TESLA HAS 3 BUSINESSES FOR FY14, FY15 AND FY16 - AUTOMOTIVE, ENERGY GE

INCOME STATEMEN
Income Statement
(in thousands) 2014 2015 2016
Revenue from Automotive 3,007,012 3,740,973 6,350,766
Revenue from Energy generation and storage
Act
4,208
Act
14,477
Act
181,394
Revenue from Services and other 187,136 290,575 467,972
Total revenues 3,198,356 4,046,025 7,000,132

- Cost of revenues from Automotive 2,145,749 2,823,302 4,750,081

- Cost of revenues from Energy generation and storage 4,005 12,287 178,332
- Cost of revenues from Services and other 166,931 286,933 472,462
- Total cost of revenues 2,316,685 3,122,522 5,400,875

Gross profit 881,671 923,503 1,599,257

- Research and development 464,700 717,900 834,408

- Selling, general and administrative 603,660 922,232 1,432,189
EBIT (Loss) -186,689 -716,629 -667,340

Interest income 1,126 1,508 8,530

- Interest expense 100,886 118,851 198,810
Other income (expense), net 1,813 -41,652 111,272
EBT (Loss) -284,636 -875,624 -746,348

- Provision for income taxes -9,404 13,039 26,698

Net loss incl. minority interests -275,232 -888,663 -773,046

Minority interests 0 0 98,132

Net loss -275,232 -888,663 -674,914

Vertical Analysis (As a % of Total Revenue)

(in thousands) 2014 2015 2016
Revenue from Automotive 94.0%
Act 92.5%
Act 90.7%
Act
Revenue from Energy generation and storage 0.1% 0.4% 2.6%
Revenue from Services and other 5.9% 7.2% 6.7%
Total revenues 100% 100% 100%

- Cost of revenues from Automotive 67.1% 69.8% 67.9%

- Cost of revenues from Energy generation and storage 0.1% 0.3% 2.5%
- Cost of revenues from Services and other 5.2% 7.1% 6.7%
- Total cost of revenues 72.4% 77.2% 77.2%

Gross profit 27.6% 22.8% 22.8%

- Research and development 14.5% 17.7% 11.9%

- Selling, general and administrative 18.9% 22.8% 20.5%
EBIT (Loss) -5.8% -17.7% -9.5%
 Interest income 0.0% 0.0% 0.1%
- Interest expense 3.2% 2.9% 2.8%
Other income (expense), net 0.1% -1.0% 1.6%
EBT (Loss) -8.9% -21.6% -10.7%

- Provision for income taxes -0.3% 0.3% 0.4%

Net loss incl. minority interests -8.6% -22.0% -11.0%

Minority interests 0.0% 0.0% 1.4%

Net loss -8.6% -22.0% -9.6%
TOMOTIVE, ENERGY GENERATION & STORAGE AND SERVICES & OTHER

STATEMENT ANALYSIS

Err:504

Horizontal Analysis (Year-over-Year change)

(in thousands) 2014 2015 2016
Revenue from Automotive n.a.
Act 24%
Act 70%
Act
Revenue from Energy generation and storage n.a. 244% 1153%
Revenue from Services and other n.a. 55% 61%
Total revenues n.a. 27% 73%
n.a.
- Cost of revenues from Automotive n.a. 32% 68%
`
- Cost of revenues from Energy generation and storage n.a. 207% 1351%
- Cost of revenues from Services and other n.a. 72% 65%
- Total cost of revenues n.a. 35% 73%

Gross profit n.a. 5% 73%

- Research and development n.a. 54% 16%

- Selling, general and administrative n.a. 53% 55%
EBIT (Loss) n.a. 284% -7%
 Interest income n.a. 34% 466%
- Interest expense n.a. 18% 67%
Other income (expense), net n.a. -2397% 167%
EBT (Loss) n.a. 208% -15%

- Provision for income taxes n.a. -239% 105%

Net loss incl. minority interests n.a. 223% -13%

Minority interests n.a. n.a. n.a.

Net loss n.a. 223% -24%
`
 BALANCE SHEET ANALYSIS
Balance Sheet
(in thousands) 31 Dec 31 Dec 31 Dec
Cash and cash equivalents 1,905,713 1,196,908 3,393,216
Restricted cash and marketable securities
2014
17,947
2015
22,628
2016
105,519
Accounts receivable, net 226,604 168,965 499,142
Inventory 953,675 1,277,838 2,067,454
Prepaid expenses and other current assets 76,134 115,667 194,465
Total current assets 3,180,073 2,782,006 6,259,796

Operating lease vehicles, net 766,744 1,791,403 3,134,080

Solar energy systems, leased and to be leased, net - - 5,919,880
Property, plant and equipment, net 1,829,267 3,403,334 5,982,957
Intangible assets, net - 12,816 376,145
portion - - 506,302
Restricted cash, net of current portion 11,374 31,522 268,165
Other assets 43,209 46,858 216,751
Total assets 5,830,667 8,067,939 22,664,076

Vertical Analysis
(in thousands) 31 Dec 31 Dec 31 Dec
Cash and cash equivalents 32.7%
2014 14.8%
2015 15.0%
2016
Restricted cash and marketable securities 0.3% 0.3% 0.5%
Accounts receivable, net 3.9% 2.1% 2.2%
Inventory 16.4% 15.8% 9.1%
Prepaid expenses and other current assets 1.3% 1.4% 0.9%
Total current assets 54.5% 34.5% 27.6%

Operating lease vehicles, net 13.2% 22.2% 13.8%

Solar energy systems, leased and to be leased, net 26.1%
Property, plant and equipment, net 31.4% 42.2% 26.4%
Intangible assets, net 0.2% 1.7%
portion 2.2%
Restricted cash, net of current portion 0.2% 0.4% 1.2%
Other assets 0.7% 0.6% 1.0%
Total assets 100% 100% 100%

Horizonal Analysis
(in thousands) 31 Dec 31 Dec 31 Dec
Cash and cash equivalents n.a.
2014 -37.2%
2015 183.5%
2016
Restricted cash and marketable securities n.a. 26.1% 366.3%
Accounts receivable, net n.a. -25.4% 195.4%
Inventory n.a. 34.0% 61.8%
Prepaid expenses and other current assets n.a. 51.9% 68.1%
Total current assets n.a. -12.5% 125.0%

Operating lease vehicles, net n.a. 133.6% 75.0%

Solar energy systems, leased and to be leased, net n.a.
Property, plant and equipment, net n.a. 86.0% 75.8%
Intangible assets, net 2835.0%
portion n.a.
Restricted cash, net of current portion n.a. 177.1% 750.7%
Other assets n.a. 8.4% 362.6%
Total assets n.a. 38.4% 180.9%
CE SHEET ANALYSIS
alance Sheet
(in thousands) 31 Dec 31 Dec 31 Dec
Accounts payable 777,946 916,148 1,860,341
Accrued liabilities
2014
268,883
2015
422,798
2016
1,210,028
Deferred revenue 191,651 423,961 763,126
Resale value guarantees - 136,831 179,504
Customer deposits 257,587 283,370 663,859
Current portion of long-term debt and capital leases 611,099 627,927 984,211
Current portion of solar bonds issued to related parties - - 165,936
Total current liabilities 2,107,166 2,811,035 5,827,005

Long-term debt and capital leases, net of current portion 1,818,785 2,021,093 5,860,049
Solar bonds issued to related parties, net of current portion - - 99,164
Convertible senior notes issued to related parties - - 10,287
Deferred revenue, net of current portion 292,271 446,105 851,790
Resale value guarantees, net of current portion 487,879 1,293,741 2,210,423
Other long-term liabilities 154,660 364,976 1,891,449
Misc. stocks 58,196 47,285 375,823
Total liabilities 4,918,957 6,984,235 17,125,990

Total stockholders' equity 911,710 1,083,704 4,752,911

Noncontrolling interests in subsidiaries - - 785,175

Total liabilities and equity 5,830,667 8,067,939 22,664,076

rtical Analysis
(in thousands) 31 Dec 31 Dec 31 Dec
Accounts payable 13.3%
2014 11.4%
2015 8.2%
2016
Accrued liabilities 4.6% 5.2% 5.3%
Deferred revenue 3.3% 5.3% 3.4%
Resale value guarantees 1.7% 0.8%
 Customer deposits 4.4% 3.5% 2.9%
Current portion of long-term debt and capital leases 10.5% 7.8% 4.3%
Current portion of solar bonds issued to related parties 0.7%
Total current liabilities 36.1% 34.8% 25.7%

Long-term debt and capital leases, net of current portion 31.2% 25.1% 25.9%
Solar bonds issued to related parties, net of current portion 0.4%
Convertible senior notes issued to related parties
Deferred revenue, net of current portion 5.0% 5.5% 3.8%
Resale value guarantees, net of current portion 8.4% 16.0% 9.8%
Other long-term liabilities 2.7% 4.5% 8.3%
Misc. stocks 1.0% 0.6% 1.7%
Total liabilities 84.4% 86.6% 75.6%

Total stockholders' equity 15.6% 13.4% 21.0%

Noncontrolling interests in subsidiaries 3.5%

Total liabilities and equity 100% 100% 100%

izonal Analysis
(in thousands) 31 Dec 31 Dec 31 Dec
Accounts payable n.a.
2014 17.8%
2015 103.1%
2016
Accrued liabilities n.a. 57.2% 186.2%
Deferred revenue n.a. 121.2% 80.0%
Resale value guarantees 31.2%
Customer deposits n.a. 10.0% 134.3%
Current portion of long-term debt and capital leases n.a. 2.8% 56.7%
Current portion of solar bonds issued to related parties n.a.
Total current liabilities n.a. 33.4% 107.3%

Long-term debt and capital leases, net of current portion n.a. 11.1% 189.9%
Solar bonds issued to related parties, net of current portion n.a.
Convertible senior notes issued to related parties n.a.
Deferred revenue, net of current portion n.a. 52.6% 90.9%
Resale value guarantees, net of current portion n.a. 165.2% 70.9%
Other long-term liabilities n.a. 136.0% 418.2%
Misc. stocks n.a. -18.7% 694.8%
Total liabilities n.a. 42.0% 145.2%
Total stockholders' equity n.a. 18.9% 338.6%

Noncontrolling interests in subsidiaries n.a.

Total liabilities and equity n.a. 38.4% 180.9%
 Ratios
FINANCIAL RATIOS
Liquidity Ratios
1 Current Ratio =
2 Quick Ratio / Acid Test Ratio =
3 Cash Ratio
4 Operating Cash Flow Ratio

Management Efficiency Ratios

1 Days Inventory Outstanding (DIO) =
2 Days Sales Outstanding (DSO) =
3 Days Payables Outstanding (DPO) =
4 Cash Conversion Cycle (CCC) / Net Trade Cycle =

5 Asset Turnover Ratio =

6 Inventory Turnover Ratio =

7 Receivables Turnover Ratio =
8 Days Sales in Inventory Ratio =

Profitability & Growth Ratios

1 Revenue Growth

2 Gross Profit (GP) / Margin

3 Operating Profit Margin (EBIT) =

4 Net Profit Margin (Net Income) =
5 Return on Assets (ROA) =
6 Return on Equity (ROE) =

Leverage/Solvency Ratios
1 Debt Ratio =
2 Debt to Equity Ratio =
3 Interest Coverage Ratio / Times Interest Earned =
4 Debt Service Coverage Ratio (DSCR) =

Market Value Ratios

1 Book Value per Share Ratio =
2 Dividend Yield Ratio =
3 Earnings per Share Ratio =
4 Price-Earnings Ratio =
5 Dividend Pay-out Ratio =
FINANCIAL RATIOS ANALYSIS
Formulas Ratios

Liquidity Ratios
Current Assets / Current Liabilities Current Ratio
Quick Assets / Current Liabilities Quick Ratio
Cash & Cash Equivalents / Current Liabilities Cash Ratio
Opearting Cash Flow / Current Liabilities

Management Efficiency Ratios

Average Inventory / Cost of Goods Sold * 365 DIO
Average Trade Receivables / Sales * 365 DSO
Average Trade Payables / Cost of Goods Sold * 365 DPO
DIO+DSO-DPO CCC

Net Sales / Total Assets Asset Turnover Ratio

Cost of Goods Sold / Average Inventory Inventory Turnover Ratio

Net Credit Sales / Average Accounts Receivables Receivables Turnover Ratio
365 / Inventory Turnover Ratio Days Sales in Inventory Ratio

Profitability & Growth Ratios

Revenue of Current Year / of Previous Year - 1 Growth - Automotive
Growth - Energy Generation & Storage
Growth - Services & other
Overall Revenue Growth

Gross Profit / Revenue GP - Automotive

GP - Energy Generation & Storage
GP - Services & other
Overall GP

EBIT / Revenue Operating Profit (Loss) Margin

Net Income / Revenue Net Profit (Loss) Margin
Net Income / Total Assets ROA
Net Income / Equity ROE
Or [ROA * (Total Assets / Equity ) * (Net Income / EBIT)]

Leverage/Solvency Ratios
Total Liabilities / Total Assets Debt Ratio
Total Liabilities / Stockholders' Equity Debt to Equity Ratio
Opearing Income (EBIT) / Interest Expenses Interest Coverage Ratio
Operating Income (EBIT) / Debt Principal + Interest

Shareholder's Equity / Total Shares Outstanding

Dividend per Share / Share Price
Net Earnings / Total Shares Outstanding
Share Price / Earnings per Share
Dividend per Share / Earnings per Share
FY14 FY15 FY16

1.5 1.0 1.1

1.0 0.5 0.7
0.9 0.4 0.6

175.8 195.5 69.9

31.2 39.0 16.9
133.5 162.3 62.9
73.5 72.3 23.9

0.5 0.5 0.3

0.5 0.5 1.3

4.0 3.0 7.0
703.2 782.1 279.4

n.a. 24.4% 69.8%

n.a. 244.0% 1153.0%
n.a. 55.3% 61.1%
n.a. 26.5% 73.0%

28.6% 24.5% 25.2%

4.8% 15.1% 1.7%
10.8% 1.3% -1.0%
27.6% 22.8% 22.8%

-5.8% -17.7% -9.5%

-8.6% -22.0% -9.6%
-4.7% -11.0% -3.0%
-30.2% -82.0% -14.2%

0.8 0.9 0.8

5.4 6.4 3.6
-1.9 -6.0 -3.4
 Liquidity Ratios
ANALYSIS NOTES
1 TESLA's liquidity deteriorated sharply in FY15 before rising merely in FY16.
2 Current, Quick and Cash Ratio for FY16 are below the ideal figures of 2, 1 and 0.75 respectively.
3 TESLA might look to raise capital in near future to tackle its liquidity issues.

Management Efficiency Ratios

1 DIO and DSO have decreased significantly during the period resulting in faster cashflow and a lower CCC or Net Trade Cycle in FY16 inspite of DPO
2 This is the reason behind Liquidity Ratios improving in FY16 after they deteriorated sharply in FY15.

3 Asset Turnover Ratio has decreased merely in FY16 with the Revenue not being able to keep up with the increase in Total Assets.

4 Inventory and Receivables Turnover Ratios have increased significantly during the timeperiod due to efficiency of Management.
5 Days Sales in Inventory Ratio has also reduced significantly due to lesser time for Inventory to be converted into Sales.
6 TESLA's Management has been performing well leading to increase in operational efficiency.

Profitability & Growth Ratios

1 TESLA has been experiencing strong double digit growth during the period. All thress business lines are expanding rapidly.
2 The sharp four digit increase under Energy Generation in FY16 was. however, due to the merger of TESLA and SOLAR CITY in 2016.

3 The most stable unit in terms of GP Margin is Automotive but decreasing from 29% in FY14 to 25% in FY16.
4 Energy Generation and Services business lines are in their infancy with very low GP margin. Some of the services were even sold at a loss in FY16.
5 Overall GP margin of TESLA has decreased significantly majorly due to the two businesses other than Automotive.

6 TESLA has a negative Operating and even poor Profit Margin due to the Interest Expenses which means that the Gross Profit generated is not able t
7 There was a significant fall in the margins in FY15 which TESLA managed to recover from in FY16 but still not being able to profit during the timeper

Leverage/Solvency Ratios
1 Debt and Debt to Equity Ratios are well above the ideals figures of 0.4 and 1 respectively which is very alarming for the lenders.
2 With a negative EBIT or Operating Loss, TESLA is not able to meet its interest expenses with opearing profitability as it has not reached break-even
3 TESLA is a very risky company for lenders lured in this investment by high bond coupons.

TELSA has low liquidity, strong market reputation and brand and has not reached profitability. Thus, opini
S

e Cycle in FY16 inspite of DPO decreasing which decreases the cashflow.

otal Assets.

CITY in 2016.

re even sold at a loss in FY16.

s Profit generated is not able to cover its operating and interest expenses.
ble to profit during the timeperiod leading to negative ROA and ROE.

it has not reached break-even just yet.

ofitability. Thus, opinions on the future of the firm tend to be polarizing.