XML 18 R33.htm IDEA: XBRL DOCUMENT v2.4.0.6
Note 9. Consolidated Balance Sheet Details (Tables)
9 Months Ended
Sep. 30, 2012
Consolidated Balance Sheet Details [Abstract]  
Schedule of Accounts Receivable
Accounts receivable trade, net consisted of the following at September 30, 2012 and December 31, 2011 (in thousands):

 
 
September 30,
2012
 
December 31,
2011
Accounts receivable trade, gross
 
$
480,575

 
$
320,600

Allowance for doubtful accounts
 
(12,935
)
 
(10,032
)
Accounts receivable trade, net
 
$
467,640

 
$
310,568

Schedule of Inventory, Current and Noncurrent
Inventories consisted of the following at September 30, 2012 and December 31, 2011 (in thousands):
 
 
September 30,
2012
 
December 31,
2011
Raw materials
 
$
188,845

 
$
230,675

Work in process
 
7,244

 
28,817

Finished goods
 
478,374

 
277,126

Inventories
 
$
674,463

 
$
536,618

Inventories — current
 
$
537,567

 
$
475,867

Inventories — noncurrent (1)
 
$
136,896

 
$
60,751


(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. The increase in our noncurrent inventories was primarily the result of a decrease in the amount of such critical raw material we anticipate consuming in our next operating cycle. Such decrease resulted from a combination of the planned reduction in our manufacturing capacity and the amount of critical raw material for our next operating cycle that is required to be sourced through vendor supply agreements.
Prepaid expenses and other current assets
Prepaid expenses and other current assets consisted of the following at September 30, 2012 and December 31, 2011 (in thousands):
 
 
September 30,
2012
 
December 31,
2011
Prepaid expenses
 
$
36,313

 
$
151,630

Derivative instruments 
 
2,842

 
63,673

Deferred costs of goods sold
 
95,940

 
1,152

Other assets — current
 
81,101

 
112,577

Prepaid expenses and other current assets
 
$
216,196

 
$
329,032

Property, plant and equipment, net
Property, plant and equipment, net consisted of the following at September 30, 2012 and December 31, 2011 (in thousands):
 
 
September 30,
2012
 
December 31,
2011
Buildings and improvements
 
$
438,672

 
$
393,676

Machinery and equipment
 
1,367,752

 
1,453,293

Office equipment and furniture
 
115,616

 
110,936

Leasehold improvements
 
54,299

 
48,374

Depreciable property, plant and equipment, gross
 
1,976,339

 
2,006,279

Accumulated depreciation
 
(777,044
)
 
(617,787
)
Depreciable property, plant and equipment, net
 
1,199,295

 
1,388,492

Land
 
22,348

 
8,065

Construction in progress (1)
 
328,046

 
419,401

Property, plant and equipment, net
 
$
1,549,689

 
$
1,815,958


(1)
Included within construction in progress as of September 30, 2012 is $222.8 million of machinery and equipment (“stored assets”) that was originally purchased for installation in our previously planned manufacturing capacity expansions. We intend to install and place the stored assets into service once market demand supports such additional manufacturing capacity. As the stored assets are neither in the condition or location to produce modules as intended, we will not begin depreciation until the assets are placed into service. The stored assets are evaluated for impairment whenever events or changes in business circumstances arise that may indicate that the carrying amount of the stored assets may not be recoverable.

Schedule of Capitalized Interest
We capitalized interest costs incurred into property, plant and equipment or project assets as follows during the three and nine months ended September 30, 2012 and September 30, 2011 (in thousands):
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30, 2012
 
September 30, 2011
 
September 30, 2012
 
September 30, 2011
Interest cost incurred
 
$
(4,254
)
 
$
(4,847
)
 
$
(20,304
)
 
$
(8,638
)
Interest cost capitalized —– property, plant and equipment
 
715

 
1,442

 
3,538

 
4,553

Interest cost capitalized —– project assets
 
637

 
3,405

 
5,572

 
4,085

Interest expense, net
 
$
(2,902
)
 
$

 
$
(11,194
)
 
$

Schedule of Project Assets Noncurrent
Project assets consisted of the following at September 30, 2012 and December 31, 2011 (in thousands):
 
 
September 30,
2012
 
December 31,
2011
Project assets — land
 
$
8,900

 
$
13,704

Project assets — development costs
 
142,848

 
136,251

Project assets — construction costs
 
99,064

 
224,926

Project assets 
 
$
250,812

 
$
374,881

Schedule of Other Assets, Noncurrent
Other assets consisted of the following at September 30, 2012 and December 31, 2011 (in thousands):

 
 
September 30, 2012
 
December 31, 2011
Retainage (1)
 
$
225,483

 
$

Other assets - noncurrent
 
54,592

 
67,615

Other assets 
 
$
280,075

 
$
67,615


(1)
Certain of the EPC contracts for solar power plants we build contain retainage provisions. Retainage refers to the portion of the EPC 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. We consider whether collectability of such retainage is reasonably assured in connection with our overall assessment of the collectability of amounts due or that will become due under our EPC contracts. Retainage expected to be collected within the next 12 months is classified within Accounts receivable, unbilled on the condensed consolidated balance sheet. After we have met the EPC contract requirements to bill for retainage, we will reclassify such amounts to Accounts receivable trade, net. Amounts are expected to be collected in 2013 through 2015, after certain construction milestones have been met.
Schedule of Accrued Liabilities
Accrued expenses consisted of the following at September 30, 2012 and December 31, 2011 (in thousands):
 
 
September 30,
2012
 
December 31,
2011
Accrued compensation, benefits and severance
 
$
97,128

 
$
57,480

Accrued property, plant and equipment
 
27,979

 
41,015

Accrued inventory
 
61,063

 
46,028

Accrued project assets and deferred project costs
 
97,880

 
34,837

Product warranty liability (Note 15)
 
82,795

 
78,637

Accrued expenses in excess of normal product warranty liability and related expenses (1)
 
116,655

 
89,893

Other accrued expenses
 
91,656

 
58,769

Accrued expenses
 
$
575,156

 
$
406,659


(1) $100.9 million of accrued expenses in excess of normal product warranty liability and related expenses as of September 30, 2012 consisted primarily of commitments to certain customers, each related to the manufacturing excursion occurring during the period between June 2008 to June 2009 (“2008-2009 manufacturing excursion”), whereby certain modules manufactured during that time period may experience premature power loss once installed in the field. The accrued expense as of September 30, 2012 included the following commitments to certain customers, each related to the 2008-2009 manufacturing excursion and our related remediation program: (i) $61.9 million in estimated expenses for remediation efforts related to module removal, replacement and logistical services committed to by us beyond the normal product warranty; and (ii) $37.8 million in estimated compensation payments to customers, under certain circumstances, for power lost prior to remediation of the customer’s system under our remediation program.

$15.8 million of accrued expenses in excess of normal product warranty liability and related expenses as of September 30, 2012 consisted of commitments to certain customers related to a workmanship issue potentially affecting a limited number of solar modules manufactured between October 2008 to June 2009. A limited number of the modules manufactured during that time utilized a new material and process to attach the cord plate (junction box) to the module which may not adhere securely over time. We know the serial numbers of the affected modules and are proactively contacting the system owners to repair or replace the potentially impaired modules currently in service in a manner consistent with our normal workmanship warranty. For roof-mounted systems, we will also remove and replace the affected modules at no cost to the system owner, which remediation is in excess of our limited workmanship warranty obligation.

Our best estimate for such remediation programs is based on evaluation and consideration of currently available information, including the estimated number of potentially affected modules in the field, historical experience related to our remediation efforts, customer-provided data related to potentially affected systems, the estimated costs of performing the removal, replacement and logistical services and the post-sale expenses covered under our remediation program. If any of our estimates prove incorrect, we could be required to accrue additional expenses.
Schedule of Other Liabilities
Other current liabilities

Other current liabilities consisted of the following at September 30, 2012 and December 31, 2011 (in thousands):
 
 
September 30,
2012
 
December 31,
2011
Derivative instruments 
 
$
10,427

 
$
37,342

Deferred tax liabilities
 
1,898

 
6,612

Payments and billings for deferred project costs and deferred cost of sales (1)
 
224,759

 
192,440

Other liabilities — current
 
22,929

 
58,252

Other current liabilities
 
$
260,013

 
$
294,646


(1)
Payments and billings for deferred project costs and deferred cost of sales represent customer payments received or customer billings made under the terms of certain solar power project related sales contracts for which all revenue recognition criteria for real estate transactions under ASC 360 have not yet been met. Such solar power project related costs are included as current deferred project costs or other current assets.

Other liabilities

Other liabilities consisted of the following at September 30, 2012 and December 31, 2011 (in thousands):
 
 
September 30,
2012
 
December 31,
2011
Product warranty liability
 
$
94,419

 
$
79,105

Other taxes payable
 
96,481

 
73,054

Payments and billings for deferred project costs and deferred cost of sales (1)
 
468,562

 
167,374

Other liabilities — noncurrent
 
42,585

 
53,973

Other liabilities
 
$
702,047

 
$
373,506


(1)
Payments and billings for deferred project costs and deferred cost of sales represent customer payments received or customer billings made under the terms of certain solar power project related sales contracts for which all revenue recognition criteria for real estate transactions under ASC 360 have not yet been met. Such solar power project related costs are included as noncurrent deferred project costs.