Tesla 2012 Annual Report Download - page 94

Table of Contents
the change in the fair value of our convertible preferred stock warrant liability, excluding the DOE warrant liability, was eliminated after July 2,
2010, as these warrants were net exercised at the completion of our IPO. The DOE convertible preferred stock warrant which we issued in
January 2010, became a common stock warrant on July 2, 2010 and is carried at its estimated fair value with changes in its fair value continuing
to be reflected in other expense, net, until its expiration or vesting.
Other expense, net, for the year ended December 31, 2011 was $2.6 million, a decrease from other expense, net, of $6.6 million for the
year ended December 31, 2010. The decrease in expense for the year ended December 31, 2011 was primarily due to the elimination of warrant
liabilities, excluding the DOE warrant liability, upon the completion of our IPO in July 2010.
Other expense, net, for the year ended December 31, 2010 was $6.6 million, an increase in expense compared to other expense, net, of $1.4
million for the year ended December 31, 2009. The increase in expense for the year ended December 31, 2010 was primarily due to the fair
value changes in our warrant liabilities as well as the liability related to common stock warrants to certain of our stockholders which we issued in
May 2010, both of which increased significantly in conjunction with the increase in our common stock valuation.
Provision for Income Taxes
Our provision for income taxes for the year ended December 31, 2011 was $0.5 million, an increase from $0.2 million for the year ended
December 31, 2010. The increase was due primarily to the increase in taxable income in our international jurisdictions.
Our provision for income taxes for the year ended December 31, 2010 was $0.2 million, an increase from $26,000 for the year ended
December 31, 2009. The increase was due primarily to the launch of the Tesla Roadster in Europe in July 2009 and the ensuing increase in
taxable income in our international jurisdictions.
Liquidity and Capital Resources
Since inception and through the year ended December 31, 2011, we had accumulated net operating losses of $669.4 million and have used
$445.0 million of cash in operations. As of December 31, 2011, we had $492.7 million in principal sources of liquidity available from our cash
and cash equivalents, short-term marketable securities, cash held in our dedicated DOE account and the remaining amounts available under the
DOE Loan Facility. This includes our cash and cash equivalents in the amount of $255.3 million which included investments in money market
funds, our short-term marketable securities in the amount of $25.1 million, cash of $23.5 million deposited in a dedicated DOE account in
accordance with the requirements of our DOE Loan Facility, and approximately $188.8 million available under the DOE Loan Facility, which is
primarily intended to cover spending related to the development of Model S and our powertrain activities. Other sources of cash also include
cash from the sales of the Tesla Roadster, cash from the provision of development services, sales of powertrain components and refundable
reservation payments for our Model S.
We expect that our current sources of liquidity, including cash, cash equivalents, short-term marketable securities, cash held in our
dedicated DOE account and the remaining amounts available under the DOE Loan Facility, together with our anticipated cash from operating
activities will provide us adequate liquidity until we reach profitability in 2013. This capital will fund our ongoing operations, continue research
and development projects, establish sales and service centers, improve infrastructure such as expanded battery pack assembly facilities, and to
make the investments in tooling and manufacturing capital required to introduce Model S and to continue development of Model X. The
acceleration of the development of future vehicles, investments in new technologies, increased in-sourcing of manufacturing capabilities,
investments to expand our powertrain activities or further expand our sales and service network, may require us to raise additional funds through
the issuance of equity, equity-related or debt securities or through obtaining credit. We may also choose to opportunistically raise additional
funds if market conditions are favorable. We cannot be certain that additional funds will be available to us on favorable terms when required, or
at all.
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