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					                                                                                           EQUITY RESEARCH
                                                                                      COMPANY UPDATE

Solar Power
April 23, 2012
                                                              First Solar, Inc.                                              Sell
Closing Price (4/20/12):                             $20.65
                                                              (FSLR – NASDAQ – $20.65)
12-Month Target Price:                                   $9   Lights Fade on a Fallen Star with $20/kg Poly and ~$1.55/W
52-Week Range:                             $20.02 - $145.16
Market Cap (MM):                                     $1,784
                                                              System Prices Yielding $1.00 Normalized EPS; Downgrading
Shares O/S (MM):                                       86.4   to Sell from Hold and Reestablishing a Price Target of $9
Float (MM):                                            59.8   Though we had reserved hope its project business would prove sustainable,
Shares Short (MM):                                     20.3   we believe the bull case for FSLR now rests solely on hope not reality. With
Avg. Vol. (MM)                                          6.3   (1) its competitive advantage gone with poly at $20/kg, (2) normalized system
Book Value/Share:                                    $42.17   prices of ~$1.55/W yielding 10% gross margin and $1.00 EPS at a $0.55
Dividend/Yield:                                  $0.00/0.0%
                                                              cost/W, and (3) upside choked off by capacity cuts, FSLR needs a wholesale
Risk Profile:                                          High
                                                              change in business model and valuation. Using both a DCF and the average
   Maxim Group                     Revenues ($M)              8x developer EV/EBIT multiple, we value FSLR at $9/Share.
     FYE: Dec              F2012E                F2013E
                                                              Competitive Advantage Evaporated with Poly Settling at $20/kg or Less:
        1Q                  $679                 $1,018
                                                              Just as high poly prices were the driver of FSLR’s spectacular 2007-08 rise, so
        2Q                  $962                  $979
                                                              have their declines been the cause of its quick demise. With falling production
        3Q                 $1,067                 $853
                                                              costs and oversupply suggesting poly will settle below $20/kg and GCL’s
        4Q                 $1,053                 $842
                                                              production costs implying c-Si production cost of $0.65/W, in line with
        FY                 $3,760                $3,692
                                                              FSLR’s 2013 target, we believe it has entirely lost its competitive advantage.
   Maxim Group             Current    Prior     Current
     FYE: Dec                EPS       EPS         P/E
                                                              Normalized EPS Power of Pure Project Development Business at $1.00:
   F2011A: GAAP             $5.54       -          3.7        With its manufacturing edge lost and its capacity cut by 33%, or ~760 MW,
   F2012E: GAAP             $4.42     $3.67        4.7        we believe FSLR has begun its transition from manufacturing to project
   F2013E: GAAP             $4.01     $4.60        5.1        development, that we expect to entail the end of unprofitable 3rd party module
   F2014E: GAAP             $4.40     $3.83        4.7        sales by 2013 to focus on project sales that benefit from additional EPC
LT Earnings Growth              (7%)                          margin. Still, with sustainable solar system pricing likely around $1.50-
  Maxim Group                       Quarterly EPS
                                                              $1.60/W (that yields (a) attractive unsubsidized project IRRs in key markets
    FYE: Dec               F2012E                   F2013E    with high sun and (b) sufficient margin throughout the Chinese c-Si value
        1Q                 $0.48                     $1.99    chain with poly at $17.50/kg), we estimate normalized operating income of no
        2Q                 $1.09                     $1.56    more than $125m even with production cost of $0.55/W and BoS of $0.85/W.
        3Q                 $1.42                     $0.36    Even NT Contracted EPS at Risk on Project Delays and Higher BoS:
        4Q                 $1.43                     $0.10    While NT EPS should be inflated by one-time high-priced contracts (and our
       FY                   $4.42                    $4.01    2012 EPS estimate rises from $3.67 to $4.42 on restructuring), troubling
Consensus-First Call                Quarterly EPS             reports at Topaz of (1) widespread furloughs due to “engineering problems”
    FYE: Dec               F2012E                   F2013E    and (2) the possible need for more water rights due to dust issues suggest
        1Q                 $0.58                     $0.80    budget overruns/delays pose a risk to even FSLR’s contracted EPS pipeline.
        2Q                 $0.80                     $0.89    Bull Case for Upside from New Projects Sacrificed by Capacity Cuts:
        3Q                 $1.23                     $1.00    Though our LT concerns had for a time been offset by the potential upside
        4Q                  $1.39                    $1.13    from new utility scale projects in emerging markets, this is now limited, in our
       FY                   $4.04                    $3.96    view, by the capacity closures (~500 MW surplus capacity in 2013),
Aaron Chew                                 (212 ) 895-3568    competitive c-Si pricing, and performance degradation problems in high heat.
achew@maximgrp.com                                            The only upside risk, in our view, is a surprising move like Total [TOT –
                                                              $48.15 – Not Rated] for Sunpower [SPWR – $5.51 – Not Rated].
Francesco Citro, Ph.D.                     (212 ) 895-3803
                                                              Liquidity a Risk as Available Cash Dips to $330m on Warranty Claims:
fcitro@maximgrp .com
                                                              After the restructuring, we estimate available cash of only $330m. Due to high
                                                              working capital needs and warranty liabilities, liquidity may be at risk.
                                                              Value of Cash Flow/Normalized EBIT No More than $800m, or $9/Share:
                                                              Using (1) a DCF of $3b contracted cash flows and a $185m terminal value net
                                                              of an assumed $550m liability for warranties and its manufacturing facilities
                                                              and (2) the average 8x EPC multiple of normalized EBIT, we establish a new
                                                              price target of $9 and downgrade FSLR to a Sell from a Hold.



                                Maxim Group LLC, 405 Lexington Avenue, New York, NY 10174
                  SEE PAGES 12-14 FOR IMPORTANT DISCLOSURES AND DISCLAIMERS
                                                                                                                                                                                                                                                                                                            First Solar (FSLR)

                                                                                                          Figure 1: FSLR’s Fate Has Followed Polysilicon Prices

                                                                $180                                                                                                                                                                                                                                                                         90

                                                                $160                                                                                                                                                                                                                                                                         80




                                                                                                                                                                                                                                                                                                                                                      Polysilicon Prices ($/kg)
                                                                $140                                                                                                                                                                                                                                                                         70
                                         FSLR Stock Price




                                                                $120                                                                                                                                                                                                                                                                         60

                                                                $100                                                                                                                                                                                                                                                                         50

                                                                $80                                                                                                                                                                                                                                                                          40

                                                                $60                                                                                                                                                                                                                                                                          30

                                                                $40                                                                                                                                                                                                                                                                          20

                                                                $20                                                                                                                                                                                                                                                                          10

                                                                 $0                                                                                                                                                                                                                                                                          0
                                                                       6/9/2010
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                                                                                                                                                                                                                                                                                                                                  4/9/2012
                                                                                                                                                                   FSLR                                                          Poly Prices

Source: First Solar and Maxim Group estimates

                                           Figure 2: Severe Polysilicon Overcapacity Likely Means Lower Poly Prices Are Here to Stay

                                                 70                                                                                                                                                                                                                                                                                               70
  Polysilicon Capacity of Top 10 (MWs)




                                                                                                                                                                                                                                                                                                               59.8




                                                                                                                                                                                                                                                                                                                                                                                  Global Solar PV Demand (MWs)
                                                 60                                                                                                                                                                                                                                                                                               60

                                                                                                                                                                                                                                                         46.8
                                                 50                                                                                                                                                                                                                                                                                               50
                                                                                                                                                                                                    42.2

                                                 40                                                                                                                                                                                                                                          39.4                                                 40

                                                                                                                                           27.7                                                                                       29.7
                                                 30                                                                                                                           27.4                                                                                                                                                                30

                                                                                  19.6
                                                 20                                                                 20.5                                                                                                                                                                                                                          20


                                                 10                                                                                                                                                                                                                                                                                               10
                                                                   7.5

                                                            0                                                                                                                                                                                                                                                                                     0
                                                                                  2008                                                     2009                                                 2010                                              2011E                                                     2012E

                                                                                                                                 Poly Capacity                                                           Global Solar Demand

Source: First Solar and Maxim Group estimates




Maxim Group LLC                                                                                                                                                                                                                                                                                                                                                                             2
                                                                                               First Solar (FSLR)

Figure 3: With Costs of Poly at <$18/kg and Wafer at $0.12/W, GCL Can Make a Module at $0.65/W
 GCL's Implied Module Cost ($/W)                                            2009        2010   2011E      2012E
  Poly Production Cost ($/kg)                                              $40.0       $29.2   $21.1      $17.7
  x Poly Consumption Ratio (g/W)                                              6           6      6          6
  / 1000 grams per kg                                                      1,000       1,000   1,000      1,000
      = Poly Production Cost ($/W)                                         $0.24       $0.17   $0.12      $0.10

      + Wafer Processing Cost ($/W)                                        $0.47       $0.24   $0.20      $0.12
      = Total Wafer Production Cost ($/W)                                  $0.71       $0.41   $0.32      $0.22

      + Cost of Tolled Cell ($/W)                                          $0.19       $0.18   $0.17      $0.15
      + Cost of Module Cell ($/W)                                          $0.32       $0.31   $0.30      $0.28
      = GCL's Implied Module Production Cost ($/W)                         $1.23       $0.91   $0.80      $0.65

Source: First Solar and Maxim Group estimates




 Figure 4: Falling Poly Prices Have Driven GCL’s Effective Module Production Cost Below FSLR’s

                                   $1.40
                                           $1.23
    Module Production Cost ($/W)




                                   $1.20

                                   $1.00                   $0.91
                                                   $0.86
                                                                   $0.80     $0.80
                                   $0.80                                              $0.75            $0.71
                                                                                               $0.65
                                   $0.60

                                   $0.40

                                   $0.20

                                      $-
                                              2009            2010                 2011E         2012E

                                                                   GCL     FSLR

Source: First Solar, GCL-Poly, and Maxim Group estimates




Maxim Group LLC                                                                                                   3
                                                                                 First Solar (FSLR)

             Figure 5: FSLR’s Normalized EPS with System ASPs at $1.50-1.60 is Only ~$1.00
Normalized EPS across Range of Cost/W                $0.45     $0.50     $0.55     $0.60     $0.65
Revenue:
  No. of Manufacturing Lines                           24        24       24        24         24
  + Idled Malaysian Lines                               4        4         4        4          4
  = Manufacturing Lines aft. "Un-idling" Malaysia      28        28       28        28         28

   x MWs per Line                                     64        64        64        64        64
   = Annual Manufacturing Capacity (MWs)             1,792     1,792     1,792     1,792     1,792

   x System ASP                                      $1.55     $1.55    $1.55      $1.55     $1.55
   = Normalized Revenue ($ millions)                 $2,778    $2,778   $2,778     $2,778    $2,778

Cost of Goods Sold:
  Module Production Cost ($/W)                       $0.45     $0.50     $0.55     $0.60     $0.65
  + Balance of System / Development Costs ($/W)      $0.85     $0.85     $0.85     $0.85     $0.85
  = Total System Cost ($/W)                          $1.30     $1.35     $1.40     $1.45     $1.50

   x MW Shipments                                     1,792     1,792    1,792      1,792     1,792
   = Normalized Cost of Systems                      $2,330    $2,419   $2,509     $2,598    $2,688

Normalized Gross Profit:
 Revenue                                             $2,778    $2,778   $2,778    $2,778     $2,778
 - Cost of Goods Sold                                $2,330    $2,419   $2,509    $2,598     $2,688
 = Normalized Gross Profit                            $448      $358     $269      $179       $90
   Normalized Gross Margin                           16.1%     12.9%     9.7%      6.5%      3.2%

Normalized Operating Income:
 Revenue                                             $1,792    $1,792   $1,792    $1,792     $1,792
 x Opex-to-Sales Ratio                                 8%        8%       8%        8%         8%
 = Normalized Operating Expenses                      $143      $143     $143      $143       $143

   Normalized Gross Profit                           $448      $358      $269      $179       $90
   - Normalized Operating Expenses                   $143      $143      $143      $143      $143
   = Normalized Operating Income                     $305      $215      $125      $36       ($54)
   Normalized Operating Margin                       68.0%     60.0%    46.7%      20.0%       -

Normalized EPS:
 Normalized Operating Income                         $305      $215      $125       $36      ($54)
 x (1 - Tax Rate)                                     75%       75%       75%       75%       75%
 = Normalized After-Tax Income                       $228      $161      $94        $27      ($40)

   / Diluted Shares Outstanding                        87        87        87        87        87
   = Normalized Diluted EPS                          $2.63     $1.85     $1.08     $0.31     ($0.46)

   x Target P/E Multiple                               8x       8x         8x        8x        8x
   = Implied Stock Price                             $21.01   $14.83     $8.65     $2.47        -
Source: First Solar and Maxim Group estimates



Maxim Group LLC                                                                                     4
                                                                                    First Solar (FSLR)

Figure 6: With Gross Project Cash Flows of $3.4b Offset by Module Liability DCF Points to $9 Stock
                                                 2012     2013    2014     2015        Total    MW-DC
Cash Flow of Current Pipeline:
 Agua Caliente                                  $109     $151       $-       $-        $259      348
 AV Solar                                       $204     $422       $-       $-        $626      276
 Topaz                                          ($55)    $587       $-       $-        $532      660
 Desert Sunlight                                $72      $126     $326     $450        $975      660
 Copper Mountain II                             $194     $104       $-       $-        $297      180
 Imperial Energy Center                          $77     $133      $60       $-        $270      156
 Alpine solar project                            $45       $-       $-       $-         $45       79
 Silver State North                             $87       $-        $-      $-         $87       60
 Avra Valley and Mt. St. Mary projects          $115       $-       $-       $-        $115       47
 Canadian Projects                              $167       $-       $-       $-        $167      228
  Gross Cash Flows of Project Pipeline          $1,016   $1,522   $386     $450        $3,375   2,695

  x System Gross Margin (Opex Ratio)            15.0%    12.5%    12.0%    12.0%       13.1%
  Estimated Project Operating Expenses          $152     $190     $46      $54         $443

  Operating Cash Flows of Project Pipeline      $864     $1,332   $340     $396        $2,931

Cash Flow of Future Projects:
 Desert Stateline                                 $-      $79     $37      $251        $367
 Silver State South                               $-      ($28)   $47       $88        $107
  Gross Cash Flows of Future Projects             $-      $51     $84      $339        $474

  x System Gross Margin (Opex Ratio)            15.0%    12.5%    12.0%    12.0%       13.1%
                                                                                          \
  Estimated Project Operating Expenses            $-      $6      $10      $41          $62

  Operating Cash Flows of Future Projects         $-      ($28)   $47      $88         $107

  Total Cash Flow of Project Business           $864     $1,304   $387     $484

  x (1- U.S. Tax Rate)                          75.0%    75.0%    75.0%    75.0%
  = After Tax Cash Flows of Project Business    $648     $978     $290     $363

  - Capital Expenditures                        ($179)   ($143)   ($151)   ($158)

  Free Cash Flow of Project Business            $468     $834     $140     $205         $25

  x 1 / (WACC - Terminal Growth Rate of 1.5%)                                          13.5%
  = Terminal Value                                                                     $185

  Discounted Cash Flow (@ 15%)                  $407     $631     $92      $117         $92

  Sum of Discounted Cash Flows                  $1,339

  - Warranty Liabilities                        ($155)
  - Module Manufacturing Liabilities            ($400)
  = Implied NPV of FSLR's EV                    $784

  / Shares Outstanding                            87                                      \
  = Implied FSLR Share Price                    $9.02
Source: First Solar and Maxim Group estimates




Maxim Group LLC                                                                                        5
                                                                                                  First Solar (FSLR)

            Figure 7: EPC/Project Development Stocks Trade with EV/EBIT Multiples of 8-10x
                                                           FLR            PWR         EME        Martifer      Avg.
   Enterprise Value (4/20/12)                            $8,150          $4,170      $1,450       €200
   / Operating Income (2012E)                           $1,065.3         $399.4      $250.7       €18
   = Forward EV/EBIT Multiple                             7.7x           10.4x        5.8x        11.0x         8.7x
Source: First Solar and Maxim Group estimates




                    Figure 8: EV/EBIT Multiple of 8x Normalized EBIT Points to $9 Stock
                                                              6.0x           7.0x        8.0x        9.0x       10.0x
   Normalized Operating Income                               $125.4         $125.4      $125.4      $125.4     $125.4
   x EV/EBIT Multiple                                         6.0x           7.0x        8.0x        9.0x       10.0x
   = Implied Enterprise Value                                $752.6         $878.1     $1,003.5    $1,129.0   $1,254.4

   + Cash Balance (Net of Restructuring/Debt Paydown)        $492.9         $492.9      $492.9      $492.9     $492.9
   - Debt (Net of 2Q11 Paydown)                              $518.6         $518.6      $518.6      $518.6     $518.6
   - Warranty Liability                                      $155.5         $155.5      $155.5      $155.5     $155.5
   = Implied Equity Value                                    $571.4         $696.8      $822.3      $947.7    $1,073.2

   / Shares Outstanding                                           87          87          87          87         87
   = Implied Share Price                                         $6.57       $8.01       $9.45      $10.89     $12.34
Source: First Solar and Maxim Group estimates




    Figure 9: Net of $519m in Debt and $155m of Warranty Liability, Cash Stands at ~$330 Million
in $ millions                                               4Q11            1Q12        2Q12        3Q12       4Q12
  Cash and Securities (BoP)                                $794.8          $787.9      $737.9      $492.9     $492.9
  + Restricted Cash and Investments                        $200.6          $200.6      $180.6      $180.6     $180.6
  = Total Restricted and Unrestricted Cash Balance         $995.4          $988.5      $918.5      $673.5     $673.5

   - Restructuring Cash Outflow                                                       ($100.0)
   - Warranty Cash Outflow                                                 ($50.0)
   - Debt Paydown                                                                     ($145.0)
   = Estimated Cash (EoP)                                  $995.4          $938.5      $673.5      $673.5     $673.5

   - Debt                                                  $663.6          $663.6      $518.6      $518.6     $518.6
   = Net Cash (EoP)                                        $331.7          $274.8      $154.8      $154.8     $154.8

   Cash Balance                                            $995.4          $938.5      $673.5      $673.5     $673.5
   - Warranty Liability                                    $155.5          $159.4      $163.4      $167.5     $171.6
   - Recycling Liability                                   $167.4          $172.4      $177.6      $182.9     $188.4
   = Net Available Cash                                    $672.5          $606.7      $332.5      $323.1     $313.4
Source: First Solar and Maxim Group estimates




Maxim Group LLC                                                                                                        6
                                                                                                                                                                                                                                               First Solar (FSLR)


                                                                           FINANCIAL MODEL
Figure 10: FSLR Operating Model (1/2)
                                                                                                                                                                                                                                                     Annual
                                                                  2010                                      2011                                      2012                                         2013                   2010       2011       2012E      2013E      2014E       2015E
                                                 1Q        2Q            3Q      4Q        1Q        2Q            3Q      4Q       1QE      2QE             3QE     4QE        1QE       2QE             3QE    4QE
Shipments:
 Nameplate Capacity in Period                   334       354         358       376       417       528         552       571       574      512          515        388        390       392          394       396      1,421      2,069       1,991      1,572      1,604      1,636
  x Capacity utilization                       96.4%     97.2%       97.9%     105.2%    97.7%     91.5%       99.6%     80.0%     65.0%    95.0%        95.0%      95.0%      95.0%     95.0%        95.0%     95.0%     99.3%      95.7%       86.3%      95.0%      97.0%      97.0%
 = MW produced                                  322       344         350       395       407       483         550       540       373      487          489        369        371       372          374       376      1,412      1,980       1,718      1,494      1,555      1,587

 Recognized Module Shipments (MWs)              300       302            363    380       352       371            515    393       330      350             427     435        342       351             362    375      1,345      1,631       1,542      1,430      1,585      1,590
   - Shipments to Desert Sunlight                 -        -               -      -        -          -             -      -          -      55               55     55         55        55               55    55         -           -         165        220        220         55
   - Increase in Module Inventory                22       42               -     15       56        112            35     147        43      82               7       -          -         -                -     -        79         350         132         -          -           -
   = Net Module Inventory                        93       135            123    138       194       306            341    488       531      612             620     498        472       439             396    342       138        488         498        342        313        309
 % of Module Shipments to 3rd Pary Customers   93.0%     87.4%       68.6%     95.0%     91.5%     90.6%       92.7%     87.8%     37.6%    20.3%        24.0%      27.6%       -%         -%          -%         -%      81.7%      74.7%       24.3%       -%         -%         -%
 % of Module Shipments to Systems               7.0%     12.6%       31.4%      5.0%     8.5%      9.4%         7.3%     12.2%     62.4%    79.7%        76.0%      72.4%     100.0%     100.0%      100.0%     100.0%    18.3%      25.3%       75.7%     100.0%     100.0%     100.0%

Revenue:
 MW Modules Sold to Ext. Customers              279        264         249      361        322       336         477      345       124      71           103        120         -         -               -      -       1,153      1,480       418          -          -           -
  x Module ASP (External)                      $1.77      $1.68       $1.62    $1.52      $1.44     $1.22       $1.08    $0.87     $0.75    $0.72        $0.67      $0.65        $-        $-             $-      $-      $1.64      $1.14      $0.70       $0.70      $0.70      $0.70
 = "External" Module Revenue                   $494.0    $444.0      $403.3    $548.8    $462.7    $410.9      $517.6    $299.4    $93.4    $50.8        $68.2      $78.2        $-        $-             $-      $-     $1,890.0   $1,690.5    $290.7        $-         $-         $-

 MW Modules Sold to Systems                     21        38           114      19        30        35          38        48        206      279           324      315         342       351           362      375      192        151         1,124      1,430      1,585      2,250
 x Module ASP (Internal)                       $1.67     $1.50        $1.51    $1.62     $1.89     $1.75       $2.27     $1.87     $1.09    $0.96         $0.98    $0.99       $1.09     $0.94         $0.58    $0.48    $1.54      $1.95        $1.00      $0.76      $0.88      $0.86
 = "Internal" Module Revenue                   $35.3     $56.9       $172.2    $30.6     $56.8     $61.1       $85.9     $89.5     $223.7   $267.7       $316.6    $311.0     $373.7     $328.2       $208.3    $181.0   $295.0     $293.3      $1,118.9   $1,091.2   $1,392.0   $1,936.1

 Total Module Revenue                          $529.3    $500.9      $575.5    $579.3    $519.5    $471.9      $603.5    $388.9    $317.1   $318.5       $384.8    $389.2     $373.7     $328.2       $208.3    $181.0   $2,185.0   $1,983.8    $1,409.6   $1,091.2   $1,392.0   $1,936.1
 Weighted Avg. System ASP ($/W)                $3.50     $3.79       $3.46     $3.23     $3.49     $3.48        $3.86    $3.68     $2.84    $3.26        $3.08      $3.09      $2.98     $2.79        $2.36     $2.24     $3.51      $5.91       $3.09      $2.58      $2.38      $2.19
 - Module ASP (Internal)                       $1.67     $1.50       $1.51     $1.62     $1.89     $1.75        $2.27    $1.87     $1.09    $0.96        $0.98      $0.99      $1.09     $0.94        $0.58     $0.48     $1.54      $1.95       $1.00      $0.76      $0.88      $0.86
 = System ASP (ex-Module)                      $1.83     $2.29       $1.95     $1.61     $1.59     $1.74       $10.64    $1.81     $1.76    $2.31        $2.10      $2.11      $1.89     $1.85        $1.78     $1.76     $1.97      $3.96       $2.09      $1.82      $1.51      $1.33
  x Modules Shipped to Systems                   21        38            114     19        30       35             38      48       206      279             324     315        342       351             362    375       192        151        1,124      1,430      1,585      2,250
 System Revenue                                $38.7     $86.9       $222.4    $30.5     $47.8     $60.8       $402.3    $87.0     $361.6   $643.0       $682.4    $663.3     $644.7     $650.5       $644.2    $661.1   $378.5     $597.9      $2,350.3   $2,600.4   $2,387.3   $2,999.8

 Total Revenue                                 $568.0    $587.9      $797.9    $609.8    $567.3    $532.8     $1,005.8   $660.4    $678.8   $961.5      $1,067.2   $1,052.5   $1,018.4   $978.6       $852.5    $842.1   $2,563.5   $2,581.7    $3,759.9   $3,691.6   $3,779.3   $4,935.9

Cost of Goods Sold:
 MW Module Shipments                            300        302         363      380        352       371         515      393       330      350           427      435         342       351           362      375      1,345      1,631       1,542     1,430       1,585      2,250
 x COGS / Watt                                 $0.84      $0.79       $0.81    $0.76      $0.76     $0.76       $0.74    $0.73     $0.76    $0.74         $0.70    $0.68       $0.65     $0.62         $0.60    $0.58     $0.80      $0.75       $0.72     $0.61       $0.57      $0.55
 Cost of Module revenue                        $252.3    $238.0      $292.7    $288.8    $267.1    $282.0      $381.1    $286.9    $250.8   $259.0       $298.9    $295.8     $222.1     $217.5       $217.1    $217.7   $1,071.8   $1,217.1    $1,104.5   $874.4     $903.5     $1,237.5

 Systems Shipments                              21        38           114      19        30        35           38        48       206      279           324      315         342       351           362      375      192        151         1,124      1,430      1,585      2,250
 x Non-Module Cost / Watt                      $1.59     $1.73        $1.61    $1.29     $1.35     $1.60        $6.50    $2.82     $1.33    $1.75         $1.58    $1.58       $1.38     $1.38         $1.38    $1.38    $1.60      $3.17        $1.58      $1.38      $1.22      $1.07
 = Cost of Systems Revenue                     $33.6     $65.7       $183.3    $24.3     $40.5     $56.0       $245.5    $135.3    $273.8   $488.2       $512.6    $497.6     $471.5     $484.1       $499.3    $517.9   $306.9     $477.4      $1,772.2   $1,972.8   $1,933.8   $2,407.5

 Total Cost of Goods Sold                      $285.9    $303.7      $476.0    $313.1    $307.6    $338.0      $626.6    $422.2    $524.6   $747.2       $811.5    $793.4     $693.7     $701.6       $716.4    $735.6   $1,378.7   $1,694.5    $2,876.7   $2,847.2   $2,837.3   $3,645.0

 Gross Profit                                  $282.0    $284.2      $321.9    $296.7    $259.7    $194.8      $379.2    $238.1    $154.1   $214.3       $255.7    $259.0     $324.7     $277.0       $136.1    $106.5   $1,184.8   $887.3      $883.2     $844.4     $942.1     $1,290.9

Operating Income:
   Selling Expenses                            $34.6     $31.1       $28.2     $38.4     $32.4     $28.8       $51.8     $23.9     $24.4    $24.0        $20.3      $21.0      $21.4     $21.5        $21.7     $21.9    $132.3     $136.9      $89.8       $86.5      $90.7     $93.8
   G&A Expenses                                $32.3     $47.5       $56.7     $52.9     $54.6     $58.1       $61.0     $38.5     $39.4    $38.5        $33.1      $33.7      $33.6     $34.3        $34.1     $34.5    $189.4     $212.2      $144.6     $136.5     $139.8     $148.1
 SG&A Expense                                  $66.9      $78.6       $85.0    $91.3      $87.0     $86.9      $112.7    $62.4     $63.8    $62.5        $53.4      $54.7      $55.0     $55.8        $55.8     $56.4    $321.7     $349.0      $234.4     $223.0     $230.5     $241.9
 + R&D Expense                                 $22.9      $22.8       $21.5    $27.6      $31.4     $33.1       $38.2    $37.9      $38.1   $38.3        $38.5      $38.7      $38.9     $39.1        $39.3     $39.4     $94.8     $140.5      $153.5     $156.6     $162.5     $167.8
 + Production Start-Up Expense                  $1.1      $2.3        $3.8     $12.2      $11.9     $10.3       $5.5      $5.9       $4.8    $3.8          $-         $-         $-        $-           $-        $-      $19.4      $33.6       $8.6         $-         $-        $-
 = Total Operating Expenses                    $90.9     $103.7      $110.3    $131.1    $130.3    $130.3      $156.4    $106.2    $106.7   $104.6       $91.8      $93.4      $93.9     $94.8        $95.1     $95.9    $435.9     $523.2      $396.5     $379.7     $393.0     $409.7

 Operating Income                              $191.1    $180.5      $211.6    $165.7    $129.4    $64.5       $222.7    $131.9    $47.5    $109.7       $163.9    $165.6     $230.9     $182.2       $41.0     $10.7    $748.9     $364.1      $486.7     $464.7     $549.0     $881.3

EPS:
 Non-Operating Expense (Income)                ($18.8)   ($21.4)     ($34.8)    ($9.7)   ($13.4)   ($3.4)      ($26.2)   ($22.9)   ($6.0)   ($15.4)      ($39.9)   ($40.7)    ($57.1)    ($45.0)      ($9.5)    ($1.9)   ($84.7)    ($66.0)     ($101.9)   ($103.3)   ($162.4)   ($121.6)
 = Net Income (x-1x Items)                     $172.3    $159.0      $176.9    $155.9    $116.0    $61.1       $196.5    $109.0    $41.5     $94.3       $124.0    $124.9     $173.8     $137.2       $31.5      $8.8    $664.2     $482.6       $385.9     $361.5     $386.6    $759.7

 / Diluted Shares Outstanding                   86.1      86.4        86.6      86.8      87.1      87.2        87.4      86.4      86.6     86.8         87.0       87.3       87.5      87.7         87.9      88.1      85.0       86.5        86.1       86.9       87.8       87.8
 Diluted EPS                                   $2.00     $1.84       $2.04     $1.80     $1.33     $0.70       $2.25     $1.26     $0.48    $1.09        $1.42      $1.43      $1.99     $1.56        $0.36     $0.10     $7.81      $5.54       $4.42      $4.01      $4.40      $8.65


Source: First Solar and Maxim Group estimates




Maxim Group LLC                                                                                                                                                                                                   7
                                                                                                                                                                                                                        First Solar (FSLR)


Figure 11: FSLR Operating Model (2/2)
Operating Metrics:                               2010                                     2011                                       2012                                          2013                    2010      2011      2012E     2013E     2014E    2015E
                                1Q        2Q            3Q     4Q        1Q        2Q            3Q      4Q       1QE       2QE             3QE     4QE        1QE        2QE             3QE     4QE
% of Sales:
 Module Gross Margins         52.3%     52.5%       49.1%    50.1%     48.6%     40.3%       36.8%      26.2%    20.9%     18.7%        22.3%      24.0%      40.6%      33.7%        (4.2%)    (20.2%)    50.9%     38.7%     21.6%     19.9%     35.1%    36.1%
 Systems Gross Margins        13.1%     24.4%       17.6%    20.4%     15.3%      7.9%       39.0%     (55.6%)   24.3%     24.1%        24.9%      25.0%      26.9%      25.6%        22.5%      21.7%     18.9%     20.2%     24.6%     24.1%     19.0%    19.7%
 Consolidated Gross Margin    49.7%     48.3%       40.3%    48.7%     45.8%     36.6%       37.7%      36.1%    22.7%     22.3%        24.0%      24.6%      31.9%      28.3%        16.0%      12.7%     46.2%     34.4%     23.5%     22.9%     24.9%    26.2%
 Operating Margin             33.7%     30.7%       26.5%    27.2%     22.8%     12.1%       22.1%      20.0%     7.0%     11.4%        15.4%      15.7%      22.7%      18.6%         4.8%      1.3%      29.2%     14.1%     1.0%      12.6%     14.5%    17.9%
  SG&A                        11.8%     13.4%       10.6%    15.0%     15.3%     16.3%       11.2%     9.4%       9.4%      6.5%            5.0%    5.2%      5.4%       5.7%          6.6%      6.7%      12.5%     13.5%     6.2%      6.0%      6.1%     4.9%
  R&D                         4.0%       3.9%        2.7%     4.5%      5.5%     6.2%         3.8%     5.7%       5.6%      4.0%            3.6%    3.7%      3.8%       4.0%          4.6%      4.7%      3.7%      5.4%      4.1%      4.2%      4.3%     3.4%
  Production Start-Up         0.2%       0.4%        0.5%     2.0%      2.1%     1.9%         0.5%     0.9%       0.7%      0.4%             -%      -%        -%         -%            -%        -%       0.8%      1.3%      0.2%       -%        -%       -%
  Total Operating Expenses    16.0%     17.6%       13.8%    21.5%     23.0%     24.5%       15.6%     16.1%     15.7%     10.9%            8.6%    8.9%      9.2%       9.7%         11.2%      11.4%     17.0%     20.3%     10.5%     10.3%     10.4%    8.3%

Q/Q % Growth:
  Module ASPs (External)       5.9%     (5.0%)      (3.5%)   (6.4%)    (5.3%)    (15.0%)     (11.3%)   (20.0%)   (13.3%)   (5.0%)       (7.0%)     (2.0%)    (100.0%)   #DIV/0!       #DIV/0!   #DIV/0!
  COGS / Watt                  1.5%     (6.2%)       2.5%    (5.9%)      -%        -%         (2.6%)    (1.4%)     4.1%    (2.6%)       (5.4%)     (2.9%)     (4.4%)    (4.6%)        (3.2%)    (3.3%)
  MW Production                3.6%      6.8%        1.8%    12.8%      3.0%     18.6%       13.9%      (1.8%)   (31.0%)   30.6%         0.5%      (24.6%)     0.5%      0.5%          0.5%      0.5%
  MW Module Shipments         (8.1%)     0.5%       20.0%     4.8%     (7.5%)    5.5%        38.8%     (23.7%)   (16.0%)    6.1%        22.0%       1.9%     (21.4%)     2.7%          3.1%      3.7%
  Module Revenue               (0.2%)   (5.4%)      14.9%      0.7%    (10.3%)   (9.2%)      27.9%     (35.6%)   (18.5%)    0.4%        20.8%       1.1%      (4.0%)    (12.2%)       (36.5%)   (13.1%)
  Systems Revenue             (65.2%)   124.6%      155.9%   (86.3%)    56.7%    27.3%       561.4%    (78.4%)   315.9%    77.8%        6.1%       (2.8%)     (2.8%)      0.9%         (1.0%)     2.6%
  Total Revenue               (11.4%)    3.5%        35.7%   (23.6%)    (7.0%)   (6.1%)      88.8%     (34.3%)     2.8%    41.7%        11.0%      (1.4%)     (3.2%)     (3.9%)       (12.9%)    (1.2%)
  Total Gross Profit           5.9%      0.8%       13.3%    (7.8%)    (12.5%)   (25.0%)     94.6%     (37.2%)   (35.3%)   39.1%        19.3%       1.3%      25.4%     (14.7%)       (50.9%)   (21.7%)

Y/Y % Growth:
  Module ASPs (External)      (17.0%)   (17.6%)     (5.8%)   (9.0%)    (18.6%)   (27.3%)     (33.2%)   (42.9%)   (47.7%)   (41.5%)      (38.7%)    (24.9%)   (100.0%)   (100.0%)     (100.0%)   (100.0%)   (12.1%)   (30.3%)   (39.1%)     -%        -%       -%
  COGS / Watt                  (9.2%)    (9.8%)     (3.7%)   (8.2%)     (9.5%)    (3.6%)      (8.3%)    (3.9%)     -%       (2.6%)       (5.4%)     (6.8%)    (14.5%)    (16.2%)      (14.3%)    (14.7%)    (7.3%)    (6.3%)    (4.0%)   (14.6%)   (6.8%)   (3.5%)
  MW Production               46.7%     18.7%       19.8%    27.1%     26.4%     40.4%       57.1%     36.6%     (8.4%)     0.8%        (11.1%)    (31.7%)    (0.6%)    (23.5%)       (23.5%)     2.0%     26.9%     40.3%     (13.3%)   (13.0%)   4.1%     2.0%
  MW Module Shipments         53.9%     17.7%       30.1%    16.2%     17.0%     22.8%       42.1%     3.4%      (6.1%)    (5.7%)       (17.1%)     10.7%      3.5%      0.2%         (15.3%)   (13.7%)    27.2%     21.2%      (5.4%)    (7.3%)   10.9%    0.3%

% of Total:

  Module Revenue              93.2%     85.2%       72.1%    95.0%     91.6%     88.6%       60.0%     58.9%      46.7%    33.1%        36.1%      37.0%      36.7%     33.5%         24.4%     21.5%      85.2%      76.8%     37.5%     29.6%     36.8%   39.2%
  Systems Revenue              6.8%     14.8%        27.9%    5.0%      8.4%     11.4%       40.0%     13.2%      53.3%    66.9%        63.9%      63.0%      63.3%     66.5%         75.6%     78.5%      14.8%      23.2%     62.5%     70.4%     63.2%   60.8%
  Total Revenue               100.0%    100.0%      100.0%   100.0%    100.0%    100.0%      100.0%    72.1%     100.0%    100.0%       100.0%     100.0%    100.0%     100.0%        100.0%    100.0%     100.0%    100.0%    100.0%    100.0%    100.0%   100.0%

  SG&A                        73.6%     75.8%        77.1%    69.6%    66.8%     66.7%       72.1%      58.8%     59.8%    59.7%        58.1%      58.6%      58.6%     58.8%         58.7%     58.9%      73.8%      66.7%     59.1%     58.7%     58.7%   59.0%
  R&D                         25.2%     22.0%        19.5%    21.1%    24.1%     25.4%       24.4%      35.7%     35.7%    36.6%        41.9%      41.4%      41.4%     41.2%         41.3%     41.1%      21.7%      26.9%     38.7%     41.3%     41.3%   41.0%
  Production Start-up          1.3%      2.2%         3.5%     9.3%     9.2%      7.9%        3.5%      5.5%       4.5%     3.7%          -%         -%        -%         -%            -%        -%        4.5%      6.4%      2.2%       -%        -%       -%
  Total Operating Expenses    100.0%    100.0%      100.0%   100.0%    100.0%    100.0%      100.0%    100.0%    100.0%    100.0%       100.0%     100.0%    100.0%     100.0%        100.0%    100.0%     100.0%    100.0%    100.0%    100.0%    100.0%   100.0%



Source: First Solar and Maxim Group estimates




Maxim Group LLC                                                                                                                                                                                 8
                                                                                                                                                                                                                                                                               First Solar (FSLR)


Figure 12: FSLR Income Statement
                                                                                                                                                           Quarterly                                                                                                                       Annual
  in $ millions                                     2009                                      2010                                      2011                                    2012E                                      2013E                      2009       2010       2011      2012E      2013E      2014E      2015E
                                     1Q       2Q         3Q         4Q        1Q        2Q         3Q         4Q        1Q        2Q         3Q         4Q        1QE       2QE         3QE        4QE        1QE       2QE       3QE       4QE         FY         FY         FY         FY         FY         FY         FY
  Total Revenues                   $418.2   $525.9     $480.9     $641.3    $568.0    $587.9     $797.9     $609.8    $567.3    $532.8    $1,005.8    $660.4     $678.8    $961.5     $1,067.2   $1,052.5   $1,018.4   $978.6    $852.5    $842.1    $2,066.2   $2,563.5   $2,766.2   $3,759.9   $3,691.6   $3,779.3   $4,935.9

  - Cost of Goods (x-1x Charges)   $182.9   $227.8     $235.9     $375.1    $285.9    $303.7     $476.0     $313.1    $307.6    $338.0     $626.6     $422.2     $524.6    $747.2     $811.5     $793.4     $693.7     $701.6    $716.4    $735.6    $1,021.6   $1,378.7   $1,694.5   $2,876.7   $2,847.2   $2,837.3   $3,645.0
  = Gross Profit                   $235.3   $298.1     $245.0     $266.2    $282.0    $284.2     $321.9     $296.7    $259.7    $194.8     $379.2     $238.1     $154.1    $214.3     $255.7     $259.0     $324.7     $277.0    $136.1    $106.5    $1,044.6   $1,184.8   $1,071.8    $883.2     $844.4     $942.1    $1,290.9

  SG&A (x-1x Charges)              $49.3    $72.9      $54.0       $96.7    $66.9      $78.6     $85.0       $91.3    $87.0      $86.9     $112.7     $62.4      $63.8     $62.5       $53.4      $54.7      $55.0     $55.8     $55.8     $56.4     $272.9     $321.7     $349.0     $234.4     $223.0     $230.5     $241.9
  + R&D                            $11.7    $18.6      $24.1       $23.7    $22.9      $22.8     $21.5       $27.6    $31.4      $33.1      $38.2     $37.9      $38.1     $38.3       $38.5      $38.7      $38.9     $39.1     $39.3     $39.4      $78.2      $94.8     $140.5     $153.5     $156.6     $162.5     $167.8
  + Production Start-Up            $6.2      $2.5       $4.1        $1.1     $1.1       $2.3      $3.8       $12.2    $11.9      $10.3       $5.5      $5.9       $4.8      $3.8         $-         $-         $-        $-        $-        $-       $13.9      $19.4      $33.6      $8.6        $-         $-         $-
  = Operating Expenses             $67.2    $94.1      $82.2      $121.5    $90.9     $103.7     $110.3     $131.1    $130.3    $130.3     $156.4     $106.2     $106.7    $104.6      $91.8      $93.4      $93.9     $94.8     $95.1     $95.9     $365.0     $435.9     $523.2     $396.5     $379.7     $393.0     $409.7

  Operating Income                 $168.1   $204.0     $162.8     $144.7    $191.1    $180.5     $211.6     $165.7    $129.4    $64.5      $222.7     $131.9     $47.5     $109.7     $163.9     $165.6     $230.9     $182.2    $41.0     $10.7     $679.6     $748.9     $548.6     $486.7     $464.7     $490.8     $881.3

  Foreign Currency Gain (Loss)     $1.8      $0.2       $0.1       $3.0     ($0.7)    ($2.6)     ($1.0)      $0.9     $1.0       $1.7      ($1.9)       $0.2       $-         $-         $-         $-         $-        $-        $-        $-       $5.2       ($3.5)      $1.0        $-         $-         $-         $-
  Interest Income                  $2.1      $1.9       $2.4       $3.3      $5.6      $3.0       $2.7       $3.0      $3.0      $3.4       $3.2        $3.7     $2.5       $2.4       $2.6       $2.1       $2.0      $1.9       $2.1      $2.2       $9.7      $14.4      $13.4       $9.6       $8.2       $8.0       $7.8
  Interest Expense                 ($0.9)   ($3.8)     ($0.1)     ($0.4)      $-      ($0.0)       $-         $-        $-        $-         $-        ($0.1)    ($1.1)     ($1.1)     ($1.1)     ($1.1)     ($1.1)    ($1.1)    ($1.1)    ($1.1)     ($5.3)     ($0.0)     ($0.1)     ($3.4)     ($4.5)     ($5.2)     ($6.0)
  Other Income (Expense)           ($1.3)   ($1.1)     ($0.2)     ($0.3)    ($0.7)    ($0.4)     ($0.4)      $3.8     ($0.3)     $2.4      ($1.3)      $0.0        $-         $-         $-         $-         $-        $-        $-        $-       ($3.0)      $2.3       $0.7        $-         $-         $-         $-
  Non-Operating Income (Expense)   $1.7     ($2.7)     $2.2       $5.6      $4.2      ($0.0)     $1.3        $7.7     $3.6       $7.4      $0.0        $3.9      $1.4       $1.3       $1.5       $1.0       $0.9      $0.8      $1.0      $1.1       $6.7       $13.2      $15.0      $6.2       $3.7        $2.8      $1.8

  Pretax Income - Operations       $169.7   $201.3     $165.0     $150.3    $195.4    $180.4     $212.9     $173.4    $133.0    $72.0      $222.8     $135.8     $48.8     $111.0     $165.3     $166.6     $231.7     $183.0    $42.0     $11.7     $686.3     $762.1     $563.5     $492.9     $468.4     $493.6     $883.1

  Income Tax                        $5.1    $20.7      $11.6       $8.7     $23.0     $21.4      $36.0      $17.4     $17.0     $10.8      $26.3      $26.8       $7.3     $16.6       $41.3      $41.6      $57.9     $45.7     $10.5      $2.9      $46.2      $97.9      $80.9     $107.0     $107.0     $107.0     $123.4
  Net Income (Loss) - x-1x Items   $164.6   $180.6     $153.3     $141.6    $172.3    $159.0     $176.9     $155.9    $116.0    $61.1      $196.5     $109.0     $41.5     $94.3      $124.0     $124.9     $173.8     $137.2    $31.5      $8.8     $640.1     $664.2     $482.6     $385.9     $361.5     $386.6     $759.7

  Adjustments for Non-Recurring       $-      $-          $-         $-        $-        $-        $-          $-       $-        $-          $-       $518.8      $-       $300.0       $-         $-         $-         $-       $-        $-         $-         $-      $518.8     $300.0       $-          $-         $-
  Reported Net Income              $164.6   $180.6     $153.3     $141.6    $172.3    $159.0     $176.9     $155.9    $116.0    $61.1      $196.5     ($409.8)   $41.5     ($205.7)   $124.0     $124.9     $173.8     $137.2    $31.5     $8.8      $640.1     $664.2     ($36.2)     $85.9     $361.5     $386.6     $759.7
  Diluted EPS - (x-1x Items)        $1.99   $2.11      $1.79      $1.65     $2.00      $1.84     $2.04      $1.80     $1.33     $0.70      $2.25       $1.26     $0.48      $1.09     $1.42      $1.43      $1.99      $1.56     $0.36     $0.10     $7.53      $7.68       $5.54     $4.42      $4.12       $4.40     $8.57
  Basic EPS (x-1x Items)            $2.02   $2.16       $1.82      $1.68     $2.04     $1.87     $2.08       $1.83    $1.36     $0.72       $2.28      $1.26     $0.48      $1.09      $1.42      $1.43      $1.99      $1.56    $0.36     $0.10      $7.67      $7.82      $5.61      $4.44     $4.12       $4.40      $8.57

  Diluted GAAP EPS                 $1.99    $2.11      $1.79      $1.65     $2.00     $1.84      $2.04      $1.80     $1.33     $0.70      $2.25      ($4.74)    $0.48     ($2.37)     $1.42      $1.43      $1.99     $1.56     $0.36     $0.10      $7.53      $7.68      ($0.42)    $0.99      $4.12      $4.40      $8.57

  Basic Shares                      81.7     83.7          84.2    84.4      84.5      84.9          85.1    85.2      85.3      85.3          86.3    86.4       86.6      86.8        87.0       87.3       87.5      87.7      87.9      88.1       83.5       84.9       86.1       86.9       87.8       87.8       88.7
  Diluted Shares Outstanding        82.6     85.7          85.9    86.0      86.1      86.4          86.6    86.8      87.1      87.2          87.4    86.4       86.6      86.8        87.0       87.3       87.5      87.7      87.9      88.1       85.0       86.5       86.1       86.9       87.8       87.8       88.7


% of Sales:
 Gross Margin                      56.3%    56.7%      50.9%      41.5%     49.7%     48.3%      40.3%      48.7%     45.8%     36.6%      37.7%      36.1%      22.7%     22.3%       24.0%      24.6%      31.9%     28.3%     16.0%     12.7%      50.6%      46.2%      38.7%      38.7%      23.5%      22.9%      24.9%
 Operating Income Margin           40.2%    38.8%      33.9%      22.6%     33.7%     30.7%      26.5%      27.2%     22.8%     12.1%      22.1%      20.0%      7.0%      11.4%       15.4%      15.7%      22.7%     18.6%      4.8%     1.3%       32.9%      29.2%      19.8%      19.8%      12.9%      12.6%      13.0%
 Net Income Margin                 39.4%    34.3%      31.9%      22.1%     30.3%     27.1%      22.2%      25.6%     20.4%     11.5%      19.5%      16.5%      6.1%       9.8%       11.6%      11.9%      17.1%     14.0%      3.7%     1.0%       31.0%      25.9%      17.4%      17.4%      10.3%      9.8%       10.2%
  SG&A                             11.8%    13.9%      11.2%      15.1%     11.8%     13.4%      10.6%      15.0%     15.3%     16.3%      11.2%       9.4%       9.4%      6.5%       5.0%        5.2%      5.4%       5.7%      6.6%      6.7%      13.2%      12.5%      12.6%      12.6%      6.2%        6.0%      6.1%
  R&D                              2.8%      3.5%      5.0%       3.7%      4.0%      3.9%        2.7%      4.5%       5.5%     6.2%        3.8%       5.7%       5.6%      4.0%       3.6%        3.7%      3.8%       4.0%      4.6%      4.7%       3.8%      3.7%        5.1%       5.1%      4.1%        4.2%      4.3%
  Production Start-Up               1.5%     0.5%       0.8%       0.2%      0.2%      0.4%       0.5%      2.0%       2.1%     1.9%        0.5%       0.9%                                                                                            0.7%      0.8%        1.2%       1.2%      0.2%         -%        -%
  Tax Rate                          3.0%    10.3%          7.0%    5.8%     11.8%     11.9%      16.9%      10.0%     12.8%     15.0%      11.8%      19.7%      15.0%     15.0%       25.0%      25.0%      25.0%     25.0%     25.0%     25.0%       6.7%      12.8%      14.4%      21.7%      22.8%      25.0%      25.0%

Q/Q % Growth:
  Revenues                         (3.6%)   25.7%       (8.6%)     33.4%    (11.4%)    3.5%      35.7%      (23.6%)    (7.0%)    (6.1%)    88.8%      (34.3%)     2.8%     41.7%       11.0%      (1.4%)     (3.2%)     (3.9%)   (12.9%)    (1.2%)
  COGS                             (8.4%)   24.5%        3.5%      59.0%    (23.8%)    6.2%      56.8%      (34.2%)    (1.7%)     9.9%      85.4%     (32.6%)     24.3%    42.4%       8.6%       (2.2%)    (12.6%)      1.1%      2.1%      2.7%
  Gross Profit                      0.6%    26.7%      (17.8%)     8.7%      5.9%      0.8%      13.3%       (7.8%)   (12.5%)   (25.0%)    94.6%      (37.2%)    (35.3%)   39.1%       19.3%       1.3%      25.4%     (14.7%)   (50.9%)   (21.7%)
  Operating Expenses               (7.4%)   39.9%      (12.6%)     47.8%    (25.2%)   14.1%       6.3%       18.9%     (0.6%)    (0.0%)     20.1%     (32.1%)      0.4%    (1.9%)     (12.2%)      1.7%       0.5%       1.0%      0.3%      0.8%
  Operating Income                  4.2%    21.4%      (20.2%)    (11.1%)    32.1%    (5.6%)     17.3%      (21.7%)   (21.9%)   (50.1%)    245.2%     (40.8%)    (64.0%)   131.1%      49.3%       1.1%      39.4%     (21.1%)   (77.5%)   (74.0%)

Y/Y % Growth:
  Revenues                         112.4%   96.9%      37.9%       47.9%    35.8%      11.8%     65.9%       (4.9%)    (0.1%)    (9.4%)    26.1%        8.3%      19.7%     80.5%      6.1%       59.4%      50.0%      1.8%     (20.1%)   (20.0%)    65.8%      24.1%       7.9%      35.9%      (1.8%)      2.4%      30.6%
  COGS                              97.6%   86.2%      53.9%       87.8%    56.3%      33.3%     101.8%     (16.5%)     7.6%     11.3%     31.6%       34.9%      70.5%    121.1%      29.5%      87.9%      32.2%     (6.1%)    (11.7%)    (7.3%)    79.9%      34.9%      22.9%      69.8%      (1.0%)     (0.3%)     28.5%
  Gross Profit                     125.5%   106.0%     25.4%       13.8%    19.9%      (4.7%)    31.4%       11.5%     (7.9%)   (31.5%)    17.8%      (19.7%)    (40.6%)    10.0%     (32.6%)      8.8%     110.7%     29.2%     (46.8%)   (58.9%)    54.0%      13.4%      (9.5%)    (17.6%)     (4.4%)     11.6%      37.0%
  Operating Expenses                45.5%   68.0%      25.9%       67.3%    35.2%      10.3%     34.1%        7.9%     43.3%     25.6%     41.9%      (19.0%)    (18.1%)   (19.7%)    (41.3%)    (12.0%)    (12.0%)    (9.4%)      3.5%      2.6%     52.0%      19.4%      20.0%     (24.2%)     (4.3%)      3.5%       4.2%
  Operating Income                 189.1%   130.0%     25.1%      (10.3%)   13.7%     (11.6%)    30.0%       14.5%    (32.3%)   (64.2%)     5.2%      (20.4%)    (63.3%)    70.0%     (26.4%)     25.5%     386.4%     66.1%     (75.0%)   (93.6%)    55.0%      10.2%     (26.7%)    (11.3%)     (4.5%)      5.6%      79.6%
  Net Income (Loss)                253.1%   159.2%     54.5%        6.7%     4.7%     (11.9%)    15.3%       10.1%    (32.7%)   (61.6%)    11.1%      (30.1%)    (64.2%)    54.3%     (36.9%)     14.6%     318.7%     45.5%     (74.6%)   (93.0%)    83.8%      3.8%      (27.3%)    (20.0%)     (6.3%)      7.0%      96.5%
  Diluted EPS - (x-1x Items)       248.8%   133.7%     48.3%        2.3%     0.5%     (12.7%)    14.4%        9.1%    (33.5%)   (61.9%)    10.1%      (29.8%)    (64.0%)    54.9%     (36.7%)     13.5%     314.5%     44.0%     (74.9%)   (93.0%)    77.5%      2.0%      (27.8%)    (20.2%)     (6.9%)      7.0%      94.6%


Source: First Solar and Maxim Group estimates




Maxim Group LLC                                                                                                                                                                                                                             9
                                                                                                                                                                                                                First Solar (FSLR)


Figure 13: FSLR Balance Sheet
 in $ millions                                                      2010                                           2011                                                 2012E                                         2013E
                                                  1Q         2Q            3Q       4Q         1Q         2Q               3Q         4Q              1QE        2QE            3QE      4QE        1QE        2QE            3QE     4QE
Assets:
 Cash & Equivalents                              $420.9     $510.5      $621.2     $765.7     $355.7     $357.5        $678.6        $605.6          $474.0     $383.4       $621.5     $832.9     $774.0     $913.5      $946.3    $1,114.3
  Marketable Securities - Current                $293.3     $286.0      $212.2     $167.9     $199.8     $107.0         $84.4         $66.1          $104.6     $154.0       $212.9     $219.3     $190.7     $169.9      $156.7     $152.8
  Restricted cash & investments - Current           $-        $-          $-         $-          $-         $-            $-            $-             $-          $-           $-         $-         $-         $-          $-        $-
  Inventories                                    $198.0     $194.3      $184.0     $195.9     $271.2     $323.0        $432.9        $475.9          $487.9     $493.1       $462.6     $436.4     $450.9     $435.0      $429.8     $419.3
  Balance of System Parts                           $-        $-          $-        $4.6       $16.0      $33.7         $43.3         $53.8          $58.1       $62.7       $61.5      $59.6      $57.8      $56.1       $54.4      $52.8
  Accounts Receivable Trade, Net                 $269.2     $256.3      $316.2     $305.5     $362.7     $542.0        $482.0        $310.6          $305.4     $336.5       $320.2     $305.2     $315.7     $303.4      $298.4     $294.7
  Accounts Receivable Unbilled, Net                 $-      $105.3      $148.5      $1.5       $10.6      $63.7        $325.6        $533.4          $541.4     $530.6       $504.0     $478.8     $490.8     $498.2      $523.1     $549.2
  Economic Development Funding Recievable           $-        $-          $-         $-          $-         $-            $-            $-             $-          $-           $-         $-         $-         $-          $-        $-
  Project Assets                                  $0.1       $0.1        $0.1        $-          $-      $145.4           $-            $-             $-          $-           $-         $-         $-         $-          $-        $-
  Deferred Project Costs                            $-      $127.3        $-         $-          $-         $-            $-            $-             $-          $-           $-         $-         $-         $-          $-        $-
  Deferred Tax Assets (net) - Current            $22.5      $19.2        $0.3       $0.4        $0.4      $3.6          $31.7         $41.1          $23.8       $33.7       $37.4       $36.8      $35.6      $34.3       $29.8     $29.5
  Prepaid Expenses & Other Current Assets        $200.5     $116.8      $132.4     $143.0     $177.8     $260.5        $352.0        $526.7          $454.8     $432.7       $416.2     $431.5     $478.6     $469.7      $485.9     $522.1
  Total Current Assets                          $1,404.5   $1,615.9    $1,614.8   $1,584.5   $1,394.3   $1,836.2      $2,430.5      $2,613.3        $2,450.0   $2,426.7     $2,636.2   $2,800.6   $2,794.2   $2,880.1    $2,924.4   $3,134.8
  Prop., Plant, & Equipment                     $1,030.2   $1,094.9    $1,244.6   $1,430.8   $1,549.5   $1,728.0      $1,840.3      $1,816.0        $2,018.5   $1,894.1     $1,961.6   $2,046.0   $2,046.0   $1,871.0    $1,871.0   $2,014.7
  Project Assets - Non-Current                   $131.9     $140.1      $296.5     $320.1     $384.4     $309.7        $282.8        $374.9    ##    $374.9     $403.0       $433.2     $465.7     $477.4     $489.3      $501.5     $514.1
  Deferred Tax Assets (net) - Non-Current        $150.0     $157.8      $257.7     $259.2     $265.6     $268.2        $278.8        $340.3          $340.3     $340.3       $340.3     $340.3     $340.3     $340.3      $340.3     $340.3
  Marketable Securities - Non-Current            $305.8     $164.0      $163.5     $180.3     $157.4      $51.0         $31.9        $116.2          $116.2     $116.2       $116.2     $116.2     $116.2     $116.2      $116.2     $116.2
  Restricted Investments                         $77.3      $81.1        $95.0      $86.0     $147.7     $174.7        $203.8        $200.6          $200.6     $180.6       $180.6     $180.6     $180.6     $180.6      $180.6     $180.6
  Investment in Related Party                    $25.0      $25.0        $25.0        $-         $-         $-            $-            $-             $-          $-           $-         $-         $-         $-          $-        $-
  Goodwill                                       $286.5     $286.5      $433.3     $433.3     $458.8     $458.8        $458.8         $65.4          $65.4       $65.4       $65.4       $65.4      $65.4      $65.4       $65.4     $65.4
  Inventories - Non-Current                      $26.9      $30.7        $36.4      $42.7      $30.6      $42.7         $48.2         $60.8          $65.3       $75.1       $86.4      $99.3      $106.8     $122.8      $141.2     $162.4
  Other Non-Current Assets                       $35.2      $35.4        $34.9      $43.5      $45.7      $69.9        $148.4        $190.3          $190.3     $190.3       $195.1     $199.9     $202.9     $208.0      $213.2     $218.5
  Total Assets                                  $3,473.5   $3,631.3    $4,201.8   $4,380.4   $4,434.0   $4,939.2      $5,723.3      $5,777.6        $5,821.4   $5,691.7     $6,014.9   $6,314.0   $6,329.7   $6,273.6    $6,353.8   $6,746.9
Liabilities & Shareholders' Equity:
  Short-Term Debt                                 $-         $-           $-         $-         $-         $-            $-            $-             $-          $-          $-         $-         $-         $-           $-        $-
  Current Portion of Long-Term Debt             $26.4      $24.5        $26.6      $26.6      $28.2      $28.3         $25.6         $44.5          $44.5       $44.5       $44.5      $44.5      $44.5      $44.5        $44.5     $44.5
  Accounts Payable¹                             $76.0      $68.3        $71.1      $82.3      $99.4     $189.9        $170.9        $176.4          $162.6     $164.4       $170.4     $158.7     $152.6     $161.4       $171.9    $169.2
  Income Tax Payable                            $15.7      $28.6        $17.6      $16.8      $28.1      $36.5         $33.4         $9.5            $9.5        $9.5        $9.5       $9.5       $9.5       $9.5         $9.5      $9.5
  Accrued Expenses                              $141.5     $183.9      $282.8     $244.3     $229.0     $242.3        $272.0        $406.7          $393.5     $410.9       $486.9     $531.6     $485.6     $477.1       $508.6    $529.6
  Other Current Liabilities                     $62.9      $20.0        $59.6      $99.7      $85.2      $94.9        $245.1        $336.6          $209.9     $186.8       $211.0     $253.9     $180.3     $182.4       $186.3    $191.3
  Total Current Liabilities                     $322.5     $325.2      $457.8     $469.7     $469.9     $591.9        $747.0        $973.7          $820.0     $816.1       $922.4     $998.2     $872.6     $874.9       $920.8    $944.1
  Accrued Collection & Recycling Liabilities    $97.8      $101.8      $128.7     $133.0     $155.6      $176.6        $185.2        $167.4          $172.4     $177.6       $182.9     $188.4     $194.0     $199.9      $205.9     $212.0
  Long-Term Debt                                $136.1     $114.2      $223.8     $210.8     $103.5      $332.5        $582.7        $619.1          $619.1     $464.5       $464.5     $449.8     $449.8     $449.8      $449.8     $449.8
  Other Liabilities - Non-Current               $70.2      $77.9        $90.2     $112.0     $139.1      $156.7        $182.6        $373.5          $524.4     $753.8       $841.5     $949.0     $910.9     $709.3      $706.1    $1,061.1
  Total Liabilities                             $626.7     $619.1      $900.4     $925.5     $868.1     $1,257.7      $1,697.5      $2,133.8        $2,136.0   $2,211.9     $2,411.2   $2,585.4   $2,427.2   $2,233.9    $2,282.6   $2,667.0
  Employee Stock Options on Redeemable Shares       $-         $-          $-         $-         $-         $-           $-            $-              $-         $-            $-        $-         $-         $-          $-         $-
  Common Stock                                    $0.1       $0.1        $0.1       $0.1       $0.1       $0.1          $0.1          $0.1            $0.1       $0.1         $0.1       $0.1       $0.1       $0.1        $0.1       $0.1
  Additional Paid-In Capital                    $1,674.5   $1,694.6    $1,820.3   $1,815.4   $1,834.5   $1,878.4      $1,965.8      $2,022.7        $2,022.7   $2,022.7     $2,022.7   $2,022.7   $2,022.7   $2,022.7    $2,022.7   $2,022.7
  Contingent consideration                        $2.8       $1.6        $1.6       $1.1       $1.1         $-           $-            $-              $-          $-           $-        $-         $-         $-           $-        $-
  Accumulated Earnings (Deficit)                $1,173.7   $1,332.8    $1,509.6   $1,665.6   $1,781.5   $1,842.7      $2,039.2      $1,626.1        $1,667.6   $1,461.9     $1,585.9   $1,710.9   $1,884.7   $2,021.9    $2,053.4   $2,062.2
  Accumulated Other Comprehensive Income         ($4.3)     ($16.8)     ($30.2)    ($27.2)    ($51.4)    ($39.6)       $20.7         ($5.0)          ($5.0)     ($5.0)       ($5.0)     ($5.0)     ($5.0)     ($5.0)      ($5.0)     ($5.0)
  Total Stockholders' Equity (Deficit)          $2,846.9   $3,012.2    $3,301.3   $3,454.9   $3,565.8   $3,681.5      $4,025.8      $3,643.9        $3,685.4   $3,479.7     $3,603.7   $3,728.7   $3,902.5   $4,039.7    $4,071.2   $4,080.0
  Total Liabilities & Shareholders' Equity      $3,473.5   $3,631.3    $4,201.8   $4,380.4   $4,434.0   $4,939.2      $5,723.3      $5,777.6        $5,821.4   $5,691.7     $6,014.9   $6,314.0   $6,329.7   $6,273.6    $6,353.8   $6,746.9

  Balance Sheet Analysis                          1Q         2Q          3Q         4Q         1Q         2Q            3Q            4Q             1QE        2QE          3QE        4QE        1QE        2QE          3QE       4QE
  Cash Per Share                                $8.30      $9.22       $9.62      $10.75     $6.38      $5.33         $8.73         $7.78           $6.68      $6.19        $9.59      $12.06     $11.03     $12.35       $12.54    $14.38
  Book Value Per Share                          $33.07     $34.86      $38.12     $39.79     $40.96     $42.24        $46.08        $42.17          $42.55     $40.07       $41.40     $42.73     $44.61     $46.06       $46.30    $46.29
  Tangible Book Value Per Share                 $29.74     $31.55      $33.11     $34.80     $35.69     $36.98        $40.83        $41.42          $41.79     $39.32       $40.65     $41.98     $43.86     $45.31       $45.56    $45.55
  Current Ratio                                   4.4        5.0           3.5      3.4        3.0        3.1              3.3        2.7             3.0        3.0            2.9      2.8        3.2        3.3            3.2     3.3
  Quick Ratio                                     3.7        4.4           3.1      3.0        2.4        2.6              2.7        2.2             2.4        2.4            2.4      2.4        2.7        2.8            2.7     2.9
  Cash Ratio                                      2.2        2.4           1.8      2.0        1.2        0.8              1.0        0.7             0.7        0.7            0.9      1.1        1.1        1.2            1.2     1.3
  Working Capital                               $1,082.1   $1,290.7    $1,157.1   $1,114.8   $924.4     $1,244.4      $1,683.5      $1,639.5        $1,630.0   $1,610.6     $1,713.9   $1,802.4   $1,921.7   $2,005.2    $2,003.6   $2,190.7
  Days Sales Outstanding                          42.7       55.4        52.4       45.3      59.2        102.3         72.3          115.0           112.3      81.2         69.5       67.0       71.3       73.7        86.7       90.2
  Days of Inventory                               62.3       57.6        34.8       56.3      79.3         86.0         62.2          101.4            83.7      59.4         51.3       49.5       58.5       55.8        54.0       51.3
  Accounts Payable Turnover                        3.1        3.1         5.4        3.2       2.4         1.5           3.1           2.3             3.0        4.3          4.5        4.7        4.3        4.1         3.9        4.1
  Payable Days                                    28.9       28.7        16.8       28.5      37.3         60.3         29.3           39.6            29.5      20.9         20.0       19.1       21.0       21.9        22.8       21.9
  Net Debt / EBITDA                              (2.4x)     (3.0x)      (2.4x)     (3.3x)     (2.4x)      (0.8x)           (0.6x)     0.0x            0.7x       0.2x         (1.5x)    (2.6x)     (1.7x)     (2.5x)       (6.6x)    (12.4x)
  Net Debt / Equity                             (19.4%)    (21.8%)     (17.7%)    (20.2%)    (11.9%)     (2.8%)           (3.8%)     (0.2%)           2.3%      (0.8%)       (9.0%)    (15.0%)    (12.1%)    (14.6%)      (15.0%)   (18.9%)
  Total Debt / Total Capital                     5.4%       4.4%        7.0%       6.4%       3.6%        8.9%            13.1%      15.4%           15.3%      12.8%        12.4%      11.7%      11.2%      10.9%        10.8%     10.8%
  NOPAT                                         $168.1     $159.1      $175.6     $148.2     $112.3      $53.7        $196.5        $105.1           $40.1      $93.1       $122.5     $124.0     $172.9     $136.5       $30.5      $7.7
  Return on Assets                               5.1%       4.6%        4.6%       3.7%       2.6%       1.2%          3.9%          2.0%             0.7%      1.6%         2.1%       2.1%       2.8%       2.2%         0.5%      0.1%
  Return on Invested Capital                    29.9%      26.2%       23.2%      23.1%      18.2%       12.7%        12.1%         11.5%            10.8%      13.0%       11.4%      12.4%      15.5%      16.7%        13.9%      10.9%
  Return on Average Equity                      28.5%      23.6%       22.6%      21.7%      19.0%       15.2%         14.5%         13.6%           11.3%      12.3%        9.7%       10.4%      13.6%      14.9%       12.2%      9.0%

Source: First Solar and Maxim Group estimates




Maxim Group LLC                                                                                                                                                                   10
                                                                                                                                                                                                                                                    First Solar (FSLR)


Figure 14: FSLR Cash Flow Model
                                                                                                                                                Quarterly                                                                                                               Annual
                                                                              2010                                             2011                                     2012E                                      2013E                      2009       2010      2011E      2012E      2013E
                                                               1QE         2QE        3QE        4QE        1QE         2QE           3QE      4QE          1QE     2QE        3QE        4QE        1QE       2QE       3QE        4QE        FY         FY         FY         FY          FY
Cash Flows from Operating Activities:
 Net Income                                                   $172.3     $159.0      $176.9     $155.9     $116.0      $61.1      $196.5     ($409.8)    $41.5     ($205.7)   $124.0     $124.9    $173.8     $137.2    $31.5       $8.8     $640.1     $664.2     ($36.2)    $84.8      $351.3
 Depreciation & Amortization                                   $39.1      $38.6      $35.2       $43.2      $48.3      $56.0       $60.8      $67.9      $68.2      $68.6      $51.4      $51.7      $52.0    $52.2      $52.5      $52.7     $129.6    $156.1     $233.0     $239.9      $209.4
 Impairment of Assets and Liabilities                           $1.3       $2.2       $5.7       ($3.5)      $0.6       $0.9          $-     $518.8        $-      $300.0        $-         $-         $-       $-         $-         $-        $1.1      $5.7     $520.3     $300.0        $-
 Impairment of Project Assets                                   $0.1       $0.5       $5.3       ($0.6)      $3.1       $0.3          $-        $-         $-         $-         $-         $-         $-       $-         $-         $-         $-       $5.3        $3.4       $-         $-
 Share-Based Compensation                                      $19.5      $25.0      $26.2       $28.9      $25.6      $31.3       $36.0      $36.4      $36.9      $37.5      $38.0      $38.6      $39.2    $39.8      $40.3      $41.0      $88.7     $99.6     $129.2     $151.0      $160.2
 Remeasurement of Monetary Assets and Liabilities               $0.6       $2.9       $0.2       ($3.0)      $1.4       $5.2          $-        $-         $-         $-         $-         $-         $-       $-         $-         $-       ($2.7)    $0.6         $6.6       $-         $-
 Deferred Income Taxes                                         ($2.7)     ($4.2)     ($14.5)    ($36.7)     ($12.5)    ($29.6)      ($6.7)    $60.4     ($26.3)    ($26.3)    ($26.3)    ($26.3)    ($26.3)   ($26.3)   ($26.3)     $78.8     ($35.0)   ($58.0)      $11.6    ($105.0)      $-
 Excess Tax Benefits from Stock Compensation                   ($1.6)      $1.6      ($17.3)    ($52.0)        $-      ($16.5)     ($19.9)    ($43.3)   ($23.9)    ($23.9)    ($23.9)    ($23.9)    ($23.9)   ($23.9)   ($23.9)     $71.8      ($4.9)   ($69.4)     ($79.8)    ($95.7)      $-
 Provision for Doubtful Accounts Receivable                    ($1.0)       $-        ($0.2)     $0.2          $-         $-          $-        $-         $-         $-         $-         $-         $-       $-         $-         $-        $1.0     ($1.0)        $-        $-         $-
 Inventory Valuation Adjustment                                  $-         $-          $-         $-          $-         $-          $-        $-         $-         $-         $-         $-         $-       $-         $-         $-         $-        $-          $-        $-         $-
 Gain on Sale of Investments (Net)                               $-       ($0.2)      ($0.1)     ($0.0)      ($0.1)     ($3.2)        $-        $-         $-         $-         $-         $-         $-       $-         $-         $-       ($0.1)    ($0.3)      ($3.3)      $-         $-
 Gain on Sale of Related Party Equity Investment               ($0.9)     ($0.9)      ($0.9)     ($0.9)        $-         $-          $-        $-         $-         $-         $-         $-         $-       $-         $-         $-         $-      ($3.6)        $-        $-         $-
 Other Operating Activities                                    ($0.4)     ($0.4)      ($0.4)     ($0.4)      ($0.4)     ($0.2)        $-        $-         $-         $-         $-         $-         $-       $-         $-         $-        $1.6     ($1.5)      ($0.6)      $-         $-
 Changes in Operating Assets and Liabilities                  ($195.1)   ($147.9)    $32.1      $218.7     ($225.9)   ($308.3)    ($148.7)   ($219.3)   ($80.7)    ($11.2)    $196.1     $146.7    ($234.5)    $4.5      $19.3     ($12.0)   ($144.3)   ($92.2)    ($902.1)   $251.0     ($222.7)
   Accounts Receivable, Trade                                 ($50.9)     $12.9      ($59.8)      $7.5     ($57.2)    ($179.3)     $60.0      $171.4       $5.1    ($31.1)     $16.4      $15.0     ($10.5)    $12.3      $5.0     $3.6      ($153.3)   ($90.3)      ($5.0)     $5.4      $10.5
   Accounts Receivable, Unbilled                                $0.1     ($105.3)    ($43.1)    $147.0      ($9.1)     ($53.1)   ($262.0)    ($207.8)     ($8.0)    $10.8     $26.5       $25.2     ($12.0)    ($7.4)   ($24.9)   ($26.2)       $0.1     ($1.4)    ($531.9)    $54.6     ($70.4)
   Inventories                                                ($58.8)      $3.7       $20.6     ($35.2)    ($75.4)     ($51.8)   ($109.9)     ($43.0)    ($12.1)    ($5.2)     $30.6      $26.2     ($14.5)    $15.9      $5.2     $10.5      ($52.1)   ($69.7)    ($280.0)    $39.5      $17.1
   Project Assets                                               $1.5       $0.9      ($12.0)    ($38.3)    ($64.2)     ($70.7)   $172.3       ($92.1)      $0.0    ($28.1)    ($30.2)    ($32.5)    ($11.6)   ($11.9)   ($12.2)   ($12.5)     ($12.5)   ($48.0)     ($54.7)   ($90.8)    ($48.3)
   Prepaid Expenses and Other Current Assets                  ($84.1)     $75.4      ($15.7)    ($17.0)     $52.1     ($132.9)    ($91.5)    ($174.7)    $72.0      $22.1     $16.5      ($15.3)    ($47.1)     $8.9    ($16.2)   ($36.2)     ($28.5)   ($41.4)    ($347.0)    $95.2     ($90.6)
   Other Assets                                                ($2.2)     ($2.2)      ($2.2)     ($2.2)    ($59.4)      $66.0     ($78.5)    ($104.9)    $16.0      $24.2     $30.2       $52.3     ($13.1)   ($15.7)    $16.5     $25.5       ($5.3)    ($8.9)    ($176.8)   $122.7      $13.2
   Accounts Payable, Accrued Expenses and Other Liabilities    ($0.7)    ($133.2)    $144.3     $157.1     ($12.7)    $113.5     $161.0       $231.7    ($153.7)    ($3.9)    $106.2      $75.9    ($125.7)     $2.4     $45.9     $23.3      $107.4    $167.6      $493.4     $24.5     ($54.1)
Net Cash Provided by Operating Activities                     $31.3       $76.3      $248.1     $349.8     ($43.8)    ($203.0)    $117.9      $11.0      $15.8     $139.0     $359.4     $311.7    ($19.7)    $183.5    $93.4     $241.1     $675.2     $705.5     ($117.9)   $826.0     $498.2
                                                                -           -           -          -          -          -           -          -          -          -          -          -
Cash Flows from Investing Activities:
 Purchases of Property, Plant, & Equipment                    ($106.0)   ($133.5)    ($137.6)   ($211.8)   ($169.0)   ($221.0)    ($223.9)   ($117.9)   ($202.5)   ($50.6)    ($67.5)    ($84.4)   ($72.9)    ($69.9)   ($79.0)    ($82.0)   ($279.9)   ($588.9)   ($731.8)   ($405.0)   ($303.8)
 Purchases of Marketable Securities                           ($383.8)    $116.5     ($133.9)    ($60.8)   ($157.2)    ($32.6)       $-         $-       ($62.1)   ($61.3)    ($74.3)    ($31.2)      $-        $-        $-         $-      ($607.4)   ($462.1)   ($189.7)   ($228.9)      $-
 Proceeds from Maturities of Marketable Securities              $33.8     $25.5        $1.7       $1.7      $67.4      $20.3      $215.9      $54.0      $23.7      $11.8     $15.4       $24.7     $28.6     $20.8     $13.2       $3.9      $149.1      $62.6    $357.6      $75.7      $66.5
 Proceeds from Sales of Marketable Securities                  $200.2      $3.7       $205.9      $84.5     $79.1     $210.8         $-         $-         $-         $-        $-          $-        $-        $-        $-         $-       $115.8     $494.3    $289.9        $-         $-
 Investment in Note Receivable                                    $-        $-           $-         $-        $-         $-          $-         $-         $-         $-        $-          $-        $-        $-        $-         $-       ($99.6)       $-        $-         $-         $-
 Payments Received on Notes Receivable                          $35.8     $25.8          $-         $-        $-         $-          $-         $-         $-         $-        $-          $-        $-        $-        $-         $-        $25.4      $61.7       $-         $-         $-
 Sale of Purchase from Related Party                              $-        $-           $-       $28.6       $-         $-          $-         $-         $-         $-        $-          $-        $-        $-        $-         $-          $-       $28.6       $-                    $-
 Increase in Restricted Investments                            ($43.4)     $0.4          $-         $-      ($62.7)    ($23.3)       $-         $-         $-       $20.0       $-          $-        $-        $-        $-         $-        ($4.2)    ($43.1)    ($86.1)   $20.0         $-
 Acquisitions, Net of Cash Required                               $-        $-       ($296.5)       $-      ($21.1)      $-          $-         $-         $-         $-        $-          $-        $-        $-        $-         $-          $-     ($296.5)    ($21.1)                 $-
 Other Investing Activities                                      $1.0      $0.3        ($0.0)     $0.0       $0.0       $0.2        $0.2       $0.2       $0.2      $0.2       $0.2       $0.2       $0.2      $0.2      $0.2       $0.2       ($0.9)     $1.3       $0.6      $0.8        $0.8

Net Cash Used In Investing Activities                         ($262.4)    $38.6      ($360.5)   ($157.8)   ($263.4)   ($45.6)      ($7.8)    ($63.7)    ($240.7)   ($79.9)    ($126.1)   ($90.6)   ($44.1)    ($48.8)   ($65.6)    ($77.9)   ($701.7)   ($742.1)   ($380.5)   ($537.4)   ($236.4)
Cash Flows from Financing Activities:
 Proceeds from Stock Option Exercises                           $1.1       $2.6       $3.0       $2.6        $2.7      $4.9        $4.9       $4.9          $4.9     $4.9      $4.9       $4.9      $4.9       $4.9      $4.9       $4.9       $6.0      $9.4       $17.5      $19.6      $19.6
 Proceeds from Issuance of Common Stock                          $-         $-          $-         $-         $-         $-         $-         $-            $-       $-        $-         $-        $-         $-        $-         $-         $-         $-         $-         $-         $-
 Repayment of Long-Term Debt                                   ($0.7)    ($13.3)      ($0.4)    ($13.4)    ($113.9)    ($0.4)       $-       ($14.7)         $-    ($154.7)     $-       ($14.7)     $-         $-        $-         $-      ($78.2)    ($27.9)    ($129.0)   ($169.4)      $-
 Proceeds from Notes Payable to a Related Party                  $-         $-          $-         $-         $-         $-         $-         $-            $-       $-        $-         $-        $-         $-        $-         $-         $-         $-         $-         $-         $-
 Repayment of Notes Payable to a Related Party                   $-         $-          $-         $-         $-         $-         $-         $-            $-       $-        $-         $-        $-         $-        $-         $-         $-         $-         $-         $-         $-
 Proceeds from Issuance of Debt, Net of Issuance Costs           $-         $-       $100.0        $-         $-      $224.4      $250.3     $51.1           $-       $-        $-         $-        $-         $-        $-         $-       $44.7     $100.0     $525.8        $-         $-
 Excess Tax Benefit from Share-Based Compensation               $1.6      ($1.6)     $102.4     ($33.0)       $-      $16.5       $17.3      ($34.7)         $-       $-        $-         $-        $-         $-        $-         $-        $4.9      $69.4      ($0.8)       $-         $-
 Proceeds from Economic Development Funding                      $-         $-          $-         $-         $-        $3.1        $-         $-            $-       $-        $-         $-        $-         $-        $-         $-        $0.6        $-        $3.1        $-         $-
 Other Financing Activities                                      $-       ($0.0)      ($0.0)     ($0.4)     ($0.1)     ($0.1)       $-         $-            $-       $-        $-         $-        $-         $-        $-         $-       ($0.0)     ($0.4)     ($0.2)       $-         $-

Net Cash Provided by Financing Activities                      $2.0      ($12.3)     $205.0     ($44.2)    ($111.3)   $248.4      $272.5      $6.6          $4.9   ($149.8)    $4.9      ($9.8)     $4.9       $4.9      $4.9       $4.9     ($22.0)    $150.5     $416.3     ($149.7)    $19.6

Effect of Exchange Rate Changes on Cash & Cash Equiv.          ($14.5)   ($13.1)     $18.2       ($3.3)      $8.5      $1.9         $-         $-          $-        $-         $-         $-        $-         $-        $-        $-        ($3.2)    ($12.7)     $10.5      $0.0       $0.0
Net Increase (decrease) in Cash                               ($243.6)   $89.6       $110.7     $144.5     ($410.0)    $1.8       $382.6     ($46.1)    ($220.0)   ($90.6)    $238.1     $211.3    ($58.9)    $139.6    $32.7     $168.1     ($51.7)    $101.2     ($71.7)    $138.8     $281.5

Beginning Cash & Equivalent                                   $664.5     $420.9      $510.5     $621.2     $765.7     $355.7      $357.5     $740.1     $694.0     $474.0     $383.4     $621.5    $832.9     $774.0    $913.5     $946.3    $716.2     $664.5     $765.7     $694.0      $832.9
Ending Cash & Equivalent                                      $420.9     $510.5      $621.2     $765.7     $355.7     $357.5      $740.1     $694.0     $474.0     $383.4     $621.5     $832.9    $774.0     $913.5    $946.3    $1,114.3   $664.5     $765.7     $694.0     $832.9     $1,114.3

Cash Flow Metrics:
 Cash Flow From Operating Activities                            $31.3      $76.3     $248.1     $349.8      ($43.8)   ($203.0)     $117.9     $11.0      $15.8     $139.0     $359.4     $311.7    ($19.7)    $183.5    $93.4     $241.1     $675.2     $705.5     ($117.9)   $826.0     $498.2
 - Capital Expenditures                                       ($106.0)   ($133.5)    ($137.6)   ($211.8)   ($169.0)   ($221.0)    ($223.9)   ($117.9)   ($202.5)   ($50.6)    ($67.5)    ($84.4)   ($72.9)    ($69.9)   ($79.0)   ($82.0)    ($279.9)   ($588.9)   ($731.8)   ($405.0)   ($303.8)
 Free Cash Flow                                                ($74.7)    ($57.2)    $110.4     $138.0     ($212.8)   ($424.0)    ($106.0)   ($106.9)   ($186.7)    $88.4     $291.9     $227.4    ($92.6)    $113.6    $14.4     $159.1     $395.3     $116.6     ($849.6)   $421.0     $194.5

 / Average Shares Outstanding                                  86.1       86.4        86.6      86.8        87.1       87.2        87.4       86.4       86.6      86.8        87.0      87.3       87.5       87.7      87.9      88.1        82.1     85.0        86.5       86.1       86.9
 = Free Cash Flow per Share                                   ($0.87)    ($0.66)     $1.28      $1.59      ($2.44)    ($4.86)     ($1.21)    ($1.24)    ($2.16)    $1.02      $3.35      $2.61     ($1.06)    $1.30     $0.16      $1.80      $4.81     $1.37      ($9.82)    $4.89       $2.24

 Cash Flow From Operating Activities                          $31.3       $76.3      $248.1     $349.8     ($43.8)    ($203.0)    $117.9      $11.0      $15.8     $139.0     $359.4     $311.7    ($19.7)    $183.5    $93.4     $241.1     $675.2     $705.5     ($117.9)   $826.0     $498.2
 / Average Shares Outstanding                                  86.1        86.4       86.6       86.8       87.1        87.2       87.4        86.4       86.6      86.8       87.0       87.3      87.5       87.7      87.9      88.1       82.1       85.0        86.5       86.1      86.9
 = Operating Cash Flow per Share                              $0.36       $0.88      $2.86       $4.03     ($0.50)     ($2.33)    $1.35       $0.13      $0.18      $1.60     $4.13       $3.57    ($0.23)    $2.09     $1.06      $2.73     $8.22       $8.30      ($1.36)    $9.60      $5.73


Source: First Solar and Maxim Group estimates
Note: First Solar does not report an indirect cash flow statement, so this represents our estimate based on its quarterly balance sheet
and other commentary.




Maxim Group LLC                                                                                                                                                                                                            11
                                                                                                                                      First Solar (FSLR)


                                                                 DISCLOSURES




                                                                    Source: Investars

     Maxim Group LLC Stock Rating System                                                                As of:                    4/23/2012
                                                                                               % of Coverage                  % of Ratings
                                                                                                 Universe                for which Firm provided
                    Expected Performance*                                                        with Rating      Banking Services in the last 12 months
          Buy       Expected total return of 15% or more over next 12 months                        68.7%                           10.3%
         Hold       Expected total return of plus or minus 14% over next 12 months                  20.2%                           5.0%
          Sell      Expected total negative return of at least 15% over next 12 months              11.1%                           0.0%
     * Relative to Nasdaq Composite.
     An Under Review (UR) rating represents a stock that the Firm has temporarily placed under review due to a material change.



Maxim Group makes a market in First Solar, Inc., Total SA, Sunpower Corp., Quanta Services, Inc.,
                                 and EMCOR Group, Inc.

We, Aaron Chew and Francesco Citro, attest that the views expressed in this research report accurately
reflect our personal views about the subject security and issuer. Furthermore, no part of our compensation
was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this
research report.
The research analyst(s) primarily responsible for the preparation of this research report have received
compensation based upon various factors, including the firm’s total revenues, a portion of which is
generated by investment banking activities.
Valuation Methods: The valuation methodology used in deriving our rating and price target on FSLR is
based on both a discounted cash flow analysis and the average sector EV/EBIT ratio of its normalized
project development business. For the DCF, we assume (1) $3 billion in contracted cash flows ($3.4 billion
in gross project cash flows net of an estimated $400m in project opex), (2) a terminal value of its project
development business of $185 based on 6x EV/EBITDA and a 1.5% terminal cash flow rate and (3) a
terminal liability of $400m for its manufacturing facilities that we assume will eventually need to be clothe
lack of profitability vs. c-Si pricing. Supporting this approach, as we expect FSLR to transform from a
manufacturing-focused company to a primarily a project developer, we apply the average EV/EBIT multiple
of the publicly-traded project developers of 8x to our estimate for normalized EBIT of $125m. Both
methodologies support our price target of $9.




Maxim Group LLC                                                                                                                                            12
                                                                                         First Solar (FSLR)

Price Target and Investment Risks: Aside from general market and other economic risks, specific
downside risks to our Sell rating on First Solar, Inc. (FSLR) are: (1) system pricing holds up better than we
forecast, (2) Chinese competition becomes less of a threat as strained balance sheets drive many players out
of business, (3) cost declines and/or efficiency improvements outpace our expectations, (4) balance of
system costs fall more than anticipated and yield greater profitability of its current pipeline, (5) major
project/EPC contracts at higher than expected pricing drives upside to earnings in 2014 and beyond, and (6)
FSLR is acquired by a larger company seeking quick entry into solar with dominant market share
responding to the decline in its market value.




                                             RISK RATINGS

Risk ratings take into account both fundamental criteria and price volatility.

Speculative –
Fundamental Criteria: This is a risk rating assigned to early-stage companies with minimal to no revenues,
lack of earnings, balance sheet concerns, and/or a short operating history. Accordingly, fundamental risk is
expected to be significantly above the industry.
Price Volatility: Because of the inherent fundamental criteria of the companies falling within this risk
category, the price volatility is expected to be significant with the possibility that the investment could
eventually be worthless.
Speculative stocks may not be suitable for a significant class of individual investors.

High – Fundamental Criteria: This is a risk rating assigned to companies having below-average revenue
and earnings visibility, negative cash flow, and low market cap or public float. Accordingly, fundamental
risk is expected to be above the industry.
Price volatility: The price volatility of companies falling within this category is expected to be above the
industry.
High-risk stocks may not be suitable for a significant class of individual investors.

Medium –
Fundamental Criteria: This is a risk rating assigned to companies that may have average revenue and
earnings visibility, positive cash flow, and is fairly liquid.
Accordingly, both price volatility and fundamental risk are expected to approximate the industry average.

Low –
Fundamental Criteria: This is a risk rating assigned to companies that may have above-average revenue and
earnings visibility, positive cash flow, and is fairly liquid.
Accordingly, both price volatility and fundamental risk are expected to be below the industry.




Maxim Group LLC                                                                                             13
                                                                                              First Solar (FSLR)


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Maxim Group LLC                                                                                                   14

				
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