Tesla 2011 Annual Report Download - page 102

Table of Contents
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.
Significant operating cash inflows for the year ended December 31, 2009 were derived primarily from the sales of the Tesla Roadster as
well as development compensation related to the Daimler development agreement. Cash inflows related to automotive sales activity were
$88.5 million comprised of $111.9 million of automotive sales, partially offset by a $22.0 million decrease in refundable reservation payments
and a $1.5 million decrease in deferred revenues. The decrease in the refundable reservation payments was due to the launch of the Tesla
Roadster during the year ended December 31, 2008. As we continued to deliver the Tesla Roadster to our customers in 2009, we applied the
related reservation payments to the respective customers’ purchase cost. Cash inflows from the Daimler development agreement were
$13.2 million comprised primarily of $23.2 million of development compensation partially offset by a $10.0 million decrease in deferred
development compensation. The decrease in deferred development compensation was the result of the amortization of deferred development
compensation that we received during the year ended December 31, 2008.
Net cash used in operating activities was $52.4 million during the year ended December 31, 2008. The largest component of our cash used
during this period, was the $82.8 million net loss, which included non-cash charges of $4.3 million related to inventory write-downs,
$4.2 million related to depreciation and amortization, $3.7 million related to interest on convertible notes and $2.8 million related to the fair
value change in our convertible preferred stock warrant liability, as well as a non-cash gain of $1.2 million from the extinguishment of
convertible notes and warrants. Significant operating cash outflows were driven primarily by $77.4 million of operating expenses, $15.9 million
of cost of sales, and an $18.8 million increase in inventory, partially offset by an $8.8 million increase in accounts payable and a $2.6 million
increase in accrued liabilities. We had increased inventory in anticipation of the commercial introduction of the Tesla Roadster. Accrued
liabilities and accounts payable increased primarily due to the significant increase in activities to bring the Tesla Roadster to production.
We benefited from operating cash inflows related to Tesla Roadster reservation activity and our development efforts. Cash inflows derived
from Tesla Roadster sales and reservation activity were $29.4 million comprised primarily of $14.7 million of automotive sales, a $10.7 million
increase in refundable reservation payments and a $4.1 million increase in deferred revenues. Refundable reservation payments increased
reflecting new reservation activity received during the year partially offset by the reservation payments we applied to our customers’ purchase
cost as we began delivering Tesla Roadsters during the year ended December 31, 2008. Deferred revenues increased primarily from customer
payments we collected for certain Tesla Roadsters that we had delivered but as to which we had unfulfilled obligations related to powertrain
upgrades. We received cash from Daimler of $8.6 million for our development efforts during the year ended December 31, 2008 although the
amounts were deferred entirely until we executed a final agreement in May 2009, which is reflected in the related increase in deferred
development compensation of $10.2 million partially offset by an increase in accounts receivable of $1.6 million.
Cash Flows from Investing Activities
We continue to experience negative cash flows from investing activities as we expand our business, build our infrastructure both in the
United States and internationally and develop our Model S manufacturing capabilities. Cash flows from investing activities primarily relate to
capital expenditures to support our growth in operations, including investments in Model S manufacturing, as well as restricted cash that we
must maintain in relation to our DOE Loan Facility, facility lease agreements, equipment financing, and certain vendor credit policies.
Net cash used in investing activities was $180.3 million during the year ended December 31, 2010 primarily related to capital purchases of
$105.4 million and a net increase in restricted cash of $74.9 million. The increase
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