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FINANCIAL STATEMENTS SCHEDULE I | 12 Months Ended
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Dec. 31, 2012
FINANCIAL STATEMENTS SCHEDULE I |
FINANCIAL STATEMENTS SCHEDULE I | 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, 2012 of $359,922,466, 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, 2011 |  | December 31, 2012 |
--- | --- | --- | --- | --- | ---
|  | (In U.S. dollars, except share and per share data) |
ASSETS |
Current assets: |  |  |  |  |  |  |
Cash and cash equivalents |  |  | 7,924,686 |  |  | 11,247,306 |
Restricted cash |  |  | 5,731,365 |  |  | — |
Accounts receivable, net of allowance for doubtful accounts of $871,385 and $8,946,661 at December 31, 2011 and 2012, respectively |  |  | 9,325,500 |  |  | 2,567,756 |
Inventories |  |  | 12,824,582 |  |  | 2,984,075 |
Amounts due from related parties |  |  | 85,731,327 |  |  | 214,254,589 |
Deferred tax assets |  |  | 1,279,033 |  |  | — |
Prepaid expenses and other current assets |  |  | 3,011,995 |  |  | 10,552,409 |
Total current assets |  |  | 125,828,488 |  |  | 241,606,135 |
Investment in subsidiaries |  |  | 399,437,561 |  |  | 209,194,706 |
Deferred tax assets |  |  | 9,708,590 |  |  | 5,269,609 |
Amount due from related parties |  |  | 150,000,000 |  |  | 150,000,000 |
Other non-current assets |  |  | 14,972,773 |  |  | 35,356,421 |
TOTAL ASSETS |  |  | 699,947,412 |  |  | 641,426,871 |
LIABILITIES AND EQUITY |
Current liabilities: |  |  |  |  |  |  |
Short-term borrowings |  |  | — |  |  | 68,000,000 |
Accounts payable |  |  | 4,025 |  |  | 4,104 |
Amounts due to related parties |  |  | 177,769,708 |  |  | 159,471,359 |
Other current liabilities |  |  | 11,323,481 |  |  | 6,616,028 |
Total current liabilities |  |  | 189,097,214 |  |  | 234,091,491 |
Accrued warranty costs |  |  | 32,401,893 |  |  | 32,833,031 |
Convertible notes |  |  | 950,301 |  |  | — |
Long-term borrowings |  |  | — |  |  | 70,063,488 |
Liability for uncertain tax positions |  |  | 11,564,233 |  |  | 13,540,026 |
TOTAL LIABILITIES |  |  | 234,013,641 |  |  | 350,528,036 |
Equity: |  |  |  |  |  |  |
Common shares — no par value: unlimited authorized shares, 43,155,767 and 43,242,426 shares issued and outstanding at December 31, 2011 and 2012, respectively |  |  | 502,402,939 |  |  | 502,561,705 |
Additional paid-in capital |  |  | (53,331,445 | ) |  | (38,296,275 | )
Accumulated deficit |  |  | (28,693,433 | ) |  | (224,162,124 | )
Accumulated other comprehensive income |  |  | 45,555,710 |  |  | 50,795,529 |
Total equity |  |  | 465,933,771 |  |  | 290,898,835 |
TOTAL LIABILITIES AND EQUITY |  |  | 699,947,412 |  |  | 641,426,871 |
FINANCIAL INFORMATION OF PARENT COMPANY STATEMENTS OF OPERATIONS
|  | Years Ended December 31 |
--- | --- | --- | ---
|  | 2010 |  | 2011 |  | 2012 |
|  | (In U.S. dollars, except share and per share data) |
Net revenues |  |  | 1,248,400,119 |  |  | 829,016,524 |  |  | 111,414,327 |
Cost of revenues |  |  | 1,201,713,356 |  |  | 792,643,306 |  |  | 80,190,744 |
Gross profit |  |  | 46,686,763 |  |  | 36,373,218 |  |  | 31,223,583 |
Operating expenses: |  |  |  |  |  |  |  |  |  |
Selling expenses |  |  | 10,057,347 |  |  | 10,411,256 |  |  | 3,649,131 |
General and administrative expenses |  |  | 13,355,609 |  |  | 13,461,891 |  |  | 11,955,578 |
Research and development expenses |  |  | 792,509 |  |  | 1,255,945 |  |  | 764,145 |
Total operating expenses |  |  | 24,205,465 |  |  | 25,129,092 |  |  | 16,368,854 |
Profit from operations |  |  | 22,481,298 |  |  | 11,244,126 |  |  | 14,854,729 |
Other income (expenses): |  |  |  |  |  |  |  |  |  |
Interest expense |  |  | (296,678 | ) |  | (267,979 | ) |  | (255,502 | )
Interest income |  |  | 933,372 |  |  | 474,886 |  |  | 1,559,207 |
Investment loss |  |  | (3,000,000 | ) |  | — |  |  | — |
Foreign exchange gain (loss) |  |  | 830,602 |  |  | 3,261,933 |  |  | (622,816 | )
Profit before income taxes and equity in earnings of subsidiaries |  |  | 20,948,594 |  |  | 14,712,966 |  |  | 15,535,618 |
Income tax expense |  |  | (9,956,513 | ) |  | (6,742,827 | ) |  | (7,441,590 | )
Equity in earnings (loss) of subsidiaries |  |  | 39,576,838 |  |  | (98,774,339 | ) |  | (203,562,719 | )
Net Income (loss) |  |  | 50,568,919 |  |  | (90,804,200 | ) |  | (195,468,691 | )
FINANCIAL INFORMATION OF PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|  | Year ended December 31, |
--- | --- | --- | ---
|  | 2010 |  | 2011 |  | 2012 |
|  | (Amounts expressed in U.S. dollars) |
Net income (loss) |  |  | 50,568,919 |  |  | (90,804,200 | ) |  | (195,468,691 | )
Other comprehensive income: |  |  |  |  |  |  |  |  |  |
Foreign currency translation adjustment |  |  | 13,340,545 |  |  | 17,093,766 |  |  | 5,239,819 |
Comprehensive income (loss) attributable to Canadian Solar Inc. |  |  | 63,909,464 |  |  | (73,710,434 | ) |  | (190,228,872 | )
FINANCIAL INFORMATION OF PARENT COMPANY STATEMENTS OF CASH FLOWS
|  | Years Ended December 31, |
--- | --- | --- | ---
|  | 2010 |  | 2011 |  | 2012 |
|  | (In U.S. dollars) |
Operating activities: |  |  |  |  |  |  |  |  |  |
Net Income (loss) |  |  | 50,568,919 |  |  | (90,804,200 | ) |  | (195,468,691 | )
Depreciation and amortization |  |  | 5,888 |  |  | 5,864 |  |  | 6,950 |
Allowance for doubtful debts |  |  | (7,327,386 | ) |  | 5,829,275 |  |  | 8,369,187 |
Investment loss |  |  | 3,000,000 |  |  | — |  |  | — |
Amortization of discount on debt |  |  | 39,816 |  |  | 44,485 |  |  | 49,699 |
Equity in earnings (loss) of subsidiaries |  |  | (39,576,838 | ) |  | 98,774,339 |  |  | 203,562,719 |
Share-based compensation |  |  | 3,876,671 |  |  | 4,060,838 |  |  | 5,185,242 |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |  |
Inventories |  |  | 2,140,423 |  |  | 17,598,617 |  |  | 9,840,507 |
Accounts receivable |  |  | 37,753,416 |  |  | 99,826,223 |  |  | (1,317,532 | )
Amounts due from related parties |  |  | (16,299,621 | ) |  | (126,832,013 | ) |  | (121,173,334 | )
Advances to suppliers |  |  | 2,752,935 |  |  | 11,973,762 |  |  | (293,911 | )
Other current assets |  |  | (4,195,539 | ) |  | 6,399,566 |  |  | (7,540,414 | )
Other non-current assets |  |  | (5,786,798 | ) |  | (9,177,091 | ) |  | (20,387,009 | )
Accounts payable |  |  | 3,937,109 |  |  | (10,083,933 | ) |  | 79 |
Advances from customers |  |  | 130,350 |  |  | (216,370 | ) |  | (452,417 | )
Amounts due to related parties |  |  | (23,827,298 | ) |  | 17,530,108 |  |  | (18,298,349 | )
Accrued warranty costs |  |  | 11,874,837 |  |  | 5,416,935 |  |  | 431,138 |
Other current liabilities |  |  | 10,848,840 |  |  | (9,034,605 | ) |  | (4,255,036 | )
Liability for uncertain tax positions |  |  | 755,415 |  |  | 103,902 |  |  | 1,975,793 |
Deferred taxes |  |  | 392,598 |  |  | 384,345 |  |  | 5,718,014 |
Net cash provided by (used in) operating activities |  |  | 31,063,737 |  |  | 21,800,047 |  |  | (134,047,365 | )
FINANCIAL INFORMATION OF PARENT COMPANY STATEMENTS OF CASH FLOWS
|  | Years Ended December 31, |
--- | --- | --- | ---
|  | 2010 |  | 2011 |  | 2012 |
|  | (In U.S. dollars) |
Investing activities: |  |  |  |  |  |  |  |  |  |
Decrease (increase) in restricted cash |  |  | (31,476,334 | ) |  | 25,894,969 |  |  | 5,731,365 |
Investment in subsidiaries |  |  | (45,851,545 | ) |  | (75,955,691 | ) |  | (13,319,864 | )
Purchases of property, plant and equipment |  |  | (1,172 | ) |  | — |  |  | (3,589 | )
Net cash used in investing activities |  |  | (77,329,051 | ) |  | (50,060,722 | ) |  | (7,592,088 | )
Financing activities: |  |  |  |  |  |  |  |  |  |
Proceeds from short-term borrowings |  |  | — |  |  | — |  |  | 68,000,000 |
Proceeds from long-term borrowings |  |  | — |  |  | — |  |  | 70,063,488 |
Payment for repurchase of convertible notes |  |  | — |  |  | — |  |  | (1,000,000 | )
Proceeds from issuance of warrants |  |  | — |  |  | — |  |  | 2,500,000 |
Proceeds from exercise of stock options |  |  | 823,560 |  |  | 1,256,948 |  |  | 158,766 |
Net cash provided by financing activities |  |  | 823,560 |  |  | 1,256,948 |  |  | 139,722,254 |
Effect of exchange rate changes |  |  | 13,340,647 |  |  | 17,093,770 |  |  | 5,239,819 |
Net increase (decrease) in cash and cash equivalents |  |  | (32,101,107 | ) |  | (9,909,957 | ) |  | 3,322,620 |
Cash and cash equivalents at the beginning of the year |  |  | 49,935,750 |  |  | 17,834,643 |  |  | 7,924,686 |
Cash and cash equivalents at the end of the year |  |  | 17,834,643 |  |  | 7,924,686 |  |  | 11,247,306 |
Supplemental disclosure of cash flow information: |  |  |  |  |  |  |  |  |  |
Interest paid |  |  | 296,678 |  |  | 223,495 |  |  | 255,502 |
Income taxes paid |  |  | 5,204,641 |  |  | 13,575,821 |  |  | 290,813 |

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- Definition The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Paragraph c -Article 5 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Article 12 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 06 -Article 9 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 05 -Paragraph c -Article 7 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 45 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=7656940&loc=d3e5283-111683 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 3 -Subparagraph (SX 210.12-04) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e24072-122690 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Research Bulletin (ARB) -Number 51 -Paragraph 24 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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