FORWARD LOOKING STATEMENTS

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Transcription:

FINANCIAL UPDATE

FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements which are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements, among other things, concerning: effects on our financial statements and guidance resulting from certain module manufacturing changes and associated restructuring activities; our business strategy, including anticipated trends and developments in and management plans for our business and the markets in which we operate; future financial results, operating results, revenues, gross margin, operating expenses, products, projected costs (including estimated future module collection and recycling costs), warranties, solar module technology and cost reduction roadmaps, restructuring, product reliability, investments in unconsolidated affiliates and capital expenditures; our ability to continue to reduce the cost per watt of our solar modules; the impact of public policies, such as tariffs or other trade remedies imposed on solar cells and modules; our ability to expand manufacturing capacity worldwide; our ability to reduce the costs to construct PV solar power systems; research and development programs and our ability to improve the conversion efficiency of our solar modules; sales and marketing initiatives; and competition. These forward-looking statements are often characterized by the use of words such as "estimate," "expect," "anticipate," "project," "plan," "intend," "seek," "believe," "forecast," "foresee," "likely," "may," "should," "goal," "target," "might," "will," "could," "predict," "continue" and the negative or plural of these words and other comparable terminology. Forward-looking statements are only predictions based on our current expectations and our projections about future events. You should not place undue reliance on these forward-looking statements. We undertake no obligation to update any of these forward-looking statements for any reason. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these statements. These factors include, but are not limited to, the matters discussed in Item 1A "Risk Factors," of our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. 2

2017 RECAP: STRATEGIC REPOSITIONING MODULES SYSTEMS SALES & DEVELOPMENT Series 4: Ramping down Series 5: Discontinued TetraSun: Discontinued Module Plus: Discontinued Structures: Internal Tracker and Fixed Tilt discontinued EPC: Capabilities right-sized to development portfolio OM: Exited Skytron (Europe) Module Sales: Reduced direct sales presence in markets serviced via partnerships Development: Re-focused on key markets Focused Resources & Capital on Series 6 Maintain EPC Capabilities Optimize Existing Ecosystem Global Module Sales, Maintain Development in Strategic Markets 3

2018 OUTLOOK

BALANCED BUSINESS MODEL PHILOSOPHY GROWTH Bookings Product Mix Shift Revenue Demand Generation CREATING SHAREHOLDER VALUE PROFITABILITY Cost per Watt Gross Margin OpEx per Watt EPS LIQUIDITY Cash from Operations Net Cash Position Working Capital 5

Bookings Shipments BOOKINGS TREND GWs 8 7 6 5 4 3 2 1.1x 1.7x Book-to-Bill Ratio 1.2x 0.5x 3.0x 4.00 3.00 2.00 1.00 0.00-1.00-2.00-3.00 1-4.00 0 2013 2014 2015 2016 2017 YTD * -5.00 *As of Dec 1, 2017 6

BOOKINGS VS EXPECTED CAPACITY 2018 to 2020 Capacity ~13.8GW dc Contracted Volume 7.7GW dc Mid/Late Stage 5.6GW dc 6,000 5,000 4,000 3,000 2,000 1,000 Expected 2017 Signed (not booked) - 2018 2019 2020 Series 4 S4 Extension Series 6 Delivery Timing 2017 = ~0.2GW 2018 2020 = ~7.5GW Pipeline Status Expected 2017 = ~1.1GW Signed = ~2.0GW *As of Dec 1, 2017 7

TARGETED BUSINESS MIX GWs 6 Development EPC Module 5 4 3 2 1 0 ~0.9GW ~1GW ~1GW 2018 2019 2020 8

DEVELOPMENT CONTRACTED PORTFOLIO: 1.8GW DC 1 U.S., Japan, Australia, India OPPORTUNITY PIPELINE: Mid/late stage 1.8 GW DC Expected Revenue Recognition: 2018 Project Size (MW AC) PPA Offtaker % of Revenue Recognized 2 California Flats, CA 280 PG&E / Apple 68% Rosamond, CA 150 SCE 0% Willow Springs, CA 100 SCE 0% Australia 49 Energy Australia 0% India Projects 3 230 Various 0% Japan 80 Various 0% Expected Revenue Recognition: Post 2018 Project Size (MW AC) PPA Offtaker 1 Includes portion of California Flats project already constructed. 2 - As of Sep 30, 2017 3 Portion of project sales expected in 2017 4 Marin Clean Energy Substantial Completion Sun Streams, AZ 150 SCE 2019 American Kings, CA 126 SCE 2020 Sunshine Valley, NV 100 SCE 2019 Little Bear, CA 40 MCE 4 2020 Japan 130 Various 2019-2020 9

TARGETED BUSINESS MIX GWs 6 Development EPC Module 5 4 3 2 1 0 ~0.3GW ~0.9GW ~1GW ~1GW 2018 2019 2020 10

TARGETED BUSINESS MIX GWs 6 Development EPC Module EPC, O&M Opportunity 5 4 3 2 1 0 ~0.3GW ~0.9GW ~1GW ~1GW 2018 2019 2020 11

GROSS MARGIN: MODULE BUSINESS Indicative / Not To Scale >20%** 15-20% ~12%* <12%* Competitor Reported GM % Freight, Warranty Competitor Adjusted GM % CpW Advantage Energy Yield Advantage BOS Penalty Series 4 GM % BOS Penalty Elimination CpW Reduction Series 6 GM % *Based on last twelve months competitors gross margins (includes CSIQ, HQCL, JASO, JKS, YGE) from public filings. ** FS gross margin excludes ramp penalty 12

70% 60% 50% 40% 30% 20% 10% 0% ecember 2017 GROSS MARGIN OUTLOOK Indicative / Not To Scale Contracted > 50% Series 6 > 20% Series 4 15-20% Incremental > 20% Contracted > 30% Incremental 10-30% 5-10% Module Development EPC O&M 13

OPEX: EFFECTIVE MANAGEMENT $m $/W 400 398 386 387 R&D SG&A OpEx per Watt produced 0.40 300 254 255 262 285 0.30 200 195 0.20 100 0.10 144 131 125 90-2014 2015 2016 2017E 2018E - *2017 operating expense based on guidance mid-points. Excludes restructuring and plant start-up 14

OPEX: EFFECTIVE MANAGEMENT $m $/W 400 398 386 387 R&D SG&A OpEx per Watt produced 0.40 300 254 255 262 285 295 0.30 200 195 205 0.20 100 0.10 144 131 125 90 90-2014 2015 2016 2017E 2018E - *2017 and 2018 operating expense based on guidance mid-points. Excludes restructuring and plant start-up 15

PRIORITY LIQUIDITY: APPROACH 1 Working Capital 2 3 4 Capacity Expansion & Other CAPEX Project Development and Construction M&A 5 Capital return 16

7.0 6.0 5.0 4.0 3.0 2.0 1.0 - ecember 2017 CAPACITY EXPANSION: SERIES 6 CAPEX 2020 Year End Announced Series 6 Capacity 800 700 5.4 GW 600 ~$650M 1.2 500 ~$450M 1.2 400 1.2 300 200 ~$150M - $250M 1.2 100 ~$50M - $100M 0.6 2020 0 2017 2018 2019 2020 17

2,000 1,500 1,000 500 0 ecember 2017 PROJECT DEVELOPMENT AND CONSTRUCTION $1.9 B $1.7 B ~50% reduction in Project Assets and PV Systems on balance sheet ~65% reduction, net of project debt ~65% Lower BOS and module costs-per-watt reduce balance sheet exposure $0.9 B $0.6 B Leveraging project level debt to offset cash spend and mitigate currency risk in international markets Recycling capital faster by selling projects pre-cod Q4 2016 Q3 2017 Project Assets + PV Systems Project Assets + PV Systems, Net of Project Debt 18

PRIORITY LIQUIDITY: APPROACH 1 Working Capital 2 3 4 Capacity Expansion & Other CAPEX Project Development and Construction M&A 5 Capital return 19

Net (Debt)/Cash in $ millions NET CASH: 2016 ANALYST DAY 3,000 Net Cash Position 2,000 1,000 0 (1,000) (2,000) (3,000) FSLR SunPower JA Solar Net Debt Position Hanwha Q Cells Trina Solar Jinko Solar Canadian Solar Yingli Solar SunEdison Source: Net cash/debt based on Photon Consulting estimates as of Dec 2015 20

Net (Debt)/Cash in $ millions Private Defaulted Bankrupt NET CASH: CURRENT 3,000 Net Cash Position 2,000 1,000 0 (1,000) (2,000) (3,000) Net Interest Income (Exp) FSLR SunPower JA Solar Net Debt Position Hanwha Q Cells Trina Solar Jinko Solar Canadian Solar Yingli Solar SunEdison $5M ($81M) ($47M) ($43M) N/A ($51M) ($98M) ($95M) N/A Source: Net cash/debt based on Q3 17 public filings. Jinko Solar, Yingli Solar based on Q2 17 filings. Net interest expense is last 12 months as reported in company filings. 21

2018 GUIDANCE

2018 GUIDANCE: CONTEXT TAX REFORM: Guidance based on existing tax law 201 TRADE CASE: Outcome remains uncertain Limited potential impact to 2018 guidance 8POINT3 SALE: Sale process ongoing Guidance assumes no change in ownership RESTRUCTURING: Limited 2018 restructuring expense (~$10M) ACCOUNTING: Updated segment reporting 23

2018 GUIDANCE: ASSUMPTIONS AS OF DECEMBER 5, 2017 PRODUCTION CAPACITY: ~2.9GW dc (1.9 GW Series 4, 1 GW Series 6) VOLUME SOLD: ~2.8GW dc (1.6 GW module, 0.9 GW development, 0.3 GW EPC) REVENUE MIX: 20% - 25% module 75% - 80% systems DEVELOPMENT SALES: US: California Flats (2 nd phase), Rosamond, Willow Springs International: Japan, India & Australia projects SERIES 6 EXPANSION: Ramp Penalty (COGS): Approximately $60M Plant Start-Up (OPEX): Approximately $110M 24

2018 GUIDANCE: AS OF DECEMBER 5, 2017 2018 GAAP Guidance Net Sales $2.3B to $2.5B Gross Margin (%) 22% to 23% Operating Expenses $400M to $410M Operating Income 1 $110M to $170M Earnings Per Share 1 $1.25 to $1.75 Net Cash Balance 2 $1.6B to $1.8B Operating Cash Flow $100M to $200M Capital Expenditures $650M to $750M Shipments 2.7GW to 2.8GW ~$60M of ramp penalty included in COGS ~$110M of plant start-up included in OpEx SERIES 6 1 Includes approximately $10M of restructuring related charges. 2 - Cash and marketable securities less expected debt at the end of 2017. 25

250 200 150 100 50 0 ecember 2017 SERIES 6: 5.4GW PRODUCTION CAPACITY BY YEAR END 2020 2017 2018 2019 2020 Capex ($M) ~$450 ~$650 $150 $250 $50 $100 ADDITIONAL COGS & OPEX ASSOCIATED WITH SERIES 6 EXPANSION ~$170 M Ramp penalty (COGS) 60 Start-up expense (OpEx) ~$50 M 50 110 ~$50 M ~$50 M 25 25 25 25 2017 2018 2019 2020 26

SUMMARY 2018 OUTLOOK Focus on differentiated technology and differentiated business model Strong bookings and pipeline anchoring announced capacity expansion Business mix of ~1GW development, selective 3rd party EPC, module only growth OpEx discipline leveraging fixed cost base 2018 GUIDANCE EPS midpoint guidance of $1.50/share Includes ~$170M Series 6 ramp and start up costs Maintaining strong balance sheet and liquidity throughout Series 6 transition 27