5. Consolidated Balance Sheet Details (Tables)
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6 Months Ended |
Jun. 30, 2019 |
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| Balance Sheet Related Disclosures [Abstract] |
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| Schedule of Accounts Receivable |
Accounts receivable trade, net
Accounts receivable trade, net consisted of the following at June 30, 2019 and December 31, 2018 (in thousands): | | | | | | | | | | | | June 30,
2019 | | December 31,
2018 | Accounts receivable trade, gross | | $ | 270,862 |
| | $ | 129,644 |
| Allowance for doubtful accounts | | (1,335 | ) | | (1,362 | ) | Accounts receivable trade, net | | $ | 269,527 |
| | $ | 128,282 |
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At June 30, 2019 and December 31, 2018, $49.2 million and $8.5 million, respectively, of our accounts receivable trade, net were secured by letters of credit, bank guarantees, surety bonds, or other forms of financial security issued by creditworthy financial institutions.
Accounts receivable, unbilled and retainage
Accounts receivable, unbilled and retainage consisted of the following at June 30, 2019 and December 31, 2018 (in thousands): | | | | | | | | | | | | June 30,
2019 | | December 31,
2018 | Accounts receivable, unbilled | | $ | 103,171 |
| | $ | 441,666 |
| Retainage | | 24,801 |
| | 16,500 |
| Accounts receivable, unbilled and retainage | | $ | 127,972 |
| | $ | 458,166 |
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| Schedule of Inventories, Current and Noncurrent |
Inventories consisted of the following at June 30, 2019 and December 31, 2018 (in thousands): | | | | | | | | | | | | June 30,
2019 | | December 31,
2018 | Raw materials | | $ | 241,336 |
| | $ | 224,329 |
| Work in process | | 47,743 |
| | 41,294 |
| Finished goods | | 446,699 |
| | 252,372 |
| Inventories | | $ | 735,778 |
| | $ | 517,995 |
| Inventories – current | | $ | 586,621 |
| | $ | 387,912 |
| Inventories – noncurrent | | $ | 149,157 |
| | $ | 130,083 |
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| Schedule of Prepaid Expenses and Other Current Assets |
Prepaid expenses and other current assets consisted of the following at June 30, 2019 and December 31, 2018 (in thousands): | | | | | | | | | | | | June 30,
2019 | | December 31,
2018 | Prepaid expenses | | $ | 117,375 |
| | $ | 90,981 |
| Prepaid income taxes | | 71,402 |
| | 59,319 |
| Indirect tax receivables | | 37,583 |
| | 26,327 |
| Notes receivable (1) | | 23,911 |
| | 5,196 |
| Restricted cash | | 16,244 |
| | 19,671 |
| Derivative instruments (2) | | 1,719 |
| | 2,364 |
| Other current assets | | 37,332 |
| | 39,203 |
| Prepaid expenses and other current assets | | $ | 305,566 |
| | $ | 243,061 |
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—————————— | | (1) | In November 2014 and February 2016, we entered into a term loan agreement and a convertible loan agreement, respectively, with Clean Energy Collective, LLC (“CEC”). Our term loan bears interest at 16% per annum, and our convertible loan bears interest at 10% per annum. In November 2018, we amended the terms of the loan agreements to (i) extend their maturity to June 2020, (ii) waive the conversion features on our convertible loan, and (iii) increase the frequency of interest payments, subject to certain conditions. In January 2019, CEC finalized certain restructuring arrangements, which resulted in a dilution of our ownership interest in CEC and the loss of our representation on the company’s board of managers. As a result of such restructuring, CEC no longer qualified to be accounted for under the equity method. As of June 30, 2019, the aggregate balance outstanding on the loans was $23.6 million and was presented within “Prepaid expenses and other current assets.” As of December 31, 2018, the aggregate balance outstanding on the loans was $22.8 million and was presented within “Notes receivable, affiliate.” |
(2) See Note 6. “Derivative Financial Instruments” to our condensed consolidated financial statements for discussion of our derivative instruments.
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| Schedule of Property, Plant and Equipment, Net |
Property, plant and equipment, net consisted of the following at June 30, 2019 and December 31, 2018 (in thousands): | | | | | | | | | | | | June 30,
2019 | | December 31,
2018 | Land | | $ | 14,366 |
| | $ | 14,382 |
| Buildings and improvements | | 566,496 |
| | 567,605 |
| Machinery and equipment | | 2,091,215 |
| | 1,826,434 |
| Office equipment and furniture | | 180,968 |
| | 178,011 |
| Leasehold improvements | | 49,045 |
| | 49,055 |
| Construction in progress | | 448,199 |
| | 405,581 |
| Property, plant and equipment, gross | | 3,350,289 |
| | 3,041,068 |
| Accumulated depreciation | | (1,343,955 | ) | | (1,284,857 | ) | Property, plant and equipment, net | | $ | 2,006,334 |
| | $ | 1,756,211 |
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| Schedule of PV Solar Power Systems, Net |
Photovoltaic (“PV”) solar power systems, net consisted of the following at June 30, 2019 and December 31, 2018 (in thousands): | | | | | | | | | | | | June 30,
2019 | | December 31,
2018 | PV solar power systems, gross | | $ | 346,150 |
| | $ | 343,061 |
| Accumulated depreciation | | (41,493 | ) | | (34,421 | ) | PV solar power systems, net | | $ | 304,657 |
| | $ | 308,640 |
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| Schedule of Project Assets |
Project assets consisted of the following at June 30, 2019 and December 31, 2018 (in thousands): | | | | | | | | | | | | June 30,
2019 | | December 31,
2018 | Project assets – development costs, including project acquisition and land costs | | $ | 299,592 |
| | $ | 298,070 |
| Project assets – construction costs | | 230,357 |
| | 200,359 |
| Project assets | | $ | 529,949 |
| | $ | 498,429 |
| Project assets – current | | $ | 1,703 |
| | $ | 37,930 |
| Project assets – noncurrent | | $ | 528,246 |
| | $ | 460,499 |
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| Schedule of Capitalized Interest |
The cost of constructing project assets may include interest costs incurred during the construction period. The components of interest expense and capitalized interest were as follows during the three and six months ended June 30, 2019 and 2018 (in thousands): | | | | | | | | | | | | | | | | | | | | Three Months Ended
June 30, | | Six Months Ended
June 30, | | | 2019 | | 2018 | | 2019 | | 2018 | Interest cost incurred | | $ | (10,161 | ) | | $ | (7,591 | ) | | $ | (21,109 | ) | | $ | (14,057 | ) | Interest cost capitalized – project assets | | 1,240 |
| | 1,526 |
| | 2,067 |
| | 2,810 |
| Interest expense, net | | $ | (8,921 | ) | | $ | (6,065 | ) | | $ | (19,042 | ) | | $ | (11,247 | ) |
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| Schedule of Other Assets, Noncurrent |
Other assets consisted of the following at June 30, 2019 and December 31, 2018 (in thousands): | | | | | | | | | | | | June 30,
2019 | | December 31,
2018 | Operating lease assets (1) | | $ | 166,512 |
| | $ | — |
| Note receivable (2) | | 7,968 |
| | 8,017 |
| Indirect tax receivables | | 8,372 |
| | 22,487 |
| Income taxes receivable | | 4,444 |
| | 4,444 |
| Equity method investments (3) | | 2,833 |
| | 3,186 |
| Deferred rent | | — |
| | 27,249 |
| Other | | 57,974 |
| | 33,495 |
| Other assets | | $ | 248,103 |
| | $ | 98,878 |
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—————————— | | (1) | See Note 7. “Leases” to our condensed consolidated financial statements for discussion of our lease arrangements. |
| | (2) | In April 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 bears interest at 8.0% per annum, payable quarterly, with the full amount due in December 2026. |
| | (3) | In June 2015, 8point3 Energy Partners LP (the “Partnership”), a limited partnership formed by First Solar and SunPower Corporation (collectively the “Sponsors”), completed its initial public offering (the “IPO”). As part of the IPO, the Sponsors contributed interests in various projects to 8point3 Operating Company, LLC (“OpCo”) in exchange for voting and economic interests in the entity, and the Partnership acquired an economic interest in OpCo using proceeds from the IPO. |
In June 2018, we completed the sale of our interests in the Partnership and its subsidiaries to CD Clean Energy and Infrastructure V JV, LLC, an equity fund managed by Capital Dynamics, Inc. and certain other co-investors and other parties, and received net proceeds of $240.0 million after the payment of fees, expenses, and other amounts. We accounted for our interests in OpCo, a subsidiary of the Partnership, under the equity method of accounting as we were able to exercise significant influence over the Partnership due to our representation on the board of directors of its general partner and certain of our associates serving as officers of its general partner. During the three and six months ended June 30, 2018, we recognized equity in earnings, net of tax, of $40.9 million and $39.7 million, respectively, from our investment in OpCo, including a gain of $40.3 million, net of tax, for the sale of our interests in the Partnership and its subsidiaries. During the six months ended June 30, 2018, we received distributions from OpCo of $12.4 million.
In connection with the IPO, we also entered into an agreement with a subsidiary of the Partnership to lease back one of our originally contributed projects, Maryland Solar, until December 31, 2019. Under the terms of the agreement, we make fixed rent payments to the Partnership’s subsidiary and are entitled to all of the energy generated by the project. Due to certain continuing involvement with the project, we accounted for the leaseback agreement as a financing transaction until the sale of our interests in the Partnership and its subsidiaries in June 2018. Following the sale of such interests, the Maryland Solar project qualified for sale-leaseback accounting, and we recognized net revenue of $32.0 million from the sale of the project.
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| Schedule of Goodwill |
Goodwill for the relevant reporting unit consisted of the following at June 30, 2019 and December 31, 2018 (in thousands): | | | | | | | | | | | | | | | | December 31,
2018 |
| Acquisitions (Impairments) |
| June 30,
2019 | Modules | | $ | 407,827 |
| | $ | — |
| | $ | 407,827 |
| Accumulated impairment losses | | (393,365 | ) | | — |
| | (393,365 | ) | Goodwill | | $ | 14,462 |
| | $ | — |
| | $ | 14,462 |
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| Schedule of Intangible Assets, Net |
The following tables summarize our intangible assets at June 30, 2019 and December 31, 2018 (in thousands): | | | | | | | | | | | | | | | | June 30, 2019 | | | Gross Amount | | Accumulated Amortization | | Net Amount | Developed technology | | $ | 97,714 |
| | $ | (37,641 | ) | | $ | 60,073 |
| Power purchase agreements | | 6,486 |
| | (810 | ) | | 5,676 |
| Patents | | 7,408 |
| | (4,038 | ) | | 3,370 |
| Intangible assets, net | | $ | 111,608 |
| | $ | (42,489 | ) | | $ | 69,119 |
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| | | | | | | | | | | | | | | | December 31, 2018 | | | Gross Amount | | Accumulated Amortization | | Net Amount | Developed technology | | $ | 97,714 |
| | $ | (33,093 | ) | | $ | 64,621 |
| Power purchase agreements | | 6,486 |
| | (648 | ) | | 5,838 |
| Patents | | 7,408 |
| | (3,705 | ) | | 3,703 |
| Intangible assets, net | | $ | 111,608 |
| | $ | (37,446 | ) | | $ | 74,162 |
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| Schedule of Accrued Expenses |
Accrued expenses consisted of the following at June 30, 2019 and December 31, 2018 (in thousands): | | | | | | | | | | | | June 30,
2019 | | December 31,
2018 | Accrued project costs | | $ | 103,286 |
| | $ | 147,162 |
| Accrued property, plant and equipment | | 96,456 |
| | 89,905 |
| Accrued inventory | | 56,485 |
| | 53,075 |
| Product warranty liability (1) | | 41,930 |
| | 27,657 |
| Accrued compensation and benefits | | 41,094 |
| | 41,937 |
| Other | | 82,344 |
| | 81,844 |
| Accrued expenses | | $ | 421,595 |
| | $ | 441,580 |
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—————————— (1) See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our “Product warranty liability.”
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| Schedule of Other Current Liabilities |
Other current liabilities consisted of the following at June 30, 2019 and December 31, 2018 (in thousands): | | | | | | | | | | | | June 30,
2019 | | December 31,
2018 | Operating lease liabilities (1) | | $ | 11,525 |
| | $ | — |
| Derivative instruments (2) | | 5,259 |
| | 7,294 |
| Contingent consideration (3) | | 570 |
| | 665 |
| Other | | 5,987 |
| | 6,421 |
| Other current liabilities | | $ | 23,341 |
| | $ | 14,380 |
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—————————— | | (1) | See Note 7. “Leases” to our condensed consolidated financial statements for discussion of our lease arrangements. |
| | (2) | See Note 6. “Derivative Financial Instruments” to our condensed consolidated financial statements for discussion of our derivative instruments. |
(3) See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our “Contingent consideration” arrangements.
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| Schedule of Other Liabilities |
Other liabilities consisted of the following at June 30, 2019 and December 31, 2018 (in thousands): | | | | | | | | | | | | June 30,
2019 | | December 31,
2018 | Product warranty liability (1) | | $ | 176,061 |
| | $ | 193,035 |
| Operating lease liabilities (2) | | 131,793 |
| | — |
| Other taxes payable | | 85,695 |
| | 83,058 |
| Transition tax liability | | 68,851 |
| | 77,016 |
| Deferred revenue | | 45,445 |
| | 48,014 |
| Derivative instruments (3) | | 8,650 |
| | 9,205 |
| Contingent consideration (1) | | 5,250 |
| | 2,250 |
| Other liabilities — noncurrent | | 48,368 |
| | 55,261 |
| Other liabilities | | $ | 570,113 |
| | $ | 467,839 |
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—————————— | | (1) | See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our “Product warranty liability” and “Contingent consideration” arrangements. |
| | (2) | See Note 7. “Leases” to our condensed consolidated financial statements for discussion of our lease arrangements. |
(3) See Note 6. “Derivative Financial Instruments” to our condensed consolidated financial statements for discussion of our derivative instruments.
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