VIVINT SOLAR, INC., 10-K filed on 3/13/2015
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2014
Mar. 2, 2015
Jun. 30, 2014
Document And Entity Information [Abstract]
 
 
 
Document Type
10-K 
 
 
Amendment Flag
false 
 
 
Document Period End Date
Dec. 31, 2014 
 
 
Document Fiscal Year Focus
2014 
 
 
Document Fiscal Period Focus
FY 
 
 
Trading Symbol
VSLR 
 
 
Entity Registrant Name
Vivint Solar, Inc. 
 
 
Entity Central Index Key
0001607716 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Current Reporting Status
No 
 
 
Entity Voluntary Filers
No 
 
 
Entity Filer Category
Non-accelerated Filer 
 
 
Entity Common Stock, Shares Outstanding
 
105,303,122 
 
Entity Public Float
 
 
$ 0 1
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Current assets:
 
 
Cash and cash equivalents
$ 261,649 
$ 6,038 
Accounts receivable, net
1,837 
608 
Inventories
774 
 
Prepaid expenses and other current assets
16,806 
5,938 
Total current assets
281,066 
12,584 
Restricted cash
6,516 
5,000 
Solar energy systems, net
588,167 
188,058 
Property and equipment, net
13,024 
3,640 
Intangible assets, net
18,487 
27,364 
Goodwill
36,601 
29,545 
Prepaid tax asset, net
111,910 
30,738 
Other non-current assets, net
8,553 
778 
TOTAL ASSETS
1,064,324 1
297,707 1
Current liabilities:
 
 
Accounts payable
51,354 
25,356 
Accounts payable—related party
2,132 
3,068 
Distributions payable to non-controlling interests and redeemable non-controlling interests
6,780 
1,576 
Accrued compensation
16,794 
15,491 
Current portion of deferred revenue
314 
68 
Current portion of capital lease obligation
3,502 
1,275 
Accrued and other current liabilities
14,016 
10,307 
Total current liabilities
94,892 
57,141 
Capital lease obligation, net of current portion
6,176 
2,486 
Revolving lines of credit—related party
 
41,412 
Long-term debt
105,000 
 
Deferred tax liability, net
112,227 
41,510 
Deferred revenue, net of current portion
4,466 
1,272 
Total liabilities
322,761 1
143,821 1
Commitments and contingencies (Note 16)
   
   
Redeemable non-controlling interests
128,427 
73,265 
Stockholders' equity:
 
 
Common stock, $0.01 par value—1,000,000 authorized, 105,303 shares issued and outstanding as of December 31, 2014; 100,000 authorized, 75,000 shares issued and outstanding as of December 31, 2013
1,053 
750 
Additional paid-in capital
502,785 
75,049 
(Accumulated deficit) retained earnings
(25,849)
3,034 
Total stockholders' equity
477,989 
78,833 
Non-controlling interests
135,147 
1,788 
Total equity
613,136 
80,621 
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY
$ 1,064,324 
$ 297,707 
[1] The Company’s consolidated assets as of December 31, 2014 and 2013 include $540.1 million and $156.2 million consisting of assets of variable interest entities, or VIEs, that can only be used to settle obligations of the VIEs. These assets include solar energy systems, net, of $525.9 million and $152.6 million as of December 31, 2014 and 2013; cash and cash equivalents of $12.6 million and $3.1 million as of December 31, 2014 and 2013; and accounts receivable, net, of $1.6 million and $0.5 million as of December 31, 2014 and 2013. The Company’s consolidated liabilities as of December 31, 2014 and 2013 included $11.4 million and $2.9 million of liabilities of VIEs whose creditors have no recourse to the Company. These liabilities include distributions payable to non-controlling interests and redeemable non-controlling interests of $6.8 million and $1.6 million as of December 31, 2014 and 2013; and deferred revenue of $4.6 million and $1.3 million as of December 31, 2014 and 2013. See further description in Note 11—Investment Funds.
Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2014
Dec. 31, 2013
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
1,000,000,000 
100,000,000 
Common stock, shares issued
105,303,000 
75,000,000 
Common stock, shares outstanding
105,303,000 
75,000,000 
Total assets
$ 1,064,324,000 1
$ 297,707,000 1
Solar energy systems, net
588,167,000 
188,058,000 
Cash and cash equivalents
261,649,000 
6,038,000 
Accounts receivable, net
1,837,000 
608,000 
Total liabilities
322,761,000 1
143,821,000 1
Distributions payable to non-controlling interests and redeemable non-controlling interests
6,780,000 
1,576,000 
Variable Interest Entities
 
 
Total assets
540,086,000 
156,201,000 
Solar energy systems, net
525,903,000 
152,565,000 
Cash and cash equivalents
12,641,000 
3,092,000 
Accounts receivable, net
1,542,000 
544,000 
Total liabilities
11,352,000 
2,916,000 
Distributions payable to non-controlling interests and redeemable non-controlling interests
6,780,000 
1,576,000 
Deferred revenue
$ 4,600,000 
$ 1,300,000 
[1] The Company’s consolidated assets as of December 31, 2014 and 2013 include $540.1 million and $156.2 million consisting of assets of variable interest entities, or VIEs, that can only be used to settle obligations of the VIEs. These assets include solar energy systems, net, of $525.9 million and $152.6 million as of December 31, 2014 and 2013; cash and cash equivalents of $12.6 million and $3.1 million as of December 31, 2014 and 2013; and accounts receivable, net, of $1.6 million and $0.5 million as of December 31, 2014 and 2013. The Company’s consolidated liabilities as of December 31, 2014 and 2013 included $11.4 million and $2.9 million of liabilities of VIEs whose creditors have no recourse to the Company. These liabilities include distributions payable to non-controlling interests and redeemable non-controlling interests of $6.8 million and $1.6 million as of December 31, 2014 and 2013; and deferred revenue of $4.6 million and $1.3 million as of December 31, 2014 and 2013. See further description in Note 11—Investment Funds.
Consolidated Statements of Operations (USD $)
Share data in Thousands, except Per Share data, unless otherwise specified
1 Months Ended 12 Months Ended 11 Months Ended
Dec. 31, 2012
Dec. 31, 2014
Dec. 31, 2013
Nov. 16, 2012
Predecessor
Revenue:
 
 
 
 
Operating leases and incentives
$ 109,000 
$ 21,688,000 
$ 5,864,000 
$ 183,000 
Solar energy system and product sales
 
3,570,000 
306,000 
157,000 
Total revenue
109,000 
25,258,000 
6,170,000 
340,000 
Operating expenses:
 
 
 
 
Cost of revenue—operating leases and incentives
1,018,000 
67,984,000 
19,004,000 
3,302,000 
Cost of revenue—solar energy system and product sales
 
1,997,000 
123,000 
95,000 
Sales and marketing
533,000 
21,869,000 
7,348,000 
1,471,000 
Research and development
 
1,892,000 
 
 
General and administrative
971,000 
78,899,000 
16,438,000 
7,789,000 
Amortization of intangible assets
1,824,000 
14,911,000 
14,595,000 
 
Total operating expenses
4,346,000 
187,552,000 
57,508,000 
12,657,000 
Loss from operations
(4,237,000)
(162,294,000)
(51,338,000)
(12,317,000)
Interest expense
96,000 
9,323,000 
3,144,000 
881,000 
Other expense
44,000 
1,372,000 
1,865,000 
240,000 
Loss before income taxes
(4,377,000)
(172,989,000)
(56,347,000)
(13,438,000)
Income tax (benefit) expense
(1,074,000)
(7,070,000)
123,000 
7,000 
Net loss
(3,303,000)
(165,919,000)
(56,470,000)
(13,445,000)
Net loss attributable to non-controlling interests and redeemable non-controlling interests
(699,000)
(137,036,000)
(62,108,000)
(1,771,000)
Net (loss attributable) income available to stockholders
(2,604,000)
(28,883,000)
5,638,000 
(11,674,000)
Accretion to redemption value of Series B redeemable preferred stock
 
 
 
(20,000,000)
Net (loss attributable) income available to common stockholders
$ (2,604,000)
$ (28,883,000)
$ 5,638,000 
$ (31,674,000)
Net (loss attributable) income available per share to common stockholders:
 
 
 
 
Basic
$ (0.03)
$ (0.35)
$ 0.08 
$ (0.42)
Diluted
$ (0.03)
$ (0.35)
$ 0.07 
$ (0.42)
Weighted-average shares used in computing net (loss attributable) income available per share to common stockholders:
 
 
 
 
Basic
75,000 
83,446 
75,000 
75,000 
Diluted
75,000 
83,446 
75,223 
75,000 
Consolidated Statements of Redeemable Preferred Stock, Redeemable Non-Controlling Interests and Equity (USD $)
In Thousands
Total
USD ($)
Predecessor
USD ($)
Series B Redeemable Preferred Stock
Predecessor
USD ($)
Series A Preferred Stock
Predecessor
Redeemable Non-Controlling Interests
USD ($)
Redeemable Non-Controlling Interests
Predecessor
USD ($)
Common Stock
USD ($)
Common Stock
Predecessor
USD ($)
Additional Paid-in Capital
USD ($)
Additional Paid-in Capital
Predecessor
USD ($)
Retained Earnings (Accumulated Deficit)
USD ($)
Retained Earnings (Accumulated Deficit)
Predecessor
USD ($)
Total Stockholders Equity (Deficit)
USD ($)
Total Stockholders Equity (Deficit)
Predecessor
USD ($)
Non-Controlling Interests
USD ($)
Balance at Dec. 31, 2011
 
$ (785)
$ 5,000 
 
 
$ 224 
 
$ 1 
 
$ 1,378 
 
$ (2,164)
 
$ (785)
 
Balance (in Shares) at Dec. 31, 2011
 
 
25 
 
 
 
50 
 
 
 
 
 
 
 
Issuance of Series B redeemable preferred stock
 
 
5,000 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of Series B redeemable preferred stock (in Shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accretion to redemption value of Series B redeemable preferred stock
 
(20,000)
20,000 
 
 
 
 
 
 
(5,542)
 
(14,458)
 
(20,000)
 
Stock-based compensation expense
 
155 
 
 
 
 
 
 
 
155 
 
 
 
155 
 
Noncash contributions for services
 
4,009 
 
 
 
 
 
 
 
4,009 
 
 
 
4,009 
 
Contributions from non-controlling interests and redeemable non-controlling interests
 
 
 
 
 
9,193 
 
 
 
 
 
 
 
 
 
Distributions to non-controlling interests and redeemable non-controlling interests
 
 
 
 
 
(197)
 
 
 
 
 
 
 
 
 
Net (loss attributable) income available to stockholders
 
(11,674)
 
 
 
 
 
 
 
 
 
(11,674)
 
(11,674)
 
Net loss attributable to non-controlling interests and redeemable non-controlling interests
 
 
 
 
 
(1,771)
 
 
 
 
 
 
 
 
 
Balance at Nov. 16, 2012
 
(28,295)
30,000 
 
 
7,449 
 
 
 
 
(28,296)
 
(28,295)
 
Balance (in Shares) at Nov. 16, 2012
 
 
25 
 
 
 
50 
 
 
 
 
 
 
 
Noncash capital contribution related to the Acquisition
73,130 
 
 
 
10,620 
 
750 
 
72,380 
 
 
 
73,130 
 
 
Noncash capital contribution related to the Acquisition (in Shares)
 
 
 
 
 
 
75,000 
 
 
 
 
 
 
 
 
Noncash contributions for services
797 
 
 
 
 
 
 
 
797 
 
 
 
797 
 
 
Contributions from non-controlling interests and redeemable non-controlling interests
 
 
 
 
8,147 
 
 
 
 
 
 
 
 
 
 
Distributions to non-controlling interests and redeemable non-controlling interests
 
 
 
 
(327)
 
 
 
 
 
 
 
 
 
 
Net (loss attributable) income available to stockholders
(2,604)
 
 
 
 
 
 
 
 
 
(2,604)
 
(2,604)
 
 
Net loss attributable to non-controlling interests and redeemable non-controlling interests
 
 
 
 
(699)
 
 
 
 
 
 
 
 
 
 
Balance at Dec. 31, 2012
71,323 
 
 
 
17,741 
 
750 
 
73,177 
 
(2,604)
 
71,323 
 
 
Balance (in Shares) at Dec. 31, 2012
 
 
 
 
 
 
75,000 
 
 
 
 
 
 
 
 
Stock-based compensation expense
294 
 
 
 
 
 
 
 
294 
 
 
 
294 
 
 
Noncash contributions for services
160 
 
 
 
 
 
 
 
160 
 
 
 
160 
 
 
Capital contribution from Parent
1,418 
 
 
 
 
 
 
 
1,418 
 
 
 
1,418 
 
 
Contributions from non-controlling interests and redeemable non-controlling interests
60,000 
 
 
 
63,154 
 
 
 
 
 
 
 
 
 
60,000 
Distributions to non-controlling interests and redeemable non-controlling interests
(670)
 
 
 
(3,064)
 
 
 
 
 
 
 
 
 
(670)
Net (loss attributable) income available to stockholders
(51,904)
 
 
 
 
 
 
 
 
 
5,638 
 
5,638 
 
(57,542)
Net loss attributable to non-controlling interests and redeemable non-controlling interests
 
 
 
 
(4,566)
 
 
 
 
 
 
 
 
 
 
Balance at Dec. 31, 2013
80,621 
 
 
 
73,265 
 
750 
 
75,049 
 
3,034 
 
78,833 
 
1,788 
Balance (in Shares) at Dec. 31, 2013
75,000 
 
 
 
 
 
75,000 
 
 
 
 
 
 
 
 
Stock-based compensation expense
23,687 
 
 
 
 
 
 
 
23,687 
 
 
 
23,687 
 
 
Noncash contributions for services
200 
 
 
 
 
 
 
 
200 
 
 
 
200 
 
 
Issuance of common stock, net of costs
412,912 
 
 
 
 
 
303 
 
412,609 
 
 
 
412,912 
 
 
Issuance of common stock (in shares)
 
 
 
 
 
 
30,303 
 
 
 
 
 
 
 
 
Costs Related to Issuance of Common Stock
(8,760)
 
 
 
 
 
 
 
(8,760)
 
 
 
(8,760)
 
 
Contributions from non-controlling interests and redeemable non-controlling interests
275,777 
 
 
 
63,735 
 
 
 
 
 
 
 
 
 
275,777 
Deemed dividend
43,430 
 
 
 
 
 
 
 
43,430 
 
 
 
43,430 
 
 
Return of capital adjustment
(43,430)
 
 
 
 
 
 
 
(43,430)
 
 
 
(43,430)
 
 
Distributions to non-controlling interests and redeemable non-controlling interests
(8,801)
 
 
 
(5,154)
 
 
 
 
 
 
 
 
 
(8,801)
Net (loss attributable) income available to stockholders
(162,500)
 
 
 
 
 
 
 
 
 
(28,883)
 
(28,883)
 
(133,617)
Net loss attributable to non-controlling interests and redeemable non-controlling interests
 
 
 
 
(3,419)
 
 
 
 
 
 
 
 
 
 
Balance at Dec. 31, 2014
$ 613,136 
 
 
 
$ 128,427 
 
$ 1,053 
 
$ 502,785 
 
$ (25,849)
 
$ 477,989 
 
$ 135,147 
Balance (in Shares) at Dec. 31, 2014
105,303 
 
 
 
 
 
105,303 
 
 
 
 
 
 
 
 
Consolidated Statements of Cash Flows (USD $)
1 Months Ended 12 Months Ended 11 Months Ended
Dec. 31, 2012
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2014
Solar energy system sales
Dec. 31, 2013
Solar energy system sales
Nov. 16, 2012
Predecessor
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
Net loss
$ (3,303,000)
$ (165,919,000)
$ (56,470,000)
 
 
$ (13,445,000)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
 
 
Depreciation and amortization
18,000 
8,523,000 
1,984,000 
 
 
72,000 
Amortization of intangible assets
1,824,000 
15,042,000 
14,595,000 
 
 
 
Stock-based compensation
 
23,687,000 
294,000 
 
 
155,000 
Amortization of deferred financing costs
 
2,232,000 
 
 
 
161,000 
Noncash contributions for services
797,000 
200,000 
160,000 
 
 
4,009,000 
Noncash interest expense
 
4,280,000 
2,930,000 
 
 
 
Deferred income taxes
(1,075,000)
74,848,000 
30,927,000 
 
 
 
Changes in operating assets and liabilities, net of acquisitions:
 
 
 
 
 
 
Accounts receivable, net
(52,000)
(1,018,000)
(512,000)
 
 
(41,000)
Inventories
 
(195,000)
 
 
 
 
Prepaid expenses and other current assets
(102,000)
(10,486,000)
(3,605,000)
 
 
(988,000)
Prepaid tax asset, net
 
(81,172,000)
(30,738,000)
 
 
 
Other non-current assets, net
(19,000)
(8,451,000)
(741,000)
 
 
(9,000)
Accounts payable
286,000 
1,905,000 
1,425,000 
 
 
363,000 
Accounts payable—related party
741,000 
(935,000)
2,592,000 
 
 
1,701,000 
Accrued compensation
498,000 
(1,073,000)
10,367,000 
 
 
375,000 
Deferred revenue
 
3,387,000 
1,340,000 
 
 
 
Accrued and other current liabilities
(822,000)
(773,000)
4,579,000 
 
 
4,757,000 
Net cash used in operating activities
(1,209,000)
(135,918,000)
(20,873,000)
 
 
(2,890,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
Payments for the cost of solar energy systems
(11,083,000)
(383,522,000)
(134,138,000)
 
 
(18,306,000)
Payment in connection with business acquisition, net of cash acquired
 
(12,040,000)
 
 
 
 
Payments for property and equipment
 
(3,505,000)
 
 
 
 
Change in restricted cash
 
(1,516,000)
(3,500,000)
 
 
(152,000)
Purchase of intangible assets
 
(370,000)
 
 
 
 
Proceeds from U.S. Treasury grants
3,069,000 
190,000 
10,116,000 
 
 
3,150,000 
Net cash used in investing activities
(8,014,000)
(400,763,000)
(127,522,000)
 
 
(15,308,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
Proceeds from issuance of common stock
 
412,912,000 
 
 
 
 
Payments for deferred offering costs
 
(8,066,000)
 
 
 
 
Proceeds from investment by non-controlling interests and redeemable non-controlling interests
8,147,000 
339,512,000 
123,154,000 
 
 
9,193,000 
Distributions paid to non-controlling interests and redeemable non-controlling interests
(274,000)
(8,751,000)
(2,284,000)
 
 
(80,000)
Proceeds from long-term debt
 
105,000,000 
 
 
 
 
Proceeds from short-term debt
 
75,500,000 
 
 
 
 
Payments on short-term debt
 
(75,500,000)
 
 
 
 
Proceeds from revolving lines of credit—related party
15,000,000 
154,500,000 
83,482,000 
 
 
 
Payments on revolving lines of credit—related party
 
(200,192,000)
(60,000,000)
 
 
 
Proceeds from revolving line of credit
2,500,000 
 
 
 
 
4,000,000 
Payments on revolving lines of credit
(4,500,000)
 
(2,000,000)
 
 
 
Principal payments on capital lease obligations
 
(2,623,000)
(987,000)
 
 
 
Capital contribution from Parent
 
 
1,418,000 
 
 
 
Proceeds from issuance of redeemable preferred stock
 
 
 
 
 
5,000,000 
Net cash provided by financing activities
20,873,000 
792,292,000 
142,783,000 
 
 
18,113,000 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
11,650,000 
255,611,000 
(5,612,000)
 
 
(85,000)
CASH AND CASH EQUIVALENTS—Beginning of period
 
6,038,000 
11,650,000 
 
 
85,000 
CASH AND CASH EQUIVALENTS—End of period
11,650,000 
261,649,000 
6,038,000 
 
 
 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
 
 
 
 
 
 
Cash paid for interest
96,000 
4,473,000 
206,000 
 
 
313,000 
Cash paid for income taxes
 
4,350,000 
4,000 
 
 
1,000 
NONCASH INVESTING AND FINANCING ACTIVITIES:
 
 
 
 
 
 
Vehicles acquired under capital leases
 
8,541,000 
4,749,000 
 
 
 
Accretion to redemption value of Series B redeemable preferred stock
 
 
 
 
 
20,000,000 
Accrued distributions to non-controlling interests and redeemable non-controlling interests
53,000 
5,204,000 
1,450,000 
 
 
117,000 
Capital contribution related to the Acquisition
71,658,000 
 
 
 
 
 
Costs of solar energy systems included in accounts payable, accrued compensation and other accrued liabilities
(439,000)
25,990,000 
19,946,000 
 
 
13,243,000 
Receivable for tax credit recorded as a reduction to solar energy system costs
 
 
 
$ 4,132,000 
$ 2,122,000 
 
Organization
Organization

1.

Organization

Vivint Solar, Inc. (the “Company” and formerly known as V Solar Holdings, Inc.) was incorporated as a Delaware corporation on August 12, 2011. Vivint Solar, Inc. and its subsidiaries are collectively referred to as the “Company.” The Company commenced operations in May 2011. The Company offers solar energy to residential customers through long-term customer contracts, such as power purchase agreements and solar energy system leases. The Company enters into these long-term customer contracts through a sales organization that uses a direct-to-home sales model. The long-term customer contracts are typically for 20 years and require the customer to make monthly payments to the Company. Through the acquisition of Solmetric Corporation (“Solmetric”) in the first quarter of 2014, the Company also offers photovoltaic installation software products and devices.

The Company has formed various investment funds and entered into a long-term debt facility to monetize the recurring customer payments under its long-term customer contracts and the investment tax credits, accelerated tax depreciation and other incentives associated with residential solar energy systems. The Company uses the cash received from the investment funds to finance a portion of the Company’s variable and fixed costs associated with installing the residential solar energy systems. In addition, the obligations of the Company are in no event obligations of the investment funds.

On November 16, 2012 (the “Acquisition Date”), investment funds affiliated with The Blackstone Group L.P. (the “Sponsor”) and certain co-investors (collectively, the “Investors”), through 313 Acquisition LLC (“313” or “Parent”), acquired 100% of the equity interests of APX Group, Inc. (“Vivint”) and the Company (the “Acquisition”). The Acquisition was accomplished through certain mergers and related reorganization transactions pursuant to which the Company became a direct wholly owned subsidiary of 313, an entity owned by the Investors. The impact of the mergers resulted in a change to the Company’s capital structure which is reflected as a noncash capital contribution related to the Acquisition in the Company’s consolidated statements of redeemable preferred stock, redeemable non-controlling interests and equity. See Note 4—Business Acquisitions.

Since inception and continuing after the Acquisition, the Company has relied upon Vivint and certain of its affiliates for many of its administrative, managerial, account management and operational services. The Company was consolidated by Vivint as a variable interest entity prior to the Acquisition, and continues to be an affiliated entity and related party subsequent to the Acquisition. The Company has entered into various agreements and transactions with Vivint and its affiliates related to these services. See Note 15—Related Party Transactions.

Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

2.

Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect the accounts and operations of the Company, its subsidiaries in which the Company has a controlling financial interest and the investment funds formed to fund the purchase of solar energy systems, which are consolidated as variable interest entities (“VIEs”). The Company uses a qualitative approach in assessing the consolidation requirement for VIEs. This approach focuses on determining whether the Company has the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance and whether the Company has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. For all periods presented, the Company has determined that it is the primary beneficiary in all of its operational VIEs. The Company evaluates its relationships with the VIEs on an ongoing basis to ensure that it continues to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. For additional information regarding these VIEs, see Note 11—Investment Funds.

The years ended December 31, 2014 and 2013 and the period from November 17, 2012 through December 31, 2012 are referred to as the Successor Periods or Successor and the period from January 1, 2012 through November 16, 2012 as the Predecessor Period or Predecessor. The consolidated financial statements are presented as four separate periods: the years ended December 31, 2014 and 2013, the period from November 17, 2012 through December 31, 2012 and the Predecessor Period. The Company’s assets and liabilities were adjusted to fair value on the closing date of the Acquisition by application of push-down accounting. Due to the change in the basis of accounting resulting from the Acquisition, the consolidated financial statements for the Successor Periods and the Predecessor Period are not necessarily comparable.


The consolidated financial statements reflect all of the costs of doing business, including the allocation of expenses incurred by Vivint on behalf of the Company. For additional information, see Note 15—Related Party Transactions. These expenses were allocated to the Company on a basis that was considered to reasonably reflect the utilization of the services provided to, or the benefit obtained by, the Company. The allocations may not, however, reflect the expense the Company would have incurred as an independent company for the periods presented, and may not be indicative of the Company’s future results of operations and financial position.

Stock Split

In July 2013, the board of directors approved a 750,000-for-1 stock split of common stock. All share and per share information for the Successor Periods referenced throughout the consolidated financial statements and accompanying notes have been retroactively adjusted to reflect this stock split.

Segment Information

The Company’s chief operating decision maker is its Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The Company has one business activity and no segment managers are accountable for operations or operating results beyond revenues. Accordingly, the Company operates as a single operating and reporting segment.

The following table sets forth the Company’s revenue by major product (in thousands):

 

 

Successor

 

 

 

Predecessor

 

 

 

 

 

 

 

 

 

 

 

Period from

 

 

 

Period from

 

 

 

 

 

 

 

 

 

 

 

November 17,

 

 

 

January 1,

 

 

 

Year Ended

 

 

through

 

 

 

through

 

 

 

December 31,

 

 

December 31,

 

 

 

November 16,

 

 

 

2014

 

 

2013

 

 

2012

 

 

 

2012

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating leases and incentives

 

$

21,688

 

 

$

5,864

 

 

$

109

 

 

 

$

183

 

Photovoltaic installation devices and software

 

 

3,213

 

 

 

 

 

 

 

 

 

 

 

Solar energy system sales

 

 

357

 

 

 

306

 

 

 

 

 

 

 

157

 

Total revenue

 

$

25,258

 

 

$

6,170

 

 

$

109

 

 

 

$

340

 

Use of Estimates

The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company regularly makes significant estimates and assumptions including, but not limited to, estimates that affect the Company’s principles of consolidation, revenue recognition, the useful lives of solar energy systems, the valuation and recoverability of intangible assets and goodwill acquired, useful lives of intangible assets, recoverability of long-lived assets, the recognition and measurement of loss contingencies, the valuation of stock-based compensation, the determination of valuation allowances associated with deferred tax assets, and the valuation of non-controlling interests and redeemable non-controlling interests. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ materially from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash and cash equivalents. Cash equivalents consist principally of time deposits and money market accounts with high quality financial institutions.

Restricted Cash

The Company’s guaranty agreements with certain of its fund investors require the maintenance of minimum cash balances of $5.0 million. For additional information, see Note 11—Investment Funds. The Company was also required to deposit $1.5 million into a separate interest reserve account in accordance with the terms of its loan credit facility with Bank of America, N.A. For additional information, see Note 10—Debt Obligations. These minimum cash balances are classified as restricted cash.

Accounts Receivable, Net

Accounts receivable are recorded at the invoiced amount, net of allowance for doubtful accounts. Accounts receivable also include unbilled accounts receivable, which result from monthly power generation under power purchase agreements not yet invoiced as of the end of the reporting period. The Company estimates its allowance for doubtful accounts based upon the collectability of the receivables in light of historical trends and adverse situations that may affect customers’ ability to pay. Revisions to the allowance are recorded as an adjustment to bad debt expense. After appropriate collection efforts are exhausted, specific accounts receivable deemed to be uncollectible are charged against the allowance in the period they are deemed uncollectible. Recoveries of accounts receivable previously written-off are recorded as credits to bad debt expense. The Company had an allowance for doubtful accounts of $0.6 million and a de minimis amount as of December 31, 2014 and 2013.

Inventories

Inventories consist of components related to photovoltaic installation software products and devices and are stated at the lower of cost, on an average cost basis, or market. The Company did not have inventories prior to the acquisition of Solmetric in January 2014.

Concentrations of Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The associated risk of concentration for cash and cash equivalents is mitigated by banking with creditworthy institutions. At certain times, amounts on deposit exceed Federal Deposit Insurance Corporation insurance limits. The Company does not require collateral or other security to support accounts receivable. The Company is not dependent on any single customer. The loss of a customer would not adversely impact the Company’s operating results or financial position.

The Company purchases solar panels, inverters and other system components from a limited number of suppliers. Two suppliers accounted for approximately 50% and 40% of the solar photovoltaic module purchases for the year ended December 31, 2014. The same two suppliers each individually accounted for over 48% of these purchases for the year ended December 31, 2013. The same two suppliers accounted for approximately 63% and 20% of these purchases for the year ended December 31, 2012. One supplier accounted for a substantial majority of the Company’s inverter purchases for the years ended December 31, 2014, 2013 and 2012. If these suppliers fail to satisfy the Company’s requirements on a timely basis or if the Company fails to develop, maintain and expand its relationship with these suppliers, the Company could suffer delays in being able to deliver or install its solar energy systems, experience a possible loss of revenue, or incur higher costs, any of which could adversely affect its operating results.

As of December 31, 2014, the Company’s customers under long-term customer contracts are primarily located in Arizona, California, Hawaii, Maryland, Massachusetts, New Jersey and New York. Future operations could be affected by changes in the economic conditions in these and other geographic areas, by changes in the demand for renewable energy generated by solar panel systems or by changes or eliminations of solar energy related government incentives.

Fair Value of Financial Instruments

Assets and liabilities recorded at fair value on a recurring basis in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:

·

Level I—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

·

Level II—Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

·

Level III—Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

The Company’s financial instruments consist of Level I and Level II assets and liabilities. See Note 3—Fair Value Measurements.


U.S. Treasury Grants and Investment Tax Credits

Certain solar energy systems were eligible to receive U.S. Treasury grants under Section 1603 of the American Recovery and Reinvestment Act of 2009, as amended by the Tax Relief Unemployment Insurance Reauthorization and Job Creation Act of December 2010. Prior to installation of such eligible systems, the Company submitted an application to receive a grant. After installation was completed and the solar energy system was interconnected to the power grid, the Company requested disbursement of the funds, typically based on 30% of the tax basis of eligible solar energy systems. Once the Company was notified that the U.S. Treasury Department approved the disbursement of the grant proceeds for a solar energy system, the Company recorded a reduction in the basis of the solar energy system in the amount of cash to be received, at the grant approval date. If it becomes probable that a U.S. Treasury grant is required to be repaid, the Company will assess whether it is necessary to derecognize any grant (or portion thereof) in accordance with Accounting Standards Codification section 450.

For the solar energy systems that are not eligible to receive U.S. Treasury grants, the Company will apply for and receive investment tax credits under Section 48(a) of the Internal Revenue Code. The amount for the investment tax credit is equal to 30% of the value of eligible solar property. The Company receives minimal allocations of investment tax credits as the majority of such credits are allocated to the fund investor. Some of the Company’s investment funds obligate it to make certain fund investors whole for losses that the investors may suffer in certain limited circumstances resulting from the disallowance or recapture of investment tax credits as a result of the Internal Revenue Service’s (the “IRS”) assessment of the fair value of such systems. The Company has concluded that the likelihood of a recapture event is remote and consequently has not recorded any liability in the consolidated financial statements for any potential recapture exposure.

Solar Energy Systems, Net

The Company sells energy to customers through power purchase agreements or leases solar energy systems to customers under legal-form lease agreements. From inception through December 31, 2013, customers only purchased energy under the power purchase agreement structure. The Company has determined that these contracts should be accounted for as operating leases and, accordingly, solar energy systems are stated at cost, less accumulated depreciation and amortization. In the first quarter of 2014, the Company began offering leases to customers in connection with its entry into the Arizona market. As of December 31, 2014 the Company had interconnected approximately 140 of its leased solar energy systems to the power grid and began depreciation and amortization on these solar energy systems.

Solar energy systems, net is comprised of system equipment costs and initial direct costs related to solar energy systems. System equipment costs include components such as solar panels, inverters, racking systems and other electrical equipment, as well as costs for design and installation activities once a long-term customer contract has been executed. Initial direct costs related to solar energy systems consist of sales commissions and other direct customer acquisition expenses. System equipment costs and initial direct costs are capitalized and recorded within solar energy systems, net.

As noted under the heading “U.S. Treasury Grants and Investment Tax Credits”, the Company applies for and receives U.S. Treasury grants related to its solar energy systems. The Company records the U.S. Treasury grants as a reduction in the basis of the solar energy systems at the approval date of the grant. This accounting treatment results in decreased depreciation of such solar energy systems over their useful lives.

Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the respective assets as follows: 

 

  

Useful Lives

System equipment costs

  

30 years

Initial direct costs related to solar energy systems

  

Lease term (20 years)

System equipment costs are depreciated and initial direct costs are amortized once the respective systems have been installed and interconnected to the power grid. As of December 31, 2014 and 2013, the Company had recorded costs of $598.4 million and $190.1 million in solar energy systems, of which $407.7 million and $132.3 million related to systems that had been interconnected to the power grid, with accumulated depreciation and amortization of $10.2 million and $2.1 million.

Property and Equipment, Net

The Company’s property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets. Vehicles leased under capital leases are depreciated over the life of the lease term, which is typically three years. The estimated useful lives of computer equipment, furniture, fixtures and purchased software are three years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful lives of the assets. The estimated useful lives of leasehold improvements currently range from one to three years. Repairs and maintenance costs are expensed as incurred. Major renewals and improvements that extend the useful lives of existing assets are capitalized and depreciated over their estimated useful lives.

Intangible Assets

Finite-lived intangible assets, which consist of customer contracts, customer relationships, trademarks/trade names and developed technology acquired in business combinations are initially recorded at fair value and presented net of accumulated amortization. These intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company amortizes customer contracts over three years, customer relationships over five years, trademarks/trade names over 10 years and developed technology over five to eight years.

In-process research and development reflects research and development projects that have not yet been completed and are capitalized as indefinite-lived intangibles subject to amortization upon completion or impairment if the assets are subsequently impaired or abandoned. In-process research and development projects were acquired in January 2014 as part of the Solmetric acquisition. See Note 4—Business Acquisitions. The Company assesses (or tests) indefinite-lived intangible assets for impairment on an annual basis, or whenever events or changes in circumstances indicate that the fair value is less than its carrying value. To test these intangible assets for impairment, the Company compares the fair value of the indefinite-lived asset with its carrying amount. In the event the carrying value exceeds the fair value of the assets, the assets are written down to their fair value. There has been no impairment of indefinite-lived intangible assets during any of the periods presented.

Capitalization of Internal Use-Software Costs

The Company capitalizes costs incurred in the development of internal-use software during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life. The Company tests these assets for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. In 2014, the Company incurred third-party costs related to the development of internal-use software applications that will be subject to amortization over expected useful lives of three years. No amortization was recorded for internal-use software in the any of the periods presented.

Impairment of Long-Lived Assets

The carrying amounts of the Company’s long-lived assets, including solar energy systems, property and equipment and finite-lived intangible assets are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated. Factors that the Company considers in deciding when to perform an impairment review include significant negative industry or economic trends, and significant changes or planned changes in the Company’s use of the assets. Recoverability of these assets is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate over its remaining life. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. If the useful life is shorter than originally estimated, the Company amortizes the remaining carrying value over the new shorter useful life. No impairment of any long-lived assets was identified for the periods presented.

Goodwill and Impairment Analysis

Goodwill represents the excess of the purchase price of an acquired business over the fair value of the net tangible and intangible assets acquired. The Company has goodwill recorded on its books as a result of push-down accounting applied as of the Acquisition Date as well as its acquisition of Solmetric. See Note 4—Business Acquisitions. The Company’s impairment test is based on a single operating segment and reporting unit structure.

The Company performs its annual impairment test of goodwill as of October 1st of each fiscal year or whenever events or circumstances change that would indicate that goodwill might be impaired. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in the business climate, unanticipated competition, loss of key personnel, significant changes in the manner the Company uses the acquired assets or the strategy for the overall business, significant negative industry or economic trends or significant underperformance relative to historical operations or projected future results of operations.

In conducting the impairment test, the Company first assesses qualitative factors, including those stated previously, to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. If the qualitative step is not passed, the Company performs a two-step impairment test whereby in the first step, the Company must compare the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds its fair value, the Company performs the second step of the goodwill impairment test to determine the amount of impairment. The second step, measuring the impairment loss, compares the implied fair value of the goodwill with the carrying value of the goodwill. Any excess of the goodwill carrying value over the implied fair value is recognized as an impairment loss.

The Company determined the second step test was not necessary based on the results of its qualitative assessments and concluded that it was more likely than not that the fair value of its reporting unit was greater than its respective carrying value as of October 1, 2014 and October 1, 2013. The Company did not have any goodwill prior to the Acquisition.

Prepaid Tax Asset, Net

The Company sells solar energy systems to the investment funds. As the investment funds are consolidated by the Company, the gain on the sale of the solar energy systems is not recognized in the consolidated financial statements. However, this gain is recognized for tax reporting purposes. Since these transactions are intercompany sales for book purposes, any tax expense incurred related to these intercompany sales is deferred and recorded as a prepaid tax asset and amortized over the estimated useful life of the underlying solar energy systems, which has been estimated to be 30 years.

Other Non-Current Assets

Other non-current assets primarily consist of deferred financing costs and advances receivable due from related parties. Costs incurred in connection with obtaining debt financing are deferred and amortized utilizing the straight-line method, which approximates the effective-interest method, over the term of the related financing. On occasion, the Company provides advance payments of compensation to direct-sales personnel. The advance is repaid as a reduction of the direct-sales personnel’s future compensation. The Company has established an allowance related to advances to direct-sales personnel who have terminated their employment agreement with the Company. These are non-interest bearing advances.

Distributions Payable to Non-Controlling Interests and Redeemable Non-Controlling Interests

As discussed in Note 11—Investment Funds, the Company and fund investors have formed various investment funds that the Company consolidates as the Company has determined that it is the primary beneficiary of these VIEs. These VIEs are required to pay cumulative cash distributions to their respective fund investors. The Company accrues amounts payable to fund investors in distributions payable to non-controlling interests and redeemable non-controlling interests in its consolidated balance sheets.

Deferred Revenue

Deferred revenue includes rebates and incentives received from utility companies and various government agencies and are recognized as revenue over the related lease term of 20 years. Additionally, subsequent to the Solmetric acquisition in January 2014, the Company also defers revenue from its multiple element arrangements. See Revenue Recognition below.

Warranties

The Company warrants solar energy systems sold to customers for one year against defects in material or installation workmanship. The manufacturers’ warranties on the solar energy system components, which is typically passed through to the customers, has a typical product warranty period of 10 years and a limited performance warranty period of 25 years. The Company warrants its photovoltaic installation software products and devices for one to two years against defects in materials or installation workmanship.

The Company generally provides for the estimated cost of warranties at the time the related revenue is recognized. The Company assesses the accrued warranty regularly and adjusts the amounts as necessary based on actual experience and changes in future estimates. Accrued warranty is recorded as a component of accrued and other current liabilities on the consolidated balance sheets and was not significant as of December 31, 2014 and 2013.

Solar Energy Performance Guarantees

In 2014, the Company entered into customer agreements that are structured as legal-form leases. Under these leases the Company guarantees a certain annual minimum solar energy production output for the solar energy systems. Failure to reach the minimum thresholds specified in the legal-form leases could result in the Company being required to pay back a portion of the previously remitted lease payments from customers. The Company monitors the solar energy systems to ensure that these minimum levels of energy production are being achieved and evaluates if any amounts are due to its customers. Solar energy performance guarantee liabilities were de minimis as of December 31, 2014.

Comprehensive Loss

As the Company had no other comprehensive income or loss, comprehensive loss is the same as net loss for all periods presented.

Revenue Recognition

The Company recognizes revenue when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery or performance has occurred, (3) the sales price is fixed or determinable and (4) collectability is reasonably assured. The Company generates revenue through power purchase agreements and solar energy system leases, solar renewable energy certificates (“SRECs”) sales, rebate incentives and solar energy system sales. Revenue associated with power purchase agreements and solar energy system leases, SRECs and rebate incentives are included within operating leases and incentives revenue. The Company also recognizes revenue related to the sale of photovoltaic installation software products and devices within solar energy system and product sales.

Operating Leases and Incentives Revenue

The Company’s primary revenue-generating activity consists of entering into long-term power purchase agreements with residential customers, under which the customer agrees to purchase all of the power generated by the solar energy system for the term of the contract, which is 20 years. The agreement includes a fixed price per kilowatt hour with a fixed annual price escalation percentage (to address the impact of inflation and utility rate increases over the period of the contract). Customers have not historically been charged for installation or activation of the solar energy system. For all power purchase agreements, the Company assesses the probability of collectability on a customer-by-customer basis through a credit review process that evaluates their financial condition and ability to pay.

The Company has determined that power purchase agreements should be accounted for as operating leases after evaluating and concluding that none of the following capitalized lease classification criteria are met: no transfer of ownership or bargain purchase option exists at the end of the lease, the lease term is not greater than 75% of the useful life or the present value of minimum lease payments does not exceed 90% of the fair value at lease inception. As customer payments under a power purchase agreement are dependent on power generation, they are considered contingent rentals and are excluded from future minimum annual lease payments. Revenue from power purchase agreements is recognized based on the actual amount of power generated at rates specified under the contracts, assuming the other revenue recognition criteria discussed above are met.

Operating leases and incentives revenue is recorded net of sales tax collected.

In 2014, the Company began offering solar energy systems to customers pursuant to legal-form leases in certain markets. The customer agreements are structured as legal-form leases due to local regulations that can be read to prohibit the sale of electricity pursuant to the Company’s standard power purchase agreement. Pursuant to the lease agreements, the customers’ monthly payments are a pre-determined amount calculated based on the expected solar energy generation by the system and includes an annual fixed percentage price escalation (to address the impact of inflation and utility rate increases) over the period of the contracts, which is 20 years. The Company provides its legal-form lease customers a performance guarantee, under which the Company agrees to make a payment at the end of each year to the customer if the solar energy systems do not meet a guaranteed production level in the prior 12-month period. Solar energy performance guarantee liabilities were de minimis as of December 31, 2014.

The Company applies for and receives SRECs in certain jurisdictions for power generated by its solar energy systems. When SRECs are granted, the Company typically sells them to other companies directly, or to brokers, to assist them in meeting their own mandatory emission reduction or conservation requirements. The Company recognizes revenue related to the sale of these certificates upon delivery, assuming the other revenue recognition criteria discussed above are met. The portion of SRECs included in operating leases and incentives was $2.6 million, $0.3 million and de minimis for the Successor Periods ended December 31, 2014 and 2013 and the Predecessor Period. There were no SRECs recognized within operating leases and incentives revenue for the Successor Period ended December 31, 2012.

The Company considers upfront rebate incentives earned from its solar energy systems to be minimum lease payments and are recognized on a straight-line basis over the life of the long-term customer contracts, assuming the other revenue recognition criteria discussed above are met. The portion of rebates recognized within operating leases and incentives was $0.2 million and de minimis for the Successor Periods ended December 31, 2014 and 2013. There were no rebates recognized within operating leases and incentives revenue for the Predecessor Period and the Successor Period ended December 31, 2012.

Solar Energy System and Product Sales

Revenue from solar energy system sales is recognized upon the solar energy system passing an inspection by the responsible city department after completion of system installation assuming the remaining revenue recognition criteria discussed above have been met.

Revenue from the sale of photovoltaic installation software products and devices is recognized upon delivery of the product to the customer assuming the remaining revenue recognition criteria discussed above have been met.

Multiple-Element Arrangements

The Company enters into revenue arrangements from the sale of photovoltaic installation software products and devices that consist of multiple elements. Each element in a multiple element arrangement must be evaluated to determine whether it represents a separate unit of account. An element constitutes a separate unit of account when it has standalone value and delivery of an undelivered element is both probable and within the Company’s control.

The Company’s typical multiple-element arrangements involve sales of (1) photovoltaic installation hardware devices containing software essential to the hardware product’s functionality (“photovoltaic device”) and (2) stand-alone software, both including the implied right for the customer to receive post-contract customer support (“PCS”) with the purchase of the Company’s products. PCS includes the implied right to receive, on a when and if available basis, future unspecified software upgrades and features as well as bug fixes, email and telephone support.

For sales of photovoltaic devices, the Company allocates revenue between (1) the photovoltaic device and (2) PCS using the relative selling price method. Because the Company has not sold these deliverables separately, vendor-specific objective evidence of fair value (“VSOE”) is not available. Additionally, the Company is unable to reliably determine the selling prices of similar competitor products and upgrades on a standalone basis to determine third-party evidence of selling price. As such, the allocation of revenue is based on the Company’s best estimate of selling price (“BESP”).

The Company determines BESP for a product or service by considering multiple factors including, but not limited to, market conditions, competitive landscape, internal costs, gross margin objectives and pricing practices. The determination of BESP is made through consultation with and formal approval by the Company’s management, taking into consideration the Company’s marketing strategy.

The consideration allocated to the delivered photovoltaic device is recognized at the time of shipment provided that the four general revenue recognition criteria discussed above have been met. The consideration allocated to the PCS is deferred and recognized ratably over the four year estimated life of the devices and the period during which the related PCS is expected to be provided.

For sales of software with PCS, revenue is recognized based on software revenue recognition accounting guidance. Because the Company is not able to determine VSOE for the PCS, revenue from the entire arrangement is recognized ratably over four years, which is the economic life over which the upgrades are expected to be provided.

Cost of Revenue

Cost of Revenue—Operating Leases and Incentives

Cost of revenue—operating leases and incentives includes the depreciation of the cost of the solar energy systems and the amortization of capitalized initial direct costs. It also includes other costs related to the processing, account creation, design, installation, interconnection and servicing of solar energy systems that are not capitalized, such as personnel costs not directly associated to a solar energy system installation, warehouse rent and utilities, and fleet vehicle executory costs. The cost of revenue for the sales of SRECs is limited to broker fees which are paid in connection with certain SREC transactions.

Cost of Revenue—Solar Energy System and Product Sales

Cost of revenue—solar energy system and product sales consists of direct and indirect material and labor costs for solar energy systems. It also consists of materials, personnel costs, depreciation, facilities costs, other overhead costs and infrastructure expenses associated with the manufacturing of the photovoltaic installation software products and devices.

Research and Development

Research and development expense is primarily comprised of salaries and benefits associated with research and development personnel and other costs related to photovoltaic installation software product and device development. Research and development costs are charged to expense when incurred. The Company’s research and development expense was $1.9 million for the year ended December 31, 2014. Prior to the acquisition of Solmetric in January 2014, the Company did not incur any research and development expenses.

Advertising Costs

Advertising costs are expensed when incurred and are included in sales and marketing expenses in the consolidated statements of operations. The Company’s advertising expense was $3.5 million, $1.3 million, $0.2 million and $0.2 million for the Successor Periods ended December 31, 2014, 2013 and 2012 and the Predecessor Period.

Other Expense

The Company incurred interest and penalties primarily associated with employee payroll withholding tax payments that were not paid in a timely manner of $1.4 million, $1.9 million, a de minimis amount and $0.2 million for the Successor Periods ended December 31, 2014, 2013 and 2012 and the Predecessor Period.

Income Taxes

The Company accounts for income taxes under an asset and liability approach. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and the amounts recognized for income tax reporting purposes, net operating loss carryforwards, and other tax credits measured by applying currently enacted tax laws. A valuation allowance is provided when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized.

The Company determines whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Company uses a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

The Company’s policy is to include interest and penalties related to unrecognized tax benefits, if any, within income tax expense (benefit) in the consolidated statements of operations.

Stock-Based Compensation Expense

Stock-based compensation expense for equity instruments issued to employees is measured based on the grant-date fair value of the awards. The fair value of each time-based employee stock option is estimated on the date of grant using the Black-Scholes-Merton stock option pricing valuation model. The fair value of each performance-based employee stock option is estimated on the date of grant using the Monte Carlo simulation model. The Company recognizes compensation costs using the accelerated attribution method for all employee stock-based compensation awards that are expected to vest over the requisite service period of the awards, which is generally the awards’ vesting period. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Stock-based compensation expense for equity instruments issued to non-employees is recognized based on the estimated fair value of the equity instrument. The fair value of the non-employee awards is subject to remeasurement at each reporting period until services required under the arrangement are completed, which is the vesting date.

Post-Employment Benefits

The Company participates in a 401(k) Plan sponsored by Vivint that covers all of the Company’s eligible employees. The Company did not provide a discretionary company match to employee contributions during any of the periods presented.

Non-Controlling Interests and Redeemable Non-Controlling Interests

Non-controlling interests and redeemable non-controlling interests represent fund investors’ interest in the net assets of certain consolidated investment funds, which have been entered into by the Company in order to finance the costs of solar energy systems under long-term customer contracts. The Company has determined that the provisions in the contractual arrangements represent substantive profit-sharing arrangements. The Company has further determined that the appropriate methodology for attributing income and loss to the non-controlling interests and redeemable non-controlling interests each period is a balance sheet approach referred to as the hypothetical liquidation at book value (“HLBV”) method. Under the HLBV method, the amounts of income and loss attributed to the non-controlling interests and redeemable non-controlling interests in the consolidated statements of operations reflect changes in the amounts the fund investors would hypothetically receive at each balance sheet date under the liquidation provisions of the contractual agreements of these structures, assuming the net assets of these funding structures were liquidated at recorded amounts. The fund investors’ non-controlling interest in the results of operations of these funding structures is determined as the difference in the non-controlling interests’ claim under the HLBV method at the start and end of each reporting period, after taking into account any capital transactions, such as contributions or distributions, between the fund and the fund investors. The use of the HLBV methodology to allocate income to the non-controlling and redeemable non-controlling interest holders may create volatility in the Company’s consolidated statements of operations as the application of HLBV can drive changes in net income available and loss attributable to non-controlling interests and redeemable non-controlling interests from quarter to quarter.

The Company classifies certain non-controlling interests with redemption features that are not solely within the control of the Company outside of permanent equity on its consolidated balance sheets. Redeemable non-controlling interests are reported using the greater of their carrying value at each reporting date as determined by the HLBV method or their estimated redemption value in each reporting period.

Loss Contingencies

The Company is subject to the possibility of various loss contingencies arising in the ordinary course of business. The Company considers the likelihood of loss or impairment of an asset, or the incurrence of a liability, as well as the Company’s ability to reasonably estimate the amount of loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. If the Company determines that a loss is possible and the range of the loss can be reasonably determined, then the Company discloses the range of the possible loss. The Company regularly evaluates current information available to determine whether an accrual is required, an accrual should be adjusted or a range of possible loss should be disclosed.

Recent Accounting Pronouncements

In February 2015, the Financial Accounting Services Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. This update makes some targeted changes to current consolidation guidance. These changes impact both the voting and the variable interest consolidation models. In particular, the update will change how companies determine whether limited partnerships or similar entities are VIEs. The update is effective in fiscal years, including interim periods, beginning after December 15, 2015, and early adoption is permitted. The Company currently consolidates several VIEs and does not anticipate that ASU 2015-02 will have a significant impact on its consolidated financial statements and related disclosures.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.

Fair Value Measurements
Fair Value Measurements

3.

Fair Value Measurements

The Company measures and reports its cash equivalents at fair value. The following tables set forth the fair value of the Company’s financial assets measured on a recurring basis by level within the fair value hierarchy (in thousands):

 

 

December 31, 2014

 

 

 

Level I

 

 

Level II

 

 

Level III

 

 

Total

 

Financial Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time deposits

 

$

 

 

$

1,900

 

 

$

 

 

$

1,900

 

Money market funds

 

 

607

 

 

 

 

 

 

 

 

 

607

 

Total financial assets

 

$

607

 

 

$

1,900

 

 

$

 

 

$

2,507

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

 

 

Level I

 

 

Level II

 

 

Level III

 

 

Total

 

Financial Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time deposits

 

$

 

 

$

1,900

 

 

$

 

 

$

1,900

 

Money market funds

 

 

620

 

 

 

 

 

 

 

 

 

620

 

Total financial assets

 

$

620

 

 

$

1,900

 

 

$

 

 

$

2,520

 

The carrying amounts of certain financial instruments of the Company, consisting of cash and cash equivalents excluding time deposits; accounts receivable; accounts payable; accounts payable—related party and distributions payable to redeemable non-controlling interests (all Level I) approximate fair value due to their relatively short maturities. Time deposits (Level II) approximate fair value due to their short-term nature (30 days) and, upon renewal, the interest rate is adjusted based on current market rates. The Company’s long-term debt is carried at cost and was $105.0 million as of December 31, 2014. The Company estimated the fair value of long-term debt to approximate its carrying value as interest accrues at a floating rate based on market rates. The Company’s revolving lines of credit—related party were comprised of two lines of credit and were carried at cost of $41.4 million as of December 31, 2013. The Company estimated the fair value of its related party revolving lines of credit to be $39.0 million as of December 31, 2013 based on rates for companies with similar credit ratings and issuances at approximately the same time period and in the same market environment. The Company did not have realized gains or losses related to financial assets for any of the periods presented.

Business Acquisitions
Business Acquisitions

4.

Business Acquisitions

Acquisition of the Company by Investors

As described in Note 1—Organization, the Acquisition was completed on November 16, 2012. The purchase price agreed to in the purchase agreement with the Investors was $75.0 million. The purchase price was subsequently adjusted to $73.1 million based on the carrying balances of the liabilities assumed and a net worth adjustment of $0.4 million. The net purchase consideration transferred was (in thousands):

Cash

 

$

73,130

 

Less: Cash acquired

 

 

(1,472

)

Total purchase consideration

 

$

71,658

 

In connection with the Acquisition, the total consideration of $71.7 million paid by the Investors was used for the purchase of all outstanding stock, settlement of the Predecessor’s subordinated debt and related party payables with Vivint and its subsidiaries, settlement of other liabilities of the Predecessor incurred in connection with the Acquisition and settlement of stock-based awards. The Acquisition is reflected as a noncash supplemental disclosure on the consolidated statements of cash flows as no cash flowed through the Company’s accounts. The Company incurred $2.7 million of costs related to special retention bonuses and other payments to employees directly related to the Acquisition and $1.0 million of transaction fees, comprised of investment banking, advisory, legal and accounting fees that were expensed in the Predecessor Period. These expenses are included in general and administrative expenses in the Predecessor Period in the consolidated statements of operations.

Pursuant to the terms of the purchase agreement, $9.5 million of the purchase consideration was placed in escrow for general representations and warranties, rather than specific contingencies or specific assets or liabilities of the Company and was released in 2014. The Company had no right to these funds, nor did it have a direct obligation associated with them. Accordingly, the Company did not include the escrow funds in its consolidated balance sheets.

The estimated fair values of the assets acquired and liabilities assumed are based on information obtained from various sources including third party valuations, management’s internal valuation and historical experience. The fair values of the customer contracts intangible asset and the redeemable non-controlling interest were determined using the income approach and significant estimates relate to assumptions as to the future economic benefits to be received, cash flow projections and discount rates.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed (in thousands):

Current assets acquired

 

$

171

 

Solar energy systems

 

 

39,532

 

Customer contracts

 

 

43,783

 

Goodwill

 

 

29,545

 

Current liabilities assumed

 

 

(15,111

)

Deferred tax liability, net

 

 

(11,643

)

Revolving line of credit

 

 

(4,000

)

Redeemable non-controlling interests

 

 

(10,619

)

Total

 

$

71,658

 

The redeemable non-controlling interests represent the fair value of an investor’s interest in the investment funds acquired as part of the Acquisition. The Company has determined that it is the primary beneficiary of the investment funds and, accordingly, consolidates the financial position and results of operations of the investment funds in the consolidated financial statements.

Goodwill, which represents the purchase price in excess of the fair value of net assets acquired, is not expected to be deductible for income tax purposes. This goodwill is reflective of the expected growth in the business, partly based on historical performance, related to the operating leases and incentives revenue that will be generated over the next 20 years from current customers and the expected continued growth of the Company’s customer base through its existing and growing sales channels.

For tax purposes, the acquired intangible assets are not amortized. Accordingly, a deferred tax liability of $16.3 million was recorded for the difference between the book and tax basis related to the intangible assets. Additionally, a deferred tax asset of $4.7 million was recorded as a result of the Company’s net operating losses.

Unaudited Pro Forma Information

The following pro forma financial information is based on the historical financial statements of the Company and presents the Company’s results as if the Acquisition had occurred as of January 1, 2012 (in thousands):

 

 

Year Ended

 

 

 

December 31,

 

 

 

2012

 

Pro forma revenue

 

$

449

 

Pro forma net loss

 

 

(26,604

)

Pro forma net loss attributable to common stockholders

 

 

(24,134

)

The unaudited pro forma financial information combines the Company’s results of operations as if the Acquisition had occurred as of January 1, 2012. The pro forma results include the acquisition accounting effects resulting from the Acquisition such as the amortization charges from acquired intangible assets, reversal of interest expense related to the revolving line of credit, reversal of costs related to special retention bonuses and other payments to employees and transaction costs directly related to the Acquisition and reversal of the accretion to redemption value of Series B redeemable preferred stock and related tax effects. The pro forma information presented does not purport to present what the actual results would have been had the Acquisition actually occurred on January 1, 2012, nor is the information intended to project results for any future period.


Solmetric Acquisition

In January 2014, the Company completed the acquisition of Solmetric (the “Solmetric Acquisition”), a developer and manufacturer of photovoltaic installation software products and devices. The purchase price agreed to in the purchase agreement with Solmetric was $12.0 million plus a net working capital adjustment resulting in total cash purchase consideration of $12.2 million. In connection with the Solmetric Acquisition, the total consideration of $12.2 million was used for the purchase of all outstanding stock and options of Solmetric, settlement of Solmetric’s short-term promissory note, and settlement of other liabilities including employee-related liabilities of Solmetric incurred in connection with the acquisition. The Company incurred $0.3 million of costs related to retention bonuses to key Solmetric employees and $0.1 million of transaction fees, all of which have been included in the various line items of the consolidated statements of operations for the year ended December 31, 2014.

Pursuant to the terms of the purchase agreement, $1.0 million of the purchase consideration was placed in escrow and is being held for general representations and warranties, rather than specific contingencies or specific assets or liabilities of the Company. The Company has no right to these funds, nor does it have a direct obligation associated with them. Accordingly, the Company does not include the escrow funds in its consolidated balance sheets. Notwithstanding any prior claims to the escrow fund due to a breach of representations and warranties, the escrow was released on the one year anniversary of the Solmetric Acquisition.

The estimated fair values of the assets acquired and liabilities assumed are based on information obtained from various sources including third party valuations, management’s internal valuation and historical experience. The fair values of the intangible assets related to customer relationships, trade names and trademarks, developed technology and in-process research and development were determined using the income approach and significant estimates relate to assumptions as to the future economic benefits to be received, cash flow projections and discount rates.

The purchase price was allocated based on the estimated fair value of net assets acquired and liabilities assumed at the date of the acquisition. The purchase price allocation was finalized as of December 31, 2014.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed (in thousands):

Cash acquired

 

$

139

 

Inventories

 

 

580

 

Other current assets acquired

 

 

221

 

Property

 

 

77

 

Customer relationships

 

 

738

 

Trademarks/trade names

 

 

1,664

 

Developed technology

 

 

1,295

 

In-process research and development

 

 

2,097

 

Goodwill

 

 

7,056

 

Deferred tax liability, net

 

 

(1,478

)

Current liabilities assumed

 

 

(210

)

Total

 

$

12,179

 

Goodwill, which represents the purchase price in excess of the fair value of net assets acquired, is not expected to be deductible for income tax purposes. This goodwill is reflective of the value derived from the Company utilizing Solmetric’s advanced technology to improve the installation and efficacy of its solar panels as well as the expected growth in the Solmetric business, based on its historical performance and the expectation of continued growth as the solar industry expands.

For tax purposes, the acquired intangible assets are not amortized. Accordingly, a deferred tax liability of $2.5 million was recorded for the difference between the book and tax basis related to the intangible assets. Additionally, a deferred tax asset of $1.0 million was recorded mainly as a result of Solmetric’s net operating losses.

Financial results for Solmetric since the acquisition date are included in the results of operations for the year ended December 31, 2014. Solmetric contributed $3.2 million of revenues and $0.4 million of net income for the year ended December 31, 2014.

Unaudited Solmetric Pro Forma Information

The following pro forma financial information is based on the historical financial statements of the Company and presents the Company’s results as if the Solmetric Acquisition had occurred as of January 1, 2013 (in thousands):

 

 

Years Ended

 

 

 

December 31,

 

 

 

2014

 

 

2013

 

Pro forma revenue

 

$

25,380

 

 

$

9,122

 

Pro forma net loss

 

 

(165,734

)

 

 

(57,046

)

Pro forma net (loss attributable) income available to common stockholders

 

 

(28,698

)

 

 

5,062

 

The unaudited pro forma results include the accounting effects resulting from the Solmetric Acquisition, such as the amortization charges from acquired intangible assets, reversal of costs related to special retention bonuses and other payments to employees and transaction costs directly related to the Solmetric Acquisition, elimination of intercompany sales and reversal of the related tax effects. The pro forma information presented does not purport to present what the actual results would have been had the Solmetric Acquisition actually occurred on January 1, 2013, nor is the information intended to project results for any future period.

 

Solar Energy Systems
Solar Energy Systems

5.

Solar Energy Systems

Solar energy systems, net consisted of the following (in thousands):

 

 

December 31,

 

 

December 31,

 

 

 

2014

 

 

2013

 

System equipment costs

 

$

478,502

 

 

$

155,101

 

Initial direct costs related to solar energy systems

 

 

75,349

 

 

 

22,250

 

 

 

 

553,851

 

 

 

177,351

 

Less: Accumulated depreciation and amortization

 

 

(10,186

)

 

 

(2,075

)

 

 

 

543,665

 

 

 

175,276

 

Solar energy system inventory

 

 

44,502

 

 

 

12,782

 

Solar energy systems, net

 

$

588,167

 

 

$

188,058

 

Solar energy system inventory represents the solar components and materials used in the installation of solar energy systems prior to being installed on customers’ roofs. As such, no depreciation is recorded related to this line item. The Company recorded depreciation and amortization expense related to solar energy systems of $8.1 million and $2.0 million for the years ended December 31, 2014 and 2013.

Property and Equipment
Property and Equipment

6.

Property and Equipment

Property and equipment, net consisted of the following (in thousands):

 

 

Estimated

 

December 31,

 

 

December 31,

 

 

 

Useful Lives

 

2014

 

 

2013

 

Vehicles acquired under capital leases

 

3 years

 

$

13,351

 

 

$

4,796

 

Furniture and computer and other equipment

 

3 years

 

 

2,183

 

 

 

 

Leasehold improvements

 

1-3 years

 

 

2,088

 

 

 

 

 

 

 

 

 

17,622

 

 

 

4,796

 

Less: Accumulated depreciation and amortization

 

 

 

 

(4,598

)

 

 

(1,156

)

Property and equipment, net

 

 

 

$

13,024

 

 

$

3,640

 


The Company recorded depreciation and amortization expense related to property and equipment of $3.4 million and $1.2 million for the years ended December 31, 2014 and 2013. Prior to December 31, 2013, the Company did not have any recorded property and equipment, and therefore, did not record related depreciation and amortization expense in the Successor Periods ended December 31, 2013 and 2012 and the Predecessor Period.

The Company leases fleet vehicles that are accounted for as capital leases and are included in property and equipment, net. Depreciation on vehicles under capital leases totaling $3.0 million and $1.2 million was capitalized in solar energy systems, net for the years ended December 31, 2014 and 2013. For the year ended December 31, 2014, a de minimis amount of depreciation was also expensed. There was no depreciation on vehicles under capital leases for the Successor Period ended December 31, 2012 or the Predecessor Period.

Future minimum lease payments under capital leases as of December 31, 2014 were as follows (in thousands):

Years Ending December 31,

 

 

 

 

2015

 

$

4,029

 

2016

 

 

3,266

 

2017

 

 

2,625

 

2018

 

 

669

 

2019

 

 

46

 

Thereafter

 

 

 

Total minimum lease payments

 

 

10,635

 

Less: interest

 

 

957

 

Present value of capital lease obligations

 

 

9,678

 

Less: current portion

 

 

3,502

 

Long-term portion

 

$

6,176

 

 

Intangible Assets and Goodwill
Intangible Assets and Goodwill

7.

Intangible Assets and Goodwill

Intangible assets consisted of the following (in thousands):

 

 

December 31,

 

 

December 31,

 

 

 

2014

 

 

2013

 

Cost:

 

 

 

 

 

 

 

 

Customer contracts

 

$

43,783

 

 

$

43,783

 

Customer relationships

 

 

738

 

 

 

 

Trademarks/trade names

 

 

1,664

 

 

 

 

Developed technology

 

 

1,295

 

 

 

 

In-process research and development

 

 

2,097

 

 

 

 

Internal-use software

 

 

370

 

 

 

 

Total carrying value

 

 

49,947

 

 

 

43,783

 

Accumulated amortization:

 

 

 

 

 

 

 

 

Customer contracts

 

 

(31,013

)

 

 

(16,419

)

Customer relationships

 

 

(135

)

 

 

 

Trademarks/trade names

 

 

(152

)

 

 

 

Developed technology

 

 

(160

)

 

 

 

Total accumulated amortization

 

 

(31,460

)

 

 

(16,419

)

Total intangible assets, net

 

$

18,487

 

 

$

27,364

 

The Company recorded amortization expense of $14.9 million for the year ended December 31, 2014, of which $0.1 million was recorded in cost of revenue-solar energy system and product sales. Amortization expense was $14.6 million and $1.8 million for the Successor Periods ended December 31, 2013 and 2012. Prior to the Acquisition on November 16, 2012, the Company did not have any recorded intangible assets, and therefore, no amortization expense was incurred in the Predecessor Period.


As of December 31, 2014, expected amortization expense for the unamortized intangible assets is as follows (in thousands):

Years Ending December 31,

 

 

 

 

2015

 

$

13,376

 

2016

 

 

611

 

2017

 

 

611

 

2018

 

 

494

 

2019

 

 

323

 

Thereafter

 

 

975

 

Total

 

$

16,390

 

In-process research and development reflects projects that have not yet been completed and are not subject to amortization as of December 31, 2014.

The changes in the carrying amounts of goodwill during the year ended December 31, 2014 were as follows (in thousands):

Balance as of December 31, 2013

 

$

29,545

 

Goodwill acquired in Solmetric acquisition

 

 

7,056

 

Balance as of December 31, 2014

 

$

36,601

 

 

 

 

Accrued Compensation
Accrued Compensation

8.

Accrued Compensation

Accrued compensation consisted of the following (in thousands):

 

 

December 31,

 

 

December 31,

 

 

 

2014

 

 

2013

 

Accrued payroll

 

$

9,888

 

 

$

3,142

 

Accrued commissions

 

 

6,575

 

 

 

4,206

 

Accrued employee taxes

 

 

331

 

 

 

8,143

 

Total accrued compensation

 

$

16,794

 

 

$

15,491

 

 

Accrued and Other Current Liabilities
Accrued and Other Current Liabilities

9.

Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following (in thousands):

 

 

December 31,

 

 

December 31,

 

 

 

2014

 

 

2013

 

Sales and use tax payable

 

$

5,052

 

 

$

5,299

 

Income tax payable

 

 

4,097

 

 

 

3,061

 

Accrued professional fees

 

 

1,289

 

 

 

 

Deferred rent

 

 

1,090

 

 

 

 

Accrued unused commitment fees and interest

 

 

478

 

 

 

 

Fleet expenses

 

 

470

 

 

 

 

Accrued penalties and interest

 

 

 

 

 

1,909

 

Other accrued expenses

 

 

1,540

 

 

 

38

 

Total accrued and other current liabilities

 

$

14,016