EX-99.2 4 ex992-desriiivxproformafin.htm EX-99.2 Document


Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The unaudited pro forma condensed combined financial information below has been prepared to illustrate the effect of Altus Power, Inc.’s (“Altus”) acquisition of DESRI II Acquisition Holdings, L.L.C. and DESRI V Acquisition Holdings, L.L.C. DESRI II & V (“DESRI II & V”) (the “Acquisition”), which was consummated on November 11, 2022, for a total purchase price of $102.2 million.

Such information is based on Altus’ and DESRI II & V’s historical statements as adjusted to give effect to the acquisition. In the unaudited pro forma condensed combined balance sheet as of September 30, 2022, it is assumed that the acquisition occurred on September 30, 2022. In the unaudited pro forma condensed combined statements of operation for the nine months ended September 30, 2022, and the year ended December 31, 2021, it is assumed that the acquisition occurred on January 1, 2021.

The accompanying notes should be read together with the pro forma condensed combined financial information. Such notes describe the assumptions and estimates related to the unaudited adjustments to the pro forma condensed combined financial information.

The pro forma condensed combined financial information may not necessarily reflect the financial condition or results of operations had the acquisition occurred on the dates noted above, and Altus’ actual results may differ from the pro forma amounts presented.


Altus Power, Inc.
PRO FORMA CONDENSED COMBINED BALANCE SHEET
(unaudited)
(In thousands, except share and per share data)
 As of September 30, 2022As of September 30, 2022
Altus Power, Inc.DESRI II & V
(adjusted)
(see Note 4)
Pro Forma Adjustments
(See Note 3)
Pro Forma Altus Power, Inc.
Assets
Current assets:
Cash and cash equivalents$290,894 $773 $(82,235)(A)$221,735 
14,812 (C)
(2,509)(J)
Current portion of restricted cash2,477 3,671 6,148 
Accounts receivable, net15,725 3,036 18,761 
Derivative assets, current portion— — 4,345 (D)4,345 
Other current assets6,406 1,146 (2,564)(D)4,988 
Total current assets315,502 8,626 (68,151)255,977 
Restricted cash, noncurrent portion4,018 — 641 (C)4,659 
Derivative assets, noncurrent portion— — (835)(B)1,254 
2,089 (D)
Property, plant and equipment, net788,132 192,901 (11,480)(B)969,553 
Intangible assets, net19,571 3,586 27,674 (B)50,831 
Goodwill— — 6,105 (B)6,105 
Other assets3,107 4,452 (3,870)(D)3,689 
Total assets$1,130,330 $209,565 $(47,827)$1,292,068 
Liabilities, redeemable noncontrolling interests, and stockholders' equity
Current liabilities:
Accounts payable$2,382 $158 $2,540 
Interest payable4,459 — 4,459 
Purchase price payable— — 20,000 (A)20,000 
Current portion of long-term debt, net17,321 — 12,745 (B)30,109 
43 (C)
Due to related parties47 — 47 
Contract liabilities, current portion— — 1,351 (E)1,351 
Other current liabilities8,455 450 (482)(C)8,198 
(225)(E)
Total current liabilities32,664 608 33,432 66,704 
Redeemable warrant liability12,715 — 12,715 
Alignment shares liability136,826 — 136,826 
Contract liabilities, noncurrent portion— — 771 (B)7,082 
6,311 (E)
Long-term debt, net of unamortized debt issuance costs and current portion527,709 105,265 (12,664)(B)648,153 
19,729 (C)
8,114 (E)
Intangible liabilities, net12,532 — 5,290 (B)17,822 
Asset retirement obligations7,933 5,591 (4,023)(B)9,501 
Deferred tax liabilities, net11,973 — 11,973 
Other long-term liabilities8,316 16,138 (1,111)(B)7,792 
$(15,551)(E)
Total liabilities$750,668 $127,602 $40,298 $918,568 


Commitments and contingent liabilities
Redeemable noncontrolling interests18,444 — 18,444 
Stockholders' equity
Common stock $0.0001 par value; 988,591,250 shares authorized as of September 30, 2022; 157,696,560 shares issued and outstanding as of September 30, 202216 — 16 
Preferred stock $0.0001 par value; 10,000,000 shares authorized, zero shares issued and outstanding as of September 30, 2022— — — 
Additional paid-in capital455,869 81,777 (102,235)(A)455,869 
20,458 (B)
Accumulated deficit(113,802)— (3,837)(C)(120,148)
$(2,509)(J)
Total stockholders' equity$342,083 $81,777 $(88,123)$335,737 
Noncontrolling interests19,135 186 (2)(B)19,319 
Total equity$361,218 $81,963 $(88,125)$355,056 
Total liabilities, redeemable noncontrolling interests, and stockholders' equity$1,130,330 $209,565 $(47,827)$1,292,068 

See accompanying notes to unaudited pro forma condensed combined financial statements.


Altus Power, Inc.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(unaudited)
(In thousands, except share and per share data)
 Nine Months Ended September 30, 2022Nine Months Ended September 30, 2022
 Altus Power, Inc.DESRI II & V
(adjusted)
(see Note 4)		Pro Forma Adjustments
(See Note 3)		Pro Forma Altus Power, Inc.
Operating revenues, net$74,399 $20,891 $627 (H)$96,179 
262 (F)
Operating expenses
Cost of operations (exclusive of depreciation and amortization shown separately below)12,842 3,349 16,191 
General and administrative19,502 615 (306)(I)19,811 
Depreciation, amortization and accretion expense20,819 7,115 1,060 (F)28,994 
Acquisition and entity formation costs583 — 583 
Gain on fair value remeasurement of contingent consideration, net(146)— (146)
Gain on disposal of property, plant and equipment(2,222)— (2,222)
Stock-based compensation6,670 — 6,670 
Total operating expenses$58,048 $11,079 $754 $69,881 
Operating income16,351 9,812 135 26,298 
Other (income) expense
Change in fair value of redeemable warrant liability6,447 — 6,447 
Change in fair value of alignment shares liability9,367 — 9,367 
Other (income) expense, net(2,860)— (2,860)
Interest expense, net15,768 (10,521)4,657 (G)9,904 
Total other expense$28,722 $(10,521)$4,657 $22,858 
Loss before income tax expense$(12,371)$20,333 $(4,522)$3,440 
Income tax expense(2,548)— 1,174 (L)(1,374)
Net income (loss)$(14,919)$20,333 $(3,348)$2,066 
Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests(2,473)39 (2,434)
Net income (loss) attributable to Altus Power, Inc.$(12,446)$20,294 $(3,348)$4,500 
Net loss per share attributable to common stockholders
Basic$(0.08)(K)$0.03 
Diluted$(0.08)(K)$0.03 
Weighted average shares used to compute net loss per share attributable to common stockholders
Basic153,482,503 153,482,503 
Diluted153,482,503 154,400,697 
See accompanying notes to unaudited pro forma condensed consolidated financial statements.



Altus Power, Inc.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(unaudited)
(In thousands, except share and per share data)
 For the Year Ended December 31, 2021For the Year Ended December 31, 2021
 Altus Power, Inc.DESRI II & V
(adjusted)
(see Note 4)		Pro Forma Adjustments
(See Note 3)		Pro Forma Altus Power, Inc.
Operating revenues, net$71,800 $25,075 $2,944 (H)$100,171 
352 (F)
Operating expenses
Cost of operations (exclusive of depreciation and amortization shown separately below)14,029 3,820 17,849 
General and administrative16,915 846 (407)(I)17,354 
Depreciation, amortization and accretion expense20,967 9,425 1,475 (F)31,867 
Acquisition and entity formation costs1,489 — 2,509 (J)3,998 
Gain on fair value remeasurement of contingent consideration, net(2,800)— (2,800)
Gain on disposal of property, plant and equipment(12,842)— (12,842)
Total operating expenses$37,758 $14,091 $3,577 $55,426 
Operating income34,042 10,984 (281)44,745 
Other (income) expense
Change in fair value of redeemable warrant liability2,332 — 2,332 
Change in fair value of alignment shares liability(5,013)— (5,013)
Other (income) expense, net245 (11)234 
Interest expense, net19,933 (310)6,957 (G)26,580 
Loss on extinguishment of debt3,245 — 2,969 (G)6,214 
Total other (income) expense$20,742 $(321)$9,926 $30,347 
Income before income tax expense$13,300 $11,305 $(10,207)$14,398 
Income tax expense(295)— 2,650 (L)2,355 
Net income$13,005 $11,305 $(7,557)$16,753 
Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests7,099 (16,819)(9,720)
Net income attributable to Altus Power, Inc.$5,906 $28,124 $(7,557)$26,473 
Net income per share attributable to common stockholders
Basic$0.06 (K)$0.28 
Diluted$0.06 (K)$0.27 
Weighted average shares used to compute net income per share attributable to common stockholders
Basic92,751,839 92,751,839 
Diluted96,603,428 96,603,428 
See accompanying notes to unaudited pro forma condensed consolidated financial statements.


NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

1.Basis of Presentation
The historical financial statements have been adjusted in the pro forma combined financial information to give effect to certain transaction accounting adjustments, as discussed further in Note 3.
The business combination was accounted for under the acquisition method of accounting in accordance with FASB Accounting Standards Codification (ASC) Topic 805, Business Combinations. Altus is the acquirer for the accounting purposes and has therefore estimated the fair value of DESRI II & V’s assets acquired and liabilities assumed.
2.Preliminary Purchase Consideration
The total preliminary estimated purchase price has been allocated to DESRI II & V’s tangible and intangible assets and liabilities in the unaudited pro forma condensed combined financial information on the basis of their estimated fair values as of November 11, 2022.
Cash consideration$82,235 
Purchase price payable20,000 
Total purchase price$102,235 
Assets
Current assets
Cash and cash equivalents$773 
Restricted cash, current portion3,671 
Accounts receivable3,036 
Other current assets1,146 
Non-current assets
Derivative assets3,035 
Property, plant and equipment181,421 
Intangible assets31,260 
Goodwill6,105 
Other assets582 
Liabilities
Current liabilities
Accounts payable(158)
Current portion of long-term debt(12,745)
Other current liabilities(450)
Non-current liabilities
Contract liabilities(7,000)
Long-term debt, net of current portion(100,715)
Asset retirement obligations(1,568)
Intangible liabilities(5,290)
Other liabilities(684)
Noncontrolling interests
Noncontrolling interests(184)
Total$102,235 


The preliminary estimate of the fair value of the DESRI II & V’s assets and liabilities was determined with the assistance of a third-party valuation expert. The purchase price allocation adjustments are preliminary and have been made solely to provide unaudited pro forma condensed combined financial information. Altus will determine the final purchase price allocation after thoroughly assessing DESRI II & V’s assets and liabilities. As a result, the final acquisition transaction accounting could differ materially from the pro forma adjustments presented herein.

3.Pro Forma Adjustments
The following adjustments have been reflected in the unaudited pro forma condensed combined financial information. The pro forma adjustments are based on preliminary estimates and assumptions and are subject to change.
(A)Reflects the purchase consideration (see Note 2) that we paid to the Seller for DESRI II & V and the elimination of DESRI II & V historical equity.
(B)Reflects the adjustment of DESRI II & V historical assets and liabilities to fair value based upon the purchase price and other purchase accounting adjustments, as described in Note 2, including the classification of acquired assets and liabilities as current and non-current. Acquired property, plant and equipment, intangible assets, and intangible liabilities are being depreciated on a straight-line basis over their weighted-average remaining useful lives of approximately 23 years, 10 years, and 12 years, respectively.
(C)Reflects the adjustment based upon the refinancing of debt assumed as part of the acquisition of the DESRI II & V portfolios. On December 23, 2022, the Company entered into a term loan facility (the “Term Loan”) with KeyBank National Association and The Huntington Bank as lenders. The proceeds of the Term Loan were used to repay the five outstanding project-level debt facilities that were assumed as part of the acquisition of the DESRI II & V portfolios, as well as to finance the operations of the solar projects acquired. The Term Loan matures on December 23, 2027, and has a variable interest rate based on Daily Simple SOFR plus a margin, which is effectively fixed at a rate of 4.885% by an interest rate swap.
(D)Reflects the adjustment to reclassify derivative assets from Other current assets to a separate line item on the pro forma condensed combined balance sheet.
(E)Reflects the adjustment to reclassify (a) contract liabilities from Other liabilities to a separate line item and (b) Financing lease obligation to Long-term debt, net of unamortized debt issuance costs on the pro forma condensed combined balance sheet.
(F)Reflects the adjustment to depreciation and amortization expense resulting from the estimated fair values of acquired fixed assets and intangible assets.
(G)Reflects the adjustment to interest expense and loss on extinguishment of debt based upon the refinancing of debt assumed from DESRI II & V, as discussed in (C) above.
(H)Reflects the adjustment for the difference in revenue recognized due to an acquired contract liability which was recognized at fair value.
(I)Reflects the adjustment to eliminate management fees charged to DESRI II & V by its parent company.
(J)Reflects the adjustment for transaction costs associated with the acquisition of DESRI II & V.
(K)Basic and diluted pro forma net income (loss) per share is based on the weighted average number of Altus’ common shares outstanding for the periods presented.
(L)Represents the cumulative income tax expense of all adjustments impacting the pro forma condensed combined statements of operations.
4.Reclassification Adjustments
Management identified differences in the presentation of DESRI II & V’s financial information to that of Altus. Therefore, reclassification adjustments were made to conform the presentation of DESRI II & V’s financial information to that of Altus, as shown below in the “Reclassification Adjustments” columns.



Historical Balance Sheet
As of September 30, 2022As of September 30, 2022
DESRI II Acquisition Holdings, L.L.C.
(Historical)		DESRI V Acquisition Holdings, L.L.C.
(Historical)		Reclassification AdjustmentsDESRI II & V
(Adjusted)
Assets
Current assets:
Cash and cash equivalents$— $— $773 $773 
Current portion of restricted cash— — 3,671 3,671 
Accounts receivable, net— — 3,036 3,036 
Other current assets— — 1,146 1,146 
Cash421 352 (773)— 
Restricted cash1,686 1,985 (3,671)— 
Accounts receivable1,142 1,894 (3,036)— 
Other assets634 512 (1,146)— 
Total current assets3,883 4,743 — 8,626 
Property, plant and equipment, net— — 192,901 192,901 
Intangible assets, net— — 3,586 3,586 
Other current assets— — 4,452 4,452 
Property, plant and equipment, net79,316 113,585 (192,901)— 
Intangible assets, net1,044 2,542 (3,586)— 
Derivative assets870 3,000 (3,870)— 
Other assets261 321 (582)— 
Total assets$85,374 $124,191 $— $209,565 
Liabilities and equity
Current liabilities:
Accounts payable$— $— $158 $158 
Other current liabilities— — 450 450 
Accounts payable20 138 (158)— 
Accrued liabilities110 234 (344)— 
Due to related parties43 63 (106)— 
Total current liabilities173 435 — 608 
Long-term debt, net of unamortized debt issuance costs and current portion— — 105,265 $105,265 
Asset retirement obligations— — 5,591 5,591 
Other long-term liabilities— — 16,138 16,138 
Derivative liabilities469 778 (1,247)— 
Debt, net of unamortized deferred financing costs37,430 67,835 (105,265)— 
Asset retirement obligations2,567 3,024 (5,591)— 
Other liabilities132 14,759 (14,891)— 
Total liabilities$40,771 $86,831 $— $127,602 
Equity
Additional paid-in capital— — 81,777 81,777 
Noncontrolling interests— — 186 186 
Member's equity44,417 37,360 (81,777)— 
Noncontrolling interests186 — (186)— 
Total equity$44,603 $37,360 $— $81,963 
Total liabilities and equity$85,374 $124,191 $— $209,565 




Historical Statements of Operations
Nine Months Ended September 30, 2022Nine Months Ended September 30, 2022
DESRI II Acquisition Holdings, L.L.C.
(Historical)		DESRI V Acquisition Holdings, L.L.C.
(Historical)		Reclassification AdjustmentsDESRI II & V
(Adjusted)
Operating revenues, net$— $— $20,891 $20,891 
Revenues9,122 11,769 (20,891)— 
Operating expenses
Cost of operations (exclusive of depreciation and amortization shown separately below)— — 3,349 3,349 
General and administrative— — 615 615 
Depreciation, amortization and accretion expense— — 7,115 7,115 
Operations and maintenance1,671 1,678 (3,349)— 
Depreciation and amortization3,059 4,056 (7,115)— 
General and administrative280 335 (615)— 
Total operating expenses$5,010 $6,069 $— $11,079 
Operating income4,112 5,700 — 9,812 
Interest expense, net— — (10,521)$(10,521)
Net realized and change in unrealized gains / (losses) on derivative financial instruments4,580 9,297 (13,877)$— 
Interest expense, net(1,018)(2,338)3,356 $— 
Total other expense$3,562 $6,959 $(21,042)$(10,521)
Net income$7,674 $12,659 $20,333 
Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests— — 39 $39 
Net (income) / loss attributable to redeemable and non-redeemable noncontrolling interest(39)— 39 $— 
Net income (loss) attributable to Altus Power, Inc.$7,635 $12,659 $20,294 



For the Year Ended December 31, 2021For the Year Ended December 31, 2021
DESRI II Acquisition Holdings, L.L.C.
(Historical)		DESRI V Acquisition Holdings, L.L.C.
(Historical)		Reclassification AdjustmentsDESRI II & V
(Adjusted)
Operating revenues, net$— $— $25,075 $25,075 
Revenues10,807 14,268 (25,075)— 
Operating expenses
Cost of operations (exclusive of depreciation and amortization shown separately below)— — 3,820 3,820 
General and administrative— — 846 846 
Depreciation, amortization and accretion expense— — 9,425 9,425 
Operations and maintenance1,954 1,866 (3,820)— 
Depreciation and amortization4,071 5,354 (9,425)— 
General and administrative385 461 (846)— 
Total operating expenses$6,410 $7,681 $— $14,091 
Operating income4,397 6,587 — 10,984 
Other (income) expense, net— — (11)$(11)
Interest expense, net— — (310)$(310)
Net realized and change in unrealized gains / (losses) on derivative financial instruments1,291 2,588 (3,879)$— 
Interest expense, net(1,044)(2,525)3,569 $— 
Other income / (expenses), net1 10 (11)$— 
Total other expense$248 $73 $(642)$(321)
Net income$4,645 $6,660 $11,305 
Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests— — (16,819)$(16,819)
Net (income) / loss attributable to redeemable and non-redeemable noncontrolling interest(56)16,875 (16,819)$— 
Net income (loss) attributable to Altus Power, Inc.$4,589 $23,535 $28,124