Tesla 2012 Annual Report Download - page 112

Table of Contents
within stockholders’ equity. Realized gains and losses on the sale of available-for-sale marketable securities are recorded in other expense, net.
The cost of available-for-sale marketable securities sold is based on the specific identification method. Interest, dividends, amortization and
accretion of purchase premiums and discounts on our marketable securities are included in other expense, net. Available-for-sale marketable
securities with maturities greater than three months at the date of purchase and remaining maturities of one year or less are classified as short-
term marketable securities. Where temporary declines in fair value exist, we have the ability and the intent to hold these securities for a period of
time sufficient to allow for any anticipated recovery in fair value.
We regularly review all of our marketable securities for other-than-temporary declines in fair value. The review includes but is not limited
to (i) the consideration of the cause of the impairment, (ii) the creditworthiness of the security issuers, (iii) the length of time a security is in an
unrealized loss position, and (iv) our ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value.
Restricted Cash and Deposits
We maintain certain cash amounts restricted as to withdrawal or use. We maintained total restricted cash of approximately $31.5 million
and $78.5 million as of December 31, 2011 and 2010, respectively. Current restricted cash primarily represents cash held in a separate, dedicated
account required under our DOE loan facility (see Note 9) and used as a mechanism to defer advances under the DOE loan facility. Noncurrent
restricted cash is comprised primarily of security deposits held by vendors as part of the vendor’s standard credit policies, security deposits
related to lease agreements and equipment financing, and certain refundable reservation payments segregated in accordance with state consumer
protection regulations.
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable primarily include amounts related to sales of powertrain components and the performance of powertrain development
services. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations to us, we provide an allowance
against amounts receivable to reduce the net recognized receivable to the amount we reasonably believes will be collected. We typically do not
carry accounts receivable related to our vehicle and related sales as customer payments are due prior to vehicle delivery.
Concentration of Risk
Financial instruments that potentially subject us to a concentration of credit risk consist of cash, cash equivalents, marketable securities,
restricted cash and accounts receivable. Our cash and cash equivalents are primarily invested in money market funds with high credit quality
financial institutions in the United States. At times, these deposits and securities may be in excess of insured limits. We invest cash not required
for use in operations in high credit quality securities based on our investment policy. Our investment policy provides guidelines and limits
regarding credit quality, investment concentration, investment type, and maturity that we believe will provide liquidity while reducing risk of
loss of capital. Investments are of a short-term nature and include investments in corporate debt securities.
As of December 31, 2011 and 2010, our accounts receivable were derived primarily from sales of powertrain components to Daimler and
the development of powertrain systems for Toyota Motor Corporation (Toyota) (see Note 14).
The following summarizes the accounts receivable in excess of 10% of our total accounts receivable:
111
December 31,
2011
December 31,
2010
Toyota
52
%
42
%
Daimler
38
%
51
%