David Brady - VP Treasury and IR Jim Hughes - Chief Executive Officer Mark Widmar - Chief Financial Officer.

Shahr Pourreza - Citibank Brian Lee - Goldman Sachs Brandon Heiken - Credit Suisse Vishal Shah - Deutsche Bank Paul Coster - JP Morgan Andrew Hughes - Bank of America Merrill Lynch Rob Stone - Cowen & Company Tyler Frank -Robert Baird.

Good afternoon, everyone, and welcome to First Solar's First Quarter 2014 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 listen-only mode. As a reminder, today's call is being recorded. I would now like to turn the call over to Mr.

David Brady, Vice President of Treasury and Investor Relations for First Solar Incorporated. Mr. Brady, you may begin..

Thank you. Good afternoon, everyone, and thank you for joining us. Today, the company issued a press release announcing its financial results for the first quarter. A copy of the press release and the presentation are available on the Investors section of First Solar's website at firstsolar.com.

With me today are Jim Hughes, Chief Executive Officer and Mark Widmar, Chief Financial Officer. Jim will provide a brief overview of our Q1 results and a review of our project bookings and opportunities year-to-date. Then Mark will discuss our first quarter results in detail and provide an update through 2014 guidance.

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.

Please note that during the course of this call, the company will make projections and other comments that are forward-looking statements within the meaning of the Federal Securities Laws.

The forward-looking statements in this call are based on current information and expectations are subject to uncertainties and changes in circumstances and do not constitute guarantees of future performance.

Those statements involve a number of factors that could cause actual results to differ materially from those statements, including the risks as described in the company's most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.

First Solar assumes no obligation to update any forward-looking information contained in this call or with respect to the announcements described herein. It is now my pleasure to introduce Jim Hughes, Chief Executive Officer.

Jim?.

Thanks, David. Good afternoon and thank you for joining us for our first quarter 2014 earnings call. First off I would like to thank everyone who attended our Analyst Day in March be it in person or via webcast we appreciated the opportunity to share with you our outlook for the company and the industry at large.

And particularly the tremendous response that received. Now turning to our performance in Q1, I will begin by taking a moment to recognize some of this quarter’s achievements. We had earnings per share of $1.10 on a GAAP basis on revenue of $950 million both significantly above prior guidance and consensus expectations.

Although it is early days our business development team booked 404 megawatt DC of new business year-to-date compared to shipments of 312 megawatts in the quarter resulting in a book-to-bill ratio of greater than 1.

Our opportunity set increased from 10.6 gigawatts to 12.2 gigawatts providing us with the project volumes necessary to replenish our pipeline backlog.

And finally our best line modules on an average efficiency of 14.2% up from 13.9% in Q4 and 13% in Q1 2013, this lowers our costs increases our potential margins opens up new business segments and increases our total addressable market.

These results are an impressive validation of our technology and business development efforts and our ability to continue to execute against the targets that we’ve set for ourselves. Slides 5 and 6 show the total outstanding bookings in gigawatts and revenue and the change in those bookings that occurred in the first quarter.

This data represents our total business which includes third party module sales.

Total outstanding bookings rose from 2.7 gigawatts DC to 2.8 gigawatts The 404 megawatt DC in new bookings includes the previously announced Shams Ma'an project for 53 megawatt AC in the Kingdom of Jordan for which we will provide EPC and operations in maintenance and services.

We also have won a 850 megawatt AC EPC agreement to design and build the projects in California. Construction is forecasted to begin later this year with full commercial operation anticipated in mid-2016.

We will also be providing operations in maintenance services for the power plant once it is commissioned further details will be disclosed at a later today. In addition we signed EPC agreement for 43 megawatts AC with the EDF Renewable Energy to build projects on three sides in California.

Construction is expected to begin on the projects this quarter with completion of all three by Q1 2015. We also anticipate announcing in the near future our first diesel PB hybrid agreement for 5 megawatts AC with a major international mining company in Australia.

Working with our local partner in general we will build the solar power plan to complement the existing diesel generation at the mining side. This will provide economic and environmental benefits due to the reduction of the amount of diesel fuel used at times of peak demand.

As we stated at our recent analyst day we see that hybrid market as an emerging business opportunity and this marks just the beginning of our expansion plans into this high growth potential sector. The remainder of the bookings consist the module sales. These bookings include locations such as Chile, Germany, India, Israel and Puerto Rico.

The geographical dispersion of these bookings illustrates the breadth of demand for our product and it’s testament to our success in penetrating new markets globally. This also shows that our module is becoming an increasingly competitive in our target markets and based on our technology roadmap will always become more sell in the future.

Turning to outstanding bookings and revenue terms given the greater number of module of the deals in Q1 our bookings fell to $7.1 billion. As we stated at our Analyst Day, we are less focused on revenue as a metric and more focused on margin for per watt production. Module prices are stabilizing and our costs continue to fall.

Switching to our opportunity set on slide 7, in addition to 3.8 gigawatts of backlog, we now have 12.2 gigawatts of near-term opportunities, up from 10.6 gigawatts at the end of the year. We have over 600 megawatts of new opportunities in the U.S. where the significant portion of that coming from the South East.

We continue to see strong utilities scale growth across the country driven by more widespread adoption of Solar technology, increasing demand ahead of the exploration of the current ITC structure in 2016 and improvements in our relative competitiveness both from an energy density and cost perspective and back to our incredible warranty and guarantee provisions.

We are also seeing increasing and sustainable demand outside of U.S. particularly in Latin America and Africa. The size of our mid-to-late-stage deals has also increased by 250 megawatts to 1.25 gigawatts with a moderate high power ability to suggest.

While that shows the breakdown demand by geography, our opportunity set outside the North America is now 6.9 gigawatts and represents 57% of the total. This illustrate the increasing competitiveness of our products and services globally and the progress that we are making and penetrating our target markets.

This continues to give us confidence and our ability to replace our pipeline going out to 2016 and beyond. Now I will turn it over to Mark, who will provide details on our Q1 financial results and our updated guidance for 2014..

Thanks Jim and good afternoon. Turning to slide 10, I would like to begin by highlighting the first quarter operational performance.

Production in the quarter was 441 megawatts DC, down 1% on a sequential basis, but 19% higher year-over-year, due to improved [capacity] utilization, higher module efficiency and throughput improvements on the same number of production lines.

In the first quarter, we ran our factories at approximately 82% capacity utilization, down one percentage point from the prior quarter. Factory utilization was down sequentially due to planned line down time to implement our latest high efficiency, bad content material change.

We are now operating all lines under the upgraded that content material change. The average conversion efficiency of our module was 13.5% in the first quarter, which was up 10 basis points quarter-over-quarter and 50 basis points higher year-over-year.

Excluding our limited number of Series 3 modules produced for standard warranty replacement, the average fleet efficiency would have been 13.6%. Additionally, with the completed rollout of our (inaudible) program over the last few days nearly all 24 of our lines have been running at 14% efficiency or better.

Our best line produced modules in Q1 with an average efficiency of 14.2%, a 30 basis points improvement compared to the prior quarter and a 120 basis points higher than the prior year. We’re encouraged by our recent progress and remain on track to meet the efficiency improvements outlined at our Analyst Day.

Regarding our technology roadmap, while we have completed the rollout of our [back] content program, there are two remaining efficiency improvement programs scheduled for the third and fourth quarters of this year.

This should be kept in mind that as a result of the timing of these programs implementation efficiency improvement on our lead line will be lumpy and non-linear throughout the year.

Efficiency improvements are hopefully average to be more linear and we’ll continue to improve during Q2, while these line of improvements will be more modest until the second half of this year. Also what we no longer disclose are costs per watt for commercial reasons, our core costs declined quarter-on-quarter.

Now moving to the P&L portion of the presentation on slide 11. First quarter net sales were $950 million compared to $760 million last quarter. The increase in net sales was primarily related to meeting all revenue recognition criteria on our Campo Verde project.

This was partially offset by lower revenue recognition on our Desert Sunlight project related to fewer blocks scheduled to be turned over in the first quarter, as compared to prior period.

Note that related to our Campo Verde project, we recognized a 100% of the project revenue in the first quarter while substantially all of the cash received in prior periods.

As a percentage of total net sales, our systems revenue which includes both our EPC revenue and solar modules used in the business project was 96%, an increase of 1 percentage point from the prior quarter.

Gross margin for the first quarter was 24.9%, an increase of 30 basis points from the prior quarter, due to lower balance of systems and module manufacturing costs. Our manufacturing and EPC teams continued to demonstrate operational excellence as we build out our project portfolio.

Note relative to the expectations for the quarter, gross margin was barely impacted by higher sales volume, EPC and O&M bonuses related to the operating performance of our plants, EPC cost reduction and a potential litigation ruling related Campo Verde. First quarter operating expenses decreased 32 million quarter-over-quarter to 97 million.

This decrease is primarily attributed to a lower pretax asset impairment charge of 0.5 million related to the fourth quarter write-down of our company idled facility in Vietnam. In addition operating expenses decreased due to the lower personnel costs and relocation expenses associated with the sale of our Mesa zone facility in Q4 of 2013.

The quarter-over-quarter decline is reflective of our ongoing efforts to lower general and administrative expenses while continuing to fund R&D and sales and marketing. On a reported basis, first quarter operating income was 139 million, compared to 60 million in Q4.

The increase was due to recognizing revenue on our Campo Verde project, improved O&M margins reduction in balance of systems costs and lower operating expenses. First quarter net income was $112 million or $1.10 per fully diluted share compared to $0.64 per fully diluted share in the fourth quarter.

The effective tax rate in Q1 was 21% compared to a full year 2013 tax rate of 7%. The increased tax rate is due to the difference in expected jurisdiction mix of income resulting in increased profits and higher tax jurisdiction. Additionally restructuring and asset impairment charges in the prior year continued to have lower tax rate.

Turning to slide 12, I'll review the balance sheet and cash flow summary. Cash and marketable securities decreased by approximately $385 million to $1.4 billion.

The decrease as communicated during last quarter’s call was due to the ongoing construction of projects on balance sheet which will improve project economics and so at or near commercial operation. It was also due to the investment in global project development and the timing of some payments from Q4.

Our net cash position decreased by $361 million to approximately $1.2 billion. Our net working capital excluding cash and marketable securities increased by approximately 218 million from the prior quarter. The change resulted from recognizing a 100% of deferred revenue and project cost related to Campo Verde in the quarter.

In addition accounts receivable trade balances increased $98 million due to the billings and receipt timing in our systems business partially offsetting these items were the $53 million decrease in module and dealer inventory related to the build out of projects which have not yet been sold.

Quarter-over-quarter total debt decreased by $24 million to $199 million. Cash flow used in operations was $318 million in Q1 compared to positive opt-in cash flow of $192 million in the fourth quarter. Free cash flow was a negative $356 million compared to a positive $137 million in the prior quarter.

[Notes in] both operating and free cash flow results were consistent with our Q1 guidance. Capital expenditures totaled $51 million for the quarter related to the investments in our technology roadmap of (inaudible) equipment. Depreciation for the quarter was $61 million compared to $62 million in the prior quarter.

Turning to slide 13 we are providing an update to our 2014 annual guidance as follows, net sale of $3.7 billion to $4 billion is unchanged from the prior guidance. Next we are raising the low end of our gross margin guidance from 16% to 17% while keeping the high end at 18%.

The increase is reflective of improved margin realization on the Campo Verde sale and other operational and project margin improvements from our strong Q1 performance. As a result of the increase in our gross margin guidance we are also raising our operating income range to $290 million to $340 million.

Our earnings per share range $2.40 to $2.80 per share an increase of $0.20 compared to our prior guidance. While we exceeded our first quarter earnings guidance by approximately $0.55 this does not correspond to one to one increase in our guidance for 2014.

As should be anticipated a portion of our better than expected Q1 results as related to the timing of earnings already considered in the guidance provided at the Analyst Day.

However, it is also improvement to note that the better than anticipated Q1 results continues to [put up] the opportunity be patient that evaluating options to maximize the value of our contracted project pipeline. Our range of operating expense and factory remains unchanged. Turning to operating cash flow guidance.

We’re increasing the midpoint of the range by $50 million to a revised target of $300 million to $500 million. The increase is due to higher net income guidance for the year and result of operating cash flow for the first quarter. Capital expenditures are unchanged from our prior guidance.

Finally, while we do not provide the straight quarterly guidance it is noteworthy that our second quarter 2013 earnings will be significantly lower than the current consensus estimate of approximately $0.60 due to the expected timing of certain project sales.

This implies that the remainder of the earnings for the year will largely be reflected in the second half of the year and we’ll see consensus estimates for those periods. Now moving to slide 14, I’d like to summarize our progress so far this year. The first quarter is a strong start to the year across all operating and financial metrics.

First we achieved 14.2% average efficiency on our lead mine and remain on track to the efficiency roadmap communicated at the Analyst Day. Next we continue to implement our pipeline geographically the first bookings of over 400 megawatt DC. We continue to build out our budget pipeline and increase our global opportunity set to over 12 gigawatts.

From a standpoint we exceeded our Q1 guidance on both earnings and cash flow additionally we’ve increased our full year earnings and operating cash flow guidance. With that we conclude our prepared remarks and open up the call for questions.

Operator?.

Thank you sir. (Operator Instructions). And we will take our first from Shahr Pourreza at Citibank. Please go ahead..

Hey, Jim and Mark, how are you?.

Good..

Great..

Just let me just one question and just a quick follow up. Jim you have been very calculated when it comes to a decision and whether you would commit to doing a year going out. Recently we’ve seeing several participants on the solar and utility side, commit to forming an alternative financing vehicle. So market is starting to develop.

Given the share number of YieldCos that are likely going to form over the next several month, has your approach changed is the first question. And then the second question is, are you now more incentivized to take on the construction risk and capture maybe higher economics by selling to and existing YieldCos.

Thanks?.

Let me start with the second because it’s easiest. I have been indicating for at least the year and half now that we are more than willing to take on construction period risk because we believe the increase in the value of our asset more than justifies that risk.

That view point, that philosophy was filled into our business planning before anybody was really talking about YieldCos quite frankly. That managing the risk during that time period should be a core competency of the company. You should take on risk that it is your core competency and capture the value that represents.

So we have been perfectly willing to take those risks on and we will continue to be willing to take those risks on irrespective of whatever decision might be reached with respect to YieldCos.

Turning to specifically to YieldCos we note all of the filings and all of the announcements, some of those announcements are by customers or other companies that we have had expensive dealings with.

We continue to talk continuously with a lot of market participants, financial advisers about the [trends] in the market, how investors are viewing these vehicle. We tend to monitor developments in Washington and then look as best we can into our crystal ball, with respect to what overall tax policy for North America and the U.S. market looks like.

And all of those things factor into the attractiveness or like there of a YieldCos. And I don't think our view points or philosophies have shifted significantly than the comments that I made at Analyst Day, it is something that we continue to actively look at. But it is not something that we feel compel to make any sort of eminent or urgent decision.

I think we feel like the -- we have full optionality to take advantage of market attitudes towards such a vehicle, if it looks like it's interesting.

We have full optionality to market assets to YieldCos that either are not in existence today or coming to existence in the future or we can market and sale assets to our traditional customers in the same manner that we have.

One of the things that I think we have learned through our year or so of investigating is that we've been pretty good at monetizing our assets pretty efficiently. And we have not left a lot of value or money on the table historically. We will continue to be rigorous and make sure we're not leaving any money on the table in the future.

And I don't think that we really -- there is nothing that has changed our view point since the comments I made at Analyst Day..

And our next question comes from Brian Lee at Goldman Sachs..

Hey guys, thanks for taking the questions. If I look at your bookings run rate versus last year, it seems like you are a bit behind last year’s trajectory at the same time.

And my question is if you had any updated thoughts on book-to-bill for 2014, I think if we recall that 2 gigawatts bookings target for the year at the Analyst Day? And then as a follow-up on cost, utilization was down a percentage point, but the original efficiency was up 10 basis points versus 4Q.

I guess I am wondering if you can elaborate on few of the drivers that impacted the cost per watt for it to get [consequently]? Thanks..

Sure. I will take the first and then I will hand over to Mark for the second.

From a bookings momentum standpoint, we can get a look at the exact numbers, but I don't think there is a material difference between this year and last year and there is certainly nothing in the (inaudible) that will change our view point something here they were expressed at the Analyst Day.

We feel pretty good about what we got (inaudible) in the first quarter and we feel pretty good about the backlog and opportunities that we’ve got available to fill out what we've targeted for the rest of the year. So generally, pretty happy and pleased with the job that our teams are doing. And I'll let Mark comment on the cost issues..

Yes. Really anything else there on that as well is if you just look at the total pipeline opportunities set, from what we talked about in the Analyst Day which was sort of few weeks or so at March where it is now we’ve added a 1.5 gig or so, more than that actually, new opportunities.

So, the activity that’s happening on all bases is very robust and I would argue it's consistent with our ability to build or to achieve our book-to-bill ratio for the year. On the cost-end front of (inaudible), consistent Brian we said this in the last few quarters.

We've been very good at getting momentum across all factors that impact the cost per watt. So the efficiency was up sequentially, our throughput has improved and the variable costs, we continue to drive down cost around building material and other variable costs has all been favorable that helped drive down the cost per watt.

And again just the utilization rate sequentially was a nominally change and as I indicated with plan down to capture that utilization or future net efficiency benefit which we now have all of our lineup and operational with our latest back content material, which is given up and then we should be running all of our lines at least 14% efficiency or better..

Yes Brian, on the bookings with regard to megawatts we’re slightly ahead of where we were a year ago, we’re lower in revenue terms that's mainly due to the module bookings for that we have in this quarter..

And our next question comes from Patrick Jobin at Credit Suisse..

Hi, this is Brandon Heiken for Patrick. Thanks for taking the questions here.

I was wondering if you could clarify on the improvement in gross margin, it sounds like it's from the project side, I just want to sit double check that? And then for the $50 million improvement in operating cash flow, how much of that is from higher margins of other factors? Thank you..

So, the first one on the operating or the margin improvement, a lot of it is that we've been seeing continued to perform very well as it relates to the build out of our projects and driving costs down. We're getting better at overall productivity a lot of we have the projects all that helps and drive down the cost of delivery in the project.

So that’s big chunk of it. But the other thing that I said in my comments, which I think are important to notice that we see benefits within the quarter around energy, one year energy test around our EPC projects.

So we've actually outperformed the energy for the first year and leave in our (inaudible) we've got examples of what we've achieved bonuses because our plants have over performed the energy prediction.

So both cases that our plants are performing at a very, very high level and obviously driving upside in terms of bonuses and flow straight to the bottom-line performance for the company. And remind me of the second half of your question..

And then for the operating cash flow for the year with that increase of $50 million, how much of that is from the higher gross margin or what other factors contributed to that?.

Yes, I would argue I think of it is about half of it is associated with gross margin movement and then the balance of it is just driven by working capital management..

And our next question comes from Vishal Shah at Deutsche Bank..

Yes hi, thanks for taking my question.

Just wanted to check on the yieldco, you mentioned what percentage of your projects today are yieldco ready?.

I believe is one percentage of our projects are yieldco ready..

Yes, turned to yieldco or used to former yieldco?.

We continue to construct a lot of our assets on balance sheet and we are trying to capture improved economics as a sell down closer to COD. So we have three projects right now that sold a little over 200 megawatts that effectively are at or near COD.

And then you look at the balance of the year of other projects coming on we hadn’t even check our pipeline that we reported in our Q.

We have more than sufficient volumes if we chose and we said this at the Analyst Day and we showed a slide on this as well; if we chose to go a yieldco rather than we get it on our own or we leverage the opportunity of capturing essentially better value for the project and the sell down to yieldco..

And our next question comes from Paul Coster at JP Morgan..

Yes, thanks for taking my questions. I’m going to (inaudible) actually first one is market, Jim you mentioned in your prepared remarks that something like 600 megawatts have been added to part line in the U.S.

can you give us some sense of clearly you have North American demand where is the demand coming from regionally size of project type of (inaudible)? Another question to Mark and it relates to your comment around the upside in the first quarter you would see some sort of flexibility some patience.

What were you referring to, is it more visibility to hold things through the COD? Thank you..

So, in terms of the North American demand we’re seeing pretty robust and broad demand across a broad set of regions, as well as a broad set of project types and sizes. So we’ve seen demand through the year in the 100 megawatt plus class in the Western United States sort of in the California market which is very typical of our traditional U.S.

utility scale project. We’ve seen demand in the Southeastern United States, we’ve seen demand in the upper Midwest, we’ve seen demand in the Southwest and those have been down to very, very small projects of more consistent with the commercial and industrial scale side up to renewable utilities scale project.

So right now we’re seeing a more diverse demand picture in the United States than we’ve seen at least at any time since I’ve been involved with those projects.

And then my comment Paul at the end was just I think we tried to highlight that thing during the Analyst Day that we’re continuing to be patient and we’ll make where we think the right long-term decision as we operate to manage the business and then trying to capture the best economic and keeping all options available for whatever path we want to go down.

By having a strong quarter, strong results and a lot of this flexibility and optionality continue to evaluate and we want to those things we make and we close up this year and both decisions we make as we move into 2015 how faster or not, and we build out the project, we are happy in terms of when we sell projects how long the old projects are having that strong kind of foothold underneath that with the first quarter I think enhances our opportunity (inaudible) to be very patience..

And our next question comes from Krish Shankar at Bank of America Merrill Lynch..

Good afternoon, guys. You have Andrew Hughes on for Krish. Congrats on the strong quarter.

Jim, I am wondering I’d be the qualitatively or quantitatively, if you can give us a sense of how you are seeing valuations for fully developed assets maybe changed over the last even three to six months and yieldco demand elsewhere has picked up, have you seen sort of what people are willing to pay on EBITDA basis on a yield basis increase or decrease respectively?.

Yes, let me extend the comment back to the last two years. So one of the things that was most notable to me when I joined the company when I came into the industry was that the cost of capital appeared to be significantly higher for Solar assets than for other generation assets, but when traditional problem assets that was similarly fully contracted.

My own perspective was that solar assets were lower risked in those assets be at a more reliable resource and we had the absence of commodity price risk and less operational risk than other classes of assets. And so that delta in cost of capital felt like an arbitrage opportunity to me.

And I have said fairly consistently for at least a year and half that I felt like we were going to see a consistent and steady drop in the cost of capital for renewable solar projects, particularly in the North American market. That's exactly what we've seen that has continued up including the last six months.

YieldCos have been a part of that, but they have not been the sole source of that. We can look at the required return of our traditional customers going back 18 months, 24 months and look at the required returns today and there is a significant delta between the two.

So, it's not solely as a result of YieldCos, it's been a more broad adjustment in the market’s perception of these assets. And I said then and I continue to say today that I don’t see any reason that these assets should not trade at least at par with competitive forms of generation similarly situated if not a premium.

So, it's really not what we're seeing, it’s not unexpected, it's what I thought was going to happen in the market. How much more do we have to run? I don't know, the gap has been closed quite considerably compared to what it looked like 18 months, 24 months to ago.

I think that you'll see the lower cost of capital extend to a broader segment of the market. We now see stratification or differentiation depending upon size of project and quality and the credit of the offtake.

That's a rational way for the market to look at it but I think we may see lower cost of capital come into other segments of the market as more product becomes available and as investors get comfortable with it. So it’s been a consistent aspect to our industry that we’ve observed and watched for the last 18 months to 24 months..

And our next question comes from Rob Stone at Cowen & Company..

Hi guys, couple of questions if I may.

The first one with respect to the big outperformance in Q1, what was the biggest thing that changed from the time you gave the guidance to the five weeks again in the quarter? and I think you said something Mark about lawsuit related to Campo Verde, was there something that allows you to pull in that revenue related to that? Thanks.

And I have a follow-up..

Yes, as I said in highlight, the earning, the script was the primary drivers would be topline revenue relative to mid-point were about $100 million. We received annual bonuses for couple of our EPC projects as well as for O&M projects that we have.

And again those are one year type of energy test, performance availability test and we got results of those here in the third month of the core, so we are able to benefit from that. We’ve seen continued improvement as it relates to our ability to construct our project pipeline and do that in a very efficient manner to continue to drive out cost.

So that helped us as well. And then as we did have potential reserve set aside for litigation risk on Campo that has been resolved successfully. And so as we released the overall -- recognized the revenue on Campo Verde, we were able to reduce the cost plan because we didn’t have to deal with that litigation.

And so I want to make sure it’s clear, that was a relatively small portion of the overall piece. So, I wanted to highlight that this did impact the quarter, but majority of the results were more operationally driven and a little bit of timing because of revenue form..

And our final question today comes from (inaudible). Please go ahead..

Yes, thank you, good afternoon all. I have two questions on your pipeline. So the total potential booking continues to grow nicely of up to [12 last year].

How should we think about overall emerging base on this pipeline even though it’s fairly different (inaudible) externally?.

Yes. Okay. So yeah, what you're going to see is still a handful of large projects that are in that pipeline that will carry out multiple quarters, (inaudible) being another. But you're going to start to see a greater velocity, because the average project size is going to be quicker.

And if you even look at what we announced with EDF today, the project we highlighted there, portion of that volume will be constructed by the end of this year and then the balance will be constructed in 2015. So, you're going to start to see better velocity and better turn against that backlog.

We won't see again the four major projects that we have that almost cost 2 plus gigawatts DC of volume. That’s type of the long build out schedule that lasted most of the year, so you'll see less than from that and we'll see more project with greater velocity..

And our final question comes from Tyler Frank at Robert Baird..

Hi guys. Thanks for taking the question.

I was wondering if you can just touch on how we should think about efficiencies for the rest of the year and also what you're seeing in the C&I market and the potential for increased rooftop deployment?.

the group side of the [meter] and behind the [meter]. The group of [meter] is really executed by our traditional project development group and that doesn’t look or feel terribly different from all of the activity that we have been doing historically.

Those are typically around the systems; it’s typically an RFO or RFP process, it doesn’t look a lot terribly different from a utility process. So that one is pretty straight forward and looks, feel the same.

The behind the [meter] which can be ground map but often is also rooftop, I don’t think that we are looking to directly execute; we will build channel partnerships. And at this stage what we are seeing is a highly fragmented market with lots of potential channel partners.

And I would say we are spending a lot of our time trying to best analyze those partners and figure out who we think the right partners are going to be as we push into that market segment. But we certainly see lots of volume and opportunity. Obviously it will be much, much smaller highly repetitive transaction.

That’s why we think we need to execute through channel partners and we will have to -- it will take some time for us to build the model with each one those partners to the point that it becomes repetitive and begins to be a significant contributor.

So, I would think that it’s going to be towards the end of the year before we really begin to see significant contributions. But this is not -- there is no shortage of activity; it’s us getting our feet wet and getting our own processes and partners in place that will allow us to pursue that pretty aggressively..

And relative to the efficiency, I highlighted a little bit in the script too that we’ve seen a significant improvement; we had a major roll out here over the last few quarters as it relates to our that concept of change and you’re seeing the benefit of that as I indicated in the call.

In fact we have all the lines that are operational running at 15% -- excuse me, 14% entitlement.

We’ll see that, in Q2 we’ll see the balance of the fleet start to approach the lead line number that we’ve referenced which is kind of around [42%] and then you’ll see more in the second half of the year as we roll out two new efficient campaigns, so you’ll see the bump in Q3 and a bump in Q4.

On the lead line in particularly and you’ll start to see the fleet move up as well. But all that is consistent with the information and the guidance that we provided during the Analyst day.

So everything we’re seeing right now, we’re highly encouraged and we feel we’ll move in the right direction needed to do as well and a lot better than what we provided in the Analyst Day..

And we have a follow-up question from Vishal Shah at Deutsche Bank..

Yes, hi. Thanks for taking my question. Mark and Jim I wanted to find out if there is any change in the competitive landscape as you bid for some of the utility skilled projects here in the U.S.

especially in light of some of the recent shred in and the investigations? Are you seeing less competition from the Chinese and have you been also seeing any changing in pricing given that the competitive pricing environment is getting better? Thank you..

What I would say around the competitive landscape is it’s still very, very competitive.

I would say that our differentiation and our capabilities and it’s been -- continues to be more and more appreciated and I also think that where we are with our roadmap and where we are going to go with our installed cost is being very well received and we are generally continuing to be identified as a partner of choice.

Pricing again is competitive, it’s very competitive, it is in some cases moderating a little bit, we may say it’s starting to [lock] in certain situation, but I don’t want anyone to walk away from the discussion that prices are moving into rapidly in an upward direction, but they are no longer falling and no longer as aggressive as we’ve seen them being in the past.

I think there is also a number of whether utilities (inaudible) or others are concerned about people’s ability to construct the assets in the face of the IPC exploration and so they are looking to a proven partner like for Solar to step into that and there is more of a premium associated with our ability to execute and deliver on that.

So, all that I think is helpful for us to market..

And ladies and gentlemen, that does conclude today’s conference. We thank you for your participation..