Second Quarter 2012 Shareholder Letter - Technology Partners

Tesla Motors, Inc.
Reconciliation of GAAP to Non-GAAP Financial Information
(Unaudited)
(In thousands, except per share data)
June 30,
2012
Three Months Ended
Mar 31,
2012
June 30,
2011
Six Months Ended
June 30,
2012
June 30,
2011
Research and development expenses
(GAAP) $ 74,854 $ 68,391 $ 52,531 $ 143,245 $ 93,693
Stock-based compensation expense (7,133) (5,932) (3,018) (13,065) (5,317)
Research and development expenses
(Non-GAAP)
$ 67,721 $ 62,459 $ 49,513 $ 130,180 $ 88,376
Selling, general and administrative
expenses (GAAP) $ 36,083 $ 30,582 $ 24,716 $ 66,665 $ 48,928
Stock-based compensation expense (5,332) (4,772) (3,727) (10,104) (7,200)
Selling, general and administrative
expenses (Non-GAAP)
$ 30,751 $ 25,810 $ 20,989 $ 56,561 $ 41,728
Net loss (GAAP) $ (105,603) $ (89,873) $ (58,903) $ (195,476) $ (107,844)
Stock-based compensation expense 12,543 10,711 6,926 23,254 12,852
Change in fair value of w arrant liability (154) (155) 340 (309) 1,761
Net loss (Non-GAAP) $ (93,214) $ (79,317) $ (51,637) $ (172,531) $ (93,231)
Net loss per common share, basic and
diluted (GAAP)
$ (1.00) $ (0.86) $ (0.60) $ (1.86) $ (1.12)
Stock-based compensation expense $ 0.11
0.10 0.07 0.22 0.13
Change in fair value of w arrant liability $ (0.00) (0.00) 0.00 (0.00) 0.02
Net loss per common share, basic and
diluted (Non-GAAP)
$ (0.89) $ (0.76) $ (0.53) $ (1.64) $ (0.97)
Shares used in per share calculation,
basic and diluted (GAAP and Non-GAAP) 105,242 104,784 97,757 105,013 96,478
Non-GAAP Financial Information
Consolidated financial information has been presented in accordance w ith GAAP as w ell as on a non-GAAP basis. On a non-GAAP
basis, financial measures exclude non-cash items such as stock-based compensation as w ell as the change in fair value related to
Tesla’s w arrant liability. Management believes that it is useful to supplement its GAAP financial statements w ith this non-GAAP
information because management uses such information internally for its operating, budgeting and financial planning purposes. These
non-GAAP financial measures also facilitate management’s internal comparisons to Tesla’s historical performance as w ell as
comparisons to the operating results of other companies. Non-GAAP information is not prepared under a comprehensive set of
accounting rules and therefore, should only be read in conjunction w ith financial information reported under U.S. GAAP w hen
understanding Tesla's operating performance. A reconciliation betw een GAAP and non-GAAP financial information is provided above.