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We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
−Removed: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
+Added: Critical Audit Matter
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
+Added: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
+Added: The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Noncontrolling Interests and Redeemable Noncontrolling Interests
38 unchanged sentences
mathematical accuracy of management’s HLBV models.
−Removed: Description of matter As reflected in the Company’s Consolidated Financial Statements, at December 31, 2023, the Company’s goodwill was $3.1 billion.
−Removed: As disclosed in Note 2 to the Consolidated Financial Statements, goodwill is evaluated for impairment annually on October 1 or when indicators of impairment exist which suggest that the carrying value may not be recoverable.
−Removed: In 2023, the Company determined there was an indicator of impairment for sustained decline in stock price and performed an interim quantitative assessment.
−Removed: Based on this quantitative assessment, the Company concluded that goodwill for its one reporting unit was partially impaired and recognized a goodwill impairment charge of $1.2 billion in the third quarter of 2023.
−Removed: Auditing management’s third quarter quantitative goodwill impairment test was subjective and required the involvement of a specialist due to the measurement uncertainty in determining fair value of the reporting unit.
−Removed: In particular, the fair value estimate was sensitive to significant assumptions in discount rates applied to estimated future cashflows which may be affected by future market conditions.
−Removed: How We Addressed the Matter in
−Removed: Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment assessment process.
−Removed: Our procedures included testing controls over management’s review of the significant assumptions in estimating the fair value of the reporting unit and the related evaluation of management’s specialist.
−Removed: We also tested controls over management review of the reconciliation of the estimated fair value of the reporting unit to the total invested capital (including market capitalization) of the Company.
−Removed: To test the estimated fair value of the reporting unit, specifically using the income approach, we performed audit procedures that included, among others, assessing the valuation methodology used to determine the fair value, testing the significant assumptions discussed above and testing the completeness and accuracy of the underlying data used by the Company.
−Removed: For example, we evaluated management’s forecasted cash flows used in the fair value estimate by comparing those assumptions to the historical results of the Company and current industry trends.
−Removed: Additionally, we performed sensitivity analyses of the significant assumptions to evaluate the effect on the fair value estimate of the reporting unit.
−Removed: We also audited the reconciliation of that fair value estimate to the total invested capital (including market capitalization) of its reporting unit in consideration of a control premium based on observable comparable company transactions.
−Removed: We also involved a valuation specialist to assist in evaluating the significant assumptions in the fair value estimate.
/s/ Ernst & Young LLP
121 unchanged sentences
Interest expense, net ( 848,366 ) ( 652,989 ) ( 445,819 )
−Removed: Other (expense) income, net ( 63,900 ) 260,657 22,628
+Added: Other income (expense), net 161,539 ( 63,900 ) 260,657
Loss before income taxes ( 4,382,034 ) ( 2,695,532 ) ( 847,354 )
17 unchanged sentences
Unrealized gain on derivatives, net of income taxes 58,056 14,482 140,805
−Removed: Adjustment for net (gain) loss on derivatives recognized into earnings, net of income taxes ( 26,915 ) ( 646 ) 15,209
−Removed: Other comprehensive (loss) income ( 12,433 ) 140,159 33,705
+Added: Adjustment for net gain on derivatives recognized into earnings, net of income taxes ( 25,918 ) ( 26,915 ) ( 646 )
+Added: Other comprehensive income (loss) 32,138 ( 12,433 ) 140,159
Comprehensive (loss) income $ ( 2,814,029 ) $ ( 1,616,930 ) $ 313,536
16 unchanged sentences
Distributions to redeemable noncontrolling interests and noncontrolling interests ( 67,732 ) — — — — — — ( 150,369 ) ( 150,369 )
−Removed: Net loss ( 35,908 ) — — — — ( 79,423 ) ( 79,423 ) ( 865,199 ) ( 944,622 )
−Removed: Capped call transaction — — — ( 28,000 ) — — ( 28,000 ) — ( 28,000 )
+Added: Net (loss) income ( 5,558 ) — — — — 173,377 173,377 ( 1,017,464 ) ( 844,087 )
Acquisition of noncontrolling interest ( 1,069 ) — — ( 16,063 ) — — ( 16,063 ) ( 19,557 ) ( 35,620 )
19 unchanged sentences
( 68,543 ) — — — — — — ( 246,400 ) ( 246,400 )
−Removed: Net loss ( 30,601 ) — — — — ( 1,604,497 ) ( 1,604,497 ) ( 1,047,743 ) ( 2,652,240 )
+Added: Net income (loss) 14,820 — — — — ( 2,846,167 ) ( 2,846,167 ) ( 1,523,870 ) ( 4,370,037 )
+Added: Capped call transaction — — — ( 38,365 ) — — ( 38,365 ) — ( 38,365 )
Acquisition of noncontrolling interests ( 22,897 ) — — 33,231 — — 33,231 ( 38,858 ) ( 5,627 )
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Reduction in pass-through financing obligations ( 20,787 ) ( 40,352 ) ( 41,164 )
−Removed: Unrealized gain on derivatives 28,105 ( 184,904 ) ( 21,686 )
+Added: Unrealized (gain) loss on derivatives ( 120,008 ) 28,105 ( 184,904 )
Other noncash items 210,479 261,390 53,651
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Proceeds from state tax credits, net of recapture 5,203 4,033 —
+Added: Proceeds from trade receivable financing 124,261 41,225 —
+Added: Repayment of trade receivable financing — ( 41,225 ) —
Proceeds from line of credit 354,256 1,124,675 1,165,267
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Net proceeds related to stock-based award activities 18,876 22,611 32,863
+Added: Proceeds from transfer of investment tax credits 705,697 6,980 —
+Added: Payments to redeemable noncontrolling interests and noncontrolling interests of investment tax credits ( 705,697 ) ( 6,980 ) —
Net cash provided by financing activities 3,426,755 3,468,698 3,037,451
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Notes to Consolidated Financial Statements
−Removed: (“Sunrun” or the “Company”) was formed in 2007 and is engaged in the design, development, installation, sale, ownership and maintenance of residential solar energy systems (“Projects”) in the United States.
+Added: (“Sunrun” or the “Company”) was formed in 2007.
+Added: The Company is engaged in the design, development, installation, sale, ownership and maintenance of residential solar energy and battery storage systems (“Projects”) in the United States.
Sunrun acquires customers directly and through relationships with various solar and strategic partners (“Partners”).
−Removed: The Projects are constructed either by Sunrun or by Sunrun’s Partners and are owned by the Company.
−Removed: Sunrun’s customers enter into an agreement to utilize the solar energy system (“Customer Agreement”) which typically has an initial term of 20 or 25 years.
−Removed: Sunrun monitors, maintains and insures the Projects.
−Removed: The Company also sells solar energy systems and products, such as panels and racking and solar leads generated to customers.
+Added: The Projects are constructed either by Sunrun or by Sunrun’s Partners and are mostly owned by the Company.
+Added: Sunrun’s customers enter into an agreement to utilize the solar energy system (the “Customer Agreement”) which typically has an initial term of 20 or 25 years.
+Added: Sunrun monitors, maintains and insures the Projects during the term of the Customer Agreement.
+Added: The Company also sells battery storage along with the solar energy systems and products, such as panels and racking and solar leads generated by customers.
The Company has formed various subsidiaries (“Funds”) to finance the development of Projects.
−Removed: These Funds, structured as limited liability companies, obtain financing from outside investors and purchase or lease Projects from Sunrun under master purchase or master lease agreements.
−Removed: The Company currently utilizes three legal structures in its investment Funds, which are referred to as:
−Removed: (i) pass-through financing obligations, (ii) partnership-flips and (iii) joint venture (“JV”) inverted leases.
+Added: These Funds, structured as limited liability companies, obtain financing from outside investors and purchase Projects from Sunrun under master purchase.
+Added: The Company currently utilizes the legal structure for its investment Funds which are referred to as partnership-flips.
Summary of Significant Accounting Policies
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Reclassifications
−Removed: Certain prior period amounts have been reclassified to conform to current period presentation.
+Added: When necessary, reclassifications have been made to the Company’s prior period financial information to conform with current year presentation and are not material to the Company’s consolidated financial statements.
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.
−Removed: The Company regularly makes estimates and assumptions, including, but not limited to, revenue recognition constraints that result in variable consideration, the discount rate used to adjust the promised amount of consideration for the effects of a significant financing component, the estimates that affect the collectability of accounts receivable, the valuation of inventories, the useful lives of solar energy systems, the useful lives of property and equipment, the discount rates used in the goodwill impairment calculation, the effective interest rate used to amortize pass-through financing obligations, the discount rate used for operating and financing leases, the valuation of stock-based compensation, the determination of valuation allowances associated with deferred tax assets, the fair value of debt instruments disclosed and the redemption value of redeemable noncontrolling interests.
−Removed: The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable.
+Added: The Company regularly makes estimates and assumptions, including, but not limited to, revenue recognition constraints that result in variable consideration, the discount rate used to adjust the promised amount of consideration for the effects of a significant financing component, the estimates that affect the collectability of accounts receivable, the valuation of inventories, the useful lives of solar energy systems, the useful lives of property and equipment, the fair value estimates used in the goodwill impairment calculation, the discount rate used for operating and financing leases, the valuation of stock-based compensation, the determination of valuation allowances associated with deferred tax assets, the fair value of debt instruments disclosed and the redemption value of redeemable noncontrolling interests.
+Added: The Company bases its estimates on historical experience and various other assumptions believed to be reasonable.
Actual results may differ from such estimates.
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The Company has one operating segment with one business activity, providing solar energy services and products to customers.
−Removed: The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer, who manages operations on a consolidated basis for purposes of allocating resources.
−Removed: When evaluating performance and allocating resources, the CODM reviews financial information presented on a consolidated basis.
+Added: The Company's chief operating decision maker ("CODM") is its Chief Executive Officer, who reviews financial information presented on a consolidated basis.
+Added: When evaluating performance and allocating resources, the CODM uses consolidated income (loss) from operations and net income (loss).
+Added: These financial metrics are used by the CODM to make key operating decisions, such as the determination of volume targets and the allocation of budget between cost of revenues, sales and marketing, research and development, and general and administrative expenses.
+Added: The CODM does not use asset or liability information in evaluating the Company’s operating segment.
Revenue from external customers (including, but not limited to homeowners) for each group of similar products and services is as follows (in thousands):
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Total $ 947,416 $ 987,838 $ 953,023
+Added: Notes to Consolidated Financial Statements — Continued
Accounts Receivable
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The Company maintains allowances for the applicable portion of receivables using the expected credit loss model.
−Removed: The Company estimates expected credit losses from doubtful accounts based upon the expected collectability of all accounts receivables, which takes into account the number of days past due, collection history, identification of specific customer exposure, current
−Removed: Notes to Consolidated Financial Statements — Continued
−Removed: economic trends, and management’s expectation of future economic conditions.
+Added: The Company estimates expected credit losses from doubtful accounts based upon the expected collectability of all accounts receivables, which takes into account the number of days past due, collection history, identification of specific customer exposure, current economic trends, and management’s expectation of future economic conditions.
Once a receivable is deemed to be uncollectible, it is written off.
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Solar energy systems under construction will be depreciated as solar energy systems subject to signed Customer Agreements when the respective systems are completed and interconnected.
+Added: Notes to Consolidated Financial Statements — Continued
Property and Equipment, net
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Repairs and maintenance are expensed as incurred.
−Removed: Notes to Consolidated Financial Statements — Continued
Property and equipment is depreciated on a straight-line basis over the following periods:
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The Company also considers its enterprise value and if necessary, discounted cash flow model, which involves assumptions and estimates, including the Company’s future financial performance, weighted average cost of capital and interpretation of currently enacted tax laws.
+Added: Notes to Consolidated Financial Statements — Continued
Circumstances that could indicate impairment and require the Company to perform a quantitative impairment test include significant declines in the Company’s financial results or enterprise value relative to its net book value or a sustained decline in the Company's stock price below its book value, coupled with declines in valuations for comparable public companies or acquisition premiums.
The Company tests goodwill for impairment for its one reporting unit using an estimated fair value approach.
−Removed: The Company’s stock price has continued to decline during 2023, consistent with other industry peers, experiencing a significant decline during the third quarter.
+Added: The Company’s stock price, consistent with other industry peers, experienced a significant decline during the fourth quarter of fiscal 2024.
A sustained decrease in the Company’s stock price is one of the qualitative factors to be considered as part of an impairment test when evaluating whether events or changes in circumstances may indicate that it is more likely than not that a potential goodwill impairment exists.
−Removed: Notes to Consolidated Financial Statements — Continued
−Removed: Due to the continued sustained decline in the Company’s market capitalization after consideration of a control premium below the book value of equity, the Company performed a quantitative assessment as of September 30, 2023 related to the recoverability of its goodwill for its one reporting unit.
−Removed: The Company estimated the fair value of its reporting unit primarily based on consideration of an income approach analysis.
+Added: As of October 1st, the Company performed a qualitative assessment and concluded that the fair value of the Company’s one reporting unit exceeded its carrying value with consideration of a reasonable control premium.
+Added: However, during the fourth quarter of fiscal 2024, due to the significant sustained decline in the Company’s market capitalization below the book value of equity, the Company performed an interim quantitative assessment.
+Added: The Company estimated the fair value of its reporting unit primarily based on consideration of an income approach and market capitalization.
Under the income approach, future cash flows of the Company were estimated and present valued based on a discount rate reflecting a market participant risk-adjusted rate of return.
−Removed: As of September 30, 2023, the Company concluded that the fair value of the Company’s one reporting unit did not exceed its carrying value with consideration of a control premium and recorded a non-cash goodwill impairment charge of $ 1.2 billion in its consolidated statements of operations.
−Removed: This impairment charge did not result in a change to previously recorded deferred taxes, as goodwill was not deductible for tax purposes, nor did it impact the Company’s liquidity position, its debt covenants or cash flows.
−Removed: The assumptions and estimates used in the assessment include, among others, estimated future net annual contracted cash flows under its existing long term customer agreements, as well as future growth estimates which rely on management judgements.
+Added: The assumptions and estimates used in the assessment include, among others, estimated future net annual contracted cash flows under its existing long term customer agreements, as well as future growth estimates which rely on management judgement.
The Company selected estimates used in the discounted cash flow projections using historical data as well as current and anticipated market conditions, and estimated growth rates with consideration of published industry trends.
−Removed: The Company also compared the total invested capital (including market capitalization) to the fair value of its reporting unit to assess the reasonableness of fair value after consideration of a control premium based on observable comparable company transactions.
−Removed: After the impairment charge, the fair value of the Company’s one reporting unit approximated its estimated carrying value as of September 30, 2023.
−Removed: As of October 1, 2023, the Company conducted its annual goodwill impairment test.
−Removed: The test concluded that no additional impairment had occurred during the fourth quarter of 2023.
+Added: The Company also compared the total invested capital (including market capitalization) to the fair value of its reporting unit to assess the reasonableness of fair value.
+Added: The Company concluded that the fair value of its one reporting unit did not exceed its carrying value as of December 31, 2024 and recorded a non-cash goodwill impairment charge of $ 3.1 billion in its consolidated statements of operations primarily driven by the Company’s market capitalization.
+Added: This impairment charge did not result in a change to previously recorded deferred taxes, as goodwill was not deductible for tax purposes, nor did it impact the Company’s liquidity position, its debt covenants or cash flows.
+Added: Supplier Finance Agreements
+Added: The Company has entered into supplier finance agreements with certain financial institutions, whereby these institutions pay amounts related to trade and inventory payables to suppliers on behalf of the Company.
+Added: The terms of these agreements allow the Company to extend, at its sole discretion, the original supplier payment terms up to 90 or 120 days.
+Added: The Company does not provide any form of guarantee under these financing agreements.
+Added: Amounts outstanding under these agreements are reflected in Accrued expenses and other liabilities in the consolidated balance sheets.
+Added: The Company records interest for the period the supplier finance obligation is outstanding and reflects the proceeds and payments related to these transactions as a financing activity within its consolidated statement of cash flow.
+Added: The following is a rollforward of the obligations under these supplier finance agreements (in thousands):
+Added: Supplier finance obligations outstanding at December 31, 2022 $ —
+Added: Proceeds from trade receivable financing 41,225
+Added: Repayment of trade receivable financing ( 41,225 )
+Added: Supplier finance obligations outstanding at December 31, 2023 —
+Added: Proceeds from trade receivable financing 124,261
+Added: Repayment of trade receivable financing —
+Added: Accrued interest on trade receivable financing 5,977
+Added: Supplier finance obligations outstanding at December 31, 2024 $ 130,238
Deferred Revenue
When the Company receives consideration, or when such consideration is unconditionally due, from a customer prior to delivering goods or services to the customer under the terms of a Customer Agreement, the Company records deferred revenue.
−Removed: Such deferred revenue consists of amounts for which the criteria for revenue recognition have not yet been met and includes amounts that are collected or assigned from customers, including upfront deposits and prepayments, and rebates.
+Added: Such deferred revenue consists of amounts for which the criteria for revenue
+Added: Notes to Consolidated Financial Statements — Continued
+Added: recognition have not yet been met and includes amounts that are collected or assigned from customers, including upfront deposits and prepayments, and rebates.
Deferred revenue relating to financing components represents the cumulative excess of interest expense recorded on financing component elements over the related revenue recognized to date and will eventually net to zero by the end of the initial term.
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Contracted but not yet recognized revenue was approximately $ 31.3 billion as of December 31, 2024, of which the Company expects to recognize approximately 5 % over the next 12 months.
−Removed: The annual recognition is not expected to vary significantly over the next 10 years as the vast majority of existing
−Removed: Notes to Consolidated Financial Statements — Continued
−Removed: Customer Agreements have at least 10 years remaining, given that the average age of the Company's fleet of residential solar energy systems under Customer Agreements is less than five years due to the Company being formed in 2007 and having experienced significant growth in the last few years.
+Added: The annual recognition is not expected to vary significantly over the next 10 years as the vast majority of existing Customer Agreements have at least 10 years remaining, given that the average age of the Company's fleet of residential solar energy systems under Customer Agreements is less than 6 years due to the Company being formed in 2007 and having experienced significant growth in the last few years.
The annual recognition on these existing contracts will gradually decline over the midpoint of the Customer Agreements over the following 10 years as the typical 20 - or 25 -year initial term expires on individual Customer Agreements.
4 unchanged sentences
The Company records the grants as deferred grants and recognizes the benefit on a straight-line basis over the estimated depreciable life of the associated assets as a reduction in Cost of customer agreements and incentives.
+Added: Notes to Consolidated Financial Statements — Continued
Warranty Accrual
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Any derivative gains and losses that are not effective in hedging the variability of expected cash flows of the hedged item or that do not qualify for hedge accounting treatment are recognized directly into income.
−Removed: At the hedge’s inception and at least quarterly thereafter, a formal assessment is performed to determine whether changes in cash flows of the derivative instrument have been highly effective in offsetting changes in the cash flows of the hedged items and whether they are expected to
−Removed: Notes to Consolidated Financial Statements — Continued
−Removed: be highly effective in the future.
+Added: At the hedge’s inception and at least quarterly thereafter, a formal assessment is performed to determine whether changes in cash flows of the derivative instrument have been highly effective in offsetting changes in the cash flows of the hedged items and whether they are expected to be highly effective in the future.
The Company discontinues hedge accounting prospectively when (i) it determines that the derivative is no longer effective in offsetting changes in the cash flows of a hedged item;
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Such amounts are recognized in earnings when earnings are affected by the hedged transaction.
+Added: Notes to Consolidated Financial Statements — Continued
Fair Value of Financial Instruments
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For Customer Agreements that charge a fixed price per kilowatt hour, and for which the Company’s obligation is the provision of electricity from a solar energy system, revenue is recognized based on the actual amount of power generated at rates specified under the contracts.
−Removed: Customer Agreements typically have an
−Removed: Notes to Consolidated Financial Statements — Continued
−Removed: initial term of 20 or 25 years.
−Removed: After the initial contract term, Customer Agreements typically automatically renew annually or for five years .
+Added: Customer Agreements typically have an initial term of 20 or 25 years.
+Added: After the initial contract term, Customer Agreements typically automatically renew annually or for a five year term.
SREC revenue arises from the sale of environmental credits generated by solar energy systems and is generally recognized upon delivery of the SRECs to the counterparty or upon reporting of the electricity generation.
−Removed: For pass-through financing obligation Funds, the value attributable to the monetization of Commercial ITCs are recognized in the period a solar energy system is granted PTO - see Note 12, Pass-Through Financing Obligations .
In determining the transaction price, the Company adjusts the promised amount of consideration for the effects of the time value of money when the timing of payments provides it with a significant benefit of financing the transfer of goods or services to the customer.
In those circumstances, the contract contains a significant financing component.
−Removed: When adjusting the promised amount of consideration for a significant financing component, the Company uses the discount rate that would be reflected in a separate financing transaction between the entity and its customer at contract inception and recognizes the revenue amount on a straight-line basis over the term of the Customer Agreement, and interest expense using the effective interest rate method.
+Added: When adjusting the promised amount of consideration for a significant financing component, the Company uses the discount rate that would be reflected in a separate financing transaction between the entity and
+Added: Notes to Consolidated Financial Statements — Continued
+Added: its customer at contract inception and recognizes the revenue amount on a straight-line basis over the term of the Customer Agreement, and interest expense using the effective interest rate method.
Consideration from customers is considered variable due to the performance guarantee under Customer Agreements and liquidating damage provisions under SREC contracts in the event minimum deliveries are not achieved.
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Also included are engineering and design costs, estimated warranty costs, freight costs, allocated corporate overhead costs, vehicle depreciation costs and personnel costs associated with supply chain, logistics, operations management, safety and quality control.
−Removed: Notes to Consolidated Financial Statements — Continued
Cost of revenue for lead generations consists of costs related to direct-response advertising activities associated with generating customer leads.
1 unchanged sentence
Research and development expenses include personnel costs, allocated overhead costs, and other costs related to the development of the Company’s proprietary technology.
+Added: Notes to Consolidated Financial Statements — Continued
Stock-Based Compensation
20 unchanged sentences
The Company’s initial calculation of the investor’s noncontrolling interest in the results of operations of these funding arrangements is determined as the difference in the noncontrolling 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 investors.
−Removed: Notes to Consolidated Financial Statements — Continued
The Company classifies certain noncontrolling interests with redemption features that are not solely within the control of the Company outside of permanent equity on its consolidated balance sheets.
Redeemable noncontrolling interests are reported using the greater of their carrying value as determined by the HLBV method or their estimated redemption value at each reporting date.
+Added: Notes to Consolidated Financial Statements — Continued
The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements and tax returns.
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The Company accounts for the income tax consequences of these intra-entity transfers, both current and deferred, as a component of income tax expense and deferred tax liability, net during the period in which the transfers occur.
−Removed: The Company accounts for investment tax credits as a reduction of income tax expense in the year in which the credits arise ( i.e.
+Added: The Company accounts for investment tax credits as a reduction of income tax expense in the year in which the credits are recognized (i.e.
the flow-through method).
+Added: The Company enters into ITC transfer agreements with third-party transferees to transfer to such third-parties, for cash, the ITCs generated by certain solar energy systems that have been or will be placed in service.
+Added: The Company accounts for its share of ITC transfer proceeds under ASC 740, Income Taxes , as a reduction of income tax expense in the consolidated statement of operations during the year in which the credits are recognized ( i.e.
+Added: , the flow-through method) and the tax equity investor’s share is distributed upon receipt.
The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates.
16 unchanged sentences
Accounting standards adopted January 1, 2022:
−Removed: In January 2021, the FASB issued ASU No.
−Removed: 2021-01, Reference Rate Reform (Topic 848):
−Removed: Scope , which permits entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by reference rate reform.
−Removed: This ASU is effective upon issuance and can
−Removed: Notes to Consolidated Financial Statements — Continued
−Removed: generally be applied through December 31, 2022.
−Removed: The Company adopted ASU 2019-12 effective January 1, 2021, and there was no impact to its consolidated financial statements.
−Removed: In November 2019, the FASB issued ASU No.
−Removed: 2019-12, Income Taxes (Topic 740) , which simplifies the accounting for income taxes, primarily by eliminating certain exceptions to the guidance in FASB ASC Topic 740, Income Taxes .
−Removed: The Company adopted ASU 2019-12 effective January 1, 2021, and there was no impact to its consolidated financial statements.
−Removed: In August 2020, the FASB issued ASU No.
−Removed: 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40) , simplifies the accounting for convertible instruments and the application of the derivatives scope exception for contracts in an entity’s own equity.
−Removed: This ASU is effective for fiscal periods beginning after December 15, 2021.
−Removed: The Company adopted ASU 2020-06 effective January 1, 2021, and applied this guidance to the convertible senior notes issued in January 2021, see Note 10, Indebtedness , which allowed the Company to account for the notes and their underlying conversion feature as a liability.
−Removed: There was no other impact to the Company’s consolidated financial statements as a result of this adoption.
−Removed: In March 2020, the FASB issued ASU No.
−Removed: 2020-04, Reference Rate Reform (Topic 848) , Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.
−Removed: The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or other reference rates that are expected to be discontinued because of reference rate reform.
−Removed: This ASU is available for adoption as of the beginning of the interim period that includes March 12, 2020 through December 31, 2022, as contract modifications or hedging relationships entered into or evaluated after December 31, 2022 are excluded unless an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship.
−Removed: In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):
−Removed: Deferral of the Sunset Date of Topic 848 , which defers the sunset date from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.
−Removed: For the Company’s cash flow hedges in which the designated hedged risk is LIBOR or another rate that is expected to be discontinued, the Company adopted upon issuance of ASU 2020-04 the portion of the guidance that allows it to assert that it remains probable that the hedged forecasted transaction will occur.
−Removed: The Company adopted the remainder of this guidance effective January 1, 2021, and there was no impact to its consolidated financial statements.
−Removed: Accounting standards adopted January 1, 2022:
In October 2021, the FASB issued ASU No.
1 unchanged sentence
Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers .
−Removed: This ASU is effective for interim and annual periods beginning after December 15, 2022 on a prospective basis, with early adoption permitted.
+Added: This ASU is effective for interim and annual periods beginning after
+Added: Notes to Consolidated Financial Statements — Continued
+Added: December 15, 2022 on a prospective basis, with early adoption permitted.
Effective January 1, 2022, the Company early adopted ASU 2021-08 on a prospective basis.
10 unchanged sentences
The Company adopted ASU 2022-04 effective January 1, 2023 and there was no impact to its financial statement disclosures.
−Removed: Accounting standards to be adopted:
−Removed: Notes to Consolidated Financial Statements — Continued
+Added: Accounting standards adopted January 1, 2024:
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):
−Removed: Improvements to Reportable Segment Disclosures , which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources.
−Removed: This ASU is effective for fiscal periods beginning after December 15, 2023, with early adoption permitted.
−Removed: The Company is currently evaluating this guidance and the impact it may have on its financial statement disclosures.
+Added: Improvements to Reportable Segment Disclosures , which expands disclosures about a public entity’s reportable segments and requires enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s CODM uses reported segment profit or loss information in assessing segment performance and allocating resources.
+Added: This ASU became effective for fiscal years beginning after December 15, 2023.
+Added: The Company adopted ASU 2023-07 during the year ended December 31, 2024, see Segment Information above in this footnote for further detail.
+Added: Accounting standards to be adopted:
+Added: In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative , to modify the disclosure or presentation requirements of a variety of topics, which will allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements, and to align the requirements in the FASB accounting standard codification with the SEC’s regulations.
+Added: The amendments in this ASU are effective when the related disclosure is effectively removed from Regulations S-X or S-K, with early adoption prohibited.
+Added: The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):
1 unchanged sentence
and foreign jurisdictions.
−Removed: This ASU is effective for fiscal periods beginning after December 15, 2024, with early adoption permitted.
+Added: This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.
The Company is currently evaluating this guidance and the impact it may have on its financial statement disclosures.
+Added: In March 2024, the SEC issued Final Rule 33-11275 and 34-99678 - The Enhancement and Standardization of Climate-Related Disclosures for Investors.
+Added: This rule requires registrants to provide standardized disclosures related to climate-related risks, governance and risk management strategies, and the financial impact of severe weather events and Scope 1 and 2 greenhouse gas emissions.
+Added: The rule requires implementation in phases between 2025 and 2033.
+Added: In April 2024, the SEC announced that it would voluntarily stay its final climate disclosure rules pending judicial review.
+Added: The Company is currently evaluating the impact of the rule on its future consolidated financial statements.
+Added: Notes to Consolidated Financial Statements — Continued
+Added: In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures:
+Added: Disaggregation of Income Statement Expenses .
+Added: This guidance requires disclosures about significant expense categories, including but not limited to, inventory purchases, employee compensation, depreciation, amortization, and selling expenses.
+Added: This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.
+Added: The Company is currently evaluating this guidance and the impact it may have on its financial statement disclosures.
+Added: In November 2024, the FASB issued ASU 2024-04, Debt — Debt with Conversion and Other Options (Subtopic 470-20) — Induced Conversions of Convertible Debt Instruments .
+Added: This guidance clarifies the requirements for determining whether to account for certain early settlements of convertible debt instruments as induced conversions or extinguishment.
+Added: This ASU is effective for fiscal years beginning after December 15, 2025, with early adoption permitted for entities that have already adopted ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815- 40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity .
+Added: The Company is currently evaluating this guidance and the impact it may have on its future consolidated financial statements.
Fair Value Measurement
39 unchanged sentences
$ 402,083 $ 459,746
+Added: The Internal Revenue Service (“IRS”) provided taxpayers a safe harbor opportunity for solar facilities that began construction prior to January 1, 2025 and are placed in service on or after January 1, 2025 to elect the application of the Commercial ITC under Section 48(a) of the Code.
+Added: The Company has sought to avail itself of the safe harbor in order to retain the ability to elect the application of the Commercial ITC under Section 48(a) of the Code by incurring certain costs and taking title to equipment in 2024.
+Added: As of December 31, 2024, there was $ 349.5 million related to the safe harbor program within raw materials.
Solar Energy Systems, net
10 unchanged sentences
All solar energy systems, including construction-in-progress, have been leased to or are subject to signed Customer Agreements with customers.
+Added: In accordance with its policy, the Company periodically reviews the estimated useful lives of its fixed assets on an ongoing basis and recognizes any changes in estimated useful lives
+Added: Notes to Consolidated Financial Statements — Continued
+Added: by prospectively adjusting depreciation expense.
+Added: During the three months ended June 30, 2024, the Company completed an assessment of its battery equipment, which included review of an independent engineering report, and determined that the useful life of its batteries was longer than the estimated useful life being used to calculate depreciation.
+Added: As a result, effective April 1, 2024, the Company changed its estimated useful life to reflect the estimated period these assets will remain in service.
+Added: The estimated useful life of batteries previously was 10 years and was increased to 15 years.
+Added: The impact of this change in estimate reduces depreciation expense and was immaterial for the twelve months ended December 31, 2024.
+Added: For batteries placed in service as of the effective date of April 1, 2024, the impact on depreciation for the year ended December 31, 2024 was approximately $ 14.0 million.
The Company recorded depreciation expense related to solar energy systems of $ 584.6 million, $ 500.6 million and $ 426.7 million for the years ended December 31, 2024, 2023 and 2022, respectively.
The depreciation expense was reduced by the amortization of deferred grants of $ 7.8 million, $ 8.2 million and $ 8.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.
−Removed: Notes to Consolidated Financial Statements — Continued
Property and Equipment, net
18 unchanged sentences
The Company has determined that it has one reporting unit and performs its annual impairment test of goodwill on October 1 of each fiscal year or whenever events or circumstances change or occur that would indicate that goodwill might be impaired.
−Removed: During the third quarter of 2023, due to the continued material sustained decline in the Company’s market capitalization after consideration of a control premium below the book value of equity, the Company performed an interim quantitative assessment as of September 30, 2023 related to the recoverability of its goodwill for its one reporting unit.
+Added: During the fourth quarter of 2024, the Company as part of its annual impairment test performed a qualitative assessment as of October 1, 2024 related to the recoverability of its goodwill for its one reporting unit.
+Added: As of October 1, 2024, the Company concluded that the fair value of the Company’s one reporting unit exceed its carrying value with consideration of a reasonable control premium.
+Added: However, during the fourth quarter of fiscal 2024, the Company performed an interim quantitative assessment as of December 31, 2024 related to the recoverability of its goodwill for its one reporting unit as a result of a material sustained decline in the Company’s market capitalization below the book value of equity.
+Added: The Company concluded that the fair value of its one reporting unit did not exceed its carrying value as of December 31, 2024 and recorded a non-cash goodwill impairment charge of $ 3.1 billion in its consolidated statements of operations.
As of September 30, 2023, the Company concluded that the fair value of the Company’s one reporting unit did not exceed its carrying value with consideration of a control premium and recorded a non-cash goodwill impairment charge of $ 1.2 billion in its consolidated statements of operations.
−Removed: There were no such impairments during the years ended December 31, 2022 and 2021.
−Removed: As of October 1, 2023, the Company conducted its annual goodwill impairment test.
−Removed: The test concluded that no additional impairment had occurred during the fourth quarter of 2023.
−Removed: To corroborate this conclusion, the Company compared the carrying value of its one reporting unit to its enterprise market capitalization after consideration of a reasonable control premium and concluded that there was no goodwill impairment during the fourth quarter of 2023.
+Added: There was no such impairment during the year ended December 31, 2022.
The change in the carrying value of goodwill is as follows (in millions):
2 unchanged sentences
Balance—December 31, 2023 $ 3,122
+Added: Impairment—December 31, 2024 $ ( 3,122 )
+Added: Balance—December 31, 2024 $ —
Other assets consist of the following (in thousands):
24 unchanged sentences
Accrued interest 115,112 92,881
+Added: Accrued supplier finance obligations
Other accrued expenses 164,871 283,358
9 unchanged sentences
$ 384,226 $ 539,502 $ — 8.45 % 8.89 % SOFR + 3.25 %
−Removed: January 2025 (4)
−Removed: 0 % Convertible Senior Notes (5)
+Added: Convertible Senior Notes due 2026 (5)
7,687 397,642 — — % — % — % February 2026
+Added: Convertible Senior Notes due 2030 (6)
+Added: 483,187 — — 4.00 % — % 4 % March 2030
Total recourse debt 875,100 937,144 —
4 unchanged sentences
2,412,400 1,886,300 61,500 7.24 % 7.59 % SOFR + 2.35 % - 3.10 %
−Removed: April 2025 - March 2027 (7)
+Added: March 2027 - February 2028
Senior non-revolving loans (9)
1 unchanged sentence
SOFR + 1.85 % - 2.25 %
−Removed: April 2024 - July 2053
+Added: September 2026 - January 2054
Subordinated revolving and delayed draw loans (8)
20,400 146,000 — 13.62 % 12.01 % SOFR + 9.10 %
−Removed: April 2024 - March 2027
Subordinated loans (10)(11)(12)
1 unchanged sentence
SOFR + 6.50 % - 6.90 %
−Removed: June 2026 - January 2042
+Added: April 2027 - January 2042
Securitized loans 4,705,549 3,450,794 — 5.08 % 4.61 % 2.27 % - 6.60 %
−Removed: 3,450,794 2,531,465 — 4.61 % 3.87 % 2.27 % - 6.60 %
−Removed: July 2045 - January 2059
+Added: April 2048 - October 2059
Total non-recourse debt 12,155,441 9,820,130 61,500
6 unchanged sentences
(3) Ranges shown reflect fixed interest rate and rates using SOFR, as applicable.
−Removed: (4) The former working capital facility was terminated in January 2022 and was replaced by this syndicated working capital facility with banks has a total commitment up to $ 600.0 million and is secured by substantially all of the unencumbered assets of the Company, as well as ownership interests in certain subsidiaries of the Company.
+Added: (4) The working capital facility (the “Facility”) was amended in October 2024 and its total commitment of up to $ 447.5 million is secured by substantially all of the unencumbered assets of the Company, as well as ownership interests in certain subsidiaries of the Company.
Borrowings under the Facility may be designated as Base Rate Loans or Term SOFR Loans, subject to certain terms and conditions under the Credit Agreement.
−Removed: Base Rate Loans accrue interest at a rate per year equal to 2.25 % plus the highest of (a) the federal funds rate plus 0.50 %, (b) the interest rate determined from time to time by the Administrative Agent as its prime rate and notified to the Company, (c) the Adjusted Term SOFR Rate (defined below) for a one-month interest period in effect on such day (or if such day is not a business day, the immediately preceding business day) plus 1.00 % and (d) 0.00 %.
−Removed: Term SOFR Loans accrue interest at a rate per annum equal to (a) 3.25 % plus (b) the greater of (i) 0.00 % and (ii) the sum of (x) the forward-looking term rate for a period comparable to the applicable available tenor based on SOFR that is published by CME Group Benchmark Administration Ltd or a successor for the applicable interest period and (y) (1) if the applicable interest period is one month, 0.11448 %, (2) if the applicable interest period is three months, 0.26161 % or (c) if the applicable interest period is six months, 0.42826 % (the rate pursuant to clause (b), the “Adjusted Term SOFR Rate”).
+Added: Base Rate Loans accrue interest at a rate per year equal to 2.25 % to 2.75 % depending on total outstanding balance as a percentage of total commitment plus the highest of (a) the federal funds rate plus 0.50 %, (b) the interest rate determined from time to time by the Administrative Agent as its prime rate and notified to the Company, (c) the Adjusted Term SOFR Rate (defined below) for a one-month interest period in effect on such day (or if such day is not a business day, the immediately preceding business day) plus 1.00 % and (d) 0.00 %.
+Added: Term SOFR Loans accrue interest at a rate per annum equal to (a) 3.25 % to 3.75 % depending on total outstanding balance as a percentage of total commitment plus (b) the greater of (i) 0.00 % and (ii) the sum of (x) the forward-looking term rate for a period comparable to the applicable available tenor based on SOFR that is published by CME Group Benchmark Administration Ltd or a successor for the applicable interest period and (y) (1) if the applicable interest period is one month, 0.11448 %, (2) if the applicable interest period is three months, 0.26161 % or (c) if the applicable interest period is six months, 0.42826 % (the rate
+Added: pursuant to clause (b), the “Adjusted Term SOFR Rate”).
+Added: The maturity date of this facility was automatically extended to March 1, 2027 in September 2024 as the Company had funds on deposit in the Convertible Debt Reserve Account equal to the amount sufficient to repay at the scheduled maturity all of its 0% Senior Convertible Notes due 2026 that were outstanding as of September 2024.
This facility is subject to various restrictive covenants, such as the completion and presentation of audited consolidated financial statements, maintaining a minimum modified interest coverage ratio, a minimum modified current ratio, a maximum modified leverage ratio, and a minimum unencumbered cash balance, in each case, tested quarterly.
The Company was in compliance with all debt covenants as of December 31, 2024.
−Removed: In February 2024, the Company extended its working capital
−Removed: facility with a new maturity date of November 1, 2025 and a total commitment up to $ 447.5 million, and repaid approximately $ 152.3 million in outstanding borrowings.
−Removed: The maturity date can be further extended to March 2027, if the Company meets certain liquidity tests as of September 30, 2024.
−Removed: (5) These convertible senior notes ("Notes") will not bear regular interest, and the principal amount of the notes will not accrete.
+Added: (5) Convertible senior notes due 2026 (the "2026 Notes") under this category with an outstanding balance of $ 7.7 million as of December 31, 2024 will not bear regular interest, and the principal amount of the 2026 Notes will not accrete.
The 2026 Notes may bear special interest under specified circumstances relating to the Company’s failure to comply with its reporting obligations under the Indenture or if the 2026 Notes are not freely tradeable as required by the indenture.
5 unchanged sentences
As of December 31, 2024, $ 7.7 million of the debt discount was amortized to interest expense inception to date.
−Removed: In connection with the offering of the Notes, the Company entered into privately negotiated capped call transactions (“Capped Calls”) with certain of the initial purchasers and/or their respective affiliates at a cost of approximately $ 28.0 million.
+Added: In connection with the offering of the 2026 Notes, the Company entered into privately negotiated capped call transactions (the “2026 Capped Calls”) with certain of the initial purchasers and/or their respective affiliates at a cost of approximately $ 28.0 million.
The 2026 Capped Calls are classified as equity and were recorded to additional paid-in-capital within stockholders’ equity as of March 31, 2021.
6 unchanged sentences
None of the conversion criteria has been met as of December 31, 2024.
+Added: (6) Convertible senior notes due 2030 (the "2030 Notes" and, together with the 2026 Notes, the "Notes") under this category with an outstanding balance of $ 483.2 million as of December 31, 2024 will bear regular interest at 4.00 % per annum, and the principal amount of the 2030 Notes will not accrete.
+Added: The 2030 Notes may bear special interest under specified circumstances relating to the Company’s failure to comply with its reporting obligations under the Indenture or if the 2030 Notes are not freely tradeable as required by the indenture.
+Added: The 2030 Notes will mature on March 1, 2030, unless repurchased by the Company, redeemed by the Company or converted pursuant to their terms prior to maturity.
+Added: The initial conversion rate of the 2030 Notes is 61.3704 shares of the Company’s common stock, par value $ 0.0001 per share, per $1,000 principal amount of 2030 Notes, which is equivalent to an initial conversion price of approximately $ 16.29 per share.
+Added: The conversion rate will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid special interest.
+Added: In addition, upon the occurrence of a make-whole fundamental change or an issuance of a notice of redemption, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2030 Notes in connection with such make-whole fundamental change or notice of redemption.
+Added: The debt discount recorded on the 2030 Notes is being amortized to interest expense at an effective interest rate of 4.51 %.
+Added: As of December 31, 2024, $ 1.6 million of the debt discount was amortized to interest expense inception to date.
+Added: In connection with the offering of the 2030 Notes, the Company entered into privately negotiated capped call
+Added: transactions (the “2030 Capped Calls”) with certain of the initial purchasers and/or their respective affiliates at a cost of approximately $ 38.4 million.
+Added: The 2030 Capped Calls are classified as equity and were recorded to additional paid-in-capital within stockholders’ equity as of March 31, 2024.
+Added: The 2030 Capped Calls each have an initial strike price of approximately $ 16.29 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2030 Notes.
+Added: The 2030 Capped Calls have initial cap prices of $ 22.37 per share.
+Added: The 2030 Capped Calls cover, subject to anti-dilution adjustments, approximately 29.7 million shares of common stock.
+Added: The 2030 Capped Calls are expected generally to reduce the potential dilution to the common stock upon any conversion of 2030 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the 2030 Notes, as the case may be, in the event the market price per share of common stock, as measured under the 2030 Capped Calls, is greater than the strike price of the 2030 Capped Call, with such offset subject to a cap.
+Added: If, however, the market price per share of the common stock, as measured under the 2030 Capped Calls, exceeds the cap price of the 2030 Capped Calls, there would be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that the then-market price per share of the common stock exceeds the cap price.
+Added: The final components of the 2030 Capped Calls are scheduled to expire on February 27, 2030.
+Added: None of the conversion criteria has been met as of December 31, 2024.
(7) Certain loans under this category are part of project equity transactions.
(8) Pursuant to the terms of the aggregation facilities within this category the Company may draw up to an aggregate principal amount of $ 2.8 billion in revolver borrowings depending on the available borrowing base at the time.
−Removed: In February 2024, the Company increased the size of the facilities within this category to $ 2.35 billion and extended the maturity date to April 2028.
+Added: (9) Loans under this category with a fixed rate had a total outstanding balance of $ 888.6 million as of December 31, 2024.
(10) A loan under this category with an outstanding balance of $ 152.5 million as of December 31, 2024 contains a put option that can be exercised beginning in 2036 that would require the Company to pay off the entire loan on November 30, 2037.
(11) Loans under this category with a floating rate had a total outstanding balance of $ 646.4 million as of December 31, 2024.
−Removed: (10) As of December 31, 2023, a loan under this category has a balance of $ 160.6 million with a maturity date of April 2024 and is reflected in Non-recourse debt, current portion within the Consolidated Balance Sheet.
−Removed: Although there is no assurance that the Company will be able to do so, the Company plans to extend or otherwise refinance the facility prior to maturity.
−Removed: (11) As of December 31, 2023, a loan under this category has a balance of $ 100.0 million with a maturity date of April 2024 and is reflected in Non-recourse debt, current portion within the Consolidated Balance Sheet.
−Removed: Although there is no assurance that the Company will be able to do so, the Company plans to extend or otherwise refinance the facility prior to maturity.
−Removed: (12) As of December 31, 2023, a loan under this category had a balance of $ 54.2 million with a final rated maturity date of July 2045.
−Removed: Although there is no assurance that the Company will be able to do so, the Company plans to extend or otherwise refinance the facility prior to anticipated repayment date.
+Added: (12) A loan under this category with an outstanding balance of $ 217.5 million as of December 31, 2024 and a maturity date of June 28, 2026 was amended on January 31, 2025 to extend the maturity date to June 28, 2027 and upsize the facility by $ 35.0 million.
Senior and Subordinated Debt Facilities
8 unchanged sentences
Each of the financings also contains certain provisions which entitle the indenture trustee or collateral agent to take certain actions upon the occurrence of an event of default, including acceleration of amounts due under the facilities and the foreclosure on the assets of the Non-Recourse Borrower that are pledged to the lenders under the terms thereof.
−Removed: The facilities are non-recourse to the Company and are secured by first priority security interests by each Non-Recourse Borrower in favor of the indenture trustee or collateral agent in all of the Non-Recourse Borrower’s assets including the cash flows from Customer Agreements which are available to each Non-Recourse Borrower after giving effect to certain operating, maintenance and other expenses and, where applicable, distributions to tax equity investors.
+Added: The facilities are non-recourse to the Company and are secured by first priority security interests by each Non-Recourse Borrower in favor of the indenture trustee or collateral agent in all of the Non-Recourse Borrower’s assets including the cash flows from Customer Agreements which are available to each Non-Recourse Borrower after giving effect to certain operating,
+Added: maintenance and other expenses and, where applicable, distributions to tax equity investors.
As a result of such security interests, the assets of each Non-Recourse Borrower are not available to the creditors of the Company unless and until distributions from such entities are made to the Company as permitted under the applicable facility documentation.
6 unchanged sentences
2028 2,567,435
+Added: 2029 1,244,672
Thereafter 6,575,160
8 unchanged sentences
As of September 30, 2023, all of the Company's interest rate swap agreements were indexed to SOFR.
+Added: In December 2023, the Company started using interest rate swaptions to protect against adverse fluctuations in interest rates prior to expected future draws on the Company’s floating-rate facilities, at which point the Company enters into long-term interest rate hedges.
The interest rate swaps have been designated as cash flow hedges.
15 unchanged sentences
Total derivative assets & liabilities $ 164,373 $ — $ 164,373 $ 4,153,946
−Removed: (1) Comprised of 79 interest rate swaps which effectively fix the SOFR portion of interest rates on outstanding balances of certain loans under the senior and securitized sections of the debt footnote table (see Note 10, Indebtedness ) at 0.31 % to 4.53 % per annum.
−Removed: These swaps mature from April 30, 2024 to January 31, 2043.
+Added: (1) Comprised of 66 interest rate swaps which effectively fix the SOFR portion of interest rates on outstanding balances of certain loans under the senior section of the debt footnote table (see Note 10, Indebtedness ) at 0.31 % to 4.53 % per annum.
+Added: These swaps mature from August 13, 2027 to January 31, 2043.
+Added: (2) Comprised of 9 interest rate swaptions which effectively fix the SOFR portion of interest rates on future outstanding balances of certain loans under the senior revolving section of the debt footnote table (see Note 10, Indebtedness ) at 3.94 % to 4.27 % per annum.
+Added: These swaptions expire from February 5, 2025 to March 5, 2025 with potential underlying swaps maturing on October 31, 2040.
As of December 31, 2023, the information related to these offsetting arrangements were as follows (in thousands):
19 unchanged sentences
Interest rate swaps
−Removed: (Gains) losses reclassified from AOCI into income $ ( 36,755 ) $ — $ ( 2,407 ) $ — $ 21,517 $ —
+Added: Gains reclassified from AOCI into income $ ( 35,237 ) $ — $ ( 36,755 ) $ — $ ( 2,407 ) $ —
Derivatives not designated as cash flow hedges:
Interest rate swaps
−Removed: Gains recognized into income — 661 — ( 189,710 ) — ( 21,387 )
+Added: (Gains) losses recognized into income — ( 121,665 ) — 661 — ( 189,710 )
Total (gains) losses $ ( 35,237 ) $ ( 121,665 ) $ ( 36,755 ) $ 661 $ ( 2,407 ) $ ( 189,710 )
3 unchanged sentences
There were forty-four undesignated derivative instruments recorded by the Company as of December 31, 2024.
−Removed: Pass-Through Financing Obligations
−Removed: The Company's pass-through financing obligations ("financing obligations") arise when the Company leases solar energy systems to Fund investors who are considered commercial customers under a master lease agreement, and these investors in turn are assigned the Customer Agreements with customers.
+Added: Pass-Through Financing Obligation
+Added: The Company's pass-through financing obligation ("Financing Obligation") arises when the Company leases solar energy systems to Fund investors who are considered commercial customers under a master lease agreement, and these investors in turn are assigned the Customer Agreements with customers.
The Company receives all of the value attributable to the accelerated tax depreciation and some or all of the value attributable to the other incentives.
−Removed: Given the assignment of operating cash flows, these arrangements are accounted for as financing obligations.
+Added: Given the assignment of operating cash flows, this arrangement is accounted for as a Financing Obligation.
The Company also sells the rights and related value attributable to the Commercial ITC to these investors.
−Removed: Under these financing obligation arrangements, wholly owned subsidiaries of the Company finance the cost of solar energy systems with investors for an initial term of 22 years, and one fund for 7 years.
−Removed: The solar energy systems are subject to Customer Agreements with an initial term of typically 20 or 25 years that automatically renew annually or for five years .
+Added: Under the Financing Obligation arrangement, a wholly owned subsidiary of the Company finances the cost of solar energy systems with investors for an initial term of seven years .
+Added: The solar energy systems are subject to Customer Agreements with an initial term of typically 20 years that automatically renew annually or for five years .
These solar energy systems are reported under the line item solar energy systems, net in the consolidated balance sheets.
−Removed: As of December 31, 2023 and 2022, the cost of the solar energy systems placed in service under the financing obligation arrangements was $ 692.3 million and $ 699.5 million, respectively.
−Removed: The accumulated depreciation related to these assets as of December 31, 2023 and 2022 was $ 191.5 million and $ 167.9 million, respectively.
−Removed: During the year ended December 31, 2021, the Company retired one of its financing obligations and terminated the associated lease for $ 18.1 million, which resulted in a debt extinguishment expense of $ 6.3 million.
−Removed: The investors make a series of large up-front payments and, in certain cases, subsequent smaller quarterly payments (lease payments) to the subsidiaries of the Company.
−Removed: The Company accounts for the payments received from the investors under the financing obligation arrangements as borrowings by recording the proceeds received as financing obligations on its consolidated balance sheets, and cash provided by financing activities in its consolidated statements of cash flows.
−Removed: These financing obligations are reduced over a period of approximately 22 years, or over 7 years in the case of one fund, by customer payments under the Customer Agreements, and proceeds from the contracted resale of SRECs as they are received by the investor.
+Added: As of December 31, 2023, the cost of the solar energy systems placed in service under the Financing Obligation arrangement was $ 692.3 million.
+Added: The accumulated depreciation related to these assets as of December 31, 2023 was $ 191.5 million.
+Added: During the year ended December 31, 2024, the Company retired all five of its remaining Financing Obligation arrangements and terminated the associated leases for $ 240.3 million, which resulted in a gain on debt extinguishment of $ 50.6 million.
+Added: The investors make a series of large up-front payments and, subsequent smaller quarterly payments (lease payments) to the subsidiary of the Company.
+Added: The Company accounts for the payments received from the investors under the Financing Obligation arrangement as borrowings by recording the proceeds received as a Financing Obligation on its consolidated balance sheets, and cash provided by financing activities in its consolidated statements of cash flows.
+Added: This Financing Obligation is reduced over a period of approximately 7 years by customer payments under the Customer Agreements.
In addition, funds paid for the Commercial ITC value upfront are initially recorded as a refund liability and recognized as revenue as the associated solar energy system reaches PTO.
−Removed: The Commercial ITC value is reflected in cash provided by
−Removed: operations on the consolidated statements of cash flows.
−Removed: The Company accounts for the Customer Agreements, as well as the resale of SRECs consistent with the Company’s revenue recognition accounting policies as described in Note 2, Summary of Significant Accounting Policies.
−Removed: Interest is calculated on the financing obligations using the effective interest rate method.
+Added: The Commercial ITC value, if any, is reflected in cash provided by operations on the consolidated statements of cash flows.
+Added: The Company accounts for the Customer Agreements consistent with the Company’s revenue recognition accounting policies as described in Note 2, Summary of Significant Accounting Policies.
+Added: Interest is calculated on the financing obligation using the effective interest rate method.
The effective interest rate, which is adjusted on a prospective basis, is the interest rate that equates the present value of the estimated cash amounts to be received by the investor over the lease term with the present value of the cash amounts paid by the investor to the Company, adjusted for amounts received by the investor.
−Removed: The financing obligations are nonrecourse once the associated assets have been placed in service and all the contractual arrangements have been assigned to the investor.
−Removed: Under the majority of the financing obligations, the investor has a right to extend its right to receive cash flows from the customers beyond the initial term in certain circumstances.
−Removed: Depending on the arrangement, the Company has the option to settle the outstanding financing obligation on the ninth or eleventh anniversary of the Fund inception at a price equal to the higher of (a) the fair value of future remaining cash flows or (b) the amount that would result in the investor earning their targeted return.
−Removed: In several of these financing obligations, the investor has an option to require repayment of the entire outstanding balance on the tenth anniversary of the Fund inception at a price equal to the fair value of the future remaining cash flows.
−Removed: Under the majority of the financing obligations, the Company is responsible for services such as warranty support, accounting, lease servicing and performance reporting to customers.
+Added: The Financing Obligation is nonrecourse once the associated assets have been placed in service and all the contractual arrangements have been assigned to the investor.
+Added: Under the Financing Obligation, the investor has a right to extend its right to receive cash flows from the customers beyond the initial term in certain circumstances.
+Added: Under the Financing Obligation, the Company is responsible for services such as warranty support, accounting, lease servicing and performance reporting to customers.
As part of the warranty and performance guarantee with the customers in applicable Funds, the Company guarantees certain specified minimum annual solar energy production output for the solar energy systems leased to the customers, which the Company accounts for as disclosed in Note 2, Summary of Significant Accounting Policies.
36 unchanged sentences
$ 2,343,040 $ 2,417,984
−Removed: The Company holds certain variable interests in nonconsolidated VIEs established as a result of six pass-through Fund arrangements as further explained in Note 12, Pass-Through Financing Obligations .
−Removed: The Company does not have material exposure to losses as a result of its involvement with the VIEs in excess of the amount of the pass-through financing obligation recorded in the Company’s consolidated financial statements.
−Removed: The Company is not considered the primary beneficiary of these VIEs.
Redeemable Noncontrolling Interests
4 unchanged sentences
The Company did not have any convertible preferred stock issued and outstanding as of December 31, 2024 and 2023.
−Removed: Notes to Consolidated Financial Statements — Continued
The Company did not declare or pay any dividends in 2024, 2023 or 2022.
15 unchanged sentences
In March 2015, the Board of Directors authorized an additional 3,000,000 shares reserved for issuance under the 2013 Plan.
−Removed: An aggregate of 4,500,000 shares of common stock are reserved for issuance under the 2013 Plan plus (i) any shares that were reserved but not issued under the plan that was previously in place, and (ii) any shares subject to stock options or similar awards granted under the plan that was previously in place that expire or otherwise terminate without having been exercised in full and shares issued that are forfeited to or repurchased by the Company, with the maximum number of shares to be added to the 2013 Plan pursuant to clauses (i) and (ii) equal to 8,044,829 shares.
−Removed: Stock options granted to employees generally have a maximum term of ten-years and vest over a four-year period from the date of grant;
−Removed: 25 % vest at the end of one year , and 75 % vest monthly over the remaining three years .
−Removed: The options may include provisions permitting exercise of the option prior to full vesting.
−Removed: Any unvested shares shall be subject to repurchase by the Company at the original exercise price of the option in the event of a termination of an optionee’s employment prior to vesting.
+Added: An aggregate of 4,500,000 shares of common stock were reserved for issuance under the 2013 Plan plus (i) any shares that were reserved but not issued under the plan that was previously in place, and (ii) any shares subject to stock options or similar awards granted under the plan that was previously in place that expire or otherwise terminate without having been exercised in full and shares issued that are forfeited to or repurchased by the Company, with the maximum number of shares to be added to the 2013 Plan pursuant to clauses (i) and (ii) equal to 8,044,829 shares.
All the remaining shares that were available for future grants under the 2013 Plan were transferred to the 2015 Equity Incentive Plan (“2015 Plan”) at the inception of the 2015 Plan.
1 unchanged sentence
Upon completion of the Merger, the Company may grant equity awards through the Sunrun-VSI 2014 Equity Incentive Plan (“Sunrun-VSI 2014 Plan”), which was previously called the Vivint Solar 2014 Equity Incentive Plan.
−Removed: Under the Sunrun-VSI 2014 Plan, the Company may grant stock options, restricted stock, restricted stock units (“RSUs”), stock appreciation rights, performance stock units, performance shares and performance awards to its employees, directors and consultants, and its parent and subsidiary corporations’ employees and consultants.
−Removed: As of December 31, 2023, a total of 5.7 million shares of common stock were available for grant under the Sunrun-VSI 2014 Plan, subject to adjustment in the case of certain events.
−Removed: In addition, any shares that otherwise would be returned to the Omnibus Plan (as defined below) as the result of the expiration or termination of stock options may be added to the Sunrun-VSI 2014 Plan.
−Removed: The number of shares available to grant under the Sunrun-VSI 2014 Plan is subject to an annual increase on the first day of each year.
−Removed: Long-term Incentive Plan
Notes to Consolidated Financial Statements — Continued
−Removed: In July 2013, Vivint Solar’s board of directors approved shares of common stock for six Long-term Incentive Plan Pools (“LTIP Pools”) that comprise the 2013 Long-term Incentive Plan (the “LTIP”).
−Removed: Participants in the LTIP are allocated a portion of the LTIP Pools relative to the performance of other participants on a measurement date that is determined once performance conditions are met.
−Removed: The Merger Agreement provided that the LTIP awards outstanding immediately prior to the Closing Date were canceled and terminated and that subsequent to the Closing Date, each holder of a canceled LTIP award would be granted an RSU award to be settled in shares of Sunrun common stock, with the number of shares underlying such award calculated as if the LTIP performance hurdles were achieved, with the Closing Date as the determination date.
−Removed: As a result, approximately 1.5 million shares of the Company common stock were awarded as RSUs to LTIP participants with a grant date equal to the Closing Date.
−Removed: These RSUs vest in three equal installments, subject to the grantee’s continued provision of services to the Company.
−Removed: One-third vested 30 days after the Closing Date, one-third vested nine months after the Closing Date, and one-third vested 18 months after the Closing Date.
−Removed: As of December 31, 2023, there are no remaining shares available for grant under the LTIP.
+Added: Under the Sunrun-VSI 2014 Plan, the Company could grant stock options, restricted stock, restricted stock units (“RSUs”), stock appreciation rights, performance stock units, performance shares and performance awards to its employees, directors and consultants, and its parent and subsidiary corporations’ employees and consultants.
+Added: In September 2024, the Sunrun-VSI 2014 Plan expired pursuant to its terms and as of that date no additional shares were able to be granted pursuant to such plan.
+Added: All Sunrun-VSI 2014 Plan shares that were reserved but not granted have expired and are no longer available for grant under the Sunrun-VSI 2014 Plan.
2015 Equity Incentive Plan
16 unchanged sentences
Outstanding at December 31, 2022 5,217 $ 16.08 5.68 $ 58,784
−Removed: ( 1,401 ) 8.04
Canceled ( 199 ) 29.58
4 unchanged sentences
Options vested and expected to vest at December 31, 2024 3,507 $ 19.05 4.54 $ 3,882
−Removed: Notes to Consolidated Financial Statements — Continued
The weighted-average grant-date fair value of stock options granted during the year ended December 31, 2024, 2023 and 2022 were $ 0.00 , $ 0.00 and $ 17.21 per share, respectively.
2 unchanged sentences
The total fair value of options vested during the year ended December 31, 2024, 2023 and 2022 was $ 6.5 million, $ 11.8 million and $ 16.7 million, respectively.
+Added: Notes to Consolidated Financial Statements — Continued
The Company estimates the fair value of stock-based awards on their grant date using the Black-Scholes option-pricing model.
7 unchanged sentences
65.60 % - 69.40 %
−Removed: 65.60 % - 69.40 %
−Removed: 63.00 % - 67.80 %
Expected term (in years)
3 unchanged sentences
Treasury zero-coupon issue with a term that approximates the expected life of the option grant.
−Removed: No stock options were granted in the year ended December 31, 2023.
−Removed: For stock options granted in the year ended December 31, 2022, the expected volatility was calculated based on the Company’s average historical volatilities and for the stock options granted in the year ended December 31, 2021, the Company considered the volatility data of a group of publicly traded peer companies in its industry.
+Added: No stock options were granted in the years ended December 31, 2024 and 2023.
+Added: For stock options granted in the year ended December 31, 2022, the expected volatility was calculated based on the Company’s average historical volatilities.
The Company accounts for forfeitures as they occur and, as such, reverses compensation cost previously recognized in the period the award is forfeited, for an award that is forfeited before completion of the requisite service period .
12 unchanged sentences
The exercise price of each warrant is $ 0.01 per share, and 13,939 , 63,742 and 346,269 warrants were exercised during the years ended December 31, 2024, 2023 and 2022, respectively.
−Removed: During the years ended December 31, 2023, 2022 and 2021, the Company
−Removed: Notes to Consolidated Financial Statements — Continued
−Removed: recognized stock-based compensation expense of $ 4.3 million, $ 4.3 million and $ 10.7 million, respectively, under time-based warrants.
+Added: During the years ended December 31, 2024, 2023 and 2022, the Company recognized stock-based compensation expense of nil , $ 4.3 million and $ 4.3 million, respectively, under time-based warrants.
Employee Stock Purchase Plan
2 unchanged sentences
Employees may purchase a limited number of shares of the Company’s common stock via regular payroll deductions at a discount of 15 % of the lower of the fair market value of the Company’s common stock on the first trading date of each offering period or on the exercise date.
−Removed: Employees may deduct up to 15 % of payroll, with a cap of $ 25,000 of fair market value of shares in any calendar year and 10,000 shares per employee per purchase period.
+Added: Employees may deduct up to 15 % of payroll, with a
+Added: Notes to Consolidated Financial Statements — Continued
+Added: cap of $ 25,000 of fair market value of shares in any calendar year and 10,000 shares per employee per purchase period.
Under the ESPP, 1,000,000 shares of the Company’s common stock have been reserved for issuance to eligible employees.
17 unchanged sentences
As of December 31, 2024 and 2023, total unrecognized compensation cost related to outstanding stock options and RSUs was $ 150.6 million and $ 146.5 million, respectively, which are expected to be recognized over a weighted-average period of 2.5 years.
−Removed: Total unrecognized compensation cost includes the assumed unvested Vivint Solar awards to be recognized as stock-based compensation expense over the remaining requisite service period.
−Removed: Per FASB ASC Topic 805, Business Combinations , the replacement of stock options or other share-based payment awards in conjunction with a business combination represents a modification of share-based payment awards that must be accounted for in accordance with FASB ASC Topic 718, Stock Compensation .
−Removed: As a result of the Company’s issuance of replacement awards, a portion of the fair-value-based measure of the replacement awards is included in the purchase consideration.
−Removed: To determine the portion of the replacement awards that is part of the purchase consideration, the Company measured the fair value of both the replacement awards and the historical awards as of the Acquisition Date.
−Removed: The fair value of the replacement awards, whether vested or unvested, was included in the purchase consideration to the extent that pre-acquisition services were rendered.
−Removed: In the year ended December 31, 2023, the Company recognized compensation cost of $ 1.6 million for modifications due to the reduction in services of two grantees.
−Removed: Notes to Consolidated Financial Statements — Continued
The Sunrun 401(k) Plan and the Vivint Solar 401(k) Plan are deferred salary arrangements under Section 401(k) of the Internal Revenue Code.
11 unchanged sentences
Loss before income taxes $ 4,382,034 $ 2,695,532 $ 847,354
+Added: Notes to Consolidated Financial Statements — Continued
The income tax (benefit) provision consists of the following (in thousands):
15 unchanged sentences
0.06 ( 1.11 ) 3.42
+Added: Foreign provision, net of federal benefit ( 0.71 ) — —
Effect of noncontrolling and redeemable noncontrolling interests
33 unchanged sentences
Net deferred tax liabilities $ ( 137,940 ) $ ( 122,870 )
−Removed: The Company accounts for investment tax credits as a reduction of income tax expense in the year in which the credits arise (i.e.
+Added: The Company accounts for investment tax credits as a reduction of income tax expense in the year in which the credits are recognized ( i.e.
the flow-through method).
−Removed: As of December 31, 2023, the Company has an investment tax credit carryforward of approximately $ 102.0 million which begins to expire in the year 2033, if not utilized, $ 0.8 million of California enterprise zone credits which begin to expire in the year 2024, and $ 1.1 million of other state tax credits which begin to expire in the year 2024.
+Added: As of December 31, 2024, the Company has an investment tax credit carryforward of approximately $ 109.3 million which begins to expire in the year 2033, if not utilized.
As of December 31, 2023, the Company has an investment tax credit carryforward of approximately $ 102.0 million and California enterprise zone credits of approximately $ 0.8 million.
+Added: The Company enters into ITC transfer agreements with third-party transferees to transfer to such third-parties, for cash, the ITCs generated by certain solar energy systems that have been or will be placed in service.
+Added: The Company accounts for its share of ITC transfer proceeds under ASC 740, Income Taxes , as a reduction of income tax expense in the consolidated statement of operations during the year in which the credits are recognized ( i.e.
+Added: , the flow-through method) and the tax equity investor’s share is distributed upon receipt.
+Added: During the 12 months ended December 31, 2024 and December 31, 2023, the Company recognized income tax benefit to the Company of $ 70.0 million and $ 2.0 million, respectively, from such transfers.
Generally, utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code (IRC) of 1986, as amended and similar state provisions.
4 unchanged sentences
The Company’s management considers all available positive and negative evidence including its history of operating income or losses, future reversals of existing taxable temporary difference, taxable income in carryback years and tax-planning strategies.
−Removed: The Company has concluded that it is more likely than not that the benefit from certain federal and state tax credits and net operating loss carryforwards will not be realized.
−Removed: In recognition of this risk, the Company has provided a valuation allowance of $ 174.3 million on certain deferred tax assets, including those relating to federal and state tax credits and state net operating loss carryforwards, which is an increase of $ 112.6 million in 2023.
+Added: The Company has concluded that it is more likely than not that the benefit from certain federal, state, and foreign tax credits and net operating loss carryforwards will not be realized.
+Added: In recognition of this risk, the Company has provided a valuation allowance of
+Added: Notes to Consolidated Financial Statements — Continued
+Added: $ 165.0 million on certain deferred tax assets, including those relating to federal, state, and foreign tax credits and net operating loss carryforwards, which is a decrease of $ 9.3 million in 2024.
The Company sells solar energy systems to investment Funds.
1 unchanged sentence
However, this gain is recognized for tax reporting purposes.
−Removed: The Company accounts for the income tax
−Removed: Notes to Consolidated Financial Statements — Continued
−Removed: consequences of these intra-entity transfers, both current and deferred, as a component of income tax expense and deferred tax liability, net during the period in which the transfers occur.
+Added: The Company accounts for the income tax consequences of these intra-entity transfers, both current and deferred, as a component of income tax expense and deferred tax liability, net during the period in which the transfers occur.
Uncertain Tax Positions
The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates.
−Removed: In the normal course of business, the Company is subject to examination by federal, state and local jurisdictions, where applicable.
+Added: In the normal course of business, the Company is subject to examination by federal, state and local, and foreign jurisdictions, where applicable.
The statute of limitations for the tax returns varies by jurisdiction.
5 unchanged sentences
The Company’s policy is to include interest and penalties related to unrecognized tax benefits, if any, within the provision for taxes in the consolidated statements of operations.
−Removed: The IRS is auditing one of the Company’s tax equity investors, relating to an investment fund covered by the Company’s 2018 insurance policy in an audit involving a review of the fair market value determination of solar energy systems.
−Removed: The Company is unable to determine if this audit will result in an adverse final determination at this time.
+Added: In 2018, the IRS opened an audit of one of the Company’s investors and reviewed the tax basis of the Company’s solar energy systems in the investment fund, which is covered by the Company’s 2018 insurance policy.
+Added: In December 2024, this IRS audit resolved with no adverse findings involving the fair market value of the price paid by the investment fund for the Company’s solar energy systems.
+Added: The Company incurred no out-of-pocket costs except the time, procedural, and administrative expenses associated with such a multi-year process.
+Added: The Company does not expect increases in insurance premiums as a result of this audit.
The Company is subject to taxation and files income tax returns in the U.S., its territories, and various state and local jurisdictions.
−Removed: Due to the Company’s net losses, substantially all of its federal, state and local income tax returns since inception are still subject to audit.
+Added: Due to the Company’s net losses, substantially all of its federal, state and local, and foreign income tax returns since inception are still subject to audit.
The following table summarizes the tax years that remain open and subject to examination by the tax authorities in the most significant jurisdictions in which the Company operates:
1 unchanged sentence
State 2019-2024
+Added: Foreign 2019-2024
Net Operating Loss Carryforwards
As a result of the Company’s net operating loss carryforwards as of December 31, 2024, the Company does not expect to pay income tax, including in connection with its income tax provision for the year ended December 31, 2024.
−Removed: As of December 31, 2023, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $ 720.7 million and $ 3.3 billion, respectively, which will begin to expire in 2028 for federal purposes and in 2024 for state purposes.
+Added: As of December 31, 2024, the Company had net operating loss carryforwards for federal, state, and foreign income tax purposes of approximately $ 720.7 million, $ 3.3 billion, and $ 459.9 million, respectively, which will begin to expire in 2028 for federal purposes, in 2025 for state purposes, and in 2031 for foreign purposes.
In addition, federal and certain state net operating loss carryforwards generated in tax years beginning after December 31, 2017 total $ 2.0 billion and $ 334.4 million, respectively, and have indefinite carryover periods and do not expire.
+Added: Notes to Consolidated Financial Statements — Continued
Commitments and Contingencies
Letters of Credit
−Removed: As of December 31, 2023 and 2022, the Company had $ 37.0 million and $ 44.4 million, respectively, of unused letters of credit outstanding, which each carry fees of 0.50 % - 3.25 % per annum and 0.50 % - 3.25 % per annum, respectively.
−Removed: Notes to Consolidated Financial Statements — Continued
+Added: As of December 31, 2024 and 2023, the Company had $ 47.3 million and $ 37.0 million, respectively, of unused letters of credit outstanding, which each carry fees of 0.50 % - 3.25 %, respectively.
Certain tax equity funds and debt facilities require the Company to maintain an aggregate amount of $ 35.0 million of unencumbered cash and cash equivalents at the end of each month.
45 unchanged sentences
Purchase Commitment
−Removed: The Company entered into purchase commitments, which have the ability to be canceled without significant penalties, with multiple suppliers to purchase $ 366.4 million of photovoltaic modules, inverters and batteries by the end of the first quarter of 2025.
+Added: The Company entered into a purchase commitment, which has the ability to be canceled without significant penalties, with a supplier to purchase $ 574.0 million of batteries by the end of the fourth quarter of 2025.
Warranty Accrual
13 unchanged sentences
The Company purchased similar additional insurance policies in January 2021, October 2022 and May 2023.
−Removed: Notes to Consolidated Financial Statements — Continued
At each balance sheet date, the Company assesses and recognizes, when applicable, the potential exposure from this obligation based on all the information available at that time, including any audits undertaken by the IRS.
−Removed: The IRS is auditing one of the Company's investors in an audit involving a review of the fair market value determination of the Company's solar energy systems in the investment fund, which is covered by the Company’s 2018 insurance policy.
−Removed: If this audit results in an adverse final determination, the Company may be subject to an indemnity obligation to its investor, which may result in certain limited out-of-pocket costs and potential increased insurance premiums in the future.
+Added: Notes to Consolidated Financial Statements — Continued
+Added: In 2018, the IRS opened an audit of one of the Company’s investors and reviewed the tax basis of the Company’s solar energy systems in the investment fund, which is covered by the Company’s 2018 insurance policy.
+Added: In December 2024, this IRS audit resolved with no adverse findings involving the fair market value of the price paid by the investment fund for the Company’s solar energy systems.
+Added: The Company incurred no out-of-pocket costs except the time, procedural, and administrative expenses associated with such a multi-year process.
+Added: The Company does not expect increases in insurance premiums as a result of this audit.
The Company is subject to certain legal proceedings, claims, investigations and administrative proceedings in the ordinary course of its business.
The Company records a provision for a liability when it is both probable that the liability has been incurred and the amount of the liability can be reasonably estimated.
+Added: The Company evaluates the adequacy of its legal reserves based on its assessment of many factors, including interpretations of the law and assumptions that ultimately may or may not be correct about the future outcome of each case based on available information.
These provisions, if any, are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case.
2 unchanged sentences
While the outcome of these matters cannot currently be predicted with certainty, the Company does not currently believe that the outcome of any of these claims will have a material adverse effect, individually or in the aggregate, on its consolidated financial position, results of operations, or cash flows.
−Removed: The Company accrues for losses that are probable and can be reasonably estimated.
−Removed: The Company evaluates the adequacy of its legal reserves based on its assessment of many factors, including interpretations of the law and assumptions about the future outcome of each case based on available information.
Net (Loss) Income Per Share
31 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.