9. Consolidated Balance Sheet Details
Accounts receivable trade, net
Accounts receivable trade, net consisted of the following at December 31, 2013 and 2012 (in thousands):
|
| | | | | | | | |
| | 2013 | | 2012 |
Accounts receivable trade, gross | | $ | 148,693 |
| | $ | 568,070 |
|
Allowance for doubtful accounts | | (12,310 | ) | | (14,503 | ) |
Accounts receivable trade, net | | $ | 136,383 |
| | $ | 553,567 |
|
At December 31, 2013, $25.2 million of our accounts receivable trade, net, were secured by letters of credit, bank guarantees or other forms of financial security issued by credit worthy financial institutions.
Accounts receivable, unbilled and retainage
Accounts receivable, unbilled and retainage consisted of the following at December 31, 2013 and 2012 (in thousands):
|
| | | | | | | | |
| | 2013 | | 2012 |
Accounts receivable, unbilled | | $ | 102,953 |
| | $ | 342,587 |
|
Retainage | | 418,370 |
| | 58,400 |
|
Accounts receivable, unbilled and retainage | | $ | 521,323 |
| | $ | 400,987 |
|
Accounts receivable, unbilled represents revenue that has been recognized in advance of billing the customer. This is common for long-term construction contracts. For example, we recognize revenue from contracts for the construction and sale of solar power systems which include the sale of project assets over the construction period using applicable accounting methods. One applicable accounting method is the percentage-of-completion method under which sales and gross profit are recognized as construction work is performed based on the relationship between actual costs incurred compared to the total estimated costs for constructing the project. Under this accounting method, revenue can be recognized in advance of billing the customer, resulting in an amount recorded to accounts receivable, unbilled and retainage. Once we meet the billing criteria under a construction contract, we bill our customers accordingly and reclassify the accounts receivable, unbilled and retainage to accounts receivable trade, net. Billing requirements vary by contract, but are generally structured around completion of certain construction milestones.
Also included within accounts receivable, unbilled and retainage is the current portion of retainage. Retainage refers to the portion of the contract price earned by us for work performed, but held for payment by our customer as a form of security until we reach certain construction milestones. Retainage included within accounts receivable, unbilled and retainage is expected to be billed and collected within the next 12 months.
Inventories
Inventories consisted of the following at December 31, 2013 and 2012 (in thousands):
|
| | | | | | | | |
| | 2013 | | 2012 |
Raw materials | | $ | 165,805 |
| | $ | 184,006 |
|
Work in process | | 11,874 |
| | 14,868 |
|
Finished goods | | 340,936 |
| | 370,422 |
|
Total inventories | | $ | 518,615 |
| | $ | 569,296 |
|
Inventories — current | | $ | 388,951 |
| | $ | 434,921 |
|
Inventories — noncurrent (1) | | $ | 129,664 |
| | $ | 134,375 |
|
(1) We purchase a critical raw material that is used in our core production process in quantities that exceed anticipated consumption within our operating cycle (which is 12 months). We classify the raw materials that we do not expect to be consumed within our operating cycle as noncurrent.
Balance of systems parts
Balance of systems parts, which totaled $133.7 million and $98.9 million as of December 31, 2013 and 2012, respectively, represent mounting, third-party modules, electrical and other construction parts purchased for solar power plants to be constructed or currently under construction, which we hold title to and are not yet installed in a solar power plant.
Note receivable, affiliate
Note receivable, affiliate was zero and $17.7 million as of December 31, 2013 and 2012, respectively. In 2012, in connection with a project development, we entered into a loan agreement with a 6% per annum interest rate, with the property company, which was considered an affiliate, which required that the proceeds be used to purchase the project land and to pay for certain land development costs. Construction of the project was substantially completed during September 2012. During the first quarter of 2013, the then outstanding principal balance on this loan of €13.4 million was repaid in full. Additionally, €1.1 million of interest income was received under the terms of the loan, representing the cumulative interest due from the property company since the inception of the loan.
Prepaid expenses and other current assets
Prepaid expenses and other current assets consisted of the following at December 31, 2013 and 2012 (in thousands):
|
| | | | | | | | |
| | 2013 | | 2012 |
Prepaid expenses | | $ | 24,572 |
| | $ | 39,582 |
|
Derivative instruments | | 7,996 |
| | 7,230 |
|
Deferred costs of goods sold | | 753 |
| | 96,337 |
|
Other current assets | | 61,399 |
| | 64,219 |
|
Prepaid expenses and other current assets | | $ | 94,720 |
| | $ | 207,368 |
|
Property, plant and equipment, net
Property, plant and equipment, net consisted of the following at December 31, 2013 and 2012 (in thousands):
|
| | | | | | | | |
| | 2013 | | 2012 |
Buildings and improvements | | $ | 360,504 |
| | $ | 446,133 |
|
Machinery and equipment | | 1,445,939 |
| | 1,415,632 |
|
Office equipment and furniture | | 124,332 |
| | 117,228 |
|
Leasehold improvements | | 47,833 |
| | 49,367 |
|
Depreciable property, plant and equipment, gross | | 1,978,608 |
| | 2,028,360 |
|
Accumulated depreciation | | (940,730 | ) | | (803,501 | ) |
Depreciable property, plant and equipment, net | | 1,037,878 |
| | 1,224,859 |
|
Land | | 10,714 |
| | 22,256 |
|
Construction in progress | | 133,223 |
| | 51,133 |
|
Stored assets (1) | | 203,269 |
| | 227,134 |
|
Property, plant and equipment, net | | $ | 1,385,084 |
| | $ | 1,525,382 |
|
(1) Consists of machinery and equipment (“stored assets”) that were originally purchased for installation in our previously planned manufacturing capacity expansions. We intend to install and place the stored assets into service when such assets are required or beneficial to our existing installed manufacturing capacity or when market demand supports additional or market specific manufacturing capacity. As the stored assets are neither in the condition or location to produce modules as intended, we will not begin depreciation until such assets are placed into service. The stored assets are evaluated for impairment under a held and used impairment model whenever events or changes in business circumstances arise, including consideration of technological obsolescence, that may indicate that the carrying amount of our long-lived assets may not be recoverable. We ceased the capitalization of interest on such stored assets once they were physically received from the related machinery and equipment vendors.
Depreciation of property, plant and equipment was $237.9 million, $263.3 million, and $230.2 million for the years ended December 31, 2013, 2012, and 2011, respectively.
In December 2011, February 2012, and April 2012, we announced a series of restructuring initiatives. As part of these initiatives, certain property, plant and equipment were determined to be impaired and impairment charges were recorded. See Note 4 “Restructuring and Asset Impairments,” for more information on the long-lived asset impairments related to these restructuring initiatives as well as asset impairments incurred during 2013 in connection with our Mesa and Vietnam facilities.
Capitalized interest
The cost of constructing facilities, equipment and project assets includes interest costs incurred during the asset’s construction period. The components of interest expense and capitalized interest are as follows during the years ended December 31, 2013, 2012, and 2011 (in thousands):
|
| | | | | | | | | | | | |
| | 2013 | | 2012 | | 2011 |
Interest cost incurred | | $ | (11,703 | ) | | $ | (24,191 | ) | | $ | (15,349 | ) |
Interest cost capitalized – property, plant and equipment | | 2,608 |
| | 4,201 |
| | 7,483 |
|
Interest cost capitalized – project assets | | 7,211 |
| | 6,102 |
| | 7,766 |
|
Interest expense, net | | $ | (1,884 | ) | | $ | (13,888 | ) | | $ | (100 | ) |
Project assets and Deferred project costs
Project assets and deferred project costs consisted of the following at December 31, 2013 and 2012 (in thousands):
|
| | | | | | | | |
| | 2013 | | 2012 |
Project assets — land | | $ | 4,150 |
| | $ | 9,164 |
|
Project assets — development costs including project acquisition costs | | 465,316 |
| | 157,489 |
|
Project assets — construction costs | | 156,824 |
| | 192,171 |
|
Project assets — projects in pre-COD operation under project PPAs | | 66,240 |
| | — |
|
Project assets | | $ | 692,530 |
| | $ | 358,824 |
|
Deferred project costs - current | | $ | 556,957 |
| | $ | 21,390 |
|
Deferred project costs - noncurrent | | 28,386 |
| | 486,654 |
|
Deferred project costs | | $ | 585,343 |
| | $ | 508,044 |
|
Total project assets and deferred project costs | | $ | 1,277,873 |
| | $ | 866,868 |
|
Other assets
Other assets consisted of the following at December 31, 2013 and 2012 (in thousands):
|
| | | | | | | | |
| | 2013 | | 2012 |
Note receivable (1) | | $ | 9,655 |
| | $ | 9,260 |
|
Income taxes receivable | | 7,656 |
| | 7,258 |
|
Deferred rent | | 21,175 |
| | 21,570 |
|
Investments in unconsolidated affiliates and joint ventures (2) | | 17,321 |
| | 5,073 |
|
Intangible assets, net (Note 6) | | 117,416 |
| | 3,735 |
|
Other | | 19,830 |
| | 9,556 |
|
Other assets | | $ | 193,053 |
| | $ | 56,452 |
|
| |
(1) | On April 8, 2009, we entered into a credit facility agreement with a solar power project entity of one of our customers for an available amount of €17.5 million to provide financing for a PV solar power system. The credit facility replaced a bridge loan that we had made to this entity. The credit facility bears interest at 8% per annum payable quarterly, with the full amount due on December 31, 2026. As of December 31, 2013 and 2012, the balance on this credit facility was €7.0 million ($9.7 million and $9.3 million, respectively at the balance sheet dates). |
| |
(2) | Joint ventures or other business arrangements with strategic partners are a key part of our Long Term Strategic Plan, and we have begun initiatives in several markets using such arrangements to expedite our penetration of those markets and establish relationships with potential customers and policymakers. Some of these business arrangements have and are expected in the future to involve significant investments or other allocations of capital on our part. Investments in unconsolidated entities over which we have significant influence are accounted for under the equity method of accounting. Investments in entities in which we do not have the ability to exert significant influence over the investees’ operating and financing activities are accounted for under the cost method of accounting. We made $17.9 million of cash investments in unconsolidated entities during the year ended December 31, 2013 primarily related to furthering our goal of expanding our service and product offerings and developing partnerships in new markets. The following table summarizes our equity and cost method investments as of December 31, 2013 and 2012 (in thousands): |
|
| | | | | | | | |
| | 2013 |
| 2012 |
Equity method investments | | $ | 12,148 |
| | $ | — |
|
Cost method investments | | 5,173 |
| | 5,073 |
|
Investments in unconsolidated affiliates and joint ventures | | $ | 17,321 |
| | $ | 5,073 |
|
Accrued expenses
Accrued expenses consisted of the following at December 31, 2013 and 2012 (in thousands):
|
| | | | | | | | |
| | 2013 | | 2012 |
Accrued compensation and benefits | | $ | 50,148 |
| | $ | 105,677 |
|
Accrued property, plant and equipment | | 19,834 |
| | 20,564 |
|
Accrued inventory | | 43,966 |
| | 52,408 |
|
Accrued project assets and deferred project costs | | 80,528 |
| | 76,133 |
|
Product warranty liability (1) | | 67,097 |
| | 90,581 |
|
Accrued expenses in excess of normal product warranty liability and related expenses (1) | | 12,516 |
| | 75,020 |
|
Other | | 45,988 |
| | 134,050 |
|
Accrued expenses | | $ | 320,077 |
| | $ | 554,433 |
|
(1) See Note 15 “Commitments and Contingencies,” for further discussion of “Product warranty liability” and “Accrued expenses in excess of normal product warranty liability and related expenses.”
Other current liabilities
Other current liabilities consisted of the following at December 31, 2013 and 2012 (in thousands):
|
| | | | | | | | |
| | 2013 | | 2012 |
Deferred revenue | | $ | 1,193 |
| | $ | 2,056 |
|
Derivative instruments | | 8,096 |
| | 5,825 |
|
Deferred tax liabilities | | 138 |
| | 2,226 |
|
Billings in excess of costs and estimated earnings | | 117,766 |
| | 2,422 |
|
Contingent consideration (1) | | 37,775 |
| | — |
|
Other (2) | | 132,219 |
| | 21,824 |
|
Other current liabilities | | $ | 297,187 |
| | $ | 34,353 |
|
(1) See Note 15 “Commitments and Contingencies,” for further discussion of “Contingent consideration.”
(2) Balance consists primarily of proceeds received for our Mesa facility that is classified as “Assets held for sale” on our consolidated balance sheet as of December 31, 2013. For further discussion see Note 4 “Restructuring and Asset Impairments.” Due to our continuing involvement with the Mesa facility, we deferred recognition of the sale transaction until certain risks and rewards of ownership are fully transferred to the buyer, which is expected to occur in the first quarter of 2014.
Other liabilities
Other liabilities consisted of the following at December 31, 2013 and 2012 (in thousands):
|
| | | | | | | | |
| | 2013 | | 2012 |
Product warranty liability (1) | | $ | 130,944 |
| | $ | 101,015 |
|
Other taxes payable | | 119,124 |
| | 102,599 |
|
Billings in excess of costs and estimated earnings | | — |
| | 47,623 |
|
Contingent consideration (1) | | 58,969 |
| | — |
|
Liability in excess of normal product warranty liability and related expenses (1) | | 39,565 |
| | — |
|
Other (1) | | 55,779 |
| | 40,979 |
|
Other liabilities | | $ | 404,381 |
| | $ | 292,216 |
|
(1) See Note 15 “Commitments and Contingencies,” for further discussion of “Product warranty liability,” “Contingent consideration,” “Energy test guarantees,” and “Liability in excess of normal product warranty liability and related expenses.”
