Tesla 2012 Annual Report Download - page 98

Table of Contents
accounts payable and accrued liabilities, and a $2.6 million increase in other long-term liabilities. Inventory increased to meet our production
requirements for the Tesla Roadster as we planned for the final production of the Tesla Roadster and powertrain component sales as well as
leasing activities. The increase in accounts payable and accrued liabilities was due to both the growth of our business and the timing of vendor
payments.
Significant operating cash inflows during the year ended December 31, 2011 were comprised primarily of automotive sales of $148.6
million, $55.7 million of development services revenue and a $61.0 million net increase in reservation payments, partially offset by a
$2.8 million increase in accounts receivable and a $1.9 million decrease in deferred revenue. The increase in accounts receivable was related
primarily to receivables from Toyota for shipments of powertrain components under the Toyota RAV4 EV Phase 1 contract services agreement
and shipments of battery packs and chargers to Daimler under the Daimler Smart fortwo and A-Class EV programs.
Net cash used in operating activities was $127.8 million during the year ended December 31, 2010. The largest component of our cash
used during this period related to our net loss of $154.3 million, which included non-cash charges of $21.2 million related to stock-based
compensation expense, $10.6 million related to depreciation and amortization and $5.0 million related to the fair value change in our warrant
liabilities. Significant operating cash outflows were primarily related to $177.6 million of operating expenses, $86.0 million of cost of revenues,
a $28.5 million increase in inventory and operating lease vehicles, and a $5.0 million increase in prepaid expenses and other current assets,
partially offset by a $13.3 million increase in accrued liabilities and a $3.5 million increase in other long-term liabilities. Inventory increased to
meet our production requirements for the Tesla Roadster and powertrain component sales while the increase in prepaid expenses and other
current assets and accrued liabilities was due to both the growth of our business, as well as our increased manufacturing and Model S
development activities. Operating lease vehicles increased with the introduction of our leasing program in 2010. Other long-term liabilities
increased as a result of higher warranty liability from sales of the Tesla Roadster.
Significant operating cash inflows during the year ended December 31, 2010 were derived primarily from automotive sales of $97.1
million, $19.7 million of development services revenue, a $4.8 million increase in deferred revenues and a $4.7 million increase in reservation
payments, partially offset by a $3.2 million increase in accounts receivable. In October 2010, we entered into a Phase 1 contract services
agreement with Toyota for the development of a validated powertrain system, including a battery pack, power electronics module, motor,
gearbox and associated software, to be integrated into an electric vehicle version of the Toyota RAV4. Upon execution of the agreement, we
received a $5.0 million upfront payment for which revenue is being recognized over the expected term of our performance. Deferred revenues
also increased from our vehicle leasing activities as lease down-payments are recognized over the term of the operating leases. The increase in
accounts receivable was related primarily to powertrain component sales in relation to Daimler’s Smart fortwo EV program as well as $2.3
million receivable from Toyota for the achievement of the first milestone under the Phase 1 contract services agreement. During the year ended
December 31, 2010, we received $10.4 million of net new reservation payments for Model S while reservation payments for the Tesla Roadster
decreased by $5.7 million.
Net cash used in operating activities was $80.8 million during the year ended December 31, 2009. The largest component of our cash used
during this year was the $55.7 million net loss, which included non-cash charges of $6.9 million related to depreciation and amortization,
$2.7 million related to interest on convertible notes and $1.4 million related to inventory write-downs, as well as a non-cash gain of $1.5 million
from the extinguishment of convertible notes and warrants. Significant operating cash outflows were primarily related to $102.4 million of cost
of revenues, $61.4 million of operating expenses, a $7.9 million increase in inventory and a $2.0 million increase in our prepaid expenses and
other current assets, partially offset by a $3.4 million increase in accrued liabilities and a $0.9 million increase in accounts payable. Inventory
increased to meet our production requirements while the increase in prepaid expenses and other current assets reflect a higher level of annual
operating costs such as insurance, licenses and taxes from the growth of the business. The increases in accrued liabilities and accounts payable
were also primarily due to the growth in our business.
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