false2020Q3000146936712/31us-gaap:AccountingStandardsUpdate201613Memberus-gaap:AccountingStandardsUpdate201802Member00014693672020-01-012020-09-30xbrli:shares00014693672020-11-03iso4217:USD00014693672020-09-3000014693672019-12-310001469367us-gaap:AssetsLeasedToOthersMember2020-09-300001469367us-gaap:AssetsLeasedToOthersMember2019-12-31iso4217:USDxbrli:shares0001469367us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2020-09-300001469367us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2019-12-310001469367us-gaap:VariableInterestEntityPrimaryBeneficiaryMemberus-gaap:AssetsLeasedToOthersMember2020-09-300001469367us-gaap:VariableInterestEntityPrimaryBeneficiaryMemberus-gaap:AssetsLeasedToOthersMember2019-12-310001469367us-gaap:ServiceMember2020-07-012020-09-300001469367us-gaap:ServiceMember2019-07-012019-09-300001469367us-gaap:ServiceMember2020-01-012020-09-300001469367us-gaap:ServiceMember2019-01-012019-09-300001469367us-gaap:ProductMember2020-07-012020-09-300001469367us-gaap:ProductMember2019-07-012019-09-300001469367us-gaap:ProductMember2020-01-012020-09-300001469367us-gaap:ProductMember2019-01-012019-09-3000014693672020-07-012020-09-3000014693672019-07-012019-09-3000014693672019-01-012019-09-300001469367run:RedeemableNoncontrollingInterestMember2020-06-300001469367us-gaap:CommonStockMember2020-06-300001469367us-gaap:AdditionalPaidInCapitalMember2020-06-300001469367us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-300001469367us-gaap:RetainedEarningsMember2020-06-300001469367us-gaap:ParentMember2020-06-300001469367us-gaap:NoncontrollingInterestMember2020-06-3000014693672020-06-300001469367us-gaap:CommonStockMember2020-07-012020-09-300001469367us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300001469367us-gaap:ParentMember2020-07-012020-09-300001469367run:RedeemableNoncontrollingInterestMember2020-07-012020-09-300001469367us-gaap:NoncontrollingInterestMember2020-07-012020-09-300001469367us-gaap:RetainedEarningsMember2020-07-012020-09-300001469367us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300001469367run:RedeemableNoncontrollingInterestMember2020-09-300001469367us-gaap:CommonStockMember2020-09-300001469367us-gaap:AdditionalPaidInCapitalMember2020-09-300001469367us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-300001469367us-gaap:RetainedEarningsMember2020-09-300001469367us-gaap:ParentMember2020-09-300001469367us-gaap:NoncontrollingInterestMember2020-09-300001469367run:RedeemableNoncontrollingInterestMember2019-06-300001469367us-gaap:CommonStockMember2019-06-300001469367us-gaap:AdditionalPaidInCapitalMember2019-06-300001469367us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-300001469367us-gaap:RetainedEarningsMember2019-06-300001469367us-gaap:ParentMember2019-06-300001469367us-gaap:NoncontrollingInterestMember2019-06-3000014693672019-06-300001469367us-gaap:CommonStockMember2019-07-012019-09-300001469367us-gaap:AdditionalPaidInCapitalMember2019-07-012019-09-300001469367us-gaap:ParentMember2019-07-012019-09-300001469367run:RedeemableNoncontrollingInterestMember2019-07-012019-09-300001469367us-gaap:NoncontrollingInterestMember2019-07-012019-09-300001469367us-gaap:RetainedEarningsMember2019-07-012019-09-300001469367us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-07-012019-09-300001469367run:RedeemableNoncontrollingInterestMember2019-09-300001469367us-gaap:CommonStockMember2019-09-300001469367us-gaap:AdditionalPaidInCapitalMember2019-09-300001469367us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-09-300001469367us-gaap:RetainedEarningsMember2019-09-300001469367us-gaap:ParentMember2019-09-300001469367us-gaap:NoncontrollingInterestMember2019-09-3000014693672019-09-300001469367run:RedeemableNoncontrollingInterestMember2019-12-310001469367us-gaap:CommonStockMember2019-12-310001469367us-gaap:AdditionalPaidInCapitalMember2019-12-310001469367us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001469367us-gaap:RetainedEarningsMember2019-12-310001469367us-gaap:ParentMember2019-12-310001469367us-gaap:NoncontrollingInterestMember2019-12-3100014693672019-01-012019-12-310001469367us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310001469367us-gaap:ParentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310001469367srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310001469367us-gaap:CommonStockMember2020-01-012020-09-300001469367us-gaap:AdditionalPaidInCapitalMember2020-01-012020-09-300001469367us-gaap:ParentMember2020-01-012020-09-300001469367run:RedeemableNoncontrollingInterestMember2020-01-012020-09-300001469367us-gaap:NoncontrollingInterestMember2020-01-012020-09-300001469367us-gaap:RetainedEarningsMember2020-01-012020-09-300001469367us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300001469367run:RedeemableNoncontrollingInterestMember2018-12-310001469367us-gaap:CommonStockMember2018-12-310001469367us-gaap:AdditionalPaidInCapitalMember2018-12-310001469367us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-310001469367us-gaap:RetainedEarningsMember2018-12-310001469367us-gaap:ParentMember2018-12-310001469367us-gaap:NoncontrollingInterestMember2018-12-3100014693672018-12-3100014693672018-01-012018-12-310001469367us-gaap:AccumulatedOtherComprehensiveIncomeMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2018-12-310001469367us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2018-12-310001469367srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2018-12-310001469367us-gaap:CommonStockMember2019-01-012019-09-300001469367us-gaap:AdditionalPaidInCapitalMember2019-01-012019-09-300001469367us-gaap:ParentMember2019-01-012019-09-300001469367run:RedeemableNoncontrollingInterestMember2019-01-012019-09-300001469367us-gaap:NoncontrollingInterestMember2019-01-012019-09-300001469367us-gaap:RetainedEarningsMember2019-01-012019-09-300001469367us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-09-300001469367run:RecourseDebtMember2020-01-012020-09-300001469367run:RecourseDebtMember2019-01-012019-09-300001469367run:NonRecourseDebtMember2020-01-012020-09-300001469367run:NonRecourseDebtMember2019-01-012019-09-300001469367srt:MinimumMember2020-09-300001469367srt:MaximumMember2020-09-30run:investment_fundrun:segmentrun:business_activity0001469367run:CustomerAgreementsMember2020-07-012020-09-300001469367run:CustomerAgreementsMember2019-07-012019-09-300001469367run:CustomerAgreementsMember2020-01-012020-09-300001469367run:CustomerAgreementsMember2019-01-012019-09-300001469367run:IncentivesMember2020-07-012020-09-300001469367run:IncentivesMember2019-07-012019-09-300001469367run:IncentivesMember2020-01-012020-09-300001469367run:IncentivesMember2019-01-012019-09-300001469367run:SolarEnergySystemsMember2020-07-012020-09-300001469367run:SolarEnergySystemsMember2019-07-012019-09-300001469367run:SolarEnergySystemsMember2020-01-012020-09-300001469367run:SolarEnergySystemsMember2019-01-012019-09-300001469367us-gaap:ManufacturedProductOtherMember2020-07-012020-09-300001469367us-gaap:ManufacturedProductOtherMember2019-07-012019-09-300001469367us-gaap:ManufacturedProductOtherMember2020-01-012020-09-300001469367us-gaap:ManufacturedProductOtherMember2019-01-012019-09-300001469367run:PaymentsReceivedMemberus-gaap:ServiceMember2020-09-300001469367run:PaymentsReceivedMemberus-gaap:ServiceMember2019-12-310001469367run:FinancingMemberus-gaap:ServiceMember2020-09-300001469367run:FinancingMemberus-gaap:ServiceMember2019-12-310001469367us-gaap:ServiceMember2020-09-300001469367us-gaap:ServiceMember2019-12-310001469367run:PaymentsReceivedMemberus-gaap:ProductMember2020-09-300001469367run:PaymentsReceivedMemberus-gaap:ProductMember2019-12-310001469367run:FinancingMemberus-gaap:ProductMember2020-09-300001469367run:FinancingMemberus-gaap:ProductMember2019-12-310001469367us-gaap:ProductMember2020-09-300001469367us-gaap:ProductMember2019-12-31xbrli:pure0001469367run:PaymentsUnderCustomerAgreementsMemberrun:SolarEnergySystemsMember2020-01-012020-09-300001469367us-gaap:CarryingReportedAmountFairValueDisclosureMemberrun:SyndicatedWorkingCapitalFacilityMember2020-09-300001469367us-gaap:EstimateOfFairValueFairValueDisclosureMemberrun:SyndicatedWorkingCapitalFacilityMember2020-09-300001469367us-gaap:CarryingReportedAmountFairValueDisclosureMemberrun:SyndicatedWorkingCapitalFacilityMember2019-12-310001469367us-gaap:EstimateOfFairValueFairValueDisclosureMemberrun:SyndicatedWorkingCapitalFacilityMember2019-12-310001469367us-gaap:CarryingReportedAmountFairValueDisclosureMemberrun:SeniorDebtMember2020-09-300001469367us-gaap:EstimateOfFairValueFairValueDisclosureMemberrun:SeniorDebtMember2020-09-300001469367us-gaap:CarryingReportedAmountFairValueDisclosureMemberrun:SeniorDebtMember2019-12-310001469367us-gaap:EstimateOfFairValueFairValueDisclosureMemberrun:SeniorDebtMember2019-12-310001469367us-gaap:SubordinatedDebtMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-09-300001469367us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SubordinatedDebtMember2020-09-300001469367us-gaap:SubordinatedDebtMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2019-12-310001469367us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:SubordinatedDebtMember2019-12-310001469367run:SecuritizationDebtMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2020-09-300001469367us-gaap:EstimateOfFairValueFairValueDisclosureMemberrun:SecuritizationDebtMember2020-09-300001469367run:SecuritizationDebtMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2019-12-310001469367us-gaap:EstimateOfFairValueFairValueDisclosureMemberrun:SecuritizationDebtMember2019-12-310001469367us-gaap:CarryingReportedAmountFairValueDisclosureMember2020-09-300001469367us-gaap:EstimateOfFairValueFairValueDisclosureMember2020-09-300001469367us-gaap:CarryingReportedAmountFairValueDisclosureMember2019-12-310001469367us-gaap:EstimateOfFairValueFairValueDisclosureMember2019-12-310001469367us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2020-09-300001469367us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2020-09-300001469367us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2020-09-300001469367us-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2020-09-300001469367us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001469367us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001469367us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2020-09-300001469367us-gaap:FairValueMeasurementsRecurringMember2020-09-300001469367us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2019-12-310001469367us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2019-12-310001469367us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2019-12-310001469367us-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2019-12-310001469367us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001469367us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001469367us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2019-12-310001469367us-gaap:FairValueMeasurementsRecurringMember2019-12-310001469367run:ContingentConsiderationMember2019-12-310001469367run:ContingentConsiderationMember2020-01-012020-09-300001469367run:ContingentConsiderationMember2020-09-300001469367us-gaap:EquipmentMember2020-09-300001469367us-gaap:EquipmentMember2019-12-310001469367run:InvertersMember2020-09-300001469367run:InvertersMember2019-12-310001469367run:SolarEnergySystemsMember2020-09-300001469367run:SolarEnergySystemsMember2019-12-310001469367run:CustomerAgreementsMember2020-09-300001469367run:CustomerAgreementsMember2019-12-310001469367run:IncentivesMember2020-09-300001469367run:IncentivesMember2019-12-310001469367run:RecourseDebtMemberrun:SyndicatedWorkingCapitalFacilityMember2020-09-300001469367run:RecourseDebtMembersrt:MinimumMemberrun:SyndicatedWorkingCapitalFacilityMember2020-09-300001469367srt:MaximumMemberrun:RecourseDebtMemberrun:SyndicatedWorkingCapitalFacilityMember2020-09-300001469367run:RecourseDebtMember2020-09-300001469367run:NonRecourseDebtMemberrun:SeniorDebtMember2020-09-300001469367run:NonRecourseDebtMembersrt:MinimumMemberrun:SeniorDebtMember2020-09-300001469367srt:MaximumMemberrun:NonRecourseDebtMemberrun:SeniorDebtMember2020-09-300001469367run:NonRecourseDebtMemberus-gaap:SubordinatedDebtMember2020-09-300001469367run:NonRecourseDebtMemberus-gaap:SubordinatedDebtMembersrt:MinimumMember2020-09-300001469367srt:MaximumMemberrun:NonRecourseDebtMemberus-gaap:SubordinatedDebtMember2020-09-300001469367run:NonRecourseDebtMemberrun:SecuritizationDebtClassAMember2020-09-300001469367run:NonRecourseDebtMemberrun:SecuritizationDebtClassAMembersrt:MinimumMember2020-09-300001469367srt:MaximumMemberrun:NonRecourseDebtMemberrun:SecuritizationDebtClassAMember2020-09-300001469367run:SecuritizationDebtClassBMemberrun:NonRecourseDebtMember2020-09-300001469367run:NonRecourseDebtMember2020-09-300001469367run:RecourseDebtMemberrun:SyndicatedWorkingCapitalFacilityMember2019-12-310001469367run:RecourseDebtMembersrt:MinimumMemberrun:SyndicatedWorkingCapitalFacilityMember2019-12-310001469367srt:MaximumMemberrun:RecourseDebtMemberrun:SyndicatedWorkingCapitalFacilityMember2019-12-310001469367run:RecourseDebtMember2019-12-310001469367run:NonRecourseDebtMemberrun:SeniorDebtMember2019-12-310001469367run:NonRecourseDebtMembersrt:MinimumMemberrun:SeniorDebtMember2019-12-310001469367srt:MaximumMemberrun:NonRecourseDebtMemberrun:SeniorDebtMember2019-12-310001469367run:NonRecourseDebtMemberus-gaap:SubordinatedDebtMember2019-12-310001469367run:NonRecourseDebtMemberus-gaap:SubordinatedDebtMembersrt:MinimumMember2019-12-310001469367srt:MaximumMemberrun:NonRecourseDebtMemberus-gaap:SubordinatedDebtMember2019-12-310001469367run:NonRecourseDebtMemberrun:SecuritizationDebtClassAMember2019-12-310001469367run:NonRecourseDebtMemberrun:SecuritizationDebtClassAMembersrt:MinimumMember2019-12-310001469367srt:MaximumMemberrun:NonRecourseDebtMemberrun:SecuritizationDebtClassAMember2019-12-310001469367run:SecuritizationDebtClassBMemberrun:NonRecourseDebtMember2019-12-310001469367run:NonRecourseDebtMember2019-12-310001469367run:RecourseDebtMemberus-gaap:LondonInterbankOfferedRateLIBORMemberrun:SyndicatedWorkingCapitalFacilityMember2020-01-012020-09-300001469367us-gaap:BaseRateMemberrun:RecourseDebtMemberrun:SyndicatedWorkingCapitalFacilityMember2020-01-012020-09-300001469367run:RecourseDebtMemberus-gaap:FederalFundsEffectiveSwapRateMemberrun:SyndicatedWorkingCapitalFacilityMember2020-01-012020-09-300001469367run:RecourseDebtMemberrun:SyndicatedWorkingCapitalFacilityMemberrun:LiborFloorRateMember2020-01-012020-09-300001469367run:NonRecourseDebtMemberrun:SeniorSecuredRevolvingLetterOfCreditFacilityMemberrun:AggregationFacilityOctober2024Memberrun:TermLoanDueinOctober2024Member2020-09-300001469367run:NonRecourseDebtMemberrun:TermLoanMemberrun:AggregationFacilityOctober2024Memberrun:TermLoanDueinOctober2024Member2020-09-300001469367us-gaap:LetterOfCreditMemberrun:NonRecourseDebtMemberrun:AggregationFacilityOctober2024Memberrun:TermLoanDueinOctober2024Member2020-09-300001469367run:NonRecourseDebtMemberus-gaap:LondonInterbankOfferedRateLIBORMemberrun:AggregationFacilityOctober2024Memberrun:TermLoanAMember2020-01-012020-09-300001469367us-gaap:BaseRateMemberrun:NonRecourseDebtMemberrun:AggregationFacilityOctober2024Memberrun:TermLoanAMember2020-01-012020-09-300001469367run:NonRecourseDebtMemberrun:TermLoanBMemberrun:AggregationFacilityOctober2024Member2020-09-300001469367run:AggregationFacilityApril2024Memberrun:NonRecourseDebtMemberrun:SeniorSecuredRevolvingLetterOfCreditFacilityMemberrun:TermLoanDueinApril2024Member2020-09-300001469367run:AggregationFacilityApril2024Memberrun:NonRecourseDebtMemberrun:DelayedDrawTermLoanMemberrun:TermLoanDueinApril2024Member2020-09-300001469367us-gaap:LetterOfCreditMemberrun:AggregationFacilityApril2024Memberrun:NonRecourseDebtMemberrun:TermLoanDueinApril2024Member2020-09-300001469367run:AggregationFacilityApril2024Memberrun:NonRecourseDebtMemberus-gaap:LondonInterbankOfferedRateLIBORMemberrun:TermLoanDueinApril2024Member2020-01-012020-09-300001469367us-gaap:BaseRateMemberrun:AggregationFacilityApril2024Memberrun:NonRecourseDebtMemberrun:TermLoanDueinApril2024Member2020-01-012020-09-300001469367run:AggregationFacilityApril2024Memberrun:NonRecourseDebtMemberus-gaap:FederalFundsEffectiveSwapRateMemberrun:TermLoanDueinApril2024Member2020-01-012020-09-300001469367run:AggregationFacilityApril2024Memberrun:NonRecourseDebtMemberrun:LiborFloorRateMemberrun:TermLoanDueinApril2024Member2020-01-012020-09-300001469367run:AggregationFacilityMarch2023Memberus-gaap:LineOfCreditMemberrun:NonRecourseDebtMemberrun:TermLoanDueInMarch2023Member2020-09-300001469367run:AggregationFacilityMarch2023Memberus-gaap:LineOfCreditMemberrun:NonRecourseDebtMemberus-gaap:LondonInterbankOfferedRateLIBORMemberrun:TermLoanDueInMarch2023Member2020-01-012020-09-300001469367run:AggregationFacilityMarch2023Memberus-gaap:LineOfCreditMemberrun:NonRecourseDebtMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-01-012020-09-300001469367run:AggregationFacilityMarch2023Memberus-gaap:LineOfCreditMemberrun:NonRecourseDebtMemberus-gaap:SubordinatedDebtMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-01-012020-09-300001469367run:AggregationFacilityMarch2023Memberrun:NonRecourseDebtMemberus-gaap:SubordinatedDebtMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-01-012020-09-300001469367run:AggregationFacilityMarch2023Memberrun:NonRecourseDebtMemberus-gaap:SubordinatedDebtMembersrt:MinimumMember2020-09-300001469367run:AggregationFacilityMarch2023Membersrt:MaximumMemberrun:NonRecourseDebtMemberus-gaap:SubordinatedDebtMember2020-09-300001469367run:NonRecourseDebtMemberrun:BankTermLoanDueAprilTwentyTwentyTwoMemberrun:SubsidiaryMember2020-09-300001469367run:NonRecourseDebtMemberrun:BankTermLoanDueSeptember2022Memberrun:SubsidiaryMember2020-09-300001469367run:NonRecourseDebtMemberus-gaap:LondonInterbankOfferedRateLIBORMemberrun:BankTermLoanDueSeptember2022Memberrun:SubsidiaryMember2020-09-300001469367run:NonRecourseDebtMemberrun:BankTermLoanDueJanuary2030Memberrun:SubsidiaryMember2020-09-300001469367run:NonRecourseDebtMemberrun:BankTermLoanDueJuly2030Memberrun:SubsidiaryMember2020-09-300001469367run:NonRecourseDebtMemberrun:BankTermLoanDueJuly2030Membersrt:MinimumMemberrun:SubsidiaryMember2020-09-300001469367srt:MaximumMemberrun:NonRecourseDebtMemberrun:BankTermLoanDueJuly2030Memberrun:SubsidiaryMember2020-09-300001469367run:NonRecourseDebtMemberrun:BankTermLoanDueJuly2027Memberrun:SubsidiaryMember2020-09-300001469367run:BankTermLoanDueNovember2025Memberrun:NonRecourseDebtMemberrun:SubsidiaryMember2020-09-300001469367run:BankTermLoanDueNovember2025Memberrun:NonRecourseDebtMemberrun:LiborFloorRateMemberrun:SubsidiaryMember2020-01-012020-09-300001469367run:BankTermLoanDueNovember2025Memberrun:NonRecourseDebtMemberus-gaap:LondonInterbankOfferedRateLIBORMemberrun:SubsidiaryMember2020-01-012020-09-300001469367run:BankLoanDueMarch2024Memberrun:NonRecourseDebtMemberrun:SeniorSecuredRevolvingLetterOfCreditFacilityMember2020-09-30run:revolving_facilitiy0001469367run:BankLoanDueMarch2024Memberrun:NonRecourseDebtMemberus-gaap:LondonInterbankOfferedRateLIBORMemberrun:SeniorSecuredRevolvingLetterOfCreditFacilityMember2020-01-012020-09-300001469367run:NonRecourseDebtMemberrun:TermLoanMemberus-gaap:LondonInterbankOfferedRateLIBORMemberrun:AggregationFacilityMember2020-01-012020-09-300001469367run:BankLoanDueAugust2027Memberrun:NonRecourseDebtMemberrun:SeniorSecuredRevolvingLetterOfCreditFacilityMember2020-09-300001469367run:BankTermLoanDueNovember2030Memberrun:NonRecourseDebtMemberrun:SeniorSecuredRevolvingLetterOfCreditFacilityMember2020-09-300001469367us-gaap:LetterOfCreditMemberrun:BankTermLoanDueNovember2030Memberrun:NonRecourseDebtMember2020-09-300001469367us-gaap:LetterOfCreditMemberrun:NonRecourseDebtMemberus-gaap:LondonInterbankOfferedRateLIBORMemberrun:TermLoanDueInAugust2024Member2020-01-012020-09-300001469367us-gaap:LineOfCreditMemberrun:NonRecourseDebtMemberus-gaap:LondonInterbankOfferedRateLIBORMemberrun:TermLoanDueInAugust2024Member2020-01-012020-09-300001469367us-gaap:BaseRateMemberus-gaap:LineOfCreditMemberrun:NonRecourseDebtMemberrun:TermLoanDueInAugust2024Member2020-01-012020-09-300001469367us-gaap:BaseRateMemberus-gaap:LineOfCreditMemberrun:NonRecourseDebtMember2020-01-012020-09-300001469367run:NonRecourseDebtMemberus-gaap:SubordinatedDebtMemberrun:SubsidiaryMember2020-09-300001469367run:SubsidiaryOneMemberrun:NonRecourseDebtMemberrun:SecuritizationDebtMember2020-09-300001469367run:SubsidiaryOneMemberrun:NonRecourseDebtMemberrun:SecuritizationDebtMember2019-12-310001469367run:SubsidiaryOneMemberrun:NonRecourseDebtMemberrun:SecuritizationDebtMember2020-01-012020-09-300001469367run:SubsidiaryTwoMemberrun:NonRecourseDebtMemberrun:SecuritizationDebtMember2020-09-300001469367run:SubsidiaryTwoMemberrun:NonRecourseDebtMemberrun:SecuritizationDebtMember2020-01-012020-09-300001469367run:SubsidiaryThreeMemberrun:NonRecourseDebtMemberrun:SecuritizationDebtMember2020-09-300001469367run:SubsidiaryThreeMemberrun:NonRecourseDebtMemberrun:SecuritizationDebtMember2020-01-012020-09-300001469367run:NonRecourseDebtMemberrun:SecuritizationDebtMemberrun:SubsidiaryFourMember2020-09-300001469367run:NonRecourseDebtMemberrun:SecuritizationDebtMemberrun:SubsidiaryFourMember2020-01-012020-09-300001469367us-gaap:InterestRateSwapMember2020-09-30run:derivative_instrumentrun:Instrument0001469367us-gaap:InterestRateSwapMemberrun:InterestRateSwapContractOneMember2020-09-300001469367run:InterestRateSwapContractOneMemberus-gaap:InterestRateSwapMembersrt:MinimumMember2020-09-300001469367run:InterestRateSwapContractTwoMemberus-gaap:InterestRateSwapMember2020-09-300001469367run:InterestRateSwapContractTwoMemberus-gaap:InterestRateSwapMembersrt:MinimumMember2020-09-300001469367srt:MaximumMemberrun:InterestRateSwapContractTwoMemberus-gaap:InterestRateSwapMember2020-09-300001469367us-gaap:InterestRateSwapMemberrun:InterestRateSwapContractThreeMember2020-09-300001469367us-gaap:InterestRateSwapMembersrt:MinimumMemberrun:InterestRateSwapContractThreeMember2020-09-300001469367srt:MaximumMemberus-gaap:InterestRateSwapMemberrun:InterestRateSwapContractThreeMember2020-09-300001469367us-gaap:InterestRateSwapMemberrun:InterestRateSwapContractFourMember2020-09-300001469367us-gaap:InterestRateSwapMemberrun:InterestRateSwapContractFourMembersrt:MinimumMember2020-09-300001469367srt:MaximumMemberus-gaap:InterestRateSwapMemberrun:InterestRateSwapContractFourMember2020-09-300001469367us-gaap:InterestRateSwapMemberrun:Interestrateswap10312031Member2020-09-300001469367us-gaap:InterestRateSwapMemberrun:Interestrateswap10312031Membersrt:MinimumMember2020-09-300001469367srt:MaximumMemberus-gaap:InterestRateSwapMemberrun:Interestrateswap10312031Member2020-09-300001469367run:Interestrateswap10312031Member2020-09-300001469367us-gaap:InterestRateSwapMemberrun:InterestRateSwapContractFiveMember2020-09-300001469367us-gaap:InterestRateSwapMemberrun:InterestRateSwapContractFiveMembersrt:MinimumMember2020-09-300001469367srt:MaximumMemberus-gaap:InterestRateSwapMemberrun:InterestRateSwapContractFiveMember2020-09-300001469367us-gaap:InterestRateSwapMemberrun:InterestRateSwapContractSixMember2020-09-300001469367us-gaap:InterestRateSwapMembersrt:MinimumMemberrun:InterestRateSwapContractSixMember2020-09-300001469367srt:MaximumMemberus-gaap:InterestRateSwapMemberrun:InterestRateSwapContractSixMember2020-09-300001469367us-gaap:InterestRateSwapMemberrun:InterestRateSwapContractSevenMember2020-09-300001469367us-gaap:InterestRateSwapMembersrt:MinimumMemberrun:InterestRateSwapContractSevenMember2020-09-300001469367srt:MaximumMemberus-gaap:InterestRateSwapMemberrun:InterestRateSwapContractSevenMember2020-09-300001469367us-gaap:InterestRateSwapMemberrun:InterestRateSwapContractEightMember2020-09-300001469367run:InterestRateSwapContractNineMemberus-gaap:InterestRateSwapMember2020-09-300001469367run:InterestRateSwapContractNineMemberus-gaap:InterestRateSwapMembersrt:MinimumMember2020-09-300001469367run:InterestRateSwapContractNineMembersrt:MaximumMemberus-gaap:InterestRateSwapMember2020-09-300001469367us-gaap:InterestRateSwapMemberrun:InterestRateSwapContractTenMember2020-09-300001469367us-gaap:InterestRateSwapMemberrun:InterestRateSwapContractTenMembersrt:MinimumMember2020-09-300001469367srt:MaximumMemberus-gaap:InterestRateSwapMemberrun:InterestRateSwapContractTenMember2020-09-300001469367us-gaap:AssetsLeasedToOthersMembersrt:MinimumMember2020-09-300001469367srt:MaximumMemberus-gaap:AssetsLeasedToOthersMember2020-09-30run:fund0001469367us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2020-01-012020-09-300001469367us-gaap:RestrictedStockUnitsRSUMember2019-12-310001469367us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-09-300001469367us-gaap:RestrictedStockUnitsRSUMember2020-09-300001469367run:EmployeeStockPurchasePlanMember2015-01-012015-12-31run:purchase_period0001469367run:EmployeeStockPurchasePlanMember2015-12-310001469367run:CostOfOperatingLeasesAndIncentivesMember2020-07-012020-09-300001469367run:CostOfOperatingLeasesAndIncentivesMember2019-07-012019-09-300001469367run:CostOfOperatingLeasesAndIncentivesMember2020-01-012020-09-300001469367run:CostOfOperatingLeasesAndIncentivesMember2019-01-012019-09-300001469367run:CostOfSolarEnergySystemsAndProductSalesMember2020-07-012020-09-300001469367run:CostOfSolarEnergySystemsAndProductSalesMember2019-07-012019-09-300001469367run:CostOfSolarEnergySystemsAndProductSalesMember2020-01-012020-09-300001469367run:CostOfSolarEnergySystemsAndProductSalesMember2019-01-012019-09-300001469367us-gaap:SellingAndMarketingExpenseMember2020-07-012020-09-300001469367us-gaap:SellingAndMarketingExpenseMember2019-07-012019-09-300001469367us-gaap:SellingAndMarketingExpenseMember2020-01-012020-09-300001469367us-gaap:SellingAndMarketingExpenseMember2019-01-012019-09-300001469367us-gaap:ResearchAndDevelopmentExpenseMember2020-07-012020-09-300001469367us-gaap:ResearchAndDevelopmentExpenseMember2019-07-012019-09-300001469367us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-09-300001469367us-gaap:ResearchAndDevelopmentExpenseMember2019-01-012019-09-300001469367us-gaap:GeneralAndAdministrativeExpenseMember2020-07-012020-09-300001469367us-gaap:GeneralAndAdministrativeExpenseMember2019-07-012019-09-300001469367us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-09-300001469367us-gaap:GeneralAndAdministrativeExpenseMember2019-01-012019-09-300001469367us-gaap:LetterOfCreditMembersrt:MinimumMember2020-01-012020-09-300001469367us-gaap:LetterOfCreditMembersrt:MaximumMember2020-01-012020-09-300001469367us-gaap:LetterOfCreditMembersrt:MinimumMember2019-01-012019-12-310001469367us-gaap:LetterOfCreditMembersrt:MaximumMember2019-01-012019-12-310001469367us-gaap:SettledLitigationMember2020-06-300001469367us-gaap:EmployeeStockOptionMember2020-07-012020-09-300001469367us-gaap:EmployeeStockOptionMember2019-07-012019-09-300001469367us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001469367us-gaap:EmployeeStockOptionMember2019-01-012019-09-300001469367us-gaap:RestrictedStockUnitsRSUMember2020-07-012020-09-300001469367us-gaap:RestrictedStockUnitsRSUMember2019-07-012019-09-300001469367us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-09-300001469367us-gaap:RestrictedStockUnitsRSUMember2019-01-012019-09-300001469367run:VivintSolarMemberus-gaap:SubsequentEventMember2020-10-082020-10-080001469367run:OmniEnergyLLCMember2019-07-012019-07-310001469367run:OmniEnergyLLCMember2019-07-310001469367run:OmniEnergyLLCMemberus-gaap:CustomerRelationshipsMember2019-07-310001469367run:OmniEnergyLLCMemberus-gaap:CustomerRelationshipsMember2019-07-012019-07-310001469367run:VivintSolarMemberus-gaap:SubsequentEventMember2020-10-080001469367us-gaap:CommonStockMemberrun:VivintSolarMemberus-gaap:SubsequentEventMember2020-10-082020-10-080001469367run:VivintSolarMemberus-gaap:SubsequentEventMember2020-10-08



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 quarterly period ended September 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 001-37511 
Sunrun Inc.
(Exact name of registrant as specified in its charter)

Delaware26-2841711
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)

225 Bush Street, Suite 1400
San Francisco, California 94104
(Address of principal executive offices and Zip Code)

(415) 580-6900
(Registrant’s telephone number, including area code) 


Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par value per shareRUNNasdaq Global Select Market

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      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      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 definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
     
Non-accelerated filerSmaller 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  
As of November 3, 2020, the number of shares of the registrant’s common stock outstanding was 197,530,444.




Table of Contents

Page
Item 1
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.

1



Sunrun Inc.
Consolidated Balance Sheets
(In Thousands, Except Share Par Values)
(Unaudited)
September 30, 2020December 31, 2019
Assets
Current assets:
Cash$276,052 $269,577 
Restricted cash105,314 93,504 
Accounts receivable (net of allowances for doubtful accounts of $2,316 and $3,151 as of September 30, 2020 and December 31, 2019, respectively)
70,654 77,728 
State tax credits receivable 6,466 
Inventories177,967 260,571 
Prepaid expenses and other current assets15,752 25,984 
Total current assets645,739 733,830 
Restricted cash148 148 
Solar energy systems, net4,979,322 4,492,615 
Property and equipment, net44,567 56,708 
Intangible assets, net15,725 19,543 
Goodwill95,094 95,094 
Other assets526,239 408,403 
Total assets (1)
$6,306,834 $5,806,341 
Liabilities and total equity
Current liabilities:
Accounts payable$151,804 $223,356 
Distributions payable to noncontrolling interests and redeemable noncontrolling interests
18,161 16,062 
Accrued expenses and other liabilities196,444 148,497 
Deferred revenue, current portion79,378 77,643 
Deferred grants, current portion8,268 8,093 
Finance lease obligations, current portion7,541 10,064 
Non-recourse debt, current portion122,812 35,348 
Pass-through financing obligation, current portion11,832 11,031 
Total current liabilities596,240 530,094 
Deferred revenue, net of current portion665,583 651,856 
Deferred grants, net of current portion211,668 218,568 
Finance lease obligations, net of current portion7,689 12,895 
Recourse debt224,910 239,485 
Non-recourse debt, net of current portion2,137,154 1,980,107 
Pass-through financing obligation, net of current portion324,576 327,974 
Other liabilities199,320 141,401 
Deferred tax liabilities11,093 65,964 
Total liabilities (1)
4,378,233 4,168,344 
Commitments and contingencies (Note 15)
Redeemable noncontrolling interests508,061 306,565 
Stockholders’ equity:
Preferred stock, $0.0001 par value—authorized, 200,000,000 shares as of September 30, 2020 and December 31, 2019; no shares issued and outstanding as of September 30, 2020 and December 31, 2019
  
Common stock, $0.0001 par value—authorized, 2,000,000 shares as of September 30, 2020 and December 31, 2019; issued and outstanding, 127,552 and 118,451 shares as of September 30, 2020 and December 31, 2019, respectively
13 12 
Additional paid-in capital910,388 766,006 
Accumulated other comprehensive loss(123,020)(52,753)
Retained earnings246,164 251,466 
Total stockholders’ equity1,033,545 964,731 
Noncontrolling interests386,995 366,701 
Total equity1,420,540 1,331,432 
Total liabilities, redeemable noncontrolling interests and total equity$6,306,834 $5,806,341 


2







1)The Company’s consolidated assets as of September 30, 2020 and December 31, 2019 include $4,136,047 and $3,521,202, respectively, in assets of variable interest entities (“VIEs”) that can only be used to settle obligations of the VIEs. These assets include solar energy systems, net, as of September 30, 2020 and December 31, 2019 of $3,773,324 and $3,259,712, respectively; cash as of September 30, 2020 and December 31, 2019 of $155,201 and $133,362, respectively; restricted cash as of September 30, 2020 and December 31, 2019 of $14,495 and $2,746, respectively; accounts receivable, net as of September 30, 2020 and December 31, 2019 of $27,471 and $21,956, respectively; inventories as of September 30, 2020 and December 31, 2019 of $51,894 and 15,721, respectively; prepaid expenses and other current assets as of September 30, 2020 and December 31, 2019 of $1,583 and $554, respectively; and other assets as of September 30, 2020 and December 31, 2019 of $112,079 and $87,151, respectively. The Company’s consolidated liabilities as of September 30, 2020 and December 31, 2019 include $875,866 and $774,564, respectively, in liabilities of VIEs whose creditors have no recourse to the Company. These liabilities include accounts payable as of September 30, 2020 and December 31, 2019 of $25,535 and $11,531, respectively; distributions payable to noncontrolling interests and redeemable noncontrolling interests as of September 30, 2020 and December 31, 2019 of $17,776 and $16,012, respectively; accrued expenses and other current liabilities as of September 30, 2020 and December 31, 2019 of $15,053 and $10,740, respectively; deferred revenue as of September 30, 2020 and December 31, 2019 of $514,564 and $482,138, respectively; deferred grants as of September 30, 2020 and December 31, 2019 of $27,231 and $28,034, respectively; non-recourse debt as of September 30, 2020 and December 31, 2019 of $240,531 and $206,476, respectively; and other liabilities as of September 30, 2020 and December 31, 2019 of $35,176 and $19,633, respectively.
The accompanying notes are an integral part of these consolidated financial statements.
3


Sunrun Inc.
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Revenue:
Customer agreements and incentives$114,485 $96,249 $319,704 $288,538 
Solar energy systems and product sales95,275 119,293 282,081 326,103 
Total revenue209,760 215,542 601,785 614,641 
Operating expenses:
Cost of customer agreements and incentives77,350 67,359 239,049 207,446 
Cost of solar energy systems and product sales
75,679 92,031 231,023 256,178 
Sales and marketing70,720 77,478 210,691 203,469 
Research and development5,205 6,435 14,222 18,464 
General and administrative41,829 31,059 111,659 93,166 
Amortization of intangible assets1,167 1,524 3,817 3,231 
Total operating expenses271,950 275,886 810,461 781,954 
Loss from operations(62,190)(60,344)(208,676)(167,313)
Interest expense, net51,368 43,911 152,013 127,560 
Other (income) expenses, net(864)3,110 (766)9,254 
Loss before income taxes(112,694)(107,365)(359,923)(304,127)
Income tax (benefit) expense(27,293)5,169 (30,424)(102)
Net loss(85,401)(112,534)(329,499)(304,025)
Net loss attributable to noncontrolling interests and redeemable noncontrolling interests
(122,848)(141,524)(325,425)(317,860)
Net income (loss) attributable to common stockholders$37,447 $28,990 $(4,074)$13,835 
Net income (loss) per share attributable to common stockholders
Basic$0.30 $0.25 $(0.03)$0.12 
Diluted$0.28 $0.23 $(0.03)$0.11 
Weighted average shares used to compute net income (loss) per share attributable to common stockholders
Basic125,003 117,652 121,813 115,790 
Diluted134,548 125,151 121,813 123,645 

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

4


Sunrun Inc.
Consolidated Statements of Comprehensive Income (Loss)
(In Thousands)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Net income (loss) attributable to common stockholders$37,447 $28,990 $(4,074)$13,835 
Other comprehensive income (loss):
Unrealized loss on derivatives, net of income taxes(335)(25,178)(75,510)(68,301)
Interest expense (income) on derivatives recognized into earnings, net of income taxes4,579 212 5,243 (755)
Other comprehensive income (loss)4,244 (24,966)(70,267)(69,056)
Comprehensive income (loss)$41,691 $4,024 $(74,341)$(55,221)

5


Sunrun Inc.
Consolidated Statements of Redeemable Noncontrolling Interests and Equity
Three Months Ended September 30, 2020 and 2019
(In Thousands)
(Unaudited)

Three Months Ended September 30, 2020
Redeemable
Noncontrolling
Interests
Common StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Stockholders'
Equity
Noncontrolling
Interests
Total
Equity
SharesAmount
Balance at June 30, 2020$450,682 122,307 $12 $806,702 $(127,264)$208,717 $888,167 $353,338 $1,241,505 
Exercise of stock options
— 2,791 — 20,469 — — 20,469 — 20,469 
Issuance of restricted stock units
— 379 1 — — — 1 — 1 
Stock-based compensation
— — — 8,217 — — 8,217 — 8,217 
Contributions from noncontrolling interests and redeemable noncontrolling interests
151,906 — — — — — — 85,000 85,000 
Distributions to noncontrolling interests and redeemable noncontrolling interests
(10,082)— — — — — — (12,940)(12,940)
Net (loss) income(84,445)— — — — 37,447 37,447 (38,403)(956)
Shares issued in connection with a subscription agreement— 2,075 — 75,000 — — 75,000 — 75,000 
Other comprehensive income, net of taxes— — — — 4,244 — 4,244 — 4,244 
Balance at September 30, 2020
$508,061 127,552 $13 $910,388 $(123,020)$246,164 $1,033,545 $386,995 $1,420,540 

Three Months Ended September 30, 2019
Redeemable
Noncontrolling
Interests
Common StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Stockholders'
Equity
Noncontrolling
Interests
Total
Equity
SharesAmount
Balance at June 30, 2019$278,539 117,199 $11 $748,512 $(47,954)$214,976 $915,545 $293,542 $1,209,087 
Exercise of stock options
— 507 — 2,766 — — 2,766 — 2,766 
Issuance of restricted stock units, net of tax withholdings
— 218 1 (2,361)— — (2,360)(2,360)
Stock-based compensation
— — — 6,854 — — 6,854 6,854 
Contributions from noncontrolling interests and redeemable noncontrolling interests
196,182 — — — — — — 45,002 45,002 
Distributions to noncontrolling interests and redeemable noncontrolling interests
(3,466)— — — — — — (14,184)(14,184)
Net (loss) income(134,669)— — — — 28,990 28,990 (6,855)22,135 
Acquisition of noncontrolling interest
— — — — — — — 1,268 1,268 
Other comprehensive loss, net of taxes
— — — — (24,966)— (24,966)— (24,966)
Balance at September 30, 2019
$336,586 117,924 $12 $755,771 $(72,920)$243,966 $926,829 $318,773 $1,245,602 


6


Sunrun Inc.
Consolidated Statements of Redeemable Noncontrolling Interests and Equity
Nine Months Ended September 30, 2020 and 2019
(In Thousands)
(Unaudited)

Nine Months Ended September 30, 2020
Redeemable
Noncontrolling
Interests
Common StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Stockholders'
Equity
Noncontrolling
Interests
Total
Equity
SharesAmount
Balance at December 31, 2019
$306,565 118,451 $12 $766,006 $(52,753)$251,466 $964,731 $366,701 $1,331,432 
Cumulative effect of adoption of new ASU (No. 2016-13)
— — — — — (1,228)(1,228)— (1,228)
Exercise of stock options
— 4,188 — 29,127 — — 29,127 — 29,127 
Issuance of restricted stock units, net of tax withholdings
— 2,509 1 (1,026)— — (1,025)— (1,025)
Shares issued in connection with the Employee Stock Purchase Plan
— 329 — 3,737 — — 3,737 — 3,737 
Stock-based compensation
— — — 37,544 — — 37,544 — 37,544 
Contributions from noncontrolling interests and redeemable noncontrolling interests
471,858 — — — — — — 139,997 139,997 
Distributions to noncontrolling interests and redeemable noncontrolling interests
(25,179)— — — — — — (39,461)(39,461)
Net loss
(245,183)— — — — (4,074)(4,074)(80,242)(84,316)
Shares issued in connection with a subscription agreement— 2,075 — 75,000 — — 75,000 — 75,000 
Other comprehensive loss, net of taxes
— — — — (70,267)— (70,267)— (70,267)
Balance at September 30, 2020
$508,061 127,552 $13 $910,388 $(123,020)$246,164 $1,033,545 $386,995 $1,420,540 


Nine Months Ended September 30, 2019
Redeemable
Noncontrolling
Interests
Common StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Stockholders'
Equity
Noncontrolling
Interests
Total
Equity
SharesAmount
Balance at December 31, 2018
$126,302 113,149 $11 $722,429 $(3,124)$229,391 $948,707 $334,075 $1,282,782 
Cumulative effect of adoption of new ASU (No. 2018-02)
— — — — (740)740 — —  
Exercise of stock options
— 3,288 — 17,982 — — 17,982 — 17,982 
Issuance of restricted stock units, net of tax withholdings
— 901 1 (8,534)— — (8,533)— (8,533)
Shares issued in connection with the Employee Stock Purchase Plan
— 586 — 3,397 — — 3,397 — 3,397 
Stock-based compensation
— — — 19,420 — — 19,420 — 19,420 
Contributions from noncontrolling interests and redeemable noncontrolling interests
397,956 — — — — — — 173,539 173,539 
Distributions to noncontrolling interests and redeemable noncontrolling interests
(10,144)— — — — — — (43,711)(43,711)
Net (loss) income(177,528)— — — — 13,835 13,835 (140,332)(126,497)
Acquisition of noncontrolling interest
— — — 1,077 — — 1,077 (4,798)(3,721)
Other comprehensive loss, net of taxes
— — — — (69,056)— (69,056)— (69,056)
Balance at September 30, 2019
$336,586 117,924 $12 $755,771 $(72,920)$243,966 $926,829 $318,773 $1,245,602 

7


Sunrun Inc.
Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
Nine Months Ended September 30,
20202019
Operating activities:
Net loss$(329,499)$(304,025)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization, net of amortization of deferred grants156,257 138,620 
Deferred income taxes(30,424)(102)
Stock-based compensation expense37,544 19,420 
Interest on pass-through financing obligations17,480 18,358 
Reduction in pass-through financing obligations(28,907)(29,408)
Other noncash items31,247 16,500 
Changes in operating assets and liabilities:
Accounts receivable2,727 (11,043)
Inventories82,604 (30,310)
Prepaid and other assets(37,958)(67,329)
Accounts payable(57,513)6,744 
Accrued expenses and other liabilities(25,964)14,531 
Deferred revenue15,647 121,936 
Net cash used in operating activities(166,759)(106,108)
Investing activities:
Payments for the costs of solar energy systems(619,012)(594,137)
Business acquisition (2,722)
Purchase of equity method investment(65,356) 
Purchases of property and equipment, net(2,384)(21,184)
Net cash used in investing activities(686,752)(618,043)
Financing activities:
Proceeds from state tax credits, net of recapture6,027 911 
Proceeds from issuance of recourse debt126,950 140,000 
Repayment of recourse debt(141,525)(147,965)
Proceeds from issuance of non-recourse debt442,950 682,050 
Repayment of non-recourse debt(208,371)(388,100)
Payment of debt fees(8,353)(9,759)
Proceeds from pass-through financing and other obligations5,728 7,223 
Early repayment of pass-through financing obligation (7,597)
Payment of finance lease obligations(7,763)(10,449)
Contributions received from noncontrolling interests and redeemable noncontrolling interests611,855 571,495 
Distributions paid to noncontrolling interests and redeemable noncontrolling interests(62,541)(52,893)
Acquisition of noncontrolling interest (4,600)
Net proceeds related to stock-based award activities31,839 12,848 
Proceeds from shares issued in connection with a subscription agreement75,000  
Net cash provided by financing activities871,796 793,164 
Net change in cash and restricted cash18,285 69,013 
Cash and restricted cash, beginning of period363,229 304,399 
Cash and restricted cash, end of period$381,514 $373,412 
Supplemental disclosures of cash flow information
Cash paid for interest$85,503 $69,096 
Cash paid for income taxes$ $ 
Supplemental disclosures of noncash investing and financing activities
Purchases of solar energy systems and property and equipment included in accounts payable and accrued expenses$82,301 $58,914 
Right-of-use assets obtained in exchange for new finance lease liabilities$1,092 $17,390 

8


The accompanying notes are an integral part of these consolidated financial statements.
9


Sunrun Inc.
Notes to Consolidated Financial Statements
(Unaudited)

Note 1. Organization
Sunrun Inc. (“Sunrun” or the “Company”) was originally formed in 2007 as a California limited liability company and was converted into a Delaware corporation in 2008. The Company is engaged in the design, development, installation, sale, ownership and maintenance of residential solar energy systems (“Projects”) in the United States.
Sunrun acquires customers directly and through relationships with various solar and strategic partners (“Partners”). The Projects are constructed either by Sunrun or by Sunrun’s Partners and are owned by the Company. Sunrun’s customers enter into an agreement to utilize the solar energy system (“Customer Agreement”) which typically has an initial term of 20 or 25 years. Sunrun monitors, maintains and insures the Projects. The Company also sells solar energy systems and products, such as panels and racking and solar leads generated to customers.
The Company has formed various subsidiaries (“Funds”) to finance the development of Projects. These Funds, structured as limited liability companies, obtain financing from outside investors and purchase or lease Projects from Sunrun under master purchase or master lease agreements. The Company currently utilizes three legal structures in its investment Funds, which are referred to as: (i) pass-through financing obligations, (ii) partnership-flips and (iii) joint venture (“JV”) inverted leases.


Note 2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the "SEC") regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2019.
Beginning in the quarter ended March 31, 2020, a strain of coronavirus (COVID-19) has spread throughout the world, and at this point, the extent to which the coronavirus may impact operations of the Company is uncertain. The extent of the impact of the coronavirus on the Company's business and operations will depend on several factors, such as the duration, severity, and geographic spread of the outbreak. The Company is monitoring the evolving situation closely and evaluating its potential exposure. The results of the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2020 or other future periods, particularly in light of the uncertain impact COVID-19 could have on the Company's business.
The consolidated financial statements reflect the accounts and operations of the Company and those of its subsidiaries, including Funds, in which the Company has a controlling financial interest. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity. However, a controlling financial interest may also exist in entities, such as variable interest entities (“VIEs”), through arrangements that do not involve controlling voting interests. In accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 810 (“ASC 810”) Consolidation, the Company consolidates any VIE of which it is the primary beneficiary. The primary beneficiary, as defined in ASC 810, is the party that has (1) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb the losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company evaluates its relationships with its VIEs on an ongoing basis to determine whether it continues to be the primary beneficiary. The consolidated financial statements reflect the assets and liabilities of VIEs that are consolidated. All intercompany transactions and balances have been eliminated in consolidation.
10



Use of Estimates
The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company regularly makes estimates and assumptions, including, but not limited to, revenue recognition constraints that result in variable consideration, the discount rate used to adjust the promised amount of consideration for the effects of a significant financing component, the estimates that affect the collectability of accounts receivable, the valuation of inventories, the useful lives of solar energy systems, the useful lives of property and equipment, the valuation and useful lives of intangible assets, the effective interest rate used to amortize pass-through financing obligations, the discount rate uses for operating and financing leases, the fair value of contingent consideration, the valuation of stock-based compensation, the determination of valuation allowances associated with deferred tax assets, the fair value of debt instruments disclosed and the redemption value of redeemable noncontrolling interests. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable. In light of the uncertain impact COVID-19 could have on the Company's business, the Company's estimates may change in the future. Actual results may differ from such estimates.
Segment Information
The Company has one operating segment with one business activity, providing solar energy services and products to customers. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer, who manages operations on a consolidated basis for purposes of allocating resources. When evaluating performance and allocating resources, the CODM reviews financial information presented on a consolidated basis.
Revenue from external customers for each group of similar products and services is as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Customer agreements$102,213 $89,241 $294,991 $253,046 
Incentives12,272 7,008 24,713 35,492 
Customer agreements and incentives114,485 96,249 319,704 288,538 
Solar energy systems52,238 67,230 168,094 192,235 
Products43,037 52,063 113,987 133,868 
Solar energy systems and product sales95,275 119,293 282,081 326,103 
Total revenue$209,760 $215,542 $601,785 $614,641 

Revenue from Customer Agreements includes payments by customers for the use of the system as well as utility and other rebates assigned by the customer to the Company in the Customer Agreement. Revenue from incentives includes revenue from the sale of commercial investment tax credits ("Commercial ITCs") and solar renewable energy credits (“SRECs”).
11


Cash and Restricted Cash
Restricted cash represents amounts related to obligations under certain financing transactions and future replacement of solar energy system components.
The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statement of cash flows. Cash and restricted cash consists of the following (in thousands):
Nine Months Ended September 30,
  20202019
Beginning of period:
   Cash $269,577 $226,625 
   Restricted cash, current and long-term93,652 77,774 
Total$363,229 $304,399 
End of period:
   Cash $276,052 $324,698 
   Restricted cash, current and long-term105,462