First Solar Earnings Call Nuggets: Newly Booked Business and AVSR Construction Delays
Newly Booked Business
Satya Kumar – Credit Suisse: I guess a question on the pipeline and the process and the margins of the new business. I think you had said earlier on that the new potential bookings will be replenished mostly in 2014, but you also reiterated 1 to 1 book-to-bill. So I was wondering if the rest of the bookings for this year predominantly come from purchased versus own developed projects that convert. And if I look at the guidance that you gave at the Analyst Day for the implied ASPs on the non-contracted systems, most of that in the street are coming up with a number that’s fairly low, around $1.35 a watt. So, I was wondering if you could also talk a bit about the profit margins on the newly booked business so we have a sense of that.
Mark Widmar – CFO and CAO: Satya, I guess I’ll take the last one first and then I’ll let Jim talk a little bit more about the pipeline. In terms of the implied guidance around ASPs, obviously, that’s a difficult number to back into. What I would prefer you to stay focused on is what we indicated in the Analyst Day is we’re driving towards in a system roadmap that ultimately drives down to (attract for) installed system cost of around $1. And we believe that the market clearing prices will be somewhere in that range as we indicated previously, of about a $1.40 to $1.60 depending on market, depending on radiance and other factors. So when you take that installed cost of around a $1, include the non-standard and you model then on ASP in that $1.40 to $1.60, it models back to the gross margin numbers that we have been communicating for a while now that we believe on a sustainable basis will achieve gross margins in the range of 15% to 20%.
James A. Hughes – CEO: And then on the composition of the pipeline, I didn’t completely understand the question, Satya. Would you mind repeating the first half?
AVSR Construction Delays
Brian Lee – Goldman Sachs: I was wondering, could you quickly provide some more color on the exact timing of the AVSR construction delays; just how much of the quarter it did impact and if you’re able to quantify the loss of volume in the quarter relative to original expectations? Then I had a quick follow-up?
Mark Widmar – CFO and CAO: So we were during the quarter at AVSR really impacted starting really have been continued through most of the quarter and I would say it’s the impact that’s everywhere as we exited the quarter and when we began the quarter. So, it did weather throughout the quarter. It impacted revenue by a material amount specific to that project, in aggregate relative to our guidance as you saw we achieved the revenue guidance. So, it didn’t have a dramatic impact from that perspective, but we’ve been struggling with that for a period of time, and as a result of that plus the corrective action that we now will have to undertake, we move the anticipated completion day from the end of Q2 into the Q4 timeframe. So, lot of work still to be done. We will complete the project on time. It has resulted in an incremental cost and the one point I was trying to make in the script was that because of the accounting methodology, use of percentage completion, any cost overrun essentially, you have to recognize certain percentage of that relative to how much of the contract is complete at that point in time. So, you have throughout a number, a $10 million cost overrun as the project is 80% complete, you will recognize that in the current quarter. So, it did have an impact on earnings more so than revenue in the current quarter. But from a full year perspective, we’ll maintain the guidance and cover any of the additional cost overrun associated with AVSR.
Brian Lee – Goldman Sachs: It looked like it’d be moving lower by year end. How should we think about the cadence now given Desert Sunlight recognition in the back half and also with Q1 starting more in the low 20s?
James A. Hughes – CEO: Yeah, we missed the first half of your question. I don’t know of the rest of the call. Could you repeat it?
Brian Lee – Goldman Sachs: The prior guidance implied you guys would be somewhere in the mid-20s for Q1 and then moving lower by year-end to hit that 20% to 22% range for the full year, but how should we be thinking about the cadence now that you have the Desert Sunlight recognition in the back half and also with Q1 having started more in the low-20s here?
Mark Widmar – CFO and CAO: Yeah, so, as we indicated, look, with the impact of Desert Sunlight now impacting the second half of the year, you’ll see stronger revenue in the second half than you will in the first half, and you’ll see the gross margin trend accordingly, so you’ll see a little bit stronger gross margin through the second half of the year than you will have seen in the first half of the year.
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