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Financial Statements Schedule I | 12 Months Ended
--- | ---
Dec. 31, 2011
Financial Statements Schedule I |
Financial Statements Schedule I |
Appendix 1 Major Subsidiaries of CSI The following table sets forth information concerning CSI's major subsidiaries:
Subsidiary |  | Place and date of Incorporation |  | Attributable Equity Interest Held |  | Principal Activity
--- | --- | --- | --- | --- | --- | ---
CSI Solartronics(Changshu) Co., Ltd. |  | PRC November 23, 2001 |  |  | 100 | % | Developing solar power project
CSI Solar Technologies Inc. |  | PRC August 8, 2003 |  |  | 100 | % | Research and developing solar modules
CSI Solar Manufacture Inc. |  | PRC January 7, 2005 |  |  | 100 | % | Production of solar modules
CSI Solar New Energy (Suzhou) Co., Ltd. |  | PRC December 7, 2005 |  |  | 100 | % | Production of solar modules
Canadian Solar Manufacturing (Luoyang) Inc. |  | PRC February 24, 2006 |  |  | 100 | % | Manufacture of solar modules, ingots and wafers
Canadian Solar Manufacturing (Changshu) Inc. |  | PRC August 1, 2006 |  |  | 100 | % | Production of solar modules
CSI Cells Co., Ltd. |  | PRC August 23, 2006 |  |  | 100 | % | Manufacture of solar cells
Canadian Solar (USA) Inc. |  | USA June 8, 2007 |  |  | 100 | % | Sales and marketing of modules
CSI Project Consulting GmbH |  | Germany May 26, 2009 |  |  | 70 | % | Developing solar power project
Canadian Solar Japan K.K. |  | Japan June 21, 2009 |  |  | 90.67 | % | Sales and marketing of modules
Canadian Solar Solutions Inc. |  | Canada June 22, 2009 |  |  | 100 | % | Developing solar power project
CSI Solar Power (China) Inc. |  | PRC July 7, 2009 |  |  | 100 | % | Investment holding
Canadian Solar EMEA GmbH |  | Germany August 21, 2009 |  |  | 100 | % | Sales and marketing of modules
Canadian Solar Manufacturing (Ontario) Inc. |  | Canada June 30, 2010 |  |  | 100 | % | Production of solar modules
Canadian Solar (Australia) Pty., Ltd. |  | Australia February 3, 2011 |  |  | 100 | % | Sales and marketing of modules
Canadian Solar International Ltd. |  | Hong Kong March 25, 2011 |  |  | 100 | % | Sales and marketing of modules
Canadian Solar O&M (Ontraio) Inc. |  | Canada May 10, 2011 |  |  | 100 | % | Developing solar power project
SunE Sky GP First Light III Ltd. |  | Canada May 24, 2011 |  |  | 100 | % | Developing solar power project
SunE Sky First Light III LP |  | Canada May 24, 2011 |  |  | 100 | % | Developing solar power project
CSI-Cenergy Holdings, LLC |  | USA July 27, 2011 |  |  | 62.5 | % | Developing solar power project
Suzhou Sanysolar Materials Technology Co., Ltd. |  | PRC August 17, 2011 |  |  | 80 | % | Production of solar module materials
Canadian Solar South East Asia Pte., Ltd. |  | Singapore September 19, 2011 |  |  | 100 | % | Sales and marketing of modules
Additional Information—Financial Statements Schedule I Canadian Solar Inc. Schedule I has been provided pursuant to the requirements of Rule 12-04(a) and 4-08(e)(3) of Regulation S-X, which require condensed financial information as to financial position, changes in financial position and results of operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented as the restricted net assets of Canadian Solar Inc.'s consolidated and unconsolidated subsidiaries not available for distribution to Canadian Solar Inc. as of December 31, 2011 of $354,035,695, exceeded the 25% threshold. These financial statements have been prepared in conformity with accounting principles generally accepted in the United States except that the equity method has been used to account for investments in subsidiaries. Financial Information of Parent Company Balance Sheets
|  | December 31, 2010 |  | December 31, 2011 |
--- | --- | --- | --- | --- | ---
|  | (In U.S. dollars, except share and per share data) |
ASSETS |
Current assets: |  |  |  |  |  |  |
Cash and cash equivalents |  |  | 17,834,643 |  |  | 7,924,686 |
Restricted cash |  |  | 31,626,334 |  |  | 5,731,365 |
Accounts receivable, net of allowance for doubtful accounts of $6,080,501 and $871,385 at December 31, 2010 and 2011, respectively |  |  | 108,939,196 |  |  | 9,325,500 |
Inventories |  |  | 30,423,199 |  |  | 12,824,582 |
Advances to suppliers, net of allowance for doubtful accounts of $17,511 and $6,059,306 at December 31, 2010 and 2011, respectively |  |  | 4,069,236 |  |  | — |
Amounts due from related parties |  |  | 108,899,314 |  |  | 85,731,327 |
Deferred tax assets |  |  | 1,723,766 |  |  | 1,279,033 |
Prepaid expenses and other current assets |  |  | 9,411,569 |  |  | 3,011,995 |
Total current assets |  |  | 312,927,257 |  |  | 125,828,488 |
Advances to suppliers, net of allowance for doubtful accounts of nil and $11,365,975 at December 31, 2010 and 2011, respectively |  |  | 13,946,324 |  |  | — |
Investment in subsidiaries |  |  | 422,256,208 |  |  | 399,437,561 |
Deferred tax assets |  |  | 9,648,202 |  |  | 9,708,590 |
Amount due from related parties |  |  | — |  |  | 150,000,000 |
Other non-current assets |  |  | 5,801,542 |  |  | 14,972,773 |
TOTAL ASSETS |  |  | 764,579,533 |  |  | 699,947,412 |
LIABILITIES AND EQUITY |
Current liabilities: |  |  |  |  |  |  |
Accounts payable |  |  | 10,087,952 |  |  | 4,025 |
Amounts due to related parties |  |  | 160,239,600 |  |  | 177,769,708 |
Other current liabilities |  |  | 20,574,458 |  |  | 11,323,481 |
Total current liabilities |  |  | 190,902,010 |  |  | 189,097,214 |
Accrued warranty costs |  |  | 26,984,958 |  |  | 32,401,893 |
Convertible notes |  |  | 905,816 |  |  | 950,301 |
Liability for uncertain tax positions |  |  | 11,460,330 |  |  | 11,564,233 |
TOTAL LIABILITIES |  |  | 230,253,114 |  |  | 234,013,641 |
Equity: |  |  |  |  |  |  |
Common shares—no par value: unlimited authorized shares, 42,893,044 and 43,155,767 shares issued and outstanding at December 31, 2009 and 2010, respectively |  |  | 501,145,991 |  |  | 502,402,939 |
Additional paid-in capital |  |  | (57,392,283 | ) |  | (53,331,445 | )
Retained earnings(Accumulated deficit) |  |  | 62,110,767 |  |  | (28,693,433 | )
Accumulated other comprehensive income |  |  | 28,461,944 |  |  | 45,555,710 |
Total equity |  |  | 534,326,419 |  |  | 465,933,771 |
TOTAL LIABILITIES AND EQUITY |  |  | 764,579,533 |  |  | 699,947,412 |
Financial Information of Parent Company Statements of Operations
|  | Years Ended December 31 |
--- | --- | --- | ---
|  | 2009 |  | 2010 |  | 2011 |
|  | (In U.S. dollars, except share and per share data) |
Net revenues |  |  | 602,999,324 |  |  | 1,248,400,119 |  |  | 829,016,524 |
Cost of revenues |  |  | 591,746,362 |  |  | 1,201,713,356 |  |  | 792,643,306 |
Gross profit |  |  | 11,252,962 |  |  | 46,686,763 |  |  | 36,373,218 |
Operating expenses: |  |  |  |  |  |  |  |  |  |
Selling expenses |  |  | 8,510,250 |  |  | 10,057,347 |  |  | 10,411,256 |
General and administrative expenses |  |  | 17,258,546 |  |  | 13,355,609 |  |  | 13,461,891 |
Research and development expenses |  |  | 664,102 |  |  | 792,509 |  |  | 1,255,945 |
Total operating expenses |  |  | 26,432,898 |  |  | 24,205,465 |  |  | 25,129,092 |
Profit (loss) from operations |  |  | (15,179,936 | ) |  | 22,481,298 |  |  | 11,244,126 |
Other income (expenses): |  |  |  |  |  |  |  |  |  |
Interest expense |  |  | (140,314 | ) |  | (296,678 | ) |  | (267,979 | )
Interest income |  |  | 2,153,462 |  |  | 933,372 |  |  | 474,886 |
Investment loss |  |  | — |  |  | (3,000,000 | ) |  | — |
Foreign exchange gain |  |  | 4,281,909 |  |  | 830,602 |  |  | 3,261,933 |
Profit (loss) before income taxes and equity in earnings of subsidiaries |  |  | (8,884,879 | ) |  | 20,948,594 |  |  | 14,712,966 |
Income tax expense |  |  | (1,576,793 | ) |  | (9,956,513 | ) |  | (6,742,827 | )
Equity in earnings(loss) of subsidiaries |  |  | 33,107,556 |  |  | 39,576,838 |  |  | (98,777,339 | )
Net Income (loss) |  |  | 22,645,884 |  |  | 50,568,919 |  |  | (90,804,200 | )
Financial Information of Parent Company Statements of Cash Flows
|  | Years Ended December 31, |
--- | --- | --- | ---
|  | 2009 |  | 2010 |  | 2011 |
|  | (In U.S. dollars) |
Operating activities: |  |  |  |  |  |  |  |  |  |
Net Income (loss) |  |  | 22,645,884 |  |  | 50,568,919 |  |  | (90,804,200 | )
Depreciation and amortization |  |  | 5,450 |  |  | 5,888 |  |  | 5,864 |
Allowance for doubtful debts |  |  | 8,208,800 |  |  | (7,327,386 | ) |  | 5,829,275 |
Investment loss |  |  | — |  |  | 3,000,000 |  |  | — |
Amortization of discount on debt |  |  | 35,638 |  |  | 39,816 |  |  | 44,485 |
Equity in earnings (loss) of subsidiaries |  |  | (33,107,556 | ) |  | (39,576,838 | ) |  | 98,774,339 |
Share-based compensation |  |  | 5,436,350 |  |  | 3,876,671 |  |  | 4,060,838 |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |  |
Inventories |  |  | (29,306,391 | ) |  | 2,140,423 |  |  | 17,598,617 |
Accounts receivable |  |  | (105,141,401 | ) |  | 37,753,416 |  |  | 99,826,223 |
Amounts due from related parties |  |  | (9,102,961 | ) |  | (16,299,621 | ) |  | (126,832,013 | )
Advances to suppliers |  |  | (7,248,785 | ) |  | 2,752,935 |  |  | 11,973,762 |
Other current assets |  |  | (327,630 | ) |  | (4,195,539 | ) |  | 6,399,566 |
Other non-current assets |  |  | — |  |  | (5,786,798 | ) |  | (9,177,091 | )
Accounts payable |  |  | 6,026,101 |  |  | 3,937,109 |  |  | (10,083,933 | )
Advances from customers |  |  | 1,713,862 |  |  | 130,350 |  |  | (216,370 | )
Amounts due to related parties |  |  | 139,080,262 |  |  | (23,827,298 | ) |  | 17,530,108 |
Accrued warranty costs |  |  | 5,618,662 |  |  | 11,874,837 |  |  | 5,416,935 |
Other current liabilities |  |  | 3,900,397 |  |  | 10,848,840 |  |  | (9,034,605 | )
Liability for uncertain tax positions |  |  | 2,001,087 |  |  | 755,415 |  |  | 103,902 |
Deferred taxes |  |  | (3,213,988 | ) |  | 392,598 |  |  | 384,345 |
Net cash provided by operating activities |  |  | 7,223,781 |  |  | 31,063,737 |  |  | 21,800,047 |
Investing activities: |  |  |  |  |  |  |  |  |  |
Decrease (increase) in restricted cash |  |  | (150,000 | ) |  | (31,476,334 | ) |  | 25,894,969 |
Investment in subsidiaries |  |  | (74,120,415 | ) |  | (45,851,545 | ) |  | (75,955,691 | )
Purchases of property, plant and equipment |  |  | (3,497 | ) |  | (1,172 | ) |  | — |
Net cash used in investing activities |  |  | (74,273,912 | ) |  | (77,329,051 | ) |  | (50,060,722 | )
Financing activities: |  |  |  |  |  |  |  |  |  |
Proceeds from issuance of common shares |  |  | 103,349,924 |  |  | — |  |  | — |
Issuance costs paid for common shares offering |  |  | (538,581 | ) |  | — |  |  | — |
Proceeds from exercise of stock options |  |  | 674,424 |  |  | 823,560 |  |  | 1,256,948 |
Net cash provided by financing activities |  |  | 103,485,767 |  |  | 823,560 |  |  | 1,256,948 |
Effect of exchange rate changes |  |  | 210,504 |  |  | 13,340,647 |  |  | 17,093,770 |
Net increase (decrease) in cash and cash equivalents |  |  | 36,646,140 |  |  | (32,101,107 | ) |  | (9,909,957 | )
Cash and cash equivalents at the beginning of the year |  |  | 13,289,610 |  |  | 49,935,750 |  |  | 17,834,643 |
Cash and cash equivalents at the end of the year |  |  | 49,935,750 |  |  | 17,834,643 |  |  | 7,924,686 |
Supplemental disclosure of cash flow information: |  |  |  |  |  |  |  |  |  |
Interest paid |  |  | 104,676 |  |  | 296,678 |  |  | 223,495 |
Income taxes paid |  |  | 1,680,672 |  |  | 5,204,641 |  |  | 13,575,821 |

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