Document and Company Informatio
Document and Company Information (USD $) | |||
9 Months Ended
Sep. 26, 2009 | Oct. 23, 2009
| Jun. 27, 2008
| |
Document and Company Information [Abstract] | |||
Entity Registrant Name | FIRST SOLAR, INC. | ||
Entity Central Index Key | 0001274494 | ||
Document Type | 10-Q | ||
Document Period End Date | 2009-09-26 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-26 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $10,046,225,940 | ||
Entity Common Stock, Shares Outstanding | 85,107,744 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | ||||
In Thousands, except Per Share data | 3 Months Ended
Sep. 26, 2009 | 3 Months Ended
Sep. 27, 2008 | 9 Months Ended
Sep. 26, 2009 | 9 Months Ended
Sep. 27, 2008 |
Net sales | $480,851 | $348,694 | $1,424,935 | $812,650 |
Cost of sales | 235,858 | 153,251 | 646,562 | 368,183 |
Gross profit | 244,993 | 195,443 | 778,373 | 444,467 |
Operating expenses: | ||||
Research and development | 24,136 | 9,952 | 54,445 | 22,437 |
Selling, general and administrative | 53,990 | 48,995 | 176,231 | 121,292 |
Production start-up | 4,076 | 6,344 | 12,809 | 23,727 |
Total operating expenses | 82,202 | 65,291 | 243,485 | 167,456 |
Operating income | 162,791 | 130,152 | 534,888 | 277,011 |
Foreign currency gain (loss) | 114 | (1,889) | 2,187 | (468) |
Interest income | 2,398 | 5,323 | 6,449 | 16,931 |
Interest expense, net | (89) | (127) | (4,851) | (131) |
Other expense, net | (247) | (360) | (2,676) | (1,179) |
Income before income taxes | 164,967 | 133,099 | 535,997 | 292,164 |
Income tax expense | 11,623 | 33,830 | 37,479 | 76,605 |
Net income | $153,344 | $99,269 | $498,518 | $215,559 |
Net income per share: | ||||
Basic | 1.82 | 1.23 | 5.99 | 2.7 |
Diluted | 1.79 | 1.2 | 5.88 | 2.63 |
Weighted-average number of shares used in per share calculations: | ||||
Basic | 84,179 | 80,430 | 83,196 | 79,789 |
Diluted | 85,892 | 82,436 | 84,724 | 82,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | ||
In Thousands | Sep. 26, 2009
| Dec. 27, 2008
|
Current assets: | ||
Cash and cash equivalents | $364,814 | $716,218 |
Marketable securities- current | 158,847 | 76,042 |
Accounts receivable, net | 348,965 | 61,703 |
Inventories - current | 178,032 | 121,554 |
Project assets - current | 58,017 | 0 |
Economic development funding receivable | 0 | 668 |
Deferred tax asset, net - current | 15,362 | 9,922 |
Prepaid expenses and other current assets | 79,355 | 91,294 |
Total current assets | 1,203,392 | 1,077,401 |
Property, plant and equipment, net | 962,732 | 842,622 |
Project assets - noncurrent | 102,692 | 0 |
Deferred tax asset, net - noncurrent | 117,449 | 61,325 |
Marketable securities - noncurrent | 306,415 | 29,559 |
Restricted cash and investments-noncurrent | 37,173 | 30,059 |
Investment in related party | 25,000 | 25,000 |
Goodwill | 284,005 | 33,829 |
Inventories - noncurrent | 11,434 | 0 |
Other assets - noncurrent | 44,780 | 14,707 |
Total assets | 3,095,072 | 2,114,502 |
Current liabilities: | ||
Accounts payable | 72,338 | 46,251 |
Income tax payable | 17,555 | 99,938 |
Accrued expenses | 142,490 | 140,899 |
Current portion of long-term debt | 29,169 | 34,951 |
Other liabilities - current | 85,107 | 59,738 |
Total current liabilities | 346,659 | 381,777 |
Accrued collection and recycling liabilities | 76,932 | 35,238 |
Long-term debt | 163,320 | 163,519 |
Other liabilities - noncurrent | 48,987 | 20,926 |
Total liabilities | 635,898 | 601,460 |
Stockholders' equity: | ||
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 85,071,436 and 81,596,810 shares issued and outstanding at September 26, 2009 and December 27, 2008, respectively | 85 | 82 |
Additional paid-in capital | 1,632,911 | 1,176,156 |
Contingent consideration | 2,844 | 0 |
Accumulated earnings | 859,743 | 361,225 |
Accumulated other comprehensive loss | (36,409) | (24,421) |
Total stockholders' equity | 2,459,174 | 1,513,042 |
Total liabilities and stockholders' equity | $3,095,072 | $2,114,502 |
1_Condensed Consolidated Balanc
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) (USD $) | ||
Sep. 26, 2009
| Dec. 27, 2008
| |
Stockholders' equity: | ||
Common stock, par value | 0.001 | 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 85,071,436 | 81,596,810 |
Common stock, shares outstanding | 85,071,436 | 81,596,810 |
2_Condensed Consolidated Statem
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | ||
In Thousands | 9 Months Ended
Sep. 26, 2009 | 9 Months Ended
Sep. 27, 2008 |
Cash flows from operating activities: | ||
Cash received from customers | $1,169,345 | $779,209 |
Cash paid to suppliers and associates | (770,985) | (513,583) |
Interest received | 4,266 | 15,306 |
Interest paid | (7,527) | (3,003) |
Income taxes paid, net of refunds | (123,011) | (3,202) |
Excess tax benefit from share-based compensation arrangements | (9,476) | (13,736) |
Other operating activities | (1,217) | (1,179) |
Net cash provided by operating activities | 261,395 | 259,812 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (210,757) | (330,610) |
Purchases of marketable securities | (512,116) | (274,262) |
Proceeds from maturities of marketable securities | 124,576 | 373,367 |
Proceeds from sales of marketable securities | 29,784 | 49,450 |
Investment in note receivable | (45,495) | 0 |
Payments received on note receivable | 14,871 | 0 |
Increase in restricted investments | (4,411) | (15,254) |
Acquisitions, net of cash acquired | 318 | 0 |
Other investing activities | (1,756) | 0 |
Net cash used in investing activities | (604,986) | (197,309) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 4,685 | 14,107 |
Repayment of long-term debt | (63,699) | (34,833) |
Proceeds from issuance of debt, net of issuance costs | 44,820 | 94,090 |
Excess tax benefit from share-based compensation arrangements | 9,476 | 13,736 |
Proceeds from economic development funding | 615 | 35,661 |
Other financing activities | (2) | (5) |
Net cash (used in) provided by financing activities | (4,105) | 122,756 |
Effect of exchange rate changes on cash and cash equivalents | (3,708) | (7,744) |
Net increase (decrease) in cash and cash equivalents | (351,404) | 177,515 |
Cash and cash equivalents, beginning of the period | 716,218 | 404,264 |
Cash and cash equivalents, end of the period | 364,814 | 581,779 |
Supplemental disclosure of noncash investing and financing activities: | ||
Property, plant and equipment acquisitions funded by liabilities | $0 | $31,468 |
Basis of Presentation
Basis of Presentation | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of First Solar, Inc. and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the instructions to Form 10-Q and Article10 of RegulationS-X of the Securities and Exchange Commission. Accordingly, these interim financial statements do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement have been included. Operating results for the nine months ended September26, 2009 are not necessarily indicative of the results that may be expected for the year ending December26, 2009, or for any other period. The balance sheet at December27, 2008 presented in these financial statements has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These financial statements and accompanying notes should be read in conjunction with the financial statements and notes thereto for the year ended December27, 2008 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission. We report our results of operations using a 52 or 53week fiscal year, which ends on the Saturday on or before December31. Our fiscal quarters end on the Saturday closest to the end of the applicable calendar quarter. Fiscal 2009 will end on December26, 2009 and will consist of 52 weeks. Unless expressly stated or the context otherwise requires, the terms we, our, us and First Solar refer to First Solar, Inc. and its subsidiaries. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies These condensed consolidated financial statements and accompanying notes should be read in conjunction with our annual consolidated financial statements and notes thereto for the year ended December27, 2008 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission. Our significant accounting policies reflect the adoption of Financial Accounting Standards Board (FASB)Accounting Standards Codification Topic (ASC)805, Business Combinations, in the second quarter of fiscal 2009. During the third quarter of fiscal 2009, we adopted the provisions of ASC 976, Accounting for Sales of Real Estate for certain solar power projects. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | Note 3. Recent Accounting Pronouncements In June2009, the FASB issued SFAS 166, Accounting for Transfers of Financial Assets- an amendment of SFAS 140. This standard eliminates the concept of a qualifying special-purpose entity, changes the requirements for derecognizing financial assets and requires additional disclosures in order to enhance information to users of financial statements by providing greater transparency about transfers of financial assets, including securitization transactions, and an entitys continuing involvement in and exposure to the risks related to transferred financial assets. SFAS 166 is effective for fiscal years ended after November15, 2009. We do not expect that the adoption of SFAS 166 will have a material impact on our financial position, results of operations or cash flows. In June2009, the FASB issued SFAS 167, Amendments to FASB Interpretation No.46(R). This standard changes the consolidation analysis for variable interest entities. SFAS 167 is effective for fiscal years ending after November15, 2009. We do not expect that the adoption of SFAS 167 will have a material impact on our financial position, results of operations or cash flows. In September2009, the FASB issued FASB Accounting Standards Codification Update (ASU) 2009-05, Measuring Liabilities at Fair Value. The fair value measurement of a liability assumes transfer to a market participant on the measurement date, not a settlement of the liability with the counterparty. ASU 2009-05 describes various valuation methods that can be applied to estimating the fair values of liabilities, requires the use of observable inputs and minimizes the use of unobservable valuation inputs. ASU 2009- 05 is effective for the fourth quarter of 2009. We do not expect that the adoption of ASU 2009-05 will have a material impact on our financial position, results of operations or cash flows. In September2009, the FASB issued ASU 2009-06, Implementation Guidance on Accounting for Uncertainty in Income Taxes and Disclosure Amendments for Nonpublic Entities. ASU 2009-06 provides guidance on how to account for uncertainty in income taxes, especially for tax payments made by an entity attributable to the entity or attributable to the owners. In addition, ASU 2009-06 clarifies managements determination of the taxable status of an entity and amends certain disclosure requirements. ASU 2009-06 is effective for the third quarter of 2009. The adoption of ASU 2009-06 had no impact on our financial position, results of operations or cash flows. In October2009, the FASB issued ASU 2009-13, Multiple-Deliverable Revenue Arrangements. ASU 2009-13 revises certain accounting for revenue arrangements with multiple deliverables, in particular when vendor specific objective evidence or third party evidence for deliverables in an arrangement cannot be determined, a best estimate of the selling price is required to separate deliverables and to allocate the arrangement consideration. ASU 2009-13 is effective for the first quarter of 2011, with early adoption permitted. We do not expect that the adoption of ASU 2009-13 will have a material impact on our financial position, resu |
Acquisition
Acquisition | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Acquisition [Abstract] | |
Acquisition | Note 4. Acquisition On April3, 2009, we completed the acquisition of the solar power project development business (the Project Business) of OptiSolar Inc. (OptiSolar). Pursuant to an Agreement and Plan of Merger (the Merger Agreement) dated March2, 2009, by and among First Solar, Inc., First Solar Acquisition Corp. (Merger Sub), OptiSolar and OptiSolar Holdings LLC (OptiSolar Holdings), Merger Sub merged with and into OptiSolar, with OptiSolar surviving as a wholly-owned subsidiary of First Solar, Inc. (the Merger). Pursuant to the Merger, all the outstanding shares of common stock of OptiSolar held by OptiSolar Holdings were exchanged for 2,972,420 shares of First Solar common stock, par value $0.001 per share (the Merger Shares), of which 732,789 shares were issued and deposited with an escrow agent to support certain indemnification obligations of OptiSolar Holdings. Also, 355,096 shares were holdback shares as further described below under Contingent Consideration (the Holdback Shares). As of September26, 2009, 2,951,256 Merger Shares had been issued. The period during which claims for indemnification from the escrow fund may be initiated commenced on April3, 2009 and will end on April3, 2011. Purchase Price Consideration The total consideration for this acquisition based on the closing price of our common stock on April3, 2009 of $134.38 per share was $399.4million. Contingent Consideration Pursuant to the Merger Agreement, of the 2,972,420 Merger Shares, as of April3, 2009, 355,096 shares were Holdback Shares that were issuable to OptiSolar Holdings upon satisfaction of conditions relating to certain then-existing liabilities of OptiSolar. As of September26, 2009, 333,932 Holdback Shares had been issued to OptiSolar Holdings, with 331,523 Holdback Shares issued during the three months ended September26, 2009. The estimated fair value of this contingent consideration was $2.8million at September26, 2009 (relating to 21,164 Holdback Shares remaining to be issued as of such date) and $47.7million on April3, 2009 (relating to 355,096 Holdback Shares to be issued as of such date), and has been classified separately within stockholders equity on our balance sheet. Purchase Price Allocation We accounted for this acquisition using the acquisition method in accordance with ASC 805. Accordingly, we allocated the purchase price to the acquired assets and liabilities based on their estimated fair values at the acquisition date of April3, 2009, as summarized in the following table (in thousands): Tangible assets acquired $ 10,175 Project assets 103,888 Deferred tax assets 43,600 Deferred tax liability (8,405 ) Goodwill 250,176 Total purchase consideration $ 399,434 The fair value of net tangible assets acquired on April3, 2009 consisted of the following (in thousands): Cash $ 318 Prepaid expenses and other current assets 5,003 Property, plant and equipment 165 Project assets Land 6,100 Total identifiable assets acquired 11,586 Accounts payable and other liabilities (1,411 ) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Goodwill and Intangible Assets [Abstract] | |
Goodwill and Intangible Assets | Note 5. Goodwill and Intangible Assets Goodwill On November30, 2007, we acquired 100% of the outstanding membership interests of Turner Renewable Energy, LLC. Under the purchase method of accounting, we allocated $33.4million to goodwill through December29, 2007, which represents the excess of the purchase price over the fair value of the identifiable net tangible and intangible assets of Turner Renewable Energy, LLC. All of this goodwill was allocated to our systems segment. At September26, 2009 and December27, 2008, the carrying amount of this goodwill was $33.8million. On April3, 2009, we acquired the solar power project development business of OptiSolar. Under the acquisition method of accounting, we allocated $261.1million to goodwill, which primarily represents the synergies and economies of scale expected from acquiring OptiSolars project pipeline and using our solar modules in the acquired projects. During the three months ended September26, 2009, we adjusted goodwill downward by $11.0million as additional information regarding deferred tax assets became available. We have allocated $248.8million and $1.4million of this goodwill to our components reporting segment and systems segment (reported under Other in our disclosure of segment operating results), respectively. At September26, 2009, the carrying amount of this goodwill was $250.2 million. See Notes 4 and 20 to our condensed consolidated financial statements for additional information about this acquisition. The changes in the carrying amount of goodwill for the nine months ended September26, 2009 were as follows (in thousands): Components Other Consolidated Beginning balance, December27, 2008 $ $ 33,829 $ 33,829 Goodwill from 2009 acquisitions 259,722 1,411 261,133 Goodwill adjustment (1) (10,957 ) $ (10,957 ) Ending balance, September26, 2009 $ 248,765 $ 35,240 $ 284,005 (1) The goodwill adjustment was primarily the result of adjustments to the amount of acquired deferred tax assets. ASC 350, Intangibles Goodwill and Other, requires us to test goodwill for impairment at least annually, or sooner, if facts or circumstances between scheduled annual tests indicate that it is more likely than not that the fair value of a reporting unit that has goodwill might be less than its carrying value. We performed our goodwill impairment tests in the fourth fiscal quarter of the year ended December27, 2008. Based on that test, we concluded that our goodwill was not impaired. We have also concluded that there have been no changes in facts and circumstances since the date of that test, and since the April3, 2009 OptiSolar acquisition, that would trigger an interim goodwill impairment test. Acquisition Related Intangible Assets In connection with the acquisition of Turner Renewable Energy, LLC, we identified intangible assets that represent customer contracts already in progress and future customer contracts not yet started at the time of acquisition. We amortize the acquisition date fair values of these assets using t |
Cash and Investments
Cash and Investments | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Cash and Investments [Abstract] | |
Cash and Investments | Note 6. Cash and Investments Cash, cash equivalents and marketable securities consisted of the following at September26, 2009 and December27, 2008 (in thousands): September 26, December 27, 2009 2008 Cash and cash equivalents: Cash $ 136,477 $ 603,434 Cash equivalents: Federal agency debt 38,832 Money market mutual fund 228,337 73,952 Total cash and cash equivalents 364,814 716,218 Marketable securities: Federal agency debt 124,390 68,086 Foreign agency debt 144,590 6,977 Supranational debt 71,240 Corporate debt securities 114,926 30,538 Foreign government obligations 10,116 Total marketable securities 465,262 105,601 Total cash, cash equivalents and marketable securities $ 830,076 $ 821,819 We have classified our marketable securities as available-for-sale. Accordingly, we record them at fair value and account for net unrealized gains and losses as part of accumulated other comprehensive income until realized. We report realized gains and losses on the sale of our marketable securities in earnings, computed using the specific identification method. During the three months ended September26, 2009, we did not realize any gains or losses on our marketable securities. During the nine months ended September26, 2009, we realized an immaterial amount in gains and did not realize any losses on our marketable securities. During the three and nine months ended September27, 2008, we realized $0.2million and $0.6million in gains and $0.3million and $0.4million in losses, respectively, on our marketable securities. See Note 10 to our condensed consolidated financial statements for information about the fair value measurement of our marketable securities. All of our available-for-sale marketable securities are subject to a periodic impairment review. We consider a marketable debt security to be impaired when its fair value is less than its carrying cost, in which case we would further review the investment to determine whether it is other-than-temporarily impaired. When we evaluate an investment for other-than-temporary impairment, we review factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and any changes thereto, our intent to sell, and whether it is more likely than not we will be required to sell the investment before we have recovered its cost basis. If an investment is other-than-temporarily impaired, we write it down through earnings to its impaired value and establish that as a new cost basis for the investment. We did not identify any of our marketable securities as other-than-temporarily impaired at September26, 2009. The following table summarizes unrealized gains and losses related to our investments in marketable securities designated as available-for-sale by major security type (in thousands): As of September 26, 2009 |
Restricted Cash and Investments
Restricted Cash and Investments | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Restricted Cash and Investment [Abstract] | |
Restricted Cash and Investment | Note 7. Restricted Cash and Investments Restricted cash and investments consisted of the following at September26, 2009 and December 27, 2008 (in thousands): September 26, December 27, 2009 2008 Restricted cash $ 38 $ 4,218 Restricted investments 37,135 Deposit with financial services company 25,841 Total restricted cash and investments $ 37,173 $ 30,059 Restricted cash and investments current $ $ Restricted cash and investments noncurrent $ 37,173 $ 30,059 At September26, 2009, our restricted investments consisted of long-term marketable securities that we hold to fund future costs of our solar module collection and recycling program. The following table summarizes unrealized gains and losses related to our restricted investments in marketable securities designated as available-for-sale by major security type (in thousands): As of September 26, 2009 Gross Gross Estimated Amortized Unrealized Unrealized Fair Security Type Cost Gains Losses Value U.S. government obligations $ 775 $ 41 $ $ 816 Foreign government obligations 34,693 1,626 36,319 Total $ 35,468 $ 1,667 $ $ 37,135 As of September26, 2009, the contractual maturities of these available-for-sale marketable securities were between 18 and 26years. |
Consolidated Balance Sheet Deta
Consolidated Balance Sheet Details | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Consolidated Balance Sheet Details [Abstract] | |
Consolidated Balance Sheet Details | Note 8. Consolidated Balance Sheet Details Accounts receivable, net Accounts receivable, net consisted of the following at September26, 2009 and December27, 2008 (in thousands): September 26, December 27, 2009 2008 Accounts receivable, gross $ 352,955 $ 61,703 Allowance for doubtful account (3,990 ) Accounts receivable, net $ 348,965 $ 61,703 The increase in accounts receivable was mainly due to the amendment of certain of our customers long-term supply contracts to extend their payment terms from net 10days to net 45days at the end of the first quarter of 2009 and due to higher volumes shipped during the three months ended September26, 2009. During the three months ended September26, 2009, we amended our Long Term Supply Contracts with certain of our customers to implement a program which extends a price rebate to certain of these customers for solar modules purchased from us. The intent of this program is to enable our customers to successfully compete in our core segments in Germany. The rebate program applies a specified rebate rate to solar modules sold for solar power projects in Germany at the beginning of each quarter for the upcoming quarter. The rebate program is subject to periodic review and we will adjust the rebate rate quarterly upward or downward as appropriate. The rebate period commenced during the third quarter of 2009 and terminates at the end of the fourth quarter of 2010. Customers need to meet certain requirements in order to be eligible for and benefit from this program. We account for rebates as a reduction to the selling price of our solar modules and therefore as a reduction in revenue. No rebates granted under this program can be claimed in cash and all will be applied to reduce outstanding accounts receivable balances. During the three months ended September26, 2009 we extended rebates to customers in the amount of 48.7million ($71.5million at the balance sheet close rate on September26, 2009 of $1.47/1.00) which reduced our accounts receivable from these customers by such amount at September26, 2009. During the three months ended June27, 2009, we provided an allowance the doubtful account receivable in the amount of $7.0million due to the collectability of the outstanding accounts receivable from a specific customer. During the three months ended September26, 2009 we collected $3.0million of the overdue accounts receivable balance from this specific customer and reduced our allowance for the doubtful account accordingly. Inventories Inventories consisted of the following at September26, 2009 and December27, 2008 (in thousands): September 26, December 27, 2009 2008 Raw materials $ 119,400 $ 103,725 Work in process 10,627 4,038 Finished goods 59,439 13,791 Total inventories $ 189,466 $ 121,554 Inventory current $ 178,032 $ 121,554 Inventory noncurrent (1) $ 11,434 $ (1) Inventory noncurrent represents raw materials. Prepaid expenses and other |
Derivative Instruments
Derivative Instruments | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Derivative Instruments [Abstract] | |
Derivative Instruments | Note 9. Derivative Instruments As a global company, we are exposed in the normal course of business to interest rate and foreign currency risks that could affect our net assets, financial position, results of operations and cash flows. We use derivative instruments to hedge against certain risks, such as these, and we only hold derivative instruments for hedging purposes, not for speculative or trading purposes. Our use of derivative instruments is subject to strict internal controls based on centrally defined, performed and controlled policies and procedures. Depending on the terms of the specific derivative instruments and market conditions, some of our derivative instruments may be assets and others liabilities at any particular point in time. As required by FASB ASC 815, Derivatives and Hedging, we report all of our derivative instruments at fair value on our balance sheet. Depending on the substance of the hedging purpose for our derivative instruments, we account for changes in the fair value of some of them using cash-flow-hedge accounting pursuant to ASC 815 and of others by recording the changes in fair value directly to current earnings (so-called economic hedges). These accounting approaches and the various classes of risk that we are exposed to in our business and the risk management systems using derivative instruments that we apply to these risks are described below. See Note 10 to our condensed consolidated financial statements for information about the techniques we use to measure the fair value of our derivative instruments. The following table presents the fair values of derivative instruments included in our condensed consolidated balance sheet as of September26, 2009 (in thousands): September 26, 2009 Other Other Other Assets - Other Assets Liabilities - Liabilities - Current - Noncurrent Current Noncurrent Derivatives designated as hedging instruments under ASC 815: Foreign exchange forward contracts $ $ $ 51,155 $ 815 Interest rate swap contracts 90 1,014 Total derivatives designated as hedging instruments $ $ $ 51,245 $ 1,829 Derivatives not designated as hedging instruments under ASC 815: Foreign exchange forward contracts $ 8,727 $ $ 5,828 $ Total derivatives not designated as hedging instruments $ 8,727 $ $ 5,828 $ Total derivative instruments $ 8,727 $ $ 57,073 $ 1,829 The following tables present the amounts related to derivative instruments affecting our condensed consolidated statement of operations for the three and nine months ended September26, 2009 (in thousands): Location of Amount of Gain (Loss) Gain (Loss) Amount of Gain (Loss) Recognized in Other Reclassified Reclas |
Fair Value Measurement
Fair Value Measurement | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Fair Value Measurement [Abstract] | |
Fair Value Measurement | Note 10. Fair Value Measurement On December30, 2007, the beginning of our 2008 fiscal year, we adopted ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands financial statement disclosure requirements for fair value measurements. Our initial adoption of ASC 820 was limited to our fair value measurements of financial assets and financial liabilities, as permitted by ASC 820. On December28, 2008, the beginning of our fiscal year 2009, we adopted ASC 820 for the remainder of our fair value measurements. The implementation of the fair value measurement guidance of ASC 820 did not result in any material changes to the carrying values of our assets and liabilities. ASC 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) on the measurement date in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. ASC 820 specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows: Level 1 Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. Level 2 Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. Level 3 Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect our own assumptions about the assumptions that market participants would use in pricing an asset or liability. When available, we use quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, we measure fair value using valuation techniques that use, when possible, current market-based or independently-sourced market parameters, such as interest rates and currency rates. Following is a description of the valuation techniques that we use to measure the fair value of assets and liabilities that we measure and report at fair value on a recurring or one-time basis: Cash equivalents. At September26, 2009, our cash equivalents consisted of money market mutual funds. We value our cash equivalents using observable inputs that reflect quoted prices for securities with identical characteristics, and accordingly, we classify the valuation techniques that use these inputs as Level 1. Marketable securities. At Sept |
Related Party Transactions
Related Party Transactions | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 11. Related Party Transactions In October2008, we made an investment, at a total cost of $25.0million, in the preferred stock of a company based in the United States that supplies solar power plants to commercial and residential customers. This investment represents an ownership of approximately 12% of the voting interest in this company at September26, 2009 and is our only equity interest in that entity. Since our ownership interest in this company is less than 20% and we do not have significant influence over it, we account for this investment using the cost method. In the fourth fiscal quarter of 2008, we also entered into a long-term solar module supply agreement with this related party. During the three and nine months ended September26, 2009, we recognized $4.0million and $8.2million, respectively, in net sales to this related party. At September26, 2009 we had accounts receivable from this related party of $2.6million. |
Notes Receivable
Notes Receivable | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Notes Receivable [Abstract] | |
Notes Receivable | Note 12. Notes Receivable On April8, 2009 we entered into a credit facility agreement with a solar project entity of one of our customers for an available amount of 17.5million ($25.7million at the balance sheet close rate on September26, 2009 of $1.47/1.00) to provide financing for a photovoltaic power generation facility. The credit facility replaced a bridge loan that we had made to this customer. The credit facility bears interest at 8% per annum and is due on December31, 2026. As of September 26, 2009, this credit facility was fully drawn. The outstanding amount of this credit facility has been included within Other assets noncurrent on our condensed consolidated balance sheets. On April21, 2009, we entered into a revolving VAT financing facility agreement for an available amount of 9.0million ($13.2million at the balance sheet close rate on September26, 2009 of $1.47/1.00) with the same solar project entity with whom we entered into the credit facility agreement on April8, 2009. The VAT facility agreement pre-finances the amounts of German value added tax (VAT)and any other tax obligations of similar nature during the construction phase of the photovoltaic power generation facility. Borrowings under this facility are short- term in nature, since the facility is repaid when VAT amounts are reimbursed by the government. The VAT facility agreement bears interest at the rate of Euribor plus 1.2% and matures on December31, 2010. As of September26, 2009 the balance on this credit facility was 5.8million ($8.5million at the balance sheet close rate on September26, 2009 of $1.47/1.00). The outstanding amount of this credit facility is included within Prepaid expenses and other current assets on our condensed consolidated balance sheets. On June30, 2009, the available amount under the VAT facility agreement was increased to 15.0 million ($22.1million at the balance sheet close rate on September26, 2009 of $1.47/1.00). This increase was only temporary and the amounts available under the facility reverted back to the original amounts on August31, 2009. |
Debt
Debt | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Debt [Abstract] | |
Debt | Note 13. Debt Our long-term debt at September26, 2009 and December27, 2008 consisted of the following (in thousands): September 26, December 27, Type 2009 2008 Malaysian Facility Agreement Fixed rate term loan $ 92,786 $ 66,975 Malaysian Facility Agreement Floating rate term loan (1) 92,786 66,975 Director of Development of the State of Ohio 10,280 11,694 Director of Development of the State of Ohio 417 1,528 German Facility Agreement 54,982 Capital lease obligations 2 5 196,271 202,159 Less unamortized discount (3,782 ) (3,689 ) Total long-term debt 192,489 198,470 Less current portion (29,169 ) (34,951 ) Noncurrent portion $ 163,320 $ 163,519 (1) We entered into an interest rate swap contract related to this loan. See Note 9 to our condensed consolidated financial statements. We did not have any short-term debt at September26, 2009 and December27, 2008. Revolving Credit Facility On September4, 2009, we entered into a revolving credit facility pursuant to a Credit Agreement among First Solar, Inc., certain designated Borrowing Subsidiaries (consisting of First Solar Manufacturing GmbH, a German subsidiary, and other subsidiaries of our Company who may in the future be designated as borrowers pursuant to the Credit Agreement) and several lenders. JPMorgan Chase Bank, N.A. and Bank of America served as Joint-Lead Arrangers and Bookrunners, with JPMorgan also acting as Administrative Agent. The Credit Agreement provides First Solar, Inc. and the Borrowing Subsidiaries with a senior secured three-year revolving credit facility in an aggregate available amount of $300.0 million, a portion of which is available for letters of credit and swingline loans. Subject to certain conditions, we have the right to request an increase in the aggregate commitments under the Credit Facility up to $400.0million. In connection with the Credit Agreement, we also entered into a guarantee and collateral agreement and foreign security agreements. Borrowings under the Credit Agreement currently bear interest at (i)LIBOR (adjusted for eurocurrency reserve requirements) plus a margin of 2.75% or (ii)a base rate as defined in the Credit Agreement plus a margin of 1.75%, depending on the type of borrowing requested by us. These margins are subject to adjustments depending on the Companys consolidated leverage ratio and the credit rating of the facility provided by Moodys Investors Service, Inc. and Standard and Poors Rating Services. At September26, 2009, we had no borrowings outstanding and $14.0million in letters of credit drawn on the revolving credit facility, leaving approximately $286.0million in capacity available under the revolving credit facility, $61.0million of which may be used for letters of credit. As of this date, based on the indices, the all-in effective three months LIBOR borrowing rate was 3.51%. In addition to paying interest on outstanding principal under the Credit Agreement, we are re |
Commitments and Contingencies
Commitments and Contingencies | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 14. Commitments and Contingencies Financial guarantees In the normal course of business, we occasionally enter into agreements with third parties under which we guarantee the performance of our subsidiaries related to certain service contracts, which may include services such as development, engineering, procurement of permits and equipment, construction management and monitoring and maintenance. These agreements meet the definition of a guarantee according to ASC 460, Guarantees. As of September26, 2009, none of these guarantees were material to our financial position. Loan guarantees In connection with the Malaysian Facility Agreement, First Solar, Inc. entered into a first demand guaranty agreement dated May6, 2008 in favor of IKB, NZD, NLB and the other lenders under the Malaysian Facility Agreement. FS Malaysias obligations related to the Malaysian Facility Agreement are guaranteed, on an unsecured basis, by First Solar Inc. pursuant to this guaranty agreement. See Note 13 to our condensed consolidated financial statements for additional information. In connection with the revolving credit facility, we entered into a guarantee and collateral agreement and various foreign security agreements. Loans made to First Solar Manufacturing GmbH (a borrowing subsidiary under the credit facility) are (i)guaranteed by First Solar, Inc. pursuant to the guarantee and collateral agreement, (ii)guaranteed by certain of First Solar, Inc.s direct and indirect subsidiaries organized under the laws of Germany, pursuant to a German guarantee agreement, (iii)secured by share pledge agreements, (iv)secured by a security interest in intercompany receivables held by First Solar Holdings GmbH, First Solar GmbH, and First Solar Manufacturing GmbH, pursuant to assignment agreements and (v)subject to a security trust agreement, which sets forth additional terms regarding the foregoing Germany security documents and arrangements. See Note 13 to our condensed consolidated financial statements for additional information. Commercial commitments During the three months ended September26, 2009, we entered into two commercial commitments in the form of letters of credit related to our solar power systems and project development business in the amount of $5.5million. We also increased two of our previously held bank guarantees for energy supply agreements by MYR 5.6million ($1.6million at the balance sheet close rate on September26, 2009 of $0.29/MYR1.00), for a total commitment of MYR 11.8million ($3.4 million at the balance sheet close rate on September26, 2009 of $0.29/MYR1.00). As of September 26, 2009, we had the following additional four outstanding commercial commitments: MYR 3.0million dated September2008 for Malaysian custom and excise tax ($0.9million at the balance sheet close rate on September26, 2009 of $0.29/MYR1.00) and three letters of credit related to our solar power systems and project development business in the aggregate, amount of $4.2million. Product warranties We offer warranties on our products and record an estimate of the associated liability based on the following: number of solar modules under warranty at cus |
Share Based Compensation
Share Based Compensation | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | Note 15. Share-Based Compensation We measure share-based compensation cost at the grant date based on the fair value of the award and recognize this cost as an expense over the grant recipients requisite service periods, in accordance with ASC 718, Compensation-Stock Compensation. The share-based compensation expense that we recognized in our consolidated statements of operations for the three and nine months ended September26, 2009 and September27, 2008 was as follows (in thousands): Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, 2009 2008 2009 2008 Share-based compensation expense included in: Cost of sales $ 4,333 $ 3,776 $ 10,835 $ 9,146 Research and development 2,254 1,688 6,173 4,154 Selling, general and administrative 15,263 11,289 36,991 28,968 Production start-up 337 558 1,129 1,359 Total share-based compensation expense $ 22,187 $ 17,311 $ 55,128 $ 43,627 The increase in share-based compensation expense was primarily the result of new awards. The following table presents our share-based compensation expense by type of award for the three and nine months ended September26, 2009 and September27, 2008 (in thousands): Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, 2009 2008 2009 2008 Stock options $ 1,627 $ 3,819 $ 5,435 $ 13,554 Restricted stock units 21,024 13,564 51,265 30,009 Unrestricted stock 113 81 338 244 Net amount absorbed into inventory (577 ) (153 ) (1,910 ) (180 ) Total share-based compensation expense $ 22,187 $ 17,311 $ 55,128 $ 43,627 Share-based compensation cost capitalized in our inventory was $2.3million and $0.3million at September26, 2009 and December27, 2008, respectively. As of September26, 2009, we had $8.6 million of unrecognized share-based compensation cost related to unvested stock option awards, which we expect to recognize as an expense over a weighted-average period of approximately 1.0 year, and $134.1million of unrecognized share-based compensation cost related to unvested restricted stock units, which we expect to recognize as an expense over a weighted-average period of approximately 2.1years. |
Income Taxes
Income Taxes | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Income Tax [Abstract] | |
Income Taxes | Note 16. Income Taxes Our Malaysian subsidiary has been granted a tax holiday for a period of 16.5years, which was originally scheduled to commence on January1, 2009. The tax holiday, which generally provides for a 100% exemption from Malaysian income tax, is conditional upon our continued compliance in meeting certain employment and investment thresholds. On January9, 2009, we received formal approval granting our request to pull forward this previously approved tax holiday by one year; the result of which was an $11.5million reduction in the amount of income taxes previously accrued for the year ended December27, 2008. As a result, we recognized an income tax benefit of $11.5million during the three months ended March28, 2009. We recognized tax expense of $11.6million and $37.5million for the three and nine months ended September26, 2009, respectively. Our effective tax rate was 7.0% for both the three and nine months ended September26, 2009. Without the $11.5million tax benefit discussed above our effective tax rate would have been 9.1% for the nine months ended September26, 2009. Without the beneficial impact of the Malaysian tax holiday on 2009 operations our effective tax rate would have been 25.1% for the nine months ended September26, 2009. The provision for income taxes differs from the amount computed by applying the statutory U.S. federal rate primarily due to the benefit associated with foreign income taxed at lower rates and the beneficial impact of the Malaysian tax holiday. |
Net Income per Share
Net Income per Share | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Net Income per Share [Abstract] | |
Net Income per Share | Note 17. Net Income per Share Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted net income per share is computed giving effect to all potential dilutive common stock, including employee stock options and restricted stock units. The calculation of basic and diluted net income per share for the three and nine months ended September26, 2009 and September27, 2008 was as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, 2009 2008 2009 2008 Basic net income per share Numerator: Net income $ 153,344 $ 99,269 $ 498,518 $ 215,559 Denominator: Weighted-average common shares outstanding 84,179 80,430 83,196 79,789 Diluted net income per share Denominator: Weighted-average common shares outstanding 84,179 80,430 83,196 79,789 Effect of stock options , restricted stock units outstanding and contingent issuable shares 1,713 2,006 1,528 2,227 Weighted-average shares used in computing diluted net income per share 85,892 82,436 84,724 82,016 Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, 2009 2008 2009 2008 Per share information basic: Net income per share $ 1.82 $ 1.23 $ 5.99 $ 2.70 Per share information diluted Net income per share $ 1.79 $ 1.20 $ 5.88 $ 2.63 The following number of outstanding employee stock options and restricted stock units were excluded from the computation of diluted net income per share for the three and nine months ended September26, 2009 and September27, 2008 as they would have had an antidilutive effect (in thousands): Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, 2009 2008 2009 2008 Restricted stock units and options to purchase common stock 188 108 203 113 |
Comprehensive Income
Comprehensive Income (Loss) | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Comprehensive Income (Loss) [Abstract] | |
Comprehensive Income (Loss) | Note 18. Comprehensive Income (Loss) Comprehensive income, which includes foreign currency translation adjustments, unrealized gains and losses on derivative instruments designated and qualifying as cash flow hedges and unrealized gains and losses on available-for-sale securities, the impact of which has been excluded from net income and reflected as components of stockholders equity, was as follows (in thousands): Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, 2009 2008 2009 2008 Net income $ 153,344 $ 99,269 $ 498,518 $ 215,559 Foreign currency translation adjustments 16,995 (16,010 ) 22,008 (6,567 ) Change in unrealized gain (loss)on marketable securities, net of tax of $(468) and $(543) for the three and nine months ended September26, 2009, respectively 1,848 (134 ) 2,219 (149 ) Change in unrealized gain (loss)on derivative instruments, net of tax of $0 and $(65) for the three and nine months ended September26, 2009, respectively (10,133 ) 34,012 (36,215 ) 14,155 Comprehensive income 162,054 $ 117,137 486,530 $ 222,998 Components of accumulated other comprehensive loss were as follows (in thousands): September 26, December 27, 2009 2008 Foreign currency translation adjustments $ 14,183 $ (7,825 ) Unrealized gain on marketable securities, net of tax expense of $687 for 2009 and $144 for 2008 2,481 262 Unrealized loss on derivative instruments, net of tax benefit of $0 for 2009 and $65 for 2008 (53,073 ) (16,858 ) Accumulated other comprehensive loss $ (36,409 ) $ (24,421 ) |
Statement of Cash Flows
Statement of Cash Flows | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Statement of Cash Flows [Abstract] | |
Statement of Cash Flows | Note 19. Statement of Cash Flows The following table presents a reconciliation of net income to net cash provided by operating activities for the nine months ended September26, 2009 and September27, 2008 (in thousands): Nine Months Ended September 26, September 27, 2009 2008 Net income $ 498,518 $ 215,559 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and amortization 90,720 38,667 Impairment of intangible assets 1,335 Share-based compensation 55,128 43,627 Remeasurement of monetary assets and liabilities 438 (318 ) Deferred income taxes (15,888 ) 930 Excess tax benefits from share-based compensation arrangements (9,476 ) (13,736 ) Loss on disposal of property and equipment 985 941 Provision for doubtful accounts receivable 3,990 36 Provision for inventory reserve 5,689 1,540 Gain on sales of investments, net (7 ) (191 ) Changes in operating assets and liabilities: Accounts receivable (271,119 ) (23,705 ) Inventories (71,184 ) (87,743 ) Project assets (50,398 ) Deferred project costs (2,747 ) (6,436 ) Prepaid expenses and other current assets 22,922 (20,138 ) Costs and estimated earnings in excess of billings 80 (8,538 ) Other assets (1,951 ) (3,239 ) Billings in excess of costs and estimated earnings (307 ) Accounts payable and accrued expenses 5,695 121,528 Total adjustments (237,123 ) 44,253 Net cash provided by operating activities $ 261,395 $ 259,812 |
Segment Reporting
Segment Reporting | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 20. Segment Reporting ASC 280, Segment Reporting, establishes standards for companies to report in their financial statements information about operating segments, products, services, geographic areas and major customers. The method of determining what information to report is based on the way that management organizes the operating segments within the company for making operating decisions and assessing financial performance. Our components segment, which is our principal business, involves the design, manufacture and sale of solar modules which convert sunlight to electricity. We sell our solar modules to sixteen principal customers with which we have long term supply contracts. These customers include project developers, system integrators and operators of renewable energy projects. Our systems segment consists of our solar power systems business, which includes solar power project development and deployment of our solar modules and balance of system components that we procure from third parties. We sell solar power systems directly to system owners. These sales may also include fully or partially developed land for building solar power systems using our technology, engineering, procurement of permits and equipment, construction management and monitoring and maintenance. We do not recognize revenue from intercompany sales by our components segments to our systems segment. Instead, the sale of our solar modules manufactured by the components segment and used for construction projects are included in net sales of our solar power systems and project development business. Our systems segment does not currently meet the quantitative criteria for disclosure as a separate reporting segment, and therefore, we classify it in the Other category in the following tables. Financial information about our segments was as follows (in thousands): Three Months Ended Three Months Ended September 26, 2009 September 27, 2008 Components Other Total Components Other Total Net sales $ 480,351 $ 500 $ 480,851 $ 333,085 $ 15,609 $ 348,694 Income (loss)before income taxes $ 172,499 $ (7,532 ) $ 164,967 $ 138,195 $ (5,096 ) $ 133,099 Goodwill $ 248,765 $ 35,240 $ 284,005 $ $ 33,829 $ 33,829 Assets $ 2,849,344 $ 245,728 $ 3,095,072 $ 1,797,119 $ 62,731 $ 1,859,850 Nine Months Ended Nine Months Ended September 26, 2009 September 27, 2008 Components Other Total Components Other Total Net sales $ 1,413,880 $ 11,055 $ 1,424,935 $ 792,049 $ 20,601 $ 812,650 Income (loss)before income taxes $ 553,797 $ (17,800 ) $ 535,997 $ 305,201 $ (13,037 ) $ 292,164 Goodwill $ 248,765 $ 35,240 $ 284,005 $ $ 33,829 $ 33,829 Assets $ 2,849,344 $ 245,728 $ 3,095,072 $ 1,797,119 $ 62,731 $ 1,859,850 |
Subsequent Events
Subsequent Events | |
9 Months Ended
Sep. 26, 2009 USD / shares | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 21. Subsequent Events We have evaluated subsequent events through October29, 2009, the date that these financial statements were issued. On September3, 2009, we announced the appointment of Robert J. Gillette as Chief Executive Officer, and as a member of the Board of Directors, both appointments effective October1, 2009. Mr.Gillette succeeded Michael J. Ahearn as our Chief Executive Officer. Subsequent to September26, 2009, Mr.Gillette was granted pursuant to his employment agreement (i)fully vested First Solar shares having an aggregate fair market value on the date of grant equal to $3,250,000; (ii)fully vested First Solar stock options having an aggregate Black-Scholes value on the date of grant equal to $3,250,000; and (iii)restricted stock units having an aggregate fair market value on the date of grant equal to $6,500,000 and subject to cliff-vesting on the second anniversary of the date of grant, with no early acceleration triggers other than change in control. In addition, Mr.Gillette was paid pursuant to his employment agreement 50% of his $5,000,000 sign-on bonus in cash shortly following his start date, with the other 50% to be paid in cash on the first anniversary of Mr.Gillettes first day of employment with First Solar, regardless of whether Mr.Gillette remains employed with First Solar through such date. |