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[x]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2014
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or
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
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20-4623678
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer [x]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
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Smaller reporting company [ ]
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(Do not check if a smaller reporting company)
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Page
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Part I.
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Financial Information (Unaudited)
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Item 1.
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Condensed Consolidated Financial Statements:
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Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2014 and 2013
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Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2014 and 2013
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Condensed Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013
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Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and 2013
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Notes to Condensed Consolidated Financial Statements
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures
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Part II.
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Other Information
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Item 1.
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Legal Proceedings
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Item 1A.
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Risk Factors
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Other Information
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Item 6.
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Exhibits
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Signatures
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Three Months Ended June 30,
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Six Months Ended June 30,
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||||||||||||
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2014
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2013
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2014
|
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2013
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||||||||
Net sales
|
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$
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544,353
|
|
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$
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519,760
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|
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$
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1,494,511
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$
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1,274,965
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Cost of sales
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451,628
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379,662
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1,165,075
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965,541
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||||
Gross profit
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92,725
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140,098
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329,436
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309,424
|
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||||
Operating expenses:
|
|
|
|
|
|
|
|
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||||||||
Research and development
|
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32,659
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|
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30,964
|
|
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71,432
|
|
|
60,895
|
|
||||
Selling, general and administrative
|
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57,667
|
|
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66,265
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|
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116,331
|
|
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140,730
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|
||||
Production start-up
|
|
491
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|
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1,392
|
|
|
491
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|
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2,768
|
|
||||
Restructuring and asset impairments
|
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—
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|
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2,381
|
|
|
—
|
|
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4,728
|
|
||||
Total operating expenses
|
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90,817
|
|
|
101,002
|
|
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188,254
|
|
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209,121
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||||
Operating income
|
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1,908
|
|
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39,096
|
|
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141,182
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|
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100,303
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||||
Foreign currency gain (loss)
|
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21
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|
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(1,068
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)
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(558
|
)
|
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550
|
|
||||
Interest income
|
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4,533
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|
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3,405
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8,854
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8,352
|
|
||||
Interest expense, net
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(930
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)
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(875
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)
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(1,340
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)
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(1,625
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)
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||||
Other (expense) income, net
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(3,170
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)
|
|
504
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(4,916
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)
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(329
|
)
|
||||
Income before income taxes
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2,362
|
|
|
41,062
|
|
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143,222
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|
|
107,251
|
|
||||
Income tax (benefit) expense
|
|
(2,166
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)
|
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7,464
|
|
|
26,687
|
|
|
14,511
|
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||||
Net income
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$
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4,528
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|
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$
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33,598
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$
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116,535
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$
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92,740
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Net income per share:
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|
|
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||||||||
Basic
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$
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0.05
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$
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0.38
|
|
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$
|
1.17
|
|
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$
|
1.05
|
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Diluted
|
|
$
|
0.04
|
|
|
$
|
0.37
|
|
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$
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1.14
|
|
|
$
|
1.03
|
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Weighted-average number of shares used in per share calculations:
|
|
|
|
|
|
|
|
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||||||||
Basic
|
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100,148
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|
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89,201
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|
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99,871
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|
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88,209
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|
||||
Diluted
|
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101,814
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91,142
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|
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101,820
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|
|
90,265
|
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Three Months Ended June 30,
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Six Months Ended June 30,
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||||||||||||
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2014
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2013
|
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2014
|
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2013
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||||||||
Net income
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$
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4,528
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|
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$
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33,598
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|
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$
|
116,535
|
|
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$
|
92,740
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Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
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||||||||
Foreign currency translation adjustments
|
|
(1,721
|
)
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1,500
|
|
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(1,661
|
)
|
|
(1,577
|
)
|
||||
Unrealized gain (loss) on marketable securities and restricted investments
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18,445
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(17,029
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)
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38,621
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(27,370
|
)
|
||||
Unrealized (loss) gain on derivative instruments
|
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(1,410
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)
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2,909
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(3,755
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)
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(2,937
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)
|
||||
Total other comprehensive income (loss), net of tax
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15,314
|
|
|
(12,620
|
)
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|
33,205
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|
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(31,884
|
)
|
||||
Comprehensive income
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$
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19,842
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|
|
$
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20,978
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|
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$
|
149,740
|
|
|
$
|
60,856
|
|
|
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June 30,
2014 |
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December 31,
2013 |
||||
ASSETS
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|
||||
Current assets:
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|
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||||
Cash and cash equivalents
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$
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851,346
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$
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1,325,072
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Marketable securities
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497,521
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|
|
439,102
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|
||
Accounts receivable trade, net
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237,924
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|
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136,383
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|
||
Accounts receivable, unbilled and retainage
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564,887
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|
521,323
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|
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Inventories
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385,247
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|
|
388,951
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|
||
Balance of systems parts
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|
58,816
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|
|
133,731
|
|
||
Deferred project costs
|
|
312,065
|
|
|
556,957
|
|
||
Deferred tax assets, net
|
|
107,265
|
|
|
63,899
|
|
||
Assets held for sale
|
|
20,728
|
|
|
132,626
|
|
||
Prepaid expenses and other current assets
|
|
134,470
|
|
|
94,720
|
|
||
Total current assets
|
|
3,170,269
|
|
|
3,792,764
|
|
||
Property, plant and equipment, net
|
|
1,369,659
|
|
|
1,385,084
|
|
||
PV solar power systems, net
|
|
48,547
|
|
|
—
|
|
||
Project assets and deferred project costs
|
|
1,002,494
|
|
|
720,916
|
|
||
Deferred tax assets, net
|
|
245,080
|
|
|
296,603
|
|
||
Restricted cash and investments
|
|
370,594
|
|
|
279,441
|
|
||
Goodwill
|
|
84,985
|
|
|
84,985
|
|
||
Other intangible assets, net
|
|
116,935
|
|
|
117,416
|
|
||
Inventories
|
|
124,520
|
|
|
129,664
|
|
||
Other assets
|
|
78,932
|
|
|
76,629
|
|
||
Total assets
|
|
$
|
6,612,015
|
|
|
$
|
6,883,502
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
187,530
|
|
|
$
|
261,333
|
|
Income taxes payable
|
|
40,708
|
|
|
6,707
|
|
||
Accrued expenses
|
|
294,668
|
|
|
320,077
|
|
||
Current portion of long-term debt
|
|
60,838
|
|
|
60,543
|
|
||
Payments and billings for deferred project costs
|
|
425,654
|
|
|
642,214
|
|
||
Other current liabilities
|
|
201,845
|
|
|
297,187
|
|
||
Total current liabilities
|
|
1,211,243
|
|
|
1,588,061
|
|
||
Accrued solar module collection and recycling liability
|
|
249,990
|
|
|
225,163
|
|
||
Long-term debt
|
|
133,836
|
|
|
162,780
|
|
||
Other liabilities
|
|
348,991
|
|
|
404,381
|
|
||
Total liabilities
|
|
1,944,060
|
|
|
2,380,385
|
|
||
Commitments and contingencies
|
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
||||
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 100,177,488 and 99,506,941 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively
|
|
100
|
|
|
100
|
|
||
Additional paid-in capital
|
|
2,661,120
|
|
|
2,646,022
|
|
||
Accumulated earnings
|
|
1,999,306
|
|
|
1,882,771
|
|
||
Accumulated other comprehensive income (loss)
|
|
7,429
|
|
|
(25,776
|
)
|
||
Total stockholders’ equity
|
|
4,667,955
|
|
|
4,503,117
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
6,612,015
|
|
|
$
|
6,883,502
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2014
|
|
2013
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Cash received from customers
|
|
$
|
1,138,461
|
|
|
$
|
2,050,622
|
|
Cash paid to suppliers and associates
|
|
(1,315,185
|
)
|
|
(1,709,914
|
)
|
||
Interest received
|
|
6,519
|
|
|
3,724
|
|
||
Interest paid
|
|
(3,791
|
)
|
|
(5,974
|
)
|
||
Income tax (payments) refunds
|
|
(7,753
|
)
|
|
5,976
|
|
||
Excess tax benefit from share-based compensation arrangements
|
|
(16,165
|
)
|
|
(55,695
|
)
|
||
Other operating activities
|
|
(1,882
|
)
|
|
89
|
|
||
Net cash (used in) provided by operating activities
|
|
(199,796
|
)
|
|
288,828
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchases of property, plant and equipment
|
|
(113,221
|
)
|
|
(156,856
|
)
|
||
Purchases of marketable securities
|
|
(226,087
|
)
|
|
(316,285
|
)
|
||
Proceeds from maturities and sales of marketable securities
|
|
164,259
|
|
|
60,766
|
|
||
Payments received on note receivable, affiliate
|
|
—
|
|
|
17,108
|
|
||
Change in restricted cash
|
|
(72,405
|
)
|
|
5,136
|
|
||
Acquisitions, net of cash acquired
|
|
—
|
|
|
(30,745
|
)
|
||
Purchase of equity and cost method investments
|
|
(910
|
)
|
|
(14,894
|
)
|
||
Other investing activities
|
|
(1,480
|
)
|
|
(1,850
|
)
|
||
Net cash used in investing activities
|
|
(249,844
|
)
|
|
(437,620
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Repayments of long-term debt
|
|
(30,761
|
)
|
|
(636,147
|
)
|
||
Proceeds from borrowings under long-term debt, net of discount and issuance costs
|
|
—
|
|
|
335,000
|
|
||
Excess tax benefit from share-based compensation arrangements
|
|
16,165
|
|
|
55,695
|
|
||
Repayment of economic development funding
|
|
—
|
|
|
(8,315
|
)
|
||
Proceeds from equity offerings
|
|
—
|
|
|
430,368
|
|
||
Contingent consideration payments and other financing activities
|
|
(12,058
|
)
|
|
620
|
|
||
Net cash (used in) provided by financing activities
|
|
(26,654
|
)
|
|
177,221
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
2,568
|
|
|
(1,066
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
|
(473,726
|
)
|
|
27,363
|
|
||
Cash and cash equivalents, beginning of the period
|
|
1,325,072
|
|
|
901,294
|
|
||
Cash and cash equivalents, end of the period
|
|
$
|
851,346
|
|
|
$
|
928,657
|
|
Supplemental disclosure of noncash investing and financing activities:
|
|
|
|
|
|
|
||
Property, plant and equipment acquisitions currently or previously funded by liabilities
|
|
$
|
48,667
|
|
|
$
|
57,681
|
|
Acquisitions currently or previously funded by liabilities and contingent consideration
|
|
$
|
84,320
|
|
|
$
|
70,780
|
|
|
|
Useful Lives
in Years |
Buildings and building improvements
|
|
25 – 40
|
Manufacturing machinery and equipment
|
|
5 – 7
|
Furniture, fixtures, computer hardware, and computer software
|
|
3 – 7
|
Leasehold improvements
|
|
up to 15
|
April 2012 European Restructuring
|
|
Severance and Termination Related Costs
|
||
Ending Balance at December 31, 2013
|
|
$
|
1,940
|
|
Cash Payments
|
|
(915
|
)
|
|
Non-Cash Amounts Including Foreign Exchange Impact
|
|
(15
|
)
|
|
Ending Balance at March 31, 2014
|
|
1,010
|
|
|
Charges to Income
|
|
—
|
|
|
Change in Estimates
|
|
(619
|
)
|
|
Cash Payments
|
|
(187
|
)
|
|
Non-Cash Amounts Including Foreign Exchange Impact
|
|
(2
|
)
|
|
Ending Balance at June 30, 2014
|
|
$
|
202
|
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Cash:
|
|
|
|
|
||||
Cash
|
|
$
|
838,255
|
|
|
$
|
1,322,183
|
|
Cash equivalents:
|
|
|
|
|
||||
Money market funds
|
|
3,091
|
|
|
2,889
|
|
||
Time deposits
|
|
10,000
|
|
|
—
|
|
||
Total cash and cash equivalents
|
|
851,346
|
|
|
1,325,072
|
|
||
Marketable securities:
|
|
|
|
|
||||
Foreign debt
|
|
455,903
|
|
|
364,046
|
|
||
Foreign government obligations
|
|
—
|
|
|
25,115
|
|
||
Time deposits
|
|
30,000
|
|
|
—
|
|
||
U.S. debt
|
|
8,114
|
|
|
46,439
|
|
||
U.S. government obligations
|
|
3,504
|
|
|
3,502
|
|
||
Total marketable securities
|
|
497,521
|
|
|
439,102
|
|
||
Total cash, cash equivalents, and marketable securities
|
|
$
|
1,348,867
|
|
|
$
|
1,764,174
|
|
|
|
As of June 30, 2014
|
||||||||||||||
Security Type
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Foreign debt
|
|
$
|
456,262
|
|
|
$
|
69
|
|
|
$
|
428
|
|
|
$
|
455,903
|
|
Time deposits
|
|
30,000
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
||||
U.S. debt
|
|
8,108
|
|
|
6
|
|
|
—
|
|
|
8,114
|
|
||||
U.S. government obligations
|
|
3,499
|
|
|
5
|
|
|
—
|
|
|
3,504
|
|
||||
Total
|
|
$
|
497,869
|
|
|
$
|
80
|
|
|
$
|
428
|
|
|
$
|
497,521
|
|
|
|
As of December 31, 2013
|
||||||||||||||
Security Type
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Foreign debt
|
|
$
|
364,568
|
|
|
$
|
127
|
|
|
$
|
649
|
|
|
$
|
364,046
|
|
Foreign government obligations
|
|
25,125
|
|
|
—
|
|
|
10
|
|
|
25,115
|
|
||||
U.S. debt
|
|
46,430
|
|
|
12
|
|
|
3
|
|
|
46,439
|
|
||||
U.S. government obligations
|
|
3,498
|
|
|
4
|
|
|
—
|
|
|
3,502
|
|
||||
Total
|
|
$
|
439,621
|
|
|
$
|
143
|
|
|
$
|
662
|
|
|
$
|
439,102
|
|
|
|
As of June 30, 2014
|
||||||||||||||
Maturity
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
One year or less
|
|
$
|
295,673
|
|
|
$
|
64
|
|
|
$
|
126
|
|
|
$
|
295,611
|
|
One year to two years
|
|
166,801
|
|
|
13
|
|
|
287
|
|
|
166,527
|
|
||||
Two years to three years
|
|
35,395
|
|
|
3
|
|
|
15
|
|
|
35,383
|
|
||||
Total
|
|
$
|
497,869
|
|
|
$
|
80
|
|
|
$
|
428
|
|
|
$
|
497,521
|
|
|
|
As of December 31, 2013
|
||||||||||||||
Maturity
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
One year or less
|
|
$
|
161,752
|
|
|
$
|
57
|
|
|
$
|
84
|
|
|
$
|
161,725
|
|
One year to two years
|
|
270,149
|
|
|
81
|
|
|
578
|
|
|
269,652
|
|
||||
Two years to three years
|
|
7,720
|
|
|
5
|
|
|
—
|
|
|
7,725
|
|
||||
Total
|
|
$
|
439,621
|
|
|
$
|
143
|
|
|
$
|
662
|
|
|
$
|
439,102
|
|
|
|
As of June 30, 2014
|
||||||||||||||||||||||
|
|
In Loss Position for
Less Than 12 Months
|
|
In Loss Position for
12 Months or Greater
|
|
Total
|
||||||||||||||||||
Security Type
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
Foreign debt
|
|
$
|
350,850
|
|
|
$
|
428
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
350,850
|
|
|
$
|
428
|
|
Total
|
|
$
|
350,850
|
|
|
$
|
428
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
350,850
|
|
|
$
|
428
|
|
|
|
As of December 31, 2013
|
||||||||||||||||||||||
|
|
In Loss Position for
Less Than 12 Months
|
|
In Loss Position for
12 Months or Greater
|
|
Total
|
||||||||||||||||||
Security Type
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
|
Gross
Unrealized
Losses
|
||||||||||||
Foreign debt
|
|
$
|
212,655
|
|
|
$
|
649
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
212,655
|
|
|
$
|
649
|
|
Foreign government obligations
|
|
25,161
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
25,161
|
|
|
10
|
|
||||||
U.S. debt
|
|
21,465
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
21,465
|
|
|
3
|
|
||||||
Total
|
|
$
|
259,281
|
|
|
$
|
662
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
259,281
|
|
|
$
|
662
|
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Restricted cash (1)
|
|
$
|
46,868
|
|
|
$
|
167
|
|
Restricted investments
|
|
323,726
|
|
|
279,274
|
|
||
Restricted cash and investments
|
|
$
|
370,594
|
|
|
$
|
279,441
|
|
(1)
|
There was
$26.2 million
and
zero
of restricted cash included within prepaid expenses and other current assets at
June 30, 2014
and
December 31, 2013
, respectively, primarily related to required cash collateral for certain letters of credit.
|
|
|
As of June 30, 2014
|
||||||||||||||
Security Type
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Foreign government obligations
|
|
$
|
207,555
|
|
|
$
|
53,803
|
|
|
$
|
—
|
|
|
$
|
261,358
|
|
U.S. government obligations
|
|
57,196
|
|
|
5,172
|
|
|
—
|
|
|
62,368
|
|
||||
Total
|
|
$
|
264,751
|
|
|
$
|
58,975
|
|
|
$
|
—
|
|
|
$
|
323,726
|
|
|
|
As of December 31, 2013
|
||||||||||||||
Security Type
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||||||
Foreign government obligations
|
|
$
|
205,484
|
|
|
$
|
22,295
|
|
|
$
|
1,489
|
|
|
$
|
226,290
|
|
U.S. government obligations
|
|
55,916
|
|
|
1,372
|
|
|
4,304
|
|
|
52,984
|
|
||||
Total
|
|
$
|
261,400
|
|
|
$
|
23,667
|
|
|
$
|
5,793
|
|
|
$
|
279,274
|
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Accounts receivable trade, gross
|
|
$
|
246,021
|
|
|
$
|
148,693
|
|
Allowance for doubtful accounts
|
|
(8,097
|
)
|
|
(12,310
|
)
|
||
Accounts receivable trade, net
|
|
$
|
237,924
|
|
|
$
|
136,383
|
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Accounts receivable, unbilled
|
|
$
|
51,446
|
|
|
$
|
102,953
|
|
Retainage
|
|
513,441
|
|
|
418,370
|
|
||
Accounts receivable, unbilled and retainage
|
|
$
|
564,887
|
|
|
$
|
521,323
|
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Raw materials
|
|
$
|
160,686
|
|
|
$
|
165,805
|
|
Work in process
|
|
17,569
|
|
|
11,874
|
|
||
Finished goods
|
|
331,512
|
|
|
340,936
|
|
||
Inventories
|
|
$
|
509,767
|
|
|
$
|
518,615
|
|
Inventories — current
|
|
$
|
385,247
|
|
|
$
|
388,951
|
|
Inventories — noncurrent (1)
|
|
$
|
124,520
|
|
|
$
|
129,664
|
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Prepaid expenses
|
|
$
|
39,640
|
|
|
$
|
24,572
|
|
Derivative instruments
|
|
2,211
|
|
|
7,996
|
|
||
Deferred costs of goods sold
|
|
—
|
|
|
753
|
|
||
Other current assets
|
|
92,619
|
|
|
61,399
|
|
||
Prepaid expenses and other current assets
|
|
$
|
134,470
|
|
|
$
|
94,720
|
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Buildings and improvements
|
|
$
|
364,283
|
|
|
$
|
360,504
|
|
Machinery and equipment
|
|
1,495,305
|
|
|
1,445,939
|
|
||
Office equipment and furniture
|
|
128,568
|
|
|
124,332
|
|
||
Leasehold improvements
|
|
48,204
|
|
|
47,833
|
|
||
Depreciable property, plant and equipment, gross
|
|
2,036,360
|
|
|
1,978,608
|
|
||
Accumulated depreciation
|
|
(1,021,857
|
)
|
|
(940,730
|
)
|
||
Depreciable property, plant and equipment, net
|
|
1,014,503
|
|
|
1,037,878
|
|
||
Land
|
|
10,525
|
|
|
10,714
|
|
||
Construction in progress
|
|
146,175
|
|
|
133,223
|
|
||
Stored assets (1)
|
|
198,456
|
|
|
203,269
|
|
||
Property, plant and equipment, net
|
|
$
|
1,369,659
|
|
|
$
|
1,385,084
|
|
(1)
|
Consists of machinery and equipment (“stored assets”) that were originally purchased for installation in our previously planned manufacturing capacity expansions. We intend to install and place the stored assets into service when such assets are required or beneficial to our existing installed manufacturing capacity or when market demand supports additional or market specific manufacturing capacity. As the stored assets are neither in the condition or location to produce modules as intended, we will not begin depreciation until such assets are placed into service. The stored assets are evaluated for impairment under a held and used impairment model whenever events or changes in business circumstances arise, including consideration of technological obsolescence, that may indicate that the carrying amount of our long-lived assets may not be recoverable. We ceased the capitalization of interest on such stored assets once they were physically received from the related machinery and equipment vendors.
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
PV solar power systems, gross
|
|
$
|
48,623
|
|
|
$
|
—
|
|
Accumulated depreciation
|
|
(76
|
)
|
|
—
|
|
||
PV solar power systems, net
|
|
$
|
48,547
|
|
|
$
|
—
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Interest cost incurred
|
|
$
|
(2,385
|
)
|
|
$
|
(3,167
|
)
|
|
$
|
(5,036
|
)
|
|
$
|
(6,442
|
)
|
Interest cost capitalized —– property, plant and equipment
|
|
444
|
|
|
736
|
|
|
1,022
|
|
|
1,046
|
|
||||
Interest cost capitalized —– project assets
|
|
1,011
|
|
|
1,556
|
|
|
2,674
|
|
|
3,771
|
|
||||
Interest expense, net
|
|
$
|
(930
|
)
|
|
$
|
(875
|
)
|
|
$
|
(1,340
|
)
|
|
$
|
(1,625
|
)
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Project assets — land
|
|
$
|
9,075
|
|
|
$
|
4,150
|
|
Project assets — development costs including project acquisition costs
|
|
561,133
|
|
|
465,316
|
|
||
Project assets — construction costs
|
|
389,327
|
|
|
156,824
|
|
||
Project assets — projects in pre-COD operation under project PPAs
|
|
—
|
|
|
66,240
|
|
||
Project assets
|
|
$
|
959,535
|
|
|
$
|
692,530
|
|
Deferred project costs — current
|
|
$
|
312,065
|
|
|
$
|
556,957
|
|
Deferred project costs — non-current
|
|
42,959
|
|
|
28,386
|
|
||
Deferred project costs
|
|
$
|
355,024
|
|
|
$
|
585,343
|
|
Total project assets and deferred project costs
|
|
$
|
1,314,559
|
|
|
$
|
1,277,873
|
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Note receivable (1)
|
|
$
|
9,541
|
|
|
$
|
9,655
|
|
Income taxes receivable
|
|
7,912
|
|
|
7,656
|
|
||
Deferred rent
|
|
20,977
|
|
|
21,175
|
|
||
Investments in unconsolidated affiliates and joint ventures (2)
|
|
16,419
|
|
|
17,321
|
|
||
Retainage
|
|
—
|
|
|
992
|
|
||
Other
|
|
24,083
|
|
|
19,830
|
|
||
Other assets
|
|
$
|
78,932
|
|
|
$
|
76,629
|
|
|
|
June 30, 2014
|
|
December 31,
2013 |
||||
Equity method investments
|
|
$
|
10,650
|
|
|
$
|
12,148
|
|
Cost method investments
|
|
5,769
|
|
|
5,173
|
|
||
Investments in unconsolidated affiliates and joint ventures
|
|
$
|
16,419
|
|
|
$
|
17,321
|
|
Reporting Unit
|
|
December 31,
2013 |
|
Acquisitions
|
|
June 30, 2014
|
||||||
CdTe Components
|
|
$
|
403,420
|
|
|
$
|
—
|
|
|
$
|
403,420
|
|
Crystalline Silicon Components
|
|
6,097
|
|
|
—
|
|
|
6,097
|
|
|||
Systems
|
|
68,833
|
|
|
—
|
|
|
68,833
|
|
|||
Accumulated impairment losses
|
|
(393,365
|
)
|
|
—
|
|
|
(393,365
|
)
|
|||
Total
|
|
$
|
84,985
|
|
|
$
|
—
|
|
|
$
|
84,985
|
|
|
|
Gross Intangible Assets
|
|
Accumulated Amortization
|
|
|
||||||||||||||||||||||||||
|
|
December 31, 2013
|
|
Write-off of fully amortized intangibles
|
|
June 30, 2014
|
|
December 31, 2013
|
|
Additions Charged to Expense
|
|
Write-off of fully amortized intangibles
|
|
June 30, 2014
|
|
Net Intangibles June 30, 2014
|
||||||||||||||||
Patents
|
|
$
|
10,180
|
|
|
$
|
(5,086
|
)
|
|
$
|
5,094
|
|
|
$
|
(5,797
|
)
|
|
$
|
(306
|
)
|
|
$
|
5,086
|
|
|
$
|
(1,017
|
)
|
|
$
|
4,077
|
|
Trade names
|
|
700
|
|
|
—
|
|
|
700
|
|
|
(467
|
)
|
|
(175
|
)
|
|
—
|
|
|
(642
|
)
|
|
58
|
|
||||||||
In-process research and development
|
|
112,800
|
|
|
—
|
|
|
112,800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112,800
|
|
||||||||
Total
|
|
$
|
123,680
|
|
|
$
|
(5,086
|
)
|
|
$
|
118,594
|
|
|
$
|
(6,264
|
)
|
|
$
|
(481
|
)
|
|
$
|
5,086
|
|
|
$
|
(1,659
|
)
|
|
$
|
116,935
|
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Accrued compensation and benefits
|
|
$
|
29,195
|
|
|
$
|
50,148
|
|
Accrued property, plant and equipment
|
|
27,766
|
|
|
19,834
|
|
||
Accrued inventory
|
|
40,218
|
|
|
43,966
|
|
||
Accrued project assets and deferred project costs
|
|
66,547
|
|
|
80,528
|
|
||
Product warranty liability (1)
|
|
68,214
|
|
|
67,097
|
|
||
Accrued expenses in excess of normal product warranty liability and related expenses (1)
|
|
8,827
|
|
|
12,516
|
|
||
Other
|
|
53,901
|
|
|
45,988
|
|
||
Accrued expenses
|
|
$
|
294,668
|
|
|
$
|
320,077
|
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Deferred revenue
|
|
$
|
522
|
|
|
$
|
1,193
|
|
Derivative instruments
|
|
8,201
|
|
|
8,096
|
|
||
Deferred tax liabilities
|
|
229
|
|
|
138
|
|
||
Billings in excess of costs and estimated earnings (1)
|
|
127,342
|
|
|
117,766
|
|
||
Contingent consideration (2)
|
|
29,965
|
|
|
37,775
|
|
||
Other (3)
|
|
35,586
|
|
|
132,219
|
|
||
Other current liabilities
|
|
$
|
201,845
|
|
|
$
|
297,187
|
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Product warranty liability (1)
|
|
$
|
142,613
|
|
|
$
|
130,944
|
|
Other taxes payable
|
|
66,221
|
|
|
119,124
|
|
||
Contingent consideration (1)
|
|
54,115
|
|
|
58,969
|
|
||
Liability in excess of normal product warranty liability and related expenses (1)
|
|
36,771
|
|
|
39,565
|
|
||
Other (1)
|
|
49,271
|
|
|
55,779
|
|
||
Other liabilities
|
|
$
|
348,991
|
|
|
$
|
404,381
|
|
|
|
June 30, 2014
|
|||||||||||
|
|
Prepaid Expenses and Other Current Assets
|
|
|
Other Current Liabilities
|
|
Other Liabilities
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||||||
Foreign exchange forward contracts
|
|
$
|
—
|
|
|
|
$
|
3,269
|
|
|
$
|
—
|
|
Cross-currency swap contract
|
|
—
|
|
|
|
1,239
|
|
|
4,338
|
|
|||
Interest rate swap contracts
|
|
—
|
|
|
|
275
|
|
|
165
|
|
|||
Total derivatives designated as hedging instruments
|
|
$
|
—
|
|
|
|
$
|
4,783
|
|
|
$
|
4,503
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||
Foreign exchange forward contracts
|
|
$
|
2,211
|
|
|
|
$
|
3,418
|
|
|
$
|
—
|
|
Total derivatives not designated as hedging instruments
|
|
$
|
2,211
|
|
|
|
$
|
3,418
|
|
|
$
|
—
|
|
Total derivative instruments
|
|
$
|
2,211
|
|
|
|
$
|
8,201
|
|
|
$
|
4,503
|
|
|
|
December 31, 2013
|
||||||||||||||
|
|
Prepaid Expenses and Other Current Assets
|
|
Other Assets
|
|
Other Current Liabilities
|
|
Other Liabilities
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
||||||||||
Foreign exchange forward contracts
|
|
$
|
2,357
|
|
|
$
|
282
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cross-currency swap contract
|
|
—
|
|
|
—
|
|
|
1,934
|
|
|
7,739
|
|
||||
Interest rate swap contracts
|
|
—
|
|
|
—
|
|
|
334
|
|
|
369
|
|
||||
Total derivatives designated as hedging instruments
|
|
$
|
2,357
|
|
|
$
|
282
|
|
|
$
|
2,268
|
|
|
$
|
8,108
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|||||||
Foreign exchange forward contracts
|
|
$
|
5,639
|
|
|
$
|
—
|
|
|
$
|
5,828
|
|
|
$
|
—
|
|
Total derivatives not designated as hedging instruments
|
|
$
|
5,639
|
|
|
$
|
—
|
|
|
$
|
5,828
|
|
|
$
|
—
|
|
Total derivative instruments
|
|
$
|
7,996
|
|
|
$
|
282
|
|
|
$
|
8,096
|
|
|
$
|
8,108
|
|
|
|
June 30, 2014
|
||||||||||||||||||
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in Consolidated Balance Sheet
|
|
|
||||||||||
|
|
Gross Asset (Liability)
|
|
Gross Offset in Consolidated Balance Sheet
|
|
Net Amount Recognized in Financial Statements
|
|
Financial Instruments
|
|
Cash Collateral Pledged
|
|
Net Amount
|
||||||||
Foreign exchange forward contracts
|
|
$
|
(3,269
|
)
|
|
—
|
|
|
(3,269
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(3,269
|
)
|
Cross-currency swap contracts
|
|
$
|
(5,577
|
)
|
|
—
|
|
|
(5,577
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(5,577
|
)
|
Interest rate swap contracts
|
|
$
|
(440
|
)
|
|
—
|
|
|
(440
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(440
|
)
|
|
|
December 31, 2013
|
||||||||||||||||||
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in Consolidated Balance Sheet
|
|
|
||||||||||
|
|
Gross Asset (Liability)
|
|
Gross Offset in Consolidated Balance Sheet
|
|
Net Amount Recognized in Financial Statements
|
|
Financial Instruments
|
|
Cash Collateral Pledged
|
|
Net Amount
|
||||||||
Foreign exchange forward contracts
|
|
$
|
2,639
|
|
|
—
|
|
|
2,639
|
|
|
—
|
|
|
—
|
|
|
$
|
2,639
|
|
Cross-currency swap contracts
|
|
$
|
(9,673
|
)
|
|
—
|
|
|
(9,673
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(9,673
|
)
|
Interest rate swap contracts
|
|
$
|
(703
|
)
|
|
—
|
|
|
(703
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(703
|
)
|
|
|
Foreign Exchange Forward Contracts
|
|
Interest Rate Swap Contract
|
|
Cross Currency Swap Contract
|
|
Total
|
||||||||
Balance in other comprehensive income (loss) at December 31, 2013
|
|
$
|
4,351
|
|
|
$
|
(703
|
)
|
|
$
|
(5,820
|
)
|
|
$
|
(2,172
|
)
|
Amounts recognized in other comprehensive income (loss)
|
|
(4,878
|
)
|
|
(8
|
)
|
|
1,552
|
|
|
(3,334
|
)
|
||||
Amounts reclassified to earnings impacting:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency gain
|
|
—
|
|
|
—
|
|
|
(732
|
)
|
|
(732
|
)
|
||||
Interest expense
|
|
—
|
|
|
164
|
|
|
95
|
|
|
259
|
|
||||
Balance in other comprehensive income (loss) at March 31, 2014
|
|
$
|
(527
|
)
|
|
$
|
(547
|
)
|
|
$
|
(4,905
|
)
|
|
$
|
(5,979
|
)
|
Amounts recognized in other comprehensive income (loss)
|
|
(1,689
|
)
|
|
(18
|
)
|
|
2,073
|
|
|
366
|
|
||||
Amounts reclassified to earnings impacting:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency loss
|
|
—
|
|
|
—
|
|
|
(2,016
|
)
|
|
(2,016
|
)
|
||||
Interest expense
|
|
—
|
|
|
124
|
|
|
65
|
|
|
189
|
|
||||
Balance in other comprehensive income (loss) at June 30, 2014
|
|
$
|
(2,216
|
)
|
|
$
|
(441
|
)
|
|
$
|
(4,783
|
)
|
|
$
|
(7,440
|
)
|
|
|
Foreign Exchange Forward Contracts
|
|
Interest Rate Swap Contracts
|
|
Cross Currency Swap Contract
|
|
Total
|
||||||||
Balance in other comprehensive income (loss) at December 31, 2012
|
|
$
|
8,980
|
|
|
$
|
(1,467
|
)
|
|
$
|
(8,031
|
)
|
|
$
|
(518
|
)
|
Amounts recognized in other comprehensive income (loss)
|
|
4,135
|
|
|
100
|
|
|
(1,604
|
)
|
|
2,631
|
|
||||
Amounts reclassified to net sales as a result of forecasted transactions being probable of not occurring
|
|
(13,115
|
)
|
|
$
|
—
|
|
|
—
|
|
|
(13,115
|
)
|
|||
Amounts reclassified to earnings impacting:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency loss
|
|
—
|
|
|
—
|
|
|
1,974
|
|
|
1,974
|
|
||||
Interest expense
|
|
—
|
|
|
209
|
|
|
85
|
|
|
294
|
|
||||
Balance in other comprehensive income (loss) at March 31, 2013
|
|
$
|
—
|
|
|
$
|
(1,158
|
)
|
|
$
|
(7,576
|
)
|
|
$
|
(8,734
|
)
|
Amounts recognized in other comprehensive income (loss)
|
|
—
|
|
|
2
|
|
|
(313
|
)
|
|
(311
|
)
|
||||
Amounts reclassified to earnings impacting:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency loss
|
|
—
|
|
|
—
|
|
|
2,912
|
|
|
2,912
|
|
||||
Interest expense
|
|
—
|
|
|
196
|
|
|
106
|
|
|
302
|
|
||||
Balance in other comprehensive income (loss) at June 30, 2013
|
|
$
|
—
|
|
|
$
|
(960
|
)
|
|
$
|
(4,871
|
)
|
|
$
|
(5,831
|
)
|
|
|
|
Amount of Gain (Loss) Recognized in Income on Derivatives
|
||||||||||||||
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Derivatives not designated as hedging instruments under ASC 815:
|
Location of Gain (Loss) Recognized in Income on Derivatives
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Foreign exchange forward contracts
|
Foreign currency gain (loss)
|
|
$
|
(2,371
|
)
|
|
$
|
746
|
|
|
$
|
(3,040
|
)
|
|
$
|
1,863
|
|
Foreign exchange forward contracts
|
Cost of sales
|
|
$
|
840
|
|
|
$
|
(685
|
)
|
|
$
|
1,343
|
|
|
$
|
(773
|
)
|
Foreign exchange forward contracts
|
Net Sales
|
|
$
|
—
|
|
|
$
|
5,666
|
|
|
$
|
—
|
|
|
$
|
5,666
|
|
June 30, 2014
|
||||
Currency
|
|
Notional Amount
|
|
USD Equivalent
|
Australian dollar
|
|
AUD 113.0
|
|
$106.3
|
December 31, 2013
|
||||
Currency
|
|
Notional Amount
|
|
USD Equivalent
|
Australian dollar
|
|
AUD 148.9
|
|
$132.4
|
June 30, 2014
|
||||||
Transaction
|
|
Currency
|
|
Notional Amount
|
|
USD Equivalent
|
Purchase
|
|
Euro
|
|
€54.2
|
|
$73.9
|
Sell
|
|
Euro
|
|
€79.9
|
|
$108.9
|
Purchase
|
|
Australian dollar
|
|
AUD 17.4
|
|
$16.4
|
Sell
|
|
Australian dollar
|
|
AUD 58.4
|
|
$55.0
|
Purchase
|
|
Malaysian ringgit
|
|
MYR 169.4
|
|
$52.5
|
Sell
|
|
Malaysian ringgit
|
|
MYR 44.4
|
|
$13.8
|
Purchase
|
|
Canadian dollar
|
|
CAD 7.2
|
|
$6.8
|
Sell
|
|
Canadian dollar
|
|
CAD 16.4
|
|
$15.4
|
Purchase
|
|
Japanese yen
|
|
JPY 354.9
|
|
$3.5
|
Sell
|
|
Japanese yen
|
|
JPY 1,848.5
|
|
$18.5
|
•
|
Cash equivalents.
Our cash equivalents consisted of money market funds and time deposits and money market funds at
June 30, 2014
and
December 31, 2013
, respectively. We value our commercial paper cash equivalents using quoted prices for securities with similar characteristics and other observable inputs (such as interest rates that are observable at commonly quoted intervals). Accordingly, we classify the valuation techniques that use these inputs as Level 2. We value our money market cash equivalents using observable inputs that reflect quoted prices for securities with identical characteristics, and accordingly, we classify the valuation techniques that use these inputs as Level 1.
|
•
|
Marketable securities and restricted investments.
Our marketable securities consisted of
foreign debt, time deposits, U.S. debt and U.S. government obligations
and
foreign debt, foreign government obligations, U.S. debt and U.S. government obligations
at
June 30, 2014
and
December 31, 2013
, respectively. At
June 30, 2014
and
December 31, 2013
, our restricted investments consisted of
foreign and U.S. government obligations
. We value our marketable securities and restricted investments using quoted prices for securities with similar characteristics and other observable inputs (such as interest rates that are observable at commonly quoted intervals), and accordingly, we classify the valuation techniques that use these inputs as Level 2. We also consider the effect of our counterparties’ credit standings in these fair value measurements.
|
•
|
Derivative assets and liabilities
. At
June 30, 2014
and
December 31, 2013
, our derivative assets and liabilities consisted of foreign exchange forward contracts involving major currencies, interest rate swap contracts involving a benchmark of interest rates, and a cross-currency swap including both. Since our derivative assets and liabilities are not traded on an exchange, we value them using industry standard valuation models. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit risk, foreign exchange rates, and forward and spot prices for currencies. These inputs are observable in active markets over the contract term of the derivative instruments we hold, and accordingly, we classify these valuation techniques as Level 2. We consider the effect of our own credit standing and that of our counterparties in our fair value measurements of our derivative assets and liabilities, respectively.
|
|
|
June 30, 2014
|
||||||||||||||
|
|
|
|
Fair Value Measurements at Reporting
Date Using
|
||||||||||||
|
|
Total Fair
Value and
Carrying
Value on Our
Balance Sheet
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
$
|
3,091
|
|
|
$
|
3,091
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Time deposits
|
|
10,000
|
|
|
10,000
|
|
|
—
|
|
|
—
|
|
||||
Marketable securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign debt
|
|
455,903
|
|
|
—
|
|
|
455,903
|
|
|
—
|
|
||||
Time deposits
|
|
30,000
|
|
|
30,000
|
|
|
—
|
|
|
—
|
|
||||
U.S. debt
|
|
8,114
|
|
|
—
|
|
|
8,114
|
|
|
—
|
|
||||
U.S. government obligations
|
|
3,504
|
|
|
—
|
|
|
3,504
|
|
|
—
|
|
||||
Restricted investments (excluding restricted cash)
|
|
323,726
|
|
|
—
|
|
|
323,726
|
|
|
—
|
|
||||
Derivative assets
|
|
2,211
|
|
|
—
|
|
|
2,211
|
|
|
—
|
|
||||
Total assets
|
|
$
|
836,549
|
|
|
$
|
43,091
|
|
|
$
|
793,458
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
|
$
|
12,704
|
|
|
$
|
—
|
|
|
$
|
12,704
|
|
|
$
|
—
|
|
|
|
December 31, 2013
|
||||||||||||||
|
|
|
|
Fair Value Measurements at Reporting
Date Using
|
||||||||||||
|
|
Total Fair
Value and
Carrying
Value on Our
Balance Sheet
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|||||||
Money market funds
|
|
$
|
2,889
|
|
|
$
|
2,889
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Marketable securities:
|
|
|
|
|
|
|
|
|
||||||||
Foreign debt
|
|
364,046
|
|
|
—
|
|
|
364,046
|
|
|
—
|
|
||||
Foreign government obligations
|
|
25,115
|
|
|
—
|
|
|
25,115
|
|
|
—
|
|
||||
U.S. debt
|
|
46,439
|
|
|
—
|
|
|
46,439
|
|
|
—
|
|
||||
U.S. government obligations
|
|
3,502
|
|
|
—
|
|
|
3,502
|
|
|
—
|
|
||||
Restricted investments (excluding restricted cash)
|
|
279,274
|
|
|
—
|
|
|
279,274
|
|
|
—
|
|
||||
Derivative assets
|
|
8,278
|
|
|
—
|
|
|
8,278
|
|
|
—
|
|
||||
Total assets
|
|
$
|
729,543
|
|
|
$
|
2,889
|
|
|
$
|
726,654
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
|
$
|
16,204
|
|
|
$
|
—
|
|
|
$
|
16,204
|
|
|
$
|
—
|
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
|
$
|
497,521
|
|
|
$
|
497,521
|
|
|
$
|
439,102
|
|
|
$
|
439,102
|
|
Foreign exchange forward contract assets
|
|
$
|
2,211
|
|
|
$
|
2,211
|
|
|
$
|
8,278
|
|
|
$
|
8,278
|
|
Restricted investments (excluding restricted cash)
|
|
$
|
323,726
|
|
|
$
|
323,726
|
|
|
$
|
279,274
|
|
|
$
|
279,274
|
|
Notes receivable — noncurrent
|
|
$
|
9,541
|
|
|
$
|
9,721
|
|
|
$
|
9,655
|
|
|
$
|
9,633
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt, including current maturities
|
|
$
|
194,674
|
|
|
$
|
194,910
|
|
|
$
|
223,323
|
|
|
$
|
224,435
|
|
Interest rate swap contract liabilities
|
|
$
|
440
|
|
|
$
|
440
|
|
|
$
|
703
|
|
|
$
|
703
|
|
Cross-currency swap contract liabilities
|
|
$
|
5,577
|
|
|
$
|
5,577
|
|
|
$
|
9,673
|
|
|
$
|
9,673
|
|
Foreign exchange forward contract liabilities
|
|
$
|
6,687
|
|
|
$
|
6,687
|
|
|
$
|
5,828
|
|
|
$
|
5,828
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Number of projects
|
|
8
|
|
|
5
|
|
|
10
|
|
6
|
||||||
Increase (decrease) in gross profit resulting from net changes in estimates (in thousands):
|
|
$
|
4,502
|
|
|
$
|
7,609
|
|
|
$
|
(3,484
|
)
|
|
$
|
(4,530
|
)
|
Net change in estimates as percentage of aggregate gross profit for associated projects
|
|
0.4
|
%
|
|
0.4
|
%
|
|
(0.1
|
)%
|
|
(0.2
|
)%
|
|
|
|
|
|
|
Balance (USD)
|
||||||
Loan Agreement
|
|
Maturity
|
|
Loan Denomination
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Revolving Credit Facility (1)
|
|
July 2018 (Tranche A) October 2015 (Tranche B)
|
|
USD
|
|
$
|
—
|
|
|
$
|
—
|
|
Malaysian Ringgit Facility Agreement
|
|
September 2018
|
|
MYR
|
|
108,548
|
|
|
117,630
|
|
||
Malaysian Euro Facility Agreement
|
|
April 2018
|
|
EUR
|
|
43,655
|
|
|
49,699
|
|
||
Malaysian Facility Agreement
|
|
March 2016
|
|
EUR
|
|
41,945
|
|
|
55,637
|
|
||
Capital lease obligations
|
|
various
|
|
various
|
|
1,798
|
|
|
2,041
|
|
||
Long-term debt principal
|
|
|
|
|
|
$
|
195,946
|
|
|
$
|
225,007
|
|
Less unamortized discount
|
|
|
|
|
|
(1,272
|
)
|
|
(1,684
|
)
|
||
Total long-term debt
|
|
|
|
|
|
$
|
194,674
|
|
|
$
|
223,323
|
|
Less current portion
|
|
|
|
|
|
(60,838
|
)
|
|
(60,543
|
)
|
||
Noncurrent portion
|
|
|
|
|
|
$
|
133,836
|
|
|
$
|
162,780
|
|
Loan Agreement
|
|
Borrowing Rate at June 30, 2014
|
Revolving Credit Facility
|
|
2.41%
|
Malaysian Ringgit Facility Agreement
|
|
KLIBOR plus 2.00% (2)
|
Malaysian Euro Facility Agreement
|
|
EURIBOR plus 1.00%
|
Malaysian Facility Agreement (1)
|
|
Fixed rate facility at 4.54%
|
Floating rate facility at EURIBOR plus 0.55% (2)
|
||
Capital lease obligations
|
|
Various
|
(1)
|
Outstanding balance split equally between fixed and floating rates.
|
(2)
|
Interest rate hedges have been entered into relating to these variable rates.
See Note 8. “Derivative Financial Instruments,”
to our condensed consolidated financial statements.
|
Remainder of 2014
|
|
$
|
32,122
|
|
2015
|
|
57,376
|
|
|
2016
|
|
40,998
|
|
|
2017
|
|
34,559
|
|
|
2018
|
|
29,093
|
|
|
Total long-term debt future payments
|
|
$
|
194,148
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Product warranty liability, beginning of period
|
|
$
|
208,294
|
|
|
$
|
185,630
|
|
|
$
|
198,041
|
|
|
$
|
191,596
|
|
Accruals for new warranties issued
|
|
8,242
|
|
|
7,916
|
|
|
19,511
|
|
|
18,449
|
|
||||
Settlements
|
|
(3,498
|
)
|
|
(8,447
|
)
|
|
(7,577
|
)
|
|
(19,410
|
)
|
||||
Changes in estimate of product warranty liability
|
|
(2,211
|
)
|
|
4,158
|
|
|
852
|
|
|
(1,378
|
)
|
||||
Product warranty liability, end of period
|
|
$
|
210,827
|
|
|
$
|
189,257
|
|
|
$
|
210,827
|
|
|
$
|
189,257
|
|
Current portion of warranty liability
|
|
$
|
68,214
|
|
|
$
|
62,989
|
|
|
$
|
68,214
|
|
|
$
|
62,989
|
|
Noncurrent portion of warranty liability
|
|
$
|
142,613
|
|
|
$
|
126,268
|
|
|
$
|
142,613
|
|
|
$
|
126,268
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Share-based compensation expense included in:
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
|
$
|
680
|
|
|
$
|
1,307
|
|
|
$
|
5,990
|
|
|
$
|
5,823
|
|
Research and development
|
|
1,013
|
|
|
988
|
|
|
2,265
|
|
|
2,921
|
|
||||
Selling, general and administrative
|
|
6,458
|
|
|
5,207
|
|
|
13,194
|
|
|
14,926
|
|
||||
Production start-up
|
|
3
|
|
|
(72
|
)
|
|
3
|
|
|
248
|
|
||||
Total share-based compensation expense
|
|
$
|
8,154
|
|
|
$
|
7,430
|
|
|
$
|
21,452
|
|
|
$
|
23,918
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Restricted and performance stock units
|
|
$
|
9,411
|
|
|
$
|
7,244
|
|
|
$
|
21,931
|
|
|
$
|
25,680
|
|
Unrestricted stock
|
|
332
|
|
|
300
|
|
|
663
|
|
|
600
|
|
||||
Stock purchase plan
|
|
151
|
|
|
235
|
|
|
400
|
|
|
472
|
|
||||
Net amount released from (absorbed into) inventory
|
|
(1,740
|
)
|
|
(349
|
)
|
|
(1,542
|
)
|
|
(2,834
|
)
|
||||
Total share-based compensation expense
|
|
$
|
8,154
|
|
|
$
|
7,430
|
|
|
$
|
21,452
|
|
|
$
|
23,918
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Basic net income per share
|
|
|
|
|
|
|
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
4,528
|
|
|
$
|
33,598
|
|
|
$
|
116,535
|
|
|
$
|
92,740
|
|
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common stock outstanding
|
|
100,148
|
|
|
89,201
|
|
|
99,871
|
|
|
88,209
|
|
||||
Diluted net income per share
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common stock outstanding
|
|
100,148
|
|
|
89,201
|
|
|
99,871
|
|
|
88,209
|
|
||||
Effect of stock options, restricted and performance stock units, and stock purchase plan shares
|
|
1,666
|
|
|
1,941
|
|
|
1,949
|
|
|
2,056
|
|
||||
Weighted-average shares used in computing diluted net income per share
|
|
101,814
|
|
|
91,142
|
|
|
101,820
|
|
|
90,265
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Per share information — basic:
|
|
|
|
|
|
|
|
|
||||||||
Net income per share
|
|
$
|
0.05
|
|
|
$
|
0.38
|
|
|
$
|
1.17
|
|
|
$
|
1.05
|
|
|
|
|
|
|
|
|
|
|
||||||||
Per share information — diluted:
|
|
|
|
|
|
|
|
|
||||||||
Net income per share
|
|
$
|
0.04
|
|
|
$
|
0.37
|
|
|
$
|
1.14
|
|
|
$
|
1.03
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
Anti-dilutive shares
|
|
50
|
|
|
91
|
|
|
107
|
|
|
107
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
2014
|
|
2013
|
||||
Net income
|
|
$
|
4,528
|
|
|
$
|
33,598
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
||||
Foreign currency translation adjustments
|
|
(1,721
|
)
|
|
1,500
|
|
||
Unrealized gain (loss) on marketable securities and restricted investments for the period (net of tax of $(1,295) and $1,307, respectively)
|
|
18,572
|
|
|
(17,029
|
)
|
||
Less: reclassification for (gains) included in net income (net of tax of $83 and $0, respectively)
|
|
(127
|
)
|
|
—
|
|
||
Unrealized gain (loss) on marketable securities and restricted investments
|
|
18,445
|
|
|
(17,029
|
)
|
||
Unrealized gain (loss) on derivative instruments for the period (net of tax of $677 and $5, respectively)
|
|
417
|
|
|
(305
|
)
|
||
Less: reclassification for (gain) loss included in net income (net of tax of $0 and $0, respectively)
|
|
(1,827
|
)
|
|
3,214
|
|
||
Unrealized (loss) gain on derivative instruments
|
|
(1,410
|
)
|
|
2,909
|
|
||
Other comprehensive income (loss), net of tax
|
|
15,314
|
|
|
(12,620
|
)
|
||
Comprehensive income
|
|
$
|
19,842
|
|
|
$
|
20,978
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2014
|
|
2013
|
||||
Net income
|
|
$
|
116,535
|
|
|
$
|
92,740
|
|
Other comprehensive (loss), net of tax:
|
|
|
|
|
||||
Foreign currency translation adjustments
|
|
(1,661
|
)
|
|
(1,577
|
)
|
||
Unrealized gain (loss) on marketable securities and restricted investments for the period (net of tax of $(2,957) and $2,241, respectively)
|
|
38,748
|
|
|
(27,370
|
)
|
||
Less: reclassification for (gains) included in net income (loss) (net of tax of $83 and $0, respectively)
|
|
(127
|
)
|
|
—
|
|
||
Unrealized gain (loss) on marketable securities and restricted investments
|
|
38,621
|
|
|
(27,370
|
)
|
||
Unrealized (loss) gain on derivative instruments for the period (net of tax of $2,140 and $(1,101), respectively)
|
|
(1,455
|
)
|
|
1,220
|
|
||
Less: reclassification for (gains) included in net income (loss) (net of tax of $0 and $3,476, respectively)
|
|
(2,300
|
)
|
|
(4,157
|
)
|
||
Unrealized (loss) on derivative instruments
|
|
(3,755
|
)
|
|
(2,937
|
)
|
||
Other comprehensive income (loss), net of tax
|
|
33,205
|
|
|
(31,884
|
)
|
||
Comprehensive income
|
|
$
|
149,740
|
|
|
$
|
60,856
|
|
Components of Comprehensive Income (Loss)
|
|
Foreign Currency Translation Adjustment
|
|
Unrealized Gain (Loss) on Marketable Securities
|
|
Unrealized Gain (Loss) on Derivative Instruments
|
|
Total
|
||||||||
Balance as of December 31, 2013
|
|
$
|
(34,190
|
)
|
|
$
|
11,558
|
|
|
$
|
(3,144
|
)
|
|
$
|
(25,776
|
)
|
Other comprehensive (loss) income before reclassifications
|
|
(1,661
|
)
|
|
38,748
|
|
|
(1,455
|
)
|
|
35,632
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
|
—
|
|
|
(127
|
)
|
|
(2,300
|
)
|
|
(2,427
|
)
|
||||
Net other comprehensive (loss) income
|
|
(1,661
|
)
|
|
38,621
|
|
|
(3,755
|
)
|
|
33,205
|
|
||||
Balance as of June 30, 2014
|
|
$
|
(35,851
|
)
|
|
$
|
50,179
|
|
|
$
|
(6,899
|
)
|
|
$
|
7,429
|
|
Details of Accumulated Other Comprehensive Income (Loss)
|
|
Amount Reclassified
|
|
Income Statement Line Item
|
||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
||||||
|
June 30, 2014
|
|
June 30, 2014
|
|
||||||
Gains on marketable securities
|
|
|
|
|
|
|
||||
|
|
$
|
210
|
|
|
$
|
210
|
|
|
Other income, net
|
|
|
83
|
|
|
83
|
|
|
Tax expense
|
||
|
|
127
|
|
|
127
|
|
|
Net of tax
|
||
Gains and (losses) on derivative contracts
|
|
|
|
|
|
|
||||
Interest Rate and Cross Currency Swap Contracts
|
|
$
|
(189
|
)
|
|
(448
|
)
|
|
Interest expense
|
|
Cross Currency Swap Contracts
|
|
2,016
|
|
|
2,748
|
|
|
Foreign currency gain
|
||
|
|
1,827
|
|
|
2,300
|
|
|
Total before tax
|
||
|
|
—
|
|
|
—
|
|
|
Tax expense
|
||
|
|
$
|
1,827
|
|
|
$
|
2,300
|
|
|
Total net of tax
|
Components of Comprehensive Income (Loss)
|
|
Foreign Currency Translation Adjustment
|
|
Unrealized Gain (Loss) on Marketable Securities
|
|
Unrealized Gain (Loss) on Derivative Instruments
|
|
Total
|
||||||||
Balance as of December 31, 2012
|
|
$
|
(38,485
|
)
|
|
$
|
51,243
|
|
|
$
|
(2,579
|
)
|
|
$
|
10,179
|
|
Other comprehensive (loss) income before reclassifications
|
|
(1,577
|
)
|
|
(27,370
|
)
|
|
1,220
|
|
|
(27,727
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
|
—
|
|
|
—
|
|
|
(4,157
|
)
|
|
(4,157
|
)
|
||||
Net other comprehensive (loss)
|
|
(1,577
|
)
|
|
(27,370
|
)
|
|
(2,937
|
)
|
|
(31,884
|
)
|
||||
Balance as of June 30, 2013
|
|
$
|
(40,062
|
)
|
|
$
|
23,873
|
|
|
$
|
(5,516
|
)
|
|
$
|
(21,705
|
)
|
Details of Accumulated Other Comprehensive Income (Loss)
|
|
Amount Reclassified
|
|
Income Statement Line Item
|
||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
||||||
|
June 30, 2013
|
|
June 30, 2013
|
|
||||||
Gains and (losses) on derivative contracts
|
|
|
|
|
|
|
||||
Foreign Exchange Forward Contracts
|
|
$
|
—
|
|
|
13,115
|
|
|
Net sales
|
|
Interest Rate and Cross Currency Swap Contracts
|
|
(302
|
)
|
|
(596
|
)
|
|
Interest expense
|
||
Cross Currency Swap Contract
|
|
(2,912
|
)
|
|
(4,886
|
)
|
|
Foreign currency (loss)
|
||
|
|
(3,214
|
)
|
|
7,633
|
|
|
Total before tax
|
||
|
|
—
|
|
|
3,476
|
|
|
Tax expense
|
||
|
|
$
|
(3,214
|
)
|
|
$
|
4,157
|
|
|
Total net of tax
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2014
|
|
2013
|
||||
Net income
|
|
$
|
116,535
|
|
|
$
|
92,740
|
|
Adjustments to reconcile net income to cash (used in) provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation, amortization, and accretion
|
|
123,312
|
|
|
113,060
|
|
||
Impairment and net loss on disposal of long-lived assets
|
|
4,773
|
|
|
4,300
|
|
||
Impairment of project assets
|
|
—
|
|
|
—
|
|
||
Share-based compensation
|
|
21,452
|
|
|
23,918
|
|
||
Remeasurement of monetary assets and liabilities
|
|
4,416
|
|
|
(6,935
|
)
|
||
Deferred income tax expense (benefit)
|
|
(20,217
|
)
|
|
(7,769
|
)
|
||
Excess tax benefits from share-based compensation arrangements
|
|
(16,165
|
)
|
|
(55,695
|
)
|
||
Gain on sales of marketable securities, and restricted investments, net
|
|
(210
|
)
|
|
—
|
|
||
Other operating activities
|
|
2,016
|
|
|
121
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|||
Accounts receivable, trade, unbilled and retainage
|
|
(145,478
|
)
|
|
341,357
|
|
||
Prepaid expenses and other current assets
|
|
(856
|
)
|
|
93,438
|
|
||
Other assets
|
|
(2,573
|
)
|
|
449
|
|
||
Inventories and balance of systems parts
|
|
85,958
|
|
|
75,120
|
|
||
Project assets and deferred project costs
|
|
(92,826
|
)
|
|
(670,456
|
)
|
||
Accounts payable
|
|
(72,423
|
)
|
|
(129,314
|
)
|
||
Income taxes payable
|
|
39,151
|
|
|
28,256
|
|
||
Accrued expenses and other liabilities
|
|
(271,970
|
)
|
|
350,203
|
|
||
Accrued solar module collection and recycling liability
|
|
25,309
|
|
|
36,035
|
|
||
Total adjustments
|
|
(316,331
|
)
|
|
196,088
|
|
||
Net cash (used in) provided by operating activities
|
|
$
|
(199,796
|
)
|
|
$
|
288,828
|
|
|
|
Three Months Ended June 30,
|
|
Three Months Ended June 30,
|
||||||||||||||||||||
|
|
2014
|
|
2013
|
||||||||||||||||||||
|
|
Components
|
|
Systems
|
|
Total
|
|
Components
|
|
Systems
|
|
Total
|
||||||||||||
Net sales
|
|
$
|
194,061
|
|
|
$
|
350,292
|
|
|
$
|
544,353
|
|
|
$
|
192,908
|
|
|
$
|
326,852
|
|
|
$
|
519,760
|
|
Gross profit
|
|
$
|
686
|
|
|
$
|
92,039
|
|
|
$
|
92,725
|
|
|
$
|
(8,193
|
)
|
|
$
|
148,291
|
|
|
$
|
140,098
|
|
(Loss) income before income taxes
|
|
$
|
(44,559
|
)
|
|
$
|
46,921
|
|
|
$
|
2,362
|
|
|
$
|
(67,348
|
)
|
|
$
|
108,410
|
|
|
$
|
41,062
|
|
Goodwill
|
|
$
|
16,152
|
|
|
$
|
68,833
|
|
|
$
|
84,985
|
|
|
$
|
6,097
|
|
|
$
|
68,833
|
|
|
$
|
74,930
|
|
Total assets
|
|
$
|
4,007,064
|
|
|
$
|
2,604,951
|
|
|
$
|
6,612,015
|
|
|
$
|
4,140,842
|
|
|
$
|
2,727,284
|
|
|
$
|
6,868,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Six Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
|
2014
|
|
2013
|
||||||||||||||||||||
|
|
Components
|
|
Systems
|
|
Total
|
|
Components
|
|
Systems
|
|
Total
|
||||||||||||
Net sales
|
|
$
|
510,919
|
|
|
$
|
983,592
|
|
|
$
|
1,494,511
|
|
|
$
|
549,504
|
|
|
$
|
725,461
|
|
|
$
|
1,274,965
|
|
Gross profit
|
|
$
|
25,774
|
|
|
$
|
303,662
|
|
|
$
|
329,436
|
|
|
$
|
3,416
|
|
|
$
|
306,008
|
|
|
$
|
309,424
|
|
(Loss) income before income taxes
|
|
$
|
(73,985
|
)
|
|
$
|
217,207
|
|
|
$
|
143,222
|
|
|
$
|
(116,886
|
)
|
|
$
|
224,137
|
|
|
$
|
107,251
|
|
Goodwill
|
|
$
|
16,152
|
|
|
$
|
68,833
|
|
|
$
|
84,985
|
|
|
$
|
6,097
|
|
|
$
|
68,833
|
|
|
$
|
74,930
|
|
Total assets
|
|
$
|
4,007,064
|
|
|
$
|
2,604,951
|
|
|
$
|
6,612,015
|
|
|
$
|
4,140,842
|
|
|
$
|
2,727,284
|
|
|
$
|
6,868,126
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Solar module revenue
|
|
$
|
65,397
|
|
|
$
|
81,304
|
|
|
$
|
106,398
|
|
|
$
|
274,554
|
|
Solar power system revenue
|
|
478,956
|
|
|
438,456
|
|
|
1,388,113
|
|
|
1,000,411
|
|
||||
Net sales
|
|
$
|
544,353
|
|
|
$
|
519,760
|
|
|
$
|
1,494,511
|
|
|
$
|
1,274,965
|
|
•
|
Net sales for the
three
months ended
June 30, 2014
increased by 5% to
$544.4 million
compared to
$519.8 million
for the same period in
2013
. This increase in net sales was due to higher systems business project revenues, partially offset by lower net sales to third-party module customers due to a decrease in average selling price per watt. The increase in systems revenue was primarily attributable to meeting the criteria for full revenue recognition on our 50 MW Macho Springs project. In addition, we continued construction and related revenue recognition on our AV Solar Ranch One, Desert Sunlight and Topaz projects.
|
•
|
Net sales for the
six
months ended
June 30, 2014
increased by 17% to
$1,494.5 million
compared to
$1,275.0 million
for the same period in
2013
. The increase in net sales was due to higher systems business project revenues, partially offset by lower sales volumes to third-party module customers. The increase in systems revenue was primarily attributable to meeting the full revenue recognition on our 139 MW Campo Verde and 50 MW Macho Springs projects. We also commenced construction on a 102 MW AGL Nyngan Solar Project in Australia and multiple projects in California and recognized related initial revenue relating to progress made during the six months ended June 30, 2014. In addition, our systems revenue increased due to continued construction and related revenue recognition on our Topaz and Desert Sunlight projects.
|
•
|
Module shipments were 0.4 GW DC during the quarter ended
June 30, 2014
. Module shipments do not have a direct correlation to net sales as module shipments do not represent total systems revenues and do not consider the timing of when all revenue recognition criteria are met including timing of module installation.
|
•
|
New bookings during the period April 1, 2014 through
August 5, 2014
were 0.8 GW DC and reflects the 310 MW AC Tribal Solar solar power plant in California and 175 MW AC solar power plant in Southern California. The remainder of bookings consisted primarily of module only sales.
|
•
|
Gross profit decreased 10.0 percentage points to
17.0%
during the quarter ended
June 30, 2014
from
27.0%
during the quarter ended
June 30, 2013
, primarily due to a mix of lower gross profit projects sold and under construction during the period and lower average selling prices of our modules, partially offset by favorable capacity utilization, throughput improvements and lower manufacturing and raw materials costs.
|
•
|
Gross profit decreased 2.3 percentage points to
22.0%
during the six months ended
June 30, 2014
from
24.3%
during the six months ended
June 30, 2013
, primarily due to a mix of lower gross profit projects sold and under construction during the period and lower average selling prices of our modules, partially offset by favorable capacity utilization, throughput improvements and lower manufacturing and raw materials costs.
|
•
|
As of
June 30, 2014
, we had
28
installed production lines with an annual global manufacturing capacity of approximately
2.3 GW
at our manufacturing plants in Perrysburg, Ohio, and Kulim, Malaysia. We produced 0.4 GW DC of solar modules during the quarter ended
June 30, 2014
which represents a 15% increase from the same period in
2013
. We expect to produce approximately 1.8 GW of solar modules during
2014
and have produced 0.8 GW of solar modules during the first six months of 2014. This increase in production year-over-year is due to improved plant utilization, higher module efficiency and throughput improvements on the same number of production lines. During the three months ended
June 30, 2014
, we ran our factories at approximately 80% capacity utilization, which represents a 5 percentage point increase from the quarter ended
June 30, 2013
.
|
•
|
The average conversion efficiency of our modules was 14.0% in the second quarter of
2014
, which is an improvement of 100 basis points year-over-year.
|
•
|
We announced a new world record for CdTe cell efficiency at 21.0%, breaking our previous record of 20.4% that we announced in February 2014 and representing the seventh substantial update to CdTe record efficiency since 2011.
|
|
|
|
|
|
As of June 30, 2014
|
||
Project/Location
|
Project Size in MW AC (1)
|
Power Purchase Agreement (“PPA”)
|
Third Party Owner/Purchaser
|
Expected Year Revenue Recognition Will Be Completed By
|
Percentage Complete
|
Percentage of Revenue Recognized
|
|
Topaz, California
|
550
|
|
PG&E
|
MidAmerican
|
2014/2015
|
91%
|
91%
|
Desert Sunlight, California
|
550
|
|
PG&E / SCE
|
NextEra/GE/Sumitomo
|
2014/2015
|
90%
|
72%
|
McCoy, California
|
250
|
|
SCE
|
NextEra (2)
|
2016
|
—%
|
—%
|
Silver State South, Nevada
|
250
|
|
SCE
|
NextEra
|
2016
|
5%
|
—%
|
AVSR, California
|
230
|
|
PG&E
|
Exelon
|
2014
|
99%
|
99%
|
Southern California
|
175
|
|
Various
|
Various
|
2016
|
—%
|
—%
|
AGL, Australia
|
155
|
|
AGL
|
AGL (2) (6)
|
2015
|
7%
|
7%
|
Imperial Solar Energy Center West, California
|
150
|
|
SDG&E
|
Tenaska(2)
|
2016
|
—%
|
—%
|
California (Multiple Locations) (9)
|
79
|
|
PG&E/ SCE
|
Various (2)
|
2014
|
13%
|
13%
|
Copper Mountain 2, Nevada
|
58
|
|
PG&E
|
Sempra (2)
|
2015 (3)
|
—%
|
—%
|
Shams Ma’an, Jordan
|
53
|
|
NEPCO (2) (11)
|
Various (2)
|
2016
|
—%
|
—%
|
CID Solar and Cottonwood, California
|
43
|
|
PG&E / Marin Clean Energy
|
EDF Renewable Energy (2)
|
2015
|
2%
|
—%
|
PNM3, New Mexico
|
23
|
|
UOG (2)(4)
|
PNM (2)
|
2015
|
—%
|
—%
|
Total
|
2,566
|
|
|
|
|
|
|
Project/Location
|
Fully Permitted
|
Project Size in MW AC (1)
|
Power Purchase Agreement (“PPA”)
|
Expected or Actual Substantial Completion Year
|
As of June 30, 2014 Percentage Complete
|
|
Tribal Solar, California
|
No
|
310
|
|
SCE
|
2019
|
—%
|
Stateline, California
|
No
|
300
|
|
SCE
|
2016
|
—%
|
Moapa, Nevada
|
No
|
250
|
|
LADWP
|
2015
|
8%
|
SolarGen 2, California
|
Yes
|
150
|
|
SDG&E
|
2014
|
93%
|
California Flats, California
|
No
|
150
|
|
PG&E
|
2016 (5)
|
—%
|
North Star, California
|
No
|
60
|
|
PG&E
|
2015
|
—%
|
India (Multiple Locations)
|
No
|
45
|
|
TSSPDCL (12)
|
2015
|
—%
|
Cuyama, California
|
No
|
40
|
|
PG&E
|
2015/2016 (5)
|
—%
|
Kingbird, California
|
No
|
40
|
|
SCPPA (8)/City of Pasadena
|
2015
|
—%
|
Lost Hills, California
|
Yes
|
32
|
|
PG&E
|
2015 (7)
|
—%
|
Barilla, Texas
|
No
|
22
|
|
(10)
|
2014
|
60%
|
Total
|
|
1,399
|
|
|
|
|
(1)
|
The volume of modules installed in MW DC (“direct current”) will be higher than the MW AC (“alternating current”) size pursuant to a DC-AC ratio typically ranging from 1.2-1.4. Such ratio varies across different projects due to various system design factors
|
(2)
|
EPC contract or partner developed project
|
(3)
|
First 92 MW AC phase was completed in 2012. Remaining phase is 58 MW AC for which substantial completion is expected in 2015
|
(4)
|
UOG = Utility Owned Generation
|
(5)
|
PPA term does not begin until 2019
|
(6)
|
First Solar will own five percent of projects (102 MW AC Nyngan and 53 MW AC Broken Hill)
|
(7)
|
Project has short-term PPA that begins in 2015 with PG&E PPA beginning in 2019
|
(8)
|
SCPPA = Southern California Public Power Authority
|
(9)
|
Kent South (Kings County), Kansas (Kings County), Adams East (Fresno County) and Old River (Kern County)
|
(10)
|
Merchant Plant - No PPA
|
(11)
|
NEPCO = National Electric Power Company, the country of Jordan’s regulatory authority for power generation and distribution and a consortium of investors
|
(12)
|
TSSPDCL = Southern Power Distribution Company of Telangana State Ltd
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
Net sales
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
|
83.0
|
%
|
|
73.0
|
%
|
|
78.0
|
%
|
|
75.7
|
%
|
Gross profit
|
|
17.0
|
%
|
|
27.0
|
%
|
|
22.0
|
%
|
|
24.3
|
%
|
Research and development
|
|
6.0
|
%
|
|
6.0
|
%
|
|
4.8
|
%
|
|
4.8
|
%
|
Selling, general and administrative
|
|
10.6
|
%
|
|
12.7
|
%
|
|
7.8
|
%
|
|
11.0
|
%
|
Production start-up
|
|
0.1
|
%
|
|
0.3
|
%
|
|
—
|
%
|
|
0.2
|
%
|
Restructuring and asset impairments
|
|
—
|
%
|
|
0.5
|
%
|
|
—
|
%
|
|
0.4
|
%
|
Operating income
|
|
0.4
|
%
|
|
7.5
|
%
|
|
9.4
|
%
|
|
7.9
|
%
|
Foreign currency gain (loss)
|
|
—
|
%
|
|
(0.2
|
)%
|
|
—
|
%
|
|
—
|
%
|
Interest income
|
|
0.8
|
%
|
|
0.7
|
%
|
|
0.6
|
%
|
|
0.7
|
%
|
Interest expense, net
|
|
(0.2
|
)%
|
|
(0.2
|
)%
|
|
(0.1
|
)%
|
|
(0.1
|
)%
|
Other (expense) income, net
|
|
(0.6
|
)%
|
|
0.1
|
%
|
|
(0.3
|
)%
|
|
—
|
%
|
Income tax (benefit) expense
|
|
(0.4
|
)%
|
|
1.4
|
%
|
|
1.8
|
%
|
|
1.1
|
%
|
Net income
|
|
0.8
|
%
|
|
6.5
|
%
|
|
7.8
|
%
|
|
7.3
|
%
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
||||||||||||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
Three Month Period Change
|
|
2014
|
|
2013
|
|
Six Month Period Change
|
||||||||||||||||||
Solar module revenue
|
|
$
|
65,397
|
|
|
$
|
81,304
|
|
|
$
|
(15,907
|
)
|
|
(20
|
)%
|
|
$
|
106,398
|
|
|
$
|
274,554
|
|
|
$
|
(168,156
|
)
|
|
(61
|
)%
|
Solar power system revenue
|
|
478,956
|
|
|
438,456
|
|
|
40,500
|
|
|
9
|
%
|
|
1,388,113
|
|
|
1,000,411
|
|
|
387,702
|
|
|
39
|
%
|
||||||
Net sales
|
|
$
|
544,353
|
|
|
$
|
519,760
|
|
|
$
|
24,593
|
|
|
5
|
%
|
|
$
|
1,494,511
|
|
|
$
|
1,274,965
|
|
|
$
|
219,546
|
|
|
17
|
%
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
||||||||||||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
Three Month Period Change
|
|
2014
|
|
2013
|
|
Six Month Period Change
|
||||||||||||||||||
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Components
|
|
$
|
194,061
|
|
|
$
|
192,908
|
|
|
$
|
1,153
|
|
|
1
|
%
|
|
$
|
510,919
|
|
|
$
|
549,504
|
|
|
$
|
(38,585
|
)
|
|
(7
|
)%
|
Systems
|
|
350,292
|
|
|
326,852
|
|
|
23,440
|
|
|
7
|
%
|
|
983,592
|
|
|
725,461
|
|
|
258,131
|
|
|
36
|
%
|
||||||
Total Net sales
|
|
$
|
544,353
|
|
|
$
|
519,760
|
|
|
$
|
24,593
|
|
|
5
|
%
|
|
$
|
1,494,511
|
|
|
$
|
1,274,965
|
|
|
$
|
219,546
|
|
|
17
|
%
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
||||||||||||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
Three Month Period Change
|
|
2014
|
|
2013
|
|
Six Month Period Change
|
||||||||||||||||||
Cost of Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Components
|
|
$
|
193,375
|
|
|
$
|
201,101
|
|
|
$
|
(7,726
|
)
|
|
(4
|
)%
|
|
$
|
485,145
|
|
|
$
|
546,088
|
|
|
$
|
(60,943
|
)
|
|
(11
|
)%
|
Systems
|
|
258,253
|
|
|
178,561
|
|
|
79,692
|
|
|
45
|
%
|
|
679,930
|
|
|
419,453
|
|
|
260,477
|
|
|
62
|
%
|
||||||
Total Cost of Sales
|
|
$
|
451,628
|
|
|
$
|
379,662
|
|
|
$
|
71,966
|
|
|
19
|
%
|
|
$
|
1,165,075
|
|
|
$
|
965,541
|
|
|
$
|
199,534
|
|
|
21
|
%
|
% of net sales
|
|
83.0
|
%
|
|
73.0
|
%
|
|
|
|
|
|
|
|
78.0
|
%
|
|
75.7
|
%
|
|
|
|
|
•
|
Inventory related write-offs of $3.8 million during the three months ended June 30, 2013;
|
•
|
Underutilization of our manufacturing capacity decreased by 5 percentage points as we ran our factories at approximately 80% of capacity for the three months ended June 30, 2014 as compared to 75% of capacity utilization during the three months ended June 30, 2013, causing a $4.7 million reduction in cost of sales;
|
•
|
Expenses associated with inventory write-downs to lower of cost or market increased by $2.1 million; and
|
•
|
Increase expense associated with an increase in volume of solar modules sold, partially offset by a reduction in cost of sales from module efficiency improvements, manufacturing process and raw material cost reductions and throughput enhancements, variable cost declines related lower estimated future recycling obligations, causing a $2.2 million increase to cost of sales.
|
•
|
Module efficiency improvements, manufacturing process and raw material costs reductions and throughput enhancements, variable cost declines related to lower estimated future recycling obligations combined with increases in volume of solar modules resulted in a reduction to cost of sales of $46.6 million;
|
•
|
Underutilization of our manufacturing capacity decreased by 6 percentage points as we ran our factories at approximately 81% of capacity utilization for the six months ended June 30, 2014 as compared to 75% for the six months ended June 30, 2013, causing a $9.6 million reduction in cost of sales:
|
•
|
Inventory related write-offs of $3.8 million during the six months ended June 30, 2013; and
|
•
|
Expenses associated with inventory write-downs to lower of cost or market and other adjustments declined $2.5 million.
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
Three Month Period Change
|
|
2014
|
|
2013
|
|
Six Month Period Change
|
||||||||||||||||||
Gross profit
|
|
$
|
92,725
|
|
|
$
|
140,098
|
|
|
$
|
(47,373
|
)
|
|
(34
|
)%
|
|
$
|
329,436
|
|
|
$
|
309,424
|
|
|
$
|
20,012
|
|
|
6
|
%
|
% of net sales
|
|
17.0
|
%
|
|
27.0
|
%
|
|
|
|
|
|
|
|
22.0
|
%
|
|
24.3
|
%
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
Three Month Period Change
|
|
2014
|
|
2013
|
|
Six Month Period Change
|
||||||||||||||||||
Research and development
|
|
$
|
32,659
|
|
|
$
|
30,964
|
|
|
$
|
1,695
|
|
|
5
|
%
|
|
$
|
71,432
|
|
|
$
|
60,895
|
|
|
$
|
10,537
|
|
|
17
|
%
|
% of net sales
|
|
6.0
|
%
|
|
6.0
|
%
|
|
|
|
|
|
|
|
4.8
|
%
|
|
4.8
|
%
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
Three Month Period Change
|
|
2014
|
|
2013
|
|
Six Month Period Change
|
|||||||||||||||
Selling, general and administrative
|
|
$
|
57,667
|
|
|
$
|
66,265
|
|
|
$
|
(8,598
|
)
|
|
(13
|
)%
|
|
$
|
116,331
|
|
|
$
|
140,730
|
|
|
$(24,399)
|
|
(17)%
|
% of net sales
|
|
10.6
|
%
|
|
12.7
|
%
|
|
|
|
|
|
|
|
7.8
|
%
|
|
11.0
|
%
|
|
|
|
|
•
|
Depreciation and amortization expense declined $5.0 million primarily due to accelerated depreciation for certain leasehold improvements and sale of our Mesa facility in 2013;
|
•
|
Legal and professional services fees decreased by $4.2 million primarily due to lower legal fees incurred during the period; and
|
•
|
Salary and benefit expense increased $1.3 million, primarily due to increased stock based compensation as the result of a benefit from termination during the three months ended June 30, 2013.
|
•
|
Salary and benefit expense decreased by $7.6 million, primarily in connection with a decrease in salaries of $5.9 million due headcount reductions and lower incentive compensation, combined with a decrease of $1.7 million in share based compensation expense;
|
•
|
Depreciation and amortization expense declined $9.6 million primarily due to accelerated depreciation for certain leasehold improvements and sale of our Mesa facility in 2013; and
|
•
|
Legal and professional services fees decreased by $6.9 million primarily due to lower legal fees incurred during the period.
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
Three Month Period Change
|
|
2014
|
|
2013
|
|
Six Month Period Change
|
||||||||||||||||||
Production start-up
|
|
$
|
491
|
|
|
$
|
1,392
|
|
|
$
|
(901
|
)
|
|
(65
|
)%
|
|
$
|
491
|
|
|
$
|
2,768
|
|
|
$
|
(2,277
|
)
|
|
(82
|
)%
|
% of net sales
|
|
0.1
|
%
|
|
0.3
|
%
|
|
|
|
|
|
|
|
—
|
%
|
|
0.2
|
%
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
Three Month Period Change
|
|
2014
|
|
2013
|
|
Six Month Period Change
|
||||||||||||||||||
Restructuring and asset impairments
|
|
$
|
—
|
|
|
$
|
2,381
|
|
|
$
|
(2,381
|
)
|
|
(100
|
)%
|
|
$
|
—
|
|
|
$
|
4,728
|
|
|
$
|
(4,728
|
)
|
|
(100
|
)%
|
% of net sales
|
|
—
|
%
|
|
0.5
|
%
|
|
|
|
|
|
|
|
—
|
%
|
|
0.4
|
%
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
Three Month Period Change
|
|
2014
|
|
2013
|
|
Six Month Period Change
|
||||||||||||||||||
Foreign currency gain (loss)
|
|
$
|
21
|
|
|
$
|
(1,068
|
)
|
|
$
|
1,089
|
|
|
(102
|
)%
|
|
$
|
(558
|
)
|
|
$
|
550
|
|
|
$
|
(1,108
|
)
|
|
(201
|
)%
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
Three Month Period Change
|
|
2014
|
|
2013
|
|
Six Month Period Change
|
||||||||||||||||||
Interest income
|
|
$
|
4,533
|
|
|
$
|
3,405
|
|
|
$
|
1,128
|
|
|
33
|
%
|
|
$
|
8,854
|
|
|
$
|
8,352
|
|
|
$
|
502
|
|
|
6
|
%
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
Three Month Period Change
|
|
2014
|
|
2013
|
|
Six Month Period Change
|
||||||||||||||||||
Interest expense, net
|
|
$
|
(930
|
)
|
|
$
|
(875
|
)
|
|
$
|
(55
|
)
|
|
6
|
%
|
|
$
|
(1,340
|
)
|
|
$
|
(1,625
|
)
|
|
$
|
285
|
|
|
(18
|
)%
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
Three Month Period Change
|
|
2014
|
|
2013
|
|
Six Month Period Change
|
||||||||||||||||||
Other (expense) income, net
|
|
$
|
(3,170
|
)
|
|
$
|
504
|
|
|
$
|
(3,674
|
)
|
|
(729
|
)%
|
|
$
|
(4,916
|
)
|
|
$
|
(329
|
)
|
|
$
|
(4,587
|
)
|
|
1,394
|
%
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
Three Month Period Change
|
|
2014
|
|
2013
|
|
Six Month Period Change
|
||||||||||||||||||
Income (loss) before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Components
|
|
$
|
(44,559
|
)
|
|
$
|
(67,348
|
)
|
|
$
|
22,789
|
|
|
(34
|
)%
|
|
$
|
(73,985
|
)
|
|
$
|
(116,886
|
)
|
|
$
|
42,901
|
|
|
(37
|
)%
|
Systems
|
|
46,921
|
|
|
108,410
|
|
|
(61,489
|
)
|
|
(57
|
)%
|
|
217,207
|
|
|
224,137
|
|
|
(6,930
|
)
|
|
(3
|
)%
|
||||||
Total income (loss) before income taxes
|
|
$
|
2,362
|
|
|
$
|
41,062
|
|
|
$
|
(38,700
|
)
|
|
(94
|
)%
|
|
$
|
143,222
|
|
|
$
|
107,251
|
|
|
$
|
35,971
|
|
|
34
|
%
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
||||||||||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
Three Month Period Change
|
|
2014
|
|
2013
|
|
Six Month Period Change
|
||||||||||||||||||
Income tax (benefit) expense
|
|
$
|
(2,166
|
)
|
|
$
|
7,464
|
|
|
$
|
(9,630
|
)
|
|
(129
|
)%
|
|
$
|
26,687
|
|
|
$
|
14,511
|
|
|
$
|
12,176
|
|
|
84
|
%
|
Effective tax rate
|
|
(91.7
|
)%
|
|
18.2
|
%
|
|
|
|
|
|
|
|
18.6
|
%
|
|
13.5
|
%
|
|
|
|
|
•
|
The amount of accounts receivable, unbilled and retainage as of
June 30, 2014
was
$564.9 million
. Included in accounts receivable, unbilled and retainage as of
June 30, 2014
was
$51.4 million
of accounts receivable, unbilled. Accounts receivable, unbilled represents revenue that has been recognized in advance of billing the customer under the terms of the underlying construction contracts. Such construction costs have been funded with working capital and the unbilled amounts are expected to be billed and collected from customers during the next twelve months. Once we meet the billing criteria under a construction contract, we bill our customers accordingly and reclassify the
accounts receivable, unbilled and retainage
to
accounts receivable trade, net
. Included in accounts receivable, unbilled and retainage as of
June 30, 2014
was
$513.4 million
of current accounts receivable, retainage. Accounts receivable, retainage represents the portion of a systems project contract price earned by us for work performed, but held for payment by our customer as a form of security until we reach certain construction milestones. Such retainage amounts relate to construction costs incurred and construction work already performed.
|
•
|
The amount of finished goods inventory (“solar module inventory”) and BoS parts as of
June 30, 2014
was
$390.3 million
. As we continue with the construction of our advanced-stage project pipeline we must produce solar modules and procure BoS parts in the required volumes to support our planned construction schedules. As part of the normal construction cycle, we typically must manufacture modules or acquire the necessary BoS parts for construction activities in advance of receiving payment for such materials. Once solar modules and BoS parts are installed in a project, such installed amounts are classified as either project assets, deferred project costs, or cost of sales depending upon whether the project is subject to a definitive sales contract and whether all revenue recognition criteria have been met. Accordingly, as of any balance sheet date, our solar module inventory represents solar modules that will be installed in our advanced-stage project pipeline or that we expect to sell to third parties.
|
•
|
There may be a delay in when our solar module inventory and BoS parts can be converted into cash compared to a typical third-party module sale. Such timing differences temporarily reduce our liquidity to the extent that we have already paid for our BoS parts or the underlying costs to produce our solar module inventory. As previously announced, we have adjusted, and will in the future adjust, as necessary, our manufacturing capacity and planned solar module production levels, to match expected market demand. Any decrease in planned production reduces our risk and the impact on liquidity of having excess solar module inventories that we must sell to third parties and respond to market pricing uncertainties for solar modules. Our solar module inventory as of
June 30, 2014
, is expected to primarily support our systems business, including our advanced-stage project pipeline, with the remaining amounts being used to support expected near term demand for third-party module sales. As of
June 30, 2014
, approximately
$130 million
or
39%
of our solar module inventory was either on-site or in-transit to our systems projects. All BoS parts are for our systems business projects.
|
•
|
We expect to commit working capital during 2014 and beyond to acquire solar power projects in various stages of development including advanced-stage projects with PPAs and to continue developing those projects as necessary. Depending upon the size and stage of development, costs to acquire such solar power projects could be significant. When evaluating project acquisition opportunities, we consider both the strategic and financial benefits of any such acquisitions.
|
•
|
We expect joint ventures or other business arrangements with strategic partners to be a key part of our strategy. We have begun initiatives in several markets to expedite our penetration of those markets and establish relationships with potential strategic partners, customers, and policymakers. Many of these business arrangements are expected to involve a significant cash investment or other allocation of working capital that could reduce our liquidity or require us to pursue additional sources of financing, assuming such sources are available to us.
Additionally, we have elected, and may in the future elect or be required to temporarily retain a minority or non-controlling ownership interest in the underlying systems projects we develop, supply modules to, or construct. Any such retained ownership interest is expected to impact our liquidity to the extent we do not obtain new sources of capital to fund such investments.
|
•
|
Our restructuring initiatives are expected to result in total remaining cash payments of up to
$6 million
. Such cash payments are related to payments for other long-term tax liabilities, severance costs for reductions in workforce as a result of such restructuring initiatives and a land remediation accrual. There is the potential for additional future restructuring actions as we continue to align our manufacturing capacity with market demand, evaluate our cost structure and identify potential cost savings opportunities, and focus on developing target markets. We could in the future incur additional restructuring costs (including potentially the repayment of debt facilities and other amounts, the payment of severance to terminated employees, and other restructuring related costs) that could reduce our liquidity position to the point where we need to pursue additional sources of financing, assuming such sources are available to us.
See Note 4. “Restructuring and Asset Impairments,”
to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
|
•
|
During the remainder of 2014, we expect to spend
$185 million
to
$235 million
for capital expenditures, including expenditures for upgrades to existing machinery and equipment, which we believe will increase our solar module efficiencies. A majority of our capital expenditures for 2014 are expected to be in foreign currencies and are therefore subject to fluctuations in currency exchange rates.
|
•
|
Under the sales agreement for a solar power project, we may be required to repurchase such project if certain events occur, such as not achieving commercial operation of the project within a certain time frame. Although we consider the possibility that we would be required to repurchase any of our solar power projects to be remote, our current working capital and other available sources of liquidity may not be sufficient to make any required repurchase. If we are required to repurchase a solar power project we would have the ability to market and sell such project at then current market pricing, which could be at a lower than expected price to the extent the event requiring a repurchase impacts the project’s marketability. Our liquidity may also be impacted as the time between the repurchase of a project and the potential sale of such repurchased project could take several months.
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2014
|
|
2013
|
||||
Net cash (used in) provided by operating activities
|
|
$
|
(199,796
|
)
|
|
$
|
288,828
|
|
Net cash used in investing activities
|
|
(249,844
|
)
|
|
(437,620
|
)
|
||
Net cash (used in) provided by financing activities
|
|
(26,654
|
)
|
|
177,221
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
2,568
|
|
|
(1,066
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
|
$
|
(473,726
|
)
|
|
$
|
27,363
|
|
•
|
Our accounts receivable trade, unbilled and retainage, increased
$145.5 million
during the
six
months ended
June 30, 2014
as compared to a
$341.4 million
decrease during the
six
months ended
June 30, 2013
. Fluctuations in our accounts receivable trade, unbilled and retainage are primarily due to the number and size of utility-scale projects under construction, timing of billings and collections as well as timing of revenue recognition. We bill our customers once the billing criteria under a construction contract are met, generally around completion of certain project construction milestones. Increases in our accounts receivable trade, unbilled and retainage during the
six
months ended
June 30, 2014
were driven primarily by billings on our Desert Sunlight, Topaz, various California projects, EDF Renewable Energy and Silver State South projects, partially offset by cash collections on our AV Solar Ranch One and Agua Caliente projects.
|
•
|
Our project assets and deferred project costs, exclusive of net of effects from business combinations, increased
$92.8 million
during the
six
months ended
June 30, 2014
as compared to a
$670.5 million
increase during the
six
months ended
June 30, 2013
. The development and construction of solar power plants requires long periods of time and substantial initial investments, including costs associated with transmission deposits, land acquisition, permitting, legal and other costs and the actual costs of constructing a project. The increase in our project assets and deferred project costs during the
six
months ended
June 30, 2014
was driven by an increase in project assets of $258.1 million primarily as a result of continued development and construction of our SolarGen2, Moapa and Barilla projects, partially offset by decreases in project assets from our Maryland Solar and Macho Springs projects. These project assets increases were partially offset by decreases in deferred project costs of $230.3 million primarily due to the sale of our Campo Verde project during the first quarter of 2014 partially offset by increases in deferred project costs from our Desert Sunlight project.
|
•
|
Our accrued expenses and other liabilities, exclusive of net effects from business combinations, decreased
$272.0 million
during the
six
months ended
June 30, 2014
as compared to a
$350.2 million
increase during the
six
months ended
June 30, 2013
. Accrued expenses and other liabilities include billings in excess of costs and estimated earnings, which represents billings made or payments received in excess of revenue recognized on contracts accounted for under the percentage-of-completion method. Typically, billings are made on the completion of certain milestones as provided for in the sales arrangement and the timing of revenue recognition may be different from when we can bill the customer. Accrued expenses and other liabilities also includes payments and billings for deferred project costs, which represents customer payments received or customer billings made under the terms of solar power project related sales arrangements for which all revenue recognition criteria for real estate transactions have not yet been met. The decrease in our accrued expenses and other liabilities during the
six
months ended
June 30, 2014
was primarily attributable to attaining revenue recognition criteria under the full accrual method associated with our Campo Verde project, partially offset by billings for our Desert Sunlight and Silver State South projects in excess of revenue recognized.
|
Exhibit Number
|
Exhibit Description
|
10.1
|
Amended and Restated Corporate Governance Guidelines
|
10.2
|
Restricted Cash Agreement
|
31.01
|
Certification of Chief Executive Officer pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.02
|
Certification of Chief Financial Officer pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.01*
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
|
FIRST SOLAR, INC.
|
By:
MARK R. WIDMAR
|
Mark R. Widmar
|
Principal Accounting Officer
|
1.
|
The Board of Directors
- The business of First Solar, Inc. (the “Company”) shall be conducted under the oversight of the Board of Directors (the “Board”). The Board shall select the Chief Executive Officer (the “CEO”) and delegate to the CEO the authority and responsibility to manage the Company’s operations. The Board may select a Chairman of the Board (the “Chairman”). The day-to-day management of the Company, including the preparation of financial statements and short- and long-term strategic planning, is the responsibility of the Company’s management. The primary responsibility of the Board is to oversee and review management’s performance of these functions.
|
2.
|
Management
- The CEO and senior management shall be responsible for running the Company’s business operations.
|
1.
|
Chairman of the Board and Chief Executive Officer
- The Board shall have the authority to decide whether the Board shall have a Chairman and whether the positions of Chairman and CEO should be held by the same person and shall determine the best arrangement for the Company and its stockholders in light of all relevant and changing circumstances.
|
2.
|
Size of the Board
- The number of directors should not exceed a number that can function efficiently. The Nominating and Governance Committee shall consider and make recommendations to the Board concerning the appropriate size and needs of the Board.
|
3.
|
Board Independence
- The independence of a director is determined according to the Sarbanes-Oxley Act of 2002, the rules and regulations of the Securities and Exchange Commission and the listing standards of the Nasdaq Stock Market. The independence requirements of the Nasdaq Stock Market include a series of objective tests, such as that the director is not an employee of the Company and has not engaged in various types of business dealings with the Company. Because it is not possible to anticipate or explicitly provide for all potential conflicts of interest that may affect independence, the Board is also responsible for making an affirmative determination as to each independent director that no relationships exist which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the Board will review information provided by the directors and the Company with regard to each Director’s business and personal activities as they may relate to the Company and the Company’s management.
|
4.
|
Board Membership Criteria
- The Nominating and Governance Committee shall periodically review with the Board the appropriate skills and characteristics required of Board members given the current Board composition. It is the intent of the Board that the Board will be comprised of individuals who have distinguished records of leadership and success in their area of activity and who will make substantial contributions to Board operations and effectively represent the interests of the stockholders.
|
5.
|
Selection of New Director Candidates
- The Nominating and Governance Committee shall screen and select Board candidates.
|
6.
|
Director Orientation and Continuing Education
- The Company shall provide directors with an orientation and education program to familiarize them with the Company’s business operations and plans, industry trends and corporate governance practices, as well as ongoing education on issues facing the Company and on subjects that would assist the directors in discharging their duties.
|
7.
|
Directors Who Experience Change in Present Job Responsibilities or Other Relevant Circumstances
- When there is a significant change in the director’s principal occupation or business affiliation, or other circumstances arise which may raise questions about the director’s continuing qualifications in relation to the Board Membership Criteria set forth above, then the director shall tender her/his resignation or the Nominating and Governance Committee shall ask for such tender. The Nominating and Governance Committee shall consider the tendered resignation and recommend to the Board the action to be taken.
|
8.
|
Service On Other For-Profit Boards
- Independent directors are encouraged to evaluate carefully the time required to serve on other boards (excluding the boards of non-profit organizations) taking into account board attendance, preparation, participation and effectiveness on these boards. Independent directors must advise the Chair of the Nominating and Governance Committee before accepting an invitation to serve on another board to enable the Company to determine whether (i) any regulatory issues or potential conflicts are raised by the director accepting such an invitation and (ii) the director will have the time required for preparation, participation and attendance at meetings of the Board of the Company. Independent directors should not serve on more than five other boards of public companies in addition to the Board of the Company.
|
9.
|
Board Compensation Review
- The Compensation Committee shall periodically receive reports on the status of Board compensation in relation to other comparable U.S. companies and shall be responsible for recommending to the Board changes in compensation for non-employee directors. In recommending Board compensation, the Compensation Committee shall be guided by three goals: compensation should fairly pay directors for work required for a company of our size and scope; (ii) compensation should align directors’ interests with the long-term interests of the Company’s stockholders; and (iii) the structure of the compensation should be clearly disclosed to the Company’s stockholders.
|
10.
|
Majority Vote Policy
. In an uncontested election of directors, any nominee who receives a greater number of votes “withheld” from his or her election than votes “for” his or her election will, within five days following the certification of the shareholder vote, tender his or her written resignation to the Chairman for consideration by the Nominating and Governance Committee. As used herein, an “uncontested election of directors” is an election in which the number of nominees is not greater than the number of Board seats open for election.
|
1.
|
Selection of Agenda Items for Board Meetings
- Annually, the Chairman and the CEO will propose for the Board’s approval a schedule for Board and Committee meetings for the upcoming year. Before each meeting, the Chairman and CEO will prepare an agenda which will be circulated to the Board in advance. Management will review proposed agenda items that fall within the scope of responsibilities of a Board committee with the chair of that committee. Any Board member may ask to include items on the agenda.
|
2.
|
Board Materials Distributed in Advance
- Board members shall receive materials related to agenda items in advance of Board meetings so that the directors may prepare to discuss the items at the meeting. Sensitive subjects may be discussed at the meeting without distributing written materials in advance or at the meeting.
|
3.
|
Director Responsibilities
- Directors must exercise their business judgment to act in the best interests of the stockholders and the Company. In discharging this obligation, directors reasonably may rely on the Company’s senior executives and its advisors and auditors. Directors are expected to attend and participate in substantially all meetings of the Board and of committees on which they serve, to spend the time needed to prepare for meetings and to meet as frequently as necessary to discharge their responsibilities.
|
4.
|
Board Presentations and Access to Employees
- Members of senior management may be invited to attend part or all of a Board or Board committee meeting in order to participate in discussions. Generally, presentation of matters to be considered by the Board or Board committee are made by the executive responsible for that area of the Company’s operations. Board members shall have complete access to all other members of management and Company employees.
|
5.
|
Board Access to Independent Advisors
- The Board and its committees may seek advice from outside advisors as appropriate. The Board shall have sole authority to approve related fees and retention terms.
|
6.
|
Executive Sessions of Non-Management Directors
- The independent directors shall meet on a regular basis (at least twice per year) outside the presence of the non-independent directors.
|
1.
|
Committees
- The current Board committees are Audit, Compensation, Nominating and Governance, Project Development Risk and Technology Review.
|
2.
|
Assignment and Term of Service of Committee Members
- The Board shall be responsible for the appointment of committee members and chairs, based on recommendations of the Nominating and Governance Committee. The Board at its first meeting following the annual meeting of stockholders shall elect the members of each committee.
|
3.
|
Agenda, Frequency, Length and Reports of Committee Meetings
- The chair of each committee shall approve the agenda, length of and attendance at each committee meeting and shall determine the frequency of meetings. Materials related to agenda items shall be given to the committee members sufficiently in advance to allow the members to prepare for discussing the items at the meeting. The committee chairs shall report a summary of their meeting to the Board following each regular committee meeting, as requested.
|
4.
|
Membership
- Only directors meeting the membership requirements of the applicable committee charter may serve on a committee.
|
5.
|
Responsibilities
- The Board shall periodically review the responsibilities of each committee and approve the committee charters, copies of which are attached to these guidelines.
|
1.
|
Formal Evaluation of the CEO
- The Compensation Committee, in consultation with the Chairman and the CEO, shall set annual and long-term performance goals for the Company. The Chair of the Compensation Committee shall lead the discussion of the CEO’s performance relative to such goals with the independent directors and communicate the Board’s evaluation to the CEO. The Compensation Committee will use the evaluation as a factor when determining the compensation of the CEO.
|
2.
|
Board Self-Assessment
- The Board shall conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. The Nominating and Governance Committee shall solicit comments from all directors and share those comments with the Board. Based on the comments and further discussion, the Board shall make an assessment specifically reviewing areas in which the Board and/or management believes improvements could be made to increase the effectiveness of the Board and its committees.
|
3.
|
Succession Planning
- The Board shall periodically review the Company’s plans regarding succession of the CEO and other senior executive positions. To assist the Board, the CEO shall annually assess senior executives and their succession potential. The CEO shall also provide the Board with an assessment of persons considered potential successors to certain senior executive positions.
|
4.
|
Management Development
- The CEO shall periodically report to the Board on the Company’s program for management development.
|
Nature of Deposit
(Time, Money
Mkt or CD)
|
Location
(NY, IBF-
NY, etc.)
|
Collateral
Account
(Certificate) No.
|
Issue or
Opening Date
|
(Current)
Principal
Amount
|
MMDA
|
NY
|
101,621,300
|
July 30, 2012
|
$70,408,959.60
|
1
|
I have reviewed the
Quarterly
Report on Form
10-Q
of First Solar, Inc., a Delaware corporation, for the period ended
June 30, 2014
, as filed with the Securities and Exchange Commission;
|
2
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3
|
Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for, the periods presented in this report;
|
4
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
August 6, 2014
|
/s/ JAMES A. HUGHES
|
|
|
|
James A. Hughes
|
|
|
|
Chief Executive Officer
|
|
1
|
I have reviewed the
Quarterly
Report on Form
10-Q
of First Solar, Inc., a Delaware corporation, for the period ended
June 30, 2014
, as filed with the Securities and Exchange Commission;
|
2
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3
|
Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for, the periods presented in this report;
|
4
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
August 6, 2014
|
/s/ MARK R. WIDMAR
|
|
|
|
Mark R. Widmar
|
|
|
|
Chief Financial Officer
|
|
|
(1
|
)
|
|
the quarterly report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|||||
|
|
|
|
||||||
|
(2
|
)
|
|
the information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of First Solar, Inc. for the periods presented therein.
|
|||||
|
|
|
|
|
|
||||
|
|
|
|||||||
Date:
|
August 6, 2014
|
/s/ JAMES A. HUGHES
|
|
||||||
|
James A. Hughes
|
|
|||||||
|
Chief Executive Officer
|
|
|||||||
|
|||||||||
|
|
|
|||||||
Date:
|
August 6, 2014
|
/s/ MARK R. WIDMAR
|
|
||||||
|
Mark R. Widmar
|
|
|||||||
|
Chief Financial Officer
|
|
|||||||
|