SunPower Reports Third Quarter 2012 Results

                 SunPower Reports Third Quarter 2012 Results

Q3 2012 GAAP Revenue of $649 Million, Non-GAAP Revenue of $607 Million

PR Newswire

SAN JOSE, Calif., Nov. 1, 2012

SAN JOSE, Calif., Nov. 1, 2012 /PRNewswire/ --SunPower Corp. (NASDAQ: SPWR)
today announced financial results for its 2012 third quarter ended September
30, 2012.

                                        3^rd Quarter 2^nd Quarter 3^rd Quarter
($ Millions except per-share data)
                                        2012         2012         2011
GAAP revenue                            $649.0 ^ (1) $595.9 ^ (1) $705.4
GAAP gross margin                       12.4%        12.3%        10.8%
GAAP net loss                           ($48.5)^(2)  ($84.2)^(2)  ($370.8)^(2)
GAAP net loss per diluted share         ($0.41)^(2)  ($0.71)^(2)  ($3.77)^(2)
Non-GAAP gross margin^(3)               14.1%        15.1%        11.4%
Non-GAAP net income (loss) per diluted  $0.03        $0.08        $0.16
share^(3)
Megawatts (MW)produced                 227          257          272

(1) GAAP revenue includes $42.3 million and excludes $54.8 million for the
third quarter of fiscal 2012 and the second quarter of fiscal 2012,
respectively, in revenue related to the construction of utility power plant
projects and construction activities. See details in the non-GAAP measure
disclosure included in this press release.

(2) GAAP results include approximately $47.5 million and $90.6 million for the
third quarter of fiscal 2012 and the second quarter of fiscal 2012,
respectively, in net, pre-tax charges and adjustments excluded from non-GAAP
results. Q3 2011 GAAP results include pre-tax charges and adjustments, net of
approximately $380.1 million excluded from non-GAAP results.

(3) A reconciliation of GAAP to non-GAAP results is included at the end of
this press release.

"The successful execution of our long-term business strategy and diversified
end market approach enabled us to achieve profitability on a non-GAAP basis
for the quarter despite difficult industry conditions," said Tom Werner,
SunPower president and CEO. "Regionally, our performance in North America
remained strong as we continued to meet our project schedules on California
Valley Solar Ranch (CVSR) and Antelope Valley Solar Project while further
expanding our residential leasing footprint due to our high efficiency rooftop
value proposition. Europe remains a very challenging market and we are
implementing a number of initiatives to prudently manage our expenses and
improve our long-term profitability in that region. In Asia, our focus
remains on continuing to grow our market share in Japan through our successful
partnership with Toshiba and we are exploring opportunities in a number of
emerging markets. 

"We also executed well on our cost reduction roadmap during the quarter,"
continued Werner. "Our goal of reducing our panel cost by at least 25 percent
year over year is on plan and we are taking steps to accelerate our 2013
roadmap as well. Combined with our success in reducing balance of systems
costs through our SunPower® Oasis® Power Plant product, we are now offering
customers total system costs that are competitive with traditional generation
on levelized cost of energy basis in many markets. Additionally, as we
previously announced, we have made the strategic decision to further
restructure our manufacturing operations in the Philippines to effectively
compete in an industry with significant overcapacity. This action will enable
us to meaningfully reduce inventory, lower operational costs and improve
efficiency.

"With our diversified go-to-market strategy, industry leading technology,
accelerated cost reduction roadmap as well as a strong financial position and
the continued support of Total, we remain confident that our long-term
strategy positions us well for future success," Werner concluded.

Key milestones achieved by the company since the second quarter of 2012
include:

  oCompleted first project milestone for 25-MW CVSR project– 22-MW grid
    connected
  oPPA executed with PG&E for 100-MW Henrietta Solar Project for 2016
    delivery
  oAwarded 12 projects totaling 33 MW in recent French tender process
  oExtended current supplier agreement with Toshiba for the Japanese market
  oAcquired 42 percent stake in Australian Gen-tailerDiamond Energy
  oClosed agreement with Citi and Credit Suisse for $325 million in lease
    financing capacity
  oExpanded residential lease program - ~ 13,000 customers in first year of
    lease offering
  oCompleted rollout of 15 percent cell manufacturing step reduction
    initiative in Fab 2

"The third quarter reflected strength in a number of key areas as we exceeded
our margin targets, delivered positive earnings and increased our available
cash while successfully reducing inventory by more than$40 million," said
Chuck Boynton, SunPower CFO. "Looking forward, our focus remains on managing
our cash flow and balance sheet, reducing inventory and rationalizing our
operating expenses. We will continue to manage to today's demand driven
environment and position the company for long-term profitable growth."

Third quarter fiscal 2012 GAAP results include pre-tax charges, expenses and
adjustments totaling approximately $47.5 million, including a $5.8 million
gross margin adjustment related to the timing of revenue recognition from
utility power plant projects and construction activities, $59.6 million of
goodwill and other intangible asset impairment, $50.6 million gain on share
lending arrangement, $8.2 million in restructuring charges related to the
company's consolidation of its Philippines manufacturing operations, $25.9
million in stock-based compensation, non-cash interest expense and
amortization of intangible expenses, $6.4 million related to charges on
manufacturing step reduction program, $2.1 million of restructuring charges
related to December 2011 Restructuring Plan and $1.5 million related to
acquisition and integration costs. These adjustments and charges are excluded
from the company's non-GAAP results. Additionally, third-quarter GAAP results
include an adjustment of approximately $42.3 million in revenue related to
GAAP real estate accounting requirements.

Fourth Quarter2012 Financial Outlook

The company's fourth quarter 2012 consolidated non-GAAP guidance is as
follows: revenue of $700 million to $900 million, gross margin of 14 percent
to 16 percent, earnings per diluted share of $0.00 to $0.25, capital
expenditures of $30 million to $40 million and MW recognized in the range of
200 MW to 250 MW. On a GAAP basis, the company expects revenue of $650
million to $850 million, gross margin oftwo percent tofour percent and loss
per diluted share of $0.75 to $1.00.

This press release contains both GAAP and non-GAAP financial information.
Non-GAAP historical figures are reconciled to the closest GAAP equivalent
categories in the financial attachment of this press release. Please note
that the company has posted supplemental information and slides related to its
third quarter 2012 performance on the Events and Presentations section of the
SunPower Investor Relations page at
http://investors.sunpowercorp.com/events.cfm. The capacity of power plants in
this release is described in approximate megawatts on an alternating current
(ac) basis unless otherwise noted.

About SunPower

SunPower Corp. (NASDAQ: SPWR) designs, manufactures and delivers the highest
efficiency, highest reliability solar panels and systems available today.
Residential, business, government and utility customers rely on the company's
quarter century of experience and guaranteed performance to provide maximum
return on investment throughout the life of the solar system. Headquartered in
San Jose, Calif., SunPower has offices in North America, Europe, Australia,
Africa and Asia. For more information, visit www.SunPowercorp.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are statements that do not represent historical facts and may be
based on underlying assumptions. The company uses words and phrases such as
"improve," "grow," "goal," "roadmap," "looking forward," "growth," "will,"
"continue," "position," and similar expressions to identify forward-looking
statements in this press release, including forward-looking statements
regarding: (a) improving our long-term profitability in Europe; (b) growing
our market share in Japan; (c) reducing our panel cost; (d) accelerating our
2013 roadmap; (e) reducing inventory, lowering operational costs, and
improving efficiency; (f) managing cash flow and balance sheet, and
rationalizing expenses; (g) positioning the company for profitable growth; and
(h) forecasted GAAP and non-GAAP Q4 2012 revenues, GAAP and non-GAAP gross
margins, GAAP and non-GAAP earnings/loss per diluted share, capital
expenditures and MW recognized. Such forward-looking statements are based on
information available to the company as of the date of this release and
involve a number of risks and uncertainties, some beyond the company's
control, that could cause actual results to differ materially from those
anticipated by these forward-looking statements, including risks and
uncertainties such as: (i) increasing supply and competition in the industry
and lower average selling prices, impact on gross margins, and any revaluation
of inventory as a result of decreasing ASP or reduced demand; (ii) the impact
of regulatory changes and the continuation of governmental and related
economic incentives promoting the use of solar power, and the impact of such
changes on our revenues, financial results, and any potential impairments or
write off to our intangible assets, project assets, long-lived assets and
goodwill; (iii) the company's ability to meet its cost reduction plans and
reduce its operating expenses; (iv) the company's ability to obtain and
maintain an adequate supply of raw materials, components, and solar panels, as
well as the price it pays for such items and third parties' willingness to
renegotiate or cancel above market contracts; (v) general business and
economic conditions, including seasonality of the solar industry and growth
trends in the solar industry; (vi) the company's ability to revise its
portfolio allocation geographically and across downstream channels to respond
to regulatory changes; (vii) construction difficulties or potential delays,
including obtaining land use rights, permits, license, other governmental
approvals, and transmission access and upgrades, and any litigation relating
thereto; (viii) timeline for revenue recognition and impact on the company's
operating results; (ix) the significant investment required to construct power
plants and the company's ability to sell or otherwise monetize power plants,
including the company's success in completing the design, construction and
maintenance of CVSR and Antelope Valley Solar Ranch; (x) fluctuations in the
company's operating results and its unpredictability; (xi) the availability of
financing arrangements for the company's projects and the company's customers;
(xii) potential difficulties associated with operating the joint venture with
AUO and the company's ability to achieve the anticipated synergies from the
Tenesol acquisition; (xiii) success in achieving cost reduction, and the
company's ability to remain competitive in its product offering, obtain
premium pricing while continuing to reduce costs and achieve lower targeted
cost per watt; (xiv) the company's liquidity, substantial indebtedness, and
its ability to obtain additional financing; (xv) manufacturing difficulties
that could arise;(xvi) the company's ability to achieve the expected benefits
from its relationship with Total; (xvii) the success of the company's ongoing
research and development efforts and the acceptance of the company's new
products and services; (xviii) the company's ability to protect its
intellectual property; (xix) the company's exposure to foreign exchange,
credit and interest rate risk; (xx) possible impairment or write off of
long-lived assets and project assets; (xxi) the success of our residential
lease program; (xxii) the accuracy of assumptions and compliance with treasury
grant guidance and timing and amount of cash grant; (xxiii) possible
consolidation of the joint venture AUO SunPower; and (xxiv) other risks
described in the company's Annual Report on Form 10-K for the year ended
January 1, 2012, Quarterly Reports on Form 10-Q for the quarters ended April
1, 2012 and July 1, 2012, and other filings with the Securities and Exchange
Commission. These forward-looking statements should not be relied upon as
representing the company's views as of any subsequent date, and the company is
under no obligation to, and expressly disclaims any responsibility to, update
or alter its forward-looking statements, whether as a result of new
information, future events or otherwise.



SUNPOWER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
                                 Sep. 30,               Jan. 1,
                                 2012                   2012
                                                        (1)
ASSETS
Cash and cash equivalents        $   377,126          $   725,618
Restricted cash and cash         25,214                 79,555
equivalents
Investments                      10,764                 9,145
Accounts receivable, net         297,696                438,633
Costs and estimated earnings in  65,562                 54,854
excess of billings
Inventories                      407,210                445,501
Advances to suppliers            357,514                327,521
Prepaid expenses and other       829,492                679,700
assets
Property, plant and equipment,   659,234                628,769
net
Project assets - plants and land 161,491                58,857
Goodwill and other intangible    1,759                  70,977
assets, net
Total assets                     $ 3,193,062           $ 3,519,130
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable                 $   417,896          $   441,655
Accrued and other liabilities    417,756                415,530
Billings in excess of costs and  139,625                170,828
estimated earnings
Bank loans and other debt        393,027                366,395
Convertible debt                 434,415                619,978
Customer advances                270,067                230,019
Total liabilities                2,072,786              2,244,405
Stockholders' equity            1,120,276              1,274,725
Total liabilities and            $ 3,193,062           $ 3,519,130
stockholders' equity
(1) As adjusted to reflect the balances of Tenesol S.A. as of January 1, 2012,
as required under the accounting guidelines for a transfer of an entity under
common control.





SUNPOWER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
                     THREE MONTHS ENDED                 NINE MONTHS ENDED
                     Sep. 30,   Jul. 1,    Oct. 2,      Sep. 30,    Oct. 2,
                     2012       2012       2011         2012        2011
Revenue:
AMERICAS             $502,373   $392,282   $368,643     $1,176,148  $942,887
EMEA                 88,547     155,417    293,066      400,074     675,702
APAC                 58,028     48,198     43,718       162,754     130,511
Total revenue        648,948    595,897    705,427      1,738,976   1,749,100
Cost of revenue:
AMERICAS             409,432    326,511    326,372      978,062     839,465
EMEA                 111,622    154,455    265,515      422,922     620,618
APAC                 47,121     41,431     37,416       138,471     105,077
Total cost of        568,175    522,397    629,303      1,539,455   1,565,160
revenue
Gross margin         80,773     73,500     76,124       199,521     183,940
Operating expenses:
Research and         14,956     14,104     12,664       45,786      41,565
development
Selling, general     69,714     62,480     76,329       208,388     243,364
and administrative
Restructuring        10,544     47,599     637          61,189      13,945
charges
Goodwill and other
intangible asset     59,581     -          349,758      59,581      349,758
impairment
Total operating      154,795    124,183    439,388      374,944     648,632
expenses
Operating loss       (74,022)   (50,683)   (363,264)    (175,423)   (464,692)
Other income
(expense):
Gain on sale of
equity interest in   -          -          10,989       -           10,989
unconsolidated
investee
Gain on share        50,645     -          -            50,645      -
lending arrangement
Interest and other
income (expense),    (25,146)   (23,980)   (8,403)      (68,157)    (57,043)
net
Other income         25,499     (23,980)   2,586        (17,512)    (46,054)
(expense), net
Loss before income
taxes and equity in
earnings of          (48,523)   (74,663)   (360,678)    (192,935)   (510,746)
unconsolidated
investees
Provision for        (593)      (10,593)   (11,077)     (12,542)    (17,963)
income taxes
Equity in earnings
(loss) of            578        1,075      971          (1,772)     7,932
unconsolidated
investees
Net loss             $        $        $           $          $ 
                     (48,538)  (84,181)  (370,784)   (207,249)  (520,777)
Net loss per share
of common stock:
Net loss per share   $      $      $        $       $    
– basic              (0.41)    (0.71)    (3.77)      (1.78)     (5.34)
Net loss per share   $      $      $        $       $    
– diluted           (0.41)    (0.71)    (3.77)      (1.78)     (5.34)
Weighted-average
shares:
- Basic              118,952    118,486    98,259       116,408     97,456
- Diluted            118,952    118,486    98,259       116,408     97,456







SUNPOWER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, except per share data)
(Unaudited)
                    THREE MONTHS ENDED                  NINE MONTHS ENDED
                    Sep. 30,   Jul. 1,    Oct. 2,       Sep. 30,    Oct. 2,
                    2012       2012       2011          2012        2011
Net loss            $        $        $            $          $ 
                    (48,538)  (84,181)  (370,784)    (207,249)  (520,777)
Components of
comprehensive
loss:
Translation         148        (7,948)    5,211         (1,802)     4,067
adjustment
Net unrealized
gain (loss) on      (2,611)    (2,377)    38,987        (10,738)    (2,008)
derivatives
Income taxes        490        446        (4,483)       2,016       3,251
Net change in
accumulated other   (1,973)    (9,879)    39,715        (10,524)    5,310
comprehensive
income (loss)
Total               $        $        $            $          $ 
comprehensive loss  (50,511)  (94,060)  (331,069)    (217,773)  (515,467)







SUNPOWER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                    THREE MONTHS ENDED                 NINE MONTHS ENDED
                    Sep. 30,   Jul. 1,    Oct. 2,      Sep. 30,    Oct. 2,
                    2012       2012       2011         2012        2011
Cash flows from
operating
activities:
Net loss            $         $         $           $           (520,777)
                    (48,538)  (84,181)  (370,784)   (207,249)
Adjustments to
reconcile net loss
to net cash
provided by (used
in) operating
activities:
Stock-based         9,271      11,367     11,849       33,179      37,829
compensation
Depreciation        24,385     29,291     30,315       82,747      83,979
Loss on retirement
of property, plant  10,990     45,409     -            56,399      -
and equipment
Amortization of
other intangible    2,622      2,695      6,682        8,099       20,614
assets
Goodwill            46,734     -          309,457      46,734      309,457
impairment
Other intangible    12,847     -          40,301       12,847      40,301
asset impairment
Loss on sale of     -          -          -            -           191
investments
Loss (gain) on
mark-to-market      -          9          (472)        (4)         (331)
derivatives
Non-cash interest   13,990     8,247      6,780        29,336      21,112
expense
Amortization of
debt issuance       1,019      861        1,462        2,899       4,196
costs
Amortization of     -          -          134          -           3,486
promissory notes
Gain on sale of
equity interest in  -          -          (10,989)     -           (10,989)
unconsolidated
investee
Gain on change in
equity interest in  -          -          -            -           (322)
unconsolidated
investee
Third-party
inventories         -          (176)      -            8,869       16,399
write-down
Project assets
write-down related
to change in        -          -          -            -           16,053
European
government
incentives
Gain on share
lending             (50,645)   -          -            (50,645)    -
arrangement
Equity in
(earnings) loss of  (578)      (1,075)    (971)        1,772       (7,932)
unconsolidated
investees
Deferred income
taxes and other     (2,553)    4,969      1,224        110         (860)
tax liabilities
Changes in
operating assets
and liabilities:
Accounts            (32,108)   69,301     (51,696)     124,865     (48,587)
receivable
Costs and
estimated earnings  3,027      (16,520)   43,810       (10,709)    (3,304)
in excess of
billings
Inventories         43,082     61,086     (17,756)     29,992      (120,753)
Project assets      (62,671)   (219)      40,600       (101,917)   (43,242)
Prepaid expenses    (43,212)   (81,692)   (113,716)    (221,069)   (123,044)
and other assets
Advances to         (11,673)   (2,596)    7,935        (29,993)    (9,535)
suppliers
Accounts payable
and other accrued   22,366     (69,952)   64,448       (38,063)    64,432
liabilities
Billings in excess
of costs and        (6,036)    (24,502)   16,825       (31,203)    14,345
estimated earnings
Customer advances   35,953     3,079      6,114        40,048      (1,698)
Net cash provided
by (used in)        (31,728)   (44,599)   21,552       (212,956)   (258,980)
operating
activities
Cash flows from
investing
activities:
Decrease
(increase) in
restricted cash     2,720      7,677      (904)        54,341      29,789
and cash
equivalents
Purchases of
property, plant     (16,389)   (29,862)   (17,364)     (79,033)    (85,528)
and equipment
Proceeds from sale
of equipment to     -          3          2            419         501
third-party
Purchases of
marketable          (1,436)    -          (8,962)      (1,436)     (8,962)
securities
Proceeds from
sales or
maturities of       -          -          -            -           43,759
available-for-sale
securities
Cash received for
sale of investment  -          -          24,043       17,403      24,043
in unconsolidated
investee
Cash paid for
investments in      -          (10,000)   (30,000)     (10,000)    (80,000)
unconsolidated
investees
Net cash used in
investing           (15,105)   (32,182)   (33,185)     (18,306)    (76,398)
activities
Cash flows from
financing
activities:
Proceeds from
issuance of bank    -          125,000    300,000      125,000     489,221
loans, net of
issuance costs
Proceeds from
issuance of         13,830     13,787     -            27,617      -
project loans, net
of issuance costs
Proceeds from
residential lease   18,562     8,247      -            26,809      -
financing
Proceeds from
recovery of claim
in connection with  50,645     -          -            50,645      -
share lending
arrangement
Repayment of bank
loans and other     (25,295)   (540)      (150,988)    (126,427)   (377,124)
debt
Cash paid for
repurchased         -          -          -            (198,608)   -
convertible debt
Proceeds from
private offering
of common stock,    (65)       -          -            163,616     -
net of issuance
costs
Cash distributions
to Parent in
connection with     -          -          -            (178,290)   -
the transfer of
entities under
common control
Proceeds from
warrant             -          -          2,261        -           2,261
transactions
Proceeds from
exercise of stock   17         26         87           51          4,013
options
Purchases of stock
for tax
withholding         (226)      (1,319)    (1,154)      (5,430)     (10,550)
obligations on
vested restricted
stock
Net cash provided
by (used in)        57,468     145,201    150,206      (115,017)   107,821
financing
activities
Effect of exchange
rate changes on     241        (4,307)    (9,801)      (2,213)     (3,301)
cash and cash
equivalents
Net increase
(decrease) in cash  10,876     64,113     128,772      (348,492)   (230,858)
and cash
equivalents
Cash and cash
equivalents at      366,250    302,137    245,790      725,618     605,420
beginning of
period
Cash and cash       $         $         $          $          $   
equivalents, end    377,126    366,250    374,562      377,126     374,562
of period
Non-cash
transactions:
Assignment of
financing
receivables to a    $7,736     $2,523     $0           $10,259     $0
third party
financial
institution
Property, plant
and equipment
acquisitions        13,243     12,124     11,781       13,243      11,781
funded by
liabilities
Non-cash interest
expense
capitalized and     411        386        802          1,161       2,096
added to the cost
of qualified
assets
Issuance of
warrants in
connection with     -          -          -            50,327      -
the Liquidity
Support Agreement







(In
thousands,
except per
share data)
            THREE MONTHS ENDED               NINE MONTHS ENDED        THREE MONTHS ENDED      NINE MONTHS
                                                                                              ENDED
            Sep. 30,   Jul. 1,    Oct. 2,    Sep. 30,    Oct. 2,      Sep.    Jul.    Oct.    Sep.     Oct. 2,
                                                                      30,     1,      2,      30,
            2012       2012       2011       2012        2011         2012    2012    2011    2012     2011
            (Presented on a GAAP Basis)                             (Presented on a non-GAAP Basis)
Gross       $        $       $       $         $          $     $     $     $      $  
margin      80,773     73,500    76,124    199,521    183,940                          257,034  245,917
                                                                      85,464  98,041  80,292
Operating   $         $        $        $          $           $     $     $     $     $   
income      (74,022)  (50,683)  (363,264)  (175,423)  (464,692)                       36,653   23,800
(loss)                                                                10,662  32,093  6,642
Net income (loss) per
share of common
stock:
            $       $      $      $       $        $     $     $     $     $   
- Basic     (0.41)    (0.71)    (3.77)    (1.78)     (5.34)                             
                                                                      0.03    0.08    0.16    0.00     0.12
            $       $      $      $       $        $     $     $     $     $   
- Diluted   (0.41)    (0.71)    (3.77)    (1.78)     (5.34)                             
                                                                      0.03    0.08    0.16    0.00     0.12

About SunPower's Non-GAAP Financial Measures

To supplement its consolidated financial results presented in accordance with
GAAP, SunPower uses non-GAAP measures which are adjusted from the most
directly comparable GAAP results for certain items, as described below.In
addition, the presentation of non-GAAP gross margin and non-GAAP operating
income includes the results of discontinued operations. Management does not
consider these items in evaluating the core operational activities of
SunPower.The specific non-GAAP measureslisted below are gross margin,
operating income (loss) and net income (loss) per share. Management believes
that each of these non-GAAP measures (gross margin, operating income (loss)
and net income (loss) per share) are useful to investors by enabling them to
better assess changes in each of these key elements of SunPower's results of
operations across different reporting periods on a consistent basis,
independent of these items. Thus, each of these non-GAAP financial measures
provides investors withanother method for assessing SunPower's operating
results in a manner that is focused on its ongoing core operating performance,
absent the effects of these items. Management also uses these non-GAAP
measures internally to assess the business and financial performance of
current and historical results, for strategic decision making, forecasting
future results and evaluating the company's current performance.Many of the
analysts covering SunPower also use these non-GAAP measures in their analyses.
Given management's use of these non-GAAP measures, SunPower believes these
measures are important to investors in understanding SunPower's current and
future operating results as seen through the eyes of management.These
non-GAAP measures are not in accordance with or an alternative for GAAP
financial data, the non-GAAP measures should be reviewed together with the
GAAP measuresand are not intended to serve as a substitute for results under
GAAP, and may be different from non-GAAP measures used by other companies.

  oNon-GAAP gross margin. The use of this non-GAAP financial measure allows
    management to evaluate the gross margin of SunPower's core businesses and
    trends across different reporting periods on a consistent basis,
    independent of charges including amortization of intangible assets,
    stock-based compensation, charges on manufacturing step reduction program,
    certain losses due to change in European government incentives,
    acquisition and integration costs, and interest expense. In addition, the
    presentation of non-GAAP gross margin includes the revenue recognition of
    utility and power plant projects on a non-GAAP basis. This non-GAAP
    financial measure is an important component of management's internal
    performance measurement process as it is used to assess the currentand
    historical financial results of the business, for strategic decision
    making, preparing budgetsand forecasting future results. Management
    presents this non-GAAP financial measure to enable investors and analysts
    to evaluate SunPower's revenue generation performance relative to the
    direct costs of revenue of its core businesses. 
  oNon-GAAP operating income (loss). The use of this non-GAAP financial
    measure allows management to evaluate the operating results of SunPower's
    core businesses and trends across different reporting periods on a
    consistent basis, independent of charges including goodwill and other
    intangible asset impairment , amortization of intangible assets and
    promissory notes, stock-based compensation, charges on manufacturing step
    reduction program, restructuring charges, acquisition and integration
    costs, certain losses due to change in European government incentives, and
    interest expense. In addition, the presentation of non-GAAP operating
    income (loss) includes the revenue recognition of utility and power plant
    projects on a non-GAAP basis. Non-GAAP operating income (loss) is an
    important component of management's internal performance measurement
    process as it is used to assess the current and historical financial
    results of the business, for strategic decision making, preparing budgets
    and forecasting future results. Management presents this non-GAAP
    financial measure to enable investors and analysts to understand the
    results of operations of SunPower's core businesses and to compare results
    of operations on a more consistent basis against that of other companies
    in the industry. 
  oNon-GAAP net income (loss) per share. Management presents this non-GAAP
    financial measure to enable investors and analysts to assess SunPower's
    operating results and trends across different reporting periods on a
    consistent basis, independent of items including goodwill and other
    intangible asset impairment , amortization of intangible assets and
    promissory notes, stock-based compensation, charges on manufacturing step
    reduction program, restructuring charges, acquisition and integration
    costs, certain losses due to change in European government incentives,
    interest expense, net gains (losses) on mark-to-market derivative
    instruments, share lending arrangement , sale of or change in our equity
    interest in unconsolidated investee, and the tax effects of these non-GAAP
    adjustments. In addition, the presentation of non-GAAP net income (loss)
    includes the revenue recognition of utility and power plant projects on a
    non-GAAP basis. Management presents this non-GAAP financial measure to
    enable investors and analysts to compare SunPower's operating results on a
    more consistent basis against that of other companies in the industry.

Included items

  oRevenue and cost of revenue. The Company includes adjustments to Non-GAAP
    revenue and Non-GAAP cost of revenue related to the utility and power
    plant projects based on the separately identifiable components of the
    transactions in order to reflect the substance of the transactions. Such
    treatment is consistent with accounting rules under International
    Financial Reporting Standards (IFRS). On a GAAP basis, such revenue and
    costs of revenue are accounted for under U.S GAAP real estate accounting
    guidance. Management presents this non-GAAP financial measure to enable
    investors and analysts to evaluate SunPower's revenue generation
    performance relative to the direct costs of revenue of its core
    businesses. 

Excluded Items

  oGoodwill and other intangible asset impairment. In the third quarters of
    2012 and 2011, the Company recorded goodwill and other intangible asset
    impairment of $59.6 million and $349.8 million, respectively, attributable
    to the change in public market valuation of the solar sector. SunPower
    excludes these items because these expenses are not reflective of ongoing
    operating results in the period incurred. These amounts arise from prior
    acquisitions and have no direct correlation to the operation of SunPower's
    core businesses. 
  oAmortization of intangible assets. SunPower incurs amortization of
    intangible assets as a result of acquisitions, which includes in-process
    research and development, patents, project assets, purchased technology
    and trade names. SunPower excludes these items because these expenses are
    not reflective of ongoing operating results in the period incurred. These
    amounts arise from prior acquisitions and have no direct correlation to
    the operation of SunPower's core businesses. 
  oStock-based compensation. Stock-based compensation relates primarily to
    SunPower stock awards such as stock options and restricted stock.
    Stock-based compensation is a non-cash expense that varies in amount from
    period to period and is dependent on market forces that are difficult to
    predict. As a result of this unpredictability, management excludes this
    item from its internal operating forecasts and models. Management believes
    that non-GAAP measures adjusted for stock-based compensation provide
    investors with a basis to measure the company's core performance against
    the performance of other companies without the variability created by
    stock-based compensation. 
  oRestructuring charges. In the fourth quarter of fiscal 2011, the Company
    approved a company-wide restructuring program (the December 2011
    Restructuring Plan) in order to accelerate operating cost reduction and
    improve overall operating efficiency. In April 2012, as a result of
    continued cost reduction strategy, the Company approved a restructuring
    plan (the April 2012 Restructuring Plan) to consolidate its Philippine
    manufacturing operations into Fab 2 and begin repurposing Fab 1 in the
    second quarter of fiscal 2012. Restructuring charges are excluded from
    non-GAAP financial measures because they are not considered core operating
    activities and such costs have historically occurred infrequently.
    Although SunPower has engaged in restructuring activities in the past,
    each has been a discrete event based on a unique set of business
    objectives. As such, management believes that it is appropriate to exclude
    restructuring charges from SunPower's non-GAAP financial measures as they
    are not reflective of ongoing operating results or contribute to a
    meaningful evaluation of a company's past operating performance. 
  oCharges on manufacturing step reduction program. As part of its cost
    reduction roadmap, SunPower implemented a manufacturing step reduction
    program, which required the acceleration of depreciation on certain
    previously owned manufacturing equipment. The charges as a result of the
    acceleration of depreciation are excluded as they are non-cash in nature
    and not reflective of ongoing operating results. Excluding this data
    provides investors with a basis to compare the company's performance
    against the performance of other companies without such charges. 
  oAcquisition and integration costs. SunPower excludes expenses such as
    legal, banking and other professional services incurred in connection with
    Total Gas& Power USA, SAS's investment in SunPower as well as integration
    costs related to Tenesol acquisition. SunPower excludes such charges
    because these expenses are not reflective of ongoing operating results in
    the period incurred. These amounts arise fromthe investment made by Total
    and the acquisition of Tenesol and have no direct correlation to the
    operation of SunPower's core businesses. 
  oAmortization of promissory notes. Included in the total consideration for
    a prior acquisition completed on March 26, 2010 is $14 million in
    promissory notes to the acquiree's management shareholders issued by
    SunPower. Since the vesting and payment of the promissory notes are
    contingent on future employment, the promissory notes are considered
    deferred compensation and therefore are not included in the purchase price
    allocated to the net assets acquired. SunPower excludes this non-cash
    charge over the service period required under the terms of the promissory
    notes because these expenses are not reflective of ongoing operating
    results in the period incurred. These amounts arise from prior
    acquisitions and have no direct correlation to the operation of SunPower's
    core businesses. 
  oLoss on change in European government incentives. On May 5, 2011, the
    Italian government announced a legislative decree which defined the
    revised feed-in-tariff ("FIT") and the transition process effective June
    1, 2011. The decree announced a decline in FIT and also set forth a limit
    on the construction of solar plants on agricultural land. Similarly, other
    European countries reduced government incentives for the solar market.
    Such changes had a materially negative effect on the market for solar
    systems in Europe and affected SunPower's financial results as follows: 

       oRestructuring. In response to reductions in European government
         incentives, which have had a significant impact on the global solar
         market, on June13,2011, SunPower's Board of Directors approved a
         restructuring plan to realign its resources. As a result, SunPower
         recorded restructuring charges during fiscal 2011. Restructuring
         charges are excluded from non-GAAP financial measures because they
         are not considered core operating activities and such costs have
         historically occurred infrequently. Although SunPower has engaged in
         restructuring activities in the past, each has been a discrete event
         based on a unique set of business objectives. As such, management
         believes that it is appropriate to exclude restructuring charges from
         SunPower's non-GAAP financial measures as they are not reflective of
         ongoing operating results or contribute to a meaningful evaluation of
         a company's past operating performance. 
       oWrite-down of project assets. Project assets consist primarily of
         capitalized costs relating to solar power system projects in various
         stages of development that we incur prior to the sale of the solar
         power system to a third party. These costs include costs for land and
         costs for developing and constructing a solar power system. The fair
         market value of these project assets declined due to SunPower's
         inability to develop, commercialize and sell active projects within
         Europe. Such charges are excluded from non-GAAP financial measures as
         they are related to a discrete event and are not reflective of
         ongoing operating results. 
       oThird-party inventory charges. Charges relate to the write-down of
         third-party inventory and costs associated with the termination of
         above-market third-party solar cell supply contracts as the decline
         in European government incentives, primarily in Italy, has driven
         down demand and average selling price in certain areas of Europe.
         Such charges are excluded from non-GAAP financial measures as they
         are related to a discrete event and are not reflective of ongoing
         operating results. 
       oLoss on foreign currency derivatives. SunPower has an active hedging
         program designed to reduce its exposure to movements in foreign
         currency exchange rates. As a part of this program, SunPower
         designates certain derivative transactions as effective cash flow
         hedges of anticipated foreign currency revenues and records the
         effective portion of changes in the fair value of such transactions
         in accumulated other comprehensive income (loss) until the
         anticipated revenues have occurred, at which point the associated
         income or loss would be recognized in revenue. In the first quarter
         of fiscal 2011, in connection with the decline in forecasted revenue
         surrounding the change in the Italian FIT, SunPower reclassified an
         amount held in accumulated other comprehensive income (loss) to other
         income (expense), net for certain previously anticipated transactions
         which did not occur or were now probable not to occur. SunPower
         excludes this item as it is not reflective of ongoing operating
         results and excluding this data provides investors with a basis to
         compare the company's performance against the performance of other
         companies without such transactions. 

  oNon-cash interest expense. SunPower separately accounted for the liability
    and equity components of its convertible debt issued in 2007 in a manner
    that reflected interest expense equal to its non-convertible debt
    borrowing rate. In addition, SunPower measured the two share lending
    arrangements entered into in connection with its convertible debt issued
    in 2007 at fair value and amortized the imputed share lending costs in
    current and prior periods. As a result, SunPower incurs interest expense
    that is substantially higher than interest payable on its 1.25% senior
    convertible debentures and 0.75% senior convertible debentures. 

In addition, SunPower separately accounted for the fair value liabilities of
the embedded cash conversion option and the over-allotment option on its 4.5%
senior cash convertible debentures issued in 2010 as an original issue
discount and a corresponding derivative conversion liability. As a result,
SunPower incurs interest expense that is substantially higher than interest
payable on its 4.5% senior cash convertible debentures. SunPower excludes
non-cash interest expense because the expense is not reflective of its ongoing
financial results in the period incurred. In addition, in connection with the
Liquidity Support Agreement with Total executed on February 28, 2012, the
Company issued warrants to Total to acquire 9,531,677 shares of its common
stock. The fair value of the warrants is recorded as debt issuance costs and
amortized over the expected life of the agreement. As a result, SunPower
incurs non-cash interest expense associated with the amortization of the
warrants. Excluding this data provides investors with a basis to compare the
company's performance against the performance of other companies without
non-cash interest expense.

  oGain (loss) on mark-to-market derivative instruments. In connection with
    the issuance of its 4.5% senior cash convertible debentures in 2010,
    SunPower entered into certain convertible debenture hedge and warrant
    transactions with respect to its class A common stock intended to reduce
    the potential cash payments that would occur upon conversion of the
    debentures. The convertible debenture hedge and warrant transactions
    consisting of call option instruments are deemed to be mark-to-market
    derivatives until such transactions settle or expire. As of December 23,
    2010, the warrant transactions were amended to be share-settled rather
    than cash-settled, therefore, the warrant transactions are not subject to
    mark-to-market accounting treatment subsequent to December 23, 2010. In
    addition, the embedded cash conversion option of the debt is deemed to be
    a mark-to-market derivative instrument during the period in which the cash
    convertible debt remains outstanding. Finally, the over-allotment option
    in favor of the debenture underwriters is deemed a mark-to-market
    derivative instrument during the period the over-allotment option remained
    unexercised, or from April 1, 2010 through April 5, 2010. SunPower
    excluded the net gain (loss) relating to the above mentioned derivative
    instruments from its non-GAAP results because it was not realized in cash
    and it is not reflective of the company's ongoing financial results.
    Excluding this data provides investors with a basis to compare the
    company's performance against the performance of other companies without a
    net non-cash gain (loss) on mark-to-market derivative instruments.
  oGain on share lending arrangement. The Company loaned 2.9 million shares
    of its class A common stock to Lehman Brothers International (Europe)
    Limited ("LBIE") in 2007. On September 15, 2008, Lehman Brothers Holding
    Inc. ("Lehman") filed bankruptcy and thus the Company recorded a $213.4
    million non-cash loss in the third quarter of 2008. In the fourth quarter
    of 2010, the Company entered into an assignment agreement with Deutsche
    Bank AG – London Branch ("Deutsche Bank") under which the Company assigned
    to Deutsche Bank its claims against LBIE in connection with the share
    lending arrangement for cash proceeds of $24.0 million. On July 3, 2012,
    pursuant to the February 2007 Share Lending Arrangement with LBIE and its
    2010 assignment of claims to Deutsche Bank after the 2008 bankruptcy
    filing of Lehman, the Company received $50.6 million of claim settlement
    in cash from Deutsche Bank for the shares loaned to LBIE, which shares
    were not returned to the Company following the bankruptcy of Lehman. The
    Company had excluded the $213.4 million non-cash loss in the third quarter
    of 2008 from its non-GAAP results of operations. The Company has also
    excluded the $24.0 million and $50.6 million of cash received from the
    sale of its claim against LBIE to Deutsche Bank in the fourth quarter of
    2010 and in the third quarter of 2012, respectively. Excluding the data
    related to the share lending arrangement provides investors with a basis
    to compare the Company's performance against the performance of other
    companies without such non-operational transactions. 
  oGain on change in equity interest in unconsolidated investee. On June 30,
    2010, Woongjin Energy Co., Ltd ("Woongjin Energy") completed its initial
    public offering and the sale of 15.9 million new shares of common stock.
    In the second quarter of 2011, Woongjin Energy issued additional equity to
    other investors. SunPower did not participate in these common stock
    issuances by Woongjin Energy. As a result of the new common stock
    issuances by Woongjin Energy, SunPower's percentage equity interest in
    Woongjin Energy decreased and SunPower recognized a non-cash gain in both
    the second quarter of 2011 and 2010, representing the excess of the price
    over SunPower's per share carrying value of its shares. SunPower excluded
    the non-cash gain from its non-GAAP results because it was not realized in
    cash and it is not reflective of its ongoing financial results. Excluding
    this data provides investors with a basis to compare SunPower's
    performance against the performance of other companies without non-cash
    income from a gain on change in its equity interest in unconsolidated
    investees. 
  oGain on sale of equity interest in unconsolidated investee. As noted in
    the "Gain on change in equity interest in unconsolidated investee" section
    above, SunPower previously excluded certain non-cash gains from its
    non-GAAP results.During the first quarter of 2012, SunPower sold its
    equity interests in Woongjin Energy. As the gain on sale was now realized
    in cash, SunPower recognized an incremental gain on sale in its non-GAAP
    results based on the cumulative amount of gains previously excluded from
    non-GAAP results and the proportional amount of equity interests sold. 
  oTax effect. This amount is used to present each of the amounts described
    above on an after-tax basis with the presentation of non-GAAP net income
    (loss) per share. Beginning in the first quarter of 2012, the Company's
    non-GAAP tax amount is based on estimated cash tax expense and reserves.
    This approach is designed to enhance the ability of investors to
    understand the Company's tax expense on its current operations, provide
    improved modeling accuracy, and substantially reduce fluctuations caused
    by GAAP to non-GAAP adjustments which may not reflect actual cash tax
    expense. The Company forecasts its annual cash tax liability and allocates
    the tax to each quarter in proportion to earnings for that period.
    Non-GAAP tax amounts for periods prior to fiscal 2012 have not been
    adjusted to reflect this new methodology. 

For more information on these non-GAAP financial measures, please see the
tables captioned "Reconciliations of GAAP Measures to Non-GAAP Measures" set
forth at the end of this release and which should be read together with the
preceding financial statements prepared in accordance with GAAP.

SUNPOWER CORPORATION
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
(Unaudited)
(In thousands, except per share data)
STATEMENT OF
OPERATIONS DATA:
                  THREE MONTHS ENDED                                 NINE MONTHS ENDED
                  Sep. 30,         Jul. 1,          Oct. 2,          Sep. 30,          Oct. 2,
                  2012             2012             2011             2012              2011
GAAP AMERICAS     $             $               $            $                 $  
revenue           502,373          392,282          368,643          1,176,148        942,887
Utility and
power plant       (42,268)         54,824           -                98,759            -
projects
Non-GAAP          $             $               $            $                 $  
AMERICAS revenue  460,105          447,106          368,643          1,274,907        942,887
GAAP EMEA         $             $               $            $               $  
revenue            88,547         155,417          293,066          400,074           675,702
Change in
European          -                -                -                (193)             -
government
incentives
Non-GAAP EMEA     $             $               $            $               $  
revenue            88,547         155,417          293,066          399,881           675,702
GAAP total        $             $               $            $                 $
revenue           648,948          595,897          705,427          1,738,976        1,749,100
Utility and
power plant       (42,268)         54,824           -                98,759            -
projects
Change in
European          -                -                -                (193)             -
government
incentives
Non-GAAP total    $             $               $            $                 $
revenue           606,680          650,721          705,427          1,837,542        1,749,100
GAAP AMERICAS     $     18.5%   $      16.8%   $     11.5%  $        16.8%  $        11.0%
gross margin       92,941         65,771            42,271         198,086           103,422
Utility and
power plant       (5,815)          14,926           -                24,869            -
projects
Amortization of
intangible        42               42               42               125               362
assets
Stock-based
compensation      1,589            2,025            1,897            4,743             4,959
expense
Acquisition and
integration       15               7                -                26                -
costs
Change in
European          -                (263)            -                4,029             17,379
government
incentives
Charges on
manufacturing     3,958            2,470            -                6,428             -
step reduction
program
Non-cash          308              205              171              731               1,017
interest expense
Non-GAAP          $             $              $            $               $  
AMERICAS gross     93,038 20.2%   85,183   19.1%    44,381  12.0%  239,037    18.7%  127,139    13.5%
margin
GAAP EMEA gross   (23,075) -26.1%  $     0.6%    $     9.4%   $        -5.7%  $       8.2%
margin                              962            27,551         (22,848)         55,084
Amortization of
intangible        751              782              21               2,341             63
assets
Stock-based
compensation      795              1,398            1,562            3,158             5,100
expense
Acquisition and
integration       5                5                -                10                -
costs
Change in
European          -                (109)            -                3,171             29,125
government
incentives
Charges on
manufacturing     1,444            1,648            -                3,092             -
step reduction
program
Non-cash          112              137              196              425               983
interest expense
Non-GAAP EMEA     $     -22.6%  $     3.1%    $     10.0%  $        -2.7%  $       13.4%
gross margin      (19,968)         4,823             29,330         (10,651)         90,355
                  -
GAAP APAC gross   $     18.8%   $     14.0%   $     14.4%  $       14.9%  $       19.5%
margin             10,907         6,767              6,302        24,283            25,434
Stock-based
compensation      368              492              251              1,125             845
expense
Acquisition and
integration       4                2                -                6                 -
costs
Change in
European          -                196              -                1,476             1,959
government
incentives
Charges on
manufacturing     1,034            534              -                1,568             -
step reduction
program
Non-cash          81               44               28               190               185
interest expense
Non-GAAP APAC     $     21.4%   $     16.7%   $     15.1%  $       17.6%  $       21.8%
gross margin       12,394         8,035              6,581        28,648            28,423
GAAP total gross  $     12.4%   $      12.3%   $     10.8%  $        11.5%  $        10.5%
margin             80,773         73,500            76,124         199,521           183,940
Utility and
power plant       (5,815)          14,926           -                24,869            -
projects
Amortization of
intangible        793              824              63               2,466             425
assets
Stock-based
compensation      2,752            3,915            3,710            9,026             10,904
expense
Acquisition and
integration       24               14               -                42                -
costs
Change in
European          -                (176)            -                8,676             48,463
government
incentives
Charges on
manufacturing     6,436            4,652            -                11,088            -
step reduction
program
Non-cash          501              386              395              1,346             2,185
interest expense
Non-GAAP total    $     14.1%   $      15.1%   $     11.4%  $        14.0%  $        14.1%
gross margin       85,464         98,041            80,292         257,034           245,917
GAAP operating    $             $               $            $               $  
expenses          154,795          124,183          439,388          374,944           648,632
Amortization of
intangible        (1,829)          (1,871)          (6,619)          (5,633)           (20,189)
assets
Stock-based
compensation      (6,519)          (7,452)          (8,139)          (24,153)          (26,925)
expense
Goodwill and
other intangible  (59,581)         -                (349,758)        (59,581)          (349,758)
asset impairment
December 2011
Restructuring     (2,098)          (3,064)          -                (8,086)           -
Plan
Acquisition and
integration       (1,495)          (1,288)          (429)            (3,931)           (13,552)
costs
Amortization of   -                -                (134)            -                 (3,486)
promissory notes
Change in
European          (224)            37               (637)            (309)             (12,581)
government
incentives
April 2012
Restructuring     (8,222)          (44,572)         -                (52,794)          -
Plan
Non-cash          (25)             (25)             (22)             (76)              (24)
interest expense
Non-GAAP          $             $              $            $               $  
operating          74,802         65,948            73,650         220,381           222,117
expenses
GAAP operating    $             $               $             $                $ 
loss              (74,022)         (50,683)         (363,264)        (175,423)        (464,692)
Utility and
power plant       (5,815)          14,926           -                24,869            -
projects
Goodwill and
other intangible  59,581           -                349,758          59,581            349,758
asset impairment
December 2011
Restructuring     2,098            3,064            -                8,086             -
Plan
Amortization of
intangible        2,622            2,695            6,682            8,099             20,614
assets
Stock-based
compensation      9,271            11,367           11,849           33,179            37,829
expense
Acquisition and
integration       1,519            1,302            429              3,973             13,552
costs
Amortization of   -                -                134              -                 3,486
promissory notes
Change in
European          224              (213)            637              8,985             61,044
government
incentives
April 2012
Restructuring     8,222            44,572           -                52,794            -
Plan
Charges on
manufacturing     6,436            4,652            -                11,088            -
step reduction
program
Non-cash          526              411              417              1,422             2,209
interest expense
Non-GAAP          $             $              $            $              $   
operating income   10,662         32,093             6,642        36,653            23,800
NET INCOME
(LOSS) PER
SHARE:
                  THREE MONTHS ENDED                                 NINE MONTHS ENDED
                  Sep. 30,         Jul. 1,          Oct. 2,          Sep. 30,          Oct. 2,
                  2012             2012             2011             2012              2011
Basic:
GAAP net loss     $             $             $            $             $    
per share                        (0.71)                          (1.78)           (5.34)
                  (0.41)                            (3.77)
Reconciling
items:
Utility and
power plant       (0.05)           0.12             -                0.22              -
projects
Goodwill and
other intangible  0.50             -                3.56             0.51              3.58
asset impairment
December 2011
Restructuring     0.02             0.02             -                0.07              -
Plan
Amortization of
intangible        0.02             0.02             0.07             0.07              0.21
assets
Stock-based
compensation      0.08             0.10             0.12             0.29              0.39
expense
Acquisition and
integration       0.01             0.01             0.00             0.03              0.14
costs
Amortization of   -                -                0.00             -                 0.04
promissory notes
Change in
European          -                -                0.01             0.08              0.67
government
incentives
April 2012
Restructuring     0.07             0.38             -                0.45              -
Plan
Charges on
manufacturing     0.06             0.04             -                0.10              -
step reduction
program
Non-cash          0.12             0.07             0.07             0.25              0.22
interest expense
Mark-to-market    -                -                (0.00)           -                 -
derivatives
Gain on sale of
equity interest
in                -                -                0.04             0.02              0.04
unconsolidated
investee
Gain on share
lending           (0.43)           -                -                (0.44)            -
arrangement
Tax effect        0.04             0.03             0.06             0.13              0.17
Non-GAAP net      $             $             $    
income per share                 0.08                         $0.00             $0.12
                  0.03                              0.16
Diluted:
GAAP net loss     $             $             $            $             $    
per share                        (0.71)                          (1.78)           (5.34)
                  (0.41)                            (3.77)
Reconciling
items:
Utility and
power plant       (0.05)           0.12             -                0.22              -
projects
Goodwill and
other intangible  0.50             -                3.56             0.51              3.58
asset impairment
December 2011
Restructuring     0.02             0.02             -                0.07              -
Plan
Amortization of
intangible        0.02             0.02             0.07             0.07              0.21
assets
Stock-based
compensation      0.08             0.10             0.12             0.29              0.39
expense
Acquisition and
integration       0.01             0.01             -                0.03              0.14
costs
Amortization of   -                -                -                -                 0.04
promissory notes
Change in
European          -                -                0.01             0.08              0.67
government
incentives
April 2012
Restructuring     0.07             0.38             -                0.45              -
Plan
Charges on
manufacturing     0.06             0.04             -                0.10              -
step reduction
program
Non-cash          0.12             0.07             0.07             0.25              0.22
interest expense
Mark-to-market    -                -                -                -                 -
derivatives
Gain on sale of
equity interest
in                -                -                0.04             0.02              0.04
unconsolidated
investee
Gain on share
lending           (0.43)           -                -                (0.44)            -
arrangement
Tax effect        0.04             0.03             0.06             0.13              0.17
Non-GAAP net      $             $             $    
income per share                 0.08                         $0.00             $0.12
                  0.03                              0.16
Weighted-average
shares:
GAAP net loss
per share:
- Basic           118,952          118,486          98,259           116,408           97,456
- Diluted         118,952          118,486          98,259           116,408           97,456
Non-GAAP net
income per
share:
- Basic           118,952          118,486          98,261           116,408           97,483
- Diluted         119,176          118,915          99,615           116,408           99,346

Q4 2012 GUIDANCE (in
thousands except per share    Q4 2012                Fiscal 2012
data)
Revenue (GAAP)                $650,000-$850,000      $2,400,000-$2,600,000
Revenue (non-GAAP)            $700,000-$900,000 (a)  $2,600,000-$2,800,000 (a)
Gross margin (GAAP)           2%-4%                  N/A
Gross margin (non-GAAP)       14%-16% (b)            N/A
Net loss per diluted share    ($1.00)-($0.75)        N/A
(GAAP)
Net income per diluted share  $0.00-$0.25 (c)      N/A
(non-GAAP)

(a) Estimated non-GAAP amounts above include a net adjustment of approximately
$50 million and $200 million of the estimated revenue for utility and power
plant projects for Q4 2012 and fiscal 2012, respectively.

(b) Estimated non-GAAP amounts above for Q4 2012 reflect adjustments that
include the gross margin of approximately $85 million related to the non-GAAP
revenue adjustments that are discussed above. In addition, the estimated
non-GAAP amounts exclude charges on manufacturing step reduction program of
approximately $3 million, estimated stock-based compensation expense of
approximately $3 million, and estimated non-cash interest expense of
approximately $1 million.

(c) Estimated non-GAAP amounts above for Q4 2012 reflect adjustments that
include the gross margin of approximately $85 million related to the non-GAAP
revenue adjustments that are discussed above. In addition, the estimated
non-GAAP amounts exclude charges on manufacturing step reduction program of
approximately $3 million, estimated stock-based compensation expense of
approximately $10 million, estimated restructuring charges of approximately
$19 million, estimated non-cash interest expense of approximately $12 million,
estimated acquisition and integration costs of approximately $1 million,
amortization of intangible assets of approximately $1 million, and the related
tax effects of these non-GAAP adjustments.

The following supplemental data represents the adjustments, individual charges
and credits that are included and/or excluded from SunPower's non-GAAP
financial measures for each period presented in the Condensed Consolidated
Statements of Operations contained herein.



               SUPPLEMENTAL DATA
               (In thousands)
               THREE MONTHS ENDED
               September 30, 2012
               Revenue            Cost of revenue        Operating expenses                                   Benefit
                                                                                                         Other     from
                                                             Research    Selling,                      income     (provision
               AMERICAS EMEA   APAC AMERICAS  EMEA    APAC   and          general         Restructuring (expense), for)
                                                             development and             charges       net       income
                                                                          administrative                           taxes
Utility and             $    $             $    $                                                $      $    
power plant    $             $             $       $        $                  
projects       (42,268)  -       36,453 -         -     -          -      -          -         -
                                -
Amortization
of intangible  -        -      -    42        751     -      -            1,829           -              -          -
assets
Stock-based
compensation   -        -      -    1,589     795     368    1,045        5,474           -              -          -
expense
Goodwill and
other
intangible     -        -      -    -         -       -      -            59,581          -              -          -
asset
impairment
December 2011
Restructuring  -        -      -    -         -       -      -            -               2,098          -          -
Plan
Acquisition
and            -        -      -    15        5       4      -            1,495           -              -          -
integration
costs
Change in
European       -        -      -    -         -       -      -            -               224            -          -
government
incentives
April 2012
Restructuring  -        -      -    -         -       -      -            -               8,222          -          -
Plan
Charges on
manufacturing  -        -      -    3,958     1,444   1,034  -            -               -              -          -
step reduction
program
Non-cash
interest       -        -      -    308       112     81     3            22              -              13,464     -
expense
Gain on share
lending        -        -      -    -         -       -      -            -               -              (50,645)   -
arrangement
Tax effect     -        -      -    -         -       -      -            -               -              -          4,532
               $      $         $     $    $    $       $        $           $      $    
               (42,268)     -     42,365 3,107        1,048         68,401        10,544         (37,181)   
                         -                          1,487                                                        4,532
               July 1, 2012
               Revenue            Cost of revenue        Operating expenses                                   Benefit
                                                                                                         Other     from
                                                             Research    Selling,                      income     (provision
               AMERICAS EMEA   APAC AMERICAS  EMEA    APAC   and          general         Restructuring (expense), for)
                                                             development and             charges       net       income
                                                                          administrative                           taxes
Utility and             $    $             $    $                                                $      $    
power plant    $             $              $       $        $                  
projects       54,824   -      (39,898) -       -     -           -       -           -          -
                                -
Amortization
of intangible  -        -      -    42        782     -      -            1,871           -              -          -
assets
Stock-based
compensation   -        -      -    2,025     1,398   492    1,095        6,357           -              -          -
expense
December 2011
Restructuring  -        -      -    -         -       -      -            -               3,064          -          -
Plan
Acquisition
and            -        -      -    7         5       2      -            1,288           -              -          -
integration
costs
Change in
European       -        -      -    (263)     (109)   196    -            -               (37)           -          -
government
incentives
April 2012
Restructuring  -        -      -    -         -       -      -            -               44,572         -          -
Plan
Charges on
manufacturing  -        -      -    2,470     1,648   534    -            -               -              -          -
step reduction
program
Non-cash
interest       -        -      -    205       137     44     3            22              -              7,836      -
expense
Mark-to-market -        -      -    -         -       -      -            -               -              9          -
derivatives
Tax effect     -        -      -    -         -       -      -            -               -              -          3,315
                        $    $                     $                                                $      $    
               $             $     $          $       $        $                     
               54,824   -      (35,412) 3,861  1,268 1,098          9,538       47,599        7,845      3,315
                                -
               October 2, 2011
               Revenue            Cost of revenue        Operating expenses                                   Benefit
                                                                                                         Other     from
                                                             Research    Selling,                      income     (provision
               AMERICAS EMEA   APAC AMERICAS  EMEA    APAC   and          general         Restructuring (expense), for)
                                                             development and             charges       net       income
                                                                          administrative                           taxes
Amortization            $    $   $     $    $                                                $      $    
of intangible  $                          $       $        $                  
assets            -  -      42        21       -     -         6,619        -           -          -
                                -
Stock-based
compensation   -        -      -    1,897     1,562   251    1,608        6,531           -              -          -
expense
Goodwill and
other
intangible     -        -      -    -         -       -      -            349,758         -              -          -
asset
impairment
Acquisition
and            -        -      -    -         -       -      -            429             -              -          -
integration
costs
Amortization
of promissory  -        -      -    -         -       -      -            134             -              -          -
notes
Change in
European       -        -      -    -         -       -      -            -               637            -          -
government
incentives
Non-cash
interest       -        -      -    171       196     28     2            20              -              6,363      -
expense
Mark-to-market -        -      -    -         -       -      -            -               -              (472)      -
derivatives
Gain on sale
of equity
interest in    -        -      -    -         -       -      -            -               -              4,328      -
unconsolidated
investee
Tax effect     -        -      -    -         -       -      -            -               -              -          6,101
                        $    $   $             $                                                           $    
               $                    $        $       $        $        $        
                  -  -      2,110    1,779  279    1,610        363,491         637              10,219 6,101
                                -
               NINE MONTHS ENDED
               September 30, 2012
               Revenue            Cost of revenue        Operating expenses                                   Benefit
                                                                                                         Other     from
                                                             Research    Selling,                      income     (provision
               AMERICAS EMEA   APAC AMERICAS  EMEA    APAC   and          general         Restructuring (expense), for)
                                                             development and             charges       net       income
                                                                          administrative                           taxes
Utility and             $    $             $    $                                                $      $    
power plant    $             $              $       $        $                  
projects       98,759   -      (73,890) -       -     -           -       -           -          -
                                -
Amortization
of intangible  -        -      -    125       2,341   -      -            5,633           -              -          -
assets
Stock-based
compensation   -        -      -    4,743     3,158   1,125  3,920        20,233          -              -          -
expense
Goodwill and
other
intangible     -        -      -    -         -       -      -            59,581          -              -          -
asset
impairment
December 2011
Restructuring  -        -      -    -         -       -      -            -               8,086          -          -
Plan
Acquisition
and            -        -      -    26        10      6      -            3,931           -              -          -
integration
costs
Change in
European       -        (193)  -    4,029     3,364   1,476  -            -               309            -          -
government
incentives
April 2012
Restructuring  -        -      -    -         -       -      -            -               52,794         -          -
Plan
Charges on
manufacturing  -        -      -    6,428     3,092   1,568  -            -               -              -          -
Step Reduction
Program
Non-cash
interest       -        -      -    731       425     190    9            67              -              27,914     -
expense
Mark-to-market -        -      -    -         -       -      -            -               -              (4)        -
derivatives
Gain on sale
of equity
interest in    -        -      -    -         -       -      -            -               -              2,753      -
unconsolidated
investee
Gain on share
lending        -        -      -    -         -       -      -            -               -              (50,645)   -
arrangement
Tax effect     -        -      -    -         -       -      -            -               -              -          14,955
                        $    $                     $                                                           $    
               $              $     $           $       $        $           $       
               98,759  (193)    (57,808) 12,390 4,365 3,929         89,445        61,189         (19,982) 14,955
                                -
               October 2, 2011
               Revenue            Cost of revenue        Operating expenses                                   Benefit
                                                                                                         Other     from
                                                             Research    Selling,                      income     (provision
               AMERICAS EMEA   APAC AMERICAS  EMEA    APAC   and          general         Restructuring (expense), for)
                                                             development and             charges       net       income
                                                                          administrative                           taxes
Amortization            $    $   $     $    $                                                $      $    
of intangible  $                           $       $        $                  
assets            -  -      362       63       -     -        20,189         -           -          -
                                -
Stock-based
compensation   -        -      -    4,959     5,100   845    5,112        21,813          -              -          -
expense
Goodwill and
other
intangible     -        -      -    -         -       -      -            349,758         -              -          -
asset
impairment
Acquisition
and            -        -      -    -         -       -      -            13,552          -              -          -
integration
costs
Amortization
of promissory  -        -      -    -         -       -      -            2,122           1,364          -          -
notes
Change in
European       -        -      -    17,379    29,125  1,959  -            -               12,581         4,672      -
government
incentives
Non-cash
interest       -        -      -    1,017     983     185    2            22              -              18,903     -
expense
Mark-to-market -        -      -    -         -       -      -            -               -              (331)      -
derivatives
Gain on sale
of equity
interest in    -        -      -    -         -       -      -            -               -              4,328      -
unconsolidated
investee
Gain on change
in equity
interest in    -        -      -    -         -       -      -            -               -              (322)      -
unconsolidated
investee
Tax effect     -        -      -    -         -       -      -            -               -              -          16,482
                        $    $                     $                                                           $    
               $            $     $           $       $        $           $       
                  -  -       23,717 35,271 2,989 5,114        407,456         13,945          27,250 16,482
                                -



SOURCE SunPower Corp.

Website: http://www.sunpowercorp.com
Contact: Investors, Bob Okunski, +1-408-240-5447,
Bob.Okunski@sunpowercorp.com, or Media, Helen Kendrick, +1-408-240-5585,
Helen.Kendrick@sunpowercorp.com