Tesla 2015 Annual Report Download - page 90

Long
-lived Assets
11. Commitments and Contingencies
Operating Leases
Our corporate headquarters and powertrain production operations are based in Palo Alto, California where we have leased a facility
consisting of 350,000 square feet. This lease expires in January 2020. We lease a 203,772 square feet manufacturing facility in Tilburg,
Netherlands through November 2023. We also lease a number of properties in North America, Europe and Asia for our office, retail and service
locations as well as Supercharger sites under non-cancelable operating leases with various expiration dates through March 2028.
Included within Operating Leases commitments in the table below are payments due under operating leases that have been accounted for
as build-to-suit arrangements and are included in property, plant, and equipment in our Consolidated Balance Sheets.
Rent expense for the years ended December 31, 2014, 2013 and 2012 was $46.3 million, $21.5 million and $12.1 million, respectively.
Capital Leases
We have entered into various agreements to lease equipment under capital leases over terms between 36 and 60 months. The equipment
under the leases are collateral for the lease obligations and are included within property, plant and equipment, net, on the consolidated balance
sheets under the categories of computer equipment and software and office furniture and equipment.
Future minimum commitments for leases as of December 31, 2014 are as follows (in thousands):
Environmental Liabilities
In connection with our Tesla Factory located in Fremont, California, we are obligated to pay for the remediation of certain environmental
conditions existing at the time we purchased the property from New United Motor Manufacturing, Inc. (NUMMI). Tesla is responsible for the
first $15 million of remediation costs and any costs in excess of $30 million or costs incurred after the ten-year anniversary of closing. NUMMI
is responsible for remediation costs between $15 million and $30 million for up to 10 years from the closing date. Through December 31, 2014,
we have paid $3.1 million for remediation costs incurred related to the Fremont facility. As of December 31, 2014 and 2013, we accrued a total
of $4.0 million and $5.5 million related to these environmental liabilities.
Legal Proceedings
From time to time, we are subject to various legal proceedings that arise from the normal course of business activities. In addition, from
time to time, third parties may assert intellectual property infringement claims against us in the form of letters and other forms of
communication. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on our results of operations,
prospects, cash flows, financial position and brand.
89
December 31, December 31,
2014 2013
United States
$
2,452,219
$
1,091,487
International
143,792
29,432
Total
$
2,596,011
$
1,120,919
Operating Capital
Leases Leases
2015
$
56,522
$
10,153
2016
60,136
8,112
2017
56,566
3,592
2018
48,959
563
2019 and thereafter
184,600
—
Total minimum lease payments
$
406,783
22,420
Less: Amounts representing interest not yet incurred
621
Present value of capital lease obligations
21,799
Less: Current portion
9,532
Long
-
term portion of capital lease obligations
$
12,267