Teal Vivacqua - Director of Marketing Communications Andy Marsh - CEO Paul Middleton - CFO

Eric Stine - Craig-Hallum Carter Driscoll - FBR Craig Irwin - Roth Capital Markets Jeff Osborne - Cowen and Company

Greetings, and welcome to the Plug Power First Quarter 2016 Financial Results Webcast and Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host Teal Vivacqua, Director of Marketing Communications for Plug Power. Thank you. You may begin.

Thank you. Good morning, and welcome to the Plug Power first quarter 2016 earnings conference call. This call will include forward-looking statements, including but not limited to statements regarding 2016 objectives including those related to revenue, sales, bookings, gross margins, GenKey and GenFuel installations and GenFund power purchase agreement programs. We intend these forward-looking statements to be covered by the Safe Harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Sections 21E of the Securities Exchange Act of 1934. We believe that it is important to communicate our future expectations to investors. However, investors are cautioned not to unduly rely on forward-looking statements, because they involve risks and uncertainties and actual results may differ materially from those discussed as a result of various factors, including but not limited to the risks and uncertainties discussed under Item 1A, risk factors, in our Annual Report on Form 10-K for the fiscal year ending December 31, 2015, as well as other reports we file from time to time with the SEC. These forward-looking statements speak only as of the day on which the statements are made and we do not undertake or intend to update any forward-looking statements after this call. At this point, I’d like to turn the call over to Plug Power’s CEO, Andy Marsh.

Thank you, Teal. Good morning, everyone. Thank you for joining the Plug Power first quarter 2016 earnings call. I am excited to share this quarter’s results with you as the health of the business is very good which had several significant initiatives underway to support the growth of the business including providing our customers with new financing options. All of these initiatives were meeting or exceeding their goals. I feel good that these initiatives are building a great foundation for the long term growth. In fact, I was in Dallas last month to make a presentation on the future of hydrogen. We have a vision for hydrogen fuel cells and believe the next big markets for hydrogen vehicles will be those that are similar to our current markets for fork trucks, ones that operate in a captive environment, with a fine space where solving the fueling part of the equation is simpler. Tethered vehicles, ones that travel locally but always come back home in night such as delivery vehicles fit into this profile. Plug Power is the first company to have developed a truly commercial market for hydrogen and fuel cells with our industry-leading application for trucks. We are confident in our abilities to continue to grow and expand this business while leveraging our past learnings and strength to penetrate new large markets where we can provide value to our customers allowing us to maintain our growth into the future. Now let’s turn and talk about the first quarter 2016. I want to first review the highlights of the quarter and then put these results in the context of our 2016 goals. Let me say that first throughout this call you're going to hear about adjusted results such as sales, gross margins and earnings per share. We consider these adjusted numbers useful metrics for both investors and management as our revenue recognition from product shipments is changing. We believe that provides a clearer picture of the sales and implementation progress of the company in a consistent comparison to past performance. Let me start with two figures that underpin the success we’ve had in this quarter, bookings and units shipped. Bookings hit a record of $72 million in the first - this quarter which you can see from the chart, puts us ahead of the pace we need to attain the $275 million in bookings we’ve estimated for the year. We've also had a record first quarter deploying 834 GenDrive units, tripling what we accomplished in the first quarter of 2015. This results in adjusted revenues of $30.1 million and GAAP revenues of $15.3 million. As a reminder, we’ve been working on a number of financial alternatives to eliminate the need for new restricted cash when PPA deals for Plug Power finances the assets directly. In some or likely all of the new financing scenarios, the cash profile of the transaction will be much better, but the accounting rules dictate we cannot recognize revenues upfront as we've done with traditional sales leaseback arrangement. The presentation of adjusted numbers is intended to show our performance as if we finance a transaction as we had in past. Again we believe it provides a clearer picture of the sales in implementation progress of the company and a consistent comparison to past performance. Paul will comment on this more shortly. Highlights for this quarter included three new sites implemented with multiple additional sites in progress. We've also began construction of a second GenKey site for Home Depot at their Savannah, Georgia distribution center. This is a strong show of confidence from new customers that they are not only realizing value from our solution, they are seeing the results quickly. The rapid second deployment at Home Depot aligns with one of our critical business goals for 2016 which is expanding the number of anchor accounts that have multiple sites where our solutions can be deployed. Working with these accounts for multiyear programs similar to Walmart will drive predictability and profitable revenue streams. These accounts are large retailers like Home Depot and Kroger as well as large manufacturers like BMW and P&G. We achieved an adjusted gross margin of 12.5% this quarter that was driven by greater than 35% gross margin on the GenDrive units. We've also seen margin improvements for other products as well. Margins for hydrogen infrastructure business is following a steady improvement curve that we've seen with GenDrive and service gross margins saw continued improvement as we leverage our infrastructure over an increased number of customers as we see continued uptime and reliability improvements in our products. The uptime improvements include the performance of the upgraded stacks and stack membranes that were rolled out in the fourth quarter of 2015 which continued to perform as expected with a goal of over 10,000 hours of life time. Those of you who joined us for the Plug Power January business call update, remember that this chart summarize management’s key goals and objectives for 2016. Our Q1 results put the company on track for most of these goals and ahead of the game for others. We are targeting growth and adjusted revenues of 50% compared to last year with a target of $150 million. Our $30 million in adjusted revenue for the quarter is 220% higher than the $9.4 million in sales during the same quarter in 2015. Contract bookings are running ahead of pace for meeting the $275 million goal which supports our goal of deploying 25 sites in 2016. We are maintaining our GAAP gross margin targets and believe the continuous strength of GenDrive margins along with improvements in other areas will help us to achieve this goal. The last goal is tight management of cash so that we use less than $23 million throughout the year. Paul will detail our cash flows in a few minutes, but my comment is that I foresee no new equity raises that will be needed. As we have discussed earlier and in previous calls, we've been spending significant time to expand our GenFund product offering not only to provide additional choices for our customers, but to provide better finance terms for Plug Power and deal that finance directly, including the elimination of the need for restricted new cash. This is a progression similar to what solar went through as it iterated its way to a systematic and repeatable approach to project financing. In fact the likely solutions for financing are PPA-style customer transactions will be similar to structures to what solar companies do today. To-date we’ve indentified 50% of our finance project needs for 2016 and we're in the process of lining up longer term structure for the rest of 2016 and beyond. While we won't get into the details on this call, all this is still work in progress. Paul will talk a bit more about this in a few minutes. We are confident in our path towards cash flow breakeven and will continue to explore options to add liquidity to the balance sheet to create both a buffer and allow for opportunistic strategic investments. Before I turn this call over to Paul let me give you an update on some of the long-term strategic activities we are focused on. We continue to make significant progress in our hydrogen fuel and infrastructure segments. New design iterations and ongoing progress with our suppliers continue to drive the capital cost at our existing hydrogen solutions lower. This will allow us - not only allow us to achieve our targeted margins on this product line, but will act as an enabler for new markets and for expanded material handling use cases such as smaller sites. We’ve also been aggressively pursuing opportunities in on-site performing technologies to create hydrogen point of use. This can provide another important step in reducing first costs, but also can put us in more aggressive path towards margin improvement of the molecule itself. We are actively working to close on customer sites in 2016 where we will deploy performers in conjunction with an industry partner, the exciting new development to our GenFuel product line. More news to come soon on this project. We've also kicked off expansion on our high-power platform based on plug stack and system designs to grow our markets in the vehicles that are larger than forklift trucks. We are actively working on the development and the first design for of the range extender program with FedEx. As you recall FedEx wants to deploy hybrid hydrogen battery powered deliveries trucks to expand the useful range of these vehicles from 60 to 160 miles. This is a perfect example of a captive fleet vehicle and will be a fuel cell and hydrogen platform that will have the flexibility in many markets in the future. We're also working on a second generation GenDrive for ground support equipment we have in Memphis with FedEx that will improve performance and reduce cost potentially making this the second commercial application in our portfolio. Our corporate strategy is to focus only on areas where we believe commercial market opportunity exists that leverage our strengths and experiences. We see quite a few of these opportunities within our core material handling markets, which I believe still has tremendous growth potential for many years. But we also see them in adjacent markets that share some of the same characteristics as our core markets and in new markets that we will create, as we have continued success in making hydrogen fuel ubiquitous. These are exactly the kind of projects that make me excited about the future. Thank you for your attention. Let me now turn the call over to Plug Power’s CFO, Paul Middleton.

Thank you, Andy and good morning, everyone. As Andy referenced and we have discussed many times, some of our customers act as our hydrogen and fuel cell solution through a power purchase agreement, also known as a PPA. In those cases to date, we have been using a sale leaseback approach to finance the deployments. Starting in Q1, we are utilizing a new approach that provides better liquidity and therefore we believe it’s critical to convey clarity on what we’ve delivered since this new approach does not follow the same accounting model related to revenue and profit recognition. The equipment at the three PPA sites we deployed in Q1, if we had financed these deployments with traditional sale-leaseback financing, the total revenue and total margin we would have realized would have been 14.8 million and 3.6 million respectively. The key takeaway is Plug expects similar or better economic returns over time on these projects, and when combined with the improved liquidity these alternative financing approaches yield, it is an overall better solution for Plug and its shareholders. Another key point is that Plug is achieving continued momentum and operational improvement on these programs, just as we are with direct customer programs. This adjusted view on the business is critical to increase transparency about what we are accomplishing commercially and to provide our stakeholders a basis for context, comparability and consistency. As is the case in other industries, such as software-as-a-service or certain new technology sectors such as smartphones and solar, we believe reporting adjusted results will allow us to convey a more clear and comprehensive view. More importantly however, it's how we manage and think about the business and I'm confident this will be a meaningful approach to our stakeholders this year, and to be honest, we continue to transition to more robust PPA financing solutions. Looking at our revenue for the quarter, as we conveyed in our January business update, given seasonality, we knew Q1 would be sequentially below Q4, 2015, but the commercial traction we achieved in the first quarter exceeded our initial forecast. The growth in the first quarter reflects more GenKey deployments and multiple other customers adding GenDrive units to expand their installed base. Equally important was the growth year-over-year in units and sites under GenCare contracts and sites where Plug has contracts to provide hydrogen fuel. We recorded approximately 72 million in orders in the first quarter 2016 and ended the quarter with approximately 278 million in contract backlog. Our contract backlog is a combination of system deployments planned for the near term as well as the service in hydrogen delivery commitments during the next few years. The continued growth in sales, bookings and overall contract backlog is indicative of our success in the market and provides a strong base, as we focus on delivering on the 2016 goals and beyond. Adjusted gross margin, as a percentage of sales, reflects year-over-year operating improvement and it is indicative of our ongoing progress, both in terms of volume and cost down initiatives. Equally important, it reflects improvements across all product lines, demonstrating the focus we have on driving all offerings to at least 30% margin profiles over the longer-term. If we take a look at GenDrive in Q1, Plug achieved 36% gross margin. We continue to make a significant progress in driving GenDrive cost downs, stemming from supply chain leverage on increased volumes, improved and simplified product designs and in certain cases, our vertical integration strategies such as the launch of the new Plug stack in Q4 2015. We anticipate these improvements continuing into 2016 and that we will continue to grow overall GenDrive margins. Given GenDrive’s high percentage of our sales, this product offering will continue making tremendous contribution towards us achieving our gross margin goals for 2016 and beyond. Research and development investment for the first quarter increased over the prior year first quarter 2015, stemming from incremental investments associated with productizing our hydrogen infrastructure platform, our ongoing stack development and deployment and improving the various offerings designs. SG&A expense for the first quarter of 2016 was up slightly over the first quarter of 2015, stemming from our incremental investments required to support and drive our continued growth. In regards to total administrative expenses, as we have conveyed, during 2015, we achieved critical mass and we anticipate tremendous leverage, as we continue growing. Specifically for 2016, we expect total administrative costs to be at similar levels for the balance of the year. In regards to adjusted EBITDAs and operating cash flow, in Q1, 2016, we achieved strong performance, given the ramp in sales, improvements in margin and focus on working capital. For the first quarter of 2016, Plug achieved an operating cash flow usage rate that was almost 50% less than the prior year first quarter. This was driven from the adjusted revenue growth of over 220% as well as the significant progress in driving cost down. This first quarter is a strong indication that we are on track for our goal of using less than 20 million for the year in operating cash flows as we continue to grow the sales and ramp cost down further. As we move forward through 2016, Plug represents an enterprise growing over 50% per year, a company that has developed a platform that includes some of the top financial institutions in the world to finance Plug Power’s customer’s deployments and a company with a strong financial asset base, including a substantial pool of on and off balance sheet escrow funds that will be distributed to Plug over the next few years. In addition, Plug Power continues to work with market leading financial institutions that are collaborating on innovative ways to fund Plug’s deals that will yield even greater economics and more robust capital solutions for Plug in 2016 and beyond. Let me reiterate our key goals around liquidity and funding our growth. Our key goals remain to continue driving more efficient and seamless direct customer financing platforms, develop more robust project financing solutions for our PPA style transactions, maintain sufficient working capital to support the growing backlog of deployments and avoid dilution of existing equity owners. Major step in this direction is aligning with the right capital partners that can help provide access to a broader set of investors for our PPA style transactions. So, in turn, they can provide more robust capital solutions. The project funding facility we recently completed in Q1 is intended to help Plug Power fund the deployment of its 2016 PPA pipeline and more importantly is the first platform in what we see emerging in a range of new project funding approaches. Looking specifically at 2016, we have set a clear goal to use less than 20 million in operating cash flows, as we move towards cash flow positive operating run rates. This represents over a 50% reduction from the prior year, demonstrating Plug’s success in volume and cost downs. In addition, to deploy our planned PPA sites, it will require approximately 45 million to 50 million to finance these new deployments in 2016 and our goal here is to do so without having to restrict cash or raise equities to deploy this pipeline. The project funding facility we completed has provided over half of this PPA financing requirement this year and we are actively working on the next phases of this partnership as well as other partnerships that collectively will provide the balance of the financing capital for 2016. We will be able to share more during the year, as these platforms develop. But I would have you think about some of the varied approaches used in funding solar and wind to give you some perspective on the range of approaches we are considering. In addition to short-term liquidity advantages, most of these approaches will position Plug to leverage these deployed assets even further in the future, given the nature of the structures. In addition, these are not only more attractive financing opportunities on these near-term deployments, but the platform could open up new possibilities and help Plug deploy and utilize its assets in the future and may even enable Plug to accelerate market penetration. As we close the first quarter and move further into 2016, and as Andy pointed out earlier, we believe our first quarter success provides a great start and platform for all our 2016 goals and we look forward to sharing with you our continued progress as we move through the year. We also believe that we are continuing to make the right market and product investments and developing appropriate financing solutions to not only achieve our 2016 goals, but also achieve our long-term business objectives. We will now open the lines up for any questions.

Thank you. [Operator Instructions] Our first question comes from Eric Stine with Craig-Hallum. Please state your question.

Hi, Andy and Paul. Good morning. Just wanted to start with the bookings number, I mean obviously the transition to the PPA -- more to the PPA model is to help on the cash side, but also accelerate adoption, just curious of those orders that you secured in the first quarter, how those breakdown between an outright product sale and those using the financing options?

50-50, Eric.

Okay. So I mean, it was a driver in that. Maybe, just to look beyond bookings, but at the backlog, I mean, is there a way to kind of think about how it breaks down there and I guess what I'm getting at, you’ve obviously reiterated your goal for adjusted revenues, but also thinking about how we should think about the GAAP revenue number in 2016?

Well, I'm just trying to understand your question, Eric. I think what we've talked about is if you look at the adjusted revenue approach coming into the year and we talked about in January, we had over 70% of that in backlog. And in the first quarter, closing orders that we have, we continue to close the gap on the balance, and so we've got pretty good visibility to this year and in fact I would call it very high visibility to kind of pushing our goals and plan this year and certainly the backlog is a key element of that. And for the sake of clarity, as you can probably gather, the backlog is on the same basis right now. So the portion that’s in backlog associated with PPA sites, we’ve kept on that same basis for the time being, so it's all consistent on the same platform.

I think to add to [ph] Paul, we expect about one-third or one-fourth of our revenue this year to be recognized on a PPA type format.

Okay. And just to clarify, I mean your reiteration of that 50% year-over-year view, that is on an adjusted basis, if it were apples-to-apples versus the past, right? I mean that's not -- reiterating that number and on top of that, you will have the PPA business which limited first quarter from a GAAP perspective?

It’s year-over-year 50% on a similar basis, yes.

Okay, got it. And just to confirm in the slide you put up and it's gone now, but from a gross margin perspective though, your reiteration of 12%, that is on a GAAP basis, is that correct?

Yes, that’s correct.

Okay that’s helpful.

That's really good news, Eric to think about how the numbers filter out. So on lower revenue, the margins will be in a similar – will be similar that’s really positive. I think in the past quarter when you think about on a fourth-quarter 2015, we had $142 million of non-GAAP revenue, 10% gross margin. This quarter $130 million of non-GAAP revenue, we had over 12% gross margin. So there has been a significant improvement in the gross margins just on quarter-on-quarter here.

Maybe just last one from me, just where you stand in terms of transitioning to your stacks, just wondering Class III I believe you're fully transitioned there but just when you might be fully transitioned to Class I and Class II?

So, we've shipped over 1000, almost 1000 units with our own stack. So we view that as a significant milestone. We do and I think we've always presented that we will keep a certain percentage of our business with the second source just to provide long-term you know as the business grow; don’t want to be single source on any component. So that project that process is ongoing and as we said before we expect the majority of the units being shipped and I think that's happening today to be quite frank with Plug stacks.

Our next question comes from Carter Driscoll with FBR. Please state your question.

Nice improvement on the services gross margin, is that largely a function of increased deployments and really scale and being able to leverage the existing infrastructure or is there a different component beyond that?

That's really the heart of it. Its part of the roadmap we've had as you know we believe infrastructure improvements will happen quicker but there is a drive that by the end of this year or early next year that the service business will turn positive.

Next question, I have missed it, can you talk about the number of hydrogen sites installed in the first quarter?

We did three sites but we have many more in progress.

The timing issue, I mean do you expect kind of a gap up in Q2 maybe just help me understand like how close those are to completion may be just kind of thinking from our modeling perspective over the balance of the year, any clarity would be helpful?

I think growth rates, the best way I think to think about it is if you take last year's numbers and look at the improvements over the last year numbers, I that’s how I would say that you’ll see kind of the same progression of revenue and margins throughout the year.

Maybe a question for Paul, Paul can you maybe talk may a little more detail about some of those financing options that you are betting, maybe rank one or two of them ahead of and then maybe talk about the characteristics of why they are better for you just kind of help the investors better understand those potential options since you still have about 50% left to close on for this year?

Well, probably well two things, one is, the most of the different things we are working on which are many, partner that we've aligned with is a specialty finance company that has done a number of alternative energy financings in different spaces with different industries and different companies. And that's the number one partner that we’re working with on these structures and we've been working pretty actively to take, to move to the next phase where we will be launching the structures shortly. The facility that we’ve put in place was really a funding advance of the projects that we will be working with them and partners like them as we move forward. So more to come on that as the quarter unfolds and as we move into that second phase of that effort. Specifically on these programs, in the past year, as you know, and the sale leaseback transactions we’ve done with more of the traditional commercial banks, they’ve kind of structured it where the cash gets released over the duration of the agreement. And these new structures by working with a broader pool of investors and different project financing structures what it provides for us is a larger portion of that project proceeds to be the accessible early on in the project, it’s not day one in all cases. So, again there will be difference structures that we will work through and our primary goal is the best answer -- collective answer both in terms of economics and liquidity for Plug and its shareholders. So I think the chart that we’ve had before really kind of just got to the heart of timing of those cash flows. But the other real important takeaway is that these structures unlike when we do a sale leaseback to the bank and the bank owns the assets at the end, these are long-lived assets that we know have a lot of leverage opportunity in the outer years and in most cases if not all cases, Plug retains the assets or recover the assets in these structures at the end of those agreements. So there is tremendous leverage opportunities in those outer periods both strategically as well as economically as we look forward. So there is a multitude of reasons why this is a good path for us and more to come as this unfolds in the coming months.

Just a follow-up on that, so it sounds like it could be as soon as potentially this calendar quarter, you could have an update on the more specifics with the specialty finance partner one, and then it sounds as though it’s almost as though it makes kind of this quarter and last year's first quarter not necessarily an apples-to-apples because of that transition in the sales leaseback is that fair and that should accelerate potentially over the balance of the year almost making it even harder to, even on an adjusted basis it sounds like that it’s not necessarily the right not a perfect comparison at least in the terms of the way your business continues to evolve in the financing perspective, is that a fair characterization?

I think, well our intent really to be clear is that the adjusted basis is really intended to be apples on apples and more transparent and more clear in terms of what we are delivering and how we think about the business but - on that basis it should be more comparable and you're definitely going to see the progression in sales and margin profile. And I think as we start rolling out these other approaches we’ll be able to share more about very specifics of the variation in accounting and timing of recognition on the results.

Our next question comes from Craig Irwin with Roth Capital Markets. Please state your question.

So in the discussion of PPAs you made some parallel to the solar industry, now when we look back at the evolution PPAs’ first solar, it was the first company to write a major PPA back in 2008 and they sold that project to NRG relatively quickly was well under a year before they sold it. Can you maybe help us understand if this $45 million to $50 million incremental needs in cash for what you're looking at this year is likely to be it, will that be sufficient for the book of projects that you expect to roll and I guess what I'm asking backwards is, do you expect to be able to sell these projects and monetize on the way companies in the solar industry have. Thank you.

The answer is yes, I think those approaches that they've used is good proxies to think about how we might approach it, we’ll continue to evaluate ten different paths that we have which is a good position to be in, in terms of options and take the best choices for the company. But in regards to that capital the answer is yes and to the extent this actually enables us to accelerate penetration with the capital requirement goes up that’s through a high-class problem. So, but as we’ve said today to achieve that $150 million plan that we have that's the extent of this capital for that bogey.

I think, it’s Paul, another like solar we’ll be selling these assets more and maybe a partnership with the type model. And I think as you mentioned during your commentary there is on the assets at the end of the term and we view those assets as quite valuable especially the hydrogen infrastructure and actually makes our sale which is sticky today even stickier.

Definitely good to hear, so on the sort of shape of the PPA revenue I would say, pro forma revenue contribution throughout the year, should we expect this to be somewhat lumpy or do you have a specific book of projects that is building in consistent with your revenue growth rate as revenue progresses throughout the year?

The answer is, we expect to be rather linear so, the answer is yes that I would take the number range we talked about where to 25% to 33% of the deals will be PPA like based on the booking and based on funding mechanisms but I think Craig that will help you in your modeling. And what we talk later maybe we can help provide additional guidance there.

And then, the last question if I may before I hop back in the queue, 36% GenDrive margins, pretty impressive I have to say, congratulations on that, sort of sounds from your commentary and your prepared remarks like there might be a little bit more to go there particularly given that you know there are some headwinds versus if you were completely internally supplied, cost about external suppliers, the cost of switching over additional products internally. Can you maybe say sort of how much further you have to go in that, is this really potentially a 45% margin product if we were to look at all Plug stacks exiting this fiscal year?

That’s a good question, Craig, and let me put it this way. You would have asked me a year ago, I would have told you we would not be a 35% gross margins with GenDrive and we continue to make improvements. I don’t want to put a cap on it, but the current numbers you’re putting out are the current numbers that we talk about internally.

Okay, excellent. And then if I can squeeze one last one in, so Andy you know our conversations are going a couple of years, right, and I have been a big believer that switching over to an internally manufactured stack would allow to have very significant cost savings that would potentially allow to do something on price that might help the rate of adoption for customers. So if you were to see margins on that product maybe exceed the internal conversations that you just referenced, would you maybe consider a different pricing regime that might help accelerate the adoption of our your product?

That’s actually another good question and I think Craig, we prefer to think – I think one of the reasons we have been spending so much time on the financing aspect of the business is to continue to capture the most potential margins we can for Plug, but simultaneously offer customers a better short-term model that they can capture. So I think we are trying to accomplish that goal more today through financing and through reducing Plug’s margins on our products. So I think that’s why this financing activity has become prominent when we think about how to grow sales with our customers, how to improve our cash position, as well as using as a leverage point, so that we don’t have to give up margins.

Great. Thanks again for taking my questions.

Okay, Craig.

[Operator Instructions] Our next question comes from Jeff Osborne with Cowen and Company. Please state your question.

Hey, good morning, guys. A couple of questions on my end. I was wondering the bookings, the 275 just given the tax credit expiration at the end of the year, I assume that’s going to be pretty front-end loaded, is that a fair assumption?

I don’t think so Jeff, and I guess, this is another good question. I don’t think – the company has been working with all the industrial gas companies, the folks at the American Gas Association, with all the fuel cell companies, and I am sure if you talk to my peers, they will all tell you that based on discussions with leadership, both Republicans and Democrats, and I have talked to very, very conservative members of the Senate and very, very liberal members of the Senate, that all of us think this credit is going to happen and I’ve had Senators offer to call customers for me to explain how they believe this will evolve. So we don’t believe it’s going to be front-end loaded. We continue to believe the tax credit will be put in place. It’s really quite honestly finding the appropriate vehicle for to move in the Senate, and that’s where it needs to move.

Got it. That’s understandable. So if I understand it, Paul alluded to good coverage this year in terms of backlog, so to hit the adjusted revenue guidance coupled with the orders that you received in calendar Q1, do you feel pretty comfortable? And then the bulk of the 275 is projects that are on the drawing board that you’re aware of for 2017 and beyond, is that fair or do you need to add meaningful additional orders to hit the revenue guidance for this year on an adjusted basis?

I think your first comment is correct, Jeff.

Got it. And then it certainly is unique to see government leadership, admit they made a mistake, but that being said, what is the Plan B based on your conversations if on July 15, when the current FAA bill expires as they are not in a position to add attachments to the – hopefully permanent bill at that time. Is there another bill that you have in mind or they have in mind to potentially attach fuel cell along with geothermal and other items to or is that still kind of TBD and maybe we need an election and you would have to wait for tax exempt or so at the end of the year?

So the answer to your first question, Jeff is that, yes, there are other bills under consideration. I probably don’t want to publicly be talking about since people shared it in confidence with me. I also would say that, I don’t think it’s out of the realm of possibilities that this is a post selection event.

Got it. That was my sense as well. And then, Paul, what is the accounting treatment, is there a kind of rule of thumb with the financing that you have done at least for the half of your financing needs? How do we think about the reconciliation from non-GAAP or adjusted as you refer to it to GAAP? Is that ratable over a period of time? Does it at the end of the term all turn into GAAP? Can you just help us understand how we should reconcile the two revenue lines over time?

So on the topline, since it’s not a sale leaseback, it’s the revenue numbers that are going to be different. What we focus on is the economic profit really and that’s similar or better returns overtime. So you’re going to see those earnings show up and the result of Plug overtime from a book standpoint. And depending on the particular structure, and the timing, that will vary as well. But what we are focused on is the economic profit as well as the liquidity element of it, that’s really the key criteria we are using as we think about these options and how we focus on it. But I think, it will become a little more fair as time goes forward and we continue to show the GAAP results and the adjusted results we are going to be able to walk you through more and more overtime to kind of be able to make that a little bit more fair.

Jeff, I know we are one-on-one calls today. If you had time, we would be more than happy to walk through in greater detail with you.

Absolutely.

Got it. I appreciate. Last question for you Andy, just what’s your thoughts on M&A out there given the cash balance as well as hydrogen strategy that you referenced for quite some time, obviously done well on the GenFuel on the partnership side than turnkey, plus just in terms of pure hydrogen generation to kind of go after the distribution sites for materials handling?

Good question, Jeff and we are always – on the reformer side, we had been working closely with a partner and I take on the M&A side, quite honestly we are going to make sure that we are – our cash position is secured here at Plug and that’s top and foremost scenarios that how to secure that we have to dilute our shareholders again. And as we focus on that, that’s top priority, building some partnerships around that and quite honestly, if we find a way to make sure that we have a strong cash position, we would get more aggressive on hydrogen and some other activities, sooner rather than later. But first and foremost, we are going to take care – we are going to make sure that there is plenty of cash in-house.

Got it. Last question, for 2017, should the tax credit not be extended, I assume for a large majority of your materials handling customers, the economics will be unfavorable. But you mentioned commercializing other products in the tough market, range extenders, you have got telecom as well, which of those will be I would say, ready for primetime in 2017 that will be applications for your product that don’t need tax credits to justify some of the economics.

I guess, Jeff, probably this past quarter, 14 or 15 in my bookings were actually without the tax credit, so I think that’s a positive sign. I think that one of the reasons we have been spending so much time of financing options, we believe these financing options will actually lower the cost to our customers, especially as Plug owns the assets in the end. And I think a combination of those events and we talked about the GenDrive gross margins, I think the combination of those events that we have internal models, which show the business remaining healthy whether the tax credit is in place or not. What I will say though is, tax credit would help us grow this business quicker as well as the tax credit will keep more people employed in the United States, which I think is important to Congress. And I think Congress looks at this issue as not only a market fairness issue with solar and wind, because there has been a market distortion created, especially when you think about stationary power products. There is an issue in national security, fuel cells are American made. There is an issue associated with the fuel reuse. If you look at hydrogen, you look at some of the work people like fuel cells engage with, we use American natural gas and I think all these issues resonate with Congress, that’s why we think the tax credit based on our discussions with members and based on who the long list of supporters we have in this effort, we are just a minor player in all this that these tax credits we expect will be extended. We do have Plan B and we have plan B for a very healthy Plug Power.

That’s great to hear. Just a good clarification. Is the 14, 15, I assume you’re referencing international orders that don’t have the tax credits or is it for some other domestic applications?

International.

Got it. Thanks a lot guys.

Thank you. Ladies and gentlemen, there are no further questions at this time. I will turn the conference back over to Mr. Andrew Marsh for closing remarks. Thank you.

Thank you for your continued interest in Plug Power. We are excited about the tremendous progress we have made and we will continue to make in the future. We have a strong business that’s growing 50% per year, clear path to cash flow breakeven and significant profitability, exciting project financing options, which will allow us to continue to scale the business without the need for additional equity and we have a very smart and dedicated team that’s developing the next-generation of commercial hydrogen fuel cell technologies and applications. We’ve created the material handling market and we will continue to lead this market in industry as it evolves and expand, driving value for customers and shareholders in the future. Thank you everyone.

Thank you. This concludes today’s conference call. All parties may disconnect. Have a good day.