Our income tax benefits recognized from stock-based compensation arrangements were immaterial while we were under full valuation allowances on our U.S. deferred tax assets during the years ended December 31, 2022 and 2021. With the release of the valuation allowance associated with our federal and certain state deferred tax assets in 2023, income tax benefits recognized from stock-based compensation expense were $326 million during the year ended December 31, 2023. During the years ended December 31, 2023, 2022 and 2021, stock-based compensation expense capitalized to our consolidated balance sheets was $199 million, $245 million and $182 million, respectively. As of December 31, 2023, we had $4.82 billion of total unrecognized stock-based compensation expense related to non-performance awards, which will be recognized over a weighted-average period of 2.8 years.


TSLA Note 14 – Income Taxes

Our income before (benefit from) provision for income taxes for the years ended December 31, 2023, 2022 and 2021 was as follows (in millions): ########Year Ended December 31,#### ####2023####2022####2021 Domestic##$##3,196##$##5,524##$##(130) Noncontrolling interest and redeemable noncontrolling interest####(23)####31####125 Foreign####6,800####8,164####6,348 Income before income taxes##$##9,973##$##13,719##$##6,343


TSLA Note 14 – Income Taxes

A (benefit from) provision for income taxes of $(5.00) billion, $1.13 billion and $699 million has been recognized for the years ended December 31, 2023, 2022 and 2021, respectively. The components of the (benefit from) provision for income taxes for the years ended December 31, 2023, 2022 and 2021 consisted of the following (in millions): ########Year Ended December 31,#### ####2023####2022####2021 Current:############ Federal##$##48##$##—##$##— State####57####62####9 Foreign####1,243####1,266####839 Total current####1,348####1,328####848 Deferred:############ Federal####(5,246)####26####— State####(653)####1####— Foreign####(450)####(223)####(149) Total deferred####(6,349)####(196)####(149) Total (Benefit from) provision for income taxes##$##(5,001)##$##1,132##$##699


TSLA Note 14 – Income Taxes

The reconciliation of taxes at the federal statutory rate to our (benefit from) provision for income taxes for the years ended December 31, 2023, 2022 and 2021 was as follows (in millions): ########Year Ended December 31,#### ####2023####2022####2021 Tax at statutory federal rate##$##2,094##$##2,881##$##1,332 State tax, net of federal benefit####(372)####51####6 Nondeductible executive compensation####23####14####201 Excess tax benefits related to stock-based compensation####(288)####(745)####(7,123) Nontaxable manufacturing credit####(101)####—####— Foreign income rate differential####(816)####(923)####(668) U.S. tax credits####(593)####(276)####(328) GILTI inclusion####670####1,279####1,008 Unrecognized tax benefits####183####252####28 Change in valuation allowance####(5,962)####(1,532)####6,165 Other####161####131####78 (Benefit from) provision for income taxes##$##(5,001)##$##1,132##$##699


TSLA Note 14 – Income Taxes

We monitor the realizability of our deferred tax assets taking into account all relevant factors at each reporting period. As of December 31, 2023, based on the relevant weight of positive and negative evidence, including the amount of our taxable income in recent years which is objective and verifiable, and consideration of our expected future taxable earnings, we concluded that it is more likely than not that our U.S. federal and certain state deferred tax assets are realizable. As such, we released $6.54 billion of our valuation allowance associated with the U.S. federal and state deferred tax assets, with the exception of our California deferred tax assets. We continue to maintain a full valuation allowance against our California deferred tax assets as of December 31, 2023, because we concluded they are not more likely than not to be realized as we expect our California deferred tax assets generation in future years to exceed our ability to use these deferred tax assets.


TSLA Note 14 – Income Taxes

Deferred tax assets (liabilities) as of December 31, 2023 and 2022 consisted of the following (in millions): ####December 31, 2023####December 31, 2022 Deferred tax assets:######## Net operating loss carry-forwards##$##2,826##$##4,486 Research and development credits####1,358####1,184 Other tax credits and attributes####827####217 Deferred revenue####1,035####751 Inventory and warranty reserves####1,258####819 Stock-based compensation####230####185 Operating lease right-of-use liabilities####930####554 Capitalized research and development costs####1,344####693 Deferred GILTI tax assets####760####466 Accruals and others####206####178 Total deferred tax assets####10,774####9,533 Valuation allowance####(892)####(7,349) Deferred tax assets, net of valuation allowance####9,882####2,184 Deferred tax liabilities:######## Depreciation and amortization####(2,122)####(1,178) Investment in certain financing funds####(133)####(238) Operating lease right-of-use assets####(859)####(506) Other####(116)####(15) Total deferred tax liabilities####(3,230)####(1,937) Deferred tax assets (liabilities), net of valuation allowance##$##6,652##$##247


TSLA Note 14 – Income Taxes

As of December 31, 2023, we maintained valuation allowances of $892 million for deferred tax assets that are not more likely than not to be realized, which primarily included deferred tax assets in the state of California and certain foreign operating losses. The valuation allowance on our net deferred tax assets decreased by $6.46 billion and $1.73 billion during the years ended December 31, 2023 and 2022, respectively, and increased by $6.14 billion during the year ended December 31, 2021. The valuation allowance decrease during the year ended December 31, 2023 was primarily due to the release of our valuation allowance with respect to our U.S. federal and certain state deferred tax assets. The changes in valuation allowances during the years ended December 31, 2022 and 2021 were primarily due to changes in our U.S. deferred tax assets and liabilities in the respective year. Among our deferred tax assets in foreign jurisdictions, we recorded a valuation allowance on certain foreign net operating losses that are not more likely than not to be realized. The remainder of our foreign deferred tax assets are more likely than not to be realized given the expectation of future earnings in these jurisdictions.


TSLA Note 14 – Income Taxes

As of December 31, 2023, we had $10.31 billion of federal and $10.36 billion of state net operating loss carry-forwards available to offset future taxable income, some of which, if not utilized, will begin to expire in 2024 for federal and state purposes. Federal and state laws can impose substantial restrictions on the utilization of net operating loss and tax credit carry-forwards in the event of an “ownership change,” as defined in Section 382 of the Internal Revenue Code. We have determined that no significant limitation would be placed on the utilization of our net operating loss and tax credit carry-forwards due to prior ownership changes or expirations.


TSLA Note 14 – Income Taxes

As of December 31, 2023, we had federal research and development tax credits of $1.10 billion, federal renewable energy tax credits of $605 million, and state research and development tax credits of $923 million. Most of our state research and development tax credits were in the state of California. If not utilized, some of the federal tax credits may expire in various amounts beginning in 2036. However, California research and development tax credits can be carried forward indefinitely.


TSLA Note 14 – Income Taxes

The local government of Shanghai granted a beneficial corporate income tax rate of 15% to certain eligible enterprises, compared to the 25% statutory corporate income tax rate in China. Our Gigafactory Shanghai subsidiary was granted this beneficial income tax rate of 15% for 2019 through 2023. Starting in 2024, Gigafactory Shanghai is subject to 25% statutory corporate income tax rate in China.


TSLA Note 14 – Income Taxes

As of December 31, 2023, we intend to indefinitely reinvest our foreign earnings and cash unless such repatriation results in no or minimal tax costs. We have recorded the taxes associated with the foreign earnings we intend to repatriate in the future. For the earnings we intend to indefinitely reinvest, no deferred tax liabilities for foreign withholding or other taxes have been recorded. The estimated amount of such unrecognized withholding tax liability associated with the indefinitely reinvested earnings is approximately $245 million.


TSLA Uncertain Tax Positions

The changes to our gross unrecognized tax benefits were as follows (in millions): December 31, 2020##$##380 Increases in balances related to prior year tax positions####117 Decreases in balances related to prior year tax positions####(90) Increases in balances related to current year tax positions####124 December 31, 2021####531 Increases in balances related to prior year tax positions####136 Decreases in balances related to prior year tax positions####(12) Increases in balances related to current year tax positions####222 Decreases in balances related to expiration of the statute of limitations####(7) December 31, 2022####870 Increases in balances related to prior year tax positions####59 Decreases related to settlement with tax authorities####(6) Increases in balances related to current year tax positions####255 Decreases in balances related to expiration of the statute of limitations####(4) December 31, 2023##$##1,174


TSLA Uncertain Tax Positions

We include interest and penalties related to unrecognized tax benefits in income tax expense. We recognized net interest and penalties related to unrecognized tax benefits in provision for income taxes line of our consolidated statements of operations of $17 million, $27 million and $4 million for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, and 2022, we have accrued $47 million and $31 million, respectively, related to interest and penalties on our unrecognized tax benefits. Unrecognized tax benefits of $901 million, if recognized, would affect our effective tax rate.


TSLA Uncertain Tax Positions

We file income tax returns in the U.S. and various state and foreign jurisdictions. We are currently under examination by the Internal Revenue Service (“IRS”) for the years 2015 to 2018. Additional tax years within the periods 2004 to 2014 and 2019 to 2022 remain subject to examination for federal income tax purposes. All net operating losses and tax credits generated to date are subject to adjustment for U.S. federal and state income tax purposes. Our returns for 2004 and subsequent tax years remain subject to examination in U.S. state and foreign jurisdictions.


TSLA Uncertain Tax Positions

Given the uncertainty in timing and outcome of our tax examinations, an estimate of the range of the reasonably possible change in gross unrecognized tax benefits within twelve months cannot be made at this time.


TSLA Operating Lease Arrangement in Buffalo, New York

We have an operating lease arrangement through the Research Foundation for the SUNY Foundation with respect to Gigafactory New York. Under the lease and a related research and development agreement, we are continuing to further develop the facility.


Under this agreement, we are obligated to, among other things, meet employment targets as well as specified minimum numbers of personnel in the State of New York and in Buffalo, New York and spend or incur $5.00 billion in combined capital, operational expenses, costs of goods sold and other costs in the State of New York during the 10-year period beginning April 30, 2018. On an annual basis during the initial lease term, as measured on each anniversary of such date, if we fail to meet these specified investment and job creation requirements, then we would be obligated to pay a $41 million “program payment” to the SUNY Foundation for each year that we fail to meet these requirements. Furthermore, if the arrangement is terminated due to a material breach by us, then additional amounts may become payable by us.


In 2021, an amendment was executed to extend our overall agreement to spend or incur $5.00 billion in combined capital, operational expenses, costs of goods sold and other costs in the State of New York through December 31, 2029. On February 1, 2022, we reported to the State of New York that we had met and exceeded our annual requirements for jobs and investment in Buffalo and New York State. As of December 31, 2023, we have met and expect to meet the requirements under this arrangement based on our current and anticipated level of operations. However, if our expectations as to the costs and timelines of our investment and operations at Buffalo prove incorrect, we may incur additional expenses or be required to make substantial payments to the SUNY Foundation.


TSLA Operating Lease Arrangement in Shanghai, China

We have an operating lease arrangement for an initial term of 50 years with the local government of Shanghai for land use rights where we have been constructing Gigafactory Shanghai. Under the terms of the arrangement, we are required to spend RMB 14.08 billion in capital expenditures by the end of 2023, which has been achieved in 2023, and to generate RMB 2.23 billion of annual tax revenues starting at the end of 2023. As of December 31, 2023, we have met and expect to meet the tax revenue requirements based on our current level of spend and sales.


TSLA Litigation Relating to 2018 CEO Performance Award

On June 4, 2018, a purported Tesla stockholder filed a putative class and derivative action in the Delaware Court of Chancery against Elon Musk and the members of Tesla’s board of directors as then constituted, alleging corporate waste, unjust enrichment and that such board members breached their fiduciary duties by approving the stock-based compensation plan awarded to Elon Musk in 2018. Trial was held November 14-18, 2022. Post-trial briefing and argument are now complete.


TSLA Litigation Related to Directors’ Compensation

On June 17, 2020, a purported Tesla stockholder filed a derivative action in the Delaware Court of Chancery, purportedly on behalf of Tesla, against certain of Tesla’s current and former directors regarding compensation awards granted to Tesla’s directors, other than Elon Musk, between 2017 and 2020. The suit asserts claims for breach of fiduciary duty and unjust enrichment and seeks declaratory and injunctive relief, unspecified damages and other relief. Defendants filed their answer on September 17, 2020.


On July 14, 2023, the parties filed a Stipulation and Agreement of Compromise and Settlement, which does not involve an admission of any wrongdoing by any party. If the settlement is approved by the Court, this action will be fully settled and dismissed with prejudice. Pursuant to the terms of the agreement, Tesla provided notice of the proposed settlement to stockholders of record as of July 14, 2023. The Court held a hearing regarding the settlement on October 13, 2023, after which it took the settlement and plaintiff counsels’ fee request under advisement. The settlement is not expected to have an adverse impact on our results of operations, cash flows or financial position.


TSLA Litigation Relating to Potential Going Private Transaction

Between August 10, 2018 and September 6, 2018, nine purported stockholder class actions were filed against Tesla and Elon Musk in connection with Mr. Musk’s August 7, 2018 Twitter post that he was considering taking Tesla private. On January 16, 2019, Plaintiffs filed their consolidated complaint in the United States District Court for the Northern District of California and added as defendants the members of Tesla’s board of directors. The consolidated complaint asserts claims for violations of the federal securities laws and seeks unspecified damages and other relief. The parties stipulated to certification of a class of stockholders, which the court granted on November 25, 2020. Trial started on January 17, 2023, and on February 3, 2023, a jury rendered a verdict in favor of the defendants on all counts. After trial, plaintiffs filed a motion for judgment as a matter of law and a motion for new trial, which the Court denied and judgement was entered in favor of defendants on July 11, 2023. On July 14, 2023, plaintiffs filed a notice of appeal.


Between October 17, 2018 and March 8, 2021, seven derivative lawsuits were filed in the Delaware Court of Chancery, purportedly on behalf of Tesla, against Mr. Musk and the members of Tesla’s board of directors, as constituted at relevant times, in relation to statements made and actions connected to a potential going private transaction, with certain of the lawsuits challenging additional Twitter posts by Mr. Musk, among other things. Five of those actions were consolidated, and all seven actions have been stayed pending resolution of the appeal in the above-referenced consolidated purported stockholder class action. In addition to these cases, two derivative lawsuits were filed on October 25, 2018 and February 11, 2019 in the U.S. District Court for the District of Delaware, purportedly on behalf of Tesla, against Mr. Musk and the members of the Tesla board of directors as then constituted. Those cases have also been consolidated and stayed pending resolution of the appeal in the above-referenced consolidated purported stockholder class action.


On October 21, 2022, a lawsuit was filed in the Delaware Court of Chancery by a purported shareholder of Tesla alleging, among other things, that board members breached their fiduciary duties in connection with their oversight of the Company’s 2018 settlement with the SEC, as amended. Among other things, the plaintiff seeks reforms to the Company’s corporate governance and internal procedures, unspecified damages, and attorneys’ fees. The parties reached an agreement to stay the case until March 5, 2024.


On November 15, 2021, JPMorgan Chase Bank (“JP Morgan”) filed a lawsuit against Tesla in the Southern District of New York alleging breach of a stock warrant agreement that was entered into as part of a convertible notes offering in 2014. In 2018, JP Morgan informed Tesla that it had adjusted the strike price based upon Mr. Musk’s August 7, 2018 Twitter post that he was considering taking Tesla private. Tesla disputed JP Morgan’s adjustment as a violation of the parties’ agreement. In 2021, Tesla delivered shares to JP Morgan per the agreement, which they duly accepted. JP Morgan now alleges that it is owed approximately $162 million as the value of additional shares that it claims should have been delivered as a result of the adjustment to the strike price in 2018. On January 24, 2022, Tesla filed multiple counterclaims as part of its answer to the underlying lawsuit, asserting among other points that JP Morgan should have terminated the stock warrant agreement in 2018 rather than make an adjustment to the strike price that it should have known would lead to a commercially unreasonable result. Tesla believes that the adjustments made by JP Morgan were neither proper nor commercially reasonable, as required under the stock warrant agreements. JP Morgan filed a motion for judgment on the pleadings, which Tesla opposed, and that motion is currently pending before the Court.


TSLA Litigation and Investigations Relating to Alleged Discrimination and Harassment

On October 4, 2021, in a case captioned Diaz v. Tesla, a jury in the Northern District of California returned a verdict against Tesla on claims by a former contingent worker that he was subjected to race discrimination while assigned to work at Tesla’s Fremont Factory from 2015-2016. A retrial was held starting on March 27, 2023, after which a jury returned a verdict of $3,175,000. As a result, the damages awarded against Tesla were reduced from an initial $136.9 million (October 4, 2021) down to $15 million (April 13, 2022), and then further down to $3.175 million (April 3, 2023). On November 2, 2023, the plaintiff filed a notice of appeal, and on November 16, 2023, Tesla filed a notice of cross appeal.


On February 9, 2022, shortly after the first Diaz jury verdict, the California Civil Rights Department (“CRD,” formerly “DFEH”) filed a civil complaint against Tesla in Alameda County, California Superior Court, alleging systemic race discrimination, hostile work environment and pay equity claims, among others. CRD’s amended complaint seeks monetary damages and injunctive relief. On September 22, 2022, Tesla filed a cross complaint against CRD, alleging that it violated the Administrative Procedures Act by failing to follow statutory pre-requisites prior to filing suit and that cross complaint was subject to a sustained demurrer, which Tesla later amended and refiled. The case is currently in discovery.


Additionally, on June 1, 2022 the Equal Employment Opportunity Commission (“EEOC”) issued a cause finding against Tesla that closely parallels the CRD’s allegations. On September 28, 2023, the EEOC filed a civil complaint against Tesla in the United States District Court for the Northern District of California asserting claims for race harassment and retaliation and seeking, among other things, monetary and injunctive relief. On December 18, 2023, Tesla filed a motion to stay the case. Separately, on December 26, 2023, Tesla filed a motion to dismiss the case.


On June 16, 2022, two Tesla stockholders filed separate derivative actions in the U.S. District Court for the Western District of Texas, purportedly on behalf of Tesla, against certain of Tesla’s current and former directors. Both suits assert claims for breach of fiduciary duty, unjust enrichment, and violation of the federal securities laws in connection with alleged race and gender discrimination and sexual harassment. Among other things, plaintiffs seek declaratory and injunctive relief, unspecified damages payable to Tesla, and attorneys’ fees. On July 22, 2022, the Court consolidated the two cases and on September 6, 2022, plaintiffs filed a consolidated complaint. On November 7, 2022, the defendants filed a motion to dismiss the case and on September 15, 2023, the Court dismissed the action but granted plaintiffs leave to file an amended complaint. On November 2, 2023, plaintiff filed an amended complaint purportedly on behalf of Tesla, against Elon Musk. On December 19, 2023, the defendants moved to dismiss the amended complaint.


TSLA Other Litigation Related to Our Products and Services

We are also subject to various lawsuits that seek monetary and other injunctive relief. These lawsuits include proposed class actions and other consumer claims that allege, among other things, purported defects and misrepresentations related to our products and services. For example, on September 14, 2022, a proposed class action was filed against Tesla, Inc. and related entities in the U.S. District Court for the Northern District of California, alleging various claims about the Company’s driver assistance technology systems under state and federal law. This case was later consolidated with several other proposed class actions, and a Consolidated Amended Complaint was filed on October 28, 2022, which seeks damages and other relief on behalf of all persons who purchased or leased from Tesla between January 1, 2016 to the present. On October 5, 2022 a proposed class action complaint was filed in the U.S. District Court for the Eastern District of New York asserting similar state and federal law claims against the same defendants. On September 30, 2023, the Court dismissed this action with leave to amend the complaint. On November 20, 2023, the plaintiff moved to amend the complaint, which Tesla opposed. On March 22, 2023, the plaintiffs in the Northern District of California consolidated action filed a motion for a preliminary injunction to order Tesla to (1) cease using the term “Full Self-Driving Capability” (FSD Capability), (2) cease the sale and activation of FSD Capability and deactivate FSD Capability on Tesla vehicles, and (3) provide certain notices to consumers about proposed court-findings about the accuracy of the use of the terms Autopilot and FSD Capability. Tesla opposed the motion. On September 30, 2023, the Court denied the request for a preliminary injunction, compelled four of five plaintiffs to arbitration, and dismissed the claims of the fifth plaintiff with leave to amend the complaint. On October 31, 2023, the remaining plaintiff in the Northern District of California action filed an amended complaint, which Tesla has moved to dismiss. On October 2, 2023, a similar proposed class action was filed in San Diego County Superior Court in California. Tesla subsequently removed the San Diego County case to federal court and on January 8, 2024, the federal court granted Tesla’s motion to transfer the case to the U.S. District Court for the Northern District of California.


On February 27, 2023, a proposed class action was filed in the U.S. District Court for the Northern District of California against Tesla, Inc., Elon Musk and certain current and former Company executives. The complaint alleges that the defendants made material misrepresentations and omissions about the Company’s Autopilot and FSD Capability technologies and seeks money damages and other relief on behalf of persons who purchased Tesla stock between February 19, 2019 and February 17, 2023. An amended complaint was filed on September 5, 2023, naming only Tesla, Inc. and Elon Musk as defendants. On November 6, 2023, Tesla moved to dismiss the amended complaint.


On March 14, 2023, a proposed class action was filed against Tesla, Inc. in the U.S. District Court for the Northern District of California. Several similar complaints have also been filed in the same court and these cases have now all been consolidated. These complaints allege that Tesla violates federal antitrust and warranty laws through its repair, service, and maintenance practices and seeks, among other relief, damages for persons who paid Tesla for repairs services or Tesla compatible replacement parts from March 2019 to March 2023. On July 17, 2023, these plaintiffs filed a consolidated amended complaint. On September 27, 2023, the court granted Tesla’s motion to compel arbitration as to three of the plaintiffs, and on November 17, 2023, the court granted Tesla’s motion to dismiss without prejudice. The plaintiffs filed a Consolidated Second Amended Complaint on December 12, 2023, which Tesla has moved to dismiss. Plaintiffs have also appealed the court’s arbitration order. Trial is currently set for July 7, 2025.


The Company intends to vigorously defend itself in these matters; however, we cannot predict the outcome or impact. We are unable to reasonably estimate the possible loss or range of loss, if any, associated with these claims, unless noted.


TSLA Certain Investigations and Other Matters

We regularly receive requests for information, including subpoenas, from regulators and governmental authorities such as the National Highway Traffic Safety Administration, the National Transportation Safety Board, the Securities and Exchange Commission (“SEC”), the Department of Justice (“DOJ”), and various local, state, federal, and international agencies. The ongoing requests for information include topics such as operations, technology (e.g., vehicle functionality, Autopilot and FSD Capability), compliance, finance, data privacy, and other matters related to Tesla’s business, its personnel, and related parties. We routinely cooperate with such formal and informal requests for information, investigations, and other inquiries. To our knowledge no government agency in any ongoing investigation has concluded that any wrongdoing occurred. We cannot predict the outcome or impact of any ongoing matters. Should the government decide to pursue an enforcement action, there exists the possibility of a material adverse impact on our business, results of operation, prospects, cash flows, financial position or brand.


We are also subject to various other legal proceedings, risks and claims that arise from the normal course of business activities. For example, during the second quarter of 2023, a foreign news outlet reported that it obtained certain misappropriated data including, purportedly non-public Tesla business and personal information. Tesla has made notifications to potentially affected individuals (current and former employees) and regulatory authorities and we are working with certain law enforcement and other authorities. On August 5, 2023, a putative class action was filed in the United States District Court for the Northern District of California, purportedly on behalf of all U.S. individuals impacted by the data incident, followed by several additional lawsuits, that each assert claims under various state laws and seeks monetary damages and other relief. If an unfavorable ruling or development were to occur in these or other possible legal proceedings, risks and claims, there exists the possibility of a material adverse impact on our business, results of operations, prospects, cash flows, financial position or brand.


TSLA Letters of Credit

As of December 31, 2023, we had $525 million of unused letters of credit outstanding.


TSLA Note 16 – Variable Interest Entity Arrangements

We have entered into various arrangements with investors to facilitate the funding and monetization of our solar energy systems and vehicles. In particular, our wholly owned subsidiaries and fund investors have formed and contributed cash and assets into various financing funds and entered into related agreements. We have determined that the funds are VIEs and we are the primary beneficiary of these VIEs by reference to the power and benefits criterion under ASC 810. We have considered the provisions within the agreements, which grant us the power to manage and make decisions that affect the operation of these VIEs, including determining the solar energy systems and the associated customer contracts to be sold or contributed to these VIEs, redeploying solar energy systems and managing customer receivables. We consider that the rights granted to the fund investors under the agreements are more protective in nature rather than participating.


As the primary beneficiary of these VIEs, we consolidate in the financial statements the financial position, results of operations and cash flows of these VIEs, and all intercompany balances and transactions between us and these VIEs are eliminated in the consolidated financial statements. Cash distributions of income and other receipts by a fund, net of agreed upon expenses, estimated expenses, tax benefits and detriments of income and loss and tax credits, are allocated to the fund investor and our subsidiary as specified in the agreements.


Generally, our subsidiary has the option to acquire the fund investor’s interest in the fund for an amount based on the market value of the fund or the formula specified in the agreements.


Upon the sale or liquidation of a fund, distributions would occur in the order and priority specified in the agreements.


Pursuant to management services, maintenance and warranty arrangements, we have been contracted to provide services to the funds, such as operations and maintenance support, accounting, lease servicing and performance reporting. In some instances, we have guaranteed payments to the fund investors as specified in the agreements. A fund’s creditors have no recourse to our general credit or to that of other funds. Certain assets of the funds have been pledged as collateral for their obligations.


The aggregate carrying values of the VIEs’ assets and liabilities, after elimination of any intercompany transactions and balances, in the consolidated balance sheets were as follows (in millions): ####December 31, 2023####December 31, 2022 Assets######## Current assets######## Cash and cash equivalents##$##66##$##68 Accounts receivable, net####13####22 Prepaid expenses and other current assets####361####274 Total current assets####440####364 Solar energy systems, net####3,278####4,060 Other non-current assets####369####404 Total assets##$##4,087##$##4,828 Liabilities######## Current liabilities######## Accrued liabilities and other##$##67##$##69 Deferred revenue####6####10 Current portion of debt and finance leases####1,564####1,013 Total current liabilities####1,637####1,092 Deferred revenue, net of current portion####99####149 Debt and finance leases, net of current portion####2,041####971 Other long-term liabilities####—####3 Total liabilities##$##3,777##$##2,215


TSLA Note 17 – Related Party Transactions

In relation to our CEO’s exercise of stock options and sale of common stock from the 2012 CEO Performance Award, Tesla withheld the appropriate amount of taxes. However, given the significant amounts involved, our CEO entered into an indemnification agreement with us in November 2021 for additional taxes owed, if any.


Tesla periodically does business with certain entities with which its CEO and directors are affiliated, such as SpaceX and X Corp., in accordance with our Related Person Transactions Policy. Such transactions have not had to date, and are not currently expected to have, a material impact on our consolidated financial statements.


TSLA Note 18 – Segment Reporting and Information about Geographic Areas

We have two operating and reportable segments: (i) automotive and (ii) energy generation and storage. The automotive segment includes the design, development, manufacturing, sales and leasing of electric vehicles as well as sales of automotive regulatory credits. Additionally, the automotive segment is also comprised of services and other, which includes sales of used vehicles, non-warranty after-sales vehicle services, body shop and parts, paid Supercharging, vehicle insurance revenue and retail merchandise. The energy generation and storage segment includes the design, manufacture, installation, sales and leasing of solar energy generation and energy storage products and related services and sales of solar energy systems incentives. Our CODM does not evaluate operating segments using asset or liability information. The following table presents revenues and gross profit by reportable segment (in millions): ########Year Ended December 31,#### ####2023####2022####2021 Automotive segment############ Revenues##$##90,738##$##77,553##$##51,034 Gross profit##$##16,519##$##20,565##$##13,735 Energy generation and storage segment############ Revenues##$##6,035##$##3,909##$##2,789 Gross profit##$##1,141##$##288##$##(129)


The following table presents revenues by geographic area based on the sales location of our products (in millions): ########Year Ended December 31,#### ####2023####2022####2021 United States##$##45,235##$##40,553##$##23,973 China####21,745####18,145####13,844 Other international####29,793####22,764####16,006 Total##$##96,773##$##81,462##$##53,823


The following table presents long-lived assets by geographic area (in millions): ####December 31, 2023####December 31, 2022 United States##$##26,629##$##21,667 Germany####4,258####3,547 China####2,820####2,978 Other international####1,247####845 Total##$##34,954##$##29,037


The following table presents inventory by reportable segment (in millions): ####December 31, 2023####December 31, 2022 Automotive##$##11,139##$##10,996 Energy generation and storage####2,487####1,843 Total##$##13,626##$##12,839


TSLA Note 19 – Restructuring and Other

During the years ended December 31, 2022 and 2021, we recorded $204 million and $101 million, respectively, of impairment losses on digital assets. During the years ended December 31, 2022 and 2021 we also realized gains of $64 million and $128 million, respectively, in connection with converting our holdings of digital assets into fiat currency. We also recorded other expenses of $36 million during the second quarter of the year ended December 31, 2022, related to employee terminations.


TSLA Note 19 – Restructuring and Other

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE


TSLA Note 19 – Restructuring and Other

None.


TSLA Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that our management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.


Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of December 31, 2023, our disclosure controls and procedures were designed at a reasonable assurance level and were effective to provide reasonable assurance that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.


TSLA Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.


Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Our management concluded that our internal control over financial reporting was effective as of December 31, 2023.


Our independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited the effectiveness of our internal control over financial reporting as of December 31, 2023, as stated in their report which is included herein.


TSLA Limitations on the Effectiveness of Controls

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements and projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


TSLA Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2023, which has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


TSLA OTHER INFORMATION

None of the Company’s directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended December 31, 2023, as such terms are defined under Item 408(a) of Regulation S-K, except as follows:


TSLA OTHER INFORMATION

On October 23, 2023, Robyn Denholm, one of our directors, adopted a Rule 10b5-1 trading arrangement for the potential sale of up to 281,116 shares of our common stock, subject to certain conditions. The trading arrangement covers stock options that expire in August 2024. The arrangement's expiration date is August 16, 2024.


TSLA OTHER INFORMATION

On November 13, 2023, Andrew Baglino, Senior Vice President, Powertrain and Energy Engineering, adopted a Rule 10b5-1 trading arrangement for the potential sale of up to 115,500 shares of our common stock, subject to certain conditions. The arrangement's expiration date is December 31, 2024.


TSLA DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.


TSLA DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item 10 of Form 10-K will be included in our 2024 Proxy Statement to be filed with the Securities and Exchange Commission in connection with the solicitation of proxies for our 2024 Annual Meeting of Stockholders and is incorporated herein by reference. The 2024 Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.


TSLA EXECUTIVE COMPENSATION

The information required by this Item 11 of Form 10-K will be included in our 2024 Proxy Statement and is incorporated herein by reference.


TSLA EXECUTIVE COMPENSATION

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


TSLA EXECUTIVE COMPENSATION

The information required by this Item 12 of Form 10-K will be included in our 2024 Proxy Statement and is incorporated herein by reference.


TSLA CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by this Item 13 of Form 10-K will be included in our 2024 Proxy Statement and is incorporated herein by reference.


TSLA PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item 14 of Form 10-K will be included in our 2024 Proxy Statement and is incorporated herein by reference.


TSLA EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

1.Financial statements (see Index to Consolidated Financial Statements in Part II, Item 8 of this report)


2.All financial statement schedules have been omitted since the required information was not applicable or was not present in amounts sufficient to require submission of the schedules, or because the information required is included in the consolidated financial statements or the accompanying notes


3.The exhibits listed in the following Index to Exhibits are filed or incorporated by reference as part of this report


TSLA INDEX TO EXHIBITS

Exhibit Number########Incorporated by Reference#### ##Exhibit Description##Form##File No.####Exhibit##Filing Date 3.1##Amended and Restated Certificate of Incorporation of the Registrant.##10-K##001-34756####3.1##March 1, 2017 3.2##Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Registrant.##10-K##001-34756####3.2##March 1, 2017 3.3##Amended and Restated Bylaws of the Registrant.##8-K##001-34756####3.1##April 5, 2023 4.1##Specimen common stock certificate of the Registrant.##10-K##001-34756####4.1##March 1, 2017 4.2##Fifth Amended and Restated Investors’ Rights Agreement, dated as of August 31, 2009, between Registrant and certain holders of the Registrant’s capital stock named therein.##S-1##333-164593####4.2##January 29, 2010 4.3##Amendment to Fifth Amended and Restated Investors’ Rights Agreement, dated as of May 20, 2010, between Registrant and certain holders of the Registrant’s capital stock named therein.##S-1/A##333-164593####4.2A##May 27, 2010 4.4##Amendment to Fifth Amended and Restated Investors’ Rights Agreement between Registrant, Toyota Motor Corporation and certain holders of the Registrant’s capital stock named therein.##S-1/A##333-164593####4.2B##May 27, 2010 4.5##Amendment to Fifth Amended and Restated Investor’s Rights Agreement, dated as of June 14, 2010, between Registrant and certain holders of the Registrant’s capital stock named therein.##S-1/A##333-164593####4.2C##June 15, 2010 4.6##Amendment to Fifth Amended and Restated Investor’s Rights Agreement, dated as of November 2, 2010, between Registrant and certain holders of the Registrant’s capital stock named therein.##8-K##001-34756####4.1##November 4, 2010 Exhibit Number########Incorporated by Reference#### ##Exhibit Description##Form##File No.####Exhibit##Filing Date 4.7##Waiver to Fifth Amended and Restated Investor’s Rights Agreement, dated as of May 22, 2011, between Registrant and certain holders of the Registrant’s capital stock named therein.##S-1/A##333-174466####4.2E##June 2, 2011 4.8##Amendment to Fifth Amended and Restated Investor’s Rights Agreement, dated as of May 30, 2011, between Registrant and certain holders of the Registrant’s capital stock named therein.##8-K##001-34756####4.1##June 1, 2011 4.9##Sixth Amendment to Fifth Amended and Restated Investors’ Rights Agreement, dated as of May 15, 2013 among the Registrant, the Elon Musk Revocable Trust dated July 22, 2003 and certain other holders of the capital stock of the Registrant named therein.##8-K##001-34756####4.1##May 20, 2013 4.10##Waiver to Fifth Amended and Restated Investor’s Rights Agreement, dated as of May 14, 2013, between the Registrant and certain holders of the capital stock of the Registrant named therein.##8-K##001-34756####4.2##May 20, 2013 4.11##Waiver to Fifth Amended and Restated Investor’s Rights Agreement, dated as of August 13, 2015, between the Registrant and certain holders of the capital stock of the Registrant named therein.##8-K##001-34756####4.1##August 19, 2015 4.12##Waiver to Fifth Amended and Restated Investors’ Rights Agreement, dated as of May 18, 2016, between the Registrant and certain holders of the capital stock of the Registrant named therein.##8-K##001-34756####4.1##May 24, 2016 4.13##Waiver to Fifth Amended and Restated Investors’ Rights Agreement, dated as of March 15, 2017, between the Registrant and certain holders of the capital stock of the Registrant named therein.##8-K##001-34756####4.1##March 17, 2017 4.14##Waiver to Fifth Amended and Restated Investors’ Rights Agreement, dated as of May 1, 2019, between the Registrant and certain holders of the capital stock of the Registrant named therein.##8-K##001-34756####4.1##May 3, 2019 4.15##Indenture, dated as of May 22, 2013, by and between the Registrant and U.S. Bank National Association.##8-K##001-34756####4.1##May 22, 2013 Exhibit Number########Incorporated by Reference#### ##Exhibit Description##Form##File No.####Exhibit##Filing Date 4.16##Fifth Supplemental Indenture, dated as of May 7, 2019, by and between Registrant and U.S. Bank National Association, related to 2.00% Convertible Senior Notes due May 15, 2024.##8-K##001-34756####4.2##May 8, 2019 4.17##Form of 2.00% Convertible Senior Notes due May 15, 2024 (included in Exhibit 4.16).##8-K##001-34756####4.2##May 8, 2019 4.18##Indenture, dated as of October 15, 2014, between SolarCity and U.S. Bank National Association, as trustee.##S-3ASR(1)##333-199321####4.1##October 15, 2014 4.19##Tenth Supplemental Indenture, dated as of March 9, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.00% Solar Bonds, Series 2015/6-10.##8-K(1)##001-35758####4.3##March 9, 2015 4.20##Eleventh Supplemental Indenture, dated as of March 9, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.75% Solar Bonds, Series 2015/7-15.##8-K(1)##001-35758####4.4##March 9, 2015 4.21##Fifteenth Supplemental Indenture, dated as of March 19, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C4-10.##8-K(1)##001-35758####4.5##March 19, 2015 4.22##Sixteenth Supplemental Indenture, dated as of March 19, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C5-15.##8-K(1)##001-35758####4.6##March 19, 2015 4.23##Twentieth Supplemental Indenture, dated as of March 26, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C9-10.##8-K(1)##001-35758####4.5##March 26, 2015 4.24##Twenty-First Supplemental Indenture, dated as of March 26, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C10-15.##8-K(1)##001-35758####4.6##March 26, 2015 4.25##Twenty-Sixth Supplemental Indenture, dated as of April 2, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C14-10.##8-K(1)##001-35758####4.5##April 2, 2015 4.26##Thirtieth Supplemental Indenture, dated as of April 9, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C19-10.##8-K(1)##001-35758####4.5##April 9, 2015 Exhibit Number########Incorporated by Reference#### ##Exhibit Description##Form##File No.####Exhibit##Filing Date 4.27##Thirty-First Supplemental Indenture, dated as of April 9, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C20-15.##8-K(1)##001-35758####4.6##April 9, 2015 4.28##Thirty-Fifth Supplemental Indenture, dated as of April 14, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C24-10.##8-K(1)##001-35758####4.5##April 14, 2015 4.29##Thirty-Sixth Supplemental Indenture, dated as of April 14, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C25-15.##8-K(1)##001-35758####4.6##April 14, 2015 4.30##Thirty-Eighth Supplemental Indenture, dated as of April 21, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C27-10.##8-K(1)##001-35758####4.3##April 21, 2015 4.31##Thirty-Ninth Supplemental Indenture, dated as of April 21, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C28-15.##8-K(1)##001-35758####4.4##April 21, 2015 4.32##Forty-Third Supplemental Indenture, dated as of April 27, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C32-10.##8-K(1)##001-35758####4.5##April 27, 2015 4.33##Forty-Fourth Supplemental Indenture, dated as of April 27, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C33-15.##8-K(1)##001-35758####4.6##April 27, 2015 4.34##Forty-Eighth Supplemental Indenture, dated as of May 1, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.00% Solar Bonds, Series 2015/12-10.##8-K(1)##001-35758####4.5##May 1, 2015 4.35##Forty-Ninth Supplemental Indenture, dated as of May 1, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.75% Solar Bonds, Series 2015/13-15.##8-K(1)##001-35758####4.6##May 1, 2015 4.36##Fifty-Second Supplemental Indenture, dated as of May 11, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C36-10.##8-K(1)##001-35758####4.4##May 11, 2015 Exhibit Number########Incorporated by Reference#### ##Exhibit Description##Form##File No.####Exhibit##Filing Date 4.37##Fifty-Third Supplemental Indenture, dated as of May 11, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C37-15.##8-K(1)##001-35758####4.5##May 11, 2015 4.38##Fifty-Seventh Supplemental Indenture, dated as of May 18, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C40-10.##8-K(1)##001-35758####4.4##May 18, 2015 4.39##Fifty-Eighth Supplemental Indenture, dated as of May 18, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C41-15.##8-K(1)##001-35758####4.5##May 18, 2015 4.40##Sixty-First Supplemental Indenture, dated as of May 26, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C44-10.##8-K(1)##001-35758####4.4##May 26, 2015 4.41##Sixty-Second Supplemental Indenture, dated as of May 26, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C45-15.##8-K(1)##001-35758####4.5##May 26, 2015 4.42##Seventieth Supplemental Indenture, dated as of June 16, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C52-10.##8-K(1)##001-35758####4.4##June 16, 2015 4.43##Seventy-First Supplemental Indenture, dated as of June 16, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C53-15.##8-K(1)##001-35758####4.5##June 16, 2015 4.44##Seventy-Fourth Supplemental Indenture, dated as of June 22, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C56-10.##8-K(1)##001-35758####4.4##June 23, 2015 4.45##Seventy-Fifth Supplemental Indenture, dated as of June 22, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C57-15.##8-K(1)##001-35758####4.5##June 23, 2015 4.46##Eightieth Supplemental Indenture, dated as of June 29, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C61-10.##8-K(1)##001-35758####4.5##June 29, 2015 Exhibit Number########Incorporated by Reference#### ##Exhibit Description##Form##File No.####Exhibit##Filing Date 4.47##Eighty-First Supplemental Indenture, dated as of June 29, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C62-15.##8-K(1)##001-35758####4.6##June 29, 2015 4.48##Ninetieth Supplemental Indenture, dated as of July 20, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C71-10.##8-K(1)##001-35758####4.5##July 21, 2015 4.49##Ninety-First Supplemental Indenture, dated as of July 20, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C72-15.##8-K(1)##001-35758####4.6##July 21, 2015 4.50##Ninety-Fifth Supplemental Indenture, dated as of July 31, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.00% Solar Bonds, Series 2015/20-10.##8-K(1)##001-35758####4.5##July 31, 2015 4.51##Ninety-Sixth Supplemental Indenture, dated as of July 31, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.75% Solar Bonds, Series 2015/21-15.##8-K(1)##001-35758####4.6##July 31, 2015 4.52##One Hundred-and-Fifth Supplemental Indenture, dated as of August 10, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C81-10.##8-K(1)##001-35758####4.5##August 10, 2015 4.53##One Hundred-and-Eleventh Supplemental Indenture, dated as of August 17, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C87-15.##8-K(1)##001-35758####4.6##August 17, 2015 4.54##One Hundred-and-Sixteenth Supplemental Indenture, dated as of August 24, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C92-15.##8-K(1)##001-35758####4.6##August 24, 2015 4.55##One Hundred-and-Twenty-First Supplemental Indenture, dated as of August 31, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C97-15.##8-K(1)##001-35758####4.6##August 31, 2015 4.56##One Hundred-and-Twenty-Eighth Supplemental Indenture, dated as of September 14, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C101-10.##8-K(1)##001-35758####4.5##September 15, 2015 Exhibit Number########Incorporated by Reference#### ##Exhibit Description##Form##File No.####Exhibit##Filing Date 4.57##One Hundred-and-Twenty-Ninth Supplemental Indenture, dated as of September 14, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C102-15.##8-K(1)##001-35758####4.6##September 15, 2015 4.58##One Hundred-and-Thirty-Third Supplemental Indenture, dated as of September 28, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C106-10.##8-K(1)##001-35758####4.5##September 29, 2015 4.59##One Hundred-and-Thirty-Fourth Supplemental Indenture, dated as of September 28, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C107-15.##8-K(1)##001-35758####4.6##September 29, 2015 4.60##One Hundred-and-Thirty-Eighth Supplemental Indenture, dated as of October 13, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C111-10.##8-K(1)##001-35758####4.5##October 13, 2015 4.61##One Hundred-and-Forty-Third Supplemental Indenture, dated as of October 30, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.00% Solar Bonds, Series 2015/25-10.##8-K(1)##001-35758####4.5##October 30, 2015 4.62##One Hundred-and-Forty-Fourth Supplemental Indenture, dated as of October 30, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.75% Solar Bonds, Series 2015/26-15.##8-K(1)##001-35758####4.6##October 30, 2015 4.63##One Hundred-and-Forty-Eighth Supplemental Indenture, dated as of November 4, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C116-10.##8-K(1)##001-35758####4.5##November 4, 2015 4.64##One Hundred-and-Fifty-Third Supplemental Indenture, dated as of November 16, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C121-10.##8-K(1)##001-35758####4.5##November 17, 2015 4.65##One Hundred-and-Fifty-Fourth Supplemental Indenture, dated as of November 16, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C122-15.##8-K(1)##001-35758####4.6##November 17, 2015 Exhibit Number########Incorporated by Reference#### ##Exhibit Description##Form##File No.####Exhibit##Filing Date 4.66##One Hundred-and-Fifty-Eighth Supplemental Indenture, dated as of November 30, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C126-10.##8-K(1)##001-35758####4.5##November 30, 2015 4.67##One Hundred-and-Fifty-Ninth Supplemental Indenture, dated as of November 30, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C127-15.##8-K(1)##001-35758####4.6##November 30, 2015 4.68##One Hundred-and-Sixty-Third Supplemental Indenture, dated as of December 14, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C131-10.##8-K(1)##001-35758####4.5##December 14, 2015 4.69##One Hundred-and-Sixty-Fourth Supplemental Indenture, dated as of December 14, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C132-15.##8-K(1)##001-35758####4.6##December 14, 2015 4.70##One Hundred-and-Sixty-Eighth Supplemental Indenture, dated as of December 28, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 4.70% Solar Bonds, Series 2015/C136-10.##8-K(1)##001-35758####4.5##December 28, 2015 4.71##One Hundred-and-Sixty-Ninth Supplemental Indenture, dated as of December 28, 2015, by and between SolarCity and the Trustee, related to SolarCity’s 5.45% Solar Bonds, Series 2015/C137-15.##8-K(1)##001-35758####4.6##December 28, 2015 4.72##One Hundred-and-Seventy-Third Supplemental Indenture, dated as of January 29, 2016, by and between SolarCity and the Trustee, related to SolarCity’s 5.00% Solar Bonds, Series 2016/4-10.##8-K(1)##001-35758####4.5##January 29, 2016 4.73##One Hundred-and-Seventy-Fourth Supplemental Indenture, dated as of January 29, 2016, by and between SolarCity and the Trustee, related to SolarCity’s 5.75% Solar Bonds, Series 2016/5-15.##8-K(1)##001-35758####4.6##January 29, 2016 4.74##Description of Registrant’s Securities##10-K##001-34756####4.119##February 13, 2020 10.1**##Form of Indemnification Agreement between the Registrant and its directors and officers.##S-1/A##333-164593####10.1##June 15, 2010 10.2**##2003 Equity Incentive Plan.##S-1/A##333-164593####10.2##May 27, 2010 Exhibit Number########Incorporated by Reference#### ##Exhibit Description##Form##File No.####Exhibit##Filing Date 10.3**##Form of Stock Option Agreement under 2003 Equity Incentive Plan.##S-1##333-164593####10.3##January 29, 2010 10.4**##Amended and Restated 2010 Equity Incentive Plan.##10-K##001-34756####10.4##February 23, 2018 10.5**##Form of Stock Option Agreement under 2010 Equity Incentive Plan.##10-K##001-34756####10.6##March 1, 2017 10.6**##Form of Restricted Stock Unit Award Agreement under 2010 Equity Incentive Plan.##10-K##001-34756####10.7##March 1, 2017 10.7**##Amended and Restated 2010 Employee Stock Purchase Plan, effective as of February 1, 2017.##10-K##001-34756####10.8##March 1, 2017 10.8**##2019 Equity Incentive Plan.##S-8##333-232079####4.2##June 12, 2019 10.9**##Form of Stock Option Agreement under 2019 Equity Incentive Plan.##S-8##333-232079####4.3##June 12, 2019 10.10**##Form of Restricted Stock Unit Award Agreement under 2019 Equity Incentive Plan.##S-8##333-232079####4.4##June 12, 2019 10.11**##Employee Stock Purchase Plan, effective as of June 12, 2019.##S-8##333-232079####4.5##June 12, 2019 10.12**##2007 SolarCity Stock Plan and form of agreements used thereunder.##S-1(1)##333-184317####10.2##October 5, 2012 10.13**##2012 SolarCity Equity Incentive Plan and form of agreements used thereunder.##S-1(1)##333-184317####10.3##October 5, 2012 10.14**##2010 Zep Solar, Inc. Equity Incentive Plan and form of agreements used thereunder.##S-8(1)##333-192996####4.5##December 20, 2013 10.15**##Offer Letter between the Registrant and Elon Musk dated October 13, 2008.##S-1##333-164593####10.9##January 29, 2010 10.16**##Performance Stock Option Agreement between the Registrant and Elon Musk dated January 21, 2018.##DEF 14A##001-34756####Appendix A##February 8, 2018 10.17**##Maxwell Technologies, Inc. 2005 Omnibus Equity Incentive Plan, as amended through May 6, 2010##8-K(2)##001-15477####10.1##May 10, 2010 10.18**##Maxwell Technologies, Inc. 2013 Omnibus Equity Incentive Plan##DEF 14A(2)##001-15477####Appendix A##June 2, 2017 10.19##Indemnification Agreement, effective as of June 23, 2020, between Registrant and Elon R. Musk.##10-Q##001-34756####10.4##July 28, 2020 Exhibit Number########Incorporated by Reference#### ##Exhibit Description##Form##File No.####Exhibit##Filing Date 10.20##Indemnification Agreement, dated as of February 27, 2014, by and between the Registrant and J.P. Morgan Securities LLC.##8-K##001-34756####10.1##March 5, 2014 10.21##Form of Call Option Confirmation relating to 1.25% Convertible Senior Notes Due March 1, 2021.##8-K##001-34756####10.3##March 5, 2014 10.22##Form of Warrant Confirmation relating to 1.25% Convertible Senior Notes Due March 1, 2021.##8-K##001-34756####10.5##March 5, 2014 10.23##Form of Call Option Confirmation relating to 2.00% Convertible Senior Notes due May 15, 2024.##8-K##001-34756####10.1##May 3, 2019 10.24##Form of Warrant Confirmation relating to 2.00% Convertible Senior Notes due May 15, 2024.##8-K##001-34756####10.2##May 3, 2019 10.25†##Supply Agreement between Panasonic Corporation and the Registrant dated October 5, 2011.##10-K##001-34756####10.50##February 27, 2012 10.26†##Amendment No. 1 to Supply Agreement between Panasonic Corporation and the Registrant dated October 29, 2013.##10-K##001-34756####10.35A##February 26, 2014 10.27##Agreement between Panasonic Corporation and the Registrant dated July 31, 2014.##10-Q##001-34756####10.1##November 7, 2014 10.28†##General Terms and Conditions between Panasonic Corporation and the Registrant dated October 1, 2014.##8-K##001-34756####10.2##October 11, 2016 10.29##Letter Agreement, dated as of February 24, 2015, regarding addition of co-party to General Terms and Conditions, Production Pricing Agreement and Investment Letter Agreement between Panasonic Corporation and the Registrant.##10-K##001-34756####10.25A##February 24, 2016 10.30†##Amendment to Gigafactory General Terms, dated March 1, 2016, by and among the Registrant, Panasonic Corporation and Panasonic Energy Corporation of North America.##8-K##001-34756####10.1##October 11, 2016 10.31††##Amended and Restated General Terms and Conditions for Gigafactory, entered into on June 10, 2020, by and among Registrant, Tesla Motors Netherlands B.V., Panasonic Corporation and Panasonic Corporation of North America.##10-Q##001-34756####10.2##July 28, 2020 10.32†##Production Pricing Agreement between Panasonic Corporation and the Registrant dated October 1, 2014.##10-Q##001-34756####10.3##November 7, 2014 Exhibit Number########Incorporated by Reference#### ##Exhibit Description##Form##File No.####Exhibit##Filing Date 10.33†##Investment Letter Agreement between Panasonic Corporation and the Registrant dated October 1, 2014.##10-Q##001-34756####10.4##November 7, 2014 10.34##Amendment to Gigafactory Documents, dated April 5, 2016, by and among the Registrant, Panasonic Corporation, Panasonic Corporation of North America and Panasonic Energy Corporation of North America.##10-Q##001-34756####10.2##May 10, 2016 10.35††##2019 Pricing Agreement (Japan Cells) with respect to 2011 Supply Agreement, executed September 20, 2019, by and among the Registrant, Tesla Motors Netherlands B.V., Panasonic Corporation and SANYO Electric Co., Ltd.##10-Q##001-34756####10.6##October 29, 2019 10.36††##2020 Pricing Agreement (Gigafactory 2170 Cells), entered into on June 9, 2020, by and among Registrant, Tesla Motors Netherlands B.V., Panasonic Corporation and Panasonic Corporation of North America.##10-Q##001-34756####10.3##July 28, 2020 10.37††##2021 Pricing Agreement (Japan Cells) with respect to 2011 Supply Agreement, executed December 29, 2020, by and among the Registrant, Tesla Motors Netherlands B.V., Panasonic Corporation of North America and SANYO Electric Co., Ltd.##10-K##001-34756####10.39##February 8, 2021 10.38††##Amended and Restated Factory Lease, executed as of March 26, 2019, by and between the Registrant and Panasonic Energy North America, a division of Panasonic Corporation of North America, as tenant.##10-Q##001-34756####10.3##July 29, 2019 10.39††##Lease Amendment, executed September 20, 2019, by and among the Registrant, Panasonic Corporation of North America, on behalf of its division Panasonic Energy of North America, with respect to the Amended and Restated Factory Lease, executed as of March 26, 2019.##10-Q##001-34756####10.7##October 29, 2019 10.40††##Second Lease Amendment, entered into on June 9, 2020, by and between the Registrant and Panasonic Energy of North America, a division of Panasonic Corporation of North America, with respect to the Amended and Restated Factory Lease dated January 1, 2017.##10-Q##001-34756####10.1##July 28, 2020 Exhibit Number########Incorporated by Reference#### ##Exhibit Description##Form##File No.####Exhibit##Filing Date 10.41##Amendment and Restatement in respect of ABL Credit Agreement, dated as of March 6, 2019, by and among certain of the Registrant’s and Tesla Motors Netherlands B.V.’s direct or indirect subsidiaries from time to time party thereto, as borrowers, Wells Fargo Bank, National Association, as documentation agent, JPMorgan Chase Bank, N.A., Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc. and Bank of America, N.A., as syndication agents, the lenders from time to time party thereto, and Deutsche Bank AG New York Branch, as administrative agent and collateral agent.##S-4/A##333-229749####10.68##April 3, 2019 10.42##First Amendment to Amended and Restated ABL Credit Agreement, dated as of December 23, 2020, in respect of the Amended and Restated ABL Credit Agreement, dated as of March 6, 2019, by and among certain of the Registrant’s and Tesla Motors Netherlands B.V.’s direct or indirect subsidiaries from time to time party thereto, as borrowers, Wells Fargo Bank, National Association, as documentation agent, JPMorgan Chase Bank, N.A., Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc. and Bank of America, N.A., as syndication agents, the lenders from time to time party thereto, and Deutsche Bank AG New York Branch, as administrative agent and collateral agent.##10-K##001-34756####10.44##February 8, 2021 10.43†##Agreement for Tax Abatement and Incentives, dated as of May 7, 2015, by and between Tesla Motors, Inc. and the State of Nevada, acting by and through the Nevada Governor’s Office of Economic Development.##10-Q##001-34756####10.1##August 7, 2015 10.44##Purchase Agreement, dated as of August 11, 2017, by and among the Registrant, SolarCity and Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC as representatives of the several initial purchasers named therein.##8-K##001-34756####10.1##August 23, 2017 10.45##Amended and Restated Agreement For Research & Development Alliance on Triex Module Technology, effective as of September 2, 2014, by and between The Research Foundation For The State University of New York, on behalf of the College of Nanoscale Science and Engineering of the State University of New York, and Silevo, Inc.##10-Q(1)##001-35758####10.16##November 6, 2014 Exhibit Number########Incorporated by Reference#### ##Exhibit Description##Form##File No.####Exhibit##Filing Date 10.46##First Amendment to Amended and Restated Agreement For Research & Development Alliance on Triex Module Technology, effective as of October 31, 2014, by and between The Research Foundation For The State University of New York, on behalf of the College of Nanoscale Science and Engineering of the State University of New York, and Silevo, Inc.##10-K(1)##001-35758####10.16a##February 24, 2015 10.47##Second Amendment to Amended and Restated Agreement For Research & Development Alliance on Triex Module Technology, effective as of December 15, 2014, by and between The Research Foundation For The State University of New York, on behalf of the College of Nanoscale Science and Engineering of the State University of New York, and Silevo, Inc.##10-K(1)##001-35758####10.16b##February 24, 2015 10.48##Third Amendment to Amended and Restated Agreement For Research & Development Alliance on Triex Module Technology, effective as of February 12, 2015, by and between The Research Foundation For The State University of New York, on behalf of the College of Nanoscale Science and Engineering of the State University of New York, and Silevo, Inc.##10-Q(1)##001-35758####10.16c##May 6, 2015 10.49##Fourth Amendment to Amended and Restated Agreement For Research & Development Alliance on Triex Module Technology, effective as of March 30, 2015, by and between The Research Foundation For The State University of New York, on behalf of the College of Nanoscale Science and Engineering of the State University of New York, and Silevo, Inc.##10-Q(1)##001-35758####10.16d##May 6, 2015 10.50##Fifth Amendment to Amended and Restated Agreement For Research & Development Alliance on Triex Module Technology, effective as of June 30, 2015, by and between The Research Foundation For The State University of New York, on behalf of the College of Nanoscale Science and Engineering of the State University of New York, and Silevo, LLC.##10-Q(1)##001-35758####10.16e##July 30, 2015 10.51##Sixth Amendment to Amended and Restated Agreement For Research & Development Alliance on Triex Module Technology, effective as of September 1, 2015, by and between The Research Foundation For The State University of New York, on behalf of the College of Nanoscale Science and Engineering of the State University of New York, and Silevo, LLC.##10-Q(1)##001-35758####10.16f##October 30, 2015 Exhibit Number########Incorporated by Reference#### ##Exhibit Description##Form##File No.####Exhibit##Filing Date 10.52##Seventh Amendment to Amended and Restated Agreement For Research & Development Alliance on Triex Module Technology, effective as of October 9, 2015, by and between The Research Foundation For The State University of New York, on behalf of the College of Nanoscale Science and Engineering of the State University of New York, and Silevo, LLC.##10-Q(1)##001-35758####10.16g##October 30, 2015 10.53##Eighth Amendment to Amended and Restated Agreement For Research & Development Alliance on Triex Module Technology, effective as of October 26, 2015, by and between The Research Foundation For The State University of New York, on behalf of the College of Nanoscale Science and Engineering of the State University of New York, and Silevo, LLC.##10-Q(1)##001-35758####10.16h##October 30, 2015 10.54##Ninth Amendment to Amended and Restated Agreement For Research & Development Alliance on Triex Module Technology, effective as of December 9, 2015, by and between The Research Foundation For The State University of New York, on behalf of the College of Nanoscale Science and Engineering of the State University of New York, and Silevo, LLC.##10-K(1)##001-35758####10.16i##February 10, 2016 10.55##Tenth Amendment to Amended and Restated Agreement For Research & Development Alliance on Triex Module Technology, effective as of March 31, 2017, by and between The Research Foundation For The State University of New York, on behalf of the Colleges of Nanoscale Science and Engineering of the State University of New York, and Silevo, LLC.##10-Q##001-34756####10.8##May 10, 2017 10.56##Eleventh Amendment to Amended and Restated Agreement for Research & Development Alliance on Triex Module Technology, effective as of July 22, 2020, among the Research Foundation for the State University of New York, Silevo, LLC and Tesla Energy Operations, Inc.##10-Q##001-34756####10.6##July 28, 2020 10.57##Twelfth Amendment to Amended and Restated Agreement for Research & Development Alliance on Triex Module Technology, effective as of May 1, 2021, among the Research Foundation for the State University of New York, Silevo, LLC and Tesla Energy Operations, Inc.##10-Q##001-34756####10.1##October 25, 2021 Exhibit Number########Incorporated by Reference#### ##Exhibit Description##Form##File No.####Exhibit##Filing Date 10.58††##Grant Contract for State-Owned Construction Land Use Right, dated as of October 17, 2018, by and between Shanghai Planning and Land Resource Administration Bureau, as grantor, and Tesla (Shanghai) Co., Ltd., as grantee (English translation).##10-Q##001-34756####10.2##July 29, 2019 10.59##Credit Agreement, dated as of January 20, 2023, among Tesla, Inc., the Lenders and Issuing Banks from time to time party thereto, Citibank, N.A., as Administrative Agent and Deutsche Bank Securities, Inc., as Syndication Agent##10-K##001-34756####10.59##January 31, 2023 21.1##List of Subsidiaries of the Registrant##—##—####—##— 23.1##Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm##—##—####—##— 31.1##Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Executive Officer##—##—####—##— 31.2##Rule 13a-14(a) / 15(d)-14(a) Certification of Principal Financial Officer##—##—####—##— 32.1*##Section 1350 Certifications##—##—####—##— 97##Tesla, Inc. Clawback Policy##—##—####—##— 101.INS##Inline XBRL Instance Document##—##—####—##— 101.SCH##Inline XBRL Taxonomy Extension Schema Document##—##—####—##— 101.CAL##Inline XBRL Taxonomy Extension Calculation Linkbase Document.##—##—####—##— 101.DEF##Inline XBRL Taxonomy Extension Definition Linkbase Document##—##—####—##— 101.LAB##Inline XBRL Taxonomy Extension Label Linkbase Document##—##—####—##— 101.PRE##Inline XBRL Taxonomy Extension Presentation Linkbase Document##—##—####—##— 104##Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)##########


TSLA †Confidential treatment has been requested for portions of this exhibit (1)Indicates a filing of SolarCity

††Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10).


(2)Indicates a filing of Maxwell Technologies, Inc.


TSLA SUMMARY

None.


TSLA SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ##Tesla, Inc. Date: January 26, 2024##/s/ Elon Musk ##Elon Musk ##Chief Executive Officer ##(Principal Executive Officer)


TSLA SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature##Title##Date /s/ Elon Musk##Chief Executive Officer and Director (Principal Executive Officer)##January 26, 2024 Elon Musk#### /s/ Vaibhav Taneja##Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer )##January 26, 2024 Vaibhav Taneja#### /s/ Robyn Denholm##Director##January 26, 2024 Robyn Denholm#### /s/ Ira Ehrenpreis##Director##January 26, 2024 Ira Ehrenpreis#### /s/ Joseph Gebbia##Director##January 26, 2024 Joseph Gebbia#### /s/ James Murdoch##Director##January 26, 2024 James Murdoch#### /s/ Kimbal Musk##Director##January 26, 2024 Kimbal Musk#### /s/ JB Straubel##Director##January 26, 2024 JB Straubel#### /s/ Kathleen Wilson-Thompson##Director##January 26, 2024 Kathleen Wilson-Thompson####


NFLX Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements include, but are not limited to, statements regarding: our core strategy; our ability to improve our content offerings and service; our future financial performance, including expectations regarding revenues, deferred revenue, operating income and margin, net income, expenses, and profitability; liquidity, including the sufficiency of our capital resources, net cash provided by (used in) operating activities, access to financing sources, and free cash flows; capital allocation strategies, including any stock repurchases or repurchase programs; seasonality; stock price volatility; impact of foreign exchange rate fluctuations, including on net income, revenues and average revenues per paying member; impact of interest rate fluctuations; adequacy of existing facilities; future regulatory changes and their impact on our business; intellectual property; price changes and testing; accounting treatment for changes related to content assets; acquisitions; actions by competitors; membership growth, including impact of content and pricing changes on membership growth; partnerships; advertising; multi-household usage; member viewing patterns; dividends; future contractual obligations, including unknown content obligations and timing of payments; our global content and marketing investments, including investments in original programming; impact of work stoppages; content amortization; resolutions of tax examinations; tax expense; unrecognized tax benefits; deferred tax assets; our ability to effectively manage change and growth; our company culture; and our ability to attract and retain qualified employees and key personnel. These forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included throughout this filing and particularly in Item 1A: "Risk Factors" section set forth in this Annual Report on Form 10-K. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to revise or publicly release any revision to any such forward-looking statement, except as may otherwise be required by law.


NFLX ABOUT US

Netflix, Inc. (“Netflix”, “the Company”, “registrant”, “we”, or “us”) is one of the world’s leading entertainment services with over 260 million paid memberships in over 190 countries enjoying TV series, films and games across a wide variety of genres and languages. Members can play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time.


NFLX ABOUT US

Our core strategy is to grow our business globally within the parameters of our operating margin target. We strive to continuously improve our members' experience by offering compelling content that delights them and attracts new members. We seek to drive conversation around our content to further enhance member joy, and we are continuously enhancing our user interface to help our members more easily choose content that they will find enjoyable.


NFLX BUSINESS SEGMENTS

We operate as one operating segment. Our revenues are primarily derived from monthly membership fees for services related to streaming content to our members. See Note 12, Segment and Geographic Information, in the accompanying notes to our consolidated financial statements for further detail.


NFLX COMPETITION

The market for entertainment video is intensely competitive and subject to rapid change. We compete with a broad set of activities for consumers’ leisure time, including other entertainment video providers, such as linear TV, streaming entertainment providers (including those that provide pirated content), video gaming providers and more broadly against other sources of entertainment, like social media, that our members could choose in their moments of free time. We also compete against entertainment video providers and content producers in obtaining content for our service, both for licensed content and for original content projects.


NFLX COMPETITION

While consumers may maintain simultaneous relationships with multiple entertainment sources, we strive for consumers to choose us in their moments of free time. We have often referred to this choice as our objective of "winning moments of truth." In attempting to win these moments of truth with our members, we seek to continually improve our service, including both our technology and our content offerings.


NFLX SEASONALITY

Our membership growth exhibits a seasonal pattern that reflects variations when consumers buy internet-connected screens and when they tend to increase their viewing. Historically, the fourth quarter represents our greatest streaming membership growth. In addition, our membership growth can be impacted by our content release schedule and changes to pricing and plans.


NFLX INTELLECTUAL PROPERTY

We regard our trademarks, service marks, copyrights, patents, domain names, trade dress, trade secrets, proprietary technologies and similar intellectual property as important to our success. We use a combination of patent, trademark, copyright and trade secret laws and confidentiality agreements to protect our proprietary intellectual property. Our intellectual property rights extend to our technology, business processes and the content we produce and distribute through our service. We use the intellectual property of third parties in creating some of our content, merchandising our products and marketing our service. Our ability to provide our members with content they can watch depends on studios, content providers and other rights holders licensing rights, including distribution rights, to such content and certain related elements thereof, such as the public performance of music contained within the content we distribute. The license periods and the terms and conditions of such licenses vary. Our ability to protect and enforce our intellectual property rights is subject to certain risks and from time to time we encounter disputes over rights and obligations concerning intellectual property. We cannot provide assurance that we will prevail in any intellectual property disputes.


NFLX REGULATION

The media landscape and the internet delivery of content have seen growing regulatory action. Historically, media has been highly regulated in many countries. We are seeing some of these legacy regulatory frameworks be updated and expanded to address services like ours. In particular, we are seeing some countries update their cultural support legislation to include services like Netflix. This includes content quotas, levies and investment obligations. Some even restrict the extent of ownership rights we can have both in our service and in our content. In certain countries, regulators are also looking at restrictions that could require formal reviews of and/or adjustments to content that appears on our service in their country. In general these regulations impact all services and may make operating in certain jurisdictions more expensive or restrictive as to the content offerings we may provide.


NFLX HUMAN CAPITAL

We view our employees and our culture as key to our success. As of December 31, 2023, we had approximately 13,000 full-time employees. Of these, approximately 9,000 (69%) were located in the United States and Canada, 2,000 (15%) in Europe, Middle East, and Africa, 500 (4%) in Latin America and 1,500 (12%) in Asia-Pacific. We also have a number of employees engaged in content production, some of whom are part-time or temporary, and whose numbers fluctuate throughout the year. We believe a critical component of our success is our company culture. This culture, which is detailed in a "Culture Memo" located on our website, is often described as providing a unique environment for our associates to perform the best work of their lives in pursuit of excellence. We aim to attract and retain great people - representing a diverse array of perspectives and skills - to work together as a dream team. We empower all of our employees so that they can have significant impact and input into decision-making; each employee has a high degree of freedom and power to make the decisions and take actions in the best interest of the company in carrying out their role. In return, our employees are responsible and accountable for those decisions and actions. With this approach, we believe we are a more flexible, fun, stimulating, creative, collaborative and successful organization.


NFLX HUMAN CAPITAL

As we have expanded our offices globally, our company culture remains an important aspect of our operations. We are mindful of cultural differences across and within regions. Fostering a work environment that is culturally diverse, inclusive and equitable is a major focus for us. We work to build diversity, inclusion and equity into all aspects of our operations globally, with the goal of having diversity and inclusion function as a critical lens through which each Netflix employee carries out their role. We want more people and cultures to see themselves reflected on screen - so it’s important that our employee base is diverse and represents the communities we serve. We look to help increase representation by training our recruiters on how to hire more inclusively, and to help the company and senior leaders diversify their networks. We also support numerous employee resource groups (ERGs), representing employees and allies from a broad array of historically underrepresented and/or marginalized communities. We publish annually an update on our inclusion initiatives and progress, which further highlights our approach to diversity and inclusion, and publish our EEO-1 reports on our website.


NFLX HUMAN CAPITAL

We believe in fostering great leaders. We offer programs, such as seminars and lectures, that are designed to equip our leaders (officers, VPs, people managers and director and senior manager-level employees) to lead the business and our teams in alignment with our expectations and strategic goals. We have built a portfolio of programs under three foundational pillars - great company, great leaders, and great human beings - which we believe support our current and future success. We also offer programs and workshops to provide skills and coaching to employees on a variety of topics, such as leading and inspiring


NFLX HUMAN CAPITAL

teams. We believe this focus helps our employees grow as leaders and well-rounded individuals, and better positions Netflix to operate our global business of providing compelling content to entertain the world.


NFLX HUMAN CAPITAL

We aim to generally pay our employees at the top of their personal market, and they generally are able to choose the form of their compensation between cash and stock options. This permits employee compensation to be highly personalized and reflective of each employee's individual needs and preferences. We conduct pay equity analyses at least annually, and have adopted practices to help ensure that employees from underrepresented groups are not being underpaid based on gender (globally) and race (U.S.) relative to others doing the same or similar work under comparable circumstances. We aim to rectify any pay gaps that we find through this analysis.


NFLX HUMAN CAPITAL

We care about the health and well-being of our employees and their families and provide a variety of benefit programs based on region, including health benefits. In the U.S., employees generally receive an annual cash health benefit allowance that they may allocate to medical, dental and vision premiums in a way that makes sense for them. Employees have access to a host of other benefits, including mental health, childcare, family planning and a company match for charitable donations.


NFLX HUMAN CAPITAL

We believe that our approach to human capital resources has been instrumental in our growth, and has made Netflix a desirable destination for employees.


NFLX OTHER INFORMATION

We maintain a website at www.netflix.com. The contents of our website are not incorporated in, or otherwise to be regarded as part of, this Annual Report on Form 10-K. We make available, free of charge on our website, access to our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as reasonably practicable after we file or furnish them electronically with the Securities and Exchange Commission ("SEC").


NFLX OTHER INFORMATION

Investors and others should note that we announce material financial and other information to our investors using our investor relations website (ir.netflix.net), SEC filings, press releases, public conference calls and webcasts. We use these channels as well as social media and blogs to communicate with our members and the public about our company, our services and other issues. It is possible that the information we post on social media and blogs could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels and blogs listed on our investor relations website.


NFLX Factors

If any of the following risks actually occur, our business, financial condition and results of operations could be harmed. In that case, the trading price of our common stock could decline, and you could lose all or part of your investment.


NFLX Risks Related to Our Business

If our efforts to attract and retain members are not successful, our business will be adversely affected.


NFLX Risks Related to Our Business

We must continually add new members both to replace canceled memberships and to grow our business beyond our current membership base. Our penetration and growth rates have fluctuated and vary across the jurisdictions where we provide our service. In countries where we have been operating for many years or where we are highly penetrated, our membership growth is slower than in newer or less penetrated countries. Our ability to continue to attract and retain members will depend in part on our ability to consistently provide our members in countries around the globe with compelling content choices that keep our members engaged with our service, effectively drive conversation around our content and service, as well as provide a quality experience for choosing and enjoying TV series, films and games. Furthermore, the relative service levels, content offerings, pricing and related features of competitors to our service may adversely impact our ability to attract and retain members. Competitors include other entertainment video providers, such as linear television, and streaming entertainment providers (including those that provide pirated content), video gaming providers, as well as user-generated content, and more broadly other sources of entertainment that our members could choose in their moments of free time.


NFLX Risks Related to Our Business

Members cancel our service for many reasons, including a perception that they do not use the service sufficiently, that they need to cut household expenses, dissatisfaction with content, a preference for competitive services and customer service issues that they believe are not satisfactorily resolved. Membership growth is also impacted by seasonality, with the fourth quarter historically representing our greatest growth, as well as the timing of our content release schedules. Adverse macroeconomic conditions, including inflation, may also adversely impact our ability to attract and retain members. If we do not grow as expected, given, in particular, that our content costs are largely fixed in nature, we may not be able to adjust our expenditures or increase our (per membership) revenues, including by adjusting membership pricing, commensurate with the lowered growth rate such that our margins, liquidity and results of operations may be adversely impacted. If we are unable to successfully compete with current and new competitors in providing compelling content, retaining our existing members and attracting new members, our business will be adversely affected.


NFLX Risks Related to Our Business

If we do not continuously provide value to our members, including making improvements to our service in a manner that is favorably received by them, our revenue, results of operations and business will be adversely affected.


NFLX Risks Related to Our Business

If consumers do not perceive our service offering to be of value, including if we introduce new or adjust existing features, adjust pricing or service offerings, or change the mix of content in a manner that is not favorably received by them, we may not be able to attract and retain members, and accordingly, our revenue, including revenue per paying membership, and results of operations may be adversely affected. We have recently expanded our entertainment video offering to include games. If our efforts to develop and offer games are not valued by our current and future members, our ability to attract and retain members may be negatively impacted. We may also seek to extend our business into new products and services to help drive growth. For example, we are expanding our offering of consumer products and live experiences. To the extent we cannot successfully find and develop new products and services to help drive growth, our future results of operations and growth may be adversely impacted.


NFLX Risks Related to Our Business

We have and may, from time to time, adjust our membership pricing, our membership plans, or our pricing model itself. For example, we introduced a new, lower-priced ad-supported subscription plan. Similarly, we have increased enforcement of and will continue to enforce our terms of use to limit multi-household usage and shared viewing outside of a household. These and other adjustments we make may not be well-received by consumers, and could negatively impact our ability to attract and retain members, revenues per paying membership, revenue and our results of operations. In addition, many of our members rejoin our service or originate from word-of-mouth advertising from existing members. If our efforts to satisfy our existing members or adjustments to our service are not successful, we may not be able to attract or retain members, and as a result, our ability to maintain and/or grow our business will be adversely affected.


NFLX Risks Related to Our Business

Changes in competitive offerings for entertainment video could adversely impact our business.


NFLX Risks Related to Our Business

The market for entertainment is intensely competitive and subject to rapid change. Through new and existing distribution channels, consumers have increasing options to access entertainment video. The various economic models underlying these channels include subscription, transactional, ad-supported and piracy-based models. All of these have the potential to capture