XML 23 R11.htm IDEA: XBRL DOCUMENT

DISPOSED AND DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2020

DISPOSED AND DISCONTINUED OPERATIONS

DISPOSED AND DISCONTINUED OPERATIONS

NOTE 4. DISPOSED AND DISCONTINUED OPERATIONS

Disposed Operations

In May 2019, we sold our grid-tied central solar inverter services business to Bold Renewables Holdings, LLC (“Bold”) for $1.00 dollar and the assumption by Bold of our initial product warranty and our extended warranty service obligations. In connection with this transaction, we entered into a Loan and Security Agreement with Bold (the “Loan and Security Agreement”). Under the Loan and Security Agreement, we loaned Bold an aggregate $5.3 million between May 2019 and the first quarter of 2020. Under the terms of the Loan and Security Agreement and for the next ten years, we have made an additional $2.75 million available for borrowing, subject to the satisfaction of certain operating and liquidity covenants by Bold. The borrowings under the Loan and Security Agreement bear interest at 0% for the first seven years and 5% thereafter. Additionally, the Loan and Security Agreement provides for early payment discounts of 50% during the first three years, 45% for years four and five and 40% thereafter up to 30 days prior to the maturity of the Loan and Security Agreement. A discount of $2.3 million has been recognized as a reduction to our gain recognized on the sale. As a result of the transaction, we reduced our discontinued operations liabilities by approximately $10.9 million that were related to initial product warranty and reduced our other liabilities by approximately $22.0 million that were related to extended warranty service obligations as well as reduced other assets and liabilities associated with the continuing grid-tied central solar inverter service and repair business. Accordingly, a $14.8 million non-cash gain was

recognized in Other income (expense) from continuing operations and an $8.6 million non-cash gain, net of tax expense of $2.4 million, was recognized in “Income (loss) from discontinued operations”.

Discontinued Operations

In December 2015, we completed the wind down of engineering, manufacturing, and sales of our solar inverter product line (the "inverter business"). Accordingly, the results of our inverter business have been reflected as "Income (loss) from discontinued operations, net of income taxes" on our Consolidated Statements of Operations for all periods presented herein.

The effect of our sales of extended inverter warranties to our customers continues to be reflected in deferred revenue in our Consolidated Balance Sheets. Deferred revenue for extended inverter warranties and the associated costs of warranty service will be reflected in Sales and Cost of goods sold, respectively, from continuing operations in future periods in our Consolidated Statement of Operations, as the deferred revenue, is earned and the associated services are rendered. Extended warranties related to the inverter product line are no longer offered.

The significant items included in "Income (loss) from discontinued operations, net of income taxes" are as follows:


		Three Months Ended September 30,						Nine Months Ended September 30,
		2020			2019			2020			2019
Sales		$	—		$	—		$	—		$	—
Cost of sales			—			(700)			—			(900)
Total operating expense			128			133			533			514
Operating income (loss) from discontinued operations			(128)			567			(533)			386
Other income (expense)			151			(84)			(1)			10,835
Income (loss) from discontinued operations before income taxes			23			483			(534)			11,221
Provision (benefit) for income taxes			(27)			108			(113)			2,531
Income (loss) from discontinued operations, net of income taxes		$	50		$	375		$	(421)		$	8,690

Assets and Liabilities of discontinued operations within the Consolidated Balance Sheets are comprised of the following:


		September 30,			December 31,
		2020			2019
Cash and cash equivalents		$	—		$	—
Accounts and other receivables, net			—			—
Inventories			23			30
Other current assets			23			30
Other assets			—			—
Deferred income tax assets			269			269
Deposits and other assets			269			269
Accounts payable and other accrued expenses			137			—
Accrued warranty			894			914
Other accrued expenses			1,031			914
Accrued warranty			310			698
Other liabilities			215			189
Other long-term liabilities		$	525		$	887