Good afternoon, everyone, and welcome to First Solar's Second Quarter 2018 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 a 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, Abby. Good afternoon, everyone, and thank you for joining us. Today, the company issued a press release announcing its second quarter financial results. A copy of the press release and associated presentation are available on First Solar's website at investor.firstsolar.com. With me today are Mark Widmar, Chief Executive Officer; and Alex Bradley, Chief Financial Officer. Mark will begin by providing a business and technology update. Alex will then discuss our financial results for the quarter and provide updated guidance for 2018. Following their remarks, we'll then have time for questions. 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. I would like to start by discussing the global PV market. As you are aware, since our last earnings call, there has been significant developments in the global market, primarily stemming from policy decisions in China. The near-term impact has been an almost immediate collapse and probably seen across the crystalline silicon supply chain. While we have seen planned maintenance pull forward or other actions taken to better align near-term supply with demand, there's still an oversupply across the value chain which is driving declining module ASPs in both China and certain international markets. While it's still too early to fully assess the long-term effect these decisions will have on industry as a whole, the end result most likely will be more competitive PV power prices which will lead to demand elasticity both in China specifically and the global market in general. Additionally, we will likely see industry consolidation as uncompetitive technologies and financially unstable companies struggle to compete. While we will continue to carefully monitor these recent developments, we remain focused on leveraging our competitive advantages and executing our differentiation strategy. First and foremost, our cad-tel technology and specifically our Series 6 product is a competitive advantage. In an industry that suffers from a lack of differentiation, Series 6 has the potential to achieve a distinctive combination of low cost and high efficiency. While there is still a great deal of work ahead to realize its full potential, our unique technology is a key competitive advantage. In addition, as we look over the horizon of an oversupplied market, our nearly 11-gigawatt pipeline of future contracted shipments is a position of strength. While I will talk more about this in a moment, nearly 80% of our available supply from…

Thanks, Mark. Before discussing the quarter in detail, there are some key points to note as it relates to the first half of the year. From the outset of the Series 6 transition, we anticipated that this timeframe will be the lowest point of our earnings power due to lower module production levels and elevated startup expenses and ramp costs. In Q2, these expected elements combined with a quarter of unusually low sales. This is due to both the aforementioned Series 6 throughput and yield issues which impacted module cost and availability for projects already sold as well as to a delay in closing certain new project sales. Despite these challenges, we've been able to maintain our revenue and earnings per share guidance for the year while implementing plans that fully address these early stage manufacturing ramp challenges. It's also worth noting that in our February earnings call, we guided to an expectation of approximately 25% of our full year earnings being recognized in the first half of the year. With year-to-date EPS of $0.32, we are tracking slightly behind our expected earnings distribution across the year but remain on track to achieve our full-year earnings per share guidance. Turning to slide 9, I'll start by discussing selected income statement items for the quarter. Q2 net sales were $309 million, a decrease of $258 million compared to the previous quarter. Systems revenue as a percentage of total quarterly net sales decreased slightly to 66% in Q2 versus 72% in Q1. As indicated, the lower net sales in Q2 resulted from certain project sales pushing out of the quarter, lower revenue recognition on projects already sold, and a decrease in third-party module sales due to shipment timing. As it pertains to the timing of system sales, we indicated on the Q1…

And we will take our first question from Paul Coster with JPMorgan. Please go ahead.

Good afternoon. Thanks for taking our questions. This is Mark Strouse on for Paul. So I actually like to start with – so you disclosed you'd booked a little less than 1 gig since the last earnings call. But are you able to say what the bookings had been since the Chinese policy announcement change? And maybe if you can give details on that, just kind of anything high level you can say regarding customers potentially holding off on projects, just kind of waiting to see what the floor and pricing ultimately will be.

Yeah. So, if you look at what we highlighted on the earnings presentation deck, just from the end of quarter since June, right, so we're 26 days into it, we booked 400 megawatts of volume. So, of the 900, 400 was booked in the month of July. The 500 before that – a high percentage that also was booked in the month of June. So, there was only about a month between our last earnings call and when policy decision was made which effectively was May 31. So, we have been continuing to see good momentum. Actually I was dealing with our Head of Sales, Chief Commercial Officer today and he's got customers in and given us a list of opportunities which they need modules for. And we're actively engaged in that conversation for hundreds of megawatts for this particular customer. So, I haven't seen at least at this point in time yet a meaningful slowdown. You can also see it in our mid to late stage opportunities that we've highlighted. We still have over 8 gigawatts of opportunities sitting there. So, that hasn't come down. And we're seeing a lot a lot of opportunity on the PPA side. So, we're bidding actively. We're seeing a number of PPA particularly here in the U.S. relatively successful on what we've seen so far. Obviously it's a very competitive environment for PPAs on the development side and you're not going to have a very high hit rate but relatively pleased with that activity. And we are putting some points on the board as we highlighted on the call of 750 megawatts or so, so far on the development side. And we've got a number that we've been shortlisted on and we're in active negotiations with customers to finalize some PPAs that we'll hopefully be able to report on the next earnings call. So, generally it's still doing pretty good. Now that's the U.S. market. As you get outside the U.S. market, I would say there's probably more of a pause of wait and see maybe a little bit. Clearly, after the announcement was made, we saw ASPs drop very quickly, started to see them stabilize a little bit but clearly there are some customers now that probably will wait and sort of see when it plays out over the next couple of quarters and see where PPA prices go. The nice thing about us, we don't necessarily have to engage. If we have an opportunity with the module in an environment that we're very well positioned because of the energy advantage with our temperature and spectral response advantages, we'll engage opportunistically and selectively and we'll make sure we get the right ASPs. But we're in a good position right now relative to the uncertainty of the market.

Our next question will come from Philip Shen with ROTH Capital Partners.

Hey, Mark, Alex. Thanks for the questions. In your prepared remarks, you guys had talked about some issues with throughput and yields. I wanted to see if you could provide a little bit more color on each. So as it relates to throughput you talked about Ohio I think being at 60% and Malaysia being at 40%. And I know you plan to be at 100% by year-end or at least that's what it sounded like based on what you had been saying. But could Ohio or Malaysia be at 100% earlier, so can we see that perhaps in Q3? And it sounds like it's a framing back-end issue there. As it relates to (37:22), sorry, Mark, you had mentioned that the fleet average is 415 watts now. Do you expect the fleet average – what do you expect it to be in Q3 and in Q4? And how do you expect your efficiencies to progress? Because we had been, in some of our checks, seeing that you're actually perhaps improving faster than expected but wanted to get a feel for if there's a step function change that we could see ahead or should we expect a more kind of continuous kind of gradual improvement here?

Yeah. I'll take the throughput question first. And again the issue that we're having is really around – it's the back-end and it relates to the availability of the toolset, right. So, when you look at the toolset and if you say what are the most critical components to ensure full entitlement of the nameplate capacity that we need to achieve there's really three components. And when I look at it from the standpoint of order of importance, the first two and most important is really going to be cycle time on the tool and performance on the tool. Those are critical. So, if we aren't hitting cycle time and if we aren't getting the performance out of the tool, there isn't a lot that we can do to try to help enable that, right, other than redesigning tools or other issues that we have to think about to sort of address both of those. Cycle time and performance around the toolset from the front-end all the way through the back-end is at or better than our expectations. So, that's extremely important. The third component that we look to for the toolset is the overall availability. And the overall availability at mature state will specify capability around the tool. We believe the overall availability will still enable us to get to where we need to but we're not at a mature state yet with the toolset. And the way we manage through that is we're putting buffers into the back-end of the manufacturing process. So, think about it as we have a single point of failure on the production line today. If that tool goes down, everything upstream is shutting down and we're starting the downstream processing, right? So, that tool is critical because it's a single point of failure.…

Our next question will come from Brian Lee with Goldman Sachs. Please go ahead. Brian Lee - Goldman Sachs & Co. LLC: Hey, guys. Thanks for taking the questions. Maybe the first one is just on the manufacturing, given the pricing collapse you referred to, Mark, and the fact that Series 6 is pricing higher than Series 4. Just wondering if it makes sense or if you're contemplating any shifts specifically to Malaysia, the one facility you haven't committed to a timeframe for shifting from Series 4 to Series 6. Does that potentially get accelerated and come offline sooner given the cyclical dynamic we have here? And then just a follow-up would be around just cost competitiveness here again on that same topic. We're seeing global module ASPs trending toward the mid-$0.20 per watt range. I think there's a general assumption in the marketplace that your targeted cost per watt for Series 6 will be in the low $0.20 per watt when fully ramped in mid to late 2019. Correct me if I'm wrong on the timing. But what are you kind of thinking in terms of what your cost advantage versus peers looks like given real-time pricing? Has that potentially shrunk versus your original base case assumptions?

Yeah. So, I'll just talk through on the prioritization, how we think about Series 4 production in KLM 1, 2. We are looking – we are continuing to reassess and evaluate not for the horizon through 2020. We're looking and spending time on it. How do we best position the most competitive posture that we can have as we enter into 2021? And so, what we're thinking through is, what are all the critical dependencies knowing the uncertainty that 2021 can have? And as we continue to book our volumes up through 2020, we're looking across that horizon out beyond 2020, into 2021, in particular. And, ideally, we're going to want as much Series 6 production as possible. Scale is going to be important. We got to get to efficiency and the cost entitlements where we need to be and Series 6 is going to be a critical enabler of that. So as we think through those various levers, we will continue to evaluate our current commitment around Series 4 and the timeline of which we'll run production in particular to KLM 1, 2 relative to opportunity to drive more Series 6 volume into 2021. So still to be determined. We haven't made any conclusions. We're happy with what we have booked for that business right now but – for that volume. So we'll continue to evaluate that, again, more from how do we best position ourself for success long-term into 2021 and beyond. As it relates to cost competitiveness, what we assumed when we did our analysis, and again, I also want to make sure that when you think about that $0.25 number that you referenced, you got to add $0.02 or so, compare that to our $0.20 or what people think the numbers are, the low 20s, right? So, let's – or you take $0.02 off my number. I don't care how you look at it, right? If it's $0.25 for them, we're at $0.18 or if you're targeting us at $0.20 and their $0.25 becomes $0.27. So, make sure that's in your math and a lot of times people don't always include the logistics costs and the warranty costs. That number is relatively in line, maybe $0.01 or $0.02 lower than what we had assumed when we did our business case around Series 6 and where we thought we could get in the competitive position that would create for us. And the other side of that equation you got to keep in mind is the energy upside. So, we'll capture it and we'll be cost advantaged and we'll have the energy upside and we'll capture the value on that side of the ledger as well. So, yeah, the market is (46:25-46:29) and we're positioning ourself for long-term success and we're very happy with what Series 6 will enable for us.

Our next question will come from David Katter with Baird. Please go ahead. Benjamin Joseph Kallo - Robert W. Baird & Co., Inc.: Hi. This is Ben for David. How are you guys?

Hey, Ben. Benjamin Joseph Kallo - Robert W. Baird & Co., Inc.: Hey. I just wanted to make sure I heard something correctly. So, you said that you signed the new bookings which were small, and maybe you can talk about why – I guess because they're so far out in the future, but they were at the same ASP as (47:07) before Series 6. Is that what you said?

Ben, it's really hard to hear. What we said – the comments I made in my prepared remarks were the bookings that we're seeing right now on year-to-date on Series 6 is about 6% higher than what we have booked on Series 4. So think about it adding $0.02 or so, right? If you think about where the ASPs are, the ASPs on Series 6 is about $0.02 or so higher than Series 4. And remember, Series 6 is about 40% lower costs. So when you combine the two and you look at the margin entitlement, the fact we're capturing the upside on ASP which we knew we would with the larger form factor and quality of the product and still enable that lower cost entitlement, I think, we're very happy with what we're seeing so far. The other thing I said is that the ASPs that we're recognizing in 2018 are essentially consistent with what we recognized in 2017 but the volume that we're booking this year is carrying us further out. We're booking 2018 volumes that are carrying us into 2020. We didn't book as much volume in 2017 for 2020's shipments. And so as you would normally expect, further out in the horizon, ASPs would trend down a little bit. But I'm very happy that we got a relatively consistent ASP in 2018, similar to what we have in 2017 and we'll carry that profile of shipments all the way through 2020.

Our next question will come from Jeff Osborne with Cowen & Company. Jeffrey Osborne - Cowen & Co. LLC: Yeah. Good afternoon, guys. I had two questions. One is if you can just address the impact of the IRS extension for both your pipeline and your customers and then any comments on either de-bookings or contract renegotiations that your customers had with you?

Yes. So I guess on the ITC extension, we think it's probably a positive in the long run for the system business. I think in the longer-term it may delay some of the utility ownership of solar as you're going to see continued competitiveness of PPAs with ITC versus utility-owned generation and rate basing. And that's where you're going to have a delay of a transition which may actually delay what could be a longer, more optimal capital structure moving away from tax equity which is less efficient and more expensive rather to a more traditional infrastructure financing option. But I think in the short-term, yeah, we see it as a positive.

As it relates to the customer and the contracts, nothing new there in terms of what we said before. There are allegations between both parties. There's security associated with it. There's termination penalties associated with it. I think we looked at it again. I think we're 90-plus-percent, 95%, maybe higher than that of our contracted pipeline of module sales which I think is around 8 gigawatts. All has security associated with it. Again, I think spirit of which we negotiated these contracts with our customers was again somewhat risk sharing and an understanding of fair economics that would enable their projects to be successful. And that's the way we're moving forward. And our customers are honoring those obligations as well.

And our final question will come from Colin Rusch with Oppenheimer. Please go ahead. Colin Rusch - Oppenheimer & Co., Inc.: Thanks so much for sneaking me in. Could you talk a little bit about the competitive dynamics in the development business, particularly as it relates to integration of energy storage and what you're seeing in terms of pricing from your competitors and how difficult it is to close projects at this point?

Yeah. So development is obviously – it can be – it depends on where you are. It depends on how the RFP is structured. It depends on what bid bonds have to be posted in order to bid, what dollars are at risk, the tenor of the PPA of 15 years versus 20 or 25. I mean, every opportunity on the development side can differ relative to its attractiveness and relative to its competitiveness, relative to how aggressive things can be. And we've got to be very selective in that regard because you can't get into certain opportunities where you got developers, especially if it's a free option, and you got developers that are just going to make crazy assumptions around the installed cost or they are going to assume some huge hockey-stick on a merchant curve. And a merchant curve may have an assumption of a carbon tax embedded in or may have an assumption of storage already incorporated even though the asset doesn't have the capability to create firm power. I mean there's some – all kinds of dimensions and flavors that can happen that are out there that can really drive some really aggressive assumptions. What a developer is only worried about is capturing that PPA and flipping it to somebody else and then let them worry about it over the long run. They'd make their money and they move on, right. So it can be very competitive and we've got to be very selective with where we play and how we play and site selection and interconnection positions can be critical at times. And then so we have done selection. That's also why I said in my comments that I don't want a very high win rate on development. If we're winning a very high percentage…

And, ladies and gentlemen, this does conclude today's conference. Thank you all for your participation. You may now disconnect.