17. Segment Reporting

9 Months Ended

Sep. 30, 2015

Segment Reporting Information, Profit (Loss) [Abstract]

Segment Reporting Disclosure

17. Segment Reporting

We operate our business in two segments. Our components segment involves the design, manufacture, and sale of solar modules, which convert sunlight into electricity. We primarily manufacture cadmium telluride (“CdTe”) modules and have also begun manufacturing high-efficiency crystalline silicon modules. Third-party customers of our components segment include integrators and operators of PV solar power systems.

Our second segment is our fully integrated systems business (“systems segment”), through which we provide complete turn-key PV solar power systems, or solar solutions, that draw upon our capabilities, which include (i) project development, (ii) EPC services, (iii) O&M services, and (iv) project finance expertise. We may provide our full EPC services or any combination of individual products and services within our EPC capabilities depending upon the customer and market opportunity. All of our systems segment products and services are for PV solar power systems, which primarily use our solar modules, and we sell such products and services to utilities, independent power producers, commercial and industrial companies, and other system owners. Additionally within our systems segment, we may own and operate certain of our PV solar power systems for a period of time based on strategic opportunities.

In our reportable segment financial disclosures, we include an allocation of net sales value for all solar modules manufactured by our components segment and installed in projects sold or built by our systems segment in the net sales of our components segment. In the gross profit of our reportable segment disclosures, we include the corresponding cost of sales value for the solar modules installed in projects sold or built by our systems segment in the components segment. The cost of solar modules is comprised of the manufactured cost incurred by our components segment.

See Note 24. “Segment and Geographical Information” in our Annual Report on Form 10-K for the year ended December 31, 2014 for a complete discussion of our segment reporting.

Financial information about our reportable segments during the three and nine months ended September 30, 2015 and 2014 was as follows (in thousands):

	Three Months Ended September 30, 2015						Three Months Ended September 30, 2014
	Components		Systems		Total		Components			Systems		Total
Net sales	$	441,530	$	829,715	$	1,271,245	$	289,327		$	600,961	$	890,288
Gross profit (1)	165,997		318,368		484,365		26,399			163,003		189,402
Depreciation and amortization expense	61,508		3,477		64,985		56,426			4,315		60,741
Income (loss) before taxes (1)	137,878		260,009		397,887		(22,170		)	109,400		87,230
	Nine Months Ended September 30, 2015						Nine Months Ended September 30, 2014
	Components		Systems		Total		Components			Systems		Total
Net sales	$	988,591	$	1,648,080	$	2,636,671	$	800,246		$	1,582,948	$	2,383,194
Gross profit (1)	243,222		444,607		687,829		52,173			464,386		516,559
Depreciation and amortization expense	183,286		10,274		193,560		165,043			19,674		184,717
Income (loss) before taxes (1)	116,877		272,903		389,780		(96,694		)	326,304		229,610
	September 30, 2015						December 31, 2014
	Components		Systems		Total		Components			Systems		Total
Goodwill	$	16,152	$	68,833	$	84,985	$	16,152		$	68,833	$	84,985
Total assets	3,928,007		3,132,635		7,060,642		4,168,060			2,552,931		6,720,991

(1) The operating results for our components segment for the three and nine months ended September 30, 2015 include the impact of the $80.0 million reduction in our module collection and recycling obligation. See Note 12. “Commitments and Contingencies” to our condensed consolidated financial statements for more information regarding the change in this obligation.

Product Revenue

The following table sets forth the total amounts of solar module and solar power system net sales recognized for the three and nine months ended September 30, 2015 and 2014. For the purposes of the following table, (i) “Solar module revenue” is composed of total revenues from the sale of solar modules to third parties, which does not include any systems segment product or service offerings, and (ii) “Solar power system revenue” is composed of total revenues from the sale of our PV solar power systems and related products and services, including the solar modules installed in such solar power systems along with any revenue generated from our PV solar power systems (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Solar module revenue	$	60,836	$	42,889	$	180,792	$	149,287
Solar power system revenue	1,210,409		847,399		2,455,879		2,233,907
Net sales	$	1,271,245	$	890,288	$	2,636,671	$	2,383,194