Yellow Boxes = Needs to be filled in
Following are excerpts from Tesla's 2020 annual 10-K document, Item 7 - Management's Discussion and Analysis. Expanded excerpts from the 10-K were also published with the 1 assignment in Canvas. 2 3 Year Ended December 31, 2020 vs. 2019 Change 2019 vs. 2018 Change 4 (Dollars in millions) 2020 2019 2018 $ % $ % 5 The following excerpts are from pgs 13-15 of the 10-K Excerpts pdf file (labeled pgs 40-42 in the original 10-K document) 6 Revenues 7 Automotive sales $26,184 $19,952 $17,632 $6,232 31.2% $2,320 13.2% 8 Automotive leasing 1,052 869 883 183 21.1% (14) -1.6% 9 Total automotive revenues 27,236 20,821 18,515 6,415 30.8% 2,306 12.5% 10 Services and other segment 2,306 2.226 1,391 80 3.6% 835 60.0% 11 Total automotive & services and other segment revenue 29,542 23,047 19,906 6,495 28.2% 3,141 15.8% 12 Energy generation and storage segment 1,994 1,531 1,555 463 30.2% (24) -1.5% 13 Total revenues $31,536 $24,578 $21,461 $6,958 28.3% $3,117 14.5% 14 Cost of revenues 15 16 Automotive sales $19,696 $15,939 $13,686 $3,757 23.6% $2,253 16.5% 17 Automotive leasing 563 459 488 104 22.7% (29) -5.9% 18 Total automotive cost of revenues 20,259 16,398 14,174 3,861 23.5% 2,224 15.7% 19 Services and other segment 2,671 2.770 1,880 (99) -3.6% 890 47.3% 20 Total automotive & services and other segment cost of revenue 22,930 19,168 16,054 3,762 19.6% 3,114 19.4% 21 Energy generation and storage segment 1,976 1,341 1,365 635 47.4% (24) -1.8% 22 Total cost of revenues $24,906 $20,509 $17,419 $4,397 21.4% $3,090 17.7% 23 Gross profit and gross margin 24 Note: Tesla uses the term "gross profit" for the dollar amount (in millions), and the term "gross margin' for the percentage of revenue 26 Gross profit total automotive $6,977 $4,423 $4,341 $2,554 57.7% $82 1.9% 27 Gross margin total automotive 25.6% 21.2% 23.4% 28 Gross profit total automotive & services and other segment $6,612 $3,879 $3,852 $2,733 70.5% $27 0.7% 29 Gross margin total automotive & services and other segment 22.4% 16.8% 19.4% 30 Gross profit energy generation and storage segment $18 $190 $190 ($172) -90.5% SO 0.0% 31 Gross margin energy generation and storage segment 0.9% 12.4% 12.2% 32 Total gross profit $6,630 $4,069 $4,042 $2,561 62.9% $27 0.7% 33 Total gross margin 21.0% 16.6% 18.8% 34 35 The following excerpts are from pgs 16-17 of the 10-K Excerpts pdf file (labeled pgs 43-44 in the original 10-K document) Research and Development Expense 36 37 Research and development $1,491 $1,343 $1,460 $148 11.0% ($117) -8.0% 38 As a percentage of revenues 4.7% 5.5% 6.8% 25 Research and Development Expense 36 37 Research and development $1,491 $1,343 $1,460 $148 11.0% ($117) -8.0% 38 As a percentage of revenues 4.7% 5.5% 6.8% 39 Research and development (R&D) expenses consist primarily of personnel costs for our teams in engineering and research, manufacturing engineering and manufacturing test 40 organizations, prototyping expense, contract and professional services and amortized equipment expense. 41 42 R&D expenses increased $148 million, or 11%, in the year ended December 31, 2020 as compared to the year ended December 31, 2019. The increase was primarily due to a $62 43 million increase in expensed materials as we continue to expand our product roadmap, $61 million increase in stock-based compensation expense primarily related to the issuance of 44 equity awards in fiscal year 2020 at higher grant date fair values due to our increased share price, $20 million increase in facilities, freight and depreciation expenses and a $20 million 45 increase in employee and labor related expenses. R&D expenses as a percentage of revenue decreased from 5.5% to 4.7% in the year ended December 31, 2020 as compared to the 46 year ended December 31, 2019. The decrease is primarily an increase in total revenues from expanding sales, partially offset by an increase in our R&D expenses as detailed above. 47 48 Selling, General and Administrative Expense 49 Selling, general and administrative $3,145 $2,646 $2,835 $499 18.9% ($189) -6.7% 50 As a percentage of revenues 10.0% 10.8% 13.2% 51. Selling, general and administrative ("SG&A) expenses generally consist of personnel and facilities costs related to our stores, marketing, sales, executive, finance, human resources, 52 information technology and legal organizations, as well as fees for professional and contract services and litigation settlements. 54 55 SG&A expenses increased $499 million, or 19%, in the year ended December 31, 2020 as compared to the year ended December 31, 2019. The increase is primarily due to an increase 56 of $625 million in stock-based compensation expense, of which $542 million was attributable to the 2018 CEO Performance Award. We recorded stock-based compensation expense 57 of $838 million in the year ended December 31, 2020 for the 2018 CEO Performance Award compared to $296 million in the prior year. Of the expense recorded in fiscal year 2020, 58 $232 million was due to cumulative catch-up expense for the service provided from the grant date when three operational milestones under such award were considered probable of 59 being met and the remaining unamortized expense of $357 million for the first four tranches were recognized upon vesting as the first four market capitalization milestones were 60 achieved (see Note 14, Equity Incentive Plans, to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K). The remaining stock-based 61 compensation expense increase of $83 million attributable to other directors and employees is primarily related to the issuance of equity awards in fiscal year 2020 at higher grant date 62 fair values due to our increased share price. The increase in stock-based compensation was partially offset by a decrease of $90 million in customer promotional costs, facilities- 63 related expenses and sales and marketing activities. Additionally, there was a reduction to operating expenses for costs previously incurred in the amount of $43 million for the 64 settlement in part of the securities litigation relating to the SolarCity acquisition (see Note 16, Commitments and ContingenciesLegal ProceedingsSecurities Litigation Relating to the 65 SolarCity Acquisition, to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K). 66 67 SG&A expenses as a percentage of revenue decreased from 11% to 10% in year ended December 31, 2020 as compared to the year ended December 31, 2019. The decrease is 68 primarily from an increase total revenues from expanding sales, partially offset by an increase in our SG&A expenses as detailed above. Return Vertical Analysis Dec. 31, 2019 Dec. 31, 2020 37.2% 1 Tesla, Inc. 2 2 Consolidated Balance Sheets - USD ($) $ in Millions 3 Current assets 4 Cash and cash equivalents 5 Accounts receivable, net 6 Inventory 7 Prepaid expenses and other current assets 8 8 Total current assets 9 Operating lease vehicles, net 10 Solar energy systems, net 11 Property, plant and equipment, net 12 Operating lease right-of-use assets 13 Intangible assets, net 14 Goodwill 15 Other non-current assets 16 Total assets 17 Current liabilities 18 Accounts payable 19 Accrued liabilities and other 20 Deferred revenue 21 Customer deposits 22 Current portion of debt and finance leases 23 Total current liabilities 24 Debt and finance leases, net of current portion 25 Deferred revenue, net of current portion 26 Other long-term liabilities 27 Total liabilities 28 Commitments and contingencies (Note 16) 29 Redeemable noncontrolling interests in subsidiaries 30 Convertible senior notes (Note 12) $ 19,384 1,886 4,101 1,346 26,717 3,091 5,979 12,747 1,558 313 207 1,536 52,148 $6,268 1,324 3,552 959 12,103 2,447 6,138 10,396 1,218 339 198 1,470 34,309 6,051 3,855 1,458 752 2,132 14,248 9,556 1,284 3,330 28,418 3,771 3,222 1,163 726 1,785 10,667 11,634 1,207 2,691 26,199 604 643 51 1 31 Stockholders' equity Preferred stock; $0.001 par value; 100 shares authorized; no 32 shares issued and outstanding Common stock; $0.001 par value; 2,000 shares authorized; 960 [1] 1 and 905 shares issued and outstanding as of December 31, 2020 33 and December 31, 2019, respectively 34 Additional paid-in capital 27,260 12,736 35 Accumulated other comprehensive income (loss) 363 (36) 36 Accumulated deficit (5,399) (6,083) 37 Total stockholders' equity 22,225 6,618 38 Noncontrolling interests in subsidiaries 850 849 39 Total liabilities and equity 52,148 34,309 40 [1] Prior period results have been adjusted to reflect the five-for-one stock split effected in the form of a stock dividend in August 41 2020. See Note 1, Overview Return Horizontal Analysis % Chg Dec. 31, 2019 Dec. 31, 2020 $ Chg 4 13,116 13,116 209% 1 Tesla, Inc. 2 Consolidated Balance Sheets - USD ($) $ in Millions 3 Current assets 4 Cash and cash equivalents 5 Accounts receivable, net 6 Inventory 7 Prepaid expenses and other current assets 8 Total current assets 9 Operating lease vehicles, net 10 Solar energy systems, net 11 Property, plant and equipment, net 12 Operating lease right-of-use assets 13 Intangible assets, net 14 Goodwill 15 Other non-current assets 16 Total assets 17 Current liabilities 18 Accounts payable 19 Accrued liabilities and other 20 Deferred revenue 21 Customer deposits 22 Current portion of debt and finance leases 23 Total current liabilities 24 Debt and finance leases, net of current portion 25 Deferred revenue, net of current portion 26 Other long-term liabilities 27 Total liabilities 28 Commitments and contingencies (Note 16) 29 Redeemable noncontrolling interests in subsidiaries 30 Convertible senior notes (Note 12) $ 19,384 1,886 4,101 1,346 26,717 3,091 5,979 12,747 1,558 313 207 1,536 52,148 $ 6,268 1,324 3,552 959 12,103 2,447 6,138 10,396 1,218 339 198 1,470 34,309 3,771 3,222 1,163 726 6,051 3,855 1,458 752 2,132 14,248 9,556 1,284 3,330 28,418 1,785 10,667 11,634 1,207 2,691 26,199 643 604 51 -- 31 Stockholders' equity Preferred stock; $0.001 par value; 100 shares authorized; no 32 shares issued and outstanding Common stock; $0.001 par value; 2,000 shares authorized; 960 [1] 1 1 and 905 shares issued and outstanding as of December 31, 2020 33 and December 31, 2019, respectively 34 Additional paid-in capital 27,260 12,736 35 Accumulated other comprehensive income (loss) 363 (36) 36 Accumulated deficit (5,399) (6,083) 37 Total stockholders' equity 22,225 6,618 38 Noncontrolling interests in subsidiaries 850 849 39 Total liabilities and equity 52,148 34,309 40 [1] Prior period results have been adjusted to reflect the five-for-one stock split effected in the form of a stock dividend in August 2020. See Note 41 1, Overview Vertical Analysis Return 12 Months Ended Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2018 83.0% $ 26,184 1,052 27,236 1,994 2,306 31,536 $ 19,952 869 20,821 1,531 2,226 24,578 $ 17,632 883 18,515 1,555 1,391 21,461 13,686 488 14,174 19,696 563 20,259 1,976 2,671 24,906 6,630 15,939 459 16,398 1,341 2,770 20,509 4,069 1,365 1,880 17,419 4,042 1 Tesla, Inc. 2 Consolidated Statements of Operations 3 USD ($) shares in Millions, Sin Millions 4 Revenues 5 Automotive sales 6 Automotive leasing 7 Total automotive revenues 8 Energy generation and storage 9 Services and other 10 Total revenues 11 Cost of revenues 12 Automotive sales 13 Automotive leasing 14 Total automotive cost of revenues 15 Energy generation and storage 16 Services and other 17 Total cost of revenues 18 Gross profit 19 Operating expenses 20 Research and development 21 Selling, general and administrative 22 Restructuring and other 23 Total operating expenses 24 Income (loss) from operations 25 Interest income 26 Interest expense 27 Other (expense) income, net 28 Income (loss) before income taxes 29 Provision for income taxes 30 Net income (loss) Net income (loss) attributable to noncontrolling interests 31 and redeemable noncontrolling interests in subsidiaries 32 Net income (loss) attributable to common stockholders 33 Less: Buy-out of noncontrolling interest Net income (loss) used in computing net income (loss) per 34 share of common stock 1,491 3,145 1,343 2,646 149 4,138 4,636 1,994 30 (748) (122) 1,154 292 $862 141 (69) 44 (685) 45 (665) 110 ($775) 87 1,460 2,835 135 4,430 (388) 24 (663) 22 (1,005) 58 ($1,063) (87) 721 (976) 31 $ 690 (862) 8 $ (870) $ (976) 141 87 Net income (loss) attributable to noncontrolling interests (87) 31 and redeemable noncontrolling interests in subsidiaries 32 Net income (loss) attributable to common stockholders 721 (862) (976) 33 Less: Buy-out of noncontrolling interest 31 8 Net income (loss) used in computing net income (loss) per $ 690 $(870) $(976) 34 share of common stock Net income (loss) per share of common stock attributable to 35 common stockholders 36 Basic [1] $ 0.74 $(0.98) $(1.14) 37 Diluted $ 0.64 $(0.98) $(1.14) Weighted average shares used in computing net income 38 (loss) per share of common stock 39 Basic 40 Diluted [1] 1,083 887 41 42 [1] Prior period results have been adjusted to reflect the five-for-one stock split effected in the form of a stock dividend in August 2020. See Note 1, Overview 43 1 933 887 853 853 14 Horizontal Analysis Return 12 Months Ended Dec. 31, 2019 Dec. 31, 2020 $ Chg % Chg $ Chg % Chg Dec. 31, 2018 6,232 31% $ 26,184 1,052 27,236 1,994 2,306 31,536 $ 19,952 869 20,821 1,531 2,226 24,578 $ 17,632 883 18,515 1,555 1,391 21,461 19,696 563 20,259 1,976 15,939 459 16,398 1,341 2,770 20,509 4,069 ET 13,686 488 14,174 1,365 1,880 17,419 4,042 1 Tesla, Inc. 2 Consolidated Statements of Operations 3 USD ($) shares in Millions, $ in Millions 4 Revenues 5 Automotive sales 6 Automotive leasing 7 Total automotive revenues 8 Energy generation and storage 9 Services and other 10 Total revenues 11 Cost of revenues 12 Automotive sales 13 Automotive leasing 14 Total automotive cost of revenues 15 Energy generation and storage 16 Services and other 17 Total cost of revenues 18 Gross profit 19 Operating expenses 20 Research and development 21 Selling, general and administrative 22 Restructuring and other 23 Total operating expenses 24 Income (loss) from operations 25 Interest income 26 Interest expense 27 Other (expense) income, net 28 Income (loss) before income taxes 29 Provision for income taxes 30 Net income (loss) Net income (loss) attributable to noncontrolling interests 31 and redeemable noncontrolling interests in subsidiaries 32 Net income (loss) attributable to common stockholders 33 Less: Buy-out of noncontrolling interest Net income (loss) used in computing net income (Loss) per 34 share of common stock 2,671 24,906 6,630 1,343 1,491 3,145 2,646 4,636 1,994 30 (748) (122) 1,154 292 $862 141 149 4,138 (69) 44 (685) 45 (665) 110 ($775) 87 1,460 2,835 135 4,430 (388) 24 (663) 22 (1,005) 58 ($1,063) (87) 721 (976) 31 $ 690 (862) 8 $(870) $(976) 1 12 Months Ended Dec. 31, 2020 Dec. 31, 2019 24 279 (208) (311) (35) (9) 9,973 1,529 334 8 Dec. 31, 2018 437 (227) (6) 574 (23) Tesla, Inc. 2 Consolidated Statements of Cash Flows - USD ($) $ in Millions 3 44 Proceeds from investments by noncontrolling interests in subsidiaries 45 Distributions paid to noncontrolling interests in subsidiaries 46 Payments for buy-outs of noncontrolling interests in subsidiaries 47 Net cash provided by financing activities Effect of exchange rate changes on cash and cash equivalents and restricted 48 cash 49 Net increase in cash and cash equivalents and restricted cash 50 Cash and cash equivalents and restricted cash, beginning of period Cash and cash equivalents and restricted cash, end of period 52 Supplemental Non-Cash Investing and Financing Activities 53 Equity issued in connection with business combination 54 Acquisitions of property and equipment included in liabilities 55 Estimated fair value of facilities under build-to-suit leases 56 Supplemental Disclosures 57 Cash paid during the period for interest, net of amounts capitalized Cash paid during the period for taxes, net of refunds 13,118 6,783 $19,901 2,506 4,277 $6,783 312 3,965 $4,277 51 207 562 1,088 249 94 444 455 $54 381 $ 35 58 $ 115 59 1 Common Stock Shares Amount 844 $1 Additional Paid-in Capital $9,177 Accumulate d Other Total Redeemable Accumulate Comprehens Stockholder Noncontrolli d Deficit ive Income s' Equity ng Interests Total Equity ($4,974) $33 $4,237 $997 $5,234 623 623 (89) 534 9 9 9 0 0 0 1 0 0 7 18 0 296 775 161 (210) 296 775 0 0 0 0 (976) (41) $4,923 97 491 296 775 161 (210) 0 0 (1,001) (41) $5,757 97 491 (976) (25) (41) ($8) 863 $1 $10,248 $834 ($5,318) 97 491 (476) 174 482 (476) 174 482 (476) 174 482 24 0 0 Tesla, Inc. Consolidated Statements of Redeemable Noncontrolling Interest and Stockholders' Equity - Redeemable 2 USD ($) shares in Millions, $ in Millions Noncontrolli 3 ng Interests 4 Balance as of December 31, 2017 $398 5 Adjustments for prior period from adopting ASC 606 8 6 Adjustments for prior period from adopting ASU 2017- Exercises of conversion feature of convertible senior 7 notes 8 Issuance of common stock for equity incentive awards 9 Stook-based compensation 10 Contributions from noncontrolling interests 276 11 Distributions to noncontrolling interests (61) 12 Other (3) 13 Net loss () (62) 14 Other comprehensive loss 15 Balance as of December 31, 2018 $556 16 Adjustments for prior period from adopting ASC 842 Conversion feature of 2.00% Convertible Senior Notes 17 due in 2024 ("2024 Notes") 18 Purchase of convertible note hedges 19 Sales of warrants Issuance of common stock for equity incentive awards 20 and acquisitions, net of transaction costs Issuance of common stook is May 2019 public offering 21 at $48.60 per share (1) net of issuance costs of $15 [1] 22 Stock-based compensation 23 Contributions from noncontrolling interests 105 24 Distributions to noncontrolling interests (65) 25 Other (1) 26 Net income (loss) 48 27 Other comprehensive loss 28 Balance as of December 31, 2019 $643 29 Adjustments for prior period from adopting ASU 2016- Reclassification between equity and mezzanine equity 30 for convertible senior notes Exercises of conversion feature of convertible senior 31 notes 32 Issuance of common stook for equity incentive awards Issuance of common stock public offerings, net of 33 issuance costs of $68 34 Stock-based compensation 35 Contributions from noncontrolling interests 7 36 Distributions to noncontrolling interests (67) 37 Buy-outs of noncontrolling interests (4) 38 Net income (loss) 25 39 Other comprehensive income 40 Balance as of December 31, 2020 $604 41 18 0 848 848 848 973 174 (198) (4) (862) 973 0 0 0 (4) (862) ( (28) $6,618 (37) (51) 39 973 174 (198) (4) (823) (28) $7,467 (37) (51) (28) ($36) 905 $12,736 $849 ($6,083) (37) (51) 2 0 0 59 59 59 19 34 0 0 417 12,269 417 12.269 417 12,269 1,861 17 (132) (31) 1,861 0 0 (31) 721 399 $22,225 1.861 17 (132) (31) 837 399 $23,075 721 116 399 $363 960 $1 $27,260 ($5,399) $850 Following are excerpts from Tesla's 2020 annual 10-K document. Expanded excerpts from the 10-K were also published with the assignment in Canvas (see the notes at the bottom for explanation of some terms used). 1 2 7 3 Note 2 - Summary of Significant Accounting Policies Cash and Cash Equivalents All highly liquid investments with an original maturity of three months or less at the date of purchase are considered cash equivalents. Our cash equivalents are primarily comprised of money market funds. Restricted Cash We maintain certain cash balances restricted as to withdrawal or use. Our restricted cash is comprised primarily of cash as collateral for our sales to lease partners with a resale value guarantee, letters of credit, real estate leases, insurance policies, credit card borrowing facilities and certain operating leases. In addition, restricted cash includes cash received from certain fund investors that have not been released for use by us and cash held to service certain payments under various secured debt facilities. We record restricted cash as other assets in the consolidated balance sheets and determine current or noncurrent classification based on the 5 expected duration of the restriction. Our total cash and cash equivalents and restricted cash, as presented in the consolidated statements of cash flows, was as follows 6 (in millions): December 31 December 31, December 31, 2020 2019 2018 8 Cash and cash equivalents $19,384 $6,268 $3,686 9 Restricted cash included in prepaid expenses and other current assets 238 246 193 10 Restricted cash included in other non-current assets 279 269 398 11 Total as presented in the consolidated statements of cash flows $19,901 $6,783 $4,277 Note 6 Inventory 12 13 Our inventory consisted of the following (in millions): December 31, December 31, 2020 2019 15 Raw materials $1,508 $1,428 16 Work in process 493 362 17 Finished goods (1) 1,666 1,356 18 Service parts 434 406 19 Total $4,101 $3,552 (1) Finished goods inventory includes vehicles in transit to fulfill customer orders, new vehicles available for sale, used vehicles, energy storage products and Solar Roof products available for sale. For solar energy systems, we commence transferring component parts from inventory to construction in progress, a component of solar energy systems, once a lease or PPA contract with a customer has been executed and installation has been initiated. Additional costs incurred on the leased solar energy systems, including labor and overhead, are recorded within solar energy systems under construction 14 20 21 23 For solar energy systems, we commence transferring component parts from inventory to construction in progress, a component of solar energy systems, once a lease or PPA contract with a customer has been executed and installation has been initiated. Additional costs incurred on the leased solar energy systems, including labor and overhead, are recorded within solar energy systems under construction 21 We write-down inventory for any excess or obsolete inventories or when we believe that the net realizable value of inventories is less than the carrying value. During the years ended December 31, 2020, 2019 and 2018, we recorded write-downs of $145 million, $138 million and $78 million, respectively, in cost of revenues. 22 Note 8 Property, Plant, and Equipment, net 24 Our inventory consisted of the following (in millions): December 31 December 31 25 2020 2019 26 Machinery, equipment, vehicles and office furniture $8,493 $7.167 27 Tooling 1,811 1,493 28 Leasehold improvements 1,421 1,087 29 Land and buildings 3,662 3,024 30 Computer equipment, hardware and software 856 595 31 Construction in progress 1,621 764 17,864 14,130 33 Less: Acoumulated depreciations (5,117) (3,734) 34 Total $12,747 $10,396 32 Construction in progress is primarily comprised of construction of Gigafactory Berlin and Gigafactory Texas, expansion of Gigafactory Shanghai and equipment and tooling related to the manufacturing of our products. We are currently constructing Gigafactory Berlin under conditional permits. Completed assets are transferred to their respective asset classes, and depreciation begins when an asset is ready for its intended use. Interest on outstanding debt is capitalized during periods of significant capital asset construction and amortized over the useful lives of the related assets. During the years ended December 31, 2020 and 2019, we capitalized $48 million and $31 million, respectively, of interest. 35 Depreciation expense during the years ended December 31, 2020, 2019 and 2018 was $1.57 billion, $1.37 billion and $1.11 billion, respectively. Gross property, plant and equipment under finance leases as of December 31, 2020 and 2019 was $2.28 billion and $2.08 billion, respectively, with accumulated depreciation of $816 million and $483 million, respectively. 36 37 Note 9 Accrued Liabilities and Other As of December 31, 2020 and 2019, accrued liabilities and other current liabilities consisted of the following (in millions): 39 40 Accrued purchases ! 41 Taxes payable 129 42 Payroll and related costs 43 Accrued warranty reserve, ourrent portion 44 Sales return reserve, ourrent portion 45 Operating lease liabilities, current portion 46 Accrued interest 47 Resale value guarantees, current portion 48 Other current liabilities 49 Total December 31 2020 $901 777 654 479 417 286 77 23 241 $3,855 December 31, 2019 $638 611 466 344 272 228 86 317 260 $3,222 50 1 Accrued purchases primarily reflects receipts of goods and services that we had not been invoiced yet. As we are invoiced for these goods and services, this balance will reduce and accounts payable will increase. 127) Taxes payable includes value added tax, sales tax, property tax, use tax and income tax payables. Following are excerpts from Tesla's 2020 annual 10-K document, Item 7 - Management's Discussion and Analysis. Expanded excerpts from the 10-K were also published with the 1 assignment in Canvas. 2 3 Year Ended December 31, 2020 vs. 2019 Change 2019 vs. 2018 Change 4 (Dollars in millions) 2020 2019 2018 $ % $ % 5 The following excerpts are from pgs 13-15 of the 10-K Excerpts pdf file (labeled pgs 40-42 in the original 10-K document) 6 Revenues 7 Automotive sales $26,184 $19,952 $17,632 $6,232 31.2% $2,320 13.2% 8 Automotive leasing 1,052 869 883 183 21.1% (14) -1.6% 9 Total automotive revenues 27,236 20,821 18,515 6,415 30.8% 2,306 12.5% 10 Services and other segment 2,306 2.226 1,391 80 3.6% 835 60.0% 11 Total automotive & services and other segment revenue 29,542 23,047 19,906 6,495 28.2% 3,141 15.8% 12 Energy generation and storage segment 1,994 1,531 1,555 463 30.2% (24) -1.5% 13 Total revenues $31,536 $24,578 $21,461 $6,958 28.3% $3,117 14.5% 14 Cost of revenues 15 16 Automotive sales $19,696 $15,939 $13,686 $3,757 23.6% $2,253 16.5% 17 Automotive leasing 563 459 488 104 22.7% (29) -5.9% 18 Total automotive cost of revenues 20,259 16,398 14,174 3,861 23.5% 2,224 15.7% 19 Services and other segment 2,671 2.770 1,880 (99) -3.6% 890 47.3% 20 Total automotive & services and other segment cost of revenue 22,930 19,168 16,054 3,762 19.6% 3,114 19.4% 21 Energy generation and storage segment 1,976 1,341 1,365 635 47.4% (24) -1.8% 22 Total cost of revenues $24,906 $20,509 $17,419 $4,397 21.4% $3,090 17.7% 23 Gross profit and gross margin 24 Note: Tesla uses the term "gross profit" for the dollar amount (in millions), and the term "gross margin' for the percentage of revenue 26 Gross profit total automotive $6,977 $4,423 $4,341 $2,554 57.7% $82 1.9% 27 Gross margin total automotive 25.6% 21.2% 23.4% 28 Gross profit total automotive & services and other segment $6,612 $3,879 $3,852 $2,733 70.5% $27 0.7% 29 Gross margin total automotive & services and other segment 22.4% 16.8% 19.4% 30 Gross profit energy generation and storage segment $18 $190 $190 ($172) -90.5% SO 0.0% 31 Gross margin energy generation and storage segment 0.9% 12.4% 12.2% 32 Total gross profit $6,630 $4,069 $4,042 $2,561 62.9% $27 0.7% 33 Total gross margin 21.0% 16.6% 18.8% 34 35 The following excerpts are from pgs 16-17 of the 10-K Excerpts pdf file (labeled pgs 43-44 in the original 10-K document) Research and Development Expense 36 37 Research and development $1,491 $1,343 $1,460 $148 11.0% ($117) -8.0% 38 As a percentage of revenues 4.7% 5.5% 6.8% 25 Research and Development Expense 36 37 Research and development $1,491 $1,343 $1,460 $148 11.0% ($117) -8.0% 38 As a percentage of revenues 4.7% 5.5% 6.8% 39 Research and development (R&D) expenses consist primarily of personnel costs for our teams in engineering and research, manufacturing engineering and manufacturing test 40 organizations, prototyping expense, contract and professional services and amortized equipment expense. 41 42 R&D expenses increased $148 million, or 11%, in the year ended December 31, 2020 as compared to the year ended December 31, 2019. The increase was primarily due to a $62 43 million increase in expensed materials as we continue to expand our product roadmap, $61 million increase in stock-based compensation expense primarily related to the issuance of 44 equity awards in fiscal year 2020 at higher grant date fair values due to our increased share price, $20 million increase in facilities, freight and depreciation expenses and a $20 million 45 increase in employee and labor related expenses. R&D expenses as a percentage of revenue decreased from 5.5% to 4.7% in the year ended December 31, 2020 as compared to the 46 year ended December 31, 2019. The decrease is primarily an increase in total revenues from expanding sales, partially offset by an increase in our R&D expenses as detailed above. 47 48 Selling, General and Administrative Expense 49 Selling, general and administrative $3,145 $2,646 $2,835 $499 18.9% ($189) -6.7% 50 As a percentage of revenues 10.0% 10.8% 13.2% 51. Selling, general and administrative ("SG&A) expenses generally consist of personnel and facilities costs related to our stores, marketing, sales, executive, finance, human resources, 52 information technology and legal organizations, as well as fees for professional and contract services and litigation settlements. 54 55 SG&A expenses increased $499 million, or 19%, in the year ended December 31, 2020 as compared to the year ended December 31, 2019. The increase is primarily due to an increase 56 of $625 million in stock-based compensation expense, of which $542 million was attributable to the 2018 CEO Performance Award. We recorded stock-based compensation expense 57 of $838 million in the year ended December 31, 2020 for the 2018 CEO Performance Award compared to $296 million in the prior year. Of the expense recorded in fiscal year 2020, 58 $232 million was due to cumulative catch-up expense for the service provided from the grant date when three operational milestones under such award were considered probable of 59 being met and the remaining unamortized expense of $357 million for the first four tranches were recognized upon vesting as the first four market capitalization milestones were 60 achieved (see Note 14, Equity Incentive Plans, to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K). The remaining stock-based 61 compensation expense increase of $83 million attributable to other directors and employees is primarily related to the issuance of equity awards in fiscal year 2020 at higher grant date 62 fair values due to our increased share price. The increase in stock-based compensation was partially offset by a decrease of $90 million in customer promotional costs, facilities- 63 related expenses and sales and marketing activities. Additionally, there was a reduction to operating expenses for costs previously incurred in the amount of $43 million for the 64 settlement in part of the securities litigation relating to the SolarCity acquisition (see Note 16, Commitments and ContingenciesLegal ProceedingsSecurities Litigation Relating to the 65 SolarCity Acquisition, to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K). 66 67 SG&A expenses as a percentage of revenue decreased from 11% to 10% in year ended December 31, 2020 as compared to the year ended December 31, 2019. The decrease is 68 primarily from an increase total revenues from expanding sales, partially offset by an increase in our SG&A expenses as detailed above. Return Vertical Analysis Dec. 31, 2019 Dec. 31, 2020 37.2% 1 Tesla, Inc. 2 2 Consolidated Balance Sheets - USD ($) $ in Millions 3 Current assets 4 Cash and cash equivalents 5 Accounts receivable, net 6 Inventory 7 Prepaid expenses and other current assets 8 8 Total current assets 9 Operating lease vehicles, net 10 Solar energy systems, net 11 Property, plant and equipment, net 12 Operating lease right-of-use assets 13 Intangible assets, net 14 Goodwill 15 Other non-current assets 16 Total assets 17 Current liabilities 18 Accounts payable 19 Accrued liabilities and other 20 Deferred revenue 21 Customer deposits 22 Current portion of debt and finance leases 23 Total current liabilities 24 Debt and finance leases, net of current portion 25 Deferred revenue, net of current portion 26 Other long-term liabilities 27 Total liabilities 28 Commitments and contingencies (Note 16) 29 Redeemable noncontrolling interests in subsidiaries 30 Convertible senior notes (Note 12) $ 19,384 1,886 4,101 1,346 26,717 3,091 5,979 12,747 1,558 313 207 1,536 52,148 $6,268 1,324 3,552 959 12,103 2,447 6,138 10,396 1,218 339 198 1,470 34,309 6,051 3,855 1,458 752 2,132 14,248 9,556 1,284 3,330 28,418 3,771 3,222 1,163 726 1,785 10,667 11,634 1,207 2,691 26,199 604 643 51 1 31 Stockholders' equity Preferred stock; $0.001 par value; 100 shares authorized; no 32 shares issued and outstanding Common stock; $0.001 par value; 2,000 shares authorized; 960 [1] 1 and 905 shares issued and outstanding as of December 31, 2020 33 and December 31, 2019, respectively 34 Additional paid-in capital 27,260 12,736 35 Accumulated other comprehensive income (loss) 363 (36) 36 Accumulated deficit (5,399) (6,083) 37 Total stockholders' equity 22,225 6,618 38 Noncontrolling interests in subsidiaries 850 849 39 Total liabilities and equity 52,148 34,309 40 [1] Prior period results have been adjusted to reflect the five-for-one stock split effected in the form of a stock dividend in August 41 2020. See Note 1, Overview Return Horizontal Analysis % Chg Dec. 31, 2019 Dec. 31, 2020 $ Chg 4 13,116 13,116 209% 1 Tesla, Inc. 2 Consolidated Balance Sheets - USD ($) $ in Millions 3 Current assets 4 Cash and cash equivalents 5 Accounts receivable, net 6 Inventory 7 Prepaid expenses and other current assets 8 Total current assets 9 Operating lease vehicles, net 10 Solar energy systems, net 11 Property, plant and equipment, net 12 Operating lease right-of-use assets 13 Intangible assets, net 14 Goodwill 15 Other non-current assets 16 Total assets 17 Current liabilities 18 Accounts payable 19 Accrued liabilities and other 20 Deferred revenue 21 Customer deposits 22 Current portion of debt and finance leases 23 Total current liabilities 24 Debt and finance leases, net of current portion 25 Deferred revenue, net of current portion 26 Other long-term liabilities 27 Total liabilities 28 Commitments and contingencies (Note 16) 29 Redeemable noncontrolling interests in subsidiaries 30 Convertible senior notes (Note 12) $ 19,384 1,886 4,101 1,346 26,717 3,091 5,979 12,747 1,558 313 207 1,536 52,148 $ 6,268 1,324 3,552 959 12,103 2,447 6,138 10,396 1,218 339 198 1,470 34,309 3,771 3,222 1,163 726 6,051 3,855 1,458 752 2,132 14,248 9,556 1,284 3,330 28,418 1,785 10,667 11,634 1,207 2,691 26,199 643 604 51 -- 31 Stockholders' equity Preferred stock; $0.001 par value; 100 shares authorized; no 32 shares issued and outstanding Common stock; $0.001 par value; 2,000 shares authorized; 960 [1] 1 1 and 905 shares issued and outstanding as of December 31, 2020 33 and December 31, 2019, respectively 34 Additional paid-in capital 27,260 12,736 35 Accumulated other comprehensive income (loss) 363 (36) 36 Accumulated deficit (5,399) (6,083) 37 Total stockholders' equity 22,225 6,618 38 Noncontrolling interests in subsidiaries 850 849 39 Total liabilities and equity 52,148 34,309 40 [1] Prior period results have been adjusted to reflect the five-for-one stock split effected in the form of a stock dividend in August 2020. See Note 41 1, Overview Vertical Analysis Return 12 Months Ended Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2018 83.0% $ 26,184 1,052 27,236 1,994 2,306 31,536 $ 19,952 869 20,821 1,531 2,226 24,578 $ 17,632 883 18,515 1,555 1,391 21,461 13,686 488 14,174 19,696 563 20,259 1,976 2,671 24,906 6,630 15,939 459 16,398 1,341 2,770 20,509 4,069 1,365 1,880 17,419 4,042 1 Tesla, Inc. 2 Consolidated Statements of Operations 3 USD ($) shares in Millions, Sin Millions 4 Revenues 5 Automotive sales 6 Automotive leasing 7 Total automotive revenues 8 Energy generation and storage 9 Services and other 10 Total revenues 11 Cost of revenues 12 Automotive sales 13 Automotive leasing 14 Total automotive cost of revenues 15 Energy generation and storage 16 Services and other 17 Total cost of revenues 18 Gross profit 19 Operating expenses 20 Research and development 21 Selling, general and administrative 22 Restructuring and other 23 Total operating expenses 24 Income (loss) from operations 25 Interest income 26 Interest expense 27 Other (expense) income, net 28 Income (loss) before income taxes 29 Provision for income taxes 30 Net income (loss) Net income (loss) attributable to noncontrolling interests 31 and redeemable noncontrolling interests in subsidiaries 32 Net income (loss) attributable to common stockholders 33 Less: Buy-out of noncontrolling interest Net income (loss) used in computing net income (loss) per 34 share of common stock 1,491 3,145 1,343 2,646 149 4,138 4,636 1,994 30 (748) (122) 1,154 292 $862 141 (69) 44 (685) 45 (665) 110 ($775) 87 1,460 2,835 135 4,430 (388) 24 (663) 22 (1,005) 58 ($1,063) (87) 721 (976) 31 $ 690 (862) 8 $ (870) $ (976) 141 87 Net income (loss) attributable to noncontrolling interests (87) 31 and redeemable noncontrolling interests in subsidiaries 32 Net income (loss) attributable to common stockholders 721 (862) (976) 33 Less: Buy-out of noncontrolling interest 31 8 Net income (loss) used in computing net income (loss) per $ 690 $(870) $(976) 34 share of common stock Net income (loss) per share of common stock attributable to 35 common stockholders 36 Basic [1] $ 0.74 $(0.98) $(1.14) 37 Diluted $ 0.64 $(0.98) $(1.14) Weighted average shares used in computing net income 38 (loss) per share of common stock 39 Basic 40 Diluted [1] 1,083 887 41 42 [1] Prior period results have been adjusted to reflect the five-for-one stock split effected in the form of a stock dividend in August 2020. See Note 1, Overview 43 1 933 887 853 853 14 Horizontal Analysis Return 12 Months Ended Dec. 31, 2019 Dec. 31, 2020 $ Chg % Chg $ Chg % Chg Dec. 31, 2018 6,232 31% $ 26,184 1,052 27,236 1,994 2,306 31,536 $ 19,952 869 20,821 1,531 2,226 24,578 $ 17,632 883 18,515 1,555 1,391 21,461 19,696 563 20,259 1,976 15,939 459 16,398 1,341 2,770 20,509 4,069 ET 13,686 488 14,174 1,365 1,880 17,419 4,042 1 Tesla, Inc. 2 Consolidated Statements of Operations 3 USD ($) shares in Millions, $ in Millions 4 Revenues 5 Automotive sales 6 Automotive leasing 7 Total automotive revenues 8 Energy generation and storage 9 Services and other 10 Total revenues 11 Cost of revenues 12 Automotive sales 13 Automotive leasing 14 Total automotive cost of revenues 15 Energy generation and storage 16 Services and other 17 Total cost of revenues 18 Gross profit 19 Operating expenses 20 Research and development 21 Selling, general and administrative 22 Restructuring and other 23 Total operating expenses 24 Income (loss) from operations 25 Interest income 26 Interest expense 27 Other (expense) income, net 28 Income (loss) before income taxes 29 Provision for income taxes 30 Net income (loss) Net income (loss) attributable to noncontrolling interests 31 and redeemable noncontrolling interests in subsidiaries 32 Net income (loss) attributable to common stockholders 33 Less: Buy-out of noncontrolling interest Net income (loss) used in computing net income (Loss) per 34 share of common stock 2,671 24,906 6,630 1,343 1,491 3,145 2,646 4,636 1,994 30 (748) (122) 1,154 292 $862 141 149 4,138 (69) 44 (685) 45 (665) 110 ($775) 87 1,460 2,835 135 4,430 (388) 24 (663) 22 (1,005) 58 ($1,063) (87) 721 (976) 31 $ 690 (862) 8 $(870) $(976) 1 12 Months Ended Dec. 31, 2020 Dec. 31, 2019 24 279 (208) (311) (35) (9) 9,973 1,529 334 8 Dec. 31, 2018 437 (227) (6) 574 (23) Tesla, Inc. 2 Consolidated Statements of Cash Flows - USD ($) $ in Millions 3 44 Proceeds from investments by noncontrolling interests in subsidiaries 45 Distributions paid to noncontrolling interests in subsidiaries 46 Payments for buy-outs of noncontrolling interests in subsidiaries 47 Net cash provided by financing activities Effect of exchange rate changes on cash and cash equivalents and restricted 48 cash 49 Net increase in cash and cash equivalents and restricted cash 50 Cash and cash equivalents and restricted cash, beginning of period Cash and cash equivalents and restricted cash, end of period 52 Supplemental Non-Cash Investing and Financing Activities 53 Equity issued in connection with business combination 54 Acquisitions of property and equipment included in liabilities 55 Estimated fair value of facilities under build-to-suit leases 56 Supplemental Disclosures 57 Cash paid during the period for interest, net of amounts capitalized Cash paid during the period for taxes, net of refunds 13,118 6,783 $19,901 2,506 4,277 $6,783 312 3,965 $4,277 51 207 562 1,088 249 94 444 455 $54 381 $ 35 58 $ 115 59 1 Common Stock Shares Amount 844 $1 Additional Paid-in Capital $9,177 Accumulate d Other Total Redeemable Accumulate Comprehens Stockholder Noncontrolli d Deficit ive Income s' Equity ng Interests Total Equity ($4,974) $33 $4,237 $997 $5,234 623 623 (89) 534 9 9 9 0 0 0 1 0 0 7 18 0 296 775 161 (210) 296 775 0 0 0 0 (976) (41) $4,923 97 491 296 775 161 (210) 0 0 (1,001) (41) $5,757 97 491 (976) (25) (41) ($8) 863 $1 $10,248 $834 ($5,318) 97 491 (476) 174 482 (476) 174 482 (476) 174 482 24 0 0 Tesla, Inc. Consolidated Statements of Redeemable Noncontrolling Interest and Stockholders' Equity - Redeemable 2 USD ($) shares in Millions, $ in Millions Noncontrolli 3 ng Interests 4 Balance as of December 31, 2017 $398 5 Adjustments for prior period from adopting ASC 606 8 6 Adjustments for prior period from adopting ASU 2017- Exercises of conversion feature of convertible senior 7 notes 8 Issuance of common stock for equity incentive awards 9 Stook-based compensation 10 Contributions from noncontrolling interests 276 11 Distributions to noncontrolling interests (61) 12 Other (3) 13 Net loss () (62) 14 Other comprehensive loss 15 Balance as of December 31, 2018 $556 16 Adjustments for prior period from adopting ASC 842 Conversion feature of 2.00% Convertible Senior Notes 17 due in 2024 ("2024 Notes") 18 Purchase of convertible note hedges 19 Sales of warrants Issuance of common stock for equity incentive awards 20 and acquisitions, net of transaction costs Issuance of common stook is May 2019 public offering 21 at $48.60 per share (1) net of issuance costs of $15 [1] 22 Stock-based compensation 23 Contributions from noncontrolling interests 105 24 Distributions to noncontrolling interests (65) 25 Other (1) 26 Net income (loss) 48 27 Other comprehensive loss 28 Balance as of December 31, 2019 $643 29 Adjustments for prior period from adopting ASU 2016- Reclassification between equity and mezzanine equity 30 for convertible senior notes Exercises of conversion feature of convertible senior 31 notes 32 Issuance of common stook for equity incentive awards Issuance of common stock public offerings, net of 33 issuance costs of $68 34 Stock-based compensation 35 Contributions from noncontrolling interests 7 36 Distributions to noncontrolling interests (67) 37 Buy-outs of noncontrolling interests (4) 38 Net income (loss) 25 39 Other comprehensive income 40 Balance as of December 31, 2020 $604 41 18 0 848 848 848 973 174 (198) (4) (862) 973 0 0 0 (4) (862) ( (28) $6,618 (37) (51) 39 973 174 (198) (4) (823) (28) $7,467 (37) (51) (28) ($36) 905 $12,736 $849 ($6,083) (37) (51) 2 0 0 59 59 59 19 34 0 0 417 12,269 417 12.269 417 12,269 1,861 17 (132) (31) 1,861 0 0 (31) 721 399 $22,225 1.861 17 (132) (31) 837 399 $23,075 721 116 399 $363 960 $1 $27,260 ($5,399) $850 Following are excerpts from Tesla's 2020 annual 10-K document. Expanded excerpts from the 10-K were also published with the assignment in Canvas (see the notes at the bottom for explanation of some terms used). 1 2 7 3 Note 2 - Summary of Significant Accounting Policies Cash and Cash Equivalents All highly liquid investments with an original maturity of three months or less at the date of purchase are considered cash equivalents. Our cash equivalents are primarily comprised of money market funds. Restricted Cash We maintain certain cash balances restricted as to withdrawal or use. Our restricted cash is comprised primarily of cash as collateral for our sales to lease partners with a resale value guarantee, letters of credit, real estate leases, insurance policies, credit card borrowing facilities and certain operating leases. In addition, restricted cash includes cash received from certain fund investors that have not been released for use by us and cash held to service certain payments under various secured debt facilities. We record restricted cash as other assets in the consolidated balance sheets and determine current or noncurrent classification based on the 5 expected duration of the restriction. Our total cash and cash equivalents and restricted cash, as presented in the consolidated statements of cash flows, was as follows 6 (in millions): December 31 December 31, December 31, 2020 2019 2018 8 Cash and cash equivalents $19,384 $6,268 $3,686 9 Restricted cash included in prepaid expenses and other current assets 238 246 193 10 Restricted cash included in other non-current assets 279 269 398 11 Total as presented in the consolidated statements of cash flows $19,901 $6,783 $4,277 Note 6 Inventory 12 13 Our inventory consisted of the following (in millions): December 31, December 31, 2020 2019 15 Raw materials $1,508 $1,428 16 Work in process 493 362 17 Finished goods (1) 1,666 1,356 18 Service parts 434 406 19 Total $4,101 $3,552 (1) Finished goods inventory includes vehicles in transit to fulfill customer orders, new vehicles available for sale, used vehicles, energy storage products and Solar Roof products available for sale. For solar energy systems, we commence transferring component parts from inventory to construction in progress, a component of solar energy systems, once a lease or PPA contract with a customer has been executed and installation has been initiated. Additional costs incurred on the leased solar energy systems, including labor and overhead, are recorded within solar energy systems under construction 14 20 21 23 For solar energy systems, we commence transferring component parts from inventory to construction in progress, a component of solar energy systems, once a lease or PPA contract with a customer has been executed and installation has been initiated. Additional costs incurred on the leased solar energy systems, including labor and overhead, are recorded within solar energy systems under construction 21 We write-down inventory for any excess or obsolete inventories or when we believe that the net realizable value of inventories is less than the carrying value. During the years ended December 31, 2020, 2019 and 2018, we recorded write-downs of $145 million, $138 million and $78 million, respectively, in cost of revenues. 22 Note 8 Property, Plant, and Equipment, net 24 Our inventory consisted of the following (in millions): December 31 December 31 25 2020 2019 26 Machinery, equipment, vehicles and office furniture $8,493 $7.167 27 Tooling 1,811 1,493 28 Leasehold improvements 1,421 1,087 29 Land and buildings 3,662 3,024 30 Computer equipment, hardware and software 856 595 31 Construction in progress 1,621 764 17,864 14,130 33 Less: Acoumulated depreciations (5,117) (3,734) 34 Total $12,747 $10,396 32 Construction in progress is primarily comprised of construction of Gigafactory Berlin and Gigafactory Texas, expansion of Gigafactory Shanghai and equipment and tooling related to the manufacturing of our products. We are currently constructing Gigafactory Berlin under conditional permits. Completed assets are transferred to their respective asset classes, and depreciation begins when an asset is ready for its intended use. Interest on outstanding debt is capitalized during periods of significant capital asset construction and amortized over the useful lives of the related assets. During the years ended December 31, 2020 and 2019, we capitalized $48 million and $31 million, respectively, of interest. 35 Depreciation expense during the years ended December 31, 2020, 2019 and 2018 was $1.57 billion, $1.37 billion and $1.11 billion, respectively. Gross property, plant and equipment under finance leases as of December 31, 2020 and 2019 was $2.28 billion and $2.08 billion, respectively, with accumulated depreciation of $816 million and $483 million, respectively. 36 37 Note 9 Accrued Liabilities and Other As of December 31, 2020 and 2019, accrued liabilities and other current liabilities consisted of the following (in millions): 39 40 Accrued purchases ! 41 Taxes payable 129 42 Payroll and related costs 43 Accrued warranty reserve, ourrent portion 44 Sales return reserve, ourrent portion 45 Operating lease liabilities, current portion 46 Accrued interest 47 Resale value guarantees, current portion 48 Other current liabilities 49 Total December 31 2020 $901 777 654 479 417 286 77 23 241 $3,855 December 31, 2019 $638 611 466 344 272 228 86 317 260 $3,222 50 1 Accrued purchases primarily reflects receipts of goods and services that we had not been invoiced yet. As we are invoiced for these goods and services, this balance will reduce and accounts payable will increase. 127) Taxes payable includes value added tax, sales tax, property tax, use tax and income tax payables
