Good day ladies and gentlemen and welcome to the First Solar fourth quarter 2008 earnings conference call. This call is being webcast live on the Investor’s section of First Solar’s website at www.firstsolar.com. (Operator Instructions) As a reminder, today’s call is being recorded. I would now like to turn the call over to Mr. Larry Polizzotto, Vice President of Investor Relations for First Solar. Mr. Polizzotto, you may begin.

Thank you. Good afternoon everyone and thank you for joining us for First Solar’s fiscal fourth quarter 2008 conference call. Today after the market closed, the company issued a press release announcing its fiscal fourth quarter 2008 results and financial results for 2008. If you did not receive a copy of the press release you may obtain one from the Investors section of First Solar’s website at firstsolar.com. In addition, we have posted key quarter statistics and financial historical data and operating performance on the IR website. An audio replay of the conference call will also be available approximately two hours after the conclusion of the call. The audio replay will remain available until Friday, February 26, 2009 at 9:59 PM Mountain Standard Time, 11:59 PM Eastern Daylight Time; and can be accessed by dialing 888-266-2081 if you’re calling from the United States; or 703-925-2533 if you’re calling from outside the United States and entering access ID number 1325337. A replay of the webcast will be available for 90 calendar days approximately two hours after the conclusion of this call. Investors may access the webcast on the Investors section of the company’s website at firstsolar.com. If you are a subscriber of Factset you can obtain a written transcript within two hours. With me today are Mike Ahearn, Chief Executive Officer; Jens Meyerhoff, Chief Financial Officer; and Bruce Sohn, President of First Solar. Mike will begin with an overview of the company’s fourth quarter and fiscal year 2008 achievements, followed by a market and overall business update. Jens will provide you with the fourth quarter 2008 financial results and provide an update to guidance for 2009. We will then open up the call for questions. I want to remind you that all numbers reported and discussed in today’s call are based…

Thank you Larry. Thank you for participating in First Solar’s fourth quarter 2008 earnings call. As you saw from the release, First Solar had another strong quarter in Q4. Jens will provide some of the financial details on the quarter but I’d like to make a start by hitting a few of the highlights. Fourth quarter production was 173.6 megawatts. That’s up 27% sequentially bringing our total 2008 production to 504 megawatts. Net sales for the fourth quarter were $433.7 million. That’s up 24.4% quarter over quarter, resulting in net income of $132.8 million or $1.61 per diluted share. For the year we achieved $1.2 billion in net sales, up 147% and EPS of $4.24 per diluted share. We achieved our 2008 goals in the U.S. utility industry by constructing a 10 megawatt AC ground mounted PV plant near Boulder City, Nevada in less than five months for Semper Energy; by securing three large rooftop projects with Southern California Edison to demonstrate First Solar’s low-cost rooftop solution; and then by establishing a development relationship with Edison Mission Energy an associate of Southern California Edison. And finally we reduced factoring costs to $0.98 a watt in Q4. That’s down 9% quarter over quarter and 12% for the year. Breaking that $1 per watt benchmark is a major industry milestone. It’s something the industry has been chasing for 20 years and I’d like to take a few minutes before we get back to the normal flow to put our accomplishments over the past few years in perspective. First Solar increased its annual production from 20 megawatts in 2005 to over 500 megawatts in 2008, which is a 25 fold increase over the four year period. In 2009 our production capacity will double to a little over 1 gigawatt. That means we’ll be…

Thank you Mike and good afternoon. Net sales for the fourth quarter were $433.7 million, an increase of 24.4% over the third quarter of 2008. The increase was primarily driven by continued strong demand, supported by the ramp of Plant 1 and 2 in Malaysia, and higher line efficiency partially offset by currency fluctuations as the euro declined sequentially from a blended $1.51 to $1.41 per euro during the quarter. Manufacturing costs per watt for the fourth quarter were $0.98, down 9% quarter over quarter and 12% for the year. Cost per watt included $0.03 of Malaysian ramp costs and $0.02 of stock-based compensation expenses. Cost per watt is expected to continue to decline with the ramp of our remaining plants in Malaysia and continued throughput improvements. Gross margin for the fourth quarter was 53.9%, down 2.1 percentage point quarter over quarter primarily due to unfavorable foreign exchange trends and customer mix, which was partially offset by lower manufacturing costs. Operating expense growth slowed further in the fourth quarter as we start to reach infrastructure scale in certain organizational areas. Operating expenses excluding production start-up costs were down 2.2 percentage points to 14.7% of net sales in the fourth quarter. Plant start-up costs increased by $2.4 million sequentially to $8.8 million as Plant 3 in Malaysia commenced production during the quarter and we continued to incur start-up expenses for both Plant 3 and 4. Operating income for the fourth quarter was $161.3 million or 77.2% of net sales and included $15.3 million of stock-based compensation expenses. The fourth quarter continued to strong underlying operating leverage in our business model. Net income for the fourth quarter was $132.8 million or $1.61 per share on a fully diluted basis and included $4.2 million of interest income and $6.2 million in foreign exchange…

Thank you sir. (Operator Instructions) Your first question comes from Vishal Shah - Barclays Capital.

Mike, you mentioned your long term operating model has 25% operating margins. When do you expect your – you know to reach that kind of long term model? Will that be 2012 timeframe or would you imagine that to be you know earlier than that? Can you give us some color on that? And then as far as your customer contract renegotiations are concerned, are you looking at 2010 and are you sort of looking at pricing as you look at the industry right now? How are your, you know, discussions with customers going?

Let me – I can speak to the pricing for a minute and then maybe Jens can talk about the financial model. There’s a couple of angles on the pricing we’re looking at Vishal. One is where do we see opportunities to open new markets that traditionally have not been heavily subsidized at least with PV type subsidies, or served by the PV industry. And we do believe there are opportunities there and demand is price elastic. The other would be, you know, even in existing subsidy markets where do we see specific opportunities to drive throughput at higher rates and with more certainty to offset some of the higher costs of project financing. So the discussions we’re having with customers are on a selective basis around specific market opportunities and market segments, [inaudible] to some sort of a wholesale type of a reduction. As far as the long term financial model, maybe you want to address that, Jens.

Yes. Certainly. So Vishal as you may recall so actually the 25% long term operating margin target has to be seen in line with the 20% RONA goal. I gauge it today a RONA number of 22.4% right around operating margins that were in excess of 30% which would imply by continued requirement to scale the business and to grow, so therefore I think this remains a long term model. It’s always been a long term model that we kind of more model around the grid parity goals of 2010 towards 2012.

Your next question comes from Steve O'Rourke - Deutsche Bank Securities.

First is there a duration in the change in the payment terms? That is, will it revert to prior terms after a set number of months or is it kind of open-ended? And second question, your CapEx guidance is a bit down from the guidance you gave last quarter and it sounds like what you’re doing is roughly the same. Can you account for the difference there for us?

So yes so the payment terms we actually see the change in the payment terms for 45 days as permanent. And maybe just to give a little bit of backdrop, we implemented into two to ten day payment terms as a private company, right, when the working capital constraints essentially was with that and when we’re managing very rapid growth. Today in the current market we do not believe that ten day payment terms actually fosters throughput in the system because it eventually creates a constraint to our customer where it takes liquidity away from them that they require to develop and deploy systems. If you look at the CapEx guidance the one thing generally I would say the general scope in the CapEx guidance with respect to the remaining capacity expansions obviously haven’t changed. However what we have done given the overall economic times we’ve scrapped overspending, we’ve scrapped our CapEx as probably every company would do in these times, and there’s after all a slight reduction on the CapEx side.

Your next question comes from Nick Allen - Morgan Stanley.

Can you talk a little bit about the breakdown of sales for the quarter between components and systems? And then also it looks like there was a run rate in the line – a decline in the line run rate. Can you talk about that as well?

So I think if you think about it, I don’t think historically we’ve really broken down the sales on the components and on the systems side. What I can tell you is we obviously had revenue recognition of all the El Dorado project that we’ve brought it on in Q4. Essentially it came all through mostly in Q4. Again refer to the second footnote that we’re going to publish a little bit later in our 10-K. I’ll hand the question on the throughput side to Bruce.

The throughput for the quarter was about 47.7 megawatts per line which is down slightly as you observed which really just reflects the variation that we’re seeing as we bring on the additional capacity in Malaysia and the ongoing development work in Perrysburg. As the lines come up and the proficiency of the operators and engineers develops, we expect the run rates to match. From an efficiency and a quality perspective, the performance of those lines are statistically matched to our other factories, consistent with our [inaudible] technology.

Your next question comes from Mark Bachman - Pacific Crest Securities.

Jens, I’m hoping that you can talk to us a little bit more about this investment in Germany, maybe talk to us about the size of the project. I know you mentioned long term debt. It sounds like because of revenue recognition you might have taken an equity stake in this, so if you can kind of talk to your investors as to how you use your balance sheet, that would be appreciated. Second question is I just wanted to make sure is there any coincidence today between the timing of your call being pushed today and the announcement that we saw out of PG&E of the 500 megawatt PV project by them? And then lastly, Bruce, just on that line count, can you just verify that there was no problems with the line this quarter? It seems like that that number should be increasing especially as efficiency increased there. And I know that I think you had a couple of down days around the holidays, but I just want to make sure that there was no manufacturing problems around or that accounts for that line being down.

Okay. Well, that’s a handful here, Mark, so I’m going to take your question one and Mike will maybe talk about the – I mean the short answer to the timing of the call has nothing to do with anybody’s announcement, the way we timed the call, to give you a little more color. So the specific project we started to participate in and from an equity investment point of view has not yet been announced by name. It is a very large installation for Europe’s sake. And if you think about the impact right now, we’re conservative about how we model and substantially have modeled that we essentially hold the equity piece in it. As the project is significant de-levered right now, we do have banking approval out of all participating financing banks at this point in time. And bringing the project to a leverage above 80% which limits obviously the equity side of the capital commitment to the project. Now obviously from a pure accounting point of view since we own and operate for all practical purposes that plant into the future, unless we decide to do something else with it, you won’t essentially capitalize that project straight onto your balance sheet. So this is not comparable as a flip structure accounting you use out of the U.S. This will actually show up as an asset on our balance sheet and then provide returns coming on an annual basis, coming out of the 20 year feed-in tariff.

In regards to the lines, you did identify of course the holidays that do occur during Q4, different factories, different countries, based on their local customs and cultures. But in terms of operational, the challenge is always just bringing up the factory and developing the proficiency. You’ll recall as we bring a new factory on line like a KOM 2 or a KOM 3 each of these factories is bringing online capacity in the neighborhood of about 190 megawatts, 170 megawatts or so of total capacity. That’s significant capacity and our expectation is to start up matched from an efficiency perspective, matched from a yield perspective and matched of course from a quality and a liability perspective. And so we’re very cautious and careful and have a high degree of expectation in terms of the way we operate the factories. As the proficiency of the workers develops, the run rate itself will also match.

Your next question comes from Sanjay Shrestha - Lazard Capital Markets.

Just a quick point of clarification. When you talk about this 10 to 15% potential risk that you might have to reallocate and then talk about the co-equity investment doesn’t that take into consideration sort of the adjustment to the top line guidance for 2009?

Yes. Essentially that’s why we state it. I mean essentially we said that if you look at the guidance, the guidance essentially is consistent to the prior guidance except essentially the accounting treatment of the equity investment portion into selected projects. So as you look at the 10 to 15% customer [inaudible] we mentioned that default existed or the default risk on our last call. I think you should kind of think about right that we’ve been continuously working that. Actually I think we’ve been successfully reallocating some of the volumes into customers that are financially more viable, that have better access to financing and also that have a clearer pipeline visibility.

Your next question comes from Satya Kumar - Credit Suisse.

What are the inventories that you have at your customer sites and the channel? Do you have a sense of that? Did you sign any new contracts with customers in the last three months? Are the contract terms similar to the five year contract that you’ve signed in the past? And given that you’re investing in a large project it appears that you’re turning over equity for that but you’re not changing your revenue guidance. Does that mean that some of the volumes that you had in contracts to other customers is not going to be less than what you previously expected?

I think with respect to inventories to customers that actually I think was a key topic during our trips. So as Mike mentioned we essentially visited all of our customers in Europe. We could not detect inventory levels that would be in excess of what we deem seasonal. Germany had a very cold winter which actually had slowed down installations. I don’t think we had detracted inventory levels that were at – could be described as highly elevated. So from that perspective I think we came with the check mark out of this trip. You look at new contracts, yes we have signed new contracts. We haven’t announced any of these new contracts because we’re in the middle of negotiations still with contracts, and obviously with respect to the terms of these contracts they’re probably going to be left open to disclose detail terms because the competitive situation has increased significantly and we’re probably less interested in sharing that information, probably for those reasons. So Satya you had a third question that honestly I tried to write down but I didn’t manage to get it all down. If you could repeat it one more time, please.

Essentially your revenue guidance was unchanged from before but does include $200 million. That sort of came off because of your investments in these projects.

Yes.

Does that mean that some of the megawatts that you previously had allocated to customers on contract are coming off now?

No, it doesn’t mean that they’re coming off. There were actually megawatts that may either not have been allocated or were allocated where we’re partnering together with customers, right, to realize these projects in which we take equity ownership. So it’s the same megawatts.

Your next question comes from Robert Stone - Cowen & Company. Robert Stone - Cowen & Company: Jens, very good progress on the expense ratio. I wonder if you could just give us a little color on how to think about the progress you might make in that regard this year especially as the business will now start to involve some other activities like the project?

Yes, as I mentioned we have organizations, right, that I think are starting to reach scale, right, and also saying going to be less investment sensitive. However as you mentioned, too, there’s other initiatives within the company, right, that are still growing, right, with respect to I think the systems business in the U.S., with respect for example some of these activities around project finance in Europe. However, we do expect to continue to see essentially scaling around our operating expenses. Obviously in these times we believe it’s prudent to have a close eye on our operating expenses and with respect to how we deploy such funds. So I think you will see against the revenues continued scale, right, as we go through the year. Maybe not quite to the tune that you saw last year, right, because if you look at the quarter revenue deployment, right, you might not get quite the same type of revenue growth momentum. But you will still see scale.

Your next question comes from Jesse Pichel - Piper Jaffray.

When you talk about default, you’re talking about defaulting on a contract not defaulting on a receivable. Is that correct?

That is correct.

And secondly going into this call you had 791 megawatt contracted for ’09. Was this large German project which you’re helping to finance already in that 791? Or is it in addition to the 791?

No, it was not in addition.

And could you update us then on what the total backlog is for ’09?

I would probably like to give you that update but as I mentioned we’re still in negotiation. I think it would probably make more sense to update the total number on the following quarter call.

Your next question comes from Kelly Dougherty - Macquarie Research Equities.

I just want to follow up quickly on these equity investments. Should we just think of them as not your preferred alternative and just something you’re doing in light of current circumstances? And I guess what I’m trying to get at is, you know, if this will be an increasing ownership position going forward, if it’s the funding environment starts to improve?

I actually would say that I think we’re in the early stages of this as Mike mentioned, right? And we’re evaluating it. I think you could definitely see this develop and so I’m not saying we won’t be doing longer term even absent of some of the near term crisis. But as I mentioned we’re doing one project right now to pilot and then based on that learning we are going to explore further activities and then we’ll be happy to update you on that progress.

With your $0.65 to $0.70 per watt cost expectation could that be pulled ahead from 2012? I mean you’ve broken the $1 level. You’ve got increasing scale, lower Malaysian costs, conversion efficiency. I’m just wondering how we should think about the cadence of cost improvements over the next several quarters.

Bruce, you want to take a [inaudible]?

Yes, Kelly, I’d say that our ongoing improvement plans are really to continue to drive the efficiency that helps drive the costs down, drive the run rates of the factories, and then of course continuing to focus on the raw material costs as we purchase them. Continuing to scale facilities like our Malaysia operation helps significantly as we build out the line. And continuing to see the market develop certainly aids in our ability to drive down those costs, so we continue to stay focused on it. We think it’s a reasonable challenge for us to get there in this 2010 to 2012 timeframe.

Kelly, if you look at it historically, right, I mean we’ve driven 10 to 12%. I think as of today we’ve probably slightly outperformed that roadmap, right, and we’ll continue to work quite hard to continue trying to meet these goals.

Your next question comes from Stephen Chin – UBS. Stephen Chin – UBS: Just first a clarification again, did you pull out a production target for 2009 or are you still keeping it at 1.1 gigawatts? And secondly for Mike I think you talked about a willingness to lower prices to get higher volumes. What type of lower prices are we talking about? Are we talking about another 5 to 10% price discount versus the existing contract prices? And what kind of scale are you thinking of?

Number one, so yes, that is correct. We maintained the 1.1 gigawatt outlook on the production side. I would say with respect to pricing, so you see that the pricing some of the pricing strategy was discussed today, right, didn’t really have any meaningful impact on the guidance, right, which would also suggest that we’ve been thinking about this for a while, but also that our costs have come down. I mean we achieved a very significant cost milestone. That actually enables us with more flexibility around the pricing and we’ve always stated that we will drive throughput. Now with respect to how significant and what percentage is price declines are again I would deem that competitive information. I mean, right now we’re getting into a more demand driven environment where essentially I think we’d like to be a moving target on that and not necessarily disclosing our private strategy publicly.

At least as of today we’re not seeing any price competition from [crystalline] so as far as driving any kind of price response on our part, we’re still operating a notch, maybe a couple of notches below where all that activity’s taking place. So this is more driven by opening new markets, or at least experimenting in heating new markets where we think we can hit a price point that the industry hasn’t been able to achieve and create some longer term growth. So you’re not going to see a lot of volume in ’09 just because of the nature of opening new markets. It starts a lot smaller and builds if we’re successful with the initial round of experiments. I think the overriding way to look at it is we’re within the guidance, the previous guidance, certainly minimal in that respect.

Your next question comes from Daniel Ries - Collins Stewart LLC.

The cost reductions seen in the quarter, would it be correct that Malaysia 2 coming online was the majority, but can you give us any color as to how much came from lower purchasing costs of glass and other components versus efficiency and throughput improvements?

So obviously getting below $1 a watt, that’s a significant milestone and we’re really pleased with the organization’s ability to execute on that. And it’s really a combination of all of those that we don’t typically break out into detail, but as you know KOM 2 did come online and was running the entire quarter. We began shipping early in that quarter and that volume was quite significant. In terms of the efficiency, it was up slightly over the year. The run rate was comparable as we talked about earlier, but the materials costs have also been coming down sequentially as well as we continue to scale the business. We like to work with suppliers that share our vision for lowering costs and provide a good high quality product and are willing to work with us to further scale the business and drive meaningful markets. And we’re able to find and work with more and more of those suppliers as the company continues to grow.

I guess maybe my question was has the worldwide economy affected the availability and price of those components, particularly the glass?

No, we’ve been in pretty good shape from a glass availability perspective. That has not been a significant issue for us.

I guess on the flip side are we seeing a massive depression of prices. I would say the answer to that no at this point.

Your next question comes from [Jed Gorshire] – Canaccord Adams. Jed Gorshire – Canaccord Adams: What was the conversion efficiency this quarter? And then I have a follow up.

Ten-point-eight percent on the conversion efficiency. Jed Gorshire – Canaccord Adams: My follow up relates to the cost structure and you’ve touched on it a little bit with a few of the previous questions, but as we look at your ability to drive down costs compared to crystalline systems, how much do you expect to come from upstream manufacturing efficiencies as it relates to either conversion efficiency or lower grams per watt of your raw materials? And how much do you expect to actually come from downstream going into selling more systems and then EPC?

Well, so on the raw materials front, as you know our story we use a very small amount of our advanced [Intel] technology, we use a very small amount of semiconductor material. So that means there isn’t a significantly large component associated with it, so as the material changes upward or downward as the industry matures it doesn’t have a significant effect on it. However, over time what we’ve talked about is that our expectation is to continue to drive the costs down to the $0.65 to $0.70 per watt range of which efficiency is in the neighborhood of about 15%; continuing to build out in low cost geographies is about another 15%; reducing the cost is about another 7%; and scaling the factories and increasing throughput is about another 5 to 7%. And so that’s kind of the roadmap that we’ve been on for the last couple of years and as Jens pointed out earlier, we believe we’re slightly ahead of that roadmap but we continue to drive continuous improvement throughout all elements there. Now the advantage about efficiency, of course, is that as we drive our costs down, those costs also are – there’s some level of cost that’s passed along to the system installers as well, and they gain additional benefits through increased efficiency as well.

Your next question comes from Colin Rusch - Broadpoint AmTech.

Can you talk a little bit about pricing in the U.S. for the utility scale projects if you’re benchmarking against wholesale prices, relationship to the time of use, market price reference? And then also talk about the timeline for building out projects and how you see that impacting your balance to system costs.

Yes, so the only external price benchmark in the U.S. utility industry that we’re aware of is the market price [referent] in California, which was revised recently in terms of the formula. And on a time of day adjusted basis, it probably gets you into a range of $0.13 to $0.15 a kilowatt hour. So you have to back into an installed system cost from there, based on some assumptions about the cost of project financing. And so that gets to be fairly complicated and site specific. I mean, you’re also looking at the radiance levels and the energy yield. But I think our working assumption continues to be that we need – you need to be pricing in that range of the MPR, maybe slightly above to be competitive with other renewable projects that are being bid into the RFP’s or are being discussed on these bilateral discussions. That’s where we’ve been in our discussions in 2008 and where we continue to be in 2009. The timing – it’s possible to get some smaller projects done, relatively quickly, if you’re working with sites that have already been permitted or can be quickly. We showed that with El Dorado for example, but in terms of the larger pipelines of hundreds of megawatts or gigawatt level in California that’s a multi-year process to work through all the approval tiers and in some cases is transmission dependent. So we’re assuming 2010, second half of 2010 and ’11 for large volume throughput as sort of the earliest practical time and then decent, smaller projects in scattered areas prior to that.

Ladies and gentlemen this concludes our question-and-answer session for today. This concludes our conference call and thank you for participating.