Good afternoon, everyone, and welcome to First Solar's Fourth Quarter 2016 Earnings Call. This call is being webcast live on the Investors section of First Solar's website at firstsolar.com. At this time, all participants are in listen-only mode. As a reminder, today's call is being recorded. I would now like to turn the call over to Steve Haymore from First Solar Investor Relations. Mr. Haymore, you may begin.

Thank you, Justin. Good afternoon, everyone, and thank you for joining us. Today, the company issued a press release announcing its fourth quarter and full year 2016 financial results. A copy of the press release and associated presentation are available on the Investors section of First Solar's website at firstsolar.com. With me today are Mark Widmar, Chief Executive Officer; and Alex Bradley, Chief Financial Officer. Mark will provide a business and technology update, then Alex will discuss our fourth quarter and full-year financial results and provide updated guidance for 2017. 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 such as free cash flow, adjusted operating expenses, adjusted operating income or non-GAAP EPS, we have reconciled the non-GAAP measures to the corresponding GAAP measures at the back of our presentation. Please note, this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to review the Safe Harbor statements contained in today's press release and presentation for a more complete description. It is now my pleasure to introduce Mark Widmar, Chief Executive Officer. Mark?

Thanks, Steve. Good afternoon, and thank you for joining us today. While market conditions and pricing remain challenging in the fourth quarter of last year, we finished 2016 with strong results. An important part of our DNA at First Solar is to set challenging goals and hold our-self accountable to them. At our guidance call in December of 2015 and as a part of our Analyst Day in April of 2016, we provided operational and financial metrics for investors to measure our progress against. As Alex will review later, we have been able to meet and even exceed these targets. First Solar's ability to deliver on commitments also extends to our multiyear plans. For instance, at our 2013 Analyst Day, we outlined a goal to achieve an exit efficiency of 16.9% at a module cost per watt of $0.45 by the end of 2016. Nearly four years later, our best line exited 2016 at over 16.9% conversion efficiency and our module cost per watt for the year beat our target by a wide margin. These are remarkable achievements that demonstrate the expertise and execution capabilities of the First Solar team, and give us confident as we again set challenging goals related to the Series 6 program. Since making the decision to accelerate our transition to Series 6, the First Solar organization has been completely focused on executing to our planned roadmap. These efforts fall under the areas of both product and market readiness. While we'll be covering our product readiness efforts on today's call, we have been actively engaged with customers and ecosystem partners to educate them and solicit feedback from them on this powerful new product. We are very pleased with the initial customer reaction in market readiness assessment. We will provide more details related to this ongoing work…

Thanks, Mark. Before reviewing the financial results for the quarter, I'll turn first to recap our accomplishments in 2016. In terms of efficiency, we met the targets we outlined in April at our Analyst Day. Our 2016 full fleet efficiency of 16.4% is an 80-basis point improvement versus 2015 and a remarkable 320-basis point improvement since 2013. Our full fleet exited the year at 16.7%, also meeting the target we set in April. In addition to achieving our efficiency target for 2016, we also met and even exceeded the module cost per watt target that we set. While we did not disclose that number, we beat the 2016 cost goal and our cost per watt decreased by 16% compared to full-year 2015. From a financial perspective, we also delivered strong results for the year. The initial 2016 earnings per share midpoint we provided in late 2015 was $4.25 per share. In November, we raised our earnings midpoint to $4.70 per share. Our non-GAAP or operational earnings of $5.17 per share for the year exceeded both our original and revised guidance for EPS. While our revenue and net cash came in below the initial guidance provided, that's a result of revised timing of certain project sales. So, in summary, we delivered on our commitments this past year and continue to apply the same discipline and focus to the objectives we've outlined for the coming years. Beginning on slide 12, I'll highlight the operational achievements for the past quarter. Fourth quarter module production was 760 megawatts DC, a decrease of 2% from the prior quarter, due to the production stop on certain lines in Ohio related to our Series 6 transition. The ramp down of these lines also impacted our capacity utilization, which decreased to 92% in Q4 versus 97% in the…

Well, thank you. Our first question comes from Paul Coster with JPMorgan.

Yeah. I just want to check on Moapa. The $300 million in revenues that have been added in, is not actually a change to the economics, it's just merely an accounting adjustment as a function of how you've negotiated the tax equity arrangement. And then I've got a quick follow-up.

Yeah, that's right. So, there's no change to the economics. It's just an accounting change due to transactions, tax equity and cash equity now recognize both together. So, it just creates higher revenue, but doesn't change the overall economics.

All right. And then the 2017 guidance, back-end loaded year. Can you just give us a little bit of color behind that? What gives you the confidence in the second half ramp? And whether the gross margins will be sort of constant or whether they inflect as well? Thank you.

Yeah. I'll take, I guess, on the guidance side. So, Paul, I think one of the things that we will highlight is that the bookings momentum that we're starting to see now, and again as we highlighted in the prepared remarks that, there was a period of time that we were practically out of price position, doing a little bit of price discovery in the marketplace to really understand where the market clearing price was going to be. I mean, it was a very significant disruptive decline in module ASPs and starting in July. And what that did is, is resulted in lower bookings momentum really through towards the latter half of 2016. And we've seen significant momentum moving forward, we just recently booked since the beginning of this year over 400 megawatts. And so, what that means is, this going to position a lot more volume, the module shipment volumes that we had anticipated is going to be positioned towards the second half of the year. So, part of it is that. The other piece is, is that, the current profile of the timing of the revenue recognition on our systems business will be more heavily weighted towards the second half of the year. So, I have confidence in terms of our profile from the standpoint of the book business that we have right now. We have a very strong booked module volume at this point in time, given that what we've now been able to book over the last, call it, four, five months, plus what we have contracted now for the systems business and where we are and in that side of the house, we feel very confident with. Now, all that what I would say is, the wildcard that could influence that will still end up being the sell down of our systems business. We're largely on our way with our Playa negotiations right now on our switch project. CA Flats, we're still moving forward with that. And so, the timing of that could impact the second half volume ramp that we're anticipating, but again that is just a movement of an economics that could shift from third and fourth quarter or potentially fall into the beginning of 2018, but as always said, the system business can be little lumpy. It doesn't impact overall economics, it's just timing associated with that. And like I said, is there some risk to that, but other than that, we feel highly confident with the balance of the year forecast.

And our next question comes from Brian Lee with Goldman Sachs. Brian Lee - Goldman Sachs & Co.: Hey, guys. Thanks for taking the questions. Just had a couple. I guess, first, Mark, on Tribal Solar, SCE was already a PPA owner. So, wondering if you guys had done any work on trying to re-strike that PPA. And then, if you look at the list, there's 650-or-so megawatts of other SCE projects for 2018 to 2020. So, any update you can provide on the status of those, any of those maybe potentially having similar risk to what you saw with Tribal Solar. And then, I had a follow-up.

Yeah. So, we were in active and ongoing discussions with SCE as it relates to Tribal Solar. The issue is not with SCE. The issue is ultimately with the tribe and their desire for completion of the project on tribal land. Initially, they granted the option and their consent for the construction of the project on their reservation. Because of cultural issues and evolution of changes of certain leaders within the tribe and momentum from the balance of the constituents, there was a change in the support for the project. We tried to resolve those issues. We could not successfully do that. We had also had incurred a relatively small increase to the original cap on the network upgrades. We effectively used that. Given we were unsuccessful in our ability to influence the tribe to support the project, and without their support, we would not be able to complete the project. We effectively use that provision under the cap of the interconnection agreement effectively or the upgrade to the network to result in a termination of the PPA. It's a unique situation. We don't have any other similar situations. We've done other projects with, for example our Moapa project was on tribal land. We had no issues working in with the tribe, the Moapa tribe. The current situation that we had there was more of a challenging environment, and it resulted in unfortunately the termination of that PPA. The balance of the projects that we have with SCE, none of them are on tribal land, and we have full commitment and support with SCE for those projects. Brian Lee - Goldman Sachs & Co.: Okay. Great. That's helpful. Just a second question, and I guess a little bit similarly on Barilla. Maybe a question on timing. Why write it down now? It's been, my understanding, operating for some time in the current low power pricing environment. So, would just be curious on why it wasn't written down sooner. Thank you.

Yeah. So, Brian, I mean, we've been following the project and we've now, we feel, got enough operational data to make a better determination of long-term prospects for the project. So, Barilla was originally developed to penetrate the Texas market and to be a test like for new technologies. We constructed it with lower bin module, so we had a higher installed cost there than we might otherwise have had, and it's given us some benefits around our ability to win the East Pecos deal, and launch of our 1,500-volt architecture. But we looked at it now and based on where we see declining spot pricing at the moment and given the recent operational edge, we felt now is the right time to write that down.

Yeah. I think in the accounting world, Brian, you may know, I mean, there's obviously the triggering events. And one of them is, do you have a potential impairment and is that impairment other than temporary, right. And even though there was indications through there are the operations of the asset, at that point in time, it was unclear whether or not the potential risk of an impairment was going to be permanent in nature, and what has ended up happening given where the current power prices are and how we see that evolving in the near-term, it trigged an event that says, yes, now we believe that the impairment is other than temporary. It also is, as Alex indicated is that, we did use low bin modules. This was really was viewed more as an R&D in endeavor, and to use that as an opportunity to continue to test new products and whether it's modules, whether it's inverters, whether it's other components within the architecture, we'll continue to use that site for that. So, there inherently will be value there. So, I look at this as, it's mainly just it's an accounting item. We'll continue to sell the power that's being generated off that asset, but from a book value standpoint, we had to write it down.

And our next question comes from Tyler Frank with Robert Baird. Tyler Charles Frank - Robert W. Baird & Co., Inc. (Private Wealth Management): Hi, guys. Thanks for taking that question. Can you talk a little bit more about the overall marketplace? You made some comments that you were out of position in terms of pricing in the back half of last year. So, what sort of adjustments did you have to do in order to start getting bookings in the first half? And should we expect modular sales to have extremely low margins based on the current market pricing? And how should we think about each individual market in terms of ASPs currently?

First off, as it relates to each market on an ASP basis, I would argue that the relative baseline of crystalline silicon prices relatively consistent globally. But again, where we can capture better value is selling into markets where we have an inherent energy advantage and capture the value of that energy that's being generated and we can price at a premium. So, if you look at the bookings that we've recognized this quarter, I would say, there's a number of them, module-only sales that we were able to capture reasonably meaningful premium to where crystalline silicon is pricing at this point in time, because we've sold the products into geographies where there is inherent energy advantage and we capture that. When you saw the module pricing decline as rapidly as we did and starting in July, I think it's very prudent to go and continue to test it and to see where the prices are starting to settle out at. We have started to see prices settle a little bit. They seem to be in a relatively consistent range when we think about not only within the U.S., but globally. And so, we've just adjusted to that market pricing and we're continuing to go on and sell the value of the energy and we've been successful in doing that and starting to show up in our bookings. Now, granted, yes, with the margin that we're realizing on the Series 4 product be at a lower margin than we would look to as a long-term entitlement, clearly it should, because as we've highlighted, the reason we're transitioning into Series 6 is because of the smaller form factor of Series 4, which in different regions of the world can result in a BoS penalty that could be in the range of $0.06 to $0.08. So, that's a meaningful delta, plus Series 6 comes at a much lower cost profile. And as we highlighted in our last call that Series 6 will have a profile that's in the range of 40% lower than Series 4. So, when you capture the energy yield advantage, slightly higher efficiency product in Series 6 versus Series 4 at a much lower cost profile. Well, yes, it's a very challenging market, having a Series 6 product in this market environment, we couldn't be better positioned.

And our next question will come from Krish Sankar with Bank of America.

Yeah, hi. Thanks for taking my question. Mark, I just want to follow-up on one of your comments you mentioned on the module pricing. You said it's stabilized. Do you feel like the module pricing for the industry is bottoming out, or do you think there's another leg down? And then, a follow-up on the cost profile, Series 4 versus Series 6. If I remember right, Series 4 had about $0.07 per watt of depreciation cost. What do you think it's going to be for Series 6? Thank you.

So, look, I think the relative stability of the market is always going to be determined by supply and demand. And there's obviously triggering events similar to what we saw in the 2016, whereas it relates to the second half of 2016 where there was a pretty significant disruption of demand, primarily because of tremendous build out of solar in the first half of 2016 in China. That risk profile will exist on a perpetual basis. Whenever we get into an imbalance of supply, demand to the extent a particular geography that is a meaningful component of the overall global demand perspective, starts to see a shift or a decline, then they always are going to be subject to these volatile times, and ASPs can change very quickly. What we're seeing right now is a relatively stable environment, but it could change very quickly similar to what it did in 2016. So, we'll have to keep a watch on that. And what we have said before, our assumption in long term is that this perpetual oversupply will exist, that our competitors will continue to sell at or below cash costs in order to run their factories as efficiently as possible. And we just have to create a product platform, which is why we're transitioning to Series 6 that will enable us sustain that very challenging market environment; sell the value of the energy, capture the cost entitlement of the product and compete in, even though what some would argue, is an unsustainable market environment. It may be for some of our crystalline silicon competitors, but we need to create a business model that can sustain that type of environment. As it relates to the depreciation for Series 6 versus Series 4, I'll let Alex take that question. So, anyway, I guess, Alex didn't hear the entire question. So, on Series 6, the depreciation, you could look at it from the standpoint of the CapEx is approximately half of Series 4. So, from a greenfield standpoint, and given that we are actually doing a brownfield expansion for Series 6, we're going to see a lower depreciation expense. We haven't given the exact number, but you can envision that it will be at a lower CapEx – or depreciation expense, excuse me, than the Series 4 product, just largely because the CapEx per watt is lower.

Yeah, Krish. Apologies for not hearing that, but if you look to the numbers we gave in the guidance call we gave in November, we guided to a CapEx per watt there. And you can look at that relative to the numbers we've given historically around Series 4, and look at those two in find a relative number on depreciation.

And our next question comes from Vishal Shah of Deutsche Bank.

Hi. Thanks for taking my question. Mark, just on the systems business. Some of the challenges that you're hearing and seeing in the marketplace today with respect to the corporate tax reform, how is that impacting or could impact margins in the second half of the year? Is that incorporated in your guidance? And as we think about Series 6, I know you had said low- to mid-$0.20 per watt cost targets. It looks like your CapEx is better than what you were planning before. So, are we looking at the low $0.20s as a range for your Series 6 cost target? Thank you.

Yeah. I'll take the Series 6 cost and I'll let Alex take the tax administration discussion. So, yes, I mean, we're very happy with where we're trending right now from a CapEx perspective. As you would envision, there are many, many different variables that ultimately are going to impact the final cost profile for Series 6. Throughput yield will impact that as well. A lot of things that we have to continue to move forward. We're very encouraged with what we're seeing so far, and obviously having a lower CapEx per watt is obviously a very good indicator of the opportunity set. I would say the challenge that we have right now, the one that we need to stay as aggressively focused on as possible for Series 6 is really going to be our bill of material cost. So, we need to continue to drive down our bill of material cost. We have our roadmap to make that happen. There is a lot of work, though, to ensure that we can get there. And we're going to have to work aggressively in leveraging and negotiating and partnering with our suppliers to ensure that we can do that. So, encouraged by the CapEx early indications, but obviously a long way to go to actually achieve and potentially even do better than our expectations around the Series 6 cost profile.

And, Krish (sic) [Vishal], as it relates to tax, so I mean, firstly, our guidance today is based on current tax policy, and assumes no changes to that. If you look at it on a project level, the two key drivers to value there are going to be ITC and depreciation. On the ITC side, I think it's unlikely we'll see any change. If you look at the last time the extension came through, it was supported strongly on a bipartisan basis for that extension. Renewables has been responsible for a pretty significant job creation and it already has a finite term. So, if you look at history around tax credit elimination, normally you see a transition period. So, we would expect that there'll be no change to the current ITC schedule. On the depreciation on makers side, who knows what that change will be. It's hard to estimate, but we expect any change there would be offset by a corresponding change in tax rates. What I will say from a structuring perspective is that the uncertainty does create some challenges. There are players in the market who are still open to doing business. So, we don't see an issue with getting tax equity on deals, but there may be changes to the amount of tax equity going into deal to the structures and perhaps to the risk profile the tax equity is looking at in the short term. But we don't see any issue with raising tax capacity, tax capital at the moment.

I think your question around our guidance, and I think Alex mentioned this in the prepared remarks in the script, our guidance assumes there is no change. It's just too speculative at this point in time to make any significant assumptions as what could happen. Way too many moving pieces, so we're assuming that effectively all the components whether it's the ITC, whether it's the depreciation, interest expense deductibility, we're assuming all that stays as is.

And our next question will come from Philip Shen with ROTH Capital Partners. And our last call will come from Philip Shen. Go ahead, please. Again, Philip Shen, your line is open, please go ahead with your question. Once again, Philip Shen, your line is open. Please proceed with your question. Sure, sure, we will. Our next question will come from Colin Rusch with Oppenheimer. Colin Rusch - Oppenheimer & Co., Inc.: Thanks so much. Guys, as we think about the cadence of bookings as we go through the balance of 2017 into 2018, when do you start really focusing on the Series 6 product and building a backlog for that besides your own project backlog?

Yeah. So, I mean, it's a good question. It's one of the things that we highlighted. So, today, we spent a lot of time talking through the product readiness and what we're doing in that regard. The next call, Q1, we'll talk more from a market readiness standpoint, and there is a lot that needs to be done in that regard, right, in terms of understanding the spec, developing what we refer to as a PAN file that ultimately is used to do the energy prediction. There's engagement with independent engineers, right, that they have to be involved with as well, so they can help provide kind of that third-party voice to our customers, and as it relates to the product and its performance and quality standards and everything else. So, there is a lot that we need to do. What I will tell you is that there's been a tremendous response so far from our customers. Actually, I was talking with one of them yesterday as well and everyone wants to be a launch for Series 6. Now, the way we've described it to a lot of our customers is, the vast majority. And if you look at our, what we'll report in our 10-K, which will be filed tonight and be available tomorrow, we're going to show close to 2 gigawatts of projects in our contracted pipeline. Now, some of that is near-term, some of that will be Series 4, but really, easily can look at that pipeline and there's going to be north of 1-gigawatt on a DC basis of opportunities for Series 6, given the timeline of those projects. The second half of 2018, we'll be producing 1-gigawatt of Series 6. So, the early production will go to our own projects. So, we're really talking about having the opportunity to sell through Series 6 starting in the 2019 timeframe. Now, module-only activity in bids aren't really happening today per se out in that horizon. Some markets, yes; for the vast majority, no. Development opportunities will start to happen out in that horizon. So, we can use that Series 6 and the leverage of Series 6 to bid into development assets as well in a longer dated horizon. So, we do expect and we do have pipeline. We highlighted in today's call, we've got at least in mid-to-late stage negotiations about 500 megawatts right now of Series 6. That all should drive momentum. Hopefully, we'll realize in some of those bookings as we progress throughout the year, but the pipeline will continue to build. We'll start to see bookings for Series 6 in the second half of the year, but we clearly would expect a much stronger activity around confirmed bookings for Series 6 as we get into 2018.

Thank you. And that does conclude today's conference call. We do thank you for your participation today. Have a wonderful day.