Sign in or join
or
Join us
Didn't receive confirmation?
Thanks for registering. Please click on the confirm link in the email we just sent you.
Continue
Reset password
Resend confirmation
Post as Guest
+
Be part of the collaborative process!

Add a note by highlighting text or Replying to an existing note.

Okay
+
Be part of the collaborative process!

Add a note by highlighting text or Replying to an existing note.

Okay
Exhibit 99.1

Exhibit 99.1

 

LOGO

  

Tesla Motors – Fourth Quarter & Full Year 2014 Shareholder Letter

 

•    Introduced All-Wheel Drive Dual Motor Model S & Autopilot in Q4

•    Record quarterly production of 11,627 vehicles

•    Delivered 9,834 vehicles, as P85D production delays pushed some to Q1

•    Expanded Supercharger network to cover US coast to coast & most of Europe

•    Expecting over 70% growth in vehicle deliveries in 2015

•    Model X to begin shipping in six months

 

February 11, 2015

Dear Fellow Shareholders:

Tesla continues to drive the global transition to sustainable transport, with more pure electric car revenue than all other companies combined in 2014. From 2012 to 2014, Tesla non-GAAP revenue grew by almost 800% and GAAP revenue grew by almost 700% while gross margin simultaneously increased to unusually high levels by automotive standards. Moreover, as implied by the graph below, both vehicle production and demand are expected to accelerate in 2015.

 

In 2014, we also increased our number of stores and service centers by over 40%, expanded our Supercharger network by 400%, started construction of the Gigafactory and introduced numerous advances on Model S. As a result of this progress, we entered 2015 with over 10,000 orders for Model S and almost 20,000 reservations for Model X.

 

We built 11,627 vehicles in Q4, thus achieving our production target of 35,000 Model S vehicles in 2014. This required a herculean effort, because we held back release of our Performance All-Wheel Drive Dual Motor car (P85D) to ensure it would be a truly great experience for owners. While we were able to recover the lost production by end of the quarter, delivering those cars was physically impossible due to a combination of customers being on vacation, severe winter weather and shipping problems (with actual ships). As a result, about 1,400 vehicles slipped December and were delivered in Q1.

  LOGO

Our Q4 financials reflect this delivery shortfall, one-time manufacturing inefficiencies related to the introduction of P85D and Autopilot functionality, and the impact of the strong dollar. Even though the dollar has continued to strengthen by over 7% versus the euro in 2015, we believe we will be able to sustain a non-GAAP automotive gross margin of about 26% in Q1 by stabilizing production to improve manufacturing efficiencies. Without the sharp increase in dollar strength, Q1 gross margin would be about 28%. Tesla serves an international market and has a global supply chain, but most of the Model S is built in North America, so a strong dollar has a slightly negative net effect on profitability.


Vehicle Enhancements & Market Expansion

 

We launched the P85D in November to the enthusiastic reception of automotive reporters and car buyers. Motor Trend called the Model S P85D the “quickest sedan in the world” and a YouTube video of thrilled passengers went viral. Customers responded by placing a record number of Model S orders in the quarter. While the level of Q4 orders likely reflects some pent up demand from customers who had been waiting for an all wheel drive Model S, we also note very few customers have had an opportunity to see, or even test drive, our most innovative car yet. As our All-Wheel Drive Dual Motor cars become available in Q1 for customer test-drives worldwide, we expect this hands on experience will be a catalyst to even more orders.

  

LOGO

P85D: Great Handling in All Conditions

Autopilot equipped cars now have traffic aware cruise control, forward collision alert, and automatic high beam dimming. Several additional autopilot features will be introduced in Q1 and Q2. With software enhancements, appropriately equipped cars are even faster and more efficient, can predict trip range based on elevation data, automatically learn a driver’s unique commuting pattern and prepare the cabin temperature for daily trips, and provide greater parking assistance with improved feedback. Our customers are delighted to find these new features added to their cars overnight, with just a finger touch on the center console of their Model S. We are also continuously improving Model S with hardware enhancements such as our optional next generation front seats, executive second row seats and a second row center console.

Our Q4 entry into Australia capped a year of international expansion, in which we launched Model S in five countries and doubled our number of sales and service locations internationally. This year, we intend to continue to grow our sales and service locations in all our existing markets. Despite initial challenges in China, we remain convinced of the vast potential of this market and are concentrating our efforts on the cities we are in currently, before launching into new cities. Our China initiatives include simplifying the buying process there by having Tesla personnel install charging points at customer homes or businesses well before vehicle delivery. We now offer a turn-by-turn navigation option in China that we provided retroactively through a remote software upgrade to all our customers with appropriately optioned cars, and we believe our new executive seats and second row center console will be quite popular with new China customers.

 

LOGO

Model S – Sydney, Australia

  

Our charging solutions are becoming even more widespread, helping our customers to conveniently travel much further away from home. In Q4 we installed a quarterly record of 125 Supercharger stations, and now have 380 Supercharger stations energized globally. As an extension of our Supercharger network, hotels and popular destinations have been installing our high-powered wall connectors at such a rapid pace that we are now coordinating these efforts as a Destination Charging program. Almost 900 locations in Asia and North America currently have 1,600 Tesla connectors installed. We plan to expand the Destination Charging program into Europe in Q2 of this year.

 

Model X development remains on plan for initial customer deliveries starting in Q3. Over 30 Beta Model X vehicles have been built and are undergoing extensive testing. The results of initial Beta phase crash testing have given us confidence that Model X will live up to the very high safety standard set by Model S. In March we will start building and testing a small fleet of Release Candidate Model X vehicles that will be very close to the final production-intent design. Finally, since Model S and Model X will share the same dual motor powertrain, the introduction of All-Wheel Drive Dual Motor Model S helps reduce some of the risk that would otherwise have been associated with the launch and production ramp of Model X.

  


Productivity Improvements and Capacity Expansion

 

Ahead of the Model X launch in Q3, we plan to expand capacity in several areas. In our Lathrop manufacturing facility in central California, we are installing a state of the art, highly automated casting and machining operation for various aluminum components used on both Model S and Model X. We are also increasing production on our new drive unit line to meet All-Wheel Drive Dual Motor demand.

 

In late summer, we plan to begin Model X body production in our new robotic body assembly shop that will run in parallel with our current Model S body shop. Shortly thereafter, we plan to start painting Model S and Model X vehicles in our new paint facility in Fremont. Should we achieve our design targets, this new paint shop will set new standards for high volume paint shops worldwide in terms of paint quality, labor and energy efficiency, and low environmental impact. It will also be flexible enough and have the capacity to paint Model 3 in the future. These and other investments should provide us with sufficient capacity to increase our production to 2,000 vehicles per week by year-end.

   LOGO  
   Gigafactory Construction Continues

Construction activity is proceeding to plan at our Gigafactory near Reno, Nevada. Significant steel fabrication of the structure started about two months ago. We remain on plan to begin equipment installation later this year and for the start of battery pack production in 2016, in partnership with Panasonic.


Q4 & Full Year Results

As always, this letter includes non-GAAP financial information because we plan and manage our business using such information. Our non-GAAP measures align the recognition of revenues and costs related to a vehicle sale with the time when the customer actually gets the car and we receive cash.

Note that this differs from the approach of other automotive manufacturers who under GAAP accounting recognize revenue when the vehicle is sold into dealership inventory rather than to end customers, even though in the case of a captive finance lease they may not collect cash for several years on a consolidated basis.

Our non-GAAP revenue and gross profit is determined by adding back the deferred revenue and related costs for cars sold with residual value guarantee and where we have collected, or will collect from a bank intermediary in a matter of days, the purchase price of the car in cash. For cars leased directly by Tesla, we recognize lease revenue and related costs over the lease term and the same way for both GAAP and non-GAAP purposes. In Q4, Tesla directly leased 647 cars to customers with $65 million of transaction value. Our non-GAAP expense and per share information also exclude non-cash stock-based compensation and interest expense.

Non-GAAP revenue was $1.1 billion for the quarter, up 44% from a year ago, while GAAP revenue was $957 million. Automotive revenue for Q4 includes $42 million of powertrain sales primarily to Daimler. It also includes $86 million of total regulatory credit revenue, of which $66 million came from the sale of ZEV credits.

In 2014, about 55% of new Model S vehicles were delivered into North America. While North American Model S orders grew year-on-year, deliveries were about flat as we directed vehicles into Asia/Pacific (APAC) markets to support our first year of deliveries there. The APAC region represented about 15% of our deliveries for the year, and the remaining 30% of deliveries were to Europe, where delivery volume more than doubled from a year ago. Since we remain production constrained, we manage regional deliveries to balance customer wait times globally.

The average selling price of Model S increased during the quarter, but not as much as expected given the late introduction of P85D, the effect of the strong dollar on foreign sales, and the deferral of revenue related to additional Autopilot functionality that will be implemented in future software releases. Moreover, we offered small discounts when selling our remaining marketing and service loaner vehicles that did not have the desired Autopilot capability, which was recently introduced.

 

We achieved a Q4 total company gross margin of 26.7% on a non-GAAP basis and 27.4% on a GAAP basis. Q4 automotive gross margin excluding ZEV credits was 22.0%, on both a non-GAAP and GAAP basis. Our quarterly average gross margin was pressured roughly half by revenue factors resulting in lower than expected average selling price (as explained above) and half from cost of goods sold factors. Our vehicle warranty reserves were generally consistent with last quarter.

 

Our operating expenses in Q4 were $297 million on a non-GAAP basis and $337 million on a GAAP basis. Non-GAAP operating expenses were up 15% from Q3 mainly because this was a record quarter of global expansion for us. We opened a record 21 new sales and service locations and 125 Superchargers locations during the quarter. Engineering work also continued on Model X and All-Wheel Drive Dual Motor.

   LOGO  

Edinburgh Airport Gets Its First Supercharger

Our Q4 non-GAAP net loss was $16 million, or a loss of $0.13 per share based on 125.5 million basic shares, while the Q4 GAAP net loss was $108 million or a loss of $0.86 per basic share. For full year 2014, our net income was $0.14 per share on a non-GAAP basis and a loss of $2.36 per share on a GAAP basis.

We had a $86 million net cash outflow from operations in Q4 primarily due to a $143 million increase in finished goods inventory primarily for cars in transit, $74 million of growth in accounts receivable related mainly to deliveries late in the quarter and $60 million of cash used for directly leasing vehicles. Capital expenditures in the quarter totaled $369 million, and cash at quarter end, including cash equivalents was $1.9 billion.


2015 Outlook

In 2015, we expect to deliver about 55,000 Model S and X vehicles, representing more than a 70% increase over 2014 deliveries. About 40% of these deliveries are planned for the first half of the year. First quarter production is expected to be about 10,000 vehicles due to it being a shorter quarter than in Q4 and approximately a week of factory downtime to allow the workforce to rest and tooling upgrades. Cars in transit to Europe and Asia must grow to support those markets, so we plan to deliver approximately 9,500 vehicles in Q1, an increase of over 47% from Q1 last year. In Q1, we expect to directly lease about the same percentage of cars that we did in Q4.

We expect that Q1 non-GAAP automotive gross margin should be about 26%, assuming no further strengthening of the US dollar in the latter half of Q1. Given that the euro has weakened another 7% since the beginning of the year, this impacts our gross margin by about 2 percentage points. We also expect GHG/CAFE credits to contribute one less percentage point to our non-GAAP automotive gross margin in 2015, than in Q4. Hence, our gross margin expectation of 26% in Q1 represents a significant improvement resulting from our efforts to increase manufacturing efficiency and deliver a richer mix of products.

In markets where the local currency has declined significantly versus the US dollar, we recently increased prices by only about half that decline. The benefit of this price increase generally begins in Q2 as it applies only to new orders and is not retroactive to the existing book of orders.

Our goal is to continue to improve Model S profitability and we believe we can achieve a 30% gross margin on Model S for Q4 of 2015, even with foreign currency rates at current levels. We expect these gross margin improvements will be partially offset during the introduction of Model X, as Model X gross margin will be suppressed for a few quarters from supply chain and production inefficiencies that are typical of a new product introduction. Eventually we should be able to grow Model X gross margin to a similar level as Model S.

As we continue to invest in the long term growth of Tesla, 2015 capital spending and operating expenses will increase, but at a more moderate pace than last year. Capital expenditures are expected to be about $1.5 billion as we expand production capacity, complete Model X development, and invest in the Gigafactory, our stores and service centers. We also plan to grow our Supercharger network by over 50% this year as well as continue other product development programs, including Model 3.

Operating expenses are expected to grow roughly 12% to 15% sequentially in Q1, driven mainly by increased engineering and design efforts. Growth of sales, general and administrative expenses in Q1 will be more modest as we will be particularly focused on increasing operational efficiency. In total, our operating expense growth should slow significantly. We expect 2015 operating expenses to grow 45% to 50% annually, as compared to doubling in 2014. Overall we expect to achieve a significantly higher level of non-GAAP profitability this year than the prior year, despite a significant increase in Tesla direct leasing, which reduces both our non-GAAP and GAAP profitability.

Starting in 2015, we plan to reorganize the revenue and cost of revenue subsections of our income statement so that automotive revenue and gross margin reflect only new car sales activities, including regulatory credits. Revenues and gross margin for all of our other businesses such as powertrain sales, services, trade-in sales and stationary storage will be captured in the “Services and Other” section of the income statement. This should provide clearer disclosure of our core business of new car production and deliveries.

In total, our customers have now driven their Tesla vehicles over 750 million miles. We are looking forward to achieving significant milestones in 2015, in addition to seeing our customers reach the billion miles driven mark.

 

LOGO    LOGO
Elon Musk, Chairman & CEO    Deepak Ahuja, Chief Financial Officer


Webcast Information

Tesla will provide a live webcast of its fourth quarter and full year 2014 financial results conference call beginning at 4:30 p.m. PT on February 11, 2015, at ir.teslamotors.com. This webcast will also be available for replay for approximately one year thereafter.

Non-GAAP Financial Information

Consolidated financial information has been presented in accordance with GAAP as well as on a non-GAAP basis. On a non-GAAP basis, financial measures exclude non-cash items such as stock-based compensation, the change in fair value related to Tesla’s warrant liability, non-cash interest expense related to Tesla’s convertible senior notes as well as one-time expenses associated with the early repayment of the Department of Energy Loan. Non-GAAP financial measures also exclude the impact of lease accounting on related revenues and cost of revenues associated with Model S deliveries with the resale value guarantee and similar buy-back terms, as this perspective is useful in understanding the underlying cash flow activity and timing of vehicle deliveries. Management believes that it is useful to supplement its GAAP financial statements with this non-GAAP information because management uses such information internally for its operating, budgeting and financial planning purposes. These non-GAAP financial measures also facilitate management’s internal comparisons to Tesla’s historical performance as well as comparisons to the operating results of other companies. Non-GAAP information is not prepared under a comprehensive set of accounting rules and therefore, should only be read in conjunction with financial information reported under U.S. GAAP when understanding Tesla’s operating performance. A reconciliation between GAAP and non-GAAP financial information is provided below.

Forward-Looking Statements

Certain statements in this shareholder letter, including statements in the “Revenue & Gross Margin Expansion Since Model S Introduction” graph and “2015 Outlook” section; statements regarding gross margin expansion and profitability, statements relating to the progress Tesla is making with respect to product development, including future Autopilot features and Model X development and launch plans; statements regarding growth in the number of Tesla store, service center, Supercharger and Destination Charging locations; the timing, order catalysts, pace of production and international delivery expansion for Tesla vehicles, including the production volume, rate, and ramp expectation of our new production lines; growth in demand and orders for Tesla vehicles; the ability to achieve vehicle demand, volume, production, delivery, revenue, leasing, gross margin, spending, capital expenditure and profitability targets; productivity improvements and capacity expansion plans; and Tesla Gigafactory timing, partnerships, plans and output expectations, including those related to cell and battery pack production, are “forward-looking statements” that are subject to risks and uncertainties. These forward-looking statements are based on management’s current expectations, and as a result of certain risks and uncertainties, actual results may differ materially from those projected. The following important factors, without limitation, could cause actual results to differ materially from those in the forward-looking statements: Tesla’s future success depends on its ability to design and achieve market acceptance of Model S and its variants, as well as new vehicle models, specifically Model X and Model 3; the risk of delays in the manufacture, production and delivery of Model S vehicles, including All-Wheel Drive Dual Motor Model S, or the development, production and delivery of Model X and Model 3 vehicles; adverse foreign exchange movements; the ability of suppliers to meet quality and part delivery expectations at increasing volumes; any failures by Tesla vehicles to perform as expected or if product recalls occur; Tesla’s ability to continue to reduce or control manufacturing and other costs; consumers’ willingness to adopt electric vehicles; competition in the automotive market generally and the alternative fuel vehicle market in particular; Tesla’s ability to establish, maintain and strengthen the Tesla brand; Tesla’s ability to manage future growth effectively as we rapidly grow, especially internationally; the unavailability, reduction or elimination of government and economic incentives for electric vehicles; Tesla’s ability to establish, maintain and strengthen its relationships with strategic partners such as Panasonic; potential difficulties in finalizing, performing and realizing potential benefits under definitive agreements for the Tesla Gigafactory site, obtaining permits and incentives, negotiating terms with technology, materials and other partners for Gigafactory, and maintaining Gigafactory implementation schedules, output and costs estimates; and Tesla’s ability to execute on its retail strategy and for new store, service center and Tesla Supercharger openings. More information on potential factors that could affect our financial results is included from time to time in our Securities and Exchange Commission filings and reports, including the risks identified under the section captioned “Risk Factors” in our quarterly report on Form 10-Q filed with the SEC on November 7, 2014. Tesla disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.

 

Investor Relations Contact:      Press Contact:
Jeff Evanson      Khobi Brooklyn
Investor Relations – Tesla      Communications – Tesla
ir@teslamotors.com      press@teslamotors.com


Tesla Motors, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share data)

 

                                                                                         
     Three Months Ended     Year Ended  
     Dec 31,
2014
    Sep 30,
2014
    Dec 31,
2013
    Dec 31,
2014
    Dec 31,
2013
 

Revenues

          

Automotive sales (1A)

   $ 956,661      $ 849,009      $ 610,851      $ 3,192,723      $ 1,997,786   

Development services

     —          2,795        4,368        5,633        15,710   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     956,661        851,804        615,219        3,198,356        2,013,496   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues

          

Automotive sales (1B)

     694,964        598,472        453,578        2,310,011        1,543,878   

Development services

     —          1,481        5,051        6,674        13,356   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues (2)

     694,964        599,953        458,629        2,316,685        1,557,234   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     261,697        251,851        156,590        881,671        456,262   

Operating expenses

          

Research and development (2)

     139,565        135,873        68,454        464,700        231,976   

Selling, general and administrative (2)

     196,970        155,107        101,489        603,660        285,569   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     336,535        290,980        169,943        1,068,360        517,545   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (74,838     (39,129     (13,353     (186,689     (61,283

Interest income

     219        300        92        1,126        189   

Interest expense

     (28,703     (29,062     (6,229     (100,886     (32,934

Other income (expense), net (3)

     (588     (3,090     4,584        1,813        22,602   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (103,910     (70,981     (14,906     (284,636     (71,426

Provision for income taxes

     3,719        3,727        1,358        9,404        2,588   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (107,629   $ (74,708   $ (16,264   $ (294,040   $ (74,014
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per common share, basic and diluted

   $ (0.86   $ (0.60   $ (0.13   $ (2.36   $ (0.62
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in per share calculation, basic and diluted

     125,497        124,911        122,802        124,573        119,421   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Notes:

 

(1) Due to the application of lease accounting for Model S vehicles with the resale value guarantee or similar buy-back terms, the following is supplemental information for the periods presented:

 

                                                                                         

(A)    Net increase in deferred revenue and other long-term liabilities as a result of lease accounting and therefore not recognized in automotive sales

   $ 138,973       $ 80,544       $ 146,125       $ 400,185       $ 464,166   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

(B)    Net increase in operating lease vehicles as a result of lease accounting and therefore not recognized in automotive cost of sales

   $ 110,234       $ 63,981       $ 114,221       $ 312,710       $ 376,979   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  Under lease accounting, warranty costs are expensed as incurred instead of accrued at the time of sale.

 

(2) Includes stock-based compensation expense of the following for the periods presented:

 

                                                                                         

Cost of revenues

   $ 5,053       $ 5,383       $ 3,455       $ 17,454       $ 9,071   

Research and development

     17,595         16,639         10,578         62,601         35,494   

Selling, general and administrative

     21,869         17,136         14,056         76,441         39,090   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total stock-based compensation expense

   $ 44,517       $ 39,158       $ 28,089       $ 156,496       $ 83,655   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(3)  Other income, net, for the year ended December 31, 2013 includes the gain from the elimination of the $10.7 million Department of Energy (DoE) common stock warrant liability.


Tesla Motors, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

 

     Dec 31,
2014
     Dec 31,
2013
 

Assets

     

Cash and cash equivalents

   $ 1,905,713       $ 845,889   

Restricted cash and marketable securities - current

     17,947         3,012   

Accounts receivable

     226,604         49,109   

Inventory

     953,675         340,355   

Prepaid expenses and other current assets

     94,718         27,574   

Operating lease vehicles, net (1)

     766,744         382,425   

Property and equipment, net

     1,829,267         738,494   

Restricted cash - noncurrent

     11,374         6,435   

Other assets

     43,209         23,637   
  

 

 

    

 

 

 

Total assets

   $ 5,849,251       $ 2,416,930   
  

 

 

    

 

 

 

Liabilities and Stockholders’ Equity

     

Accounts payable and accrued liabilities

   $ 1,046,830       $ 412,221   

Deferred revenue (2)

     483,922         273,062   

Customer deposits

     257,587         163,153   

Capital lease obligations

     21,799         20,577   

Long-term debt

     2,408,084         586,301   

Other long-term liabilities (3)

     661,123         294,495   
  

 

 

    

 

 

 

Total liabilities

     4,879,345         1,749,809   

Mezzanine equity (4)

     58,196         —     

Stockholders’ equity

     911,710         667,121   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 5,849,251       $ 2,416,930   
  

 

 

    

 

 

 

Notes:

     

(1)     Includes the following increase in operating lease vehicles related to deliveries of Model S and subject to lease accounting, net of depreciation recognized in automotive cost of sales, for the following periods:

     

         Resale value guarantee program (and other vehicles with similar buy-back terms)

     

         Beginning balance

   $ 376,979       $ —     

         First quarter

     69,743         —     

         Second quarter

     68,752         123,919   

         Third quarter

     63,981         138,839   

         Fourth quarter

     110,234         114,221   
  

 

 

    

 

 

 

         Ending balance

   $ 689,689       $ 376,979   
  

 

 

    

 

 

 

         Model S leasing program

     

         Beginning balance

   $ —        

         First quarter

     —        

         Second quarter

     11,214      

         Third quarter

     23,824      

         Fourth quarter

     46,598      
  

 

 

    

         Ending balance

   $ 81,636      
  

 

 

    

(2)     Includes the following increase in deferred revenue related to deliveries of Model S with the resale value guarantee or similar buy-back terms and subject to lease accounting, net of revenue amortized to automotive sales, for the following periods:

     

         Beginning balance

   $ 227,868       $ —     

         First quarter

     38,188         —     

         Second quarter

     33,586         74,455   

         Third quarter

     27,993         84,577   

         Fourth quarter

     48,836         68,836   
  

 

 

    

 

 

 

         Ending balance

   $ 376,471       $ 227,868   
  

 

 

    

 

 

 

(3)     Includes the following increase in other long-term liabilities related to deliveries of Model S with the resale value guarantee or similar buy-back terms and subject to lease accounting for the following periods:

     

         Beginning balance

   $ 236,298       $ —     

         First quarter

     54,318         —     

         Second quarter

     54,575         72,357   

         Third quarter

     52,551         86,652   

         Fourth quarter

     90,137         77,289   
  

 

 

    

 

 

 

         Ending balance

   $ 487,879       $ 236,298   
  

 

 

    

 

 

 

 

(4) Our common stock price exceeded the conversion threshold price of our convertible senior notes due 2018 (2018 Notes) issued in May 2013; therefore, the 2018 Notes are convertible at the holder’s option during the first quarter of 2015. As such, the carrying value of the 2018 Notes was classified as a current liability as of December 31, 2014 and the difference between the principal amount and the carrying value of the 2018 Notes was reflected as convertible debt in mezzanine equity on our condensed consolidated balance sheet as of December 31, 2014.


Tesla Motors, Inc.

Supplemental Consolidated Financial Information

(Unaudited)

(In thousands)

 

     Three Months Ended     Year Ended  
     Dec 31,
2014
    Sep 30,
2014
    Dec 31,
2013
    Dec 31,
2014
    Dec 31,
2013
 

Selected Cash Flow Information

          

Cash flows provided by (used in) operating activities (1)

   $ (86,402   $ (27,996   $ 133,987      $ (57,337   $ 264,804   

Cash flows used in investing activities

     (372,231     (291,643     (89,507     (990,444     (249,417

Cash flows provided by financing activities

     11,325        33,755        10,517        2,143,130        635,422   

Other Selected Financial Information

          

Cash flows provided by (used in) operating activities (1)

   $ (86,402   $ (27,996   $ 133,987      $ (57,337   $ 264,804   

Capital expenditures

     (368,661     (284,175     (89,435     (969,885     (264,224
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow (cash flow from operations plus capital expenditures) (1)

   $ (455,063   $ (312,171   $ 44,552      $ (1,027,222   $ 580   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Depreciation and amortization

   $ 67,976      $ 64,972      $ 37,585      $ 231,931      $ 106,083   
     Dec 31,
2014
    Sep 30,
2014
    Dec 31,
2013
       

Cash and Investments

        

Cash and cash equivalents

   $ 1,905,713      $ 2,370,735      $ 845,889     

Restricted cash and marketable securities - current

     17,947        17,331        3,012     

Restricted cash - noncurrent

     11,374        9,090        6,435     

(1)     During the three months ended June 30, 2014, we began separately presenting the effect of exchange rate changes on our cash and cash equivalents in our condensed consolidated statement of cash flows due to our growing operations in foreign currency environments. Prior period amounts have been reclassified to conform to the current period presentation.

          

 

Supplemental Model S Leasing Program Information

(in thousands, except for vehicle deliveries)

  

  

 
     Three Months Ended           Twelve Months
Ended
       
     Dec 31,
2014
    Sep 30,
2014
          Dec 31,
2014
   

Vehicles delivered

     647        347          1,152     

Average per unit price of vehicles delivered

   $ 101      $ 99        $ 101     
  

 

 

   

 

 

     

 

 

   

Aggregate value of vehicles delivered (1)

   $ 65,246      $ 34,353        $ 115,782     
  

 

 

   

 

 

     

 

 

   

Leasing revenue recognized

   $ 2,993      $ 1,117        $ 4,280     

 

(1)  Aggregate value is the product of multiplying vehicles delivered by the average per unit price of vehicles delivered


Tesla Motors, Inc.

Reconciliation of GAAP to Non-GAAP Financial Information

(Unaudited)

(In thousands, except per share data)

 

     Three Months Ended     Year Ended  
     Dec 31,
2014
    Sep 30,
2014
    Dec 31,
2013
    Dec 31,
2014
    Dec 31,
2013
 

Net loss (GAAP)

   $ (107,629   $ (74,708   $ (16,264   $ (294,040   $ (74,014

Stock-based compensation expense

     44,517        39,158        28,089        156,496        83,655   

Change in fair value of warrant liability

     —          —          —          —          (10,692

Non-cash interest expense related to convertible notes

     20,826        22,160        4,299        75,019        10,350   

Early extinguishment of DoE loans

     —          —          —          —          16,386   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) (Non-GAAP) including lease accounting

     (42,286     (13,390     16,124        (62,525     25,685   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Model S gross profit deferred due to lease accounting (1)(2)

     26,072        16,564        29,796        82,626        77,878   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) (Non-GAAP)

   $ (16,214   $ 3,174      $ 45,920      $ 20,101      $ 103,563   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share, basic (GAAP)

   $ (0.86   $ (0.60   $ (0.13   $ (2.36   $ (0.62

Stock-based compensation expense

     0.35        0.31        0.23        1.26        0.70   

Change in fair value of warrant liability

     —          —          —          —          (0.09

Non-cash interest expense related to convertible notes

     0.17        0.18        0.03        0.60        0.09   

Early extinguishment of DoE loans

     —          —          —          —          0.14   

Model S gross profit deferred due to lease accounting (1)(2)

     0.21        0.13        0.24        0.66        0.65   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share, basic (Non-GAAP)

   $ (0.13   $ 0.02      $ 0.37      $ 0.16      $ 0.87   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in per share calculation, basic (GAAP and Non-GAAP)

     125,497        124,911        122,802        124,573        119,421   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share, diluted (GAAP)

   $ (0.86   $ (0.52   $ (0.12   $ (2.07   $ (0.55

Stock-based compensation expense

     0.35        0.27        0.20        1.10        0.63   

Change in fair value of warrant liability

     —          —          —          —          (0.08

Non-cash interest expense related to convertible notes

     0.17        0.15        0.03        0.53        0.08   

Early extinguishment of DoE loans

     —          —          —          —          0.12   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) (Non-GAAP) including lease accounting

     (0.34     (0.10     0.11        (0.44     0.20   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Model S gross profit deferred due to lease accounting (1)(2)

     0.21        0.12        0.22        0.58        0.58   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share, diluted (Non-GAAP)

   $ (0.13   $ 0.02      $ 0.33      $ 0.14      $ 0.78   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in per share calculation, diluted (Non-GAAP)

     125,497        142,747        137,784        142,221        133,546   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Under GAAP, warranty costs are expensed as incurred for Model S vehicle deliveries with the resale value guarantee or similar buy-back terms and subject to lease accounting. For Non-GAAP purposes, an estimated incremental warranty reserve of $5.5 million, $3.6 million and $3.2 million is included for the three months ended December 31, 2014, September 30, 2014 and December 31, 2013, respectively. For the year ended December 31, 2014 and 2013, an estimated incremental warranty reserve of $14.6 million and $12.2 million is included, respectively. Additionally, stock-based compensation of $1.0 million, $1.0 million and $1.1 million is excluded for non-GAAP purposes for the three months ended December 31, 2014, September 30, 2014 and December 31, 2013, respectively. For the year ended December 31, 2014 and 2013, stock-based compensation of $3.4 million and $2.9 million is excluded, respectively.

 

(2) Includes deliveries of Model S with the resale value guarantee or similar buy-back terms and not deliveries under the Model S leasing program.


Tesla Motors, Inc.

Reconciliation of GAAP to Non-GAAP Financial Information

(Unaudited)

(In thousands, except per share data)

 

     Three Months Ended     Year Ended  
     Dec 31,
2014
    Sep 30,
2014
    Dec 31,
2013
    Dec 31,
2014
    Dec 31,
2013
 

Revenues (GAAP)

   $ 956,661      $ 851,804      $ 615,219      $ 3,198,356      $ 2,013,496   

Model S revenue deferred due to lease accounting (2)

     138,973        80,544        146,125        400,185        464,166   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Revenues (Non-GAAP)

   $ 1,095,634      $ 932,348      $ 761,344      $ 3,598,541      $ 2,477,662   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit (GAAP)

   $ 261,697      $ 251,851      $ 156,590      $ 881,671      $ 456,262   

Model S gross profit deferred due to lease accounting (1)(2)

     26,072        16,564        29,796        82,626        77,878   

Stock-based compensation expense

     5,053        5,383        3,455        17,455        9,071   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit (Non-GAAP)

   $ 292,822      $ 273,798      $ 189,841      $ 981,752      $ 543,211   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Research and development expenses (GAAP)

   $ 139,565      $ 135,873      $ 68,454      $ 464,700      $ 231,976   

Stock-based compensation expense

     (17,595     (16,639     (10,578     (62,601     (35,494
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Research and development expenses (Non-GAAP)

   $ 121,970      $ 119,234      $ 57,876      $ 402,099      $ 196,482   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Selling, general and administrative expenses (GAAP)

   $ 196,970      $ 155,107      $ 101,489      $ 603,660      $ 285,569   

Stock-based compensation expense

     (21,869     (17,136     (14,056     (76,441     (39,090
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Selling, general and administrative expenses (Non-GAAP)

   $ 175,101      $ 137,971      $ 87,433      $ 527,219      $ 246,479   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Under GAAP, warranty costs are expensed as incurred for Model S vehicle deliveries with the resale value guarantee or similar buy-back terms and subject to lease accounting. For Non-GAAP purposes, an estimated incremental warranty reserve of $5.5 million, $3.6 million and $3.2 million is included for the three months ended December 31, 2014, September 30, 2014 and December 31, 2013, respectively. For the year ended December 31, 2014 and 2013, an estimated incremental warranty reserve of $14.6 million and $12.2 million is included, respectively. Additionally, stock-based compensation of $1.0 million, $1.0 million and $1.1 million is excluded for non-GAAP purposes for the three months ended December 31, 2014, September 30, 2014 and December 31, 2013, respectively. For the year ended December 31, 2014 and 2013, stock-based compensation of $3.4 million and $2.9 million is excluded, respectively.

 

(2) Includes deliveries of Model S with the resale value guarantee or similar buy-back terms and not deliveries under the Model S leasing program.
Close
The content provided on Two Margins is for information purposes only and does not constitute investment and/or legal advice. Crypto currencies are highly volatile, risky assets and no information on this site, whether generated by Two Margins or external contributors, is a substitute for your own research. Full Risk Disclosure and Disclaimer here.