Good day ladies and gentlemen, and welcome to the Second Quarter 2012 Ameresco Incorporated Earnings Call. My name is Jody and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session (Operator Instructions) I would now like to turn the conference over to your host for today, Ms. Suzanne Messere, Director of Investor Relations. Ms. Messere, please proceed.

Thank you, Jody, and good morning everyone. Thank you for joining us today for Ameresco’s Second Quarter 2012 Earnings Conference call. I am joined this morning by George Sakellaris, Ameresco’s Chairman, President and Chief Executive Officer, and Andrew Spence, the company’s Chief Financial Officer. On today’s call, management will share brief highlights from the prepared remarks we published this morning, and then take questions from the audience. Before I turn the call over to George and Andrew, I would like to make a brief statement regarding forward-looking remark. Today’s call contains forward-looking information regarding future events and the future financial performance of the company. Ameresco cautions you that such statements are just predictions, and actual results may differ materially as a result of risks and uncertainties that pertain to our business. Ameresco refers you to the company’s press release issued this morning and its annual report on Form 10-K, filed with the SEC on March 15, 2012, which discusses important factors that could cause actual results to differ materially from those contained in the company’s projections or forward-looking statements. Ameresco assumes no obligation to revise any forward-looking statements made on today’s call. In addition, the company will be referring to non-GAAP financial measures during this call. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. A GAAP to non-GAAP reconciliation as well as an explanation behind the use of non-GAAP financial measures is available in our press release as well as our prepared remarks. I will now turn the call over to George Sakellaris, Ameresco’s President and CEO. George?

Thank you, Suzanne and good morning everyone. Ameresco delivered second quarter financial results in line with expectations. During the quarter, we continued to execute well on projects in construction and revenue from all other offerings increased by 56%. The investments we made to further strengthen our market position and service offerings during 2011, continued to contribute to pipeline activity. Awarded projects increased 40% to its highest level since year-end 2009, and total construction backlog of $1.3 billion reached record levels, a level not seen since the first quarter of 2009. However, we are disappointed by the pace of converting awarded projects to signed contracts in the Canadian and the U.S. federal segments as well as the northeast and southeast regions, which is causing us to revise our revenue and net income guidance for 2012. As a consequence of the above, $95 million to $105 million of revenue that was previously expected to be recognized in the second half of 2012 is now expected to be recognized in 2013. I will provide more detail about what’s being deferred to 2013, when we discuss our outlook for 2012. The encouraging trends though within the total construction backlog and awarded projects as well as strengthen in our other offerings leads us to believe that once all of our segments and regions start converting backlog at the normal rates, Ameresco will be well positioned for sustainable future growth. And now, I do like to turn the call over to Andrew our Chief financial Officer, who can provide more details about our financial results. Andrew?

Thank you very much, George and good morning everyone. The financial highlights from the quarter are as follows, second quarter and year-end revenue was down less than 1%, as expected, primarily reflecting the lag effect of a market disruption in performance contracting last year that resulted in a lengthening of the average conversion times from awarded projects to signed contracts. Revenue from energy efficiency decreased 3% for the quarter and increased 1% year-to-date. Further declines in our Canadian segment during the second quarter and a decline in our U.S. federal segment offset increases from the Central U.S. region, organic and inorganic increases in the other U.S. regions and incremental revenue from AEG and AIS. Revenue from renewable energy increased in the second quarter and decreased 5% year-to-date. Strong contributions in the second quarter came from renewable energy projects being developed for customers, O&M and integrated-PV, which was partially offset by a decline in installation activity driven primarily by the completion of the Savannah River project during the fourth quarter of 2011. Gross margin during the second quarter of 2012 was 19%, compared to 19.4% in 2011. Year-to-date gross margin increased to 19.4%, compared to 19.3% last year. Energy efficiency gross margin for the quarter improved from 17.4% to 18.3% in 2012. The margin improvement was driven by new higher margin projects across a number of U.S. regions, project closeouts and contributions from our higher gross margin offerings, at AEG and AIS. Energy efficiency gross margin year-to-date was 19.6%, compared to 18%. Renewable energy gross margin for the quarter decreased from 25.5% in 2011 to 20.8% in 2012. However, we have seen a sequential improvement in renewable energy gross margin from 16.5% in the first quarter of this year when we experienced downward margin pressure as we were still transitioning to…

Thank you, Andrew. Revenue from our other offerings, such as, small scale infrastructure, integrated-PV and O&M increased by 56% year-over-year to $45 million. Revenue from small scale infrastructure increased more than 9% in the second quarter of 2012. We expect to see continued improvement through the second half of the year as two more renewable plants go into operation. Revenue from integrated-PV increased by more than 12% in the second quarter of 2012 as demand for off-grid solutions in remote locations continued to grow. We continue to expect integrated-PV to grow more than 20% in 2012. Revenue from our O&M offerings increased more than 140% in the second quarter of 2012. The increase is related to federal O&M revenue, mainly Savannah River, and incremental revenue attributable to acquisitions made during the second half of 2011. Our pipeline increased by 3% year-over-year to $2.5 billion. Our total construction backlog as of June 30, 2012 increased 12.5% year-over-year to $1.3 billion, driven by a 40% increase in awarded projects. The book-to-bill ratio in the second quarter of 2012 was 1.14% and 1.36% year-to-date. While we are happy with the continued improvement in backlog conversion rates in many regions, awarded projects are converting to signed contracts at a slower pace, in Canada and U.S. federal segments as well as the northeast and southeast regions. This will account for approximately $95 million to $105 million of revenue that was previously expected to be recognized in the second half of 2012 and now will be deferred to 2013. More specifically, Canada is experiencing continued delays with governmental sponsored programs that are still unexpectedly on hold following last year’s federal elections. We believe that these programs will begin to see movement towards the latter half of 2012. These delays account for approximately $40 million in revenue…

(Operator Instructions) And our first question comes from the line of John Quealy from Canaccord Genuity. Please proceed. John Quealy – Canaccord Genuity: Hi. Good morning. My first question, George you mentioned the potential creation of new financing mechanisms for customers. First, can you talk about the financing environment, is it still fairly active and are the traditional players still fairly active in securitizing?

Yes. The financing on the standard, what we call for the mass market or the federal contracts is very, very good and as a matter of fact some of the older projects with higher rates have been refinanced with lower rates, so that market is very good. What just happened on some of the projects, especially for the housing project is the fact that we have to go through couple additional hoops in order to complete the financing, but the financing is very available. As far as the commercial and industrial, we are working on a pilot program basis and we are seeing some pretty good traction in the market, especially since we acquired last year what we call the Ameresco Intelligent Solutions, the exchange point and we’ve seen quite a few customers that they would like to implement energy efficiency projects but they need some kind of financing and there are two, three entities out there that we are working with and that they have said they will provide the financing. So, I will call it right now we’re getting some traction, it’s a pilot basis effort, but on the other hand though and in light of some of the what I will – we call it I guess market disruption, is that the need for us to explore that market opportunity which is so large and right now it’s in the untapped market. John Quealy – Canaccord Genuity: And then my second question on the contracted business, I imagine that business is going to – the reported number is going to go down again in Q3, can you talk about what we should expect the next Q3, Q4 for contracted business?

The contracted number, otherwise the number of contracts executed from the total backlog, by the end of the year it should go up. Now, whether it happens in the third quarter or the fourth quarter, it’s very difficult to say, but we expect that by the end of the year to go up. John Quealy – Canaccord Genuity: And my last question, George. So, on the federal government side, we’ve got the national election, we’ve got the concept of Sequestration coming in the beginning of the year. What’s the likelihood that some of these task orders just get delayed into 2013 some more, what are you thinking about the U.S. federal government business? Thank you.

Yes. We’ve seen a substantial amount of a pickup on the RFPs, request for proposals and we have responded to them and we are doing very good in the awarding. But, what we are finding out though is that the federal market, the RFPs come in from what we call the civilian sector such as the GSA et cetera and these new individuals involved with the federal government program, they don’t have – they haven’t done it before and it’s a sales performance contract, so it tends to take a little bit longer time. But over the long term though, because of the activity level the federal market is going to be a very good market, but I would say that we will see most of that impact 2013. And also on the – and most likely the people that run that particular group, they’re forecasting an up year for 2013. The political scene, maybe as what we’ve said in the past, the economic environment, it doesn’t impact our business as much or the politics doesn’t but, in reality though it does. But what is happening, people are waiting to see what’s going to happen, so in some way, they don’t like to act until they see what the ultimate result is on the political side, or even on the economic side and I think some of this reluctance that we see on some of our clients in the mass market on sign to the bottom line is due to the fact that there is some uncertainty in the economic environment out there. John Quealy – Canaccord Genuity: Thank you.

Our next question comes from Amir Rozwadowski from Barclays. Please proceed. Amir Rozwadowski – Barclays: Thank you very much and good morning, folks.

Good morning, Amir. Amir Rozwadowski – Barclays: George, you know in terms of the revenue recognition push out, what risk is there that ultimately some of these awards end up dissolving or not working in your favor. I’m just trying to understand sort of the potential risk towards the push out being not necessarily as large as you anticipated or anything along those lines?

The revenues that we have identified the projects to – that we are – they are moving to 2013. Our actual contracts that we’re working and we were in the final stages of negotiating with the customer to execute them. And we were contemplating that by now all of those contracts will have been executed and that – and the biggest months for construction for us are the summer months. And once June came and passed and they weren’t executed that’s when we became very concerned with it. So, this particular – those $95 million to $105 million of contracts that we have identified, they’re in the final stages of execution and I would say that pretty much all of that will be deferred to next year. Amir Rozwadowski – Barclays: Okay. And then, if I may, it also sounds like based on your answer to the prior question that you do expect your contracted revenue to grow at some point in the back half of this year. If we think about the -

Contracted backlog. Amir Rozwadowski – Barclays: Backlog, pardon me, pardon me. If we think about sort of the combination of this revenue push out into 2013 and your contracted backlog returning to growth at some point this year. Could 2013 be a year in which you expect to see accelerating revenue growth versus 2012?

I went through this, that’s why I said we’ve been through these market disruptions before. I’ll just give you a little bit history, 2011, after 9/11, we had tremendous, tremendous – nobody would sign anything for about a year and then 2002, we had a great year. Then we had the economy went south, see I went back and studied these stuff. 2003, we had interruption, 2004 was a great year and then it kept in 2005 and it kept in 2008 and 2009 and then we had a great year 2010. So it will not be reasonable to assume that next year would be a very good year. Amir Rozwadowski – Barclays: That’s very helpful. And then lastly if I may, we’ve seen I guess over the last couple of quarters for you folks, your O&M revenue contribution steadily increasing. I was wondering if you could, I mean I may have missed that sort of what the contribution was there and then when should we start to see sort of the benefit to your margin profile based on what I assume is a higher margin business start to filter through there? Thanks.

The biggest – the biggest contributor for the second quarter on the O&M revenue increase was the fact that Savannah River kicked in the operation maintenance and if you recall that’s between $15 million to $18 million per year total. And then a couple of other federal contracts there, they came in actually this quarter they will be showing up this quarter. And I think the overall the weight of the margin we saw it picking up, the energy – the renewable, actually O&M in the second quarter and it will continue to improve and it will impact the overall margin of the business total by the end of the year, but we will have better impact next year on it. Amir Rozwadowski – Barclays: Great.

And the other thing that we are doing that’s why this business are growing from a strategic point of view, we’re focusing a lot in order to grow the operation, what we call, annuity-based revenues and the operation maintenance is an annuity-based revenues and we just have specific strategies to try to grow that portion of our business at a pretty good rate. Amir Rozwadowski – Barclays: Great. Thanks for the incremental color, George.

Thank you. Welcome.

Our next question come from Dale Pfau from Cantor Fitzgerald, please proceed. Dale Pfau – Cantor Fitzgerald: Yes. Good morning gentlemen.

Good morning, Dale. Dale Pfau – Cantor Fitzgerald: And Suzanne too. I want to talk a little bit about your integrated-PV that also looks to be growing fairly nicely. Can you talk about what you expect in terms of your margins on that, will they continue to hold? And then the next question is, could you give us an indication of how much of the integrated-PV projects you’re continuing to hold and operate and how many of those you’re selling and is there a considerable difference?

That is two questions, the integrated-PV, we call it, it’s all for others. Otherwise most, if you recall, what we are doing there, we take in panels, inverters, batteries and we design in our shop a small scale power plant you might call it, which might be 5 watts to 5 KW or 200 KW and we design it for a remote installation primarily, let’s say it might be a military base, it might be an oil platform a Kashmir installation. So we do not hold anything that the integrated PV group is doing or they might be installing them in some groups, in some commercial industrial customer, again it’s for third parties. And on the other side, if what we call its own grid that the renewable assets that we own, it’s a very small amount of the PV plant that we have designed and operate and maintain, it’s about less 5 megawatts I would say right now, but primarily that business building for others. And on the margin side, we said 20% last year we saw it and the year before and this year actually is trading higher than the 20%. So, so far it’s been holding out pretty good. And as I mentioned in my remarks, we envision it to continue to grow to over 20% and maintain that margin. Dale Pfau – Cantor Fitzgerald: And then another question on the financing for your commercial and industrial, you mentioned that you felt this was kind of some pent-up demand if they can get financing. What’s holding up that and why is it just a pilot program at this point, could you maybe go into that...?

Well, the banks are reluctant to finance some of the commercial industries over the long term and what can you use for a security and what’s been test piloted in the marketplace, some kind of third party finance in which is a mixture of debt and equity. And I’d rather not get into too many specifics on this to – what we are planning there for competitive reasons. Dale Pfau – Cantor Fitzgerald: Okay. Great. Thank you very much, George.

Our next question comes from the line of Craig Irwin from Wedbush Securities. Please proceed. Craig Irwin – Wedbush Securities: Good morning, everybody. Thank you for taking my question.

Good morning. Craig Irwin – Wedbush Securities: One thing I wanted to inquire about was the organic growth rate in the different pieces of the business. In the past you’ve shared the numbers with us, obviously we can take last quarter’s number and put the sequential growth rate on that and come to $20 million, but can you give us an approximate contribution in the quarter, energy efficiency and renewable energy sides of the business and help us understand what it’s going to take to see organic growth come back to the business?

I’ll take the first part. There was overall about $19 million in quarter two that came about from our acquired companies last year, $4 million of that was in renewable energy, $15 million was in the energy efficiency product line and you want to address the organic?

If you look at our history, even this year, if we ended up, which is very much we’re forecasting a flat year and you take the last three year growth from where we were in the 2009, it’s about 425 to 430. You look at the compound rate for three years, let’s say, at the end of this year, it’s about 18% and or actually over 18%. So, the market as long as it continues to expand and it does not have any interruptions, and I think over the longer period of time like five years horizon, we feel pretty comfortable it will be in the range between 15% to 20%. The market size is there, the demand is there. There is nothing wrong with the fundamentals of our business. It just makes us – we have to work a little bit harder and broaden a little bit our mix of business that we have. Craig Irwin – Wedbush Securities: So, just to follow up on that. So, Savannah River obviously is transitioning from the construction phase to the O&M phase and I think the year ago quarter, you shared a number with us that was in the range of roughly $16 million. So obviously somewhere around half of your organic decline is coming from the transition of Savannah River from construction to the more attractive O&M mix going forward. But the remaining piece of the contraction, the other roughly half of the organic contraction sort of dovetails approximately with the overall year-over-year decline on the construction backlog. Would you expect some of the other growth in your high margin services to really start kicking in and helping that grow faster than the construction backlog right now? Or will the overall growth rate of the company continue to track more or less in line with the growth on the construction backlog?

As all others get to be a bigger and bigger part of our mix and that’s why we have – we developed the strategy last year, great focus in growing that part of the business. It was not only – it gives us pretty good growth opportunity, but very good margin as well. And as that becomes larger and larger, it will have bigger impact than the construction backlog. Craig Irwin – Wedbush Securities: Great. And then my final -

But on the other hand, in the company you know that we are at $700 million, you go to a billion-dollar company, it’s still, you’re growing at 20% per year. That construction backlog has to grow at a pretty good rate as well. Craig Irwin – Wedbush Securities: Excellent, excellent. My final question is really just a housekeeping question. Could you share with us what your ESPC receivables financing was so we can eliminate the debt, so called, from the balance sheet to understand really what your core financial profile is?

Yeah.

Yeah, it was at the end of the quarter about $131 million and it was I think about $110 million at yearend. Craig Irwin – Wedbush Securities: Right. Thank you very much, Andrew. Thank you for taking my questions.

You’re welcome.

(Operator Instructions) And our next question comes from Michael Lew from Needham & Co. Please proceed. Michael Lew – Needham & Company: Hey. Thank you, and good morning.

Good morning, Michael. Michael Lew – Needham & Company: You mentioned the $95 million to $105 million of revenue shift, how many contracts or deals does that comprise of?

I would say about 20 contracts. Michael Lew – Needham & Company: 20 contracts?

Yeah. Michael Lew – Needham & Company: And how much of that is energy efficiency related, is that all energy or some renewable too or...

No.

There is some renewable...

There is some renewables, and actually some couple of plants that we’re building for us. That’s another issue that they didn’t get their permits on time. And... Michael Lew – Needham & Company: Yeah.

So, I would say 70/30.

Energy efficiency.

Right.

Renewable energy.

Yeah. Michael Lew – Needham & Company: Okay. 70/30 split. And also can you repeat how much of the pipeline was up? I didn’t get that number.

The pipeline was only up 3%, but – to $2.5 billion. One of the things that we are doing focusing substantially more in...

I’m sorry. Who do I turn the call back?

Hello? Michael Lew – Needham & Company: Yeah. I’m still here.

Anyway, we are not as focused in growing in the pipeline as we are focusing in the awarded contracts, otherwise bring the success rates higher, which means that we have the sales people, the 140 or so, go after targeted contracts, so our success rate is much better than making proposals out there, for more qualified proposals anyway. Michael Lew – Needham & Company: Now if I can ask on the $2.5 billion, what type of conversation rate do you expect on that get awarded.

We said it before, it’s in mid-30s Michael Lew – Needham & Company: Mid 30s, okay.

And has been trending up, I will say this much. Michael Lew – Needham & Company: And also given this environment too, are you – what level of re-scoping are you experiencing on the current businesses, are you seeing a lot of re-negotiations on the current contracts and?

No that has yet – no, we have not seen that. We have seen couple of requests like I mentioned earlier refinancing again at cheaper rates and we are doing that.

Yeah, but those are on existing project that are already in operations.

Yeah.

And don’t affect our revenue. Michael Lew – Needham & Company: Okay, but the total amount still, okay.

Yeah. Michael Lew – Needham & Company: All right. Thank you.

You’re welcome.

I would now like to turn the call back over to Suzanne Messere for closing remarks.

Thanks, Jody and I’m actually going to turn the call over to George. So he can say a few closing words and...

Well, and with that, I do like to thank you for all for joining us today’s call and looking forward to talk to you next call. Thank you and have a nice day.

That concludes today’s conference, ladies and gentlemen. Thank you for your participation. You may now disconnect. Have a great day.