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Note 8. Consolidated Balance Sheet Details (Tables)

12 Months Ended

Dec. 31, 2019

Balance Sheet Related Disclosures [Abstract]

Accounts receivable trade, net

Accounts receivable trade, net consisted of the following at December 31, 2019 and 2018 (in thousands):



	2019			2018
Accounts receivable trade, gross	$	476,425		$	129,644
Allowance for doubtful accounts	(1,386		)	(1,362		)
Accounts receivable trade, net	$	475,039		$	128,282

At December 31, 2019 and 2018, $44.9 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 December 31, 2019 and 2018 (in thousands):



	2019		2018
Accounts receivable, unbilled	$	162,057	$	441,666
Retainage	21,416		16,500
Accounts receivable, unbilled and retainage	$	183,473	$	458,166

Schedule of Inventory, Current and Noncurrent

Inventories consisted of the following at December 31, 2019 and 2018 (in thousands):



	2019		2018
Raw materials	$	248,756	$	224,329
Work in process	59,924		41,294
Finished goods	295,479		252,372
Inventories	$	604,159	$	517,995
Inventories – current	$	443,513	$	387,912
Inventories – noncurrent	$	160,646	$	130,083

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following at December 31, 2019 and 2018 (in thousands):



	2019		2018
Prepaid expenses	$	137,927	$	90,981
Prepaid income taxes	47,811		59,319
Indirect tax receivables	29,908		26,327
Restricted cash	13,697		19,671
Notes receivable (1)	23,873		5,196
Derivative instruments (2)	1,199		2,364
Other current assets	22,040		39,203
Prepaid expenses and other current assets	$	276,455	$	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 December 31, 2019, the aggregate balance outstanding on the loans was $23.9 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 9. “Derivative Financial Instruments” to our consolidated financial statements for discussion of our derivative instruments.

Schedule of Property, Plant and Equipment, Net

Property, plant and equipment, net consisted of the following at December 31, 2019 and 2018 (in thousands):



	2019			2018
Land	$	14,241		$	14,382
Buildings and improvements	664,266			567,605
Machinery and equipment	2,436,997			1,826,434
Office equipment and furniture	159,848			178,011
Leasehold improvements	48,772			49,055
Construction in progress	243,107			405,581
Property, plant and equipment, gross	3,567,231			3,041,068
Accumulated depreciation	(1,386,082		)	(1,284,857		)
Property, plant and equipment, net	$	2,181,149		$	1,756,211

Schedule of PV Solar Power Systems, Net

PV solar power systems, net consisted of the following at December 31, 2019 and 2018 (in thousands):



	2019			2018
PV solar power systems, gross	$	530,004		$	343,061
Accumulated depreciation	(53,027		)	(34,421		)
PV solar power systems, net	$	476,977		$	308,640

Schedule of Project Assets

Project assets consisted of the following at December 31, 2019 and 2018 (in thousands):



	2019		2018
Project assets – development costs, including project acquisition and land costs	$	254,466	$	298,070
Project assets – construction costs	82,654		200,359
Project assets	337,120		498,429
Project assets – current	$	3,524	$	37,930
Project assets – noncurrent	$	333,596	$	460,499

Schedule of Capitalized Interest

The components of interest expense and capitalized interest were as follows during the years ended December 31, 2019, 2018, and 2017 (in thousands):



	2019			2018			2017
Interest cost incurred	$	(29,656	)	$	(31,752	)	$	(27,457	)
Interest cost capitalized – project assets	2,590			5,831			1,692
Interest expense, net	$	(27,066	)	$	(25,921	)	$	(25,765	)

Schedule of Other Assets, Noncurrent

Other assets consisted of the following at December 31, 2019 and 2018 (in thousands):



	2019		2018
Operating lease assets (1)	$	145,711	$	—
Indirect tax receivables	9,446		22,487
Notes receivable (2)	8,194		8,017
Income taxes receivable	4,106		4,444
Equity method investments (3)	2,812		3,186
Derivative instruments (4)	139		—
Deferred rent	—		27,249
Other	79,446		33,495
Other assets	$	249,854	$	98,878

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(1)	See Note 10. "Leases" to our 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. As of December 31, 2019 and 2018, the balance outstanding on the credit facility was €7.0 million ($7.8 million and $8.0 million, respectively).

(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 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 year ended December 31, 2018, we recognized equity in earnings, net of tax, of $39.7 million 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 year ended December 31, 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 made fixed rent payments to the Partnership’s subsidiary and were 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.

(4)

See Note 9. “Derivative Financial Instruments” to our consolidated financial statements for discussion of our derivative instruments.

Schedule of Accrued Expenses

Accrued expenses consisted of the following at December 31, 2019 and 2018 (in thousands):



	2019		2018
Accrued project costs	$	91,971	$	147,162
Accrued compensation and benefits	65,170		41,937
Accrued property, plant and equipment	42,834		89,905
Accrued inventory	39,366		53,075
Product warranty liability (1)	20,291		27,657
Other	91,628		81,844
Accrued expenses	$	351,260	$	441,580

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(1)

See Note 14. “Commitments and Contingencies” to our consolidated financial statements for discussion of our “Product warranty liability.”

Schedule of Other Current Liabilities

Other current liabilities consisted of the following at December 31, 2019 and 2018 (in thousands):



	2019		2018
Operating lease liabilities (1)	$	11,102	$	—
Derivative instruments (2)	2,582		7,294
Contingent consideration (3)	2,395		665
Other	12,051		6,421
Other current liabilities	$	28,130	$	14,380

——————————


(1)	See Note 10. "Leases" to our consolidated financial statements for discussion of our lease arrangements.


(2)	See Note 9. “Derivative Financial Instruments” to our consolidated financial statements for discussion of our derivative instruments.


(3)	See Note 14. “Commitments and Contingencies” to our consolidated financial statements for discussion of our “Contingent consideration” arrangements.

Schedule of Other Liabilities

Other liabilities consisted of the following at December 31, 2019 and 2018 (in thousands):



	2019		2018
Operating lease liabilities (1)	$	112,515	$	—
Product warranty liability (2)	109,506		193,035
Other taxes payable	90,201		83,058
Deferred revenue	71,438		48,014
Transition tax liability (3)	70,047		77,016
Derivative instruments (4)	7,439		9,205
Contingent consideration (2)	4,500		2,250
Other	43,120		55,261
Other liabilities	$	508,766	$	467,839

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(1)	See Note 10. "Leases" to our consolidated financial statements for discussion of our lease arrangements.


(2)	See Note 14. “Commitments and Contingencies” to our consolidated financial statements for discussion of our “Product warranty liability” and “Contingent consideration” arrangements.


(3)	See Note 18. “Income Taxes” to our consolidated financial statements for discussion of the one-time transition tax on accumulated earnings of foreign subsidiaries as a result of the Tax Act.

(4)

See Note 9. “Derivative Financial Instruments” to our consolidated financial statements for discussion of our derivative instruments.