Additional Information—Financial Statement 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, 2016 of $411,882, exceeded the 25% threshold.

The condensed financial information has been prepared using the same accounting policies as set out in the consolidated financial statements, except that the equity method has been used to account for investments in subsidiaries.

FINANCIAL INFORMATION OF PARENT COMPANY

BALANCE SHEETS

	December 31, 2015			December 31, 2016
	(In Thousands of U.S. Dollars, except share data)
ASSETS
Current assets:
Cash and cash equivalents		34,206			21,348
Restricted cash		6,512			—
Accounts receivable trade, net of allowance for doubtful accounts of $3,852 and $3,007 as of December 31, 2015 and 2016, respectively		2,268			103
Inventories		146			—
Amounts due from related parties		725,063			419,075
Derivative assets—current		1,030			2,425
Advances to suppliers, net of allowance for doubtful accounts of $5,225 and $5,225 as of December 31, 2015 and 2016, respectively		226			—
Prepaid expenses and other current assets		13,809			4,871

Total current assets		783,260			447,822
Investment in subsidiaries		765,880			789,633
Deferred tax assets—non-current		2,204			22,609
Other non-current assets		59,571			64,903

TOTAL ASSETS		1,610,915			1,324,967


LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings		10,000			10,000
Accounts payable		8			3
Amounts due to related parties		202,359			73,053
Derivative liabilities—current		27,029			1,914
Other current liabilities		12,661			10,952

Total current liabilities		252,057			95,922
Accrued warranty costs		15,331			2,950
Convertible notes		146,674			125,569
Long-term borrowings		364,680			190,000
Deferred tax liabilities—non-current		—			20,054
Liability for uncertain tax positions		13,205			5,791

TOTAL LIABILITIES		791,947			440,286

Equity:
Common shares—no par value: unlimited authorized shares, 55,965,443 and 57,830,149 shares issued and outstanding at December 31, 2015 and 2016, respectively		677,103			701,283
Additional paid-in capital		(17,139	)		(8,897	)
Retained earnings		218,860			284,109
Accumulated other comprehensive loss		(59,856	)		(91,814	)

TOTAL EQUITY		818,968			884,681

TOTAL LIABILITIES AND EQUITY		1,610,915			1,324,967

FINANCIAL INFORMATION OF PARENT COMPANY

STATEMENTS OF OPERATIONS

	Years Ended December 31
	2014			2015			2016
	(In Thousands of U.S. Dollars)
Net revenues		15,900			23,302			13,748
Cost of revenues		4,401			15,850			9,657

Gross profit		11,499			7,452			4,091

Operating expenses:
Selling expenses		4,000			3,309			3,727
General and administrative expenses		8,331			29,124			17,167
Research and development expenses		416			450			589

Total operating expenses		12,747			32,883			21,483

Loss from operations		(1,248	)		(25,431	)		(17,392	)

Other income (expenses):
Interest expense		(6,329	)		(17,241	)		(29,032	)
Interest income		10,369			34,471			44,666
Gain (loss) on change in fair value of derivatives		—			(13,571	)		30,988
Foreign exchange gain (loss)		(5,335	)		1,324			(3,810	)
Gain on repurchase of convertible notes		—			—			2,782
Others		47			—			—

Other income (expenses), net:		(1,248	)		4,983			45,594

Income (loss) before income taxes and equity in earnings (loss) of subsidiaries and unconsolidated investees		(2,496	)		(20,448	)		28,202
Income tax expense		(1,005	)		(1,231	)		(6,599	)
Equity in earnings of subsidiaries		243,283			193,813			43,596
Equity in (loss) earnings of unconsolidated investees		(280	)		(273	)		50

Net income		239,502			171,861			65,249

FINANCIAL INFORMATION OF PARENT COMPANY

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Years Ended December 31,
	2014			2015			2016
	(In Thousands of U.S. Dollars)
Net income		239,502			171,861			65,249
Other comprehensive loss (net of tax of nil):
Foreign currency translation adjustment		(33,853	)		(79,913	)		(31,958	)

Comprehensive income		205,649			91,948			33,291

FINANCIAL INFORMATION OF PARENT COMPANY

STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2014			2015			2016
	(In Thousands of U.S. Dollars)
Operating activities:
Net income		239,502			171,861			65,249
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		1			32			32
Loss on disposal of property, plant and equipment		4			—			—
(Gain) loss on change in fair value of derivatives		—			13,571			(30,988	)
Gain on repurchase of convertible notes		—			—			(2,782	)
Allowance for doubtful accounts		11,434			1,535			(844	)
Equity in earnings of subsidiaries		(243,283	)		(193,813	)		(43,596	)
Equity in loss (earnings) of unconsolidated investees		280			273			(50	)
Share-based compensation		5,088			5,966			7,757
Changes in operating assets and liabilities:
Inventories		(286	)		296			146
Accounts receivable trade		(5,244	)		2,189			3,010
Amounts due from related parties		3,905			228,284			21,731
Advances to suppliers		(11,836	)		(226	)		226
Prepaid expenses and other current assets		(2,260	)		(7,106	)		6,955
Other non-current assets		(19,727	)		(14,710	)		(2,039	)
Accounts payable		(9	)		3			(4	)
Advances from customers		(657	)		1,352			(1,413	)
Amounts due to related parties		(42,128	)		103,348			(129,307	)
Accrued warranty costs		84			(2,941	)		(12,381	)
Other liabilities		3,544			4,484			(297	)
Liability for uncertain tax positions		633			(1,111	)		(7,413	)
Deferred taxes		1,208			1,451			199
Net settlement of derivatives		—			(3,950	)		17,043

Net cash provided by (used in) operating activities		(59,747	)		310,788			(108,766	)

Investing activities:
(Increase) decrease in restricted cash		—			(6,513	)		6,512
Investment in subsidiaries		(39,668	)		(116,840	)		—
Purchase of property, plant and equipment		(5	)		—			—
(Funding) repayment of loans to subsidiaries		(128,213	)		(550,776	)		299,578

Net cash provided by (used in) investing activities		(167,886	)		(674,129	)		306,090

Financing activities:
Proceeds from short-term borrowings		—			10,000			—
Repayment of short-term borrowings		(12,246	)		—			(190,000	)
Proceeds from long-term borrowings		—			364,680			—
Repayment of long-term borrowings		(16,393	)		—			—
Proceeds from issuance of warrant		—			16,378			—
Investment on non-controlling interest		—			(918	)		—
Proceeds from issuance of common shares		115,009			—			23,864
Issuance costs paid for common shares offering		(6,090	)		—			(456	)
Proceeds from issuance of convertible notes		150,000			—			—
Payment for repurchase of convertible notes		—			—			(19,667	)
Issuance cost paid on convertible notes		(5,103	)		—			—
Proceeds from exercise of stock options		3,342			1,867			707

Net cash provided by (used in) financing activities		228,519			392,007			(185,552	)

Effect of exchange rate changes		(27,016	)		2,085			(24,630	)

Net increase (decrease) in cash and cash equivalents		(26,130	)		30,751			(12,858	)
Cash and cash equivalents at the beginning of the year		29,585			3,455			34,206

Cash and cash equivalents at the end of the year		3,455			34,206			21,348

Supplemental disclosure of cash flow information:
Interest paid (net of amounts capitalized)		3,942			15,299			29,288
Income taxes paid		736			—			—