Good afternoon, everyone, and welcome to the First Solar's third quarter 2013 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 Mr. David Brady, Vice President of Treasury and Investor Relationships for First Solar, Inc. Mr. Brady, you may now 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 third quarter. 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 update on significant business and technology developments and then Mark will discuss the third quarter results and provide updated guidance for 2013. 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 a few cases where we report non-GAAP measures, we have provided a reconciliation to GAAP equivalents at the back of our presentation. Please note that during the course of this call, the company will make projections and other comments that are forward-looking statements within the meaning of the Federal Securities Laws. The forward-looking statements in this call are based on current information and expectations and are subject to uncertainties and changes in circumstances and do not constitute guarantees of future performance. Those statements involve a number of factors that could cause actual results to differ materially from those statements, including the risks as described in the company's most recent Annual Reports on Form 10-K and other filings with the Securities and Exchange Commission. First Solar assumes no obligation to update any forward-looking information contained in this call or with respect to the announcements described herein. It is now my pleasure to introduce Jim Hughes, Chief Executive Officer. Jim?

Thanks, David. Good afternoon and thanks for joining us for our third quarter 2013 earnings call. I will begin by taking a moment to recognize some of this quarter's remarkable achievements. Our business development team booked 860 megawatts DC of new business, compared to shipments of 406 megawatts in the quarter, a ratio of over 2 to 1 and resulting in a year to-date book-to-bill ratio of greater than one. We had earnings per share of almost $2 on a GAAP basis significantly above expectations and due primarily to the sale of the ABW projects in Canada and commencement of revenue recognition from the Desert Sunlight project. We are now flash-testing modules at our Perrysburg facility with the conversion efficiency of 14.1%. Just result potential to open up new business segments to us and significantly increase our total addressable market and finally at a time when others are no longer reporting module cost per watt. We have had the largest quarterly decline in our cost per watt since 2007, falling $0.08 to $0.59 on average in Q3 and in line with our competitor's report cost per watt excluding freight, recycling and warranty charges our core figure is now oil $0.50, $0.49 to be exact, the lowest in the industry. These results are an impressive validation at the in technology and cost roadmaps that we provided during our Analyst Day in April and upon which we will continue to execute. Slide 5 shows the chart that we presented on Analyst Day, which compares our module efficiency roadmap to that of utilities scale crystalline silicon based on our estimate from a combination of our own and third-party analysis. Both roadmaps are normalized for real world temperatures at 6 degree Celsius and adjusted for their respective temperature provisions. As you can see the…

Okay. Thanks, Jim, and good afternoon. Turning to Slide 12, I would like to begin by highlighting the third quarter operational performance. Production in the quarter was 426 megawatts DC, up 10% on a sequential basis. This increase is reflective of the re-ramping of production line that has 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 cost year-over-year, excluding the German manufacturing volume which is no longer operational, production increased 8%, which was driven by improved module efficiency and higher utilization on a same number of production lines. In the third quarter, we ran our factories at approximately 80% capacity utilization, up five percentage points from the prior quarter. As Jim highlighted earlier on this call, we continue to make great progress towards achieving the efficiency and manufacturing cost target that we have provided during our Analyst Day in April. We have reduced our module manufacturing cost per watt to $0.59 from $0.67 last quarter, an $0.08 per watt or 12% reduction quarter-on-quarter. This is the best quarter-over-quarter cost improvement in six years on a per watt basis and highest percentage reduction since our IPO. This step function improvement is directly attributed to the efficiency and manufacturing improvement program and the cost savings initiatives that are being developed and implemented by our world class R&D in manufacturing teams. Excluding the impact of underutilization, our core comp per watt fell to $0.57, a $0.06 improvement on the prior quarter. During Q3, our best plant manufacturing cost at full utilization was $0.56 per watt. Average conversion efficiency for Q3 increased 30 basis points to 13.3%. While this is a significant quarter-on-quarter improvement, it is noteworthy to highlight that for the first month of Q4 our…

Thank you. (Operator Instructions). Please limit yourself to one question. Our first question comes from Brian Lee of Goldman Sachs.

I guess just from a timing perspective, there is a couple of things moving around here. So just want to clarify on those topics. On Desert Sunlight specifically, should we expect the other half of the rev rec to all happen in 2014 or is there some that will also be done in '15? Then what percent of Silver State South, now that that project has sold, should we expect this year and next year?

So, yes. Desert Sunlight currently has, the COD we anticipate to complete a portion of project by the end of the '14, the other portion may fall in early 2015 based on the COD. But it largely assumes the balance of the revenue will happen that in 2014. Silver State South, while we will start to begin construction in 2014, at the latter part of 2014, and it's not clear that at this point in time that we will have achieved all of the revenue recognition criteria to start recognizing revenue for Silver State South in '14. However we will see some initial production volume and there will be some construction activity but probably very little, if any, revenue or earnings for Silver State South next year.

Our next question comes from Brian Jobin of Credit Suisse.

Hi. This is Brandon Heiken on behalf of Patrick Jobin. Thanks for taking the question. I was wondering if you could explain the economics on the recent bookings? How do those compare with the targets that you laid out for 2014 and 2015? And would the other acquisitions that you made in the cost reductions affect those target? Thank you.

So we have not given specific economics on any of the recently announced projects but we look forward in the economics on the opportunity that we are currently bidding are consistent with the range of what we previously guided to which would be in the 15% to 20%. So without getting into details, each transaction could vary from those specific targets, but in general the average is still within that range. The cost opportunities that we now have highlighted are largely in line with our cost reduction roadmaps that we have previously communicated. We may see a little bit of an acceleration on the cost per watt profile that I don't anticipate will have a material impact in the short-term.

Thank you. Our next question comes from Stephen Chin of UBS.

Yes. Hi. Thanks for taking my question. This is Mahavir Sanghavi. Congrats on the cost downs. Just a question on the cost. Two parts there. So you talked that 14.1% which you are piloting. What should we expect that, in terms of what would that lead to cost per watt? Then also in terms of benefit on the balance of the system, how much reduction can you get on the balance of system and overall system cost? Thank you.

The 14.1%, if you refer back to our Analyst Day material, basically that is all in the cost roadmap that we laid out and it's merely executing right to schedule what we presented. So there is not anything new or changed in terms of the cost roadmap. This is merely a validation that we are executing to that cost roadmap as it was disclosed in the Analyst Day. In terms of the balance of system, we continue to make progress on the balance of system cost, both as a result of increasing efficiency and as a result of reducing cost in the balance of system itself. And again, that remains on the trajectory that we outlined at the Analyst Day. Everything, we are executing basically to the projections that we set out earlier in the year.

I think the other thing to add around that is that as you take that 14.1% and you try to hit and triangulate that to what was on the roadmap, the 14.1% would point you to a low $0.50 type number. If you take that and you apply that our best line, in particular we are going to be in low 50s. If we take the additional impact of excluding freight warranty and recycling cost, we would be in the low 40s, so I think that's kind of the competitive benchmark that we should all keep in front of us. We have the capability today, 14 one which we sort of equate to on an apples to apples comparison across profile the low $0.42 to $0.43.

Thank you. Our next question comes from Vishal Shah from Deutsche Bank.

How long does it take to rollout your high efficiency lines to across all the different factories and you said, 13.9% or should we assume that by the time you roll it out, your cost will be in low 50s? Thank you.

The best plan right now is 39. I think our guidance from the exit rate are of our best line is 14%. In my comment that I made is that over the next few quarters we will get everything up to 39 or north of that, so you can start to see us on a fleet average in the 14% maybe a little bit above 14% in the first half of next year which all supports again a low $0.50-type cost per watt and that's all consistent with what we showed in the Analyst Day.

Our next question comes from Paul Coster of JPMorgan.

It's a two-part question. I just wondered if you can give us a bit of an update on TetraSun in passing, but the main question is if I understand you correctly Mark, the gross margin improvement is really a function of making new assumptions around revenue recognition on specific programs around year end, and not a function of efficiency utilization rates and all of the other operating metrics that we described. Is that correct?

Yes. I will take that one and I will let Jim talk to about TetraSun. Yes. The improvement in the gross margin and there is a favorable mix shift Desert Sunlight being a portion of that, but there is also a favorable benefit on the cost profile, especially on some of our project cost plans that is driving a portion of that benefit. One of the things that we tried to highlight was that if the EPS changed, the mid-point increased to $0.40, $0.45 of that was operational, and so make sure people clearly understand that the other $0.15 is a mix benefit, but 25% is operational which is a combination of a better cost profile on the module and a better overall cost profile on our key projects.

In terms of TetraSun we continue to validate and produce pilot product and continue to develop our plans for that product or we don't have any material announcements at this time and we will talk about more about it as we get into the early part of next year.

Our next question comes from Ben Kallo of Robert Baird.

Hi, gentlemen. Jim, first of all on your backlog here, I just want to understand what was included through your acquisitions? Then as you pull forward some of, if that's the right term, Desert Sunlight, does that make change our assumptions next year, so you have some of the efficiency gains we are expecting next year happening in this year. Then I am going to add on yield curve thoughts. As you guys look ahead, how do you balance current revenue, near-term revenue with the opportunity of selling some of the projects through the market? Thanks guys. Good quarter.

Sure. I will cover the first. Then Mark can layer in some detail. In terms of the acquisition, once we make a portfolio acquisition how we characterize those projects in terms of being in the opportunity set or being a booking. We used the same standards and rules that we have always applied, so there will be a mixture of impacts as we bring those portfolios in. In terms of the yield curve thought, where we continue to monitor the market performance of the entities that have gone public, most notably NRG Yield and Pattern Energy. We continue to analyze the benefit, the potential benefit and the potential issues associated with doing something similar or so and I will make at this point, we don't have any firm conclusions. We think it's very interesting and healthy for the industry. How and if we participate at something we are still looking at and don't have any firm conclusions that have been reached at this point.

Then on the Desert Sunlight, yes, there will be some impact of additional revenue this year on Desert Sunlight that will impact 2014, well that is also in our guidance project that we will be moving out of 2013 into 2014. So if you look at it on balance between the two years there is slight downward pressure with Desert but not a material change, given the little bit of revenue out in '13 into '14.

Our next question comes from Krish Shankar of Bank of America Merrill Lynch.

Thanks. A change in strategy or is it holding onto your projects for longer? And also as you look at the unsold projects that you guys have been developing right now, what are your plan to restrict the holding in through completion?

I missed the first part of your statement. Could you just - you were cut off from the very beginning.

Oh, sorry. Is the selling of the Silver State South a change in strategy, related to holding on to your project for a longer duration?

No. What we have said is that we will retain the flexibility to hold project until we believe we have reached a point in time where we can sell them for an optimal mix of value creation and risk reduction. Silver State South was a negotiation that has been going on for a great long period of time with an established customer and we felt like that the opportunity to extract further value didn't really present itself without taking incremental risk and it was the appropriate decision. At the same time that we were making the decision to sell that asset, there are other assets that we have decided to hold little closer to the commercial operation day. So we merely added. We have not drawn an absolute line in the sand as to when we are going to monetize the asset. We have merely said that we are going to be flexible. We are going to have the flexibility to look at different options which, we believe, enhances our ability to create value with each individual asset.

Our next question comes from Edwin Mok of Needham & Co. Edwin Mok - Needham & Co.: Hi. Thanks for taking my questions. Just want to drill down quickly on the gross margin again. How much was the improvement that you got in the third quarter came from that adjustment of those warranty? And as we look beyond this quarter or last quarter, as you look in 2014, where do you think your gross margin is entering?

I think you are referring to, your question is referring to the end of life adjustment and the impact discreetly to the quarter. I won't get into to the details of what impact it has to the quarter. There is a lot of moving pieces in any given quarter, things that are positive, things that are negative. I think the right way here to look at it is though, is what impact does it have to our full year guidance and if you look at it and comprehensively with all of the other moving pieces that are impacting gross margin, it has a nominal impact to our full year guidance, relative to what we last talked about from that perspective. So no significant change from that perspective

And as for 2014, we will communicate that at the Analyst Day

Our next question comes from Mahesh Sanganeria from RBC Capital Markets.

Thank you very much. Just need a clarification on the contribution to the EPS upside which you just provided. There is lot of moving parts on this little confusion. I am not good at Excel to doing it fast enough. So you have a benefit of gross margin and then you pointed out that there is tax rate and you said that there are operational benefits. So can you just break it out by that EPS upside on gross margin tax and operating efficiency.

So the way we have broken it out is it is about $0.40 delta to the midpoint of the guidance. $0.25 of that is operational. $0.15 is Desert Sunlight. If you look at the tax rate impact to the and which is included in the operational, it is less than $0.05 in the range of $0.04 to $0.05. So if you want to break it out, 20% operational excluding tax, tax is about $0.04 to $0.05 and then the balance of it $0.15 would be the favorable revenue mix primarily driven by Desert Sunlight.

And operational, are we talking about in the operating expenses line or gross margin line?

Both of it is gross margin, so again it's somewhat the favorable benefit on our cost per watt, so it is also significant savings and benefits on our project costs plans so we have a number of material projects we have been successful in increasing or improving overall savings and productivity through our supply chain through labor productivity through other initiatives that are driving down the cost and delivering those projects.

Our next question comes from Jagadish Iyer with Piper Jaffray.

Yes. Thanks for taking my question. Just a question on you guys have said about long-term gross margins to be 15% to 20% at your Analyst Day for potentially for next year, so given that you have had all these efficiency improvements and how you have your projects, I just wanted to find out the puts and takes that 15% to 20% longer term. Thank you.

Yes. We will give, that's the reason why we want to get to a point where we can have another Analyst Day again do that in early March. We will go a lot more detail in that regard. I would like to say that, we are very pleased with progress that we have made so far on all fronts and we will give you additional insight to some of those opportunities and progress that we made as we talk to you in early March.

Our next question comes from Colin Rusch from Northland Capital Markets.

Great. Thanks so much. Can you give us a sense of why revenue will be coming down with the incremental recognition of Desert Sunlight, it looks like that's a higher margin business for you and a higher SE business. Can you give us a sense of what magnitude of projects that are for recognition either in '13 or '14?

Yes. There are in the range of hundreds of millions of dollars, let's just put it that way that are kind of the projects that have revenue recognition that is linked to commercial operation for us other condition and so we are uncertain it will be able to achieve all of those elements over the next 60 days basically. What we wanted to do is to be balanced the best way to say with what we provide the guidance, we also did give you an indication if things break the right way that we potentially see the revenue recognized in 2013, but we did want to be seeking our head out of window a little bit with 60 days left into the year. Didn't feel like it was worth doing. We wanted to come with a view that was balanced and one that we feel comfortable with delivering again.

Our final question comes from James (Inaudible) of Cowen and Company.

Hi. I just wanted to ask a little bit more about the pipeline development. The numbers that you gave McCoy, Moapa and a couple of others added up to a little over 600 and you are saying that you book 860. Can you tell us what the other big project or group of smaller projects might have been?

There is no one individual project. That's a large number of individual transactions, including some module along with sales, so there is not one or a series that we could point to. That's a large number of much smaller transactions that contributes to that number.

Ladies and gentlemen, that does conclude today's First Solar Q3 2013 financial results conference call. We do appreciate your participation today.