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SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2022

SEGMENT INFORMATION

SEGMENT INFORMATION

22. SEGMENT INFORMATION

The Company uses the management approach to determine operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance. The Company’s CODM has been identified as the Chief Executive Officer of the Company, since he reviews consolidated and segment results when making decisions about allocating resources and assessing performance of the Company.

From 2016 through the third quarter of 2020, the Company had been operating in two principal businesses: MSS and Energy. The MSS business comprised primarily the design, development, manufacture and sale of solar modules, other solar power products and solar system kits. The MSS business also provided engineering, procurement and construction (EPC) services. The Energy business comprised primarily the development and sale of solar power projects, operating solar power projects, the sale of electricity and operating and maintenance (O&M) services. The module sales from the Company’s MSS business to its Energy business were on terms and conditions similar to sales to third parties.

In July 2020, the Company reached a strategic decision to pursue a listing of its subsidiary, CSI Solar Co., Ltd., in China. From November 2021, the Company completed the transfer of the China solar power system and project assets from CSI Solar to the Global Energy segment to avoid any potential competition between the Company and its CSI Solar subsidiary, as part of the CSI Solar carve-out listing process. To align with the objective of ASC 280, Segment Reporting (“Topic 280”) and present the Company’s disaggregated financial information consistent with the management approach, the Company reports its financial performance, including revenue, gross profit and income from operations, based on the following two reportable segments:

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● CSI Solar, which consists of solar module manufacturing and total system solutions, including inverters, solar system kits and EPC (engineering, procurement and construction) services. The CSI Solar segment also includes the Company’s battery storage integration business, delivering bankable, end-to-end, turnkey battery storage solutions for utility scale, commercial and industrial, and residential applications. These storage systems solutions are complemented with long-term service agreements, including future battery capacity augmentation services.

● Global Energy, which carries out the Company’s global project development activities for both solar and battery storage project development, which include sourcing land, interconnection agreements, structuring power purchase agreements (PPAs), obtaining permits and other requirements. The Global Energy segment develops both stand-alone solar and stand-alone battery storage projects, as well as hybrid solar plus storage projects. Its monetization strategies vary between develop-to-sell, build-to-sell, and build-to-own, depending on business strategies and market conditions, with the goal of maximizing returns, accelerating cash turn and minimizing capital risk.

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The module, EPC and battery storage solutions sales from the Company’s CSI Solar business to its Global Energy business are on terms and conditions similar to sales to third parties.

​

The Company continually monitors and reviews its segment reporting structure in accordance with Topic 280 to determine whether any changes have occurred that would impact its reportable segments.

​

The Company’s CODM reviews net revenue and gross profit and does not review balance sheet information by segment.

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22. SEGMENT INFORMATION (Continued)

The following table summarizes the Company’s revenues, gross profit and income from operations generated from each segment:

​

​	​	​	​	​	​	​	​	​
​	​	Years Ended December 31, 2022
​	​	​	​	​	​	Elimination	​	​
​	​	​	​	​	​	and	​	​
​	​	​	​	​	​	unallocated	​	​
​		CSI Solar		Global Energy		items (1)		Total
​	​	$	​	$	​	$	​	$
Net revenues		6,975,612	​	821,525	​	(328,527)	​	7,468,610
Cost of revenues		5,824,855	​	660,161	​	(279,542)	​	6,205,474
Gross profit		1,150,757	​	161,364	​	(48,985)	​	1,263,136
Income from operations (2)	​	343,798	​	80,364	​	(68,101)	​	356,061

​

​

​	​	​	​	​	​	​	​	​
​	​	Years Ended December 31, 2021
​	​	​	​	​	​	Elimination	​	​
​	​	​	​	​	​	and	​	​
​	​	​	​	​	​	unallocated	​	​
​		CSI Solar		Global Energy		items (1)		Total
​	​	$	​	$	​	$	​	$
Net revenues		4,371,603	​	1,124,083	​	(218,517)	​	5,277,169
Cost of revenues		3,689,126	​	930,099	​	(251,368)	​	4,367,857
Gross profit		682,477	​	193,984	​	32,851	​	909,312
Income from operations (2)	​	74,132	​	97,179	​	19,070	​	190,381

​

​	​	​	​	​	​	​	​	​
​	​	Years Ended December 31, 2020
​	​	​	​	​	​	Elimination	​	​
​	​	​	​	​	​	and	​	​
​	​	​	​	​	​	unallocated	​	​
​		CSI Solar		Global Energy		items (1)		Total
​	​	$	​	$	​	$	​	$
Net revenues		3,105,044		726,167	​	(354,716)	​	3,476,495
Cost of revenues		2,496,153		577,052	​	(286,624)	​	2,786,581
Gross profit		608,891		149,115	​	(68,092)	​	689,914
Income from operations (2)	​	253,105	​	53,414	​	(86,089)	​	220,430

(1) Includes inter-segment elimination, and unallocated corporate costs not considered part of management’s evaluation of reportable segment operating performance.

(2) Income from operations reflects management’s allocation and estimate as some services are shared by the Company’s two reportable segments.

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22. SEGMENT INFORMATION (Continued)

During the years ended December 31, 2020, 2021 and 2022, $11,854, $6,084 and $60,330 of long-lived asset impairment charges, respectively, were recorded related to property, plant and equipment in CSI Solar segment. In addition, the Company recorded $24,060, nil and $357 of investment impairment in the CSI Solar segment, and $369, $17,152 and $1,674 of project assets impairment in the Global Energy segment, and for the years ended December 31, 2020, 2021 and 2022, respectively.

The following table summarizes the Company’s net revenues generated from different geographic locations. The information presented below is based on the location of customers’ global or regional headquarters, as appropriate:

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​	​	​	​	​	​	​
​	​	Years Ended December 31,
​		2020		2021		2022
​	​	$	​	$	​	$
The Americas:	​	​	​	​	​	​
—United States	​	696,101	​	1,590,573	​	1,963,956
—Brazil		284,478	​	442,603	​	623,331
—Canada	​	100,284	​	30,792	​	49,148
—Chile	​	4,872	​	18,461	​	37,370
—Mexico		118,846	​	139,611	​	31,912
—Others	​	16,524	​	57,554	​	87,934
​		1,221,105	​	2,279,594	​	2,793,651
Asia:	​	​	​	​	​	​
—PRC		504,656	​	1,207,003	​	1,904,862
—Japan	​	560,701	​	509,233	​	325,344
—India		61,141	​	142,300	​	197,772
—Pakistan		15,417	​	48,838	​	73,531
—Taiwan	​	24,422	​	7,702	​	67,411
—Hong Kong	​	13,571	​	9,979	​	46,254
—United Arab Emirates		53,981	​	6,168	​	15,974
—Thailand	​	6,108	​	59,451	​	9,941
—Vietnam	​	289,621	​	19,956	​	9,078
—Others	​	91,222	​	128,440	​	89,612
​	​	1,620,840	​	2,139,070	​	2,739,779
Europe and other regions:	​	​	​	​	​	​
—Spain		138,972	​	100,658	​	434,841
—Australia	​	120,403	​	165,772	​	393,959
—Germany	​	119,035	​	231,995	​	322,189
—Netherlands	​	96,372	​	104,715	​	136,375
—South Africa	​	49,375	​	90,761	​	118,458
—United Kingdom	​	8,842	​	7,749	​	106,662
—Czech	​	16,144	​	34,604	​	79,414
—Ireland	​	—	​	7,844	​	63,740
—Romania	​	1,258	​	3,699	​	31,804
—France		29,974	​	25,980	​	31,147
—Others		54,175	​	84,728	​	216,591
​	​	634,550	​	858,505	​	1,935,180
Total net revenues	​	3,476,495	​	5,277,169	​	7,468,610

​

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22. SEGMENT INFORMATION (Continued)

The following table summarizes the Company’s long-lived assets, including property, plant and equipment, non-current project assets, solar power systems, and intangible assets at December 31, 2021 and 2022 by geographic region, based on the physical location of the assets:

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​	​	​	​	​
​		At December 31,		At December 31,
​	​	2021	​	2022
​	​	$	​	$
PRC		1,252,189	​	1,668,177
Thailand	​	266,870	​	276,497
Brazil	​	710	​	242,761
Argentina	​	68,508	​	66,017
EU	​	1,824	​	27,182
Japan	​	16,413	​	14,440
Canada		9,269	​	6,200
United States	​	5,499	​	5,545
Others		14,147	​	5,770
Total long-lived assets		1,635,429	​	2,312,589

​

The following table summarizes the Company’s revenues generated from each product or service:

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​	​	​	​	​	​	​
​	​	Years Ended December 31,
​		2020		2021		2022
​	​	$	​	$	​	$
CSI Solar:	​	​	​	​	​	​
Solar modules		2,348,724	​	3,328,301	​	5,534,379
Solar system kits		157,656	​	302,133	​	538,157
Utility-scale battery storage	​	7,899	​	222,655	​	440,030
Residential battery storage	​	—	​	—	​	686
China energy/EPC (includes electricity sales)	​	175,388	​	178,830	​	35,711
Others	​	60,661	​	121,167	​	98,122
Global Energy:	​	​	​	​	​	​
Solar and battery storage projects		654,827	​	1,064,178	​	761,677
O&M and asset management services	​	26,386	​	35,334	​	33,776
Others (includes electricity sales)		44,954	​	24,571	​	26,072
Total net revenues		3,476,495	​	5,277,169	​	7,468,610

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- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
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