be paid by various Federal Government agencies for work performed and earned by the Company under specific ESPCs. The Company assigns certain of its rights to receive those payments to third-party lenders that provide construction and permanent financing for such contracts. The receivable is recognized as revenue as each project is constructed. Upon completion and acceptance of the project by the Government, typically within 24 months of construction commencement, the assigned ESPC receivable and corresponding related project debt is eliminated from the Company’s condensed consolidated financial statements.

Project Development Costs

The Company capitalizes as project development costs only those costs incurred in connection with the development of energy projects, primarily direct labor, interest costs, outside contractor services, consulting fees, legal fees and travel, if incurred after a point in time where the realization of related revenue becomes probable. Project development costs incurred prior to the probable realization of revenue are expensed as incurred. The Company classifies as a current asset those project development efforts that are expected to proceed to construction activity in the twelve months that follow. The Company periodically reviews these balances and writes off any amounts where the realization of the related revenue is no longer probable.

Property and Equipment

Property and equipment consists primarily of office and computer equipment, and is recorded at cost. Major additions and improvements are capitalized as additions to the property and equipment accounts, while replacements, maintenance and repairs that do not improve or extend the life of the respective assets, are expensed as incurred. Depreciation and amortization of property and equipment are computed on a straight-line basis over the following estimated useful lives:

Asset Classification	Estimated Useful Life
Furniture and office equipment	Five years
Computer equipment and software costs	Three to five years
Leasehold improvements	Lesser of term of lease or five years
Automobiles	Five years
Land	Unlimited

Project Assets

Project assets consist of costs of materials, direct labor, interest costs, outside contract services and project development costs incurred in connection with the construction of small-scale renewable energy plants that the Company owns and the implementation of energy savings contracts. These amounts are capitalized and amortized over the lives of the related assets or the terms of the related contracts.

The Company capitalizes interest costs relating to construction financing during the period of construction. The interest capitalized is included in the total cost of the project at completion. There was no interest capitalized for the three months ended June 30, 2014. There was $250 of interest capitalized for the three months ended June 30, 2013. The amount of interest capitalized for the six months ended June 30, 2014 and 2013 was $395 and $715, respectively.

Routine maintenance costs are expensed in the current year’s consolidated statements of income (loss) to the extent that they do not extend the life of the asset. Major maintenance, upgrades and overhauls are required for certain components of the Company’s assets. In these instances, the costs associated with these upgrades are capitalized and are depreciated over the shorter of the remaining life of the asset or the period until the next required major maintenance or overhaul. Gains or losses on disposal of property and equipment are reflected in selling, general and administrative expenses in the consolidated statements of income (loss).

The Company evaluates its long-lived assets for impairment as events or changes in circumstances indicate the carrying value of these assets may not be fully recoverable. The Company evaluates recoverability of long-lived assets to be held and used by estimating the undiscounted future cash flows before interest associated with the expected uses and eventual disposition of those assets. When these comparisons indicate that the carrying value of those assets is greater than the undiscounted cash flows, the Company recognizes an impairment loss for the amount that the carrying value exceeds the fair value.

From time to time, the Company applies for and receives cash grant awards from the U.S. Treasury Department (the “Treasury”) under Section 1603 of the American Recovery and Reinvestment Act of 2009 (the “Act”). The Act authorized the Treasury to make payments to eligible persons who place in service qualifying renewable energy projects. The grants are paid in lieu of investment tax credits. All of the cash proceeds from the grants were used and recorded as a reduction in the cost basis of the applicable project assets. If the Company disposes of the property, or the property ceases to qualify as specified energy property, within five years from the date the property is placed in service, then a prorated portion of the Section 1603 payment must be repaid.

The Company received$3,727inSection 1603 grants during the three and six months ended June 30, 2014. The Company received$289 and $1,580 in Section 1603 grants during the three and six months ended June 30, 2013, respectively.

For tax purposes, the Section 1603 payments are not included in Federal and certain state taxable income and the basis of the property is reduced by 50% of the payment received. Deferred grant income of $9,118 and $8,163 recorded in the accompanying consolidated balance sheets as of June 30, 2014 and December 31,2013, respectively, represents the benefit of the basis difference to be amortized to income tax expense over the life of the related property.

Deferred Financing Fees

Deferred financing fees relate to the external costs incurred to obtain financing for the Company. Deferred financing fees are amortized over the respective term of the financing using the effective interest method, with the exception of the Company’s revolving credit facility, as discussed in Note 9, for which deferred financing fees are amortized on a straight line basis over the term of the agreement.

Goodwill and Intangible Assets

The Company has classified as goodwill the amounts paid in excess of fair value of the net assets (including tax attributes) of companies acquired in purchase transactions. The Company has recorded intangible assets related to customer contracts, customer relationships, non-compete agreements, trade names and technology, each with defined useful lives. The Company assesses the impairment of goodwill and intangible assets that have indefinite lives on an annual basis (December 31^st) and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The Company would record an impairment charge if such an assessment were to indicate that the fair value of such assets was less than their carrying values. Judgment is required in determining whether an event has occurred that may impair the value of goodwill or identifiable intangible assets.

Factors that could indicate that an impairment may exist include significant underperformance relative to plan or long-term projections, significant changes in business strategy, significant negative industry or economic trends or a significant decline in the base price of the Company’s publicly traded stock for a sustained period of time. Although the Company believes goodwill and intangible assets are appropriately stated in the accompanying condensed consolidated financial statements, changes in strategy or market conditions could significantly impact these judgments and require an adjustment to the recorded balance.

Other Assets

Other assets consist primarily of notes and contracts receivable due to the Company from various customers and non-current restricted cash. Other assets also include the fair value of derivatives and the non-current portion of project development costs.

Asset Retirement Obligations

The Company recognizes a liability for the fair value of required asset retirement obligations (“AROs”) when such obligations are incurred. The liability is estimated on a number of assumptions requiring management’s judgment, including equipment removal costs, site restoration costs, salvage costs, cost inflation rates and discount rates and is credited to its projected future value over time. The capitalized asset is depreciated using the convention of depreciation of plant assets. Upon satisfaction of the ARO conditions, any difference between the recorded ARO liability and the actual retirement cost incurred is recognized as an operating gain or loss in the consolidated statements of income (loss). As of June 30, 2014 and December 31,2013, the Company had no AROs.

Federal ESPC Liabilities

Federal ESPC liabilities represent the advances received from third-party investors under agreements to finance certain energy savings performance contract projects with various Federal Government agencies. Upon completion and acceptance of the project by the Government, typically within 24 months of construction commencement, the ESPC receivable from the Government and corresponding related ESPC liability is eliminated from the Company’s consolidated balance sheet. Until recourse to the Company ceases for the ESPC receivables transferred to the investor, upon final acceptance of the work by the Government customer, the Company remains the primary obligor for financing received.

Other Liabilities

Other liabilities consist primarily of deferred revenue related to multi-year operation and maintenance contracts which expire as late as 2031. Other liabilities also include the fair value of interest rate swaps.See Note 7 for additional disclosures.

Revenue Recognition

The Company derives revenues from energy efficiency and renewable energy products and services. Energy efficiency products and services include the design, engineering, and installation of equipment and other measures to improve the efficiency, and control the operation, of a facility’s energy infrastructure. Renewable energy products and services include the construction of small-scale plants that produce electricity, gas, heat or cooling from renewable sources of energy, the sale of such electricity, gas, heat or cooling from plants that the Company owns, and the sale and installation of solar energy products and systems.

Revenue from the installation or construction of projects is recognized on a percentage-of-completion basis. The percentage-of-completion for each project is determined on an actual cost-to-estimated final cost basis. Maintenance revenue is recognized as related services are performed. In accordance with industry practice, the Company includes in current assets and liabilities the amounts of receivables related to construction projects realizable and payable over a period in excess of one year. The revenue associated with contract change orders is recognized only when the authorization for the change order has been properly executed and the work has been performed.

When the estimate on a contract indicates a loss, or claims against costs incurred reduce the likelihood of recoverability of such costs, the Company records the entire expected loss immediately, regardless of the percentage of completion.

Billings in excess of cost and estimated earnings represents advanced billings on certain construction contracts. Costs and estimated earnings in excess of billings represent certain amounts under customer contracts that were earned and billable but not invoiced.

The Company sells certain products and services in bundled arrangements, where multiple products and/or services are involved. The Company divides bundled arrangements into separate deliverables and revenue is allocated to each deliverable based on the relative selling price. The relative selling price is determined using third party evidence or management’s best estimate of selling price.

The Company recognizes revenue from the sale and delivery of products, including the output from renewable energy plants, when produced and delivered to the customer, in accordance with specific contract terms, provided that persuasive evidence of an arrangement exists, the Company’s price to the customer is fixed or determinable and collectability is reasonably assured.

The Company recognizes revenue from operations and maintenance (“O&M”) contracts, consulting services and enterprise energy management services as the related services are performed.

For a limited number of contracts under which the Company receives additional revenue based on a share of energy savings, such additional revenue is recognized as energy savings are generated.

Cost of Revenues

Cost of revenues include the cost of labor, materials, equipment, subcontracting and outside engineering that are required for the development and installation of projects, as well as preconstruction costs, sales incentives, associated travel, inventory obsolescence charges, amortization of intangible assets related to customer contracts and, if applicable, costs of procuring financing. A majority of the Company’s contracts have fixed price terms; however, in some cases the Company negotiates protections, such as a cost-plus structure, to mitigate the risk of rising prices for materials, services and equipment.

Cost of revenues also include the costs of maintaining and operating the small-scale renewable energy plants that the Company owns, including the cost of fuel (if any) and depreciation charges.

Income Taxes

The Company provides for income taxes based on the liability method. The Company provides for deferred income taxes based on the expected future tax consequences of differences between the financial statement basis and the tax basis of assets and liabilities calculated using the enacted tax rates in effect for the year in which the differences are expected to be reflected in the tax return.

The Company accounts for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors that include, but are not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. The Company evaluates uncertain tax positions on a quarterly basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions.

The Company’s liabilities for uncertain tax positions can be relieved only if the contingency becomes legally extinguished through either payment to the taxing authority or the expiration of the statute of limitations, the recognition of the benefits associated with the position meet the “more-likely-than-not” threshold or the liability becomes effectively settled through the examination process.

The Company considers matters to be effectively settled once the taxing authority has completed all of its required or expected examination procedures, including all appeals and administrative reviews; the Company has no plans to appeal or litigate any aspect of the tax position; and the Company believes that it is highly unlikely that the taxing authority would examine or re-examine the related tax position. The Company also accrues for potential interest and penalties, related to unrecognized tax benefits in income tax expense. See Note 4 for additional information on the Company’s income taxes.

Foreign Currency

The local currency of the Company’s foreign operations is considered the functional currency of such operations. All assets and liabilities of the Company’s foreign operations are translated into U.S. dollars at period-end exchange rates. Income and expense items are translated at average exchange rates prevailing during the period. Translation adjustments are accumulated as a separate component of stockholders’ equity. Foreign currency translation gains and losses are reported in the consolidated statements of comprehensive income (loss). Foreign currency transaction gains and losses are reported in the consolidated statements of income (loss).

Financial Instruments

Financial instruments consist of cash and cash equivalents, restricted cash, accounts and notes receivable, long-term contract receivables, accounts payable, accrued expenses, equity-based liabilities, short- and long-term debt and interest rate swaps. The estimated fair value of cash and cash equivalents, restricted cash, accounts and notes receivable, long-term contract receivables, accounts payable, accrued expenses and equity-based liabilities approximates their carrying value. See below and Note 6 for additional information regarding the Company’s fair value measurements.

Fair Value Measurements

The Company follows the guidance related to fair value measurements for all of its non-financial assets and non-financial liabilities, except for those recognized at fair value in the financial statements at least annually. These assets include goodwill and long-lived assets measured at fair value for impairment assessments, and non-financial assets and liabilities initially measured at fair value in a business combination.

Because of their short maturity, the carrying amounts of cash and cash equivalents, accounts and notes receivable, accounts payable, accrued expenses and short-term debt approximate fair value. The carrying value of long-term variable-rate debt approximates fair value. As of June 30, 2014, the fair value of the Company’s fixed-rate long-term debt exceeds its carrying value by approximately $103. Fair value of the Company’s debt is based on quoted market prices or on rates available to the Company for debt with similar terms and maturities.

The Company accounts for its interest rate swaps as derivative financial instruments in accordance with the related guidance. Under this guidance, derivatives are carried on the Company’s consolidated balance sheets at fair value. The fair value of the Company’s interest rate swaps are determined based on observable market data in combination with expected cash flows for each instrument.

See Note 6 for additional information related to fair value measurements.

Stock-Based Compensation Expense

Stock-based compensation expense results from the issuance of shares of restricted common stock and grants of stock options to employees, directors, outside consultants and others. The Company recognizes the costs associated with restricted stock and option grants using the fair value recognition provisions of ASC 718, Compensation - Stock Compensation on a straight-line basis over the vesting period of the awards.

Stock-based compensation expense is recognized based on the grant-date fair value. The Company estimates the fair value of the stock-based awards, including stock options, using the Black-Scholes option-pricing model. Determining the fair value of stock-based awards requires the use of highly subjective assumptions, including the fair value of the common stock underlying the award, the expected term of the award and expected stock price volatility.

The assumptions used in determining the fair value of stock-based awards represent management’s estimates, which involve inherent uncertainties and the application of management judgment. As a result, if factors change, and different assumptions are employed, the stock-based compensation could be materially different in the future. The risk-free interest rates are based on the U.S. Treasury yield curve in effect at the time of grant, with maturities approximating the expected life of the stock options.

The Company has no history of paying dividends. Additionally, as of each of the grant dates, there was no expectation that the Company would pay dividends over the expected life of the options. The expected life of the awards is estimated using historical data and management’s expectations. Because there was no public market for the Company’s common stock prior to the Company’s initial public offering, management lacked company-specific historical and implied volatility information. Therefore, estimates of expected stock volatility were based on that of publicly traded peer companies, and it is expected that the Company will continue to use this methodology until such time as there is adequate historical data regarding the volatility of the Company’s publicly traded stock price.

The Company is required to recognize compensation expense for only the portion of options that are expected to vest. Actual historical forfeiture rate of options is based on employee terminations and the number of shares forfeited. This data and other qualitative factors are considered by the Company in determining the forfeiture rate used in recognizing stock compensation expense. If the actual forfeiture rate varies from historical rates and estimates, additional adjustments to compensation expense may be required in future periods. If there are any modifications or cancellations of the underlying unvested securities or the terms of the stock option, it may be necessary to accelerate, increase or cancel any remaining unamortized stock-based compensation expense.

For the three months ended June 30, 2014 and 2013, the Company recorded stock-based compensation expense of $707 and $665, respectively, in connection with stock-based payment awards. For the six months ended June 30, 2014 and 2013, the Company recorded stock-based compensation expense of $1,425 and $1,336, respectively, in connection with stock-based payment awards. The compensation expense is allocated between cost of revenues and selling, general and administrative expenses in the accompanying consolidated statements of income (loss) based on the salaries and work assignments of the employees holding the options. As of June 30, 2014, there was $4,867 of unrecognized compensation expense related to non-vested stock option awards that is expected to be recognized over a weighted-average period of 3.1 years.

The Company also accounts for equity instruments issued to non-employee directors and consultants at fair value. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the date on which the counterparty’s performance is complete. No awards to individuals who were not either an employee or director of the Company occurred during the six months ended June 30, 2014 or during the year ended December 31,2013.

Derivative Financial Instruments

In the normal course of business, the Company utilizes derivatives contracts as part of its risk management strategy to manage exposure to market fluctuations in interest rates. These instruments are subject to various credit and market risks. Controls and monitoring procedures for these instruments have been established and are routinely reevaluated. Credit risk represents the potential loss that may occur because a party to a transaction fails to perform according to the terms of the contract. The measure of credit exposure is the replacement cost of contracts with a positive fair value. The Company seeks to manage credit risk by entering into financial instrument transactions only through counterparties that the Company believes to be creditworthy.

Market risk represents the potential loss due to the decrease in the value of a financial instrument caused primarily by changes in interest rates. The Company seeks to manage market risk by establishing and monitoring limits on the types and degree of risk that may be undertaken. As a matter of policy, the Company does not use derivatives for speculative purposes. The Company considers the use of derivatives with all financing transactions to mitigate risk.

The Company recognizes cash flows from derivative instruments as operating activities in the consolidated statements of cash flows. The effective portion of changes in fair value on interest rate swaps designated as cash flow hedges are recognized in the Company’s consolidated statements of comprehensive income (loss). The ineffective portion of changes in fair value on interest rate swaps designated as hedges and changes in fair value on interest rate swaps not designated as hedges are recognized in the Company’s consolidated statements of income (loss).

During 2007, the Company entered into twofifteen-year interest rate swap contracts under which the Company agreed to pay an amount equal to a specified fixed rate of interest times a notional principal amount, and to in turn receive an amount equal to a specified variable rate of interest times the same notional principal amount. The swaps cover initial notional amounts of $13,081 and $3,256, each a variable rate note at fixed interest rates of 5.4% and 5.3%, respectively, and expire in March 2024 and February 2021, respectively. These interest rate swaps qualified, but were not designated, as cash flow hedges until April 1, 2010. Since April 2010, they have been designated as hedges.

In March 2010, the Company entered into a fourteen-year interest rate swap contract under which the Company agreed to pay an amount equal to a specified fixed rate of interest times a notional amount, and to in turn receive an amount equal to a specified variable rate of interest times the same notional principal amount. The swap covers an initial notional amount of approximately $27,900 variable rate note at a fixed interest rate of 6.99% and expires in December 2024. This swap was designated as a hedge in March 2013. During the second quarter of 2014 this swap was de-designated and re-designated as a hedge as a result of a partial pay down of the associated hedged debt principal. As a result $566 was reclassified from accumulated other comprehensive income and recorded as a reduction to other expense, net during the three months ended June 30, 2014.

In July 2011, the Company entered into a five-year interest rate swap contract under which the Company agreed to pay an amount equal to a specified fixed rate of interest times a notional amount, and to in turn receive an amount equal to a specified variable rate of interest times the same notional principal amount. The swap covers an initial notional amount of $38,571 variable rate note at a fixed interest rate of 1.965% and expires in June 2016. This interest rate swap has been designated as a hedge since inception.

In October 2012, the Company entered into twoeight-year interest rate swap contracts under which the Company agreed to pay an amount equal to a specified fixed rate of interest times a notional amount, and to in turn receive an amount equal to a specified variable rate of interest times the same notional principal amount. The swaps cover an initial notional amount of $16,750 variable rate note at a fixed interest rate of 1.71%. This notional amount increased to $42,247 on September 30, 2013 and expires in March 2020. This interest rate swap has been designated as a hedge since inception.

In October 2012, the Company also entered into twoeight-year forward starting interest rate swap contracts under which the Company agreed to pay an amount equal to a specified fixed rate of interest times a notional amount, and to in turn receive an amount equal to a specified variable rate of interest times the same notional principal amount. The swaps cover an initial notional amount of $25,377 variable rate note at a fixed interest rate of 3.70%, with an effective date of March 31, 2020, and expires in June 2028. This interest rate swap has been designated as a hedge since inception.

See Notes 6 and 7 for additional information on the Company’s derivative instruments.

Earnings Per Share

Basic earnings per share is calculated using the Company’s weighted-average outstanding common shares, including vested restricted shares. When the effects are not anti-dilutive, diluted earnings per share is calculated using: the weighted-average outstanding common shares; the dilutive effect of convertible preferred stock, under the “if converted” method; and the treasury stock method with regard to warrants and stock options; all as determined under the treasury stock method.

	Three Months Ended June 30,					Six Months Ended June 30,
	2014		2013			2014			2013
Net income (loss)	$	2,719	$	(1,781	)	$	(5,562	)	$	(3,705	)
Basic weighted-average shares outstanding	46,064,049		45,465,529			45,987,447			45,396,765
Effect of dilutive securities:
Stock options	509,642		—			—			—
Diluted weighted-average shares outstanding	46,573,691		45,465,529			45,987,447			45,396,765

The Company excluded 716,695 and 987,663 potentially dilutive shares from the calculation of diluted earnings per share for the six months ended June 30, 2014 and 2013, respectively, as the effect would be anti-dilutive due to the Company’s net loss position in both periods.

For the three months ended June 30, 2014 and 2013, the total number of shares of common stock related to stock options excluded from the calculation of dilutive shares, as the effect would be anti-dilutive, was 1,811,928 and 2,475,556, respectively. For the six months ended June 30, 2014 and 2013, the total number of shares of common stock related to stock options excluded from the calculation of dilutive shares, as the effect would be anti-dilutive, was 1,781,928 and 2,532,853, respectively.

Variable Interest Entities

Certain contracts are executed jointly through partnership and joint venture arrangements with unrelated third parties. Generally, these arrangements are characterized by a 50 percent or less ownership interest that requires only a small initial investment. The arrangements are often formed for the single business purpose of executing a specific project and allow the Company to share risks and/or secure specialty skills required for project execution.

        The Company evaluates each partnership and joint venture at inception to determine if it qualifies as a variable interest entity (“VIE”) under ASC 810, Consolidation. A variable interest entity is an entity used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors who are not required to provide sufficient financial resources for the entity to support its activities without additional subordinated financial support. Upon the occurrence of certain events outlined in ASC 810, the Company reassesses its initial determination of whether the partnership or joint venture is a VIE.

        The Company also evaluates whether it is the primary beneficiary of each VIE and consolidates the VIE if the Company has both (a) the power to direct the economically significant activities of the entity and (b) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. The Company considers the contractual agreements that define the ownership structure, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights and board representation of the respective parties in determining whether it qualifies as the primary beneficiary. The Company also considers all parties that have direct or implicit variable interests when determining whether it is the primary beneficiary. When the Company is determined to be the primary beneficiary, the VIE is consolidated. As required by ASC 810, management's assessment of whether the Company is the primary beneficiary of a VIE is continuously performed.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606). The guidance in this ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The guidance in this ASU supersedes the revenue recognition requirements in ASC 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. Additionally, this ASU supersedes some cost guidance included in ASC 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer are amended to be consistent with the guidance on recognition and measurement in this ASU. For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Retrospective application of the amendments in this ASU are required. The new guidance must be adopted using either a full retrospective approach for all periods presented in the period of adoption (with some limited relief provided) or a modified retrospective approach. Early application is not permitted under GAAP. The Company is currently assessing the impact of this ASU on its consolidated financial statements.

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Summary of Significant Accounting Policies- Project Assets (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Accounting Policies [Abstract]
Interest costs capitalized	$ 0	$ 250,000	$ 395,000	$ 715,000
Minimum qualifying operating period for prorated repayments of grants			5 years
Amounts received from grants	3,727,000	289,000	3,727,000	1,580,000
Deferred grant income	$ 9,118,000		$ 9,118,000		$ 8,163,000

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Fair Value Measurement- Fair Value and Carrying Value of Long-term Debt (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Fair Value Disclosures [Abstract]
Long-term debt value, fair value	$ 105,342	$ 114,776
Long-term debt value, carrying value	$ 105,239	$ 116,196

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The changes in the carrying value of goodwill attributable to each reportable segment are as follows:

	U.S. Regions		U.S. Federal		Canada			Small-Scale Infrastructure		Other		Total
Balance, December 31, 2013	$	24,759	$	3,375	$	4,124		$	—	$	20,816	$	53,074
Goodwill acquired during the year	—		—		—			—		2,575		2,575
Fair value adjustment(1)	—		—		—			—		641		641
Currency effects	—		—		(13		)	—		183		170
Balance, June 30, 2014	$	24,759	$	3,375	$	4,111		$	—	$	24,215	$	56,460
Accumulated Goodwill Impairment Balance, December 31, 2013	$	—	$	—	$	(1,016	)	$	—	$	—	$	(1,016	)
Accumulated Goodwill Impairment Balance, June 30, 2014	$	—	$	—	$	(1,016	)	$	—	$	—	$	(1,016	)

(1) Fair value adjustment represents a final purchase accounting adjustment to decrease the recorded fair value of certain acquired intangible assets totaling $801, net of a $160 deferred tax liability adjustment, related to the Company’s prior year acquisition of The Energy Services Partnership Limited and ESP Response Limited (together “ESP”).

Schedule of Intangible Assets, Net

The gross carrying amount and accumulated amortization of intangible assets are as follows:

	As of June 30,		As of December 31,
	2014		2013
Gross Carrying Amount
Customer contracts	$	7,724	$	7,684
Customer relationships	9,239		8,200
Non-compete agreements	3,296		3,230
Technology	2,844		2,386
Trade names	556		556
	23,659		22,056
Accumulated Amortization
Customer contracts	5,983		5,349
Customer relationships	3,565		2,923
Non-compete agreements	2,336		1,872
Technology	1,523		1,299
Trade names	400		360
	13,807		11,803
Intangible assets, net	$	9,852	$	10,253