NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of First Solar, Inc. and its subsidiaries in this Quarterly Report have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim financial statements do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of First Solar management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement have been included. Certain prior period balances have been reclassified to conform to the current period presentation.
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Despite our intention to establish accurate estimates and reasonable assumptions, actual results could differ materially from such estimates and assumptions. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or for any other period. The condensed consolidated balance sheet at December 31, 2020 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These interim financial statements and notes should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2020 included in our Annual Report on Form 10-K, which has been filed with the SEC.
Unless expressly stated or the context otherwise requires, the terms “the Company,” “we,” “us,” “our,” and “First Solar” refer to First Solar, Inc. and its consolidated subsidiaries, and the term “condensed consolidated financial statements” refers to the accompanying unaudited condensed consolidated financial statements contained in this Quarterly Report.
2. Sales of Businesses
Sale of North American O&M operations
Following an evaluation of the long-term cost structure, competitiveness, and risk-adjusted returns of our O&M services business, we received an offer to purchase certain portions of the business and determined it was in the best interest of our stockholders to pursue the transaction. Accordingly, in August 2020, we entered into an agreement with a subsidiary of Clairvest Group, Inc. (“Clairvest”) for the sale of our North American O&M operations.
On March 31, 2021, we completed the transaction. Following certain customary post-closing adjustments, we received total consideration of $149.1 million. As a result of this transaction, we recognized a gain of $115.8 million, net of transaction costs and post-closing adjustments, during the nine months ended September 30, 2021, which was included in “Gain on sales of businesses, net” in our condensed consolidated statements of operations. The assets and liabilities associated with this business were classified as held for sale in our condensed consolidated balance sheet as of December 31, 2020.
Sale of U.S. project development business
Following a separate evaluation of the long-term cost structure, competitiveness, and risk-adjusted returns of our U.S. project development business, we determined it was also in the best interest of our stockholders to pursue the sale of this business. In January 2021, we entered into an agreement with Leeward Renewable Energy Development, LLC (“Leeward”), a subsidiary of the Ontario Municipal Employees Retirement System, for the sale of our U.S. project development business, which included developing, contracting for the construction of, and selling utility-scale photovoltaic (“PV”) solar power systems in the United States. The transaction included our approximately 10 GWAC utility-scale solar project pipeline, including the advanced-stage Horizon, Madison, Ridgely, Rabbitbrush, and Oak Trail projects, which are expected to commence construction in the next two years; the 30MWAC Barilla Solar project, which is operational; and certain other equipment. In addition, Leeward agreed to certain module purchase commitments.
On March 31, 2021, we completed the transaction for an aggregate purchase price of $284.0 million. Such purchase price included $151.4 million for the sale of the U.S. project development business and $132.6 million for the sale of 392 MWDC of solar modules, which is presented in “Net sales” on our condensed consolidated statements of operations for the nine months ended September 30, 2021.
During the nine months ended September 30, 2021, we recognized a gain of $31.5 million, net of transaction costs and post-closing adjustments, from the sale of our U.S. project development business, which is included in “Gain on sales of businesses, net” in our condensed consolidated statements of operations. The assets and liabilities associated with this business were classified as held for sale in our condensed consolidated balance sheet as of December 31, 2020.
3. Cash, Cash Equivalents, and Marketable Securities
Cash, cash equivalents, and marketable securities consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Cash and cash equivalents:
|
|
|
|
|
Cash
|
|
$
|
1,367,462
|
|
|
$
|
1,227,000
|
|
Money market funds
|
|
2
|
|
|
2
|
|
Total cash and cash equivalents
|
|
1,367,464
|
|
|
1,227,002
|
|
Marketable securities:
|
|
|
|
|
Foreign debt
|
|
147,445
|
|
|
214,254
|
|
U.S. debt
|
|
18,710
|
|
|
14,543
|
|
Time deposits
|
|
388,446
|
|
|
291,269
|
|
Total marketable securities
|
|
554,601
|
|
|
520,066
|
|
Total cash, cash equivalents, and marketable securities
|
|
$
|
1,922,065
|
|
|
$
|
1,747,068
|
|
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within our condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020 to the total of such amounts as presented in the condensed consolidated statements of cash flows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Line Item
|
|
September 30,
2021
|
|
December 31,
2020
|
Cash and cash equivalents
|
|
Cash and cash equivalents
|
|
$
|
1,367,464
|
|
|
$
|
1,227,002
|
|
Restricted cash – current
|
|
Prepaid expenses and other current assets
|
|
1,181
|
|
|
1,745
|
|
Restricted cash – noncurrent
|
|
Other assets
|
|
17,229
|
|
|
44,847
|
|
Total cash, cash equivalents, and restricted cash
|
|
|
|
$
|
1,385,874
|
|
|
$
|
1,273,594
|
|
During the nine months ended September 30, 2021, we sold marketable securities for proceeds of $5.5 million and realized gains of less than $0.1 million on such sales. During the three and nine months ended September 30, 2020, we sold marketable securities for proceeds of $27.6 million and $188.1 million, respectively, and realized gains of less than $0.1 million and $0.2 million, respectively, on such sales. See Note 8. “Fair Value Measurements” to our condensed consolidated financial statements for information about the fair value of our marketable securities.
The following tables summarize the unrealized gains and losses related to our available-for-sale marketable securities, by major security type, as of September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2021
|
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Allowance for Credit Losses
|
|
Fair
Value
|
Foreign debt
|
|
$
|
147,312
|
|
|
$
|
133
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
147,445
|
|
U.S. debt
|
|
19,009
|
|
|
13
|
|
|
309
|
|
|
3
|
|
|
18,710
|
|
Time deposits
|
|
388,576
|
|
|
—
|
|
|
—
|
|
|
130
|
|
|
388,446
|
|
Total
|
|
$
|
554,897
|
|
|
$
|
146
|
|
|
$
|
309
|
|
|
$
|
133
|
|
|
$
|
554,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2020
|
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Allowance for Credit Losses
|
|
Fair
Value
|
Foreign debt
|
|
$
|
213,949
|
|
|
$
|
367
|
|
|
$
|
46
|
|
|
$
|
16
|
|
|
$
|
214,254
|
|
U.S. debt
|
|
14,521
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
14,543
|
|
Time deposits
|
|
291,374
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|
291,269
|
|
Total
|
|
$
|
519,844
|
|
|
$
|
389
|
|
|
$
|
46
|
|
|
$
|
121
|
|
|
$
|
520,066
|
|
The following table presents the change in the allowance for credit losses related to our available-for-sale marketable securities for the nine months ended September 30, 2021 and 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
Allowance for credit losses, beginning of period
|
|
$
|
121
|
|
|
$
|
—
|
|
Cumulative-effect adjustment for the adoption of ASU 2016-13
|
|
—
|
|
|
207
|
|
Provision for credit losses, net
|
|
329
|
|
|
215
|
|
Sales and maturities of marketable securities
|
|
(317)
|
|
|
(374)
|
|
Allowance for credit losses, end of period
|
|
$
|
133
|
|
|
$
|
48
|
|
The contractual maturities of our marketable securities as of September 30, 2021 were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Fair
Value
|
One year or less
|
|
$
|
538,879
|
|
One year to two years
|
|
6,034
|
|
Two years to three years
|
|
—
|
|
Three years to four years
|
|
—
|
|
Four years to five years
|
|
4,813
|
|
More than five years
|
|
4,875
|
|
Total
|
|
$
|
554,601
|
|
4. Restricted Marketable Securities
Restricted marketable securities consisted of the following as of September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Foreign government obligations
|
|
$
|
71,603
|
|
|
$
|
149,700
|
|
Supranational debt
|
|
10,944
|
|
|
—
|
|
U.S. debt
|
|
145,151
|
|
|
—
|
|
U.S. government obligations
|
|
23,681
|
|
|
115,580
|
|
Total restricted marketable securities
|
|
$
|
251,379
|
|
|
$
|
265,280
|
|
Our restricted marketable securities represent long-term investments to fund the estimated future cost of collecting and recycling modules covered under our solar module collection and recycling program. We have established a trust under which estimated funds are put into custodial accounts with an established and reputable bank, for which First Solar, Inc.; First Solar Malaysia Sdn. Bhd.; and First Solar Manufacturing GmbH are grantors. As of September 30, 2021 and December 31, 2020, such custodial accounts also included noncurrent restricted cash balances of $0.6 million and $0.7 million, respectively, which were reported within “Other assets.” Trust funds may be disbursed for qualified module collection and recycling costs (including capital and facility related recycling costs), payments to customers for assuming collection and recycling obligations, and reimbursements of any overfunded amounts. Investments in the trust must meet certain investment quality criteria comparable to highly rated government or agency bonds. As necessary, we fund any incremental amounts for our estimated collection and recycling obligations on an annual basis based on the estimated costs of collecting and recycling covered modules, estimated rates of return on our restricted marketable securities, and an estimated solar module life of 25 years, less amounts already funded in prior years.
During the nine months ended September 30, 2021, we sold all our restricted marketable securities for proceeds of $258.9 million and realized gains of $11.7 million on such sales, and repurchased $255.6 million of restricted marketable securities as part of our ongoing management of the custodial accounts. During the nine months ended September 30, 2020, we sold certain restricted marketable securities for proceeds of $115.2 million, realized gains of $15.1 million on such sales, and repurchased $114.5 million of restricted marketable securities as part of our ongoing management of the custodial accounts. See Note 8. “Fair Value Measurements” to our condensed consolidated financial statements for information about the fair value of our restricted marketable securities.
The following table summarizes the unrealized gains and losses related to our restricted marketable securities, by major security type, as of September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2021
|
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Allowance for Credit Losses
|
|
Fair
Value
|
Foreign government obligations
|
|
$
|
68,081
|
|
|
$
|
5,280
|
|
|
$
|
1,747
|
|
|
$
|
11
|
|
|
$
|
71,603
|
|
Supranational debt
|
|
11,416
|
|
|
—
|
|
|
472
|
|
|
—
|
|
|
10,944
|
|
U.S. debt
|
|
150,500
|
|
|
—
|
|
|
5,312
|
|
|
37
|
|
|
145,151
|
|
U.S. government obligations
|
|
24,662
|
|
|
—
|
|
|
976
|
|
|
5
|
|
|
23,681
|
|
Total
|
|
$
|
254,659
|
|
|
$
|
5,280
|
|
|
$
|
8,507
|
|
|
$
|
53
|
|
|
$
|
251,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2020
|
|
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Allowance for Credit Losses
|
|
Fair
Value
|
Foreign government obligations
|
|
$
|
131,980
|
|
|
$
|
17,720
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
149,700
|
|
U.S. government obligations
|
|
115,648
|
|
|
133
|
|
|
188
|
|
|
13
|
|
|
115,580
|
|
Total
|
|
$
|
247,628
|
|
|
$
|
17,853
|
|
|
$
|
188
|
|
|
$
|
13
|
|
|
$
|
265,280
|
|
The following table presents the change in the allowance for credit losses related to our restricted marketable securities for the nine months ended September 30, 2021 and 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
Allowance for credit losses, beginning of period
|
|
$
|
13
|
|
|
$
|
—
|
|
Cumulative-effect adjustment for the adoption of ASU 2016-13
|
|
—
|
|
|
54
|
|
Provision for credit losses, net
|
|
69
|
|
|
(29)
|
|
Sales of restricted marketable securities
|
|
(29)
|
|
|
(25)
|
|
Allowance for credit losses, end of period
|
|
$
|
53
|
|
|
$
|
—
|
|
As of September 30, 2021, the contractual maturities of our restricted marketable securities were between 9 years and 18 years.
5. Consolidated Balance Sheet Details
Accounts receivable trade, net
Accounts receivable trade, net consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Accounts receivable trade, gross
|
|
$
|
249,771
|
|
|
$
|
269,095
|
|
Allowance for credit losses
|
|
(1,430)
|
|
|
(3,009)
|
|
Accounts receivable trade, net
|
|
$
|
248,341
|
|
|
$
|
266,086
|
|
At September 30, 2021 and December 31, 2020, $60.7 million and $24.4 million, respectively, of our trade accounts receivable were secured by letters of credit and surety bonds issued by creditworthy financial institutions.
Accounts receivable, unbilled, net
Accounts receivable, unbilled, net consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Accounts receivable, unbilled
|
|
$
|
25,053
|
|
|
$
|
26,673
|
|
Allowance for credit losses
|
|
(51)
|
|
|
(303)
|
|
Accounts receivable, unbilled, net
|
|
$
|
25,002
|
|
|
$
|
26,370
|
|
Allowance for credit losses
The following tables present the change in the allowances for credit losses related to our accounts receivable for the nine months ended September 30, 2021 and 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
Accounts receivable, trade
|
|
2021
|
|
2020
|
Allowance for credit losses, beginning of period
|
|
$
|
3,009
|
|
|
$
|
1,386
|
|
Cumulative-effect adjustment for the adoption of ASU 2016-13
|
|
—
|
|
|
171
|
|
Provision for credit losses, net
|
|
(1,458)
|
|
|
1,421
|
|
Writeoffs
|
|
(121)
|
|
|
(565)
|
|
Allowance for credit losses, end of period
|
|
$
|
1,430
|
|
|
$
|
2,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
Accounts receivable, unbilled
|
|
2021
|
|
2020
|
Allowance for credit losses, beginning of period
|
|
$
|
303
|
|
|
$
|
—
|
|
Cumulative-effect adjustment for the adoption of ASU 2016-13
|
|
—
|
|
|
459
|
|
Provision for credit losses, net
|
|
(252)
|
|
|
635
|
|
Writeoffs
|
|
—
|
|
|
(175)
|
|
Allowance for credit losses, end of period
|
|
$
|
51
|
|
|
$
|
919
|
|
Inventories
Inventories consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Raw materials
|
|
$
|
356,109
|
|
|
$
|
292,334
|
|
Work in process
|
|
61,195
|
|
|
64,709
|
|
Finished goods
|
|
466,581
|
|
|
411,773
|
|
Inventories
|
|
$
|
883,885
|
|
|
$
|
768,816
|
|
Inventories – current
|
|
$
|
647,439
|
|
|
$
|
567,587
|
|
Inventories – noncurrent
|
|
$
|
236,446
|
|
|
$
|
201,229
|
|
Prepaid expenses and other current assets
Prepaid expenses and other current assets consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Prepaid expenses
|
|
$
|
172,112
|
|
|
$
|
160,534
|
|
Derivative instruments (1)
|
|
6,682
|
|
|
3,315
|
|
Prepaid income taxes
|
|
6,206
|
|
|
71,051
|
|
Restricted cash
|
|
1,181
|
|
|
1,745
|
|
Other current assets
|
|
17,297
|
|
|
15,094
|
|
Prepaid expenses and other current assets
|
|
$
|
203,478
|
|
|
$
|
251,739
|
|
——————————
(1)See Note 6. “Derivative Financial Instruments” to our condensed consolidated financial statements for discussion of our derivative instruments.
Property, plant and equipment, net
Property, plant and equipment, net consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Land
|
|
$
|
17,856
|
|
|
$
|
14,498
|
|
Buildings and improvements
|
|
693,833
|
|
|
693,762
|
|
Machinery and equipment
|
|
2,507,719
|
|
|
2,184,236
|
|
Office equipment and furniture
|
|
139,034
|
|
|
143,685
|
|
Leasehold improvements
|
|
40,206
|
|
|
41,459
|
|
Construction in progress
|
|
281,715
|
|
|
419,766
|
|
Property, plant and equipment, gross
|
|
3,680,363
|
|
|
3,497,406
|
|
Accumulated depreciation
|
|
(1,174,442)
|
|
|
(1,095,121)
|
|
Property, plant and equipment, net
|
|
$
|
2,505,921
|
|
|
$
|
2,402,285
|
|
Depreciation of property, plant and equipment was $59.1 million and $174.7 million for the three and nine months ended September 30, 2021, respectively, and $49.7 million and $145.5 million for the three and nine months ended September 30, 2020, respectively.
PV solar power systems, net
PV solar power systems, net consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
PV solar power systems, gross
|
|
$
|
291,898
|
|
|
$
|
298,067
|
|
Accumulated depreciation
|
|
(61,475)
|
|
|
(54,671)
|
|
PV solar power systems, net
|
|
$
|
230,423
|
|
|
$
|
243,396
|
|
Depreciation of PV solar power systems was $3.0 million and $8.9 million for the three and nine months ended September 30, 2021, respectively, and $4.8 million and $16.4 million for the three and nine months ended September 30, 2020, respectively.
We evaluate our PV solar power systems for impairment under a held and used impairment model whenever events or changes in circumstances arise that may indicate that the carrying amount of a particular system may not be recoverable. Such events or changes may include a significant decrease in the market price of the asset, current-period operating or cash flow losses combined with a history of such losses or a projection of future losses associated with the use of the asset, and changes in expectations regarding our intent to hold the asset on a long-term basis or the timing of a potential asset disposition.
As of September 30, 2021 and December 31, 2020, the recoverability of our Luz del Norte PV solar power plant was based, in part, on the likelihood of our continued ownership and operation of the system. However, it is reasonably possible that our intent to hold the asset may change in the near term due to our evaluation of strategic sale opportunities for the system. The pursuit of such opportunities, which require coordination with the system’s lenders, may result in a determination that the carrying value of the system is not recoverable based on the probability-weighted undiscounted future cash flows, which in turn could result in a possible impairment of the system in future periods. Accordingly, any changes in our expected use of the asset or its disposition may result in impairment charges that could be material to our condensed consolidated financial statements and have a significant adverse impact on our results of operations.
Project assets
Project assets consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Project assets – development costs, including project acquisition and land costs
|
|
$
|
129,844
|
|
|
$
|
176,346
|
|
Project assets – construction costs
|
|
205,415
|
|
|
197,031
|
|
Project assets
|
|
$
|
335,259
|
|
|
$
|
373,377
|
|
Other assets
Other assets consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Operating lease assets (1)
|
|
$
|
238,508
|
|
|
$
|
226,664
|
|
Advanced payments for raw materials
|
|
89,252
|
|
|
97,883
|
|
Income tax receivables
|
|
39,888
|
|
|
36
|
|
Indirect tax receivables
|
|
24,785
|
|
|
14,849
|
|
Accounts receivable, unbilled, net
|
|
24,018
|
|
|
22,722
|
|
Accounts receivable trade, net
|
|
23,094
|
|
|
—
|
|
Restricted cash
|
|
17,229
|
|
|
44,847
|
|
Other
|
|
35,319
|
|
|
27,129
|
|
Other assets
|
|
$
|
492,093
|
|
|
$
|
434,130
|
|
——————————
(1)See Note 7. “Leases” to our condensed consolidated financial statements for discussion of our lease arrangements.
Goodwill
Goodwill for the relevant reporting unit consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2020
|
|
Acquisitions (Impairments)
|
|
September 30,
2021
|
Modules
|
|
$
|
407,827
|
|
|
$
|
—
|
|
|
$
|
407,827
|
|
Accumulated impairment losses
|
|
(393,365)
|
|
|
—
|
|
|
(393,365)
|
|
Goodwill
|
|
$
|
14,462
|
|
|
$
|
—
|
|
|
$
|
14,462
|
|
Intangible assets, net
The following tables summarize our intangible assets at September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
|
|
Net Amount
|
Developed technology
|
|
$
|
99,964
|
|
|
$
|
(59,518)
|
|
|
|
|
$
|
40,446
|
|
Power purchase agreements
|
|
6,486
|
|
|
(1,539)
|
|
|
|
|
4,947
|
|
Patents
|
|
8,173
|
|
|
(5,631)
|
|
|
|
|
2,542
|
|
Intangible assets, net
|
|
$
|
114,623
|
|
|
$
|
(66,688)
|
|
|
|
|
$
|
47,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
|
|
Net Amount
|
Developed technology
|
|
$
|
99,964
|
|
|
$
|
(52,115)
|
|
|
|
|
$
|
47,849
|
|
Power purchase agreements
|
|
6,486
|
|
|
(1,296)
|
|
|
|
|
5,190
|
|
Patents
|
|
8,173
|
|
|
(5,074)
|
|
|
|
|
3,099
|
|
Intangible assets, net
|
|
$
|
114,623
|
|
|
$
|
(58,485)
|
|
|
|
|
$
|
56,138
|
|
Amortization of intangible assets was $2.7 million and $8.2 million for the three and nine months ended September 30, 2021, respectively, and $2.7 million and $8.1 million for the three and nine months ended September 30, 2020, respectively.
Accrued expenses
Accrued expenses consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Accrued project costs
|
|
$
|
43,721
|
|
|
$
|
81,380
|
|
Accrued freight
|
|
42,091
|
|
|
26,580
|
|
Accrued inventory
|
|
39,514
|
|
|
25,704
|
|
Accrued compensation and benefits
|
|
29,030
|
|
|
51,685
|
|
Accrued property, plant and equipment
|
|
20,637
|
|
|
66,543
|
|
Product warranty liability (1)
|
|
16,752
|
|
|
22,278
|
|
Other
|
|
39,418
|
|
|
36,297
|
|
Accrued expenses
|
|
$
|
231,163
|
|
|
$
|
310,467
|
|
——————————
(1)See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our “Product Warranties.”
Other current liabilities
Other current liabilities consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Operating lease liabilities (1)
|
|
$
|
13,566
|
|
|
$
|
14,006
|
|
Derivative instruments (2)
|
|
1,720
|
|
|
5,280
|
|
Other taxes payable
|
|
1,221
|
|
|
30,041
|
|
Other
|
|
8,602
|
|
|
33,710
|
|
Other current liabilities
|
|
$
|
25,109
|
|
|
$
|
83,037
|
|
——————————
(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.
Other liabilities
Other liabilities consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Operating lease liabilities (1)
|
|
$
|
173,627
|
|
|
$
|
189,034
|
|
Deferred revenue
|
|
68,663
|
|
|
44,919
|
|
Product warranty liability (2)
|
|
41,789
|
|
|
72,818
|
|
Deferred tax liabilities, net
|
|
14,305
|
|
|
23,671
|
|
Other
|
|
43,433
|
|
|
41,784
|
|
Other liabilities
|
|
$
|
341,817
|
|
|
$
|
372,226
|
|
——————————
(1)See Note 7. “Leases” to our condensed consolidated financial statements for discussion of our lease arrangements.
(2)See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our “Product Warranties.”
6. Derivative Financial Instruments
As a global company, we are exposed in the normal course of business to interest rate, foreign currency, and commodity price risks that could affect our financial position, results of operations, and cash flows. We use derivative instruments to hedge against these risks and only hold such instruments for hedging purposes, not for speculative or trading purposes.
Depending on the terms of the specific derivative instruments and market conditions, some of our derivative instruments may be assets and others liabilities at any particular balance sheet date. We report all of our derivative instruments at fair value and account for changes in the fair value of derivative instruments within “Accumulated other comprehensive loss” if the derivative instruments qualify for hedge accounting. For those derivative instruments that do not qualify for hedge accounting (i.e., “economic hedges”), we record the changes in fair value directly to earnings. See Note 8. “Fair Value Measurements” to our condensed consolidated financial statements for information about the techniques we use to measure the fair value of our derivative instruments.
The following tables present the fair values of derivative instruments included in our condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
|
|
Prepaid Expenses and Other Current Assets
|
|
Other Assets
|
|
Other Current Liabilities
|
|
Other Liabilities
|
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
Foreign exchange forward contracts
|
|
$
|
628
|
|
|
$
|
18
|
|
|
$
|
36
|
|
|
$
|
—
|
|
Commodity swap contracts
|
|
633
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total derivatives designated as hedging instruments
|
|
$
|
1,261
|
|
|
$
|
18
|
|
|
$
|
36
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
Foreign exchange forward contracts
|
|
$
|
5,421
|
|
|
$
|
—
|
|
|
$
|
1,684
|
|
|
$
|
—
|
|
Interest rate swap contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
595
|
|
Total derivatives not designated as hedging instruments
|
|
$
|
5,421
|
|
|
$
|
—
|
|
|
$
|
1,684
|
|
|
$
|
595
|
|
Total derivative instruments
|
|
$
|
6,682
|
|
|
$
|
18
|
|
|
$
|
1,720
|
|
|
$
|
595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
Prepaid Expenses and Other Current Assets
|
|
Other Current Liabilities
|
|
Other Liabilities
|
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
Foreign exchange forward contracts
|
|
$
|
—
|
|
|
$
|
2,504
|
|
|
$
|
341
|
|
Commodity swap contracts
|
|
1,478
|
|
|
—
|
|
|
—
|
|
Total derivatives designated as hedging instruments
|
|
$
|
1,478
|
|
|
$
|
2,504
|
|
|
$
|
341
|
|
|
|
|
|
|
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
Foreign exchange forward contracts
|
|
$
|
1,837
|
|
|
$
|
2,776
|
|
|
$
|
—
|
|
Total derivatives not designated as hedging instruments
|
|
$
|
1,837
|
|
|
$
|
2,776
|
|
|
$
|
—
|
|
Total derivative instruments
|
|
$
|
3,315
|
|
|
$
|
5,280
|
|
|
$
|
341
|
|
The following table presents the pretax amounts related to derivative instruments designated as cash flow hedges affecting accumulated other comprehensive income (loss) and our condensed consolidated statements of operations for the nine months ended September 30, 2021 and 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Exchange Forward Contracts
|
|
Commodity Swap Contracts
|
|
Total
|
Balance as of December 31, 2020
|
|
$
|
(3,644)
|
|
|
$
|
1,472
|
|
|
$
|
(2,172)
|
|
Amounts recognized in other comprehensive income (loss)
|
|
2,268
|
|
|
1,531
|
|
|
3,799
|
|
|
|
|
|
|
|
|
Amounts reclassified to earnings impacting:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
1,913
|
|
|
(883)
|
|
|
1,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of September 30, 2021
|
|
$
|
537
|
|
|
$
|
2,120
|
|
|
$
|
2,657
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2019
|
|
$
|
(962)
|
|
|
$
|
—
|
|
|
$
|
(962)
|
|
Amounts recognized in other comprehensive income (loss)
|
|
(2,129)
|
|
|
(228)
|
|
|
(2,357)
|
|
Amounts reclassified to earnings impacting:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
647
|
|
|
—
|
|
|
647
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of September 30, 2020
|
|
$
|
(2,444)
|
|
|
$
|
(228)
|
|
|
$
|
(2,672)
|
|
During the three and nine months ended September 30, 2021, we recognized unrealized gains of less than $0.1 million and unrealized losses of less than $0.1 million, respectively, within “Cost of sales” for amounts excluded from effectiveness testing for our foreign exchange forward contracts designated as cash flow hedges. During the three and nine months ended September 30, 2020, we recognized unrealized gains of $0.1 million and $1.2 million, respectively, within “Cost of sales” for amounts excluded from effectiveness testing for our foreign exchange forward contracts designated as cash flow hedges.
The following table presents gains and losses related to derivative instruments not designated as hedges affecting our condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of Gain (Loss) Recognized in Income
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
Income Statement Line Item
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Foreign exchange forward contracts
|
|
Cost of sales
|
|
$
|
103
|
|
|
$
|
(195)
|
|
|
$
|
(174)
|
|
|
$
|
(73)
|
|
Foreign exchange forward contracts
|
|
Foreign currency loss, net
|
|
1,802
|
|
|
(2,598)
|
|
|
10,821
|
|
|
(2,405)
|
|
Interest rate swap contracts
|
|
Interest expense, net
|
|
96
|
|
|
(5,878)
|
|
|
(595)
|
|
|
(7,259)
|
|
Interest Rate Risk
We use interest rate swap contracts to mitigate our exposure to interest rate fluctuations associated with certain of our debt instruments. We do not use such swap contracts for speculative or trading purposes. During the nine months ended September 30, 2021 and 2020, all of our interest rate swap contracts related to project specific debt facilities. Such swap contracts did not qualify for accounting as cash flow hedges in accordance with Accounting Standards Codification (“ASC”) 815 due to our expectation to sell the associated projects before the maturity of their project specific debt financings and corresponding swap contracts. Accordingly, changes in the fair values of these swap contracts were recorded directly to “Interest expense, net.”
In June 2021, FS Japan Project B4 GK, our indirect wholly-owned subsidiary and project company, entered into an interest rate swap contract to hedge a portion of the floating rate term loan facility under the project’s Ikeda Credit Facility (as defined in Note 9. “Debt” to our condensed consolidated financial statements). Such swap had an initial notional value of ¥0.7 billion and entitled the project to receive a six-month floating Tokyo Interbank Offered Rate (“TIBOR”) plus 0.70% interest rate while requiring the project to pay a fixed rate of 1.12%. The notional amount of the interest rate swap contract proportionately adjusts with scheduled draws and principal payments on the underlying hedged debt. As of September 30, 2021, the notional value of the interest rate swap contract was ¥1.0 billion ($8.6 million).
Foreign Currency Risk
Cash Flow Exposure
We expect certain of our subsidiaries to have future cash flows that will be denominated in currencies other than the subsidiaries’ functional currencies. Changes in the exchange rates between the functional currencies of our subsidiaries and the other currencies in which they transact will cause fluctuations in the cash flows we expect to receive or pay when these cash flows are realized or settled. Accordingly, we enter into foreign exchange forward contracts to hedge a portion of these forecasted cash flows. As of September 30, 2021 and December 31, 2020, these foreign exchange forward contracts hedged our forecasted cash flows for periods up to 14 months and 20 months, respectively. These foreign exchange forward contracts qualify for accounting as cash flow hedges in accordance with ASC 815, and we designated them as such. We report unrealized gains or losses on such contracts in “Accumulated other comprehensive loss” and subsequently reclassify applicable amounts into earnings when the hedged transaction occurs and impacts earnings. We determined that these derivative financial instruments were highly effective as cash flow hedges as of September 30, 2021 and December 31, 2020.
As of September 30, 2021 and December 31, 2020, the notional values associated with our foreign exchange forward contracts qualifying as cash flow hedges were as follows (notional amounts and U.S. dollar equivalents in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
Currency
|
|
Notional Amount
|
|
USD Equivalent
|
U.S. dollar (1)
|
|
$39.8
|
|
$39.8
|
British pound
|
|
GBP 10.6
|
|
$14.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
Currency
|
|
Notional Amount
|
|
USD Equivalent
|
U.S. dollar (1)
|
|
$43.4
|
|
$43.4
|
——————————
(1)These derivative instruments represent hedges of outstanding payables denominated in U.S. dollars at certain of our foreign subsidiaries whose functional currencies are other than the U.S. dollar.
In the following 12 months, we expect to reclassify to earnings $0.5 million of net unrealized gains related to foreign exchange forward contracts that are included in “Accumulated other comprehensive loss” at September 30, 2021 as we realize the earnings effects of the related forecasted transactions. The amount we ultimately record to earnings will depend on the actual exchange rates when we realize the related forecasted transactions.
Transaction Exposure and Economic Hedging
Many of our subsidiaries have assets and liabilities (primarily cash, receivables, deferred taxes, payables, accrued expenses, operating lease liabilities, and solar module collection and recycling liabilities) that are denominated in currencies other than the subsidiaries’ functional currencies. Changes in the exchange rates between the functional currencies of our subsidiaries and the other currencies in which these assets and liabilities are denominated will create fluctuations in our reported condensed consolidated statements of operations and cash flows. We may enter into foreign exchange forward contracts or other financial instruments to economically hedge assets and liabilities against the effects of currency exchange rate fluctuations. The gains and losses on such foreign exchange forward contracts will economically offset all or part of the transaction gains and losses that we recognize in earnings on the related foreign currency denominated assets and liabilities.
We also enter into foreign exchange forward contracts to economically hedge balance sheet and other exposures related to transactions between certain of our subsidiaries and transactions with third parties. Such contracts are considered economic hedges and do not qualify for hedge accounting. Accordingly, we recognize gains or losses from the fluctuations in foreign exchange rates and the fair value of these derivative contracts in “Foreign currency loss, net” on our condensed consolidated statements of operations.
As of September 30, 2021 and December 31, 2020, the notional values of our foreign exchange forward contracts that do not qualify for hedge accounting were as follows (notional amounts and U.S. dollar equivalents in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
Transaction
|
|
Currency
|
|
Notional Amount
|
|
USD Equivalent
|
Purchase
|
|
Australian dollar
|
|
AUD 3.2
|
|
$2.3
|
|
|
|
|
|
|
|
Purchase
|
|
Brazilian real
|
|
BRL 2.6
|
|
$0.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
|
|
Chilean peso
|
|
CLP 985.0
|
|
$1.2
|
Sell
|
|
Chilean peso
|
|
CLP 4,240.6
|
|
$5.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
|
|
Euro
|
|
€86.4
|
|
$100.6
|
Sell
|
|
Euro
|
|
€32.6
|
|
$37.9
|
Purchase
|
|
British pound
|
|
GBP 2.5
|
|
$3.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sell
|
|
Indian rupee
|
|
INR 1,830.0
|
|
$24.7
|
Purchase
|
|
Japanese yen
|
|
¥151.8
|
|
$1.4
|
Sell
|
|
Japanese yen
|
|
¥27,325.6
|
|
$244.9
|
Purchase
|
|
Malaysian ringgit
|
|
MYR 30.5
|
|
$7.3
|
Sell
|
|
Malaysian ringgit
|
|
MYR 26.8
|
|
$6.4
|
|
|
|
|
|
|
|
Sell
|
|
Mexican peso
|
|
MXN 34.6
|
|
$1.7
|
Purchase
|
|
Singapore dollar
|
|
SGD 5.5
|
|
$4.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
Transaction
|
|
Currency
|
|
Notional Amount
|
|
USD Equivalent
|
Purchase
|
|
Australian dollar
|
|
AUD 3.2
|
|
$2.5
|
Purchase
|
|
Brazilian real
|
|
BRL 2.6
|
|
$0.5
|
Sell
|
|
Canadian dollar
|
|
CAD 8.9
|
|
$7.0
|
Purchase
|
|
Chilean peso
|
|
CLP 2,006.0
|
|
$2.8
|
Sell
|
|
Chilean peso
|
|
CLP 4,476.7
|
|
$6.3
|
Purchase
|
|
Euro
|
|
€140.0
|
|
$172.1
|
Sell
|
|
Euro
|
|
€63.6
|
|
$78.2
|
Sell
|
|
Indian rupee
|
|
INR 619.2
|
|
$8.4
|
Purchase
|
|
Japanese yen
|
|
¥1,593.7
|
|
$15.5
|
Sell
|
|
Japanese yen
|
|
¥20,656.6
|
|
$200.5
|
Purchase
|
|
Malaysian ringgit
|
|
MYR 69.3
|
|
$17.2
|
Sell
|
|
Malaysian ringgit
|
|
MYR 24.9
|
|
$6.2
|
Sell
|
|
Mexican peso
|
|
MXN 34.6
|
|
$1.7
|
Purchase
|
|
Singapore dollar
|
|
SGD 2.9
|
|
$2.2
|
Commodity Price Risk
We use commodity swap contracts to mitigate our exposure to commodity price fluctuations for certain raw materials used in the production of our modules. In August 2020, we entered into a commodity swap contract to hedge a portion of our forecasted cash flows for purchases of aluminum frames for a one-year period. Such swap had an initial notional value based on metric tons of forecasted aluminum purchases, equivalent to $24.9 million, and entitles us to receive a three-month average London Metals Exchange price for aluminum while requiring us to pay certain fixed prices. The notional amount of the commodity swap contract proportionately adjusted with forecasted purchases of aluminum frames.
This commodity swap contract qualifies for accounting as a cash flow hedge in accordance with ASC 815, and we designated it as such. We report unrealized gains or losses on such contract in “Accumulated other comprehensive loss” and subsequently reclassify applicable amounts into earnings when the hedged transaction occurs and impacts earnings. We determined that this derivative financial instrument was highly effective as a cash flow hedge as of September 30, 2021 and December 31, 2020. In the following 12 months, we expect to reclassify into earnings $2.1 million of net unrealized gains related to this commodity swap contract that are included in “Accumulated other comprehensive loss” at September 30, 2021 as we realize the earnings effects of the related forecasted transactions.
7. Leases
Our lease arrangements include land associated with our systems projects, our corporate and administrative offices, land for our international manufacturing facilities, and certain of our manufacturing equipment. Such leases primarily relate to assets located in the United States, Japan, Malaysia, India, and Vietnam.
The following table presents certain quantitative information related to our lease arrangements for the three and nine months ended September 30, 2021 and 2020, and as of September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Operating lease cost
|
|
$
|
4,622
|
|
|
$
|
4,798
|
|
|
$
|
13,171
|
|
|
$
|
13,694
|
|
Variable lease cost
|
|
575
|
|
|
628
|
|
|
1,575
|
|
|
1,919
|
|
Short-term lease cost
|
|
104
|
|
|
1,112
|
|
|
711
|
|
|
2,817
|
|
Total lease cost
|
|
$
|
5,301
|
|
|
$
|
6,538
|
|
|
$
|
15,457
|
|
|
$
|
18,430
|
|
|
|
|
|
|
|
|
|
|
Payments of amounts included in the measurement of operating lease liabilities
|
|
|
|
|
|
$
|
16,813
|
|
|
$
|
15,756
|
|
Lease assets obtained in exchange for operating lease liabilities
|
|
|
|
|
|
$
|
19,769
|
|
|
$
|
93,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Operating lease assets
|
|
|
|
|
|
$
|
238,508
|
|
|
$
|
226,664
|
|
Operating lease liabilities – current
|
|
|
|
|
|
13,566
|
|
|
14,006
|
|
Operating lease liabilities – noncurrent
|
|
|
|
|
|
173,627
|
|
|
189,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average remaining lease term
|
|
20 years
|
|
20 years
|
Weighted-average discount rate
|
|
2.6
|
%
|
|
2.9
|
%
|
As of September 30, 2021, the future payments associated with our lease liabilities were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Total Lease Liabilities
|
Remainder of 2021
|
|
$
|
3,292
|
|
2022
|
|
17,051
|
|
2023
|
|
17,100
|
|
2024
|
|
16,608
|
|
2025
|
|
15,979
|
|
2026
|
|
14,489
|
|
Thereafter
|
|
140,192
|
|
Total future payments
|
|
224,711
|
|
Less: interest
|
|
(37,518)
|
|
Total lease liabilities
|
|
$
|
187,193
|
|
8. Fair Value Measurements
The following is a description of the valuation techniques that we use to measure the fair value of assets and liabilities that we measure and report at fair value on a recurring basis:
•Cash Equivalents. At September 30, 2021 and December 31, 2020, our cash equivalents consisted of money market funds. We value our cash equivalents using observable inputs that reflect quoted prices for securities with identical characteristics and classify the valuation techniques that use these inputs as Level 1.
•Marketable Securities and Restricted Marketable Securities. At September 30, 2021 and December 31, 2020, our marketable securities consisted of foreign debt, U.S. debt, and time deposits, and our restricted marketable securities consisted of foreign and U.S. government obligations, supranational debt, and U.S. debt. We value our marketable securities and restricted marketable securities using observable inputs that reflect quoted prices for securities with identical characteristics or quoted prices for securities with similar characteristics and other observable inputs (such as interest rates that are observable at commonly quoted intervals). Accordingly, we classify the valuation techniques that use these inputs as either Level 1 or Level 2 depending on the inputs used. We also consider the effect of our counterparties’ credit standing in these fair value measurements.
•Derivative Assets and Liabilities. At September 30, 2021 and December 31, 2020, our derivative assets and liabilities consisted of foreign exchange forward contracts involving major currencies, interest rate swap contracts involving major interest rates, and commodity swap contracts involving major commodity prices. Since our derivative assets and liabilities are not traded on an exchange, we value them using standard industry valuation models. As applicable, these models project future cash flows and discount the amounts to a present value using market-based observable inputs, including interest rate curves, credit risk, foreign exchange rates, forward and spot prices for currencies, and forward prices for commodities. These inputs are observable in active markets over the contract term of the derivative instruments we hold, and accordingly, we classify the valuation techniques as Level 2. In evaluating credit risk, we consider the effect of our counterparties’ and our own credit standing in the fair value measurements of our derivative assets and liabilities, respectively.
At September 30, 2021 and December 31, 2020, the fair value measurements of our assets and liabilities measured on a recurring basis were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at Reporting
Date Using
|
|
|
September 30,
2021
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
Assets:
|
|
|
|
|
|
|
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
|
Money market funds
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Marketable securities:
|
|
|
|
|
|
|
|
|
Foreign debt
|
|
147,445
|
|
|
—
|
|
|
147,445
|
|
|
—
|
|
U.S. debt
|
|
18,710
|
|
|
—
|
|
|
18,710
|
|
|
—
|
|
Time deposits
|
|
388,446
|
|
|
388,446
|
|
|
—
|
|
|
—
|
|
Restricted marketable securities
|
|
251,379
|
|
|
—
|
|
|
251,379
|
|
|
—
|
|
Derivative assets
|
|
6,700
|
|
|
—
|
|
|
6,700
|
|
|
—
|
|
Total assets
|
|
$
|
812,682
|
|
|
$
|
388,448
|
|
|
$
|
424,234
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Derivative liabilities
|
|
$
|
2,315
|
|
|
$
|
—
|
|
|
$
|
2,315
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at Reporting
Date Using
|
|
|
December 31,
2020
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
Assets:
|
|
|
|
|
|
|
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
|
Money market funds
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Marketable securities:
|
|
|
|
|
|
|
|
|
Foreign debt
|
|
214,254
|
|
|
—
|
|
|
214,254
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
U.S. debt
|
|
14,543
|
|
|
—
|
|
|
14,543
|
|
|
—
|
|
Time deposits
|
|
291,269
|
|
|
291,269
|
|
|
—
|
|
|
—
|
|
Restricted marketable securities
|
|
265,280
|
|
|
—
|
|
|
265,280
|
|
|
—
|
|
Derivative assets
|
|
3,315
|
|
|
—
|
|
|
3,315
|
|
|
—
|
|
Total assets
|
|
$
|
788,663
|
|
|
$
|
291,271
|
|
|
$
|
497,392
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Derivative liabilities
|
|
$
|
5,621
|
|
|
$
|
—
|
|
|
$
|
5,621
|
|
|
$
|
—
|
|
Fair Value of Financial Instruments
At September 30, 2021 and December 31, 2020, the carrying values and fair values of our financial instruments not measured at fair value were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
|
December 31, 2020
|
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
Assets:
|
|
|
|
|
|
|
|
|
Accounts receivable, unbilled, net - noncurrent
|
|
$
|
24,018
|
|
|
$
|
21,498
|
|
|
$
|
22,722
|
|
|
$
|
22,096
|
|
Accounts receivable trade, net - noncurrent
|
|
23,094
|
|
|
20,111
|
|
|
—
|
|
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt, including current maturities (1)
|
|
$
|
287,185
|
|
|
$
|
290,457
|
|
|
$
|
287,149
|
|
|
$
|
297,076
|
|
——————————
(1)Excludes unamortized discounts and issuance costs.
The carrying values in our condensed consolidated balance sheets of our trade accounts receivable, current unbilled accounts receivable, restricted cash, accounts payable, and accrued expenses approximated their fair values due to their nature and relatively short maturities; therefore, we excluded them from the foregoing table. The fair value measurements for our noncurrent unbilled accounts receivable, noncurrent trade accounts receivable, and long-term debt are considered Level 2 measurements under the fair value hierarchy.
Credit Risk
We have certain financial and derivative instruments that subject us to credit risk. These consist primarily of cash, cash equivalents, marketable securities, accounts receivable, restricted cash, restricted marketable securities, foreign exchange forward contracts, interest rate swap contracts, and commodity swap contracts. We are exposed to credit losses in the event of nonperformance by the counterparties to our financial and derivative instruments. We place these instruments with various high-quality financial institutions and limit the amount of credit risk from any one counterparty. We continuously evaluate the credit standing of our counterparty financial institutions. Our net sales are primarily concentrated among a limited number of customers. We monitor the financial condition of our customers and perform credit evaluations whenever considered necessary. Depending upon the sales arrangement,
we may require some form of payment security from our customers, including advance payments, parent guarantees, letters of credit, bank guarantees, or surety bonds. We also have power purchase agreements (“PPAs”) that subject us to credit risk in the event our off-take counterparties are unable to fulfill their contractual obligations, which may adversely affect our project assets and certain receivables. Accordingly, we closely monitor the credit standing of existing and potential off-take counterparties to limit such risks.
9. Debt
Our long-term debt consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance (USD)
|
Loan Agreement
|
|
Currency
|
|
September 30,
2021
|
|
December 31,
2020
|
Revolving Credit Facility
|
|
USD
|
|
$
|
—
|
|
|
$
|
—
|
|
Luz del Norte Credit Facilities
|
|
USD
|
|
184,546
|
|
|
186,230
|
|
Japan Credit Facility
|
|
JPY
|
|
33,870
|
|
|
13,813
|
|
Tochigi Credit Facility
|
|
JPY
|
|
—
|
|
|
39,400
|
|
Kyoto Credit Facility
|
|
JPY
|
|
44,053
|
|
|
47,706
|
|
Ikeda Credit Facility
|
|
JPY
|
|
24,716
|
|
|
—
|
|
Long-term debt principal
|
|
|
|
287,185
|
|
|
287,149
|
|
Less: unamortized discounts and issuance costs
|
|
|
|
(8,573)
|
|
|
(7,918)
|
|
Total long-term debt
|
|
|
|
278,612
|
|
|
279,231
|
|
Less: current portion
|
|
|
|
(37,129)
|
|
|
(41,540)
|
|
Noncurrent portion
|
|
|
|
$
|
241,483
|
|
|
$
|
237,691
|
|
Revolving Credit Facility
On June 30, 2021, we terminated our Second Amended and Restated Credit Agreement (the “Revolving Credit Facility”) with several financial institutions as lenders and JPMorgan Chase Bank, N.A. as administrative agent, which was set to mature in July 2022. The Revolving Credit Facility provided us with an aggregate borrowing capacity of $500.0 million. Subject to certain conditions, we had the right to increase the aggregate commitments under the Revolving Credit Facility to $750.0 million. Borrowings under the Revolving Credit Facility bore interest at (i) London Interbank Offered Rate (“LIBOR”), adjusted for Eurocurrency reserve requirements, plus a margin of 2.00% or (ii) a base rate as defined in the credit agreement plus a margin of 1.00% depending on the type of borrowing requested.
In addition to paying interest on outstanding principal under the Revolving Credit Facility, we paid a commitment fee at a rate of 0.30% per annum, based on the average daily unused commitments under the facility. We also paid a letter of credit fee based on the applicable margin for Eurocurrency revolving loans on the face amount of each letter of credit and a fronting fee of 0.125%.
Prior to the termination, we had no borrowings under the Revolving Credit Facility and had $3.3 million in issued and outstanding letters of credits, which were moved to a bilateral facility upon such termination. As of December 31, 2020, we had no borrowings under the Revolving Credit Facility and had issued $4.3 million of letters of credit using availability under the facility.
Luz del Norte Credit Facilities
In August 2014, Parque Solar Fotovoltaico Luz del Norte SpA (“Luz del Norte”), our indirect wholly-owned subsidiary and project company, entered into credit facilities (the “Luz del Norte Credit Facilities”) with the U.S. International Development Finance Corporation (“DFC”) and the International Finance Corporation (“IFC”) to provide limited-recourse senior secured debt financing for the design, development, financing, construction, testing, commissioning, operation, and maintenance of a 141 MWAC PV solar power plant located near Copiapó, Chile.
In March 2017, we amended the terms of the DFC and IFC credit facilities. Such amendments (i) allowed for the capitalization of accrued and unpaid interest through March 15, 2017, along with the capitalization of certain future interest payments as variable rate loans under the credit facilities, (ii) allowed for the conversion of certain fixed rate loans to variable rate loans upon scheduled repayment, (iii) extended the maturity of the DFC and IFC loans until June 2037, and (iv) canceled the remaining borrowing capacity under the DFC and IFC credit facilities with the exception of the capitalization of certain future interest payments. As of September 30, 2021 and December 31, 2020, the balance outstanding on the DFC loans was $138.2 million and $139.4 million, respectively. As of September 30, 2021 and December 31, 2020, the balance outstanding on the IFC loans was $46.3 million and $46.8 million, respectively. The DFC and IFC loans are secured by liens over all of Luz del Norte’s assets and by a pledge of all of the equity interests in the entity. In October 2021, we received a waiver for technical noncompliance related to the credit facilities as of September 30, 2021.
Japan Credit Facility
In September 2015, First Solar Japan GK, our wholly-owned subsidiary, entered into a construction loan facility with Mizuho Bank, Ltd. for borrowings up to ¥4.0 billion ($33.4 million) for the development and construction of utility-scale PV solar power plants in Japan (the “Japan Credit Facility”). Borrowings under the facility generally mature within 12 months following the completion of construction activities for each financed project. The facility is guaranteed by First Solar, Inc. and secured by pledges of certain projects’ cash accounts and other rights in the projects.
Tochigi Credit Facility
In June 2017, First Solar Japan GK, our wholly-owned subsidiary, entered into a term loan facility with Mizuho Bank, Ltd. for borrowings up to ¥7.0 billion ($62.2 million) for the development of utility-scale PV solar power plants in Japan (the “Tochigi Credit Facility”). In March 2021, the credit facility matured and we repaid the remaining $36.8 million principal balance.
Kyoto Credit Facility
In July 2020, First Solar Japan GK, our wholly-owned subsidiary, entered into a construction loan facility with Mizuho Bank, Ltd. for borrowings up to ¥15.0 billion ($142.8 million), which are intended to be used for the construction of a 38 MWAC PV solar power plant located in Kyoto, Japan (the “Kyoto Credit Facility”). Borrowings under the facility generally mature within 12 months following the completion of construction activities at the project. The facility is guaranteed by First Solar, Inc. and First Solar Japan GK, our wholly-owned subsidiary, and secured by pledges of the project’s cash accounts and certain other assets.
Ikeda Credit Facility
In March 2021, FS Japan Project B4 GK (“Ikeda”), our indirect wholly-owned subsidiary and project company, entered into a credit agreement (the “Ikeda Credit Facility”) with MUFG Bank, Ltd.; Japan Post Insurance Co., Ltd.; The Shizuoka Bank, Ltd.; The Hyakugo Bank, Ltd.; The Iyo Bank, Ltd.; and The Yamagata Bank, Ltd. for aggregate borrowings up to ¥9.8 billion ($88.6 million) for the development and construction of a 21 MWAC PV solar power plant located in Tochigi, Japan. The credit facility consists of a ¥4.7 billion ($43.1 million) fixed rate term loan facility, a ¥3.8 billion ($34.1 million) variable rate term loan facility, a ¥0.9 billion ($8.2 million) consumption tax facility, and a ¥0.4 billion ($3.2 million) debt service reserve facility. The fixed rate and variable rate term loan facilities mature in April 2040, the consumption tax facility matures in May 2024, and the debt service reserve facility is expected to mature in October 2039. The credit facility is secured by pledges of certain of Ikeda’s assets, accounts, material project documents, and by the equity interests in the entity.
Variable Interest Rate Risk
Certain of our long-term debt agreements bear interest at LIBOR, TIBOR, or equivalent variable rates. An increase in these variable rates would increase the cost of borrowing under certain project specific debt financings. Our long-term debt borrowing rates as of September 30, 2021 were as follows:
|
|
|
|
|
|
|
|
|
Loan Agreement
|
|
September 30, 2021
|
Luz del Norte Credit Facilities (1)
|
|
Fixed rate loans at bank rate plus 3.50%
|
|
Variable rate loans at 91-Day U.S. Treasury Bill Yield or LIBOR plus 3.50%
|
Japan Credit Facility
|
|
1-month TIBOR plus 0.55%
|
Kyoto Credit Facility
|
|
1-month TIBOR plus 0.60%
|
Ikeda Credit Facility (2)
|
|
Fixed rate term loan facility at 1.20%
|
|
Variable rate term loan facility at 6-month TIBOR plus 0.70% (3)
|
|
Consumption tax facility at 3-month TIBOR plus 0.50%
|
|
Debt service reserve facility at 6-month TIBOR plus 1.20%
|
——————————
(1)Outstanding balance comprised of $135.9 million of fixed rate loans and $48.6 million of variable rate loans as of September 30, 2021.
(2)Outstanding balance comprised of $12.2 million of fixed rate loans and $12.5 million of variable rate loans as of September 30, 2021.
(3)We have entered into an interest rate swap contract to hedge a portion of this variable rate. See Note 6. “Derivative Financial Instruments” to our condensed consolidated financial statements for additional information.
Future Principal Payments
At September 30, 2021, the future principal payments on our long-term debt were due as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Total Debt
|
Remainder of 2021
|
|
$
|
717
|
|
2022
|
|
37,905
|
|
2023
|
|
6,687
|
|
2024
|
|
55,137
|
|
2025
|
|
8,636
|
|
2026
|
|
9,114
|
|
Thereafter
|
|
168,989
|
|
Total long-term debt future principal payments
|
|
$
|
287,185
|
|
10. Commitments and Contingencies
Commercial Commitments
During the normal course of business, we enter into commercial commitments in the form of letters of credit and surety bonds to provide financial and performance assurance to third parties. As of September 30, 2021, the majority of these commercial commitments supported our systems projects. As of September 30, 2021, the issued and outstanding amounts and available capacities under these commitments were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued and Outstanding
|
|
Available Capacity
|
Bilateral facilities (1)
|
|
$
|
27.4
|
|
|
$
|
287.6
|
|
Surety bonds
|
|
12.6
|
|
|
703.8
|
|
——————————
(1)Of the total letters of credit issued under the bilateral facilities, $2.6 million was secured with cash.
Product Warranties
When we recognize revenue for module or system sales, we accrue liabilities for the estimated future costs of meeting our limited warranty obligations for both modules and the balance of the systems. We make and revise these estimates based primarily on the number of solar modules under warranty installed at customer locations, our historical experience with and projections of warranty claims, and our estimated per-module replacement costs. We also monitor our expected future module performance through certain quality and reliability testing and actual performance in certain field installation sites. From time to time, we have taken remediation actions with respect to affected modules beyond our limited warranties and may elect to do so in the future, in which case we would incur additional expenses. Such potential voluntary future remediation actions beyond our limited warranty obligations may be material to our condensed consolidated statements of operations if we commit to any such remediation actions.
Product warranty activities during the three and nine months ended September 30, 2021 and 2020 were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Product warranty liability, beginning of period
|
|
$
|
91,058
|
|
|
$
|
123,194
|
|
|
$
|
95,096
|
|
|
$
|
129,797
|
|
Accruals for new warranties issued
|
|
1,680
|
|
|
3,435
|
|
|
8,397
|
|
|
7,903
|
|
Settlements
|
|
(1,091)
|
|
|
(9,289)
|
|
|
(6,730)
|
|
|
(18,772)
|
|
Changes in estimate of product warranty liability
|
|
(33,106)
|
|
|
(19,987)
|
|
|
(38,222)
|
|
|
(21,575)
|
|
Product warranty liability, end of period
|
|
$
|
58,541
|
|
|
$
|
97,353
|
|
|
$
|
58,541
|
|
|
$
|
97,353
|
|
Current portion of warranty liability
|
|
$
|
16,752
|
|
|
$
|
22,325
|
|
|
$
|
16,752
|
|
|
$
|
22,325
|
|
Noncurrent portion of warranty liability
|
|
$
|
41,789
|
|
|
$
|
75,028
|
|
|
$
|
41,789
|
|
|
$
|
75,028
|
|
We estimate our limited product warranty liability for power output and defects in materials and workmanship under normal use and service conditions based on return rates for each series of module technology. During the three months ended September 30, 2021, we revised this estimate based on updated information regarding our warranty claims, which reduced our product warranty liability by $33.1 million. This updated information reflected lower-than-expected warranty claims for our older series of module technology as well as the evolving claims profile of our newest series of module technology, resulting in reductions to our projected module return rates. During the three months ended September 30, 2020, we revised this estimate based on updated information regarding our warranty claims, which reduced our product warranty liability by $19.7 million. This updated information reflected lower-than-expected settlements for our older series of module technology and revisions to projected settlements, resulting in a lower projected return rate.
In general, we expect the return rates for our Series 6 modules to be lower than our older series, and we estimate that the return rate for such newer series of module technology will be less than 1%. As of September 30, 2021, a 1% increase in the return rate across all series of module technology would increase our product warranty liability by $112.2 million, and a 1% increase in the return rate for balance of systems (“BoS”) parts would not have a material impact on the associated warranty liability.
Performance Guarantees
As part of our systems business, we conduct performance testing of a system prior to substantial completion to confirm the system meets its operational and capacity expectations noted in the engineering, procurement, and construction (“EPC”) agreement. In addition, we may provide an energy performance test during the first or second year of a system’s operation to demonstrate that the actual energy generation for the applicable period meets or exceeds the modeled energy expectation, after certain adjustments. If there is an underperformance event with regard to these tests, we may incur liquidated damages as specified in the applicable EPC agreement. In certain instances, a bonus payment may be received at the end of the applicable test period if the system performs above a specified level. As of December 31, 2020, we accrued $10.2 million for our estimated obligations under such arrangements, which were classified as “Other current liabilities” in our condensed consolidated balance sheet.
Indemnifications
In certain limited circumstances, we have provided indemnifications to customers or other parties, including project tax equity investors, under which we are contractually obligated to compensate such parties for losses they suffer resulting from a breach of a representation, warranty, or covenant; a reduction in tax benefits received, including investment tax credits; the resolution of specific matters associated with a project’s development or construction; or guarantees of a third party’s payment or performance obligations. Project related tax benefits are, in part, based on guidance provided by the Internal Revenue Service and U.S. Treasury Department, which includes assumptions regarding the fair value of qualifying PV solar power systems. For contracts that have such indemnification provisions, we initially recognize a liability under ASC 460 for the estimated premium that would be required by a guarantor to issue the same indemnity in a standalone arm’s-length transaction with an unrelated party. We may base these estimates on the cost of insurance or other instruments that cover the underlying risks being indemnified and may purchase such instruments to mitigate our exposure to potential indemnification payments. We subsequently measure such liabilities at the greater of the initially estimated premium or the contingent liability required to be recognized under ASC 450. We recognize any indemnification liabilities as a reduction of earnings associated with the related transaction.
After an indemnification liability is recorded, we derecognize such amount pursuant to ASC 460 depending on the nature of the indemnity, which derecognition typically occurs upon expiration or settlement of the arrangement, and any contingent aspects of the indemnity are accounted for in accordance with ASC 450. As of September 30, 2021 and December 31, 2020, we accrued $3.8 million and $3.2 million of current indemnification liabilities, respectively. As of September 30, 2021, the maximum potential amount of future payments under our indemnifications was $101.8 million, and we held insurance and other instruments allowing us to recover up to $28.2 million of potential amounts paid under the indemnifications.
In September 2017, we made an indemnification payment in connection with the sale of one of our projects following the underpayment of anticipated cash grants by the United States government. In February 2018, the associated project entity commenced legal action against the United States government seeking full payment of the cash grants. In May 2021, the parties reached an agreement, pursuant to which the United States government made a settlement payment to the project entity. Under the terms of the indemnification arrangement, we received $65.1 million for our portion of the settlement payment, which we recorded as revenue during the nine months ended September 30, 2021.
Solar Module Collection and Recycling Liability
We previously established a module collection and recycling program, which has since been discontinued, to collect and recycle modules sold and covered under such program once the modules reach the end of their service lives. For legacy customer sales contracts that were covered under this program, we agreed to pay the costs for the collection and recycling of qualifying solar modules, and the end-users agreed to notify us, disassemble their solar power systems, package the solar modules for shipment, and revert ownership rights over the modules back to us at the end of the modules’ service lives. Accordingly, we recorded any collection and recycling obligations within “Cost of sales” at the time of sale based on the estimated cost to collect and recycle the covered solar modules.
We estimate the cost of our collection and recycling obligations based on the present value of the expected future cost of collecting and recycling the solar modules, which includes estimates for the cost of packaging materials; the cost of freight from the solar module installation sites to a recycling center; material, labor, and capital costs; and by-product credits for certain materials recovered during the recycling process. We base these estimates on our experience collecting and recycling solar modules and certain assumptions regarding costs at the time the solar modules will be collected and recycled. In the periods between the time of sale and the related settlement of the collection and recycling obligation, we accrete the carrying amount of the associated liability and classify the corresponding expense within “Selling, general and administrative” expense on our condensed consolidated statements of operations.
We periodically review our estimates of expected future recycling costs and may adjust our liability accordingly. During the three months ended September 30, 2021, we completed our annual cost study of obligations under our module collection and recycling program and increased the associated liability by $10.8 million primarily due to lower estimated by-product credits for certain semiconductor materials recovered during the recycling process and updates to certain valuation assumptions. During the three months ended September 30, 2020, we completed our annual cost study of obligations under our module collection and recycling program and reduced the associated liability by $18.9 million primarily due to changes to the estimated timing of cash flows associated with capital, labor, and maintenance costs and updates to certain valuation assumptions.
Our module collection and recycling liability was $140.0 million and $130.7 million as of September 30, 2021 and December 31, 2020, respectively. As of September 30, 2021, a 10% increase in the expected future recycling costs would increase the liability by $14.0 million. See Note 4. “Restricted Marketable Securities” to our condensed consolidated financial statements for more information about our arrangements for funding this liability.
Legal Proceedings
Opt-Out Action
First Solar was party to a suit titled Maverick Fund, L.D.C. v. First Solar, Inc., et al., Case No. 2:15-cv-01156-ROS, filed in 2015 in the United States District Court for the District of Arizona (hereafter “Arizona District Court”) by putative stockholders that opted out of a separate class action lawsuit (the “Opt-Out Action”).
In July 2020, the parties executed a definitive settlement agreement pursuant to which First Solar agreed to pay a total of $19 million in exchange for mutual releases and a dismissal with prejudice of the Opt-Out Action. The agreement contains no admission of liability, wrongdoing, or responsibility by any of the defendants. On July 30, 2020, First Solar funded the settlement, and on July 31, 2020, the parties filed a joint stipulation of dismissal. On September 10, 2020, the Arizona District Court entered an order dismissing the case with prejudice. As of December 31, 2019, we accrued $13 million of estimated losses for this action. As a result of the settlement, we accrued an incremental $6 million litigation loss during the nine months ended September 30, 2020.
Other Matters and Claims
We are party to legal matters and claims in the normal course of our operations, which are described in Note 13 within our Annual Report on Form 10-K for the year ended December 31, 2020. While we believe the ultimate outcome of these matters and claims will not have a material adverse effect on our financial position, results of operations, or cash flows, the outcome of such matters and claims is not determinable with certainty, and negative outcomes may adversely affect us. There have been no material changes to these matters since our Annual Report on Form 10-K for the year ended December 31, 2020 was filed with the SEC on February 26, 2021.
11. Revenue from Contracts with Customers
The following table presents the disaggregation of revenue from contracts with customers for the three and nine months ended September 30, 2021 and 2020 along with the reportable segment for each category (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
Category
|
|
Segment
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Solar modules
|
|
Modules
|
|
$
|
562,810
|
|
|
$
|
422,480
|
|
|
$
|
1,640,436
|
|
|
$
|
1,187,679
|
|
Solar power systems
|
|
Systems
|
|
10,132
|
|
|
471,174
|
|
|
311,076
|
|
|
776,724
|
|
O&M services
|
|
Systems
|
|
5,262
|
|
|
28,061
|
|
|
37,210
|
|
|
89,237
|
|
Energy generation (1)
|
|
Systems
|
|
7,339
|
|
|
14,335
|
|
|
29,375
|
|
|
54,884
|
|
EPC services (2)
|
|
Systems
|
|
(2,039)
|
|
|
(8,485)
|
|
|
(2,039)
|
|
|
(6,424)
|
|
Net sales
|
|
|
|
$
|
583,504
|
|
|
$
|
927,565
|
|
|
$
|
2,016,058
|
|
|
$
|
2,102,100
|
|
——————————
(1)During the three and nine months ended September 30, 2020, the majority of energy generated and sold by our PV solar power systems was accounted for under ASC 840 consistent with the classification of the associated PPAs.
(2)For certain of our EPC agreements, we provide an energy performance test during the first or second year of a system’s operation to demonstrate that the actual energy generation for the applicable period meets or exceeds the modeled energy expectation, after certain adjustments. If there is an underperformance event with regard to these tests, we may incur liquidated damages as specified in the applicable EPC agreement. During the three months ended September 30, 2020, we accrued liquidated damages for certain of these agreements, which we recognized as a reduction to revenue. See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our performance guarantee arrangements.
We recognize revenue for module sales at a point in time following the transfer of control of the modules to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. Such contracts may contain provisions that require us to make liquidated damage payments to the customer if we fail to ship or deliver modules by scheduled dates. We recognize these liquidated damages as a reduction of revenue in the period we transfer control of the modules to the customer.
For EPC services, or sales of solar power systems with EPC services, we recognize revenue over time using cost based input methods, in which significant judgment is required to evaluate assumptions including the amount of net contract revenues and the total estimated costs to determine our progress toward contract completion. If the estimated total costs on any contract are greater than the net contract revenues, we recognize the entire estimated loss in the period the loss becomes known. The cumulative effect of revisions to estimates related to net contract revenues or costs to complete contracts are recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated.
Changes in estimates for sales of systems and EPC services occur for a variety of reasons, including but not limited to (i) changes in estimates of variable consideration, (ii) construction plan accelerations or delays, (iii) module cost forecast changes, (iv) cost related change orders, or (v) changes in other information used to estimate costs. Changes in estimates may have a material effect on our condensed consolidated statements of operations.
The following table outlines the impact on revenue of net changes in estimated transaction prices and input costs for systems related sales contracts (both increases and decreases) for the three and nine months ended September 30, 2021 and 2020 as well as the number of projects that comprise such changes. For purposes of the table, we only include projects with changes in estimates that have a net impact on revenue of at least $1.0 million during the periods presented. Also included in the table is the net change in estimate as a percentage of the aggregate revenue for such projects.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Number of projects
|
|
4
|
|
|
6
|
|
|
9
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in revenue from net changes in transaction prices (in thousands) (1)
|
|
$
|
7,818
|
|
|
$
|
(16,319)
|
|
|
$
|
72,950
|
|
|
$
|
(25,470)
|
|
Increase (decrease) in revenue from net changes in input cost estimates (in thousands)
|
|
—
|
|
|
24
|
|
|
—
|
|
|
(2,483)
|
|
Net increase (decrease) in revenue from net changes in estimates (in thousands)
|
|
$
|
7,818
|
|
|
$
|
(16,295)
|
|
|
$
|
72,950
|
|
|
$
|
(27,953)
|
|
|
|
|
|
|
|
|
|
|
Net change in estimate as a percentage of aggregate revenue
|
|
0.9
|
%
|
|
(1.3)
|
%
|
|
2.3
|
%
|
|
(1.3)
|
%
|
——————————
(1)During the nine months ended September 30, 2021, we recorded revenue of $65.1 million associated with the settlement of an outstanding indemnification arrangement associated with the sale of one of our projects. See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our indemnification arrangements.
The following table reflects the changes in our contract assets, which we classify as “Accounts receivable, unbilled,” and our contract liabilities, which we classify as “Deferred revenue,” for the nine months ended September 30, 2021. As of December 31, 2020, these balances excluded any assets or liabilities classified as held for sale (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
|
Nine Month Change
|
Accounts receivable, unbilled (1)
|
|
$
|
49,204
|
|
|
$
|
49,395
|
|
|
|
|
|
Allowance for credit losses
|
|
(184)
|
|
|
(303)
|
|
|
|
|
|
Accounts receivable, unbilled, net
|
|
$
|
49,020
|
|
|
$
|
49,092
|
|
|
$
|
(72)
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
Deferred revenue (2)
|
|
$
|
307,473
|
|
|
$
|
233,732
|
|
|
$
|
73,741
|
|
|
32
|
%
|
——————————
(1)Includes $24.2 million and $22.7 million of noncurrent accounts receivable, unbilled classified as “Other assets” on our condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively.
(2)Includes $68.7 million and $44.9 million of noncurrent deferred revenue classified as “Other liabilities” on our condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively.
During the nine months ended September 30, 2021, our contract assets decreased by $0.1 million primarily due to final billings for certain project sales, offset by unbilled receivables associated with the sale of the Sun Streams 4 and Sun Streams 5 projects in the current period. During the nine months ended September 30, 2021, our contract liabilities increased by $73.7 million primarily due to advance payments received for sales of solar modules in the current period, partially offset by the recognition of revenue for sales of solar modules for which payment was received in 2020. During the nine months ended September 30, 2021 and 2020, we recognized revenue of $169.5 million and $296.7 million, respectively, that was included in the corresponding contract liability balance at the beginning of the periods.
As of September 30, 2021, we had entered into contracts with customers for the future sale of 16.4 GWDC of solar modules for an aggregate transaction price of $4.6 billion. We expect to recognize such amounts as revenue through 2024 as we transfer control of the modules to the customers. While our contracts with customers typically represent firm purchase commitments, these contracts may be subject to amendments made by us or requested by our customers. These amendments may increase or decrease the volume of modules to be sold under the contract, change delivery schedules, or otherwise adjust the expected revenue under these contracts.
12. Share-Based Compensation
The following table presents share-based compensation expense recognized in our condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Cost of sales (1)
|
|
$
|
154
|
|
|
$
|
1,099
|
|
|
$
|
235
|
|
|
$
|
2,554
|
|
Selling, general and administrative (1)
|
|
5,746
|
|
|
5,562
|
|
|
14,998
|
|
|
13,323
|
|
Research and development (2)
|
|
529
|
|
|
548
|
|
|
(259)
|
|
|
2,312
|
|
Total share-based compensation expense
|
|
$
|
6,429
|
|
|
$
|
7,209
|
|
|
$
|
14,974
|
|
|
$
|
18,189
|
|
——————————
(1)On March 31, 2021, we completed the sales of our North American O&M operations and U.S. project development business, which resulted in the forfeiture of unvested shares for associates (our term for full and part-time employees) departing the Company as part of the transactions. See Note 2. “Sales of Businesses” to our condensed consolidated financial statements for further information related to these transactions.
(2)Effective March 15, 2021, our former Chief Technology Officer retired from the Company, which resulted in the forfeiture of his unvested shares during the nine months ended September 30, 2021.
Share-based compensation expense capitalized in inventory, project assets, and PV solar power systems was $0.8 million as of September 30, 2021 and $1.1 million as of December 31, 2020. As of September 30, 2021, we had $29.3 million of unrecognized share-based compensation expense related to unvested restricted and performance units, which we expect to recognize over a weighted-average period of approximately 1.4 years.
In April 2018, the compensation committee of our board of directors (“the Board”) approved a long-term incentive program for key executive officers and associates. The program was intended to incentivize retention of our key executive talent and align the interest of executive management and stockholders. The program consisted of performance units to be earned over an approximately three-year performance period, which ended in December 2020. Vesting of the 2018 grants of performance units was contingent upon the relative attainment of target gross margin, operating expense, and contracted revenue metrics. In February 2021, the compensation committee certified the achievement of the vesting conditions applicable to the grants, which approximated the target level of performance. Accordingly, each participant received one share of common stock for each vested performance unit, net of any tax withholdings.
In July 2019, the compensation committee approved additional grants of performance units for key executive officers. Such grants are expected to be earned over a multi-year performance period ending in December 2021. Vesting of the 2019 grants of performance units is contingent upon the relative attainment of target cost per watt, module wattage, gross profit, and operating income metrics.
In March 2020, the compensation committee approved additional grants of performance units for key executive officers. Such grants are expected to be earned over a multi-year performance period ending in December 2022. Vesting of the 2020 grants of performance units is contingent upon the relative attainment of target contracted revenue, module wattage, and return on capital metrics.
In May 2021, the compensation committee approved additional grants of performance units for key executive officers. Such grants are expected to be earned over a multi-year performance period ending in December 2023. Vesting of the 2021 grants of performance units is contingent upon the relative attainment of target contracted revenue, cost per watt, incremental average selling price, and operating income metrics.
Vesting of performance units is also contingent upon the employment of program participants through the applicable vesting dates, with limited exceptions in case of death, disability, a qualifying retirement, or a change-in-control of First Solar. Outstanding performance units are included in the computation of diluted net income per share based on the number of shares that would be issuable if the end of the reporting period were the end of the contingency period.
13. Income Taxes
In March 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act (the “CARES Act”) was signed into law. The CARES Act includes a number of federal corporate tax relief provisions that are intended to support the ongoing liquidity of U.S. corporations. Among other provisions, the CARES Act allows net operating losses incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years. Because changes in tax law are accounted for in the period of enactment, the retroactive effects of such changes were accounted for as a discrete item in the prior period.
As a result of the CARES Act, we expect to carry back our 2019 and 2020 net operating losses to our 2016 U.S. corporate income tax return, which will restore certain foreign tax credits we expect to utilize by amending our 2017 and 2018 U.S. corporate income tax returns. Such amended returns will restore other general business credits we expect to utilize in future tax years before the credits expire and eliminate the transition tax liability for accumulated earnings of foreign subsidiaries resulting from the Tax Cuts and Jobs Act.
Our effective tax rate was 16.7% and (16.9)% for the nine months ended September 30, 2021 and 2020, respectively. The increase in our effective tax rate was primarily driven by a discrete tax benefit in the prior year associated with the net operating loss carryback provisions of the CARES Act described above. Our provision for income taxes differed from the amount computed by applying the U.S. statutory federal income tax rate of 21% primarily due to the beneficial impact of the Malaysian tax holiday and Vietnamese tax incentive.
Our Malaysian subsidiary has been granted a long-term tax holiday that expires in 2027. The tax holiday, which generally provides for a full exemption from Malaysian income tax, is conditional upon our continued compliance with certain employment and investment thresholds, which we are currently in compliance with and expect to continue to comply with through the expiration of the tax holiday in 2027. In addition, our Vietnamese subsidiary has been granted a tax incentive that provides a two-year tax exemption, which began in 2020, and reduced annual tax rates through the end of 2025.
We account for uncertain tax positions pursuant to the recognition and measurement criteria under ASC 740. It is reasonably possible that $0.4 million of uncertain tax positions will be recognized within the next 12 months due to the expiration of the statute of limitations associated with such positions.
We are subject to audit by federal, state, local, and foreign tax authorities. We are currently under examination in India, Malaysia, and the state of California. We believe that adequate provisions have been made for any adjustments that may result from tax examinations. However, the outcome of tax examinations cannot be predicted with certainty. If any issues addressed by our tax examinations are not resolved in a manner consistent with our expectations, we could be required to adjust our provision for income taxes in the period such resolution occurs.
14. Net Income per Share
The calculation of basic and diluted net income per share for the three and nine months ended September 30, 2021 and 2020 was as follows (in thousands, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Basic net income per share
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
45,203
|
|
|
$
|
155,037
|
|
|
$
|
337,323
|
|
|
$
|
282,652
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
|
106,320
|
|
|
105,967
|
|
|
106,241
|
|
|
105,830
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
|
106,320
|
|
|
105,967
|
|
|
106,241
|
|
|
105,830
|
|
Effect of restricted and performance units and stock purchase plan shares
|
|
579
|
|
|
784
|
|
|
638
|
|
|
707
|
|
Weighted-average shares used in computing diluted net income per share
|
|
106,899
|
|
|
106,751
|
|
|
106,879
|
|
|
106,537
|
|
|
|
|
|
|
|
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.43
|
|
|
$
|
1.46
|
|
|
$
|
3.18
|
|
|
$
|
2.67
|
|
Diluted
|
|
$
|
0.42
|
|
|
$
|
1.45
|
|
|
$
|
3.16
|
|
|
$
|
2.65
|
|
The following table summarizes the shares of common stock that were excluded from the computation of diluted net income per share for the three and nine months ended September 30, 2021 and 2020 as such shares would have had an anti-dilutive effect (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Anti-dilutive shares
|
|
8
|
|
|
1
|
|
|
3
|
|
|
—
|
|
15. Accumulated Other Comprehensive Loss
The following table presents the changes in accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2021 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency Translation Adjustment
|
|
Unrealized Gain (Loss) on Marketable Securities and Restricted Marketable Securities
|
|
Unrealized Gain (Loss) on Derivative Instruments
|
|
Total
|
Balance as of December 31, 2020
|
|
$
|
(76,239)
|
|
|
$
|
16,630
|
|
|
$
|
(2,117)
|
|
|
$
|
(61,726)
|
|
Other comprehensive (loss) income before reclassifications
|
|
(12,544)
|
|
|
(9,399)
|
|
|
3,799
|
|
|
(18,144)
|
|
Amounts reclassified from accumulated other comprehensive loss
|
|
1,203
|
|
|
(11,696)
|
|
|
1,030
|
|
|
(9,463)
|
|
Net tax effect
|
|
—
|
|
|
1,134
|
|
|
(545)
|
|
|
589
|
|
Net other comprehensive (loss) income
|
|
(11,341)
|
|
|
(19,961)
|
|
|
4,284
|
|
|
(27,018)
|
|
Balance as of September 30, 2021
|
|
$
|
(87,580)
|
|
|
$
|
(3,331)
|
|
|
$
|
2,167
|
|
|
$
|
(88,744)
|
|
The following table presents the pretax amounts reclassified from accumulated other comprehensive loss into our condensed consolidated statements of operations for the three and nine months ended September 30, 2021 and 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income Components
|
|
Income Statement Line Item
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Foreign currency translation adjustment:
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment
|
|
Cost of sales
|
|
$
|
—
|
|
|
$
|
370
|
|
|
$
|
—
|
|
|
$
|
370
|
|
Foreign currency translation adjustment
|
|
Other (expense) income, net
|
|
(728)
|
|
|
—
|
|
|
(1,203)
|
|
|
—
|
|
Total foreign currency translation adjustment
|
|
|
|
(728)
|
|
|
370
|
|
|
(1,203)
|
|
|
370
|
|
Unrealized gain on marketable securities and restricted marketable securities
|
|
Other (expense) income, net
|
|
—
|
|
|
9
|
|
|
11,696
|
|
|
15,346
|
|
Unrealized gain (loss) on derivative contracts:
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange forward contracts
|
|
Cost of sales
|
|
15
|
|
|
(334)
|
|
|
(1,913)
|
|
|
(647)
|
|
Commodity swap contracts
|
|
Cost of sales
|
|
670
|
|
|
—
|
|
|
883
|
|
|
—
|
|
Total unrealized gain (loss) on derivative contracts
|
|
|
|
685
|
|
|
(334)
|
|
|
(1,030)
|
|
|
(647)
|
|
Total (loss) gain reclassified
|
|
|
|
$
|
(43)
|
|
|
$
|
45
|
|
|
$
|
9,463
|
|
|
$
|
15,069
|
|
16. Segment Reporting
We operate our business in two segments. Our modules segment involves the design, manufacture, and sale of cadmium telluride (“CdTe”) solar modules, which convert sunlight into electricity. Third-party customers of our modules segment include integrators and operators of PV solar power systems. Our second segment is our systems segment, through which we provide power plant solutions in certain markets, which include (i) project development, (ii) EPC services, and (iii) O&M services. We may provide any combination of individual products and services within such capabilities (including, with respect to EPC services, by contracting with third parties) depending upon the customer and market opportunity. Our systems segment customers include utilities, independent power producers, commercial and industrial companies, and other system owners. From time to time, we may temporarily own and operate, or retain interests in, certain of our systems for a period of time based on strategic opportunities or market factors. See Note 20. “Segment and Geographical Information” in our Annual Report on Form 10-K for the year ended December 31, 2020 for additional discussion of our segment reporting.
The following tables present certain financial information for our reportable segments for the three and nine months ended September 30, 2021 and 2020 and as of September 30, 2021 and December 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2021
|
|
Three Months Ended September 30, 2020
|
|
|
Modules
|
|
Systems
|
|
Total
|
|
Modules
|
|
Systems
|
|
Total
|
Net sales
|
|
$
|
562,810
|
|
|
$
|
20,694
|
|
|
$
|
583,504
|
|
|
$
|
422,480
|
|
|
$
|
505,085
|
|
|
$
|
927,565
|
|
Gross profit
|
|
118,260
|
|
|
6,320
|
|
|
124,580
|
|
|
124,822
|
|
|
168,193
|
|
|
293,015
|
|
Depreciation and amortization expense
|
|
56,335
|
|
|
3,045
|
|
|
59,380
|
|
|
43,137
|
|
|
4,982
|
|
|
48,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2021
|
|
Nine Months Ended September 30, 2020
|
|
|
Modules
|
|
Systems
|
|
Total
|
|
Modules
|
|
Systems
|
|
Total
|
Net sales
|
|
$
|
1,640,436
|
|
|
$
|
375,622
|
|
|
$
|
2,016,058
|
|
|
$
|
1,187,679
|
|
|
$
|
914,421
|
|
|
$
|
2,102,100
|
|
Gross profit
|
|
328,047
|
|
|
155,418
|
|
|
483,465
|
|
|
280,115
|
|
|
240,698
|
|
|
520,813
|
|
Depreciation and amortization expense
|
|
163,747
|
|
|
9,193
|
|
|
172,940
|
|
|
132,529
|
|
|
17,477
|
|
|
150,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021
|
|
December 31, 2020
|
|
|
Modules
|
|
Systems
|
|
Total
|
|
Modules
|
|
Systems
|
|
Total
|
Goodwill
|
|
$
|
14,462
|
|
|
$
|
—
|
|
|
$
|
14,462
|
|
|
$
|
14,462
|
|
|
$
|
—
|
|
|
$
|
14,462
|
|