Note 14 - Quarterly Results of Operations (Unaudited). We reclassify these gains or losses to costs of automotive sales in the period the related finished goods inventory is sold or over the depreciation period for those sales accounted for as leases. Cash used in investing activities was $1.67 billion, $990.4 million and $249.4 million in 2015, 2014 and 2013. Should impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset's estimated fair value. Credits are applied as a cost offset to either employee expense or to capital assets, depending on the source of the credits. Our vehicles also compete with vehicles propelled by alternative fuels, principally electricity. Such adverse publicity would negatively affect our brand and harm our business, prospects, financial condition and operating results. We have never declared or paid cash dividends on our capital stock nor do we anticipate paying any such cash dividends in the foreseeable future. Conventional all-wheel drive vehicles distribute power to the wheels from a single engine driving a complex mechanical transmission system. We offer a prepaid maintenance program for our vehicles, which includes plans covering maintenance for up to eight years or up to 100,000 miles, provided these services are purchased within a specified period of time. If customers experience problems with the way our charging equipment works with the local charging infrastructure, or we are unable to adapt our equipment to resolve such problems, then the viability and acceptance of our vehicles in such markets could be materially and adversely affected. In the future, we may at various times, voluntarily or involuntarily, initiate a recall if any of our vehicles or our electric powertrain components that we provide to other OEMs, including any systems or parts sourced from our suppliers, prove to be defective or noncompliant with applicable federal motor vehicle safety standards. Note 12 - Information about Geographic Areas. In  November 2015, the FASB issued Accounting Standards Update No. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In cases where customers retain their vehicles past the guarantee period, our gross margin will be negatively impacted as all remaining revenues and costs related to the vehicle will be recognized at no gross profit. Upon conversion of the 2019 Notes, we would pay or deliver as applicable, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. These cash flows enable us to fund our ongoing operations, research and development projects for our planned Model 3, and certain other future products; purchase tooling and manufacturing equipment required to continue to ramp up production of Model X and Model S; construct our Gigafactory; and establish and expand our retail stores, service centers and Supercharger network. We will also need to ensure we are in compliance with any regulatory requirements applicable to the sale and service of our vehicles in those jurisdictions, which could take considerable time and expense. Cash received for these vehicles, net of revenue recognized during the period, is classified as collateralized lease borrowings within cash flows from financing activities in our Consolidated Statements of Cash Flows. R&D expenses for the year ended December 31, 2014 were $464.7 million, an increase from $232.0 million for the year ended December 31, 2013. Our financial assets that are measured at fair value on a recurring basis consist of cash equivalents and marketable securities. We are currently producing and selling both the Model S sedan and the Model X sport utility vehicle. We typically carry a very limited inventory of our vehicles at our Tesla stores. To the extent that we are not able to build Model X in accordance with consumer expectations, customers may cancel their reservations and our future sales could be harmed. Other states, such as New Jersey, New York, Ohio and Pennsylvania, have passed legislation that clarifies our ability to operate, but at the same time limits the number of dealer licenses we can obtain or stores that we can operate.

In connection with the construction of the Gigafactory in Nevada, we have entered into agreements with the State of Nevada and Storey County in Nevada that will provide abatements for sales and use taxes, real and personal property taxes, and employer excise taxes, discounts to the base tariff energy rates, and transferable tax credits. As of December 31, 2015, we held $283.4 million in customer deposits. We have the following contractual obligations, including firm purchase obligations. Any mishandling of battery cells may cause disruption to the operation of our facilities. Should this ch ange in warranty coverage lead to an increase in warranty claims, we may need to record additional warranty reserves, which would negatively affect our profitability. The unavailability, reduction or elimination of government and economic incentives in the U.S. and abroad supporting the development and adoption of electric vehicles could have some impact on demand for our vehicles. We are required to meet various covenants, including meeting certain reporting requirements, such as the completion and presentation of audited consolidated financial statements for our borrowings. Accordingly, in order to build and maintain our business, we must maintain confidence among customers, suppliers, analysts and other parties in our liquidity and long-term business prospects. enable customer input into the product development process. We owned and operated 118 service locations as of December 31, 2015. None of our key employees is bound by an employment agreement for any specific term and we may not be able to successfully attract and retain senior leadership necessary to grow our business.

As of December 31, 2015, 22,454,854 shares of common stock were reserved for issuance under the Plan. We have also experienced cost increases from certain of our suppliers in order to meet our quality targets and development timelines as well as due to design changes that we made, and we may experience similar cost increases in the future. In certain states in which we are not able to obtain dealer licenses, we have worked with state regulators to open galleries, which are not full retail locations. We may need to defend ourselves against patent or trademark infringement claims, which may be time-consuming and would cause us to incur substantial costs. Similar algorithms control traction, vehicle stability and the sustained acceleration and regenerative braking of the vehicle. We currently intend to add new facilities or expand our existing facilities as we add employees and expand our network of stores and galleries, service locations and Supercharger sites. We allocate Supercharger related expenses to cost of automotive revenues and selling, general, and administrative expenses. Limitations on the Effectiveness of Controls.