Stephen Haymore - First Solar, Inc. Mark R. Widmar - First Solar, Inc. Alexander R. Bradley - First Solar, Inc.

Colin Rusch - Oppenheimer & Co., Inc. (Broker) Tyler Charles Frank - Robert W. Baird & Co., Inc. (Private Wealth Management) Vishal Shah - Deutsche Bank Philip Lee-Wei Shen - ROTH Capital Partners LLC Paul Coster - JPMorgan Securities LLC Julien Dumoulin-Smith - UBS Securities LLC Brian Lee - Goldman Sachs & Co. Sophie Karp - Guggenheim Securities LLC Krish Sankar - Bank of America Merrill Lynch Pavel S. Molchanov - Raymond James & Associates, Inc.

Good afternoon, everyone, and welcome to First Solar's Third Quarter 2016 Earnings Call. This call is being webcast live on the Investors section of First Solar's website at firstsolar.com. At this time, all participants are in a listen-only mode. As a reminder, today's call is being recorded. I would now like to turn the call over to Steve Haymore from First Solar's Investor Relations. Mr. Haymore, you may begin. Stephen Haymore - First Solar, Inc.: Thank you. Good afternoon, everyone and thank you for joining us. Today, the company issued a press release announcing its financial results for the third quarter of 2016. A copy of the press release and the presentation are available on the Investors section of First Solar's website at firstsolar.com. With me today are Mark Widmar, Chief Executive Officer; and Alex Bradley, Chief Financial Officer. Mark will provide a business and technology update. Then Alex will discuss our third quarter financial results and provide updated guidance for 2016. We will then open up the call for questions. Most of the financial numbers reported and discussed on today's call are based on U.S. Generally Accepted Accounting Principles. In the few cases where we report non-GAAP measures such as free cash flow or non-GAAP EPS, we have reconciled the non-GAAP measures and the corresponding GAAP measures at the back of the presentation. Please note, this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to review the Safe Harbor statements contained in today's press release and presentation for a more complete description. It is now my pleasure to introduce Mark Widmar, Chief Executive Officer. Mark? Mark R. Widmar - First Solar, Inc.: Thanks, Steve. Good afternoon, and thank you for joining us today. We had another good quarter of financial results in Q3 with net sales of $688 million and an earnings per share, excluding restructuring charges and a foreign tax benefit of $1.22. We continue to push forward on our technology roadmap with our best line efficiency exiting the third quarter, almost touching 17% at 16.9% efficiency. Our project execution was also strong as we continued construction on multiple utility-scale solar projects and continue to realize significant BoS savings. Despite the results of the past quarter, the rapidly evolving market pricing environment as shown on slide four, presents significant challenges to the upcoming year. While we will not be discussing our 2017 outlook on today's call, it is important to understand the dramatic pricing declines in the industry is currently experiencing and how we intend to respond. As we highlighted on our Q2 earnings call, we saw the module and PPA pricing environment at that time as increasingly aggressive and challenging. However, the impact of the lower second half 2016 installs in China were only just becoming evident. And the week since that call we have seen other module manufacturers continuing to bring online new capacity in the phase of the demand drop off in China. As a result of the oversupply and growing inventories, module pricing has declined at a dramatic rate in the third quarter. Since quarter end, there has been some signs of potential stabilization, as wafer and cell spot prices first leveled off, then increased slightly. In addition, module ASPs has leveled off perhaps finding a near-term floor as manufacturers clear inventory. As we said consistently and reiterated on our Q1 2016 earnings call, when an oversupply situation exists, our strategy is to take a disciplined approach to the market. This means that we may walk away from module supply opportunity if the economics do not make sense for us. During the past quarter, challenging pricing conditions dictated that in certain situations we needed to apply this strategy, which has impacted our near-term bookings, but we continue to view this strategy as the most sensible long-term approach. In these types of oversupply situations, we also will look very closely at our module manufacturing capacity. Our goal is not to push supply into a saturated and margin challenged market, but rather to balance production to meet demand. As a result of this strategy and current market conditions, we have begun the process of evaluating our module capacity for next year. Closely connected to any capacity decisions is the timing of our Series 5 and Series 6 product transitions. In regard to Series 5, we are looking very hard at the cost structure and how to bring the module cost per watt down further in this competitive environment. In terms of our Series 6 product, we have dedicated significant resources to focus on how to accelerate the roadmap and product availability. In the current ASP environment without further cost reduction, Series 4 and Series 5 margins may be challenged. We expect that our Series 6 module would be our most competitive product and enable us to capture greater gross margin per watt. Beyond both pricing and capacity decisions, we are also focused on identifying ways to improve our operating expense profile, which would improve our competitiveness. We are progressing in our evaluation of each of these initiatives. However, any final decisions are subject to our normal Board review process. We will hold a separate call on November 16 to discuss the 2017 outlook and provide further updates at that time. Turning to slide five, I'll provide an update on bookings activity since our last earnings call. As we announced in our recent press release, we have signed a PPA of up to 160 megawatts with MCE, a leading community choice aggregator in California. While we are only including 40 megawatts in our bookings number this quarter, we have an option to expand the project to a total of 160 megawatts, subject to satisfaction of certain PPA contract conditions and based on the load increase from potential MCE expansion. Construction of the project is anticipated to begin in 2019 with commissioning expected in 2020. CCAs are increasingly important providers of electricity to customers both in California and a growing number of other states. CCAs offer their customers the benefit of local control, competitive power rates and access to a higher mix of renewable energy. MCE provides power to over 250,000 customers in California and with the addition of other entrants in the CCA market in the coming months, the total CCA customer base in the state is expected to grow to approximately 1 million customers. We are excited to begin a new association with MCE and help make affordable clean power even more accessible. The growth of CCA's across the nation also mirrors the growth of community solar that is occurring across the United States. As we've highlighted last quarter, we have booked over 120 megawatts DC of module supply to community solar projects so far this year. These projects are only part of the rapid growth that is continuing in the community solar space across the United States. While the initial growth in community solar has been specific to certain states, the momentum continues to build. There are now community solar projects in 24 states and 20 additional states are in the process of enacting community solar policies. In 2016 alone, 19 new utilities have started community solar programs. We continue to work closely with Clean Energy Collective and other community solar providers to identify new opportunities to facilitate market growth. Highlighting the growing scale of community solar projects, South Carolina Electric and Gas recently selected CEC to develop, construct and operate a 16 megawatt portfolio of projects. With a much lower cost than rooftop solar and the opportunity to rate base projects in certain situations, community solar is a utility-friendly model that is expected to grow substantially in coming years. Returning to the current quarter, we had module-only bookings of over 200 megawatts since our last call, bringing the total bookings since the last call to nearly 250 megawatts. The largest of these module bookings, approximately 100 megawatts, was to supply our customer awarded volume under the most recent French tender. Module shipments timing will be late Q4 2016 and into 2017. Outside the volume in France, we are seeing increasing geographical diversity at our module-only opportunities. Besides the U.S. we had bookings in Thailand, various countries across Asia and Latin America. As we look forward, we continue to see a number of opportunities that we anticipate will lead to growth – to stronger module bookings in the next several months. As highlighted last quarter, there are a number of awarded projects, which we had not yet converted to bookings. At this point, we have converted over 160 megawatts of these projects into bookings and they are reflected in today's number. With additional 105 megawatts DC of opportunities related to projects awarded under the recent ARENA large-scale solar grant in Australia, our awarded, but not booked volume now stands at approximately 270 megawatts. As a highlight, the ARENA volume includes our first self developed project in Australia. Keep in mind, this awarded volume is not reflected in slides five and six. Also not included in the bookings number are a number of O&M contracts which we have signed this year. With over 5 gigawatts of generation capacity in operation and more than 7 gigawatts of contracted capacity, First Solar is the recognized industry-leader in providing O&M services for utility-scale solar power plants. With a complete end-to-end solution and fleet availability of 99.6%, First Solar offers customers a compelling combination of expertise and proven performance. Our O&M business continues to grow not only by securing contracts on projects where we perform the EPC, but also through third-party contracts. Year-to-date, we have signed 930 megawatts of third-party O&M agreements. In addition to signing agreements with existing customers, these recent bookings also include six new third-party customers. Beyond these third-party bookings, we have contracted over 540 megawatts of additional volume for projects we have constructed, bringing the total year-to-date O&M bookings to nearly 1.5 gigawatts. With additional advanced stage opportunities currently under negotiation, bookings could reach over 1 point of gigawatts by year-end. Overall, we are pleased with the progress we are making in third-party O&M business and the stable revenue and earnings it provides. The lower module and system bookings this past quarter are primarily a result of the current module ASP and PPA pricing environment. Our strategy has been to pursue opportunities in markets where we can best leverage the energy yield advantage of our technology while maintaining discipline around returns. However, the willingness of other module manufacturers to continue ramping capacity and selling modules at very aggressive ASPs presents near-term challenges. The decline in ASP environment has also led to some instances where customers have delayed signing agreements in hope of further pricing declines. While achieving a one-to-one book-to-bill ratio this year will be challenging, as we look into the fourth quarter we have a number of bookings opportunities that we believe we are well positioned despite the current market environment. Turning to slide seven, I'll provide an update on our potential bookings opportunities, which has grown to over 25.4 gigawatts DC, an increase of approximately 1.4 gigawatts from the prior quarter. Our mid- to late-stage bookings opportunities are 1.1 gigawatts with the awarded volume discussed earlier included in this total. Approximately one-third of the late-stage opportunities are systems projects with the balance comprised of module-only sales. The reduction in the mid- to late-stage opportunities since last quarter was approximately 700 megawatts. Of this amount, over 150 megawatts were due to projects that converted into bookings, another 350 megawatts of systems project opportunities were closed in both Egypt and South Africa due to uncertain market conditions in both countries. The remaining decrease was due to projects lost to aggressive pricing terms. In these situations, we chose to remain disciplined and not to match uneconomic pricing. The growth in the overall potential bookings opportunity is primarily driven by new project development opportunities, which we expect to be delivered in 2018 and beyond. The long-term demand driver for solar continues to be strong, and we are working actively to position ourselves to meet the long-term demand. On slide eight, we have updated the geographic mix of our potential bookings. The increase in our potential bookings opportunity is primarily driven by new opportunities in the United States. One of the factors driving the increase in the United States potential bookings is the increase from C&I customers. This continues to develop into a promising utility-scale solar market that we feel we are well-positioned to be successful in upcoming years. Corporations globally have announced plans for renewable procurement that collectively total into 10s of gigawatts. We currently have more than 2 gigawatts of active offers in progress today with C&I customers. Most of these projects are still early stage and have longer dated CODs, but they represent another encouraging demand driver for the long-term growth of solar. One of the factors that provides First Solar an advantage in this market space is the sensitivity C&I customers have to reputational risk. They don't want to see a project fail or not be delivered. With our financial strength and our development track record, we are well-positioned to meet their needs. Lastly, as announced recently, Alex Bradley has been appointed our new Chief Financial Officer. As you are aware, Alex has been serving as our interim CFO since July and has made a seamless transition from his previous responsibility as Head of Project Finance and Treasury. During his time at First Solar, Alex has led or supported the financing and sale of almost all of our utility-scale solar projects. The experience and scale Alex brings into his role will be a tremendous benefit to First Solar and its shareholders. Alex will now provide more detail on the third-quarter financial results and discuss updated guidance for 2016. Alexander R. Bradley - First Solar, Inc.: Thanks Mark. Before going into the quarter results I want to express my excitement at the opportunity to take on the role of CFO at First Solar. Since I joined the company in 2008, the solar industry has changed enormously and it continues to evolve at a rapid pace. First Solar's unique technology advantages and financial strength position the company for long-term success. And I look forward to the opportunities that lie ahead for us. Turning to the quarter, I'll start from slide 11 with some operational highlights. We produced 779 megawatts DC in the third quarter, a decrease of 1% from the prior quarter. The slight decrease is due to an increase in upgrade activities across the fleet, partially offset by higher fleet efficiency. Relative to the third quarter of 2015, production was 19% higher as a result of higher module efficiency, increased capacity utilization and the addition of new capacity. Factory capacity utilization was 97% in Q3, a decrease of three percentage points from the prior quarter. The lower utilization was also a result of the increase in fleet upgrade activities. And as compared to the third quarter of 2015 capacity utilization increased by three percentage points. Fleet average module conversion efficiency increased to 16.5%, a 30 basis point increase quarter-over-quarter and a 70 basis point increase year-over-year. Module conversion efficiency on our best line averaged 16.6% in Q3. As Mark noted, our lead line exited the quarter at 16.9%, highlighting the impact of recent improvement programs deployed. Next on slide 12, I'll discuss the P&L results for the third quarter. Net sales were $688 million, a decrease of $246 million compared to the prior quarter. The sales decrease resulted from lower systems revenue recognition on our Astoria, Silver State South, Kingbird and other projects. The lower systems revenue was partially offset by an increase in module-only sales. As a percentage of total quarterly net sales of solar power systems revenue, which includes both our EPC revenue and solar modules used in systems projects, decreased to 69% from 83% in the prior quarter as a result of the higher mix of module-only sales. Gross margin for the quarter was 27% compared to 20% in the second quarter. The improvement in gross margin percentage resulted from the higher mix of third-party module sales as well as improved systems margin resulting from project cost reductions. The gross margin of our component segment was 32% in Q3 compared to 24% in Q2. The increase versus the prior quarter is primarily due to lower module cost per watt from improved efficiency and lower inventory write-downs. Operating expenses, excluding restructuring and asset impairment charges, were $93 million in Q3, a decrease of $4 million from the prior quarter. Operating expenses decreased primarily due to lower employee-related costs. Restructuring and asset impairment charges of $4 million in the quarter compared to $86 million in Q2. The restructuring charges are related to the actions announced in Q2, including discontinuing our TetraSun product, the disposition of skytron and EPC reductions. The total charges for all these actions are now expected to be slightly lower in a range of $105 million to $115 million compared to the $105 million to $120 million range originally anticipated with most of the impact in 2016. Operating expense savings from these actions is expected to be in the range of $35 million to $45 million per annum. Excluding restructuring-related items, operating income was $93 million for the third quarter compared to $95 million in the prior quarter. The decrease is due to lower revenue partially offset by higher gross margin percentage and lower operating expenses. Other income was $6 million in the third quarter primarily due to the resolution of an outstanding matter with a former customer. Second quarter other income was $7 million mainly due to reversal of outstanding contingent considerations related to the TetraSun acquisition. We had a tax benefit of $51 million in Q3 compared to tax expense of $9 million in the second quarter. As we indicated on last quarter's call, in July we received a favorable ruling from foreign tax authority, which has resulted in a $35 million tax benefit to our Q3 results. Note that for purposes of our full-year non-GAAP EPS guidance we've excluded this benefit. The third-quarter results also include a tax benefit of $13 million associated with the expiration of a statute to limitations on various uncertain tax positions. Third-quarter earnings were $1.49 per fully diluted share on a GAAP basis and $1.22 on a non-GAAP basis. This compared to earnings of $0.13 and non-GAAP earnings of $0.87 in the prior quarter. And please refer to the appendix of the earnings presentation for the GAAP to non-GAAP EPS reconciliation. Turning to slide 13, I'll discuss select balance sheet items and summary cash flow information. Cash and marketable securities increased $423 million to an ending balance of $2.1 billion. Our net cash position decreased slightly to $1.3 billion from $1.4 billion in the prior quarter as a result of continuing to construct certain projects on balance sheet. The increase in cash resulted primarily from borrowing on our revolving credit facility. With ongoing funding of several substantial projects on the balance sheet, the short-term borrowing on our revolver was necessary to fund domestic requirements, while complying with certain statutory funding requirements. As we sell the projects we have been constructing on balance sheet, we expect to pay down our revolver in either Q4 of 2016 or Q1 of 2017. For the quarter, net working capital, including the change in non-current project assets and excluding cash and marketable securities, decreased by over $430 million, primarily due to the increase in short-term borrowings. Excluding this item, net working capital would have increased primarily due to the growth in project assets. Total debt in the third quarter was $787 million, an increase of $554 million from the prior quarter. And as discussed previously, this increase was primarily due to the borrowing under the revolver. Cash flows used in operations were $76 million, compared to cash flows used in operations of $75 million in Q2. Free cash flow was negative $132 million compared to negative free cash flow of $139 million last quarter. Capital expenditures were $46 million compared to $78 million in the prior quarter and depreciation for the quarter was $52 million or approximately $1 million lower than the prior quarter. I'll now discuss the updates to our full-year 2016 guidance on slide 14. Firstly, keep in mind that, as Mark mentioned, we are in the process of evaluating certain decisions related to our production capacity, module product transitions, and operating expense rationalization. As a result, our current view of 2016 guidance on a GAAP basis could be subject to change depending upon the outcome of this process. To the extent there are any changes to 2016 outlook, these will be provided on the 2017 guidance call on November 16. Also, as we've communicated over the course of the year, we constructed our guidance to account for factors that could impact the timing of the large and complex project sales included in our forecasts. As a result of this approach, we've been able to maintain our earnings per share guidance even while our net sales guidance has been lowered, due to revised timing of certain project sales. It's important to keep this context in mind as we discuss the updates. Our net sales guidance has been revised to $2.8 billion to $2.9 billion from the prior guidance of $3.8 billion to $4 billion. This change is due to project timing, as we now expect to complete the sale of our Moapa and California Flats projects in 2017. Regarding Moapa, we recently closed tax equity financing for the project and received a portion of the cash in Q4. The marketing of the remaining cash equity has generated considerable interest and we expect that sale to close in Q1 of 2017. In relation to our Stateline project, we've offered our remaining 34% interest at 8point3. The project sale is advancing and is expected to close by year-end. In the guidance that we provided today, we are including only a portion of the remaining 34% interest in the project pending the final approval and closing of the sale. As previously indicated, to the extent that we do sell the entire remaining interest in 2016 this will likely result in earnings at or above the high end of the guidance range provided today. As a reminder, the profit from the remaining sale to 8point3 will be reflected below operating income in equity and earnings and not in revenue and gross margin. Resulting from the changes in the timing of project sales we're updating our gross margin guidance to 25.5% to 26% from 18.5% to 19% previously. The increase in the gross margin percentage is a reflection of both the relatively low gross margin associated with the Moapa and California Flats projects that have been pushed out and also other project cost savings achieved in Q3. GAAP operating expenses are expected to be in the range of $480 million to $500 million and include $105 million to $115 million of restructuring-related charges. Note that the expected TetraSun charges have been lowered to a range of $90 million to $95 million from the prior range of up to $100 million. Non-GAAP guidance for our operating expenses, which excludes restructuring charges, have been reduced to $375 million to $385 million. We brought down the high end of this range from $400 million reflecting our ongoing efforts to manage expenses. The non-GAAP operating income guidance has been narrowed to a range of $340 million to $370 million, reflecting the updated net sales and gross margin expectations. A non-GAAP effective tax rate has been revised to a range of 8% to 10% resulting from a favorable jurisdictional mix of income. Keep in mind that this excludes the impact of all restructuring actions and also excludes the impact of the $35 million tax benefit mentioned earlier. On a GAAP basis, we expect earnings per share in the range of $3.75 to $3.90 and on a non-GAAP basis $4.30 to $4.50. As touched upon earlier, we're maintaining the high end of our non-GAAP EPS guidance at $4.50 while tightening the low-end to $4.30. The increase in the low-end reflects the lower operating expenses and lower expected tax rate. The benefit of project cost reductions in Q3 also helped to offset the impact of the lower revenue from project push-outs. Included in the EPS range is the expected Q4 sale of a portion of our remaining interest in Stateline and First Solar's share of 8point3's earnings. The equity in earnings amount is approximately $110 million net of tax. Also keep in mind that, as mentioned last quarter, a net sales range in gross margin guidance include only a portion of the revenue and none of the deferred profit from the Kingbird sale. Similarly, the EPS guidance provided does not include the $0.16 of deferred Kingbird earnings. Due to the tax equity structure on this project, all earnings have been deferred for the next several years. Our operating cash flow guidance has been revised to a range of negative $100 million to breakeven from a prior range of $500 million to $650 million, and the decrease is due to the revised sale timing of Moapa and California Flats. We're lowering our capital expenditure guidance to a revised range of $225 million to $275 million from the prior range of $275 million to $325 million, as the timing of certain expenditures has now moved into 2017. Net cash guidance has been reduced to $1.4 billion to $1.5 billion as a result of the revised timing of project sales, partially offset by a reduction in CapEx. And finally, we are also slightly reducing our shipment guidance for the year based on timing of certain shipments pushing into early 2017. Turning to slide 15. I'll summarize our progress during the third quarter. Our financial results are as followed: revenue of $688 million, GAAP EPS of $1.49 to non-GAAP EPS of $1.22. We maintain the high end of our 2016 GAAP and non-GAAP EPS ranges at $3.90 and $4.50, respectively. Our module efficiency continues to improve steadily, and our best line efficiency exited Q3 running at 16.9%. Our bookings this quarter were lower than expected, at approximately 250 megawatts. However, we continue to see growth in a number of potential booking opportunities, including with C&I customers. With that, we'll conclude our prepared remarks and open the call for questions. Operator?

Thank you, sir. We'll take our first question from Colin Rusch with Oppenheimer. Colin Rusch - Oppenheimer & Co., Inc. (Broker): It seems like what you're intending to say is that as you go through this decision making process that you may just skip over the Gen 5 and go straight to Gen 6. With this call only a couple of weeks away, what can you tell us about the final decision that you're trying to make at this point, as we try to get a sense of where we're going to come out in a couple of weeks on this guidance? Mark R. Widmar - First Solar, Inc.: So, Colin, what we've done here and we engaged, probably, I guess, maybe four weeks to six weeks ago, I think it is. We put two tiger teams together, if you want to use that term, to do somewhat of a bake-off – right – to look at both Series 5 and Series 6 and what is the art of the possible and what can we do to further reduce the cost on Series 5 as well as trying to find a path to what can we do to try to accelerate the timing of Series 6. Our long-term plan has always been to have the two products coexist. But given the current market environment, we're reevaluating that and we're trying to make a decision that if we can get the cost profile of Series 5 down to a level, which we think it needs to be to give us acceptable margins on the sale of that product then we'll move forward with that transition. If we're not able to do that, we may look to move straight into a Series 6 platform with a view of trying to put one product forward as quickly as possible. We have been having ongoing discussions with our internal teams. We've had ongoing discussions with subcommittees within our board and we'll have our final review with the board next week and we'll make a decision from there. And whatever that decision is, we'll make sure that we communicate that to everyone on the earnings call on the 16.

And we'll take our next question from Tyler Frank with Robert W. Baird. Tyler Charles Frank - Robert W. Baird & Co., Inc. (Private Wealth Management): Hi, guys. Thanks for taking the question. A couple of large utilities including Southern Company and NextEra recently announced that they were going to limit their spending on solar projects. They were going to focus more on other renewables including wind going forward. Can you discuss how that might impact things and sort of what you're seeing for the utility-scale landscape right now including the competitive environment? Mark R. Widmar - First Solar, Inc.: Yeah, so I think NextEra and Southern have both announced that based on how they view the economics and risk reward of solar projects they're going to perhaps reduce spending in solar and look more at wind. I think that neither of them has said that they're going to be exiting solar market and we clearly have good relationships with both of those two counterparties. They'll still be looking for high quality assets. And I think we're both – we're well positioned to meet those opportunities. What we have seen clearly in the latter half of 2016 and going into 2017 is there is somewhat of a scarcity of tax capacity for large utility-scale assets. That being said, given the ITC extension timing, there's also a dearth of assets going into 2017. So we think the two have somewhat balanced out, although there may be a little challenging tax capacity issues at some point. The other thing I would say is that we feel that we bring extremely high quality projects to market. And given both the quality of the projects, the development and the relationships we have with counterparties in the market, we don't see a significant constraint today for us in finding buyers and tax capacity for our assets. It may be that further down the chain there are some people who are struggling but we're still not seeing that reflected in our markets today.

And we'll take our next question from Vishal Shah with Deutsche Bank. Vishal Shah - Deutsche Bank: Hi. Thanks for taking my question. I wanted to just better understand what kind of component margins would be acceptable assuming you're able to lower your cost for Series 5 or maybe even Series 6 when you guys start ramping? I don't assume that you're going to get back to the 25%, 26% levels that you've seen in the past. And then, can you maybe talk about, Q4 – is your revenue outlook for Q4 mostly all component shipments or are you also assuming some systems? Thank you. Mark R. Widmar - First Solar, Inc.: In terms of on the margin profile for our component module sales, in our view our entitlement still should be in that 20% range. There is no reason to believe that we shouldn't be able to achieve those types of margins. And what we need to make sure is that we can deliver that with a Series 5 product and that's what we're working on, trying to get the cost down to a point where we think we'll clear the market on the ASP and still be able to deliver margins that are in that range. Our expectation is that a Series 6 product will deliver even better margins than that. So I wouldn't want to change our view of the long-term expectations around gross margin for our module-only sales. With our Series 4 product today, given the smaller form factor, it will make it in today's pricing environment more challenging to achieve those types of margins and we would obviously most likely see margins much lower than the 20%. That's what precipitates the need to transition to either Series 5 or Series 6 to normalize the form factor delta that we have today in the marketplace and generally drives a slightly lower value for the product. As it relates to Q4 and our mix of revenue, there is still some systems revenue in the fourth quarter. But you will see a significantly high proportion of that being module-only sales.

We'll take our next question from Philip Shen with ROTH Capital Partners. Philip Lee-Wei Shen - ROTH Capital Partners LLC: Hey, guys. Thanks for the question. In the recent past, you've talked about a 3 gigawatt year for 2017, 2 gigawatts for external modules and 1 gigawatt for systems. I know you have your call coming up and so forth, but you have talked about this in the past. With California Flats and Moapa slated for 2017 now, that brings in more than 500 megawatts of systems to 2017. So how should we be thinking about volumes now for 2017? Is it more of a 3.5 gigawatt target? Alexander R. Bradley - First Solar, Inc.: Yeah, so I think we'll discuss capacity on the call in a couple of weeks. As it relates to both Moapa and Cal Flats, we'll be completing the sales of those assets in 2017 but a significant portion of the modules have shipped in 2016. When you look to the 2017 shipment numbers that we discussed previously of approximately 3 gigawatts – split gigawatt systems, 2 gigawatt modules. The total capacity we'll discuss again in a couple of weeks. If you look at the systems business today, we've booked approximately 550 megawatts of systems shipments into 2017 today. We have about another 100 megawatts of relatively late-stage opportunities that takes us to between 600 megawatts and 700 megawatts. Beyond that, we have seen some opportunities to pull out of that pipeline. So asked Mark mentioned in his comments earlier in Egypt, we've seen some opportunities go by the wayside there based on development issues. And likewise, we've passed on some opportunities in India and Africa based on pricing where we won't chase the pricing to the bottom and we won't go into deals that are uneconomic for us. So if you look at 2017 today, I think we're confident in a 600 megawatt to 700 megawatt number in terms of shipments, which is less than we hoped for, but we also continue to have a robust pipeline and continue to look for other opportunities.

We will take our next question from Paul Coster with JPMorgan. Paul Coster - JPMorgan Securities LLC: Yes, thanks for taking my question. I know that, well, just over 500 megawatts of Moapa and California Flats are shifting into 2017. And it looks like that seems to be the main reason for what – a 700 basis point increase in margin – gross margin in 2016, that's for the full year. I mean, I haven't done the math yet, but the implied gross margin on those projects must be very low, arguably in the single-digits. Am I correct and what does this mean for 2017 gross margin? Mark R. Widmar - First Solar, Inc.: Yeah, so what I would say is there are two things impacting that margin. One is we've had good execution on projects this year, so we've had some project cost savings that have pushed the numbers higher than expected. The other piece – the two assets we're referencing, both Moapa and Cal Flats, are legacy assets that had some unique challenges to them that made them lower gross margins than you would otherwise see on our typical systems business. The Moapa is an asset that we acquired in late-stage development and therefore paid a development premium to acquire. On Cal Flats, we have one discrete development issue which if resolved, would increase that margin significantly but that's not currently in the guidance numbers. So those two assets have some unique differences from what I would say is a typical development project. If you look out into 2017, we don't have I think significant, similar challenges on the assets that we have in 2017. And then going out beyond that, the majority of our California pipeline out to 2018 and 2019 is at higher margin levels that we think are more expected and accessible for a systems development business.

We'll take our next question from Julien Dumoulin-Smith, UBS. Julien Dumoulin-Smith - UBS Securities LLC: Hi, good afternoon. Can you go into a little bit more detail on Stateline recognition here just in terms of the project sale process with Kathy (37:30)? You said you assumed a certain percentage. Can you elaborate a little bit, A, what that percentage is; and B, what the nuances around where that will come out? And what that upside could be or at least give some parameters around what that upside could be? Mark R. Widmar - First Solar, Inc.: Julien, as you know, 8point3 has gone out and recently done an equity raise plus they've also expanded their credit agreement. They had an accordion feature underneath the credit agreement, which they expanded that; I think the capacity was around $250 million. They've also recently acquired Henrietta, and so they've used some of the capacity for that. So what we are trying to do with 8point3 is there is limited capacity in terms of their ability to acquire the entire interest. Clearly there is an interest from 8point3 to do that. We are trying to work through structuring around that to see if we can accomplish that. And to the extent that we can then we will be able to sell 100% of our remaining interest, which was 34% of Stateline. We have left out of the guidance approximately 25% of the value, which is depending upon our ability to go above and beyond or find ways to sell 100% even though there is not today presently sufficient capacity to acquire 100% interest in Stateline given the available cash and debt capacity that 8point3 has at this point in time. So we're just looking through options, so in our guidance we've excluded a portion of the sale and that's about 25% of the remaining interest.

We'll take our next question from Brian Lee with Goldman Sachs. Brian Lee - Goldman Sachs & Co.: Hey, guys. Thanks for taking the questions. Just had a couple. First on California Flats, what sort of timing should we expect in 2017? And then given the EPS range is basically unchanged here with a few of the benefits from other lines, I back into about $0.80 of EPS at the midpoint that Cal Flats and Moapa represented. Is that reasonable and would it change now that you're monetizing those assets later? And then just quickly on the updated guidance for 2016, the non-GAAP tax rate, could you reconcile what exactly is driving the $0.40 of EPS relative to your prior guidance? Thanks. Mark R. Widmar - First Solar, Inc.: So, I guess, Brian, on the tax rate, I think what you're seeing is the delta between the GAAP and the non-GAAP, first off is we highlighted that we had a favorable ruling on an item in an international jurisdiction, which was worth about $35 million or about $0.35. That is in our GAAP numbers but that's not reflected in our non-GAAP numbers. So that's kind of our primary delta between the two. The other side of it is relative to our prior outlook on the tax rate, we have a favorable mix of income. So what's happened now with the drop in revenue that drives a different result in terms of where is the income by jurisdictional mix, which each jurisdictional mix had a different tax rate associated with it. And as you know, we have a tax holiday in Malaysia, so more of the income that's represented in Malaysia as a percent of the total will drive down the overall tax rate. So that's kind of the events that are driving the change in the tax rate both on a GAAP and a non-GAAP basis from the prior guidance that we provided in Q2 earnings call. Brian, I'm not really sure how you're getting the $0.80 or so for Moapa and CA Flats. I think Paul had it right when – and he referenced it; when you look at the revenue delta, which was close to $1 billion, and if you look at the gross margin rate increasing, but when you look at the total gross margin dollars not changing significantly, you would look to it and say, well, that would imply that the gross margin on both of those assets is lower than normally expected for a systems business. I think Alex walked through that as well. So we can take that off-line if you like. We can spend more time with you, but you should not be getting anywhere close to, I think you referenced round $0.80 of value for the push out of those two projects. It will be significantly lower than that.

We'll take our next question from Sophie Karp with Guggenheim. Sophie Karp - Guggenheim Securities LLC: Good evening. And thank you for taking my questions. I was wondering if you could give us some sense with your expanding O&M portfolio, what are the economics of those contracts? What do they look like and how should we think about the contribution of that type of business going forward? Mark R. Widmar - First Solar, Inc.: So the O&M business, again it's a good business, it's a recurring annuity stream, relatively high fixed cost, therefore, variable volume flows through at a very high contribution rate. And the profile on the business if you look at it over time, the margins can range – the margins on average are above the average for the business. They also will be much higher, let's say, in the first five or six years of the contract. So if you look at the performance of the plan as well as the warrantees that you have with the inverter manufacturers and others, you will generally realize much higher margins within the first five to seven years. And then as you approach 10 years to 15 years you may see margins start to drop off a little bit, especially if you have to do overhaul – inverter overhaul maintenance and those types of things. But it's a good margin business. It's one that is really based off of scale and we are looking to – we have a strong presence here in the U.S. We are looking to grow it and capture the benefit of the infrastructure through our network operating center and other investments that we've made over the years to monitor plants and try to find other ways to optimize the performance of the plants. It's a good base business that has great opportunity to continue to grow. The revenue dollars won't be sizable in general relative to the total, but they can contribute meaningful gross margin and EPS.

We'll take our next question from Krish Sankar with Bank of America. Krish Sankar - Bank of America Merrill Lynch: Yes. Hi, thanks for taking my question. Mark, I had like a longer-term question. Three months ago you guys spoke about Series 5 being probably 1 gigawatt in 2017 and then as the module price continued to decline 15%, it forced you to rethink the strategy. I'm kind of curious if module price continues to decline another 25% to 30% over the next 12 months or 18 months, would Series 6 be highly profitable and what are the levels you have for lowering your overall cost at this point? Mark R. Widmar - First Solar, Inc.: So a couple things, around Series 5 in particular is that what we are focused on Series 5, and I want to make sure it's clear, is that if we can further cost reduce it, and we're looking at ways to do that, the product will be highly competitive. So I don't want it to be looked upon as that it's a direct correlation that the ASPs have declined and therefore the product is no longer competitive. It is an advantaged product relative to Series 4 because it solves our difference in form factor which drives – generally drives a higher balance of plant cost. So it's a very valuable product from that standpoint. The challenge though is getting, so that there is some incremental costs that we are adding to the module and in terms of back rails and other things along those lines. So it can drive to a higher cost point than Series 4, but the general benefits of the larger form factor is offsetting the impact of that higher cost. What we're trying to find a way is that can we further cost reduce some of the incremental components for Series 5 or just the bill of material or other ways of driving out cost on Series 5 that we can get it to a position that we feel more comfortable in competing in the marketplace and capturing the margin profile that we would like. The other thing I think that's important to understand is that if – when we first embarked around our vision for Series 6, it was a little over a year ago. And we have had tremendous learnings around Series 6 that have dealt with some of the potential constraints or challenges/risk that we had with Series 6, when we first sat down and created the business case. If we had known everything that we know as of now for Series 6, we may have made a decision to go straight to Series 6. Okay. So some of it is – look, the ASPs in the market have declined. That's putting some pressure on Series 5. We've got to further cost reduce it. If we can do that, then we'll continue with the transition. However, we also have an opportunity to meaningfully pull forward Series 6 in getting that product into market faster. Then, we just have to compare the trade-offs between the two and make a decision on which path we want to go. Series 6 at any price point that we're seeing in the market right now will exceed any of our expectations around margins of what we believe that business – that entitlement should be. So we're very confident with the Series 6 around its efficiency as well as the cost entitlement, and it generates all of the energy yield benefits around temperature coefficient, spectral response, diffuse shading, everything you could possibly. And obviously that we've talked about around the core to our technology, it still resides in Series 6. So we can just have much higher efficiency, much greater energy density at a much lower cost point.

And, ladies and gentlemen, we'll take our final question from Pavel Molchanov with Raymond James. Pavel S. Molchanov - Raymond James & Associates, Inc.: Thanks for taking the question, guys. Back in April, at the analyst day, you talked about the price advantage that you can get in hot climate areas such as India. With the module pricing meltdown since then industry-wide, have you been able to retain that advantage in the hot climates or has that kind of dissipated away? Mark R. Widmar - First Solar, Inc.: No. Look, the inherent energy value and the benefits are there, and we are able to capture that. India is a great market for our product and one that we can capture meaningful incremental value for the energy that we provide. So there's nothing has changed, the ASP environment doesn't change that. What has some impact, not necessarily around percent energy advantage, but the value of the energy can be impacted with PPA prices. So it's intuitive, the lower the PPA price therefore the lower the value of the energy. So there is some impact of that as PPA prices in some markets have gotten very aggressive. But the inherent energy value is still there. The percent deltas are still there. The only real dynamic that can change the equation around what does it translate into ASP is what is the underlying PPA and generally lower PPA means less value in the ASP.

And ladies and gentlemen, that does conclude today's conference. We appreciate your participation. Mark R. Widmar - First Solar, Inc.: Thank you.