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Equity Method Investment and Receivable From Investee
 9 Months Ended
Sep. 30, 2012
Equity Method Investment and Receivable from Investee [Abstract]  
Equity Method Investment and Receivable From Investee
3.   Equity Method Investment and Receivable From Investee

On December 31, 2011, we converted our Real Goods Solar Class B common shares, which had ten votes per share, to Real Goods Solar Class A common shares, which have one vote per share. This conversion was done in accordance with the terms of a Shareholders Agreement dated December 19, 2011 entered into with Riverside Renewable Energy Investments, LLC, the majority owner of Earth Friendly Energy Group Holdings LLC d/b/a Alteris Renewables, Inc. (“Alteris”) in connection with Real Goods Solar’s acquisition of Alteris and no consideration was exchanged.

 

Through Gaiam’s recognition of its noncash portion, $14.3 million, of Real Goods Solar’s net loss for the third quarter of 2012, which included goodwill, net deferred tax assets, and other asset impairment charges of $36.5 million, the carrying values of our equity method investment in and loan to Real Good Solar were reduced to zero at September 30, 2012 and we recognized a related income tax benefit of $5.1 million. See Note 12. Income Taxes. As a result, we will not report any potential future net losses from Real Goods Solar. Additionally, based on Real Goods Solar’s establishment of a valuation allowance for all its net deferred tax assets, we reduced to zero the $1.6 million deferred tax asset related to our Tax Sharing Agreement with Real Goods Solar.

The receivable from equity method investee at September 30, 2012 represents amounts owed in the ordinary course of business under our Intercorporate Services and Industrial Building Lease Agreements with Real Goods Solar. Charges under these agreements are typically billed and collected at least quarterly.

At September 30, 2012, we owned approximately 37.5% of Real Goods Solar’s Class A common stock with a trading value of $7.0 million based on the closing market price of Real Goods Solar’s Class A common stock on September 30, 2012. At September 30, 2012, our equity in the net assets of Real Goods Solar was approximately $2.9 million.

Summarized financial information for our equity method investee, Real Goods Solar, is as follows:

 

         

(in thousands)

   September 30,
2012		  

Current assets

   $ 36,081  

Noncurrent assets

     4,597  
   

 

 

  

Total assets

   $ 40,678  
   

 

 

  

Current liabilities

   $ 27,597  

Noncurrent liabilities

     5,407  
   

 

 

  

Total liabilities

   $ 33,004  
   

 

 

  

 

                 

(in thousands)

   For the
Three
Months
Ended
September 30,
2012		     For the
Nine
Months
Ended
September 30,
2012		  

Net revenue

   $ 26,358     $ 66,061  

Gross profit

     5,737       17,483  

Net loss

     (39,017 )      (43,391 )