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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________________________
FORM 10-Q
(Mark One)  
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from ____________to ____________
 Commission File Number 001-38598 
________________________________________________________________________
be-20220930_g1.jpg

BLOOM ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
________________________________________________________________________
Delaware 77-0565408
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
4353 North First Street, San Jose, California
95134
(Address of principal executive offices) (Zip Code)
(408) 543-1500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class(1)
Trading Symbol Name of each exchange on which registered
Class A Common Stock, $0.0001 par value BE New York Stock Exchange
(1) Our Class B Common Stock is not registered but is convertible into shares of Class A Common Stock at the election of the holder.
________________________________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  þ    No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  þ    No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.  
Large accelerated filer þ     Accelerated filer   ¨      Non-accelerated filer   ¨      Smaller reporting company        Emerging growth company   
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes      No  þ
The number of shares of the registrant’s common stock outstanding as of November 1, 2022 was as follows:
Class A Common Stock, $0.0001 par value, 179,378,926 shares
Class B Common Stock, $0.0001 par value, 15,800,568 shares
1


Bloom Energy Corporation
Quarterly Report on Form 10-Q for the Three and Nine Months Ended September 30, 2022
Table of Contents
  Page
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (unaudited)
3
Condensed Consolidated Balance Sheets
3
Condensed Consolidated Statements of Operations
4
Condensed Consolidated Statements of Comprehensive Loss
5
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)
6
Condensed Consolidated Statements of Cash Flows
8
Notes to Unaudited Condensed Consolidated Financial Statements
9
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
Item 4 - Controls and Procedures
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
Item 1A - Risk Factors
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
Item 3 - Defaults Upon Senior Securities
Item 4 - Mine Safety Disclosures
Item 5 - Other Information
Item 6 - Exhibits
Signatures

Unless the context otherwise requires, the terms “Company”, “we,” us,” our,” and Bloom Energy,” each refer to Bloom Energy Corporation and all of its subsidiaries.


2

Part I
ITEM 1 - FINANCIAL STATEMENTS

Bloom Energy Corporation
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)

September 30, December 31,
2022 2021
Assets
Current assets:
Cash and cash equivalents1
$ 492,120  $ 396,035 
Restricted cash1
42,104  92,540 
Accounts receivable less allowance for doubtful accounts of $119 as of September 30, 2022 and December 31, 20211
71,184  87,789 
Contract assets 25,768  25,201 
Inventories 254,895  143,370 
Deferred cost of revenue 31,812  25,040 
Customer financing receivable1
—  5,784 
Prepaid expenses and other current assets1
46,489  30,661 
Total current assets 964,372  806,420 
Property, plant and equipment, net1
646,768  604,106 
Operating lease right-of-use assets 114,053  106,660 
Customer financing receivable1
—  39,484 
Restricted cash1
135,098  126,539 
Deferred cost of revenue 3,462  1,289 
Other long-term assets1
38,316  41,073 
Total assets $ 1,902,069  $ 1,725,571 
Liabilities, redeemable convertible preferred stock, redeemable noncontrolling interest and stockholders’ equity (deficit)
Current liabilities:
Accounts payable $ 120,444  $ 72,967 
Accrued warranty 13,344  11,746 
Accrued expenses and other current liabilities1
102,010  114,138 
Deferred revenue and customer deposits1
98,841  89,975 
Operating lease liabilities 12,671  13,101 
Financing obligations 16,682  14,721 
Recourse debt 12,792  8,348 
Non-recourse debt1
15,943  17,483 
Total current liabilities 392,727  342,479 
Deferred revenue and customer deposits1
68,727  90,310 
Operating lease liabilities 122,412  106,187 
Financing obligations 443,665  461,900 
Recourse debt 274,742  283,483 
Non-recourse debt1
179,955  217,416 
Other long-term liabilities 8,917  16,772 
Total liabilities 1,491,145  1,518,547 
Commitments and contingencies (Note 13)
Redeemable convertible preferred stock, Series A: 10,000,000 shares authorized and 10,000,000 shares and no shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively.
208,551  208,551 
Redeemable noncontrolling interest —  300 
Stockholders’ equity (deficit):
Common stock: $0.0001 par value; Class A shares - 600,000,000 shares authorized and 179,165,539 shares and 160,627,544 shares issued and outstanding and Class B shares - 600,000,000 shares authorized and 15,802,146 shares and 15,832,863 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively.
19  18 
Additional paid-in capital 3,691,715  3,219,081 
Accumulated other comprehensive loss (1,531) (350)
Accumulated deficit (3,517,311) (3,263,075)
Total equity (deficit) attributable to Class A and Class B common stockholders 172,892  (44,326)
Noncontrolling interest 29,481  42,499 
Total stockholders' equity (deficit) $ 202,373  $ (1,827)
Total liabilities, redeemable convertible preferred stock, redeemable noncontrolling interest and stockholders' equity (deficit) $ 1,902,069  $ 1,725,571 

1We have variable interest entities related to PPAs, which represent a portion of the consolidated balances recorded within these financial statement line items in the condensed consolidated balance sheets (see Note 11 - Portfolio Financings).


The accompanying notes are an integral part of these condensed consolidated financial statements.
3


Bloom Energy Corporation
Condensed Consolidated Statements of Operations
(in thousands, except share data)
(unaudited)

  Three Months Ended
September 30,
Nine Months Ended
September 30,
  2022 2021 2022 2021
 
Revenue:
Product $ 213,243  $ 128,550  $ 520,415  $ 413,347 
Installation 22,682  22,172  48,964  53,710 
Service 37,347  39,251  111,012  111,375 
Electricity 19,002  17,255  56,158  51,273 
Total revenue 292,274  207,228  736,549  629,705 
Cost of revenue:
Product 158,176  93,704  393,337  289,889 
Installation 28,333  25,616  57,836  66,756 
Service 41,792  39,586  124,646  111,269 
Electricity 13,029  11,439  83,819  32,913 
Total cost of revenue 241,330  170,345  659,638  500,827 
Gross profit 50,944  36,883  76,911  128,878 
Operating expenses:
Research and development 36,146  27,634  112,286  76,602 
Sales and marketing 23,275  20,124  65,084  62,803 
General and administrative 44,115  33,014  119,965  90,470 
Total operating expenses 103,536  80,772  297,335  229,875 
Loss from operations (52,592) (43,889) (220,424) (100,997)
Interest income 1,109  72  1,364  222 
Interest expense (13,099) (14,514) (41,000) (43,798)
Loss on extinguishment of debt —  —  (4,233) — 
Other income, net 4,472  2,011  254  1,948 
Gain (loss) on revaluation of embedded derivatives 54  (184) 623  (1,644)
Loss before income taxes (60,056) (56,504) (263,416) (144,269)
Income tax provision 336  158  888  595 
Net loss (60,392) (56,662) (264,304) (144,864)
Less: Net loss attributable to noncontrolling interest (3,315) (4,309) (9,768) (13,733)
Net loss attributable to Class A and Class B common stockholders $ (57,077) $ (52,353) $ (254,536) $ (131,131)
Less: Net (loss) income attributable to redeemable noncontrolling interest —  17  (300) (9)
Net loss before portion attributable to redeemable noncontrolling interest and noncontrolling interest $ (57,077) $ (52,370) $ (254,236) $ (131,122)
Net loss per share available to Class A and Class B common stockholders, basic and diluted $ (0.31) $ (0.30) $ (1.41) $ (0.76)
Weighted average shares used to compute net loss per share available to Class A and Class B common stockholders, basic and diluted 186,487  174,269  180,762  172,601 

The accompanying notes are an integral part of these condensed consolidated financial statements.
4


Bloom Energy Corporation
Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
(unaudited)

Three Months Ended
September 30,
Nine Months Ended
September 30,
  2022 2021 2022 2021
 
Net loss $ (60,392) $ (56,662) $ (264,304) $ (144,864)
Other comprehensive loss, net of taxes:
Change in derivative instruments designated and qualifying as cash flow hedges —  (763) —  (4,031)
Foreign currency translation adjustment (1,027) (299) (1,774) (523)
Other comprehensive loss, net of taxes (1,027) (1,062) (1,774) (4,554)
Comprehensive loss (61,419) (57,724) (266,078) (149,418)
Less: Comprehensive loss attributable to noncontrolling interest (3,811) (3,691) (10,361) (9,956)
Comprehensive loss attributable to Class A and Class B common stockholders $ (57,608) $ (54,033) $ (255,717) $ (139,462)
Less: Comprehensive (loss) income attributable to redeemable noncontrolling interest —  17  (300) (9)
Comprehensive loss after portion attributable to redeemable noncontrolling interest and noncontrolling interest $ (57,608) $ (54,050) $ (255,417) $ (139,453)


The accompanying notes are an integral part of these condensed consolidated financial statements.

5


Bloom Energy Corporation
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)
(in thousands, except share data) (unaudited)
Three Months Ended September 30, 2022
Class A and Class B Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total equity (deficit) attributable to Class A and Class B common stockholders Noncontrolling Interest Total Stockholders' Equity (Deficit)
Shares Amount
Balances at June 30, 2022 178,913,797  $ 18  $ 3,284,261  $ (1,000) $ (3,460,234) $ (176,955) $ 32,034  $ (144,921)
Issuance of restricted stock awards 539,074  —  —  —  —  —  —  — 
ESPP purchase 339,055  —  5,619  —  —  5,619  —  5,619 
Exercise of stock options 225,759  —  2,233  —  —  2,233  —  2,233 
Stock-based compensation —  —  23,893  —  —  23,893  —  23,893 
Distributions and payments to noncontrolling interests —  —  —  —  —  —  (1,557) (1,557)
Contributions from noncontrolling interest —  —  —  —  —  —  2,815  2,815 
Public share offering (Note 1) 14,950,000  371,526  —  —  371,527  —  371,527 
Forward to purchase Class A Common Stock (Note 5) —  —  4,183  —  —  4,183  —  4,183 
Foreign currency translation adjustment —  —  —  (531) —  (531) (496) (1,027)
Net loss1
—  —  —  —  (57,077) (57,077) (3,315) (60,392)
Balances at September 30, 2022 194,967,685  $ 19  $ 3,691,715  $ (1,531) $ (3,517,311) $ 172,892  $ 29,481  $ 202,373 
1There is no net loss attributable to redeemable noncontrolling interest.
Note: There was no redeemable noncontrolling interest as of June 30, 2022 and September 30, 2022.
Three Months Ended September 30, 2021
Class A and Class B Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total deficit attributable to Class A and Class B common stockholders Noncontrolling Interest Total Stockholders' Equity
Shares Amount
Balances at June 30, 2021 173,402,160  $ 17  $ 3,155,917  $ (124) $ (3,177,381) $ (21,571) $ 51,185  $ 29,614 
Issuance of restricted stock awards 581,363  —  —  —  —  —  —  — 
ESPP purchase 967,797  —  5,319  —  —  5,319  —  5,319 
Exercise of stock options 126,741  1,122  —  —  1,123  —  1,123 
Stock-based compensation —  —  20,743  —  —  20,743  —  20,743 
Change in effective portion of interest rate swap agreement —  —  —  —  —  —  763  763 
Distributions and payments to noncontrolling interests —  —  —  —  —  —  (540) (540)
Foreign currency translation adjustment —  —  —  (154) —  (154) (145) (299)
Net loss2
—  —  —  —  (52,370) (52,370) (4,309) (56,679)
Balances at September 30, 2021 175,078,061  $ 18  $ 3,183,101  $ (278) $ (3,229,751) $ (46,910) $ 46,954  $ 44 
2Excludes $17 attributable to redeemable noncontrolling interest.
Note: Beginning redeemable noncontrolling interest of $334 - distributions to redeemable noncontrolling interests of $20 + net income attributable to redeemable noncontrolling interest of $17 = ending redeemable noncontrolling interest of $331.
6


Nine Months Ended September 30, 2022
Class A and Class B Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total equity (deficit) attributable to Class A and Class B common stockholders Noncontrolling Interest Total Stockholders' Equity (Deficit)
Shares Amount
Balances at December 31, 2021 176,460,407  $ 18  $ 3,219,081  $ (350) $ (3,263,075) $ (44,326) $ 42,499  $ (1,827)
Issuance of restricted stock awards 2,328,713  —  —  —  —  —  —  — 
ESPP purchase 759,744  —  11,600  —  —  11,600  —  11,600 
Exercise of stock options 468,821  —  3,550  —  —  3,550  —  3,550 
Stock-based compensation expense —  —  82,275  —  —  82,275  —  82,275 
Distributions and payments to noncontrolling interests —  —  (500) —  —  (500) (5,472) (5,972)
Contributions from noncontrolling interest —  —  —  —  —  —  2,815  2,815 
Public share offering (Note 1) 14,950,000  371,526  —  —  371,527  —  371,527 
Forward to purchase Class A Common Stock (Note 5) —  —  4,183  —  —  4,183  —  4,183 
Foreign currency translation adjustment —  —  —  (1,181) —  (1,181) (593) (1,774)
Net loss3
—  —  —  —  (254,236) (254,236) (9,768) (264,004)
Balances at September 30, 2022 194,967,685  $ 19  $ 3,691,715  $ (1,531) $ (3,517,311) $ 172,892  $ 29,481  $ 202,373 
3Excludes $300 attributable to redeemable noncontrolling interest.
Note: Beginning redeemable noncontrolling interest of $300 - net loss attributable to redeemable noncontrolling interest of $300 = ending redeemable noncontrolling interest of Nil.
Nine Months Ended September 30, 2021
Class A and Class B Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total (deficit) equity attributable to Class A and Class B common stockholders Noncontrolling Interest Total Stockholders' Equity
Shares Amount
Balances at December 31, 2020 168,002,726  $ 17  $ 3,182,753  $ (9) $ (3,103,937) $ 78,824  $ 62,195  $ 141,019 
Cumulative effect upon adoption of Accounting Standards Update 2020-06 —  —  (126,799) —  5,308  (121,491) —  (121,491)
Issuance of restricted stock awards 2,533,027  —  —  —  —  —  —  — 
ESPP purchase 1,945,305  —  10,045  —  —  10,045  —  10,045 
Exercise of stock options 2,597,003  62,064  —  —  62,065  —  62,065 
Stock-based compensation expense —  —  55,038  —  —  55,038  —  55,038 
Change in effective portion of interest rate swap agreement —  —  —  —  —  —  4,031  4,031 
Distributions and payments to noncontrolling interests —  —  —  —  —  —  (5,285) (5,285)
Foreign currency translation adjustment —  —  —  (269) —  (269) (254) (523)
Net loss4
—  —  —  —  (131,122) (131,122) (13,733) (144,855)
Balances at September 30, 2021 175,078,061  $ 18  $ 3,183,101  $ (278) $ (3,229,751) $ (46,910) $ 46,954  $ 44 
4Excludes $9 attributable to redeemable noncontrolling interest.
Note: Beginning redeemable noncontrolling interest of $377 - distributions to redeemable noncontrolling interest of $37 - net loss attributable to redeemable noncontrolling interest of $9 = ending redeemable noncontrolling interest of $331.
The accompanying notes are an integral part of these condensed consolidated financial statements.
7


Bloom Energy Corporation
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
  Nine Months Ended
September 30,
  2022 2021
Cash flows from operating activities:
Net loss $ (264,304) $ (144,864)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 46,182  40,079 
Non-cash lease expense 18,153  7,161 
Gain on sale of property, plant and equipment (523) — 
Write-off of assets related to PPA IIIa 44,800  — 
Revaluation of derivative liabilities (9,640) 486 
Stock-based compensation 81,460  57,309 
Gain on remeasurement of investment —  (1,966)
Loss on extinguishment of debt 4,233  — 
Amortization of warrants and debt issuance costs 2,355  2,824 
Unrealized foreign currency exchange loss 3,086  184 
Other 3,487  — 
Changes in operating assets and liabilities:
Accounts receivable 15,758  34,236 
Contract assets (567) (24,418)
Inventories (110,797) (39,953)
Deferred cost of revenue (8,856) 7,307 
Customer financing receivable 2,510  4,022 
Prepaid expenses and other current assets (15,766) 236 
Other long-term assets (730) (374)
Operating lease right-of-use assets and operating lease liabilities 2,162  (7,593)
Finance lease liabilities 499  — 
Accounts payable 38,642  37,795 
Accrued warranty 1,597  (2,357)
Accrued expenses and other current liabilities 502  (26,178)
Deferred revenue and customer deposits (12,716) (53,181)
Other long-term liabilities (9,980) 1,289 
Net cash used in operating activities (168,453) (107,956)
Cash flows from investing activities:
Purchase of property, plant and equipment (80,907) (44,625)
Net cash acquired from step acquisition —  3,114 
Net cash used in investing activities (80,907) (41,511)
Cash flows from financing activities:
Repayment of debt of PPA IIIa (30,212) — 
Repayment of debt (17,262) (11,017)
Debt make-whole payment related to PPA IIIa debt (2,413) — 
Proceeds from financing obligations —  7,534 
Repayment of financing obligations (28,821) (10,174)
Contributions from noncontrolling interests 2,815  — 
Distributions to redeemable noncontrolling interests —  (37)
Distributions and payments to noncontrolling interests (5,972) (5,285)
Proceeds from issuance of common stock 15,150  72,109 
Proceeds from public share offering (Note 1) 385,396  — 
Public share offering costs (Note 1) (13,407) — 
Other (63) — 
Net cash provided by financing activities 305,211  53,130 
Effect of exchange rate changes on cash, cash equivalent and restricted cash (1,643) (472)
Net decrease in cash, cash equivalents and restricted cash 54,208  (96,809)
Cash, cash equivalents and restricted cash:
Beginning of period 615,114  416,710 
End of period $ 669,322  $ 319,901 
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 39,664  $ 42,598 
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases 11,759  10,332 
Operating cash flows from finance leases 788  643 
Cash paid during the period for income taxes 1,296  372 
Non-cash investing and financing activities:
Transfer of customer financing receivable to property, plant and equipment, net 42,758  — 
Increase in recourse debt, non-current upon adoption of ASU 2020-06, net —  121,491 
Forward to purchase Class A Common Stock (Note 5) 4,183  — 
Liabilities recorded for property, plant and equipment, net 13,373  6,188 
Recognition of operating lease right-of-use asset during the year-to-date period 17,623  43,660 
Recognition of finance lease right-of-use asset during the year-to-date period —  1,961 
The accompanying notes are an integral part of these condensed consolidated financial statements.
8


Bloom Energy Corporation
Notes to Unaudited Condensed Consolidated Financial Statements
The unaudited interim financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented.
The unaudited interim financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in our 2021 Annual Report on Form 10-K.
1. Nature of Business, Liquidity and Basis of Presentation
Nature of Business
For information on the nature of our business, see Part II, Item 8, Note 1 - Nature of Business, Liquidity and Basis of Presentation, Nature of Business section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
We have not experienced any supply chain disruptions as a result of the invasion by the Russian Federation in Ukraine on February 24, 2022.
Liquidity
We have generally incurred operating losses and negative cash flows from operations since our inception. With the series of new debt offerings, debt extensions and conversions to equity that we completed during 2020 and 2021, we had $287.5 million of total outstanding recourse debt as of September 30, 2022, $274.7 million of which is classified as long-term debt. Our recourse debt scheduled repayments commenced in June 2022.
On August 10, 2022, pursuant to the Securities Purchase Agreement (“the SPA”) SK ecoplant notified us of its intent to exercise its option to purchase additional shares of our Class A common stock, pursuant to a Second Tranche Exercise Notice (as defined in the SPA) electing to purchase 13,491,701 shares (the “Second Tranche Shares”) at a purchase price of $23.05 per share, calculated as a 15% premium to the volume-weighted average closing price of the 20 consecutive trading day period immediately preceding the exercise of the option (see Note 5 - Fair Value). The aggregate purchase price approximates cash proceeds to be received by us of $311.0 million, net of related incremental direct costs of $0.1 million. The payment for the Second Tranche Shares will be due the later of (i) December 6, 2022 and (ii) upon clearance under the Hart Scott Rodino (“HSR”) Act of the sale of the Second Tranche Shares as contemplated by the Second Tranche Exercise Notice.

On August 19, 2022, we completed an underwritten public offering (“the Offering”), pursuant to which we issued and sold 13,000,000 shares of Class A Common Stock at price of $26.00 per share. As a part of the Offering, the underwriters were provided a 30-day option to purchase an additional 1,950,000 shares of our Class A Common Stock at the same price, less underwriting discounts and commissions (“the Greenshoe”), which was exercised contemporaneously with the Offering. The aggregate net proceeds received by us from the Offering were $371.5 million after deducting underwriting discounts and commissions of $16.5 million and incremental costs directly attributable to the Offering of $0.7 million.
Our future capital requirements will depend on many factors, including our rate of revenue growth, the timing and extent of spending on research and development efforts and other business initiatives, the rate of growth in the volume of system builds and the need for additional manufacturing space, the expansion of sales and marketing activities both in domestic and international markets, market acceptance of our product, our ability to secure financing for customer use of our Energy Servers, the timing of installations, and overall economic conditions including the impact of COVID-19 and inflationary pressure in the US on our ongoing and future operations. The rising interest rate environment in the US has and will continue to adversely impact the cost of new capital deployment.
In the opinion of management, the combination of our existing cash and cash equivalents and operating cash flows is expected to be sufficient to meet our operational and capital cash flow requirements and other cash flow needs for the next 12 months from the date of issuance of this Quarterly Report on Form 10-Q.

9


Inflation Reduction Act
On August 7, 2022, the United States Senate passed the Inflation Reduction Act of 2022 (“the IRA”) under fiscal year 2022 budget reconciliation instructions. On August 16, 2022, the IRA was signed into law. This new bill is the U.S. federal government’s largest-ever investment to fight climate change. The IRA includes numerous investments in climate protection, including investments in clean energy production and tax credits aimed at reducing carbon emissions by roughly 40% by 2030. By implementing the IRA, the government aims to make an impact on energy markets so that cleaner options are more affordable to consumers.
The IRA contains several credits and incentive provisions that may be relevant to us:

Credit Credit summary
Section 45 – Production Tax credit (“PTC”) Provides a 10-year tax credit for a variety of renewable energy technologies to incentivize electricity generation to be sold to a third party.
Section 48 – Investment Tax Credit (“ITC”) Provides a tax credit based on capital investment in a variety of renewable and conventional energy technologies to incentivize investment in new energy resources and more efficient use of fuel.
Section 45X – Advanced Manufacturing Production Provides a PTC for the production of certain eligible components sold to an unrelated person (exceptions apply). The credit amount varies based on the eligible component, which includes solar components, wind energy components, inverters, qualifying battery components, and critical minerals.
Section 48C – Qualified Advanced Energy Project (reenacted) Provides an ITC through a competitive application process administered through the Department of Energy equal to 6% or 30% of the investment with respect to advanced energy projects.
Section 45Y – Clean Electricity Production Credit Provides a 10-year technology-neutral PTC, equal to the kWh of electricity produced by the taxpayer times an applicable amount (based of $0.003/kWh up to $0.015/kWh) for the production of clean electricity produced at a qualifying facility for which the GHG emission rate is not greater than zero and electricity is sold, consumed or stored.
Section 48E – Clean Electricity Investment Tax Credit Provides a technology-neutral ITC of between 6% (or 2%) to 30% (or 10%) for qualified capital investments in an electric generating facility or energy storage for which GHG rate is not greater than zero.
Section 45V – Clean Hydrogen Provides a PTC of up to $3 per kg of clean hydrogen over a 10-year credit period for the production of clean hydrogen at a qualified facility in the US.
Section 45Q – Carbon Capture Sequestration Provides a credit ranging from $12-$17 or $60-$85 per metric ton based on the amount of carbon oxides captured from a qualified facility over a 12-year period.
We are currently assessing the impact of these provisions on our business beyond the third quarter of 2022.

Some of our existing contracts contemplated price adjustments due to changes to ITC rate at the inception of the contracts. As a result, we recognized $8.7 million product revenue and $1.3 million installation revenue for the three months ended September 30, 2022, due to a change in variable considerations for energy servers placed in service during the eligible periods from such existing contracts.
Basis of Presentation
We have prepared the condensed consolidated financial statements included herein pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), and as permitted by those rules, including all disclosures required by generally accepted accounting principles as applied in the United States (“U.S. GAAP”). Certain prior period amounts have been reclassified to conform to the current period presentation.
Principles of Consolidation
For information on principles of consolidation, see Part II, Item 8, Note 1 - Nature of Business, Liquidity and Basis of Presentation, Principles of Consolidation section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
10


Use of Estimates
For information on the use of accounting estimates, see Part II, Item 8, Note 1 - Nature of Business, Liquidity and Basis of Presentation, Use of Estimates section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Concentration of Risk
Geographic Risk - The majority of our revenue and long-lived assets are attributable to operations in the United States for all periods presented. In addition to shipments in the US, we also ship our Energy Servers to other countries, primarily to the Republic of Korea, Japan, and India (collectively, the “Asia Pacific region”). In the three and nine months ended September 30, 2022, total revenue in the Asia Pacific region was 58% and 61%, respectively, of our total revenue. In the three and nine months ended September 30, 2021, total revenue in the Asia Pacific region was 36% and 38%, respectively, of our total revenue.
Credit Risk - At September 30, 2022 and December 31, 2021, one customer accounted for approximately 23% and 60% of accounts receivable, respectively. To date, we have not experienced any credit losses.
Customer Risk - During the three months ended September 30, 2022, two customers represented approximately 54% and 26% of our total revenue, respectively. During the nine months ended September 30, 2022, two customers represented approximately 48% and 16% of our total revenue, respectively.
During the three months ended September 30, 2021, one customer represented 35% of our total revenue. During the nine months ended September 30, 2021, revenue from two customers represented 37% and 12% of our total revenue, respectively.
2. Summary of Significant Accounting Policies
Please refer to the accounting policies described in Part II, Item 8, Note 2 - Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Recent Accounting Pronouncements
There have been no significant changes in our reported financial position or results of operations and cash flows resulting from the adoption of new accounting pronouncements.
Accounting Guidance Not Yet Adopted
Contract Assets and Contract Liabilities Acquired in a Business Combination - In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. This approach differs from the current requirement to measure contract assets and contract liabilities acquired in a business combination at fair value. ASU 2021-08 will be effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is permitted. The adoption impact of ASU 2021-08 will depend on the magnitude of any future acquisitions. The standard will not impact acquired contract assets or liabilities from business combinations occurring prior to the adoption date.


11


3. Revenue Recognition
Contract Balances
The following table provides information about accounts receivables, contract assets, customer deposits and deferred revenue from contracts with customers (in thousands):

September 30, December 31,
  2022 2021
Accounts receivable $ 71,184  $ 87,788 
Contract assets 25,768  25,201 
Customer deposits 64,412  64,809 
Deferred revenue 103,156  115,476 
Contract assets and contract liabilities are reported in a net position on an individual contract basis at the end of each reporting period. Contract assets are classified as current in the condensed consolidated balance sheet when the Company expects to complete the related performance obligations and invoice the customers within one year of the balance sheet date, and as long-term when the Company expects to complete the related performance obligations and invoice the customers more than one year out from the balance sheet date. Contract liabilities are classified as current in the condensed consolidated balance sheet when the revenue recognition associated with the related customer payments and invoicing is expected to occur within one year of the balance sheet date and as long-term when the revenue recognition associated with the related customer payments and invoicing is expected to occur in more than one year from the balance sheet date.
Contract Assets
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022 2021 2022 2021
 
Beginning balance $ 33,374  $ 18,638  $ 25,201  $ 3,327 
Transferred to accounts receivable from contract assets recognized at the beginning of the period (21,677) (11,758) (21,304) — 
Revenue recognized and not billed as of the end of the period 14,071  20,865  21,871  24,418 
Ending balance $ 25,768  $ 27,745  $ 25,768  $ 27,745 
Deferred Revenue
Deferred revenue activity, including deferred incentive revenue activity, during the three and nine months ended September 30, 2022 and 2021 consisted of the following (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022 2021 2022 2021
 
Beginning balance $ 96,377  $ 116,255  $ 115,476  $ 135,578 
Additions 248,574  175,423  597,318  541,519 
Revenue recognized (241,795) (179,808) (609,638) (565,227)
Ending balance $ 103,156  $ 111,870  $ 103,156  $ 111,870 

12


Disaggregated Revenue
We disaggregate revenue from contracts with customers into four revenue categories: product, installation, services and electricity (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022 2021 2022 2021
Revenue from contracts with customers:  
Product revenue   $ 213,243  $ 128,550  $ 520,415  $ 413,347 
Installation revenue   22,682  22,172  48,964  53,710 
Services revenue   37,347  39,251  111,012  111,375 
Electricity revenue   2,875  804  8,352  2,107 
Total revenue from contract with customers 276,147  190,777  688,743  580,539 
Revenue from contracts that contain lease:
Electricity revenue 16,127  16,451  47,806  49,166 
Total revenue $ 292,274  $ 207,228  $ 736,549  $ 629,705 
13


4. Financial Instruments
Cash, Cash Equivalents and Restricted Cash
The carrying values of cash, cash equivalents and restricted cash approximate fair values and were as follows (in thousands):
September 30, December 31,
  2022 2021
As Held:
Cash $ 215,926  $ 318,080 
Money market funds 453,396  297,034 
$ 669,322  $ 615,114 
As Reported:
Cash and cash equivalents $ 492,120  $ 396,035 
Restricted cash 177,202  219,079 
$ 669,322  $ 615,114 

Restricted cash consisted of the following (in thousands):
September 30, December 31,
  2022 2021
Current:    
Restricted cash $ 41,124  $ 89,462 
Restricted cash related to PPA Entities1
980  3,078 
$ 42,104  $ 92,540 
Non-current:
Restricted cash $ 117,590  $ 103,300 
Restricted cash related to PPA Entities1
17,508  23,239 
135,098  126,539 
$ 177,202  $ 219,079 
1 We have VIEs related to PPAs that represent a portion of the consolidated balances recorded within the “restricted cash” and other financial statement line items in the condensed consolidated balance sheets (see Note 11 - Portfolio Financings). In addition, the restricted cash held in the PPA II and PPA IIIb entities as of September 30, 2022, includes $33.3 million and $1.1 million of current restricted cash, respectively, and $35.7 million and $6.7 million of non-current restricted cash, respectively. The restricted cash held in the PPA II and PPA IIIb entities as of December 31, 2021, includes $41.7 million and $1.2 million of current restricted cash, respectively, and $57.7 million and $6.7 million of non-current restricted cash, respectively. These entities are not considered VIEs.
Factoring Arrangements
We sell certain customer trade receivables on a non-recourse basis under factoring arrangements with our designated financial institution. These transactions are accounted for as sales and cash proceeds are included in cash used in operating activities. We derecognized $146.3 million and $116.3 million of accounts receivable as of September 30, 2022 and December 31, 2021, respectively, under these factoring arrangements. The costs of factoring such accounts receivable on our condensed consolidated statements of operations for the three and nine months ended September 30, 2022, were $2.5 million and $3.7 million, respectively. The costs of factoring for the three and nine months ended September 30, 2021, were not material. The cost of factoring is recorded in general and administrative expenses.
14


5. Fair Value
Our accounting policy for the fair value measurement of cash equivalents and embedded Escalation Protection Plan (“EPP”) derivatives is described in Part II, Item 8 Note 2 - Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
The tables below set forth, by level, our financial assets that are accounted for at fair value for the respective periods. The table does not include assets and liabilities that are measured at historical cost or any basis other than fair value (in thousands):
Fair Value Measured at Reporting Date Using
September 30, 2022 Level 1 Level 2 Level 3 Total
Assets
Cash equivalents:
Money market funds $ 453,396  $ —  $ —  $ 453,396 
$ 453,396  $ —  $ —  $ 453,396 
Liabilities
Derivatives:
Embedded EPP derivatives —  —  5,838  5,838 
$ —  $ —  $ 5,838  $ 5,838 

  Fair Value Measured at Reporting Date Using
December 31, 2021 Level 1 Level 2 Level 3 Total
Assets
Cash equivalents:
Money market funds $ 297,034  $ —  $ —  $ 297,034 
$ 297,034  $ —  $ —  $ 297,034 
Liabilities
Derivatives:
Option to acquire a variable number of shares of Class A Common Stock $ —  $ 13,200  $ —  $ 13,200 
Embedded EPP derivatives —  —  6,461  6,461 
$ —  $ 13,200  $ 6,461  $ 19,661 
SK ecoplant Notice to Exercise the Option to Acquire a Variable Number of Shares of Class A Common Stock
On August 10, 2022, pursuant to the SPA, SK ecoplant notified us of its intent to exercise its option to purchase additional shares of our Class A common stock, pursuant to a Second Tranche Exercise Notice (as defined in the SPA) electing to purchase 13,491,701 shares at a purchase price of $23.05 per share. Upon receipt of SK’s notice the purchase price and the number of shares of Class A Common Stock that SK will purchase under the Option are fixed. The payment for the Second Tranche Shares will be due the later of (i) December 6, 2022 and (ii) upon clearance under the HSR Act of the sale of the Second Tranche Shares as contemplated by the Second Tranche Exercise Notice.
The Option was fair valued as of the notice date at $4.2 million. Upon the receipt of the notice from SK ecoplant the Option met the criteria of equity award and was classified as a forward contract as part of additional paid-in capital. The fair value of the Option was reflected in accrued expenses and other current liabilities in our condensed consolidated balance sheet as of December 31, 2021.
15


Embedded EPP Derivative Liability
For the three months ended September 30, 2022 and 2021, we recorded the fair value of the embedded EPP derivatives and recognized an unrealized gain of $0.1 million and an unrealized loss of $0.2 million, respectively, in gain (loss) on revaluation of embedded derivatives on our condensed consolidated statements of operations.
For the nine months ended September 30, 2022 and 2021, we recorded the fair value of the embedded EPP derivatives and recognized an unrealized gain of $0.6 million and an unrealized loss of $1.6 million, respectively, in gain (loss) on revaluation of embedded derivatives on our condensed consolidated statements of operations.
The changes in the Level 3 financial liabilities during the nine months ended September 30, 2022, were as follows (in thousands):
Embedded EPP Derivative Liability
Liabilities at December 31, 2021
$ 6,461 
Changes in fair value (623)
Liabilities at September 30, 2022
$ 5,838 
Financial Assets and Liabilities and Other Items Not Measured at Fair Value on a Recurring Basis
Customer Receivables and Debt Instruments - The fair value for customer financing receivables is based on a discounted cash flow model, whereby the fair value approximates the present value of the receivables (Level 3). The senior secured notes, term loans and convertible notes are based on rates currently offered for instruments with similar maturities and terms (Level 3). The following table presents the estimated fair values and carrying values of customer receivables and debt instruments (in thousands):
  September 30, 2022 December 31, 2021
  Net Carrying
Value
Fair Value Net Carrying
Value
Fair Value
     
 Customer receivables
Customer financing receivable $ —  $ —  $ 45,269  $ 38,334 
Debt instruments
Recourse:
10.25% Senior Secured Notes due March 2027
63,194  59,939  68,968  72,573 
2.5% Green Convertible Senior Notes due August 2025
224,340  319,822  222,863  356,822 
Non-recourse:
7.5% Term Loan due September 2028 (Note 7)
—  —  29,006  35,669 
6.07% Senior Secured Notes due March 2030
68,899  70,085  73,262  83,251 
3.04% Senior Secured Notes due June 2031
125,999  115,294  132,631  137,983 

16


6. Balance Sheet Components
Inventories
The components of inventory consist of the following (in thousands):
September 30, December 31,
  2022 2021
Raw materials $ 156,163  $ 80,809 
Finished goods 61,376  30,668 
Work-in-progress 37,356  31,893 
$ 254,895  $ 143,370 
The inventory reserves were $17.6 million and $13.9 million as of September 30, 2022 and December 31, 2021, respectively.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following (in thousands):
September 30, December 31,
  2022 2021
     
Receivables from employees $ 7,949  $ 5,463 
Prepaid hardware and software maintenance 5,079  3,494 
Prepaid managed services 4,291  2,480 
Tax receivables 3,259  1,518 
Prepaid workers compensation 3,114  5,330 
Deposits made 1,425  817 
Prepaid deferred commissions 794  724 
State incentive receivable 214  427 
Other prepaid expenses and other current assets 20,364  10,408 
$ 46,489  $ 30,661 
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Property, Plant and Equipment, Net
Property, plant and equipment, net consists of the following (in thousands):
September 30, December 31,
  2022 2021
     
Energy Servers $ 669,606  $ 674,799 
Machinery and equipment 132,965  110,600 
Construction-in-progress 91,301  43,544 
Leasehold improvements 68,369  52,936 
Building 49,240  48,934 
Computers, software and hardware 24,100  21,276 
Furniture and fixtures 9,123  8,607 
1,044,704  960,696 
Less: accumulated depreciation (397,936) (356,590)
$ 646,768  $ 604,106 
Depreciation expense related to property, plant and equipment for the three and nine months ended September 30, 2022 was $15.5 million and $46.2 million, respectively. Depreciation expense related to property, plant and equipment for the three and nine months ended September 30, 2021 was $13.3 million and $40.1 million, respectively.
Property, plant and equipment under operating leases by the PPA Entities was $362.0 million and $368.0 million and accumulated depreciation for these assets was $153.8 million and $139.4 million as of September 30, 2022 and December 31, 2021, respectively. Depreciation expense for these assets was $5.8 million and $17.3 million for the three and nine months ended September 30, 2022, respectively. Depreciation expense for these assets was $5.9 million and $17.6 million for the three and nine months ended September 30, 2021, respectively.
PPA IIIa Upgrade
In June 2022, we started a project to replace 9.8 megawatts of second-generation Energy Servers (the “old Energy Servers”) at PPA IIIa Investment Company and Operating Company (“PPA IIIa”) with current generation Energy Servers (the “new Energy Servers”) (the “PPA IIIa Upgrade”, the “PPA IIIa Repowering”). The replacement was ongoing as of September 30, 2022. See Note 11 - Portfolio Financing for additional information.
Change in Estimate
In June 2022, due to the replacement of old Energy Servers as part of the PPA IIIa Repowering, we revised the expected useful life of the old Energy Servers. As a result, the expected useful life of old Energy Servers decreased from 15 years to approximately 0.5 years. We recognized accelerated depreciation of $0.2 million in electricity cost of revenue on the revised carrying amount of the old Energy Servers after impairment loss in our condensed consolidated statements of operations. There is no effect from this change in accounting estimate on future periods.
18


Other Long-Term Assets
Other long-term assets consist of the following (in thousands):
September 30, December 31,
2022 2021
     
Long-term lease receivable $ 8,131  $ 7,953 
Prepaid insurance 7,969  9,534 
Deferred commissions 7,229  7,569 
Deposits made 2,694  1,923 
Prepaid managed services 2,533  3,010 
Deferred tax asset 885  954 
Investments in subsidiaries —  1,819 
Prepaid and other long-term assets 8,875  8,311 
$ 38,316  $ 41,073 
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following (in thousands):
September 30, December 31,
  2022 2021
     
Compensation and benefits $ 30,002  $ 38,222 
Sales-related liabilities 10,374  6,040 
Delaware grant 9,495  — 
Accrued installation 6,032  13,968 
Accrued legal expenses 5,513  1,765 
Current portion of derivative liabilities 3,053  6,059 
Accrued consulting expenses 1,423  1,731 
Sales tax liabilities 1,359  1,491 
Interest payable 719  2,159 
Option to acquire a variable number of shares of Class A Common Stock (Note 5) —  13,200 
Other 34,040  29,503 
$ 102,010  $ 114,138 

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7. Outstanding Loans and Security Agreements
The following is a summary of our debt as of September 30, 2022 (in thousands, except percentage data):
  Unpaid
Principal
Balance
Net Carrying Value Interest
Rate
Maturity Dates Entity Recourse
  Current Long-
Term
Total
10.25% Senior Secured Notes due March 2027
$ 63,966  $ 12,792  $ 50,402  $ 63,194  10.25% March 2027 Company Yes
2.5% Green Convertible Senior Notes due August 2025
230,000    224,340  224,340  2.5% August 2025 Company Yes
Total recourse debt 293,966  12,792  274,742  287,534 
3.04% Senior Secured Notes due June 30, 2031
127,736  10,332  115,667  125,999  3.04% June 2031 PPA V No
6.07% Senior Secured Notes due March 2030
70,492  5,611  64,288  69,899  6.07% March 2030 PPA IV No
Total non-recourse debt 198,228  15,943  179,955  195,898 
Total debt $ 492,194  $ 28,735  $ 454,697  $ 483,432 

The following is a summary of our debt as of December 31, 2021 (in thousands, except percentage data):
  Unpaid
Principal
Balance
Net Carrying Value Interest
Rate
Maturity Dates Entity Recourse
  Current Long-
Term
Total
10.25% Senior Secured Notes due March 2027
$ 70,000  $ 8,348  $ 60,620  $ 68,968  10.25% March 2027 Company Yes
2.5% Green Convertible Senior Notes due August 2025
230,000  —  222,863  222,863  2.5% August 2025 Company Yes
Total recourse debt 300,000  8,348  283,483  291,831 
3.04% Senior Secured Notes due June 30, 2031
134,644  9,376  123,255  132,631  3.04% June 2031 PPA V No
7.5% Term Loan due September 2028
31,070  3,436  25,570  29,006  7.5% September 
2028
PPA IIIa No
6.07% Senior Secured Notes due March 2030
73,955  4,671  68,591  73,262  6.07% March 2030 PPA IV No
Total non-recourse debt 239,669  17,483  217,416  234,899 
Total debt $ 539,669  $ 25,831  $ 500,899  $ 526,730 

We and all of our subsidiaries were in compliance with all financial covenants as of September 30, 2022 and December 31, 2021.
Recourse Debt Facilities
Please refer to Part II, Item 8, Note 7 - Outstanding Loans and Security Agreements in our Annual Form 10-K for the fiscal year ended December 31, 2021, for discussion of our 10.25% Senior Secured Notes due March 2027 and 2.5% Green Convertible Senior Notes due August 2025.
Interest expense on the Green Notes for the three and nine months ended September 30, 2022, was $1.9 million and $5.8 million, respectively, including amortization of issuance costs of $0.5 million and $1.5 million, respectively. Interest expense on the Green Notes for the three and nine months ended September 30, 2021, was $1.9 million and $5.8 million, respectively, including amortization of issuance costs of $0.5 million and $1.5 million, respectively.
20


Non-recourse Debt Facilities
Please refer to Part II, Item 8, Note 7 - Outstanding Loans and Security Agreements in our Annual Form 10-K for the fiscal year ended December 31, 2021 for discussion of our non-recourse debt.
Both note purchase and credit agreements require us to maintain a debt service reserve, the balances of which are presented below (in millions):
September 30, December 31,
2022 2021
     
3.04% Senior Secured Notes due June 30, 2031
$ 8.0  $ 8.0 
7.5% Term Loan due September 2028
—  3.6 
6.07% Senior Secured Notes due March 2030
9.5  9.1 
These debt service balances are included as part of long-term restricted cash in the condensed consolidated balance sheets. Both notes and the loan are secured by assets of respective PPAs.
7.5% Term Loan due September 2028 - On June 14, 2022, as part of the PPA IIIa Upgrade, we paid off the outstanding balance and related accrued interest of $30.2 million and $0.4 million, respectively, and recognized a loss on extinguishment of debt of $4.2 million. The debt service reserve of $3.6 million was reclassified from restricted cash to cash and cash equivalents at the time of extinguishment of debt.
Repayment Schedule and Interest Expense
The following table presents details of our outstanding loan principal repayment schedule as of September 30, 2022 (in thousands):
Remainder of 2022 $ 6,755 
2023 28,503 
2024 31,872 
2025 265,494 
2026 39,078 
Thereafter 120,492 
$ 492,194 
Interest expense of $13.1 million and $14.5 million for the three months ended September 30, 2022 and 2021, respectively, was recorded in interest expense on the condensed consolidated statements of operations. Interest expense of $41.0 million and $43.8 million for the nine months ended September 30, 2022 and 2021, respectively, was recorded in interest expense on the condensed consolidated statements of operations.
21


8. Derivative Financial Instruments
Cash Flow Hedges
As of December 31, 2021, we had settled our interest rate swaps, which had been designated as cash flow hedges. There were no cash flow hedges as of September 30, 2022. The changes in fair value of the interest rate swaps designated as cash flow hedges and the amounts recognized in accumulated other comprehensive loss and in earnings were as follows during the three and nine months ended September 30, 2022 and 2021 (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022 2021 2022 2021
Beginning balance $ —  $ 12,651  $ —  $ 15,989 
Loss (gain) recognized in other comprehensive loss —  (264) —  (2,548)
Amounts reclassified from other comprehensive loss to earnings —  (499) —  (1,483)
Net loss (gain) recognized in other comprehensive loss —  (763) —  (4,031)
Gain recognized in earnings —  (35) —  (105)
Ending balance $ —  $ 11,853  $ —  $ 11,853 
Embedded EPP Derivatives in Sales Contracts
For information on embedded EPP Derivatives in sales contracts, see Part II, Item 8, Note 8 - Derivative Financial Instruments in our Annual Report on form 10-K for the fiscal year ended December 31, 2021.

9. Leases
Facilities, Energy Servers, and Vehicles
For the three and nine months ended September 30, 2022, rent expense for all occupied facilities was $5.0 million and $14.2 million, respectively. For the three and nine months ended September 30, 2021, rent expense for all occupied facilities was $4.4 million and $11.4 million, respectively.
22


Operating and finance lease right-of-use assets and lease liabilities for facilities, Energy Servers, and vehicles as of September 30, 2022 and December 31, 2021 were as follows (in thousands):
September 30, December 31,
2022 2021
Operating Leases:
Operating lease right-of-use assets, net 1, 2
$ 114,053  $ 106,660 
Current operating lease liabilities (12,671) (13,101)
Non-current operating lease liabilities (122,412) (106,187)
Total operating lease liabilities $ (135,083) $ (119,288)
Finance Leases:
Finance lease right-of-use assets, net 2, 3, 4
$ 2,692 $ 2,944
Current finance lease liabilities
(988) (863)
Non-current finance lease liabilities (1,899) (2,157)
Total finance lease liabilities $ (2,887) $ (3,020)
Total lease liabilities $ (137,970) $ (122,308)
1 These assets primarily include leases for facilities, Energy Servers, and vehicles.
2 Net of accumulated amortization.
3 These assets primarily include leases for vehicles.
4 Included in property, plant and equipment, net in the condensed consolidated balance sheet.
The components of our facilities, Energy Servers, and vehicles' lease costs for the three and nine months ended September 30, 2022 and 2021 were as follows (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022 2021 2022 2021
Operating lease costs $ 6,097  $ 3,925  $ 17,962  $ 10,620 
Finance lease costs:
Amortization of finance lease right-of-use assets 230  214  750  1,096 
Interest expense for finance lease liabilities 53  51  160  296 
Total finance lease costs 283  265  910  1,392 
Short-term lease costs 538  625  699  951 
Total lease costs $ 6,918  $ 4,815  $ 19,571  $ 12,963 


23


Weighted average remaining lease terms and discount rates for our facilities, Energy Servers and vehicles as of September 30, 2022 and December 31, 2021 were as follows:
September 30, December 31,
2022 2021
Weighted average remaining lease term:
Operating leases 9.1 years 8.9 years
Finance leases 3.1 years 3.5 years
Weighted average discount rate:
Operating leases 10.0  % 9.6  %
Finance leases 7.6  % 7.6  %

Future lease payments under lease agreements for our facilities, Energy Servers and vehicles as of September 30, 2022 were as follows (in thousands):
Operating Leases Finance Leases
Remainder of 2022 $ 6,365  $ 281 
2023 24,688  1,121 
2024 23,028  948 
2025 23,504  461 
2026 23,332  222