24. Concentrations of Credit and Other Risks
Customer Concentration. The following customers each comprised 10% or more of our total net sales during the years ended December 31, 2013, 2012, and 2011 and/or 10% or more of our total accounts receivable during the years ended December 31, 2013 and 2012 (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2013 | | 2012 | | 2011 |
| Net Sales | % of Total NS | A/R Outstanding | % of Total A/R | | Net Sales | % of Total NS | A/R Outstanding | % of Total A/R | | Net Sales | % of Total NS |
Customer #1 | * |
| * |
| $ | 18,959 |
| 14 | % | | $ | 720,056 |
| 21 | % | $ | 134,108 |
| 24 | % | | $ | 993,709 |
| 36 | % |
Customer #2 | * |
| * |
| * |
| * |
| | * |
| * |
| * |
| * |
| | $ | 408,508 |
| 15 | % |
Customer #3 | * |
| * |
| * |
| * |
| | $ | 773,407 |
| 23 | % | * |
| * |
| | * |
| * |
|
Customer #4 | $ | 664,669 |
| 20 | % | $ | 40,268 |
| 30 | % | | $ | 701,648 |
| 21 | % | * |
| * |
| | * |
| * |
|
Customer #5 | * |
| * |
| $ | 15,776 |
| 12 | % | | * |
| * |
| $ | 120,334 |
| 22 | % | | * |
| * |
|
Customer #6 | $ | 584,638 |
| 18 | % | $ | 41,074 |
| 30 | % | | * |
| * |
| * |
| * |
| | * |
| * |
|
| |
* | Net sales and/or accounts receivable to these customers were less than 10% of our total net sales and/or accounts receivable during this period. |
Credit Risk. We have certain financial and derivative instruments that subject us to credit risk. These consist primarily of cash, cash equivalents, marketable securities, restricted investments, trade accounts receivable, interest rate swap contracts, cross-currency swap contracts, and foreign exchange forward contracts. We are exposed to credit losses in the event of nonperformance by the counterparties to our financial and derivative instruments. We place cash, cash equivalents, marketable securities, restricted investments, interest rate swap contracts, cross-currency contracts, and foreign exchange forward contracts with various high-quality financial institutions and limit the amount of credit risk from any one counterparty. We continuously evaluate the credit standing of our counterparty financial institutions. For the years ended December 31, 2013, 2012, and 2011, our net sales were primarily concentrated among three or fewer customers. We monitor the financial condition of our customers and perform credit evaluations whenever deemed necessary. Depending upon the sales arrangement, we may require some form of payment security from our customers including bank guarantees or commercial letters of credit.
Geographic Risk. Our third-party solar module net sales were historically sold to customers for use in solar power systems concentrated in a single geographic region, the European Union. Our solar power systems sales are presently predominantly in the United States and Canada. These concentrations of our sales in limited geographic regions exposes us to local economic risks and local public policy and regulatory risk in those regions.
Production. Our products include components that are available from a limited number of suppliers or sources. Shortages of essential components could occur due to interruptions of supply or increases in demand and could impair our ability to meet demand for our products. Our modules are presently produced in facilities in Perrysburg, Ohio, and Kulim, Malaysia. Damage to or disruption of facilities could interrupt our business and impair our ability to generate net sales.
International Operations. During the year ended December 31, 2013, we derived 14% of our net sales from sales outside our country of domicile, the United States. Therefore, our financial performance could be affected by events such as changes in foreign currency exchange rates, trade protection measures, long accounts receivable collection patterns, and changes in regional or worldwide economic or political conditions.
