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Additional Information - Financial Statement Schedule I

12 Months Ended

Dec. 31, 2023

Additional Information - Financial Statement Schedule I

Additional Information - Financial Statement Schedule I

Additional Information — Condensed Financial Statements of Parent Company

Canadian Solar Inc.

The following condensed financial statements of Canadian Solar Inc. 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, cash flows 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, 2023 of $1,587,503, 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. The Company’s share of income from its subsidiaries is reported as equity in earnings of subsidiaries in the condensed financial statements. These statements should be read in conjunction with the notes to the consolidated financial statements of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.

FINANCIAL INFORMATION OF PARENT COMPANY

BALANCE SHEETS


		December 31,		December 31,
		2022		2023

		(In Thousands of U.S. Dollars, except
		share data)
ASSETS
Current assets:
Cash and cash equivalents		15,661		642
Amounts due from subsidiaries		582,685		339,809
Prepaid expenses and other current assets		13,218		14,812
Total current assets		611,564		355,263
Investments in subsidiaries		2,158,474		2,561,797
Investments in affiliates		11,745		11,745
Deferred tax assets		1,755		—
Other non-current assets		39,837		39,837
TOTAL ASSETS		2,823,375		2,968,642
LIABILITIES AND EQUITY
Current liabilities:
Amounts due to subsidiaries		640,055		157,821
Derivative liabilities		762		1,438
Other current liabilities		4,522		8,899
Total current liabilities		645,339		168,158
Convertible notes		225,977		227,424
Deferred tax liabilities		4,690		8,115
Liability for uncertain tax positions		5,730		5,702
TOTAL LIABILITIES		881,736		409,399
Equity:
Common shares — no par value: unlimited authorized shares, 64,506,055 and 66,158,741 shares issued and outstanding at December 31, 2022 and 2023, respectively		835,543		835,543
Additional paid-in capital		1,127		292,737
Retained earnings		1,275,520		1,549,707
Accumulated other comprehensive loss		(170,551)		(118,744)
TOTAL EQUITY		1,941,639		2,559,243
TOTAL LIABILITIES AND EQUITY		2,823,375		2,968,642

FINANCIAL INFORMATION OF PARENT COMPANY

STATEMENTS OF OPERATIONS


		Years Ended December 31,
		2021		2022		2023

		(In Thousands of U.S. Dollars)
Net revenues		341		—		—
Cost of revenues		—		—		—
Gross profit		341		—		—
Operating expenses:
Selling and distribution expenses		766		890		263
General and administrative expenses		9,177		11,261		39,838
Research and development expenses		182		155		97
Other operating income, net		(282)		—		—
Total operating expenses		9,843		12,306		40,198
Loss from operations		(9,502)		(12,306)		(40,198)
Other income (expenses):
Interest expense		(19,677)		(23,229)		(18,720)
Interest income		20,249		20,563		22,862
Gain (loss) on change in fair value of derivatives, net		4,043		(844)		(1,535)
Foreign exchange gain (loss), net		(3,674)		616		(772)
Other income (expenses), net:		941		(2,894)		1,835
Loss before income taxes and equity in earnings of subsidiaries		(8,561)		(15,200)		(38,363)
Income tax benefit (expense)		2,424		8,786		(6,775)
Equity in earnings of subsidiaries		101,385		246,382		319,325
Net income		95,248		239,968		274,187

FINANCIAL INFORMATION OF PARENT COMPANY

STATEMENTS OF COMPREHENSIVE INCOME


		Years Ended December 31,
		2021		2022		2023

		(In Thousands of U.S. Dollars)
Net income		95,248		239,968		274,187
Other comprehensive income (loss) (net of tax)		(21,905)		(120,511)		13,412
Comprehensive income		73,343		119,457		287,599

FINANCIAL INFORMATION OF PARENT COMPANY

STATEMENTS OF CASH FLOWS


		Years Ended December 31,
		2021		2022		2023

		(In Thousands of U.S. Dollars)
Operating activities:
Net income		95,248		239,968		274,187
Adjustments to reconcile net income to net cash provided by provided by (used in) operating activities:
Depreciation and amortization		150		—		—
Accretion of convertible notes		1,461		1,302		1,447
Loss (gain) on change in fair value of derivatives		(4,043)		844		1,535
Equity in earnings of subsidiaries		(101,385)		(246,382)		(319,325)
Share-based compensation		8,808		9,370		28,410
Deferred taxes		805		3,319		5,180
Changes in operating assets and liabilities:
Amounts due from subsidiaries		(206,892)		10,990		245,001
Prepaid expenses and other current assets		17,353		(7,900)		(1,594)
Other non-current assets		(4,907)		10		—
Amounts due to subsidiaries		(42,224)		38,610		(232,650)
Other current liabilities		(27,293)		(1,154)		4,377
Liability for uncertain tax positions		(5,915)		(1,702)		(28)
Net settlement of derivatives		4,633		439		(859)
Net cash provided by (used in) operating activities		(264,201)		47,714		5,681
Investing activities:
Investments in subsidiaries		(138,456)		(65,421)		(22,164)
Investments in affiliates		(5,273)		(990)		—
Loans to subsidiaries		(201,192)		(122,050)		(62,226)
Repayment of loans to subsidiaries		253,816		172,573		69,150
Net cash used in investing activities		(91,105)		(15,888)		(15,240)
Financing activities:
Proceeds from (repayment of) short-term borrowings		(80,000)		—		—
Repayment of loan from subsidiary		—		(49,554)		—
Loan from a subsidiary		280,000		—		—
Net proceeds from issuance of common shares		148,510		—		—
Net cash provided by (used in) financing activities		348,510		(49,554)		—
Effect of exchange rate changes		(797)		5,957		(5,460)
Net decrease in cash, cash equivalents and restricted cash		(7,593)		(11,771)		(15,019)
Cash, cash equivalents and restricted cash at the beginning of the year		35,025		27,432		15,661
Cash, cash equivalents and restricted cash at the end of the year		27,432		15,661		642
Supplemental disclosure of cash flow information:
Interest paid (net of amounts capitalized)		20,272		30,521		11,586