Bloom Energy Corporation

08/14/2019 | Press release | Distributed by Public on 08/14/2019 04:07

Quarterly Report

Power Purchase Agreement Programs

Overview

In mid-2010, we began offering our Energy Servers through our Bloom Electrons program, which we denote as Power Purchase Agreement Programs, financed via investment entities. Under these arrangements, an operating entity is created (the 'Operating Company') which purchases the Energy Server from us. The end customer then enters into a power purchase agreement ('PPA') with the Operating Company to purchase the power generated by the Energy Server(s) at a specified rate per kilowatt hour for a specified term which can range from 10to 21years. In some cases similar to direct purchases and leases, the standard one-year warranty and performance guaranties are included in the price of the product. The Operating Company also enters into a master services agreement ('MSA') with us following the first year of service to extend the warranty services and guaranties over the term of the PPA. In other cases, the MSA including warranties and guaranties are billed on a quarterly basis starting in the first quarter following the placed-in-service date of the Energy Servers and continuing over the term of the PPA. The first of such arrangements was considered a sales-type lease and the product revenue from that agreement was recognized up front in the same manner as direct purchase and lease transactions. Substantially all of our subsequent PPAs have been accounted for as operating leases with the related revenue under those agreements recognized ratably over the PPA term as electricity revenue. We recognize the cost of revenue, primarily product costs and maintenance service costs, over the shorter of the estimated useful life of the Energy Server or the term of the PPA.

We and our third-party equity investors (together 'Equity Investors') contribute funds into a limited liability investment entity ('Investment Company') that owns and is parent to the Operating Company (together, the 'PPA Entities'). The PPA Entities constitute variable investment entities ('VIEs') under U.S. GAAP. We have considered the provisions within the contractual agreements which grant us power to manage and make decisions affecting the operations of these VIEs. We consider that the rights granted to the Equity Investors under the contractual agreements are more protective in nature rather than participating. Therefore, we have determined under the power and benefits criterion of ASC 810 - Consolidations that we are the primary beneficiary of these VIEs. On June 14, 2019, we entered into a PPA II upgrade of Energy Servers transaction, and as a result we determined that we no longer retain a controlling interest in PPA II and therefore it will no longer be consolidated as a VIE into our condensed consolidated financial statements as of June 30, 2019. See further discussion below.

As the primary beneficiary of these VIEs, we consolidate in our financial statements the financial position, results of operations and cash flows of the PPA Entities, and all intercompany balances and transactions between us and the PPA Entities are eliminated in the condensed consolidated financial statements.

The Operating Company acquires Energy Servers from us for cash payments that are made on a similar schedule as if the Operating Company were a customer purchasing an Energy Server from us outright. In the condensed consolidated financial statements, the sales of our Energy Servers to the Operating Company are treated as intercompany transactions after the elimination of intercompany balances. The acquisition of Energy Servers by the Operating Company is accounted for as a non-cash reclassification from inventory to Energy Servers within property, plant and equipment, net on our condensed consolidated balance sheets. In arrangements qualifying for sales-type leases, we reduce these recorded assets by amounts received from U.S. Treasury Department cash grants and from similar state incentive rebates.

The Operating Company sells the electricity to end customers under PPAs. Cash generated by the electricity sales, as well as receipts from any applicable government incentive program, is used to pay operating expenses (including the management and services we provide to maintain the Energy Servers over the term of the PPA) and to service the non-recourse debt with the remaining cash flows distributed to the Equity Investors. In transactions accounted for as sales-type leases, we recognize subsequent customer billings as electricity revenue over the term of the PPA and amortizes any applicable government incentive program grants as a reduction to depreciation expense of the Energy Server over the term of the PPA. In transactions accounted for as operating leases, we recognize subsequent customer payments and any applicable government incentive program grants as electricity revenue over the term of the PPA.

Upon sale or liquidation of a PPA Entity, distributions would occur in the order of priority specified in the contractual agreements.

We have established sixdifferent PPA Entities to date. The contributed funds are restricted for use by the Operating Company to the purchase of Energy Servers manufactured by us in our normal course of operations, all sixPPA Entities utilized their entire available financing capacity and have completed the purchase of their Energy Servers. Any debt incurred by the Operating Companies is non-recourse to us. Under these structures, each Investment Company is treated as a partnership for U.S. federal income tax purposes. Equity Investors receive investment tax credits and accelerated tax depreciation benefits. In 2016, we purchased the tax equity investor's interest in PPA I, which resulted in a change in our ownership interest in PPA I while we continued to hold the controlling financial interest in this company.

PPA II Upgrade of Energy Servers

Transaction Overview

On June 14, 2019, we entered into a transaction with SP Diamond State Class B Holdings, LLC ('SPDS'), a wholly owned subsidiary of Southern Power Company, in which SPDS will purchase a majority interest in PPA II, which operates in Delaware providing alternative energy generation for state tariff rate payers (the 'PPA II Project'). PPA II will use the received funds to purchase current generation Bloom fuel cell energy servers in connection with the upgrade of its energy generation assets fleet.

In connection with the closing of this transaction, SPDS was admitted as a member of Diamond State Generation Partners, LLC ('DSGP'). DSGP, an operating company, is now owned by Diamond State Generation Holdings, LLC ('DSGH') and SPDS. Subject to (i) the satisfaction by Bloom of certain conditions precedent, and (ii) the non-occurrence of certain events outside of our control, SPDS has agreed to make capital contributions to DSGP sufficient for DSGP to purchase up to approximately 18 megawattsof Energy Servers from us in one or more phases following the closing, decommissioning 19megawatts of our less efficient older generation Energy Servers. Prior to selling the new generation Energy Servers to DSGP in each phase, we will repurchase a proportionate number of DSGP's existing Energy Servers and remove such existing Energy Servers from PPA II's site. In the future, subject to our ability to secure additional capital commitments from sources yet to be identified, the remaining 11megawatts of existing Energy Servers that constitute PPA II may be repurchased by Bloom and replaced by up to approximately 9megawatts of new Energy Servers to be sold by us to DSGP. After accounting for the funds committed by SPDS, we estimate that we will need to secure approximately $92 millionof additional funding in order to complete the upgrade of the PPA II Project. In the event that we are unable to secure financing to fund the deployment of the additional 9megawatts of new Energy Servers at the PPA II Project, we expect to continue to operate the existing Energy Servers, in which case we may need to amend certain operating permits for the PPA II Project. We will continue as operator of PPA II, but management of DSGP will transfer to SPDS as of the date we have completed the repurchase of all of the interests of Mehetia, Inc., a wholly-owned subsidiary of Credit Suisse AG ('Mehetia'), in the PPA II Project.

Obligations to the PPA II Financiers

After giving effect to the admission of SPDS as a member of DSGP at the closing and the retirement of the existing debt, there are three investors in the PPA II Project: Bloom Energy, Mehetia, and SPDS.

At closing, we made a partial payment for repurchase of the existing Energy Servers owned by DSGP in the amount of approximately $72.3 million, all of which was used by DSGP (along with additional DSGP's cash reserves) to prepay all of its existing indebtedness associated with PPA II. We also agreed to purchase all of the equity interests in PPA II currently held by Mehetia for an estimated purchase price of $57.5 million. The purchase of Mehetia's equity interests in PPA II will be effected via multiple payments by us with the final payment to be made no later than March 31, 2020.

In connection with the admission of SPDS as a member of DSGP, the DSGP limited liability company agreement was amended to provide, among other things, for the allocation of revenues, benefits and expenses between us, Mehetia and SPDS. Under the amended limited liability company agreement, until such time as all of Mehetia's equity interests in PPA II have been repurchased, Mehetia is entitled to 100% of the revenues generated by the PPA II Project from the operation of the existing Energy Servers and we are entitled to none of such revenues. From and after the date that all of Mehetia's equity interests in PPA II have been repurchased, we will be entitled to 100% of the revenues generated by the PPA II Project from the operation of the existing Energy Servers. Additionally, SPDS is entitled to 100% of the revenues generated by the PPA II Project from the operation of the new Energy Servers. SPDS is also entitled to 100% of any tax attributes, income and loss associated with the new energy servers.

Obligations to DSGP

At closing, we and DSGP entered into two primary commercial contracts: first, a contract for the purchase, sale and installation of the new Energy Servers (the 'EPC Agreement'), and second, a contract for the operation and maintenance of the PPA II Project, including both the existing Energy Servers and the new Energy Servers (the 'O&M Agreement'). Both the upfront purchase price for the new Energy Servers under the EPC Agreement and the ongoing fees for our operations and maintenance of the PPA II Project under the O&M Agreement are paid on a fixed dollar per kilowatt ($/kW) basis.

Our obligations to DSGP pursuant to the EPC Agreement include: (i) designing, manufacturing, and installing the new Energy Servers, and selling such Energy Servers to DSGP; (ii) obtaining all necessary permits and other governmental approvals necessary for the installation and operation of the new Energy Servers; and (iii) commissioning each of the new Energy Servers upon the completion of installation.

Our obligations to DSGP pursuant to the O&M Agreement include: (i) maintaining all necessary permits and other governmental approvals necessary for the operation of the PPA II Project, and maintaining such permits and approvals throughout the term of the O&M Agreement; (ii) operating and maintaining the PPA II Project in compliance with all applicable laws, permits and regulations; (iii) satisfying the efficiency and output obligations set forth in such O&M Agreement ('Performance Requirements'); and (iv) complying with the requirements of the PPA II Tariff. The O&M Agreement obligates us to repurchase some or all of the Energy Servers constituting the PPA II Project in the event the PPA II Project fails to comply with the Performance Requirements and we fail to remedy such failure after a cure period.

The O&M Agreement for the PPA II Project provides for the following Performance Requirements and indemnity obligations:

Efficiency Guaranty. We warrant to DSGP that the PPA II Project will operate at a cumulative average efficiency level of 50%, including period of operation prior to closing of the PPA II upgrade transaction. If the aggregate average efficiency falls below the specified threshold, we are obligated to make a payment to DSGP equal to the increased expense resulting from such efficiency shortfall, with our aggregate liability for such payments capped at an amount specified in the O&M Agreement. During the period from September 2010 to June 30, 2019, no payments have been made pursuant to the Efficiency Guaranty.

Existing Energy Server Output Warranty. We warrant to DSGP that the remaining existing Energy Servers at the PPA II Project will, in the aggregate, generate a minimum amount of electricity in each calendar quarter, and we are obligated to repair or replace Energy Servers if such Energy Servers fail to satisfy this warranty. If we determine that a repair or replacement is not feasible, we are obligated to repurchase such Energy Servers at the original purchase price. During the period from September 2010 to June 30, 2019, no Energy Servers have been repurchased pursuant to the Existing Energy Server Output Warranty.

New Energy Server Output Warranty. We warrant to DSGP that the new Energy Servers purchased by DSGP in connection with the PPA II Project will, in the aggregate, generate a minimum amount of electricity on a cumulative basis, and we are obligated to repair or replace Energy Servers if such Energy Servers fail to satisfy this warranty. If we determine that a repair or replacement is not feasible, we are obligated to repurchase such Energy Servers at the original purchase price. During the period from the closing of the upgrade to June 30, 2019, no Energy Servers have been repurchased pursuant to the New Energy Server Output Warranty.

New Energy Server Output Guaranty.We warrant to DSGP that the new Energy Servers purchased by DSGP in connection with the PPA II Project will, in the aggregate, generate a minimum amount of electricity on a cumulative basis, and we are obligated to make a payment to DSGP to make DSGP for lost revenues resulting from the shortfall below the guaranteed level if such Energy Servers fail to satisfy this warranty, with our aggregate liability for such payments capped at an amount specified in the O&M Agreement. During the period from the closing of the upgrade to June 30, 2019, no payments have been made pursuant to the New Energy Server Output Guaranty.

Other Obligations

In addition to the rights and obligations set forth above, the transaction documents related to the upgrade of the PPA II Project contain certain representations, warranties and covenants of Bloom, DSGH, DSGP, Mehetia and SPDS, including representations and warranties of Bloom and DSGP relating to the conduct of their respective businesses prior to the closing of the transaction, as well as indemnity obligations related to the breach of such representations, warranties and covenants. In addition, we have agreed to indemnify SPDS for losses that may be incurred in the event of certain regulatory, legal or legislative development in an aggregate amount of up to $97.2 millionand we have also agreed to indemnify SPDS for losses that may be incurred in connection with the loss or disallowance of certain tax benefits that we expect the upgrade of the PPA II Project to generate, in an aggregate amount of up to $7.5 million. As of June 30, 2019, we established a cash-collateralized letter of credit of $20.0million under this obligation, and we committed to fund an additional cash-collateralized letter of credit of $20.0million subsequent to June 30, 2019. Under the terms of the Equity Capital Contribution Agreement, in some circumstances, including in the event that our shares of common stock are trading at a specified price for a specified period, Southern has the right to require that Bloom either (a) provide supplemental Tariff Damages Collateral (as defined in the agreement) in the amount of the difference between the then-applicable Tariff Damages and the Tariff Damages Collateral then-available to Southern pursuant to the LLC Agreement, or (b) make a payment to Southern in the amount of such difference. Based on current deployments, in the event our shares of common stock are trading at a specified price for a specified period, then based on current deployments we anticipate a potential commitment resulting from the difference between the Tariff Damage Collateral and Tariff Damage to be up to an additional $57.2million.

Obligations Under the PPA II Tariff Agreement

In the event that DSGP claims that a 'Forced Outage Event' has occurred under the PPA II tariff, DSGP is obligated to purchase and deliver replacement renewable energy credits ('RECs') in an amount equal to the number of megawatt hours for which it receives compensation under the 'forced outage' provisions of the tariff, but only if such replacement RECs are available in sufficient quantities and can be purchased for less than $45per REC. A 'Forced Outage Event' is defined under the PPA II tariff agreement as the inability of DSGP to obtain a replacement component part or a service necessary for the operation of the Energy Servers at their nameplate capacity. The PPA II tariff agreement provides for payments to DSGP in the event of a Forced Outage Event lasting in excess of 90 days. For the first 90 days following the occurrence of a Forced Outage Event, no payments are made under this provision of the tariff. Thereafter, DSGP is entitled to payments equal to 70% of the payments that would have been made under the tariff but for the occurrence of the Forced Outage Event-that is, the 'Forced Outage Event' provision of the PPA II tariff agreement provides for payments to DSGP under the tariff equal to the amount that would be paid were PPA II Project energy servers operating at 70% of their nameplate capacity, irrespective of actual output. The PPA II tariff agreement also provides that the 'Forced Outage Event' protections afforded thereunder shall automatically terminate in the event that we obtain an investment grade rating.

Impact of PPA II Project on Consolidated Financial Statements

As described above, the PPA II Project documents contain certain representations, warranties and covenants of Bloom, DSGH, DSGP, Mehetia and SPDS, including representations and warranties of Bloom and DSGP relating to the conduct of their respective businesses prior to the closing of the transaction, as well as indemnity obligations related to the breach of such representations, warranties and covenants. In addition, we have agreed to indemnify SPDS for losses that may be incurred in the event of certain regulatory, legal or legislative development in an aggregate amount of up to $97.2 million. As of June 30, 2019, we believe these events to be remote and therefore, no liability has been recorded on our condensed consolidated financial statements.

As a result of the transaction with SPDS, we reconsidered whether we should continue to consolidate DSGP. We use a qualitative approach in assessing the consolidation requirement for each of our PPA Entities. This approach focuses on determining whether we have the power to direct those activities of the PPA Entities that most significantly affect their economic performance and whether we have the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the PPA Entities. As a result of the PPA II Project, we determined that we no longer retain a controlling interest in PPA II and therefore it will no longer be consolidated as a VIE into our condensed consolidated financial statements as of June 30, 2019. We determined that we have retained significant influence over DSGP and consequently recognize our remaining interest in DSGP as an equity-method investment as of June 30, 2019.

The PPA II Project occurs in two phases, phase 1 where initially SPDS had its purchased interest in 9.7 megawattsof Energy Servers installed during June 2019, and its remaining phase 2 purchased interest in 8.0 megawattsof Energy Servers to be installed which is expected to occur during the remainder of 2019. As of June 30, 2019, we have sold 9.7 megawattsof our current generation Energy Servers for $87.8 millionto DSGP subsequent to its deconsolidation, which is included in product revenue, and recognized installation services of $3.9 millionwhich is included in installation revenue, in our condensed consolidated statements of operations for the three and six months ended June 30, 2019. Concurrently, we had repurchased and written-off 10.0 megawattsof our earlier generation energy serves for $25.6 millionand had installed the 9.7 megawattsof servers at a cost of goods sold of $26.3 million, which is included in cost of product revenue in our condensed consolidated statements of operations for the three and six months ended June 30, 2019. In anticipation of replacing the remaining installed 9.0 megawattsof Energy Servers during 2019 under phase 2 which reduced their previously expected useful lives, we recognized charges related to the decommissioning of PPA II Energy Servers of $8.1 million, which is included in cost of electricity revenue in our condensed consolidated statements of operations for the three and six months ended June 30, 2019. Additionally, in paying-off the outstanding debt and interest of PPA II amounting to $77.7 million, we incurred a debt payoff make-whole penalty of $5.9 million, which is included in general and administrative expense in our condensed consolidated statements of operations for the three and six months ended June 30, 2019. Finally, we had PPA II debt issuance costs written-off of $1.0 millionand additional interest expense incurred for PPA 2 debt payoff of $0.1 million, which is included in interest expense in our condensed consolidated statements of operations for the three and six months ended June 30, 2019.

The PPA II Project resulted in the following impacts on our condensed consolidated balance sheet as of June 30, 2019: (i) cash and cash equivalents increased $4.6 million, comprised of $115.6 millioncash receipts for the sale of new systems to PPA II, mostly offset by $72.3 millionused for the repayment of all PPA II debt plus a make-whole payment fee, a $18.7 milliondistribution to Credit Suisse, the other investor in PPA II, and a $20.0 millionreclassification into restricted cash for certain contingent indemnifications for SPDS under the PPA II Project in the form of a letter of credit to SPDS; (ii) inventories decreased $27.0 milliondue to the sale of 9.7 megawattsof current generation Energy Servers to PPA II during June 2019; (iii) property, plant and equipment decreased $33.7 million, comprised of $25.6 milliondue to the repurchase and write-off of 10.0 megawattsof older Energy Servers from PPA II plus $8.1 millionof charges related to the decommissioning of PPA II Energy Servers for the second phase of energy server replacement, anticipated to occur during the remainder of 2019; (iv) restricted cash long-term increased $8.7 million, comprised of $20.0 millionfor certain contingent indemnifications for SPDS under the PPA II Project, partially offset by $11.3 millionused for the repayment of debt; (v) current portion of non-recourse debt decreased $12.2 million; (vi) deferred revenue and customer deposits increased $23.8 millionrelated to deposit funding paid by SPDS for new systems in phase 2; (vii) accrued other current liabilities increased $0.4 million, comprised of an increase of $1.1 millionfor the accrued installation cost for the Energy Servers purchased by SPDS, mostly offset by a decrease of $0.7 millionrelated to the payoff of accrued interest made on PPA II's debt; (viii) long-term portion of non-recourse debt decreased $63.7 millionfor the payoff of long term portion of PPA II debt, net of debt issuance costs written-off; (ix) noncontrolling interest decreased $18.4 million, comprised of $18.7 millionof cash distribution to Credit Suisse resulting from our repurchase of 10.0 megawattsexisting Energy Servers, partially offset by $0.3 millionrelated to the HLBV adjustment; and (x) the reclass of $37.0 millionfrom noncontrolling interest to accrued other current liabilities related to our commitment to mandatorily redeem the noncontrolling interest in DSGH by March 31, 2020 under the PPA II Project.

PPA Entities' Activities Summary

The table below shows the details of the five continuing Investment Companies and their cumulative activities from inception to the periods indicated (dollars in thousands):

PPA II

PPA IIIa

PPA IIIb

PPA IV

PPA V

Overview:

Maximum size of installation (in megawatts)

30

10

6

21

40

Installed size (in megawatts)

20

4

10

5

19

37

Term of power purchase agreements (years)

21

15

15

15

15

First system installed

Jun-12

Feb-13

Aug-13

Sep-14

Jun-15

Last system installed

Nov-13

Jun-14

Jun-15

Mar-16

Dec-16

Income (loss) and tax benefits allocation to Equity Investor

99%

99%

99%

90%

99%

Cash allocation to Equity Investor

99%

99%

99%

90%

90%

Income (loss), tax and cash allocations to Equity Investor after the flip date

5%

5%

5%

No flip

No flip

Equity Investor ¹

Credit Suisse

US Bank

US Bank

Exelon Corporation

Exelon Corporation

Put option date ²

March 31, 2020

1st anniversary of flip point

1st anniversary of flip point

N/A

N/A

Company cash contributions

$

22,442

$

32,223

$

22,658

$

11,669

$

27,932

Company non-cash contributions ³

$

-

$

8,655

$

2,082

$

-

$

-

Equity Investor cash contributions

$

139,993

$

36,967

$

20,152

$

84,782

$

227,344

Debt financing

$

144,813

$

44,968

$

28,676

$

99,000

$

131,237

Cumulative Activity as of June 30, 2019:

Distributions to Equity Investor

$

138,602

$

4,430

$

2,007

$

6,420

$

69,099

Debt repayment-principal

$

144,813

$

5,651

$

4,414

$

16,731

$

7,572

Cumulative Activity as of December 31, 2018:

Distributions to Equity Investor

$

116,942

$

4,063

$

1,807

$

4,568

$

66,745

Debt repayment-principal

$

65,114

$

4,431

$

3,953

$

15,543

$

5,780

¹ Investor name represents ultimate parent of subsidiary financing the project.

² Investor right on the certain date, upon giving us advance written notice, to sell the membership interests to us or resign or withdraw from the investment partnership.

³ Non-cash contributions consisted of warrants that were issued by us to respective lenders to each PPA Entity, as required by such entity's credit agreements. The corresponding values are amortized using the effective interest method over the debt term.

4 Installed base decreased from March 31, 2019 due to the repurchase of 10 megawatts of our Energy Servers during June 2019 under the PPA II Project. See disclosures above.

Some of our PPA Entities contain structured provisions whereby the allocation of income and equity to the Equity Investors changes at some point in time after the formation of the PPA Entity. The change in allocations to Equity Investors (or the 'flip') occurs based either on a specified future date or once the Equity Investors reaches its targeted rate of return. For PPA Entities with a specified future date for the flip, the flip occurs January 1 of the calendar year immediately following the year that includes the fifth anniversary of the date the last site achieves commercial operation.

The noncontrolling interests in PPA IIIa and PPA IIIb are redeemable as a result of the put option held by the Equity Investors as of June 30, 2019. The noncontrolling interests in PPA II, IIIa and PPA IIIb are redeemable as a result of the put option held by the Equity Investors as of December 31, 2018. The redemption value is the put amount. At June 30, 2019, and December 31, 2018, the carrying value of redeemable noncontrolling interests of $0.5 millionand $57.3 million, respectively, exceeded the maximum redemption value.

PPA Entities' Aggregate Assets and Liabilities

Generally, Operating Company assets can be used to settle only the Operating Company obligations and Operating Company creditors do not have recourse to us. The aggregate carrying values of the PPA Entities' assets and liabilities in the condensed consolidated balance sheets, after eliminations of intercompany transactions and balances, were as follows (in thousands):

June 30,

December 31,

2019 1

2018

Assets

Current assets:

Cash and cash equivalents

$

18,043

$

5,295

Restricted cash

1,848

2,917

Accounts receivable

6,533

7,516

Customer financing receivable

5,817

5,594

Prepaid expenses and other current assets

1,585

4,909

Total current assets

33,826

26,231

Property and equipment, net

321,886

399,060

Customer financing receivable, non-current

64,146

67,082

Restricted cash

36,736

27,854

Other long-term assets

30,329

2,692

Total assets

$

486,923

$

522,919

Liabilities

Current liabilities:

Accounts payable

$

443

$

724

Accrued other current liabilities

39,028

1,442

Deferred revenue and customer deposits

786

786

Current portion of debt

10,544

21,162

Total current liabilities

50,801

24,114

Derivative liabilities, net of current portion

8,453

3,626

Deferred revenue, net of current portion

8,306

8,696

Long-term portion of debt

251,826

323,360

Other long-term liabilities

2,078

1,798

Total liabilities

$

321,464

$

361,594

1 These amounts include PPA II financial statement balances. See discussion above.

As stated above, we are a minority shareholder in the PPA Entities for the administration of our Bloom Electrons program. PPA Entities contain debt that is non-recourse to us. The PPA Entities also own Energy Server assets for which we do not have title. Although we will continue to have Power Purchase Agreement Program entities in the future and offer customers the ability to purchase electricity without the purchase of Energy Servers, we do not intend to be a minority investor in any new Power Purchase Agreement Program entities.

We believe that by presenting assets and liabilities separate from the PPA Entities, we provide a better view of the true operations of our core business. The table below provides detail into the assets and liabilities of Bloom Energy separate from the PPA Entities. The following table shows Bloom Energy's stand-alone, the PPA Entities combined and these consolidated balances as of June 30, 2019, and December 31, 2018(in thousands):

June 30, 2019

December 31, 2018

Bloom

PPA Entities

Consolidated

Bloom

PPA Entities

Consolidated

Assets

Current assets

$

558,458

$

33,826

$

592,284

$

646,350

$

26,231

$

672,581

Long-term assets

177,198

453,097

630,295

220,399

496,688

717,087

Total assets

$

735,656

$

486,923

$

1,222,579

$

866,749

$

522,919

$

1,389,668

Liabilities

Current liabilities

$

272,606

$

40,257

$

312,863

$

246,866

$

2,952

$

249,818

Current portion of debt

15,680

10,544

26,224

8,686

21,162

29,848

Long-term liabilities

233,880

18,837

252,717

293,739

14,120

307,859

Long-term portion of debt

390,157

251,826

641,983

388,073

323,360

711,433

Total liabilities

$

912,323

$

321,464

$

1,233,787

$

937,364

$

361,594

$

1,298,958