EX-99.1 2 ex99_1x02122014.htm PRESS RELEASE ex99_1x02122014
Exhibit 99.1

FOR IMMEDIATE RELEASE

Contacts:

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

Media
Helen Kendrick
408-240-5585
Helen.Kendrick@sunpowercorp.com


SunPower Reports Fourth-Quarter and Fiscal Year 2013 Results

Q4 2013 GAAP Revenue of $638 Million, Non-GAAP Revenue of $758 Million
Q4 2013 GAAP Earnings Per Share of $0.15, Non-GAAP Earnings Per Share of $0.47
2013 GAAP Earnings Per Share of $0.70, Non-GAAP Earnings Per Share of $1.68

SAN JOSE, Calif., Feb. 12, 2014 - SunPower Corp. (NASDAQ: SPWR) today announced financial results for its 2013 fourth quarter and fiscal year ended Dec. 29, 2013.

($ Millions, except per-share data)
4th Quarter 2013
3rd Quarter 2013
4th Quarter 2012
2013
2012
GAAP revenue (1)
$638.1
$657.1
$678.5
$2,507.2
$2,417.5
GAAP gross margin
20.5%
29.4%
6.9%
19.6%
10.2%
GAAP net income (loss) (2)
$22.3
$108.4
$(144.8)
$95.6
$(352.0)
GAAP net income (loss) per diluted share (2)
$0.15
$0.73
$(1.22)
$0.70
$(3.01)
Non-GAAP gross margin (3)
20.4%
19.1%
18.7%
20.4%
15.4%
Non-GAAP net income per diluted share (3)
$0.47
$0.44
$0.18
$1.68
$0.18
Megawatts produced
317
313
153
1,134
936

(1)
GAAP revenue includes (excludes) $(120.1) million, $37.7 million and $(106.1) million for the fourth quarter of fiscal 2013, third quarter of fiscal 2013, and the fourth quarter of fiscal 2012, respectively, in revenue primarily related to utility and power plant projects. Similarly, GAAP revenue for fiscal 2013 and 2012 excludes $95.1 million and $204.6 million, respectively, in revenue primarily related to utility and power plant projects. See details in the non-GAAP measures disclosure included in this press release.
(2)
GAAP results include net, pre-tax adjustments excluded from non-GAAP results which increase (decrease) net income (loss) by $(48.0) million, $53.1 million and $(179.3) million for the fourth quarter of fiscal 2013, third quarter of fiscal 2013, and the fourth quarter of fiscal 2012, respectively. Similarly, GAAP results include net, pre-tax adjustments excluded from non-GAAP results which decrease net income (loss) for fiscal 2013 and 2012 by $124.9 million and $371.3 million, respectively. See details in the non-GAAP measures disclosure included in this press release.
(3)
A reconciliation of GAAP to non-GAAP results is included at the end of this press release.

“Solid execution enabled us to substantially beat our plan every quarter this year,” said Tom Werner, SunPower president and CEO. “Demand remains strong in both our power plant and distributed generation businesses, and we are executing well in our manufacturing operations with all solar cell fabrication facilities (Fab) running at full capacity. Our technology and operations teams continue to drive down panel cost as we reduced our annual costs by more than 20 percent for the second year in a row. Additionally, our new 350-megawatt (MW) Fab remains on track and we expect first silicon production in less than 12 months.

“Regionally, North America was once again our strongest market. The 579-MW AC Solar Star projects for MidAmerican Solar reached a key milestone with the first 57-MW array segment delivering energy to the grid, and we achieved full commercial operation on the 250-MW AC California Valley Solar Ranch (CVSR), one of the world’s largest solar power plants completed to date. We also booked a 20-MW SunPower® C7 Tracker project in North America for delivery in 2015. This is an important milestone in the commercial scale-up of this exciting, new and low-cost power plant technology. We also continue to see



strong momentum in our North American residential business, with more than 20,500 leasing customers signed to date. Our recently announced $220 million lease capacity partnership with Bank of America ensures that we will have the resources available to continue to drive growth in this channel in 2014.

“We achieved our end of year profitability goal in the EMEA region as we benefited from increased revenue and margins due to a strong rebound in our rooftop business in Europe as well as the sale of one of our power plant projects.

“SunPower posted another strong quarter in Asia Pacific, with Japan accounting for 24 percent of total company shipments. Including the recent announcement of our seven-site, 20-MW supply agreement with Ecomax Japan Inc., we are supplying our industry leading solar panel technology to more than 110 MW of power plant projects in Japan. Combined with our significant share in the residential channel, we have an increasingly broad market footprint in this key market.
 
“Our partnership with Total is also facilitating expansion into a number of new solar markets worldwide. For example, final financing was secured for construction of the 70-MW merchant power plant in Chile and we were awarded an 86-MW power plant project in the most recent South Africa tender process. With a 6-gigawatt (GW) global pipeline, continued focus on the Middle East and our C7 tracker joint venture in China, we expect further international project announcements this year,” concluded Werner.

“SunPower delivered another strong quarter across all business segments as we exceeded our revenue and profit targets for the quarter and the year,” said Chuck Boynton, SunPower CFO. “Additionally, we strengthened our balance sheet while generating approximately $270 million in free cash flow in 2013 by prudently managing our working capital. We were also pleased to extend our relationship with Bank of America as their scalable, proven platform will help us drive continued growth in our residential lease channel. With the further monetization of our significant project pipeline, continued focus on expanding our global footprint and ability to optimize our cost and capital structure, we are well positioned to meet our goals for 2014.”

Fourth quarter fiscal 2013 GAAP results include net, pre-tax adjustments excluded from non-GAAP results which decrease net income by $48.0 million, including a $19.4 million gross margin adjustment related to the timing of revenue recognition from utility and power plant projects; $14.6 million in stock-based compensation expense; $12.6 million in non-cash interest expense and $1.4 million of other adjustments.

First Quarter and Fiscal Year 2014 Financial Outlook

The company’s first quarter 2014 consolidated non-GAAP guidance is as follows: revenue of $650 million to $700 million, gross margin of 18 percent to 20 percent, net income per diluted share of $0.25 to $0.40 and MW recognized in the range of 320 MW to 350 MW. On a GAAP basis, the company expects revenue of $575 million to $625 million, gross margin of 18 percent to 20 percent and net income per diluted share of $0.10 to $0.25.

For fiscal year 2014, the company expects non-GAAP revenue of $2.4 billion to $2.6 billion, gross margin of 19 percent to 21 percent, net income per diluted share of $1.00 to $1.30, capital expenditures of $150 million to $170 million and GW recognized in the range of 1.15 GW to 1.25 GW. On a GAAP basis, the company expects revenue of $2.45 billion to $2.65 billion, gross margin of 20 percent to 22 percent and net income per diluted share of $0.65 to $0.95.

The company will host a conference call for investors this afternoon to discuss its fourth quarter 2013 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 historical 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 2013 performance on the Events and Presentations section of the SunPower Investor Relations page at http://investors.sunpower.com/events.cfm. The capacity of power plants in this release is described in approximate megawatts on a direct current (dc) basis unless otherwise noted.

About SunPower

SunPower Corp. (NASDAQ: SPWR) designs, manufactures and delivers the highest efficiency, highest reliability solar panels and systems available today. Residential, business, government and utility customers rely on the company’s quarter century of experience and guaranteed performance to provide maximum return on investment throughout the life of the solar system. Headquartered in San Jose, Calif., SunPower has offices in North America, Europe, Australia, Africa and Asia. For more information, 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) expanding our manufacturing capacity; (b) anticipated construction timelines and milestones for our major projects; (c) growing demand in residential leasing and financing arrangements relating to our residential lease program; (d) growing demand in Japan; (e) our expansion into new markets, facilitated by our partnership with Total S.A.; (f) our growing international project pipeline; (g) our efforts to reduce panel manufacturing costs; (h) our growing North American commercial project pipeline; (i) our positioning for long-term profitability; (j) strategically managing cash; (k) guidance for the first fiscal quarter of 2014, including non-GAAP revenue, gross margin, net income per diluted share and MW recognized and GAAP revenue, gross margin and net income per diluted share; (l) guidance for fiscal year 2014, including non-GAAP revenue, gross margin, net income per diluted share, capital expenditures and GW recognized and GAAP revenue, gross margin and net income per diluted share; (m) reducing operating expenses; (n) generating free cash flow; (o) additional leasing capacity; and (p) optimization of our cost and capital structure. 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 industry and downward pressure on average selling prices; (2) our liquidity, substantial indebtedness, and our ability to obtain additional financing for our projects and our customers; (3) risks relating to our residential lease business, including risks of customer default, challenges securing lease financing, and declining conventional electricity prices; (4) our ability to meet our cost reduction targets; (5) regulatory changes and the availability of economic incentives promoting use of solar energy; (6) challenges inherent in constructing and maintaining certain of our large projects, such as the California Valley Solar Ranch and Solar Star projects; (7) the success of our ongoing research and development efforts and commercialization of new products and services; (8) fluctuations in our operating results; (9) manufacturing difficulties that could arise; and (10) challenges managing our joint ventures. 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.

SunPower is a registered trademark of SunPower Corp. All other trademarks are the property of their respective owners.




SUNPOWER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
 
 
Dec. 29, 2013
 
Dec. 30, 2012
ASSETS
Cash and cash equivalents
 
$
762,511

 
$
457,487

Restricted cash and cash equivalents
 
31,499

 
46,964

Investments
 
8,892

 
10,885

Accounts receivable, net
 
360,594

 
398,150

Costs and estimated earnings in excess of billings
 
31,787

 
36,395

Inventories
 
245,575

 
291,386

Advances to suppliers
 
383,314

 
351,405

Long-term financing receivables, net
 
175,273

 
67,742

Prepaid expenses and other assets
 
944,747

 
822,118

Property, plant and equipment, net
 
533,387

 
526,914

Solar power systems leased and to be leased, net
 
345,504

 
247,995

Project assets—plants and land, net
 
75,607

 
83,507

Total assets
 
$
3,898,690

 
$
3,340,948

LIABILITIES AND EQUITY
Accounts payable
 
$
443,969

 
$
414,335

Accrued and other liabilities
 
882,148

 
582,991

Billings in excess of costs and estimated earnings
 
308,650

 
225,550

Bank loans and other debt
 
150,007

 
390,361

Convertible debt
 
755,968

 
438,629

Customer advances
 
204,165

 
295,730

Total liabilities
 
2,744,907

 
2,347,596

Stockholders’ equity
 
1,116,153

 
993,352

Noncontrolling interests in subsidiaries
 
37,630

 

Total equity
 
1,153,783

 
993,352

Total liabilities and equity
 
$
3,898,690

 
$
3,340,948








SUNPOWER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
Dec. 29, 2013
 
Sep. 29, 2013
 
Dec. 30, 2012
 
Dec. 29, 2013
 
Dec. 30, 2012
Revenue:
 
 
 
 
 
 
 
 
 
 
AMERICAS
 
$
382,650

 
$
442,091

 
$
520,200

 
$
1,676,472

 
$
1,696,348

EMEA
 
154,285

 
120,712

 
89,410

 
450,659

 
489,484

APAC
 
101,199

 
94,317

 
68,915

 
380,072

 
231,669

Total revenue
 
638,134

 
657,120

 
678,525

 
2,507,203

 
2,417,501

Cost of revenue:
 
 
 
 
 
 
 
 
 
 
AMERICAS
 
291,657

 
306,024

 
437,355

 
1,299,701

 
1,415,417

EMEA
 
129,921

 
100,605

 
137,071

 
419,416

 
559,993

APAC
 
85,888

 
57,261

 
57,222

 
297,014

 
195,693

Total cost of revenue
 
507,466

 
463,890

 
631,648

 
2,016,131

 
2,171,103

Gross margin
 
130,668

 
193,230

 
46,877

 
491,072

 
246,398

Operating expenses:
 
 
 
 
 
 
 
 
 
 
Research and development
 
16,972

 
14,903

 
17,670

 
58,080

 
63,456

Selling, general and administrative
 
76,125

 
63,229

 
101,858

 
271,481

 
310,246

Restructuring charges
 
897

 
1,114

 
39,634

 
2,602

 
100,823

Goodwill and other intangible asset impairment
 

 

 

 

 
59,581

Total operating expenses
 
93,994

 
79,246

 
159,162

 
332,163

 
534,106

Operating income (loss)
 
36,674

 
113,984

 
(112,285
)
 
158,909

 
(287,708
)
Gain on share lending arrangement
 

 

 

 

 
50,645

Other expense, net
 
(25,428
)
 
(32,762
)
 
(24,443
)
 
(117,326
)
 
(92,600
)
Income (loss) before income taxes and equity in earnings (loss) of unconsolidated investees
 
11,246

 
81,222

 
(136,728
)
 
41,583

 
(329,663
)
Benefit from (provision for) income taxes
 
(8,985
)
 
4,575

 
(9,300
)
 
(11,905
)
 
(21,842
)
Equity in earnings (loss) of unconsolidated investees
 
1,611

 
1,585

 
1,257

 
3,872

 
(515
)
Net income (loss)
 
3,872

 
87,382

 
(144,771
)
 
33,550

 
(352,020
)
Net loss attributable to noncontrolling interests
 
18,466

 
21,004

 

 
62,043

 

Net income (loss) attributable to stockholders
 
$
22,338

 
$
108,386

 
$
(144,771
)
 
$
95,593

 
$
(352,020
)
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) per share attributable to stockholders:
 
 
 
 
 
 
 
 
 
 
– Basic
 
$
0.18

 
$
0.89

 
$
(1.22
)
 
$
0.79

 
$
(3.01
)
– Diluted
 
$
0.15

 
$
0.73

 
$
(1.22
)
 
$
0.70

 
$
(3.01
)
Weighted-average shares:
 
 
 
 
 
 
 
 
 
 
– Basic
 
121,464

 
121,314

 
119,148

 
120,819

 
117,093

– Diluted
 
151,337

 
153,876

 
119,148

 
138,980

 
117,093





SUNPOWER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
 
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
Dec. 29, 2013
 
Sep. 29, 2013
 
Dec. 30, 2012
 
Dec. 29, 2013
 
Dec. 30, 2012
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
3,872

 
$
87,382

 
$
(144,771
)
 
$
33,550

 
$
(352,020
)
Components of comprehensive income (loss):
 
 
 
 
 
 
 
 
 
 
Translation adjustment
 
556

 
1,923

 
843

 
(1,447
)
 
(959
)
Net unrealized gain (loss) on derivatives
 
(38
)
 
(2,005
)
 
22

 
(562
)
 
(10,716
)
Unrealized gain on investments
 

 
7

 

 

 

Income taxes
 
112

 
379

 
(4
)
 
212

 
2,012

Net change in accumulated other comprehensive income (loss)
 
630

 
304

 
861

 
(1,797
)
 
(9,663
)
Total comprehensive income (loss)
 
4,502

 
87,686

 
(143,910
)
 
31,753

 
(361,683
)
Comprehensive loss attributable to noncontrolling interests
 
18,466

 
21,004

 

 
62,043

 

Comprehensive income (loss) attributable to stockholders
 
$
22,968

 
$
108,690

 
$
(143,910
)
 
$
93,796

 
$
(361,683
)




SUNPOWER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
Dec. 29, 2013
 
Sep. 29, 2013
 
Dec. 30, 2012
 
Dec. 29, 2013
 
Dec. 30, 2012
 
 
 
 
 
 
 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
3,872

 
$
87,382

 
$
(144,771
)
 
$
33,550

 
$
(352,020
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization expense
 
25,067

 
24,764

 
26,924

 
98,191

 
117,770

Stock-based compensation
 
14,575

 
12,082

 
9,260

 
45,678

 
42,439

Non-cash interest expense
 
12,634

 
12,311

 
8,841

 
49,016

 
38,177

Goodwill and other intangible asset impairment
 

 

 

 

 
59,581

Loss on retirement of property, plant and equipment
 

 

 
21,408

 

 
77,807

Gain on contract termination
 

 
(51,988
)
 

 
(51,988
)
 

Gain on share lending arrangement
 

 

 

 

 
(50,645
)
Third-party inventories write-down
 

 

 

 

 
8,869

Equity in (earnings) loss of unconsolidated investees
 
(1,611
)
 
(1,585
)
 
(1,257
)
 
(3,872
)
 
515

Deferred income taxes and other tax liabilities
 
(1,179
)
 
(4,830
)
 
(4,442
)
 
1,138

 
(4,332
)
Other, net
 
1,184

 
1,050

 
946

 
4,396

 
3,841

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
 
 
 
Accounts receivable
 
(7,365
)
 
61,063

 
(113,343
)
 
(53,756
)
 
11,522

Costs and estimated earnings in excess of billings
 
10,776

 
(1,246
)
 
29,167

 
4,608

 
18,458

Inventories
 
32,300

 
(65,253
)
 
78,400

 
(6,243
)
 
28,324

Project assets
 
20,019

 
(10,820
)
 
78,520

 
(22,094
)
 
(23,397
)
Long-term financing receivables, net
 
(36,096
)
 
(21,943
)
 
(14,352
)
 
(107,531
)
 
(62,415
)
Prepaid expenses and other assets
 
(80,667
)
 
15,628

 
(86,368
)
 
39,123

 
(73,706
)
Advances to suppliers
 
(18,174
)
 
(5,930
)
 
6,110

 
(31,909
)
 
(23,883
)
Accounts payable and other accrued liabilities
 
13,830

 
65,077

 
134,572

 
120,599

 
91,564

Billings in excess of costs and estimated earnings
 
55,321

 
(81,600
)
 
85,926

 
83,100

 
54,723

Customer advances
 
(11,610
)
 
(5,293
)
 
25,663

 
(39,577
)
 
65,711

Net cash provided by operating activities
 
32,876

 
28,869

 
141,204

 
162,429

 
28,903

Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
(Increase) decrease in restricted cash and cash equivalents
 
521

 
(2,882
)
 
(21,750
)
 
15,465

 
32,591

Purchases of property, plant and equipment
 
(8,594
)
 
(5,579
)
 
(25,753
)
 
(34,054
)
 
(104,786
)
Cash paid for solar power systems, leased and to be leased
 
(13,616
)
 
(18,544
)
 
(49,791
)
 
(97,235
)
 
(150,446
)
Cash paid for solar power systems
 
(21,257
)
 

 

 
(21,257
)
 

Purchases of marketable securities
 

 

 

 
(99,928
)
 
(1,436
)
Proceeds from sales or maturities of marketable securities
 

 
100,947

 

 
100,947

 

Proceeds from sale of equipment to third-party
 

 
628

 
5

 
645

 
424

Cash received for sale of investment in unconsolidated investee
 

 

 

 

 
17,403

Cash paid for investments in unconsolidated investees
 
(16,350
)
 

 
(3,817
)
 
(17,761
)
 
(13,817
)
Net cash provided by (used in) investing activities
 
(59,296
)
 
74,570

 
(101,106
)
 
(153,178
)
 
(220,067
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
Proceeds from issuance of convertible debt, net of issuance costs
 

 

 

 
296,283

 

Proceeds from issuance of bank loans, net of issuance costs
 

 

 
25,000

 

 
150,000

Proceeds from issuance of project loans, net of issuance costs
 
14,169

 
11,610

 

 
82,394

 
27,617

Proceeds from residential lease financing
 
13,027

 
26,817

 
33,568

 
96,392

 
60,377

Proceeds from sale-leaseback financing
 
32,382

 

 

 
73,139

 

Proceeds from private offering of common stock, net of issuance costs
 

 

 

 

 
163,616

Contributions from noncontrolling interests
 
26,607

 
29,535

 

 
100,008

 

Proceeds from recovery of claim in connection with share lending arrangement
 

 

 

 

 
50,645

Proceeds from exercise of stock options
 
58

 
49

 

 
156

 
51

Cash paid for repurchased convertible debt
 

 

 

 

 
(198,608
)
Repayment of bank loans, project loans and other debt
 
(388
)
 
(8,386
)
 
(27,651
)
 
(290,486
)
 
(154,078
)
Assumption of project loan by customer
 
(34,850
)
 

 

 
(34,850
)
 

Repayment of sale-leaseback financing
 
(3,680
)
 

 

 
(8,804
)
 

Distributions to noncontrolling interests
 
(335
)
 

 

 
(335
)
 

Cash distributions to Parent in connection with the transfer of entities under common control
 

 

 
8,653

 

 
(169,637
)
Purchases of stock for tax withholding obligations on vested restricted stock
 
(2,245
)
 
(1,401
)
 
(261
)
 
(19,829
)
 
(5,691
)
Net cash provided by (used in) financing activities
 
44,745

 
58,224

 
39,309

 
294,068

 
(75,708
)
Effect of exchange rate changes on cash and cash equivalents
 
611

 
1,352

 
954

 
1,705

 
(1,259
)
Net increase (decrease) in cash and cash equivalents
 
18,936

 
163,015

 
80,361

 
305,024

 
(268,131
)
Cash and cash equivalents, beginning of period
 
743,575

 
580,560

 
377,126

 
457,487

 
725,618

Cash and cash equivalents, end of period
 
$
762,511

 
$
743,575

 
$
457,487

 
$
762,511

 
$
457,487

 
 
 
 
 
 
 
 
 
 
 
Non-cash transactions:
 
 
 
 
 
 
 
 
 
 
Assignment of financing receivables to a third party financial institution
 
$
25,613

 
$
22,166

 
$
13,554

 
$
93,013

 
$
23,813

Property, plant and equipment acquisitions funded by liabilities
 
5,288

 
5,628

 
6,408

 
5,288

 
6,408

Costs of solar power systems, leased and to be leased, sourced from existing inventory
 
10,380

 
13,627

 
37,625

 
53,721

 
117,692

Costs of solar power systems, leased and to be leased, funded by liabilities
 
4,392

 
2,315

 
6,544

 
4,392

 
6,544

Costs of solar power systems under sale-leaseback financing arrangements sourced from project assets
 
6,043

 

 

 
30,442

 

Issuance of warrants in connection with the Liquidity Support Agreement
 

 

 

 

 
50,327






(In thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
Dec. 29, 2013
 
Sep. 29, 2013
 
Dec. 30, 2012
 
Dec. 29, 2013
 
Dec. 30, 2012
 
 
Dec. 29, 2013
 
Sep. 29, 2013
 
Dec. 30, 2012
 
Dec. 29, 2013
 
Dec. 30, 2012
 
 
(Presented on a GAAP Basis)
 
 
(Presented on a non-GAAP Basis)
Gross margin
 
$
130,668

 
$
193,230

 
$
46,877

 
$
491,072

 
$
246,398

 
 
$
154,926

 
$
118,478

 
$
146,960

 
$
530,379

 
$
403,994

Operating income (loss)
 
$
36,674

 
$
113,984

 
$
(112,285
)
 
$
158,909

 
$
(287,708
)
 
 
$
72,734

 
$
49,221

 
$
58,654

 
$
237,328

 
$
95,307

Net income (loss) per share attributable to stockholders:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- Basic
 
$
0.18

 
$
0.89

 
$
(1.22
)
 
$
0.79

 
$
(3.01
)
 
 
$
0.59

 
$
0.48

 
$
0.18

 
$
1.83

 
$
0.18

- Diluted
 
$
0.15

 
$
0.73

 
$
(1.22
)
 
$
0.70

 
$
(3.01
)
 
 
$
0.47

 
$
0.44

 
$
0.18

 
$
1.68

 
$
0.18





About SunPower's Non-GAAP Financial Measures

To supplement its consolidated financial results presented in accordance with GAAP, SunPower uses non-GAAP measures which are adjusted from the most directly comparable GAAP results for certain items, as described below. Management does not consider these items in evaluating the core operational activities of SunPower. The specific non-GAAP measures listed below are gross margin, operating income (loss), net income (loss) per share, earnings before interest, taxes, depreciation and amortization (EBITDA) and free cash flow. Management believes that each of these non-GAAP measures (gross margin, operating income (loss), net income (loss) per share, EBITDA and free cash flow) are useful to investors by enabling them to better assess changes in each of these key elements of SunPower'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 for assessing SunPower's operating results in a manner that is focused on its ongoing core operating performance, absent the effects of these items. Management also uses these non-GAAP measures internally to assess the business and financial performance of current and historical results, for strategic decision making, forecasting future results and evaluating the company's current performance. Many of the analysts covering SunPower also use these non-GAAP measures in their analyses. Given management's use of these non-GAAP measures, SunPower believes these measures are important to investors in understanding SunPower's current and future operating results as seen through the eyes of management. These non-GAAP measures are not in accordance with or an alternative 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 gross margin. The use of this non-GAAP financial measure allows management to evaluate the gross margin of SunPower's core businesses and trends across different reporting periods on a consistent basis, independent of charges including gain on contract termination, stockbased compensation, non-cash interest expense and other items as described below. In addition, the presentation of non-GAAP gross margin includes the revenue recognition of utility and power plant projects on a non-GAAP basis. This non-GAAP financial measure is an important component of management's internal performance measurement process as it is used to assess the current and historical financial results of the business, for strategic decision making, preparing budgets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate SunPower's revenue generation performance relative to the direct costs of revenue of its core businesses.

Non-GAAP operating income (loss). The use of this non-GAAP financial measure allows management to evaluate the operating results of SunPower's core businesses and trends across different reporting periods on a consistent basis, independent of charges including gain on contract termination, stock-based compensation, non-cash interest expense, restructuring charges, and other items as described below. In addition, the presentation of non-GAAP operating income (loss) includes the revenue recognition of utility and power plant projects on a non-GAAP basis. Non-GAAP operating income (loss) is an important component of management's internal performance measurement process as it is used to assess the current and historical financial results of the business, for strategic decision making, preparing budgets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to understand the results of operations of SunPower's core businesses and to compare results of operations on a more consistent basis against that of other companies in the industry.

Non-GAAP net income (loss) per share. Management presents this non-GAAP financial measure to enable investors and analysts to assess SunPower's operating results and trends across different reporting periods on a consistent basis, independent of items including gain on contract termination, stock-based compensation, non-cash interest expense, restructuring charges, other items as described below, and the tax effects of these non-GAAP adjustments. In addition, the presentation of non-GAAP net income (loss) includes the revenue recognition of utility and power plant projects on a non-GAAP basis. Management presents this non-GAAP financial measure to enable investors and analysts to compare SunPower's operating results on a more consistent basis against that of other companies in the industry.

EBITDA. Management presents this non-GAAP financial measure to enable investors and analysts to assess SunPower’s operating results and trends across different reporting periods on a consistent basis, independent of items including gain on contract termination, stock-based compensation, noncash interest expense, restructuring charges, cash interest expense, net of interest income, provision for income taxes, depreciation, and other items as described below. In addition, the presentation of EBITDA includes the revenue recognition of utility and power plant projects on a non-GAAP basis. Management presents this non-GAAP financial measure to enable investors and analysts to compare SunPower’s operating results on a more consistent basis against that of other companies in the industry.

Free cash flow. Management presents this non-GAAP financial measure to enable investors and analysts to assess SunPower’s operating results and trends across different reporting periods on a consistent basis, inclusive of lease



financing as described below. Management presents this non-GAAP financial measure to enable investors and analysts to compare SunPower’s operating results on a more consistent basis against that of other companies in the industry.

Included items

Utility and power plant projects. The company includes adjustments to non-GAAP revenue and non-GAAP cost of revenue related to the utility and power plant projects based on the separately identifiable components of the transactions in order to reflect the substance of the transactions. Such treatment is consistent with accounting rules under International Financial Reporting Standards (IFRS). On a GAAP basis, such revenue and costs of revenue are accounted for under U.S. GAAP real estate accounting guidance. Management calculates separate revenue and cost of revenue amounts each fiscal period in accordance with the two treatments above and the aggregate difference for the company’s affected projects is included in the relevant reconciliation tables below. Over the life of each project, cumulative revenue and gross margin will be equivalent between the two treatments; however, revenue and gross margin will generally be recognized earlier under the company’s non-GAAP treatment than under the company’s GAAP treatment. Among other factors, this is due to the attribution of non-GAAP revenue and margin to the company’s project development efforts at the time of initial project sale as required under IFRS accounting rules whereas no separate attribution to this element occurs under U.S. GAAP real estate accounting guidance. Within each project, the relationship between the adjustments to revenue and gross margins are generally consistent. However, as the company may have multiple utility and power plant projects in progress at any given time, the relationship in the aggregate will occasionally appear otherwise. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate SunPower's revenue generation performance relative to the direct costs of revenue of its core businesses.

Free cash flow adjustments. Specifically to calculate free cash flow, the company includes the impact during the period of the following items:

Net cash provided by (used in) investing activities
Proceeds from residential lease financing
Proceeds from sale-leaseback financing
Contributions from noncontrolling interests
Distributions to noncontrolling interests
Repayment of sale-leaseback financing

Excluded Items

Gain on contract termination. During the third quarter of fiscal 2013, SunPower agreed to terminate a contract with one of the company’s suppliers. As a result, SunPower recorded a gain associated with the non-cash forfeiture of a previously recorded advance from the supplier. As this gain is nonrecurring in nature, excluding this data provides investors with a basis to compare the company's performance against the performance of other companies without similar impacts.

Stock-based compensation. Stock-based compensation relates primarily to SunPower stock awards such as restricted stock. Stock-based compensation is a non-cash expense that varies in amount from period to period and is dependent on market forces that are difficult to predict. As a result of this unpredictability, management excludes this item from its internal operating forecasts and models. Management believes that non-GAAP measures adjusted for stock-based compensation provide investors with a basis to measure the company's core performance against the performance of other companies without the variability created by stock-based compensation.

Non-cash interest expense. SunPower separately accounted for the fair value liabilities of the embedded cash conversion option and the over-allotment option on its 4.5% senior cash convertible debentures issued in 2010 as an original issue discount and a corresponding derivative conversion liability. As a result, SunPower incurs interest expense that is substantially higher than interest payable on its 4.5% senior cash convertible debentures. SunPower excludes non-cash interest expense because the expense is not reflective of its ongoing financial results in the period incurred. In addition, in connection with the Liquidity Support Agreement with Total executed on February 28, 2012, the company issued warrants to Total to acquire 9,531,677 shares of its common stock. The fair value of the warrants is recorded as debt issuance costs and amortized over the expected life of the agreement. As a result, SunPower incurs non-cash interest expense associated with the amortization of the warrants. Excluding this data provides investors with a basis to compare the company's performance against the performance of other companies without non-cash interest expense.




Restructuring charges. In October 2012, the company’s Board of Directors approved a reorganization to accelerate operating cost reduction and improve overall operating efficiency (the October 2012 Restructuring Plan). 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 SunPower 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 SunPower'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.

Other. Beginning with the first quarter of fiscal 2013 the company has combined amounts previously disclosed under separate captions. These amounts were previously disclosed under one of the following captions:

Goodwill and other intangible asset impairment
Amortization of intangible assets
Restructuring charges (related to actions prior to the October 2012 Restructuring Plan)
Charges on manufacturing step reduction plan
Non-recurring idle equipment impairment
Class action settlement
Acquisition and integration costs
Change in European government incentives
Gain (loss) on mark-to-market derivative instruments
Gain on share lending arrangement
Gain on sale of equity interest in unconsolidated investee

The adjustments recorded in “Other” for the fourth quarter of fiscal 2013 are primarily driven by adjustments which would have previously been disclosed under “Restructuring charges.”

Tax effect. This amount is used to present each of the amounts described above on an after-tax basis with the presentation of non-GAAP net income (loss) per share. The company's non-GAAP tax amount is based on estimated cash tax expense and reserves. This approach is designed to enhance the ability of investors to understand 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. The company forecasts its annual cash tax liability and allocates the tax to each quarter in proportion to earnings for that period.

EBITDA adjustments. Specifically to calculate EBITDA, in addition to adjustments previously described above, the company excludes the impact during the period of the following items:

Cash interest expense, net of interest income
Provision for income taxes
Depreciation

For more information on 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 and 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
(Unaudited)
(In thousands, except per share data)

STATEMENT OF OPERATIONS DATA: 

 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
Dec. 29, 2013
 
Sep. 29, 2013
 
Dec. 30, 2012
 
Dec. 29, 2013
 
Dec. 30, 2012
GAAP AMERICAS revenue
 
$
382,650

 
 
 
$
442,091

 
 
 
$
520,200

 
 
 
$
1,676,472

 
 
 
$
1,696,348

 
 
Utility and power plant projects
 
120,058

 
 
 
(37,669
)
 
 
 
106,052

 
 
 
95,788

 
 
 
204,811

 
 
Non-GAAP AMERICAS revenue
 
$
502,708

 
 
 
$
404,422

 
 
 
$
626,252

 
 
 
$
1,772,260

 
 
 
$
1,901,159

 
 
GAAP EMEA revenue
 
$
154,285

 
 
 
$
120,712

 
 
 
$
89,410

 
 
 
$
450,659

 
 
 
$
489,484

 
 
Other
 

 
 
 

 
 
 

 
 
 

 
 
 
(193
)
 
 
Non-GAAP EMEA revenue
 
$
154,285

 
 
 
$
120,712

 
 
 
$
89,410

 
 
 
$
450,659

 
 
 
$
489,291

 
 
GAAP APAC revenue
 
$
101,199

 
 
 
$
94,317

 
 
 
$
68,915

 
 
 
$
380,072

 
 
 
$
231,669

 
 
Other
 

 
 
 

 
 
 

 
 
 
(672
)
 
 
 

 
 
Non-GAAP APAC revenue
 
$
101,199

 
 
 
$
94,317

 
 
 
$
68,915

 
 
 
$
379,400

 
 
 
$
231,669

 
 
GAAP total revenue
 
$
638,134

 
 
 
$
657,120

 
 
 
$
678,525

 
 
 
$
2,507,203

 
 
 
$
2,417,501

 
 
Utility and power plant projects
 
120,058

 
 
 
(37,669
)
 
 
 
106,052

 
 
 
95,788

 
 
 
204,811

 
 
Other
 

 
 
 

 
 
 

 
 
 
(672
)
 
 
 
(193
)
 
 
Non-GAAP total revenue
 
$
758,192

 
 
 
$
619,451

 
 
 
$
784,577

 
 
 
$
2,602,319

 
 
 
$
2,622,119

 
 
GAAP AMERICAS gross margin
 
$
90,993

 
23.8%
 
$
136,067

 
30.8%
 
$
82,845

 
15.9%
 
$
376,771

 
22.5%
 
$
280,931

 
16.6%
Utility and power plant projects
 
19,381

 
 
 
(26,323
)
 
 
 
82,294

 
 
 
77,338

 
 
 
107,163

 
 
Gain on contract termination
 

 
 
 
(25,604
)
 
 
 

 
 
 
(25,604
)
 
 
 

 
 
Stock-based compensation expense
 
1,941

 
 
 
1,295

 
 
 
1,438

 
 
 
5,150

 
 
 
6,181

 
 
Non-cash interest expense
 
401

 
 
 
291

 
 
 
293

 
 
 
1,203

 
 
 
1,024

 
 
Other
 
514

 
 
 
42

 
 
 
8,698

 
 
 
957

 
 
 
19,306

 
 
Non-GAAP AMERICAS gross margin
 
$
113,230

 
22.5%
 
$
85,768

 
21.2%
 
$
175,568

 
28.0%
 
$
435,815

 
24.6%
 
$
414,605

 
21.8%
GAAP EMEA gross margin
 
$
24,364

 
15.8%
 
$
20,107

 
16.7%
 
$
(47,661
)
 
(53.3)%
 
$
31,243

 
6.9%
 
$
(70,509
)
 
(14.4)%
Gain on contract termination
 

 
 
 
(9,395
)
 
 
 

 
 
 
(9,395
)
 
 
 

 
 
Stock-based compensation expense
 
798

 
 
 
803

 
 
 
693

 
 
 
2,660

 
 
 
3,851

 
 
Non-cash interest expense
 
127

 
 
 
107

 
 
 
101

 
 
 
495

 
 
 
526

 
 
Other
 

 
 
 

 
 
 
2,986

 
 
 
186

 
 
 
11,600

 
 
Non-GAAP EMEA gross margin
 
$
25,289

 
16.4%
 
$
11,622

 
9.6%
 
$
(43,881
)
 
(49.1)%
 
$
25,189

 
5.6%
 
$
(54,532
)
 
(11.1)%
GAAP APAC gross margin
 
$
15,311

 
15.1%
 
$
37,056

 
39.3%
 
$
11,693

 
17.0%
 
$
83,058

 
21.9%
 
$
35,976

 
15.5%
Gain on contract termination
 

 
 
 
(16,988
)
 
 
 

 
 
 
(16,988
)
 
 
 

 
 
Stock-based compensation expense
 
925

 
 
 
827

 
 
 
453

 
 
 
3,006

 
 
 
1,578

 
 
Non-cash interest expense
 
171

 
 
 
193

 
 
 
102

 
 
 
713

 
 
 
292

 
 
Other
 

 
 
 

 
 
 
3,025

 
 
 
(414
)
 
 
 
6,075

 
 
Non-GAAP APAC gross margin
 
$
16,407

 
16.2%
 
$
21,088

 
22.4%
 
$
15,273

 
22.2%
 
$
69,375

 
18.3%
 
$
43,921

 
19.0%
GAAP total gross margin
 
$
130,668

 
20.5%
 
$
193,230

 
29.4%
 
$
46,877

 
6.9%
 
$
491,072

 
19.6%
 
$
246,398

 
10.2%
Utility and power plant projects
 
19,381

 
 
 
(26,323
)
 
 
 
82,294

 
 
 
77,338

 
 
 
107,163

 
 
Gain on contract termination
 

 
 
 
(51,987
)
 
 
 

 
 
 
(51,987
)
 
 
 

 
 
Stock-based compensation expense
 
3,664

 
 
 
2,925

 
 
 
2,584

 
 
 
10,816

 
 
 
11,610

 
 
Non-cash interest expense
 
699

 
 
 
591

 
 
 
496

 
 
 
2,411

 
 
 
1,842

 
 
Other
 
514

 
 
 
42

 
 
 
14,709

 
 
 
729

 
 
 
36,981

 
 
Non-GAAP total gross margin
 
$
154,926

 
20.4%
 
$
118,478

 
19.1%
 
$
146,960

 
18.7%
 
$
530,379

 
20.4%
 
$
403,994

 
15.4%
GAAP operating expenses
 
$
93,994

 
 
 
$
79,246

 
 
 
$
159,162

 
 
 
$
332,163

 
 
 
$
534,106

 
 
Stock-based compensation expense
 
(10,911
)
 
 
 
(9,157
)
 
 
 
(6,676
)
 
 
 
(34,862
)
 
 
 
(30,829
)
 
 
Non-cash interest expense
 
(42
)
 
 
 
(42
)
 
 
 
(34
)
 
 
 
(166
)
 
 
 
(110
)
 
 
October 2012 Restructuring Plan
 
(2,018
)
 
 
 
(56
)
 
 
 
(30,227
)
 
 
 
(1,241
)
 
 
 
(30,227
)
 
 
Other
 
1,169

 
 
 
(734
)
 
 
 
(33,919
)
 
 
 
(2,843
)
 
 
 
(164,253
)
 
 
Non-GAAP operating expenses
 
$
82,192

 
 
 
$
69,257

 
 
 
$
88,306

 
 
 
$
293,051

 
 
 
$
308,687

 
 
GAAP operating income (loss)
 
$
36,674

 
 
 
$
113,984

 
 
 
$
(112,285
)
 
 
 
$
158,909

 
 
 
$
(287,708
)
 
 
Utility and power plant projects
 
19,381

 
 
 
(26,323
)
 
 
 
82,294

 
 
 
77,338

 
 
 
107,163

 
 
Gain on contract termination
 

 
 
 
(51,987
)
 
 
 

 
 
 
(51,987
)
 
 
 

 
 
Stock-based compensation expense
 
14,575

 
 
 
12,082

 
 
 
9,260

 
 
 
45,678

 
 
 
42,439

 
 
Non-cash interest expense
 
741

 
 
 
633

 
 
 
530

 
 
 
2,577

 
 
 
1,952

 
 
October 2012 Restructuring Plan
 
2,018

 
 
 
56

 
 
 
30,227

 
 
 
1,241

 
 
 
30,227

 
 
Other
 
(655
)
 
 
 
776

 
 
 
48,628

 
 
 
3,572

 
 
 
201,234

 
 
Non-GAAP operating income
 
$
72,734

 
 
 
$
49,221

 
 
 
$
58,654

 
 
 
$
237,328

 
 
 
$
95,307

 
 








NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO STOCKHOLDERS:
 
 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
Dec. 29, 2013
 
Sep. 29, 2013
 
Dec. 30, 2012
 
Dec. 29, 2013
 
Dec. 30, 2012
Basic:
 
 
 
 
 
 
 
 
 
 
GAAP net income (loss) per share attributable to stockholders
 
$
0.18

 
$
0.89

 
$
(1.22
)
 
$
0.79

 
$
(3.01
)
Utility and power plant projects
 
0.16

 
(0.22
)
 
0.69

 
0.64

 
0.91

Gain on contract termination
 

 
(0.43
)
 

 
(0.43
)
 

Stock-based compensation expense
 
0.12

 
0.10

 
0.08

 
0.38

 
0.36

Non-cash interest expense
 
0.10

 
0.10

 
0.07

 
0.41

 
0.33

October 2012 Restructuring Plan
 
0.02

 

 
0.25

 
0.01

 
0.26

Other
 
(0.01
)
 
0.01

 
0.42

 
0.03

 
1.31

Tax effect
 
0.02

 
0.03

 
(0.11
)
 

 
0.02

Non-GAAP net income per share attributable to stockholders
 
$
0.59

 
$
0.48

 
$
0.18

 
$
1.83

 
$
0.18

Diluted:
 
 
 
 
 
 
 
 
 
 
GAAP net income (loss) per share attributable to stockholders
 
$
0.15

 
$
0.73

 
$
(1.22
)
 
$
0.70

 
$
(3.01
)
Utility and power plant projects
 
0.12

 
(0.18
)
 
0.69

 
0.59

 
0.91

Gain on contract termination
 

 
(0.38
)
 

 
(0.38
)
 

Stock-based compensation expense
 
0.10

 
0.11

 
0.08

 
0.35

 
0.36

Non-cash interest expense
 
0.08

 
0.11

 
0.07

 
0.38

 
0.33

October 2012 Restructuring Plan
 
0.01

 

 
0.25

 
0.01

 
0.26

Other
 

 
0.03

 
0.42

 
0.03

 
1.31

Tax effect
 
0.01

 
0.02

 
(0.11
)
 

 
0.02

Non-GAAP net income per share attributable to stockholders
 
$
0.47

 
$
0.44

 
$
0.18

 
$
1.68

 
$
0.18

Weighted-average shares:
 
 
 
 
 
 
 
 
 
 
GAAP net income (loss) per share attributable to stockholders:
 
 
 
 
 
 
 
 
 
 
- Basic
 
121,464

 
121,314

 
119,148

 
120,819

 
117,093

- Diluted
 
151,337

 
153,876

 
119,148

 
138,980

 
117,093

Non-GAAP net income per share attributable to stockholders:
 
 
 
 
 
 
 
 
 
 
- Basic
 
121,464

 
121,314

 
119,148

 
120,819

 
117,093

- Diluted *
 
160,049

 
133,138

 
120,034

 
131,910

 
117,717


*Non-GAAP diluted weighted-average shares exclude the potential impact of the company's convertible bonds under the if-converted method when the relevant conversion option is not in the money for the relevant period. For the three months ended September 29, 2013, 12.0 million and 8.7 million weighted-average shares relating to the company's 0.75% convertible bonds due 2018 and the company's 4.75% convertible bonds due 2014, respectively, were excluded. For the twelve months ended December 29, 2013, 7.1 million and 8.7 million weighted-averages shares relating to the company's 0.75% convertible bonds due 2018 and the company's 4.75% convertible bonds due 2014, respectively, were excluded.





EBITDA:

 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
Dec. 29, 2013
 
Sep. 29, 2013
 
Dec. 30, 2012
 
Dec. 29, 2013
 
Dec. 30, 2012
 
 
 
 
 
 
 
 
 
 
 
GAAP net income (loss) attributable to stockholders
 
$
22,338

 
$
108,386

 
$
(144,771
)
 
$
95,593

 
$
(352,020
)
Utility and power plant projects
 
19,381

 
(26,323
)
 
82,294

 
77,338

 
107,163

Gain on contract termination
 

 
(51,987
)
 

 
(51,987
)
 

Stock-based compensation expense
 
14,575

 
12,082

 
9,260

 
45,678

 
42,439

Non-cash interest expense
 
12,634

 
12,311

 
8,841

 
49,016

 
38,177

October 2012 Restructuring Plan
 
2,018

 
56

 
30,227

 
1,241

 
30,227

Other
 
(648
)
 
779

 
48,628

 
3,609

 
153,338

Cash interest expense, net of interest income
 
11,536

 
16,292

 
11,545

 
56,283

 
46,804

Provision for income taxes
 
8,985

 
(4,575
)
 
9,300

 
11,905

 
21,842

Depreciation
 
24,553

 
24,722

 
25,909

 
97,446

 
108,656

EBITDA
 
$
115,372

 
$
91,743

 
$
81,233

 
$
386,122

 
$
196,626



FREE CASH FLOW:

 
 
THREE MONTHS ENDED
 
TWELVE MONTHS ENDED
 
 
Dec. 29, 2013
 
Sep. 29, 2013
 
Dec. 30, 2012
 
Dec. 29, 2013
 
Dec. 30, 2012
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
 
$
32,876

 
$
28,869

 
$
141,204

 
$
162,429

 
$
28,903

Net cash provided by (used in) investing activities
 
(59,296
)
 
74,570

 
(101,106
)
 
(153,178
)
 
(220,067
)
Proceeds from residential lease financing
 
13,027

 
26,817

 
33,568

 
96,392

 
60,377

Proceeds from sale-leaseback financing
 
32,382

 

 

 
73,139

 

Contributions from noncontrolling interests
 
26,607

 
29,535

 

 
100,008

 

Distributions to noncontrolling interests
 
(335
)
 

 

 
(335
)
 

Repayment of sale-leaseback financing
 
(3,680
)
 

 

 
(8,804
)
 

Free cash flow
 
$
41,581

 
$
159,791

 
$
73,666

 
$
269,651

 
$
(130,787
)





Q1 2014 GUIDANCE (in thousands except per share data)
Q1 2014
FY 2014
Revenue (GAAP)
$575,000-$625,000
$2,450,000-$2,650,000
Revenue (non-GAAP) (a)
$650,000-$700,000
$2,400,000-$2,600,000
Gross margin (GAAP)
18%-20%
20%-22%
Gross margin (non-GAAP) (b)
18%-20%
19%-21%
Net income per diluted share (GAAP)
$0.10-$0.25
$0.65-$0.95
Net income per diluted share (non-GAAP) (c)
$0.25-$0.40
$1.00-$1.30

(a)
Estimated non-GAAP amounts above include a net increase (decrease) of $75 million for Q1 2014 and $(50) million for fiscal 2014 of revenue primarily related to utility and power plant projects.

(b)
Estimated non-GAAP amounts above for Q1 2014 include net, pre-tax adjustments that increase gross margin by approximately $5 million related to the non-GAAP revenue adjustments that are discussed above, $3 million related to stock-based compensation expense, and $1 million related to non-cash interest expense. Estimated non-GAAP amounts above for fiscal 2014 include net, pre-tax adjustments that increase (decrease) gross margin by approximately $(40) million related to the non-GAAP revenue adjustments that are discussed above, $14 million related to stockbased compensation expense, and $3 million related to non-cash interest expense.

(c)
Estimated non-GAAP amounts above for Q1 2014 include estimated net, pre-tax adjustments that increase net income by approximately $5 million related to the non-GAAP revenue adjustments that are discussed above, $13 million related to stock-based compensation expense, $5 million related to non-cash interest expense, $2 million related to restructuring charges, and $3 million related to other items. Estimated non-GAAP amounts above for fiscal 2014 include estimated net, pre-tax adjustments that increase (decrease) net income by approximately $(40) million related to the non-GAAP revenue adjustments that are discussed above, $54 million related to stock-based compensation expense, $23 million related to non-cash interest expense, $5 million related to restructuring expenses, $10 million related to other items, and $5 million related to tax effects.




The following supplemental data represents the adjustments, individual charges and credits that are included and/or excluded from SunPower's non-GAAP gross margin, operating income (loss) and net income (loss) per share measures for each period presented in the Condensed Consolidated Statements of Operations contained herein.

SUPPLEMENTAL DATA
(In thousands)

THREE MONTHS ENDED

 
 
December 29, 2013
 
 
Revenue
 
Cost of revenue
 
Operating expenses
 
Other
income
(expense),
net
 
Benefit
from
(provision
for)
income
taxes
 
 
AMERICAS
 
EMEA
 
APAC
 
AMERICAS
 
EMEA
 
APAC
 
Research
and
development
 
Selling,
general
and
administrative
 
Restructuring
charges
 
Utility and power plant projects
 
$
120,058

 
$

 
$

 
$
(100,677
)
 
$

 
$

 
$

 
$

 
$

 
$

 
$

Stock-based compensation expense
 

 

 

 
1,941

 
798

 
925

 
1,677

 
9,234

 

 

 

Non-cash interest expense
 

 

 

 
401

 
127

 
171

 
19

 
23

 

 
11,893

 

October 2012 Restructuring Plan
 

 

 

 

 

 

 

 

 
2,018

 

 

Other
 

 

 

 
514

 

 

 

 
(48
)
 
(1,121
)
 
7

 

Tax effect
 

 

 

 

 

 

 

 

 

 

 
1,900

 
 
$
120,058

 
$

 
$

 
$
(97,821
)
 
$
925

 
$
1,096

 
$
1,696

 
$
9,209

 
$
897

 
$
11,900

 
$
1,900



 
 
September 29, 2013
 
 
Revenue
 
Cost of revenue
 
Operating expenses
 
Other
income
(expense),
net
 
Benefit
from
(provision
for)
income
taxes
 
 
AMERICAS
 
EMEA
 
APAC
 
AMERICAS
 
EMEA
 
APAC
 
Research
and
development
 
Selling,
general
and
administrative
 
Restructuring
charges
 
Utility and power plant projects
 
$
(37,669
)
 
$

 
$

 
$
11,346

 
$

 
$

 
$

 
$

 
$

 
$

 
$

Gain on contract termination
 

 

 

 
(25,604
)
 
(9,395
)
 
(16,988
)
 

 

 

 

 

Stock-based compensation expense
 

 

 

 
1,295

 
803

 
827

 
1,390

 
7,767

 

 

 

Non-cash interest expense
 

 

 

 
291

 
107

 
193

 
19

 
23

 

 
11,678

 

October 2012 Restructuring Plan
 

 

 

 

 

 

 

 

 
56

 

 

Other
 

 

 

 
42

 

 

 

 
(324
)
 
1,058

 
3

 

Tax effect
 

 

 

 

 

 

 

 

 

 

 
3,477

 
 
$
(37,669
)
 
$

 
$

 
$
(12,630
)
 
$
(8,485
)
 
$
(15,968
)
 
$
1,409

 
$
7,466

 
$
1,114

 
$
11,681

 
$
3,477




 
 
December 30, 2012
 
 
Revenue
 
Cost of revenue
 
Operating expenses
 
Other
income
(expense),
net
 
Benefit
from
(provision
for)
income
taxes
 
 
AMERICAS
 
EMEA
 
APAC
 
AMERICAS
 
EMEA
 
APAC
 
Research
and
development
 
Selling,
general
and
administrative
 
Restructuring
charges
 
Utility and power plant projects
 
$
106,052

 
$

 
$

 
$
(23,758
)
 
$

 
$

 
$

 
$

 
$

 
$

 
$

Stock-based compensation expense
 

 

 

 
1,438

 
693

 
453

 
1,085

 
5,591

 

 

 

Non-cash interest expense
 

 

 

 
293

 
101

 
102

 
5

 
29

 

 
8,311

 

October 2012 Restructuring Plan
 

 

 

 

 

 

 

 

 
30,227

 

 
 
Other
 

 

 

 
8,698

 
2,986

 
3,025

 
2,226

 
22,286

 
9,407

 

 

Tax effect
 

 

 

 

 

 

 

 

 

 

 
(12,823
)
 
 
$
106,052

 
$

 
$

 
$
(13,329
)
 
$
3,780

 
$
3,580

 
$
3,316

 
$
27,906

 
$
39,634

 
$
8,311

 
$
(12,823
)


TWELVE MONTHS ENDED

 
 
December 29, 2013
 
 
Revenue
 
Cost of revenue
 
Operating expenses
 
Other
income
(expense),
net
 
Benefit
from
(provision
for)
income
taxes
 
 
AMERICAS
 
EMEA
 
APAC
 
AMERICAS
 
EMEA
 
APAC
 
Research
and
development
 
Selling,
general
and
administrative
 
Restructuring
charges
 
Utility and power plant projects
 
$
95,788

 
$

 
$

 
$
(18,450
)
 
$

 
$

 
$

 
$

 
$

 
$

 
$

Gain on contract termination
 

 

 

 
(25,604
)
 
(9,395
)
 
(16,988
)
 

 

 

 

 

Stock-based compensation expense
 

 

 

 
5,150

 
2,660

 
3,006

 
5,414

 
29,448

 

 

 

Non-cash interest expense
 

 

 

 
1,203

 
495

 
713

 
74

 
92

 

 
46,439

 

October 2012 Restructuring Plan
 

 

 

 

 

 

 

 

 
1,241

 

 

Other
 

 

 
(672
)
 
957

 
186

 
258

 

 
1,482

 
1,361

 
37

 

Tax effect
 

 

 

 

 

 

 

 

 

 

 
523

 
 
$
95,788

 
$

 
$
(672
)
 
$
(36,744
)
 
$
(6,054
)
 
$
(13,011
)
 
$
5,488

 
$
31,022

 
$
2,602

 
$
46,476

 
$
523



 
 
December 30, 2012
 
 
Revenue
 
Cost of revenue
 
Operating expenses
 
Other
income
(expense),
net
 
Benefit
from
(provision
for)
income
taxes
 
 
AMERICAS
 
EMEA
 
APAC
 
AMERICAS
 
EMEA
 
APAC
 
Research
and
development
 
Selling,
general
and
administrative
 
Restructuring
charges
 
Utility and power plant projects
 
$
204,811

 
$

 
$

 
$
(97,648
)
 
$

 
$

 
$

 
$

 
$

 
$

 
$

Stock-based compensation expense
 

 

 

 
6,181

 
3,851

 
1,578

 
5,005

 
25,824

 

 

 

Non-cash interest expense
 

 

 

 
1,024

 
526

 
292

 
14

 
96

 

 
36,225

 

October 2012 Restructuring Plan
 

 

 

 

 

 

 

 

 
30,227

 

 

Other
 

 
(193
)
 

 
19,306

 
11,793

 
6,075

 
2,226

 
91,431

 
70,596

 
(47,896
)
 

Tax effect
 

 

 

 

 

 

 

 

 

 

 
2,132

 
 
$
204,811

 
$
(193
)
 
$

 
$
(71,137
)
 
$
16,170

 
$
7,945

 
$
7,245

 
$
117,351

 
$
100,823

 
$
(11,671
)
 
$
2,132