Tesla 2016 Annual Report Download - page 56

Werecognizerevenueonthesaleofthesecreditsatthetimelegaltitletothecreditsistransferredtothepurchasingparty.Revenuefromthesaleof
regulatorycreditstotaled$168.7million,$216.3million,and$194.4millionfortheyearsendedDecember31,2015,2014and2013.
AdditionallywehaveenteredintoagreementswiththeStateofNevadaandStoreyCountyinNevadathatwillprovideabatementsforsalesandusetaxes,
realandpersonalpropertytaxes,andemployerexcisetaxes,discountstothebasetariffenergyrates,andtransferabletaxcredits.Theseincentiveswillbeavailable
fortheapplicableperiodsbeginningonOctober17,2014andendingonJune30,2034,subjecttocapitalinvestmentsbyTeslaanditspartnersfortheGigafactory
ofatleast$3.5billionintheaggregateonorbeforeJune30,2024,andcertainotherconditionsspecifiedintheagreements.Ifwedonotsatisfyoneormore
conditionsundertheagreement,Teslawillberequiredtorepaytotherespectivetaxingauthoritiestheamountsofthetaxincentivesincurred,plusinterest.Asof
December31,2015,wehaveearned$19.9millionoftransferabletaxcreditsundertheseagreements.Werecordthesecreditsasearnedwhenwehaveevidence
thereisamarketfortheirsale.Creditsareappliedasacostoffsettoeitheremployeeexpenseortocapitalassets,dependingonthesourceofthecredits.Credits
earnedfromemployeehiresorcapitalspendingbyourpartnersattheGigafactoryarerecordedtootherincome(expense),net.
MaintenanceandServicePlans
WeofferaprepaidmaintenanceprogramforModelS,whichincludesplanscoveringmaintenanceforuptoeightyearsorupto100,000miles,provided
theseservicesarepurchasedwithinaspecifiedperiodoftime.Themaintenanceplanscoverannualinspectionsandthereplacementofwearandtearparts,
excludingtiresandthebattery.Paymentscollectedinadvanceoftheperformanceofserviceareinitiallyrecordedindeferredrevenuesontheconsolidatedbalance
sheetsandrecognizedinautomotivesalesaswefulfillourperformanceobligations.
Wealsoofferanextendedserviceplan,whichcoverstherepairorreplacementofModelSpartsforanadditionalfouryearsoruptoanadditional50,000
miles,aftertheendofourinitialNewVehicleLimitedWarranty,providedtheyarepurchasedwithinaspecifiedperiodoftime.Paymentscollectedinadvanceof
theperformanceofserviceareinitiallyrecordedindeferredrevenuesontheconsolidatedbalancesheetsandrecognizedinautomotivesalesratablyovertheservice
coverageperiods.
AsofDecember31,2015and2014,wehaddeferred$53.6millionand$39.7millionrelatedtoourmaintenanceandserviceplans.Duringtheyearsended
December31,2015and2014,werecognizedrevenueof$4.5millionand$3.0millionrelatedtotheseplans.
CashandCashEquivalents
Allhighlyliquidinvestmentswithanoriginalmaturityofthreemonthsorlessatthedateofpurchaseareconsideredtobecashequivalents.Wecurrently
investourcashprimarilyinmoneymarketfunds.
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MarketableSecurities
Marketablesecuritiesarecomprisedofcommercialpaperandcorporatedebtandarealldesignatedasavailable-for-saleandreportedatestimatedfairvalue,
withunrealizedgainsandlossesrecordedinaccumulatedothercomprehensivelosswhichisincludedwithinstockholders’equity.Realizedgainsandlossesonthe
saleofavailable-for-salemarketablesecuritiesarerecordedinotherincome(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income(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.
Whenheld,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.CurrentandnoncurrentrestrictedcashasofDecember31,2015wascomprised
primarilyofcashascollateralrelatedtooursalestoleasepartnerswitharesidualvalueguaranteeandforlettersofcreditincludingforourrealestateleases,and
insurancepolicies.InDecember2015,wesettledandclosedourWarehouseFacilityandremovedrestrictionsoncashrelatedtothatarrangement.
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