XML 30 R8.htm IDEA: XBRL DOCUMENT

Restatement of Previously Issued Condensed Consolidated Financial Statements

6 Months Ended

Jun. 30, 2020

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Condensed Consolidated Financial Statements

We have restated herein our condensed consolidated financial statements as of and for the three and six months ended June 30, 2019. We have also restated related amounts within the accompanying footnotes to the condensed consolidated financial statements.

Restatement Background

As previously disclosed in our Annual Report on Form 10-K as filed on March 31, 2020, on February 11, 2020, our management, in consultation with the Audit Committee of our Board of Directors, determined that our previously issued consolidated financial statements as of and for the year ended December 31, 2018, as well as financial statements as of and for

the three month period ended March 31, 2019, the three and six month periods ended June 30, 2019 and 2018 and the three and nine month periods ended September 30, 2019 and 2018 should no longer be relied upon due to misstatements related to our Managed Services Agreements and similar arrangements and we would restate such financial statements to make the necessary accounting corrections. The revenue for the Managed Services Agreements and similar transactions will now be recognized over the duration of the contract instead of upfront. The restatement also includes corrections for additional identified immaterial misstatements in certain of the impacted periods.

The misstatements impacting as of and for the three and six months ended June 30, 2019 are described in greater detail below.

Description of Misstatements

Under our Managed Services program, we sell our equipment to a bank financing party under a sale-leaseback transaction, which pays us for the Energy Server and takes title to the Energy Server. We then enter into a service contract with an end customer, who pays the bank a fixed, monthly fee for its use of the Energy Server and pays us for our maintenance and operation of the Energy Server.

The majority of these Managed Services Agreements and similar transactions were originally recorded as sales, subject to an operating lease, in which revenues and associated costs were recognized at the time of installation and acceptance of the Energy Server at the customer site.

In December 2019, in the course of reviewing a Managed Services transaction that closed on November 27, 2019, an issue was identified related to the accounting for our Managed Services transactions. The issue primarily related to whether the terms of our Managed Services Agreements and similar arrangements, including the events of default provisions, satisfied the requirements for sales under the revenue accounting standards. Subsequently, it was determined that the previous accounting for the Managed Services Agreements and similar transactions was misstated, as the Managed Services Agreements and similar transactions should have been accounted for as financing transactions under lease accounting standards.

The impact of the correction of the misstatement is to recognize amounts received from the bank financing party as a financing obligation, and the Energy Server is recorded within property, plant and equipment, net, on our consolidated balance sheets. We recognize revenue for the electricity generated by the systems, based on payments received by the bank from the customer, and the corresponding financing obligations to the bank is also amortized as these payments are received by the bank from the customer, with interest thereon being calculated on an effective interest rate basis. Depreciation expense is also recognized over the estimated useful life of the Energy Server.

In addition, it was determined that stock-based compensation costs relating to manufacturing employees that were previously expensed as incurred incorrectly, should have been capitalized as a component of Energy Server manufacturing costs to inventory, deferred cost of revenues, construction-in-progress and property, plant and equipment in accordance with SEC Staff Accounting Bulletin Topic 14. These costs will now be expensed on consumption of the related inventory and over the economic useful life of the property, plant and equipment, as applicable.

Also, as part of a review of historical revenue agreements as a result of the above errors, it was noted that we failed to identify embedded derivatives in certain revenue agreements for an escalator price protection (“EPP”) feature given to our customers. As a result, we have recorded a derivative liability, with an offset to product revenue, to account for the fair value of this feature at inception and will record the liability at its then fair value at each period end with any changes in fair value recognized in gain (loss) on revaluation of embedded derivatives.

In addition to the impact of the restatement described above, in preparation of the condensed consolidated financial statements for the three months ended March 31, 2020, errors in our condensed consolidated statements of comprehensive loss were discovered. For the three and six month periods ended June 30, 2019, the presentation of this statement and other errors identified in this statement have been corrected, which resulted in an additional $5.0 million and $8.8 million increase to comprehensive loss, and an increase of $5.0 million and $8.8 million in comprehensive loss attributable to noncontrolling interest and redeemable noncontrolling interests, respectively. The condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2019 will also be corrected when those periods are next reported. In the consolidated statements of comprehensive loss for the years ended December 31, 2019 and 2018, comprehensive loss as previously reported is understated by $5.8 million and overstated by $1.8 million, respectively. In addition, the reconciliation of comprehensive loss to comprehensive loss attributable to Class A and Class B stockholders was erroneously omitted. As it relates to the impact of the errors to the consolidated statements of comprehensive loss for the years ended December 31, 2019 and 2018, management evaluated the impact of the errors to the previously issued financial statements and concluded the impacts were not material. Accordingly, these items are and will be corrected when those periods are next reported.

Finally, there were certain other immaterial misstatements identified or which had been previously identified that are also being corrected in connection with the restatement of previously issued financial statements.

Description of Restatement Reconciliation Tables

In the following tables, we have presented a reconciliation of our condensed consolidated balance sheet and statements of operations and cash flows from our prior periods as previously reported to the restated amounts as of and for the three and six months ended June 30, 2019. In addition to the errors to the condensed consolidated statement of comprehensive loss discussed above, that Statement has been restated for the restatement impact to net loss. The condensed consolidated statement of redeemable noncontrolling interest, total stockholders' deficit and noncontrolling interest for the three and six months ended June 30, 2019 has also been restated for the restatement impact to net loss. See the condensed consolidated statements of operations reconciliation table below for additional information on the restatement impact to net loss.

Bloom Energy Corporation

Condensed Consolidated Balance Sheet

(in thousands)


	June 30, 2019
	As Previously Reported		Restatement Impacts		Restatement Reference	ASC 606 Adoption Impacts		As Restated And Recast

Assets
Current assets:
Cash and cash equivalents	$	308,009	$	—		$	—	$	308,009
Restricted cash	23,706		—			—		23,706

Accounts receivable	38,296		4,172		1	(2,430)		40,038
Inventories	104,934		1,955		2	—		106,889
Deferred cost of revenue	86,434		(6,127)		3	—		80,307
Customer financing receivable	5,817		—			—		5,817
Prepaid expenses and other current assets	25,088		1,252		4	143		26,483
Total current assets	592,284		1,252			(2,287)		591,249
Property, plant and equipment, net	406,610		234,649		5	—		641,259
Customer financing receivable, non-current	64,146		—			—		64,146
Restricted cash, non-current	39,351		—			—		39,351
Deferred cost of revenue, non-current	59,213		(55,367)		3	—		3,846
Other long-term assets	60,975		9,118		6	2,743		72,836
Total assets	$	1,222,579	$	189,652		$	456	$	1,412,687
Liabilities, Redeemable Noncontrolling Interest, Stockholders’ Deficit and Noncontrolling Interests
Current liabilities:
Accounts payable	$	61,427	$	—		$	—	$	61,427
Accrued warranty	12,393		(1,154)		7	(999)		10,240
Accrued expenses and other current liabilities	109,722		(4,329)		8	—		105,393

Financing obligations	—		10,027		9	—		10,027
Deferred revenue and customer deposits	129,321		(13,847)		10	3,264		118,738
Current portion of recourse debt	15,681		—			—		15,681
Current portion of non-recourse debt	7,654		—			—		7,654

Current portion of non-recourse debt from related parties	2,889		—			—		2,889
Total current liabilities	339,087		(9,303)			2,265		332,049

Derivative liabilities	13,079		5,096		11	—		18,175
Deferred revenue and customer deposits, net of current portion	181,221		(95,840)		10	25,369		110,750

Financing obligations, non-current	—		400,078		9	—		400,078
Long-term portion of recourse debt	362,424		—			—		362,424
Long-term portion of non-recourse debt	219,182		—			—		219,182
Long-term portion of recourse debt from related parties	27,734		—			—		27,734
Long-term portion of non-recourse debt from related parties	32,643		—			—		32,643
Other long-term liabilities	58,417		(28,438)		8	—		29,979
Total liabilities	1,233,787		271,593			27,634		1,533,014

Redeemable noncontrolling interest	505		—			—		505

Stockholders’ deficit:
Preferred stock	—		—			—		—
Common stock	11		—			—		11
Additional paid-in capital	2,603,279		755		12	—		2,604,034
Accumulated other comprehensive loss	(148)		—			—		(148)
Accumulated deficit	(2,718,927)		(82,696)			(27,178)		(2,828,801)
Total stockholders’ deficit	(115,785)		(81,941)			(27,178)		(224,904)
Noncontrolling interest	104,072		—			—		104,072
Total liabilities, redeemable noncontrolling interest, stockholders' deficit and noncontrolling interest	$	1,222,579	$	189,652		$	456	$	1,412,687

¹ Accounts receivable — The correction of these misstatements resulted from the change of accounting for Managed Services Agreements, for which the amount recorded to accounts receivable represents amounts invoiced for capacity billings to end customers which have not yet been collected by the financing entity as of the period end.

² Inventories — The correction of these misstatements resulted from the change of accounting for inventory, including net capitalization of stock-based compensation cost of $2.0 million.

³ Deferred cost of revenue, current and non-current — The correction of these misstatements resulted from reclassifying deferred cost of revenue to property, plant and equipment, net, for the leased Energy Servers under the Managed Services Agreements and similar sale-leaseback arrangements of $7.4 million (short-term) and $55.4 million (long-term), net capitalization of stock-based compensation costs of $3.7 million into current deferred cost of revenue, and the correction of certain other immaterial misstatements identified to relieve installation deferred cost of revenue of $2.5 million.

⁴ Prepaid expenses and other current assets — The correction of these misstatements resulted from the change of accounting for Managed Services Agreements and similar arrangements, whereby prepaid property tax and insurance payments are now classified within prepaid expenses, rather than offset against deferred revenue.

⁵ Property, plant and equipment, net — The correction of these misstatements resulted from the change of accounting for Managed Services transactions and similar arrangements, whereby product and install cost of revenue are now recorded as property, plant and equipment, net in the cases where the risks of ownership have not completely transferred to the financing party of $230.9 million. This includes a net capitalization of stock-based compensation cost for these assets of $3.7 million.

⁶ Other long-term assets — The correction of these misstatements resulted from the change of accounting for Managed Services Agreements and similar arrangements, whereby the timing difference of capacity billings to end customers and the payments received from the financing entity is recorded within long term receivables and prepaid property tax and insurance payments are now classified within other long-term assets, rather than offset against long-term deferred revenue.

⁷ Accrued warranty — The correction of these misstatements resulted from the change of accounting for accrued warranty, which is now recorded on an as-incurred basis for our Managed Services Agreements and similar arrangements, reducing accrued warranty by $0.2 million and the change of accounting for the grid pricing escalation guarantees we provided in some of our sales arrangements, which are now recorded as derivative liabilities, reducing accrued warranty by $0.9 million.

⁸Accrued expense and other current liabilities and other long-term liabilities — The correction of these misstatements resulted from the change of accounting for Managed Services Agreements, for which historical accrued liabilities recorded at inception of the agreements, as well as subsequent reductions of those liabilities, were reversed.

⁹ Financing obligations, current and non-current — The correction of these misstatements resulted from the change of accounting for Managed Services Agreements and similar arrangements, whereby instead of recognizing the upfront proceeds received from the bank as revenue, the proceeds received are classified as financing obligations.

¹⁰Deferred revenue and customer deposits, current and non-current — The correction of these misstatements resulted from the change of accounting for the recognition of product and installation revenue from upfront or ratable recognition to recognition of the capacity payments received from the end customer as power is generated by the Energy Servers as electricity revenue.

¹¹ Derivative liabilities — The correction of these misstatements resulted from the change of accounting for embedded derivatives related to grid pricing escalation guarantees we provided in some of our sales arrangements. These are now recorded as derivative liabilities and were previously treated as an accrued liability.

¹² Additional paid-in capital — Relates to the correction of an unadjusted misstatement in the valuation of our 6% Notes derivative, resulting in a credit to additional paid-in capital and additional expense of $0.8 million recorded within other expense, net.

Bloom Energy Corporation

Condensed Consolidated Statement of Operations

(in thousands)


	Three Months Ended June 30, 2019
	_{As Previously Reported}		_{Restatement Impacts}		_{Restatement Reference}	ASC 606 Adoption Impacts		As Restated And Recast

Revenue:
Product	$	179,899	$	(22,757)	a	$	(13,061)	$	144,081
Installation	17,285		(5,900)		a	1,691		13,076
Service	23,659		(586)		a	(47)		23,026
Electricity	12,939		7,204		a	—		20,143
Total revenue	233,782		(22,039)			(11,417)		200,326
Cost of revenue:
Product	131,952		(19,005)		c, d	281		113,228
Installation	22,116		(4,431)		c	—		17,685
Service	19,599		920		b, d	(1,756)		18,763
Electricity	18,442		3,858		c	—		22,300
Total cost of revenue	192,109		(18,658)			(1,475)		171,976
Gross profit	41,673		(3,381)			(9,942)		28,350
Operating expenses:
Research and development	29,772		—			—		29,772
Sales and marketing	18,359		17		e	(182)		18,194
General and administrative	43,662		—			—		43,662
Total operating expenses	91,793		17			(182)		91,628
Loss from operations	(50,120)		(3,398)			(9,760)		(63,278)
Interest income	1,700		—			—		1,700
Interest expense	(16,725)		(5,997)		f	—		(22,722)
Interest expense to related parties	(1,606)		—			—		(1,606)
Other expense, net	(222)		—			—		(222)
Loss on revaluation of warrant liabilities and embedded derivatives	—		(540)		g	—		(540)
Loss before income taxes	(66,973)		(9,935)			(9,760)		(86,668)
Income tax provision	258		—			—		258
Net loss	(67,231)		(9,935)			(9,760)		(86,926)
Less: net loss attributable to noncontrolling interests and redeemable noncontrolling interests	(5,015)		—			—		(5,015)
Net loss attributable to Class A and Class B common stockholders	$	(62,216)	$	(9,935)		$	(9,760)	$	(81,911)

^aRevenue impacted by Managed Services restatements — The correction of these misstatements resulted from the change from upfront recognition of product and installation revenue to recognition of the capacity payments received from the end customer as power is generated by the Energy Servers as electricity revenue over the term of our Managed Services Agreements and similar sale-leaseback arrangements, which also impacted our service revenue allocation.

^bService cost of revenue impacted by grid pricing escalation guarantees — The correction of these misstatements resulted in a change in the accounting for our grid escalation guarantees that resulted in a decrease in service cost of revenue of $0.1 million.

c Cost of revenue impacted by Managed Services restatements — The correction of these misstatements resulted from the change from upfront recognition of product and installation cost of revenue to recognition of the depreciation expense on the capitalized Energy Servers over their useful life of 21 years for our Managed Services Agreements and similar sale-leaseback transactions, resulting in a decrease in product cost of revenue of $18.1 million and installation cost of revenue of $5.2 million, offset by an increase in electricity cost of revenue of $3.8 million, together with the correction of certain other immaterial misstatements identified to record installation cost of revenue of $0.8 million.

^dCost of revenue impacted by stock-based compensation allocation — The correction of these misstatements resulted from the capitalization of stock-based compensation costs, with a net benefit to product cost of revenue of $0.9 million, and an increase in service cost of revenue of $1.0 million due to the expensing of stock-based compensation related to field replacement units.

^e Sales and marketing and general and administrative expenses — The correction of these misstatements primarily resulted from the change of accounting for sales commission expense on an as earned basis, to accounting for the expense over the term of our Managed Services Agreements and similar sale-leaseback arrangements.

^fInterest expense — The correction of these misstatements resulted from the change of accounting for sales that should have been accounted for as financing transactions, in which the upfront consideration received from the financing party is accounted for as a financing obligation and interest expense is recognized over the term of the Managed Services Agreement using the effective interest method.

^g Gain (loss) on revaluation of warrant liabilities and embedded derivatives — The correction of these misstatements resulted from the change of accounting for the grid pricing escalation guarantees we provided in some of our sales arrangements which is now recorded as a derivative liability that needs to be fair valued each period end. The fair value increased in the period, resulting in a loss of $0.5 million.

Bloom Energy Corporation

Condensed Consolidated Statement of Operations

(in thousands)


	Six Months Ended June 30, 2019
	As Previously Reported		Restatement Impacts		Restatement Reference	ASC 606 Adoption Impacts		As Restated And Recast

Revenue:
Product	$	321,633	$	(70,928)	a	$	(15,698)	$	235,007
Installation	39,543		(17,095)		a	2,847		25,295
Service	46,949		(1,160)		a	704		46,493
Electricity	26,364		14,168		a	—		40,532
Total revenue	434,489		(75,015)			(12,147)		347,327
Cost of revenue:
Product	255,952		(53,985)		c, d	33		202,000
Installation	46,282		(12,837)		c	—		33,445
Service	47,156		2,251		b, d	(2,723)		46,684
Electricity	27,671		7,613		c	—		35,284
Total cost of revenue	377,061		(56,958)			(2,690)		317,413
Gross profit	57,428		(18,057)			(9,457)		29,914
Operating expenses:
Research and development	58,631		—			—		58,631
Sales and marketing	38,822		19		e	(274)		38,567
General and administrative	82,736		—			—		82,736
Total operating expenses	180,189		19			(274)		179,934
Loss from operations	(122,761)		(18,076)			(9,183)		(150,020)
Interest income	3,585		—			—		3,585
Interest expense	(32,687)		(11,835)		f	—		(44,522)
Interest expense to related parties	(3,218)		—			—		(3,218)
Other expense, net	43		—			—		43
Loss on revaluation of warrant liabilities and embedded derivatives	—		(1,080)		g	—		(1,080)
Loss before income taxes	(155,038)		(30,991)			(9,183)		(195,212)
Income tax provision	466		—			—		466
Net loss	(155,504)		(30,991)			(9,183)		(195,678)
Less: net loss attributable to noncontrolling interests and redeemable noncontrolling interests	(8,847)		—			—		(8,847)
Net loss attributable to Class A and Class B common stockholders	$	(146,657)	$	(30,991)		$	(9,183)	$	(186,831)

c Cost of revenue impacted by Managed Services restatements — The correction of these misstatements resulted from the change from upfront recognition of product and installation cost of revenue to recognition of the depreciation expense on the capitalized Energy Servers over their useful life of 21 years for our Managed Services Agreements and similar sale-leaseback transactions, resulting in a decrease in product cost of revenue of $55.6 million and installation cost of revenue of $14.4 million, offset by an increase in electricity cost of revenue of $7.5 million, together with the correction of certain other immaterial misstatements identified to record installation cost of revenue of $1.6 million.

^dCost of revenue impacted by stock-based compensation allocation — The correction of these misstatements resulted from the capitalization of stock-based compensation costs, with a net benefit to product cost of revenue of $1.6 million, and an increase in service cost of revenue of $2.4 million due to the expensing of stock-based compensation related to field replacement units.

Bloom Energy Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)


	Six Months Ended June 30, 2019
	As Previously Reported		Restatement Impacts		Restatement Reference	ASC 606 Adoption Impacts		As Restated And Recast

Cash flows from operating activities:
Net loss	$	(155,504)	$	(30,991)		$	(9,183)	$	(195,678)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	31,023		6,011		^A	—		37,034
Write-off of property, plant and equipment, net	2,704		—			—		2,704

Write-off of PPA II decommissioned costs	25,613		—			—		25,613
Debt make-whole payment	5,934		—			—		5,934

Revaluation of derivative contracts	555		1,081		^B	—		1,636
Stock-based compensation	115,100		4,086		^C	—		119,186
Loss on long-term REC purchase contract	60		—			—		60



Amortization of debt issuance cost	11,255		—			—		11,255
Changes in operating assets and liabilities:
Accounts receivable	46,591		(274)		^D	3,424		49,741
Inventories	27,542		(5,345)		^E	—		22,197
Deferred cost of revenue	19,198		(57,991)		^F	—		(38,793)
Customer financing receivable and other	2,713		—			—		2,713
Prepaid expenses and other current assets	8,477		1,752		^G	(2)		10,227
Other long-term assets	1,028		(1,029)		^H	(271)		(272)
Accounts payable	(5,461)		—			—		(5,461)
Accrued warranty	(6,843)		114		^I	33		(6,696)
Accrued expense and other current liabilities	7,213		(1,632)		^J	—		5,581

Deferred revenue and customer deposits	(25,411)		71,325		^K	5,999		51,913
Other long-term liabilities	3,419		1,303		^L	—		4,722
Net cash provided by operating activities	115,206		(11,590)			—		103,616
Cash flows from investing activities:
Purchase of property, plant and equipment	(18,882)		(4,737)		^M	—		(23,619)
Payments for acquisition of intangible assets	(970)		—			—		(970)

Proceeds from maturity of marketable securities	104,500		—			—		104,500
Net cash provided by investing activities	84,648		(4,737)			—		79,911
Cash flows from financing activities:


Repayment of debt	(83,997)		—			—		(83,997)
Repayment of debt to related parties	(1,220)		—			—		(1,220)
Debt make-whole payment	(5,934)		—			—		(5,934)

Proceeds from financing obligations	—		20,333		^N	—		20,333
Repayment of financing obligations	—		(4,006)		^N	—		(4,006)

Payments to noncontrolling and redeemable noncontrolling interests	(18,690)		—			—		(18,690)
Distributions to noncontrolling and redeemable noncontrolling interests	(7,753)		—			—		(7,753)
Proceeds from issuance of common stock	8,321		—			—		8,321




Net cash used in financing activities	(109,273)		16,327			—		(92,946)
Net increase in cash, cash equivalents, and restricted cash	90,581		—			—		90,581
Cash, cash equivalents, and restricted cash:
Beginning of period	280,485		—			—		280,485
End of period	$	371,066	$	—		$	—	$	371,066
						—		—
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	23,867	$	11,835	^N	$	—	$	35,702
Cash paid during the period for taxes	497		—			—		497

^A Depreciation and amortization — The correction of these misstatements resulted from the change of accounting for Energy Servers under our Managed Services Program and similar arrangements that were previously expensed as product and install cost of revenue, but are now recorded as property, plant and equipment, net and depreciated over their useful lives of 21 years.

^BRevaluation of derivative contracts — The correction of these misstatements resulted from the change of accounting for the grid pricing escalation guarantees we provided in some of our sales arrangements. These commitments were previously treated as an accrued liability. We now consider the commitments a derivative liability, with the initial value of recorded as a reduction in product revenue and then any changes in the value adjusted through other expense, net, each period thereafter.

^CStock-based compensation — The correction of these misstatements resulted from the change of accounting for stock-based compensation, including net capitalization of stock-based compensation cost into inventory of $4.7 million. The correction of this misstatement also resulted in the capitalization of $0.6 million of stock-based compensation costs related to assets under the Managed Services Programs now recorded as construction in progress within property, plant and equipment, net.

^DAccounts receivable — The correction of these misstatements resulted from the change of accounting for Managed Services Agreements, for which the amount recorded to accounts receivable represents amounts invoiced for capacity billings to end customers which have not yet been collected by the financing entity as of the period end.

^EInventories — The correction of these misstatements resulted from the change of accounting for inventories held for shipments planned to customers under our Managed Services Program and similar arrangements now being accounted for as construction in progress within property, plant and equipment, net.

^F Deferred cost of revenue, current and non-current — The correction of these misstatements resulted from the change of accounting for Managed Services Agreements and similar arrangements, whereby leased Energy Servers of $56.5 million previously classified as deferred cost of revenue is now recorded as construction in progress within property, plant and equipment, net, and the net release of stock-based compensation expenses of $1.5 million.

^GPrepaid expenses and other current assets — The correction of these misstatements resulted from the change of accounting for Managed Services Agreements and similar arrangements, whereby prepaid property tax and insurance payments are now classified within prepaid expenses.

^H Other long-term assets — The correction of these misstatements resulted from the change of accounting for Managed Services Agreements and similar arrangements, whereby the timing difference of capacity billings to end customers and the payments received from the financing entity is recorded within long term receivables and prepaid property tax and insurance payments are now classified within other long-term assets, rather than offset against long-term deferred revenue.

^IAccrued warranty — The correction of these misstatements resulted from the change of accounting for accrued warranty which is now recorded on an as-incurred basis for our Managed Services Agreements and similar arrangements. The correction of these misstatements resulted from the change of accounting for the grid pricing escalation guarantees we've provided in some of our sales arrangements. These commitments were previously treated as a contingent liability that was considered remote. We now maintain a $0.3 million accrual, with the initial value treated as a reduction in product revenue and then any changes in the value adjusted through other expense, net each period thereafter.

^JAccrued expense and other current liabilities and other long-term liabilities — The correction of these misstatements resulted from the change of accounting for Managed Services Agreements and similar arrangements whereby instead of recognizing the bank financing as revenue, the bank financing loan proceeds received and due are classified as a financing liability.

^KDeferred revenue and customer deposits, current and non-current — The correction of these misstatements resulted from the change of accounting for the recognition of product and installation revenue from upfront or ratable recognition to the recognition of the capacity payments received from the end customer as power is generated by the Energy Servers as electricity revenue.

^L Other long-term liabilities — The correction of these misstatements resulted from the change of accounting for Managed Services Agreements and similar arrangements whereby instead of recognizing the bank financing as revenue, the bank financing loan proceeds received and due beyond the next 12 months are classified as a financing obligation.

^MPurchase of property, plant and equipment — The correction of these misstatements resulted from the change of accounting for Managed Services Agreements and similar arrangements, whereby costs previously recognized as product and installation cost of revenue are now recorded as property, plant and equipment, net, in the cases where the risks of ownership have not completely transferred to the financing party.

^NProceeds and repayments from financing obligations — The correction of these misstatements resulted from the change of accounting for Managed Services Agreements and similar arrangements, whereby instead of recognizing the upfront proceeds received from the bank as revenue, the proceeds received and due are classified as proceeds from financing obligations and the capacity payments received from the end customer are classified as repayment of financing obligations and interest paid.