SolarCity to Amend Fiscal 2012 and 2013 Earnings to Correct Accounting Error

In a note to investors this morning, SolarCity (NASDAQ: SCTY  ) said it would be reallocating some overhead expenses and that while the change will affect its 2013 and 2012 GAAP financial statements, it won't have any impact on future financials. Importantly, SolarCity said its total overhead expenses will not change, and the reallocation of costs will not affect the company's net cash flows .

The company, which installs solar panels and helps customers finance them, currently has a cash balance of $577.1 million.

SolarCity said it found an error in the formula it used to allocate overhead expenses between the solar energy systems it sells outright to customers versus the solar energy systems on which it retains ongoing operating leases. Although the error has no impact on the total amount of money spent in overhead expenses, it will require downward adjustments for the balance-sheet line item for Systems Leased and to Be Leased. SolarCity also expects to raise its cost-of-sales line item for Solar Energy Systems Sales for the nine months ending Sept. 30, 2013, as well as for the full 2012 year.

SolarCity said its guidance for fiscal 2014 will remain unchanged. For the year ahead, SolarCity expects 475 MW to 525 MW deployed, and positive net cash flow. The company is expected to submit its amended results to the Securities and Exchange Commission by March 18.

SolarCity released preliminary results last week but delayed full earnings results to address matters including the overhead allocation.

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