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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

Form 8-K

 
 
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 13, 2019
 
 
SunPower Corporation
(Exact name of registrant as specified in its charter)

 
 
001-34166
(Commission File Number)
 
Delaware
94-3008969
(State or other jurisdiction
of incorporation)
(I.R.S. Employer
Identification No.)

77 Rio Robles, San Jose, California 95134
(Address of principal executive offices, with zip code)

(408) 240-5500
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 






Item 2.02.
Results of Operations and Financial Condition.

On February 13, 2019, SunPower Corporation, a Delaware corporation (the “Company”), issued a press release, included as Exhibit 99.1 hereto, announcing its results of operations for its fourth fiscal quarter ended December 30, 2018.

The information furnished in Item 2.02 and Item 9.01 of this Current Report on Form 8-K and Exhibit 99.1 hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01.
Financial Statements and Exhibits.

(d) Exhibits
 
Exhibit No.
Description
Press release dated February 13, 2019




SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
SUNPOWER CORPORATION
 
 
 
February 13, 2019
By:
/S/ MANAVENDRA S. SIAL
 
Name:
Manavendra S. Sial
 
Title:
Executive Vice President and
Chief Financial Officer




Exhibit


Exhibit 99.1

FOR IMMEDIATE RELEASE

Contacts:

Investors
Bob Okunski
408-240-5447
Bob.Okunski@sunpower.com

Media
Natalie Wymer
408-457-2348
Natalie.Wymer@sunpower.com


SunPower Reports Fourth Quarter and Fiscal Year 2018 Results
Solid Financial Performance, NGT Expansion, DG Strength
SunPower to Host Capital Markets Day on March 27, 2019

SAN JOSE, Calif., Feb. 13, 2019 - SunPower Corp. (NASDAQ:SPWR) today announced financial results for its fourth quarter ended December 30, 2018.

Fourth Quarter Highlights
•
Solid financial performance: strong cash generation quarter
•
Significantly delevered balance sheet: more than 50 percent sequential net debt reduction
•
Completed previously announced business re-segmentation
•
SunPower Energy Services (SPES)
◦
North American residential annual deployments increased 15 percent
◦
Record commercial bookings quarter: 80 percent of 2019 forecast in backlog
•
SunPower Technologies (SPT)
◦
Initial production of company’s Next Generation Technology (NGT) panels
◦
Expanding NGT capacity: initiated process for second manufacturing line

($ Millions, except percentages and per-share data)
4th Quarter 2018
3rd Quarter 2018
4th Quarter 20173
FY 2018
FY 20173
GAAP revenue
$456.8
$428.3
$651.1
$1,726.1
$1,794.0
GAAP gross margin
(1.7)%
2.3%
(2.0)%
(17.2)%4
(1.0)%
GAAP net loss
$(158.2)
$(89.8)
$(572.7)
$(811.1)4
$(929.1)
GAAP net loss per diluted share
$(1.12)
$(0.64)
$(4.10)
$(5.76)4
$(6.67)
Non-GAAP revenue1
$525.4
$443.4
$824.0
$1,814.9
$2,128.6
Non-GAAP gross margin1,2
6.9%
4.7%
11.9%
7.5%
11.1%
Non-GAAP net income (loss)1,2
$(30.3)
$(40.9)
$35.8
$(101.4)
$(34.4)
Non-GAAP net income (loss) per diluted share1,2
$(0.21)
$(0.29)
$0.26
$(0.72)
$(0.25)
Adjusted EBITDA1,2
$13.6
$6.7
$100.3
$111.2
$189.7
Net Debt
$589.6
$1,254.4
$1,169.8
$589.6
$1,169.8
    
1Information about SunPower's use of non-GAAP financial information, including a reconciliation to U.S. GAAP, is provided under "Use of Non-GAAP Financial Measures" below.
2Excludes polysilicon costs related to its above market polysilicon contracts.
3The company adopted the new revenue recognition standard effective January 1, 2018. The prior periods presented here have been restated to reflect adoption of the new standard.
4Includes impairment charges of approximately $369.2 million for legacy manufacturing assets of which $355.1 million is recorded in GAAP gross margin in second quarter 2018.





“I’m pleased we were able to post solid financial performance for the quarter while achieving a number of strategic milestones including re-segmenting our business structure to improve transparency and accountability, the initial production of our NGT cell and panel technology, as well as further delevering our balance sheet through the successful deconsolidation of our residential lease portfolio,” said Tom Werner, SunPower CEO and chairman of the board.

SunPower Energy Services (SPES) - North American Residential and Commercial Businesses
“We executed well in our North American distributed generation (DG) business as demand remained strong in the fourth quarter. In particular, our U.S. residential business saw annual deployment growth of more than 15 percent. We saw increased demand for our complete residential Equinox solution , further traction for our loan product, and expanded our leadership position in the new homes channel with partnerships with 17 of the top 20 U.S. new home builders. Finally, we continue to see strong interest in our residential storage and services offerings and remain on plan to launch our Equinox residential storage solution this year.

“In Commercial, we remain the market share leader. For the quarter, we posted record bookings from both new and repeat customers including Cabot and Walmart. With the addition of these orders, we now have material revenue and volume visibility for the second half of 2019 with more than 80 percent of our 2019 commercial forecast already in backlog.

“We also continue to see significant interest in our Helix solar-plus-storage solution with attach rates of 35 percent. With the continuing success of the rollout of our Helix storage solution, we see significant opportunity in bringing this industry leading technology to our commercial installed base of more than 1.3 gigawatts (GW).

SunPower Technologies (SPT) - Manufacturing, International DG / Power Plant panel businesses
“First, we were pleased to appoint Jeff Waters as our new SPT business unit CEO during the quarter. Jeff brings a wealth of technology, operational and international business expertise to our team and we look forward to working together as he leads our manufacturing, research and development (R&D) and international downstream activities.

“We made significant progress on NGT as we started initial customer shipments for this industry leading technology in the fourth quarter of 2018. Additionally, we have already started the process to ramp our second manufacturing line which will more than double our NGT name plate capacity to approximately 250 MW by the end of 2019. Also, we recently began production of our P-Series technology at our manufacturing facility in Oregon and expect to ship up to 150 MW of P-Series from this facility this year, expanding our DG product offering in the U.S.

“SPT demand also remained solid in the quarter as we saw continued strength in our EMEA DG business and increased bookings in our international power plant supply agreement business. With these orders, we now have more than 750 MW of our 2019 international business in backlog.

Business Segmentation
“Finally, we materially completed our corporate transformation efforts during the quarter. As we have mentioned, over the last year, we have successfully simplified our business model, delevered our balance sheet and reduced operating expenses. We focused our investments in those areas that we believe offer the best opportunities for growth including our industry leading NGT cell and panel technology, solar-plus-storage solutions for our DG business, our digital platform to improve customer service and satisfaction, as well our energy services offerings,” Werner concluded.

“Strong execution enabled us to achieve our strategic initiatives for the quarter,” said Manavendra Sial, SunPower chief financial officer. “With the sale and deconsolidation of our residential lease portfolio during the quarter, we have simplified our financial statements and reduced our net debt by more than 50 percent to less than $600 million by the end of the year. Additionally, we improved our cash position and prudently managed our operating expenses while further investing in our growth initiatives. With the completion of our strategic transformation, DG-focused strategy and commitment to technological innovation, we are well positioned for sustainable profitability in 2019.”

Fourth quarter fiscal year 2018 non-GAAP results exclude net adjustments that, in the aggregate, improved non-GAAP earnings by $127.9 million, including $81.3 million related to impairment and sale of residential lease assets, $37.2 million related to cost of above-market polysilicon, $11.0 million related to sale-leaseback transactions, $6.4 million related to stock-based compensation expense, $1.9 million related to intangibles, $1.3 million related to business reorganization costs and, partially offset by $6.6 million related to tax effect, $3.1 million acquisition-related and other costs, $1.1 million related to restructuring expense, and $0.5 million related to utility and power plant projects.

Financial Outlook




The company expects financial performance to improve on a quarterly basis throughout fiscal year 2019 with performance weighted towards the second half of the year given its record commercial bookings in the fourth quarter of 2018 as well as normal seasonality in its residential business. The company also expects fiscal year 2019 adjusted EBITDA to increase approximately 60 percent on a normalized basis adjusting for non-controlling interest due to the sale of its residential lease portfolio, as well as the impact of Section 201 tariffs paid during the year, both of which will not occur in 2019. The company believes that the change in its leasing business structure will improve lease economics starting in 2019. The company will provide additional details on its 2019 financial guidance at its Capital Markets Day on March 27, 2019.

Specifically, the company's first quarter fiscal year 2019 GAAP and non-GAAP guidance is as follows: On a GAAP basis, revenue of $290 million to $330 million, gross margin of (3) percent to 0 percent and a net loss of $70 million to $50 million. On a non-GAAP basis, the company expects revenue of $350 million to $390 million, gross margin of 3 percent to 5 percent, Adjusted EBITDA of $(40) million to $(20) million and MW deployed in the range of 360 MW to 400 MW.

The company's fiscal year 2019 GAAP and non-GAAP guidance is as follows: revenue of $1.8 billion to $1.9 billion on a GAAP basis and $1.9 billion to $2.0 billion on a non-GAAP basis, GW deployed in the range of 1.9 GW to 2.1 GW, non-GAAP operational expenses of less than $280 million, capital expenditures of approximately $75 million and Adjusted EBITDA of $80 million to $110 million.

Capital Markets Day

SunPower will discuss its strategic outlook as well as provide additional details related to its fiscal year 2019 financial performance at its Capital Markets Day to be held on March 27, 2019 in New York City starting at 9:00 a.m. Eastern Time. Please note that the entire event will be webcast and relevant materials will be posted to the company’s website prior to the event. To register for and listen to the webcast, investors are encouraged to visit the company’s Events and Presentations section of the SunPower Investor Relations page at http://investors.sunpower.com/events.cfm prior to the event.

The company will also host a conference call for investors this afternoon to discuss its fourth quarter 2018 performance at 1:30 p.m. Pacific Time. The call will be webcast and can be accessed from SunPower’s website at http://investors.sunpower.com/events.cfm.

This press release contains both GAAP and non-GAAP financial information. Non-GAAP figures are reconciled to the closest GAAP equivalent categories in the financial attachment of this press release. Please note that the company has posted supplemental information and slides related to its fourth quarter 2018 performance on the Events and Presentations section of SunPower’s Investor Relations page at http://investors.sunpower.com/events.cfm. The capacity of power plants in this release is described in approximate MW on a direct current (dc) basis unless otherwise noted.

About SunPower
As one of the world's most innovative and sustainable energy companies, SunPower Corporation (NASDAQ:SPWR) provides a diverse group of customers with complete solar solutions and services. Residential customers, businesses, governments, schools and utilities around the globe rely on SunPower's more than 30 years of proven experience. From the first flip of the switch, SunPower delivers maximum value and superb performance throughout the long life of every solar system. Headquartered in Silicon Valley, SunPower has dedicated, customer-focused employees in Africa, Asia, Australia, Europe, North and South America. For more information about how SunPower is changing the way our world is powered, visit www.sunpower.com.


Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding: (a) our plans and expectations regarding manufacturing expansion, and production goals and ramps, including the timing of our ramp of NGT production and planned product shipments, and plans for P-Series manufacturing and product shipments from our facility in Oregon; (b) the impact of our corporate transformation initiatives, including efforts to delever our balance sheet, simplify our financial statements, and re-segment our business structure, on our transparency, profitability, financial performance, and results of operations; (c) our expectations and plans regarding demand, revenue and volume, market opportunity, product focus and adoption, and market share growth; (d) our expected areas of focus, including with respect to specific products and offerings and lines of business; (e) our expectations regarding our future financial performance, including with respect to EBITDA, margins, profitability, and tariff impact; (f) predictions regarding trends and seasonality in our overall results and those of our business lines; (g) our positioning for future success and profitability and long-term competitiveness, and our ability to achieve our financial and strategic goals; (h) our plans for a Capital Markets Day and the topics we expect to discuss; (i) our first quarter fiscal 2019 guidance, including GAAP revenue, gross margin, and net loss, as well as non-GAAP revenue, gross margin, Adjusted EBITDA, and MW deployed, and related assumptions; and (j) fiscal year 2019 guidance, including expected quarterly performance improvement and weighting, GAAP revenue, gross margin, and net loss, as well as non-GAAP GW deployed, Adjusted EBITDA, non-GAAP revenue, gross margin, Adjusted EBITDA and MW deployed, and related assumptions. These forward-looking statements are based on our current assumptions, expectations and beliefs and involve substantial risks and uncertainties that may cause results, performance or achievement to materially differ from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: (1) competition in the




solar and general energy industry and downward pressure on selling prices and wholesale energy pricing; (2) our liquidity, substantial indebtedness, and ability to obtain additional financing for our projects and customers; (3) changes in public policy, including the imposition and applicability of tariffs; (4) regulatory changes and the availability of economic incentives promoting use of solar energy; (5) challenges inherent in constructing certain of our large projects, including regulatory hurdles and other difficulties that may arise; (6) the success of our ongoing research and development efforts and our ability to commercialize new products and services, including products and services developed through strategic partnerships; (7) fluctuations in our operating results; (8) appropriately sizing our manufacturing capacity and containing manufacturing and logistics difficulties that could arise; (9) challenges managing our acquisitions, joint ventures and partnerships, including our ability to successfully manage acquired assets and supplier relationships; (10) challenges in executing transactions key to our strategic plans; and (11) our ability to successfully implement actions to complete our restructuring plan and associated initiatives, including plans to streamline our business and focus.  A detailed discussion of these factors and other risks that affect our business is included in filings we make with the Securities and Exchange Commission (SEC) from time to time, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading “Risk Factors.”  Copies of these filings are available online from the SEC or on the SEC Filings section of our Investor Relations website at investors.sunpower.com. All forward-looking statements in this press release are based on information currently available to us, and we assume no obligation to update these forward-looking statements in light of new information or future events.



©2019 SunPower Corporation. All rights reserved. SUNPOWER, the SUNPOWER logo, EQUINOX and HELIX are trademarks or registered trademarks of SunPower Corporation in the U.S. and other countries as well.






SUNPOWER CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
Dec. 30, 2018
 
Dec. 31, 2017
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
309,407

 
$
435,097

Restricted cash and cash equivalents, current portion
41,762

 
43,709

Accounts receivable, net
175,605

 
204,966

Contract assets
58,994

 
35,074

Inventories
308,146

 
352,829

Advances to suppliers, current portion
37,878

 
30,689

Project assets - plants and land, current portion
10,796

 
103,063

Prepaid expenses and other current assets
131,183

 
146,209

Total current assets
1,073,771

 
1,351,636

 
 
 
 
Restricted cash and cash equivalents, net of current portion
12,594

 
65,531

Restricted long-term marketable securities
5,955

 
6,238

Property, plant and equipment, net
839,871

 
1,147,845

Solar power systems leased and to be leased, net
92,557

 
369,218

Advances to suppliers, net of current portion
133,694

 
185,299

Long-term financing receivables, net
19,592

 
330,672

Other intangible assets, net
12,582

 
25,519

Other long-term assets
162,033

 
546,698

Total assets
$
2,352,649

 
$
4,028,656

 
 
 
 
Liabilities and Equity
 
 
 

Current liabilities:
 
 
 

Accounts payable
$
325,550

 
$
406,902

Accrued liabilities
235,252

 
231,771

Contract liabilities, current portion
104,130

 
101,723

Short-term debt
40,074

 
58,131

Convertible debt, current portion
—

 
299,685

Total current liabilities
705,006

 
1,098,212

 
 
 
 
Long-term debt
40,528

 
430,634

Convertible debt, net of current portion
818,356

 
816,454

Contract liabilities, net of current portion
99,509

 
133,390

Other long-term liabilities
839,136

 
842,342

Total liabilities
2,502,535

 
3,321,032

 
 
 
 
Redeemable noncontrolling interests in subsidiaries
—

 
15,236

 
 
 
 
Equity:
 
 
 

Preferred stock
—

 
—

Common stock
141

 
140

Additional paid-in capital
2,463,370

 
2,442,513





Accumulated deficit
(2,480,988
)
 
(1,669,897
)
Accumulated other comprehensive loss
(4,150
)
 
(3,008
)
Treasury stock, at cost
(187,069
)
 
(181,539
)
Total stockholders' equity
(208,696
)
 
588,209

Noncontrolling interests in subsidiaries
58,810

 
104,179

Total equity
(149,886
)
 
692,388

Total liabilities and equity
$
2,352,649

 
$
4,028,656






SUNPOWER CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 30, 2018
 
September 30, 2018
 
December 31, 2017
 
December 30, 2018
 
December 31, 2017
Revenue:
 
 
 
 
 
 
 
 
 
 
SunPower Energy Services
 
$
265,427

 
$
263,576

 
$
259,260

 
$
1,045,614

 
$
910,206

SunPower Technologies
 
277,256

 
289,630

 
541,415

 
1,069,010

 
1,350,790

Intersegment eliminations
 
(85,846
)
 
(124,943
)
 
(149,541
)
 
(388,539
)
 
(466,949
)
Total revenue
 
456,837

 
428,263

 
651,134

 
1,726,085

 
1,794,047

Cost of revenue:
 
 
 
 
 
 
 
 
 
 
SunPower Energy Services
 
245,301

 
217,196

 
249,688

 
889,410

 
820,628

SunPower Technologies
 
296,872

 
307,527

 
553,222

 
1,496,909

 
1,430,539

Intersegment eliminations
 
(77,765
)
 
(106,337
)
 
(138,999
)
 
(363,153
)
 
(438,475
)
Total cost of revenue
 
464,408

 
418,386

 
663,911

 
2,023,166

 
1,812,692

Gross profit (loss)
 
(7,571
)
 
9,877

 
(12,777
)
 
(297,081
)
 
(18,645
)
Operating expenses:
 
 
 
 
 
 
 
 
 
 
Research and development
 
15,481

 
15,898

 
20,400

 
81,705

 
82,247

Sales, general and administrative
 
53,839

 
76,069

 
72,765

 
260,111

 
278,645

Restructuring charges
 
(1,107
)
 
3,923

 
2,769

 
17,497

 
21,045

Impairment and sale of residential lease assets
 
81,086

 
53,537

 
624,335

 
251,984

 
624,335

Gain on business divestiture
 
—

 
(59,347
)
 
—

 
(59,347
)
 
—

Total operating expenses
 
149,299

 
90,080

 
720,269

 
551,950

 
1,006,272

Operating loss
 
(156,870
)
 
(80,203
)
 
(733,046
)
 
(849,031
)
 
(1,024,917
)
Other income (expense), net:
 
 
 
 
 
 
 
 
 
 
Interest income
 
777

 
1,087

 
139

 
3,057

 
2,100

Interest expense
 
(30,214
)
 
(25,973
)
 
(24,851
)
 
(108,011
)
 
(90,288
)
Other, net
 
6,539

 
(3,642
)
 
1,468

 
55,314

 
(87,645
)
Other expense, net
 
(22,898
)
 
(28,528
)
 
(23,244
)
 
(49,640
)
 
(175,833
)
Loss before income taxes and equity in earnings (losses) of unconsolidated investees
 
(179,768
)
 
(108,731
)
 
(756,290
)
 
(898,671
)
 
(1,200,750
)
Benefit from (provision for) income taxes
 
8,379

 
(3,680
)
 
2,870

 
(1,010
)
 
3,944

Equity in earnings (losses) of unconsolidated investees
 
(757
)
 
(1,500
)
 
(146
)
 
(17,815
)
 
25,938

Net loss
 
(172,146
)
 
(113,911
)
 
(753,566
)
 
(917,496
)
 
(1,170,868
)
Net loss attributable to noncontrolling interests and redeemable noncontrolling interests
 
13,972

 
24,085

 
180,915

 
106,405

 
241,747

Net loss attributable to stockholders
 
$
(158,174
)
 
$
(89,826
)
 
$
(572,651
)
 
$
(811,091
)
 
$
(929,121
)





Net loss per share attributable to stockholders:
 
 
 
 
 
 
 
 
 
 
- Basic
 
$
(1.12
)
 
$
(0.64
)
 
$
(4.10
)
 
$
(5.76
)
 
$
(6.67
)
- Diluted
 
$
(1.12
)
 
$
(0.64
)
 
$
(4.10
)
 
$
(5.76
)
 
$
(6.67
)
Weighted-average shares:
 
 
 
 
 
 
 
 
 
 
- Basic
 
141,136

 
141,027

 
139,613

 
140,825

 
139,370

- Diluted
 
141,136

 
141,027

 
139,613

 
140,825

 
139,370






SUNPOWER CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 30, 2018
 
September 30, 2018
 
December 31, 2017
 
December 30, 2018
 
December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
Net loss
 
$
(172,146
)
 
$
(113,911
)
 
$
(753,566
)
 
$
(917,497
)
 
$
(1,170,868
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
24,060

 
24,743

 
54,292

 
127,204

 
185,283

Stock-based compensation
 
6,266

 
6,390

 
9,294

 
26,353

 
34,674

Non-cash interest expense
 
3,213

 
3,871

 
5,837

 
15,346

 
18,390

Dividend from equity method investees
 
—

 
—

 
7,859

 
3,947

 
30,091

Equity in (earnings) losses of unconsolidated investees
 
756

 
1,501

 
145

 
17,815

 
(25,939
)
Gain on sale of equity investments, net
 
(3,628
)
 
(543
)
 
(5,346
)
 
(54,196
)
 
(5,346
)
Gain on business divestiture
 
—

 
(59,347
)
 
—

 
(59,347
)
 
—

Unrealized loss on equity investments with readily determinable fair value
 
150

 
6,225

 
—

 
6,375

 
—

Deferred income taxes
 
(9,868
)
 
1,575

 
(8,541
)
 
(6,862
)
 
(6,966
)
Impairment of equity method investment
 
—

 
—

 
7,993

 
—

 
89,564

Impairment of property, plant and equipment
 
—

 
—

 
—

 
369,168

 
—

Impairment and sale of residential lease assets
 
81,086

 
53,537

 
624,335

 
251,984

 
624,335

Other, net
 
(1,059
)
 
(3,294
)
 
(3,881
)
 
(6,796
)
 
1,299

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
 
 
 
Accounts receivable
 
18,916

 
(15,057
)
 
(40,469
)
 
(174
)
 
(1,191
)
Contract assets
 
(5,495
)
 
(2,639
)
 
7,104

 
(43,509
)
 
10,660

Inventories
 
64,617

 
(27,942
)
 
28,776

 
(39,174
)
 
(38,236
)
Project assets
 
48,652

 
(20,226
)
 
71,536

 
39,512

 
2,393

Prepaid expenses and other assets
 
(17,161
)
 
5,616

 
14,103

 
22,763

 
110,530

Long-term financing receivables, net
 
(31,006
)
 
(42,775
)
 
(32,308
)
 
(182,937
)
 
(123,674
)
Advances to suppliers
 
15,236

 
14,059

 
16,075

 
44,417

 
68,767

Accounts payable and other accrued liabilities
 
(58,230
)
 
10,387

 
4,281

 
(127,286
)
 
(216,349
)
Contract liabilities
 
9,328

 
(3,904
)
 
40,373

 
(30,495
)
 
145,171

Net cash provided by (used in) operating activities
 
(26,313
)
 
(161,734
)
 
47,892

 
(543,389
)
 
(267,412
)




Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
Purchases of property, plant and equipment
 
(7,198
)
 
(12,346
)
 
(12,177
)
 
(44,906
)
 
(69,791
)
Cash paid for solar power systems, leased and to be leased
 
(12,953
)
 
(16,971
)
 
(22,007
)
 
(68,612
)
 
(86,539
)
Cash paid for solar power systems
 
(37,468
)
 
(904
)
 
(88,306
)
 
(41,808
)
 
(126,548
)
Purchases of marketable securities
 
—

 
—

 
—

 
—

 
(1,306
)
Proceeds from sale of equity interest in residential lease portfolio, net of transaction costs
 
(28,004
)
 
—

 
—

 
(28,004
)
 
—

Proceeds from sale of cost method investments
 
33,402

 
—

 
—

 
33,402

 
—

Cash paid for acquisitions, net of cash acquired
 
(17,000
)
 
—

 
—

 
(17,000
)
 
—

Dividend from equity method investees
 
—

 
—

 
882

 
12,952

 
3,773

Proceeds from sale of equity method investments
 
2,540

 
—

 
5,954

 
420,306

 
5,954

Proceeds from business divestiture
 
10,000

 
13,257

 
—

 
23,257

 
—

Cash paid for investments in unconsolidated investees
 
(626
)
 
—

 
(2,680
)
 
(14,687
)
 
(18,627
)
Net cash provided by (used in) investing activities
 
(57,307
)
 
(16,964
)
 
(118,334
)
 
274,900

 
(293,084
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
Proceeds from bank loans and other debt
 
60,199

 
51,018

 
56,104

 
227,676

 
339,253

Repayment of 0.75% debentures due 2018, bank loans and other debt
 
(59,023
)
 
(56,702
)
 
(54,755
)
 
(535,252
)
 
(358,317
)
Proceeds from issuance of non-recourse residential financing, net of issuance costs
 
5,079

 
120,099

 
6,435

 
192,287

 
89,612

Repayment of non-recourse residential financing
 
(2,427
)
 
(5,032
)
 
(2,133
)
 
(17,358
)
 
(6,888
)
Contributions from noncontrolling interests and redeemable noncontrolling interests attributable to residential projects
 
43,526

 
34,388

 
55,591

 
151,204

 
196,628

Distributions to noncontrolling interests and redeemable noncontrolling interests attributable to residential projects
 
(2,742
)
 
(6,594
)
 
(5,200
)
 
(21,918
)
 
(18,228
)
Proceeds from issuance of non-recourse power plant and commercial financing, net of issuance costs
 
75,754

 
27,980

 
209,222

 
126,020

 
527,897





Repayment of non-recourse power plant and commercial financing
 
(26,383
)
 
(221
)
 
(27,463
)
 
(31,282
)
 
(176,069
)
Contributions from noncontrolling interests attributable to power plant and commercial projects
 
—

 
—

 
—

 
—

 
800

Purchases of stock for tax withholding obligations on vested restricted stock
 
(281
)
 
(349
)
 
(366
)
 
(5,530
)
 
(4,756
)
Net cash provided by financing activities
 
93,702

 
164,587

 
237,435

 
85,847

 
589,932

Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents
 
1,296

 
1,896

 
(609
)
 
2,068

 
689

Net decrease in cash, cash equivalents, restricted cash and restricted cash equivalents
 
11,378

 
(12,215
)
 
166,384

 
(180,574
)
 
30,125

Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period1
 
352,385

 
364,600

 
377,953

 
544,337

 
514,212

Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period
 
$
363,763

 
$
352,385

 
$
544,337

 
$
363,763

 
$
544,337

 
 
 
 
 
 
 
 
 
 
 
Non-cash transactions:
 
 
 
 
 
 
 
 
 
 
Assignment of residential lease receivables to third parties
 
$
—

 
$
—

 
$
39

 
$
—

 
$
129

Stock consideration received from business divestiture
 
$
—

 
$
42,600

 
$
—

 
$
42,600

 
$
—

Acquisition of noncontrolling interests funded by Mezzanine Loan proceeds
 
$
—

 
$
12,400

 
$
—

 
$
12,400

 
$
—

Costs of solar power systems, leased and to be leased, sourced from existing inventory
 
$
5,975

 
$
8,769

 
$
15,296

 
$
36,384

 
$
57,688

Costs of solar power systems, leased and to be leased, funded by liabilities
 
$
3,631

 
$
4,903

 
$
5,527

 
$
3,631

 
$
5,527

Costs of solar power systems under sale-leaseback financing arrangements, sourced from project assets
 
$
56,332

 
$
14,628

 
$
44,490

 
$
86,540

 
$
110,375

Property, plant and equipment acquisitions funded by liabilities
 
$
8,214

 
$
11,453

 
$
15,706

 
$
8,214

 
$
15,706

Acquisition funded by liabilities
 
$
9,000

 
$
—

 
$
—

 
$
9,000

 
$
—

Contractual obligations satisfied with inventory
 
$
7,924

 
$
8,035

 
$
14,820

 
$
56,840

 
$
34,675

Assumption of debt by buyer upon sale of equity interest
 
$
—

 
$
—

 
$
196,104

 
$
27,321

 
$
196,104





Accounts receivable due to business divestiture
 
$
—

 
$
10,000

 
$
—

 
$
—

 
$
—

Accounts receivable due to disposal of shares in joint venture
 
$
—

 
$
4,635

 
$
—

 
$
—

 
$
—

Assumption of mezzanine loan by SunStrong in connection with sale of residential lease assets
 
$
106,958

 
$
—

 
$
—

 
$
106,958

 
$
—

Assumption of back leverage loans by SunStrong in connection with sale of residential lease assets
 
$
454,630

 
$
—

 
$
—

 
$
454,630

 
$
—

Retained interest in SunStrong lease portfolio
 
$
9,750

 
$
—

 
$
—

 
$
9,750

 
$
—

Receivables in connection with sale of residential lease portfolio
 
$
12,510

 
$
—

 
$
—

 
$
12,510

 
$
—





Use of Non-GAAP Financial Measures

To supplement its consolidated financial results presented in accordance with GAAP, the company uses non-GAAP measures that are adjusted for certain items from the most directly comparable GAAP measures, as described below. The specific non-GAAP measures listed below are: revenue; gross profit/margin; net income (loss); net income (loss) per diluted share; and adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Management believes that each of these non-GAAP measures is useful to investors, enabling them to better assess changes in each of these key elements of the company's results of operations across different reporting periods on a consistent basis, independent of certain items as described below. Thus, each of these non-GAAP financial measures provides investors with another method to assess the company's operating results in a manner that is focused on its ongoing, core operating performance, absent the effects of these items. Management uses these non-GAAP measures internally to assess the business, its financial performance, current and historical results, as well as for strategic decision-making and forecasting future results. Many of the analysts covering the company also use these non-GAAP measures in their analyses. Given management's use of these non-GAAP measures, the company believes these measures are important to investors in understanding the company's operating results as seen through the eyes of management. These non-GAAP measures are not prepared in accordance with GAAP or intended to be a replacement for GAAP financial data; the non-GAAP measures should be reviewed together with the GAAP measures and are not intended to serve as a substitute for results under GAAP, and may be different from non-GAAP measures used by other companies.

Non-GAAP revenue includes adjustments relating to 8point3, legacy utility and power plant projects, sale-leaseback transactions and unrealized loss on equity investments, each as described below. In addition to those same adjustments, Non-GAAP gross profit/margin includes adjustments relating to impairment of property, plant and equipment, impairment and sale of residential lease assets, cost of above-market polysilicon, stock-based compensation, amortization of intangible assets, depreciation of idle equipment, and non-cash interest expense, each as described below. In addition to those same adjustments, non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share are adjusted for adjustments relating to gain on business divestiture, acquisition-related and other costs, business reorganization costs, restructuring expense, IPO-related costs, the tax effect of these non-GAAP adjustments, and other items, each as described below. In addition to the same adjustments as non-GAAP net income (loss), Adjusted EBITDA includes adjustments relating to cash interest expense (net of interest income), provision for (benefit from) income taxes, and depreciation.


Non-GAAP Adjustments Based on International Financial Reporting Standards (“IFRS”)

The company’s non-GAAP results include adjustments to recognize revenue and profit under IFRS that are consistent with the adjustments made in connection with the company’s reporting process as part of its status as a consolidated subsidiary of Total S.A., a foreign public registrant which reports under IFRS. Differences between GAAP and IFRS reflected in the company’s non-GAAP results are further described below. In these situations, management believes that IFRS enables investors to better evaluate the company’s revenue and profit generation performance, and assists in aligning the perspectives of our management and noncontrolling shareholders with those of Total S.A., our controlling shareholder.


•
Intersegment Gross Margin. To increase efficiencies and the competitive advantage of our technologies, SunPower Technologies sells solar modules to SunPower Energy Services based on transfer prices determined based on management's assessment of market-based pricing terms. Such intersegment sales and related costs are eliminated at the corporate level to derive our consolidated financial results.

•
8point3. In 2015, 8point3 Energy Partners LP ("8point3 Energy Partners"), a joint YieldCo vehicle, was formed by the company and First Solar, Inc. ("First Solar" and, together with the company, the "Sponsors") to own, operate and acquire solar energy generation assets. Class A shares of 8point3 Energy Partners are now listed on the NASDAQ Global Select Market under the trading symbol “CAFD.” Immediately after the IPO, the company contributed a portfolio of 170 MW of its solar generation assets (the “SPWR Projects”)




to 8point3 Operating Company, LLC ("OpCo"), 8point3 Energy Partners' primary operating subsidiary. In exchange for the SPWR Projects, the company received cash proceeds as well as equity interests in several 8point3 Energy Partners affiliated entities: primarily common and subordinated units representing a 40.7% (since reduced to 36.5% via a secondary issuance of shares in fiscal 2016) stake in OpCo and a 50.0% economic and management stake in 8point3 Holding Company, LLC (“Holdings”), the parent company of the general partner of 8point3 Energy Partners and the owner of incentive distribution rights in OpCo. Holdings, OpCo, 8point3 Energy Partners and their respective subsidiaries are referred to herein as the “8point3 Group” or "8point3."

The company includes adjustments related to the sales of projects contributed to 8point3 previously based on the difference between the fair market value of the consideration received and the net carrying value of the projects contributed, of which, a portion is deferred in proportion to the company’s retained equity stake in 8point3. Prior to the adoption of ASC 606, these sales are recognized under either real estate, lease, or consolidation accounting guidance depending upon the nature of the individual asset contributed, with outcomes ranging from no, partial, or full profit recognition. The company adopted ASC 606 on January 1, 2018, using the full retrospective method, which required the company to restate each prior period presented. The company recorded a material amount of deferred profit associated with projects sold to 8point3 in 2015, the majority of which had previously been deferred under real estate accounting. Accordingly, the company's carrying value in the 8point3 materially increased upon adoption which required the company to evaluate its investment in 8point3 for other-than-temporary impairment ("OTTI"). In accordance with such evaluation, the company recognized a non-cash impairment charge on the 8point3 investment balance in the prior periods that were affected. On June 19, 2018, the company sold its equity interest in 8point3.

•
Legacy utility and power plant projects. The company includes adjustments related to the revenue recognition of certain utility and power plant projects based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations and, when relevant, the allocation of revenue and margin to the company’s project development efforts at the time of initial project sale. Prior to the adoption of ASC 606, such projects are accounted for under real estate accounting guidance, under which no separate allocation to the company’s project development efforts occurs and the amount of revenue and margin that is recognized may be limited in circumstances where the company has certain forms of continuing involvement in the project. Under ASC 606, such projects are accounted for when the customer obtains control of the promised goods or services which generally results in earlier recognition of revenue and profit than previous GAAP. Over the life of each project, cumulative revenue and gross profit will eventually be equivalent under both ASC 606 and non-GAAP once these projects are completed.

•
Sale-leaseback transactions. The company includes adjustments primarily related to the revenue recognition on certain sale-leaseback transactions based on the net proceeds received from the buyer-lessor. Under GAAP, these transactions are accounted for under the financing method in accordance with real estate accounting guidance. Under such guidance, no revenue or profit is recognized at the inception of the transaction, and the net proceeds from the buyer-lessor are recorded as a financing liability. Imputed interest is recorded on the liability equal to the company’s incremental borrowing rate adjusted solely to prevent negative amortization.

•
Unrealized loss in equity investments. In connection with the divestment of the Company's microinverters business in the third quarter of fiscal 2018, the Company received a portion of the consideration in the form of common stock. The Company recognizes adjustments related to the fair value of equity investments with readily determinable fair value based on the changes in the stock price of these equity investments at every reporting period. Under GAAP, unrealized gains and losses due to changes in stock prices for these securities are recorded in earnings while under International Financial Reporting Standards ("IFRS"), an election can be made to recognize such gains and losses in other comprehensive income. Such an election was made by Total S.A., a foreign registrant which reports under the IFRS. Management believes that excluding the unrealized gain or loss on the equity investments is consistent with the Company's reporting




process as part of its status as a consolidated subsidiary of Total S.A. and better reflects the Company's ongoing segment results.


Other Non-GAAP Adjustments

•
Impairment and sale of residential lease assets. In the fourth quarter of fiscal 2017, the company made the decision to sell or refinance its interest in the residential lease portfolio and as a result of this triggering event, determined it was necessary to evaluate the potential for impairment in its ability to recover the carrying amount of the residential lease portfolio. In accordance with such evaluation, the company recognized a non-cash impairment charge on its solar power systems leased and to be leased and an allowance for losses related financing receivables. In connection with the impairment loss, the carrying values of the company's solar power systems leased and to be leased were reduced which resulted in lower depreciation charges. In the fourth quarter of fiscal 2018, we entered into a joint venture with HA SunStrong Capital LLC (“HA SunStrong Parent”), an affiliate of Hannon Armstrong Sustainable Infrastructure Capital, Inc., to acquire, own, manage, operate, finance, and maintain a portfolio of residential rooftop or ground-mounted solar photovoltaic electric generating systems ("Solar Assets"). Pursuant to the terms of the Purchase and Sale Agreement (the “PSA"), we sold to HA SunStrong Parent, in exchange for consideration of $10.0 million, membership units representing a 49.0% membership interest in SunStrong Capital Holdings, LLC (“SunStrong”), formerly our wholly-owned subsidiary. Following the closing of the PSA, we deconsolidated certain entities that have historically held the assets and liabilities comprising our residential lease business (the "Residential Lease Portfolio"), as part of our previously announced decision to sell a portion of our interest in the portfolio of residential lease assets, and retained membership units representing a 51% membership interest in SunStrong. The loss on divestment and the remaining unsold residential lease asset impairment with its corresponding depreciation savings are excluded from the company’s segment results as they are non-cash in nature and not reflective of ongoing operating results.

•
Impairment of property, plant, and equipment. In the second quarter of fiscal 2018, the company announced its proposed plan to change the corporate structure into the Upstream business unit and Downstream business unit, and long-term strategy to replace IBC technology to NGT. Accordingly, the company expects to upgrade the equipment associated with our manufacturing operations for the production of NGT over the next several years. In connection with these events, the company determined indicators of impairment existed and therefore performed an evaluation of the recoverability of the asset group. In accordance with such evaluation, the company recognized a non-cash impairment charge on its property, plant and equipment. Such asset impairment is excluded from the company’s segment results as it is non-cash in nature and not reflective of ongoing segment results.

•
Cost of above-market polysilicon. The company has entered into multiple long-term, fixed-price supply agreements to purchase polysilicon for periods of up to 10 years. The prices in select legacy supply agreements, which incorporate a cash portion and a non-cash portion attributable to the amortization of prepayments made under the agreements, significantly exceed current market prices. Additionally, in order to reduce inventory and improve working capital, the company has periodically elected to sell polysilicon inventory in the marketplace at prices below the company’s purchase price, thereby incurring a loss. Management believes that it is appropriate to exclude the impact of its above-market cost of polysilicon, including the effect of above-market polysilicon on product costs, losses incurred on sales of polysilicon to third parties, and inventory reserves and project asset impairments from the company's non-GAAP financial measures as they are not reflective of ongoing operating results and do not contribute to a meaningful evaluation of a company's past operating performance.

•
Stock-based compensation. Stock-based compensation relates primarily to the company’s equity incentive awards. Stock-based compensation is a non-cash expense that is dependent on market forces that are difficult to predict. Management believes that this adjustment for stock-based compensation provides investors with a basis to measure the company's core performance, including compared with the




performance of other companies, without the period-to-period variability created by stock-based compensation.

•
Amortization of intangible assets. The company incurs amortization of intangible assets as a result of acquisitions, which includes patents, purchased technology, project pipeline assets, and in-process research and development. Management believes that it is appropriate to exclude these amortization charges from the company’s non-GAAP financial measures as they arise from prior acquisitions, are not reflective of ongoing operating results, and do not contribute to a meaningful evaluation of a company’s past operating performance.

•
Depreciation of idle equipment. In the fourth quarter of 2017, the company changed the deployment plan for its next generation of solar cell technology, and revised its depreciation estimates to reflect the use of certain assets over its shortened useful life. Such asset depreciation is excluded from the company's non-GAAP financial measures as it is non-cash in nature and not reflective of ongoing operating results. Excluding this data provides investors with a basis to compare the company's performance against the performance of other companies without such charges.

•
Gain on business divestiture. In the third quarter of fiscal 2018, the Company entered into a transaction pursuant to which the Company sold certain assets and intellectual property related to the production of microinverters for purchase consideration comprised of both cash and stock. In connection with this sale, the Company recognized a gain relating to this business divestiture. Management believes that it is appropriate to exclude this gain from the Company’s Non-GAAP financial measures as it is non-cash in nature and not reflective of ongoing operating results.

•
Acquisition-related and other costs. In connection with the acquisition of certain assets of SolarWorld Americas, Inc. ("SolarWorld Americas"), which closed on October 1,2018, the Company incurred legal and accounting fees. Management believes that it is appropriate to exclude these costs from the Company’s Non-GAAP financial measures as they would not have otherwise been incurred as part of its business operations and are therefore not reflective of ongoing operating results.

•
Business reorganization costs. In connection with the reorganization of our business into an upstream and downstream business unit structure, we incurred and expect to continue incurring expenses in the upcoming quarters associated with reclassifying prior period segment information, reorganization of corporate functions and responsibilities to the business units, updating accounting policies and processes and implementing systems to fulfill the requirements of the master supply agreement between the segments. Management believes that it is appropriate to exclude these from the Company’s Non-GAAP financial measures as they would not have otherwise been incurred as part of its business operations and are therefore not reflective of ongoing operating results.

•
Non-cash interest expense. The company incurs non-cash interest expense related to the amortization of items such as original issuance discounts on its debt. The company excludes non-cash interest expense because the expense does not reflect its financial results in the period incurred. Management believes that this adjustment for non-cash interest expense provides investors with a basis to evaluate the company's performance, including compared with the performance of other companies, without non-cash interest expense.

•
Restructuring expense. The company incurs restructuring expenses related to reorganization plans aimed towards realigning resources consistent with the company’s global strategy and improving its overall operating efficiency and cost structure. Restructuring charges are excluded from non-GAAP financial measures because they are not considered core operating activities and such costs have historically occurred infrequently. Although the company has engaged in restructuring activities in the past, each has been a discrete event based on a unique set of business objectives. As such, management believes that it is appropriate to exclude restructuring charges from the company's non-GAAP financial measures as they are




not reflective of ongoing operating results or contribute to a meaningful evaluation of a company's past operating performance.

•
IPO-related costs. Costs incurred related to the IPO of 8point3 included legal, accounting, advisory, valuation, and other expenses. As these costs are non-recurring in nature, excluding this data provides investors with a basis to evaluate the company's performance, including compared with the performance of other companies, without similar impacts.

•
Tax effect. This amount is used to present each of the adjustments described above on an after-tax basis in connection with the presentation of non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share. The company's non-GAAP tax amount is based on estimated cash tax expense and reserves. The company forecasts its annual cash tax liability and allocates the tax to each quarter in a manner generally consistent with its GAAP methodology. This approach is designed to enhance investors’ ability to understand the impact of the company's tax expense on its current operations, provide improved modeling accuracy, and substantially reduce fluctuations caused by GAAP to non-GAAP adjustments, which may not reflect actual cash tax expense.

•
Adjusted EBITDA adjustments. When calculating Adjusted EBITDA, in addition to adjustments described above, the company excludes the impact during the period of the following items:

•
Cash interest expense, net of interest income
•
Provision for (benefit from) income taxes
•
Depreciation

Management presents this non-GAAP financial measure to enable investors to evaluate the company's performance, including compared with the performance of other companies.

For more information about these non-GAAP financial measures, please see the tables captioned "Reconciliations of GAAP Measures to Non-GAAP Measures" set forth at the end of this release, which should be read together with the preceding financial statements prepared in accordance with GAAP.




SUNPOWER CORPORATION
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
(In thousands, except percentages and per share data)
(Unaudited)

Adjustments to Revenue: 
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 30, 2018
 
September 30, 2018
 
December 31, 2017
 
December 30, 2018
 
December 31, 2017
GAAP revenue
 
$
456,837

 
$
428,263

 
$
651,134

 
$
1,726,085

 
$
1,794,047

Adjustments based on IFRS:
 
 
 
 
 
 
 
 
 
 
8point3
 
—

 
—

 
—

 
(8,588
)
 
7,198

Legacy utility and power plant projects
 
(691
)
 
(361
)
 
9,024

 
(4,145
)
 
54,659

Sale-leaseback transactions
 
69,254

 
15,529

 
163,837

 
101,581

 
272,654

Non-GAAP revenue
 
$
525,400

 
$
443,431

 
$
823,995

 
$
1,814,933

 
$
2,128,558


Adjustments to Gross Profit (Loss) / Margin: 
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 30, 2018
 
September 30, 2018
 
December 31, 2017
 
December 30, 2018
 
December 31, 2017
GAAP gross profit (loss)
 
$
(7,571
)
 
$
9,877

 
$
(12,777
)
 
$
(297,081
)
 
$
(18,645
)
Adjustments based on IFRS:
 
 
 
 
 
 
 
 
 
 
8point3
 
—

 
—

 
(62
)
 
(8,337
)
 
(2,656
)
Legacy utility and power plant projects
 
(569
)
 
162

 
(3,538
)
 
(1,244
)
 
41,746

Sale-leaseback transactions
 
6,132

 
(2,492
)
 
25,839

 
242

 
31,094

Other adjustments:
 
 
 
 
 
 
 
 
 
 
Impairment and sale of residential lease assets
 
(2,163
)
 
(4,679
)
 
—

 
(14,847
)
 
—

Impairment of property, plant and equipment
 
—

 
—

 
—

 
355,107

 
—

Cost of above-market polysilicon
 
37,231

 
14,628

 
81,804

 
87,228

 
166,906

Stock-based compensation expense
 
1,236

 
1,239

 
2,145

 
4,996

 
5,489

Amortization of intangible assets
 
1,889

 
2,142

 
2,505

 
8,966

 
10,206

Depreciation of idle equipment
 
—

 
—

 
2,300

 
721

 
2,300

Non-cash interest expense
 
—

 
—

 
2

 
—

 
32

Non-GAAP gross profit
 
$
36,185

 
$
20,877

 
$
98,218

 
$
135,751

 
$
236,472

 
 
 
 
 
 
 
 
 
 
 
GAAP gross margin (%)
 
(1.7
)%
 
2.3
%
 
(2.0
)%
 
(17.2
)%
 
(1.0
)%
Non-GAAP gross margin (%)
 
6.9
 %
 
4.7
%
 
11.9
 %
 
7.5
 %
 
11.1
 %













Adjustments to Net Income (Loss): 
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 30, 2018
 
September 30, 2018
 
December 31, 2017
 
December 30, 2018
 
December 31, 2017
GAAP net loss attributable to stockholders
 
$
(158,174
)
 
$
(89,826
)
 
$
(572,651
)
 
$
(811,091
)
 
$
(929,121
)
Adjustments based on IFRS:
 
 
 
 
 
 
 
 
 
 
8point3
 
—

 
—

 
8,130

 
(8,485
)
 
78,990

Legacy utility and power plant projects
 
(569
)
 
162

 
(3,538
)
 
(1,244
)
 
41,746

Sale-leaseback transactions
 
10,984

 
2,258

 
28,491

 
18,802

 
39,318

Unrealized loss on equity investments
 
150

 
6,225

 
—

 
6,375

 
—

Other adjustments:
 
 
 
 
 
 
 
 
 
 
Impairment and sale of residential lease assets
 
81,273

 
50,735

 
473,709

 
227,507

 
473,709

Impairment of property, plant and equipment
 
—

 
—

 
—

 
369,168

 
—

Cost of above-market polysilicon
 
37,231

 
14,628

 
81,804

 
87,228

 
166,906

Stock-based compensation expense
 
6,424

 
6,390

 
9,294

 
28,215

 
34,674

Amortization of intangible assets
 
1,889

 
2,142

 
8,769

 
8,966

 
19,048

Depreciation of idle equipment
 
—

 
—

 
2,300

 
721

 
2,300

Gain on business divestitures
 
—

 
(59,347
)
 
—

 
(59,347
)
 
—

Acquisition-related and other costs
 
(3,142
)
 
20,869

 
—

 
17,727

 
—

Business reorganization costs
 
1,330

 
—

 
—

 
1,330

 
—

Non-cash interest expense
 
10

 
13

 
25

 
68

 
128

Restructuring expense
 
(1,107
)
 
3,923

 
2,769

 
17,497

 
21,045

IPO-related costs
 
—

 
—

 
—

 
—

 
(82
)
Tax effect
 
(6,605
)
 
906

 
(3,338
)
 
(4,797
)
 
16,932

Non-GAAP net income (loss) attributable to stockholders
 
$
(30,306
)
 
$
(40,922
)
 
$
35,764

 
$
(101,360
)
 
$
(34,407
)





Adjustments to Net Income (Loss) per diluted share:
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 30, 2018
 
September 30, 2018
 
December 31, 2017
 
December 30, 2018
 
December 31, 2017
Net income (loss) per diluted share
 
 
 
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
 
 
 
GAAP net loss available to common stockholders1
 
$
(158,174
)
 
$
(89,826
)
 
$
(572,651
)
 
$
(811,091
)
 
$
(929,121
)
Non-GAAP net income (loss) available to common stockholders1
 
$
(30,306
)
 
$
(40,922
)
 
$
35,764

 
$
(101,360
)
 
$
(34,407
)
 
 
 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
 
 
GAAP weighted-average shares
 
141,136

 
141,027

 
139,613

 
140,825

 
139,370

Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
Restricted stock units
 
—

 
—

 
1,570

 
—

 
—

Upfront Warrants (held by Total)
 
—

 
—

 
49

 
—

 
—

Non-GAAP weighted-average shares1
 
141,136

 
141,027

 
141,232

 
140,825

 
139,370

 
 
 
 
 
 
 
 
 
 
 
GAAP net loss per diluted share
 
$
(1.12
)
 
$
(0.64
)
 
$
(4.10
)
 
$
(5.76
)
 
$
(6.67
)
Non-GAAP net income (loss) per diluted share
 
$
(0.21
)
 
$
(0.29
)
 
$
0.25

 
$
(0.72
)
 
$
(0.25
)
1 
In accordance with the if-converted method, net income (loss) available to common stockholders excludes interest expense related to the 0.75%, 0.875% and 4.0% debentures if the debentures are considered converted in the calculation of net income (loss) per diluted share. If the conversion option for a debenture is not in the money for the relevant period, the potential conversion of the debenture under the if-converted method is excluded from the calculation of non-GAAP net income (loss) per diluted share.






Adjusted EBITDA:
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
December 30, 2018
 
September 30, 2018
 
December 31, 2017
 
December 30, 2018
 
December 31, 2017
GAAP net loss attributable to stockholders
 
$
(158,174
)
 
$
(89,826
)
 
$
(572,651
)
 
$
(811,091
)
 
$
(929,121
)
Adjustments based on IFRS:
 
 
 
 
 
 
 
 
 
 
8point3
 
—

 
—

 
8,130

 
(8,485
)
 
78,990

Legacy utility and power plant projects
 
(569
)
 
162

 
(3,538
)
 
(1,244
)
 
41,746

Sale-leaseback transactions
 
10,984

 
2,258

 
28,491

 
18,802

 
39,318

Unrealized loss on equity investments
 
150

 
6,225

 
—

 
6,375

 
—

Other adjustments:
 
 
 
 
 
 
 
 
 
 
Impairment and sale of residential lease assets
 
81,273

 
50,735

 
473,709

 
227,507

 
473,709

Impairment of property, plant and equipment
 
—

 
—

 
—

 
369,168

 
—

Cost of above-market polysilicon
 
37,231

 
14,628

 
81,804

 
87,228

 
166,906

Stock-based compensation expense
 
6,424

 
6,390

 
9,294

 
28,215

 
34,674

Amortization of intangible assets
 
1,889

 
2,142

 
8,769

 
8,966

 
19,048

Depreciation of idle equipment
 
—

 
—

 
2,300

 
721

 
2,300

Gain on business divestiture
 
—

 
(59,347
)
 
—

 
(59,347
)
 
—

Acquisition-related and other costs
 
(3,142
)
 
20,869

 
—

 
17,727

 
—

Business reorganization costs
 
1,330

 
—

 
—

 
1,330

 
—

Non-cash interest expense
 
10

 
13

 
25

 
68

 
128

Restructuring expense
 
(1,107
)
 
3,923

 
2,769

 
17,497

 
21,045

IPO-related costs
 
—

 
—

 
—

 
—

 
(82
)
Cash interest expense, net of interest income
 
24,584

 
20,136

 
22,058

 
86,394

 
79,965

Provision for (benefit from) income taxes
 
(8,379
)
 
3,680

 
(2,870
)
 
1,010

 
(3,943
)
Depreciation
 
21,054

 
24,754

 
41,960

 
120,367

 
164,970

Adjusted EBITDA
 
$
13,558

 
$
6,742

 
$
100,250

 
$
111,208

 
$
189,653









Q1 2019 and FY 2019 GUIDANCE
(in thousands except percentages)
Q1 2019
FY 2019
Revenue (GAAP)
$290,000-$330,000
$1,800,000-$1,900,000
Revenue (non-GAAP)1
$350,000-$390,000
$1,900,000-$2,000,000
Gross margin (GAAP)
(3)% - 0%
N/A
Gross margin (non-GAAP)2
3% - 5%
N/A
Net loss (GAAP)
$50,000-$70,000
$150,000-$175,000
Adjusted EBITDA3
$(40,000)-$(20,000)
$80,000-$110,000

1.
Estimated non-GAAP amounts above for Q1 2019 and fiscal 2019 include net adjustments that increase revenue by approximately $60 million and $100 million, respectively related to construction services for residential customer contracts.

2.
Estimated non-GAAP amounts above for Q1 2019 include net adjustments that increase (decrease) gross margin by approximately $(1) million related to construction services for residential customer contracts, $22 million related to cost of above-market polysilicon, $2 million related to stock-based compensation expense, and $1 million related to amortization of intangible assets

3.
Estimated Adjusted EBITDA amounts above for Q1 2019 include net adjustments that decrease (increase) net loss by approximately $(12) million related to construction services for residential customer contracts, $(40) million related to sale-leaseback transactions, $22 million related to cost of above-market polysilicon, $9.5 million related to impairment of lease assets, $8 million related to stock-based compensation expense, $15 million related to depreciation, $1 million related to amortization of intangible assets, $13 million related to restructuring, $10.5 million related to interest expense, and $3 million related to income taxes. Estimated non-GAAP amounts above for fiscal 2019 include net adjustments that decrease (increase) net loss by approximately $(10) million related to construction services for residential customer contracts, $(40) million related to sale-leaseback transactions, $(6) million related to impairment of property, plant and equipment, $120 million related to cost of above-market polysilicon, $9.5 million related to impairment of lease assets, $31 million related to stock-based compensation expense, $60 million related to depreciation, $7 million related to amortization of intangible assets, $32 million related to restructuring, $36 million related to interest expense, and $18 million related to income taxes.




SUPPLEMENTAL DATA
(In thousands, except percentages)

The following supplemental data represent the adjustments, individual charges and credits that are included or excluded from SunPower's non-GAAP revenue, gross profit/margin, net income (loss) and net income (loss) per diluted share measures for each period presented in the Consolidated Statements of Operations contained herein.
THREE MONTHS ENDED
 
December 30, 2018
 
Revenue
 
Gross Profit / Margin
 
 
 
Other
income
(expense),
net
 
Benefit
from
(provision
for)
income
taxes
 
Gain (Loss) attributable to non-controlling interests
 
Net income (loss) attributable to stockholders
 
SunPower Energy Services
 
SunPower Technologies
 
Intersegment eliminations
 
SunPower Energy Services
 
SunPower Technologies
 
Intersegment eliminations
 
Research
and
development
 
Sales,
general
and
administrative
 
Restructuring
charges
 
Impairment and sale of residential lease assets
 
GAAP
$
265,427

 
$
277,256

 
$
(85,846
)
 
$
20,126

 
7.6
%
 
$
(19,616
)
 
(7.1
)%
 
$
(8,081
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(158,174
)
Adjustments based on IFRS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Legacy utility and power plant projects
(240
)
 
(451
)
 
—

 
(472
)
 
 
 
(97
)
 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(569
)
Sale-leaseback transactions
69,254

 
—

 
—

 
6,113

 
 
 
19

 
 
 
—

 
—

 
—

 
—

 
—

 
4,852

 
—

 
—

 
10,984

Unrealized loss on equity investments
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
—

 
150

 
—

 
—

 
150

Other adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment and sale of residential lease assets
—

 
—

 
—

 
(2,163
)
 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
81,086

 
—

 
—

 
2,350

 
81,273

Cost of above-market polysilicon
—

 
—

 
—

 
2,055

 
 
 
35,176

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
37,231

Stock-based compensation expense
—

 
—

 
—

 
610

 
 
 
626

 
 
 
—

 
907

 
4,281

 
—

 
—

 
—

 
—

 
—

 
6,424

Amortization of intangible assets
—

 
—

 
—

 
616

 
 
 
1,273

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
1,889

Business reorganization costs
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
1,330

 
—

 
—

 
—

 
—

 
—

 
1,330

Acquisition-related and other costs
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
(3,142
)
 
—

 
—

 
—

 
—

 
—

 
(3,142
)
Non-cash interest expense
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
10

 
—

 
—

 
—

 
—

 
—

 
10

Restructuring expense
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
(1,107
)
 
—

 
—

 
—

 
—

 
(1,107
)
Tax effect
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
(6,605
)
 
—

 
(6,605
)
Non-GAAP
$
334,441

 
$
276,805

 
$
(85,846
)
 
$
26,885

 
8.0
%
 
$
17,381

 
6.3
 %
 
$
(8,081
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(30,306
)





 
September 30, 2018
 
Revenue
 
Gross Profit / Margin
 
Operating expenses
 
Other
income
(expense),
net
 
Benefit
from
(provision
for)
income
taxes
 
Gain (Loss) attributable to non-controlling interests
 
Net income (loss) attributable to stockholders
 
SunPower Energy Services
 
SunPower Technologies
 
Intersegment eliminations
 
SunPower Energy Services
 
SunPower Technologies
 
Intersegment eliminations
 
Research
and
development
 
Sales,
general
and
administrative
 
Restructuring
charges
 
Impairment and sale of residential lease assets
 
Gain on business divestiture
 
GAAP
$
263,576

 
$
289,630

 
$
(124,943
)
 
$
46,380

 
17.6
%
 
$
(17,897
)
 
(6.2
)%
 
$
(18,606
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(89,826
)
Adjustments based on IFRS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Legacy utility and power plant projects
(114
)
 
(247
)
 
—

 
141

 
 
 
21

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
162

Sale-leaseback transactions
15,529

 
—

 
—

 
(2,054
)
 
 
 
(438
)
 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
4,750

 
—

 
—

 
2,258

Unrealized loss on equity investments
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
6,225

 
—

 
—

 
6,225

Other adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment and sale of residential lease assets
—

 
—

 
—

 
(4,679
)
 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
53,537

 
—

 
—

 
—

 
1,877

 
50,735

Cost of above-market polysilicon
—

 
—

 
—

 
(2,336
)
 
 
 
16,964

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
14,628

Stock-based compensation expense
—

 
—

 
—

 
598

 
 
 
641

 
 
 
—

 
806

 
4,345

 
—

 
—

 
—

 
—

 
—

 
—

 
6,390

Amortization of intangible assets
—

 
—

 
—

 
972

 
 
 
1,170

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
2,142

Gain on business divestiture
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
—

 
(59,347
)
 
—

 
—

 
—

 
(59,347
)
Acquisition-related and other costs
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
20,869

 
—

 
—

 
—

 
—

 
—

 
—

 
20,869

Non-cash interest expense
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
1

 
12

 
—

 
—

 
—

 
—

 
—

 
—

 
13

Restructuring expense
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
3,923

 
—

 
—

 
—

 
—

 
—

 
3,923

Tax effect
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
906

 
—

 
906

Non-GAAP
$
278,991

 
$
289,383

 
$
(124,943
)
 
$
39,022

 
14.0
%
 
$
461

 
0.2
 %
 
$
(18,606
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(40,922
)






 
December 31, 2017
 
Revenue
 
Gross Profit / Margin
 
Operating expenses
 
Other
income
(expense),
net
 
Benefit
from
(provision
for)
income
taxes
 
Equity in (earnings) losses of unconsolidated investees
 
Gain (Loss) attributable to non-controlling interests
 
Net income (loss) attributable to stockholders
 
SunPower Energy Services
 
SunPower Technologies
 
Intersegment eliminations
 
SunPower Energy Services
 
SunPower Technologies
 
Intersegment eliminations
 
Research
and
development
 
Sales,
general
and
administrative
 
Restructuring
charges
 
Impairment and sale of residential lease assets
 
GAAP
$
259,260

 
$
541,415

 
$
(149,541
)
 
$
9,572

 
3.7
%
 
$
(11,807
)
 
(2.2
)%
 
$
(10,542
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(572,651
)
Adjustments based on IFRS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8point3
—

 
—

 
—

 
(62
)
 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
—

 
8,086

 
—

 
106

 
—

 
8,130

Legacy utility and power plant projects
10,344

 
(1,320
)
 
 
 
373

 
 
 
(3,911
)
 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(3,538
)
Sale-leaseback transactions
163,837

 
—

 
—

 
25,839

 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
—

 
2,652

 
—

 
—

 
—

 
28,491

Other adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment and sale of residential lease assets
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
624,335

 
—

 
—

 
—

 
(150,626
)
 
473,709

Cost of above-market polysilicon
—

 
—

 
—

 
4

 
 
 
81,800

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
81,804

Stock-based compensation expense
—

 
—

 
—

 
1,105

 
 
 
1,040

 
 
 
—

 
1,565

 
5,584

 
—

 
—

 
—

 
—

 
—

 
—

 
9,294

Amortization of intangible assets
—

 
—

 
—

 
1,390

 
 
 
1,115

 
 
 
—

 
—

 
6,264

 
—

 
—

 
—

 
—

 
—

 
—

 
8,769

Depreciation of idle equipment
—

 
—

 
—

 
930

 
 
 
1,370

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
2,300

Non-cash interest expense
—

 
—

 
—

 
1

 
 
 
1

 
 
 
—

 
4

 
19

 
—

 
—

 
—

 
—

 
—

 
—

 
25

Restructuring expense
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
2,769

 
—

 
—

 
—

 
—

 
—

 
2,769

Tax effect
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
(3,338
)
 
—

 
—

 
(3,338
)
Non-GAAP
$
433,441

 
$
540,095

 
$
(149,541
)
 
$
39,152

 
9.0
%
 
$
69,608

 
12.9
 %
 
$
(10,542
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
35,764







TWELVE MONTHS ENDED
 
December 30, 2018




 
Revenue
 
Gross Profit / Margin
 
Operating expenses
 
Other
income
(expense),
net
 
Benefit
from
(provision
for)
income
taxes
 
Equity in (earnings) losses of unconsolidated investees
 
Gain (Loss) attributable to non-controlling interests
 
Net income (loss) attributable to stockholders
 
SunPower Energy Services
 
SunPower Technologies
 
Intersegment eliminations
 
SunPower Energy Services
 
SunPower Technologies
 
Intersegment eliminations
 
Research
and
development
 
Sales,
general
and
administrative
 
Restructuring
charges
 
Impairment and sale of residential lease assets
 
Gain on business divestiture
 
GAAP
$
1,045,614

 
$
1,069,010

 
$
(388,539
)
 
$
156,204

 
14.9
%
 
$
(427,899
)
 
(40.0
)%
 
$
(25,386
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(811,091
)
Adjustments based on IFRS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8point3
(2,400
)
 
(6,188
)
 
—

 
(2,149
)
 
 
 
(6,188
)
 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(148
)
 
—

 
(8,485
)
Legacy utility and power plant projects
(828
)
 
(3,317
)
 
—

 
(787
)
 
 
 
(457
)
 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(1,244
)
Sale-leaseback transactions
101,581

 
—

 
—

 
661

 
 
 
(419
)
 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
18,560

 
—

 
—

 
—

 
18,802

Unrealized loss on equity investments
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
6,375

 
—

 
—

 
—

 
6,375

Other adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment and sale of residential lease assets
—

 
—

 
—

 
(14,847
)
 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
251,984

 
—

 
—

 
—

 
—

 
(9,630
)
 
227,507

Impairment of property, plant and equipment
—

 
—

 
—

 
33

 
 
 
355,074

 
 
 
—

 
12,832

 
1,229

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
369,168

Cost of above-market polysilicon
—

 
—

 
—

 
(3,795
)
 
 
 
91,023

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
87,228

Stock-based compensation expense
—

 
—

 
—

 
2,370

 
 
 
2,626

 
 
 
—

 
5,496

 
17,723

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
28,215

Amortization of intangible assets
—

 
—

 
—

 
4,109

 
 
 
4,857

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
8,966

Business reorganization costs
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
1,330

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
1,330

Depreciation of idle equipment
—

 
—

 
—

 
289

 
 
 
432

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
721

Gain on business divestitures
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
—

 
(59,347
)
 
—

 
—

 
—

 
—

 
(59,347
)
Acquisition-related and other costs
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
17,727

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
17,727

Non-cash interest expense
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
7

 
61

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
68





Restructuring expense
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
17,497

 
—

 
—

 
—

 
—

 
—

 
—

 
17,497

Tax effect
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(4,797
)
 
—

 
—

 
(4,797
)
Non-GAAP
$
1,143,967

 
$
1,059,505

 
$
(388,539
)
 
$
142,088

 
12.4
%
 
$
19,049

 
1.8
 %
 
$
(25,386
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(101,360
)




 
December 31, 2017
 
Revenue
 
Gross Profit / Margin
 
Operating expenses
 
 
 
Other
income
(expense),
net
 
Benefit
from
(provision
for)
income
taxes
 
Equity in (earnings) losses of unconsolidated investees
 
Gain (Loss) attributable to non-controlling interests
 
Net income (loss) attributable to stockholders
 
SunPower Energy Services
 
SunPower Technologies
 
Intersegment eliminations
 
SunPower Energy Services
 
SunPower Technologies
 
Intersegment eliminations
 
Research
and
development
 
Sales,
general
and
administrative
 
Restructuring
charges
 
Impairment and sale of residential lease assets
 
GAAP
$
910,206

 
$
1,350,790

 
$
(466,949
)
 
$
89,578

 
9.8
%
 
$
(79,749
)
 
(5.9
)%
 
$
(28,474
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(929,121
)
Adjustments based on IFRS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8point3
7,164

 
34

 
—

 
(2,553
)
 
 
 
(103
)
 
 
 
—

 
—

 
—

 
—

 
—

 
86,050

 
—

 
(4,404
)
 
—

 
78,990

Legacy utility and power plant projects
10,665

 
43,994

 
—

 
1,443

 
 
 
40,303

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
41,746

Sale-leaseback transactions
242,217

 
30,437

 
—

 
31,573

 
 
 
(479
)
 
 
 
—

 
—

 
—

 
—

 
—

 
8,224

 
—

 
—

 
—

 
39,318

Other adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment and sale of residential lease assets
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
624,335

 
—

 
—

 
—

 
(150,626
)
 
473,709

Cost of above-market polysilicon
—

 
—

 
—

 
(1
)
 
 
 
166,907

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
166,906

Stock-based compensation expense
—

 
—

 
—

 
2,600

 
 
 
2,889

 
 
 
—

 
6,448

 
22,737

 
—

 
—

 
—

 
—

 
—

 
—

 
34,674

Amortization of intangible assets
—

 
—

 
—

 
5,790

 
 
 
4,416

 
 
 
—

 
1,201

 
7,641

 
—

 
—

 
—

 
—

 
—

 
—

 
19,048

Depreciation of idle equipment
—

 
—

 
—

 
930

 
 
 
1,370

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
2,300

Non-cash interest expense
—

 
—

 
—

 
13

 
 
 
19

 
 
 
—

 
16

 
80

 
—

 
—

 
—

 
—

 
—

 
—

 
128

Restructuring expense
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
21,045

 
—

 
—

 
—

 
—

 
—

 
21,045

IPO-related costs
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
(82
)
 
—

 
—

 
—

 
—

 
—

 
—

 
(82
)
Tax effect
—

 
—

 
—

 
—

 
 
 
—

 
 
 
—

 
—

 
—

 
—

 
—

 
—

 
16,932

 
—

 
—

 
16,932

Non-GAAP
$
1,170,252

 
$
1,425,255

 
$
(466,949
)
 
$
129,373

 
11.1
%
 
$
135,573

 
9.5
 %
 
$
(28,474
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(34,407
)