#1Ⓒ2023 Altus Power, Inc. All rights reserved. 86 47 www. 32 BES 22 135 SLPHA ENE 52 C *** anama 149 September 2023 K F nanana H FFF 117 T 4055 1 WONY nananan 165 B COMO FOT menamen s A 1637 HAF CE 44 H 2477 YA anara ME 520M AXXYI Ga PIT 778 H www ARUNY www. Ste AS NCS 421 2004-2 4 Y JACKE Sp DEPTH 23 www 5 SES P htt MAX5 AAL NA H 14 Investor Presentation LSCRAMER R Acara 22 r 162 B SAMA 12335 2 1113 TENTO B wher R L UNES menen Supe 32228A 7 MY MSPLASS At B SOAR 8 verer ✓NTAS D OSV B PRE SV 72322 ANANDAL rererere 44 11 444 SYNSSKYC The P exerere 14 200 11 DE DEBO ACEPER BERE ● Becom PASS 125 H 837 A STE 132 14371 S 1 www 1 NIG 244 L H 111 S cacacarars 1 24 152 7621 52 122 www. BASIC S 106 706 5600 www. FOOTER 2222 teher CANAD SER www. PSPLYSAZZANA 144 2003 2335 W LAVE PASSTAN 13544AANXI PULC BR SAMAAN - ASOS 4 SAN BURS SE w 2-3 www 10 exicana COOOOooo 13NBE CES 13 ht 66005 www BUL. G § RENEWABLE ENERGY ALTUSPOWER ME 21#2Cautionary Statements And Risk Factors That May Affect Future Results ALTUSPOWER RENEWABLE ENERGY The following presentation for Altus Power, Inc. ("Altus Power" or the "Company") has been prepared by Altus Power's management. You should read the presentation together with our consolidated financial statements and related notes appearing in our 2022 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 30, 2023 (the "2022 Annual Report on Form 10-K"). Any references in this section to "we," "our" or "us" shall mean Altus Power. In addition to historical information, this presentation contains statements that are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements do not convey historical information but relate to predicted or potential future events and financial results, such as statements of our plans, strategies and intentions, or our future performance or goals that are based upon management's current expectations. Our forward-looking statements can often be identified by the use of forward-looking terminology such as "aims," "believes," "expects," "intends," "may," "could," "will," "should," "plans," "projects," "forecasts," "seeks," "anticipates," "goal," "objective," "target," "estimate," "future," "outlook," "strategy," "vision," or variations of such words or similar terminology. Investors and prospective investors are cautioned that such forward-looking statements are only projections based on current estimations. These statements involve risks and uncertainties and are based upon various assumptions. Such risks and uncertainties include, but are not limited to, the risks as described in the "Risk Factors" in our 2022 Annual Report on Form 10-K These risks and uncertainties, among others, could cause our actual future results to differ materially from those described in our forward-looking statements or from our prior results. Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks to circumstances only as of the date on which it is made. We are not obligated to update these forward-looking statements, even though our situation may change in the future. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Altus Power's control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. These risks, uncertainties, assumptions and other important factors include, but are not limited to: (1) failure to obtain required consents or regulatory approvals in a timely manner or otherwise; (2) the ability of Altus Power to retain customers and maintain and expand relationships with business partners, suppliers and customers; (3) the ability of Altus Power to successfully integrate the acquisition of solar assets into its business and generate profit from their operations; (4) the risk that pending acquisitions may not close in the anticipated timeframe or at all due to a closing condition not being met (5) the risk of litigation and/or regulatory actions related to the proposed acquisition of solar assets; and (6) the possibility that Altus Power may be adversely affected by other economic, business, regulatory, credit risk and/or competitive factors. The presentation includes financial information not prepared in accordance with generally accepted accounting principles ("Non-GAAP Financial Measures"). A reconciliation of the Non-GAAP Financial Measures to financial information prepared in accordance with generally accepted accounting principles ("GAAP"), as required by Regulation G, appears in the presentation. The Company is providing disclosure of the reconciliation of reported Non- GAAP Financial Measures used in the presentation, among other places, to its comparable financial measures on a GAAP basis. The Company believes that the Non-GAAP Financial Measures provide investors additional ways to view our operations, when considered with both our GAAP results and the reconciliation to net income and net cash provided by operating activities, which we believe provide a more complete understanding of our business than could be obtained absent this disclosure. We believe the Non-GAAP Financial Measures also provide investors a useful tool to assess shareholder value. All rights to the trademarks, copyrights, logos and other intellectual property in this presentation belong to their respective owners and Altus Power's use thereof does not imply an affiliation with, or endorsement by the owners or such trademarks, copyrights, logos or other intellectual property. Altus Power's earnings call for the second quarter ended June 30, 2023, which was held on August 14, 2023, is intended to assist in understanding information Altus Power's management discussed in that call. This presentation should be viewed in conjunction with the June 30, 2023, earnings call, a reply of which is available on Altus Power's website at www.altuspower.com, under Investor. The information contained in the presentation is summary information that is intended to be considered in the context of the Company's SEC filings and other public announcements that the Company may make, by press release or otherwise, from time to time. The Company undertakes no duty or obligation to publicly update or revise the information contained in this report, although it may do so from time to time as its management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure. This presentation is not intended to be all-inclusive or to contain all the information that a person may desire in considering an investment in Altus Power and is not intended to form the basis of an investment decision in Altus Power. All subsequent written and oral forward-looking statements concerning Altus Power or other matters and attributable to Altus Power or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. 2#3Altus Power Generates and Delivers Clean Electric Power Buildings are at the center of Commercial Solar + Community Solar COMMUNITY SOLAR TH ALTUSPOWER RENEWABLE ENERGY 3#4Commercial Solar Combines Low-Cost Build with Retail Priced Clean Electric Power Superior Unit Economics vs Utility/Residential Cost of Power Retail Wholesale Utility Scale Ś Commercial Scale ALTUSPOWER RENEWABLE ENERGY UNIT ECONOMICS Cost to Build Residential Solar $$$ ALTUSPOWER RENEWABLE ENERGY +#5Altus Power is the Leader in a Rapidly Growing Market BOSE a Mercedes-Benz Altus Power is Now the Largest Owner of Commercial Solar in the U.S.¹ Altus Power Solar & Storage Assets : Shop Rite U.S. AIR FORCE ESPA Stop&Shop Spectrum LOTITO FOODS 698MWs Across 25 States² 1 Total Commercial Solar Ownership Rankings "US PV Leaderboard" by Wood Mackenzie as of June 8th, 2023 2 As of June 30, 2023 3 As of August 14, 2023, includes completed projects and projects in construction 75MWs New Development Expected in 20233 US. BJ's FOODS LA Los Angeles Department of DWP Water & Power a Hilton HOTELS & RESORTS UMassMemorial Health Care UMASS BOSTON 450+ Enterprise Customers 20,000+ Community Solar Customers MAYO CLINIC HEALTH SYSTEM Thermo Fisher SCIENTIFIC Pep Boys ALTUSPOWER RENEWABLE ENERGY AEROJET ROCKETDYNE Knipper Sika LO 5#6Serving a Rapidly Growing Demand: Delivering Power Without Carbon Emissions ● ● Building-Sited Solar is the most direct way to receive power without carbon for enterprises Community Solar is the easiest way for households to benefit from clean electric power The Total Addressable Market ("TAM") for commercial and community solar, measured in annual revenue potential, is significant: CBRE Blackstone ALTUSPOWER RENEWABLE ENERGY Product:Market Fit ✔ ¹Product of 205,000 MWs available on US Rooftops, Wood Mackenzie "Total Addressable Market" report (August 2020), 1.25 average production factor, 18c/kwh average all-in value of clean electric power 1 $46B ANNUAL REVENUE OPPORTUNITY 6#7Rapidly Growing Asset Base Supported by Substantial Pipeline In Contracting In Construction 369 MW Q2 '22 1 All data is as of June 30, 2023 CBRE Over 1 Gigawatt of Pipeline of Customer Engagements¹ Development Assets Operating Acquisitions Existing Customers Blackstone 215 MWs 115 MWs 378 MW Q3 '22 Channel Partners 470 MW Q4 '22 140 MWs 25 MWs 678 MW Q1 '23 In Closing In Negotiation 698 MW ALTUSPOWER Q2 '23 RENEWABLE ENERGY 7#8Track Record of Significant Growth Operating Revenues ($MM) $37 58% 2019 $45 2020 Contract-Rate Breakdown (% of MWs)² 21% 21% Fixed Fixed with Es calator Variable $72 2021 $101 2022 5% 15% Building Type (% of MWS)² 2% Industrial Government Office 4% 16% 3% $133 TTM Apartment Retail 55% Education Other $22 2019 146 2019 Adjusted EBITDA ($MM)¹ $26 2020 240 46% CAGR 2020 $41 2021 Portfolio Size (MW) 48% CAGR 362 $59 2021 2022 *Represents the midpoint of 2023 adjusted guidance range of $97-$103 million 1 Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. Please see Financial Statements in the Appendix for a reconciliation to the most directly comparable GAAP measures. 2 As of June 30, 2023 470 2022 $100 2023E* 698 1H23 ALTUSPOWER RENEWABLE ENERGY 8#9Cash Generation Reinvested Into Additional Growth ● ● ● Adjusted EBITDA ($MM)¹ Cash from Operations ($MM)² $22 $5 Focus on Cash Generation 2019 $26 Blackstone Expandable Funding Facility First Investment Grade Rated Commercial Solar Facility Long-Dated Maturity Fixed Rate + Non-Recourse to Company $12 2020 LONG-TERM FUNDING ● $41 ● $24 2021 $59 $35 2022 Tax Equity Funding Investment Tax Credit (ITC) widely available for 30% of new asset costs Expect additional funding from ITC adders $100 SHORT-TERM FINANCING ● 2023E Revolving Credit Facility Up to $200 MM available Available for general corporate purposes, including purchase of system components ● Target Funding of Development Asset BX Funding Facility *For development projects 1 Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. Please see Financial Statements in the Appendix for a reconciliation to the most directly comparable GAAP measures 2 "Net cash provided by operating activities" as shown in the company's "Consolidated Statement of Cash Flows" in SEC filings ALTUSPOWER RENEWABLE ENERGY Tax Equity* 60-70% of Asset Cost 30% of Asset Cost Cash 0-10% of Asset Cost No Common Equity Issuance Expected For 2023 Growth Plan#10Drivers of Long-Term Growth Increased Demand for Clean Power Electrification of Everything Direct & Measurable Carbon Emission Reduction Energy Independence & Resiliency ● ● ● ● ● Capital providers are demanding that real estate owners decarbonize their portfolios Metering power and calculating carbon emissions are core skills at Altus Power • Answer to "Greenwashing" claims = building-sited clean electric power generation ● Enterprises and Households use more power - but want to cut carbon emissions Building-sited solar power is the easiest way to produce clean power where it's used Customers willing to sign long-term agreements to buy clean power from Altus Power ● Enterprises increasingly desire to electrify buildings and vehicle fleets The electric power needs to be available on site: meaning on-site generation Household vehicles increasingly being powered by electricity instead of distillates Nationwide push to decrease dependence on foreign energy sources Resiliency from energy storage is viewed as increasing attractiveness of buildings Energy storage allows solar to power buildings morning and night ALTUSPOWER RENEWABLE ENERGY 10#11Using a Growing Digital Footprint to Drive Extension of Services Altus Power's UX meters and analyzes power, carbon footprint and carbon footprint reduction for Enterprises Altus Power enrolls, services and increases engagement with Community Solar Customers using our iOS/Android App ● o Tools: 1 M ALTUSPOWER 60 RENEWABLE ENERGY Dashboard Carbon Billing Documents Data Health Help And Support Users All Properties Other: Jane Doel Sign Out Welcome Back! Jane Doe Portfolio Performance } Total Generation mWh 32,124 § B2B Altus Power Stamford Office 2200 Atlantic Street Floor 6, Stamford, CT Last Updated: Today, Jul 27, 2022. ön Total Consumption. mWh 12,673 MacBook Pro Gross Carbon kg CO2e 43.2 1D 1 M 6 M 120 Rides Saved 75% Green Trends Saving The Planet 1Y Data Health Upload your utility bill to see insights about your carbon footprint and savings Add Details > of your power generated is solar energy Need Support? Contact your Altus 25% Than the last month. > 9:41 AA altuspower.com ALTUSPOWER RENEWABLE ENERGY Let's make your community green ZIP code 07033 Enter your ZIP code to see if Community Solar is in your area Utility provider all? Check availability B B2C 9:41 AA ALTUSPOWER RENEWABLE ENERGY Payment Setup Step 5 of 5 ← Previous Step altuspower.com Name on card Card number MM/YY Date of birth You will be automatically enrolled in our community solar program. Learn why Altus Power needs your payment information B ALTUSPOWER CVC RENEWABLE ENERGY all 8 Almost done! VISA 11#12Sustainability and Good Governance a Core Focus ● ALTUSPOWER ● RENEWABLE ENERGY MAKING POWER, MAKING PROGRESS 2022 Recognized by Third Party Agencies: Rated by MSCI, ISS and Sustainalytics Member of Clean Energy Exchange-Traded Funds (ETFs), including ICLN, QCLN and TAN Index 2022 SUSTAINABILITY REPORT 2023 ALTUS POWER, INC. Statistics above as of December 31, 2022 and as shown in 2022 Sustainability Report Overall Employee Gender 32% Female Overall Employee Diversity 23% Non-White 43% Female ALTUSPOWER Executive Management Composition RENEWABLE ENERGY 38% Female Board of Directors Composition 12#13Current Holders & Analyst Coverage Management Alignment with Altus Power Stakeholders¹ 46% Float 26% Management Direct Ownership 15% CBRE 1 Holdings as of 6/30/23 2 Based on most recent analyst notes as of 9/8/2023 13% Blackstone EVERCORE ISI Analyst Coverage citi J.P. Morgan Morgan Stanley BRILEY Financi al ALTUSPOWER RENEWABLE ENERGY Average AMPS Analyst Price Target² $10+ ROTH MKM UBS 13#14A ALTUSPOWER RENEWABLE ENERGY Appendix 14#15First-Half Financials ALTUSPOWER 1H 2023 Operating Revenues $75.9 Million 1H 2023 Net Income $7.2 Million 1H 2023 Adjusted EBITDA¹ $46.7 Million 1H 2023 Adjusted EBITDA Margin¹ 62 Percent 1H 2023 Cash Flow from Operating Activities $25.5 Million 1 Adjusted EBITDA is a non-GAAP financial measure Please see the Appendix for a reconciliation to the most directly comparable GAAP measure 15#16Non-GAAP Reconciliation ALTUSPOWER Adjusted EBITDA¹ Reconciliation of Net income to Adjusted EBITDA: Net income Income tax expense nterest expense, net Depreciation, amortization and accretion expense Stock-based compensation expense Acquisition and entity formation costs Loss (gain) on fair value remeasurement of contingent consideration Change in fair value of redeemable warrant liability Change in fair value of alignment shares liability Other expense (income), net Adjusted EBITDA Adjusted EBITDA Margin¹ Reconciliation of Adjusted EBITDA margin: Adjusted EBITDA Operating revenues, net Adjusted EBITDA margin $ Three Months Ended June 30, 2023 3,370 1,129 8,524 12,959 4,256 1,369 50 (2,805) 1,789 30,641 (in thousands) 2023 ¹ Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures 30,641 46,513 66 % $ Three Months Ended June 30, (in thousands) 2022 $ 21,574 707 5,173 6,863 2,657 52 (1,140) (4,659) (16,705) (608) 13,914 2022 13,914 24,762 56 % $ Six Months Ended June 30, 2023 7,215 2,017 20,970 24,335 7,128 2,860 100 (in thousands) (19,823) 1,879 46,681 2023 46,681 75,891 62% $ $ Six Months Ended June 30, (in thousands) 2022 $ 81,709 584 10,111 13,685 3,962 346 (971) (23,117) (63,051) (593) 22,665 2022 22,665 43,961 52 % 16#17Balance Sheet ALTUSPOWER Condensed Consolidated Balance Sheet (In thousands, except share and per share data) Assets Current assets: Cash and cash equivalents Current portion of restricted cash Accounts receivable, net Other current assets Total current assets Restricted cash, noncurrent portion Property, plant and equipment, net Intangible assets, net Operating lease assets Derivative assets Other assets Total assets Liabilities, redeemable noncontrolling interests, and stockholders' equity Current liabilities: Accounts payable Construction payable Interest payable Purchase price payable, current Due to related parties Current portion of long-term debt, net Operating lease liability, current Contract liability, current Other current liabilities Total current liabilities Alignment shares liability Long-term debt, net of unamortized debt issuance costs and current portion Intangible liabilities, net Purchase price payable, noncurrent Asset retirement obligations Operating lease liability, noncurrent Contract liability, noncurrent Deferred tax liabilities, net Other long-term liabilities Total liabilities Commitments and contingent liabilities Redeemable noncontrolling interests Stockholders' equity Common stock $0.0001 par value; 988,591,250 shares authorized as of June 30, 2023, and December 31, 2022; 158,989,953 and 158,904,401 shares issued and outstanding as of June 30, 2023, and December 31, 2022, respectively Additional paid-in capital Accumulated deficit Accumulated other comprehensive income Total stockholders' equity Noncontrolling interests Total equity Total liabilities, redeemable noncontrolling interests, and stockholders' equity $ es les $ es $ S $ $ As of June 30, 2023 69,114 3,700 27,041 6,451 106,306 11,321 1,405,497 47,429 151,653 5,134 8,047 1,735,387 5,664 14,972 7,473 22,400 153 32,071 3,568 3,807 7,322 97,430 46,311 878,465 14,631 13,931 157,876 6,518 13,581 3,526 1,232,269 20,667 16 478,458 (33,477) 3,008 448,005 34,446 482,451 1,735,387 $ Ś $ $ $ les Testes $ As of December 31, 2022 $ 193,016 2,404 13,443 6,206 215,069 3,978 1,005,147 47,627 94,463 3,953 6,651 1,376,888 2,740 9,038 4,436 12,077 112 29,959 3,339 2,590 3,937 68,228 66,145 634,603 12,411 6,940 9,575 94,819 5,397 11,011 4,700 913,829 18,133 16 470,004 (45,919) 424,101 20,825 444,926 1,376,888 17#18Statement of Operations ALTUSPOWER Condensed Consolidated Income Statement (In thousands, except share and per share data) Operating revenues, net Operating expenses Cost of operations (exclusive of depreciation and amortization shown separately below) General and administrative Depreciation, amortization and accretion expense Acquisition and entity formation costs Loss (gain) on fair value remeasurement of contingent consideration Stock-based compensation Total operating expenses Operating income Other (income) expense Change in fair value of redeemable warrant liability Change in fair value of alignment shares liability Other expense (income), net Interest expense, net Total other expense (income) Income before income tax expense Income tax expense Net income Net loss attributable to noncontrolling interests and redeemable noncontrolling interests Net income attributable to Altus Power, Inc. Net income per share attributable to common stockholders Basic Diluted $ $ $ $ $ $ $ $ Weighted average shares used to compute net income per share attributable to common stockholders Basic Diluted Three Months Ended June 30, 2023 46,513 7,581 8,291 12,959 1,369 50 4,256 34,506 12,007 (2,805) 1,789 8,524 7,508 $ 4,499 $ (1,129) 3,370 (3,455) 6,825 $ 158,719,684 158,978,275 $ $ 0.04 Ś 0.04 $ 2022 24,762 4,290 6,558 6,863 52 (1,140) 2,657 19,280 5,482 0.16 0.16 Ś (4,659) (16,705) (608) 5,173 (16,799) $ 22,281 $ (707) 21,574 $ (2,541) 24,115 153,310,068 153,954,843 $ $ $ Six Months Ended June 30, 2023 75,891 13,557 15,653 24,335 2,860 100 7,128 63,633 12,258 (19,823) 1,879 20,970 3,026 9,232 (2,017) 7,215 (5,227) 12,442 0.08 0.08 158,670,950 160,747,045 $ Ś $ $ $ $ $ $ 2022 43,961 8,354 12,942 13,685 346 (971) 3,962 38,318 5,643 (23,117) (63,051) (593) 10,111 (76,650) 82,293 (584) 81,709 (2,825) 84,534 0.55 0.55 152,988,078 153,771,992 18#19Non-GAAP Definitions ALTUSPOWER RENEWABLE ENERGY Adjusted EBITDA is a non-GAAP financial measure and is defined as net income (loss) plus net interest expense, depreciation, amortization and accretion expense, income tax expense, acquisition and entity formation costs, stock-based compensation expense, and excluding the effect of certain non-recurring items we do not consider to be indicative of our ongoing operating performance such as, but not limited to, gain on fair value remeasurement of contingent consideration, gain on disposal of property, plant and equipment, change in fair value of redeemable warrant liability, change in fair value of alignment shares, loss on extinguishment of debt, and other miscellaneous items of other income and expenses. Adjusted EBITDA margin is a non-GAAP financial measure and is defined as Adjusted EBITDA divided by operating revenues. Adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures that we use to measure out performance. We believe that investors and analysts also use adjusted EBITDA in evaluating our operating performance. This measurement is not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. The GAAP measure most directly comparable to adjusted EBITDA is net income and to adjusted EBITDA margin is net income over operating revenues. The presentation of adjusted EBITDA and adjusted EBITDA margin should not be construed to suggest that our future results will be unaffected by non-cash or non-recurring items. In addition, our calculation of adjusted EBITDA and adjusted EBITDA margin are not necessarily comparable to adjusted EBITDA as calculated by other companies and investors and analysts should read carefully the components of our calculations of these non-GAAP financial measures. We believe adjusted EBITDA is useful to management, investors and analysts in providing a measure of core financial performance adjusted to allow for comparisons of results of operations across reporting periods on a consistent basis. These adjustments are intended to exclude items that are not indicative of the ongoing operating performance of the business. Adjusted EBITDA is also used by our management for internal planning purposes, including our consolidated operating budget, and by our board of directors in setting performance-based compensation targets. Adjusted EBITDA should not be considered an alternative to but viewed in conjunction with GAAP results, as we believe it provides a more complete understanding of ongoing business performance and trends than GAAP measures alone. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Altus Power does not provide GAAP financial measures on a forward-looking basis because the Company is unable to predict with reasonable certainty and without unreasonable effort, items such as acquisition and entity formation costs, gain on fair value remeasurement of contingent consideration, change in fair value of redeemable warrant liability, change in fair value of alignment shares. These items are uncertain, depend on various factors, and could be material to Altus Power's results computed in accordance with GAAP. 19#20Adjusted EBITDA Definitions ALTUSPOWER RENEWABLE ENERGY Adjusted EBITDA and Adjusted EBITDA Margin We define adjusted EBITDA as net income plus net interest expense, depreciation, amortization and accretion expense, income tax expense, acquisition and entity formation costs, stock-based compensation expense, and excluding the effect of certain non-recurring items we do not consider to be indicative of our ongoing operating performance such as, but not limited to, gain or loss on fair value remeasurement of contingent consideration, change in fair value of redeemable warrant liability, change in fair value of Alignment Shares liability, loss on extinguishment of debt, and other miscellaneous items of other income and expenses. See "Components of Results of Operations" below for a description of each of these items. Interest Expense, Net. Interest expense, net represents interest on our borrowings under our various debt facilities, amortization of debt discounts and deferred financing costs, and unrealized gains and losses on interest rate swaps. Depreciation, Amortization and Accretion Expense. Depreciation expense represents depreciation on solar energy systems that have been placed in service. Depreciation expense is computed using the straight-line composite method over the estimated useful lives of assets. Leasehold improvements are depreciated over the shorter of the estimated useful lives or the remaining term of the lease. Amortization includes third party costs necessary to enter into site lease agreements, third party costs necessary to acquire PPA and NMCA customers and favorable and unfavorable rate revenues contracts. Third party costs necessary to enter into site lease agreements are amortized using the straight-line method ratably over 15-30 years based upon the term of the individual site leases. Third party costs necessary to acquire PPAS and NMCA customers are amortized using the straight-line method ratably over 15-25 years based upon the term of the customer contract. Estimated fair value allocated to the favorable and unfavorable rate PPAS and REC agreements are amortized using the straight-line method over the remaining non-cancelable terms of the respective agreements. Accretion expense includes over time increase of asset retirement obligations associated with solar energy facilities. Income Tax (Expense) Benefit. We account for income taxes under ASC 740, Income Taxes. As such, we determine deferred tax assets and liabilities based on temporary differences resulting from the different treatment of items for tax and financial reporting purposes. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. Additionally, we must assess the likelihood that deferred tax assets will be recovered as deductions from future taxable income. We have a partial valuation allowance on our deferred state tax assets because we believe it is more likely than not that a portion of our deferred state tax assets will not be realized. We evaluate the recoverability of our deferred tax assets on a quarterly basis. Acquisition and Entity Formation Costs. Acquisition and entity formation costs represent costs incurred to acquire businesses and form new legal entities. Such costs primarily consist of professional fees for banking, legal, accounting and appraisal services. Stock-Based Compensation Expense. Stock-based compensation expense is recognized for awards granted under the Legacy Incentive Plans and Omnibus Incentive Plan, as defined in 2022 Annual Report on Form 10K, Note 20, "Stock-Based Compensation," to our consolidated financial statements included elsewhere in this Report. Fair Value Remeasurement of Contingent Consideration. In connection with the Solar Acquisition (as defined in 2022 Annual Report on Form 10K, Note 11, "Fair Value Measurements," to our consolidated financial statements included elsewhere in this Report), contingent consideration of up to an aggregate of $3.1 million may be payable upon achieving certain market power rates by the acquired solar energy facilities. The Company estimated the fair value of the contingent consideration for future earnout payments using a Monte Carlo simulation model. Significant assumptions used in the measurement include market power rates during the 36-month period, and the risk-adjusted discount rate associated with the business. Change in Fair Value of Redeemable Warrant Liability. In connection with the Merger, the Company assumed a redeemable warrant liability composed of publicly listed warrants (the "Redeemable Warrants") and warrants issued to CBRE Acquisition Sponsor, LLC in the private placement (the "Private Placement Warrants"). Redeemable Warrant Liability was remeasured through the Redemption Date, and the resulting loss was included in the consolidated statements of operations. Change in Fair Value of Alignment Shares. Alignment Shares represent Class B common stock of the Company which were issued in connection with the Merger. Class B common stock, par value $0.0001 per share ("Alignment Shares") are accounted for as liability-classified derivatives, which were remeasured as of December 31, 2022, and the resulting gain was included in the consolidated statements of operations. The Company estimates the fair value of outstanding Alignment Shares using a Monte Carlo simulation valuation model utilizing a distribution of potential outcomes based on a set of underlying assumptions such as stock price, volatility, and risk-free interest rates. Other (Income) Expense, Net. Other income and expenses primarily represent interest income, state grants, and other miscellaneous items. 20#21A W: P: ALTUSPOWER RENEWABLE ENERGY contact info altuspower.com (203) 698-0090