Spruce Power Holding Corporation (NYSE:SPRU) Q3 2023 Earnings Conference Call November 9, 2023 4:30 PM ET Company Participants Bronson Fleig - Head, IR Christian Fong - CEO Sarah Wells - CFO Conference Call Participants Tristan Richardson - Scotiabank Joseph Osha - Guggenheim Mo Chen - Truist Securities Operator Thank you for standing by. My name is Eric and I will be your conference operator today. At this time, I would like to welcome everyone to the Spruce Power Third Quarter 2023 Earnings Conference Cal ...

Financial Data and Key Metrics Changes - Second quarter revenue was $22.8 million, up from $18.1 million in the first quarter of 2023, driven by increased operational hours and improved performance ratios [42] - Net income from continuing operations was $1.8 million compared to a $15 million loss in the first quarter of 2023 [43] - Adjusted EBITDA totaled $9.5 million, with total cash flow from the Spruce Power 4 portfolio bringing it to $13.8 million, compared to $5.7 million in the first quarter [43] Business Line Data and Key Metrics Changes - The Spruce Power 4 portfolio acquisition increased rooftop solar assets and contracts by approximately 44% [15] - The company achieved a weather-adjusted performance ratio of 103%, indicating strong asset management performance [36] - Portfolio O&M expense increased to $3 million in the second quarter from $1.9 million in the first quarter, attributed to meter upgrade activities [20] Market Data and Key Metrics Changes - The company is experiencing increased demand for home battery storage, particularly in California, due to new net metering rules [16] - The Environmental Commodities Markets group reported a quarter-on-quarter growth of close to 10% [38] Company Strategy and Development Direction - The company aims to reach a customer contract portfolio of 90,000 by the end of 2024, with a focus on acquiring existing power portfolios rather than high-cost sales strategies [34][16] - A reverse stock split plan was authorized to address the issue of a high number of shares outstanding, which is affecting stock price perception [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to close the acquisition of approximately 2,400 home solar systems, which would bring the total to around 75,000 [7] - The company is optimistic about the debt markets, noting an abundance of debt offered at attractive terms [7] Other Important Information - As of June 30, 2023, the company had cash and cash equivalents of approximately $192 million, down from $205 million at the end of the first quarter [21] - The company repurchased approximately 3.6 million shares for about $3.2 million as part of its share repurchase program [45] Q&A Session Summary Question: Can you provide insights on extracting additional value from existing systems? - Management highlighted two mechanisms: increasing revenues through environmental commodities markets and upselling additional products like home batteries to existing customers [25] Question: What is the competitive landscape for reaching the 90,000 customer target? - Management indicated confidence in achieving the target, citing ongoing bilateral negotiations and a strong pipeline of potential deals [26] Question: What are the core drivers behind the positive earnings this past quarter? - Strong production from assets and improved performance ratios were noted as key drivers, alongside the resolution of integration costs from the merger [51] Question: How does the company balance acquisition opportunities with share repurchase? - Management stated that the share repurchase program is part of their strategy to drive shareholder value, and they see it as complementary to acquisition efforts [52][55]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q ___________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023 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 001-38971 Spruce Power Holding Corporation (Exact name of Registrant as specified ...

PART I – FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The unaudited condensed consolidated financial statements for Q1 2023 reflect the company's transition to residential solar, showing increased assets, a net loss, and significant cash used in investing activities [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets increased to **$926.4 million** driven by the SEMTH acquisition, while total liabilities rose to **$661.0 million** due to increased long-term debt Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $172,797 | $220,321 | | Investment under SEMTH master lease agreement | $146,889 | $— | | Property and equipment, net | $482,328 | $396,168 | | Goodwill | $28,757 | $128,548 | | **Total Assets** | **$926,393** | **$826,552** | | **Liabilities & Equity** | | | | Total current liabilities | $52,078 | $59,697 | | Long-term debt, net of current portion | $594,395 | $474,441 | | **Total Liabilities** | **$661,006** | **$537,576** | | **Total Stockholders' Equity** | **$265,209** | **$288,891** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2023, the company reported **$18.1 million** in residential solar revenues, resulting in a **$19.4 million** net loss attributable to stockholders, including a **$3.9 million** loss from discontinued operations Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Revenues | $18,095 | $— | | Cost of revenues | $7,853 | $— | | Loss from operations | ($5,475) | ($7,734) | | Net loss from continuing operations | ($14,978) | ($134) | | Net loss from discontinued operations | ($3,866) | ($15,943) | | **Net loss attributable to stockholders** | **($19,395)** | **($16,077)** | | **Net loss per share, basic & diluted** | **($0.13)** | **($0.11)** | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2023, net cash used in continuing operating activities was **$3.7 million**, with **$20.4 million** used in investing activities primarily for the SEMTH acquisition, leading to a **$34.2 million** decrease in total cash Consolidated Statements of Cash Flows Summary (in thousands) | Cash Flow Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash used in continuing operating activities | ($3,678) | ($10,476) | | Net cash used in continuing investing activities | ($20,377) | $— | | Net cash (used in) provided by continuing financing activities | ($5,916) | $248 | | **Net change in cash, cash equivalents, and restricted cash** | **($34,219)** | **($18,215)** | - Cash paid to acquire SEMTH assets, net of cash acquired, was **$23.1 million**[23](index=23&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's transformation to a distributed solar energy owner, including the SEMTH acquisition, discontinued operations, **$620.1 million** in debt, legal proceedings, and a **$50 million** stock repurchase program - The company is now a leading owner and operator of distributed solar energy assets, serving approximately **72,000 customers**; its former Drivetrain and XL Grid segments are presented as discontinued operations[26](index=26&type=chunk)[37](index=37&type=chunk) - On March 23, 2023, the company acquired SEMTH for approximately **$23 million** in cash and assumed **$125 million** of senior debt, adding a master lease covering about **22,500 residential solar agreements**[116](index=116&type=chunk)[117](index=117&type=chunk) - The company is involved in several legal proceedings, including putative securities class actions and an SEC subpoena related to its 2020 merger and business practices[150](index=150&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) - Subsequent to the quarter end, the Board of Directors authorized a share repurchase program for up to **$50 million** of common stock, effective through May 15, 2025[166](index=166&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the strategic shift to distributed solar assets, highlighting **$18.1 million** in Q1 2023 residential solar revenue, increased SG&A, and **$182.7 million** in working capital, with sufficient liquidity for the next 12 months - The company's corporate strategy focuses on leveraging its platform for subscription-based distributed energy solutions, profitably growing assets through low customer acquisition cost channels, and increasing shareholder value via predictable revenues and cash flow[172](index=172&type=chunk) - In January 2023, the company completed the exit from its legacy XL Fleet (Drivetrain and XL Grid) operations, and in March 2023, it acquired SEMTH, adding approximately **22,500 solar contracts**[176](index=176&type=chunk)[177](index=177&type=chunk) Results of Operations Comparison (in thousands) | Metric | Q1 2023 | Q1 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $18,095 | $— | $18,095 | N.M. | | Selling, general and administrative expenses | $15,717 | $7,734 | $7,983 | 103% | | Loss from operations | ($5,475) | ($7,734) | $2,259 | (29)% | | Net loss attributable to stockholders | ($19,395) | ($16,077) | ($3,318) | 21% | - As of March 31, 2023, the company had **$620.1 million** of long-term debt and was in compliance with all debt covenants, with management believing current liquidity is sufficient for the next 12 months[191](index=191&type=chunk)[192](index=192&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Spruce Power is exempt from providing quantitative and qualitative disclosures about market risk[203](index=203&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of March 31, 2023, due to three material weaknesses in IT general controls, manual journal entry review, and complex transaction accounting, with remediation ongoing - Management concluded that disclosure controls and procedures were not effective as of March 31, 2023[205](index=205&type=chunk) - Material weaknesses were identified in three areas: Information Technology General Controls (ITGC) related to user access and segregation of duties, ineffective controls over review and approval of manual journal entries, and lack of sufficient resources to account for complex transactions[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk) - A remediation plan is in progress, focusing on integrating Legacy Spruce Power's controls and addressing identified deficiencies, but the material weaknesses will not be considered remediated until new controls are implemented and tested over a sufficient period[211](index=211&type=chunk)[212](index=212&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) Material pending legal proceedings are incorporated by reference from Note 15 of the unaudited condensed consolidated financial statements - Details on material pending legal proceedings are incorporated by reference from Note 15, which includes information on securities class action lawsuits and an SEC subpoena[219](index=219&type=chunk)[149](index=149&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors from the 2022 Form 10-K, except for a new risk concerning adverse developments in the financial services industry that could impact liquidity and access to capital - No material changes from the risk factors in the 2022 Form 10-K, except for one new addition[220](index=220&type=chunk) - A new risk factor was added concerning adverse developments in the financial services industry, such as liquidity issues or bank failures, which could impact the company's access to its cash and ability to fund growth[221](index=221&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[222](index=222&type=chunk) [Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[222](index=222&type=chunk) [Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[222](index=222&type=chunk) [Other Information](index=48&type=section&id=Item%205.%20Other%20Information) This item is not applicable - Not applicable[223](index=223&type=chunk) [Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act of 2002[224](index=224&type=chunk) - Inline XBRL data files are included as exhibits 101 and 104[224](index=224&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ___________________________ (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ¨ 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 001-38971 ___________________________ Spruce Power Holding Corporation (Exact name of Regis ...

Spruce Power Holding Corporation (NYSE:SPRU) Q4 2022 Earnings Conference Call March 23, 2023 4:30 PM ET Company Participants Bronson Fleig – Head-Investor Relations Christian Fong – Chief Executive Officer Donald Klein – Chief Financial Officer Conference Call Participants Joseph Osha – Guggenheim Jordan Levy – Truist Operator Good afternoon. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Spruce Power Fourth Quarter 2022 Earnings Conferen ...

XL Fleet Corp. (XL) Q3 2022 Earnings Conference Call November 9, 2022 5:00 PM ET Company Participants Stacey Constas - General Counsel Eric Tech - Chief Executive Officer Christian Fong - President XL Fleet and CEO of Spruce Power Don Klein - Chief Financial Officer Conference Call Participants Joseph Osha - Guggenheim Securities Operator Good afternoon, and welcome to the XL Fleet Third Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q ___________________________________ 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 001-38971 XL Fleet Corp. (Exact name of Registrant as specified in its Charter) | Delaware | 83-4109918 | | --- | --- | | (State or other jurisdiction of | (I.R.S. Employer | | incorporation or organization) | Identification Number ...

XL Fleet Corp. (XL) Q2 2022 Earnings Conference Call August 9, 2022 5:00 PM ET Company Participants Stacey Constas – General Counsel Eric Tech – Chief Executive Officer Donald Klein – Chief Financial Officer Mike Kenhard – Chief Technology Officer and General Manager-Power Drive Colleen Calhoun – Vice President and General Manager-XL Grid Conference Call Participants Operator Good day, and welcome to the XL Fleet Second Quarter 2022 Earnings Call. All participants will be in a listen-only mode. [Operator In ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q ___________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022 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 001-38971 XL Fleet Corp. (Exact name of Registrant as specified in its Charter) | ...