Good afternoon, everyone, and welcome to the First Solar's fourth quarter 2013 earnings call. This call is being webcast live on the Investors section of First Solar's website at firstsolar.com. [Operator instructions.] I would now like to turn the call over to David Brady, Vice President of Treasury and Investor Relations for First Solar, Inc. Mr. Brady, you may begin.

Thank you, operator. Good afternoon, everyone, and thank you for joining us. Today, the company issued a press release announcing its financial results for the fourth quarter and full year 2013. A copy of the press release and the presentation are available on the Investors section of First Solar's website at firstsolar.com. With me today are Jim Hughes, Chief Executive Officer, and Mark Widmar, Chief Financial Officer. Jim will provide an summary of our achievements in 2013 and an update on significant business and technology developments. Then Mark will discuss our fourth quarter and full year results and provide updated guidance for the first quarter of 2014. We will then open up the call for questions. Most of the financial numbers reported and discussed on today's call are based on U.S. Generally Accepted Accounting Principles. In the few cases where we report non-GAAP measures, we have provided a reconciliation to GAAP equivalents at the back of our presentation. This call will also include forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from management’s current expectations. Please review the Safe Harbor statements contained in the press release and the slides published today for a more complete description. It is now my pleasure to introduce our Chief Executive Officer, Jim Hughes. Jim?

Thanks, David. Good afternoon and thanks for joining us for our fourth quarter 2013 earnings call. Today we announced another significant milestone for First Solar, a new record for CdTe cell efficiency at 20.4%. This record was set using materials and processes used in a manufacturing environment certified as the Newport Corporation’s Technology and Applications Center PV Lab and confirmed by the U.S. Department of Energy’s NREL. This breaks the previous record of 19.6% set by GE Global Research in 2013. Last April, First Solar and GE announced a solar technology partnership in which First Solar acquired GE’s CdTe solar intellectual property and secured a collaborative research partnership with GE’s R&D team. The partnership was formed to accelerate innovation in PV technology and accelerate solar module performance at manufacturing scale. This record marks another achievement in our mission to unlock the industry-changing potential of CdTe photovoltaic. First Solar’s new CdTe research cell conversion efficiency matches the research cell efficiency record of multicrystalline silicon, another technology used in the PV solar market. We are demonstrating improvement in CdTe photovoltaic performance at rate that dramatically outstrips the trajectory of conventional silicon technologies which have already plateaued near their ultimate entitlements. The synergy realized in our partnership with GE also demonstrates the value of our consistent and strong investment in R&D. The advanced technologies and process that we developed for this record-setting cell are already being commercialized and will positively impact performance of our future production modules and power plants. Based on this new record, we will be updating our efficiency roadmaps at our analyst day in March. Now turning to our 2013 performance, at our previous analyst day in April last year, we announced several ambitious targets for 2013, and I’m pleased to announce that we have met many of those goals.…

Thanks, Jim, and good afternoon. Turning to slide 12, I would like to begin by highlighting the fourth quarter and full year 2013 operational performance. Production in the quarter was 444 megawatts DC, up 4% on a sequential basis. This decrease reflects the continued revamping of production lines that have undergone planned equipment upgrades. When completed, these upgrades will facilitate the achievement of near term targets on our module cost and efficiency improvement roadmaps. Comparing production year over year, on a consistent basis, production increased 7%, and was driven by higher module efficiency and throughput improvements on the same number of production lines. In the fourth quarter, we ran our factories at approximately 83% capacity utilization, up 3 percentage points from the prior quarter. As Jim highlighted earlier on the call, we’ve made great progress toward achieving the efficiency and manufacturing cost targets that we provided during our analyst day in April. Module manufacturing costs per watt decreased to $0.56 from $0.59 last quarter, a $0.03 per watt or 5% reduction quarter on quarter. This represents a combined decline of $0.11 or 16% in the past two quarters, which has been driven by good balance of efficiency gains, throughput improvement, and variable cost reductions. For the full year, average module costs per watt decreased to $0.63 from $0.70 in 2012, a 10% reduction. Excluding the impact of underutilization, cost per watt fell to $0.54, a $0.03 decline from the prior quarter. During Q4, our best plant’s manufacturing costs at full utilization was $0.53 per watt. Looking at the fundamental manufacturing costs of our best plant, which excludes freight, warranty and EOL, our Q4 cost per watt was $0.47, $0.06 lower than Q4 of 2012. This ongoing improvement of our manufacturing costs highlights the ability of our world-class R&D and manufacturing…

[Operator instructions.] And we’ll take our first question from Patrick Jobin with Credit Suisse.

I’ve noticed in the past on your pipeline of projects, that most of the projects you have there are already sold. I was wondering if you could talk about your plans for a potential yieldco maybe next year and if you need to build out additional projects that have not been sold for a potential yieldco.

We continue to evaluate what a yieldco would look like for the company, looking at what the characteristics of what the vehicle would need to be to have acceptability in the marketplace, what we think it would trade at from a financial metric, what the impact of that trading valuation would mean for the company, what it would mean for the drop down or transfer price economics, it all paints a very complicated picture, including the likelihood that we would ned to consolidate that vehicle, which makes for very, very complicated financials. Several things are clear from our analysis, one of which is that we believe we have available to us an adequate portfolio of projects that would work in the marketplace. That’s a long way from a decision that we’re going to go use those projects to form a yieldco, but that is not a barrier that we believe we face. We believe that we have enough in hand to make that work. There’s a lot more work to be done, there’s significant impact on the structure and appearance of our financial statements that we have to take consideration of, and we’re still, I would say, quite a ways away from a decision, but that’s not one of the barriers that we see should we decide that’s something we want to pursue.

And we’ll move next and take our next question from Vishal Shah with Deutsche Bank.

I just want to follow up on the yieldco question. Maybe could you guys give any kind of indication of how many megawatts you could drop into a yieldco or potentially sell to yieldco investors?

I think that’s a degree of specificity we probably are not comfortable going into at this time.

And maybe on a different line, could you give us an idea of where PPA prices are today, or where you’re seeing them?

I don’t think we can generalize. When we look, even within the U.S. versus globally, it’s a very wide range, with a whole bunch of project specifics that dictate the outcome. And I don’t think I can give you any information that would really be meaningful.

And we’ll move on next to Paul Coster of JPMorgan.

First, just a quick clarification. The quarterly guidance for Q1 was just a one-off, we shouldn’t get used to seeing that going forward? Is that right?

Yeah, it’s indicative of what we see the first quarter, and I think as you know, a lot of our quarters have movements from one quarter to the next, which also needs to be taken into consideration on how we see the annual guidance, which is what we’ll provide in more detail in the analyst day here in a few weeks.

I meant mainly are you going to split the annual guidance, you’re not going to issue quarterly guidance?

Yes, that’s right. This is the same process we used last year.

And then just switching gears, can you just give us your thoughts on [unintelligible] and what we should expect from that in the near future?

We’re moving ahead with the pilot production facility and we’ll expect to talk a little bit more about that at analyst day. The impact in 2014 will be relatively small as the facility will just be starting up. So no big major impact. And anything further we’ll talk about at analyst day.

And we’ll move next to Krish Sankar of Bank of America.

It doesn’t sound like you’re writing off the yieldco by any means, but just curious what else might be out there from your point of view that you guys could leverage from the cost of capital point of view to go out and further pursue utility scale solar development, should you not choose to do a yieldco?

There’s lots of discussion and activity throughout the industry on a variety of capital structures, and there are a lot of things that have been discussed in publications and by the industry broadly, including partnerships with institutional type providers of funds that would be interested in the long term stable cash flow nature of the assets, similar to what the investors in a yieldco would be interested in. There have been discussions of continued securitization through bond offerings, similar to what’s been done on some of the large projects. I think that over the coming year or a couple of years, one thing you may see is you may see people beginning to aggregate smaller utility scale projects into groups that are then financed on a single basis. One of the issues you have as you move down in project size, transactions costs do not diminish on the same factor as size. So the cost to finance a 20 megawatt project is not significantly different than the cost to finance a 200 megawatt project. So I think one of the things that we can do and others may do is begin to see, rather than standalone financing, you’ll see the aggregation of assets into groups, which provides a little more efficiency and reduces the cost of capital. So I think broadly, what I expect to see is when I look at the cost of capital that’s being applied to solar assets, I continue to see a delta versus mature thermal assets, and I think that will disappear over time as you get more projects out there and you get an operating history underneath them, and you get a comfort on the part of the investing community with the stability of the cash flows and the long term performance of the facilities, you’ll just see the risk premium demand shrink, and I think we expect to see that continue over the next couple of years.

I think the other thing is that in general what you continue to see is that the constraint in the market is the actual asset. And there’s a very competitive environment associated with that asset, and so we’re starting to see, as Jim has indicated, and we expect to continue to see, return expectations to normalize, maybe more comparable to other assets that you may see out in the market. And some of that is starting to happen. The other thing, whether we participate with a yieldco or not, those of you who follow it know that there’s a pretty heavy dependency around growth, so not everybody is going to have a sole sponsored yieldco. They’ll most likely look to buy third-party assets. So whether we control and own the vehicle, or we participate in that environment, given the constraint in the market, largely the asset, we think we’ll have access to very competitive cost of capital.

We’ll move next to Brian Lee with Goldman Sachs.

I missed a bit of this, but what was the mix of projects versus modules only for the roughly 400 megawatts or so of incremental bookings in October? And then my follow up was on backlog timing. If I look at the projects that you have contracted but not yet sold in backlog, most seem to have CODs in 2016. Is there flexibility to pull that forward in any of those contracts so that you could actually deliver power sooner? Or is that not an option given your customers’ needs?

On the first one, in terms of the mix of the booking, I think as Jim indicated, 150 megawatts was associated with a project that was awarded in California, the 40 megawatts was associated with Kingbird. But I think you could infer from that a high percentage of the mix was system related volumes. The other one in terms of the backlog that you’re requesting, and the timing, obviously there’s always opportunities to move or flex schedules. A lot of times you have to understand where you are in the permitting process, with the interconnection data. There’s a lot of other variables that have to be evaluated and determine whether or not projects move forward or get pushed back. But we typically will look at whatever we can do to optimize the return against that asset and if something makes sense, either to delay or to pull forward, those are things we take into consideration to optimize the return on capital.

We’ll move next to Rob Stone with Cowen & Company. Rob Stone - Cowen & Company : If you could, just a little more color on you said that there were some projects where the revenue recognition criteria weren’t met in Q4. Can you add anything to that?

Yes, we had a couple of projects that we included in our initial guidance, and anticipated that we would close everything out by the end of the year. They slipped, and now we’ll start to recognize them in ’14. We’ve said this before. The timing of being able to discretely determine exactly when an asset, especially if you’re selling out of COD, which both of these assets would be, the revenue recognition can move by a few weeks. And if it does, it can fall out of the quarter. Now, we’ve also said in the past that we would not be held hostage to trying to deliver against a particular guided revenue number or EPS number in forego economics. So we’ll be very patient as it relates to that, and [unintelligible] transactions, and in this case we had a couple of projects that we had anticipated initially to fall into the quarter and now they fall into 2014.

And we’ll take our final question from Edwin Mok with Needham & Company. Edwin Mok - Needham & Company : Can you tell us how much of the $400 million that you talked about in the fourth quarter will come in in the first quarter? That’s my first question. And follow up, in terms of system costs, any color in terms of how much of a decline to the quarter for the year on system costs?

We’ll talk about that in more detail when we get into the analyst day, when we can give you a better view of each of the quarters and what we think the year is going to shape up like. So we can defer that discussion until then. In terms of the system [VOS] costs for the year, we continue to make good progress. We indicated at our analyst day, I think we were going to exit the year, including module, fully installed system costs, of $1.59. And we actually ended up better than that by about $0.03 or $0.04. So we delivered against the [unintelligible] and overdelivered against our expectations, and so we continue to make significant progress in driving down the total cost of the system.