Ladies and gentlemen, thank you for standing by. Welcome to the Canadian Solar's Second Quarter 2015 Earnings Conference Call. My name is Whitley and I'll be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference is being recorded for replay purposes. I would now like to turn this call over to David Pasquale, Global IR Partners. Please go ahead.

Thank you, operator, and welcome, everyone to Canadian Solar's second quarter 2015 earnings conference call. Joining us on the call today are Dr. Shawn Qu, our Chairman and Chief Executive Officer; Mr. Michael G. Potter, Senior Vice President and Chief Financial Officer; and Mr. Ed Job, Director of Investor Relations. Before we begin, may I remind our listeners that in today's call management's prepared remarks will contain forward-looking statements, which are subject to risks and uncertainties, and management may make additional forward-looking statements in response to your questions. Therefore, the company claims the protection of the Safe Harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from management's current expectations and, therefore, we refer you to a more detailed discussion of the risks and uncertainties in the company's annual report on Form 20-F filed with the Securities and Exchange Commission. In addition, any projections as to the company’s future performance represent management's estimates as of today, August 18, 2015. Canadian Solar assumes no obligation to update these projections in the future, unless otherwise required by applicable law. At this time, I would like to now turn the call over to Dr. Shawn Qu. Please go ahead, sir.

Thank you, David, and thank you for joining us for the call today. We are pleased with our results and with the progress we have made in execution of our strategy. Our results continue to reflect our leadership in both solar module and the downstream solar energy business. In Q2, our revenue and gross margin exceeded our guidance despite a shift of our revenue mix towards module sales compared to the last few quarters. The shift reflects a change of our downstream energy business strategy from built-to-sell to build-to-hold and the potential launch of our renewable energy YieldCo. Our module sales were led by several key markets such as Japan, U.S., India and China, with each of these markets contributing at least 100 megawatt of shipment respectively. The shipment to Japan, however, exceeded 200 megawatt in the quarter. China has contributed significantly in Q2 although we have continued its premium pricing and conservative product control policy. This reflects the increased recognition of our product quality and the brand value in this market. In Q2, our energy business developed and delivered solid results. In Canada, we reached substantial completion of 134 megawatts Samsung Phase I project, which is the largest solar power plant in operation in the country. In addition, we closed the sales of LunarLight Solar Power Plant for C$65 million and made good progress on the 141 megawatt Samsung Phase II project, which we expect to complete in Q3. In U.S., we started the construction of four solar power plants totaling 653 megawatt. In Japan, we connected to the grid five solar power plants totaling 5.2 megawatts and expanded our late-stage project pipelines to 670 megawatts of which 336 megawatts have secured grid capacity. Even after accounting for significant project deliveries in Canada, we were able to replenish our…

Thank you, Shawn. Net revenue for the second quarter of 2015 was $636.7 million, down 26% sequentially and up 2.1% compared to the year ago period. Q2 revenue came in above our guidance range of $570 million to $620 million. Gross profit in Q2 was $96.5 million compared to $153 million in Q1 and $118.2 million in the comparable period last year. Gross margin in Q2 was 15.2%, compared to 17.8% in Q1, and 19% in the second quarter of 2014. This was above our Q2 guidance of 13% to 15%. The sequential decrease in gross margin was primarily due to a one-time catch-up of additional countervailing and anti-dumping costs due to the new U.S. Department of Commerce ruling and lower margin from the Company's total solution business in Canada due to fewer solar power projects being sold in the quarter. Income from operations was $32.5 million in the second quarter of 2015, compared to $78.7 million in the first quarter of 2015, and $67.7 million in the second quarter of 2014. Operating margin was 5.1% in the second quarter of 2015, compared to 9.1% in the first quarter of 2015 and 10.9% in the second quarter of 2014. Net foreign exchange loss in Q2 was $2.8 million, compared to net foreign exchange gain of $6.8 million in Q1 and net foreign exchange gain of $4.4 million in Q2 of last year. Income tax expense in Q2 2015 was $2.7 million, compared to income tax expense of $19.7 million in the Q1 and income tax expense of $8.3 million in Q2 of last year. Net income attributable to Canadian Solar shareholders for Q2 2015 was $17.9 million, or $0.31 per diluted share, compared to net income of $61.3 million, or $1.04 per diluted share in Q1, and net income of…

[Operator Instructions] Your first question comes from the line of Paul Costner with JPMorgan. Please proceed.

Hello, this is Mark Strauss on for Paul. Thanks for taking our questions. Just a couple of quick ones regarding the YieldCo, if I can. So I understand what you say about having everything being on track but then having several alternatives if needed. But in order to proceed as planned do the current yields that you are seeing on the market for the other YieldCos, are they still value accretive or is launching YieldCo dependent upon yields getting better by the time you launch?

Yes, this is Michael. I don’t want to get into a long description of where yields need to be particularly since they’ve been quite volatile in the last month. At the yields of the YieldCos that serve OECD countries and have strong projects. Today’s yields are still value accretive. However, they’re not in a range you would hope to have robust YieldCo launched in it. If they remain elevated for long periods of time we do have alternatives, we believe that they are going to return to more of lower level and a more normal level within the next six months or so and that lines up with our timing. However, we do have good projects that are in high demand and we do have alternative plans should that be necessary.

Okay and then just a quick follow up on that. And then if push comes to shove and you decided the best thing to do is sell the projects, can you just talk in very general terms if need just what the – I mean I think you talked about the revenue impact from your [hold backs] to what the EPS impact might be or even the operating income might be from those particular projects?

And I don’t have the revenue impact for the entire period; it’s about a $1 billion we estimate for this year, if we’ve been selling projects instead of building and holding the projects. That assumed that we would be selling the recurrent projects at NTP and using percentage of completion accounting which is usual for U.S. projects. In the back of the envelope estimate that additional gross margin could be anywhere in the range of approximately $500 million to $700 million to $800 million depending on the assumption you used for the projects that would go into the launch of the YieldCo if they were sold. We believe that we would still achieve close to that even with today’s market conditions because the purchase price from assets for long-term holders such as life insurance and pension funds have not changed very much. It has the advantage of monetizing the projects quickly and returning your capital on the profit quickly, but it does reduce your long-term return for the shareholder and it does remove that stable partner and ability to time your sales into a YieldCo. So at present time the YieldCo is still our main plan and we still continue to be working hard on it, but we are certainly not as I said overly aggressive and believe in being overly leveraged and if necessary, we’ll switch to a different plan if the first one doesn’t work.

Great, makes sense. Okay, thank you very much.

[Operator Instructions] Your next question comes from the line of Philip Shen with ROTH Capital Partners. Please proceed.

Hey guys thanks for taking my questions. In terms of your tariff compliance capacity I believe you are launching 700 megawatts in 2016. Can you update us in general on your latest review of capacity expansion? Can you see CSIQ expanding beyond the 700 megawatts already discussed and if so, where could it be located and over what timeframe?

So you are talking about U.S. tariff and the strategy to deal with U.S. tariff. We are carefully looking into it. As you know there are several ways to deal with the U.S. tariff on one hand, it is always a possibility that the industry from two countries and two government discuss and find a solution or settlement and meanwhile the another parallel strategy is to establish facilities in the non-tariff regions. We are carefully examining both situations unfortunately there’s not much I can say or I can disclose at this moment. However, I believe being a little bit conservative and a little bit slow moving on this front we will prove to be proven in long-term because whatever decision if you make that decision then the decision will have a long-term impact. So although on one hand we have seen some significant impact from the U.S. tariff few days on Q3 and actually also on Q2 however I do think that want to think through and watch the situation I think through before we make the move.

So we already have by the end of the year announced between OEM partners at our own capacity we are putting in Southeast Asia close to 600 megawatts of capacity maybe 700 megawatts of capacity, that’s module capacity. So we would be missing sell capacity and the two alternatives that we would do is either partner with somebody else who has sell capacity outside of the tariff countries which is Taiwan and China or to do our own sell factory in non-tariff country. So now that we know what the tariff determination is we are much more clear and what we need to do in terms of sell capacity so we can come on line with tariff re-modules. Obviously those with also help in other places with tariff barriers such as the EU but the primary initial focus would be the U.S. market.

Great thanks. Between Q1 and Q2 we saw on your balance sheet a drop in current project assets from about $40 million down to $65 million in Q2. Longer-term PP&E however increased to $1.2 billion from about $600 million. Can you talk about why current project assets have been what appears to be reclassified as non-current? Thanks, Mike.

Yes, Phil that’s just a straight accounting change when you move away from your plan to sell the projects to hold and operate the projects they become CapEx versus inventory. So we need to reclassify that, put any new projects into PP&E.

Okay great thanks. I will jump back in queue. End of Q&A

There are no further questions in queue. I will now turn the call back to CEO, Dr. Shawn Qu.

All right. So it looks like the summer earning call is more quicker than a normal earning call, but still I appreciate all the people who joined us on earning call during the August month and also I appreciate the continued support from you and if you have any further follow-up questions after today’s call, please contact us and have a great day.