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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 29, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission file number 001-34166


spwr-20200329_g1.gif
SunPower Corporation
(Exact Name of Registrant as Specified in Its Charter)

Delaware94-3008969
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
51 Rio RoblesSan JoseCalifornia95134
(Address of Principal Executive Offices)
(Zip Code)

(408) 240-5500
(Registrant's Telephone Number, Including Area Code)

_________________________________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Sections 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  x    No  o

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  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
 x
Non-accelerated filer Smaller reporting company Emerging growth company
        If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   o

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No  x

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of exchange on which registered
Common StockSPWRNASDAQ

The total number of outstanding shares of the registrant’s common stock as of May 1, 2020 was 169,952,323.


2


TABLE OF CONTENTS


2

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

3

SunPower Corporation
Condensed Consolidated Balance Sheets
(In thousands, except share par values)
(unaudited)
 March 29, 2020December 29, 2019
Assets
Current assets:
Cash and cash equivalents  $205,452  $422,955  
Restricted cash and cash equivalents, current portion29,466  26,348  
Restricted short-term marketable securities  6,196  6,187  
Accounts receivable, net1
243,476  226,476  
Contract assets1
102,340  99,426  
Inventories391,800  358,257  
Advances to suppliers, current portion98,452  107,388  
Project assets - plants and land, current portion21,581  12,650  
Prepaid expenses and other current assets104,635  121,244  
Total current assets1,203,398  1,380,931  
Restricted cash and cash equivalents, net of current portion9,364  9,354  
Property, plant and equipment, net312,192  323,726  
Operating lease right-of-use assets60,796  51,258  
Solar power systems leased, net53,375  54,338  
Advances to suppliers, net of current portion13,993  13,993  
Other intangible assets, net5,568  7,466  
Other long-term assets338,838  330,855  
Total assets$1,997,524  $2,171,921  
Liabilities and Equity  
Current liabilities:  
Accounts payable1
$403,180  $441,759  
Accrued liabilities1
165,863  203,890  
Operating lease liabilities, current portion11,424  9,463  
Contract liabilities, current portion1
126,281  138,441  
Short-term debt124,682  104,856  
Total current liabilities831,430  898,409  
Long-term debt98,095  113,827  
Convertible debt1
730,637  820,259  
Operating lease liabilities, net of current portion53,740  46,089  
Contract liabilities, net of current portion1
63,567  67,538  
Other long-term liabilities199,994  204,300  
Total liabilities1,977,463  2,150,422  
Commitments and contingencies (Note 8)
Equity:  
Preferred stock, $0.001 par value; 10,000 shares authorized; none issued and outstanding as of March 29, 2020 and December 29, 2019
    
Common stock, $0.001 par value, 367,500 shares authorized; 182,297 shares issued, and 169,755 shares outstanding as of March 29, 2020; 179,845 shares issued, and 168,121 shares outstanding as of December 29, 2019
170  168  
Additional paid-in capital2,668,704  2,661,819  
Accumulated deficit(2,451,110) (2,449,679) 
Accumulated other comprehensive loss(8,789) (9,512) 
Treasury stock, at cost: 12,542 shares of common stock as of March 29, 2020; 11,724 shares of common stock as of December 29, 2019
(199,543) (192,633) 
Total stockholders' equity9,432  10,163  
Noncontrolling interests in subsidiaries10,629  11,336  
Total equity20,061  21,499  
Total liabilities and equity$1,997,524  $2,171,921  
1We have related-party balances for transactions made with Total S.A. and its affiliates as well as unconsolidated entities in which we have a direct equity investment. These related-party balances are recorded within the "accounts receivable, net," "prepaid expenses and other current assets," "contract assets," "accounts payable," "accrued liabilities," "contract liabilities, current portion," "convertible debt," and "contract liabilities, net of current portion," financial statement line items on our condensed consolidated balance sheets (see Note 2, Note 8, Note 9, and Note 10).



The accompanying notes are an integral part of these condensed consolidated financial statements.
5

SunPower Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
 Three Months Ended
 March 29, 2020March 31, 2019
Revenue:
Solar power systems, components, and other1
$443,933  $341,442  
Residential leasing1,324  3,884  
Solar services3,933  2,899  
449,190  348,225  
Cost of revenue:
Solar power systems, components, and other1
409,017  380,906  
Residential leasing1,296  3,022  
Solar services1,429  1,582  
411,742  385,510  
Gross profit (loss)37,448  (37,285) 
Operating expenses:
Research and development1
15,638  14,993  
Sales, general and administrative65,958  62,857  
Restructuring charges (credits)1,576  (665) 
(Gain) loss on sale and impairment of residential lease assets(274) 9,226  
Gain on business divestiture  (6,114) 
Total operating expenses82,898  80,297  
Operating loss(45,450) (117,582) 
Other income (expense), net:
Interest income404  852  
Interest expense1
(10,537) (16,791) 
Other, net55,069  33,073  
Other income, net44,936  17,134  
Loss before income taxes and equity in earnings of unconsolidated investees(514) (100,448) 
Provision for income taxes(1,869) (5,797) 
Equity in earnings of unconsolidated investees245  1,680  
Net loss(2,138) (104,565) 
Net income attributable to noncontrolling interests and redeemable noncontrolling interests707  14,841  
Net loss attributable to stockholders$(1,431) $(89,724) 




Net loss per share attributable to stockholders:
Basic(0.01) $(0.63) 
Diluted(0.01) $(0.63) 
Weighted-average shares:
Basic168,822  141,720  
Diluted168,822  141,720  
1We have related-party transactions with Total S.A. and its affiliates as well as unconsolidated entities in which we have a direct equity investment. These related-party transactions are recorded within the "revenue: solar power systems, components, and other," "cost of revenue: solar power systems, components, and other," "operating expenses: research and development," and "other income (expense), net: interest expense" financial statement line items in our condensed consolidated statements of operations (see Note 2 and Note 9).


The accompanying notes are an integral part of these condensed consolidated financial statements.
7

SunPower Corporation
Condensed Consolidated Statements of Comprehensive Loss
(In thousands)
(unaudited)

 Three Months Ended
March 29, 2020March 31, 2019
Net loss$(2,138) $(104,565) 
Components of other comprehensive income (loss):
Translation adjustment(775) (21) 
Net change in derivatives (Note 11)1,688  185  
Net loss on long-term pension liability obligation(49)   
Income taxes(141) (65) 
Total other comprehensive income723  99  
Total comprehensive loss(1,415) (104,466) 
Comprehensive loss attributable to noncontrolling interests and redeemable noncontrolling interests707  14,841  
Comprehensive loss attributable to stockholders$(708) $(89,625) 


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

8

SunPower Corporation
Condensed Consolidated Statements of Equity (Deficit)
(In thousands)
Three Months Ended March 29, 2020
 Common Stock     
 SharesValueAdditional
Paid-in
Capital
Treasury
Stock
Accumulated Other
Comprehensive Loss
Accumulated DeficitTotal
Stockholders’
Equity
Noncontrolling Interests in SubsidiariesTotal Equity (Deficit)
Balances at December 29, 2019168,121  $168  $2,661,819  $(192,633) $(9,512) $(2,449,679) $10,163  $11,336  $21,499  
Net loss—  —  —  —  —  (1,431) (1,431) (707) (2,138) 
Other comprehensive income—  —  —  —  723  —  723  —  723  
Issuance of restricted stock to employees, net of cancellations2,452  3  —  —  —  —  3  —  3  
Stock-based compensation expense—  —  6,885  —  —  —  6,885  —  6,885  
Purchases of treasury stock(818) (1) —  (6,910) —  —  (6,911) —  (6,911) 
Balances at March 29, 2020169,755  $170  $2,668,704  $(199,543) $(8,789) $(2,451,110) $9,432  $10,629  $20,061  


Three Months Ended March 31, 2019
 Common Stock     
 SharesValueAdditional
Paid-in
Capital
Treasury
Stock
Accumulated Other
Comprehensive Loss
Accumulated DeficitTotal
Stockholders’
Equity (Deficit)
Noncontrolling Interests in SubsidiariesTotal Equity (Deficit)
Balances at December 30, 2018141,178  $141  $2,463,370  $(187,069) $(4,150) $(2,480,988) $(208,696) $58,810  $(149,886) 
Net loss—  —  —  —  —  (89,724) (89,724) (14,841) (104,565) 
Cumulative-effect upon adoption of ASC 842—  —  —  —  —  9,151  9,151  —  9,151  
Other comprehensive income—  —  —  —  99  —  99  —  99  
Issuance of restricted stock to employees, net of cancellations1,848  2  —  —  —  —  2  —  2  
Stock-based compensation expense—  —  6,628  —  —  —  6,628  —  6,628  
Contributions from noncontrolling interests—  —  —  —  —  —  —  20,987  20,987  
Purchases of treasury stock(633) (1) —  (3,871) —  —  (3,872) —  (3,872) 
Balances at March 31, 2019142,393  $142  $2,469,998  $(190,940) $(4,051) $(2,561,561) $(286,412) $64,956  $(221,456) 


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

SunPower Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited) 

Three Months Ended
 March 29, 2020March 31, 2019
Cash flows from operating activities:
Net loss(2,138) (104,565) 
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization16,892  24,190  
Stock-based compensation6,867  5,666  
Non-cash interest expense1,910  2,415  
Equity in earnings of unconsolidated investees(245) (1,680) 
Gain on equity investments(49,152) (33,000) 
Gain on retirement of convertible debt(2,956)   
Gain on business divestiture  (6,114) 
Deferred income taxes(349) 2,048  
Impairment of residential lease assets289  9,226  
Changes in operating assets and liabilities:
Accounts receivable(17,880) 12,196  
Contract assets295  1,712  
Inventories(43,061) (41,718) 
Project assets(8,881) 776  
Prepaid expenses and other assets18,635  11,727  
Operating lease right-of-use assets2,923  2,603  
Long-term financing receivables, net   (1,611) 
Advances to suppliers8,936  13,055  
Accounts payable and other accrued liabilities(92,599) (28,819) 
Contract liabilities(16,130) (14,578) 
Operating lease liabilities(2,849) (2,559) 
Net cash used in operating activities(179,493) (149,030) 
Cash flows from investing activities:
Purchases of property, plant and equipment(6,213) (6,548) 
Cash paid for solar power systems(610) (27,600) 
Proceeds from business divestiture  9,677  
Proceeds from sale of equity investment and partial return of capital by an unconsolidated investee46,149    
Net cash provided by (used in) investing activities39,326  (24,471) 
Cash flows from financing activities:
Proceeds from bank loans and other debt76,544  67,979  
Repayment of bank loans and other debt(65,730) (58,372) 
Proceeds from issuance of non-recourse residential financing, net of issuance costs  22,255  
Contributions from noncontrolling interests and redeemable noncontrolling interests attributable to residential projects  20,987  
Proceeds from issuance of non-recourse power plant and commercial financing, net of issuance costs9,754    
Cash paid for repurchase of convertible debt(87,141)   
Settlement of contingent consideration arrangement, net of cash received423  (2,448) 
Equity offering costs paid(928)   
Purchases of stock for tax withholding obligations on vested restricted stock(6,914) (3,872) 
Net cash provided by (used in) financing activities(73,992) 46,529  
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents(216) 112  
Net decrease in cash, cash equivalents, restricted cash and restricted cash equivalents(214,375) (126,860) 
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period1
458,657  363,763  
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period1
$244,282  $236,903  
Non-cash transactions:
Costs of solar power systems sourced from existing inventory $  $16,406  
Costs of solar power systems funded by liabilities $1,184  $4,553  
Property, plant and equipment acquisitions funded by liabilities$2,385  $10,792  
Contractual obligations satisfied by inventory$975  $  
Right-of-use assets obtained in exchange of lease obligations2
$12,461  $81,525  
Aged supplier financing balances reclassified from accounts payable to short-term debt$5,000  $  
1"Cash, cash equivalents, restricted cash and restricted cash equivalents" balance consisted of "cash and cash equivalents", "restricted cash and cash equivalents, current portion" and "restricted cash and cash equivalents, net of current portion" financial statement line items on the condensed consolidated balance sheets for the respective periods.

2Amounts for the three months ended March 31, 2019 include the transition adjustment for the adoption of ASC 842 and new Right-of-Use ("ROU") asset additions.


The accompanying notes are an integral part of these condensed consolidated financial statements.
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Notes to the Condensed Consolidated Financial Statements

Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

SunPower Corporation (together with its subsidiaries, "SunPower," "we," "us," and "our") is a leading global energy company that delivers complete solar solutions to residential and commercial customers worldwide through an array of hardware, software, and financing options and through solar power solutions, operations and maintenance ("O&M") services, and "Smart Energy" solutions. SunPower's Smart Energy initiative is designed to add layers of intelligent controls to homes, buildings and grids - all personalized through easy-to-use customer interfaces. Of all the solar cells commercially available to the mass market, we believe our solar cells have the highest solar power conversion efficiency, a measurement of the amount of sunlight converted by the solar cell into electricity. SunPower is a majority-owned subsidiary of Total Solar INTL SAS ("Total", formerly Total Energies Nouvelles Activités USA) and Total Gaz Electricité Holdings France SAS (“Total Gaz”), each a subsidiary of Total S.A. ("Total S.A.") (see "Note 2. Transactions with Total and Total S.A").

Liquidity

The global spread of the coronavirus ("COVID-19") has created significant uncertainty and economic disruptions worldwide. In our response to the COVID-19 pandemic, we have instituted certain measures, including requirements to work remotely for the majority of our workforce, travel restrictions and the idling of our factories in France, Malaysia, Mexico, the Philippines, and the U.S consistent with actions taken or recommended by governmental authorities. In addition, we have implemented several mitigating actions to prudently manage our business during the current industry uncertainty relating to the COVID-19 pandemic. These actions include reducing management salaries, freezing all hiring and merit increases, reducing capital expenditures and discretionary spending, and temporarily moving most of our employees to a four-day work week in recognition of reduced demand and workloads due to the pandemic. We also continue to focus on improving our overall operating performance and liquidity, including managing cash flow and working capital.

Despite the challenging and volatile economic conditions, we believe that our total cash and cash equivalents will be sufficient to meet our obligations over the next 12 months from the date of issuance of our financial statements. While we have not drawn on it, we have the ability to enhance our available cash by borrowing up to $55.0 million under our Green Revolving Credit Agreement ("2019 Revolver"). See Note 10. Debt and Credit Sources. In addition, we have historically been successful in our ability to divest certain investments and non-core assets, secure other sources of financing, such as accessing the capital market, and implement other cost reduction initiatives such as restructuring, to satisfy our liquidity needs; however, our access to these sources could be materially and adversely impacted and we may not be able to receive terms as favorable as we would ordinarily expect to receive.

Although we have historically been able to generate liquidity, we cannot predict, with certainty, the outcome of our actions to generate liquidity as planned. Additionally, we are uncertain of the full extent to which the COVID-19 pandemic will impact our business, operations and financial results over time.

Basis of Presentation and Preparation
        
        Principles of Consolidation

        The accompanying condensed consolidated financial statements include the accounts of SunPower and our wholly-owned subsidiaries, and have been prepared by us in accordance with generally accepted accounting principles in the United States ("United States" or "U.S.," and such accounting principles, "U.S. GAAP") for interim financial information, and include the accounts of SunPower, all of our subsidiaries and special purpose entities, as appropriate under U.S. GAAP. All intercompany transactions and balances have been eliminated on consolidation. The financial information included herein is unaudited, and reflects all adjustments which are, in the opinion of our management, of a normal recurring nature and necessary for a fair statement of the results for the periods presented. The December 29, 2019 consolidated balance sheet data was derived from SunPower’s audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 29, 2019, as filed with the Securities and Exchange Commission ("SEC") on February 18, 2020 but does not include all disclosures required by U.S. GAAP. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in SunPower's Annual Report on Form 10-K for the fiscal year ended December 29, 2019. The operating results for the three months ended March 29, 2020 are not necessarily indicative of the results that may be expected for fiscal year 2020, or for any other future period.
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        We have a 52-to-53-week fiscal year that ends on the Sunday closest to December 31. Accordingly, every fifth or sixth year will be a 53-week fiscal year. The current fiscal year, fiscal 2020, is a 53-week fiscal year, while fiscal year 2019 was a 52-week fiscal year. The first quarter of fiscal 2020 ended on March 29, 2020, while the first quarter of fiscal 2019 ended on March 31, 2019.
Management Estimates

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Significant estimates in these condensed consolidated financial statements include revenue recognition, specifically the nature and timing of satisfaction of performance obligations, standalone selling price of performance obligations and variable consideration; allowances for credit losses, including estimating macroeconomic factors affecting historical recovery rate of receivables; inventory and project asset write-downs; stock-based compensation; fair value assumptions for solar power systems and other long-lived assets sold under sale-leaseback transactions; long-lived asset impairment, specifically estimates for valuation assumptions including discount rates and future cash flows; economic useful lives of property, plant and equipment, and intangible assets; fair value of investments, including equity investments for which we apply the fair value option and other financial instruments; residual value of solar power systems; valuation of contingencies such as accrued warranty; the incremental borrowing rate used in discounting of lease liabilities; the fair value of indemnities provided to customers and other parties; and income taxes and tax valuation allowances. As a result of the uncertainty involved with industry impacts of COVID-19, many of our estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. These estimates may change as impacts become more certain and additional information becomes available, which may result in a significant change to our estimates in future periods. Actual results could materially differ from those estimates.

Summary of Selected Significant Accounting Policies
        
Included below, are selected significant accounting policies that were added or modified during the three months ended March 29, 2020 as a result of new transactions entered into or the adoption of new accounting policies. Refer to our Annual Report on Form 10-K for the fiscal year ended December 29, 2019 for the full list of our significant accounting policies.

Financial Instruments - Credit Losses

Effective December 30, 2019, we adopted Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13) and subsequent amendment to the initial guidance: ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11, ASU 2020-02, and ASU 2020-03 (collectively, "Topic 326"). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. The amendment applies to entities which hold financial assets and net investments in leases that are not accounted for at fair value through net income as well as loans, debt securities, accounts receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. For additional information on the changes resulting from the new standard and the impact to our financial results on adoption, refer to the section Recently Adopted Accounting Pronouncements below.

We recognize an allowance for credit loss at the time a receivable is recorded based on our estimate of expected credit losses and adjust this estimate over the life of the receivable as needed. We evaluate the aggregation and risk characteristics of a receivable pool and develop loss rates that reflect historical collections, current forecasts of future economic conditions over the time horizon we are exposed to credit risk, and payment terms or conditions that may materially affect future forecasts.

As of March 29, 2020, we reported $243.5 million of accounts receivable, net of allowances of $22.5 million. Based on aging analysis as of March 29, 2020, 83% of our trade accounts receivable was outstanding less than 60 days. Refer to Note 4. Balance Sheet Components for more details regarding changes in allowance for credit losses. We will continue to actively monitor the impact of the COVID-19 pandemic on expected credit losses.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued Topic 326, to replace the prior incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in Topic 326 apply to entities which hold financial assets and net investments in leases that are not accounted for at fair value through net income as well as loans, debt securities, accounts receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. We
13

adopted the ASU during the first quarter of fiscal 2020. The adoption did not have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20) to add, remove, and clarify disclosure requirements related to defined benefit pension and other postretirement plans. We adopted the ASU during first quarter of fiscal 2020. The adoption did not have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles Goodwill and Other Internal-Use Software (Subtopic 350-40) requiring a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets. We adopted the ASU during the first quarter of fiscal 2020. The adoption did not have a material impact on our consolidated financial statements.

In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities, which broadens the scope of the private company alternative to include all common control arrangements that meet specific criteria (not just leasing arrangements) and also eliminates the requirement that entities consider indirect interests held through related parties under common control in their entirety when assessing whether a decision-making fee is a variable interest. We adopted the ASU during the first quarter of fiscal 2020. The adoption did not have a material impact on our consolidated financial statements.

In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606, which 1) clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606; 2) adds unit-of-account guidance in Topic 808 to align with the guidance in Topic 606; and 3) requires that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under Topic 606 is precluded if the collaborative arrangement participant is not a customer. We adopted the ASU during the first quarter of fiscal 2020. The adoption did not have a material impact on our consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for us no later than the first quarter of fiscal 2021. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. We are currently evaluating the impacts of the provisions of ASU 2019-12 on our financial statements and disclosures.

In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The amendment clarifies accounting for equity investments and non-derivative forward contracts or purchased call options under ASC 321. ASU 2020-01 is effective no later than the first quarter of fiscal 2021. Early adoption is permitted, and the ASU should be applied prospectively. While we are still evaluating the impacts of the provisions of ASU 2020-01 on our financial statements and disclosures, the impact is not expected to be material.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance is effective beginning on March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. We are planning to adopt the second quarter of fiscal 2020. The impacts are not expected to be material.

14

Note 2. TRANSACTIONS WITH TOTAL AND TOTAL S.A.

In June 2011, Total completed a cash tender offer to acquire 60% of our then outstanding shares of common stock at a price of $23.25 per share, for a total cost of approximately $1.4 billion. In December 2011, we entered into a Private Placement Agreement with Total (the "Private Placement Agreement"), under which Total purchased, and we issued and sold, 18.6 million shares of our common stock for a purchase price of $8.80 per share, thereby increasing Total's ownership to approximately 66% of our outstanding common stock as of that date. As of March 29, 2020, ownership of our outstanding common stock by Total S.A. and its affiliates was approximately 50%. Ownership of our outstanding common stock by Total S.A. and its affiliates was approximately 52% as of May 1, 2020.

Supply Agreements

In November 2016, we and Total entered into a four-year, up to 200 megawatts ("MW") supply agreement to support the solarization of certain Total facilities. The agreement covers the supply of 150 MW of E-Series (Maxeon 2) panels with an option to purchase up to another 50 MW of P-Series solar panels. In March 2017, we received a prepayment totaling $88.5 million. The prepayment is secured by some of our assets located in the United States and in Mexico.

We recognize revenue for the solar panels supplied under this arrangement consistent with our revenue recognition policy for solar power components at a point in time when control of such products transfers to the customer, which generally occurs upon shipment or delivery depending on the terms of the contracts. In the second quarter of fiscal 2017, we started to supply Total with solar panels under the supply agreement and as of March 29, 2020, we had $19.2 million of "contract liabilities, current portion" and $