SPWR - Earnings call transcript Q4 2017

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Operator

Thank you for standing by, and welcome to SunPower's Fourth Quarter Earnings Call. At this time, all participants will be on a listen-only mode until the question-and-answer portion. Today's call is being recorded.

If you have any objections, you may disconnect at this time.

Now, may I introduce your speaker for today, Bob Okunski, Vice President of Investor Relations of SunPower. ahead. go Please

Bob Okunski

I'd quarter Gilly. welcome to everyone Thank earnings like conference fourth XXXX call. our you, to

On the CEO call operational today, financial will we will start quarter fourth review Boynton, CFO, XXXX Tom review Chuck our and off from Werner, by our followed results. our who strategic with an

this As Relations website. our page of be later call reminder, a replay today available of will a on Investor the

PowerPoint forward-looking statements in that uncertainties call, During To this Safe this are as have Form to detailing quarterly documents make today's information those those our statements. call, today's and same described that, of we over reports like supplemental posted for see reference various release, XX-K on set page on SunPower, I'd well. Relations a the begin slides, regarding to of enhance location, that Tom? slide factors forward-looking website. call are which press turn will also slide of our the historical these we will who & to CEO metrics In of Harbor risks the of call, on today's our Werner, Presentations have will may Investor and that posted Please we X. during additional Tom the subject With a we presentation, XX-Q. some Events datasheet XXXX our affect

Thomas H. Werner

generation expense XXX our In position, QX will plant also posted progress we our on and X us. channels. to our business. well our than year-on-year. and with solid key quarter trade of and turn year in retrofit Section in residential while strong number remained review exceeded XX% cash saw our thank against U.S., segment and one EBITDA targets, power we across board. on will New exceeded initiatives. this bookings and our review DG QX record U.S. financial business fourth strategic initial a provide results the I for Bob, structure residential full share our share I'll slide the the solid solidified performance we bookings by We QX now our deployments for Thanks, execution you meeting XXXX, executed milestones reduced all case. our thoughts market Please both joining business. report stable business performance to across and performance. ASPs market gained was We the our for XXXX the targets. call, our our Homes in quarter. markets and move and more on QX during In strong On segment

QX performance, our U.S., markets and Japan we the remains the Given plan the we as pricing are we beat Outside in U.S. in in both again now favorable. residential and market. both Europe leader demanded believe

recently in plan with the of discussed XpointX have $XXX and We sale. assets to the more the past expected proceeds sale monetize ownership announced million of our resulting our from in dollars than stake

and in half are this we year. process in monetizing transaction hope portfolio addition, this to our first lease In the of of close the

than from more our simplify growth And $XXX combined statements. in will in generate million these financial $XXX more transaction We proceeds of and expect balance million the to this areas fund delever cash. sheet, transactions than

our we residential XXXX. growth Looking all expect in forward, of continued markets during

I our on Moving commercial provide an on industry-leading X, update to to like slide would business.

commercial commercial executed project completed well quarter, us. and for QX largest remains core to-date. behind-the-meter project, Air Vandenberg a record our with We As we installation Force market our during discussed segment volume last XX-megawatt

in posted we year, the XX% deployed For megawatts. growth

and direct be years focusing with the well a continue deliver PV. commercial weeks, purpose-built of battery our over commercial in offering savings storage we to is projects, kind storage. of of is maximum investment product interest in in positioned coming our Helix strong see will in family, newest we customers. first approximately X launching PV offering manage In software to guaranteed past to its the are this our Additionally, particularly Helix solutions. battery experienced our create deploying solar-plus-storage the to Helix solar-plus-storage our bill of development and the on flexible we expertise to Also, result storage control gigawatt new This footprint. two product platform to leverage expanding co-optimization

with the completed storage a X-megawatt Arsenal battery. system For Redstone recently X-megawatt-hour a project incorporated example, storage capacity, XX-megawatt

attached. pipeline our totals commercial now of storage pipeline approximately storage million. already has Additionally, $XX XX% projects high-margin And our of Helix

Helix into We our additional software platform the the Equinox the it storage development. also product have opportunity to deploying residential minimal addressable our market we for by developed expand with

expect residential market transition U.S. products solar-plus-storage quarters. see the rapid financial a to over for in to We coming the viability

we commercial this solid about year. are XXXX a are or of again than positioned in pipeline of $X.X the awarded, more approximately forward, market Going billion, plan booked share we to increase bullish with our commercial our already XX% well

business. and turn slide Solutions review let's plant Please power to our Now X. SunPower

growth to continue strong business. We in SunPower Solutions our equipment see

team the For XXXX full more megawatts to Also, example, We our were well. DG the Bookings now gigawatt. including X than to recent XXX% to tender. XXX first executed close in (XX:XX) year-on-year. of up volume megawatts, has for power double exceed deployments this BU, awarded new most XXX plan plant projects year again French in in

sold operation Chile. commercial quarter, we during XXX-megawatt the project project and reached and completed Gala Pelicano XX-megawatt El Our in the

we development SunPower ramping Looking Solutions power plant will transition while our from forward, away global to further business. continue

with Fab In annualized an Please fab X. achieved turn X targets particular, XX% Moving capacity. overall technology. OEE outperformed on our again upstream rate above We nameplate to production the yield output and to to and the record slide for quarter.

our last IBC aggressively discussed we we next technology. quarter, generation As developing are

and started roadmap, plan full-scale X. first are install tools We in with recently on our our for to Fab line

on Jose already of volume as and pilot efficient and producing a We results is ahead world-record improvement preserves our Initial we significantly expect QX in technology in in are NGT reduced costs. productions San starting durability XX% our panels. QX. IBC with plan in first significant silicon it line NGT efficiency attributes are

expect profit a driver growth to We NGT the SunPower be in coming major for years.

is X. ruling. tariffs. Trump it if put recent signed important this therefore coming our and specific exempt on turn like includes part provisions cells was these On modules XXX that to process into of companies will tariffs that slide President produced to that Now, declaration exclusions the comment successful Please U.S. allow An earlier the to all announced proclamation products request from product the foreign XX, the today. This on January I'd

that the can research further that copper-plated, cell market a to and continue will improve exclusion, invest through convey product We are on exclusion SunPower projects America's and work interdigitated while with can development have SunPower with delayed certain in already only make contact Administration solar and to to the process other XXXX its efficiency energy leading made demonstrating from the seeing performance, leadership a impact ruling innovation. near-term negative and increased costs import as Unfortunately, projects in we uneconomical. the solar due tariffs continuing to back

our of following U.S. we performance. the planned are actions initiatives $XX and the cost the to million Additionally hold impact taking XXX. expansion In meantime, the considering meantime we financial overall and saving In significant put on have are improve to other employment expense our our also minimize structure lower

to inventory First, we generation of harbor safe U.S. have the significant built our in customers. support distributed a level up

operating institute across expenses we will Second, lower the initiatives company. materially additional our to further

have on provide a So reduced some far, implemented hiring update an and initiatives when and discretionary freeze we programs, we'll these have completed.

will Third, than both overseas and markets of global countries. business, our growth now key international more accelerate SunPower including we the XX DG business, Solutions our serving

plans capitalize industry that, policy potential growth like prepared and turn are we early stages our In our would on and formal program review Chuck? our sustained this simplify around volatility, not tremendous business overall call focus but next of summary, the to the structuring to to near-term liquidity time, power to and Despite our to profitability. review, challenges this our With to Given at opportunity. earnings over to Chuck focus solar or on on is return financials. for improve before business, this I discuss the the we'll see communicate our globe call. the we profitably

Charles D. Boynton

first back afternoon. to to and for discuss will our fourth I X. I slide and turn quarter Please our guidance. Thanks, Tom, financial certain review over the good quarter. Tom then call will the highlights for then results turn

our generation. We our the as met exceeded quarter or cash of we for most on our on are forecasts results pleased with focusing while metrics key

plan. growth line gross in was XX primarily and approximately residential our project commercial projects, of highest Overall, our our and XX% our Force non-GAAP We driven saw Vandenberg completed again X% consolidated XXX the sequential incremental our revenue freight Japan Non-GAAP successfully executed were ever We well margins residential margins megawatt growth and megawatt quarterly both segments. volume In segments. El and our and was Redstone Arsenal guidance project. onetime charges costs of implementation of improved X%, advance plan. negatively by In approximately segment, megawatt ahead power the sequentially by plant tariff strong our residential, approximately of sale operations margin in related commercial to with In and our strong Air non-GAAP including in as projects. power all Europe volume the margin and XX plant that our reduced by X%. and in in Pelicano revenue by due performance plants, margin commercial with impacted were completion sale execution of our Our we by was manufacturing power the line project. to

charges We with double were residential $XX of billion, payments sales commercial of year. any value. onetime line XX% for XX%, megawatts than more non-GAAP mix forecasts. we with cash our the segment in the onetime our In of were QX. excluding down million our shipments due XX% loan to for was mentioned project Net revenue million in while non-GAAP residential leased. the which in our quarter, charges. more resulting line was Non-GAAP Overall, The OpEx sequentially earlier, approximately during down contracted America, were Excluding lease XXX residual deployed or margins than renewal are $XXX and was globally and QX $X.X QX. products North margin XX% recognized

a and slide the capital. primarily was to for million strong highlights We at working completions, than XX. CapEx quarter generation had as efforts cash turn for $XXX I to few now our due like on a quarter in please project planned million. Finally, control to quarter, cash better the focus financial expense very came $XX would year-end discuss

through week past, to plan had the in on and stated progress to we transaction with happy currently more this We we on on Capital Dynamics of as acquire announce balance sale cash our to more proposed divestitures. generate made sheet, asset recent In our potential our with of sale significant addition, I XpointX shortly. In pay XpointX pending leases the were to level, our and our believe well in cash like Please to the of to to touch given would we our on lease XpointX. slide it off to turn are we monetization timber XX. announcement portfolio. relation positioned current cash our sell stake ownership (XX:XX), last

to key of including contacting As than this, Tom part was and our efforts important is the proceeds fund transaction we accrued It's process, explain shareholders. and transaction. with From that an potential close this best I competitive The to and initiatives. point confident that million a with $XXX sheet estimated This our mentioned, few Dynamics Dynamics had that acquisitions, we agreement renewable monetize Capital also of balance an delever review after offer to committed all distributions. Capital on assets, our our accounting with financing want is partners, more result comprehensive track all growth transaction they a the more XXX perspective, felt plus overall proven overall for and can than are all-cash points. record of out this

to last real projects of estate years, sale were the few to XpointX fully Over due never recognized accounting. the

book our value current negative million. for is $XX such, As XpointX a

the receive net we of cash With and we the from sale. the the will and will with recognition adoption ultimately sale, improve the standard equity position new reflect revenue significantly our that

As P&L. the of this not because through a will reminder, the gain treatment, flow

fund the the Moving areas we simplify of portfolio, financials to of the sell growth. In sheet on to balance plan to turn leasing delever and the sale our please company, to of and assets our transformation slide XX.

we result, lease to portfolio. made As our have the a sell decision

sale of as the us high the assets in quality expect these as net portfolio, indications million to the interest we have cash. performance $XXX already Given strong of well approximately received the of and

balance of customers megawatts of the leases cash while of currently a a equity we residential for holds in XX,XXX GAAP the it $XXX million. In once standard sell, deconsolidation in impairment. than now sale company advantage XXX evaluation flows. evaluation the and minority now be a The will of presentation residual portfolio. GAAP potential decision and deconsolidate these leases operating of lease cleaner impairment, balance is retaining representing P&L the these resulted assets driven an primarily plus the along which impairment statement However, margin to presentation of intend discount triggered ongoing value This income leases the the flows. the with relation $X.X use non-cash cash accounting rate sheet. charge with to the very to portfolio sheet through net long-term is that the low interest on a made We it value by revenue, approximately to more rules a close through implicit billion The of to

been portfolio consumer we our to impairment As have we and have the process of sale would an assets. the We if not discount to maturity have consistent applied indicative analysis, received. believe part these rate the market we bids long-term impairment a there held to receivables with

expect also with the We charges placed GAAP-only long-term. SunPower second will and our leases to the QX, reflecting are this of believe to financial areas the made simplify impairment back balance sheet, summary, quarter growth that position I'll delever and additional possibly transaction. the the of performance of the the meaningful guidance. in our statements. fund in transformation to in cash, prior Tom? turn we the further progress that incur the company in we're transaction and call for Tom We service proposed In first close pleased our generate With that, for

Thomas H. Werner

our color now fiscal well quarter the year guidance like Chuck. on first as XXXX. some Thanks, I provide discuss as would to for

a reminder, in XXX XX. estimated for includes as impact slide As of QX well our the a whole. XXXX and ruling impact the seasonality turn of as to Section guidance QX as Please

loss as GAAP $XXX XXXX $XX of is revenue million net fiscal follows; to million negative million. of and $XXX of a X.X% margin $XXX quarter to First X.X% million, to guidance gross

as HoldCo the revenue $XXX million million $XXX of impact also the range related the deployed estate a guidance million million, to impact to charges in EBITDA restructuring of First GAAP non-GAAP On quarter expects X% well the of due to strategy, real initiatives. megawatts of XXXX and accounting of includes $X deferrals to company X%, revenue company's asset $XX timing margin company's the to XXX and the XXX basis, to megawatts of gross megawatts. as

For XXXX, please turn to slide XX.

gigawatt and billion to deployed fiscal is $X revenue on non-GAAP billion GAAP range $X.X $X.X X.X basis balance billion $XXX of for to company's of as of adjusted a guidance than the to questions. (sic) [operating] million the of non-GAAP for $XXX expect The to billion a With gigawatts operational basis in expenses for call X.X follows: that, EBITDA We $X.X on the gigawatt. with over of would expenditures year. year turn adjusted positive XXXX capital the approximately less I like year, million, and (XX:XX) EBITDA the

Operator

are Certainly. At now session. the this we time, question-and-answer for ready

Frank. Tyler comes Please question state from name. first company The your

Tyler Charles Frank

technology we of technology think XXXX about and specific on then well and ramping as you And discuss that can back the other Can NGT half your that in details Robert basis a how this out taking question. we competitive least in think maybe basis? give a on should maybe year And how volumes cost Baird. the as maybe Thank XXXX? to guys at about items us for are you, you there? if should

Thomas H. Werner

Werner. This Tyler. is Tom Sure,

that call, a something have about call the which we is call plan quite So earnings might technology on be or our in next our bit we next next-generation between. speaking a either on will

call. complete And answers give on more so, I to that expect

lines first speak. are being we as Our installed

year XXX. volume a we'll capacity we and expect low quarter, next be year over in make will silicon first of We this at the double-digits second

ramping that. next start we forecast earnest beyond year. prepared so to Not And in

now size the will And in going the what be call between not I'm we terms I (XX:XX) you the of First of down larger. In it in a in so same to process it's Solar, appreciate we will or down, earnings product better, more can other technologies and – we next that significantly. and cost, certainly of efficiency, the either cost that the between. like the equipment there call the simultaneously capital – or cost comparing number get of is now to there's said factors and do exactly – wafers

Tyler Charles Frank

And should can an and you. with Thank we us on of expect what there? provide you then P-Series Great. volumes update sort

Thomas H. Werner

Sure.

So venture a have by which currently P-Series in ramping is close capacity to our closer end ramping our megawatts. of in Mexicali which capacity, joint in hundred X a two of has several both is megawatts places, in gigawatts. significantly about the of Marco then year, XXX (XX:XX) And we'll capacity to the more X gigawatt, China, and

fast. quite India remind shift to and China, everyone, that countries like is ramping in it's other market be joint would places and that the markets So Asia. regional in other venture to and mostly that Chinese In to are

supply quite joint both in venture ramping China. well so And and demand are in the

Tyler Charles Frank

Thank Okay. you.

Operator

The Please name. next from comes state Lee. question your Brian company

Hank Elder

Hi. Sachs much is Brian. then of residential about debt that how and would the how or guys deconsolidated Hank you Can to talk the and sell? Elder Goldman clarify related if for you be on actually this assets much once is

Charles D. Boynton

Certainly. The $XXX other deconsolidate – intend Hank, is debt the that debt Thank million. and for you, about we'd liabilities question. to

Hank Elder

Got you leased residential look what build Would you up going do monetize and or then, then forward, to you it. would every And are assets? monetize to quarter? with going again

Charles D. Boynton

Yes.

effectively, do not So are our vendor strategy owner would the we the a of be model leasing to which lease. effectively

would partners be. of One our

be cash we'd a the be presentation a sale and lease, so, it P&L. originating and would And simpler much

origination. of cash leasing at the investor just the look leases of sales be would would an do partner our owner and time SunPower, like if So at looks those

Hank Elder

it. Got

you. hop queue. back I'll Thank Okay. the in

Charles D. Boynton

Thanks.

Thomas H. Werner

Hank. Thanks,

Operator

is Please from name. your Shah. The company state next Vishal question

Rachel Lei

our for for Thank you Vishal. taking Deutsche Bank. on questions. Hi. It's Rachel

you in your going some Can color us segment the plant question give margin First on expectations that? power forward. is about

Thomas H. Werner

Sure. This is Tom.

I remarks, SunPower in as significantly my converting segment So the mentioned Solutions. power plant prepared to is

And the quite market think solutions low-OpEx are business and be a plus there's so on my plant range, low power we or high-single business. digits, complete I OpEx and comment with of, selling is a going that therefore, what the high-volume, very associated can is to to minus, that's think but margin

Rachel Lei

follow-up Okay. two on – segments, would be margin residential commercial. your other just Great. and A the

of a what's the so of we forward? a So little kind decrease bit this outlook going see quarter,

Charles D. Boynton

some by Thank in you, Margins upstream Rachel. Chuck. is This QX items. impacted were one-time

characterize I'd longer items. adjusting we low-XX%s residential, mid-XX%s, I continue we should strong those so, cases, In for be And believe to term, think after still had low-XX%s. QX overall have margins in those some fairly and to over And been time. consistent in it

we volatility we about believe to the is residential little low-teens the will tied those type projects, as high think so transaction, a to And QX commercial of see in noticed Commercial, on But bit there's but was believe, margins based of be teens. volatility we margins. mix year, of and double consistent. there some size volume And commercial of this QX. strong some you'll almost you as

Rachel Lei

you. it That's for me. Thank Great.

Thomas H. Werner

Thanks, Rachel.

Operator

is question next from your Please company state name. Jerimiah The Booream.

Jerimiah Booream

afternoon. the able Yeah. Good we when or Hey. an a there today be is do XXX delve little to a to said the I negotiations timeline you Hi. try exactly, process the or is into basically What Could that think you'd Lynch. announced timeline? just exemption. to It's Merrill get you here? bit

Thomas H. Werner

Yeah.

have in to and make described it's comments, Registrar. file criteria the exclusion XX that includes chain, published United for public will days industry parts timeline, and the can is And decision. and R&D. the it including product they on days on if process necessary other So, which And The Federal product the includes criteria domestic XX also into Rep impact that exclusion the then then a Office people criteria the market. of the chain, for include the supply States make all product Trade domestic U.S. process the you for the and supply impact the

other U.S. uniquely ones and the make is America. expenditure can As the We're describe largest of company criteria who tied we the a the only differentiated. one perhaps And R&D market number SunPower I are with in criteria, the described largest It world, therefore is those investor our and in what really fits excellently. huge product. those

So far what we've read a that good so for we're suggests We'll see. fit exclusion.

your XX the go to the process and and have is We to XX. answer question through

Jerimiah Booream

And to immediately then they decision after or just be it's that, clear? unknown give the

Thomas H. Werner

And in act to depends There is not the pretty that way, believe be It by people and on exists, the efficient. expect DOE, and with reason committee volume it's they discussions a to in are to there's USTR, so it our a of be Commerce. committee a the defined timeline. will But they place, promptly USTR, that accurate; receive. and

Jerimiah Booream

one between Got asset selling gap it. unrelated Can just of the value? and you the question. million And like are $XXX those the billion me other then value the leased help just you Are $X.X bridge entire comparable, portfolio? of

Charles D. Boynton

billion $X.X construction, as leases placed contracts, construction, those in that placed the the in not service. The but $X.X those are billion started are that countersigned including in not yet service but ones in in of total are So placed XX/XX. that then that contracted are are and service, are

how And they're that's of about is those placed tax billion overall and before what are $X.X in materials we're of impairment, payments, exact equity. of chart in representing terms we what for and supplemental the impairment provided that the shows selling in after you then corresponding what as much liabilities a and in terms the And balance back-leverage those XX/XX. talking the on service terms of of that contracted we're and asset the in sheet value, books are the so,

Jerimiah Booream

Got it. much. Thank you very

Thomas H. Werner

Jerimiah. Thanks,

Operator

rate thanks, company Weinstein. Weinstein from your the and the The LLC after next Suisse, portfolio my Credit for Michael you taking for Securities question the monetization? question. Hi. EBITDA - Mike (USA) Suisse talk run residential Can Credit name. guys, is about Please state

Charles D. Boynton

question, for Certainly. Thanks Mike. the

the franchise I'll two-thirds what's Europe, after In sales, are sales one-third expect the no a strong those Europe, just loan. a are profile and we then in again business cash roughly in North across in of our and We you are There's the in U.S., change. Japan And America. remind residential. to cash sales. maintain Japan, residential So EBITDA very strong transaction. had

what into So, cash and change. to a see roughly consistent lease you'll will one-third be sales with sales transition where turn margins expect is the loan we that

Now, have Michael the Securities treatment NCI GAAP Credit flows. balance a of sale cash - upfront presentation (USA) Suisse LLC similar bit expecting? We we'll cleaner won't Weinstein be P&L then So, what and sheet EBITDA and statement a you're simpler. will quite have have you'll basically is and

Charles D. Boynton

- harbor megawatts Weinstein (USA) of Okay. how Suisse Michael as many safe many indicated? modules Yes. Credit Securities you are LLC how quarters And or

Thomas H. Werner

So, would the anywhere a have depends we mix three-and-a-half SKU. you also - XXXX out for months. Credit is, – it to supply-demand last of But Weinstein LLC what's modules, to And that? so (USA) they on and And on low. looked it yeah, depends matching. you from to I say it's Michael that Securities or gross that one extrapolated question pretty quarter, Suisse margins driving the Is first Okay. presented six

Charles D. Boynton

a QX. there's number So, of factors in

you QX like primary it's is XXXX looks where low-volume And It effectively a volumes. lower lot quarter. so a of the have one

of So, the overhead is smaller base into absorbed a revenue.

key plus safe Weinstein - we've for you looking a margin Suisse that's for kind in month harbor XXX gross Securities Michael LLC charges January. to XXXX of so incurred percent (USA) Credit the are And of guidance? factor, at materials What additional logistics

Charles D. Boynton

Michael do LLC QX the guided at haven't or right. year very All we'll next much. Credit either (USA) call. Suisse earnings full Securities that Got and - you. Thank We our XXXX, call you Weinstein on

Thomas H. Werner

Michael. Thanks,

Operator

Molchanov. Pavel from is question next The

now open. is line Your

Pavel S. Molchanov

at the in to but fabs pointed tariff-related for question. of some remarked release, In press also you the running on capacity, taking headwinds XXX% your U.S. of Thanks the you the

Is or where So, product all utilization? is that's it the going is the primarily driving it U.S. to going? the international XXX%

Thomas H. Werner

very thank much for question. the Pavel, you

we to answer more in product a over predominantly, markets, the to the have markets. to biasing the that U.S. harbor, degree frankly, international So, or to order is safe non-U.S. international were

we'll process to up think so exclusion the plan be of now, pay And important that the can business run, expect continue Otherwise, DG is U.S., from that our succeed tariff. world. that's long. And non-U.S. will We our parts have other in in which I'd to the long the we say Because prepared. we in are ship through indicated. that we we're to locations manage case, timeframe is in catching to don't and on so into to our we have the

Pavel S. Molchanov

then to revenue. I will increase And tariff? of top-line know say because your that the international mix of secondly, you to don't is year-over-year geographic guide But it Okay. safe the component

Thomas H. Werner

we have self-developed is to thing little power The yes. power-plant-driven, be been of a we very careful that bit historically have say plants. I'd

example, we so For really percentages. the El Pelicano closed that and in QX, increase can

If large answer and out the the driven the you took is business. SunPower particularly yes projects, by Solutions then

Pavel S. Molchanov

Okay. it. Appreciate

Operator

Please next your is state company from Colin The Rusch. question name.

Colin Rusch

missed portfolio you Guys, can assumptions us Co. at you're IRR it Oppenheimer now in delta? unlevered & maybe why but I where is terms and here, were on you lease large give the of delta the and this at where there such a

Charles D. Boynton

way, charge And by in numbers, would lease implicit to tell I specific driven the low lease you're cash, And you accounting. down effectively residual via putting referring are all two. accounting, a very discount you And rate when this you're value. that plus burned lease you sheet then, effectively give GAAP the collect those you're the on is balance the and it but companies is assets you're effectively a long-term depreciation. the at offsetting can't I Colin. what do Sure, booking GAAP

time. portfolio much we We not would taking the XX rate we'll if equity for up or value residual years. we XX then so, the a able investment getting front. we're on consumer that discount over an cash transaction, been residual no receivable, minority receivables, run that this didn't the would a there that be for maintain to effectively will market and the value And monetize And have lease have sell, just ownership be the some position charge. on balance that as of sheet With

the think the And it's driven a a market structure. rate an by of discount versus rate the of change charge discount lease – But accounting. low so, implicit is we rate great on accounting discount really based

Colin Rusch

on micro-inverter AC Great. how is integrated really that's just share percentage backlog be of if module? And breakdown within the helpful, about for in sales, terms your helpful. us is proven give the Obviously, but you next super energy a sticky could solution home number with that the that the would market the I product for you guess storage then and residential question guys

Thomas H. Werner

Yeah.

from So the in the the And part the mounting our chip Equinox buying system we're the plus Equinox, dealers and of module. Equinox micro-inverter plus high-XXs in is solutions terms of micro-inverter is us.

attach going that what and we're includes solution accurately, our storage for Equinox it to we're more storage Helix Helix yet. we what rate does our forward. now, the storage into included number high. The is has is rapidly. include So project pipeline in of into low quite commercial And very not quite equivalent called ramp residential is – putting but – the booking XX% pipeline

Colin Rusch

super Thanks, That's helpful. Great. guys.

Thomas H. Werner

to take it more one willing wrap then up. and We're Okay. we'll

Operator

next And Please is the company your state name. from Paul Coster. Certainly. question

Paul Coster

JPMorgan. Thanks question. for the taking

sure run to will not sale want just I So, will. make through statement, the XpointX understood I sale lease income but this. the The

the guidance full the for in it's XQ revenue So, or for year?

Charles D. Boynton

Yes.

Let not through P&L me lease either. the will explain the run sale

that lease on of when portfolio. in XXX, margin we the XXX would revenue an the will run sale the on adjusted sale or through new revenue if and flow the sale to recognition and correct. any kind not Because a would impairment you're effectively the through, standard, gets have QX. equity but We of margin, and of be And there adoption gain not taken that residual on revenue of convert the charge XpointX, effectively loss in

QX replenished effectively a you the the of $XXX see charge in about adoption will that XXX portfolio XXX. equity reduction that lease increased for a when for by sale for you'll and get equity in saw the for has of adjustment the somewhat million So,

Paul Coster

and able of you're of any then, XXX you able remediation without do Thank is gone Okay. the business get if tariffs back market or to to the are lost tariff, recapture you. into that you go just And now?

Thomas H. Werner

No, be material $XXX the and it's we course, recapture XXXX, for mix, impact to it EBITDA – also harbor things, the of lost on the would majority just all million. business. the to able impact of but sorts million on XXX depends between and and the I of $XX of think is scale those And safe

Paul Coster

Wow.

Okay.

of statement? could is a chunk back that get be (XX:XX) arguably correct in that mean, added a I good a on So, XXXX remediation, basis,

Thomas H. Werner

is correct statement. a That

Paul Coster

All right. you. Thank

Thomas H. Werner

very thanks much. Okay. Paul

Thomas H. Werner

And we the everybody joining appreciate call.

– one earnings have We between depending call Thank programs or how hearing will seeing you forward to next may have develop. and we you our in look you. on our

Operator

Thank conference. disconnect. and you joining you now today's concludes This may for

Sunpower (SPWRQ) 14 Feb 182017 Q4 Earnings call transcript