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ineryAndEquipmentMember2024-03-310001274494us-gaap:MachineryAndEquipmentMember2023-12-310001274494us-gaap:FurnitureAndFixturesMember2024-03-310001274494us-gaap:FurnitureAndFixturesMember2023-12-310001274494us-gaap:LeaseholdsAndLeaseholdImprovementsMember2024-03-310001274494us-gaap:LeaseholdsAndLeaseholdImprovementsMember2023-12-310001274494us-gaap:ConstructionInProgressMember2024-03-310001274494us-gaap:ConstructionInProgressMember2023-12-310001274494us-gaap:PropertyPlantAndEquipmentMember2024-01-012024-03-310001274494us-gaap:PropertyPlantAndEquipmentMember2023-01-012023-03-310001274494fslr:CleantechSolarMember2024-01-012024-03-310001274494us-gaap:PropertyPlantAndEquipmentMember2024-03-310001274494us-gaap:PropertyPlantAndEquipmentMember2023-12-310001274494us-gaap:OtherAssetsMember2024-03-310001274494us-gaap:OtherAssetsMember2023-12-310001274494us-gaap:CostOfSalesMember2024-01-012024-03-310001274494us-gaap:CostOfSalesMember2023-01-012023-03-310001274494fslr:ResearchAndDevelopmentMember2024-01-012024-03-310001274494fslr:ResearchAndDevelopmentMember2023-01-012023-03-3100012744942023-12-012023-12-3100012744942024-04-012024-04-300001274494us-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherCurrentAssetsMember2024-03-310001274494us-gaap:CommodityContractMemberus-gaap:OtherCurrentLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001274494us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherCurrentAssetsMember2024-03-310001274494us-gaap:OtherCurrentLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001274494us-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMemberus-gaap:ForeignExchangeForwardMember2024-03-310001274494us-gaap:OtherCurrentLiabilitiesMemberus-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2024-03-310001274494us-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMember2024-03-310001274494us-gaap:OtherCurrentLiabilitiesMemberus-gaap:NondesignatedMember2024-03-310001274494us-gaap:OtherCurrentAssetsMember2024-03-310001274494us-gaap:OtherCurrentLiabilitiesMember2024-03-310001274494us-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherCurrentAssetsMember2023-12-310001274494us-gaap:CommodityContractMemberus-gaap:OtherCurrentLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-12-310001274494us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherCurrentAssetsMember2023-12-310001274494us-gaap:OtherCurrentLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-12-310001274494us-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMemberus-gaap:ForeignExchangeForwardMember2023-12-310001274494us-gaap:OtherCurrentLiabilitiesMemberus-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2023-12-310001274494us-gaap:NondesignatedMemberus-gaap:OtherCurrentAssetsMember2023-12-310001274494us-gaap:OtherCurrentLiabilitiesMemberus-gaap:NondesignatedMember2023-12-310001274494us-gaap:OtherCurrentAssetsMember2023-12-310001274494us-gaap:OtherCurrentLiabilitiesMember2023-12-310001274494us-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2023-12-310001274494us-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2024-01-012024-03-310001274494us-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2024-03-310001274494us-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2022-12-310001274494us-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2023-01-012023-03-310001274494us-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2023-03-310001274494us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2024-01-012024-03-310001274494us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2023-01-012023-03-310001274494currency:CADus-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2024-01-012024-03-310001274494us-gaap:ShortMembercurrency:CADus-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2024-03-31iso4217:CAD0001274494us-gaap:NondesignatedMembercurrency:EURus-gaap:ForeignExchangeForwardMember2024-01-012024-03-310001274494us-gaap:NondesignatedMemberus-gaap:LongMembercurrency:EURus-gaap:ForeignExchangeForwardMember2024-03-31iso4217:EUR0001274494us-gaap:ShortMemberus-gaap:NondesignatedMembercurrency:EURus-gaap:ForeignExchangeForwardMember2024-03-310001274494us-gaap:NondesignatedMembercurrency:INRus-gaap:ForeignExchangeForwardMember2024-01-012024-03-310001274494us-gaap:ShortMemberus-gaap:NondesignatedMembercurrency:INRus-gaap:ForeignExchangeForwardMember2024-03-31iso4217:INR0001274494us-gaap:NondesignatedMembercurrency:JPYus-gaap:ForeignExchangeForwardMember2024-01-012024-03-310001274494us-gaap:NondesignatedMemberus-gaap:LongMembercurrency:JPYus-gaap:ForeignExchang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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

(Mark one)

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
or
☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission file number: 001-33156
FSLR_Logo_2021.jpg
First Solar, Inc.
(Exact name of registrant as specified in its charter)
Delaware20-4623678
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

350 West Washington Street, Suite 600
Tempe, Arizona 85288
(Address of principal executive offices, including zip code)

(602) 414-9300
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, $0.001 par valueFSLRThe NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒Accelerated filer☐Non-accelerated filer☐
Smaller reporting company☐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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 26, 2024, 107,041,420 shares of the registrant’s common stock, $0.001 par value per share, were outstanding.



FIRST SOLAR, INC.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

TABLE OF CONTENTS
  Page

Throughout this Quarterly Report on Form 10-Q, we refer to First Solar, Inc. and its consolidated subsidiaries as “First Solar,” “the Company,” “we,” “us,” and “our.” Units of electricity are typically stated in gigawatts (“GW”).


Table of Contents
PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

FIRST SOLAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
20242023
Net sales$794,108 $548,286 
Cost of sales448,105 436,235 
Gross profit346,003 112,051 
Operating expenses:
Selling, general and administrative45,827 44,028 
Research and development42,742 30,510 
Production start-up15,408 19,494 
Total operating expenses103,977 94,032 
Gain on sales of businesses, net1,115 (17)
Operating income243,141 18,002 
Foreign currency loss, net(2,858)(5,947)
Interest income27,245 25,822 
Interest expense, net(9,210)(748)
Other expense, net(2,799)(1,456)
Income before taxes255,519 35,673 
Income tax (expense) benefit(18,903)6,888 
Net income$236,616 $42,561 
Net income per share:
Basic$2.21 $0.40 
Diluted$2.20 $0.40 
Weighted-average number of shares used in per share calculations:
Basic106,910 106,675 
Diluted107,407 107,154 

See accompanying notes to these condensed consolidated financial statements.
1
Table of Contents
FIRST SOLAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
Three Months Ended
March 31,
20242023
Net income$236,616 $42,561 
Other comprehensive (loss) income:
Foreign currency translation adjustments
(8,533)2,655 
Unrealized (loss) gain on marketable securities and restricted marketable securities, net of tax of $102 and $(402)
(2,003)6,966 
Unrealized gain on derivative instruments, net of tax of $(308) and $(708)
1,062 2,214 
Other comprehensive (loss) income(9,474)11,835 
Comprehensive income$227,142 $54,396 

See accompanying notes to these condensed consolidated financial statements.

2
Table of Contents
FIRST SOLAR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
 
 
March 31,
2024		December 31,
2023
ASSETS
Current assets: 
Cash and cash equivalents$1,682,081 $1,946,994 
Marketable securities308,016 155,495 
Accounts receivable trade, net669,745 660,776 
Government grants receivable, net184,761 659,745 
Inventories970,871 819,899 
Other current assets425,919 391,900 
Total current assets4,241,393 4,634,809 
Property, plant and equipment, net4,915,686 4,397,285 
Deferred tax assets, net169,767 142,819 
Restricted marketable securities194,482 198,310 
Government grants receivable347,845 152,208 
Goodwill28,735 29,687 
Intangible assets, net61,889 64,511 
Inventories265,034 266,899 
Other assets535,751 478,604 
Total assets$10,760,582 $10,365,132 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:  
Accounts payable$239,237 $207,178 
Income taxes payable52,060 22,134 
Accrued expenses528,060 524,829 
Current portion of debt200,907 96,238 
Deferred revenue692,675 413,579 
Other current liabilities45,778 42,200 
Total current liabilities1,758,717 1,306,158 
Accrued solar module collection and recycling liability134,250 135,123 
Long-term debt418,695 464,068 
Deferred revenue1,375,407 1,591,604 
Other liabilities170,999 180,710 
Total liabilities3,858,068 3,677,663 
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value per share; 500,000,000 shares authorized; 107,041,246 and 106,847,475 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively107 107 
Additional paid-in capital2,878,330 2,890,427 
Accumulated earnings4,207,682 3,971,066 
Accumulated other comprehensive loss(183,605)(174,131)
Total stockholders’ equity6,902,514 6,687,469 
Total liabilities and stockholders’ equity$10,760,582 $10,365,132 

See accompanying notes to these condensed consolidated financial statements.

3
Table of Contents
FIRST SOLAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
Three Months Ended March 31, 2024
 Common StockAdditional
Paid-In
Capital		Accumulated EarningsAccumulated
Other
Comprehensive Loss		Total
Stockholders' Equity
 SharesAmount
Balance at December 31, 2023106,847 $107 $2,890,427 $3,971,066 $(174,131)$6,687,469 
Net income— — — 236,616 — 236,616 
Other comprehensive loss— — — — (9,474)(9,474)
Common stock issued for share-based compensation
316 — — — — — 
Tax withholding related to vesting of restricted stock
(122)— (18,952)— — (18,952)
Share-based compensation expense
— — 6,855 — — 6,855 
Balance at March 31, 2024107,041 $107 $2,878,330 $4,207,682 $(183,605)$6,902,514 
Three Months Ended March 31, 2023
 Common StockAdditional
Paid-In
Capital		Accumulated EarningsAccumulated
Other
Comprehensive Loss		Total
Stockholders' Equity
 SharesAmount
Balance at December 31, 2022106,609 $107 $2,887,476 $3,140,289 $(191,817)$5,836,055 
Net income— — — 42,561 — 42,561 
Other comprehensive income— — — — 11,835 11,835 
Common stock issued for share-based compensation
364 — — — — — 
Tax withholding related to vesting of restricted stock
(148)— (28,314)— — (28,314)
Share-based compensation expense
— — 6,591 — — 6,591 
Balance at March 31, 2023106,825 $107 $2,865,753 $3,182,850 $(179,982)$5,868,728 

See accompanying notes to these condensed consolidated financial statements.
4
Table of Contents
FIRST SOLAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Three Months Ended
March 31,
20242023
Cash flows from operating activities:  
Net income$236,616 $42,561 
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Depreciation, amortization and accretion90,584 68,855 
Share-based compensation6,791 6,600 
Deferred income taxes(29,033)(55,282)
Gain on sales of businesses, net(1,115)17 
Other, net(814)(698)
Changes in operating assets and liabilities:
Accounts receivable, trade
17,499 33,933 
Inventories(149,470)(122,996)
Government grants receivable281,889 (70,114)
Other assets(89,610)(60,394)
Income tax receivable and payable26,239 43,646 
Accounts payable and accrued expenses(160,939)(61,552)
Deferred revenue37,978 139,713 
Other liabilities1,108 1,113 
Net cash provided by (used in) operating activities
267,723 (34,598)
Cash flows from investing activities:
Purchases of property, plant and equipment(413,456)(370,961)
Purchases of marketable securities and restricted marketable securities(569,446)(1,470,600)
Proceeds from maturities of marketable securities416,971 1,196,334 
Other investing activities(2,697)— 
Net cash used in investing activities
(568,628)(645,227)
Cash flows from financing activities:
Proceeds from borrowings under debt arrangements, net of issuance costs105,420 136,000 
Repayment of debt(45,771)— 
Payments of tax withholdings for restricted shares(18,952)(28,314)
Net cash provided by financing activities
40,697 107,686 
Effect of exchange rate changes on cash, cash equivalents, restricted cash, and restricted cash equivalents(1,938)1,495 
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents
(262,146)(570,644)
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of the period1,965,069 1,493,462 
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of the period$1,702,923 $922,818 
Supplemental disclosure of noncash investing and financing activities:  
Property, plant and equipment acquisitions funded by liabilities$445,963 $330,830 
Proceeds to be received from asset-based government grants
$154,754 $— 
Acquisitions funded by contingent consideration$18,500 $— 

See accompanying notes to these condensed consolidated financial statements.
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FIRST SOLAR, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of First Solar, Inc. and its subsidiaries in this Quarterly Report have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, these interim financial statements do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of First Solar management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement have been included. Certain prior period balances have been reclassified to conform to the current period presentation.

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Despite our intention to establish accurate estimates and reasonable assumptions, actual results could differ materially from such estimates and assumptions. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or for any other period. The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These interim financial statements and notes should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2023 included in our Annual Report on Form 10-K, which has been filed with the SEC.

Unless expressly stated or the context otherwise requires, the terms “the Company,” “we,” “us,” “our,” and “First Solar” refer to First Solar, Inc. and its consolidated subsidiaries, and the term “condensed consolidated financial statements” refers to the accompanying unaudited condensed consolidated financial statements contained in this Quarterly Report.

2. Cash, Cash Equivalents, and Marketable Securities

Cash, cash equivalents, and marketable securities consisted of the following at March 31, 2024 and December 31, 2023 (in thousands):
March 31,
2024		December 31,
2023
Cash and cash equivalents:
Cash$980,650 $841,310 
Money market funds701,431 1,105,684 
Total cash and cash equivalents1,682,081 1,946,994 
Marketable securities:
Foreign debt34,965 34,895 
U.S. debt44,203 44,089 
Time deposits228,848 76,511 
Total marketable securities308,016 155,495 
Total cash, cash equivalents, and marketable securities$1,990,097 $2,102,489 

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The following table provides a reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents reported within our condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023 to the total of such amounts as presented in the condensed consolidated statements of cash flows (in thousands):
Balance Sheet Line ItemMarch 31,
2024		December 31,
2023
Cash and cash equivalentsCash and cash equivalents$1,682,081 $1,946,994 
Restricted cash – current
Other current assets8,252 8,262 
Restricted cash – noncurrent
Other assets3,633 3,621 
Restricted cash equivalents – noncurrentOther assets8,957 6,192 
Total cash, cash equivalents, restricted cash, and restricted cash equivalents$1,702,923 $1,965,069 

See Note 8. “Fair Value Measurements” to our condensed consolidated financial statements for information about the fair value of our marketable securities.

The following tables summarize the unrealized gains and losses related to our available-for-sale marketable securities, by major security type, as of March 31, 2024 and December 31, 2023 (in thousands):
 As of March 31, 2024
Amortized
Cost		Unrealized
Gains		Unrealized
Losses		Allowance for Credit LossesFair
Value
Foreign debt$35,000 $— $20 $15 $34,965 
U.S. debt45,689 123 1,601 8 44,203 
Time deposits228,917 — — 69 228,848 
Total$309,606 $123 $1,621 $92 $308,016 
 As of December 31, 2023
Amortized
Cost		Unrealized
Gains		Unrealized
Losses		Allowance for Credit LossesFair
Value
Foreign debt$35,000 $— $91 $14 $34,895 
U.S. debt45,625 88 1,614 10 44,089 
Time deposits76,533 — — 22 76,511 
Total$157,158 $88 $1,705 $46 $155,495 

The contractual maturities of our marketable securities as of March 31, 2024 were as follows (in thousands):
Fair
Value
One year or less$299,587 
One year to two years4,569 
Two years to three years— 
Three years to four years— 
Four years to five years— 
More than five years3,860 
Total$308,016 

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3. Restricted Marketable Securities

Restricted marketable securities consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands):
 
 
March 31,
2024		December 31,
2023
Foreign government obligations$49,894 $51,229 
Supranational debt15,110 15,339 
U.S. debt110,826 113,326 
U.S. government obligations18,652 18,416 
Total restricted marketable securities$194,482 $198,310 

Our restricted marketable securities represent long-term investments to fund the estimated future cost of collecting and recycling modules covered under our solar module collection and recycling program. We have established a trust under which funds are put into custodial accounts with an established and reputable bank, for which First Solar, Inc.; First Solar Malaysia Sdn. Bhd.; and First Solar Manufacturing GmbH are grantors. As of March 31, 2024 and December 31, 2023, such custodial accounts also included noncurrent restricted cash and cash equivalents balances of $9.0 million and $6.2 million, respectively, which were reported within “Other assets.” Trust funds may be disbursed for qualified module collection and recycling costs (including capital and facility related recycling costs), payments to customers for assuming collection and recycling obligations, and reimbursements of any overfunded amounts. Investments in the trust must meet certain investment quality criteria comparable to highly rated government or agency bonds. As necessary, we fund any incremental amounts for our estimated collection and recycling obligations on an annual basis based on the estimated costs of collecting and recycling covered modules, estimated rates of return on our restricted marketable securities, and an estimated solar module life of 25 years, less amounts already funded in prior years. See Note 8. “Fair Value Measurements” to our condensed consolidated financial statements for information about the fair value of our restricted marketable securities.

The following tables summarize the unrealized gains and losses related to our restricted marketable securities, by major security type, as of March 31, 2024 and December 31, 2023 (in thousands):

 As of March 31, 2024
Amortized
Cost		Unrealized
Gains		Unrealized
Losses		Allowance for Credit LossesFair
Value
Foreign government obligations$64,127 $— $14,223 $10 $49,894 
Supranational debt17,634 — 2,524 — 15,110 
U.S. debt146,030 — 35,176 28 110,826 
U.S. government obligations24,437 — 5,780 5 18,652 
Total$252,228 $— $57,703 $43 $194,482 
 As of December 31, 2023
Amortized
Cost		Unrealized
Gains		Unrealized
Losses		Allowance for Credit LossesFair
Value
Foreign government obligations$65,202 $— $13,963 $10 $51,229 
Supranational debt17,688 — 2,349 — 15,339 
U.S. debt146,484 — 33,129 29 113,326 
U.S. government obligations24,460 — 6,039 5 18,416 
Total$253,834 $— $55,480 $44 $198,310 

As of March 31, 2024, the contractual maturities of these securities were between 7 years and 15 years.

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4. Consolidated Balance Sheet Details

Accounts receivable trade, net

Accounts receivable trade, net consisted of the following at March 31, 2024 and December 31, 2023 (in thousands):
 March 31,
2024		December 31,
2023
Accounts receivable trade, gross$671,648 $662,390 
Allowance for credit losses(1,903)(1,614)
Accounts receivable trade, net$669,745 $660,776 

Inventories

Inventories consisted of the following at March 31, 2024 and December 31, 2023 (in thousands):
 March 31,
2024		December 31,
2023
Raw materials$454,929 $478,138 
Work in process91,051 78,463 
Finished goods689,925 530,197 
Inventories$1,235,905 $1,086,798 
Inventories – current$970,871 $819,899 
Inventories – noncurrent$265,034 $266,899 

Other current assets

Other current assets consisted of the following at March 31, 2024 and December 31, 2023 (in thousands):
 March 31,
2024		December 31,
2023
Spare maintenance materials and parts$157,756 $148,218 
Indirect tax receivables85,421 65,301 
Prepaid expenses63,541 62,480 
Operating supplies46,587 43,995 
Insurance receivable for accrued litigation (1)21,800 21,800 
Restricted cash8,252 8,262 
Prepaid income taxes6,267 7,064 
Derivative instruments (2)3,490 1,778 
Other32,805 33,002 
Other current assets$425,919 $391,900 
——————————
(1)See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our legal proceedings.

(2)See Note 6. “Derivative Financial Instruments” to our condensed consolidated financial statements for discussion of our derivative instruments.

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Property, plant and equipment, net

Property, plant and equipment, net consisted of the following at March 31, 2024 and December 31, 2023 (in thousands):
 March 31,
2024		December 31,
2023
Land$38,799 $35,364 
Buildings and improvements 1,042,307 1,037,421 
Machinery and equipment 3,651,426 3,593,347 
Office equipment and furniture170,156 161,187 
Leasehold improvements40,322 40,084 
Construction in progress1,748,622 1,223,998 
Property, plant and equipment, gross6,691,632 6,091,401 
Accumulated depreciation(1,775,946)(1,694,116)
Property, plant and equipment, net$4,915,686 $4,397,285 

Depreciation of property, plant and equipment was $86.7 million and $65.9 million for the three months ended March 31, 2024 and 2023, respectively.

Other assets

Other assets consisted of the following at March 31, 2024 and December 31, 2023 (in thousands):
 March 31,
2024		December 31,
2023
Advance payments for raw materials$259,373 $204,370 
Lease assets (1)99,114 101,468 
Income tax receivables68,591 68,591 
Project assets26,551 28,430 
Prepaid expenses23,917 23,954 
Restricted cash equivalents8,957 6,192 
Restricted cash3,633 3,621 
Other (2)45,615 41,978 
Other assets$535,751 $478,604 
——————————
(1)See Note 7. “Leases” to our condensed consolidated financial statements for discussion of our lease arrangements.

(2)In November 2023, First Solar entered into a power purchase agreement with Cleantech Solar (“Cleantech”), a leading provider of renewable energy solutions in India and Southeast Asia. Under the agreement, Cleantech plans to construct certain photovoltaic (“PV”) solar and wind generating assets, which are expected to supply electricity to our manufacturing facility in India.

In February 2024, we purchased an ownership interest in a subsidiary of Cleantech for $3.0 million. This subsidiary owns certain of the generation assets that are expected to supply our facility, and we account for our investment in the subsidiary under the equity method of accounting.

During the three months ended March 31, 2024, we received advance payments of $21.4 million from this subsidiary for future module sales and recognized $6.1 million of revenue therefrom on module sales of 24 megawatts.

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Accrued expenses

Accrued expenses consisted of the following at March 31, 2024 and December 31, 2023 (in thousands):
 March 31,
2024		December 31,
2023
Accrued property, plant and equipment$308,432 $210,233 
Accrued freight64,703 58,494 
Accrued inventory 32,243 101,161 
Accrued other taxes31,868 26,781 
Accrued compensation and benefits19,935 55,960 
Product warranty liability (1)5,900 5,920 
Accrued interest4,312 11,011 
Other60,667 55,269 
Accrued expenses$528,060 $524,829 
——————————
(1)See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our “Product Warranties.”

Other current liabilities

Other current liabilities consisted of the following at March 31, 2024 and December 31, 2023 (in thousands):
 March 31,
2024		December 31,
2023
Accrued litigation (1)$21,800 $21,800 
Lease liabilities (2)10,523 10,358 
Contingent consideration (3)7,500 7,500 
Derivative instruments (4)1,600 1,744 
Other4,355 798 
Other current liabilities$45,778 $42,200 
——————————
(1)See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our legal proceedings.

(2)See Note 7. “Leases” to our condensed consolidated financial statements for discussion of our lease arrangements.

(3)See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our contingent consideration arrangements.

(4)See Note 6. “Derivative Financial Instruments” to our condensed consolidated financial statements for discussion of our derivative instruments.

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Other liabilities

Other liabilities consisted of the following at March 31, 2024 and December 31, 2023 (in thousands):
 March 31,
2024		December 31,
2023
Lease liabilities (1)$51,400 $53,725 
Deferred tax liabilities, net41,288 42,771 
Other taxes payable34,775 39,431 
Product warranty liability (2)19,294 19,571 
Contingent consideration (3)11,000 11,000 
Other13,242 14,212 
Other liabilities$170,999 $180,710 
——————————
(1)See Note 7. “Leases” to our condensed consolidated financial statements for discussion of our lease arrangements.

(2)See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our “Product Warranties.”

(3)See Note 10. “Commitments and Contingencies” to our condensed consolidated financial statements for discussion of our contingent consideration arrangements.

5. Government Grants

Government grants represent benefits provided by federal, state, or local governments that are not subject to the scope of Accounting Standards Codification (“ASC”) 740. We recognize a grant when we have reasonable assurance that we will comply with the grant’s conditions and that the grant will be received. Government grants whose primary condition is the purchase, construction, or acquisition of a long-lived asset are considered asset-based grants and are recognized as a reduction to such asset’s cost-basis, which reduces future depreciation. Other government grants not related to long-lived assets are considered income-based grants, which are recognized as a reduction to the related cost of activities that generated the benefit.

The following table presents the benefits recognized from asset-based government grants in our condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023 (in thousands):

Balance Sheet Line ItemMarch 31,
2024		December 31,
2023
Property, plant and equipment, net$148,906 $146,348 
Other assets5,848 5,860 

In February 2021, the state government of Tamil Nadu, India granted First Solar certain incentives associated with the construction of our first manufacturing facility in the country. Among other things, such incentives provide a 24% subsidy for eligible capital investments, contingent upon meeting certain minimum investment and employment commitments. The capital subsidy funding application process begins in the fiscal year following the initial period of module production and is expected to be paid in six annual installments thereafter. The timing of cash receipts is subject to the completion of audit certifications, funding applications by First Solar, and review by state government authorities. Module production in India began during the year ended December 31, 2023. We expect to submit initial funding applications in the second half of 2024. Such credit is reflected on our condensed consolidated balance sheets within “Government grants receivable.”

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The following table presents the benefits recognized from income-based government grants in our condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023 (in thousands):
Three Months Ended
March 31,
Income Statement Line Item20242023
Cost of sales$194,427 $70,114 
Research and development
4,000 — 

In August 2022, the U.S. President signed into law the Inflation Reduction Act of 2022 (“IRA”). Among other things, the IRA offers a tax credit, pursuant to Section 45X of the Internal Revenue Code (“IRC”), for solar modules and solar module components manufactured in the United States and sold to third parties. Such credit may be refundable by the Internal Revenue Service (“IRS”) or transferable to a third party and is available from 2023 to 2032, subject to phase down beginning in 2030. For eligible components, the credit is equal to (i) $12 per square meter for a PV wafer, (ii) 4 cents multiplied by the capacity of a PV cell, and (iii) 7 cents multiplied by the capacity of a PV module. Based on the current form factor of our modules, we expect to qualify for a credit of approximately 17 cents per watt for each module produced in the United States and sold to a third party. We recognize such credit as a reduction to “Cost of sales” in the period the modules are sold to customers. Such credit is also reflected on our condensed consolidated balance sheets within “Government grants receivable.”

In December 2023, we entered into an agreement with Fiserv, Inc. (“Fiserv”) for the sale of $687.2 million of Section 45X tax credits we generated during 2023 for aggregate cash proceeds of $659.7 million. We received initial cash proceeds of $480.0 million during the three months ended March 31, 2024 and received the remaining cash proceeds of $179.7 million in April 2024.

6. Derivative Financial Instruments

As a global company, we are exposed in the normal course of business to various risks, including foreign currency and commodity price risks, that could affect our financial position, results of operations, and cash flows. We may use derivative instruments to hedge against these risks and only hold such instruments for hedging purposes, not for speculative or trading purposes.

Depending on the terms of the specific derivative instruments and market conditions, some of our derivative instruments may be assets and others liabilities at any particular balance sheet date. We report all of our derivative instruments at fair value and account for changes in the fair value of derivative instruments within “Accumulated other comprehensive loss” if the derivative instruments qualify for hedge accounting. For those derivative instruments that do not qualify for hedge accounting (i.e., “economic hedges”), we record the changes in fair value directly to earnings. See Note 8. “Fair Value Measurements” to our condensed consolidated financial statements for information about the techniques we use to measure the fair value of our derivative instruments.

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The following tables present the fair values of derivative instruments included in our condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023 (in thousands):
 March 31, 2024
Other Current AssetsOther Current Liabilities
Derivatives designated as hedging instruments:
Commodity swap contracts$223 $— 
Total derivatives designated as hedging instruments$223 $— 
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts$3,267 $1,600 
Total derivatives not designated as hedging instruments$3,267 $1,600 
Total derivative instruments$3,490 $1,600 
 December 31, 2023
Other Current AssetsOther Current Liabilities
Derivatives designated as hedging instruments:
Commodity swap contracts$— $344 
Total derivatives designated as hedging instruments$— $344 
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts$1,778 $1,400 
Total derivatives not designated as hedging instruments$1,778 $1,400 
Total derivative instruments$1,778 $1,744 

The following table presents the pretax amounts related to derivative instruments designated as cash flow hedges affecting accumulated other comprehensive income (loss) and our condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023 (in thousands):
Commodity Swap Contracts
Balance as of December 31, 2023$(1,493)
Amounts recognized in other comprehensive income (loss)221 
Amount reclassified to cost of sales
1,149 
Balance as of March 31, 2024$(123)
Balance as of December 31, 2022$(7,242)
Amounts recognized in other comprehensive income (loss)254 
Amount reclassified to cost of sales
2,668 
Balance as of March 31, 2023$(4,320)


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The following table presents the effect of derivative instruments not designated as hedges on our condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023 (in thousands):
Amount of Loss
Recognized in Income
Three Months Ended
March 31,
Income Statement Line Item20242023
Foreign exchange forward contracts
Foreign currency loss, net$(8,949)$(4,683)

Foreign Currency Risk

Transaction Exposure and Economic Hedging

Many of our subsidiaries have assets and liabilities (primarily cash, receivables, deferred taxes, payables, accrued expenses, lease liabilities, debt, and solar module collection and recycling liabilities) that are denominated in currencies other than the subsidiaries’ functional currencies. Changes in the exchange rates between the functional currencies of our subsidiaries and the other currencies in which these assets and liabilities are denominated will create fluctuations in our reported condensed consolidated statements of operations. We may enter into foreign exchange forward contracts or other financial instruments to economically hedge assets and liabilities against the effects of currency exchange rate fluctuations. The gains and losses on such foreign exchange forward contracts will economically offset all or part of the transaction gains and losses that we recognize in earnings on the related foreign currency denominated assets and liabilities.

We also enter into foreign exchange forward contracts to economically hedge balance sheet and other exposures related to transactions between certain of our subsidiaries and transactions with third parties. Such contracts are considered economic hedges and do not qualify for hedge accounting. Accordingly, we recognize gains or losses from the fluctuations in foreign exchange rates and the fair value of these derivative contracts in “Foreign currency loss, net” on our condensed consolidated statements of operations.

As of March 31, 2024 and December 31, 2023, the notional values of our foreign exchange forward contracts that do not qualify for hedge accounting were as follows (notional amounts and U.S. dollar equivalents in millions):
March 31, 2024
TransactionCurrencyNotional AmountUSD Equivalent
SellCanadian dollarCAD 4.2$3.1
PurchaseEuro€162.7$175.5
SellEuro€26.8$28.9
SellIndian rupeeINR 67,848.1$814.0
PurchaseJapanese yen¥1,340.0$8.9
SellJapanese yen¥1,272.6$8.4
PurchaseMalaysian ringgitMYR 219.0$46.3
SellMalaysian ringgitMYR 62.5$13.2
SellMexican pesoMXN 34.6$2.1
PurchaseSingapore dollarSGD 25.8$19.1
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December 31, 2023
TransactionCurrencyNotional AmountUSD Equivalent
SellCanadian dollarCAD 4.2$3.2
SellChilean pesoCLP 1,372.6$1.6
PurchaseEuro€98.3$108.7
SellEuro€14.1$15.6
SellIndian rupeeINR 62,967.4$756.9
PurchaseJapanese yen¥1,053.6$7.5
SellJapanese yen¥705.2$5.0
PurchaseMalaysian ringgitMYR 160.7$35.0
SellMexican pesoMXN 34.6$2.0
PurchaseSingapore dollarSGD 6.5$4.9

Commodity Price Risk

From time to time, we use commodity swap contracts to mitigate our exposure to commodity price fluctuations for certain raw materials used in the production of our modules. During the year ended December 31, 2022, we entered into various commodity swap contracts to hedge a portion of our forecasted cash flows for purchases of aluminum frames between July 2022 and December 2023. Such swaps had an aggregate initial notional value based on metric tons of forecasted aluminum purchases, equivalent to $70.5 million, and entitled us to receive a three-month average London Metals Exchange price for aluminum while requiring us to pay certain fixed prices. The notional amount of the commodity swap contracts proportionately adjusted with forecasted purchases of aluminum frames.

During the three months ended March 31, 2024, we entered into various commodity swap contracts to hedge a portion of our forecasted cash flows for purchases of steel between April 2024 and December 2024. Such swaps had an aggregate initial notional value based on short tons of forecasted steel purchases, equivalent to $7.6 million, and entitle us to receive the price based on the U.S. Midwest Hot-Rolled Coil Steel Index while requiring us to pay certain fixed prices. The notional amount of the commodity swap contracts proportionately adjusts with forecasted purchases of steel. As of March 31, 2024, the notional value associated with these contracts was $5.9 million.

These commodity swap contracts qualify for accounting as cash flow hedges in accordance with ASC 815, and we designated them as such. We report unrealized gains or losses on such contracts in “Accumulated other comprehensive loss” and subsequently reclassify applicable amounts into earnings when the hedged transactions occur and impact earnings. We determined that these derivative financial instruments were highly effective as cash flow hedges as of March 31, 2024 and December 31, 2023. In the following 12 months, we expect to reclassify into earnings $0.1 million of net unrealized losses related to these commodity swap contracts that are included in “Accumulated other comprehensive loss” at March 31, 2024 as we realize the earnings effects of the related forecasted transactions.

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7. Leases

Our lease arrangements include land associated with our corporate and administrative offices, land for our manufacturing facilities, and certain of our manufacturing equipment. Such leases primarily relate to assets located in the United States, Malaysia, India, and Vietnam.

The following table presents certain quantitative information related to our lease arrangements for the three months ended March 31, 2024 and 2023, and as of March 31, 2024 and December 31, 2023 (in thousands):
Three Months Ended
March 31,
20242023
Finance lease cost:
Amortization of right-of-use assets$116$—
Interest on lease liabilities230—
Operating lease cost3,2212,937
Variable lease cost709895
Short-term lease cost18470
Total lease cost$4,460$3,902
Payments of amounts included in the measurement of:
Operating lease liabilities$3,001$2,753
Finance lease liabilities46—
Lease assets obtained in exchange for operating lease liabilities
506251
March 31, 2024December 31, 2023
Operating LeasesFinance
Leases		Operating LeasesFinance
Leases
Lease assets
$82,181$16,933$84,419$17,049
Lease liabilities – current
10,28723610,30751
Lease liabilities – noncurrent
34,33717,06336,66217,063
Weighted-average remaining lease term5 years40 years5 years40 years
Weighted-average discount rate5.2 %5.4 %5.2 %5.4 %

As of March 31, 2024, the future payments associated with our lease liabilities were as follows (in thousands):
Operating Leases
Finance
Leases
Remainder of 2024$9,075 $113 
202511,525 196 
20269,857 1,014 
20277,324 1,014 
20286,957 1,016 
20295,294 1,064 
Thereafter13 42,201 
Total future payments50,045 46,618 
Less: interest(5,421)(29,319)
Total lease liabilities$44,624 $17,299 

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8. Fair Value Measurements

The following is a description of the valuation techniques that we use to measure the fair value of assets and liabilities that we measure and report at fair value on a recurring basis:

•Cash Equivalents and Restricted Cash Equivalents. At March 31, 2024 and December 31, 2023, our cash equivalents and restricted cash equivalents consisted of money market funds. We value our cash equivalents and restricted cash equivalents using observable inputs that reflect quoted prices for securities with identical characteristics and classify the valuation techniques that use these inputs as Level 1.

•Marketable Securities and Restricted Marketable Securities. At March 31, 2024 and December 31, 2023, our marketable securities consisted of foreign debt, U.S. debt, and time deposits, and our restricted marketable securities consisted of foreign and U.S. government obligations, supranational debt, and U.S. debt. We value our marketable securities and restricted marketable securities using observable inputs that reflect quoted prices for securities with identical characteristics or quoted prices for securities with similar characteristics and other observable inputs (such as interest rates that are observable at commonly quoted intervals). Accordingly, we classify the valuation techniques that use these inputs as either Level 1 or Level 2 depending on the inputs used. We also consider the effect of our counterparties’ credit standing in these fair value measurements.

•Derivative Assets and Liabilities. At March 31, 2024 and December 31, 2023, our derivative assets and liabilities consisted of foreign exchange forward contracts involving major currencies and commodity swap contracts involving major commodity prices. Since our derivative assets and liabilities are not traded on an exchange, we value them using standard industry valuation models. As applicable, these models project future cash flows and discount the amounts to a present value using market-based observable inputs, including credit risk, foreign exchange rates, forward and spot prices for currencies, and forward prices for commodities. These inputs are observable in active markets over the contract term of the derivative instruments we hold, and accordingly, we classify the valuation techniques as Level 2. In evaluating credit risk, we consider the effect of our counterparties’ and our own credit standing in the fair value measurements of our derivative assets and liabilities, respectively.

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At March 31, 2024 and December 31, 2023, the fair value measurements of our assets and liabilities measured on a recurring basis were as follows (in thousands):
  Fair Value Measurements at Reporting
Date Using
 
 
 
 
 
 		March 31,
2024		Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets:
Cash equivalents:
Money market funds$701,431 $701,431 $— $— 
Restricted cash equivalents:
Money market funds8,957 8,957 — — 
Marketable securities:
Foreign debt34,965 — 34,965 — 
U.S. debt44,203 — 44,203 — 
Time deposits228,848 228,848 — — 
Restricted marketable securities194,482 — 194,482 — 
Derivative assets3,490 — 3,490 — 
Total assets$1,216,376 $939,236 $277,140 $— 
Liabilities:
Derivative liabilities$1,600 $— $1,600 $— 
  Fair Value Measurements at Reporting
Date Using
 
 
 
 
 
 		December 31,
2023		Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets:    
Cash equivalents:
Money market funds$1,105,684 $1,105,684 $— $— 
Restricted cash equivalents:
Money market funds6,192 6,192 — — 
Marketable securities:
Foreign debt34,895 — 34,895 — 
U.S. debt44,089 — 44,089 — 
Time deposits76,511 76,511 — — 
Restricted marketable securities198,310 — 198,310 — 
Derivative assets1,778 — 1,778 — 
Total assets$1,467,459 $1,188,387 $279,072 $— 
Liabilities:
Derivative liabilities$1,744 $— $1,744 $— 

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Fair Value of Financial Instruments

At March 31, 2024 and December 31, 2023, the carrying values and fair values of our financial instruments not measured at fair value were as follows (in thousands):
 March 31, 2024December 31, 2023
 
 		Carrying
Value		Fair
Value		Carrying
Value		Fair
Value
Assets:    
Government grants receivable - noncurrent$347,845 $310,688 $152,208 $107,111 
Liabilities:
Long-term debt (1)$500,000 $456,132 $500,000 $453,015 
——————————
(1)Excludes unamortized issuance costs and debt arrangements with an original maturity of less than one year.

The carrying values in our condensed consolidated balance sheets of our current trade accounts receivable, restricted cash, current government grants receivable, accounts payable, accrued expenses, and debt arrangements with an original maturity of less than one year approximated their fair values due to their nature and relatively short maturities; therefore, we excluded them from the foregoing table. The fair value measurements for our noncurrent government grants receivable and long-term debt are considered Level 2 measurements under the fair value hierarchy.

Credit Risk

We have certain financial and derivative instruments that subject us to credit risk. These consist primarily of cash, cash equivalents, marketable securities, accounts receivable, restricted cash, restricted cash equivalents, restricted marketable securities, foreign exchange forward contracts, and commodity swap contracts. We are exposed to credit losses in the event of nonperformance by the counterparties to our financial and derivative instruments. We place these instruments with various high-quality financial institutions and limit the amount of credit risk from any one counterparty. We monitor the credit standing of our counterparty financial institutions. Our net sales are primarily concentrated among a limited number of customers. We monitor the financial condition of our customers and perform credit evaluations whenever considered necessary. We typically require some form of payment security from our customers, including, but not limited to, advance payments, parent guarantees, letters of credit, bank guarantees, or surety bonds.

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9. Debt

Our debt arrangements consisted of the following at March 31, 2024 and December 31, 2023 (in thousands):
Balance (USD)
Loan AgreementCurrencyMarch 31,
2024		December 31,
2023
Revolving Credit FacilityUSD$— $— 
India Credit FacilityUSD500,000 500,000 
India JPM Working Capital Facility
INR
60,705 60,827 
India HSBC Working Capital Facility
INR
59,385 — 
Total debt principal620,090 560,827 
Less: unamortized issuance costs(488)(521)
Total debt619,602 560,306 
Less: current portion(200,907)(96,238)
Noncurrent portion$418,695 $464,068 

Revolving Credit Facility

In June 2023, we entered into a credit agreement with several financial institutions as lenders and JPMorgan Chase Bank, N.A. as administrative agent, which provides us with a senior secured credit facility (the “Revolving Credit Facility”) with an aggregate borrowing capacity of $1.0 billion. Borrowings under the Revolving Credit Facility bear interest at a rate per annum equal to, at our option, (i) the Term Secured Overnight Financing Rate (“Term SOFR”), plus a credit spread of 0.10%, plus a margin that ranges from 1.25% to 2.25% or (ii) an alternate base rate as defined in the credit agreement, plus a margin that ranges from 0.25% to 1.25%. The margins under the Revolving Credit Facility are based on the Company’s net leverage ratio or, if the Company elects to switch to a credit ratings-based system after the investment grade ratings trigger date occurs (as defined in the credit agreement), the Company’s public debt rating.

In addition to paying interest on outstanding principal under the Revolving Credit Facility, we are required to pay an unused commitment fee that ranges from 0.125% to 0.375% per annum based on the same factors discussed above and the daily unused commitments under the facility. We are also required to pay (i) a letter of credit fee based on the applicable margin for Term SOFR loans on the face amount of each letter of credit, (ii) a letter of credit fronting fee as agreed by the Company and such issuing lender, and (iii) other customary letter of credit fees. Our Revolving Credit Facility matures in June 2028.

As of March 31, 2024 and December 31, 2023, we had no borrowings or letters of credit under our Revolving Credit Facility. Loans and letters of credit issued under the Revolving Credit Facility are secured by liens on substantially all of the Company’s tangible and intangible assets.

India Credit Facility

In July 2022, FS India Solar Ventures Private Limited (“FSISV”), our indirect wholly-owned subsidiary, entered into a finance agreement (the “India Credit Facility”) with the U.S. International Development Finance Corporation for aggregate borrowings of up to $500.0 million for the development and construction of a solar module manufacturing facility in India. Principal on the India Credit Facility is payable in scheduled semi-annual installments beginning in the second half of 2024 through the facility’s expected maturity in August 2029. The India Credit Facility is guaranteed by First Solar, Inc.

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India JPM Working Capital Facility

In December 2022, FSISV entered into a working capital facility agreement (the “India JPM Working Capital Facility”) with JPMorgan Chase Bank, N.A. for the issuance of bank guarantees, bonds, and other similar forms of security. During 2023, the India JPM Working Capital Facility was amended to include certain working capital loans of up to INR 6.2 billion ($74.8 million). The outstanding balance matures during the second and third quarters of 2024. The India JPM Working Capital Facility is guaranteed by First Solar, Inc.

India HSBC Working Capital Facility

In February 2024, FSISV entered into a working capital facility agreement (the “India HSBC Working Capital Facility”) with the Hongkong and Shanghai Banking Corporation Limited, which provides certain working capital loans of up to INR 8.2 billion ($98.4 million). The outstanding balance matures in the third quarter of 2024. The India HSBC Working Capital Facility is guaranteed by First Solar, Inc.

Interest Rates

As of March 31, 2024, the borrowing rates for our debt arrangements were as follows:
Loan Agreement
Interest Rate Description
Interest Rate
India Credit FacilityU.S. Treasury Constant Maturity Yield plus 1.75%5.57%
India JPM Working Capital Facility (1)
India Treasury bill rate plus 2%
9.08%
India HSBC Working Capital Facility (1)
India Treasury bill rate plus 1.5% to 1.6%
8.44%
——————————
(1)The weighted-average interest rate for our outstanding short-term debt arrangements was 8.76% as of March 31, 2024.

Future Principal Payments

At March 31, 2024, the future principal payments on our debt arrangements were due as follows (in thousands):
Total Debt
Remainder of 2024$155,540 
202590,900 
202690,900 
202790,950 
202891,000 
2029100,800 
Thereafter— 
Total debt future principal payments$620,090 

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10. Commitments and Contingencies

Commercial Commitments

During the normal course of business, we enter into commercial commitments in the form of letters of credit and surety bonds to provide financial and performance assurance to third parties. As of March 31, 2024, the issued and outstanding amounts and available capacities under these commitments were as follows (in millions):
Issued and OutstandingAvailable Capacity
Revolving Credit Facility (1)$— $250.0 
Bilateral facilities (2)188.3 116.7 
Surety bonds28.6 225.0 
——————————
(1)Our Revolving Credit Facility provides us with a sub-limit of $250.0 million to issue letters of credit, at a fee based on the applicable margin for Term SOFR loans, a fronting fee, and other customary letter of credit fees.

(2)Of the total letters of credit issued under the bilateral facilities, $9.2 million was secured with cash.

Product Warranties

When we recognize revenue for sales of modules, we accrue liabilities for the estimated future costs of meeting our limited warranty obligations. We estimate our limited product warranty liability for power output and defects in materials and workmanship under normal use and service conditions based on return rates for each series of module technology. We make and revise these estimates based primarily on the number of solar modules under warranty installed at customer locations, our historical experience with and projections of warranty claims, and our estimated per-module replacement costs. We also monitor our expected future module performance through certain quality and reliability testing and actual performance in certain field installation sites. From time to time, we have taken remediation actions with respect to affected modules beyond our limited warranties and may elect to do so in the future, in which case we would incur additional expenses. Such potential voluntary future remediation actions beyond our limited warranty obligations may be material to our condensed consolidated statements of operations if we commit to any such remediation actions.

Product warranty activities during the three months ended March 31, 2024 and 2023 were as follows (in thousands):
Three Months Ended
March 31,
 20242023
Product warranty liability, beginning of period$25,491 $33,787 
Accruals for new warranties issued1,397 994 
Settlements(2,192)(1,326)
Changes in estimate of product warranty liability498 (140)
Product warranty liability, end of period$25,194 $33,315 
Current portion of warranty liability$5,900 $10,236 
Noncurrent portion of warranty liability$19,294 $23,079 

Indemnifications

In certain limited circumstances, we have provided indemnifications to customers or other parties under which we are contractually obligated to compensate such parties for losses they suffer resulting from a breach of a representation, warranty, or covenant; the resolution of specific matters associated with a project’s development or construction; guarantees of a third party’s payment or performance obligations; or any disallowance or lack of the right to claim all or any portion of certain tax credits. For contracts that have such indemnification provisions, we
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initially recognize a liability under ASC 460 for the estimated premium that would be required by a guarantor to issue the same indemnity in a standalone arm’s-length transaction with an unrelated party. We may base these estimates on the cost of insurance or other instruments that cover the underlying risks being indemnified and may purchase such instruments to mitigate our exposure to potential indemnification payments. We subsequently measure such liabilities at the greater of the initially estimated premium or the contingent liability required to be recognized under ASC 450. We recognize any indemnification liabilities as a reduction of earnings associated with the related transaction.

After an indemnification liability is recorded, we derecognize such amount pursuant to ASC 460 depending on the nature of the indemnity, which derecognition typically occurs upon expiration or settlement of the arrangement, and any contingent aspects of the indemnity are accounted for in accordance with ASC 450. As of March 31, 2024 and December 31, 2023, we accrued $2.5 million and $3.3 million of current indemnification liabilities, respectively. As of March 31, 2024, the maximum potential amount of future payments under our indemnifications was $510.1 million.

Contingent Consideration

As part of our acquisition of Evolar AB (“Evolar”) in May 2023, we agreed to pay additional consideration of up to $42.5 million to the selling shareholders contingent upon the successful achievement of certain technical milestones. As of March 31, 2024 and December 31, 2023, we recorded $7.5 million of current liabilities and $11.0 million of long-term liabilities for such contingent obligations based on their estimated fair values.

Solar Module Collection and Recycling Liability

We previously established a module collection and recycling program, which has since been discontinued, to collect and recycle modules sold and covered under such program once the modules reach the end of their service lives. For legacy customer sales contracts that are covered under this program, we agreed to pay the costs for the collection and recycling of qualifying solar modules, and the end-users agreed to notify us, disassemble their solar power systems, package the solar modules for shipment, and revert ownership rights over the modules back to us at the end of the modules’ service lives. Accordingly, we recorded any collection and recycling obligations within “Cost of sales” at the time of sale based on the estimated cost to collect and recycle the covered solar modules.

We estimate the cost of our collection and recycling obligations based on the present value of the expected future cost of collecting and recycling the solar modules, which includes estimates for the cost of packaging materials; the cost of freight from the solar module installation sites to a recycling center; material, labor, and capital costs; and by-product credits for certain materials recovered during the recycling process. We base these estimates on our experience collecting and recycling solar modules and certain assumptions regarding costs at the time the solar modules will be collected and recycled. In the periods between the time of sale and the related settlement of the collection and recycling obligation, we accrete the carrying amount of the associated liability and classify the corresponding expense within “Selling, general and administrative” expense on our condensed consolidated statements of operations.

Our module collection and recycling liability was $134.3 million and $135.1 million as of March 31, 2024 and December 31, 2023, respectively. See Note 3. “Restricted Marketable Securities” to our condensed consolidated financial statements for more information about our arrangements for funding this liability.

Legal Proceedings

In July 2021, Southern Power Company and certain of its affiliates (“Southern”) filed an arbitration demand with the American Arbitration Association against two subsidiaries of the Company, alleging breach of the engineering, procurement, and construction (“EPC”) agreements for five projects in the United States, for which the Company’s subsidiaries served as the EPC contractor. The arbitration demand asserts breach of obligations to design and
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engineer the projects in accordance with the EPC agreements, particularly as such obligations relate to the procurement of tracker systems and inverters. The Company and its subsidiaries denied the claims, and defended the claims in arbitration hearings, which concluded in February 2023. In May 2023, the parties submitted their final proposals of individual award claims to the arbitration panel. In July 2023, the arbitration panel entered an interim award to Southern for $35.6 million, which was paid during the year ended December 31, 2023. As a result, we recognized a loss for such interim award in our results of operations for the year ended December 31, 2023. The final arbitration award, which did not change the results of the interim award, was signed on November 6, 2023. On February 2, 2024, First Solar commenced an action in the New York County Supreme Court seeking to vacate certain aspects of the final award. As of April 29, 2024, the petition has been fully briefed, and we are awaiting a decision from the court.

During the year ended December 31, 2022, we received several indemnification demands from certain customers, for whom we provided EPC services, regarding claims that such customers’ PV tracker systems infringe, in part, on patents owned by Rovshan Sade (“Sade”), the owner of a company called Trabant Solar, Inc. In January 2023, we were notified by two of our customers that Sade served them with patent infringement complaints, and we have assumed the defense of these claims. We have conducted due diligence on the patents and claims and believe that we will prevail in the actions. In April 2023, we commenced an Inter Partes Review (“IPR”) before the United States Patent and Trademark Office seeking to invalidate such claims. On November 16, 2023, the United States Patent Trial and Appeal Board declined to hear the First Solar IPR. As a result, the stays in the court actions have been lifted and the litigation will proceed. On March 25, 2024, a new case management order was entered, aligning the schedules for all of the Sade cases. Substantive discovery has not yet commenced. Because we remain in early stages of the litigation, at this time we are not in a position to assess the likelihood of any potential loss or adverse effect on our financial condition or to estimate the amount or range of possible loss, if any, from these actions.

In April 2019, a subcontractor of First Solar sustained certain injuries while performing work at a former project site and, in May 2019, commenced legal action against a subsidiary of the Company. In June 2023, a jury awarded damages of approximately $51.3 million to the plaintiff. On September 21, 2023, the Superior Court of California for Monterey County ruled, in response to a motion for remittitur filed by the Company, that the damages awarded to the plaintiff were excessive and reduced the award from $51.3 million to $