LDK Solar Co., Ltd. - Asia Europe Clean Energy (Solar) Advisory Co ...

Financing activities
Net cash provided by financing activities for the period from July 5 to December 31, 2005 amounted to
$28.1 million, mainly as a result of the initial capital contributions made to Jiangxi LDK Solar and loans and
advances from related parties. Net cash provided by financing activities for the year ended December 31, 2006
amounted to $154.9 million, mainly as a result of an aggregate of $77.4 million of net proceeds from our
Series A, Series B and Series C preferred share placements, net bank borrowings of $87.0 million and net
proceeds of $7.9 million from the issuance of our exchangeable notes. During the three months ended
March 31, 2007, net cash provided by financing activities amounted to $11.7 million mainly as a result of
$7.5 million of settlement of subscription receivable for ordinary shares and $4.3 million of net bank
borrowings.
The aggregate principal amount of our short-term bank borrowings outstanding as of December 31, 2006
was $56.8 million, compared to zero as of December 31, 2005. The aggregate principal amount of our longterm
bank borrowings outstanding as of December 31, 2006 was $30.2 million, compared to zero as of
December 31, 2005. The aggregate principal amount of our short-term bank borrowings outstanding as of
March 31, 2007 was $61.5 million. As of May 29, 2007, the aggregate principal amount of our outstanding
short-term bank borrowings was $103.7 million. The additional net short-term bank borrowings we have
incurred subsequent to March 31, 2007 were principally used to finance equipment purchases, including prepayments
for equipment.
Capital expenditures
We made capital expenditures of $15.5 million, $79.6 million and $23.3 million during the period from
July 5 to December 31, 2005, for the year ended December 31, 2006 and during the three months ended
March 31, 2007, respectively. Our capital expenditures were used primarily to build our wafer and ingot
processing plant, purchase production equipment and acquire advanced technologies.
Our capital expenditures will increase in the future as we expand our manufacturing capacity in line with
our business expansion strategy. We estimate that our capital expenditures will be approximately $160 million
in 2007 and approximately $180 million in 2008.
In addition to our planned capital expenditures, we have also entered into substantial commitments for
future purchases of polysilicon feedstock. These commitments as of March 31, 2007 amounted to approximately
$896.7 million in total, including approximately $172.2 million for 2007 and approximately $172.5 million
for 2008. Our actual polysilicon feedstock purchases in the future may exceed these amounts.
We believe that our current cash and cash equivalents, anticipated cash flow from our operations and
proceeds from this offering will be sufficient to meet our anticipated cash needs, including our cash needs for
working capital, such as purchases of polysilicon feedstock, and capital expenditures for at least the next
12 months. We may, however, require additional cash due to changing business conditions or other future
developments, including any investments or acquisitions we may decide to pursue. If we do not have sufficient
cash to meet our requirements, we may seek to issue additional equity securities or debt securities or to borrow
from lending institutions. If we are unable to obtain additional equity or debt financing as required, our
business operations and prospects may suffer.
Contractual Commitments
The following table sets forth our contractual cash commitments as of December 31, 2006. Amounts for
debt obligations are principal amounts only.
Payment Due by
Total Year-End 2007 Year-End 2008
(in thousands)
Year-End 2009 After 2009
Long-term debt obligations ÏÏÏÏÏÏÏÏÏ $ 30,245 $ Ì $ 9,866 $ 10,379 $ 10,000
Short-term debt obligations ÏÏÏÏÏÏÏÏÏ
Non-cancelable purchase obligations
56,765 56,765 Ì Ì Ì
Ì raw materials ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 847,790 174,600 169,525 173,916 329,749
Ì equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 212,317 182,217 30,100 Ì Ì
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,147,117 $413,582 $209,491 $184,295 $339,749
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